LAW CHI LEUNG, DONNY AND ANOTHER v. CHAU CHIU NUNG

DCCJ3666/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVL ACTION NO. 3666 OF 2006

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D E C I S I O N

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1.  This is an application for order 14 summary judgment taken out by the plaintiffs against the defendant. 

2.  The facts and background of this case have been succinctly outlined by Mr Lee, counsel for the plaintiffs, and he drew my attention to all the relevant facts, evidence and law.  I agree entirely with Mr Lee’s submission on the facts and on the law.  I am not going to repeat his oral submission or oral representation; it is all recorded.  But I will deal with the main points briefly in my reasons here.

3.  This is a straightforward case of a loan between the two plaintiffs and the defendant.  They are closely related.  In fact, they were brothers-in-law and sister/brother relationship.

4.  The loan and the payment of interest are not disputed.  What were disputed was the duration of the loan and the interest rate payable. 

5.  The evidence in the two telephone conversations, the contents in these two telephone conversations and the subsequent letter from the 1st plaintiff to the defendant a few days after were not in issue either.

6.  The plaintiffs say the loan was for a period of three months and interest rate was 10 per cent per annum.  Defendant says the loan was for three years and interest was 1 per cent above Australian bank saving rate.

7.  There was no written agreement and there were no evidence of any kind to show the actual loan agreement and the payment of interest. 

8.  From the transcript of the telephone conversation, the taped telephone conversation, it is clear and unequivocal that the defendant acknowledged the loan and has acknowledged that the loan was for a period of three months.

9.  The defendant tried to explain that he did not want to have an argument; they were relatives.  And therefore he did not deny, in fact, he acknowledged, and he did not clarify that the length of loan or the duration of the loan in the telephone conversations.  He did not clarify that it was for three years and not for three months.

10.  Such an argument is inherently improbable and incredible.  If the loan was for three years, it was just not due.  And the plaintiffs, in chasing and pressing the defendant for the payment, would definitely meet some form of resistance or some clarification from the defendant saying, “Why are you doing this to me?  You knew that I needed the money.  You had lend me the money for three years.  You knew I am in business.  I needed the money for my business.  And three months into the loan you are now chasing after me, so strenuously, so vigorously.”  There must be some form of response.  But from the telephone conversation, it was obvious that there were none.  Clearly, this was not what the defendant was contending that it was a loan that simply was not yet due for repayment.

11.  The defendant’s contention that the interest rate was 1 per cent above the Australian bank saving rate is also in itself inherently improbable, in fact, wholly incredible.  The plaintiff’s side have made it very clear - have shown the court very clear evidence that the money was not idle money.  They have borrowed it from the bank on credit facilities and they were paying interest rate up to 7 per cent per annum for the credit facility.  And they had lent the money to the defendant.  In fact, they had lent that money they borrowed to the defendant.  Defendant’s argument, saying that the interest rate was 1 per cent above savings rate in the Australian Bank, is clearly a fabrication.  A fabrication that had been put up as a sham defence to deny the plaintiff’s right for repayment.

12.  These are the only two issues raised by the defendant in its defence.  The defendant was saying that these two issues raised triable issues.  And therefore the plaintiffs are not entitled to summary judgment.  They are no triable issues as seen in the evidence, as seen in the arguments before me, and I have no doubt at all the defendant was putting up a sham defence.  There are no triable issue at all.  No credible defence put up by the defendant.  The plaintiffs are entitled to summary judgment.

13.  I therefore enter judgment in favour of the two plaintiffs as against the defendant for the sum claimed, that is AUD100,000, together with interest at 10 per cent per annum, from 17 June 2005 to the date of the writ, that is 26 July 2006.  And further interest the judgment rate from the date of the writ to the date of full just satisfaction of the judgment amounts by the defendant to the plaintiffs.  So I deviate a little here, instead of giving 10 per cent from the date of the loan up to the date of payment.  I just base it on 10 per cent per annum up to the date of the writ, and thereafter by judgment rate.

14.  I also order that the defendant is to pay the plaintiff’s cost of this action, to be taxed if not agreed, and together with certificate for counsel of today’s hearing.