Case Document

100%Judiciary

HCMP000266/1999

HCMP 266/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 266 OF 1999

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IN THE MATTER OF ALL THOSE 6 equal undivided 718th parts or shares of and in ALL THAT piece or parcel of ground registered in the Land Registry as SECTION E OF KOWLOON MARINE LOT NO. 113 And of and in the messuages erections and buildings thereon known as GUARDFORCE CENTRE, No. 3 Hok Yuen Street East, Kowloon, Hong Kong ("the Building") TOGETHER with the sole and exclusive right and privilege to hold use occupy and enjoy FIRST ALL THAT WORKSHOP UNIT NO. 3 on the ELEVENTH FLOOR of the Building and SECONDLY ALL THAT CAR PARKING SPACE NO. P29 on LOWER BASEMENT of the Building

and

IN THE MATTER OF a Deed of Mortgage dated the 30th day of April 1997 and registered in the Land Registry by Memorial No. 7091680

and

IN THE MATTER OF ALL THOSE 17 equal undivided 600th parts or shares of and in ALL THAT piece or parcel of ground registered in the Land Registry as KOWLOON INLAND LOT NO. 10983 And of and in the messuages erections and buildings thereon known as BONAVISTA BUILDING Nos. 9 and 11 Princess Margaret Road ("the said Building") TOGETHER with the sole and exclusive right and privilege to hold use occupy and enjoy ALL THAT FLAT NO. 11A on the NINTH FLOOR and CAR PARKING SPACE NO. 12 of the said Building.

and

IN THE MATTER OF a Deed of Mortgage dated the 5th day of June 1997 and registered in the Land Registry by Memorial No. 7147373.

and

IN THE MATTER OF ALL THOSE 17 equal undivided 106,532nd parts or shares of and in ALL THAT piece or parcel of ground registered in the Land Registry as NEW KOWLOON INLAND LOT NO. 5928 And of and in the messuages erections and buildings thereon known as RICHARD GARDENS No. 80 Wang Kwong Road Kowloon Bay ("the said Estate") including the Blocks, the Commercial and Garage Block and other non-domestic development, car parks, facilities and all other structures and erections forming part of the said Estate TOGETHER with the sole and exclusive right and privilege to hold use occupy and enjoy ALL THAT UNIT D on the FOURTH FLOOR of BLOCK 18 of the said Estate.

and

IN THE MATTER OF a Deed of Mortgage dated the 5th day of June 1997 and registered in the Land Registry by Memorial No. 7147371.

and

IN THE MATTER OF ALL THAT the estate right title benefit and interest of and in ALL THOSE 10 equal undivided 27,300th parts or shares of and in ALL THAT piece or parcel of ground registered in the Land Registry as SECTION K OF KOWLOON INLAND LOT NO. 10750 And of and in the messuages erections and buildings thereon known as "WHAMPOA GARDEN-SITE 11" ("the Estate") TOGETHER with the sole and exclusive right and privilege to hold use occupy and enjoy ALL THAT FLAT "A" on the FIFTEENTH FLOOR of BLOCK "4" of the Estate.

and

IN THE MATTER OF a Deed of Mortgage dated the 15th day of November 1997 and registered in the Land Registry by Memorial No. 7368689.

and

IN THE MATTER OF a Guarantee dated 24th December 1996.

and

IN THE MATTER OF a Guarantee dated 29th April 1997.

and

IN THE MATTER OF Order 88 of the Rules of High Court, Cap. 4.

BETWEEN
	THE HONGKONG CHINESE BANK, LIMITED	Plaintiff

	AND

	SANTA FUR COMPANY LIMITED	1st Defendant
	PURE CITY DEVELOPMENT LIMITED	2nd Defendant
	MA YUEN LEE	3rd Defendant
	YIU PIK CHUN JENNIFER	4th Defendant
	TUEN-MUK KA TUNG	5th Defendant
	CHEUNG WAI LAM	6th Defendant

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Coram: The Honourable Mr. Justice Yeung in Chambers

Date of Hearing: 4 October 1999

Date of Reasons for Decision: 4 October 1999

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REASONS FOR DECISION

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1. This is an appeal by the 6th Defendant against the order of Master Muttrie ordering her to pay to the Plaintiff substantial sums in a mortgage action.

2. The 1st to the 5th Defendants together mortgaged a total of 4 properties to the Plaintiff bank. There was a first guarantee by which the 5th Defendant guaranteed the 1st Defendant's indebtedness to the bank. There was also a 2nd guarantee by which the 5th and the 6th Defendants, who are husband and wife, jointly and severally guaranteed all of the 1st Defendant's indebtedness to the bank under 2 accounts.

3. Under the 2 accounts the 1st Defendant owed the Plaintiff about HK$9.2 million and about USD820,000 with daily interest thereon. There is no dispute about the amount of the indebtedness of the 1st Defendant to the Plaintiff. There is also no dispute that the 6th Defendant had in fact signed the second guarantee.

4. The suggestion by the 6th Defendant is that in the light of the alleged dispute as to facts, the Plaintiff should not have proceeded by way of Originating Summons under Order 88 of the Rules of the High Court.

5. The Plaintiff's claim is for repayment of money due under a guarantee which payments were secured by way of a mortgage. Such claim, in my view, is clearly within the ambit of Order 88 of the Rules of the High Court.

6. The 6th Defendant suggests that she has an arguable defence of non est factum and undue influence.

7. On the question of non est factum and undue influence, the 6th Defendant suggests that when her husband, that is the 5th Defendant asked her to sign the document in question, he only produced the last page of the guarantee for her to sign. He did not explain to her the legal effect of the execution of the guarantee in question nor was she afforded the opportunity to seek legal advice.

8. The 6th Defendant claims that she did not understand the contents and effects of the document nor did she have the ability to do so. She further alleges that she was under the influence of her husband, the 5th Defendant whom she claims to have been, at the material time, acting as an agent for the Plaintiff.

9. The burden of proof in relation to a defence of non est factum is indeed a heavy one which lays on the person pleading it. (see the judgment in the case of Union Bank of Hong Kong Limited v. Ng Yin Hung and another [1975] H.K.L.R. 26.

10. In Saunders v. Anglia Building Society [1971] A.C. 1004. It was held that the plea of non est factum could not be argued unless it could be shown that the signatory thought that she was signing a document substantially different in nature or in kind and that the person raising the plea had acted reasonably and with due care.

11. It is also well established that ignorance of the full legal effects of a signed document provided no defence of non est factum.

12. The 6th Defendant had studied up to F.5 and had been working at the Cannosa Hospital. She is the director and shareholder of at least two limited companies.

13. There is evidence to show that the 6th Defendant was experienced in property transactions and that she had signed a number of mortgages and legal charges documents for the 1st and the 2nd Defendants of which she was at the material times a director and shareholder.

14. The guarantee that the 6th Defendant signed is a one single sheet of paper folded up into two pages, and the word "guarantee" written in both Chinese and English appears at the very top of the document. I have in the course of counsel's submissions had the opportunity of viewing the original guarantee in question.

15. In my view, anyone seeing such document must realise it is a document of importance. The suggestion that the 6th Defendant did not know what the document was at all and that she had no idea of any of its legal implications in my view is simply unbelievable.

16. She might not have studied it carefully enough to enable her to understand its full legal implication. But that alone would not provide a defence of non est factum. She must have realised that it was a guarantee document.

17. In any event, if what the 6th Defendant said was correct. She had not acted reasonably and with due care.

18. I have considered the background of the case as well as counsel's submission. I am not persuaded that the defence of non est factum is available to the 6th Defendant at all.

19. On the question of undue influence, I am not persuaded that there is any valid basis for the assertion that the husband was acting as an agent of the Plaintiff. As I have pointed out in the course of counsel's submission, this is not a case of the wife standing surety for her husband. It is a case of the husband and wife together acting as surety for a limited company of which both of them are directors and shareholders.

20. It is a case in which the 6th Defendant in her capacity as a director of the 1st Defendant executed a guarantee for the indebtedness of the 1st Defendant towards the Plaintiff together with a co-director.

21. The situation is also not one whereby a husband having influenced his wife into signing a document, then seek to enforce the terms of such document against the wife.

22. In my view, there is simply no evidence of undue influence which would have the effect of vitiating the validity of the guarantee in question. With respect, Mr. Chu's submission on this aspect is misconcerned.

23. I am firmly of the view that the 6th Defendant had not raised any credible and/or arguable defence to the Plaintiff's claim.

24. There is no valid basis upon which I can interfere with the decision of the learned Master.

25. In the circumstances, the appeal must be dismissed and I so order.

	(Wally Yeung)
	Judge of the Court of First Instance of the High Court

Representation:

Mr. Lee Tung-ming instructed by Messrs. Joseph S.H. Chan & Co. for the Plaintiff/Respondent

Mr. George Chu instructed by Messrs. Li, Wong & Lam for the 6th Defendant/Appellant

Cites 1 case

Cases cited in this judgment

The Hongkong Chinese Bank, Ltd. v. Santa Fur Co. Ltd. and Others

HCMP 266/1999

High Court CFI19 Apr 2002

Other Judgments in This Case

Further hearings and rulings under HCMP 266/1999

The Hongkong Chinese Bank, Ltd. v. Santa Fur Co. Ltd. and Others

High Court CFI19 Apr 2002