CHINLUCK PROPERTIES LTD v. CASIL CLEARING LTD

CHINLUCK PROPERTIES LTD v. CASIL CLEARING LTD

The judge held that although Casil breached the Loan Agreement by failing to advance the full sum, the decisive cause of the Project's failure was the unexpected Asian Financial Crisis and subsequent market collapse which intervened and broke the chain of causation; therefore Chinluck failed to prove causation for loss of profits and is entitled only to nominal damages (HK$100); Casil is entitled to judgment for sums due under the Loan Agreement and against the guarantor, with set-off of the nominal sum.

Citation
CHINLUCK PROPERTIES LTD v. CASIL CLEARING LTD
Parties
Plaintiff (original Action); 1st Defendant (counterclaim): Chinluck Properties Limited; Defendant (original Action); Plaintiff (counterclaim): Casil Clearing Limited; 2nd Defendant (counterclaim): Cheng Zhen Shu
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
20 December 2006
Case Number
HCA11008/1997
Procedural Posture
Civil Contract (loan Agreement, Mortgage, Guarantee) / Judgment (assessment of Damages) Delivered 20 December 2006
Outcome
Judgment for Casil Clearing Limited for amounts due under the Loan Agreement and Guarantee; Chinluck Properties Limited awarded nominal damages of HK$100 which may be set off against amounts due; same nominal sum as judgment against Cheng Zhen Shu under the guarantee; costs awarded to Casil on the counterclaim;...
Legal Topics
Breach of Contract, Remoteness of Damage, Causation, Assessment of Damages Date, Event of Default, Nominal Damages, Set Off, Costs
Source Language
EN
Contract Property Mortgage Guarantee Damages Breach of Contract Remoteness of Damage Causation +5 more

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Parties

Chinluck Properties Limited

Plaintiff (original Action); 1st Defendant (counterclaim)

Casil Clearing Limited

Defendant (original Action); Plaintiff (counterclaim)

Cheng Zhen Shu

2nd Defendant (counterclaim)

Procedural Posture

Civil Contract (loan Agreement, Mortgage, Guarantee) / Judgment (assessment of Damages) Delivered 20 December 2006

Legal Issues

  1. 1 Whether failure by lender to advance full loan caused claimant's loss of profits from development project
  2. 2 Whether claimed losses were too remote under Hadley v Baxendale
  3. 3 Appropriate date and manner for assessment of damages given intervening events (Asian Financial Crisis)

Ratio Decidendi

The judge held that although Casil breached the Loan Agreement by failing to advance the full sum, the decisive cause of the Project's failure was the unexpected Asian Financial Crisis and subsequent market collapse which intervened and broke the chain of causation; therefore Chinluck failed to prove causation for loss of profits and is entitled only to nominal damages (HK$100); Casil is entitled to judgment for sums due under the Loan Agreement and against the guarantor, with set-off of the nominal sum.

Court Disposition

Judgment for Casil Clearing Limited for amounts due under the Loan Agreement and Guarantee; Chinluck Properties Limited awarded nominal damages of HK$100 which may be set off against amounts due; same nominal sum as judgment against Cheng Zhen Shu under the guarantee; costs awarded to Casil on the counterclaim;...

Orders

  • Judgment for Casil Clearing Limited for principal and outstanding interest under the Loan Agreement and mortgage to be calculated and entered
  • Nominal damages of HK$100 awarded to Chinluck Properties Limited, to be set off against the amount due to Casil