CHAN WAI KUEN, GARY v. FINE MERIT LTD AND OTHERS

CHAN WAI KUEN, GARY v. FINE MERIT LTD AND OTHERS

The Master’s refusal was set aside and an interim payment of HK$1,500,000 was ordered because the defence to the cheque claim was found to be shadowy rather than prima facie strong; cheques are enforceable separately from disputes over underlying transactions; the court exercised its discretion to reduce the sum having regard to disputed payments, an estimated likely recovery, and the unverified potential assignment to a third party without the requisite notice under s.9 Cap.23.

Citation
[2020] HKCFI 1951
Parties
Plaintiff (original Action): CHAN WAI KUEN, GARY; 1st Defendant (original Action) and 1st Plaintiff (counterclaim): FINE MERIT LIMITED; 2nd Defendant (original Action) and 2nd Plaintiff (counterclaim): CHAN NGAI LIK; 2nd Defendant (counterclaim): LAM WAI JUN; 3rd Defendant (counterclaim): LAW UE MING
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
20 August 2020
Case Number
HCA944/2019
Procedural Posture
Civil Commercial Dispute Interim Payment on Dishonoured Cheques / Appeal From Master's Refusal of Interim Payment (interlocutory Appeal)
Outcome
Appeal allowed in part; Master's order dismissing interim payment set aside and substituted
Legal Topics
Interim Payment, Cheque Dishonour, Mareva Injunction, Forgery Allegations, Assignment Notice S.9 Cap.23, Summary Judgment, Parol Evidence Rule
Source Language
EN
Civil Commercial Banking Contract Equity Interim Payment Cheque Dishonour Mareva Injunction +4 more

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Parties

CHAN WAI KUEN, GARY

Plaintiff (original Action)

FINE MERIT LIMITED

1st Defendant (original Action) and 1st Plaintiff (counterclaim)

CHAN NGAI LIK

2nd Defendant (original Action) and 2nd Plaintiff (counterclaim)

LAM WAI JUN

2nd Defendant (counterclaim)

LAW UE MING

3rd Defendant (counterclaim)

Procedural Posture

Civil Commercial Dispute Interim Payment on Dishonoured Cheques / Appeal From Master's Refusal of Interim Payment (interlocutory Appeal)

Legal Issues

  1. 1 Whether interim payment should be ordered based on two dishonoured cheques and Agreement No.11
  2. 2 Whether cheques operate as separate and distinct contracts irrespective of disputes in underlying transactions
  3. 3 Whether the defendant's defence (forgery, full repayment, cheques as collateral for creditors) is bona fide or shadowy

Ratio Decidendi

The Master’s refusal was set aside and an interim payment of HK$1,500,000 was ordered because the defence to the cheque claim was found to be shadowy rather than prima facie strong; cheques are enforceable separately from disputes over underlying transactions; the court exercised its discretion to reduce the sum having regard to disputed payments, an estimated likely recovery, and the unverified potential assignment to a third party without the requisite notice under s.9 Cap.23.

Court Disposition

Appeal allowed in part; Master's order dismissing interim payment set aside and substituted

Orders

  • The 1st Defendant to pay the Plaintiff HK$1,500,000 by way of interim payment within 28 days
  • Appeal against Master's decision to admit the 3rd Affirmation of Chan dismissed