XCHRX IMATION HONG KONG LTD. v. MAK KAM BIU t/a SUCCESS MAGNETIC (HONG KONG) CO.

HCA10135/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.10135 OF 2000

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J U D G M E N T

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1. This is an appeal by the defendant against the Order of the Master granting summary judgment against the defendant in respect of six cheques given by the defendant in relation to supply of goods by the plaintiff to the defendant.

2. The central defence of the defendant for refusing payment of the cheques is that there was an oral agreement made subsequent to the supply of the goods whereby the plaintiff was alleged to have agreed to an arrangement that the plaintiff was to pay to the defendant a rebate before the defendant had an obligation to honour the cheques - post-dated cheques having been given by the defendant to the plaintiff for the supply of the goods. The giving of the post-dated cheques for the supply of the goods was pursuant to a long practice between the plaintiff and the defendant, and in every case in the past, the payment of rebate occurred after the cheques had been paid.

3. The central question for this court is whether the alleged oral agreement is credible. I have come clearly to the view that it makes no commercial sense. For me it makes no sense at all and I take the view that no reasonable businessman would have come to any such arrangement and it is extraordinary. I do not believe a word of that allegation. It seems to me, therefore, that there is no factual basis for the defendant's assertion. We must not overlook that this is a claim based on cheques and normally there is simply no defence to a claim for cheque based on some assertions of special arrangement, and this is even more so when the assertion here is against all common sense and not supported by any contemporaneous documentation.

4. The defence of the defendant, therefore, fails. The appeal of the defendant must be dismissed with costs.