Question:

What is the business law that apply to following cases?Question One (10 Marks)

(word limits: up to 1,200 words)

Read Lui Lin Kam & others v Nice Creation Development Ltd [2006] 3 HKLRD 655 which can be found in the westlaw HK (now in westlaw Asia) website of our library database. There is a summary of what the Court of Appeal said in the judgment. As for how to find court cases from the website, see lecture notes topic 1.

Section 31B of the Employment Ordinance (cap.57 of the Laws of Hong Kong) provides that "where an employee who has been employed under a continuous contract for a period of not less than 24 months ending with the relevant date (a) is dismissed by his employer by reason of redundancy; or (b) is laid off . . . the employer shall, . . . be liable to pay to the employee a severance payment"

- ETO -

For your information a person employed under a continuous contract refers to an employee who has worked for at least 18 hours per week and he / she has worked for the employer for 4 weeks (schedule 1 of the Employment Ordinance). Redundancy refers to the situation where, for example, an employee is dismissed due to the purpose for employing him / her no longer applies (section 31B(2) of the Employment Ordinance) while lay-off refers to an employee having been dismissed due to he / she not having enough working days (section 31E of the Employment Ordinance). For the calculation of severance payment, see section 31G of the Employment Ordinance.

In this court case the Court of Appeal held that an employee who was appointed under successive contracts for less than 24 months with a break period in between the contracts could be denied severance payment depending on the circumstances.

Discuss, in your own words, how the Court of Appeal arrived at her decision.

Question Two:

Part A (word limits: up to 1,500)

Peter, John and James have signed a one-year membership agreement with company A, a gymnasium, on 1st January 2015. The agreement provided that company A had to provide the facilities in its place for their use until 31st December 2015 when the agreement expired and they had to pay it a fixed monthly membership fee. On 1st December 2015, company A faxed a letter to Peter, John and James respectively saying, "you will be our member for one more year starting from 1st January 2016 until 31st December 2016 on the same terms (including the monthly membership fee) stated in your current agreement if you do not notify us, before the end of the current agreement, that you do not want to be our member for one more year."

Peter sent a letter to company A on 31st December 2015 saying that he would like to renew the membership agreement on the same terms. Company A received the letter on 3rd January 2016. It informed Peter that it has just decided to increase the monthly service fee (amount stated) and asked him whether he agreed to this. When Peter refused, company A declined to make a new membership agreement with him. Peter insisted that company A had to provide him the relevant services for one more year based on the old monthly membership fee.

John never replied to company A. Company B notified him on 1st January 2016 that he was its member for one more year until 31st December 2016 and he had to pay it the old monthly membership fee. John refused and company A replied that he had breached the contract between them.

James made a phone call to Susan, the proprietor of company A, on 2nd January whether he could be its member for one more year. Susan replied that he had to pay a new monthly service fee (amount stated) in this case but he could be given a calendar for free. James asked whether he could pay the old monthly membership fee and Susan said no to him. James later made a new one-year membership agreement (which did not mention the calendar) with company A based on the new monthly membership fee. He was never given the calendar.

Discuss:-

(a) whether Peter can demand company A to provide him the services for one more year based on the old monthly membership fee;
(b) whether John has breached any contract with company A; and;
(c) whether James can demand for the calendar from company A.

Part B

On 1st July, company X (a real estate agency) held a free seminar for the public on "the property market in Hong Kong". A number of people attended the seminar in the premises of company X. There were many posters stating the purchase prices and the rental for various properties. After the seminar, Philip, an attendee, remained in the premises of company X and asked Amy, its proprietor, whether it was worthwhile to buy a particular flat (details told). Amy gave Edward a detailed advice and then said "we will appreciate it if you pay us a fee of $100 for the advice". Philip agreed but he then refused to pay the fee.

On 1st August, Anna appointed Stephen, a car dealer, to sell her car in consideration of a commission fee equal to 1% of the sale price. Before Stephen held the sale, Anna told him that she would pay him another 1% of the sale price if he could sell the car at a good price. Stephen later sold the car for Anna at a very good price but she only paid him 1% of the sale price.

Discuss: -

(a) whether Philip has to pay the $100 to company X; and;

(b) whether Stephen is entitled to another 1% of the sale price from Anna.