Aidid Mo t/a Mode De Tex Trading Corporation v. K.Y. Plastic & Metal Mfg Ltd
Read the full judgment text of HCA 5531/1980 on BabelCite. This High Court CFI judgment.
1. The facts in this case are far from being simple, but the issues are clear-cut. The defendant drew a cheque in favour of the plaintiff in the sum of $25,000. The cheque was not met, and thereupon the plaintiff commenced an action against the defendant on the dishonoured cheque.
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HCA005531/1980
----------------- Coram: Liu, J. in Chambers. Date of Judgment: 19th February, 1981 ----------------- JUDGMENT ----------------- 1. The facts in this case are far from being simple, but the issues are clear-cut. The defendant drew a cheque in favour of the plaintiff in the sum of $25,000. The cheque was not met, and thereupon the plaintiff commenced an action against the defendant on the dishonoured cheque. 2. Upon service of the writ of summons on the defendant, the defendant wrote to the plaintiff enclosing two cheques in the aggregate of $24,071.65 in the following terms:
3. Upon receipt of the two cheques, the allegation of the plaintiff is that with the acquiescence, if not consent of the defendant, they were appropriated to settlement of other alleged debts owed by the defendant to the plaintiff. It must be noted that the alleged acquiescence or consent of the defendant is only to be implied from, perhaps, the general tenor of the allegations contained in paragraph 11 and paragraph 13 of the plaintiff's affirmation filed herein on the 2nd February, 1981. Paragraph 11 reads as follows:
It is perhaps not impertinent to set out the text of that letter in full. The letter referred to reads as follows:
The letter is plagued by obvious errors, and its meaning cannot said to be entirely unambiguous, in particular, no reference was made to any acquiescence or consent on the part of the defendant to what appears to be an arbitrary appropriation of the two cheques. 4. I will now return to paragraph 13 of the plaintiff's said affirmation, which reads as follows:
It is evident that acquiescence or consent of the defendant to the alleged appropriation can only be implied. Such has never been explicitly asserted. 5. Mr. Ismail, counsel for the plaintiff submitted that this was a case of a claim on a dishonoured cheque. With counsel's analysis I disagree. The plaintiff's claim on a dishonoured cheque of $25,000 was, according to the defendant, settled by the two cheques in the sum of $24,071.65. The contention of the defendant had throughout been that on its calculations, the sum represented by these two cheques was sufficient to cover the indebtedness said to be met by the cheque in this action. Plainly, this is not a case on a dishonoured cheque. The issue is clearly whether the liability under the dishonoured cheque for $25,000 was wholly satisfied by a subsequent payment of the defendant in the form of the two cheques in question. 6. That being, in substance, the sequence of events, the parties' detest one for the other can readily be detected from their activities in these proceedings. It is understandable that after dispatch of two cheques in question the defendant avoided all contact and took no further action. Judgment in default of appearance was signed by the plaintiff. 7. It was not seriously contested that the defendant had a strong arguable case for setting aside the judgment entered in default. By a summons filed on the 27th January, 1981, the defendant applied for the writ of execution to be set aside and alternatively, for the writ of execution to be stayed upon a payment into court by the defendant of the balance of $928.35 together with bailiff's fees up to the 24th January, 1981. 8. Nowhere in the summons of the defendant was any reference made to 0.47. The learned Registrar was much impressed by as well submissions advanced on behalf of the defendant as presumably the circumstances of the case. The writ of execution was set aside, and costs connected with the application save for those otherwise dealt with were given to the defendant against the plaintiff. From this decision of the learned Registrar, the plaintiff now appeals. 9. Counsel urged before the court that the Registrar had no power to stay a writ of execution when the judgment in default remained uninterfered with. Counsel commended for my consideration passages in the White Book, in particular to the case of T.C. Trustees Ltd. and Another v. J.S. Darwen (Successors) Ltd.(1). Special emphasis was placed on the judgment of the learned Master of the Rolls as reported at p.302E/F:
10. Against that exposition of legal principle underlining 0.47, little can be said, but this is not an application under 0.47 alone. The order granted by the learned Registrar set aside the writ of execution. Even under 0.47, at p.753 of the 1979 White Book Vol. 1, marginal reference 47/1/3, under the heading of "Setting aside Execution", a writ of execution improperly issued may be set aside even after completion. Counsel referred me also to Chitty Archbold, an erroneous reference of which was given in the White Book. From its paragraph 23 at p.640, it can be seen that it is permissible to set aside an irregular execution. 11. Mr. Remedios drew my attention to the case of Bolt & Nut Co. (Tipton), Ltd. v. Rowlands Nicholls & Co., Ltd(2). for the proposition that an irregular judgment on a non-existent claim may be set aside and in fact must in justice be set aside with costs to the defendant. In Bolt & Nut, a cheque was given by the defendant in settlement of the plaintiff's claim, and it was held that pending presentment of the cheque for payment, the plaintiff's remedy during the currency of the cheque was suspended. 12. It was argued by Mr. Remedios, and in my view quite rightly, that if a judgment was to be conceded as irregular, nothing emanating from an irregular judgment could be said to be regular. It stands to reason, so Mr. Remedios contended, that the writ of execution in the present case must at least be arguably irregular if it is to be accepted that the default judgment is arguably irregular. Mr. Remedios craved in aid also the inherent jurisdiction of the court in addition to what was made permissible under 0.47 for an irregular writ of execution. 13. The two cheques sent by the defendant upon service of the writ were intended by the defendant to be in full settlement of the amount on the cheque in this action. Apart from the alleged appropriation, it must be conceded that there was a strong arguable case corroborated by documents, in particular the letter of the defendant enclosing the two cheques. The judgment in default, if applied for, should be set aside. Therefore, the writ of execution should, in the justice of the case, be set aside. I can see no good ground for the Registrar to refuse to entertain an application for setting aside the writ of execution without being also requested to deal with the judgment in default. I do not find the order to set aside the writ of execution of the learned Registrar as being against any accepted principle. In my judgment, it is evident that the circumstances of the case called for the setting aside of the writ of execution, and I can see no justification for interfering with that order made by the learned Registrar on the 4th February, 1981. 14. The Registrar awarded costs on the defendant's application for setting aside the writ of execution against the plaintiff. The defendant exhibited his letter enclosing the two cheques. The terms of the letter are crystal clear. The allegations of the plaintiff made in paragraphs 11 and 13 of his affirmation are not unambiguous, direct or specific. The same criticisms may be levelled at the plaintiff's letter, the full text of which I have hereinbefore set out. In these circumstances, it is not difficult to see where sympathy should lie. I cannot say that in awarding costs to the defendant against the plaintiff on the application before the learned Registrar, his discretion was wrongly exercised. The case set forth by the defendant raised a substantial bona fide issue. The letter of the defendant should have induced cautious approach to further proceedings letting alone proceeding to execution. The plaintiff had received no positive response to his appropriation, and he ought to have appreciated the defendant's conviction. Application for judgment in default of appearance should best be withheld in the circumstances, and there was hardly sufficient cause for the plaintiff to proceed to execution with all expedition. For all these reasons, I am unable to intervene in the order for costs made by the learned Registrar. Consequently, the appeal must be dismissed. The application for setting aside the writ of execution before the Registrar must, by unnecessary implication, yearn for an order setting aside the judgment obtained in default of appearance. In the justice of this case and with a view to putting an end to further unnecessary litigation, I take upon myself to set aside also the judgment entered against the defendant in default of appearance. I propose now to give directions.
Representation: Mr. Ismail instructed by Messrs. Roger S.K. Wong & Co. for Plaintiff. Mr. L.J. Remedios instructed by Messrs. D'Almada Remedios & Co. for Defendant. (1) [1969] 2 Q.B. 295 (2) [1964] 1 A.E.R. 137 |