YU LAI WA v. WONG TAK CHI

DCCJ 2075/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2075 OF 2015

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JUDGMENT

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The Claim

1.  The plaintiff claims against the defendant for payment of two respective sums of HK$150,000 (“the 1^st sum”) and HK$160,000 (“the 2^nd sum”) under two dishonoured cheques[1] together with interest and costs.  The first cheque was dated 8 March 2015 (“the 1^st cheque”), and the second one 8 April 2015 (“the 2^nd cheque”).

The plaintiff’s case and evidence

2.  The crux of the plaintiff’s case and evidence is that she was a sole proprietor of a small restaurant named as “鈞豪雞煲” (in Chinese) at Yan Ching Street, Tuen Mun (“the plaintiff’s restaurant”).  She first came to know about the defendant in about mid-2013 when the defendant visited her restaurant as customer.  She knew that the defendant supplied dried seafood and bird nest to his customers in Mainland China.  The plaintiff also said that she had good impression of the defendant as he was very courteous to her and would occasionally give her some fresh and dried seafood, and gradually they became friends.

3.  Among others, she lent two loans to the defendant – one in the total sum of HK$150,000 on 12 September 2014 (“the September loan”) and another in the total sum of HK$160,000 on 17 October 2014 (“the October loan”) for the defendant’s business use and renovation of one of his shops situated at Sam Shing Fish Market, No.1 Sam Shing Street, Tuen Mun.

4.  The two loans were evidenced by two IOUs written by the defendant on those two dates, which repayment was secured by rental of Shop A at No.1 Sam Sheung Street Tuen Man leased out by the defendant (“Shop A”).

5.  The first IOU (“the 1^st IOU”)[2]reads as follows:-

“

借據

本人黃德志 ID No E764511(6) 現借喻麗華港幣壹拾陸萬元正。本人承諾2015年3月10日前清還此筆款項立下此據。本人同意將香港新界屯門三聖街1號A舖的租金作為抵押。如有任何糾紛可在深圳市福田人民法院審理訴訟。[3]

借款人: 黃德志
2014年9月12日”

6.  The second IOU (“the 2^nd IOU”)[4] reads as follows:-

“

借據

本人黃德志 ID E764511(6) 現借喻麗華港幣壹拾陸萬元正。本人承諾2015年4月16日前清還此筆款項立下此據。本人同意將香港新界屯門三聖街1號A舖的租金作為抵押。如有任何糾紛可在深圳市福田人民法院訴訟。

借款(人): 黃德志
2014年10月17日”

7.  In respect of the September loan, the plaintiff gave a sum of HK$53,000 in cash to the defendant first at her restaurant on 12 September 2014 where a receipt[5] was signed by the defendant there, which read thus:-

“

收條

現已收到喻麗華港幣伍萬叁仟元正現金。

簽收黃德志
2014年9月12日
(黃德志)”

8.  Subsequently, the plaintiff attended a branch of Bank of China (Hong Kong) Ltd at Tuen Mun (“the BOC Branch”) and deposited another sum of HK$97,000 in the defendant’s bank account on a later occasion on the same day as per the defendant’s request. After that, they met again at a restaurant called “強記茶餐廳”in Chinese (“Keung Kei”) where the defendant signed the 1^st IOU.  The defendant wrote down that he had borrowed HK$160,000 from the defendant in the 1^st IOU notwithstanding he only received HK$150,000 in cash because he had earlier promised to pay HK$10,000 as tea money to the defendant for borrowing the loan from her.  Apart from that, the defendant also agreed to transfer his car registration number of DU7778 to the plaintiff which she liked it very much since she considered it to be a lucky number. 

9.  Subsequently, the defendant did sign the necessary documents to transfer his car registration number to the plaintiff and on 13 October 2014 pay the tea money by way of cheque of $3,000 and cash of HK$7,000 to the plaintiff.

10.  In respect of the October loan, the plaintiff at first was only prepared to lend HK$120,000 to the defendant on 17 October 2014.  But after being persuaded by the defendant to lend him more, she then lent him another two sums of HK$20,000 on two later occasion on the same day.  On that day, in order to persuade the plaintiff to lend him the two further sums of HK$20,000, the defendant took the initiative to draw and hand over to her the 1^st cheque and the 2^nd cheque which were post-dated by him at 8 March 2015 and 8 April 2015 respectively.   After that at the plaintiff’s restaurant, the defendant signed the 2^nd IOU and a receipt[6] which reads as follows:-

“

收條

現已收到現金港幣壹拾陸萬元正喻麗華借俾我的。

簽收黃德志
2014 10月17日”

11.  The plaintiff also testified at trial that the defendant was owner of three shops at Sam Shing Street and one of them was Shop A.  She was looking for suitable premises for opening a branch for her restaurant at the time and the defendant knew about it.  Before she lent the September loan to the defendant, she had been discussing different options for co-operating with the defendant for that purpose.  One option being that the plaintiff could rent a shop of him for opening her branch restaurant.  Further, apart from giving her HK$10,000 as tea money and transfer his car registration number FU7778 to her for the September loan, he also promised to use Shop A’s rental income as security for both loans.   

The defendant’s case and evidence

12.  In gist, the defendant said that he was introduced to the plaintiff by his friend Mr Chan Wing Cheung (陳永祥) (“Chan”) to borrow money from the plaintiff since he was in financial difficulty at the time.  He told Chan that he needed HK$100,000.  Under Chan’s arrangement, the defendant as accompanied by Chan met the plaintiff and her husband at Fulum restaurant at Central Square Tuen Mun (“Fulum restaurant”).  The defendant did not know the plaintiff before that meeting.  The terms of repayment agreed at the meeting was that HK$100,000 shall be repaid within 6 months with monthly instalment interest of HK$10,000. So, the total sum repayable to the plaintiff 6 months later (on 10 March 2015) was HK$160,000.  The plaintiff agreed to accept him transferring his car registration number of DU7778 to her as payment of one month of interest.

13.  Apart from signing the 1^st IOU for the above loan to the plaintiff at Fulum restaurant, he also handed over the 1^st cheque to the plaintiff there as security for repayment as per the plaintiff’s request.  The cheque was drawn in the sum of HK$150,000 because one month’s interest (as represented by the consideration for his agreed transfer of car registration number) has already been deducted from the total of HK$160,000.  The plaintiff together with her husband then attended the BOC Branch and deposited a sum of HK$97,000 into his account, and gave a copy of the deposit slip to him.  The plaintiff retained the balance of HK$3,000 as the alleged commission payable to Chan.

14.  Around the end of September or early October of 2014, the plaintiff came to his shop at Sam Shing Street to ask for the documents for the transfer of DU7778.  On that occasion, she also told him that the interest charged for the September loan was over 60% per annum which is against the law.  Therefore the plaintiff asked him to write a receipt of HK$53,000 so as to create a false appearance to the outside world that she had actually lent HK$150,000 to him, and thus he could not later accuse her of illegal lending.[7] He signed the receipt of HK$53,000 as per her request accordingly.[8]

15.  The defendant further said that the HK$10,000 which the plaintiff claimed as tea money was in truth the first instalment of interest for the loan paid by him to the plaintiff on 13 October 2014.

16.  In respect of the October loan, the defendant contacted Chan with a view to borrow another loan of HK$100,00 from the plaintiff.  He was told by Chan that the plaintiff and her husband agreed and told him to go to the plaintiff’s restaurant to sign the relevant documents.  He also made a phone called to the plaintiff over the phone for such purpose and the plaintiff agreed to lend him HK$100,000.  On 17 October 2014, he went to the plaintiff’s restaurant, where the plaintiff told the defendant that he had to repay the HK$100,000 within 6 months, and the interest would be HK$10,000 per month like the loan lent to him in September. 

17.  However, before he actually received the loan, he already signed another IOU for the sum of HK$100,000 and handed it over together with the 2^nd cheque as security to the plaintiff as per the latter’s request.  But after he had done so, the plaintiff only gave him HK$20,000 in cash on that day, and another HK$20,000 on the following day.

18.  On 20 October 2014, the plaintiff further told him that since her business partner refused to lend him any more money, she could no longer do so.   In other words, the defendant’s case is that he only received HK$40,000 from the plaintiff notwithstanding he had signed the 2^nd IOU and corresponding receipt acknowledging that he had borrowed and received HK$160,000 from the plaintiff.  The defendant further said that the plaintiff asked him to treat the loan at HK$40,000 and repayable with monthly interest of HK$4,000 per month instead.

19.  Given the aforesaid, the defendant contends that the loans lent to him in September and October 2014 respectively are both illegal as the effective interest rate for each loan is over 60% per annum in contravention of section 24 of the Money Lenders Ordinance (Cap 163) (“the MLO”).  They are therefore unenforceable against him.

Overview of the issues in dispute

20.  In light of the parties’ contentions, the issues in dispute are largely factual.  The parties’ factual accounts are diametrically opposite to each other.  In my judgment, the proper determination of the subject dispute would ultimately hinge on which party’s account is more credible and would be accepted by this court.

21.  To resolve these factual issues, I have carefully surveyed all the evidence and pay particular attention to the inherently probabilities or improbabilities of each case, and analysed the evidence of each side against the totality of the evidence.

Analysis

22.  After carefully considered all the evidence, I prefer the plaintiff’s case and evidence on the September loan and October loan and reject the defendant’s for the following reasons.

23.  Overall speaking, the defendant is not a credible or reliable witness.  His case is seriously contradicted by contemporaneous documents, and his evidence is permeated with material discrepancies.  By contrast, the plaintiff’s case is more credible as compared with the defendant’s.  Her evidence is overall consistent, and corroborated by important documentary evidence, viz the two IOUs and the corresponding receipts which were all signed by the defendant voluntarily and knowing full well of their contents.

Improbability for the defendant to issue the 1^st cheque on 12 September 2014

24.  First, the defendant said in his witness statement and testified at trial that he gave the 1^st cheque (with cheque number 871991) to the plaintiff as security as per the latter’s request at Fulum restaurant on 12 September 2014.[9]  Chan also testified at trial he saw the defendant signed an IOU and a cheque for the loan at Fulum restaurant seeking to corroborate the defendant’s evidence.[10]  However, the copy of the 1^st cheque produced has some small prints at its left hand margin stating “C&C 22/09/14”.  The plaintiff in her evidence in chief said that she had consulted a bank officer from Standard Chartered Bank who told her that the small prints indicated the date (ie 22 September 2014) when the corresponding cheque book was issued.  In other words, it was impossible for the defendant to give the 1^st cheque to the plaintiff on 12 September 2014.  In my view, the defendant cannot grapple with this matter.

25.  To make good this point, Miss Alison Choy, counsel representing the plaintiff at the trial, submits that the defendant answered at the beginning of the cross-examination that he would certainly not randomly pick one cheque out of his cheque book and tear it off, and further agreed that he would only use the cheques one after another consecutively.  However, the cheque stub produced shows that the cheque of HK$3,000[11] which the defendant issued on 13 October 2014 (which he allegedly used to partially repay one month’s interest for the money he borrowed in September 2014) is with cheque number 871987, which preceded the 1^st cheque number ‘871991’.  In fact, the 2^nd cheque number is ‘871992’ which immediately follows from the 1^st cheque number, and this corroborated the plaintiff’s case that the two cheques were actually given to her in one go by the defendant on 17 October 2014.

26.  When being pressed for an explanation as to why contrary to his usual practice, a few cheques were skipped when he allegedly wrote the 1^st cheque on 12 September 2014, the defendant could not answer, and did not know how to respond.  

27.  Apart from that, it also looks incongruent that a lender would ask his borrower to sign an IOU for HK$160,000 but with a post-dated cheque of HK$150,000 served as security instead. This is even more so when the cheque would somehow be dated as 8 March 2015 whereas the repayment date was stated to be 10 Mach 2015 in the corresponding IOU.  I can see no satisfactory reason offered by the defendant on these matters.

28.  In light of the aforesaid, I also reject the defendant’s account that the 1^st cheque was given to the plaintiff on 12 September 2014.  Instead, I accept the plaintiff’s account that the two cheques were in fact given to her in go one by the defendant on 17 October 2014.

The defendant’s account on signing the receipt for HK$53,000 is incredible

29.  Second, the defendant’s such account is likewise incredible.  According to the evidence before this court, the defendant was 58 years old at the material times and he had been operating his business for quite some time.  He also had experience of borrowing money from others in the past.  In fact, he was a discharged bankrupt.  An order of discharge of his bankruptcy dated 17 October 2006 was exhibited in his witness statement.   

30.  Against such a factual setting, it sounds incredible that he would simply sign the receipt for HK$53,000 enabling the plaintiff to cover up her ‘crime’ of lending at excessive interest just as he was told to do so.  It is not his evidence that he was coerced by anybody to sign the receipt.  Rather, the defendant said in his witness statement that since he did not intend to overturn the earlier loan agreement, he signed such receipt.  

31.  However, such carefree or submissive attitude he depicted in his witness statement was in stark contrast with his cautious manner in answering questions in court as observed by this court.  

32.  Further, according to his own case, the defendant had already obtained the loan of HK$100,000 (with HK$3,000 deducted for the alleged commission to Chan) on 12 September 2014, I see no sound incentive or compelling circumstances for the defendant to sign the receipt by then to collude with or otherwise assist the plaintiff to create a false instrument to cover up the alleged illegal loan.

33.  More fundamentally, such story is inherently improbable because it would presuppose the need for the plaintiff to cover up her illegality and yet the IOU for the September loan stated that the defendant borrowed HK$160,000 from the plaintiff without mention of any interest charged on such loan[12]. Nothing illegal is discerned on the face of such IOU.  

34.  As a matter of general observation, the more serious an allegation one party is making against the other, the more cogent evidence is expected from him to substantiate such allegation just like the present one as made by the defendant accusing the plaintiff of committing criminal acts of lending at excessive interest and requiring him to sign a false instrument as an attempt to deceive the outside world.  See In re H & Ors (minors) [1996] AC 563, per Lord Nicholls at p 586H, as applied by the Hong Kong Court of Final Appeal in Nina Kung v Wang Din Shin (2005) 8 HKCFAR 387, at paras 182 to 184.

35.  In this light, irrespective of which perspective one looks at this matter (from the defendant or the plaintiff), I do not find the genesis of the receipt of HK$53,000 according to the defendant’s case can come up to the cogent proof as required under the circumstances of this case. 

36.  Mr Tse Yin Fung, solicitor representing the defendant, submits that it is commercially unsound for the plaintiff to lend HK$160,000 without charging interest.  However, from a certain perspective, the tea money of HK$10,000 could be viewed as de facto interest.  The transfer of the car registration number which the plaintiff said she liked very much could provide an impetus for her to lend the money to defendant.  Furthermore, people have different motives to lend in different contexts.  In my view, the urge for the plaintiff to open a branch for her restaurant at the material times and the defendant may be able to lease one of the shops to her for that purpose (as she had testified at trial) could also provide another incentive for her to lend the September and October loans to the defendant in this case. I shall return to these matters later when it comes to the further discussion of the plaintiff’s case below.

The defendant’s change of stance on the rental as security for loans

37.  Third, the defendant also materially changed his stance of using Shop A’s rental as security for the loans.  In his witness statement at para 11, he categorically stated that (at Fulum restaurant) he deliberately let the plaintiff know about the fact that he was receiving monthly rental of HK$25,000 for Shop A in order to increase his chance of obtaining the loan from the plaintiff.

38.  However, when it came to trial, after listening to the plaintiff’s evidence on their discussion of co-operation plan and one option was to lease one of his shops enabling her to operate her branch restaurant, he said that there was certain a governmental policy in place pertaining to his shops which prevented him from changing any of them into a restaurant.  He also said for the first time that he had interests in the business in Shop A as well.  The Chinese words he used are “我有份”. 

39.  Upon further cross-examination, he even denied receiving any “rent” from Shop A. He testified that he received some referral/agency fees, bonuses and profits in respect of these shops instead.  He said he had mistaken these monies as ‘rent’ when he wrote the IOU.  In his own words in Chinese, his evidence is “我誤會咗叫租金” and “所謂租其實係代理費”.  I do not find such explanation satisfactory or believable.  ‘Rent’ and ‘agency fee’ or profits arisen out of a business are obviously different in nature, and should not get easily mixed up for an experienced businessman like the defendant.  In my view, such last minute change of stance was made purposefully by the defendant to ‘discredit’ the plaintiff’s evidence on her co-operation plan with him: if none of his shops can be leased out for operating a restaurant, it would then be unlikely for the plaintiff to discuss with her about the co-operation plan as she claimed.  However, giving such inconsistent evidence in the way he did would just produce the counter effect of further worsening his overall credibility.

Incredibility of the defendant’s account on signing IOUs before receipt of loans, etc.

40.  Fourth, it does not make good sense that the defendant would be prepared to sign on the IOUs before he actually received any money from the plaintiff in the circumstances of this case.  This is especially so for his account of the loan borrowed in October 2014.

41.  According to the defendant, although he only obtained HK$40,000 from the plaintiff ultimately, he did not even bother to ask the plaintiff to correct the amount lent to him as described in the 2^nd IOU, or otherwise write another IOU with the actual amount borrowed to replace the earlier one after he had obtained the second sum of HK$20,000 from the plaintiff on 18 October 2014 and been told that the plaintiff would not lend further sum to him as originally promised. 

42.  Neither did he ask for the return of the old cheque of HK$160,000 for this second loan, and seek to substitute it by a new cheque reflecting the correct amount borrowed (together the corresponding amount of interest to be repaid) which should be in the total of HK$64,000 only according to his case.

43.  By doing so, if what the defendant said were true, the defendant would be subject to the risk of repaying 2.5 times[13] of what he should be required to repay if the plaintiff insisted for the full repayment of the amount as stated in the 2^nd IOU.  Again this would naturally cause one to raise one’s eyebrows when he on the other hand said that he was in such a financial difficulty at the material time.

44.  Also, the defendant strangely said at para 14 of his witness statement that after the plaintiff indicated her refusal to lend further sum to him on top of that HK$40,000, he asked the plaintiff for the return of the 1^st IOU and the 1^st cheque instead.  And yet, he has not fully repaid the first loan by then even according to his own case. 

45.  Apart from the aforesaid, the defendant said that after 20 November 2014, he had on a few occasions (數次) asked the plaintiff to give him back the post-dated cheques and IOUs of both loans[14].  However, after his cross-examination, when this court asked the defendant what these ‘few occasions’ meant, he said that he did so immediately after he had obtained the receipt for his payment of HK$100,000 from the plaintiff on 20 November 2014[15] which states that:-

“

收条

今收到黃德志現金壹拾萬元正。

s.d.
2014-11-20”

When this court further asked him whether he requested the plaintiff again for the return of the IOUs and the post-dated cheques, his answer is ‘No’.  Thus, this is a clear discrepancy in another material aspect of his evidence.

46.  In these circumstances, I also find the defendant’s excuse given in his witness statement that he did not further pursue such matter with the plaintiff after 20 November 2014 because he was busy with his work was simply incredible.   The fact of the defendant not getting back the 1^st IOU and the 1^st cheque or the 2^nd IOU and the 2^nd cheque from the plaintiff despite his payment of HK$100,000 to her on 20 November 2014 is telling.   In my view, this tends to show that the defendant had in fact not fully repaid the money he borrowed from the plaintiff in September 2014 as he claimed and that his account on the amount of loan borrowed from the plaintiff in October 2014 was also far from the truth.   

47.  For, under normal circumstances, the payment of HK$100,000 should prima facie be made by the borrower in exchange for the 1^st IOU and the 1^st cheque on 20 November 2014 if such payment were really intended to be the full repayment of the loan borrowed in September 2014 as the defendant contends[16].  It would also be the prime moment for the defendant to ask for the return of the 2^nd IOU and the 2^nd cheque for correction or substitution if they did not reflect the actual amount borrowed.  Oddly, and again without being able to give any satisfactory explanation, the defendant as an experienced businessman would somehow ask for the return of these documents only after he made the payment of HK$100,000 to the plaintiff.  And, when the plaintiff told him she left the documents at home, he would not insist for getting them back the same day or bother to do so in some other day. 

48.  To add to his incredibility, the defendant should be fully conscious of the fact that he had no other evidence to show that he had made full repayment of the loan made in September 2014 as he contends, nor any evidence to show the plaintiff had only lent him HK$40,000 despite the 2^nd IOU and receipt indicating she had lent him HK$160,000 in October 2014 apart from his bare assertions. Although he had arranged Chan to attend trial to give evidence in a bid to corroborate his account on these loans, Chan’s evidence turns out to be incredible and unreliable as shall be discussed further below.

49.  In these circumstances and given his business experience and background, I find the defendant’s evidence of only borrowing HK$40,000 from the plaintiff in October 2014 (notwithstanding an IOU and a corresponding receipt signed by him clearly acknowledging a loan of HK$160,000 borrowed and received by him) totally incredible.

50.  For completeness sake, I do not lose sight of the fact that the defendant could repay the loan the latest by 10 March 2015 according to the 1^st IOU.   However, the evidence before me do not suggest that it would be implausible for the defendant to make such early partial repayment under the circumstances of this case in the particular light of the aforesaid analysis.

Chan’s evidence

51.  Chan attended the trial hearing to give evidence for the defendant.  Having carefully considered his evidence against the whole of the evidence of this case, as said, I do not find Chan to be a credible or reliable witness.  First and foremost, his evidence of seeing the defendant signed the 1^st cheque for borrowing the loan from the plaintiff at Fulum restaurant could not be true in light of the above analysis.  Apart from that, when I observed the way he gave evidence in court, he also tried to distance himself from knowing about what was exchanged between the defendant and the plaintiff at Fulum restaurant.  He said all four of them sat together in a round 4-person table, and yet he had no idea whatsoever about what was said between the plaintiff and the defendant even that gathering last for 2 hours.  Under cross-examination, he further said on 12 September 2014 after the plaintiff got out of the BOC Branch, he did not pay attention as to whether the plaintiff gave the defendant any bank deposit slip.  Whereas, he clearly stated at para 9 of his witness statement that the plaintiff showed the defendant the bank deposit slip after she came out of the bank.  When he was asked by Ms Choy to explain for such inconsistency, he was unable to offer any explanation.

52.  In these circumstances, I also rejected Chan’s evidence insofar as it is inconsistent with the plaintiff’s account, and do not find his evidence to be of any corroborative value to support the defendant’s case.

The plaintiff’s account is inherently probable and overall consistent

53.  On the other hand, it is observed that, subject to the matter on the payment of HK$100,000 made by the defendant on 20 November 2014 to be further discussed below, the plaintiff’s testimony given in court on the September loan and the October loan is overall consistent and matches with the circumstantial evidence of this case.

54.  To begin with, the plaintiff testified at the trial that apart from discussing over the matter of borrowing HK$150,000, the defendant also discussed with her about the co-operation plan involving the option of renting one of the defendant’s shops for running her restaurant branch in detail at Fulum restaurant.  Under the normal course of things, one would not expect much time be taken up just for the signing of the 1^st IOU and the 1^st cheque and the discussion of the straightforward terms for repayment of the loan according to the defendant’s account.  As such, the plaintiff’s account would better tally with the undisputed fact of about 2 hours spent by the parties for their discussion in Fulum restaurant.  In fact, the defendant also agreed under cross-examination that the plaintiff did mention opening a “食坊” and did talk about her own business to him.  

55.  Further, I agree with Ms Choy’s submission that the defendant’s case on the transfer of car registration number does not fit with the nature of discussion or the parties’ relationship at the time if the parties just met each other for the first time at Fulum restaurant as alleged by the defendant.  Having surveyed the surrounding circumstances, the transfer of car registration number (as an inducement for the plaintiff to lend the September loan to the defendant) would more likely be a matter between friends or acquaintances, rather than between two strangers met for the first time for the sheer business of lending and borrowing of money.  

56.  As an incidental observation, if the transfer of car registration number really counted as payment of one month’s interest, then the defendant should in the normal course of things ask the lender to put this into writing.  But this was not done and sounds unlikely especially when the defendant said the plaintiff had been a stranger to him before they met at Fulum restaurant.  There is nothing to prevent the defendant from asking the plaintiff to do so.  The defendant could offer no reasonable explanation for that.

57.  Looking the matter from the lender’s perspective, the defendant had not signed any document as required for the transfer of car registration number at Fulum restaurant yet.  It would be unlikely for the lender to ask the defendant to write the post-dated cheque at HK$150,000 only (as alleged by the defendant) whereas the loan amount as stated in the 1^st IOU remains to be HK$160,000.

58.  Further, if the plaintiff just attended Fulum restaurant for the sole business of lending money to the defendant as depicted by the latter, the plaintiff could simply have brought along the cash to Fulum restaurant, and asked the defendant to sign a receipt on the spot if she desired written proof of the loan.  There was no need for her to take such a convoluted way to accompany the defendant to the BOC branch and deposit the money into his account and then make a copy of the deposit slip and the relevant page of his bank passbook.  Especially, if she were really lending a loan by charging excessive interest against the law at the time, it would do her no good to hold a deposit slip showing that she actually ‘lent’ HK$97,000 whereas the 1^st IOU (which she had asked the defendant to sign earlier the same day) stated clearly that the defendant had borrowed HK$160,000 from her.

59.  In light of the aforesaid, the plaintiff’s evidence that she lent HK$150,000 to the defendant by giving him the two separate sums of HK$53,000 and HK$97,000 on two different occasions on 12 September 2014 would also be more possible than the defendant’s account.

60.  According to the plaintiff’s testimony given in court, she originally intended to lend HK$50,000 to the defendant after the discussion of the matters on the loan and the co-operation plan at Fulum restaurant.  After the plaintiff, her husband, Chan and the defendant left Fulum restaurant, they altogether went back to the plaintiff’s restaurant. Eventually, the plaintiff gathered HK$50,000 cash in her restaurant, and HK$3,000 extra from her wallet and gave them to the defendant.  

61.  However, the defendant impressed upon her further that their co-operation plan would work, and offered her HK$10,000 as tea money, and that she could take the car registration number for free.  Apart from those, the defendant also repeated that he would “pledge” his rental income from Shop A as security for repayment of the loan.  Ultimately, she agreed to lend him HK$97,000 more making the loan in the total sum of HK$150,000.  Thus, she went back home to obtain more cash and went to the BOC branch to deposit HK$97,000 into the defendant’s account.  Before the parties left the plaintiff’s restaurant, the defendant had signed a receipt for the HK$53,000 and gave it to the plaintiff there.

62.  The plaintiff also gave evidence under cross-examination that after she had deposited the further sum of HK$97,000 into the defendant’s account, she went to Keung Kei to meet up the defendant and Chan where the defendant signed the 1^st IOU.  There, photocopies were also taken of the relevant page of the defendant’s bank passbook (indicating the deposit of HK$97,000) and the corresponding deposit slip.

63.  Mr Tse sought to criticise the plaintiff’s case on the co-operation plan as testified in Court is incredible by saying that it was not mentioned in her pleadings or witness statement.  Such kind of criticism would be forceful in some appropriate circumstances. However, each case has to be decided on its own merits, and in this case, after considering the evidence in their totality, I think the plaintiff’s account on the parties’ discussion of the co-operation plan for opening the plaintiff’s restaurant branch at Fulum restaurant prior to the payment of the loan do have some grain of truth.  In particular, it is observed that the plaintiff was able to give much detail about the co-operation plan in a consistent manner despite vigorous cross-examination by Mr Tse.  It would appear unlikely for the plaintiff to make this all up in the witness box.   

64.  On the other hand, it is observed there are some discrepancies between the plaintiff’s testimony given in court and her relatively brief account on the two subject loans given in her witness statement.  She also omitted to mention about the tea money in her witness statement.  But these blemishes of the evidence could not detract the core view of this court that more likely than not the defendant has indeed received two separate sums of HK$53,000 and HK$97,000 from the plaintiff on 12 September 2014 making a total of HK$150,000 for the September loan, and another three separate sums of HK$120,000, HK$20,000 and HK$20,000 on 17 October 2014 for the October loan.  This is especially so given the incredibility of the defendant’s account on the two loans, which cannot in my view overcome the contemporaneous documentary evidence produced by the plaintiff as discussed above in support of these two loans. 

The plaintiff’s receipt of HK$100,000 from the defendant in November 2014

65.  It is undisputed that the plaintiff received a sum of HK$100,000 from the defendant on 20 November 2014 and issued the receipt (as referred to in para 45 above) to him on the same day.  According to the defendant, it is the repayment of the principal of HK$100,000 he borrowed from the plaintiff in 12 September 2014.   On the other hand, the plaintiff testified in court that this represented repayment of two earlier loans of HK$50,000 each she had lent to the defendant in July 2014.  In her witness statement, she also mentioned that she had lent monies to the defendant prior to the September loan, and the amount of these loans had accumulated to HK$100,000.

66.  In light of the quality and state of evidence before this court, I do not find the plaintiff can provide sufficient evidence to discharge her burden of proof to show more probable than not that there was indeed such prior loans accumulated to HK$100,000.  In particular, I find no documentary proof, such as those as similar to the IOUs or receipts for the September loan and the October loan, to support her allegation of such prior loans.

67.  I find that the sum of HK$100,000 was paid by the defendant as partial repayment of the September loan the plaintiff had lent to him earlier.   For avoidance of doubts, I however do not accept the defendant’s account that such payment represent the full repayment of the loan he borrowed from the plaintiff on 12 September 2014 for reasons as discussed in paras 45 to 50 above.

68.  As such, the plaintiff has to account for this sum of HK$100,000 to the defendant, and it should be set off against the September loan as its partial repayment.

Findings

69.  In the premises, I do find that the plaintiff lent a total sum of HK$150,000 to the defendant on 12 September 2014 and another total sum of HK$160,000 on 17 October 2014.  The two cheques in question were drawn by the defendant in favour of the plaintiff in relation to the repayment of these two respective sums.

70.  I also find that the defendant paid a sum of HK$100,000 to the plaintiff on 20 November 2014 as partial repayment of the September loan.  Such sum of HK$100,000 should also be set off against the amount payable under the 1^st cheque.  The full amount of HK$160,000 under the 2^nd cheque is due and payable to the plaintiff. As such, the total outstanding balance remains due and payable by the defendant to the plaintiff should be HK$210,000[17] instead of HK$310,000 as claimed.

71.  For completes sake, I should add that by viewing the evidence as a whole, and given the fact that the plaintiff was operating a restaurant at the material times, it is not implausible that she had the available cash at her restaurant and home for lending the money of the subject magnitude to the defendant in relation to the 1^st and 2^nd loans.

72.  As for the tea money of HK$10,000 and the transfer of car registration number DU7778, I hold that they were offered by the defendant as the consideration in exchange for the plaintiff lending the September loan to him.  I find that HK$10,000 out of the figure of HK$160,000 as stated in the 1^st IOU in truth represents the tea money as promised by the defendant to pay to the plaintiff as part of the aforesaid consideration.

73.  However, there is no or no clear evidence of the actual monetary worth of the car registration number. As explained earlier, I have rejected the defendant’s evidence that it would count as one’s month interest of HK$10,000. 

74.  In these circumstances, it is my holding that neither the September loan nor the October loan has contravened section 24 of the MLO as per the defendant’s contention or otherwise.

Other matters

75.  For completeness sake, I should also mention that after the close of evidence for the hearing, the plaintiff filed a Notice to Act in Person on 25 October 2016, but before that both parties had already lodged their respective written closing submissions with the court on 19 October 2016.  On 26 October 2016, the plaintiff lodged with this court some additional materials.  At the hearing of closing submission on 28 October 2016, the plaintiff was not legally represented, and this court made it clear that she was not allowed to adduce any further evidence after the close of evidence.  However, after the hearing of the parties’ closing submission, the plaintiff made another attempt to adduce further evidence by filing an affirmation together certain exhibits on 14 November 2016.  On 29 November 2016, this court issued a direction to the parties indicating that it refused to allow any party to adduce any further evidence after trial.

76.  For avoidance of doubts, this court must make it clear that all these further materials lodged or filed with the court by the plaintiff are inadmissible evidence.  All of them are disregarded and none of them has affected the reasoning or conclusion reached in this judgment.

Conclusion

77.  Due to the above reasons, judgment is entered in favour of the plaintiff in the sum of HK$210,000.  The defendant is therefore ordered to pay the plaintiff forthwith the sum of HK$210,000 together with interest accrued thereon (as allowed by this court) at the prevailing HSBC best lending rate plus 1% from 17 April 2015 up to the date of judgment and thereafter at judgment rate until full payment.

Costs

78.  Costs should normally follow the event.  I also order by way of costs order nisi that the defendant shall pay the plaintiff’s costs of this action, to be taxed if not agreed, with certificate for counsel (for Ms Choy’s court attendance on 6, 7 and 8 September 2016).  The costs order nisi shall become absolute in the absence of application to vary the same within the 14 days from the date of this order.

79.  Lastly, it remains for me to thank Ms Choy and Mr Tse for their assistance rendered to the court.