ONTONE FINANCE CO LTD v. MS LEUNG LAI CHING, MARGARET AND ANOTHER

ONTONE FINANCE CO LTD v. MS LEUNG LAI CHING, MARGARET AND ANOTHER

The first defendant's full repayment defence was implausible and unsupported; although clause for increased default rate arguably contravened s22(1)(c), the court may exercise s22(2) in summary proceedings where equities permit; because the plaintiff did not seek to charge the higher default rate, maintained full records and showed no sharp practice while the defendant acted in bad faith, it was equitable to excise the offending paragraph and enforce the loan agreements otherwise; accordingly summary judgment was entered for the plaintiff for the outstanding sum with contractual interest from 1 March 2011 and judgment interest thereafter.

Citation
ONTONE FINANCE CO LTD v. MS LEUNG LAI CHING, MARGARET AND ANOTHER
Parties
Plaintiff (licensed Moneylender): Ontone Finance Company Ltd; First Defendant (borrower): Leung Ching, Margaret; Second Defendant (guarantor): Second Defendant
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
13 August 2012
Case Number
HCA372/2011
Procedural Posture
Moneylender's Action Under the Money Lenders Ordinance / Summary Judgment Application (order 83 A/order 14 Proceedings)
Outcome
Final judgment entered for the plaintiff
Legal Topics
Illegality, Usury, Summary Judgment, Interest, Enforceability
Source Language
EN
Money Lending Contract Civil Procedure Illegality Usury Summary Judgment Interest Enforceability

Case Brief

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Parties

Ontone Finance Company Ltd

Plaintiff (licensed Moneylender)

Leung Ching, Margaret

First Defendant (borrower)

Second Defendant

Second Defendant (guarantor)

Procedural Posture

Moneylender's Action Under the Money Lenders Ordinance / Summary Judgment Application (order 83 A/order 14 Proceedings)

Legal Issues

  1. 1 Whether the first defendant's full repayment defence raised a triable issue
  2. 2 Whether clause providing for increased rate on default contravened s22(1)(c) of the Money Lenders Ordinance and rendered the agreements unenforceable
  3. 3 Whether the court may and should exercise the equitable discretion under s22(2) in summary proceedings

Ratio Decidendi

The first defendant's full repayment defence was implausible and unsupported; although clause for increased default rate arguably contravened s22(1)(c), the court may exercise s22(2) in summary proceedings where equities permit; because the plaintiff did not seek to charge the higher default rate, maintained full records and showed no sharp practice while the defendant acted in bad faith, it was equitable to excise the offending paragraph and enforce the loan agreements otherwise; accordingly summary judgment was entered for the plaintiff for the outstanding sum with contractual interest from 1 March 2011 and judgment interest thereafter.

Court Disposition

Final judgment entered for the plaintiff

Orders

  • Final judgment entered against the first defendant for the sum of $3,723,054.80
  • Interest on the sum of $1,000,000 at the rate of 36% per annum from 1 March 2011 to the date of this order and thereafter at judgment rate until payment