Parklane Mortgage Services Ltd v. Li Ho Jacob

HCA 1133/2019

[2020] HKCFI 2079

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1133 OF 2019

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BETWEEN

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D E C I S I O N

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Introduction

1.This is an application for summary judgment.  At the hearing, I indicated preliminarily that one option I was considering was to grant the Defendant leave to defend on condition of him paying a sum into Court is one of the options. 

2.In response, Mr Raymond W N Tsui, for the Defendant, requested for an opportunity to file evidence on his client’s financial means, as he had not come prepared with such evidence.  I acceded, bearing in mind the reminder issued by the Court of Appeal in Liu Ke Mian Lorraine v De Xin Da Trading Co Ltd (HCMP 1481/2016, 30 September 2016) at §§25-26.  I also gave the Plaintiff an opportunity to file responsive evidence if so advised. 

3.I have now received and reviewed the additional materials[1] and give judgment. 

4.Mr Tsui submitted that the present case is not appropriate for summary judgment because there is a material deviation between the Statement of Claim and the Plaintiff’s affirmation.  It is said that on the Statement of Claim, the Plaintiff is suing on a loan agreement dated 3 October 2018 (“Loan Agreement”) under which it advanced a sum of HK$4 million to the Defendant on the same day; but on the Plaintiff’s affirmation, the loan was first advanced in July 2018 under an earlier loan agreement and the repayment date was extended by a second loan agreement in August 2018 and further extended by the Loan Agreement. 

5.Mr Edward M H Chan, for the Plaintiff, submitted, and I agree, that there is no deviation as the rolled over loan is treated at law as a new loan even though money did not change hands between the lender and the borrower at the time the new loan is said to be advanced.  While it would have been more desirable if the earlier loan agreements and the loan being rolled over were pleaded, I do not regard there is any material deviation between the Statement of Claim and the Plaintiff’s affirmation. 

6.Mr Tsui next submitted that the Defendant has a bona fide defence or raises triable issues.  In summary:

(1)  The Plaintiff never provided the Defendant with a copy of the note or memorandum as required under section 18 of the Money Lenders Ordinance (Cap 163) (“MLO”).  In any event, the note or memorandum produced in the evidence did not comply with the statutory requirements in a number of ways. 

(2)  The Loan Agreement is unenforceable as the interest rate is higher than the stipulated amount in section 24 of the MLO. 

(3)  It is said that the Plaintiff’s employees or agents had, contrary to section 27 of the MLO, received referral and administrative fees from the Defendant. 

(4)  The amount of principal and interest under the Loan Agreement are serious issues of dispute. 

7.Needless to say, the Plaintiff disputes all of these points.  I have considered both side’s arguments carefully in light of all the evidence before me (including the additional materials mentioned at the outset) and remain of the view that I should grant the Defendant conditional leave to defend.  Accordingly, it would be inappropriate to go into the substance of the case save to point out that I regard there are good grounds to believe that the defence is shadowy or a sham and that I very nearly gave judgment in favour of the Plaintiff. 

8.In terms of the condition to be imposed, as Mr Chan rightly observed, the burden is on the Defendant to adduce sufficient and proper evidence as to his means and he must make full and frank disclosure. Having considered the Defendant’s 2^nd Affidavit, I am not satisfied that the Defendant has discharged that burden.  In particular:

(a)  He said that he had lent substantial funds to his brother to acquire a property but he failed to explain whether his brother had repaid him and, if not, why his brother could not repay the money to him either from his brother’s own resources or by obtaining a second mortgage over that property.  In the circumstances, his claim that his brother is “not in the position to lend me money” is nothing more than a bare assertion. 

(b)  While he made a further bare statement that his father is not in a position to lend him money, he did not explain what attempts, if any, did he make to raise funds from friends, business associates or relatives. 

9.Accordingly, I make the following order:

(a)  Unless the Defendant pay HK$4,782,842 into Court within 28 days from the date hereof, the Plaintiff may enter final judgment against him for the amount in the Statement of Claim dated 24 June 2019 with interest thereon as claimed and costs. 

(b)  If the sum mentioned at §9(a) above is so paid into Court within the stipulated time, the Defendant may have leave to defend the action. 

(c)  If the condition in §9(a) is complied with, costs of the summons to apply for summary judgment be in the cause with certificate for counsel.  If the condition is not complied with, the Plaintiff be entitled to costs of this action including costs of the summons to apply for summary judgment with certificate for counsel. 

Mr Edward M H Chan instructed by Matthew Ng & Co for the Plaintiff

Mr Raymond W N Tsui instructed by Raymond Cheung & Chan for the Defendant