The Bank of East Asia Ltd v. Frencher Ltd
Read the full judgment text of HCMP 1658/1983 on BabelCite. This High Court CFI judgment.
1. On the 30th August 1983 Master Emerson made an order in favour of the plaintiff for possession of the 29th floor and 3 car parking spaces on the 4th floor of Bank of America Tower on the grounds that there had been default in payment by the defendant under a mortgage dated the 4th August 1981. The mortgage was granted to Secure General Banking Facilities to the extent of $28,000,000.
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HCMP001658/1983
MISCELLANEOUS PROCEEDINGS
BETWEEN: -
_________ Coram: The Honourable Mr. Justice Jones in Chambers Date of Hearing: 9th December 1983 Date of delivery of judgment: 12th December 1983 Mr. E.V. Hamilton, Q.C. and Miss G. Li (Wilkinson & Grist) for Plaintiff Mr. Henry Litton, Q.C. and Mr. D. Fung (Oscar Lai & Ho) for Defendant __________ JUDGMENT __________ 1. On the 30th August 1983 Master Emerson made an order in favour of the plaintiff for possession of the 29th floor and 3 car parking spaces on the 4th floor of Bank of America Tower on the grounds that there had been default in payment by the defendant under a mortgage dated the 4th August 1981. The mortgage was granted to Secure General Banking Facilities to the extent of $28,000,000. 2. Although the defendant was represented at the hearing of the summons before the Master it appears that no opposition was raised to the order being made. 3. After hearing submissions by Counsel I gave leave to the defendant to appeal out of time against the order. 4. By the notice of appeal the defendant sought an order to set aside the order of Master Emerson and for the originating summons to be dismissed. However having regard to the contents of affidavits that have since been filed on behalf of the plaintiff Mr. Litton who appeared for the defendant now seeks directions under O. 28 r. 4(3) of the Rules of the Supreme Court for the action to continue on the grounds that there are substantial disputes of fact to be tried. The basis of the appeal is that there was a moratorium for the repayment of principal and interest for 2 years commencing from the date of the mortgage. The defendant contends that the proceedings were instituted prematurely and that the payments already made were made under a mistake of fact. Reliance is placed by the defendant on the terms of an unsigned letter which was sent by the plaintiff to the defendant for the purpose of counter signature - exhibit RSFL 4. The letter is signed by Mr. R. Chow of WooCo Nominees Ltd. a nominee of P.C. Woo & Co. the plaintiff's former solicitors as a director of the defendant and by Mr. Lam another director of the defendant and one of the original guarantors of the mortgage. The letter reads as follows: -
In paragraph 4 of his affirmation dated the 11th November 1983 Mr. Lam deposed to the agreement that he reached with Mr. Li the Chief Manager of the plaintiff with regard to the terms of repayment and states that he did not inform any of his subordinates or co-directors because it was subsequently superseded by the written agreement between the plaintiff and the defendant contained in the letter to which I have referred. Mr. Lam explained that he did not draw the attention of his former solicitors Lovell, White & King to the letter at the time of the proceedings before the Master as his mind was concentrated on other matters. Mr. Li has denied that he agreed any repayment terms with Mr. Lam. 5. Mr. Hamilton for the plaintiff referred, to the lack of credibility of Mr. Lam and gave several illustrations. It is significant that the figure of $605,618.40 set out in the letter of agreement would be the correct monthly instalment for the first two years if interest only was to be paid during that period. The evidence particularly from the accounts of Bylamson & Associates (Enterprises) Limited of which the defendant is a wholly owned subsidiary indicates that there was an agreement to pay interest for the first two years. 6. Mr. Litton submitted that the interest for the first two years would become payable in August 1983. The amount payable if my calculation is correct would be about $14,400,000.00. Whilst it is not my function to decide conflicts of fact it is nevertheless beyond belief that the plaintiff would enter into such an absurd agreement. Mr. Hamilton also submitted that whatever view is token of Clause 3 of the letter the plaintiff has in any event an overriding right of repayment on demand under Clause 5. On the other hand Mr. Litton argued that this would render Clause 3 nugatory if the plaintiff could exercise this right before liability accrued and default had been made. However, no restriction is placed upon the plaintiff as to when a demand can be made. The words set out in Clause 5 are perfectly clear. 7. I am of the opinion that the plaintiff can invoke clause 5 to call for repayment on demand and that a proper demand was contained in the letter of the 3rd March 1983 from the plaintiff solicitors to the defendant. The plaintiff was therefore entitled to the order for possession granted by the Master. 8. As a result the appeal is dismissed with costs. Certified fit for two Counsel.
Representation: Mr. E.V. Hamilton, Q.C. and Miss G. Li (Wilkinson & Grist) for Plaintiff Mr. Henry Litton, Q.C. and Mr. D. Fung (Oscar Lai & Ho) for Defendant |