Yeung Kat Lung t/a Good View Trading Co. v. Gemme Ltd.

HCA013988/1997

HCA 13988/97

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

Action No. 13988 of 1997

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Coram: The Hon. Mr. Justice Sakhrani in Chambers

Date of Hearing: 12 August 1998

Date of Judgment: 12 August 1998

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J U D G M E N T

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1. This is an appeal from the order of Mr. Registrar Betts made on 22nd June 1998 whereby he gave judgment to the Plaintiff on his application for summary judgment under Order 14 Rules of the High Court.

2. The Plaintiff's claim against the Defendant is in respect of two cheques drawn by the Defendant. The Plaintiff is a sole proprietor carrying on business under the name and style of Good View Trading Company. The two cheques were drawn on Hang Seng Bank Limited and were made payable to Good View Trading Company. The first cheque was dated 22nd November 1997 and was for the sum of $700,000.00. The second cheque was dated 22nd December 1997 and was for the sum of $757,991.05. Both cheques were presented for payment after the due date but were dishonoured. Notice of dishonour was duly given by the Plaintiff to the Defendant but the Defendant failed to pay the Plaintiff the amounts of the two cheques.

3. The Plaintiff then commenced these proceedings. An amended statement of claim was filed on 7th January 1998 and a defence was filed on 10th February 1998. The Plaintiff's claim is for non-payment in respect of the two cheques. It is not a claim in respect of goods sold and delivered. The Plaintiff applied for summary judgment under Order 14 Rules of the High Court by a summons dated 20th February 1998. Mr. Registrar Betts granted the Plaintiff application on the 22nd June 1998 and gave judgment to the Plaintiff for the sums claimed with interest and costs.

4. The defence that was filed denied that the cheques were drawn by the Defendant. There was also an allegation that there was a total failure of consideration. And there was a further allegation that there was no privity of contract between the Plaintiff and the Defendant.

5. Paragraph 4 of the affirmation of Mr. Yu Wai Ying affirmed on 16th March 1998 on behalf of the Defendant shows that it was another director of the Defendant Mr. Yu Kin Sang who had issued the two cheques to the Plaintiff. It is said that this was done for and on behalf of another company called Techglory Limited and it was Techglory Limited which had business dealings with the Plaintiff.

6. The evidence filed in these proceedings shows that the Defendant is actually the parent company of Techglory Limited. The Defendant holds 1,600,000 of the 2,000,000 issued shares of Techglory Limited.

7. The two cheques have been produced in evidence. Both of them were drawn by the Defendant. There is a signature on the cheques and above the signature are the words "for and on behalf of Gemme Limited". There is no doubt that the cheques were drawn by the Defendant and the denial in the defence that the cheques were drawn by the Defendant is of no merit at all.

8. For the purpose of these proceedings, the Plaintiff is prepared to assume that there were no direct business dealings between the Plaintiff and the Defendant and that the cheques that were issued were done so for the purpose of releasing Techglory Limited from further liability to the Plaintiff. That, in my view, provides good consideration for the cheques. Mr. Yu Wai Ying in the said affirmation also confirms that the two cheques were issued to the Plaintiff in respect of Techglory Limited's indebtedness to the Plaintiff. I fail to see how it can be said that there has been a total failure of consideration for the two cheques.

9. As to the allegation that there was no privity of contract between the Plaintiff and the Defendant, this simply means that the Defendant is alleging that the business dealings were between the Plaintiff and Techglory Limited and not with the Defendant. Even if this were true, this does not assist the Defendant. The cheques were issued to settle the debt of Techglory Limited and to release Techglory Limited from further liability to the Plaintiff. As I have said, that is good consideration.

10. In the circumstances, I am satisfied that there is no arguable defence raised by the Defendant and that the Plaintiff is entitled to judgment on its claim. The appeal is dismissed with costs to the Plaintiff.

(Arjan H. Sakhrani)
Judge of the Court of First Instance

Representation:

Mr. Simon K.C. Lam instructed by Messrs. Kwok, Ng & Chan for the Plaintiff

Mr. Kenneth K.M. Ho instructed by Messrs Josip Ma & Ho for the Defendant