JOBE EBOU AND ANOTHER v. MUSE PRODUCITON LTD

HCLA 15/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 15 OF 2010

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO. 197 OF 2010)

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BETWEEN

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J U D G M E N T

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1.  This is an appeal from the decision of the Presiding Officer of the Labour Tribunal dated 16^th July 2010 dismissing all claims made by the 1^st Claimant, the Appellant herein. On 19^th August 2010, the 1^st Claimant sought to review the Presiding Officer’s decision. The application for review was equally dismissed by the Presiding Officer. The decision of the Presiding Officer resulted in an award/order made on 26^th day of July 2010 and filed on 25^th August 2010 (“the LT Order”).

2.  In LBTC 197 of 2010 (“the LT Claim”), which was instigated on 14^th January 2010, the 1^st Claimant claimed for:-

(i) arrears of wages in the sum of HK$12,500.00 (being wages for 5 performances at HK$2,500 each in respect of 1/8/09; 8/8/09; 15/8/09, 22/8/09 and 29/8/09);

(ii) costs of headphone monitor in the sum of HK$2,500; and

(iii) cost of accommodation in the sum of HK$3,000 (being HK$600 per day for 5 days on 16/8/09; 21/8/09; 23/8/09; 28/8/09 and 30/8/09).

3.  The 1^st Claimant was granted leave by Mr. Justice To on 15^th November 2010 to appeal against the LT Order upon the following grounds:

“1. The presiding officer erred in law in the construction of clause 1.5 of the Contract in holding that the dates of performance set out in Schedule B of the Contract were provisional only;

2. As a result, the presiding officer erred in holding that the Defendant had no obligation to engage the 1^st Claimant in all the shows as set out in the Schedule;

3. The presiding officer erred in the construction of clause 8.2 of the Contract in holding that the Defendant’s right to amend the show content and Schedule B of the Contract includes the right to cancel the dates of performance set out in the schedule;

4. Having so erred in the construction of the Contract, the presiding officer applied the wrong test in determining that the Defendant had valid and reasonable reason to cancel the August Saturday shows of the 1^st claimant. In particular, the presiding officer erred in law in failing to consider the Defendant’s obligation to give notice to the 1^st claimant under clause 4.1.2 of the Contract before canceling the August Saturday shows;

5. The presiding officer’s finding that the 1^st claimant accepted the cancellation of the August Saturday shows was contrary to evidence; and

6. On the accommodation claim, the presiding officer erred in law in finding that the 1^st Claimant did not suffer any loss.”

Backgrounds

4.  The 1^st Claimant was employed by the Defendant as a bass player in musical performances at the “City of Dreams” (“COD”), a casino in Macau.  The name of his band was “The Company”.  The 1^st Claimant’s employment was embodied in a written Contract of Employment (“the Contract”) dated 19^th June 2009.  The following are the relevant terms of the Contract:-

Clause 1.3

“The Company [Muse Production Limited] shall pay the performer a fee of HK$2,500 (Two Thousand and Five Hundred Hong Kong Dollars) per formal performance.”

Clause 1.4

“The Contract Period … shall commence:

1.4.1 During the months of June, July and August, 2009. The Period shall end at the end of August 2009 and may be extended only by mutual agreement …

1.4.3 One rehearsal each week without extra payment in Hong Kong or Macau. As to prepare new songs with the band every week to meet the COD demand.”

Clause 1.5

“A Schedule attached to this Contract, “Schedule B”, defines dates of the performance.

1.5.1 The Performer agrees to comply with the schedule provided in Schedule B.

1.5.2 If changes are required to the schedule, The Company shall notify The Performer as soon as possible.

1.5.3 The Company and the Performer shall agree any changes to be made in the schedule prior to the schedule becoming effective.”

Clause 1.7

“Unless the prior approval of The Company is obtained, The Performer shall not perform or supply any services similar to those under this Contract at any other venue or location in Macau during The Period.”

Clause 1.8

“The Performers shall at all time comply with the performance schedule as agreed. In case any change needs to be made to the performance schedule after it has been agreed, the Company will notify the Performer as soon as possible. The Company and the performer shall agree on any changes made to the schedule.”

Clause 2.3

“The Company Obligations.

2.3.1 The Company shall compensate The Performer for expenses to travel to and from the Venue as well as provide accommodation whilst in Macau as follows:-

2.3.1.1 Reimburse the Performer the Turbo Jet Ticket of the ferry to/from Macau.

2.3.1.2 Provide accommodation in a reasonable hotel close to the location and venue of performance for each night performing and for a reasonable period prior to performing (no room sharing).”

Clause 3.1

“The Performer represents and warrants that the performance shall:

3.1.2 Be performed in accordance with the performance schedule specified by the Company at all times.”

Clause 4

“Failure by the Performer to honour these warranties and responsibilities or its Obligations Related to Service may be grounds for The Company to take corrective action. The Performer shall be liable to pay the Company up to 100% of the performance fee for such misconduct in compensation, if without due notice:

4.1.1 If The Company is dissatisfied with Performer for reasons including excessive absences, unsatisfactory performance of duties …, then The Company shall have the right to replace the Performer in an expeditious manner.

4.1.2 Notwithstanding the foregoing, The Company shall give explicit notice to The Performer of the Company’s dissatisfaction before replacing the Performer. If such satisfaction can be reasonably remedied without any substituting performer, the company shall have a reasonable period of time to remedy such situation.

4.1.3 If at any time The Performer willfully disobeys a lawful and reasonable instruction or direction from The Company, …., then The Performer may be dismissed by the Company summarily without any notice period.”

Clause 8.2

“Muse Production Limited reserves the right to amend the show content and schedule. In case of any dispute, the decision of Muse Production Limited is final and conclusive. ”

5.  Schedule B of the Contract contained the following terms:-

Event Period

“1. Event Period: every Friday, Saturday and Sunday starting from 19^th June to 31^st August2009.”

The Services shall include:

“1. Up to 180 minutes show a day within 6 hours

2. Time Schedule of the Show:

Date June: 19th -21st , 26th - 28th July:  1st, 3rd - 5th, 10th - 12th , 17th – 19th , 24th – 26th & 31st August:  1st, 2nd , 7th – 9th , 14th – 16th , 21st – 23rd , 28th – 30th

- Each of the exact show time/rehearsal schedule within the time schedule is subject to the confirmation of the Company.

- Weekly Schedule will be provided; Performer should inform the Company 7 days in advance for any leave application.”

6.  At the end of July 2009, Mr. Lau Chun Kong (“Lau”), the Defendant’s director at the material time, informed the 1^st Claimant that the Saturday shows in August would be cut and that the 1^st Claimant would no longer be required to perform on Saturdays, starting from the month of August.

7.  The 1^st Claimant testified at the trial but called no other witness.  In relation to his claims for arrears of wages, his evidence was that all the shows as stated in Schedule B should have been provided to him by the Defendant.  The event period in Schedule B referred to every Friday, Saturday and Sunday starting from 19^th June 2009 to 31^st August 2009.  He contended that the Defendant was in breach of the Contract in failing to provide to him the August Saturday shows (a total of 5 shows) for which he should be able to earn a total of HK$12,500.

8.  The 1^st Claimant vehemently denied allegations made by the Defendant in respect of “performance at stage”, such as the failure to play with correct key and failure to play sufficient new Chinese songs to the audience.  The 1^st Claimant said that the Defendant’s allegations were totally unfounded.  He said that the genuine reason behind the cutting of the Saturday shows in August was because the Defendant wanted to save money.

9.  The 1^st Claimant contended that the word “amend” in clause 8.2 of the Contract did not mean that the Defendant could cancel shows.  He argued that the Defendant was only entitled to change the date of the performance but not to cancel it.  He referred to an email dated 25^th July 2009 from Lau which was in these terms:-

“I have received a email from Heidi about the new schedule of August. I’m sorry to inform you that “The Company” will only perform on Friday and Sunday starting from 1^st August. The email stated that is about ‘Due to the changes of operation strategy from the management’. In my understanding, it’s about cutting budget and Chinese songs problem.”

Immediately after receipt of the above email, the 1^st Claimant protested to Lau through an email dated 27^th July 2009. In this email, the 1^st Claimant requested for payment of August Saturday show fees. The 1^st Claimant said that Lau did nothing about it and eventually, he was not given any Saturday shows in August. The 1^st Claimant however confirmed that he had received a sum of HK$2,500 from the Defendant in respect of one August Saturday when there was no performance at all on that Saturday. He also said that after his last show on 30^th August 2009, he did not make any further complaint to Lau for cancellation of the shows. He further said that he did not make such complaint to Lau when he collected the final payment from the Defendant on 30^th September 2009.

10.  The Defendant called 4 witnesses to testify and they were:  (1) Lau; (2) Mr. Yeung Chi Wai (“Yeung”);  (3) Miss Florence Lui (“Lui”) and (4) Mr. Lee Wai Davy (“Lee”).  The Defendant carried on business as an agent arranging musical players for clients.  COD was a client of the Defendant. 

11.  Lau said that in June 2009, COD posted a notice in the resting room of band players reminding all bands not to play the same songs repeatedly.  In around July, COD informed Lau that “the Company” did not have sufficient Chinese songs to perform. 

12.  Lui was also a director of the Defendant.  She said that she had all along monitored the performance of “the Company” through communications with the management of COD.  In or about mid-June, she received a complaint from Miss Heidi Wong of COD (“Heidi”) that the 1^st Claimant’s band did not have sufficient Chinese songs to perform at stage.  Heidi warned that if the band showed no improvement, all shows in August 2009 would be cancelled. Lui said that she relayed COD’s position to the 1^st Claimant and urged the band to improve.  There was no improvement and in mid-July, Heidi informed Lui that COD decided to cut all shows of “the Company” starting in August 2009.  Lui tried to dissuade Heidi and urged her to at least keep shows of “the Company” on Fridays and Sundays.  Heidi eventually accepted Lui’s suggestion and cut only the Saturday shows of “the Company”.

13.  Lau said that upon receiving the new schedule for August from COD, he immediately sent an email to the 1^st Claimant informing him of the new arrangement in August.  That was the 25^th July 2009 email.  By another email dated 27^th July, Lau also sent to the 1^st Claimant the new August schedule showing that “the Company” was only required to perform on Fridays and Sundays.  Lau acknowledged receiving the 1^st Claimant’s protesting email which was also dated 27^th July.  From the time records in the 2 emails both dated 27^th July, it seems that Lau received the 1^st Claimant’s protest before he sent his email bearing the new August schedule.  Lau said he had explained to the 1^st Claimant that the decision was made by COD’s management which was beyond the control of the Defendant.  According to Lau, the 1^st Claimant eventually accepted the new arrangement and from August onwards, he did not receive any further complaint from the 1^st Claimant.  In August, “the Company” merely performed on Fridays and Sundays.  Eventually, when the 1^st Claimant came up to the Defendant’s office to collect his final payment for the shows, the 1^st Claimant did not make any complaint about the cancellation of shows and did not challenge the final amount of show fees due to and collected by him.  Lau also exhibited the payment slip for the fees of the August shows bearing the signature of the 1^st Claimant as receipt acknowledgment.  Lau further explained that as the new arrangement for August was only conveyed to the 1^st Claimant towards the end of July, the Defendant had paid him an extra sum of HK$2,500 as one August Saturday show for compensation.

14.  In her Reasons for Decision, the Presiding Officer did not set out the evidence of the other two witnesses for the Defendant.  From the witness statement of Yeung, he was, at the material time, a programme assistant working for the Defendant.  He had since then left the Defendant.  He confirmed that COD had on divers occasions complained about the quality of performance and professionalism of “the Company”.  He spoke of his personal observation that the 1^st Claimant was the worst amongst the ten odd musicians and gave detailed descriptions.  He also confirmed that despite COD’s afore-mentioned posted notice, “the Company” was unable to provide sufficient new songs.  As for Lee, his witness statement stated that he was, at the material time, a guitarist of another band which was also engaged by the Defendant to provide performance in COD.  In August 2009, he was the substitute guitarist of “the Company”.  He gave his observations on the lack of quality and professionalism on the part of the 1^st Claimant.  As for his evidence relating to his understanding of the contractual terms governing his contract with the Defendant, it is irrelevant to the present dispute.

Construction of Contract by the Presiding Officer

15.  The Presiding Officer first referred to clause 1.5 of the Contract and in particular, sub-clauses 1.5.1 to 1.5.3.  She said that when clause 1.5 was construed as a whole, it was quite clear that the dates of performances as provided in Schedule B were “provisional” only and were not definitely promised by the Defendant.  The Presiding Officer also relied on clause 8.2 of the Contract.  She found that on a proper construction of the Contract, the Defendant had no obligation to provide all the shows as stated in Schedule B. She held that Schedule B should be construed as provisional schedule of performance only. 

16.  The Presiding Officer found all the defence witnesses to be credible witnesses and accepted their account of the events.  She then made the following findings of fact based on all the evidence presented before her:-

(1) that COD had a control over the arrangement of the performance of each musical band provided by the Defendant;

(2) that the Defendant could not unilaterally make a decision as to which singers and players performed at stage, irrespective of the views of COD;

(3) that the 1^st Claimant did not raise any objection to Lau when he said in his email (27^th July 2009) that it was COD’s complaint of insufficiency of Chinese songs performed by “the Company” and their decision to cut the shows;

(4) that Lau had made it clear to the 1^st Claimant in respect of the reasons why the shows had been cut;

(5) that it was COD’s decision to cut the August Saturday shows of “the Company”. The Presiding Officer accepted that COD had complained about the insufficiency of Chinese songs and the statistics provided by the Defendant on the number of Chinese songs played by “the Company”. She accepted Yeung’s evidence of unsatisfactory performance of “the Company” on stage;

(6) that the Defendant in fact did not have any pecuniary advantage for the cutting of the August Saturday shows of “the Company”;

(7) that the Defendant had a valid and reasonable reason to cancel the August Saturday shows of “the Company”. In particular, the Presiding Officer did not accept the 1^st Claimant’s evidence that it was the Defendant’s decision to cut the shows for saving money.

The Appeal – Construction Grounds

17.  Grounds 1 to 3 can and should be considered together as they relate to the proper construction of the parties’ rights in relation to show performances as set out in Schedule B to the Contract.

18.  With respect to the Presiding Officer, her approach to the matter caused me immediate concern.  If she were right in her construction of the Contract, in that the Defendant had no obligation to provide all the shows as stated in Schedule B which should only be construed as a provisional schedule of performance, it is difficult to understand why she need to proceed to consider and make findings on whether the Defendant had a valid and reasonable reason to cancel the August Saturday shows of “the Company”.  It would simply be in the Defendant’s straight contractual right to do so and the 1^st Claimant would have no cause to complain.  Neither would it be necessary for her to consider and make findings on whether the decision to cancel the August Saturday shows originated from COD instead of the Defendant’s own initiative.  Similarly, the Presiding Officer need not enter into the factual issues of whether COD had justifiable reasons, on account of the quality and professionalism of the 1^st Claimant’s performance, in coming to the decision of cancelling all Saturday shows in August.  I understand that it was the 1^st Claimant’s case that the Defendant cut the shows in order to save money.  However, if the construction point as held by the Presiding Officer were correct, the motive behind the Defendant’s exercise of its contractual right would be irrelevant.

19.  It is trite law that in seeking to construe an express term in a contract, the court shall have proper regard to the factual matrix surrounding the making of the contract [see Investors Compensation Scheme Ltd. v. West Bromwich Building Society [1998] 1 W.L.R. 896, at 912-913].  One of the most important factual matrix would be the nature of the contract in question.  In my judgment, the following are important features of the Contract which should be borne in mind before one embarks upon the proper interpretation of the terms contained in the Contract:-

(1) The Contract related to the employment of a musical performing artist for stage performances on weekends (Fridays, Saturdays and Sundays) during a fixed period of roughly two and a half months. The 1^st Claimant’s remuneration was calculated with reference to the number of stage performances that he actually performed.

(2) Although the employment is described by Lau as “freelance” in that it did not require daily performances all through the period, it is important to note that the employment did take away the most remunerative days of every week for an entertainer. It is plain common sense that a band musician is most sought after during weekends when businesses of bars or lounges would be at their highest point.

(3) Also flowing from the “freelance” character of the 1^st Claimant’s employment is the fact that the 1^st Claimant could accept engagements from other producers or operators of entertainment establishments on those days not required by the Defendant (albeit not in Macau as prohibited under clause 1.7). It is also common sense that other producers or operators of entertainment establishments would also like to have the 1^st Claimant’s commitment on fixed dates and times for his performance. Similarly, the 1^st Claimant would need a considerable degree of certainty so as to plan his “freelance livelihood”.

(4) Further, by reason of the nature of the 1^st Claimant’s service, it is unrealistic to expect that upon short notice, the 1^st Claimant would necessarily be able to find alternative source of work, especially on just one day in the middle of every weekend.

20.  It is on the basis of the above factual matrix that I shall embark on the interpretation of various clauses in the Contract.  Clause 1.3 set out the fee of HK$2,500 per formal performance.  The period of the 1^st Claimant’s employment was defined in clause 1.4 which could be extended by mutual agreement.  Clause 1.5 described “Schedule B” as defining the dates of performances.  Schedule B set out the days on which the 1^st Claimant’s performance was required, and hence his opportunity to earn remuneration on those days.  Clause 1.5.1 required the 1^st Claimant to comply with the schedule provided in Schedule B.  Clause 1.5.2 dealt with notification for intended changes to the schedule.  In the way it was drafted, clause 1.5.2 contemplated changes at the initiative of the Defendant rather than the 1^st Claimant.  Clause 1.5.3 is important.  It required changes to be first mutually agreed upon before they could become effective.  Schedule B was no doubt mutually agreed upon at the time of execution of the Contract.  Clause 1.8 again emphasized the importance of “mutual agreement” in respect of the performance schedule.  The 1^st sentence in clause 1.8: “The Performers shall at all time comply with the performance schedule as agreed” must refer to the schedule of performance as initially set out in Schedule B and perhaps subsequently amended through parties’ mutual agreement reached pursuant to clause 1.5.3.  The remaining parts of clause 1.8 were effectively repetitions of clauses 1.5.2 and 1.5.3.  In my judgment, the imposition of clause 1.8 reinforced the need for prior mutual agreement in respect of changes to the performance schedule initially set out in Schedule B.  It would therefore seem that the Defendant cannot unilaterally alter the performance schedule, in particular by cancelling performances stipulated in Schedule B without compensating the 1^st Claimant accordingly.

21.  The Defendant however argued otherwise.  It firstly relied on clause 8.2 which, in its literal interpretation, reserved the right to the Defendant to amend “the show content and schedule”.  It even stated that in case of any dispute, the decision of the Defendant is final and conclusive.  The Defendant further relied on 2 clauses set out in bullet points in Schedule B as set out in paragraph 5 above.  In the first bullet point, it was stated that “each of the exact show time/rehearsal schedule within the time schedule is subject to the confirmation of the Company”.  In my judgment, there is no difficulty in finding that it did not entitle the Defendant to alter the schedule unilaterally as contended.  This bullet point merely dealt with “show time” and “rehearsal schedule” within an agreed performance schedule. As to the second bullet point, it simply dealt with the provision of “Weekly Schedule”.  In my judgment, such weekly schedule was meant to refer to confirmed time-table as to show time and rehearsal arrangement as afore-mentioned in the first bullet point.  It did not indicate in any sense that the Defendant was thereby entitled to unilaterally alter the performance schedule.  Neither will the requirement to submit leave application 7 days in advance assist the Defendant in its contention.  The Defendant was under no obligation to grant such leave application.  Hence changes to the performance schedule, even if the Defendant were prepared to grant such leave, would remain consensual as stipulated in clauses 1.5 and 1.8.

22.  More problematic is clause 8.2.  The Defendant’s right to amend literally extended to “show content and schedule”.  In my judgment, the right to amend under clause 8.2 was intended to apply only to those amendments that would not have the effect of prejudicing the 1^st Claimant’s remunerative entitlement under the Contract.  If this right to amend is interpreted to include a right to cancel performances stipulated in Schedule B when the performance schedule was first agreed (thereby adversely affecting the 1^st Claimant’s remunerative entitlement), clause 8.2 will be repugnant to clauses 1.5 and 1.8 which repeatedly emphasized the need of the 1^st Claimant’s agreement to proposed changes in the performance schedule.  My interpretation involves drawing a distinction between the subject matters of clauses 1.5 and 1.8 on the one hand and that of clause 8.2 on the other.  Such distinction is consistent with the fact that clause 8.2 specifically referred to “show content and schedule” rather than “the schedule provided in Schedule B” and “the performance schedule” as mentioned in clauses 1.5 and 1.8 respectively.  In my judgment, clause 8.2 was intended to deal with amendments internal to a show, rather than whether there is to be a show at all.  In other words, clause 8.2 did not entitle the Defendant to unilaterally cancel all August Saturday shows without the express agreement of the 1^st Claimant.

23.  In coming to the above conclusion, apart from placing the Contract in its proper factual matrix, I am assisted by the following cannons of construction:-

(1) Every contract is to be construed with reference to its object and the whole of its terms, and accordingly, the whole context must be considered in endeavoring to collect the intention of the parties, even though the immediate object of inquiry is the meaning of an isolated word or clause.” [para. 12-063 of Chitty on Contract, 13^th ed., vol. 1];

(2) The principle that words should be construed in their natural and ordinary meaning is liable to be departed from where that meaning would involve an absurdity or would create some inconsistency with the rest of the instrument. [para. 12-055 of Chitty on Contract, ibid.];

(3) The instrument must be read as a whole in order to ascertain the true meaning of its several clauses, and the words of each clause should be interpreted as to bring them into harmony with the other provisions of the deed if that interpretation does no violence to the meaning of which they are naturally susceptible. [per Lord Davey in N.E. Railway v. Hasting [1990] A.C. 260, at 267, quoting Lord Watson in Chamber Colliery Co. v. Twyerould (1893) reported in [1915] 1 Ch. 268n., 271];

(4) Where different parts of an instrument are inconsistent, effect must be given to that part which is calculated to carry into effect the real intention of the parties as gathered from the instrument as a whole, and that part which would defeat it must be rejected. The old rule was, in such a case, that the earlier clause was to be received and the later rejected. This rule is however just a mere rule of thumb. [see The Interpretation of Contracts, Lewison, para. 9.08] A term may also be rejected if it is repugnant to the intention of the parties as it appears from the document. However, an effort should be made to give effect to every clause in the agreement and not to reject a clause unless it is manifestly inconsistent with or repugnant to the rest of the agreement. [Chitty on Contract, ibid, para. 12-078]; and

(5) Where ambiguity arises, the rule contra proferentem should be applied. It is clear in the present case that the Defendant was the draftsman of the Contract.

24.  In my judgment, accordingly, the learned Presiding Officer erred in her construction of clauses 1.5 and 8.2.  She erred in concluding that the performance schedule as set out in Schedule B to the Contract was merely provisional.  She also erred in concluding that the Defendant had no obligation to provide all the shows as stated in Schedule B.

Approach of the Presiding Officer

25.  If the Presiding Officer had properly interpreted the Contract, the next proper inquiry would be on whether the 1^st Claimant had agreed to the cancellation of all Saturday shows in August.  The Presiding Officer found that the conduct of the 1^st Claimant amounted to an acceptance of the new arrangement of the Defendant, either expressed or implicit.  It is necessary to look at her findings as to the Defendant’s conduct at paragraph 30 of her Reasons for Decision:-

“I did not ignore the fact that C1 had made a comment on cancellation of the August Saturday shows in his email dated 28^th July 2009 (Claimant’s document: C-e(F)(1)). Having considered all the evidence before me, I noticed that from August onwards, the exchange of emails between C1 and Mr. Lau were mostly related to hotel arrangement. C1 in fact did not raise any further objection to the Defendant for cancellation of the shows and continued to perform for the rest of the shows in August. Even C1 himself admitted that he did not contact Lau any more after the last show on 30^th August 2009 asking for compensation of cancellation of the August Saturday shows. When C1 accepted the final payment from the Defendant on 30^th September 2009, C1 again did not object to the Defendant that the amount of the final payment in respect of the performances in August was incorrect. ”

26.  Again, with respect to the Presiding Officer, I cannot agree with her conclusion.  If she had properly interpreted the Contract, she would actively look for evidence that the 1^st Claimant actually “agreed” to the changes, which should be more than a mere helpless reaction to a situation forced upon him by the employer.  When one looks at the evidence closely, I am satisfied that the 1^st Claimant never agreed to the changes made by the Defendant.  One should begin with the email dated 25^th July 2009 whereby the Defendant informed the 1^st Claimant of the cancellation of all Saturday shows in August (see Defendant’s exhibit D-3(7)(a)):-

“Dear all,

I have received a email from Heidi [of COD] about the new schedule of August. I’m sorry to inform you that ‘The Company’ will only perform on Friday and Sunday starting from 1^st August. The email stated that is about ‘Due to the changes of operation strategy from the management’. In my understanding, it’s about cutting budget and Chinese songs problem.

First of all, they are cutting shows more than one band since the show expenses have exceed their expectation. However, I think the cut is already less than I’ve expected.

Secondly, they think ‘The Company’ is still lack of Chinese songs. I’ve raised our objection that we are helping the band to pick up, but they think the progress is too slow and the change is decided by the management already.

We should understand that it’s normal for a new casino to change their entertainment with their very first three months. I hope you all understand the situation. And I shall update you the new arrangement of accommodation and transport asap.”

27.  To this email, the 1^st Claimant immediately replied in protest by his email dated 27^th July 2009 (also under Defendant’s exhibit D-3(7)(a)) as follows:-

“Hey Ryan,

I hear you, but the payments for those Saturdays naturally are included in the decision making (COD or Muse can’s leave it out while communicating such news) so please let me know including hotel and transportation arrangement if they need be revised…”

It is thus clear that the 1^st Claimant did not agree to the cancellation without compensation to him.

28.  Then one looks at the email from the 1^st Claimant to Lau dated 28^th July 2009 which the Presiding Officer referred to:-

“Hi Ryan,

Note your point re Saturdays but note that change of schedule is not the same as cancellation of dates…

Please imagine what will happen if band chose to take out other dates like you’re taking off Saturday. What will happen then? We signed for all this dates as stated in the contract otherwise everybody would have [sic.] been playing at other places but we commit them to you (formal contract)… ”

29.  In light of the above emails from the 1^st Claimant, I cannot infer that he had agreed to the changes forced upon him by the Defendant.  The fact that the 1^st Claimant continued to perform on Fridays and Sundays in August meant that the 1^st Claimant did not accept the wrongful repudiation of the Contract by the Defendant.  However, the 1^st Claimant was entitled to elect to continue performing his part of the Contract and pursue the Defendant on damages for breach of warranty.  The subsequent emails in August on hotel accommodation were consistent with such a stance.  The lack of further protest or reiteration of his stance after his 2 emails up to the time the 1^st Claimant collected his last remunerations on 30^th September was neither here nor there.  Suffice to say that it was at best unequivocal and is insufficient to support an inference that he positively agreed to the changes on no recourse basis.  In any event, the 1^st Claimant brought his claim at the Labour Tribunal in just 3½ months time on 14^th January 2010.

30.  In the circumstances, I equally find that the learned Presiding Officer erred in concluding that the 1^st Claimant had “accepted the cancellation of the August Saturday shows” in the sense that he had agreed to the changes to the performance schedule pursuant to clauses 1.5 and 1.8.

31.  Lastly, the Defendant argued at the appeal hearing that it was entitled to cancel the August Saturday shows pursuant to clause 4.1 of the Contract, namely, the poor quality of performance by the 1^st Claimant.  In the Reasons for Decision, the Presiding Officer did not mention clause 4.1 as entitling the Defendant to cancel the August Saturday shows.  Although she did make factual findings on the quality of 1^st Claimant’s performance, they were made in the context of identifying COD as the originator of the decision to cancel the shows.  The Presiding Officer found that it was COD which had a control over the arrangement of performance and in that sense, the Defendant was acting passively and deriving no pecuniary advantage in the cancellation of the shows.  The Presiding Officer did not find that, pursuant to clause 4.1, the Defendant was entitled to cancel the August Saturday shows.  In fact, if she were to so hold, she would be wrong because clearly from the evidence, the Defendant did not cancel the shows on the ground of dissatisfaction over the 1^st Claimant’s performance.  It is readily apparent from the Defendant’s own email dated 25^th July 2009 as set out in paragraph 26 above.  The Defendant simply thought that they had to cancel the shows because its client COD did not want them.  It even tried to protest but in vain.  The Defendant then asked for the 1^st Claimant’s understanding of the situation it faced.  Whether or not the Defendant was wholly satisfied with the 1^st Claimant’s performance is not the issue.  It is important to remember that the Contract was between the 1^st Claimant and the Defendant.  Obligations in the Contract were not expressed to be subject to the views or decisions of COD.

32.  Furthermore, under clause 4.1.1, if the Defendant was dissatisfied with the 1^st Claimant’s performance, it shall have the right to “replace” the performer.  The cancellation of August Saturday shows was not a “replacement” of the 1^st Complainant or his band at all.  They were to required to continue playing albeit on Fridays and Sundays only.  In my view, the entire issue of “quality of performance” was a red-herring.  The sole issue was whether contractually, the Defendant was entitled to unilaterally cancel those performances stipulated in Schedule B without the prior agreement of the 1^st Claimant.

Cost of Accommodation

33.  The 1^st Claimant claimed for cost of accommodation in respect of 16/8/09; 21/8/09; 23/8/09; 28/8/09 and 30/8/09.  21/8/09 and 28/8/09 were Fridays.  The rest were Sundays.  Clause 2.3.1.2 of the Contract provided for the Defendant’s obligation to provide hotel accommodation for “each night performing”.  By an email dated 13^th August 2009 from the 1^st Claimant to Lau, the 1^st Claimant said:-

“It is also our understanding that the contract states that the Company (Muse) shall ‘provide accommodation in a reasonable hotel close to the location and venue of performance for each night performing.’ We are agreeable to going back to Hong Kong following Sunday’s [sic.] performance so we don’t need a room for that night’s performance. So I ask you to provide rooms for us on Friday in order to maximize the caliber of our performance and not put our health at risk.”

34.  Lau replied to the above email on 13^th August 2009 as follows:-

“Dear Jobe,

I have decided to give the band two rooms on Friday night in August. But I’m afraid that Florencio will need to stay with Yeung on that night. Please note that no room will be available on Saturday night.

I’m doing this because I understand your hardship and I really want everyone happy.”

35.  Based on the above emails, the 1^st Claimant’s complaint about no hotel room on the 3 Sundays he claimed was without merits.  As for the 2 Fridays, Lau referred the Court to Defendant’s exhibit D-3(11)(b) which was a documentary record of reservations of rooms in the 1^st Claimant’s name. They were entirely consistent with the stance of Lau as set out in his 13^th August 2009 email.  I therefore equally find that the 1^st Claimant’s claim in this regard was unmeritorious.  In any event, the 1^st Claimant admitted to the Presiding Officer and to this Court that he did not spend his own money on seeking accommodation on those nights which were the subjects of his claim.  The Presiding Officer was right to find that the 1^st Claimant did not suffer any actual loss.  Whether or not there was a breach of clause 2.3.1.2 of the Contract is purely academic.  The 1^st Complainant would not in any event be entitled to damages over and above an award of nominal damages in the conventional sum of HK$1.

Conclusion

36.  In the circumstances, I allow this appeal and grant judgment in favour of the Appellant (the 1^st Claimant) in the sum of HK$10,000.00 which represents 4 cancelled Saturday performances of HK$2,500 each for 8/8/09; 15/8/09; 22/8/09 and 29/8/09.  It is clear from Defendant’s exhibit D-3(8)(e) that the 1^st Claimant had been paid for 1/8/09 even though he was not required to perform on that Saturday.

37.  I also make an order nisi that the 1^st Claimant shall have costs of this appeal against the Defendant to be taxed if not agreed.  Unless there are applications to vary the costs order nisi within 14 days from the date of this Judgment, it shall become absolute on the expiration of 14 days from the date of this Judgment.