IGNACIO VUELTA MARTINEZ v. ELLITH INTERNATIONAL LTD

DCCJ 3802/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3802 OF 2013

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JUDGMENT
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1.  The defendant is absent in today’s hearing.  I am satisfied with the service of the notice of hearing and proceed to trial.

2.  The plaintiff claims the sum of €24,771 under three contracts: the expatriate contract, the assignment partners contract and the international contract (collectively hereinafter referred to as “the contracts”).

3.  I am of the view that the issues in dispute are:  (a) whether the salary declaration and the compliance conditions of the international contract are fundamental conditions; (b) whether they are conditions precedent to any payments made by the defendant to the plaintiff; (c) whether the plaintiff is in repudiatory or anticipatory breach of the contracts. 

4.  I accept the plaintiff’s submission that the compliance conditions and the salary declaration conditions are not conditions fundamental to the international contract. A condition is a stipulation that is regarded as so vital to the contract that its complete and exact performance by one party is condition precedent to the obligation of the other party to perform his part.  The compliance conditions and the salary declaration conditions cannot be said to be fundamental to the carrying out of the contract.  The contracts are basically consultancy agreements that trade service for remuneration.  These conditions are only warranties and their non-performances do not discharge the defendant from performing under the contracts. 

5.  According to the provisions, the plaintiff will advise the relevant tax authorities of the payment under the contracts and discharge such tax liability, if any, and if the plaintiff fails to do so, he will indemnify the defendant from anything that may arise from such failure. 

6.  Furthermore, under the terms of the contracts, the defendant may withhold a portion of the salary to be paid for taxation or similar purposes, then the defendant will pay the remaining portion of the salary to the plaintiff.  There is no evidence that the defendant exercised such power for withholding payment.   As shown in the emails between the parties, the defendant was just delaying payment and made up a lot of excuses.  The emails subsequent to 8 January 2013 did not mention the compliance problem.  Furthermore, the terms are not conditional precedent to the payment.

7.  As there are express governing terms relating to the payment arrangement, the defendant could not rely on any implied terms.  

8.  There is also no evidence that the plaintiff is subject to any tax liability in Spain as he worked overseas most of the time.  The defendant may also be indemnified of any such loss. 

9.  In conclusion, I grant judgment in favour of the plaintiff in the sum of €24,771, together with interest and costs. 

10.  Interest will be calculated at judgment rate from the filing of the claim to the judgment date, and thereafter at judgment rate until payment.

11.  And for costs, I have read your bill, I am prepared to assess costs at the sum of $220,000 and disbursement at $18,000, so altogether $238,000.