GO PO CHU JENNIFER v. WOO MEI BO MABLE

DCCJ 215/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 215 OF 2013

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JUDGMENT
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1.  The plaintiff claims against the defendant for the repayment of a sum of $1,000,000, whereas the defendant counterclaims for the repayment of a sum of $50,000. The plaintiff’s case is that there was an oral agreement between them in which she agreed to lend HK$1,100,000 without interest to the defendant for paying the further deposit of the purchase of a property. The defendant repaid $50,000, leaving $1,050,000 unpaid. In order to set her claim within the jurisdiction of the District Court, the plaintiff abandons $50,000 and claims against the defendant for $1,000,000.

2.  The defendant’s case is that there has never been such oral agreement.  The plaintiff paid the said sum on her own initiative without any request made by the defendant.  In respect of the $50,000, the defendant claims that it was not a repayment and that it was in fact a loan she advanced to the plaintiff. She now counterclaims against the plaintiff for the repayment of the sum of $50,000.

Background

3.  In July 2012, the defendant first met the plaintiff who was a conveyancing executive in Messrs Gary Mak, Dennis Wong & Chang (“GMDWC”), and intended to engage them for completing a property transaction.

4.  At that time, the defendant was contemplating to purchase several pieces of land in the New Territories (“the Property”) using a limited company Fully Smart Limited (“FSL”) with the total price of HK$16,000,000.  She signed a Provisional Sale and Purchase Agreement (“PSPA”) on 21 July 2012 and paid the initial deposit of HK$500,000.00 (“the Initial Deposit”).  According to the PSPA, a formal sale and purchase agreement shall be signed and a further deposit of $1,100,000 (“the Further Deposit”) shall be payable on 8 August 2012.  The completion was scheduled on or before 31 August 2012.

5.  The plaintiff introduced another law firm Messrs Katherine Y W Or & Co (“KYWO”) to the defendant for the said property transaction since GMDWC did not have the expertise to deal with transactions relating to New Territories land.

6.  Under the PSPA, the defendant was required to pay the Further Deposit on or before 8 August 2012. On 8 August 2012, the plaintiff learnt that the defendant’s cheque for the Further Deposit was countermanded and she contacted the defendant by phone.

7.  The main factual dispute turns on what happened at the said telephone conversation on 8 August 2012.  It is the plaintiff’s case that the defendant asked to borrow HK$1,100,000; and the defendant’s case is that she told the plaintiff she was busy and did not ask to borrow a loan from the plaintiff.

8.  It is not in dispute that subsequent to the said telephone conversation, the plaintiff transferred HK$1,100,000 to KYWO before the deadline on 8 August 2012.  The plaintiff and the defendant had met for lunch on 10 August 2012.  They had also commmunicated using whatsapp.  The relevant whatsapp messages between the plaintiff and the defendant at the material time have been produced at this trial.  There is no dispute on the authenticity of the record of the whatsapp messages.  On 14 August 2012, the defendant transferred a sum of $50,000 to the plaintiff.  According to the plaintiff, this sum was a partial repayment of the loan whereas the defendant said that this sum was a loan to the plaintiff at the plaintiff’s request.

9.  The completion was postponed to 7 September 2012 and was subsequently further postponed to 11 September 2012.  According to the defendant, she decided not to proceed with the purchase of the said property and chose not to complete the transaction on 11 September 2012.  

10.  The vendor of the Property forfeited the entire deposit in the sum of HK$1,600,000.

11.  The plaintiff is now claiming against the defendant for HK$1,000,000, after deducting the repayment of HK$50,000 and waiving a further $50,000 to set the case within the jurisdiction of the District Court. 

12.  On the other hand, the defendant denies the existence of the loan and counterclaims against the plaintiff for HK$50,000.

Legal principles

13.  As a general rule, the plaintiff being the claimant normally has the legal burden of proof in establishing his claim. 

14.  I agree with the defendant’s counsel that in the present case, notwithstanding that there is no dispute that the plaintiff had transferred the sum of $1,100,000 to KYWO being the Further Deposit, the burden remains on the plaintiff to prove that there was such an oral agreement between the plaintiff and the defendant.  The same applies to the defendant in respect of her counterclaim in that she bears the burden of proof.  The standard of proof is on balance of probabilities.

15.  I also agree that the facts finding and the determination of the credibility of the parties shall be the focus of this case.  In making my findings of fact in this case, I am guided by a number of general principles which judges apply as to fact finding and the assessment of credibility.

16.  The approach to assessing the credibility of witnesses may have best been summarised by the words of Robert Goff LJ, as he then was, in The Ocean Frost [1985] 1 Lloyd’s Rep 1 at 57:

“Speaking from my experience, I have found it essential in case of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities can be of very great assistance to a Judge in ascertaining the truth.”

17.  In deciding whether to accept a witness’s account, importance should also be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events: eg Lam Rogerio Sou Fung v Tan Soon Gin George (unreported, HCA 2576/2005, 5 May 2011) §39 (Chu J).

18.  In determining a witness’s credibility, I have also attached importance to the consistency of the witness’s evidence with undisputed or indisputable evidence, and the internal consistency of the witness evidence.  The latter type of consistency is often tested by a comparison between the witness oral testimony and his or her witness statement.

19.  I have cautioned myself against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witness: Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 at §§36-37 (Bokhary PJ).

20.  Both the plaintiff and the defendant testified in court.  They adopted their respective witness statements as their evidence in chief.  The plaintiff had subpoenaed a Mr Clifton Wong Chak Lam (“Mr. Clifton Wong”) to give evidence on her behalf.  Mr. Wong was the handling solicitor for FSL and the defendant, the purchaser in the conveyancing transaction.  Mr Wong’s evidence relates to the progress of the conveyancing transaction from the signing of the formal sale and purchase agreement up to the time of the forfeiture of the deposits by the Vendor.  His evidence is basically not in dispute. 

21.  It is the plaintiff’s evidence that:-

(1) At the material time, she was a conveyancing executive in the employ of GMDWC.  In early July 2012, a Mr Lawrence Ng introduced her to the defendant in the office of GMDWC.  The defendant told her that she wanted to invest in real properties and consulted her on the general conveyancing procedures.  The defendant does not dispute that she got to know the plaintiff through Mr Lawrence Ng but her evidence is that the first time she met the plaintiff was a few days after 21 July 2012.  I do not think it matters.  I accept that their acquaintance was short.

(2) On or about 21 July 2012, the plaintiff received a faxed copy of the PSPA.  She realised that the land was situated in the New Territories and that GMDWC did not have the expertise to deal with lands in the New Territories.  She then telephoned the defendant and told her about it.  She introduced Mr Clifton Wong of KYWO to the defendant instead.  As she had experience in general conveyancing practice and at the request of the defendant, she assisted her to liaise with KYWO throughout the transaction and therefore had knowledge of the progress.

(3) Sometime after signing the PSPA, the defendant told her that she needed advice on the prospect and restriction of developing New Territories land.  In the afternoon  of 6 August 2012, she brought the defendant to the office of Fotton Ela Architects Limited and introduced a member staff Ms Joyce Yuen to her.  The defendant then sought the advice of Ms Joyce Yuen.

(4) After meeting Ms Joyce Yuen, the defendant and the plaintiff went to the office of KYWO at about 4:00 pm.  The defendant signed the formal agreement for sale and purchase in respect of the transaction in escrow on behalf of FSL and drew a personal cheque in the sum of HK$1,100,000 (“the 1^st Cheque”) as payment for the Further Deposit.  Since it was already after 4:30 pm, the 1^st Cheque could not be banked in on the same day and was therefore banked in by KYWO on 7 August 2012.

(5) In the morning  of 8 August 2012, the defendant told the plaintiff on the phone that she lost an envelope containing her cheque book and had to instruct her bank to stop her cheque book.  The plaintiff then rang Ms Tse of KYWO to inquire whether the envelope was left in the office of KYWO, but was told that no such envelope was found in KYWO.

(6) At about 4:00 pm on 8 August 2012, Ms Tse of KYWO rang and informed the plaintiff that the 1^st Cheque was bounced and she could not find the defendant.  Since the Further Deposit of HK$1,100,000 must be paid before the close of business on 8 August 2012 according to the PSPA, Ms Tse asked for the plaintiff’s assistance to locate the defendant.

(7) Shortly after the telephone conversation with Ms Tse, the plaintiff successfully reached the defendant on her mobile phone.  The defendant told her that she was on board a helicopter heading to Macau and would return to Hong Kong on 10 August 2012.  Due to the loss of her cheque book, she had already instructed her bank to stop payment of all cheques. Without her signature and written authorization, the 1^st Cheque could not be honoured by the bank.  The defendant further told her that she would give the necessary authorization to the bank upon her return on 10 August 2012 and the 1^st Cheque could be honoured then.  The plaintiff told her that she was contractually bound to pay the Further Deposit on 8 August 2012 under the PSPA, otherwise the Vendor could rescind the PSPA and forfeit the initial deposit.  The defendant then asked the plaintiff to pay the Further Deposit on her behalf so that she could fulfill her obligation under the PSPA, and promised to pay the plaintiff back the sum of HK$1,100,000. upon her return to Hong Kong on 10 August 2012 (“the Oral Agreement”).

(8) In pursuance of the Oral Agreement, the plaintiff transferred HK$1,100,000 to the account of KYWO.  Later on, she confirmed with Mr Clifton Wong of KYWO that the Further Deposit had been paid to Messrs Paul W. Tse & Co. solicitors for the Vendor (“PWT”) later on the same day.

(9) On 9 August 2012, the plaintiff sent her bank account number with the Industrial and Commercial Bank of China (Asia) Ltd (“ICBC”) to the defendant through a whatsapp message.  The defendant acknowledged receipt thereof on the same day.  In the morning of 10 August 2012, she checked her ICBC bank account and discovered that the defendant had not repaid the money to her in accordance with the Oral Agreement.  She told the defendant the same by whatsapp, to which the defendant replied that the plaintiff could receive the same before 5:00 pm that day.

(10) In the afternoon of 10 August 2012, the plaintiff had lunch with the defendant and Ms Joyce Yuen.  The defendant gave the plaintiff $10,000 in a red packet as Lai See.  During lunch, the defendant told her that the loan would be repaid by credit into her account later that day.  She checked her ICBC bank account again after lunch and still could not find any repayment from the defendant. Later at about 4:00 pm that day, she received a whatsapp message from the defendant informing her that the defendant’s cheque account was locked and all transactions must be adjourned for one day.

(11) On 13 August 2012, there was still no transfer from the defendant to her ICBC bank account.  She sent two whatsapp messages to the defendant telling her the same and requested her to repay her at least part of the loan. The defendant apologized for the delay and promised to repay her within one or two days.

(12) In the morning of 14 August 2012, the plaintiff checked her ICBC bank account and found that the defendant still had not repaid the loan to her.  As she needed money for her own mortgage payment, she asked the defendant by whatsapp to repay her at least a small amount of the loan for her emergency use.  The defendant then transferred HK$50,000 to her ICBC bank account through ATM as partial repayment of the loan later on the same day.

(13) On 15 August 2012, the plaintiff told the defendant by whatsapp that she was worried that the defendant did not have sufficient capital for the purchase of the Property and that the transaction might fall through. The defendant replied and told her not to worry.  Later that day, she asked the defendant through whatsapp when she would repay her the rest of the loan and the defendant replied she would do so the next day.

(14) On 23 August 2012, the plaintiff asked to meet with the defendant by whatsapp. The defendant replied and asked her to check her ICBC bank account after about 5:00 pm the next day.  She protested that the defendant had only repaid her the $50,000 and the sum of HK$1,050,000 was still outstanding.  She requested the defendant to repay her at least HK$50,000 that day but the defendant did not repay or reply to her.

(15) On 27 August 2012, the defendant went to the office of KYWO and executed the Assignment of the Property on behalf of FSL in escrow.

(16) On 28 August 2012, on behalf of the defendant and FSL, KYWO requested to postpone the completion date.  The Vendor’s solicitors replied that the Vendor would only agree postponement on the condition that the defendant confirm acceptance of title of the Property and that the Initial Deposit and Further Deposit in the aggregate sum of HK$1,600,000 be released to the Vendor.

(17) On 31 August 2012, on behalf of the defendant and FSL, KYWO accepted the said conditions and completion was therefore postponed to 7 September 2012.

(18) On or about 7 September 2012, the defendant presented to KYWO a cheque drawn by a company called G Phoenix Club Limited in favour of KYWO in the sum of HK$14,400,000 (“the 2^nd Cheque”) as payment for balance of the purchase price.  KYWO attempted to bank in the 2^nd Cheque but it was dishonoured and completion did not take place on that day.

(19) On behalf of the defendant and FSL, KYWO requested to further postpone the completion from 7 September 2012 to 11 September 2012 and PWT agreed.

(20) On 11 September 2012, the defendant and FSL failed to pay the balance of purchase price.  On 12 September 2012, the Vendor forfeited the Initial Deposit and the Further Deposit in the aggregate sum of HK$1,600,000 and  terminated the PSPA.

Analysis

22.  It is important to look at the whatsapp record.  It recorded the communications between the plaintiff and the defendant regarding the repayment of the money to the plaintiff following the transfer of $1,100,000 made by the plaintiff.  There is no dispute that Jennifer Go is the plaintiff whereas Mable Wu is the defendant as appearing in the messages.  I shall recite the relevant parts as follows:-

“12年8月9日10:40:27:Jennifer Go:工商戶口:861080040911

12年8月9日14:41:52:Mable Wu: ok thankyou

……

12年8月10日10:26:46:Jennifer Go:我銀行未見有錢，昨天滙or今天滙?

12年8月10日10:29:06: Mable Wu: 昨天做今天五点前會到

12年8月10日10:29:43: Jennifer Go: OK

……

12年8月10日15:59:01: Mable Wu: 在會中 剛收到資料因帳戶有進帳要做一個巡例鎖定 所有transaction要延後一天 麻煩您延後一天查帳 麻煩之處! 多多包涵!! 多多包涵!! 會後回電給您。

12年8月13日16:45:37: Mable Wu: 在會中 晚一点回電給您

12年8月13日17:04:33: Jennifer Go: 我銀行未有見到錢到

12年8月13日19:17:25: Jennifer Go: 我今天真是有擔心了，我相信銀行要撥數是不需要這麼多天。當天幫你也是太衝動了。或你不想keep此地，可轉賣出去，其實你只需還我一百零九萬，我根本沒有意思想賺你錢。

12年8月13日19:19:01: Mable Wu: 令您擔心對不起事情只係剛碰在一起絕對無其他意思請放心這兩天一定會處理好 請包涵!!

12年8月14日09:48:20: Jennifer Go : HSBC 110-647963-001

Go Po Chu Jennifer

12年8月14日09:45:41: Mable Wu: 收到! thankyou

12年8月14日09:52:29: Jennifer Go: 請你今天多少都過些數給我任何一個戶口。

12年8月14日09:49:26: Mable Wu: 好的 放心

12年8月14日13:30:51: Jennifer Go: 請問今天會入多少數給我?

12年8月14日13:35:48: Jennifer Go: 因我每個月中要供些樓，這筆錢是我平時的運作費，請無論如何今天要給我。

12年8月15日09:48:45: Jennifer Go: 想同你商量如果你好肯定有足夠資金成交，當然我唔擔心我筆錢，但如果你失預算，我就十分麻煩，係咪需要找定個後備買家呢

12年8月15日10:00:59: Jennifer Go: 過多一個星期才知失預算就唔夠時間走棧。就算有後備買家傾到尾你到時夠錢都可以唔賣，咁安全D。因為見你小訂都打算撻，月尾撻對你來講無分別

12年8月15日10:22:39: Mable Wu: 朋友 真的不用擔心啊!!

12年8月15日18:09:02: Jennifer Go: 你幾時才肯定有尾數呢? 明天又星期四啦。

12年8月15日18:07:55: Mable Wu: 我明天中午回來即辦! 麻煩晒!!

12年8月17日14:53:39: Jennifer Go: 今天係咪有消息?

12年8月23日09:03:42: Jennifer Go: 今天約個時間見面?

12年8月23日09:03:43: Mable Wu: 明天四點左右才回並請你明天查賬並約星期一下午簽文件謝謝!!

12年8月23日09:09:35: Jennifer Go: 那個戶口?

12年8月23日09:05:51: Mable Wu: 工商呢!

12年8月23日09:11:40: Jennifer Go: 明天幾點可查帳?

12年8月23日09:10:21: Mable Wu: 价五點後check就ok

12年8月23日09:22:40: Jennifer Go: 聽講你已有資金在戶口，為何每日都有原因，好快又一星期了，我這筆小數(對你來講)要拖這麼多天，不如你筆錢在那銀行，我給你戶口轉帳吧! 如果星期一都交不出尾數，咁就唔夠時間去執手尾。你可否今天同我攪清楚呢

12年8月23日09:24:44: Mable Wu: 在工商 我網上轉左指定戶口然後轉給你的

12年8月23日09:30:22: Jennifer Go: 如果你今天都無數過比我，你應該就係無資金的。但為何你要天天都拖時間呢，百壹萬你只付我五萬，即係你戶口是不夠資金的。為何要等明天五點呢。明天無又要等星期六日

12年8月23日09:33:41: Jennifer Go: 無論如何你今天要攪清楚，否則要揾定老細揾後路。係人都知你做緊?，撻定對你都影響名聲，因為你好高調

12年8月23日09:50:32: Mable Wu : 818068004914 二点後你打呢支電話英文Mable就ok”

23.  The plaintiff’s evidence regarding her demand for repayment since 9 August 2012 is supported by the communications between the plaintiff and the defendant through whatsapp.  It can be seen that the plaintiff was very anxious to be repaid and that the defendant was fully aware of the payment made by the plaintiff on her behalf and aware of her obligation to repay the plaintiff.  The defendant just kept putting forward various reasons for not being able to successfully transfer the sum back to the plaintiff’s bank account.  In the end, the defendant only managed to transfer $50,000 to the plaintiff.  Despite the plaintiff’s repeated requests, the defendant failed to repay the balance of the loan to the plaintiff.

24.  I have separately and independently considered the defendant’s evidence.  I find her allegation that the plaintiff paid the Further Deposit on her own initiative inherently incredible.  There is no dispute that the plaintiff and the defendant had known each other just before this transaction.  I cannot see any reason why the plaintiff should pay such a substantial sum of money on the defendant’s behalf in the absence of any request on the defendant’s part.  The defendant stated that she was surprised to find that the plaintiff had paid the further deposit on her behalf.  Apart from expressing surprise, the defendant did not seem to have done anything about it.  It is a property transaction involving a substantial sum of money.  She said she was busy with her work when the plaintiff called her at about 1:00 p.m. on 8 August 2012 and that she had never asked the plaintiff to pay the further deposit on her behalf.  The telephone call was in relation to her cheque being countermanded.  According to the defendant, the plaintiff called her again at about 4:00 pm and she was having a meeting with her customers in a hotel and it was not convenient for her to talk to the plaintiff.  The plaintiff told her that she had paid the further deposit for her.  If the defendant did not ask the plaintiff to pay the further deposit on her behalf, how did she intend to deal with the situation where her cheque was countermanded and that there was a deadline to pay the Further Deposit?

25.  According to the defendant, she had a great concern as to whether she would be allowed to alter the Property to meet or suit her purpose of purchasing the Property and that she had thought about letting the vendor forfeit the initial deposit in order to save her loss in the future.  If that was her thought or intention at the time, the payment of the Further Deposit by the plaintiff on her behalf must have upset the defendant’s plan.

26.  The defendant, surprisingly, did not seem to find it necessary to sort out with the plaintiff about this payment of the Further Deposit by the plaintiff on their subsequent lunch meeting on 10 August 2012 or in the subsequent whatsapp communications.  There are obviously questions like whether the $1,100,000 has to be repaid to the plaintiff as a debt, and if so, when it should be repaid.  If it was indeed her thought that she wanted to cut loss and let the vendor forfeit the initial deposit at the time, there is all the more reason for her to disclaim any liability to repay the plaintiff. One would expect that she would, at the very least, discuss with the plaintiff on the issue of her liability to repay the plaintiff should she decide to proceed or not to proceed with the transaction.  If the defendant had the thought of not completing the transaction and that the $1,100,000 was paid by the plaintiff on her own initiative (without being requested by the defendant), there was really no reason why the defendant should bear the responsibility of repaying the plaintiff.  It is indeed very surprising, if the defendant is telling the truth, that she did not see fit to sort it out with the plaintiff regarding the liability of this sum of $1,100,000.  The defendant’s allegation is totally contradicted by the subsequent communications between the plaintiff and the defendant through whatsapp messages.  One can see that the defendant was aware of the plaintiff’s payment of the $1,100,000 on her behalf and aware of her obligation to repay the plaintiff.  The defendant did not raise any issue along the line that the plaintiff had paid the Further Deposit without her prior knowledge and consent or that she should not be liable to repay the plaintiff.  On the contrary, the defendant repeatedly asked for indulgence for more time to make the transfer to repay the plaintiff in response to the plaintiff’s request for repayment.

27.  When the defendant was asked why the plaintiff should pay the Further Deposit on her own initiative, she sought to explain that after the plaintiff paid the Further Deposit, she called the defendant on the evening of 8 August 2012 in which she allegedly asked the plaintiff why she had paid the Further Deposit on her behalf; the plaintiff then informed her that she had a Japanese buyer who was willing to buy the Property for $16,800,000 and requested the defendant to sell it to her client and that the defendant would become a confirmor in the transaction whereby the defendant could have her Initial Deposit of $500,000 back and in addition the plaintiff would pay the defendant another $500,000.  As pointed out by Mr Wong, solicitor for the plaintiff, that there was no mention of such proposed arrangement in her Defence and Counterclaim nor was it stated anywhere in her witness statement.  Such matters were mentioned for the first time when the defendant gave evidence in court.  When confronted by Mr Wong on this, the defendant sought to explain that she had already told her previous solicitors but they did not set them out in her Defence and Counterclaim and her witness statement.  The defendant confirmed that she was aware that such matters were not mentioned in her Defence and Counterclaim and her witness statement.  These are highly relevant matters.  If she had indeed told her previous solicitors, there was no reason why her previous solicitors would not have recorded them in her witness statement.  I do not believe the defendant in this regard.

28.  The defendant’s aforesaid allegation is also contradicted by the whatsapp messages record.  Since 10 August 2012, the plaintiff kept on chasing the defendant for repayment.  The plaintiff on 13 August 2012 messaged the defendant through whatsapp that the defendant only needed to repay her $1,090,000.  The plaintiff explained in court that she had taken into account the $10,000 Lai See money the defendant had given her and that was why she stated that the defendant only needed to repay her $1,090,000.  After the defendant transferred through ATM a sum of $50,000 to the plaintiff on 14 August 2012, the plaintiff continued to chase the defendant for the balance of the loan.  On 23 August 2012, 09:30:22 hours, the plaintiff specifically mentioned that for the sum of $1,100,000, the defendant only paid her $50,000.

29.  The defendant sought to highlight a number of entries in the whatsapp messages record to suggest that the sequence of some of the messages were wrong and that the money she agreed to transfer to the plaintiff as recorded in the message record was in fact the loan the plaintiff asked to borrow from her.  She said in fact the plaintiff asked to borrow $200,000 from her. In the end, the defendant only lent the plaintiff $50,000.  This is again a new allegation.  It is not supported by the whatsapp exchanges between the plaintiff and the defendant.  I have considered the entries as highlighted by the defendant, for example,

12年8月23日09:09:35: Jennifer Go: 那個戶口?

12年8月23日09:05:51: Mable Wu: 工商呢!

12年8月23日09:11:40: Jennifer Go: 明天幾點可查帳?

12年8月23日09:10:21: Mable Wu: 价五點後check就ok

According to the defendant the sequence of messages should follow the time sequence as recorded.  The defendant said that her message: 工商呢! was in fact not made in response to the plaintiff’s message: 那個戶口?  And that her message : 价五點後check就ok was not made in response to the plaintiff’s message: 明天幾點可查帳?  She said that she was in fact having a telephone conversation with the plaintiff and that her whatsapp messages were made in response to what the plaintiff said to her over the telephone.  This is yet again another new allegation which she had not  mentioned before.  Reading the whatsapp messages in context, I find that the plaintiff’s questions and the defendant’s answers were in proper sequence and the defendant was answering the plaintiff’s questions.  I do accept that the time of the messages do not appear to be in proper sequence. That happen to some other messages in this record as well.  It may well be due to some technical issue.  But reading it in context, I find that the exchanges were all in their proper sequence.  I reject the defendant’s evidence in this regard.

30.  The plaintiff confirmed in her evidence that when the defendant did not repay her as promised she started to get worried.  She was worried and confused.  She had suggested to the defendant different ways to sell her Property if the defendant did not want to complete the transaction.  The plaintiff worried that the defendant might not have the money to repay her the $1,100,000.  That was why the plaintiff gave those suggestions to the defendant.

31.  There is no dispute that since the defendant’s message on 23 August 2012 at 09:05:32, the defendant did not reply to any of the plaintiff’s messages.  If the defendant had the thought of letting the vendor forfeit her deposit and if the plaintiff had told her on 8 August 2012 that she had a Japanese buyer who was willing to purchase the Property for $16,800,000 whereby the defendant could have her Initial Deposit back and in addition the plaintiff would pay her another $500,000, there was no reason why the defendant should refrain from discussing with the plaintiff on this alternative arrangement. The defendant agreed that such arrangement would be to her own benefit.  As pointed out by Mr Wong for the plaintiff, the plaintiff did mention about Japanese potential buyer but that happened much later when the defendant did not reply to her messages and she started to get worried and confused.  It was under such circumstances did she suggest various ways to find sub-buyers for the defendant.

32.  The defendant sought to explain that after the last message on 23 August 2012 at 09:05:32, she blocked the plaintiff’s incoming call and messages and as a result her phone did not receive those messages from the plaintiff after the defendant’s last message.  The defendant made this allegation for the first time when she testified in court.  The plaintiff had, as early as April 2013, disclosed the record of the Whatsapp message by attaching the same to her Reply and Defence to Counterclaim as a schedule.  Under paragraph 18 of the said Reply, the plaintiff specifically pleaded that ‘the plaintiff further avers that in spite of her effort to find a sub-purchaser for the defendant, the defendant had not replied to the plaintiff’s whatsapp messages since 23 August 2012”.  If, in fact, the defendant did not receive those messages from the plaintiff because she had blocked all the incoming messages from the plaintiff, she would have had ample opportunity to deny having received such messages at the time by way of filing a Reply or stating it in her witness statement.  She did neither.  I do not accept her evidence in this regard.

33.  There is also a dispute on the conversation between Miss Joyce Yuen and the defendant at the meeting on 6 August 2012.  According to the plaintiff, Miss Yuen had advised the defendant the land in question was farm land; there was an existing fish pond; the defendant could keep the fish pond but could not build other structures on the land; she would need to apply for approval from the relevant government department if she wanted to build anything.  The defendant, in response, said that she and her husband liked fish pond.  According to the plaintiff, the defendant did not express any view that the land was not suitable for her.

34.  In this regard, the defendant’s evidence is that she told Miss Yuen she wanted to build a wall surrounding the land; build a swimming pool and convert the existing structures into houses for them to live.  When Miss Yuen advised her that she couldn’t do any of them except keeping the fish pond she was disappointed and immediately had the thought of letting the vendor forfeit the initial deposit.  I do not believe her.  There is no dispute that soon after the meeting with Miss Joyce Yuen the defendant went to the office of KYWO to execute the formal sale and purchase agreement in escrow on behalf of FSL and drew a personal cheque in the sum of HK$1,100,000 as payment for the Further Deposit.  On 27 August 2012, the defendant went to the office of KYWO and executed the assignment of the Property on behalf of FSL in escrow.  Further, the defendant requested for an extension to complete the transaction and was willing and did accept the vendor’s conditions for extending the completion date to 7 September 2012.  And on 7 September 2012, the defendant presented to KYWO a cheque in the sum of $14,400,000 being the balance of the purchase price.  Such conduct is quite inconsistent with the alleged thought of letting the vendor forfeit her initial deposit.  I reject the defendant’s evidence in this regard.

35.  I have carefully considered the plaintiff’s and the defendant’s evidence respectively and the documentary evidence, in particular, the record of the whatsapp messages.  I find that the plaintiff is an honest witness.  I accept that her transfer of the sum of $1,100,000 for the purpose of paying the Further Deposit to KYWO was made at the request of the defendant and upon  her promise to repay her upon the defendant’s return to Hong Kong on 10 August 2012. I do not believe the defendant’s evidence in this regard.  I am satisfied on the balance of probabilities that the defendant did ask to borrow the $1,100,000 from the plaintiff during the telephone conversation on 8 August 2012 and promise to repay upon her return on 10 August 2012 in the circumstances as stated by the plaintiff.

36.  As regards the defendant’s counterclaim, the whatsapp messages clearly showed that the plaintiff was requesting the defendant to repay her and that she needed the money for paying her own  mortgage repayment.  In response, the defendant transferred a sum of $50,000 to the plaintiff’s account.  Such payment is clearly a partial repayment of the loan by the defendant.  I reject the defendant’s evidence in this regard.

37.  The plaintiff has also claimed for pre-judgment interest.  I have invited the parties to make submission in this regard.  I shall deal with the issue and the law very briefly.

The DCO (Cap. 336)

38.  S.49 of the District Court Ordinance(DCO) provides that:-

“(1) The Court may include simple interest, at the rate the Court thinks fit in a judgment for a debt or damages, on the debt or damages or on a payment made before judgment, for the period between the date when the cause of action arose and-

(a) for a sum paid before judgment, the date of the payment; and

(b) for the sum for which judgment is given, the date of the judgment.

……

(7) In determining, for the purposes of section 32, 33, 36 or 37, whether an amount exceeds or is less than the amount specified in those sections, the Court shall not take account of any interest that may be ordered under this section or of any order for interest made under this section.”

39.  Section 49(7) of DCO states very clearly that I can grant pre-judgment interest and such interest shall not be taken into account in determining whether the plaintiff’s claim exceeds the jurisdiction of the District Court.

Post-judgment interest

40.  Judgment debts are to carry simple interest, (a) at the rate the court orders; or (b) in the absence of an order, at the rate the Chief Justice determines by order, on the total amount of the judgment debt, or on the part that for the time being remains unpaid, from the date of the judgment until payment: (S.50(1) of the DCO)

Rate of pre-judgment interest

41.  The CFA in Polyset Ltd v Panhandat Ltd (unrep, FACV 28/2000, [2002] HKEC 512) stated that the guiding principle is to compensate a successful plaintiff for being kept out of his money.  The trial judge has a discretion to determine the rate of interest.  To compensate a successful plaintiff for being kept out of his money, the general practice in Hong Kong has, at least since 1984, been to award interest reflecting the theoretical cost to the plaintiff of borrowing the sums withheld.  This is a rate taken to be prime plus 1% unless the evidence in a particular case makes adoption of another rate appropriate: see Komala Deccof & Co SA v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) [1984] HKLR 219.

42.  In Komala Deccof & Co SA v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) [1984] HKLR 219, the CA held that: -

“(a) Prima facie the losing party should pay interest at a reasonable rate from the date when the sum due should reasonably have been paid.

(b) In order to justify a modification of that basic principle there must be something exceptional; an unexplained delay does not amount to “something exceptional”; and the onus is on the losing party to show sufficient reason why the usual principle should not apply.

(c) In principle, the rate of interest payable should reflect the general rate at which a successful party would have to borrow money to take the place of that which was withheld.

(d) Where commercial rates are appropriate the proper figure for interest is one per cent above the relevant minimum lending rate.”

43.  In the recent judgment Tadjudin v Bank of America, National Association (No 2) [2015] 3 HKLRD 331 at §§10-12, Anthony To J further explained that “[t]here are many different interest rates in the money market, such as prime rate, Interbank rate or “HIBOR”, mortgage rate, saving rate, fixed deposit rate etc.  For very many years, Hong Kong has found itself in a persistently low interest rate environment with money in good supply.  Saving rate and fixed deposit rate are ridiculously low.  Under such an environment, prime rate seems to have fallen out of favour. HIBOR, particularly for 12 months, seems to be more reflective of the money market condition and a more realistic index to use in assessing the cost of money.  It is used as a base rate for a lot of borrowing.  Interest for many mortgages and commercial lending is expressed in terms of HIBOR plus, with or without a cap based on prime plus or prime minus.  That fixed percentage is a matter for negotiation depending on the bargaining power of the borrower, the size of the loan and the money market condition.  It is below one percent for a borrower with good security and repayment ability and higher for ordinary consumer borrowing.  Prime plus or minus nevertheless continue to be used for consumer mortgages and lending.”  Having considered all the relevant factors, the court held that the 12-month HIBOR plus 2% realistically represented the average cost of consumer borrowing.  Using 12-month HIBOR at 0.85% as the mean rate, 2.85% per annum was adopted as the starting point for pre-judgment interest rate. 

44.  Having referred to the relevant authorities, the parties are able to agree that 2.85% p a is reasonable in the circumstances of the present case.  I agree and shall adopt 2.85% as the appropriate rate.  As regards the period, the plaintiff is content with the period from the date of writ to the date of judgment and I shall so order.

Order

45.  (1) I give judgment to the plaintiff in the sum of $1,000,000 with interest at 2.85% p a from the date of writ to the date of judgment and at judgment rate from the date of judgment until payment;

  (2) The defendant’s counterclaim be dismissed;

  (3) I make a costs order nisi that costs of the action and of the counterclaim, including any costs reserved, be to the plaintiff on a party to party basis, to be taxed if not agreed;

  (4) The costs order nisi shall be made absolute 14 days from the date of this Judgment;