HONIP CREDIT LTD v. LEUNG TAK SING PAUL

CACV 516/2019

[2020] HKCA 879

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 516 OF 2019

(ON APPEAL FROM HCMP NO. 835 OF 2018)

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J U D G M E N T

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Hon Cheung JA (giving the Judgment of the Court) :

I. The appeal

1.  By way of an originating summons issued pursuant to Order 83A and Order 88 of the Rules of the High Court (Cap. 4A) (‘RHC’), the plaintiff applied for monetary judgment and possession of land against him.  The defendant failed to file acknowledgement of service and the plaintiff applied for judgment against him.  The defendant contested the application.  Master S.P. Yip gave judgment to the plaintiff.  The defendant appealed to Mr Recorder Eugene Fung SC who dismissed the appeal.  The defendant appeals to this Court. 

II.  Background

2.1  The Recorder summarised the factual background of the case :

1)  The plaintiff is a licensed moneylender and the defendant is the sole registered owner of Lot Nos. 1165 and 1166 in DD 121, Yuen Long, New Territories (‘the Property’). 

2)  The defendant has executed the following documents in favour of the plaintiff :

(1)  A loan agreement dated 12 December 2014 for the principal sum of $3,000,000 at an annual interest rate of 28.80% to be repayable by 120 monthly instalments (‘the 1^st Loan Agreement’).

(2)  A mortgage dated 12 December 2014 under which the Property was charged as security for securing general credit facilities granted by the plaintiff to the defendant upon the terms and conditions mentioned therein and up to $5,000,000 with interest, costs, expenses and charges (‘the 1^st Mortgage’).

(3)  A refinancing loan agreement dated 13 February 2015 for the principal sum of $3,300,000 at an annual interest rate of 28.80% to be repayable by 120 monthly instalments (‘the 2^nd Loan Agreement’).

(4)  A refinancing loan agreement dated 15 July 2015 for the principal sum of $5,000,000 at an annual interest rate of 21.60% to be repayable by 24 monthly instalments (‘the 3^rd Loan Agreement’).

(5)  A refinancing loan agreement dated 26 September 2016 for the principal sum of $6,200,000 at an annual interest rate of 20.40% to be repayable by 24 monthly instalments (‘the 4^th Loan Agreement’).

(6)  A second mortgage dated 26 September 2016 under which the Property was further charged as security for securing general credit facilities granted by the plaintiff to the defendant upon the terms and conditions mentioned therein and up to $3,000,000 with interest, costs, expenses and charges (‘the 2^nd Mortgage’).

(7)  A refinancing loan agreement dated 22 November 2016 for the principal sum of $6,900,000 at an annual interest rate of 20.40% to be repayable by 24 monthly instalments (‘the 5^th Loan Agreement’).

(8)  A refinancing loan agreement dated 10 April 2017 for the principal sum of $7,800,000 at an annual interest rate of 20.40% to be repayable by 24 monthly instalments (‘the 6^th Loan Agreement’).

(9)  A refinancing loan agreement dated 2 June 2017 for the principal sum of $8,400,000 at an annual interest rate of 20.40% to be repayable by 24 monthly instalments (‘the 7^th Loan Agreement’).

(10)  A third mortgage dated 2 June 2017 under which the Property was further charged as security for securing general credit facilities granted by the plaintiff to the defendant upon the terms and conditions mentioned therein and up to $400,000 with interest, costs, expenses and charges (‘the 3^rd Mortgage’).

2.2  The defendant has defaulted in making monthly payments due to the plaintiff under the 7^th Loan Agreement.

2.3  On 24 May 2018, the plaintiff’s solicitors sent demand letters to the defendant at, amongst others, the Property.  The plaintiff’s solicitors stated that the defendant had defaulted as to his repayment obligations under the 7^th Loan Agreement, the 1^st, 2^nd and 3^rd Mortgages, and demanded for payment within the next 7 days, failing which the plaintiff would proceed with an action against the defendant seeking an order for possession of the Property and for payment of the entire outstanding amount of indebtedness.

2.4  On 5 June 2018, the plaintiff issued the present proceedings.

III.  The relief sought

3.  The reliefs sought in the originating summons are as follows :

1)  Payment of all monies due to the plaintiff under the covenants contained in the 1^st, 2^nd and 3^rd Mortgages.

2)  Delivery by the defendant to the plaintiff of vacant possession of the Property.

3)  Costs on a full indemnity basis.

IV.  Grounds of appeal

1)  Ground 1

(1)  Pleading point

4.1  The first ground is that the Recorder erred in failing to find the plaintiff has not pleaded in the originating summons the 7^th Loan and the 7^th Loan Agreement, and also the 1^st to 6^th Loans and the 1^st to 6^th Loan Agreements and is therefore not entitled to claim any money and to obtain an order of payment of money against the defendant, and as a consequence of this, the plaintiff is not entitled to seek to rely on the three mortgages and to claim and obtain an order of vacant possession of the mortgaged properties.  Notwithstanding its wording, Mr Lam for the defendant stated that the first ground is confined to the plaintiff’s monetary claim only.  He submitted that the plaintiff who is a moneylender had not observed the requirements of Order 83A and had not pleaded a proper cause of action on the monetary claim.  He further submitted that the claim is defective because :

i)  The limit of the three mortgages is only $8.4 million but the plaintiff is claiming $9.8 million which is in excess of this limit.

ii)  The mortgages do not provide for the payment of interest.  The charging of interest is only provided for in the loan agreements which are not pleaded in the originating summons.

iii)  Whilst the mortgages provide for the granting of facilities, the 7^th Loan Agreement referred to the lending of money and not general facilities.

(2)  Moneylender’s action (Order 83A) and mortgage action (Order 88)  

4.2  Order 83A sets out the procedure and requirements of a moneylender’s action.  A moneylender has the meaning assigned to it by section 2 of the Money Lenders Ordinance (Cap. 163) (‘the MLO’).  A moneylender’s action means an action for the recovery of money lent by the moneylender and for the enforcement of any agreement or security relating to money so lent being an action brought by the lender or an assignee (Order 83A, rule 1). 

4.3  Order 83A, rule 2(1) states that every moneylender’s action may be begun by writ and the writ must be endorsed with a statement that at the time of the making of the loan or contract, or the giving of security in question, the lender was licensed as a moneylender.  Order 83A, rule 3 sets out the particulars to be included in the statement of claim, namely 

i)  the date on which the loan was made;

ii)  the amount actually lent to the borrower;

iii)  the rate per cent per annum of interest charged;

iv)  the date when the contract for repayment was made;

v)  the amount repaid;

vi)  the amount due but unpaid;

vii)  the date upon which such unpaid sum or sums became due; and

viii)  the amount of interest accrued due and unpaid on every such sum.  

4.4  When the defendant failed to give notice of intention to defend or in default of defence the plaintiff is not entitled to enter judgment except with the leave of the Court (Order 83A, rule 4). 

4.5  Order 83A, rule 4(2) provides that :

‘ (2)(a) An application for the grant of leave under this rule must be made by summons supported by an affidavit which must―

(i)  prove that the money is due and payable;

(ii)  give the particulars required by rules 2 and 3; and

(iii)  exhibit a true copy of any agreement or security relating to the money lent,

and the original agreement or security must be produced at the hearing of the summons.’  

4.6  When Mr Lam argued that Order 83A has not been complied with, he has ignored completely that the proceeding is also brought pursuant to Order 88 which deals with mortgage actions.  Order 88, rule 1(1) provides that this Order applies to any action (whether begun by writ or originating summons) by mortgagee or mortgagor in which there is a claim for, amongst other things, payment of money secured by the mortgage (Order 88, rule 1(1)(a)) and delivery of possession of property (Order 88, rule 1(1)(d)).  Order 88, rule 4(1) deals with the procedure in such actions if the defendant failed to acknowledge service of the originating summons.  The plaintiff must in such circumstances serve on the defendant a notice of appointment for the hearing of the originating summons together with a supporting affidavit (Order 88, rule 4(2)).

(3)  The present proceedings

4.7  The present proceeding is clearly a mortgage action within the ambit of Order 88 and the plaintiff had observed its rules in seeking judgment against the defendant.  At the same time, the plaintiff is a moneylender and the question is how is the plaintiff to comply with the requirement of Order 83A?  We are of the view that the plaintiff had in form and in substance complied with the requirements of a moneylender’s action under Order 83A.

4.8  Order 83A, rule 2 does not say that a moneylender’s action must be commenced by a writ.  On the contrary it says that it may be begun by writ.  If the action is commenced by writ, one would of course expect a statement of claim setting out the requirements contained in the rules.  But in this case the plaintiff commenced the proceedings by way of an originating summons (which is permissible) of which a statement of claim does not form a part.  It also complies with Order 7, rule 3(1) of the RHC which provides that :

‘ Every originating summons must include ... a concise statement of the relief or remedy claimed in the proceedings begun by the originating summons with sufficient particulars to identify the cause or causes of action in respect of which the plaintiff claims that relief or remedy.’

4.9  Further when the plaintiff applied for judgment, it was supported by the first affirmation of Wong Kin Keung who is the senior manager of the plaintiff in which he disclosed the plaintiff is a moneylender.  The rationale of Order 83A is to alert the Court that the action is a moneylender’s action.  The disclosure by the plaintiff satisfies this requirement.  The plaintiff had also complied with the particulars required by Order 83A by giving the specified details of the monetary claim.  Mr Wong’s first affirmation referred to the three mortgages in which the defendant agreed to repay the plaintiff upon written demand of all sums of money together with interest. 

4.10  Clause 2.1 of the 3^rd Mortgage provides that :

‘ COVENANT TO DISCHARGE OBLIGATIONS

2.1  In consideration of the Lender agreeing to made available to the Borrower the Facilities upon such terms and subject to such conditions as the Lender and the Borrower may from time to time agree, the Borrower covenant to pay on demand all Obligations to the Lender;’

4.11  Obligations are defined in Clause 1.1 :

‘Obligations

all principal, interest and other amounts from time to time owing by the Borrower to the Lender on any current and/or other account and all other liabilities whatsoever of the Borrower to the Lender whether present, future, actual and/or contingent;’

4.12  And facilities are also defined in Clause 1.1 :

‘ Facilities

  the credit facilities made available or to be made available to the Borrower by the Lender from time to time;’

4.13  Mr Wong referred to the 7^th Loan and the specific clauses of the 7^th Loan Agreement in which the defendant agreed to repay the plaintiff the principal and interest.

4.14  In our view the plaintiff’s cause of action on the monetary claim is sufficiently pleaded.  The relevant terms of the mortgages and the 7^th Loan Agreement clearly entitle the plaintiff to seek monetary judgment against the defendant.  The argument on the limit of $8.4 million under the three mortgages is a red herring because it has ignored the inclusion of interest that the defendant is liable to pay as well.  The obligation of the defendant is to repay ‘all principal, interest and other amounts from time to time owing’ by the defendant to the plaintiff.  Mr Lam’s argument on the granting of facilities does not carry the matter further.  We reject the defendant’s argument on the lack of a proper cause of action because of insufficient pleadings.  We also see no substance in the defendant’s argument that the 1^st to 6^th Loan Agreements must also be pleaded as well.

2)  Ground 2

(1)  Power to take possession under the mortgagee

4.15  The second ground of appeal is in respect of the claim for possession of the Property.  The security is immediately enforceable if the borrower makes default in the payment of the principal or interest.  The plaintiff’s right to enter into possession of the Property can be found in the following terms of the 3^rd Mortgage.

‘ 7.1 Subject in all cases to the First Mortgage, the Lender shall be entitled to declare all or any part of this security immediately enforceable at any time if :-

....

(b)  the Borrower makes default in the payment on the due date and in accordance with the terms and conditions relating thereto of any principal or interest or other moneys outstanding and payable by the Borrower under any term loan amount (whether demanded or not); or’

4.16  In the event the security becomes enforceable, the plaintiff under Clauses 8.1, 8.2 and 10 may appoint a receiver to take possession of the Property or exercise such power itself :

‘ 8.1 Upon or at any time after this security has become enforceable, or if so requested by the Borrower, the Lender may under seal or by writing under the hand of any director, officer or manager of the Lender appoint any person or persons to be a Receiver of the Property and may similarly remove any Receiver or appoint another in his place but without Prejudice to and subject always to the right of the First Mortgagee under the First Mortgage.

8.2  Any Receiver so appointed shall in addition to all other powers and rights implied by law (but subject to the First Mortgage) have power either in his own name or in the name of the Borrower:-

(a)  to take possession of, collect and get in the Property and to take the rents and profits thereof;’

‘ 10. All or any of the powers, authorities and discretions which are conferred either expressly or impliedly upon a Receiver of the whole or any part or parts of the Property by law and this Mortgage may but subject always to the right of the First Mortgagee under the First Mortgage be exercised by the Lender in relation to the whole or any part or parts of the Property without first appointing a Receiver of the Property or notwithstanding the appointment of a Receiver of the Property.’

4.17  In our view the plaintiff clearly has the right to apply for an order for possession of the Property.

(2)  Implied power and other arguments

4.18  The second ground of appeal seems to have arisen from Mr Wong’s first affirmation in which he stated that :

‘ 24. I am advised by the Plaintiff’s Solicitors and verily believe that under and by virtue of Section 51 of the Conveyancing and Properties Ordinance and the Fourth Schedule thereto, there shall be implied powers exercisable by the Plaintiff under the Mortgages to take possession of, to sell, to assign and to do all things necessary or desirable for realizing the Property.’

4.19  The defendant’s argument is that paragraph 2 of the Fourth Schedule of the Conveyancing and Property Ordinance (Cap. 219) gave power to the mortgagee to take possession of the mortgaged land but is subject to paragraph 11(a) which expressly stated that the power shall not be exercisable by the mortgagee unless there is default in payment for one month after the mortgagee has served the demand on the mortgagor.  As the plaintiff served the demand on the defendant on 24 May 2018, the plaintiff’s issuance of the Originating Summons on 5 June 2018 was pre-mature.

4.20  In our view, the plaintiff does not need to rely on the implied powers to take possession.  Such powers are already available under express terms of the 3^rd Mortgage.

4.21  The defendant also referred to the one month notice requirement under the proviso to Clause 6.01 of the 1^st Mortgage of which the 3^rd Mortgage is subject to.  In our view, the defendant has misread the ambit of the proviso.  It only applies to Clause 6.01(c) which deals with sale, calling in, collection or conversion into money by the plaintiff.  In the event of default relating to the payment of money payable there is no similar restriction in respect of the right to take to legal proceedings for possession under Clause 6.01(a).

3)  Ground 3

(1)  Compound interest

4.22  The third ground of appeal is that the Recorder erred in failing to find the plaintiff actually has lent a series of seven loans to the defendant which, individually and as a series, are tainted with compound interest and contravene section 22(1) of the MLO and therefore are illegal and unenforceable.

4.23  The first issue here is whether the plaintiff had charged compound interest.  Under the terms of the 7^th Loan Agreement (and other loan agreements as well) the plaintiff is entitled to repayment of the principal and payment of interest on the principal at 20.4% per annum (Clause 2(3)) by 24 installments (Clause 3).

4.24  Clause 7 of the 7^th Loan Agreement provides for interest to be charged on any due but unpaid amount (‘the default interest’) whether the amount consists of principal or interest, and such default interest is at the same interest rate normally payable on the outstanding principal. The rate of interest charged is 20.4% per annum.

4.25  The proviso to section 22(1) of the MLO permits default interest to be charged on the principal and interest if it is of the same rate payable in respect of the principal apart from any default :

‘ S.22(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;

…

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.’

4.26  As Chu JA explained in Easy Fortune Property Ltd v Yung Chun Him [2019] HKCA 1055 :

‘ 35. The effect of section 22(1)(c) is to prohibit the charging of default interest that is at a rate higher than the contractual interest rate. 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. ...’

4.27  Mr Wong in his second affirmation stated that the plaintiff had never charged interest upon the default interest for any of the loans.  He explained in detail by reference to the specific amounts alleged by the defendant to be compound interests why no compound interest was charged.  The defendant had not challenged the correctness of Mr Wong’s explanation.  We do not see the value of Mr Lam repeating the same allegations when they had been properly refuted and explained by the plaintiff. The defendant has not shown that compound interest was charged by the plaintiff.

(2)  Single loan or series of loans

4.28  In respect of the allegation of a series of loans, this Court in New Japan Securities International (HK) Ltd v Lim Yiong-lin [1987] HKLR 447 had already come to the view that, in a similar situation, the loans that were sued upon were new loans which did not provide either directly or indirectly for the payment of compound interest and they were recoverable.  In that case it was common ground that each of the relevant loans was made for period of three months and that simple interest was payable.  It was also common ground, however, that these loans were the successors of earlier loans on similar terms which, as and when the defendant had defaulted on his obligations, had successively been rolled over in the sense that the plaintiffs made fresh loans to him of sums sufficient to discharge his accrued liability for principal and interest. 

4.29  This Court’s decision referred to and adopted the English Court of Appeal decision of B.S. Lyle Ltd. v. Castle [1938] 158 LT Note 242 which in turn followed the earlier decision of B.S. Lyle Ltd. v. Chappell [1932] 1 KB 691 Greer, L.J. at page 243 of Castle stated :

‘ But in my judgment B.S. Lyle Ltd. v. Chappell [1932] 1 KB 691 decides conclusively that if the transaction means that the money is lent to the borrower and that the borrower with that money pays off the old loan, the court is no longer in a position to treat the transaction as a mere renewal, notwithstanding the observations of Scrutton, L.J. What has happened is that the old loans have been paid off and a new loan has been entered into, and the position is exactly the same as it would have been if the borrower had borrowed from someone else the money necessary to repay the old loan and obtained a new loan ―from the money lenders.’

4.30  Slesser L.J. also held :

‘ The present transaction being identical with that in B.S. Lyle Ltd. v. Chappell [1932] 1 KB 691 it is not open to the borrower to deny that the transaction was a new loan and a new transaction. In these circumstances, it is clear that, whether the sum which was released did or did not include compound interest, there was no compound interest leviable under the agreement of 16th September, other than interest which was covered by the proviso to section 7 of the Act of 1927.’

4.31  Mr Lam attempted to distinguish New Japan Securities International (HK) Ltd by saying that, unlike the present one, there was no allegation in that case of compound interest.  We have already pointed out that the defendant had not established the allegation of compound interest.  Further as shown in the judgment of Slesser LJ in Castle it does not matter if the earlier loans included compound interest or not so long as the new loan does not levy compound interest as in this case. 

4.32  As far as we are aware, Castle has been followed by other English cases and is not obsolete.  New Japan Securities International (HK) Ltd itself had been applied by the courts below although it does not seem to have been further considered by this Court until this case.  The case is binding on this Court and the defendant has not even begun to show that the decision is plainly wrong which is the threshold for our departure from this precedent.

4)  Ground 4

(1)  Conflicting position of the plaintiff

4.33  Mr Lam argued that when a wrongful party is in wrongful repudiation of a contract, the innocent party has two options, either to accept the wrongful repudiation, terminate the contract and claim for damages, or not to accept the wrongful repudiation and keep the contract on foot and ongoing for benefit of both parties.  The innocent party cannot keep the contract ongoing and claim damages from the wrongful party at the same time.  He submitted in his written submission that when the defendant was in default of repaying interest on the 2^nd to 7^th Loans, the plaintiff charged interest on the default interest.  In other words, the plaintiff purported to accept the defendant’s wrongful repudiation of the loan agreements, by charging interest on the default interest.  At the same time, however, the plaintiff kept the 2^nd to 7^th Loan Agreements ongoing and continued to receive the defendant’s further repayment of interest thereunder.  We will call this the conflicting position argument.  Although in the Notice of Appeal the conflicting position argument is by reference to the 3^rd to 7^th Loans and the 2^nd Loan is not included, the gist of the argument is the same. 

4.34  This conflicting position argument was modified when Mr Lam made his oral submission.  He referred to the table entitled ‘Breakdown of Accrued Interest up to 5 June 2018’ (‘the Accrued Interest Breakdown’) produced by the plaintiff and submitted that by the due date of the 4^th interest installment which the defendant had defaulted, the plaintiff had treated the principal of $8.4 million to be due and charged interest on it.  This is only permissible if the plaintiff had accepted the defendant’s repudiation but at the same time the plaintiff continued to receive further payment of interest from the defendant.

4.35  In short Mr Lam is saying that the plaintiff cannot approbate and reprobate in respect of the defendant’s default.  This argument is simply not borne out by the evidence in this case.  Under the 7^th Loan Agreement the principal is $8.4 million. The loan term is 24 months, by the end of which the defendant must repay the principal, interest and other charges (Clause 3).  The defendant is to repay the interest on the principal by 24 installments of $142,800 each on or before the 2^nd day of each month.  The 1^st installment is to be paid on 2 July 2017.  The principal of $8.4 million is only required to be repaid at the time of the payment of the 24^th interest installment.  The total sum to be repaid at that moment is $8,542,800 (i.e. $8.4 million plus $142,800). 

4.36  The plaintiff exhibited a breakdown of the defendant’s indebtedness of $9,831,941.05 under the 7^th Loan as of 6 August 2018 (i.e. date of Mr Wong’s 1^st affirmation) :

		HK$
(1)	Outstanding principal as at the date of originating summons (i.e. 5 June 2018)	8,400,000.00
(2)	Outstanding interest as at the date of originating summons (i.e. 5 June 2018)	1,040,457.90
(3)	Outstanding default interest as at the date of originating summons (i.e. 5 June 2018)	64,880.60
	Interest and default interest outstanding
	Add: on $8,400,000 at 20.40% p.a. from 6 June 2018 to 6 August 2018 (62 days)	291,077.26
	Add: on $1,025,200 at 20.40% p.a. from 6 June 2018 to 6 August 2018 (62 days)	35,525.29
		9,831,941.05

4.37  There is no dispute that the outstanding principal is unpaid.  The particulars of outstanding interest of $1,040,457.90 is shown in the Accrued Interest Breakdown.  A breakdown of the outstanding interest of $64,880.60 is also exhibited by the plaintiff. 

4.38  The defendant had defaulted on the payment of the interest installment since 2 July 2017.  He made the following payment as shown in a table produced by the plaintiff :

(1)  2 July 2017, a repayment of $74,000.00;

(2)  1 September 2017, a repayment of $30,000.00;

(3)  14 September 2017, a repayment of $40,000.00;

(4)  19 September 2017, a repayment of $292,014.00;

(5)  30 September 2017, a repayment of $80,000.00;

(6)  1 November 2017, a repayment of $30,000.00 and $50,000.00;

(7)  16 March 2018, a repayment of $40,000.00;

(8)  19 March 2018, a repayment of $20,000.00;

(9)  22 March 2018, a repayment of $38,000.00; and

(10)  27 March 2018, a repayment of $2,000.00.

4.39  Mr Wong explained that the plaintiff treated the first four repayments by the defendant as payments towards the first three installments and default interest on the late payment thereof.

4.40  The Accrued Interest Breakdown shows how the interest on the principal was calculated starting from the 4^th installment to the 13^th installment (the due date being 2 June 2018) and how the subsequent payment by the defendant from 30 September 2017 onwards was utilised.  This table does not show that default interest was charged by the plaintiff.  The appearance of ‘Outstanding Principal of $8.4 million’ in the column dealing with the 4^th installment interest from 2 September 2017 to 29 September 2017 does not even begin to suggest that the plaintiff had regarded the principal to be due and payable by then which gives rise to the rather strained conflicting position argument.  It merely shows that this principal sum is then carried forward from the 4^th installment up to the 13^th installment.  The plaintiff commenced the proceeding on 5 June 2018.  There is no evidence that the plaintiff had approbated and reprobated in respect of the defendant’s default.  Mr Lam’s argument by reference to interest payment is likewise invalid.

4.41  In our view, the Accrued Interest Breakdown actually illustrated that the plaintiff’s entitlement is based under the express terms of the 7^th Loan Agreement.

4.42  The fourth ground has no merits at all.

5)  Ground 5

(1)  Triable issue?

4.43  The fifth ground is that the Recorder was wrong to deal with the matter summarily and should instead direct the proceedings to continue as if had begun by writ.  The defendant’s case is that the plaintiff lent him the 1^st Loan in a sum of $3,000,000, which brought about the subsequent 2^nd to 6^th Loans and eventually the 7^th Loan.  The plaintiff colluded with Cheung Kam Min Mickey, a solicitor, in tricking the defendant to borrow the 1^st Loan in a sum of $3,000,000, which was actually paid to and received by Cheung.  The plaintiff did not provide reasons to the defendant for making available to him the 2^nd to 7^th Loans and he was not provided full details of all the facts thereof. 

4.44  The Record held :

‘ Such an assertion is nothing but a bare assertion, and completely lacks any evidential support.’

4.45  We agree and reject this argument.

IX.  Conclusion

5.  Accordingly the appeal is dismissed with costs to the plaintiff.  We will assess the plaintiff’s costs summarily upon the defendant lodging within seven days his written objection to the plaintiff’s statement of costs dated 9 October 2020.