IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CIVIL ACTION NO. 18717 OF 2001
Coram: H.H. Judge Wong in Chambers
Date of Hearing: 11 April 2003
Date of Handing Down Judgment: 6 May 2003
1. This is an application for assessment of damages pursuant to the order of H.H. Judge Lok as a result of an O. 14 summons taken outby the Plaintiff.
2. The Plaintiff claims under 2 heads i.e. in respect of $52,301.76 being debts incurred by the Defendant’s down-line agents and $128,565.83being debts incurred by the Defendant.
3. On or about 1/2/99 the Defendant signed an Individual Agent’s agreement with the Plaintiff and a guarantee income agreement in whichthe Defendant would be entitled to a guaranteed income of $480,000 for the 1st year of his contract. That amount could be paid by12 monthly instalments and debited to the Defendant’s commission account. The said agreement was terminated on 1/6/2001.
4. In March and July 1999 the Plaintiff appointed Tsui Tin On Anthony and Mui Sui Man Sara as the Defendant’s down-line agents. As suchthe Defendant was entitled to an override commission for business solicited by them.
5. The Defendant signed 2 Appointment and Application Forms, one for Tsui and the other for Mui. In the application forms the Defendantguaranteed that should Tsui and Mui fail to earn sufficient commission to reimburse the Plaintiff for payments advanced, the Plaintiffshould reimburse the Plaintiff the balance of the amount advanced by the Plaintiff to them.
6. The only issue in respect of the Defendant’s personal debt is whether the advancement of $40,000 by the Plaintiff to the Defendantin January 99 was a guaranteed income. The calculation of the Defendant’s personal debt during his employment with the Plaintiffhad been set out clearly in the statement of account as at 3/7/02. The Defendant has not challenged its accuracy nor queried thePlaintiff about its calculation. The Individual Agreement the Defendant signed was in February 1999. Clause 12(ii) of that agreementstates “that every calculation of the balance of the commission account of the agent shall be determined by the company and shallbe final and conclusive and binding on the agent”.
7. In the letter to the Defendant by the Plaintiff dated 1/2/99, 4th paragraph states “You are also entitled to a guaranteed incomeof HK$480,000 for the 1st year of your contract with East Asia Aetna”. The contract was signed in February 1999. The Defendant cannotbe heard to say that the $40,000 in January 99 was part of the contract for guaranteed income as the contract did not exist in January99. Hence I find that the personal debt of the Defendant is as claimed i.e. $128,565.83.
8. As to the indebtedness incurred by the down line agents the Plaintiff has only put forward the Defendant’s guaranteed amount in respectof Tsui Tin On Anthony and Mui Siu Man Sara. The Defendant has signed a confirmation of the debt of Tsui in the sum of $6,431.06and the Plaintiff has also obtained judgment in the Small Claims Tribunal in the sum of $24,067.81. Both sums had not been recovered.
9. The Defendant has guaranteed to reimburse the Plaintiff for the payments advanced. The Defendant argued that he is not liable asthere was no consideration. I do not agree. The Defendant in consideration of receiving a portion of the commission received by hisunderline agents guaranteed to reimburse the Plaintiff in respect of payments advanced to his underline agents. In the premises theDefendant is also liable to the Plaintiff in the sums of $6,431.06 and $24,067.81.
10. I assess that the Defendant is liable to the Plaintiff in the sums of $128,565.83, $6,431.06 and $24,067.81 respectively.
11. In the premises there be judgment for $159,064.70 with interest at 1% above prime p.a. from 1st June 2001 until judgment and thereafterat judgment rate. Order nisi : Costs to Plaintiff.
Mr. Chan Koon Yuen, Windaus of Messrs. Fairbairn Catley Low & Kong for Plaintiff.
Mr. Tse Ka Lok of Messrs. Christopher Li & Co. for Defendant.