Sun Hung Kai Credit Ltd v. Guan Wenna
Read the full judgment text of DCCJ 2294/2021 on BabelCite. This District Court judgment was delivered on 27 September 2024.
1. In this action, the Plaintiff Sun Hung Kai Credit Limited (“ P ”) sues the Defendant Guan Wenna (“ D ”) for, inter alia , repayment of an outstanding loan and interest under a loan agreement dated 16 October 2020 (“ Loan Agreement ”).
Cites 9 cases
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DCCJ 2294/2021 [2024] HKDC 1524 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 2294 OF 2021 ———————— BETWEEN
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———————— DECISION ———————— Background 1.In this action, the Plaintiff Sun Hung Kai Credit Limited (“P”) sues the Defendant Guan Wenna (“D”) for, inter alia, repayment of an outstanding loan and interest under a loan agreement dated 16 October 2020 (“Loan Agreement”). 2.The trial of this action is scheduled to commence on 17 October 2024 with 6 days reserved. 3.D took out a Summons on 9 August 2024 (“D’s Summons”), shortly before the Pre-Trial Review (PTR) fixed to be beard on 12 August 2024 by this court, seeking the following:
Procedural History 4.The following events are relevant in the court’s consideration of D’s Summons:
5.At the PTR, directions were granted for the parties to file and serve written submissions, list of authorities and statements of costs for this court to, if appropriate, deal with D’s Summons by paper disposal, which I now do. Milestone Date 6.It is not disputed that trial dates are milestone dates. Under O 25 r 3(3) of the Rules of the District Court (Cap 336H) (RDC), “exceptional circumstances” must be demonstrated in order to justify the variation of a milestone date. Relief from Sanction / The Jurisdiction Argument 7.The whole basis of D’s argument is that her counterclaim, in the amount of $3,631,800, exceeds the jurisdictional limit of the District Court as set out in section 32 of the District Court Ordinance (Cap 336) (DCO). D argues that accordingly this action must be transferred to CFI pursuant to section 41 of DCO. 8.On the same basis, D argues that relief from sanction of the Unless Order should be granted because this is a matter which goes to jurisdiction, not just a matter of case management. Whether D has a Counterclaim of Over $3 million 9.This is a straightforward loan and mortgage enforcement action by P, a licensed money lender, against D for repayment of a loan advanced to D under the Loan Agreement. 10.It would be helpful to set out the following pleaded facts and the claims:
11.I accept the submissions of P’s counsel Mr Vincent Chen on the jurisdiction argument that the court should not take whatever is pleaded by a party at face value in considering whether or not a matter should be transferred from the District Court to CFI. 12.As stated in Wan Chi Hing v Wong Chung Kai trading as Kai Hing Trading Company, unreported, DCCJ 592/2006, 5 August 2013, an authority heavily relied on by D, in §5: the court has to decide whether the claimed sum as framed does not amount to an abuse and whether there is anything conclusively contradictory to the framed claim at an interlocutory stage. 13.A careful review of D’s pleaded counterclaim reveals that she does not have a valid counterclaim of over $3 million. D has framed her claim as one for damages. The particulars of loss and damage set out in §26 of the D&CC include 2 sums of money of the respective amounts of $657,000 and $974,800, and the loan advance of $2,000,000 from P under the Loan Agreement. 14.There is no question of D suffering loss and damage of the $2,000,000 which was a loan advance from P to begin with. If P prevails in its claim, it would be entitled to recover the loan and other relief sought in the original action. 15.On D’s pleaded case, she had only suffered loss of the 2 sums of money of the respective sums of $657,000 and $974,800 paid out of her own savings and borrowings from siblings. She will not in any event additionally recover a further sum of $2,000,000 from P. The simple reason is that she did not suffer such loss. 16.Even if D wins her counterclaim totally, she will not be able to recover the loan advanced from P, or an additional $2,000,000. In practical terms D’s pleaded counterclaim (of $3,631,800) would be set off by P’s inability to recover from D the loan advanced in the sum of $2,000,000. D would be left with a claim of $1,631,800, ie the 2 sums of money defrauded out of P’s savings and borrowings from siblings. 17.D’s framed case is illogical and amounts to an abuse. She has not suffered loss of the $2,000,000 which was a loan advance made by P to her under the Loan Agreement. She does not have a counterclaim of over $3,000,000 as pleaded. 18.Whichever way one frames or looks at it, D’s counterclaim still falls within the general jurisdiction of the District Court in accordance with section 32 DCO which provides:
19.In any event, section 41 DCO on transfer to CFI relied on by D does not apply to a counterclaim, as it provides:
20.The above deals with the jurisdiction point. There is no justification in D’s application for a transfer of the action from the District Court to CFI. D cannot rely on it as the basis to seek relief from sanction. Relief from Sanction 21.No explanation is given by D for the non-compliance of the Unless Order and for the delay in seeking relief from sanction. 22.It is wrong for D’s counsel Mr Brian Lo to suggest as stated his written submissions that “(the issue of jurisdiction) was not raised by either parties in the case management stage thus far, resulting in this unfortunate delay” given the following events in the procedural history of this action:
23.Against this background, P’s counsel argues and I accept that D had contemplated and been advised on the issue of transfer, and the “interlocutory application” contemplated under the Unless Order was exactly the Transfer Application. 24.D has not provided any explanation why the Transfer Application is now made shortly before trial and long after she had apparently made the decision not to do so a year ago upon advice. Her Solicitors should be alerted to these matters of jurisdiction from day one upon filing of the D&CC almost 3 years ago in November 2021 should they wish to take (wrongly unfortunately) the jurisdiction point. 25.It is trite that lateness without explanation itself is a ground for refusal of applications such as transfer to a different court level, joinder and amendment of pleadings which applications will result in an imminent trial being vacated. 26.P’s counsel refers to the judgment of Hon Mimmie Chan J in Hong Kong Changyi Real Estate Development Limited v Neo-China (Group) Infrastructure Investment Limited & Ors, unreported, HCA 1576/2011, 25 February 2014 at §1:
27.In Waddington Limited v Chan Chun Hoo Thomas, unreported, HCA 3291/2003, 7 May 2013, DHCJ Lok (as he then was) dismissed the late applications on the basis of delay alone, despite the learned judge considered most of the applications did have merits but for the timing of the applications. In that case the learned judge said:
28.No exceptional circumstances are demonstrated to explain the lateness or would justify vacating the milestone date of a trial. 29.D’s applications for relief from sanction and transfer to CFI are refused. The Joinder Application 30.D also seeks leave to amend the D&CC to join Cheng as the 2nd Defendant in the Counterclaim. 31.D’s pleaded case as set out in the D&CC (3/58/§26), and elaborated by her counsel Mr Brian Lo in his written submissions, has all along been that P is part of the conspiracy to defraud D and the loan was made for the purpose of enabling D to pay out the money to the group of fraudsters to which P conspired with. 32.D’s counsel submits that the Joinder Application is necessary in the interest of justice as Cheng is shown to be part and parcel of the conspiracy. The application to amend the D&CC is premised on (i) the joinder of Cheng and (ii) allegations arising from the recordings provided by P in the form of particulars in the course of these proceedings. 33.It is clear that D had all along known of the involvement of Cheng, an employee of P and its representative dealing with the application and conclusion of the Loan Agreement, as is pleaded in the D&CC. 34.The Joinder Application, taken out almost 3 years after filing of the D&CC and 2 months before trial, is extremely late. To allow the Joinder Application or proposed amendments to D&CC sought by D now would likely result in the need for P to plead to amendments, consider new documents and evidence, file supplemental witness statements, etc. There will be many months before the case will be ready for refixing for trial. The primary aim in exercising the powers of the court to secure the just resolution of disputes of the parties will be totally defeated. 35.D relies on (i) a transcript of audio recording of a telephone conversation with Cheng provided by P to D in these proceedings on 12 December 2022; and (ii) D being tied up with some other court proceedings in Wuhan, PRC in 2021 and the Covid situation in the last few years to explain the delay in taking out the Joinder Application. 36.It is fairly argued by P’s counsel that as D had all along been dealing with Cheng who was a representative of P, and had taken part personally in the telephone conversation with Cheng, there is no reason why D would have to wait for the transcript of audio recording to ascertain or know about Cheng’s role and involvement leading to the late Joinder Application. 37.D being busy or not in Hong Kong cannot be an explanation for the delay when she was legally represented in these proceedings all along. 38.These explanations, apart from being unreasonable, cannot explain why the Joinder Application could not be made in 2023 the latest after D was provided with the transcript of audio recording. 39.Turning to D’s proposed amendments to the D&CC, I accept the submissions of P’s counsel that the newly amended paragraphs (in particular §§25(b)-(f)) do not contain material facts, but are matters of evidence/submissions/arguments which have no place in pleadings. 40.These proposed amendments are neither necessary for disposing fairly of the cause of matter nor for saving costs. The requirement of Order 20 rule 8(1A) RDC is not satisfied. They should not be allowed, extreme lateness aside. 41.Having considered all matters raised by D’s counsel, I find D’s explanations amount to nothing but a lame excuse in taking out these last minute applications. 42.Again, no exceptional circumstances as required under Order 25 rule 3(3) RDC are demonstrated warranting the grant of leave to joinder and amend pleadings which has the inevitable effect of derailing the trial dates. Conclusion 43.I consider D’s applications for relief from sanction, transfer to CFI, joinder and amendments of D&CC to be unmeritorious. 44.In accordance with the underlying objectives set out in Order 1A rule 1 of RDC and the court’s duty under rule 2 RDC, I exercise this court’s case management discretion to disallow the applications in D’s Summons. Costs 45.Costs of the Summons should follow the event upon dismissal, hence D should pay P’s costs. 46.P seeks indemnity costs against D. 47.I have considered the following authorities referred to by counsel for P Mr Chen:
48.In the present case, for reasons stated hereinabove, I conclude that D’s late applications are likewise obviously and utterly without merits but an attempt to derail the trial which was fixed almost a year earlier. No satisfactory reason is put forward to justify the lateness. 49.To show the court’s disapproval of this practice, an order of indemnity costs would be appropriate. 50.I consider it appropriate to deal with costs of D’s Summons by summary assessment. For those purposes, I have directed and parties have submitted their respective statements of costs. Disposition 51.To conclude, I make the order that:
Mr Vincent Chen, instructed by Arthur Hong LLP, for the Plaintiff Mr Brian Lo, instructed by K.C. Ho & Fong, for the Defendant |
Cases cited in this judgment
Further hearings and rulings under DCCJ 2294/2021