POLAR STAR INTERNATIONAL CO LTD v. ROCKWAY TECHNOLOGY LTD

HCA 554/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 554 OF 2009

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DETERMINATION

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Introduction

1.  Polar Star rendered a number of invoices to Rockway for goods sold and delivered in the total sum of HK$1,945,476.60 (“the Original Amount”).  When the Original Amount was not paid, Polar Star had earlier instituted a claim against Rockway for the Original Amount.

2.  The parties compromised the claim by entering into a Settlement Agreement (“the Settlement Agreement”) on 25 November 2008, by which agreement Rockway was allowed to pay the Original Amount by 9 instalments.

3.  Polar Star in this action claims against  Rockway for its alleged breach of  Settlement Agreement by having failed to comply with its agreed payment schedule. It therefore claims for the remaining balance of $1.4 million, and it now seeks summary judgment for the said sum.

Issue

4.  The only issue in dispute is whether the Original Amount has by mistake included a sum of $340,731.10 (“the Disputed Sum”) under invoice no. INV809601 that Rockway has allegedly paid.

5.  Rockway exhibited (“CYHM-3”) a receipt dated 24 September 2008 purportedly issued by Polar Star for the Disputed Sum.

6.  Polar Star denied having issued the said receipt, and alleged fraud.

Discussion

7.  The solicitors for Rockway contended in their written submissions that by virtue of the Disputed Sum, there were triable issues, and Rockway should be given unconditional leave to defence.

8.  I am unable to understand on what basis Rockway can argue that there is a triable issue for the whole claim when, apart from the Disputed Sum, there is no dispute to the outstanding balance of the Original Sum.  There is no dispute that Rockway had been in breach of the repayment schedule under the Settlement Agreement.

9.  As the Disputed Sum would involve a detailed investigation into the authenticity of the purported receipt for the Disputed Sum, I agree that Rockway should be given unconditional leave to defend.  However, as to the remaining amount, I am satisfied that Rockway is unable to demonstrate that it has a good defence to the claim.

10.  Before I leave the matter, I note in the written submissions on behalf of Rockway, the solicitors alluded to a copy cheque – which Rockway allegedly found recently – for the purported payment of the Dispute Sum. The copy cheque had not been adduced as evidence as no leave had been obtained.

11.  In this application, I have granted leave to defend in relation to the Disputed Sum without regard to the cheque alluded to in the written submissions.  If the solicitors felt that such piece of evidence was highly relevant to the conduct of the case, an application should be made for leave to adduce such evidence. It is because under the new Order 58 rule 1(5) of the Rules of High Court, parties will not be allowed to adduce any fresh evidence “except on special ground” (emphasis added) in appeals against Masters’ decision. Practitioners should note.

Conclusion and Order

(a)  There shall be partial judgment for the sum of $1,059,268.90 with interest on the said sum from 25 February 2009 at judgment rate until full payment.

(b)  The Defendant shall have unconditional to defend the Disputed Sum.  The Defendant shall file and serve the Defence with 28 days of the Order Date.

(c)  Costs Order nisi that the Defendant pays the costs of the Order 14 Summons, together with any costs reserved. Based on the Plaintiff’s Statement of Costs, I assess costs in the total sum of $20,000, which is to be paid forthwith upon the costs order becoming absolute.