XCHRX BOND WING SANG JOSEPH v. WAI CHI CHIU AND ANOTHER

HCA 185/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 185 OF 1999

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J U D G M E N T

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1. This is an appeal by the Plaintiff against the Order of the Master granting unconditional leave to defend to the Defendants. The Defendant in this case is a firm by the name of Chun Sing Trading Company. The partners of that firm are Wai Chi Chiu and Wong Pak On. The matter which arose was that Mr. Bond Wing Sang, the Plaintiff, had invested in the firm in the sum of, I believe, HK$200,000.00.

2. The firm had suffered some set back. What gave rise to the claim was a cheque of the firm purportedly signed by Mr. Wai on behalf of the firm in the sum of HK$200,000.00 alleged to have been payable to the Plaintiff.

3. The Defendant raised basically three defences as far I can see. The first defence is that the cheque which could only be payable according to the mandate of the firm to the bank, if it bears the signature of both partners. It contained only one signature, namely the signature of the Mr. Wai and the reason why it contained only with the signature of Mr. Wai was, Mr. Wai was going away to Taiwan that he left the cheque in the company's safe, so that when the amount of HK$200,000.00 required to pay for wages and to buy gold, the other partner Mr. Wong could then put in his signature on the cheque. The Defendant's firm says that the cheque was not given to the Plaintiff and that it was the Plaintiff who appropriated it to himself and had taken advantage of it.

4. The Plaintiff says that the defence is not capable of belief. Counsel for the Plaintiff suggested that in the light of surrounding circumstances, and in particular, that the amount of HK$200,000.00 which is very close to the amount of the settlement figure, which can be seen in a document, the allegation is not capable of belief, I disagree. In my view, that allegation is not wholly incapable of belief. It is a matter to be investigated at a trial as to whether such is the case or not.

5. This by itself should dispose of the case. But the Defendants raised the second defence which is implicit in their affirmation and it is that there are dealings between the parties, that is between the firm and the Plaintiff and that, in fact, the Plaintiff had taken such steps whereby the Plaintiff owed money to the firm and that therefore, again the matter ought to go to trial. I agree.

6. There is a third topic which was discussed at the hearing and it is having regard to the fact that the mandate of the firm in relation to the signing of the cheque being restricted to two partners both signing the cheque, whether in these circumstances with only one partner having signed the cheque, the cheque can be said to be payable to the Plaintiff and that therefore the Plaintiff cannot rely on the cheque and hold the firm, not just one partner but the firm, liable for the cheque. Certainly Mr. Wai had no authority from the firm to sign a cheque alone on behalf of the firm. There is a reference to an authority cited by counsel to the court. But it seems to me that the point is not that crystal clear. There is therefore another reason for my decision that the cheque was not given to the Plaintiff.

7. In my judgment, therefore the order of unconditional leave to defend is correct and the appeal therefore must be dismissed.