Chan Wing Cheung Allan v. Ho Shu Yee Susana
Read the full judgment text of HCA 1941/2000 on BabelCite. This High Court CFI judgment was delivered on 24 January 2005.
1. This is the trial of an action whereby the plaintiff sues the defendant for $3 million on the basis that $3 million had been paid to her as a loan which she is required to repay. The defendant admits the receipt of the $3 million on 5 May 1998 paid from the plaintiff’s bank account into the defendant’s bank account at the Hang Seng Bank.
Cited by 4 cases
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HCA1941/2000 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO.1941 OF 2000 --------------------- BETWEEN
------------------- Before : Hon Waung J in Court Dates of Hearing : 12 – 14, 17 – 21 and 24 January 2005 Date of Judgment : 24 January 2005 ----------------------- J U D G M E N T ----------------------- 1.This is the trial of an action whereby the plaintiff sues the defendant for $3 million on the basis that $3 million had been paid to her as a loan which she is required to repay. The defendant admits the receipt of the $3 million on 5 May 1998 paid from the plaintiff’s bank account into the defendant’s bank account at the Hang Seng Bank. 2.The defendant relies on five separate matters in defence of the claim and in support of her counterclaim. Those five matters had been called during the course of the trial as :
These are the five issues which the court heard. In the course of the trial three witnesses gave evidence, namely, the defendant Madam Ho herself, Mr Wong Chiu, a witness called by the defendant and Mr Chan the plaintiff himself. 3.The way I would approach the case is to examine each of the issues and draw my conclusions from such examination. As preliminary to this and also in the course of doing this, I would also touch on the credibility of the three witnesses. I start first with the description of Mr Chan. 4.Mr Chan, I think it is clear — both from the surrounding circumstances as well as from the evidence that came out in court — came from a very wealthy family, and the father had left a sizeable estate to which the plaintiff was entitled. He worked in the family company prior to April and May 1998. He had a substantial income from the family business. However, in around 1995 or thereabout, may be earlier than that, he divorced his wife and an acrimonious divorce proceedings took place. He was forced to pay substantial sums to the wife, as well as having to make provisions for her accommodation, namely to buy a flat for her. 5.The plaintiff had been acquainted with Madam Ho for some time. It was not too clear what exactly was their relationship although Madam Ho adamantly asserted that there was no intimate physical relationship. Madam Ho of course was the opposite spectrum of the social order from the plaintiff. She by any standard must be termed “a lady of the world”. She had done many, many jobs, some rather lowly. She had worked in karaoke bars, cafes and she had been what she called herself a mamasan. Therefore, she was exposed to, I think in every sense of the word, worldly men as well as the underworld where matters may not be conducted in the normal way of the commercial world or of polite society. 6.The fact that the plaintiff and the defendant were close cannot be disputed. The year 1998 was a critical year because that was the year when the plaintiff was “persuaded” (I am convinced that that is the right word — if in fact it is not too light a word — to describe the transaction) by the defendant to sell his flat for a little bit over $3 million and then to give practically all the proceeds in the form of $3 million to the defendant. It is no coincidence that it was also at the same time that the defendant started her business, namely, established her company in the name of South Coast Travel Agency Ltd with office and staff. It is also no coincidence that that was the time after the business was set up the plaintiff went to work in the company of the defendant and the plaintiff also moved into a flat provided by the defendant, close to the defendant’s home and also having all his meals with the defendant’s family. 7.This coincidence of his selling of his own flat, giving all the money to the defendant and a total new lifestyle for the plaintiff does strongly suggest that the money was given to the defendant as a loan and as a benefit to the defendant but in return the plaintiff perhaps gained the warmth of a new family and where he could regularly go for meals, he was provided with accommodation, and where he had somewhere to go everyday to work even though he was on a meagre salary of $5,000. 8.The impression I have, after seeing the plaintiff and the defendant in court over a number of days is that the plaintiff was weak and not very bright. In fact, I believe that he was below standard in terms of intelligence. I am not sure whether he was not somewhat retarded. He would become confused if he was excited and emotionally I believe he was very much dependent on the defendant. In some ways, I believe he regarded the defendant as a mother, as a girlfriend/wife and as a source of strength. That being the relationship that I find between them, it seems to me that what also comes out is that whereas the defendant was streetwise, smart-worldly and unscrupulous as to whether she was telling the truth, the plaintiff was a fumbling man, not appreciating what was sometimes happening and often not understanding the full picture. If I am to choose between the two of them as to who generally is telling the truth, I have no hesitation in preferring on the whole the evidence of the plaintiff, even though sometimes he might be wrong on details. I would have something to say later about Mr Wong when we come to the relevance of his evidence. 9.With that exposition of the relationship between the plaintiff and the defendant and their respective credibility, I can now turn to the various issues. ISSUE A 10.Issue A in relation to the allegation of the giving of the cash of $1 million is really very straightforward. The central allegation, and it is her allegation that on 5 May 1998, after the $3 million had been put into her account, the plaintiff suddenly immediately afterwards still at the bank asked for the withdrawal of $1 million by her in cash and gave it to him, so that he could give it to some creditor that she alleged she had seen outside the bank. The withdrawal of $1 million cash in those circumstances (when he could have easily himself deposited $2 million instead of $3 million and paid the alleged $1 million for his own bank accounts) just simply does not make sense. 11.I also take note that there is no documentary evidence at all to support what she said about her giving him $1 million. I further take note that in her 1st affirmation, as well as the 2nd and 3rd affirmations, she gave versions of her case which are somewhat different from the one now advanced. The giving of $1 million cash is not a light matter. It seems to me so incredible that this could have taken place. I have no hesitation in rejecting that allegation under Issue A of her having given $1 million cash to the plaintiff on 5 May 1998. ISSUE B 12.In relation to Issue B, out of the $3 million that she received on 5 May 1998 $2 million was alleged by her to be the repayment by the plaintiff to her of various loans that she had given him over the years from 1992 to 1997 amounting to some $2 million. Her principle case on that $2 million was based on page 21 in the defendant’s bundle of documents which is a vital document. It is typed and headed “CHAN WING CHEUNG ALLAN”. Line 2 of that document (excluding the heading) contains what was purported to be plaintiff’s admission of the previous loan of $2,000,000. The document was dated 11 June 1999 and it came about in circumstances which I would describe a little bit later. The important line, that is, the 2nd line is admitted to be in the handwriting of the defendant. That line is certainly not typed although the document was prepared beforehand in the form of a typed document. 13.There is no dispute that the plaintiff signed that document. The dispute between the party is whether when the plaintiff signed it, that line in the defendant’s handwriting containing the admission of the $2 million loan was already there. Madam Ho alleged and gave evidence that when the plaintiff signed the document it was already there. She had written it herself and that this was all witnessed by Wong Chiu on 11 June 1999. 14.The plaintiff asserted to the contrary. The plaintiff asserted that when he signed, that line was not there and that Wong Chiu was not there when he signed. Wong Chiu’s evidence was that he did not see Chan sign. He only signed the document as witness when Chan’s signature and that line in the document were already there. 15.Having, as I said, observed the three of them and particularly the plaintiff and the defendant, I have no doubt that I accept the evidence of the plaintiff on this. In my judgment, that crucial line of admission of the $2 million loan was not there when the plaintiff signed. The case of the defendant on this $2 million loan is weak because apart from that alleged admission at page 21, there was really simply no proper evidence of how the $2 million loan came to be made between 1992 and 1997. The full particularization of many many sums alleged to make up this $2 million loan and the documents in support are totally lacking. 16.I am very doubtful, as I have indicated in the course of the trial, that the defendant had that kind of financial ability, during that period of time in 1992 to 1997, to be able to make that kind of total loan of $2 million to the plaintiff. In the course of her evidence, the defendant repeatedly asserted how well she was doing as a tourist guide and how much she was bringing in every month. She even touched on figures of $200,000 a month given by way of tips and lai-sees from tourists and all sorts of benefits to her as a tourist guide. I do not accept her evidence. I believe she was trying to build up a picture that she was doing financially well in order to persuade the court that she had the means to give that sort of various loans to the plaintiff. So on Issue B, again, I do not accept her case. ISSUE C 17.I now turn to Issue C. This is the matter of the loan of $1.5 million post-May 1998. The defendant relies upon two documents, pages 21 and 23 of the Bundle, to assert that loan of $1.5 million. This of course relates to post-May 1998 and the allegation is that after May 1998 until, perhaps, sometime in 1999, a total of $1.5 million had been lent to the plaintiff by the defendant. Pages 21 and 23 (in respect of two borrowing notes, one for $900,000 and the other for $600,000, making up a total of $1.5 million) are relied upon as evidence of this $1.5 million loan. 18.The circumstances of the signing of these two borrowing notes were both described by Madam Ho and Mr Chan in their evidence. I have no doubt that Mr Chan’s version is the reliable one. In particular he described how this was faxed from the defendant’s office to the defendant’s home (this could be seen with the top fax header line in the two documents), and how it was not prepared by him as opposed to the defendant’s asserting that it was prepared by the plaintiff. The form of those two documents also suggests that there was not a genuine $1.5 million loan but were prepared in such a way (without stating the name of the lender, without the particulars of the lender and with the witness’ name also left blank) as to indicate that these could be used by any holder of the documents, such as money sharks or unscrupulous moneymen to sell these notes and/or to enforce these notes. 19.The total view given to me on these borrowing notes is that the plaintiff signed them in circumstances when he was harassed as well as intimidated by the defendant. The defendant took advantage of the plaintiff’s weakness and pressed the plaintiff and he succumbed to the pressure. The clear picture I have of the plaintiff is that he was a man who, under pressure, would fumble and crumble and he would be susceptible to do what a stronger person, especially a stronger person that he regarded as a friend, as a mother, as a wife, could persuade him to do. I, therefore, accept that these documents were not signed voluntarily and did not generally reflect an admission of the indebtedness of $1.5 million. 20.Just to illustrate how unreal was the $1.5 million alleged loan, one needs only to look at, for example, the part of the case of the defendant alleging that a substantial makeup of the loan of the $1.5 million consisted of rent paid by the defendant to her landlord for the premises rented by her and occupied by him. His case is that the flat was part of the overall deal, when he agreed to give the $3 million loan, i.e. he was going to be given free accommodation, job, free meals with her family, namely that he was going to be cocooned, so to speak. The rental payments, which the parties during the course of the trial called, C11 to C25, consist of various payments made by her starting from April 1998 and up to June 1999 when he moved out of the premises, and basically comprised of deposit and rent, varying from initially $9,500 monthly, then going down to about $9,000 monthly in the subsequent months. 21.There is no contemporaneous documentation whereby any of the parties suggested that these rental payments made by her to her landlord were loans. The lease was certainly in her name and there was no sub-lease to him. He was afterall only getting $5,000 a month as salary (only one month paid). How could he possibly afford to be living in an accommodation costing of over $9,500 or $9,000 a month? What he had said about free accommodation made sense having regard to what sort of person he was and the fact that he sold his flat thereby necessitating accommodation, promised to him to be free. I simply do not accept that there was a pre-arrangement whereby these rental payments were agreed to be loans by her to him and that this continued on with her doing nothing every month in relation to those except to pay the rental payments. So, again, under Issue C, I reject the defendant’s case. ISSUE D 22.I now turn to Issue D. Issue D is the loan of $840,000, alleged to be given by way of cash, consisting of partly some $400,000 from her money, the defendant said, and $300,000 odd borrowed from friends. The defendant relied on the 60 cheques each of $14,000 given by him to her as evidence of such $840,000 loan. There were altogether 84 cheques, 60 given under Issue D ($840,000 alleged loan) and 20 each of $14,000 given under Issue E ($280,000 alleged loan) with another 4 cheques of $14,000 each. The version given by the plaintiff about how the 84 cheques came to be given certainly made far more sense to me than her version. It is to be noted that there were duplication of the dates of the series of the cheques. For example under the Table, which had been kindly supplied to me by Mr Lam for the defendant, particularising the series of cheques under Issues D, E and F (which is a non-existent issue of the giving of the 4 cheques each of $14,000), one can see that there were duplication of cheques (i.e. duplication of dates) for cheques dated 1 August 1999 up to cheques dated 1 July 2001. For something like two years, there were exact duplication of cheques for every month. 23.The version given by the plaintiff is that the duplication came about as a result of his being forced to write new cheques because of the alterations in the old cheques, that is to say, if one looks at the 20 cheques under Issue E in relation to $280,000 and the 4 cheques under non-existent Issue F, one would see there were alterations in the cheques. Mr Chan said he had to get new cheque books and he received two cheque books on 9 July 1999. He then wrote out the 60 new cheques which formed the subject matter of the 60 cheques under Issue D in relation to $840,000 and some 24 of them duplicated the dates of the 4 cheques under non-existent Issue F and the 20 cheques under Issue E. 24.Madam Ho gave very different version. I have no doubt that Mr Chan’s version is correct which explained why those 84 cheques took the form they did and their coming about supported again strongly what Mr Chan told me. 25.The assertion by Madam Ho of the making of the Issue D loan of $840,000 is that there was some alleged miscollection of money by the plaintiff from various travel agents in China and as a result, $840,000 was required by the plaintiff to pay off these creditors. Therefore, she had to get hold of $840,000 and gave that money in cash to the plaintiff. I do not believe a word of what she said about this. There is no documentation to support that and it is such a fantastic story. She even admitted that none of these people were customers of hers and that there were no demands made against her company. There is no substance to this allegation of $840,000 which therefore cast grave doubt as to the giving of the 60 cheques. As I said, it was not difficult for her to obtain those 60 cheques from the plaintiff because he was weak and she drummed up an excuse and extracted the cheques from him. It is even worse when one turns to Issue E，the $280,000. ISSUE E 26.The allegation is that she gave that cash of $280,000 to some alleged stranger who came to collect and the excuse or reason is again that there were some misdeeds by the plaintiff in relation to hotel bookings, and therefore he had to pay some stranger compensation of $280,000. There was no contemporaneous document to support this allegation. The suggestion that she would give such a large cash sum to a total stranger and just obtained from him a receipt (which she has no copy of now) is laughable. She certainly did not strike me as that sort of a woman who is so naïve as to give away that kind of money to a stranger. I totally reject such evidence and again the receiving of the cheques in these circumstances confirms my view of his weakness and his inability to protect his interest vis-à-vis her. She could get practically anything from him, and she did. 27.It is no coincidence that if you look at Issues C ($1.5 million)，D ($840,000) and E ($280,000), they already add up to over $2.6 million. Why do these sums, when added up, come so close to $3 million. In my view, the truth is that she had been building up her case for the possible claim that he or rather his family is bound to make for the recovery of the $3 million. So in 1999, when he was being kicked out of her company and her flat, and his own family was taking him back in, a case was already being built by her in order to resist the likely claim that would be made by his family for the return of the $3 million. 28.But what I find particularly distasteful in the whole case is the matter of $69,500. This was alleged by her to be his stealing from her handbag, on 10 occasions money from her bank account by the use of her ATM card, which then resulted in her making a complaint to the police of theft. That came about in a very strange way because when she made the complaint to the police, his family had already persuaded him (as he had come back into the fold of his family) to issue legal proceedings in this High Court action against her for the recovery of $3 million. 29.What did she do in response? She attacked. The attack took this form : making the allegation that he had stolen from her the ATM card and with the benefit of the passwords somehow that he had gained, obtained on 10 different occasions the total sum of $69,500. The withdrawal of these 10 sums over a period of 2 months can be seen by looking at pages 318 to 320 of the plaintiff’s Bundle, her Smart Bank Account statements. The sums varied from $6,000, $10,000 to, on occasions, $1,000 and $1,500. 30.The plaintiff and the defendant gave various statements to the police including on one occasion when in one of the police statements, there was a line of admission by him that he stole the ATM card. The magistrate rejected the evidence of the voluntariness of the so-called admission or confession. The magistrate threw out the case and the criminal charges. I have no doubt that the magistrate was correct and that there was no substance to this allegation that he had stolen from her bank account with the use of her ATM card on 10 different occasions. The very nature of the suggested transactions that on 10 different occasions he had not only the opportunity but the gall to steal from her a card which had to be returned to her handbag. To succeed in what it was alleged he did, he required not only the stealing of the card and the opportunity to go out to obtain the money but the opportunity to come back to find the handbag still there with no one observing and then restored the ATM card back into her handbag. This was alleged to have taken place not just on one occasion but on 10 separate occasions and when some of the amount alleged have been stolen was trivial compared to what was available in the bank account. 31.I simply cannot possibly accept that there was substance in these allegations. She said she did not take the money with her ATM card from her account and that he did. If he did not take the money as I find, then the only person who could have taken the money must be her. To make an accusation when she had taken the money and an accusation of criminal act or theft where he could go to jail and when she was facing a High Court action of $3 million by him is what I consider a very evil behaviour on her part. 32.It seems to me that if one looks at the case as a whole, having regard to the nature of these two persons, the case that she tried to put before the court on the five Issues must be rejected and rejected with vigor. There is simply no substance in what she said. 33.Finally, if I may just very briefly turn to Mr Wong Chiu. Mr Wong Chiu gave short evidence. It is clear that everyone treated him with a kid glove, not only in relation to his evidence but in relation to anything touching him. The court has very little knowledge about his past or of his exact involvement. My observation is that he is obviously a very shrewd person, of hard character and with a knowledge of the world. He minimised his evidence by saying very little. Insofar as his evidence did not conflict with that of the plaintiff, I accept his evidence. But insofar that his evidence might conflict with the plaintiff, then I certainly do not accept his evidence. On the whole, having seen the plaintiff and heard him at great length, I can find favorably for him and of his evidence. But as I said, Wong Chiu plays, in terms of the relevance to this case, a minimum role. 34.The conclusion, therefore, I have come to is that the five loans alleged by Madam Ho must be rejected. Before I come to the final order, I should say just brief words about what Mr Lam calls the two admitted sums under C3 and C4, i.e. the sum of $84,000 and $15,000. The way the case was pleaded and run throughout by the defendant is to rely on the $1.5 million loan (Issue C) and the two borrowing notes as evidence of such $1.5 million loan. When the particulars were sought, details of how the $1.5 million loan was said to be constituted were given (totally in excess of the $1.5 million). But the case was not pleaded on basis that there were loans C1, C2, C3, C4 and C5 etc., and if one looks at the prayer of the counterclaim that made it very clear. 35.Towards the tail end of the address to me, question was raised by Mr Lam whether the so-called admission of the payment of C3 and C4 sums could be regarded as separate sums whereby I should enter judgment on the counterclaim in relation to those sums. In my view, they could not and they should not. The course of the trial took was certainly on the basis of $1.5 million loan or nothing. It was not a case or even alternative case of many bits of that $1.5 million whichever the court might accept. That is the way everyone proceeded. Therefore, having regard to what I have said, once I rejected the $1.5 million loan, there is nothing left for the defendant on the counterclaim or on the defence. CONCLUSION 36.The conclusion I come to, therefore, is that the counterclaim must be dismissed. There must be judgment to the plaintiff. I award interest on the $3 million at 2% above prime from the date of the Writ. The costs of the whole proceedings must be to the plaintiff. I propose in the afternoon when we resume to do a gross sum assessment of the costs. I would hear the parties on this question.
Mr Francis Yip, instructed by Messrs Thomas Li & Yu, for the Plaintiff Mr Simon Lam, instructed by Messrs Henry Lam & Associates, for the Defendant (I) Appeal by the Defendant to Court of Appeal. Appeal dismissed. Please refer to CACV393/2004. (II) Defendant's appeal to Court of Appeal dismissed. Please refer to CACV65/2005 dated 3 December 2007 |
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