TREASURE SPOT FINANCE CO LTD v. LI CHIK MING AND ANOTHER

TREASURE SPOT FINANCE CO LTD v. LI CHIK MING AND ANOTHER

Applying the wide discretion in ss.18(3) and 22(2), and balancing the parties' relative statuses, the nature of the breaches and the statutory protective purpose, the court partially enforced the loans: the 1st Defendant was ordered to repay a specified sum representing amounts advanced to redeem prior mortgages (HKD 1,113,044) without interest and released from repayment of the remainder; the 2nd Defendant, having not defended, was held liable for the three loans with interest at 40% p.a. for one year then judgment rates; costs ordered so each party bears own in respect of disputes between Plaintiff and 1st Defendant, and 2nd Defendant to pay limited costs to Plaintiff.

Citation
TREASURE SPOT FINANCE CO LTD v. LI CHIK MING AND ANOTHER
Parties
Moneylender/plaintiff: Plaintiff; Defendant (borrower): 1st Defendant; Defendant (borrower/non Appearing): 2nd Defendant
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
3 December 2007
Case Number
HCA5387/2001
Procedural Posture
Civil Moneylenders/contract / Final Judgment on Exercise of Discretionary Relief Under Money Lenders Ordinance
Outcome
Judgment partly for Plaintiff: 1st Defendant ordered to pay HKD 1,113,044 (without interest) and upon payment security to be released; remainder of three loans not payable by 1st Defendant; 2nd Defendant held liable for three loans with interest at 40% p.a. for one year then judgment rates; costs: parties to bear...
Legal Topics
Unenforceability, Exercise of Judicial Discretion, Prejudice, Usury/interest Rates, Statutory Compliance
Source Language
EN
Money Lenders Ordinance Contract Law Equity Unenforceability Exercise of Judicial Discretion Prejudice Usury/interest Rates Statutory Compliance

Case Brief

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Parties

Plaintiff

Moneylender/plaintiff

1st Defendant

Defendant (borrower)

2nd Defendant

Defendant (borrower/non Appearing)

Procedural Posture

Civil Moneylenders/contract / Final Judgment on Exercise of Discretionary Relief Under Money Lenders Ordinance

Legal Issues

  1. 1 Whether breaches of ss.18(1) and 22(1) of the Money Lenders Ordinance render loan agreements unenforceable
  2. 2 Whether the court should exercise its discretion under ss.18(3) and 22(2) to declare agreements enforceable in whole or in part
  3. 3 What factors and principles govern the balancing exercise (including prejudice to borrower, conduct of lender, relative status of parties, rate of interest)

Ratio Decidendi

Applying the wide discretion in ss.18(3) and 22(2), and balancing the parties' relative statuses, the nature of the breaches and the statutory protective purpose, the court partially enforced the loans: the 1st Defendant was ordered to repay a specified sum representing amounts advanced to redeem prior mortgages (HKD 1,113,044) without interest and released from repayment of the remainder; the 2nd Defendant, having not defended, was held liable for the three loans with interest at 40% p.a. for one year then judgment rates; costs ordered so each party bears own in respect of disputes between Plaintiff and 1st Defendant, and 2nd Defendant to pay limited costs to Plaintiff.

Court Disposition

Judgment partly for Plaintiff: 1st Defendant ordered to pay HKD 1,113,044 (without interest) and upon payment security to be released; remainder of three loans not payable by 1st Defendant; 2nd Defendant held liable for three loans with interest at 40% p.a. for one year then judgment rates; costs: parties to bear...

Orders

  • 1st Defendant to pay HKD 1,113,044 to Plaintiff within 30 days of sealing of order
  • Upon payment by 1st Defendant Plaintiff to release and reassign all securities held for the three loans to the 1st Defendant or his direction