GITANES ENGINEERING CO LTD v. COWINDA LTD

HCA011472A/1982

IN THE HIGH COURT OF JUSTICE

NO.11472 OF 1982

BETWEEN:-

GITANES ENGINEERING COMPANY LIMITED

Plaintiff

– and –

COWINDA LIMITED

Defendant

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Coram: The Honourable Mr. Justice Jones in Chambers

Date of Hearing: 7th December 1983

Date of delivery of judgment: 7th December 1983

Mr. Edward Chan (Poon & Sum), for Plaintiff

Mr. Alfred Law (Shea & Co.) for Defendant

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JUDGMENT

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1. This is an appeal against a decision of Master Barrington-Jones made on the 10th November 1983 when he dismissed the plaintiff’ssummons for security for costs.

2. The plaintiff’s claim arises as a result of an oral agreement with the defendant entered into on the 15th January 1982 for the transportationof mud and for the plaintiff to purchase pell mell rubble from the defendant. The agreement was varied with regard to price on the12th February 1982. After amounts owed to the defendant have been set off together with the sum of $100,000 which the defendanthas paid on account, the plaintiff’s claim amounts to $545,755.45.

3. The defendant admits the agreement with the plaintiff, but contends that the contract price was different. The defendant. also disputesthe plaintiff’s allegation that the sum of $100,000 was paid on account, but that it was a deposit to secure additional servicesto be rendered by the plaintiff to Vibro (H.K.) Ltd. at the defendant’s request. The defendant counterclaims for repayment of thedeposit of $100, 000 and for $503,509 for the purchase of mud and rubble.

4. There is no doubt that the defendant’s financial situation is weak whilst the affidavit of Mr. Chan Man Jim, one of the defendant’sdirectors has not been wholly frank. However, in order to succeed the plaintiff must show that the defence goes beyond merely defensiveproceedings. Mr . Chan cited Washoe Mining Company v Ferguson (1881) Vol. II Equity cases 371 where at page 376 Sir W. Page Wood, V.C. said:

“As to the defence, that this is a cross bill, it appears that the state of the case is this – The Plaintiff in theoriginal suit says to the Defendant in that suit (in which the company are also Defendants): “These shares are mine, not yours.”Whereupon the company file a bill against the original Plaintiff and the original Defendant, and say: “These shares belong neitherto one nor the other of you; they are ours.” I apprehend that would be s complete defence to the bill. It is like the case of a billfor specific performance, where the Defendant says the contract was in different terms from those in which the Plaintiff describesit to have been, and then files a bill to have his alleged agreement fulfilled. That would have been a very complete defence to theoriginal bill, if pleaded by way of answer; but the so-called cross bill asks for performance of an entirely different agreement.

The principle of not malting the Plaintiff in a cross suit give security is, that the cross bill is a meredefence to the original bill and this bill is more.”

Upon the facts as pleaded it this case I am unable to agree that a fresh transaction or that now issues have been set up in the defenceor the counterclaim. What essentially is in dispute are the exact terms of the agreement with regard to price. The defendant hasnot gone outside its right to defend these proceedings. Accordingly the plaintiff is not entitled to security.

5. The appeal is therefore dismissed with costs to the defendant.

( B.L. ones)

Judge of the High Court

Representation:

Mr. Edward Chan (Poon & Sum), for Plaintiff

Mr. Alfred Law (Shea & Co.) for Defendant