YEO TEO BOK v. YEUNG KAI PUN

1983, No. 14638

IN THE HIGH COURT OF JUSTICE, HONG KONG

HIGH COURT ACTION

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JUDGMENT

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1. The plaintiff claims US$139,000 being the net  total of sums paid into a bank account in the defendant's name between 23rd October and 5th November 1983. He also claims a declaration that any sum remaining in the account is his, and an order that it be paid over. His case is that acting on his behalf one Ang Boon Tye (Ang) paid the sums into the defendant's account as a margin for letters of credit which the defendant was to have arranged to open in the plaintiff's favour. In the event no letter of credit was ever opened and he seeks repayment of the money as having been received to his use. Alternatively, he claims that the payments were obtained by fraud and in the further alternative, that they were made without consideration. Only the first ground of claim is material: the second is not pursued and the last adds nothing to the first. The defendant's case is that he received the money on behalf of someone in Indonesia who had previously staked a joint venture between the defendant and Ang to the extent of US$139,000, and, the joint venture having been abandoned, who now wished his money returned. The case turns on fact and nothing else as to which there is a stark conflict. I have had no difficulty in resolving that conflict in favour of the plaintiff. Judgment will follow, but first, without rehearsing the whole of the evidence which continued over several days, I should enlarge upon my findings.

2. For the plaintiff I was told that he is a businessman form Singapore. In October 1983 he saw an opportunity to buy toys from Indonesia to be sold in Hong Kong. There were two products in which he was interested,"car parking" and "play food". For the first he needed to raise US$850,000 and for the second US$525,000. To that end he wanted to open letters of credit in Hong Kong. He told me that he got in touch with Ang who works for a company, Keenice Limited, with an office in Hong Kong. He had known Ang for many years. Ang knew the defendant who was a young man making his way and who through some connection with one of Ang's fellow directors, was allowed the use of one of Keenices' offices. As the plaintiff understood it, or as so he told me, and as Ang later confirmed, the defendant offered to contact friends who in turn might be able to make the necessary arrangements. Again as the plaintiff told me and Ang confirmed the defendant reported that he was only able to arrange for a letter of credit in the sum of US$400,000 and that it would be necessary for a margin of 10% to be deposited before the bank would act. The plaintiff arranged to transfer US$42,000 to an account in Ang's name at the Nanyang Commercial Bank and Ang, two days later on, 24 October 1983, transferred US$40,000 from that account into a savings account which had been opened in the name of the defendant at the same bank and branch. Apart from the entries in the bank account and the passbook there is no document, produced to me at any rate, which shows the purpose for the making of that deposit. Ang told me that for the time being he retained the passbook. Two days after that, according to Ang and as he reported to the plaintiff, the defendant said that he could only arrange for a letter of credit  in the sum of US$360,000 and consequently on that day US$4,000 was taken out of the account. On the 1st November, again according to Ang and reported by him to the plaintiff, the defendant said that he would not be able to arrange for the opening of a letter of credit in any amount and US$35,900 of the remaining US$36,000 was removed from the account that morning. According to Ang US$100 was left in the account because the defendant was anxious not to have it closed. That same afternoon, again according to Ang, the defendant said that he could after all arrange for a letter of credit in the sum of US$310,000, and for that reason US$30,900 was put back into the account, and later still the defendant was pleased to report that he could now arrange to raise by means of letters of credit the whole of the sum which the plaintiff required, as a result of which the plaintiff transferred a further US$108,000 to the defendant's account. That brought the amount in the account up to US$139,000 which was enough to provide a margin of 10% on the sums required with a small amount to spare. On that day, the 4th November 1983, again according to Ang, he met the defendant at the Peninsula Hotel where he parted with the passbook on being told that it was needed to show the issuing bank. Neither the plaintiff nor Ang saw the defendant again. The next day US$20,000 was withdrawn from the account. The defendant made a number of phone calls to Ang explaining that matters could not proceed until the following Monday but Ang was not himself able to make contact with the defendant. It is common ground that the defendant left for China on the 6th November and did not return until 4th January 1984. On their account the plaintiff and Ang became increasingly concerned; they contacted the defendant's brother who offered to attempt to negotiate the opening of the letters of credit himself, but when that came to nothing Ang reported the matter to the police on the 10th November. Subsequently, according to Ang, the brother got in touch with him and told him that the defendant was concerned because of the withdrawal of US$20,000 on 5th November and that if Ang would give some document indicating that that was a loan to the defendant the rest of the money would be returned. Ang obtained the plaintiff's approval and did provide some written acknowledgment to that effect. In the first place it was not signed but upon the brother asking him to do so Ang did append his signature.

3. The defendant told me this. He had got to know Ang in much the same way spoken to by Ang himself. Ang had some project in mind to sell American fruit in Indonesia. He claimed to have the expertise: he suggested that the defendant supply the money. The defendant did not have any money but he knew a Mr. Chan Chi-wah in Indonesia who did. Although he had not seen Chan Chi-wah, since he was 17, some 7 years previously, they had frequently spoken on the telephone. In the course of conversation Chan had offered to set him up in business. The defendant arranged for Ang to meet Chan on a visit by Ang to Indonesia and on such a visit in about July 1983, Chan gave Ang US$139,000. Chan took a receipt for the money but he has since lost it. Later the project was abandoned and Chan, through one of his telephone conversations with the defendant, asked for his money back. He asked the defendant to collect it for him. The defendant approached Ang. Ang was hard-pressed but eventually managed to come up with US$40,000. That explains, says the defendant, the first payment into the defendant's bank account. Later Ang needed to borrow some of the money back and US$4,000 was withdrawn to accommodate him. Later still the defendant was present when one of Ang's creditors attempted to dun him in the office. Again the defendant accommodated Ang by allowing him a further US$35,900 out of the account. That accounts for the second withdrawal. Happily by that afternoon Ang's position had eased and he was able to repay US$30,900. He paid the balance of what was owing on the 4th November 1983. So far as the defendant was concerned that was the end of the matter. He had urgent business in China and he was also anxious to visit family. He left on the 6th November having previously made arrangements for his brother to be able to withdraw US$20,000 from the account in order to give to a Madam Yip who was a friend or relative of Chan Chi-wah and was passing through Hong Kong and in order to comply with Chan Chi-wah's instruction over the telephone. That accounts for the withdrawal of US$20,000 on the 5th November. He was also persuaded by his brother to sign a withdrawal slip so that his brother might be able to borrow US$10,000 in order to discharge debts. That explains why an attempt was made to withdraw a further US$10,000 or US$11,000 on behalf of the brother at a somewhat later date.

4. From that resume of the evidence so far it will be seen at once that on his own account the plaintiff was foolish in the extreme to allow substantial sums of money to be placed in the defendant's account on the mere security of the passbook and without any document to evidence his reason for making the deposits. At the same time it will be apparent that a vital witness in this case from the defendant's point of view would have been Chan Chi-wah, and if not Chan Chi-wah a very important substitute would have been Madam Yip. Neither have been called. Nor is there anything to show that either of them exist. The only way in which the defendant is able to contact Chan Chi-wah is by telephoning relatives who get Chan Chi-wah to ring back. He does not have a telephone number; if he has one, the defendant does not know his address. According to the defendant Chan cannot get out of Indonesia because he is there illegally and has no trvael document, and for the same reason he would find it hard to swear an affidavit or make an affirmation. As I believe I mentioned earlier there is no receipt for the US$139,000 because it was lost or thrown away. As to the proposed business venture there is not a single document produced to bear witness to it ever having existed. The defendant's version is, to my mind, quite incredible, and if it were not for one other matter I would have said laughable also. The other matter is this and it casts a very serious aspect over the whole case; the defendant has produced what on its face appears to be an I O U or, as he prefers to call it, a promissory note. It is dated the 15th October 1983. It purports to be signed by Ang for and on behalf of the company for which he works, Keenice Ltd. It is on Keenice note paper. It is headed I O U and reads in translation as follows:

"This is to certify that the sum of US$139,000 only was owed to Yeung Kai Pun, holder of Hong Kong identity card number XXXXXXX(X.) I guarantee that the said amount of indebtedness will be repaid before 1st November 1983, failing which I will part with my personal property (as compensation or indemnity thereof) and will be responsible for all damages thus incurred due to the delay of the payment. In witness of the above I herewith insert my signature."

Then follows what is said to be Ang Boon Tye's signature. The original is handwritten in Chinese characters. The defendant has told me that the document came into existence at tile time when he was pressing for the return of the money  on behalf of Chan and it was offered by Ang and signed in the defendant's presence at the offices of Keenice as a device to secure time for payment. Ang says that the signature is not his. In this context it is worth recalling that on Ang's account he supplied what would in effect have been a specimen signature when called upon by the defendant's brother to provide an acknowledgment that the withdrawal of US$20,000 was by way of loan. To my mind it is also not without significance that whereas the defendant claims to have seen the document signed he hesitates to say that he saw the manuscript Chinese characters written out by Ang so that the only comparison which can be made for the purpose of testing the truth or otherwise of his account is of the signature.

5. In resolving the serious conflict of evidence, as I have done in the plaintiff's favour, I have had regard to a number of matters. Whilst I cannot commend the plaintiff for the somewhat slapdash manner in which he conducted this particular piece of business I do commend him for the manner in which he gave his evidence. I was impressed. Likewise, although an attack was made upon Ang for his having once been imprisoned, it would seem for civil debt, I found his account to be not only circumstantial but convincingly delivered. It is true that there are minor discrepancies between his evidence and that of the plaintiff and between his evidence and that which he had said previously in statements to the police and on affirmation. They are not, in my view, material and certainly not sufficient to detract from the quality of his evidence as a whole. Mr. Chan for the defendant makes capital of the fact that the officer to whom this matter was first reported on the 10th November has it down as robbery. There can be little in that point since in the statement that he made on the very same day to the police Ang was in essence giving the same account which he has given to me. Also it seems to me inherently improbable that men who are capable of conspiring to give false information to the police and then to bring a wholly fraudulent action to try to recover money would have so willingly paid it over in the first place. Similarly, I find it hard to believe that a man as unscrupulous as Ang is alleged to be would have proffered the document upon which the defendant places so much reliance. As to the document itself the terms seem singularly inappropriate if it is to evidence the return of money which Ang had received from Chan Chi-wah for the purpose stated. Nor can I understand why it should be that the plaintiff would involve himself to the extent that he has in what was Ang's affair. Why should he provide the money or arrange to provide the money to discharge Ang's debt? Having done so, why should he lend himself to a disgraceful conspiracy to recover it through the Courts. For it is not possible to separate the plaintiff from Ang: if one is involved then so must be the other. It is true that on the plaintiff's account the dealings with the defendant were mainly through Ang, but whereas the defendant said that he never met the plaintiff during the relevant period, it is the plaintiff's evidence that they dined together on two occasions and that the arranging of letters of credit was discussed between them.

6. There is one other piece of evidence which has driven any doubt from my mind. It comes from a Mr. Wong who is also a director of Keenice. He was also present at the restaurant when letters of credit were discussed. But he is vital for a much more important reason. The defendant called his brother to give evidence. The brother confirmed an account given by the defendant that during the time the defendant was in China, having heard that the police were making enquires, was told by the defendant over the telephone that if he went to a certain drawer in the defendant's home he would find the I O U, of which so much has been made. He said he did that and it was he who took that document to the defendant's solicitors. He also denies that in his meeting with the plaintiff and Ang after the defendant had gone to China there was any talk by him of arranging for the letters of credit to be opened. Indeed he says quite the contrary and that he was made subject to all kinds of threats and intimidation. Wong told me that he was asked by Ang to take two documents containing relevant material to the opening of the letters of credit to the MTR in Central to give to the defendant's brother which he did. The brother's evidence, and that of Wong, cannot live together. Mr. Wong is the nearest we have in this case to an independant witness. It has not been suggested that he has any particular axe to grind, nor has any reason been shown why he should deliberately lie to me on such an important question. I believe him. I believe the plaintiff and I believe Ang. I do not believe the defendant and I do not believe the defendant's brother. Quite apart from the matters Which I have mentioned I found both of them to be unsatisfactory in the witness box. The defendant in particular was totally unconvincing on the reasons for his inability to trace Chan Chi-wah, and equally unconvincing on his reasons for Chan Chi-wah's failure to intervene in these proceedings. After all, on the defendant's account, this is Chan Chi-wah's money. I take a very serious view of the defendant's role in this case and also that of his brother. It is not necessary to express any opinion as to when the document at page 71 of the Bundle was put together, but that it was put together by someone other than Ang, I have no doubt. In plain language, it is a forgery. If the matter had not already been referred to the police I would have no hesitation in sending the papers to the Director of Public Prosecutions.

7. Accordingly the plaintiff succeeds in his claim. There will be judgment for the plaintiff in the sum of US$139,000. I make a declaration that the monies standing in the defendant's name in US$ savings account No. 135 at the Nanyang Commercial Bank Ltd. are held on trust for the plaintiff and I order the defendant to cause that money to be paid over to the plaintiff.

8. That sum includes any accrued interest. The balance of the judgment namely US$20,000 will carry interest from 5th November 1983 at current judgment rate. That is agreed by Mr. Chan.   Plaintiff to have costs. Legal aid taxation of Defendant's costs. Order for payment out to plaintiff's solicitors of sum paid into court by way of security.