Reference: (2019) Jing 04 Min Chu 630 Hao
Date: December 05, 2019
Issued By: Beijing No.4 Intermediate People's Court
Plaintiff: China Construction Bank (Asia) Co., LTD., domiciled in 28／F，CCB Tower, 3 Connaught Road, Central, Hong Kong.
Authorized legal representative: Wu Zhaowen, Vice CEO.
Attorney：Zhou Liang, Dentons Law Firm (Guangzhou)
Attorney: Fang Huimin, Dentons Law Firm (Guangzhou)
Defendant: Li Hongfeng, male, ethnic Han, born on 12 November 1978, domiciled in Xicheng District, Beijing
The case between the plaintiff, China Construction Bank (Asia) Co., LTD. (hereinafter referred to as CCB Asia), and the defendant, Li Hongfeng, concerning the dispute over the financial loan contract, was accepted by the Beijing No.4 Intermediate People's Court (hereinafter referred to as the Court) on July 17, 2019. The plaintiff did not declare the existence of an arbitration agreement when filing the suit with the Court, and the defendant didn't appear in court as his whereabouts is still unknown, so the case should be in the charge of courts. On the issue of the jurisdiction, given that the plaintiff, CCB Asia, was incorporated in the Hong Kong Special Administrative Region (hereinafter referred to as Hong Kong) and the defendant, Li Hongfeng, was domiciled in Beijing, the Court has jurisdiction over this case, in accordance with Article 551 of the Interpretation of the Supreme People's Court on the Interpretation of SPC of the Application of the Civil Procedure Law of the People's Republic of China (hereinafter referred to as the Judicial Interpretation of the Civil Procedure Law), and with reference to Articles 259 and 23 of the Civil Procedure Law of the People's Republic of China (hereinafter referred to as the Civil Procedure Law) and Article 1 item 2 of the Provisions of Beijing higher people's court on the jurisdiction of cases of Beijing no. 4 intermediate people's court (revised in 2018). The Court established a collegiate bench in accordance with the law, which was composed of Chief Judge Gao Jing and two adjudication members, Judge Ji Dong and Judge Cui Zhiyu. Later Judge Ji Dong and Judge Cui Zhiyu were replaced by people's jurors Huang Xiaoya and Wang Ziheng and the ordinary procedure was applied in accordance with law, with the trial held in public on November 22,2019. The plaintiff's attorney Zhou Liang appeared in court, but defendant Li Hongfeng did not appear in court after the service of summons by public notice. The case has been decided and is closed now.
The plaintiff CCB Asia brought its claims requesting the Court to order that: 1. Li Hongfeng should immediately payoff the loan principal of HKD500,000 and the interest of HKD15,673.92 and other fees, including interest in arrears on overdue loan principal and the interest thereof (8.25% on the overdue principal and interest in each installment, starting from the day the interest in arrears exists till the day it is all paid off) and the service charge (2% on the overdue principal and interest in each installment and is calculated up to May 15, 2019 for this moment). The aforementioned interest in arrears and the service charge are HKD130,107.25 in total. 2. Li Hongfeng shall bear all the expenses incurred by CCB Asia for enforcing its rights, including the law ascertainment fee of RMB 45,000, the attorney fee of RMB 100,000, the public notice fee of RMB 200, and the notarization and transfer fee of HKD21,600. 3. Li Hongfeng shall bear the litigation fee in this case.
Facts and reasoning：
First, CCB Asia established the loan contract relationship with Li Hongfeng, and CCB Asia had issued loans to Li Hongfeng. On June 15, 2015, Li Hongfeng, an employee of CCB Beijing Branch, submitted personal loan applications to CCB Asia through CCB Asia's online banking system. On June 25, 2015, Li Hongfeng signed the Loan Acceptance Letter, and the loan contract between the two parties was established. Later, CCB Asia has sent to Li Hongfeng the CCB (Asia) Personal Loan Confirmation and CCB (Asia) (Staff Personal Loan) Terms and Rules for One-time Repayment of the Loan (hereinafter referred to as Loan Terms and Rules) as part of the loan contract. The loan contract stipulates that CCB Asia shall issue a personal loan of HKD500,000 to Li Hongfeng, the repayment term for which is one year,, and the interest shall be repaid every three months. If Li Hongfeng fails to repay the loan as scheduled, CCB Asia has the right to charge interest and service fees on overdue payment, and Li Hongfeng shall bear all expenses paid by CCB Asia for the enforcement of its rights. CCB Asia has issued a loan of HKD 500,000 to Li Hongfeng on July 24, 2015 as agreed in the contract, and Li Hongfeng has withdrawn the loan of HKD 500,000 on July 29 and July 31.
Seceond, Li Hongfeng failed to repay the principal and interest as agreed, seriously damaging plaintiff's rights and interests. Li Hongfeng only repaid the interest of HKD5,356.16 in the first installment in October 2015, but since then he has not repaid any remaining interest and principal.
In accordance with the loan contract, CCB Asia deducted HKD 44.74 and RMB 197.12 from the defendant's account on May 13, 2016 to repay the debt. After several collection attempts by CCB Asia, Li Hongfeng still failed to perform his obligation to repay. Up to May 15, 2019, according to the loan contract, Li Hongfeng still owes the loan principal (HKD 500,000), the interest thereof ( HKD 15,673.92), and interest in arrears as well as the service charge on the aforesaid overdue principal and interest (HKD 130,107.25 in total) up to May 15, 2019. Li Hongfeng's failure in performance has seriously damaged the legitimate rights and interests of CCB Asia. In order to enforce its rights, CCB Asia has incurred a total of RMB145,000 including law ascertainment fee and attorney fee, public notice fee of RMB 200 and notarization and transfer fee of HKD 21,600. CCB Asia has entrusted Benchmark Chambers International & Benchmark International Mediation Center (BCI & BIMC) to provide opinions on issues related to the legal validity and enforceability of the contracts involved under Hong Kong Law. Besides, Tsang Man Hing, solicitor at Tsang Chan & Woo Solicitors (Hong Kong) issued a letter of legal opinion. . Following from the above, CCB Asia has filed this lawsuit in accordance with relevant laws and actual conditions.
Li Hongfeng did not appear in court after the service of summon, neither did he reply to the claims against him.
CCB Asia submitted the following evidence materials with respect to its claims:
1. Personal Loan Application through Online Banking 2. Authorization Letter issued by Li Hongfeng and his Employment and Income Certificate; 3. Personal Account Application Form; 4.Terms and Conditions for Account and Related Services (Personal Account); 5. Terms and Conditions for Online Banking Services; 6. CCB (Asia) Personal Loan Acceptance Letter; 7. CCB (Asia) Personal Loan Confirmation Letter; 8. Terms and Rules for Loan; 9. Email Authorization Letter; 10-12&15. Bank Statement of Li Hongfeng's Personal Account; 13-14. Letter to Li Hongfeng by CCB Asia; 16. Confidential Private Letter; 17. Payment Reminder Letter; 19. Special Legal Service Contract; 20-21. Attorney fee invoice and payment voucher; 22. Contract on the Entrustment of Law Ascertainment Services; 23. Notice of Advance Payment; 24. Payment receipt (1); 25. Bill for Notarization and Transfer; 26. Payment receipt (2);27. Legal Opinion; 28. Letter on the Completion of Law Ascertainment Services; 29-31. Notarized Documents. The Court has confirmed and documented the evidence. The Court decided that Evidence 18 provided by CCB Asia, namely, the list of overdue principal and interest unpaid by Li Hongfeng, is made by CCB (Asia) itself and shall not be used as a basis for ascertaining the facts of the case.
Based on the statements of the parties and the examined evidence, the court confirms the facts as follows:
I. The conclusion and performance of the concerned financial loan contract
On June 15, 2015, Li Hongfeng, as an employee of CCB, submitted a personal loan application to CCB Asia through CCB Asia's online banking system, for the loan of HKD500,000. On June 23,2015, Li Hongfeng signed the CCB (Asia) Personal Loans Acceptance Letter, where it is stated that: The loan amount is HKD 500,000, and its term for repayment is 12 months, where the interest is at the prime rate of 2-1%, and the term for interest is every 3 months, and the method for repayment is: repayment of the interest every 3 months and one-time repayment of principal once it is due (i.e. the interest in the last installment together with the principal shall be paid on the due date; the service charge for overdue payments is 2% of the overdue payments in each installment (HKD 100 at minimum); the interest in arrears on overdue payments is the 2nd prime rate plus 3%. On 25 June of the same year, Li Hongfeng signed an e-Email Authorization Letter to CCB Asia, in which it is stated that the authorized email address is XXXXXXX @ XXX.com; Li Hongfeng further authorized CCB Asia to send information to the aforementioned email address (including but not limited to Li Hongfeng's bank service relationship, account information and loan credit information) and confirmed that all instructions and transactions arising from the authorized email address are valid, binding and enforceable under the terms and rules applicable to the transaction. On 9 July of the same year, Li Hongfeng completed the Personal Account Application Form, confirming that he had read and understood the Terms and Conditions for Account and Related Services (Personal Account) and his personal account numbers were 12880458,12880466,128 80474, and 12880482.
On July 24, 2015, CCB Asia sent CCB (Asia) Personal Loan Confirmation Letter (hereinafter referred to as Loan Confirmation Letter) and Terms and Rules for Loan to Li Hongfeng via email. The Loan Confirmation Letter states: CCB Asia issued a personal loan of HKD 500,000 to Li Hongfeng on July 24, 2015 for a term of 12-month, and it will be due on July 24, 2016, where the interest is at the prime rate of 2-1% (i.e. 4.25 per cent per year). The repayment account is Li Hongfeng's account XXXXXXXXXXXXXXX in CCB Asia, with the first repayment of interest, HKD 5356.16, to be made on October 24,2015, followed by the repayment of interest, HKD 5356.16, to be made on January 24,2016, and HKD 5297.95 to be made on April 24,2016, and repayment of the principal, HKD 500,000, and interest thereof, HKD 5297.95, to be made on 24 July 2016; the service charge is 2% of the overdue payment in each installment (HKD 100 at minimum); the interest in arrears on overdue payments is the second prime rate plus 3%. The Terms and Rules for Loan stipulates that: 11. The Borrower hereby requests and authorizes CCB Asia to deduct amount of each instalment and any related fees/charges from the account designated by the Borrower in the loan application form, and to divide the amount into interest, principal and other amounts due, as CCB Asia desires.15. CCB Asia is entitled to, at any time, without prior notice to the Borrower, use the Borrower's deposits in any individual and/or joint account (including time deposit account) in CCB Asia to repay the debt the Borrower owed to CCB Asia that arises from the loan contract. 16. CCB Asia reserves all rights in charging any reasonable fees/expenses (whether for legal purpose or otherwise) arising from the enforcement of its rights, without limits under the aforementioned terms and rules, CCB Asia has the rights to hire any debt collection company or recovery agency to recover any overdue payments, and the Borrower is required to reimburse CCB Asia with any and all reasonable expenses incurred by CCB Asia. 17. Payment will be made first to cover interest or financial charges, then legal and other fees and expenses, and then the principal of the loan, subject to payment of the longest arrears in the aforementioned projects. 30. Any account statement, notice or other correspondence issued by CCB Asia to the Borrower under this article will be deemed to have been received two days after it is sent to the address the Borrower notified CCB Asia through the latest written notice. 31. These terms and rules as well as the contract between CCB Asia and the Borrower are governed by the laws of the Hong Kong Special Administrative Region and the Borrower is subject to the non-exclusive jurisdiction of the Hong Kong courts.
China Construction Bank Asia issued a loan of HK $500,000 to Li Hongfeng on July 24,2015, after which Li Hongfeng withdrew all the loans of HKD500,000. Li Hongfeng has never repaid the principal of the loan.
On October 26, 2015, CCB Asia deducted the deposit of HKD 5356.16 from the repayment account agreed by both parties to cover the first installment of interest due on the loan. On May 13, 2016, CCB Asia deducted the deposit of HKD 44.74 from the account with its last number being 12880458 opened by Li Hongfeng in CCB Asia and the deposit of RMB 197.12 from the account with its last number being 12880474 (equivalent to HKD 233.40 at the exchange rate of RMB to HKD 1.184 on the day of deduction), both of which were used to repay the interest of the second installment of interest on the loan due. In addition, the defendant had not repaid any interest from then on, and CCB Asia had not deducted any money to pay the interest. The amount of overdue interest owed by Li Hongfeng is HKD 15,673.92 in total.
According to the CCB (Asia) Personal Loan Acceptance Letter and Loan Confirmation Letter, service charges and interest in arrears on such overdue principal and interest are incurred. The service charge is 2% of the overdue repayment amount (overdue principal of HKD 500,000, plus the overdue interest in each installment of HKD 15,952.06, amounting to HKD 515,952.06 in total), i.e. HKD 10,319.04; the interest in arrears is on the overdue interest and principal in each instalment and is collected at the second prime rate (i.e .5.25%) plus 3%, starting from the day the interest in arrears exists till the day it is all paid off.
On August 4, 2017, Fairbirn Catley Low & Kong Law Firm, on behalf of CCB Asia, sent a lawyer's letter to Li Hongfeng, informing him that he still owed HK $537930.85 in principal and interest on the loan until August 4，2017.
II. Related expenses incurred by CCB Asia to enforce its rights in this case
CCB Asia commissioned Dentons Law Firm (Guangzhou) for the legal services related in this case. The two parties signed the Special Legal Service Contract, in which the agreed fee is RMB 100,000, and CCB Asia has actually paid RMB 50,000. CCB Asia commissioned BCI & BIMC to ascertain the Hong Kong laws concerned in this case. The two parties signed the Law Ascertainment Services Entrustment Contract, and CCB Asia has paid the service fee of RMB 45,000. CCB Asia paid a total of HKD 21,600 to Samuel L.C. Yang & Co.Solicitors for the notarization and transfer of documents. During the proceedings, a public notice fee of RMB 200 was also incurred.
III. Ascertainment of Hong Kong law concerned in this case
Legal Opinion was issued by Solicitor Tsang Man Hing, from Hong Kong Tsang Chan & Woo Solicitors, invited by BCI & BIMC, which was entrusted by CCB Asia for Hong Kong law ascertainment. The main contents in the Legal Opinion are as follows:
(I)According to Chapter 553 of Hong Kong law, Electronic Transactions ordinance, Section 17 stipulates that in the context of the formation of contracts, unless otherwise agreed by the parties, an offer and the acceptance of an offer may be in whole or in part expressed by means of electronic records. Section 18 stipulates that unless otherwise agreed between the originator and the addressee of an electronic record, an electronic record is that of the originator if it was sent by the originator or sent with the authority of the originator. Therefore, the submission by Li Hongfeng to CCB Asia or the approval of the submission of the loan application through CCB Asia online banking system is in in compliance with Hong Kong law and is therefore valid.
According to the UK case Brogden v. Metropolitan Railway Co. (1877) LR2.App.Cas.666, in the absence of a prescribed form of acceptance in an offer, the offeror may accept the offer by way of action, provided that the act of the offeror clearly shows that he is accepting the offer (not for any other reason) and that its acceptance must be conveyed to the offeror in order to be valid. In this case, CCB Asia sent the Loan Acceptance Letter as an offer to Li Hongfeng via email, and Li Hongfeng later signed the Loan Acceptance Letter to accept the offer. Therefore, the concerned loan contract was concluded. The Personal Loan Confirmation Letter is a valid offer and the terms of the Terms and Rules for Loan shall be regarded as an integral part of the Personal Loan Confirmation Letter. Li Hongfeng's subsequent acts (including opening an account, withdrawing a loan, depositing a sum of money whose amount is close to that of the interest in the first installment, etc.) shall be deemed to be his consent to accept such terms via acts. Following from the above, the Personal Loan Confirmation Letter and the Terms and Rules for Loan formed a legally valid, binding and enforceable contract under Hong Kong law between Li Hongfeng and CCB Asia.
(II)According to Chapter 163 of Hong Kong law, Money Lender ordinance, Section 3 stipulates that this ordinance shall not apply to—(a)an authorized institution within the meaning of the Banking ordinance (Cap. 155); or (b)as respects a loan made to such an authorized institution, any person who makes such loan. And Chapter 155 Banking ordinance prescribes that authorized institution means a bank, a restricted license bank; or a deposit-taking company. CCB Asia is a licensed bank, which is to say, it is an authorized institution not governed by the Money Lender ordinance. Therefore, the content agreed by the parties on interest rates, repayment schedules, service charge for overdue repayment and interest on overdue payments and etc., in the Personal Loan Confirmation Letter and the Terms and Rules for Loan, do not violate the relevant laws in Hong Kong, and is a voluntary agreement between the parties, which expressed the true intentions of the parties.
(III) At present, Hong Kong has no legislation prescribing the manner and form of collection of debts. In line with Article 30 of the Terms and Rules for Loan, the letter sent by the law firm representing CCB Asia to Li Hongfeng complies with the parties' agreement and does not violate Hong Kong law, and it constitutes a legal and valid collection.
The court decides that the case concerns the dispute over a financial loan contract. For the reason that the plaintiff, CCB Asia, is a licensed bank in Hong Kong, the case is a Hong Kong-related commercial dispute. As for the applicable law, it is stipulated in the Terms and Rules for Loan that the contracts between CCB Asia and the Borrower are subject to Hong Kong law. In accordance with Article 41 of the Law of the People's Republic of China on the Application of the Law on Foreign-related Civil Relations, which stipulates that the parties may choose by agreement the law applicable to the contract, in the present case, the laws of Hong Kong shall be applied as the applicable law for the resolution of the issues concerned.
With regard to the application of procedural law in this case, in accordance with article 551 of the Judicial Interpretation of the Civil Procedure Law and with reference to article 259 of the Civil Procedure Law, the procedural law of this case shall apply the special provisions of Part 4 of the Civil Procedure Law on civil procedure involving foreign affairs and other relevant provisions of the Law.
The legal opinion submitted by CCB Asia concerning the ascertainment of Hong Kong law is in compliance with the law and is confirmed by the court. According to the ascertained Hong Kong law, the Loan Acceptance Letter signed by Li Hongfeng in this case expressed the genuine intentions of the defendant. The financial loan contract between CCB Asia and Li Hongfeng was concluded and complies with the provisions of Hong Kong law, and shall be legal and valid. The Personal Loan Confirmation Letter and the Terms and Rules for Loan are legally valid and binding on CCB Asia and Li Hongfeng under Hong Kong law, in which the agreed terms on interest rates, repayment schedules, service charge for overdue repayment, interest in arrears on overdue repayment and claims for expenses incurred does not violate the laws currently in force in Hong Kong. CCB Asia has the right to require the repayment of the principal and interest of the loan, service charge and interest in arrears on overdue payments, and related expenses, by Li Hongfeng. This part of the claim made by CCB Asia can find its contractual and legal basis, and is thus supported by the Court. Since CCB Asia has only paid RMB 50,000 for the attorney fee, up to the court hearing, the Court only supports the RMB 50,000 that has actually incurred. The remaining part of lawyer fee shall be settled separately by CCB Asia after it actually incurs.
In accordance with Article 41 of the Law of the People's Republic of China on the Application of the Law on Foreign-related Civil Relations, the relevant Hong Kong laws, Article 144 and 259 of Civil Procedure Law of the People's Republic of China, Article 551 of the Interpretation of SPC of the Application of the Civil Procedure Law of the People's Republic of China, decision is as follows:
I. The defendant Li Hongfeng, shall, within 10 days after this judgement enters into force, pay back the plaintiff, CCB Asia, the principal(HKD 500,000), the interest during the loan term (HKD 15,673.92), the service charge for overdue repayment (HKD 10,319.04) and the interest in arrears on overdue repayment (calculated at an annual interest rate of 8.25% in three installments: first installment, on the overdue interest of HKD 5078.02 from 24 January 2016 to the date of actual payment; second installment, on the overdue interest of HKD 5297.95 from 24 April 2016 to the date of actual payment; third installment, on the overdue principal and interest of HKD 505,297.95 from 24 July 2016 to the date of actual payment)；
II. The defendant, Li Hongfeng shall, within 10 days after this judgment takes effect, indemnify the plaintiff, CCB Asia, for the law ascertainment fee of RMB 45,000, the attorney fee of RMB 50,000, the public notice fee of RMB 200 and the notarization and transfer fee of HKD 21,600;
III. Reject other claims of the plaintiff CCB Asia.
If the obligation of pecuniary payment is not fulfilled during the period specified in this judgment, double payment of interest on debt for the period of default shall be required in accordance with article 253 of the Civil Procedure Law of the People's Republic of China.
The case acceptance fee of RMB 11148 shall be borne by the defendant Li Hongfeng (which shall be paid to the Court within seven days after the entry into force of this judgment).
In case of refusal to accept the judgement, the plaintiff CCB Asia may, within 30 days from the date of service of the judgment, and the defendant Li Hongfeng may, within 15 days from the date of service of the judgment, submit to the Court the petition for appeal and copies, the number of which is based on that of the other party or its representatives, in order to appeal the case before the Beijing High People's Court.
Chief Judge Gao Jing
People's Juror Huang Xiaoya
People's Juror Wang Ziheng
5 December, 2019
Assistant Judge Zhang Wei
Court Clerk Hao Xue
Reference
1. Cap. 553 Electronic Transactions ordinance
2. Cap. 163 Money Lender ordinance
3. Cap 155 Banking ordinance
4. Brogden v Metropolitan Railway Co, LR2.App.Cas.666
Read the original: 蓝海查明案例 ▍香港法律中对涉案合同的合法有效性及可执行性如何规定？
