HOVEN INTERNATIONAL LTD v. MASS RESOURCES DEVELOPMENT LTD AND ANOTHER

HOVEN INTERNATIONAL LTD v. MASS RESOURCES DEVELOPMENT LTD AND ANOTHER

The 1st Defendant's pleaded defence was not credible in light of contemporaneous documents and correspondence which acknowledged the seven-day loan term and enclosed post-dated cheques without qualification; extrinsic oral evidence cannot be used to vary the clear written terms (parol evidence rule); forbearance by the plaintiff to sue for the period before the cheque's date constituted sufficient consideration for the post-dated cheque; accordingly summary judgment entered for plaintiff against the 1st Defendant for $3,000,000 (and the court could have entered judgment against the 2nd Defendant but the plaintiff elected not to pursue it).

Citation
HOVEN INTERNATIONAL LTD v. MASS RESOURCES DEVELOPMENT LTD AND ANOTHER
Parties
Plaintiff: Hoven International Limited; 1st Defendant: Mass Resources Development Limited; 2nd Defendant: Jumbo Million Development Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
5 December 1996
Case Number
HCA415/1996
Procedural Posture
Civil Debt Action Summary Judgment Application / Hearing of Appeal From Master on Summary Judgment (high Court)
Outcome
Judgment entered for Plaintiff against the 1st Defendant for $3,000,000; court found the 2nd Defendant could also be liable but plaintiff elected to seek judgment only against the 1st Defendant
Legal Topics
Summary Judgment, Post Dated Cheque, Consideration, Parol Evidence Rule, Forbearance to Sue, Collateral Contract
Source Language
EN
Contract Debt Civil Procedure Evidence Summary Judgment Post Dated Cheque Consideration Parol Evidence Rule +2 more

Case Brief

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Parties

Hoven International Limited

Plaintiff

Mass Resources Development Limited

1st Defendant

Jumbo Million Development Limited

2nd Defendant

Procedural Posture

Civil Debt Action Summary Judgment Application / Hearing of Appeal From Master on Summary Judgment (high Court)

Legal Issues

  1. 1 Whether the 1st Defendant's defence that repayment was conditional on sale of properties is credible for purposes of summary judgment
  2. 2 Whether the post-dated cheque dated 31 December 1995 operated as payment or security and whether there was consideration for the 2nd Defendant's cheque
  3. 3 Whether extrinsic evidence can be used to vary the clear terms of the cheque or loan agreement

Ratio Decidendi

The 1st Defendant's pleaded defence was not credible in light of contemporaneous documents and correspondence which acknowledged the seven-day loan term and enclosed post-dated cheques without qualification; extrinsic oral evidence cannot be used to vary the clear written terms (parol evidence rule); forbearance by the plaintiff to sue for the period before the cheque's date constituted sufficient consideration for the post-dated cheque; accordingly summary judgment entered for plaintiff against the 1st Defendant for $3,000,000 (and the court could have entered judgment against the 2nd Defendant but the plaintiff elected not to pursue it).

Court Disposition

Judgment entered for Plaintiff against the 1st Defendant for $3,000,000; court found the 2nd Defendant could also be liable but plaintiff elected to seek judgment only against the 1st Defendant

Orders

  • Judgment for Plaintiff against Mass Resources Development Limited (1st Defendant) in the sum of HKD 3,000,000
  • No judgment entered against Jumbo Million Development Limited (2nd Defendant) at Plaintiff's election though Court held judgment could have been entered