北京新颐华卓投资有限公司 v. LUK CHUNG PO

HCA 2363/2019

[2022] HKCFI 1545

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2363 OF 2019

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JUDGMENT

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1.  This is the plaintiff’s claim for repayment by the defendant of a loan pursuant to the parties’ loan repayment agreement entered into after the loan has fallen due and outstanding.

Background

2.  徐紹宸 (“Xu”), 高志明 (“Ko”) and the defendant became friends in the 1980s.  At one point, the three of them worked for the same company.  In about mid-1990, Xu and Ko left the company, and started their own businesses respectively.  So did the defendant afterwards.

3.  The plaintiff is a Mainland company in Beijing, which was at all material times under the control of Xu.  Ko subsequently joined the plaintiff, and became general manager between June 2014 and June 2017.  Ko has since June 2017 remained as a consultant of the plaintiff.

4.  In about June 2014, the defendant planned to expand his business.  Through Ko, the defendant sought a loan from Xu.  Xu agreed.  Eventually an advance of RMB4,000,000 was arranged to come from a subsidiary of the plaintiff to the defendant and deposited with his Mainland company 珠海信天博联信息技术有限公司 (Zhuhai Xintian Bolian Information Technology Company Limited) (“ZXB”) on 27 June 2014. As the go-between, Ko acted as a guarantor of the loan at the request of Xu.

5.  On or about 1 July 2014, Ko, on his own behalf and ZXB, signed a printed note acknowledging the terms of the loan advanced as aforesaid (“the Acknowledgement”[1]).  The loan was for a term of 1 year with interest of 15% (in Hong Kong dollars) per annum, and repayable on 28 June 2015. The deadline was subsequently extended to 28 December 2015 and last to 28 June 2016, all of which were acknowledged in writing and signed by Ko.

6.  ZXB and the defendant were unable to meet the repayment deadline.

7.  At one point in 2017, the parties came to a repayment arrangement[2] whereby the defendant would cause the purchase of a Mercedes Benz Maybach (“the MB”) with a Hong Kong-Mainland cross border vehicle licence for use by Xu in Hong Kong, and the leasing instalment payments for the price of the MB would be applied in offsetting the outstanding loan together with the transfer of the licence to the plaintiff or Xu in further set-off against the outstanding loan.  However, Xu passed away by the end of 2017.  The Hong Kong office of the plaintiff also closed subsequently.  Only about 6 leasing instalments for the MB had been paid by then.

8.  As the settlement of the outstanding loan was not over and done with, in January 2018, the parties entered into a written loan repayment agreement (“the Repayment Agreement”) at the office of the plaintiff in Beijing.  It was signed by the representative of the plaintiff as the lender, the defendant for himself and on behalf of ZXB as the borrower as well as Ko as the guarantor.  The Repayment Agreement contains the following terms:

“ 还款协议书

甲方：北京新颐华卓投资有限公司

乙方：珠海信天博联信息技术有限公司

丙方：陆忠甫 (证件号码：XXXXXX)

丁方：高志明 (证件号码：XXXXXX)

鉴于甲方曾于2014年6月27日借款人民币4,000,000 (大写：肆佰万) 元给乙方和丙方使用，并由丁方提供无限连带责任担保，但至今尚有 4,630,000 (大写：肆佰陆拾叁万) 元港元未归还甲方一事，现经甲、乙、丙、丁四方充分协商，达成如下一致意见。

一. (1) 上述463 万港元中的180 万元，乙方和丙方承诺在36个月内还清，即每月至少偿还甲方港元5万元，从本协议签订后的当日起算；(2) 剩余 283 万元分三次还清。具体如下：2019年1月20日之前偿还120 万元；2020年1月20日之前偿还80万元；2021年1月20日之前偿还83 万元。

二. 如乙方和丙方完全按照前述第一条中约定的时间和数额还款，则甲方承诺不再收取利息；如乙方和丙方违反上述约定的还款要求，甲方有权按应还而未还款金额每天千分之二的标准收取利息；如乙方和丙方连续三个月或者累计五个月均未按第一条的约定还款，甲方有权要求乙方和丙方一次性归还剩余所有欠款及利息，并收取全部未还款金额30%的违约金。

三. 乙方和丙方应在每月的25日之前将应本协议第一条 (1)约定的还款金额汇如下列账户，视为其履行完当月的还款义务；

开户名：ZHOU YU

开户银行：香港汇丰银行

账号：XXX XXXXXX XXX

四. 甲方收取上述还款不需要出具发票。

五. 丁方对乙方和丙方的还款义务继续承担连带责任。

六. 本协议一式四份，甲乙丙丁四方各执一份。

七. 本协议自甲乙丙丁各方签字或盖章之日生效。同时，各方之前所签订的协议，如与本协议规定内容相抵触，以本协议规定为准。

甲方：北京新颐华卓投资有限公司 [signed with chop]

乙方：珠海信天博联信息技术有限公司 [signed with chop]

丙方：陆忠甫 [signed]

丁方；高志明 [signed]

                                      年      月      日                       ”

9.  Essentially, the preamble of the Repayment Agreement recited the RMB4,000,000 loan by the plaintiff to ZXB and the defendant on 27 June 2014.  The outstanding debt in Hong Kong dollars was then HK$4,630,000, which would be repaid by ZXB and the defendant in the following manner (clauses 1 and 2):

(1)  HK$1,800,000 of the debt would be repayable by way of 36 monthly instalments of HK$50,000 each;

(2)  HK$2,830,000 would be repayable by 3 yearly instalments, namely: HK$1,200,000 before 20 January 2019, HK$800,000 before 20 January 2020 and HK$830,000 before 20 January 2021;

(3)  In case of default in repaying the monthly instalments for 3 consecutive months or for 5 separate months, the plaintiff would be entitled to demand for immediate repayment of the entire outstanding balance with interest.

10.  The agreement also provided that the plaintiff would be entitled to charge interest on overdue instalment and penalty under certain circumstances (clause 2), though the plaintiff does not claim any contractual interest on any overdue amount or contractual penalty in the present action.

11.  It was also provided that the agreement was the entire agreement between the parties that superseded any prior agreement (clause 7).

12.  Since the Repayment Agreement, the defendant has caused the following repayments to the plaintiff in the total sum of HK$300,000:

(1)  HK$50,000 on or about 9 March 2018;

(2)  HK$50,000 on or about 17 May 2018;

(3)  HK$50,000 on or about 15 June 2018;

(4)  HK$50,000 (paid in RMB42,410) on or about 6 July 2018;

(5)  HK$50,000 (paid in RMB42,410) on or about 29 August 2018;

(6)  HK$50,000 on or about 28 November 2018.

13.  There was no further monthly repayment.  Nor was any yearly repayment made.

14.  Subject to the dispute as to the circumstances surrounding them and their legal implication, which will be discussed below, the above events, I find, are not disputed.

15.  In December 2019, the plaintiff commenced the present action for the entire outstanding balance of the debt in the sum of HK$4,330,000 (ie HK$4,630,000 – 300,000).

The parties’ respective cases

16.  The plaintiff bases its claim on the defendant’s breach of the Repayment Agreement, which entitles it to claim for the immediate repayment of the entire outstanding balance of the debt.

17.  By his pleading, the defendant contends that the loan was advanced by Xu personally to him through Ko as the go-between.  He has repaid part of the loan, and further transferred the MB and the cross border vehicle licence to Xu pursuant to the 2017 arrangement mentioned above in partial settlement of the debt.  After Xu became seriously ill in the latter half of 2017, the defendant could make no further financial arrangement directly with him.

18.  As to the Repayment Agreement, the defendant alleges that it came about as a result of first putting the plaintiff’s house in order (in terms of internal account) and second easing the pressure from the plaintiff on Ko as the guarantor of the debt.  It was however the mutual understanding of the parties that the Repayment Agreement was not intended to have legal effect. The agreement is also said to be unenforceable under the PRC law for total failure of consideration and/or lack of genuine direct creditor-debtor relationship.

The issues

19.  According to the pleadings, the major issues in dispute may be summarized as follows:

(1)  Whether the Repayment Agreement is unenforceable or without legal effect as alleged by the defendant.

(2)  If the Repayment Agreement is legally enforceable, whether the defendant was in breach.

(3)  Following from (2) above, whether the plaintiff is entitled to claim for the entire outstanding debt from the defendant and, if yes, in what amount.

Witnesses

20.  On behalf of the plaintiff, the following witnesses gave evidence:

(1)  周宇 (“Zhou”), manager of the finance department of the plaintiff, who was present when the Repayment Agreement was signed;

(2)  朱小功 (“Zhu”), manager of the audit department of the plaintiff, who was also present when the Repayment Agreement was signed; and

(3)  Ko.

21.  With leave of this court, all the plaintiff’s witnesses testified at the trial from Beijing via video-conferencing facilities of this court.

22.  Besides himself, the defendant called Li Kin Keung (“Li”) as a witness.  Li was a former colleague and subordinate of the defendant until 2010.  He joined the plaintiff’s group in 2014 as the principal consultant and chief representative of the group in Hong Kong.  He was said to be involved in the 2017 arrangement mentioned above.  He is now retired.

Whether the Repayment Agreement is enforceable

23.  As pleaded, and repeated as the main theme of the defence in the trial, the defendant argues that the loan in question was one by Xu personally to him.  In other words, only Xu may recover the debt from him.  In line with such theme, the defendant repeated during the trial that Xu would have been willing to allow him time to settle the debt instead of resorting to legal action.  That said, Xu passed away by the end of 2017, and the outstanding debt, the defendant admits, has remained unpaid since late 2018 and as of today.

24.  What the defendant contends is contradicted by the documents, including the Repayment Agreement signed by him.  He certainly sees that.  Hence his contention that the Repayment Agreement, albeit entered into, was not meant to have legal effect, and that the same is unenforceable under the PRC law in any event.

25.  It is the evidence of the plaintiff’s witnesses that whilst Xu was in control of the plaintiff and agreed through Ko to extend the loan to the defendant for his company’s needs back in 2014, the loan was sourced, and thus a loan, by the plaintiff instead of loan by Xu personally. That is the understanding of the plaintiff’s witnesses.

26.  Further, according to Ko, it was through him that the defendant conveyed his request for the loan, and also through him that Xu conveyed his agreement to extend the loan. It was Xu who instructed that the money would come from the plaintiff.  When the loan was remitted, the defendant was not in Beijing.  Therefore, Xu instructed Ko to provide a record of the loan by the plaintiff and its terms.  Hence the Acknowledgement, which came to be signed by Ko as the guarantor.  It was then stated in the Acknowledgement that the lender was the plaintiff and the borrower was ZXB.  Whenever the defendant subsequently sought extension of time for repayment, to which Xu agreed, Ko brought the record in the Acknowledgement up to date by writing down the new repayment deadline and signing it.

27.  I prefer the above evidence of the plaintiff’s witnesses.  I reject the defendant’s evidence in respect of his understanding that Xu personally was the lender, and that Xu, being in control of the plaintiff, could and would just withdraw such substantial sum out of the plaintiff as his own money for the loan to the defendant.  I also reject the defendant’s persistent claim that not only was Xu the only one in a position to seek recovery from him, but Xu also would never have resorted to legal action even when the defendant was in default of repayment.

28.  He who alleges must substantiate the allegation.  The defendant never particularised or sought leave to adduce evidence on the PRC law that allegedly renders the Repayment Agreement unenforceable.  Nor was there challenge regarding the jurisdiction of the Hong Kong court over the present dispute.  Where the agreement was silent on the governing law, the Hong Kong court that has seized jurisdiction over the present dispute would apply Hong Kong law, unless the circumstances before the court objectively point otherwise.

29.  Indeed, the plaintiff is a Mainland corporation and the loan was extended in RMB to the defendant for the purpose of his Mainland company.  The Repayment Agreement was also signed at the office of the plaintiff in Beijing.  However, the expected performance of the Repayment Agreement by the defendant, a Hong Kong resident, only points to Hong Kong.  The outstanding balance of the debt was expressed in Hong Kong currency with a view to repayment by the defendant via the Hong Kong bank account of Zhou, which could only be received for and on behalf of the plaintiff.

30.  There is also no evidence from the defendant in support of his contention that the Repayment Agreement fails for total failure of consideration.  As far as Hong Kong law is concerned, there is hardly failure of consideration.  Whilst the agreement covered an antecedent debt, the plaintiff provided consideration for the defendant’s agreement in the form of extension of further time and indulgence as manifested by the very terms of the repayment.  Notwithstanding the defendant’s pre-existing default, according to Zhou and Ko, the plaintiff did withhold legal action.

31.  The parties reaching an express agreement of a commercial character are presumed to intend it to have legal effect unless the contrary is shown.  The onus is on the party alleging the contrary to prove, which is a heavy one.  In deciding whether the onus has been discharged, the court will take into account the importance of the agreement to the parties, and the fact that it has been acted upon.  See New World Development Co Ltd v Sun Hung Kai Securities (2006) 9 HKCFAR 403 at §14.

32.  The defendant is an experienced businessman.  At the trial, he referred to the scale of his business and his personal wealth at one point, though that was no longer the scene in recent years for various reasons.  No suggestion can be, and none actually is, made that the defendant with his business background was incapable of understanding the significance of entering to the Repayment Agreement as one of a commercial character.  His assertions that the agreement came about as some form of “putting the house of the plaintiff in order” or “easing the pressure from the plaintiff to Ko” are rejected, in view of the evidence of Ko and the other witnesses of the plaintiff in this respect, which this court prefers.  Whilst he allegedly sounded out his request to Ko not to enforce the agreement in court, he admitted that Ko did not actually respond to that one way or the other.  Ko himself had no recollection of that.  In any event, insofar as the Repayment Agreement is concerned, Ko did not represent the plaintiff but himself as the guarantor.

33.  The fact as evidenced by the documents also contradicts what the defendant alleges.

34.  First, the plaintiff’s witnesses produced what was said to be the original draft of the Repayment Agreement.  Comparing that with the version eventually signed by the parties, one would discover that the terms of the repayment under the original draft have been amended to become relatively more favourable to the defendant both in terms of the instalment amounts and the repayment timetable.  That was most probably the result of discussion between the parties before the final version was signed.

35.  Second, in his WeChat correspondence with Ko, when the latter chased him for repayment in early 2018, the defendant indicated that he would respect the spirit of contract, which could only be referring to the Repayment Agreement.

36.  Third, the defendant did make repayments by instalments, as mentioned above, in Hong Kong and in a manner which could only be referable to the terms of the Repayment Agreement, albeit defaulting eventually.  So has the plaintiff acted on the Repayment Agreement, and hence no legal action until after the defendant’s default in performing the same became clear and certain by the end of November 2018.

37.  In the circumstances, the contention that there was no genuine creditor-debtor relationship between the parties or that the Repayment Agreement is not meant to have legal effect is rejected.

38.  When it came to his opening submission, the defendant raised for the first time the contention of promissory estoppel.  He sought to argue that the Repayment Agreement was entered into after the sudden death of Xu and on the mutual understanding that he did not owe the plaintiff any money.  The agreement, as he does allege, came about only to solve the internal accounting problem of the plaintiff and to ease the pressure of Ko regarding the loan.

39.  Promissory estoppel is never a pleaded contention.  The defendant however argues that this somehow becomes the primary issue for trial, and the primary facts giving rise to promissory estoppel have been fully pleaded.  That cannot be right.  That the defendant may be contented with what he has pleaded as the basis for raising promissory estoppel does not mean that the contention is properly pleaded.  It is trite that to constitute promissory estoppel, the elements of the promisee’s reliance and, so induced, his alteration of position as a result must be properly pleaded in addition to the alleged promise of the promisor not to enforce his rights.  That was not done in the present case.  Had they been pleaded, the plaintiff would have had to plead the necessary facts and to adduce evidence in response.  No such opportunity was available to the plaintiff, when the new contention cannot readily be read out of the matters pleaded by the defendant.  See Mui So Bing v Wan Chi Shing & Ors, CACV 177/2019 (4 December 2019) at §§21-23.3; Sinoearn International Ltd v Hyundai-CCECC Joint Venture (2013) 16 HKCFAR 632 at §§27-34.

40.  The defendant relies on Luo Xing Juan Angela v The estate of Hui Shui See, Willy, Deceased & Ors (2009) 12 HKCFAR 1 at §§7 and 55 in support of his argument that his new contention should be entertained.  What happened in that case was that the Court of Final Appeal raised in the appeal before it the issue of promissory estoppel on the basis of the factual findings of the trial judge, and sought assistance from the parties on the issue.  It could not be understood as an authority that excuses a party from his burden of properly raising issues to the other party’s attention by way of the pleading as reiterated in Mui So Bing and Sinoearn (above).

41.  In any event, on the basis of the findings in line with what the plaintiff’s witnesses said, there is simply no established factual basis for the defendant to found the contention of promissory estoppel. This further distinguishes the present case from Luo Xing Juan Angela.

42.  All matters considered, the Repayment Agreement, I find, is binding and enforceable by the plaintiff against the defendant.

Whether the defendant was in breach

43.  The plaintiff’s case on breach is straight forward whereas the defendant’s case calls for some consideration.

44.  First, it is the defendant who raised by way of pleading the issue of the 2017 arrangement in settlement of the outstanding debt owed by him.  The existence of such arrangement is not in dispute but the exact terms of it are.  In two sub-paragraphs, the defendant pleaded that he had repaid certain part of the RMB4,000,000 loan pursuant to the 2017 arrangement both directly and by way of transfer of the MB with a cross border vehicle licence to Xu or his company.  No further particulars, not even the amount said to have been so repaid, were provided.  He only further pleaded that no further arrangement could be made after Xu had fallen seriously ill in the second half of the year.

45.  When it came to his witness statement, the defendant said that he caused his company in Hong Kong, Armarda Technology (Hong Kong) Limited (“Armarda”), to purchase the MB with the cross border vehicle licence for Xu’s use in Hong Kong pursuant to the 2017 arrangement.  However, the plaintiff subsequently closed down its Hong Kong office and sold the car without prior consultation with him.  He complains that it was unilateral breach of the arrangement on the part of the plaintiff.  Those happened when the defendant was yet to be aware of the passing of Xu.

46.  The defendant called Li to testify in this respect.  According to his statement, the arrangement was for the defendant to purchase the MB subject to leasing together with the cross border vehicle licence, and to transfer the same to the plaintiff’s Hong Kong company.  Upon that, the loan would be considered as settled.  The defendant did acquire the MB at HK$3,600,000 (subject to monthly leasing repayment of HK$56,834 for 54 months) and the cross border vehicle licence.  The defendant had also started to transfer the cross border vehicle licence to the plaintiff’s Hong Kong company.  However, Xu passed away after 6 leasing instalments of the MB had been repaid.  The plaintiff’s group also resolved to close the Hong Kong office, lay off the staff and dispose of its assets here.  The MB was eventually sold.

47.  On the basis of what the defendant and Li stated, the outstanding debt owed by the defendant was supposed to be settled and the liability of the defendant discharged by way of the 2017 arrangement, which entailed the transfer of the MB and the cross border vehicle licence, both paid for by the defendant or Armarda, to the plaintiff’s Hong Kong company.  That did not happen.  Indeed, that could not have happened until after the defendant has fully paid for the leasing of the vehicle so that it became fully vested in Armarda as the registered owner.  It was impossible for the plaintiff’s Hong Kong company to dispose of the vehicle or the cross border vehicle licence as if they were its properties.  It follows that the plaintiff’s Hong Kong company could not have been in a position to dispose of the MB without the knowledge of the defendant, whose company was its registered owner.

48.  Had there somehow been transfer of the vehicle and the licence to the plaintiff’s company, the defendant, whose company was the registered owner of the MB, would have been in a position to produce documentary evidence in support.  There is none.  Nor is there documentary evidence in respect of the alleged disposition of the vehicle and the licence by the plaintiff’s Hong Kong company.  Quite on the contrary, amongst the documentary evidence produced is a draft agreement for the transfer of the MB and the cross border vehicle licence, which was undated and unsigned.  However, the registered owner of the MB and the licence was rightly stated to be Armarda and the intended purchaser was a third party.  What followed from that draft agreement, if at all, is unclear.  But the document was disclosed by the defendant.

49.  In their oral evidence, Li referred to the 使用權 or the right to use, as opposed to ownership, of the MB and the cross border vehicle licence.  However, insofar as it is that such right to use was what the plaintiff contracted for in settlement of the debt owed by the defendant, I reject the suggestion.  This is contrary to what were reasonably understood to be the terms of the 2017 arrangement according to the evidence of the witnesses as per their statements.  The settlement of the debt was clearly premised on the defendant’s payment for the vehicle and the licence for the plaintiff and the transfer of property in them instead of the mere right to use them.  It should be noted that the defendant and Li never actually mentioned in their evidence the term or the duration of such alleged right to use the vehicle and the licence.

50.  Insofar as settlement by way of the 2017 arrangement is concerned, there was no accord and satisfaction unless and until the title of the vehicle and the cross border vehicle licence, fully paid for by the defendant, was transferred at the instruction of the plaintiff as agreed.  That never happened.  That was the understanding of Ko, whose evidence in this respect is preferred by this court.  Further, sale of the MB in whatever manner would not have meant that any part of the debt would be settled, as the sales proceeds presumably would have had to be applied towards what was owed to the leasing company.  There is also no evidence that the plaintiff has pocketed anything out of such alleged sale, if this ever happened.  Simply the debt was never settled and the defendant’s liability to repay the debt was never discharged as a result of the 2017 arrangement.  Hence the Repayment Agreement entered into by the parties subsequently.

51.  Second, though not pleaded at all in his defence in any way, the defendant referred to the shares pledge in connection with the extension of the loan back in 2014.  In his witness statement, the defendant alleged that he had pledged HK$5,000,000 worth of shares of a listed company to Ko as security for the loan.  Such reference was but a one liner without particulars.

52.  According to Ko, he was the contact person for the plaintiff’s loan to the defendant.  This explains why he and the defendant first came to sign, as the lender and the borrower respectively, a loan and shares pledge agreement printed in Chinese dated 18 June 2014 for the loan.  That agreement provided for the loan of HK$5,000,000 for a term of 1 years with interest at 15% per annum repayable by 23 June 2015.  The agreement also provided that defendant would tender, within 1 month of his receipt of the loan, 125,000,000 shares of his another company the shares of which were then listed in the Singapore Stock Exchange as security for the loan.  Subject to consultation with the defendant, the shares might be sold in the stock market for cash in partial settlement of the defendant’s debt.  Balance of the shares would be returned to the defendant upon the defendant’s full settlement of his debt.  In return, Ko would have to issue a cheque for HK$5,750,000 (ie the loan principal sum plus 1.5% interest) to the defendant as security.

53.  However, Ko explained that since the defendant subsequently made clear that he needed the loan to be utilized by his company in the Mainland, Xu therefore agreed to cause his Mainland company to extend the loan by direct remittance of RMB to the defendant’s company in the Mainland.  Hence the loan amount of RMB4,000,000 instead of HK$5,000,000.  As such, the loan and share pledge agreement dated 18 June 2014 was overtaken by events and never implemented.  Indeed, even the defendant himself saw no need to mention this episode at all in his defence.

54.  There is not a single document from the defendant tending to suggest that the 18 June 2014 agreement has been implemented with the effect of settling the debt.  Ko’s explanation aligns with the sequence of events evidenced by the other documentary evidence.  The loan was remitted in RMB on or about 27 June 2014.  Xu and Ko then saw the need to come up with the Acknowledgement dated 1 July 2014 as evidence of the loan and its terms.  That would not have been necessary, if the signed agreement dated 18 June 2014 had remained the contractual document between the parties. I prefer Ko’s evidence in this respect.

55.  Even assuming for argument’s sake that the parties have embarked on implementing the 18 June 2014 agreement, there is no pleading or evidence that any such shares had been sold for cash and applied in settlement of any part of the defendant’s debt.  No such contention was made in the defendant’s pleading.  In view of the state of the assertions made by the defendant and the evidence of Ko in this respect in court, there is simply no fair way this court could properly consider and come to a safe finding in respect of this episode.  Having the burden to substantiate that as his assertion in defence of liability or quantum, the defendant, I find, fails to do that on balance in the circumstances.

56.  Third, the defendant eventually resorted to argue at the trial that he had no intention of denying his liability to repay his debt, but he should be entitled to do so as and when he manages to come up with the necessary funds.  For a businessman with the defendant’s background and experience to so argue defies reasonable understanding, if not common sense.

57.  All evidence considered, the defendant, I find, was in breach of the Repayment Agreement, which entitles the plaintiff to immediate repayment by the defendant of the entire outstanding debt.

The amount

58.  As at the date of the Repayment Agreement in 2018, the total outstanding debt was said to be HK$4,630,000.  The plaintiff apparently took the amount of the loan RMB4,000,000 as equivalent to HK$5,000,000 at the time, which was the loan amount agreed in Hong Kong dollars (see the loan and shares pledge agreement dated 18 June 2014 mentioned above).  Zhou explained that credit was given to the total sum of HK$370,000 that the defendant has repaid by way of his leasing payments for the MB for the use of Xu in Hong Kong pursuant to the 2017 arrangement mentioned above.  Hence the balance of HK$4,630,000.  The defendant signified his acceptance of that by signing the Repayment Agreement.

59.  Giving credit to the further sum of HK$300,000 repaid by the defendant since the Repayment Agreement, the outstanding balance of the debt became HK$4,330,000.  In court, the defendant did not dispute the amount of his such repayments.

60.  Hence the amount claimed, which I find is proved.

Conclusion and order

61.  All evidence considered, including those discussed above, I enter judgment in favour of the plaintiff against the defendant in the sum of HK$4,330,000.

62.  There does not seem to have been any letter before action from the plaintiff.  Taking the commencement of the present action as effectively the demand for immediate repayment of the entire outstanding debt, I order that interest on the above sum shall run at 1% above HSBC best lending rate (5%) from the date of writ until today, and interest thereafter at the judgment rate until full payment.

63.  With the above outcome, I make a nisi order that the defendant shall pay the plaintiff’s costs of this action, including any costs reserved, to be taxed if not agreed, with certificate for counsel.  In the absence of application in 14 days, this costs order shall become absolute without further order of the court.