Liu Man Chuen Eddy v. Lee Wai Lun
Read the full judgment text of DCCJ 157/2017 on BabelCite. This District Court judgment was delivered on 11 September 2018.
1. The plaintiff was a merchant carrying on a business of, inter alia , the sale of second-hand cars and the provision of car maintenance services in Hong Kong. He also sold car parts in Mainland China.
Cited by 2 cases · Cites 4 cases
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DCCJ 157/2017 [2018] HKDC 1086 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 157 OF 2017 -------------------------
------------------------- Before: Deputy District Judge Jeffrey Chau in Court Dates of Hearing: 6 – 8 & 10 August 2018 Date of Judgment: 11 September 2018 --------------------- JUDGMENT ---------------------- BACKGROUND The plaintiff’s dealing with the third party (“Mr Lo”) 1.The plaintiff was a merchant carrying on a business of, inter alia, the sale of second-hand cars and the provision of car maintenance services in Hong Kong. He also sold car parts in Mainland China. 2.Mr Lo was an agent who was regularly engaged to procure cross-boundary vehicle licences. 3.According to the plaintiff, in July 2011, he and Mr Lo entered into an oral agreement for the procurement of a Hong Kong-PRC cross boundary vehicle licence whereby the plaintiff agreed to purchase and Mr Lo agreed to procure the licence by February 2012 (“the July 2011 Contract”). The consideration of the July 2011 Contract was RMB 400,000, to be paid by the plaintiff to Mr Lo by instalments. 4.Pursuant to the July 2011 Contract, the plaintiff made instalments on 14 July 2011, 16 August 2011 and 17 January 2012, totalling RMB300,000. 5.It is common ground between the parties that to procure a cross-boundary vehicle licence, a Hong Kong company and a Mainland company would have to be set up. The Hong Kong company would have to make capital contributions to the Mainland company and become its shareholder. The Hong Kong company would in due course become the holder of the licence, and the owner of the relevant cross-boundary vehicle must be the proprietor or shareholder of the Hong Kong company. 6.For the purpose of procuring the licence, Mr Lo also agreed to set up a Hong Kong company and a Mainland company for the plaintiff. 7.In respect of the Hong Kong company, according to the plaintiff, on 4 September 2011, a Ms Mok, Mr Lo’s assistant, gave the plaintiff the business registration certificate of a local unincorporated company by the name of Sun Tak Hing Trading Company (新德興貿易公司) (“Sun Tak Hing”). 8.Sun Tak Hing was set up on 1 May 2011. Originally, Mr Lo was its sole proprietor. According to the IRBR 64 Form dated 18 August 2011 (“the August Form”), the plaintiff became a partner of Sun Tak Hing on 15 August 2012, and Mr Lo removed himself as its partner on 16 August 2012. 9.In respect of the Mainland Company, Guangzhou Xingyuwan (廣州市星御灣酒店管理有限公司) (“GX”) was set up on 5 August 2011, and the plaintiff was appointed as the legal representative thereof. The shareholder of GX was however not Sun Tak Hing, but another unincorporated Hong Kong company by the name of Rich Investment Trading Limited (富裕投資有限公司). 10.Mr Lo had not procured the licence by February 2012, and the plaintiff and Mr Lo agreed to postpone the transaction until late 2012. 11.But Mr Lo still failed to procure the licence even after the deadline. 12.On or about 8 August 2013, the plaintiff discovered that, without his knowledge or consent (1) the defendant, who was unknown to the plaintiff, was added as a partner of Sun Tak Hing and (2) at about the same time, the plaintiff was removed as its partner. 13.According to the IRBR 64 Form the Inland Revenue Department received on 21 December 2012 (“the December Form”), the defendant was added as a partner of Sun Tak Hing on 15 November 2012, while the plaintiff was removed as its partner on 16 November 2012. 14.The plaintiff also subsequently discovered that a cross-boundary vehicle licence was eventually granted to Sun Tak Hing whose sole proprietor at the material time was, as stated above, the defendant. Sun Tak Hing was a shareholder of 興德軟件開發(惠州)有限公司 (“Xing De”), not GX. 15.On 4 March 2014, the plaintiff made a report to the Hong Kong Police that his signature on the December Form had been forged and that he was a victim of fraud. 16.The plaintiff has never obtained a cross-boundary vehicle licence from Mr Lo. 17.On 16 July 2014, a settlement agreement was reached between the plaintiff and Mr Lo (“the Settlement Agreement”). Pursuant to the Settlement Agreement, Mr Lo paid the plaintiff HK$375,000 on the same day, and was due to pay another sum of HK$375,000 on 24 July 2014. The plaintiff also reserved the right to pursue further remedies against Mr Lo should Mr Lo fail to obtain a new licence for him by 30 September 2014. 18.Mr Lo defaulted the second payment. The plaintiff, therefore, commenced proceedings to sue Mr Lo for, inter alia, the outstanding sum under the Settlement Agreement. The plaintiff obtained judgment against Mr Lo on 31 May 2017 (see Liu Man Chuen Eddy v Lo Ming San, unrep, DCCJ 3970/2015, 31 May 2017). According to plaintiff’s counsel, the plaintiff had since received the further sum of HK$375,000 from Mr Lo. The defendant’s dealings with Mr Lo 19.The defendant was a merchant and carried on business both in Hong Kong and Mainland China. 20.According to the defendant, in about June 2011, he called up Mr Lo, who had helped one of his friends to obtain a cross-boundary vehicle licence successfully, to ask whether he could also help him to obtain a licence. 21.Mr Lo orally agreed to procure a licence for the defendant for RMB420,000, to be paid in 3 instalments. 22.Mr Lo also told the defendant that to procure the licence, a Hong Kong company and a Mainland company had to be set up. 23.In respect of the Hong Kong company, in about July or August 2011, Ms Mok informed the defendant that a company called “Man Yuen (Hong Kong) International Trading Company” (萬源(香港)國際貿易公司) (“Man Yuen”) had been successfully registered under the defendant’s name. 24.In respect of the Mainland company, in or about September 2011, Ms Mok informed the defendant that a Mainland company in the name of Xing De was incorporated for the purpose of obtaining the licence. 25.According to the corporate documents, Xing De was incorporated on 26 August 2011. The defendant was appointed as its legal representative on 1 August 2011, before Xing De was incorporated. Xing De was wholly owned by Sun Tak Hing. 26.In about mid-January 2013, Mr Lo called the defendant and informed him that the Mainland company Xing De should correspond with Sun Tak Hing (instead of Man Yuen), and this mistake had been rectified. 27.As stated above, according to the December Form, the defendant was added as a partner of Sun Tak Hing on 15 November 2012, while the plaintiff was removed as its partner on 16 November 2012. 28.In early September 2013, Mr Lo notified the defendant that the application for the licence had been approved. Yet, due to complications encountered throughout the application process, the contract sum would have to be increased from RMB420,000 to RMB520,000. The defendant agreed to pay the revised consideration and by 14 September 2013, he had paid the entire RMB520,000 to Mr Lo. 29.On or about 16 September 2013, the defendant attended the Vehicle Administration Office of Guangdong Public Security Bureau and obtained a cross-boundary licence dated 20 August 2013. The licence stated, inter alia, that Sun Tak Hing was allowed to cross the border with a car driven by the defendant (“the Licence”). Confrontation between the plaintiff and the defendant 30.One day in October 2013, the plaintiff attended the defendant’s home without prior notice. The defendant was not there, and his wife answered the door. The defendant’s wife subsequently told the defendant that the plaintiff accused him of obtaining Sun Tak Hing fraudulently and dishonestly. 31.It is common ground that the plaintiff and the defendant were complete strangers to each other. 32.After the defendant’s wife informed him of the plaintiff’s visit, he immediately contacted Mr Lo. Mr Lo told him that the plaintiff was one of his clients with whom he had a dispute. The defendant then urged Mr Lo to sort out his problem with the plaintiff. Thereafter, he called the plaintiff and told him that it was Mr Lo who set up Sun Tak Hing for him, and he should approach Mr Lo if he had any grievance against him. 33.In about March 2014, the defendant was asked by the Hong Kong Police to make, and he did duly make, a statement (as witness) in respect of a criminal investigation against Mr Lo. 34.In November 2016, the defendant received a letter from the plaintiff’s solicitors demanding the defendant to, inter alia, surrender the ownership of Sun Tak Hing. 35.On 12 January 2017, the plaintiff commenced the present action. THE PLAINTIFF’S CASE 36.It is pertinent to make some preliminary observations of the plaintiff’s case. 37.In the Statement of Claim dated 12 January 2017, the plaintiff advanced 2 causes of action against the defendant, namely, (1) unlawful means conspiracy and (2) dishonest assistance. 38.The unlawful means conspiracy claim was advanced on the basis that the defendant conspired with Mr Lo as he “filled his particulars and signed on” the December Form, and in doing so “acted dishonestly and in the knowledge that the plaintiff’s signature was and would be forgery (sic)”. (“Version 1”) 39.As will be apparent below, it is relatively plain that the defendant in fact had not signed the December Form at all. Indeed, the plaintiff, sensibly, did not seriously suggest to the defendant during cross-examination that he did sign the December Form. 40.The whole case of the 1st defendant’s alleged dishonesty was premised on the fact that he signed the December Form knowing that the plaintiff’s signature was forged. 41.Thus, it was plain, even before the trial, that the plaintiff’s pleaded case in respect of the unlawful means conspiracy was likely to fail. 42.As to the dishonest assistance claim, the plaintiff essentially adopted the particulars for dishonesty in respect of the unlawful means conspiracy claim. 43.But more importantly, the plaintiff failed to plead any primary breach of trust or fiduciary duty on the part of Mr Lo. 44.It is trite that dishonest assistance is a form of secondary liability in the sense that it only arises where there has been a breach of trust or breach of fiduciary duty. 45.The claim for dishonest assistance is, therefore, a non-starter. 46.The plaintiff seeks the following reliefs in the Statement of Claim:-
47.The relief sought is also problematic. 48.It is not permissible to make any declaration in respect of the “equitable title” of Sun Tak Hing, as Sun Tak Hing is an unincorporated company in the form of a sole proprietorship and does not possess any separate legal personality distinct from its proprietor. Thus, the plaintiff could not assert any “proprietary claim” over Sun Tak Hing (see Tam Ying Man v Leung Ka Chun, HCA 2166/2011, unrep, 31 August 2016 at paragraph 86). 49.In view of this, the plaintiff’s counsel confirmed at the outset that the plaintiff would not pursue this relief. 50.The other 2 declarations were sought in support of the now abandoned declaration. The plaintiff’s counsel also failed to suggest there was any proper reason why it was practicable or equitable to grant these declarations to the plaintiff. 51.In respect of the claim for damages, there is a problem of double recovery, as the plaintiff had already obtained $750,000 pursuant to the judgment of DCCJ 3970/2015. 52.Thus, there was a chance that the plaintiff’s claims would fail In Limine. 53.Having been apprised of these problems while the plaintiff’s counsel was opening his case, the plaintiff belatedly applied to amend the pleadings on the first day of trial, and submitted the draft Amended Reply which added, in gist, the following averments:-
54.The new plea of dishonesty by omission, which was apparently introduced to rescue the unlawful means conspiracy claim, is half-baked. 55.Since the pleading of unlawful means conspiracy in the Statement of Claim is defective (for the reasons stated above), the plaintiff ought to have amended the Statement of Claim, not the Reply. 56.More importantly, as observed by defendant’s counsel, the amendments do not constitute proper pleas of a conspiracy claim. 57.When pleading the tort of conspiracy, the pleader must allege at least one overt act which is the act of all the alleged conspirators or, failing that, a number of overt acts which include at least one act on the part of each conspirator. And the overt act or acts pleaded must be such as follows: (1) that the conspiratorial agreement alleged against the defendants had been entered into by each and every one of them; (2) that the agreement, and not merely the intention of one person alone, was implemented and (3) that such implementation caused the damaged complained of (Aktieselskabet Dansk Skibsfin-ansiering v Wheelock Marden & Co Ltd [1994] 2 HKC 264 at 272B-C). 58.The new plea only alleges that the defendant was dishonest. It does not give any particulars as to the elements of the conspiracy claim. The defendant’s ability to respond to the plaintiff’s serious allegations (whether through cross-examination, submissions or adducing new evidence) was therefore significantly hampered. 59.Be that as it may, on the first day of trial I allowed these amendments to stand on a de bene esse basis. 60.In this judgment, having considered the principles in HKCP 2018, 20/8/11 and 20/8/12, I refuse leave to add these paragraphs in the Reply for the reasons stated above. In any event, as stated below, this new case based on the new averments cannot be made out on the facts. 61.I rejected the addition of the “common mistake” claim outright. It was far too late to seek to introduce a new cause of action on the first day of trial, particularly when the plaintiff ought to have known long time ago (in any event not later than 1 March 2017 when the Defence was filed) that (1) it was both the case of Ms Mok and the defendant that the defendant did not sign the December Form and (2) there was no evidence, and the plaintiff did not propose to adduce any, to rebut this case. The defendant would be prejudiced by the introduction of this belated claim. 62.It is also relevant to note that, ultimately, the case the plaintiff put to the defendant was to the effect that (1) in or about 2012 April, Mr Lo informed the defendant that the plaintiff was terminally ill and was about to die, and suggested that they should seize this chance to take over Sun Tak Hing and (2) the defendant agreed to Mr Lo’s suggestion (“Version 3”). THE DEFENDANT‘S CASE 63.The defendant denied there was any conspiracy between him and Mr Lo, nor did he dishonestly assisted Mr Lo to take away Sun Tak Hing from the plaintiff. 64.According to the defendant, he was, like the plaintiff, just another purchaser who sought Mr Lo’s assistance to obtain a cross-boundary vehicle licence. 65.He did not sign the December Form and had no idea that the plaintiff was removed as a partner of Sun Tak Hing without his consent. 66.He only learnt about the plaintiff’s complaint in October 2013 after the plaintiff went to his home. He then immediately called Mr Lo for an explanation. Ultimately, he accepted Mr Lo’s account, namely, there was a mistake when he made the plaintiff Sun Tak Hing’s partner, and he trusted that Mr Lo would be able to sort this matter out with the plaintiff. 67.Were he found to be liable to the plaintiff, he would, inter alia, seek an indemnity from Mr Lo. THE WITNESSES 68.Both the plaintiff and the defendant gave evidence. There were no other witnesses. 69.Mr Lo was absent and took no part in the trial. The plaintiff’s evidence 70.According to the plaintiff, he did not sign or authorise anyone to sign documents relating to the Licence and the relevant companies on his behalf without his consent. 71.While he personally signed the August Form, he had been kept wholly in the dark when the December Form was signed and filed. He only found out afterwards that Sun Tak Hing had been transferred away from him to the defendant, and that the defendant held (and still holds) the corresponding PRC company (Xing De). 72.The plaintiff said in his evidence-in-chief (and repeated during cross-examination) that he commenced this action against the defendant because he was adamant that he was entitled to the Licence currently held by the defendant (via Sun Tak Hing), which he believed had significantly inflated in value in the past few years. 73.That said, under cross-examination, he admitted that he did not actually know what the relationship between Mr Lo and the defendant was. 74.I do not doubt that the plaintiff was a victim of Mr Lo’s breach of the July 2011 Contract. It was not unreasonable for the plaintiff to feel aggrieved that Mr Lo chose to transfer Sun Tak Hing, which eventually obtained the Licence, to the defendant without his consent. 75.However, I regret to say that the plaintiff’s accusations against the defendant were built entirely on speculation. The plaintiff could not put forward any proper basis in support of his strong belief that the defendant conspired with Mr Lo, whether as (variedly) alleged or at all. 76.The plaintiff’s evidence was tainted by this misguided view, which unfortunately rendered his evidence generally unreliable. I, therefore, consider his evidence with caution. 77.In particular, I reject the plaintiff’s claim that he had personally signed the August Form. 78.It is understandable that the plaintiff would like to assert that he had done so, as otherwise he would be in the same situation as the defendant and there would be no basis whatsoever to claim that he once “owned” Sun Tak Hing. 79.However, he did accept, of all the documentation required to obtain the cross-boundary vehicle licence, the August Form was the only form he purportedly signed for this purpose. 80.Specifically, the plaintiff accepted that he did not sign any documents concerning the Mainland company, and did not care which Mainland company Mr Lo would ultimately allocate to him. 81.His assertion that he was concerned about the identity of the Hong Kong company (Sun Tak Hing) but not that of the Mainland company is not believable. 82.Further, the plaintiff never told the police that he signed the August Form. This was an odd omission because in his statement to the police, he purported to set out the events from July 2011 to August 2013 in considerable detail, including that (1) Ms Mok collected the second instalment from him on 16 August 2011 and (2) Ms Mok gave her the business registration certificate of Sun Tak Hing on 2011 September 2011. It was not mentioned at any point in time that he had the chance to sign the December Form. 83.Yet further, Ms Mok told the police that she signed both of the August Form and the December Form. As acknowledged by plaintiff’s counsel, Ms Mok had no motive to lie on this matter. She had no reason to unnecessarily incriminate herself by lying to the police that she had in fact forged the signature of one extra document.[3] 84.All in all, it was inherently improbable that the plaintiff signed the December Form. 85.For completeness, the plaintiff applied to adduce evidence to show that he had alleged injected funds, namely, RMB 3,500,000 into Xing De. I rejected P’s application. It was the first time that the plaintiff ever raised this issue, and it was far too late to do so.[4] The defendant’s evidence 86.I find the defendant to be honest and reliable. His evidence is internally consistent, and remained unshaken during cross-examination. 87.The factual basis of the defendant’s case was borne out by the defendant’s oral evidence as well as the contemporaneous documents. 88.The plaintiff’s counsel raised various issues during cross-examination to challenge Mr Lo’s credibility. I only deal with the major challenges below. 89.First, he put to the defendant that in his police statement, he stated that he found Mr Lo not only for procuring the Licence but also for setting up the Mainland company for conducting his own businesses in the Mainland. 90.I accept Mr Lo’s evidence that these 2 matters are in fact related. As stated above, setting up a Mainland company is a pre-requisite for obtaining a cross-boundary vehicle licence. Thereafter, the defendant would also like to make use of the Mainland company to conduct business in Mainland. There is nothing wrong or illogical about this account. In any event, this alleged “inconsistency” is immaterial. 91.Secondly, the plaintiff counsel suggested that it was improbable for the defendant to have given Mr Lo (who was hitherto a total stranger to him) the general authority to handle all the matters in respect of the procurement of the Licence, and it was unreasonable for him not to inquire about the specifics steps to be taken, including the exact documents to be signed (if necessary), and the exact Hong Kong or Mainland companies that he would ultimately be allocated. Thus, the defendant’s case that he did not know that Mr Lo forged the plaintiff’s signature and transferred Sun Tak Hing to him without the plaintiff’s consent was not believable. 92.The defendant said that he knew there were others who successfully obtained cross-boundary vehicle licences through Mr Lo, and there was no reason not to trust him. He, therefore, authorised Mr Lo to handle all necessary matters for him, and only asked about Mr Lo’s progress from time to time. 93.Again, this account is inherently probable. On any view, the plaintiff authorised Mr Lo to act in a very similar or, according to my findings, basically the same, manner. 94.Thirdly, plaintiff’s counsel suggested that the defendant ought to have reported to the police or the relevant authorities after the plaintiff told him about the forgery in October 2013. 95.I do not understand why the defendant ought to have accepted the plaintiff’s assertion. The defendant did call Mr Lo immediately for an explanation, and I accept that the defendant did honestly believe Mr Lo’s account that there was a misunderstanding in relation to this matter. 96.Indeed, it was reasonable for the defendant to have formed a view that there was a genuine mistake: on the face of the corporate documents, Xing De’s shareholder was indeed Sun Tak Hing, and the defendant was appointed as Xing De’s legal representative on 1 August 2011, even before the plaintiff became a partner of Sun Tak Hing (on 15 August 2011).[5] 97.Since the plaintiff and the defendant did not know each other and had never met (until trial), this is not a case where they gave divergent accounts of the same events. But insofar as necessary, I prefer the evidence of the defendant over that of the plaintiff. ANALYSIS The issues 98.Given the nebulous nature of the plaintiff’s case, it is not easy to outline the issues in dispute. 99.Doing my best, I believe the following are the relevant issues:-
(1) Whether the defendant conspired with Mr Lo to injure the plaintiff by unlawful means 100.On a claim of conspiracy by unlawful means, the plaintiff must prove:-
101.It is plain from the above that I find that there was no conspiracy between the defendant and Mr Lo as alleged or at all, howsoever the alleged conspiracy was formulated by the plaintiff. The plaintiff’s conspiracy claim failed In Limine. 102.In any event, none of the 3 versions of alleged conspiracy can possibly be made out on the facts. 103.In respect of Version 1 of the conspiracy (paragraph 38 above), as stated above, it is bound to fail as it is plain that the defendant did not sign the December Form. 104.As regards Version 2 (paragraph 53 above), as stated above, the newly pleaded case sheds no light on the 5 elements outlined in De Krassel. 105.In any event, I find that there was no agreement between the defendant and Mr Lo to carry out any unlawful act. As stated above, I believe the defendant did not know that Mr Lo forged the plaintiff’s signature and removed him as Sun Tak Hing’s partner without his consent. 106.I also find that the defendant did not “turn a blind eye” (cf paragraphs 51 to 58, De Krassel). As stated above, the defendant did cause an inquiry to Mr Lo, and it was reasonable for him to believe that there was a genuine mistake. 107.As to Version 3 (paragraph 62 above), the suggestion that the conversation between the defendant and Mr Lo allegedly took place was, put it mildly, a very bold one when there is not a shed of evidence which substantiates this. Nor is there any evidence showing that the defendant knew about the plaintiff’s illness. 108.For completeness, the plaintiff also suggested that this court can infer that there was a conspiracy as otherwise the defendant would not have agreed to increase the consideration from RMB420,000 to RMB520,000. I cannot see how such an inference could be drawn. 109.By reason of the aforesaid, the plaintiff’s unlawful conspiracy claim fails. (2) Whether the plaintiff’s claim for dishonest assistance can be made out; 110.The plaintiff did not attempt to salvage this claim by amending the pleadings or advancing any viable arguments in support of this claim in the Closing. This claim, therefore, fails for the reasons stated above. 111.I also find that the defendant was not dishonest and was not assisting Mr Lo in defrauding the plaintiff or breaching the July 2011 Contract. (3) Whether the plaintiff is entitled to claim damages 112.Even if I am wrong in respect of issues (1) and (2), the plaintiff is still not entitled to claim any damages for one or more of the following reasons. 113.In the Statement of Claim, the damages sought was RMB384,000, being the loss the plaintiff suffered as he had to rent another cross-boundary vehicle licence (“the Replacement Licence”) at RMB8,000 per month for 48 months from February 2012 to January 2016. 114.The plaintiff only provided receipts of around 25 months, totalling $200,000.[6] 115.Further, as stated on the Replacement Licence, the plaintiff was merely a “secondary” driver of the vehicle with the Replacement Licence. The plaintiff accepted under cross-examination that he was not the only one who made use of the vehicle. 116.It is also to be noted that the RMB8,000 per month was for the renting of a luxury limousine (a Bentley). I agree with the Learned Judge in DCCJ 3970/2015 that this does not equal to “renting” a replacement license, and the damages claimed should be rejected on this basis alone. 117.The plaintiff failed to offer any clues as to how the RMB8,000 should be apportioned or discounted in view of the above matters. 118.Be that as it may, as stated above, the plaintiff had already obtained $750,000 pursuant to the judgment of DCCJ 3970/2015. 119.The plaintiff’s counsel accepted that the plaintiff will set off the said sum against any amount awarded to the plaintiff. 120.On any view, the damages the plaintiff may be entitled will be less than even half of the $750,000. 121.As such, the plaintiff is barred from claiming the alleged loss from the defendant as this will amount to double recovery. 122.Again, to salvage the claim, the plaintiff sought to argue that the alleged loss suffered by the plaintiff should include the value (or appreciation) of the Licence, which is now worth $1.3 million. 123.But the plaintiff has not provided the court with any proper evidence for the value of the Licence. The only “evidence” in support of this claim is a line in the plaintiff’s witness statement which reads, “In the sense of substantiate (sic) my loss and give a general figure to the court, a Hong Kong-PRC cross border licence is now at about HK$1.3 million”. It is plain from the wording that this figure was imprecise. Not even the source of this “general figure” was stated. This cannot amount to any credible evidence upon which this court can rely. (4) Whether this court should grant the declarations sought 124.Irrespective of the fact that the plaintiff abandoned the claim for the “equitable title” of Sun Tak Hing, plaintiff’s counsel urged the court to grant a declaratory judgment essentially to declare the December Form to be null and void. 125.Order 15 rule 16 of the Rules of the District Court provides:-
126.This rule is not confined to cases where the plaintiff has a cause of action. Its effect is to give a general power to make a declaration, whether there is a cause of action or not, at the instance of a party interested in the subject matter of the declaration. 127.The power to make declarations is confined to justiciable matters, ie declarations as to legal or equitable rights (and not moral, social or political matters). 128.The declaratory relief must be something which it would not be unlawful or unconstitutional or inequitable for the court to grant or contrary to the accepted principles upon which the court exercises its discretion (Halsbury’s Law of Hong Kong at paragraph 90.2205). 129.Ultimately, the court will consider whether any useful purpose will be served by granting declaratory relief. In 曾婉玲 v 兆隆苑業主立案法團, HHJ Lam (as he then was) cited the principle summarised in Zamir & Woolf, The Declaratory Judgment, 2nd ed para 4.087 as follows[7]:-
130.The declaratory relief (including the declaration for the “equitable title” of Sun Tak Hing) was plainly sought with a view to obtaining the Licence. 131.For the following reasons, I decline to make the declarations sought. 132.First, as explained above, there is no separate legal identity between Sun Tak Hing and the defendant (Tam Ying Man (supra)). The unincorporated company and the sole proprietor are legally one and the same, and assets owned by the former are in fact owned by the latter. The Licence was, therefore, in truth, granted to the defendant. 133.Following the principles in Tam Ying Man, declaring the December Form null and void will not have the effect of re-vesting the Licence to the plaintiff. 134.Looking at this matter from another perspective, one can say that the December Form does not have a “proprietary base” (unlike, for example, a document of title or a mortgage deed), and declaring it null and void will not have the legal effect of re-vesting title. 135.Secondly, the Licence was granted to Sun Tak Hing after the plaintiff ceased to be its partner. The plaintiff therefore never had proprietary interests of any sort over the Licence. On the other hand, defendant was a bona fide purchaser for value. 136.Lastly, as stated above, I find that the plaintiff also did not sign the August Form. Following the plaintiff’s logic, the August Form should also be declared null and void. The Licence, therefore, will not be “re-vested” to him even under a hypothetical basis. 137.For these reasons, I am of the view that the declarations sought would not serve any practical purpose and it would be inequitable if the declarations are granted. (5) If the plaintiff succeeds in his claims against the defendant, whether the defendant is entitled to, inter alia, seek indemnity from Mr Lo 138.In the light of my conclusion above, it is unnecessary to resolve this issue. CONCLUSION 139.For the above reasons, I dismiss the plaintiff’s claims against the defendant and decline to grant any of the relief sought. 140.I make an order nisi that the plaintiff do pay the defendant the costs of the action (including the costs for the third-party proceedings between the defendant and Mr Lo) to be taxed if not agreed, with certificate for one counsel.
Mr Devin Sio, instructed by Wai & Co, Solicitors, for the plaintiff Ms Casarinna Man, instructed by Sun Lawyers LLP, for the defendant The third party, being unrepresented, absent [1] “4A. Alternatively, the defendant would have obtained knowledge of the forgery (sic) signature and the unlawful act done by Mr Lo Ming San by October 2013 when the plaintiff visit (sic) the defendant’s premises. Thereafter the defendant discussed the matter with Mr Lo. In the circumstance, the defendant shall:-
4B. The defendant therefore acted dishonestly and in the knowledge that the plaintiff’s signature was forgery (sic), continue to make false representation to the Commissioner to the Inland Revenue that:-
[2] “6A. Alternatively, the IRBR64 Form shall be declared null and void for the (sic) on the grounds of common mistake for the fact that neither the plaintiff nor the defendant signed on the Form.” [3] I am fully aware of the fact that Ms Mok’s evidence is hearsay. [4] When the plaintiff gave evidence, he actually admitted that Mr Lo might have used the same funds to inject into (and then duly pull out from) various Mainland companies, and he had been refunded the RMB3,500,000. This matter is therefore of limited relevance. [5] In the present case, it is not relevant to consider whether Mr Lo had indeed made a mistake or whether the transfer was deliberate and wrongful. The relevant question is simply whether the defendant genuinely believed Mr Lo’s explanation. [6] The plaintiff stated that he was in possession of all the receipts and did submit all of them in DCCJ 3970/2015. But this does not assist him as (1) the judgment of DCCJ 3970/2015 does not bind the defendant (who was not a party to that action) and (2) the learned Judge in that case rejected the plaintiff’s claim for the rental expenses. [7] LDBM199/2001, HH Judge Lam (as he then was) (unreported, 18 September 2001) para 22 [8] See Yau Ling Chee by her next friend Chan Wai Ping Karina v Chan FaiHCMP 2737/2016, 31 May 2017 at paragraphs 37 to 39. | ||||||||||||||||||||||
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