Ho Yiu Fung v. Tsui Yu Sing and Another
Read the full judgment text of HCA 183/2002 on BabelCite. This High Court CFI judgment was delivered on 15 October 2004.
1. In this action, the Plaintiff sues the 1 st Defendant for repayment of alleged loans and outstanding interests in the total sum of $2,525,483.41. He also sues the 2 nd Defendant, a limited company of which the 1 st Defendant and his wife are and were at all material times the only directors and shareholders, his alleged one-third share of profit in the business of a factory in the Mainland (Jiefeng) wholly owned by the 2 nd Defendant, for the period between August 1994 and March 1997.
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HCA 183/2002 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 183 OF 2002 ____________ BETWEEN
____________ Before: Hon A Cheung J in Court Dates of hearing: 6-10 September 2004 Date of judgment: 15 October 2004 ________________ J U D G M E N T _______________ 1.In this action, the Plaintiff sues the 1st Defendant for repayment of alleged loans and outstanding interests in the total sum of $2,525,483.41. He also sues the 2nd Defendant, a limited company of which the 1st Defendant and his wife are and were at all material times the only directors and shareholders, his alleged one-third share of profit in the business of a factory in the Mainland (Jiefeng) wholly owned by the 2nd Defendant, for the period between August 1994 and March 1997. 2.It is common ground that the Plaintiff and the 1st Defendant became acquainted with each other in 1983. They soon became very good and close friends, so much so that the 1st Defendant addressed and regarded the Plaintiff as his “elder brother” (or “big brother” – “大哥”), and the Plaintiff treated the 1st Defendant as his younger brother. It is not in dispute that prior to August 1994, the Plaintiff had on various occasions lent money to the 1st Defendant. According to the evidence of the Plaintiff, which I have no difficulty in accepting in this regard, those loans ranged between $50,000 and $200,000 and on two occasions, interests were charged to defray the bank interests that the Plaintiff had to pay in order to be in a position to lend the monies. The loans were borrowed for the 1st Defendant’s business purposes. 3.As mentioned above, the 1st Defendant and his wife were (and are) the only shareholders and directors of Master Limited, which carries on business in the name of Wing Sing Machinery Manufactory, the 2nd Defendant. Wing Sing or Master Limited wholly owns a plastic manufacturing factory in the Mainland known as Jiefeng. However, according to the evidence, at one stage (until early 1997) the factory had a “secret partner”, Mr Shum. Mr Shum held a 10% share in Jiefeng. But in order not to be responsible for signing bank guarantees for banking facilities made available to Master Limited, he was not registered as a shareholder or director of Master Limited. 4.It is the Plaintiff’s case and evidence at trial that in 1994, he orally agreed with the 1st Defendant to join Jiefeng as its General Manager. He would be responsible for the running of the factory in the Mainland, whereas the 1st Defendant would be responsible for sales and other operations in Hong Kong. His remuneration by way of salary and other fringe benefits would be the same as that enjoyed by the 1st Defendant from the factory. On top, he would be entitled to a one-third share of profit of the factory calculated as from August 1994 when he joined the factory – he would not be concerned with the profit or loss of the factory prior to August 1994. Moreover, he also agreed to make loans to the 1st Defendant for the purpose of financing the operations of the factory. It was agreed between the two gentlemen that interest would be charged on the loans at the rate of 12% per annum, so as to cover the bank interest and handling charges that the Plaintiff had to pay his own bank in obtaining the money in the first place. And because of that, when bank interest fluctuated, the interest rate charged for the loans also fluctuated. 5.The Plaintiff said in evidence that pursuant to the oral agreement, he became the General Manager of the factory in the Mainland, replacing the 1st Defendant who had been the General Manager. Furthermore, he started lending money to the 1st Defendant to cover the expenditure of the factory. From August 1994 to the end of the year, he lent a total sum of $800,000 to the 1st Defendant. In 1995 up to 1997, he continued to lend monies to the 1st Defendant pursuant to his oral agreement with the 1st Defendant. There were partial repayments made, and by the time when he quitted the factory (31 March 1997), there were millions of dollars of loans and interests outstanding. He said that further repayments were made after his departure upon his repeated demands for repayment. As mentioned above, he sues for a total sum of $2,525,483.41 being allegedly the total amount of outstanding loans and interests in this action, which was commenced in 2002. 6.The Plaintiff’s case is very much supported by contemporaneous documents – although the Defendant challenges some of the documents: see below. The documents have been set out and greatly relied on by Mr Ng, appearing together with Miss Lin for the Plaintiff at trial, in both their opening and final submissions. I will not repeat their submissions here. Suffice it to say that the Plaintiff’s version of lending monies to the 1st Defendant is well evidenced by the following:
7.Apart from all these documents, some of which the 1st Defendant denied ever receiving, the undeniable fact is that there was not a single piece of contemporaneous document by which the 1st Defendant denied the allegations regarding the making of the loans and the charging of interest etc. The 1st Defendant said in evidence that he did not receive some of the above documents (i.e. HYF-4, 6, 7, 8 & 19), and that he had orally over the telephone or in meetings expressed to the Plaintiff his disagreement with the contents of the documents. 8.The 1st Defendant accepted in evidence that he and the factory had received the monies said to have been lent by the Plaintiff to him. He explained that they were not loans but capital contributions made by the Plaintiff to the factory in respect of his joining the factory as a 50% secret partner or equity partner, which he said represented the true agreement between the two gentlemen. There was no question of his or the factory paying any interests on the capital contributions made by the Plaintiff, and he never agreed to it. He said that they agreed that the factory’s profit should be divided into three equal portions, one portion to each of them and the third portion would be retained by the factory for further development purpose. He said that Mr Shum’s 10% share in the factory would be subsumed under his 50% share. He said that they never expressly discussed the question of sharing the loss of the factory, as that was not anticipated at the time. But he said that his understanding was that if any loss was made it should be split equally between him and the Plaintiff. The 1st Defendant said that upon the Plaintiff’s withdrawal from the secret partnership and departure from the factory in 1997, he agreed to return to the Plaintiff his capital contributions as a gesture of goodwill. He explained in evidence that he had rejected the Plaintiff’s suggestion that in lieu of his 50% share of profit, he should be paid back his capital contributions plus interest. The 1st Defendant had initially insisted on calculating the profit (if any) but eventually offered to return the capital contributions without interest as he believed that in fact no profit had been made. He considered that the return of the Plaintiff’s capital contributions (without interest) to the Plaintiff was the best he could offer his “elder brother”. Repayments of money were thus made in those circumstances. 9.As pointed out above, there is much contemporaneous material evidencing the Plaintiff’s case. There was no written reply by the 1st Defendant to deny what had been alleged in the contemporaneous material, or to set out the 1st Defendant’s case. In fact, the 1st Defendant’s story of the Plaintiff being an equity partner only first surfaced in an interview record of the 1st Defendant with the Inland Revenue Department, which carried out investigations into the accounts of Master Limited in 2001. But even that was, from the angle of the Defendants’ case, problematic, because according to the interview, the 1st Defendant told the Inland Revenue Department that the Plaintiff was a 30% equity partner in the factory. That was quite different from his story that the two were fifty-fifty equity partners. He explained that at the time, he told the Inland Revenue Department people that beneficial ownership of the factory was divided into three shares – one for the Plaintiff, one for himself and one for the company (i.e. Master Limited, which was wholly owned by him and his wife). Needless to say, that explanation again cannot square with his present story that he and the Plaintiff were fifty-fifty equity partners, because his explanation would mean that he (together with Master Limited) owned 66.7% of the factory whereas the Plaintiff owned 33.3%. The 1st Defendant explained in the box that he was quite confused at the time and did not make himself clear to the Inland Revenue Department. The tax representative (Mr Wong) who accompanied the 1st Defendant to attend the interview said in evidence that he had not heard of this story of an equity partnership from his client prior to the interview, and it was in the interview that he heard for the first time about the story of a secret partnership. 10.It should also be noted that apart from the contemporaneous documents, there were also pre-action solicitors’ letters written on behalf of the Plaintiff to the 1st Defendant. In the 1st Defendant’s solicitors’ letters in reply, the story of an equity or secret partnership between the Plaintiff and the 1st Defendant was not put forward. Rather there was only a simple denial. There were no explanations given by the 1st Defendant in the box as to why he did not put forward his case or a positive case through his lawyers in the inter solicitors correspondence. The story of a fifty-fifty equity or secret partnership between the Plaintiff and the 1st Defendant only first appeared in the defence filed in February 2002. 11.The case turns on facts. I have had the opportunity of closely observing the giving of evidence by both the Plaintiff and the 1st Defendant. I have also heard evidence from Kitty Ma (who is still working as a cashier for the 2nd Defendant in Hong Kong), Mr Shum (the former secret partner in the factory), and some other former employees of the factory in the Mainland. I have also had evidence from the tax representative and accountant of the Defendants (Mr Wong) as well as an accountant retained by the Plaintiff. 12.Needless to say, the main evidence came from both the Plaintiff and the 1st Defendant. So far as their demeanour is concerned, I have no difficulty in preferring the demeanour of the Plaintiff to that of the 1st Defendant, who was uptight and unimpressive in his evidence. On the other hand, the Plaintiff was straightforward, relaxed and confident in giving evidence. Part of this may well have been due to differences in character and temperament – I have borne that carefully in mind. But having given due allowance for that, I still very much prefer the demeanour and evidence of the Plaintiff to that of the 1st Defendant. 13.As pointed out above, the Plaintiff’s evidence is well evidenced by contemporaneous documents. Some of these documents were challenged by the 1st Defendant who denied ever receiving them. The originals of the disputed documents have all been produced as exhibits. I have looked at the original documents, I have considered their contents – not only in isolation but also in connection with the rest of the evidence, and I have of course taken into account the respective evidence of the Plaintiff and the 1st Defendant. I have no difficulty in finding that they were indeed contemporaneous documents. They sat very well with the rest of the contemporaneous documents, the receipt of which was not disputed by the 1st Defendant. I have borne in mind the burden and standard of proof; I have carefully considered the inherent probabilities and improbabilities of the competing allegations. As I said, I have no difficulty in accepting that the disputed documents were indeed contemporaneous documents given by the Plaintiff to the 1st Defendant. 14.As I said, both the disputed and the undisputed documents very clearly evidence the Plaintiff’s case. They are extremely damaging to the 1st Defendant’s case and evidence. 15.I have not forgotten Mr Luk (the Defendants’ counsel)’s point that there were no documents from the 1st Defendant admitting liability to the Plaintiff, or agreeing to the various documents that the Plaintiff had given the 1st Defendant. I can add that there was no written IOU either. All this is quite true; however, as I said, the undeniable fact is that there was much contemporaneous material from the side of the Plaintiff evidencing his case, to which there was not a single reply from the 1st Defendant. 16.Mr Luk, doing his best as counsel for the 1st Defendant, led evidence at trial to the effect and argued hard during final submission that the Plaintiff wielded much power while he was in charge of the management of the factory at the material time, which was wholly consistent with his client’s story that the Plaintiff was an equity partner in the business. There was some dispute in evidence regarding how much power the Plaintiff really had in running the factory, and what role or what say the 1st Defendant had in the day-to-day operation of the factory at the material time. But in my judgment, even assuming all these factual disputes were decided in the Defendant’s favour, whether the Plaintiff’s power in the factory was consistent with his being an equity partner is just part of the picture. An important question to ask is whether the fact that he wielded much power in the factory at the time was inconsistent with the Plaintiff’s story that he was the General Manager of the factory plus a lender of monies to the 1st Defendant to finance the operations of the factory. 17.In my view, on the evidence, even assuming that the Plaintiff did have much power and say in the factory, that was quite consistent with firstly his post as the General Manager of the factory and thus the most senior person in the Mainland (given that the 1st Defendant was in Hong Kong most of the time), secondly his role as the de facto financier of the factory, and thirdly his personal relationship with the 1st Defendant in which he was respected and treated as the bigger or elder brother. That, in my judgment, takes away much of the force of Mr Luk’s argument based on the power exercised by the Plaintiff in the factory. 18.I can well understand Mr Luk’s argument if the evidence had only been that the Plaintiff wielded much power in the factory and he made various advances of money to the factory to defray the factory expenditure. In that scenario, it would not be difficult to conclude or infer from the evidence that the Plaintiff was a partner in the factory. However, the evidence of the Plaintiff, which was substantially backed by the contemporaneous documents, was that he was merely lending monies with interest to the 1st Defendant to defray the factory expenditure. The loans were made against the background of his working as the General Manager of the factory and his personal relationship with the 1st Defendant. All this tends to weaken the argument of Mr Luk that the Plaintiff was a secret or equity partner in the factory. 19.Having said all that, I must not be taken as having found in favour of the Defendant’s version of the power exercised by the Plaintiff in the factory. Where necessary, I am prepared to make findings in favour of the Plaintiff’s evidence, insofar as it differs from the 1st Defendant’s evidence, for as I said, generally speaking, I much prefer the evidence of the Plaintiff to that of the 1st Defendant, which I do not find to be particularly reliable. 20.In this regard, I should expressly say that I have already borne in mind the evidence of the other witnesses who to varying extent have had first hand experience of the Plaintiff’s running of the factory in the Mainland. I have also borne in mind a hearsay statement made by a former cashier working in the factory. But on the evidence, none of them was privy to the dealings and agreement between the Plaintiff and the 1st Defendant. Their evidence was based on their personal perceptions and observations, which were by no means comprehensive. Mr Shum obviously had some grudges with the Plaintiff while they were working together in the factory, and the other Mainland employees’ knowledge of the actual role of the Plaintiff in the factory was very limited given their positions in the factory. 21.Mr Luk, appearing for the Defendants, pointed out that at least in relation to the loans said to have been made in 1994, the corresponding bank interest paid by the Plaintiff to his own bank was only 8% per annum. However, the undeniable fact is that for the subsequent monies advanced, the bank interest rates were more or less in the same region as that charged by the Plaintiff on the loans made to the 1st Defendant. In my judgment, what is more important is the rate agreed by the Plaintiff and the 1st Defendant, rather than the explanation for the rate. And as to the rate that had been agreed, it was clearly evidenced by the contemporaneous documents. 22.As for Kitty Ma’s evidence, she was subpoenaed by the Plaintiff to give evidence at trial, and as such the Plaintiff’s counsel could not really cross-examine her on her evidence. As noted above, up to the time of trial, she was still working for Master Limited in Hong Kong. Like Mr Shum, her evidence on the actual status of the Plaintiff in the factory and the true nature of the repayments of money was really hearsay in nature, even assuming that her evidence should be totally believed. Yet I do have reservations regarding her evidence, particularly in relation to her explanation of the fax that she sent on 14 October 1997 to the Plaintiff (HYF-10), which referred to the payments that had been made to the Plaintiff between 1996 and 1997 as “repayments”. She volunteered in the box the evidence that she had made a mistake in the fax by wrongly calling the payments “repayments”, when counsel had not even pointed out to her the dispute between the parties or the significance of the term that she had used in the fax. There was no evidence that she knew much, if anything, about the dispute between the parties prior to the giving of evidence before the Court, and her unprompted evidence that she had made a mistake in relation to the fax was indeed quite surprising. Her denial of any detailed knowledge regarding what was discussed or agreed at the meeting in 1998 held in the office of Master Limited in Hong Kong in which she was said to have been present according to the minutes is also doubtful. 23.The 1st Defendant’s story that the monies advanced by the Plaintiff were really his capital contributions as an equity partner does not sit well with the fact that in fact according to the contemporaneous records kept by the Plaintiff, he kept lending monies to the factory even after his departure in March 1997. If the Plaintiff had decided to quit his equity partnership, there was no reason for his continuing to make capital contributions to the factory. On the other hand, the Plaintiff explained that he was still concerned about the factory and wanted to help the factory as before and that was why he still lent some monies to the factory after his departure. In fact, he returned to the factory from time to time after his formal departure to help out in the operations of the factory. 24.The departure notice issued by the 1st Defendant to the staff of the factory, announcing the Plaintiff’s departure, does not agree well with the 1st Defendant’s story either. It simply referred to the Plaintiff as the outgoing General Manager of the factory, when in fact he should have been referred to as an outgoing partner if the 1st Defendant’s story was true. After all, according to the witnesses called by the 1st Defendant, they regarded the Plaintiff as one of the bosses of the factory. Yet the Plaintiff was merely referred to as the outgoing General Manager. 25.The 1st Defendant’s explanation for the lack of a written agreement recording the Plaintiff’s equity or secret partnership in the factory is also puzzling. I can understand why very often businessmen do not reduce their oral agreements to writing. But my difficulty here lies somewhere else: the 1st Defendant explained in evidence (8 September 2004, 12:35 pm) that after the two had reached an oral agreement regarding the secret partnership, he had mentioned to the Plaintiff (upon the advice of his wife) to record the oral agreement in writing. He said he was told by the Plaintiff that as they were so close in relationship, the 1st Defendant should trust him (i.e. the Plaintiff) as his “big brother” and there was no need for such a written agreement. 26.As I indicated to Mr Luk during final submission, I was puzzled by the explanation. For on the record, the 1st Defendant and his wife were the only shareholders and directors of Master Limited, which again, on the record, wholly owned the factory. If there was a need for a written document, that need would be to protect the Plaintiff’s interest. What was said to have happened should have happened the other way round: i.e. the Plaintiff should have been asking the 1st Defendant for a written document to protect his interest as a secret partner in the factory, and the 1st Defendant should have been telling the Plaintiff that in view of their close relationship there was no need to do so and the Plaintiff could trust him (i.e. the 1st Defendant). Yet according to the 1st Defendant’s evidence, what happened was the reverse situation. Mr Luk was forced to accept in final submission that sometimes strange things did happen in real life. I am quite sure that they did from time to time. But I am not so sure that what was alleged to have happened did happen in the present case. 27.Lest it is thought that the matter had not been taken into account by me, I should expressly say that there has been some evidence given on both sides regarding certain requests made by the 1st Defendant via Kitty Ma to the Plaintiff at the time of the Inland Revenue investigations to supply documents to back the accounting treatment of the repayments made by the 1st Defendant to the Plaintiff. I have borne in mind the competing evidence and counsel’s submissions. In my judgment, the incident is consistent with the Plaintiff’s case, but it is not conclusive at all regarding whose version should be believed. 28.Needless to say, I make my findings of fact by reference to the entire evidence that has been placed before me at trial. Of course, I do find the contemporaneous documents strongly in favour of the Plaintiff’s case, and I do find the Plaintiff a much more impressive witness than the 1st Defendant. But they have not been my only considerations. I have considered other evidence – oral and documentary, and I have borne the entire relevant circumstances and evidence in mind. I have borne in mind the burden and standard of proof, the inherent probabilities and improbabilities of the competing versions, and I have borne in mind not only the credibility but also the reliability of the evidence of the various witnesses that have given evidence at trial. I have guarded against approaching the credibility of the witnesses’ evidence in a simplistic way by assuming that if a witness is untruthful in a particular part of his evidence he must be untruthful in relation to the rest of his evidence and vice versa. There are of course more important disputes of fact and there are minor and peripheral ones. Insofar as I am able to do so, I have sought to differentiate the two. 29.In particular, as regards the credibility of the Plaintiff as a whole, I wish to say expressly that I have borne in mind the criticisms raised by Mr Luk against the Plaintiff’s evidence in relation to a number of relatively minor matters, such as the true employment status of a former factory worker (Mr Cheung), the Plaintiff’s relationship with a former secretary and then Deputy Manager (Ms Lee), and so forth. I have specifically considered whether if the Plaintiff were disbelieved in relation to these peripheral matters, his credibility and the reliability of his evidence regarding the main issues in dispute would be affected and to what extent they would be affected. I have carefully borne all this in mind in weighing up the evidence before coming to my findings of fact. I will not repeat what Mr Luk has submitted in final submission here in relation to all these relatively peripheral matters. 30.Examples of other peripheral matters include the true role of another related factory (卓峰), the lending of money to the Mainland authority where the factory was situated, the procedure of withdrawing money from the safe kept in the factory premises, the Plaintiff’s alleged use of factory resources to erect a house in the Mainland, the contact of a potential witness by the Plaintiff. 31.Other matters of some relevance that are in dispute between the parties include the true amount of money that the 1st Defendant has invested into the factory in the Mainland, the reason for the payment of the sum of $30,000 odd as interests in March 1995, the Inland Revenue Department investigations and the contact between the Plaintiff and Kitty Ma relating to the provision of documents in support of the 1st Defendant’s reply to the investigations, the true reason for the repayments of money made prior to the departure of the Plaintiff on 31 March 1997 (which would be inconsistent with the 1st Defendant’s case that the monies had been advanced by the Plaintiff as his capital contributions), and the amount of salaries drawn by the Plaintiff from the factory. There were of course other disputes between the parties at trial. 32.I have borne in mind all the points made by Mr Luk in his final submission. Some of them have received an express mention in the judgment above, some have not. But whether mentioned above or not, I have borne his entire submission in mind before coming to my findings of fact. 33.Having done the above, I have no doubt whatsoever, on a balance of probabilities, that the Plaintiff’s story of lending monies to the 1st Defendant for interest is to be preferred. I make findings to that effect. I also accept his evidence on the quantum of the outstanding loans and interests. I further accept the Plaintiff’s evidence on the interest rates charged. 34.There is no dispute, and Mr Luk expressly accepted that in final submission, that the monies in question were lent (if they were lent) to the 1st Defendant personally, which had been used for the benefit of the factory. 35.In those circumstances, I order that judgment be entered for the Plaintiff against the 1st Defendant for the sum of $2,525,483.41, together with interest thereon at the rate of 8% per annum from the date of writ (16 January 2002) to the date of judgment, and thereafter at the judgment rate until full payment. 36.As regards the claim for the one-third share of profit against the 2nd Defendant, for the above reasons, I also prefer the story of the Plaintiff to that of the 1st Defendant, which were not very much different from one another, once the true status of the Plaintiff in the factory is resolved. For even the 1st Defendant accepted that the Plaintiff was entitled to a one-third share of the profit of the factory at the material time. In the circumstances, I make a finding in favour of the Plaintiff’s case on liability against the 2nd Defendant. 37.There are two outstanding issues between the parties, namely whether the loss (if any) sustained by the factory in a preceding a subsequent tax year within the period in question should be taken into account or whether they should be disregarded in computing the profit for a particular tax year (or whether the profit or loss of the factory during the entire period in question (between 1994 and 1997) should be computed globally), and secondly, the quantum of the Plaintiff’s claim, which would be dependent on the amount of profit (or loss) made by the factory during August 1994 to March 1997. 38.The first issue is really a question of fact. The Plaintiff gave evidence that part of the agreement between him and the 1st Defendant was that he would not be responsible for the loss made; however if any profit was made he would be entitled to a one-third share. In other words, his entitlement, as part of his remuneration as the General Manager of the factory, was in the nature of a yearly bonus. In fact he called the payment a bonus in the contemporaneous documents (WS(2) 31). 39.It is true that in some of the documents, the Plaintiff had expressed his willingness to forgo his share of profit if the 1st Defendant would only repay him the outstanding loans and interests, and in his calculations, he was prepared to take into account the loss made by the factory. In my judgment, all this was in the nature of concessions made in the course of his chasing for repayment of monies. It did not reflect what had been agreed at the beginning, or a true agreement reached by the parties subsequently, nor was it binding on the Plaintiff as such (the Defendants did not take any such point in pleadings or at trial). 40.I find as a fact that as per the agreement between the Plaintiff and the 1st Defendant, the Plaintiff is entitled to a one-third share of profit, if any, as part of his remuneration, which is in the nature of a yearly bonus. Any loss made in the previous tax year or in the following tax year during the relevant period in question should not be taken into account. 41.As regards the second issue, the Plaintiff is prepared to rely on the tax returns made by Master Limited to the Inland Revenue as the basis for calculating the profit. As an alternative, the Plaintiff is prepared to use a set of revised figures prepared by the Defendant’s accountant (Mr Wong) as the basis for calculation, which would produce a smaller claim. According to this alternative basis, the respective profits of the factory for the 3 years in question between 1994 and 1997 were much lower than the admitted profits made by the factory between 1998 and 2000, which ranged between $2 million and $4 million. 42.As regards the set of revised figures, I have looked at the adjustments made by the Defendant’s accountant which but for an item called “China expenses”, comprised upward adjustments increasing the amounts of profit for the relevant years. The Plaintiff has, in his evidence, managed to produce evidence to doubt the accuracy of the so-called China expenses. The Defendant’s accountant said in evidence that he had not taken the Plaintiff’s criticisms of the China expenses into account in doing his adjustments, as he was not sure if the Plaintiff’s figures and documents were reliable. 43.I bear in mind the burden and standard of proof. I bear in mind the figures in question, and the evidence given by both parties regarding the quantum of profit and loss. I am quite satisfied that some profits had been made by the factory, but due to the fact that the Plaintiff does not have a complete set of documents, the Plaintiff is not in a good position to present to the Court with an accurate calculation. 44.On the other hand, I am not particularly satisfied with the Defendants’ figures. In fact, Mr Wong, the accountant, said in evidence that he did not find any of the figures and calculations that had been prepared and placed before the Court particularly reliable. 45.In those circumstances, the Court can only do the best it can based on the available evidence. I would assess the Plaintiff’s claim in the lump sum of $500,000 for the period in question. 46.I therefore order that judgment be entered for the Plaintiff against the 2nd Defendant in the sum of $500,000, together with interest thereon at the rate of 8% per annum from the date of writ (16 January 2002) to the date of judgment, and thereafter at the judgment rate until full payment. 47.I also make a costs order nisi that the costs of the action be paid by the Defendants to the Plaintiff, such costs are to be taxed if not agreed. Unless either party should apply to the Court to vary the costs order nisi within 14 days after this judgment is handed down, the same shall become absolute upon the expiry of the 14 days period. 48.I thank counsel for their helpful assistance.
Mr Lawrence Ng and Ms Esther Lin, instructed by Messrs Lam & Partners, for the Plaintiff Mr Victor Luk, instructed by Messrs Lee, Mok & Wong, for the 1st and 2nd Defendants |