Wai Hing Lee v Yuk Luen Lee [2010] FJHC 367; HBC087.2006L (27 August 2010)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 87 of 2006L

BETWEEN:

WAI HING LEE
Plaintiff

AND:

YUK LUEN LEE and RICHARD YING HIN LEE
as Executors and Trustees of the late Allen Lee (Original First Defendant)
1st Defendants

AND:

LUM SUI FONG
2nd Defendant

FINAL JUDGMENT

Judgment of: Inoke J.

Counsel Appearing: Mr B C Patel for the Plaintiff
Mr A Patel for the 1st and 2nd Defendants

Solicitors: Young & Assocs for the Plaintiff
S B Patel & Co for the Defendants

Date of Hearing: 23 April 2010
Date of Judgment: 27 August 2010

INTRODUCTION

[1] The parties in this action are members of the Lee family that own the Lees Group of Companies in Fiji. The Plaintiff lent a sum of money to her brother in New Zealand between 1992 and 1994. In 1997, her brother sold his interest in the Group to his parents. They agreed that part of the purchase price was for his parents to take over his loan from his sister. She says the loan was only partly repaid and sued her parents for the balance. Her parents say they have in fact overpaid her and counter-claimed for the overpayment.

THE PARTIES

[2] The original First Defendant was the late Mr Allen Lee. He was sued as the executor and trustee of his father, the late Mr Lee Wah Yip. The Plaintiff is Allen Lee's sister. The Second Defendant is their mother. Allen Lee died on 4 June 2007 before this action went to trial so his executors and trustees became substituted in his place. They are the current First Defendants, Richard Lee, who is Allen Lee's son and Yuk Luen Lee, who is Allen Lee's wife.

[3] The Plaintiff lent NZD$315,000 to her late brother, Allan Lee, in New Zealand. Subsequently, repayment of the loan was taken over by their parents in July 1997. Two repayments were made by her parents in July 2000 in Hong Kong but as at 31 July 2005, the balance had not been paid despite a demand having been made.

CASE HISTORY

[4] The Writ of Summons and Statement of Claim was filed on 28 March 2006 in which the First Defendant was Allen Lee as executor and trustee of the late Lee Wah Yip. The Second Defendant was her mother. The Defence and Counter Claim was filed on 13 April 2006 and Reply and Answer filed on 12 May 2006. The First Defendant filed further and better particulars of their Defence on 5 February 2007. On 11 August 2008, the current First Defendants, his wife and son respectively, became substituted for Allan Lee. The Plaintiff filed her list of documents on 29 July 2009 and the Defendants filed theirs on 1 September 2009. On 7 October 2009, the Plaintiff filed a Summons for an interim Mareva injunction restraining the Defendants from disposing and removing from Fiji any assets of her late brother and father. She also asked for an order that the Defendants file an affidavit in Court disclosing all their assets in Fiji. The application was made on the grounds that the Defendants were selling off assets in Fiji which might not leave enough to satisfy any judgment she might get. On 13 October 2009, I granted a short term interim Mareva injunction and gave directions for a full hearing of the application on 3 November 2009. The application was adjourned on two more occasions but in the end the application was not pursued by the time this matter went to trial on 23 April 2010. The Minutes of Pre Trial Conference were filed on 5 November 2009.

THE STATEMENT OF CLAIM

[5] The Plaintiff pleaded in her Statement of Claim that prior to July 1997, she lent NZD$315,000 to her later brother Allan Lee in New Zealand. By a Sale and Purchase Agreement made on 25 July 1997 (the "Agreement") her brother agreed to sell to their parents his shares and interest in the Lees Group of Companies. Clause 3.2(a) of the Agreement stated that payment of the purchase price included deduction of $315,000 "payable to Wai Hing Lee in full satisfaction of the vendor's liability to her". In satisfaction of that liability, her parents paid in Hong Kong the equivalent of NZD$77,906.40 on 10 July 2000 and NZ$D62,226.34 on 25 July 2000. As at 31 July 2005, her parents still owed her NZD$174,867.26. On 7 October 2005, she made a demand for this amount but her parents have failed to pay. She claims this amount and interest at 10% on reducing balance from 25 July 1997. Her claim is based on 3 causes of action: novation, moneys had and received, and trust.

THE DEFENCE AND COUNTER-CLAIM

[6] In his Defence Allen Lee says that between 1993 and 1994 in New Zealand, Allen Lee personally took two loans from the Plaintiff totalling NZD$315,000. He admits that an agreement was entered into on 25 July 1997 but denies that any money is owing to the Plaintiff. His father paid in 2001 HK$700,000 (NZD$199,221.00) to the Plaintiff. He set out in three schedules 1, 2 and 3 payments between May 1994 and 2001 totalling NZD$550,585.54. He therefore says the Plaintiff has been overpaid by NZD$235,585.54 and counter-claims for this amount.

REPLY AND ANSWER

[7] The Plaintiff denies that her father paid her HKD$700,000. She says that each of the Schedule 1 payments were from her own account and not payments by the Defendants. She lent to her brother NZD$250,000 on 8 June 1992 and a further NZD$65,000 in around December 1994. Both loans carried 10% pa interest. No repayments were made until 3 May 1994. The payments in Schedule 2 were made in reduction of interest. The total of Schedule 3 payments is less than what is stated. The Plaintiff denies there was overpayment or otherwise owing money to the Defendants.

FURTHER PARTICULARS OF THE DEFENCE

[8] In the further particulars of the Defence, the Allan Lee said that the Plaintiff had the authority to sing on all the bank accounts of their parents. She herself told their parents that she had withdrawn HKD$700,000 from their account. When asked to give copies of bank statements for the period 1997 to 2006, the Plaintiff refused to give them all saying that she did not have them.

THE PRE-TRIAL CONFERENCE MINUTES

[9] The PTC Minutes recorded the following important agreed facts. Between 1993 and 1994 the Plaintiff made two loans to the late Allen Lee personally totalling NZD$315,000 in Auckland, New Zealand. By virtue of clause 3.2(a) of the Agreement signed on 25 July 1997 between Allen Lee as vendor and Lee Wah Yip and Lum Sui Fong as purchaser, Lee Wah Yip and Lum Sui Fong took over and assumed the personal debt of NZD$315,000 owed by Allen Lee to the Plaintiff. Two payments were made by the Plaintiff's parents: (1) HKD$ 273,188.73 (NZD$ 77,906.40) on 10 July 2000, and (2) HKD$ 217,591.46 (NZD$ 62,226.34) on 25 July 2000.

THE HEARING

Preliminary Applications

[10] At the commencement of the hearing Mr Anu Patel, counsel for the Second Defendant produced a letter from his client's doctor in Australia that Mrs Lee suffers from dementia and her judgment is impaired and that she was not in a position to appear in Court. The letter was dated 20 April 2010 and faxed to her solicitors in Fiji on 21 April. In light of his client's medical and mental condition, Mr Patel asked for an adjournment to allow his client's next friend or guardian ad litem to appear, pursuant to Order 80 rule 2 of the High Court Rules 1988. The application was opposed. The Plaintiff had come from overseas and her counsel was only notified of the application on the morning of the trial. The illness was not new; it did not just happen overnight and this matter has been pending for sometime now. I took the view that this was a technical point and the attendance of her guardian would not have advanced her case. For these reasons I refused the application for adjournment.

[11] Mr Anu Patel then applied to withdraw as counsel for the Plaintiff's mother because he had no instructions. The application was also opposed because he had acted thus far as her counsel. The Defendants' cases were not adverse to each other; they all had the same defence and counter-claim; and enforcement of the claim is not relevant to liability. Taking these matters into account and the need to safeguard the Second Defendant's interests I refused leave for her counsel to withdraw.

[12] The next issue was who to go first. Mr B C Patel, counsel for the Plaintiff, argued that the Defendants should begin for two reasons. The Defendants according to him bore the onus on all the issues. The debt in this case and the amount lent was not in dispute. The Defendants had to prove that the debt had been paid and was over-paid in the amount counter-claimed. Secondly, the Plaintiff should not be required to prove the negative. She should hear the evidence of the alleged payments before giving evidence in rebuttal.

[13] He referred me to three case authorities. The first was Ram Sharan v Kanyawati [1969] 15 FLR 220. In that case, the appellant claimed the right to probate of a will executed on the day before the testator died. The respondent brought an action claiming probate under an earlier will alleging that the will relied upon by the appellant was not signed or acknowledged by the testator and that the testator was not of sound mind, memory or understanding at the time. The Court of Appeal held that the appellant had the burden of proof of all the issues and that the trial Judge was correct in ruling that the appellant should begin. That was the effect of the now O 35 r 5(6) of the High Court Rules 1988.

[14] The second case was that of Beevis v Dawson [1957] 1 QB 195, 204, 215 as authority for the proposition that in exercising its discretion, the Court would have regard to the most convenient way of dealing with the matter in the interests of justice, in the interests of the parties, and from the point of view of the Court. Singleton LJ also said in that passage that he doubted that there was a hard and fast rule and the authorities seemed to show that the practice was based on general convenience.

[15] The third case that counsel cited was McLaren & Sons v Davies 918900 6 TLR 372, 373 where it was said that it is inconvenient to require the defendant to prove the negative of an issue on which the plaintiff bears the onus of proof before hearing the evidence to be adduced by the plaintiff.

Again it is clear from that case that it is a question of convenience. How much time could be saved?

[16] In the exercise of the discretion given by O 35 r 5(1) HCR, I directed the Plaintiff to begin. I did not think that the Defendants had the onus of proof on all the issues. Ms Lee still had to show that she only received a certain sum less than what she lent to her brother. That was the very crux of the case. It was not the case that she had to prove that she did not receive the full amount. From the proof of receipt of the lesser sum, I can properly infer that she did not receive the rest. It was for the Defendants to then show that she was paid more. Also, because Ms Lee's mother was not able to give evidence and if the other defendants did not give evidence, it would have been most embarrassing for them and, we would be in the same situation with the Plaintiff going first. However, I gave her leave to be recalled if the Defendants adduced any evidence which she needed to rebut.

The Plaintiff's Case

PW1

[17] Ms Lee gave evidence. She is a dentist and lives and practices in Hong Kong. The Second Defendant is her mother. Her father died recently. Allen Lee was her brother. She lent money to her brother in New Zealand, a total of NZD$315,000 which was made in two payments, $250,000 on 8 June 1992 and $65,000 in December 1994. Her brother requested it. They agreed that he would pay 10% interest on the loan which he did. In 1994 he paid $3,000 per month into her account in New Zealand. She was referred to a summary of calculations of simple interest on principal amounts prepared by Robert Lee. I do no think it is necessary for me to go into the details because the document speaks for itself. I accept her evidence that the balance owing, including 10% interest, was $487,421 as at 23 April 2010, the date of the trial. The exchange rate in July 1997 between FJD and NZD was 1.06177.

[18] Ms Lee was aware of the Agreement. Her brother Edmund told her of the Agreement. She first saw it a few years after it was signed. Clause 3.2(a) stated that the purchase price was to be paid by the purchaser (her parents) to the vendor (Allen Lee) "by deducting $315,000 payable to Wai Hing Lee in full satisfaction of the vendor's liability to her."

[19] Ms Lee said some of the payments alleged by the Defendants to be payments made by them to her were in fact the other way round. These were the Schedule 1 payments in the Defence totalling $32,762.38.

[20] In cross examination she said she was younger than her brother Allen. There was no written loan agreement. She did not know the purpose of the loan at the time but do now. She disagreed that there was no interest to be paid because the repayments actually made included interest. She did not know who prepared the Agreement between her parents and her brother. She had not input into it. Her parents told her before they entered into the Agreement that they were taking over Allen's debts. They asked and she agreed for then to deduct from the price the amount owed by Allen to her. Her parents made two payments. She denied being advanced HKD$700,000 to purchase equipment for her dental practice in Hong Kong. She said the equipment only cost her $70,000.

The Defendants' Case

[21] The Defendants were not able to call any evidence.

CONSIDERATION OF THE EVIDENCE AND FINDINGS

[22] It is clear from the PTC Minutes that there is no issue that the amount stated in the Agreement of 25 July 1997 was NZD$315,000 and not FJD$315,000. Even if there is, I have no hesitation in finding that it was in New Zealand dollars. Clause 3.2(a) specifically refers to the debt owed by Allen Lee to the Plaintiff and the exact amount in figures, $315,000. The only debt owed by him in that amount was the two loans totalling NZD$315,000, an agreed fact.

[23] I also find that there is no issue that the debt was properly assigned, novated or otherwise taken over by Ms Lee's parents with her consent. It is not necessary to decide by which means the debt was taken over for the purposes of this judgment. It was taken over and assumed by her parents with the Plaintiff's knowledge and approval.

[24] Thirdly, the Defendants have not adduced any evidence to prove their counter-claim so it is dismissed.

[25] Neither have they proven that they actually made any of the payments alleged in their Defence so their Defence fails. Indeed, the Plaintiff's evidence was that at least $32,726.38 of the amount which they claim to have repaid was not in fact repayment by them.

[26] This case is therefore essentially an undefended claim. The Plaintiff still has to prove her case. She had produced for her a table of all payments made in respect of the loan. The table was not seriously challenged in cross-examination, possibly because of the Defendants' failure to give their counsel instructions. The table included re-payments for 10% interest on the principal sum. In the circumstances, I accept her oral and documentary evidence and therefore find that she has proven her claim.

[27] Her counsel submitted that the Defendants liability crystallized on the date of the Agreement, 25 July 1997 in NZD at the then prevailing exchange rate. I think it made no difference as to what the exchange rate was then or now. The original debt was in NZD. I have found that the debt that was taken over by the Plaintiff's parents was in NZD. If the Defendants decide to pay in HKD or in FJD it is for them to make up for the exchange rate differences.

[28] The Plaintiff's table showed $487,421 due to the Plaintiff as at the date of the trial and daily interest of 10% on the outstanding balance of $67.40. Accordingly, judgment is in her favour in those amounts in New Zealand dollars.

COSTS

[29] Although this is a commercial matter but nevertheless a family matter so I make no order as to costs.

ORDERS

[30] The Orders are as follows:

1. Judgment for the Plaintiff in the sum of NZD$487,421 together with interest thereon of $67.40 per day until the date of payment.
   
2. The Defendants' counter-claim is dismissed.
   
3. There is no order as to costs.
   

Sosefo Inoke
Judge