LIPPO SECURITIES LTD. v. G.A. MANAGEMENT LTD. AND ANOTHER

LIPPO SECURITIES LTD. v. G.A. MANAGEMENT LTD. AND ANOTHER

The court accepted plaintiff's evidence of a standard practice requiring personal guarantees for small capitalised corporate margin accounts, found the 2nd defendant signed and knew he was providing an unlimited continuing guarantee, found Leong and the 2nd defendant not credible, and held that the pleaded defences failed: non est factum was abandoned and would fail for negligence, the mistake pleaded was not as to subject‑matter, and no false representation induced the guarantee; accordingly the guarantee is enforceable and judgment entered for the plaintiff for HK$4,359,092.48 with interest.

Citation
LIPPO SECURITIES LTD. v. G.A. MANAGEMENT LTD. AND ANOTHER
Parties
Plaintiff: Lippo Securities Limited; 1st Defendant: G.A. Management Limited; 2nd Defendant: Liu Ka Lim
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
3 January 2002
Case Number
HCA17830/1998
Procedural Posture
Debt Recovery / Guarantee (commercial) / Judgment (court of First Instance)
Outcome
Judgment entered for the plaintiff against the 2nd defendant; 2nd defendant's counterclaim dismissed; costs order nisi in favour of plaintiff.
Legal Topics
Continuing Guarantee, Non Est Factum, Mutual/common Mistake, Misrepresentation, Margin Trading Accounts, Account Opening Procedures
Source Language
EN
Contract Guarantee Commercial Law Equity Continuing Guarantee Non Est Factum Mutual/common Mistake Misrepresentation +2 more

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Parties

Lippo Securities Limited

Plaintiff

G.A. Management Limited

1st Defendant

Liu Ka Lim

2nd Defendant

Procedural Posture

Debt Recovery / Guarantee (commercial) / Judgment (court of First Instance)

Legal Issues

  1. 1 Whether the 2nd defendant is personally liable under an unlimited continuing guarantee
  2. 2 Whether the defences of non est factum, mutual/common mistake or misrepresentation defeat enforcement of the guarantee
  3. 3 Whether the plaintiff's standard practice and documentary evidence establish that a personal guarantee was required and was executed

Ratio Decidendi

The court accepted plaintiff's evidence of a standard practice requiring personal guarantees for small capitalised corporate margin accounts, found the 2nd defendant signed and knew he was providing an unlimited continuing guarantee, found Leong and the 2nd defendant not credible, and held that the pleaded defences failed: non est factum was abandoned and would fail for negligence, the mistake pleaded was not as to subject‑matter, and no false representation induced the guarantee; accordingly the guarantee is enforceable and judgment entered for the plaintiff for HK$4,359,092.48 with interest.

Court Disposition

Judgment entered for the plaintiff against the 2nd defendant; 2nd defendant's counterclaim dismissed; costs order nisi in favour of plaintiff.

Orders

  • Judgment for plaintiff against 2nd defendant for HK$4,359,092.48 with interest at judgment rate from 13 April 1999 until payment
  • 2nd defendant's counterclaim dismissed