IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO. 88 OF 2005
(ON APPEAL FROM DCCJ NO. 6376 OF 2003)
Before: Hon Cheung, Yeung and Tang JJA in Court
Date of Hearing: 3 March 2006
Date of Judgment: 15 March 2006
J U D G M E N T
Hon Tang JA (giving the judgment of the Court):
1. This is an appeal against a finding of fact. Mr Robert Pang, counsel for the appellant, in an able submission, acknowledged thedifficulties on an appeal against the finding of fact, namely, that we cannot interfere unless we are satisfied that the judge wasplainly wrong.
2. The claim which succeeded before District Judge C B Chan was based on an oral guarantee.
3. The respondent (the plaintiff) was a contractor and the 1st defendant was a sub-sub-contractor, in relation to a project called K2 Project.
4. The appellant (2nd defendant) was a director and shareholder of the 1st defendant.
5. On 9 September 2003, the plaintiff and the 1st defendant agreed to terminate the sub-sub-contract and for the 1st defendant to leave the site forthwith.
6. It was also agreed that the plaintiff would pay the 1st defendant $500,000 and that the 1st defendant should “bear all labour responsibilities, including wages, wages in arrears etc.” up to the termination.
7. Eventually, the 1st defendant failed to pay its workers and as the contractor, the plaintiff was held liable to pay the sum of $556,770 in LBTC 100133of 2003.
8. The plaintiff’s claim is that the 2nd defendant had orally guaranteed that the 1st defendant would perform its duties under the termination agreement.
9. Whether there was such an oral guarantee was one of the fact and depended on the evidence of Mr Lor Wai Leung, a director of theplaintiff, and the 2nd defendant.
10. It was Mr Lor’s evidence that initially he intended to pay $500,000 by a cheque post-dated to 25 September 2003, but later agreedto give the 2nd defendant a cash cheque in return for the 2nd defendant guaranteeing the performance of the 1st defendant of the terms of the termination agreement.
11. We note in passing that on 9 September 2003, 2 cheques were issued by the plaintiff in favour of the 1st defendant, one for $500,000 in relation to the termination of the K2 Project, and the other for $200,000 in respect of the Tai PoProject. The cheque for $200,000 in respect of the Tai Po Project was post-dated to 25 September 2003.
12. This is what the judge said in paras. 27-29 of her judgment:
13. Mr Pang submitted that the judge had not expressly rejected the appellant’s evidence, or expressed a general preference for theevidence of Mr Lor.
14. We believe that although the judge had not expressly rejected the appellant’s evidence, it is clear that she preferred Mr Lor’sevidence.
15. Mr Lor’s evidence, of course, hinged on his allegation that he had intended to give the 1st defendant a post-dated cheque. That was accepted by the judge. This was critical to the plaintiff’s case, and highly damagingto the 2nd defendant’s defence.
16. Mr Pang submitted that Mr Lor’s evidence should not have been accepted because post-dating the cheque would not have preventedthe 1st defendant’s workers from suing the plaintiff, and that under section 43D of the Employment Ordinance, Cap. 57, these workers had at least 60 days to give notice to the plaintiff that their wages had not been paid. Thus, the plaintiffmight not know by 25 September 2003 that these workers had not been paid, and giving a cheque post-dated to 25 September 2003 wouldnot have served his purpose.
17. According to Mr Lor, 25 September 2003 was the next payday. And looking at the matter with common sense, unless the workers werepaid within a relatively short time of 9 September 2003, it was unlikely that they would wait 60 days before notifying the plaintiffthat they had not been paid, so postponing the post-dating cheque until 25 September 2003 was a reasonable measure. Indeed, it seemsthat the cheque for $200,000 post-dated to 25 September 2003 was in fact dishonoured.
18. Nor was this point explored below.
19. In all the circumstances, we are unable to say that the judge was wrong, much less plainly wrong.
20. For the above reasons, we would dismiss the appeal. We also make an order nisi that the respondent is to have the costs of the appeal to be taxed if not agreed.
Mr Raymond Lau, instructed by Messrs Ng & Co., for the Plaintiff (Respondent).
Mr Robert Y H Pang, instructed by Messrs Joseph Leung & Associates, for the 2nd Defendant (Appellant).