Your World of Legal Intelligence
 Hong Kong | 1-800-335-6202

The Hongkong And Shanghai Banking Corporation Ltd v Sy Shun Wu And Others

Judgment Cited authorities 2 Cited in 1 Precedent Map Related
Vincent
Judgment Date07 February 2018
Neutral Citation[2018] HKCFI 247
Year2018
Judgement NumberHCMP3269/2016
Subject MatterMiscellaneous Proceedings
CourtCourt of First Instance (Hong Kong)
HCMP3269/2016 THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD v. SY SHUN WU AND OTHERS

HCMP 3269/2016

[2018] HKCFI 247

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 3269 OF 2016

________________________

BETWEEN
THE HONGKONG AND SHANGHAI Plaintiff
BANKING CORPORATION LIMITED
and
SY SHUN WU 1st Defendant
BILLION STAGE LIMITED 2nd Defendant
CROWN FORTUNE INC LIMITED 3rd Defendant
STRONG TRILLIONS LIMITED 4th Defendant

________________________

Before: Deputy High Court Judge Le Pichon in Chambers
Date of Hearing: 26 January 2018
Date of Decision: 26 January 2018
Date of Reasons for Decision: 7 February 2018

__________________________________

REASONS FOR DECISION

__________________________________

1. This was an appeal by the plaintiff (“the Bank”) from an order dated 20 July 2017 of Master M Wong that the proceedings be continued as if they were begun by writ with directions for the filing of pleadings. At the conclusion of the hearing the appeal was allowed. The Reasons are set out below.

THE UNDERLYING PROCEEDINGS

2. By an originating summons issued pursuant to Order 88 of the Rules of the High Court (“RHC”), the Bank sought payment of all sums of money due by the defendants under the several covenants contained in the three mortgages described below in respect of three mortgaged properties (“the properties”) and delivery by the 1st defendant Sy Shun Wu (“Sy”), Billion Stage Limited (“D2”), Crown Fortune Inc Limited (“D3”) of possession of the properties respectively.

3. The three mortgages are the following:

(1) a mortgage dated 8 November 2013 (“the D3 mortgage”) with D3 as the mortgagor and borrower, the property mortgaged being a workshop registered in the name of D3 (“the 3rd property);

(2) a mortgage dated 11 February 2015 (“the D1 mortgage”) with Sy as the mortgagor and Strong Trillions Limited (“D4”) as the borrower over what has been referred to as “the Wilton Place property” registered in SY’s name (“the 1st property”); and

(3) a mortgage dated 11 February 2015 (“the D2 mortgage”) with D2 as the mortgagor and D4 as the borrower over a property of which D2 was the registered owner (“the 2nd property”).

BACKGROUND FACTS

4. Tang Tiang Pong (“Tang”) and Sy are the only shareholders and directors of D4, the sole parent company of D2 and D3. Tang and Sy respectively own 60% and 40% of D4 and to all intents and purposes, Tang and Sy are and were business partners. D4 was in the sourcing and trading industries. For convenience, D2, D3 and D4 are collectively referred to as “the Group”.

5. The banking relationship between the parties first began in August 2012 when D4 opened an account with the Bank. From mid-2013, D4’s application for banking facilities was handled by an officer of the Bank (“Yip”). In September 2013, D3 also opened an account.

6. A meeting took place on or about 25 October 2013 among Tang, Sy and Yip when Tang on behalf of D3 and D4 executed a facility letter dated 23 October 2013 (“D3 Facility”) for a straight line loan of $700,000 to D3 and a facility letter (“GBF Facilities”) for general banking facilities for D4. On the same occasion Tang and Sy executed a guarantee (“D1 Guarantee”) for an amount limited to $700,000 and D3 and D4 executed a cross guarantee for an unlimited amount (“D3 & D4 Cross Guarantee”) in favour of the Bank. It is Tang’s evidence that prior to his signing the D3 Facility, he was given the assurance described in §29 below.

7. In August 2014, D4 also obtained a SME financing facility from the Bank. That facility together with the facilities that had been granted in 2013 were renewed pursuant to the terms of renewal facilities letter dated 29 October 2014.

8. In late 2014, D4 intended to expand its business and required more banking facilities in support of which it had to provide further securities such as landed properties that could be mortgaged to the Bank. As a result, two properties (namely the 1st property and the 2nd property) came to be mortgaged to the Bank (being respectively the D1 mortgage and the D2 mortgage).

9. There are conflicting accounts of the circumstances concerning the acquisition of the 1st property and the execution of the D1 mortgage.

10. In summary, Tang’s evidence is that (i) the suggestion that Sy should purchase a flat to be used as security for D4’s application for additional banking facilities came from Yip and (ii) for that purpose Yip introduced an estate agent to Tang who recommended the 1st property.

11. Yip denies the allegations contained in §10 above and gave his account of the events concerning the acquisition of the 1st property and the execution of the 2nd and 3rd mortgages. Be that as it may, Tang agreed a price with the agent for the 1st property, paid the requisite deposit and instructed the agent to contact Sy for the signing of the sale and purchase agreement.

12. According to Sy, until the commencement of these proceedings in November 2016, he was unaware that Tang was seeking additional banking facilities for D4 from the Bank and it was that Yip who had suggested to Tang the property be acquired in Sy’s name.

13. The first he knew of the proposed acquisition of the 1st property was when he was contacted by someone who said he was a property agent, that Tang had arranged for Sy to purchase a flat and for that purpose made an appointment to meet with Sy the following day for the signing of a preliminary agreement. The preliminary agreement came to be signed on 11 December 2014 in those circumstances and no payment was sought from or paid by Sy for its purchase.

14. Simon Reid-Kay (“SRK”) was the firm that came to be instructed to handle the D1 and D2 mortgages. It also handled the purchase of the 1st property. How SRK came to be so instructed is again controversial. Suffice it to say for present purposes that Tang’s allegation is that the firm was selected and instructions were given by the Bank to SRK directly. The Bank has given its account of the circumstances in which SRK came to be instructed (which was with Tang’s agreement).

15. As regards the intended purchase of the 1st property the Bank asked Tang and/or Robin Leow (“Leow”) (a representative of Sy and Tang) to contact SRK directly. This aspect of its evidence is corroborated by the affirmation of Anver Ching (“Ching”), a senior legal executive of SRK.

16. Ching stated that in early December 2014, Yip introduced Tang to him as Tang’s companies were applying for facilities to be secured by, inter alia, two properties one of which was to be acquired. To streamline the process, Tang instructed SRK to act in that purchase. SRK’s instructions came from Tang (and not the Bank).

17. Thereafter, Ching’s only point of contact was Leow (Tang and Sy’s representative) who gave instructions that the 1st property be acquired in Sy’s name and instructions regarding the execution of the D1 and D2 mortgages; he also made appointments for the execution of the documentation although Sy gives a different account of his first encounter with Ching.

18. According to Sy he received a call from a stranger (Ching) informing him (Sy) that the latter was contacting Sy at Tang’s behest to arrange for the signing of the formal agreement for the sale and purchase of the 1st property at the offices of the Bank’s solicitors. Sy complied with the request later the same day and accordingly met with Ching for the first time.

19. On 19 January 2015, the Bank issued a facility letter granting additional facilities under the GBF Facilities to D4 and another facility letter of the same date increasing its SME loan. Both these facility letters were signed by Tang who said he was given the same assurance as that considered in §29 below.

20. On 5 February 2015, D4 acquired D3 which was the registered owner of the 2nd property.

21. On the same day, Sy attended SRK’s offices and in the presence of Ching signed (a) the assignment of the 1st property and (b) the D1 mortgage and ancillary documents namely, an undated letter, a nomination form and a warning notice (both dated 5 February 2015) and explanatory notes.

22. On 6 February 2016, Tang signed the D1 mortgage on behalf of D4 and the D2 mortgage on behalf of D3 and D4 and other ancillary documents.

23. The Hong Kong Monetary Authority’s guidelines on Anti-Money Laundering and Counter-Terrorist Financing require banks to carry out ongoing transaction monitoring exercises. In early April 2015 after noting an abnormality over the account activity of D3 and D4 that gave rise to concerns and suspicion over the identities of their buyers and suppliers, the Bank exercised its overriding right of, inter alia, suspension and temporarily suspended the credit facilities.

24. It would appear from the email correspondence exhibited to Tang’s affirmation that the suspension prompted a telephone call from Leow to the Bank on 8 April 2015. In a follow-up email, Leow merely enquired if there was any update regarding the “highlighted concern” discussed during that call.

25. Tang then complained bitterly in his email to the Bank of 18 April 2015 about the Bank’s recent steps having caused “major hiccups” in his business. A meeting took place 11 days later followed by the Bank’s written request to provide further information (including information on 15 trade counterparties specified in the letter) to address the Bank’s concerns....

To continue reading

Request your trial
1 cases
  • The Hongkong And Shanghai Banking Corporation Ltd v Sy Shun Wu And Others
    • Hong Kong
    • Court of Appeal (Hong Kong)
    • 23 October 2018
    ...an oral hearing. Background 5. The factual background of this case was set out at [4] to [27] of the Judge’ decision published as [2018] HKCFI 247. The claims of the Plaintiff were based on three mortgages, referred to as the D1, D2, and D3 Mortgages by the Judge. The D1 and D2 Mortgages we......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT