XCHRX STANDARD CHARTERED BANK v. CHAN SING HUNG ALLAN AND OTHERS

HCMP354/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.354 OF 2001

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J U D G M E N T

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1. The plaintiff obtained judgment against the 3rd defendant in the sum of $6,229,848.81 together with interest. The 3rd defendant lodged a notice of appeal against the judgment and today is the hearing of the appeal.

2. The 3rd defendant is a limited company. It obtained an order from the Master authorising it to be represented by the 1st defendant who is one of its directors. The 1st defendant is not present in court today. Instead Mr Chan King Fai, who is said to be authorised by the 1st defendant, is present. In an affirmation filed on 31 May 2001, Mr Chan exhibited a letter dated 25 May 2001 from the 1st defendant, authorising Mr Chan to handle the case on behalf of the 3rd defendant. The affirmation further exhibits a letter dated 24 May 2001 from the 1st defendant stating that he had to leave Hong Kong for 14 days to discuss business with an African country. The 1st defendant asked for the appeal to be adjourned. A further letter dated 15 May 2001 said to be from the Embassy of the Republic of Guinea, Ecuatorial in Beijing, invited the 1st defendant to visit its country. The letter asked the 1st defendant to arrange to leave Hong Kong on 26 May 2001 and he may return to Hong Kong on 16 June 2001.

3. I am not prepared to allow Mr Chan to represent the 1st defendant who is the only one authorised by the Master to represent the 3rd defendant. I am not prepared to adjourn the hearing. The present hearing date was fixed since 9 April 2001. The 1st defendant is said to be one of the promoters of the "Hong Kong Licensed Money Lenders Association" (放債人協會發起人). He obviously is familiar with the operation of the commercial world and the requirements of legal proceedings. He has not made any application himself to court to adjourn the hearing prior to today and he just cannot expect the court to grant him indulgence in such a manner.

4. In any event, I am not satisfied that there is any merit in the appeal. The plaintiff had lent money to the 3rd defendant pursuant to terms of a General Customer Agreement dated 21 July 1997 ("the Agreement") and a Facility Letter dated 15 May 1997. The parties further signed a Tripartite Legal Charge and Mortgage dated 21 July 1997. Banking facilities in the form of overdraft of $1 million, trade facility of $2.5 million and a fixed loan of $1.8 million, totalling $5.3 million were granted to the 3rd defendant.

5. The 3rd defendant made default in repayment of the facilities in November 1998. By then the amount due to the plaintiff was $5,054,000 odd. As a result, the plaintiff, pursuant to the terms of the Agreement, demanded the 3rd defendant to make repayment and imposed a revised interest rate which it is entitled to do in case of default by the 3rd defendant. Subsequently, the plaintiff agreed to grant a fixed loan facilities of $5,520,898.61 to the 3rd defendant. The terms are contained in, among other things, in the second Facility Letter of 18 February 2000. The amount is repayable by 240 monthly instalments of $50,126 each. The amount may be varied according to changes in the interest rate. The amount was accepted by the 3rd defendant as evidenced by the resolution of its board dated 9 May 2000 and the director's certificate of the 1st defendant dated 26 May 2000. The 3rd defendant only made three repayments for the instalments. Cheques paid by the 3rd defendant for the payment of the instalments were dishonoured.

6. It is clear from the evidence that the 3rd defendant had admitted that the amount due to the plaintiff in November 1998 was $5 million. It had also accepted the second Facility Letter. No complaint of inducement or promise on the signing of the second Facility Letter was ever raised prior to the 1st defendant filing the evidence in this case. On the contrary, the 3rd defendant asked for further time to pay the indebtedness when the plaintiff demanded payment prior to the commencement of the present proceedings. Allegations of the plaintiff charging interest rates and management charges not authorised by the terms of the Agreement are clearly refuted by the terms of the Agreement itself. There is no merit in the appeal and judgment is rightly entered against the 3rd defendant.

7. The appeal is accordingly dismissed with costs to the plaintiff. The costs are to be taxed on indemnity basis as provided for in the Agreement.