CHAN PING CHE v. GAO GUNTER

HCA 2134/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2134 OF 2013

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J U D G M E N T

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1. The defendant is an experienced businessman who, without doubt and as clearly illustrated, uses his general standing in and outside the business world to impress and induce trust and confidence in those who deal commercially with him.

2. The business transactions highlighted in this action were substantial ones and he knew that the interest rates for the loans were likely to be, and were in fact, high.  Substantial loans for speculative commercial transactions were also likely to attract high rates of interest.  That factor, together with the length of the period(s) for the loan(s), would reflect the risks to the lender, especially if the value of the securities was itself subject to some risk.

3. Evidence in relation to the Neich Tower acquisition, and the loan funding it, indicated the defendant’s hopes for a quick turnover.  In gambling terms the defendant could be regarded as a “high roller”.

4. If someone had said to him that the plaintiff was not a licensed money‑lender it is more than likely in my judgment that he would not have cared.  It is apparent that he made no effort to ascertain this before or after the loans until his lawyers became involved. 

5. The Money Lenders Ordinance did not have businessmen of his experience, expectations and type of business in the forefront of its philosophy for protection.

6. He used post‑dated cheques as a means of maintaining the trust of others in himself.  Two cheques were dishonoured thus making it clear that this promises or representations were worthless.

7. The giving of worthless cheques in these circumstances is a seriously dishonest action.

8. It has never been suggested by him, or on his behalf, that the cheques were stopped deliberately for some reason connected with the defence presently put forward. The cheques were dishonoured because, quite simply, there was no money in the account.

9. All these factors went to my indication that I would have exercised my discretion to relieve the plaintiff of the consequences of breaches of the Money Lenders Ordinance.  There is no point in having a discretion available unless there are clear circumstances in which it can be properly exercised.  Dishonesty on the part of a defendant, in an arm’s length transaction, is an unarguably relevant factor to take into account in exercising that discretion, and in deciding whether there should be a condition attached to any leave to defend.  It weighs heavily against the defendant. 

10. Perhaps more importantly they go to the merits of this application for a stay of my judgment and for leave to appeal against it.  In my judgment there is no merit in either.

11. He had the benefit of substantial loans.  He floated bits of paper as some form of guarantee of his commercial probity and security for repayment.  They were worthless.  The court is saying in somewhat colloquial terms, “Show us the colour of your money.”

12. On the occasion of delivery of the judgment I made it clear that if the defendant, as an alternative to payment into court of cash to represent the net figure due on the loan (excluding any interest and credit having been given for any actual payments made since the dishonouring), was prepared to lodge truly valuable securities, bonds, etc, acceptable as such to the plaintiff, then that alternative would be acceptable.

13. That alternative position has not materialised.  It is not appropriate for the court to conduct an inquiry into the value of the securities, bonds offered and whether they are truly free from an incumbance or outside control.

14. In paragraph 41 of the defendant’s 2^nd affirmation he makes it clear that he has funds available but regards further funding for his Hi‑Tech Projects and/or his legal costs in other litigation as priorities.  His priorities are misplaced as they have been hitherto.  He does not even put a figure on those available funds.

15. He has had plenty of time to meet the condition of the leave to defend. I suspect delaying tactics.  However he has until noon (12 mid‑day) on Friday, 21 November to make the payment into court.

16. It follows from all the foregoing that I will not stay execution of my judgment of 17 October 2014.  Nor will I grant leave to appeal.  The defendant will have to seek leave from the Court of Appeal.

17. The application is therefore dismissed with costs.