CHEVALIER (E&M CONTRACTING)LIMITED v. ROTEGEAR DEVELOPMENT LIMITED AND OTHERS

CHEVALIER (E&M CONTRACTING)LIMITED v. ROTEGEAR DEVELOPMENT LIMITED AND OTHERS

The appeal was allowed and the summary judgment against the 5th Defendant was set aside because there were triable issues: it was arguable that the Agreement was not a promissory note (and thus did not automatically preclude set-off), it was arguable that the 1st Defendant had not unequivocally waived its right of set-off by the Agreement's wording, and it was arguable that clause 1 of the guarantee (written request) was a condition precedent to enforcement rather than clause 2 creating a primary obligation without demand. Those issues required trial; unconditional leave to defend was granted.

Citation
CHEVALIER (E&M CONTRACTING)LIMITED v. ROTEGEAR DEVELOPMENT LIMITED AND OTHERS
Parties
Plaintiff: CHEVALIER (E&M CONTRACTING) LIMITED; 1st Defendant: ROTEGEAR DEVELOPMENT LIMITED; 2nd Defendant: NG FUK LUNG; 3rd Defendant: NG FUK HING, TOMMY; 4th Defendant: NGAI MAN FAI; 5th Defendant: WONG YAN WAI, HUGH
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
5 July 1994
Case Number
HCA1717/1990
Procedural Posture
Civil Appeal / Order 14 Appeal Allowed; Summary Judgment Set Aside and Matter Remitted to Trial; Leave to Defend Granted
Outcome
Appeal allowed; judgment of the master dated 3 June 1994 set aside; matter remitted to trial; 5th Defendant granted unconditional leave to defend; order nisi for costs to 5th Defendant
Legal Topics
Promissory Note, Personal Guarantee, Right of Set Off, Contract Interpretation, Summary Judgment (order 14)
Source Language
EN
Contract Law Guarantee Law Negotiable Instruments Set Off Civil Procedure Promissory Note Personal Guarantee Right of Set Off +2 more

Case Brief

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Parties

CHEVALIER (E&M CONTRACTING) LIMITED

Plaintiff

ROTEGEAR DEVELOPMENT LIMITED

1st Defendant

NG FUK LUNG

2nd Defendant

NG FUK HING, TOMMY

3rd Defendant

NGAI MAN FAI

4th Defendant

WONG YAN WAI, HUGH

5th Defendant

Procedural Posture

Civil Appeal / Order 14 Appeal Allowed; Summary Judgment Set Aside and Matter Remitted to Trial; Leave to Defend Granted

Legal Issues

  1. 1 Whether the Agreement constituted a promissory note under section 89 of the Bills of Exchange Ordinance
  2. 2 Whether the guarantor (5th Defendant) can rely on the principal debtor's right of set-off against the guarantee
  3. 3 Whether a written request/demand was a condition precedent to enforcement of the personal guarantee

Ratio Decidendi

The appeal was allowed and the summary judgment against the 5th Defendant was set aside because there were triable issues: it was arguable that the Agreement was not a promissory note (and thus did not automatically preclude set-off), it was arguable that the 1st Defendant had not unequivocally waived its right of set-off by the Agreement's wording, and it was arguable that clause 1 of the guarantee (written request) was a condition precedent to enforcement rather than clause 2 creating a primary obligation without demand. Those issues required trial; unconditional leave to defend was granted.

Court Disposition

Appeal allowed; judgment of the master dated 3 June 1994 set aside; matter remitted to trial; 5th Defendant granted unconditional leave to defend; order nisi for costs to 5th Defendant

Orders

  • Set aside the judgment given by the master on 3 June 1994
  • Remit the matter to trial on the issues identified