CHEN SIMON GUOMIN v. CHAN CHOI HAR IVY AND OTHERS

HCA 1454/2018 [2023] HKCFI 3135 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 1454 OF 2018 ____________ BETWEEN CHEN SIMON GUOMIN (陳國敏) Plaintiff and CHAN CHOI HAR IVY (陳彩霞) 1st Defendant KEUNG WAI FUN SAMANTHA (姜惠芬) 2nd Defendant LAW KIN MING, ALFRED (羅堅明) 3rd Defendant LAW ARTHUR HO YAN (羅皓仁) 4th Defendant CHEUNG TSUN HIN, SAMSON (張俊軒) 5th Defendant ____________ Before: Deputy High Court Judge MK Liu in Court Dates of Hearing: 27 November and 4 December 2023 Date of Judgment: 8 December 2023 _______________ J U D G M E N T _______________ INTRODUCTION The matter in this trial is the plaintiff (“P”)’s claim against the 3rd and the 4th defendants (“D3” and “D4” respectively, and “Ds” collectively). P is trying to enforce the Loan Agreement dated 30 April 2013 (subsequently amended by a Supplemental Loan Agreement dated 16 May 2014) and the Deeds of Guarantee dated 30 April 2013 against Ds. By these documents, Ds have guaranteed the loans advanced by P to the 1st and the 2nd defendant (“D1” and “D2” respectively). P has obtained a default judgment against D2 and the 5th defendant (“D5”) on 2 December 2020. On 15 August 2022, a bankruptcy order was made against D1. D1 is now an undischarged bankrupt. P has elected not to proceed against D1 in this trial. D3 and D1 are husband and wife, and D4 is their son. Both D3 and D4 are solicitors in Hong Kong. In the trial, P is represented by Mr Lawrence KF Ng (together with Mr Victor TS Lui), and Ds are acting in person. THE FACTS At the beginning of the trial, Ds told me that they would not dispute P’s factual case, and they are only relying upon the defences under the Money Lenders Ordinance (“MLO”) as pleaded in the Defence. Accordingly, the factual matters in P’s case are undisputed facts. The relevant factual background is as follows. In 1990, P was awarded a Bachelor of Engineering degree from the School of Economics and Management of Tsinghua University in Beijing. In 1993, P was awarded a Master of Arts in Economics degree from Simon Fraser University in Vancouver, British Columbia, Canada. In 1994, P was awarded a MBA degree from the University of British Columbia (“UBC”) in Vancouver, British Columbia, Canada. After graduating from UBC, and from 1994 to 1997, P was engaged in investment banking in Vancouver. In 1997, he relocated to live and work in Hong Kong and joined the Global Banking Markets Division in HSBC. From 1998 to 2001, P was the Chief Representative of HSBC in Beijing. In 2001 to 2004, P was the Director, China, HSBC. From 2003 to 2004, P was the Director and Head of Consumer and Retail Banking of HSBC. From 2005 to 2006, P was a Senior Vice President of Lehman Brothers Asia Limited. Now, P is a private investor who mainly invests in real estate and bonds. Before P left Vancouver to work in Hong Kong, he got to know D2 (who was a friend of P’s younger sister at that time) and her son D5 in Vancouver in around 1997. At that time P’s younger sister was pregnant and D2 took care of P’s younger sister by providing accommodation for her and buying food for the new born baby from time to time. P was extremely grateful to D2 for the assistance she had rendered to P’s younger sister. In around the first quarter of 2011, P met D2 again at a lunch meeting in Hong Kong. During the said lunch meeting, D2 told P that she and D5 were occupying important positions in China AU Group Holdings Limited (“China AU”), a listed company in Hong Kong. P also got to know D1 in the said lunch meeting and was given to understand that D1 and D2 were major shareholders of China AU. Subsequently, P met D1 & D2 on several occasions. At their request, P had made available to D1 and D2 certain loan facilities to give them some financial assistance. P lent several sums of money to D1 and D2 out of his friendship and trust of D1 and D2 and the loans were made to assist them. At the time when the loans were advanced by P to D1 and D2, they were free of interest and without security. When D1 and D2 requested for a loan in 2012, they assured P that this was to be only a short term loan and that the loan would be fully repaid by 30 November 2012. Hence, at that time the parties only signed a deed of guarantee dated 12 November 2012 providing for the maturity date of the loan to be on or before 30 November 2012. However, D1 and D2 failed to repay the loan by that time. They requested P to advance more loans to them. Based on his friendship with D1 and D2 and in order to assist them, P acceded to their request. As the amounts of the loans gradually increased and as the loans became more frequent, the parties agreed to sign a loan agreement (“the Loan Agreement”) to record all the loans advanced by P to D1 and D2. Since D3 was a practising solicitor in Hong Kong and was familiar with the law, the parties agreed that he would be responsible for drafting the Loan Agreement. The Loan Agreement and the relating guarantees (“the Guarantees”) were all drafted by D3. Eventually, the Loan Agreement dated 30 April 2013 was signed by P as the lender, D1 and D2 as the borrowers, and D3 to D5 as guarantors. Under the Loan Agreement, the parties expressly acknowledged the loan amounts advanced by P to D1 and D2 as at 30 April 2013. By the time of the Loan Agreement, the total number of loans provided by P to D1 and D2 was 21. In fact, 20 loans had already been provided by P to D1 and D2 before the date of the Loan Agreement. Only the last loan was provided by P to D1 and D2 on the date of the Loan Agreement. According to the terms of the Loan Agreement, all the principals and interests stipulated therein would need to be repaid on 29 April 2014. The Guarantees dated 30 April 2013 were also executed by each of D3, D4 and D5. By the Guarantees, each of D3, D4 and D5 agreed, in consideration of P entering into the Loan Agreement and agreeing to make the facilities available to D1 and D2, to unconditionally and irrevocably guarantee the due and punctual repayment or payment of all moneys which may from time to time be due and owing by D1 and D2 under the Loan Agreement. On 16 May 2014, the parties (ie P as lender, D1 and D2 as borrowers, and D3 to D5 as guarantors) entered into a supplemental loan agreement (“the Supplemental Loan Agreement”), which was also drafted by D3. The amounts of loans provided by P to D1 and D2 as at 29 April 2014 are set out in the Supplemental Loan Agreement. By the time of the Supplemental Loan Agreement, the total number of loans provided by P to D1 and D2 was 28. By the Supplemental Loan Agreement, the repayment date of all the principals and interests has been extended to 30 April 2015. The Loan Agreement as amended by the Supplemental Loan Agreement is referred to as the “LA” in the below. The Loan Agreement contains the following terms: “3. 貸款利息及費用 3.1 就本合同項下的貸款，借款人應按每月利率3.0厘向貸款人支付利息。貸款利息自貸款發放日起計算。貸款利息應按照實際用款日數及在每年365日的基準上計算並須按下期息支付。 3.2 就本合同項下的貸款，貸款人收取貸款金額的10%作為貸款費用。貸款人應借款人要求支付的所有款項中，均應視為扣除貸款費用之淨額，即貸款費用 = （貸款人應借款人要求支付的款項/（100%-10%）x 10%。 3.3 假若借款人未能按本合同規定於還款日償還貸款本金的全部以及支付任何到期應付利息和貸款費用，借款人須按每月利率0.5厘支付貸款人逾期利息（“逾期利息”）直至全額還清為止，同時支付貸款人雙倍之貸款費用作為補償。 4. 還款及到期日 4.1 在不影響本合同第5條規定的情況下，借款人須於還款日償還貸款本金的全部以及支付任何到期應付利息及費用。 ……” Mr Ng has told me that: P would not rely upon Clause 3.3 of the Loan Agreement to claim any default interest or any compensation against D3 and D4. Also, P would not claim the 10% loan fee (貸款費用) in Clause 3.2 in respect of each loan against D3 and D4. In other words, in respect of each of the 28 loans set out in the LA, P is claiming against D3 and D4 (a) the actual amount advanced by P to D1 and D2; and (b) the interest at the rate of 3% per month (or 36% per annum) on that amount until the repayment date, ie 30 April 2015. At the time of the Supplemental Loan Agreement, the total of the amounts actually advanced by P to D1 and D2 are as follows: HKD14,530,079.36 CNY17,040,000.00 D1 and/or D2 have made some repayments to P (“the Repayments”), the total of which is HKD130,000.00. Save and except the Repayments, no other sum has been repaid by D1 and/or D2 to P. P is prepared to give corresponding credits to D3 and D4 as a result of the Repayments. THE PARTIES’ RESPECTIVE CASES P is enforcing the guarantees against D3 and D4. D3 and D4 have jointly and severally guaranteed the indebtedness owed by D1 and D2 to P under the LA. At the early stage of these proceedings, D1, D3 and D4 were legally represented, and they jointly put in the Defence in this case. In the Defence, their primary case is that the Loan Agreement, the Supplemental Agreement and the Guarantees were documents used to bolster P’s financial credibility, so that P would be able to obtain financing from financial institutions in Mainland China for development of a project on a piece of land in the Mainland. No money in fact was advanced by P to D1 and/or D2 under the Loan Agreement or the Supplemental Loan Agreement. Their alternative case is some defences under the MLO. As said in the above, at the beginning of the trial, Ds have unequivocally told this court that they abandoned their primary case and would not dispute P’s factual case. They would only rely upon the defences under the MLO as pleaded in the Defence, which are as follows: MLO s.23 P was not a licensed money lender at the material times. Accordingly, by the operation of MLO s.23, P is not entitled to recover the principals and the interests covered in the LA. MLO s.22(1)(b) Clauses 4.1 and 4.2 of the LA prohibits repayment of the loans by instalments, contravening MLO s.22(1)(b). Accordingly, the LA are illegal and unenforceable. MLO ss.24 and 25 The interest rates provided in the LA and SLA are excessive. Accordingly, by reason of these provisions of the MLO, the LA shall not be enforceable. P’s primary positions is that the provisions in the MLO relied upon by Ds are inapplicable. P’s alternative position is that if any of the provision relied upon by D is applicable, taking all the circumstances into account, it would be inequitable if P is not allowed to enforce the LA. Insofar as may be necessary, the court may enforce the LA subject to the modifications or exceptions which the court considers equitable. At the beginning of the trial, after each party has stated his position, each party has decided not to call any witness to give oral evidence in the trial. It is well established that the issues in a trial are defined by pleadings, not by evidence. One cannot slip in an unpleaded issue by saying that there is evidence on the issue. As said by Ma CJ in Kwok Chin Wing v 21 Holdings Ltd:- “21. It should by now really be quite unnecessary to issue yet another reminder on the rationale behind pleadings. The basic objective is fairly and precisely to inform the other party or parties in the litigation of the stance of the pleading party (in other words, that party’s case) so that proper preparation is made possible, and to ensure that time and effort are not expended unnecessarily on other issues:- Wing Hang Bank Limited v Crystal Jet International Limited [2005] 2 HKLRD 795, 799 [6(1)]. It is the pleadings that will define the issues in a trial and dictate the course of proceedings both before and at trial. Where witnesses are involved, it will be the pleaded issues that define the scope of the evidence, and not the other way round. In other words, it will not be acceptable for unpleaded issues to be raised out of the evidence which is to be or has been adduced. As the Court of Appeal remarked in Wing Hang Bank Limited v Crystal Jet International Limited:- ‘(2) In a trial, particularly where evidence is given by witnesses, it becomes extremely important that each side knows exactly what are the live issues. Where issues are sought to be introduced that have not been adequately or properly pleaded, amendments must be sought unless the consent of the other party or parties has been obtained. It will simply not do for unpleaded issues to be “slipped in” when evidence is being given in the hope that the other side is not sufficiently alert to object.’ 22. …… one does not sift through the evidence adduced in a trial in the hope that something was said that can conceivably found a cause of action. Issues, I would reiterate, must be properly pleaded unless for some reason the pleadings have assumed a less significant role in the proceedings.” (Emphasis added) The purpose of pleadings is to define the real issues in dispute and to ensure that the litigation is conducted in a fair way. It is pertinent to note what Ribeiro PJ said in Sinoearn International Ltd v Hyundai-CCECC Joint Venture: “30. …… A party must raise all the issues he wishes to raise to be dealt with at the trial. Parties are not entitled to have issues recently thought up dealt with separately and piecemeal. The other party is entitled to know from a clear pleading what is the entire case he has to meet so that he can decide whether particulars should be sought; how he should plead in response; what discovery he is entitled to; what evidence he should adduce to meet it; and what points of law should be taken. …… 34. Pleadings are not mere formalities. They impose a necessary discipline and are fundamental to enabling every procedural facet of the adversarial system to operate fairly.’ (Emphasis added) By reason of the aforesaid, the issues to be resolved in the trial are the issues under the MLO as defined in the pleadings, no more and no less. DISCUSSION D1. P not a money lender As defined in MLO s.2(1), “money lender” is a person “whose business (whether or not he carries on any other business) is that of making loans or who advertises or announces himself or holds himself out in any way as carrying on that business”, and that person is not within the exempted categories as stipulated in the definition. The burden of proving P was a money lender at the material times is on Ds. In Chan Yuk Bun v Tsoi Yan Yee Lily & Another, DHCJ William Wong SC said: “12. The burden of proof lies squarely on the defendants to prove that, on a balance of probabilities, the plaintiff did, at the material time, carry on a business of money lending which required a money lender’s licence under Section 2 of the Money Lenders Ordinance, Cap 163 of the Laws of Hong Kong.” Similarly, in Chan Sze Sze Gabrielle v Tu Christopher, DHCJ GH Chua SC said: “14. In my view, the Plaintiff was not a money lender for these reasons :- (1) Her evidence which I accept, is that she operated a restaurant at the relevant time, and was not and had never been engaged in the business of money lending. Her ordinary course of business did not involve lending money, whether at the material time or at all. (2) The Defendant has not adduced any evidence, whether in his witness statement or otherwise, to show the Plaintiff was engaged in the money lending business. Instead, he accepts has no knowledge about her business or background (his witness statement, §2-3). (3) In these circumstances, there is simply no evidence to support the allegation the Plaintiff is a money lender.” As a matter of law, it is impermissible for Ds to shift the burden of proof to P. Recently, in Outstanding Management Consultation Ltd v Gold Topmont Ltd & Another, Peter Ng J said: “35. …… the 1st Defendant is seeking impermissibly to shift the burden of proof from itself to the Plaintiff. As a matter of law, there is no need for the Plaintiff to prove what its business was at the material time - the burden is on the 1st Defendant to prove that the Plaintiff was a moneylender. ……” Ds have not pleaded any material facts in the Defence and in the Further and Better Particulars of the Defence in support of the allegation that P was a money lender at the material times. That being the case, even if there is any fact which may lend support to Ds’ case, it would not be fair to allow Ds to rely upon that matter, for the matter is unpleaded and therefore has not been canvassed at the discovery stage, and P has not been given an opportunity to adduce evidence to deal with that matter. Without prejudice to the above, Ds have also not adduced any evidence to prove that P was a money lender at the material times. Based upon the undisputed facts, the loans were provided by P to D1 and D2 out of friendship and trust, and the loans were provided to them upon their request to give them assistance. There is no allegation in Ds’ pleadings, and there is no evidence adduced by Ds, saying that P was carrying on business of making loans when he made the advancements as recorded in the LA to D1 and D2. In my judgment, Ds have failed to plead the relevant material facts, and Ds have also failed to prove, that P was a money lender at the material times. D2. MLO s.23 MLO s.23 provides: “No money lender shall be entitled to recover in any court any money lent by him or any interest in respect thereof or to enforce any agreement made or security taken in respect of any loan made by him unless he satisfies the court by the production of his licence or otherwise that at the date of the loan or the making of the agreement or the taking of the security (as the case may be) he was licensed: Provided that if the court is satisfied that in all the circumstances it would be inequitable if a money lender who did not satisfy it that he was licensed at the relevant time was thereby not entitled to so recover such money or interest or to enforce such agreement or security, the court may order that the money lender is entitled to recover such money or interest or to enforce such agreement or security to such extent, and subject to such modifications or exceptions, as the court considers equitable.” (Emphasis added) As set out in the above, in my judgment, Ds have failed to plead the relevant material facts and have also failed to prove that P was not a money lender at the material times. Accordingly, MLO s.23 is not applicable. Alternatively, if P was a money lender at the material times, taking all the circumstances into account, I would exercise the discretion conferred upon me by the proviso to s.23 in favour of P and enforce the LA, the SLA and the Guarantees. D1 and D2 are experienced businesswomen. At the time of the LA, both of them were a major shareholders of a listed company in Hong Kong. Further, D2 was occupying an important position in that listed company. D3 and D4 are professionals and are solicitors in Hong Kong. At the time of the LA, they were also practicing solicitors in Hong Kong. Since 1990, D3 has been involved from time to time in various companies, including serving as the Executive Director, Independent Non-Executive Director and Legal Counsel for various listed companies in Hong Kong. The advancements from P to D1 and D2 were provided by P out of friendship and trust, and the loans were advanced upon D1 and D2’s request to give them some financial assistance. Before the signing of the Loan Agreement, 20 loans had already been provided by P to D1 and D2. At the time of the LA, the total of the actual advancements from P to D1 and was substantial (ie HKD14,530,079.36 and CNY17,040,000.00). The LA and the Guarantees were all drafted by D3. D3 and D1 are husband and wife, and D4 is their son. By executing the LA and the Guarantees, D1 to D5 have expressly agreed to the terms in these documents by their own free will without any pressure, duress or undue influence. D1 and D2 have derived substantial financial benefits from the LA by obtaining the advancements provided pursuant to the agreement. At the same time, P has been kept out of pocket for these sums for many years. I have also considered the matters concerning interest as discussed in section D4 below. My view on those matters have been set out in that section. Taking all the aforesaid into account, in my view, it would be inequitable if P is not allowed to recover the loans and the interests thereon. D3. MLO s.22(1)(b) MLO s.22 provides: “(1) Any agreement made for the loan of money by a money lender shall be illegal if it provides directly or indirectly for — …… (b) prohibiting the repayment of the loan by instalments …… (2) Notwithstanding subsection (1), if the court before which the legality of any agreement comes in question is satisfied that in all the circumstances it would be inequitable that any such agreement which does not comply with this section should be held to be unenforceable, the court may order that such agreement is enforceable to such extent, and subject to such modifications or exceptions, as the court considers equitable.” I have ruled that Ds have failed to establish that P was a money lender at the material times. Accordingly, MLO s.22(1)(b) is not applicable. Alternatively, I am of the view that Clauses 4.1 and 4.2 of the Loan Agreement do not contravene s.22(1)(b). In my view, Clause 4.1 simply provides that the principal, interest and fees have to be repaid on the repayment date as stipulated in the Loan Agreement, ie 29 April 2014. That clause does not prohibit repayment of the principal by earlier instalments. This construction is supported by Clause 4.2 According to Clause 4.2, any repayment made by the borrowers before 29 April 2014 would be regarded as repayment of interest, until the full repayment of the entire loan, interest and fees. Upon the full repayment of the loan, interest and fees, the Loan Agreement should cease to have effect. In my view, in accordance with Clause 4.2, the borrowers in fact can repay the indebtedness by instalments, and can repay the all the indebtedness at a time earlier than 29 April 2014. In the further alternative, if s.22(1)(b) has been contravened, for the reasons set out in [37] above, I would exercise my discretion in s.22(2) in P’s favour and enforce the LA and the Guarantees. D4. MLO ss.24 and 25 MLO ss.24 and 25 are as follows: “24. Prohibition of excessive interest rates (1) Any person (whether a money lender or not) who lends or offers to lend money at an effective rate of interest which exceeds [60] per cent per annum commits an offence. (2) No agreement for the repayment of any loan or for the payment of interest on any loan and no security given in respect of any such agreement or loan shall be enforceable in any case in which the effective rate of interest exceeds the rate specified in subsection (1). (3) The Legislative Council may by resolution alter the rate specified in subsection (1): Provided that in relation to any agreement for the repayment of any loan or for the payment of interest on any loan which is in force at the date when such rate is so altered, the rate so specified as at the coming into force of such agreement shall continue to apply. …… 25. Reopening of certain transactions (1) Subject to section 24(2), where — (a) proceedings are taken in any court by any person (whether a money lender or not) for the recovery of any money lent or the enforcement of any agreement or security in respect of any loan; and (b) subject to subsection (3), there is evidence which satisfies the court that the transaction is extortionate, the court may reopen the transaction so as to do justice between the parties having regard to all the circumstances, and, for that purpose, make such orders and give such directions in respect of the terms of the transaction or the rights of the parties thereunder as the court may think fit. (2) For the purposes of this section, a transaction is extortionate if— (a) it requires the debtor or a relative of his to make payments (whether unconditionally or on certain contingencies) which are grossly exorbitant; or (b) it otherwise grossly contravenes ordinary principles of fair-dealing. (3) Any agreement for the repayment of a loan or for the payment of interest on a loan in respect of which the effective rate of interest exceeds [48] per cent per annum shall, having regard to that fact alone, be presumed for the purposes of this section to be a transaction which is extortionate; but except where such rate exceeds the rate specified in section 24(1), the court may declare that any such agreement is not extortionate for the purposes of this section if, having regard to all the circumstances relating to the agreement, the court is satisfied that such rate is not unreasonable or unfair. (4) In determining whether a transaction is extortionate for the purposes of this section, regard shall be had to such evidence as is adduced concerning— (a) interest rate prevailing at the time it was made; (b) the factors mentioned in subsections (5) and (6); and (c) any other relevant considerations. (5) Factors applicable under subsection (4)(b) in relation to the debtor include— (a) his age, experience, business capacity and state of health; and (b) the degree to which, at the time of entering into the transaction, he was under financial pressure, and the nature of that pressure. (6) Factors applicable under subsection (4)(b) in relation to the lender or other person by whom the proceedings are taken include— (a) the degree of risk accepted by the lender, having regard to the nature and value of any security provided; (b) his relationship to the debtor; (c) whether or not a specious cash price was quoted for any goods or services included in the transaction; and (d) where one or more other transactions are to be taken into account, the question how far any such other transaction was reasonably required for the protection of the debtor or the lender, or was in the interest of the debtor. (7) Any court in which proceedings might be taken for the recovery of any loan or security in respect of a loan shall have and may at the instance of the debtor or any surety exercise the like powers as may be exercised under this section where proceedings are taken for the recovery of a loan; and the court may entertain any application under this subsection by the debtor or surety notwithstanding that the time for repayment of the loan or any instalment thereof has not arrived. …… (9) The Legislative Council may by resolution alter the rate specified in subsection (3) but, in relation to any agreement referred to in that subsection which is in force at the date when such rate is so altered, the rate so specified as at the coming into force of such agreement shall continue to apply. ……” The interest rates as stipulated in s.24(1) and s.25(3) were amended by the Legislative Council in 2022, and those amendments came into effect on 30 December 2022. Prior to those amendments, the interest rates as stipulated in s.24(1) and s.25(3) were “60 per cent per annum” and “48 per cent per annum” respectively. These figures should apply in considering whether the LA has contravened s.24 or s.25 of the MLO. As defined in MLO s.2, interest “does not include any sum lawfully agreed to be paid in accordance [with the MLO] on account of stamp duty or other similar duty, but save as aforesaid includes any amount (by whatever name called) in excess of the principal, which amount has been or is to be paid or payable in consideration of or otherwise in respect of a loan”. The “effective rate of interest” in s.24(1) and s.25(3) refer to the interest rate charge before the borrower defaults on repayment and does not cover the interest rate in a scenario of default. Accordingly, in considering whether the LA has contravened s.24 or s.25, the default scenario specified in Clause 3.3 should not be taken into account. Under the LA, the interest (including everything deemed to be interest by the MLO) is the following: the monthly interest of 3% as set out in Clause 3.1; and the 10% loan fee mentioned in Clause 3.2. The parties before me have put forward their respective calculations as to the interests on the 28 loans as shown in the LA. There is no dispute that in respect of each and every loan as recorded in the LA, the interest rate is less than 60% per annum. Thus, there is no contravention of s. 24(1) of the MLO. As to MLO s.25, as said in the above, Mr Ng has told me that P is prepared not to claim the 10% loan fee in respect of each loan as shown in the LA. That being the case, the interest rate on each loan as shown in the LA until the repayment date (ie 30 April 2015) is 36% per annum. Accordingly, MLO s.25 is not applicable. D5. Other matters In their final submissions, Ds have also raised (a) MLO ss.18, 20(1) and 27; (b) the issue of undue influence; and (c) the issue of default interest in Clause 3.3 of the Loan Agreement. In my view, Ds cannot derive any assistance from these matters. First, Ds have not raised all these matters in their pleadings. Had these matters been raised by Ds in their pleadings, the matters would have had been investigated at the discovery stage, and P would have had an opportunity to adduce evidence on those matters. Without raising these matters in their pleadings, Ds are not entitled to raise those points in their final submissions. Second, MLO ss.18, 20(1) and 27 only apply to “money lender”. Since Ds have failed to plead the relevant material facts and have failed to prove that P was a money lender at the material times, these sections would not be applicable. Third, in relation to undue influence, Ds have confirmed in their opening that they would not dispute P’s factual case and would only rely upon the defences under the MLO. Ds cannot go back on their own words in their final submissions. Fourth, as to Clause 3.3 of the Loan Agreement, P has made it clear that he is not relying upon Clause 3.3 and no claim is made pursuant to that clause. D6. Conclusion In my judgment, P’s claim against D3 and D4 should be allowed. There be judgment that D3 and D4 be jointly and severally liable to repay each of the 28 loans to P. In respect of each loan, the principal to be repaid is the actual amount advanced by P to D1 and D2. There be interest on each loan at the interest rate of 36% per annum until 30 April 2015. As to the interest from 1 May 2015 onwards, following the Court of Appeal’s decision in Gain East Investment Ltd v Chan Po Wing, the interest rate is prime plus 1% to the date of this judgment, and thereafter at the judgment rate until payment. Corresponding credits should be given to D3 and D4 due to the Repayments. DISPOSITION Judgment is given to P as shown in the above. The parties have agreed that costs should follow the event. Save and except the costs which have already been dealt with by costs order(s) made in these proceedings, costs of these proceedings (including all costs reserved, if any) be paid by D3 and D4 to P, to be taxed if not agreed. There be a certificate for two counsel. (MK Liu) Deputy High Court Judge Mr Lawrence K F Ng and Mr Victor T S Lui, instructed by Iu, Lai & Li, for the Plaintiff The 3rd and the 4th Defendants appeared in person