Hong Kong Case Law: Decisions & Judgments

Topic

Set‑off under s27(4)

Legal area

Court

24 May 2024

SHUN ON FINANCE LTD v. LEUNG CHUN WA

Citation

[2024] HKCFI 1359
Court

Court of First Instance
Case number

HCMP1196/2016

The court found the plaintiff colluded with intermediaries (Demon/Chu/F&M) in procuring the loan such that payments extracted by those intermediaries were unlawful under s27(3); the principal paid to the intermediaries was set off under s27(4) reducing the loan to zero, and the plaintiff breached s18(1)/(2) requirements such that, applying s18(3) in all the circumstances (including the collusion and the borrower’s vulnerability), the court would not exercise its discretion to enforce the loan or mortgage; accordingly the plaintiff’s claim was dismissed and the defendant’s counterclaim granted.
15 Jan 2024

OCEAN ALLIED FINANCE LTD v. SZE, LILY

Citation

[2024] HKDC 86
Court

District Court
Case number

DCCJ2977/2021

The retained HK$165,000 was properly treated as prepayment of six months' interest and must be disregarded from the principal under s2(3) MLO; the defendant failed to prove that the intermediary was the plaintiff's agent or that the plaintiff colluded with the intermediary; accordingly the effective interest rate is HK$330,000/(HK$1,100,000−HK$165,000)=35.3% which is lawful, so the agreement is enforceable and the plaintiff is entitled to judgment for the principal plus interest at 30% p.a. from 21 April 2021.
16 Feb 2022

ACTUALLY FINANCIAL LTD v. SO YAT

Citation

[2022] HKDC 100
Court

District Court
Case number

DCCJ2166/2019

Defendant failed to prove on the balance of probabilities that INC and/or Chung Shun acted for or in collusion with the plaintiff; there was credible evidence that the defendant initiated contact with the plaintiff and no credible link tying the Disputed Fees to the plaintiff; consequently the Disputed Fees cannot be treated as 'interest' for s24 calculation and the effective rate remains 24% p.a. within the statutory limit; plaintiff entitled to judgment for outstanding loan with contractual interest and costs.
20 Jan 2022

ACTUALLY FINANCIAL LTD v. WONG PUI MIU

Citation

[2022] HKDC 82
Court

District Court
Case number

DCCJ3317/2020

Court found the plaintiff and intermediaries were 'playing the same game' (collusion); sums of $600,000 consultancy fee, $201,600 withheld instalments and $51,200 labelled fees were not amounts actually lent and/or were payments in relation to obtaining the loan and fell within s27; deducting those sums produced a deemed principal of $347,200 and contractual/ deemed interest of $403,200 yielding an effective annual rate of 116.129% which exceeds 60% under s24, rendering the loan agreements unlawful and unenforceable and justifying dismissal of the plaintiff's claim and entitlement of the defe…

Hong Kong Case Law

SHUN ON FINANCE LTD v. LEUNG CHUN WA

OCEAN ALLIED FINANCE LTD v. SZE, LILY

ACTUALLY FINANCIAL LTD v. SO YAT

ACTUALLY FINANCIAL LTD v. WONG PUI MIU