Edward Wong Finance Co Ltd v. Lam Foo Hing Jewellery Factory Ltd and Others

HCA003152/1983

IN THE HIGH COURT OF JUSTICE

BETWEEN

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Coram: Hon. Mantell J.

Date of Hearing: 9th December, 1983.

Date of Delivery of Judgment: 9th December, 1983.

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JUDGMENT

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1. This is an action by a holder in due course against the drawer of a cheque. The drawer was Hang Fook Jewelry Company. Originally, the action was not only against Hang Fook Jewelry Company but three other defendants against which judgment has already been obtained. Hang Fook Jewelry Company was the 4th defendant to that action and was originally represented by solicitors. But as recently as 22nd November, there was filed with the court a notice to act in person by a Mr. Lam Chi Ping. The matter has come on for hearing before me today from the running list and when called on for hearing the defendant firm was neither represented nor was Mr. Lam Chi Ping present. Consequently, I required Mr. Chain, who appears for the plaintiff, to satisfy me that all appropriate steps have been taken under O.34 r.8 to acquaint the 4th defendant and Mr. Lam Chi Ping of the fact that the matter was in for hearing today. It seems that so soon as it was known that the matter was to come on for hearing, a member of the firm of solicitors who act for the plaintiff and who gave evidence before me, a Mr. Thomas Lau Wing On, not only tried to telephone at the number given by Mr. Lam Chi Ping in his notice to act in person but also went round to the premises with a letter to inform Mr. Lam that the matter was to to come on for hearing today. He found no trace either of the defendant firm or Mr. Lam Chi Ping at that address nor ultimately, having made all reasonable enquiries, was he able to discover where he might contact Mr. Lam Chi Ping or anyone of his associates in that firm. I am, therefore, satisfied that all necessary steps within the rule have been taken by the plaintiff to notify the 4th defendant of this hearing and, of course, I remind myself that there is a quite independent duty upon a defendant to keep himself acquainted with the state of the list.

2. The plaintiff is licensed money lender and he had been in the practice in his dealings with the 1st defendant of accepting postdated cheques at a discounted value in satisfaction of money lent. The cheque in question was one such cheque drawn by the 4th defendant and payable to the 1st defendant which had been offered under this arrangement The date for payment on its face was 5th February. When it was presented for payment, it was dishonoured by the bank and when returned to the plaintiff it was accompanied by a slip indicating that it should be referred to drawer. In his defence, the 4th defendant has accepted that he was the drawer of the cheque but takes the point that there was no timely notice of dishonour given and if the matter had to be decided purely on that question, the plaintiff would have failed. But Mr. Chain has invited my attention to the provisions of the Bills of Exchange Ordinance and also to certain decided authority. In the first instance, he was hoping to be able to proceed upon the basis of section 50 sub-section (2) (c) (iv) which provides that notice of dishonour shall be dispensed with where the drawee or acceptor is as between himself and the drawer under no obligation to accept or pay the bill and he invited my attention to a case decided by the Full Court in Hong Kong in 1965 and reported in Hong Kong Law Reports of that year, namely Nichimen Company Limited (No.2) v. Yick Chong, ⁽¹⁾ from which it appears that the Full Court following authority in England held that where as in this case between the drawer and the drawee bank, the bank was under no obligation to pay the cheque by reason of the drawer having insufficient funds, notice was unnecessary and no doubt, Mr. Chain would have succeeded on that ground but for the fact that the point was never raised in the pleadings. Recognising that should he apply for leave to amend and should leave be granted re-service would be necessary, he decided to proceed on an alternative ground. That ground is pleaded, namely that under section 50 sub-section (2)(b), notice of dishonour has been waived. That provision allows notice of dishonour to be dispensed with when notice has been waived either before the time of giving notice has arrived or afterwards. Evidence was given by Mr. Yuen of the plaintiff that following the return of the dishonoured cheque and after making enquiries as to the whereabouts of the 4th defendant, there was in due course a conversation between him and Mr. Lam Chi Ping at which Mr. Lam Chi Ping not only acknowledged that his firm was drawer of the cheque and was responsible for its payment but said that he would make himself responsible for the claim. Well, at first I was troubled as to whether or not that would be sufficient to amount to waiver of notice of dishonour. But Mr. Chain has referred me to authorities, the first of which was not directly in point in that it related to an acknowledgment of indebtedness prior to notice of dishonour.[See Coulcher v. Toppin. ⁽²⁾] The second was the decision in Cordery v. Colville ⁽³⁾ and in particular I was referred to the judgment of Mr. Justice Byles, and it is difficult to conceive of a more distinguished authority in this context. That was a case in which the drawer of a bill promised to pay the bill after it had been dishonoured and that was held to be a sufficient waiver of notice. Mr. Justice Byles put it in this way:

"A promise to pay may operate either as evidence of notice of dishonour. or as a prior dispensation, or as a subsequent waiver of notice. Whether made after, or even before, the time for giving notice has expired (inasmuch as notice may be given at any time within the limit prescribed by law), a promise to pay is always evidence from which the jury may infer due notice. But even when the other evidence is conclusive to show that due notice was not given or when a jury refuses to draw the inference that it was given, yet a promise to pay made within the time for giving notice is a dispensing with notice and after that time is a waiver of notice."

3. Now, upon that proposition of law being brought to my attention and upon my hearing the evidence to which I have referred, I am satisfied that the plaintiff was a holder in due course of this cheque; that the cheque was duly presented and was dishonoured; and that although notice of dishonour was not given within a reasonable time as required by the Ordinance; nonetheless, by virtue of the conversation that took place between Mr. Lam Chi Ping and Mr. Yuen, such notice of dishonour was waived. Therefore, there will be judgment for the plaintiff in the amount of $60,275.80 together with interest at the rate of 12% per annum to the date of judgment and thereafter, at the rate fixed for interest on judgment. Costs to the plaintiff.

(1)    [1965] H.K.L.R. 638

(2)    (1886) T.L.R. 657

(3)    (1863) 32 L.J.C.P. 210

Representation:

Mr. Benjamin Chain (Robert W.H. Wang & Co.) for the Plaintiff.

4th defendant - absent.