MELCO CROWN GAMING (MACAU) LTD v. YIU YIP LUN

HCA1300/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 1300 OF 2012

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JUDGMENT

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1.  There are two applications before the court, namely, a summary judgment application under O.14 of the plaintiff and an application for a stay of this action under O.12, r.8 by the defendant.

2.  This is a straightforward claim.  The plaintiff owns and operates a casino in Macau SAR.  The defendant was a patron of the casino.  On 11 January 2011, the parties entered into a written credit agreement (“Agreement”) under which credit facility was given by the plaintiff to the defendant.  On 2 December 2011, a total sum of HK$7.5 million was advanced to the defendant under the Agreement.  The defendant has failed to repay this loan despite the demand to do so by the plaintiff.  After setting off a credit balance in the defendant’s account with the plaintiff, there remains a sum outstanding of HK$7,350,000 which is the subject of this action.

3.  I agree with Mr Law, who appeared for the plaintiff, that there is a long line of Hong Kong authorities showing that a gambling debt legally advanced under the law of the place where the credit was advanced is an actionable debt in Hong Kong – see Hong Kong Civil Procedure 2013, vol 1, para 14/4/23.

4.  The Agreement is governed by Macanese law. Gaming credit advanced under the law of Macau has been recognised by this court as recoverable through legal process in Hong Kong – see Wynn Resorts (Macau) S A v Mong Henry, unrep, HCA 192/09, dated 12 February 2010 (a Judgment of Chu J as she then was). 

5.  The defendant has the benefit of Mr Ma’s representation in this hearing.  I have no doubt that everything which can be said to defend this action has been advanced by Mr Ma with considerable skill. However, I can see no sustainable defence or any merits in the stay application. 

6.  Three arguments have been advanced by Mr Ma. Firstly, it is said that the combined effect of clauses 4 and 5 of the Agreement and Article 8.6 of Ordinance 5 of 2004 of the laws of Macau (“Ordinance”) is such that there is an exclusive jurisdiction clause governing the subject matter of this action and such matter should be litigated in Macau instead of Hong Kong. 

7.  The relevant contractual and statutory provisions are as follows:

Clause 4

“Each facility and any transaction or cheque or marker connected with the facility is governed by the laws of Macau SAR.”

Clause 5

“The Applicant irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of Macau SAR (“Courts”);”

Article 8.6[1]

「六、合同必須載有關於訂立合同雙方放棄澳門特別行政區以外的司法管轄，並受澳門特別行政區現行法律約束的條款:如屬第五條第三款所指合同，則視乎屬有代理權委任合同或有代理權代辦商合同而必須載有放棄使用代任人或轉代辦商的條款。」

8.  Secondly, it is submitted that Macau is a forum clearly or distinctly more appropriate than Hong Kong for determining these matters.   

9.  Thirdly, it is contended that the Agreement is null and void under the Ordinance. 

10.  With respect, I believe that I can deal with the first and the third arguments in conjunction and briefly.  The Ordinance was the subject matter of detailed analysis by the court in Wynn Resorts(Macau) S A (supra). A notice has been given by the plaintiff to the defendant of its intention to rely upon that authority pursuant to O.38, r.7 as evidence of finding on foreign law. 

11.  In Wynn Resorts (Macau) S A (supra), much the same argument alleging that the credit agreement in that case was null and void pursuant to Article 8.2 of the Ordinance was rejected by the court.   It was held that Article 8.2 had no application to a credit agreement between a Concessionaire or Sub-Concessionaire and a gambler (see paras 8 and 37 of judgment). 

12.  The first argument of Mr Ma was ventilated by him quite recently in the case of MGM Grand Paradise Ltd v Chiu Tak Wah, unrep, HCA 259/12 and it was rejected by Deputy High Court Judge B Chu:

47.  Mr Ma has further submitted that, under Article 8.6 of Ordinance, the Loan Agreement must contain relevant provisions that the parties have agreed to surrender to be governed by any jurisdiction outside Macau and to be bound by the laws of Macau SAR, and thus, by taking out the present proceedings in Hong Kong, the Plaintiff is prima facie in breach of the said Article 8.6.

48.  On the other hand, it is the Plaintiff’s contention that the entire Article 8 of the Ordinance does not apply to the Loan Agreement or any agreement whereby credit is extended by the Macau casino to individual patrons.

49.  Article 8 of the Ordinance has in fact been considered at length in a judgment by Chu J (as she then was) in the case of Wynn Resort (Macau) S.A. v Mong Henry.

50.  As pointed out by Chu J, Article 8.1 of the Ordinance expressly relates to “Promoter Contracts” and “Agency Contracts”.  It was argued by the defendant in the above Wynn Resort (Macau) case that it did not necessarily follow that the scope of the remaining clauses in Article 8 were limited to only those two types of contracts.  Chu J has, however, said that although Article 8.2 contains no express words that limited its scope to Promoter Contracts and Agency Contracts, Article 8.2 is one of a series of clauses within an Article dealing with contract.  Further, according to Chu J, Article 8.2 cannot be read in isolation in establishing what contracts are covered by it, and that the references to “contract” in Articles 8.2 to 8.7 should bear the same meaning as that in Article 8.1 and references to “document” are references to documents supplemental to the two types of contracts referred to in Article 8.1.  Chu J then concluded Article 8.2 of Ordinance Number 5/2004 had no application to a credit agreement made between a concessionaire or sub-concessionaire and a gambler.

51.  Mr Ma has sought to distinguish the facts of the above case from the present one and submits that Chu J’s judgment only concerns Article 8.2 and not Article 8.6 or the rest of the Article 8.  This is clearly not correct as seen from above and the judgment.”  (Footnotes omitted)

13.  I see no reason to disagree with either of these authorities and the first and third arguments are accordingly rejected.

14.  As regards the second argument, there are only two factors put forward to support the contention that Macau is clearly or distinctly the appropriate forum.  These matters have again been considered in previous cases of similar nature and the court was not persuaded.  Firstly, it is said that all the witnesses and documents are in Macau.  The plain fact is that this is a simple case and the plaintiff is quite happy to bring its witnesses and documents to Hong Kong (where the defendant is based) to litigate.  The incentive for so doing is that a Hong Kong judgment can immediately be enforced against the defendant in Hong Kong.  This location of witness and document point was rejected by Deputy High Court Judge Bharwaney SC in Wynn Resorts (Macau) S A v Mong Henry, unrep, HCA 192/09, dated 29 June 2009 at para 13:

“13. Ms Lam submitted that the fact that all the relevant events took place in Macau and the fact that the plaintiff is a company incorporated under the laws of Macau made Macau clearly or distinctly more appropriate than Hong Kong. I do not agree. Documentary evidence can be adduced in the courts of Hong Kong and witnesses can come to Hong Kong to give evidence, if required to do so. The fact that the plaintiff is willing to submit to the jurisdiction of Hong Kong neutralises any weight to be placed on the fact that it is incorporated in Macau.”

15.  The second factor urged upon me by Mr Ma strongly is that this case involves Macanese law and such matters should best be resolved in Macau.  I do not find any substance in this point because it has not been demonstrated to me that there is any sustainable argument which involves Macanese law.

16.  For these reasons, I dismiss the stay application and grant summary judgment in favour of the plaintiff against the defendant in the sum of HK$7,350,000 with interest (based on the Agreement) at the rate of 4.5% p.a. from 8 June 2012 until judgment and thereafter at judgment rate until payment. 

17.  With some reluctance, I decline the plaintiff’s application for costs on indemnity basis against the defendant.  The costs of and occasioned by both applications be to the plaintiff to be taxed if not agreed.