Wealth Lee Finance Ltd v. Ng Fun Lung and Another

DCCJ 2060/2013

[2019] HKDC 511

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2060 OF 2013

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DECISION

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Application

1.On 19 February 2019, I handed down a judgment (the “Judgment”) in this action, dismissing the plaintiff’s claim for recovery of a loan against the 2^nd defendant.

2.This is the plaintiff’s application for leave to appeal against the Judgment.  The defined terms herein refer to the defined terms in the Judgment.

3.The legal principles governing the threshold for granting leave to appeal are not in dispute.  The applicant needs to show that the appeal has a “reasonable prospect of success” or there is some other reason in the interests of justice why the appeal should be heard: section 63A(2) of the District Court Ordinance (Cap 336).  A “reasonable prospect” means an appeal with prospects that are more than “fanciful”, without having to be “probable”.  SMSE v KL [2009] 4 HKLRD 125.

4.The plaintiff relies on the “reasonable prospect of success” limb in the present application for leave to appeal.

5.One of the issues contended by the plaintiff at trial was that the Loan was deployed by the Son to discharge the Wing Wui loan and as such the Mother was said to have benefitted from the Loan.  The plaintiff says that the Court erred in law in rejecting the contention that the Mother was unjustly enriched by the Loan by virtue of its being utilized to settle the Wing Wui loan.

6.In particular, the plaintiff criticized the Court’s observation in paragraph 9 and paragraph 80 that there were other loans taken out by the Son with various financial institutions. The criticism is that there was no evidence for the Court to make such observation or that the Son could have obtained funding from other financial institutions to pay off the Wing Wui loan.

7.With respect, that is ignoring the fundamental fact that burden of proof lies with the plaintiff in establishing its case.  If the plaintiff wishes to rely on unjust enrichment, the burden lies on it to prove on a balance of probabilities that there was a causal link between the Loan and the repayment of the Wing Wui loan.

8.The indisputable facts are:-

(a)   the Loan was drawn down on 31 August 2012;

(b)   the Son was given 2 cheques in his sole name on 31 August 2012;

(c)   the Son presented the 2 cheques for payment, which were cashed over the counter on 31 August 2012;

(d)   the mortgage was discharged 4 weeks later, on 29 September 2012.

9.The plaintiff cannot dispute that there was no objective evidence to show that the Loan had been utilized by the Son to discharge the Wing Wui loan.  The only evidence the plaintiff could rely on was evidence from Mr Pang, whom the Court had held to be an unreliable witness.

10.The plaintiff says a reasonable inference can be drawn as a logical consequence of the facts.  I do not agree.  The Son could have utilized the cash he obtained from the Loan in a multitude of ways.  With 4 weeks in between the Son obtaining cash over-the-counter and the discharge of mortgage, and there being no evidence on when Wing Wui received money to discharge the mortgage, there is simply no basis for the Court to infer that the Loan was used by the Son to discharge the Wing Wui loan.

11.As such, whether the Son had other funding at the time the Loan was drawn down is a red herring. Even if there had been no other loans in existence at the time, the fact of the matter is there was no evidence to support a causal link between the Loan and the discharge of the Wing Wui loan.  In other words, it does not follow that if there were no other loans taken out by the Son, the Loan must have been used to discharge the Wing Wui loan.

12.I am of the view that with no evidence of a causal link between the Loan and the discharge of the Wing Wui loan, the unjust enrichment argument cannot succeed.

Conclusion

13.As such I am of the view that this ground of appeal has no reasonable prospect of success and I dismiss the plaintiff’s application seeking leave to appeal accordingly.  I also order that the 2^nd defendant do have costs of the application, with certificate for counsel.  The 2^nd defendant’s own costs to be taxed in accordance with the Legal Aid Regulations.

14.As to the application for clarifications on paragraph 9 of the Judgment, paragraph 9 was simply to point out that as a matter of background, the Son had taken out other loans in the past and the Loan was not the first loan ever taken out.  In any case, such information can be seen from land searches and other documents put forward by both sides as evidence.  As such, it is unnecessary to clarify what were the other loans taken out by the Son, and in any event, they do not impact on the merits of the application for leave to appeal or the appeal.

Mr Jeremy Cheung M F, instructed by Louis K Y Pau & Co, for the plaintiff

Mr Alfred C P Cheng, instructed by Sit, Fung, Kwong & Shum, assigned by the Director of Legal Aid, for the 2^nd defendant