Leung Sik Chung and Another v. Ting Kei Engineering Co Ltd
Read the full judgment text of DCCJ 1629/2004 on BabelCite. This District Court judgment.
1. In this claim the 1 st Plaintiff claims monthly wages and overtime pay as particularised in paragraph 4 of the Statement of Claim totalling HK$86,891.90.
|
DCCJ 1629/2004 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 1629 OF 2004 ----------------------- BETWEEN
---------------------- Coram : Her Honour Judge C.B. Chan in Court Date of Trial : 20th , 21st , 22nd , 25th & 26th July 2005 Date of Handing Down Judgment : 10th October 2005
---------------------- J U D G M E N T ---------------------- 1.In this claim the 1st Plaintiff claims monthly wages and overtime pay as particularised in paragraph 4 of the Statement of Claim totalling HK$86,891.90. 2.The Defendant in defence pleads that the 1st and 2nd Plaintiffs had entered into a partnership with Lee Yeung Tung (“Lee”) and Choi Tsz On (“Choi”), the directors and shareholders of the Defendant for the purpose of contracting with the Defendant to take on work on G1, G2 and G3 site of Container Terminal 9 in Tsing Yi (hereinafter referred to as “the Partnership”). The Plaintiffs had given a Warranty to Lee and Choi that the contracted work would be profitable. The Defendant obtained the contract from the principal contractor Hyundai (hereinafter referred to as “the Contracted Works”). The Defendant pleads that the 1st Plaintiff was under the terms of the partnership agreement not entitled to any wages for his work on the site. The Defendant pleads that the 1st and 2nd Plaintiffs on behalf undertook with the Defendant that they would pay their shares of the wages and other expenses to the Partnership after they had received payment on their own contract and the Partnership would repay the money advanced by the Defendant to the Partnership. The Defendant pleads that the Partnership suffered a loss of $553,355.71. The Defendant counterclaims against the 1st Defendant for this sum and in the alternative damages. In the final submission of the Defendant’s Counsel, the Defendant’s Counsel stated that the Defendant withdraws the claim for damages for breach of the Warranty but seeks damages for breach of the undertaking given by the 1st Plaintiff aforesaid. 3.In the trial, the 1st Plaintiff himself gave evidence and did not call any witnesses. The Defendant called Lee and Choi to give evidence and also called one Lam Chuen Yan a former partner of the 1st and 2nd Plaintiffs in 紹榮土木工程公司 (hereinafter referred to as “Siu Wing”) to give evidence. The Issues
Evidence of the 1st Plaintiff 4.The 1st Plaintiff adduced his three witness statements into evidence and confirmed its contents to be true. The 1st Plaintiff is semi-literate and had little formal education. 5.He stated that he and the 2nd Plaintiff did not have funds to enter into any subcontracting work after their last contract at site RIB of Container Terminal 9 where they failed to recover all that was due to them. Hence they suffered financial pressure and in fact the 2nd Plaintiff subsequently became bankrupt. 6.He stated that Lee contacted the 2nd Plaintiff in about February 2003 to discuss about contracting a job at site G1 to G3 of Container Terminal 9. However they stated that they could not take the risks of contract work. They refused the invitation to enter into partnership to take on this contract. However they stated they were willing to become employees of the Defendant in respect of the contracted work. Consequently, the 1st and 2nd Plaintiffs were employed as foremen of the Defendant. The Defendant agreed to pay them a monthly salary of $20,000 and overtime pay of $160 per hour. The employment was for the duration of the contract. 7.He started work at the site from 18 February 2003. The contract was completed on 30 May 2003. Despite chasing for their wages, they were not paid their salary after completion of the contract. 8.The 1st Plaintiff stated that in November and December 2003, Lee and Choi told the Plaintiffs that they must assist them to finalize the accounts （對數）of the Project so that Lee and Choi could report to other shareholders of the Defendant before the Plaintiffs could take back their salary. The Plaintiffs agreed and signed on some documents of the Project at pages 210 to 226 of the Bundle (“BD”). 9.The 1st Plaintiff stated that his role in finalizing the accounts was to confirm the expenditure of the Project. During work on the site, the 1st Plaintiff signed a few documents as a “foreman” but he never signed on any cheque. 10.After finalizing the accounts, the Defendant refused to pay salary to the Plaintiffs. Shortly afterwards, the Defendant suddenly claimed that the Plaintiffs were as “partners”. Choi handed over an “alleged account of partnership” to the 1st and 2nd Plaintiffs to sign. But they refused to sign. This is at page 184 of the BD. 11.The Plaintiffs sought assistance from the Labour Department. The officer Ms Yip in the Labour Department could not succeed in mediating the dispute. The case was eventually heard by the Labour Tribunal and transferred to the District Court because of the Defendant’s claim of a partnership and their counterclaim. Evidence of Choi Tsz On (“Choi”) 12.The two witness statements of Choi were adduced as evidence-in-chief. 13.It is worth noting that the written witness statements of Choi and Lee are identical. Each of them did not give witness statements without reference to the other. Or alternatively, their solicitors must have helped in some way to draft their witness statements in identical terms. This is something that is to be discouraged as there is no independence of thought and recollection on the part of each of these witnesses. 14.His evidence-in-chief states that the 1st and 2nd Plaintiffs wanted to be the subcontractor of Hyundai in the contracted work at site G1, G2 and G3 of Container Terminal 9. However they lacked the requisite experience, reputation and they did not meet the qualifications required by Hyundai to be its subcontractor. In January 2003, the 1st and 2nd Plaintiffs invited Lee and Choi to enter into a partnership using the name of the Defendant to seek a contract with Hyundai in respect of the Contracted Work. The parties therefore entered into a partnership the terms of which were pleaded in para 6 of the Amended Defence. 15.The Defendant obtained the contract from Hyundai. Work on the construction site commenced on 18th February 2003. Workers came on site then. 16.In early March, the Partnership needed to pay wages of its workers. The 1st and 2nd Plaintiffs had not received payment from their former principal contractor and they lacked capital. The 1st and 2nd Plaintiffs requested the Defendant to advance money to the Partnership by paying the wages and other expenses for and on behalf of the Partnership. They on behalf of the Partnership undertook with the Defendant that they would repay their shares of the wages and other expenses to the Partnership after they had received the subcontract payment from their former principal contractor . The Partnership would repay the money advanced by the Defendant to the Partnership. 17.The contract was completed in May 2003. 18.Between September, October, Lee and Choi photocopied all the documents related to the Contracted Work and delivered these to the 1st and 2nd Plaintiffs for accounts. In November and December after going through the accounts they found a loss in the sum of $553,355.71 incurred in the Partnership and in the loan from the Defendant. When the four partners went through the accounts they ascertained all the accounts and verified the loss. The Partnership failed to repay this to the Defendant. The 1st and 2nd Plaintiffs stated that the Defendant owed them wages. On the 9th January 2004, the parties attended at the Labour Department for mediation and there, the 1st Plaintiff admitted the existence of the Partnership. Evidence of Lee Yeung Tung 19.His evidence-in-chief adduced from his witness statements was identical to that of Choi. Evidence of Lam Chuen Yan 20.He was the former partner of the 1st and 2nd Plaintiffs in Siu Wing. His evidence has little relevance to the matters at issue in this action and he obviously has a contention with the 1st Plaintiff in relation to the partnership accounts of their former partnership in Siu Wing. His evidence was full of his frustration and anger at the 1st Plaintiff related to those accounts. Further, the content of his evidence in relation to the alleged partnership is hearsay. I do not give any weight to his evidence because of the fact that he was very angry of the 1st Plaintiff and his evidence was hearsay. The 1st Issue 21.In coming to my finding on this issue, I assess the overall evidence in this case. Respective Counsel have very helpfully set out the pros and cons of acceptance of the evidence of the 1st Plaintiff’s case as against acceptance of the Defendant’s case. 22.I shall analyse these as assisted by the parties’ Counsel. A. Evidence that Points to the 1st Plaintiff as Employee (1) Name Card The 1st Plaintiff was given a Name Card. It is at page 161 of the BD. The company name stated in the name card is the name of the Defendant. The 1st Plaintiff was given the title “Site Foreman”. The Defendant’s Counsel submitted that the 1st Plaintiff admitted under cross-examination that a boss of a company could give itself whichever title it wanted to. However, in this case, the 1st Plaintiff was issued a card in the name of the Defendant. The 1st Plaintiff was never a boss of the Defendant. The evidence was that the Defendant gave him the Name Card and he had not printed the Name Card himself. (2) 1st Plaintiff’s I.D. Card When the 1st Plaintiff commenced work on the site, the Defendant took the 1st Plaintiff’s I.D. Card to record its details. The 1st Plaintiff’s Counsel submitted that this is the usual procedure when an employee starts employment. The Defendant’s Counsel submitted that this situation could have happened whether the 1st Plaintiff was employee or not. (3) Evidence of Salary of the 2nd Plaintiff Pages 55 and 85 show a wages record of the Defendant in the Construction Work. Choi states that the wages of the workers were paid by the Defendant. On the 4th line of the wages record at pages 55 and 85 (identical documents) is the name of the 2nd Plaintiff and the words “對人工”, meaning “on account of wages”. The Defendant’s case is that neither the 1st nor 2nd Plaintiffs would be paid any wages as they were partners. In the case of the 2nd Plaintiff, Choi and Lee both said that the 2nd Plaintiff was in need of money so Lee said that he lent the 2nd Plaintiff a personal loan. The loan receipt evidencing the loan was produced just before trial at page 771 of BD – 2. It shows two loans one for $34,000. This states that it is a personal loan and had nothing to do with the Company. It is dated 28 Feb 2003 and signed by the 2nd Plaintiff. The second one is in the sum of $6,000. It is stated to be a personal loan and dated 28 February 2003. However in the wages record at pages 55 and 85 respectively, the item of $34,000 loan was record “對人工”hence an advance against wages. (4) No Written Partnership Agreement The terms of the Partnership were pleaded and contained specific terms related to apportionment of respective shares and a 3% profit share to the Defendant for using its name. Such being the case, it is surprising that such terms are not put into writing and signed by the purported parties. This is particularly surprising since the parties had not ever worked as partners before. Choi said that the original intention was to form a limited company, however the parties could not agree on a name. Even more surprisingly, Lee stated under cross-examination that the terms were drawn up by the 1st and 2nd Plaintiffs refused to sign. If even according to Lee the 1st and 2nd Plaintiffs refused to sign the written terms drafted by the Defendant, it would suggest that the parties had not come to a consensus on the terms. Choi’s evidence that the parties could not agree on a name for the company to be formed further suggests that the parties were not at one. (5) Wages of Workers Paid by the Defendant The workers went to the Labour Department in June 2003 to claim for their wages against the Defendant. The Defendant entered into settlements with the workmen and in the receipts signed by the workmen in full and final settlement stated that the Defendant was the direct employer of these workmen. It showed that the Defendant did not disclose to the Labour Tribunal mediation officer related to the claims of these workmen that the Partnership was the direct employer of the workmen. (6) Usual Footprints of Partnership Missing The 1st Plaintiff worked as a foreman on site but did not participate in any management or decision making as is usual for partners in a partnership business. There was no business registration of the Partnership. No bank account was issued in the name of the Partnership nor was there a joint bank account of the alleged partners. Lee was an experienced businessman having had his own business for 10 years as boss of a construction company. The only explanation that was given by Choi was that they were too busy to go through these procedures. All transactions and management as well as control in the Construction Work were handled directly by the Defendant. The workmen were paid by the Defendant. When the claim for wages aforesaid were filed by the workmen in the Labour Department, the Defendant never raised the issue or question to them or to the Labour Department that the alleged Partnership was the direct employer of the workmen. (7) Late Disclosure of Minutes of Shareholders’ Meeting The Defendant only discovered the Minutes of the Shareholder’s Meeting just only before the trial. It was allegedly prepared for a meeting of Shareholders on 18th February. This meeting to consent to such a million dollar project did not comply with all the statutory requirements for holding such a meeting, such as giving 14 days’ notice and notification of conflict of interest. No reasonable explanation was given for this. No reasonable explanation was given for late discovery. This was not mentioned in the witness statements of Choi or Lee. The Plaintiff’s Counsel submitted that the fact that this was discovered so late without mention of this meeting in the witness statement was suspect. (8) Notes of Proceedings of Labour Tribunal Hearing The Plaintiff’s Counsel submitted that at the Labour Tribunal Hearing (see notes of proceedings at page 197 BD, Choi who was the Defendant’s representative, stated in answer to the Presiding Officer’s question whether the Defendant contracted out the Contracted Works to the Partnership said, “當時原意有”. Lee then interrupted and caused Choi to change his answer. Lee was the boss of Choi. It was not surprising that Choi would say what Lee said. If Choi stated that “it was the original intention of the Defendant to contract out the Contracted Works”. This suggests that finally it did not do so. B. Evidence That Point to the Existence of a Partnership (1) No Wage Payment to the 1st Plaintiff Everyone in the Contracted Works was paid except the 1st Plaintiff. However, the 1st Plaintiff’s explanation was that he was employed on a monthly basis and the other workmen were casual workmen. The Defendant informed him that the 1st and 2nd Plaintiffs would be paid but told them to wait because they were financially tight. Even Mr. Y.K. Wong, a Pakistani employed by the Defendant as a quantity surveyor was fully paid. The said Mr. Y.K. Wong was formerly an employee of Siu Wing and according to the 1st Plaintiff was one of the workmen of Siu Wing who followed the 1st Plaintiff to join the Defendant as an employee. He as quantity surveyor would command a higher salary than the 1st Plaintiff who was a foreman. (2) Claim Not Filed at the Labour Tribunal with Other Workmen The 1st Plaintiff did not file his claim at the Labour Tribunal along with other workmen who filed their claim in June. The 1st Plaintiff stated that the Defendant asked him to give them time and Defendant would pay him when they had received payment from Hyundai. (3) Signature on Accounting Documents of Contracted Works It was the Defendant’s case that the 1st and 2nd Plaintiffs signed the accounts as a partner in order to agree to them. The 1st Plaintiff had signed on the account documents at page 210, 213, 216, 217 and 218. These documents related to expenditure. The 1st Plaintiff’s evidence was that he assisted the Defendant to finalize accounts in the capacity of an employed foreman only. He stated that Lee and Choi represented to him that they needed to report to other shareholders and directors. It is not in dispute that the Defendant has four shareholders. These include Lee with 1,350 shares, Choi with 600 shares, Lee’s wife Wong Mei Chun with 600 shares and one Wong Man Hon Frederick who held 450 shares. The 1st Plaintiff stated that Lee and Choi undertook to pay him his wages after the accounts were finalized. The 1st and 2nd Plaintiffs also signed on documents at page 211, 212 and 215 of BD. The 1st Plaintiff’s evidence was that he signed to confirm deliveries stated therein. The Defendant’s Counsel stated that the Defendant had a quantity surveyor Mr. Y.K. Wong who is the suitable person to sign on these whilst the 1st Plaintiff was only a foreman. Why would a foreman sign on these. The Defendant’s Cunsel also cross-examined the 1st Plaintiff on pages 212 and 215 of BD. Both of these invoices already had the signature of Mr. Y.K. Wong to confirm receipt of the goods therein. The signature of Mr. Y.K. Wong on the “Received” chop was dated a date commensurate with the date of delivery. Why would it be necessary for the 1st and 2nd Plaintiff to sign such invoices months afterwards in October or even after. Further the Defendant’s Counsel submitted that the other shareholders included one, who was the wife of Lee and Mr. Wong Man Hon, Frederick who only owned 450 shares. The combined shareholding of Lee, Choi and his wife far exceeded that of Wong Man Hon who was not even a Director. (4) Notes of Interview at Labour Department page 248-249 of BD The Defendant’s Counsel submitted these notes recorded an admission of the 1st Plaintiff before Ms. Yip Ching the mediation officer of the Labour Tribunal that he had formed a partnership with Lee, Choi and the 2nd Plaintiff. Looking closely at the notes at page 248, it stated that “the 1st Claimant (1st Plaintiff) “revealed that the 2nd Claimant (2nd Plaintiff) and he was invited by the D1 (Choi) and D2 (Lee) to set up a Company for the construction work at Container Terminal 9. The contract was signed by the Defendant and their new company never set up. After the work finished, they were told that the project recorded a loss and no profit would be given to them.” The notes state that there was an invitation to set up a company. The company was never set up. However subsequently Lee and Choi told the 1st and 2nd Plaintiffs that there was a loss and no profit would be given to them. There is no clear or direct admission that the partnership was proceeded with. It was clear that after the Contracted Works were completed, the Defendant informed the 1st and 2nd Plaintiffs of the loss and stated that no profit would be paid. (5) Acceptance of Documents of Contracted Works Choi delivered to the 1st and 2nd Plaintiffs a set of documents related to the Contracted Works as at page 250 of BD. Both the 1st and 2nd Plaintiffs signed receipt of the documents. It was stated in the Statement that the receipt of documents was acknowledge and the documents were for “對數之用” or for going through the accounts. The 1st Plaintiff said that he only received them and did not ask for them. The evidence was that Choi delivered the documents to him whilst he was working at another construction site. Finding on the 1st Issue 23.It is the onus on the 1st Plaintiff to establish on a balance of probability that when they entered to work on the work site to do the Contracted Works, they entered into an employment contract with the Defendant as employees with clear terms as regards the monthly salary and other employment terms. I formed the impression from the evidence and from the pleadings and witness statement that there was no clear employment agreement between the 1st Plaintiff and the Defendant when he entered on site. I formed the impression from the evidence that the statement of the monthly wage and overtime as adduced into evidence and pleaded by the 1st Plaintiff was not a true account of an agreed term between the parties but the 1st Plaintiff first fabricated the salary amount and overtime when he filed the claim in the Labour Department. In my view, were the 1st Plaintiff an employee, it is strange that he did not immediately file his claim with the Labour Department soon after the Contracted Works has ended or at least soon after the workmen had successfully obtained their settlement on wages. The evidence shows that between October and December the parties had many meetings when the 1st and 2nd Plaintiffs signed documents of accounts. The 1st Plaintiff’s explanation as to why he signed these accounting documents is not convincing. 24.It may have been the case that neither the 1st Plaintiff nor Lee and Choi of the Defendants disclosed the whole truth. It seems to me that were the 1st Plaintiff an employee and a foreman, there was no possibility that he would accept the documents related to the Contracted Works as listed out in the Schedule of Documents receipt of which was acknowledged by him at page 250 of BD. The Schedule was stated for the purpose of “對數之用”. The 1st Plaintiff stated that he did not ask for them. However he acknowledged receipt of them by signing on the document at page 250 of BD. He did a positive act by signing in acknowledgement of its receipt on 12 October 2003. 25.The hearsay notes of Ms. Yip Ching of the Labour Tribunal though hearsay stated something about the situation between the parties. To some extent it supports the Defendant’s case. 26.I considered the Name Card of the 1st Plaintiff. It was issued by the Defendant in its name and the 1st Plaintiff was stated to be a foreman of the Defendant. Superficially on the surface, it appears to support the 1st Plaintiff’s contention. However, it is clear that agreement between the Defendant and Hyundai did not permit subcontracting of the Contracted Works by the Defendant without permission of Hyundai. The 1st Plaintiff even according to the alleged partnership terms was required to work on site and he did fulfil the role of foreman. The Name Card gives status to the 1st Plaintiff on site as foreman of the 1st Defendant when the Partnership could not have been openly acknowledged pursuant to the terms of agreement between the Defendant and Hyundai. 27.I consider all the other aspects of the case stated to be in favour of the 1st Plaintiff’s case stated aforesaid and I considered the arguments of respective Counsel. Despite that I come to the conclusion that on the balance of probability, more likely than not, the parties had discussions related to a partnership and had formed an agreement on the basis of which the 1st and 2nd Plaintiffs entered the site to work as a partner taking on the title of site foreman. It is clear however from evidence of Lee and Choi that the parties could not agree on the name of a company to be formed and Lee stated that the 1st and 2nd Plaintiffs refused to sign any written terms of partnership. Further from the statement of Ms. Yip the officer of Labour Tribunal at page 248 of BD the company which was intended to be formed was never formed. In the notes of proceedings of the Labour Tribunal at page 197 of BD referred to earlier, Choi stated that the original intention was to form the partnership. From the tone of his evidence it seemed to suggest that the original intention was not put into effect. As referred to earlier, there were no usual footprints of a partnership referred to earlier. The evidence did not suggest that the 1st Plaintiff had participated in the management of the partnership. On the basis of the aforesaid, it seems to me that the 1st and 2nd Plaintiffs had entered into a partnership agreement with Lee and Choi to take on the subcontract the Contracted Works. In my view neither Lee, nor Choi nor the 1st Plaintiff gave truthful evidence of the whole situation and their evidence failed to disclose the whole truth. 28.As far as the 1st Plaintiff’s claim of an employment agreement between himself and the Defendant is concerned, I find that the 1st Plaintiff’s evidence is not truthful and I am of the view that there was no employment contract in the terms stated by him. The 2nd Issue 29.The Counterclaim by the Defendant against the 1st Plaintiff, one of the partners of the Partnership, relate to the entire loss of the Partnership. This Counterclaim is on the basis that a loan was given by the Defendant to the Partnership at the request of the 1st and 2nd Plaintiffs who asked it to pay the wages and other expenses for and on behalf of the Partnership. It was pleaded in paragraph 6A of the Amended Defence that “the 1st and 2nd Plaintiffs on behalf of the Partnership undertook with the Defendant that the 1st and 2nd Plaintiffs would pay their shares of the wages and other expenses to the Partnership after they had received the sub-contracting sum from . . . and the Partnership would repay the money advanced by the Defendant to the Partnership…” 30.In my view it seems highly unlikely and it is not believable that the 1st and 2nd Plaintiffs would undertake on behalf of the Partnership with the Defendant not only that they would repay their shares of the wages and other expenses to the Partnership, but that they would undertake on behalf of the Partnership to repay the Defendant the money borrowed from the Defendant to the Partnership. In my view this pleading is contrived in order to establish a cause of action in favour of Defendant against the 1st and 2nd Plaintiffs for the entire loss of the Partnership. The 1st and 2nd Plaintiffs may have sought help from the Defendant towards their own contribution of capital but not in the terms as claimed by the Defendant. There was no conviction of truth either in the witness statements of Lee and Choi or in their oral evidence related to this. In my view neither Lee nor Choi were entirely truthful or reliable witnesses. Lee in particular showed when cross-examined that he changed his evidence as his evidence progressed in order to present himself and his case in a favourable light at the expense of truth. There were many instances in his evidence that gave me the impression that he was lying. 31.An example of this was when Lee was cross-examined on the receipt signed by a workman in the Labour Department to acknowledge receipt of the settled wages at page 644 of BD-2. It stated the Defendant as the employer. Lee at first stated that he had not read it as Choi handled this. When it was pointed out to him that it states that the Defendant was the employer he replied that when this was brought back, he told Choi that the receipt should not state the employer as the Defendant but should state the name of the 4 partners. It was pointed to him that he had earlier said that he had not seen the document and then he said he saw it. He became evasive and gave an unrelated answer. When he was asked the same question again, he said that he did not have to read it. When the workmen sued the Defendant, he told Choi they should sue the Partnership first and then the Defendant and then Hyundai. He denied having read the document. This is just one instance of many sudden shifts in evidence to cover up his tracks. 32.In the same way, I feel that Choi is totally influenced by Lee who is his boss and is the agent and servant of Lee. I do not find his evidence independent nor reliable. I find that there is no reason for the 1st Plaintiff to give the Undertaking that the Partnership would repay the Defendant of the money owed by the Partnership to the Defendant as alleged. Lee and Choi being the Directors and shareholders of the Defendant, sought in this action to claim the entire amount allegedly owed by the Partnership to the Defendant when they as partners were jointly and severally liable for the debts of the Partnership. They have a vested interest in the Defendant’s claim in seeking the 1st Plaintiff to take full responsibility for their share of the loss of the partnership. Their evidence is highly unreliable. As interested parties in the Partnership and Directors in the Defendant the way the claim is framed is unconscionable. This shows their lack of conscience and integrity. I therefore find that the evidence in support of the Defendant’s case related to the Undertaking cannot be believed. It is also important to note that there was no cross-examination of the 1st Plaintiff on the alleged Undertaking at all. The Defendant’s case related to the Undertaking was not put to the 1st Plaintiff. He was not given a chance to answer the Defendant’s case on it in cross-examination. I find that on the balance of probability the Defendant’s case on the Undertaking is not believable and not accepted by me. The 3rd Issue 33.As Lee and Choi have a vested interest in the Defendant’s claim in seeking the 1st Plaintiff to take responsibility for their share of the loss of the Partnership, their evidence is highly unreliable. They have demonstrated a total lack of conscience in the way they as Directors of the Defendant set about their counterclaim. I have also found their evidence in other areas to be unreliable and incredible. They produced a Minutes of Shareholders Meeting at page 773 of BD – 2, authorizing a loan by the Defendant to the Partnership in relation to work on the Contracted Works. This was produced at the last minute before the trial without a reasonable explanation as to why it was not discovered earlier. The Minutes minuted a meeting that took place on the 5 March 2003 when the Shareholders of the Defendant agreed to lend money to the Partnership for the Contracted Works. However, the wage record at page 55 of the BD shows that the payment of wages of the workmen on the work site have been made by the Defendant in February even before the date of such meeting. For the reasons aforesaid I find Lee and Choi to be unreliable witnesses on all issues in this trial. For these reasons, I find these Minutes to be unreliable. 34.Having found that the 1st and 2nd Plaintiffs did not give the Undertaking aforesaid, I note that it is the Defendant’s case that the Partnership through Lee and & Choi borrowed the loan from the Defendant. There is no evidence of any express authority given to Lee and Choi to borrow money for the Partnership business. Defendant’s Counsel referred to a passage at paragraph 49 of Vol 35 of Halsbury’s Laws of England as follows: ‘The implied power of a partner extended to the borrowing of money for the purposes of the business, where the business is of a kind that cannot be carried on in the usual way without such a power, but not for the purpose of providing the capital to be contributed by any individual partners.’ 35.It is clear from the passage cited that there is no implied power granting either Lee or Choi and/or both, of borrowing from the Defendant towards capital contribution of partners to the Partnership. Further such implied power of a partner extended to the borrowing of money for the purposes of the business, only exists where the business is of a kind that cannot be carried out on the usual way without such a power. I find that there is no evidence in support of the contention that the business of the Partnership is of a kind that could not be carried out on the usual way without such a power. Further there is no pleading in the Amended Defence and Counterclaim of the fact that the Partnership business is of a kind that could not be carried out in the usual way without such power. 36.The Defendant’s Counsel conceded that if the Court found that both Lee and Choi did not have the authority to borrow the loan(s) from the Defendant, the 1st Plaintiff could not be personally liable for the loan. 37.I am not able to find the factual basis of the loan as alleged by Lee and Choi. I do not find that the amount of all the expenditures were all loans from the Defendant to the Partnership as alleged by Lee and Choi. I do not find that there is clear evidence that any loan(s) advanced, if such were advanced were not loans to partners for their contribution to the Partnership capital. I find that the Defendant has not established either the factual basis for the counterclaim nor the legal basis therefore. 38.Having found aforesaid, I give judgment hereunder, The 1st Plaintiff’s claim against the Defendant be dismissed with an order nisi that costs of the claim be to the Defendant to be paid by the 1st Plaintiff to be taxed if not agreed with Certificate for Counsel. The Defendant’s Counterclaim against the 1st Plaintiff be dismissed with an order nisi that costs of the counterclaim be to the 1st Plaintiff to be paid by the Defendant to be taxed if not agreed together with Certificate for Counsel.
Representation: Mr. Matthew Tse instructed by Messrs. Christine F.L. Ip & Young for the 1st Plaintiff. Mr. Wong Wai Ming instructed by Messrs. Ko & Chow for the Defendant. |