Venetian Macau Ltd v. Wu Xuhui

HCA 980/2024

[2026] HKCFI 519

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 980 OF 2024

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BETWEEN

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DECISION

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Introduction and Undisputed Background

1.This is the hearing of an application for summary judgment by the Plaintiff (“P”)  against the Defendant (“D”)  based on a HSBC cheque (“HSBC Cheque”)  in the sum of HK$16,322,082 which was presented for payment by P but was returned dishonoured on 22 May 2024.

2.P is a company incorporated under the laws of Macau carrying on the business of an operator of casinos and gaming resorts in Macau.

3.P has provided to D, a patron of casinos, various forms of credit facilities in the form of credit agreements in similar terms over the years:

(1)  In 2017, P and D entered into a credit agreement (“2017 Credit Agreement”)  for which D provided a blank cheque drawn on Industrial and Commercial Bank of China (Asia)  Limited (“ICBC Cheque”)  to P to secure the 2017 Credit Agreement;

(2)  In 2018, P and D entered into another credit agreement (“2018 Credit Agreement”)  for which D provided the HSBC Cheque in blank to secure the 2018 Credit Agreement; and

(3)  In June 2023, P and D entered into another credit agreement (“2023 Credit Agreement”).

4.D’s case, essentially, is that the HSBC Cheque was provided as security for 2018 Credit Agreement and there was no separate agreement that it can be used as security for the 2023 Credit Agreement.  According to D, prior to the execution of the 2023 Credit Agreement, at the request of and with the help of P’s representative and D’s relationship manager (“Ms Hoi”), D opened a new account with Bank of China (Macau)  (“BOC Account”).  Ms Hoi represented and D agreed that the security cheque for the 2023 Credit Agreement would be drawn on the BOC Account.  Subsequently, in around late 2023, a blank cheque (“the BOC Cheque”)  was provided to Ms Hoi as well as a cheque in the sum of HK$5M drawn on the BOC Account (“BOC HK$5M Cheque”). 

5.However, according to Ms Hoi’s Affirmation, §7 [A/ 21/133], whilst on 29 January 2024, D sought to replace the HSBC Cheque with the BOC Cheque, this request was ultimately rejected by P’s Premium Account Management team as the BOC HK$5M Cheque, which was accepted by P, was dishonoured on 14 May 2024.

6.D submitted that he has an arguable defence based on: (1) total failure of consideration; and/or (2)  promissory estoppel and/or estoppel by convention/representation.  It was submitted that the following triable issues are raised which cannot be resolved in an application for summary judgment:

(1)  Why P held on to the HSBC Cheque for 5 years when the 2018 Credit Agreement was fully repaid?

(2)  Did D request the return of the HSBC Cheque?  If D failed to do so, whether it was incumbent upon P to return the cheque when the underlying obligation is extinguished?

(3)  Under what circumstances was an agreement to use the HSBC Cheque reached?

(4)  Who are the parties privy to such an agreement and when was such an agreement reached?

(5)  If such an agreement was reached, why was the HSBC Cheque not annexed to the 2023 Credit Agreement?

Applicable Principles

7.The applicable principles for summary judgment are well-established.  In Guanghua SS Holdings Limited v Lim Yew Cheng & Another [2022] HKCFI 1052 at §13, Ng J set out a helpful and succinct summary of the proper approach to such 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; and

(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.

8.As for the law on dishonoured cheque, it is well-established that cheques are treated as equivalent of cash and should be honoured unless there is some good reason to the contrary.  Where an application is made for summary judgment in respect of a claim on a dishonoured bill of exchange, the general rule is that leave to defend will not be given unless there are exceptional circumstances: see e.g. Xu Ziming v Ruifeng Petroleum Chemical Holdings Limited (unrep)  HCA 450/2013, 6 May 2015 per DHCJ Marlene Ng (as she then was)  at §15 and Hong Kong Civil Procedure 2026, Vol 1, §14/4/19.

9.For the purposes of s 21(2)(b)  of the Bill of Exchange Ordinance, Cap 19, extrinsic evidence including oral evidence may be adduced to show that a cheque is not intended to have the effect of transferring property from the drawer to the drawee: see Xie Shili v Cheung Wai Keung [2018] HKCFI 2431 at §§10-11 per DHCJ Victor Dawes SC.  Whilst it was also held that oral evidence may be particularly probative when parties put forward two completely versions of events leading to the drawing and delivery of the cheque, if the question of fact is not capable of being believed, this matter should not go to trial. (see §§12 and 16).

Discussion

10.I will applying the above principles to the present case.

11.I am satisfied that P’s application for summary judgment was properly constituted.  The present action, commenced by writ, is one which O 14 of the Rules of the High Court, Cap 4A (“RHC”)  applies.  The Re-Amended Statement of Claim was served on D and D has given notice of intention to defend as required under O 14, r 1 of RHC.  The affirmations filed in support of the application also comply with the requirements under O 14, r 2 of RHC.  Thus P is prima facie entitled to judgment unless D shows cause to the contrary.

12.It is trite that in an application for summary judgment that mere assertions in an affirmation does not mean that leave to defend should be granted since the defendant has to satisfy the court that his evidence is reasonably capable of belief.  “A desire to investigate alleged obscurities, and a hope that something will turn up on the investigation cannot, separately or together, amount to sufficient reason for refusing to enter judgment for the plaintiff.  You do not get leave to defend by putting forward a case that is all surmise and Micawberism” per Megarry V-C in Lady Anne Tennant v Associated Newspapers Group Ltd [1979] FSR 298.

13.Having heard the submissions of Ms Lee, counsel for P, and Mr Leung, solicitor advocate for D, I am of the view that D’s defence is incredible and not capable of belief and therefore raises no triable issue. 

14.Firstly, as analysed in P’s Skeleton Submissions and set out below, D has advanced various different and somewhat inconsistent versions of defence to P’s claim in the various affirmations filed by D which undermines the credibility of D’s defence:

(1)  In the 2^nd Affirmation of Wu Xuhui dated 21 August 2024 (“Wu 2^nd”)  at §§31-32 [A/18/93-95], D contends that: (a) the 2023 Credit Agreement was signed by him under “undue influence of the relationship manager of the Plaintiff”; and (b)  there was a collateral agreement between P and D that D can have a longer repayment time than that stipulated under the 2023 Credit Agreement.  None of these matters have since been relied upon in D’s subsequent affirmations, particularly in D’s latest affirmation in opposition to P’s present O 14 Summons (“Wu 6^th”). In fact, in Wu 6^th and in D’s Skeleton Submissions, D has advanced his interpretation of the terms of the 2023 Credit Agreement;

(2)  In the 4^th Affirmation of Wu Xuhui dated 27 November 2024 (“Wu 4^th”), §25(4)  [A/19/112-123], D contends that P has “waived its rights to apply or deposit the HSBC Cheque” and D has also “revoked [his] authorisation to the Plaintiff to apply or deposit the HSBC Cheque” in the following circumstances:

(a)  In or around 2017, D has entered into a credit agreement with P, pursuant to which D provided the ICBC Cheque to P;

(b)  In or around 2018, D provided the HSBC Cheque to P after entering into 2018 Credit Agreement with P.  There is no suggestion that the HSBC Cheque was given to P under any vitiating factor recognised in law such as duress, undue influence or misrepresentation.  According to D, his understanding is that “despite [he] deposited two cheques with [P] at that time, [P] was only allowed to deposit one cheque where [he] had outstanding debts to [P], instead of both cheques”.  There was no mention of any replacement of the ICBC Cheque by the HSBC Cheque;

(c)  In or around December 2020, D informed P that his bank account with ICBC was closed and the ICBC Cheque was no longer valid.  According to D, P informed him that it was not a problem as P still had the HSBC Cheque, and that this accorded with D’s understanding that he has only authorised P to hold “one cheque” as security all along.  (Therefore, on D’s own case, after the ICBC Cheque became invalid and P was made aware of the same in December 2020, the HSBC Cheque was and must be the only valid “one cheque” which he has authorised P to hold as security);

(d)  In June 2023, the 2023 Credit Agreement was entered into;

(e)  In October 2023, D had a meal with Ms Hoi, during which Ms Hoi allegedly asked D to provide a new blank cheque to replace the ICBC Cheque (“Alleged Oral Conversation”).  No mention was made to the HSBC Cheque.  According to D, he did not know why Ms Hoi did not mention the HSBC Cheque during the meal and suspected that it was because Ms Hoi “was new to the position and was not aware of the existence of the HSBC Cheque”;

(f)  Solely on the basis of the Alleged Oral Conversation, D argues that: (a)  P has agreed to “waive its rights of applying or depositing” the HSBC Cheque; and (b)  D has “revoked [his] authorisation to P to apply or deposit” the HSBC Cheque;

(g)  After the Alleged Oral Conversation in October 2023, D provided: (a)  the BOC Cheque which allegedly replaced the HSBC Cheque and (b)  the BOC HK$5M Cheque for partial repayment of P’s debt; and

(h)  In or around November 2023, Ms Hoi allegedly returned the ICBC Cheque to D and yet the HSBC Cheque was somehow not returned to D.  D suspected that Ms Hoi was by then “not aware of the HSBC Cheque either”;

In the premises, on this version of D’s case, the ICBC Cheque is completely irrelevant as: (i)  it was invalid after D’s closure of bank account in November 2020 (which P was made aware of in December 2020); and (ii)  it was in any event allegedly returned to D in November 2023.  As at the time of the signing of the 2023 Credit Agreement in June 2023, there was only one valid cheque which was in P’s possession, namely the HSBC Cheque.  This in fact accorded with D’s own alleged understanding that he only authorised P to hold “one cheque” as security all along.  The alleged waiver of rights/authority in relation to the HSBC Cheque only first came about by reason of the Alleged Oral Conversation in October 2023, even though on D’s case the HSBC Cheque was not even mentioned during the Alleged Oral Conversation.  Therefore, the only live issues are (a)  whether the Alleged Oral Conversation did exist; and (b)  if it existed, the legal effect of the Alleged Oral Conversation on the dishonoured cheque claim;

(3)  In the 5^th Affirmation of Wu Xuhui dated 11 April 2025 (“Wu 5^th”), §§21-43 [A/22/146-157], D simply refuted P’s affirmation evidence and raised no new factual matters apart from those already set out in Wu 4^th.  At §29, he said “the parties understood that P was still retaining blank cheque(s)  previously provided by me as collateral and therefore it was unnecessary for me to provide any new cheque and the issue of cheque was never brought up…”; and

(4)  In Wu 6^th dated 25 August 2025 [A/25/169-209], 4 months later, D raised the following new matters and allegations which are not advanced before and/or are inherently inconsistent with D’s previous case:

(a)  That the parties have “agreed orally and affirmed by conduct” to a collateral agreement and/or modification to Clause 13 of the 2023 Credit Agreement [B/28/219] that P will not fill in and/or apply the HSBC Cheque without giving D prior notice, (“Prior Notice Agreement”).  The Prior Notice Agreement was never raised in any of D’s previous affirmations;

(b)  That upon D’s provision of the HSBC Cheque, P no longer has the authority to fill in or present the ICBC Cheque for payment as it was “replaced” by the HSBC Cheque.  This allegation was never mentioned in D’s previous affirmations.  In any event, the ICBC Cheque is irrelevant for the reasons stated above;

(c)  That upon the full settlement of the loan under the 2018 Credit Agreement, the HSBC Cheque was rendered redundant and any authority given to P was revoked.  This contention was also never raised in D’s previous affirmations;

(d)  That shortly after Ms Hoi was assigned to D in June 2023, she allegedly suggested to D that the “HSBC Cheque was provided too long ago and it would be better for D to provide a new blank cheque to replace the same”.  Not only was this never raised in D’s previous affirmations, this is also inconsistent with D’s previous allegations that Ms Hoi was not aware of the existence of the HSBC Cheque even by October/November 2023;

(e)  That the “mutual understanding” of the parties at the time of the 2023 Credit Agreement was that D would “provide a new blank cheque for the 2023 Credit Agreement” drawn on a BOC account to be opened by D, and that there was no agreement between the parties that the HSBC Cheque shall be used as security under the 2023 Credit Agreement.  Again, not only was the “mutual understanding” never raised in D’s previous affirmations, this also flatly contradicts what D previously claimed to be the mutual understanding of the parties at the time, as mentioned in sub-paragraphs (2)  and (3)  above in Wu 4^th and Wu 5^th; and

(f)  In the Alleged Oral Conversation in October 2023, Ms Hoi allegedly reminded D to replace the ICBC Cheque and the HSBC Cheque.  This is again inconsistent with D’s previous account of the Alleged Oral Conversation that Ms Hoi “did not mention the HSBC Cheque” and that she was still unaware of the existence of the HSBC Cheque by October/November 2023.

15.Whilst Mr Leung submitted that there was no inconsistent defence because Wu 2^nd responded to P’s case based on breach of contract and not dishonoured claim, this cannot explain the discrepancies and inconsistencies pointed out above between Wu 4^th and Wu 5^th and the new defence put forward in Wu 6^th.  The fact that the authority for P to use the HSBC Cheque had been revoked in 2018, the agreement and understanding of the parties prior to the 2023 Credit Agreement etc, are plainly new matters not previously raised and smacks of a recent invention. 

16.Secondly, D’s case that gaming credits were advanced to D without protection of any valid security (until the BOC Cheque was provided in late 2023 but at the time was not known when it would be provided)  is inherently unlikely and contrary to commercial sense as well as the following clauses of the 2023 Credit Agreement:

(1)  Clause 4 which provides: “... Each time the Lender [i.e. P] grants to the Borrower [i.e. D] credit, the Borrower agrees to execute a negotiable instrument in the amount of credit provided, as attached to this Agreement as Annex 1 to the Lender.  The Borrower shall only receive casino chips as loan proceeds if Borrower agrees to sign any one of such negotiable instrument.”; and

(2)  Clause 13 which provides: “The Borrower agrees to provide the Lender, at Lenders’ option, and as security for the issuance of credit, a personal check or other form of acceptable negotiable instrument in the amount of the casino chips transferred to him/her, which the Lender may apply toward payment.  The lender may complete any portion of the personal cheque or other form of negotiable instrument that may be missing or left blank …”. [my emphasis in bold]

17.Thirdly, D’s case on the Alleged Oral Conversation and Prior Notice Agreement is not supported by any contemporaneous document.  D’s purported reliance on WeChat messages between him and Ms Hoi in February to April 2024 do not support D’s case.  Whilst Mr Leung submitted that P’s case is not supported by any contemporaneous documents, in particular, the HSBC Cheque was apparently not annexed to the 2023 Credit Agreement and Annex 1 has not been produced, given D’s acceptance that one cheque was required as security (as was the case with the previous Credit Agreements and as required under the terms of the 2023 Credit Agreement)  and at the time of 2023 Credit Agreement only the HSBC Cheque was valid, D’s case is not credible in light of the undisputed background, common sense and commercial reality.

18.In all the circumstances, for the reasons explained above, I am of the view that D’s case is not reasonably capable of belief.  The desire to investigate those matters raised by D (at paragraph 6 above)  hoping something will turn up is not basis for this matter to go to trial when the alleged oral agreement or understanding reached by the parties prior to the 2023 Credit Agreement is not capable of belief.

[Discussion on order and costs]

Disposition and Orders

19.I would order summary judgment against D for the sum of HK$16,322,082 within interest at 1% per annum above HSBC prime rate from 22 May 2024 to the date of Judgment and thereafter at judgment rate until full payment.

20.I also order D to pay P’s costs of the Summons dated 18 June 2025, including costs of this action, which has been summarily assessed by me at HK$320,000 (save for P’s costs of the two Summonses filed on 25 November 2024 and 20 December 2024 filed by D which has yet to be assessed).

Ms Rosa Lee, instructed by Messrs. Johnson Stokes & Master, for the Plaintiff

Mr Gary C.C. Leung, Solicitors Advocate of Messrs. Withers, for the Defendant