XCHRX FUNG YUEN ENGINEERING CO. LTD. v. JET WELL SERVICES LTD. t/a TAI CHUNG LOK FAST FOOD

HCA 1831/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1831 OF 2000

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J U D G M E N T

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1. The Plaintiff is a limited company engaged in the decoration business.

2. The Defendant is a limited company that operates a business called Tai Chung Lok Fast Food.

3. It emerges from the documents produced that there are and/or were three restaurants all known as Tai Chung Lok Fast Food as follows :-

(a) Tai Chung Lok Fast Food located at Shops 103, 108, 109, 110 Fanling Centre, Phase II, Ground Floor, Fanling ("Fanling Centre").

This business was operated by Jet Well Services Limited (the Defendant) as evidenced by its application for Business Registration on 24 August 1992.

(b) Tai Chung Lok Fast Food located at Shop 28, Ground Floor, 29-35 Ting Kok Road, Wing Fai Garden, Tai Po ("Ting Kok"). This business was operated by Kamfaith International Limited ("Kamfaith") as evidenced by its application for registration of a branch business on 13 March 1996.

(c) Tai Chung Lok Fast Food located at Ground Floor, 61-62 Tai Po Plaza, Tai Po ("Tai Po Plaza").

This business was operated by WS Services Limited ("WS Services") as evidenced by its Business Registration Certificate for the period 24/9/98 - 24/9/99 and the Branch Business Registration Certificate for the same period.

Henbase Development Limited ("Henbase"), a company incorporated on 20 September 1999, was issued with a Business Registration Certificate for the same restaurant on 1 December 1999.

4. All the applications for business registration for the Defendant (Jet Well Services Limited), Kamfaith and Henbase were all made by Hung Kam Fai. No application documents for WS Services have been produced.

5. Hung Kam Fai and Li Siu Mui (whom I am told by counsel is the wife of Hung Kam Fai) are directors of the Defendant, Kamfaith and Henbase. They are also shareholders of the Defendant and Kamfaith. No list of shareholders for Henbase has been produced.

6. Li Siu Mui, in her affirmation filed on 1 August 2000 described the position in relation to the various businesses all called Tai Chung Lok Fast Food as follows :-

(a) ".... it is the fact that the various branches of the said Tai Chung Lok Fast Food are owned by different corporate entities."

(b) ".... for convenient purpose it is our normal practice that we simply mention the name of Tai Chung Lok Fast Food together with its address instead of the corporate which owned the said Tai Chung Lok Fast Food at the said address."

7. Mr Yeung Siu Chung, who filed an affirmation on 8 May 2000 describes his position thus :-

"I am the business manager of Tai Chung Lok Fast Food at Ground Floor, 61-62 Tai Po Plaza, Tai Po, New Territories, Hong Kong and at Ground Floor, No. 28 Ting Kok Road, Tai Po, New Territories, Hong Kong."

8. In October 1999 the Plaintiff was approached by Hung Kam Fai and Yeung Siu Chung to perform certain work for Tai Chung Lok Fast Food at Ting Kok Road and Tai Po Plaza. The work was completed in about mid-November 1999. It is not in dispute that during that time both Hung Kam Fai and Yeung Siu Chung gave directions and instructions to the Plaintiff on the work to be done.

9. Prior to the commencement of work, the Plaintiff issued two quotations in respect of the work to be done on 26 October 1999 and 18 November 1999. Both were addressed to "Tai Chung Lok Fast Food" and marked "Attention : Mr Hung Kam Fai". Both quotations were subsequently confirmed and accepted by Yeung Siu Chung.

10. In addition, on 21 April 1999 the Provisional Regional Council wrote to Hung Kam Fai at theTing Lok Road premises in respect of the licensing arrangements for Ting Kok Road. The letter referred to inspections of Ting Kok Road in August 1996 and March 1999 and urged compliance with regulations. Yeung Siu Chung instructed the Plaintiff to deal with this matter also and the Plaintiff secured a certificate of compliance on 7 November 1999.

11. Hung Kam Fai and Li Siu Mui then issued a cheque on 8 November 1999 for $100,000.00 in favour of the Plaintiff as a deposit for the work to be carried out at Ting Kok Road and Tai Po Plaza.

12. Between 22 November 1999 and 11 January 2000 the Plaintiff issued five invoices in respect of the work carried out at Ting Kok Road and Tai Po Plaza. All the invoices were issued to "Tai Chung Lok Fast Food" and marked "Attention : Mr Hung Kam Fai". This is the basis of the Plaintiff's claim in this action.

13. On 22 November 1999 (the date of the Plaintiff's invoice in respect of the gas compliance work at Ting Kok Road) the Defendant wrote to the Plaintiff seeking financial contribution by advertising or promotional material for Ting Kok Road. The letter bore the letterhead "Tai Chung Lok Fast Food" and the address "Shop 103, G/F., Phase II Fanling Centre, Fanling, N.T.". It was addressed to Miss Sze at the Plaintiff, the person in charge of the work carried out by the Plaintiff at Ting Kok Road. The letter states inter alia "In early December 1999, the sub-branch of our company (Tai Chung Lok Fast Food) at Nos 61-62, Tai Po Plaza will re-open in a new feature after decoration".

14. On 22 December 1999 the Defendant again wrote to the Plaintiff this time asking for a donation to the Defendant's staff annual dinner. The letter bore the same letterhead as the previous one.

15. Subsequently, Miss Cheung Mei Hing, the secretary of the Defendant filed an affirmation seeking to explain the first letter. She said that she was instructed to write the letter by Li Siu Mui whom she describes as "of Tai Chung Lok Fast Food located at 61-62 Tai Po Plaza" i.e. the business owned by Henbase which allegedly has no connection with the Defendant.

16. Miss Cheung says that she was instructed to write in regard to "the new branch of Tai Chung Lok Fast Food located at the said address". She says that she then mistakenly referred to the business in the letter as "the sub-branch of our Company (Tai Chung Lok Fast Food) at Nos 61-62, Tai Po Plaza". She further says that she "mistakenly" used the Defendant's chop as the sender of the letter.

17. There is no explanation from the Defendant as to the reason for the second letter sent to the Plaintiff referred to above. That letter, bearing the chop of the Defendant, signed by Hung Kam Fai and written on the stationary of Tai Chung Lok Fast Food at Fanling Centre seeks a donation for the staff of the Defendant, a company which the Defendant is at pains to show is wholly unknown to and unconnected to the Plaintiff.

18. It is worthwhile noting here that Hung Kam Fai asserts in his first and second affirmations that there is no connection between the Defendant and Kamfaith or Henbase.

(a) In his first affirmation filed on 7 April 2000 he says "After my solicitors conducted a business registration search, I have discovered that the said Tai Chung Lok Fast Food at the address of Shop No. 28, Ground Floor, Nos 29-35 Ting Kok Road, Tai Po is owned by a corporate entity known as Kamfaith International Limited and the said Tai Chung Lok Fast Food at the address of Ground Floor, Nos 61-62 Tai Po Plaza is owned by a corporate entity known as Henbase Development Limited respectively."

(b) In his second affirmation also field on 7 April 2000 he says "I have also conducted a business registration search and discovered that the said Tai Chung Lok Fast Food at the address of Shop No. 28, Ground Floor, Nos 29-35 Ting Kok Road, Tai Po is owned by a corporate entity known as Kamfaith International Limited and the said Tai Chung Lok Fast Food at the address of Ground Floor, Nos 61-62 Tai Po Plaza, Tai Po is owned by a corporate entity known as Henbase Development Limited respectively".

19. At no point in either of those affirmations did Hung Kam Fai mention that he and his wife are the sole directors and shareholders of Kamfaith and Henbase. He also failed to mention that he had personally applied for the Business Registration of each of the Tai Chung Lok Fast Food restaurants owned by Kamfaith and Henbase.

20. The Plaintiff bases its claim upon work done and claims quantum meruit.

21. The Defendant says that it made no request for the work and had no agreement of any kind with the Plaintiff. In the alternative it alleges overcharging on the invoices.

22. The Plaintiff applied for summary judgment under Order 14. The Defendant applied for the claim to be struck out under Order 18. The two applications were heard together before Master Kwan who entered judgment for the Plaintiff. The Defendant now appeals against the Master's judgment and Order.

23. At the hearing of the appeal the Defendant sought and was granted leave to rely upon three subsequent affirmations.

24. It is clear from the evidence adduced on behalf of the Defendant that all persons involved treated the various Tai Chung Lok Fast Food restaurants as one business organisation albeit with separate corporate entities holding each of the restaurants.

25. Hung Kam Fai and his wife Li Siu Mui were directors and shareholders of all the three companies. Yeung Siu Chung was the business manager of the various businesses. Even Miss Cheung was used to do work on behalf of companies other than the Defendant. The Defendant, Kamfaith and Henbase are inexorably linked to each other.

26. The Defendant's case is that any claim must be based upon a contract between the parties and that in the absence of such a contract the Defendant cannot be liable. The claim of overcharging arises only from an affirmation presented at this hearing which was not argued before the Master nor pleaded in the Defence.

27. It is clear that the work was carried out on the instructions of Hung Kam Fai and Yeung Siu Chung for Tai Chung Lok Fast Food. The evidence of the witnesses on behalf of the Defendant is unconvincing and unreliable.

28. The Defendant's own exhibits show that the first Tai Chung Lok Fast Food restaurant was operated by the Defendant at Fanling Centre as from 1992.

29. The second Tai Chung Lok Fast Food restaurant was operated by Kamfaith at Ting Kok Road. The application to register the business, made by Hung Kam Fai as a director of Kamfaith, was for the registration of a branch business in 1996.

30. The third Tai Chung Lok Fast Food restaurant was operated by WS Services Limited. The business was registered as a branch business in and the Certificate exhibited runs from 24 September 1998 - 24 September 1999.

31. The third restaurant was transferred to Henbase on 1 December 1999, the company having been incorporated only on 20 September 1999. Henbase similarly registered the business as a branch business.

32. I am satisfied that both the Ting Kok Road and Tai Po Plaza businesses were branches of the Defendant and that all three businesses were owned, managed and controlled by Hung Kam Fai.

33. I am satisfied that the Defendant, by its servant and agent Hung Kam Fai agreed to pay the amounts in the invoices in respect of the work done.

34. On the evidence before me the Defendant has failed to show any basis for its bare assertion of over-charging for the work done, an allegation that is not even pleaded in its Defence.

35. In all the circumstances the appeal is dismissed. I will make an order nisi as to costs in favour of the Plaintiff.