XCHRX FORWARD ELECTRIC CO. LTD. v. WITTIS ELECTRONICS LTD.

HCA22366/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.22366 OF 1998

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J U D G M E N T

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1. On 4 October 2000 following two days of trial, the parties reached an agreement for stay of the proceedings on terms of settlement.

2. The terms of the agreement signed by counsel were as follows :

"The Plaintiff and the Defendant have offered to settle the claim herein by the following terms, namely :

1. the present proceedings should by consent be stayed until further order of the court;

2. the Defendant shall pay the Plaintiff on or before 1st December 2000 a sum of US$95,000;

3. upon receiving the aforesaid sum of US$95,000 the plaintiff shall within 7 days thereof file or cause to be filed a Notice of Discontinuance of this action;

4. provided always that in the event the Defendant fails to pay the aforesaid sum of US$95,000 or any part thereof on or before 1st December 2000 the Plaintiff shall be at liberty to enter judgment against the Defendant for

(a) a sum of US$95,000;

(b) interest at judgment rate on the said sum from the date of the Writ;

(c) costs of this action be to the Plaintiff to be taxed if not agreed.

5. for the avoidance of doubt upon the discontinuance of this action and/or upon the receipt of the sum of US$95,000 the Plaintiff would forbear to claim against the Defendant any sum of money and/or any costs despite any costs order already made in their favour; and

6. for avoidance of doubt, subject to the above terms, the above settlement is a full and final settlement of the claim of the Plaintiff in this action."

3. The court noted the terms of settlement and I see from the note of the proceedings that it simply ordered that the case be adjourned sine die.

4. The defendant failed to keep its part of the bargain. It did not pay the full sum of US$95,000 on or before 1 December 2000. However, it is agreed that between 23 and 28 November, a total of HK$350,000, equivalent to US$44,871.82, was paid into the plaintiff's bank account by or on behalf of the defendant.

5. Then on 7 December, after the present summons had been issued, the defendant offered to pay a further HK$231,000 by cheque. There is some problem with the cheque because at this moment, I understand that two cheques have not been presented but the defendant says that on presentation, they can be met. A further cheque is still in the hands of the defendant's solicitor although he said that on presentation it could be met immediately. I think that in the circumstances, I can only operate on the basis of what has actually been paid up to date because really one never knows until a cheque is honoured that it is going to be honoured.

6. Now, the plaintiff seeks judgment in terms of the agreement, not surprisingly given that if judgment is entered, the plaintiff will get interest and costs which it would not otherwise have had. The terms of the agreement are perfectly clear. It provides for liberty to enter judgment unless the full sum is paid by a specified time. That did not happen. I have heard no good reason why. The defendant is not some poor man in financial straits. It is a company, I am told, part of a large group, which is about to be listed in Singapore. There seems to be no good reason why it could not put up the money in the two months agreed. There seems to be no good reason why, if the full sum could not be paid in one payment, but it had to be paid by several payments, nothing at all was paid until 23 November. The obvious conclusion is that the defendant has been delaying, for what reason I know not, perhaps delaying because a gentleman who has been referred to as lynch pin of the company has been too busy to deal with it, or perhaps out of darker motives, it does not matter. There has been delay. And as appears from the file and in particular the ruling of Deputy Judge Longley on 27 September, the defendant has a history of delay.

7. Solicitors for the plaintiff has referred me to page 1463 of the White Book, Vol.2, where it is said that :

"Where a consent order embodies an agreement which amounts to a contract between the parties, the court will only interfere with it on the same ground as it would with any other contract and therefore where it appears that the order embodies the conclusion of negotiations between the parties, the court will give effect to it, where one party is in breach and will not vary it by, e.g. giving extra time to perform its terms."

Authority for that is Tigner-Roche & Co. v. Spiro [1982] 126 SJ 525 (Court of Appeal).

8. Here, there is no consent order. The court simply adjourned sine die, but the agreement clearly embodies the conclusion of negotiations between the parties. There is no reason why the court should not give effect to it, taking into account the sums actually paid.

9. There will, therefore, be judgment for the outstanding balance which, so far as I know, are not taking into account any cheques which are not yet credited and for which ultimately credit must be given, will be :

1. the sum of US$50,128.18;

2. interest on US$50,128.18 at the judgment rate from 1 December 2000 until payment; and

3. the costs of the action, including the costs of this summons, to be taxed if not agreed.