CHOW TAI FOOK NOMINEE LTD v. DIAMOND CITY LTD AND ANOTHER

CHOW TAI FOOK NOMINEE LTD v. DIAMOND CITY LTD AND ANOTHER

The court held the defendants’ assertions of an oral agreement and oral variations were contradicted by detailed contemporaneous written loan and supplemental agreements, correspondence and conduct; the no-oral-modification clauses and executed deeds precluded reliance on alleged oral variations; the alleged defences and claims were inherently unbelievable and frivolous and amounted to abuse of process; accordingly summary judgment was entered for the lenders and the defendants’ counterclaims and DW’s statements of claim were struck out; costs ordered on indemnity basis with certificate for two counsel.

Citation
[2021] HKCFI 3019
Parties
Plaintiff in HCA 85/86/2020; 1st Defendant in HCA 123/221/2020: Chow Tai Fook Nominee Limited; 1st Defendant in HCA 85/2020: Diamond City Limited; 1st Defendant in HCA 86/2020 and HCA 92/2020: Gateway Asia Resources Limited; 2nd Defendant in Multiple Actions; Plaintiff in HCA 123/221/2020: Wu Wai Leung, Danny; Plaintiff in HCA 92/2020; 2nd Defendant in HCA 123/2020: Idea Perfect Holdings Limited; 3rd Defendant in HCA 92/2020: Chan Tak Yuen; Receiver / 3rd Defendant in HCA 123/2020: Koo Chi Sum; Receiver / 4th Defendant in HCA 123/2020: Simon Rhys Thomas
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
11 October 2021
Case Number
HCA85/2020
Procedural Posture
Civil – Debt Recovery and Declarations (summary Judgment and Striking Out Applications) / Judgment on Consolidated Summary Judgment and Striking Out Applications (court Delivered Reasons and Orders)
Outcome
Summary judgment entered for Chow Tai Fook Nominee Limited and Idea Perfect Holdings Limited; DW's counterclaims and DW's separate claims/Statements of Claim struck out; relevant actions dismissed as against the lenders.
Legal Topics
Summary Judgment, Striking Out, Estoppel, Guarantee Enforcement, Loan Agreements, Abuse of Process, Indemnity Costs, No Oral Modification Clause
Source Language
EN
Contract Equity Civil Procedure Banking and Finance Summary Judgment Striking Out Estoppel Guarantee Enforcement +4 more

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Parties

Chow Tai Fook Nominee Limited

Plaintiff in HCA 85/86/2020; 1st Defendant in HCA 123/221/2020

Diamond City Limited

1st Defendant in HCA 85/2020

Gateway Asia Resources Limited

1st Defendant in HCA 86/2020 and HCA 92/2020

Wu Wai Leung, Danny

2nd Defendant in Multiple Actions; Plaintiff in HCA 123/221/2020

Idea Perfect Holdings Limited

Plaintiff in HCA 92/2020; 2nd Defendant in HCA 123/2020

Chan Tak Yuen

3rd Defendant in HCA 92/2020

Koo Chi Sum

Receiver / 3rd Defendant in HCA 123/2020

Simon Rhys Thomas

Receiver / 4th Defendant in HCA 123/2020

Procedural Posture

Civil – Debt Recovery and Declarations (summary Judgment and Striking Out Applications) / Judgment on Consolidated Summary Judgment and Striking Out Applications (court Delivered Reasons and Orders)

Legal Issues

  1. 1 Whether defendants (and guarantor) have a triable issue or arguable defence to prevent summary judgment on claims under written loan agreements and guarantees
  2. 2 Whether alleged oral agreements or common understandings estop lenders from declaring events of default and appointing receivers
  3. 3 Whether the pleaded claims and counterclaims are frivolous, an abuse of process, and liable to be struck out

Ratio Decidendi

The court held the defendants’ assertions of an oral agreement and oral variations were contradicted by detailed contemporaneous written loan and supplemental agreements, correspondence and conduct; the no-oral-modification clauses and executed deeds precluded reliance on alleged oral variations; the alleged defences and claims were inherently unbelievable and frivolous and amounted to abuse of process; accordingly summary judgment was entered for the lenders and the defendants’ counterclaims and DW’s statements of claim were struck out; costs ordered on indemnity basis with certificate for two counsel.

Court Disposition

Summary judgment entered for Chow Tai Fook Nominee Limited and Idea Perfect Holdings Limited; DW's counterclaims and DW's separate claims/Statements of Claim struck out; relevant actions dismissed as against the lenders.

Orders

  • Summary judgment entered against Diamond City, Gateway Asia and Wu Wai Leung in HCA 85/2020 and HCA 86/2020
  • Wu Wai Leung's counterclaims in HCA 85/2020 and HCA 86/2020 struck out