Dick, Wong Man Chun and Another v. Chiu Sin Wui
Read the full judgment text of HCA 271/1976 on BabelCite. This High Court CFI judgment.
1. The plaintiffs, who are husband and wife, took out two life insurance policies with the Manufacturers Life Insurance Company of Toronto, Canada (Hong Kong Office) in November 1971 (hereinafter referred to as "Manulife"), through the defendant who was then employed by Manulife.
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HCA000271/1976
Coram: Li, J.A. Date of Judgment: 19th December, 1980 ----------------- JUDGMENT ----------------- 1. The plaintiffs, who are husband and wife, took out two life insurance policies with the Manufacturers Life Insurance Company of Toronto, Canada (Hong Kong Office) in November 1971 (hereinafter referred to as "Manulife"), through the defendant who was then employed by Manulife. 2. They were Executive Life Plan policies, No. 2161985 and No. 2161986, for the total value of $300,000 (Hong Kong) with a pre-paid total premium of $179,434.70. These facts are not disputed. 3. The plaintiff's claim is that, in or about June 1972, they wanted to convert the value of the said policies into Canadian currency and requested the defendant to arrange it for them. 4. It is alleged that the defendant told the plaintiffs that in order to effect such a conversion it was necessary for the plaintiffs to sign certain forms to authorize the defendant to obtain a refund of all the prepaid premium as well as other prepared documents, one of which was a letter of authorisation. 5. The plaintiffs, acting on such advice, signed all papers in ignorance. On the 7th June, 1972 the defendant produced two cheques issued by Manulife in favour of the plaintiffs in refund of the prepaid premium. The defendant told the plaintiffs that they would have to endorse the cheques so as to enable him to effect the desired arrangement. 6. In reliance on the defendant's representations, the plaintiffs complied with the defendant's request. The plaintiffs allege that the aforesaid representations were fraudulent in that, for the purpose of converting the policies, it was not necessary to authorize the defendant to obtain a refund of the pre-paid premium and the defendant knew it. 7. Stopping here, I observe that the evidence adduced by the plaintiffs is to the contrary in that Mr. Thompson, the second witness for the plaintiffs, said that the practice in 1972 was that in order to obtain such a conversion it was necessary first of all to obtain a refund of the pre-paid premium in Hong Kong dollars, convert them into Canadian Dollars and then pay the pre-paid premium a second time into Manulife for the purpose of converting the value of a policy in Canadian currency. 8. The plaintiffs further allege that the papers purporting to authorise the defendant to be in full charge of the refunds and to invest in shares on behalf of the plaintiffs were never intentionally given. That the authority so to do was given only due to a misrepresentation on the part of the defendant to induce them to sign the aforesaid papers. The plaintiffs signed a document represented by the defendant to be a receipt for US$33,000 as the agreed refund of the pre-paid premium. Such document was signed either in blank or whilst covered so that the contents were not revealed to the plaintiffs. The US$33,000 was never paid to the plaintiffs at all. Further, the defendant converted this sum of US$33,000 to his own use by presenting the endorsed cheques to Messrs. Merrill Lynch, Pierce, Fenner & Smith, (hereinafter called "Merrill Lynch") and had it credited to his, the defendant's own account with the said firm on or about 7th June 1972 without the plaintiffs' knowledge of consent. 9. As a result of the aforesaid the plaintiffs became liable in 1972 for payment of premium under the aforesaid policies and were obliged to surrender the said policies in August 1973 when the annual policy expired. For this reason, the plaintiffs claim for the loss of the $179,434.70 as well as the difference between the premium of the said policies and a higher premium for similar policies if such were to be taken out today. The plaintiffs give credit for repayment by the defendant of a total of HK$105,000 between 19th September, 1975 and 30th October, 1975, leaving a balance of $74,434.70. The plaintiffs claim also damages for fraud and/or conversion, alternatively, the balance of $74,434.70; further and alternatively, an account from the defendant as to how the said sum of $179,434.70 had been invested plus all the profits accruing to any transaction in respect of this sum and an order for payment of the sum so due. 10. The defence is that in June 1972 the plaintiffs asked the defendant for the encashment of the pre-paid premium at the Coffee Shop of Lee Gardens Hotel. Despite the defendant's advice to the contrary and the defendant's assurance that the plaintiffs' niece could not encash the pre-paid premium on the policies, the plaintiffs insisted on the encashment. Two separate cheques in the form of $98,333.90 and of $81,100.80 in favour of the 1st plaintiff and the 2nd plaintiff respectively were issued by Manulife. The plaintiffs declined to cash the cheques because their son was wanted by the police and they did not want the police to know that they had such a big amount of cash with them. The plaintiffs then requested the defendant to invest the said sums totalling $179,434.70 on their behalf in the American share market. They signed an authorisation for the purpose on 5th June. The defendant invested the money on their behalf and paid the 1st plaintiff various sums on various dates to be set off against the money and the shares held by the defendant on behalf of the plaintiffs. By the 3rd February, all the money had been exhausted by the plaintiffs' withdrawals and by loss in the share market. By a receipt dated 18th February, 1973, the plaintiffs acknowledged having received from the defendant the whole of the said refund of US$33,000. In September 1973, however, the 1st plaintiff requested the defendant to give him financial assistance. Upon the defendant's refusal, the 1st plaintiff denied having received any money or refund from the defendant at all and threatened the defendant with a report to the Commercial Crime Office alleging fraud. 11. On 16th September, 1975, the 1st plaintiff, together with three men, who appeared to be hooligans accosted the defendant in a street and threatened the defendant with bodily injury. Under such threats the defendant paid the 1st plaintiff a total sum of money or money's worth amounting to $105,000, as the particulars set out in paragraph 16 of the defence, between the 16th September, 1975 and 6th October, 1975. On 6th October, 1975, the 1st plaintiff gave the defendant receipt acknowledging having received $105,000 in full in final settlement of the said sum of refunds from Manulife. 12. The defendant denied having made any of the statements alleged in paragraph 7 of the Amended Statement of Claim, namely the alleged fraudulent misrepresentations. The defendant alleges that at all material times the 1st plaintiff was fully aware of all the documents he signed, as the 1st plaintiff was conversant with the English language. In the premises the defendant denies that he owed the plaintiffs any further money but, in addition, counterclaims for the sum of $90,000 in cash plus the return of his car or its value which is set out in paragraph 15 of the Defence. 13. In their Reply and Defence to the Counterclaim the plaintiffs join issue with the defendant upon the re-amended Statement of Defence and Counterclaim and deny that they ever asked the defendant to arrange for encashment of the said policies with Manulife, or that the 1st plaintiff is conversant with the English language. The plaintiffs repeat that they relied entirely on the representations of the defendant. While admitting the existence of the acknowledgement receipt dated 6th October, 1975, the plaintiffs allege that it was signed under pressure by the defendant that payment would be made only if the plaintiffs signed the receipt. The plaintiffs plead that the agreement to reduce the debt to a smaller sum is invalid for lack of consideration. The 1st plaintiff, admits having told the defendant he would report to the Commercial Crime Office. The 1st plaintiff did so report. He denies having threatened the defendant in any way; let alone with three strong men. Whatever payment made by the defendant was made as part payment and acknowledgement of the defendant's debt to the plaintiffs. Such are the general pleadings in this case. 14. In view of these, it appears that the first issue to be determined is whether the plaintiffs were deceived by the defendant's fraudulent misrepresentation to part with the sum of $179,434.70 by handing the endorsed cheques to the defendant's hands, or whether the plaintiffs voluntarily requested the defendant to invest the said sum in shares for them. 15. The second issue to be determined is whether by February 1973 the plaintiffs had withdrawn completely all the monies entrusted to the defendant. 16. The third issue is whether the payment by the defendant to the plaintiffs amounting to a total of $105,000 in money or money's worth were in fact only part payment of the defendant's debt to the plaintiffs or were payments under duress or threat by the plaintiffs as alleged by the defendant. 17. The 1st plaintiff gave evidence for the plaintiffs and the defendant gave evidence for the defence. The 1st plaintiff also called the Manager of Manulife in Hong Kong, Mr. Thompson. Mr. Thompson's evidence is very instructive and interesting, but is of little assistance to me. His evidence merely relates to the procedure for conversion and the difference between the premium payable by the plaintiffs for the policies taken out in 1972 and the premium payable by the plaintiffs if they were to take out their policies in 1980. This issue will be irrelevant in view of what I am about to decide in this case. However, he did contradict the plaintiffs' case on the procedure relating to the conversion of a policy in Hong Kong dollars to one in Canadian currency. I have mentioned his evidence on this point and I shall not repeat it. The paucity of evidence in this case is such that it amounts to one man's words against the other. I have to find who has proved his allegations on the balance of probability. 18. According to the plaintiffs, the defendant was the one who asked them to sign the letters of authorisation. The defendant handed to them a bundle of papers with a hand covering the top end and then advised them to sign each one. The plaintiffs signed some documents in blank and some with writings. However, the writings were never explained to the plaintiffs before they signed them. Two days later the defendant brought two cheques for endorsement. Then the defendant went to see them again with a second set of documents. The signing was done again because the defendant alleged that the Canadian Office of Manulife said the first set of papers was wrong in procedure. The 1st plaintiff said that no receipt was given to him for the endorsed cheques because shortly after he signed the papers he went to Canada to visit his daughter. He instructed the defendant to give the receipt to his wife as soon as it was available. On his return in August 1972 the 1st plaintiff found that no receipt had been given to his wife. Three or four days after his return, he started to locate the defendant. He contacted the defendant by telephone. The defendant told him that the receipt had not yet arrived from Manulife's Toronto Office and once available he would send it to the plaintiffs' home. He said that from that time onwards he tried practically once every two or three days to contact the defendant by telephoning the office of Manulife in Star House or by telephoning the defendant's home without any success. In short, he failed totally to locate the defendant. After about two or three months, by then I take it to be November/December 1972, he went to the Star House Office of Manulife and saw the Manager. The 1st plaintiff told the manager everything. 19. The 1st plaintiff found out that something was wrong early in 1973. There was a chance meeting between the plaintiffs and the defendant early in 1973 near the entrance of a bank in Shing Wo Road, Happy Valley. The 2nd plaintiff caught hold of the defendant and demanded repayment saying that the defendant had cheated them. There was a struggle in the street. The defendant managed to stall the plaintiffs by suggesting that they should have a talk somewhere. However, the defendant disappeared. As a result, the 1st plaintiff instructed Wat and Fu to write letters. I need not mention the letters at this stage except that Wat and Fu did write on his behalf to Manulife. In due course the story unfolded itself. It transpired that the two cheques endorsed by the plaintiffs went to the personal account of the defendant with Merrill Lynch and that the account had been closed by 27th October, 1972. Eventually the plaintiffs' solicitors, Wat and Fu, were led to write to the defendant himself on 25th August to this effect:-
The reply from the defendant's solicitors is as follows:-
I presume a copy of that receipt Exh. P14, was enclosed with the reply and the receipt was shown to the 1st plaintiff. 20. The 1st plaintiff said he was in such a rage at that stage that he nearly fainted. He took no further action and did not instruct Wat and Fu to take any action. He went instead to report to the Commercial Crime Office. The police took the matter up, interviewed the defendant and subsequently took no action. Presumably there was insufficient evidence for the police to take any further action. That must have been some time in November/December 1973. 21. In the course of their correspondence with Manulife the latter sent to the plaintiffs a receipt dated the 14th February, 1973 - Exh. P14. It reads:-
This receipt had been stamped and bore the signatures of both plaintiffs. This is the receipt which the plaintiffs said that they had signed either in blank or without seeing the contents. As the case unfolds, the plaintiffs are confronted with two more receipts - one dated 19th February for $10,000 Exh. D9 and another undated for $5,000 Exh. D10. The 1st plaintiff says that he signed D9 only to acknowledge the repayment of a loan to the defendant by his son. He further says that when he signed Exh. D10 only the sentence "Received from Mr. Stephen Chiu cash amount of five thousand dollars only" was written on it. All the rest was inserted by the defendant later. These two receipts were signed well before June 1972. So much for the pre-1973 episode. 22. The 1st plaintiff goes on to say that nothing happened until one day in August or September 1975 when by chance he saw the defendant at the Star Ferry Pier. He cornered the defendant who begged the 1st plaintiff to let go and not to make a scene. At that time, the defendant was about to drive a car away and had no cash with him. The 1st plaintiff said he would trust the defendant another time. They arranged to meet two or three days later at the Coffee Shop of the Furama Hotel. The defendant was prepared to hand over his car, a BMW, to be valued at the price of $15,000. The plaintiff accepted and immediately asked the defendant to sign the transfer and handover the registration book. The 1st plaintiff took possession of that car. Two days later the defendant paid the 1st plaintiff another $5,000 voluntarily at a pre-arranged meeting. A few days later they met again at the Furama Coffee Shop. The defendant gave the 1st plaintiff $40,000. At the final meeting, the defendant gave the 1st plaintiff two post-dated cheques, one for $30,000 and another for $15,000. In all the defendant paid the 1st plaintiff a total of $90,000 plus the car valued at $15,000. On the last occasion the 1st plaintiff got a witness to witness an agreement signed by both the 1st plaintiff and the defendant and each gave a copy to the other. That is the acknowledgment in Documents 27 and 28 which is Exh. 15. Such is the 1st plaintiff's evidence-in-chief. 23. In cross-examination his evidence was not so straightforward. He says that he does not know any English although he was a ship's agent. He saw the defendant sometime in June 1972 and asked merely for a conversion of value in his policy to Canadian dollars. He says that he and the 2nd plaintiff endorsed the cheques without limitation because he took the defendant's words for it. He was never told that conversion was only possible on the anniversary of the policy. Yet there is produced an application dated 27th November, 1972 - Exh. P3. In respect of that document Exh. P3, he says that 'he signed in blank'. He denies having received US$3,000 from the defendant. No receipt has been produced by the defendant for this sum. He cannot explain why he waited until October, 1972 to go to Star House when he failed to locate the defendant. But when saw the manager he told the manager everything. He should have told the manager his fear, his trepidation and his suspicion. It would be very surprising for the manager of a proper firm not to take any action to locate the defendant and investigate the matter in 1972. Why was it necessary for the plaintiffs to wait until the chance meeting early in 1973 when they cornered the defendant in Happy Valley? Why should they let the defendant go on that occasion? The 1st plaintiff was asked repeatedly why he did not take action straightaway in October 1972. Why it was necessary to wait till summer 1973 to write to Manulife? The only explanation the 1st plaintiff gives is that he was in fear that the defendant might finally own up to him that he (the defendant) had spent all the money and that he, (the 1st plaintiff) wanted to save the face of the defendant. One may well ask the rhetorical question 'What face is there to be saved?' The 1st plaintiff had suspected the worst anyway. 24. The 1st plaintiff insists that he signed a receipt, Exh.14 dated 18th February, 1973 without knowing the contents. He alleges, without any further prooof, that he must have signed it in blank when the defendant induced him to sign a lot of papers in June, 1972. He says that he signed a longer piece of paper in blank with all the contents covered. His name and his wife's name were typed on. Having examined Exh. 14 it seems that the piece of paper had no cut edge anywhere. I may be wrong, But that is not the only reason for my conclusion that he signed Exh. 14 as a true acknowledgment. He says that he signed a receipt for the $10,000 dated 19th February, 1973 which was undated at the time of his signature, that the defendant added the date of 15/2/73 on later and that he must have signed Exh.14 well before 5th June, 1972 i.e. before he asked the defendant to convert the value of the policies. Yet up to July, 1973 however, he did not tell his solicitors of the endorsed cheques. Thus in Document 17 (Exh. 6) his solicitors only wrote in these words:-
That was addressed to Manulife. There was no mention of any fraud, any misrepresentation of indeed whether they had received any payment from the defendant. That was a letter written on 5th July, 1973 a few months after the 1st plaintiff alleged that his wife saw the defendant at Shing Wo Road in Happy Valley in early 1973 and accused the defendant of cheating. Why in that case was a letter written in such a mild manner instead of lodging a complaint straightaway! One may well wonder. 25. In Exh. 8 their solicitors wrote again to Manulife as follows:-
Again there has been no complaint as to the conduct of the defendant at a time when the defendant was an employee of Manulife. It was not until copies of the cheques had been recovered that they started to write to the defendant personally. There was no question of not knowing where the defendant was or how to contact the defendant. By 25th August, 1973 there was no difficulty of the plaintiffs' solicitors knowing the address of the defendant which must have been supplied by the plaintiffs themselves. 26. It is said that the plaintiffs learned of the receipt, Exh.P14 dated 18th February, 1973 only by virtue of the reply with the receipt enclosed from Russ & Co. The 1st plaintiff nearly fainted in rage. Yet apart from reporting the matter to the Commercial Crime Office the plaintiffs did nothing whatsoever until in 1975 when the 1st plaintiff met the defendant by chance. 27. Talking of the endorsement of the cheques the 1st plaintiff says that he never thought of endorsing the cheques by limiting the payment to Manulife only. 28. The defence evidence is that in fact the plaintiffs' son initiated the taking out of the two life policies. By June 1972 the 1st plaintiff suggested to the defendant, at a meeting, that he should cash in on the pre-paid premium for fear that the beneficiaries of the two policies who were the plaintiffs' daughter and daughter-in-law might take advantage of that and cash in first. Despite the defendant's assurance against such possibility the 1st plaintiff insisted that he needed the cash. The defendant then explained that in order to cash the policies the 1st plaintiff would have to sign prepared documents. First of all the plaintiff had to sign the receipts for the pre-paid premium and in return the defendant would give him a cheque for the refund of the said pre-paid premium. A discussion ensued. The 1st plaintiff said that he wanted nothing but bank notes. The defendant said it would be impossible because Manulife was bound to give a cheque. As a result of some discussion the 1st plaintiff then asked the defendant to cash the cheque for him. Upon the defendant's refusal the 1st plaintiff then agreed that he should endorse the cheque for the defendant to obtain cash. The 1st plaintiff said he wanted the defendant to invest in shares on his behalf. On this point the defendant suggested that it should be put into his (the defendant's) personal account with Merrill Lynch to which the 1st plaintiff agreed. Then the defendant said he would require a letter of authorisation. Hence the defendant prepared a letter of authorisation, obtained the cheques, and took these together with the receipts for the refunded premium for the 1st plaintiff and his wife to sign. All documents were explained to the plaintiffs before they signed it. As the defendant explained to the 1st plaintiff, the 2nd plaintiff was around the house. She was later asked to sign. Having obtained the letter of authorisation and having obtained the cheques the defendant took the cheques to pay into his Merrill Lynch account with instructions that he wanted to open an account for US$30,000. The balance of approximately US$3,000 was returned to the defendant in the form of Hong Kong dollars. Meanwhile the 1st plaintiff told the defendant that he was going away and he would need some cash. For this reason the defendant gave the equivalent in Hong Kong dollars of the US$3,000 odd to the 1st plaintiff. The 1st plaintiff went on his trip. On his return the 1st plaintiff wanted to withdraw some of the money from Merrill Lynch for investment in Hong Kong shares. There was a time then the plaintiffs' investments in Hong Kong shares as well as in US shares were going on hand in hand until finally the 1st plaintiff decided to invest entirely on the Hong Kong market. On that occasion the account with Merrill Lynch was closed and settled on 27th October, 1972 and the money withdrawn. 29. Since the 1st plaintiff's return from abroad there had been meetings between the 1st plaintiff and the defendant to discuss their investments, to reconcile their accounts. The 1st plaintiff only kept a little black book in which he noted every investment, the figures and the accounts. At every meeting the defendant only used a piece of paper to write out the investments and the accounts therefor in figures. They reconciled the investment accounts as to how much money the 1st plaintiff had withdrawn, how much profit they had made in the shares and how much they had lost in the shares. They arrived at an agreed figure in shares and money which the defendant would record in the piece of paper. The defendant would then destroy the paper record of the previous meeting and keep the paper record so reconciled for the next future meeting. Then there would be a further checking on investments and accounts and adjustments. The account would be settled again and the defendant would have another piece of paper to record the final figures for another future meeting. The defendant would throw away the old records. 30. From time to time the 1st plaintiff withdrew money in the sums of either $3,000, $5,000, $8,000 or $10,000 from the defendant. No receipt was ever given to the defendant. Nor did the defendant ask for one. By February, 1973 the defendant found that the 1st plaintiff's funds with him were practically exhausted. He then met the 1st plaintiff, drew up a receipt dated 18th February, 1973 and was about to ask him to sign. The 1st plaintiff did not meet him. On 19th February, they met. The defendant gave that dated receipt (Exh. 14) to the 1st plaintiff for signature by the 1st and 2nd plaintiffs. The 1st plaintiff said that he had not his book with him and he was not able to check the accounts. The 1st plaintiff took away the receipt. But on that occasion the defendant gave the 1st plaintiff $10,000 which was the bigger portion of the balance of the plaintiffs' money still with the defendant. The 1st plaintiff signed a receipt in Exh.D9. The defendant says that sometime in October, 1972, when the account with Merrill Lynch was closed, he had already paid the 1st plaintiff $5,000. The 1st plaintiff gave a receipt (Exh.D10) for it. At that time the defendant had already accounted for a sum of $85,000 either in payment of cash to the 1st plaintiff at previous meetings or in losses in investments on the plaintiffs' behalf. There had been further losses and withdrawals by the 1st plaintiff. 31. Thus by February, 1973 the $10,000 paid was really a portion of the balance. As far as the defendant was concerned, that was the end of the matter. 32. Sometime before July, 1973 the 1st plaintiff went to the defendant and asked for financial assistance of about $30,000 or $40,000. Upon the defendant's refusal the 1st plaintiff threatened the defendant that he would deny having received any repayment from the defendant and would get the defendant into trouble with the people of law. Hence the letters written by the plaintiffs' solicitors to Manulife and subsequently to the defendant himself. He thought that the matter was over by a reply from his solicitors enclosing the receipt Exh.14. However, that was not so. The 1st plaintiff in the meantime had reported the matter to the Commercial Crime Office. The defendant was interviewed three or four times. The defendant was told that the police would not take any action. By that time it was November/ December 1973. Nothing happened until 16th September, 1975 when the defendant was accosted by the 1st plaintiff and three strong men as the defendant was getting into his car to go to work at the junction between Tin Chu Street and Tsat Tse Mui Road. They said that the defendant owed the 1st plaintiff some $180,000. They wanted repayment of the whole sum or some bodily injury would come to the defendant. The plaintiff introduced the three men as coming from an organisation. One of the strong men told him that if he did not comply with their wish they cause him injury. The defendant was reminded of an incident where a Korean consular officer had his finger chopped off in the street and another when someone had his skull cracked near Connaught Centre. The defendant was much intimidated. Before they let the defendant to they forced the defendant into the car, drove it to Central, forced the defendant to go to the Chartered Finance Company to pay off the mortgage on his car, retrieved the registration book, signed the transfer form and took away the defendant's car straightaway. As far as the payment of other sums of money at various subsequent meetings were concerned the 1st plaintiff and the defendant gave the same figures. There was a second payment of $5,000. Although the 1st plaintiff and the defendant gave different accounts as to the circumstances under which $40,000 were paid to the 1st plaintiff between the 16/9/75 and the 6/10/75 the fact is that a further $40,000 had been paid in that period of time. The defendant says that all the meetings and payments were forced upon him up to the 6/10/75. 33. On the 6th October the defendant turned up to meet the 1st plaintiff with the three men. He gave the 1st plaintiff two post-dated cheques, one for $30,000 the other for $15,000. The plaintiff at that time was prepared to accept that as a full and final settlement of the claim. One of the strong men drafted an agreement in the form of Exh.P15 dated the 6th October, that very day on the meeting. The strong man said that since they were the persons responsible for collecting the debt for the 1st plaintiff and the 1st plaintiff was satisfied he would draft a document for the 1st plaintiff and the defendant to sign as proof. That was Exh.P15. The terms of the document are:-
The 1st plaintiff and the defendant each wrote out in Chinese in identical terms a copy of this document, signed it and handed it to the other. The defendant's defence is that he never made any misrepresentation, he never cheated the plaintiffs, and that it was the 1st plaintiff who asked the defendant to invest money on their behalf. Part of that money had been lost, part of that money had been repaid by the 18th February, 1973; and whatever payments were made in 1975 were made under duress, threat and blackmail. For these reasons the defendant denied the claim and put in the counterclaim for a total of $90,000 plus the car or its value. 34. Having heard the defence evidence I must observe that as the defendant was the accounting party it is surprising that his attitude towards asking for receipts for repayment changed from time to time. On certain occasions he asked for a receipt, on certain occasions he never asked for a receipt at all. Various sums had been repaid to the 1st plaintiff. He never asked for a receipt for each payment. But he did ask for one when he paid the $5,000. That receipt was not even dated. On the occasion when he paid out the $10,000 on the 19th February he asked for another. On the 18th when there was a final settlement of the $33,000 US he also obtained a receipt. There has been a breach of duty of a person in a fiduciary position. It would cast upon the defendant a heavy burden of proof to clarify the doubt if one exists. The defendant is in no position now to dispute the claim of the plaintiffs for on account. However, this point is not so material in view of my findings. The defendant kept no record with Merrill Lynch. He kept no record of his Hong Kong investment either. He obtained no receipt for the individual payments he made to the 1st plaintiff. 35. However, on the paucity of evidence and the unlikely story told by the 1st plaintiff I find, as a fact, that there was no question of any misrepresentation by the defendant or that the defendant had defrauded the plaintiffs. I accept the defence evidence in part and I reject the plaintiffs' evidence in that there had been any misrepresentation and that the defendant in any way deceived the plaintiff into signing a lot of blank papers. The 1st plaintiff can give no satisfactory explanation for his inertia in taking action if there was fraud. Nor can he explain why he left everything to chance meeting - in 1973 and in 1975. At all times he knew the address of the defendant. His evidence of signing documents in blank or covered is too fantastic for credence. 36. I also accept the defence evidence that the 1st plaintiff did ask the defendant to invest the refunded premium on his behalf as his son was in trouble with the police. Unfortunately for the defendant he kept no detailed record and so there is no evidence of the details of the repayments he made to the plaintiff. However, on the 18th or 19th February, 1973 there appeared to have been a settlement of accounts so that the receipts were signed and given to the defendant. At that time the share market was booming. I am satisfied that the plaintiffs signed Exh.P14 without going too much into the details of payment and repayments. After February, 1973 they had a suspicion, whether founded or unfounded, that the defendant still owed them money. Thereupon they set the wheels in motion to try to recover money from the defendant. As the defendant produced the receipt Exh.P14 they appeared to have no recourse against him. Therefore they waited until 1975. There must have been half-hearted attempts to contact the defendant, but somehow they did not succeed until September, 1975. Thereupon the defendant paid up the balance. 37. I do not find that the 1st plaintiff went to the extent of threatening the defendant with bodily injury. I think that was an exaggeration. Had it been otherwise the defendant would have gone to the police or at least gone to his solicitors however frightened he was. He did not do so until he had paid over $105,000 and was pressed by the plaintiffs for further payment. I am satisfied that the so-called "strong man" were in fact mediators between the defendant and the plaintiffs. There have been some compromise at the 1975 meetings between the plaintiffs and the defendant. The result was that the plaintiffs accepted $105,000 as the correct balance which the defendant was prepared to give - albeit with some reluctance. That is precisely what was recorded in the terms of Exh.15. The 1st plaintiff in evidence says that he was satisfied with the payment of $105,000 - as a compromise. On the balance of probability I do not find that the plaintiffs have made out their claim nor do I find that the defendant has made out his counterclaim. For these reasons the plaintiffs' claim is dismissed, so is the defendant's counterclaim.
Representation: A.A. Hoosen (H.H. Lau & Co.,) for plaintiffs N.F.F. Pirie (Raymond Tang & Co.,) for defendant |