周瑛偉 v. 李錦棠

DCCJ 406/2021

[2025] HKDC 952

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 406 OF 2021

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JUDGMENT

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A. Introduction

1.Although the pleadings, witness statements, and other documents are all prepared in Chinese, I hand down this Judgment in English, since this action has been case managed in English, and parties opted to conduct the trial in English as well.

2.The plaintiff seeks to recover HK$500,000.00 from the defendant, on the basis of a settlement agreement they allegedly entered into on 17 October 2020 (“the Settlement Agreement”).  He says that the Settlement Agreement was embodied in, or otherwise evidenced by, a written note signed by the parties on the same day. 

3.The defendant denies that he has to repay the plaintiff.  He claims that he was forced to enter into the Settlement Agreement by the plaintiff’s duress.  Further, the Settlement Agreement could have no effect because it was not supported by consideration.

B.     Background and the factual disputes

4.The dispute stems from the renovation of Greenland Garden, a private housing estate in Tuen Mun.  Chuen Wooi Engineering Ltd (“Chuen Wooi”) was the 1^st tier subcontractor of the renovation project with respect to the cement works, the painting works, and the pipe repair works.  The project commenced in around August 2012.

5.Both the plaintiff and the defendant worked in the field of construction and renovation.  The defendant was the sole shareholder and director of Way Shing Engineering Co Ltd (“Way Shing”).  Prior to the Greenland Garden project, the plaintiff and the defendant already knew each other; they were introduced to each other through a construction worker/contractor called Kong Chen Man (“Kong”)[1].

6.The Amended Statement of Claim avers that:-

6.1     Chuen Wooi subcontracted all its works in the renovation project to Way Shing as the 2^nd tier subcontractor.

6.2     Way Shing further subcontracted the cement works to the plaintiff at HK$1.9 million.  The plaintiff in turn subcontracted the same works to its workers at HK$1.32 million.

6.3     Some time later, the defendant requested the plaintiff to subcontract the same works back to him at the same price (i.e. HK$1.32 million), to which the plaintiff reluctantly[2] agreed.  Therefore, the defendant became liable to pay the plaintiff HK$580,000.00 as the latter’s profits arising from the cement works.  This was subsequently reduced to HK$520,000.00.

6.4     Dispute then ensued between the parties. On 17 October 2020, the plaintiff and the defendant entered into the Settlement Agreement.  The defendant agreed to pay HK$500,000.00 in satisfaction of the dispute arising out of the project[3], payable in 2 equal tranches by 17 October 2020 and 31 December 2020 respectively.  However, the defendant never paid the plaintiff.

7.Mr Fergus Chan, counsel for the plaintiff, confirms that the plaintiff’s claim is restricted to the Settlement Agreement.  There is no claim for any outstanding payment arising out of the Greenland Garden project.

8.The Amended Defence avers as follows:-

8.1     Originally, Way Shing was the 2^nd tier subcontractor for the painting works only.  The plaintiff was the 2^nd tier subcontractor for the cement works; the pipe repair works were subcontracted to another person nicknamed Pipe Ming (“Ming”)[4].

8.2     However, out of convenience, Chuen Wooi only entered into a single written agreement with Way Shing for all the works (“the Old Contract”).

8.3     As a matter of the sequence of the works, Way Shing and Ming could only commence their parts after the plaintiff finished the cement works.

8.4     But since the end of August 2012, the cement works slowed down because the plaintiff could not find sufficient workers.  Hence, Chuen Wooi withdrew the works from the plaintiff, and in turn engaged Way Shing as the new 2^nd tier subcontractor for the cement works.  The Old Contract was superseded by another written agreement between Chuen Wooi and Way Shing (“the New Contract”).  Therefore, it is averred, that Way Shing was never the plaintiff’s upper level or lower level subcontractor.

8.5     The Greenland Garden project was complete by the end of 2013.  Between the end of August 2012 and September 2020, the defendant did not have contact with the plaintiff.

8.6     Some time in September 2020, the defendant received 2 anonymous calls.  He was threatened to settle the dispute with the plaintiff; or else he would be searched at his office and home.

8.7     As a result, a dinner was arranged on 17 October 2020 with the plaintiff and Kong in a restaurant in Mongkok.  On that day, the plaintiff brought along a stranger, which was introduced by the plaintiff as Mr Lee[5] and his business partner.

8.8     Mr Lee told the defendant that he was the person making the anonymous calls.  He threatened the defendant to pay the plaintiff HK$520,000.00 as compensation for the Greenland Garden project; or else Mr Lee would go to the defendant’s office and home to give him troubles, and would even give troubles to his family members[6].

8.9     It is alleged that 2 strangers then appeared behind Mr Lee; one of them had tattoos and was holding something like a long stick.  These 2 strangers asked Mr Lee whether he needed help.  Mr Lee asked them to go downstairs to keep surveillance.

8.10     Mr Lee is said to have added that, if the defendant did not agree to pay HK$520,000.00, he would go after the defendant for 10% of the contract price.

8.11     Despite mediation by Kong, the plaintiff insisted the defendant to pay at least HK$500,000.00.  Under duress, the defendant orally agreed to pay the defendant HK$500,000.00.  The plaintiff then requested the defendant to write out the written note to evidence the Settlement Agreement.

9.In the Reply, the plaintiff avers that he and the defendant came to the Settlement Agreement after negotiation over the dinner on 17 October 2020.  Mr Lee saw his friends at the next table, and went over to have a chat.  There were never strangers approaching the table the 4 of them[7] sat.

C.     Analysis

10.Given the summary on the parties’ respective factual cases above, the Settlement Agreement no doubt existed.  In coming to a ruling on the enforceability of the Settlement Agreement, this court needs to first consider whether there was a genuine dispute as to the plaintiff’s entitlement of HK$520,000.00 in relation to the Greenland Garden project.  If there was in fact never such a dispute, then the defendant’s promise, under the Settlement Agreement, to pay the plaintiff was simply gratuitous irrespective of any duress allegedly exerted by the plaintiff on the defendant.

11.After considering the evidence, it is my judgment that the plaintiff fails to show that there was a genuine dispute, prior to the existence of the Settlement Agreement, on whether the defendant ought to pay him HK$520,000.00.

12.The plaintiff’s evidence under cross examination is drastically different from his pleaded case, or what he sets out in his 2 witness statements.

13.First, under cross examination, the plaintiff claims that Chuen Wooi orally subcontracted all the works to him.  He was the person who negotiated with Chuen Wooi, and he decided to bring in the defendant as the subcontractor for the painting works, and Ming as the subcontractor for the pipe repair works.  But when he was about to sign the contract with Chuen Wooi, Chuen Wooi preferred to contract with a limited company.  Since the defendant owned Way Shing but he did not own any limited company, Way Shing became the counter-party to Chuen Wooi.  This is different from the pleaded case by which it is claimed that the plaintiff was the 3^rd tier subcontractor, having subcontracted the cement works from Way Shing.

14.Secondly, the plaintiff claims under cross examination that, 1 week after his workers commenced preliminary works at Greenland Garden, the defendant asked him the time by which his workers for the cement works would arrive.  When the plaintiff told the defendant they would only arrive later, the defendant said he had workers ready, and asked the plaintiff to give him the cement works for better management.  The plaintiff says he was fine with the idea, but told the defendant he had already further subcontracted the cement works to his workers for HK$1.32 million[8]. The defendant agreed to the price, and said he would bring in workers for the cement works.  Again, this is different from his pleaded case that he only reluctantly obliged to subcontract the cement works to the defendant.

15.The plaintiff accepts that his oral evidence differs from his pleaded case.  However, no explanation is offered (either during the cross examination, or by way of re-examination) to account for the differences.  In my judgment, the plaintiff’s evidence cannot be safely relied upon to show that, prior to the Settlement Agreement, the defendant indeed owed him HK$520,000.00.

16.In addition, I find the plaintiff’s evidence on the Settlement Agreement incredible, and cannot be relied upon.

17.Firstly, there is no evidence which may shed light on the plaintiff’s sudden action to recover HK$520,000.00 from the defendant, after 7 years of hiatus.  In seeking to recover a debt, one would have been expected to be the keenest at the beginning, as the debtor could easily be located; memories were fresh; and evidence more readily available.  But the plaintiff seems to have adopted a laissez-faire attitude since he withdrew from the Greenland Garden project.  I am not told why the plaintiff should be viewed differently as any other reasonable creditor dealing at arms’ length.  I find the circumstances (or more precisely, the radar silence over the years) leading to the dinner on 17 October 2020 suspicious.

18.Secondly, the plaintiff sets out his version of the conversation that took place over the dinner on 17 October 2020 in §11 of the Reply.  He allegedly said that the defendant had been avoiding him, so he left it till then to chase the defendant up.  After they came to an agreement, Mr Lee suggested it would be better to have a note as proof.  He thought that was not necessary; but the defendant then volunteered to write out the written note.

19.I find the plaintiff’s case unrealistic, and incapable of belief.  If it were true that the defendant intentionally avoided the plaintiff over the years because of the HK$520,000.00, he seemed rather pleasant over the dinner to yield to the plaintiff’s request without much demur.  It was also plainly inconsistent with the defendant’s past behaviour to offer the plaintiff the written note to foolproof the latter’s claim.  I hear no evidence from either the plaintiff or the defendant which may show the defendant was indeed the returning prodigal son.  I refuse to accept the plaintiff’s case as the truth.  

20.It is my further judgment that the defendant’s evidence on the Old Contract and the New Contract is credible and reliable.

21.I do not see the defendant’s explanation implausible as to how the Old Contract and the New Contract came about.  Even under the plaintiff’s case, the only written contract Chuen Wooi and Way Shing entered into (effectively, the Old Contract) also did not reflect the true subcontracting relationship of the parties.

22.I do not find the defendant’s evidence shaken under cross examination.  Mr Lee Chi Keung, one of Chuen Wooi’s directors, also gives evidence in support of the defence, and his evidence is similarly unshaken.  I reject Mr Chan’s submissions that their evidence is incredible; with respect, his cross examination has not done much more than giving these witnesses another chance to recount their evidence, without any attempt to expose any contradiction or inherent improbability.

23.I would like to highlight one matter as an example.  On 19 October 2020, the defendant sent a few WhatsApp messages to the plaintiff: first, a smiling emoji; then he asked whether he got the plaintiff’s bank account correct.  The plaintiff replied and said it was correct.  The defendant then did not respond to the plaintiff’s further message asking him how the situation was.  In the trial bundles[9], one can see that the next message was by the defendant on 21 December 2020, sending over something like a photo.  However, only half of the photo was included in the screen capture of the WhatsApp messages; it was also reproduced in black and white such that one cannot make anything out of that.

24.The defendant explains under cross examination that he pressed the smiling emoji by mistake.  Although he did intend to repay the defendant when he asked the plaintiff to confirm the bank account number (because he was still allegedly laboured under the plaintiff’s duress), when he then sought to borrow money from his bosses, he was advised by them not to pay the plaintiff.  That was why he later made a report to the police after the threats and intimidation he received.

25.Mr Chan does not follow up on the defendant’s answers with any further cross examination.  I cannot agree with Mr Chan that the court can reject the defendant’s evidence outright.  Without at least some attempt to sketch out the circumstances, the court is not enabled to assess the reasonableness of the defendant’s answers.    

26.Taking all of the above evidence into consideration, I am not satisfied that the plaintiff and the defendant entered into the Settlement Agreement to resolve their dispute over the Greenland Garden project.  The plaintiff fails to satisfy me, on a balance of probabilities, that the defendant’s promise to repay him was more than gratuitous.

27.The above is sufficient to dismiss the plaintiff’s claim.  But in case I am held wrong in the findings above, I shall continue to state my views on the remainder of the defence.

28.On the assumption that the defendant indeed owed the plaintiff HK$520,000.00 prior to the creation of the Settlement Agreement, and setting aside the defence of duress for the time being, Ms Cheung submits that the Settlement Agreement still lacks consideration, as it simply involves part payment of a debt.  She suggests this is amply supported by Chitty on Contracts.

29.With respect, Ms Cheung’s submissions are plainly wrong.  By entering into the Settlement Agreement, the plaintiff must be taken to have at least impliedly promised to forebear to sue the defendant to recover HK$520,000.00.  Alternatively, the plaintiff as the creditor obtained the additional benefit of a definite repayment schedule. Either way, the Settlement Agreement was well supported by consideration.

30.As to the defence based on duress, Ms Cheung clarifies that the defendant only relies on duress to the person rather than economic duress, despite the defendant’s reference in his evidence about his financial situation at the time the Settlement Agreement was entered into.  Such clarification must be correct, as there is no evidence showing that the plaintiff had any knowledge about the defendant’s financial situation.

31.Having considered all relevant evidence, I am not satisfied on a balance of probability that the defendant entered into the Settlement Agreement because of the duress exerted by the plaintiff (through the action and words of Mr Lee and other strangers over the phone and at the restaurant on 17 October 2020).  I do not accept as facts that the alleged intimidation over the phone and over the dinner took place.

31.1     The intimidation allegedly done or spoken by Mr Lee and/or the strangers is a serious allegation.  It is trite that the cogency of the evidence required to prove such intimidation should be higher than other normal factual allegations.

31.2     Ms Cheung has not cross examined the plaintiff on the dinner that took place on 17 October 2020.  Her cross examination of Mr Lee Sau Fung does not much more than asking Mr Lee to repeat his evidence regarding what transpired over the dinner.  She also does not explore further in response to Mr Lee Sau Fung’s admission that he did call up the defendant at the plaintiff’s direction to request the defendant to meet with the plaintiff for discussion.  In my judgment, the defendant has not shown that Mr Lee Sau Fung’s denial of any intimidating conduct over the dinner as incredible.

31.3     I also find the defendant’s evidence far from satisfactory.  It is perhaps not surprising and incredible that the alleged intimidation is not corroborated by contemporaneous documents.  But I find it concerning that the defendant does not choose to put in other documentary evidence in an attempt to bolster his case.  For example, the record of his report the police or the statement he gave are nowhere to be found in the trial bundles; proof of evidence is not obtained from his bosses to whom he allegedly disclosed the plaintiff’s intimidation.  There is a general lack of circumstantial evidence, which may otherwise allow this court to properly assess the plausibility of the defendant’s own evidence. 

31.4     Regarding the events that happened during the dinner, the defendant accepts that the long stick allegedly held by one of the strangers was covered in cloth, so he could not be certain what exactly it was; his line of sight was also blocked by the table, so that he did not actually see what it actually looked like below the table.  I do not believe he genuinely felt intimidated at the dinner.

32.It is not for this court to speculate as to the true reason(s) why the defendant wrote out the written note on 17 October 2020.  Based on the limited evidence presented to this court on the dealings between the plaintiff and the defendant, and how they have framed their respective cases, I am not satisfied that either of their cases represented the truth.

D.     Conclusion

33.I dismiss the plaintiff’s claim.

34.In my judgment, it is fair to make no order as to costs.  Despite his overall success, the defendant fails to prove his defence on duress, and his submissions on the lack of consideration for the Settlement Agreement are plainly wrong.  These matters did take up a significant portion of the trial, both as a matter of evidence and submissions.  His evidence has also left much doubt as to what might indeed be the truth.  He should be asked to shoulder the costs with the plaintiff jointly.  This costs order is nisi, which shall become absolute unless there is any application to vary it within 14 days of this Judgment.

35.Finally, the preparation and reproduction of the trial bundles must be deplored.  Despite the modest volume of the trial bundles, parties still manage to include the blank forms served together with the Writ of Summons; spent court orders; and duplicate documents in the bundles.  Screen captures of WhatsApp messages are not reproduced in colour so as to allow the court to clearly read the content.  The court rules relating to the preparation of trial bundles, and the expectation on legal representatives in adhering to them, remain the same irrespective of the size of the claim.

Mr Fergus Chan, instructed by H Y Leung & Co LLP, for the plaintiff

Ms Athena Cheung, instructed by Francis Kong & Co, for the defendant