Pun Mei Chun v. Lo Shun Kwong

DCCJ 10048/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 10048 OF 2001

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JUDGMENT

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Background

1. The Plaintiff and the Defendant were girlfriend and boyfriend until 8 October 1999. During their relationship the Plaintiff made to the Defendant various money advances. The Plaintiff now alleges that the Defendant has failed to repay.

2. After commencing this action on 27 June 2001 and the Defence having been filed on 19 July 2001, the Plaintiff took out the present summons on 13 August 2002 to apply for summary judgment.

3. In support of this application the Plaintiff relied on her two Affirmations filed on 13 August 2002 and 27 September 2002 and an Affirmation from her solicitor Mr. So Che Wing Rex filed on 4 June 2002, which was made to support her application for specific discovery. By consent of the parties I ordered that the time for filing and serving the Plaintiff's second Affirmation be extended to 30 December 2002.

4. At this hearing the Plaintiff asked for leave to rely on a further Affirmation from her solicitor filed on 13 December 2002 without leave. Exhibited in this Affirmation is a report from a handwriting expert and copies of the Defendant's two credit card statements of May 1999. The application was opposed. After hearing arguments I refused the Plaintiff's application to adduce the expert report in evidence. Since the Defendant did not object to the admission of the credit card statements, I gave leave to the Plaintiff to file this Affirmation with a direction that paragraphs 3, 4 and 5, which referred to the expert report, be excluded from the evidence.

5. To contest the application the Defendant relied on his Affirmation filed on 12 September 2002.

The Plaintiff's case

6. The Plaintiff relied on two memoranda prepared by her signed by the Defendant in or about end of April or early May 1999.

7. The first memorandum, consisting of three pages, sets out, a running account of ten money advances made to the Defendant between 19 February 1998 and 3 May 1999 ending with an accumulated balance of $163,214.37 inclusive of interest at 6% up to 31 December 2002, and a repayment schedule of forty-two monthly payments of $3,886. Each of the three pages of this memorandum was signed by the Defendant and on the last page the Defendant signed twice.

8. Except the third, sixth, eighth, ninth and tenth items in the first memorandum the other money advances recorded in the first memorandum were made directly to the Defendant as evidenced by the cheques and pay-in slips. The third advance of $36,700 was paid to Senior Honest Limited at the Defendant's request as evidenced by a cheque. The sixth item of $5,000 was transferred to the account of the Defendant's brother at the Defendant's request as evidenced by an ATM transfer slip. The eighth item of $10,000 was paid into the Defendant's Visa Card account as evidenced by a cheque and a pay-in slip. The ninth item of $2,000 was paid into the Defendant's Master Card account as evidenced by a cheque and a pay-in slip. The tenth item of $1,978 was paid to a finance company at the Defendant's request to for settling his indebtedness as evidenced by a cheque and a pay-in slip.

9. The second memorandum, consisting of two pages, sets out, three money advances made to the Defendant all dated 3 May 1999 to a total of $151,916.66 and interest of 12% per annum on that sum until 31 December 2002 giving a total of $218,743.34, and a repayment schedule of forty-two monthly payments of $5,208. The Defendant signed once on the first page and twice on the second page.

10. The first and second advances of $21,025.65 and $52,852.01 recorded in the second memorandum were paid into the Defendant's credit card accounts. The third advance of $78,039 was paid into a finance company to settle the Defendant's debt. These payments are evidenced by cheques and pay-in slips all dated 3 May 1999. The two payments to the credit card accounts are further evidenced by the Defendant's Visa Gold Card account statement covering the period from 24 April 1999 to 16 June 1999 and Gold Master Card account statement covering the period from 3 May 1999 to 18 May 1999. These statements are contained in Exhibit SCWR-5 of Mr. Rex So's second Affirmation (complete set not in the hearing bundle but in the original Affirmation).

11. The Plaintiff further relied on the Defendant's failure to provide sample signatures for obtaining a report from a handwriting expert.

The Defendant's case

12. While accepting he borrowed the first and second advances, which amounted to $200,000 as set out in the first memorandum, the Defendant denies receipt of the third to the tenth advances which amounted to $98,687. He alleges that he has repaid the Plaintiff $196,877 leaving the outstanding balance of $3,123.

13. Regarding the second memorandum, the Defendant denies the loan of $151,916.66 but accepts that the Plaintiff lent him $132,134.40 by three separate payments all dated 5 May 1999 into his two credit card accounts and a finance company for settling his debts, which appear to correspond to the three money advances set out in the draft memorandum exhibited in the Plaintiff's first Affirmation (PMC-4).

14. The Defendant further alleges that in December 1999, the Plaintiff, in the course of the separation, told the Defendant that there was no need to repay her any money.

Whether triable Defence

15. The relevant principles for considering the grant of summary judgment are set out in paragraphs 14/4/9 and 14/4/10 of Hong Kong Civil Procedure 2002.

16. The Plaintiff relied on the Defendant's failure to provide sample signatures. In my view, this fact is neither here nor there and of no real assistance to this application.

17. Paragraph 4 of the Defence filed on 19 July 2001 asserts that the Defendant never signed any memorandum regarding the first loan. Presumably, it was alleged that the signatures on the first memorandum were fabricated. Paragraph 5 of the Defence makes a general denial but contains no positive averment to the effect that he never signed the second memorandum.

18. Paragraph 2 of the Defence denies receipt of $98,687 (the aggregate of the third to tenth items set out in the first memorandum). However, the Defendant did not offer any comment on the evidence of payment as contained in the Plaintiff's first Affirmation.

19. The principal defence contained in the Defendant's Affirmation is that he did not sign any memorandum of debt and that, alternatively, if the signatures appearing on the two memoranda came from him they may have been the signatures he put down on certain blank papers given to the Plaintiff together with some blank cheques before or at the time he served the term of imprisonment between 25 September 1998 and 25 October 1998. The Defendant says the reason for leaving the blank cheques and blank papers was "in case of any urgent necessities".

20. The Plaintiff accepts that she had received blank cheques from the Defendant and copies of two such cheques are exhibited in her first Affirmation (PMC-3). However, the Plaintiff, in her second Affirmation, denies receiving the signed blank papers.

21. The importance of the fact that the Defendant handed some signed blank papers to the Plaintiff should have been obvious at the time the Defence was filed. Not until the Defendant filed his Affirmation on 12 September 2002 to oppose this application (almost fourteen months since the filing of the Defence) this factual allegation had been raised for the first time. Apart from making the allegation late the Defendant has not offered any real explanation as to why he gave the signed blank papers to the Plaintiff.

22. In respect of the second loan the Defendant says that the correct sums of the three payments made on 5 May 1999 should be $19,612.39, $52,522.01 and $60,000 as appearing on the draft second memorandum. The Defendant did not put forward any comment on the evidence of payment exhibited in the Plaintiff's first Affirmation nor did he seek to reply to the credit card statements exhibited in Mr. Rex So's second Affirmation.

23. What is put forward is a denial of the signatures plus a mere assertion, made late, that the signed blank papers were given to the Plaintiff in about September 1998 "in case of any urgent necessities", without any real explanation. I find this assertion incredible or unbelievable.

24. Paragraph 5 of the Defence states that $132,134.40 was "voluntarily advanced". Paragraph 18 of the Defendant's Affirmation states that the Plaintiff made voluntary payments from time to time. The Defendant further says this in paragraph 19 of his Affirmation:

"Finally, the Plaintiff did in or about December 1999 when she decided to walk out on me, she expressly tell me I did not need to repay her any money she had given to me. This is supported by the fact that the Plaintiff for nearly 18 months the Plaintiff had not thereafter asked me to repay her the money now claimed until 20 June 2001 the day I received her solicitors' letter."

25. Accordingly, Counsel for the Defendant submitted, the monies were gifts from the Plaintiff as the payments were made voluntarily, and alternatively, the Plaintiff made a "completed gift" when she told the Defendant not to repay. On the evidence, I am unable to see how the monies, simply paid voluntarily and later the Defendant was excused from repayment, could amount to gifts, not even a release. Paragraph 23-004 of Chitty on Contracts 28th Edition Volume 1 states:

"A mere parol release, whether oral or in writing, without valuable consideration amounts to nudum pactum and is normally insufficient to effect a discharge either at law or in equity. A parol release given in return for valuable consideration amounts to accord and satisfaction."

26. There is no evidence here to support the defence of release, discharge, accord and satisfaction, waiver or estoppel. None of them is pleaded.

27. Paragraph 14 of the Defence only states "the Plaintiff made an unequivocal oral promise to the Defendant that the Plaintiff will not request the Defendant to repay any money remaining due under both the first and second loan." The circumstances of the parting are not mentioned in the Defendant's Affirmation. Factually, I find the allegation of forgoing payment incredible or unbelievable.

28. Counsel for the Defendant further argued that this application has been made late. While good practice requires reasons should be given for delay, it is not a bar to summary judgment. Authorities can be found in paragraph 14/2/2 of Hong Kong Civil Procedure 2002.

Conclusion

30. Consequently, I am not satisfied that the matters set out in the Defendant's Affirmation (including the Defence) constitute a "real or bona fide defence" or that the Defendant's assertions are believable. There should be judgment for the Plaintiff.

Judgment sum

31. The Plaintiff's claim is for $163,215 inclusive of agreed interest up to December 2002 as set out in the repayment schedule of the first memorandum and for $218,744 inclusive of agreed interest up to December 2002 as set out in the repayment schedule of the second memorandum. The total is $381,959.

32. In respect of the first loan the Defendant makes these assertions in paragraphs 2 and 3 of the Defence. First, he had never received $98,687 which is the total sum of the third to tenth advances recorded in the first memorandum. Second, he had repaid $196,877 which is the aggregate of the eleven payments effected over the period from 16 March 1998 to 16 January 1999 as set out in paragraph 3 of the Defence.

33. Of the eleven payments, the third payment of $130,000, $20,000 of the fourth payment of $25,000, the sixth payment of $17,000, and $5,000 of the seventh payment of $6,000 had been taken into account as recorded in the first memorandum. However, other sums set out in paragraph 3 of the Defence are not reflected in the first memorandum. They are:

(1) First payment of $3,141

(2) Second payment of $5,000

(3) Fourth payment of $5,000 ($25,000 - $20,000)

(4) Fifth payment of $2,220

(5) Seventh payment of $1,000 ($6,000 - $5,000)

(6) Eighth payment of $3,000

(7) Ninth payment of $3,200

(8) Tenth payment of $2,000

(9) Eleventh payment of $316. Total: $24,877

34. Counsel for the Plaintiff accepts that leave to defend, if given, should cover $13,536. I think leave to defend should be given for the sum of $24,877.

Orders

35. Accordingly, the Plaintiff succeeds in this application but only to the extent of $357,082 ($381,959 - $24,877). There will be judgment for the Plaintiff for the sum of $357,082 with interest thereon at half judgment rate from 1 January 2003 until date of judgment. The Defendant will have unconditional leave to defend in respect of the sum of $24,877 of the Plaintiff's claim. The Plaintiff is to have the costs of this application with a certificate for counsel, to be taxed if not agreed.