KONEW CAPITAL INTERNATIONAL LTD v. TSE KWAN HUNG AND ANOTHER

DCMP 959/2025

[2025] HKDC 901

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 959 OF 2025

--------------------------------------

BETWEEN

--------------------------------------

------------------------------

REASONS FOR JUDGMENT

------------------------------

1.  In respect of the Originating Summons filed on 13 February 2025, on 27 May 2025, I gave Judgment in terms of the draft Order presented to me by Ms Ma, solicitor for the Plaintiff, with some amendments I indicated during the hearing. I now give my reasons for my Judgment.

BACKGROUND

2.  The Plaintiff is a licensed money lender. The 1^st Defendant and the 2^nd Defendant own a property known as Flat E1, 14/F, Block E, Greenland Garden, No 15 Shek Pai Tau Road, Tuen Mun, New Territories, Hong Kong (“the Property”) as tenants in common in equal shares.

3.  On 9 October 2023, the Plaintiff and the 1^st Defendant entered into a loan agreement (“the Loan Agreement”), by which the Plaintiff agreed to lend a sum of HK$300,000.00 (“the Loan”) to the 1^st Defendant for a term of 96 months at the interest rate of 35.76% per annum.

4.  On the same day, the Plaintiff and the 1^st Defendant executed a Second Mortgage (“the Second Mortgage”), by which the 1^st Defendant charged his interests of and in the Property to the Plaintiff to secure the repayment of his indebtedness to the extent of HK$700,000.00.

5.  The Plaintiff’s case is that the 1^st Defendant defaulted to make the monthly repayments due to the Plaintiff since 5 December 2024.

6.  After the Plaintiff’s solicitors had issued a letter of demand to the 1^st Defendant on 10 January 2025, the 1^st Defendant made two partial repayments on 21 February 2025 and 20 March 2025 respectively. However, he defaulted in making any other repayments.

EVIDENCE

7.  The Plaintiff has filed an Affirmation of Lee Oi Ying on 23 April 2025 (“Lee’s Affirmation”) in support of its application.

8.  I am satisfied that the requirements under O 83A of the Rules of District Court have been complied with.

9.  I am also satisfied that the requirements under O 88 have been complied with.

10.  Having considered Lee’s Affirmation, I am satisfied that the 1^st Defendant has defaulted in repayment of the Loan since 5 December 2024, except for the two sums referred to in paragraph 6 above. Pursuant to Clause 8(a) of the Loan Agreement, the Plaintiff is entitled to deem the outstanding balance of the Loan and interest payable to be immediately due and payable, and upon serving a written notice to demand the 1^st Defendant to repay the same within 7 days and the 1^st Defendant’s failure to do so, the Plaintiff is entitled to commence legal proceedings against the 1^st Defendant for the recovery of the entire outstanding sum.

11.  I am therefore satisfied that the Plaintiff is entitled to a judgment for the sum of HK321,304.10 together with interest on the sum of HK$289,033.30, which is the outstanding principal, at the rate of 35.76% per annum from 23 April 2025, which is the date of Lee’s Affirmation, at a daily rate of HK$283.17 until payment.

12.  I am satisfied that the Plaintiff is entitled to take possession of the Property under Clauses 7.1 and 8 of the Second Mortgage on the 1^st Defendant’s failure to comply with the Plaintiff’s demand for repayment of the Loan.

13.  As to the application for an order for sale under section 6 of the Partition Ordinance (Cap 352) (“PO”), I am satisfied that the Plaintiff, being a mortgagee of the 1^st Defendant’s interests in the Property, is an “interested person” within the meaning of section 2 of the PO, and is entitled to apply for an order for sale under section 3(1) of the PO.

14.  I am satisfied that it would be just and reasonable to order the sale of the Property. The Property is a domestic unit in a multi-storey building. Partition of the Property is impracticable and would not be beneficial to the co-owner of the Property, ie the 2^nd Defendant. There has not been any objections from the 1^st and/or 2^nd Defendants for the sale of the Property. Neither of them has filed the Acknowledge of Service of the Originating Summons nor any evidence in opposition to the Plaintiff’s application herein. They were also absent in the hearing.

DISPOSITION

15.  For the above reasons, I made an order in terms of draft Order as amended, which in my view will sufficiently safeguard the interest of the 2^nd Defendant.

16.  As to costs, I ordered the 1^st Defendant to pay the Plaintiff’s costs on an indemnity basis, summarily assessed at HK$55,000.00. Ms Ma did not seek costs against the 2^nd Defendant and I made no order as to costs between the Plaintiff and the 2^nd Defendant.