Chan Kin Hung v. Wan Wing Kit, Louis and Another

DCCJ 6288/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 6288 OF 2006

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DCCJ 6082/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 6082 OF 2006

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Coram: Deputy District Judge R. Yu in Court

Date of hearing: 26^th, 27^th, 28^th, 31^st May and 10^th September 2010

Date of handing down Judgment: 23^rd December 2010

JUDGMENT

1.On 11 September 2006, the Plaintiff paid a sum of HK$700,000 to the 1^st Defendant via the account of the 2^nd Defendant. The Plaintiff now claims refund of the said sum of HK$700,000 from the 1^st and/or 2^nd Defendant.

2.The cause of action against the 1^st Defendant is that of duress, oppression or extortion.  No particular has been pleaded in the Amended Statement of Claim.  It is now clear from the evidence that the basis of the Plaintiff’s claim is that in the morning of 11^th September 2006, in a telephone conversation between him and the 1^st Defendant, the 1^st Defendant forced him to pay HK$700,000 by threat.  This is denied by the 1^st Defendant.  The 1^st Defendant has a complete different account of the telephone conversation. 

3.It is the case of the 1^st Defendant that he has beneficial interest in Flat 5 on 17^th Floor of Tower I, the Metropolis Residence, No. 8 Metropolis Drive, the Metropolis, Kowloon (“the said property”), which was registered in the name of CSTA Merit Limited, which was the vehicle and/or nominee holding the said property for the 1^st Defendant and one Miss Siu Mui Wah (“PW1”).  On 11^th September 2006, he reached an oral agreement with the Plaintiff in the said telephone conversation that in consideration of the 1^st Defendant’s abandonment of his beneficial interest of and in the said property, the Plaintiff would pay him the said sum of HK$700,000.  Further, it is a term of the oral agreement that the 1^st Defendant had to vacate the said property immediately upon payment (“the September Agreement”).  And sometime before the trial, the 1^st Defendant has executed a declaration that he relinquished all his interest in the said property.

4.The Plaintiff denies the September Agreement.  In the alternative, the Plaintiff contends that the September Agreement is void and of no effect as it is not in writing.  This argument has been abandoned by the Plaintiff, and at the closing, Mr. Ng, counsel for the Plaintiff only argues that the September Agreement is a separation agreement and is void against public policy. 

5.As an alternative basis for the claim against the 1^st Defendant, the Plaintiff said the money has been paid to the 1^st Defendant without consideration or without any valid consideration.  That is denied by the 1^st Defendant and Mr. Yee, counsel for the 1^st Defendant submits that there is no legal basis of this head of claim. 

6.The Plaintiff also claims against the 2^nd Defendant for the said sum of HK$700,000.  The Plaintiff claims that the 2^nd Defendant conspired with the 1^st Defendant to exert the duress, oppression or extortion.  No particular of the conspiracy has been stated in the Statement of Claim and it appears that the Plaintiff relies on the fact that the 2^nd Defendant was an agent for the 1^st Defendant to receive the said payment of HK$700,000. 

7.It is not very clear if the Plaintiff also claims that the money was paid to the 2^nd Defendant without any consideration or valid consideration.  I presume that is argued as paragraph 4 of the Amended Statement of Claim avers that the 2^nd Defendant received or accepted the payment without a lawful reason or without a reason as permitted by the law. 

8.The 2^nd Defendant does not dispute that he had received the HK$700,000.  It is his case that he does not know about the agreement or arrangement between the Plaintiff and the 1^st Defendant leading to the payment.  He was at the material time a mere agent to receive the payment on behalf of the 1^st Defendant.  He had already paid the HK$700,000 to the 1^st Defendant and he had no liability to repay the Plaintiff even if the 1^st Defendant may not receive or keep the money. 

9.Mr. Yee submits that the factual disputes herein are relative easy to resolve while the law involved is complicated.  And he has provided me with a detail submission on the diverted opinion on whether there is a cause of action on money paid with no consideration. 

10.On the facts, Mr. Ng has provided me with a 43 pages of written closing. A lot of those paragraphs deal with analysis of the credibility of the witnesses.  I am afraid both facts and legal issue are complicated. 

Evidence

11.The Plaintiff called PW1 to give evidence.  PW1 adopted her witness statement dated 8 July 2009 and her supplemental witness statement dated 26 August 2009 as her evidence in chief.  It is the evidence of PW1, and which is not disputed that, in around 2000, she came to know the 1^st Defendant. The 1^st Defendant carried on the business of vegetable distributor. They later became lovers (情侶) and the 1^st Defendant paid her a monthly maintenance of HK$25,000 until they separated in September 2006. 

12.Around 2001, PW1 came to know the Plaintiff.  The Plaintiff wanted to date her and at around 2004, she accepted the Plaintiff and they became lovers. The Plaintiff provided her with maintenance of about HK$1 million every year. PW1 wanted to separate with the 1^st Defendant, who refused.    As a result, she had two lovers at the same time.  She spent most of her nights with the Plaintiff and often stayed overnight at the residence of the Plaintiff. Her meeting with the 1^st Defendant was rare.  At nighttime, she would not pick up call from the 1^st Defendant. 

13.PW1 also denies that she had co-habited with the 1^st Defendant.    

14.According to PW1, towards the end of January 2006, the 1^st Defendant discovered that she dated the Plaintiff.  The 1^st Defendant requested her to break up with the Plaintiff.  PW1 made it clear to the 1^st Defendant that if she gave up the Plaintiff, she would not have further maintenance from the Plaintiff in the sum of about $1 million per year.  It is the evidence of PW1 that the 1^st Defendant agreed to pay her HK$1 million as compensation for her breaking up with the Plaintiff.  The agreement was reached in about January 2006 and the 1^st Defendant requested PW1 to cancel a tour with the Plaintiff to Australia.

15.PW1 said the 1^st Defendant paid her the HK$1 million by two installments.  The 1^st payment was made on the 4^th day of the Chinese New Year in 2006, for HK$600,000.  And in about July 2006, the 1^st Defendant paid the balance of HK$400,000.  On cross-examination, PW1 said the HK$1 million paid to her was for her agreement to leave or break up with the Plaintiff.  She had not purchased any property together with the 1^st Defendant.  She denied that the 1^st Defendant had any beneficial interest in the said property.

16.PW1 also explained that she had invested in property market since 1990 and she had acquired at least 11 properties including the said property, which she acquired on 21^st July 2006.  PW1 claimed that she used her own money to purchase all these properties.  She agreed with Mr. Yee that the 1^st Defendant went with her to inspect the said property before she bought it, and the 1^st Defendant had introduced her to the lawyer and arranged the acquisition of CSTA Merits Limited.

17.PW1 said on 9^th February 2006, the Plaintiff met her again while she was exercising at California Fitness Centre in Central.  She told the Plaintiff that a doctor paid her HK$1 million for her to stay with him.  PW1 did not inform the Plaintiff at this stage about the 1^st Defendant.  Until this moment, the Plaintiff and the 1^st Defendant never met.  While in California Fitness Centre, PW1 said she called the 1^st Defendant asking to separate with him, who refused.

18.On 9 February, PW1 left California Fitness Centre with the Plaintiff who gave a diamond ring to her.  And after leaving the Plaintiff, PW1 returned to the 1^st Defendant again.  Since 10^th February 2006, the 1^st Defendant often told PW1 that if the Plaintiff kept looking for her, he would give him trouble.  In her witness statement, PW1 said that the 1^st Defendant forced him to disclose the working address, telephone, residential address and family conditions of the Plaintiff, including how many children he had.  On cross-examination by Mr. Yee, she was not very certain of the information she gave to the 1^st Defendant.  In particular, she denied having informed the 1^st Defendant the names of the Plaintiff’s children and the school they attended.

19.She also claimed that the 1^st Defendant knew a lot of crooks (“蠱惑仔”).  And when the 1^st Defendant forced her to break up with the Plaintiff in 2006, since the Plaintiff knew that she lived at Royal Peninsula (半島豪庭), she moved to live at 應標大廈 in Hong Kong Island.  As she was used to live in Kowloon, and her parents also live in Kowloon, she purchased the said property and lived there hoping to hide away from the Plaintiff.

20.PW1 also claimed that between May and February 2006, the 1^st Defendant asked her to stay in Guangzhou to hide away from the Plaintiff.  When she stayed in Guangzhou, the 1^st Defendant arranged a friend to look after her.  But she kept telephone communication with the Plaintiff.

21.In August 2006, PW1 invited the Plaintiff for dinner and they had more communication.  On 10^th September 2006, she stayed overnight at the Plaintiff’s house.  The Plaintiff again requested her to leave the 1^st Defendant.  Although PW1 mentioned the 1^st Defendant in her witness statement, on cross-examination, she said she did not want the Plaintiff to know that she kept her relationship with the 1^st Defendant and only told the Plaintiff that she was keeping a relationship with the doctor she mentioned to the Plaintiff in California Fitness Centre.

22.PW1 told the Plaintiff that she could not leave the doctor as she had disclosed the information of the Plaintiff to the doctor.  If she left the doctor, he would give trouble to the Plaintiff.  The Plaintiff was very angry and he called his driver, one Mr. Leung (“Mr. Leung”) who was a retired policeman to have a discussion together.  Mr. Leung told PW1 that if the Plaintiff did not know who the doctor is, this would put the Plaintiff and his family members in a disadvantageous position.

23.In the morning of 11^th September 2006, at about 10 a.m., PW1 used her mobile phone to call up the 1^st Defendant.  She then handed over the mobile phone to the Plaintiff for him to talk with the 1^st Defendant.  In the witness statement at paragraph 14, PW1 said after the Plaintiff put down the mobile phone, he told her that: “溫要我給錢，件事才可解決，如果沒有錢給他，就對陳健雄和陳健雄的家人、我及我的家人不利和騷擾我”.

24.PW1 said the Plaintiff worried that the doctor would harm his family members, in particular his daughter(s), and requested her to disclose the identity of the doctor.  PW1 refused as she was worried about her own safety. The Plaintiff did not press PW1 for the information and told PW1 that the doctor asked for HK$700,000 as separation fees.

25.I note that PW1 does not know the details of the telephone conversation between the Plaintiff and the 1^st Defendant.  Indeed, when she was cross-examined by Mr. Yee, she said after handing over the mobile phone to the Plaintiff, she felt very sad and cried in the toilet while the Plaintiff talked over phone with the 1^st Defendant.

26.After this telephone conversation, she had an appointment to meet the Plaintiff near his office at 2:30 p.m.  PW1 returned to the said property.  She asked the 1^st Defendant to go to her house in order to persuade him not to ask for money from the Plaintiff and missed the appointment with the Plaintiff.

27.When the 1^st Defendant was at the said property with PW1, the Plaintiff also went to the said property and knocked at the door.  PW1 refused to open the door as she wish to persuade the 1^st Defendant to give up the payment.  The 1^st Defendant insisted to get the payment from the Plaintiff.   When the Plaintiff called PW1 at her mobile phone claiming that he had already reported to Police, PW1 immediately went to see the Plaintiff and the 1^st Defendant also left the said property.

28.PW1 met the Plaintiff at the main lobby of the building where the said property was situated.  PW1 said the Plaintiff insisted that the money must be credited to the account of the 1^st Defendant.  But the 1^st Defendant told her that the money must not be credited into his account.  On the payment method, PW1 had an argument with the Plaintiff and their argument became so heated that Mr. Leung had to pacify them.  Finally, the Plaintiff agreed not to transfer the money directed into the account of the 1^st Defendant.

29.PW1 went with the Plaintiff to the branch office of Hang Seng Bank at Wuhu Street (蕪湖街) to credit the money.  On the way, the 1^st Defendant called up PW1 and gave her an account number.  Later, the 1^st Defendant called her again and gave her the name of another account holder and later changed his mind again. Finally, the 1^st Defendant gave the account of the 2^nd Defendant to PW1 and the Plaintiff credited a cash cheque of his company into the account of the 2^nd Defendant for HK$700,000.

30.After the payment, PW1 said the 1^st Defendant visited her with a friend.  They asked her to leave the Plaintiff and threatened to harm the Plaintiff.  But PW1 kept the relationship with the Plaintiff.  It is the evidence of PW1 that after this incidence, the Plaintiff kept asking her the information of the doctor.  She also refused to give. 

31.In December 2006, the Plaintiff issued the first action against the 2^nd Defendant (Defendant in DCCJ 6082/2006), claiming refund of HK$700,000.  The 1^st Defendant told PW1 that he was angry and would resort to violence.  Thereafter, the Plaintiff told PW1 that he was followed.  Later, at the go down of the Plaintiff’s company, a dog had been chopped.  As PW1 was worrying that the 1^st Defendant would injure the Plaintiff, she gave the name and address of the 1^st Defendant to the Plaintiff and clarified with the Plaintiff that the doctor she mentioned was indeed the 1^st Defendant who was not a doctor but a crook (蠱惑仔) at the food market.

32.The Plaintiff gave evidence and adopted his witness statement dated 24^th June 2009 and supplemental witness statement dated 24 June 2009 as the evidence in chief.  According to his evidence, in 2001, he knew PW1 at the Big Boss Nightclub.  Her English name was “La La” (and he called PW1 “La La” or “La” in his diary).  They became friends and had regular meetings.  At about the beginning of 2002, PW1 looked very unhappy.  She told him that she knew a person in the food market who was a hostile person and did not keep his promise.  She did not want to keep the relationship with him.  The Plaintiff dated her and they became lovers.

33.In mid 2003, PW1 looked unhappy again.  PW1 told the Plaintiff that she was maintained by her friend at the food market, with a monthly maintenance of HK$25,000.  But he did not treat her well.  The Plaintiff asked her to stay with him and would give her monthly maintenance of HK$50,000.  PW1 said that person was very troublesome and would not let her leave.  But the Plaintiff did co-habit with PW1 at her house then at Royal Peninsula (半島豪庭).  PW1 sometimes stayed in the house of the Plaintiff.  They often went traveling together.

34.The Plaintiff originally planned to go to Australia with PW1 on the 4^th day of the Chinese New Year in 2006.  In that morning, PW1 called him saying that she could not go to Australia with him.  She was crying in the telephone and said she had to get marry, and hang up.  The Plaintiff went to Australia alone and he tried to call PW1 by phone, but could not locate her.

35.On returning to Hong Kong, the Plaintiff met PW1 at California Fitness on 9^th February 2006.  PW1 told him that a doctor gave her HK$1 million for her to marry him.  But she felt that the Plaintiff treated her best.  The Plaintiff invited her to return the HK$1 million to the doctor and stay with him.  They left California Fitness and went to Tsim Sha Tsui.  On the way, PW1 said she wanted to return the HK$1 million to the doctor.  As it was late, the Plaintiff suggested it could be dealt with in the following day, which PW1 agreed.  He also bought a ring for PW1 and returned home with PW1. 

36.On 10^th February 2006, the Plaintiff sent PW1 back to her mother’s house.  Since she had to return the HK$1 million to the doctor, the Plaintiff thought he should buy a house as a gift for her.  At that moment, the Plaintiff suspected the doctor was not a doctor but the person PW1 mentioned who do business in the food market.  Later in the afternoon, he called PW1 again and PW1 told him she would stay with the doctor.  They had no more contact until August 2006.

37.On 12^th August 2006, PW1 invited the Plaintiff to meet her at a restaurant.  Since then, they had contact again.  And since 24^th August 2006, PW1 stayed overnight at the Plaintiff’s place regularly. 

38.On 10^th September 2006, while PW1 was staying in the Plaintiff’s house, the Plaintiff questioned PW1 why she was having 2 lovers. He had a quarrel with PW1 when PW1 explained the reason that she could not leave the doctor was she had used the HK$1 million to buy a unit at Metropolis Residences (紅磡都會軒).  And the doctor knew that she was dating with the Plaintiff, and he forced PW1 to let him have the personal information of the Plaintiff.  PW1 was worrying that the doctor could cause trouble to the Plaintiff and afraid to terminate her relationship with the doctor.  She also said the doctor had some crooks (蠱惑仔) with him and could get persons to chop the Plaintiff.

39.Hearing that, the Plaintiff was more convinced that the doctor was the person who carried on business in the food market.  On the other hand, he got worry about his and his family’s safety, as that doctor knew his and his children’s information.  He refused to let PW1 leave and asked PW1 to tell him the information about the doctor.  PW1 refused to tell him the personal particular of the doctor.  He invited Mr. Leung to have a discussion.  After discussion, in morning of 11 September 2006, PW1 made a call to that doctor with her mobile phone and on getting the doctor, she told him that the Plaintiff had something to talk to him.  She then handed the telephone to the Plaintiff. 

40.In the telephone conversation, the doctor said his surname was “Wan”. The Plaintiff claimed that he had the habit of keeping diary.  For this material telephone conversation between the Plaintiff and the 1^st Defendant, He had recorded the event of this conversation in his diary and he had also recorded the details of the conversation in a new diary.  I shall come to the 2 diaries later.  For convenience, I set out the conversation as recorded by the Plaintiff in his new diary:

陳：温生，我姓陳，LaLa之前和我一起已四年多，又買了訂婚介指，年初我和她訂機票和酒店去澳洲，她都走了，現在她選擇回我身邊，你以後不要再騷擾她。

温：X你老母，我條女你都敢攪，你往加多利，有８個兒女我都知，La拿了我錢，你夠膽和La一齊我斬X死你。

陳：温生，你給錢La是你和La2個人的事，這幾年我亦有給La不少錢，而且你巳要La將錢用La媽的名義買了樓，香港是法治的地方，La不是供人買賣的動物。（想再講温便開口打斷。）

温：ＸＸＸＸ，我隨時可以揾幾十個人斬X死你，你有7個女，再牙擦我就揾人先斬你幾個女。

陳：你想點？

温：回水。

陳：幾多

温：一百萬。

陳：我無欠你，你而家係勒索我

温：我唔Ｘ同你講，無錢，ＬａＬａ就唔准走。

陳：錢已買了樓，她那有錢還你

温：我叫你還呀，ＸＸ

陳：你是比錢Ｌａ，不是借，我和Ｌａ都沒有欠你錢。（温再打斷）

温：ＸＸＸ，ＸＸＸＸＸ，你攪我條女想就敢算數，你的野我清清楚楚。你夠膽唔比錢，我就先斬你啲女，再斬你個扑街。

（當時La在床的另一邊哭，我問她聽唔聽到温和我講乜，她整個人都在震，搖頭，說温身邊有幾個古蠱仔，常對她說可隨時做野，我當時很亂，很擔心，我和兒女會受到傷害。）

（我繼續和温對話，温不停的恐嚇，講粗口，最後，温堅持最少要七十萬，如果唔係就立即做野對付我和我的女兒。） 陳：點比錢 温：今日之前入户口，我會和La聯絡入邊個户口，細佬，你唔好攪野呀，我隨時可以做你屋企人。 （收線後我和La商量約好2:30 PM在海港城Off樓下會面，她回家，我送了一枚鑽石介指給La。） [“X” stand for foul language used]

41.The Plaintiff said in his witness statement that when he was talking to that doctor, PW1 was next to him.  After some discussion, the 1^st Defendant insisted the Plaintiff had to pay HK$700,000, and he would not hurt his family.  Then he asked for the method of payment.  The 1^st Defendant asked him to pay before 3 p.m. on the same day and he would provide him with the account number later.

42.It is the evidence of the Plaintiff that on the repeated threatening of the doctor in the telephone, he was forced to follow the instruction of that doctor to pay him HK$700,000.  He also said the doctor said in the telephone conversation that he would chop his daughter. He believed the doctor would cause harm or injury to his family members.  At that time, he did not have any information about that doctor.

43.The Plaintiff also said that he did not report to Police because there was no actual action.  He believed the Police would not take action or provide protection to him and his family members. 

44.After the telephone conversation, he asked PW1 to return home and met him at his office by 2 p.m.  He also asked another director of his company to prepare a cheque for HK$700,000.  It is not disputed that the HK$700,000 paid to the 2^nd Defendant was not directly from the account of the Plaintiff but from the account of his company.

45.The Plaintiff waited at his office for PW1 who failed to appear.  He tried to call her mobile phone and could not get in touch with her.  He then went to Metropolis Residence and asked the management office to bring him to the said property, as he did not know which unit PW1 resided.  He knocked at the door and no one answered.  He was worrying that PW1 might have trouble and called 999 for assistance from the Police.  Then PW1 called him and learning that he had reported to Police, PW1 said she was coming and she was fine.

46.The Plaintiff met PW1 outside the building (where the said property was situated). He asked PW1 to inform him the bank account of the doctor.  PW1 refused and they had a heated argument.  At that time, the doctor called the mobile phone of PW1 and PW1 suggested to credit the money into her account first and transferred to the doctor.  This was refused by the doctor.

47.Later, they went by car to the branch office of Hang Seng Bank at Wuhu Street (蕪湖街).  On the way, PW1 got a call from the doctor who gave a Hang Seng Bank account with an account holder Mr. Cheng.  Later, on arriving at Hang Seng Bank, PW1 got another call from the doctor asking her to credit the cheque into another bank account. Subsequently the doctor changed again and asked him to pay the money into the account of the 2^nd Defendant.  PW1 filled the name of the 2^nd Defendant on the cheque for banking.

48.After that, PW1 returned to cohabit with the Plaintiff.  The Plaintiff requested PW1 to provide him with the personal data of the doctor.  PW1 refused.  He sought advice from lawyers to draft a demand letter.  Before they sent the letter to the 2^nd Defendant, the Plaintiff instructed one Mr. Lin to bring a draft letter to the residence of the 2^nd Defendant, but no person accepted the document.  Later, the letter was issued by his solicitors, Messrs. Yip, Tse and Tang.

49.The Plaintiff also recorded in his witness statement that through Mr. Lin, the doctor invited him to meet him in Tsim Sha Tsui.  He waited outside the restaurant and later Mr. Lin called him saying some triad persons appeared in the restaurant.  He never met the doctor. 

50.In December 2006, the Plaintiff issued the 1^st action, DCCJ 6288/2006 against the 2^nd Defendant.  On 18^th December 2006, when the Plaintiff returned from his go down, he discovered that his car was being followed.  And later on 19^th December 2006, a dog kept in his go down was chopped.  He believed this series of action was related to his civil action against the 2^nd Defendant.  At this moment, PW1 disclosed that the doctor was the 1^st Defendant and not a doctor, but a trader in the food market.  She also gave him the name and the company address of the 1^st Defendant.  He reported the incidence to the Police. 

51.The Police had taken statement from the Plaintiff and the 1^st Defendant.  But no prosecution had been advanced.  I note that the Plaintiff had given 2 statements to the Police.  In the first statement dated 29 December 2006, he only mentioned that the Mr. Wan threaten to chop him.   If he did not repay the money, he would not allow La La to leave him.  When cross-examined by Mr. Yee, he said he did not agree with the contents as put down by the Police.  And on 25 January 2007, he gave a second statement to Police when he set out the details of the telephone conversation, which was in almost except wordings of the conversation kept in the new diary.  Mr. Yee questioned why they were in similar wordings.  The Plaintiff said he memorized the contents of the diary.

52.In cross-examination by Mr. Yee, the Plaintiff agreed that he engaged private detective to locate PW1 after she disappeared.  When he met her in the California Fitness, she informed him that she had to return HK$1 million to the doctor.  But he had not agreed to assist her financially.

53.About the telephone conversation with the 1^st Defendant, the Plaintiff said he indeed asked PW1 to arrange a face-to-face meeting with the doctor.  It was the suggestion of PW1 that they had a telephone discussion. When cross-examined by Mr. Yee as to why he did not report the incidence to the Police, the Plaintiff said it was useless.  In fact he had discussed the same with Mr. Leung.  He also said in Court that after he sent away PW1, he had further discussion with Mr. Leung and two other retired station sergeants.  He came to the view that if the money was credited into the account to the 1^st Defendant, he would report to Police.

54.The Plaintiff also said at cross-examination that when he was having the telephone conversation with the 1^st Defendant (or the doctor), he was not sure whether the PW1 was nearby.

55.In cross-examination, the Plaintiff agreed with Mr. Yee that he recorded the telephone conversation in a new diary at his office.  This was not the diary he used to keep his daily affairs.  But he said he also kept a brief record of the incidence in his diary.

56.That is the Plaintiff’s case. 

57.The 1^st Defendant gave evidence and adopted his witness statements dated 12^th January 2009 and 21^st July 2009 as evidence in chief.

58.According to the 1^st Defendant, he runs a food distribution company in the Cheung Sha Wan Food Market.  In about 2000, he came to know PW1 and they became lovers.  In about 2006, he found PW1 dating a Chinese male. Later, he confronted PW1 with the incidence.  PW1 admitted that she dated that male for sometime.  On the following day, PW1 informed him that she promised to go with that male (later known as Mr. Chan) to Australia on vacation.  She also complained that while being the lover of the 1^st Defendant, she did not have a property in her name.  The 1^st Defendant suggested he would acquire a property and PW1 would be one of the owners.  This would be their love house and they would raise kids.  PW1 agreed to stay with him and terminated her relationship with Mr. Chan.

59.In February 2006, the Plaintiff located PW1 at California Fitness.  PW1 told 1^st Defendant that the Plaintiff had acquired an expensive membership with California Fitness with a staff in exchange for the information about PW1.  He suggested PW1 made a complaint to California Fitness.  And PW1 stayed in Guangzhou for 3 months, at his arrangement.

60.In February 2006, 1^st Defendant and PW1 decided to acquire the said property.  They used a limited company by the name of CSTA Merit Limited and both of them did not appear as shareholder to keep their identity and relationship confidential.

61.The purchase of the said property was completed on 21^st July 2006 and the 1^st Defendant paid a total of HK$1 million to PW1.  The balance was paid by a loan from Hang Seng Bank against a charge on the said property.  Until he separated with PW1, he paid all the monthly installments.

62.The 1^st Defendant said, after completion, he cohabited with PW1 in the said property.  On 10^th September 2006, he had a quarrel with PW1 and they left the said property.  On 11^th September 2006 at about 9 a.m., he received a telephone call from PW1 at his home.  PW1 said sorry to him and another male took up the phone.  That male said he was Mr. Chan.  He said PW1 decided to stay with him.  He knew the 1^st Defendant had used HK$1 million to acquire a property with PW1.  He said he would not repay the HK$1 million but he could pay HK$700,000, on condition that the 1^st Defendant should remove all his belongings from the said property on the same day and thereafter he had no further interest in the said property.  After a short consideration, the 1^st Defendant agreed since PW1 had decided to leave him.

63.In the afternoon, in the presence of PW1, the 1^st Defendant removed all his belongings from the said property.  And in the afternoon, PW1 called him and asked for his account number.  He gave the account number of a friend and later he changed his mind.  He asked the 2^nd Defendant if he could bank in a cheque through his account.  The 2^nd Defendant agreed without asking the reason.  1^st Defendant gave the account number of the 2^nd Defendant to PW1.

64.Having been confirmed that the 2^nd Defendant received the HK$700,000 on 11^th September 2006, the 2^nd Defendant transferred the total of HK$700,000 to the 1^st Defendant on 12^th and 13^th September 2006.  The 2^nd Defendant had not asked the purpose or reason of the payment and the1^st Defendant had not told him.

65.On about 22^nd September 2006, the 2^nd Defendant called the 1^st Defendant informing him that he received a letter from a debt collection company stating that the Plaintiff claimed refund of the said HK$700,000.  The 1^st Defendant then knew that Mr. Chan was the Plaintiff.  He also informed the 2^nd Defendant that he was worrying the Plaintiff could find his residence and that is the reason for using the 2^nd Defendant’s account to receive the payment of HK$700,000.

66.The 1^st Defendant also gave evidence that the debt collection company creating disturbance to him and the 2^nd Defendant.  Since the matter is not in issue, I do not intend to go into his evidence.

67.In cross-examination, the 1^st Defendant said before 2006, PW1 lived at Royal Peninsula (半島豪庭). Every week he stayed overnight with PW1 for 2 to 3 days.  He agreed this was not mentioned in his witness statement.

68.The 1^st Defendant agreed that he had some information of the Plaintiff.  But he only knew that his surname is Chan.  He knew he lived at Tai Koo Shing and he had a girl friend with two daughters.  But He did not ask the detail address of the Plaintiff, his working office and how many children he had.

69.After they bought the said property, the Plaintiff also said he stayed overnight there with PW1 on two to three nights a week.  Sometimes more often.

70.The 1^st Defendant was being cross-examined on his witness statement given to the Police.  He agreed that he did not mention about his interest in the said property.  He just wanted to explain that he did not threaten or blackmail the Plaintiff.  It is helpful to set out his account of the telephone conservation as stated in his statement to the Police –

問:你可否詳細講出陳建雄點解向羅建文追討70萬元?

答:响2006年9月11日早三９點鐘，簫玫華致電我手機，同我講「對唔住」要提出分手，之後就有一名男子响電話同我講「簫玫華跟咗我四年，我知道你出左一佰萬元同簫玫華買咗層樓，簫玫華同我講要比番１００萬你，但係１００萬就無可能，只係比番７０萬比你」而我就應承佢及問佢幾時比呢７０萬元我，而佢話比番７０萬我，要我以後都唔可以見蕭玫華亦唔可以打電話比佢，我亦應承佢之後，就比左我朋友羅建文嘅恆生銀行儲蓄户口xxxxxxxx佢，而佢話下午四點入數７０萬元，而後來亦証實有７０萬元入咗我朋友羅建文嘅恆生銀行户口內，所以陳健雄便追羅建文７０萬元，而呢７０萬元最後亦由我朋友羅建文交番比我。

71.He agreed that he had asked private detective to follow the Plaintiff after he received the money.  He wanted to prove the relationship between the Plaintiff and PW1.

72.The 1^st Defendant also mentioned that on 11^th September, he went to the said property on the request of PW1.  PW1 asked him not to collect the HK$700,000.  He refused her suggestion.  He also said he packed 4 bags of his belongings when he left the said property on 11 September 2006.  He agreed that this was not mentioned in his witness statement.

73.That is the 1^st Defendant’s case. 

74.The 2^nd Defendant also gave evidence.  He adopted his witness statement dated 11^th January 2009 as his evidence in chief.

75.The 2^nd Defendant stated that on 11^th September 2006, at about 3 p.m., he received a call from the 1^st Defendant.  A cheque has to be credited to the 1^st Defendant.  The 1^st Defendant asked if he could use the bank account of the 2^nd Defendant to collect the cheque.  The 2^nd Defendant knew the 1^st Defendant for many years.  Based on trust, he gave him his account number.  At about 5 p.m. on the same day, the 2^nd Defendant found that he had received a sum of HK$700,000.  He confirmed to the 1^st Defendant that the money had been received.  Subsequently, he transferred HK$700,000 in two lots, on 12^th and 13^th September 2006 respectively, to the bank account of the 1^st Defendant.

76.On about 22^nd November 2006, a letter from one Mr. Lin attaching an unsigned letter from Messrs. Yip, Tse and Tang was sent to the 2^nd Defendant’s home.  2^nd Defendant called the 1^st Defendant who then informed him that he had separated with his girlfriend.  His girlfriend had a new boyfriend surname Chan.  That man would acquire his interest in the said property.  The 1^st Defendant had paid HK$1 million but that man was only willing to pay HK$700,000.

77.Later, the 2^nd Defendant received the demand letter from Messrs. Yip, Tse and Tang.  He passed the case to his legal advisor to handle. On about 12^th December 2006, the Plaintiff brought action DCCJ 6082/2006 against the 2^nd Defendant claiming that he conspired with the 1^st Defendant to force the Plaintiff to pay HK$700,000 to his account by duress.  The 2^nd Defendant claimed that he was an innocent party.

78.That is the 2^nd Defendant’s case. 

Discussion of Evidence and Ruling

79.This case turns both on the credibility of the witnesses and on the legal basis to recover the money as pleaded by the Plaintiff.  Mr. Ng submits that the evidence of the Plaintiff and PW1 should be preferred and I should not accept the evidence of the Defendants.  Since the 1^st and prime claim of the Plaintiff is for restitution of the money as it was paid on duress, I would first consider the evidence of the parties in this aspect.

80.The Plaintiff said at paragraph 2 of the Statement of Claim that the HK$700,000 was paid to the 2^nd Defendant under the 1^st Defendant’s duress, oppression or extortion.  There is no particular given in the Statement of Claim.  It is clear now from the evidence that the only evidence of duress is the telephone conversation between the Plaintiff and the 1^st Defendant in the morning of 11^th September 2006. 

81.But if the 1^st Defendant had threatened him in the way stated in his witness statement, it must occur to him, who is an experienced businessman, that it is blackmail.  At least, he is aware that it is a threat. I cannot help asking why he had not reported the matter to Police.  But it is his own evidence that he had consulted his driver Mr. Leung who was a retired policeman and two other retired station sergeants before he paid the 1^st Defendant.  It is not believable that all advised him against reporting to Police.    

82.The Plaintiff said he worried about his and his family’s safety.  I failed to see why he cannot report to Police and allowed them to arrange protection for his family members.  And if he dared not report to Police as he was so worried for the safeties of his family members, it looked odd that he indeed reported to Police when he could not get in touch with PW1 on 11 September 2006 when he visited the said property.  And he decided to take action by 22^nd November 2006 to seek recovery of the money from the 2^nd Defendant.

83.Further, PW1 knew the identity and the whereabouts of the 1^st Defendant.  It sounds very strange that PW1 refused to disclose the identity of the 1^st Defendant.  She said she worried about the safety of herself and her family.  But subsequently, PW1 did disclose the identity of the 1^st Defendant.  That indeed led to further investigation by Police.

84.Further, on the telephone conversations, the Plaintiff used a new diary which recorded details of the telephone conversation.  It is not disputed that this is not the diary he used to keep record of his daily affairs.  Given that the Plaintiff is a person who has the habit of keeping diary, one asked why this important conversation was not recorded in his own diary. 

85.Further, his diary did record this incidence, but just not in such details.  It is helpful at this stage to refer to the diary of the Plaintiff on his record of what happened on 9^th, 10^th, 11^th September 2006:

“………原來他在農曆年前收了人一百萬見完我後那人要取我電話地址，說如我先出手，他便還手，La已38歲了，還這麼幼稚，怎也不肯透露對方是誰，嘈到早上，叫了梁上來，都是不肯，最後要脅 La打電話給姓溫的，說她已將他的資料全告訴我，後我對對方全部軟化堅持要我給70萬，如應承，午間過數,他早上到都會軒執嘢走，以後要離開La和不傷害我家人。”

86.There is no mention about any duress or threat in his diary.  There is no reason why such important matter has been left out in this record. 

87.And if one looks at his record by the new diary of the conversation, he made very detail record of the conversation, including on two occasions when he was interrupted by the 1^st Defendant. 

88.I also adopt the submission of Mr. Yee.  When the Plaintiff issued the 1^st demand letter to the 2^nd Defendant dated 23^rd November 2006, he only mentioned that the money was paid to the 2^nd Defendant without a just cause.  By then, the Plaintiff must have received full legal advice from his solicitors.  Even if they had not advised him to report the incidence to Police which he only did on 29^th December 2006, I thought the solicitors would set out the accurate cause of action in the letter.

89.And more interestingly, this letter was not issued directly to the 2^nd Defendant.  It was drafted and sent by a Mr. Lin who was a debt collector to bring it to the 2^nd Defendant.  Mr. Lin also wrote a Chinese letter to the 2^nd Defendant saying that the Plaintiff was prepared to report the incidence to Police for ‘deception’.  On cross-examination, the Plaintiff agreed he endorsed the contents of Mr. Lin’s letter.  Why the Plaintiff agreed to Mr. Lin calling this a deception case, when it should be a blackmail case.

90.I am grateful to Mr. Ng who has done a very good analysis of the evidence.  By having perused all these, I am not at all convinced that the Plaintiff is telling the truth.  I am not convinced that the new diary is a true record of the telephone conversation between him and the 1^st Defendant on 11 September 2006.  I found that the version by the Plaintiff about the telephone conversation unbelievable.

91. PW1 could have no contribution to the contents of the telephone conversation.  It is not disputed that after calling the 1^st Defendant, she passed the telephone to the Plaintiff.  She admitted in her oral evidence that she was crying heavily and knew nothing about the telephone conversation.  Originally, the Plaintiff said in his witness statement that when he was talking to the 1^st Defendant, PW1 told him that the 1^st Defendant had a number of crooks with him.  It is clear from oral evidence that PW1 was not staying next to him.  And in cross-examination, the Plaintiff could not be sure if PW1 was around.  It also discredits the evidence of the Plaintiff and it also shows that PW1 could not give any useful information on the contents of the telephone conversation, except what the Plaintiff told her later.

92.And I have great doubt on the reliability of PW1.  She is indeed the only person who benefits in this arrangement – she could keep the HK$1 million paid by the 1^st Defendant and could return to the Plaintiff.  And in her evidence, she had been lying to the Plaintiff about a doctor who wanted to marry her and gave her the money.  She had refused to disclose the identity of the person who talked to the Plaintiff on the telephone.  What is the reason for keeping the identity of the 1^st Defendant confidential?  And she offered to use her account to collect the money.  There are too many areas in her evidence that are unexplainable and in conclusion, I do not believe her evidence. 

93.I have been invited to rule if she had co-habited with the 1^st Defendant.  I do not think it is necessary for my ruling.  There is no doubt that she was supported or maintained by the 1^st Defendant and they must be more than lovers.

94.The other witness for this telephone conversation is the 1^st Defendant who claims that he has reached the September Agreement with the Plaintiff.  Mr. Ng tried to persuade me that the 1^st Defendant is unreliable.  If I were to disbelieve the 1^st Defendant, there is still no credible evidence on the claim of duress. 

95.Mr. Ng refers to a passage of cross-examination of the 1^st Defendant when he suggested that the evidence he gave to the policeman was not true.  And further, the 1^st Defendant did engage private detective to check the Plaintiff while in his answer to the policemen, the 1^st Defendant claimed that he had not followed the Plaintiff.  I accept the above comments on the evidence of the 1^st Defendant are matters I have to and have taken into account in assessing the reliability of the evidence of the 1^st Defendant on the alleged oral agreement. 

96.For this telephone conversation, the 1^st Defendant’s evidence is that he was told by the Plaintiff that PW1 was staying with him.  The Plaintiff knew about the HK$1 million he gave to PW1 to buy the said property. The Plaintiff would only pay HK$700,000 in that afternoon on condition that he had to abandon his interest in the said property and had to move all his belongings from the said property.

97.I refer again to the diary of the Plaintiff on the part about 9^th, 10^th, 11^th September 2006 he had the following passage:

“………原來他在農曆年前收了人一百萬見完我後那人要取我電話地址，說如我先出手，我便還手，La已38歲了，還這麼幼稚，怎也不肯透露對方是誰，嘈到早上，叫了梁上來，都是不肯，最後要脅La打電話給姓溫的，說她已將他的資料全告訴我，後我對對方全部軟化堅持要我給70萬，如應承，午間過數，他早上到都會軒執嘢走，以後要離開La和不傷害我家人。”[my emphasis]

98.It is not disputed that the Plaintiff knew about the HK$1 million paid by the doctor/1^st Defendant to PW1.  He wanted PW1 to stay with him.  And according to his record in the diary, he told the doctor/1^st Defendant that PW1 had informed him of all his information.  This is in support of the 1^st Defendant’s evidence that the Plaintiff was the person who set out the terms of the agreement.     

99.And it is interesting to note that in this record, the Plaintiff only said the doctor/1^st Defendant insisted that he had to pay HK$700,000 and there was no record of duress or threat.  And it was recorded that the doctor/1^st Defendant had to go to the said property to pack his belongings to leave the said property.  This again supports the evidence of the 1^st Defendant that one of the terms is to move out of the said property.  While the Plaintiff said he did not intend to assist PW1 financially, in the background facts as set out above, I would not be surprised that he wanted to solve this monetary issue between PW1 and the doctor/1^st Defendant, as this had been the reason given by PW1 that she could not leave the 1^st Defendant. 

100.On the balance, I believe the evidence of the 1^st Defendant that it is the Plaintiff who made the offer that he would pay HK$700,000 to the 1^st Defendant.  And I believe his evidence that it is the terms of the agreement that he had to abandon all interest in the said property, and he had to move out of the said property.  The Plaintiff has provided the September Agreement.

101.For this ruling, I just take the wordings appearing on the diary as accurate.  I note that at one stage Mr. Yee argues that there is some tailoring of this part of the diary which is not pursued in his closing. 

102.Mr. Ng suggests that according to Order 27 Rule 4(1) & (2), the Defendants could not argue that the new diary is not a genuine contemporaneous record as the Defendants have not served a Notice in accordance with Rule 4(2) that they do not admit the authenticity of the new diary.  That cannot be correct.  The said rules only govern productivity and admission of document. But whether the contents are true would be a matter for the trial judge. 

103.As I found for the 1^st Defendant the September Agreement between the Plaintiff and the 1^st Defendant, I do not have to consider the alternate argument of the Plaintiff that the money has been paid with no or no valid consideration.  I note that Mr. Ng argues that there is no consideration given by the 1^st Defendant for the September Agreement as he had no interest in the said property.  The other argument by Mr. Ng is, it is a separation agreement and should be voided against public policy.  I shall come back to this later.

104.PW1 said the 1^st Defendant gave her $1 million for her to leave the Plaintiff.  Mr. Ng seeks to argue that it was a gift by the 1^st Defendant.  From the evidence of the 1^st Defendant, PW1 complained to him that she does not have a house notwithstanding she had been his lover or girlfriend for a long period of time.  Mr. Yee argues that it is not a gift.  Further, when a person makes a payment towards the purchase price or consideration for a house, he has a resulting trust in the beneficial interest in the property.

105.But I do not have to decide if the 1^st Defendant has beneficial interest in the said property.  All that I have to decide is whether he has an arguable case to claim an interest in the said property.  By abandoning a doubtful interest would be sufficient and valid consideration. 

106.Given my analysis of the evidence of PW1, I do not believe her evidence.  I found the 1^st Defendant a credible witness.  I believe his evidence that he has contributed $1 million toward the price and he intended it to be a property jointly owned by himself and PW1.  And from the evidence, it must at least be arguable that the 1^st Defendant has a claim to beneficial interest in the said property.

107.It may be argued that the consideration is not moving towards the Plaintiff.  But the consideration is not the beneficial interest, but the agreement by the 1^st Defendant to give up all his interest (even doubtful interest) in the said property at the request of the Plaintiff, and to move out of the said property.  Accordingly, there is valid consideration for the September Agreement.

108.Further, it is recorded in the diary of the Plaintiff that he requested the 1^st Defendant to move out of the said property.  That by itself is a valid term and by moving out, it is sufficient consideration for the agreement.  I believe the evidence of the 1^st Defendant that he has moved out of the said property on 11 September 2006.

109.I do not agree with Mr. Ng that the September Agreement is void against public policy.  There is no plea by the Plaintiff that the agreement is void against public policy in the Amended Statement of Claim or Re-amended Reply. On the evidence of the 1^st Defendant, he was informed by the Plaintiff that PW1 would stay with the Plaintiff.  He was offered on how to resolve the HK$1 million money he paid to PW1 and the said property.  The agreement covered how PW1 and the 1^st Defendant were to resolve their financial dispute upon their separation, such an agreement cannot be voided against public policy. 

110.If it is a separation agreement, I have indeed invited Mr. Ng to provide me with authority that it is void against public policy.  He quoted a criminal appeal case R v Li On CACC 228/1994.  This is an appeal on the charge of blackmail.  To obtain separation fees by threat would be blackmail and an offence.  I agree entirely.  But I have ruled against the Plaintiff’s allegation of payment under threat.  Here we have a concrete financial benefit that was paid by the 1^st Defendant to PW1 which was resolved by an agreement.

111.As I interpret earlier on, the September Agreement is not a separation agreement.  It is an arrangement after the separation on the financial dealing between PW1 and the 1^st Defendant at the request and agreement of the Plaintiff.  There is no unjust factor.  Accordingly this line of claim of the Plaintiff must fail.

112.The Plaintiff has also pleaded in the Re-amended Reply that the agreement is void as it purports to dispose of an equitable interest in land but not in writing.  This point is not pursued by the Plaintiff at the closing.

113.Mr. Yee has one additional point to make.  He accepts that for restitution claim based on duress, the Plaintiff has the locus to sue.  But for money paid with no consideration, it should be returned to the payer.  In the present case, the money was not paid by the Plaintiff but his own company.  There is no evidence that it is a loan to him.  His company should be the Plaintiff to claim refund on the legal principal of “no consideration”.  There is much force in this argument.  I need not deal with the point now as I rule against the Plaintiff.

114.In the circumstances, I would dismiss the Plaintiff’s claim against the 1^st Defendant.

115.The claim against the 2^nd Defendant must fail as the 1^st Defendant has a legitimate right to keep the payment.  And I also agree with Miss. Lee, counsel for the 2^nd Defendant that he is a mere agent.  There is no evidence that he knew about the conversation between the Plaintiff and the 1^st Defendant, or the purpose of the payment, when he received it, or when he paid over to the 1^st Defendant.  As a mere agent, he has no liability whatsoever once he paid the money to the Plaintiff (per Ribero PJ in Shanghai Tongji Science & Technology Industrial Co. Ltd. v. Casil Clearing Ltd. 920070 7 HKCFAR 79).  There is no evidence whatsoever to suggest that the 2^nd Defendant knew about the dealing between the Plaintiff and the 1^st Defendant.

116.I would like to add this.  The claim against the 2^nd Defendant is also based on conspiracy.  However, no particular is pleaded and no evidence whatsoever has adduced at the hearing as to how the conspiracy arises.  Paragraph 68 of Mr. Ng’s closing submission claims that the 1^st and 2^nd Defendants are joint tortfeasors.  There is no explanation why there are joint tortfeasors and no submission on conspiracy.  He then moves on to say that it is trite law that the agent who commits a tort on behalf of the principal and the principal himself are joint tortfeasors.  He is evading the fact that the alleged duress was imposed by the 1^st Defendant on the Plaintiff.  The 2^nd Defendant has not participated in the telephone conversation.  There is yet no evidence to suggest he knew the telephone conversation between the Plaintiff and the 1^st Defendant.  I fail to see how it could be said that he is liable for any alleged tort committed by the 1^st Defendant.

117.  This is a very unfortunate case when the 2^nd Defendant has been dragged into a lengthy litigation.  He has stated his position at the very early stage that he has been a mere agent.  The act of the Plaintiff in pursuing the claim against the 2^nd Defendant is quite unreasonable. I am minded to not only allow cost in favour of the 2^nd Defendant, but allow him to have costs on indemnity basis.  I presume the Plaintiff may wish to address me on this point and I therefore adjourn this part for the solicitors for the 2^nd Defendant to fix a hearing before me for 30 minutes.

118.As for the 1^st Defendant, I see no reason why he should not be entitled to his costs.  I would give an order nisi that the Plaintiff should bear the costs of the 1^st Defendant with certificate for counsel to be taxed if not agreed.  Such order nisi to be become absolute within 14 days from the date hereof.

Mr Lawrence Ng, instructed by Messrs. Yip, Tse & Tang, for the Plaintiff.

Mr Kent Yee, instructed by Messrs. Winnie Leung & Co., for the 1^st Defendant.

Miss Vivian Lee, instructed by Messrs. Y. S. Lau & Partners, for the 2^nd Defendant (Defendant in DCCJ 6082/2006).