DBS BANK (HONG KONG) LTD v. YUE LI (H.K.) ENGINEERING LTD AND OTHERS

DBS BANK (HONG KONG) LTD v. YUE LI (H.K.) ENGINEERING LTD AND OTHERS

The court held there was no arguable defence: undue influence was not established nor presumed; the Mortgage, with Schedule II blank and clause 18, validly secured all monies and was not discharged by subsequent increases in facilities; the plaintiff was entitled to rely on the company's Annual Return and the ostensible authority of the sole director so the director's resolution was effective to bind the company; accordingly judgment granted for plaintiff and possession and costs ordered.

Citation
DBS BANK (HONG KONG) LTD v. YUE LI (H.K.) ENGINEERING LTD AND OTHERS
Parties
Plaintiff (lender): DBS BANK (HONG KONG) LIMITED; 1st Defendant (borrower): YUE LI (H.K.) ENGINEERING LIMITED; 2nd Defendant (mortgagor): HANLOY LIMITED; 3rd Defendant (guarantor): LEE KIN WAH; 4th Defendant (guarantor): LEE HING TONG
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
26 September 2014
Case Number
HCMP165/2014
Procedural Posture
Originating Summons Under Order 88 Mortgage Enforcement / Judgment Following Hearing on Plaintiff's Application for Possession and Payment
Outcome
Judgment for the plaintiff against the 2nd defendant; plaintiff's claim allowed
Legal Topics
Mortgage Enforcement, Undue Influence, All Monies Clause, Alteration/variation, Director's Authority and Quorum, Indoor Management Rule, Possession/vacant Possession, Costs
Source Language
EN
Mortgage Law Equity Company Law Contract Law Mortgage Enforcement Undue Influence All Monies Clause Alteration/variation +4 more

Case Brief

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Parties

DBS BANK (HONG KONG) LIMITED

Plaintiff (lender)

YUE LI (H.K.) ENGINEERING LIMITED

1st Defendant (borrower)

HANLOY LIMITED

2nd Defendant (mortgagor)

LEE KIN WAH

3rd Defendant (guarantor)

LEE HING TONG

4th Defendant (guarantor)

Procedural Posture

Originating Summons Under Order 88 Mortgage Enforcement / Judgment Following Hearing on Plaintiff's Application for Possession and Payment

Legal Issues

  1. 1 Whether the 2nd defendant is bound by the Mortgage and liable for all monies secured
  2. 2 Whether the 2nd defendant can resist enforcement on grounds of undue influence
  3. 3 Whether increases in the borrower's facilities or alleged oral limits alter or discharge the Mortgage

Ratio Decidendi

The court held there was no arguable defence: undue influence was not established nor presumed; the Mortgage, with Schedule II blank and clause 18, validly secured all monies and was not discharged by subsequent increases in facilities; the plaintiff was entitled to rely on the company's Annual Return and the ostensible authority of the sole director so the director's resolution was effective to bind the company; accordingly judgment granted for plaintiff and possession and costs ordered.

Court Disposition

Judgment for the plaintiff against the 2nd defendant; plaintiff's claim allowed

Orders

  • Judgment for the plaintiff against the 2nd defendant for the sums claimed and for possession of the Property (vacant possession)
  • Costs order nisi that the 2nd defendant pays the costs of the plaintiff on a party-and-party basis to be taxed if not agreed