CHEUNG YIU BUN t/a C & S v. HO KAI CHEONG SAMSON

DCCJ 46/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 46 OF 2001

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JUDGMENT

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1. In this action, the Plaintiff claims against the Defendant for goods sold and delivered in the sum of HK$ 108,438 and the Defendant counter-claims for the return of valuable cards or value to be assessed.

2. The transaction in dispute was alleged by the Plaintiff to have happened on September 8 2000 when the Defendant came to the Plaintiff's shop and picked up 250 boxes of cards together with 2 cases of card box worth HK$ 108,438, the Defendant was unable to pay for it and was asked by the Plaintiff to sign on an invoice to acknowledge the transaction. The Defense alleged that the defendant, though signed on it, had never received the goods and further pleaded non est factum in respect of the invoice. As far as the counter-claim is concerned, the Defense alleged that in November 2000, the defendant had given the Plaintiff two autographed playing cards of basketball star Michael Jordan for sale at the shop, the value of which was estimated to be several ten-thousand of US dollars but the Plaintiff never returned the same to him. The Plaintiff denied this ever happened.

The Evidence of Plaintiff's Witness

PW1- the Plaintiff-Cheung Yiu Bun

3. PW1 was the sole proprietor of a shop called C&S which sold sports playing cards. The Defendant had been a regular customer since 1995 and made purchases up to 2 million over the past few years before the shop closed down in early part of year 2001. The Defendant was a sports card fanatic . In 1998, the Defendant had mentioned to PW1 his collection of a Michael Jordan's autographed card which was worth well over HK$ 100,000. When he made purchases, he would pay by cash, credit card or cheque drawn by one Kuokon Security limited of which he was a director and shareholder.

4. The defendant usually spent about HK$ 20,000 to HK$ 30,000 monthly on average at his shop. In year 2000, for those occasions the Defendant paid by cheques, the records showed as follows:

Date	Amount HK$
29/3/2000	19,156
6/4/2000	19,743
26/4/2000	23,626
29/4/2000	24,930
26/6/2000	33,831
2/11/2000	20,463

The cheques for the last two transactions on the list above were bounced upon presentation, the Plaintiff had to go to the Court to get redress and eventually obtained judgment in January 2001.

5. On September 8 2000, the Plaintiff and his assistant, Wong Tak Keung(DW2), were at the shop. At around 1:30 pm, the Defendant came in and asked the Plaintiff to give him boxes of card for him to look at. Each box contained 24 packs of card and each pack has about 5 to 6 cards. The Defendant ripped open each and every pack in his shop until evening. By that time, the defendant had unpacked 250 boxes and also bought 240 empty card holders, the total value of the goods amounted to HK$ 108,438. When asked for payment, the Defendant said that he did not have his cheque book with him and his credit card might not have the required limit, in order not to upset a regular customer, the Plaintiff asked him to sign on an invoice (see P.110) which he did. The defendant signed next to the words" Goods received, whole amount unpaid".

6. After this transaction, the Defendant still came to his shop and bought goods. Whenever the Plaintiff pressed for the payment of the transaction on September 8, the Defendant would say that he would pay him soon. The Plaintiff was not aware of the Defendant's mental problem at any time during his dealings with him. The defendant had never given any card to him to sell at his shop. PW1 had never met the Defendant's father.

PW2- Wong Tak Keung

7. PW2 was employed by the Plaintiff as a shop assistant as from December 1996 up to March 2001. The Defendant used to be a regular customer and sometimes came with his wife to the shop. The Defendant was a crazy sports stars cards collector, he told PW2 in 1998 that he had spent HK$ 200,000 in a shop in Tsuen Wan for a Michael Jordan autographed card, the value of which was estimated to be more than HK$ 100,000.

8. On September 8 2000, the Defendant came to the Plaintiff's shop in the morning and asked PW1 to give him cartons of cards to look at. The defendant ripped open each and every pack and did that until evening, by that time he had opened 250 boxes of cards. He also bought 2 cases of empty card holders. When asked for the payment, the Defendant said that he would settle it within 2 weeks and signed on an invoice to acknowledge the same.

9. When PW2 was married on September 19 2000, he invited the Defendant to be one of his men and the Defendant was kind enough to let him use his Mercedes as the bridal car. The Defendant also attended his wedding banquet in the evening. PW2 was not aware of any mental disorder the Defendant was suffering. PW2 had never met the Defendant's father, nor did he received any Michael Jordan autographed cards from the Defendant for sale at the shop.

THE EVIDENCE OF DEFENDANT'S WITNESS

DW1- Dr. Lo Chun Wai

10. DW1 is a psychiatrist who first saw the Defendant on November 24 2000, he diagnosed the Defendant to be suffering from Bipolar Disorder. This is a mental disorder characterized by an abnormally elevated, expansive and irritable mood, with the presence of inflated self-esteem, decreased need for sleep, pressure of speech, flight of ideas and excessive involvement in pleasurable activities. His opinion of the Defendant was that he probably knew what he was doing, but was not capable of making a good judgment.

DW2- Ho Wai Hung Guardian at litem

11. DW2 is the father of the Defendant. The Defendant has the hobby of collecting NBA stars playing cards and possessed a number of such cards which according to the Defendant were of great value. The Defendant told DW2 that he had a friend running a business in Mong Kok selling such playing cards and from time to time, he would give his friend cards to sell in his shop and the friend would charge a commission for that.

12. In or about the end of year 1998, the Defendant told DW2 that he was lucky enough to have got two Michael Jordan's autographed cards and the estimated value of which was over tens of thousands of US dollars. In early November 2000, DW2 noticed that the Defendant might have some mental problem, he then searched the Defendant's belongings and found some receipts issued by the Plaintiff. Upon questioning, the Defendant said that he spent thousands of dollars in the Plaintiff's shop for the cards. The Defendant also told him that he had given the Michael Jordan's autographed cards to the Plaintiff for sale in his shop but the Plaintiff refused to give him back the cards.

13. In or about December 2000, DW2 went down to the shop and met a gentleman who claimed himself to be the boss, DW2 demanded the return of the cards, but the man admitted that the Defendant had given the cards for selling, however, they were used as a set-off against the debt the Defendant owed him for the defendant had bought goods for more than HK$ 100,000 without payment. DW2 said that he would report the matter to the police for his son was insane and suspected that someone had cheated him. The man then said that he knew the Defendant being insane ages ago and DW2 got no one to blame but himself for he got a stupid son.

ASSESSMENT OF EVIDENCE

14. The issue in the present case centers on the dealings between the Plaintiff and the Defendant. For some reasons, however, the Defendant has not come to give evidence, the Court was left with the only evidence from the Plaintiff. The Defense main attack of the Plaintiff's evidence was on the unreasonableness of the disputed transaction on September 8. The Defense said that given 5 to 6 hours the Defendant spent in the shop, however fast, he could not have ripped open and checked 250 boxes of cards- that was physically impossible. Moreover, the Defendant at that time still owed the Plaintiff HK$ 33,000 odd dollars in respect of a bounced cheque issued by the Defendant for a previous transaction, the Plaintiff would be unlikely to have allowed the defendant to open so many boxes when he should doubt the Defendant's ability to pay.

15. This is not simply a case of one word against the other. The Plaintiff had produced an invoice as proof of the transaction in question on which the Defendant had appended his signature to the words" Goods received, whole amount unpaid", the Defense did not dispute the authenticity of the signature but pleaded non est factum instead and in the alternative, the Defendant had not received any goods for the transaction.

Non Est Factum

16. The plea of non est factum could not be available to anyone who signed without taking the trouble to find out at least the general effect of the document. Nor could it be available to a person whose mistake was really a mistake as to the legal effect of the document. There must be a radical or fundamental difference between what he signed and what he thought he was signing. ( per Lord Reid in Saunders v. Anglia Building Society HL 1970.) The Defense in the present case adduced medical evidence of mental disability on the part of the Defendant, but according to the evidence that the Defendant was first seen by the psychiatrist DW1 about 10 weeks after the alleged transaction, DW1 could only say that history revealed that the Defendant began to exhibit abnormal mental symptoms in the middle of year 2000, but it was not clear from the evidence whether this was simply told by the Defendant himself or from some medical report of other psychiatrist who had seen the Defendant before. I believe it is more likely to be the former as the evidence suggested that the defendant going to see a psychiatrist for the first time was in November 2000- that was when the Defendant consulted DW1 about his mental condition. Moreover, in DW1's opinion, the Defendant probably knew what he was doing, just that he could not make good judgment.

LAIBILITY OF MENTALLY DISORDERED PERSONS GENERALLY

17. In CHITTY ON CONTRACT Vol. One 8-067, it deals with the liability generally of mentally disordered persons: " In the case of contracts other than for necessaries, the general rule is that a mentally disordered person is bound by his contract unless he can show that owing to his mental condition he did not understand what he was doing, and further that the other party was aware of this incapacity. But if these two conditions are satisfied, the contract is voidable at his option." On the evidence available, however, I cannot conclude that the Defendant was harbouring under some kind of mental disability at the time of signing the invoice so as to render him not understanding what he was doing or that the Plaintiff was aware of his condition at the time.

UNREASONABLENESS OF THE TRANSACTION

18. I have also considered the point of unreasonableness as raised by the Defense. Firstly, the Defendant is an experienced collector, as the evidence suggests, he ripped open the packets to look for the rare limited edition cards, these valuable cards were thicker in size and had color sides which distinguished them from the ordinary ones, they could easily be seen once the packet was opened, I do not find it impossible for the Defendant to go through 6,000 packets in 5 to 6 hours. Secondly, the Plaintiff had produced documents to show previous dealings with the Defendant, and in some cases, the amount of the transactions ran up to HK$ 20,000 to HK$ 30,000. Indeed, at the time of the transaction on September 8, the Defendant owed the Plaintiff a sum of HK$ 33,000 odd dollars for a previous transaction, the Plaintiff was able to recover it from the Defendant by a court action. The evidence showed that the Defendant and the Plaintiff had engaged in persistent commercial dealings all along well before and after the disputed transaction in September. In light of their dealings, in my judgment, it is more likely they had transacted on September 8 in the way as described by the Plaintiff.

19. As far as the Michael Jordan's autographed cards were concerned, there was no direct evidence from the Defendant to tell me that he did give the Plaintiff the cards for sale, the circumstances of how this happened and what the terms were. All this evidence was lacking in the case. What DW2 said was hearsay, he did not have personal knowledge of the alleged transaction, nor did he have any documentary proof which suggested the existence of such a deal. His confrontation with a man in the Plaintiff's shop and his description of the man's admission of having taken his son's cards all seemed to be very improbable, I don't believe that someone who planned to cheat the Defendant would make such an admission. On the other hand, it was just too easy for DW2 to allege that someone had made such an admission to him without further proof; having considered all the evidence, I don't find any factual basis for the alleged admission in the case.

CONCLUSION

20. Based on the reasons I stated above, I find that the plea of non est factum has not been established and further that the Defendant had received the goods as mentioned on the invoice without payment. The orders that I make are as follows:

(a)-judgment for the Plaintiff for HK$ 108,438;

(b)-interest thereon at the rate of 12.5% per annum from the date of writ to date of judgment and thereafter at judgment rate until payment;

(c)-Defendant's counter-claim be dismissed.

21. The Plaintiff's Counsel asked for certificate of counsel, but I don't think this case involved complex issues, whether in law or in fact, and the amount claimed is less than HK$ 150,000, I therefore refuse to grant such certificate. Costs of this action be to the Plaintiff to be taxed if not agreed. I shall make it an order nisi, such order will become absolute at the expiration of 14 days from the date of handing down judgment.