TEXWOOD LTD. v. NICE GREAT LTD. AND ANOTHER

TEXWOOD LTD. v. NICE GREAT LTD. AND ANOTHER

The appeal was allowed because the 2nd defendant established a bona fide defence with a good prospect of success: evidence showed Hara lacked authority to bind the company and the plaintiff had accepted a personal guarantee from Hara which replaced the corporate guarantee, thereby justifying setting aside the default judgment.

Citation
TEXWOOD LTD. v. NICE GREAT LTD. AND ANOTHER
Parties
Plaintiff: TEXWOOD LIMITED; 1st Defendant: NICE GREAT LIMITED; 2nd Defendant: UNION PRIDE LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
2 August 2000
Case Number
HCA13993/1999
Procedural Posture
Civil Appeal Concerning Guarantee and Enforcement / Appeal From Master's Refusal to Set Aside Default Judgment; Judgment on Appeal
Outcome
Appeal allowed; order of the master discharged; default judgment set aside.
Legal Topics
Setting Aside Default Judgment, Authority to Sign Guarantee, Personal Guarantee V Corporate Guarantee, Bona Fide Defence With Good Prospects of Success
Source Language
EN
Civil Procedure Contract Guarantees Agency Setting Aside Default Judgment Authority to Sign Guarantee Personal Guarantee V Corporate Guarantee Bona Fide Defence With Good Prospects of Success

Case Brief

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Parties

TEXWOOD LIMITED

Plaintiff

NICE GREAT LIMITED

1st Defendant

UNION PRIDE LIMITED

2nd Defendant

Procedural Posture

Civil Appeal Concerning Guarantee and Enforcement / Appeal From Master's Refusal to Set Aside Default Judgment; Judgment on Appeal

Legal Issues

  1. 1 Whether the 2nd defendant disclosed a bona fide defence with a good prospect of success to justify setting aside a default judgment
  2. 2 Whether Mr Hara had actual, implied or ostensible authority to sign the guarantee on behalf of the 2nd defendant
  3. 3 Whether the plaintiff accepted a subsequent personal guarantee by Hara that replaced the corporate guarantee such that the 2nd defendant was not liable

Ratio Decidendi

The appeal was allowed because the 2nd defendant established a bona fide defence with a good prospect of success: evidence showed Hara lacked authority to bind the company and the plaintiff had accepted a personal guarantee from Hara which replaced the corporate guarantee, thereby justifying setting aside the default judgment.

Court Disposition

Appeal allowed; order of the master discharged; default judgment set aside.

Orders

  • Order of the master discharged
  • Appeal allowed