Konew Capital International Ltd v. Wong Kong Heung Formerly Known As Wong Kwong Heung Candy

DCMP 4781/2022

[2025] HKDC 712

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 4781 OF 2022

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DECISION

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INTRODUCTION

1.This is the Defendant’s application dated 19^th February 2025 for discovery of the following (“Application”):-

(a)  The transcript of the hearing on 23 September 2024 before Master Andrea Yu (“Master Hearing”);

(b)  The copies of the audio records for the conversion between Miss Tong, the staff of the Plaintiff (“P”) and the Defendant (“D”) at P’s office on the following dates:-

(i)  11 December 2020 for the loan of HK$2,000,000;

(ii)  11 December 2020 for the loan of HK$1,600,000;

(iii)  13 January 2021 for the loan of HK$2,000,000;

(iv)  8 November 2021 for the loan of HK$200,000;

(v)  8 November 2021 for the loan of HK$400,000;

(c)  Either P’s physical cheque which is issued by Foo and Li on or after 6 September 2024 for HK$1,635,126.74; or P’s bank statement transaction from 6 September 2024 to present which shows the transaction amount of HK$1,635,126.74;

(d)  P’s written confirmation to confirm the deduction for HK$100,000 from D’s loan for extra interest charge for 111 days being the late reply to D’s first affirmation;

(e)  P’s written confirmation to confirm the maximum loan outstanding repayment amount for HK$3,000,000 to be included the HK$1,635,126.74 or not; and

(f)  P’s written confirmation to confirm the decision making for the additional 30% of the loan outstanding charge by the 3^rd party debt collection.

BACKGROUND

2.The background of this case has been helpfully set out in the skeleton submissions of Mr. Cheung for P as follows.

3.P is a licensed moneylender in Hong Kong and D was its customer.

4.On 13 January 2021, P lent to D a principal sum of HK$2,000,000 (“1^st Loan”) to be repaid by 180 monthly instalments, at interest rate of 16.80% per annum, pursuant to a loan agreement in Chinese (“1^st Loan Agreement”).

5.On 8 December 2021, P lent to D another principal sum of HK$400,000 (“2^nd Loan”), to be repaid by 60 monthly instalments, also at 16.80% per annum, pursuant to another loan agreement in Chinese (“2^nd Loan Agreement”).

6.The 1^st Loan Agreement and the 2^nd Loan Agreement (collectively referred to as “Loan Agreements”) were secured by mortgages in favour of P and granted by D over a property beneficially owned by D (“Property”).

7.D defaulted in repaying the monthly instalments of the 1^st Loan on 10 August 2022 (i.e. the 19^th instalment) and of the 2^nd Loan on 5 August 2022 (i.e. the 8^th instalment). Accordingly, by reason of terms of the Loan Agreements, the whole balance of the 1^st Loan and the 2^nd Loan and all accrued interest became immediately due and payable.

8.Despite repeated requests and demands by P, D had failed and/or refused to pay to P the outstanding balance.

9.P commenced the present action on 15 December 2022.

10.In D’s affirmations, D claims that she has a valid defence to P’s claim, on the basis that:-

(a)  P did not keep its alleged promise to cancel the registration of a mortgage dated 23 December 2029 over D’s Property prior to D’s entry into the 1^st Loan Agreement;

(b)  D was misleadingly persuaded by a staff member of P to enter into the Loan Agreements with P, such that D commercially lost out as she had to pay extra interest compared to another potential loan agreement with another finance company and the financing structure of the Loan Agreements affected her future borrowing power; and

(c)  The Loan Agreements were illegal for charging payment of compound interest.

11.D counterclaims HK$10,000,000 for alleged financial hardship caused by P’s alleged actions.

12.By the summons dated 15 December 2022, P applied for summary judgment against D. The application was heard by Master Andrea Yu on 23 September 2024.

13.In the Decision dated 28 October 2024, the learned Master found that there was no merit in D’s defence:-

(a)  The non-cancellation of the original mortgage bears no relation at all to D’s current liability under the Loan Agreements;

(b)  D’s allegation of P’s misrepresentation is not believable, with doubt that the facts relied upon by D constitute any valid ground for misrepresentation, when D did not dispute that she could read English, was commercially experienced in taking out loans and had signed the Loan Agreements;

(c)  Factually, no compound interest was charged.

14.Thus, the learned Master entered money judgment against D.

15.D appeals against the Decision and the hearing of D’s appeal will take place on 23 July 2025 (“Appeal Hearing”).

16.On 19 February 2025, D took out the present Application for discovery of documents for the purpose of her appeal.

GROUND OF OBJECTIONS

17.Save for item (a), Mr. Cheung objected to the Application on the following ground:-

(a)  Firstly, D already loses the present proceedings as Master Andrea Yu has substantively determined the entirety of the same against D, such that there is no scope for any further “discovery” as sought by D;

(b)  Secondly, even assuming that D is entitled to belatedly take out an application for discovery, discovery should not be granted because clearly D’s application is part and parcel of her fishing expedition;

(c)  Thirdly, if D’s real intention were to adduce further evidence for the Appeal Hearing, D’s Summons fails to cross the high threshold of Ladd v Marshall, applied in the context of an appeal from a Master to Judge in chambers; and

(d)  Fourthly, it has been confirmed by P by way of affirmation that items (d), (e) and (f) do not exist.

18.For item (a), Mr. Cheung submitted that the application for transcript should be made to the Court, instead of in the Application. Having said that, Mr. Cheung maintained a neutral stance on item (a).

DISCUSSIONS

Item (a)

19.At the hearing, D changed to ask for the audio recording of the Master Hearing and agreed to pay the necessary fee.

20.Given the neutral stance of Mr. Cheung, I would allow D to obtain the audio recording of the Master Hearing upon payment of the necessary fee.

21.To avoid any unnecessary argument at the Appeal Hearing, I have made the direction that, if D intends to rely on any part of the audio recording of the Master Hearing at the Appeal Hearing, she shall on or before 25 June 2025 provide the typed-up transcript of the relevant part (with reference to time), together with the said audio recording, to P’s solicitors for agreement of the accuracy of the typed-up transcript, failing which D would be debarred from relying on the said audio recording at the Appeal Hearing.

Item (b)

22.D submitted that item (b) is necessary for the fair disposal of her appeal because it is a “strong proof that Miss Tong [of P] misrepresented me borrowing the loan from the Plaintiff and Ms. Wu [of P] did not follow the general principle of lending”.

23.I agree with Mr. Cheung that it is rare for the Court to allow an application for discovery for the purpose of appeal. The Court of Appeal firmly ruled against a belated discovery application in Tsang Tak Wai v Building Authority [2018] 1 HKLRD 137, wherein Chu JA (as Chu VP then was) stressed at §10 as follows:

“ … as stated above, the collection and production of evidence should be carried out at trial, and it is inappropriate to collect evidence or request discovery only at the appeal …”

24.Although the case of Tsang Tak Wai concerned an application for discovery after trial, I am of the view that, by analogy and/or by extension, the same principle shall apply to the present case. Collection and production of evidence should have been carried out before the Master Hearing. Otherwise, D would have a second bite of the cherry by abusing the de novo hearing arrangement.

25.I also agree with Mr. Cheung that, even assuming that D is entitled to take out this belated Application, D still needs to satisfy the requirements laid down in Ladd v Mashsall before she is allowed to adduce the newly discovered documents at the Appeal Hearing, particularly the first requirement, i.e. the evidence could not have been obtained with reasonable diligence for use at the hearing below.

26.At the hearing, D explained that she did not know she should have applied for discovery before the Master Hearing.

27.As confirmed by Mr. Cheung, D had never asked P to provide item (b) and the first time D mentioned the discovery of item (b) was in her skeleton submission at the Master Hearing where she submitted at paragraph 33 that “I am pleased to apply for approval from the Court to order [P] submitting the audio records to the Court for the judgment”.

28.I am unable to accept D’s explanation. If item (b) was so important to D’s defence as alleged, it was a matter of common sense that she should have asked P to provide the same as early as possible. D’s failure to obtain item (b) before the Master Appeal cannot be explained away by the alleged ignorance of law.

29.By reasons of the aforesaid, I refuse D’s application for item (b).

Item (c)

30.For item (c), D informed the Court that the Property had been sold by Da Sing Bank and the sum HK$1,635,126.74 was the net sale proceeds (“Sale Proceeds”) which had been given by Da Sing Bank’s solicitors (i.e. Messrs. Foo & Li) to P’s solicitors.

31.After taking instructions, Mr. Cheung confirmed that P had received the Sale Proceeds by way of cheque on or about 16 September 2024 (i.e. a few days before the Master Hearing) and the said cheque had not been cashed in at the time of the Master Hearing. Mr. Cheung further confirmed that P would give credit to the Sale Proceeds and amend the total indebtedness either at the Appeal Hearing or in the enforcement.

32.Despite Mr. Cheung’s confirmation, D insisted on having item (c).

33.Given Mr. Cheung’s confirmation, I do not see the necessity of item (c) and would refuse D’s application for the said item.

Items (d), (e) and (f)

34.D’s application for items (d), (e) and (f) is wholly misconceived. The purpose of discovery of documents is for parties to disclose documents that it possesses related to the proceedings. It is not for one party to request the other party to give “written confirmation” on any issue involved in the proceedings.

35.In any event, P has confirmed by the 3^rd Affirmation of Tsang Tak Wah that items (d), (e) and (f) do not exist.

36.Despite P’s confirmation, D insisted that P should provide the “written confirmation”.

37.It is trite law that “the oath of the party giving discovery is conclusive, unless the court can be satisfied – not on a conflict of affidavits, but either from the documents produced or from anything in the affidavit made by [that party], or by any admission by him in the pleadings, or necessarily from the circumstances of the case – that the affidavit does not truly state that which it ought to state”; Grand Planet Ltd v The Incorporated Owners of Lucky Commercial Centre [2021] HKDC 198 at §15.

38.By reasons of the aforesaid, I would refuse D’s application on items (d), (e) and (f).

CONCLUSION

39.Although I allow D to obtain the audio recording of the Master Hearing, D cannot be regarded as successful in respect of item (a) as audio recording is not the item that D asked for in her summons. In any event, as noted above, the application for transcript or audio recording of the Master Hearing should be made to the Court directly, instead of in the Application.

40.By reasons of the aforesaid, I am of the view that the Application is wholly unmeritorious and I dismiss the Application.

41.Costs should follow the event. I am of the view that P’s costs of HK$14,942 is very modest and I would allow it in full. I therefore order that D do pay P’s costs of the Application forthwith summarily assessed at HK$14,942.

42.I thanks Mr. Cheung for his assistance to the Court.

Mr. Tommy Cheung, instructed by Foo & Li, for the plaintiff

The defendant was not represented and was acting in person