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Tse Chung v Lee Yau Chu

International Law Reports Cited in Precedent Map Related
Vincent
Docket NumberCase No. 200
Date18 December 1951
CourtSupreme Court (Hong Kong)
Hong Kong, Supreme Court.

(Gould J.).

Case No. 200
Tse Chung
and
Lee Yau Chu.

Belligerent Occupation — Legislative Powers of Occupant — Currency Legislation — Decrees Inconsistent with the Law of the Land.

The Facts.—This case arose out of a contract for the sale of some property during the Japanese occupation of Hong Kong. A deposit of $30,000 was paid. It was provided that should the vendor not complete the contract he should be entitled to discharge his liability by paying the sum of $60,000. In 1943 the Japanese Governor of Hong Kong issued an Order under which transactions in Hong Kong dollars were declared to be illegal except under permit. In 1945 the vendor, in pursuance of an offer previously made, paid into Court the sum of 15,000 Japanese Yen for the purpose of discharging his liability—this, it was alleged, being the equivalent of the sum of $60,000. The purchasers refused to accept the payment. The question which is relevant for the purpose of the present report was whether the vendor could rely on the provisions of Article 494 of the Japanese Civil Code the effect of which, in the present case, was that as the result of the payment and a declaration of trust made thereunder, the debt was deemed to have been cleared.

Held: for the plaintiffs. The Court said:

“I am of the opinion that the bringing into force of the Article was beyond the proper scope of the legislative powers of the Japanese administration. This subject is dealt with in McNair's Legal Effects of War (3rd Edition) at 337:

The writer goes on to say that it is difficult to find British judicial authority for this proposition, and after quoting the opinions of writers on International Law, he continues (at page 338):

“The Article in question may be a useful and innocuous prevision of Japanese peace-time civil law. It is very different, however, when it is introduced into occupied territory with its peculiar problems and its difficulties of competing currencies. Though there was by decree at this time only one legal currency, Hong Kong...

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