BLISS SUCCESS LTD v. TONG HOK KEUNG AND OTHERS

BLISS SUCCESS LTD v. TONG HOK KEUNG AND OTHERS

The court held the guarantee was unenforceable: the Plaintiff failed to show consideration for the collateral guarantee, the document's terms were ambiguous and construed against the Plaintiff, and the underlying arrangement involved illicit under‑table payments rendering the contract illegal and contrary to public policy; accordingly the Plaintiff's claim for US$76,800 was dismissed and costs were awarded to the Defendants.

Citation
BLISS SUCCESS LTD v. TONG HOK KEUNG AND OTHERS
Parties
Plaintiff: Plaintiff; 1st Defendant: Tong Hok Keung; 2nd Defendant: Liu Chun Kit; 3rd Defendant: Pin Chiu Ping
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
19 September 2006
Case Number
DCCJ4761/2005
Procedural Posture
Civil Contract / Trial Judgment (first Instance)
Outcome
Plaintiff's claims dismissed
Legal Topics
Performance Bond, Guarantee, Collateral Contract, Consideration, Illegality, Breach of Contract, Letters of Credit, Costs
Source Language
EN
Contract Commercial Law Civil Procedure Public Policy Criminal Law (corruption) Performance Bond Guarantee Collateral Contract +5 more

Case Brief

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Parties

Plaintiff

Plaintiff

Tong Hok Keung

1st Defendant

Liu Chun Kit

2nd Defendant

Pin Chiu Ping

3rd Defendant

Procedural Posture

Civil Contract / Trial Judgment (first Instance)

Legal Issues

  1. 1 Whether the written guarantee/ collateral contract was supported by consideration
  2. 2 Whether the wording of the guarantee was sufficiently certain or was to be construed against the party seeking to rely on it
  3. 3 Whether the underlying transactions were illegal or contrary to public policy (under‑table payments/corruption) and thus unenforceable

Ratio Decidendi

The court held the guarantee was unenforceable: the Plaintiff failed to show consideration for the collateral guarantee, the document's terms were ambiguous and construed against the Plaintiff, and the underlying arrangement involved illicit under‑table payments rendering the contract illegal and contrary to public policy; accordingly the Plaintiff's claim for US$76,800 was dismissed and costs were awarded to the Defendants.

Court Disposition

Plaintiff's claims dismissed

Orders

  • Plaintiff to pay the costs of the action to all three Defendants, to be taxed if not agreed
  • Cost order nisi to be made absolute in 14 days