China Citic Bank International Ltd v. Chan Kam Fu

DCMP 2736/2025

[2026] HKDC 1063

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 2736 OF 2025

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

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

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

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

DECISION

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

1.This is the Defendant’s appeal against Master Vivian Lee’s order dated 6 November 2025. Due to the Defendant’s application for legal aid, the proceedings was automatically stayed until 2 February 2026 which was the date for this appeal hearing. The Defendant, who has all along been acting in person, did not make any application and I proceeded to hear the appeal.

Background

2.Pursuant to a Facility Letter dated 6 May 2021, the Plaintiff granted a loan of HK$2,300,000 to the Defendant (“Facility Letter”). By a Mortgage dated 21 June 2021 made by the Defendant in favour of the Plaintiff (“Mortgage”), the repayment of the loan was secured by a property known as Flat 2003, 20/F, Block M, Allway Gardens, No 10 On Yat Street, Tsuen Wan, New Territories.

3.It is the Plaintiff’s case that the Defendant defaulted in repayment since February 2025. The Plaintiff then commenced a mortgagee action under Order 88 of the Rules of the District Court (Cap 336H) by an Originating Summons dated 20 May 2025 (“OS”).

4.The Defendant filed an acknowledgment of service of the OS indicating his opposition to the application. However, he did not file any affidavit evidence.

5.At the hearing before the Master, the Defendant produced a typed statement in Chinese dated the same date setting out his grounds opposing the Plaintiff’s application and his counterclaim for damages against the bank (“Written Statement”). It was signed by him but not affirmed and the Plaintiff took issue that it should not be admitted into evidence, both at the hearing below and this appeal.

6.The learned Master granted money judgment and possession order in favour of the Plaintiff.

The Appeal

7.The Defendant filed a Notice of Appeal on 20 November 2025 in which it was stated that his Written Statement has not been dealt with by the learned Master and asked that it be considered at the appeal.

8.It is well established that appeals from masters’ decisions are dealt with by way of re-hearing. The application is treated as though it came before the court for the first time.[1]

9.At the hearing, the Defendant reiterated that he would rely on his Written Statement in support of his appeal contents of which could be summarized as follows:

(1)  The Mortgage was valid for a long period of time and the Plaintiff was in repudiatory breach by demanding repayments prematurely;

(2)  The Plaintiff has failed to state in the OS or to prove the outstanding amount owed by him; and

(3)  Without his consent, the Plaintiff has debited his account for several repayments in 2025; he was therefore deprived of the use of the money for investment and has suffered loss and damage; the Defendant counterclaims for damages under various heads of claim for a total sum of around HK$7 million.

10.Having considered its contents and leaving aside the matters relating to the quantum of his purported counterclaim, I am of the view that the Defendant’s Written Statement did not contain any material factual assertions that the Plaintiff disputed and are in fact submissions in nature. Mr Chan, solicitor appearing for the Plaintiff, indicated that he would not oppose if the Court was to receive it as the Defendant’s submissions. Given that the Defendant is over 70 years old and acting in person, I am prepared to grant him the indulgence and would allow him to rely on his Written Statement for the purpose of the appeal.   

Applicable Rules

11.In Citibank N A v Days Properties Limited[2], DHCJ Lok (as he then was) helpfully summarised the applicable general rules at §§41-42:

“41. In Kwangtung Provisional Bank v Keen Lloyd Resources Ltd, unreported, HCMP 4696/2000 (decision on 14 August 2001), Chu J, as she then was, held that a plaintiff under an originating summons does not stand differently from that in proceedings commenced by other modes, in that he carries the burden of making good his claim and proving to the requisite standard the matters upon which the claim is grounded. If on the affidavit evidence placed before the court, the plaintiff is able to discharge that burden, he is prima facie entitled to judgment on the hearing of the originating summons. On the other hand, where the defendant raises other matters as a defence to the claim, the defendant must make good his case by creditable evidence. Chu J’s approach was affirmed by the Court of Appeal (CACV 1787/2001, unreported, decision on 26 February 2002, at §§18 & 19) (see also: Wing Hang Bank Ltd v Liu Kam Ying & Ors [2002] 2 HKC 57, per Ma J, as he then was, at §7).

42. In the hearing of the originating summons, the court therefore has to determine whether there are triable issues raised and whether directions should be given for the conduct of the hearing. If there are no triable issues, judgment may be entered against the defendant (see: Kincheng Banking Corporation v Centresign Co Ltd, unreported, HCMP 7239/1999, decision of P Cheung J, as he then was, on 22 June 2000).”

12.Before I turn to the issues raised by the Defendant, it is important to note that he did not challenge the validity of the Facility Letter and the Mortgage.

(1)  The Plaintiff’s Right to Demand Upon Default

13.The Defendant alleges that the Mortgage made in 2021 was intended to be for a long-term and parties should perform the contract until the end. Thus, the Court should dismiss the Plaintiff’s claim.[3]

14.The Mortgage contains the following express terms:

(1)  It shall be an event of default if the Defendant fails to pay any sum to the Plaintiff on the due date, or in the case of any money payable on demand (Clause 7.01(a));

(2)  If an event of default has occurred, the Plaintiff may declare all loans and other monies secured by the Mortgage immediately due and payable without further demand, notice or other legal formality of any kind (Clause 7.02(a)); and

(3)  The Plaintiff is entitled to recover possession and sell the mortgaged property in an event of default (Clause 8.05(a) and (b)).

15.Clause 4 of the Facility Letter further provides that the loan together with interest accrued thereon will be subject to the Plaintiff’s overriding right of repayment on demand.

16.In Citibank N A, supra, the defendant advanced similar argument that there had to be a good reason to justify the bank’s demand for immediate repayment of the loan. The Court, having reviewed the English and Hong Kong authorities, held that an express term that the funds are repayable on demand means what it says and is enforceable, even where the facility is a term loan of a specified period. It was further held, at §52: 

“52. … Even assuming that the defendant’s factual allegations were the truth, and it was the common intention of the parties that the 2011 Facility was regarded as a long-term loan, such loan was subject to an express term conferring the overriding right to the plaintiff to demand immediate repayment of the loan. As pointed out in Ellinger’s Modern Banking Law, the plaintiff advanced the loan to the defendant for its own purposes as lender. The plaintiff did not owe any duty to the defendant to assess the latter’s financial affairs and capacity to repay, and it also owed no duty to the defendant as to whether the latter could repay the loan on demand. In such circumstances, the plaintiff could exercise the right to call in the loan at its sole discretion, and there is no requirement in law that the plaintiff has to establish a good reason to demand the repayment of the loan.”

17.I find that there is absolutely no substance in this ground of defence.

(2)  Bank’s failure to state/prove the Outstanding Amount

18.It is alleged by the Defendant that the outstanding amount claimed by the Plaintiff was not stated in the OS but only provided subsequently. This is not true. In the demand letter dated 6 May 2025 which was sent to the Defendant before the OS was issued, the Plaintiff’s solicitors demanded repayment in the total sum of HK$1,831,421.97 together with additional interest.

19.Under Order 88, a plaintiff is required to set out in the supporting affidavit the outstanding amount due under the mortgage. Order 88 rule 5 provides for evidence required in support of a claim for delivery of possession and money judgment begun by originating summons as follows:

“5. Action for possession or payment: evidence (O. 88, r. 5)

(3) Where the plaintiff claims delivery of possession, the affidavit must show the circumstances under which the right to possession arises and except where the Court in any case or class of case otherwise directs, the state of the account between the mortgagor and mortgagee with particulars of—

(a) the amount of the advance;

(b) the amount of the periodic payments required to be made;

(c) the amount of any interest or instalments in arrear at the date of the originating summons and at the date of the affidavit; and

(d) the amount remaining due under the mortgage.

…

(6) Where the plaintiff claims payment of moneys secured by the mortgage, the affidavit must prove that the money is due and payable and give the particulars mentioned in paragraph (3).”

20.In the Affirmation filed by the Plaintiff in support of the OS, the state of account of the mortgage loan was set out with particulars. Having giving credit for various repayments made in May and June 2025, which was disputed by the Defendant and will be dealt with later, the total amount due and outstanding as at the date of the OS was HK$1,786,675.68 with further interest to accrue at a daily rate of HK$232.15 from 20 June 2025.

21.I am satisfied that the Plaintiff has complied with Order 88 rule 5 and the Defendant has been duly notified of all necessary particulars of the outstanding indebtedness owed to the Plaintiff. In any event, the Defendant did not state how the state of account was wrong. I therefore see no basis in the Defendant’s allegation.

(3)  The Plaintiff’s Right to Debit Account for Repayment

22.Pursuant to the Facility Letter, the Defendant provided one designated account with the Plaintiff which would be linked with the mortgage loan account. At the hearing, the Defendant confirmed with the Court that the said account has been used for making monthly repayments to the Plaintiff by way of autopay at all material times.

23.According to the table in the Defendant’s Written Statement, the following deposits made into the Defendant’s designated account were applied to make partial repayments to the Plaintiff:

	Date	Deposit Amount	Date	Withdrawal Amount
(1)	30/4/2025	HK$15,000.00	16/5/2025	HK$15,000.00
(2)	3/6/2025	HK$15,000.00	6/6/2025	HK$15,000.00
(3)	7/6/2025	HK$20,000.00	9/6/2025	HK$20,002.00

24.All of the above 3 partial repayments were reflected in the state of the account set out in the Plaintiff’s affirmation. I note from the Defendant’s Written Statement that there was also a previous deposit and subsequent withdrawal in the sum of HK$10,000.00 on 27-28 February 2025 which should be the last partial payment made by the Defendant before the OS was commenced. The same was therefore not shown in the said state of the account.

25.The Defendant alleges that despite his obligation to make monthly repayments, the Plaintiff has no right to withdraw those sums without his consent. I find the allegation completely devoid of merit.

26.Firstly, the account was designated for making repayments and the Plaintiff has been debiting the account by way of autopay from the very beginning. The fact that the Defendant had caused the various deposits to be made into this account must mean that they were deposited for the purpose of making repayments.

27.Secondly, under the Facility Letter, the Defendant agreed to observe and be bound by the Plaintiff’s General Terms and Conditions for the facility. Clause 6.2 provides:

“6.2 The Bank shall have the right to appropriate either at the time of payment or at any time thereafter any money paid to the Bank or otherwise coming into the Bank's possession or control for my/our account in or towards discharging whichever part of my/our liabilities to the Bank as the Bank shall think fit. Any such appropriation shall override any purported appropriation by me/us.”

28.The Plaintiff is therefore entitled to appropriate the money paid into the Defendant’s said account in discharging the outstanding indebtedness owed by him at the relevant time. I find that the Defendant’s allegation is clearly an excuse to evade liability.

29.Based on of my findings, there is no legal or factual basis for the Defendant to make any counterclaim against the Plaintiff. I need not address the various heads of claim save to observe that the alleged damages of over HK$7 million are plainly absurd and fundamentally groundless.

30.In my judgment, this is a straightforward loan repayment claim. There are plainly no defence available to the Defendant nor is there any triable issue. I therefore dismiss the Defendant’s appeal.  

Costs

31.The Plaintiff asks for costs on an indemnity basis which is expressly provided for under Clause 10.01(a) of the Mortgage and I see no reason why such order should not be made. Having considered the Statement of Costs submitted by the Plaintiff’s solicitors, and on a nisi basis, I summarily assess and allow the Plaintiff’s costs of the appeal in the sum of HK$30,000. The above order nisi shall become absolute in the absence of an application to vary within 14 days from the date hereof.

32.If any party wishes to vary the costs order nisi:

(a)  Such a party shall lodge and serve its grounds of objection within 14 days hereof;

(b)  The other party shall lodge and serve its reply (if any) within 14 days thereafter; and

(c)  The application shall then be disposed of on papers.

Mr Jason Chan, of Joseph S C Chan & Co , for the Plaintiff

The Defendant appeared in person