SEIKOSHA CO. LTD. and Another v. IDS (CHINA) LTD. and Another

SEIKOSHA CO. LTD. and Another v. IDS (CHINA) LTD. and Another

The court held that the defendants advanced matters (illegality, duress, set-off) that were not frivolous and were reasonably capable of belief; therefore summary judgment could not be granted and leave to defend must be given, but because the defences were shadowy the leave should be conditional on payment into court of the full sum claimed within 28 days; failure to pay would permit plaintiffs to enter final judgment with interest and costs.

Citation
SEIKOSHA CO. LTD. and Another v. IDS (CHINA) LTD. and Another
Parties
1st Plaintiff: SEIKOSHA CO., LTD.; 2nd Plaintiff: SEIKO PRECISION INC.; 1st Defendant: IDS (CHINA) LTD.; 2nd Defendant: DAVID HAUSJAH
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
23 May 1997
Case Number
HCA1652/1996
Procedural Posture
Summary Judgment Application / Application for Summary Judgment Under O.14 (pre Trial)
Outcome
Summary judgment refused; conditional leave to defend granted subject to payment into court of the full sum claimed within 28 days.
Legal Topics
Summary Judgment, Illegality (alleged Foreign Law Breach/tax Avoidance), Economic Duress, Set Off and Counterclaim, Guarantor's Rights, Conditional Leave to Defend, Enforceability of Contracts
Source Language
EN
Contract Commercial Law Civil Procedure Equity (duress) Agency/distribution Guarantee and Suretyship Summary Judgment Illegality (alleged Foreign Law Breach/tax Avoidance) +5 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 7 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

SEIKOSHA CO., LTD.

1st Plaintiff

SEIKO PRECISION INC.

2nd Plaintiff

IDS (CHINA) LTD.

1st Defendant

DAVID HAUSJAH

2nd Defendant

Procedural Posture

Summary Judgment Application / Application for Summary Judgment Under O.14 (pre Trial)

Legal Issues

  1. 1 Whether the underlying contracts and the June 1995 agreement are unenforceable for illegality (alleged scheme to avoid Chinese import duties)
  2. 2 Whether the June 1995 agreement was procured by economic duress (threat to withhold spare parts) and thus voidable
  3. 3 Whether the defendants' allegation of defective goods gives rise to a bona fide set-off/counterclaim sufficient to defeat summary judgment

Ratio Decidendi

The court held that the defendants advanced matters (illegality, duress, set-off) that were not frivolous and were reasonably capable of belief; therefore summary judgment could not be granted and leave to defend must be given, but because the defences were shadowy the leave should be conditional on payment into court of the full sum claimed within 28 days; failure to pay would permit plaintiffs to enter final judgment with interest and costs.

Court Disposition

Summary judgment refused; conditional leave to defend granted subject to payment into court of the full sum claimed within 28 days.

Orders

  • Unless within 28 days the total sum of HK$36,747,990 is paid into court by either defendant or jointly, plaintiffs may enter final judgment against the defendants for the amount endorsed on the writ with interest at prime plus one from date of writ to judgment and thereafter at judgment rate and costs
  • Costs of the application to be costs in the cause