大象商旅服務（深圳）有限公司 v. RICH TRAVEL SERVICE LTD

DCCJ 5846/2018

[2020] HKDC 80

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5846 OF 2018

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DECISION

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Introduction

1.  By summons dated 14 November 2019, the plaintiff sought leave to appeal against the Decision of this Court dated 29 October 2019 and an extension of 2 days to make such application. 

2.  The reason for the delay in filing the application for leave was that the office of Solicitors for the plaintiff was in Central which at that time had been the venue of a number of large-scale protests resulting in staff being unable to attend to their daily work in any regular fashion.  The application for extension was not opposed.  The Court accordingly granted the application for extension pursuant to powers conferred on the Court by Order 58 Rule 2(10) of the Rules of the District Court.

3.  Leave to appeal is sought by the plaintiff on the basis of the plaintiff’s alternative claim of mistake.  In a skeleton argument filed with the Court prior to the hearing, the plaintiff’s Counsel elaborates on its grounds which are quoted as follows (including the bold and underlined as stated in the said grounds):-

“(a)  Contrary to §7 of the Judgment, P’s argument was that the payments were made in its mistaken belief that it “had entered into the Ticket Sale and Purchase Agreements with the defendants and such payments were to settle invoices issued by the defendant (Amended Statement of Claim §10A);

(b)  It has never been P’s case that the payment to D’s account per se was a mistake.  In contrast, P knew full well that it was paying into D’s account and there was no mistake as to that;

(c)  The crucial element of P’s case is that P made payments to D in the belief that P had entered into an agreement with D, pursuant to invoices which had been issued by D.  In this regard, D claims that it had not entered into any agreement with D but were false instruments. Proceeding on the basis that D’s case is accepted in full, the belief which caused P to make the payments to D was mistaken.

(d)  For this reason, the Court erred in dismissing the summary judgment on the. Grounds that there was no mistake because P intended to make payments to D.”

4.  Having carefully considered the above grounds for leave to appeal by the plaintiff, the Court cannot regrettably find that the grounds of appeal put forward by the plaintiff affords the plaintiff any reasonable grounds of success in an appeal.  As stated in paragraph 10 of my Decision, any assertion of mistaken belief cannot simply be looked at in a vacuum.  As the invoices produced by the plaintiff clearly indicate, the payments are to be made to the defendant and there clearly is no mistake as to the payment.  The alleged payment by mistake arises from the defendant’s defence that there was no commercial relationship between the defendant and the plaintiff, but that does not necessarily mean that the defendant has to refund the plaintiff.  The facts revealed by the evidence filed with the Court, indicate that whether or not there is a contractual relationship with the defendant or another contractual relationship, are matters which require a trial.  The observations of the Court in this respect are set out from paragraphs 12 – 15 of the Court’s Decision, as to which the plaintiff provides no answer.  

5.  If anything, the grounds of appeal reinforce the conclusion that there are triable issues in this case.  In ground (c), it is asserted that the since the defendant claims that it had not entered into any contractual relationship with the plaintiff, then the invoices must be false instruments.  As observed by the Court in paragraph 12 of its Decision, the payment to the defendant under the invoices could indicate a number of scenarios.  It does not follow that the invoices were false instruments but if the plaintiff were to insist on this characterisation, then clearly there is at least a triable issue.

Decision

6.  In the circumstances, the Court regrettably refuses leave to appeal.

7.  The Court will make an order nisi that the costs of this application (including the application for extension of time) be to the defendant, with certificate for Counsel, to be taxed if not agreed, in accordance with the District Court Scale.  This order nisi shall become absolute if no application for variation is made within 14 days of this Decision.

8.  Finally, I would like to thank Counsel for their assistance in this application.

DCCJ 5846/2018

[2019] HKDC 1352

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5846 OF 2018

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JUDGMENT

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Introduction

1.  This is an application by the plaintiff for summary judgment for the sum of $764,304.00 together with interest from 19 December 2018, at the rate of 1% over prime rate until judgment.

2.  The plaintiff is a travel agent based in Shenzhen.  By its unamended State of Claim dated 19 December 2018, it claims against the defendant for the refund of monies paid for the supply of air tickets but which were never supplied.  The plaintiff averred in its unamended Statement of Claim that by 6 Sales and Purchase of air tickets agreements, the defendant (a travel agent based in Hong Kong) agreed to sell 292 air tickets to the plaintiff, as evidenced by 6 invoices, particularized in paragraph 4 therein.  The plaintiff then avers that sale and purchase agreements were entered into by one Yung Yee Fai (also known as “Berry Yung”), acting expressly as the defendant’s agent and on the defendant’s behalf in dealing with the plaintiff.

3.  The plaintiff further averred that the invoices were settled in full by way of payments into the Bank of China account of the defendant on dates therein particularised, with the plaintiff paying the defendant a total of $1,156.720.00 (taking credit for earlier payments of $28,000 and $9,000), but the defendant only delivered 96 tickets on or about 15 November 2018.  It is then averred that the defendant thereafter did not or refused to deliver the remaining tickets, and is thereby, obliged to refund the plaintiff in the amount of $801,304.00.

4.  The defendant filed a Defence on 7 May 2019, denying that it had any commercial relationship with the plaintiff.  The defendant admitted in its unamended Defence that it did receive payments in its account with the Bank of China in the same amounts and on the same dates as stated in the Statement of Claim but those sums were payments made by one Lester Hui for the sale of air tickets by the defendant to Lester Hui and there thus was no commercial relationship between the defendant and the plaintiff or at all.

5.  Upon seeing the Defence, the plaintiff amended its Statement of Claim on 3 May 2019 by adding a paragraph 10A in the following terms:-

“Alternatively, even if the Defendant did not have any commercial relationship or dealings with the Plaintiff and the Defendant did not enter into the Ticket Sale and Purchase Agreements with the Plaintiff (as alleged by the Defendant and denied by the Plaintiff), the Defendant would still be liable to return the sum of HK $764, 304 (i.e. HK $1, 156, 720 [sum transferred to the Defendants’s account as pleaded in paragraph 6 above] less HK $392, 416 [value of 96 delivered tickets] to the Plaintiff in any event, as the Plaintiff would have made such payments on the basis of its mistaken believe that the Plaintiff had entered into the Ticket Sale and Purchase Agreements with the Defendant and such payments were to settle invoices issued by the Defendant”.

6.  The defendant amended its Defence by denying the aforesaid paragraph 10A in the Amended Statement of Claim.

7.  The plaintiff, appearing by Counsel, applied for summary judgment on the basis of this alternative case.  The argument is that the payment had been directed into the defendant’s Account upon the mistaken belief that the payment was payment for air tickets supplied by the defendant.  Thus, the plaintiff seeks not to rely on its primary case.

Decision

8.  Both the plaintiff and the defendant, who also appeared in Court by Counsel, have by their representatives made affirmations, which have been filed in Court. 

9.  In an application for summary judgment, it is trite that the case has to be clear that there is no arguable defence to the action.  The practice is that unless, on the evidence, the Defence put forward by the defendant is unsustainable, then summary judgment should not be given.  I remind myself that this is not a trial on affidavit, but merely an exercise as to whether the defendant has shown that he has a case which should be tried, namely, whether the case put forward is something to which credence could reasonably be ascribed in the circumstances of the case[1].

10.  The plaintiff’s reliance on mistake cannot be simply looked at in a vacuum.  In paragraph 10A of the Amended Statement of Claim, the plaintiff pleads mistaken belief that monies paid into the defendant’s Bank of China Account was payment to the defendant for sale of air tickets by the defendant to the plaintiff.  Each of the invoices exhibited to Mr Ouyang Wujin’s affirmation (“OYWJ-2”), however, showed that the invoices purported to be invoices issued by the defendant signed by one Lester Hui issued not to the plaintiff but to “Mr Berry Yung, ATTN: Shenzhen Leading Holiday Travel Service Co., Ltd”.  There are two boxes at the bottom of each invoice to the following effect:-

First Box:

“Please kindly settle the payment on or before 21-Aug-2018 of the follow account”

Second Box:

“BANK NAME: BANK OF CHINA (HONG KONG)

ACCOUNT NO.:012-874-1-1083231

BENEFICIARY’S NAME: RICH TRAVEL SERVICE LTD”

11.  As it is the case of the plaintiff that it dealt with Berry Yung acting expressly as agent for the defendant, and the invoice relied on was issued to Berry Yung with the direction for payment as shown in the Second Box where the beneficiary is clearly shown as the defendant, there can be no mistake that the payment was intended to be made to the defendant.

12.  It is the defendant’s case, as shown in the detailed affirmation affirmed by Chan Yuk King, Sherla, that the defendant had only contracted with Lester Hui as shown by invoices exhibited showing sales to an unspecified buyer but “Attn: Lester Hui” (“CYKS-5”).  Given the circumstances shown by the two sets of invoices in the respective affirmations of the parties, it is also well possible that Lester Hui on-sold to Berry Yung who then on-sold to the plaintiff, with directions for payment to the defendant.  It is not unusual in commercial transactions for payments to be made by third parties.  It also equally possible, on the evidence presented in the affirmations, that Berry Yang was constituted an agent for the defendant.  Under either scenario, it is not unusual for payment to be directed to be made to the defendant, and in either case, such payment does not appear to be a mistaken payment.

13.  In the world of wholesaling of air tickets, it seems from the evidence before the Court that it is not beyond the bounds of reasonable possibility that tickets are sold from party to party, that is from one wholesaler to another, with payments directed from one contracting party to the ultimate seller. 

14.  Whether or not there was a contractual relationship between the plaintiff and the defendant through the agency of Berry Yung is a matter which has to be tried.  It is clear to me that the defendant has shown an arguable defence as the documents do not show clearly on a balance of probability that the payment made by the plaintiff to the defendant was mistaken.

15.  On the contrary, there is a potential case that the payment by the plaintiff to the defendant was made pursuant to a contract either through the agency of Berry Yung for the defendant or as the defendant says, a contract with Berry Yung as Principal against a back to back contract between Berry Yung and Lester Hui who in turn contracted as a principal with the defendant for the same air tickets.

16.  Accordingly, despite the able arguments of Counsel for the plaintiff, it is clear that this is not a case where the Plaintiff can reasonably expect to get summary judgment.

Disposition

17.  It is hereby ordered that the summons for summary judgment be dismissed.

18.  I shall make an order nisi that the costs of this application be paid by the plaintiff to the defendant, with certificate for Counsel, to be taxed if not agreed.  This order nisi shall become absolute if no application for variation is made within 14 days hereof.

19.  Finally, I would like to thank Counsel for their assistance in this application.

Mr Justin Lam, instructed by Raymond Siu & Lawyers, for the plaintiff

Mr Wu Yingpeng, instructed by C F Lee & Co, for the defendant