News & Events

Dishonoured cheque: District Court dismisses appeal against refusal of summary judgment in dispute over a HK$1 million cheque’s purpose

In Luk Wai Ho v. Fang Yu (DCCJ4744/2019) [2021] HKDC 1345, the Plaintiff lent multiple loans to the Defendant. Later, the Defendant issued a HK$1 million cheque to the Plaintiff, but it bounced when the Plaintiff presented it for payment. According to the Defendant, the dishonoured cheque was not issued for the purpose of repayment, but merely as assurance that she would not flee before paying off the monies owed.

After applying unsuccessfully for summary judgment for HK$1 million before Master, the Plaintiff  appealed to the District Court. The learned Judge found that the Defendant put forward a credible defence and dismissed the appeal. Abigail Liu acted for the successful Defendant in resisting the appeal as well as the summary judgment application before Master.


The Defendant was heavily indebted and needed to borrow funds. In early February 2019, the Plaintiff started to make a series of loans to the Defendant.

According to the Defendant:

• At one point, before agreeing to lend further sums, the Plaintiff asked the Defendant to issue a cheque for HK$1 million (“the Cheque”) as assurance that she would not flee before repaying the previous loans.

• The Defendant issued the Cheque to him accordingly. Knowing that the Defendant did not have HK$1 million, the Plaintiff assured her that he would not bank in the Cheque.

• Afterwards, the Plaintiff continued to lend the Defendant money; the total amount of the loans came to HK$420,000. Between February and July 2019, the Plaintiff never asked the Defendant to repay him, nor did the Plaintiff present the Cheque for payment.

According to the Plaintiff, the parties’ relationship deteriorated after July 2019 when he declined to lend further monies to the Defendant.

In August 2019, the Plaintiff presented the Cheque for payment, but it bounced.

Application for summary judgment

The Plaintiff applied for summary judgment against the Defendant for the HK$1 million stated in the Cheque. The learned Master Jocelyn Leung dismissed his application, and granted the Defendant (represented by Abigail Liu) unconditional leave to defend and awarded her costs.

The Plaintiff appealed to the District Court against the Master’s decision.

Decision of the District Court

Despite the existence of an IOU in support of the Plaintiff’s case that the Defendant was indebted to the Plaintiff, Deputy District Judge Norman Nip SC agreed with Abigail Liu, Counsel for the Defendant, that the “defendant’s case is believable and not frivolous or practically moonshine”.

The main defence run in the appeal and accepted by the Court as arguable and believable is that the Cheque’s purpose was not to transfer funds. Rather, it was issued to assure the Plaintiff that the Defendant would not flee without repaying the money she owes him, as well as demonstrate her sincerity in continuing the borrower and lender relationship – a special purpose which falls within section 21(2)(b) of the Bills of Exchange Ordinance, Cap.  19 (“BOEO“).

The  learned Judge dismissed the Plaintiff’s appeal, holding that the Defendant has demonstrated an arguable and believable defence under s21(2)(b) BOEO, and that the purpose of the Cheque is a matter which should be resolved at trial. Costs were awarded to the Defendant.


Abigail Liu, acted for the successful Defendant in resisting the Plaintiff’s summary judgment application before Master, and in his appeal to the District Court.

Abigail Liu


Abigail joined Chambers in 2019 and is developing a broad civil and criminal practice, with experience in various areas such as family and matrimonial matters, public law, land, tort, personal injuries, employee compensation, commercial litigation, trusts and probate.

She successfully resisted a claim for allegedly due loan repayments in Yuan Yuqin v. Cheung Hiu Yan, Fion and Another [2020] HKCFI 1419 (with Mr. Simon Wong), and defended an election petition in 董健莉 對 吳定霖及另二人 [2021] HKCFI 514 (with Mr. Jeffrey Tam) where the Court interpreted section 51 of the District Councils Ordinance (Cap. 547) for the very first time.

Visit Abigail’s profile for more details on her experience.

Disclaimer: This article does not constitute legal advice and seeks to set out the general principles of the law. Detailed advice should therefore be sought from a legal professional relating to the individual merits and facts of a particular case. The photograph which appears in this article is included for decorative purposes only and should not be taken as a depiction of any matter to which the case is related.