黃偉成 v 交通銀行股份有限公司 [2025] 1 HKC 641, [2024] HKCFI 1902
Anthony Chan SC and Jeff Yau represented the claimant in 黃偉成 v 交通銀行股份有限公司 [2025] 1 HKC 641, [2024] HKCFI 1902.
The claimant’s wife (‘W’) purchased from one company (‘Company’) a beauty package (‘Service Agreement’) the price of which was settled under a loan agreement called an instalment payment plan (‘IPP’) whereby W agreed, inter alia, the defendant would advance the sum equivalent to the price of the beauty package to the Company. The claimant who was the principal credit cardholder and liable for the debts incurred on W’s supplementary card refused to settle the sum under the IPP. In another set of proceedings in the Small Claims Tribunal, the Service Agreement was held to be vitiated by the Company’s fraudulent misrepresentation. The Tribunal awarded, inter alia, full price of the Service Agreement to W, but refused to award the late payment interest and clearance fees incurred as a result of the IPP. The claimant then commenced the present claim in the Tribunal against the defendant claiming for, inter alia, late payment interest, the clearance fees, miscellaneous charges and interest which the defendant had wrongfully deducted from him as a result of his refusal to settle the sum said to be due under the IPP. His claim was dismissed because the Adjudicator held the fraudulent misrepresentation by the Company to W that vitiated the Service Agreement could not be relied upon to rescind the IPP (‘Decision’). The claimant applied to review the Decision relying mainly on the case of Durkin v DSG Retail Ltd [2014] 2 All ER 715 ; [2014] 1 WLR 1148 (‘Durkin’). The Adjudicator dismissed the application to review on the basis that Durkin was inapplicable in the present case (‘Review Decision’). The Court of First Instance granted leave for the claimant to appeal the Review Decision.
Held, dismissing the appeal with costs:
(1) Durkin was not applicable to the situation in Hong Kong. Lord Hodge’s reasoning in Durkin for implying a term was based firmly with the Consumer Credit Act 1974 [UK] and the recommendations of the Report of the Committee on Consumer Credit chaired by Lord Crowther in 1971 (‘Crowther Report’), which adopted the approach of making the bank answerable in damages for misrepresentations made by the seller in antecedent negotiations and for breaches of any term of the supply agreement and their rationale in mind. The position in Hong Kong was different such that the reasoning of Lord Hodge could not be applied across the board in a similar type of contract, ie a debtor-credit-supplier agreement in Hong Kong. There was no legislation which could be seen as similar to the Consumer Credit Act 1974. There was no consideration or consultation that contemplated adopting in Hong Kong a similar policy as that was canvassed in the Crowther Report. On the other hand, the Hong Kong Monetary Authority (‘HKMA’) has issued the Circular B9/67C dated 16 August 2010 (‘Circular’) showing that it was within the contemplation of institutions within the banking industry as well as the HKMA that the institutions in such instalment payment plans do sometimes contract with the customers on the basis that regardless of whether the services were provided by the merchant, the payment obligation continues. Further, although the IPP was tied to the Service Agreement in the sense that it was solely for payment of the Service Agreement, the purpose of the IPP had already been fulfilled when the defendant had already paid the Company the full price of the beauty package on the date of its purchase, and its operation was different from the way the credit agreement operated in Durkin. Durkin v DSG Retail Ltd [2014] 2 All ER 715 ; [2014] 1 WLR 1148 distinguished (paras 18-21, 23, 28-31).
(2) When the court undertakes the exercise of construing a contract for the purpose of determining whether a term ought to be implied into it, one must take into account the proper contextual background against which the contract was entered into by the parties. A term should not be implied into a detailed commercial contract merely because it appeared fair or merely because one considers that parties would have agreed it if it had been suggested to them. Necessity was not established by showing that the contract would be improved by the addition. There should not be judicial legislation by courts where the legislature has not chosen to codify in law how such instalment payment plan should be regulated. Marks & Spencer plc v BNP Paribas Securities Services [2016] AC 742; Nazir Ali v Petroleum Company of Trinidad and Tobago [2017] UKPC 2; and Tadjudin Sunny v Bank of America, National Association [2016] HKCU 1193 (CACV 12/2015, Kwan JA, Barma JA and Chow J, 20 May 2016, unreported) considered (paras 34, 36-37).
Obiter
(3) Even if Lord Hodge’s reasoning in Durkin was applicable to the present case such that the Implied Term operated in law, the Implied Term was contrary to the express terms of the IPP and was thus excluded from there. It could be seen from the terms of the IPP that the defendant had undertaken the steps recommended in the Circular and had spelt them out in no unclear terms. The Implied Term in the current form and definition advocated by the claimant was both linguistically and substantively inconsistent with the express provisions of the IPP (paras 40-44).
[The above is excerpted from the headnote to the report in HKC.]
