CENTRAL SOUTHWOOD LTD v. MA WAI KIN AND ANOTHER

CENTRAL SOUTHWOOD LTD v. MA WAI KIN AND ANOTHER

On a provisional assessment the defendants' evidence could well be believed at trial that the loan transaction was a domestic arrangement cloaked as a PRC loan to avoid the MLO, the choice of PRC law was not bona fide, and therefore the principal loan and the indemnity may be unenforceable; accordingly the 1st Defendant established a meritorious defence and the regular judgment and charging order must be set aside and discharged and leave given to defend.

Citation
[2019] HKDC 457
Parties
Plaintiff: Plaintiff; Defendant: 1st Defendant; Defendant: 2nd Defendant
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
8 April 2019
Case Number
DCCJ3343/2016
Procedural Posture
Civil Claim Indemnity/contract/moneylending / Application to Set Aside Default Judgment
Outcome
Default judgment set aside; Charging Order Nisi discharged; 1st Defendant granted leave to defend and to file a Defence; costs order nisi made
Legal Topics
Setting Aside Default Judgment, Charging Order, Sham Transactions, Application of Money Lenders Ordinance, Unconscionable Contracts, Proper Law of Contract, Prejudice and Delay
Source Language
EN
Money Lenders Law Contract Law Civil Procedure Equity Choice of Law Mental Capacity Law Setting Aside Default Judgment Charging Order +5 more

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Parties

Plaintiff

Plaintiff

1st Defendant

Defendant

2nd Defendant

Defendant

Procedural Posture

Civil Claim Indemnity/contract/moneylending / Application to Set Aside Default Judgment

Legal Issues

  1. 1 Whether the 1st Defendant has a meritorious defence sufficient to set aside a regular/default judgment
  2. 2 Whether the loan and indemnity are enforceable or a sham to evade the Money Lenders Ordinance (MLO)
  3. 3 Whether the choice of PRC law is bona fide or an attempt to avoid the MLO

Ratio Decidendi

On a provisional assessment the defendants' evidence could well be believed at trial that the loan transaction was a domestic arrangement cloaked as a PRC loan to avoid the MLO, the choice of PRC law was not bona fide, and therefore the principal loan and the indemnity may be unenforceable; accordingly the 1st Defendant established a meritorious defence and the regular judgment and charging order must be set aside and discharged and leave given to defend.

Court Disposition

Default judgment set aside; Charging Order Nisi discharged; 1st Defendant granted leave to defend and to file a Defence; costs order nisi made

Orders

  • Set aside the judgment entered in default on 27 September 2016 against the 1st Defendant and set aside execution issued thereon
  • Discharge the Charging Order Nisi dated 6 October 2016 against the 1st Defendant's interest in the Property and vacate any Land Registry registration