CHIU TIN YAU LESLEY v. DICKSON NG

HCA105/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 105 OF 2004

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BETWEEN

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REASONS  FOR  JUDGMENT

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1.  On 10 November 2009, I allowed the plaintiff’s claim and entered judgment in his favour against the defendant for HK$2.5 million with interest at judgment rate from the date of writ to payment. I also ordered the defendant to pay the plaintiff costs of the action, including all costs reserved, to be taxed if not agreed. These are my reasons.

The dispute

2.  The plaintiff is a businessman. He was one of the proprietors of 東方泰隆建築裝飾工程有限公司 (“the Company”) and a director of Wing Fung Cheung Company Limited (“WFC”).

3.  The defendant is also a businessman. It is the plaintiff’s case that he came to know the defendant through the introduction of a close friend.

4.  The present action arose out of a sum of HK$2.5 million that the plaintiff paid the defendant on 29 April 2002 (“the Sum”).

5.  The plaintiff’s pleaded case is that pursuant to an oral agreement between the parties (“the Oral Agreement”), he paid the Sum to the defendant as the deposit in the form of a performance bond for the decoration work of a building construction project in a housing development known as 中國北京蝶翠華庭 in Beijing (“the Decoration Project”). The Project however did not materialize. The consideration for the Sum had therefore totally failed. Despite repeated requests, the defendant had failed to repay him.

6.  The defendant’s pleaded case is that the Decoration Project and the Sum were two different matters.

7.  In or about April 2002, the plaintiff acting for the Company approached the defendant and offered to carry out the Decoration Project. Through his introduction, the Company submitted a proposal dated 15 May 2002 to the owners but was not accepted.

8.  In late April 2002, the plaintiff acting for the Company requested the defendant to assist the Company in converting and transferring the Sum to the Mainland. Later the defendant collected a cashier for the Sum from a man at an office in Central. That man asked him to acknowledge receipt of the Sum as the deposit for the Decoration Project, which he did, on the pretext that the receipt was only meant to prove that the defendant received the Sum and nothing more. In or about mid-May 2002, the defendant paid a sum of RMB2.5 million to the plaintiff on behalf of the Company in Beijing. Upon the plaintiff’s request, the defendant paid him a further sum of RMB200,000 on or about June 2002, being the difference in the conversion rate between Hong Kong dollars and RMB for the Sum.

Absence of the defendant

9.  At the pre-trial review on 17 September 2009, the defendant was absent. His son, Mr Ng Kai Shing (“Mr Ng”), appeared and told the court that he was being detained in Beijing. He was not sure when his father would be released.

10.  At trial, the defendant was again absent. By letter dated 5 November 2009, Mr Ng applied for a 3 months’ adjournment on the ground that his father is still being detained in Beijing.

11.  I directed that the application be dealt with on the first day of the trial. But Mr Ng did not appear. I took it that the application had been abandoned. The trial therefore proceeded in the defendant’s absence.

The issue

12.  The issue before me is : whether the Sum was the deposit for the Project, which did not materialize or whether it was received by the defendant and repaid by him to the plaintiff in the circumstances as he alleged.

Evidence

13.  The plaintiff gave evidence as follows :

“1.  I am the Plaintiff in these proceedings.  I first met the Defendant sometime in 2001 through the introduction of a close friend.  The Defendant gave me an impression that he had a number of real property investments in Mainland China.

2.  In about April 2002, the Defendant approached me about one of his investments in Beijing, China, a building development project called ‘中國北京蝶翠華庭’.  He told me that he was one of the proprietors of the project.  He invited me to tender for certain decoration works in the project.  As such, he asked me to provide a deposit in the form of a performance bond for the decoration works in the project in the sum of Renminbi (‘RMB’) $7,000,000.00.  I told him that I did not have such amount available at that time.  He then said I could just pay him a deposit for a lesser sum of HK$2,500,000.00 to which I agreed.  It was orally agreed between us that if the tender for the said decoration works was not successful, the said sum of HK$2,500,000.00 would be fully repaid to me by him.

3.  By a letter dated 22 April 2002 sent by me to the Defendant, I confirm my agreement to pay him on or before 1 May 2002 the said sum of HK$2,500,000.00 as the deposit in the form of a performance bond for the said decoration works.  I did mention in passing in the letter that any insufficient part would be settled out of funds from other previous joint ventures between us.  In fact, that was an obvious verbal mistake on my part.  What I really meant was that any insufficient part would be settled out of funds from future (and not previous) joint ventures between us.  This particular incident was the first ever joint venture between me and the Defendant.  There was no previous one.  There was no subsequent one either.  That was the only transaction between us.

4.  On 29 April 2002, I faxed a note (‘the Note’) written on a copy of my said letter dated 22 April 2002 referred to in paragraph 3 above to one Mr. Lui Kwok Keung (‘Mr Lui’) in Hong Kong.  I asked him to help me issue out of funds from my personal bank account in Hong Kong a cashier’s order in the sum of HK$2,500,000.00 and give it to the Defendant.  I told him that this sum was intended to be the deposit in the form of a performance bond for decoration works in a building development project in Beijing, China.  Pursuant to my instructions, Mr Lui did arrange and give to the defendant on 29 April 2002 a cashier’s order in the sum of HK$2,500,000.00 and the Defendant duly acknowledged the receipt of it (‘the Acknowledgment of Receipt’).

5.  Sometime later, I noticed that the tender for [the Decoration Project] did not materialize and I started to ask the Defendant for full refund of the sum of HK$2,500,000.00.  At first, he told me he needed some time to arrange the refund.  As he was introduced to me by my very close friend, I did not press him too hard in the very beginning.  Then, in or about April 2003, upon repeated requests and demands by me, the Defendant showed me a copy of a cheque in the sum of RMB$10,000,000.00 … and promised me he would repay me forthwith upon receiving the fund represented by the cheque.  Later, the Defendant told me that the cheque was not good and he could not get the money to refund me in turn.

6.  I was one of the proprietors of [the Company].  However, this particular transaction was just between me and the Defendant and I was not acting on behalf of the Company.  Anyway, neither the Company nor I have ever received the sum of RMB$2,500,000.00 from the Defendant in or about mid May 2002 as alleged by the defendant or at all.  Further, neither the Company nor I have ever received the sum of RMB$200,000.00 from the Defendant on or about 19 June 2002 as alleged by the Defendant or at all.

7.  I have never, on behalf of myself or the Company, requested the defendant to assist in converting and transferring a sum of HK$2,500,000.00 to Mainland China.  I could have easily achieved this through the banks in Hong Kong if I needed to.  It is absurd that the Defendant could have fabricated such an incredible version of event to avoid repayment to me.”

14.  The Note that the plaintiff referred to read :

「  4–22–2002

吳國禎先生：

現本人趙天祐同意于2002年5月1日前支付給吳國禎先生港幣貳佰伍拾萬元正作為貴司在北京蝶翠華庭楼盤裝飾工程的施工保証金，余下不足部份請吳國禎先生在本人與貴司以往合作項目的款項中支付。

謝謝。

趙天祐

敬上.

强哥：你好！這是本人寫給吳国禎先生的承諾書，麻煩你到銀行從本人戶口開出一張銀行本票港幣貳佰伍拾萬元正給吳先生作為北京蝶翠華庭楼盤裝飾工程的施工保証金，代工程開始後便可原数轉回。

麻煩你了，謝謝。

天祐

4/29/02」

15.  Mr Lui is the manager of WFC. He corroborated the plaintiff’s evidence by saying :

“1.  I am the manager in [WFC].  Chiu Tin Yan Lesley (‘Chiu’), the Plaintiff in these proceedings, is one of the directors of WFC and hence one of my bosses.  As Chiu spends most of his time in Beijing, China and the United States of America, he would ask me to assist him in his personal matters in Hong Kong from time to time.

2.  On or about 29 April 2002, I received a telephone call from Chiu who was in Beijing at that time.  He told me he has just faxed me [the Note] and asked me to arrange to issue a cashier’s order in the sum of HK$2,500,000.00 in favour of one Mr. Ng Kwok Ching being the deposit in the form of a performance bond for decoration works for a building construction project in Beijing, China.  I did so according to Chiu’s instructions and awaited for Mr. Ng to come to my office to collect the cashier’s order.  Mr. Ng is the Defendant in these proceedings.

3.  Later that day, Mr. Ng Kwok Ching arrived at my office.  As I had never met him before, I asked to see his Hong Kong Identity Card in order to verify his identity.  I also telephoned Chiu and let him talk to Mr. Ng Kwok Ching direct over the phone.  After Mr. Ng’s identity had been verified, I prepared [the Acknowledgement of Receipt] and asked Mr. Ng to acknowledge receipt of the cashier’s order by signing on the acknowledgement.  I then gave him the cashier’s order.

4.  Sometime in April 2004, I was approached by Mr. Peter Cheung, Solicitor for the Plaintiff in connection with these proceedings.  I was shown and explained the contents of the Defence of Defendant herein dated 6 April 2004, and in particular, paragraph 2(4) thereof.  The relevant parts that concerned me were not correct.  I remember clearly Mr. Ng did not ask for the reason for the receipt.  I had never told him or said anything to him to the effect that the reason did no matter and the receipt was only to prove that he had received the money.  Such accusations against me are totally fabricated and untrue.”

16.  The Acknowledgment of Receipt was couched in these terms :

「茲收到趙天祐先生交來道亨銀行本票號碼004950港幣貳佰伍拾萬元正(HK$2,500,000.00)作為北京蝶翠華庭樓盤裝飾工程的施工保証金。」

17.  I find the plaintiff and Mr Lui credible witnesses. Their evidence is clearly supported by contemporaneous documents, that is, the Note and the Acknowledgment of Receipt. I accept their evidence in full.

18.  The defendant being absent, his witness statement does not stand as evidence. I will give no weight to the documentary evidence that he had adduced either. In any event, I am unable to accept his case on why he signed the Acknowledgment of Receipt, which is contrary to common and commercial sense. And I can see no reason why the plaintiff would need to enlist the defendant’s assistance in converting and transferring the Sum into the Mainland as alleged.

19.  I find that the plaintiff paid the Sum to the defendant pursuant to the Oral Agreement and that the consideration for the Sum had totally failed as the Project did not materialize. The defendant must return the Sum to the plaintiff.

Conclusion

20.  For the above reasons, I made the orders referred to in paragraph 1 above.