Tai Shu Chuen v. Yip Wing Hong

IN THE DISRTICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4557 OF 2001

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Coram: His Honour Judge L. Chan in Court

Dates of Hearing: 19-21 May 2004, 24-25 May 2004, 28 May 2004 and 2 June 2004

Date of Handing Down Judgment: 13 September 2004

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J U D G M E N T

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1.The plaintiff sues the defendant for two sums of HK$205,000 and $240,000.  For the first sum, the plaintiff also relies on a dishonoured cheque dated 20^th February, 2001 drawn by the defendant on the Belgian Bank and payable to the plaintiff.  It was presented for payment on 21^st February, 2001 and dishonoured on 22^nd February, 2001 for insufficient funds.

2.The plaintiff pleads that in about November, 2000, the defendant agreed to successfully apply for the plaintiff an All China vehicle licence issued by the Mainland authority in place of a Guangdong vehicle licence then used by the plaintiff.  The consideration was the payment by the plaintiff to the defendant of HK$105,000 in addition to two sums of HK$205,000 and HK$240,000 previously paid by the plaintiff in November, 1999 and May, 2000 respectively.  The plaintiff further pleads that the defendant has failed to apply for or procure the All China licence for the plaintiff’s use and in about early February, 2001 agreed to return to the plaintiff the total sum of HK$445,000 previously paid.  The defendant agreed to pay the said sum by two installments of HK$205,000 and HK$240,000.  The first sum was to be paid immediately and the defendant issued the plaintiff a cheque for the same.  However, the amount of the cheque was wrongly written and the defendant replaced it with the cheque referred to above.  The second sum was to be paid within 3 months thereafter.  The said cheque was dishonoured for insufficient funds and the defendant had not paid any money to the plaintiff.  Hence, the plaintiff’s claims herein.

3.The defendant disputes the claims.  He denies that he has ever received from the plaintiff the said sum of HK$445,000.  He admits of having received from the plaintiff a sum of HK$240,000 by a cheque.  But he pleads that this sum was the rental payable by the plaintiff to the defendant’s employer for the leasing of a Guangdong vehicle licence by the defendant’s employer to the plaintiff and other charges and expenses relating to the leasing.  He also denies that he has ever agreed to apply on behalf of the plaintiff for or procure for his use an All China vehicle licence in place of the Guangdong licence.  Regarding the cheque for HK$205,000 which was dishonoured, he said this cheque was issued by him under duress of the plaintiff and the plaintiff’s threat to his personal safety.  There was thus no consideration for the cheque and the same was not payable. 

4.I should mention that the plaintiff’s case is pleaded in a re-amendment of the statement of claim and the re-amendment was sought and allowed on the first day of the trial.  However, the re-amendment merely brought the statement of claim in line with the plaintiff’s story as disclosed in his affirmation filed on 28^th Dec., 2002 and his witness statement filed on 11^th Nov., 2003.  The defendant had in fact dealt with these allegations.  He did so in his defence and his various witness statements and the witness statements he filed for his witnesses.  He was also given leave to re-amend his defence to answer the re-amendment though he put in a new defence.  

The plaintiff’s evidence

PW1-the plaintiff Tai Shu Chuen

5.The plaintiff had a computer operated embroidery factory in Shenzhen.  He also had an office in Hong Kong.  He had to travel between Hong Kong and Shenzhen frequently.  He is a native of Fujian.  He said that he came to know the defendant in early 1999.  The defendant’s vehicle had a Hong Kong vehicle licence as well as a Chinese vehicle licence.  He could therefore drive across the Huanggang Port from Hong Kong to the Mainland or vice versa.  He was then providing a passenger transportation service between the Mainland and Hong Kong through the Huanggang Port.  The plaintiff and his staff had used his service regularly.  He charged HK$500 for each trip either way. 

6.At the end of 1999, the plaintiff told the defendant that he wanted a similar Chinese vehicle licence so that he could also drive across the boarder into the Mainland.  The defendant offered to sell his Chinese licence or more exactly the right to use it to the plaintiff.  This licence only permitted the vehicle to travel up to Dongguan and not beyond.  The parties then agreed that the defendant would sell the plaintiff his Chinese licence to the plaintiff at HK$445,000.  This sum was to be paid by the plaintiff to the defendant in two installments of HK$205,000 and HK$240,000. 

7.The defendant then told the plaintiff to purchase a new car for affixing the Chinese licence and the plaintiff duly procured his company Solar Sheen Development Ltd. to buy a brand new Mercedes Benz model S500 through a car dealer.  The price for this car was HK$1,220,000 or HK$1,287,605 inclusive of insurance and licence.  The responsible person of the dealer was one Ah Fai. 

8.The defendant told him that the new car should be registered in the defendant’s name so that the Chinese licence could be transferred to it.  In order to protect the plaintiff’s interest, Ah Fai suggested that Solar Sheen and the defendant should enter into an agreement providing that the car belonged to Solar Sheen despite the fact that it was registered in the defendant’s name.  The agreement was drafted by Ah Fai and it stated that because the vehicle of registration number FD6818 had to go between Hong Kong and the Mainland, therefore the defendant’s name was borrowed as the registered owner.  However, the actual owner of everything about the car including the number of the licence plate belonged to Solar Sheen.  The agreement further states that all penalty tickets for contravention of the law and all matters involving legal responsibility had nothing to do with the defendant.  The agreement was signed by the plaintiff on behalf of Solar Sheen and the defendant.  It was also witnessed by Ah Fai whose full name was So Ka Fai. 

9.The number of the Hong Kong vehicle licence of this new car was FD6818.  This licence number used to be owned by the defendant.  The plaintiff said that when he was dealing with his purchase of the new car through Ah Fai, the term of this licence number was about to expire in a few days time.  The defendant then told Ah Fai to renew the term with the Transport Department.  He then gave the licence number to the plaintiff as a gift for use as the licence number of the new car. 

10.The procedure for transfer of the defendant’s Chinese vehicle licence was completed sometime in the middle of April, 2000.  The number of the Chinese vehicle licence was 02-63901 and only specified drivers could drive it across the boarder.  The plaintiff and his wife were specified as drivers.    

11.The HK$445,000 for buying the Chinese licence was paid in two installments.  The first installment of HK$205,000 was paid by the plaintiff in cash to the defendant in Dec., 1999 at the plaintiff’s home.  The defendant gave him a receipt for it.  The second installment of HK$240,000 was paid by a cheque dated 1/5/2000 drawn by the plaintiff’s on his bank a/c in favour of the defendant.  This cheque was cleared on 2/5/2000. 

12.In about Nov., 2000, the defendant suggested to the plaintiff that he could apply for the plaintiff an All China vehicle licence so that the plaintiff could go back to his native province Fujian more often.  The defendant knew that the plaintiff was a native of Fujian as at the time when he provided him with transportation service the Huanggang Port, he knew that there was a vehicle of Fujian registration no. C 55555 waiting to take the plaintiff to Fujian.  The defendant suggested that the plaintiff could change to an All China licence at the additional cost of HK$105,000 and the plaintiff agreed.  This sum was payable when the new licence was available.  The defendant then told the plaintiff to drive his car back to Hong Kong so as to process the application for the All China licence and the plaintiff duly did so.  The registered owner of the car in the records of the Hong Kong Transport Department was also changed from the defendant to Solar Sheen. 

13.However, the defendant failed to procure the All China licence for the plaintiff despite repeated demands by the plaintiff.  The defendant was also avoiding the plaintiff’s phone calls and the plaintiff could only contact him at times.  The plaintiff then asked the defendant to restore the previous Chinese vehicle licence to the plaintiff’s car as it belonged to the plaintiff.  But the defendant failed to do so as he had already transferred the licence to his own vehicle and used it in his business of transporting passengers across the boarder.  The plaintiff then asked him to repay the HK$445,000 and, after some discussions, the defendant agreed.  The first installment was at HK$205,000 and the defendant gave the plaintiff a cheque for it.  The defendant also took back the receipt he previously gave the plaintiff for the HK$205,000 cash he received in Dec. 1999.  The 2^nd installment was to be paid 3 months and the defendant would give the plaintiff another cheque in due course. 

14.The plaintiff could not read any English save a few alphabets.  The cheque was written in English.  After examining this cheque with the help of a friend, he knew that there was a disparity between the words and the figure.  He also confirmed it with the staff of the bank that the cheque with the disparity could not be honoured.  He therefore did not take it to the bank.  He then phoned the defendant who promised to replace it, but the defendant again avoided him. 

15.On 19^th Feb., 01, he went to the Huanggang Port sometime after 6:00 p.m. and had tea there with a friend at a restaurant inside the restricted area.  He said the defendant had previously asked him to wait there at about 8:00 p.m. and the defendant would look for him.  At about 8:00 p.m., the defendant found him at the restaurant and gave him a new cheque for HK$205,000 in exchange for the previous defective cheque.  But this cheque was dishonoured and the bank told him to contact the defendant.  The defendant again avoided him. 

16.It is the defendant’s allegation that the HK$240,000 he paid the defendant was for three purposes, namely HK$160,000 for 8 months rental, HK$30,000 for tax refund upon scrapping his old Volvo and the purchase of the Mercedes, HK$30,000 for purchase of his licence plate number FD6818 and HK$20,000 as expenses for processing the application for transfer of the Chinese licence.  The plaintiff said that this cheque was not crossed and had been handed over to the defendant.  He denied that the defendant had ever mentioned about the monthly rental for the Chinese licence at HK$20,000 per month or at all.  The plaintiff also had not heard about the Dongguan Lee Hang Braid and Garment Ltd. Co. (“Dongguan Lee Hang”).  Since he already had a Chinese vehicle of Fujian registration that could go round the country, he would not have agreed to lease the defendant’s Chinese licence at HK$20,000 per month.  He also denied that there was ever any mention of transfer of licence processing fee at HK$20,000 or that he had to pay HK$30,000 for the defendant’s licence plate number FD 6818. 

17.For the tax refund, the plaintiff agreed that it was not included in the HK$445,000 but that the refund was to be paid by the Govt. to the defendant direct and it would not have been given to the plaintiff or his company.  He also said that he had given a loan of HK$30,000 to the defendant on 31/3/2000 on account of this and the defendant had promised to repay him the loan upon receipt of the tax refund of HK$30,000 from the Government.  He produced a book of cheque studs at the beginning of the trial which contained a stud recording that a cheque no. 525783 for HK$30,000 and dated 31^st March, 2000 had been given to the defendant.  He also produced a bank statement in the morning of the second day showing that this cheque was honoured on 31^st March.  At the end of the third day, he also produced a copy of the cheque no. 525783 which his lawyers had just obtained from the Hang Seng Bank Ltd.  The copy cheque showed the number of a bank account into which the HK$30,000 had been credited.  A deposit of HK$50.00 by his lawyers into this account at the Bank of China produced a deposit slip showing that the account was in the defendant’s name. 

18.The plaintiff had denied the defendant’s case that he had at the Customs pavilion snatched the defendant’s Customs visa book.  He said the area was a restricted area of the Central Government and there were many police officers, Customs officers and security people engaged by the Public Security Bureau (“PSB”) to manage the area.  The police and Customs officers all had pistols.  There was also close circuit camera system monitoring the activities in the area.  He also said that no one from the Dongguan Lee Hang had contacted him at any time.  He also denied another allegation by the defendant that he had robbed the defendant sometime in September, 2001.  He also said that he had not been contacted by the PSB or the Hong Kong Police in relation to the defendant’s allegation of robbery. 

19.He also said that after the defendant had withdrawn the Chinese licence from his vehicle, he had purchased another Chinese licence from another source for use with his car FD6818.  This Chinese licence allowed him to go through the whole of Guangdong and he had paid HK$520,000 for it.  He bought it in about the middle of 2003.  Since he had purchased it, he had a permanent right to use it subject to payment of renewal fees charged by the Chinese Government. 

20.In cross-examination, he said before buying the Chinese licence from the defendant, the defendant had at the costs of HK$500 per journey taken him from his home or office to the Huanggang Port for more than 20 occasions.  He maintained that the defendant had agreed to sell the Chinese licence to him and he did not know who owned the Chinese licence that was used by the defendant in his car.  He disagreed that the tax refund for scrapping the defendant’s old Volvo had been credited to him by deduction of his first registration tax when he purchased the new car.  Her maintained that he had nothing to do with the tax refund.  The ownership of his Mercedes Benz was changed from the defendant to Solar Sheen after the expiry of 1 year and 1 day from its first registration.  Since the transfer was outside this period, there was no need for the defendant to pay back to the Government the tax refund given for the scrapping of the old Volvo.

21.The plaintiff also denied that he was familiar with any Customs officer of the Mainland Government or that he knew such an Officer surnamed Tam. 

22.He was referred to paragraph 10 of his witness statement.  He said in that paragraph that the defendant had at the beginning of February, 2001 issued him a cheque for HK$205,000, but the amount of payment in the cheque had a discrepancy between the words and the figure.  He therefore looked for the defendant again and asked him to replace the cheque.  However, the defendant began avoiding him with different excuses everyday.  Her had no other means but to go to Huanggang Port hoping to bump into him.  He knew that the defendant had to make money by carrying passengers, he would definitely be able to bump into him.  When being cross-examined on this, he said he was referring to his attempts to bump into the defendant on about 15^th or 16^th and not on the 19^th.  He said the defendant was avoiding him at that time.  He had to call the defendant at different phone numbers like his Hong Kong Mobile number, Mainland mobile number and his home phone number.  He could at times contact the defendant on the phone and the defendant would tell him to wait for the defendant at a particular time and place, but the defendant would not turn up.  For the meeting on the 19^th, he said the defendant had told him that the defendant would go to Huanggang Port at 8:00 p.m. that evening and told him to go there.  He then described in paragraph 11 on how he met the defendant on 19^th February, 2001.  (However, it is noted that he had not stated in paragraph 11 that he had an appointment with the defendant to meet him there.  When paragraphs 10 and 11 are read together, the meaning conveyed is that the plaintiff had gone to the Huanggang Port hoping to bump into the defendant and he did bump into the defendant at about 8:00 p.m. in the evening of 19^th February, 2001.) 

23.He denied having snatched the defendant’s documents of identity and Customs documents at the Customs pavilion.  He said he could not have approached the pavilion unless he was driving a vehicle bearing both Hong Kong and Chinese vehicle licenses.  The defendant put to him that when the defendant had parked his car outside the toilet which was about several vehicles’ length behind the Customs pavilion, he had placed a paper knife against the defendant’s neck and threatened the defendant that if the defendant did not write him a cheque for HK$205,000, he would kill the defendant.  He denied this allegation and repeated that there was close circuit camera monitoring the restricted area.  (The defendant also agreed that there was close circuit camera monitoring the area.)  He also denied that he had repeatedly threatened the defendant’s family since 20^th February, 2001.  On the renewal of insurance for the Mainland, he said he had in accordance with the direction of the defendant taken his vehicle for examination and renewed the insurance for the vehicle’s use in the Mainland.  He said this to boast his point that he was contemplating the continuous use of the Chinese licence on his car.

24.The plaintiff also said that he had less than 2 years education in the Mainland and he could only read some simplified Chinese characters.  He could not read the traditional characters used in Hong Kong or English.  When he was referred to his witness statement in cross-examination, he could not read the traditional characters and had to asked for assistance. 

25.In re-examination, he was referred to the dispute with the defendant at the Huanggang Port in paragraph 11 of his witness statement, he said he had argued with the defendant on whether the replacement cheque for HK$205,000 should be dated 19^th or 21^st February and they eventually agreed that the date should be 20^th.  He had also said in cross-examination that they had a dispute on whether the cheque should be exchanged simultaneous or he should give his wrongly worded cheque to the defendantfirst before getting the new cheque from the defendant. 

26.He also said in re-examination that before buying the Chinese license from the defendant, he had used the defendant’s service for going to and from Huanggang at HK$500 per journey.  At times, he would go to the Mainland for up to 6 times a month and would patronize the defendant for up to about 12 trips in that month.  At other times, he would only go to the Mainland for 1 to 2 times and would patronize the defendant for 2 to 4 trips.  After he had purchased the defendant’s Chinese licence, he had in the 7 to 8 months since middle of April, 2000 drove to the Mainland for about 40 odd times.  On the average, he had driven to the Mainland for about 6 times a month or 12 journeys to and fro.  If the rental for the Chinese licence was at HK$20,000 per month, the average costs would be nearly HK$1,000 per journey or nearly HK$2,000 for each trip to the Mainland and return.  He also said that he had heard that the sale or lease of a Chinese licence was against the law of the Mainland.  

The defendant’s evidence

DW1-the defendant Yip Wing Hong

27.Before dealing with the evidence of the defendant, it is useful to set out what he has said in his various Chinese witness statements and report to the PSB.  There are a report dated 23^rd September, 2003 purportedly for the Huanggang Port Branch Office of the Shenzhen City PSB (“the Huanggang PSB”), an undated witness statement filed with this court on 17^th October, 2003 and a further witness statement dated 23^rd December, 2003 and filed with this court on the same date. 

Report dated 23^rd September, 2003

28.This report was enclosed in the bundle of documents that accompanied his witness statement filed on 17^th October, 2003.  In the report, he said that in the evening of 19^th February, 2001 at about 8:00 p.m. at the Customs outbound driveway at Huanggang Port, he was robbed and blackmailed by the plaintiff.  He had then reported this matter to the Huanggang PSB, but the officer handling the case treated it as a financial dispute.  Owing to this, he could only treat it as a case of loss of documents.  He further said that he had at that time considered that he should not bring trouble to the PSB and embraced the idea of mediation to end the dispute.  However, the plaintiff continued to threaten him and robbed him of his money.  Therefore, in the circumstances where his personal safety was being threatened, he had no choice but to report the matter to the Huanggang PSB hoping that this office would investigate and handle the matter according to law. 

29.In the report, he also referred to the background of the matter.  He said he had been employed as a driver by one Lee Hang Braid Factory Ltd. (“Lee Hang”) to drive between Hong Kong and the Mainland.  In the middle of December, 1999, the plaintiff had asked him to lease to the plaintiff the Chinese licence then affixed to the vehicle driven by him.  His employer, after receiving his report, asked for a monthly rental of HK$20,000 (or a total of HK$240,000 per annum), HK$20,000 as fees for processing the licence, HK$30,000 for refund of tax for preferential treatment on first registration tax in return for scrapping of an old vehicle and purchase of a new vehicle, HK$30,000 for a licence plate no. FD 6818 (including the borrowing of name as registered owner of vehicle) or a total of HK$320,000.  On 19^th April, 2000, he obtained the documentation permitting the affixing of Chinese licence to the plaintiff’s car with the plaintiff and his wife as the permitted drivers.  He then gave the same to the plaintiff and asked the plaintiff to pay the money for use of the licence, but the plaintiff deliberately gave him a cheque with an incorrect signature and his company could not get payment on it.  His employer then instructed him to demand payment from the plaintiff and he repeatedly warned the plaintiff that payment should be made.  Eventually the plaintiff on 1^st May, 2000 gave him another cheque for HK$240,000 to pay for the rental, but the transfer of licence processing fee, the tax refund and the money for the licence plate no. FD 6818 totaling HK$80,000 was outstanding.  When the hiring reached the beginning of December, 2000, the rental accrued was at HK$160,000, in addition there was an outstanding sum of HK$80,000.  The sum of HK$240,000 already paid was thus exhausted.  His employer therefore instructed him to demand the plaintiff to pay the outstanding HK$80,000 and to pay the rental for the next term in advance, but the plaintiff delayed the payment, his employer therefore determined the leasing of the Chinese licence, transferred the licence back to the company and affixed it to a 7 seater vehicle of his company of registration no. DF 8178 and reverted it for the company’s use. 

30.The defendant also on 12^th December, 2000 transferred the ownership of DF 6818 back to the plaintiff’s company Solar Sheen.  After that, he demanded the plaintiff to pay the said HK$80,000 and told the plaintiff that after payment, the plaintiff could continue using the Chinese licence for another four months (or a total of a year).  However, the plaintiff had no intent to pay, therefore his company took measures to stop the plaintiff from using the licence. 

31.The report then dealt with the events after the termination of the leasing.  The defendant said in the evening of 19^th February, 2001 at about 8:00 p.m., he was carrying 4 passengers from Changon of Dongguan County to Kowloon and the Hong Kong International Airport and Kowloon Huanggang Port.  When he was at the Customs pavilion on the outbound driveway and was handing over his Customs visa book to the Customs officer, the plaintiff suddenly dashed out of the Customs control area and forcibly snatched from the hand of the Customs officer his Customs visa book.  A Customs officer surnamed Tam then came out from the pavilion and told him to reverse his car to the left of the driveway.  The plaintiff then rushed to the side of the driver’s seat of his car and kicked at the right side door.  The plaintiff also pulled him out of the car, attempted to snatch his car key and took away from the driver’s seat his Homeland Return Permit, driver’s visa and annexure, Hong Kong Entry Permit, Plant and Animal Quarantine Visa and other documents including the identity documents of the 4 passengers.  The plaintiff then shouted at the 4 passengers that they could not leave the boarder as he had already requested the Customs people to help him stop them from leaving the boarder.  His passengers were all amazed by such behaviour.  The plaintiff then left.  He immediately dialed “110” to the PSB for help.  But the officer who took his call said that the place in question was not under the jurisdiction of that PSB Office and thus could not handle the case.  About 15 minutes later, he phoned the plaintiff.  The plaintiff then came back to the side of his car and returned to his passengers their identity documents.  The plaintiff then suddenly snatched from his car a small paper knife and pointed it at his neck and demanded him to issue a cheque for HK$205,000 to redeem his document(s) of identity, failing which the plaintiff would take away his life.  He, in order to protect the safety of the 4 passengers and to send them to Kowloon and the Hong Kong International Airport timely and was under compulsion and had no other way out, wrote a Belgium Bank cheque for HK$205,000 and asked the plaintiff to immediately return the documentation.  However, the plaintiff, after having obtained the cheque, ran away without returning the documents.  He therefore immediately phoned the PSB at “110” for help.  The PSB people then requested him to go to the report room personally to deal with the case.  At about 8:21 p.m., he found a friend Mr. Chow Kwok Wing through Chow’s mobile phone and Chow helped him take the 4 passengers back to Hong Kong.  He went to the report room of the PSB at 11:00 p.m. that night to make a report of the matter but was told to come back in the next morning.  He went there in the morning of 20^th February, 2001 and made a report.  In that morning, he also telephoned the Belgium Bank to stop payment of the cheque. 

32.He then said that for over two years, the plaintiff, who had not been able to obtain from him the sum of HK$205,000, had repeatedly threatened him and robbed him.  The plaintiff had phoned his home 8 times and threatened that if he did not pay the money, the plaintiff would ask someone to beat him to death.  Others (of his family) should also be careful of the consequence when going out.  In October, 2002 when he was driving pass the Huanggang telephone exchange building, the plaintiff dashed forward and intercepted him.  The plaintiff said that if he did not pay HK$445,000, the plaintiff would engage someone to chop off his leg, if the plaintiff should fail to do that, the plaintiff would forgo his surname Tai.  In about February to March, 2003, he bumped into the plaintiff in the toilet on the right of the inbound driveway at Huanggang Port.  The plaintiff wanted to hit him, but his deputy driver surnamed Yip immediately stopped the plaintiff.  The plaintiff then threatened the defendant that if the defendant did not pay the plaintiff money, the plaintiff would destroy him, the plaintiff would also place dangerous drugs in his car to cause his imprisonment for life.  In about May, 2003 when he was driving from the Huanggang Port into Shenzhen City, he was followed by the plaintiff on a road near the Port Building.  The plaintiff intercepted him at a road junction.  The plaintiff then demanded money from him and wanted him to hand over his wallet.  The plaintiff took away the RMB2,200 from his wallet without even giving him a receipt.  On 9^th May, 2003 at about 5:20 p.m. to 5:45 p.m. when he was repairing his car at the Huanggang Port, the plaintiff bumped into him and robbed RMB1,100 from him.  In about August, 2003, the plaintiff met him outside the entrance to the Inbound Hall of the Huanggang Port and demanded him to drive his car to follow the plaintiff’s car.  He was led to the place outside the toilet.  The plaintiff then came over and robbed him RMB2,200.  Before leaving, the plaintiff said to him that on the next occasion when the plaintiff should meet him, he should give the plaintiff HK$10,000, failing which, the plaintiff would ask someone to break one of his legs. 

Undated witness statement filed on 17^th October, 2003

33.He said similar things in this witness statement as in his report of 23^rd September, 2003.  In addition, he said that he had an old Volvo bearing registration no. DF 8178 which had to be scrapped.  If an old car was scrapped and a new car was bought, the Hong Kong Government would give a tax refund of HK$30,000.  Thus when he (scrapped his old Volvo and then) bought the new car of registration no. FD 6818 (which he did on behalf of the plaintiff), he was entitled to a tax refund of HK$30,000.  But the plaintiff had defrauded him of this sum.  Regarding the registration plate of no. FD 6818, he said the plaintiff had agreed to return it to him after a year, otherwise the plaintiff’s company Solar Sheen would buy it from him at HK$30,000.  He also said that after he had given the documents for the Chinese licence to the plaintiff on 19^th April, 2000, the plaintiff gave him a cheque with an incorrect signature and he could not get paid.  His company said that he had been cheated by the plaintiff and held him responsible for the matter.  He then told the plaintiff that the plaintiff had cheated him and he would immediately stop the plaintiff’s use of the Chinese licence.  He also said that after repeated warnings, the plaintiff on 1^st May, 2000 gave him another cheque for HK$240,000 to pay for the rental and the licence processing fee.  In early December, 2000 when the plaintiff failed to pay the rental in advance, his company asked him to terminate the leasing and transfer the licence to the 7 seater vehicle of his company DF 8178 and revert it for the company’s use.  After he had transferred the ownership of the Mercedes with registration FD 6818 back to Solar Sheen, he asked the plaintiff for the return of the licence plate no. FD 6818 and the tax refund of HK$30,000, but the plaintiff had no intent of complying with his request.  Therefore he appropriated the HK$240,000 for 8 months rental at HK$160,000, the HK$20,000 for processing the licence, HK$30,000 for purchase of the licence plate FD 6818 and borrowing his name as the registered owner of the new car and HK$30,000 tax refund. 

34.On the event in the evening of 19^th February, 2001, it appeared that he had copied the same story from his report of 23^rd September, 2003 with some embellishment except that he had not repeated the allegation that the plaintiff had run away with the documents of identity of his 4 passengers and returning the same to them when he came back afterwards. 

Further witness statement filed on 23^rd December, 2003

35.In this statement, the defendant added that the plaintiff had declined his suggestion for a written agreement on the leasing of the Chinese licence on the ground that such was unnecessary.  On the termination of the leasing, he added that his company terminated the arrangement not just because of the plaintiff’s failure to pay the rental that should have been paid, but also because of the plaintiff’s illegal smuggling activities.  On the incident in the evening of 19^th February, 2001, he again copied the same story from his report of 23^rd September, 2003 with some embellishment.  He also restored the allegation that the plaintiff had run away with the documents of identity of his 4 passengers and returning the same to them when he came back afterwards.  He also added that since he did not owe the plaintiff any money, when he wrote the cheque of HK$205,000, he deliberately wrote the surname of the plaintiff in a wrong manner making it looked like the Chinese character “two”. 

36.He also said that when he reported the robbery to the PSB, the officer handling the case told him that in order to facilitate his early return to Hong Kong, he should only report loss of his documents of identity.  When he advertised about the loss of documents, the staff of the Shenzhen SEZ Daily also did not let him state that he had been robbed at the Customs pavilion on the ground that that would affect the image of the Customs. 

37.On the wrongful acts of the plaintiff after 19^th February, 2001, he added that on 29^th September, 2003 at about 1:20 p.m., he was intercepted by the plaintiff on the road next to the telephone exchange building of Huanggang Port.  The plaintiff then demanded money from him and used the left hand to hit the right of his face.  The plaintiff then snatched his wallet and took from it RMB1,000 and HK$5,000.  The plaintiff also took out his tape recorder from his trouser pocket, crushed it on the ground, took the audiotape from it and drove away.  In the evening of 21^st November, 2003 at about 7:00 p.m., he and his boss Mr. Lo were at the Haibin Plaza of Shenzhen.  The plaintiff suddenly drove FD 6818 at high speed towards him.  He immediately avoided the plaintiff who then said that he would run him down and kill him.  The plaintiff then drove away and he reported the matter to the PSB at phone no. “110”.  After 10 minutes, the plaintiff drove back trying to attack him.  He reported to phone no. “110” again.  Mr. Lo then told him to leave and he immediately left. 

The defendant’s oral evidence

38.The defendant said that in about the end of 1999, he came to know a lady surnamed Lau when he bought a car from her.  They then became friends.  He had given lifts to Lau from Hong Kong to Huanggang Port.  He said he just did it incidentally as he himself was on the way to the Mainland.  After he had provided such free service to Lau for several times, the plaintiff also joined in to have benefit of his service.  He had provided Lau and the plaintiff about 10 to 20 lifts and had never charged Lau or the plaintiff any money or any reimbursement for the expenses including tunnel expenses.

39.After giving the plaintiff a few lifts, the plaintiff said that the defendant’s employer was not using the car frequently and suggested to lease the Chinese vehicular licence from his employer.  The plaintiff made this request several times but the defendant declined him.  Later the plaintiff suggested to lease the Chinese licence at a rental of HK$20,000 per month.  But the defendant’s boss Mr. Lo declined as there were risks that the plaintiff could use the Chinese licence for illegal purpose.  Lau had also suggested to the defendant that if the defendant’s company had no use of the Chinese licence, it could be leased to the plaintiff.  Then his boss Lo said that if the plaintiff wanted to use the Chinese licence, he could offer terms.  The defendant thus told the plaintiff that if he wanted to use the Chinese licence, he had to pay for the processing fees for the transfer of the licence.  The plaintiff agreed and said that he needed the licence urgently for going into the Mainland, but he refused to sign any agreement.  The defendant then talked to his boss who asked for a deposit.  But the plaintiff refused to pay any.  He instead said that he had lots of money and the defendant should trust him.  He told the defendant to go ahead with the application with haste.  The defendant then went ahead trusting that the plaintiff would pay.  The Chinese licence at that time was affixed on the defendant’s old Volvo of registration no. DF 8178.  The plaintiff then said he would buy a new car.  But the defendant told him that the new car had to be registered in the defendant’s name before the Guangdong PSB would allow the Chinese licence to be transferred from his old car to the new car.  The defendant said he had told the plaintiff that after the Chinese licence had been transferred to his new car, he could change the particulars of ownership in Hong Kong.

40.The defendant also said that he had an old licence plate number FD 6818 (which had been used for another vehicle and not the old Volvo) and the plaintiff liked this number for auspiciousness.  He told the plaintiff that the number worth HK$30,000 and the plaintiff agreed to buy it from him at this price.  The plaintiff also agreed to pay him back the tax refund at HK$30,000 and the licence processing fee at HK$20,000.  It seemed that the defendant had asked the plaintiff repeatedly for a deposit, but the plaintiff always declined and asked the defendant to trust him and the defendant did.  The defendant however had not spelt out how much deposit he had asked from the plaintiff. 

41.The transfer of the Chinese licence to the plaintiff’s car was approved on 17^th April, 2000 and the plaintiff from then on used the licence to drive into the Mainland.  However, the plaintiff still did not make any payment.  In the latter part of April, he told the plaintiff that he had to account to his employer and the plaintiff had to sign an agreement.  But by the end of April, he discovered that the plaintiff did not live up to his words and made no payment.  He therefore told the plaintiff that if no payment was made, his employer would blame him and he could not help the plaintiff.  Eventually on either the 29^th or 30^th April, the plaintiff gave him a cash cheque.  But the cheque could not be cashed and the bank told him that the plaintiff’s signature was not right.  When he relayed this to the plaintiff, the plaintiff told him that the plaintiff had done it to fool him.  He then asked the plaintiff what he could do as his employer had paid the HK$20,000 for processing the transfer of the licence and the plaintiff was already using the licence.  He also asked the plaintiff about the tax refund of HK$30,000, but the plaintiff told him to approach Ah Fai of the car dealer.  He then reported to his employer that the cheque was not cashed and his employer said that if the cheque was not cashed within a day or two, action would be taken.  Then on 1^st May, 2000, he got a new cheque from the plaintiff for HK$240,000 and he returned the old cheque to him.  He then cashed the cheque (on 2^nd May) and told his employer of the receipt of this money.  He also told his employer that it was for a year’s rental but that the tax refund, the transfer of licence processing fee and the price for the licence plate FD 6818 were outstanding and the plaintiff should have paid HK$320,000.  His employer told him to go after the plaintiff.  On the tax refund, the plaintiff told him to go after Ah Fai, but Ah Fai said that the tax refund had already been credited to the plaintiff and that he had been cheated by the plaintiff.  He also thought that he had been cheated.  He then told the plaintiff that the money the plaintiff had paid would be used up in a few months and if the plaintiff did not make further payment, he would take appropriate action at the appropriate time. 

42.He then said that he had discovered that the plaintiff had engaged in unusual activities with the Chinese Customs and Port Public Security people.  He said he had also been warned by the Customs people that the plaintiff was contravening the law.  He then talked to the plaintiff about this but was just ignored.  The plaintiff then got into some trouble in July or August and was detained by the authorities.  It should be noted that the first time that the defendant had alleged that the plaintiff was involved in smuggling activities was in his last statement of 23^rd December, 2003.  He alleged in that statement that his employer had terminated the leasing arrangement with the plaintiff because the plaintiff had breached the promise and did not pay the fees that were due and had committed illegal smuggling activities.  However, he never alleged in his report and statements that the plaintiff had been involved in unusual activities with the Chinese Customs and Public Security people.  It can also be seen below that the core reason he alleged for the plaintiff to extract money from him was the plaintiff’s smuggling activities.  But he had not mentioned them at all in his previous statements and his report to the PSB. 

43.He further said that in about November or December, 2000, he told the plaintiff that the rental paid had been exhausted and the plaintiff should pay rent.  However, the plaintiff showed no sincerity to pay despite his agreement with the defendant’s calculation of rental.  The defendant’s employer then told the defendant that the leasing had to be renewed, but the defendant said that he would terminate it.  His employer left it to him to decide.  After 17^th December, 2000, he applied for the transfer of the Chinese licence from the plaintiff’s car to a 7 seater of his employer.  But the plaintiff then asked him for compensation for the plaintiff’s loss because the plaintiff was unable to continue with his smuggling activities without the Chinese licence.

44.In the middle of December, 2000, the defendant also signed documents to surrender the ownership of the plaintiff’s car to the plaintiff’s company Solar Sheen.  The plaintiff then asked him to find another Chinese licence for the plaintiff, but he declined the request.  The plaintiff then demanded compensation from him for the plaintiff’s loss from legal and illegal activities.  He then reminded the plaintiff that rental had not been paid and the plaintiff should not have engaged in illegal activities. 

45.In the evening of 19^th February, 2001, he gave a lift to 4 persons from Changon, Dongguan County to the Hong Kong International Airport at the request of a friend who was one of the four.  Two of the passengers were expatriates.  He was driving the 7 seater of his employer.  The Chinese licence on this car was the one that had been affixed on the plaintiff’s car and it had been transferred from the plaintiff’s car.  He again provided the lift to these 4 passengers free of charge except that his friend would reimburse him of the highway fees.  He said he did it free because he was on his way back to Hong Kong and he gave the passengers an incidental lift. 

46.At about 8:00 p.m., he arrived at the Huanggang Port restricted area and drove up to the Customs pavilion.  He then handed over his Customs visa book to the Customs officer for inspection.  But the plaintiff suddenly dashed out from inside the pavilion and snatched the book from him.  The plaintiff then shouted fiercely that he had already bribed the officers of the Customs and the PSB and the defendant could not leave the boarder.  The plaintiff demanded HK$200,000 compensation from him as he had taken the Chinese licence away from the plaintiff’s car and the plaintiff could not carry on with his smuggling activities.  The plaintiff said that his loss was at HK$200,000.  The plaintiff also demanded HK$5,000 from him for the plaintiff to patronize the prostitutes and this was to soothe the plaintiff’s anger.  The plaintiff further said that he could not leave as the plaintiff had his document of identity.  He then reversed his car for some distance at the request of a Customs officer Tam.  The plaintiff then came forward and kicked at his car fiercely and pulled him out.  The plaintiff then snatched the documents of identity of his 4 passengers and said that they could not leave the boarder.  The passengers were amazed at the plaintiff’s behaviour.  The plaintiff then ran away in the direction of the Mainland.  He immediately called “110” and reported to the PSB through his mobile phone that he and his passengers had been robbed inside the restricted area of the Huanggang Port and the robber was running towards the Mainland with their documents.  He asked for help and the Bureau promised to send someone along.  Then he phoned the plaintiff’s mobile phone and told him that he had reported the matter to the PSB and that if the plaintiff should return the documents, the report would be cancelled, but if the plaintiff should fail to come back within 3 minutes, he would not give the plaintiff any chance.  He also said to the plaintiff that he did not owe the plaintiff any money and asked why did the plaintiff take away his document.

47.After a while, the plaintiff came back and returned the documents of identity to the 4 passengers but kept his Customs visa book and other documents that he needed for crossing the boarder.  He again told the plaintiff that he did not owe the plaintiff any money and there was no reason for any payment to be made to the plaintiff.  However, the plaintiff said that he had taken the Chinese licence away from the plaintiff’s car and the plaintiff could not carry on with his smuggling.  The plaintiff thus demanded from him HK$200,000 compensation for such loss and HK$5,000 for patronizing the prostitutes. 

48.He then reversed his car further to avoid congestion.  The plaintiff then dragged him out of his car and grabbed his paper knife which was placed at the car door next to the driver’s seat.  The plaintiff then dragged him to the rear of his car, pointed the knife at his neck with his right hand, held him against the car, searched through his wallet and documentation with his left hand and then found a blank cheque of his own company Tin Loong Transportation which had already been signed by him.  He said in court that he had kept this cheque with a view to use it to pay telephone charges.  He also said that it was his habit to sign a cheque first without filling in the particulars though he was aware of the risk in doing so.  Then the plaintiff demanded that he should write HK$205,000 on the cheque which was the total of the HK$200,000 compensation and HK$5,000 prostitution money.  The plaintiff also said that he would get the money first before returning the documents to the defendant.  Since no PSB officer had appeared, he thought he had to pacify the plaintiff’s anger as the situation was dangerous.  So he wrote the cheque for the plaintiff under duress, but he deliberately wrote the plaintiff’s surname in an unrecognizable form.  Then the plaintiff took the cheque and left, repeating his words that he would only return the documents to the defendant after getting the money. 

49.After he had given the cheque to the plaintiff, someone from the Shenzhen PSB phoned him and asked for his location.  After he had revealed his whereabouts, this person of the Bureau said that the place he was at was not within their jurisdiction and declined assistance.  He was told to seek help from the Huanggang PSB.  He then asked a friend Chow Kwok Wing to help him take the passengers across the boarder.  He had also tried to seek help from another person Lam Chi Keung for help but Lam could not provide immediate assistance to his passengers.  The Huanggang PSB then phoned him and asked him if he had made a report.  He was told to go over to their office to make a report.  But he had not had dinner yet.  So he bought some food and only went over to make the report sometime before 10:30 p.m.  He narrated the incident to the officer who received him.  He was also asked whether he knew the person involved in the incident and he recounted the arrangement of the leasing of the Chinese licence and that he had signed a cheque for the plaintiff under duress.  The officer made a record of what he said and told him to go back in the next morning to complete the reporting procedure as the responsible officer had gone off duty.  He was also told to phone the plaintiff and see if the plaintiff would return the documents to him.  He then used his Hong Kong mobile phone to call the plaintiff’s Hong Kong mobile phone between 11:00 p.m. to 12:00 p.m. telling him that he had reported the matter to the PSB and if the documents were returned, he would cancel the report.  However, the plaintiff repeated his claim for HK$200,000 for loss from not being able to conduct smuggling activities and HK$5,000 prostitution fees.  The plaintiff then switched off his telephone.

50.He returned to the Huanggang PSB the next morning and made a full report including the fact that the plaintiff had used a knife to force him to draw a cheque for the plaintiff, but the officer handling the case treated it as a private dispute as he was acquainted with the plaintiff and he was told to sort it out with the plaintiff.  He also phoned the Belgium Bank to stop payment of his cheque.  He then received phone calls from his wife saying that the plaintiff had threatened her by telephone that if the cheque was dishonoured, the plaintiff would harm him and his family.  On his advice, his wife then reported the matter to the police.  Two officers came and told his wife that if the plaintiff should call again, she should report the matter to the police again.  He also made a report to the Hong Kong Police at “999”.  His wife made a further report to the Tai Po Police Station on 23^rd February, 2001.  He found the situation urgent and went to the PSB on 1^st March asking to have replacement identity documents so that he could come back to Hong Kong.  But the PSB told him that if his case was one of robbery, the replacement documents of identity would only be issued after investigation had been completed.  If he wanted his documents early, he could report their loss instead of robbery.  He then accepted the suggestion of the PSB and was issued with a one off permit to cross the boarder on the same date.  The permit expired on 5^th March. 

51.He met the plaintiff in October, 2002 who told him that if he did not give the plaintiff HK$445,000, the plaintiff would arrange someone to chop off his leg.  In May, 2003, the plaintiff stopped him in Shenzhen and said that the plaintiff had suffered loss because he had taken back the Chinese licence.  Therefore the plaintiff would extract money from him every time they met.  The plaintiff also took away over RMB1,000 from him.  He also said that there were several other occasions where the plaintiff had taken money from him.  On 5^th September, 2003 at about 5:00 p.m. when he was driving his car in Huanggang, he bumped into the plaintiff who was repairing his FD 6818.  The plaintiff again took all the cash from him.  On 23^rd September, 2003, he mentioned this matter to his friends and reported it to the Huanggang PSB.  On 29^th September, 2003 at about 1:00 p.m. when he was at the junction of the Shenzhen expressway, he was intercepted by the plaintiff who threatened to beat him to death.  The plaintiff also took from him RMB1,000 and HK$5,000 and said that he should give the plaintiff HK$10,000 or HK$20,000 on the next occasion, otherwise the plaintiff would break his leg.  The plaintiff also destroyed his tape cassette recorder and took the tape before leaving.  He then reported the matter to the PSB and took a photograph of the damaged recorder.  He also referred to an occasion which happened in February to March, 2000 at Huanggang Port when he was with his fellow driver Yip Kun Keung.  Yip drove across the Customs checkpoint and he passed the Customs via the Port Inspection Building on foot.  When he came up to meet Yip, he saw the plaintiff there.  The plaintiff said that if he could not extract HK$200,000 odd from the defendant, he would destroy the defendant.  Yip told the plaintiff not to use force, but the plaintiff repeated his threat.  The incident lasted for 10 to 15 minutes.  In fact, he learnt from Yip that before his arrival, the plaintiff had already threatened Yip not to drive his car as the plaintiff would deposit dangerous drugs in it and then report it to the authorities.  Lastly at the end of 2003 when he and his boss Mr. Lo were in Haibin Plaza, Shenzhen.  The plaintiff suddenly drove very quickly towards him.  He avoided the approach.  The plaintiff said that he wanted to crush his leg.  Lo then came over and the plaintiff drove away.  He then reported the matter to the PSB, but the Bureau did not come after 20 minutes.  The plaintiff then drove back but drove away shortly thereafter. 

52.Finally in answer to questions from the court, he confirmed that the HK$240,000 the plaintiff had given him was for one year rental for the Chinese licence at HK$20,000 per month.  He also confirmed that he had started with the application for transfer of the licence to the plaintiff’s car in March, 2000 and before he had received any money or deposit from the plaintiff.  He was told by the plaintiff to trust the plaintiff and the plaintiff would pay after the application was completed.  The HK$20,000 fees and expenses incurred for processing the application for transfer had been paid by his employer.

53.In cross-examination, he confirmed that he was in the employ of Lee Hang Braid Factory Ltd. as a driver cum a courier of documents and samples.  His salary was HK$7,000 to HK$8,000 per month with HK$1,000 odd for overtime and extra duties.  However, Lee Hang did not have any car.  He thus supplied his old Volvo of registration no. DF 8178 for Lee Hang’s use.  Lee Hang’s Chinese licence was also approved by the Mainland government to be affixed on his Volvo.  But he said the fees for the application of the licence was paid by Lee Hang.  He had started working for Lee Hang since 1996.  However, Lee Hang only obtained the Chinese licence in 1997.  For the Chinese licence, he was not the only approved driver, his wife Yip Sau Lai was also an approved driver of the car bearing this licence.  After the licence had been transferred to the plaintiff’s car, he continued with his work in Lee Hang as a courier.  Though he had been working for Lee Hang since 1996, he only knew its majority shareholder and director Lo Chak Sum and not the others.  Despite his claim of service since 1996, Lee Hang’s MPF document stated that he only joined Lee Hang on 1^st March, 2000 which was the month when he said he had started applying for transfer of the Chinese vehicle licence to the plaintiff’s car and about 1 ½ months before the Chinese vehicle licence was actually transferred to the plaintiff’s car.  

54.On his lifts for his friend Miss Lau and the plaintiff, he said he had to go back to Lee Hang’s premises in Dongguan everyday and he just gave them the lifts incidentally.  When he provided a lift to Lau, he had to drive to Lau’s residence at Whampoa Garden in Hunghom.  If he was giving a lift to the plaintiff, he had to drive to Tokwawan to fetch him.  Sometimes, he would give a lift to the plaintiff only.  Such lifts were absolutely free.  If tunnel charges had to be paid, he would pay it himself and seek reimbursement from Lee Hang but not from the plaintiff or Lau.  Sometimes when Lau and the plaintiff were in a hurry and suggested a particular route, he would follow their suggestion.  However, he denied that he was in the business of carrying passengers across the boarder. 

55.He knew the addresses of the plaintiff’s residence and place of work in Shenzhen.  He also knew the telephone numbers of these places as well as the plaintiff’s mobile phone numbers.  He had the plaintiff’s name card and was still keeping a photocopy of it.  He said when he reported the plaintiff to the PSB on 19^th February, he had supplied these particulars to the Bureau, but he did not know why the Bureau had not taken any action against the plaintiff. 

56.On the plaintiff’s cheque for HK$240,000, he had confirmed in his evidence in chief of his knowledge that the money was intended to be for 24 months rental.  He however said in cross-examination that Lee Hang had asked him to deduct his share before paying the balance to Lee Hang.  He thus deducted his HK$60,000 for the tax refund and sale of licence plate FD 6818.  Regarding the purported receipt dated 20^th May, 2000 signed by Lo which stated that Lee Hang had received from the plaintiff HK$180,000 rental for a car that can go directly from Hong Kong to Guangdong and vice versa from 17^th April, 2000 to 17^th December, 2000, he said that he had shown this to the plaintiff once when the plaintiff was driving a car in the Mainland and he told the plaintiff that the plaintiff had to pay more rental, otherwise, the plaintiff could not use the Chinese licence after 8 months.  But he had not given this receipt to the plaintiff and could not explain his failure.  He also said that he had not thought of giving the plaintiff his receipt for the HK$60,000. 

57.On the HK$30,000 which was paid by a cheque of the plaintiff dated 31^st March, 2000, the plaintiff first made discovery of the cheque stud on the first day of the trial.  He was asked by the court to check whether he had received this sum from the plaintiff and to produce his bank statement or passbook covering 31^st March, 2000.  In the morning of the second day, the plaintiff further produced the relevant bank statement showing the clearing of this cheque.  He instead produced in the same morning a copy of an obsolete passbook with the Belgium Bank showing that there was no credit of HK$30,000 into this account on that day.  He had severely cross-examined the plaintiff but had not touched upon this cheque.  On the third day when the plaintiff had finished with his evidence, he was asked about his case on this cheque.  He, after indulgence from the court, made a short statement saying that he would only reveal his case on this cheque after the plaintiff has produced a copy of it.  This was not accepted and he was told to state his case on this cheque in writing.  After further indulgence, he at the end of that day furnished a short statement saying that he had not received this cheque.  He also confirmed verbally that he had also not received the sum of money represented by this cheque.  The plaintiff then produced a copy of the cheque which his lawyers had just obtained from the Hang Seng Bank Ltd.  The copy cheque showed the number of a bank account into which the HK$30,000 had been credited.  A deposit of HK$50 into this account proved that it was his account with the Bank of China. 

58.In the morning of the fourth day and just before he commenced with his evidence, he produced a supplemental witness statement saying that he had not received this cheque and had been ill on the third day, furthermore the matter had happened for more than 4 years and he had been a friend of the plaintiff, he therefore failed to recollect the matter and thus said to the court on the third day that he had not received the money.  However, after careful search by his wife, the obsolete passbook of his account with the Chiyu Bank (now merged with the Bank of China) was located and he corrected himself and confirmed the receipt of the HK$30,000 on 31^st March, 2000 into this account.  But he still could not tell what was the purpose of the HK$30,000. 

59.On the fifth day when he was cross-examined on why did the plaintiff pay him this sum, he suddenly said that the plaintiff had on one occasion of smuggling got into trouble with the Customs.  He was then driving the plaintiff to Shataukok.  The plaintiff had to bribed a Customs officer and thus borrowed HK$30,000 from him for that purpose.  He further said that he had only recalled this on the 4^th day but was not sure about it.  In answer to a question from the court, he said that this sum and the cheque for HK$240,000 were the only payments he had ever received from the plaintiff. 

60.He was cross-examined on his telephone conversations with the plaintiff, with his friend Chow Kwok Wing and his telephone calls to the PSB.  He had produced a list of phone calls made by and to him on his Chinese mobile phone.  The list appeared to be a record produced by the Chinese mobile phone company.  His answers, however, were confusing and did not tally with the records in the list or what he had said in evidence or the contents of his witness statements. 

61.He said in his first witness statement that after the plaintiff had taken the documents of identity and ran away, he immediately dialed “110” to the PSB for help.  After about 15 minutes, he phoned the plaintiff.  The plaintiff then came back and returned to his passengers their identity documents.  After obtaining the cheque for HK$205,000 from him, the plaintiff ran away again without returning his own documents.  He immediately phoned “110” again for help from the PSB.  At about 8:21 p.m., he found Chow Kwok Wing through Chow’s mobile phone and Chow helped him take the 4 passengers back to Hong Kong. 

62.In his oral evidence, he said that the plaintiff had run away with all the documents of identity of his and his passengers.  He immediately called “110” and reported the matter to the PSB.  Then he phoned the plaintiff and told him about the report to the PSB and that the plaintiff should return the documents.  The plaintiff had responded to his call and came back to his car.  The plaintiff then returned the documents to his passengers.  He then told the plaintiff that he did not owe him any money, but the plaintiff demanded from him HK$205,000 and told him the excuses thereof.  He then reversed his car further.  The plaintiff then came and dragged him out of his car, grabbed his paper knife, dragged him to the rear of the car, pointed the knife at his neck, held him against the car, searched and found his blank cheque, demanded him to fill in payee and the sum of HK$205,000 in the cheque and then ran away with the cheque and his document of identity.  He then received a call from the Shenzhen PSB asking for his location.  After this, he phoned Chow Kwok Wing to help him take the passengers across the boarder.  The Huanggang PSB then phoned him and asked him if he had made a report.  This oral account of the events clearly contained some discrepancies vis-à-vis the contents of his witness statements. 

63.His list of phone calls has given rise to even more discrepancies.  It showed that he had called Chow three times at 20:05:42 for 12 seconds, at 20:10:16 for 17 seconds and at 20:11:05 for 56 seconds.  He then called the plaintiff at 20:15:51 but only for 7 seconds.  He then made two other phone calls at 20:18:30 for 31 seconds and at 20:19:25 for 2 seconds.  He was then called by Chow at 20:21:38 for 24 seconds.  He had not called or been called by Chow again in the night.  He was then called by the Huanggang PSB at 20:35:02 for 55 seconds.  He was only called by the Shenzhen PSB at 21:07:30 for 34 seconds.  These calls in the list contradicted his witness statement and his oral evidence.  He never made any call to Chow for help after he had called the plaintiff.  The list also did not show any call by him to “110” or to any office of the PSB.  The call by the Huanggang PSB to him was about 20 minutes after he had talked to the plaintiff and the call from the Shenzhen PSB was about 52 minutes afterwards.  On the lack of any record showing his reports to “110”, he said he had two Mainland mobile phones and he made the “110” reports with the other phone.  But before he was challenged by reference to the list, he never indicated that he had two Mainland mobile phones in addition to his Hong Kong mobile phone. 

64.Furthermore, his call to the plaintiff only lasted 7 seconds and that was not enough for him to tell the plaintiff the things he said he had told him unless he was speaking extremely quickly.  I cannot see any reason why he had to speak so quickly. 

65.It is however more important to consider the time lapse between his call to the plaintiff at 20:15:51 for 7 seconds and the call by Chow to him at 20:21:38.  It was an interval of only 5 minutes and 40 seconds.  According to his evidence as recounted above, many things had happened during this interval.  It is difficult to imagine how all these things could have happened within 5 minutes and 40 seconds.  Furthermore, it was his oral evidence that he had been called by the Shenzhen PSB before he had spoken to Chow whilst his witness statement said that he had made a second report to “110” at this time.  The list again contradicted him.  I also note that during this 5 minutes and 40 seconds, he had also made two phone calls at 20:18:30 for 31 seconds and at 20:19:25 for 2 seconds.  If he should have made these calls after the plaintiff had run away with his cheque, then all the events up to the plaintiff’s departure had to happen in 2 minutes and 32 seconds.  If the events only happened after the two phone calls, the available time for the events was only 2 minutes 11 seconds.  It was not the defendant’s case that he made these two calls in the middle of the events or when the plaintiff was pointing the knife at him.  It was just impossible for so many things to happen in such a short interval. 

66.He also said in cross-examination that Lee Hang had spent about HK$110,000 to HK$120,000 in applying for the Chinese licence.  The rental charged on the plaintiff at HK$20,000 per month was high because there was risk in such arrangement. 

67.I also note that despite the Huanggang PSB’s call to him at 21:07:30, he did not go there to make a report until sometime before 10:30 p.m. (or 11:00 p.m. as stated in his witness statement).  It seems that he did not regard the matter as a very urgent one.  He had all the plaintiff’s contacts in Shenzhen and an early report would definitely enhance his chance of an early recovery of the cheque and his documents from the plaintiff.  Furthermore, despite his return to Hong Kong at the latest on 5^th March, 2001, he did not go to the Belgium Bank to complete the documentation to stop the payment of the cheque for HK$205,000 until the 9^th March, 2001. 

DW2-Lo Chak Sum

68.Lo was a director of Lee Hang.  He has been acquainted with the defendant for over 20 years.  The defendant had been in its employ since 1996 as a courier cum driver.  The defendant also carried out other miscellaneous duties.  Lee Hang obtained a Chinese vehicle licence in 1997.  It was affixed on the defendant’s old Volvo.  The defendant knew how to apply for such a licence and he applied for it for Lee Hang.  However, the time required for the application was long and he did not want to buy a car and leave it idling pending the application.  Hence, he used the defendant’s car for the application.  Though the licence belonged to Lee Hang, it had to be affixed to the defendant’s car and the defendant had the control over the use of his car. 

69.The salary of the defendant was at HK$7,000 per month with some tea money for overtime at HK$1,000 odd.  The salary was for the defendant’s service as well as the use of his car.  The defendant only worked for Lee Hang on a part-time basis and he said the salary was not enough for a driver.  However, he had no idea as to what the defendant was doing in his own time.  He also confirmed in cross-examination that all the expenses for running the car which include the expenses for petrol, maintenance, insurance, Mainland insurance for the Chinese licence, highway expenses, administrative expenses for crossing the boarder and penalty tickets were all the responsibility of the defendant and not Lee Hang.  Lo himself did not have any driving licence and did not drive at all. 

70.By the end of 1999, Lee Hang had less use for the car.  The defendant asked him whether he would lease the Chinese licence to others and he agreed.  He left the details to be handled by the defendant but that he would get HK$20,000 rental per month.  He thought that the HK$20,000 per month was for both the Chinese licence and the car.  After the leasing was arranged, he had on one occasion received HK$160,000 with HK$160,000 as 8 months rental and HK$20,000 as fees for processing the transfer of the licence to the lessor’s car.  He received the HK$20,000 fees not as reimbursement of fees he had spent, but because he had spent HK$100,000 for applying for the licence originally.  He did not bother if the defendant would receive any money from the lessor, and if so, how much.  He also did not know for what purpose did the lessor want the licence.  He had not even met the lessor.  The only thing he knew about the lessor was his surname.  He let the licence to the lessor because he trusted the defendant.  The rental of HK$20,000 per month was suggested by the defendant who said that it was reasonable.  He said that if the lessor should contravene the law, his factory would be in trouble, but confirmed that there was no trouble whatsoever during the period of leasing.  The termination of the leasing was also determined by the defendant.  If the defendant wanted to lease the licence, Lee Hang would do so.  If the defendant did not want to lease, Lee Hang would not do so.  He trusted the defendant and gave him such power. 

71.On the actual termination, he said after about 4 to 5 months of leasing, the defendant told him not renew it after its expiry as the plaintiff was engaged in illegal activities.  The defendant also told him that there were rumours that the plaintiff had engaged in smuggling and had not given back the defendant the HK$30,000 tax refund. 

72.I however note that these allegations of illegal activities and smuggling or their being part of the cause for non-renewal by Lee Hang had not been mentioned in his witness statement.  His witness statement merely said that he directed the termination of the leasing because the plaintiff did not promise to pay rental in advance.  Furthermore, it was the defendant’s case that he had told the defendant to get back his share for HK$30,000 tax refund and HK$30,000 for sale of licence no. FD 6818 by deducting the same from the HK$240,000 paid by the plaintiff.  There was thus no cause for the defendant to complain to him that the plaintiff had failed to give him the HK$30,000 tax refund or that the defendant had dispute over money with the plaintiff.  If the plaintiff had not paid the HK$80,000, Lee Hang also did not allow the plaintiff’s use of the licence after 8 months.  On the defendant’s case, nobody owed anything to the other. 

73.On the purported receipt dated 20^th May, 2000, Lo said that the defendant had asked him to issue it to the plaintiff for accounting purpose.  The content was based on what the defendant had told him.  But the defendant had said that he had only shown the receipt to the plaintiff once but had not given it to him.  The defendant also could not explain why did he not give it to the plaintiff. 

DW3-Lam Chi Keung

74.Lam was employed by a tourist bus company to deploy such buses at Huanggang Port.  He had known the defendant for 4 to 5 years as the defendant frequently crossed the Huanggang Port.  Sometimes, the defendant’s customers would make use of the service of his company.  But he was not clear what the defendant was doing.  He said in one evening at about 7:00 to 8:00 p.m. in about January or February, 2001 at the Huanggang Port, he met the defendant outside the toilet.  The defendant asked him whether he had any hire car to send his passengers across the boarder.  The defendant also told him that his driver’s identity documents had been snatched by someone else and he could not cross the boarder. 

DW4-Yip Kun Keung

75.Yip was the elder brother of the defendant’s wife.  He was named a deputy driver in the Chinese licence for the car DF 8178 and he could drive it across the boarder.  He said on a day in February, 2003 at about mid-day, he drove DF 8178 passed the inbound checkpoint of Huanggang Port and parked it outside the toilet to wait for the defendant.  FD 6818 pulled up alongside him and the driver (whom he later learnt to be the plaintiff) asked him where was the defendant.  After repeated questioning, he said the defendant was crossing the boarder through the Inbound Hall on foot.  The plaintiff then threatened that he should not drive this car again as the plaintiff would frame him up for trafficking of dangerous drugs or contraband.  When the defendant appeared, the plaintiff came out of his car and threatened to destroy the defendant, make the defendant a bankrupt and prevent the defendant form going into the Mainland.  The plaintiff also threatened to break the defendant’s leg.  When he appeared as if he was going to hit the defendant.  Yip came out of his car to stop the plaintiff and told them to sort out their grievance amicably.  After quarrelling with the defendant for sometime, the plaintiff drove away. 

76.In cross-examination, he said that the 7 seater DF 8178 used to belong to the defendant, but had been transferred to his wife sometime in mid-2002.  However, he could not explain why the record of owner issued by the Transport Department stated that his wife became the owner on 30^th December, 2003.  The Chinese licence affixed to this car used to be no. 02-67888.  It had been transferred to him and affixed to this car.  Thus the Chinese licence that used to be owned by Lee Hang had become owned by him.  (The licence number would change upon transfer). 

77.He said that the plaintiff and the defendant had quarreled outside the toilet for nearly half an hour.  The plaintiff was shouting loudly with foul language and people nearby could hear him.  But he did not hear anything about the quarrel as he had closed the window and they were quarrelling one to two vehicles’ distance away.  Thus he did not know what was the cause for the plaintiff being so angry with the defendant despite they had quarreled for so long.  He only heard that the plaintiff wanted to hurt the defendant because of certain leasing of Chinese licence. 

Analysis

What was the agreement between the plaintiff and the defendant

78.The plaintiff said that the agreement he had with the defendant was to purchase from the defendant the Chinese vehicle licence at HK$445,000.  The only evidence of payment was a cheque for HK$240,000.  He said the deposit of HK$205,000 was paid in cash at the end of 1999.  The receipt for this sum from the defendant had been returned to the defendant in exchange for a cheque for HK$205,000.  That cheque was wrongly written and was used to exchange for the cheque relied on in this action.  His case does not involve Lee Hang or Dongguan Lee Hang.  He was dealing with the defendant and not with Lee Hang or Dongguan Lee Hang.  The defendant’s story differed a lot from the plaintiff’s.  The defendant alleged that he was all along dealing with the plaintiff on behalf of his employer Lee Hang.  It was not a purchase but a lease of the Chinese licence.  The issue of who owned the Chinese licence beneficially is thus relevant. 

79.The plaintiff said that the defendant used to be in the business of plying across the Huanggang Port with passengers and the plaintiff had been his regular customer.  He used to pay the defendant HK$500 per journey and the defendant would go to his office or home in Hong Kong to fetch him and carry him across the Huanggang Port into Shenzhen. 

80.The defendant did not dispute that he had carried the plaintiff across the Huanggang Port.  He admitted that he had done it for 10 to 20 times for the plaintiff and his business partner Miss Lau.  He agreed that he had gone to their home or office to fetch them.  He said he did all these incidentally as he was going to the office of Dongguan Lee Hang everyday.  The defendant was indeed very kind to the plaintiff and Lau.  However, the more surprising point is that he provided all these lifts not only free of charge, but also free of all disbursements including tunnel charges.  He would also undertake routes suggested by the plaintiff in case of his urgency.  For the tunnel charges, he would pay them and seek reimbursement from Lee Hang and not from the plaintiff or Lau.  One wonders why the defendant was so kind to the plaintiff and/or Lau and why he should have exercised his generosity at the expense of Lee Hang. 

81.However, Lo, who was the majority shareholder and director of Lee Hang, said that all costs and expenses for running the defendant’s car from petrol to penalty tickets were borne by the defendant.  However, the defendant’s salary for his part-time service to Lee Hang was only HK$7,000 with HK$1,000 odd for overtime and miscellaneous duties.  Nevertheless, the defendant had the power to decide on the use of the car.  On this point, I have no reason to disbelieve Lo as his evidence is not in line with that of the defendant and not appear to be for his own benefit.  Lo further said that it was the defendant who decided on whether the Chinese licence should be leased to others as Lo trusted him.  There is no dispute that the defendant also handled the negotiation and the clinching of the arrangement with the plaintiff.  Lee Hang and Lo were not involved at all.  Lo had not met and did not even know who was the so-called lessor save the surname.  Lo did not know if the defendant had charged anything out of the deal and he did not bother.  If the defendant was taking a share of the proceeds and if the licence indeed belonged to Lee Hang, the defendant’s should would have been at Lee Hang’s expense.  It appeared that he did not know the terms of the arrangement though he alleged that Lee Hang would received HK$20,000 per month.  It also appeared that the arrangement, be it a sale or a leasing of the Chinese licence, was done between the plaintiff and the defendant in their own rights.  The cheque of HK$240,000 was given by the plaintiff to the defendant and not to Lee Hang or Lo.  It was cashed by the defendant and not by Lee Hang.  All these convince me that the defendant was the beneficial owner of the Chinese licence.  He was using it for his own benefit as well as being responsible for the costs and expenses for its use in conjunction with his own car and I so find.  Lee Hang only lent its name for use as the holder of the licence.  I reject the defendant’s evidence in so far as it is inconsistent with this evidence of Lo’s.  My conclusion that the defendant owned the Chinese licence beneficially is further supported by the evidence of DW4 Yip Kun Keung that the defendant could have procured his inclusion as a permitted driver of the car bearing the Chinese licence.  If the Chinese licence was owned by Lee Hang, it would have been for Lee Hang to decide who could be the permitted driver under that licence and not the defendant. 

82.At this juncture, I also say that there is no evidence save the assertions of Lo and the defendant that the cost for applying for the Chinese licence had been borne by Lee Hang.  I am not convinced that such was the case.  I am likewise not convinced that the defendant had paid Lee Hang HK$180,000.  The only evidence was a self-serving purported receipt signed by Lo.  But he did not explain why the cheque for HK$240,000 was not given to Lee Hang in the first place.  He has also not explained why he only gave the HK$180,000 to Lee Hang on 20^th May when the cheque for HK$240,000 had been cashed by him on 2^nd May.  Furthermore, he has also failed to explain his failure to give the purported receipt to the plaintiff.  It was Lo’s evidence that he wrote this receipt in terms as advised by the defendant and the defendant asked for this receipt for the purpose of giving it to the plaintiff for accounting purpose.  This contradicted the defendant’s evidence as the defendant had not given it to the plaintiff and could not explain why.  However, assuming that the costs for applying for this licence had indeed been paid by Lee Hang in the first place, I am of the view that that Lee Hang only did it as a benefit for the defendant as Lo and the defendant had been acquainted with each other for over 20 years.  If Lee Hang had indeed paid for the costs of the application, I would also accept that Lee Hang had been paid the HK$180,000 in May, 2000 and that would have sufficiently rewarded Lee Hang.  It is however my primary finding that the defendant had not given Lee Hang HK$180,000 and the so-called receipt of 20^th May is just a fabrication by the defendant and Lo to justify the defendant’s misappropriation of the HK$240,000 as rental and other payments rather than purchase price or a part thereof.

83.I also find that the defendant had been using his car with the Chinese licence for his business of carrying people from various places in the Hong Kong SAR across the Huanggang Port to various places in Shenzhen and Dongguan.  I do not believe that the defendant had been so kind to the plaintiff and Lau and that he had provided them such free service.  He has not given any reason why he was so kind to them.  The way that he had provided the service to the plaintiff and Lau and the many occasions of such service cannot be explained by the mere fact that he was a friend of Lau and the plaintiff.  He only came to know them in the course of the purchase of a car in 1999.  Such friendship without more is not enough to explain the kind of generosity that he had vouchsafed to them.  What the defendant did is only consistent with the fact that he had been paid for his service. 

84.I further note the evidence of DW3 Lam Chi Keung that the defendant had plied through Huanggang Port very often and he had customers using the tourist bus service of DW3.  Furthermore, in the evening of 19^th February, 2001, the defendant was again carrying 4 passengers across Huanggang.  He was taking them from Changon of Dongguan to Kowloon and the Hong Kong International Airport and he said it was a free lift except that they had to reimburse him the highway charges.  I note that the address of Dongguan Lee Hang was not in Changon of Dongguan.  Even if he was giving a lift to his friends, there was no reason why he had to send them to the Hong Kong International Airport.  He was living in Tai Wo of Tai Po and Lee Hang’s address was in Wing Ming Street of Castle Peak Road.  They are no where near the International airport.  I do not believe that he would have done all these simply out of his generosity to friends. 

85.I now come to consider whether the transaction between the plaintiff and the defendant over the Chinese licence was a sale or a leasing.  I think it is useful to dispose of the question over the tax refund of HK$30,000 first.  Having considered the documents relating to this refund, I am prepared to accept the defendant’s case that this refund had been credited to the plaintiff upon his purchase of the Mercedes Benz though the plaintiff was not aware of this.  Hence, he should somehow pay this back to the defendant. 

86.I have dealt with the development of the evidence relating to this payment in detail.  The plaintiff has proved by undisputable evidence that the cheque for HK$30,000 was paid into the defendant’s account with the Chiyu Bank on 31^st March, 2000.  The defendant in his written final submissions said that he had not received this cheque and did not know what this sum was for though he suspected that it was related to a smuggling incident of the plaintiff in Shataukok.  He however admitted he had only received from the plaintiff this sum and the cheque for HK$240,000 and no other.  If he had not received this cheque, there was no reason why the plaintiff would have been able to pay it into his account with the Chiyu Bank.  He also had savings and current accounts with the Belgium Bank.  I cannot see why the plaintiff would have the details of this account with the Chiyu Bank orshould have chosen this account.  It was a substantial sum of money and the plaintiff would not have secretly paid it into his bank account without letting him know about its payment and the purpose thereof.  I accept the plaintiff’s version that it was a loan to the defendant on account of the tax refund and was supposed to be repaid by the defendantif he should receive the same from the Government. I do not accept his explanation that it was possibly the plaintiff’s repayment for his alleged loan to solve the smuggling problem.  If it was such a repayment, the plaintiff would have to tell him about it, otherwise, he would not be aware of the repayment and would regard the loan as still outstanding.  I also do not accept his allegation that he had never received this cheque.  There was absolutely no reason for the plaintiff not to give him the cheque and let him deposit it with his own bank.  I also reject his suggestion that this money could be related to any alleged smuggling activity of the plaintiff.  If there was such an incident and the plaintiff had borrowed HK$30,000 from him, he would have remembered it when this cheque was first mentioned on the first day or the trial.  In any case, he would not have to wait until the fourth or fifth day before he could remember this incident.  This alleged smuggling incident is just his fabrication in the course of cross-examination so as to extricate this sum from the payment in relation to the Chinese licence. 

87.Since the tax refund of HK$30,000 had been covered by the loan on 31^st March, 2000, the plaintiff would not have to pay him the tax refund again and he could not ask the plaintiff to pay the same again.  If the plaintiff should ask him to repay it, he could refuse on the ground that he had not received the tax refund from the government.  Therefore, the HK$240,000 cheque would have nothing to do with the tax refund.   Then the next question is what was the HK$240,000 for. 

88.If the arrangement over the Chinese licence was a leasing and not a sale, then there was no reason why the plaintiff should have paid the defendant HK$240,000 when the rental was only HK$20,000 per month.  If the plaintiff had to pay rental in advance, he only had to pay HK$40,000 on 1^st or 2^nd May, 2000 so as to cover the rental from 17^th April to 16^th June, 2000.  Assuming that he had to pay a deposit as well, I do not think he would to pay anything more than 3 months rental at HK$60,000 as deposit.  If the deposit should be at 3 months’ rental, the total would only be HK$100,000.  There was no reason for him to pay HK$240,000.  Furthermore, there was no reason for the defendant to have applied for the transfer of the licence before the plaintiff had paid him any deposit be it a sale or leasing.  It was also the defendant’s evidence that a sum of HK$20,000 had to be paid for the application for transfer.  Lo has already denied that Lee Hang had paid anything for this application.  I have no ground not to believe in him.  I also see no reason why the defendant should make such payment out of his own pocket.  I am therefore driven to the conclusion that the plaintiff must have paid the defendant some money as deposit before the defendant would have initiated the application.  If the plaintiff had not paid any deposit, the defendant would not have handed over the transfer documentation to the plaintiff on about 17^th April 2000.  If he had not received any deposit, he would have demanded some payment before handing over the documentation to allow the plaintiff to enjoy the use of the Chinese licence.  So he must have received some money as deposit from the plaintiff at the latest when he handed over the documentation on about 17^th April, 2000.  Thus by 2^nd May, 2000 when he got the HK$240,000 from the plaintiff, he had already received more than HK$240,000 from the plaintiff.  However, such a large sum of money is inconsistent with his allegation that it was just a leasing arrangement with rental at HK$20,00 per month. 

89.The rental of HK$20,000 per month is also too high to be reasonable.  According to him, the costs for applying for the licence afresh was only about HK$110,000 to HK$120,000.  Lo said it was at HK$100,000.  He has also admitted that the plaintiff already had a Chinese licence which was affixed on a car that could run within the Mainland though not to Hong Kong.  It was indeed a high price for the plaintiff to obtain the added convenience of going into the Mainland without the need of changing cars.  I therefore find that the arrangement was a sale and not a leasing of the Chinese licence.  My finding is also consistent with the fact that the plaintiff had purchased insurance for the use of the car in the Mainland for the second half year.  This shows that he intended to continue using the Chinese licence after December, 2000. 

90.I also refer to the purported receipt dated 20^th May, 2000 purportedly issued by Lo on behalf of Lee Hang.  Both Lo and the defendant said that the defendant had deducted his HK$30,000 for tax refund and HK$30,000 for sale of licence plate no. FD 6818 from the HK$240,000, hence he only gave Lee Hang HK$180,000.  I have already found above that there was no such payment by the defendant to Lee Hang.  The defendant and Lo just made up this story to justify the defendant’s misappropriation of the HK$240,000 as rental and other payments and deny that it was the purchase price.  Unfortunately, when they cooked up this story, the defendant did not know that the plaintiff would at the start of the trial produce the evidence for the loan of HK$30,000 on account of the tax refund. 

91.I have found against the defendant on the tax refund and the purported receipt for HK$180,000 issued by Lee Hang.  I have also found against him on his arrangement with the plaintiff over the Chinese licence and the payments for it.  I likewise reject his case that the plaintiff owed him HK$30,000 for the alleged sale of licence no. FD 6818 as that was part of his case for the deduction of HK$60,000 from the HK$240,000 and the issue of a receipt by Lee Hang for only HK$180,000.

92.The next question is what was the purchase price for the sale of the Chinese licence or the right to use.  The undisputed evidence is that the defendant had received from the plaintiff HK$240,000 and I accept the plaintiff’s case that this was part of the purchase price.  The plaintiff said that he had also paid a deposit of HK$205,000 in cash and the defendant had given him a receipt for that.  I would not repeat the plaintiff’s evidence on the fate of the receipt. 

93.The defendant had both in his evidence and submissions emphasized that the plaintiff has failed to produce any documentary evidence or receipt to prove this payment.  There are however three pieces of evidence that can support the plaintiff’s case.  The first piece of evidence is the defendant’s cheque for the odd figure of HK$205,000.  The plaintiff said that after the defendant had failed to procure him an All China licence at the additional price of HK$105,000 or to return to him the original Chinese licence, he and the defendant had negotiated on the compensation payable by the defendant.  They eventually agreed that the defendant would repay him the HK$445,000 which he had originally paid the defendant.  The defendant would repay this sum by two installments with the first sum at HK$205,000 by a cheque given forthwith and the second one at HK$240,000 by a further cheque to be given 3 months later.  I note that these two sums matched exactly the two sums that the plaintiff said he had originally given the defendant for the purchase of the original licence. 

94.The defendant however said in oral evidence that the plaintiff demanded the HK$205,000 from him in the evening of 19^th February, 2001 at Huanggang Port telling him that HK$200,000 was for the plaintiff’s loss in not being able to carry on with smuggling and HK$5,000 was for the plaintiff to obtain illicit pleasure from the prostitutes so as to soothe the plaintiff’s anger.  He alleged that the plaintiff had repeatedly referred to these two sums and their alleged purposes in the evening of 19^th February and on some subsequent occasions.  However, a review of his witness statements and report to the PSB show that he has only alleged smuggling by the plaintiff in his last witness statement dated 23^rd December, 2003 and that was only alleged as one of the grounds for not renewing the leasing for the plaintiff without any particular.  Nowhere in any of his statements or report did he ever suggest how the HK$205,000 in his cheque was made up of.  If this sum was made up of the two elements allegedly put forth by him, he would definitely have referred to them in his statements and report.  I find that this evidence was only his fabrication or improvisation in the course of his oral evidence and reject it as such. 

95.The second piece of evidence is the defendant’s allegation of harassment in both his report to the PSB and his oral evidence.  He said in October, 2002 when he was driving pass the Huanggang telephone exchange building, the plaintiff intercepted him and demanded HK$445,000 from him.  This demand was in line with the plaintiff’s case that he had promised to repay this sum to the plaintiff.

96.The third piece the plaintiff’s evidence that he had purchased another Chinese licence in 2003 at the price of HK$520,000.  This licence, unlike the one sold to him by the defendant, could go through the whole of Guangdong province.  This evidence is indicative of the value of such licence.  The licence sold by the defendant to the plaintiff was cheaper as it could only go up to Dongguan and not the whole of Guangdong province.  This evidence thus supports the plaintiff’s case that he had paid the defendant HK$445,000 for the licence. 

97.There being no other explanation on why the defendant should have drawn a cheque for HK$205,000 and by reason of these three pieces of evidence, I accept the plaintiff’s case that he had paid the defendant HK$445,000 for the purchase of the licence and the defendant had promised to repay him this sum by the same two installments when the defendant failed to procure him an All China licence and could not return this licence to him. 

98.I would also refer to the evidence of DW4 Yip Kun Keung.  He said on a day in February, 2003 at about mid-day, he was in the 7 seater car DF 8178 parked outside the toilet beyond the inbound checkpoint of Huanggang Port and witnessed a quarrel between the plaintiff and the defendant which lasted nearly half an hour.  The plaintiff as fierce and wanted to hit the defendant.  He was stopped by Yip.  Obviously the plaintiff and the defendant were quarrelling over their long standing dispute.  But Yip was extremely evasive about the details of their quarrel.  After being pressed by the court on what did he hear as to the cause of their quarrel, he then vaguely said that it was about certain leasing of Chinese licence.  He further put up the excuse that when he had closed the window of the car when they were quarrelling.  I cannot believe that Yip would be so disinterested about their quarrel.  He is the elder brother of the defendant’s wife and was sharing with him the use of the car.  They were quarrelling very loudly.  I am of the view that Yip was withholding from the court what he heard as the cause of their quarrel.  This fortified my finding above that the defendant had promised to repay the plaintiff the HK$445,000.

99.Before moving on to what happened in the evening of February, 2001, I would further deal with the defendant’s allegation that the arrangement of leasing had been terminated.  Though I have found against the defendant and held that there was a sale of the Chinese licence and no leasing, what the defendant has said on the alleged termination is also illuminating on the shifting of ground by the defendant.  He initially stated in his report to the PSB that his employer Lee Hang had instructed him to demand the plaintiff to pay the outstanding HK$80,000 and to pay the rental for the next term in advance.  As the plaintiff delayed the payment, his employer therefore determined the leasing of the Chinese licence.  In his first witness statement filed on 17^th October, 2003, he repeated the same story about the plaintiff’s failure to make advance payment but making no mention of smuggling by the plaintiff.  In his statement dated 23^rd December, 2003, he said that his employer determined the lease because the plaintiff’s failure to pay the rental that should have been paid and the plaintiff’s smuggling activities.  There was no question of renewal or a request to the plaintiff to pay advance rental for another term.  The stance taken in this statement was thus inconsistent with that taken in the report and the earlier statement.  His oral evidence returned to the initial scenario of the alleged termination.  He said in about November or December, 2000, he told the plaintiff that the rental paid had been exhausted and the plaintiff should pay rent.  However, the plaintiff showed no sincerity to pay.  The defendant’s employer then told the defendant that the lease had to be renewed, but the defendant said that he would terminate it.  His employer then left it to him to decide.  He did not mention smuggling as one of the grounds for termination and in fact suggested that the employer was desirous of renewing the lease.  Lo however gave another version on the termination.  He said after about 4 to 5 months of leasing, the defendant told him not to renew it after its expiry as the plaintiff was engaged in illegal activities.  He also said that he had been advised by the defendant of rumours that the plaintiff had engaged in smuggling.  These different scenarios on the alleged termination weakened the credibility of the defendant and Lo even further. 

What happened in the evening of 19^th February, 2001

100.I have already found above that the defendant had agreed to repay the plaintiff the HK$445,000 by two instalments of HK$205,000 and HK$240,000.  I also accept the plaintiff’s case that he had been given a cheque by the defendant for HK$205,000 but that cheque could not be presented for payment because of something was written wrongly.  He therefore had to exchange for another cheque from the defendant.

101.I would not repeat the respective evidence of the plaintiff and the defendant on what happened in the evening of 19^th February.  I have already pointed out above that the events in that evening as alleged by the defendant could not have taken place within the available time interval as shown in his list of telephone calls.  Furthermore, the defendant also accepted that the place in question was monitored by close circuit camera.  There were also many PSB and Customs officers around.  It would have been foolhardy for the plaintiff to have behaved in the way as described by the defendant.  The defendant also alleged that the plaintiff had taken away the documents of identity of the 4 passengers and shouted at them that they could not leave the boarder as he had already bribed the Customs officers.  If that was the case, I wonder why these passengers would have adopted an inactive role and just sit there and wait.  Two of them in fact had to go the Hong Kong International Airport to catch their plane(s).  Without their documents of identity, they would have missed their plane(s).  If the plaintiff did take away their documents of identity, they should have reported the matter to the PSB and Customs officers who were around. 

102.I also refer to the defendant’s evidence that he happened to have a cheque in his wallet which he intended to use it to pay the telephone charge.  That was not strange.  The strange thing was his allegation that he had a habit of signing the cheque first but without filling in the particulars and this cheque was also pre-signed but blank.  Hence, when the plaintiff found this cheque from his wallet, the plaintiff could force him to fill in the sum of HK$205,000 and the plaintiff as the payee.  I find this story difficult to accept.  I cannot see any reason for him to have a pre-signed a blank cheque in his wallet.  The risk was obvious and the pre-signing was purposeless. 

103.For the above reasons, I do not accept the defendant’s version of events in the evening of 19^th February.  I find that he had come to Huanggang Port in the evening of 19^th February in anticipation that he would probably see the plaintiff there.  He had with him a cheque ready to be given to the plaintiff in exchange for the previous cheque that was wrongly written.  This cheque had either been filled out and signed completely or it was filled out and signed by him at Huanggang Port.  I also find that the plaintiff, after having rightfully exchanged the cheque with the defendant, also snatched from him his documents of identity so that he could not leave the Mainland.  He took that stupid action because he wanted to secure the payment of the cheque.  I also find that as a result of the plaintiff’s snatching of the defendant’s documents, they had a quarrel there and then.  Though I have found that the plaintiff was entitled to this cheque, I deplore his snatching of the defendant’s documents to secure its payment.  That is unlawful.  But I cannot punish the plaintiff by depriving him of the HK$445,000.  I also find that as the plaintiff had taken away the defendant’s travel documents, the defendant had to ask his friend Chow to assume his task of sending the 4 passengers over to Hong Kong. 

104.Though I do not accept the defendant’s version of events in that evening, I would accept that he had somehow got in touch with the PSB offices possibly with a view to get back his documents of identity from the plaintiff.  However, I do not accept his oral evidence that he had been called by the Shenzhen PSB first and followed by the Huanggang PSB.  His list of telephone calls showed that he was called by the Huanggang PSB at 20:35:02 for 55 seconds and then by the Shenzhen PSB at 21:07:30 for 34 seconds.  I also do not accept that he had two Chinese mobile phones with him in addition to his Hong Kong mobile phone.  He never said anywhere that he had three mobile phones with him.  He only blurted this out when he was cross-examined on why there was no record of his calling the PSB in his list of phone calls.  The details of how he had contacted the PSB remain a mystery to me.  I also accept that his wife had received threatening phone calls from the plaintiff and I deplore that as well.  However, I hold that the plaintiff did this because the defendant had failed to repay him the HK$205,000 by the first cheque and he harboured the wrong idea that such wrongful conduct could secure the payment of the second cheque. 

105.Regarding the period after 19^th February, 2001, I accept that there were incidents of confrontation between the plaintiff and the defendant as the defendant’s cheque for HK$205,000 had been dishonoured.  Such confrontations were extremely undesirable and unnecessary as the plaintiff had already through his solicitors issued a demand letter on the defendant on 26^th February, 2001 for payment under the dishonoured cheque and this action was instituted on 6^th March, 2001.  However, I have difficulty in accepting the defendant’s allegation that there were not just confrontations, but that he had been robbed by the plaintiff on many occasions.  If the plaintiff had indeed robbed him on those occasions in broad daylight, I wonder why he did not report the incidents to the PSB until 23^rd September, 2003.  On his evidence, he had already reported the plaintiff to the PSB in the evening of 19^th and in the morning of 20^th February, 2001.  The PSB already had a file of an alleged robbery by the plaintiff against him.  He however said that he had tolerated the plaintiff on those occasions hoping to soothe the plaintiff’s anger.  On his case, he owed the plaintiff nothing, I can see no reason why he had to yield to the plaintiff’s abuse.  Even if he was indebted to the plaintiff, I still do not see any reason for him to tolerate the abuse and not resort to protection by the police and the PSB. 

106.Before I leave this, I would also deal with the apparent discrepancy between paragraphs 10 and 11 of the plaintiff’s witness statement and his oral evidence.  The plaintiff’s paragraphs 10 and 11 read together convey a meaning that the plaintiff had gone to the Huanggang Port hoping to bump into the defendant and he did bump into the defendant at about 8:00 p.m. in the evening of 19^th February, 2001.  I accept the plaintiff’s evidence that he had encountered some difficulties in arranging to meet the defendant as the defendant was avoiding him.  The defendant then had then given him a cheque for HK$205,000, but that cheque could not be cashed.  In order to meet with the defendant, he went to Huanggang Port in the evenings of 15^th or 16^th hoping to bump into the defendant.  However, for the meeting in the evening of 19^th, I accept that he had been told by the defendant that the defendant would be at Huanggang Port at about 8:00 p.m. and he could go there to meet the defendant.  The defendant in fact had taken along a cheque to exchange the wrongly written cheque with him. 

107.The defendant’s case in a nutshell is that he had been abused by the plaintiff since the time he came to know the plaintiff through Lau.  Initially, the plaintiff enjoyed the lifts absolutely free from his office or home and without the need to reimburse any expenses.  Then there came the arrangement about the transfer of licence which led to the plaintiff’s purchase of a new Mercedes.  He was again exploited by the plaintiff in that he lost his tax refund of HK$30,000 to the plaintiff and the plaintiff took his licence plate no. FD 6818 at HK$30,000 but did not pay him.  The plaintiff then hastened him to apply for the transfer but did not pay him any deposit.  He had to incur about HK$20,000 for the application (which Lo said was not paid by Lee Hang).  After the documents for the transfer were available on about 17^th April, 2000, the plaintiff took the documents but still did not pay him anything.  When the plaintiff gave him a cheque on 29^th or 30^th April, it was deliberately written wrongly so as to fool him.  The plaintiff then gave him a cheque for HK$240,000 on 1^st May, 2000 but still did not pay him the tax refund of HK$30,000, the HK$30,000 for the purchase of his licence plate number and the HK$20,000 processing fee for the application to transfer of licence.  These expenses totaling HK$80,000 were never paid by the plaintiff and he had to deduct his HK$60,000 from the HK$240,000.  In fact, on Lo’s evidence, the processing fee of HK$20,000 was not paid by Lee Hang but Lee Hang took HK$20,000 as a token reimbursement of the expenses Lee Hang had incurred in the original application.  Thus the HK$20,000 spent for processing the transfer had to come from the defendant for which he had not obtained repayment.  The plaintiff’s exploitation of the defendant did not stop there.  When the leasing had lasted for nearly 8 months, the plaintiff refused to pay up the expenses or to pay advance rental to continue the leasing.  Lee Hang on advice of the defendant then rightfully terminated the leasing and transferred the licence back to it.  However, the plaintiff then asked the defendant to scout for another Chinese licence for him but the defendant declined.  The plaintiff then demanded HK$200,000 compensation on the ground that the defendant had, by (rightfully) transferring the licence back to Lee Hang, deprived the plaintiff of profits from smuggling.  The absurdity did not stop here.  The plaintiff further demanded HK$5,000 from him for illicit pleasure so as to soothe the plaintiff’s anger.  The plaintiff then extracted a cheque for HK$205,000 from him by pointing a knife at his neck in a crowded place under close circuit camera.  When the cheque was dishonoured, the plaintiff harassed and robbed him on a number of occasions.  He tolerated the plaintiff hoping to soothe the plaintiff’s anger.  He only reported the incidents to the PSB on 23^rd September, 2001. 

108.The plaintiff was not a thug, a gangster or a vagabond.  He was a businessman having a computer operated embroidery factory in the Mainland and an office in Hong Kong.  There was no special relationship between him and the defendant.  They just got acquainted with each other through a mutual acquaintance Madam Lau.  I cannot imagine that he would have exploited the defendant as alleged.  Even if the plaintiff could have been so morally deficient, I still cannot believe that the defendant would have allowed himself to be exploited and abused by the plaintiff in the way as alleged.   

Illegality

109.The question of illegality propped up in the course of cross-examination of the plaintiff by the defendant.  It was not referred to anywhere in the pleadings, witness statements or documents produced.  When the defendant asked the plaintiff whether he knew that sale of Chinese licence was against the law, the plaintiff answered straightly that he had heard so from others.  I then asked the defendant whether it was the case and the defendant gave an affirmative answer.  I then asked him whether leasing of the licence was also against the law.  After a lot of hesitation and prevarication, he gave me a negative answer.  At the end of the evidence, I asked Mr. Wu, counsel for the plaintiff, to submit on the effect of illegality of the sale of such licence on the plaintiff’s claim. 

110.Though the plaintiff has admitted that he had heard from others that the sale of such licence was illegal, I do not know whether he had acquired such knowledge before or after he enter into the agreement with the d or before or after the licence had been transferred to him.  I also do not know whether such sale was indeed illegal.  If it should be illegal for the licence to be sold, I cannot understand why a leasing of the licence would be permitted as contended by the defendant.  There was no expert evidence before the court to show the legality or otherwise of a sale of a vehicle licence of the Mainland. 

111.Mr. Wu argued that even if the sale was indeed illegal, it still would not have affected the plaintiff’s claim as the plaintiff was not seeking the performance of the sale.  The plaintiff is seeking the payment by the defendant of HK$445,000 which he had agreed to pay the plaintiff as a settlement of his failure to procure an All China licence for the plaintiff.  There was no allegation that the procurement for the plaintiff of an All China licence was illegal per se or otherwise.  The consideration for the procurement of the All China licence, as I understand it, was for the plaintiff to firstly surrender to the defendant the Chinese licence that he was using and to pay the defendant an extra HK$105,000 upon successful procurement of the All China licence.  The Chinese licence had been surrendered.  This in fact put an end to the illegality if the sale of the licence was illegal.  I therefore accept Mr. Wu’s argument that the agreement to pay HK$445,000 was not illegal.  There was at least no evidence to show that it was.  Mr. Wu has also drawn my attention to various paragraphs in chapter 16 of Chitty on Contracts, 29^th edn. on illegality and the case of Sung Wai Kiu and Anor. v. Wong Mei Yin [1997] 1 HKC 288 which I have considered.  Since I have found that the settlement agreement to repay HK$445,000 was not illegal, I do not think I need to discuss them.

Judgment

112.I therefore give judgment that the defendant should pay the plaintiff HK$445,000 with interest at the judgment rate from the issue of the writ of summons on 6^th March, 2001.  I also make an order nisi that the defendant should pay the plaintiff the costs of   this action with certificate for counsel.

Representation:

Mr. Paul Wu instructed by Messrs Chung & Kwan for the Plaintiff.

Defendant: acting in person.