IMPERIAL PACIFIC INTERNATIONAL (CNMI), LLC v. CHAN CHI HUNG

HCA 75/2018

[2025] HKCFI 1511

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 75 OF 2018

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REASONS FOR DECISION

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INTRODUCTION

1.  At the hearing of an application made by the defendant by way of summons dated 20 January 2025 seeking leave to file and serve two witness statements and one supplemental list of documents (“D’s Summons”), I allowed the defendant’s application after hearing submissions from counsel on both sides. I said I would provide the reasons for my decision in due course. Here are the reasons.

BACKGROUND

2.  In short, the plaintiff (“P”) is a limited liability company incorporated in the Commonwealth of the North Mariana Island (“CNMI”), which is a USA territory, operating a licensed casino on the Island of Saipan (“the Casino”). The holding company of the casino is one Imperial Pacific International Holdings Limited (“Imperial Pacific”), which is a company incorporated in Bermuda and is listed on the Stock Exchange in Hong Kong with code No 1076. Madam Cui Lijie (“Cui”) was the sole shareholder of Inventive Star Limited (the controlling shareholder of Imperial Pacific) and is the director of Imperial Pacific. Mr Ji Xiaobo (“Ji”) is the son of Cui. He is alleged to be holding convertible notes in Imperial Pacific and held a senior management position in a subsidiary company of Imperial Pacific. It has been alleged that he is regarded as the “boss” (directing mind) behind Imperial Pacific and P.

3.  In this action, P is seeking repayment of US$1,446,184.40 plus interest at 24% per annum based on US$1.5 million of non-negotiable gambling chips (“the Chips”) given to D on or about 13-14 October 2016 pursuant to an alleged loan agreement governed by CNMI laws. Alternatively, P seeks repayment of US$1.5 million alleging D has been unjustly enriched by the receiving and gambling of the Chips at the Casino.

4.  It is D’s case that the Chips provided to D were a gift given by Ji either on behalf of P or in his personal capacity to encourage the intended business cooperation between Imperial Pacific and D with an estimated investment amounting to about HK$1 billion to HK$2 billion. D alleges that the purported loan documents (ie the purported loan agreement, the purported promissory note and the purported credit change request allegedly executed between P and D in relation to the Chips) were a mere formality: see §§4-9, 13 of the Re-Amended Defence (“RAD”). Alternatively, D alleges that he was induced into signing the purported loan documents based on representations of the Casino’s staff on the nature and effect of those documents. Further, D contends that the purported loan is unenforceable, illegal or part of a fraud for violation of certain laws and codes of the CNMI. In addition, D says that he had not been unjustly enriched as inter alia D had lost all the Chips to the Casino. Hence, the defences of D are mainly gift, mistake, estoppel by representation, fraud, non est factum and illegality: see §§18-36 of RAD.

5.  The witness statements of the parties were exchanged on 26 July 2023. On 30 October 2023, D filed the RAD, the supplemental witness statement of D and the supplemental list of documents pursuant to the leave given by Master Lai on 20 October 2023 following a consent order submitted by the parties.

6.  Pursuant to the Order of Master Kot dated 19 March 2024, the case has been set down for trial on 16 June 2025 with 8 days reserved. The Pre-trial Review was scheduled to be held on 21 March 2025 before me.

DISCUSSION

Events leading up to D’s Application

7.  The events leading to D’s current application have been set out in §§4-7 of D’s 7^th Affirmation. In essence, D alleges that a friend of his by the name of Wong Tak Wai (“Wong”) had accompanied him on the trip to Saipan in 2016. D alleges that he was unable to contact Wong about this case until shortly after mid-2024. This is because Wong had been serving a term of imprisonment for about 3 years in Macau until 2021. Thereafter, Wong was forbidden to contact D for a period of 3 years after his release under the terms of his parole. D further alleges that in September 2024, Wong was willing to testify for D, but he changed his mind in October/ November 2024 after being told that in D’s application for leave to file Wong’s witness statement, D had to explain to the Court why it had taken him several years to secure Wong to give evidence on his behalf. It was alleged by D that Wong then became unwilling to have his history of imprisonment in Macau being disclosed. It was only in January 2025 that he agreed to testify on behalf of D regarding what he had seen and witnessed during the trip to Saipan in 2016.

D’s Grounds of Application

8.  Mr Yim for D submits that the evidence contained in Wong’s witness statement, if accepted by the trial judge, will corroborate the evidence of D in respect of P’s representation made by the Casino staff and Ji concerning the Chips. Thus, it is highly relevant to the defence of gift and estoppel by representation mentioned under issue no 2 & 7 in the Joint Statement of Issues in Dispute submitted by the parties. Likewise, Mr Yim submits that D’s 2^nd supplemental witness statement was mainly to correct the timing of the events as stated in his main witness statement. This becomes necessary after Wong had disclosed photo records of the Saipan trip which recorded the dates and different activities of the group while they were in Saipan.

9.  As to D’s 2^nd supplemental list of documents, it contains photos and documents annexed to Wong’s witness statement and D’s 2^nd supplemental witness statement. D therefore submits that the application would assist the Court in securing “the just resolution of disputes in accordance with the substantive rights of the parties”: see Wong Koon Wah v All Persons of Lot No. 775 in Demarcation District 21y6 & Anor [2020] HKCFI 1260 at §51, citing Deputy High Court Judge M Ng (as she then was) in the case of Civic Limited v 余綺妙 and others, HCA 225/2011 (12 July 2013). Secondly, Mr Yim submits that the application would cause no real prejudice to P as it would not jeopardize the trial dates or would likely prolong the trial itself. Further, as the application was made about 4 months before the commencement of trial in June 2025, P would have sufficient time to file supplemental witness statements in response if so desired. Thus, there would be no real prejudice to P which cannot be compensated by an appropriate order of costs. Last but not least, Mr Yim submits that there was no conscious flouting of the rules of the Court, practice direction and/or case management timetables, or any over-reaching or deliberate of manoeuvring on the part of D.

P’s Grounds of Objections

10.  Ms Cheung for P submits that there have been no satisfactory explanation for the delay on the part of D as to why Wong could not have given his witness statement much earlier. I do not agree with her submission on this as Wong has clearly explained this in his witness statement. Further, it is clear from the documents subsequently produced by D under his 8^th Affirmation that the Macau Court has confirmed that Wong was convicted of the offence and the time he was prohibited from contacting D. Given the above, I find the main ground of Ms Cheung’s objection as contained in her written submissions no longer applies.

11.  In my judgment, the contents of the witness statement of Wong and the photographs disclosed under the 2^nd supplemental list of documents are clearly relevant to the real issues in dispute in this case and they would assist the just resolution of the dispute between the parties. Even though they may have come late in the proceedings, I accept the explanations provided by D.

12.  Therefore, at the end of the hearing, I allowed the filing of Wong’s witness statement as well as the 2^nd supplemental witness statement of D and also the 2^nd supplemental list of documents containing the photographs and other relevant documents. However, I had shortened the filing and service time of the above documents as well as giving leave to P to file any further supplemental witness statement of Ji and Kang and any other additional witness statements from other witnesses they can locate in order to respond to the issues raised in Wong’s witness statement and D’s 2^nd supplemental witness statement before the commencement of trial. This would give sufficient time for P to respond to the matters raised in Wong’s witness statement as well as D’s 2^nd supplemental witness statement. I believe that it would strike a fair balance between allowing relevant documents and evidence to be admitted before the trial as well as sufficient time for P to respond to the matters raised under those documents.

13.  For the above reasons, I allowed the application. As for costs, D has not disputed that he has to pay the costs of the application as they are asking an indulgence from the Court and from P. The only difference between the parties is on what basis such costs should be awarded.

14.  Ms Cheung on behalf of P submits that those costs should be awarded on an indemnity basis. She cited the the following authorities to support her contention. Mimmie Chan J in Converge Design and Construction Company Limited v Mount Kelly International Limited [2020] HKCFI 2433, HCCT 72/2018 (15 September 2020) at §2 has reminded the parties that “CJR is about early preparation for trial, in order to achieve the objectives of the Rules.” In Yang Yani v Fang Minyun [2024] 1 HKLRD 632, although Queeny Au-Yeung J allowed new evidence to be adduced by late of supplemental witness statement of the defendant and witness statements of two new witnesses 3 months prior the trial, the learned judge ordered for costs to the plaintiff on an indemnity basis where the learned judge commented that it is “only fair” to D and costs should be awarded on such basis. Similar ruling has been made in the case of Wong Koon Wa v All persons of Lot No.775 in Demarcation District 21y6 & Anor, supra where costs on indemnity basis has been awarded for the granting of indulgence to file evidence at a late stage.

15.  Despite Mr Yim has referred me to a number of authorities to say why the indemnity costs should not be made in this case, with respect, I do not agree with his submissions on this. As it was D who asked the Court for an indulgence to file and serve the witness statement of Wong and 2^nd supplemental statement of D as well as D’s 2^nd supplemental list of documents late, in my view, they should bear the costs of the application on an indemnity basis. In my view, P is perfectly entitled to resist this application. Therefore, I would make an order that D should pay the costs of application, including the costs of the hearing and the costs of preparing the submissions on an indemnity basis. Such costs will be summarily assessed by this Court. P is directed to lodge with the Court its statement of costs within 7 days and D so directed to lodge a list of objection, if any, within 7 days thereafter. The Court will summarily assess the costs on paper.