WONG NAM KIN t/a UNION LASER INTERIORS CO v. TSUI MING YAT t/a KENNY JEWELLERY

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JUDGMENT

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1. The Plaintiff carried on business as a decorator contractor. The Defendant Tsui Ming Yat ("Tsui") carried on business as a jewellery shop by the name of Kenny Jewellery. Tsui's brother, James Tsui ("James") asked the Plaintiff to carry out decoration work for Kenny Jewellery. The agreed price for the decoration work was $558,900 as evidenced by a Quotation of the Plaintiff in January 1996. There were additional work ordered for Kenny Jewellery as evidenced by an Invoice of the Plaintiff dated 6th March 1996. The value of the additional work for Kenny Jewellery was $69,000. Therefore the total amount which was to be paid to the Plaintiff for the decoration work done for and at Kenny Jewellery was some $627,900. Staged payment for such decoration works for Kenny Jewellery were made by 4 Kenny Jewellery Cheques ($167,670, $120,000, $114,225 and $57,112.50) drawn on the Tsui bank account in the name of Kenny Jewellery with Hong Kong Bank. The last two of the staged payment cheques being in the amount of $57,112.50 and $111,780, drawn on the same bank account of Kenny Jewellery with Hong Kong Bank were dishonoured upon presentation. The Plaintiff sues on these two dishonoured cheques and obtained summary judgment before the Master. The Defendant Tsui trading as Kenny Jewellery now appeals to this Court.

2. The defence sought to be raised by the Defendant to this Order 14 application is wholly without merit and the facts alleged by the Defendant to establish his defence are not credible or capable of belief. In essence, the defence is that the Defendant Kenny Jewellery was a stranger volunteer who drew the two dishonoured cheques and no valid consideration was given for the two dishonoured cheques ("2 Cheques"). The 2 Cheques were signed by James who was an authorised signatory of Kenny Jewellery's Bank Account at Hong Kong Bank. According to the Plaintiff's 2nd Affidavit evidence which was not contradicted by the Defendant, James Tsui represented to the Plaintiff that Kenny Jewellery, Kenny Trading Co. Ltd. and Kenny International Co. Ltd. were all of the same group of which he was the person in charge and it was for this reason although the work was agreed to be done by the Plaintiff for Kenny Jewellery, the quotation and invoice was for the convenience of the Kenny Group made in the name of a Kenny company and not in the name of Kenny Jewellery.

3. The Defendant's contention is that Kenny Jewellery was not liable for the decoration work and was therefore not liable for the 2 Cheques. The argument of the Defendant is that the liability for the Kenny Jewellery decoration was that of one or other of the two Kenny companies (Kenny Trading Co. Ltd. and Kenny International Co. Ltd.) and not that of Kenny Jewellery and that therefore the drawing of all six cheques to the Plaintiff were done purely for the private convenience of these Kenny companies and had nothing to do with Kenny Jewellery of which James Tsui was neither an officer or employee, although he was an authorised signatory of the Kenny Jewellery Hong Kong Bank account.

4. The main facts of this case are clear, namely that the Plaintiff did decoration work of some $600,000 odd for Kenny Jewellery and the Plaintiff was paid some $400,000 odd by 4 Kenny Jewellery cheques. The last 2 Kenny Jewellery Cheques in the total sum of about $168,000 odd were dishonoured and therefore the Plaintiff sues Kenny Jewellery for this sum on the 2 Kenny Jewellery Cheques. Kenny Jewellery had received the benefit of the decoration work done by the Plaintiff and had seen fit to pay 4 Kenny Jewellery cheques but Kenny Jewellery now wants to say it is not liable for the last two Kenny Jewellery cheques given in payment for the decoration work. My immediate reaction to this defence, as no doubt the common-sense reaction of the Master, is to dismiss this defence as being not only wholly without merit, but practically bordering on being offensive to the Court: an insult to the intelligence and basic commercial sense of the Court.

5. This is an action on the cheques and value is presumed under the Bills of Exchange Ordinance as having been given for the cheques. It is therefore for the Defendant as Kenny Jewellery to prove by credible evidence that Kenny Jewellery was a volunteer stranger who gave the 2 Cheques (the fact that James Tsui signed the 2 Cheques does not detract in any way from the fact that these were Kenny Jewellery cheques signed with authority of Kenny Jewellery) for nothing. Everything therefore depends on the story told by the Defendant in the Affirmations filed in resistance to Order 14. For me, the facts alleged by the Defendant are incredible and not capable of belief. Central to the story told by the Defendant are the following:-

The story told by Tusi and his brother James Tsui in their Affirmations are not believable. Therefore there is no credible evidence put before the Court to give rise to a defence of no consideration for the 2 Cheques.

6. If necessary however I would also hold that in any event I am satisfied that there was consideration for the 2 Cheques. Mr. Chong sought to mount a complicated legal argument of no consideration and referred me to Hasan v Willson but in my view the matter can be decided quite simply having regard to the clear facts of this case. There is no dispute and it is indeed the case of the Defendant that the 2 Cheques both dated 30th April 1996 were given in mid March 1996 by James Tsui. The postponement of payment was therefore on any basis a detriment to the Plaintiff and it is also reasonably clear from the evidence that the Plaintiff accepted the post-dating of these 2 Cheques and by implication agreed to forebear to sue the Kenny company, if such company was the debtor (which I said earlier was not the case). In my judgment, good consideration had been given for these two Cheques. The Hong Kong Court of Appeal in Kao, Lee & Yip v Euro Treasure Ltd. [1985] 1 HKC 46 (a relevant authority unfortunately not cited to the Court by Mr. Chong) held in a summary judgment application on a cheque that there was consideration if the plaintiff suffered detriment, at the promisor's request, even though this confers no corresponding benefit on the promisor. This authority is binding on me or provides great guidance and I accept that the principle is applicable here. The Plaintiff suffered a detriment by the 2 post-dated Cheques from Kenny Jewellery. The detriment must be taken to have been requested by Kenny Jewellery upon the 2 Kenny Jewellery Cheques being given to the Plaintiff by Kenny Jewellery's authorised signatory of the 2 Cheques. In fact of course, unlike the Kao, Lee case, the promisor Kenny Jewellery had the benefit of the decoration work and also of the later payment. There was therefore also a sufficient connection or relation between the receipt of the 2 Cheques and the antecedent liability so that the case also comes within what Lord Evershed had in mind in Oliver v Davis [1949] 2 K.B. 727 at page 736. In the circumstances, on these facts the law does not and cannot help the Defendant to escape from its well deserved liability and judgment.

7. In my view, the Master had rightly entered judgment for the Plaintiff and this appeal of the Defendant must be dismissed with costs.