Chu Yiu Kwong v. Chu Yiu Fai and Another

DCCJ2580/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2580 OF 2004

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BETWEEN

(Transferred from High Court Action No. 3584 of 2001 pursuant to

Order made by Master Lung of High Court dated 12 May 2004)

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Coram : H. H. Judge Chow in Court

Dates of Hearing : 14^th and 15^th October 2004

Date of handing down Judgment : 16^th December, 2004

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JUDGMENT

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1.The Plaintiff was the brother-in-law of the 2^nd named Defendant, and the 1^st named Defendant was the estranged husband of the 2^nd named Defendant.  On 12^th October 2000, the Plaintiff paid a total sum of HK$767,637.44 (“the Sum”) to a number of financial institutions to pay off the debts of the Defendants owed by the Defendants to these financial institutions.  The amount of debt under the name of the 1^st named Defendant was HK$549,341.71 whereas the amount under the name of the 2^nd named Defendant was HK$218,295.73.  It is the Plaintiff’s case that on that occasion the Defendants jointly agreed to repay the Sum to him.  Despite repeated demands made by the Plaintiff, the Defendants failed to repay him the Sum. 

2.In his witness statement, the Plaintiff said that on 12^th October, 2000 both Defendants agreed that,

(i)   they would spend money in moderate manner;

(ii)   they would not travel for vacation;

(iii)   they would cancel all credit card accounts;

(iv)   they would not apply for new credit cards;

(v)    they would repay the Sum by way of monthly instalments of $6,000 to $8,000, to be deposited into a HSBC bank account held in the joint name of the Plaintiff and Chu Siu Lai on the 5^th day of each month until full repayment;

(vi)   they were jointly liable for the sum.

3.It is the Plaintiff’s evidence that one week before 12^th October 2000, the 1^st named Defendant phoned up the Plaintiff, saying that he and the 2^nd named Defendant owed the banks and financial institutions a sum of about $700,000.  He asked the Plaintiff to repay for them.  Through the phone, the Plaintiff heard that the 2^nd named Defendant also confirmed that she owed debts to banks and financial institutions.  Thereafter the Plaintiff had a discussion about the matter with his elder sister Madam Chu Siu Lai.  Subsequently the Plaintiff asked the Defendants to go to his office on 12 October 2000.  On 12^th October, 2000, the Defendants went to the Plaintiff’s office, bringing along their credit cards and credit card accounts statements.  During that meeting, both Defendants calculated their monthly incomes and expenditures (including expenses on cigarettes etc.) and both Defendants agreed to make monthly repayment to the Plaintiff in the sum ranging from $6,000 to $8,000.  His evidence was supported by that of Madam Chu Siu Lai.  After this meeting, the Plaintiff made repayments of the Defendants’ debts.

4.The Plaintiff admitted that the 2^nd named Defendant never said that she would be responsible for the 1^st named Defendant’s loan, and that he did not treat the lending transaction with Defendants as a “commercial” transaction.  He said that he would not lend the sum if the debtors were not his younger brother and sister-in-law.

5.The Defendant’s defence is that:-

(a)  she has never given any authority to the 1^st Defendant to make any agreement or undertaking regarding the Sum and its repayment;

(b)  there is no legal intention to create a legally binding agreement enforceable between the Plaintiff and the 1^st Defendant, if there were any;

(c)  alternatively, if there were any agreement among the parties, which is denied, the Defendant denies there being any legal intention to create a legally binding agreement enforceable among them.

6.The Defendant admitted that the Plaintiff had fully repaid $218,295.73 for her.

7.As to what had happened on 12 October 2000, the Defendant said in paragraphs 21 and 22 of her affirmation:-

“21.  在2000年10月12日上午約11時，原告人和我一起到達他在皇后大道中35號商業大厦，502-503室的寫字樓。當時原告人和姊姊都在場，他們勸告朱耀輝不要繼續賭博與及要量入為出，當時並沒有完全討論過原告人怎樣幫忙，也沒有說到還款的問題。其實，我和原告人的關係疏離，我也沒有能力償還債務，他是絕對不會同意借十萬元給我。

 22.  我們在辦公室逗留一會，四人便一起到多間銀行和財務公司清還欠款，其後我和姊姊一起吃飲，朱耀輝和原告人一同離開，我不知道他們到什麼地方。”

       （原文無底線）

8.In Court, she testified during the meeting on 12^th October, 2000 that nothing was mentioned about borrowing of money and as to how the credit card loans were settled, nothing was mentioned.  But she admitted that credit cards were brought to the Plaintiff’s office, and they were placed in a bag for holding documents.  She admitted that her monthly income at that time was $8,500, and her expenditures on cigarettes were about $900.  She said that the stay in the office was about 10 odd minutes.

9.On that day, the Sum was paid to various financial institutions concerned.  The actual amount of the Sum did not come out from the air.  In the office, there must have been a calculation of the total amount of indebtedness, by calculating the amount of debts owed under each credit card.  Some of the cards were in the name of the 1^st named Defendant whereas the rest were in the name of the 2^nd named Defendant.  The cards themselves did not show the amounts of indebtedness; the amounts of debts relating to the cards could only be shown by the relevant credit card statements.  The correctness of such amounts could only be within the personal knowledge of the Defendants.  The amount which the Plaintiff settled for the Defendants was $767,637.44, a very substantial amount of money.  The amount was settled shortly after the meeting on that day.  So there must have been prior calculation of the amount of debts owed by each Defendant, and there must have been prior checkings of the correctness of such indebtedness with each Defendant.  These would require the participation of both Defendants.  I find that the 2^nd named Defendant must have taken part in the discussion.

10.Madam Chu Siu Lai testified as to the monthly expenditures of the Defendant, which included her expenditures on smoking.  The Defendant said that her expenditures on smoking was about $900.  If the Defendant had not testified on her expenditure on smoking, how could Madam Chu Siu Lai have known that the Defendants’ expenditures on cigarettes constituted a significant part of their monthly expenditures?

11.What the Plaintiff and Madam Chu Siu Lai said in court about what happened on 12^th October must be true.  I accept the evidence of the Plaintiff, which is corroborated by that of Madam Chu.  The Defendant’s evidence relating to the meeting was simply incredible.  She did not refer to the calculation of the total indebtedness, and the checking of the debts due to the financial institutions.  I do not accept her evidence.

12.The sum of $767,637.44 is a very substantial amount of money.  Even though the Plaintiff and the 1^st Defendant are brothers, it would be very natural for the Plaintiff to have said that the repayment of this amount was not required, if he had really intended that there was no need for the Defendants to make any repayment at all.  But there is no evidence to this effect.  There is no evidence that the Plaintiff gave the Defendants the choice to decide whether they would repay the sum at all.  If the 2^nd named Defendant’s defence is true, it would mean that the Plaintiff was making a gift of a substantial amount to her.  That clearly is not supported by evidence.  The 2^nd named Defendant submitted that the arrangement to repay was merely domestic or social arrangement.  Of course, the background of this case has a domestic background, but what is important is whether the parties had the legal intention to be bound by the agreement.  I found that there was such legal intention between the parties.  The Defendants intended to make repayments of the Sum; such intention was evinced by their agreeing to make repayments at a monthly amount of $6,000 to $8,000, at a certain time of each month.  The Plaintiff relied on such agreement and paid the Sum to various financial institutions concerned.  Hence there were the agreement to lend out the Sum, and the agreement by the Defendants to repay to the Plaintiff the Sum.  It constituted a loan agreement.  The 2^nd named Defendant did not make any repayment; so she was in breach of her promise to repay.

13.As to the amount to be repaid monthly, namely, $6,000 to $8,000, it is not a vague repayment term.  This term gives the Defendants an option to decide the amount to be repaid each month, but the amount must be within the range of money to be repaid, the lowest level being $6,000, and the highest level being $8,000.  In other words, the Defendants could pay any amount within the range of $6,000 to $8,000.  It is not a vague amount.  As to the time of payment, there is a slight inconsistence in the evidence of the Plaintiff.  He said that the repayment was to be made on the 5^th day of each month.  Then he corrected himself by saying that repayment was to be made at the beginning of each month.  But what is important is that there is a time fixed for repayment.  In any event, the 5^th day is at the beginning of each month. 

14.There is no evidence that the Defendant said that she was to be responsible for the 1^st Defendant debt, but they undertook to be responsible to make repayment of the Sum.  They were treating their respective debts as one single debt, as the debt of their family, by agreeing to pay the Sum by monthly instalments of $6,000 to $8,000.  Since they agreed to repay the Sum without making any differentiation as to their respective debts, they were obliged to repay the Sum jointly. 

15The Defendants have not repaid the sum, so both of them were liable for the same.  Therefore, I enter judgment for the Plaintiff against the 2^nd named Defendant for the Sum claimed, namely, $767,637.44, with interest thereon at judgment rate, from the date of issuance of the Writ to the date of repayment, the Sum to be paid to the Plaintiff within 30 days from today.

Costs

16.I make an order nisi, to be made absolute in 14 days’ time, that the 2^nd named Defendant is to pay costs of this action to the Plaintiff, to be taxed, if not agreed, with certificate for Counsel.  The 2^nd named Defendant’s own costs to be taxed in accordance with the Legal Aid Regulations.

Mr. Joeson Wong instructed by Messrs. Philip Ng & Wong, Solicitors, for Plaintiff.

1^st named Defendant, in person, absent.

Mr. M.K. Ng of Messrs. Kwok, Ng & Chan, Solicitors, for 2^nd named Defendant.