HONG KONG FINANCE CO LTD v. SO DAH WAI JOHN AND ANOTHER

HCA 614/2007

IN THE HIGH COURT OF THE

HONG KONG ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 614 OF 2007

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R U L I N G

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1. This is obviously a matter of great importance for the two Defendants which will, if matters stand as they are, result in the loss of possession of their property and its eventual sale, and so I have considered this application for a stay of execution of my judgment at some considerable length, for about an hour and a quarter. 

2. Mr So has taken a series of points, none of which were raised in the course of the trial.  They do not appear in the pleadings; they did not arise on the evidence.  But that does not matter, perhaps, because the points that he has taken, of course, are potentially very important ones because they go to the legality of the agreement, and when that sort of point is raised, the court will pay great attention to it to ensure that it does not lend assistance, by its judgment, to any illegality. 

3. Really, the issues that Mr So has raised fall into two.  The first relates to the rate of interest.  I think it is sufficient for me to say that none of his points which, at first blush, appeared to have some merit and were spoken to with great conviction, none of these points has survived the analysis to which it has been subjected by Mr Ho on behalf of the Plaintiff, and I really do not consider that there is any arguable issue here.

4. The other point which I have paid great attention to is the question of early repayment, because it is quite clear from the Ordinance that when someone is dealing with a money-lender, the law allows him to repay the outstanding loan, together with interest, no doubt, up to the date of repayment, at any time. 

5. This particular agreement does not appear to comply with the statute in the sense that the parties had agreed early repayment after a period of seven months which takes into account also some notice to be given to the Plaintiff.

6. I agree with Mr Ho that this would not in fact render the agreement illegal; it would merely make the early repayment provisions unenforceable.  But more importantly, on the facts of this case, it strikes me that this made absolutely no difference because the agreement, in fact, was tailor-made to suit Mr So’s and Madam Chow’s particular wishes by reducing the re-payment to a period which suited them, so no harm has been done. 

7. The fact is - and this is really the main point - that the particular early repayment provisions which appear in this agreement, even if they fall foul of the Ordinance, would only make those provisions unenforceable and it is not an illegality point.

8. So the position that we have arrived at, in my judgment, is that there is simply no arguable appeal.  Quite apart from the fact that the points have been taken far too late - but, as I say, that perhaps does not matter quite so much - on their merits, even if they were allowed to be run, they would, in my judgment, fail. 

9. So where there is no arguable appeal, it really does not matter that any appeal that might be mounted by the two Defendants would be rendered nugatory.  The fact of the matter is that they have no arguable appeal and to grant a stay on that basis would only work an injustice against the successful Plaintiff.

10. The application will be dismissed with costs.