YAN TAO v. WANG JIAN

HCA 81/2025

[2025] HKCFI 1597

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 81 OF 2025

____________

____________

______________

D E C I S I O N

______________

1.  This is the plaintiff’s application by summons filed on 28 February 2025 for judgment against the defendant in default of defence.

2.  The facts pleaded in the Statement of Claim filed on 14 January 2025 are as follows:

-  on 7 May 2024, the plaintiff and the defendant entered into a partly oral and partly written agreement under which the plaintiff lent the defendant USD1 million, to be paid as RMB7.45 million (“the loan sum”); there is no pleading that interest would be charged;

-  on the same day, the plaintiff caused the loan sum to be transferred to an account designated by the defendant;

-  on 19 May 2024, the defendant signed a note confirming that he owed the plaintiff USD 1 million and that he would repay the sum in full on 28 May 2024;

-  on 28 May 2024, the defendant did not repay the loan sum;

-  on 6 June 2024, the defendant repaid USD100,000 to the plaintiff;

-  on 7 June 2024, the defendant repaid another USD100,000 to the plaintiff, which left USD800,000;

-  on 12 June 2024, the plaintiff and the defendant entered into a “confirmatory loan agreement” (“CLA”) regarding the USD800,000 (“the Outstanding Loan Sum”);

-  the CLA provided that the defendant would repay to the plaintiff the Outstanding Loan Sum by 1 December 2024, with compound interest at 1% per month starting 1 June 2024, save that:

-  if the defendant repaid the Outstanding Loan Sum by 1 September 2024, then all interest on the Outstanding Loan Sum would be waived;

-  if the defendant failed to repay the Outstanding Loan Sum and interest accrued by 1 December 2024, then he would have to pay compound interest at 2% per month starting on 2 December 2024 on any outstanding parts of the Outstanding Loan Sum;

-  the defendant has failed to pay any part of the Outstanding Loan Sum.

The relief claimed are for:

(1)  the Outstanding Loan Sum and interest accrued pursuant to the CLA;

(2)  further or alternatively, the Outstanding Loan Sum as money had and received;

(3)  further or alternatively, a declaration that the defendant holds the Outstanding Loan Sum on trust for the plaintiff and an order for payment;

(4)  interest pursuant to s48 and s49 of the High Court Ordinance;

(5)  costs.

3.  On 22 January 2025, the defendant was personally served, as per the affidavit of the process server Diano Ngan Kar Leung.

4.  The defendant failed to file an acknowledgment of service, and no intention to defend has been filed. However, as the relief sought by the plaintiff includes a declaration, under Order 13 rule 6 RHC, he proceeded with the action as if the defendant had given notice of intention to defend.

5.  The defendant did not file a defence. Accordingly, the plaintiff has applied under Order 19 rule 7 for Judgment in default of defence.

6.  I noted that under the CLA, compound interest was chargeable. Section 22(1)(a) Money Lenders Ordinance Cap. 163 provides that any agreement made for the loan of money by a money lender shall be illegal if it provides for the payment of compound interest.

7.  However, as the statement of claim has been served and the defendant has not filed a defence, the court will assume that the facts pleaded in the statement of claim have been impliedly admitted and it is not necessary to consider evidence in support of the claim: Wu Ka v Wu Kuo Cheng [2003] 3 HKLRD 658, §6. The implied admission includes, in our case, the pleading at §1 of the statement of claim that the plaintiff is not a money lender for the purposes of the Money Lenders Ordinance. Accordingly, s.22(1)(a) MLO does not apply.

8.  Therefore I will give judgment for the plaintiff against the defendant in terms of para. (1) in the prayer for relief, with costs which I have summarily assessed at $94,000.