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Chan Kam Cheung v Chan Chuen Tai T/a Kwong Tai Garment Factory

Judgment Cited authorities 2 Cited in Precedent Map Related
Vincent
Judgment Date26 April 2013
Year2013
Judgement NumberDCCJ1708/2011
Subject MatterCivil Action
CourtDistrict Court (Hong Kong)
DCCJ1708/2011 CHAN KAM CHEUNG v. CHAN CHUEN TAI t/a KWONG TAI GARMENT FACTORY

DCCJ 1708/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION No. 1708 OF 2011

________________________

BETWEEN
CHAN KAM CHEUNG Plaintiff
and
CHAN CHUEN TAI trading as KWONG TAI GARMENT FACTORY Defendant

________________________

Before: Deputy District Judge S. P. Yip in Court
Dates of Trial:2nd & 3rd April 2013
Date of Judgment: 26th April 2013

________________________

J U D G M E N T

________________________

Background

1. This is a claim of HK$497,169.82 being the outstanding sum of six cheques (totalling HK$757,169.82) drawn by the Defendant in favour of the Plaintiff after deduction of the partial payment of HK$260,000 by the Defendant.

2. The Plaintiff presented only one out of the six cheques for payment on or about 10th March 2009 but it was dishonoured for the reason of “Account Closed.”

3. Letter of Demand was issued on 11th March 2011 by the Plaintiff’s solicitors and this action commenced on 6th May 2011.

4. The two main defences as pleaded in the Amended Defence are: (i) the six cheques drawn for the purpose of guarantee only; and (ii) the Defendant’s full payment of the sum of the six cheques by depositing into the Plaintiff’s bank account a total of HK$757,170.89 by 21 sums.

The Plaintiff’s Case

5. The Plaintiff has known Mr. Ng (the defence witness) for over 10 years and both of them are garment merchants. They began doing business in or about 2006/2007 when the Plaintiff started his own business. Since then the Plaintiff was acting as a middleman to line up garment trading for Mr. Ng by sourcing garment manufacturers/purchasers for Mr. Ng and the Plaintiff would earn commission depending on the quantity of the sales.

6. Although Mr. Ng has introduced the Defendant to the Plaintiff as his wife and business partner in Kwong Tai Garment Factory, the Plaintiff admitted that he seldom communicated with the Defendant at all material times.

7. From 2006 to 2008, the Plaintiff issued a total of 49 invoices to Mr. Ng / the Defendant in the course of the business dealings with them. Every time when the Plaintiff succeeded in concluding a contract for Mr. Ng and the Defendant, he would then issue an invoice to them by email. Mr. Ng / the Defendant would usually settle the invoice by depositing cheques into the Plaintiff’s bank account and informed the Plaintiff about the payment by email with an image file of the relevant deposit slip attached.

8. After the settlement of the invoices at pages 1–26, the subsequent invoices at pages 27–49, issued during the period from 31st August 2007 to 23rd January 2008, totalling $757,169.82 remain outstanding.

9. One day in March 2008, the Plaintiff attended the premises at Hang Wai Industrial Centre to demand payment of the above outstanding invoices and met Mr. Ng together with the Defendant.

10. Mr. Ng expressed that his cash flow was tight then but assured the Plaintiff of repayment by giving the Plaintiff his identity card copy, name card, address, and undated cheques. Mr. Ng also said that he would inform the Plaintiff by telephone to fill in the dates of the cheques for presentment as soon as he had money for payment.

11. At last, the Defendant drew 6 undated cheques (5 in the sum of HK$125,000 and 1 in the sum of HK$132,169.82) in the name of Kwong Tai Garment Factory and handed them to the Plaintiff at the scene.

12. As there were invoices still outstanding and the Defendant did not call the Plaintiff to present the cheques, the Plaintiff filled in the date of “10th March 2009” on one cheque (no.906254) and presented it for payment but it was dishonoured for the closure of the account according to the notice of dishonour by HSBC dated 12th March 2009. The Plaintiff has never presented the other 5 cheques.

13. Regarding the defence of full payment of all 6 cheques by the 21 payments from 24th April 2008 to 10th January 2009 with deposit slips produced by the Defendant, the Plaintiff only admitted the 11th to 21st payments totalling $260,000 out of the 21 deposits totalling HK$757,170.89 were made for the partial payment of the outstanding invoices pages 27–49.

14. The Plaintiff considered the first 10 payments as irrelevant to the subject outstanding invoices at pages 27–49, as those 10 payments had been made before the drawing of the 6 cheques and they were found out to be for repayment of invoices at pages 1–26 instead.

The Defendant’s Case

15. The Defendant denied acquaintance with the Plaintiff and any involvement of the business dealings between the Plaintiff and Mr. Ng save and except for drawing cheques for and on behalf of Mr. Ng upon his request to settle the Plaintiff’s invoices issued to Mr. Ng.

16. The circumstances leading to drawing the 6 cheques are quite different according to the Defendant. The Plaintiff came up to meet Mr. Ng and requested for cheques as security for payment or “揸手” (as what the Defendant said in court) and for the purpose of accounting to or comforting his boss, as the size of business dealings had become quite large then. The Defendant then drew the 6 cheques upon the request of Mr. Ng and handed them to the Plaintiff. Since the Plaintiff undertook not to present the cheques for payment, all 6 cheques were undated.

17. The Defendant produced records of 21 payments in the sum of HK$757,170.89 to show the full settlement of the 6 cheques totalling HK$757,169.82. However, when the Defendant was cross-examined about the first 10 payments in fact matched the amounts of some past invoices unrelated to the present claim, the Defendant only replied that she did not know about the invoices issued to Mr. Ng and her role was just issuing cheques upon Mr. Ng’s instructions.

18. When Mr. Ng was cross-examined of the above topic, Mr. Ng suddenly admitted that he has been indebted to the Plaintiff all along and is still indebted to the Plaintiff.

The Issues

19. According to the pleadings and the Statement of Issues in Dispute filed on 28th December 2012, there are just two issues:

Issue 1 – the purpose of delivery of the 6 cheques in question to the Plaintiff: whether for (a) repayment of the outstanding sum under Invoices at pages 27–49, or (b) providing guarantee by the Defendant to the Plaintiff for repayment of the Invoices at pages 27–49;

Issue 2 – whether the sum under Invoices at pages 27–49 had been fully repaid by the Defendant to the Plaintiff or not.

20. Mr. Yu for the Defendant raised two new issues, namely, “Inadequate Cause of Action” and “Total Failure of Consideration” in his Opening Submissions and made an application for leave to re-amend the Amended Defence which was opposed by the Mr. Sze for the Plaintiff. Mr. Yu eventually withdrew such application before the first witness was called and confirmed the trial should proceed with the defences as pleaded in the Amended Defence and the issues as agreed by parties in the Statement of Issues in Dispute.

21. As the defence witness Mr. Ng has conceded under cross-examination that there are outstanding invoices, Mr. Yu for the Defendant abandoned the line of argument of the full payment of the invoices at pages 27–49 in his Closing Submissions.

Assessment of the Witnesses

22. The Plaintiff himself has elected to give evidence without calling any other witnesses. I have considered his evidence carefully having regard to Mr. Yu’s criticism of the Plaintiff’s credibility by the Plaintiff’s failure to recollect certain details such as the period of time from conclusion of the transaction to the delivery of the invoice and lack of knowledge of the products manufactured by King Point Ltd. and other attacks of the Plaintiff.

23. On the other side, the Defendant herself and Mr. Ng gave evidence in court. The following problems of their evidence are observed.

24. The Defendant said she had never known the Plaintiff in her first witness statement but she then admitted that she in fact knew the Plaintiff many years ago and admitted that she did not tell the whole truth in her witness statement but it was not wholly untrue (“假又假唔晒”) under cross-examination.

25. One of the major defences is full payment of the 6 cheques by the 21 deposits. When the Defendant was cross-examined on the first 10 deposits for settlement of some past invoices unrelated to the present claim, the Defendant was unable to answer most of the questions and said Mr. Ng should be asked.

26. When Mr. Ng was confronted with questions of the same topic, Mr. Ng also said he was not familiar with the payments of the invoices and referred to the Defendant for such answers. After further cross-examination, Mr. Ng eventually admitted that he has owed the Plaintiff all along and there are still outstanding invoices.

27. Mr. Ng’s witness statement is very short with 3 sentences / paragraphs only. Apart from denying having married the Defendant, Mr. Ng just adopted and confirmed the contents of the two witness statements of the Defendant as truthful statements.

28. Mr. Ng under cross-examination departed from his or the Defendant’s witness statements in two major areas: that full payments of all the 6 cheques and that the Defendant has never known the Plaintiff; he conceded both are not true.

29. Having considered the evidence and observing the witnesses’ demeanour and the discrepancies, I find that both the Defendant and Mr. Ng are not truthful and reliable witnesses.

Partial Payment of the 6 Cheques

30. As Mr. Ng has conceded under cross-examination that there are outstanding invoices and the Mr. Yu for the Defendant has abandoned this line of...

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