DAMIEN ROCHE v. PIERRE ALAIN NAGLANI

bjbj DCCJ4164/2008 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 4164 OF 2008 -------------------- BETWEEN DAMIEN ROCHE Plaintiff And PIERRE ALAIN NAGLANI Defendant -------------------- Coram : H.H. Judge Chow Date of Hearing : 19th January 2009 Date of handing down Decision : 13th February 2009 Decision This is the Plaintiff s application for summary judgment under Order 14 of the Rules of the District Court against the Defendant in the sum of $150,000. The Plaintiff was the sole director and a shareholder of RD Budo Sports and Fitness Limited ( the Company ) between May 2004 and February 2008. He set up the Company in 2004 to operate a martial arts and fitness training gymnasium under the name of IMPAKT . In December 2004, the Defendant joined the Company as an employee; subsequently he became a shareholder. In or around December a Mr. Karim Micha Arditi ( ) became a shareholder of the Company. In or around December 2007, KMA decided to sell his 20% shareholdings to the Defendant for $300,000. The Defendant approached the Plaintiff and sought a loan of $50,000 for the purpose of purchasing KMA s shares. The Plaintiff agreed to his request and transferred the loan of $50,000 on 12 December 2007 from his HSBC account No. 043-336866-833 to account no. 178-346755-888 which had been provided to him by the Defendant. In or around February 2008, the Plaintiff decided to leave the Company. He reached an oral agreement with the Defendant to sell his remaining 170 shares to him at a price to be agreed. On 15 February 2008, he and the Defendant orally agreed that the price for the remaining 170 shares was $100,000, and the Defendant drew and delivered four post-dated cheques to him as the consideration for the immediate transfer of his shares to him. The particulars of these 4 cheques are as follows:- Date Cheque No. Amount (HK$) 25 April 2007 721496 25,000 25 May 2007 721497 25,000 25 June 2008 721498 25,000 25 July 2008 721499 25,000 In or around the end of February 2008 he transferred all his shares to the Defendant. On 21 June 2008 he proposed 5 instalments of $30,000 each to cover the Defendant s indebtedness of $150,000. But this proposal did not go through. On 2 July 2008, he went to cash the Defendant s cheques at HSBC. HSBC informed him that cheque No. 721496 and 721497 were dated 2007 and he could not deposit them, and that cheque No. 721499 being dated 25 July 2008 was not yet payable. He could only deposit cheque No. 721498. On 3 July HSBC notified him by a letter that cheque No. 721498 could not be honoured because the signature of the drawer differed from the specimen in the bank s possession. At the end of July he deposited the cheque No. 721499, but it was dishonoured. On 28 August 2008, he instructed Messrs. Richards Butler to write to the Defendant, making as formal demand of the repayment of the loan, and the payment of the shares. On 9 September 2008, the Defendant through his solicitors made a reply by letter, denying that the Plaintiff had ever advanced $50,00 to him in December 2007. The letter also states that Pursuant to a Release Agreement dated 15th February 2008, our client agreed to purchase your client s shares in the Company at a value to be determined upon the completion of the audit annual report for 2007 In this connection, our client has drawn 4 post-dated cheques in favour of your client for HK$25,000 respectively as a gesture of goodwill. It was further agreed between the parties that such cheques should not be presented until the Company s account have been audited and the a proper assessment of the value of the shares in determined. The Defendant did not make any affirmation or affidavit. An affirmation made by Chan Tin Lup Trevor, the solicitor acting for the Defendant, was filed in Court to oppose the application. According to this affirmation, in respect of the loan of $50,000, the Defendant s response is The Defendant did not at any time request the Plaintiff to make the alleged payment of HK$50,000 or any payment to the said HSBC bank account No. 178-346755-888 and if he did so the Plaintiff was acting without the Defendant s knowledge, authority or consent. In respect of the Plaintiff s claim for the purchase price of the 170 shares and 4 dishonoured cheques, Trevor Chan in his affirmation says that the 4 cheques were drawn by the Defendant solely for the accommodation of the Plaintiff at his request, and the Plaintiff took and held the same without consideration but for a gesture of goodwill and as a guarantee. The Plaintiff promised not to present them for payment unless and until the value of the shares had been determined. A written agreement dated 15 February 2008 was made between the Company and the Plaintiff. It states that the plaintiff agreed to sell his remaining 170 shares to a director of the Company at a value to be determined upon the completion of the admit annual report for 2007. But that agreement was made between the Plaintiff and the Company, and not between the Plaintiff and the Defendant. Further, subsequent to the execution of the written agreement with the Company, the Plaintiff and the Defendant reached an oral agreement to sell the remaining 170 shares to the Defendant at a price of $100,000. The Defendant argues that the 4 cheques represented a goodwill gesture and as a guarantee. They were not supported consideration. There is no affirmation from the Defendant personally on this point. On the other hand, the transfer of shares provides the consideration. The cheques were dated and became due on those date. The Defendant chose not to make any affidavit or affirmation to contradict the Plaintiff s evidence. I attach little weight to the evidence of Mr. Trevor Chan, which is clearly hearsay evidence. The following SMS texts between the parties show the genuine situation at the material time. Date The Plaintiff s message The Defendant s response 29 March 2008 Hi Alain, I hope everything is ok. My Salary cheque of the sum of 12600 from Impakt has been rejected. And I would need a part of the 50000 you owe me, 25000 if you can, I will drop by on Monday, thanks bye Damien Hi Damien, hope you are doing well, sorry for your cheque we will try to solve this problem but I just want to let you know that it s quite hard at the moment, difficulties to pay the rent, I won t be able to give myself a salary, so it will be impossible for me to give an advance. I m really sorry brother. Hope things will get better soon, wish you good success, see you. 18 April 2008 Hi Alino.. Can you give me a part of the sum you owe me, sorry but I really need it urgently..! Hi Damien, I understand brother but I am not able right now, my bank account is quite empty cause I just paid my taxes today 19 April 2008 Ok.. Alain, I also have to pay taxes invoices etc. So try to make a monthly transfer of 10000. It will be easier for both of us..! (No response) 21 June 2008 Hi Alain, I hope you are doing well and in good shape for your fight, wish you good luck..! It would be nice if you could make a transfer this month, I really need it. As you owe me 150000 Split it in 5 transfers of the sum of 30000 and then we are done, thanks let me know..! Hi Damien, Thanks for asking, I m good I can meet you after the flight to do a resume. Thanks again, take care of you. 27 June 2008 Hi Alain, How do we do for the money? Hi Damien, we see each other on Monday 10 am at [caf ] Kosmo, is that ok for you? 2 July 2008 Hi Alain, I had the time to think a bit more about, and I think your way to act is not honest. You promise me, that the 50000 I lend you to buy Karim s shares, will be reimburse by you and not them..! For the 100000 is the same. If you can t pay so just give me backed the shares that s the way it should be. We had a deal together and I don t mention the 7000 you owe me for your brother so either you give me back the shared today or I deposit the cheque and I sue you Think about it I asked you to wait to know how much the shares are evaluated, we had a deal so that you won t be involved in anything after having sign documents for your new company Kontact on behalf of Impakt company, and I kept that for me so that you won t have any trouble to build up your training centre. On my side I don t have money and the company won t give you money until we don t know how much the shares cost. (Underlines added) It is abundantly clear that the Defendant did not refute the Plaintiff s claims that the Defendant owed him $50,000 and $100,000 respectively. The Defendant merely said that he had no money to pay. If the indebtedness of these sums had not been true, the Defendant should have denied the existence of these debts. The contexts of the SMS texts were not denied by the Defendant. They support the Plaintiff s claims. Hence there is no defence to the Plaintiff s claims. The Defendant puts up a counterclaim of $358,936.41. The Defendant alleges that the Plaintiff withdrew a total sum of $358,936.41 (from the Company) owing to mishandling of the accounts of the Company under the management of the Plaintiff. The proper legal person to sue for this alleged sum of money is the Company, and not the Defendant. The Defendant has no legal status to pursue the counterclaim. There are no merits in the defence put up by the Defendant. Accordingly, I enter judgment in favour of the Plaintiff in the sum of $150,000. I order that the Defendant do pay, within 14 days from today, $150,000 to the Plaintiff, with interests thereon at judgment rate, commencing from 28 August 2008, until satisfaction. Costs I make an order nisi, to be made absolute in 14 days time, that the Defendant is to pay costs of this application, to be taxed, if not agreed. ( S. Chow ) District Judge The Plaintiff: represented by Mr. David Morrison of M/S. Richards Butler, Solicitors. The Defendant: represented by Ms. Amanda Lee, instructed by M/S. Shea & Company, Solicitors PAGE - PAGE A B C D E F G H I J K L M N O P Q R S 1udk 1udk D E F G H I J K L M N O P Q R S T U V (#p# (#p# &`#$ P{ $ :i#z *\mT zo/< xC&1 ({m8 P0} W~7gb 9Q[z: W~7g xC&1 ({m8 9Q[z .&`z & 6" ABC.dot setup Microsoft Word 9.0 Title Microsoft Word Document MSWordDoc Word.Document.8