Read the full judgment text of HCA 012798/1982 on BabelCite. This High Court CFI judgment was delivered on 22 June 1984 before Souyave, Deputy Judge.
Civil litigation – bills of exchange – dishonoured cheque – claim by payee against alleged co-signer as drawer – sole proprietorship firm Tsui Wah Garden – whether signature on cheque is genuine or forged – whether plaintiff advanced HK$500,000 loan to firm – ostensible authority – estoppel – Bills of Exchange Ordinance (Cap 19) s.24 and s.23(b) – burden of proof in civil forgery cases – Doe D. Devine v. Wilson – Bowstead on Agency – plaintiff's action against 1st defendant dismissed with costs to 1st defendant. Whether on a disputed signature the burden of proof in a civil case lies on the party producing the instrument and asserting its validity, to be discharged on a balance of probabilities, rather than on the party alleging forgery to the criminal standard – held, the legal burden lies on the plaintiff asserting the cheque's validity. Whether the signature 'Lee Mo Tai' on cheque P1 was the genuine signature of the 1st defendant or a forgery, where the 1st defendant relied on s.24 of the Bills of Exchange Ordinance and the plaintiff relied on ostensible authority and estoppel – held, on visual comparison of the disputed signature with multiple specimen signatures of the 1st defendant (including court-taken specimens, affirmations, and certified copies), clear dissimilarities in the first and third characters established that the signature was a forgery, and the 1st defendant did not authorise or concur in the drawing of the cheque. Whether the plaintiff in fact advanced a loan of HK$500,000 to the firm Tsui Wah Garden through the 2nd defendant, as alleged, with the cheque given as security – held, no; the alleged cash loan paid in mixed currencies in a restaurant without documentation, in circumstances where the plaintiff had previously documented a similar loan by solicitor-drawn promissory note, and where the plaintiff never contacted the 1st defendant before she left for the UK, was inherently improbable and untrue. Whether the 1st defendant or the firm held out the 2nd defendant as having authority to obtain a loan and issue a firm cheque as security, so as to give rise to apparent (ostensible) authority – held, no; an agent cannot by his own representations create the appearance of his own authority, and the only facts the plaintiff could point to (a prior two-signature cheque cashed in March 1982 and the appearance of cheque P1) were insufficient and indeed suggested the 2nd defendant could not act alone. Whether the 1st defendant was estopped from denying the 2nd defendant's authority to sign the cheque and obtain the loan – held, no; the estoppel depended on ostensible authority, which was not established, and in any event the underlying loan was not proved. In the result, the plaintiff's action against the 1st defendant was dismissed and the plaintiff was ordered to pay the 1st defendant's costs.
Legal issues: Burden of proof on genuineness of signature on a cheque where forgery is alleged · Genuineness of the 1st defendant's signature on cheque P1 · Whether a loan of HK$500,000 was made by the plaintiff to the firm Tsui Wah Garden · Whether the 2nd defendant had apparent (ostensible) authority to bind the 1st defendant or Tsui Wah Garden · Whether the 1st defendant was estopped from denying the 2nd defendant's authority
Outcome: Plaintiff's action against the 1st defendant dismissed; plaintiff failed to prove the loan and failed to establish ostensible authority, estoppel, or the genuineness of the signature on cheque P1.