XCHRX LAM YUE FAI WALLACE v. WISE COMOS INVESTMENT LTD.

1995, No. A4125

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. This is an appeal against the Master's decision giving judgment under Order 14 in favour of the plaintiff for the sum of $120,243 on the basis of the plaintiff's claim on a dishonoured cheque drawn by the defendant in that sum.

2. The evidence adduced by the defendant to put up a defence is confusing. Mr Benny Tam, one of the defendant's directors, says that, on 12 April 1995, he learnt certain facts that led the defendant to terminate the plaintiff's employment with immediate effect. Mr Tam says that, on this basis, the plaintiff was not entitled to bonus, pay in lieu of leave or salary other than that for the days he had actually worked, being $24,000. By a letter dated 11 April 1995, the plaintiff resigned with effect from 12 May 1995. Mr Tam says this resignation was not accepted. Mr Tam goes on to say that, on 12 April 1995, Mr Kan Wai Kee, who is described as the account officer of the defendant, "mistakenly calculated the payment to the Plaintiff on his termination of office and drawn the said cheque in contemplation of the payment of the Plaintiff's salary and bonus" giving a total sum of $120,243. Mr Tam deposes that "the said cheque was mistakenly given by our colleagues to the Plaintiff to whom the said cheque should not have been given. Having learnt of the mistake, the Defendant notified [the bank] to stop payment of the said cheque on 13th April 1995.". He produces a copy of the countermand, which is not dated and bears no kind of chop or acknowledgement of the bank.

3. Mr Kan Wai Kee, the account officer, says in an affirmation, that "On 12th April 1995 at 3:00 p.m., I was instructed that the Plaintiff's employment by the Defendant has been terminated with immediate effect and I was requested to calculate the salary due to the Plaintiff. I was mistaken that the calculation of the payment was on the basis that the Plaintiff's resignation was accepted by the Defendant and the payment should count up to 12th May 1995 in the sum of HK$120,243.00, and draw a cheque in that sum and delivering the cheque to the Plaintiff. In fact, the basis for calculation of the Plaintiff's salary should be one of pro-rata. After delivering of the cheque to the Plaintiff, It (sic) was discovered by Mr Benny Tam, the General Manager of the Defendant that the calculation was wrong. The Defendant immediately give instructions to the drawee bank to stop payment of the cheque . . .".

4. A copy of the cheque is exhibited by the plaintiff. It is dated 12 April 1995. It bears two signatures. One of these signatures is identical to the signature of Mr Tam on his affirmation.

5. Mr Pow says that the cheque was given to the plaintiff by the defendant under a mistake of fact. When pressed to articulate the nature of this mistake, Mr Pow told me that it was that the defendant believed that the cheque was made out in the sum that would have been right upon the plaintiff's immediate dismissal; that is, for $24,000.

6. This has certainly not been made out on the evidence before me. The defendant's evidence is very shy about the circumstances leading up to the giving of the cheque to the plaintiff. Contrasted with the precision of Mr Kan's statement that "On 12th April 1995 at 3:00 p.m., I was instructed that the Plaintiff's employment by the Defendant has been terminated with immediate effect and I was requested to calculate the salary due to the Plaintiff.", there is a vagueness, deliberate or otherwise, about the sequence of the other events on 12 April 1995. When did Mr Tam learn of the facts considered to justify dismissal, and when was the plaintiff dismissed, in relation to the time of the instruction to Mr Kan to draw the cheque? I am not told. Who gave the instructions to Mr Kan to draw the cheque? Precisely what instructions were given to him? Why was he not told, if this were the case, in express terms, that the plaintiff had been dismissed with immediate effect for good cause, and he should be paid only up to date, with payment for nothing else. When was the "mistake" discovered? Who discovered it? Why was the cheque not stopped until the next day? Why did Mr Tam sign the cheque if it was not drawn in the correct amount? None of these questions is answered. Perhaps that is because the answers would indicate that it was thought that the plaintiff had been given a cheque signed by Mr Tam and another signatory for the correct amount, but, after this, the defendant discovered that it thought it had grounds for immediate dismissal. In any event, the defendant has not produced anything like an arguable case that the cheque was given to the defendant in the belief that it was drawn for the amount that would have been appropriate upon immediate dismissal for cause. It seems to be that, on the evidence, the probability is that the defendant gave the cheque to the plaintiff, knowing full well what it was doing, but afterwards thought that it might be that it was not obliged to pay him other than for the days actually worked. It then sought to unravel what it had done. This, in my view, is not possible in law. If the defendant believes that it has a claim against the plaintiff for breach of his duties, it must proceed separately; such a claim cannot be a defence to the plaintiff's claim on the cheque.

7. The defendant also alleges that there was a partial failure of consideration in respect of the cheque to the extent exceeding $24,000. This cannot be so. The consideration required is no more than that required to support a simple contract. At the very least, the plaintiff had an arguable claim to be paid the excess over $24,000. In exchange for the cheque, he gave up that claim; at least conditionally. That is sufficient consideration for the giving of the cheque.

8. There is another appeal before me by the plaintiff.

9. On 27 June 1995, the plaintiff served a set of interrogatories under Order 26, rule 1, and, on 25 July 1995, served an amended set. On 16 August 1995, the plaintiff issued a summons for specific discovery. On 18 August 1995, the defendant answered the amended interrogatories in which the main document sought in the specific discovery was disclosed. On 29 August 1995, the plaintiff issued a summons under Order 21 seeking to withdraw the summons for specific discovery. At the hearing, which also dealt with the Order 14 summons, the Master ordered that, on the summons of 16 August 1995, there be no order as to costs, and, on the summons of 29 August 1995, that the costs be to the defendant in any event. The plaintiff appeals against these orders. He appeals out of time, but this has been explained by his absence from Hong Kong, and I grant leave.

10. The purpose of the interrogatories was to obtain particulars of the defendant's allegation that the plaintiff had abused his position as an employee, and thus his dismissal was justified. The summons for specific discovery was in relation to certain documents concerning this allegation. The defendant did not discover the documents, but, in answer to the interrogatories, gave the plaintiff what he wanted, so discovery was no longer needed. The plaintiff's solicitors sought the consent of the defendant's solicitors to withdraw the summons, and that the costs be paid by the defendant. The defendant's solicitors refused to agree to the defendant's paying the costs.

11. It seems clear to me that the plaintiff was entitled to seek specific discovery of documents that were clearly relevant to the defendant's own allegation, and, when it appeared that such discovery was no longer necessary because, in effect, the defendant gave discovery by other means, to withdraw that summons. In these circumstances, it seems to me right that the plaintiff should have his costs.

12. In the result, the defendant's appeal is dismissed. It seems to me that the plaintiff is entitled to his costs, and I make an order nisi accordingly, with a certificate for counsel. The plaintiff's appeal succeeds. The plaintiff is to have his costs of the summonses of 16 and 29 August 1995, and of the hearing before the Master. It seems that the plaintiff is also entitled to his costs on appeal, and I make an order nisi accordingly, with a certificate for counsel.