BILLION SILVER DEVELOPMENT LTD v. NG CHI LAI

HCA 1830/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1830 OF 2006

____________

BETWEEN

____________

_______________

J U D G M E N T

_______________

1.  This is an appeal from the decision of Master Levy to grant unconditional leave to the Defendant to defend these proceedings.

2.  The Plaintiff’s claim is for $1,214,306 being the balance outstanding in respect of a Loan Agreement entered into on 26 September 1994.

3.  At the time the Loan Agreement was entered into the Plaintiff was wholly controlled by the Bank of China, Foshan Branch (the Bank).

4.  The Defendant held a Senior Executive position in the Bank. The loan in question was extended to the Defendant at about the time when he left the employment of the Plaintiff.

5.  There is some controversy concerning the Defendant’s departure from the Plaintiff’s employment in 1998. According to the Plaintiff, he resigned. According to the Defendant, he was dismissed.

6.  Be that as it may, it is not controversial that after he left, he continued to perform services for the Bank in Hong Kong. The employment was to be for ten years.

7.  For these services he received a salary of $30,000 per month.

8.  These moneys were applied by the Plaintiff to repay in part the said loan.

9.  This employment was agreed pursuant to an Oral Agreement.

10.  There is an issue between the parties in respect of this.

11.  The Plaintiff claims that the employment of the Defendant was not a condition of the loan and there is nothing in the memorandum evidencing the loan to suggest that it was.

12.  The Defendant states in his affirmation that his employment was an integral part of the overall agreement between the parties, and that by virtue of his dismissal, he was unable to discharge the loan. Indeed, he lodged a counterclaim for wrongful dismissal. The master struck out the counterclaim on the basis that it was statute barred.

13.  What is germane is that in his defence, the Defendant admitted signing the Loan Agreement and accepting that it was a Loan Agreement.

14.  However, the main issue the subject of this appeal relates to an Acknowledgement the Defendant made on 3 December 2002 that the loan was still outstanding. This was of particular importance as one of the main defences being advanced by the Defendant is that the Plaintiff’s claim is statute barred.

15.  The translation of this Acknowledgement runs to five pages.

16.  The Defendant’s answer to this is that the Acknowledgement was written as consequence of undue coercion, threats and false imprisonment. According to him, some time before the document was written by him, he was requested to attend a meeting at the Bank’s office.

17.  It may perhaps be helpful to extract from the Defendant’s affirmation what transpired at the meeting and thereafter.

“18.  In late-2002, I received a telephone call from a lady, saying that Madam Lin Leilei (林麗麗) the then Deputy Head (副行長) of the Bank of China Foshan Branch, wanted to see me to discuss certain matter.  When I attended the office of the Bank of China Foshan Branch on the Mainland as requested, I was led into a room where there were a total of four gentlemen (one of them was Mr. Lin Leiming (林雷鳴) and a lady.  The lady said she was a lawyer.  There is now produced and shown to me exhibit marked “NCL-10”, copy of Notification of Changes of Secretary and Directors dated 20th June 2002, showing that Mr. Lin Leiming (林雷鳴) was appointed a director of the Plaintiff.  I was given a piece of paper containing several lines of writing in Chinese to the effect that I owed the Plaintiff a sum of HK$2,350,000.  I said that was not correct.  However, I was demanded by the four gentlemen, including Mr. Lin Leiming, and the lady to sign on the paper, otherwise I would not be allowed to leave the room or to leave Foshan City.  Their threatening words and manner scared me greatly.  I was seriously concerned about my safety.  Under their undue coercion, I had no other alternatives but to sign on the paper, which was taken away immediately.  I was not given a photocopy of the paper.  Furthermore, they also told me to write a letter to acknowledge the alleged debt of HK$2,350,000 and to plead for the mercy of the Plaintiff, otherwise the Plaintiff would take further action to cause serious trouble to me and my family.  They said I should write a long letter to give reasons and to plead for the mercy of the Plaintiff.

19.  It was against the background set out in the last paragraph that I subsequently wrote the letter marked exhibit “HQS-4”that was referred to in the Affirmation of Huang Qian Sheng dated 3rd February 2009. I wrote the letter as a result of the undue coercion and threatening words said by the four gentlemen, including Mr. Lin Leiming, and the lady. I was gravely concerned about my safety and the safety of my wife and children. After I had written the said letter, I did not hear anything from the Plaintiff and I thought the Plaintiff acknowledged that I did not owe any money to it. When I received the writ of summons herein, I realised that the Plaintiff had cheated and coerced me into writing the said letter.”

18.  At the hearing before the Master, the Plaintiff did not adduce evidence to rebut the allegations referred to above.

19.  Miss Yang who was representing the Plaintiff placed reliance upon the note in the 2010 White Book being noted 14/4/6.

“Plaintiff’s affidavit in reply - The plaintiff has long been permitted to answer the defendant’s evidence but the case cannot be tried on affidavits, and if the defendant’s affidavit discloses a defence based on disputed facts it is generally useless for the plaintiff to reply.  The court is not bound to require documentary evidence from the plaintiff, if by his affidavit in reply he can show that there is no issue to try (Shurmur v. Young (1889) 5 T.L.R. 155, CA) but if he can demonstrate (e.g. by exhibiting contemporary documents) that the evidence of the defendant is not reasonably capable of belief this will prevent leave to defend being given (see para. 14/4/9).

In Dialworth Ltd. v. TC Organisation (Europe) Ltd. (1998) 75 P. & C.R. 147, CA, it was pointed out that it is necessary to argue the law in such an affidavit.  It is not objectionable, however, to identify any statutory provision or leading authority relied upon.  Surprise upon the defendant must be avoided but this can be done as well by letter or serving a written submission.”

20.  It was her contention that the burden of establishing that there was a triable defence lay upon the Defendant and when the case being advanced was clearly unbelievable, there was no necessity for the Plaintiff to rebut the evidence.

21.  When the Master delivered her Reasons for her Decision, the fact that no evidence had been adduced to rebut the Defendant’s allegations weighed heavily with her.

22.  This being the case, the Plaintiff took out a summons craving liberty to adduce additional evidence to repair this omission.

23.  This summons which I heard at the commencement of the hearing was opposed by Mr Allen Lam for the Defendant. He referred me to Order 58 rule 1(5).

24.  Under this rule, a party seeking to introduce additional evidence in an appeal from a master to a judge must demonstrate that there are special grounds justifying the exercise of the discretion in the parties’ favour.

25.  As Miss Yang who also appeared before for me, was unable to demonstrate the existence of any special grounds I dismissed the summons.

26.  I am not satisfied that it is manifest from the material before me that there was no coercion exercised upon the Defendant requiring him to prepare and sign the Acknowledgement.

27.  In my view, the Master was right to order that unconditional leave should be granted to the Defendant to defend these proceedings.

28.  Accordingly, the appeal is dismissed.

29.  I make an order nisi that the Defendant is have the costs of this appeal.

30.  There will be a certificate for both counsel.