PACIFIC CAREER LTD v. GOLDIN PROPERTIES HOLDINGS LTD

DCCJ 2654/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION No. 2654 OF 2010

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BETWEEN

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JUDGMENT

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Background

1.  This is an appeal of the plaintiff from the decision of a master on its summons for summary judgment. By an order dated 13 May 2013, the master ordered that the defendant do have conditional leave to defend. The condition was met by the defendant with its payment into court a sum of HK$228,096.00. In this appeal, the plaintiff asks for judgment be entered against the defendant with costs to the plaintiff.

2.  At the outset of the hearing, the plaintiff applied by way of its summons filed herein on 10 July 2013 for leave to adduce a further affirmation of Chan Choi Ha for the sole purpose of exhibiting an invoice issued by the plaintiff to the defendant dated 8 February 2010. The defendant did not oppose the application and on that basis I granted the plaintiff the leave it sought. I further ordered the plaintiff to pay costs to the defendant in regard to the application in any event.

Plaintiff’s case

3.  The plaintiff’s claim is straightforward and is based on the following facts which are either common ground or undisputed.

4.  The plaintiff operates a recruitment agency and consultancy business in Hong Kong and the Defendant, among other things, operates a private club comprising a hotel and a polo club (“Polo Club”) in Tianjin.

5.  On or about 27 July 2009, Ms Rosanne Chan (“RC”), general manager of the plaintiff, met Ms Margie Chan (“MC”), of Human Resources & Administration Manager of the defendant in the latter’s office. The defendant was interested in the plaintiff’s service for its intended recruitment of staff for the Polo Club.

6.  On or about 24 August 2009, the plaintiff and the defendant entered into a written agreement (“the Agreement”). The Agreement included the following express terms:

a. The plaintiff would provide short-listed candidates to the defendant based on the defendant’s requirement;

b. The fee structure is that for the employment carrying a monthly salary of more than HK$30,000, the plaintiff is entitled to 20% of the annual salary;

c. The consultancy fee will be due 30 days after the commencement date of the candidate and late payment charge will be incurred at the monthly rate of 2% from the due date until full payment.

d. For such an employment, the defendant is entitled to a guarantee period of 3 months if the fee is paid within 30 days from the hiring date. Within the guarantee period, the plaintiff will undertake to replace the candidate once;

e. Interview of candidates referred by the plaintiff shall be deemed acceptance of the terms of the Agreement to pay the relevant agency fee for such candidates employed by the defendant to whom the referral was made.

7.  On or about 6 November 2009, RC met two other staff members of the defendant at the defendant’s office. The defendant indicated to RC that it hoped to fill a few vacancies for its property development in Tianjin including a hotel and the Polo Club. In particular, the defendant wanted to recruit a Director of Operations for the Polo Club.

8.  The plaintiff followed this up and on or about 26 November 2009, the plaintiff emailed to the defendant a profile of an anonymous person. As apparent from his profile, that person worked in a managerial position for the riding schools of the Hong Kong Jockey Club from 1997 to 2003 and obviously had ample equestrian knowledge and experience. He also had certain managerial experience on the Mainland from 2004 to 2009. In the said email, the plaintiff told the defendant that the plaintiff proposed that person for the position of “operation director”. That person turned out to be one Ringo Wan (“Ringo”).

9.  By an email on the even date, the defendant requested the plaintiff to arrange an interview for the defendant with Ringo. The plaintiff did so and subsequently, on 30 November 2009, Ringo attended the defendant’s office for a job interview arranged by the plaintiff.

10.  On or about 26 January 2010, the defendant managed to convince the plaintiff to give it a discount of the agency fee payable relating to the defendant’s intended employment of Ringo. As shown in the email of the plaintiff dated 26 January 2010, the plaintiff’s final offer was that it would charge the rate of 18% (instead of 20%) of the annual salary of Ringo to be paid within 30 days with a 3-month guarantee period.

11.  By an email dated 3 February 2010 (“the Email”), RC asked the defendant to confirm the terms of the defendant’s offer to be given to Ringo before the plaintiff talked to Ringo.

12.  Before long, the defendant replied by an email to RC and requested the plaintiff to confirm Ringo’s acceptance of the terms and conditions stated in the Email.

13.  Less than an hour later, RC replied to the defendant and informed the defendant that Ringo accepted the offer and would report duty on 8 February 2010.

14.  The essential terms of the offer set out in the Email accepted by Ringo were:

“Commencement date: Feb 8, 10

AL: 12 days

5.5 days work alternative Sat.

Working hour 9-6 (1 hour lunch break)

Title: Sr. Operation Mgr.”

15.  It should be noted that the terms also included a specific requirement to follow the PRC working hours if Ringo were to travel to the PRC.

16.  Ringo reported duty to the defendant on 8 February 2010. According to the Agreement and given the discount subsequently agreed, in regard to the employment of Ringo, the plaintiff is entitled to an agency fee of HK$129,600 (HK$60,000 x 12 x 18%).

17.  The plaintiff sent to the defendant an invoice dated 8 February 2010 for the agency fee of HK$129,600 due on 9 March 2010. A reminder was sent on 30 March 2010. Further reminders were sent on 21 April 2010, 9 July 2010 and 20 July 2010 with threats of legal proceedings. They, nevertheless, all fell on the deaf ears.

18.  It is not in dispute that Ringo tendered his resignation on 20 March 2010. His resignation per se does not affect the entitlement of the plaintiff to the agency fee.

19.  The plaintiff commenced these proceedings on 3 August 2010 to claim, among other things, a sum of HK$144,000 being the original agency fee relating to Ringo pursuant to the Agreement. This claim ignores the agreed discount and before the Master, the plaintiff fairly agreed to claim the agency fee of Ringo with the discount. 

Defendant’s case

20.  Both the defendant’s defence and counterclaim rely heavily on the telephone conversation between MC, Sally Lam of the defendant and Ringo on 6 September 2013 (“the Telephone Conversation”) which was tape-recorded apparently in the absence of Ringo’s knowledge. The transcript of the tape recording (“the Transcript”) is exhibited and there is no dispute about its accuracy.

21.  The pleaded case of the defence is that in the said telephone conversation, Ringo told MC and Sally Lam that when the plaintiff notified him about the job interview on 30 November 2009, he had told the plaintiff that he was not interested to work with horses and that he wanted a job as a personnel and administration manager. He also allegedly had told the plaintiff that he had concerns about the work location of the defendant. The plaintiff allegedly asked him to attend the interview anyway to enable the plaintiff to earn the agency fee under the Agreement. These matters were defined by the defendant as “Information from Ringo”.

22.  The core complaint of the defendant is that the plaintiff should pass to the defendant the Information from Ringo. In failing to do so, the defendant contends that the plaintiff was in breach of both the express term and the implied terms of the Agreement and certain duties arising from the Agreement and hence the plaintiff should not be entitled to any agency fee. On the other hand, the defendant counterclaims for damages for its loss and damage sustained as a result of the plaintiffs’ said breach of the Agreement including loss of monthly members subscription fees and costs of extra work hours.

23.  The pleaded implied terms include (at §16 of the Re-Amended Defence):

a. The plaintiff shall find out the educational qualifications, working experience and personality of any candidate recommended to the defendant, assess whether such individual is suitable for the post named by the defendant and shall communicate such findings in full to the defendant prior to the defendant employing such candidate;

b. Any candidate recommended by the plaintiff to the defendant shall match the corporate culture and chemistry of the defendant so that the candidate shall exactly fit the defendant’s requirements and instructions of the defendant be obeyed;

c. The plaintiff shall act in good faith and be completely honest with the defendant on all the attributes of any candidate recommended by the plaintiff to the defendant including but not limited to his personality, his attitude about the job, educational qualifications, working experience and information from Ringo (“Disclosure Duties”);

d. The plaintiff shall not be in a position where the plaintiff’s duties to the defendant conflict with their own personal interests and;

e. The plaintiff should use due diligence in finding a suitable candidate for the defendant and use reasonable care and skill in execution of the task.

24.  Mr Lo, counsel for the defendant, confirms to this court that the plaintiff failed to perform its Disclosure Duties in its non-disclosure of the Information from Ringo to the defendant. Mr Lo further explains to this court the basis of the implied terms pleaded in the Re-Amended Defence.

25.  First, the defendant relies on the fact that prior to the signing of the Agreement, RC expressly referred MC to the website of the plaintiff. In the website, not surprisingly, the plaintiff pledged professional service and commitment to meet its client’s requirements. The defendant hence says that there was an implied term that the plaintiff would serve the defendant with its best service as per the contents of its website.

26.  Secondly, the defendant contends that as the defendant’s recruitment agent, the plaintiff owed the defendant an implied duty to exercise care, skill and diligence in its services and such a duty includes keeping the defendant informed of all the matters of its concern. The defendant also prays in aid section 5 of the Supply of Services (Implied Terms) Ordinance, Cap. 457 though it is yet to be pleaded.

27.  Thirdly, the defendant contends that the plaintiff owed the defendant limited fiduciary obligations to the extent that the plaintiff was obliged to act in good faith and should pass onto the defendant all known attributes of the candidates it recommended to the defendant and must not place itself in a position where the plaintiff’s duties conflict with its own personal interest. Mr Lo relies on certain passages in Bowstead & Reynolds on Agency (19^th ed.)[1] in this regard.

Relevant legal principles

28.  The legal principles applicable to an application for summary judgment is well-settled. Once the plaintiff has shown a case within Order 14 r.1, the burden is on the defendant to show there are triable issues or that there ought that there ought for some other reason to be a trial of the claim.

29.  I bear in mind that in determining whether the defendant has shown triable issues, a mini-trial of the action on affidavit evidence must be avoided. An Order 14 application is not to be conducted as if it is a platform for a mini-trial: UMG Recordings, Inc. and Ors. v Profit Chart Development Limited, unreported, CACV 262/2012, 19.2.2013 per Lam JA at §7. The court should ask itself the simple question as to whether what the defendant says is credible and not whether it is to be believed.

Analysis

30.  First, I shall deal with the relevant terms, both express and implied, of the Agreement and the duties of the plaintiff owed to the defendant thereunder and then I shall proceed to see whether the plaintiff was ever in breach of any of such terms and/or duties in the light of the matters transpired in the Telephone Conversation.

31.  The primary obligation of the plaintiff under the Agreement is clearly expressed in its terms. It is to provide short-listed candidates to the defendant based on the defendant’s requirements for job interviews to be arranged through the plaintiff. The plaintiff can only charge the defendant if and only if the defendant subsequently employs the candidate through its introduction.

32.  As regards the alleged implied terms, the five requirements of an implied term set out by Bokhary PJ in Kensland Realty Ltd v Whale View Investment Ltd & Anor. (2001) 4 HKCFAR 381 at §23 are pertinent. It must (1) be reasonable and equitable; (2) be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) be so obvious that “it goes without saying”, (4) be capable of clear expression and (5) not contradict any express term of the contract.

33.  Even if I accept the defendant’s evidence[2] that RC did refer the defendant to its website not less than 2 weeks before the Agreement was made and that RC promised that the plaintiff could respond to the need to their clients including the defendant with flexibility and could serve their clients with their best service with assurance that there is no need to specify this detailedly in the Agreement, I cannot accept that there is an implied term to the effect that the plaintiff will serve the defendant with its best service as per the contents of its website.

34.  To start with, I cannot accept that a mere reference to one’s website before a contract is signed can amount to a tacit agreement to incorporate all the matters set out in the website into the contract. Further, such an implied term, to start with, is not necessary to give business efficacy to the Agreement and the Agreement is perfectly effective without it. The Agreement already obliged the plaintiff to look after the needs/requirements of the defendant. Moreover, the pledge of provision of one’s best service can hardly have contractual force.

35.  Thus, on the evidence of the defendant, I reject the alleged implied term.

36.  I accept that the plaintiff was the defendant’s agent in its search of suitable candidates in accordance with the defendant’s requirements though the plaintiff had no authority to affect the defendant’s legal relation with others. In other words, the plaintiff was an intermediary akin to an estate agent or some other agents remunerated by commission. In such a position, I accept that the plaintiff did owe the defendant a duty to exercise reasonable skill and care, both in the common law and under section 5 of the Supply of Services (Implied Terms) Ordinance, Cap.457.

37.  Given such a duty, I am prepared to accept that the plaintiff owed to the defendant the Disclosure Duties, which Mr Lo pinpointed to me.

38.  Lastly, for fiduciary duties, I accept that when the plaintiff received information from a candidate on behalf of the defendant which was germane to the suitability of the candidate to the defendant’s intended employment, the plaintiff was under fiduciary duties to the defendant in respect of such information in that the plaintiff should disclose the same to the defendant, nothing more and nothing less.  

Alleged plaintiff’s breach of terms/duites

39.  I have studied the Transcript in depth to find out whether there is any triable issue as to the alleged breach of the plaintiff. I bear in mind that the plaintiff filed no evidence to rebut the contents of the Transcript despite it was granted leave to do so. Ringo, who was allegedly shocked to learn of the defendant’s allegation in the pleadings, said nothing against the veracity of the Transcript. For the purpose of this application, I accept what the parties said in the Telephone Conversation to be truthful in the absence of contrary evidence.

40.  The Telephone Conversation was initiated by the defendant, almost 6 months after Ringo’s resignation. The defendant telephoned Ringo, who was then working on a project for a garment factory in Vietnam. The defendant, genuinely or otherwise, tried to find out whether or not Ringo would be interested in its new project relating to a stable on the Mainland. The defendant told Ringo that the actual scope of the new project was not yet finalized and it might involve a riding school. Knowing that Ringo had rich experience in managing riding schools in Hong Kong, the defendant expressed its interest in Ringo again for the new project.

41.  Disarmed by the interesting opportunity, Ringo sounded to be very frank with MC and Sally Lam of the defendant in the Telephone Conversation. He recounted the circumstances leading to his previous employment with the defendant. He said he first wanted to find a job in the human resources and administration sectors through the plaintiff and registered his application with the plaintiff as such. Nevertheless, probably because of his past work experience with the riding schools of the Hong Kong Jockey Club, the plaintiff asked Ringo to have an interview with the defendant.

42.  Pausing here, I note that RC in her affirmation denies having received any specific requirements for the post of “Director of Operations” for the Polo Club other than that it was in Tianjian whilst the defendant insisted that it was a specific requirement that the post demanded ample knowledge of stable and equestrian operation and required working with horses.

43.  In fact, as shown in the Transcript[3], Ringo accepted that the plaintiff did tell him that the defendant’s club relating to horses was located on the Mainland. I am prepared to accept that the specific requirements were given to the plaintiff and the plaintiff was obliged to look for candidates in accordance with such specific requirements. However, there is no suggestion that Ringo did not comply with the specific requirements. On the evidence, Ringo was clearly a suitable candidate.

44.  In the beginning, Ringo told the plaintiff that he had no interest in the job of the defendant. The plaintiff then told Ringo that since Ringo was free, there was no harm attending an interview with the defendant. That would be a win-win situation to both the plaintiff and Ringo. There was no mention about the Agreement. Ringo added that the plaintiff did do its homework, meaning that the plaintiff had done its part to find out more about the operation of the defendant.

45.  Obviously, Ringle was persuaded by the plaintiff and he attended the interview with the defendant on 30 November 2009. There is no suggestion that Ringo was under any coercion or duress to take part in the interview. Ringo further said that after the interview he asked the plaintiff whether the defendant would really employ him. He also said that he told the plaintiff that if he received no reply from the defendant after the Chinese new year (the Chinese new year in 2010 started on 13 February 2010), he would look for other jobs, particularly in the human resources area alleging that his interest in the job was not that strong.

46.  Ringo’s interest in the job offered by the defendant, in my judgment, was just too obvious. He had waited for more than 2 months after the interview in late November 2009 before he was offered the post in early February 2010. He had prepared to wait until after mid-February 2010.

47.  He candidly indicated that he would make much more money with horses. In view of the intended offer by the defendant, Ringo suggested that if the defendant could afford more renumeration and provide an acceptable working environment, he would consider resuming working for the defendant. He went on to highlight his relevant work experience with horses and riding schools and he stressed that he indeed had all along an interest in the trade.

48.  I do not think that the Information from Ringo is a fair summary of what Ringo actually expressed in the Telephone Conversation. Nothing in the Telephone Conversation suggests that Ringo was in any way an unsuitable candidate for the post and hence the plaintiff should disclose the same to the defendant in fulfillment of its duties owed to the defendant. As rightly pointed out by Mr Cheng, counsel for the plaintiff, any significance of Ringo’s initial preference of a job in the human resources and administration area and his purported lack of interest in the job offered by the defendant before the interview was completely removed by Ringo’s attendance of the interview of his own volition and his subsequent acceptance of the defendant’s offer after the anxious wait. His actions speak louder than his words.   

49.  Mr Lo asks a rhetorical question as to whether the plaintiff should have disclosed to the defendant if Ringo had told the plaintiff that he only intended to take on the defendant’s post on a temporary basis knowing that it was a permanent position. With respect, his example is inapt. Such an intention of Ringo would definitely render him an unsuitable candidate for the job and the plaintiff should not arrange an interview for him in the first place. If the plaintiff still found him a worthy applicant, then the plaintiff must inform the defendant of his stated intention.

50.  In the result, nothing raised by the defendant shows that the plaintiff was in any way in breach of the Agreement and/or its duties as its agent. Ringo was a suitable candidate and the plaintiff rightly referred him to the defendant under the Agreement. The plaintiff must be entitled to the agency fee and the late charges under the Agreement.

51.  For completeness, I note that there is an allegation in the Re-Amended Defence that the plaintiff failed to monitor the performance of Ringo in satisfaction of the defendant’s requirement of the job opening. This accusation was also made by MC by way of a bare assertion in her affirmation (§10) without any particulars and substantiation. Mr Lo does not make any submission on this alleged breach. I find no substance in this allegation and I reject the same accordingly.

Conclusion and Orders     

52.  In conclusion, the plaintiff must be entitled to judgment in the sum of HK$129,600 plus 2% interest per month thereon from 8 March 2010 to the date hereof and at judgment rate thereafter until payment. I hence set aside the order of the Master and I make an order that the payment in made by the defendant be paid out to the plaintiff in (partial) satisfaction of the aforesaid judgment sum.

53.  I further make a costs order nisi that the costs of this action (including the plaintiff’s summary judgment application) be to the plaintiff, to be taxed if not agreed, with certificate for counsel.

54.  Having found no breach on the part of the plaintiff, it must follow that the defendant’s counterclaim should be dismissed, though it was not specifically argued and dealt with before. I make an order to dismiss the counterclaim with costs to the plaintiff of my own motion accordingly. 

55.  It remains for me to thank both Mr Cheng and Mr Lo for their able assistance.