Read the full judgment text of CACV 000141/1988 on BabelCite. This Court of Appeal judgment was delivered on 17 January 1989 before Hunter, J.A. and Power, J.A..
Commercial law – bills of exchange – dishonoured cheque – summary judgment under Order 14 – defence of conditional delivery under section 21 of the Bills of Exchange Ordinance – defence of total failure of consideration – defence of quantified partial failure of consideration – sale of angora rabbit hair graded by Italian sub-buyer – post-dated cheque for 30% balance of purchase price – whether oral conditions can be read into unconditional cheque – whether retention of goods without rejection defeats total failure of consideration – whether asserted 30% liquidated allowance constitutes quantified partial failure. Conditional delivery – the section is a limited defence permitting evidence that delivery was subject to a condition suspending the operation of the instrument; per Hunter JA, reading in oral conditions would convert the cheque from an unconditional order into a conditional and countermandable instrument and is inadmissible. Total failure of consideration – no rejection or assertion of right to reject; goods retained. Quantified partial failure – per Lord Wilberforce in Nova (Jersey) Knit v Spinnerei, between immediate parties a partial failure of consideration may be raised as a pro tanto defence only when the amount is ascertained and liquidated; Agra Bank v Leighton is the principal authority; Byles on Bills endorses the 'definite computation' test. The area of law is grey and ambiguous, and the asserted 30% liquidated allowance, while appearing like a dressed-up unliquidated damages claim, is at worst a shadowy arguable defence unsuitable for disposal under Order 14. Appeal allowed with conditional leave to defend on payment of the full sum into court within 7 days; costs of the court below not disturbed; costs of the appeal left to the discretion of the trial judge.
Legal issues: Conditional delivery of cheque under s.21 of the Bills of Exchange Ordinance · Total failure of consideration · Quantified partial failure of consideration as defence to a claim on a cheque
Outcome: Appeal allowed; conditional leave to defend granted, conditional on the full claim being brought into court within 7 days.
Cited by 1 case