XCHRX NG SIU KEI v. CHONG MEE MEE

HCA5292/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATION REGION

COURT OF FIRST INSTANCE

ACTION NO. A5292 OF 1998

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REASONS FOR DECISION

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1. This is an appeal against the decision of Master Jones granting summary judgment in favour of the plaintiff for $200,000, being the amount of a dishonoured cheque issued by the defendant.

2. It is the plaintiff's case that the said cheque was issued by the defendant as payment of deposit for the purchase of a flat under a provisional sale and purchase agreement.

3. In the defence, the defendant suggests that the cheque was handed over on condition that the price of the flat was to be $7.4 million and that other partners involved in the purchase would agree to the proposed sale and purchase agreement. But it subsequently turned out that the price was to be $7.6 million, instead of $7.4, which increased price was not agreed to by the other partners.

4. In this application, Mr Pirie, on behalf of the defendant, also raised a further point that the parties had not, in fact, agreed as to whether the price, be it 7.4 or 7.6 million, should include certain air-conditioners and lamp.

5. Insofar as the reference to the filing of the reply which Mr Pirie claimed would defeat any attempt to bring an Order 14 application, I do not agree with his view. I do not consider the filing of a reply in the circumstances of this case has any bearing on the merit of the application at all. The main issue in this particular dispute in my view is whether the contention of the defendant pertaining to the price of the property is believable.

6. It has been well established that the mere assertion in an affidavit of a given situation which is to be the base of a defence does not ipso facto provide leave to defend, and the court must look at the whole situation and ask itself whether the defendant had satisfied the court that there is a fair and reasonable probability of the defendant having a real or bona fide defence.

7. Insofar as the defendant's contention pertaining to the price of the flat, that he signed the document when the price of 7.6 million was not filled in at all, I find the defendant's assertion on this aspect difficult to accept. I do not accept the suggestion that the provisional sale and purchase agreement would be signed and a cheque handed over when the price of the property was not put down when, according to the defendant, he would only agree to purchase the flat if it was for a price of 7.4 million. It is also inconceivable that the document would be signed if the price stated in it did not accord with the price agreed to by the defendant. I also find it difficult to accept that the defendant would sign it without realising that the price stated therein was, in fact, 7.6 million. Indeed, before the copied provisional sale and purchase agreement was signed by the defendant's son, all relevant terms, including the price of 7.6 million, had been inserted. The defendant might have subsequent disagreement with her son on the purchase of the flat. The defendant might have regretted the decision to purchase a flat at 7.6 million. But her assertion that she signed the provisional sale and purchase agreement and then issued a cheque for $200,000, without realising that the price of the flat stated in the provisional sale and purchase agreement was $7.6 million and without having agreed the price to be $7.6 million, in my view is simply unbelievable. Indeed, a copy of the provisional sale and purchase agreement kept by the defendant which was subsequently produced at the request of the plaintiff clearly demonstrated that the price of 7.6 million had been included in the document.

8. I find the allegation of the defendant incredible, or almost incredible, by reason of its inherent impossibility and its inconsistency with the document pertaining to the transaction in question. On this aspect, if one were to apply the principle established in the case of Murjani v Bank of India (1989) 2HKLR 358, I am of the view that the defendant could not possibly succeed and no leave ought to be granted on this point.

9. But there is just one aspect of the case which causes me some concern, and that is, even on the plaintiff's case when the provisional sale and purchase agreement was signed by the defendant signifying a wish on her part to purchase the flat for $7.6 million there was no reference to the four air-conditioners and the lamp. I appreciate that it is the plaintiff's case that the defendant was subsequently alerted to this by the agent, and the plaintiff's contention is that the defendant, in fact, agreed to this inclusion in the sale and purchase agreement.

10. I am also mindful, of course, of the fact that when the defendant's son put his signature on this document which he subsequently crossed out, there was already reference to the retaining of the air-conditioners and the lamp by the plaintiff in the additional Clause 13 in the provisional sale and purchase agreement. But there is no indication that the defendant herself had signified her agreement to the inclusion of this additional Clause 13 to the provisional sale and purchase agreement. When she handed over the cheque of $200,000, of course, there was no reference to this aspect. I appreciate that in the original defence and counterclaim the defendant had, in fact, not raised this point. The matter was only raised in the subsequent affirmation in connection with this Order 14 application. If there had been, in fact, no concluded agreement as to the actual nature of the purchase in question, then one has some reservation as to whether the condition for the delivery of the cheque had, in fact, been fulfilled.

11. This is not a matter that I originally consider to be of too much a significance, but having reflected upon the matter, I think this aspect ought perhaps to go to trial and see if there was, in fact, a concluded agreement between the plaintiff and the defendant in terms of the provisional agreement which was subsequently torn up by the defendant's son which agreement had provided for this additional clause pertaining to the air-conditioners and the lamp, a matter that the defendant on her assertion had not agreed to.

12. But I have also reflected upon the entirety of this case. Although I think it would not be fair to give a judgment in favour of the plaintiff in the light of the matter I have just mentioned, I am satisfied that this is a proper case for the granting only of a conditional leave to defend, but not an unconditional leave to defend. I do not wish to be seen to have prejudged on the matter, but I do not consider, in the light of the fact that this is a purchase of flat, the reference to the air-conditioners and the lamp would not ultimately be considered to be such an important matter after all.

13. In the circumstances, I will allow the appeal. I order that leave to defend is to be granted, conditional upon the defendant making payment into court within seven days of the amount claimed, namely $200,000.