DCCJ 2985/2019
[2020] HKDC 430
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CIVIL ACTION NO 2985 OF 2019
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BETWEEN
VENETIAN MACAU LIMITED
Plaintiff
and
LAI CHOI FAT (黎財發)
Defendant
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Before:
Master Maurice Lam in Chambers (Open to public)
Date of Hearing:
10 June 2020
Date of Decision:
19 June 2020
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DECISION
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Introduction
1. Before me is the defendant’s application to set aside the summary judgment entered against him in his absence.
2. The hearing for the application was originally fixed to be heard on 2 March 2020. However, due to the General Adjourned Period, the hearing was re-fixed for 10 June 2020.
3. The defendant filed a Notice to Act in Person and applied for legal aid shortly before the re-fixed hearing. A Memorandum of Notification of an Application for Legal Aid was filed on 4 June 2020. Having considered the matter, I am of the view that the delay of making legal aid application amounted to an abuse of process. It was therefore directed that the legal aid stay be lifted.
4. Accordingly, the re-fixed hearing remains to stand. At the hearing, I heard submissions from Ms Rosa Lee, counsel for the plaintiff, and the defendant appearing in person. At the conclusion of the hearing, I indicated that I will give my decision in writing in due course, which I do now.
Background
5. The plaintiff is a company carried on business as an operator of casinos and gaming resorts in Macau[1] . The defendant was a patron of the casino owned and operated by the plaintiff[2] .
6. The plaintiff’s claim arises from a loan advanced to the defendant pursuant to two documents, namely the Credit Agreement and the Revised Credit Line and Amendment to the Credit Agreement[3] . A loan of HK$1 million was advanced to the defendant. After deducting certain commissions to which the defendant was entitled, there was an outstanding balance of HK$792,965[4] . The plaintiff deposited a cheque drawn by the defendant for the said sum of HK$792,965, but the cheque was dishonoured[5] . Accordingly, the plaintiff sued the defendant for the said sum of HK$792,965.
7. The defendant acting in person acknowledged service of the Writ and filed and served a home-made Defence on 12 July 2019[6] . I will deal with the Defence in details later.
8. Shortly before the filing of the Defence, the plaintiff took out a summons under Order 14 to enter a summary judgment against the defendant. The summons was heard before Registrar Lui on 2 August 2019. The defendant did not attend the hearing. In his absence, a summary judgement was entered against him.
9. In the course of enforcing the said judgment of the Court, the defendant (who, at that time, was legally represented) took out the present summons on 15 November 2019 to set aside the judgment entered against him.
10. The defendant filed an affirmation in support of the application, and the plaintiff filed an affirmation of Leong Wen San in opposition.
Legal Principles
11. The legal principles governing the setting aside of a summary judgment is well established and is beyond dispute. O 14, r 11 of the Rules of the District Court provides that any judgment given against a person who does not appear at the hearing of the Order 14 application may be set aside.
12. The approach of setting aside a summary judgment under O 14, r 11 is the same as an application to set aside default judgment under O 13, r 9[7] . In this respect, I will gratefully adopt the approach summarized by Ms Lee as follows[8] :-
(1) Where the judgment has been obtained regularly, the primary consideration and the critical starting point is to look at the merits of the defence. The defendant bears the burden to show a defence which has a real prospect of success.
(2) To do so, the defendant must satisfy the Court that its case and supporting evidence as adduced is potentially credible and carries some degree of conviction. It is not sufficient to show a merely “arguable” defence that would justify leave to defend under O14.
(3) Other considerations include why the default judgment was allowed to occur in the first place, any delay in setting aside, and any consequent prejudice caused to the plaintiff.
(4) Whilst the Court is to conduct a balancing exercise of all relevant factors, if the defence has no real prospect of success, then there is no point in setting aside, and any further examination of the other considerations is academic and pointless.
The Judgment was entered regularly
13. The defendant did not challenge the regularity of the Judgment, and, in my view, this is correct. According to his affirmation, the defendant said that the correct address of service started with “C25, 5/F”[9] . However, for some reasons, the address of service as stated in the Acknowledgement of Service started with “Unit 25, 5/F”[10] . The plaintiff sent all court documents (including the summons for summary judgment) at the address stated in the Acknowledgement of Service[11] . The defendant claimed that that was the reason why he did not receive the summons and failed to attend the hearing[12] , and, as a result, judgment was entered against him in his absence.
14. I agree with Ms Lee that, since the documents were sent at the address provided by the defendant in the Acknowledgement of Service, which has never been withdrawn, the judgment was entered regularly. As a matter of fact, the Court of Appeal has repeatedly reminded litigant to give the correct address to which correspondence or notice can come to his attention in a timely manner. The consequence occasioned by the ineffectiveness of such an address would fall on the shoulder of the litigant[13] .
15. I now turn to the merits of the defence.
The defence has no real prospect of success
16. I start with the following undisputed facts:-
(a) The defendant admitted that he entered into a Credit Agreement with the plaintiff[14] . He also admitted that he signed a document for the increase of the credit limit to HK$1 million[15] . He did not deny that he had signed the Marker[16] .
(b) The defendant appended his signature on the dishonored Cheque, although he said in his Defence that it was the plaintiff who filled in the other particulars, such as date, payee, and amount on the cheque[17] .
(c) In his affirmation, he deposed that he permitted his friend to use his cheques to settle his and his friend’s account with the plaintiff[18] .
17. One of the defendant’s defences is that the plaintiff failed to give full particulars of the sum he owed[19] . With respect, this is hardly a valid defence against liability. In any event, as Ms Lee pointed out[20] , the plaintiff explained in this application the full particulars of the defendant’s liability in the supporting affirmation[21] and as well as the document entitled “Premium Settlement Form”[22] . In my view, this ground of defence has no merits whatsoever.
18. At the hearing, the defendant sought to challenge the percentage of the commission. However, as Ms Lee pointed out, the commission was offered to high-rollers at the discretion of the plaintiff. As such, there is no basis for the defendant to challenge the amount claimed by the plaintiff.
19. The defendant also challenges the jurisdiction of the Hong Kong courts, arguing that since, all transactions took place in Macau and the loan was governed by the laws of Macau SAR, the Hong Kong courts have no jurisdiction over the dispute[23] . He also averred that it would be against public policy if the Hong Kong courts allow the recovery of gaming credits[24] . As Ms Lee pointed out[25] , the Hong Kong courts have regularly dealt with cases for the recovery of gaming credit advanced under the laws of Macau SAR. Particularly in this case, it is noted that clause 12 of the Credit Agreement explicitly provides that[26] :-
“Any disputes arising from this agreement shall be subject to the jurisdiction of the courts of the Macau SAR. This shall not preclude the institution of legal proceedings against the Borrower by the Lender in the Courts of any other jurisdictions. This loan agreement shall be governed by the laws of the Macau SAR.”
20. Clearly, the clause does not confer exclusive jurisdiction of the courts of the Macau SAR. As explained by Poon J (as the Chief Judge then was) in the Mong Henry case[27] , this makes ample commercial sense – as the learned Judge said in that case:-
“The plaintiff has patrons coming to its casino in Nevada all over the world. The plaintiff should have the liberty to commence actions against the defaulting ones in places where it finds most convenient. Thus it cannot possibly limit itself to the exclusive jurisdiction of the Nevada court. On the other hand, if it does wish to commence proceedings in Nevada, the jurisdiction clauses will prevent the defaulting parties from refusing to submit to the jurisdiction of the Nevada court.”
21. This dictum is apposite in this case by simply changing the “Nevada court” to “the courts of Macau SAR”. Accordingly, this jurisdictional challenge is doomed to failure.
22. As mentioned above, the defendant did not deny that the dishonored cheque was signed by him. What he complained was that the plaintiff filled in the particulars of the cheque without his authorization[28] . However, clause 13 of the Credit Agreement provides that[29] :-
“The Borrower agrees to provide the Lender, at Lender’s option, and as security for the issuance of credit, a personal cheque or other form of acceptable negotiable instrument in the amount of the casino chips transferred to him/her, which the Lender may apply toward payment. The Lender may complete any portion of the personal cheque or other form of acceptable negotiable instruments that may be missing or left blank including (i) the amount of the outstanding credit balance; (ii) date of the cheque.”
23. Clearly, by the said clause, the defendant authorized the plaintiff to complete the cheque. There is no basis to contend that the said clause was void or voidable. This line of defence has no merits.
24. The defendant also averred that he did not personally give the cheque to the plaintiff. According to him, he gave the cheque to his friend to settle repayments owed to the plaintiff on his behalf. He did not know how the plaintiff obtained the cheque. With respect, there is nothing in this assertion that would vitiate his liability to the plaintiff. As Ms Lee points out at the hearing, the plaintiff based its claim on the Credit Agreement, as well as the Revised Credit Line and Amendment to the Credit Agreement. Whether the defendant had personally given the cheque to the plaintiff or through a third party has no relevance.
25. The defendant also averred that he was not aware of the terms when he signed the Credit Agreement[30] . This is hardly a plea of non est factum , which requires clear and positive evidence before it can be established[31] . In his affirmation, he simply stated that the prints were too small to read and he signed the agreement as he was instructed to do so by his friend[32] . I also agree with Ms Lee that his inability to remember when to sign the Revised Line Limit cannot be a valid defence. In my view, given his own admission that he had been a big gambler at the time[33] , there is no basis for him to claim that he was not aware of the terms of the agreements. This line of defence is not capable to stand at trial.
26. For the reasons as aforesaid, it is clear to me that the defendant’s defence has no real prospect of success. I therefore will not exercise my discretion to set aside the summary judgment entered against him in his absence. The defendant’s summons filed on 15 November 2019 is therefore dismissed.
Costs
27. At conclusion of the hearing, the defendant indicated that he would not challenge the principle that costs should follow the event. Nor did he make any submission disputing the amounts stated in the plaintiff’s statement of costs.
28. However, having perused the plaintiff’s statement, I find some room for reductions in items B1, B2, B4, C1, C2, C3, and C4. By summary assessment, I fix the plaintiff’s costs of this application at $85,000.
Order
29. Accordingly, it is ordered that:-
(1) The defendant’s summons filed on 15 November 2019 be dismissed; and
(2) The defendant shall pay the plaintiff’s costs of the application, summarily assessed at $85,000 payable forthwith.
(signed)
( Maurice Lam )
Master, District Court
Ms Rosa Lee, instructed by Mayer Brown, for the plaintiff
The defendant was not represented and appeared in person
[1] See [1] of the Statement of Claim [A:003].
[2] See [2] of the Statement of Claim [A:003].
[3] See [5] & [6] of the Statement of Claim [A:003-004].
[4] See [10] of the Statement of Claim [A:005].
[5] See [13] of the Statement of Claim [A:005].
[6] For some reasons, the Defence was not included in the Application Bundles prepared by the Defendant’s then solicitors. I rely on the one contained in the Court files.
[7] See Hong Kong Civil Procedure 2020 , Vol 1, p 341, para 14/11/1.
[8] See §16 of the Plaintiff’s Skeleton Submissions, citing Chekiang First Bank Ltd v Ng Chun Hing Benjamin HCA 3473/2000, 12 December 2001, and ARC Trade Finance Fund v Tes Group Limited DCCJ 2783/2015, 6 January 2017.
[9] See [5] of the Affirmation of Lai Choi Fat [A:031].
[10] See [6] of the Affirmation of Lai Choi Fat [A:031].
[11] See [4] of the Affirmation of Leong Weng San [A:042].
[12] See [10] of the Affirmation of Lai Choi Fat [A:031].
[13] See Islam Raja Rais v Director of Immigration HCMP 881/2017, 26 June 2017, at [9]; Said Umair v Torture Claims Appeal Board [2018] HKCA 82 at [9]; Re Ahmed Syed Rafiq [2018] HKCA 178 at [19]; Re Ram Ishver Dass [2019] HKCA 27 at [16]; and Re Ahmed Zakar [2019] HKCA 566 at [16].
[14] See [6] of the Defence.
[15] See [8] of the Defence, see also [30] of the Affirmation of Lai Choi Fat [A:034].
[16] See [40] of the Affirmation of Lai Choi Fat [A:036].
[17] See [4] of the Defence.
[18] See [42] of the Affirmation of Lai Choi Fat [A:037].
[19] See [2] of the Defence.
[20] See [22] of the Plaintiff’s Skeleton Submissions.
[21] See [13] of the Affirmation of Leong Weng San [A:048-048].
[22] [B:080].
[23] See [3] of the Defence.
[24] See [8] of the Defence.
[25] See [25(1)] of the Plaintiff’s Skeleton Submissions.
[26] [B:053A-2]
[27] Wynn Las Vegas, LLC v Mong Henry (孟亨利) (aka Meng Hengli) HCA 190/2009, unreported, 24 June 2009.
[28] See [4] of the Defence.
[29] [B:053A-2].
[30] See [6] of the Defence.
[31] See Saunders (Executrix of the Will of Rose Maud Gallie, Deceased) v Anglia Building Society [1971] AC 1004, per Lord Hodson at p 1019B-C (“The plea of non est factum requires clear and positive evidence before it can be established”), see also per Lord Reid at p 1016D-G (“But the essence of the plea non est factum
[32] See [20] of the Affirmation of Lai Choi Fat [A:033].
[33] See [27] & [28] of the Affirmation of Lai Choi Fat [A:034].