Case Detail

DCCJ 3838/2023

[2024] HKDC 2184

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3838 OF 2023

--------------------------

BETWEEN
	SUCCESS LANE DEVELOPMENT LIMITED	Plaintiff
	and
	IFC DEVELOPMENT (SUITE) LIMITED AS AGENT FOR IFC DEVELOPMENT LIMITED	Defendant

-------------------------

Before:

His Honour Judge Alan Kwong in Chambers (Open to the Public)

Date of Hearing:	17 December 2024
Date of Decision:	17 December 2024

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DECISION

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A. Introduction

1. On 15^th April 2024, Master Vincent Kee struck out the Plaintiff’s claims in this action, and ordered costs against the Plaintiff, which was summarily assessed on an indemnity basis.

2. By the Decision dated 14^th August 2024 (see[2024] HKDC 1396)[1], I dismissed the Plaintiff’s appeal against Master Vincent Kee’s decision as well as the Plaintiff’s application to amend the statement of claim pursuant to the summons dated 9^th August 2024. I also ordered indemnity costs against the Plaintiff, which I summarily assessed at HK$120,000[2] pursuant to the directions set out in paragraph 38 of the Decision.

3. In my view, the Plaintiff’s claims herein were unarguably bad and thus liable to be struck out. For the reasons elaborated in the Decision, I was of the view that:

(1)  The Plaintiff, which is a company with no feeling, was incapable of suffering “diminished enjoyment” in respect of the three Registered Guests’ dissatisfaction of the services provided by the Defendant. Thus, the Plaintiff did not suffer, and could not have suffered, any loss and damage. (see Decision, para 22(1)-(4));
(2)  It would be abusive for the Plaintiff to seek nominal damages and/or declaration in the present proceedings only as (i) the District Court hears civil disputes of values between HK$75,000 and HK$3 million; and (ii) the Long Staying Agreements had expired already, and there was no suggestion that the present proceedings would clarify the existing rights and obligations of the parties. (see Decision, para 22(5);
(3)  There was no contractual provision stipulating that the Defendant was obliged to provide an “ideal environment” to the Registered Guest. As a matter of contractual construction, the “Welcome Message” in the Service Guide was not a contractual term at all. (see Decision, para 23);
(4)  The Plaintiff was unable to show that the Defendant breached any express terms or provisions in the Long Staying Agreements and/or the Service Guide (see Decision, para 24);
(5)  There was no implied contractual term requiring the Defendant to provide an “ideal environment” and/or “quality services”. These notions were hopelessly vague, incapable of being defined/ascertained and entirely subjective. Further, without the alleged implied term, the Long Staying Agreements would still be effective and/or operative. (see Decision, para 25)

4. On 28^th August 2024, the Plaintiff took out a summons seeking leave to appeal against my Decision.

5. At the present hearing, the Plaintiff, through its director Madame Jesse Yung, acts in person. Mr Ernst Ng represents the Defendant.

B. Legal Principles on Leave to Appeal

6. Section 63A of the District Court Ordinance (Cap 336) stipulates that no leave to appeal shall be granted unless the proposed appeal has a reasonable prospect of success or there is some other reason in the interests of justice that the appeal should be heard.

7. It is trite that the party that seeks to appeal bears the burden of satisfying the Court that his or her appeal has a reasonable prospect of success. This means an appeal with prospects that are more than fanciful but which do not need to be shown to be probable: SMSE v KL [2009] 4 HKLRD 125 at para 17.

8. As Kwan JA (as she then was) pointed out in秦錦釗及香港特別行政區[2018] HKCA 167 at para 8, in light of the function of the Court of Appeal, it would be futile for an appellant to rehearse the contentions that were rejected by the first instance judge. Instead of doing so, the appellant should focus on the first instance judge’s reasoning and pinpoint the error in respect thereof. See also李智慧及昆士蘭保險（香港）有限公司[2021] HKCA 984 at para 11 (per Chow JA).

C. Deliberation

9. The proposed grounds of appeal are set out and elaborated in the Plaintiff’s written submissions dated 12^th December 2024.

Proposed Ground 1

The Contentions based on the Court of Appeal’s Judgment in Sir Elly Kadoorie

10. As pointed out in paragraph 22(3) of the Decision, the Plaintiff failed to make pleas and put forward evidence to explain how it could have suffered “diminished enjoyment” and/or any other kind of loss and damage. In paragraph 22(1), I pointed out that the Plaintiff, which is a company, is an artificial creation with no feeling. As such, it could not have suffered “diminished enjoyment” in respect of the dissatisfaction alleged by the three Registered Guests. In this connection, I referred to Sir Elly Kadoorie & Sons v Bradley [2023] 3 HKLRD 587 at para 66 (per DHCJ Herbert Au-Yeung, as he then was).

11. In its written submissions, the Plaintiff points out that shortly[3] after I gave the Decision, the Court of First Instance’s decision in Sir Elly Kadoorie was overturned by the Court of Appeal: see[2024] HKCA 747; [2024] 4 HKLRD 428. The Plaintiff then goes on to contend I erred in concluding that the Plaintiff could not have suffered “diminished enjoyment”.

12. The Plaintiff’s contention has no merit and is based on its misunderstanding of the Court of Appeal’s judgment in Sir Elly Kadoorie.

13. As Mr Ernest Ng (for the Defendant) correctly pointed out, the issue before the Court of Appeal in Sir Elly Kadoorie was “whether a corporate entity can be a victim of harassment, and may sue in the tort of harassment in its own right” (see Court of Appeal’s judgment at para 61 (per Chow JA)).

14. However, in the present proceedings, the issue was whether the Plaintiff (being a company) could seek “contractual damages”[4] based on the alleged dissatisfaction of the three Registered Guests[5] who were nominated to use the facilities and services provided by the Defendant.

15. In Sir Elly Kadoorie, having examined counsel’s submissions as well as the local and overseas jurisprudence (see judgment at paras 60-68), Chow JA held that since a corporation may need to incur expenses to counteract or abate the harassment that causes worry, distress or annoyance to its employees, it is arguable that a corporation may bring an action for harassment in its own capacity (see judgment at paras 62(1) and 67(1)). The Court of Appeal did not suggest that a company, being an artificial legal creation, is capable of having emotion and/or feeling upset. On the contrary, the Court of Appeal’s analysis was based on the premise that only a natural person (such as a company’s employee) is capable of suffering “worry, emotional distress or annoyance”.

16. In the premises, when Sir Elly Kadoorie is properly understood, it is apparent that the Court of Appeal’s reasons for overturning the first instance decision do not support the Plaintiff’s claims in this action at all.

17. At the present hearing, Madame Jesse Yung (for the Plaintiff) keeps emphasizing that the Plaintiff provided accommodation for its director. This assertion has no substance and no merit at all. There was no plea and no evidence suggesting that the business or operation of the Plaintiff was adversely affected because the three Registered Guests were discontented with the Defendant’s services.

18. Whilst the only substantive relief sought by the Plaintiff in this action was contractual damages[6], the Plaintiff failed to make out a case that it had suffered loss and/or damage based on “diminished enjoyment”. For this reason alone, the Plaintiff’s claims in this action should be struck out and dismissed.

Declaration

19. At the previous hearing on 14^th August 2024, Madame Jesse Yung argued that even if the Plaintiff did not suffer any loss and damage, it was still entitled to seek nominal damages and/or declaratory reliefs against the Defendant.

20. Against this background, in paragraph 22(5) of the Decision, I explained why it would be abusive for the Plaintiff to seek nominal damages and/or declaratory reliefs in the present proceedings only.

21. The Plaintiff now contends I overlooked the court’s wide jurisdiction to grant declaratory reliefs and misapplied Koo Ming Kown v Rev Mr Mok Tong Ting[2018] HKCFI 967 at paras 19-20 (per DHCJ To).

22. This complaint has no substance.

23. It is trite that the courts would not adjudicate academic controversies that serve no useful purposes and do not affect the parties’ interest. Koo Ming Kown is one of the cases where the court applied this well-established principle. In the present case, the Plaintiff failed to explain how the adjudication of its purported Complaints might serve any useful purpose when the Long Staying Agreement had expired already.

24. Knowing the difficulty that it faces, the Plaintiff seeks to advance a new contention in its written submissions. It is suggested that if the court makes a declaration, this will facilitate the assessment of damages.

25. This new contention is not only illogical, but also without basis. It is not even arguable that the Plaintiff has suffered loss and damage at all. There is simply nothing to assess.

Conclusion

26. The contentions under the first proposed ground of appeal are wholly unmeritorious and unarguable.

Proposed Ground 2

27. The Plaintiff says that I erred in concluding that the “Welcome Message” in the Service Guide did not constitute a contractual term. The Plaintiff contends that my approach to contractual interpretation was flawed, in that I overlooked the background against which the parties entered into a contractual relationship.

28. This contention has no substance. The Plaintiff fails to pinpoint any factual matters that support its suggestion that the Defendant’s greeting under the “Welcoming Message” in the Service Guide constituted a contractual term.

29. In any event, the purpose of contractual interpretation is to ascertain the objective contractual intention of the parties. The Plaintiff cannot identify any palpable error in respect of the analysis set out in the Decision. There is no point in regurgitating the contentions that I did not accept.

30. The second ground of appeal is wholly unarguable and unmeritorious. In any event, having said the Plaintiff has not suffered any loss and damage, it would be futile to allow the Plaintiff to pursue the same.

Proposed Ground 3

31. The Plaintiff suggests that I conducted a mini trial on affidavit in respect of the Complaints and that I misunderstood some of the factual matters in relation thereto.

32. Contrary to the Plaintiff’s incorrect suggestion, I did not conduct a mini trial; nor did I embark on a fact-finding exercise. In paragraph 24 of the Decision, I simply explained why none of the express terms and provisions of the Long Staying Agreements and the Service Guide supported the Plaintiff’s claims. Thus, even assuming that the Plaintiff’s allegations regarding the Complaints were true, the Plaintiff’s claims still failed.

33. For completeness, it should be pointed out that there was no misunderstanding about the factual matters in relation to the Complaints. I was fully aware of the Plaintiff’s pleas, proposed amendments and allegations contained in the affirmations. However, for the sake of brevity and proportionality, it would not be desirable to set out all the details in respect of the Complaints, and it sufficed to provide a summary in paragraph 14 of the Decision.

34. The third ground of appeal is entirely unarguable and unmeritorious. In any event, having said the Plaintiff has not suffered any loss and damage, it would be futile to pursue the same.

Proposed Ground 4

35. The Plaintiff suggests that I failed to apply the legal principles on striking-out and to take the Plaintiff’s case to the highest. As a result, I erred in finding that the Plaintiff’s claims are frivolous, vexatious and an abuse of process.

36. The Plaintiff’s contention has no substance. The legal principles on striking-out were set out in paragraph 18 of the Decision, and I dealt with the matter on the basis that all the factual allegations raised by the Plaintiff were substantiated. Notwithstanding so, the Plaintiff’s claims still failed to take off the ground.

37. The fourth ground of appeal is also entirely unarguable and unmeritorious.

Proposed Ground 5

Request for a further Opportunity to revise the Amendments in the Statement of Claim

38. The Plaintiff contends that I should have allowed it to have a further opportunity to revise the proposed amendments to the statement of claim at the hearing on 14^th August 2024.

39. As pointed out in paragraph 30 of the Decision, I declined to exercise my discretion in favour of the Plaintiff for the following reasons:

(1) Madame Jesse Yung, who represented the Plaintiff at the hearing on 14^th August 2024, was unable to explain what the revised amendments were about, and I failed to see how the Plaintiff’s claims could be salvaged by further amendments;
(2) The Plaintiff had already attempted to salvage its claim by seeking to amend the statement of claim, but the attempt was futile. It would be unfair to the Defendant if the Plaintiff were allowed to drag on the present proceedings further.

40. Whilst Plaintiff disagrees with my conclusion, it fails to explain why my exercise of discretion was plainly wrong, unreasonable and/or erroneous.

41. Having considered the written submissions advanced by the Plaintiff for present purposes, I am still firmly of the view that its claims in the present action are utterly hopeless, frivolous, vexatious and incapable of salvaged. Thus, the Plaintiff should not be allowed to drag on the present proceedings any further.

42. For completeness, it should be pointed out that by the letter dated 12^th December 2024, the Plaintiff seeks to put forward a revised draft amended statement of claim. In paragraph 32 of this new document, the Plaintiff makes a new allegation that it paid HK$120,000 to the director’s family as compensation in respect of their failure to enjoy the facilities and services provided by the Defendant.

43. This belated allegation is obviously dubious, self-serving and devoid of particulars. In any event, as Mr Ernst Ng pointed out, this is the Plaintiff’s application for leave to appeal against my Decision on 14^th August 2024. Bearing in mind that the proceedings had already come to an end, I agree with Mr Ng’s submissions that it would not be appropriate to proceed on the basis of the new allegations made by the Plaintiff. After all, the Plaintiff must not be allowed to drag on these proceedings by creating complications, and the court must remain vigilant to ensure that its process would not be abused.

Appeal against the Costs made by Master Vincent Kee

44. The Plaintiff contends that I erred in upholding the costs order made by Master Vincent Kee as I misunderstood the basis of his decision.

45. Contrary to the Plaintiff’s false suggestion, I did not take the view that Master Kee ordered indemnity costs against the Plaintiff because he believed that the Plaintiff’s litigation conduct was unwarranted.

46. The reasons of the Master Kee are recorded in a note that was signed[7]. Nowhere was it suggested that the Master awarded indemnity costs on the basis that the Plaintiff’s conduct was unwarranted.

47. As clearly stated in paragraph 33 of the Decision, I was aware that Master Kee took the view that the Plaintiff’s case was unarguable, and this was the basis for ordering indemnity costs against the Plaintiff.

48. Having considered the skeleton submissions from the Plaintiff’s former counsel and having heard Madame Jesse Yung as well as the Defendant’s legal representatives at the hearing on 14^th August 2024, I was (and still am) firmly of the view that Master Kee was correct to (i) order indemnity costs against the Plaintiff; and (ii) to conduct gross-sum assessment.

49. I could not discern any errors on the part of Master Kee. I cannot see how the Plaintiff can seriously suggest that I was wrong to affirm Master Kee’s decision on costs.

Setting aside the Costs Order made by Master Vincent Kee

50. The Plaintiff alleges that Madame Jesse Yung was absent from the hearing on 15^th April 2024 due to sickness. On this basis, it is argued that I erred in failing to set aside the costs order made by Master Kee pursuant to order 32, rule 5.

51. The Plaintiff’s contention is wholly misconceived.

52. As early as 16^th April 2024, the Plaintiff took out a summons seeking to set aside Master Vincent Kee’s order pursuant to order 32, rule 5. By the order dated 20^th May 2024, Master Ross Li dismissed the Plaintiff’s application. Had the Plaintiff been aggrieved by Master Li’s decision, the Plaintiff should have pursued an appeal against such decision. This was never done.

53. The Plaintiff’s notice of appeal dated 25^th April 2024, which was heard by me at the hearing on 14^th August 2024, had nothing to do with Master Ross Li’s decision on 20^th May 2024 as well as the application seeking to set aside Master Kee’s order pursuant to order 32, rule 5.

54. Instead, the said notice of appeal and the hearing on 14^th August 2024 were concerned with the question whether Master Vincent Kee’s decision should be affirmed or not. For the reasons set out in the Decision, I took the view that Master Kee was correct to strike out the Plaintiff’s claims in this action. I also disagreed that there was any error on the part of Master Kee insofar as the question of costs was concerned. Thus, I refused to disturb his costs order.

55. I cannot see how the Plaintiff can seriously suggest that there was any breach of the principles of natural justice and/or procedural fairness. The Plaintiff’s complaint is unwarranted.

Conclusion

56. The contentions under the fifth proposed ground of appeal are wholly unmeritorious and unarguable.

Proposed Ground 6

57. The Plaintiff contends that I should not have ordered indemnity costs in favor of the Defendant and that my ruling was erroneous.

58. As pointed out in paragraph 36 of the Decision, I took the view that the Plaintiff’s case was unarguably bad, utterly unmeritorious and the court’s process was abused. In the circumstances, it was plainly appropriate to order indemnity costs in order to show the court’s approval of the Plaintiff’s litigation conduct.

59. The Plaintiff is unable to identify any palpable error in respect of my exercise of discretion.

60. Ground 6 is wholly unarguable and unmeritorious.

Proposed Ground 7

61. The Plaintiff contends that I erroneously conducted a gross sum assessment based on the inflated figures and inflated hourly rates provided by the Defendants’ solicitors.

62. There is neither truth nor substance in this complaint. I did bear in mind that this was a District Court case. Whilst I adopted a broach brush approach, I took into account the relevant circumstances, including the complexity of the dispute, the question of proportionality, the amount claimed by the Defendant and the objections raised by the Plaintiff. Indeed, whilst the Defendant claimed an amount of HK$218,870, I only allowed HK$120,000.

63. I cannot see how the Plaintiff can seriously suggest that the gross sum assessment that I conducted was flawed and/or erroneous.

D. Order and Disposition

64. For all the above reasons, I am of the view that the Plaintiff’s intended appeal does not have a reasonable prospect of success. I am also unable to see any reason in the interests of justice why the intended appeal should be heard.

65. Accordingly, I dismiss the Plaintiff’s summons dated 28^th August 2024.

66. Whilst the Plaintiff’s application is utterly unmeritorious, the barrel-scrapping approach adopted by the Plaintiff is also deplorable. In order to show the Court’s disapproval of such litigation conduct, it would be appropriate to order indemnity costs against the Plaintiff.

67. I order the Plaintiff to pay the Defendant’s costs in respect of the said summons dated 28^th August 2024 forthwith, summarily assessed on an indemnity basis at HK$68,000.

68. I express my gratitude to Mr Ernest Ng for his helpful assistance.

( Alan Kwong )
District Judge

The Plaintiff appeared in person

Mr Ernest Ng, instructed by Tanner De Witt, for the Defendant

[1] The definition and nomenclature that were used in the Decision are adopted.

[2] The summary assessment was conducted on 20^th September 2024

[3] Whilst my Decision was given on 14^th August 2024, the Court of Appeal handed down the judgment of Sir Elly Kadoorie & Sons Ltd v Samantha Jade Bradley[2024] HKCA 747; [2024] 4 HKLRD 428 on 26^th August 2024.

[4] See prayer 1 of the draft amended statement of claim

[5] See Decision, paras 10 and 12. The three Registered Guests were natural persons. They were a family.

[6] See prayer 1 of the draft amended statement of claim

[7] This note has been in the court file.

DCCJ 3838/2023

[2024] HKDC 1369

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3838 OF 2023

________________________

BETWEEN

	SUCCESS LANE DEVELOPMENT LIMITED	Plaintiff
	and
	IFC DEVELOPMENT (SUITE) LIMITED AS AGENT FOR IFC DEVELOPMENT LIMITED	Defendant

________________________

Before:

His Honour Judge Alan Kwong in Chambers (open to public)

Date of Hearing:	14 August 2024
Date of Decision:	14 August 2024

________________________

DECISION

________________________

Introduction

1. On 15 April 2024, Master Vincent Kee of the District Court struck out the Plaintiff’s claims in this action on the grounds that no reasonable cause of action has been disclosed. The learned Master also ordered costs against the Plaintiff, which was summarily assessed on an indemnity basis.

2. On 25 April 2024, the Plaintiff took out a notice of appeal seeking to overturn Master Kee’s order. After the said notice of appeal was taken out, the Plaintiff, through solicitors, further took out an inter partes summons dated 9 August 2024 seeking to amend its statement of claim.

3. This is the substantive hearing in respect of the Plaintiff’s appeal against Master Kee’s order and its application to amend the statement of claim.

4. Mr Chris Fong (counsel for the Plaintiff) and Mr Douglas Clark (solicitors advocate for the Defendant) have lodged written submissions (which I have considered).

5. However, shortly before the present hearing, Madame Yung Mei Chun (also known as Jessie Yung)[1] filed a notice to act in person on the Plaintiff’s behalf. In the circumstances, at the present hearing Madame Yung appears for the Plaintiff acting in person and the Defendant is represented by Mr Clark.

Material Background

6. IFC Development Limited is the owner of the hotel known as Four Seasons Place situated at 8 Finance Street Center (hereinafter the “Four Seasons Hotel”).

7. The Defendant is a subsidiary of IFC Development Limited.

8. The Plaintiff is a company incorporated in Hong Kong.

9. On 8 March 2022 and 7 September 2022, the Plaintiff acting in the capacity as the agent of IFC Development Limited entered into two long staying agreements (the “Long Staying Agreements”) with the Plaintiff.

10. In short, the Long Staying Agreements provided that subject to the terms and conditions therein as well as the terms and conditions of the service guide (the “Service Guide”), the three registered guests nominated by the Plaintiff (hereinafter collectively the “Registered Guests”) were authorized to use and occupy room 2228 of the Four Seasons Hotel during the period from 10 March 2022 to 9 September 2023.

11. As stated in clause 1 of the Long Staying Agreements, the 3 Registered Guests nominated by the Plaintiff are (i) Mr Cheung Moon Hoi (who is also known as Mr Jeff Cheung); (ii) Madame Jessie Yung; and (iii) Mr Cheung Yuk Ming.

12. The evidence shows that Madame Jessie Yung is Mr Jeff Cheung’s wife, and Mr Cheung Yuk Ming is their son.

13. According to the public records maintained with the Companies Registry[2], Mr Jeff Cheung was a director of the Plaintiff at the material times, and the sole shareholder of the Plaintiff was Mr Cheung Kwong Hoi.

14. In the initial statement of claim and the draft amended statement of claim, the Plaintiff complains that the 3 Registered Guests received sub-standard services at the Four Season Hotel and that they were subject to discriminatory treatment[3]. The alleged complaints can be summarized as follows:

(1)  The Registered Guests and a friend invited by them was asked to leave the Sky Lounge on 26 August 2022 (the “Sky Lounge Complaint”)[4].
(2)  When the Registered Guests used a meeting room on the 59^th floor on 25 November 2022, the hot water supply at the Sky Lounge was out of order, and they were only provided with an electric water kettle (the “No Hot Water Complaint”)[5].
(3)  The Defendant allegedly expedited the billing in respect of the use of the meeting room on the 59^th floor on 25 November 2022 (the “Expedited Billing Complaint”)[6].
(4)  On 14 January 2023, the Defendant accused the Registered Guests of leaving rubbish outside of room 2228 thereby causing obstruction. Meanwhile, the Defendant did not take action against another occupant who left service trolleys in the corridor (the “Rubbish/Obstruction Complaint”)[7].
(5)  The employees of the Defendant were allegedly discriminatory and manipulative when they negotiated the terms of the Long Staying Agreements. Some other occupants obtained leasing terms that were more favourable than those offered to the Plaintiff (the “Negotiation Complaint”)[8].

15. In light of the aforesaid Complaints, the Plaintiff says that the Defendant failed to provide “an ideal environment” to the Plaintiff and the Registered Guests, and this constituted breach of:

(1) the terms and provisions of the Service Guide (which was incorporated pursuant to clause 14 of the Long Staying Agreements); and
(2) the implied contractual terms in the agreements between the parties[9].

16. The Plaintiff also says that it has “suffered loss and damage” by reason of “the diminished enjoyment of the amenities and facilities” at the Four Seasons Hotel[10].

17. In these premises, the Plaintiff seeks damages against the Defendant (to be assessed)[11].

Legal Principles on Striking Out and Amending Pleadings

18. The legal principles on striking out are trite:-

(1)  A proceeding is frivolous when it is not capable of reasoned argument or cannot possibly succeed. A proceeding is vexatious when it is oppressive or in lack of bona fides. The court may strike out a claim that is incapable of reasoned argument, without foundation or cannot possibly succeed. However, the power to strike-out shall only be exercised in plain and obvious cases: see Oh Jae-hoon Eugene v Richdale [2005] 2 HKLRD 285, para 15 (per Ma CJHC, as Ma CJ then was); Yifung Properties Ltd & Ors v Manchester Securities Corp & Ors (HCA 1341 & 1359/2014, 19 October 2015), para 12 (per Queeny Au-Yung J); and Hong Kong Civil Procedure (2024)  at para 18/19/8.
(2)  If on a careful reading of the statement of claim, it can be seen that there is no cause of action or the claim will obviously not succeed, then it will be struck out despite the apparent complexity: see Hong Kong Civil Procedure (2024)  at para 18/19/4; Cheung Chui Sou Ying v Personal Repersentatives of Cheung Yuk Luen [1981] HKLR 585 at 588H.
(3)  There should be no trial on affidavit and disputed facts are taken in favour of the party sought to be struck out. However, the court should remain vigilant to ensure that its process are not abused by prosecution of hopeless claims: see The New China Hong Kong Group Ltd & Anor v Kwai Kai Kenneth & Ors (HCA 519/2010, 11 February 2011)  at para 40 (per Fok JA, as Fok PJ then was).

19. As regards the legal principles on amending pleadings, it is trite that all amendments that ventilate the real question in controversy between the parties should be allowed. However, no leave to amend would granted if it is readily apparent that the proposed amendment is bound to fail: see Natamon Protpakorn v Citibank NA [2009] 1 HKLRD 455 at para 25 (per Cheung JA); Re Playmates Investments Ltd [1996] 4 HKC 577 at 582E-H (per Le Pichon J (as Le Pichon JA then was); Hong Kong Civil Procedure (2024) at para 20/8/6.

Analysis

20. It is trite that an appeal from a master’s decision to a judge in chambers is a de novo hearing, and the judge will deal with the matter in question as if it came before him or her for the first time: see Hong Kong Civil Procedure (2024) at para 58/1/2.

21. For the following reasons, I am of the view that the Plaintiff has failed to disclose a reasonable cause of action, and the proposed amendments are incapable of salvaging the Plaintiff’s claims, which are unarguably bad and doomed to failure.

22. First of all:-

(1)  A company is an artificial legal creation, and it has no feelings. As pointed out by DHCJ Herbert Au-Yeung (as Herbert Au-Yeung J then was)  in Sir Elly Kadoorie & Sons v Bradley [2023] 3 HKLRD 587 at para 66, a company cannot suffer worry, emotional distress or annoyance.
(2)  In the premises, even if the Plaintiff’s Complaints were substantiated, the Plaintiff could not have suffered “diminished enjoyment” as alleged. This suggestion makes no sense and is untenable. The persons who occupied room 2228 and used the facilities and services at the Four Seasons Hotel were the 3 Registered Guests, not the Plaintiff.
(3)  In the circumstances, the Plaintiff has been unable to make any plea and/or put forward any evidence to explain how it could have suffered “diminished enjoyment” and/or any other kind of loss and damage.
(4)  In my view, the Plaintiff’s claims are not only unarguably bad and doomed to failure, but also abusive. Whilst the three Registered Guests were discontent with the Defendant’s services, it is plain that the Plaintiff has not suffered any loss and damage.
(5)  Knowing the difficulty faced by the Plaintiff, Madame Yung suggests that the Plaintiff is, at least, entitled to seek nominal damages as well as a declaration against the Defendant. I am not persuaded by Madame Yung’s contention. As pointed out by Mr Clark, if the Plaintiff were only entitled to nominal damages, it should have brought its claim in the Small Claim Tribunal, not the District Court (which hears civil disputes of value over HK$75,000 but less than HK$3million). Moreover, I do not see any legitimate reason why the Plaintiff’s Complaints should be entertained in the circumstances of the present case. By now, the Long Staying Agreements have expired already. There is no suggestion that the adjudication by the court would serve the purpose of clarifying the position in respect of the parties’ rights and obligations. In this connection, it is trite that the court does not adjudicate academic controversies in the vacuum that serves no useful purpose and does not affect the parties’ interest: see eg Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438, at 448 (per Lord Dunedin); and Koo Ming Kown v Rev Mr Mok Tong Ting[2018] HKCFI 967 at paras 19-20 (per DHCJ To).

23. Second, there is no basis for the Plaintiff to contend that there is an express contractual term requiring the Defendant to provide the Registered Guests with an “ideal environment”. This contention is misconceived and unarguable:

(1)  I accept that clause 14 of the Long Staying Agreements referred to the Service Guide.
(2)  However, as pointed out by Mr Clark, section 1 of Service Guide (on which the Plaintiff’s claims in this action are premised)  was merely a welcome message from the management of the Four Seasons. It read as follows:-
“Section 1- Welcome Message
It is a great pleasure to extend the warmest welcome on your move-in to the Four Seasons Place Hong Kong (the “Suite Hotel”), a development designed with great care, and managed by the staff of the Four Seasons Place Hong Kong in order to provide you with an ideal environment during your stay in Hong Kong.”
(3)  As a matter of construction, the aforesaid welcome message was not a contractual term at all. It was merely a greeting from the management of the Four Seasons Hotel out of courtesy. It did not impose, and could not have imposed, any contractual obligation on the part of the Defendant.
(4)  Indeed, the notion of “ideal environment” was hopelessly vague and incapable of being defined or ascertained. The parties could not have agreed that the welcome message should constitute part of the contractual relationships between the parties. This could not be the objective intention of the parties.

24. Third, none of the express terms or provisions in the Long Staying Agreements and the Service Guide (which was referred to in clause 14 of the Long Staying Agreements) support the Plaintiff’s Complaints:-

(1)  Insofar as the Complaints in relation to the use of the Sky Lounge and the Hot Water are concerned, none of the express terms or provisions in the Long Staying Agreements and/or the Service Guide suggest that the Defendant was contractually obliged to open the Sky Lounge and/or offer hot water through the facilities there on a 24-hour basis. Common sense dictates that there were times when hotel facilities were tentatively closed for cleaning or maintaining purposes. The Plaintiff’s Complaints were plainly unreasonable.
(2)  As regards the Rubbish/Obstruction Complaint, none of the express terms or provisions in the Long Staying Agreements and/or the Service Guide suggest that the Defendant might not remind guests to be considerate and avoid causing nuisance to others. In this connection, the Service Guide expressly provides that hotel guests:-
(a)  are expected to conduct themselves in a reasonable and courteous manner with full consideration for the wellbeing and comfort of other occupiers, visitors and employee; and
(b)  may not cause nuisance, annoyance, damage or disturbance to others.
(3)  As regards the Expedited Billing Complaint, the Service Guide provides that in the absence of other billing arrangements, a credit card should be provided upon checking-in, and the cardholder should authorize the Defendant to settle all incidental charges using the credit card on a monthly basis without further approval at the end of each calendar month. It appears that the purpose of relevant term of the Service Guide was to impose an obligation on the occupiers to provide a credit card and to agree that the credit card be charged at the end of each calendar month. I am not of the view that the term relied on by the Plaintiff imposes obligations on the part of the Defendant at all. In any event, based on the pleas in the amended statement of claim[12], I cannot see how it can be said that the Defendant breached the terms of the Service Guide. The Plaintiff only pleaded that the staff at the front desk billed the use of the meeting on the 59^th floor on 27 November 2022, as opposed to 30 November 2022 (which was the last day of the month). It was not pleaded that the Defendant actually debited the sum in respect of the service charge before 30 November 2022. More fundamentally, there is no plea suggesting that the credit card in question was provided by the Plaintiff (as opposed to the Registered Guests). As such, even on the Plaintiff’s pleas, it cannot be shown that the Plaintiff had suffered any loss or damage as a result of the alleged pre-mature billing.
(4)  Lastly, as regards the Negotiation Complaint, none of the express terms or provisions in the Long Staying Agreements and/or the Service Guide provides that the Defendant was contractually obliged to offer the most favourable deal to the Plaintiff. It would be surprising if this kind of contractual term finds its way to the parties’ agreement.
(5)  Anyhow, the Plaintiff’s claim in respect of the Negotiation Complaint is bad in law. As Kwan VP pointed out in Lucy Michaels v Harbour Grand Hong Kong[2020] HKCA 705 at paras 80 to 81 (citing Formation and Variation of Contracts by John Cartwright (2^nd ed)  at paras 2-10 and 2-11):-

“80. … There is no general duty not to cause loss by breaking off negotiations and no general duty of care to respect the other party’s interest during the negotiations. Even the deliberate breaking off of negotiations, in the knowledge that the other party will suffer loss, is not tortious.”
“81. … there is no general duty of disclosure between negotiating parties….”

25. Fourth, I reject the Plaintiff’s contention that there was an implied contractual term requiring the Defendant to provide an “ideal environment” and/or “quality services”[13]:-

(1)  In Kensland Realty Limited v Whale View Investment Ltd (2021)  4 HKCFAR 381 at para 23[14], Bokhary PJ (applying BP Refinery (Westerpoint)  Pty Ltd v Shire of Hastings (1978)  52 ALJR 20 at p 26)pointed out in order for a term to be implied:-
“(1)  it must be reasonable and equitable; (2)  it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3)  it must be so obvious that it goes without saying; (4)  it must be capable of clear expression; and (5)  it must not contradict any express terms.”
(2)  As pointed out, the notion of “ideal environment” was hopelessly vague and incapable of being defined or ascertained. This observation also applies to the notion of “quality services”. These notions are entirely subjective. I am not satisfied it is arguable that the implied term alleged by the Plaintiff is capable of clear expression and reasonable.
(3)  Furthermore, I am not satisfied it is arguable that the alleged implied term is necessary to give business efficacy. It is not seriously in dispute that the Four Seasons Hotel is reputable. However, I cannot see how it can be said that without the implied term alleged by the Plaintiff, the Long Staying Agreements would be ineffective and/or inoperative.

Conclusion and Order

26. For the above reasons, it is plain and obvious that the Plaintiff’s claims in this action are without foundation, wholly unarguable and liable to be dismissed. It appears to me that those who are in control of the Plaintiff are simply seeking to make a mountain out of a molehill when the Plaintiff has not suffered any loss or damage and the Plaintiff’s interest has not been affected at all.

27. I conclude that:-

(1)  The Plaintiff has failed to disclose any reasonable cause of action;
(2)  The Plaintiff’s claims in this action are frivolous and vexatious; and
(3)  The Plaintiff’s claims in this action constitute an abuse of the Court’s process.

28. I accordingly dismiss the Plaintiff’s appeal against Master Vincent Kee’s order dated 15 April 2024.

29. Since the proposed amendments to the statement of claim are incapable of salvaging the Plaintiff’s case at all, I also dismiss the Plaintiff’s inter partes summons dated 9 August 2024.

30. Towards the end of the hearing, Madame Yung proposed that the Plaintiff be given another opportunity to put forward another draft amended statement of claim. For the following reasons, I am of the view that this is not the appropriate course to take, and I reject Madame Yung’s proposal:

(1) Madame Yung is unable to explain what the proposed amendments are about. In light of the analysis set out hereinabove, I fail to see how the Plaintiff’s claims can be salvaged by further amendments.
(2) By taking out the inter partes summons dated 9^th August 2024, the Plaintiff had already attempted to salvage its claims in the present action. Such attempt was futile. Bearing in mind that the present action was commenced almost one year ago on 5 September 2023, I am of the view that it would be undesirable to leave the present action overhanging the head of the Defendant any longer. This would be unfair to the Defendant.

Costs

31. Madame Yung also contends that Master Kee should not have ordered indemnity costs against the Plaintiff and conducted gross sum assessment when the Plaintiff did not attend the hearing on 15 April 2024[15].

32. It is trite that a “costs-only” appeal against master’s decision is not a hearing de novo, and the judge will not intervene the master’s exercise of discretion on costs unless it can be shown that the costs order made by the master was demonstrably unreasonable or that he erred in law: see Yancrown Limited v Chan Wai Piu[2022] HKCFI 1555 at para 20 (per B Chu J); Paul Y ITC Construction Limited v Kin Shin Company Limited, (HCA 2220/1998, 2 December 1998) at para 20 (per Sakhrani J); and Yip Kin Wah v Yip Fung To (HCA 2067/2011, 29 August 2012) at para 20 (per Queeny Au-Yeung J).

33. In my view, Master Kee’s exercise of discretion was appropriate, and I cannot discern any error on his part. Since Master Kee took the view that the Plaintiff’s case was unarguable at all, he was entitled to take the view that the Plaintiff was liable for indemnity costs. He was also entitled to exercise his discretion to conduct gross-sum assessment, such that legal costs and judicial resources could be saved.

34. In the premises, I will not disturb the costs order made by Master Kee.

35. As regards the costs in respect of the Plaintiff’s appeal and the amendment application, there is no reason why costs shall not follow the event.

36. Having concluded that the Plaintiff’s case is unarguably bad and utterly unmeritorious and that the court’s process has been abused, I am of the view that Plaintiff shall pay the Defendant’s costs on an indemnity basis.

37. With a view to saving time, costs and judicial resources, I will conduct gross assessment in lieu of taxation. Since the Plaintiff is not legally represented[16], I allow the Plaintiff to have 14 days to respond to the statement of costs lodged by the Defendant’s legal representatives.

38. In the premises, I order that:-

(1) the Plaintiff do pay the Defendant’s costs in respect of the appeal against Master Kee’s order 15 April 2024 and the inter partes summons dated 9 August 2024 on an indemnity basis to be summarily assessed; and
(2) the Plaintiff do lodge and serve a statement of objection in response of the Defendant’s statement of costs within 14 days.

Other Matters

39. Lastly, I thank Mr Clark for his most helpful assistance.

	(Alan Kwong)
	District Judge

The Plaintiff appeared in person (written submissions dated 9 August 2024 were lodged by Mr Chris Fong, instructed by Cocking & Co LLP)

Mr Douglas Clark, of Tanner De Witt, for the Defendant

[1] At the hearing, Madame Yu confirms that she is a director of the Plaintiff, and the notice to act in person bears the company chop of the Plaintiff.

[2] See the annual return of the Plaintiff dated 15 June 2022

[3] See paragraph 2(4) of the draft amended statement of claim

[4] See paragraphs 5 to 14 of the draft amended statement of claim

[5] See paragraph 15 of the draft amended statement of claim

[6] See paragraphs 16-17 of the draft amended statement of claim. It is said that the billing should have been taken place on 30 November 2022, rather than 27 November 2022.

[7] See paragraphs 18 to 26 of the draft amended statement of claim

[8] See paragraphs 27 to 31 of the draft amended statement of claim

[9] See paragraphs 2 and 4 of the draft amended statement of claim

[10] See paragraph 32 of the draft amended statement of claim

[11] See prayer 1 of the draft amended statement of claim

[12] See paragraph 16 of the amended statement of claim

[13] This phrase was used in the written submissions lodged by the Plaintiff’s former Counsel.

[14] This authority is cited and relied on by the Plaintiff.

[15] In this connection, it is noteworthy that the Plaintiff took out a summons on 16 April 2024 seeking to set aside Master Vincent Kee’s order dated 15 April 2024. The Plaintiff’s application was dismissed by Master Ross Li on 20 May 2024 with no order as to costs.

[16] At the hearing, Madame Yu indicated that the Plaintiff would engage legal representatives after the appeal hearing. However, bearing in mind that the Plaintiff is not legally representative at the hearing and that the Defendant’s representatives have no objection, I directed that the Plaintiff be given 14 days to respond to the Defendant’s statement of costs.

SUCCESS LANE DEVELOPMENT LTD v. IFC DEVELOPMENT (SUITE) LTD AS AGENT FOR IFC DEVELOPMENT LTD

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