WAYFOONG CREDIT LIMITED v. WAN YING LAM AND ANOTHER

1984, No. 8558

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

___________

________________________

ASSESSIENT OF DAMAGES

_________________________

1. On the 7th January 1985 interlocutory judgment was entered against the 2nd defendant with damages to be assessed.

2. The assessment was before me on the 24th January 1985 and followed a curious course.

3. The plaintiff's claim against the 2nd defendant is based upon a guarantee by him of the indebtedness to the plaintiff of Handfix Industrial Engineering Company Limited ("Handfix").

4. It is a matter of record that the plaintiff obtained judgment against Handfix on the 16th January 1985 in 1984 No. 8555 in the amount of HK$161,063.10.

5. Two clauses are particularly relevant in the guarantee signed by the 2nd defendant.

6. Clause 1 is the substance of the guarantee to which is appended the following proviso :-

"Provided always that the joint and several liability ultimately enforceable against us under this guarantee shall not exceed in aggregate the sum of .......... together with interest thereon at the rate of ..... per cent per annum from the date of demand by you for payment."

7. As will be noted no amounts have been inserted in the blank spaces.

8. Clause 5 reads as follows :-

"Any admission or acknowledgement in writing by the Principal or by any person authorised by the Principal of the amount of indebtedness by the Principal to you and any judgment recovered by you against the Principal in respect of such indebtedness shall be binding and conclusive on and against us, our executors, administrators and legal representatives in all courts of law and elsewhere."

9. The assessment of damages, therefore, says the plaintiff is a simple matter. The 2nd defendant is liable under the guarantee and the extent of his liability is the judgment obtained against the principal debtor i.e. HK$161,063.10 and interest thereon at 8% per annum from 19th December 1984 until 16th January 1985 and at the judgment rate thereafter until payment and HK$905 fixed costs.

10. The 2nd defendant seeks to shed a different light on the guarantee upon which he admits he is liable.

11. With regard to clause 1 he argues that because there are no figures inserted in the proviso thereto there is no liability attaching to him thereunder. This may seem an argument mere appropriate before judgment rather than after however it seems he is saying "I am liable but as no amount is stated in the proviso then I am liable for a nil amount".

12. I have no difficulty in rejecting that argument. What the parties to the guarantee intended was that the guarantors would be liable for the indebtedness of the Principal and that the liability would be without a limit. Their intentions are put into effect by leaving blank that part of Clause 1 (i.e. the proviso) that would, if completed, have the effect of limiting that liability.

13. With regard to clause 5 the 2nd defendant argues that a judgment "obtained" is not a judgment "recovered" as required by that clause. Only when the plaintiff has recovered the sums due from Handfix under the judgment, he argues, would his liability then arise. It is trite to say that should the plaintiff recover in full from Handfix the 2nd defendant would again be liable for a nil sum.

14. Yet again the 2nd defendant seeks to make a nonsense of the guarantee.

15. What the parties intended was that a judgment against the principal debtor would be enforceable against the guarantors. That, in clause 5, is what they said. The word "recover" can, I accept, mean a variety of things. Here it clearly means "obtained".

16. Authority, if any be needed, that "recover" can moan "obtain" without doing any undue violence to the language can be found in Haines v. Weleh (1868) L.R. 4 C.P. 91 where Willes J. observed "The word 'recover' is now often used in the larger sense of obtaining in any legal mannor".

17. It is so used in clause 5.

18. It follows then that the damages of the plaintiff against the 2nd defendant are assessed in the same terms as the judgment against Handfix, that is

19. In my view the order by Master Betts, that the plaintiff should have the costs in the action up to and including the hearing of the application for summary judgment on the 2nd December 1985, remains undisturbed.

20. The 2nd defendant shall also pay the plaintiff's costs in the assessment of damages, which in the light of the wholly unmeritorious arguments advanced on the 2nd defendant's behalf shall be on a solicitor and own client basis.

21. There will be a certificate for counsel.