Hing Ham Hong Petroleum Co Ltd v. Cheung Kam Pui and Wong Man on t/a Yee Hop Construction Eng Co

HCA006522/1982

BETWEEN

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Coram: Hon. LIU, J. in Chambers

Date: 13 December 1982

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JUDGMENT

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1. This is an appeal from an order of the learned Master granting conditional leave to defend to the 1st-named defendant, in effect, enjoining him to pay into court the whole claim of the plaintiff's before he is admitted to come in to defend.

2. On behalf of the 1st-named defendant counsel took two points. The first was a technical objection. In substance, counsel submitted that the plaintiff's claim had yet to be verified. That contention can be readily disposed of, and I propose to deal with it instantly. The plaintiff's claim against the defendant firm arose as a result of goods sold and delivered in between July to November, 1981. In the unamended version of the Statement of Claim, the year 1981 was erroneously pleaded as 1982. That oversight was brought to notice by one and then the other defendant, and an amendment was thereafter caused to be made. There was a further affirmation filed on behalf of the plaintiff by Mr. Chan Hing Nam on the 21st October, 1982; the tenor of his paragraphs 4 and 5 is, in my view, sufficient to cure the defect in the original verifying affidavit. Furthermore, it is common ground that the plaintiff's claim in this case has not been satisfied. The dispute is confined to liability. The 1st-named defendant has not been confused or misled. In the circumstances, I do not find the first contention by way of a technical objection advanced on behalf of the 1st named defendant meritorious which consequently fails.

3. Counsel's next submission was on the merits. The defendant firm comprised the 1st-named defendant and the 2nd-named defendant as partners. The allegation of the 2nd-named defendant was that he had retired prior to the subject matter canvassed in the re-amended Statement of Claim. He was granted on his allegation unconditional leave to defend. As for the 1st-named defendant, in his first affirmation filed on the 6th October 1982, a sweeping allegation was made to the effect that his firm had throughout acted as an agent on behalf of Grandeur Company carrying no personal liability. When certain receipts were exhibited by the plaintiff, the 1st-named defendant hastened to modify his allegation. He conceded that at the inception the defendant partnership was itself contractually liable to the plaintiff as an independent sub-contractor for goods sold and delivered. However, it was sought to be explained that as Grandeur Company experienced payment difficulty sometime in February 1981, it was agreed between the defendant partnership and Grandeur Company for the defendant firm to cease as a sub-contractor but remain on the site to manage the construction works on the understanding the transportation charges and diesel charges were thereafter to be incurred for the account of Grandeur Company and to be settled directly by that company with the respective suppliers. It has never been alleged that the plaintiff was privy to that arrangement. What transpired after the alleged agreement between Grandeur Company and the defendant partnership was set out by the 1st-named defendant in paragraph 5 of his subsequent affirmation filed on the 7th November 1982, in which he recounted an alleged conversation between himself and one Mr. Chan Hing Nam, a director of the plaintiff company. It was on this conversation that the 1st-named defendant relied.

4. It was conceded that nowhere in the modifying affirmation of the 1st-named defendant was any reference made to an exclusion of personal liability of either himself or the defendant firm. But counsel leaned heavily on the bare assertion in an earlier affirmation of the 1st-named defendant that he, the 1st-named defendant, denied "that the defendant has no defence in the action".

5. The learned Master was, as I am, concerned with factual allegations rather than denials. Even accepting all the factual allegations of the 1st-named defendant, it would still appear strongly arguable that neither he nor the defendant firm had rid himself or itself of any personal liability. The denial of liability does not seem to be well supported by the assertions of the 1st-named defendant. It is of interest to note that at the time when the alleged arrangement was made between the 1st-named defendant and Mr. Chan in early 1981, Grandeur Company was financially suffering from a set-back, that from the receipts exhibited by the plaintiff, a period of indulgence would seem to have been granted on the purchases and that it would have been inconceivable for the plaintiff to be prepared to accept as the only pay-master and to extend the same facilities to a firm having such cash flow problems, had the facts been fully disclosed to or known by Mr. Chan. Furthermore, after the alleged conversation, on at lease one occasion in July 1981, the 1st-named defendant paid the plaintiff with his own cheque drawn from an account of Yee Hop Iron in the sum of $49,289.40 for the supplies delivered in the previous month of June when the "director" of Grandeur Company was out of the territory. That cheque was dishonoured twice upon presentation and was subsequently replaced by a cheque of Grandeur Company only in September 1981. That hardly seems to be conduct consistent with the 1st-named defendant's denial of personal liability.

6. The defence advanced by the 1st-named defendant has little substance. It is strongly arguable that even on his allegations neither the 1st-named defendant nor his firm has ever excluded personal liability or put an end to the now admitted initial direct dealing with the plaintiff. Further, the original allegation of the 1st-named defendant was such that the defendant firm had, from beginning to end, never been liable to the plaintiff. As I have said, the 1st-named defendant modified that sweeping allegation and relied on the change of the arrangement in March 1981. From an originally alleged total exclusion of agency liability, the 1st-named defendant fell back on an alleged termination of contractual responsibility coupled with an alleged exclusion of agency liability. The original allegation put forward is certainly less involved. There is justification, in my view, for the learned toaster to regard the presentation of the 1st-named defendant's defence as being somewhat suspicious in the circumstances.

7. For these reasons, in my judgment, the learned Master was prefectly entitled to order a payment into court by the 1st-named defendant before he is let in to defend. In the circumstances, it remains for me to dismiss the appeal with costs to the plaintiff.

Representation:

Mrs. Kaplan instructed by Messrs. Gallant Y.T. Ho & Co. for the Plaintiff/Respondent

Mr. W.K. To instructed by Messrs. P.H. Sin & Co. for the 1st-named Defendant/Appellant