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The Canton Trust And Commercial Bank Ltd v Cheng Tai T/a Tai Yuen Farm And Others

Judgment Cited in Precedent Map Related
Vincent
Judgment Date12 December 1968
Subject MatterCivil Action
Judgement NumberDCCJ196/1968
CourtDistrict Court (Hong Kong)
DCCJ000196/1968 THE CANTON TRUST AND COMMERCIAL BANK LTD v. CHENG TAI t/a TAI YUEN FARM AND OTHERS

DCCJ000196/1968

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT FANLING

CIVIL JURISDICTION

Action No. 196 of 1968

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BETWEEN:
The Canton Trust and Plaintiff
Commercial Bank Limited

AND
CHENG Tai trading as Tai Yuen Farm 1st Defendant
Victory & Company 2nd Defendants
LAI Mo Tong trading as Fook Woo Poultry Breeding Farm 3rd Defendants
Tai Shun Farm 4th Defendants

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Coram: Judge Cons.

Date of Judgment: 12 December 1968

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JUDGMENT

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1. This is an Action brought by the plaintiff Bank upon a Letter of Guarantee given by the 3rd defendant to cover overdraft facilities made available by the Bank to the 1st defendant. Neither the 1st defendant nor two other defendants to the Action have been served and the trial proceeded solely between the plaintiff Bank and the 3rd defendant. For the sake of convenience, I will call them "the Bank" and "the defendant" respectively and I will refer to the 1st defendant as "the debtor".

2. The basic facts are not in dispute. In 1962, the debtor was running a current account with the Bank. At the end of October last year, he arranged overdraft facilities for six months to the extent of $3,000. In pursuance thereof, on the 29th of that month he signed a normal Letter of Undertaking. In accord with the apparent practice of the Bank, a third party ...(illegible) required as surety and the defendant on the same day signed a Letter of Guarantee to the same extent of $3,000. At the end of the six months' period, that is on the 28th April, 1963, the account of the debtor was overdrawn to the extent of $3,168.45. This was drastically reduced on the 4th of the next month by the payment of the sum of $3,000, and the account throughout May was generally overdrawn to a small extent but was occasionally in credit. At the end of the month the debtor must have come to another agreement for overdraft facilities with the Bank for on the 25th he signed another similar Undertaking, also limited to $3,000 and also for a period of six months. This time Letter of Guarantee was signed by the 2nd defendant, who also signed a further Guarantee when the debtor signed a third similar Undertaking on the 21st of December that year, that is about one month after the expiry of the second. Although there were many payments in and out during 1963, the account maintained from June onwards a fairly consistent debit balance in the region of $3,000. After that year there was little activity. But a few small deposits helped to reduce the balance which, together with the interest debited, stood at $2,757.30 on 12th May, 1965 the date on which the Bank went into liquidation.

3. The defence put forward, as I now understand it, is three-fold. Firstly, it is contended that the guarantee only extended to a six-month period from the 29th of October 1962 to 28th April 1963, and that all the advances made to the debtor during that time have been repaid. So far as the second part of this proposition is concerned, there can be no doubt. The undertaking by the debtor (Exhibit 4) was limited to a period of six months commencing on the date it was signed and it is especially made repayable on or before 28th April 1963. It is also...

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