Chu Kong Highway Engineering Co. Ltd. v. Wong Cheung Sum

HCA002335/1999

HCA 2335/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2335 OF 1999

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Coram : Hon. Godfrey, J.A. in Chambers (sitting as an additional Judge of the Court of First Instance)

Date of hearing : 23 July 1999

Date of judgment : 23 July 1999

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J U D G M E N T

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1. This is an appeal by the defendant against a judgment in favour of the plaintiff made against the defendant under the provisions of Order 14 of the Rules of the Supreme Court on 14 May 1999. The defendant raised before the master, and raises now, three defences. First, he complains about the late presentment of the cheque; second, he complains of a failure of consideration; and third, he complains that the cheque was exacted from him by duress.

2. As to the first suggested defence, I am satisfied that there is nothing in it. The fact that a cheque is presented late does not attract the same concern as might be the case in relation to a bill of exchange put into circulation, which one would expect to be dealt with with promptitude. Cheques are given under all sorts of different circumstances, and often, although delivered unconditionally, are not intended to be presented until some time later. Accordingly, I reject this suggested defence.

3. The second suggested defence, total failure of consideration, fails on the defendant's own evidence. It is plain from that evidence that the defendant was concerned about the financial position of a company called Multi-Best, and understood fully that there would be difficulties with Multi-Best if payments were not timeously made on its behalf to those to whom it owed money. The issue of a cheque in those circumstances, made voluntarily, would be consistent with a good consideration, not with a failure of consideration. There is nothing in this suggested defence either.

4. The third suggested defence, duress, is more serious. The evidence of the defendant is that he is a director and shareholder of Multi-Best. Multi-Best has two other directors - his wife and his sister-in-law. Nevertheless, he says he had no direct involvement in it.

5. His evidence as to duress, is contained in his affirmation made on 29 March 1999 and reads as follows:

"4. One day in February 1998 I received a telephone call from my said sister-in-law. She asked me to go up to the office of Multi-Best for a meeting. I went up to the office and in the conference room I met one Mr. Fung of the Plaintiff. He introduced himself as the manager of the Plaintiff. During the meeting Mr. Fung told me that Multi-Best owed the Plaintiff a lot of money and he wanted all the directors of Multi-Best to be present to know about this fact. After the meeting I recalled that I had met Mr. Fung once before many years ago.

5. After the said meeting, Mr. Fung telephoned me nearly everyday at my office and asked me when Multi-Best could come up with the money. The first phone call would come at about 8:30 in the morning and this would continue at about a two-hours interval and the last one would be before 8:00 in the evening. During the conversation

Mr. Fung would threaten to go up to Tak Tai and to take whatever goods he could lay his hand on. I was worried since I feared that I would lose my job if Mr. Fung should go to the office to make a scene.

6. On or around the 21st of July 1998 I was told by my said sister-in-law to go up the office of Multi-Best. At the office I met Mr. Fung again and this time he was with two female staffs their names of which I cannot now remember. This time Mr. Fung talked about money owed by Multi-Best to the Plaintiff in one of the transactions between them. During this meeting Mr. Fung was very anxious and agitated and he demanded Multi-Best to pay what he alleged were debts due to the Plaintiff. He banged on the table a few times during the meeting and he insisted that no one was to leave the conference room until some sort of proposal should be forwarded by the directors of Multi-Best. Mr. Fung also threatened those in the room which include myself, my wife, another director of Multi-Best and my said sister-in-law by saying, "白刀仔入紅刀仔出" ("white knife will go in and red knife will go out"): "我要你地十賠償還" (I demand you to pay ten times what you owe (to the company)) and "你地全部同我跳樓死左佢我就有交代" (All of you should jump down from here and die and I could answer (to my company), Mr. Fung also swore in Chinese. He was well-built and he boasted to be in the army once. I started to worry about the safety of myself and my fellow directors. Mr. Fung pressed me to come up with some financial solution. I told him that I myself did not have any money and I did not want to drag my family business into the dispute. Mr. Fung was not satisfied with my answer and he grew more fierce in this manner which frightened me.

7. Realizing that no solution was in sight and Mr. Fung would not let the matter rest and fearing that he might do something which might hurt us I reluctantly agreed to draw 3 cheques as required by Mr. Fung who claimed that would enable him to satisfy the Plaintiff's demand. As I did not have any cheque book with me I asked Mr. Fung if I could be allowed to go back to my office to draw such cheques.

Mr. Fung agreed. After the drawing of cheques I sent them back to the office of Multi-Best for my said sister-in-law to fill in the details and she sent them to the office of Mr. Fung."

There has been no evidence filed from any of the other persons said to be present at the meeting at which Mr. Fung uttered these threats, that is to say, the defendant's wife, the other director in Multi-Best, and the sister-in-law.

6. The defence of duress is one which requires a defendant to demonstrate that he did what he intended to do but did so unwillingly, see Lynch v. DPP for Northern Ireland [1975] A.C. 653, especially per Lord Morris at p.670. I have to consider whether what is said by the defendant here as to duress is credible. If it is, he is entitled to a trial of the issue of duress. It is irrelevant whether at this stage it may appear that the defence is unlikely to succeed, because it is unlikely to be proved that the events took place as they are said by the defendant to have done. That is the function of the trial judge to decide. The defendant is entitled to a trial of the issue of duress unless it is plain and obvious that that defence has no realistic prospect of success.

7. Mr. Joseph Fok, S.C. for the plaintiff has argued here that the defendant's defence of duress is inherently improbable. He points to the fact that it was first raised as a defence later in the day; and that there are surprising features, such as the alleged (unmet) demand for "ten times" payment. There is, he says, the curiosity that the defendant was allowed to go back to his office in order to draw the cheques. There is, he says, the oddity that the defendant said he had no relevant business with Multi-Best and that he would lose his job, although he was a director.

8. These are formidable points, but I have come to the conclusion that the defendant's story cannot be dismissed as incredible. Whether it will eventually be believed is not a matter for me. It is an extraordinary story, but I bear in mind that the defendant, and (if there is a trial of the action) any other deponent who gives evidence supporting his defence, will be liable to be sent to prison for a considerable time for the offence of perjury, if the allegations, which are very serious, made by the defendant are held to be false. Despite some misgivings, I cannot treat this defence as incredible. I therefore propose to allow this appeal, and to give the defendant unconditional leave to defend the action.

Representation:

Mr. Joseph Fok, S.C., instructed by Messrs. Liu, Chan & Lam, for the Plaintiff

Mr. Au-Yeung Kwan, instructed by Messrs. Kwan & Kwan, for the Defendant

Remarks:
On appeal by the Plaintiff to the Court of Appeal: Appeal allowed. Please refer to CACV000264/1999.