STANDARD CHARTERED BANK (HONG KONG) LTD v. YAU CHI WING

DCCJ4233/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4233 OF 2013

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JUDGMENT

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Introduction

1. I have before me an appeal by the defendant (“Mr Yau”) against the order of Master WY Ho dated 28 May 2014 whereby she entered judgment under Order 14 in favour of the plaintiff, Standard Chartered Bank (Hong Kong) Limited (“SCB”), in the sum of HK$251,667.58.

2. This case arises from a common telemarketing promotion practice used by banks offering to convert the available credit limit on credit cards of existing cardholders into a cash advance or loan, repayable by instalments.  The application is usually made orally over the telephone.  By agreeing to participate in the promotion, the cardholder is deemed to have accepted all its terms and conditions, as well as the relevant credit card cardholder agreement. 

3. In the present case, Mr Yau has since August 2009 been issued with a credit card known as Titanium MasterCard No 5400-3415-0400-3594 (“Titanium MasterCard”) by SCB.  The Titanium MasterCard has been regularly used by Mr Yau since then.  It was at all material times governed by the terms and conditions of SCB’s Titanium Credit Card Cardholder Agreement (the “Card Agreement”) from time to time in force.

4. SCB’s case is simple enough.  On or about 21 March 2012, Mr Yau verbally agreed over the telephone to participate in SCB’s “Credit Card Instalment Credit Program” pursuant to which HK$238,200 (the “Credit Amount”) was advanced to Mr Yau and credited to his designated account with Bank of China (the “Loan”).  This sum was made up of the available credit limit on his Titanium MasterCard plus an additional sum of HK$45,000 lent by SCB to Mr Yau.  The principal was to be repaid by 36 monthly instalments of HK$6,616.66 together with a monthly handling fee of HK$1,881.78 (ie 0.79% of the Credit Amount) (collectively, the “Instalment Amount”).  Repayment terms and interest were set out in the Terms and Conditions of SCB’s Credit Card Instalment Credit Program (the “Terms and Conditions”).  A copy of the Terms and Conditions in English was sent to Mr Yau at his request.  In essence, each Instalment Amount would be charged to the Titanium MasterCard.  No interest was payable if full repayment of the credit card’s statement balance is made on or before the payment due date of each month.  Otherwise, the finance charge for cash advance under the Card Agreement would apply.

5. The total outstanding balance due on the Titanium MasterCard together with interest accrued was HK$251,667.58 as at 16 October 2013.

6. For the purposes of this appeal, the defendant applied for leave to use his 3^rd affidavit dated 4 September 2014 exhibiting a credit report dated 2 September 2014 prepared by TransUnion Limited (the “Credit Report”) as additional evidence.  The reception of further evidence on appeal from a master’s decision is not automatic, albeit common.  The court has a discretion.  Bearing in mind that an appeal from a master’s decision to a judge in chambers is by way of rehearing as though the matter was before the judge for the first time, I decided to exercise my discretion in the defendant’s favour by allowing him leave to rely on his 3^rd affidavit.  I therefore gave leave to the defendant to use his 3^rd affidavit for the purposes of the present appeal.

7. As I understand it, although admitting that the Credit Amount was advanced to him and not disputing that he has not made any repayment since August 2013, Mr Yau disputes the claim on the following grounds:-

(1) He did not fully understand the terms of the Loan such as the instalment amount payable each month and the interest payable on default.

(2) Mr Yau was unhappy with the manner in which SCB promoted the Loan, which he says was unusual and misleading.  The interest payable was made to look very attractive at the beginning but became very high in the end.

(3) SCB’s pleading originally referred to a “Platinum MasterCard”, but the name of the credit card relied upon was later changed to “Titanium MasterCard” in the Amended Statement of Claim.  SCB had also issued a “Platinum Visa” credit card to Mr Yau without his consent.

(4) The Credit Report showed that SCB supplied “false” information, namely, that a “Gold MasterCard” with the same card number as the Titanium MasterCard had been issued to Mr Yau with a “maximum past due amount” of HK$271,952 as at 31 January 2014, when he had never been issued with a “Gold MasterCard” and never used money under such card.

8. For present purposes, the question I have to decide is whether Mr Yau has shown a triable issue by credible evidence on any of the above defences.

Applicable principles

9. The principles applicable to a summary judgment application are well known.  The burden is on the defendant to show a triable defence which is not practically moonshine and is worthy of belief.  The defendant’s affidavit must “condescend to particulars” in support of the defences raised.  Bare allegations are not sufficient.  It is the court’s duty to give judgment for the plaintiff when it is satisfied not only that there is no defence but no fairly arguable point to be argued on behalf of the defendant. See: Hong Kong Civil Procedure 2014, §§14/4/3-11.

10. I also remind myself that this is an appeal by way of an actual rehearing of the plaintiff’s application for summary judgment and I should treat the matter as though it came before me for the first time.  I will give the weight it deserves to the previous decision of the Master but I am in no way fettered by the previous exercise of her discretion: see Hong Kong Civil Procedure 2014, §58/1/2.

Mr Yau did not fully understand the terms of SCB’s Loan

11. It is clear from the transcript of the taped telephone conversations between Mr Yau and SCB’s sales staff that the relevant terms concerning repayment, the instalment amount, the handling fee and the interest applicable were read out to Mr Yau. In particular, SCB’s sales staff had specifically explained to Mr Yau that no extra interest would be payable if full payment of the Instalment Amount and the credit card’s statement balance was made each month.  If it was not paid in full each month, SCB would treat the outstanding amount as a cash advance and the applicable interest rate for cash advance would be charged.

12. Mr Yau initially claimed in his affidavit evidence that he did not understand Chinese and the only word he could understand from the telephone conversations was the word “貸款” meaning loan.  However, it is apparent from the transcript of the hearing below that Mr Yau later confirmed to the Master that he did in fact understand the terms of SCB’s Loan.

13. In any event, it is patently clear from the transcript of the taped conversations between Mr Yau and SCB’s sales staff that Mr Yau not only understood spoken Cantonese but also the terms and conditions of the Loan as explained to him over the telephone.  The telephone conversations were predominantly in Cantonese, interspersed with some occasional English words.  He understood the terms and conditions that were explained to him over the telephone.  In fact, when he did not understand certain matters, he asked the sales staff for clarification.  Towards the end of the conversation, Mr Yau was asked if he had any questions relating to the terms and conditions that were read out to him and his answer was “No, all clear” (“冇呀,都清楚囉”). As mentioned, a copy of the Terms and Conditions in English was also sent to Mr Yau at his request.

14. Various monthly credit card statements in respect of the Titanium MasterCard from November 2009 to December 2013 were exhibited to Mr Yau’s first affidavit dated 4 April 2014.  The monthly statements from June 2012 to December 2013 showed that separate sums of HK$6,6166.66 and HK$1,881.78 were charged to his Titanium MasterCard every month and, whilst he made sporadic repayments here and there, a finance charge for cash advance had been levied whenever the Instalment Amount had not been fully repaid.

15. Each monthly statement also provided that:-

“Please examine your statement immediately. Contents of this statement will be considered correct if no error is reported within 60 days from the Statement Date. See overleaf for important information regarding fees, charges and appropriation of payment.

If you have any question concerning your statement, please call (852) 2886-4111.”

16. There is no suggestion or allegation that Mr Yau had ever questioned or disputed the contents of the monthly statements.

17. In the circumstances, there can be no question that Mr Yau understood the terms of SCB’s Loan, in particular, the terms relating to the repayment and interest.  I am therefore satisfied that there is no triable issue under this defence.

Manner in which SCB promoted the loan

18. Next, Mr Yau says the manner in which SCB promoted the Loan was unusual and misleading because the interest payable was made to look very attractive at the beginning but became very high in the end.

19. As explained above, there was in my view nothing misleading in the manner in which SCB promoted the Loan.  Mr Yau clearly understood its terms and conditions, including the applicable interest on default.  The fact that Mr Yau is unhappy with SCB’s telemarketing practices can in no way affect SCB’s right to sue or Mr Yau’s liability to repay the outstanding Loan in the present case.

20. Accordingly, Mr Yau has failed to show any triable issue under this defence.

Amendment from “Platinum MasterCard” to “Titanium MasterCard” and the “Platinum Visa” card

21. Mr Yau alleges that something very sinister akin to a “commercial crime” had been perpetrated against him by SCB’s conduct in issuing him with a “Platinum Visa” card without his consent, and in changing its pleaded case from “Platinum MasterCard” to “Titanium MasterCard”.

22. First, as explained in the Affirmation of Wong Siu Tat, the name of Mr Yau’s credit card was pleaded as “Platinum MasterCard” instead of “Titanium MasterCard” on the Statement of Claim as a result of a clerical error.  In other words, it was an inadvertent mistake. The correct credit card No 5400-3415-0400-3594 had along been pleaded. Thus, there was nothing sinister behind the amendment and there could have been no misapprehension as to the actual credit card relied upon in support of SCB’s claim.  The exact name of Mr Yau’s credit card in no way affected the nature of SCB’s claim or indeed Mr Yau’s liability to repay the Loan. 

23. Second, the allegations regarding the “Platinum Visa” card issued to Mr Yau are wholly irrelevant to SCB’s claim. SCB is not suing on Mr Yau’s “Platinum Visa” card in this action.

24. For the above reasons, I find that there is no triable issue under this defence.

The Credit Report

25. The Credit Report referred to a “Gold MasterCard” with the same card number as the Titanium MasterCard issued to Mr Yau with a maximum past due amount of HK$271,952 as at 31 January 2014.  Mr Yau says he had never been issued with a “Gold MasterCard” from SCB and never used money under such card.

26. The allegations here are again wholly irrelevant to SCB’s claim in this case.  The “Gold MasterCard” referred to in the Credit Report was clearly a reference to Mr Yau’s Titanium MasterCard as the card number stated therein was the same number as the Titanium MasterCard.

27. Again, Mr Yau alleges something sinister was operating here because there was a difference between the outstanding amount on what was referred to as the “Gold MasterCard” in the Credit Report and the outstanding amount on the Titanium MasterCard in the instant case.  Mr Yau pointed out that in the Credit Report, the “maximum past due amount” was stated as HK$271,952 as at 31 January 2014, whereas the amount claimed in this action was HK$251,667, being the outstanding amount as at 16 October 2013.  It is readily apparent that the difference between the two amounts can be accounted for by the difference in the amount of interest accrued on the two different dates.  Contrary to Mr Yau’s suggestion, it is not possible to infer anything sinister from the Credit Report. Nor is there any basis whatsoever for suggesting that SCB had deliberately supplied false information to TransUnion. In any event, the Credit Report does not form part of the basis of SCB’s claim and is wholly irrelevant to Mr Yau’s liability to repay the Loan.

28. I therefore also find that there is no triable issue under this defence.

Conclusion

29. This case really admits of only one conclusion supported by the clearest and compelling evidence.  The terms of the Loan are unequivocal, and Mr Yau clearly understood them.  There is no dispute that the Loan was advanced to Mr Yau.  No triable defence has been raised as to why Mr Yau should not repay the outstanding Loan.

30. There is no defence to this action.  The Master was right to say so and accordingly this appeal must stand dismissed.  The Master’s judgment will therefore stand and the plaintiff shall have its costs for the hearing below.  I also make an order nisi that the plaintiff shall have its costs for the present appeal.