HONG KONG BALANCE INTERNATIONAL TRADING & LOGISTICS CO., LTD v. KWOK YIK HUNG and NG KWOK WAI t/a ALPHA HEALTHCARE & TECHNOLOGY COMPANY

DCCJ 3716/2021

[2024] HKDC 1106

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3716 OF 2021

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JUDGMENT

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Introduction

1.  This is the Plaintiff’s application for leave to appeal against the judgment in this action dated 8 March 2024 (the “Judgment”)[1].

2.  The two grounds relied on by the Plaintiff in the draft Notice of Appeal are:

(a)  The Court had “failed to consider adequately or at all the Whatsapp messages exchanged between Deng and Chan during the period from 14 March 2020 to 29 January 2021, and the invoices issued by the Defendants” (“Ground 1”); and

(b)  The Court had “erred in failing to consider, analyse and place weight to the contemporaneous evidence (ie the Whatsapp messages and invoices) and inherent probabilities in their course of dealing context, and conversely, too much weight upon [the Court’s] assessment of the character of the witnesses” (“Ground 2”).

3.  In respect of the two limbs under s 63A(2) of the District Court Ordinance (Cap 336) under which leave to appeal may be granted, first, the Plaintiff has not put forward in its draft Notice of Appeal any reason in the interests of justice why the appeal should be heard.

4.  Secondly, for reasons explained below, the Court finds that the intended appeal has no reasonable prospect of success. It is apparent that the Plaintiff is simply trying to have a second round of the trial and inviting the Court to re-assess all the evidence, hoping that it will come to a different conclusion. This should not be allowed.

5.  In the premises, the Plaintiff’s application for leave to appeal is dismissed.

Ground 1: Alleged failure to consider Whatsapp messages and invoices

6.  First, contrary to the Plaintiff’s contention, the Court had carefully considered all the Whatsapp messages between Deng and Chan between 14 March 2020 and 29 January 2021 and other contemporaneous documents, including the invoices. See, eg Judgment, §§17, 19-23, 25, 46, 61, 72(b), 72(e), 72(q), 98, 128(e), 128(f).

7.  Secondly, contrary to the Plaintiff’s contention in paragraph 1(8) of the draft Notice of Appeal, the Court did not find that the subject matter of the First Contract was Batch 3. As clearly stated in paragraph 18 of the Judgment, Batch 1 was the subject matter of the First Contract under which the Plaintiff claims against the Defendants in this action.

8.  In relation to the First Contract:

(a)  The Court found in paragraphs 93 and 94 that it was clear from (i) the invoice for the First Contract and (ii) Deng’s own admission that the contracting parties were Alpha Healthcare and Deng. In the premises, the Plaintiff has no locus to sue under the First Contract;

(b)  In any event, having considered all the evidence, including those referred to in paragraphs 1(1) to (7) of the draft Notice of Appeal, the Court held in paragraphs 97 to 100 that Alpha Healthcare had never entered into any contract with Deng or the Plaintiff in respect of Batch 3. In the premises, the 45 cases of masks which Alpha Healthcare delivered to Deng on 7 April 2020 were the 20 cases and 25 cases of masks in respectively Batch 1 and Batch 2. Alpha Healthcare had therefore performed the First Contract and did not breach the same.

9.  Thirdly, the issue of re-issuing of invoice for the First Contract mentioned in paragraph 1(9) of the draft Notice of Appeal was carefully considered in paragraphs 72(r) to (t) of the Judgment before the Court held in paragraph 93 that the contracting parties for the First Contract were Alpha Healthcare and Deng, and not the Plaintiff.

(2)  The Alleged Second Contract

10.  First, contrary to the Plaintiff’s contention, the Court had carefully considered all the Whatsapp messages between Deng and Chan between 14 March 2020 to 29 January 2021 and other contemporaneous documents, including the invoice. See, eg Judgment, §§37-39, 101, 104, 115(a).

11.  Secondly, having considered all the evidence, including those referred to in paragraphs 1(10) and (11) of the draft Notice of Appeal, the Court found:

(a)  in paragraphs 101 to 103 of the Judgment that on 4 August 2020 by sending the invoice numbered IV20080314 dated 3 August 2020 to the Plaintiff, Alpha Healthcare had offered to sell 300 cases of masks to the Plaintiff under the terms stated on the said invoice. Such offer could be accepted by the Plaintiff by paying the stipulated deposit to Alpha Healthcare.

(i)  In the premises, the Plaintiff’s contention in paragraph 1(12)(b) of the draft Notice of Appeal that the stipulated methods of payment on the invoice did not apply to the Alleged Second Contract cannot be correct, nor was there any evidence to support such a contention;

(ii)  Further, the Whatsapp message from Chan on 10 July 2020, saying that he would “follow up with the 300 cases order”, was equivocal and did not mean that the Alleged Second Contract had been concluded. The Plaintiff’s reliance on the same does not advance its case;

(iii)  Indeed, even the Plaintiff itself appears to accept in paragraph 1(12)(a)(ii) of the draft Notice of Appeal that the Whatsapp message from Chan on 10 July 2020 related to the “to-be-Second Contract [emphasis added]”, not any concluded contract.

(b)  in paragraph 105 to 119 of the Judgment that, contrary to the Plaintiff’s contention, Chan had no actual or apparent authority to accept payment from Deng on behalf of Alpha Healthcare and that Alpha Healthcare had never received any payment from Deng or the Plaintiff under the Alleged Second Contract.

12.  Thirdly, for reasons explained in paragraph 115 of the judgment, the Court found that the Plaintiff’s reliance on the Defendants’ acceptance of the deposit in the second back-to-back arrangement as the Defendants’ representation of Chan’s authority to receive payment was misplaced.

13.  Contrary to the Plaintiff’s contention in paragraph 1(12)(a)(i) of the draft Notice of Appeal, the Court did not find that Chan had the authority to receive payment in cash for the Defendants.

14.  In paragraph 115 of the Judgment, the Court was dealing with the Plaintiff’s reliance on the Defendants’ acceptance of deposit on a separate occasion in the second back-to-back arrangement in support of the contention that Chan had authority to receive payment on behalf of the Defendants. Such contention was rejected by the Court for reasons set out in paragraph 115 of the Judgment.

15.  One of those reasons for rejecting the Plaintiff’s contention was that, as explained in paragraphs 115(c) to (e) of the Judgment, it was the Defendants’ case (which was accepted by the Court) that in the second back-to-back arrangement, Deng had wanted to deposit HK$32,800 cash into Alpha Healthcare’s bank account, but could not do so. It was only in such circumstances that Chan had to temporarily hold the cash which was to be deposited into Alpha Healthcare’s bank account and was actually so deposited.

16.  The Court found that the above incident did not amount to a holding out by the Defendants to Deng or the Plaintiff that Chan had the authority to accept payment on behalf of Alpha Healthcare, still less to accept payment into his personal bank account on behalf of Alpha Healthcare. This is especially so when the aforesaid matters were considered against the express stipulation on the invoice as to the acceptable methods of payment.

17.  The Court further held that even if Chan had had the authority to receive payment in cash (which was not accepted by the Court), it did not mean that he had authority to receive payment into his personal bank account on behalf of Alpha Healthcare as alleged by the Plaintiff.

18.  Finally, for reasons explained in paragraphs 107 to 114 of the Judgment, the Court rejected Deng’s allegation that he had made payment into Chan’s personal bank account in reliance on the past dealings between the parties.

19.  In the premises, the Court found that the Plaintiff had not accepted the Defendants’ offer made pursuant to the invoice numbered IV20080314 dated 3 August 2020, and the parties did not enter into the Alleged Second Contract.

(3)  The Alleged Third Contract

20.  First, contrary to the Plaintiff’s contention, the Court had carefully considered all the Whatsapp messages between Deng and Chan between 14 March 2020 and 29 January 2021 and other contemporaneous documents, including the invoices. See, e.g. Judgment, §§40-43, 72(v), 128(e), 128(f).

21.  Secondly, having considered all the evidence, including those referred to in paragraphs 1(13) to (15) of the draft Notice of Appeal, the Court found:

(a)  in paragraph 122 that on 18 December 2020 by issuing the invoice numbered IV20082608 and dated 26 August 2020 to the Plaintiff, Alpha Healthcare had offered to sell 300 cases of masks to the Plaintiff under the terms stated on the said invoice. Such offer could be accepted by the Plaintiff by paying the stipulated deposit to Alpha Healthcare. In the premises, the Plaintiff’s contention in paragraph 1(17) of the draft Notice of Appeal that the stipulated methods of payment on the invoice did not apply to the Alleged Third Contract cannot be correct, nor was there any evidence to support such a contention;

(b)  in paragraph 125 that the amount of deposit was clearly stated to be HK$176,250 on the invoice. There was no reason for Alpha Healthcare to deduct the amount of deposit payable under the Alleged Third Contract by HK$42,000 as alleged by the Plaintiff;

(c)  in paragraph 126 to 130 of the Judgment that, contrary to the Plaintiff’s contention, Chan had no actual or apparent authority to accept payment from Deng on behalf of Alpha Healthcare and that Alpha Healthcare had never received any payment from Deng or the Plaintiff under the Alleged Third Contract.

22.  Thirdly, contrary to the contention in paragraph 1(18) of the draft Notice of Appeal, for reasons explained in paragraphs 105 to 117 of the Judgment and paragraphs 12 to 18 above, the Court did not find that Chan had authority to receive deposits on behalf of the Defendants in the Alleged Second Contract.

23.  Finally, contrary to the contention in paragraph (19) of the draft Notice of Appeal, the Court found that the Plaintiff had not accepted the Defendants’ offer made pursuant to the invoice numbered IV20082608 and dated 26 August 2020, and the parties did not enter into the Alleged Third Contract.

24.  In the premises, this purported ground of appeal has no reasonable prospect of success.

Ground 2: Alleged failure to consider, analyse and place weight on contemporaneous evidence

25.  First, in light of the reasons set out above and in the Judgment, there is no merit or any reasonable prospect of success in this purported ground of appeal.

26.  Contrary to the Plaintiff’s contention, the Court had carefully considered, analysed and placed sufficient weight on the contemporaneous evidence, including the Whatsapp messages and invoices, in making the relevant findings on a balance of probabilities.

27.  In particular, the Court relied on inter alia the following facts in finding that the parties (and also Deng) had treated the invoices as offers made by Alpha Healthcare to sell the masks, which the Plaintiff could accept by paying the invoiced amount:

(a)  In respect of Batch 1 in the First Contract, Batch 2 and Batch 3, Deng had obtained invoices from Chan before paying for the masks (Judgment, §102);

(b)  The invoices expressly stipulated that the deposit stated therein had to be paid promptly by cheque made payable to Alpha Healthcare, transfer to Alpha Healthcare’s bank account or FPS at the specified phone number (Judgment, §§103 and 123);

(c)  The accepted methods of payment were expressly stipulated on the invoices and that none of those methods includes making payment to Chan (Judgment, §§118(b) and 128(b));

(d)  If the Plaintiff had paid for the deposit before any invoice was issued by Alpha Healthcare, such deposit payment would be clearly stated on the invoice (Judgment, §§118(c) and 128(c)).

28.  Further, the Plaintiff’s reliance on the purported payment of deposit for the Alleged Second and Third Contracts as evidence of the conclusion of those alleged contracts is completely misplaced. Such reliance flies in the face of the Court’s findings in paragraphs 120 and 130 of the Judgment that Alpha Healthcare had never received any payment of deposit from Deng or the Plaintiff under the Alleged Second and Third Contracts.

29.  All in all, in light of the contemporaneous evidence analysed by the Court, there was nothing inherently improbable about the parties treating the invoices as offers.

30.  Secondly, in finding that Deng was an unreliable and incredible witness in paragraph 72 of the Judgment, the Court had carefully considered all the relevant contemporaneous evidence.

31.  Similarly, the Court had tested Ng’s and Kwok’s respective evidence against contemporaneous documents in finding in paragraphs 77 to 91 of the Judgment that they are reliable and credible witnesses.

32.  Thirdly, in finding that Chan lacked authority to accept payment on behalf of Alpha Healthcare, the Court had carefully considered all the evidence set out in paragraphs 105 to 119 and 126 to 129 of the Judgment.

33.  In the premises, this purported ground of appeal has no reasonable prospect of success.

Conclusion

34.  For all the reasons explained above, the Plaintiff’s application for leave to appeal is dismissed.

35.  I make a costs order nisi that the costs of and occasioned by the Plaintiff’s application for leave to appeal be paid by the Plaintiff to the Defendants on party and party basis, with certificate for Counsel, to be taxed if not agreed. Such costs order nisi shall become absolute in the absence of any application within 14 days to vary the same.