PACIFIC ACE FINANCE LTD v. DELAY, GILDA H. AND ANOTHER

DCCJ 3298/2018 & DCCJ 3299/2018

(Heard Together)

[2026] HKDC 669

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3298 OF 2018

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BETWEEN

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IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3299 OF 2018

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BETWEEN

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DECISION

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1.  Delay, who is the 1^st Defendant of DCCJ 3298/2018 and the 2^nd Defendant of DCCJ 3299/2018, took out two summonses for these respective cases on 6 August 2025 for leave to appeal (the “Appeal Summonses”) from my judgment handed down on 10 July 2025 (“the Judgment”). Each of the Appeal Summonses was filed together with an affirmation of Delay in support of her application.

2.  I directed that those affirmations from Delay were to be treated as her draft Notice of Appeal which set out her grounds of appeal (“Delay’s Grounds of Appeal”). Given Delay was not legally represented, I directed that the Appeal Summonses would be determined after an oral hearing. The parties have provided me their respective written submissions in accordance with my directions. I have duly considered all the submissions, both written and oral provided by the parties. The facts and the reasons for the Judgment have been set out therein and I do not repeat the same here. For ease of reference, the abbreviations used in the Judgment are adopted in this Decision.

Background of the cases and proceedings

3.  These two cases that were tried together are money lenders’ actions where the Plaintiff (“P”) tried to recover the principal sum with interest of two set of loans from the Defendants in the respective two actions (“Ds”). In my Judgment, I found in favour of P and while agreeing with the calculation of interests proposed by P under Loan 1 (see paragraphs 54 and 55 of the Judgment), I directed P to re-calculate the default interest of Loan 2 based on the principals stated in paragraphs 56 and 57 of the Judgment, and gave P the option to waive the accrued default interest of those months before the unpaid sums.

4.  P provided their updated calculation of outstanding amount due from Ds to P on 31 July 2025 (the “Updated Calculation”) and Ms Lo who appeared for P confirmed to minimize further costs, P agreed to apply all the repayments made by Delay to discharge the total interests payable under Loan 2, and to pursue the default interest based on the outstanding principal from the due date to the date of Judgment.

5.  In the Updated Calculation, the calculation of Loan 1 is as follows:

Outstanding Principal: $8,250

Number of days from due date to date of Judgment: 3,688 days

Rate of default interest: 30% per annum

Default interest:

Outstanding principal × Default interest × (Number of due days/365)

ie $8,250 × 30% × 3688 / 365 = $25,007.67

Thus, the total outstanding amount under Loan 1 as at the date of Judgment:

$8,250 + $25,007.67 = $33,257.67

6.  With Loan 2, the Ds made sporadic repayments between 27 June 2015 and 5 December 2017 totally at $13,432. According to the Updated Calculation and P’s confirmation as stated in paragraph 4 above, all the repayments made by Delay would first apply to settle the interest payable under the Loan 2 with surplus applying to the outstanding principal. In such premise, the outstanding principal would be $1,442. Since P waived all interest payable before the due date, the calculation is as follows:

Outstanding Principal: $1,442

Number of days from due date to date of Judgment: 2,740 days

Rate of default interest: 28.8% per annum

Default interest:

Outstanding principal × Default interest × (Number of due days/365)

ie $1,442 × 28.8% × 2740 / 365 = $3,117.56

Thus, the total outstanding amount under Loan 2 as at the date of Judgment:

$1,442 + $3,117.56 = $4,559.56

The proposed grounds of appeal

7.  Delay’s Grounds of Appeal can be broadly summarised as follows:

(i) Delay was prejudiced by the Court’s decision of allowing P to recalculate the default interest of both Loan 1 and Loan 2, which contradicted to P’s pleaded case;

(ii) The Updated Calculation was wrong and the effective rate of interest under Loan 1 and Loan 2 per Delay’s calculation has exceeded 60% per annum thus being unenforceable;

(iii) Delay was prejudiced by the Court’s decision of rejecting and/or did not give sufficient weight to the respective statutory declaration of Rosalina and Andrenee filed by Delay (the “Statutory Declaration”), which could allegedly prove first, Delay did not consent to be the co-borrower of Loan 1 and secondly, Andrenee was ‘made by’ P to act as Delay’s co-borrower in Loan 2;

(iv) The Court erred in law and fact to have held that both P’s witnesses as unreliable witnesses and rejected their evidence;

(v) The Court erred in law and fact to reject Delay’s and/or Ds’ evidence; and

(vi) The Court erred in law and fact to accept the validity of the Promissory Note of Loan 1 and Loan 2 as the loan agreements of respective loans.

Applicable Principles for Leave to Appeal

8.  The legal principles applicable for leave to appeal are well-established. Section 63A of the District Court Ordinance, Cap 336 (“DCO”) is the governing provision. Section 63A(2) stipulates: -

“(2) Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that —

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

9.  The relevant test of whether an appeal has a reasonable prospect of success under section 63A(2) of the DCO is whether the applicant for leave can show that he has an arguable case with reasonable chances of success on appeal. It means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable”: see the Court of Appeal (“CA”) decision in KNM v HTF per Fok JA (as the learned PJ then was) at paragraph 9 [1]. The same test has been consistently applied by the CA: see for example, Yuen Oi Yee Lisa v Charoen Sirivadhanabhakdi & Others [2].

10.  If there is a challenge of the court’s findings of facts, the following legal principles apply:

(a) The CA can only intervene in a finding of fact by a primary judge where the finding is plainly wrong;

(b) In an appeal, the CA focuses on the question whether the primary judge has fallen into palpable errors which could only give rise to grounds for intervention by the appellate court; it is not germane that the CA may reach a different conclusion from that of the judge;

(c) Where a trial judge has reached a conclusion on the primary facts, the kinds of mistake which could engage an appellate court’s power of intervention are:

(i) where there was no evidence to support the conclusion;

(ii) the conclusion was based on a misunderstanding of the evidence; or

(iii) the conclusion was one which no reasonable judge could have reached.

11.  Delay’s Grounds of Appeal (iii) – (vi) as stated in paragraph 7 above are baseless as those are challenges to the Court’s findings of facts and the appellant court would only reverse a finding of primary facts if it were satisfied that the finding is plainly wrong.

12.  The appellate process is not designed to give a litigant a platform for regurgitating her closing submissions on the evidence and factual aspects of the case again with the hope that the appellate judges may come to a different view to that of the primary judge. The mere assertion that the finding of the judge is against the weight of the evidence or that the judge should have reached another conclusion because of points advanced in the closing submissions below are not errors coming within that category. (See China Gold Finance Ltd v CIL Holdings Ltd, unreported, CACV 11/2015, 27 November 2015 at paras 11-19 and Yu Pak Kan v Busy Firm Investment Limited [2023] HKCA 105 at para 19)

13.  Delay’s Grounds of Appeal were mostly a replay of her case and evidence, and one must remember Delay did not give evidence in the trial but attempted to introduce all evidence from a hearsay perspective from one TamAng. The Court gave thorough considerations in paragraphs 15 to 17 of the Judgment as to how much weight should be given to TamAng’s evidence, and I shall not repeat here. I remain my view that TamAng’s evidence as to those he has no direct personal knowledge of should not be considered.

14.  On the same token, the complaint of the Court did not give sufficient weight to the Statutory Declaration of Rosalina and Andrenee is completely invalid. Delay averred that the Statutory Declaration was filed and served upon the P about 2 weeks before the Trial and thus gave P sufficient time to make a reply. The Statutory Declaration is merely a hearsay evidence, and as explained in paragraph 17 of the Judgment, it would be prejudicial to P should the Court accepted the contents of the Statutory Declaration without having Rosalina and Andrenee being cross-examined in the Trial.

15.  Since most of the points raised by Delay in her Grounds of Appeal, written submissions and oral submissions were simply regurgitation of her earlier submissions for the Trial, I do not consider that Delay has any reasonable chance of success in appealing against any of my primary findings of facts as the Judgment has already provided all the weighing exercise and considerations I made before coming to my decision. I shall not repeat my reasonings here as the Judgment has provided so.

16.  It is clearly a misconceived allegation that the Court was erred in law by allowing P to ‘amend its pleadings’ after the Trial. After the Court adjudged the Loan 1 and Loan 2 both being enforceable at the interest rates pleaded by P in their respective claims, the Court is entitled to assess the actual interests, or “compensatory damages” suffered by P due to Ds’ breach of contract. By asking P to provide the Updated Calculation is by no means allowing P to ‘amend’ their pleaded case.

17.  Last but not least, Delay’s calculations of the interest rates were rejected by the Court in the Judgment. With respect, her calculations, as I said in the Judgment, did not take into account of the interest accrued from her late payment which made her calculation factually wrong.

18.  Further, in a recent judgment Sun Entertainment Culture Limited v Inversion Productions Limited (formerly known as TNC Productions Limited) [2024] 4 HKLRD 991, the Court of Appeal confirmed that default interest is not taken into account in the calculation of effective interest rate under sections 24 and 25 of the Money Lenders Ordinance, Cap 163 (“MLO”).

19.  The Court of Appeal took the view in paragraph 37 of the judgment that the nature of default interest is “not an agreed price for the use of money as a loan, but stipulated compensation for the wrongful detention of money after the loan has expired”. But there is obstacle to include default interest into the calculation of effective interest rate under Schedule 2 to the MLO because default interest is typically charged on an open-ended basis and without an end date of the default period, so it is not possible to calculate an average rate covering both the loan period and default period.

20.  In any event, P waived the charges for late payment before the trial and in their Updated Calculation, P applied all the paid amount to settle the interests payable under the respective Loans, and thus Ds only needed to pay the default interest based on the outstanding principal. This could hardly be described as unfair and the Court accepted the calculation under both Loan 1 and Loan 2.

21.  In light of the above, I consider Delay has failed to demonstrate any reasonable grounds to suggest that my findings are plainly wrong. There is no merit in any of the grounds proposed by Delay, and thus no reasonable prospect of success in Delay’s appeal.

22.  Both Delay’s Summonses must be dismissed. Since the Judgment made on 10 July 2025 was pending P’s Updated Calculation, and now having dealt with Delay’s Appeal Summonses, for the sake of clarity, the Court affirmed the Judgment with the following orders:

23.  For DCCJ 3298/2018, both the 1^st and 2^nd Defendants do pay the Plaintiff:

(i) the outstanding principal at $1,442.00;

(ii) the default interest from 18 January 2018 to the date of Judgment at $3,117.56;

(iii) the interest on both (i) and (ii) from the date of Judgment at the judgment rate until payment; and

(iv) Costs.

24.  For DCCJ 3299/2018, both the 1^st and 2^nd Defendants do pay the Plaintiff:

(i) the outstanding principal at $8,250.00;

(ii) the default interest from 5 June 2015 to the date of Judgment at $25,007.67;

(iii) the interest on both (i) and (ii) from the date of Judgment at the judgment rate until payment; and

(iv) Costs.

Costs

25.  The Court made a costs order against all the Defendants to pay P’s costs of these two actions and asked P to file and serve their statement of costs for the proceedings up to the trial for summary assessment. Delay filed her objections to P’s statement of costs but did not make any counter-propose. She simply denied her liability to pay costs.

26.  Costs should follow the event and the losing party has to bear the winning party’s costs of proceedings. With the Plaintiff being regarded as the real winner or the successful party in the trial of these two actions, the matter would proceed as Bokhary JA (as he then was) said in Elpe International (Far East) Limited v Hewlett Packard Hong Kong Limited, unreported, CACV 58/1993, 30 July 1993 on the general rule that the winner is in general entitled to be paid his costs unless there are special circumstances called for some other orders to be made. In displacing the general rule on costs in favour of the successful party, the Defendants bear the burden to show that the circumstances justified such exceptional course, such as the successful party failed on certain allegations or issues and thereby “caused a significant increase in the length or cost of the proceedings”.

27.  There is, of course, no such circumstances being highlighted from Delay. In fact, Delay should be aware of the costs consequence from various interlocutory applications she made but failed in years of 2023 and 2024. There have been inordinate delay in these two simple money lenders’ actions since the issue of the writ, thus the Court decided to have the costs of these two actions summarily assessed rather than going through taxation, which would incur more costs and time.

28.  Having considered the nature of these two actions as well as the documents involved, I consider that the costs incurred could have been substantially inflated but for P’s sensible approach of not instructing counsel. It therefore justifies more working hours of P’s instructed solicitors, and by taking a broad brush approach, I consider the costs of proceedings for these two actions be at $530,000.00 is just and reasonable.

29.  Since the Appeal Summonses are both dismissed, I further order on a nisi basis that Delay do pay P costs of these two Appeal Summonses, to be assessed summarily. The P’s solicitors have filed a Statement of Costs dated 10 December 2025 seeking a sum of HK$47,523.00, I consider that the amount as sought by P is just and reasonable. I therefore order costs against Delay summarily assessed at HK$47,523.00. This costs order nisi shall be made absolute if no application to vary the same (including any summary of objections to P’s statement of costs in respect of the Appeal Summonses) is made within 14 days hereof.