GUANGHUA SS HOLDINGS LTD v. LIM YEW CHENG AND ANOTHER

HCA 1972/2020

[2022] HKCFI 1052

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1972 OF 2020

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J U D G M E N T

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Introduction

1.  There is before this court the Plaintiff’s application by summons dated 15 June 2021 (“Summons”) for final judgment against the 1st and 2nd Defendants under RHC O 14 r 1:

(1)  As against the 1st Defendant, for over US$7.14 million, being unpaid facility fees, additional facility fee plus interest as at 15 October 2020 under a Fee Letter dated 21 May 2018[1] (“Fee Letter”);

(2)  As against the 1st and 2nd Defendants, for over US$220 million as guarantors for loans advanced by the Plaintiff to 2 corporate borrowers under the so-called Xeno Facility Agreement dated 21 December 2017[2] and Aether Facility Agreement dated 21 May 2018[3] plus interest.

2.  It does not appear that the Defendants dispute the execution of the documents which support the Plaintiff’s claims, the quantum of the claims or that the loans and fees are unpaid. Indeed, one of the corporate borrowers viz Aether Limited (“Aether”) was wound up by Harris J in June 2021 on the Plaintiff’s petition without Aether disputing the debt under the Aether Facility Agreement. The Defendants’ only defence to the application is one of misrepresentation. As summarized in Mr Maurellet SC’s skeleton, the misrepresentations were:

(1)  The misrepresentation by the Plaintiff’s representative Mr Stephen Le (“Mr Le”)[4] prior to the Defendants’ execution of the Xeno Facility Agreement that the construction loan made to BJ Aether[5] may be used to repay related party loans incurred by it (“1st Representation[6]”).

(2)  The misrepresentation by Mr Le prior to the Defendants’ execution of the Aether Facility Agreement and the Fee Letter that the interest rate under the Aether Facility Agreement would be a flat rate of 12% p.a. (“2nd Representation[7]”).

3.  The Plaintiff’s position is that, while it denies having made the said representations, for the present purpose, it is wholly unnecessary to go into the dispute as to whether they had in fact been made. This is because any defence based on the 1st and 2nd Representations must fail since:

(1)  The Defendants have affirmed the Xeno Facility Agreement and the Aether Facility Agreement by the various Amendment deeds entered into subsequently. (“Affirmation”)

(2)  The Defendants seek to avoid the contractual documents by claiming rescission thereof, but rescission is not open to them since there is no restitutio in integrum which requires them to repay at least the Xeno Loan and the Aether Loan. (“No restitutio in integrum”)

(3)  On the evidence, there was no inducement and/or reliance. (“No inducement/reliance”)

4.  For reasons set out in Mr Maurellet SC’s skeleton, the Defendants take issue with all the 3 points made by the Plaintiff. However, it is fair to say that, while Ms Sit SC has not expressly abandoned the No restitutio in integrum point at the hearing, it was not seriously pursued by her. Upon enquiry by this court, both Ms Sit SC and Mr Maurellet SC confirmed that the differences between the two were in relation to Affirmation and No inducement/reliance.

Background

5.  The following facts and chronology are largely taken from Ms Sit SC’s skeleton and are undisputed by the Defendants.

6.  The Plaintiff is a corporate vehicle of MBK Partners (“MBK”), one of the largest private equity firms in Asia.

7.  The Defendants are father and son and established real estate investors in Singapore who used to partner with KeppelLand, the real estate arm of one of the largest Singapore conglomerates.

(1)  The Defendants are the beneficial owners of Xeno Origin Ltd (“Xeno”) and Kenora Corporation Ltd, through which they hold 49% shares in Aether[8] .

(2)  Aether, through its PRC subsidiary (“BJ Aether” or“Beijing Aether”), is the developer of a commercial and residential project in the Chaoyang district in Beijing (“Project”). The Project remains uncompleted to date.

(3)  The Plaintiff advanced 2 loans of US$80 million each in December 2017 and May 2018 to Xeno and to Aether respectively, in each case guaranteed by the Defendants.

8.  The parties’ dealings which form the subject matter of this Action are substantially documented and are summarized in the following chronology.

Date	Event
21 December 2017	Execution drafts of the Xeno Facility Agreement and related documents emailed to Edward Huang[9] (“Huang”)
	Meetings between (i) Ming Wei of MBK and Huang to go through the draft documents for execution followed by (ii) Ming Wei, the 1st Defendant and Huang to execute the same
	Facility agreement between SCH 1 Ltd[10] as original lender, Xeno as borrower, and the Defendants as guarantors for a term loan of US$80 million (“Xeno Loan”) for 2 years (“Xeno Facility Agreement”)
	Warning notices signed by the Defendants re seeking independent legal advice
21 May 2018	Xeno Loan assigned to the Plaintiff as the new lender
	Amendment deed to the Xeno Facility Agreement (“Xeno Amendment Deed”)
	Facility agreement between the Plaintiff as lender, Xeno as original borrower, and the Defendants as guarantors for a further term loan of US$80 million (“Aether Loan”) for 2 years from Xeno Loan utilisation (“Aether Facility Agreement”)
	Fee Letter executed by Xeno and the 1st Defendant re agreement to pay stipulated facilities fees to the Plaintiff
	Warning notices signed by the Defendants re seeking independent legal advice
26 October 2018	Aether novated as new borrower for the Aether Loan
28 December 2019	Original due date for the Xeno Loan and Aether Loan
13 January 2020	Amendment deed to extend the Xeno Loan to 31 March 2020 (“1st Xeno Extension”)
	Amendment deed to extend the Aether Loan to 31 March 2020 (“1st Aether Extension”)
	Amendment to the Fee Letter to extend payment to 31 March 2020
27 April 2020	Amendment deed to extend the Xeno Loan to 30 June 2020 (“2nd Xeno Extension”)
	Amendment deed to extend the Aether Loan to 30 June 2020 (“2nd Aether Extension”)
	Amendment to the Fee Letter to extend payment to 30 June 2020
30 June 2020	Extended due date for repayment
15 October 2020	The Plaintiff issued demand letters to Xeno and Aether for repayment of the loans, and to Xeno and the 1st Defendant for payments under the Fee Letter
23 October 2020	The Plaintiff issued demand letters to the Defendants as guarantors for repayment
23 November 2020	Writ of Summons against the Defendants

9.  The following are inter alia the express terms of the Xeno Facility Agreement:

(1)  Clause 3.1(a)(iii) provides that one of the purposes of the Xeno Loan is for the reduction of any outstanding “Financial Indebtedness” as defined in Clause 1.

(2)  Under Clause 19.16, Xeno is prohibited from using the Xeno Loan to repay intra-group loans or “Related Party Loans” for BJ Aether, unless repayment of the “Related Party Loans” is to be applied towards repayment of the Construction Loan.

(3)  Clause 19.17(a) and (b)(ii) provide that Aether and BJ Aether are prohibited from incurring or allowing to remain outstanding any “Financial Indebtedness”, except for inter alia a construction loan of not more than RMB1 billion made to BJ Aether (“Construction Loan”) provided that such loan will be applied only in the construction and development of the Project.

(4)  In the Xeno Amendment Deed dated 21 May 2018, the above provisions remain although the amount of the Construction Loan was reduced to RMB500 million.

10.  As for the Aether Facility Agreement:

(1)  Under Clause 3, the stated purpose of the Aether Loan includes repaying the “Identified Related Party Loans” on behalf of BJ Aether.

(2)  Calculation of interest by reference to the “Interest Rate” is stipulated in Clause 8.1(a). Under Clause 1, “Interest Rate” means, if all the “Post-Funding Conditions” as defined therein are satisfied on time, it would be 12% pa, whereas if they are not satisfied, interest rate would be 17% or 18%, depending on the different interest periods.[11]

(3)  Default interest is chargeable under Clause 8.3 at 6% p.a. over the rate which would otherwise have been payable.

Deliberation

11.  It is accepted that in a RHC O 14 application, the defendant bears the burden of satisfying the Court that there is an issue or question in dispute which ought to be tried.

12.  In Re Safe Rich Industries Ltd unrep, CACV 81 of 1994, 3 November 1994 at [13], Bokhary JA (as he then was) observed that:

“ The test at the summary stage is indeed as simple as whether the defendant’s assertions are believable. But it must be recognized — because failure to recognize it would create a debt‑dodger’s charter — that whether the defendant’s assertions are believable is a question to be answered not by taking those assertions in isolation but rather by taking them in the context of so much of the background as is either undisputed or beyond reasonable dispute.”

13.  More recently, in Yung Wai Man v Leung Kwok Pong [2021] HKCFI 896 at [9], this court elaborated on the proper approach to a RHC O 14 application as follows:

(1)  The Order 14 machinery works on the basis that if the plaintiff’s application is properly constituted, it is prima facie entitled to judgment unless the defendant shows cause to the contrary.

(2)  The mere assertion in an affidavit of a given situation by the defendant responding to an application for summary judgment does not, ipso facto, ground leave to defend.

(3)  The burden is on the defendant to show a real or bona fide defence or some other reason for a trial. The defendant must satisfy the Court that his evidence is capable of being believed and that on the basis of such evidence, there is a fair or reasonable probability of the defendant having a real or bona fide defence.

(4)  In deciding whether there is a fair or reasonable probability of the defendant having a real or bona fide defence, the Court does not isolate each factual issue and consider whether it is possible that the defendant’s story on that issue is credible. Rather, the Court must look at the whole situation.

(5)  In assessing the credibility of the defendant’s factual case, while the Court will not embark upon a mini-trial on affidavit evidence, the Court is not obliged to suspend its critical faculties and assume that the defendant’s evidence is accurate.

(6)  If having regard to inherent plausibility, inconsistency with contemporaneous documents and other compelling evidence, the defence is not credible, the Court must say so.

(7)  If the defendant’s evidence is incredible in any material respect, it cannot be said that there is a fair or reasonable probability that the defendant has a real or bona fide defence.

14.  As stated earlier, the Defendants’ only defence is misrepresentation. In order to properly understand the defence, this court shall set out in full the misrepresentation as pleaded in the Defence below.

“14. In or around early December 2017, prior to the execution of the Xeno Facility Agreement, Mr. Le informed the Defendants, inter alia, that the terms of the Xeno Facility Agreement would be in all material respects identical to the DB Agreement. Specifically, Mr. Le represented to the Defendants that:-

(1) The restrictions on incurring Financial Indebtedness under the Xeno Facility Agreement did not apply to a construction loan to Beijing Aether.

(2) The Financial Indebtedness arising under a construction loan of not more than RMB 1,000,000,000 advanced to Beijing Aether may be used to repay any Related Party Loan under the Xeno Facility Agreement.

(Collectively, the ‘Representations’)

15. The Defendants relied on Mr. Le to interpret and explain the key terms of the Xeno Facility Agreement and did not engage any lawyers to handle this transaction.

16. The Representations were in fact false:-

Particulars of Falsity

(1) Clause 19.17(b)(ii) of the Xeno Facility Agreement stipulated that the loan to Beijing Aether should only be applied in the construction and development of the Beijing Aether project.

(2) Unlike the DB Agreement, the Xeno Facility Agreement did not permit Aether or Beijing Aether to use the Financial Indebtedness arising under a construction loan for the purpose of repaying any Related Party Loan.

17. Induced by and acting in reliance upon the Representations, the Defendants executed the Xeno Facility Agreement. The Defendants would not have executed the Xeno Facility Agreement but for the Representations.

…

28. Prior to the execution of the Aether Facility Agreement and the Fee Letter, Mr. Le stated that MBK was able to offer the facility under the Aether Facility Agreement with same interest rate to the Cinda Financing. Specifically, Mr. Le represented to, inter alios, the Defendants that the interest rate levied by the Plaintiff under the Aether Facility Agreement would be 12% per annum (the ‘Further Representation’).

29. The Defendants relied on Mr. Le to interpret and explain the key terms of the Aether Facility Agreement and the Fee Letter and did not engage any lawyers to handle this transaction.

30. The Further Representation was in fact false:-

Particulars of Falsity

(1) The Aether Facility Agreement actually allowed for an increase in the interest rates from 12% per annum to 17% and 18% per annum if the Post-Funding Conditions (as defined under the Aether Facility Agreement) were not satisfied.

(2) Clause 8.3 of the Aether Facility Agreement allowed the Plaintiff to charge default interest at a rate which is 6% per annum over the rate which would have been payable if the overdue amount had constituted the Loan (as defined under the Aether Facility Agreement).

31. Mr. Le, the other personnel of MBK and/or the Plaintiff made no attempts to disclose and/or highlight the above clauses in the Aether Facility Agreement and/or their effects at any time prior to the execution of the Aether Facility Agreement and the Fee Letter.

32. Induced by and acting in reliance upon the Further Representation, the Defendants executed the Aether Facility Agreement and the Fee Letter. The Defendant would not have executed the Aether Facility Agreement and the Fee Letter but for the Further Representation.”

15.  Ms Sit SC submits that the right to rescind is lost by affirmation when the party entitled to rescind unequivocally manifests an intention to affirm once free from the effects of the vitiating factor. If the transaction is vitiated by misrepresentation, there must be a sufficient awareness of the true facts: The Law of Rescission (2nd ed) at para 23.02. In addition, the law requires the innocent party to know of his right to rescind before his conduct will constitute a binding affirmation: supra at para 23.40; Peyman v Lanjani [1985] 1 Ch 457.

16.  With respect to the 1st Representation ie the inability to use the Construction Loan to repay “Related Party Loans”, Ms Sit SC submits that, on the Defendants’ own evidence, they were aware of such inability before 21 May 2018 when the Aether Facility Agreement and the Xeno Amendment Deed were entered into. This is because the Defendants negotiated for the Aether Loan precisely to bypass this restriction in the Xeno Facility Agreement. At paragraph 10 of the 1st Defendant’s first affirmation (“Lim 1”), he said:

“10. … in the period leading up to the execution of the Aether Facility Agreement and the Fee Letter, a third party (i.e. China Cinda (HK) Company Holdings Company Limited or its affiliate, ‘Cinda’) offered to extend a loan of US$80,000,000 to Aether at a flat interest rate of 12% per annum without any adjustments. Such loan was intended to raise additional funds to repay the Related Party Loan which should have been allowed to be repaid under the Xeno Facility Agreement, if the Representations had been true at the first place …” (emphasis added)

17.  Further, under Clause 3 of the Aether Facility Agreement, the stated purpose of the Aether Loan includes repaying the “Identified Related Party Loans” on behalf of BJ Aether.

18.  Again, at paragraphs 24 and 25 of the 1st Defendant’s second affirmation (“Lim 2”), he said:

“24. In or around first half of 2018, KeppelLand was in the process of finalising the sale of its 51% interest (the ‘KeppelLand Sale’) in Aether to CBD Aether Center Ltd (‘CBD Aether’). At that time, the related party loan due and owing by Beijing Aether to KeppelLand … (the ‘KeppelLand Loan’) was approximately in the sum of RMB 500,000,000 (which was approximately US$80 million at the time) …

25. As deposed at paragraph 10 of Lim 1^st, Cinda offered to extend a loan (the ‘Cinda Loan’) of RMB 500,000,000 at a flat interest rate of 12% per annum without any adjustments. The Cinda Loan was intended to raise additional funds to repay the KeppelLand Loan which was a ‘Related Party Loan’ under the Xeno Facility Agreement. The KeppelLand Loan should have been allowed to be repaid with the proceeds of a construction loan pursuant to the Xeno Facility Agreement, if the Representations were true …” (emphasis added)

19.  As for the 2nd Representation concerning interest rate, Ms Sit SC submits that the Defendants must have been aware, by 13 January 2020 ie the 1st Aether Extension, the interest chargeable on the Aether Loan was more than 12%. This is because as set out in Schedule 2 of the 1st Aether Extension, the interest accrued[12] up to 28 December 2019 was US$25,378,112.02 whereas interest calculated at 12% p.a. would only have amounted to about US$15.2 million[13]. Ms Sit SC further submits that the Defendants must have paid attention to the accrued interest of US$25,378,112.02 because they expressly agreed at Clause 2.2 to capitalize that amount as part of the principal of the Aether Loan. Nevertheless, with such knowledge, in both the 1st and the 2nd Aether Extensions, the Defendants had confirmed their guarantees to the Plaintiff.

20.  Mr Maurellet SC’s reply to Ms Sit SC’s point about the 1st Representation is that it is not the Defendants’ evidence at paragraph 10 of Lim 1 that they were aware that they could not use the Construction Loan to repay related party loans incurred by BJ Aether. Rather, the Defendants were merely saying they wanted to use the loan from Cinda to repay BJ Aether’s related party loans.

21.  Mr Maurellet SC’s reply to Ms Sit SC’s point about the 2nd Representation is to rely on paragraph 16 of Lim 1 in which the 1st Defendant said “[i]t was only until after the Plaintiff had commenced legal proceedings against me that I sought legal representation and came to realize the legal implications and consequences and falsity of Mr. Le’s representations (including the Representations and Further Representation).”

22.  Obviously, the 1st Defendant did not say in so many words that the Defendants were aware of the falsity of the 1st Representation when they negotiated for the Aether Loan in order to bypass the restriction of using the Construction Loan to repay “Related Party Loans”. But it does seem to this court that one can reasonably draw such an inference from the 1st Defendant’s evidence. In this regard, one asks rhetorically: if the Defendants were still under the influence of the 1st Representation that the option of using the Construction Loan to repay “Related Party Loans” was available under the Xeno Facility Agreement, why did they have to negotiate for the Cinda Loan or the Aether Loan in order to do so? There is no explanation from the Defendants for this. In particular, the 1st Defendant did not positively say that he thought the option of using the Construction Loan to repay “Related Party Loans” under the Xeno Facility Agreement was available, but owing to whatever other commercial reasons, he decided to pursue the Cinda Loan and later the Aether Loan instead.

23.  In this court’s view, even if the 1st Representation had been made, the Defendants, being sophisticated and seasoned investors, must have been aware of the falsity of the 1st Representation before 21 May 2018 when they obtained the Aether Loan. Subject to the point about their knowledge of the right of election, by entering into the Xeno Amendment Deed on 21 May 2018 which contained the same restrictions and which affirmed their guarantees, the Defendants must be taken to have affirmed the Xeno Facility Agreement.

24.  In this regard, the 1st Defendant’s assertion at paragraph 16 of Lim 1 is simply not believable.

25.  If, as this court finds to be the case, the Defendants must have been aware of the falsity of the 1st Representation before 21 May 2018 and therefore they had been misled by Mr Le into executing the Xeno Facility Agreement, is it too much a stretch of imagination that they must also have been aware that they had some legal rights available to them as a result of having been so misled? It seems to this court even an ordinary layman would be able to put the two and two together, let alone seasoned investors like the Defendants. Either the Defendants immediately knew what legal rights that they had, or if not, they would have found out immediately after seeking legal advice. This court is unable to accept at its face value the assertion that the Defendants waited until after the Plaintiff had commenced legal proceedings in November 2020 that they sought legal representation and became aware of their rights. That is just totally contrary to common sense.

26.  As for the 2nd Representation, Mr Maurellet SC’s reliance on paragraph 16 of Lim 1 is futile, given this court’s finding that the 1st Defendant’s assertion in that paragraph is simply not believable.

27.  To conclude, Ms Sit SC submits that on the ground of Affirmation alone, the Plaintiff is entitled to summary judgment. This court agrees.

28.  This court will next briefly deal with the No inducement/reliance point.

29.  To start with, it is well-established that at least in the case of innocent or negligent representation, the representee has the burden of showing inducement in the sense that that he would not have entered into the relevant contract had the representation not been made: BV Nederlandse Industrie van Eiprodukten v Rembrandt Enterprises Inc [2020] QB 551 at [15].

30.  The Defendants’ evidence on this issue of inducement/reliance is quite scanty and can be found in a few paragraphs in Lim 1 as follows:

“6. … For the reasons set out below, both the Representations and the Further Representation were of critical importance and were relied on by the Defendants when executing the relevant transaction documents (including the Agreements).

7. The Representations were very important to the Defendants because the Related Party Loan owed by Beijing Aether to KeppelLand (the previous shareholder of Aether) and/or its affiliated companies amounted to RMB 488,330,864.34 at the time, which was a significant amount. The Representations were made in circumstances where KeppelLand was in the process of divesting its interest in Aether Limited (which Mr. Le was well-informed and fully aware) and the Related Party Loan would be due and payable once the divestment was complete.

…

9. If the Financial Indebtedness could not be used to repay any Related Party Loan, this would gravely hinder Aether’s financing capabilities and approval from Aether’s shareholders would have been required when the Xeno Facility Agreement was signed. The Defendants would not have entered into the Xeno Facility Agreement but for the Representations.

10. The Further Representation was equally important to the Defendants because, in the period leading up to the execution of the Aether Facility Agreement and the Fee Letter, a third party (i.e. China Cinda (HK) Company Holdings Company Limited or its affiliate, ‘Cinda’) offered to extend a loan of US$80,000,000 to Aether at a flat interest rate of 12% per annum without any adjustments. Such loan was intended to raise additional funds to repay the Related Party Loan …

11. The negotiations with Cinda almost came to fruition ... Such negotiations eventually came to an end when Mr. Le informed the Defendants, inter alia, that re-financing the Related Party Loan through a third party financier would constitute a breach of the Xeno Facility Agreement and that the Plaintiff would advance a loan at an interest rate that would be identical to the financing offered by Cinda, i.e. a flat interest rate of 12% per annum without any adjustments. I did not have legal representation when the Aether Facility Agreement was entered into. Solely in reliance on the Further Representation and in light of the urgency to repay the Related Party Loan, I executed the Aether Facility Agreement.”

31.  In order to raise a triable issue on inducement/reliance, the Defendants’ assertion that they relied on the Representations and the Further Representation when executing the relevant transaction documents must first and foremost be believable.

32.  In this court’s view, the Defendants’ assertion that they solely relied on and were misled by Mr Le’s representations as to (i) the permitted use of the Construction Loan to repay “Related Party Loans” and (ii) the interest rate charged by the Plaintiff under the Aether Facility Agreement would be 12% p.a. is wholly unbelievable. The reasons are these.

33.  First, to any person negotiating for a loan of any amount other than de minimis, two of the most important terms of the loan agreement must be (i) whether the loan amount can be used freely or whether there are restrictions as to its permitted use and (ii) the interest rate charged by the lender. This is just common sense. This applies to an ordinary retailer borrower or a small-time businessman but a fortiori to seasoned businessmen like the Defendants in the course of developing a large scale project in Beijing. This also applies a fortiori to loans to the magnitude of US$160 million.

34.  Second, because of the amount of the loans in question, because the Defendants had to shoulder personal liability as guarantors and because the two terms were so important to the Defendants as described in Lim 1, one would expect the Defendants to have vetted, if not the entire Xeno and the Aether Facility Agreements, at least the two terms in question before entering into the same. The terms as to the permitted use of the loan amount in the Xeno Facility Agreement might seem to be slightly complicated but that is why it was all the more reason for the Defendants to fully understand them, with professional assistance if necessary. In fact, at the material time, the 1st Defendant was assisted by Huang. As for the term about interest rate, in the Aether Facility Agreement, the interest rates were clearly spelt out in Clauses 1, 8.1(a) and 8.3 and were not difficult to understand at all. After all, it is reasonably clear that the Defendants could read English - there is no indication in Lim 1 and Lim 2 that the Defendants required interpretation before they confirmed their contents.

35.  Third, if the two terms were so important to the Defendants, the inherent probabilities are that they, either personally or through Huang (or anyone else), would have pro-actively raised the two terms with the Plaintiff at the negotiation stage so as to ensure that they were in accordance with their requirements and were acceptable to them. Yet, if one reads Lim 2 where the 1st Defendant purported to explain the circumstances leading up to the Xeno and Aether Facility Agreements, it looks as though there was no need to negotiate anything at all. There was also no suggestion in Lim 2 that the Defendants or Huang (or anyone else) had evenly briefly read the Xeno and Aether Facility Agreements. Indeed, at paragraph 12 of Lim 2, the 1st Defendant said he did not even read the facility agreements in the course of his previous dealings with Mr Le while the latter was still with the Deutsche Bank, and gave the impression that was always his practice when dealing with Mr Le, whether Mr Le was with the Deutsche Bank or MBK.

36.  Fourth, at paragraph 23 of Lim 2, the 1st Defendant referred to a meeting on 21 December 2017 where he and Huang met with Mr Wei Ming, then an employee of MBK, in a hotel in Beijing at which Mr Wei merely provided him with the signature pages of the Xeno Facility Agreement. The 1st Defendant said he signed the signature pages of the Xeno Facility Agreement within 15 minutes, thus giving the impression that the complete Xeno Facility Agreement was never given to him. This is contradicted not just by Mr Wei in his affirmation filed on behalf of the Plaintiff, but more importantly for the present purpose, by the contemporaneous email dated 21 December 2017 from Mr Wei to Huang which attached the execution drafts of the Xeno Facility Agreement and other related documents for Huang’s perusal.

37.  All in all, the Defendants’ assertion that they solely relied on and were misled by Mr Le’s representations is so inherently improbable that it must be rejected. For this reason also, the Plaintiff is entitled to summary judgment.

38.  For completeness, this court should mention that, at paragraphs 27 and 28 of her skeleton, Ms Sit SC submits that if a misrepresentation is made in a “rough and ready” manner in pre-contractual negotiations, while the contract is a detailed commercial document which parties would be expected to read in order to discover the details which he claims were of importance to him, yet he signed the agreement without reading it, he would not have relied on the misrepresentation; rather it is his own assumption of what the agreement is about that led him to enter into it: Peekay Intermark Ltd & Anor v Australia and New Zealand Banking Group Ltd [2006] EWCA Civ 386 at [52]. Ms Sit SC also submits that the present case is on all fours with the above.

39.  With respect, what Moore-Bick LJ stated at [52] of the Judgment was his Lordship’s conclusion on the facts of that case, rather than a statement of principle. As such, and for the reasons given in Mr Maurellet SC’s skeleton, Peekay Intermark Ltd offers limited assistance to this court in resolving the No inducement/reliance point raised by the Plaintiff. In these circumstances, this court is not persuaded that paragraphs 27 and 28 of Ms Sit SC’s skeleton alone are sufficient to tilt the balance in favour of the Plaintiff on the No inducement/reliance point.

Disposition and costs order nisi

40.  In the premises, this court hereby grants summary judgment in favour of the Plaintiff in terms of a draft submitted by Allen & Overy on 23 December 2021, save that the provision on costs therein will be on a nisi basis.