CHOW HOI PING v. CASSON CITY MONEY EXCHANGE CO, LTD

DCCJ 336/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 336 OF 2012

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BETWEEN

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Judgment

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1.  This is an interpleader summons taken out by the bailiff. The hearing was conducted in the Cantonese dialect of the Chinese language, but the parties (both legally represented) preferred that the judgment be delivered in English. After the hearing, I reserved my judgment.

2.  On 3 April 2012, it was adjudged that the defendant do pay the plaintiff the sum of HK$900,000 together with interest thereon at the rate of 8% per annum from 2 February 2012 to 3 April 2012 and thereafter at the judgment rate until payment and HK$7,130 fixed costs.

3.  On 11 May 2012, the plaintiff’s solicitors issued a Writ of Fieri Facias (hereinafter referred to as “writ of fi-fa”) whereby it is stated, inter alia, that:-

“It is required that of the goods of the goods, chattels and other property of the Defendant CASSON CITY MONEY EXCHANGE CO., LIMITED whose registered office is situate at Shop A2, Ground Floor, No.11 Chung On Street, Tsuen Wan, New Territories, Hong Kong by law to be seized in execution you cause to be made the sum of HK$900,000.00 together with interest thereon at the rate of 8% per annum from the 2^nd February 2012 to the 3^rd April 2012 and thereafter at the judgment rate until payment and HK$7,130.00 fixed costs and $1,030.00 for costs of execution ……”

4.  On 18 May 2012, the bailiff seized banknotes amounting to HK$213,300 and RMB210,000 (collectively referred hereinafter as the “banknotes seized”) from Shop D3, Ground Floor Shui Sang Building, 13-19 Chung On Street, Tsuen Wan, New Territories, Hong Kong, which is the 1^st branch of the defendant(hereinafter referred to as the “1^st Branch”). 

5.  The banknotes seized, consist of the following:-

(a) 90 pieces of HK$1,000 banknotes HK$90,000

(b) 225 pieces of HK$500 banknotes HK$112,500

(c) 108 pieces of HK$100 banknotes HK$10,800

(d) 2,100 pieces of RMB100 banknotes RMB210,000

6.  The claimant’s case is summarized as follows:-

(a) Before the execution of the writ of fi-fa by the bailiff on 18 May 2012, he had given banknotes amounting to RMB200,000 and HK$220,859 (hereinafter referred to as “the claimant’s banknotes”) to Miss Kwok Wai Yee of the defendant (hereinafter referred to as “Miss Kwok”) in the 1^st Branchand given specific instructions to Miss Kwok to “remit” RMB380,000 to the account of a Cheung Bik Yuk (transliteration) in the People’s Republic of China;

(b) he is not acquainted with the plaintiff and has nothing to do with the claim between the plaintiff and the defendant; and is, hence, an innocent third party;

(c) the execution and seizure is invalid as the bailiff had gone to the wrong address;and 

(d) as such, the claimant requested that the claimant’s banknotes or a sum of RMB380,000 or its equivalent be returned to him. 

7.  As to the burden of proof, Mr Ho, counsel for the claimant, correctly, in my view, agreed that it was for the claimant to satisfy this court that the claimant’s banknotes or its equivalent should be returned to the claimant.

8.  In support of his case as set out in paragraph 6 above, the claimant filed two affirmations: the affirmation of himself dated 13 June 2012 and the affirmation of Miss Kwok, also dated 13 June 2012.

9.  Mr Ho referred this court to the facts mentioned in the two affirmations mentioned above; and in particular, Mr Ho drew my attention to the following paragraphs in Miss Kwok’s affirmation:-

“Paragraph 7:Because it was remittance by cash deposit, the money was put to one side pending collection by the remittance leader. The staff of the remittance leader would come to collect at about 3:30 pm to 4pm every day. After the staff of the remittance leader has confirmed the collection of money, the remittance leader will, in accordance with the information I have sent by facsimile beforehand to the remittance leader, deposit money into the bank account designated by the customer.”*[1](English translation) (underline added); and

Paragraph 8: “At about 2:45 pm on 18^th May 2012, a Bailiff together with the Plaintiff’s counsel came to the 1^st Branch, showed a Writ of Fi-fa and indicated that they would execute the Writ of Fi-fa.  They also intended to take away from the inside of the counter the Claimant’s money and the salary money Angel and I had lent to the Defendant.  Angel and I immediately informed the Bailiff that my and angel's one month’s salary was included in those money and the majority part of those money belonged to a customer.”*[2] (English translation)(underline added).

10.  The plaintiff contested the claimant’s claim vigorously and submitted that the banknotes seized (including the claimant’s banknotes) are properly seized as they are clearly within the scope of goods liable to seizure under the writ of fi-fa.  In this regard, Mr Chu, counsel for the plaintiff, referred me to s 21D of the High Court Ordinance (Cap 4) which states as follows:-

“(1) The following property is liable to attachment and sale in execution of a judgment, namely, ..…. bank notes …… and all other property whatsoever, whether movable or immovable, belonging to the judgment debtor, and whether the same is held in his own name or by another person in trust for him or on his behalf:

(2) Provided that the following property shall not be so liable, namely, the tools (if any) of the trade of the judgment debtor and the necessary wearing apparel and bedding of him and his family dependent on and residing with him, to a value, inclusive of tools and apparel and bedding, not exceeding $10,000 in the whole.” (underline added)

11.  Mr Chu further submitted that banknotes are chattels personal and referred me to Halsbury’s Laws of Hong Kong, volume 20, paragraph 295.004 which states as follows:

“Chattels personal are, strictly speaking, things movable, but in modern times the expression is used to denote any kind of property other than real property and chattels real. ‘Personalty’ or ‘personal property’ includes many kinds of property unknown to the common law, such as …… bank notes and cheques, ……”

12.  Mr Chu further submitted that for chattels personal, the presumption of law is that the person who has de facto possession also has the property.  In this regard, he referred to Halsbury’s Laws of Hong Kong, volume 20, paragraph 295.022 which states as follows:

“Possession prima facie title The presumption of law is that the person who has de facto possession also has the property, and accordingly, such possession is protected, whatever its origin, against all who cannot prove a superior title.”

13.  Mr Chu, however, agreed that a judgment creditor cannot under a writ of fi-fa seize chattels in which the judgment debtor has only an equitable interest.  He nonetheless emphasized that it is the plaintiff’s case that the defendant did have the whole beneficial interest, and was in fact the owner, of the claimant’s banknotes when the same was seized by the bailiff. In this regard, Mr Chu has also helpfully referred me to the relevant excerpt of the Hong Kong Civil Procedure 2012 as follows:-

“45/1/20 Equitable interest in chattels – The general rule is that a judgment creditor cannot under a writ of fi-fa seize chattels in which the judgment debtor has only an equitable interest; but this rule does not extend to cases where the whole beneficial interest is vested in the judgment debtors.”

14.  Mr Ho made lengthy submissions that the claimant is an innocent third party and has nothing to do with the dispute between the plaintiff and the defendant, his claim should hence be allowed; or else, the plaintiff would somehow benefit at the claimant’s expense.  However, Mr Ho was unable to cite any legal authority or submit any legal basis or principles to support this assertion of his at all.

15.  Mr Chu, in response, submitted that there is no suggestion that the claimant is nothing but bona fide, but the real issue in this case is whether the claimant can discharge his burden to prove that he is the owner (or, in other words, he did retain the whole beneficial interest) of the claimant’s banknotes when they were seized.  I agree with Mr Chu in this regard.

16.  In this regard, Mr Ho submitted that the claimant all along had retained the whole beneficial interest in the claimant’s banknotes because the role of the defendant was in fact not a money exchange/remitting company, but a role similar to a courier in the sense that the defendant will not remit such sum to the PRC account herself; and will simply pass the sum to a “remittance leader” who will execute the instructions of the customers of the defendant.  As such, the defendant, like a courier, was not entitled to deal with the claimant’s banknotes except to deliver them (ie the actual banknotes given by the claimant) to the designated party who, in this case, presumably, is the “remittance leader”.  Hence, Mr Ho therefore submitted that the defendant had never acquired any beneficial interest or title to claimant’s banknotes.  It is Mr Ho’s submissions that under the agreement between the defendant and the claimant if the claimant changes his mind and no longer wishes to have the remittance done; the claimant should be entitled to demand a return of the specific subject matter given for the courier service (ie the claimant’s banknotes, rather than simply a refund of any banknotes amounting to the same value).

17.  Mr Chu contested such allegation and submitted that the relationship between the claimant and the defendant is clearly a contractual relationship under which the defendant agreed to arrange for a sum of RMB380,000 to be deposited into the account designated by the claimant. In support, he referred this court to the following:

(a) In paragraphs 2 and 3 of the affirmation of Kwok Wai Yee*[3] (Transliteration), the business of the defendant is described as follows:-

“The Defendant’s business was foreign currency exchange and remittance and the greatest part of the business was RMB remittance and RMB cash exchange. The RMB remittance could be made with the customer depositing the sum into the bank account designated by the Defendant and, after the receipt of such deposit is confirmed, arrangement will be made for remittance in the agreed way to the receiving bank account designated by the customer. The other mode was that the customer brings cash to the Head Branch or branch of the Defendant and the Defendant will remit in the agreed way to the receiving bank account designated by the customer.”*[4](English translation) ( underline added)

(b) The receipt allegedly issued by the defendant to the claimant states as follows:-

“Amount of Deposit (RMB): ¥380,000

Received from the Remitter _____ Hong Kong Dollars (¥200,000 $220,859) exchange rate: 0.815”*[5]

18.  In light of the above, Mr Chu submitted that it is absolutely clear that, regardless of whatever arrangement the defendant may have to make with other parties (like the remittance leader) to execute the client’s instructions; so far as the agreement between the claimant and the defendant is concerned, the defendant undertakes to "remit" such sum as agreed to the account as designated by the claimant.  This is nothing close to the role of a courier as submitted by Mr Ho.

19.  Mr Chu further submitted that, assuming no seizure had taken place, it could be expected that the defendant can deal with the claimant’s banknotes exclusively.  There is simply no evidence that the defendant was limited in whatever ways to deal with the banknotes.  The defendant could deposit whatever banknotes they want to the designated account.  If the defendant fails to comply its obligation to the claimant, the claimant’s only right is to sue for breach of contract for damages.

20.  Based on the evidence available, I believe the plaintiff must be right that what is agreed between the claimant and the defendant is that the agreed sum (ie RMB¥380,000) is to be deposited into the account designated by the claimant, but not for the defendant to act as a courier to deliver the actual banknotes given (ie the claimant’s banknotes) to any party.  There is nothing in the affirmation of the claimant or the affirmation of Miss Kwok that suggests such alleged agreement for the provision of courier service only was something known to (and not to say, agreed by) the claimant when he passed the claimant’s banknotes to Miss Kwok.  Quite the contrary, as correctly pointed out by Mr Chu, the evidence in these affirmations clearly point to an agreement between the claimant and the defendant for the defendant to remit a sum of money to the claimant’s designated account (regardless of the fact that the defendant may need to take further steps to arrange for such remittance behind the claimant).

21.  The evidence given by Miss Pang Pui Yi of the bailiff who attended the seizure was that the banknotes seized were taken from two drawers and they were arranged in the following manner: Reminbi banknotes were found in one drawer, and they were sorted in bundles, each consisted of 100 pieces of RMB¥100.00 banknotes; and Hong Kong Dollar banknotes were found in another drawer, and they were sorted into bundles according to the denomination of the banknotes.  Save the sentence “the money was put to one side pending collection by the remittance leader……”*[6] (English translation) in paragraph 7 of Miss Kwok’s affirmation, there is absolutely no evidence that supports the claimant’s allegation that the claimant’s banknotes were put to one side, separated clearly from the other banknotes in the defendant’s possession.  The record of transactions of the defendant’s shop also indicated that there were further numerous transactions (including exchange for RMB or deposit for remittance) after the claimant had passed the claimant's banknotes to the defendant.  There was no record of any banknote numbers in the receipt given to the claimant by the defendant.

22.  Hence, it seems to be a mission impossible to identify which banknotes in the defendant’s possession are the claimant’s banknotes once they have been passed to the defendant. As such, it is in fact academic to argue whether the claimant’s banknotes (which can no longer be identified in any event) should be returned to the claimant.  In any event, the fact that the claimant’s banknotes can no longer be identified clearly once they have been passed to the defendant also supports the finding that the defendant is allowed to deal with the claimant’s banknotes exclusively and, hence, has acquired not only possession, but also ownership and the whole beneficial interest of the claimant’s banknotes, as submitted by the plaintiff’s counsel. Alternatively, if the claimant is not trying to claim back the actual claimant’s banknotes, but simply seeking a return of a sum of money equivalent to the sum he had given to the defendant; his remedy only lies in a claim against the defendant for damages for breach of contract. 

23.  Further, on paper, there seems to be an allegation that the bailiff had gone to the wrong address as he had gone to the 1^st Branch rather than the Head Branch.  It was argued that as the address stated in the writ of fi-fa was the address of the Head Branch, so, execution could not be done anywhere else; and hence; the execution done in the 1^st Branch was invalid.

24.  Mr Ho had not pursued this argument in court but he had not expressly waived or withdrawn it either.  Hence, for the sake of completeness, I deal with this argument in this judgment as well.

25.  In response to this argument, Mr Chu cited the relevant excerpt of the Hong Kong Civil Procedures 2012 as follows:

“The writ of fi-fa is the mode for the enforcement of a money judgment by the seizure and sale of the debtor’s goods and chattels. The writ is expressed as a direction to the Bailiff to seize in execution such of the goods of the debtor within that country as may be sufficient to satisfy the amount of the judgment debt .…..” (emphasis added) (paragraph 45/1/7, Hong Kong Civil Procedure)

26.  I agree totally with the plaintiff that although the writ of fi-fa stated the registered address of the defendant to be Shop 2A, Ground Floor, No 11 Chung On Street, Tsuen Wan, New Territories (which is the Head Branch), it does not mean that the Bailiff must go to the Head Branch to execute the writ of fi-fa.  The bailiff is entitled to seize defendant's properties anywhere in Hong Kong. It is the claimant’s own case that both the Head Branch and the 1^st Branch are owned by the defendant as stated in paragraph 2 of the affirmation of Miss Kwok.  As such, the claimant’s argument regarding the “wrong” address does not deserve any merits.

27.  In the premises, I dismiss the claimant’s claim.  There is no reason why costs should not follow the event.  I make a costs order nisi that the claimant do pay the plaintiff’s costs (with counsel certificate), to be taxed if not agreed.  Unless application is made to vary this costs order nisi within 14 days from the handing down of this judgment, it shall become absolute.

28.  I take this opportunity to thank counsel for their helpful submissions.