TANG CHIN LUEN AND ANOTHER v. COOL WEDDING LTD

HCSA68/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO. 68 OF 2015

(ON APPEAL FROM SMALL CLAIMS TRIBUNAL

CLAIM NO. 10995 OF 2014)

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DECISION

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Introduction

1.  This is an application of Cool Wedding Limited (“CWL”) for leave to appeal against the determination of an adjudicator of the Small Claims Tribunal made on 10 March 2015 after a 3-day trial and confirmed after a 2-day review on 23 October 2015. The adjudicator handed down his reasons for his determination dated 4 January 2016 (“The Reasons”) whereby he explained why he allowed the claims of Mr Tang and Ms Choi (collectively “the Couple”).

2.  At the hearing, I indicated that this Decision would be written in the Chinese language in view of the fact that the same language was used in the Reasons. On second thoughts, given the fact the subject contract was written in English and my legal analysis to be rendered with reference to English authorities, I believe that it is advisable that this Decision should be written in English. CWL is legally represented and I do not think language is an issue.

Background

3.  I need only give a brief outline of the background facts since this application essentially involves a question of law within a narrow compass. The dispute between the parties arose out of a written contract between CWL and the Couple dated 17 March 2013 (“the Contract”) concluded at Hong Kong Wedding Expo. On that occasion, CWL offered to sell 3 wedding photography packages by way of its promotional leaflets. All of these packages related to, among other things, professional photo-taking service in China.

4.  The Couple opted for a package called M5-1 (“the Package”) and it expressly included a full day exclusive photography and make-up services at Jiuzhaigou (九寨溝) (“the Venue”), which is a hugely popular destination in China. Two 20-page “magazine-style” albums with each containing 25 photos (maximum) and one 36-inch hard print in the form of a painting (“the Hard Print”) would be provided.

5.  The stipulated price of the Package was HK$19,888. On top of that, the Couple paid a sum of HK$1,900 for renting an extra bridal dress and HK$1 to obtain an USB containing the softcopy of all the prints. At the end, they had the total price reduced by HK$3,000 and they paid CWL HK$16,889 only.

6.  The Couple signed the Contract for their purchase of the Package. Clause 5 of the Contract provided (“the Clause”):

“The package provided by CWL is solely for the photo items, e.g. albums, etc. The photo products are subject to the limitation shown in the samples and subject to the limitation of supplier’s stock. Subject to individual client’s requirement, CWL’s local photo-taking partner/associated company/subsidiary may assist the client for the transportation, accommodation and dining. CWL will not be responsible for any liability of whatsoever nature that may arise in connection therewith. The client should arrange sufficient insurance covers. CWL will not be liable for changes of any external costs e.g. hotel rate, entrance ticket, airfare, etc. No accompanies allowed to any part of the photo-taking/service delivery period. The client cannot request CWL to take photo for anybody other than the Bridegroom and /or the Bride specified above. No video/audio recording allowed.”

7.  Pursuant to the Contract, the photograph shooting session was completed at the Venue on or about 25 September 2013. After their return to Hong Kong, the Couple received an USB containing the soft copy of 174 photographs taken (“the Subject Photographs”). They were selected by CWL out of a total number of 592 photographs taken by its photographer Mr Lee.

8.  The Couple were very unhappy with their quality. They did not select any of them to be included in the two albums to be provided under the Package and they were of the view that CWL had breached the Contract.

9.  Against these background, the Couple made their claim against CWL in the Small Claims Tribunal for damages in the total sum of HK$43,389. The said sum included the air ticket fares and hotel charges of the Couple.

10.  In the first instance, the adjudicator fully accepted the factual evidence of the Couple and the expert evidence of Mr Choi. Mr Choi is a professional photographer. He opined that the quality of the Subject Photographs was not acceptable and they could not be amenable to editing. For example, when the focus was wrongly placed on a background object whereas the faces of the Couple looked blurred in a photo, photo editing could be of little assistance.  He attributed such poor quality of the Subject Photographs and their small quantity to the skill level and work attitude of Mr Lee.      

11.  On the other hand, Mr Ronnie Chow, shareholder and director of CWL, represented CWL and testified on its behalf. CWL did not adduce any expert evidence to contradict those of Mr Choi. The adjudicator refused to accept Mr Chow’s evidence and in particular he was not convinced that the Subject Photographs could be remedied to a satisfactory level by way of photo editing. In any event, he did not accept that CWL would ever take any steps to edit the Subject Photographs to the satisfaction of the Couple.

12.  On quantum, the adjudicator duly rejected some claims of the Couple and only allowed HK$28,526.50 as damages payable by CWL to the Couple.

13.  At the review hearing, CWL adduced expert evidence emanating from Mr Steve So, a professional photographer, and also two sample albums as evidence. One of the sample albums was purportedly displayed at the Expo. The other one was created only after the adjudicator had made his decision. It contained some of the Subject Photographs which had been digitally edited. CWL relied on this album to show that it was capable of producing that sort of albums in accordance with the sample album displayed at the Expo.

14.  However, this new evidence failed to convince the adjudicator. He found Mr So to be a biased expert and refused to accept his expert evidence to the effect that the Subject Photographs were up to professional standard. He further attached no weight to the sample albums, which he found to be irrelevant. He held that CWL had no intention to produce the latter sample album to fulfill its obligations under the Contract.

15.  As a result, the adjudicator confirmed his conclusion that the Subject Photographs had a serious quality issue and CWL failed to provide its wedding photography service in accordance with the Contract with reasonable care and skill. Though the adjudicator did not do much legal analysis as to the causes of action of the Couple, I believe that with his factual findings, he accepted that there was a breach of contract on the part of CWL and that the Couple had a valid claim based on the Supply of Services (Implied Terms) Ordinance, Cap. 457 (“the SSO”).

Applicable legal principles

16.  The permissible grounds of appeal are confined to those involving a question of law and those challenges on jurisdiction of the small claims tribunal alone: section 28(1) of the Small Claims Tribunal Ordinance, Cap.338.     

17.  Findings of facts by the tribunal are generally immune from challenge unless it can be shown that they are perverse or irrational or where there is no evidence to support the decision or where the decision was made by reference to irrelevant factors or without regard to relevant factors. The party seeking leave to appeal bears the burden to demonstrate that his/her grounds of appeal are arguable: Chow Mee Yee Mille v Hong Kong Mediation Services Limited, unreported, HCSA 17/2011, 16.2.2012 at §§25-26 per Au, J..

Grounds of appeal

18.  In a nutshell, the case of CWL presented by Mr Yu with skill and clarity is that the adjudicator erred in law to find that the Contract was a contract for service. He does not, quite wisely in my view, attempt to disturb the findings relating to the quality issue and instead contends that in fact between the parties, there were two separate and independent contracts for goods sold and delivered. First, the contract relating to the Package was a sale of the two albums containing the selected photographs out of the Subject Photographs (“the 2-Album Contract”) and the second contract was a sale of the USB containing the soft copy of the Subject Photographs at a concessionary price of HK$1 (“the USB Contract”). Both contracts involved a sale of chattels only.

19.  For the 2-Album Contract, Mr Yu relies on the Clause and further argues that it was a sale by sample. The Couple was shown the sample album at the Wedding Expo before they purchased the Package and they would be expected to receive two albums in line with section 17 of the Sales of Goods Ordinance, Cap.26 (“the SOGO”). Mr Yu contends that CWL was prevented from performing the 2-Album Contract by the Couple’s refusal to make selections of the 50 photographs to be included in the 2 albums from the Subject Photographs. Thus, the 2-Album Contract was repudiated by the Couple and not by CWL.

20.  For the USB Contract, Mr Yu argues that CWL did provide the USB to the Couple and there was no breach at all. In any event, if there was any quality issue relating to the USB, Mr Yu submits that the damages could not be the entire price of the Packages.

Analysis

21.  Mr Yu first helpfully highlights to this court the observation of Crompton J in Lee v Griffin (1861) 1 B.& S. 275 at 717 that the distinction between a contract for work and labour and a contract for goods sold and delivered is sometimes very fine. He further draws to my attention the following citation of the said authority by P Cheung J (as he then was) in Mak Ping Kui trading as Yet Hing Knitting Garment Factory v Millionice Limited trading as Blessings Trading Company, unreported, HCA 940/1998, 25.4.2001:

“Crompton J held that “Where the contract is for a chattel to be made and delivered, it is clearly a contract for the sale of goods.  There are some cases in which the supply of the materials is ancillary to the contract, as in the case of a printer supplying the paper on which a book is printed.  In such a case an action might perhaps be brought for work and labour done and materials provided, as it could hardly be said that the subject matter of the contract was the sale of the chattel; perhaps it is more in the nature of a contract merely to exercise skill and labour.  Clay v. Yates (1856), 1 H.& N. 73 turned on its own particular circumstances.  I entertain some doubt as to the correctness of that decision; but I certainly do not agree to the proposition that the value of the skill and labour, as compared to that of the materials supplied, is a criterion by which to decide whether the contract be for work and labour or for the sale of a chattel.”

Hill J held that “Wherever a contract is entered into for the manufacture of a chattel, there the subject matter of the contract is the sale and delivery of the chattel, and the party applying it cannot recover for work and labour.”

Blackburn J held that “If the contract be such that, when carried out, it would result in the sale of a chattel, the party cannot sue for work and labour; but, if the result of the contract is that the party has done work and labour which ends in nothing that become the subject of a sale, the party cannot sue for goods sold and delivered.  The case of an attorney employed to prepare a deed is an illustration of this latter proposition.  It cannot be said that the paper and ink he uses in the preparation of the deed are goods sold and delivered ... I do not think that the test to apply to these cases is whether the value of the work exceeds that of the material used in its execution; for, if a sculptor were employed to execute a work of art, greatly as his skill and labour, supposing it to be of the highest description, might exceed the value of the marble in which he worked, the contract would in my opinion nevertheless be a contract for the sale of a chattel.”

22.  P. Cheung J. went on to refer to Robinson v Graves [1935] 1 KB 579. There the defendant orally commissioned an artist to paint the portrait of a lady at an agreed fee. Before the completion of the portrait, the defendant repudiated and put an end to the contract. The court was called upon to determine the nature of the contract. In this regard, Greer L.J. had this to say,

“If you find, as they did in Lee v. Griffin, that the substance of the contract was the production of something to be sold by the dentist to the dentist’s customer, then that is a sale of goods. But if the substance of the contract, on the other hand, is that skill and labour have to be exercised for the production of the article and that it is only ancillary to that that there will be pass from the artist to his client or customer some materials in addition to the skill involved in the production of the portrait, that does not make any difference to the result, because the substance of the contract is the skill and experience of the artist in producing the picture.”

23.  With these authorities in mind, I turn to the central question of this application, namely, whether the contract(s) subsisting between the Couple and CWL was a contract for goods or a contract for service.  On this issue, I have to identify the essence of the contract(s).

24.  In the present case, the Couple did not merely purchase any ordinary albums containing any 50 photographs of theirs and a big hard print of any of their photographs. They clearly intended to have themselves beautifully photographed at a picturesque place for their special occasion. To this end, the Package was interesting to them since they would secure the service of both a professional photographer and a professional make-up artist for the purpose of creating professional photographs at the Venue for them. This is the essence of modern overseas wedding photography, which is an art in itself.

25.  The USB was particularly attractive as the Couple could freely use the soft copy of such photographs taken for whatever purpose they wanted. For example, they could include them in a slideshow or video; and they could post them on the internet or send them to their friends via electronic means.  I do not believe that the Couple purchased the Package just for two albums and the Hard Print.     

26.  Hence, it is clear to me that the expected professional photography and make-up skill and labour to be provided by CWL at the Venue constituted the essence of the Contract. It was merely incidental that 2 albums and the Hard Print consisting of some of the Subject Photographs resulting from such professional skill and labour were to be delivered to the Couple eventually. The Couple could not possibly pay the price of the Package for the compilation of 2 albums and a big hard print of any other photographs of theirs not professionally taken in places other than the Venue. They clearly paid for the professional photography and make-up services to be provided at the Venue and it is absurd to suggest otherwise.

27.  Mr Yu heavily relies on the Clause and submits that it is cogent evidence in support of the contention of CWL that it was a sale by sample. I cannot agree.

28.  The Clause has to be interpreted in its context. It only sought to make it clear that the Package was for the professional services relating to the production of wedding photographs and not other matters incidental to the trip to the Venue such as hotel accommodation and travel insurance. With respect to the reference to the photo albums, it was merely stressed that the resultant albums would be subject to the same limitations shown in the sample albums. The provision of the resultant albums remain ancillary to the production of professional wedding photographs at the Venue and such a reference to the albums in the Clause cannot alter the nature of the Contract. 

29.  Thus, in my judgment, the adjudicator was entirely justified in reaching his conclusion that the Contract was a contract for service. I cannot accept Mr Yu’s submission that it was a contract for the sale of goods. The SOGO has no application at all. It must follow that I too refuse to accept that it was a sale by sample within the meaning of the SOGO.

30.  On the other hand, the 2-Album Contract and the USB Contract were plainly embodied in the Contract. There was only one contract. The USB Contract could not be separately and independently purchased in the absence of the Package. It could not stand on its own. 

31.  Upon seeing the Subject Photographs, the Couple was right in their conclusion that they could not be improved and the professional service rendered in their creation was not up to the requisite standard of reasonable care and skill required of under the Contract and the SSO Ordinance. It was a repudiation on the part of CWL and the Couple was entitled to accept the repudiation and refuse to further perform the Contract. Any allegation that the Couple refused to make selection of the Subject Photographs for the compilation of the two albums, even if this was their contractual obligation at all, which was not alleged by CWL and cannot be accepted by this court, is irrelevant in this light. In any event, the adjudicator refused to accept this allegation and accept the evidence of the Couple in this regard.

32.  In the premises, I agree with the adjudicator’s conclusion that CWL repudiated the Contract and the repudiation was accepted. The Couple was thus entitled to damages.

33.  Having found the principal case of CWL not arguable, strictly speaking it is not necessary for me to deal with other complaints about the alleged fact-finding errors made by the adjudicator in the Reason. CWL is in particular unhappy with the acceptance of the adjudicator of the Couple’s evidence that CWL even demanded additional charges for editing the Subject Photographs and refused to let them engage other professional service to try to improve the Subject Photographs themselves.

34.  I have read the transcript bearing in mind all such complaints and I can conclude that it was entirely open to the adjudicator to accept the evidence of the Couple. There is no valid ground for this court to interfere with such factual findings at all.                 

35.  Lastly, Mr Yu complains about the quantum of damages. His complaint is based on his case of the 2-Album Contract and the UBS Contract and that the Couple repudiated the former and CWL breached the latter at most.

36.  I have already explained why I cannot accept these contentions. I should further add that I cannot accept that Ms Choi’s evidence can be relied on to establish the alleged co-existence of the two separate and independent contracts. This is essentially a legal question and her opinion is of no relevance.

Conclusion

37.  By reason of the foregoing matters, I am of the view that CWL is unable to meet the threshold and fails to convince this court that its intended appeal is arguable. The evidence of CWL’s repudiatory breach of the Contract is overwhelming and the quality of the Subject Photographs is demonstrably disappointing. I can well understand the frustration of the Couple. The adjudicator’s conclusion cannot be faulted.

38.  I therefore dismiss the application of CWL. I make no order as to costs.

39.  Lastly, I thank Mr Yu for his assistance.