LAM YEE HUNG v. CHINACHEM CHARITABLE FOUNDATION LTD

CACV 124/2023, [2026] HKCA 112

On Appeal From [2023] HKCFI 908

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 124 OF 2023

(ON APPEAL FROM HCA NO 764 OF 2015)

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J U D G M E N T

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Hon Chow JA (giving the Judgment of the Court):

INTRODUCTION

1.  There are before the Court 2 applications for leave to appeal from the Court’s judgment dated 7 November 2025 (“the CA Judgment”).

2.  The basic facts of this case and the Court’s reasons for partially allowing the Defendant’s appeal against the judgment of Deputy High Court Judge Leung (as he then was) (“the Judge”) dated 31 March 2023 are fully set out in the CA Judgment and will not be repeated here.

3.  In the Defendant’s Notice of Motion dated 5 December 2025, the Defendant raises the following 5 questions said to be questions of great general or public importance which ought to be determined by the Court of Final Appeal:

(1)  Question D1 – whether and if so when it would be permissible for a party contending for a particular effect of an oral agreement (i) as being expressly agreed; and (ii) such express agreement was reached because of an expressly agreed reason, to succeed at trial as a matter of construction on the basis of the expressly agreed reason, even though the judge disbelieves the express agreement of the effect?

(2)  Question D2 – whether it is necessary for a party contending for a particular construction of an oral agreement to plead the facts and matters in support of that construction, including that (i) such facts and matters were known or at least reasonably available to the parties at the time when the contract was executed, and (ii) the effect which such facts and matters will have on their intended construction?

(3)  Question D3 – where a first instance judge has concluded that the true construction of an oral contract is “x” without finding the express words used, whether and if so when it would be permissible for an appellate court to hold that the true construction of the oral contract is “y”, in particular where the first instance judge doubted that “y” was the parties’ understanding?

(4)  Question D4 – where a contract provides that a particular term (eg interest or price) is to be what the maximum of what the law permits (or concepts of like effect) and the maximum is not a prescribed fixed amount, but a discretionary conclusion:

(a)  whether or when the court is entitled to hold that the term shall simply be the absolute maximum of what the law could possibly permit; and

(b)  whether or when such a term would be void for uncertainty?

(5)  Question D5 – whether the maximum rate of interest permitted by Hong Kong law is the rate provided for in s 24(1) and (2) of the Money Lenders Ordinance, Cap 163, ie 60% per annum in 2009 and 48% per annum now?

4.  In the Plaintiff’s Notice of Motion dated 5 December 2025, the Plaintiff raises the following 2 questions said to be questions of great general or public importance which ought to be determined by the Court of Final Appeal:

(1)  Question P1 – when a loan agreement by its express term provides for “maximum interest permissible by the laws of Hong Kong”, should the court apply the principles of contractual construction (cf Eminent Investments (Asia Pacific) Limited v DIO Corporation (2020) 23 HKCFAR 487, §§43, 45; Sinoearn International Ltd v Hyundai-CCECC Joint Venture (A Firm) [2012] 1 HKLRD 823, §§25, 27) to construe the numerical interest rate that the parties objectively intended by that language in its context? Or should the court only construe the Money Lenders Ordinance, Cap 163, to identify the maximum interest rate permissible as a matter of law?

(2)  Question P2 – on a true and proper construction of Part IV of the Money Lenders Ordinance, Cap 163:

(a)  whether, in circumstances where s 25(1)(a) applies but s 24(1)-(2) and the presumption of extortion under s 25(3) do not, the court should determine if the transaction is extortionate for the purposes of s 25(1)(b) (by considering the elements in s 25(2) and the factors in s 25(4)-(6)); and

(b)  whether, in reopening a loan transaction under s 25(1), the court can reduce the outstanding principal?

5.  In addition, both parties seek to rely on the “or otherwise” limb in s 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap 484, in support of their respective applications for leave to appeal.

DISCUSSION

6.  Under Section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, an appeal shall lie to the Court of Final Appeal at the discretion of the Court of Appeal or the Court of Final Appeal in any civil cause or matter if, in the opinion of the Court of Appeal or the Court of Final Appeal (as the case may be), the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court of Final Appeal for decision.

7.  We do not consider that leave to appeal should be granted in respect of Questions D1 and D2:

(1)  In relation to Question D1, although the Defendant has framed the question in a general or abstract manner, it is clear that the Defendant’s complaint is tied to the specific manner in which the Plaintiff pleaded its case in respect of the oral loan agreement entered into by the parties in the course of a few meetings in Hong Kong in early 2009, the specific evidence adduced by the Plaintiff to prove the oral agreement, and the specific findings of fact made by the Judge in respect of the oral agreement (in particular, accepting a part of the Plaintiff’s evidence which supported a part of the Plaintiff’s pleaded case, namely, “the Plaintiff agreed to lend and the Defendant agreed to borrow a sum of about HK$40 million with maximum interest permissible by the laws of Hong Kong”, but not accepting another part of the Plaintiff’s evidence which supported the remaining part of the Plaintiff’s pleaded case, namely, “which was expressly agreed by the parties to mean 60% per annum”). We do not see that Question D1 is a question of great general or public importance.

(2)  Question D2 concerns how an oral agreement should be pleaded by a party, or what facts or matters are required to be pleaded in respect of an oral agreement. This question cannot be answered in the abstract. It depends on the particular facts and circumstances of any given case. Again, we do not see that Question D2 is a question of great general or public importance.

8.  Questions D3, D4 and D5 go to the heart of the parties’ disputes in the appeal, and may be considered together with Question P1. The parties differ on whether, and if so, how the court’s normal approach to the construction of a written contract should be applied to determine the true meaning and effect of an oral agreement, particularly where the primary judge did not find the exact words used by the parties which constituted or embodied the oral agreement in question. There is also the question of whether there is a maximum permissible rate of interest for a loan under Hong Kong law, and if “yes”, what that maximum rate of interest is. We are prepared to grant the Defendant leave to appeal in respect of Questions D3, D4 and D5 and to the Plaintiff in respect of Question P1, save that:

(1)  the words “and the maximum is not a prescribed fixed amount, but a discretionary conclusion” should be omitted from Question D4, because those words presuppose that the maximum rate of interest under Hong Kong law is not a prescribed fixed amount, but a discretionary conclusion; and

(2)  the words “Or should the court only construe the Money Lenders Ordinance, Cap 163, to identify the maximum interest rate permissible as a matter of law” should also be omitted from Question P1, because those words do not represent or fully represent the Court’s reasoning for finding that the agreed contractual interest rate in the present case was 60% per annum.

9.  Insofar as Question P2 is concerned, the matters raised by that question are intertwined with the issues that we have remitted to the Judge for fresh determination. Any further consideration of Question P2 ought to await the outcome of the Judge’s decision in the remittal.

10.  Lastly, it is the well-settled practice of this Court to defer to the Appeal Committee of the Court of Final Appeal to consider whether leave to appeal ought to be granted under the “or otherwise” limb, and we see no good reason to depart from this practice in the present case.

DISPOSITION

11.  Leave to appeal is granted to the Plaintiff and the Defendant to the extent as indicated in §8 above.

12.  On the issue of costs, the Plaintiff and the Defendant have each been partially successful in their respective applications:

(1)  Insofar as the Plaintiff’s application is concerned, we make an order that (a) half of the Plaintiff’s costs, and (b) the Defendant’s costs shall be in the cause of the appeal. We have considered the costs statements lodged by the parties, and summarily assess (i) the Plaintiff’s costs in the sum of HK$100,000 (half of which would come to HK$50,000), and (ii) the Defendant’s costs in the sum of HK$130,000.

(2)  Insofar as the Defendant’s application is concerned, we make an order that (a) half of the Defendant’s costs, and (b) the Plaintiff’s costs shall be in the cause of the appeal. We have considered the costs statements lodged by the parties, and summarily assess (i) the Defendant’s costs in the sum of HK$150,000 (half of which would come to HK$75,000), and (ii) the Plaintiff’s costs in the sum of HK$110,000.

13.  Finally, for the purpose of the appeal or any further application for leave to appeal, the parties shall prepare an agreed English translation of those parts of Mr Lam and Mr Pang’s witness statements quoted verbatim at §§41 and 42 of the CA Judgment for the use of the Court of Final Appeal. In the event that the parties are unable to agree on the correct translation, the Plaintiff shall obtain a certified English translation from the court’s interpreter.