Las Vegas Hilton Corporation v. Lo Yuk Leung

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1997, No. 251
(Civil)

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J U D G M E N T

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Rogers, J.A. :

1. This is an appeal from a decision of Findlay, J. which was handed down on 28 November 1997.

2. The background to this case is that the writ in this action was issued on 21 August 1997. It was endorsed with a Statement of Claim claiming a sum of US$2.74m. That was the amount which the plaintiff claimed as a loan which had been made to the defendant for the purposes of gambling in Nevada in the previous year.

3. On 4 September 1997, the defendant filed an acknowledgement of service of a writ. Thereafter, on 12 September, the defendant was served with a notice of intention to enter judgment. That prompted the defendant to issue a summons for extension of time for service of the defence. The defendant sought an extension of two months but was granted an extension of 30 days.

4. On 9 October 1997, the plaintiff issued a summons for summary judgment under Order 14.

5. On 28 October 1997, the defendant issued a summons to stay the proceedings on the grounds that the Courts of Nevada were the appropriate and natural forum for the resolution of the dispute between the parties to this action. The defendant filed one affidavit in support of that application and I will come to the contents of that later.

6. The two applications were listed for hearing before the Registrar on 10 November 1997. He made two separate orders. The effect of the order in the stay application was that it was to be adjourned to a Judge in chambers with an estimate of 3 hours. The Registrar ordered that the plaintiff should have 42 days in which to file an affidavit in answer that the defendant should have leave to file evidence in reply 28 days thereafter and that apart from that, no other evidence should be filed without leave of the Court. In respect of the Order 14 application, he ordered the parties to prepare their evidence, to serve it on the other parties and have it ready for filing immediately upon the conclusion of the stay application. It might appear from that that he may have formed some provisional views as to the merits of the stay application and perhaps anticipated that the parties would have to proceed with the action.

7. Three days later, on 13 November, the defendant in the action filed a Notice of Appeal against the order in respect of the plaintiff's summons; the order sought on the appeal was that the order of Mr. Registrar Betts ordering the preparation of the evidence should be set aside.

8. At that stage, the plaintiff did not see fit to file a Notice of Appeal. That may be explained also by the fact that since the order of the Registrar was that the stay application would in any event be heard before a Judge, there was little point in appealing that order to a Judge since it was going to the Judge in chambers in any event.

9. When the matter came before the Judge below, he allowed the plaintiff to appeal out of time in respect of the Registrar's order on the stay application and then dismissed the summons for the stay application and made further orders as to the time for hearing the Order 14 application.

10. The defendant appeals today to this Court against that Decision and two matters have been raised.

11. First of all, it is said that the Judge below should not have allowed the plaintiff to appeal out of time and secondly the Judge below should not have dismissed the defendant's application for a stay of the proceedings.

12. Turning to the first question as to whether the Judge should have allowed the plaintiff to appeal out of time. That is a matter of discretion. It has been urged upon us that the Judge should not have allowed that to have happened, first of all, in the absence of an affidavit explaining the delay and secondly, in the face of the admission by the solicitor acting for the plaintiff that he had not thought of appealing the Registrar's decision. However, these matters were taken into account by the Judge below and in my view the Judge exercised his discretion correctly. He came to the conclusion that he could not deal with the defendant's appeal in respect of the directions for hearing of the Order 14 application without also at the same time considering the directions which had been given in respect of the stay application. He considered that the Registrar had, in effect, given directions as a package to put the action on the road and if he were to deal with part of that package, he had to deal with the whole.

13. Turning to the dismissal of the summons for the stay, we have been directed to the transcript of the hearing in the Court below. As it happens that transcript has been produced by the respondents to this appeal. It appears that at the commencement of the hearing below, counsel for the defendant, the appellant in this Court, made a submission in which it was clear he appreciated that the merits of the stay application might be decided at that hearing. Indeed, that was the effect of the Notice of Appeal which the plaintiff had been given leave to file out of time. The appellant's counsel also indicated that no further evidence was intended to be filed. It is unnecessary to go into his reasons for so saying but it appears that from more than one passage in the transcript that counsel was adamant that the defendant would not be filing, for example, evidence as to the merits of the defence.

14. Our attention was drawn by Mr. Huggins, S.C. appearing on behalf of the appellant to passages towards the end of the hearing below where the Judge gave an unfortunate indication that he did not consider that he would be deciding the issue of the merits of the stay application. However, the learned Judge did not give his decision immediately but handed down his decision some four days after the hearing. Despite that indication, I am satisfied that it did not mislead the parties and it did not cause anything not to be put before the Judge which the parties on that day would have intended to put before the Judge or to put before the Judge at some later date on the hearing of the merits of the stay application. In the face of the evidence that was before the Judge and the facts that were before Judge which the defendant was prepared to rest his case on on that day, the application for stay was clearly doomed to failure.

15. On an application for a stay, it is clear that the applicant has to prove that not only is Hong Kong not an appropriate forum but more importantly, that there is a more appropriate forum in another jurisdiction to which the other party is amenable which is clearly or distinctly more appropriate than Hong Kong. This, on the face of the evidence, the defendant had failed to do. Furthermore, as the plaintiff had pointed out at the hearing, the application for stay was only made some two months after the action had been launched and indeed, three weeks after the Order 14 application had been started. The application for the stay was therefore late and that in itself would, on the plaintiff's argument and as found by the Judge, have been justification for a refusal of the stay application.

16. Before us, Mr. Huggins has outlined further evidence that the defendant would now wish to put in respect of the stay application but in view of the way the proceedings have gone to date, that is now too late.

17. For these reasons, I would dismiss this appeal.

Godfrey, J.A. :

18. I agree.

19. The judge below, although unfortunately indicating during the course of the argument that he was not intending at that stage to decide the question of stay or no stay, in the end decided that question and refused the stay for which the defendant has asked. He had the application for a stay before him and he exercised his discretion to refuse the stay, in my judgment correctly, on the material before him. The defendant sought to persuade the judge that Nevada was the appropriate forum in which his defence ought to be tested. But since the defendant refused to state what was the nature of his defence, the judge, not surprisingly, refused his application.

20. Before us, the defendant has been more forthcoming, indicating that he wishes to raise in his defence a constitutional law point which would bar any action against him by the plaintiff in the United States of America. But the lateness of the defendant's application for a stay, made not as it should have been at an early stage of the proceedings against him here, but only after the plaintiff had applied for summary judgment against him under Order 14 of the Rules of the High Court, weighs with me (as it did with the judge) as a good reason in itself for refusing the stay, notwithstanding the disclosure now made to us of the nature of the defendant's alleged defence.

21. I too would dismiss this appeal.

Mortimer, V.-P. :

22. For the reasons that have been given, I would also dismiss this appeal.

Costs : Costs of the appeal be to the plaintiff.