DAH SING BANK, LTD v. LONG TAI HONG SUPPLIES LTD (formerly known as LONG TAI HONG INVESTMENT LTD) AND OTHERS

HCMP 2461/2023

[2025] HKCFI 1771

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2461 OF 2023

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DECISION

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1.  The background as set out in paragraphs 7 to 14 of the Skeleton Submissions for the Plaintiff (“P”) dated 9 April 2025 was not disputed:

“ 7. It is P’s case that it had granted loan facilities to the 1^st defendant secured against the mortgage of the 1^st defendant’s property (‘Subject Property’) and the personal guarantees of D2 and the 3^rd and 4^th defendants herein following the execution of the following documents:-

a. The Facility Letter dated 8th July 2022 [B1/11/104+] executed by the 1st defendant as borrower/mortgagor, and D2 and the 3rd and 4th defendants as guarantors respectively [B1/11/118] wherein P offered to grant to the 1st defendant invoice financing up to HK$20m, overdraft of up to HK$8m and revolving loan of up to HK$8m [B1/11/105 §§1-3];

b. The Mortgage dated 29^th January 2016 [B1/12/122+] executed by P as the mortgagee and the 1^st defendant as mortgagor to charge the Subject Property as security for due payment of all moneys owing to P by the 1^stdefendant;

c. The Commercial Business Agreement executed by the 1^st defendant dated 18^th December 2006 [B1/13/141+]; and

d. The Guarantee and Indemnity dated 8^th January 2016 (‘Guarantee’) [B1/14/150+] executed by D3 and the 2^nd and 4^th defendants respectively [B1/14/155] wherein in consideration of facilities granted to the 1^st defendant by P, D3 and the 2^nd and 4^th defendants shall jointly and severally guarantee to P the payment on demand all moneys and liabilities owing by the 1^st defendant [B1/14/153 §25(a)] which shall be unlimited [B1/14/151 §1].

8. It is P’s case that the 1^st defendant had defaulted in making repayments in breach of the terms of the Facility Letter [A/3/36 §15].

9. It follows P’s entitlement to possession of the Subject Property under the Mortgage had also arisen by reason of 1^st defendant’s default.

10. On 7^th December 2023, P issued demand letters to the 1^st defendant as borrower/mortgagor [B1/15/160-162] and to each of D3 and the 2^nd and 4^th defendants as guarantors respectively to demand for the repayment of the then outstanding sum [B1/16/163-169].

11. None of the defendants made any repayments, so P commenced this action [A/3/37 §20].

12. The amount due as at the date of the OS (22^nd March 2024) had been set out in the supporting affirmation as follows [A/3/37/ §21]:-

Item	Amount
Revolving Loan Principal Outstanding Balance	8,000,000.00
Accrued Interest	361,800.21
Sub-total	8,361,800.21
Overdraft Principal Outstanding Balance	2,297,165.83
Accrued Interest	8,480.63
Sub-total	2,305,646.46
Invoice Financing Principal Outstanding Balance	19,950,260.16
Accrued Interest	973,680.02
Sub-total	20,923,940.18
Total	31,591,386.85

13. No repayments were made even after the issuance of the OS.

14. The entitlement to charge overdue interest is clearly provided in the Facility Letter [B1/11/115] and the Commercial Business Agreement [B1/13/145 §30], and the calculation of the accruing default interest on the invoice financing, overdraft and revolving loan have been clearly set forth in the supporting affirmation [A/3/39 §§23-27] [B1/18/217+].  None of the defendants have ever raised issues with quantum.”

2.  It is clear from the Originating Summons filed on 22 December 2023 (“OS”), P’s claim against the 3^rd Defendant (“D3”) is pursuant to the Guarantee [A/1/3].

3.  D3 has not disputed that she is one of the guarantors under the Guarantee: see Skeleton Submissions for D3 dated 11 April 2025 (“D3’s Skeleton”), §7(a).

4.  Pursuant to clause 6 of the Guarantee [B1/14/151], the Bank (P) may at any time without the consent or notice to the Guarantor(s), and without prejudice to the Guarantee or affecting the liabilities of the Guarantor(s), renew, determine, vary or increase any credit or other facilities to the Customer (the 1^st Defendant (“D1”)) or the terms or conditions in respect of any agreement or arrangement with the Customer.

5.  Furthermore, clause 15 of the Guarantee [B1/14/152] provides that should any purported liability of the Customer be or become wholly or in part invalid or unenforceable against the Customer on any ground whatsoever, the Guarantor(s) shall nevertheless be liable to the Bank in respect of that obligation or liability as if the same were wholly valid and enforceable and the Guarantor(s) were the principal debtor(s).

6.  These two clauses illustrate that the Guarantor is liable to the Bank regardless of: (a) whether D1 was liable to the Bank under the Facility Letter dated 8 July 2022 (“2022 Facility Letter”) [B1/11/105] on P’s case or under the Facility Letter dated 12 July 2023 (“2023 Facility Letter”) [B2/28/306] on D3’s case; and (b) irrespective of their validity or enforceability.

7.  I therefore do not accept, as submitted in D3’s Skeleton §§8‑9, the issue is whether the 2023 Facility Letter has taken effect and superseded the 2022 Facility Letter and if so D3 is no longer liable, and that this is a matter for trial.

8.  I am therefore satisfied none of the matters raised in opposition to the OS demonstrate that D3 has any credible triable issue.  Accordingly, the OS can and should be disposed of summarily under O.28, r.4(1) of the Rules of the High Court, Cap.4A.

9.  Costs should follow the event.

(Discussion on Statement of Costs submitted by P)

10.  Adopting a broadbrush approach, I have summarily assessed P’s costs of these proceedings at HK$230,000.

11.  I will make an order in terms of the draft order in Annexure 3 of P’s Skeleton Submissions as amended by me.