SANVIEW TRADING CO LTD v. S.C. TSE TRADING CO LTD

Action No. 1389/1984

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. This is a claim by a limited company on two dishonoured cheques each dated the 30th January 1984 in amounts totalling $138,000.

2. It has emerged in the course of the evidence that the cheques were given in relation to a business transaction between the Defendant company and the Plaintiff company. They were drawn by the Defendant company on its bankers and post-dated in satisfaction of the Defendant's indebtedness to the plaintiff. When those cheques were presented for payment on due date they were returned marked payment stopped. The next day Mr. Lan, who is a director of the Plaintiff, spoke to a Mr. Tse, who is a director of the Defendant, and told him that the cheques had been dishonoured. As will emerge from the history of this matter that should have been no surprise to Mr. Tse, It certainly was sufficient notice of dishonour within the terms of the Ordinance. And that is supposing that notice of dishonour were necessary, it being the case that payment had been countermanded.

3. Now on the pleadings, this case did not appear to be entirely straight forward. Whereas it was admitted that these cheques had been given by the Defendant to the Plaintiff and that they were dishonoured and it was not contested that they were in payment for some business transaction between the parties, the case was raised on the Defence that at some date prior to presentation of the cheques an agreement had been reached between Mr. Lan for the Plaintiff and Mr. Tse for the Defendant as a result of which the Defendant handed over a quantity of jewellery with a certain marked list value together with $50,000 and that was done in satisfaction of any indebtedness and in consideration for the four unrepresented cheques being returned. The agreement, which is set out at some length in Defence, was that if appeared at end of day the jewellery together with the $50,000, did not realise the face value of the cheques that there would be in adjustment in favour of the Plaintiff, and if it made more than the value of the cheques it would involve some payment by the Plaintiff to the Defendant. That was the case in outline as pleaded.

4. As the case has proceeded uncontested the main issue of fact that appears from the pleadings has not been investigated but I felt it right to allow Mr. Yau to touch upon those matters so as to make the situation clear to me and to dispel any doubt that there may have been that on the Plaintiff's own case that the right to sue on the cheques had not been compromised. In the event I have been satisfied on the evidence of Mr. Lan that the Plaintiff is entitled to judgment but as I made it plain in my ruling earlier to-day I am proceeding under Order 35 which does not remove from the Defendant the right to seek to have judgment set aside, certainly in so far as it relates to the counterclaim.

5. Well the principal matters upon which the plaintiff's case is based were simple and straight forward enough. On the pleadings it is put in issue that the cheques were dishonoured but I am satisfied on the evidence that they were on presentment on due date. I am satisfied that payment was stopped. I am satisfied that the following day Mr. Lan notified Mr. Tse of the Defendant that they had been dishonoured. I hold that notice of dishonour to be sufficient. Mr. Lan has explained something of the background. It is conceded on the pleadings and re-affirmed by Mr. Lan that $50,000 was handed over as was a quantity of jewellery. Mr. Lan says that Mr. Tse wanted that to be in return for all four cheques but that he did make it plain to Mr. Tse that he would not agree to return all four cheques. Consequently, I am satisfied on that uncontradicted evidence that there was not an agreement that all four cheques would be returned. If the evidence had been that there was such an agreement notwithstanding that this is an uncontested action the plaintiff may well have been in difficulty.

6. In those circumstances there will be judgment for the plaintiff on the claim in the sum of $138,000 and the counterclaim stands dismissed. There will be costs on the claim and the counterclaim to the Plaintiff.

7. I am asked to deal with the Plaintiff's claim for interest on the two cheques. The Plaintiff must be entitled to that at a commercial rate. From the date of dishonour until judgment there will be interest on $138,000 at 2% above prime rate as prevailing throughout that period.