QIAN FEIYI v. FIRST PRESTIGE INC AND OTHERS

HCA 149/2024

[2024] HKCFI 3415

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 149 OF 2024

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J U D G M E N T

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Introduction

1.  This is the appeal of D1 and D2 against the order of Master Keith Lam dated 1 August 2024 that summary judgment be granted on P’s Order 14 summons dated 13 March 2024 (“Summary Judgment”). Summary Judgment was granted against D1, D2 and D3, but D3 does not appeal.

2.  The evidence put before the Master (as set out in the recital to his order dated 1 August 2024) also extends to affidavits filed in respect of P’s application for Mareva relief, but no submission has been made to suggest that I should not have regard to any such evidence. Accordingly, I have regard to the same evidence as relied upon by the Master.

3.  The Master gave an ex tempore ruling on 1 August 2024 and I have the advantage of a copy of the ruling in writing placed on the Court file.

4.  However, Mr Lau appearing for D1 and D2 (“the Ds”), who did not appear before the Master, takes different points.

Legal principles

5.  The legal principles applicable on an O. 14 Summons and an appeal therefrom are not in issue.

6.  RHC O.14 r.3(1) provides that:

”Unless on the hearing of an application under rule 1 either the Court dismisses the application or the defendant satisfies the Court with respect to the claim, or the part of a claim, to which the application relates that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of that claim or part, the Court may give such judgment for the plaintiff against that defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed.” (Emphasis Added)

7.  In Re Safe Rich Industries Ltd [1994] HKLY 183 Bokhary JA (as he then was) stated:

“The test at the summary stage is indeed as simple as whether the defendant’s assertions are believable. But it must be recognized – because failure to recognise it would create a debt-dodger’s charter – that whether the defendant’s assertions are believable is a question to be answered not by taking those assertions in isolation but rather by taking them in the context of so much of the background as is either undisputed or beyond reasonable dispute.”

8.  On an appeal against a master’s decision, the Court shall consider the matter afresh, will have regard to the master’s decision and whilst it is in no way bound by it, it may adopt the master’s reasoning in its own judgment. See Hong Kong Civil Procedure, 2025 at §§58/1/2.

Material Facts

9.  On 20 January 2020, P, D1 and D2 entered into a written loan agreement whereby P agreed to lend to D1 a sum of US$ 5,000,000, repayable 24 months after drawdown at an interest rate of 8.5%; and D2 would provide a continuing guarantee of D1’s obligations (the “Loan Agreement”). The Loan Agreement is in English, and was made under seal before Hong Kong solicitors.

10.  D2 is the director of D1, and is also the director and CEO of Prestige Wealth Inc., a NASDAQ listed company (“Prestige Wealth”). D2 was a friend of P’s mother.

11.  P transferred RMB 34,591,000, being the equivalent to USD 5 million at the time, to D2’s personal account on 21 January 2020 (the “Loan”). D2’s 1^st affirmation states that he transferred the RMB sum to D1. D1 acknowledged receipt of USD 5 million on 22 January 2020.

12.  D1 did not make repayment of the Loan to P by the maturity date of 20 January 2022. D1 and D2 and P signed an “extension agreement”[1] in English on 21 January 2022 (the “1^st Extension Agreement”).

13.  By the next maturity date on 21 July 2022, D1 had still not made repayment to P. Another “extension agreement” in English was agreed between P, D1 and D2 on 21 July 2022 (the “2^nd Extension Agreement”).

14.  In a conversation on 20 July 2022 between D2 and P’s mother (evidenced by a transcript of a recording), D2 said “…you signed a contract with me, I am legally responsible, I guarantee myself, so I have to follow and take charge of this, elder sister, I vouched for it myself.”

15.  By an undated document, which appears from its contents to have been created on 15 February 2023 (as also found by the Master, and not disputed):

a.  D1 explicitly acknowledged to P D1’s failure to meet the terms of the loan agreement signed on 21 July 2022 (i.e. the 2^nd Extension Agreement) for repayment of the principal amount of the loan plus interest amounting to USD 6.2 million;

b.  D1 notified P of their updated repayment schedule, i.e. to pay 60% of the above amount totalling USD 3.72 million within 3 natural months of the date of this notice “i.e. since 15 February 2023” and the remaining balance be paid and settled within 6 months of signing the Supplementary Agreement.

c.  D1 stated that the relevant terms will be subject to a valid renewal agreement signed by both parties.

16.  On 3 March 2023, the parties signed an extension agreement in Chinese, by which D3 was added as a guarantor (“3^rd Chinese Extension Agreement”). The 3^rd Chinese Extension Agreement provides at recitals (A) to (D) (as translated):

“(A) The Loan Agreement betyween [P] and [D1] was entered into on January 20, 2020, and its loan agreements with a renewal term were signed on January 21, 2022 and July 21, 2022;

(B) After the repayment date of July 21, 2022 defined in the Loan Agreement expires, the Borrower has not repaid the principal and the corresponding interest in accordance with the original agreement, and the total amount of USD 6,200,000 is involved;

(C) In accordance with the negotiations between the Lender and the Borrower, this Agreement has been signed to provide the updated provisions and arrangements for the overdue payments under the original Loan Agreement as well as the addition and introduction of Party C, Victoria Harbourview Limited, as the Guarantor, whose assets as stated in the Appendix to this Agreement work as security for the outstanding amounts;

(D) The Borrower also undertakes that the outstanding amount of USD 6,200,000.00 is involved in this agreement shall be returned to the Lender in accordance with the following arrangements:

60%... shall be repaid within no more than 4 natural months since March 1, 2023, totalling USD 3.72 million.

40% … shall be repaid within no more than 6 natural months since March 1, 2023, totalling USD 2.48 million.”

17.  The 3^rd Chinese Extension Agreement contains effectively the same terms as the undated document of about 15 February 2023 (as described at para. 15 above).

18.  D3 is a shareholder of Prestige Wealth, and its sole director Li Xueguang was a business associate of D2.

19.  D2’s 1^st affirmation states that D2 arranged for D1 to make partial repayment to P by 4 instalments in July 2023 totalling US$1,000,000; and that “it was clearly expressed to [P’s mother] that this payment of US$1 million was not repayment of any part of the RMB Sum by [D1]” “to avoid falling foul of PRC foreign exchange controls”.

20.  Repayment of the Loan had not been made by early September 2023. On 4 September 2023, Nelson Wong of the Ds sent P’s mother a draft loan and guarantee agreement dated 1 September, to which P’s mother responded that the terms did not match what had been agreed, and Mr Wong responded that he understood and would speak with the lawyers. On 6 September, Mr Wong sent P’s mother a new draft dated 5 September, and on 7 September P’s mother responded that this one should be signed.

21.  The parties entered into an agreement dated 5 September 2023, albeit likely signed a couple of days later in light of the We Chat messages (“4^th Chinese Extension Agreement”). This is in similar terms to the 3^rd Chinese Extension Agreement save that:

a.  It records that as at 4 September 2023, the outstanding balance of the loan is USD4 million and USD 1.2 million in interest;

b.  The stipulated maturity dates are 5-15 November 2023 for 50% of the principal, and 5-15 January 2024 for 50% of the principal and the interest;

c.  The additional interest would be 8% [instead of 8.5%].

22.  Repayment of the Loan had not been made by late November 2023. The parties entered into a further agreement dated 28 November 2023 (“5^th Chinese Extension Agreement”). 　On 29 November 2023, Nelson Wong on behalf of the Ds sent P’s mother a document called “Loan and Guarantee Agreement Qian 1128” stating “the legal department has issued an update”, to which P’s mother responded “Received. I’ll have our lawyers read it”. This would appear to evidence the provision of the form of the 5^th Chinese Extension Agreement by the Ds to P’s mother, with the draft being dated 28 November. Accordingly, the 5^th Chinese Extension Agreement may not have been signed on 28 November 2023 but thereabouts, and nothing turns on it.

23.  The 5^th Chinese Extension Agreement is in similar terms to the 3^rd Chinese Extension Agreement save that:

a.  the stipulated maturity dates are 31 December 2023 for 50% of the principal, and 5-15 January 2024 for 50% of the principal and the interest.

b.  The additional interest would be at 8%.

24.  As of the final extended maturity date of 15 January 2024, the Ds had not paid P the outstanding principal or interest.

25.  P commenced the proceedings by way of writ on 24 January 2024.

26.  Although Ds filed an acknowledgement of service to the proceedings on 2 February 2024, they have not filed a defence to date, nor exhibited any draft defence to their evidence in opposition to the O.14 summons.

The Ds’ arguments

27.  Mr Lau on behalf of the Ds submitted that there were 7 triable issues.

28.  First, Mr Lau argues that P has sought and obtained judgment on the basis of facts set out in her evidence which extend beyond the remit of the matters pleaded in the Amended Statement of Claim. In particular, he submits that P has not pleaded the 3^rd and 4^th Chinese Extension Agreements. That is correct, however I do not regard that as a procedural failure. P must plead all material facts, not all evidence. The material facts are the Loan Agreement which is pleaded), the extension of the maturity date, the change in interest rate and the addition of D3 as a guarantor (all of which are covered by the pleas in respect of the 5^th Chinese Extension Agreement).

29.  Second, the Ds argue that the Loan Agreement and Extension Agreements were a façade to cover up a trust arrangement. This was the only argument advanced on appeal which had also been advanced before the Master, although the Ds sought to put the matter differently before me.

30.  Before the Master, the Ds had argued that P’s mother wished to make a gift to P and had asked D2 to hold the money on trust for P because it was inconvenient to have such a large amount of money in P’s account, and due to D2’s reluctance, it was agreed that the money be held by D1 and disguised as a loan. The Master found that various contemporaneous messages between P’s mother and the Ds indicated a loan arrangement and ran counter to an intention of a gift to P. The Master set out several examples in his ruling at 7.1(a) to (g).

31.  In his written submissions on appeal, Mr Lau submitted that the true nature of the dealings between P and D2 was a trust arrangement whereby D2 was to hold the monies on trust for P “under the pretext of a loan agreement due to PRC funds movements and exchange control”.

32.  I do not understand why the alleged trust arrangement is even advanced as a defence, as it is not suggested that the Ds are entitled to keep the money; on either case they would be liable to pay it back to P. Mr Lau submitted that if P asked the Ds to repay trust monies, they would have no defence, and they would be liable, but P (he submitted)could not rely on the Loan Agreement.

33.  Clearly, the Loan Agreement and the 5 extension agreements are formal written documents by which the parties are bound unless some very good reason is shown to the contrary. It is not suggested that the Ds did not understand the contents of the documents.

34.  In a private conversation between P’s mother and D2 on 20 July 2022 (which was recorded), D2 referred to their contract, to D2’s legal responsibility, and to the fact he was a guarantor, all of which confirms the genuineness of the contract to be what it says i.e. a loan.

35.  The undated acknowledgment of debt document by D1, apparently created on 15 February 2023, is a further document consistently evidencing the relationship between D1 and P in respect of the USD 5 million sum plus interest as being one of a loan.

36.  I turn to consider D2’s evidence as to the exchange control argument:

a.  The evidence does not state specifically what the alleged exchange control problem was.

b.  No PRC law evidence is adduced to substantiate any concern about PRC regulations.

c.  D2’s evidence on the point seems to me to be internally inconsistent. D2 states, all within his 1^st affirmation, that:

i.  He did not want himself or D1 to be in any way implicated with a CSRC investigation into P’s mother; he was nervous about P’s mother’s request for repayment in USD; he refused to make repayment in USD.

ii.  He arranged for D1 to make partial repayment of USD 1 million in July 2023. To avoid exchange control issues, he told P’s mother that it was not in repayment of the RMB sum paid by P on 21 January 2020.

d.  In any event, if D2 could avoid the alleged PRC exchange control problems by simply asserting that a repayment in USD was not a repayment of the RMB sum paid by P to D1, then the problem was easily avoided, and there would be no issue in repayment of the full amount.

e.  When asked about the alleged exchange control point, Mr Lau submitted that that if P had requested repayment in RMB, then there would have been no exchange control repercussions, but the Ds could not accept repayment in USD.

f.  However, as Mr Pang pointed out, this is incredible as the Ds had actually made repayment of USD 1 million in July 2023.

37.  Accordingly, quite apart from the lack of any specific evidence from the Ds as to what the alleged exchange control concern was, the Ds have failed to satisfy me of any credible argument that the parties have executed the Loan Agreement as a facade on the basis that they were constrained by exchange control concerns.

38.  Also in his written submissions on appeal, Mr Lau referred to four items of evidence which he stated supported the Ds’ position of the Loan being a sham to disguise the trust:

a.  P was a university student and had had no direct communication with the Ds, so it was not convincing that she would make a USD 5 million loan to D1.

b.  Some We Chat messages between D2 and P’s mother in November and December 2023 referred to equity or equity pledges;

c.  The Loan Agreement provided for a loan of USD 5 million to D1, yet an equivalent RMB sum was paid to D2’s account.

d.  The Loan Agreement appeared to have been signed at a solicitors’ firm in Hong Kong yet D2’s affirmation evidence stated that it was signed in Casino Lisboa in Macao.

39.  None of these submissions indicates to me a credible case that the Loan Agreement is a sham.

a.  It is undisputed that P did advance the equivalent of USD 5 million to D2 for onward payment to D1 (so the fact that she is a student, with her mother acting on her behalf, is immaterial).

b.  The messages referring to equity or equity pledges are not clear in meaning, in particular the significance of equity or equity pledges to the dealings between P and the Ds is not clear, and the Ds’ evidence does not explain what the messages mean.

c.  Where D1 had a right under the Loan Agreement to object to a non-compliant drawdown of the loan, and where no such objection was made but rather D1 acknowledged receipt of USD 5 million, there is no credible argument that the Loan was not properly made.

d.  The location of signing the Loan Agreement is immaterial and, in any event, where Hong Kong solicitors have witnessed the signing of the document in their offices, I do not find D2’s bare assertion as to another signing location to be credible.

40.  In oral submissions, Mr Lau asked the Court to consider certain messages which he submitted tended to support the Ds’ version of events.

a.  The submission got off to a false start when it transpired that Mr Lau was asking me to look at new translations of documents which had not previously been provided to the P’s legal team. Mr Lau confirmed that he did not wish to seek an adjournment and accepted that he would not rely on these translations.

b.  Mr Lau then asked me to consider 3 messages (out of the very many in evidence) which he said supported the Ds’ version of events. I refer to the translation of the messages.

i.  A message on 31 August 2023 in which P’s mother states to D2:

“This fund is the money you help with financial management, and it is also the money I plan to use to pay AIA. It was due in January 2022. In the past one and a half years, you delayed the payment more than once, and I have tried my best to extend it to you, but……. You can’t keep defaulting unilaterally”.

Mr Lau submitted that this message showed P’s mother was treating the dealing as money belonging to herself, which was contrary to P’s case. Further, he submitted she does not refer to the money as a loan. I do not agree. The language of payment due, delay in payment and unilateral default all suggests a loan arrangement to me. The reference to financial management could (taking into account the poor quality of the translation) equally be to D2 taking a loan to assist with his financial management of D1.

ii.  A message on 31 August 2023 in which P’s mother states:

“In addition, no matter how you explain it, my fund was all from Shengde Wealth Management as my insurance client, and you are also a joint guarantor, which you know very well!”

iii.  A third message on 31 August 2023 in which P’s mother states to D2:

“You can also check the time to see whether this fund is related to the money you managed.”

As to these last two messages, their meaning in isolation is not clear, and D2 has not explained what they mean in his evidence. Taken in isolation, I am unable to see them as credible evidence that the Loan Agreement is a sham and a façade for a trust arrangement.

41.  In contrast, I consider that most of the relevant We Chat messages for the period August to November 2023 which have been put in evidence (so far as have been translated) indicate that P’s mother and D2 were communicating as if they were discussing the repayment of a loan eg on 21 August 2023 at 4.45pm, 22 August 2023 at 7.18 am, 31 August 2023 at 9.45 am 31 August 2023 at 10.40am, 31 August 2023 at 1.10pm, 4 September 2023 at 2.51 pm, 1 November 2023 at 9.01 am.

42.  By way of a further example, on 13 November 2023, P’s mother messaged D2 and stated:

“…you have repeatedly broken your promises, each time the agreement is made but it cannot meet the fact…”

43.  This seems to me to indicate that P’s mother is frustrated that D2 is not honouring his agreements, and therefore that the agreements are genuine.

44.  None of the evidence relied upon by the Ds seems to me to establish any doubt at all as to the genuineness of the executed formal written loan agreement, extensions and guarantees.

45.  On this basis, I am not satisfied that the Ds have raised a credible argument that the Loan Agreement is a sham.

46.  Thirdly, Mr Lau submitted “It is peculiar that drawdown notice and relevant provisions were not followed and the pleadings [sic] at Paragraph 7 of the Amended SOC is incorrect”. This argument is made as follows:

a.  Clause 4.1 of the Loan Agreement provides (so far as material) that D1 may draw down the Loan on 20 January 2020 (or such other date as agreed by the parties) as specified in the Drawdown Notice provided P receives the duly completed Drawdown Notice by no later than 10 am on 20 January 2020.

b.  It is common ground that no Drawdown Notice was issued.

c.  P’s evidence is that she transferred the equivalent of USD 5 million to D2’s account on 21 January 2020. Para. 7 of the Amended SOC pleads that the Loan was drawn down on 21 January 2020 “in accordance with Clause 4.1 of the Loan Agreement”.

d.  P has not satisfactorily explained the deviation from Clause 4.1.

e.  The Court is not in a position to grant judgment based on an untrue plea.

47.  I disagree that the argument raises a triable issue for the following reasons.

a.  It was not disputed in evidence that the parties had agreed that, notwithstanding the wording of the Loan Agreement, P should make payment of the Loan to D2’s account, and that such payment was made.

b.  On D2’s own evidence, D2 transferred the Loan sum to D1.

c.  D1 acknowledge receipt of the Loan in writing.

d.  D2 facilitated, and D1 accepted, the Loan notwithstanding there was no Drawdown Notice issued.

e.  Clause 8.2 of the Loan Agreement provides:

“The Lender undertakes that the Lender shall distribute the Loan from the following designed bank account under the name of the Lender as specified in this Agreement. The borrower shall have the right, at its sole option and discretion, to reject any payment of the Loan remitted from any bank account of a third party. The Borrow [sic] shall in no event be responsible or liable to any person for any disbursement of the Loan remitted from any bank account of a third party.” (emphasis added)

f.  It is common ground that D1 did not reject the Loan on the basis of it having been remitted from D2’s account, or for any other reason.

g.  Clearly, the parties agreed to the manner of drawdown, notwithstanding this was a variation of the procedure originally envisaged by Clause 4.1.

h.  The material fact for the purposes of the Amended SOC is that P made the Loan to D1.

i.  In my view, there is no omission of material fact in paragraph 7 of the Amended SOC by not pleading the agreed variation to Clause 4.1.

48.  Fourth, Mr Lau argues that the Extension Agreements are not true extension agreements as alleged by P. The argument is put as follows:

a.  The 1^st and 2^nd Extension Agreements, when examined, are in the form of loan agreements and are almost identical to the Loan Agreement.

b.  The recitals thereof are incorrect because they state that D1 wishes to borrow USD 5 million, without reference to the Loan.

c.  Most of the provisions in the 1^st and 2^nd Extension Agreements are not applicable and inconsistent with P’s allegation that they are extension agreements, eg drawdown notice provisions.

d.  This suggests that sample documents were used as a façade for the trust arrangement.

e.  The signing pages state that the documents would be executed under seal but they were not.

f.  These peculiar features call for investigation at trial as to whether the true nature of the Loan Agreement and Extension Agreements were as pleaded by P.

49.  I do not agree that these matters give rise to any triable issue.

a.  Mr Lau’s argument appears to be a departure from D2’s own evidence. D2’s 1^st affirmation paras. 24 to 26 states that the 1^st and 2^nd Extension Agreements, on their face, extended the maturity dates for the purported Loan Agreement and were part of the façade for the trust arrangement. (It is not suggested that there was an intention to create a new loan or to create the appearance of a new loan).

b.  The cover page for each of 1^st and 2^nd Extension Agreements stated “This agreement is an extension of the past loan agreement dated on January 20, 2020. Related Premiums and Interests will be paid on the due date of [new maturity date]”.

c.  It is not arguable that the 1^st and 2^nd Extension Agreements were new loan agreements where there was no contemporary correspondence nor any contemporaneous conduct indicating such intention eg no new loans were advanced thereunder.

d.  It is entirely plausible that the 1^st and 2^nd Extension Agreements as executed contained provisions which were not correct, appropriate or applicable. However, there is no doubt in my mind that the purpose of the 1^st and 2^nd Extension Agreements was to extend the maturity date for the repayment of the Loan.

50.  Fifth, Mr Lau argues that “the behaviours of the parties are inconsistent with P’s allegation of a loan and inconsistent with [clause] 8.2 [of the Loan Agreement]”. The argument is put as follows:

a.  Clause 8.2 (as set out above) provided that the Loan must be distributed by P to D1, but instead P paid D2.

b.  There is a triable issue as to whether the Loan was enforceable.

c.  This issue also affects the true nature of the dealing between the parties.

51.  I do not agree.

a.  I have addressed my views on Clause 8.2 above at para. 47 above.

b.  The fact that the parties have agreed to vary aspects of performance of the Loan Agreement does not render it invalid. Whilst variations in performance which might totally alter the character of an agreement could in theory give rise to an arguable issue as to whether the written agreement is a sham, that is not this case. The fact that the Loan was, by agreement, paid not directly by P to D1, but by P to D2, who then paid D1, does not by itself raise any credible argument that the Loan is not a true loan.

52.  Sixth, Mr Lau submits that there is a triable issue as to whether the Ds are liable to P in light of Clause 8.3 of the Loan Agreement. The argument is as follows:

a.  Clause 8.3 provides:

“Legitimacy of the sources of the Loan

The Lender undertakes the legitimacy sources of the Loan. In the event of any suspension or confiscation of any part of the payment of the Loan or any results beyond the control of the Borrower by any acts of relevant government agencies or monetary regulatory authorities in relation to any concerns over any sources of the Loan, each of the Borrower and the Guarantor shall in no event be responsible or liable to any person for any such payment of the Loan and interest accrued therefrom.” (emphasis added)

b.  The fact that the Loan was not paid in USD but was paid in the Mainland in RMB calls out for investigation.

c.  D2 has filed evidence of a CSRC decision dated 7 May 2022 which found that P’s mother had committed insider trading, and that RMB 7 million had been transferred from P’s mother’s account into P’s account on 11 February 2020.

d.  D2’s evidence states his concern about exchange controls and that a loan paid in RMB should not be repaid in USD.

e.  There is a triable issue under Clause 8.3 as to whether the Ds are liable to P due to the foreign exchange control of the PRC regulatory authorities.

53.  I do not agree.

a.  When asked what was the relevance of P’s mother’s payment of 11 February 2020 to this case, when P’s loan to D1 had been made on the earlier date of 21 January 2020, Mr Lau could not take the matter further.

b.  There is no suggestion in the evidence that the source of the Loan has been impugned by anyone, whether the PRC authorities or otherwise.

c.  There is no evidence filed of any PRC law problem relating to the Loan.

d.  In any event, Clause 8.3 is inapplicable as it is concerned with action being taken against the Ds by third parties on the basis of the legitimacy of the source money. It does not apply to the liability of the Ds to P for the Loan itself.

54.  Seventh, Mr Lau argued that the 3^rd to 5^th Chinese Extension Agreements were not executed properly. The argument is as follows:

a.  The 3^rd to 5^th Chinese Extension Agreements were only signed by P, D1 and D3, but not D2, so D2 is not party and is not bound.

b.  The signing pages contain only signatures but no seals or chops of D1 and D3, so that it is a triable issue as to whether these agreements are enforceable against D1 and D3. (I note again that D3 does not bring this appeal).

c.  Whilst P’s evidence states that the 3^rd to 5^th Chinese Extension Agreements were signed by Nelson Wong, that is incorrect and they were actually signed by Li Xueguang.

d.  This calls for investigation at trial; it affects the credibility of P’s case, especially the true nature of the dealings between the parties.

55.  I do not agree that there is a credible triable issue.

a.  As to the point about D2 not having signed the 3^rd to 5^th Chinese Extension Agreements, that was initially raised before the Master, but, after it was apparent that the 3^rd to 5^th Chinese Extension Agreements provided for a lower interest rate than the Loan Agreement, the point was abandoned by D2’s then counsel Mr Siu. (This is recorded at paragraph 10 of the Master’s Ruling).

b.  In any event, D2 provided a continuing guarantee in the Loan Agreement, so that it was not necessary for him to agree to the new maturity date agreed by P as lender and D1 as borrower. D3 signed because it was agreeing to become an additional guarantor.

c.  Further, D2 signed on behalf of D1 so clearly knew and implicitly consented.

d.  Mr Lau has not referred to any authorities to substantiate his submission that the 3^rd to 5^th Chinese Extension Agreements are unenforceable due to lack of chop or seal.

e.  I note that D1 to D3 have had the benefit of the extended maturity dates provided for in the 3^rd to 5^th Chinese Extension Agreements, and no argument as to unenforceability has been raised before the O.14 application.

Order

56.  Accordingly, I dismiss the appeal. As submitted by counsel for the parties at the hearing, in these circumstances, costs follow the event: P’s costs of and incidental to the appeal to be paid by D1 and D2, to be taxed if not agreed.