Leung Yiu Kin v. Leung San

CACV000032/1980

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Coram: Cons, J.A., Yang and Bewley J.J.

Date of Judgment: 4 June 1980

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JUDGMENT

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Bewley, J. :

1. In this action the respondent's claim against the appellant was for $7,500, being money due and owing by the appellant to the respondent for service travelling expenses from the 1st March, 1979 to the 31st August, 1979, at $1,250 a month, under a Chinese agreement, made between the appellant and the respondent, dated the 6th February, 1978.

2. The defence denied the claim and stated that, from the 1st January, 1978, to the 28th February, 1979, the appellant paid the respondent the sum of $17,500, being travelling expenses at $1,250 a month, but that, from the 1st of March to the 31st of August, 1979, the respondent did not perform any service for the appellant and the respondent was not entitled to any travelling expenses at all.

3. The appellant, in the name of Ying Fung Construction Company, contracted to build and decorate a temple in Fanling at a place called Fung Yin Sin Koon. There is documentary evidence that he entered into a partnership with three other persons, including the respondent. I refer to the Chinese agreement upon which the respondent relies, signed by all four parties on the 6th February, 1978, in which their respective rights and responsibilities are set out (Exhibit P1).

4. The respondent's particular responsibilities were design, decoration and general supervision of work. The appellant's obligations included all matters relating to capital. No reference to a monetary contribution by any of the other three parties was made in the agreement. It was, however, stated that each man was to get a fixed percentage of the net profit. The appellant's share was to be 45%, the respondent was to get 25%, and the other two 15% each. It was also provided that each party was to receive "travelling expenses": the appellant $3,500, and the respondent $1,250 a month. But the agreement was silent as to who was to be responsible for paying these sums. This is the basis of the respondent's claim.

5. Yet, in further and better particulars of his claim, supplied in November at the appellant's request (Exhibit D3), the respondent alleges that he was the appellant's employee, not his partner. He says that the February agreement was a service contract, in which the expression "Travelling Expenses" was used synonymously with salary. The respondent admits that he received from the appellant $17,500, representing 14 months salary from the 1st January, 1978, to the 28th February, 1979. There is in evidence an undated receipt issued by Ying Fung Construction Company, which indicates that the respondent received this sum (Exhibit D1).

6. The respondent said in evidence, and called witnesses to that effect, that he supervised the decoration work from March to August, 1979 and, indeed, right up until shortly before the trial, but he had received nothing further from the appellant.

7. The respondent also put in evidence a letter dated the 15th August, 1978, addressed to the appellant from the three signatories to the agreement (Exhibit P2). It expresses dissatisfaction at the appellant's performance and attitude and convenes a meeting to discuss, inter alia, the rights and interests of "the partners".

8. The appellant gave evidence and confirmed that Exhibit P1 was a partnership agreement. The other three partners had, in breach of an oral agreement, failed to contribute capital. The appellant had, consequently, repudiated the partnership agreement and himself taken over the project. The appellant alleged that the respondent had never done any work on the site.

9. He had paid the respondent $17,500, not for services rendered under the agreement, but as a reward for putting the business in his way. It had been agreed that the project should be completed within 14 months. This was why he had chosen the figure of $17,500: it represented 14 months travelling expenses under the agreement, which, of course, he had repudiated.

10. The appellant was asked by his own counsel who was supposed to pay his travelling expenses under the agreement? He replied, obliquely, that, provided the partners contributed capital, they would share the profit according to the stipulated percentages.

11. The learned trial judge acknowledged that the 1978 agreement in itself gave the respondent no right of action against the appellant in respect of the so-called "Travelling Expenses". He attached weight, however, to the implied admission in the defence that, during the relevant period, provided the respondent performed certain unspecified services, the appellant was bound to pay him $1,250 a month.

12. The learned judge accepted the evidence of the respondent and his witnesses concerning the work that the respondent said he had done at the site. He rejected the appellant's evidence that the respondent had never done any work. He concluded that, having regard to the pleadings and to the admission in the defence, the respondent was entitled to judgment as claimed.

13. No application to amend either the statement of claim or the defence was made. The respondent, of course, was acting in person. The learned judge was not prepared to relax the strict rules of pleading to enable him to take into account the appellant's evidence, that he had repudiated the agreement, was not contractually bound to the respondent and had paid him $17,500 ex gratia.

14. Since he allowed the appellant to give evidence on these lines, and failed to warn him, or counsel, that he was contradicting his pleading, we do not think he was right to disregard this evidence. We think the learned judge should have either framed the issues himself under Rule 25 of the District Court Rules, or ordered that the pleadings be amended.

15. One of the issues that should have been resolved in this case is the question of the repudiation of the partnership agreement. This affects the interests of all four partners and we think, therefore, that the other two partners should be joined as parties.

16. We order that the case be sent back for re-trial before another judge. If the parties remain unrepresented, it may be necessary for the trial judge to frame the issues, bearing in mind that the respondent appears to be relying upon a partnership agreement and has, in effect, asked for an account to be taken.

Representation:

Appellant in person

Respondent in person