FIRST INTERNATIONAL SUPPLIES LTD AND ANOTHER v. KO SHIU MING STANLEY

HCMP 229/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 229 OF 2007

(ON AN INTENDED APPEAL FROM DCCJ NO. 3458 OF 2005)

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D E C I S I O N

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Application for leave to appeal

1. On 31 October 2006 H H Judge Marlene Ng gave judgment for the 2^nd plaintiff Roh Shang Soo (‘Mr Roh’) against the defendant for the sum of $89,200 together with interest and costs.  She dismissed the claim of the 1^st plaintiff First International Supplies Limited (‘First International’) against the defendant for the same amount.  The defendant applied for leave to appeal against the decision.  The application was refused by the judge.  His further application to the Court of Appeal was also refused by Tang VP sitting as a single judge of the Court of Appeal.  The defendant now renews his application for leave to appeal against the judgment.

The plaintiffs’ case

2. The case was initially commenced by First International against the defendant for repayment of the sum of $89,200 being money lent to the defendant.  On the first day of the trial the judge allowed First International to add Mr. Roh as a party to the action.  Mr. Roh is a director and shareholder of First International.  First International was not legally represented and at the trial it was represented by Mr. Roh. 

3. The plaintiffs’ case was that Mr. Roh reached an agreement with the defendant and Mr. Cheung Yuen Fai (‘Mr. Cheung’) to form a company called Golden Glory Hong Kong Limited (‘Golden Glory’) which was to be engaged in the garment business.  As the defendant and Mr. Cheung had experience in the garment business they would be responsible for sourcing business.  Mr. Roh on the other hand would grant a loan to the defendant and Mr. Cheung for the purpose of starting the business.  Mr. Roh lent the money through First International. 

The defendant’s case

4. The defendant claimed that he and Mr. Cheung were Mr. Roh’s employees and were entitled to receive salary of HK$20,000 per month and they would be reimbursed all out-of-pocket expenses incurred by them in the course of business of Golden Glory.  This was denied by the plaintiffs. 

The finding

5. The judge found that it was Mr. Roh who had lent money to the defendant.  She held that there was no employer-employee relationship between Mr. Roh and the defendant.  She made the following finding :

‘53.        I find on balance Mr Roh never agreed to employ Mr Ko and Mr Cheung or give them salaries and out-of-pocket expenses on an outright basis.  I further find the Parties entered into the new garment business venture as co-principals or co-venturers with each making their own contributions and receiving their own benefits.  Mr Ko and Mr Cheung had the benefit of being able to start a new garment business without putting up any initial capital and they could each earn 30% profits (if any) by generating sales and looking after production.  Mr Roh would be able to expand his business into garment trading by putting up financial convenience for the new business during the first six months and by arranging the supply of fabrics, thereby earning 40% profits (if any).’

6. The judge further found :

‘129.       I further accept that at Mr Ko’s/Mr Cheung’s requests Mr Roh through First International made various payments of various amounts under the Loan within the monetary limit of HK$300,000.00 to Mr Ko and Mr Cheung (including the Sums) by (a) cash, (b) cheque, (c) remittance to Mainland China or (d) purchase of air-tickets for their business trips to Mainland China.  Mr Roh deposited such sums into First International’s bank account to pay for Mr Ko’s and Mr Cheung’s drawings and business expenses at their requests…’

7. The judge made the finding after considering the background leading to the agreement, the business experience of the parties and the evidence of the agreement itself.  She also considered the objective evidence which included, among other things, that Mr. Roh, the defendant and Mr. Cheung were shareholders and directors of Golden Glory; the defendant also had signing rights of cheques of Golden Glory; Golden Glory had not filed any tax return for employees; there was no contribution by Golden Glory to any mandatory provident fund for and on behalf of the defendant and also Mr. Roh was not a ‘boss’ of the operation.  She also considered the agreement on repayment and Mr. Roh’s decision to extend the repayment day.

Joinder of Mr. Roh

8. In our view, the defendant was not in any way prejudiced by the joinder of Mr. Roh.  He had all along represented First International and filed documents on its behalf including witness statement.  It was also the defendant’s case that Mr. Roh was the employer and not First International.  The judge allowed him to be joined in order to ensure that the proper party was before the court. 

Challenge on finding of fact

9. The defendant challenged the finding of fact by the judge.  In our view this is a fact sensitive case.  The judge was clearly entitled to make the findings of fact. We cannot see anything wrong with her finding.

New evidence

10. The defendant further asked for permission to adduce further evidence of Mr. Cheung and another witness.  The defendant had the opportunity to do so at the trial.  He is not entitled to adduce further evidence without explaining why such evidence was not called in the first place.  He was legally represented at the trial.

Conclusion

11. Accordingly, we will dismiss the application.