SMARTIE PRODUCTION CO v. COVERMAGAZINE HK LTD

DCCJ 995/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 995 OF 2011

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

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

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

JUDGMENT

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

Introduction

1. The plaintiff’s claim is for HK$250,000 being the amount of 2 cheques drawn by the defendant and made payable to the plaintiff.  This is the trial of this action.  The defendant’s solicitors ceased to act shortly before the commencement of the trial and the defendant was absent.

Background

2. It is common ground that the 2 cheques in question were dated 28 February 2011 and were in the sum of HK$125,000 each.  They were presented for payment on 1 March 2011 and were dishonoured with reason marked “payment countermanded by the drawer”.

3. The plaintiff was a partnership and Mr Frankie Au (“Mr Au”) was the partner responsible for its business.  The plaintiff’s case is that:

(1) In June 2010, Mr Au was approached by Ms Margaret Fan (“Ms Fan”), the sole director and shareholder of the defendant.  Ms Fan invited Mr Au to form a partnership business for projects which involved both the World Expo 2010 and an exhibition at Pacific Place in Hong Kong.

(2) An agreement was eventually made between Ms Fan on behalf of a company known as Violet-Media Company Limited (“VM”) and another company known as i-Elite Company Limited (“IE”) on one part and Mr Au on behalf of the plaintiff on the other.  Under this agreement, the plaintiff was responsible for technical production and support for the projects and VM and IE would mainly be responsible for soliciting sponsorship and to provide “contents” for the projects.

(3) After the completion of the projects, Ms Fan had refused to settle or disclose the income derived from the projects.  The relevant accounts were not provided even after repeated chasers.

(4) In January 2011, the parties finally came to an agreement where Ms Fan agreed on behalf of VM and IE that a total sum of HK$350,000 was to be paid to the plaintiff by 3 cheques.  The first cheque was in the sum of HK$100,000 and the other two in the sum of HK$125,000 each.  The sum of HK$350,000 was said to represent the costs incurred by the plaintiff in the projects.

(5) The first cheque in the sum of HK$100,000 was represented for payment but was dishonoured.  This sum was eventually settled by VE and/or IE.

(6) The HK$ 250,000 covered by the 2 other cheques remains outstanding.

4. The defendant does not dispute the existence of the partnership between VE/IE and the plaintiff. It is however suggested that the partnership incurred a loss in the Shanghai World Expo project and no profit was attributable to the plaintiff. 

5. In respect of the cheques in question, the defendant asserted that they were given to the plaintiff as a result of threats and intimidation caused by Mr Au and Andy Kwan when they visited the defendant’s office on 31 January 2011.  The two cheques were said to have been drawn involuntarily with the sole intention of making Mr Au and Andy Kwan to leave the defendant’s office on the day in question as they were affecting the operation of the defendant.

Witnesses

6. Two witnesses were called by the plaintiff.  Mr Au’s statement explained the background and the events leading to the presentation of the two cheques.  The alleged threats and intimidation were denied by him.

7. In addition to Mr Au, the plaintiff also called a Ms Tsui（徐逸樺）who was a former employee of the defendant. She was working in the office of the defendant in January 2011 and is able to confirm that:-

(i) Mr Au did request for documents and accounts in respect of the projects but they were ignored by Ms Fan;

(ii) Mr Au and Andy Kwan did visit the defendant’s office in January 2011 but there was no threat or intimidation.  The operation of the defendant was not affected by the visit.

Discussion

8. Having considered the evidence adduced by the plaintiff, I accept the evidence of both Mr Au and Ms Tsui.  Further, as Ms Fan chose not to appear at trial, there was nothing to contradict the testimony of the plaintiff’s witnesses.

9. In any event, I also find it difficult to believe that Ms Fan would have given the plaintiff the 2 cheques just because of the alleged intimidation and threats.  She could have reported the matter to the police.  In addition, there was also no explanation in respect of the other cheque in the sum of HK$100,000.

Order

10. By reason of the aforesaid, I make the following orders:

(1) Judgment for the plaintiff against the defendant in the sum of HK$250,000.

(2) Interest on the said sum at 8% per annum pursuant to section 57(a)(ii) of the Bills of Exchange Ordinance (Cap 19) from the date of dishonor to the date of judgment and thereafter at judgment rate until full payment.

(3) Costs of the action be paid by the defendant to the plaintiff to be taxed if not agreed.