CHEUNG KIT LIN v. LEE KIN WAI PATRICK

DCCJ 333/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 333 OF 2013

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REASONS FOR DECISION

1. This is a summons taken out under Order 19 by which it is asked on behalf of the Plaintiff that she be at liberty to enter judgment against the Defendant for:

(1)  Damages in the sum of HK$52,446.9 and interest thereon;

(2)  Further damages in the sum of HK$4,767.9 being the monthly repayment of February 2013 and interest thereon;

(3)  Specific performance of the Modified Agreement as defined in the Statement of Claim that the Defendant do make repayment to the Plaintiff the sum of HK$4,767.9 on or before the 25th day of March 2013 and thereafter on or before the 25th day of each succeeding month until 25th August 2014 (inclusive) or until the loan is fully repaid and discharged.

The Plaintiff also asked for costs of this application.

2. Upon reading the affirmations of service, I am satisfied that the Defendant has been duly notified of this action, the present application and today’s hearing. The hearing therefore proceeded in the absence of the Defendant.

3. Application under Order 19 is to be determined on the face of pleadings.

4. From the Statement of Claim, I am satisfied that the parties had created an agreement referred to by the Plaintiff as the Modified Agreement in September 2010. By the Modified Agreement, the Plaintiff was to make a loan of HK$207,000 for and on behalf of the Defendant and his mother from the Standard Chartered Bank and such loan was to be repaid by the Defendant directly to the bank or to the Plaintiff.

5. Pursuant to the Modified Agreement, a loan was made in the name of the Plaintiff and a sum of HK$207,000 had been handed over to the Defendant and his mother by end of September 2010. The loan was to be repaid to the bank by 48 monthly installments of HK$4,767.90 each. The Defendant had since acted on the Modified Agreement and made monthly repayments in sums varied from HK$4,000 to HK$4,800 to the Plaintiff until end of April 2012.

6. It has been said in previous authorities that domestic agreements made between spouses may not have the necessary contractual intention to make them binding.  I find the situation in the present case different from a domestic agreement. The Modified Agreement gave rise to a loan agreement between a bank and the Plaintiff and the loan agreement was a formal and legal contract between the Plaintiff and the bank, the Plaintiff was bound to repay the bank or to face legal consequences. In the circumstances, it could not be said that legal consequence was never within the contemplation of parties when the Modified Agreement was reached.  Further, the Defendant had admitted and acknowledged his liability to continue to repay the loan in the joint application for divorce and his financial statement filed with the family court under FCJA 1254 of 2011 dated 6th October 2011.  I am satisfied that the contractual intention of the parties was apparently evidenced or affirmed in the parties’ joint application of divorce. 

7. At the hearing I was given to understand that FCJA 1254 of 2011 was withdrawn by consent by the parties but it was on a point not related to the admission and acknowledgement given by the Defendant.

8. I have no question on entering judgment for damages caused to the Plaintiff by the Defendant’s default, namely HK$52,446.9 for the period up to January 2013 and HK$4,767.9 for the monthly repayment of February 2013.

9. I would however not exercise my discretion to grant an order for Specific Performance whereby the Defendant is ordered to continue to repay the bank loan. I find it not appropriate to order the Defendant to continue to make payment when such order might not be enforceable in case of non-compliance.

Order

10. For reasons set out in the above, I enter judgment for the first 2 paragraphs of the summons and application under paragraph 3 is refused, ie

(1)  Damages in the sum of HK$52,446.9 and interest thereon;

(2)  Further damages in the sum of HK$4,767.9 being the monthly repayment of February 2013 and interest thereon;

Costs

11. Since the Plaintiff only succeeded in part of her application, I make an order that the Defendant do pay the Plaintiff’s costs summarily assessed by this Court at HK$12,000.