SOUTH OCEAN TOWEL WEAVIING FACTORY (suing as a firm) v. HING FAT WEAVING FACTORY (sued as a firm)

Appearances: Ribeiro for the Plaintiff.
                      (Miss) Yuen for the Defendant.

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JUDGMENT

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1. This is an appeal from a decision of Master Betts of 21st May 1984, when, on an Order 14 Summons, he gave leave to defend and ordered that costs be in the cause. Before Master Betts there was but the Affirmation, of Mr. Sin Hon-poon of 3rd May, with certain Exhibits, and an Affirmation by Mr. Lam Yam-tak of 16th May, exhibiting a draft Defence and a letter of demand.

2. What is before me is wholly different from what was before the Master, because I have now a further Affirmation from Mr. Sin with seven Exhibits; I have all the original cheques so that I can see their reverse as well as their obverse; and I have the documents from the bank; I also have a further Affirmation from Mr. Lam Yam-tak of 21st June with further Exhibits. In those circumstances, of course, it matters not what the Master decided. Whereas in the ordinary appeal one looks to see what the Master did decide, and, although it is the Judge's decision, he is entitled to look at the Master's reasons and see if they should be upheld or set aside - the discretion being wholly that of the Jude.

3. This is action started off by being a plain straightforward action on cheques, and the law relating to that is quite clear. No fraud is alleged here, but a plea of lack of consideration is advanced: a plea of "a different nature of document" is advanced; and an oral agreement between the parties is advanced, which, if it were correct, would give the cheques a totally different character from that which they have at the moment on their face. I will deal with the last batch of cheques first.

4. Those are 820348 of the 3rd of December last, 836118 of the 12th of December last, 843759 of the 15th of January this year, 847628 of the 15th of February this year and 856060 of the 3rd of March of this year. In relation to those, Miss Yuen has very frankly told me that they were for the value of cotton yarn supplied by the Plaintiff to the Defendant. But, she says, there was a running account between the parties, and if you find, at the end of the day, (and to do so, you look at the two sets of accounts, Exhibit H, to Mr. Sin Hon-poon's Affirmation, and the Schedule attached to the draft Defence, Exhibit LYT-1), that the Defendant is owed more than it owes, those cheques would have been discharged by way of accord and satisfaction. That is an argument I can not accept. That is not accord and satisfaction; and I have found no evidence of accord and satisfaction in respect of any one of these cheques, although I have carefully gone through the running account and the evidence.

5. Miss Yuen further tells me that the accounts exhibited by the Plaintiff are wrong in that the Plaintiff has omitted 11 invoices. That is as may be. It is, in its nature, a matter for a counterclaim, and for a counterclaim to be determined in the ordinary way. That means separate and apart from this matter of the cheques. I am not going to repeat the numerous authorities, so well-known to all of us, on cheques. The Plaintiff must be entitled to judgment on the cheques that I have enumerated.

6. Then there is another cheque for $30,000.00 issued on the 10th of March and numbered 856073. In relation to that cheque, there is put forward by each side a story which, if I were sitting in The Strand, would make me burst into fits of incredulous laughter. But I am not; I am sitting in Harbour Road in Wan Chai. The differing versions appear in paragraph 4 of Mr. Sin's second Affirmation, and paragraph 4 of Mr. Sin's second Affirmation, I do not wish to say too much lest it prejudice either party at the trial. But what I will say is that the circumstances are so bizarre and unusual, that, although I am going to give leave to defend on the cheque, I am going to order that the money be paid either into Court or into an interesting-bearing account in the joint name of the two Solicitors (whichever the parties prefer) to abide the result of the action, and that will be the condition on which leave to defend is granted.

7. I am going to set time limits for everything in a few moments.

8. So far as the remaining cheque, that of the 10th of August 1981, cheque No. 296202 for $45,000.00 is concerned, I can not accept the version of the Defendant at this stage as demonstrating such a defence as would warrant my not giving judgment. However, there is a number of difficulties in my way. The first and foremost being, of course, I can not possibly decide the issues between the parties on Affidavit. If I had had evidence only from the Defendant, I would have had no or little hesitation in saying: "What you reveal, even it were true, is not a defence to an action on a cheque. It is a matter for a counterclaim and therefore must be litigated separately.". But then Mr. Sin has gone on affirmation, and he has told me but half the story; I do not know why he told me any. If he starts, he should tell all and that clearly he has not. I do not propose to elaborate on that for obvious reasons: This matter has yet to be tried. And then a further instance, pointed out to me by Miss Yuen, is that he is clearly wrong in part of his Affidavit, and I propose to order of that cheque be dealt with in the same way as the $30,000.00 cheque.

9. There will be conditional leave to defend on that, and the money will be paid into Court, or, at the parties' option, into an interest-bearing account in the joint names of the Solicitors.

10. I now have to consider if I should attach some similar condition to the earlier cheques. In fact and in law, I find myself unable to do so. I should say in fact, in practice and in law, I find myself unable to do so.

11. I will now hear you both on the time limits to be prescribed and the Directions to be given.