Kobayashi (HK) Ltd v. Tsai Kut Kan t/a Kan Fung Securities Co and Another

HCA005420/1979

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ACTION NO. 5420 OF 1979.

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Coram: Hon. LIU, J. in Chambers

Date of Judgment: 18th July, 1980

On Appeal from Registrar's Order made on 25th February, 1980.

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DECISON

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1. The plaintiff's claim against the defendants in this case is on a cheque for $400,000.00. On a summons for summary judgment, the Registrar granted, inter alia, judgment against the 2nd defendant in the sum of $400,000.00 to be paid within 14 days with costs to be either agreed or taxed. From that Registrar's decision given on the 25th February, the 2nd defendant now appeals. At the inception, both the plaintiff and the 2nd defendant agreed to exclude certain affidavits, and therefore the appeal was prosecuted on the matters canvassed in the 2nd defendant's affirmation dated 8th January, Miss Tam's affirmation and Mr. Cheung's affirmation both filed on 22nd February as well as the 1st defendant's affirmation dated 7th January.

2. It is common ground that the cheque of the 2nd defendant was given in consequence of speculation on gold futures. The contention of counsel for the defendant may be conveniently divided into three limbs. First, it was argued that the parties are not ad idem as regards the circumstances leading to the arrangement whereby the cheque in issue was drawn. According to the allegations of the 2nd defendant, the cheque was wholly given to the plaintiff as margin for a new account, G473. The plaintiff's claim on this cheque stems from a somewhat different factual basis. The plaintiff's allegations are that half of the amount on this cheque was to be paid into the existing trading account, G312, with the remaining moiety thereof into the new account, G473. It could be appreciated, as contended by Mr. Eddis for the 2nd defendant, that with this fundamental factual approach, a full judicial enquiry should be conducted and that the 2nd defendant ought not be summarily be shut out of an opportunity to be tested on evidence.

3. After one singular trading, the 2nd defendant saw fit to and did cancel the new account. Thus, so ran counsel's next argument, the 2nd defendant should not now be called upon to honour the cheque when the purpose for which it was given had long expired. The new account, G473, was allegedly cancelled, and no margin for which the cheque was allegedly given is today, or was at the time of the plaintiff's claim, necessary.

4. Lastly, the 2nd defendant seemed to suggest that his instructions were not duly complied with by as well his own representative, Miss Tam, as by the plaintiff company.

5. By reason of all these matters, Mr. Eddis urged the court to reverse the decision of the learned Registrar and grant unconditional leave to the 2nd defendant. In the course of the argument, divers matters were canvassed. At this stage, the least said about them the better, but there are matters unsatisfactorily explained or sought to be clarified with illogical explanations or ambiguities. Such of the allegations and explanations of the 2nd defendant's as deposed to in his affirmation filed on 8th January 1980 have cast not inconsiderably grave suspicion. There would seem to be good justification for Mr. Mok's criticism that the defence raised by the 2nd defendant is nothing more than a sham.

6. Having commented on the strained assertions of the 2nd defendant, I should hasten to point out that I am making no determination, nor do I attempt to express any concluded view, on any of the issues, but grave suspicion is reflected in the explanations and allegations advanced by the 2nd defendant. In the circumstances, conditional leave to defend should be granted, and the best way to achieve or implement it would be to order that the 2nd defendant to pay into court a sum of $400,000.00 within 14 days from today and that only upon payment into court by the 2nd defendant as ordered but not otherwise, the judgment against the 2nd defendant given by the learned Registrar on 25th February 1980 be set aside. For the removal of doubt, if any, in default of the 2nd defendant complying with the order of the court, the judgment granted against the 2nd defendant by the learned Registrar is to stand. I would now entertain question of costs. (Submissions heard)

7. On the question of costs, the 2nd defendant has not entirely, as it were, won the day. An order tantamount to conditional leave to defend has been made on this appeal. I have also taken into consideration the 2nd defendant's assertions on his affirmation. No more need be said. A fair order for costs of this appeal should, in my view, be costs in the cause. Of course, upon payment into court of $400,000.00 by the 2nd defendant as ordered, costs of this appeal and costs before the learned Registrar be both costs in the cause.

Representation:

Mr. Y.C. Mok instructed by P.H. Sin for Plaintiff/Respondent.

Mr. F. Eddis instructed by Foo & Li for 2nd Defendant/Appellant.