SHINODA MAKOTO v. CHOI LOK YIN KINGSTON

HCA 2112/2017

[2019] HKCFI 2870

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2112 OF 2017

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DECISION

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Introduction

1.  By a summons filed on 14 August 2019 (“the Summons”), the Plaintiff (“P”) applied for summary judgment for the “dishonoured cheques” part of his claim.  The Defendant (“D”) opposed the Summons. 

2.  I heard the Summons substantively today.  My decision is to (1) grant unconditional leave to defend to D; and (2) order costs to be in the cause of this action, with Certificate for Counsel for the Summons (“the Decision”). 

3.  My reasons for the Decision are as follows. 

Background Facts

4.  P’s case is that he was a Japanese businessman who had lent HKD 77,500,000 (“the Loan”) to D.  The Loan was evidenced by a note which set out how it was to be repaid to P (“the Promissory Note”). D defaulted in his repayment obligations.  Two cheques dated 15 December 2016 and 30 April 2017 respectively (“the Dishonoured Cheques”) for a total sum of HKD 31,750,000 (“the Sum”) were drawn by D in favour of P but dishonoured on presentation.  By open letters dated 30 March 2017 and 21 April 2017 issued by D’s own solicitors to P, D acknowledged his legal liability to repay the Loan in the most unequivocal way possible.  

5.  P’s case is that up to the date hereof, an outstanding balance in the sum of HKD 70,500,000 remains due and owing, and, at least in so far as the Sum (for the Dishonoured Cheques) is concerned, D has no real defence. 

6.  D’s pleaded case is that he had never received the Loan or any money from P, and the Promissory Note was acquired via “illegal, coercive and/or oppressive means” and is unenforceable by reason of duress.  The open letters from D’s solicitors were only written out of concern about D’s personal safety, and were supposed to be marked without prejudice, but D’s solicitors “omitted to state the same on the letters”. 

7.  In D’s Affirmation, filed on 3 September 2019, D also said he signed the Promissory Note (plus 3 cheques) and instructed his solicitors to issue two letters promising payments to P because of “harassment and threats” exerted on him, and out of concerns about the safety of, inter alios, himself and his family, the details of which he particularized. 

8.  According to D’s Affirmation, D would never have done what he had done “but for” the unlawful detention, criminal intimidation and/or unceasing threats which had driven him into “sleepless nights”. 

P’s Submissions

9.  Ms Candy Tang, Counsel for P, submits, inter alia, that on the authority of Xu Ziming v Ruifeng Petroleum Chemical Holdings Limited (unrep, HCA 450/2013, 6 May 2015, DHCJ Marlene Ng, paragraph 15), where an application is made for summary judgment in respect of a claim on a dishonoured bill of exchange, the general rule is that leave to defend should not be given unless there are exceptional circumstances, and a bill of exchange should be treated as cash and should be honoured unless there are some good reasons to the contrary.  On this basis, Ms Tang submits, I should enter summary judgment against D for the Sum. 

D’s Submissions

10.  Ms Cindy Kong, Counsel for D, submits, inter alia, that (1) as has been spelt out in Section 30(2) of the Bills of Exchange Ordinance (Cap 19), duress is in law a good defence to a claim based on dishonoured cheques; (2) D’s allegation of duress is plainly capable of being believed, so it should not be summarily rejected; and (3) P is only seeking summary judgment for the Sum, so the remaining parts of his claim will in any case go to trial, and in such circumstances it would plainly be better for all parts of P’s claim to be tried together.  For all these reasons, Ms Kong submits, I should dismiss the Summons, or grant unconditional leave to defend. 

My View

11.  In gist, I agree with D’s submissions.  Whilst D’s allegation of duress should certainly have been pleaded in a clearer way, at the end of the day I am unable to say it is completely incapable of being believed, and as such I should not reject the allegation summarily.  D’s Affirmation does contain elaborate particulars and sufficient cross-references to the relevant contemporaneous documents. 

12.  In accepting D’s allegation of duress as one capable of being believed, I have not lost sight of the fact, emphasized by Ms Tang, Counsel for P, that D never reported the alleged triad harassment to the police.  In this regard, I agree with Ms Kong, Counsel for D, that it is “not unusual” for victims of criminal intimidation to refrain from reporting such matters to the police, for fear of triad retribution, or other personal reasons.  The true reason why the police was not involved is a matter for trial.  

Costs

13.  In my view, as the Summons is solely about the Dishonoured Cheques, and the factual particulars for D’s allegation of duress now to be found in D’s Affirmation had not been properly pleaded, it was in fact “not unreasonable” for P to have attempted summary judgment application for the Sum, even though this Court end up refusing to accede to his summary judgment request.  This being the case, ordering costs of the Summons to be in the cause of this action is the most appropriate. 

14.  On the question of Certificate for Counsel, in my judgment it was reasonable, necessary and proper for both sides to engage Counsel to argue the Summons, given the potential consequences.  Both Counsel had been helpful to this Court.  I certify the attendance of Counsel. 

Final Remarks

15.  I do thank both Counsel for their most able assistance.