SPEEDY FINANCE LTD v. ZHANG XIAOPING

HCMP 222/2019

[2021] HKCFI 3822

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 222 OF 2019

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DECISION

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1.  This is the hearing of the appeal by the defendant (“D”)  against Master Lai’s order of 2 September 2021 dismissing D’s application by Summons of 30 August 2021 (“30/8/21 Summons”)  for extension of time to make the interim payment in the sum of HK$19,203,050 (the “Interim Payment”)  which she was ordered to pay by Master Phoebe Man (“Master Man”)  on 27 July 2021 (the “Interim Payment Order”).

2.  By her Notice of Appeal of 15 September 2021, D seeks a hearing of only 30 minutes.  The matter is hence set down before this court as a 9:30 hearing.

3.  Mr Thomas Wong appeared for the plaintiff (“P”).  Ms Wendy Lau appeared for D.

Background

4.  P filed its Statement of Claim on 1 April 2021.  P’s claim in gist is as follows.  It is a licensed money lender.  By a loan agreement dated 9 October 2017 (the “1^st LA”), P lent D the sum of HK$22,000,000 (the “Loan”). The loan was secured by a mortgage (the “Mortgage”)  on a property at the Coronation (the “Property”).  D failed to repay the Loan under the 1^st LA.  The time for repayment of the same was subsequently extended by another loan agreement of 18 October 2018 (the “2^nd LA”).  D has failed to repay the Loan as extended by the 2^nd LA.  As at 19 February 2019, the total outstanding principal and interest was HK$22,977,336.56.  P hence is suing for repayment of the same, together with delivery of vacant possession of the Property.    

5.  D on 25 May 2021 filed her Defence and Counterclaim.  D avers that the 1^st LA was vitiated by misrepresentation, and the 2^nd LA by economic duress.  She avers alternatively that the Loan was extortionate under the Money Lenders Ordinance Cap 163.  She seeks a Declaration to the effect that the 1^st LA and 2^nd LA are void.  She seeks also, in terms of damages, the higher interest on the Loan under the 1^st LA in the sum of HK$2,640,000 (the “Alleged Misrepresentation Damages”)  which she says she was required to pay as a result of the alleged misrepresentation, and interest on the Loan under the 2^nd LA in the total sum of HK$156,950 which she says she paid as a result of the alleged economic duress (the “Alleged Economic Duress Damages”).

6.  On 16 June 2021, P took out a summons (the “16/6/21 Summons”)  before Master Man for final judgment against D, and an order that D’s Counterclaim be struck out;

7.  On 27 July 2021, Master Man:

(a)  granted P leave to amend the 16/6/21 Summons by the addition of §1A for interim payment against P in the sum of HK$19,203,050 (the “Amended Summons”);

(b)  ordered D to make the Interim Payment within 35 days (i.e. the Interim Payment Order);

(c)  gave directions for the further conduct of the Amended Summons; and

(d)  directed that there be another call-over hearing on 27 September 2021.

8.  Mr Wong explains, supported by the figures, that Master Man arrived at the amount of the Interim Payment by deducting from the amount of HK$22,000,000 which P was seeking under the 16/6/21 Summons the Alleged Misrepresentation Damages and Alleged Economic Duress Damages.

9.  No appeal has been lodged by D against the Interim Payment Order.

10.  The deadline for D to make the Interim Payment was 31 August 2021.

11.  By the 30/8/21 Summons, D sought an extension of 28 days (from the date of the order allowing extension)  for payment of the Interim Payment.

12.  The 30/8/21 Summons was supported by D’s 4^th affirmation of 31 August 2021.  She says therein that she has since 2018 been intent on selling the Property.  Estate agents have been engaged.  After the Interim Payment Order, she has given instructions to the estate agents to lower the asking price, and has been in constant contact with them.  With the pandemic easing, she believes it has become easier for her to sell the same.  She says that she is sincere in repaying the Loan, and seeks more time from the Court.    

13.  The application came before Master Lai on 2 September 2021, who dismissed the same.  That dismissal is the subject matter of the present appeal.

14.  During the call-over hearing on 27 September 2021, Master Man allowed P’s application by Summons of 10 September 2021 to further amend the Amended Summons so as to increase the amount of interim payment from HK$19,203,050 to HK$22,977,366.56 (the “Re-amended Summons”).  Master Man further ordered that the Re-amended Summons be adjourned for substantive argument before a Judge.  The Re-amended Summons has subsequently been fixed to be heard before this Court on 11 May 2022.

The applicable law

15.  I agree with Mr Wong that D is in effect seeking a stay of the Interim Payment Order.

16.  Mr Wong has cited to me Credit Lyonnais v SK Global Hong Kong Ltd [2003] 4 HKC 104.  As explained and observed by Ma CJHC (as the ex-Chief Justice then was):

(a)  In addition to those situations expressly permitted under the Rules of the High Court, the court retains an inherent jurisdiction, in suitable cases, to make orders staying execution so as to avoid injustice, prevent abuse, preserve the dignity of the court or to facilitate the administration of justice [§2];

(b)  That power is a discretionary one.  The appropriate test to apply in considering how that discretion is to apply is not “balance of convenience”. Whilst no exhaustive list can be drawn out, the jurisdiction will only be activated where an injustice would otherwise be caused, to prevent abuse, to preserve the dignity of the court or to facilitate the administration of justice [§3];

(c)  Where a party has obtained a judgment, the starting (and often, finishing)  point is that the judgment creditor should be able to take all legitimate measures to enforce that judgment [§4];

(d)  It is not up to the court to use its inherent jurisdiction to create a regime in which a judgment debtor or insolvent company is able to obtain a moratorium on its debts (or to put it more crudely, to give it some ‘breathing space’ to allow it to negotiate with creditors)  [§10].

17.  Also in Credit Lyonnais v SK Global, Rogers V-P at §21 observed to similar effects that in relation to judgments which have been regularly obtained and in respect of which there is no challenge as to their validity or appeal pending, it is difficult to imagine circumstances in which the court’s power to stay its enforcement should be exercised short of there being shown to be some abuse or very special circumstances.

18.  I apply those principles.

Discussion

19.  The starting point is that the Interim Payment Order was regularly obtained, and D has not sought to appeal against it.

20.  I refer to D’s 4^th affirmation.  She accepts that she is indebted to P, and has since 2018 been intent on selling the Property to settle the indebtedness.  She has not been able to do so.  She points to various alleged reasons, like the social unrest in Hong Kong and the pandemic.  She has however not been able to say when she would be able to do so.  She has provided no specifics.  She by the 30/8/21 Summons sought 28 days.  It is now more than 3 months from the hearing.  She still has not been able to sell the Property, and is still asking for time. 

21.  D has made her 6^th affirmation in support of the present appeal.  She adopts what she has said in her 4^th affirmation.  She claims that she does not mean to delay compliance of the Interim Payment Order.  She says that she has been making active arrangements with her estate agents to sell the Property, but that no appropriate buyer has been found.  To show her alleged sincerity, she produces documents showing that she has made arrangement to come to Hong Kong (she being normally in the Mainland).  Ms Lau this morning told me that D is now in Hong Kong, and is under quarantine.  D believes that her presence will facilitate the sale.  She craves the Court to bear in mind the pandemic and her old age.  She seeks 28 days, from the date of any order this court may make, or alternatively 28 days after resolution of the Re-amended Summons.

22.  Even if this Court is to consider D’s 6^th Affirmation despite Order 58 rule 1(5), still no specifics have been provided.  Nothing has been placed before the Court suggesting with any confidence when D would be able to sell the Property.  It is an open-ended request for time which D has been seeking.

23.  Importantly, D has not even explained whether she owns other assets, or whether she could only meet the Interim Payment Order by selling the Property.

24.  Ms Lau submits that P has “taken out 3 summons [sic] to amend its summons to complicate the Action.”  All the amendments relate to whether the application should be made pursuant to Order 14 or Order 88, bearing in mind the fact that the action has been ordered to be continued as if started by writ, and relate to the relief for interim payment and its amount.  The matters have not been complicated thereby.  Ms Lau’s submission has no merits.

25.  Ms Lau further submits that if the 1^st LA and 2^nd LA may be void or voidable, D “is entitled to loss and damages which can be offset by the sum claimed by [P]”.  This submission ignores the fact that the amount of the Interim Payment was arrived at by deducting from the amount of HK$22,000,000 which P was seeking under the 16/6/21 Summons the Alleged Misrepresentation Damages and Alleged Economic Duress Damages.  Any damages which D might be entitled to have been taken into account.

26.  In my view, no circumstance has been made out for any extension of time or stay, not to mention exceptional ones as explained in Credit Lyonnais v SK Global.

27.  I reject also her alternative request for a stay until 28 days after the resolution of the Re-amended Summons:

(a)  The discussion above in relation to her main request equally applies;

(b)  Specifically in relation to her alternative request, D only asserts that it would be fairer to her that way, because if she wins her case, the loss and damage she has suffered can be set off against the Loan (§6 of her 6^th affirmation).  But as explained above, the Alleged Misrepresentation Damages and Alleged Economic Loss Damages have been factored in when working out the amount of the Interim Payment;

(c)  More fundamentally, the 16/6/21 Summons was before Master Man when the Interim Payment Order was made.  The learned Master must have reached a view on the merits of D’s case before deciding whether an order for interim payment should be made there and then, or whether P’s application for summary judgment should be decided first.  By now seeking a stay until 28 days after the resolution of the Re-amended Summons, D is in effect seeking to by-pass the Interim Payment Order without appeal, and without any principled basis have been established.

Disposition

28.  I dismiss the appeal.

Order 29 rule 15

29.  Having delivered my reasons as set out above, I invited counsel’s view on Order 29 rule 15.  I read out in Court that rule, and part of the commentary in §29/15/2 of the Hong Kong Civil Procedure 2022.

30.  Both counsel told me that they have no objection to his Court hearing the Re-amended Summons.  Upon my express enquiry, Ms Lau specifically stated and confirmed D’s consent to this Court hearing the Re-amended Summons. 

31.  Given parties’ confirmation, I will leave the listing as it is.

32.  I further sought parties’ view as to whether this Decision should be uploaded for circulation.  Again, Ms Lau specifically confirmed her view that it should be.  Given her confirmation, and open justice being the norm, I will not direct otherwise.

Costs

33.  I accept Mr Wong’s submission that the appeal has no merits whatsoever, and justifies a costs order against D on an indemnity basis.  I so order.  Ms Lau asked for taxation.  In my view, the costs of an interlocutory appeal of the present nature should be summarily assessed, and I see no reason suggesting otherwise.

34.  I have considered the Statement of Costs submitted by Mr Wong.  The amount claimed is HK$68,655, which in my view is reasonable.

35.  I order that D shall bear the costs of the appeal on an indemnity basis, with certificate for counsel, which I summarily assess at HK$68,000.