Top court rules for Surf Hong in breach of contract lawsuit

The Court of Final Appeal has ruled in favor of a lifeguard service provider in an alleged breach of contract case caused by an employee strike action, but the judgement is still pending.

On August 17, 2018, service provider Surf Hong was subject to a strike by employees and did not have enough capacity to provide contracted services, causing the closure of several public swimming pools in Taipa and Coloane.

Nearly four months later, the then Secretary for Social Affairs and Culture ordered a fine of MOP7.6 million levied on the company, on the grounds that its owner failed to provide services agreed as in a contract.

In an appeal to the middle court, the company owner’s arguments were partially upheld by the court. But both parties were unhappy with the ruling and filed separate appeals to the top court.

The top court noted that the then Secretary did not issue two warnings prior to ordering the fine, as was stipulated in the service contract. Furthermore, the court noted that the second warning, although issued, was made after the effective period used in calculating the fine.

On these grounds, the court ruled against the arguments of the then Secretary.

The court considered it unreasonable that the service provider would be fined twice under two different clauses in the contract for the same matter. It also ruled that the cause of the pool closures was irrelevant in considering the issuance of the fine. AL