Read the full judgment text of HCA 009682/2000 on BabelCite. This High Court CFI judgment was delivered on 17 April 2003 before Deputy High Court Judge To.
Civil law – money lending – loan agreement – guarantees – mortgages – Money Lenders Ordinance, Cap. 163 – whether Plaintiff a licensed money lender under s.23 – whether loan an exempted loan under Schedule 1 Part 2 Paragraph 2(a) so that ss.18, 20 and 22 do not apply – whether loan documents induced by misrepresentation – non est factum – Plaintiff finance company advanced a $2 million loan to 1st Defendant, secured by first legal charges over two properties mortgaged by 5th and 6th Defendants, a debenture over 1st Defendant's assets, and personal guarantees by 2nd, 3rd and 4th Defendants – documents witnessed and explained by Plaintiff's solicitor Mr Ricky Yiu of Messrs Baker & McKenzie – issue (1) – Plaintiff produced documentary evidence of a valid money lenders licence at all material times, so the s.23 unenforceability defence fails – issue (2) – loan was secured by a debenture registered under s.80 of the Companies Ordinance, Cap 32, making it an exempted loan under Paragraph 2(a) of Part 2 of Schedule 1 to the Money Lenders Ordinance; following Liggars Ltd v DC Finance (Holdings) Ltd, Plaintiff fell outside the definition of 'money lender' under s.2(1), and ss.18, 20 and 22 did not apply – issue (3) – misrepresentation defence had no merit because Plaintiff was a licensed money lender, and the alleged misrepresentations repeated by the 2nd Defendant were unsupported – issue (4) – non est factum defence failed: applying Saunders v Anglia Building Society [1971] AC 1004, Defendants bore the burden of proving total lack of consent and careful signing; only the 5th Defendant gave evidence, and his account was inconsistent with his own witness statement, contradicted by his courtroom demeanour, and rejected as incredible, while 3rd, 4th and 6th Defendants tendered no evidence – Plaintiff's case proved – judgment entered for HK$2,656,576.23 plus contractual interest, vacant possession of the two mortgaged properties, and costs on an indemnity basis.
Legal issues: Whether the Plaintiff was a licensed money lender (s.23 MLO) · Whether the loan and securities are unenforceable under ss.18, 20 and/or 22 MLO · Whether the loan documents were induced by misrepresentation · Whether the 3rd to 6th Defendants can rely on non est factum
Outcome: Judgment entered in favour of the Plaintiff against the 1st, 3rd, 4th, 5th and 6th Defendants for the outstanding loan and interest, vacant possession of the mortgaged properties against the 5th and 6th Defendants, and costs on an indemnity basis.