UNIVERSAL WORLDWIDE TRANSPORTATION LTD v. J & C CARGO SERVICES CO LTD AND OTHERS

HCA1581 / 2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1581 OF 2008

----------------------

----------------------

--------------------------------------------

REASONS FOR JUDGMENT

--------------------------------------------

A.  Introduction

1.  The is the trial of the Plaintiff’s claim against the 4^th Defendant only, there being previously default judgments entered respectively against the 1^stto 3^rd Defendants.

2.  The Plaintiff carries on the business of freight forwarding.  This is a claim by Plaintiff for outstanding fees for freight forwarding services provided to the 1^st Defendant under invoices issued for the period between May 2007 and November 2007.  The total outstanding sum claimed at trial is HK$966,609.50^[1].

3.  The 2^nd, 3^rdand 4^th Defendants are respectively the directors and shareholders of the 1^stDefendant.

4.  Under a written Chinese guarantee known as Credit Facilities Agreement (“the Credit Facilities Agreement”), the 2^ndto 4^th Defendants agreed to guarantee the 1^stDefendant’s obligation to pay the Plaintiff’s charges. 

5.  As I mentioned above, the 1^stto 3^rd Defendants did not defend the claim, and default judgments were entered against them respectively in September 2008 and March 2009, leaving only the 4^th Defendant defending the claim. 

6.  Until May 2010, the 4^thDefendant had been legally represented.  On 18 May 2010, the 4th Defendant filed a Notice to Act in Person. 

7.  At the first day of trial on 19 July 2010, the 4^th Defendant did not appear.  Given that he was still represented when the trial dates were fixed, and that the Plaintiff had also served a letter reminding him of the trial dates at the service address he provided on the Notice to Act in Person before the trial, I was satisfied that he ought to have been aware of the trial dates and the trial could proceed notwithstanding his absence. 

8.  However, as the Plaintiff at the same time took out a Summons on the first day of trial seeking to relying on various new documents (which are part of the invoices underlying this claim), I adjourned the trial to 21 July 2010 to allow the Plaintiff to properly serve the Summons on the 4^th Defendant. 

9.  That was what the Plaintiff did and the 4^th Defendant personally acknowledged service of the Summons by signing a copy of the same.  On the 21 July 2010 when the trial was resumed, the 4^thDefendant still did not appear.  I again gave leave for the trial to proceed in his absence. 

10.  At the end of the trial, I gave judgment with costs in favour of the Plaintiff with reasons to follow.  I now give my reasons.

B.  The pleaded defences

11.  In the Defence filed, in addition to requiring the Plaintiff to prove its claim, the 4^thDefendant has raised essentially the following defences:

(1)  The Credit Facility Agreement was obtained by the Plaintiff by way of undue pressure exerted on the 4^thDefendant, and thus is not legally binding.

(2)  In any event, even if it was enforceable, the Credit Facility Agreement was executed by the 4^thDefendant on 30 July 2007, and thus he as a guarantor would not be liable for any charges incurred by the 1^stDefendant prior to that day.

C.  The trial

12.  Mr Wong Wai Hing, the Managing Director of the Plaintiff gave evidence at trial.  He has also filed a witness statement which he confirmed to be correct and true.

13.  All the invoices relied on by the Plaintiff for the purpose of this claim (and set out in Annex to the Amended Statement of Claim) have been disclosed and confirmed by Mr Wong.

14.  Mr Wong also confirmed:

(1)  After deducting the part payments made by the 1^st Defendant, a total sum of HK$966,609.50 is still outstanding under these invoices.

(2)  The Credit Facility Agreement was executed by the 4^th Defendant on 2 May 2007 before him at the Plaintiff’s office.

(3)  He had never exerted any undue pressure (as alleged) on the 4^th Defendant (or the others) to execute the Credit Facility Agreement.

15.  I have no reason not to believe in Mr Wong.  I therefore accept his evidence (including his witness statement) in its entirety.

16.  It is pertinent to also note that the Credit Facility Agreement expressly provided that the terms thereof were effective as from 1May 2007.  Thus, whether the 4^th Defendant signed it on 30 July 2007 is neither here nor there for the purpose of the present claim.

17.  Further, as the 4^thDefendant did not attend the trial and give any evidence, (a) there is nothing to rebut Mr Wong’s evidence, and (b) there is simply no evidence to support the allegations of the various conducts allegedly made by Mr Wong to exert undue pressure on him to execute the Credit Facility Agreement.

18.  In the circumstances, I find that that the Plaintiff has properly proved its case, and reject the 4^thDefendant’s defences.

D.  Conclusion

19.  I therefore give judgment in favour of the Plaintiff against the 4^th Defendant for the sum of HK$966,609.50.   The Plaintiff is further entitled to interest at 1% above the prime rate as from time to time quoted by HSBC from 1 April 2008 until judgment date (i.e., 21 July 2010), and thereafter at judgment rate until full payment.

20.  I further order that the costs of this action as against the 4^th Defendant, including any reserved costs, be to the Plaintiff to be taxed if not agreed.

[1] This is the sum under the Amended Statement of Claim.  I gave leave to the Plaintiff to amend at trial, to reduce the claimed sum from HK$1,160,286.59 to the present figure, after the Plaintiff has abandoned the claim for compound interest.