IEC MAN LONG AND ANOTHER v. YUEN SAU HAN DIANA

HCA 9429/1995

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 9429 OF 1995

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J U D G M E N T

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1. There are two plaintiffs in this case. The 1st Plaintiff is Mr Iec Man Long (whom I will call "Mr Iec"). The 2nd Plaintiff is a limited company, Seasons Enterprises Limited (which I will call "Seasons"). Mr Iec is and was at all material times Seasons' Managing Director. The Defendant is Miss Yuen Sau Han, Diana (whom I will call "Miss Yuen"). When the case was called on for trial at 10:00 a.m. on 13 December 1999, Mr Iec and Seasons were present by counsel and solicitors representing them both. Miss Yuen, however, was not present.

2. My clerk contacted Miss Yuen on the telephone. Miss Yuen told her that she would not attend court and would leave it to the court to deal with the case in her absence. Mr Iec and Seasons then proceeded to present their cases.

3. Mr Iec's claim against Miss Yuen is for $10 million on two cheques each dated 31 August 1995; each for $5 million; each drawn by her in his favour; and each dishonoured upon presentation because she had countermanded payment on them.

4. Seasons' claim is for $9,818,400.00 as the price of goods being: 450 cartons at $5,400.00 per carton totalling $2,430,000.00 delivered on 27 July 1995; 200 cartons at $5,640.00 per carton totalling $1,128,000.00 delivered on 11 August 1995; and 1,110 cartons at $5,640.00 per carton totalling $6,260,400.00 delivered on 15 August 1995. These three sums of $2,430,000.00, $1,128,000.00 and $6,260,400.00 add up to the total of $9,818,400.00 claimed by Seasons.

5. Mr Iec gave evidence in support of his own claim and Seasons' claim. His evidence was to the following effect. Miss Yuen used to be the Financial Director of Seagram Martell (Duty Free) Limited which I will call "Seagram Martell". As from early 1994, Seasons was Seagram Martell's sole agent for selling Martell brandy in Mainland China and Macau. There came a time when Miss Yuen left Seagram Martell and entered into business transactions with Seasons on her own account. It was pursuant to one of these transactions that the $9,818,400.00 worth of brandy for the price of which Seasons claims against her in the present case was sold and delivered by it to her.

6. As for the two cheques totalling $10 million upon which Mr Iec himself sues, they were given by way of security for the payment of the brandy which I have just mentioned. The agreement was that the two cheques would be presented for payment in the event that such brandy was not paid for following delivery. Such brandy was indeed delivered on the dates which I have mentioned but was not paid for.

7. Miss Yuen had purported to make partial payment for the brandy by way of a cheque drawn by a company named Shing Hing Enterprises Limited for $2.7 million in favour of a company named Lufon Limited which was an associate company of Seasons and which, unlike Seasons, had a bank account in Hong Kong. This cheque, however, was dishonoured upon presentation. Miss Yuen failed to pay for the brandy. The two cheques for $5 million each were then presented for payment and were also dishonoured upon presentation, she having countermanded payment of the same.

8. Delivery of the brandy had been made to Miss Yuen by permitting the person whom she nominated, a Mr Leddy Cho, to collect the same on her behalf from the warehouse where the same was lying. Such brandy was collected on the three dates I have mentioned and in quantities I have mentioned. There have been produced as exhibits P3, P4 and P6 respectively three invoices, each signed by the person taking delivery, relating to the deliveries on the three dates which I have mentioned.

9. According to Miss Yuen's pleadings, the affirmation which she filed when resisting summary judgment and the witness statements which she later filed, the position was as follows. There was no commercial transaction at all. The two cheques of $5 million each were given by her to Mr Iec to help him in his financial difficulties. She wanted to help him because they were having an affair. Even though she knew that he was married, she later discovered that his relationship between him and his wife was better than she had hoped and expected. She therefore countermanded the cheques.

10. Mr Iec admits that there had been an affair between Miss Yuen and himself but says that there were also commercial dealings between Miss Yuen and his company, Seasons. There were, he said, two previous transactions plus the dealings the subject-matter of this action.

11. Naturally Miss Yuen's absence, although voluntarily, has caused me to scrutinise Mr Iec's and Seasons' claim with particular care. Having so scrutinised the claims, I am satisfied that the facts are as Mr Iec has testified. He gave his evidence in a manner which I find convincing and I also consider his and Seasons' account more inherently probable than the one set out in Miss Yuen's pleadings, affirmation and witness statements.

12. There were two other witnesses in addition of Mr Iec. One was a Mr Ieong Kun Man (whom I will call "Mr Ieong") who was another director of Seasons. The other was a Mr Ting Sui Sing (whom I will call "Mr Ting") who was a director of Lufon Limited. Both of these two men gave evidence in accordance with their witness statements. I find them credible and accept their evidence which I do not propose to set out at length. Mr Ieong's evidence includes evidence of his personal dealings with Miss Yuen in regard to the 11 August 1995 delivery and the 15 August 1995 delivery. Mr Ting's evidence includes evidence of receiving the cheque dated 21 August 1995 for $2.7 million in favour of Lufon Limited from a lady who gave her name as Yuen Sau Han.

13. In relation to all the Plaintiffs evidence I have of course disregarded all hearsay.

14. I find that Seasons had indeed sold and delivered to Miss Yuen $9,818,400.00 worth of brandy for which she had made no payment.

15. If judgment were given to Mr Iec on the two cheques for the total of $10 million, $181,600.00 would have to be deducted to take into account the fact that the total price of the brandy came to only $9,818,400.00 rather than $10 million, and then he would hold the award of $9,818,400.00 as agent or on trust for Seasons.

16. If judgment were given for Seasons, no such complications would arise. It would simply be a matter of giving them judgment for $9,818,400.00 as the price of goods sold and delivered. That is, in my judgment, the correct course.

17. There will be judgment for Seasons against Miss Yuen for $9,818,400.00 with interest at the rate of 8.5% per annum on the sum of $2,430,000.00 from 27 July 1995 to today; on the sum of $1,128,000.00 from 11 August 1995 to today; and on the sum of $6,260,400.00 from 15 August 1995 to today. Interest thereafter will be at the judgment rate until payment. There will also be an award to Seasons against Miss Yuen for its costs to be taxed. There will be no award in favour of Mr Iec himself and there will be no order as to costs as between him and Miss Yuen.