1938-04-06 — Page 11

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GENERAL

4

UNION TRADING WINS NEWSPRINT

later by Chiu Chiu Ting regarding the contracts which are the sub- lect matter of this action. The conduct of Chlu Kwok himself. after November 7 is to my mind very material. Mr. Chum has stated in evidence that owing to the fall in prices he, as soon as the seven days grace had expired, pressed the first defendant firm to take delivery of the goods and pay, for them. On November 23 we And Chiu Kwok executing a bill of sale in favour of a woman numed Li Yung, who is said to be unknown at the address which she gave, and an address which in-

Tok. Chiu Kwok has admitted that he does not know the woman. that he has no idea of her where- abouts, and that the interest pay- able monthly on the bill of sale is given by him to Chiu Chiu Ting to pay to the bill of sale holder. On November 30 Messrs. Leo d'Almada & Co. are instructed, by a senior employee of the first de- tendant Arm, to write to the plain- tis and on December 4 the bust- ness, sald by Chiu Kwok to be a remunerative one, is transferred to the Tung King Company, the managing partner of which is an an ex-employee of the first de- fendant firm.

CLAIM

(Continued from Page 2)

meaning which they had at the time when the enactment was passed.

In Twycross v. Grant 11877) 2 C.P.D. Cockburn C.J. puts the position thus "But I desire to place liquor licence; and it is in evidence the argument on broader grounds. that the old sign board is still on I do not and myself at liberty to the premises and that the business speculate on what may have been is carried on under the old name. the intention of the legislature Nothing can more clearly when I find a positive enactment establish the relations of trans-framed in general terms, and a feror and transferee within the positive evil which is within its meaning of the Ordinance.

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Chiu Kwok's defence is that he has been defrauded by his em- ployees, the fraud being simple to carry out for the reason that he left his business chop in a drawer on the premises, а drawer which any member of the staff had ready access. When the writ was served on December . how ever, he made no enquiries from any of his staff, nor has he up to "the date on which he gave evidence, taken, any serious steps to ascer- tain what his employées had been doing over so long a period. In an affidavit which he swore on Janu- ary 13, 1938. he stated that he was the only person entitled to afx the chop of the Kwok Man Chau Ka authoritatively: that none of his tokis or assistants had received any authority from him to affix the chop of the firm to any such contracts; and that he could only assume either that the chop had been wrongfully converted and utilised by Chan Tok for his own purposes, or that the chop on the contracts was a forgery. In spite of that attitude to the plaintiffs' claim he did nothing, and he even acquiesced in the continued em- ployment of Chiu Chiu Ting and. Chan Tok by the Tung Hing Com- pany, the transferees of his bust- ness. No honest man, righteously incensed at the abuse of his con- fidence by his employées could so have

conducted himself. When.

on the eve of trial, efforts were made to serve a subpoena on Chan Tok he could not be found, though there is ample evidence that he had been at work on the premises only a few days earlier, and the Importance of his testimony to Chiu Kwok, if Chlu Kwok's story is true, must be manifest to every- one. Lastly, I must refer to an answer given by Chlu Kwok un-

der cross-examination by Mr.

d'Almada. "When I realised that my fokis had cheated me about these contracts - I decided to get out of the business.” That answer must relate back to a period before December 4, the date of the agreement for the transfer of the business, and it show's con- clusively that before the issue of the writ Chiu Kwok knew of the dealings with the plaintiffs.

I find without hesitation that Chtu Kwok was fully aware that the contracts sued on had been made in the name of and on be- half of his firm, and that Chiu

› Chiu Ting and Chan Tok were his accredited agents, and there will therefore be judgment against the first defendant firm.

The

second defendants, The Tung Hing Company, are sought to be made lable by reason, of the provisions of the Fraudulent Transfer of Businesses Ordinance, 1923.

Mr. Fitzroy for the defendants has submitted first that the agree. ment of December 4 does not con- stitute a transfer of the business but is at most no more than a hiring of farnitüre and utensils, and secondly, that if the docu- ment evidences a transfer of the business the transferees are not Hable in this case for the reason that the transactions sued on had nothing to do with the business of the transferors, which was that of of a restaurant keeper.

I have already referred to the effect of the agreement between Chiu Kwok and the Tung Hing Company as a transfer of the businews. "Transfer is one of the widest terms that can be used." (per James L J. In, Gathercole v. Smith (1881) 16 Ch. D. The agreement.expressly provides that as soon as due payment is made the Tung Hing Co. shall be at liberty to carry on the business; it purports even to transfer the

of

"Whenever any business Or I can say is that it ought to be. any portion of any business is and I cannot allow myself to be transterred with or without the led into splitting hairs, or to goodwill or any portion thereof. entering into minute verbal the transferce shall notwith-criticism on what I believe to be standing any agreement to the beneficial legislation. When there- contrary. become liable for allfore I And the case indisputably the abilities incurred in the within the terms of the Act and business by the transferor unless when taken in their ordinary. due notice in accordance with sense, why am I to give a different this section shall have been and narrower meaning to those given and shall have become terms in order.to exclude it?" complete at the date of the The intention of the legislature transfer."

is clear from the words and pro- It has not been suggested that visions of the Ordinance itself. dealings in waste paper are a which manifestly is designed to normal part of the business of a protect creditors from the fraudu- restaurant-keeper, and it is com-lent transfer of debtor businesses mon ground that no entry relating It gives a creditor one month in to any contracts between the which to have recourse for his transferor appears in any of the debt against the debtor's business. books of the restaurant. Do these There is nothing in the language facts in any way qualify or lim't used to Umit that remedy to the liability of the transferee, creditors for ordinary trade goods who it is agreed did not give the The mischief aimed at is the prescribed notice of the transfer? debtor's divesting himself of his business to the detriment of I do not think that they do.

It is one of the best "known the whole body of his creditors. canons of construction that that A transferee's remedy is a simple sense of the words is to be adoptene, the giving of the prescribed ed which best harmonises with notice coupled with a statement the context and promotes in the that he does not intend to assume fullest manner the policy and all the abilities incurred in. the

The business by the transferor. object of the legislature.

In the present case transferor paramount -object in construing penal as well as other statutes, is and transferee chose to Ignore the to ascertain the legislative intent. provisions of the Ordinance. Had and the rule of strict construction there been no transfer the plain- is not violated by permitting the tiffs would have been entitled to words to have their full meaning. look to the transferor's business as or the

of two a means of recovering their jud: meanings, in order to carry out ment. A transfer in despite of th effectually the legislative Intent. Ordinance does not, in my opinion. or, to use Lord Coke's words in deprive them of that right of re- Heydon's case 13 Rep. 7b) "to course.

more extensive

suppress the mischief and advance There will be judgment for the the remedy." The first thing to plaintiffs against both defendants be done, however, is tó ́give the with costs. words used the plain and ordinary

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WEDNESDAY,

APRIL 6, 1938.—PAGE 11

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