HANG SENG BANK LTD v. TSANG CHIU WA AND ANOTHER

DCCJ3365/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3365 OF 2008

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BETWEEN

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D E C I S I O N

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1.  This is my decision.

2.  In this action, the plaintiff bank sues the two defendants for their respective credit card debts.  The plaintiff applied for summary judgment under Order 14, which was granted by Registrar Lai. The defendants’ appeal against that decision was then heard by me.

3.  The defendants’ main ground for resisting summary judgment at the appeal was that the exemptions granted to banks and other authorised institutions within the meaning of the Banking Ordinance contravene the Bill of Rights and the Basic Law in that the exemptions amount to discrimination.  I should add, by "exemptions" I mean exemptions under  the Money Lenders Ordinance given to banks.

4.  On 22 July, I delivered my judgment and I gave judgment for the plaintiff. On 5 August, the defendants applied for leave to appeal to the Court of Appeal and they also applied for stay of execution of the judgment.

5.  In order to obtain leave to appeal to the Court of Appeal, an applicant for leave must demonstrate that the appeal has a reasonable prospect of success, or that there is some other reason in the interests of justice that the appeal should be heard.  It is not enough to show that an appeal is arguable or not fanciful.  The ground of appeal must carry with it some degree of conviction.

6.  The defendants’ ground of appeal is that the difference in treatment between banks and other money lenders does not pursue a legitimate aim.  For example, the defendants say that the need to maintain the Hong Kong dollar peg to the US dollar has nothing to do with the rate of interest charged by banks on credit cards.

7.  However, that was only one of the reasons I found in my earlier judgment for the exemptions in the Money Lenders Ordinance.

8.  I also found that the legislature has found it necessary to interfere with the freedom of contract in the area of money lending because of the social problem of loan sharking, which was the main target of the legislation.  Otherwise, money lending was to be regarded as an essential business and consumer activity in any vital economy.  Such legislation would, however, catch many money lending activities not forming part of the legitimate target.

9.  The solution adopted was to grant exemptions to classes of money lenders or specific money lending activities.  Simply put, there is a genuine need for difference in treatment in terms of, for example, interest rate ceilings - the maximum amount of interest that can be charged - and in terms of the charging of compound interest and other charges, so that activities which are not the target of the legislation should not be affected. Hence the exemptions.

10.  I have considered the defendants’ arguments and I do not consider that their grounds are arguable or have a reasonable prospect of success.

11.  The question of discrimination should not be confused with the other question, which is whether it is desirable to introduce additional protection for consumers in relation to credit card loans.

12.  The defendants have not shown any reason why the case should go to the Court of Appeal in the interests of justice either.

13.  I therefore refuse leave to appeal.

14.  That being the case and no special circumstances having been shown as to why execution of the judgment should be stayed, I also refuse the application for stay of execution.

15.  So I dismiss the defendants' summons filed on 5 August 2010.

(Discussion re costs)

16.  咁我個summary assessment就assess你哋今日嘅costs就係17,600鈫。咁變咗就我個costs order，即係訟費嗰個命令，就係話今日嘅訟費，即係呢一個申請嘅訟費，包括今日嘅聆訊，就由被告人支付喇，咁我即係用簡易嘅方法去assess過，個數目就係$17,600。