CHEUNG YUK MUNN MARIA v. FRASER & CO INTERNATIONAL PROPERTY LTD

DCCJ 3899/2017

[2022] HKDC 1359

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3899 OF 2017

-----------------------------------

BETWEEN

------------------------------------

----------------------------------

JUDGMENT

---------------------------------

Introduction

1.  The defendant was a property agent selling United Kingdom properties to purchasers in Hong Kong. It employed the plaintiff as a sales consultant. The plaintiff claims against the defendant outstanding commission of HK$134,137.30 on 9 property transactions she claims to have helped conclude.

2.  The present case has a chequered history. The plaintiff commenced a claim at the Labour Tribunal (LBTC 2301/2016) on 20 July 2016 to recover the outstanding commission. The presiding officer adjourned LBTC 2301/2016 sine die with liberty to restore on 5 October 2016, and transferred her claim to this court (ie the present case). As far as I can understand from the papers, the plaintiff applied to restore LBTC 2301/2016 after the defendant attempted to strike out the present case for duplicity of proceedings. Although the Labour Tribunal allowed the plaintiff to restore LBTC 2301/2016, it then declined jurisdiction on 26 August 2017, and transferred the plaintiff’s claim back to the present case, because the plaintiff stated that she wished to additionally sue a company in the United Kingdom. But since then, the plaintiff has not applied to join any additional defendant in the present case.

3.  The trial was set down before this court with 6 days reserved. On the 1^st day of trial (16 November 2022), the defendant did not send any representative to attend the trial. The defendant was legally represented up to 6 October 2022. Since its solicitors attended the Pre-Trial Review on 14 September 2022, it must have reasonable notice of the Order made by Deputy Judge Rebecca Lee at that hearing, that the trial was to commence on 16 November 2022. The trial bundles were also prepared by the defendant’s solicitors before they ceased to act for the defendant. I am satisfied that the defendant consciously decided not to attend the trial. I decided to proceed with the trial in its absence.

The plaintiff’s evidence

4.  The plaintiff gives evidence at trial. The following is a summary of her evidence given in court, and also in the witness statements.

5.  By a written contract dated 19 November 2010, Fraser & Co (HK) Limited (“Fraser HK”) employed the plaintiff as a sales consultant at its Hong Kong office. The plaintiff’s pay was stated as follows:

5.1 The plaintiff’s salary would be HK$15,000.00 per month; and

5.2 The plaintiff would be entitled to commission on “personal net fees brought into the company in a financial year”, calculated at 15% on the first £100,000.00, and 20% thereafter.

6.  It appears that the plaintiff accepts that “personal net fees brought into the company” refers to the revenue received by Fraser HK as a result of the property transactions concluded by the plaintiff. Fraser HK’s revenue was also in the form of commission, this time paid by the developers, on the property transactions it concluded. The plaintiff states that the commission received by Fraser HK was typically 2.5% of the price of the property.

7.  Since March 2011, the plaintiff’s basic salary was increased to HK$25,000.00 per month as the defendant asked her to also oversee its operations in Hong Kong.

8.  By way of a letter dated 31 March 2011 and issued by the defendant, which was countersigned and acknowledged by the plaintiff on 18 May 2011, the plaintiff’s employment with Fraser HK was transferred to the defendant[1]. The defendant acknowledged that the terms and conditions of the original employment contract (see §5 above) would remain unchanged.

9.  The plaintiff claims that, during her employment with the defendant, she helped conclude the sales of 14 properties. However, she was not paid commission on 9 of such sales. I tabulate below the 9 property transactions[2]:-

Property Name	Price	Completion date
Lanterns Court
1. Apartment AG-15	£235,000.00	28 February 2011
2. Apartment A1-35	£269,000.00	22 February 2011
3. Apartment A4-26	£250,000.00	14 March 2011
4. Apartment A7-11	£290,000.00	31 January 2011[3]
5. Apartment A8-01	£305,000.00	21 March 2011
6. Apartment B6-11	£320,000.00	19 August 2011
The Highgate
7. Apartment No.87	£320,000.00	6 March 2012
8. Apartment No.46	£450,000.00	16 June 2011
Priory Terrace
9. Apartment B	£410,000.00	27 March 2012
Total:	£2,849,000.00

10.  For ease of reference, I will refer to the 9 properties in the tables above according to the number I have given them, ie “Property 1”, “Property 2” etc.

11.  The price of the remaining 5 property transactions for which the plaintiff received commission came to £1,487,000.00[4]. The plaintiff stated that the total price for the 14 transactions was £4,346,000.00[5].

12.  The plaintiff says that the outstanding commission should be calculated as follows:

The defendant should have received commission as follows:

£4,346,000.00 x 2.5%

= £108,650.00

The plaintiff should get 15% on the first £100,000.00, and 20% of the remaining £8,650.00. Thus, the total commission due to her should be

£100,000.00 x 15% + £8,650.00 x 20%

= £16,730.00

She was paid HK$77,664.77[6] as commission in June and July 2011. She says that the average exchange rate for GBP/HKD between 2011 and 2022 was 12.66. So, she was still owed:

£16,730.00 x 12.66 – HK$77,664.77

= HK$134,137.03[7]

13.  The plaintiff has put forward, inter alia, the following documents to support her claim:

13.1 Booking forms for each of the 9 property transactions. These booking forms were signed by the respective purchasers when they paid an initial deposit on the respective properties.

13.2 Copies of email correspondence between the plaintiff and her colleagues or the purchasers, showing that she was involved in lining up the 9 property transactions.

14.  I note there is a discrepancy between the plaintiff’s case and the documents with respect to Property 6. The booking form stated that the price for Property 6 was £310,000.00 but not £320,000.00. I am also shown an email the plaintiff sent to Mr Robert Fraser of the defendant on 29 December 2014, by which she chased for the outstanding commission. In this email, the price for Property 6 was stated to be £310,000.00. In the trial bundles, I have not detected any evidence which may prove that the price for Property 6 was £320,000.00 instead of £310,000.00.

The defence

15.  The defendant does not dispute that the plaintiff was first employed by Fraser HK and then the defendant as per her employment contract (see §5 above).

16.  The defendant raises the following arguments in response to the Statement of Claim:

16.1 Whilst it agrees that the typical commission it received from the developers was 2.5% of the price of a property, the commission received in some cases would be less when a transaction was concluded by the defendant and another agent. As such the “personal net fees brought into the company” by the plaintiff could not be as high as the plaintiff claims in the Statement of Claim.

16.2 Apart from the 5 property transactions for which commission was already paid to the plaintiff, there is no record showing the plaintiff’s involvement in the 9 property transactions that she said she helped conclude.

17.  Mr Robert Fraser and Mr Neil Jensen have filed their respective witness statements in support of the defence.

18.  According to Mr Fraser, since 2009, the defendant promoted properties in conjunction with Colliers International Agency Limited (“Colliers”). Properties in Lanterns Court and The Highgate were sold to purchasers with the defendant and Colliers as joint agents. As such, the defendant would need to split the 2.5% commission it received from the developers.

19.  The defendant discovered a written agreement dated 9 October 2009 it entered with Colliers. The defendant agreed to source residential properties in the United Kingdom for sale by Colliers in Hong Kong and other countries in the Asia Pacific region. The commission received from developers would be split in the following manner:

19.1 Pre-sale: the agent concluding the sale would receive 70% of the commission, with the other agent receiving 30%;

19.2 Exhibition sale: Colliers would receive 60% of the commission, with the defendant getting 40%; and

19.3 Post-sale: the agent concluding the sale would receive 70% of the commission, with the other agent receiving 30%.

20.  There was no definition as to what constituted “Pre-sale”, “Exhibition sale” and “Post-sale” under this agreement. Mr Fraser does state, however, in his statement that exhibitions would be arranged by Colliers and the defendant for promoting the UK residential properties in Hong Kong. Sales might be concluded during the exhibition.

21.  Mr Fraser further states that, when a purchaser decided to buy a property, a reservation form or a booking form would be used. The form would state the identity of the “negotiator”, ie the staff member who helped conclude the sale. A director of the defendant would countersign on the form to confirm the identity of the negotiator. The negotiator would then be entitled to his/her commission – 50% following the exchange of contract; and 50% following the completion of the transaction. But the defendant’s record did not show that the plaintiff was the negotiator for the 9 property transactions she claimed to have helped conclude.

22.  Mr Jensen joined the defendant in October 2012. He was authorized by the defendant to attend the hearings of LBTC 2301/2016 on its behalf.

23.  From the documents submitted by the defendant to the presiding officer in LBTC 2301/2016, one can see its assertion that the commission for Properties 1, 2, 3, 5, 7 and 9 was paid to Mr Richard Levene, the plaintiff’s colleague. For Properties 6 and 8, it claimed that its record did not show who was the negotiator. Lastly, for Property 4, it stated that the plaintiff’s name could be found on the relevant booking form.

24.  The defendant also stated that for Properties 1 to 9, it sold them as a joint agent. It set out the relevant information in various tables, and calculated the plaintiff’s entitlement if she were entitled to any commission at all. I produce the relevant part of the defendant’s various tables as follows:

Property	Price	% commission for the defendant
Lanterns Court
1. Apartment AG-15	£235,000.00	£235,000 x 2.5% x 40% = £2,350.00
2. Apartment A1-35	£269,000.00	£269,000 x 2.5% x 85% = £5,716.25
3. Apartment A4-26	£250,000.00	£250,000 x 2.5% x 40% = £2,500.00
4. Apartment A7-11	£290,000.00	£290,000 x 2.5% x 40% = £2,900.00
5. Apartment A8-01	£305,000.00	£305,000 x 2.5% x 70% = £5,337.50
6. Apartment B6-11	£310,000.00	£310,000 x 2.5% x 40% = £3,100.00
The Highgate
7. Apartment No.87	£320,000.00	£320,000 x 1.25% x 40% = £1,486.20
8. Apartment No.46	£450,000.00	No record
Priory Terrace
9. Apartment B	£410,000.00	£410,000 x 1.25% x 70% = £3,587.50
Total:		£4,046.62

25.  The plaintiff’s entitlement would thus be £606.99 (£4,046.62 x 15%).

26.  I notice that the defendant did not produce the primary documents showing that it was indeed paid by developers as per the table above, ie that it only received part of the developer’s commission because it was only a joint agent.

Analysis

27.  In the absence of any challenge from the defendant, I accept that, on a balance of probabilities, the plaintiff’s evidence is largely true and accurate (except on the points I specifically find below). I find as a fact that she was indeed employed by Fraser HK and later the defendant as a sales consultant. The defendant agreed to pay her 15% of the first £100,000.00 commission the defendant received from the developers in a financial year, and 20% thereafter.

28.  I also accept that the plaintiff was the person responsible for the 9 property transactions for which she says she has not received commission. So, she is entitled to her share of commission according to her employment contract.

29.  I do not find the defendant’s denial of the plaintiff’s involvement credible. The booking forms do not appear to me to have any specific place to enter the information of a negotiator. For commission paid to Mr Levene, I do not see on the booking forms his name or any confirmation in the form of a director countersigning on the forms that he was the negotiator. I do not think the defendant’s documents show that the plaintiff’s evidence is unbelievable.

30.  Whilst the plaintiff accepts that she does not know how much the defendant actually received from the developers as commission for those 9 property transactions, she denies that the contract between the defendant and Colliers was relevant to the calculation of her commission. She denies that those 9 property transactions involved the joint agency of the defendant and Colliers.

31.  I acknowledge that some booking forms in relation to the 9 property transactions bear the logo of Colliers. Apart from that, there is no evidence showing whether the defendant and Colliers were indeed joint agents with respect to those sales. Since the defendant chose to be absent from the trial, and there is no objective evidence to back up its claim that it did not receive the whole 2.5% commission with respect to those 9 property transactions, I prefer the plaintiff’s evidence and reject the defendant’s claim in this respect.

32.  I reject the plaintiff’s evidence with respect to 3 matters.

33.  First, I set out above the discrepancy regarding the price of Property 6. On a balance of probabilities, I think it is more likely than not that the booking form reflects the correct price. I find the price of Property 6 to be £310,000.00 instead of £320,000.00.

34.  Second, I disagree with the way she calculates her commission entitlement. Even though her employment contract did not define the start date and end date of a financial year, one can see from the table at §9 above that the 9 property transactions could not have been completed within the same financial year in any way. As such, it must be the case that, spreading throughout 2 financial years, the plaintiff brought in less than £100,000.00 commission for the defendant in each financial year. Therefore, I find that the plaintiff is only entitled to 15% of the defendant’s commission for the 9 property transactions.

35.  Third, I do not find it right to use 12.66 as the exchange rate for all of the commission the plaintiff is entitled to.

36.  In a contractual claim, damages should be awarded in the currency chosen by the contractual parties. If there is no such express choice, damages should be awarded in the currency which most truly expresses the plaintiff’s loss: see e.g. Sabah Shipbuilding, Repairing and Engineering Sdn Bhd & Anr v Houston Engineering and Equipment Ltd HCA 1810/1976 (Cons J; 16 November 1978) at §§16-18. I think the logic is the same for a debt claim under a contract.

37.  The plaintiff’s employment contract did not mandate the currency by which she should be paid her commission. I have no hesitation to find that the plaintiff should be compensated in Hong Kong dollars. She rendered her service to the defendant in Hong Kong. She was paid her salaries, and also part of her commission, in Hong Kong dollars. The plaintiff must have felt her loss in terms of Hong Kong dollars.

38.  I also note that, in Hassei Trading (HK) Limited v Hang Woo Ship Management Limited [2021] HKDC 109, the court accepted the plaintiff’s submissions that, if the plaintiff proved that the defendant was at fault, it should not suffer from further losses as a result of depreciation of the foreign currency: see §87.

39.  It is well known that, since the UK’s referendum to exit the European Union in 2016, the British pound became considerably weaker against US dollar, and hence Hong Kong dollar. In my judgment, the plaintiff ought not be caught by this depreciation in value, and sustain further loss as a result. I find that the exchange rate to be adopted should be the one at the time when the defendant committed its breach.

40.  The plaintiff’s employment contract did not specify when her commission would be payable. I also find her evidence unclear on this point; she only said she would be paid by the end of each month. In such circumstances, I find that the GBP/HKD exchange rate as at the date of completion for each of the 9 property transactions should be adopted. I take judicial notice of the exchange rate prevailing on those dates, as the information is freely available on the Internet.

41.  I calculate the plaintiff’s commission as follows (the dates in brackets denote the date on which the particular exchange rate was fixed):

Property	Commission in GBP	Commission in HKD
Lanterns Court
1. Apartment AG-15	£235,000 x 2.5% x 15% = £881.25	£881.25 x 12.56 (28 Feb 2011) = HK$11,068.50
2. Apartment A1-35	£269,000 x 2.5% x 15% = £1,008.75	£1,008.75 x 12.63 (22 Feb 2011) = HK$12,740.51
3. Apartment A4-26	£250,000 x 2.5% x 15% = £937.50	£937.50 x 12.53 (14 Mar 2011) = HK$11,746.88
4. Apartment A7-11	£290,000 x 2.5% x 15% = £1,087.50	£1,087.50 x 12.37 (31 Jan 2011) = HK$13,452.38
5. Apartment A8-01	£305,000 x 2.5% x 15% = £1,143.75	£1,143.75 x 12.66 (21 Mar 2011) = HK$14,479.88
6. Apartment B6-11	£310,000 x 2.5% x 15% = £1,162.50	£1,162.50 x 12.85 (19 Aug 2011) = HK$14,938.13
The Highgate
7. Apartment No.87	£320,000 x 2.5% x 15% = £1,200.00	£1,200.00 x 12.32 (6 Mar 2012) = HK$14,784.00
8. Apartment No.46	£450,000 x 2.5% x 15% = £1,687.50	£1,687.50 x 12.60 (16 Jun 2011) = HK$21,262.50
Priory Terrace
9. Apartment B	£410,000 x 2.5% x 15% = £1,537.50	£1,537.50 x 12.38 (27 Mar 2012) = HK$19,034.25
Total:	£10,646.25	HK$133,507.03

Conclusion and orders

42.  I grant a judgment in favour of the plaintiff for HK$133,507.03. Interest is awarded on the judgment sum at 1% over HSBC prime from the date of the service of the Statement of Claim to the date of judgment, and at judgment rate thereafter up to the date of payment.

43.  I give an order nisi that the defendant is to pay the plaintiff’s costs, including all costs reserved, in the present case and in LBTC 2301/2016.

44.  I do not think it is procedurally economical to order normal taxation of the plaintiff’s costs. The present case has already dragged on for more than 5 years. Since both the plaintiff and the defendant are acting in person, I can foresee that the plaintiff will need to incur much energy and time if she seeks taxation of her costs. Substantial judicial resources will also likely be devoted to attend to such taxation.

45.  Therefore, I decide to exercise my power under Order 62 rule 9(4)(b) of the Rules of the District Court to summarily assess the plaintiff’s costs to be $50,000.00. In coming to this sum, I have taken into account the amount of work the plaintiff did in preparation of the present case and in LBTC 2301/2016, and the provisions of Order 62 rule 28A regarding the costs of a litigant in person.

46.  The plaintiff expressed her expectation before me, and indeed also before the presiding officers hearing LBTC 2301/2016, that she hoped the court would show her how to enforce a judgment against the defendant. As I stated during the trial, enforcement is typically a matter for the parties. It is not for the court to comment, in adjudicating her case, the chances of success in enforcing any judgment against the defendant, or the practical usefulness of doing so. The plaintiff will need to obtain legal advice on her own on this matter.