EVER-LONG CAPITAL LTD v. FIRST STAR ENTERTAINMENT GROUP LTD AND OTHERS

EVER-LONG CAPITAL LTD v. FIRST STAR ENTERTAINMENT GROUP LTD AND OTHERS

On a plain contextual construction Clauses 6.2 and 6.3 prescribe default interest at the defined Interest Rate of 27% and Schedule VI’s 36% is an inconsistent typographical entry; therefore the Loan Agreement does not contravene s.22(1)(c) MLO. The Facility Agreements were framework sale mechanisms and on their face did not create enforceable loan obligations incorporating a separate late payment charge; the loan facility was calculated without any late payment charge, so there is no arguable common law illegality. The defendants raised no triable issues; summary judgment must stand and the appeal is dismissed.

Citation
[2021] HKCFI 3344
Parties
Plaintiff: Ever-Long Capital Limited; 1st Defendant: First Star Entertainment Group Limited; 2nd Defendant: Cheng Lai Pan; 3rd Defendant: Cheng Man Wing Shirley; 4th Defendant: Cheung Kin Wilson
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
12 November 2021
Case Number
HCA929/2020
Procedural Posture
Civil Loan Enforcement / Money Lender Claim / Appeal From Master Against Summary Judgment (rehearing)
Outcome
Appeal dismissed; summary judgment upheld
Legal Topics
Summary Judgment, Default Interest, Illegal Contracts, Contract Interpretation, Guarantees
Source Language
EN
Contract Law Money Lenders Ordinance Civil Procedure Common Law Illegality Summary Judgment Default Interest Illegal Contracts Contract Interpretation +1 more

Case Brief

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Parties

Ever-Long Capital Limited

Plaintiff

First Star Entertainment Group Limited

1st Defendant

Cheng Lai Pan

2nd Defendant

Cheng Man Wing Shirley

3rd Defendant

Cheung Kin Wilson

4th Defendant

Procedural Posture

Civil Loan Enforcement / Money Lender Claim / Appeal From Master Against Summary Judgment (rehearing)

Legal Issues

  1. 1 Whether default interest provisions of the Loan Agreement contravene s.22(1)(c) of the Money Lenders Ordinance
  2. 2 Whether the prior Facility Agreements and Promissory Notes were illegal under s.22(1) MLO such that the Loan Agreement is for an illegal purpose at common law
  3. 3 Whether defendants have raised any arguable defence or triable issue to defeat summary judgment

Ratio Decidendi

On a plain contextual construction Clauses 6.2 and 6.3 prescribe default interest at the defined Interest Rate of 27% and Schedule VI’s 36% is an inconsistent typographical entry; therefore the Loan Agreement does not contravene s.22(1)(c) MLO. The Facility Agreements were framework sale mechanisms and on their face did not create enforceable loan obligations incorporating a separate late payment charge; the loan facility was calculated without any late payment charge, so there is no arguable common law illegality. The defendants raised no triable issues; summary judgment must stand and the appeal is dismissed.

Court Disposition

Appeal dismissed; summary judgment upheld

Orders

  • Defendants\' appeal dismissed.
  • Summary judgment previously entered against the Defendants for HK$13,569,536.72 with interest at 27% per annum compounded monthly from 10 June 2020 to date of judgment and thereafter at judgment rate is affirmed.