CHAN KIN HUNG v. WAN WING KIT, LOUIS AND ANOTHER

bjbj DCCJ 6288/2006 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 6288 OF 2006 -------------------- BETWEEN CHAN KIN HUNG Plaintiff and WAN WING KIT, LOUIS 1st Defendant LAW KIN MAN 2nd Defendant -------------------- DCCJ 6082/2006 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 6082 OF 2006 -------------------- BETWEEN CHAN KIN HUNG Plaintiff and LAW KIN MAN Defendant -------------------- (Consolidated pursuant to the Order of Master R. Lai dated 15th August 2008) Coram: Deputy District Judge R. Yu in Court Date of hearing: 26th, 27th, 28th, 31st May and 10th September 2010 Date of handing down Judgment: 23rd December 2010 JUDGMENT On 11 September 2006, the Plaintiff paid a sum of HK$700,000 to the 1st Defendant via the account of the 2nd Defendant. The Plaintiff now claims refund of the said sum of HK$700,000 from the 1st and/or 2nd Defendant. The cause of action against the 1st Defendant is that of duress, oppression or extortion. No particular has been pleaded in the Amended Statement of Claim. It is now clear from the evidence that the basis of the Plaintiff s claim is that in the morning of 11th September 2006, in a telephone conversation between him and the 1st Defendant, the 1st Defendant forced him to pay HK$700,000 by threat. This is denied by the 1st Defendant. The 1st Defendant has a complete different account of the telephone conversation. It is the case of the 1st Defendant that he has beneficial interest in Flat 5 on 17th Floor of Tower I, the Metropolis Residence, No. 8 Metropolis Drive, the Metropolis, Kowloon ( the said property ), which was registered in the name of CSTA Merit Limited, which was the vehicle and/or nominee holding the said property for the 1st Defendant and one Miss Siu Mui Wah ( ). On 11th September 2006, he reached an oral agreement with the Plaintiff in the said telephone conversation that in consideration of the 1st Defendant s abandonment of his beneficial interest of and in the said property, the Plaintiff would pay him the said sum of HK$700,000. Further, it is a term of the oral agreement that the 1st Defendant had to vacate the said property immediately upon payment ( the September Agreement ). And sometime before the trial, the 1st Defendant has executed a declaration that he relinquished all his interest in the said property. The Plaintiff denies the September Agreement. In the alternative, the Plaintiff contends that the September Agreement is void and of no effect as it is not in writing. This argument has been abandoned by the Plaintiff, and at the closing, Mr. Ng, counsel for the Plaintiff only argues that the September Agreement is a separation agreement and is void against public policy. As an alternative basis for the claim against the 1st Defendant, the Plaintiff said the money has been paid to the 1st Defendant without consideration or without any valid consideration. That is denied by the 1st Defendant and Mr. Yee, counsel for the 1st Defendant submits that there is no legal basis of this head of claim. The Plaintiff also claims against the 2nd Defendant for the said sum of HK$700,000. The Plaintiff claims that the 2nd Defendant conspired with the 1st Defendant to exert the duress, oppression or extortion. No particular of the conspiracy has been stated in the Statement of Claim and it appears that the Plaintiff relies on the fact that the 2nd Defendant was an agent for the 1st Defendant to receive the said payment of HK$700,000. It is not very clear if the Plaintiff also claims that the money was paid to the 2nd Defendant without any consideration or valid consideration. I presume that is argued as paragraph 4 of the Amended Statement of Claim avers that the 2nd Defendant received or accepted the payment without a lawful reason or without a reason as permitted by the law. The 2nd Defendant does not dispute that he had received the HK$700,000. It is his case that he does not know about the agreement or arrangement between the Plaintiff and the 1st Defendant leading to the payment. He was at the material time a mere agent to receive the payment on behalf of the 1st Defendant. He had already paid the HK$700,000 to the 1st Defendant and he had no liability to repay the Plaintiff even if the 1st Defendant may not receive or keep the money. Mr. Yee submits that the factual disputes herein are relative easy to resolve while the law involved is complicated. And he has provided me with a detail submission on the diverted opinion on whether there is a cause of action on money paid with no consideration. On the facts, Mr. Ng has provided me with a 43 pages of written closing. A lot of those paragraphs deal with analysis of the credibility of the witnesses. I am afraid both facts and legal issue are complicated. Evidence The Plaintiff called PW1 to give evidence. PW1 adopted her witness statement dated 8 July 2009 and her supplemental witness statement da O) and the 1st Defendant paid her a monthly maintenance of HK$25,000 until they separated in September 2006. Around 2001, PW1 came to know the Plaintiff. The Plaintiff wanted to date her and at around 2004, she accepted the Plaintiff and they became lovers. The Plaintiff provided her with maintenance of about HK$1 million every year. PW1 wanted to separate with the 1st Defendant, who refused. As a result, she had two lovers at the same time. She spent most of her nights with the Plaintiff and often stayed overnight at the residence of the Plaintiff. Her meeting with the 1st Defendant was rare. At nighttime, she would not pick up call from the 1st Defendant. PW1 also denies that she had co-habited with the 1st Defendant. According to PW1, towards the end of January 2006, the 1st Defendant discovered that she dated the Plaintiff. The 1st Defendant requested her to break up with the Plaintiff. PW1 made it clear to the 1st Defendant that if she gave up the Plaintiff, she would not have further maintenance from the Plaintiff in the sum of about $1 million per year. It is the evidence of PW1 that the 1st Defendant agreed to pay her HK$1 million as compensation for her breaking up with the Plaintiff. The agreement was reached in about January 2006 and the 1st Defendant requested PW1 to cancel a tour with the Plaintiff to Australia. PW1 said the 1st Defendant paid her the HK$1 million by two installments. The 1st payment was made on the 4th day of the Chinese New Year in 2006, for HK$600,000. And in about July 2006, the 1st Defendant paid the balance of HK$400,000. On cross-examination, PW1 said the HK$1 million paid to her was for her agreement to leave or break up with the Plaintiff. She had not purchased any property together with the 1st Defendant. She denied that the 1st Defendant had any beneficial interest in the said property. PW1 also explained that she had invested in property market since 1990 and she had acquired at least 11 properties including the said property, which she acquired on 21st July 2006. PW1 claimed that she used her own money to purchase all these properties. She agreed with Mr. Yee that the 1st Defendant went with her to inspect the said property before she bought it, and the 1st Defendant had introduced her to the lawyer and arranged the acquisition of CSTA Merits Limited. PW1 said on 9th February 2006, the Plaintiff met her again while she was exercising at California Fitness Centre in Central. She told the Plaintiff that a doctor paid her HK$1 million for her to stay with him. PW1 did not inform the Plaintiff at this stage about the 1st Defendant. Until this moment, the Plaintiff and the 1st Defendant never met. While in California Fitness Centre, PW1 said she called the 1st Defendant asking to separate with him, who refused. On 9 February, PW1 left California Fitness Centre with the Plaintiff who gave a diamond ring to her. And after leaving the Plaintiff, PW1 returned to the 1st Defendant again. Since 10th February 2006, the 1st Defendant often told PW1 that if the Plaintiff kept looking for her, he would give him trouble. In her witness statement, PW1 said that the 1st Defendant forced him to disclose the working address, telephone, residential address and family conditions of the Plaintiff, including how many children he had. On cross-examination by Mr. Yee, she was not very certain of the information she gave to the 1st Defendant. In particular, she denied having informed the 1st Defendant the names of the Plaintiff s children and the school they at ong Kong Island. As she was used to live in Kowloon, and her parents also live in Kowloon, she purchased the said property and lived there hoping to hide away from the Plaintiff. PW1 also claimed that between May and February 2006, the 1st Defendant asked her to stay in Guangzhou to hide away from the Plaintiff. When she stayed in Guangzhou, the 1st Defendant arranged a friend to look after her. But she kept telephone communication with the Plaintiff. In August 2006, PW1 invited the Plaintiff for dinner and they had more communication. On 10th September 2006, she stayed overnight at the Plaintiff s house. The Plaintiff again requested her to leave the 1st Defendant. Although PW1 mentioned the 1st Defendant in her witness statement, on cross-examination, she said she did not want the Plaintiff to know that she kept her relationship with the 1st Defendant and only told the Plaintiff that she was keeping a relationship with the doctor she mentioned to the Plaintiff in California Fitness Centre. PW1 told the Plaintiff that she could not leave the doctor as she had disclosed the information of the Plaintiff to the doctor. If she left the doctor, he would give trouble to the Plaintiff. The Plaintiff was very angry and he called his driver, one Mr. Leung ( Mr. Leung ) who was a retired policeman to have a discussion together. Mr. Leung told PW1 that if the Plaintiff did not know who the doctor is, this would put the Plaintiff and his family members in a disadvantageous position. In the morning of 11th September 2006, at about 10 a.m., PW1 used her mobile phone to call up the 1st Defendant. She then handed over the mobile phone to the Plaintiff for him to talk with the 1st Defendant. In the witness statement at paragraph 14, PW1 said after the Plaintiff put down the mobile phone, he told her that: bf}" l g" 1\ \s N N)R er own safety. The Plaintiff did not press PW1 for the information and told PW1 that the doctor asked for HK$700,000 as separation fees. I note that PW1 does not know the details of the telephone conversation between the Plaintiff and the 1st Defendant. Indeed, when she was cross-examined by Mr. Yee, she said after handing over the mobile phone to the Plaintiff, she felt very sad and cried in the toilet while the Plaintiff talked over phone with the 1st Defendant. After this telephone conversation, she had an appointment to meet the Plaintiff near his office at 2:30 p.m. PW1 returned to the said property. She asked the 1st Defendant to go to her house in order to persuade him not to ask for money from the Plaintiff and missed the appointment with the Plaintiff. When the 1st Defendant was at the said property with PW1, the Plaintiff also went to the said property and knocked at the door. PW1 refused to open the door as she wish to persuade the 1st Defendant to give up the payment. The 1st Defendant insisted to get the payment from the Plaintiff. When the Plaintiff called PW1 at her mobile phone claiming that he had already reported to Police, PW1 immediately went to see the Plaintiff and the 1st Defendant also left the said property. PW1 met the Plaintiff at the main lobby of the building where the said property was situated. PW1 said the Plaintiff insisted that the money must be credited to the account of the 1st Defendant. But the 1st Defendant told her that the money must not be credited into his account. On the payment method, PW1 had an argument with the Plaintiff and their argument became so heated that Mr. Leung had to pacify them. Finally, the Plaintiff agreed not to transfer the money directed into the account of the 1st Defendant. PW1 went with the Plaintiff to the branch office of Hang Seng Bank at 1st Defendant gave the account of the 2nd Defendant to PW1 and the Plaintiff credited a cash cheque of his company into the account of the 2nd Defendant for HK$700,000. After the payment, PW1 said the 1st Defendant visited her with a friend. They asked her to leave the Plaintiff and threatened to harm the Plaintiff. But PW1 kept the relationship with the Plaintiff. It is the evidence of PW1 that after this incidence, the Plaintiff kept asking her the information of the doctor. She also refused to give. In December 2006, the Plaintiff issued the first action against the 2nd Defendant (Defendant in DCCJ 6082/2006), claiming refund of HK$700,000. The 1st Defendant told PW1 that he was angry and would resort to violence. Thereafter, the Plaintiff told PW1 that he was followed. Later, at the go down of the Plaintiff s company, a dog had been chopped. As PW1 was worrying that the 1st Defendant would injure the Plaintiff, she gave the name and address of the 1st Defendant to the Plaintiff and clarified wi ated 24 June 2009 as the evidence in chief. According to his evidence, in 2001, he knew PW1 at the Big Boss Nightclub. Her English name was La La (and he called PW1 La La or in his diary). They became friends and had regular meetings. At about the beginning of 2002, PW1 looked very unhappy. She told him that she knew a person in the food market who was a hostile person and did not keep his promise. She did not want to keep the relationship with him. The Plaintiff dated her and they became lovers. In mid 2003, PW1 looked unhappy again. PW1 told the Plaintiff that she was maintained by her friend at the food market, with a monthly maintenance of HK$25,000. But he did not treat her well. The Plaintiff asked her to stay with him and would give her monthly maintenance of HK$50,000. PW1 said that person was very troublesome and would not let her leave. But the Plaintiff did co-habit with PW1 at her house then at Royal Peninsula ( could not go to Australia with him. She was crying in the telephone and said she had to get marry, and hang up. The Plaintiff went to Australia alone and he tried to call PW1 by phone, but could not locate her. On returning to Hong Kong, the Plaintiff met PW1 at California Fitness on 9th February 2006. PW1 told him that a doctor gave her HK$1 million for her to marry him. But she felt that the Plaintiff treated her best. The Plaintiff invited her to return the HK$1 million to the doctor and stay with him. They left California Fitness and went to Tsim Sha Tsui. On the way, PW1 said she wanted to return the HK$1 million to the doctor. As it was late, the Plaintiff suggested it could be dealt with in the following day, which PW1 agreed. He also bought a ring for PW1 and returned home with PW1. On 10th February 2006, the Plaintiff sent PW1 back to her mother s house. Since she had to return the HK$1 million to the doctor, the Plaintiff thought he should buy a house as a gift for her. At that moment, the Plaintiff suspected the doctor was not a doctor but the person PW1 mentioned who do business in the food market. Later in the afternoon, he called PW1 again and PW1 told him she would stay with the doctor. They had no more contact until August 2006. On 12th August 2006, PW1 invited the Plaintiff to meet her at a restaurant. Since then, they had contact again. And since 24th August 2006, PW1 stayed overnight at the Plaintiff s place regularly. On 10th September 2006, while PW1 was staying in the nd the doctor knew that she was dating with the Plaintiff, and he forced PW1 to let him have the personal information of the Plaintiff. PW1 was worrying that the doctor could cause trouble to the Plaintiff and afraid to terminate her relationship with the doctor. She also said the doctor had some crooks ( t doctor knew his and his children s information. He refused to let PW1 leave and asked PW1 to tell him the information about the doctor. PW1 refused to tell him the personal particular of the doctor. He invited Mr. Leung to have a discussion. After discussion, in morning of 11 September 2006, PW1 made a call to that doctor with her mobile phone and on getting the doctor, she told him that the Plaintiff had something to talk to him. She then handed the telephone to the Plaintiff. In the telephone conversation, the doctor said his surname was . The Plaintiff claimed that he had the habit of keeping diary. For this material telephone conversation between the Plaintiff and the 1st Defendant, He had recorded the event of this conversation in his diary and he had also recorded the details of the conversation in a new diary. I shall come to the 2 diaries later. For convenience, I set out the conversation as recorded by the Plaintiff in his new diary: KNMR _jhy s(WyYx hsY`O be*e PRQsY `O Y {k`O `Of}" /f`O ~^t^ N gf}L /n/f N/f c~^AS {k`O `O g7 e`O~^ N~v, b!q k`O `O/f N/f l g k`O" `O*e `1\be nZiZi 0`O Y b1\HQ e`OrUsY PQbW vuBfL bOUyY} 0R)n yYte g~^ 8^ \yY BfZP bvuBf TRQsY T)n \q )n N\P NAS, zsSZP vsYRQ eKNMReQ7b a}eQ 0}lO U}Y*e NZP`OK\ }}Y2 (Wwm/n cf}L to that doctor, PW1 was next to him. After some discussion, the 1st Defendant insisted the Plaintiff had to pay HK$700,000, and he would not hurt his family. Then he asked for the method of payment. The 1st Defendant asked him to pay before 3 p.m. on the same day and he would provide him with the account number later. It is the evidence of the Plaintiff that on the repeated threatening of the doctor in the telephone, he was forced to follow the instruction of that doctor to pay him HK$700,000. He also said the doctor said in the telephone conversation that he would chop his daughter. He believed the doctor would cause harm or injury to his family members. At that time, he did not have any information about that doctor. The Plaintiff also said that he did not report to Police because there was no actual action. He believed the Police would not take action or provide protection to him and his family members. After the telephone conversation, he asked PW1 to return home and met him at his office by 2 p.m. He also asked another director of his company to prepare a cheque for HK$700,000. It is not disputed that the HK$700,000 paid to the 2nd Defendant was not directly from the account of the Plaintiff but from the account of his company. The Plaintiff waited at his office for PW1 who failed to appear. He tried to call her mobile phone and could not get in touch with her. He then went to Metropolis Residence and asked the management office to bring him to the said property, as he did not know which unit PW1 resided. He knocked at the door and no one answered. He was worrying that PW1 might have trouble and called 999 for assistance from the Police. Then PW1 called him and learning that he had reported to Police, PW1 said she was coming and she was fine. The Plaintiff met PW1 outside the building (where the said property was situated). He asked PW1 to inform him the bank account of the doctor. PW1 refused and they had a heated argument. At that time, the doctor called the mobile phone of PW1 and P ave a Hang Seng Bank account with an account holder Mr. Cheng. Later, on arriving at Hang Seng Bank, PW1 got another call from the doctor asking her to credit the cheque into another bank account. Subsequently the doctor changed again and asked him to pay the money into the account of the 2nd Defendant. PW1 filled the name of the 2nd Defendant on the cheque for banking. After that, PW1 returned to cohabit with the Plaintiff. The Plaintiff requested PW1 to provide him with the personal data of the doctor. PW1 refused. He sought advice from lawyers to draft a demand letter. Before they sent the letter to the 2nd Defendant, the Plaintiff instructed one Mr. Lin to bring a draft letter to the residence of the 2nd Defendant, but no person accepted the document. Later, the letter was issued by his solicitors, Messrs. Yip, Tse and Tang. The Plaintiff also recorded in his witness statement that through Mr. Lin, the doctor invited him to meet him in Tsim Sha Tsui. He waited outside the restaurant and later Mr. Lin called him saying some triad persons appeared in the restaurant. He never met the doctor. In December 2006, the Plaintiff issued the 1st action, DCCJ 6288/2006 against the 2nd Defendant. On 18th December 2006, when the Plaintiff returned from his go down, he discovered that his car was being followed. And later on 19th December 2006, a dog kept in his go down was chopped. He believed this series of action was related to his civil action against the 2nd Defendant. At this moment, PW1 disclosed that the doctor was the 1st Defendant and not a doctor, but a trader in the food market. She also gave him the name and the company address of the 1st Defendant. He reported the incidence to the Police. The Police had taken statement from the Plaintiff and the 1st Defendant. But no prosecution had been advanced. I note that the Plaintiff had given 2 statements to the Police. In the first statement dated 29 December 2006, he only mentioned that the Mr. Wan threaten to chop him. If he did not repay the money, he would not allow La La to leave him. When cross-examined by Mr. Yee, he said he did not agree with the contents as put down by the Police. And on 25 January 2007, he gave a second statement to Police when he set out the details of the telephone conversation, which was in almost except wordings of the conversation kept in the new diary. Mr. Yee questioned why they were in similar wordings. The Plaintiff said he memorized the contents of the diary. In cross-examination by Mr. Yee, the Plaintiff agreed that he engaged private detective to locate PW1 after she disappeared. When he met her in the California Fitness, she informed him that she had to return HK$1 million to the doctor. But he had not agreed to assist her financially. About the telephone conversation with the 1st Defendant, the Plaintiff said he indeed asked PW1 to arrange a face-to-face meeting with the doctor. It was the suggestion of PW1 that they had a telephone discussion. When cross-examined by Mr. Yee as to why he did not report the incidence to the Police, the Plaintiff said it was useless. In fact he had discussed the same with Mr. Leung. He also said in Court that after he sent away PW1, he had further discussion with Mr. Leung and two other retired station sergeants. He came to the view that if the money was credited into the account to the 1st Defendant, he would report to Police. The Plaintiff also said at cross-examination that when he was having the telephone conversation with the 1st Defendant (or the doctor), he was not sure whether the PW1 was nearby. In cross-examination, the Plaintiff agreed with Mr. Yee that he recorded the telephone conversation in a new diary at his office. This was not the diary he used to keep his daily affairs. But he said he also kept a brief record of the incidence in his diary. That is the Plaintiff s case. The 1st Defendant gave evidence and adopted his witness statements dated 12th January 2009 and 21st July 2009 as evidence in chief. According to the 1st Defendant, he runs a food distribution company in the Cheung Sha Wan Food Market. In about 2000, he came to know PW1 and they became lovers. In about 2006, he found PW1 dating a Chinese male. Later, he confronted PW1 with the incidence. PW1 admitted that she dated that male for sometime. On the following day, PW1 informed him that she promised to go with that male (later known as Mr. Chan) to Australia on vacation. She also complained that while being the lover of the 1st Defendant, she did not have a property in her name. The 1st Defendant suggested he would acquire a property and PW1 would be one of the owners. This would be their love house and they would raise kids. PW1 agreed to stay with him and terminated her relationship with Mr. Chan. In February 2006, the Plaintiff located PW1 at California Fitness. PW1 told 1st Defendant that the Plaintiff had acquired an expensive membership with California Fitness with a staff in exchange for the information about PW1. He suggested PW1 made a complaint to California Fitness. And PW1 stayed in Guangzhou for 3 months, at his arrangement. In February 2006, 1st Defendant and PW1 decided to acquire the said property. They used a limited company by the name of CSTA Merit Limited and both of them did not appear as shareholder to keep their identity and relationship confidential. The purchase of the said property was completed on 21st July 2006 and the 1st Defendant paid a total of HK$1 million to PW1. The balance was paid by a loan from Hang Seng Bank against a charge on the said property. Until he separated with PW1, he paid all the monthly installments. The 1st Defendant said, after completion, he cohabited with PW1 in the said property. On 10th September 2006, he had a quarrel with PW1 and they left the said property. On 11th September 2006 at about 9 a.m., he received a telephone call from PW1 at his home. PW1 said sorry to him and another male took up the phone. That male said he was Mr. Chan. He said PW1 decided to stay with him. He knew the 1st Defendant had used HK$1 million to acquire a property with PW1. He said he would not repay the HK$1 million but he could pay HK$700,000, on condition that the 1st Defendant should remove all his belongings from the said property on the same day and thereafter he had no further interest in the said property. After a short consideration, the 1st Defendant agreed since PW1 had decided to leave him. In the afternoon, in the presence of PW1, the 1st Defendant removed all his belongings from the said property. And in the afternoon, PW1 called him and asked for his account number. He gave the account number of a friend and later he changed his mind. He asked the 2nd Defendant if he could bank in a cheque through his account. The 2nd Defendant agreed without asking the reason. 1st Defendant gave the account number of the 2nd Defendant to PW1. Having been confirmed that the 2nd Defendant received the HK$700,000 on 11th September 2006, the 2nd Defendant transferred the total of HK$700,000 to the 1st Defendant on 12th and 13th September 2006. The 2nd Defendant had not asked the purpose or reason of the payment and the1st Defendant had not told him. On about 22nd September 2006, the 2nd Defendant called the 1st Defendant informing him that he received a letter from a debt collection company stating that the Plaintiff claimed refund of the said HK$700,000. The 1st Defendant then knew that Mr. Chan was the Plaintiff. He also informed the 2nd Defendant that he was worrying the Plaintiff could find his residence and that is the reason for using the 2nd Defendant s account to receive the payment of HK$700,000. The 1st Defendant also gave evidence that the debt collection company creating disturbance to him and the 2nd Defendant. Since the matter is not in issue, I do not intend to go into his evidence. In cross-examination, the 1st Defendant said before 2006, PW1 lived at Royal Peninsula ( ved at Tai Koo Shing and he had a girl friend with two daughters. But He did not ask the detail address of the Plaintiff, his working office and how many children he had. After they bought the said property, the Plaintiff also said he stayed overnight there with PW1 on two to three nights a week. Sometimes more often. The 1st Defendant was being cross-examined on his witness statement given to the Police. He agreed that he did not mention about his interest in the said property. He just wanted to e S&Ts bKb_j UOO 0 _1\ g N T7uP[ NpO, 1\!q k`O 0 SOUbO~^Bf bbOKN eQxe CQeQ ed private detective to follow the Plaintiff after he received the money. He wanted to prove the relationship between the Plaintiff and PW1. The 1st Defendant also mentioned that on 11th September, he went to the said property on the request of PW1. PW1 asked him not to collect the HK$700,000. He refused her suggestion. He also said he packed 4 bags of his belongings when he left the said property on 11 September 2006. He agreed that this was not mentioned in his witness statement. That is the 1st Defendant s case. The 2nd Defendant also gave evidence. He adopted his witness statement dated 11th January 2009 as his evidence in chief. The 2nd Defendant stated that on 11th September 2006, at about 3 p.m., he received a call from the 1st Defendant. A cheque has to be credited to the 1st Defendant. The 1st Defendant asked if he could use the bank account of the 2nd Defendant to collect the cheque. The 2nd Defendant knew the 1st Defendant for many years. Based on trust, he gave him his account number. At about 5 p.m. on the same day, the 2nd Defendant found that he had received a sum of HK$700,000. He confirmed to the 1st Defendant that the money had been received. Subsequently, he transferred HK$700,000 in two lots, on 12th and 13th September 2006 respectively, to the bank account of the 1st Defendant. On about 22nd November 2006, a letter from one Mr. Lin attaching an unsigned letter from Messrs. Yip, Tse and Tang was sent to the 2nd Defendant s home. 2nd Defendant called the 1st Defendant who then informed him that he had separated with his girlfriend. His girlfriend had a new boyfriend surname Chan. That man would acquire his interest in the said property. The 1st Defendant had paid HK$1 million but that man was only willing to pay HK$700,000. Later, the 2nd Defendant received the demand letter from Messrs. Yip, Tse and Tang. He passed the case to his legal advisor to handle. On about 12th December 2006, the Plaintiff brought action DCCJ 6082/2006 against the 2nd Defendant claiming that he conspired with the 1st Defendant to force the Plaintiff to pay HK$700,000 to his account by duress. The 2nd Defendant claimed that he was an innocent party. That is the 2nd Defendant s case. Discussion of Evidence and Ruling This case turns both on the credibility of the witnesses and on the legal basis to recover the money as pleaded by the Plaintiff. Mr. Ng submits that the evidence of the Plaintiff and PW1 should be preferred and I should not accept the evidence of the Defendants. Since the 1st and prime claim of the Plaintiff is for restitution of the money as it was paid on duress, I would first consider the evidence of the parties in this aspect. The Plaintiff said at paragraph 2 of the Statement of Claim that the HK$700,000 was paid to the 2nd Defendant under the 1st Defendant s duress, oppression or extortion. There is no particular given in the Statement of Claim. It is clear now from the evidence that the only evidence of duress is the telephone conversation between the Plaintiff and the 1st Defendant in the morning of 11th September 2006. But if the 1st Defendant had threatened him in the way stated in his witness statement, it must occur to him, who is an experienced businessman, that it is blackmail. At least, he is aware that it is a threat. I cannot help asking why he had not reported the matter to Police. But it is his own evidence that he had consulted his driver Mr. Leung who was a retired policeman and two other retired station sergeants before he paid the 1st Defendant. It is not believable that all advised him against reporting to Police. The Plaintiff said he worried about his and his family s safety. I failed to see why he cannot report to Police and allowed them to arrange protection for his family members. And if he dared not report to Police as he was so worried for the safeties of his family members, it looked odd that he indeed reported to Police when he could not get in touch with PW1 on 11 September 2006 when he visited the said property. And he decided to take action by 22nd November 2006 to seek recovery of the money from the 2nd Defendant. Further, PW1 knew the identity and the whereabouts of the 1st Defendant. It sounds very strange that PW1 refused to disclose the identity of the 1st Defendant. She said she worried about the safety of herself and her family. But subsequently, PW1 did disclose the identity of the 1st Defendant. That indeed led to further investigation by Police. Further, on the telephone conversations, the Plaintiff used a new diary which recorded details of the telephone conversation. It is not disputed that this is not the diary he used to keep record of his daily affairs. Given that the Plaintiff is a person who has the habit of keeping diary, one asked why this important conversation was not recorded in his own diary. Further, his diary did record this incidence, but just not in such details. It is helpful at this stage to refer to the diary of the Plaintiff on his record of what happened on 9th, 10th, 11th September 2006 & & & ft^MR6e N~v, 0W@W `_N N /f N ehQJT4 b \ \ bf}7 e N0R W"Vp why such important matter has been left out in this record. And if one looks at his record by the new diary of the conversation, he made very detail record of the conversation, including on two occasions when he was interrupted by the 1st Defendant. I also adopt the submission of Mr. Yee. When the Plaintiff issued the 1st demand letter to the 2nd Defendant dated 23rd November 2006, he only mentioned that the money was paid to the 2nd Defendant without a just cause. By then, the Plaintiff must have received full legal advice from his solicitors. Even if they had not advised him to report the incidence to Police which he only did on 29th December 2006, I thought the solicitors would set out the accurate cause of action in the letter. And more interestingly, this letter was not issued directly to the 2nd Defendant. It was drafted and sent by a Mr. Lin who was a debt collector to bring it to the 2nd Defendant. Mr. Lin also wrote a Chinese letter to the 2nd Defendant saying that the Plaintiff was prepared to report the incidence to Police for deception . On cross-examination, the Plaintiff agreed he endorsed the contents of Mr. Lin s letter. Why the Plaintiff agreed to Mr. Lin calling this a deception case, when it should be a blackmail case. I am grateful to Mr. Ng who has done a very good analysis of the evidence. By having perused all these, I am not at all convinced that the Plaintiff is telling the truth. I am not convinced that the new diary is a true record of the telephone conversation between him and the 1st Defendant on 11 September 2006. I found that the version by the Plaintiff about the telephone conversation unbelievable. PW1 could have no contribution to the contents of the telephone conversation. It is not disputed that after calling the 1st Defendant, she passed the telephone to the Plaintiff. She admitted in her oral evidence that she was crying heavily and knew nothing about the telephone conversation. Originally, the Plaintiff said in his witness statement that when he was talking to the 1st Defendant, PW1 told him that the 1st Defendant had a number of crooks with him. It is clear from oral evidence that PW1 was not staying next to him. And in cross-examination, the Plaintiff could not be sure if PW1 was around. It also discredits the evidence of the Plaintiff and it also shows that PW1 could not give any useful information on the contents of the telephone conversation, except what the Plaintiff told her later. And I have great doubt on the reliability of PW1. She is indeed the only person who benefits in this arrangement she could keep the HK$1 million paid by the 1st Defendant and could return to the Plaintiff. And in her evidence, she had been lying to the Plaintiff about a doctor who wanted to marry her and gave her the money. She had refused to disclose the identity of the person who talked to the Plaintiff on the telephone. What is the reason for keeping the identity of the 1st Defendant confidential? And she offered to use her account to collect the money. There are too many areas in her evidence that are unexplainable and in conclusion, I do not believe her evidence. I have been invited to rule if she had co-habited with the 1st Defendant. I do not think it is necessary for my ruling. There is no doubt that she was supported or maintained by the 1st Defendant and they must be more than lovers. The other witness for this telephone conversation is the 1st Defendant who claims that he has reached the September Agreement with the Plaintiff. Mr. Ng tried to persuade me that the 1st Defendant is unreliable. If I were to disbelieve the 1st Defendant, there is still no credible evidence on the claim of duress. Mr. Ng refers to a passage of cross-examination of the 1st Defendant when he suggested that the evidence he gave to the policeman was not true. And further, the 1st Defendant did engage private detective to check the Plaintiff while in his answer to the policemen, the 1st Defendant claimed that he had not followed the Plaintiff. I accept the above comments on the evidence of the 1st Defendant are matters I have to and have taken into account in assessing the reliability of the evidence of the 1st Defendant on the alleged oral agreement. For this telephone conversation, the 1st Defendant s evidence is that he was told by the Plaintiff that PW1 was staying with him. The Plaintiff knew about the HK$1 million he gave to PW1 to buy the said property. The Plaintiff would only pay HK$700,000 in that afternoon on condition that he had to abandon his interes & & & ft^MR6e N~v, 0W@W `_N N /f N ehQJT4 b \ \ bf}7 e N0R W"Vp 1 to stay with him. And according to his record in the diary, he told the doctor/1st Defendant that PW1 had informed him of all his information. This is in support of the 1st Defendant s evidence that the Plaintiff was the person who set out the terms of the agreement. And it is interesting to note that in this record, the Plaintiff only said the doctor/1st Defendant insisted that he had to pay HK$700,000 and there was no record of duress or threat. And it was recorded that the doctor/1st Defendant had to go to the said property to pack his belongings to leave the said property. This again supports the evidence of the 1st Defendant that one of the terms is to move out of the said property. While the Plaintiff said he did not intend to assist PW1 financially, in the background facts as set out above, I would not be surprised that he wanted to solve this monetary issue between PW1 and the doctor/1st Defendant, as this had been the reason given by PW1 that she could not leave the 1st Defendant. On the balance, I believe the evidence of the 1st Defendant that it is the Plaintiff who made the offer that he would pay HK$700,000 to the 1st Defendant. And I believe his evidence that it is the terms of the agreement that he had to abandon all interest in the said property, and he had to move out of the said property. The Plaintiff has provided the September Agreement. For this ruling, I just take the wordings appearing on the diary as accurate. I note that at one stage Mr. Yee argues that there is some tailoring of this part of the diary which is not pursued in his closing. Mr. Ng suggests that according to Order 27 Rule 4(1) & (2), the Defendants could not argue that the new diary is not a genuine contemporaneous record as the Defendants have not served a Notice in accordance with Rule 4(2) that they do not admit the authenticity of the new diary. That cannot be correct. The said rules only govern productivity and admission of document. But whether the contents are true would be a matter for the trial judge. As I found for the 1st Defendant the September Agreement between the Plaintiff and the 1st Defendant, I do not have to consider the alternate argument of the Plaintiff that the money has been paid with no or no valid consideration. I note that Mr. Ng argues that there is no consideration given by the 1st Defendant for the September Agreement as he had no interest in the said property. The other argument by Mr. Ng is, it is a separation agreement and should be voided against public policy. I shall come back to this later. PW1 said the 1st Defendant gave her $1 million for her to leave the Plaintiff. Mr. Ng seeks to argue that it was a gift by the 1st Defendant. From the evidence of the 1st Defendant, PW1 complained to him that she does not have a house notwithstanding she had been his lover or girlfriend for a long period of time. Mr. Yee argues that it is not a gift. Further, when a person makes a payment towards the purchase price or consideration for a house, he has a resulting trust in the beneficial interest in the property. But I do not have to decide if the 1st Defendant has beneficial interest in the said property. All that I have to decide is whether he has an arguable case to claim an interest in the said property. By abandoning a doubtful interest would be sufficient and valid consideration. Given my analysis of the evidence of PW1, I do not believe her evidence. I found the 1st Defendant a credible witness. I believe his evidence that he has contributed $1 million toward the price and he intended it to be a property jointly owned by himself and PW1. And from the evidence, it must at least be arguable that the 1st Defendant has a claim to beneficial interest in the said property. It may be argued that the consideration is not moving towards the Plaintiff. But the consideration is not the beneficial interest, but the agreement by the 1st Defendant to give up all his interest (even doubtful interest) in the said property at the request of the Plaintiff, and to move out of the said property. Accordingly, there is valid consideration for the September Agreement. Further, it is recorded in the diary of the Plaintiff that he requested the 1st Defendant to move out of the said property. That by itself is a valid term and by moving out, it is sufficient consideration for the agreement. I believe the evidence of the 1st Defendant that he has moved out of the said property on 11 September 2006. I do not agree with Mr. Ng that the September Agreement is void against public policy. There is no plea by the Plaintiff that the agreement is void against public policy in the Amended Statement of Claim or Re-amended Reply. On the evidence of the 1st Defendant, he was informed by the Plaintiff that PW1 would stay with the Plaintiff. He was offered on how to resolve the HK$1 million money he paid to PW1 and the said property. The agreement covered how PW1 and the 1st Defendant were to resolve their financial dispute upon their separation, such an agreement cannot be voided against p (#p# (#p# (#p# (#p# ublic policy. If it is a separation agreement, I have indeed invited Mr. Ng to provide me with authority that it is void against public policy. He quoted a criminal appeal case R v Li On CACC 228/1994. This is an appeal on the charge of blackmail. To obtain separation fees by threat would be blackmail and an offence. I agree entirely. But I have ruled against the Plaintiff s allegation of payment under threat. Here we have a concrete financial benefit that was paid by the 1st Defendant to PW1 which was resolved by an agreement. As I interpret earlier on, the September Agreement is not a separation agreement. It is an arrangement after the separation on the financial dealing between PW1 and the 1st Defendant at the request and agreement of the Plaintiff. There is no unjust factor. Accordingly this line of claim of the Plaintiff must fail. The Plaintiff has also pleaded in the Re-amended Reply that the agreement is void as it purports to dispose of an equitable interest in land but not in writing. This point is not pursued by the Plaintiff at the closing. Mr. Yee has one additional point to make. He accepts that for restitution claim based on duress, the Plaintiff has the locus to sue. But for money paid with no consideration, it should be returned to the payer. In the present case, the money was not paid by the Plaintiff but his own company. There is no evidence that it is a loan to him. His company should be the Plaintiff to claim refund on the legal principal of no consideration . There is much force in this argument. I need not deal with the point now as I rule against the Plaintiff. In the circumstances, I would dismiss the Plaintiff s claim against the 1st Defendant. The claim against the 2nd Defendant must fail as the 1st Defendant has a legitimate right to keep the payment. And I also agree with Miss. Lee, counsel for the 2nd Defendant that he is a mere agent. There is no evidence that he knew about the conversation between the Plaintiff and the 1st Defendant, or the purpose of the payment, when he received it, or when he paid over to the 1st Defendant. As a mere agent, he has no liability whatsoever once he paid the money to the Plaintiff (per Ribero PJ in Shanghai Tongji Science & Technology Industrial Co. Ltd. v. Casil Clearing Ltd. 920070 7 HKCFAR 79). There is no evidence whatsoever to suggest that the 2nd Defendant knew about the dealing between the Plaintiff and the 1st Defendant. I would like to add this. The claim against the 2nd Defendant is also based on conspiracy. However, no particular is pleaded and no evidence whatsoever has adduced at the hearing as to how the conspiracy arises. Paragraph 68 of Mr. Ng s closing submission claims that the 1st and 2nd Defendants are joint tortfeasors. There is no explanation why there are joint tortfeasors and no submission on conspiracy. He then moves on to say that it is trite law that the agent who commits a tort on behalf of the principal and the principal himself are joint tortfeasors. He is evading the fact that the alleged duress was imposed by the 1st Defendant on the Plaintiff. The 2nd Defendant has not participated in the telephone conversation. There is yet no evidence to suggest he knew the telephone conversation between the Plaintiff and the 1st Defendant. I fail to see how it could be said that he is liable for any alleged tort committed by the 1st Defendant. This is a very unfortunate case when the 2nd Defendant has been dragged into a lengthy litigation. He has stated his position at the very early stage that he has been a mere agent. The act of the Plaintiff in pursuing the claim against the 2nd Defendant is quite unreasonable. I am minded to not only allow cost in favour of the 2nd Defendant, but allow him to have costs on indemnity basis. I presume the Plaintiff may wish to address me on this point and I therefore adjourn this part for the solicitors for the 2nd Defendant to fix a hearing before me for 30 minutes. As for the 1st Defendant, I see no reason why he should not be entitled to his costs. I would give an order nisi that the Plaintiff should bear the costs of the 1st Defendant with certificate for counsel to be taxed if not agreed. Such order nisi to be become absolute within 14 days from the date hereof. ( R. Yu ) Deputy District Judge Mr Lawrence Ng, instructed by Messrs. Yip, Tse & Tang, for the Plaintiff. Mr Kent Yee, instructed by Messrs. Winnie Leung & Co., for the 1st Defendant. Miss Vivian Lee, instructed by Messrs. Y. S. 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