BANK OF CHINA, HONG KONG BRANCH v. WONG WAI SEE AND OTHERS

HCA 7589/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CIVIL ACTION NO. 7589 OF 1999

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J U D G M E N T

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1. In this case the Plaintiff sought to recover money under a guarantee against all three Defendants. Judgment has already been obtained against the 1st and 3rd Defendants. Hence the hearing before me only concerned the liability of the 2nd Defendant. In fact the Plaintiff had also obtained judgment against the principal debtor, the G Investment Limited in HCMP No. 2389 of 1999 on 2 August 1999.

2. The Plaintiff was a bank. The Defendants were siblings and were shareholders and directors of a company called G Investment Limited (hereinafter called "the company"). In April 1997 the company wanted the Plaintiff to finance its purchase of a property known as flat E, 23/F Block 12, Sea Crest Villa, Phase IV, No. 18 Castle Peak Road, Sham Tseng, New Territories (hereinafter called "the property"). It would appear that the company was specifically acquired for the purpose of holding the property and had a very low capitalization. The Plaintiff agreed to do so and had set out the terms for an installment loan for such purpose in a facility letter. The company accepted the terms of the loan by signing on a copy of the letter.

3. The Defendants' case was that although all three Defendants were directors of the company, in fact the 3rd Defendant was the one in charge of the affairs of the company. I accept and find this to be the case.

4. The loan was for the amount of $5.25 million. It was repayable by monthly installments spreading over 261 months. The terms of the loan were set out in a facility letter. Basically the terms required the company to give a first legal charge on the property as well as to provide a joint and several guarantee. There is however a dispute between the parties over the question of the guarantee. According to the terms of the facility letter produced by the Plaintiff which was signed by the company, the three guarantors specified in the letter were Wong Lai See, Wong Wai See, and Wong Tak Man German (the three Defendants in this action). However, the 2nd Defendant disputed that there was any agreement between the company and the Plaintiff that she should be one of the guarantors.

5. It is not in dispute that sometime on 23 March 1997 the company entered into an agreement to purchase the property at the price of $7.55 million and that the completion date of the sale and purchase was 19 June 1997. In or about April 1997, the Plaintiff had a promotion campaign with a view of promoting its mortgage business. The 3rd Defendant Wong Tak Man German approached the Mongkok Branch of the Plaintiff and got in touch with Miss Lo Suk Yee (PW1) to ask for a loan of $5.25 million. It is also common ground that Miss Lo had contacts with the 3rd Defendant only and had never contacted the 1st or 2nd Defendants or any one else in the company in connection with this loan transaction. According to Miss Lo, the 3rd Defendant appeared to be rather familiar with the procedure and the bank's requirements for processing this loan application. Whether the information obtained by the Plaintiff for processing this application was provided by the 3rd Defendant at the specific request of Miss Lo or by him without any prompting from Miss Lo, or by the Plaintiff's own investigation was not material. I think that it must be a combination of all three. It is plain, and I so find that by 22 April 1997 when Miss Lo drew up a proposal form in respect of this loan for submission to the credit department of the Plaintiff for approval, Miss Lo was in possession of a company search of the company, copies of the identity cards of all three Defendants, one Wong Pik Ying and one Wang Cho Hong Peter and also information on their income, such as their tax demand notes and also their bank statements. I find that all these documents and information were provided to Miss Lo of the Plaintiff by the 3rd Defendant. The Plaintiff also caused a company search to be done in relation to the company. The result of the search indicated that the company had 5 shareholders, being the three Defendants, Wang Cho Hong Peter and Wong Pik Ying. The search also indicated that the 2nd Defendant Wong Lai See was the largest shareholder.

6. The Plaintiff had its own policy on lending money to its customers. Notwithstanding a property was offered as security for the loan, for an installment loan, the Plaintiff would make sure that the amount of the installment to be paid each month would be less than half of the amount of the average monthly income of the borrower. If the income of the borrower was insufficient, the Plaintiff would require guarantors. The criterion would then be that the amount of the monthly installment would not be more than half of the total monthly income of the borrower and the guarantors. Also in the case of mortgage loan for the purpose of purchasing flats in the name of limited companies, the Plaintiff would also require the major shareholders and directors of the borrower company to give personal joint and several guarantee for the loan.

7. According to the evidence of Miss Lo of the Plaintiff, after collecting the information on the company, its shareholdings and directorship etc., a valuation report on the property and also the information on the income of the shareholders and directors of the company, she made a proposal to the credit department of the Plaintiff recommending to the Plaintiff to make a loan in the sum of $5.25 to the company repayable by monthly installments over a period of 15 years. On this basis the monthly installments would be about $52,471.05. She made the recommendation on the basis that the 1st, 2nd and 3rd Defendants were to give a joint and several guarantee for the loan. Her proposal and recommendation were accepted by the credit department.

8. There must be active contacts between Miss Lo and the 3rd Defendant during this period of time. According to Miss Lo whose evidence I accept, after the loan was approved, the 3rd Defendant told her that he considered that the monthly installments in the sum of $52,471.05 per month might be too much and the 3rd Defendant asked to be required to repay $45,000 per month only. Accordingly Miss Lo made an amended proposal on 2 May 1997 for the monthly installments to be varied to $45,000 per month. Of course with the lowering of the amount of monthly repayments, the loan would be repaid in the longer period of 261 months. This amended proposal was accepted by the credit department on 5 May 1997.

9. The information on the income of the 1st and 2nd Defendants obtained by the Plaintiff would include the tax demand of the Government and also their bank passbooks which showed a regular monthly income. In relation to the 3rd Defendant, the bank passbook did not show any regular income. In fact the 3rd Defendant told Miss Lo that he was employed by a travelling agency and his income was unstable but the average would be about $30,000 per month. Miss Lo had also obtained a letter from the company to certify the income of the 3rd Defendant to be $30,000 per month. I do not think that the contents of this letter are true as it is plain that the company would not have any cause to employ the 3rd Defendant at any substantial salary, nor would the company have the means to pay such salary to the 3rd Defendant. I find that this letter was generated solely for the purpose of convincing the Plaintiff that the 3rd Defendant also had a substantial income so as to induce the Plaintiff to make the loan applied for. Apart from obtaining the income proof of the three Defendants, the Plaintiff had also obtained the income proof of Wang Cho Hong Peter, and Wong Pik Ying Esther. Mr Wang and Miss Esther Wong were also known to Miss Lo as being shareholders of the company although according to Miss Lo's understanding, each of them only held 0.22% of the company.

10. The total income of the three Defendants and also the other shareholders as reported to the Plaintiff would be slightly more than two times the monthly repayment sum of $52,471.05. In fact it was based on this total income that Miss Lo made the recommendation to the credit department of the Plaintiff to grant the loan to the company. It was also part of the recommendation of Miss Lo that the joint and several personal guarantee of the three Defendants be obtained. It is clear that on the basis of the income of just the 1st and 3rd Defendants alone, it would be against the policy of the Plaintiff to grant an installment loan which would require a monthly repayment of $52,471.05 or even $45,000.

11. Having decided to grant the loan, the loan department of the Plaintiff issued an instruction letter dated 12 May 1997 to its solicitors Messrs Ho & Wong instructing them inter alia to prepare a first legal charge of the property. With the instruction letter the Plaintiff also enclosed its standard form joint and several guarantee which the Plaintiff would expect the three Defendants to sign and also a facility letter setting out the terms and conditions of the loan for the signature of the company. By clause 10 of the instruction letter the Plaintiff instructed Ho & Wong:

"... enclosed is the Deed of Guarantee which shall be signed by Mdm. Wong Lai See, Mdm. Wong Wai See and Mr Wong Tak Man, German. Please witness and return to us."

As regards the facility letter, clause 3 of the instruction letter said:

"Please advise the borrower to initial on every page of the facility letter to show consent the terms and conditions."

In fact the Plaintiff had also taken the precaution in specifically instructing Ho & Wong to advise and invite the mortgagor to take separate and independent legal advice.

12. According to the evidence of one Mr Lo, a clerk of Ho & Wong, after he obtained the instruction letter from the Plaintiff, he arranged with the 3rd Defendant to come to his firm to execute the documents. He told the 3rd Defendant to come with the other directors and guarantors. He confirmed that the Plaintiff had sent to his firm the standard form guarantee, the facility letter, the direct debit authorisation form and also the printed form of certified extract of minutes of the board resolutions.

13. According to Mr Lo, the three Defendants came to his office on or about 18 June 1997. He asked them for their identity cards and made a photocopy of them all on one page. The file of Ho & Wong on this matter had been destroyed after the contents of the file had been microfilmed. He produced a microfilm printed copy of the page containing the three identity cards of the Defendants. He said that he explained to the Defendants the contents of the legal charge, the guarantee and also the facility letter. In the course of explaining the contents of the guarantee he noticed that the name of the 2nd Defendant was omitted from the section in Part B of the schedule which set out the names of the guarantors, and also in the section for the signatures of the guarantors. He suggested that either the document was to be returned to the Plaintiff for the Plaintiff to put back the missing name of the 2nd Defendant before the parties were to sign the document, or alternatively all three Defendants could sign on the document first and the missing name of the 2nd Defendant could be added in by the Plaintiff afterwards. According to him, the Defendants said that they were busy and would not want to come again for the execution of the document. Hence he allowed the Defendants to sign on the guarantee. He put down the name of the 2nd Defendant in pencil against her signature in the section for signature but he had not put down her name in the section listing out the names of the guarantors. He made a photocopy of the document and allowed the Defendants to take away that copy in that form. He said that the facility letter was sent to him in duplicate. The 3rd Defendant signed on both copies for and on behalf of the company. However, he did not notice at the time that the 1st Defendant had signed on the space for witness. He also said that in fact the mortgage and also the extract of the minutes of the board resolutions were also signed before him on the same occasion.

14. According to him, after the parties left, he asked one of his colleague Mr Luk to contact the Plaintiff. His colleague took the guarantee to the Plaintiff to rectify by adding the name of the 2nd Defendant to Part B of the schedule at the section for the list of names of guarantors. In relation to the section for signature, the name of the 2nd Defendant written in pencil was erased and in place thereof her name was typed in. After the rectified document was returned, Mr Lo then signed his own name as witness to the signatures. He also told me that in going through the documents, he discovered that the 1st Defendant had signed as witness to the signature of the company in the facility letter. So he crossed out her name and put his own in instead. Of course since the facility letter was signed in duplicate, and the Defendants having been given one of the duplicate copies, he could only do so on the copy which was meant to be returned and kept by the Plaintiff.

15. The 2nd Defendant's evidence on the relevant events was very different. She told me that she was asked by her younger brother to be a shareholder and director of the company because she was told that only by so doing could the Government's Company's regulations be complied with. She said that at the time she asked the 3rd Defendant whether the company's liability was limited and she was told that the liability was limited and that her liability for joining the company as director and shareholder would be not more than $100,000. She was aware that the company was a shell company without any substantial assets or capital. She also said that she was generally aware that the 3rd Defendant intended to use the company to buy the property for his own use and that the 3rd Defendant had promised her that it was his responsibility to pay for the property.

16. She explained that this was not the first occasion of her having had any property dealing together with her younger brother, the 3rd Defendant. She had a property at Tsuen Wan Centre which was held in the joint name of the 3rd Defendant. The property was mortgaged to the Hong Kong Bank. In April 1997, the 3rd Defendant also wanted to buy a property at Kingswood Villas at Tin Shui Wai. He asked for her support and she agreed to be a guarantor for him, and in order to allow him to obtain the mortgage with her as a guarantor, she gave him copies of her identity card and also her income proof including copies of her tax demand note and also her bank passbook. She said that later she was told that the 3rd Defendant did not require her to be a guarantor in relation to this property at Kingswood Villas any more, but instead he would require the information to obtain a re-mortgage in respect of the Tsuen Wan Centre property. She agreed. Accordingly the Tsuen Wan Centre property was redeemed from the Hong Kong Bank out of moneys raised by a re-mortgage of the property to the Belgian Bank. There was a small surplus which was kept by the 3rd Defendant.

17. Thus the 2nd Defendant's case was that it was not surprising that the 3rd Defendant would be able to pass on to the Plaintiff her copy identity card and also her income proof.

18. As to the signing of the various documents, the case of the 2nd Defendant was that she had never been to the office of Ho & Wong to sign anything. She contended that the fact that all the three identity cards of all three Defendants appearing on one single page did not necessarily support the contention that the three of them went to Ho & Wong on the same occasion and thus have their identity cards copied on a single occasion. It was contended in effect that such sheet of paper containing the copy identity cards of all three could be easily arranged. However, the 2nd Defendant admitted that the signature on the guarantee was indeed her signature. She said that she signed it in the shopping arcade of either Luk Yeung Sun Chuen or Nam Fung Centre at Tsuen Wan. Her evidence was that the 3rd Defendant arranged to meet her there and she was asked to sign the documents at one of the fast food shops in either one of the shopping arcades. Her case was that before she signed, the 3rd Defendant told her that she was required to sign as a director of the company and only as a witness. She said that she noticed at the time of signing that her name did not appear in the section for the names of guarantors, and she thought that the section where she put her signature was meant for the signature of witnesses to the document. However, if she were to sign as witness, she was unable to say where were the signatures of the guarantors which she was supposed to be witnessing.

19. To support her case, the 2nd Defendant was able to produce a photocopy of a guarantee which only contained two names in the section meant for setting out the names of the guarantors, and against her signature, her name appeared in hand writing and not in type written form. It was her case that at the time when she signed, her name in handwritten form had been written in pencil on the document. She insisted that she only intended to sign as a witness.

20. The other document which bore her signature was the extract of the minutes. According to the 2nd Defendant, this document was also signed in Tsuen Wan but not on the same occasion as the guarantee. She said that at the time of her signing, the document also contained some hand written endorsement in pencil which was not found in the copy now produced by the Plaintiff in the hearing. She further produced a photocopy of the extract of the minutes which contained certain marks on the second page which indicated that there must be some marking on the original document out of which the copy was taken. Also on the first page of the document produced by her, it merely showed one signature of the 3rd Defendant whilst the one produced by the Plaintiff contained the signatures of all three Defendants. However she admitted that in fact she had also signed on the first page of the extract of minutes. Hence it must be the case that after all three Defendants had signed on the second page, a photocopy of the extract of minutes was taken and then the 1st and 2nd Defendants then signed on the front page of the document on a later occasion. There was no explanation as to why this document was signed in this way.

21. According to the evidence of the 2nd Defendant, when she was asked to sign the minutes, she was also shown the facility letter by the 3rd Defendant. She was sure that the facility letter shown to her did not require her to be one of the guarantors as one of the conditions for the loan.

22. The 1st Defendant also gave evidence. Her evidence was that she signed the guarantee at the office of Messrs Lawrence Pang & Co., who were the solicitors acting for the company in the purchase of the property. She confirmed that she had never been to the office of Ho & Wong and there was no occasion when she attended any solicitor's firm together with the 2nd Defendant. She also confirmed that at the time when she signed on the guarantee, she did not see the name of the 2nd Defendant on the list of guarantors under Part B of the schedule.

23. I have no hesitation in holding that it had always been the requirement of the Plaintiff that the conditions for the loan would include a joint and several guarantee to be given by all three Defendants. This is amply supported by the documents. The recommendation given by Miss Lo to the credit department on 22 April 1997 made it clear that the loan should be supported by a joint and several guarantee given by all three Defendants. The 2nd Defendant was the largest shareholder of the company and the income of the 1st and 3rd Defendants together was just not sufficient to meet the criterion of the Plaintiff for making an installment loan requiring a monthly repayment of $45,000. In coming to this view, I fully appreciate that there was ample evidence to show that Miss Lo was rather keen in seeing to that the Plaintiff would make the loan and in making her recommendation. She had obviously overlooked the fact that evidence in support of the income of the 3rd Defendant was rather shaky. Apparently she had also overlooked the fact that the 3rd Defendant claimed to her that he was employed by a travelling agency, yet the employer's letter produced by him was issued by the company, which was obviously not a travelling agency and which was not in any position to employ the 3rd Defendant. In fact I am of the view that if the Plaintiff's attention was brought to the unsatisfactory nature of the income proof of the 3rd Defendant, there would even be stronger reason for the Plaintiff to insist that the 2nd Defendant, being the largest shareholder and being one with a stable income, must be made one of the joint and several guarantors.

24. In this respect, I would reject the evidence of the 2nd Defendant insofar as it was suggested that at one point of time, the Plaintiff had issued a facility letter which would indicate that she was not required to be a guarantor. I found it most surprising that the copy facility letter which the 2nd Defendant managed to produce consisted only with the last page (i.e. page 4) of the letter. No doubt this page was produced in order to show that the form of signature by those signing on behalf of the Plaintiff was different from that appearing on the copy facility letter in the Plaintiff's hand. The explanation given by the 2nd Defendant was that she did not in fact keep any document of the company. All the documents of the company were kept by the 3rd Defendant who disappeared after June 1999. She merely managed to obtain photocopies of some of the documents from searching the files and cartons left behind by the 3rd Defendant from various places where he had resided. While I am perfectly prepared to accept that in fact it was the 3rd Defendant who kept all the documents of the company, I see absolutely no reason why the copy of the facility letter kept by him should only consist of the last signature page. The facility letter was in duplicate for the obvious reason that one copy was intended to be signed and returned to the Plaintiff and another copy was to be kept by the company as borrower. There was really no reason for the company merely keeping the last signature page of the letter only. That page would not show the terms of the loan and would have been of little value as a record to the company. The inevitable conclusion that I would draw is that the other pages of the letter would show clearly that it was a condition of the loan that all three Defendants were required to be the joint and several guarantors and the 2nd Defendant would find it inconvenient to her case to produce a full version of the letter.

25. However, the evidence on the circumstances of the execution of the guarantee by the 2nd Defendant was more controversial. On this point, I do not find the evidence of either the Plaintiff or the Defendants to be entirely satisfactory. In respect of the evidence of both sides, there were a number of unsatisfactory aspects.

26. The Plaintiff's case on the circumstances of the execution of the guarantee was entirely dependent on the evidence of Mr Lo, the clerk to Ho & Wong. On his evidence, he noticed that the 2nd Defendant's name was omitted from the guarantee but he considered that he should not add in her name because the type face of the typewriter of his firm would be different. However, I do not see this as a valid reason for his not adding in the name. He had been working in a solicitor's firm for many years and should surely know that legal documents may be amended by addition and alterations so long as the addition and alterations are properly acknowledged usually by initialing against the addition or alterations as the case may be. Secondly having decided to accede to the request of the Defendants in giving them a copy of the guarantee after the same was signed by the Defendants and before the name of the 2nd Defendant was properly added in by the Bank, he did not send a copy of the completed document to the Defendants again after he had obtained the amended document from the Bank. I am of the view that he was at least negligence in this respect. Furthermore, his memory of some of the details of the occasion would appear to be very hazy. For instance his description of the 1st Defendant was certainly wrong thus indicating that he had really very little recollection of at least the faces of the Defendants.

27. Another unsatisfactory aspect of Mr Lo's evidence is that in a statement he made to support the Plaintiff's case on an order 14 application, he also deposed to the circumstances of the execution of the guarantee by the 2nd Defendant. By then he was already aware that the Defendants were raising queries on the difference between the guarantee in the hands of the Plaintiff and the copy in the hands of the Defendants which did not contain the name of the 2nd Defendant under the section where the list of names of the guarantors appeared. It is important to note that in this statement there was no mention by him about his discovery of the omission and his suggestions to the Defendants on whether they could execute the documents before the omission was rectified. In short in this earlier statement, he did not make any attempt to explain the discrepancies between the guarantee in the hands of the Plaintiff and the copy in the hands of the Defendants and this is astonishing. His explanation was that this earlier statement was drafted by his boss and it did not occur to him that he should suggest any alteration to it.

28. On the other hand, I find that the evidence on the Defendants' side was also unsatisfactory. Unlike the case of a conveyancing clerk who must be handling many similar mortgage transactions as a matter of routine, the 2nd Defendant should have a much clearer recollection on the details of the events of her execution of the documents. However, all that she could say was that the documents including the guarantee and the minutes were executed somewhere in a fast food shop in a shopping arcade in either the Tsuen Wan Centre or the Nam Fung Centre. Furthermore, in relation to the guarantee in particular, her evidence that she signed as a director of the company as a witness only is difficult to understand. I sought clarification from her as to what was meant by "as a director of the company as a witness only". My understanding from her clarification was that the company was to be the witness and she signed as a director for the company. Thus understood, her signature was nothing more than part of the composite signature of the company. Yet if one looks at the signature page of the guarantee, there was nothing to indicate that any one signing (whether it be the 1st, 2nd or 3rd Defendants) did so as an officer or director of the company. The company's name did not appear. There was no word to indicate that any of the signatories was signing for or on behalf of a company. The 2nd Defendant must be aware of the form of the signature of the company and in fact even on the facility letter the 3rd Defendant singly signed for the company. Even in the case of the bank mandate, the signature of the company only required two signatures one from the 3rd Defendant and one from either the 1st or the 2nd Defendant. There was no good explanation as to why in this case all three directors would have to sign in order to constitute the signature of the company to be a witness. Furthermore, if she was signing as a witness the inevitable question was witness for what? The answer could only be - witness for the signature of the guarantors whose names appeared under Part B of the same schedule. Yet it was clear from her evidence and from the document itself that there was no signature under that section at all. In this respect I also note that it was the 2nd Defendant's case that as far as she was aware the loan would require the personal guarantee of both the 1st and 3rd Defendants only. She realised that the document she signed was a guarantee. Thus the section where the signatures of the 1st and 3rd Defendants appearing must be the section intended for the signatures of the guarantors. Yet, if she thought she was merely signing for the company and not as a guarantor then why should she sign in the section intended for the signatures of the guarantors?

29. The 2nd Defendant also relied on the evidence from the 1st and 3rd Defendants to support her case. Insofar as the evidence of the 1st Defendant is concerned, her evidence assisted the 2nd Defendant's case insofar as she had testified that there was no occasion that she and the 2nd Defendant went to any solicitor firm together. On this point my view is that on balance of probability she must have been mistaken. Insofar as the evidence of the 3rd Defendant is concerned, his evidence is in the form of a brief declaration. He did not give any evidence. According to the 2nd Defendant she last saw him in June 1999 and had since lost all contacts with him. I do not think that I need to make any finding on whether it is genuinely the case that the 2nd Defendant was unable to have any more contact with the 3rd Defendant after June 1999 as she claimed. However, all that I would find is that the declaration of the 3rd Defendant gave rise to a lot more questions than it purported to answer. In particular, for reason I have stated earlier, I do not find it credible at all that the Plaintiff had at any stage agreed to make the loan with just the 1st and 3rd Defendants as the guarantors. Since the 3rd Defendant had not turned up to give evidence, I do not attach any probative value to his written declaration at all.

30. In the end, just on balance of probability, I accept the evidence of Mr Lo of Ho & Wong on the circumstances of the execution of the guarantee. It is clear that the guarantee was supplied by the Plaintiff to Ho & Wong together with the instruction letter. Mr Lo must have discovered the omission of the 2nd Defendant's name as guarantor. This is because it was also confirmed by the 2nd Defendant that when she signed on that document, her name was already written on the section in pencil. There was no dispute that this was Mr Lo's handwriting. Hence Mr Lo must have written down the name of the 2nd Defendant on the guarantee before the 2nd Defendant signed. I could see no reason why Mr Lo having done so would still allow the document to be taken away by the 3rd Defendant to obtain the signature of the 2nd Defendant or indeed of other guarantors. Although there were aspects in his evidence which I do not find very satisfactory, I accept his evidence that given that this was a very ordinary transaction and there was no special relationship between him and any Defendants there was really no reason for him to act in defiance of the express instruction of the Plaintiff to witness the execution of the guarantee by the three Defendants.

31. Even if I am wrong on my conclusion, I am not satisfied that when the Plaintiff signed on the guarantee she thought that she was not signing as guarantor but was signing as a witness only. For reasons I have set out earlier, I reject her evidence that she read copy of a facility letter which only required the 1st and 3rd Defendant to be guarantors. I find it inconceivable that she did not realise that she was required to be one of the guarantors. Even on her own case, she took part in the company at the request of her brother, the 3rd Defendant to assist him. It is difficult to see in what other way she would be required to help in participating in a shell company intended to be used for the purpose of holding property to be purchased with financing from a bank. This is especially so when there was no suggestion that she had ever been asked to make any substantial contribution towards the capital of the company. At any rate, on her own admission, when she signed on the document, her name was already written in the signature section under the names of the 1st and 3rd Defendants. Thus in any event, I am satisfied on balance of probability that the 2nd Defendant realised that she signed as guarantor on the deed of guarantee.

32. I would add that insofar as it is necessary, I would find that the extract of the minutes of the board resolution might not have been signed by all the parties on a single occasion and I made no finding on the where this document was signed. Plainly as could be seen in the letter of Ho & Wong to the Plaintiff dated 19 June 1997 this document was not amongst the documents sent back to the Plaintiff on that date to effect the draw down of the loan.

33. The 2nd Defendant further took the point that in any event the document had been altered after she signed and hence this would invalidate the guarantee. I reject such contention. A deed would only be invalidated if there are material alterations after its execution (see Halsbury's Laws of England 4th edition re-issue volume 13 paragraph 86). However, as I have found that it was always the intention of the parties that all three Defendants were to be joint and several guarantors, and further more at the time when the Plaintiff signed, her name was already written albeit in handwriting in the section for signatures of guarantors and she signed as guarantor, there was no material alteration by simply replacing the handwritten name with a type written name and by adding her name in the earlier section which set out the list of guarantors. Of course I am far from suggesting that this was a regular practice. However, in the circumstances of this case, I am of the view that the alteration did not have the effect of invalidating the deed.

34. The final point to consider is the quantum. The Plaintiff relied on the judgment against the company to show that company still owed the Plaintiff money for which the 2nd Defendant was liable under the guarantee. The judgment was dated 2 August 1999 and it was for the sum of $5,624,017.82 with interest on the principal sum of $5,169,893.78 at the rate of 4.25% above the Plaintiff's best landing rate from 16 July 1999 to payment. The evidence before me is that since the judgment there has not been any payment by the company or by any of the co-guarantors. However, the property was sold by the Plaintiff for the sum of $2.26 million and a 10% deposit was already received on 28 March 2001. The sale is expected to be completed on 28 April 2001. The Plaintiff had indicated through counsel that the Plaintiff was prepared to waive the cost of the sale. However, before the completion of the sale, it is by no means certain that the balance of the price will be received. Of course the proceeds of the sale must be deducted from the amount due by the company to the Plaintiff, and the judgment against the 2nd Defendant must be reduced to take into account the proceeds received from the sale. In the circumstances, I will give judgment for the Plaintiff for an amount to be assessed. I further direct that the amount is to be assessed by a master to take into account the deposit and the proceeds of the sale received by the Plaintiff. The Plaintiff will also have its costs for this action but only on party and party basis.