HE SHIMENG AND ANOTHER v. PACIFIC RISE ENTERPRISE LTD. AND ANOTHER

bjbj HCA1261/2002 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO.1261 OF 2002 --------------------- BETWEEN HE SHIMENG 1st Plaintiff LIN LINA FANG 2nd Plaintiff and PACIFIC RISE ENTERPRISE LIMITED 1st Defendant TANG WAI YEE, SYLVIA 2nd Defendant ---------------------- Before : Deputy High Court Judge Fung in Chambers Date of Hearing : 29 January 2003 Date of Decision : 29 January 2003 ----------------------- D E C I S I O N ----------------------- AUTONUMOUT This is an appeal by the 1st and 2nd defendants against the decision of the Master who refused to set aside judgment obtained in default of acknowledgement of service by the 1st and the 2nd defendants. AUTONUMOUT The 1st defendant is a corporation which carries on the business of US immigration consultant. The 2nd defendant claimed to be a salaried director of the 1st defendant. AUTONUMOUT The 1st and 2nd plaintiffs are parties with Mainland background who have entered into standard terms agreements in the letterhead of the 1st defendant for obtaining the service of emigration to the United States. The 1st plaintiff s agreement is dated 8 January 1998. In the agreement with the 1st plaintiff, the 2nd defendant was described as the contracting party (Party B) at the top of the agreement, while the 1st defendant was described as the contracting party at the foot of the agreement. In the agreement with the 2nd plaintiff, both the 1st and the 2nd defendants are described as the contracting party at the top of the agreement while the 1st defendant was described as the contracting party at the foot of the agreement. 4. Both agreement contains the following terms which are relevant to the matters before me. Clause 6 : After the agent (Party B) receiving the US$120,000 transferred by the applicant together with the supporting documentation for the visa application (that is the items listed in this contract under the three sections, 3.1, 3.2 and 3.3), if the agent cannot help the applicant obtain the Green Card from the US Immigration Department within 9 months, Party B shall bear the following liabilities: 6.1 - the amount of US$120,000 transferred to the US plus the interest must be refunded within 7 days (Party B shall provide documents and the sum shall be directly from the trust account in US.) 6.2 - The attorney fee already paid plus the interest shall be refunded. The annual interest rate is 9 cent. The declaration clause : The declaration made by the representative of Party B signing this contract. This contract is signed by myself on behalf of my company. I pledge my reputation to guarantee to be responsible for the joint and several obligations under this contract. If there is any change in the company, I shall perform this contract unconditionally. 5. From the documents disclosed, each of the 1st and the 2nd plaintiffs have paid the legal fees of US$10,000, duly receipted by the 1st defendant. The records also show that each of them have remitted US$120,000 to a US firm of Immigration lawyers, Messrs Marks & Acalin at the instructions of the 1st and 2nd defendants. It is to be noted that the US$120,000 remitted in respect of the 1st plaintiff is remitted by his wife, Cho Fong, but for reasons that will be apparent later, it is to be taken as remittance on behalf of the 1st plaintiff. 6. The 1st and 2nd plaintiffs are claiming the US$130,000 respectively paid by reason of their failure to obtain the Green Card under Clause 6. 7. The 1st and 2nd defendants defence are as follows. In respect of the 1st plaintiff, it is alleged that the agreement with the 1st plaintiff was terminated in July 1998, and instead, the 1st plaintiff s wife, Cho Fong, was nominated as the applicant instead, and the application in respect of the 1st plaintiff was therefore not proceeded with. 8. In respect of the 2nd plaintiff, the defence were that the moneys paid were paid to the US attorney, Messrs Marks & Acalin, and it had nothing to do with the 1st and 2nd defendants. In any event, the documents in respect of the 2nd plaintiff s application were not in order and time under clause 6 of the agreement was not to run at all. 9. In respect of both plaintiffs, the 2nd defendant further alleged that she should incur no personal liability because she only pledged her reputation and she was not to be personally liable unless there were any substantial change in the 1st defendant, as to which none was shown. 10. In relation to the termination point, there was no correspondence showing the 1st plaintiff s application was ever terminated. To the contrary, in a letter dated 10 August 1998 in the letterhead of American CBN Development Fund Inc. ( American CBN ), supposedly the investment vehicle for the 1st plaintiff s petition for immigration, it was stated that it was confirmed with the 1st plaintiff that his petition was to be proceeded with. It is flatly contradictory to the 2nd defendant s allegation that the 1st plaintiff s agreement or application was terminated in July 1998. 11. Further, on 19 March 2002, the solicitors for the 1st plaintiff wrote to the 1st and 2nd defendants, demanding the return of the US$130,000. In the reply to this letter, the 2nd defendant wrote that the immigration for the 1st plaintiff and his family was pending approval which would come soon, and asked the 1st plaintiff to wait patiently. In this very important response there was actually no mention of any termination or any lack of documents holding up any approval, or that the US$120,000 was paid in respect of Cho Fong only. 12. In the case of the 2nd defendant, I have been referred to a series of correspondence starting from 12 May 1999, where the 2nd defendant wrote to the 2nd plaintiff asking for extension of time for the performance of the agreement, failing which the US$120,000 received by them would be refunded according to the contract. By the letter of 12 May 1999, the extension requested was to 31 March 2001 at 5 p.m., and then successively on 10 April 2001 and 28 January 2002 the 2nd defendant wrote for a further extension of time. On 19 March 2002, the solicitors for the 2nd plaintiff wrote a similar demand letter as in the case of the 1st plaintiff, and in the reply by the 2nd defendant, she merely said she was reviewing the case with the US agent. There was no mention of any lack of documents or that she had never received the funds and the 2nd plaintiff should go after the US lawyers. 13. Solicitors for the 1st and 2nd plaintiffs have done extensive inquiries with the US attorney Messrs Marks & Acalin. In correspondence from Messrs Marks & Acalin, it was confirmed that they received US$120,000 in respect of both the 1st and 2nd plaintiffs. In the case of the 1st plaintiff, it was stated that the money had been transferred out to American CBN as per the instructions of the 2nd defendant, and Messrs Marks & Ackland stressed that they were only lawyers for the 2nd defendant but not lawyers for the 1st plaintiff. In the case of the 2nd plaintiff, it was also stated that the funds received had been transferred out upon the instructions of the 2nd defendant. As such, they do not hold any fund in relation to the 1st and 2nd plaintiff. 14. As to the point of the guarantee, it is clear that the 2nd defendant is personally liable, both as the named contracting party and as an agent signing for and on behalf of the 1st defendant, with no express exclusion of any liability as an agent. The guarantee that if there were any change with the 1st defendant she would perform the contract personally was only an added comfort. 15. I hold that there is no credible defence. There is actually no real prospect of success by the 1st and 2nd defendants. Hence, the appeal is dismissed with costs. 16. [Discussion re stay of execution] Stay of execution is refused. (signed) (B. Fung) Deputy Judge of the High Court Mr Francis Yip, instructed by Messrs Ko & Chow, for the 1st and 2nd Plaintiffs Miss 1udk 1udk P Q R S T U V &`#$ & 6" CACV Jeannie MY MokSo ABC.dot setup Microsoft Word 9.0 Judiciary CACV Title Microsoft Word Document MSWordDoc Word.Document.8