LUCY MICHAELS v. HARBOUR GRAND HONG KONG

HCPI 898/2016

[2018] HKCFI 1093

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 898 OF 2016

(TRANSFERRED FROM HCA NO 963 OF 2016)

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D E C I S I O N

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A. INTRODUCTION

1.  The plaintiff claims damages for the defendant’s alleged failure to disclose to her that she would need to pay a “Loss & Damage Deposit” for booking a room in a hotel run by the defendant.  The Master dismissed her application for summary judgment.  On the other hand, the defendant applied to strike out her action.  This is the hearing of the plaintiff’s appeal against the Master’s decision and the defendant’s striking out application.

B. THE PLAINTIFF’S CASE

2.  The plaintiff, Mrs Lucy Michaels (“Mrs Michaels”), commenced this action as HCA 963/2016 on 14 April 2016.  The material facts as pleaded in her Statement of Claim may be summarized as follows:

(a)   On 14 January 2015, she and her daughter, Ms Michaels, contacted the Sales Department of Harbour Grand Hong Kong (“the Hotel”), enquiring about the availability and the rate for a hotel’s room for one month starting from 20 January 2015.

(b)   There were then telephone conversations and email exchanges.  She and her daughter also previewed the rooms.  At the end, they decided on a “Grand Deluxe Harbour View Room without pantry”. They were assigned the room with room number “2821”, and the price quoted was HK$26,900 for a 30-day stay. 

(c)   On 19 January 2015, they went to the Hotel a number of times with the intention to sign the Licence Agreement and to make payment so that they could check in on 20 January 2015.  However, they were repeatedly told by Mr Harry Lam (“Mr Lam”), the Sales Executive of the Hotel, that the documents were not yet ready.  At the same time, they were reassured that the Room had been guaranteed, and all that was required were to sign the License Agreement, register and pay the agreed rental.  They were asked to come back the next day.  Relying on Mr Lam’s reassurance, they checked out from the hotel where they were staying.

(d)   At about 11 am on 20 January 2015, they arrived at the Hotel with their luggage.  However, they were told again that the documents and the Room were still not ready; and they had to leave and return many times.  At the end, at about 6:40 pm, Mr Lam took them to the “front desk counter” to do the registration.

(e)   Her daughter was intended to be the licensee.  However, both of them were asked to provide personal information for registration.  Her daughter was then asked to sign the Licence Agreement.  After signing the first two pages, Mr Lam went onto the third page.  In the “Benefit List” on that page, there was a“Bill Signing Privilege” of HK$10,000 and a “Loss & Damage Deposit” of another HK$10,000.

(f)   Upon their request, Mr Lam agreed to waive and delete the “Bill Signing Privilege”.  However, despite their objection, Mr Lam insisted that they had to pay the “Loss & Damage Deposit”.  Such deposit was never discussed or revealed before.  She asked to speak to the General Manager.  Mr Benoit Heumez(“Mr Heumez”), Director of Guest Services, took charge of the matter.  However, Mr Heumez maintained that they needed to pay the “Loss & Damage Deposit”.  At the end, the Hotel only agreed to hold the Licence Agreement until the next day after collecting the said deposit.

(g)   The Hotel refused to let her have a copy of the partly signed Licence Agreement, or to destroy the documents containing their personal data.  They were told that a soft copy of Licence Agreement had already been sent to them by email earlier that day.  They were then escorted to retrieve their luggage and to leave the Hotel.

3.  Mrs Michaels claims breach of contract and of duty, exposure to danger of physical harm, and suffering of emotional stress, etc.  In the prayer for relief, she claims damages for pain and suffering as the court may award.

C. THE DEFENDANT’S CASE

4.  Harbour Grand filed a Defence on 27 June 2016.  Its case may be summarized as follows:

(a)   In an email dated 19 January 2015 from Mr Lam to Ms Michaels, it was stated that “a loss & damage deposit in the sum of HK$10,000 by credit card imprint authorization or by cash was required upon arrival”.

(b)   On 20 January 2015, in another email from Mr Lam to Ms Michaels, Mr Lam enclosed a copy of the Licence Agreement, which referred to the Loss & Damage Deposit at page 3.

(c)   Ms Michaels signed the first two pages of the License Agreement but she refused to sign the third page.  Mr Lam agreed to waive the Bill Signing Privilege and explained that the Loss & Damage Deposit could not be waived.

(d)   Despite the further explanations by Mr Heumez, Mrs and Ms Michaels refused to pay the Loss & Damage Deposit, and decided not to check in.  Documents containing Ms Michaels’ personal data together with pages 1 and 2 of the Licence Agreement were destroyed in their presence.  They then left the Hotel.

D. THE PROCEDURAL HISTORY

5.  By a summons dated 22 July 2016, Mrs Michaels applied for summary judgment.  The action was then transferred to the Personal Injury List.  On 25 January 2017, Master Leong dismissed the application, ordered Mrs Michaels to pay HK$60,000 as costs forthwith, and directed that the action be stayed until the costs have been paid (“the Master’s O 14 Order”).  By a Notice of Appeal dated 3 February 2017, Mrs Michaels lodged an appeal against the Master’s O 14 Order (“the O 14 Appeal”).

6.  By a summons dated 14 February 2017, Harbour Grand applied to strike out the action (“the Striking Out Application”).  On 13 November 2017, Bharwaney J ordered that the Striking Out Application should be heard together as the O 14 Appeal.

7.  Hence, I need to consider both the O 14 Appeal and the Striking Out Application.  Apart from reading all the documents filed by the parties, I have heard oral submissions from Mrs Michaels and Ms Wong appearing for Harbour Grand.

E. THE STRIKING OUT APPLICATION

8.  I have decided to consider the Striking Out Summons first.  The principles for striking out applications under Order 18, rule 19 of the Rules of the High Court, and the inherent jurisdiction of the court, are well established. Suffice to say that the court should only strike out a claim in a plain and obvious case; and it should not resolve any material factual dispute, or any difficult question of law in a striking out application.

E1. The indisputable facts

9.  It is indisputable that there were only three emails exchanged between Ms Michaels and Harbour Grand.  First, in an email dated 19 January 2015 sent by Ms Michaels to the Habour Grand’s Suites Office at 10:34 am, Ms Micheals stated that she had spoken to the staff members of the Hotel the week before and previewed the room the previous day.  She enquired whether a room which met the requests as particularized in the email would be available.

10.  On the same day, at 2:57 pm, Mr Lam offered a Grand Deluxe Harbour View Twin Room with Pantry on the non-making floor from late 20 January 2015.  In the last section setting out the “Remarks”, two sentences had been highlighted in bold.  And one of them reads:

“ Loss & damage deposit: HK$10,000 is required for guarantee by credit card or cash upon arrival.”

11.  In the third email dated 20 January 2015 sent at 10:41 am, Mr Lam said it was a pleasure meeting Ms and Mrs Michaels the previous evening.  He confirmed the booking of a Grand Deluxe Harbour View Twin Room on a non-smoking floor from 20 January to 19 February 2015 at a monthly fee of HK$26,900 per month.  He then stated that:

“ … Please find attached soft copy of the Licence Agreement for your perusal. The original will be presented to you upon check-in at round 6 pm today.”

The Licence Agreement enclosed named Ms Michaels, not Mrs Michaels, as the licensee.  It had already been signed by an authorized signatory of Harbour Grand.  It was stated at the bottom of page 1 that:

“ Upon signing of the Licence Agreement, the Licensee agrees to the grant of use of the Serviced Suite on the terms as stated above and subject to the conditions annexed herewith.

The Licence Agreement should be signed and returned to the Serviced Suites Department within 7 days of the issue date, otherwise the booking is not confirmed …”

On page 3 under “Bill Signing Privilege and Loss & Damage deposit”, it was provided, inter alia, that:

“ Loss & Damage deposit: HK$10,000 by cash or credit card imprintis required for guarantee any loss & damage of in-room inventory. In the event that Monthly Licence Fee is not paid as scheduled, the Licensor reserves the right to compensate the Monthly Licence Fee against the Loss & Damage deposit accordingly with any subsequent balance payable by the Licensee.”

E2. The claim in contract

12.  Mrs Michaels claims in both contract and tort.  Insofar as her claim in contract is concerned, she alleges that Harbour Grand breached the contract by imposing the undeclared “Loss & Damage Deposit”.  There is no legal duty on Habour Grand to provide any lodging to her unless and until the parties have entered into a legally binding agreement.  Her claim is premised on the existence of a legally enforceable agreement.  Mrs Michaels believed subjectively that a legally binding agreement had already been concluded.  However, whether there was a legally enforceable agreement must be ascertained objectively; and it is necessary to consider the contemporaneous documents to decide whether objectively the parties had unconditionally reached final agreement on all the intended terms of the contract (World Food Fair Ltd v Hong Kong Island Development Ltd(2006) 9 HKCFAR 735, §§35 – 38).

13.  According to the email dated 20 January 2015, although a room had been reserved and confirmed, it is clear that the licensee was required to sign the Licence Agreement.  Further, the remark concerning “Loss & Damage Deposit” in the email dated 19 January 2015, and the term concerning such deposit at page 3 of Licence Agreement, made it clear that Harbour Grand required the payment of a “Loss & Damage Deposit” as a condition of the agreement.  Ms Michaels (and her mother) did not agree to such payment; and hence, she refused to sign on page 3, and did not complete the execution, of the Licence Agreement.  In the circumstances, it is plain and obvious that there was no legally enforceable agreement.  Indeed, Mrs Michaels was not intended to be the licensee in any event.  Her claim in contract is doomed to failure.

E3. Her claim in tort

14.  It is not entirely clear what Mrs Michaels’ causes of action in tort are.  Nevertheless, I shall consider all possible causes of action based on the facts that she has pleaded.

15.  To begin with, breaking off negotiations is not a tort (Cartwright, Formation and Variation of Contracts (2014), §2-11, p 19).  Harbour Grand was entitled to insist on the payment of “Loss & Damage Deposit”; and refused to rent the Room unless such deposit had been paid.

16.  Mrs Michaels’ main complaint is that she had been misled in that Harbour Grand had not disclosed the “Loss & Damage Deposit” before Ms Michaels was asked to sign on page 3 of the Licence Agreement. Irrespective of whether she claims that the misrepresentation was made intentionally or negligently, her claim in misrepresentation must fail for two reasons.  First, on the facts, it is clear that Mr Lam had disclosed the “Loss & Damage Deposit” in the two emails.  Whether Mrs or Ms Michaels had actually read, or paid attention to, the content of those emails is beside the point. The factual allegation of non-disclosure is plainly unsustainable.  Second, even assuming that Mr Lam had failed to disclose the “Loss & Damage Deposit” earlier as alleged by Mrs Michaels, in law, it is well established that, generally speaking, non-disclosure does not constitute an actionable misrepresentation, and there is no general duty of disclosure between negotiating parties (Cartwright, Formation and Variation of Contracts (2014), §2-10, pp 17 – 18; Cartwright, Misrepresentation, Mistake and Non-disclosure (4^th edn, 2017), §17-44, pp 623 – 624).

17.  Mrs Michaels also claims that, as a result of the conduct of Harbour Grand, she and her daughter have suffered emotional stress.  Putting aside that her daughter is not a plaintiff in this action, I shall consider whether she has a viable claim for the tort of intentional and reckless infliction of emotional distress.

18.  In Wong Tai Wai David v The Hong Kong SAR Government CACV 19 & 247/2003 (7 September 2004, unreported), Yuen JA held in §36 of her judgment that it is arguable that, in Hong Kong, a tort of intentional (or reckless) infliction of injury (physical or mental) exists at common law; and that such a tort sounds in damages.  It is also arguable whether the tort requires the suffering of actual physical injury or known psychiatric illness, or whether mere distress or humiliation would suffice.  Ms Wong submitted that emotional stress is insufficient and there must be a recognized psychiatric illness (Clerk & Lindsell on Torts (21^st edn), §15-15, pp 1098 – 1099, Wong v Parkside Health NHS Trust [2003] 3 All ER 932 at pp 936 – 937).  However, in view of the judgment in Wong Tai Wai David (which is binding on me) and in the absence of any subsequent Hong Kong judicial authority deciding on this issue, for the present purpose, I must treat it as an arguable point of law.

19.  I shall focus on the mental element for such tort.  In Wong Tai Wai David, Yuen JA held in §37 of the judgment that:

“ Furthermore, if the tort(s) does/do exist, it would seem that the essential mental requirement (of the wrongdoer) has to be the intentional or at the lowest, reckless, infliction of injury—‌physicalor mental. An intentional or reckless state of mind toward the act under complaint is not sufficient. The wrongdoer must have intended to inflict injury (physical/mental) on the victim, or at the lowest, must have been reckless as to whether the victim would have sustained such injury as a result of his action. (By injury here, I am using it in a general sense to include also mere distress and humiliation, in case the same is sufficient to ground a claim).”

20.  In the circumstances of this case with particular regard to the indisputable contemporaneous documents considered above, I take the viewthat there is no realistic prospect for Mrs Michaels to prove that Habour Grand had any intention to inflict any injury (physical or mental) on her, or was reckless as to whether Mrs Michaels would have sustained such injury as a result of its act.  Any such suggestion is, in my view, fanciful.

21.  For the above reasons, I agree that the present action should be struck out.

F. THE O 14 APPEAL

22.  The principles for Order 14 applications are, again, well established. The court will only grant summary judgment in a clear case where there is no triable issue or arguable defence.  In view of my conclusionon the Striking Out Application, it must follow that the O 14 Appeal must be dismissed.

G. CONCLUSION AND ORDER

23.  Accordingly, I shall dismiss the O 14 Appeal, and allow the Striking Out Application.  I shall also order that Mrs Michaels shall pay the costs of this action, including the costs of and occasioned by the O 14 Appealand the Striking Out Application, to be summarily assessed.  Harbour Grandshall file a statement of costs within 14 days of this decision, and Mrs Michaels shall file a list of objections (if any) within 14 days thereafter.  I shall then assess the costs summarily on paper.