PADILLA CHIEN MATEO v. MADAM CHAN CHOI HING

1995 No. A3396

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. In this case the Plaintiff sues the Defendant for the balance of monies due under an Agreement dated 24th July 1994 ("the Agreement"). The actual amount outstanding is HK$1,264,062.00. The Defendant denies her liability to pay. In turn, she counterclaims for a declaration that the agreement in question is void and unenforceable, alternatively that the agreement is voidable and has been rescinded by service of her Defence and Counterclaim. She says that she is entitled to the return from the Plaintiff of the sum of HK$421,357.67, which represents the sum of money which she had paid under the agreement up to the date of the purported rescission.

2. In order to appreciate the way in which the case is put by Plaintiff and Defendant respectively, it is necessary, I think, to place the agreement in its historical context, and I set out in broad terms below the manner in which the Agreement arose.

3. The Agreement is the factual consequence of a previous dispute, which manifested itself in earlier High Court proceedings, namely High Court Action No. A3863 of 1994. In this action a company known as Live Communications Limited ("Live") sued a company known as Fortune Nation International Limited ("FNIL") for the sum of HK$1,685,419.67 being the amount due for services rendered by Live to FNIL under an Agency Agreement dated 19th August 1993, whereby Live was appointed the advertising agent of FNIL. FNIL was (and, I am told, remains) the authorised distributor of a skin-care cosmetic product called "Arcadia". The supplier of this product was the International Science Centre of Switzerland, of which one Dr. Rolf Schaefer was its head. In a nutshell, FNIL had not paid its bills for advertising services rendered, and Live obtained summary judgment therefor against FNIL on 6th June 1994. An appeal against this judgment was launched by FNIL, but was dismissed on 30th June 1994. The Plaintiff in the present action was, and is, a director of Live. The Defendant in the present action was, and is, a director of FNIL, and also the beneficial owner thereof. The present dispute revolves around the events which occurred after the summary judgment against FNIL was confirmed by the dismissal of the appeal on 30th June 1994.

4. This brings me to the Agreement itself. This was dated 24th July 1994, and was made between the Plaintiff and the Defendant. Put shortly, the Defendant had agreed to guarantee and to be personally liable for the existing judgment debt of HK$1,685,419.67, and to pay the same to the Plaintiff by eight equal monthly instalments. Pursuant to this Agreement, the Defendant paid the Plaintiff by cheque four sums totalling HK$421,357.67. The Defendant failed to maintain the payments due under the Agreement, and accordingly the Plaintiff sued the Defendant for the balance of the sum due. Hence the present proceedings which contain, it is agreed by Counsel, three specific issues for decision. They are:

(i) whether the Agreement is void and unenforceable by reason of an absence of consideration, and whether the Plaintiff is able to personally enforce this Agreement ("the consideration point");

(ii) whether the Agreement is voidable on the ground of economic duress, alternatively on the ground of undue influence and, if so, whether there has been affirmation and/or acquiescence on the part of the Defendant ("the duress point"); and

(iii) whether, upon a proper construction of the terms of the Agreement, the Plaintiff's sole remedy was to move to enforce the judgment debt against FNIL rather than, as is presently the case, to sue under the Agreement itself ("the construction point").

5. Before examining these issues in detail, however, I should refer, again in outline, to more of the evidence in so far as it relates to the entry of the parties into the Agreement. In this context, I have been assisted by the viva voce evidence of two witnesses on each side: the Plaintiff himself, together with that of his fellow director of Live, one Idris Mootee; and that of the Defendant herself, together with her fellow director, one Mr. Yung Kwan Chi. Where necessary I will refer to certain disputed aspects of the evidence, although, for practical purposes, there is relatively little of substance which is in dispute for the purpose of the legal arguments before me. Almost everything of moment is common ground, and I suspect that this is perhaps one of those cases which would have been susceptible to argument upon an agreed basis, with all primary facts being assumed in the Defendant's favour.

6. Be that as it may. The evidence was called, and it is common ground that the judgment which had been obtained in favour of Live was confirmed on appeal on 30th June 1994. It is also not in issue that Mr. Mootee had been in touch with the Defendant both before and after the obtaining of that judgment and had demanded repayment of FNIL's indebtedness. There is a peripheral dispute about precisely who called who and when, but in my view it does not much matter. Suffice it to say that on 7th July 1994 Mr. Mootee was in touch with both the Defendant and Dr. Schaefer about this judgment debt, and it is clear that he was desirous of using FNIL's distributorship of the "Arcadia" brand as a negotiating lever; on 8th July 1994 he faxed to the Defendant a copy of a draft advertisement which he indicated to the Defendant that he intended to publish in the local print media. In evidence, Mr. Mootee told me, and I am inclined to accept, that in his extensive experience in the advertising industry that there was nothing startling about this, and indeed that this was standard industry practice when dealing with recalcitrant debtors. In any event, the draft advertisement can be seen for itself: the "Arcadia" brand is accorded real prominence. It again is common ground that the advert itself was never published, and that it was faxed both to Dr. Schaefer under cover of an explanatory letter dated 7th July 1994, and also to the Defendant's fellow director and shareholder, Mr. Yung Kwan Chi.

7. The reaction from both these gentlemen was swift and, perhaps, predictable. Dr. Schaefer appended a pithy hand-written note in English to Mr. Mootee's letter and faxed it to the Defendant, the essence of which was an instruction to her to fix the problem which had arisen, and the annoyed tone of which was clear. Mr. Yung, whom I understand had provided financial backing for FNIL, also gave evidence, which I accept, to the effect that he was not best pleased by what had occurred, and that he instructed the Defendant to settle the whole matter with Live, lest there be adverse spin-off from the advert in terms of his own reputation and his other commercial activities. This, it seems to me, was sound commercial advice in the particular circumstances.

8. Accordingly, the Defendant took steps to sort the matter out. She clearly had a personality conflict with Mr. Mootee, and had refused to continue to speak or otherwise deal with him. Hence the introduction into the picture of the present Plaintiff, Mr. Mateo Chien, Mr. Mootee's fellow director. There is a peripheral factual dispute as to the number of meetings the Plaintiff had with the Defendant, but in any event it is common ground that on 24th July 1994 the Plaintiff met the Defendant, together with a lady called Lisa Li, at the Shangri-La Hotel Coffee Shop, and that at that meeting the Agreement the focus of the present proceedings was signed. It is further common ground that after signing the Agreement on that day it was part-performed, and that in total the Defendant paid thereunder the sum of HK$421,357.67 by way of four cheques each of unequal amounts, the drawer in each case being FNIL, and the payee in each case being Live; I mention the actual mechanics simply because Mr. Li, for the Defendant, sought to derive assistance therefrom.

9. The last payment, that of HK$50,677.00 was made on 30th November 1994. So far as I am aware, there is no particular magic about this date. The Defendant told me in her evidence that she had tried to do her best but that she had run out of money; indeed, in response to a further question from the Bench, she said that if she had had money, she would have continued to pay.

10. The consequence of such cessation of payment was that, on 10th April 1995, the Plaintiff issued its present writ. In turn, this prompted the Defendant to consult lawyers of her own, resulting in a Defence and Counterclaim dated 4th May 1995. And (as was accepted by the Defendant) it was in this pleading that for the first time in the history of the case that the particular issues now before the Court were raised; indeed, notice was given by the Defendant in the Defence of the purported rescission of the Agreement of 24th July 1994, a matter of which the Plaintiff had hitherto been unaware. It is to these specific issues that I now turn, albeit in reverse order to the way in which they were presented.

The Construction Point

11. The relevant part of the Agreement reads:

"PROVIDED that in the event of any one of the aforesaid payments referred to in paragraph two not being paid on or before the due date the aforesaid PADILLA CHIEN MATEO shall be at liberty to execute the judgment against Fortune Nation and upon such event occurring interest shall immediately become due and payable on the whole amount remaining outstanding from 24th April 1994 at the judgment debt rate from time to time in force." (emphasis added).

12. Mr. Li's argument, as I understand it, is that this is the contractual remedy provided upon the Defendant's default, and that upon such occurrence the Plaintiff's recourse is against FNIL only.

13. It is not clear to me how the words in question can be construed to fit Mr. Li's argument. As Mr. Daniel Wan, Counsel for the Plaintiff argues, the term "liberty" is permissive only, and there is no discernible indication anywhere on the face of the clause that begins to suggest that stipulated "remedy" is intended to be exhaustive. Mr. Wan has also drawn my attention to the Hong Kong Court of Appeal's decision in Wong Lai-fan v. Lee Ha, [1992] 1 HKLR 125, where the Court applied the well-known principle requiring the necessity for clarity of language in the limitation or exclusion of liability and ordinary remedies. Further, says Mr. Wan, it is patent nonsense to argue that Mr. Chien could have recourse under the judgment against FNIL, given that he was not the judgment creditor.

14. It seems to me that the point does not require further scrutiny. In my judgment it is a bad point, and is rejected.

The Duress Point

15. Under this umbrella head there are in fact two different elements:

(a) an argument relating to economic duress; and

(b) an argument relating to undue influence.

16. I am unable to discern any factual basis which sustains an undue influence submission within the usual meaning of this term. The relationship of the Plaintiff and the Defendant is not such as to raise any presumption in this regard, nor is there any evidence as to actual undue influence. The Agreement in question was an agreement freely entered into by the Defendant who, in my judgment, was not prevented from bringing "a free will and properly informed mind to bear on the proposed transaction" (per Lord Browne-Wilkinson in CIBC Mortgages v. Pitt, [1994] 1 All ER 200.

17. I would mention at this stage that there is a dispute between the Plaintiff and the Defendant as to who suggested the device of an agreement under which the Defendant would undertake personal liability for her company's debt: the Plaintiff says that the Defendant raised the idea of providing a personal guarantee to him of the indebtedness owed by FNIL to Live, whereas the Defendant maintains the opposite, saying that she had no option in the circumstances but to yield to the Plaintiff's telephone demands in that regard. Given that the Agreement was signed, and given that I am unable to understand how an undue influence plea can properly be said to lie, it probably does not greatly matter who said what to whom, but nevertheless in my view it is more probable, and indeed I so find, that it was at the Defendant's suggestion and that this was raised in a telephone conversation with the Plaintiff. As I say, however, I do not think this is of any great importance: in my judgment a question of undue influence arises, and accordingly this line of argument is also rejected.

18. This then leaves for consideration the more interesting question of economic duress. As may be expected the cases in which this principle has been invoked are many and various in the factual permutations thrown up. The issue is best approached, therefore, with a firm eye on the general principles underpinning the plea, namely the vitiation of true consent by means of the coercion of will arising from unjustified or unwarranted economic pressure: see, for example, dicta in Pao On v. Lau Yiu Long [1980] AC 614 at 635:

"Duress, whatever form it takes, is a coercion of the will so as to vitiate consent. Their Lordships agree with the observation of Kerr J. in Occidental Worldwide Investment Corporation v. Skibs A/S Avanti [1976] 1 Lloyd's Rep. 293, 336 that in a contractual situation commercial pressure is not enough. There must be present some factor "which could in law be regarded as a coercion of his will so as to vitiate his consent." This conception is in line with what was said in this Board's decision in Barton v. Armstrong [1976] A.C. 104, 121 by Lord Wilberforce and Lord Simon of Glaisdale - observations with which the majority judgment appears to be in agreement. In determining whether there was a coercion of will such that there was no true consent, it is material to inquire whether the person alleged to have been coerced did or did not protest; whether, at the time he was allegedly coerced into making the contract, he did or did not have an alternative course open to him such as an adequate legal remedy; whether he was independently advised; and whether after entering the contract he took steps to avoid it. ..."

19. I am in further agreement with Mr. Wan's broad submission that in this area a common thread in cases in which economic oppression has failed to be established is where there has been a demand for money admittedly due and owing, or alternatively, in the absence of an acknowledged debt, where there has been a bona fide belief that money is so due. The relatively recent case of CTN Cash and Carry Ltd. v. Gallaher Ltd., [1994] 4 All ER 714 (CA) is helpful in this regard, wherein it was held that although in certain circumstances a threat to perform a lawful act coupled with a demand for payment might amount to economic duress, it would be difficult, though not necessarily impossible, to maintain such a claim in the context of arm's length commercial dealings between two trading companies, especially where the party making the threat bona fide believed that its demand was valid. To quote from the judgment of Lord Justice Steyn (as he then was), op. cit. at p. 719:

"We are being asked to extend the categories of duress of which the law will take cognisance. That is not necessarily objectionable, but it seems to me that an extension capable of covering the present case, involving 'lawful act duress' in a commercial context in pursuit of a bona fide claim, would be a radical one with far-reaching implications. It would introduce a substantial and undesirable element of uncertainty in the commercial bargaining process. Moreover, it will often enable bona fide settled accounts to be reopened when parties to commercial dealings fall out. The aim of our commercial law ought to be to encourage fair dealing between parties. But it is a mistake for the law to set its sights too highly when the critical inquiry is not whether the conduct is lawful but whether it is morally or socially unacceptable. That is the inquiry in which we are engaged. In my view there are policy considerations which militate against ruling that the defendants obtained payment of the disputed invoice by duress.

Outside the field of protected relationships, and in a purely commercial context, it might be a relatively rare case in which 'lawful act duress' can be established. And it might be particularly difficult to establish duress if the defendant bona fide considered that his demand was valid. In this complex and changing branch of the law I deliberately refrain from saying 'never'. But as the law stands, I am satisfied that the defendants' conduct in this case did not amount to duress...."

20. Mr. Li for the Defendant puts his case on the basis that she had been subjected to fear, alarm and embarrassment as exerted by the Plaintiff and Mr. Mootee. The Defendant particularly prays in aid the fax sent by Mr. Mootee to Dr. Schaefer of 7th July, wherein Mr. Mootee outlined the intentions of Live, as the judgment creditor, in terms of the execution of that judgment, and also to the terms of the draft advertisement itself.

21. The Plaintiff's response is short. He says that the Defendant voluntarily signed the Agreement on the occasion of the meeting at the Shangri-La Hotel, raising no objection thereto, and further that the communications which took place between himself and/or Mr. Mootee and herself and/or Dr. Schaefer were part and parcel of a legitimate exercise to recover monies the subject of the judgment debt, the Defendant's appeal against which having failed some weeks earlier.

22. In his argument Mr. Li refers to the following passage from Chitty, 27th ed., para. 7.007, with regard to the issue of economic duress, viz.:

"In substance, this amounts to recognising that certain threats or forms of pressure, not associated with threats to the person, nor limited to the seizure or withholding of goods, may give grounds for relief to a party who enters into a contract as a result of the threats or the pressure ..."

23. He argues that the pressure of fear and alarm of the Defendant as to the revocation of FNIL's Arcadia distributorship, coupled with the absence of practical choice so far as the Defendant was concerned, was sufficient to get him home.

24. I disagree. The actions of the Plaintiff and of Mr. Mootee to recover the monies due to Live did not amount, in my view, to economic duress. In my judgment this commercial pressure was neither unjustified nor unwarranted. It was not subtle, but neither was it illegitimate. This was not a case of extortion; per contra there was a bona fide judgment debt in favour of Live. As to Mr. Li's point about absence of practical choice, the simple solution, I should have thought, was to arrange for payment of the judgment debt, absent which Live had the usual liquidation remedies available to it under the companies legislation. At that stage FNIL was, or was shortly to become, the Defendant's company, and it seems to me entirely understandable that she would wish in the circumstances to avoid damaging that company, with the Arcadia distribution rights in place, and to choose instead to substitute her personal liability. Which is precisely what she did by entry into the Agreement, and indeed by part performance of the same. I have no doubt in the circumstances that Mr. Wan is right when he says that the position of the Defendant was akin to the Defendant in Pao On, op. cit., who, as Lord Scarman pointed out, had carefully considered his position when faced with threatened breach of contract, concluded that it was in his interest to grant the concession demanded (in that case by entering into a guarantee) rather than by suit upon the original contract.

25. I therefore reject the economic duress argument. In my judgment there was no vitiation of consent in this case. The Defendant struck me as a hard-nosed businesswoman. I am in no doubt that she knew exactly what she was doing, and why, when she signed the Agreement at the meeting at the Shangri-La Hotel on 24th July 1994.

26. In light of my primary finding on this point, there is strictly no need to go further to consider the subsidiary issues of affirmation and/or acquiescence. However, if I be wrong in my conclusion, so that contrary to my view the Agreement was indeed voidable, I now go on to hold that in any event, on the facts of this case, the Defendant by her conduct affirmed or otherwise acquiesced in the Agreement, and that by reason thereof she is unable to avoid the contract she made. With the leave of the Court, Mr. Wan amended his Reply to maintain this plea and to assert as the basis thereof the fact of part payment under the Agreement, together with the delay of some ten months between the date of the Agreement and the date of the purported rescission, which plea first saw the light of day in paragraph 16 of the Defence. In my view this element of the case is also made out. It is abundantly clear that the Defendant was content to proceed with her obligations under the Agreement until the cessation of payment thereunder. This is entirely consistent with her evidence in response to a query from the Bench that had she had the money she would have continued to pay. It is also perfectly clear that it was not until she had consulted lawyers in response to the issuance of the writ in the present proceedings that her various arguments began to emerge. In short, this is a prime example of lawyer-driven litigation, with, if I may say so, little obvious merit in the broad sense of that term.

27. Lastly in this context, and in so far as it be relevant, I would add that I find, as a matter of probability, that two disputed meetings between the Plaintiff and the Defendant which took place before and after the undisputed meeting on 24th July at the Shangri-La Hotel did in fact occur in the manner described by the Plaintiff in his evidence. I am unable to discern any motive for the Plaintiff simply to have conjured up these meetings, at the China Club and the Hong Kong Hotel respectively, whereas the denial by the Defendant of the holding of such meetings is explainable in the context of the arguments raised by her with regard to the issue of economic duress and also with regard to her denial that she had in any way affirmed or acquiesced in the very Agreement that she now seeks to set aside.

The Consideration Point

28. I turn lastly to what I have termed the "consideration point", although again this involves two distinct, albeit interconnected, elements. By the Re-Amended Defence and Counterclaim, the Defendant says that the Plaintiff is neither privy to the Agreement dated 24th July 1994 nor has the Plaintiff provided any consideration for her promise. Mr. Li was, I think, inclined to the view that this was his most promising line of argument. He puts it thus:

(a) That although the Agreement was signed by the Plaintiff and the Defendant, it was actually entered into by the Defendant on the one hand and Live on the other, that is that the Plaintiff acted only on behalf of Live in making the Agreement;

(b) That the consideration for the Agreement moved from Live only by virtue of its refraining from enforcing its judgment debt; and

(c) That as a consequence, the correct plaintiff to sue on the Agreement should be Live, and the Plaintiff, having provided no consideration nor being a party to the Agreement, possesses no cause of action against the Defendant.

29. This line of argument was only fully developed by the Defendant by means of amendments made to the Defence following amendments which were made by the Plaintiff to its Statement of Claim. What happened was this. At the beginning of the trial Mr. Wan for the Plaintiff sought leave to amend his pleading. In the exercise of my discretion I granted such leave, which was opposed by Mr. Li. The amendment in question to the Statement of Claim went directly to the issue of the consideration moving from the Plaintiff. The original pleading in this respect had recited the literal terms of the Agreement, and by his amendment Mr. Wan sought to argue that upon a proper construction of the terms of the Agreement the consideration moving from the Plaintiff was the Plaintiff's promise to procure Live to refrain from enforcing the judgment against FNIL, alternatively the Plaintiff's promise that Live would refrain from enforcing such judgment (if and in so far as there was a difference between these two formulations).

30. In the circumstances Mr. Li's amendment to the Defence attracted no opposition from Mr. Wan, on the basis that such amendments were consequential, and were accordingly allowed. On reflection, however, the characterisation of such amendments as consequential is not entirely correct; what actually happened was that what was the single barrel consideration point became transmuted to a double-barrelled consideration and privity point. In any event, the amendments went in, and Mr. Li proceeded to forcefully argue his case, relying during such argument upon the twin pleaded bases of the proper construction of the Agreement and the factual background relating to the signing of the Agreement.

31. I turn now to these matters. Mr. Wan accepts, I suspect, that the Agreement is not the most felicitously-drafted document, and argues that it is clear in the circumstances that the consideration provided by the Plaintiff was the promise to procure Live from refraining from enforcing the judgment debt. In the circumstances I find no difficulty in construing the Agreement in this way. The evidence as to the genesis of the Agreement points overwhelmingly to the reason underpinning the Agreement and to the desire of the parties thereto to contract personally. As to this, the Plaintiff's unchallenged evidence was that the guarantee would be given by the Defendant personally, and indeed, in her own evidence, the Defendant says that the Plaintiff "signed in his own capacity". The Defendant demonstrated to me when she gave evidence that she has a perfectly reasonable grasp of the English language. The Agreement is brief and uncomplicated, and the Defendant says she understood it; indeed she had the content of the Agreement explained to her at the time of signing.

32. The Plaintiff also gave evidence that Live is a small private company owned and run by himself and his two fellow shareholders and directors at that time, Mr. Mootee and one Kinsan Chan. The Plaintiff and Mr. Mootee each gave evidence of the way in which the decision was reached to approve the signing by the Defendant of the Agreement, and of their decision to take no further action against FNIL pending repayment under that Agreement. Mr. Li sought to argue against these facts on the basis that there was no resolution of the Board of Directors of Live, and that, absent such resolution, that there had been no such consideration as was now pleaded. I find this hard to accept. Small private companies in Hong Kong are often run without formal board resolutions or minutes, and in my view it is artificial to argue that the absence of such documentation must mean that the decision was not taken in the way that has been described to me by both the Defendant and by Mr. Mootee. Moreover, it is common ground that Live has not today enforced the judgment against FNIL, and indeed has not sought to do so.

33. Mr. Li sought to further argue that accession to the Plaintiff's argument with regard to the true nature of the consideration is not permissible because such argument, as formulated, departed from the literal wording of the Agreement. He produced no authority for this proposition, and it seems to me that at the end of the day the matter is essentially one of construction. In all the circumstances, I am minded to accept Mr. Wan's arguments in this regard, and to accept that the Plaintiff did indeed provide consideration for the Defendant's promise in the manner pleaded. Accordingly, in my judgment the Defence based upon the absence of consideration underpinning the Agreement does not succeed.

34. As to the associated 'privity' point, if indeed this be an apt description, given that the Plaintiff himself was expressed to be party and was a signatory to the Agreement, Mr. Li now says that the Plaintiff was at all times purely an agent, and that he signed for and on behalf of Live, with no personal obligation arising therefrom. He points to the particular wording of the consideration clause of the Agreement, although, as earlier indicated, he placed reliance upon the factual background leading to the signing thereof (and also, somewhat surprisingly, upon its subsequent performance). However, given my view as to the correct construction of the Agreement, and in light of the overwhelming evidence as to the nature and purpose of the Agreement, he was forced, I think, to walk a thin and difficult line.

35. The Plaintiff's case is that the Agreement was entered into between the Plaintiff and the Defendant in their personal capacities, notwithstanding they were both directors of their respective companies. Mr. Wan demonstrated in his submission that the indicia in support of this contention is found not only on the face of the Agreement itself, but also throughout the evidence, which he reviewed in detail. As earlier observed, the Plaintiff's unchallenged evidence was that the Defendant did not want to deal with Mr. Mootee, and that she suggested that the guarantee would be given by her to the Plaintiff personally. The Defendant's own evidence also was that the Plaintiff signed the Agreement in his own capacity, and that the contents had been explained to her at the time of signing; indeed, this issue had been admitted in the original Defence, and as such is a matter to which, I think, I am entitled to pay due regard. I would also observe in passing that in this connection I place little importance upon the fact that the four cheques which were the subject of part-performance under the Agreement were actually issued by FNIL in favour of Live. The actual mechanics of such payment as was made should not be permitted to distort the picture. Nor do I accept Mr. Li's submission that Mr. Mateo, the Plaintiff, specifically accepted in the witness-box that he was acting solely as agent of Live. As Mr. Wan pointed out, the particular context in which that answer was given was that the Plaintiff considered that in respect of monies received under the Agreement he had an obligation to account therefor.

36. Be that as it may. In the circumstances I do not consider that Live should be considered to be the correct Plaintiff, as Mr. Li now suggests. However, it does not perhaps much matter, because the fundamental point at issue here is surely whether the Plaintiff is a proper party to the Agreement and has locus to sue. In this context Mr. Wan went on to further submit that whether or not Live should be considered to be a party is of no real consequence because in the circumstances any such conclusion would not serve to preclude the Plaintiff from also being privy to the Agreement in his personal capacity, and from acquiring rights and obligations thereunder: see Basma v. Weekes [1950] AC 441. He also referred to the decision of Godfrey J. (as he then was) in Wu Man Kin Eddie v. Cable and Wireless Systems Ltd. [1989] 2 HKC 477, where the learned Judge applied Basma v. Weekes, and held that a person who signed the contract would escape personal liability on that contract only if it was made clear at the time of signing the contract that he was signing it not on his own behalf but for and on behalf of a principal, either disclosed or not disclosed. I accept these authorities. Any such a disavowal certainly did not take place in this case, and in so far as may be necessary I accept this alternative submission.

37. I reject, therefore, the Defendant's arguments raised under this head. Had the Plaintiff reneged upon his obligations under the Agreement I am perfectly satisfied that the Defendant would have had personal remedies against the Plaintiff thereunder in the same way as the Plaintiff himself now seeks to enforce his rights against the Defendant under that same Agreement.

38. It follows from the foregoing, therefore, that the Plaintiff is entitled to judgment in the sum of HK$1,264,062.00, and I so order. The Defendant's counterclaim is dismissed. I will hear Counsel in due course upon the twin issues of interest and costs.