XCHRX CREDIT AGRICOLE INDOSUEZ v. CHANG LIEN HING STEPHEN

HCA 4073/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 4073 OF 1999

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J U D G M E N T

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Godfrey, J.A. :

1. This is an application for summary judgment under a bank guarantee. The defence offered is that the guarantee was given on the faith of promises on the part of the bank's employees that the facility to be guaranteed would be re-instated or re-negotiated at a level satisfactory to the guarantor and that these promises were not honoured. A point was also taken as to the insertion of the words of 'unlimited amount' in the guarantee but these words would on its true construction have been implied anyway.

2. This defence has no realistic prospect of success. Collateral promises such as are alleged here must be proved to have been given in clear and unequivocal terms if the court is to give then contractual effect to displace the effect of the instrument signed.

3. Here the evidence is not only far from clear and unequivocal, it is inherently inconsistent and uncertain and the defence itself was raised at a late stage. No doubt something was said between the guarantor and the bank's employees about the affairs of the principal debtor when the guarantee was given, but I am quite satisfied that the guarantor would have no prospect of satisfying a judge that whatever was said was intended to have and did have contractual effect.

4. There will accordingly be judgment against the defendant for USD26,823.63 and HKD4,506,703.74 as asked, with interest as claimed in para. 9 of the Statement of Claim, and costs.