ASG BROKERAGE LTD AND ANOTHER v. LAI CHEUK KWAN ARTHUR

ASG BROKERAGE LTD AND ANOTHER v. LAI CHEUK KWAN ARTHUR

The Bowen Guarantee was executed by June 2000 and was supported by consideration because Bowen was permitted to continue trading on margin thereafter; the Chan Guarantee (signed about 22 November 2000) was unenforceable for want of consideration because no credit was granted or continued after signing; the Disengagement Agreement (16 January 2001) did not release ASG Brokerage because ASG Brokerage was not a party and no oral agreement or warranty by Mr Hung discharged Mr Lai; ASG Finance had no entitlement to recover under the guarantees.

Citation
ASG BROKERAGE LTD AND ANOTHER v. LAI CHEUK KWAN ARTHUR
Parties
1st Plaintiff; 1st Defendant by Counterclaim: ASG Brokerage Limited; 2nd Plaintiff; 2nd Defendant by Counterclaim: ASG Finance Limited; Defendant by Original Action; Plaintiff by Counterclaim: Lai Cheuk Kwan Arthur; 3rd Defendant by Counterclaim: Asia Securities Global Limited; 4th Defendant by Counterclaim: ASG Futures Limited; 5th Defendant by Counterclaim: Arch Asset Management Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
10 December 2004
Case Number
HCA762/2002
Procedural Posture
Civil Contract (guarantees) / Trial Judgment
Outcome
Judgment for ASG Brokerage against Lai Cheuk Kwan Arthur for HKD 2,000,000; ASG Finance's claims dismissed; claim under Chan Guarantee dismissed; counterclaims dismissed; interest and costs orders made as set out.
Legal Topics
Consideration, Enforceability of Guarantees, Rectification of Written Agreement, Release/waiver, Warranty/representation, Costs on Indemnity Basis, Interest
Source Language
EN
Contract Guarantees Equity (rectification) Agency/authority Civil Procedure (costs) Consideration Enforceability of Guarantees Rectification of Written Agreement +4 more

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Parties

ASG Brokerage Limited

1st Plaintiff; 1st Defendant by Counterclaim

ASG Finance Limited

2nd Plaintiff; 2nd Defendant by Counterclaim

Lai Cheuk Kwan Arthur

Defendant by Original Action; Plaintiff by Counterclaim

Asia Securities Global Limited

3rd Defendant by Counterclaim

ASG Futures Limited

4th Defendant by Counterclaim

Arch Asset Management Limited

5th Defendant by Counterclaim

Procedural Posture

Civil Contract (guarantees) / Trial Judgment

Legal Issues

  1. 1 Whether the Bowen and Chan guarantees were supported by consideration
  2. 2 When the Bowen Guarantee was signed
  3. 3 Whether the Chan Guarantee was supported by consideration despite no post-guarantee accommodation

Ratio Decidendi

The Bowen Guarantee was executed by June 2000 and was supported by consideration because Bowen was permitted to continue trading on margin thereafter; the Chan Guarantee (signed about 22 November 2000) was unenforceable for want of consideration because no credit was granted or continued after signing; the Disengagement Agreement (16 January 2001) did not release ASG Brokerage because ASG Brokerage was not a party and no oral agreement or warranty by Mr Hung discharged Mr Lai; ASG Finance had no entitlement to recover under the guarantees.

Court Disposition

Judgment for ASG Brokerage against Lai Cheuk Kwan Arthur for HKD 2,000,000; ASG Finance's claims dismissed; claim under Chan Guarantee dismissed; counterclaims dismissed; interest and costs orders made as set out.

Orders

  • Judgment entered for ASG Brokerage against Lai Cheuk Kwan Arthur for HK$2,000,000
  • ASG Finance's claims dismissed