CHAN LAI SHING v. AMERICAN EXPRESS INTERNATIONAL, INC

HCA 849/2023

[2024] HKCFI 2817

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 849 OF 2023

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BETWEEN

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DECISION

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1.   Introduction

1.1  These proceedings are concerned with 2 credit cards issued by the Defendant to the Plaintiff, respectively:

(1) On 20 January 2020, an American Express Cathay Pacific Elite Corporate Card (numbered xxxx-xxxxxx-41005) (“Corporate Card”);

(2) On 16 April 2020, an American Express Gold Business Card (numbered xxxx-xxxxxx-81006) (“Business Card”).

The Corporate Card and the Business Card are collectively referred to as “Cards”.

1.2  Since around 17 April and 8 June 2020, the Plaintiff failed to pay for the sums due respectively under the Corporate Card and the Business Card:

(1) The Corporate Card became overdue after 17 April 2020, and was eventually cancelled on 24 July 2020 for delinquency;

(2) The Business Card became overdue after 8 Jun 2020 and was eventually cancelled on 6 November 2020 for delinquency.

1.3  The Defendant subsequently commenced proceedings in the District Court to recover the outstanding sums due under the Cards and obtained judgments against the Plaintiff:

(1) On 18 September 2020, the Defendant commenced DCCJ 5018/2020 against the Plaintiff and Hong Shing Business Company Limited[1] (“Hong Shing”) to recover the outstanding sum due under the Corporate Card. Default judgment was obtained against the Plaintiff and Hong Shing on 8 January 2021 for the sum of HK$394,747.28 together with contractual interest from 29 August 2020 to the date of judgment and thereafter at judgement rate and fixed costs;

(2) On 24 December 2020, the Defendant commenced DCCJ 6919/2020 against the Plaintiff to recover the outstanding sum due under the Business Card. Default judgment was obtained against the Plaintiff on 9 June 2021 for the sum of HK$511,953.07 together with contractual interest from 14 November 2020 to the date of judgment and thereafter at judgment rate and fixed costs.

1.4  The Plaintiff commenced these proceedings on 5 June 2023 originally against “American Express HK”. The writ was subsequently amended to correct the name of the defendant. By these proceedings, the Plaintiff seeks (1) “to get back my lost money $5,000,000”, (2) “resume all bank credit cards” and (3) “no need to return remaining money”.

1.5  In so far as it may be deciphered, the complaints pleaded by the Plaintiff are (1) “no min pay each month”, (2) “decrease (2/3) large amount credit limit after 1^st month payment”.

1.6  By its summons dated 22 September 2023, the Defendant applied to strike out the Statement of Claim indorsed on the Writ of Summons filed on 5 June 2023 pursuant to RHC Order 18, rule 19(1)(a)-(d) and to dismiss the action (“Summons”).

1.7  On 5 February 2024, Master SP Yip ordered that the Statement of Claim be struck out pursuant to RHC Order 18, rules 19(1)(a), (b) and (d) and dismissed the action. The learned Master also ordered the Plaintiff to pay costs to the Defendant assessed at HK$400,000 (“Decision”).

1.8  This is my decision on the Plaintiff’s out-of-time appeal against the Decision by his Notice of Appeal dated 14 March 2024 (“NOA”)[2]. In considering whether to extend time to appeal, the court has to consider all relevant factors, particularly (1) the length of the delay, (2) the reason for the delay, (3) the merits of the proposed appeal, and (4) the degree of prejudice to the other party: Hong Kong Civil Procedure 2024 Note 58/1/9. In my view, and for the reasons set out below, the lack of explanation for the delay and the lack of merits of the appeal are dispositive of the application for extension of time.

1.9  At the hearing before me, the Plaintiff acted in person and the Defendant was represented by Mr Joshua Yeung of counsel.

1.10  In his skeleton submissions dated 17 July 2024, the Plaintiff contends that (1) the Defendant’s policies in respect of the Cards have various issues, (2) the Plaintiff is required to repay the sums due under the Cards and (3) the learned Master’s costs order was unreasonable. In so far as the NOA seeks to explain the delay on the purported basis that the Plaintiff intended to retain lawyers to represent him at the present appeal, the Plaintiff informed me at the hearing that his application for legal aid was refused and private lawyers are too expensive.

2.   Lack of explanation for the delay

2.1  The delay here is not insubstantial. It has been said that a delay of 14 days is “not insubstantial”: Tsang Wai Fan v Hui Siu Kwong, HCMP 409/2016, 12 April 2016 §23.

2.2  No affirmation evidence has been filed by the Plaintiff on the matters submitted by him at the hearing, namely (1) when an application for legal aid was made and when it was refused or (2) when an approach was made to private lawyers and when a decision was made that to retain private lawyers would be too expensive.

3.   Lack of merits of the appeal

3.1  The nub of the Plaintiff’s submission is that the Cards could not be used as a credit card, in that (1) the Cards did not make allowance for “minimum payment” per month and (2) as a result, any consequent limitation imposed on the Plaintiff’s use of the Cards as a result of his failure to make full payment of any outstanding sum fettered the Plaintiff’s right to have access to the credit extended under the Cards.

3.2  I have been referred to by Mr Yeung to the contractual terms governing the use of the Cards. It is plain that the Cards were not intended to be used as “credit cards” but were “charge cards” or “debit cards”. The contractual terms clearly stipulate:

(1) The Plaintiff had agreed to pay all charges shown on each monthly account statement on receipt and all charges were due immediately upon receipt of the monthly statements;

(2) The Defendant was entitled to charge for fees and other charges (including late payment charges);

(3) The Defendant was entitled to impose and change account limits at any time with or without notice to the Plaintiff;

(4) The Defendant may suspend or cancel the Cards issued to the Plaintiff if the Defendant believed that the Cards might not be paid in full and on time and/or for other related reasons.

3.3  I have examined the monthly statements and they show as follows.

3.4  In respect of the Corporate Card:

(1) The outstanding sum as at the statement dated 27 February 2020 was HK$231,112.11. The Plaintiff was to repay the outstanding sum by 19 March 2020;

(2) As shown in the statement dated 27 March 2020, the Plaintiff did settle the outstanding sum due under the previously month’s statement before 19 March 2020. He, however, incurred new charges during the period covered by the statement and the sum outstanding stood at HK$378,641.60. The Plaintiff was to pay the outstanding sum by 17 April 2020;

(3) As shown in the statement dated 28 April 2020, the Plaintiff did not make any repayment. The Defendant imposed late payment charge in the sum of HK$12,495.17, and the outstanding sum stood at HK$391,136.77. The Plaintiff was required to make immediate repayment;

(4) As shown in the statement dated 28 May 2020, the Plaintiff attempted to make repayment in the sum of HK$209,000 but HK$200,000 of the repayment was unsuccessful as the relevant cheques were dishonoured upon presentation. Taking into the late payment charge imposed, the outstanding sum stood at HK$394,747.28. The Plaintiff was asked to make immediate repayment;

(5) As shown in the statement dated 28 June 2020, the Plaintiff purportedly made a repayment in the sum of HK$400,000;

(6) As shown in the statement dated 28 July 2020, the repayment purportedly made the previous month was reversed as the relevant cheque was dishonoured upon presentation. On 27 July 2020, the Plaintiff sought to make another repayment in the sum of HK$400,000;

(7) As shown in the statement dated 28 August 2020, the repayment purportedly made in the previous month was reversed as the relevant cheque was again dishonoured upon presentation. The outstanding sum stood at HK$394,747,28, namely the principal sum obtained in the default judgment in DCCJ 5018/2020.

3.5  As regards the Business Card:

(1) As shown in the statement dated 14 May 2020, the outstanding sum stood at HK$75,858.29;

(2) As shown in the statement dated 14 June 2020, the Plaintiff incurred relatively modest new charges (HK$2,546,51) and only made a small repayment of HK$400. The outstanding sum stood at HK$77,956.65 and the Plaintiff was to repay the outstanding sum by 9 July 2020;

(3) As shown in the statement dated 14 July 2020, the Plaintiff attempted to deposit a substantial sum of HK$1,100,000 which was unsuccessful as the relevant cheques were dishonoured upon presentation. Taking into account the new transactions, the outstanding sum stood at HK$474,910.09;

(4) No repayment was made thereafter. As at 14 November 2020, the outstanding sum (taking into account the late payment charges imposed) stood at HK$511,953.07, namely the principal sum obtained in DCCJ 6919/2020.

3.6  It is therefore plain from the transactional history that the Plaintiff was acutely aware the Cards did not operate as credit cards but were, contractually, debit cards or charge cards. The foregoing is clearly shown by the repayment attempts made by the Plaintiff in relation to the Corporate Card and the (failed) attempt to deposit a substantial amount in respect of the Business Card.

3.7  The principles applicable to an application made pursuant to RHC Order 18, rule 19(1) are established. I adopt the some of those which are set out in Mr Yeung’s Skeleton Submissions:

(1) It is trite that a striking out should only be ordered in plain and obvious cases;

(2) An unintelligible or indecipherable statement of claim ought to be struck out. The opposing party “is entitled to an intelligible Statement of Claim”: Asset Choice Group Ltd v Onboard Technology Ltd, HCA 3215/2002, 7 May 2003 §24;

(3) The Court does not blindly accept evidence put forward by the plaintiff, but considers it from a commercial and common sense point of view against contemporaneous documents, inherent implausibility and other compelling evidence: Infinity Development (Holdings) Company Ltd v Bank of China, HCA 3202/2001, 19 July 2003 §§27-28;

(4) “A proceeding is frivolous when it is not capable of reasoned argument, without foundation or where it cannot possibly succeed. A proceeding is vexatious when it is oppressive and/ or lacks bona fides.”: Hong Kong Civil Procedure 2024, §18/19/7;

(5) It is an abuse of process to bring claims that are “absolutely groundless”, “entirely without substance” and “without solid foundation”: Hong Kong Civil Procedure 2024 at §18/19/9;

(6) It is equally an abuse of process to re-litigate a claim that has already been decided: Hong Kong Civil Procedure 2024 at §18/19/10. Importantly, this legal principle applies to default judgments. As held in Wismettac Asian Foods Inc v United Top Properties Ltd [2020] 3 HKLRD 732, §56 “Once the court grants default judgment … it would give rise to an issue estoppel and constitute res judicata binding on the defendant”.

3.8  In my view, the appeal against the Decision is completely devoid of merit, for the following reasons:

(1) It is entirely unclear what is the cause of action pleaded against the Defendant. The Plaintiff’s own perception that the Cards should operate as what he understands to be a credit card is plainly at odds with the contractual terms and his own contemporaneous conduct;

(2) Whatever the cause of action is, it is unclear how such purported cause of action can causatively lead a claim for damages quantified at HK$5,000,000, a claim that he should be relieved of his obligation to repay the Defendant and/or a mandatory injunction against the Defendant to “resume” the Cards;

(3) There is in any event no evidence that the Plaintiff has sought to set aside the default judgments obtained against him.

3.9  For the above reasons, the learned Master was entirely correct to strike out the Plaintiff’s claim and dismiss the action.

3.10  Although the Plaintiff’s Skeleton Submissions make a generic and unparticularized complaint against the costs order made by the learned Master, the Plaintiff has not attempted to substantiate that barren complaint.

4.   Conclusion

4.1  For the above reasons, there is no merit in the Plaintiff’s appeal. Coupled with the lack of proper explanation for the delay, I decline to exercise my discretion to extend time to appeal. I dismiss the NOA.

4.2  I also make a costs order nisi that the Plaintiff is to pay to the Defendant the costs of the NOA on an indemnity basis. The higher scale of costs is justified either because it has been contractually agreed or by reason of the utter lack of merits in the present application. The Defendant is to lodge and serve its Statement of Costs within 7 days hereof and the Plaintiff his Statement of Objections within 7 days thereafter, I will thereafter conduct summary assessment of the Defendant’s costs.