RE KWAN PAK HIN HENRY

RE KWAN PAK HIN HENRY

The court found no proved material variation: the proceeds remained trust money and the allegation that the bank permitted HF Foods not to account was unsupported and contradicted by the trust receipt terms; alternatively, even if variation occurred, clause 3.05 of the Guarantee was sufficiently wide to cover the indulgence/variation and keep the guarantors liable; trust receipt and overdraft facilities are distinct so any variation affecting trust receipts did not discharge the overdraft liability; accordingly the petitions succeeded and bankruptcy orders were made.

Citation
RE KWAN PAK HIN HENRY
Parties
Petitioner: Coöperatieve Centrale Raiffeisen Boerenleenbank B.A. Hong Kong Branch trading as Rabobank, Hong Kong Branch; Debtor: Man Kwok Shing; Debtor: Leung Siu Chung Henry; Debtor: Kwan Pak Hin Henry
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
26 November 2002
Case Number
HCB10380/2002
Procedural Posture
Bankruptcy Petition / Judgment (26 November 2002)
Outcome
Bankruptcy orders made against each debtor; costs order nisi in favour of petitioner for each petition, to be taxed if not agreed; costs order nisi to become absolute 14 days after handing down.
Legal Topics
Personal Guarantee, Material Variation, Trust Receipt, Statutory Demand, Bankruptcy Order, Protective Clause
Source Language
EN
Bankruptcy Contract Guarantee Security Trusts Commercial Law Personal Guarantee Material Variation +4 more

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Parties

Coöperatieve Centrale Raiffeisen Boerenleenbank B.A. Hong Kong Branch trading as Rabobank, Hong Kong Branch

Petitioner

Man Kwok Shing

Debtor

Leung Siu Chung Henry

Debtor

Kwan Pak Hin Henry

Debtor

Procedural Posture

Bankruptcy Petition / Judgment (26 November 2002)

Legal Issues

  1. 1 Whether guarantors are discharged by a material variation of the principal contract without their consent
  2. 2 Whether proceeds of sale under trust receipts ceased to be trust money when the principal debtor was allowed to use them without accounting
  3. 3 Whether clause 3.05 of the Guarantee covers indulgences or variations by the bank

Ratio Decidendi

The court found no proved material variation: the proceeds remained trust money and the allegation that the bank permitted HF Foods not to account was unsupported and contradicted by the trust receipt terms; alternatively, even if variation occurred, clause 3.05 of the Guarantee was sufficiently wide to cover the indulgence/variation and keep the guarantors liable; trust receipt and overdraft facilities are distinct so any variation affecting trust receipts did not discharge the overdraft liability; accordingly the petitions succeeded and bankruptcy orders were made.

Court Disposition

Bankruptcy orders made against each debtor; costs order nisi in favour of petitioner for each petition, to be taxed if not agreed; costs order nisi to become absolute 14 days after handing down.

Orders

  • Bankruptcy order made against Man Kwok Shing (HCB10375/2002)
  • Bankruptcy order made against Leung Siu Chung Henry (HCB10379/2002)