Harnish M. Patel v. Mai Mai Chiu

DCCJ 6058/ 2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 6058 OF 2004

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BETWEEN

Coram : Deputy District Judge E. Yip in Chambers

Date of Hearing   :  29^th March 2006

Date of Judgment :  7^th April 2006

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REASONS FOR DECISION
ON DEFENDANTS’ APPLICATION
TO SET ASIDE SUMMARY JUDGMENT AND
CHARGING ORDER

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The plaintiff respondent's case

1.The plaintiff is a man aged 66.  The defendant is a woman aged 47.  He lived in England.  She lived in Hong Kong.  Through internet-dating, they were brought together.  He proposed marriage to her.  They almost got married but for her mother’s dislike of him.  They broke up.  At around the same time, he lent her a sum of money at the market interest rate.  She failed to repay.  He caused a Writ of Summons to be served on her address.  She failed to respond.  He obtained default judgment and a charging order absolute of a property (“the Property”) jointly owned by her and her ex-husband.  She now applies to set aside both orders. 

The defendant applicant's case

2.When they were contemplating marriage, she obtained an offer for a job, in Hong Kong.  He asked her not to take up the offer and live with him abroad.  He would give him the sum of money in question as compensation.  She thus refused the offer.  They broke up.  She did not have to repay. 

A note

3.The sum in question had been US$77,000.  The plaintiff had agreed to have US$5,000 deducted as prior expenses incurred by the defendant.  For the present application, the circumstances behind the deduction are irrelevant.  The plaintiff is content to claim US$72,000 as per Writ of Summons.   

The defendant applicant's grounds

4.The default judgment was irregularly obtained because the Writ was not served at her usual and last-known address.  She was traveling most of the time.  She had kept no address in Hong Kong and her ex-husband, who resided there, had failed to tell her of the Writ. 

5.Alternatively, if the default judgment was regularly obtained, the defence had a real prospect of success on merits. 

The plaintiff respondent's version of facts

6.He was divorced.  He had 2 daughters, both in their thirties.  He had worked as a community pharmacist in many countries.  He was of good professional standing.  He was the owner of a pharmacy in U.K. for 18 years before he retired [His 1^st affirmation: B55, para. 2]. 

7.In February 2004, he met her via an internet-dating agency. 

8.In April 2004 – May 2004, she stayed in his home in Eastbourne, England.   They had physical relationship. 

9.On 1 June 2004, she obtained an offer for a job as the Strategic Consultant of a cleaning company in Hong Kong for 1 July – 31 October 2004 [B53 – 54].  Her monthly basic salary would be HK$20,000.  For each successful tender, she would get a bonus equivalent to 5% of the yearly contract sum or HK$50,000, whichever the lower.  She would be reimbursed for reasonable traveling and entertaining expenses.  

10.On 3 June 2004, he proposed marriage to her.  He asked her not to take up the offer but to live with him abroad. 

11.On 5 June 2004, she told him that his mother did not like him.  He and she had a big argument.  She told him that she would not marry him.

12.In mid-July 2004, she asked him for a loan to buy a property in Hong Kong as an urgent investment.  She promised to repay with interest.  He asked to put his name onto the title deeds but she said it was not possible because he was not in Hong Kong to sign.

13.On around 22 July 2004, she told him to hurry up to mail her the money.  She asked to have US$75,000 but he misspelt her name on the cheque.  She was very upset and accused him of lying and deliberately misspelling her name to avoid making the loan.  He asked her to calm down and take out a bridging loan for a few days.  She told him she would see him in Florida on 4 August 2004.  He would be in a  conference there.  Upon her arrival, he would wire-transfer the money to her bank account in Hong Kong.    

14.On 4 August 2004, they met up in Florida.  She returned the misspelt cheque to him.  She asked him to wire-transfer a total of US$77,000, namely US$2,000 more than previously asked.  He found her greedy.  

15.On 6 Aug 2004, he wire-transferred to her the sum of US$77,000 to buy the property [B72]. 

16.A few days later, she told him that their relationship would end immediately if he asked her to repay it.  He no longer trusted her.  He felt duped.  She had obtained money from him by false pretences.  Her motives seemed to be either to defraud him, use it as leverage for procuring marriage or to build a nest egg for herself if marriage occurred and broke down [His 1^st affirmation: B60 – 61, para. 16].

17.Despite these, he still took her to Belize when he attended a convention there.  She was eager to return to Hong Kong to tend her aging and dying grandmother.  He persuaded her to stay longer.  He did not want their relationship to end before she fully repaid him.  He tried to maintain some semblance of relationship with her so that he could have some dialogue to have her repay the loan [His 1^st affirmation: B61, para. 17].

18.On 5 September 2004, he sent her an email asking for repayment of the loan  [B110]. 

19.On 2 November 2004, he sent her an email asking for repayment of the loan and threatening to take legal proceedings after 48 hours [B74]. 

20.On 17 November 2004, the Writ of Summons was served at the address of the Property by inserting of the same into the letter-box. 

21.On 22 December 2004, she made an affirmation [B34, para. 15 – 16] to state, for the first time ever, that the money was his compensation for her job, not a loan. 

The plaintiff respondent's version of facts

22.She held a master degree in Applied Finance in Macquarie University, Australia.  After retirement from civil services, she worked as a consultant.  She was financially sound and traveled a lot for pleasure.

23.In 1997, she was divorced from a Mr. Yip after 18 years of marriage.  Mr. Yip was an MBA holder and of good standing in many professional bodies.  They agreed not to tell their friends and relatives of this.  They led separate lives but still lived under the same roof of the Property.

24.On 4 August 2004, she moved out of the Property and left Hong Kong.

25.According to the immigration record [B49], she was in Hong Kong:

(1)   between 30 August and 8 September 2004;

(2)   between 19 October and 26 November 2004. 

Between 19 October and 26 November 2004, she lived in her friend’s home in Tuen Mun [Her 3^rd affirmation, para. 5: B112].  She did not contact her family or Mr. Yip as she felt shameful and depressed due to the breakup with the plaintiff.

26.On 17 November 2004, the Writ of Summons was served at the address of the Property. 

27.On 26 November 2004, she left Hong Kong for Europe. 

28.On 3 November 2005, she first learnt of the present proceedings through Mr. Yip.  

29.On 4 November 2005, her solicitors wrote to seek the case papers.  

30.Her mother harboured no dislike for the plaintiff.  Upon hearing of her prospective marriage and settlement abroad, her mother even helped her to pack her books and belongings.   

31.She did not buy any property in Hong Kong in June – July 2004 because she was about to settle abroad upon marriage to the plaintiff.  

32.She had blocked her email address in about October 2004 as she did not want any contact with him.  She was not aware of his 2 emails sent to her, one dated 5 September 2004 asking her to repay the loan [B110] and the other one dated 2 November 2004 asking her to repay the loan and threatening to take legal proceedings after 48 hours [B74]. 

33.The money was as a compensation, not a loan. 

Was the default judgment regularly obtained?

34.She stated that on 4 August 2004 she had moved out of the Property and left Hong Kong.  There can be no dispute that on 17 November 2004 the Writ of Summons was served at her usual and last-known address.  Up to 26 November 2004, she had lived in her friend’s home in Tuen Mun.  She did not contact her family or Mr. Yip during that period.  However, she had contacts with them after that period from time to time. 

35.It is hard to believe that she did not have notice of the Writ of Summons until 1 year later.  I find it properly served and that she had been afforded an opportunity to take steps to contest.  The default judgment was regularly obtained.     

Whether the defence had a real prospect of success on merits 

36.I consider the defendant’s case.  Counsel for the plaintiff respondent submits that at the present juncture I am in a position to determine that she is not a credible witness and reject her defence.  Counsel puts forward 2 attacks on her credibility. 

37.First, his affirmation [1^st affirmation: B62, para. 21 – 22] had alleged that he had on 5 September 2004 sent her an email [B110] asking for repayment.  Her affirmation [2^nd affirmation: B87 – 90] subsequent to it did not deal with this point.  She merely stated that such allegation, amongst others, was not true.  She communicated with him mostly by phone and rarely by emails [para. 17 – 18].  However, her last affirmation [3^rd affirmation, para. 4: B112] stated that she had after the breakup, in early September 2004, blocked her email address, and in about October 2004, abandoned her email address, in order to avoid contact with him.  Counsel submits that her 2 affirmations are inconsistent and incredible on this aspect.   I agree with this submission, and the more so because, in the absence of evidence that her email address was exclusively for him, it is hard to believe that she would not read the emails in the inbox before blocking or abandoning it permanently.   

38.Second, she stated [Her 2^nd affirmation, para. 21: B90] that she had never resided at 187a Kingston Road, Surrey.  Therefore she did not know of a parallel claim against her taken out by him in U.K. and served on the aforesaid address in Surrey.  However, she stated [Her 3^rd affirmation, para. 17: B114] that such an address was the residence of a friend.  She used this to receive her driving licence in U.K.  She had stayed there (usually for 2 – 3 days) on each occasion.  I agree with this submission. 

39.There is some force in the plaintiff’s submission that these reflect poorly on her credibility. 

40.I consider the plaintiff’s case.  He was a man with ample social, professional, and business experience.  He was doing it rather business-like, by charging her the market rate of 5% interest.  Before he wire-transferred the money, he had already felt that she was greedy in asking for an extra US$2,000, making a total of US$77,000.  He could have refused to lend to her.  Defence counsel also refers to his having worked very hard and honestly all his life to save the sum for his retirement [His 2^nd affirmation, para. 16: B96].  I find it hard to believe that he would be convinced by her explanation (that he was not in Hong Kong to sign) and hence not insisted on signing on the title deeds to secure his loan.  Given the breakup, it is hard to believe that he was still willing to make this loan without security, an I.O.U., or any record in writing.  These reflect poorly on his credibility. 

41.His counsel refers to his email dated 5 September 2004 [B110], which reflected his view of its being a loan.  Before any cross-examination of him, this email cannot go any further than to reflect his view 1 month after the alleged loan of 6 August 2004.  The primary focus must be on his view on 6 August 2004.   

The Conclusion

42.At the present juncture, I am unable to determine that the defendant would have no real prospect of success at trial. 

43.I set aside the default judgment and the charging order.  I grant leave to the defendant to defend as per Amended Summons.  I order costs nisi to the defendant with a certificate for counsel.  This cost order shall be made absolute after 14 days from today.  

Dated this 7 April 2006

Mr. Jose A. Maurellet, instructed by M/s Tanner De Witt, for the Plaintiff

Miss Shannon K. Y. Leung, instructed by M/s Terry Yeung & Lai, for the Defendant