WYNN LAS VEGAS, LLC v. MONG HENRY

HCA190/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 190 OF 2009

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  REASONS FOR DECISION

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Introduction

1.  This is the defendant’s application for stay of proceedings on the following grounds :

(1) the parties had agreed to submit to the exclusive jurisdiction of any court, state or federal, in Nevada, USA; and

(2) the Nevada court is the more appropriate and convenient forum for the trial of this action and Hong Kong is not the forum conveniens.

2.  At the outset of the hearing on 19 June 2009, Mr Zimmern, for the defendant, acknowledged the considerable difficulty in maintaining ground (2).  He made no submission on it other than relying on what the defendant had already stated in his supporting affirmations.  He concentrated his submissions, both written and oral, on ground (1) alone.

3.  After hearing the parties, I dismissed the application with costs and indicated that I would give my reasons in writing, which I now do.

Background

4.  The background may be summarized thus.

5.  The plaintiff is a limited company incorporated in Nevada, carrying on business as an operator of a casino and gaming resort in Nevada.  The defendant is a Chinese national and was at all material times a patron of the plaintiff’s casino.  The parties entered into a credit agreement dated 2 August 2007 (“the Credit Agreement”) whereby the plaintiff agreed to lend to him by way of advancing a credit line on terms and conditions contained therein.

6.  On or about 6 August 2008, pursuant to the Credit Agreement and upon the defendant’s request, the plaintiff advanced US$3 million to him, enabling him to gamble at the plaintiff’s casino.  The defendant signed a marker for that sum in favour of the plaintiff (“the Marker”).

7.  It is the plaintiff’s case that on or about 6 August 2008 and upon the defendant’s request, it advanced a further sum of US$37,000 to him to gamble at its casino.

8.  On 22 January 2009, the plaintiff commenced the present action, claiming against the defendant for the repayment of US$3,0370,000, which he failed to repay despite repeated demands, with interest.

9.  In his first affirmation filed in support of the stay application, the defendant said that he had repaid the first sum of US$3 million in full.  He denied that the plaintiff had advanced the second sum of US$37,000.  He also gave his version of the circumstances as to how the sum of US$3 million was advanced to him, which I need not go into detail for present purposes.

Discussion

10.  The Credit Agreement provided :

“I agree that Nevada law exclusively governs the terms of credit line, advances or credit instrument.  I agree that [the plaintiff] may litigate any dispute involving the credit line, the debt or the payee in any court, state or federal, in Nevada, I submit to the jurisdiction of any court, state or federal, in Nevada.”

11.  It is common ground that this clause does not confer exclusive jurisdiction on the courts in Nevada.   The plaintiff relied on this clause and argued that the Nevada court does not have exclusive jurisdiction over the present claims.

12.  However, the Marker stipulated :

“I acknowledge that the debt for which this instrument is issued was incurred in Nevada; agree that Nevada law governs the debt and this instrument; submit to the exclusive jurisdiction of any court, state or federal, in Nevada…”  [Emphasis supplied]

13.  The defendant relied on this clause and contended that this confers exclusive jurisdiction on the Nevada court.

14.  In my view, the defendant’s reliance on the Marker is misplaced for the simple reason that the plaintiff is now suing on the Credit Agreement and not the Marker.  Pursuant to the Credit Agreement, the defendant agreed : “I agree to sign credit instruments (i.e. checks) in the amount of the draw” against his credit line.  The Marker is described as “Check #: 70670127”.  Plainly, it is the credit instrument that the defendant signed for obtaining the credit advances of US$3 million under the Credit Agreement.  The Marker is in the present context mere evidence of the advances made under the Credit Agreement.  Any provision there on jurisdiction does not assist the defendant.

15.  That being the case, it is strictly not necessary for me to discuss the opinion evidence adduced by the parties on the effect of the jurisdiction clauses in the Credit Agreement and the Marker.  For completeness, I will briefly with their evidence thus.

16.  Mr Cabot, the plaintiff’s expert, has vast experience in this particular area of the Nevada law.   His views on the effect of the clauses are well supported by the relevant statues and good reasons.  On the contrary, the defendant’s expert, Mr Brian Bradford, only started his practice in 2004.  His views on the effect of the clauses are less cogent.  If need be, I would prefer and accept Mr Cabot’s evidence.

17.  In essence, Mr Cabot said that by the jurisdiction clauses, the defendant alone agreed to submit to the jurisdiction of the Nevada court.  I think there is ample commercial sense in this interpretation.  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.

18.  What remains is the ground on forum non conveniens.  Given Mr Zimmern’s stance, I only need to say that having considered all the relevant factors, I am not satisfied that this ground is made out.

Conclusion

19.  For the above reasons, I dismissed the stay application with costs.