Leung Kin v Kam Wah Film Co (A Firm) And Others

CourtDistrict Court (Hong Kong)
Judgment Date28 October 1968
Subject MatterCivil Action
Judgement NumberDCCJ4030/1968





Action No. 4030 of 1968


LEUNG Kin Plaintiff


Kam Wah Film Co. (a firm) 1st Defendants
Acme Studio Photo Service (a firm) 2nd Defendants
Ho Bor 3rd Defendants


Coram: Judge Collier.

Date of Judgment: 28 October 1968




1. By the endorsement upon the writ, the plaintiff claims a sum of money, payable by the defendants to the plaintiff, as money lent, evidenced by a note in writing made and signed by the defendants. There was also claimed the same amount as an account stated, but this was abandoned during argument by the plaintiff's solicitor.

2. When the action was called on for trial, the defendants' solicitor immediately applied for an order to strike out the action upon the ground that the note in writing, pleaded in the writ, amounted to a promissory note within the meaning of section 3 of the Stamp Ordinance and that, being unstamped, it was caught by section 24 of that Ordinance and that no action could arise from it: it was not merely a note evidencing a lending transaction, but was given as security for the loan. The point was not pleaded by way of defence or taken earlier as the defendants' solicitor had had no opportunity of seeing the "note" until that morning just before the Court sat.

3. The definition "promissory note" reads as follows:

"promissory note" includes every instrument (except a bank note) containing a promise to pay any sum of money, and a note promising the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen, is to be deemed a promissory note for that sum of money."

4. Section 24(1) reads as follows:

"Every person who issues, indorses, transfers, negotiates, presents for payment or pays any bill of exchange or promissory note chargeable with duty and not being duly stamped shall be deemed to commit an offence against this Ordinance, and the person who takes or receives from any other person any such bill or note either in payment or as a security, or by purchase or otherwise, shall not be entitled to recover thereon or to make the same available for any purpose whatever:

Provided that if any bill of exchange payable on demand or at sight or on presentation is presented for payment unstamped, the person to whom it is presented may affix thereto adhesive stamps to the value of the amount of duty chargeable on that instrument under head 11(1) in the Schedule and cancel the same as if he had been the drawer of the bill, and may thereupon pay the sum in the bill mentioned and charge the duty in account against the person by whom the bill was drawn or deduct the duty from the said sum, and the bill is, so far as respects the duty, to be deemed valid and available."

5. In reply the plaintiff's solicitor said he was entitled, nonetheless, to sue upon the fact of money lent, evidenced by the note in writing. He also said that the note was not given for any pre-existing debt, but was given as collateral security. He said the plaintiff sued upon the consideration and cited as an "authority", in support of that proposition, Chalmers on Bills of Exchange at pages 343 and 378, but did not cite any of the cases therein referred to.

6. Digressing for a moment, there is an unfortunate and unhelpful practice in these Courts, employed more by solicitors than Counsel, though some of these latter are by no means blameless, of citing text-books and sourcebooks as "authorities". There is, of course, no objection to adopting the views of text-book writers as the argument of Counsel or solicitors but the citing of those views as authoritative is wholly wrong. It is by no means unusual that the cases cited in support of views of text-book writers do not support those views, as indeed is the case where the views of the learned editors of Chalmers on Bills of Exchange are concerned. Illustrative of the danger of relying on text books is the following instance which I witnessed in the Court of Appeal: Megarry Q.C. (as he then was) was arguing a case under the Rent Acts and was challenged by the Court that his book on the subject regarded by many as authoritative said something entirely different from his argument before the Court. The reply from learned Counsel was that, from his work in preparing the case before the Court he had concluded that his exposition of the same point in his book was wrong and that it would be changed.

7. The passage in Chalmers at page 343 referred to by the plaintiff's solicitor is of no relevance to this matter as it does not deal with the question of unstamped notes and is of no interest in this case.

8. At page 373 of Chalmers there appears this bald statement:

"The holder of a bill or note which is void for want of a stamp may, nevertheless, bring an action on the consideration against a party to whom he gave the consideration ........"

and cites in support, Brown v. Watts (1808) 1 Taunton 353, and invites the reader to compare Sutton v. Toomer (1827) 108 E.R. 778; Plimley v. Westley (1835) 2 Bingham's New Cases 249 and Gomperty v. Bartlett (1853) 2 E. & B. 849. These cases, neither separately, nor collectively go far enough to support that proposition and I am satisfied that the broad proposition as stated in Chalmers is inaccurate.

9. Brown v. Watts was a case of an unstamped note being given as security for an antecedent debt, in respect of which an admission had been made before the unstamped note was given. It was held that the plaintiff was entitled to sue on the antecedent debt, evidenced by the admission, that is, upon the status quo before the note was given. This is a different set of facts from the unqualified...

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