LEUNG SHIU CHONG TOMMY (t/a MAY'S GARMENT FACTORY) v. WU KAM SING AND ANOTHER

IN THE COURT OF APPEAL

C.A. Case No. 22 of 1997

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J U D G M E N T

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Barnett J.:

1. Between November 1989 and April 1991, the Respondent drew 14 cheques and made one cash payment, totalling $513,400.00. Eight of those cheques were in favour of Hop Shing Garment Factory. Three were in favour of the 1st Appellant. There were two cash payments and there is one cheque where the payee has not been traced.

2. It is not in dispute that all these payments were made by way of loans on the part of the Respondent and that they were made for the use and benefit of the factory. Re-payment of these loans was made by way of 10 cheques drawn on the factory by the sole proprietress, a madam Seto King. She is, in fact, the mother of the two Appellants. Those 10 cheques were not paid. By action on the cheques, the Respondent recovered $200,000.00. He then commenced a fresh action for the balance, that is $313,400.00, against the two Appellants, on the basis, first, that the loans were made to them in a personal capacity; alternatively, because the Appellants represented or held themselves out as partners of the factory. After trial in the then High Court, the trial judge found both that the loans were personal to the Appellants and that the Appellants had held themselves out to be or allowed themselves to be represented as partners of the factory. Indeed, although it was not necessary, the judge expressed himself satisfied that the Appellants were in fact partners. The judge gave judgment against both Appellants in favour of the Respondent for $313,400.00. Against that judgment the Appellants now appeal.

3. There are eight grounds of appeal. These eight grounds comprise effectively two complaints. First, the conclusion that the loans were personal to the Appellants was contrary to the Respondent's evidence. Second, the matters relied on by the judge as representations were insufficient to raise an estoppel.

4. As far as the first complaint is concerned, there were indeed in the evidence strong indications that the loans were for the factory rather than for the Appellants personally. As I said, it is common ground that the loans were in fact for the benefit of the factory. As I have also said, the factory's cheques signed by the Appellants' mother were provided as security for the loans. In his evidence, the Respondent himself did not distinguish between the two Appellants and the factory, and at least once said that he made the loans to the factory, to Hop Shing Garment Factory.

5. There were also, however, in the evidence, abundant indications to the contrary. The Respondent did say that he made the loans, gave the cheques, to the Appellants themselves. He said he did this because they were friends. He said he did this because they were becoming importunate and wished to get them off his back. And again, it is common ground that the loans were made after Respondent had ceased doing business with the factory.

6. It was for the judge in the light of all the evidence to reach a conclusion. There was evidence on which he could reach the conclusion he did. In my view, therefore, the first complaint fails.

7. Turning to the second complaint, in the re-amended statement of claim, the Respondent primarily pleaded oral representations on the part of the Appellants. That plea was buttressed by a further plea incorporating the statutory provision in section 16 of the Partnership Ordinance. But there is not, however, in my view, any distinction to be drawn in practice between these two pleadings.

8. The oral representations relied upon might well have been insufficient as unequivocal or unambiguous representations that the Appellants were partners of the factory. I am satisfied, however, that those representations had to be looked at in the context of all the evidence that was before the judge. That evidence was that the Respondent was introduced to and dealt with the Appellants throughout, that is throughout a period when first he was providing business for the factory and later, after he had found the factory was not proving satisfactory, when he was extending the loans to the factory.

9. Then, it is the evidence that the Appellants and their mother, madam Seto King, were all part of the same family. While it is true that madam Seto was signing the cheques which, amongst other things were used for repayment of the loans, those cheques were signed in blank and the Appellants had them available to them. The Appellants also represented that they were, as indeed was the case, owners of the premises in which the factory's business was carried out. And they said that, if the worse came to the worst, the premises could be sold.

10. Overall, it is difficult to see what other conclusion the judge could have come to and indeed, in my view, any other conclusion than the one which he did reach might well have been perverse. I find nothing in the various sub-points which were advanced in support of the overall complaint. I, therefore, would dismiss this appeal.

Mortimer J.A.,

11. I agree, appeal dismissed.

Nazareth V.P.,

12. I also agree and would only add this.

13. Although some of the evidence appears to be confuesd, including some of the evidence given by the plaintiff, the judge was clearly entitled on all the evidence taken as a whole to make the findings that he did. It may also be that he could have addressed the issues in somewhat more of a structured way but his conclusions, in my view, cannot be faulted on that account.

14. The appeal is accordingly dismissed.