XCHRX CONCORD TRADING DEVELOPMENT CO. v. SHANDO INTERNATIONAL LTD.

HCA5373/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.5373 OF 1998

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D E C I S I O N

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1. This is an appeal from Master Chung who set aside a regularly obtained judgment for HK$4.3m and HK$312,000 for interest.

2. The background is that goods were sold and supplied to the defendant. The defendant had defaulted in paying for the goods and an agreement was entered into by the parties on 5 June 1997, seeking a compromise to the action, that the defendant should pay HK$4.4m as instalments to the plaintiff. Cheques which were payable to the plaintiff under the agreement were dishonoured. The Master took the view that the agreement prevented the plaintiff from suing on the dishonoured cheques. I do not agree.

3. The judgment was regular. Even if it is irregular, the English Court of Appeal decided in the Faircharm case that judgment should not be set aside if the defendant does not have any defence (see the Supreme Court Practice, 1999 at 13/9/8).

4. The only potential defence is on the sum of HK$720,000, which the defendant said they had paid. I therefore allow the appeal and order that judgment be entered for the sum of HK$3.58m, and leave to defend the sum of HK$720,000 on the condition that the money be paid into Court within the next seven days. If not, judgment will be entered on the entire sum. The plaintiff is entitled to interest of 1% above the prime rate from 4 April 1998 to today's date. Thereafter, the plaintiff is entitled to interest at judgment rate. The same rate to be applied to the sum of HK$720,000 if it is not paid into Court within the next seven days.