SYRILAND LTD v. BEAUTY MARK CO LTD

___________

JUDGMENT

___________

1. This is an appeal by the defendant from a decision of Master Pe made on the 17th October 1984 when he gave judgment for the plaintiff under Order 14 for the sum of $176,993.50 in respect of two dishonoured cheques drawn by the defendant in favour of the plaintiff and costs. The Master also granted a stay of execution for 14 days pending appeal which was the subject of a cross appeal by the plaintiff.

2. The cheques relate to payment for goods delivered by the plaintiff to the defendant under a contract dated the 7th May 1984 by which payment was agreed to be made by post dated cheques 30 days after receipt of each delivery. In fact the cheques were dated 60 days after delivery was made respectively on the 12th and 15th June 1984.

3. Mr. Fung who appeared for the defendant argued that conditional leave should be granted to the defendant upon payment of the full amount into court on the basis that there had been a misrepresentation by the plaintiff. Reliance is placed upon the evidence of Amy Leung the managing director of the defendant who in her affirmation of the 4th October 1984, said:-

"16.             I was not prepared to accept any of the goods under late delivery but Mr. Tang asked me to accept the delivery of balance fabric and we could negotiate for claim in the event that my buyer Stetex (H.K.) Ltd. cancel the orders or make claims under the order.

18.        The Plaintiff well knew that they were in breach of the 1st and 2nd fabric contracts by these late deliveries, and did not ask for payment of these fabric until at a very late stage. I issued these cheques in suit on 3 different occasions only, namely, on or about :-

(a) 27th June 1984 for cheque Nos. 234353, 234351

(b) 3rd July 1984 for cheque No. 234352

(c) 13th July 1984 for cheque Nos. 234442, 234439

19.       I did not agree to give the Plaintiff any cheque for the fabric for the reason that there might be a claim from the buyer. However, on these 3 occasions, Mr. Tang in order to induce me to give him the cheques Agreed and represented to me that :-

(a) The Plaintiff agreed to compensate the Defendant from all claims arising from the 1st fabric contract, in particular, by reason of its late delivery, and such amount can be deducted from the balance price.

(b) The Plaintiff agreed to deliver a11 fabric under the 2nd fabric contract as soon as possible within the month of July and waived the 20% deposit under the 2nd fabrie contract.

20.          Relying on such representation and agreement, I gave Mr. Tang the cheques as listed under paragraph 18 hereinbefore.".

4. Mr. Fung cited Clovertogs Ltd. v. Jean Scenes Ltd. (1982) C.L.R. 88 where the English Court of Aopeal held that a misrepresantation, although not fraudulent, might amount to a defence so that upon an application for summary  judgment the defendants might have leave to defend. The defendant in that case delivered cheque to the plaintiff on an express representation made by the plaintiff that a contractual inspection certificate had been given.

5. The plaintiff has not replied to the allegations of misrepresentation that have been made by the defendant. However, almost the entire quantity of the fabric ordered was delivered by the 29th June 1984. Subsequent deliveries relate to a Second contract which has no relevancy to the cheques the subject matter of this action. The evidence put forward by the defendant does not in my opinion amount to a misrepresentation that would disentitle the plaintiff to immediate judgment. The goods were delivered on the 12th and 15th June and were accepted by the defendant. The cheques were piven on the 27th June 1984. The appeal is therefore dismissed with costs.