Hong Kong Ordinances

MONEY LENDERS ORDINANCE - SECT 25

Reopening of certain transactions

(1) Subject to section 24(2), where-

   (a)  proceedings are taken in any court by any person (whether a
        money lender or not) for the recovery of any money lent or the
        enforcement of any agreement or security in respect of any loan; and

   (b)  subject to subsection (3), there is evidence which satisfies the court
        that the transaction is extortionate, the court may reopen the
        transaction so as to do justice between the parties having regard to
        all the circumstances, and, for that purpose, make such orders and
        give such directions in respect of the terms of the transaction or the
        rights of the parties thereunder as the court may think fit.

(2) For the purposes of this section, a transaction is extortionate if-

   (a)  it requires the debtor or a relative of his to make payments

(whether unconditionally or on certain contingencies) which are grossly
exorbitant; or

   (b)  it otherwise grossly contravenes ordinary principles of fair-dealing.

(3) Any agreement for the repayment of a loan or for the payment of interest
on a loan in respect of which the effective rate of interest exceeds 48 per
cent per annum shall, having regard to that fact alone, be presumed for the
purposes of this section to be a transaction which is extortionate; but except
where such rate exceeds the rate specified in section 24(1), the court may
declare that any such agreement is not extortionate for the purposes of this
section if, having regard to all the circumstances relating to the agreement,
the court is satisfied that such rate is not unreasonable or unfair.

(4) In determining whether a transaction is extortionate for the purposes of
this section, regard shall be had to such evidence as is adduced concerning-

   (a)  interest rate prevailing at the time it was made;

   (b)  the factors mentioned in subsections (5) and (6); and

   (c)  any other relevant considerations.

(5) Factors applicable under subsection (4)(b) in relation to the debtor
include-

   (a)  his age, experience, business capacity and state of health; and

   (b)  the degree to which, at the time of entering into the transaction, he
        was under financial pressure, and the nature of that pressure.

(6) Factors applicable under subsection (4)(b) in relation to the lender or
other person by whom the proceedings are taken include-

   (a)  the degree of risk accepted by the lender, having regard to the nature
        and value of any security provided;

   (b)  his relationship to the debtor;

   (c)  whether or not a specious cash price was quoted for any goods or
        services included in the transaction; and

   (d)  where one or more other transactions are to be taken into account, the
        question how far any such other transaction was reasonably required
        for the protection of the debtor or the lender, or was in the interest
        of the debtor.

(7) Any court in which proceedings might be taken for the recovery of any loan
or security in respect of a loan shall have and may at the instance of the
debtor or any surety exercise the like powers as may be exercised under this
section where proceedings are taken for the recovery of a loan; and the court
may entertain any application under this subsection by the debtor or surety
notwithstanding that the time for repayment of the loan or any instalment
thereof has not arrived.

(8) On any application relating to the admission or amount of a proof by a
money lender in any bankruptcy proceedings, the court may exercise the like
powers as may be exercised under this section where proceedings are taken for
the recovery of money.

(9) The Legislative Council may by resolution alter the rate specified in
subsection (3) but, in relation to any agreement referred to in that
subsection which is in force at the date when such rate is so altered, the
rate so specified as at the coming into force of such agreement shall continue
to apply.

(9A) Nothing in this section shall apply to-

   (a)  a loan specified in paragraph 12 in Part 2 of Schedule 1; or

   (b)  as respects such loan, any person who makes such loan. (Added 69 of
        1988 s. 21)

(10) In this section "debtor" (債務人) means any person primarily liable
for the repayment of a loan or for the payment of interest in respect of a
loan.

"debtor" (債務人)