Integrated Capital (Asia) Ltd v. Chan Tat Chee
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CACV 243/2009 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 243 OF 2009 (ON APPEAL FROM HCA NO. 403 OF 2009) ________________________ BETWEEN
________________________ Before: Hon Tang VP and Yuen JA in Court Date of Hearing: 2 July 2010 Date of Judgment: 29 July 2010 _______________ JUDGMENT _______________ Hon Tang VP: Introduction 1.The plaintiff’s case is that it made a loan of HK$5,000,000 to Abba Entertainment Group Ltd (“Abba”). The defendant was a shareholder and director of Abba. The defendant provided a cheque in a sum of HK$5,000,000 as security for the Abba loan (“the cheque”). According to the plaintiff, the cheque so provided bore the defendant’s signature with the amount of HK$5,000,000 filled in in figures and words but with the name of the payee and the date left blank. According to the defendant, the cheque was completely blank save for his signature. 2.On about 23 July 2005, Yam Tak Cheung (“Yam”), the Third Party, who was a director of the plaintiff, demanded the repayment of the Abba loan. According to the plaintiff, the defendant was only able to repay HK$1,000,000 which was done by a cheque dated 23 July 2005. 3.When in late September 2005, Yam learned from the news that the defendant had been arrested by the ICAC, he filled the cheque with the plaintiff’s name as payee and the date of 6 October 2005 and presented it for payment on the same date. The cheque was dishonoured. 4.The plaintiff sued the defendant for HK$4,000,000 being the balance payable on the cheque. 5.The defence was that there was a settlement as regards the balance of HK$4,000,000. 6.In order to understand the defence, it is necessary to deal with another loan. It is the so called “Aimstar Loan”, which is evidenced by a loan agreement dated 2 October 2003 made between Aimstar Holdings Limited (“Aimstar”) as borrower, Yam as lender, and Chan Tat Chee (“the defendant”) and his wife Tang Yuk Chee, Josephine as guarantors. The defendant and his wife were the only shareholders and directors of Aimstar. 7.Under the Aimstar Loan agreement, Yam agreed to lend HK$18,000,000 to Aimstar for three months at an interest of 17% above the prime rate. The repayment date of the loan was 2 January 2004. There is a receipt dated 2 October 2003 by Aimstar to Yam acknowledging receipt of HK$18,000,000 in cash. Yam’s case is that when by mid-May 2004, the Aimstar Loan remained wholly unpaid, he introduced a company called Kingston Finance Ltd (“Kingston”) to the defendant with a view to see if Aimstar could obtain a loan from Kingston to repay the Aimstar Loan. According to him, eventually Aimstar was able to borrow HK$25,000,000 from Kingston. According to Yam, the amount payable under the Aimstar Loan was HK$21,600,000 odd if it was repaid on 20 May 2004, the total interest payable being HK$3,615,400. 8.Yam said in his 2nd affirmation made on 27 May 2009:
9.The defendant’s case was set out in his defence of 23 March 2009, his third party notice dated 21 March 2009 as well as his affirmation of 5 May 2009. This is what he said in his affirmation:
10.The defendant went on to say in the same affirmation:
11.Para. 7 of the defence reads:
12.The defence referred to the alleged agreement to pay off the balance of HK$4,000,000 payable in respect of the Abba loan as the “Abba Entertainment Loan Repayment Agreement”. Para. 12 13.Summary judgment was given by Master S Kwang on 19 August 2009 in favour of the plaintiff. On 23 September 2009, the defendant’s appeal from the Master S Kwang was dismissed by Sakhrani J. The defendant was represented by solicitors and counsel, both before the master and before the learned judge. 14.Essentially, the learned judge was of the view that the Trust Agreement is a bald assertion and that it was not believable. With respect, I agree with the learned judge. The Appeal 15.On appeal, the defendant appeared in person. He said that his former lawyers had misunderstood him. There never was a Trust Agreement. As I understand him, he asserted that having paid the plaintiff HK$24,500,000 with the money he had obtained from Kingston, he had overpaid Yam HK$6,250,000, that is because notwithstanding the Aimstar Loan agreement, no interest was payable in respect of the Aimstar Loan of HK$18,000,000. This understanding is gathered from his affirmation (in Chinese) dated 12 November 2009 made in support of his application for a stay of execution which was refused by the learned judge, where he said:
16.However, in his written submission dated 2 July 2010 (also in Chinese) he said:
17.There, he seemed to say that the Aimstar Loan of HK$18,000,000 was not made at all. 18.Mr Nip, counsel for theplaintiff, submitted that the defendant should not be permitted to make a new case on appeal, relying on the judgment of the Court of Final Appeal in Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356 at 368G to 369C. 19.Moreover, Mr Nip submitted that insofar as the defendant is relying on new evidence, whether in the form of his affirmation of 12 November 2009 or his written submission of 2 July 2010, the defendant is unable to satisfy the conditions in Ladd v Marshall [1954] 1 WLR 1489, namely that (1) the evidence could not have been obtained with reasonable diligence for use at the trial; (2) the evidence must be such that, if given, would probably have an important influence on the result of the case, though it need not be decisive; (3) the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible. These conditions must be satisfied before new evidence can be admitted on appeal. 20.I agree with Mr Nip that the defendant should not be allowed to make a new case on appeal. Insofar as the new case requires new evidence, whether in the form of his affirmation of 12 November 2009 or his written submission of 2 July 2010 (the written submission does not qualify as new evidence), the new evidence is not admissible, and does not satisfy any of the three Ladd v Marhsall conditions. 21.Furthermore, it is not believable that the defendant had been misunderstood by his lawyers. Indeed, he was represented by different solicitors and counsel before the master and the judge. Moreover, his affirmation of 5 May 2009 had been interpreted to him before he affirmed it. 22.Nor do I find his new case credible. He now claims that the Aimstar Loan of HK$18,000,000 had never been made. That is inconsistent with the Aimstar Loan agreement and the receipt referred to above. Nor is it clear what his case is in relation to the Aimstar Loan. It appears from para. 2.7 of his affirmation of 12 November 2009 that there was a loan of HK$18,000,000, but because he had repaid HK$24,250,000 there was an overpayment of HK$6,250,000. However, in his written submission, he seemed to claim that the loan of HK$18,000,000 had not been made. If that be the case, it is difficult to understand why HK$25,000,000 was borrowed from Kingston to pay Yam. 23.The defendant also complained that the plaintiff had not produced evidence, for example, relating to the payment of the Aimstar Loan, apart from producing the Aimstar agreement and the receipt. That is so, but on an application for summary judgment, the defendant must show that he has a defence on the merits and in doing so, he must condescend upon particulars. See 14/4/4 Hong Kong Civil Procedure. This the defendant has failed to do. 24.For the above reasons, I would dismiss the appeal with costs. Hon Yuen JA: 25.I agree.
The Defendant, in person, present Mr Norman Nip, instructed by Messrs F. Zimmern & Co., for the Plaintiff |