LIAN INDUSTRIAL CO LTD v. SAMAD MOHAMMAD SIDDIQUE t/a GAZI TRADE INTERNATIONAL

CACV83/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 83 OF 2003

(ON APPEAL FROM DCCJ NO. 4871 OF 2002)

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J U D G M E N T

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Hon Rogers VP:

1. This is an appeal from a judgment of Deputy Judge Muttrie, given on 7 March this year. The matter before the Deputy Judge was an appeal under Order 14 from the Master. The Master had given judgment for the plaintiff in the sum of $134,202.70 in respect of a cheque which was dishonoured.

2. Very briefly, the matter in this case arises in this way. There were two contracts between the parties for the sale of rhinestones. Before those contracts were performed, the plaintiff persuaded the defendant to enter a third contract, again for rhinestones. It is the cheque in respect of that third contract for $134,202.70 which is in issue in this case. However, according to the defendant, when the goods under the first two contracts were delivered, they were found to be glass and not rhinestones. That is something which would be alarming to say the least. The defendant says that he contacted the plaintiff and the plaintiff's representative came and inspected it and agreed that it was glass and not rhinestones, and he said that the matter would be sorted out. But it does not take much to imagine the consternation between the parties given that scenario.

3. The defendant says that the plaintiff's representative agreed to return the cheque which is the subject of this action. It is implicit in that, in my view, that it was agreed between the parties that the third contract would be rescinded as such. In those circumstances, the judge was entirely right, in my view, to set aside the judgment which had been entered on the basis of the cheque. It can be looked upon as the consideration for the cheque having wholly failed or, looked at from another aspect, there was an agreement to return the cheque because there was no contract left in existence thereafter.

4. In my view, this appeal must be dismissed.

Hon Le Pichon JA:

5. I agree.