CHINA SUN FINANCE COMPANY LTD v. MORALITY INTERNATIONAL TRADING LTD AND OTHERS

CHINA SUN FINANCE COMPANY LTD v. MORALITY INTERNATIONAL TRADING LTD AND OTHERS

The court found a triable issue whether the Default Interest Provision in the Facility Letter forms part of the loan agreement and contravenes s22(1)(c) of the Money Lenders Ordinance; because factual disputes exist on that and related allegations, the matter is not suitable for summary determination on affidavit and requires trial or further procedural steps (including possible conversion to writ).

Citation
[2023] HKCFI 2150
Parties
Licensed Money Lender (lender): Plaintiff; Borrower (company): 1st Defendant; Guarantor: 2nd Defendant; Guarantor and Manager of 1st Defendant: 3rd Defendant
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
18 August 2023
Case Number
HCMP2131/2016
Procedural Posture
Miscellaneous Proceedings (order 88 Originating Summons) / Interlocutory Hearing on Originating Summons for Summary Judgment
Outcome
Summary judgment refused; triable issues identified concerning the legality of the Default Interest Provision under s22(1)(c); matter to proceed to trial or further procedural steps including possible conversion to writ.
Legal Topics
Default Interest, Illegality Under S22 MLO, Unenforceability, Summary Judgment, Conversion to Writ (rhc R8), Collusion and Set Off (s27 Mlo)
Source Language
EN
Contract Money Lenders Ordinance Property Equity Civil Procedure Default Interest Illegality Under S22 MLO Unenforceability +3 more

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Parties

Plaintiff

Licensed Money Lender (lender)

1st Defendant

Borrower (company)

2nd Defendant

Guarantor

3rd Defendant

Guarantor and Manager of 1st Defendant

Procedural Posture

Miscellaneous Proceedings (order 88 Originating Summons) / Interlocutory Hearing on Originating Summons for Summary Judgment

Legal Issues

  1. 1 Whether the Default Interest Provision in the Facility Letter contravenes s22(1)(c) of the Money Lenders Ordinance (Default Interest Issue)
  2. 2 If contravention established, whether the court should exercise its discretion under s22(2) to enforce the agreement and permit recovery of principal and contractual interest (Discretion Issue)
  3. 3 Whether the plaintiff colluded in contravention of s27 of the MLO so as to give rise to set-off or other relief (Collusion/Set-off Issue)

Ratio Decidendi

The court found a triable issue whether the Default Interest Provision in the Facility Letter forms part of the loan agreement and contravenes s22(1)(c) of the Money Lenders Ordinance; because factual disputes exist on that and related allegations, the matter is not suitable for summary determination on affidavit and requires trial or further procedural steps (including possible conversion to writ).

Court Disposition

Summary judgment refused; triable issues identified concerning the legality of the Default Interest Provision under s22(1)(c); matter to proceed to trial or further procedural steps including possible conversion to writ.

Orders

  • Summary judgment refused
  • Triable issues identified on the legality of the Default Interest Provision under s22(1)(c)