Read the full judgment text of CACV 000182/1993 on BabelCite. This Court of Appeal judgment was delivered on 26 January 1994 before Nazareth, Mortimer and Godfrey, JJ.A..
Civil procedure – summary judgment under O.86 of the Rules of the Supreme Court – leave to defend – credibility of defence – sale and purchase agreement for Flat E, 12th Floor, Forward Mansion, Tuen Mun at an undervalue of HK$800,000 with an unusually high 50% deposit of HK$400,000 – one-year completion date – clause allowing vendor to rescind on 7 days' notice on repayment of deposit without compensation, interest or costs – plaintiff applied for summary judgment – defendant asserted he never received the deposit, alternatively that the substance of the transaction was a charge to secure repayment of HK$400,000 rather than a sale, and further that the plaintiff was an unregistered money-lender under the Moneylenders Ordinance, Cap.163 – proper test for granting leave to defend – whether the defendant's assertion of not receiving the HK$400,000 was credible – whether the transaction was in substance a mortgage or charge – whether the Moneylenders Ordinance defence should be permitted at trial – Court of Appeal applied the 'is what the defendant says credible?' test from National Westminster Bank Plc v. Daniel (unreported, 19 February 1993) – the approach in Murjani of mini-trial on affidavits disapproved – the issue is not whether the defendant's assertions are to be believed but whether they are believable – defendant's assertion of not receiving the deposit held beyond belief – but the undervalue and highly unusual provisions of the agreement, including the 50% deposit, one-year completion date, and 7-day rescission clause, were on the face of it consistent with a charge to secure repayment, raising a triable issue requiring investigation at trial – the present case was an a fortiori case from Nash v. Layton [1911] 2 Ch 71, permitting the defendant to raise the Moneylenders Ordinance defence at trial – appeal dismissed, unconditional leave to defend affirmed.
Legal issues: Proper test for summary judgment under O.86 of the Rules of the Supreme Court · Whether the transaction was in substance a mortgage rather than a sale · Whether the Moneylenders Ordinance defence should be permitted at trial
Outcome: Appeal dismissed.
Cited by 4 cases