上海贺立国际贸易有限公司东莞分公司 v. CHAN SAI CHEUNG

DCCJ 1882/2016

[2018] HKDC 337

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1882 OF 2016

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DECISION

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1.  This is an application under Order 14 of the Rules of the District Court for summary judgment against the Defendant.

The Plaintiff’s case

2.  The Defendant was the legal representative and president of a company called DG Jusheng Plastic and Electronic Products Ltd. (“the Company”).  In 2015, the Plaintiff commenced an action in Guangdong Province Dongguan City Second Intermediate People’s Court against the Company for outstanding price for goods sold and delivered.  By a Civil Reconciliatory Statement endorsed by Guangdong Province Dongguan City Second Intermediate People’s Court dated 8 April 2015, the Company agreed to settle the Plaintiff’s claim by paying RMB778,916.97 to the Plaintiff.

3.  In breach of the Civil Reconciliatory Statement, the Company failed to make payment.  As a result, the Plaintiff obtained an order from the People’s court and had certain assets and bank accounts of the Company frozen.

4.  On 7 September, the Plaintiff and the Defendant entered into a settlement agreement (“the Settlement Agreement”) by which the Defendant agreed, in consideration of the Plaintiff’s agreeing to accept a lesser sum of RMB500,000 and allow the Company to pay by way of instalments, to personally guarantee payment by the Company (“the Guarantee”).  The Company duly paid the first instalment of RMB50,000.  However, it failed to make any further payment.  The Plaintiff then commenced the present action against the Defendant for the unpaid guaranteed sum.

The Defence

5.  The Defendant does not dispute the Settlement Agreement and the Guarantee.  In fact, he expressly “admits and pleads that by the Settlement Agreement and the Guarantee (“the said 2 Agreements”) made between the Plaintiff and the Defendant contained in or to be inferred from the said 2 Agreements dated 7^th day of September 2015, they agreed to settle the dispute in Mainland China” (§3, Defence).  The only issues raised in the Defence are that the Guarantee lacked consideration and was subject to the exclusive jurisdiction of the PRC court.

6.  In his affirmation in opposition, the Defendant alleges that the Guarantee was the result of duress caused by some unknown persons who frequently gathered at the entrance of the Company.  He signed the Guarantee in the hope that the nuisance and inconvenience caused by those unknown persons would go away.

Analysis

7.  The law relating to summary judgment is well known and needs not be repeated.  Suffice it to say that it is for the defendant to show a defence upon merits.  Mere assertions are not enough.  The defendant must identify the issues and adduce credible evidence to show that the issues ought to be tried.

8.  In so far as the alleged duress is concerned, it should be noted that it is not pleaded in the Defence.  Nor was it ever mentioned in any of the letters from the Defendant to the Plaintiff’s solicitors.  It appears to be nothing but a recent fabrication made in an attempt to avoid judgment.  In any event, it is trite law that where it is sought to avoid a contract on the ground of duress exercised not by the party seeking to enforce the contract but by some third person, the party seeking to avoid the contract must prove that the other party knew of the duress or had constructive notice of it or had procured the making of the contract through the agency of the party who exercised the duress (see Chitty on Contract, 32^nd ed., Vol. 1, §8-053).  In the present case, there is no evidence that the Plaintiff procured the alleged duress or was aware of it.  There is no substance in the allegation of duress and the defence based on it is bound to fail.

9.  As for the defence based on forum non conveniens, the relevant principles set out in The Adhiguna Meranti [1987] HKLR 904 can be summarised as follows: -

(1) Is it shown that Hong Kong is not only not the natural and appropriate forum for the trial, but that there is another available forum which is clearly or distinctly more appropriate than Hong Kong?

(2) If the answer to (1) is yes, will a trial at the other forum deprive the plaintiff of any legitimate personal or juridical advantages?  The evidential burden here lies on the plaintiff.

(3) If the answer to (2) is yes, a court has to balance the advantages of (1) against the disadvantages of (2).  Deprivation of one or more personal or juridical advantages will not necessarily be fatal to the applicant provided that the court is satisfied that notwithstanding such loss substantial justice will be done in the available appropriate forum.  Proof of this rests upon the applicant for the stay.

10.  In the present case, there is not a shred of evidence that the PRC court, which presumably also has jurisdiction, is clearly or distinctively the more appropriate forum.  The fact that the Guarantee was executed in Guangdong is neither here nor there.  Nor does it matter that the Guarantee is in Chinese.  The Defendant has clearly failed to overcome the first hurdle in the 3-stage test.

11.  It is also wrong for the Defendant to allege that the Guarantee is subject to the exclusive jurisdiction of the PRC court.  There is simply nothing to that effect in the Guarantee.

12.  The Defendant’s solicitor also raised two “irregularities” in the Guarantee.  First, it is said that the Guarantee fail to state the currency for the sum of 500,000.  Secondly, the date of the Guarantee does not coincide with the date of the Settlement Agreement. As for the former, the Guarantee actually refers to the outstanding amount due to the Plaintiff, which is in RMB.  There can be no mistake as to the currency the parties had in mind.  In any event, there is no evidence whatsoever that the Defendant was mistaken.  In so far as the date is concerned, it is the evidence of the Plaintiff that the discrepancy is a mere typo.  The Defendant has chosen not to adduce any evidence to contradict the Plaintiff’s evidence and I have no reason not to accept such evidence.

13.  Clearly, the Plaintiff is entitled to judgment against the Defendant and I make the following orders: -

(1) Judgment be entered against the Defendant for RMB450,000;

(2) There be interest on the sum of RMB450,000 at half judgment from 31 October 2015 (i.e. the date on which the 2^nd instalment was due) to the date of judgment and thereafter at full judgment rate until payment;

(3) Costs of this action including the costs of this application be to the Plaintiff to be taxed if not agreed.  There be certificate for counsel.

14.  I thank Plaintiff’s counsel and Defendant’s solicitor for their assistance.