DENG MINGHUI t/a TIANYE INDUSTRIAL (HONG KONG) CO v. CHAU SHUK LING ELAINE

HCA749/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 749 OF 2005

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REASONS  FOR  JUDEMENT

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The parties

1.  At all material times, the plaintiff resided in Japan. Since about 1995, he had been trading as the sole proprietor of Tianye Industrial (Hong Kong) Company in plastic materials. His business operated in the Mainland, Hong Kong and Japan. Plastic materials and products manufactured in Japan were shipped to Hong Kong for the Mainland purchasers to take delivery. The purchasers would pay the prices to the plaintiff in Hong Kong.

2.  For business purposes, the plaintiff travelled and divided his time between Japan, the Mainland and Hong Kong.  In about late spring 2001, he engaged the defendant as Tianye’s part-time employee pursuant to an oral agreement (“the Agreement”).  Among other job duties, the defendant received monies paid by the purchasers on behalf of the plaintiff in Hong Kong. 

The disputes

3.  In 2005, the plaintiff commenced the present action.  He alleged that under the Agreement, the defendant agreed that she would on behalf of the plaintiff receive from various purchasers prices of goods and materials; would render to the plaintiff a true and full account of all the moneys so received by her; and would pay the same to the plaintiff without deduction.  Since about 2001, the defendant had received monies from the plaintiff’s purchasers pursuant to the Agreement.  In about September 2004, the plaintiff requested her to render and account and pay the monies so received.  But she had failed to do so.  The total sum that she ought to but had failed to pay amounted to HK$4,340,549[1].

4.  The defendant admitted that she was the plaintiff’s part-time employee but she disputed the terms of the employment.  She said that under the Agreement she was entitled to a basis salary of HK$7,500 (which the plaintiff agreed) and a 3% commission on all the monies received by her for and on behalf of the plaintiff (which the plaintiff denied).  More importantly, she alleged the plaintiff engaged her, and she agreed, to deliberately and unlawfully conceal Tianye’s taxable trading receipts and /profits from the Inland Revenue Department.  Further, all transactions conducted by the plaintiff, his Mainland customers and the defendant were in fact an integral and inseparable part of the plaintiff’s illegal smuggling activities in the Asia Pacific Region.  She counterclaimed for a declaration that the Agreement was unenforceable as being against public policy and tainted with illegality.  Alternatively, if the Agreement is enforceable, she counterclaimed for the outstanding commission to be assessed or damages in the sum of HK$3,106,541.67 for damages arising from breach of the Agreement (which essentially is the amount of the alleged outstanding commission). 

The trial

5.  The trial took place before me on 20 September 2010.  The defendant, who is now residing in the USA and had been legally represented until trial, did not appear.  The trial thus proceeded in her absence. 

6.  The plaintiff gave evidence to prove his claim.  He had this to say in his witness statement dated 12 October 2009 :

“公司背景

3. 我現時經營的生意，主要由三組分別位於日本﹑中國和香港的公司分工營運。日本的公司主要負責生產﹑加工處理新的塑膠原料及/或循環再造舊的塑膠原料。有關原料將會被供應及/或出售給中國的客戶，而我在中國的公司亦會負責加工和銷售有關原料。

4. 我的上述客戶主要分佈於中國深圳﹑順德和東莞。由於塑膠原料進入中國的報關等手續繁複，所以我一直只安排我的該日本公司將有關原料托運送至香港，然後在確認客戶已把貨款支付給我的該日本公司後，我的該日本公司將通過我的該香港公司在香港把櫃紙文件交給客戶，供客戶在香港港口取櫃提貨。之後，客戶再以其他方式(如陸路方式)自行把貨物轉運往中國。因此，在中國的報關等程序全由客戶自行安排，與我和我的公司無關。本供詞第16段提及的交易全部屬於客戶自行提貨﹑報關及轉運的情況。在少數的情況下，客戶可能因未能依時支付貨款或其他原因未能依時提貨，為了減少在香港的倉庫租金支出，我會安排我的該香港公司把貨物經獨立的中港運輸公司，安排報關及運輸，送往我的該中國公司進行加工或轉銷售。該等運輸公司從我的該香港公司取櫃紙後便在香港港口提取原封貨櫃後，自行報關及運送貨物。

5. 於2005年1月20日之前，我在香港負責處理上述塑膠原料的生意的公司只有一間，公司名稱是田野實業(香港)公司(‘該公司’)。該公司是一間無限責任公司，我則是它的獨資擁有人。

6. 由2003至2006年1月20日，該公司辦公室是位於香港銅鑼灣軒尼詩道468號金聯商業大廈11樓1102 室。由那時直至現在，該公司只佔我上述的塑膠原料的生意的一小部份，正如在以上解釋，該公司主要是負責在我的該日本公司收妥貨款後把櫃紙交給客戶，供客戶自行直接在香港港口提貨。有時候該公司亦會因應客戶的要求在香港代收取客人的貨款，然後再將貨款匯到我的該日本公司。

7. 在2000/2001的財政年度，該公司只僱用1名員工，但她在2001年初辭職，因此，約於2001年，我有意聘請一名文員，協助我處理該公司在香港的業務及工作。由於我對聘請陌生人再沒有信心，所以沒有經報紙或一般人事顧問公司招聘文員。我主要是在朋友之間打聽看看有沒有相熟的人可以介紹。最後經我的好朋友陳國光先生介紹，我於2001年認識被告人。那時候，被告人是上述陳國光的女朋友。

8. 未幾，在我的朋友上述陳國光先生的安排下，我有機會與被告人會面，並得知她那時候的職業是保險經紀，當被告人了解該公司在香港的業務詳情後，被告人認為該公司對她要求的工作量並不高，所以她希望可以繼續保留她那時候的保險經紀的工作，同時以非正式的兼職的身份處理該公司的業務。

9. 最後我和被告人達成協議，該公司將會聘請她作為兼職文員，而被告人繼續保留她保險經紀的正職。我記憶所及，我沒有安排替被告人印製咭片，所以她的職銜是文員還是經理我也不肯定，但工作性質則是兼職文員。關於被告人所謂的『薪金』，初期我一直也只當作是被告人的『外快』，按時以現金形式支付被告人。這情況我亦向該公司的會計師反映，我後來也得知這些開支並無列作該公司的薪金支出。自2001年至2003年，該公司的辦公室是位於香港筲箕灣。在租約期滿後，該公司便遷往上述銅鑼灣的辦公室，我記得該公司在每次變更辦公室/營業地址時，我均有向政府申報，所以香港稅務局的商業登記處應該有我變更地址的資料。

10. 該公司所需要處理的業務，雖然一直沒有多大的改變，但由2003至2005年期間，我的公司買賣塑膠原料的數量開始增加，所以處理文件的工作量亦增加。約於2005年6 月，我成立大都(香港)有限公司購入我的該香港公司現時辦公室所在的物業，即上述地址。現時我的該香港公司有2名全職僱員以處理上述文件工作。

11. 我在中國的公司約有400名僱員，當中有100人在深圳及東莞。我的該中國公司現時在深圳設立的廠房和貨倉已有10多年的歷史。我在日本﹑中國和香港的公司，一直以來均運作正常。

12. 關於出售塑膠原料和收取貨款的安排，我的該日本公司開業的第一天至今，我都是要求客戶先全數支付貨款，並在我確認收到貨款後，才將相關貨物的櫃紙送交我的客戶，供他們自行在香港的港口取貨。在大多數的買賣塑膠原料交易當中，賣方是我的該日本公司，我的客戶理應直接支付我的該日本公司。但有很多時候，為了向我的一些客戶提供方便，我會同意他們將貨款直接支付給該公司，以代表我的該日本公司收取相關貨款。在2005之前，我一直沒有申請或使用銀行提供的電話理財或網上銀行服務。在我發現被告人約於2004年9月盜取我的金錢後，我在其後才首次在恒生銀行登記電話和網上銀行服務。

13. 在那時候，由於我大多數時間也不在香港，所以我根本無法核查我的客戶是否已支付相關貨款。當時我想到的一個較簡單解決問題的方法便是要求我的客戶將相關貨款存入被告人的帳戶，之後我再致電被告人確認相關存款的日期和金額。那時我的想法是被告人是我好朋友的女朋友，應是可被信賴的，我亦從來不把她當作為一名僱員。另外，我又想如果我能嚴謹的監管被告人，敦促她儘快將相關貨款轉到我的帳戶，那麼囤積在被告人手上的資金應該不會太多，風險亦不會過高。

14. 我必須澄清，每批貨款一般來說約數十萬港元，若兩筆貨款被盜取，這風險我仍能接受。在2004年9月我因為過於繁忙未能好好監管被告人，導致被告人有機可乘盜取一大筆囤積的貨款。話說回頭，若不是經此教訓，我可能仍會一直沿用上述收取貨款的辦法。無論如何，如上所述，我現在已使用電話和網上銀行服務。

15. 被告人是我的一個兼職員工，被告人收取雙方協議的薪金。我從來沒有同意支付她薪金以外的金錢，不論是佣金或其他服務費。

16. 約於2004年9月，我發現被告人故意拖延將她所收到貨款轉帳到我指定的帳戶，亦拒絕將她在那段時候收到的貨款的詳細情況通知我。其後，我發現她把與該公司的生意相關的文件全部取走。她亦挾帶所偷取的貨款，逃離香港。因此，我約於2004年10月向香港警方報案，被告人至今仍被香港警方通緝。在2005年4月，我入禀本訴訟，向被告人追討港幣4,340,551.00元的款項，也要求被告人提供她曾代我收取但仍未轉支付給我的貨款的全盤帳目。該筆港幣4,340,551.00是按我的初步調查及估計所計算來，詳情如下：

	客戶/付款人	金額(港幣)	發票編號
1.	奇興塑料廠/羅洪奇	279,426.00[2]	7953 and 8049
2.	長興塑料廠/黎建琨	58,863.00	8053
3.	華昌塑料廠/兆興塑料廠/麥兆源	449,208.00	8040, 8031, 8000, 8058, 8043 and 8044
4.	泉泉塑料廠/劉少權	102,589.00	8076
5.	隆生塑料廠/伍漢新	199,596,00	8038
6.	亮業塑料廠/黎卓興	781,351.00	7946, 7960, 8034, 7972 and 7943
7.	高祥塑料廠/何醒祥	46,153.00	8055
8.	金盈發塑料廠/志發塑料廠	42.301.00	8051
9.	華凌/華誠塑料廠/謝鍚堅	626,988.00	7896, 7927, 7939, 7952, 8002 and 8028
10.	恒邦塑料廠	316,018.00	8004, 8006 and 8061
11.	遠昌塑料廠	320,604.00	8005, 8007 and 8008
12.	大躍塑膠貿易	341,566.00	8054
13.	聯華塑膠貿易	275,886.00	8032
14.	深圳市日塑塑膠制品有限公司	500,000.00	8009–8013
	Total :	4,340,549.00

這些貨款都是我的客戶已支付給被告人代我收取的款項。”

7.  The documentary evidence including banking documents relied on by the plaintiff clearly showed that since 2001, the plaintiff’s customers had made payments into the defendant’s personal account with the Bank of China and she had transferred the sums to the plaintiff by way of cheques.  The last personal cheque drawn by the defendant in favour of the plaintiff was dated 21 September 2004 for HK$474,032.  The sums as particularized above had been deposited into the defendant’s said account but she has failed to pay over the sums to the plaintiff.  They have been outstanding to date. 

8.  In about 2006, the Inland Revenue Department froze Tianye's bank accounts in Hong Kong suspecting that Tianye might not have paid its profits tax in full. The plaintiff explained the matter in his supplemental witness statement dated 7 January 2010 :

“1. 約於2006 年5 月，香港稅務局突然凍結了田野實業(香港)公司(‘田野公司’)和我在香港的多個銀行帳戶。

2. 我當時即時經會計師劉滙祥先生與稅務局聯絡。稅務局當時透露因它懷疑田野公司未有繳足利得稅，故採取上述行動，並要求我和田野公司協助調查。

3. 當時，本訴訟已進行多時，故那時我估計極有可能是被告人向稅務局作出誣告，企圖以稅務局的調查干擾我進行本訴訟。

4. 正如我在早前的供詞中解釋，被告人在潛逃離開香港時，把所有保存於田野公司香港辦公室的文件一概拿走。被告人必定是估計如果稅務局調查田野公司的稅務時，而我又拿不出全面完整相關帳目及會計文件，我極難向稅務局詳細解釋所有帳目的來龍去脈。

5. 當時稅務局即時凍結田野公司和我的所有銀行帳戶，令田野公司的日常運作大受影響。最後，經過多次與稅務局交涉，雙方達成協議，我同意將港幣4,000,000.00 元存放於稅務局作為抵押金及解凍帳戶的條件，直至雙方弄清田野公司的稅務問題。

6. 雖然被告人已取去田野公司的文件，但在過往多個月，我和我的員工均一直努力嘗試從其他途徑取得相關有幫助的文件。但由於過往多年，每年所涉及之貨量及貨款均頗龐大，貨物的批次亦十分多，在缺乏遭被告人偷去之原始會計文件，我和田野公司一直均無法因應稅務局的要求，把每一批貨物的詳情、相關貨款的流向逐一向稅務局闡明。

7. 另外，由於田野公司大多數的客戶均是長期客戶，有些時候會將幾批的貨款集中一次支付，這令我更難追查貨款流向。

8. 經過一輪冗長的磋商，田野公司仍未能按稅務局要求提供每宗交易的証據文件供它審閱，另一方面稅務局亦無理據對田野公司採取進一步行動。由於因上述稅務糾紛嚴重影響田野公司與它開戶銀行的關係，我最後與稅務局達成補交稅款的和解協議。

9. 當時田野公司的會計師雖已解釋田野公司並不需要和解，但為免再妨礙田野公司的運作，我最後亦從商業角度作出上述決定，附件一為田野公司補交利得稅的文件副本。”

Discussion

9.  When a trial proceeds in the absence of the defendant, the plaintiff may prove his claim, so far as the burden of proof lies on him.  The proof will be limited to the allegations in the statement of claim.  Having proved his claim, the plaintiff is entitled to such relief as he claims and such other relief as is consistent therewith.  See Hong Kong Civil Procedure 2010, Vol. 1, para. 35/1/1 at p. 704. 

10.  The defendant being absent, her witness statement will not be received as evidence.  The same is true for the report of her expert on the PRC law.  In short, the court will disregard what the defendant had alleged in her witness statement and what her expert had asserted in his report when evaluating the plaintiff’s evidence to see if he has come up to proof. 

11.  On the evidence before me, there can be no dispute the defendant had agreed to and did in fact receive for and on behalf of the plaintiff monies paid by his customers.  She had also paid the monies so received to the plaintiff except the outstanding sums, which formed the subject matter of the plaintiff’s claim.  Subject to the defence based on unenforceability of the Agreement and the counterclaim for commission, she must account and pay to the plaintiff all the sums claimed. 

12.  The defendant bears the burden to prove that the Agreement was illegal as alleged.  She has to prove that it was formed and performed for the purposes of unlawfully concealing Tianye’s tax liability and that it formed part of the smuggling scheme as well.  But there is simply no evidence to support such serious allegations. 

13.  To substantiate her counterclaim, the defendant needs to prove that the parties had orally agreed on a 3% commission as alleged.  That she has failed to do because of her absence.  Further, her story does not sit well with the documentary evidence because nothing there shows that the plaintiff had ever paid her a 3% commission over the years as alleged. 

14.  At a first glance, the fact that the plaintiff had agreed to engage the defendant to receive monies for his customers in Hong Kong may sound a little odd.  But he has already explained the reasons for such arrangement in his evidence.  In the absence of any evidence to contradict him, I accept his explanation.  He has also dealt with the IRD’s action in his supplemental witness statement.  I accept that the IRD’s action had nothing to do with the alleged concealment of tax liability under the Agreement as alleged by the defendant. 

Conclusion

15.  For the above reasons, I find that the plaintiff has proved his claim.  I accordingly enter judgment for the plaintiff for the sum of HK$4,340,549 with interest at the judgment rate from the date of writ until payment.  The defendant’s counterclaim is dismissed.

16.  Costs should follow the event.  I further order the defendant to pay the plaintiff costs of the entire action including all the costs reserved, to be taxed if not agreed.