CHINA SUN FINANCE COMPANY LTD v. MORALITY INTERNATIONAL TRADING LTD AND OTHERS

HCMP 2131/2016

[2023] HKCFI 2150

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2131 OF 2016

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DECISION

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1.  In this judgment, unless otherwise stated, (1) references to numbered sections and sub-sections are to those of the Money Lenders Ordinance (Cap 163) (“MLO”) as at 27 May 2015[1]; and (2) all monetary figures are denominated in Hong Kong dollars.

Introduction

2.  By the originating summons issued herein on 16 August 2016 (“OS”) pursuant to Order 88 of the Rules of the High Court (Cap 4A) (“RHC”), the plaintiff seeks recovery of the principal and accrued interest of a loan of $48,000,000 (“Loan”) that it had advanced to the 1^st defendant pursuant to a deed of loan agreement dated 27 May 2015 (“Loan Agreement”).

3.  The repayment of the Loan is secured by:

(1)  a first legal charge also dated 27 May 2015 (“Legal Charge”) of the ground floor and car park A on the ground floor, 23 Plantation Road, Hong Kong (“Property”); and

(2)  a personal unlimited guarantee by each of the 2^nd and 3^rd defendants both dated 27 May 2015 (“D2 Guarantee” and “D3 Guarantee” respectively and “Guarantees” collectively). 

In enforcement of these securities, the plaintiff also prays for delivery of vacant possession of the Property and judgment against the 2^nd and 3^rd defendants as guarantors of the Loan.

4.  The 1^st and 2^nd defendants do not dispute the advancement of the Loan by the plaintiff to the 1^st defendant, save for a disagreement as to whether the 1^st defendant had the use of the entire Loan or whether the 1^st defendant had ultimately disbursed parts of the proceed of the Loan to others upon the instructions given by or on behalf of the plaintiff.  They resist these proceedings on the basis that the plaintiff had committed various breaches of the MLO and that the court should not at this stage exercise its discretion to permit recovery of the Loan because the facts relevant to the court’s exercise of discretion require investigation at trial.  Thus, by summons dated 5 November 2020, the 1^st and 2^nd defendants ask for an order that these proceedings should continue as if begun by writ.

5.  Whilst the 3^rd defendant was not present or legally represented at the hearing of the OS on 11 November 2020, the grounds of opposition and submission advanced on behalf of the 1^st and 2^nd defendants, whether upheld or otherwise, would impact equally upon the liability of the 3^rd defendant. 

Factual background

6.  The plaintiff is a licensed money lender under the MLO.

7.  The 1^st defendant is a company incorporated in Hong Kong.  Its sole shareholder is one Dubai Finance Group Limited, which is in turn wholly owned by the 3^rd defendant. The 1^st defendant is at all material times the registered owner of the Property.

8.  The 2^nd defendant is the father of the 3^rd defendant and the manager of the 1^st defendant.

9.  In early 2015, the 1^st defendant was in need of funds to refinance a short-term loan (“LSH Loan”) owed to one Lei Shing Hong Limited.  The 1^st defendant eventually approached the plaintiff to obtain the Loan. 

10.  By a facility letter dated 6 May 2015 and countersigned by each of the defendants (“Facility Letter”)[2] to signify their acceptance, the plaintiff agreed to extend the Loan to the 1^st defendant on the basis that repayment would be secured by the Legal Charge and the Guarantees.  Materially:

(1)  The Facility Letter specifies the plaintiff as lender, the 1^st defendant as borrower, and the 2^nd and 3^rd defendants as guarantors.

(2)  The principal amount of the Loan is stated to be $48 million, which shall be repaid within 12 months from the date of drawdown of the Loan.

(3)  The interest on the Loan is agreed at 12% per annum. 

(4)  The plaintiff is entitled to charge default interest at the monthly rate of 24% (which can be translated into an annual rate of 288%) as follows:

“(a) Time shall be the essence of any payment to be made by the [1^st defendant].

(b) [The plaintiff] reserves the right to charge default interest on a day to day basis on any sum which is not paid when due. Default interest is chargeable at the interest rate of 24% per month on such sum which is not paid when due.

(c) For the avoidance of doubt, interests chargeable under this default interests clause shall not be calculated in any way as to contravene [s 22].”

(“Default Interest Provision”).

(5)  The Facility Letter also sets out the condition precedents which must be satisfied for the Loan to be granted.  These include the execution of the Loan Agreement and the Legal Charge by the 1^st defendant and the Guarantees by the 2^nd and 3^rd defendants. 

11.  Against such background, on about 27 May 2015, the defendants executed the following documents at LWT’s Office:

(1)  the Loan Agreement by the 1^st defendant;

(2)  the Legal Charge by the 1^st defendant;

(3)  the D2 Guarantee by the 2^nd defendant; and

(4)  the D3 Guarantee by the 3^rd defendant.

12.  The Loan Agreement contains substantially similar terms as the Facility Letter.  For present purposes, it suffices to note:

(1)  clause 2 which provides for the advancement of the Loan by the plaintiff to the 1^st defendant;

(2)  clause 3 which fixes interest at 12% per annum calculated on a daily basis and accrued at the end of each calendar month; 

(3)  clause 4 which requires interest to be repaid on a monthly basis, while the principal sum should be repaid by the maturity date which is 12 months from the date of drawdown of the Loan.

13.  It is worthy of note that the Loan Agreement does not contain any Default Interest Provision.

14.  By the Legal Charge, the 1^st defendant mortgaged the Property to the plaintiff to secure its indebtedness to the plaintiff. For present purposes, it suffices to note that:

(1)  Clause 1.01(h) defines “Secured Indebtedness” to mean all sums of money which the 1^st defendant covenants, or becomes liable, to pay the plaintiff under the terms of the Legal Charge.

(2)  Clause 2.01(viii) requires the 1^st defendant to, on demand, make good and discharge to the plaintiff all sums of money, obligations and liabilities now or at any time due, owing or incurred to the plaintiff by the 1^st defendant, including:

“all principal interest and any other monies which are or may from time to time become due and payable by the [1^st defendant] to the [plaintiff] in respect of any loan facility advanced by the [plaintiff] to the [1^st defendant] pursuant to the terms and conditions of any facility letter or any agreement between the [plaintiff] and the [1^st defendant] relating to such loan facility, as amended or supplemented from time to time” (emphasis added)

(3)  By clause 3.01, with the object and intent of affording the plaintiff security for the “Secured Indebtedness”, and the due fulfilment by the 1^st defendant of the agreements, covenants and conditions imposed in the Legal Charge, the 1^st defendant mortgaged the Property to the plaintiff.

15.  By the D2 Guarantee and the D3 Guarantee, the 2^nd and 3^rd defendants respectively guarantee the 1^st defendant’s liabilities to the plaintiff under the Legal Charge.

16.  On the same date (i.e. 27 May 2015), the 1^st defendant drew down the Loan. 

17.  The 1^st defendant had apparently paid interests on the Loan to the plaintiff in accordance with the terms of the Loan Agreement up and including 26 June 2016.

18.  However, the 1^st defendant failed to repay the plaintiff the principal of the Loan or any part thereof whether on 26 May 2016 (being the agreed maturity date under the Loan Agreement) or at all.  Nor did the 1^st defendant continue to make any more interest payment to the plaintiff, whether at the agreed contractual rate at 12% per annum or the default interest rate at 288% per annum.

19.  By letters dated 30 June 2016 from LWT as the plaintiff’s solicitors to the defendants, the plaintiff demanded the defendants for repayment of the principal and interest (from 27 June 2016) of the Loan.  The plaintiff did not demand default interest from any of the defendants. 

20.  Notwithstanding the demand letters, the defendants have not repaid any further part of the principal or interest of the Loan.

21.  On 16 August 2016, the plaintiff issued the OS against all 3 defendants.

22.  The 1^st and 2^nd defendants do not dispute the factual background set out above.  Instead, they contend in their affidavit evidence that the Loan was extended in breach of various provisions of the MLO.  Among other things, they allege that:

(1)  Sometime in 2015, when the 1^st defendant needed to refinance the LSH Loan, the 2^nd defendant was introduced to a man whose first name is “Philip” (“Philip”).  Philip in turn introduced the 2^nd defendant to another man with the first name “Ray” (“Ray”). 

(2)  Philip and Ray made arrangements for the 1^st defendant to apply for and obtain the Loan from the plaintiff.  They were the contact persons who liaised with the defendants on behalf of the plaintiff.  In particular, the 2^nd defendant recalls having met Ray in the Plaintiff’s Office. 

(3)  Although the Facility Letter stated its place of execution as the Plaintiff’s Office, in reality, all the documents relating to the Loan, including the Facility Letter, were executed at LWT’s Office. 

(4)  Before the loan documents were executed, 2 solicitors of LWT had explained their contents to the defendants and specifically drew their attention to the fact that default interest would be chargeable under the Facility Letter at the rate of 24% per month in the event of default.  This gave the defendants the impression that the Default Interest Provision was lawful and binding on them.

(5)  Whilst the 1^st defendant did draw down the Loan, it did not receive the full amount of the principal of $48 million for its use because the 1^st defendant had reached a “side-deal” with the plaintiff, under which the 1^st defendant was required to “pay money to the [plaintiff] or [its] related parties as part of the real deal which is not officially recorded in any document”.  In this connection,the 1^st defendant paid various sums of monies into the bank accounts of different individuals pursuant to the instructions of Philip and Ray who, the defendants contend, were acting as the plaintiff’s agents in giving such instructions to the 1^st defendant. 

23.  In view of the affidavit evidence filed by the 1^st and 2^nd defendants, Mr Brian Lee, counsel for the 1^st and 2^nd defendants, submits that there are triable issues which render the OS unsuitable for determination without a trial.  According to Mr Lee, there are at least the following triable issues:

(1)  whether, by reason of the Default Interest Provision in the Facility Letter, the extension of the Loan contravened s 22(2) (“Default Interest Issue”);

(2)  if so, whether the court ought to exercise its discretion to allow the plaintiff to recover from the defendants the principal, as well as the agreed contractual interest, of the Loan (“Discretion Issue”); and

(3)  whether the plaintiff had, in contravention of s 27, colluded with others to obtain any unlawful payment from the defendants for advancing the Loan that should be set off pursuant to s 27(4) from the 1^st defendant’s liability to the plaintiff (“Section 27 Issue”).

24.  The plaintiff denies the factual allegations raised by the defendants.  It submits through counsel, Mr Sunny Chan (with him, Ms Cindy Kong), that there is no triable issue and that summary judgment should be given in favour of the plaintiff.

Applicable legal principles

25.  There is no real dispute between the parties on the applicable principles.

26.  It is common ground that the court can give judgment summarily in favour of the plaintiff if there is no triable issue on the evidence, even though the matter is litigated by way of the Order 88 procedure：Bank of China (Hong Kong) Ltd v China Hong Kong Textile Co Ltd [2011] 4 HKLRD 457 per Johnson Lam J (as Lam PJ then was) at [5]; Wing Hang Bank Ltd v Liu Kam Ying [2002] 2 HKC 57 per Ma J (as the former CJ then was) at [10].

27.  On the other hand, Order 28, rule 8(1) of the RHC empowers the court to order proceedings begun by an originating summons to continue as if begun by writ:

“Where, in the case of a cause or matter begun by originating summons, it appears to the Court at any stage of the proceedings that the proceedings should for any reason be continued as if the cause or matter had been begun by writ, it may order the proceedings to continue as if the cause or matter had been so begun and may, in particular, order that any affidavits shall stand as pleadings, with or without liberty to any of the parties to add thereto or to apply for particulars thereof.”

28.  As G Lam J (as G Lam JA then was) made clear in The Incorporated Owners of Foo Hoo Centre v Hong Kong Alliance In Support Of Patriotic Democratic Movements In China [2016] 1 HKC 517 at [9] and [10], the power of Order 28, rule 8(1) may be exercised where there is a substantial dispute of fact which requires resolution by way of a trial:

“9. Order 28 rule 8 confers a flexible case management power on the court. It is a discretionary power (note the word “may”) that can be exercised where the Court takes the view that the proceedings should “for any reason” be continued as if begun by writ.  Rule 8 does not specify or limit the possible reasons, but the usual ground relied upon by defendants is that there are substantial disputes of fact.

10. The rationale is that, in general, where there are substantial factual disputes, there should be pleadings so that the precise issues between the parties can be properly identified (although Order 28 rule 4(5) also empowers the court to order points of claim etc to be delivered and stand as pleadings without converting the proceedings into a writ action).  Lack of pleadings in complicated cases can often cause difficulties both at trial and on appeal; see e.g. Young’s Engineering Co Ltd v The Hong Kong and Shanghai Banking Corporation Ltd & Ors (unrep., HCMP 2676/2002, 18 June 2004). Cross-examination of the witnesses and discovery of documents may also be necessary for resolving disputes of fact, which are not automatically provided for in the originating summons procedure, although it is, again, possible for the court, where appropriate, to give specific directions for cross-examination of deponents of affidavits (see RHC Order 28 rule 4(4) and Order 38 rule 2(3)) and for discovery of documents (see Order 24 rule 3) without ordering the whole proceedings to continue as if begun by writ.”

29.  In deciding whether there is a substantial dispute of fact that should be resolved only after a proper trial, the court will not take the assertions on their face value in isolation but must undertake an assessment on whether the assertions by the defendants are believable at all.  As stated by Deputy High Court Judge To in Ip Kam Wah v Fair City Group [2005] 4 HKLRD 168 at [7]:

“When faced with conflicting affidavits from both parties, the court will be failing in its duty if it should take the assertions in the affidavits on their face value in isolation and jump to the conclusion that there is a triable issue without first considering whether the assertions in the affidavits are believable. I bear in mind the test laid down by Bokhary JA (as he then was) in Re Safe Rich Industries Ltd, Civil Appeal No 81 of 1994 that whether the assertions are believable is a question to be answered not by taking the assertions in isolation but by taking them in the context of so much of the background as was either undisputed or beyond reasonable dispute. In an originating summons procedure, it is only when the court is satisfied after having undertaken that exercise that factual disputes could not be resolved on affidavit evidence that oral evidence or trial should be considered.”

Default Interest Issue

30.  Section 22 provides as follows:

“(1) Any agreement made for the loan of money by a money lender shall be illegal if it provides directly or indirectly for—

(a) the payment of compound interest;

(b) prohibiting the repayment of the loan by instalments; or

(c) the rate or amount of interest being increased by reason of any default in the payment of sums due under the agreement:

Provided that provision may be made by any such agreement that if default is made in the payment upon the due date of any sum payable to the money lender under the agreement, whether in respect of principal or interest, the money lender shall be entitled, subject to Part IV, to charge simple interest on that sum from the date of the default until the sum is paid at an effective rate not exceeding the effective rate payable in respect of the principal apart from any default, and any interest so charged shall not be reckoned for the purposes of this Ordinance as part of the interest charged in respect of the loan.

(2)  Notwithstanding subsection (1), if the court before which the legality of any agreement comes in question is satisfied that in all the circumstances it would be inequitable that any such agreement which does not comply with this section should be held to be unenforceable, the court may order that such agreement is enforceable to such extent, and subject to such modifications or exceptions, as the court considers equitable.”

31.  As stated in Easy Fortune Property Limited v Yung Chun Him [2019] HKCA 1055 per Chu JA (as Chu V-P then was) at [35], the intent of s 22(1)(c) is to prohibit the charging of default interest that is at a rate higher than the contractual interest rate at which a loan is extended. The proviso, however, permits the charging of simple interest on overdue payment, whether it is principal or interest, at an effective rate that does not exceed the effective rate payable in respect of the principal apart from any default, and provided that the effective rate does not exceed 60% per annum[3].

32.  In this case, the Default Interest Provision empowers the plaintiff to charge interest on the occurrence of an event of default at the rate of 288% per annum on any amount outstanding. On any view, the loan transaction under scrutiny is illegal if the Default Interest Provision is part of the “agreement” between the parties in respect of the Loan.

33.  In this regard, I agree with Mr Lee that there is at least a triable issue as to whether the Default Interest Provision (found in the Facility Letter but not the Loan Agreement or the Legal Charge) formed part of the agreement between the parties in respect of the Loan, in view of the following:

(1)  The Facility Letter was clearly intended to be contractually binding.  It contains all the material terms of the Loan, and specifically states that such terms may be accepted upon the Facility Letter being signed by the defendants.

(2)  Furthermore, neither the Loan Agreement nor the Legal Charge contains any provision that they superseded the Facility Letter.  On the contrary, it is at least arguable that by reason of clause 2.01(viii) of the Legal Charge (set out in [14(2)] above), the 1^st defendant is made liable for any sums due under the Facility Letter. 

34.  These matters do not seem to be disputed by Mr Chan on behalf of the plaintiff.  Instead, Mr Chan submits that s 22 is simply not engaged at all because the plaintiff merely “reserves the right” to charge default interest thereunder.

35.  With respect, I am unable to accept Mr Chan’s argument.  Properly construed, s 22(1)(c) is intended to prohibit the conferral on a lender the right to charge default interest. Whether the lender actually intends to exercise its contractual entitlement to claim default interest should be irrelevant to whether s 22(1)(c) is engaged at all.

36.  For these reasons, I find a triable issue as to whether the terms of the Loan contravenes s 22(1)(c) and is therefore illegal by reason of the Default Interest Provision in the Facility Letter. 

37.  In coming to this conclusion, I have not lost sight of the last part of the Default Interest Provision which reads as follows:

“For the avoidance of doubt, interests chargeable under this default interests clause shall not be calculated in any way as to contravene [s 22].”

38.  On the face of it, this sentence appears to have the effect of negating the Default Interest Provision altogether.  The plaintiff would no doubt try to construe such provision in a way that renders it compliant with s 22(1)(c).  However, the strength of any such potential argument is not so readily apparent to me that I can conclude at this point that the Default Interest Issue is not triable at all.  In fact, Mr Chan did not pursue, and rightly so in my view, this line of argument in his skeleton submission.

39.  Before I leave the Default Interest Issue, for the sake of completeness, I should mention that the defendants have also referred to and placed reliance on s 24, which renders a loan agreement and the securities therefor unenforceable where interest is charged at an effective rate of more than 60% per annum[4]. 

40.  It is unnecessary and I do not propose, for present purpose, to go into the relevance of s 24 to the Default Interest Provision, save for a quick observation that Easy Fortune Property Limited v Yung Chun Him, supra is a Court of Appeal authority for the proposition that in deciding whether a loan is unenforceable under s 24, one does not take into account default interest, and that s 22 is the only section dealing with the charging of default interest.

Discretion Issue

41.  Mr Chan submits that even if s 22(1)(c) is engaged, I should nonetheless exercise my discretion at this stage under s 22(2) to permit the plaintiff to recover the principal amount of the Loan as well as the interest thereon (from 27 June 2016) at the contractual rate of 12% per annum.

42.  The court’s discretion under s 22(2) may be exercised even in proceedings of a summary nature: Ontone Finance Company Limited v Leung Lai Ching Margaret, HCA 372/2011, unreported (13 August 2012) at [30] per Deputy High Court Judge Le Pichon.

43.  The question is whether it would be right to do so in the particular circumstances of the case.  In this regard, as DHCJ Le Pichon held in Ontone Finance Company Limited v Leung Lai Ching Margaret, supra, at [34], whether the discretion should be exercised is necessarily fact-sensitive, and regard must be had to all the facts and circumstances of the particular case.  The court must be satisfied it has sufficient evidence before it to warrant the exercise of the discretion.

44.  In Emperor Finance Ltd v La Belle Fashions Ltd (2003) 6 HKCFAR 402 at [119], Ribeiro PJ noted that in exercising its discretion in the context of s 18(3), the court should examine the breach or breaches in question, their consequences for the parties to the transaction and any other circumstances which may make it inequitable to hold the agreement unenforceable.

45.  In this case, I am not satisfied that I have sufficient evidence before me so as to warrant the exercise of discretion at this stage in a summary manner.  I am of the view that the full circumstances in which the extension of the Loan was executed merit investigation in a trial. My reasons are as follows.

46.  I am conscious that there is no evidence that the plaintiff has ever levied default interest on the defendants.  However, I cannot ignore the fact that the Default Interest Provision exists and provides for a ridiculously exorbitant rate of interest chargeable upon default. Accordingly, I would have expected the plaintiff, a licensed money lender, to be forthcoming with this court on how the Default Interest Provision came to find its way into the Facility Letter.

47.  Unfortunately, no or no proper explanation has yet been tendered in this regard.  Among other things, it is not suggested by the plaintiff that the Default Interest Provision was included as a result of an honest mistake or reliance on wrong advice.  Instead, Mr Wang Xiu Hua, a director of the plaintiff, chose to simply repeat that the plaintiff had not relied on the Default Interest Provision whether before or after the commencement of these proceedings.  Not only so, in some parts of Mr Wang’s evidence, the plaintiff appeared to consider itself contractually entitled to invoke the Default Interest Provision – it was just that the plaintiff would not invoke the same “as a matter of course”.

48.  Another matter which has a bearing on the exercise of discretion is whether, as the defendants alleged, the solicitors of LWT had specifically drawn their attention to the Default Interest Provision before the Facility Letter was executed, thereby creating an impression on the defendants that such term is legal and enforceable against them.

49.  In this regard, the plaintiff’s evidence is that among other things:

(1)  The defendants executed the Facility Letter in the Plaintiff’s Office, attested by one of the plaintiff’s employees and in the absence of any solicitors.

(2)  Consistently, the Facility Letter stated its place of execution to be the Plaintiff’s Office.

(3)  The explanation of the Facility Letter to, and the attendance to its execution by, the defendants was not one of the billed items of work in the bill rendered by LWT.

50.  The test for a summary determination at this stage is whether the defendants have raised an issue the resolution of which requires a trial.  I do not consider the defendants’ allegation to be incredible because:

(1)  The defendants have specifically denied having attended the Plaintiff’s Office for the execution of the loan documentation. They claim that they only attended LWT’s Office for such purpose.  There is nothing inherently incredible about this claim.

(2)  I also take note of the fact that the plaintiff has not procured LWT to confirm its version of events.  According to the plaintiff, LWT attended to the execution of the loan documents as the plaintiff’s solicitors only.  If this were the case, the plaintiff should have no difficulty in procuring LWT to give an account of what transpired at their meeting with the defendants.

51.  Most importantly, according to the defendants, whilst the 1^st defendant did draw down the Loan, it did not receive the full amount of the principal of $48 million for its use because the 1^st defendant had reached a “side-deal” with the plaintiff, under which the 1^st defendant was required to “pay money to the [plaintiff] or [its] related parties as part of the real deal which is not officially recorded in any document”.

52.  Apart from grounding a potential defence under s 27, such case, if accepted, would call into question the amount of the principal of the Loan for which the court can exercise its discretion under s 22(2).

53.  For these reasons, it would, in my opinion, be imprudent for the court to summarily exercise its discretion to permit recovery of the Loan in favour of the plaintiff at this stage.

54.  Given my views on the Default Interest Issue and the Discretion Issue, it is unnecessary for me to express any view on the Section 27 Issue at this point.

Conclusion & Disposition

55.  For the reasons stated above, summary disposal of the OS is inappropriate.

56.  However, I do not believe the proper management of these proceedings would need pleadings.  The parties and the court should have no difficulty in identifying the issues requiring the court’s adjudication from the affidavits/affirmations in support/opposition. 

57.  For such purpose, I am prepared to give the parties leave to file and serve one more round of affidavits/affirmations (if so advised).  The defendants shall go first and shall have 21 days from today. The plaintiff shall follow and shall likewise have 21 days.  All relevant documents shall be produced as exhibits.  There shall be no further affidavit/affirmation without leave of the court. 

58.  The parties shall, based on the affidavits/affirmations filed and served, agree on, and lodge, with the court a list of issues, by which they will be bound, within 28 days after the filing and service of the said final round of affidavits/affirmations by the plaintiff. For such purpose:

(1)  The plaintiff shall provide the defendants with a draft of the list of issue within 14 days after the filing and service of its final affidavits/affirmations.  

(2)  The defendants shall give the plaintiff their comments, if any, on the draft list of issues within 7 days thereafter.

(3)  The plaintiff shall then file the list of issues within 7 days thereafter.  If there is no complete agreement on the list of issue, the differences should be clearly identified and stated.

59.  In addition to forming the basis on which the parties shall raise issues for the court’s determination, in compiling this last round of affidavits/affirmations, the parties are also forewarned that the deponents must be tendered for cross-examination at the trial of the OS and their affidavits/affirmations will, unless otherwise directed by the trial judge, stand as their respective evidence in chief.  

60.  The OS shall come back to me on 3 November 2023 at 9:30 am for a pre-trial review.

61.  I also make an order nisi that the costs of the hearing on 11 November 2020 shall be costs in the cause.

62.  I note that the 1^st and 2^nd defendants also ask for directions for certain related proceedings, namely HCA 189/2019 (by which the 1^st defendant herein seeks a declaration against the plaintiff that the Facility Letter and/or the Loan Agreement was/were unlawful and unenforceable) and HCA 811/2020 (which was commenced by one Mike.Mike Company Limited against (inter alia) one Freeway Finance Company Limited, one Oi Wah Property Credit Limited and one Gain Global Corporation Limited). 

63.  Given the pendency of these proceedings, I do not see any reason for the 1^st defendant to take separate action against the plaintiff in respect of the same subject-matter in HCA 189/2019, save to delay the plaintiff’s enforcement of the Loan Agreement, the Legal Charge and the Guarantees and/or to waste time and costs.  Any further grounds and matters that the 1^st defendant says would render the Facility Letter and/or the Loan Agreement unlawful should be raised in one go in these proceedings.  I therefore stay HCA189/2019.

64.  As for HCA 811/2020, I do not see how I can deal with a matter without the presence of all the parties before me.