THE HONGKONG AND SHANGHAI BANKING CORPORATION v. NG CHEUNG MING

Headnote

Contract - consideration

Promissory Estoppel

Guarantee - discharge

________________

1986 No. A7279

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

____________

________________________

___________________________

J U D G M E N T

____________________________

1. Until 1st May 1984, the Defendant, Mr. Ng Cheung Ming, together with one Mr. Lam Ming ("Mr. Lam") and Mr. Kwong Kin Ling ("Mr. Kwong") were partners of Wynne Ming Development Enterprise Co. ("Wynne Ming"). One of if not the only major business activities of Wynne Ming was to develop a Shenzhen Bay Country Club in Sha-Ho, Shenzhen ("the Shenzhen Bay project"). Included in the project was the building of a Shenzen Bay Hotel.

2. The Plaintiff, of course, requires no introduction. It is one of the largest banks in Hong Kong.

3. By a facility letter dated 1st October 1981, the Plaintiff offered to provide finance to Wynne Ming for the development of the Shenzhen Bay project in the sum of HK$18 million. The offer was duly accepted. That facility letter is to be found at page 3 of the agreed bundle. I shall refer to the documents in this bundle by reference to their respective page numbers with a prefix letter "A".

4. Soon after the advancement of this loan, Wynne Ming's repayments fell into arrears so much so that eventually in September 1983, the Plaintiff offered a new credit line to Wynne Ming incorporating the previous loan together with all outstanding interest liability. There was a new facility letter dated 10th September 1983 ("the Facility Letter") (A-10) by which a new credit line of HK$24 million was offered to Wynne Ming. It is instructive to note a few key conditions of this new facility :-

(a) Interest on the outstanding loan was to be debited monthly from Wynee Ming's current account;

(b) Commencing September 1983 and continuing until the end of June 1984, all such monthly debits would be covered immediately by drawing on funds available under the loan facility, provided the total outstanding did not exceed HK$24 million. In other words, the initial interest payments over the first 9 months would be capitalised as part of the loan advanced;

(c) From July 1984, monthly interest debits were to be covered in advance by Wynne Ming;

(d) The principal outstanding at the end of June 1984 was to be repaid in 13 quarterly instalments, commencing October 1984 to be fully repaid by October 1987.

5. As security to the loan, an unconditional guarantee for HK$24 million was signed by one Overseas Chinese Enterprise Corporation ("OCEC") of the People's Republic of China (A-25), the joint venturer of the Shenzen Bay project. There was also a joint and several guarantee ("the 1983 Guarantee") for the same amount signed by each of the partners of Wynne Ming including the Defendant (A-20).

6. The facility was duly accepted by Wynne Ming and the loan drew down in accordance with the terms of the facility. By this action, the Plaintiff sued the Defendant as one of the principal debtors for the outstanding loan and as one of the guarantors for the same loan.

7. I expressed my doubts at the outset of the trial how the guarantee claimcould have added anything to the debt claim and that if anything, the guarantee claim would only serve to complicate the issues and lengthen the trial unnecessarily. Counsel for the Plaintiff, however, was happy to leave the guarantee claim in the action.

The Pleaded Defences

8. One of the reasons why I was not at all happy with the Plaintiff's guarantee claim is that not only it did not add anything to the true issues between the parties but it served as a good excuse for the Defendant to plead all sorts of defences relating to the validity or enforceability of the 1983 Guarantee. In fact, when trial commenced more than two-thirds of the Defendant's Amended Defence was devoted to this "issue".

9. On the first day of trial, Mr. Yim, Counsel for the Defendant applied for leave to further amend his Amended Defence by introducing a number of complicated pleas most of which again went to the guarantee claim. These proposed amendments with some minor exceptions were allowed by me after argument.

10. The state of pleadings before the Plaintiff opened its case was thus :

(i) The loan advanced to Wynne Ming was not disputed;

(ii)    The following defences were pleaded by the Defendant :-

(a)       The liability of the Defendant was varied by agreement of the parties and the Defendant had acted to his detriment in accordance with such agreement;

(b)     Alternatively, the Plaintiff was estopped from claiming further payments by the Defendant;

(c)  The 1983 Guarantee was void for lack of consideration;

(d)     Alternatively, the liability of the Defendant under the 1983 Guarantee ceased upon dissolution of the partnership;

(e)     Further or alternatively, the agreement under the 1983 Guarantee had been "superseded" by the Proportional Repayment Agreement;

(f) Further or alternatively, the 1983 Guarantee was discharged by reason of the following matters or any of them :

(1)     Interest was increased from 1.5% as provided for under the Facility Letter to a penalty rate of 6%;

(2) The Plaintiff failed to notify the Defendant that the Plaintiff revised and down-graded the credit standing of Mr. Lam and Kwong;

(3)     The Plaintiff granted overdraft facilities to Wynne Ming without the Defendant's consent;

(4)     The Plaintiff gave time to OCEC, Mr. Lam and Mr. Kwong in paying off part of the debt of Wynne Ming.

The Trial

11. The precise figure of the outstanding sum and the interests thereon were subsequently agreed by the parties in the course of the trial after Mr. Stone abandoned the Plaintiff's claim for 6% interest and recalculated the claim by reference to the contractual rate of interest only. This was accepted by the Defendant without prejudice to his contention that in any event the 1983 Guarantee had been discharged by reason of the overcharge of interest.

12. Despite the fact that effectively the entire burden in the case was with the Defendant, the Plaintiff opened its case and called its witnesses first. Three witnesses were called by the Plaintiff. They were : Mr. Simond Edwards, the Plaintiff's corporate planning officer; Mr. Jethro Kam Kwan Lau, an employee of the Plaintiff now working in Ontario and Miss Corinna Ko, a senior project finance manager of the Plaintiff.

13. The Defendant in response called two witnesses. They were the. Defendant himself and his former secretary, Miss Esther Ng Kai Lai.

14. At the end of the hearing, I gave judgment to the Plaintiff with costs. I shall now give my reasons for the judgment.

15. I shall consider the various defences in turn in the light of the evidence called.

The Proportional Repayment Agreement

16. This is a unique defence. The gist of it is this in April 1984, the partners of Wynne Ming agreed to dissolve the partnership and the Defendant was to take up the 50% share of the partnership originally held by Mr. Lam and Mr. Kwong. In November 1984, the ex-partners of Wynne Ming agreed in writing (A-65) ("the Proportional Repayment Agreement") that the Wynne Ming debt should be divided up into two parts. The Defendant was to repay 51.7490194% of the Wynne Ming debt while Mr. Lam and Mr. Kwong were to repay the remaining 48.2509806%. There was no suggestion that the Plaintiff was privy to this agreement at the time.

17. It will be remembered that under the terms of the Facility Letter, Wynne Ming was to pay monthly interest in advance as from July 1984 and commence making thirteen quarterly principal repayments to the Plaintiff in October 1984. However, up to November 1984, the time of the Proportional Repayment Agreement, no repayment of whatever nature, however, was made by either the Defendant or Wynne Ming, which by now, of course, was a sole proprietorship with the Defendant as the sole owner thereof.

18. On 25th March 1985, OCEC wrote to the Plaintiff informing the latter of and also enclosing therewith the Proportional Repayment Agreement. OCEC concluded the letter (at A-73) with these words ;

"We consider it desirable for the two parties to undertake the repayment of principal and interest separately as this will facilitate supervision and

clearly define responsibility. Please consider whether such method for the repayment of principal and interest is acceptable. If you agree, please inform Mr. Lam Ming of Wynne & Co. and Mr. Ng Cheung Ming of Wynne Ming Development Enterprise company so that repayment will be made accordingly."

19. There is a considerable body of written evidence in the agreed bundle which clearly indicates that the Proportional Repayment Agreement was never accepted by the Plaintiff. OCEC itself in a letter dated 12th September 1988 (A-316) acknowledged : "As regards the proposal of Ng Cheung Ming that repayment of the loan be borne in accordance with the proportion negotiated and agreed by Ng Cheung Ming with Lam Ming by an agreement, your Bank has clearly expressed non-acceptance of such agreement. We acknowledge your consistently clear and expressed attitude and we respect your stand in this matter."

20. The Plaintiff's witnesses, Mr. Edwards, Mr. Lau and Miss Ko all- gave evidence to the same effect that the Proportional Repayment Agreement was, to the knowledge of the Defendant, never accepted by the Plaintiff. This was, as to be expected, refuted by the Defendant's witnesses. Be that as it may, before I turn to and consider the evidence in detail, it is necessary to see how this defence was put on pleadings.

21. The Defendant never pleaded the consideration, if any, relied on in support of the Proportional Repayment Agreement insofar as it was alleged that the Plaintiff was bound by it. The Plaintiff, of course, denied this agreement; but it did not at any time seek particulars of the consideration relied on. The Plaintiff's apparent complacency in dealing with this plea is somewhat difficult to fathom. The factual position as I understand it is this there was an agreement made between the Defendant on the one hand and Mr. Lam and Mr. Kwong on the other in November 1984. This agreement did not initially involve the Plaintiff. The Defendant, however, alleges that somehow at a later stage, the Plaintiff became a party to this agreement and was bound thereby. But how ? What was the consideration moving from the Defendant to the Plaintiff ? In November 1984, the Defendant was already in breach of his obligation to repay. His liability to the Plaintiff was of course joint with Mr. Lam and Mr. Kwong for the full extent of the debt (see s. 11 of the Partnership Ordinance Cap. 38). But his private arrangement with his ex-partners inter se was not binding on nor could it affect the Plaintiff.

22. If the Defendant was already liable to the Plaintiff for the full amount of the debt, what consideration could he offer the Plaintiff in return for a promise to only accept a lesser amount of the debt ? None as far as I can see.

23. There is another point. After November 1984, the Defendant was also contractually bound to Mr. Lam and Mr. Kwong to repay some 51% of the loan to the Plaintiff. There was no evidence that any offer was made to the Plaintiff to actually perform this obligation as a consideration in return for the Plaintiff's promise not to go after the remainder of the loan. Indeed, the evidence is to the contrary. During crossexamination, the Defendant said this (on 26th May 1992 at about 3:30 p.m.) .

"Q .Before you entered into the private agreement, did you go to the Bank and say : 'I have, agreed to pay only 51% is that alright with you ?' Did you do that ?

(A)    No. Even if I did, I don't think the Bank would take notice of me. Actually, the Bank would not have trusted me. The Bank only trusted the guarantor which was OCEC."

24. It is not for me to speculate why this defence was not applied to be struck out much earlier on the ground that it disclosed no reasonable defence although,I surmise that a lot of time and legal costs would have been saved if such an application was successfully made. Be that as it may, no such application was made before trial nor was one made to me. I must therefore consider the defence as pleaded and see if it is supported by evidence.

25. The Defendant first pleaded this defence in the old paragraph 5 of his Amended Defence, now paragraph 11 of his Re-Amended Defence. The particulars pleaded in support of the Proportional Repayment Agreement are that it was made "partly in writing and partly orally" and that consent was given by the Plaintiff in or about February or March 1985. The parties who took part in the oral agreement were identified as Mr. Chen Xian of OCEC, Mr. Edwards, Mr. Lau and Miss Betty Wu of the Plaintiff. The written documents relied on were the dissolution agreement dated 26th April 1984 (A-39B), the agreement dated 29th November 1984 (A-63), the letter from OCEC to the Plaintiff dated 25th March 1985 (A-73) and 3. letters subsequently sent by the Defendant to the Plaintiff respectively dated 8th July 1985 (A-118), 14th October 1985 (A-162) and 9th December 1985 (A-181).

26. Let me say at once that no evidence was led to prove any oral agreement made in February or March 1985 involving the Plaintiff. Mr. Chen Xian was not called and nothing was put to Mr. Edwards or Mr. Lau in cross-examination as to the alleged making of any oral agreement.

27. As far as the written documents are concerned, I have already said neither the dissolution agreement dated 26th April 1984 (A-39B) nor the 29th November 1984 agreement (A-63) concerned the Plaintiff. The letter of 25th March 1985 (A-73) from OCEC to the Plaintiff made it plain that there was no agreement from the Plaintiff as regards the Proportional Repayment Agreement reached between the Defendant on the one hand and Mr. Lam and Mr. Kwong on the other. The remaining documents relied on are all letters from the Defendant sent after March 1985. They could not constitute any written consent from the Plaintiff. Nor did they refer to any existing agreement between the Plaintiff and the Defendant.

28. In my judgment, the alleged Proportional Repayment Agreement between the Plaintiff and the Defendant is not proved. That relieves me from having to decide whether if proved, the Proportional Repayment Agreement had any effebt bearing in mind my serious doubts expressed earlier as to the existence, or rather, lack of consideration.

Estoppel

29. As an alternative to the defence that there was a Proportional Repayment Agreement binding on the Plaintiff, the Defendant pleaded in paragraph 15 of his Re-Amended Defence that the Plaintiff had on various occasions "accepted" the Proportional Repayment Agreement and "encouraged" the Defendant to repay "his share" of the debt advanced to Wynne Ming.

30. It was further pleaded that pursuant to this "encouragement", the Defendant repaid "his share" of the debt on several occasions which were all accepted by the Plaintiff. Accordingly, it was said, the Defendant had acted to his detriment. There were also many other instances of detriment pleaded both originally in the Amended Defence and in the Re-Amended Defence. However, no evidence was led as to any of these other detriments.

31. Mr. Yim, on behalf of the Defendant, relies on the doctrine of promissory estoppel and in particular :

(i)    The alleged promises made by Mr. Edwards and Miss Wu of the Plaintiff during the meeting of 27th June 1985;

(ii) The acceptance of payments by the Defendant on 8th July 1985, 14th October 1985 and 9th December 1985.

32. The Defendant also sought to rely on alleged promises made by Mr. Lau in a meeting held with the Defendant at the end of 1985 and in a telephone conversation in January 1986. Neither of these' two instances was pleaded by the Defendant.

33. For reasons which I shall come to in a moment, I do not propose to go into the evidence of the Defendant and his secretary, Miss Ng in great detail. Suffice to say that on the material issue as to whether the Plaintiff had indicted that it accepted the Proportional Repayment Agreement, their evidence was strenuously denied by the Plaintiff's witnesses.

34. The evidence of the Plaintiff's witnesses has the advantage of being totally logical and consistent with all the documentation in the agreed bundle in front of me. In particular, I find Mr. Edwards a most impressive witness and clearly a witness of truth.

35. I cannot say the same for the Defendant's witnesses. Both the Defendant himself and Miss Ng were most evasive and hesitant when they were pressed as to the effect of the Plaintiff's various written demands which clearly indicated that the Plaintiff was at all times demanding the Defendant to repay the entire loan.

36. Let me deal with these documents in more detail. There is an internal memorandum of the Plaintiff in the agreed bundle dated 29th March 1985 (A-74) By this document, the Plaintiff's Guangzhou office (specifically Miss Ko) wrote to the Group Head Office of the Plaintiff, and in particular, Miss Betty Wu, that the Guangzhou office had received the OCEC letter of 25th March 1985 (A-73) and that the Guangzhou office had verbally indicated to Mr. Chen Xian of OCEC that the Proportional Repayment Agreement was not acceptable to the Plaintiff. A copy of this document was lised in the Defendant's list of documents. The Defendant, however, when asked about it by the Court, was unable to assist as to how and when such an internal document of the Plaintiff could have found its way to the Defendant.

37. The file note dated 29th March 1985 (A-76) is in the same category. This is a file note prepared by Mr. Edwards recording his telephone conversations with the Defendant and Miss Ng respectively explaining that the Plaintiff could not accept the Proportional Repayment Agreement. A copy of this document is listed as item 11 in the Defendant's list of documents. But again, the Defendant was unable to assist me as to when and how he got hold of this document.

38. Similarly, another file note prepared by Mr. Edwards on the meeting of 27th June 1985 (A-117) recording the Plaintiff's refusal to accept the Proportional Repayment Agrement was listed as item 12 of the Defendant's list of documents. The Defendant was again unable to say when and how he came into possession of this document.

39. The next document in the same category is a receipt signed by Mr. Edwards o?the first repayment made by the Defendant on 29th March 1985 (A-75). The receipt made it clear that the repayment was only a "part payment of presept excesses". This document was listed in Schedule 2 of the Defendant's list of documents. The Defendant admitted having received this document but claimed that his secretary did not explain the contents of it to him. Even if this assertion is true which I seriously doubt, the knowledge of the Defendant's secretary must be imputed to the Defendant so that as early as March 1985, the Defendant knew that the Plaintiff was not waiving the remaining 49% of the loan.

40. The letter of 5th October 1985 (A-158) is another document falling within the same category. This is a letter sent by the Plaintiff to Wynne Ming marked for the Defendant's personal attention. It demanded the repayment of the entire debt. This was after the Defendant's asserted acceptance by the Plaintiff of the Proportional Repayment Agreement in June 1985 and about the same time as the alleged acceptance of the same by Mr. Lau of the Plaintiff. This letter was listed as item 11 of the Defendant's list of documents under Schedule 2. The Defendant said perhaps this document was received by his secretary but it was not explained to him. Again, even if this is true, his secretary's knowledge is the Defendant's knowledge. One would have thought if the Defendant's assertions as to the Plaintiff's acceptance of the Proportional Repayment Agreement were true, the Defendant would have strenuously objected to this demand or at the very least sought clarification from the Plaintiff. Instead, the Defendant's case is that this letter marked for his personal attention, was simply filed away by his secretary without bothering to explain the same to him.

41. The letter of 15th October 1985 (A-166) is another letter from the Plaintiff in the same vein. By this letter, the Plaintiff informed the Defendant that after the latter's repayment of some HK$1.14 million (probably prompted by the aforesaid letter of 5th October 1988 (A-158)), the outstanding debt was HK$19.49 million odd, i.e. 100% of the outstanding debt. The letter ended thus : "all other terms and conditions of the loan remain unchanged". Again, this document was listed as item 13 of the Defendant's list of documents under Schedule 2. The Defendant similarly claimed that his attention was not drawn to this letter despite the fact that it was marked for his attention and involved a reminder of an outstanding loan of over HK$19 million.

42. There were other various demand letters from the Plaintiff all of which demanded the repayment of the entire loan. None was satisfactorily explained by the Defendant. I should also ',point out that the Defendant's secretary at the time was Miss.Ng. When asked about the letter of 5th October 1985 (A-158), Miss Ng. simply said the letter could have been opened by other account staffs at the Defendant's office. This was despite the fact that she was fully involved with the transaction so much so she was present at the crucial 27th June 1985 meeting. I find it incredible a letter of such importance addressed to the Defendant was received by some low rank employee of the Defendant and filed away without even alerting the Defendant's secretary.

43. These documents all indicate that the Defendant was fully aware of the Plaintiff's position which was that the full amount of the debt was due and payable by the Defendant. In questions put to the Defendant by me, this was accepted by the Defendant (on 27th May 1992 at about 12:30 p.m.)

"Q. Both you and your secretary knew that the Hongkong Bank,was pressing for the entirety of the loan, all HK$19 million of it ?

A. Yes.

Q. That was the position in October ?

A. Yes. That's the contents of the letter (letter of 15th October 1985 (A-166)].

Q. Was the position in March 1985 ?

A. Hongkong Bank was pressing me for repayment."

44. This was not denied by the Defendant's secretary (on 28th May 1992 at about 10:45 a.m.) :

"Q. When asked about these letters, Mr. Ng said both he and you knew that Hongkong Bank was pressing the entirety of the loan. Is he telling the truth ?

A. I subsequently knew they were pressing us for the entire loan. But this was at a later stage.

Q. I am talking about October 1985. When Ng said you knew Hongkong Bank was pressing for the entirety of the loan, he was not telling the truth ?

A. I can't say he was not telling the truth because I can't remember when I was aware of this.

Q. I asked him whether the position in March was the same and he said yes ?

A. Which year ?

Q. 1985. Would you disagree with what Mr. Ng said ?

A. As I can't recall, I can't disagree.

............

Q. ....... What is troubling me is that your evidence of June meeting is not consistent with the Bank's attitude both before and after the meeting ?

A. As I also find it surprising that is why in the repayment I sent it with a cover letter to say the repayment was made for our share because I find it confusing after the meeting.

Q. Confusing as to what ?

A. As we've sent the agreement but their attitude was they did not accept and it appeared they did not object we could not (sic) be repaying our share only. That is what we had been doing and they did not press us for repayment vigorously as long as we paid sour share. That is why I am not sure of the attitude of Hongkong Bank. That is why when making the repayment I, sent a covering letter. However, even if with covering letters they did not have much response.

Q. You call P. 166 not a response ? Is that not a response to your covering note ?

A.      Yes."

45. It will be remembered, of course, that the letter at p. 166 of the agreed bundle is the letter dated 15th October 1985 whereby the Plaintiff confirmed that the outstanding amount was 100% of the outstanding entire debt and that "ail other terms and conditions of the loan remained unchanged."

46. In my judgment, insofar as the evidence of the Defendant and Miss Ng conflicts with the evidence of Mr. Edwards, Mr. Lau and Miss Ko, I have no hesitation in preferring the evidence of the Plaintiff's witnesses and rejecting the evidence of the Defendant's witnesses. In coming to this concluson, I rely on my observation of the demeanour of all the witnesses in the box. I also rely on the documentation in the agreed bundle including in particular, the various documents I referred to above and the letter dated 12th September 1988 whereby OCEC made it absolutely plain that as far as they were aware, the Plaintiff had never accepted the Proportional Repayment Agreement. This last letter was never attacked by the Defendant nor the writer thereof called by the Defendant to refute the admission.

47. But even if the Defendant's version of events at the June 1985 meeting and the meeting with Mr. Lau in October of the same year bore any semblance of truth, I find that any representation or promise made by any of the Plaintiff's employees at either or both of these meetings was not unequivocal in that it was clearly rebutted or contradicted by written documents sent to the Defendant by the Plaintiff throughout this period. I also find that the Defendant_. did not rely on any such representation or promise as he knew all along that the Plaintiff was pressing for the repayment of the entire loan.

48. Moreover, even if the Defendant did rely on the alleged representation or promise, he suffered no detriment as what money he repaid to the Plaintiff, he was legally bound to do so viz-a-viz the Plaintiff under the 1983 loan agreement as well as Mr. Lam and Mr. Kwong under the November 1984 Proportional Repayment Agreement. There was no change of position to the Defendant's detriment.

49. The Defendant's defence to the debt claim must therefore fail.

Discharge of Guarantee

50. I can deal with the defences in relation to the 1983 Guarantee very briefly : they are not relevant. I have already expressed my view that the claim on the 1983 Guarantee is superfluous since the Plaintiff has to succeed on the debt before it can succeed on the guarantee claim. Once the defences relating to the loan fall away, the Defendant is liable to the' Plaintiff on the debt and that is sufficient for the Plaintiff's claim to succeed.

51. Be that as it may, since counsel for the Defendant had addressed me at length on the various defences to the guarantee claim I think I should give my reasons as to why, apart from relevance, I think these defences are bad.

52. The contention that the 1983 Guarantee is not supported by consideration flies in the face of the opening words of the 1983 Guarantee. The guarantee was given in consideration of the Plaintiff "making or continuing advances or otherwise giving credit or affording banking facilities ...... for as long as [it] think fit to [Wynne Ming]." It is indeed common ground that the Facility Letter was offered on the basis that past delinquencies of the 1981 loan should be regularised and consolidated into a larger loan. The 1983 Guarantee was part of the conditions imposed by the Facility Letter. There was clearly consideration.

53. It was then suggested that the liability of the Defendant would, or rather, should cease upon the dissolution of the partnership. This argument was, I think quite rightly, not pressed by Mr. Yim. This was a joint and everal guarantee given by the Defendant, Mr. Lam and Mr. Kwong as individuals.

54. The third defence was that the 1983 Guarantee was "superseded" by the Proportional Repayment Agreement. I have already held that the Proportional Repayment Agreement was never accepted by the Plaintiff nor binding on it. I cannot see how such a private agreement between the guarantors could relieve them from their respective liability towards the Plaintiff.

55. The fourth defence was that the 1983 Guarantee was dicharged by various acts or omissions on the part of the Plaintiff including the giving of time to other guarantors. The complete answer to these arguments lies in paragraph (6) of the 1983 Guarantee (A-20) :

    You shall be at liberty without thereby affecting your rights against us hereunder and without notice to us and without our assent or knowledge at any time to determine enlarge or vary any credit to the Principal to vary exchange abstain from perfecting or release any other securities held or to be held by you ....... and to compound with give time for payment to accept compositions from and make any other arrangements with the Principal ....... and no act or omission on your part which, but for this provision, might operate to exhonerate us or any of us or any other person, or which would not have discharged or affected our liability, had we been principal debtor instead of guarantor, shall in any way exhonerate us or any of us or any such person, or discharge or diminish the validity of this guarantee or our liability hereunder."

56. Mr. Yim boldly argues that there was an implied term that this condition would not operate in the present circumstances. Quite apart from the fact that this was never pleaded, he was unable to explain to me why there had to be implied a term rendering an express term of the contract of guarantee ineffective.

57. In my judgment, there is no substance in any of these submissions. Indeed, the point is so unarguable that I would not have given leave to the Defendant to further re-amend his defence raising these points at the start of the trial had my attention been drawn to this clause.

58. For these reasons, the Plaintiff is clearly entitled to judgment on its claim which was entered against the Defendant on 1st June 1992 with costs.