馬遼沙 v. 黃建新及另二人

bjbj - Coram: Her Honour District Judge Marlene Ng in Court Dates of Hearing: 9th, 10th and 23rd July 2007 Date of Handing Down Judgment: 31st October 2007 ------------------------

JUDGMENT ------------------------ I. Introduction Since 1991 the Plaintiff ( ) carried on construction site sub-contracting business as main contractor dealing in high value construction contracts and contract documentation (eg quotations/tenders, contracts and invoices). In 1998, Ma came to know the 2nd Defendant ( Wong Jr ), a structural engineer, when they worked together at a construction site at Tai Ping Road ( TPR Site ). Afterwards they continued to work together at other construction sites, and kept in contact until Wong Jr left Hong Kong and disappeared in/about April 2002. The 1st Defendant ( Wong Sr ) is Wong Jr s father. All along he lived at the cockloft above the ground floor garage at No.22 Ho Man Tin Street, Kowloon ( Cockloft kloft was rented by Koo s husband. Wong Sr moved in with them in 1970 when he married the Wife. When Koo s husband passed away, she became the tenant and paid the rent. The ground floor garage was initially used by the landlord and later let to an estate agency. The present dispute arose out renovations to the Cockloft in/about 1999 ( Renovation ) by the 3rd Defendant ( ). It was not until early 2002 (ie about two years after completion of the Renovation) when Ma came with Wong Jr to the Cockloft ( Home Visit ) that he met and spoke with Wong Sr for the first time. II. Ma s claim Ma claimed Kou chased Wong Sr for unpaid charges for the

Renovation ( Charges ). In/about August 1999, Wong Jr on behalf of Wong Sr asked Ma for a loan of HK$150,000.00 to be paid directly to Kou for partial settlement of the Charges. Wong Jr offered to guarantee repayment of such loan. Although Ma and Wong Sr had no prior business/money dealings, o |^y) uring the Home Visit Wong Sr agreed to repay the Alleged Loan, but when Ma subsequently chased him he became evasive and eventually even changed his home telephone number ( Home Number ). After April 2002 Wong Jr could not be found, so Ma continued to chase Wong Sr. In the latter half of 2002, Ma engaged debt collection service to no avail. In/about mid-2003, Wong Sr agreed to repay the Alleged Loan to Ma by monthly deposit of HK$4,000.00 into Ma s bank account until full repayment ( s Agreement ). Between 2nd July 2003 and 4th May 2005, Wong Sr paid Ma a total sum of HK$95,000.00 by 24 instalments ( Paid Sum ), but failed to make further repayment. Ma claimed for the outstanding balance of the Alleged Loan in the sum of HK$55,000.00 and damages for breach of contract. III. Wong Sr s defence and counterclaim Wong Sr denied he borrowed any money from Ma or authorised Wong Jr to do so on his behalf. Since the latter half of 2002 debt collectors posted up or left dunning letters ( Dunning Letters ) at the Cockloft. In 2003 red paint was sprayed over the main entrance of the Cockloft

( Paint Spray Incident ). Wong Sr claimed that Ma authorised these activities with a view to persuade him to make payments. Wong Sr reported such incidents to the police, but feared for his and his family s safety. In such circumstances, Wong Sr agreed under duress to make monthly deposits of HK$4,000.00 into Ma s bank account up to a limit of HK$100,000.00 ( Wong Sr s Agreement ). Wong Sr agreed that between 2nd July 2003 and 4th May 2005 he paid the Paid Sum to Ma, but mistakenly thought he had paid HK$100,000.00. After 4th May 2005, Ma turned back on his word and wrongfully demanded further payment of HK$50,000.00 (now HK$55,000.00) accompanied by further nuisance from debt collectors. Wong Sr denied Ma s claim and counterclaimed for restitution of monies he paid under duress. IV. Legal proceedings In November 2005 Ma commenced legal proceedings in the Small Claims Tribunal against the Wife, Daughter and Kou for recovery of the outstanding balance of the Alleged Loan in the sum of HK$50,000.00 ( SCT Claim ). On 16th January 2006 (ie shortly after the first hearing on 11th January 2006), Ma wholly discontinued the SCT Claim against all defendants. On the same day, he commenced the present proceedings against Wong Sr, Wong Jr and Kou. On 24th February 2006, Ma s claim against Kou was struck out. On 28th March 2007, Ma wholly discontinued his claim against Wong Jr. I am only

concerned with Ma s claim against Wong Sr and Wong Sr s defence and counterclaim against Ma. Save for Ma s challenge to the authenticity of two faxes respectively dated 16th and 18th September 2003 ( 16/9/03 and 18/9/03 Faxes or collectively Disputed Faxes ), the documents in the trial bundle were agreed as to admissibility and authenticity. Ma, Wong Sr and Koo gave evidence. Ma intended to call Kou as his witness, but Mr Wong, counsel for Ma, informed the court that Ma s solicitors were unable to serve the witness subpoena on Kou. However, it transpired fro u a few days before trial at a MTR station. Such evidence does not sit well with the suggestion of being unable to serve the witness subpoena on Kou. Although Ma said he maintained contact with Kou, there is no evidence he invited Kou to clarify the Renovation, Charges, Cheque (see below) and his dealings with Wong Sr (if any), or to give evidence on these matters. One is left to wonder (as Mr Chan, solicitor for Wong Sr, did) whether such inability to serve the witness subpoena was in fact an election not to have Kou testify so that adverse inferences might be drawn (see Ip Man Shan Henry v Ching Hing Construction Co Ltd (No 2) [2003] 1 HKC 256, 307). However, in coming to my decision below, it is unnecessary for me to draw adverse inferences from the omission to call Kou to testify. In assessing witnesses credibility, the

court should consider the totality of their evidence against the documentary evidence, inferences based on inherent improbabilities and/or undisputed facts (see the principles set out by Chung J at paragraph 12 of Star Glory Investment Ltd v Kai Tua (H.K.) Technology Ltd & ors HCA3523/2002 (unreported, 13th August 2005)). In my view, Ma was not honest or reliable. His evidence was unimpressive and in some respects unbelievable when viewed against undisputed document(s). I have come to the unhappy conclusion that Ma made up some aspects of his evidence, which immediately casts doubt on his overall credibility. He gave the distinct impression of being prepared to go to any length to recover the Alleged Loan irrespective of the propriety of his assertions. On the other hand, even though I am ultimately not with Wong Sr on his counterclaim, I find he gave clear and straightforward evidence in respect of the events that happened. Although he must have been aggrieved by Wong Jr s prodigal behaviour that put him and his family in the present jeopardy and disconcerted by the demands by Ma and the debt collectors, his fortitude that was so eloquent in his demeanour and testimony gave his evidence on factual events a ring of truth. As for Koo, who was almost 90 years old at the time of trial, her evidence on the various incidents she personally experienced is plainly honest and

truthful. V. Issues The issues are as follows : whether Wong Sr was aware of the Alleged Loan Agreement and/or Alleged Loan at the material time; if so, whether Wong Sr authorised Wong Jr to enter into the Alleged Loan Agreement on his behalf; if not, whether Wong Sr ratified the Alleged Loan Agreement; whether Wong Sr entered into Ma s Agreement or Wong Sr s Agreement; whether Wong Sr paid the Paid Sum to Ma under duress; whether the Disputed Faxes were authentic or forged documents. VI. Renovation I accept that in/about 1999 Wong Jr proposed to renovate the Cockloft (which was not Wong Sr s idea) and made arrangements with Kou (with whom he was familiar) for carrying out the Renovation. I further accept Wong Sr did not discuss the Renovation or Charges with Kou because (and Kou knew) Wong Jr rather than Wong Sr was resp 0RUO e0uW *g6e0R@b g 00R2 /ehy$ O=~xe$ N>\xe[ 8r8r[ harges, but there was no suggestion that Wong Jr acted on behalf of Wong Sr. I find on balance that Wong Jr was the contracting party for the Renovation. VII. Alleged Loan Agreement On 2nd September 1999 Ma deposited HK$50,000.00 in cash into Kou s bank account ( 1st Payment ). On 8th May 2000, Ma gave a cheque in the sum of HK$100,000.00 to Kou ( 2nd Payment ). (a) Ma s case Ma claimed that in/about August 1999 Wong Jr told him (a) despite Kou s efforts to chase Wong Sr, Kou did not have sufficient funds to

pay the Charges for the completed Renovation, and (b) Wong Sr would like to borrow the Alleged Loan for partial settlement of the Charges, and (c) Wong Jr would guarantee repayment. Ma further claimed Wong Sr requested the Alleged Loan through Wong Jr because he was not acquainted with Ma. Ma believed Wong Sr was the true borrower because (a) he trusted Wong Jr who worked as an engineer at the TPR Site for a substantial company, (b) Wong Jr told Ma he lived at the Cockloft with Wong Sr and family, (c) Wong Sr by living at the Cockloft had benefit/use of the Renovation, and (d) Wong Jr had previously brought Ma to the ground floor vicinity of No.22 Ho Man Tin Street, Kowloon, which was about 10-15 minutes walk away from the TPR Site. Ma agreed to lend the Alleged Loan to Wong Sr for partial settlement of the Charges payable to Kou on the following terms : (a) the Alleged Loan would be paid to Kou directly, (b) Wong Sr must repay the Alleged Loan before Chinese New Year in 2002, and (c) Wong Jr must guarantee repayment of the Alleged Loan. Wong Jr agreed to the above terms on his own and on Wong Sr s behalf. Pursuant to the Alleged Loan Agreement, Ma paid the Alleged Loan to Kou for partial settlement of the Charges. When Ma made the 1st Payment, he telephoned to ask Kou about the Renovation works and the amount owed by Wong Sr. Kou did not give any direct reply. In respect of

the 2nd Payment, Ma drove to North Point to give the cheque to Kou in person. This was the first time he met Kou. (b) Wong Sr s case Wong Sr claimed he did not authorise Wong Jr to liaise with Kou in respect of the Renovation and Charges on his behalf. In 1999-2000, he was unaware (and Wong Jr did not tell him) Ma had paid the Alleged Loan to Kou. Wong Sr said if there were any loan, such loan would have been sought by and granted to Wong Jr and had nothing to do with him. Wong Sr did not know the relationship amongst Wong Jr, Ma and Kou nor understand why Ma would make partial payment of the Charges to Kou. But he was certain he never borrowed any money from Ma or asked Wong Jr to do so on his behalf. (c) Discussion I find Ma s allegations inherently unreliable and unbelievable : I have found that Wong Sr did not arrange and was not responsible for the Renovation. There was no reason for him to request the Alleged Loan. In/about August 1999, Ma was not acquainted with either Wong Sr or Kou. HK$150,000.00 was not a trivial sum. It is strange that Ma never asked Wong Jr to introduce Wong Sr and/or Kou to him and that he never contacted or made enquiries with them to verify the outstanding Charges before granting the Alleged Loan. Ma admitted he had the Home Number, but claimed it was inappropriate for him to telephone Wong Sr when they had not met. I do not accept such

explanation. Any loan would put the borrower and lender into a direct relationship. Even on Ma s own case, his reasons for believing Wong Sr to be the true borrower were unconvincing. First, the fact that Wong Jr worked as an engineer for a substantial company was neither here nor there since the Alleged Loan was a personal loan to his father for a purpose unrelated to his work. Secondly, since Ma believed that Wong Jr also lived at the renovated Cockloft, Wong Sr s residence thereat was not determinative of the identity of the borrower of the Alleged Loan or the contracting party who commissioned the Renovation. Thirdly, if Ma claimed Wong Sr enjoyed the fruits of the Renovation, he must have thought Wong Jr also shared the same benefit. The other reason Ma gave for believing Wong Sr to be the true borrower of the Alleged Loan was that Wong Jr previously brought him to the ground floor vicinity of No.22 Ho Man Tin Street, Kowloon. Ma claimed in his evidence-in-chief that Wong Jr brought him there once and told him he lived upstairs at the Cockloft. But in cross-examination, he said Wong Jr brought him there several times and & & he trusted Wong Jr. Even on Ma s own case, he carefully asked Kou about the Renovation works and the amount of the outstanding Charges when he gave the 1st Payment to Kou and he wrote the Cheque (see below) inter alia as record of the Alleged Loan. Had

Ma wanted some confirmation or record of the Alleged Loan, he failed to satisfactorily explain why he did not ask Wong Sr and/or Wong Jr for written loan confirmation or guarantee. I reject his flimsy reason that [Ma] U& & whom he was familiar) act as guarantor with secondary liability. According to Ma, he was told Wong Jr also lived at the renovated Cockloft and had a respectable job, but did not know Wong Sr or his credit-worthiness. In my view, there was no sensible reason for Ma to lend the Alleged Loan to Wong Sr rather than to Wong Jr and let Wong Jr work out his own arrangements with Wong Sr and Kou. Ma s explanation that [Wong Jr] & & bTrU did not have sufficient funds. In such circumstances, it was strange that Ma never asked for confirmation of Wong Sr s ability to repay the Alleged Loan. Ma tried to brush this aside by saying he knew Wong Jr was an engineer and thought Wong Sr owned the Cockloft. However, Ma s reference to Wong Jr being an engineer in fact lent weight to the view that he looked towards Wong Jr rather than Wong Sr for repayment. Further, there was no justification for Ma to assume from Wong Sr s occupancy that he owned the Cockloft since he thought Wong Jr and other family members also lived there. Ma did not offer any reason why he set the deadline for repayment of the Alleged Loan to be almost 2 years later (ie by Chinese New Year in 2002). There

was no evidence as to the significance of such date. Ma did not give any satisfactory reason why he paid the 1st Payment in September 1999 and the 2nd Payment only eight months later in May 2000. Further, Wong Sr said (and I accept) it was only in ~^t^ Wong Jr to approach Ma for financial assistance and had nothing to do with Wong Sr. There is plainly much more to the relationship amongst Ma, Wong Jr and Kou than meets the eye. I reject Ma s claim in respect of the Alleged Loan Agreement and Alleged Loan. There is insufficient evidence before this court as to the details of the true arrangement between Ma and Wong Jr. But since Ma paid Kou the 1st and 2nd Payments which Kou acknowledged in the Kou Defence to be part payment of the Charges, I am prepared to find that Ma lent such sums to Wong Jr who commissioned the Renovation and who was therefore liable for the Charges. Wong Sr had no contractual liability for payment of the Charges and no reason to (and did not) seek the Alleged Loan. VIII. Kou s demand for the Charges and the Cheque Ma was cross-examined extensively on the Cheque (see below) a copy of which was shown to Wong Sr by Kou. Whilst the Cheque might not be directly pertinent to Ma s allegations about the Alleged Loan, it illustrates starkly the unreliability of his evidence. I propose to deal with this issue here as it follows the chronological sequence of

events. (a) Wong Sr s case Kou chased Wong Jr unsuccessfully for the Charges. In/ about 2001 Kou told Wong Sr the Charges were about HK$300,000.00 and pressed him for payment. Ma paid Kou HK$150,000.00 (ie the 1st and 2nd Payments). Kou gave Ma a copy of a cheque for HK$150,000.00 (exhibit D1, Cheque ) which he claimed was dishonoured, so he asked Wong Sr to settle the remaining balance of the Charges. (b) Cheque The copy Cheque was dated 9th June 2000 and drawn by Ma on behalf of Shing Fai Engineering Co (Ma s sole proprietorship company) on Dao Heng Bank payable to Kou in the sum of HK$150,000.00. There was a stamp by Hang Seng Bank Limited across the face of the copy Cheque. Ma admitted he wrote and signed the Cheque, which was dishonoured upon presentation for payment due to insufficient funds in his bank account. Although Ma claimed he was unsure whether the Cheque was crossed, exhib T{ b& & T5_/ehyeQ0R SeQ[ & & TvQ @u`O} N5_hy Pck,g `O,g Nvu6q e0RoR,g e0Rck,g oR,g & & & & KNMR _+^1\ T`OOU0R 5_/ehy1\ 1\@b S g[ OU`O & & & & }/ehyvQ sbT5_/ehy bT5_hy 0& & P T& & /ehy & & & & d\O@T =~KN1\ e0R" 0& & c g@T e0R" OKNMR`O \bT

POUL c g 0 bT#j"V 5_hy ObT5_hy TbO- ObTF{" b@u[ ROObO Q\NpSa bT5_hy & & `O[RMbT{Hh bT5_/ehy@ubOZP O@ubO@T Q@uN 5_/ehy W5_hy biQ!k" cOO5_hy Kou received a total sum of HK$150,000.00 (ie the Alleged Loan) from him for part payment of the Charges, and (b) as evidence that Kou owed him HK$150,000.00. He later clarified that Kou was not the borrower of the Alleged Loan and did not owe him money, and the Cheque was merely confirmation of his payment of the loan proceeds to Kou. Ma claimed it was his practice to make records in such manner. Ma said he never gave the Cheque to Kou, but left it in his chequebook, which he kept in a storage compartment in his car. The storage compartment had a broken lid, so any passenger could have seen his chequebook. Ma did not know whether any passenger would have taken the Cheque, but there might have been such opportunity if he (as driver) had to leave to his car. Ma had no idea the Cheque was missing from his chequebook. When his solicitors informed him of the copy Cheque disclosed by Wong Sr in the present proceedings, he checked his bank statements and found an entry in early July 2000 showing that the Cheque was dishonoured upon presentation for payment. Ma said he had no prior knowledge of such dishonour because he rarely visited his friend s office at Kowloon Bay (which was used as his correspondence address with the bank) and did not read

his bank statements. But after he became aware of the copy Cheque, Ma still did not ask Kou for clarification (because he did not suffer any loss) or report loss of the Cheque to the police (because he did not wish to become embroiled in further litigation). (d) Discussion I have no hesitation in accepting Wong Sr s evidence in paragraph 32 above whilst I regard Ma s explanation to be a blatant untruth. In my view, Wong Jr was so financially straitened that he caused Ma to pay not only the 1st and 2nd Payments to Kou, but also a further sum of HK$150,000.00, which Ma did in June 2000 by way of the Cheque that was subsequently dishonoured. This would be consistent with what Kou told Wong Sr in 2001 and as stated in the Kou Defence. Since Kou did not receive the balance of the Charges due to the dishonour of the Cheque and Wong Jr s failure to pay, Kou approached Wong Sr in 2001 to press for payment. I find it wholly incredible that Ma would write the Cheque in the manner described above if all he wished to do was to record the fact he gave HK$150,000.00 to Kou. Ma retained the pay-in slip as record of the 1st Payment, and he could easily have asked for a copy of the cheque for the 2nd Payment from his bankers even if he had not retained any copy. Had Ma wished to make a personal record of the Alleged Loan, he could have written on the cheque stub, chequebook cover or even on the

back of the Cheque. If he had to write on the face of the Cheque (although there was no good reason why), he could have written a narrative record without filling in the particulars as if it were a bona fide cheque and/or sign his name as drawer. Ma could not satisfactorily explain why he crossed the Cheque or dated it with a date (ie 9th June 2000) wholly irrelevant to the 1st and 2nd Payments. The overall evidence suggested the Cheque was intended to be a cheque payable to Kou on 9th June 2000, which echoes the conclusion in paragraph 38 above. This is further supported by the fact that the Cheque had been presented for payment. Since it was a crossed cheque and the tenor of Ma s evidence in paragraph 34 above was that Kou presented it for deposit into his bank account, the irresistible conclusion in light of what Kou told Wong Sr (see paragraph 32 above which evidence I accept) was that the Cheque was dishonoured when Kou presented it for payment. Ma s claim that the Cheque inexplicably disappeared does not hold water at all. There was no evidence Kou had ever been a passenger in Ma s car. It is impossible to imagine that someone would have taken the Cheque from Ma s car and attempted to or passed to Kou to attempt to deposit it into Kou s bank account when such person could not assume that Ma would not read his bank statements and thereby would not discover the dealings in

relation to the Cheque in the following month. Ma s assertions were so incredible that they are unbelievable. His untruths in this respect severely and adversely affect his overall credibility and reliability. IX. Wong Sr s payment to Kou I accept Wong Sr did not know the arrangement between Wong Jr and Kou, but when Kou asked him to pay the balance of the Charges in/about 2001 Wong Sr was persuaded to do so by various instalments over a period of one odd year. Wong Sr emphasised he had no obligation to pay the Charges because the Renov oOUL nRQP[[ me Wong Sr was unaware of Kou s allegation in the Kou Defence that the total Charges were HK$270,000.00, the above matters were consistent with the Kou Defence (see paragraph 20 above). In my view, Wong Sr did not assume any personal or contractual liability for the Charges by making payment to Kou. Contractual liability for paying the Charges fell squarely on Wong Jr, and Wong Sr merely made voluntary payments to Kou to help Wong Jr who was then in financial difficulties. One cannot ignore the familial relationship between Wong Sr and Wong Jr. Wong Sr very fairly did not doubt Kou actually incurred costs and charges for the Renovation. I find the above factors prompted Wong Sr s willingness to make some voluntary payments, but it is a far cry from adopting liability for the Charges. This is also in line with Wong Sr s stance that he

would have awaited clarification from Wong Jr and not made payment had Kou asked for the full Charges of HK$300,000.00. X. Ma s alleged demand for the Alleged Loan Ma claimed that since Wong Sr failed to repay the Alleged Loan, he chased Wong Jr and asked to meet Wong Sr directly. This, Ma claimed, led to the Home Visit in early 2002. In light of the above findings, I disagree that Wong Sr failed to repay the Alleged Loan. However, I accept Ma did chase Wong Jr for loan repayment some time before the Home Visit, but even on Ma s case there was no satisfactory explanation why he chased Wong Jr when the deadline for repayment was only by Chinese New Year in 2002. This raised doubt as to the truthfulness of Ma s assertions in relation to the Alleged Loan Agreement. XI. Home Visit There is no dispute Ma came with Wong Jr to the Cockloft in early 2002 and was introduced to Wong Sr. This was the first time Ma and Wong Sr met or spoke with each other. (a) Ma s case Ma claimed that during the Home Visit he also met the Wife and an old lady (later known as Koo). When he chased Wong Sr for repayment of the Alleged Loan, Wong Sr admitted liability and promised to repay as soon as possible. At that time Ma thought Wong Jr was still living at the Cockloft. (b) Wong Sr s case Wong Sr claimed the Home Visit was in early 2002 before Chinese New Year. He was entertaining friends at the Cockloft

when Wong Jr and Ma showed up. Wong Sr thought Ma was a friend of Wong Jr. They left after a while. Although Ma paid another visit to the Cockloft during Chinese New Year, Wong Sr was not at home. He was subsequently informed of Ma s visit. (c) Discussion Since I have found there was no Alleged Loan or Alleged Loan Agreement, I disagree Wong Jr specifically brought Ma to the Cockloft to introduce him to Wong Sr so that he could chase Wong Sr for repayment of the Alleged Loan. I also do not accept that during the Home Visit Ma chased Wong Sr for repayment of the Alleged Loan or Wong Sr admitted liability and promised to repay the same. More importantly, without any Alleged Loan or Alleged Loan Agreement, there was no reason for Wong Sr to agree to any repayment. I prefer Wong Sr s evidence that he was entertaining friends at the Cockloft when his son (ie Wong Jr) dropped by with a friend (ie Ma). It was not surprising given that the Cockloft was close to where they worked (ie the TPR Site). XII. Authority of Wong Jr Even if Ma and Wong Jr entered into the Alleged Loan Agreement (which I disagree), I am of the view that Wong Jr did not have any actual authority to borrow the Alleged Loan on behalf of Wong Sr. Wong Sr did not even know about the 1st and 2nd Payments until Kou told him in 2001, so such knowledge had no bearing on the issue of Wong Jr s actual authority in August

1999. Further, the Home Visit also did not evidence any actual authority by Wong Jr to enter into the Alleged Loan Agreement on behalf of Wong Sr or amount to Wong Sr s ratification of such agreement. I do not accept Mr Wong s submission that because Wong Sr and not Wong Jr lived at the Cockloft and the Alleged Loan was for partial settlement of the Charges that Wong Jr had apparent authority to borrow the Alleged Loan on behalf of Wong Sr. Such submission was based on a mistaken understanding of Ma s case. In fact, Ma claimed he all along believed Wong Jr, a working adult with a respectable job, also lived at the Cockloft. Consequently, Wong Sr s residence at the Cockloft would not amount to any unequivocal representation to Ma that Wong Jr had authority to act on his behalf not just in respect of the Renovation but also to seek finance to pay for the same. Since there was no communication between Wong Sr and Ma prior to early 2002, all that was left was Wong Jr s representation to Ma. But Deputy Judge Ribeiro QC (as he then was) in Leung Shuk Kam v Cheung Suet Fun Maria Ausilla and anor HCA6182/1991 (unreported, 7th October 1992) said at paras.34 and 35 that : It is elementary and not disputed that in law a person does not constitute himself an agent simply by asserting, however convincingly, that he has been appointed as such by the alleged principal. In such a case, unless

the principal has subsequently ratified the purported agent s conduct, that conduct does not result in a contract binding on the principal . In such circumstances, there was no effective holding out by Wong Sr that Wong Jr had authority to borrow the Alleged Loan on his behalf. XIII. Benefit from the Alleged Loan Agreement Mr Wong argued that even if Wong Jr did not have any actual or apparent authority to enter into the Alleged Loan Agreement on behalf of Wong Sr, the Alleged Loan was applied for the benefit of Wong Sr who lived at the renovated Cockloft, so he was liable in equity to restore such monies to the extent that they had been so applied. This alternative cause of action was not pleaded. At the commencement of trial Mr Wong applied for leave (which I granted) to further amend the Re-Amended Statement of Claim, but he did not seek leave to plead such alternative cause of action. Nevertheless, Mr Wong pursued it in his closing submissions. Unsurprisingly, Mr Chan (who had by that time finished his closing submissions) objected. When I enquired whether he wished to seek leave to further amend Ma s pleadings, Mr Wong declined saying that Ma was entitled to raise such alternative cause of action without amendment since it was a mere matter of law. I disagreed and disallowed him from doing so. I indicated at the trial hearing I would hand down my reasons which I now

do. The starting point is Order 18 of the Rules of the District Court : 7(1) Subject to rules 12, every pleading must contain, and contain only, a statement in a summary form of the material facts on which the party pleading relies for his claim or defence, as the case may be, but not the evidence by which those facts are to be proved, and the statement must be as brief as the nature of the case admits. 8(1) A party must in any pleading subsequent to a statement of claim plead specifically any matter - (a) which he alleges makes any claim or defence of the opposite party not maintainable; or (b) which, if not specifically pleaded, might take the opposite party by surprise; or (c) which raises issues of fact not arising out of the preceding pleading. 12(1) every pleading must contain the necessary particulars of any claim, defence or other matter pleaded 15(1) A statement of claim must state specifically the relief or remedy which the plaintiff claims It was therefore plain that in order not to take Wong Sr by surprise Ma must specifically plead all the material facts and reliefs that constituted his cause(s) of action against Wong Sr in order to establish his claim, and all the material facts which he relied for asserting that Wong Sr s defence was not maintainable. Ma CJHC in Wing Hang Bank Limited v Crystal Jet International Limited & ors [2005] 2 HKLRD 795, 799 reiterated

some basic principles of pleadings as follows : The purpose of pleadings is fairly and precisely to inform the other side of the stance of the pleading party so that proper preparation is made possible, and time and effort are not expended unnecessarily on other issues. The passage at p.297 para.18/12/1 of Hong Kong Civil Procedure 2004 Vol.1 sets out the rationale for proper pleadings. (2) In a trial, particularly where evidence is given by witnesses, it becomes extremely important that each side knows exactly what are the live issues. Where issues are sought to be introduced that have not been adequately or properly pleaded, amendments must be sought unless the consent of the other party or parties has been obtained. It will simply not do for unpleaded issues to be slipped in when evidence is being given in the hope that the other side is not sufficiently alert to object. Much testimony given in the course of a trial may in truth relate to a number of possible aspects or may simply be background information. Obviously, counsel must be astute to object when necessary but the primary responsibility of ensuring that any issue is properly before the Court is on the party seeking to advance that issue. He must do so clearly and not ambiguously, and the usual way of doing so is through the pleadings. Care must be taken to plead issues clearly, and not draft pleadings either vaguely

or ambiguously perhaps in the hope that the other side might not readily or easily understand a party s real case. While vaguely or ambiguously drawn pleadings may enable a party to escape a strike-out application (since striking out is only for plain and obvious cases), this is not to say that where a court has to decide whether or not an issue is to be permitted to be run, it will smile kindly on such types of pleading. (my emphasis) Here, Ma s pleaded claim was for breach of contract (ie breach of the Alleged Loan Agreement made by Ma and Wong Jr on behalf of or ratified by Wong Sr) for recovery of a legal debt. However, the alternative cause of action was based on an alternative factual scenario, ie the act of Wong Jr as agent was unauthorised, not ratified and therefore wrongful, and was a claim in equity that sought restitutionary relief. Such cause of action clearly raised much more than a mere matter of law. Hong Kong Civil Procedure 2007 Vol.1 para.18/7/12 at p.306 stated as follows : Either party may in a proper case include in his pleading two or more inconsistent sets of materials facts and claim relief thereunder in the alternative Whenever alternative cases are alleged, the facts belonging to them respectively ought not be mixed up, but should be stated separately, so as to show on what facts each alternative relief is claimed. But Ma s pleadings were wholly

silent on the material facts for the alternative cause of action. Since Mr Wong chose to stand on Ma s existing pleadings, it was not open for Ma to argue such alternative cause of action. In any event, I would have declined to grant leave for Ma to so amend his pleadings at this late stage. To grant leave when Wong Sr and Koo had given evidence and when Mr Chan had finished his closing submissions would have caused prejudice that could not have been compensated by costs. An equitable claim begets equitable defences, but Wong Sr would have been denied the opportunity to respond with appropriate equitable defence(s) and/or relevant evidence. XIV. Post-Home Visit Ma claimed that after the Home Visit he continued to chase both Wong Sr and Wong Jr for repayment of the Alleged Loan. He further claimed that when Wong Jr disappeared in April 2002, Ma continued to chase Wong Sr by calling the Home Number. However, I prefer Wong Sr s evidence that when Ma chased him for payment of the Alleged Loan, he explained clearly he did not borrow any m ce by debt collectors who came to the Cockloft to demand for payment. The debt collectors claimed that Ma instructed them to collect payment. They posted up Dunning Letters and kicked the entrance of the Cockloft with such force that Wong Sr was able to hear them inside. Wong Sr and his family were scared and angry with the Paint Spray Incident.

Wong Sr reported such incident and other incidents of harassment and disturbance in 2002-2003 to the police, and these reports were pending investigation. Because of the disturbing telephone calls, Wong Sr changed the Home Number but could not remember when he did so. (b) Ma s case Wong Jr disappeared in 2002. In/about mid-2003, Ma approached a solicitor Mr Leung who advised him to claim against Wong Sr as borrower of the Alleged Loan. Through the assistance of Mr Leung whom Ma then trusted, Ma engaged the services of a debt collection company to recover the Alleged Loan. He recalled signing an English document at Mr Leung s office requiring the debt collection company to use lawful means and limiting its authorisation to three months (ie up to September 2003). Such document was not referred to in Ma s witness statement or disclosed in the present legal proceedings. After September 2003, Ma could not contact Mr Leung who like Wong Jr had disappeared. Ma did not know the name of the debt collection company (because Mr Leung did not tell him) or its responsible or contact person. The debt collection company did not charge him any fees for the debt collection service. Ma did not know whether debt collectors went to the Cockloft in March/April 2003 and/or telephoned to demand payment. Ma claimed that even if they did, they were not on his instructions. He only became aware of the

debt collection activities much later when the police told him to recover any indebtedness by proper means (ie by civil claim). But he knew that at some stage Wong Sr changed the Home Number. (c) Discussion I accept that Wong Sr made reports to the police in relation to debt collection activities as early as in 2002-2003 and in relation to the Paint Spray Incident in May 2003. It is also common ground that Ma retained the services of a debt collection company. I find he did so in the latter half of 2002 (ie after Wong Jr disappeared in April 2002 and Wong Sr refused to pay) as Wong Sr said and as Ma admitted in his pleadings, and not from mid-2003 to September 2003 as Ma alleged in his evidence. I further find that pursuant thereto debt collectors telephoned the Home Number and visited the Cockloft to dun for payment of HK$150,000.00 (eg posting up/leaving Dunning Letters, kicking the main entrance, committing the Paint Spray Incident and making a nuisance of themselves). Although the identities of those who committed these acts were unknown, I find as a matter of inference they were seeking to collect repayment of Ma s loan of HK$150,000.00 to Wong Jr (see paragraph 30 above) or make demands related to such loan. I find Ma s vagueness unconvincing. Although he claimed he did not remember the name of the debt collection company or its responsible or contact person, he admitted

he had been contacted by someone from the debt collection company, and more interestingly he was able to engage the debt collection company for debt collection service again in 2005 (see paragraphs 105-109 below) when Mr Leung (whom Ma said made all the arrangements on his behalf) had already disappeared. Further, Ma admitted the police liaised with him over debt collection matters shortly before he commenced the SCT Claim in November 2005. I find Ma s inability to recall any details suspect. I further find Ma was liable for the actions of the debt collectors notwithstanding the terms of the alleged arrangement between Ma and the debt collection company inter alia that the latter should use lawful means. Similar scenario has been considered by the Court of Appeal in Wong Wai Hing & another v Hui Wai Lee [2001] 1 HKLRD 736, which neither Mr Wong nor Mr Chan cited. In that case, the defendant engaged the services of a debt collection agency to obtain payment of an unpaid debt. The contract provided that only lawful means would be used for collecting the debt. But the defendant s operatives used threats and engaged in conduct that constituted assault and intimidation. It was held on appeal that the defendant was liable for the actions of the debt collection agency. The analysis by the Court of Appeal was clearly reflected in the material parts of the headnote which were extracted

as follows : (Per Rogers V-P) (1) To a large extent, each case must be considered separately to determine whether the agent was truly acting in an independent way such that his actions as a contractor might be truly viewed as independent of the principal, or whether his actions were so intimately representative of the principal that the principal could not be divorced from them. In the latter case, the law imposed liability on a principal for torts committed by an agent. (2) Here, D was liable for E1 and E2 s actions. D had asked the agency to represent her. In acting as a debt-collector, the agency was empowered to collect the debt. Approaches were part of the expected armoury of a debt-collector. In a general sense, the task the agency had been engaged to do was make such a nuisance of itself that it would receive payment. Therefore, E1 and E2 were representing D when they approached and spoke to Ps. Further, the undertaking that only legal means were to be used did not relieve the agency from liability. The undertaking did not limit the sphere of employment, ie the class of acts which could be done, in this case, debt-collection, but merely regulated the conduct within that sphere, ie the mode in which those acts could be done, in this case, the mode of carrying out the debt-collection (Per Le Pichon JA and Keith JA agreeing) Thirdly, a principal could be liable under the

principles set out in Colonial Mutual Life Assurance Society Ltd v Producers and Citizen s Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41 (the Colonial Mutual principles) Under the Colonial Mutual principles, a principal might be liable for the torts of his agent where the agent was not acting in an independent capacity but in a representative one standing in the place of his principal and the very service to be performed consisted in standing in the principal s place. The liability was therefore personal to the principal, rather than vicarious. The function entrusted was that of representing the person who requested its performance, not merely in a transaction with others but was an activity where others could be seen to be closely affected. That which gave rise to liability must be done for and on behalf of another, which was not the same as saying simply that it was for his benefit or at his request Applying the Colonial Mutual principles, D was liable for the acts of the agency When the torts were committed by E1, his presence was referable to and explicable only by reason of the contract between D and the agency. He was doing precisely the job that the agency had undertaken to do, namely, to collect the debt. The tortious acts were committed in the course and scope of the agency. The undertaking that no illegal means would be used went to the mode of

performance only and so did not relieve the principal from liability Further, I am of the view that in engaging the debt collection company to collect the sum of HK$150,000.00 when he plainly knew Wong Jr had disappeared, Ma must have known the debt collectors would approach Wong Sr and other occupants (who had no contractual liability to pay Ma) to collect payment by making a nuisance of themselves. I will discuss below whether the debt collection activities constituted duress. XVI. Ma s Agreement or Wong Sr s Agreement? (a) Wong s case Wong Sr claimed that at that time he and his family were frightened by the debt collection activities. Koo also said she was very scared. Wong Sr claimed he was forced to enter into Wong Sr s Agreement even though he had no contractual obligation to repay any indebtedness which Wong Jr might have owed Ma and which he had no opportunity to verify with Wong Jr. In mid-2003, after discussion with Ma, Wong Sr offered to pay Ma monthly instalments up to a limit of HK$100,000.00 to put an end to the debt collection activities (ie for Ma and debt collectors to leave him and his family in peace). Wong Sr said he did so in order to protect his family from further disturbance, but made clear this was not his repayment as he never borrowed money from Ma. Wong Sr sa & & /f(W !qHY FO&N^ /f c[ Owk N v k>k p NP \~b[ c[ O g kx & & \1\@u U}Y1\@u ephone

conversation with Wong Sr in mid-2003, he demanded repayment of the Alleged Loan. Wong Sr admitted he owed Ma the Alleged Loan and voluntarily proposed to make monthly instalment payments of HK$4,000.00 each until full repayment. Wong Sr also promised to accelerate payment whenever he had more money. Ma claimed there was no reason for him to agree to Wong Sr s Agreement as it did not reflect the true indebtedness due to him. (c) Discussion (1) Wong Sr s Agreement On balance I reject Ma s evidence and find the parties reached agreement in terms of Wong Sr s Agreement. Despite Ma s demands to Wong Sr for payment, Wong Sr steadfastly refused to make any payment for more than a year after Wong Jr s disappearance. Ma did not give any satisfactory explanation why Wong Sr suddenly offered to make instalment payments for the entire Alleged Loan in mid-2003. I find Wong Sr only offered to make instalment payments up to a limit of HK$100,000.00 because he was disconcerted by the debt collection activities and wanted to put an end to the nuisance. I further find Ma accepted the offer although the proposed payment was less than the Alleged Loan because he knew he had no right to dictate terms. There was also no reason for Wong Sr to offer (and I find he did not offer) to make accelerated payment if possible. Ma s evidence in this respect was startling when Wong Sr had been unwilling to

make payment at all over the past year or so. This is nothing but a poor attempt to explain away the actual accelerated payments made by Wong Sr in September 2003 under Wong Sr s Agreement (see paragraph 88 below). Given my finding against the existence of any Alleged Loan Agreement, I disagree that Wong Sr offered to repay the Alleged Loan. However, Mr Wong seized upon the Chinese characters N/nc^ s safety and to the amount of HK$100,000.00 were plainly inconsistent with any contractual obligation to repay the Alleged Loan of HK$150,000.00. I also bear in mind that in paragraph 6 of the same witness statement Wong Sr clearly denied any liability to make repayment to Ma on behalf of Wong Jr. Upon proper construction, Wong Sr did not admit liability to repay the Alleged Loan by using the Chinese characters ective ratification. Bowstead & Reynolds on Agency 18th ed (2006) para.2-070 at p.77 made clear that an express ratification must be a clear manifestation by one on whose behalf an unauthorised act has been done that he treats the act as authorised and becomes a party to the transaction in question (my emphasis). Halsbury s Laws of Hong Kong Vol.1(2) 2003 Reissue para.[15.025] stated that [ratification] can be effected by words or conduct unequivocally showing an intention to adopt the agent s act (my emphasis). But my findings above plainly showed that Wong Sr did not by Wong

Sr s Agreement or by payment of the monthly instalments thereunder to Ma (a) agree to make payments as contracting party to and/or principal debtor under the Alleged Loan Agreement or (b) adopt such agreement or the Alleged Loan as his own. In the circumstances, there is no basis to support any ratification. Mr Wong relied on the following passage from Halsbury s Laws of Hong Kong Vol.1(2) 2003 Reissue para.[15.025] : Voluntary acceptance of the benefit of the agent s act constitutes ratification. Acting in accordance with the terms of the contract made by the agent also constituted ratification (my emphasis) I disagree there was any voluntary acceptance by Wong Sr of the benefit of Wong Jr s act by virtue of Wong Sr s Agreement. Mr Wong referred me to Leung Shuk Kam where the 2nd defendant entered into a provisional agreement for the sale of the 1st defendant s property to the plaintiffs. There was no evidence to establish that the 2nd defendant had any authority to act as agent, but the deposit paid by the plaintiffs was paid into the 1st defendant s bank account and the estate agent told the 1st defendant it was intended to be the deposit payable under the provisional agreement. On the following day, the 1st defendant transferred such deposit sum from her account to the account of her elder sister. It was held that the 1st defendant s retention of the money and her transfer

of such money to her sister evidenced implied ratification of the provisional agreement. But the facts in Leung Shuk Kam were a far cry from the factual circumstances in the present case. In that case, the 1st defendant kept and transferred the money as deposit under the provisional agreement to her sister, so such conduct ratified the act of the agent. Here, Wong Sr made clear to Ma he did not endorse the act of Wong Jr and he only made the offer to pay instalment payments in order to get rid of the nuisance caused by demands from Ma and/or debt collectors. There was no voluntary acceptance of Wong Jr s act. Mr Wong next suggested that even if Wong Sr was unaware that Wong Jr borrowed the Alleged Loan on his behalf and/or Ma paid the proceeds of the Alleged Loan to Kou for the Charges pursuant to the Alleged Loan Agreement, it was subsequently ratified by [Wong Sr s] voluntary acceptance of the benefit of [Wong Jr s] act in that he did not ask Kou to return the sum of HK$150,000.00 to Ma and pay such sum to Kou himself for the Charges. I cannot accept such contention. There was no contractual obligation for Wong Sr to pay the Charges to Kou. The relevant contracting party for the Renovation was Wong Jr. Wong Sr at best accepted his son s filial efforts to upgrade his living condition by renovating the Cockloft. But it was not voluntary acceptance of Wong Jr s act of borrowing

money from Ma to pay for the Charges, which was Wong Jr s and not his obligation. Whilst I have no disagreement with the principles set out in Republic of Peru v Peruvian Quano Company (1887) 36 Ch D 489 and In re Mawcon Ltd [1969] 1 WLR 78, in light of my findings above, Wong Sr s willingness to make payment to Ma up to a limit of HK$100,000.00 was not an adoption of part of the Alleged Loan Agreement that operated as ratification of the whole. Mr Wong submitted otherwise. He relied on two contentions. First, by residing in the Cockloft with his family (including the Wife, Daughter and Koo), Wong Sr obtained the benefit of the [Renovation] when [Ma] made the payment in the amount of HK$150,000.00 under the [Alleged Loan Agreement] . Secondly, the Alleged Loan was obtained and applied for Wong Sr s benefit to discharge his obligation to pay for [the Charges], and [Wong Sr] accepted the benefit notwithstanding he had no knowledge of the same . I can dispose of these arguments simply on my finding that Wong Sr was not contractually obliged to pay the Charges to Kou or to repay the Alleged Loan to Ma. I have also explained in paragraphs 28 and 50 above why Wong Sr s mere residence at the renovated Cockloft was not enough. Further, these arguments ran dangerously close to the alternative cause of action which I have disallowed. In short, there was never acting [by Wong Sr] in

accordance with the terms of contract made by the agent [ie Wong Jr] or any unequivocal adoption by Wong Sr of the Alleged Loan Agreement or the Alleged Loan. XVII. Disputed Faxes Between 2nd July 2003 and 4th May 2005, Wong Sr deposited the Paid Sum (with some instalments payments more or some less than HK$4,000.00) into Ma s bank account. It was much later that Ma and Wong Sr discovered that the total sum paid was less than HK$100,000.00. Ma realised the same when he went through the documents with his solicitors for the purpose of the present proceedings, which in my view explained why the Dunning Letters and the SCT Claim in 2005 only claimed for HK$50,000.00 (see paragraphs 105-106 and 110 below). Wong Sr was also under the impression he had paid HK$100,000.00 until he checked the documents recently. He fairly admitted he omitted to pay HK$5,000.00 under Ma s Agreement due to carelessness. To understand the parties assertions in relation to the Disputed Faxes, it is necessary to bear in mind the first eight instalment payments between 2nd July 2003 and 30th March 2004 as follows : Date Amount (HK$) 2nd July 2003 10,000.00 2nd August 2003 4,000.00 2nd September 2003 4,000.00 20th September 2003 9,000.00 23rd September 2003 4,000.00 24th September 2003 4,000.00 27th September 2003 3,000.00 30th March 2004 2,000.00 I disagree with Ma s claim that Wong Sr paid a total sum of

HK$20,000.00 between 2nd September and 2nd October 2003. In fact, he paid a total sum of HK$24,000.00 (ie equivalent to six and not five instalments of HK$4,000.00 each), so he only paid the next instalment payment on 30th March 2004. Ma did not satisfactorily explain why Wong Sr would accelerate payment of the monthly instalments from September 2003 to February 2004 (ie HK$24,000.00) by paying them all within September 20 \/nc^ WX[eQ,g #nSb \ k,g N/nc^Lc, \/nc^ X[eQ,g N#nSb Nf},g clearly showed that the total payment should be HK$100,000.00 and not HK$150,000.00. Ma claimed he did not know Wong Sr s fax number and denied having written, signed or issued the Disputed Faxes which he said were forgeries. He claimed the pen strokes for his signature were different from those of the signatures in the Disputed Faxes. Ma claimed his stance was supported by the inherent unreliability of the Disputed Faxes, which I now turn to. I accept that the Disputed Faxes were received via the only fax machine at the Cockloft ( Fax Machine ) with fax number 2565[xxx]. On 16th February 2003, Wong Sr received the 16/9/03 Fax (exhibit D2) with a fax header that read as follows : FROM: PHONE NO.: SEP. 16 2003 02:03PM P1 On 18th February 2003, Wong Sr received a junk fax ( Junk Fax ) being the reverse of the 18/9/03 Fax (exhibit D3) with a fax header that read as follows : From: user To: Fax#2565[xxxx]

Date: 2003/9/18 Time: PM 04:48:20 Page 1 of 1 Such fax header showed that the Junk Fax was received by the Fax Machine at 4:48:20 pm. Wong Sr reused the Junk Fax, and about two odd hours later at 7:07pm the Fax Machine received the 18/9/03 Fax on the reverse of the Junk Fax. The fax header of the 18/9/03 Fax read as follows : FROM: PHONE NO.: SEP. 18 2003 07:07PM P1 The fax headers of the Disputed Faxes did not identify the callers or recipients. Their format, font and font size were the same but different from the fax header of the Junk Fax. Ma claimed such di P1\- UrUb_ 0& & P_jhV@T UrUf r clarified under re-examination that in his experience the fax headers of the faxes received by the Fax Machine from different senders (note that he had the Fax Machine for more than a year and received an average of ten faxes a day) had different format (eg some had caller identities and some not) and font. I see no reason to doubt Wong Sr s explanation. I accept that the Disputed Faxes as well as the Junk Fax were received via the Fax Machine at the times and in the manner described in paragraph 93 above, which together with the contents of the Disputed Faxes sat well with the timing and amount of Wong Sr s actual payment of the first eight instalment payments to Ma. Plainly Wong Sr acted on the instructions in the Disputed Faxes. Since Ma failed to offer any satisfactory explanation for

the accelerated payments and given his lack of credibility, I reject his claim that the Disputed Faxes and his signatures thereon were forgeries. Having studied Ma s signatures on the Disputed Faxes, copy Cheque, Re-Amended Writ, Re-Re-Amended Statement of Claim, witness statement, and Notice of Discontinuance of the SCT Claim, I am unable to agree that the signatures on the Disputed Faxes were distinctly different. Indeed, Ma confessed that other than his signature on the copy Cheque, Wong Sr would not have known how he signed his name. In any event, as I have found there was no Alleged Loan Agreement, I do not accept Mr Wong s argument that Wong Sr s instalment payments were partial repayments under the Alleged Loan Agreement. XVII. Duress I agree with Mr Wong that in considering whether Wong Sr s Agreement was vitiated by duress, the relevant events and circumstances were those at/before mid-2003. Mr Wong argued that Wong Sr s defence and counterclaim based on duress must fail since it had not been specifically and carefully pleaded. He referred to Hong Kong Civil Procedure 2007 Vol.1 para.18/8/9 at p.308 which states that a claim or a defence raising duress should contain full particulars of the facts and circumstances relied upon as to where, when, by whom, over whom and in what way duress was exercised (see also Tudor Grange Holdings Ltd & others v Citibank NA & another

[1991] 3 WLR 750, 765). Paragraph 4 of Wong Sr s Re-Amended Defence and Counterclaim pleaded inter alia that Dunning Letters were placed at the Cockloft and Wong Sr was disturbed and intimidated by the demands to pay HK$150,000.00. I do not need to deal with Mr Wong s pleading point because save for a few incidents (eg the debt collectors kicking the main door and/or main gate of the Cockloft and the Paint Spray Incident) Wong Sr s evidence in relation to the activities of the debt collectors prior to mid-2003 lacked particularity on the specific threatening, intimidating or disturbing words/conduct and on the gist of the words used by the debt collectors over the telephone or on visits to the Cockloft for demanding payment. There was no evidence as to the specific threatening and/or intimidating contents of the Dunning Letters (other than demand for payment) prior to mid-2003. In the circumstances, although I accept the debt collectors made approaches and a nuisance of themselves to persuade payment, other than kicking the main door and/or metal gate of the Cockloft and the Paint Spray Incident which might cause some concern, Wong Sr s evidence as to the gist of the acts and what was said was far from satisfactory to support the assertion of illegitimate pressure amounting to intimidation, exhortation, threat, bullying, harassment and ultimately duress. In Pao On v Lau Yiu

Long [1980] AC 614, 635 Lord Scarman said as follows : Duress, whatever form it takes, is the coercion of the will so as to vitiate consent In determining whether there was a coercion of the will such that there was no true consent, it is material to inquire whether the person alleged to have been coerced did or did not protest; whether, at the time he was allegedly coerced into making the contract, he did or did not have an alternative course open to him such as an adequate legal remedy; whether he was independently advised; and whether after entering the contract he took steps to avoid it. (my emphasis) In Universe Tankships of Monrovia v ITWF [1983] 1 AC 366, 384, Lord Diplock said the rationale was that the party s consent was induced by illegitimate pressure with the consequence that the consent was treated in law as revocable. Lord Scarman, who dissented on an immaterial issue, said at p.400 that the classic case of duress was not the lack of will to submit but the victim s intentional submission arising from the realisation that there was no practical choice open to him. Having considered the totality of the evidence, I am not convinced it was Ma s wrongful or illegitimate threat/pressure leading to an absence of practical choice that persuaded Wong Sr to enter into Wong Sr s Agreement and to pay the Paid Sum to Ma. Whilst I accept Wong Sr regarded the activities of the

debt collectors a nuisance and wished to put an end to the same, the following matters showed his will was not so overborne or deflected as to render Wong Sr s Agreement void or voidable : Wong Sr resisted Ma s and the debt collectors demands for more than a year before entering into Wong Sr s Agreement. In paragraph 4 of the Re-Amended Defence and Counterclaim, Wong Sr averred that despite }6exe b O, & & NUOqg instalments and persuaded Ma to accept his proposal after discussion. Clearly he did not succumb to Ma s pressure to make him pay HK$150,000.00. He even said he would not have agreed to pay if Ma insisted on payment of HK$150,000.00. Wong Sr also made clear he had a choice whether to make payments under Wong Sr s Agreement and he would only pay if his financial situation permitted. All along Wong Sr reported the debt collection activities in 2002-2003 (including the Paint Spray Incident) to the police and cooperated in police investigation without any suggestion of fear of retribution. The instalment payments under Wong Sr s Agreement were paid over a period of two years. Prior to the counterclaim herein, there is no evidence that Wong Sr ever took any steps to disavow or dispute Wong Sr s Agreement or that he complained to the police about and/or took steps to set aside Wong Sr s Agreement even though he again reported to the police about debt collection activities in

2005 (see paragraph 105-108 below). In the circumstances, even if there had been any duress, Wong Sr had affirmed the agreement. Accordingly, Wong Sr failed to satisfy me he entered into Wong Sr s Agreement and paid the Paid Sum under duress. I find he consciously did so because he wanted to put an end to the nuisance arising from Ma s demands and the debt collection activities, but his will was not overborne or deflected. XVIII. After 4th May 2005 Wong Sr claimed that several months after 4th May 2005, Ma went back on his word under Wong Sr s Agreement and again engaged debt collectors (who targeted the Daughter this time) to collect payment of HK$50,000.00. The Dunning Letters demanded the Daughter to pay HK$50,000.00 which were consistent with the SCT Claim against inter alia the Daughter for HK$50,000.00. I have no hesitation in drawing the inference that the debt collectors acted on behalf of Ma. Wong Sr made various reports to the police which were still under investigation. On 28th October 2005 debt collectors came to the Cockloft to demand the Daughter to pay HK$50,000.00. On 25th November 2005, debt collectors came to the Cockloft to demand for payment and to post up Dunning Letters. Wong Sr reported these incidents to the police. On 29th December 2005, Koo opened the main door of the Cockloft but not the metal gate when the doorbell rang. She saw a stranger who said

Ma asked him to demand the Daughter to make payment. The stranger banged on the metal gate four to five times after Koo closed the door. The lights at the Cockloft suddenly went out. Koo was frightened and Wong Sr later discovered the main electricity switch outside the Cockloft had been switched off. This incident was reported to the police. In December 2005, the debt collectors (who claimed to be acting on Ma s instructions) visited the Cockloft to post up and/or leave Dunning Letters demanding Wong Jr to repay to Ma a sum of HK$300,000.00. Wong Sr s witness statement dated 23rd August 2006 stated that the debt collectors Pf}[ KN(u activities were irrelevant to the issue of duress vis- -vis Wong Sr s Agreement and the payments thereunder. However, they showed that whilst Ma clearly knew by 2005 that Wong Jr had left Hong Kong and disappeared, he was not above using debt collectors to cause nuisance to those whom he admittedly knew did not owe him any money (eg the Daughter) in attempts to get payment. I find Ma would go to any lengths to recover what he had paid to Kou and the propriety of his demands meant little to him. I find him wholly untrustworthy. XIX. SCT Claim Although Ma knew the Wife and Daughter did not owe him any money, he sued them in the SCT Claim for HK$50,000.00 being the outstanding balance of the Alleged Loan. He claimed he did so because inter alia he did

not know the full name of Wong Sr (whom he addressed all along as ly to the SCT Claim issued by Ma. Shortly thereafter Ma discontinued the SCT Claim and commenced the present proceedings. As seen from the above analysis, there was also no justification for him to sue any of the defendants in the present proceedings. XX. Hearing on 19th June 2006 Ma claimed that at a hearing on 19th June 2006 in the present proceedings Wong Sr admitted he borrowed the Alleged Loan and falsely alleged that Ma agreed not to demand repayment of the outstanding balance. Wong Sr denied such allegation. There was no transcript of the hearing. During the trial Mr Wong agreed that Ma s allegation would not be relied on as admission on the part of Wong Sr. XXI. Conclusion In the circumstances, Ma failed to establish his claim which is hereby dismissed. Wong Sr also failed to establish that Wong Sr s Agreement was void or voidable as a result of duress. As he did not rely on any other grounds that might vitiate such agreement (eg lack of consideration etc), his counterclaim is also dismissed. There is no reason why costs do not follow event. I grant a costs order nisi that Ma do pay Wong Sr s costs of his claim (including all costs reserved, if any) in these proceedings whilst Wong Sr do pay Ma costs of the counterclaim (including all costs reserved, if any) to be taxed if not agreed. Both the claim and counterclaim were below HK$150,000.00 and the issues were not complicated. There shall be no certificate for counsel. (Marlene Ng) District Court Judge Representation : Mr Tim Wong instructed by Messrs Louis K Y Pau & Co for the Plaintiff Mr Chan Siu Chung of Messrs S C Chan & Co for the 1st Defendant

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