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Wong Sui Kwan v Cheong Pui Fan

Judgment Cited authorities 15 Cited in Precedent Map Related
Vincent
Judgment Date27 October 2006
CourtDistrict Court (Hong Kong)
Judgement NumberDCCJ5879/2004
Subject MatterCivil Action
DCCJ004987/2004 WONG SUI KWAN v. CHEONG PUI FAN

DCCJ 4987/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.4987 OF 2004

________________

BETWEEN

　 WONG SUI-KWAN otherwise known as
S.K. WONG		 Plaintiff
　 　and 　
　 CHEONG PUI FAN otherwise known as
ANGELA CHEONG		 Defendant
　 　PUI FAN otherwise known as
ANGELA CHEONG 		　

AND

DCCJ 5879/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.5879 OF 2004

________________

BETWEEN

　 WONG SUI-KWAN otherwise known as
S.K. WONG		 Plaintiff
　 and 　
　 CHEONG PUI FAN otherwise known as
ANGELA CHEONG		 Defendant
　 PUI FAN otherwise known as
ANGELA CHEONG		 　

[Ordered to be tried together pursuant to the order of H.H. Judge Wong dated 30th May 2005]

_________________

Coram: Deputy District Judge K.W. Wong in Court

Dates of Trial: 13th to 17th, 22nd to 24th February, 2nd, 3rd, 8th, 23rd to 25th May, 10th & 24th June 2006

Date of Handing Down Judgment: 27th October 2006

______________________

JUDGMENT

______________________

1. The present two actions concern disputes between two practising solicitors in Hong Kong. Both actions are commenced by the Plaintiff Mr. Wong Sui-kwan, who was the founder and later a consultant of the solicitors firm, S.K. Wong & Lee〔黃萃群、李鉅林律師行〕 (the “Firm”) against the Defendant Ms. Angela Cheong, who has been an assistant solicitor, later a partner, and subsequently the sole proprietress of the Firm at the material times.

Brief Background

2. The Plaintiff initially set up his law firm on 3rd October 1983 as a sole proprietor. Mr. Lee Kui Lam (李鉅林) (“KLL”) joined him as a partner on 1st January 1984 and the name of the firm was later renamed to that of the Firm. The Plaintiff later became a consultant to the Firm on 1st November 1992 and remained so until his departure on 30th August 2004. Despite his retirement and changes in the constituting partners of the partnership, the Firm’s name remained unchanged. The Plaintiff left the Firm and set up his own practice the next day (i.e.31st August 2004) under his own name, i.e. “S.K. Wong & Co.” (黃萃群律師行) and in group practice with Messrs. Hui & Lam

3. The Defendant joined the Firm as an Assistant Solicitor in September 1997 and became one of the four partners of the Firm on 1st January 2001. Thereafter, the partners left one by one. It is not in dispute that the Firm was hard-hit by the poor economy of Hong Kong during that time. Income of the Firm dropped substantially. Even the Senior Partner KLL chose to leave the Firm on 31st August 2003 and joined another firm as a consultant. On 1st September 2003, the Defendant became the sole proprietress with the Plaintiff as the consultant to the Firm.

4. After the Plaintiff had become the consultant to the Firm, the Plaintiff was entitled to be paid a commission by the Firm at the end of each month calculated at certain agreed rates on profit costs received in that month from all clients introduced by him. Such commission was applicable regardless of when the profit costs accrued. When the Defendant was one of the partners of the Firm, the applicable rates varied depending on what was left to be distributed to the partners and the consultant for that particular month. Basically, the more the partners could draw for that month the higher would be the Plaintiff’s rate of commission. The Plaintiff’s case is that the basic rate is 30% and it rises up stepwise to 50% according to the formula, depending on the net profit of the Firm. The Plaintiff would still be paid a concessionary rate of 25% even if the Firm was in red. It is the Plaintiff’s case that there was an express oral agreement between the Plaintiff and the Defendant in August 2003 that the old formula would continue to apply in consideration of, inter alia, his agreeing to continue as the consultant to the Firm after the Defendant becoming the sole proprietress of the Firm. This oral agreement was re-confirmed again on 1st September 2003. The Defendant had only paid him commission from September 2003 up to June 2004, leaving that for July and August 2004 outstanding.

5. Furthermore, the Plaintiff alleged that one of the several conditions of the said oral agreement was that the Defendant agreed to cease using his name as part of the Firm’s name when he left the Firm.

6. By DCCJ 4987/04 (“Commission Action”), the Plaintiff claims that the Defendant has failed and/or refused to pay him commission according to the agreed rates pursuant to the abovementioned oral agreement. He therefore seeks the Court’s order for the outstanding commission payments together with an account for ascertaining whether he has been paid the correct amount.

7. By DCCJ 5879/04 (“Name Action”), the Plaintiff claims that in breach of the said oral agreement, the Defendant continues to use his name as part of her firm’s name after 30th August 2004. The Plaintiff claims for damages, an order that the Defendant do remove his name from the Firm’s name and for an injunction restraining the Defendant from continuing using his name “S.K. Wong” or “黃萃群” as part of the Firm’s name.

8. The two claims are contested vigorously by the Defendant. She denies the existence of the oral agreement alleged by the Plaintiff. It is the Defendant’s case that they had agreed at a flat rate of 25% and that agreement was reached in or about October 2003. Basically what the Defendant alleges, as revealed in paragraph 6A of the Amended Defence, is that upon the resignation of KLL as partner on 31st August 2003, the Plaintiff did not leave the Firm. She also did not ask him to do so. The Plaintiff simply “stayed on” as a consultant of the Firm. The agreement on the rate of commission payable to the Plaintiff was only reached more than one month after his staying on. It was only in March and April 2004 when the billing of the Plaintiff was good that she agreed to pay him at 30% upon the Plaintiff’s request. It is the Defendant’s case the Plaintiff was retained on a month to month basis. She also denies existence of any agreement that she would cease using the Plaintiff’s name in the name of the Firm when he left. The Defendant admits that commission in respect of July and August 2004 is outstanding. However, by reasons of her alleged counterclaims, a defence of set-off is pleaded.

9. The Defendant lodges counterclaims in the Commission Action against the Plaintiff on substantial grounds. In essence, the Defendant complains that during June, July and August 2004, the Plaintiff, in direct conflict of interest with the Firm, actively engaged in the preparation for the setting up of the Plaintiff’s new firm in direct competition with hers, with a Mr. S. F. Wong (“SFW”), who at the material times was an assistant solicitor of the Firm. She also alleges that the Plaintiff has incited, solicited and conspired with SFW and one Mr. Yung Ho Kwong (“YHK”), an employee of the Firm, to breach their contracts of employment with the Firm by assisting the Plaintiff in the planning, preparation and setting up his new firm. There is also allegation that the Plaintiff actively solicited the Firm’s clients to transfer their business to his new firm. The Defendant also alleged that the Plaintiff had also during the said three months period, improperly and willfully discounted client’s bills. She claims for damages and asks for an injunction restraining the Plaintiff from attempting to pass off his new firm as a continuation of, or as a successor to her firm, or as associated or connected with hers, by the use of the name “S.K. Wong & Co.”. The new firm opened by the Plaintiff was exactly on the same floor of the Hang Seng Building as the Firm. It is not disputed that the Defendant moved out of the Hang Seng Building to 7th Floor of Club Lusitano on Ice House Street on 29th April 2006, after the trial has commenced. The name of the Firm was changed in the middle of this trial by deleting “& Notaries” from the description as there is no longer any notary working in the Firm after the Plaintiff’s departure. The Defendant also accused the Plaintiff has unreasonably and substantially discounting bills, acting in breach of his implied contractual obligations to the Firm.

10. The grounds of counterclaim are framed under the following three heads:

i) breach of implied terms of contract of retainer as consultant of the Firm;

ii) breach of fiduciary duties;

iii) various tortious acts including:

a) unlawfully inducing, procuring, encouraging or facilitating breach of contract;

b) unlawful interference with trade or business; and

c) unlawful passing-off, unfair competition and unfair practices.

11. It is pleaded in paragraph 22 of the Amended Defence the following terms are implied into the contract between the Plaintiff and the Defendant:

i) a term that the Plaintiff would act fairly, openly and in a trustworthy manner;

ii) a term that he would act at all times in the best interests of the Firm;

iii) a term that he would not put himself in a position of conflict of interest with the Firm;

iv) a term that he would respect the Firm’s property rights in its tangible and intangible property and not to make any use thereof otherwise than exclusively in the Firm’s own interests and for the Firm’s business;

v) a term that he would not use the Firm’s confidential information of whatever nature or kind without the express permission of the Firm;

vi) a term that he would not conspire, solicit or induce any of the Firm’s employees to act in a manner detrimental to the Firm’s interests;

vii) a term that he would not solicit the Firm’s clients;

viii) a term that he would not unfairly compete with the Firm.

It is fair to say that many of the above terms said to...

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