JOHN ROBERT LEES and TSUI CHI CHIU, the Joint and Several Liquidators of GMF FINANCE LTD (in Creditors’ Voluntary Liquidation) v. CLOUTIER GUY EVON HUANG JIALIN

JOHN ROBERT LEES and TSUI CHI CHIU, the Joint and Several Liquidators of GMF FINANCE LTD (in Creditors’ Voluntary Liquidation) v. CLOUTIER GUY EVON HUANG JIALIN

The court exercised its discretion under s18(3) MLO to uphold and enforce the loan agreement and registered second charge because the defendants received and used the actual loan amount, suffered no prejudice from the statutory and procedural inaccuracies, the plaintiffs remedied and conceded certain charges and reduced the effective interest to 18.1% p.a., and the defects were severable and insignificant; accordingly the master's order for repayment and possession was upheld and the appeal dismissed.

Citation
[2018] HKCFI 366
Parties
Plaintiff (joint and Several Liquidator of GMF Finance Limited): John Robert Lees; Plaintiff (joint and Several Liquidator of GMF Finance Limited): Tsui Chi Chiu; Defendant (registered Owner of the Property): 1st Defendant; Defendant (registered Owner of the Property): 2nd Defendant
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
28 February 2018
Case Number
HCMP3079/2016
Procedural Posture
Mortgagee Action / Originating Summons Under Money Lenders Ordinance / Appeal From Master's Order — Rehearing on Summons (hcmp 3079/2016)
Outcome
Appeal dismissed; master's order upheld in all material respects
Legal Topics
Enforceability of Loan Agreements, Statutory Compliance With Money Lenders Ordinance, Section 18(3) Discretionary Relief, Default Interest and Penalties, Severance Clause, Order 88 Rules of the High Court Non Compliance, Costs (indemnity Basis)
Source Language
EN
Moneylenders Law Contract Law Property Law Insolvency and Liquidation Civil Procedure Enforceability of Loan Agreements Statutory Compliance With Money Lenders Ordinance Section 18(3) Discretionary Relief +4 more

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Parties

John Robert Lees

Plaintiff (joint and Several Liquidator of GMF Finance Limited)

Tsui Chi Chiu

Plaintiff (joint and Several Liquidator of GMF Finance Limited)

1st Defendant

Defendant (registered Owner of the Property)

2nd Defendant

Defendant (registered Owner of the Property)

Procedural Posture

Mortgagee Action / Originating Summons Under Money Lenders Ordinance / Appeal From Master's Order — Rehearing on Summons (hcmp 3079/2016)

Legal Issues

  1. 1 Whether breaches of the Money Lenders Ordinance (incorrect principal and interest disclosures, upfront charges, penalty/early repayment restriction) render the loan agreement and security unenforceable
  2. 2 Whether the court should exercise discretion under s18(3) MLO to uphold an otherwise non-compliant agreement
  3. 3 Whether the default/enhanced interest rate and upfront charges are unlawful and/or render the agreement unenforceable

Ratio Decidendi

The court exercised its discretion under s18(3) MLO to uphold and enforce the loan agreement and registered second charge because the defendants received and used the actual loan amount, suffered no prejudice from the statutory and procedural inaccuracies, the plaintiffs remedied and conceded certain charges and reduced the effective interest to 18.1% p.a., and the defects were severable and insignificant; accordingly the master's order for repayment and possession was upheld and the appeal dismissed.

Court Disposition

Appeal dismissed; master's order upheld in all material respects

Orders

  • The sum of HK$6,377,248.79 to be paid by the defendants to the plaintiffs with interest from date of decision at 18.1% per annum
  • Vacant possession of the Property (2nd Floor, Tower 5 Avignon and car parking space P220) to be delivered by the defendants to the plaintiffs within 21 days of the order