Hong Kong Case Law: Decisions & Judgments

Topic

Bank's duty to inquire

Legal area

Court

29 May 2014

DBS BANK (HONG KONG) LTD v. LOK’S ENGINEERING LTD AND OTHERS

Citation

DBS BANK (HONG KONG) LTD v. LOK’S ENGINEERING LTD AND OTHERS
Court

Court of First Instance
Case number

HCA2522/2009

The court found that the evidence raised credible, fact sensitive triable issues of undue influence and of whether the bank was put on inquiry and took reasonable steps; consequently summary judgment was inappropriate and must be set aside so the 3rd defendant is granted unconditional leave to defend.
17 Sept 2004

DAH SING BANK LTD v. SING FAI HANDBAGS MANUFACTORY LTD AND OTHERS

Citation

DAH SING BANK LTD v. SING FAI HANDBAGS MANUFACTORY LTD AND OTHERS
Court

Court of First Instance
Case number

HCMP1250/2003

The court held that D4, D5 and D6 raised triable issues of undue influence and that the bank was put on inquiry and had not demonstrably taken reasonable steps (private meeting or adequate independent advice) to exclude undue influence; questions as to the use of a power of attorney and possible breach of fiduciary duty were sufficiently arguable to preclude summary judgment, so the appeal was dismissed and the claims must go to trial.
21 Jul 2004

BANK OF CHINA (HONG KONG) LTD v. CHEUNG LUEN KWAN AND OTHERS

Citation

BANK OF CHINA (HONG KONG) LTD v. CHEUNG LUEN KWAN AND OTHERS
Court

Court of First Instance
Case number

HCA3385/2002

The court found D2 did not place a sufficient degree of trust and confidence in D1 regarding his own financial affairs and the guarantee was readily explicable by their commercial relationship and mutual financial interests; therefore the Class 2(B) presumption of undue influence did not arise and the guarantee was enforceable against D2, entitling the plaintiff to judgment.
20 Nov 2002

ABN AMRO BANK N V v. MANHARLAL TRIKAMAS MODY

Citation

ABN AMRO BANK N V v. MANHARLAL TRIKAMAS MODY
Court

Court of First Instance
Case number

HCMP4724/2001

Leave to appeal out of time was refused because the delay was lengthy and unexplained on the evidence, the 2nd Defendant's account of ignorance and undue influence lacked credibility, the alleged undue influence defence was weak or unarguable against the bank because there was no objective indication the loan was for the husband's sole benefit and the bank was not put on inquiry, and reopening judgment would cause prejudice to the bank (falling property value, large outstanding indebtedness, accrued interest and costs).
7 Aug 2001

Re: LAI YIN SHAN and EX PARTE: THE HONG KONG AND SHANGHAI BANKING CORPORATION LTD.

Citation

Re: LAI YIN SHAN and EX PARTE: THE HONG KONG AND SHANGHAI BANKING CORPORATION LTD.
Court

Court of First Instance
Case number

HCB992/2000

The court found that undue influence by the husband induced the respondent to sign the guarantees but held that the bank was not bound because there was neither agency by the husband nor actual or constructive notice to the bank; the company records showed the respondent had a substantial interest and active role, so the transaction was at least partly to her benefit and did not put the bank on inquiry, entitling the bank to the bankruptcy order.

Hong Kong Case Law

DBS BANK (HONG KONG) LTD v. LOK’S ENGINEERING LTD AND OTHERS

DAH SING BANK LTD v. SING FAI HANDBAGS MANUFACTORY LTD AND OTHERS

BANK OF CHINA (HONG KONG) LTD v. CHEUNG LUEN KWAN AND OTHERS

ABN AMRO BANK N V v. MANHARLAL TRIKAMAS MODY

Re: LAI YIN SHAN and EX PARTE: THE HONG KONG AND SHANGHAI BANKING CORPORATION LTD.