UNITED OVERSEAS BANK LTD (HONG KONG BRANCH) v. TOTAL ENTERPRISE LTD AND OTHERS

HCA 513/2023

[2026] HKCFI 616

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 513 OF 2023

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J U D G M E N T

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INTRODUCTION

1.  This is the appeal hearing of Choi Chak Man, the 3^rd Defendant and Cheuk Hung Chuen, the 4^th Defendant against the Order of Master Kinsey Kang dated 25 June 2025.

2.  The Master, inter alia, granted in favour of the Plaintiff, United Overseas Bank Limited (Hong Kong Branch), hereinafter “the Bank”, a summary judgment against the 3^rd and the 4^th Defendants for the sum of HK$172,242,586.53 plus further interests as claimed under the Amended Statement of Claim re-filed on 10 September 2024; and struck out the Amended Counterclaim of the 3^rd and the 4^th Defendants in the Amended Defence and Amended Counterclaim (“ADCC”) re-filed on 18 November 2024.

3.  This is a very simple and straightforward case where the Bank sues the 3^rd and the 4^th Defendants on the letters of guarantee dated 25 March 2015 (the “D3 Guarantee” and “D4 Guarantee”, collectively, “Guarantees”).

4.  By the Guarantees, the 3^rd and the 4^th Defendants irrevocably and unconditionally guaranteed any and all amounts which are owing on the account of the 1^st Defendant (Total Enterprise Limited) (“1^st Defendant”) or the 8^th Defendant (“the 8^th Defendant”) from time to time.

5.  In the present appeal, the 3^rd and the 4^th Defendants seek to resist the application for summary judgment on the grounds of misrepresentation or estoppel (“‘Misrepresentation or Estoppel’ Ground”) and collateral agreement (“Collateral Agreement Ground”).  

MATERIAL FACTS

6.  The Bank agreed to extend term loan facilities with a total facility limit of HK$183,026,328.43 to the 1^st Defendant under the Term Loan Facility Letter. (See Clause (c) I).

7.  Under the Uncommitted Banking Facility Letter dated 27 May 2022, the Bank agreed to extend facilities with a total facility limit of HK$56,020,000 to the 1^st Defendant. (Clause 2.1)

8.  Both 2022 Facility Letters were duly executed by the Bank and the 1^st Defendant and were countersigned and acknowledged by the 2^nd to 25^th Defendants, including the 3^rd and the 4^th Defendants.

9.  The 2022 Facility Letters were supplemented by the Specific Terms for Term Loan and Revolving Loan Facilities and the Standard Terms and Conditions for Banking Facilities (2020 edition).

10.  It is one of the conditions precedents to the grant of the facilities under the 2022 Facility Letters for the duly executed Guarantees to remain “in full force and effect” (Clause (D) 2 of the Term Loan Facility Letter; Clause 4.1 of the Uncommitted Banking Facility Letter).

11.  On 25 March 2015, the 3^rd and the 4^th Defendants executed the Guarantees in favour of the Bank. Page 1 of the Guarantees provides that: -

“the Guarantor hereby unconditionally agrees and undertakes with the Bank to pay to the Bank on demand in writing all sums of money and liabilities whether certain or contingent which may at any time prior to the date hereof already be or now are or shall hereafter at any time become due owing or incurred to the Bank (the “Liabilities”) on any account whatsoever by the Customer whether as principal or surety whether by the Customer solely or jointly with any other person or persons or from any firm in which the Customer may be a partner and in whatever style, name or form including…”.

12.  Further, as agreed in Part 3 of the Schedule to the Guarantees, the liability of the 3^rd and the 4^th Defendants to the Bank would be unlimited.

13.  Since 10 October 2022, the Bank made various demands for the repayment of all sums due and owing to the Bank pursuant to the Facility Letters and the other securities including the Guarantees.

14.  Notwithstanding repeated demands against the 1^st Defendant and its sureties including the 3^rd and the 4^th Defendants, the outstanding indebtedness remains unsettled.

15.  Mr Pang SC for the 3^rd and the 4^th Defendants basically submitted that it is the 3^rd and the 4^th Defendants’ case that on or around 25 Marh 2015, a bank officer, Mr Tom Chow met with the 2^nd, 3^rd and the 4^th Defendants at the Bank’s Tsim Sha Tsui office during which: -

(1)  The 3^rd Defendant indicated to Mr Tom Chow that the 3^rd and the 4^th Defendants would only be prepared to provide personal guarantees on the conditions as agreed between Tsoi Wai and the Bank, which Mr Tom Chow acknowledged.

(2)  The Bank then through Mr Tom Chow represented to the 3^rd and the 4^th Defendants that their personal liabilities under any personal guarantees, if provided, would: -

(a)  Be limited to the liabilities of the 1^st Defendant and/or the 8^th Defendant under the 2015 Facility Letter (if any) and would not extend to any liabilities of the 1^st Defendant and/or the 8^th Defendant arising under any other facilities to be granted to the 1^st Defendant and/or the 8^th Defendant by other facility letter(s), despite the actual terms of personal guarantees to be executed by the 3^rd and the 4^th Defendants.

(b)  In any event, cease to be valid vis-à-vis the 3^rd and the 4^th Defendants if they cease to be a director of Mr Tsoi’s company, namely the 9^th Defendant which was at the material time and is still the sole shareholder of the 8^th Defendant.

16.  However, the fact is that there are no contemporaneous documents to evidence such oral representation. Put it plainly, it is only the 3^rd and 4^th Defendants’ own say so without any corroborating evidence.

17.  Further, the 3^rd and the 4^th Defendants ceased to be shareholders/directors of the 8^th Defendant/the 9^th Defendant after 1 April 2015, i.e. a few days after the 3^rd and the 4^th Defendants executed the Guarantees on 25 March 2015. In other words, on the 3^rd and the 4^th Defendants’ case, their liabilities under the Guarantees lasted for 5 to 6 days only.

18.  Mr Lok for the Bank invites this Court to note the following five salient material facts. First, the loans under the 2022 Facility Letters were in fact made available and drawn down by the 1^st Defendant from time to time. Therefore, there can be no dispute that the 1^st Defendant is indebted to the Bank.

19.  Secondly, the 3^rd and the 4^th Defendants are intricately linked to the relevant parties to the relevant transaction documents. Specifically: -

(1)  The 3^rd Defendant is (i) the brother of the 2^nd Defendant, Mr Tsoi Wai (“the 2^nd Defendant”), who has or had been a shareholder (by himself and/or through his corporate vehicle) and director of 1^st Defendant from 18 March 1997; and (ii) the husband of the 4^th Defendant.

(2)  The 4^th Defendant was a shareholder and director of the 1^st Defendant from 18 March 1997 to 10 February 2015.

(3)  At the time of signing the Guarantees: -

(i)  the 3^rd and the 4^th Defendants were directors of the 8^th Defendant (until 1 April 2015);

(ii)  The 9^th Defendant was the 100% shareholder of the 8^th Defendant;

(iii)  the 3^rd and the 4^th Defendants were directors/shareholders of the 9^th Defendant (until 1 April 2015).

20.  Thirdly, the 3^rd Defendant himself has been engaged in “real estate investments and development in Mainland China” and has “always been well connected in Mainland China”). Moreover, based on public records, the 3^rd and the 4^th Defendants have considerable experience in executing legal or statutory documents, specifically “all-monies” security documents. In particular, the 3^rd and the 4^th Defendants has each executed (at least) 94 and 85 legal/statutory documents from 1997 to 2023.

21.  Fourthly, a number of other parties have also executed other securities in favour of the Bank. Default judgments have already been entered against the 1^st, 2^nd, 5^th to 8^th, 13^th to 17^th and 20^th to 25^th Defendants. Summary judgment has also been entered against the 18^th Defendant (see [2025] HKCFI 558).

22.  Fifthly, properly understood, this is not a case where the 3^rd and the 4^th Defendants are saying that they did not know what they were signing (i.e. the Guarantees). On the contrary, their case is that their asserted representation in fact contradicts the actual terms of the Guarantees. Hence, the 3^rd Defendant defines the representation to be “despite the actual terms of the personal guarantees to be executed by me and my wife”.

23.  In other words, on the 3^rd and the 4^th Defendants’ own case, they were fully aware of the effect and meaning of the Guarantees. They were basically told to go ahead and execute the Guarantees which carried unlimited effect (but that the Bank would somehow not act in accordance with the written terms of the executed Guarantees).   

24.  Mr Lok, thus, impressed upon this Court that it bears emphasis that “[t]he present case involves the banker-customer relationship built on substantial credit facilities in a purely commercial and business context. It is in such context that the allegations in respect of any promise, representation and understanding of the parties are to be assessed objectively. In such context, any suggestion that the Bank somehow promised or represented not to enforce its rights under the loan and the securities at all is inherently difficult to take root” (United Overseas Bank Ltd v. Gracewood International Limited [2021] HKCFI 2950 at §25).

APPLICABLE LEGAL PRINCIPLES

25.  The relevant legal principles are well established and well-known to this Court. DHCJ Kent Yee in United Overseas Bank Ltd (supra) at §§23-25 rightly stated that summary judgment proceedings are eminently suitable for claims on “dishonoured guarantees” when the primary facts are not in doubt and the only result of letting the case go to trial would be to delay the Bank further in the recovery of the money plainly due to it.

ANALYSIS AND DETERMINATION

26.  I have considered Mr Pang SC’s written and oral submissions in detail. Despite the eloquent submissions of Mr Pang SC, in my view, this is a clear case suitable for summary judgment. I will thus dismiss the present appeal for the following reasons.

27.  First, the asserted representations contradict the clear terms of the Guarantees and are not supported by any contemporaneous documents and/or communications.

28.  Mr Lok is correct that the alleged misrepresentations flatly contradict the terms of the Guarantees, which clearly provide that the 3^rd and the 4^th Defendants’ liability would be unlimited. As a matter of law, there are ample authorities against finding an alleged representation which flatly contradicts the clear wordings of an agreement:-

(1)  It is well-established that there can be no reliance on misrepresentation where “the true position appeared clearly from the terms of the very contract which the claimant says it was induced to enter into by the misrepresentation” (Peekay Intermark Ltd v. ANZ Banking Group Ltd [2006] 2 Lloyd’s Law Report 511 §43).

(2)  To also borrow the observation of Ma J (as he then was) in Chekiang First Bank Ltd v. Ng Chun Hing Benjamin (unrep, HCA 3473/2000, 12.12.2001), §20: “In view of the defendant’s failure to condescend to particulars of this important allegation, I find the defence implausible in the extreme and particularly so when one looks at the wording of the Guarantee itself, which made it clear that liability thereunder was unlimited”.

29.  I agree with the observations of Mr Justice Ma (as he then was). I find it hard to believe that the 3^rd and the 4^th Defendants as seasoned commercial parties could genuinely believe that they signed the Guarantees not for the purpose of providing for unlimited and continuing liability as set out in the written terms.

30.  I also find it hard to believe that the Bank will go all the way to request the 3^rd and 4^th Defendants to execute the Guarantees which were to last for 5-6 days. This is not capable of being believed. I agree that this does not make any commercial sense, particularly when viewed against the background that the Bank was extending facilities of over HK$997 million at the material time.   

31.  Mr Lok for the Bank is also correct that there is no evidence (or suggestion) that they took any steps whatsoever (over the past 10 years or so) to see if the Guarantees (executed just several days before they ceased to be shareholders/directors of the 8^th or the 9^th Defendant) had ceased to have effect over them.

32.  On the contrary, the 3^rd and the 4^th Defendants have countersigned 15 previous facility letters (issued by the Bank, in favour of the 1^st Defendant and/or the 8^th Defendant) between 2015 to 2022 in their capacities as personal guarantors all of which provide that it is one of the conditions precedent of the facilities that the Guarantees shall remain in full force and effect; and (b) were acknowledged and countersigned by the 3^rd and the 4^th Defendants.

33.  Further, both the 3^rd and the 4^th Defendants signed two fresh facility letters issued by the Bank on 27 May 2022 (i.e. the 2022 Facility Letters) i.e. some 7 years after they apparently ceased to be director/shareholder in the 8^th or the 9^th Defendant.

34.  Secondly and relevantly, despite the Bank issuing demand letters to the 3^rd and the 4^th Defendants in October 2022 and March 2023, there is no evidence of the 3^rd and the 4^th Defendants responding at any time e.g. that the Guarantees had ceased to have effect over them 7 years ago.  Indeed, both letters expressly refer to the Guarantees. I agree that if the asserted representations exist, the 3^rd and the 4^th Defendants would have raised that defence at the material time.

35.  Thirdly, Mr Lok is correct that the 3^rd and the 4^th Defendants have routinely signed banking/guarantee documents. They have considerable experience in executing legal/statutory documents, including “all-monies” security documents, over the years.

36.  Fourthly, Mr Lok submitted that the 3^rd and the 4^th Defendants rely on “fraudulent” misrepresentation as their primary ground. It is pleaded that the alleged representations (relating to the scope and effect of the Guarantees) were made by the Bank “fraudulently”.

37.  As a matter of law, it is correct that“[i]f the defence relied on is fraud, the affidavit should state the particulars of the fraud… A mere vague general allegation of fraud is useless” (HKCP 2026, §14/4/4 (p.373)).

38.  I agree that the evidence adduced by the 3^rd and the 4^th Defendants is not commensurate with the seriousness of what is alleged and its inherent improbability.

(1)  The 3^rd and the 4^th Defendants allege that “before executing the [Guarantees]”, it was “orally represented” to them in the Bank’s Tsim Sha Tsui office that the representations as pleaded in ADCC §9.2.2.2 was made. But they in fact acknowledge that there is a “lack of any written record of the Representation”.

(2)  I do not accept the 3^rd and the 4^th Defendants’ assertion that the absence of documentary evidence is “nothing surprising”. The Guarantees are serious commercial documents. It is difficult for this Court to accept the 3^rd and the 4^th Defendants’ defence on their mere say so without any corroborating evidence.

39.  Fifthly, I also take into account the following evidence to come to the view that the 3^rd and the 4^th Defendants’ defence is not capable of being believed.  

(1)  The Bank has confirmed that Mr Tom Chow took up a supervisory role of relationship managers and was not the account manager in question.   

(2)  Ms. Ng has also confirmed that she has never heard Mr Chow making such similar representations and that it would not make any sense for those representations to be made.

(3)  The Bank has explained that Mr Tom Chow has already left Hong Kong and that he did not maintain any contact with the Bank’s staff. It is open to the 3^rd and the 4^th Defendants (who bear the burden of showing a bona fide defence) to contact Mr Tom Chow if they consider his evidence to be material.  It is not explained why this was not done.

(4)  It is established law that “[a] desire to investigate alleged obscurities and a hope that something will turn up on the investigation cannot, separately or together, amount to sufficient reason for refusing to enter judgment for the plaintiff” (HKCP 2026 §14/4/3 (p.372)).

40.  Sixthly, I agree that it is irrelevant that the 3^rd and the 4^th Defendants say that they did not understand the terms of the 2022 Facility Letters. I do not see how the 3^rd and the 4^th Defendants can rely on the defence of non est factum. They signed on the Guarantees. It matters not that they do not understand English or they had not perused the terms of the Guarantees in detail and fully comprehend them. Absent any vitiating factors, they are bound by the Guarantees. On the facts of the present case, there are no vitiating factors.

41.  Finally, I agree that this is not a case where the 3^rd and the 4^th Defendants somehow misunderstood the nature or effect of the Guarantees. Hence, the observations of DHCJ Le Pichon in Dah Sing Bank Ltd, in my view, does not assist them. Every case depends on its own facts. In Kingston Finance Limited, the defendant was “misled… into signing the Resolution under the guise that it was merely a routine company document of D1”; and crucially, the defendant “had no reason to think that it was a document of consequence” (§29). Here, the 3^rd and the 4^th Defendants were aware that the documents they were signing were “possibly for statutory filings or corporate compliance” relating to “my [i.e. the 3^rd Defendant] companies” (in the 3^rd Defendant’s words, these refer to his “property development and property investment business held under companies incorporated in Hong Kong”), but asserted that they did not have “any reason to request” for full copies of the Facility Letters.  

42.  In relation to the defence of estoppel and collateral agreement, Mr Pang SC fairly agrees that they rise and fall together with the 3^rd and the 4^th Defendants’ case on the misrepresentation claim.

43.  To sum up, I do not find there are any bona fide defence or triable issues in relation to the Bank’s very straightforward and simple claims.

44.  As to the striking out application, the 3^rd and the 4^th Defendants have not advanced any independent reason as to why the Counterclaim should stand if the summary judgment application is granted. The Counterclaim is entirely premised on the defences advanced in ADCC, which are subject to the summary judgment application.

45.  Mr Lok also reminded this Court that given that the “necessary constituent of the counterclaim has been the subject of a distinct determination on the merits which is fundamental to the decision in the summary judgment application”, the Court should strike out the Counterclaim, as it is plain and obvious that the 3^rd and the 4^th Defendants are precluded by issue estoppel from advancing a contrary position and cannot succeed at trial (Sand Aire Ltd v. Jin Zhanjie [2021] HKCA 1672, §§46-47).

DISPOSTION

46.  For all the reasons stated above, I dismiss the appeal with indemnity costs[1] to be taxed if not agreed with certificate of one counsel.

47.  Finally, I thank counsel for their very helpful and able assistance rendered to this Court.