Ng Dai Kim v. Wah Chit Garment Factory Ltd
Read the full judgment text of DCCJ 1258/1970 on BabelCite. This District Court judgment was delivered on 22 May 1970.
1. This is an action to recover the sum of $3,500 paid for the purchase and allotment of shares in the defendant company. It is sought now to disclaim this as the true object of the payment but, having heard the only two witnesses called, namely, the plaintiff and one Mr. Lee, the Director concerned of the defendant company, I prefer the evidence of the plaintiff in this respect. It may well be that a proper account of other financial transactions between the parties yet remains to be settled, b
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DCCJ001258/1970 IN THE DISTRICT COURT OF HONG KONG HOLDEN AT VICTORIA CIVIL JURISDICTION ACTION NO 1258 OF 1970
Coram: District Judge D. Cons in Court Date of Judgment: 22 May 1970 ----------------- (JUDGMENT) ----------------- 1. This is an action to recover the sum of $3,500 paid for the purchase and allotment of shares in the defendant company. It is sought now to disclaim this as the true object of the payment but, having heard the only two witnesses called, namely, the plaintiff and one Mr. Lee, the Director concerned of the defendant company, I prefer the evidence of the plaintiff in this respect. It may well be that a proper account of other financial transactions between the parties yet remains to be settled, but these other transactions are not raised by the pleadings in this action. 2. The plaintiff is a teacher of accountancy. In 1968 numbered amongst his pupils the wife of the Mr. Lee to whom I have just referred. Apparently she made use of her position to seek the plaintiff's advice with regard to accounting problems arising in her husband's businesses, and finally the plaintiff accepted a part time job looking after the accounts, not of the defendant company, but of another company closely connected therewith. Then in September of last year he was approached by Mr. Lee to purchase shares in the defendant company. The exact number that he could purchase was left expressly open to him, and he settled for shares to the value of $3,500. This amount was duly paid but no allotment was made by the company nor share certificate issued. The plaintiff pressed from time to time but was apparently fobbed off by excuses that must have sounded rather thin to his ears. Approximately two months after he had paid over the money the plaintiff left the employment of the sister company. Still no allotment of shares had been made to him, and from then onwards he pressed instead for the return of his money but met, and still meets, with an equal lack of success. 3. It has been submitted on behalf of the defendant, and I think correctly so that the course of dealings between the plaintiff and Mr. Lee resulted in no contract binding upon the defendant company itself. The articles of that company provide that share certificates shall be signed by two directors and that "The Directors" have, in effect, an absolute discretion to refuse shares to any person of whom they may disapprove. It follows to my mind that the offer of the plaintiff to purchase a particular number of shares could not properly have been accepted by one individual director acting alone. The position at the present is therefore either that the offer has been withdrawn or that it has lapsed through passage of time: Ramsgate Victoria Hotel v. Monte Fiori*. There can be then no escape from the defendant's liability to replace the $3,500 as money had and received for a consideration which has wholly failed. I cannot accept the half-hearted suggestion that it should be considered as money paid under a mistake only of law; the doctrine of mistake is not appropriate to the circumstances of this case. 4. Judgment is therefore entered for the plaintiff in the sum of $3,500 and costs.
22 MAY 1970 Representation: Yiu of Peter C. Wong & Co for the plaintiff. Chow of Gunston, Fairbairn & Chow for the deft. *(1866) Law Reports 1 Exchequer 109 |