LEE CHAU MOU t/a CHAU MOU ENGINEERING & CO v. THE INCORPORATED OWNERS OF SUNVIEW INDUSTRIAL BUILDING

LEE CHAU MOU t/a CHAU MOU ENGINEERING & CO v. THE INCORPORATED OWNERS OF SUNVIEW INDUSTRIAL BUILDING

Although Fan had historically collected payments and was held out as Chau Mou's representative, the circumstances surrounding the change of payee and the suspicious documents and conduct were sufficient to put the IO on enquiry; as a result the IO could not rely on apparent authority to discharge their liability and Chau Mou is not bound by Fan's fraud; judgment for plaintiff for HK$200,000 ordered.

Citation
LEE CHAU MOU t/a CHAU MOU ENGINEERING & CO v. THE INCORPORATED OWNERS OF SUNVIEW INDUSTRIAL BUILDING
Parties
Plaintiff (contractor): Lee Chau Mou trading as Chau Mou Engineering & Co; Defendant (building Owners): The Incorporated Owners of Sunview Industrial Building
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
20 December 2007
Case Number
DCCJ4217/2006
Procedural Posture
Civil Action (contract/payment/agency) / Judgment Delivered 20 December 2007
Outcome
Judgment for the plaintiff (Chau Mou)
Legal Topics
Apparent Authority, Agent Fraud, Duty to Enquire, Payment Instructions, Subcontracting, Estoppel
Source Language
EN
Contract Law Agency Fraud Commercial Law Procedural Evidence Apparent Authority Agent Fraud Duty to Enquire +3 more

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Parties

Lee Chau Mou trading as Chau Mou Engineering & Co

Plaintiff (contractor)

The Incorporated Owners of Sunview Industrial Building

Defendant (building Owners)

Procedural Posture

Civil Action (contract/payment/agency) / Judgment Delivered 20 December 2007

Legal Issues

  1. 1 Whether Fan was employee or contractor of Chau Mou
  2. 2 Scope of Fan's actual and apparent authority to collect payments
  3. 3 Whether the Incorporated Owners knew or ought to have known Fan exceeded authority

Ratio Decidendi

Although Fan had historically collected payments and was held out as Chau Mou's representative, the circumstances surrounding the change of payee and the suspicious documents and conduct were sufficient to put the IO on enquiry; as a result the IO could not rely on apparent authority to discharge their liability and Chau Mou is not bound by Fan's fraud; judgment for plaintiff for HK$200,000 ordered.

Court Disposition

Judgment for the plaintiff (Chau Mou)

Orders

  • Judgment entered for HK$200,000 in favour of Chau Mou
  • Interest at 1% above HSBC prime rate from date of writ until judgment day and at the judgment rate thereafter until payment