STANDARD CHARTERED BANK (HONG KONG) LTD v. LOK SHEK HUNG

DCCJ 1903/2021

[2022] HKDC 1334

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1903 OF 2021

--------------------

--------------------

----------------------------------------

REASONS FOR DECISION

----------------------------------------

A.  INTRODUCTION

1.  The Defendant sought leave to appeal (“the Leave Application”) my Order dismissing his appeal against the decisions of Master Maurice Lam respectively dated 4 January 2022 and 23 February 2022 (“the Master’s Orders”) with reasons being set out in my Decision dated 4 August 2022 (“the Decision”). The Leave Application was heard by me on 5 October 2022. I dismissed the Leave Application after the hearing, reserving my reasons for decision which I hand down now. Unless otherwise specified, I shall adopt the same definitions and abbreviations used in the Decision herein.

B.  NO LEAVE TO APPEAL SHOULD BE GRANTED

2.  The Defendant has not shown that his prospects of succeeding are “reasonable” and therefore more than “fanciful” without having to be probable (see CS v WCT [2022] HKCA 654 at §11, citing SMSE v KL [2009] 4 HKLRD 125 at [17]). Nor can the Defendant shows that the intended appeal would present the Court of Appeal with an opportunity to provide the much needed clarification on an area of law or to entertain an argument that the law ought to be changed, or that the question is one of general principle to be decided for the first time or a decision of the Court of Appeal would be to the public advantage (see Xu Ying v Xu Weihong [2020] HKCFI 2826 at §5).

3.  I am therefore not satisfied that the Defendant should be granted leave to appeal under section 63A(2) of the District Court Ordinance (Cap. 336).

4.  In coming to this decision, I have borne in mind the following important matters or circumstances of the present case:

(1)  The Plaintiff claimed for recovery of the outstanding credit card payments, together with interest and other fees and charges, owed by the Defendant from using the two Credit Cards issued to him (see paragraph 3 of the Decision);

(2)  The Defendant did not dispute that he had indeed used the Credit Cards and incurred debts, pursuant to the Cardholder Agreement, and the Credit Card Terms and the Key Facts Statement respectively (see paragraph 4 of the Decision);

(3)  The Defendant did not challenge the accuracy of the Plaintiff’s arithmetic calculations of the interest, fees and charges and the payments in question (see paragraph 30 of the Decision);

(4)  The Defendant failed to disclose any triable issue or an arguable defence that there was breach by the Plaintiff of the UCO, the SSO and/or some other overseas legislation and regulation and code and practice etc. Nor was there any so-called “public policy consideration”. The Defendant’s Counterclaim against the Plaintiff was based on the same allegations;

(5)  In these circumstances, I therefore dismissed the Defendant’s appeal against the Master’s Orders for, inter alia, (a) the setting aside of the Default Judgment entered against the Plaintiff for the Defendant’s Counterclaim; (b) the Summary Judgment; and (c) the striking out of the Defendant’s Counterclaim.

5.  It is plain that the arguments advanced by the Defendant for the purpose of the Leave Application are effectively mere regurgitation of the points advanced before and rejected by the Court. They contain no substance or are hopelessly groundless and are bound to fail. I am not at all persuaded that there are factual errors and/or errors of law in the Decision as alleged by the Defendant to be elaborated below.

B.1  Alleged Factual Errors

6.  The Defendant’s complaint against paragraph 32 of the Decision is manifestly misconceived. The Court of Final Appeal’s decision in Ming Shiu Chung & Others v Ming Shiu Sum & Others (2006) 9 HKCFAR 334 at 365 per Ribeiro PJ clearly provides the starting point for the consideration of the Defendant’s argument in the present case and should be duly taken into account and applied by the Court.

7.  The point being made in paragraph 36 of the Decision is that the Defendant failed to identify which parts in the Cardholder Agreement and the Credit Card Terms and the Key Facts Statement would remotely support his case that the Plaintiff was in breach of the UCO by charging him interest and applying the payments received from him in the order in question. Notwithstanding that, for the sake of argument, the Defendant’s case was put to the highest by the Court and the Decision proceeded on the basis as if he was challenging the unconscionability of all those parts in the Cardholder Agreement and the Credit Card Terms and the Key Facts Statement which empowered the Plaintiff to charge interest and to apply payments.

8.  The Defendant’s argument that it was wrong for the Court to make the point at paragraph 40 of the Decision that it was open to the Defendant not to subscribe for the credit card services provided by the Plaintiff in the first place is hopelessly bad. The Defendant did not dispute that his use of the Credit Cards and the Credit Card Accounts were subject to the Cardholder Agreement and the Credit Card Terms and the Key Facts Statement. The Plaintiff charged and applied the interest, fees and charges and the payments received from the Defendant in accordance with the terms and conditions therein. The Defendant chose to activate the Credit Cards and carry out transactions with them. Furthermore, the Defendant did not at any time terminate or destroy the Credit Cards or require the Plaintiff to do so. On the contrary, the Defendant has simply been continuously using the Credit Cards since January 2009 and May 2010 respectively.

9.  It is hardly open to the Defendant to challenge paragraph 45 of the Decision:

(1)  According to the record of the Court (as explicitly stated in the Decision), the Defendant only vaguely suggested that he did not recall seeing or receiving all the monthly statements, but he did not pursue it afterwards;

(2)  The Defendant did not previously contest that he had not been informed of the interest rates or finance charges or had not received the monthly statements. As rightly pointed out by the Plaintiff, the November 2020 to April 2021 monthly statements were adduced as exhibits and referred to by the Plaintiff in the hearing before Master Maurice Lam; and

(3)  But even if the Defendant’s allegation were to be accepted, it was in any event not disputed that the Defendant’s use of the Credit Cards and the Credit Card Accounts were subject to the Cardholder Agreement and the Credit Card Terms and the Key Facts Statement, and the interest, fees and charges and the payments received from the Defendant were charged and applied by the Plaintiff in accordance with their terms and conditions.

10.  Paragraph 55 of the Decision correctly states the Defendant’s case that the FCA Rules in the UK required licensed banks to approach customers with persistent debts and to provide them with fixed instalment plans applying less interest rate for a reasonable period and even forbearance including waiving of interest and charges altogether.

11.  According to the record of the Court, paragraph 56 of the Decision sets out accurately the position adopted by the Defendant in the hearing before. It was also one correctly made by the Defendant, considering that the FCA Rules did not and continue do not have application to the Plaintiff in Hong Kong.

12.  Turning to paragraph 57 of the Decision, there is no real or practical difference between “high” and “senior” level management in the present context. The positions which the Defendant emphasized, namely, the CEO Asia, the CEO HK, the Head of Retail and the Head of Risk Management, were noted by the Court. The Defendant further made the point about the contribution of the Hong Kong market to Standard Chartered PLC etc., which was also noted in that paragraph.

13.  The Defendant’s complaint about the default of the senior management of the Plaintiff to ensure the enforcement of the FCA Rules by the Plaintiff was unsubstantiated and invalid and could not possibly succeed (see paragraphs 58 to 60 of the Decision). Notably, Standard Chartered PLC and the Plaintiff are separate legal entities. The fact that Standard Chartered PLC is regulated by the FCA and other authorities in the UK does not mean that the Plaintiff should equally be subject to it.

B2.  Alleged Errors of Law

14.  The Defendant’s argument that the legal principles relevant to the application of the UCO and the totality of circumstances raised by him were not properly and correctly considered by the Court flies in the face of the clear reasons of the Decision and is thoroughly bad.

15.  Contrary to the Defendant’s argument, there was no question of “foreign illegality” in the present case as explained in paragraphs 53 to 60 of the Decision. Any criticism of the Decision based by the Defendant on it is manifestly misconceived and has no reasonable prospect of success.

16.  The Defendant’s challenge of paragraph 63 of the Decision is unsubstantiated, as Clause 12.3 of the Code expressly refers to the interest rate which is presumed to be “extortionate” under the Money Lenders Ordinance (Cap. 163) (i.e. 48 per cent per annum).

17.  The Defendant’s complaint about paragraph 64 of the Decision can hardly get off the ground. There was no evidence to show that the Personal Instalment Loan Debt Consolidation Program including Clause 3 thereof was not applying to all customers and hence the Plaintiff was not acting “equitably, honestly and fairly” as alleged by the Defendant.

18.  Paragraphs 66 and 67 of the Decision disclose no error of law. The Court reached the conclusion that the Plaintiff had not acted below the reasonable care and skill after rejecting the matters raised by the Defendant both for unconscionability and breach of section 5 of the SSO.

19.  The present case is undoubtedly a simple and straight-forward case of recovery of outstanding credit card payments, together with interest and other fees and charges owed by the Defendant. There is no question of “public policy considerations”. The Defendant fails to show why and how paragraphs 68 and 69 of the Decision are erroneous in any way.

20.  Lastly, the Defendant’s complaint against paragraph 71 of the Decision is bound to fail. The legal principles applicable to an application for setting aside of a default judgment are well-established as set out at paragraph 21 of the Decision. There are other considerations which a court must consider, such as the reason why default judgment occurred, but the critical factor and starting point are still the merits of the defence. In the present case, the Defendant failed to show any meritorious defence with a real prospect of success. In any event, the Court had considered all the matters set out in Keith 1^st to 2^nd, Mandy 1^st to 4^th and Def 1^st to 6^th.

C.  CONCLUSION

21.  For these reasons, the Leave Application was groundless and frivolous and was therefore dismissed after the hearing, with costs to the Plaintiff to be taxed if not agreed.