DAVID ELECTRICAL ENGINEERING LTD v. LEUNG LUP KWAN t/a INTERNATIONAL CONTRACTORS CO

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 515 OF 1999

-----------------

-----------------

JUDGMENT

-----------------

1. This is an appeal by the Plaintiff against the order of the Master granting conditional leave to defend to the Defendant by ordering the payment of the disputed sum of $52,000 into court. The disputed sum of $52,000 had been paid to court.

2. The appeal by the Plaintiff against the order of the Master is that the Plaintiff contends that summary judgment ought to be given for the full sum. What happen is this the Plaintiff is a contractor employed by the Defendant to do certain electrical works. Under the contract, a retention sum of $52,000 being 5% of the contract price was to be retained by the Defendant and that sum was not payable by the Defendant to the Plaintiff until 1 year after completion of the works. There is no dispute that the works were completed in November 1998. So the retention sum under the contract is not going to be payable until November 1999. What went wrong was that the Defendant, by mistake, had overpaid the Plaintiff under an invoice where the Plaintiff had over-charged the Defendant. The question then is should the Plaintiff be entitled to summary judgment of that retention money.

3. Mr. Lee on the hearing of the appeal very forcefully submitted to me that because this is a claim on a cheque that it should be treated as cash and that there should be no case of set off or counterclaim or even a stay of execution on the disputed sum. He also pointed out to me that there had been an allocation by the Plaintiff of the overpayment of $52,000 and therefore that puts the Plaintiff in a better position from a situation where there was no payment or where the payment made did not include any part of $52,000. I of course appreciate that the cheque claim is in a very privileged position in relation to summary judgment application. But this is a very unusual situation. It is a situation where it was not appreciated that under the contract the retention money of $52,000 would not be payable until November 1999. It is an admitted case of overpayment. There is also clear affidavit evidence that it was done by mistake.

4. I have no doubt that in these very unusual circumstances that at the least there should be conditional leave to defend and that the Master made the right order. So far as the order of conditional leave to defend affecting the Defendant is concerned, Mr. Tse stood up without my invitation to suggest that it ought to be reversed and he ought to be given unconditional leave to defend. Unfortunately, the Defendant has not put in any notice of appeal or any kind of notice to contend that it would wish to argue that the conditional leave to defend should be set aside to be substituted by an unconditional leave to defend. So I did not permit an argument for an appeal of unconditional leave. The Order of the Master is affirmed and the appeal is dismissed with costs.