CHINLUCK PROPERTIES LTD v. CASIL CLEARING LTD

CHINLUCK PROPERTIES LTD v. CASIL CLEARING LTD

On construction of the Loan Agreement and Mortgage the contractual 15% rate applied only for the agreed term and until the date of default (4 December 1997); the documents contained no express provision for default interest or that the contractual rate continued after demand, so from 4 December 1997 until judgment interest is awarded at prime plus 1%; costs are allocated so that Chinluck and Mr Shu pay 55% of the costs of the liability trial to Casil (taxed party and party), Casil is entitled to costs of the damages trial in full, and Chinluck and Mr Shu recover costs of the interest argument from Casil.

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
14 June 2007
Case Number
HCA11008/1997
Procedural Posture
Contract (loan and Mortgage) With Counterclaim for Sums Advanced / Judgment Following Trial on Liability (june 2004) and Damages (oct 2006); Final Judgment Issued 14 June 2007
Outcome
Judgment for Casil Clearing Limited on its counterclaim for the sums advanced; Chinluck awarded nominal damages of $100 on its claim; interest and costs orders as detailed
Legal Topics
Breach of Contract, Set Off/counterclaim, Default Interest, Construction of Loan and Mortgage Documents, Costs Allocation, Mortgagee's Rights
Source Language
EN
Contract Law Property/mortgage Law Civil Procedure Remedies (interest and Costs) Breach of Contract Set Off/counterclaim Default Interest Construction of Loan and Mortgage Documents +2 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

Contract (loan and Mortgage) With Counterclaim for Sums Advanced / Judgment Following Trial on Liability (june 2004) and Damages (oct 2006); Final Judgment Issued 14 June 2007

Legal Issues

  1. 1 Whether plaintiff establishing liability but recovering nominal damages should recover costs and in what proportion given defendant's successful counterclaim
  2. 2 Whether contractual interest rate (15% p.a.) continues to apply after default or whether post-default/pre-judgment interest should be at statutory/commercial rate
  3. 3 Whether a default interest term should be implied into the Loan Agreement/Mortgage

Ratio Decidendi

On construction of the Loan Agreement and Mortgage the contractual 15% rate applied only for the agreed term and until the date of default (4 December 1997); the documents contained no express provision for default interest or that the contractual rate continued after demand, so from 4 December 1997 until judgment interest is awarded at prime plus 1%; costs are allocated so that Chinluck and Mr Shu pay 55% of the costs of the liability trial to Casil (taxed party and party), Casil is entitled to costs of the damages trial in full, and Chinluck and Mr Shu recover costs of the interest argument from Casil.

Court Disposition

Judgment for Casil Clearing Limited on its counterclaim for the sums advanced; Chinluck awarded nominal damages of $100 on its claim; interest and costs orders as detailed

Orders

  • Judgment for Casil Clearing Limited against Chinluck Properties Limited and Cheng Zhen Shu for principal sum of 251,516,821.65 (HKD) with interest
  • Chinluck Properties Limited awarded $100 nominal damages for breach of contract