KONEW CAPITAL INTERNATIONAL LTD v. WONG KONG HEUNG formerly known as WONG KWONG HEUNG CANDY

DCMP 4781/2022

[2024] HKDC 1801

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 4781 OF 2022

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DECISION

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1.  This is an application by the Plaintiff by Originating Summons dated 15 December 2022 to enter default judgment against the Defendant pursuant to Order 83A rule 4 and Order 88 rule 4 of the Rules of the District Court (Cap 33H) (“RDC”). The Plaintiff seeks to summarily dispose of the action before this Court pursuant to Order 28 rules 3 and 4 RDC.

2.  At the hearing before the Court on 23 September 2024, the Plaintiff confirms with the Court that it no longer pursues a claim for delivery for possession under Order 88 RDC and would only seek summary determination of the monetary claim under Order 83A RDC against the Defendant.

3.  The Plaintiff also confirms that it will waive the excess of the claim beyond $3,000,000 so as to bring the claim within the jurisdictional limit of this Court. Subsequent to the hearing, the Plaintiff has supplied to the Court a confirmation in writing of the same.

A.  Background

4.  The Plaintiff is a licensed money lender in Hong Kong. The Defendant was a repeat borrower and customer of the Plaintiff. The Defendant is the registered owner of Flat No 2610 on 26^th Floor, Tai On Building, Nos 57/87 Shau Kei Wan Road, Hong Kong (the “Property”).

5.  On 13 January 2021, the Plaintiff lent a principal sum of HK$2,000,000 (“1^st Loan”) to be repaid by 180 monthly instalments, at interest rate of 16.80% per annum, pursuant to a loan agreement in Chinese (“1^st Loan Agreement”). On 8 December 2021, the Plaintiff lent to the Defendant another principal sum of HK$400,000 (“2^nd Loan”), to be repaid by 60 monthly instalments, also at 16.80% per annum, pursuant to another loan agreement in Chinese (“2^nd Loan Agreement”).

6.  The 1^st and 2^nd Loan Agreements were secured by mortgages in favour of the Plaintiff granted by the Defendant over the Property, which was beneficially owned by the Defendant. The mortgages included a second mortgage dated 23 December 2019; a third mortgage dated 11 December 2020, and a fourth mortgage dated 8 November 2021.

7.  According to the Plaintiff’s case, the Defendant defaulted in repaying the monthly instalments of the 1^st Loan on 10 August 2022 (the 19^th installment) and of the 2^nd Loan on 5 August 2022 (the 8^th installment). Accordingly, by reason of inter alia clause 8(a) of the 1^st Loan Agreement and 2^nd Loan Agreement, the whole balance of the 1^st Loan and the 2^nd Loan and all accrued interests became immediately due and payable.

8.  Despite repeated requests and demands by the Plaintiff including a demand letter from the Plaintiff’s solicitors, Messrs Foo and Li, to the Defendant dated 15 November 2022, the Defendant has still failed and/or refused to pay to the Plaintiff the whole outstanding balance of the 1^st Loan and the 2^nd Loan and the accrued interests thereon.

9.  The Plaintiff filed the Originating Summons on 15 December 2022. The Defendant filed an Acknowledgement on 3 January 2023 expressing her intention to contest the case. She did not file any Notice of Intention to Defend.

10.  By her affirmations, the Defendant claims that she has a valid Defence to the Plaintiff’s claim, on the basis that:

(1)  The Plaintiff did not keep its alleged promise to cancel the registration of the original mortgage dated 23 December 2019 (ie prior to the Defendant’s entry into the 1^st Loan Agreement);

(2)  The Defendant was misleadingly persuaded by a staff of the Plaintiff to enter the 1^st and 2^nd Loan Agreements with the Plaintiff, such that the Defendant commercially lost out as: (i) she had to pay extra interest compared to another potential loan agreement with another finance company; and (ii) the financing structure of the Loan Agreements affected her future borrowing power; and

(3)  The Loan Agreements were illegal for charging payment of compound interest.

11.  The Defendant also relies on an alleged counterclaim of HK$10,000,000, representing alleged financial hardship as a result of the Plaintiff’s alleged actions.

B.  Discussion

12.  Based on the documents placed before me, I am satisfied that the court documents in relation to this action were duly served on the Defendant.

13.  I have considered the documents filed before me and I am satisfied that the requirements of sections 18(1) and 18(2) of the Money Lenders Ordinance Cap 163 (“MLO”) have been complied with.

14.  I am satisfied that the interest rate charged under the Loan Agreements are not in contravention of section 24(1)-(2) of the MLO nor section 25 of the MLO.

15.  I am also satisfied that the procedural requirements under Order 83A RDC have been complied with.

16.  An action by originating summons may be disposed of summarily under Order 28 rule 4 RDC where the court is satisfied that there are no triable issues: see Bank of China (Hong Kong) Ltd v Twin Profit Ltd [2010] 2 HKLRD 1065 at §§6-8.

17.  I am satisfied that there is no merit in the Defendant’s defence. In particular:

(1)  The non-cancellation of the original mortgage bears no relation at all to the Defendant’s current liability under the two Loan Agreements.

(2)  I do not find the Defendant’s allegation of the Plaintiff’s misrepresentation believable. I also doubt that the facts relied on by the Defendant constitute any valid ground for misrepresentation. The Defendant does not dispute that she is able to read English, is commercially experienced in taking out loans and has signed the 1^st and 2^nd Loan Agreements.

(3)  There was no contravention of section 24(1)-(2) of the MLO nor section 25 of the MLO. No compound interest is charged. The Plaintiff is entitled to charge simple interest on the outstanding interest under section 22 of the MLO.

18.  There is also no substance in the Defendant’s counterclaim, which is unparticularized and unsupported by law.

19.  In the premises, there is no triable issue. The Plaintiff is entitled to the monetary judgment against the Defendant as claimed.

C.  Disposition

20.  The outstanding indebtedness due from the Defendant to the Plaintiff as at 23 September 2024 was HK$3,222,412.64, being the total outstanding principal, interest and default interest due and owing by the Defendant under the 1^st and 2^nd Loan Agreements calculated as at 23 September 2024.

21.  By letter dated 26 September 2024, the Plaintiff confirms that it will only claim against the Defendant the judgment debt of HK$3,000,000, together with:

(1)  In relation to the 1^st Loan Agreement:

(i)  Interest on the sum of HK$1,948,941.38 at the rate of 16.80% per annum (ie daily interest of HK$897.05) from the date of order until full payment; and

(ii)  Default interest on the sum of HK$108,890 at the rate of 16.80% per annum (ie daily interest of HK$50.12) from the date of order until full payment; and

(2)  In relation to the 2^nd Loan Agreement:

(i)  Interest on the sum of HK$368,276.52 at the rate of 16.80% per annum (ie daily interest of HK$169.51) from the date of order until full payment; and

(ii)  Default interest on the sum of HK$20,243 at 16.80% per annum (ie daily interest of HK$9.32) from the date of order until payment.

22.  I am satisfied that the terms of the revised draft order is in line with the usual orders made in proceedings of the present nature. I shall therefore make an order in terms of the revised draft order.

23.  On the issue of costs, the plaintiff seeks, and I allow, costs against the Defendant on a full indemnity basis under clause 14 of the 1^st Loan Agreement and 2^nd Loan Agreement, summarily assessed at HK$145,000.