LAU SIU KEUNG VINCENT v. JOHN MING SHUN VINCENT AND OTHERS

DCCJ 1288/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1288 OF 2012

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JUDGMENT
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1.  This action involves a number of disputes between several business partners in a joint venture arrangement. I shall, first of all, outline the background facts generally in a chronological manner below before I deal with each and every issue raised by the parties.

2.  The Plaintiff met the 1^st Defendant in or about October 2008 when he attended a professional dog training course organized by the 6^th Defendant, Ming Ki International Development Limited (“Ming Ki”).  The 1^st Defendant was a professional dog trainer and the tutor in the said dog training course.  Ming Ki was a limited company jointly established by the 1^st Defendant, the 2^nd Defendant who was the 1^st Defendant’s girlfriend, and another person, Mr Mok Chun Ki, who was not a party of this action. 

3.  Ming Ki was established initially for running the business of the pet shop at Shop 11, Ground Floor, Polly Court, 49 to 57 Bulkeley Street, Hung Hom, Hong Kong under the trade name of “Pet Field Company” (in Chinese “寵物新天地”). After the Plaintiff attended the professional dog training course in or about October 2008, he was very impressed by the 1^st Defendant of being a professional dog trainer and a pet shop businessman.  The Plaintiff then became a pupil or apprentice of the 1^st Defendant. 

4.  Later, the Plaintiff also attended another course for pet grooming which was again mainly taught by the 1^st Defendant. Thereafter, the Plaintiff, the 1^st and 2^nd Defendants built up a rather good relationship between them.  The Plaintiff would call the 1^st Defendant as the “Master” (in Chinese “師傅”) and the 2^nd Defendant the “Lady of the Master” (in Chinese “師母”).  The Plaintiff then became interested to invest in the business of the pet shop at Hung Hom.

5.  In or about December 2008, the Plaintiff and the 1^st Defendant had a discussion regarding the business of the pet shop (‘the Pet Shop Business”).  The Plaintiff explained in his evidence that he had no previous experience in operating a pet shop business.  He thought that it would be easier and less risky for him to invest into the on-going business of the 1^st Defendant instead of setting up a new shop of his own.

6.  After the Plaintiff had some observations on the business of the pet shop at Hung Hom, in or about January 2009, the Plaintiff entered into an agreement with Ming Ki for acquiring 45% interest of the Pet Shop Business at a price of HK$270,000.00.  For this transaction, parties signed a written Chinese agreement. The agreement was dated 31 January 2009 (but probably signed on 13 January 2009) with a title of “業務和資產購買協議” which meant in English “The Business and Assets Acquisition Agreement” (“the Acquisition Agreement”).  There is a great dispute as to the true construction of the contents of this agreement.  And for this reason, I do not intend to go into details of it now and shall deal with the arguments later in this judgment. In short, the Plaintiff alleged that he was induced by misrepresentation to sign the Acquisition Agreement, or alternatively the agreement was entered into by mistake and therefore it was null and void against him. Further or alternatively, Plaintiff argued that there was a total failure of consideration of the Acquisition Agreement and therefore it was not enforceable against him. The Defendants denied them entirely.

7.  Notwithstanding the issues raised by the parties in relation to various different constructions of the Acquisition Agreement, the parties had no dispute that the Plaintiff, after acquiring the 45% interest of the Pet Shop Business, had also worked as a staff at the pet shop at Hung Hom under the trade name of Pet Field Company. The parties also had no dispute that the Plaintiff duly paid the consideration of HK$270,000.00 by two installments in January 2009.

8.  According to the Acquisition Agreement, the Plaintiff agreed to work in the sales and promotion department and the logistics department of the pet shop at Hung Hom.  It was agreed that he would receive a monthly salary of HK$10,000. 

9.  Shortly after the Acquisition Agreement was signed, on or about 5 February 2009, the Plaintiff, 1^st and 2^nd Defendants and Mr Mok went to the Nan Yang Commercial Bank at Hung Hom to open 2 joint accounts, namely one saving and one current account for the purposes of operating the Pet Shop Business. 

10.  In or about July 2009, the 4^th Defendant, Miss Tam, who was also working at the pet shop at Hung Hom as a staff started to invest into the Pet Shop Business. 

11.  In or about August 2009, the Plaintiff received his share of the profits from the Pet Shop Business, in cash, in the range of several thousands to ten thousand dollars. 

12.  Towards the end of 2009, the Pet Shop Business opened another shop at 2/F, 12 Matheson Street, Causeway Bay, Hong Kong under a similar trade name of “Pet Field Co.” which I believe was the same as “Pet Field Company” with the same name in Chinese “寵物新天地”. This shop was later relocated to M/F, 4 Canal Road East, Causeway Bay, Hong Kong in October 2011.

13.  In October 2010, the 3^rd Defendant, Miss Kan (who worked at both the pet shops in Hung Hom and Causeway Bay as a staff) and the 5^th Defendant Mr. Eric Fung who was the boyfriend of the 3^rd Defendant, decided to invest into the Pet Shop Business as well. 

14.  In or about February 2010, namely after the Plaintiff joined the Pet Shop Business for a year, the Plaintiff received his share of the profits again.

15.  Then after another year, in or about February 2011, the relationship between the Plaintiff and the 1^st and 2^nd Defendants had deteriorated. The parties, however, disagreed with the reasons behind the deterioration. I shall deal with the issues raised by the parties later in this judgment. In short, the Plaintiff said that it was due to certain disagreements among them since the opening of the pet shop in Causeway Bay and the 1^st Defendant had started, without any valid reason, to edge him out of the Pet Shop Business since February 2011. But on the other hand, the Defendants explained that the deterioration of relationship was due to the fact that the Plaintiff was suspected of committing certain dishonest acts against the interest of the Pet Shop Business including theft, embezzlement and fraud.

16.  Since the beginning of October 2011, the 1^st Defendant would require the Plaintiff to stay at the shop in Causeway Bay to check and verify the accounting records of the Pet Shop Business together with the 2^nd and 3^rd Defendants almost every day after close of business.

17.  Subsequently, two meetings were held on 28 October 2011 and 31 October 2011 respectively among the Plaintiff, 1^st, 2^nd and 3^rd Defendants at the shop in Causeway Bay for checking the accounting records of the Pet Shop Business. 

18.  During these two meetings, the 1^st Defendant alleged the Plaintiff that he had stolen money from the Pet Shop Business and then in the 31 October 2011 meeting, the Plaintiff admitted his fault by signing an acknowledgement to a termination letter served on him (“the Termination Letter”). The Plaintiff expressly admitted in the Termination Letter that his integrity was questionable and had caused damage to the Pet Shop Business. And effective from that day, the Plaintiff ceased to be “a director” and no further salary would be paid to him. The conversations of these two meetings were recorded and transcripts were produced at the trial.

19.  This is the Plaintiff’s case that he was coerced under duress, illegitimate coercion, unlawful intimidation and/or undue influence of the 1^st, 2^nd and 3^rd Defendants to sign, against his own free will, the acknowledgement to the Termination Letter admitting that he had committed various misconducts including theft and fraud against the interest of the Pet Shop Business. The Defendants denied all the allegations and explained that after the Plaintiff admitted his misconducts voluntarily, they came to a settlement amicably. The Defendants added that it was the Plaintiff who wanted to go back on his promise.

20.  On 17 January 2012, another meeting was set up at the shop in Hung Hom. The Plaintiff and the 1^st to 5^th Defendants were there.  The Plaintiff alleged that, during this meeting, the 1^st to 5^th Defendants had threatened him that they would report the misconducts, which amounted to criminal offences, committed by the Plaintiff to the police.  They also threatened to exhaust the Plaintiff financial resources and to stress him out by taking out vexatious civil litigation and malicious criminal prosecution in respect of the misconducts.  According to the Plaintiff’s evidence, he was coerced under duress, illegitimate coercion, unlawful intimidation and/or undue influence by the 1^st to 5^th Defendants to sign an acknowledgment of debt (“the Acknowledgement of Debt”) which included the admissions of the Plaintiff’s misconducts and his promise for the payment of compensation for a sum of HK$850,268.00 to all the Defendants for the loss suffered by the Pet Shop Business.  In fact, there were two versions of the Acknowledgement of Debt where the first version was somewhat incomplete leaving the agreement for payment of compensation to be dealt with later and the second one with the actual payment terms agreed. Insofar as this judgment is concerned, the 2^nd version of the Acknowledge of Debt is considered as the evidence of the settlement agreement. All the Defendants denied the allegations and they explained that it was just a follow-up meeting to finalise the settlement arrangement with the Plaintiff regarding the loss and damage suffered by the Pet Shop Business.

21.  The entire meeting on 17 January 2012 was actually captured by the Closed Circuit Television system (“CCTV”) of the shop in Hung Hom and the entire footage was shown to me at the trial. But since the CCTV system did not have any audio recording, the footage was silent.

22.  Apart from the above, the Plaintiff also alleged that, in support of his case, during the meeting, he was taken by the 3^rd, 4^th and 5^th Defendants, against his own free will, to a nearby automatic teller machine of a bank where he was forced to withdraw HK$30,000.00 and to pay the said sum, together with a sum of HK$268 (cash) from his wallet, to the Defendants for part payment of the compensation.

23.  To summarize the parties’ positions in a few words, the Plaintiff claimed that he was misled to enter into a business joint venture by misrepresentation or mistake and therefore asked for return of his invested sum but the Defendants denied them. In addition to that, due to some disputes between the Plaintiff and the Defendants regarding certain business loss suffered by the joint venture, the Defendants said that a settlement agreement was reached between the relevant parties and the Plaintiff agreed to pay compensation to other business partners for loss suffered. The Plaintiff, however, disagreed and claimed that he was in fact forced or coerced to agree the settlement terms against his own free will and therefore was not binding on him.

24.  For remedies, the Plaintiff claimed against Ming Ki for damages in the sum of HK$270,000.0000 for misrepresentation / mistake / lack of consideration. In fact this was the amount which he paid for in acquiring the interest in the Pet Shop Business pursuant to the Acquisition Agreement.

25.  Further, the Plaintiff sought declaratory reliefs from this court that the three documents signed by him at various times, namely, (1) the Acquisition Agreement (signed by the Plaintiff on 13 January 2009) for acquisition of 45% interest of the Pet Shop Business, (2) the acknowledgement to the Termination Letter (signed by the Plaintiff on 31 December 2011) for admitting his misconducts against the interest of the Pet Shop Business and (3) the Acknowledgment of Debt (signed by the Plaintiff on 17 January 2012), namely the settlement agreement for compensation to the Defendants, were all null and void and not binding on him.

26.  All the Defendants denied the allegations and also filed a counterclaim against the Plaintiff for a sum of HK$550,000.00. This sum was the outstanding balance of compensation which the Plaintiff admitted and promised to pay according to the Acknowledgment of Debt.  Alternatively, the Defendants asked for damages caused by the Plaintiff’s misconducts to be assessed.

27.  The claim and the counterclaim are in fact related and are just two sides of a coin. If I find in favour of the Plaintiff’s claim, I should dismiss the primary case of the counterclaim and go on to see the alternatively case of the Defendants, namely to see whether or not the Plaintiff did commit the misconducts and if so, assess the damages, or if not, dismiss the alternative case of counterclaim as well. If, however, I find against the Plaintiff’s claim and dismiss it, I should therefore find for the Defendants’ counterclaim.

28.  First of all, let me deal with the allegation of misrepresentation in relation to the Acquisition Agreement. In or about January 2009, the Plaintiff was invited to acquire 45% interest of the Pet Shop Business at a price of HK$270,000.00.  According to the Plaintiff’s case, a false representation was made to him that he would acquire 45% of the “shares” of a subsidiary company of Ming Ki who owned the Pet Shop Business.

29.  The Plaintiff told the court that he was not given any explanation of the company structure of Ming Ki.  No company’s records of whatsoever of Ming Ki were shown to him.  The Plaintiff said that he relied upon the false representation made to him by the 1^st Defendant and entered into the Acquisition Agreement for purchase of the business of the pet shop in Hung Hom. The Plaintiff further said that he only discovered the truth that there was no such subsidiary company and no “shares” were ever transferred to him when he approached his solicitors seeking legal advice in relation to the disputes between him and the Defendants after the meeting on 17 January 2012 regarding the settlement arrangement.

30.  The Acquisition Agreement was drafted in Chinese and it consisted of 8 pages (including the cover). Apparently, the agreement was not drafted by lawyers but it was written in an easy to follow and organized manner which should be understood by layman without any difficulty.

31.  The Plaintiff further argued that the false representation, namely that he would acquire 45% of the shares of a subsidiary company of Ming Ki, was later incorporated into the Acquisition Agreement itself.  The Plaintiff argued that the Chinese words “股權” (which literally means “shareholdings”) were used for describing the subject matter of the transaction and the Chinese terms of “股東” (which literally means “shareholders”) were used to describe the parties of the agreement. The Plaintiff therefore submitted that the Acquisition Agreement was clear evidence that the 1^st Defendant must have made the false representation that “shares” would be transferred to the Plaintiff as it is not in dispute that no such shares were ever transferred and the Plaintiff did not become a shareholder at all.

32.  The Defendants denied that there was any misrepresentation at all.  Further, although the Defendants admitted that the language used in the Acquisition Agreement might not be accurate, they argued that reading the agreement as a whole, the subject matter of the transaction was obviously the business interest and assets in the pet shop and not the shares of a subsidiary company of Ming Ki.

33.  This is a factual issue to be decided by this court.  I have carefully considered all the evidence, including the oral evidence of the Plaintiff and the Defendants.  I find it difficult to accept that, as a matter of fact, the 1^st Defendant or any of the Defendants would have made such a misrepresentation as alleged by the Plaintiff to induce the Plaintiff to enter into the Acquisition Agreement. It is more likely than not that there was no such misrepresentation at all. My reasons for coming to such conclusion are that:-

(1) The Plaintiff is an educated and intelligent person. It was the Plaintiff’s evidence that he has been working in a bank for 15 years in relation to customer services. Based on his education and working experience, I do not believe that the Plaintiff was not aware of the exact nature of transaction and what he was actually acquiring in the transaction. If there was any misrepresentation, as alleged, the Plaintiff would definitely know immediately after he started working at the shop in Hung Hom in early 2009. According to the Plaintiff’s evidence, he only discovered the true nature of the acquisition after he left the Pet Shop Business in October 2011. The Plaintiff said that he was misled by the false representation that he should have been a “shareholder” instead of just a “partner” of the Pet Shop Business. But during the years when he was working in the pet shops closely together with some other defendants, he knew that he never signed any documents for transfer of shares of any company. If such false representation was really made to him, I do not believe that anyone with common sense would have kept silence for such a long period of time without making any compliant at all. Given the Plaintiff’s background, I found it unacceptable, on balance of probabilities, that he would not have found out the truth of the matter within weeks, if not months, if such false representation was really made to him. I find it totally unbelievable that he needed almost 3 years to discover the truth.

(2) Given the education background and working experience of the Plaintiff, particularly his experience in banking business, it would not be difficult for him to ask other defendants to provide him with the company records of Ming Ki or some simple documentations which could show him the subject matter of the transaction, namely 45％ of the shares of a subsidiary company of the Ming Ki.  It was simply not reasonable to expect someone, like the Plaintiff, to accept such a statement on face value without going through some simple company’s documentations. I accept, as a matter of law, the Plaintiff may not have an obligation to check the documentations, but as a matter of the evidence, I find it difficult to believe that the Plaintiff did not carry out some proper checking on the company’s documents if he was really asked to acquire some shares in the subsidiary company of Ming Ki.  The only reasonable explanation therefore is that he knew he was only acquiring some interests of the Pet Shop Business and not the shares of a company.

(3) The Plaintiff explained that he completely trusted the 1^st Defendant and therefore he did not check any documentation at all. I do not accept this explanation. There was clear evidence to show that the Plaintiff was a prudent person and he made decision carefully. For example, when he decided whether to start a new business by himself or to join an existing one, he carefully analysed the cost-and-benefit of the situations and decided to join an existing one because it was less risky. Another example is that when the 1^st Defendant asked him to join the business of pet shop, the Plaintiff actually spent two months in the shop observing the operation of it before he actually decided to acquire the interests in the Pet Shop Business. It is against common sense that if any misrepresentation was actually made to him, the Plaintiff would not have checked the truthfulness of it.

34.  According to the Plaintiff’s case, this misrepresentation was in fact incorporated into the agreement itself and became a term. The Plaintiff submitted that on true construction of Acquisition Agreement, it showed that the parties agreed to transfer 45% of the shares of a subsidiary company of Ming Ki to the Plaintiff and this therefore supported his case for misrepresentation.

35.  As a matter of general principle, in construing an agreement, one has to look at the object of the agreement so as to ascertain the mutual intentions of the parties. Such intentions usually are manifested by the words used in the contract. It is not in dispute that one should look at the contract as a whole in understanding the parties’ intentions. 

36.  If one looks at the Acquisition Agreement, one will find that the parties to the agreement were defined unambiguously as the Plaintiff and Ming Ki. In the preamble, the very first statement stated unambiguously that the 6^th Defendant was selling the business and the assets of a shop called “寵物新天地” (in English “Pet Field Company”) to the Plaintiff.  After the preamble, the agreement went on to describe the percentage of ownership of the business to be sold to the Plaintiff as “股權” (which literally means “shareholdings” in English) and the parties of the agreement were described as “股東” (which literally means “shareholders” in English). The Plaintiff therefore argued that the intention of the parties were very clear and they must have meant that the shares of a company, but not just a percentage of some business interests, were to be sold to the Plaintiff as the words of “shareholdings” and “shareholders” were used.

37.  The Plaintiff argued, alternatively, that by reasons of the above, the Acquisition Agreement not only supported the allegation of the misrepresentation, it also showed that there was a total failure of consideration when no such “shares” were transferred to the Plaintiff pursuant to the agreement. The Plaintiff therefore also made a restitution claim for the invested sum of HK$ 270,000.

38.  Despite the Plaintiff’s attractive argument, I am not persuaded. It is not difficult to see that the Acquisition Agreement was prepare in Chinese by parties themselves and not by professional lawyers.  It is not difficult to understand why these words, namely “shareholdings” and “shareholders” were used loosely by the parties. In my view, the parties did not use them in a technical sense.  If one looks at the entire agreement, and not just focuses on these 2 words, one should not have any difficulty to understand the subject matter of the transaction was not about the “shares” of any subsidiary company. In my judgment, on true construction of the agreement, the subject matter was obviously about the business and assets of the pet shop in Hung Hom called “Pet Field Company” and not the “shares” of a subsidiary company of the Ming Ki. In my view, the words “shareholdings” and “shareholders” were not used technically by the parties in the agreement. They simply referred the percentage of the ownership in the business and the owner of such interests in the business respectively. It was an obvious case of bad choice of words.

39.  In deciding the meaning of the words in the agreement, I am also entitled to look at the factual matrix behind the transaction. I accept the Defendants’ submissions that there is no doubt that both the Plaintiff and 1^st Defendant were talking about the acquisition of the business interests and assets of the shop in Hung Hom. On the evidence before me, it is more likely than not that there was nothing in their mind at the time of entering into the agreement that there was a “company” capable of issuing shares. According to the evidence, the major concern of the parties was to get the Plaintiff involved (and to define the involvement) in the Pet Shop Business and to set out expressly each party’s (including the Plaintiff’s) responsibilities and entitlements. The purpose of the Acquisition Agreement was to put the business arrangement between all parties concerned in writing.

40.  In understanding the words used in an agreement, I also accept the observation made in the House of Lords authority Chartbrook Ltd. and another v Persimmon Homes Ltd. [2009] 1 AC 1101, regarding the bad choice of words used in a contract. It was held that:-

“Although a court would not easily accept that linguistic mistakes had been made in formal documents, if the context and background drove a court to conclude that something had gone wrong with the language of a contract the law did not require it to attribute to the parties an intention which a reasonable person would not have understood them to have had; that where it was clear both that there was a mistake on the face of the document and what correction ought to be made in order to cure it, in that it was clear what a reasonable person having all the background knowledge which would have been available to the parties would have understood the parties by using the language in the contract to have meant, the court was entitled to correct the mistake as a matter of construction; that both those requirements were satisfied in the present case.”

41.  In my judgment, I find that no such misrepresentation was made by any of the Defendants, including the 1^st Defendant, to induce the Plaintiff to enter into the Acquisition Agreement. On true construction of the Acquisition Agreement, the Plaintiff agreed to acquire the business interest and assets of shop in Hung Hom but not the shares of a subsidiary company of Ming Ki. The evidence certainly did not support the argument that the Plaintiff was misrepresented. In other words, the claim on misrepresentation fails and should be dismissed.

42.  I now turn to the issue of mistake. Based on similar reasons which I have given above, I also find it difficult to accept that there was any mistake, be it a mutual or common mistake of the Plaintiff and the Defendants concerned.  The parties knew exactly what they were dealing with. If there were any mistake, the Plaintiff would have discovered it within a very short period of time, say within weeks. I therefore also reject the argument that there was any mistake as to the subject matter of the agreement. In conclusion, the claim for the Acquisition Agreement to be void ab initio by reason of mistake must also fail.

43.  My reasons above are also sufficient for me to dispose of the argument for total failure of consideration. As I do not accept the submissions that on the true construction of the Acquisition Agreement, the subject matter of the transaction was about the transfer of shares of a subsidiary company of Ming Ki, there was indeed good consideration between the parties, namely the transfer of the 45% business interest and assets of the shop in Hung Hom to the Plaintiff. There was uncontradicted evidence that the Plaintiff became one of the owners of the Pet Shop Business and was entitled to, and did, share profits from the Pet Shop Business as per their agreement. In my judgment, the argument on total failure of consideration must fail as well.

44.  Given my findings above, it is therefore unnecessary for me to deal with the other arguments in relation to the Acquisition Agreement, for example the issue of the validity of the “entire agreement clause”.

45.  I now turn to the issue in relation to the Termination Letter. The Plaintiff alleged that this document was not signed by the Plaintiff voluntarily by reasons of duress, illegitimate coercion, unlawful intimidation and/or undue influence on the part of the 1^st, 2^nd and or the 3^rd Defendants. 

46.  It is the Plaintiff’s case that the Plaintiff had never done anything wrong but due to some disagreement and argument between the Plaintiff and the 1^st, 2^nd, 3^rd and 4^th Defendants regarding the management of the shop in Causeway Bay, the 1^st Defendant without any good reasons started to edge him out from the Pet Shop Business since February 2011. 

47.  Before the opening of the shop in Causeway Bay in or about late 2009, the 1^st Defendant informed the Plaintiff that the 1^st Defendant himself would be in charge of it and managing it. The 1^st Defendant promised that he would also drive his own vehicle to deliver goods. The Plaintiff was told that he could then continue to focus on and work at the shop in Hung Hom only.

48.  According to the Plaintiff, this did not come true. Instead of the 1^st Defendant working at the pet shop at Causeway Bay and the Plaintiff being allowed to focus on the business of the shop in Hung Hom, the Plaintiff was asked to drive a new vehicle purchased by the Pet Shop Business to deliver goods ordered from both the pet shops at Hung Hom and Causeway Bay.  The Plaintiff was unhappy about this arrangement as he was too busy in transporting goods and delivery services and had no time to manage the shop in Hung Hom. 

49.  The Plaintiff also complained that the 1^st Defendant refused to listen to him. According to the Plaintiff, he also had some verbal conflict with the 4^th Defendant as he was not satisfied with her inaction in sale and marketing work of the Pet Shop Business in early 2011. 

50.  According to the Plaintiff’s evidence, from the beginning of 2011, the Plaintiff was subjected to a lot of unfair treatment, particularly by the 1^st Defendant. And since around July 2011, the 1^st Defendant would visit the shop at Hung Hom almost every day to watch over the conduct of the Plaintiff.

51.  And for the month of October 2011, the 1^st Defendant required the Plaintiff to attend and stay at the pet shop in Causeway Bay for checking and verifying the accounting records of the Pet Shop Business.  The 1^st Defendant then started to accuse the Plaintiff of committing theft, embezzlement and fraud against the Pet Shop Business. 

52.  I do not intent to repeat all the evidence of the Plaintiff in detail. In short, the Plaintiff was unhappy about the work arrangement, the style of management of the pet shops and the allegations against him. He said that by reasons of the above, since the beginning of 2011, he did not have any good relationship with the 1^st, 2^nd, 3^rd and 4^th Defendants.

53.  On 28 and 31 October 2011, there were two meetings attended by the Plaintiff, the 1^st, 2^nd and 3^rd Defendants. The oral discussions and conversations in these two meetings were recorded by the 3^rd Defendant using her mobile phone. She did it without the knowledge of other persons attending the meetings at the time. She explained that the reason why she used her mobile phone to make the audio recording on these two occasions was because when she was given to understand that there were irregularities in the accounting records and the cash levels in the bank accounts of Pet Shop Business, she felt that she could not trust anyone including the Plaintiff and the 1^st and 2^nd Defendants.  She decided to make the audio recording with a view for protecting herself and for possible future use, if necessary.

54.  Although the audio recordings were not complete records of the two meetings and the recording was interrupted for several times due to the need for the 3^rd Defendant to attend to the customers coming into the shop or to answer phone calls, by and large, the parties agreed that the contents of these recordings were accurate and were a fair reflection of what happened during the meetings.  I agree with these observations and consider the audio records of the two meetings are very useful evidence for me to understand the facts of the matter. For my convenience, the parties also kindly prepared transcripts of the audio recordings of these two meetings for the purpose of the trial.

55.  It was not in dispute that at the end of the meeting on 31 October 2011, the Plaintiff signed an acknowledgement of the Termination Letter.  It was the Plaintiff’s case that he did not voluntarily sign it but the Defendants disagreed. The question therefore before me is whether or not the Plaintiff was coerced to sign the said acknowledgement of the Termination Letter involuntarily by reasons of duress, illegitimate coercion, unlawful intimidation and/or undue influence ?

56.  There was no dispute as to the applicable legal principals in relation to duress, illegitimate coercion, unlawful intimidation and/or undue influence. The issue is: whether or not the facts amount to any of these allegations. 

57.  First of all, let me deal with the issues on duress, illegitimate coercion and unlawful intimidation.

58.  In determining what constitutes illegitimate pressure giving rise to duress, it was submitted by the Plaintiff that, and I agree, under certain circumstances, the threat of a lawful action may be illegitimate if the threat was made to support a demand made in bad faith.  Further, it was submitted that threats which were used to make unreasonable demands would also be regarded as illegitimate.

59.  It was not in dispute that the Termination Letter consisted of three parts, namely the letter itself, Annexure 1 and Annexure 2. The letter itself and the Annexure 1 were signed by the 1^st Defendant. Only the Annexure 2, which was the acknowledgement, was signed by the Plaintiff. The letter itself and the two annexures were written in Chinese. In gist, the letter was a notice to the Plaintiff that his “directorship” and “payment of salary” were terminated effective on that day, namely 31 October 2011.  The Annexure 1 stated the reasons, the allegations of misconduct against the Plaintiff and the events leading up to such termination. The Annexure 2 was about the Plaintiff’s acknowledgment of termination and his admission of the misconducts.

60.  It is the Plaintiff case that his acknowledgment on this Annexure 2 of the Termination Letter was not voluntarily made.  The Plaintiff submitted that he placed his signature on the Annexure 2 only because of the threats made by the 1^st Defendant. The Plaintiff submitted that the words of the 1^st Defendant meant that he would exhaust the Plaintiff’s financial resources and stress him out by taking out vexatious civil litigation and malicious criminal prosecutions in respect of alleged misconducts by the Plaintiff. The Plaintiff also drew my attention to the audio recordings of the meetings, in particular the recordings on 31 October 2011, where, at several incidents, threats of imprisonment, of no future in life, of court proceedings and of criminal prosecutions could be found. 

61.  The Plaintiff argued that he was just naive and thought that after he had signed the acknowledgement of the Termination Letter and admitted the misconducts, the Defendants would have put an end to the matter and would refund him the HK$270,000.00 that he paid as an investment in the Pet Shop Business.

62.  The Defendants argued that those words said during the meetings were comments made in good faith.  The Defendants submitted that the comments were not meant to be threats to the Plaintiff at all. The Defendants explained that they had genuine concerns on the accounting records and had strong suspicion on the Plaintiff’s misconduct.

63.  According to the evidence before me, in fact, it was the 2^nd Defendant who first discovered some irregularities in the cash levels of the joint bank accounts of the Pet Shop Business in around the period between December 2010 and January 2011.  She then informed the 1^st Defendant to pay more attention to the situations.  However, the 1^st Defendant was too busy and only started to pay some attention to the operation of the shop in Hung Hom in around July 2011.

64.  After some checking of the accounting records, both the 1^st and 2^nd Defendants agreed that there were irregularities in the joint bank accounts where the cash levels maintained in the bank accounts was decreasing rapidly and there was far few numbers of transactions than it should be for the money deposited into the bank. Enquiries were made to the Plaintiff but no satisfactory explanation was given.  The 1^st Defendant also discovered that the Plaintiff seldom deposited the cash received from the Pet Shop Business since November 2010 into the bank accounts.  The 1^st Defendant further discovered that the Plaintiff did not make proper records in the computer system for the stock levels.  And according to the evidence of the 1^st Defendant, he also discovered from some customers that the Plaintiff did not even issue receipts to them when they came to buy pet foods.

65.  In September 2011, the 1^st, 2^nd and 3^rd Defendants went to see the accountant, Mr Steve Lo, who had been providing professional accounting services to Ming Ki for many years.  The 1^st Defendant brought with him some accounting records from the income and expense table stored in the computer.  The accountant, Mr Lo, also agreed that there were inconsistencies between the accounting record and the cash movement in the bank accounts. 

66.  According to the Defendants’ case, the Plaintiff, the 1^st, 2^nd and 3^rd Defendants had a meeting on 28 October 2011. During this meeting, as revealed by the audio recordings, the Plaintiff admitted to his fault and misconduct. And in the 31 October 2011 meeting after the irregularities in the accounting records were shown to the Plaintiff, the Plaintiff again voluntarily admitted his misconduct on Annexure 2 of the Termination Letter.  

67.  The Plaintiff denied that he made these admissions voluntarily. He said that he made them under duress, illegitimate coercion and unlawful intimidation.

68.  On balance of probabilities, I find the Defendants’ submissions and evidence are more convincing and believable.  First of all, although I accept that there was some truth in the Plaintiff’s evidence that he had some disagreements with the 1^st Defendant in running and managing the business, logically speaking, it would be against common sense that just because of such disagreements in running and managing a business, the Defendants would then gang-up and make up a case of misconducts against the Plaintiff.  I simply do not see the logic between them. If there were just disagreements in management style between business partners, I do not see why the Defendants had to go through such painstaking exercise to investigate into the irregularities of the accounting records.  The Defendants could simply ask the Plaintiff to leave the Pet Shop Business.

69.  Secondly, I do not accept, as I have already ruled above, that the Plaintiff was a person with such weak mind.  The Plaintiff was an educated, well informed and intelligent person with good commercial experience. On the evidence before me, I am sure that he was definitely not the kind of people who would be easily forced or coerced by someone else to do something unwillingly or involuntarily.  I find that the Plaintiff’s evidence was just an exaggeration of the truth of the matter.

70.  Thirdly, during the meeting on 31 October 2011, the Plaintiff, in fact, at the very beginning of the meeting voluntarily admitted that, out of greed and selfishness, he had caused damage to the Pet Shop Business.  I accept the Defendants’ submissions that this 31 October 2011 meeting was also held in a rational and clam manner where there was no shouting, no words of emotion or outburst.  There were no sign indicating that the Plaintiff was in fear in making those admissions.  In particular, I also consider that this 31 October 2011 meeting was a meeting held on a Monday, namely 2 days after the meeting on 28 October 2011, which was a Friday. In other words, there was a weekend in between.  Since the Plaintiff made the admissions at the very beginning of this 31 October 2011 meeting, I have reason to believe that he must have had very serious consideration about them before he made those admissions in the meeting.  The evidence before me suggests that it was not a decision he would make lightly or hastily.

71.  Fourthly, I am convinced on the evidence before me that the 1^st and 2^nd Defendants were of genuine concern of the misconducts of the Plaintiff.  It was reasonable and normal for any businessmen, like the 1^st and 2^nd Defendants, to look at the bank accounts and to see how much cash actually received from the business according to the accounting records vis-a-vis how much cash actually deposited into the bank. This quick check as to whether or not there were any unusual or abnormal activities was just common sense.  And the 1^st, 2^nd and 3^rd Defendants went to see the accountant to obtain some professional opinions on what they had found. I do not believe that if they did not have such genuine and serious concerns, they would have visited the accountant at that time. 

72.  Fifthly, in my judgment, the audio recordings made by the 3^rd Defendant in the meetings on 28 October 2011 and 31 October 2011 respectively reflected the true and genuine feelings of the various people, particularly the Plaintiff and the 1^st and 2^nd Defendants, attended the meetings.  I have carefully listened to such audio recordings and I do not see that the Plaintiff was coerced, by any means, to admit anything that he should not have admitted.  I accept the submissions of the Defendants that the conversations were conducted in a rational and calm manner.  Judging from the Plaintiff’s reactions during the meetings, I do not accept the Plaintiff’s submissions that the 1^st Defendant’s mention of criminal and civil proceedings would be of such a real threat to the Plaintiff. 

73.  I would also like to add that Foskett, D. in his book “The Law and Practice of Compromise, 7^th Edition”, explains at pages 19, 73 and 75 the principles about the validity of a compromise in forbearing to sue in the context of allegations of duress and undue influence as follows:-

“…a want of good faith in the assertion of a claim or the maintenance of a denial, in circumstances where there is no foundation in fact or law to support them, may operate to invalidate a compromise founded thereon. However, it would seem that provided a claimant believes that he has a right to make the claim he asserts, even if he has little confidence in its ultimate success, a compromise of it is valid. If on the other hand, he makes a claim which he knows to be unfounded and derives an advantage from the compromise of the claim, his conduct will be considered fraudulent and the compromise liable to be set aside. In the former case the compromise will be upheld even if the party against whom the claim is made believes that it has no foundation. By compromising it, he puts an end to troublesome litigation.”

“When a debt has arisen in circumstances which might render the debtor liable to criminal proceedings (for example, where a company employee or director has misappropriated company funds for his own use), a threat of prosecution will not necessarily invalidate a compromise of the claim. It will depend on the circumstances in which the threat is made.”

“A Threat of civil proceedings will not, of course, ordinarily operate to invalidate a compromise of the claim although in rare circumstances the threat may be uttered in a way that constitutes duress. A compromise of an unfounded claim known to be so by the claimant will be ineffective.”

“Prima facie it is difficult to see why a person may not threaten to do something which is lawful in order to induce another person to come to an agreement with him. A threat of civil proceedings is plainly lawful and a compromise of those threatened proceedings will not be set aside save in the rare circumstances where the manner of the threat constitutes duress. Equally there may be rare situations in which the threat of any otherwise lawful act goes far beyond what is either normal or reasonable behavior or, in the particular context in question, what is reasonable in relation to the dispute the parties are endeavouring to settle.”

74.  Given the circumstances of this case, I accept the Defendants submissions that even if there were any threats of civil or criminal proceedings, on the evidence before me, they did not constitute any duress, illegitimate coercion and unlawful intimidation on the Plaintiff. They were comments made in good faith by the Defendants. In conclusion, I find, as a matter of fact, that the Plaintiff made the admissions voluntarily.

75.  Now I turn to the issue of undue influence.  I agree with the Plaintiff’s submissions that as to undue influence, the legal principles most relevant to this case are those relating to presumed undue influence arising from the relationships of actual confidence. The relevant type of confidential relationships may give rise in a variety of relationships in which domination is exercised by one person over another or where the complainant proves that he reposes trust and confidence in the wrongdoer.  In the addition, it must also be shown that the transaction in question was not reasonably to be accounted for on the ground of friendship, relationships, charity or other ordinary motives on which ordinary men act.  The questions to ask perhaps are that: Was domination exercised by the 1^st Defendant over the Plaintiff? Did the Plaintiff repose trust and confidence in the 1^st Defendant? Would the actual relationship between the 1^st Defendant and the Plaintiff give rise to any presumed undue influence? If so, was the presumption rebutted by any evidence?

76.  Although I accept the legal principles that there could be presumed undue influence arising from the relationships of actual confidence and such confidential relationship might arise in all variety of relationships, on the evidence before me, I am unable to see the so-called “master and apprentice” relationship between the Plaintiff and the 1^st Defendant was such a relationship of actual confident.  I can see from the evidence that the Plaintiff admired the 1^st Defendant in many respects but I am unable to see any evidence which suggested that the Plaintiff had so much trust and confidence in the 1^st Defendant to give rise to such relationship.  On the contrary, the Plaintiff, in fact, did not agree with the 1^st Defendant’s judgment in running and managing the business. He also had disagreement, and in fact argued, with the 1^st Defendant about the way how the Pet Shop Business should be run or managed. 

77.  It appears to me that the relationship between the Plaintiff and the 1^st Defendant was more like a normal business partnerships than a “master and apprentice” with one of the partners perhaps with a little more influence in the Pet Shop Business than the other.  It was definitely not one of those relationships which had a high level of trust and confidence and therefore gave rise to any presumed undue influence. 

78.  Alternatively, if, against my factual findings above, the relationship between the Plaintiff and the 1^st Defendant was, in fact, the kind of relationship of actual confidence which would give rise to some presumed undue influence, the evidence before me certainly rebuts such presumed undue influence.

79.  When the Plaintiff signed the Annexure 2 of the Termination Letter on 31 October 2011, he did it after thorough consideration and, in fact, he was given ample time to make enquiries and investigate the matter.  These allegations were first made against the Plaintiff orally on 28 October 2011, which was a Friday. Then after the Plaintiff thought them through over the weekend, he acknowledged his misconducts by signing the Annexure 2 of the Termination Letter on Monday on 31 October 2011. I therefore find that even if there was any presumed undue influence (which I do not think so), such presumption is rebutted by the actual evidence of this case that the Plaintiff was exercising an independent and well informed mind before he signed on the Annexure 2 of the Termination Letter dated 31 October 2011 in admitting his faults. The argument on undue influence must fail too.

80.  The Plaintiff, in the statement of claim, also pleaded the case of conspiracy “to defraud the Plaintiff and to injure and/or cause damage and loss to him by way of duress, illegitimate coercion, unlawful intimidation and/or undue influence.”  First of all, the Plaintiff failed to established, on the evidence before me, that there was any duress or undue influence. Secondly there was no evidence of unlawful intimidation and illegitimate coercion. Since the various allegations of conspiracy are based on the same set of facts, in my judgment, they must also fail as well.

81.  I now turn to the similar allegations against the Defendants regarding the signing of the Acknowledgment of Debt at the meeting on 17 January 2012.  In short, the Plaintiff alleged that he was coerced to sign the Acknowledgment of Debt involuntarily in a similar way that he was coerced to sign the acknowledgement of the Termination Letter.

82.  The Plaintiff similarly submitted that if the Acknowledgment of Debt was not signed voluntarily, it was therefore null and void and would not have any effect on him. The Plaintiff further alleged that he was falsely imprisoned during the meeting on 17 January 2012 and therefore claimed damages accordingly.  Furthermore, the Plaintiff also alleged that the 1^st Defendant conspired with the 2^nd, 3^rd, 4^th and 5^th Defendants to defraud him and to injure and/or cause damage and loss to him by way of duress, illegitimate coercion, unlawful intimidation and/or undue influence.

83.  There was no dispute that the Acknowledgment of Debt, which the Plaintiff signed, was in effect a settlement agreement between the Plaintiff and the Defendants in relation to the disputes between them regarding the Plaintiff’s misconducts and the compensation arrangement. However the Plaintiff now argued, in this action, that the Acknowledgment of Debt was also signed involuntarily. As mentioned above, the Plaintiff signed two versions of the Acknowledgment of Debt. In both versions, the Plaintiff acknowledged that, by way of theft and fraud, he took HK$850,268.00 from the Pet Shop Business and agreed to pay compensation to the Defendants. According to the Acknowledgment of Debt (in both versions), the Plaintiff and the Defendants also agreed that the compensation payable to the Defendants could be partially set-off by using the Plaintiff’s investment in the Pet Shop Business which was agreed to be worth HK$270,000.00. He also acknowledged that after using his investment in the Pet Shop Business to set-off the compensation, he would no longer be an owner of the Pet Shop Business.

84.  The Plaintiff further agreed in the 2^nd version of Acknowledgment of Debt that he would immediately repay HK$30,208.00 in cash (which he did) to the Defendants leaving a balance of HK$550,000.00 to be payable by 28 February 2012

85.  The Plaintiff submitted that when he attended this meeting on 17 January 2012, he was threatened, in a similar way, by the 1^st Defendant by saying that he had a friend who was a police officer and indicated that the Plaintiff would be treated unfairly in the police investigation unless he signed the Acknowledgment of Debt. 

86.  According to the Plaintiff’s evidence that the 1^st Defendant also said that the Defendants would exhaust his financial resource and stress him out by taking out vexatious and malicious criminal prosecution unless he signed the Acknowledgment of Debt.  

87.  The Defendants again denied all the allegations and said that the Plaintiff was cooperative during the meeting. The comments made by the 1^st Defendant were made in good faith and were not meant to be threats to the Plaintiff.

88.  It was not in dispute that the meeting took place in the shop at Hung Hom.  The meeting started at around 8:47 p.m. and lasted until 11:13 p.m.  As mentioned above, since the meeting took place within the shop itself, the CCTV installed at shop recorded the same and the footage was produced as evidence at the trial. 

89.  With the CCTV footage, I therefore have the benefit of observing the actual situation of meeting. I could see how exactly the people behaved and how they treated each other during the meeting. Although there was no sound recording in the footage, it was not difficult to tell from watching the CCTV footage what was going on in the meeting. If there should be any contradiction of evidence between the oral evidence of the witnesses and the CCTV footage, the CCTV footage should prevail.

90.  According to the CCTV footage, I agree with the following observations by the Defendants:-

(1) There was no interruption of the recording and this indicated that the CCTV footage had covered the whole meeting on 17 January 2012;

(2) After the Plaintiff came into the shop initially, he grabbed a dog wondering in the shop and played with it for a while. He was relax and did not appear to be under threat;

(3) Some documents were put on the table in front of the Plaintiff and a suitcase was next to him;

(4) When the Plaintiff and the 1^st to 5^th Defendants were sitting around the table, the Plaintiff was sitting in the position nearest to the shop entrance;

(5) There were times, the 1^st Defendant was drafting document and he then handed over to the 4^th Defendant for typing. At the same time, the 2^nd Defendant was looking at her mobile phone.  In fact, nobody had paid much attention to the Plaintiff; and 

(6) Although, at the entrance of the shop, there was a roller shutter, it was never locked or, at anytime, completely pulled down.

91.  I do not intend to repeat every detail I observe in the CCTV footage.  I accept the Defendants’ submissions that the entire footage gives me a very clear picture of the meeting. I agree with the Defendants’ evidence that it was conducted in a rational and civilized manner. There was no body contact of the Plaintiff with any other persons. There was no excessive body language displayed indicating that violent would be done against the Plaintiff.  Although there was no sound recorded in the footage, it is not difficult to tell from watching the CCTV footage what was going on in the meeting. Like before, I find that the Plaintiff was exaggerating the matter. I do not believe that the Defendants had threatened the Plaintiff by saying words to the effect that “the 1^st Defendant had a friend who was a police officer and the Plaintiff would be treated unfairly in the police investigation” and “the 1^st Defendant would exhaust the Plaintiff’s financial resource and stress the Plaintiff out by taking out vexatious and malicious criminal prosecution”.

92.  The Plaintiff complained that he was never shown any documentary evidence of his misconducts and of the loss suffered by the Pet Shop Business.  In my judgment, this is obviously inconsistent with the CCTV footage shown to me and the Plaintiff was not telling the truth. From the CCTV footage, I can easily see that a lot of documents were put in front of the Plaintiff on the table and a suitcase was placed on the floor next to him.  This evidence is consistent with the Defendants’ evidence that the Defendants had brought along a suitcase of documents in support of their claims against the Plaintiff for the loss suffered by the Pet Shop Business. Several Defendants, particularly the 1^st Defendant also appeared in the CCTV footage to try to explain to the Plaintiff how the business loss of HK$850,268.00 was assessed due to his misconducts. 

93.  In consideration of all the evidence before me, it is difficult to understand the Plaintiff’s evidence as to how the Plaintiff was coerced to sign the Acknowledgment of Debt involuntarily. The Plaintiff’s oral evidence was simply in direct contradiction with what I have seen from the CCTV footage. 

94.  The Plaintiff submitted that the settlement sum of HK$850,268.00 was clearly exorbitant and unsupported by evidence. But in my judgment, there is insufficient evidence to show that the sum of HK$850,268.00 was clearly exorbitant. Showing some mistakes found in the calculation is not sufficient. On the contrary, the Plaintiff was in fact given the opportunity to check the figures at the meeting before he was asked to sign the Acknowledgment of Debt. The evidence also shows that the Defendants were prepared to explain at the meeting as to how they arrived at such a figure with all the supporting documents and materials available. 

95.  The Plaintiff also purported to show me that there were mistakes in the calculation of the said sum and therefore argued that it was not accurate. Perhaps to certain extent, the evidence before me might not be able to show the accuracy of the figure up to every dollar and cent but, in my judgment, it is not necessary for the Defendants to do so. The sum of HK$850,268.00 was agreed by the Plaintiff and the Defendants for settling the disputes between them. As long as this settlement was reached by the parties voluntarily (which I have found so), this court should not go behind the agreement to investigate whether or not the settlement sum was accurate.

96.  Furthermore, in my view, the Plaintiff had so much hands-on experience of the Pet Shop Business and he knew, or ought to have known, that if the settlement figure was clearly not in order or exorbitant.  I would have expected that if the figure was not in order, he would have immediately noticed it and raised objection during the meeting. But no evidence suggests that he did.

97.  On the evidence before me, I do not see the Plaintiff has successfully demonstrated, on balance of probabilities, how duress, illegitimate coercion and unlawful intimidation did happen at the meeting on 17 January 2012.  As to the allegation of undue influence, I repeat my reasons above in relation to the similar allegations against the Defendants regarding the signing of the Termination Letter on 31 October 2011 where I also reject the Plaintiff’s submission entirely. I therefore find that the Plaintiff also signed the Acknowledgment of Debt voluntarily on 17 January 2012, like he signed the Termination Letter on 31 October 2011.

98.  The Plaintiff also complained that he was held against his will at the shop in Hung Hom during the entire meeting on 17 January 2012 and was herded by the 3^rd, 4^th and 5^th Defendants to a nearby automatic teller machine of a bank to withdraw HK$30,000 cash for part payment of the compensation. The Plaintiff, therefore, argued that by reason of false imprisonment, he lost liberty and/or companionship for 3 hours. The CCTV footage clearly contradicts his oral evidence for false imprisonment during that evening. According to the CCTV footage, the Plaintiff attended the meeting by his own free will. There is no evidence to show that he was not allowed to leave at any time. The CCTV footage clearly shows that he went out of the shop to the automatic teller machine of a bank on his own accord. In my judgment, the claim for false imprisonment must also fail too.

99.  Given my judgment that the Plaintiff signed the Acknowledgment of Debt voluntarily and on the evidence before me, I also accept that the Plaintiff pay the sum of HK$30,208.00 at the meeting voluntarily pursuant to the agreement, I therefore find that the Acknowledgment of Debt was a valid and binding settlement agreement between the parties concerned. 

100.  The Plaintiff further argued that there was no consideration for the settlement agreement as evident by the Acknowledgment of Debt. The answer to the Plaintiff’s submission is simple. I have already found that the Plaintiff, who voluntarily signed the Termination Letter and the Acknowledgment of Debt, admitted his misconducts and the Defendants agreed, in return, not to bring any civil claim against the Plaintiff to recover the losses suffered. This forbearance to sue was, obviously, a valid consideration provided by the Defendants for the Plaintiff in agreeing to pay compensation in return. (see Callisher v. Bischoffsheim (1869-70) L.R. 5 Q.B. 449, Q.B. and Miles v New Zealand Alford Estate Co (1885) 32 Ch. D. 266). I am unable to see how this “lack of consideration” argument could help the Plaintiff’s case at all. And, in fact, the Plaintiff did not even plead such an argument in the Statement of Claim and therefore it would be unfair to the Defendants if the Plaintiff was allowed to argue it.

101.  In coming to my conclusion above, I have also taken into consideration of the evidence as a whole, for example after the Plaintiff signed the Termination Letter on 31 October 2011 in admitting his misconducts, when he signed the Acknowledgment of Debt on 17 January 2012 to settle the disputes with the Defendants, there were at least two and a half months in between. If there were any inappropriate conducts, namely duress, illegitimate coercion, unlawful intimidation, conspiracy or undue influence, by the Defendants on 31 October 2011, the Plaintiff was free to seek any independent legal advice or help during this period of two and a half month and could even refuse to attend the meeting on 17 January 2012. He, in fact, had a free choice not to carry on the negotiation with the Defendants if he was being treated unfairly and oppressively. Since there was no evidence to suggest that he attended the meeting on 17 January 2012 involuntarily, the only reasonable inference from the evidence was that he must have accepted what he signed on 31 October 2011. And having accepted his admissions of the misconducts, he also accepted the quantum of damages caused by his misconduct calculated by the Defendants on 17 January 2012 by entering into the settlement agreement with them.

102.  I also agree with the Defendants’ submissions that if I find the Termination Letter and the Acknowledgment of Debt are valid and the Plaintiff agreed or acknowledged them voluntarily,  it is not necessary for me to go behind the negotiation between the parties as to how the figures was calculated. It was a figure voluntarily agreed by the parties and I must therefore respect it.

103.  On the whole, the Plaintiff’s evidence gave me a strong impression that all these allegations, including,:- misrepresentation, mistake, duress, illegitimate coercion, unlawful intimidation, conspiracy, false imprisonment, undue influence, total failure / lack of consideration regarding the Acquisition Agreement, the Termination Letter and the Acknowledgment of Debt respectively were, more likely than not, just afterthoughts and were made up by Plaintiff afterwards because he regretted the settlement with the Defendants.  In fact, none of these allegations had ever happened when the relevant documents were signed. The Plaintiff knew and understood perfectly well what he signed and was willing to do so.

104.  By reason of the above, I therefore dismiss the Plaintiff’s claim entirely and award the counterclaim to the Defendants for enforcing the settlement agreement, namely the Acknowledge of Debt for the balance of the sum not yet paid by the Plaintiff for a sum of HK$550,000.00.

105.  For costs, I should think that it should follow the event. I therefore make a costs order nisi that the costs of the entire action (including the claim and the counterclaim) be to the Defendants with Certificate for Counsel. This order nisi will become absolute unless an application by summons to vary the same is filed within 14 days. 

106.  It remains for me to thank Counsel of the parties, Miss Lui and Mr. Li, for their thorough research and most valuable assistance.