In N Out International Corporate Ltd v. Wong Ting Kwan Lawrence
Read the full judgment text of DCCJ 2831/2024 on BabelCite. This District Court judgment was delivered on 14 July 2026.
1. This is the trial of a dispute arising from a service agreement between the Plaintiff and the Defendant. The Plaintiff is and was at all material times a company that runs a self-storage business providing storage spaces to its customers. At the material times, the Defendant advertised himself as running a professional accounting firm that provides services including handling full sets of accounts, taxation, auditing, bank statements, etc. On about 17 May 2023, the parties entered into a serv
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DCCJ 2831/2024 [2026] HKDC 1194 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 2831 OF 2024 ------------------------------ BETWEEN
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--------------------------- JUDGMENT --------------------------- A. INTRODUCTION 1.This is the trial of a dispute arising from a service agreement between the Plaintiff and the Defendant. The Plaintiff is and was at all material times a company that runs a self-storage business providing storage spaces to its customers. At the material times, the Defendant advertised himself as running a professional accounting firm that provides services including handling full sets of accounts, taxation, auditing, bank statements, etc. On about 17 May 2023, the parties entered into a service agreement for the Defendant to provide certain accounting services to the Plaintiff in the form of compiling and delivering various accounting documents to the Plaintiff. The Plaintiff claims, in this action, for the Defendant’s breach of the service agreement in failing to provide the accounting services in accordance with the terms thereof. 2.The Plaintiff commenced the present action on 24 May 2024. The Writ of Summons (endorsed with the Statement of Claim) was served on the Defendant at his last known address in Yuen Long (“the Defendant’s Address”). On 21 June 2024, the Defendant filed his Defence and the Plaintiff, on 11 July 2024, filed its Reply. All along, the parties were unrepresented. 3.Despite the Defendant having filed his Defence, he then took no further steps in these proceedings. The Defendant was absent at the various case management hearings leading up to trial, including the hearings on 10 October 2024, 9 May 2025, 31 July 2025, 13 November 2025. A Pre-Trial Review (“PTR”) was held on 4 February 2026 which the Defendant also did not attend. At the PTR, the present trial was fixed for 1 day to be held on 28 April 2026. Pursuant to the PTR Order of Deputy District Judge Gekko Lan, the PTR Order was served on the Defendant by the court. 4.Having initially responded to these proceedings after he was served with the Writ of Summons at the Defendant’s Address and the Defendant has not given any notice of change of address, I am satisfied that notice of the trial hearing as contained in the PTR Order has been brought to the Defendant’s notice. Accordingly, I am satisfied that it is appropriate to proceed with the trial in the absence of the Defendant in accordance with Order 35 rule 1(2) of the Rules of the District Court, having regard to the pleaded defence where appropriate: Jotz Klaus-Bernhard Markus v Hamawy Tarek Mahmoud (unrep, HCA 1150/2013, 30 June 2017), at §4. 5.At trial, the Plaintiff was represented by its director, Ms Lau Jun Jun. Ms Lau also gave evidence in Court and confirmed the content of her witness statement. On the contrary, as the Defendant did not participate in these proceedings since the filing of his Defence, the Defendant did not adduce any evidence at trial. The Plaintiff’s evidence, including the evidence of Ms Lau, is essentially unopposed. 6.Having carefully considered Ms Lau’s evidence and the documentary evidence adduced by the Plaintiff, it is clear that Ms Lau’s evidence is consistent with what the documents show. Accordingly, I accept Ms Lau’s evidence as there is clearly no reason for the court to reject it. In the circumstances, I find that the Plaintiff has proved all of the factual matters that I will refer to in section B below. B. BACKGROUND FACTS 7.The Plaintiff first came across the Defendant in about mid-May 2023 through email advertisement sent to the Plaintiff. The Defendant advertised his services to be a professional outsource accounting firm that is able to provide various accounting services at a monthly fee of HK$13,800. As the Plaintiff was interested in such accounting services, Ms Lau eventually met with the Defendant to discuss the potential engagement of the Defendant’s services in a meeting held in mid-May 2023. 8.Eventually, on 17 May 2023, an oral agreement (“the Service Agreement”) was reached between the Plaintiff and the Defendant for accounting services to be provided by the Defendant at an agreed monthly fee. The terms of the Service Agreement include:-
9.From 1 June 2023 to February 2024, the Plaintiff paid a total sum of HK$104,800 through 8 monthly payments as follows:-
10.However, despite the Plaintiff making the above monthly payments covering the period from 1 June 2023 to 31 January 2024, the Defendant did not deliver the Accounting Documents to the Plaintiff in accordance with the terms of the Service Agreement. 11.The Defendant did not deliver any balance sheet and general ledger to the Plaintiff at all. The income statements and the rental income by location reports were all provided later than the agreed date. More importantly, they were found to be highly inaccurate and had no supporting data based on the Plaintiff’s bookkeeping records. As these documents were inaccurate and did not reflect the true accounts of the Plaintiff, they were essentially useless and of no value to the Plaintiff. 12.By April 2025, the Defendant has yet delivered the Accounting Documents to the Plaintiff in accordance with the terms of the Service Agreement. As a result, the parties negotiated and reached an agreement on about 20 April 2024, essentially, to vary the terms of the Service Agreement to extend the time for the Defendant to deliver part of the Accounting Documents before 1 June 2024 as follows:-
13.Since 20 April 2024, the Plaintiff has been unable to contact the Defendant. As the deadline of 1 June 2024 was approaching, the Plaintiff issued 2 reminders to the Defendant on 16 and 22 May 2024. 14.On 23 May 2024, the Defendant attended the Plaintiff’s office and asked to be provided with the Plaintiff’s bank statements, which according to the Plaintiff had already been provided previously. Given the Defendant’s repeated failure to perform the Service Agreement, Ms Lau suspected that the Plaintiff had fallen victim to a scheme where the Defendant would not be able to deliver the service as promised. Ms Lau therefore called the police on 23 May 2024. When the police arrived, Ms Lau was told by the police that the matter does not appear to involve a fraud so that she may have to sue the Defendant in a civil court. When the police left, the Defendant again asked to be provided with the Defendant’s bank statements for him to complete the work under the Service Agreement. 15.On 24 May 2024, to ensure that the Defendant had all the necessary bank statements, the Plaintiff’s staff re-sent all the Plaintiff’s bank statements from June 2023 to March 2024 to the Defendant. 16.By 1 June 2024, the Defendant did not provide any documents to the Plaintiff. As a result, on 1 June 2024, the Plaintiff issued a letter to the Defendant alleging a failure for the Defendant to provide the agreed documents before 1 June 2024. The Plaintiff also terminated their relationship under the Service Agreement. 17.At the same time, the Plaintiff engaged another service provider to provide the same services in compiling the Accounting Documents for the period from 1 April 2023 to 31 March 2024 in place of the Defendant. C. THE PLAINTIFF’S CLAIM 18.By reason of the factual background as proved by the Plaintiff referred to above, I am satisfied that the Defendant was in breach of the Service Agreement (including the variation made on 20 April 2024) by failing to provide the Accounting Documents to the Plaintiff in accordance with the terms thereof. The failure to provide any balance sheets and general ledger by 1 June 2024 is clearly a breach of the terms of the Service Agreement. The provision of some of the income statements and rental income by location reports that were inaccurate and were not based on the Plaintiff’s records likewise constituted a breach of the Service Agreement. 19.At trial, the Plaintiff claims the return of the sum of HK$104,800 paid to the Defendant pursuant to the Service Agreement. This is essentially a claim for reliance loss, in the form of wasted expenditure where the Defendant has not in fact delivered anything of value to the Plaintiff: see Chitty on Contracts (36th Ed), at §30-029. 20.On the facts as found by this court, I am of the view that the Plaintiff is entitled to claim reliance loss of HK$104,800. 21.The Plaintiff did not claim pre-judgment interest in the Statement of Claim. A claim for interest must be specifically pleaded. If the claim for interest is not pleaded, the court will not award any pre-judgment interest: Hong Kong Civil Procedure 2026, Vol 1, Commentary 18/8/22. D. THE DEFENDANT’S PLEADED DEFENCE 22.For completeness, I should also mention that I have considered the pleaded defence of the Defendant, and find that it has not been made out. 23.In gist, the following matters were alleged in the Defence filed by the Defendant:-
24.The Defendant has not adduced any evidence to substantiate its allegations as pleaded in the Defence (even assuming that these factual allegations give rise to a valid defence). Accordingly, even if the Defence is considered, no valid defence to the Plaintiff’s claim has been demonstrated. E. DISPOSITION 25.For the forgoing reasons, I grant judgment to the Plaintiff and make the following orders:-
The Plaintiff represented by director, Madam Lau Jun Jun The Defendant was not represented and did not appear |
Cases cited in this judgment