BIG ISLAND CONSTRUCTION (HK) LTD v. WU YI ENTERPRISES CO LTD

BIG ISLAND CONSTRUCTION (HK) LTD v. WU YI ENTERPRISES CO LTD

On the totality of the evidence the court rejected BIC's primary case: BIC failed to prove the Loan Agreement and the alleged source of funds (Ms Lie) and the key documents were fabricated or unreliable; the alternative restitution claim failed because absence of consideration is not a recognised unjust factor; WYD succeeded on HCA714 because contemporaneous letters, receipts and payments demonstrated WYD lent HK$500,000 to BIC for FBC's use; HCA886 and HCA1364 failed because plaintiffs did not discharge burdens of proof on fund-transfer defence and alleged misappropriation/forgery respectively; costs orders nisi were granted accordingly.

Citation
BIG ISLAND CONSTRUCTION (HK) LTD v. WU YI ENTERPRISES CO LTD
Parties
Plaintiff (hca1957 & Hca886); Defendant (hca714 & Hca1364): Big Island Construction (HK) Limited; 1st Defendant (hca1957); Plaintiff (hca714): Wu Yi Development Company Limited; 2nd Defendant (hca1957): Wu Yi Construction Company Limited; Defendant (hca886): Wu Yi Enterprises Company Limited; Plaintiff (hca1364): FBC Construction Company Limited; Defendant (hca1364); Principal of Big Island Group and Key Witness: Ben P Lee
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
28 July 2011
Case Number
HCA886/2007
Procedural Posture
Civil Consolidated Proceedings (trial) / Judgment (court of First Instance, 28 July 2011)
Outcome
Consolidated judgment: HCA1957/2005 dismissed (BIC claims dismissed); HCA714/2007 judgment for WYD against BIC for HK$500,000 plus interest; HCA886/2007 dismissed (BIC claim against WYE dismissed); HCA1364/2008 dismissed (FBC claim against Mr Lee dismissed)
Legal Topics
Loan Agreements, Money Had and Received, Fund Exchange Arrangements (feas), Statutory Demand, Derivative Action, Bank Mandate/forgery, Burden of Proof, Witness Credibility and Contemporaneous Documents
Source Language
EN
Contract Restitution/unjust Enrichment Company Law Directors' Fiduciary Duties Fraud/forgery Evidence and Procedure Loan Agreements Money Had and Received +6 more

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Parties

Big Island Construction (HK) Limited

Plaintiff (hca1957 & Hca886); Defendant (hca714 & Hca1364)

Wu Yi Development Company Limited

1st Defendant (hca1957); Plaintiff (hca714)

Wu Yi Construction Company Limited

2nd Defendant (hca1957)

Wu Yi Enterprises Company Limited

Defendant (hca886)

FBC Construction Company Limited

Plaintiff (hca1364)

Ben P Lee

Defendant (hca1364); Principal of Big Island Group and Key Witness

Procedural Posture

Civil Consolidated Proceedings (trial) / Judgment (court of First Instance, 28 July 2011)

Legal Issues

  1. 1 Whether sums paid by BIC to WYD and WYC were loans under an oral Loan Agreement or payments under fund exchange agreements (FEAs)
  2. 2 Whether alternative restitution claim (money had and received) could succeed absent recognised unjust factor
  3. 3 Whether three sums in HCA714 were loans from WYD or contributions from WYC to FBC

Ratio Decidendi

On the totality of the evidence the court rejected BIC's primary case: BIC failed to prove the Loan Agreement and the alleged source of funds (Ms Lie) and the key documents were fabricated or unreliable; the alternative restitution claim failed because absence of consideration is not a recognised unjust factor; WYD succeeded on HCA714 because contemporaneous letters, receipts and payments demonstrated WYD lent HK$500,000 to BIC for FBC's use; HCA886 and HCA1364 failed because plaintiffs did not discharge burdens of proof on fund-transfer defence and alleged misappropriation/forgery respectively; costs orders nisi were granted accordingly.

Court Disposition

Consolidated judgment: HCA1957/2005 dismissed (BIC claims dismissed); HCA714/2007 judgment for WYD against BIC for HK$500,000 plus interest; HCA886/2007 dismissed (BIC claim against WYE dismissed); HCA1364/2008 dismissed (FBC claim against Mr Lee dismissed)

Orders

  • HCA1957/2005 dismissed; order nisi that BIC pay WYD and WYC costs of HCA1957/2005 including all reserved costs with certificate for two counsel to be taxed if not agreed; to be made absolute in 14 days
  • HCA714/2007 judgment for WYD against BIC for HK$500,000 with interest at judgment rate from date of writ until payment; order nisi that BIC pay WYD costs including reserved costs with certificate for two counsel to be taxed if not agreed; to be made absolute in 14 days