Leung Tong Fuk v Chan Yuk Kwan

Judgment Date05 November 1998
Citation[1998] 2 HKLRD 772
Judgement NumberFACV4/1998
Subject MatterFinal Appeal (Civil)
CourtCourt of Final Appeal (Hong Kong)


FACV No. 4 of 1998














Chief Justice Li, Mr Justice Litton PJ, Mr Justice Ching PJ,
Mr Justice Bokhary PJ and Lord Cooke of Thorndon NPJ

Date of Hearing: 17 September 1998

Date of Judgment: 5 November 1998




Chief Justice Li:

1. I have read the judgment of Mr Justice Bokhary PJ and agree

with it. For the reasons he gives, I would dismiss this appeal with no order as to costs.

Mr Justice Litton PJ:

2. I agree with Mr Justice Bokhary PJ's judgment.

Mr Justice Ching PJ:

3. I also agree with Mr Justice Bokhary PJ's judgment.

Mr Justice Bokhary PJ:


4. The appellant and respondent are former partners. Their partnership was formed in 1982, and dissolved in 1987. In 1994 the appellant commenced an action in the High Court against the respondent. The action was heard by Yeung J. By a judgment given on 12 November 1996 the judge dismissed the appellant's claim. The appellant appealed to the Court of Appeal. By a judgment given on 20 June 1997 the Court of Appeal (Liu JA and Leong and Yam JJ) dismissed that appeal. The appellant now appeals to this Court, having obtained leave to do so from the Court of Appeal.

5. Both parties appeared in person at the trial, in the Court of Appeal and in this Court.


6. This is an unfortunate case: first because it is between parties who are related (the appellant's younger sister is the respondent's wife) and secondly because, whatever the rights or wrongs of this dispute, the appellant does seem to have fallen on very hard times. Shortly stated the background to the case is as follows. The partnership between the appellant and respondent, which lasted from 1982 to 1987, was one carried on at a number of shops. At first the partnership's business was one of retailing computer components and of assembling computers for customers. Those components were imported from Taiwan. The main supplier was a Taiwanese concern by the name of Lien Yig Corporation ("Lien Yig").

7. In the middle of 1985 the partnership fell out with Lien Yig over payment for goods supplied by Lien Yig to the partnership. Lien Yig refused to supply the partnership with any more goods. As a result the partnership switched its business to one of repairing computers. That remained the partnership's business until it was dissolved in 1987.

8. The terms on which the partnership was dissolved are set out in an agreement dated 8 July 1987 ("the Dissolution Agreement") prepared by a firm of solicitors acting for both parties.

The total claim

9. The appellant's total claim is for $1,365,000 plus interest thereon and costs. This sum of $1,365,000 is made up of the following heads of claim:

(i) $750,000 representing 50 percent of the value which the appellant put on certain shop premises known as Shop No. 108, First Floor, Golden Shopping Centre, Yen Chow Street, Kowloon ("Shop No. 108");

(ii) $400,000 being a sum which the appellant seeks to recover on behalf of Lien Yig;

(iii) $145,000 representing the value of goods which the appellant says belonged to him but had been sold by the respondent without accounting to him for the price; and

(iv) $70,000 which the appellant says is due to him because the respondent has paid him $70,000 less than the full $217,000 payable to him by the respondent under the Dissolution Agreement.

I will now deal with the bases on which these four heads of claim were advanced by the appellant and - leaving aside limitation for the moment - rejected by the courts below.

First head of claim: $750,000 claimed as 50 percent of Shop No. 108's value

10. Shop No. 108 was purchased in 1983. It was assigned to the appellant and respondent as joint owners. And they were registered as such. By clause 2 of the Dissolution Agreement the appellant agreed to assign his share of Shop No. 108 to the respondent. On the same day as the one on which the Dissolution Agreement was executed, through a firm of solicitors other than the one which had prepared that agreement, the appellant assigned his share of that shop to the respondent and the respondent's wife.

11. In claiming 50 percent of the value of Shop No. 108 in the face of such assignment, the appellant contended that he had executed it under a mistaken belief induced by the respondent.

12. The facts relevant to that contention are as follows. Lien Yig had supplied the partnership with a batch of goods the price of which came to $400,000. Then, upon Lien Yig's instructions, $145,000 worth of goods were delivered by the partnership to a Mrs Chow. The goods delivered to Mrs Chow had not come from the $400,000 batch.

13. But it was the appellant's evidence that he believed that they had. He believed that, he said, because the respondent had told him so during the negotiations which culminated in the Dissolution Agreement and then the assignment by him of his half share of Shop No. 108 to the respondent and the respondent's wife. Thus, he said, he entered into such agreement and executed such assignment in that mistaken belief, induced by the respondent. The mistaken belief was, he said, that the partnership's $400,000 indebtedness to Lien Yig had been reduced by $145,000 (through the delivery at Lien Yig's instructions of $145,000 worth of goods out of the goods for which the partnership owed Lien Yig $400,000).

14. The respondent denied that he had told the appellant that the goods delivered to Mrs Chow had come from the $400,000 batch.

15. After seeing and hearing both of them, the judge believed the respondent and disbelieved the appellant. He rejected the appellant's evidence that the respondent had told him that the goods delivered to Mrs Chow had come from the $400,000 batch. And he further found, upon the whole of the evidence as he assessed it, that the goods in question had been stored at the appellant's residence, so that the appellant knew that the goods delivered to Mrs Chow had not come from the $400,000 batch.

16. Thus the judge rejected the allegations of fact upon which the appellant sought to recover in respect of Shop No. 108. The Court of Appeal supported all of the judge's findings of fact: under this head of claim and all the other ones too.

Second head of claim: $400,000 claimed on behalf of Lien Yig

17. The second head of claim is one purportedly made on behalf of Lien...

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