CHING LEE ENGINEERING LTD v. EMT CONSTRUCTION CO LTD AND ANOTHER

CHING LEE ENGINEERING LTD v. EMT CONSTRUCTION CO LTD AND ANOTHER

Set-off (both legal and equitable) constituted an arguable defence to the plaintiff's claim for HK$1,000,000 and the guarantor could rely on that defence; consequently summary judgment was inappropriate and the Order 14 application is dismissed; costs awarded to defendants on an indemnity basis.

Citation
[2021] HKCFI 1517
Parties
Plaintiff: CHING LEE ENGINEERING LIMITED; 1st Defendant: EMT CONSTRUCTION COMPANY LIMITED; 2nd Defendant: KWAN KWONG CHEUNG EVANS
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
27 May 2021
Case Number
HCA1488/2019
Procedural Posture
Civil Summary Judgment in Contractual Dispute (loan, Guarantee, Set Off) / Appeal (de Novo Rehearing Under Order 58)
Outcome
Plaintiff's appeal dismissed; Order 14 application dismissed; defendants' cross-appeal on costs allowed.
Legal Topics
Summary Judgment (order 14), Set Off (legal and Equitable), Guarantee (principal Debtor Clause), Duress and Undue Influence, Indemnity Costs
Source Language
EN
Contract Law Civil Procedure Equity Costs Law Summary Judgment (order 14) Set Off (legal and Equitable) Guarantee (principal Debtor Clause) Duress and Undue Influence +1 more

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Parties

CHING LEE ENGINEERING LIMITED

Plaintiff

EMT CONSTRUCTION COMPANY LIMITED

1st Defendant

KWAN KWONG CHEUNG EVANS

2nd Defendant

Procedural Posture

Civil Summary Judgment in Contractual Dispute (loan, Guarantee, Set Off) / Appeal (de Novo Rehearing Under Order 58)

Legal Issues

  1. 1 Whether summary judgment (Order 14) should be granted for HK$1,000,000 under the Loan Agreement and Deed of Guarantee
  2. 2 Whether the 1st defendant has an arguable legal set-off (mutual liquidated debts) against the HK$1,000,000 claim
  3. 3 Whether equitable set-off arises because the cross-claims are connected to the same subject matter and it would be unjust to enforce the loan in isolation

Ratio Decidendi

Set-off (both legal and equitable) constituted an arguable defence to the plaintiff's claim for HK$1,000,000 and the guarantor could rely on that defence; consequently summary judgment was inappropriate and the Order 14 application is dismissed; costs awarded to defendants on an indemnity basis.

Court Disposition

Plaintiff's appeal dismissed; Order 14 application dismissed; defendants' cross-appeal on costs allowed.

Orders

  • Appeal dismissed
  • Order 14 application dismissed (replacing Master's order granting unconditional leave to defend)