HCA 1828/2022
[2024] HKCFI 3609
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO 1828 OF 2022
________________________
BETWEEN
ICBC INTERNATIONAL FINANCE LIMITED
Plaintiff
(工銀國際金融有限公司)
and
TRIPLEX INTERNATIONAL BIOSCIENCES GROUP LIMITED
1st Defendant
(泰普國際生物科學集團有限公司)
THINK BEST TECHNOLOGY LIMITED
2nd Defendant
SUCCESS WELLNESS TECHNOLOGY HOLDINGS COMPANY LIMITED
3rd Defendant
(瑞康科技控股有限公司)
TRIPLEX INTERNATIONAL BIOSCIENCES COMPANY LIMITED
4th Defendant
(泰普國際生物科學有限公司)
YIU MING FUNG (姚銘鋒)
5th Defendant
________________________
Before :
Master Val Chow in Court
Date of Hearing :
4 December 2024
Date of Judgment :
31 December 2024
______________________________
JUDGMENT
______________________________
Introduction
1. This is the assessment of damages of the claim by the Plaintiff against the 1st to 5th Defendants in an action for debt recovery.
Undisputed background
2. On or about 20 May 2014, the Plaintiff as lender entered into a HK$350,000,000 Facility Agreement (the “Loan Agreement ”) with the 1st Defendant (as the borrower), the 2nd to 4th Defendants (as guarantors) and the 5th Defendant. At about the same time, the 5th Defendant also executed a personal guarantee (the “Personal Guarantee ”) in favour of the Plaintiff to guarantee the 1st Defendant’s liability under the Loan Agreement, as it may from time to time be amended, restated, novated or replaced.
3. The facility under the Loan Agreement was drawn down on 23 May 2014.
4. Subsequently, by agreement a number of time extensions and amendments to the Loan Agreement were made which culminated in a Restated Loan Agreement dated 29 December 2015 (the “Restated Agreement ”).
5. The Restated Agreement provides that (amongst others):-
(i) After taking into account historical repayments, the principal amount of the loan was agreed to be HK$340,000,000[1] .
(ii) The principal amount was to be repaid in three instalments with the last instalment falling on 30 September 2016[2] .
6. Notwithstanding certain repayments made up to 29 December 2017, the Defendants went into default. On or about 26 July 2018, the Plaintiff issued a demand letter for the immediate repayment of the outstanding principal sum of HK$335,000,000 (“Outstanding Principal Sum ”) together with any accrued interest and default interest.
7. On or about 23 December 2022, the Plaintiff commenced the present action against the Defendants by issuing a generally indorsed writ.
8. On 19 July 2023, the Plaintiff entered a default judgment (the “Judgment ”) against the Defendants for:-
(i) the Outstanding Principal Sum; and
(ii) damages representing the amount of interest and costs of this action to be assessed.
The assessment hearing
9. As directed by the court, the assessment hearing took place on 4 December 2024. The hearing was attended by Mr Zhao Jifei (“Mr Zhao ”), who gave evidence on behalf of the Plaintiff.
10. The Defendants have not participated in these proceedings. Despite service of the Notice of Appointment of Assessment of Damages on the Defendants, they did not appear at the assessment hearing.
11. Under RHC O 35 r 1(2) (which applies to assessment of damages by a master by virtue of RHC O 37 r 1(3)), the court may proceed with the assessment in the absence of a party.
12. Notwithstanding the Defendants’ absence, in the circumstances, I am satisfied that sufficient steps have been taken to notify the Defendants of this hearing. Hence, it is appropriate to proceed with this assessment.
Analysis
13. As indicated in the Judgment, the main issues to be determined in this assessment is the quantification of: (i) the amount of interest payable by the Defendants; and (ii) costs.
Contractual basis for the Defendants’ liability to pay interest
14. The 1st Defendant’s obligation to pay contractual interest to the Plaintiff is provided under the Restated Agreement as follows:-
(i) The interest rate applicable for the period from 20 May 2014 to 31 July 2015 is 7% per annum. Thereafter, the interest rate is 11% per annum until full repayment[3] .
(ii) Where there is any failure to make payment on a due date, a default interest at a rate of 2% higher than the above-stated standard rates[4] shall apply to the Unpaid Sum[5] from the due date to the date of actual payment as if the Unpaid Sum had, during the period of non-payment, constituted a loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Plaintiff (acting reasonably). Any accrued default interest shall be immediately payable on demand by the Plaintiff.[6]
(iii) If any Unpaid Sum consists of all or part of a loan which became due on a day which was not the last day of an Interest Period[7] relating to that loan[8] :-
(a) the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to that loan; and
(b) the rate of interest applying to the Unpaid Sum during that first Interest Period shall be 2% higher than the rate which would have been applied if the Unpaid Sum has not become due.
15. Under Clause 16 of the Restated Agreement, the 2nd to 4th Defendants agreed to irrevocably and unconditionally jointly and severally (amongst others):-
(i) guaranteed to the Plaintiff punctual performance by the 1st Defendant of all of the 1st Defendant’s obligations under (amongst others) the Restated Agreement;
(ii) undertook with the Plaintiff that whenever the 1st Defendant did not pay any amount when due under or in connection with (amongst others) the Restated Agreement, to immediately on demand pay that amount as if it was the principal obligor.
16. Similarly, under the Personal Guarantee, the 5th Defendant (amongst others):-
(i) guaranteed to the Plaintiff that he shall, on demand by the Plaintiff pay or otherwise discharge all present and future obligations and liabilities of the 1st Defendant to the Plaintiff under or pursuant to (amongst others) the Restated Agreement[9] ; and
(ii) undertook with the Plaintiff that whenever the 1st to 4th Defendants did not pay or discharge their obligations under the Restated Agreement when they became due for payment or discharge, he shall immediately on demand do so, as if he was the principal obligor[10] .
17. Accordingly, the 2nd to 5th Defendants are also jointly and severally liable for the 1st Defendant’s obligations to pay interest under the Restated Agreement.
Calculation of Interest
18. For the purpose of this assessment, the Plaintiff has submitted tables with supporting documents setting out the total outstanding interest payable by the Defendants up to the date of this judgment with a breakdown for each of the Interest Periods of the following:-
(i) the amount of principal/interest owed and repaid;
(ii) the amount of principal in default/Unpaid Sum;
(iii) the applicable interest rates (whether standard or default rates); and
19. In his oral evidence, Mr Zhao also gave the court an explanation as to how the calculations were arrived at, with reference to relevant provisions in the Restated Agreement and supporting documents.
20. Mr Lau, counsel for the Plaintiff, also relied upon a “Conclusive Evidence Clause ”[11] in the Restated Agreement which provided that:-
“Any certification or determination by the [Plaintiff] of a rate or amount under any Finance Documents [which include the Facility Agreement] is, in the absence of manifest error, conclusive evidence of the matters to which it relates. ”
21. The prima facie validity of this type of Conclusive Evidence Clause (which is a common feature in loan agreements) has been repeatedly affirmed in authorities, see eg: Citibank, N.A. v Asiaglobe Trade Limited HCMP1760/2014 (unreported, 8 May 2015) at §§36-37; OCBC Wing Hang Bank Limited v Woo Koo Ping HCA2377/2014 (unreported, 20 July 2016) at §§14-18 and more recently in Gao Yanling v Credit Suisse AG, Hong Kong Branch [2024] HKCA 1083 at §§78-83.
22. In particular, as explained in OCBC Wing Hang Bank Limited at §16 and Gao Yanling at §83, a reference to “manifest error ” means an error which is “obvious or easily demonstrable without extensive investigation ”.
23. To date, the Defendants have not advanced any challenge against the accuracy of the Plaintiff's calculations, let alone one which demonstrates a “manifest error ”. In any event, on a broad brush basis and without engaging in any extensive investigation, it appears to me that the said calculations are not inconsistent with the terms of the Restated Agreement and the documentary evidence before me.
24. Accordingly, I am satisfied that the Plaintiff is entitled to claim interest in the sum of HK$599,534,039 up to the date of this judgment.
Costs
25. There is no reason why the Plaintiff should not be entitled to costs. The Plaintiff asked for summary assessment for costs of the whole action including costs of this assessment and all costs reserved on a party and party basis. Having considered the Plaintiff's Revised Statement of Costs dated 6 December 2024 and adopting a broad brush approach, I make a cost order nisi that the Defendants do pay the Plaintiff costs of this action (including the assessment of damages) summarily assessed in the amount of HK$180,000. Unless any party applies to vary the same by summons, the costs order nisi shall be made absolute 14 days from the date of this judgment.
Conclusion
26. I thus make the following Order:
(i) The 1st to 5th Defendants do pay to the Plaintiff the sum of HK$599,534,039 (being the amount of interest assessed up to the date of this judgment). Interest shall accrue thereafter at judgment rate until payment.
(ii) There be an order nisi that the Defendants do pay to the Plaintiff the costs of this Action, summarily assessed at HK$180,000. Unless any party applies to vary the same by Summons, the costs order nisi shall be made absolute 14 days from the date of this judgment.
27. It remains for me to thank Mr Lau for his helpful assistance.
(Val Chow)
Mr Martin Lau instructed by Lau, Horton & Wise LLP, for the Plaintiff
The 1st to 5th Defendants were unrepresented and absent
[1] See Clause 2.1.
[2] See Clause 6.1.
[3] See Clause 8.1.
[4] Hence, the rates of default interest are at 9% and 13% respectively.
[5] Defined under the Restated Agreement as “any sum due and payable but unpaid by an Obligor [i.e. the Defendants] under the Finance Documents [which includes the Restated Agreement and the Personal Guarantee] .”
[6] See Clause 8.3(a).
[7] Pursuant to Clause 9.1, the Interest Period shall be 3 months or any other shorter period agreed between the Plaintiff and the 1st Defendant, save that the Interest Period from 1 August 2015 to 30 September 2016 inclusive shall correspond with the relevant payment dates under Clause 6, namely, 29 February 2016, 31 May 2016 and 30 September 2016.
[8] See Clause 8.3(b).
[9] See Clauses 1.1, 2.1(a).
[10] See Clause 2.1(b).
[11] See Clause 29.2.