GOOD PROCESS LTD v. GRAND CHEST LTD AND ANOTHER

GOOD PROCESS LTD v. GRAND CHEST LTD AND ANOTHER

The court held the 2nd defendant liable because the two letters of guarantee were continuing, entire guarantees valid until the lease expired under clause 4 and could not be unilaterally revoked; there was no credible evidence that the plaintiff agreed to set off arrears by taking chattels or licences; demands (oral communications and the formal solicitor's letter) satisfied the guarantee; therefore plaintiff was entitled to judgment for the calculated unpaid sum plus interest and costs.

Citation
GOOD PROCESS LTD v. GRAND CHEST LTD AND ANOTHER
Parties
Plaintiff: Good Process Limited; 1st Defendant: 1st Defendant (tenant); 2nd Defendant (guarantor): Leung Chi-hung
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
31 August 2005
Case Number
DCCJ448/2004
Procedural Posture
Landlord and Tenant; Guarantee; Debt Recovery / District Court Judgment (final)
Outcome
Judgment for the plaintiff against the 2nd defendant
Legal Topics
Surrender of Lease, Set Off, Revocation of Guarantee, Demand on Guarantor, Continuing Guarantee, Entire Vs Divisible Guarantee, Promissory Estoppel, Interest and Costs
Source Language
EN
Landlord and Tenant Guarantee Law Contract Equitable Estoppel Debt Recovery Surrender of Lease Set Off Revocation of Guarantee +5 more

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Parties

Good Process Limited

Plaintiff

1st Defendant (tenant)

1st Defendant

Leung Chi-hung

2nd Defendant (guarantor)

Procedural Posture

Landlord and Tenant; Guarantee; Debt Recovery / District Court Judgment (final)

Legal Issues

  1. 1 Whether the 2nd defendant is liable under the letters of guarantee
  2. 2 Whether the plaintiff agreed to accept surrender of chattels and transfer of licences as set-off for arrears
  3. 3 Whether the 2nd defendant validly revoked the guarantees by unilateral notice

Ratio Decidendi

The court held the 2nd defendant liable because the two letters of guarantee were continuing, entire guarantees valid until the lease expired under clause 4 and could not be unilaterally revoked; there was no credible evidence that the plaintiff agreed to set off arrears by taking chattels or licences; demands (oral communications and the formal solicitor's letter) satisfied the guarantee; therefore plaintiff was entitled to judgment for the calculated unpaid sum plus interest and costs.

Court Disposition

Judgment for the plaintiff against the 2nd defendant

Orders

  • Judgment for plaintiff in the sum of 669277 HKD
  • Interest at half judgment rate from 31 December 2002 to date of judgment and thereafter at judgment rate until full payment