XCHRX BOUGH & CO. v. GOLDSFAME INDUSTRIAL LTD.

HCA15570/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.15570 OF 1999

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J U D G M E N T

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The appeal

1. The plaintiff obtained summary judgment against the defendant for $75,000. The defendant now appeals.

Preliminary matters

2. It is recorded by the Master who heard the Order 14 summons that Ms Myint, the plaintiff's solicitor had, at the beginning of the hearing, informed the Master that she and the defendant had agreed on terms regarding the hearing. What transpired is that the defendant had served an affidavit one day before the hearing, and Ms Myint and the defendant agreed on the following directions :

(1) the plaintiff had leave to file affidavit in reply to the defendant's affirmation within 14 days;

(2) no further affidavit be adduced without leave of the court;

(3) the Order 14 summons was to be adjourned for argument; and

(4) costs in the cause.

The Master, however, refused to adjourn the hearing on the ground that no defence was shown and he ordered judgment against the defendant.

3. Whether the hearing was to be adjourned or not was a matter entirely within the discretion of the Master. In this case, the agreement of the parties was only on the procedural directions and not on a settlement relating to the claim itself. Hence the refusal by the Master to adjourn the summons cannot be a ground of appeal.

4. The defendant said that he had offered to pay the sum into court. This is not by way of any agreement reached between the parties. I will deal with this matter when I consider the merits of the defence.

5. I raise the matters regarding the adjournment and the defendant's offer to pay money into court because these two matters were referred to by the defendant in Mr Chow's affirmation, although they were not repeated by Mr Chow in today's hearing.

The background

6. The defendant is a limited company. It drew two cheques in favour of the plaintiff : one for $20,000 which was honoured, the other for $75,000 which was dishonoured and is the subject matter of the claim.

7. The plaintiff is a firm of solicitors and had provided services to Madam Koon Tung Ying in a High Court action. The matter went on appeal. The plaintiff had incurred expenses and requested Madam Koon to provide costs on account in order for the plaintiff to continue to act for her. The cheque of $75,000 was issued by the defendant in August 1998, postdated to 25 October 1998.

8. One of the directors of the defendant is Mr Chow Tak Sing, the son of Madam Koon. He represents the defendant in the hearing. Mr Chow, in his affirmation, stated that the defendant was advised by Madam Koon to issue a cheque. Later, the defendant was instructed by Madam Koon to stop the cheque due to "the amount that had been pre-paid and the poor performance of the plaintiff". The defendant claimed that it had not received any benefit in issuing the cheque.

Consideration

9. Mr Chow obviously knew the background of his mother's litigation. It had never been denied in the affirmations that the plaintiff had demanded payment of money on account of costs in order for the plaintiff to continue to act for Madam Koon. The consideration for the cheque must be for the plaintiff continuing to act for Madam Koon in the litigation. There is valuable consideration for a cheque. A cheque is treated as cash and must be paid unless there is a good reason to the contrary.

New allegation

10. Mr Chow now submits that the plaintiff had asked for payment of $95,000 to cover counsel fee for the appeal. He agreed to pay. But because the appeal only lasted for one day, counsel only charged $70,000. He asked the plaintiff to reduce the fee but was refused.

11. This allegation is put forward in court for the first time, despite the fact that Mr Chow had filed two affirmations in this case. I do not find what Mr Chow said to be credible. As shown in the pleadings, the plaintiff is claiming substantial fees from Madam Koon, and the plaintiff had on affidavit confirmed that the money was for payment on account of costs and disbursements. The Reply further stated that the $20,000 was not in partial payment of counsel's fees in the appeal. If Mr Chow wished to dispute this, he should have dealt with them in his earlier affirmations.

Damages and stay of execution

12. The plaintiff had sued Madam Koon and her husband in HCA 8588/1999 for unpaid fees. They in turn counterclaimed for damages by reason of alleged mishandling of their cases by the plaintiff.

13. The defendant is not a party to that action. The allegation by Madam Koon in that action cannot be a defence for the defendant in this action. In any event, it is clearly stated that in relation to a cheque, a claim for damages in another contract is not available as a set-off or counterclaim to the cheque. The plaintiff is further entitled to judgment on the cheque without a stay of execution of the judgment pending the determination of the counterclaim : paragraph 14/4/15 of the Supreme Court Practice 1999. The offer of payment into court is not a ground for not granting judgment to the plaintiff.

Credit to be given

14. As to either the defendant's concern or Madam Koon's concern about the effect of this judgment on the other action, the position is that the plaintiff must give credit to the $75,000 in the other action against Madam Koon if the present judgment is satisfied. The same applies to the $20,000 cheque which had been honoured if the claim by the plaintiff in the other action is on legal services related to the $20,000.

Conclusion

15. Accordingly the appeal is dismissed with costs to the plaintiff.