SPECTRUM PLUS LTD v. LOTUS HILL GOLF RESORT LTD t/a LOTUS HILL GOLF RESORT

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JUDGMENT

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1. By this Summary Judgment Application, the Plaintiff seeks summary judgment in the sum of $690,000 as money due and owing under a Sponsorship Agreement dated 21st of December 1993 ("Agreement") made between the Plaintiff and the Defendant. By the Agreement, the Defendant agreed to sponsor the 1994 and 1995 Hong Kong Golf Open tournament in Hong Kong. The Defendant was and is the owner of a golf resort in Guangdong Province ("Defendant's Resort") and apparently the desire to promote and sell the membership of the Defendant's Resort provided the reason for the Defendant to agree to be a sponsor of the 1994 and 1995 Hong Kong Golf Open which had been an annual golf event held at the Royal Hong Kong Golf Club at Fanling since 1970.

2. Under the Agreement the Defendant as sponsor was given various rights such as the right to put up advertising boards at favourite position on the course of the Fanling Club during the week of the Hong Kong Golf Open, the right to prominent advertising in the official Programme, the right to put up private marquee in a garden area during the tournament, the right to VIP passes and invitations to tournament social functions, the right to display and sell the Defendant's products at the tented village and the right to official tournament designation as Platinum Sponsor etc. The obligation of the Defendant under the Agreement is to make payments to the Plaintiff on specified dates by specified instalments, namely for the 1994 Hong Kong Golf Open sponsorship:-

and for the 1995 Hong Kong Golf Open sponsorship:-

3. It is agreed that the 1994 Hong Kong Golf Open was held and the Defendant made the payment for the 1994 sponsorship under the Agreement in the sum of $600,000. It is also agreed by the parties that the 1995 Hong Kong Golf Open was held in 1995 although not in February 1995. There is also no dispute that the Defendant refused to make any payment to the Plaintiff in respect of the 1995 sponsorship obligation as provided in the Agreement. The Defendant says that it has two bona fide grounds of defence to the claim of the Plaintiff for $690,000, namely:-

4. I will first consider the second defence because if there was an earlier termination of the Agreement in September 1994 by the signing of the China Open Contract then the custom point does not arise and there would also be no question of the Defendant exercising its right to give notice to terminate the Agreement as provided in Clause 7.0 of the Agreement. It seems to me that this defence based on the China Open Contract does not get off the ground because the parties to the China Open Contract are different from the parties to the Agreement. How can it be said that China Open Promoter could agree to terminate or cancel someone else's Agreement or that the Plaintiff could make for someone else, namely the China Open Promoter, the China Open Contract. The two contractual documents are quite separate and different rights and obligations arise under the two separate contracts. There was no reference in either the China Open Contract to the Agreement or in any contemporaneous documents exchanged between the parties to this alleged agreed termination or cancellation of the Agreement in relation to the 1995 sponsorship. In fact in the very first letter of the Defendant dated 4th March 1995 in answer to the letter before action from the Plaintiff, the contention of the Defendant was on the basis that there was no such alleged cancellation agreement. Notwithstanding what was alleged by Mr. David Lai in his Affidavit, I am not persuaded that the Defendant has established a bona fide or viable or credible defence based on this alleged agreement to cancel the 1995 sponsorship Agreement with the making of the China Open Contract.

5. The primary defence of the Defendant is that by the custom and practice prevailing in Hong Kong of the Hong Kong Golf Open being always held in January and February, there is an express term of the Agreement that the 1995 Hong Kong Golf Open is to be held in January or February 1995 or that the custom can explain the term in the Agreement. For me, the short point on this question is whether this custom or practice is contrary to any express provision or intention in the Agreement. Event is defined at Clause 1.1.1 of the Agreement as the Kent 1994 Hong Kong Golf Open tournament and the 1995 Hong Kong Golf Open golf tournament. In the Recital of the Agreement on the first page, it is provided that:-

"The Promoter hold the sole commercial right to promote ..... and provide sponsorship benefits to the Sponsor of the (Kent) Hong Kong Golf Open event and other functions ancillary in February 1994 and at a date to be determined by the Promoter in 1995."

The Agreement clearly provides and envisages that the Plaintiff is to have the right to decide at what time in 1995 (not at what time in January or February 1995), the 1995 Hong Kong Golf Open is to take place. I do not see how this right of determining the time of the 1995 Hong Kong Golf Open can possibly be consistent with the alleged express term or alleged custom that the 1995 tournament must be held in January or February 1995. This fatal point is decisive on the question against the Defendant. But if one studies also the contractual payment obligations, it is clear that even in respect of the 1994 event, the payment dates are definite dates albeit prior to the scheduled February 24-27 1994 dates for the Kent 1994 Hong Kong Open and are not expressed to be certain number of days before the holding of the event which could be so framed if the parties desire to structure the time of payment by reference to the days when the events are actually held. I take the view that the dates of the payments are independent of the dates when the tournament is actually held and that irrespective of when the 1995 Hong Kong Golf Open is held (which dates in 1995 are to be determined by the Plaintiff Promoter), the Plaintiff is entitled to be paid what had been provided in the Agreement. Finally it is surprising if there had been no agreed cancellation of the Agreement by the making of the China Open Contract, that the Defendant who believed his right to have the 1995 Hong Kong Golf Open held in January or February 1995, did not either complain by letter or seek to terminate the Agreement by the giving of the 3 days written notice under Clause 7.1.1 of the Agreement. In the circumstances, I find also against the Defendant on its primary defence of custom.

6. I conclude therefore that no triable issues had been raised and that summary judgment must be given against the Defendant. Without any Affidavit evidence, Mr. Hill seeks also at the hearing to argue the matter of quantum. Mr. Wintle has very graciously indicated that the Court can grant Interlocutory Judgment for damages to be assessed. Accordingly, I order that Interlocutory Judgment be entered against the Defendant for damages to be assessed. The Plaintiff is to be awarded the costs of the Action including the costs of this Summary Judgment application.