XCHRX LEE SOW KENG JANET v. LINKWATERS INVESTMENT LTD. t/a KELLY MCKENZIE

HCA11828/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.11828 OF 1998

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J U D G M E N T

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1. The plaintiff applies for judgment under Orders 14 and 27 for the sums of $153,985.00 and $34,789.43 which she says she paid on behalf of the defendant, her then employer, towards the purchase of a RAV 4 motor car, or alternatively for a declaration that the car be transferred to her and registered in her name.

2. The defendant, a limited company, is now unrepresented. Its solicitors obtained leave to cease to act on 7 September 2000. Mr Li who says he is a director, appears, but the defendant has not made the necessary application under Order 12, rule 2A of the Rules of the High Court to be represented by a director. Mr Li tells me that his company cannot afford representation, but given the terms of Order 12, rule 2A, it seems to me that I have to treat the defendant as absent and deal with this matter on that basis.

3. According to the plaintiff, the terms of her employment provided for her to have the free use of this car. She had, on behalf of the defendant, paid a part payment and a monthly instalment for the car.

4. In her Statement of Claim, the plaintiff pleaded, inter alia, that she was to have the unlimited use of the car provided by the defendant. She also claimed repayment of the sums with which we are concerned here, though she did not give any specification of any agreement between herself and the defendant for her to pay these sums on its behalf.

5. The defendant pleaded in its original Defence that it had lent the plaintiff $100,000 to buy the car. It was to be registered in the name of the defendant; the plaintiff should have the use of it; and when she paid back the loan, the car would be transferred to her. However, no counterclaim for repayment of the loan was included in the original Defence.

6. The defendant attempted to amend the Defence to include a claim for the return of the car which is in the plaintiff's possession, and for repayment of the loan of $100,000 and a further loan of $10,000. This second loan does not seem to have anything to do with the car. The attempt to amend the Defence was, however, unsuccessful. A series of orders in relation to the defendant's summons ended with its being dismissed for want of prosecution on 12 September 2000.

7. The plaintiff says that the effect of this is that the loan is a dead issue. The defendant cannot rely on it because, although the loan is pleaded, there is before the court no claim for its repayment.

8. The plaintiff further says, as I understand it, that the effect of the pleadings, as they stand, is that the plaintiff claims $188,774.43 for the car; the defendant replies by saying that of that figure, $100,000 belongs to it, as being a loan and the balance is the subject of a denial. The defendant cannot now succeed on the point of the loan, in other words, it cannot now establish that the $100,000 belongs to it. The defendant must be taken by implication as having admitted that the plaintiff paid out $100,000 towards the defendant's car, but cannot establish its claim to the money; therefore, it must be taken as the plaintiff's own money; and the defendant is liable to pay it back.

9. This is a rather tortuous argument, but it seems to me that it must be right. We do not know what the total price was paid for the car, but it is not in dispute that it is registered to the defendant and it seems that there is no denial that the defendant paid $188,774.43 towards it. The dispute is whether she paid all or any of it on behalf of the defendant. If the defendant is barred from establishing that the $100,000 belonged to it, it must follow that the plaintiff contributed at least $100,000 to the purchase of the defendant's car.

10. The other $10,000 which the defendant cannot now claim, following the dismissal of the application to amend its Defence, had nothing to do with the car, so it does not come into the equation.

11. There will be part judgment for the plaintiff for $100,000 with interest thereon, from the date of the writ to the date hereof, at the best lending rate plus 1%, and thereafter at the judgment rate. The costs of and occasioned by this application be to the plaintiff in any event. Mr Li is advised to obtain representation or apply in terms of Order 12, rule 2A as soon as possible.