ASG BROKERAGE LTD AND ANOTHER v. LAI CHEUK KWAN ARTHUR

ASG BROKERAGE LTD AND ANOTHER v. LAI CHEUK KWAN ARTHUR

Court found ASG Finance had no entitlement to recover under the guarantees; Bowen guarantee was in existence by June 2000 and was supported by consideration and enforceable against Mr Lai for HK$2,000,000; Chan guarantee signed about 22 November 2000 but no new or continued credit was granted thereafter so it lacked consideration and was unenforceable; Disengagement Agreement did not release ASG Brokerage and rectification/warranty claims failed; judgment entered for ASG Brokerage for HK$2,000,000 with contractual interest and costs ordered as specified.

Citation
ASG BROKERAGE LTD AND ANOTHER v. LAI CHEUK KWAN ARTHUR
Parties
1st Plaintiff (original Action); 1st Defendant by Counterclaim: ASG Brokerage Limited; 2nd Plaintiff (original Action); 2nd Defendant by Counterclaim: ASG Finance Limited; Defendant (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
HCA3384/2001
Procedural Posture
Consolidated Civil Actions for Recovery Under Guarantees / Counterclaims for Rectification and Declarations / Judgment at First Instance (court of First Instance)
Outcome
Judgment for ASG Brokerage Limited on Bowen guarantee for HK$2,000,000; ASG Finance's claims dismissed; ASG Brokerage's claim on Chan guarantee dismissed; all counterclaims by Mr Lai dismissed.
Legal Topics
Enforceability of Guarantees, Past Consideration, Date of Execution of Instrument, Rectification of Written Agreement, Release/waiver of Liabilities, Contractual Indemnity for Costs, Interest on Contractual Debt
Source Language
EN
Contract Law Guarantees Consideration Equity (rectification) Agency and Capacity Civil Procedure (costs) Enforceability of Guarantees Past Consideration +5 more

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Parties

ASG Brokerage Limited

1st Plaintiff (original Action); 1st Defendant by Counterclaim

ASG Finance Limited

2nd Plaintiff (original Action); 2nd Defendant by Counterclaim

Lai Cheuk Kwan Arthur

Defendant (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

Consolidated Civil Actions for Recovery Under Guarantees / Counterclaims for Rectification and Declarations / Judgment at First Instance (court of First Instance)

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 ASG Finance had standing to recover under the guarantees

Ratio Decidendi

Court found ASG Finance had no entitlement to recover under the guarantees; Bowen guarantee was in existence by June 2000 and was supported by consideration and enforceable against Mr Lai for HK$2,000,000; Chan guarantee signed about 22 November 2000 but no new or continued credit was granted thereafter so it lacked consideration and was unenforceable; Disengagement Agreement did not release ASG Brokerage and rectification/warranty claims failed; judgment entered for ASG Brokerage for HK$2,000,000 with contractual interest and costs ordered as specified.

Court Disposition

Judgment for ASG Brokerage Limited on Bowen guarantee for HK$2,000,000; ASG Finance's claims dismissed; ASG Brokerage's claim on Chan guarantee dismissed; all counterclaims by Mr Lai dismissed.

Orders

  • Judgment for ASG Brokerage Limited in HCA 3384/2001 for HK$2,000,000 (principal)
  • Interest on HK$2,000,000 at 3% above HSBC prime from 30 May 2001 until judgment