Jung Chuen Bakelite & Jung Chuen Bakelite & Plastic Manufactory Ltd v. Semk Industrial (Holdings) Co Ltd

DCCJ 2567/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION No. 2567 OF 2010

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JUDGMENT

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Introduction

1.This is an application of the plaintiff for judgment in the sum of HK$901,209.94 be entered against the defendant and dismissal of the defendant’s counterclaim by way of a summons dated 2 November 2012 (“the Summons”).

Background facts

2.The plaintiff’s application is premised upon the following background facts which are not in dispute:

(1)   The trial of the present action was to be heard by Deputy District Judge Jonathan Chang on 21 August 2012. On that day, the parties came to an agreement to settle the present action. As a result, the deputy judge made a consent order dated 21 August 2012 (“the Order”) upon the joint application by the parties.

(2)   The terms of the Order relevant to this application are as follows:

(i) The defendant shall issue post-dated cheques to the plaintiff in a total sum of HK$650,000 (“the Settlement Sum”) in full and final settlement of the plaintiff’s claim in the present action in the following manner:-

a. A cheque in the sum of HK$200,000 dated 4 September 2012 (“the 1^st Cheque”);

b. A cheque in the sum of HK$200,000 dated 24 September 2012 (“the 2^nd Cheque”);

c. A cheque in the sum of HK$150,000 dated 14 October 2012 (“the 3^rd Cheque”); and

d. A cheque in the sum of HK$150,000 dated 3 November 2012 (“the 4^th Cheque”).

(Paragraph 1)

(ii) All the abovesaid post-dated cheques (“the Four Cheques”) shall be delivered to the plaintiff at the time of signing the Order dated 21 August 2012. (Paragraph 2)

(iii) If the defendant fails to pay any part of the Settlement Sum or to honour the Four Cheques, judgment in the whole sum of HK$901,209.24 shall be entered with costs in favour of the plaintiff forthwith, with the defendant’s counterclaim dismissed. (Paragraph 5)

(iv) Upon the full payment of the Settlement Sum and the signing and execution of the Chinese Agreement, the plaintiff’s claim herein and the defendant’s counterclaim herein be dismissed with no order as to costs. (Paragraph 6)

(3)   Pursuant to paragraph 1 of the Order, the defendant delivered the Four Cheques to the plaintiff on 21 August 2012.

(4)   The 1^st and 2^nd Cheques were duly honoured upon presentation on their respective due dates.

(5)   The 3^rd Cheque was dishonoured when the plaintiff presented the same for payment on 15 October 2012.

(6)   On 18 October 2012, the plaintiff received a facsimile from the defendant with a copy of customer’s credit advice (“the Fax”). By the Fax, the defendant informed the plaintiff that a replacement cheque in the same amount of the 3^rd Cheque (“the Replacement Cheque”) was deposited into the bank account of the plaintiff on 18 October 2012 at 10:45 a.m..

(7)   On 22 October 2012, Messrs Stephen Lo & P.Y. Tse (“SLPYT”), solicitors for the plaintiff, issued a letter of the said date to the defendant’s former solicitors, namely, Messrs Wilson Yeung & Co. (“the Letter”). By the Letter, SLPYT put it on record that the 3^rd Cheque was dishonoured on 15 October 2012 and notice of dishonour was given to the defendant on the following day. It was further stated that the plaintiff’s acceptance of the payment by the Replacement Cheque should not in any way constitute a waiver or an acquiescence in the defendant’s breach of the Order and was entirely without prejudice to the plaintiff’s right to enter judgment against the defendant in the whole sum of HK$901,209.24 with interest and costs forthwith with the dismissal of the defendant’s counterclaim pursuant to paragraph 5 of the Order.

(8)   The defendant did not reply to the Letter. The plaintiff issued the Summons on 2 November 2012.

(9)   The 4^th Cheque was due on 3 November 2012 and the plaintiff presented the same for payment. It was duly honoured.

3.In the result, the plaintiff has already received the entire amount of the Settlement Sum.

The Summons

4.At the outset of the hearing of the Summons, I asked Ms Tjia, counsel for the plaintiff, about the plaintiff’s position in respect of the Settlement Sum, for there is no mention about the same in the Summons. Her reply was that in addition to the Settlement Sum, the plaintiff claimed to be entitled to, among other things, the whole sum of HK$901,209.24 by reason of the defendant’s breach of the Order, namely, the dishonour of the 3^rd Cheque notwithstanding the Replacement Cheque.   

5.After some discussion, Ms Tjia concedes that the plaintiff would give credit for the Settlement Sum in the event that the plaintiff succeeded on the Summons. This concession is plainly appropriate.

6.In support of the plaintiff’s application, the plaintiff’s two shareholders and directors, namely, Tsang Kwok Wing (“Kwok”) and Tsang Kin Wing (“Kin”) filed their affirmations. Kwok and Kin are brothers sharing the same residential address. Ms Lau Mei Yuk (“Lau”) filed two affirmations on behalf of the defendant.   

7.There is an important factual dispute raised in the affirmations. Lau in her first affirmation alleges that on 15 October 2012, which was a Monday, she contacted Kwok by phone twice on the instruction of her boss Mr So to ask for an extension of time to pay the amount in the 3^rd Cheque until 18 October 2012 (“the Extension”). She alleges Kwok agreed to the Extension in the second call. Hence, in reliance of the agreement of the Extension, she caused the 3^rd Cheque to be countermanded. She says but for the Extension, she would not have instructed the bank to countermand the 3^rd Cheque.

8.The plaintiff denies that it has granted the Extension or any extension at all.

9.Mr Wong, counsel for the defendant, argues that the Extension gave rise to a promissory estoppel which would prevent the plaintiff from enforcing the original terms of the Order. It is obvious that this factual dispute calls for resolution and that it can be resolved only by a trial. The parties should have applied for cross-examination on the affirmations filed to resolve this factual issue.

10.After hearing submissions of both parties on the Summons on 30 January 2013 in chambers, I directed the parties to fix a 3-hour hearing before me for a mini-trial on the specific issue as to whether the plaintiff granted the defendant the Extension on 15 October 2012. Thus, the hearing of the Summons resumed on 24 April 2013 in open court. After receiving oral evidence from the deponents of all the affirmations filed, I directed the parties to lodge with this court and serve on the other side their respective written submissions on such oral evidence adduced on 29 April 2013.   

11.At the outset of the resumed hearing, in view of the debate as to whether detriment suffered by the promisee in reliance of the promise is a requirement of a promissory estoppel at the first hearing, I referred counsel to the dicta of Ribeiro PJ in Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1 at p.22 (§55). Ribeiro PJ had this to say about the equitable doctrine:

“A promissory estoppel may be said to arise where (i) the parties are in a relationship involving enforceable or exercisable rights, duties or powers; (ii) one party (the promisor), by words or conduct, conveys or assurance to the other (the promise) that the promisor will not enforce or exercise some of those rights, duties or powers; and (iii) the promise reasonably relies upon that promise and is induced to alter his or her position on the faith of it, so that it would be inequitable or unconscionable for the promisor to act inconsistently.”

12.Ms Tjia then makes two confirmations with this court. First, she confirms that it remains the position of the plaintiff that the plaintiff would give credit for the Settlement Sum in case that this court grants its application. Second, Ms Tjia expressly accepts that if this court finds as a matter of facts that the plaintiff agreed to the Extension and the defendant acted in reliance of the Extension, the plaintiff would be debarred from enforcing the original terms of the Order by reason of a promissory estoppel and the application is bound to be dismissed.

13.On the other hand, since the burden of proof relating to the Extension rests on the defendant, I directed the defendant to open its case on the Extension. I received oral evidence from Lau for the defendant and from both Kwok and Kin for the plaintiff. 

14.Before dealing with their oral evidence, I find it necessary to first outline their evidence relating to the Extension in their respective affirmations with particular attention paid to how such evidence emanated.                                                             

15.In the first affirmation of Kwok filed on 2 November 2012, he obviously did not mention the Extension. Lau first alleged the Extension in her first affirmation. She claimed that in the morning of 15 October 2012 at about 11:41 a.m., Mr So asked her to call Mr Tsang at 136285038 to ask for an extension of time to pay the amount in the 3^rd Cheque until 18 October 2012. She did so. She believed that Mr So did not want to talk with Mr Tsang himself because of their poor relationship resulting from the present action.

16.She got one Mr Tsang on the other side of the line and she made the request pursuant to her instruction. Mr Tsang told her that he would reply to her later.

17.Not hearing from Mr Tsang for a while, Mr So asked Lau to call Mr Tsang again at 12:18 p.m. on the same day. Lau contacted Mr Tsang at the same number and on that occasion, Mr Tsang agreed to the Extension.

18.Given the Extension, Lau countermanded the 3^rd Cheque and intended to replace it by way of the Replacement Cheque. It was a usual practice of the defendant to take the extra step to replace a cheque which could not be honoured on its due date with a new cheque. This was to avoid confusion in the bank records of the defendant’s account.

19.Lau further denied that she received any notice of dishonour of the 3^rd Cheque from the plaintiff.

20.Lau was able to tell the exact time when the two calls were made to Mr Tsang because of the written record of the call details of Mr So’s phone (“the Record”). It can be seen from the record that there were two calls dialed to 1551861361285038 (“the Number”). The first call lasted for two minutes and the second call lasted for one minute.

21.Kwok made his second affirmation dated 13 December 2012 in response to Lau’s allegation. He strenuously denied the existence of the Extension made by him or the plaintiff. He specifically denied that the Number belonged to him and/or his staff and he never received any call from Lau on 15 October 2012. He further produced his business card to show his phone number.

22.Kwok exhibited the plaintiff’s bank record showing that the 3^rd Cheque was presented for payment at 1:59 p.m. on 15 October 2012. He contended that had there been the Extension granted at 12:20 p.m., the plaintiff would not have presented the 3^rd Cheque. Kwok insisted that he called Lau on 16 October 2012 to give the defendant notice of dishonour of the 3^rd Cheque.

23.Curiously enough, Kwok made a legal argument in his affirmation that the Extension was not supported by consideration. Thus, he contended that no reasonable company or person would have agreed to the Extension.

24.Lau made her second affirmation dated 20 December 2012. First she made a clarification about the Number. The last digit of the Number being “8” was not shown in the Record possibly because of the length of the Number. Second, she produced a business card of Kin, which showed that the Number (with the last digit of “8”) indeed belonged to Kin.

25.Kin made an affirmation to reply to the second affirmation of Lau. Kin tried to make a clever point that it was Lau who made a mistake about the Number and the plaintiff and Kwok could not be blamed. He also denied that Kwok had ever lied since the Number did not belong to Kwok in truth. He stressed that he had never allowed any other persons including Kwok to use his phone with the Number. Therefore, it was impossible for Lau to reach Kwok at the Number.

26.Kin further denied that he had ever agreed with Lau to grant the Extension to the defendant.

27.Kin stressed that it was Kwok who had the authority to handle the present action on behalf of the plaintiff. He produced a copy of the Chinese Agreement signed by Kwok on behalf of the plaintiff pursuant to the Order as an exhibit to show that Kwok and not him all along dealt with the present action. He therefore made a point that it would be very odd if not impossible for the defendant’s staff to contact him instead of Kwok if they wanted the Extension.

28.Kin denied the description of the contents of the two calls made by Lau. He observed that the duration of the two calls was so short that it was impossible for anyone to be able to discuss, consider and agree on any terms of an extension of time. He further observed that Mr So, who had throughout represented the defendant in these proceedings, should have made the request for an extension of time by himself and should not have asked the defendant’s accounting staff to do so in his stead.

29.Lastly, Kin contended that since both parties were represented all along and therefore there was no reason why Mr So would have made the request for an extension of time by his staff instead of the lawyers representing the defendant.

Oral evidence        

Lau

30.Lau testified largely in line with the contents of her affirmations and was unshaken under cross-examination. She added that because of the Extension, she caused the 3^rd Cheque to be countermanded and the defendant had to pay HK$90 to the bank as cancellation fee.

31.She also clarified that the Fax sent to the plaintiff was actually written by another staff of the defendant.

32.As regards the two telephone conversations that she was involved on 15 October 2012, she explained that the calls were made by Mr So and once the line was connected, Mr So passed his phone to her. At that time she only knew that one Mr Tsang of the plaintiff would be on the other side of the line and she did not know his full name. She had not dealt with Kwok or Kin before. It was not until she made the affirmations to oppose the Summons that she was told that the one to whom she talked over the phone was called Tsang Kwok Wing. That was the reason why she deposed to the fact that Kwok agreed with her to grant the defendant the Extension on behalf of the plaintiff.

Kwok

33.Kwok said he had never contacted and/or known Lau before. He contacted her for the first time on 16 October 2012 to tell her the 3^rd Cheque was dishonoured. He could not explain why he saw fit to inform an accounting staff of the defendant only and not Mr So or any person in charge of the defendant about this breach of the Order by himself. Nor could he explain why the plaintiff did not instruct SLPYT to issue to the defendant a formal notice of dishonor even though it was clearly a legal matter and indeed a triggering event under the Order. He claimed he did not know that Mr So was the man in charge of the defendant though Kin in his affirmation stated that Kwok had told him that Mr So was the decision maker of the defendant in relation to the present action. Kwok could only reply that he did not remember having told Kin so.

34.Kwok claimed that he only came to know that Mr So was in charge of the defendant only after Mr So signed the Chinese Agreement in the capacity of the legal representative of the defendant pursuant to the Order on 21 August 2012. Still, by the time when the 3^rd Cheque was dishonoured on 15 October 2012, he should have known the capacity of Mr So. Kwok could only say it was the usual practice of the plaintiff to look for accounting staff of the company issuing a dishonoured cheque.

35.Kwok sought to justify his response to the Number in his second affirmation. He insisted that it did not occur to him that the Number belonged to Kin despite their close relationship. He said he could call Kin by pressing a four-digit number as a shortcut by use of a particular network and he had done so for almost ten years. Thus, he claimed that he had no recollection about the Number.

36.However, he was able to tell with certainty that the Number did not belong to the staff of the plaintiff in his second affirmation. He explained that the telephone numbers of the staff of the plaintiff should normally start with the three digits “137” as they were all served by the same network and incoming calls were free of charge. There were more than one hundred staff members of the plaintiff (including twenty odd managerial staff). Kwok accepted that the plaintiff did not have any control over the telephone numbers of the staff members. Kwok claimed that he invariably had a look at the telephone number of each and every one of the staff members when they first joined the plaintiff and so he could positively make the assertion.

37.It is noteworthy that Kwok did not say expressly that the Number did not belong to Kin. Kwok could not explain why he did not do so and he could merely say that it did not cross his mind that he had to say so.

Kin

38.Kin for the very first time accepted that he did receive two calls from Lau on 15 October 2012. Kin claimed that in the first call, Lau asked him not to present a cheque without specifying which cheque and the date it bore. He gathered that the cheque she referred to should bear the same day of the call. Then he told her flatly that it had already been presented (factually this was incorrect). Lau did not say anything in response.

39.He then received another call from Lau some time later and he did not have the slightest recollection about the conversation in that call.

Assessment of evidence

40.Lau struck me as an honest and straightforward witness. I am convinced that she tried her best to tell me the truth. Her evidence about the two calls was very clear and did not appear to me to be a sheer concoction. Nor did it appear to me that she was making an all-out effort to lie in the witness box for her employer.

41.It is true that she made a mistake about the identity of Mr Tsang to whom she spoke over the phone in her affirmations. It was a bad mistake given the fact that the defendant had all along in possession of Kin’s business card bearing the Number. I fail to understand why the defendant would deliberately make a mistake about the identity of Mr Tsang. I conclude that she and the defendant were merely careless in making this mistake.

42.In any event, any harmful effect of this mistake is removed by Kin’s unexpected acceptance that he talked with Lau in the two calls. Lau did not lie. She really talked to Kin, who is also a Mr Tsang.        

43.There is indeed unsatisfactory aspect in the evidence of the defendant relating to the Extension. The defendant should have replied to the Letter and highlighted to the plaintiff that there had been the Extension. That would be more consistent with the existence of the Extension. However, this omission on the part of the defendant would not affect the credibility of Lau as a witness.

44.Ms Tjia makes scathing attack on Lau’s credibility in her written closing submissions. Suffice it to say, I do not accept anything advanced on behalf of the plaintiff would impeach her credibility.  

45.Neither Kwok nor Kin appeared to me as a truthful witness. I should deal with Kin’s evidence first.

46.It is inexplicable why Kin said nothing about the two calls in his affirmation, which was expressly made for the purpose of rebutting Lau’s allegation about the two calls. Instead he made all sorts of allegations and observations in his affirmation, which now turn out to be nothing more than red-herrings. The contents of his affirmation are grossly misleading.

47.Kin claimed that he did not tell anyone including Kwok and the lawyers of the plaintiff about the two calls even though he knew the cheque referred to by Lau related to the present action and Kwok had the conduct of the present action. He did not find it necessary to tell Kwok. He kept the two calls strictly to himself for unknown reason. Kin claimed that, though he had all along kept abreast of the present action, it was not until he was asked to make his affirmation in reply on 21 January 2013 that he told Kwok that Lau made the two calls to him on 15 October 2012. Still, there was no mention about the two calls in his affirmation. I have no doubt that he lied. 

48.I further note that his version of the two calls was not even put to Lau by Ms Tjia when Lau was vigourously cross-examined about her alleged conversations with Mr Tsang in the two calls.

49.It is alarming that Kin claimed that he did not remember what transpired in the second call and his mind went totally blank about the second call. This is incredible and Kin was clearly evasive. I reject his evidence.

50.Only Lau and Kin were privy to the two calls. Thus, essentially this is a case of Lau’s words against Kin’s. For the reasons given above, I have no hesitation to prefer Lau’s evidence to Kin’s.

51.Credibility issue aside, the version of Lau is more probable than Kin’s. Kin’s account of the first call was unbelievable. Given the alleged brief exchange, it should have lasted for less than one minute. Moreover, if Kin had told Lau in the first call that the cheque had already been presented, Lau should not have countermanded the 3^rd Cheque on the following day. On balance, I accept that the Extension was actually granted by Kin on behalf of the plaintiff. As a result, the defendant altered its position by countermanding the 3^rd Cheque and deposited the Replacement Cheque and it is only inequitable or unconscionable for the plaintiff to go back on its words.

52.I should also give my view on Kwok’s evidence. I do not accept his allegation that he called Lau on 16 October 2012 and told her that the 3^rd Cheque was dishonoured. In the first place, I prefer Lau’s evidence to his. Secondly, I do not accept his allegation that he did not know Mr So was the person in charge of the defendant and that he would merely contact an accounting staff of the defendant whom he had not had any contact before to talk about the 3^rd Cheque.

53.I also do not accept that Kwok had no idea about the ownership of the Number albeit with the last digit being inadvertently omitted by Lau in her first affirmation. He was clearly meant to be misleading and tried to fudge the issue in his second affirmation.  I find it astonishing that the plaintiff did not bother to check whether the Number belonged to Kin and whether Kin actually received the two calls after Lau had made the serious and unequivocal allegation of the Extension in her first affirmation.

54.Furthermore, Kwok’s purported knowledge of the telephone numbers of all the staff members of the plaintiff is simply absurd. He just did not hesitate to lie.

55.In my judgment, I believe that Kin told Kwok about the calls made by Lau and hence the Extension before the Summons was taken out. I note that Kwok already knew the identity of Lau in his first supporting affirmation. It is common ground that Kwok and Lau had had no contact and/or interaction and they had not known anything about each other before. Given my rejection of Kwok’s evidence that he called Lau on 16 October 2012, in my view, the only way that Kwok could come to know Lau was through the narrative of the two calls made to him by Kin.

56.Kin must have told Kwok about the calls. They lived together and they were, together with their sister, shareholders and directors of the plaintiff. Kin under cross-examination accepted that he knew the terms of the Order and he discussed the present action with Kwok. The two calls were clearly relevant to the legal rights of the plaintiff under the Order. Kin no doubt must have told Kwok about the two calls as soon as they were made.

57.Given my finding relating to the Extension, the plaintiff’s application falls to be dismissed. However, in spite of her confirmation at the outset of this mini-trial, in her written closing submissions, Ms Tjia retracted and seeks to argue that there is no promissory estoppel even if I find that the agreement for the Extension was made between the parties.

58.Ms Tjia first contends that the plaintiff now disputes that Ms Lau had the authority or the power to enter into an agreement with Kin which would amount to a variation of the Order. This point has never been raised before. Lau was not cross-examined on this. It is unfair for the plaintiff to mount this challenge now.  

59.In fact, Lau made it clear that she was instructed by Mr So to make the request for the Extension. Mr So was the legal representative of the defendant signing the Chinese Agreement. The plaintiff did not challenge his authority to do so. I see no merit at all in the plaintiff’s present challenge to his authority to instruct Lau to speak to Kin and ask for the Extension.

60.In any event, it is only surreal that the defendant has never accepted Lau to make the request for the Extension on its behalf whilst it opted to resist the present application in reliance of the Extension to be established by her evidence. With respect, the lack of authority issue is a complete non-starter.

61.Next, Ms Tjia argues that the evidence relating to the parties’ agreement to the Extension was not clear and unequivocal. I accept Lau’s evidence and I cannot agree with Ms Tjia.

62.Lastly, Ms Tjia submits that the defendant was not induced to alter its position by the Extension. I disagree. It is obvious to me that the defendant acted in reliance of the Extension and altered its position accordingly. The defendant first countermanded the 3^rd Cheque on the next day thereby incurring a cancellation fee of HK$90 and secondly it deposited the Replacement Cheque into the plaintiff’s account on 18 October 2012. I see no merit in this submission.

Further objections raised by the defendant

63.The Extension is actually the third ground advanced by Mr Wong to oppose the Summons and he makes it clear in his closing submissions that he would still rely on his first two grounds involving legal arguments only. Ms Tjia makes no submission on these two grounds. In deference to Mr Wong’s submissions, I shall briefly deal with his two grounds though strictly speaking this is unnecessary in the light of my finding of a promissory estoppel.

64.Mr Wong first argues that on a proper construction of paragraph 6 of the Order, so long as the defendant has paid fully the Settlement Sum and signed the Chinese Agreement, both the plaintiff’s claim and the defendant’s counterclaim would, without further ado, be dismissed with no order as to costs. Mr Wong argues that there being no dispute about the fact that the Settlement Sum has been, albeit belatedly, paid in full and the Chinese Agreement has been signed, the actual performance on the part of the defendant was completed and hence the claim must be automatically dismissed in the result. He further argues that the Order does not contain a provision to the effect that the parties have liberty to apply. Thus, so his argument runs, the present action has already come to a complete end and the plaintiff could not take any further step in the present action.

65.I cannot accept his argument. It is trite that in arriving at the true interpretation of a document, a clause must not be considered in isolation but must be considered in the context of the whole of the document. In other words, a holistic interpretation has to be found. As observed by Walker LJ in The Apostolis (No.2) [2002] 2 Lloyd’s Rep. 337 (CA) at 348:

“… it is hornbook law that a contract must be construed as a whole. One cannot construe cl.3 and then afterwards alter the meaning of cl.20 in order to accord with it.”

66.In the premises, paragraph 6 of the Order cannot be considered in isolation. I have to look at all other provisions in the Order. Paragraph 1 stipulated the exact manner as to how the Settlement Sum was to be paid. Paragraph 2 required the defendant to provide the Four Cheques referred to paragraph 1 for the specific purpose of paying the Settlement Sum. It is also trite that a bill of exchange is to be treated as cash. As Lord Denning MR said in Fielding and Platt Ltd v Najjar [1969] 2 All ER 150 at 152:

“We have repeatedly said in this court that a bill of exchange or a promissory note is to be treated as cash. It is to be honoured unless there is some good reason to the contrary.”

67.It is thus clear that the parties intended the Settlement Sum was to be paid in four instalments by the Four Cheques and none other methods and that each of the Four Cheques was meant to be honoured on its due date upon presentation for payment by the plaintiff. The Order did not provide any other way as to how the defendant could pay the Settlement Sum.

68.In my view, the defendant can only enjoy the benefit of paragraph 6 if and only if it is in strict compliance with all other terms of the Order, i.e. payment of the Settlement Sum by the Four Cheques.

69.If Mr Wong’s construction is correct, it would mean that the defendant could unilaterally decide when and how it should pay the Settlement Sum in disregard of the Four Cheques and so long as the Settlement Sum was paid in full at its own pace and in its convenience, the plaintiff’s claim should be dismissed. On the other hand, the plaintiff is left with no remedy for any lateness in payment on the part of the defendant. This cannot be right for obvious reasons.

70.The second ground concerns the construction of paragraph 5 of the Order. Mr Wong argues that the plaintiff can only have judgment in the whole sum of HK$901,209.94 when the defendant fails to pay any part of the Settlement Sum AND to honour the Four Cheques. The conjunction “or” instead of “and” was used in paragraph 5. Mr Wong argues that the word “or” in paragraph 5 should be construed to mean “and”. He goes on to advocate the construction that only the combination of the two events that (1) any of the cheques is dishonoured AND (2) the defendant fails to pay that part of the Settlement Sum under the relevant cheque entitles the plaintiff to judgment in the whole sum of HK$901,209.94.

71.In the present case, Mr Wong argues that since the defendant was able to make up for the dishonour of the 3^rd Cheque by the Replacement Cheque, the plaintiff cannot be entitled to judgment pursuant to paragraph 5 of the Order. He lastly argues that time is not of the essence in the defendant’s payment obligation under the Order.

72.No doubt the defendant would welcome such a latitude in the performance of its payment obligation under the Order. Yet, it is plain that this was not the bargain the parties struck. I cannot accept that, for the reasons given above, when the Order is to be interpreted as a whole, the defendant can have any payment options other than honouring the Four Cheques on their respective due dates to pay off the Settlement Sum. I fail to see any merit in the second ground.

73.Lastly, for completeness, I should mention that Ms Tjia in her closing submissions asks me to consider the history of this litigation, which shows how the defendant had evaded its liability until the Order was made. Mr Wong duly raises objection to this course. Certainly it is inappropriate for me to take such matters into account.

Conclusions and Orders

74.By reason of my finding that the Extension gave rise to a promissory estoppel, I order that the plaintiff’s Summons be dismissed.

75.I find the present application to be totally opportunistic and unmeritorious. It should not have been made at all. Worse still, the plaintiff saw fit to put in misleading evidence by way of affirmations and to adduce incredible viva voce evidence to support this misconceived application. The conduct of the plaintiff is lamentable. I make an order nisi that costs of this application be paid by the plaintiff to the defendant on an indemnity basis, to be taxed if not agreed, with certificate for counsel.  

Miss Josephine Tjia, instructed by Messrs Stephen Lo & P.Y. Tse for the Plaintiff

Mr Simon Wong, instructed by Messrs Christopher K.W. Wong & Co. for the Defendant