FU TAT CREDIT LTD v. LAU WAI MAN

FU TAT CREDIT LTD v. LAU WAI MAN

The appeal is allowed because on the evidence before the court the Father and Son have put forward arguable defences of undue influence and that the Plaintiff's loans may be tainted by illegality arising from prior related-company loans; given the close relationships, non-disclosure and suspicious payment patterns, it is fair to permit trial and forensic discovery rather than uphold default judgments entered by the Master.

Citation
FU TAT CREDIT LTD v. LAU WAI MAN
Parties
Plaintiff: Fu Tat; Defendant (father): Lau Yung Tai; Defendant (son): Lau Wai Man
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
14 October 2016
Case Number
HCA1773/2012
Procedural Posture
Civil Money Lender Claims / Appeal From Master to Judge in Chambers (rehearing) Following Applications for Default Judgment and Leave to Enter Judgment
Outcome
Appeal allowed; orders of the Master set aside; leave granted to the Father and Son to defend the Plaintiff's claims
Legal Topics
Default Judgment, Undue Influence (class 2 B), Sham Transactions, Illegality and Public Policy, Severance of Illegal Terms, Burden of Proof for Licensing
Source Language
EN
Money Lending Contract Equity Civil Procedure Public Policy/illegality Default Judgment Undue Influence (class 2 B) Sham Transactions +3 more

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Parties

Fu Tat

Plaintiff

Lau Yung Tai

Defendant (father)

Lau Wai Man

Defendant (son)

Procedural Posture

Civil Money Lender Claims / Appeal From Master to Judge in Chambers (rehearing) Following Applications for Default Judgment and Leave to Enter Judgment

Legal Issues

  1. 1 Whether defendants have an arguable defence of undue influence by the Son over the Father
  2. 2 Whether the Plaintiff's loans are tainted by illegality because they were used to repay prior illegal loans of related companies (sham)
  3. 3 Whether the Plaintiff must disclose and prove that related companies were licensed money lenders and that prior agreements were enforceable

Ratio Decidendi

The appeal is allowed because on the evidence before the court the Father and Son have put forward arguable defences of undue influence and that the Plaintiff's loans may be tainted by illegality arising from prior related-company loans; given the close relationships, non-disclosure and suspicious payment patterns, it is fair to permit trial and forensic discovery rather than uphold default judgments entered by the Master.

Court Disposition

Appeal allowed; orders of the Master set aside; leave granted to the Father and Son to defend the Plaintiff's claims

Orders

  • Master's judgments set aside and appeals allowed
  • Father and Son granted leave to defend and to file and serve Defences within 28 days