NAM PO PO, DORIS v. LI FU KEUNG

HCSA81/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO. 81 OF 2003

(ON APPEAL FROM SCTC 34266 OF 2003)

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J U D G M E N T

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1.  This is the defendant’s appeal against the decisionof the Deputy Adjudicator of the Small Claims Tribunal made on 26 November 2003, refusing his application to review the decision of 20 October 2003.

The facts

2.  The relevant facts as appeared from the documentary evidence and as found by the Deputy Adjudicator are summarized below.

3.  The claimant is a resident of Singapore.  She is a shareholder and director of Universal Revenue Ltd (“URL”), which is a Singaporean company incorporated on 1 October 2001.  The claimant came to Hong Kong in late 2001. At the invitation of a friend, Mr Michael Ko, the claimant became a director of a company called Tian San Construction Co Ltd (“TSC”) on 14 December 2001.  Mr Ko is a director and major shareholder of TSC.

4.   On 23 January 2002, Tian San Engineering & Construction Ltd (“TSEC”) was formed.  URL held 75% of the shares in TSEC.  Mr Ko and the claimant each held 15% and 5% of the shares.  URL and TSEC are companies within the Universal group of companies.       

5.  By an Employment Contract dated 6 September 2001, the defendant was employed by TSC as a supervisor to commence on 1 August 2001.  By a Notice of Termination dated 12 January 2002, TSC terminated the defendant ‘s employment with effect from 1 February 2002.

6.  By an Employment Contract dated 18 January 2002, the defendant was employed as site supervisor by TSEC for a two-year period commencing 1 January 2002.  By a letter dated 30 April 2002 addressed to TSEC, the defendant tendered his resignation effective from 30 May 2002.  

7.  Between 1 April and 31 December 2002, the defendant was employed by another company within the Universal group of companies called Universal Engineering & Construction Ltd (“UEC”).  This is evidenced by an Employment Contract dated 1April 2002 under which the defendant was assigned to work as a site supervisor for UEC.  As evidenced by a Chinese handwritten note addressed to UEC, the defendant left UEC on 31 December 2002.

8.  On 8 April 2003, the claimant issued a claim in the Small Claims Tribunal against the defendantfor the sum of $30,000, being a loan extended to the defendant by three payments of $10,000 each made in January, 1 February and 31 March 2002.  The claimant had also issued a similar claim under claim no. 56826/2003 against a Mr Lo Tai Fun.

The claimant’s claim

9.  The claimant’s case as appeared from the Claim and her two statements is as follows.

10.  Shortly after the claimant became a director of TSC, a creditor’s winding-up petition was presented against the company.  TSC was owing wages to its employees.  The documents adduced by the defendant and Mr Lo in the Tribunal below also show that they had brought a claim in the Labour Tribunal against TSC, and succeeded in obtaining an award in their favour on 25 January 2002.

11.  TSEC was formed to take on a water works contract, which was awarded to it on 1 February 2002. Offers of employment were made to some of the former employees of TSC, including the defendant and Mr Lo.  During a meeting with the claimant, the defendant requested for a loan for himself and also on behalf of Mr Lo.  Eventually, the claimant agreed to make personal loans to the defendant and Mr Lo to be repaid when they had been paid their wages by TSC or when they left the employment of the Universal group.

12.  The claimant instructed her solicitors, Fong & Ng to make payments to the defendant and Mr Lo between January and March 2002.  The payments were paid out of money the claimant transferred from Singapore and deposited in the client’s account of Fong & Ng. 

13.  The defendant and Mr Lo left their employment on 31 December 2002 and 10 February 2003 respectively, whereupon the loans became repayable. 

14.  At the trial, the claimant produced two bank payment slips showing two sums of $10,000 each, were paid into Mr Lo’s and the defendant’s bank accounts on 15 and 16 March 2002 respectively.  The claimant also produced a statement from Mr Richard Tsun, a former partner of  Fong & Ng, indicating that between November 2001 and February 2002, Fong & Ng had received sums of money from URL and had also made various payments out of the money deposited as instructed by URL.

The defendant’s defence

15.  The defendant disputed the claim. In his statement of defence, he denied having requested or obtained any loan from the claimant, and said he had incurred expenses on behalf of TSEC while working for it. 

16.  The defendant’s bank records reveal cheque deposits of $10,000 each were made on 1 February and 16 March 2002.  Mr Lo’s bank records also show cheque deposits of $10,000 each were made on 1 February and 15 March 2002. 

17.  The defendant said he had not received any payment from the claimant in January 2002.  As to the two payments in February and March 2002, he said they were reimbursements for expenses incurred for TSEC and not loans.  Mr Lo, whose case was tried together with the defendant, adopted a similar defence.

The Deputy Adjudicator’s decision

18.  The Deputy Adjudicator found the claimant credible and accepted her evidence.  He disbelieved the evidence of the defendant and Mr Lo.  The Deputy Adjudicator however found that the claimant had failed to discharge the evidential burden in respect of the first payment of $10,000 each to the defendant and M r Lo in January 2002.  As for the payments of $10,000 in February and March 2002, the Deputy Adjudicator was satisfied that they were personal loans from the claimant to the defendant and Mr Lo.  He rejected the defendant and M. Lo’s assertion that they were reimbursements in respect of expenses they had incurred for the company.  The Deputy Adjudicator therefore made an award in favour of the claimant against the defendant and Mr Lo for the sum of $20,000 each together with interest and costs.

19.  On 24 October 2003, the defendant applied for a review of the Deputy Adjudicator’s decision.  The application was dismissed on 26 November 2003.  On 4 December 2003, the claimant applied for leave to appeal against the Deputy Adjudicator’s decision of 26 November 2003.  On 11 February 2004, Deputy Judge To granted leave to appeal.

The appeal

20.  The defendant’s Notice of Motion filed on 24 February 2004 contains two grounds of appeal.  They are:

(1)     The Deputy Adjudicator erred in law in ruling inadmissible or failing to give any or any sufficient weight to, the statement of Mr Richard Tsun, which contains admissions adverse to the case of the claimant.

(2)     The Deputy Adjudicator erred in law in drawing the inference that the money paid to the defendant was paid by the claimant in her personal capacity, in view of the claimant’s statement attached to the Claim.

The first ground of appeal

21. The statement made by Mr Richard Tsun, on which the defendant’s first ground of appeal rests, reads as follows:

“10 October 2003

Universal Revenue Ltd (“Universal Revenue”)
Attn: Ms Nam Po Po

Dear Sirs,

At your request, I confirm that during the period from November 2001 to February 2002 when I handled the instructions from Universal Revenue at Fong & Ng, a law firm in which I was previously a partner, there has been certain sum of monies paid into the client’s account of Fong & Ng by Universal Revenue, and subsequently paid out for settlement of various payments as directed by Universal Revenue during the said period.

Yours sincerely

Richard Tsun”

22. Mr Tsun did not testify at the trial.  The Deputy Adjudicator in his oral reasons delivered at the conclusion of the trial and in his written Reasons for Decision had referred to Mr Tsun’s statement.  The Deputy Adjudicator said that since Mr Tsun had not attended court to testify and be cross-examined, his statement carried little or no weight and little reliance could be placed on it: see paragraph 19 of the oral reasons and paragraph 16 of the written Reasons for Decision.

23. Evidently, the Deputy Adjudicator had not excluded the statement of Mr Tsun from the evidence of the case.  Hence, the defendant’s complaint that the Deputy Adjudicator had wrongly excluded the statement from evidence, and Mr Fung’s submissions on this point, are misplaced. 

24. The truth of the matter is the Deputy Adjudicator had accepted the statement as evidence, but had decided to place no reliance on it for the reason that the maker, Mr Tsun, did not attend court to testify and the contents of the statement had not been tested by cross-examination.  In general, the question of what weight to be placed on a piece of evidence is a matter that a trial judge is entitled to form a view on.  In the present case, the Deputy Adjudicator had given reasons for his decision to attach little or no weight to the statement.  In my view, his decision is not unjustified.  There is no basis for interference on appeal.

25. The defendant argues that the statement of Mr Tsun is in substance an admission adverse to the claimant.  I do not agree.  The effect of what was said in the statement is that URL had made payments into the client’s account of Fong & Ng, and money had been paid out of Fong & Ng’s client account on the instruction of URL.  It did not necessarily negative the claimant’s evidence that money she caused to be transferred from Singapore was kept in the client’s account maintained with Fong & Ng.  At the same time, the claimant had made statements and also testified at the trial on how she kept and utilized the various accounts for her personal expenses and expenditure for her business ventures in Hong Kong.  The claimant’s evidence was accepted by the Deputy Adjudicator.  The Deputy Adjudicator’s findings of facts in this regard are not opened to challenge on appeal.

The second ground of appeal

26.  The defendant’s second ground of appeal is that the finding that the money came from the claimant in her personal capacity is at variance with the statement attached to the Claim Form.  In the statement attached to the Claim Form, it was stated that the Directors of URL agreed to extend interest free loans to the defendant and Fong & Ng had on their behalf issued cheques and deposited them with the defendant’s bank account.  However, in two undated statements made by the claimant, which had been accepted as evidence at the trial, the claimant had explained how the loan was requested for and how and why the loan came to be made by three payments. 

27.  Theclaimant’s statements as well as the Claim Form were before the Deputy Adjudicator.  Having regard to all the evidence before him, the Deputy Adjudicator, as he is entitled to, accepted the evidence of the claimant and found that the two bank deposits were loans from the claimant.  The defendant’s second ground of appeal is effectively seeking to challenge the Deputy Adjudicator’s finding of fact, which is not permissible under the Small Claims Tribunal Ordinance.  This is not a case where it can be said that the finding of fact is not supported by any evidence at all.  It is also to be noted that the defence case in the Tribunal had throughout been that the two bank deposits were reimbursements by TSEC.  It is not the defendant’s case that the payments were made by URL. The source of the money in Fong & Ng’s client account standing in the name of URL was never in issue at the trial below.  Had it been the claimant might be in a position to explain more or to adduce further evidence, as she had sought to do at the beginning of the appeal but was not allowed to in view of section 28(2)(b)(ii) of the Small Claims Tribunal Ordinance. 

Conclusion

28.  For the reasons mentioned above, the defendant’s appeal has no merits.  Accordingly, I dismiss the appeal.  Applying the normal rule of costs follow event, I make an order nisi that the defendant pays the claimant the costs of this appeal, to be taxed, if not agreed.  The order nisi will be made absolute 14 days after the handing down of this Judgment.