SUN HUNG KAI CREDIT LTD v. WONG PO LING

HCA 2282/2018

[2020] HKCFI 211

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2282 OF 2018

______________

BETWEEN

______________

______________

DECISION

______________

1.  This is the appeal of the Defendant (acting in person) against the Order dated 24 October 2019 made by Master S P Yip (the “Order”) for repayment by the Defendant of a loan (the “Loan”) and delivery of vacant possession of the property known as Flat A on 24^th Floor, St Louis Mansion, No 20 MacDonnell Road, Hong Kong (the “Property”) which the Defendant had mortgaged to the Plaintiff as security for the Loan.

2.  Having heard parties, and having dismissed for reasons set out below the Defendant’s application to file an affirmation in support of her appeal, I reserved my decision on the appeal, which I now hand down.

3.  The Defendant is the registered owner of the Property.

4.  The Plaintiff is a licensed money lender.  By a loan agreement dated 20 October 2017 (the “Loan Agreement”), the Plaintiff advanced to the Defendant the Loan.  It was in the sum of HK$1,500,000.  It was secured by a charge over the Property.  That charge was created by a Second Mortgage dated 23 January 2017 (the “Second Mortgage”) signed by the Defendant as mortgagor and the Plaintiff as lender as security for inter alia “all other moneys due or to become due from the [Defendant] to the [Plaintiff] ”.

5.  The Defendant has failed to repay the Loan.

6.  On 28 September 2018, the Plaintiff issued the Writ herein for repayment of the Loan and delivery of vacant possession of the Property pursuant to the terms of the Second Mortgage.

7.  On 19 November 2018, the Defendant filed her Defence.

8.  On 12 June 2019, Master Lui, upon application by the Plaintiff, struck out the Defence.  There has been no appeal by the Defendant against that order.  No further defence has been filed.

9.  On 3 September 2019, the Plaintiff issued its summons for judgment against the Defendant (the “Summons”).

10.  The first hearing of the Summons took place on 11 October 2019 before Master Lai.  The Defendant was absent.  Having given some directions on the further conduct of the application, Master Lai adjourned the matter to 24 October 2019. 

11.  On 24 October 2019, the hearing of the Summons resumed before Master S P Yip.  The Order shows that the Defendant was absent.  I have however been informed by Ms Yu, solicitor appearing for the Plaintiff, that the Defendant in fact did appear and opposed the application.  Having heard parties, Master S P Yip made the Order.

12.  On 5 November 2019, the Defendant filed her Notice of Appeal.  In it she asks for an Order that “the Charging Order on Unit 24A be set aside / removed, the Vacant Possession Order be set aside / suspended or stay executed if attached a Charging Order”.

13.  Whilst I note from the land search records of the Property that a number of subsequent Charging Orders have been registered against the Property, none of them were obtained by the Plaintiff.  Neither the Order nor this appeal has or can have anything to do with those Charging Orders.  In any event, on 11 October 2019 before Master Lai adjourned the Summons, he directed that notice of the Plaintiff’s application for judgment be given to all subsequent chargees.  That has been done.  None of them appeared before Master S P Yip when the hearing was resumed.

14.  The Defendant has failed to file any submissions prior to the hearing of the appeal. 

15.  The Defendant appeared in person before me and made submissions in support of her appeal.  She did not seek to dispute the Loan, nor the fact that she had defaulted in its repayment.  She made two requests, namely discharge of the Charging Orders, and suspension of the Order.

16.  In respect of the Charging Orders, the Defendant orally gave me certain details which she said led to their issue.  She also submitted that their existence could affect the distribution of any sale proceeds of the Property which the Plaintiff may obtain as a result of any sale which it may conduct.

17.  In my view, the existence of those Charging Orders, which are subsequent to the Second Mortgage, has no relevance to this Appeal.  They were not obtained by the Plaintiff.  The parties who obtained them are not before this Court.  This Court in the context of this present Appeal has neither jurisdiction nor basis to discharge them.

18.  In respect of the suspension of the Order, I note §88/5/11 of Hong Kong Civil Procedure 2020 Vol 1, wherein it is commented that:

“ The ordinary rule is that a mortgagee is entitled as of right (unless the mortgage deed provides otherwise) to possession of the mortgaged premises, and the court has no power to adjourn an application for possession or to make a suspended order, with the exception of an adjournment for a short time to afford to the borrower a chance of paying off the mortgage in full, which should only be granted if there is a reasonable prospect of such payment occurring…”

19.  The Defendant has placed before this Court no evidence to show that she has any “reasonable prospect” of paying off the Loan or the Second Mortgage.

20.  In the course of her submissions, the Defendant orally informed me that she had approached a bank for a loan to finance the repayment of the Loan.  She told me that she had been informed by that bank that she would be given an answer to her application in March 2020.  The Defendant sought from me leave to file an affirmation to that effect.

21.  I refused the Defendant leave to file any affirmation in that regard.  The reason, which I explained to the Defendant in court, was this.  What she told me in court, put at highest, was that she would be given an answer by the bank to her application in March 2020.  The Defendant frankly told me that she did not know what that answer was going to be.  Her application could be refused by the bank.  Hence, even if I were to grant her leave to file an affirmation on those facts, she would not have been able to show any “reasonable prospect” of repaying the Loan.  Granting her leave would therefore have been a futile exercise.  On that basis, I refused her leave to do so.

22.  In the circumstances, I have come to the same conclusion as the learned Master had in respect of the Summons, and see neither reason nor basis to upset the Order.  I dismiss the appeal with costs on an indemnity basis (as provided in §22(ii) of the Second Mortgage and §17.2 of the Loan Agreement).

23.  Ms Yu has supplied to the Defendant and this Court a Statement of Costs.  The total amount of the costs of this Appeal, assessed on an indemnity basis, is HK$21,490.67.  I have considered the same.  I am of the view that that sum is a reasonable one.  I summarily assess the costs of this Appeal to be such, and order that that sum of HK$21,490.67 be paid by the Defendant to the Plaintiff within 42 days from the date hereof.