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  • How to Claim for Loss Effectively if a Golf Course is Shut Down?

    How to Claim for Loss Effectively if a Golf Course is Shut Down?

    Mr. Wong paid a membership fee amount to 250,000 for a life membership of a golf course in 2011. Unexpectedly, 5 years later, the
    course was ordered to suspend the business due to the illegal land occupation. So Mr. Wong required the course to refund the
    membership fee, and the appreciation part. Finally, the court only decided the course to refund partial of the membership fee.
    Recent years, due to the regulations on clean up and rectify golf courses issued by the National Development and Reform
    Commission and other authorities, many golf courses were shut down, which are followed up with the claim from the members.
    How to claim for a reasonable but maximum compensation?

    Normally, a member would claim for the liability for breach of contract. Unfortunately, such contracts designed by the course are
    ‘Standard Clauses’, which means the content is usually simple, and exempts the liabilities of the course as many as possible. For the
    majority cases, just like the case above, the court would only require the course to refund partial of the membership fee.
    In fact, it is better for the members to claim based on the specific reason for the shut down, the clauses in the contract and the
    evidence at hand. Specifically, after analyzing the previous judgments, members could take different measures for different
    situations as follows:

    First, if the course is shut down due to the government’s construction planning, the course might defense by using the ‘Force
    Majeure’ prescribed in Article 117 of the ‘Contract Law’, and refuse to undertake any liabilitiles. But in practice, for this situation, the
    government would compensate to the course, and such compensation shall include the compensation to the members. So it is
    highly recommended for the members to claim reasonably to the course and the government during the negotiation between the
    aforesaid two parties. The reasonable claims might include, the course refund of membership fee and appropriate compensation, or
    the course undertakes the expenses for transferring the membership to other course, and etc.

    Second, if the course is shut down due to illegal land occupation, pollution and other illegal problems, normally, the course might
    defense by applying the ‘Force Majeure’. However, such problems are caused by the course’s fault, so the course could not obtain
    compensation from the government, which means normally the course would not compensate to the members with its own money.
    Then it is highly possible for the members to claim by legislation. And the members could claim for the liability for breach of contract
    or compensation for the damages. While deciding the amount of the claim, the following factors could be taken into consideration:
    (a) the term of the membership. If a member has a life membership, usually the court might require the course to refund the
    membership fully, or partially. For example, (2016) JIN 02 Min Zhong Judgment No. 1965 points out that the precondition for the
    member to pay the membership fee is the life membership of Tianjin XX Golf Club, so the course shall refund the membership fee in
    whole. (2016) Lu Min Zhong Judgment No.744 points out that in consideration of the operation duration of the course stated in the
    business license is 50 years, the amount refund shall be calculated based on the deduction of the years that the member has
    exercised the membership rights. (2013) Wei Shang Zhong Zi Judgment No. 16 points out that the course shall return the
    membership fee, compensate to the member for the additional expenses to play golf in other courses, but reject the member’s
    other claims. In view of this, if a member has to pay for the golf sport in other courses due to his original course fails to provide
    service, it is possible for the member to obtain the compensation for the price difference, but for other loss, it depends. (c) the
    appreciation of the membership. Although no judgment has been found on supporting the appreciation of the membership, if the
    appreciation amount is really huge, it will affect the decision of the judge on the amount of compensation.