GRANDRICH HOLIDINGS LTD v. CATHNESS INVESTMENTS LTD AND OTHERS

GRANDRICH HOLIDINGS LTD v. CATHNESS INVESTMENTS LTD AND OTHERS

The promissory note endorsed to Asiatic Navigation Limited constitutes consideration and the plaintiff has a valid cause of action against the 1st defendant under the novation; there was no arguable defence to the claim for HK$691,600, so summary judgment is appropriate, but there is a triable issue as to the...

Source-derived case information.

Citation
GRANDRICH HOLIDINGS LTD v. CATHNESS INVESTMENTS LTD AND OTHERS
Parties
Plaintiff: GRANDRICH HOLIDINGS LIMITED; 1st Defendant: CATHNESS INVESTMENTS LIMITED; 2nd Defendant: DAVID WYNDHAM GOUGH; 3rd Defendant: HARRY HANDLEY CLOUTLER; 4th Defendant: JOHN IAWSON LEATHAM
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
9 March 1978
Case Number
HCA2343/1977
Procedural Posture
Civil Loan Recovery / Contractual Dispute (novation and Guarantee) / Appeal From Registrar's Order 14 Decision on Leave to Defend; Summary Judgment Application
Outcome
Appeal allowed in part: summary judgment granted to plaintiff for HK$691,600; unconditional leave to defend claim for US$26,000 affirmed.
Legal Topics
Summary Judgment, Failure of Consideration, Novation, Guarantee (joint and Several), Promissory Note as Negotiable Instrument, Corporate Veil/separate Legal Personality, Leave to Defend
Source Language
en
Contract Law Company Law Civil Procedure Security/negotiable Instruments Summary Judgment Failure of Consideration Novation Guarantee (joint and Several) +3 more

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Parties

GRANDRICH HOLIDINGS LIMITED

Plaintiff

CATHNESS INVESTMENTS LIMITED

1st Defendant

DAVID WYNDHAM GOUGH

2nd Defendant

HARRY HANDLEY CLOUTLER

3rd Defendant

JOHN IAWSON LEATHAM

4th Defendant

Procedural Posture

Civil Loan Recovery / Contractual Dispute (novation and Guarantee) / Appeal From Registrar's Order 14 Decision on Leave to Defend; Summary Judgment Application

Legal Issues

  1. 1 Whether failure of consideration between third parties defeats plaintiff's claim on a promissory note
  2. 2 Whether promissory note endorsed to third party constitutes consideration/money for plaintiff's right of action
  3. 3 Whether associated companies can be treated as one for purposes of consideration without lifting corporate veil

Ratio Decidendi

The promissory note endorsed to Asiatic Navigation Limited constitutes consideration and the plaintiff has a valid cause of action against the 1st defendant under the novation; there was no arguable defence to the claim for HK$691,600, so summary judgment is appropriate, but there is a triable issue as to the construction and operation of clause 3 regarding the US$26,000 inducement payment, so leave to defend that part must be preserved.

Court Disposition

Appeal allowed in part: summary judgment granted to plaintiff for HK$691,600; unconditional leave to defend claim for US$26,000 affirmed.

Orders

  • Summary judgment for plaintiff for HK$691,600 (paragraph (a) of the Prayer)
  • Stay of execution for 14 days or pending disposal of the issue on appeal whichever is later