Materia Logic Ltd v. Muxic Ltd

DCCJ 3959/2024

[2026] HKDC 1169

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3959 OF 2024

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DECISON

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A.  INTRODUCTION

1.In this action, the plaintiff (“P”) claims payment from or damages against the defendant (“D”) for two outstanding invoices totalling US$57,881.47 (“the Disputed Invoices”).

2.By notice of appeal dated 27 April 2026, P appeals against Master Vivian Lee’s order dated 13 April 2026, dismissing its summons for summary judgment; and granting D unconditional leave to defend. This is the decision of the appeal by way of re-hearing.

B.  PLEADED CASES AND PROCEDURAL BACKGROUND

B.1  P’s Statement of Claim (“SOC”)

3.This case concerns cloud services (“the Cloud Services”) provided by Amazon Web Services (“AWS”), for which Ingram Micro (China) Limited (“Ingram”) is the direct distributor, and P is a direct reseller of Ingram (§§3-5).

4.The “AWS Organizations” feature on AWS’s platform enables users to create an organization by a single AWS account (“the Management Account”) joining one or more AWS accounts (“the Member Accounts”) (§6).

5.On 27 January 2023, Mr Wong Ka Ki and Mr Jimmy Lam (“Mr Lam”) (acting as the director of P and D respectively) entered into an oral agreement (“the Oral Contract”) during a telephone call, pursuant to which P agreed to accept D’s AWS account to be joined as a Member Account of P’s Management Account on AWS (§7).

6.“The [Oral Contract] contains the following material terms” (§8), which are labelled as “Step 1” to “Step 3” for convenience:

(1)  Step 1:  “[D] agrees to abide by the AWS Service Terms. Alternatively, the AWS Service Terms form part of the Oral Contract as implied terms (to be implied by law/ necessity/ obviousness/ business efficacy)”.

(2)  Step 2:  “When [D] orders service(s) from AWS, [P] will pay the charges of the Cloud Services provided by AWS via [P’s] Management Account to AWS on behalf of [D]”.

(3)  Step 3:  “Thereafter, [D] will pay [P] the charges for the Cloud Services ordered and/or used by [D] upon receiving [P’s] invoice issued from time to time”.

(4)  “The process involves three steps:

(Step 1)  [D] reserves the Cloud Services by itself and associate the order(s) with [P’s] AWS account.

(Step 2)  [P] pays for [D’s] order(s) to AWS in advance.

(Step 3)  [D] pays [P] the amount stated in the invoice(s) issued by [P] to [D].”

7.Pursuant to the Oral Contract (§10), the three steps took place as follows:

(1)  Step 1: D used the Cloud Services from February to April 2023.

(2)  Step 2: P made payments for such use to AWS on D’s behalf.

(3)  Step 3: P issued two invoices dated 17 April 2023 and 15 May 2023 “INV-0001” and “INV-0018” respectively (collectively, “the Undisputed Invoices”); and D settled the Undisputed Invoices on 9 May 2023 and 22 May 2023 respectively.

8.In respect of the Disputed Invoices, P pleads the three steps in a single paragraph (§11), which is broken down sequentially as follows:

(1)  Step 1: D “used the Cloud Services again from: (a) 1 May to 11 May 2023; and (b) 11 May to 16 May 2023”.

(2)  Step 2: “Accordingly, pursuant to the [Oral Contract] [P] paid the Cloud Service charges to AWS on behalf of [D]”.

(3)  Step 3: P issued the Disputed Invoices, which D failed to settle.

9.Three months after the SOC, P served Answer to Request for Further and Better Particulars of the Statement of Claim dated 29 October 2024 (“Answer to FBP”), giving further particulars of its claim regarding the Disputed Invoices as follows:

(1)  Step 1(§(a)): in respect of the corresponding usage, P relies on a usage report printed on 5 August 2024, which was sent by AWS to P as the user under the Management Account and Member Account (“the 2023-05 Usage Report”)[1].

(2)  Step 2(§(b)): “Under [P’s] usual business practice, [P] would settle the charges for the use of Cloud Services by its Member Accounts to AWS on a monthly basis. Due to [D’s] refusal to pay the charges of its use of Cloud Services in May 2023 as mentioned under [SOC §11], [P] has settled the said charges to AWS over 4 batches” some five to 11 months after D’s said usage in May 2023 (Step 1), and some four to seven months after the issue of the Disputed Invoices (Step 3), as follows:

Date	Amount
27 October 2023	HK$135,459.08
29 December 2023	HK$80,000.00
25 January 2024	HK$70,000.00
25 April 2024	HK$150,000.00
TOTAL:	HK$435,459.08

(3)  Step 3(§(d)): By two emails dated 15 June 2023, P issued the Disputed Invoices, which D failed to settle, as follows:

Invoice	Amount (US$)	Amount (HK$)
INV-0024	US$5,899.92	HK$46,192.37
INV-0035	US$51,981.55	HK$406,827.34
TOTAL:	US$57,881.47	HK$453,019.71

(4)  As to the basis of the above sums in the Disputed Invoices, the amount and calculation mechanism for these charges are “outside the scope of [P’s] discretion [and P] merely facilitates to settle the charges incurred on behalf of [D] with AWS”. The figures of the invoices are based on the time when the services took place (§(c)).

B.2  D’s Defence

10.D raises two broad grounds of defence: (1) the authority defence; and (2) the Oral Contract defence.

11.D denies the Oral Contract, averring that, at all material times, Mr Lam was neither a director of D nor authorised to act as its agent; and that the purported telephone call (which is not admitted) did not constitute any agreement (§7).

12.Pursuant to P’s quotation sent on or about 19 January 2023, D employed P at a fixed charge of HK$120,000 to advise on the setup of cloud servers and a metaverse application in support of D’s one-off project, namely its first metaverse event known as the HSBC DuoVerse music show, which was successfully held on 11 February 2023 (§8) (“D’s 1^st Event”).

13.D pleads a non-admission as to its alleged use of the Cloud Services resulting in the Undisputed Invoices (§10).

14.Regarding the Disputed Invoices, D initially planned to host another metaverse event on 11 May 2023, but it was cancelled (“D’s 2^nd Event”). D did not, and did not need to, engage P to provide any advisory services for this abortive event. Nevertheless, D received the Disputed Invoices on or about 15 May 2023 (§§11, 13c).

B.3  Procedural history

15.By letter dated 27 October 2023 (which is not before this Court), P sent a reminder to D to settle the Disputed Invoices.

16.In what appears to be its first pre-action letter dated 30 January 2024[2], P’s former solicitors demanded that D settle the Disputed Invoices based on “contracts entered into between you and our client dated … 1 May 2023 (“Contract B”) and 11 May 2023 (“Contract C”) respectively”. Further, the letter stated:

“Contract B and Contract C

Since 2023, Our client and you have agreed that when you order service(s) from [AWS] (“the Services”), our client will act as your payment agent and pay the charges of the Services to AWS in advance (this allows you to get a greater discount from AWS). Thereafter, you will reimburse our client after our client issues the invoice to you from time to time. The process involved three steps: (Step – 1) you reserve the cloud services by yourself and associate the order(s) with our client’s AWS account (Step – 2) our client pays for your order(s) to Amazon in advance, and (Step – 3) you reimburse our client.

By undertaking this process, you agreed to be responsible for the Services charges payable to our client. Our client has been periodically issuing invoices to request payment from you.” (emphasis added)

17.In the letter, despite its clear reference to the three steps and its allegation of D’s breach of the Oral Contract, P was completely silent on Step 2 ― the fact that P paid AWS on D’s behalf in relation to the charges incurred under the Disputed Invoices.

18.On 16 July 2024, P issued a writ indorsed with the SOC. On 3 February 2025, D filed the Defence. By order dated 15 July 2025, P was granted leave to file a Reply by 28 July 2025.

19.Before filing a Reply, P took out a summons on 20 October 2025 for summary judgment, for which the parties have filed: (1) Affirmation of Wong Ka Ki dated 20 October 2025 (“Wong 1^st Aff(P)”); (2) 2^nd Affirmation of Chau Kin Wang dated 13 January 2026 (“Chau 2^nd Aff(D)”); (3) 2^nd Affirmation of Wong Ka Ki dated 6 March 2026 (“Wong 2^nd Aff(P)”); (4) 3^rd Affirmation of Wong Ka Ki dated 31 March 2026 (“Wong 3^rd Aff(P)”).

C.  APPLICABLE PRINCIPLES

20.The following propositions set out by DHCJ Richard Khaw SC in Alpha Financial Press Ltd v AMTD Group Co Ltd [2022] HKCFI 1084 §§27-32 are not in dispute.

“Summary judgment should only be brought in cases where it is clear that the defendant cannot show a “real or bona fide defence” or “a fair probability of reasonable grounds that a bona fide defence exists”. The court should not embark on a mini-trial of affidavits, and unless it is obvious that the defence is “frivolous and practically moonshine”, summary judgment must not be granted.” (§27)

“While the burden lies on the Defendants to show a triable issue or a bona fide defence, a defendant’s failure to adduce positive factual evidence does not necessarily constitute a ground for summary judgment to be granted if the plaintiff’s pleaded case is fundamentally unsuitable for summary judgment from the outset.” (§28 citing Ju Yan Di Emperory Genesisy v Yau Wai Han [2015] 1 HKLRD 822 §14, Cheung JA).

“Hence, the plaintiff is required to first show that it is a suitable case for summary judgment. Only then will the burden shift to the defendant in showing that judgment should not be granted in the plaintiff’s favour because of an issue or question that ought to be tried, or because there are other reasons why there ought to be a trial” (§29).

“If the plaintiff’s own case casts doubts on whether summary judgment should be granted, the proper course is to grant leave to defend” (§30).

“[S]ummary judgment will be granted on the merits of the plaintiff’s pleaded case. The statement of claim must therefore be complete and good in itself, and any defect or omission cannot be corrected by way of a supplemental affirmation. No new assertions of fact relating to the cause of action can be raised in the affirmation” (§31).

“[S]ummary judgment should be refused where there is a dispute as to the terms of an oral contract being sued on unless the plaintiff demonstrates that (1) it is entitled to judgment even on the defendant’s case, or (2) the defendant’s case is neither truthful nor credible” (§32).

D.  THE ORAL CONTRACT DEFENCE

D.1  P’s evidence on the Oral Contract

21.P relies on two matters to establish the Oral Contract: (1) Mr Lam’s apparent authority to enter into the Oral Contract[3]; and (2) “the existence of a well-established course of dealing” based on the Undisputed Invoices and D’s settlement of them[4].

22.Regarding D’s failure to settle the Disputed Invoices, P alleges the performance of Steps 1 and 2 of the Oral Contract as follows.

23.P’s evidence on the performance of Step 1 comprises the following:

(1)  Under the terms and conditions set out on AWS’s website, a user is required to pay for capacity reservation regardless of its actual usage, as follows:

“Pricing

Capacity Reservations are charged at the equivalent On-Demand rate whether you run instances in reserved capacity or not, including any applicable regional surcharge for Dedicated Instances. If you do not use the reservation, this shows up as unused reservation on your Amazon EC2 bill. When you run an instance that matches the attributes of a reservation, you just pay for the instance and nothing for the reservation. There are no upfront or additional charges.”[5] (emphasis added)

(2)  From an email dated 3 April 2023 from Miss Lam of AWS (“Miss Lam”) to Yana Ng and Isaac Chong of D, Miss Lam set out the details of the capacity reservation for D’s 2^nd Event for D to confirm. She also reminded D as follows:

“Created CRs will not have an end date. Customers need to add end date in their console if they would like EC2 to automatically to cancel th…” (the screenshot of this email is truncated at this point)[6]

(3)  In an email dated 4 April 2023 (to which Mr Lam of D was not copied), Yana Ng of D replied to Miss Lam of AWS as follows:

“We have no problem with the upcoming arrangements. Meanwhile, may we have a quote/ price estimate for the mentioned scope?”[7]

(4)  In a WhatsApp group chat, the following exchanges occurred on 3 May 2023 between Miss Lam of AWS and Isaac Chong of D[8]:

“Miss Lam:	may I confirm that you have accepted the capacity reservation of 300 g4n.4xlarge (sic) instances?
Issac Chong:	Yes, we have accepted it in the AWS console
Miss Lam:	[After setting out the hourly rate] Please be minded to the capacity reservation will NOT end automatically. Please (1) add end date in your console if you would like EC2 to automatically cancel the Capacity Reservation at specific date and (2) terminate EC2 instances after use.” (emphasis added)

(5)  P states that the following WhatsApp message, which is alleged to represent a discussion between Miss Lam of AWS and Isaac Chong of D on 16 May 2023, evidences that D did order the capacity reservation for D’s 2^nd Event[9]:

“Issac Chong:	…We have terminate all the EC2 instances after the event. But AWS is still charging us every day after May 11. Could you help us resolve that?
Issac Chong:	i’m manually cancelling all reservation now too.
Miss Lam:	[Replying the reminder she sent earlier and quoted above] Please check here” (emphasis added)

(6)  In an email dated 21 June 2023, Miss Lam of AWS informed Mr Lam of D that AWS had reminded D “multiple times through various channels including phone calls, emails, and WhatsApp messages, to manually add an end date to their capacity reservation.”[10] She then attached the screenshot of the WhatsApp message on 3 May 2023 referred to above as proof.

(7)  The 2023-05 Usage Report (printed on 5 August 2024) for the period of May 2023 shows the number and name of D’s Member Account, and the details of the “usage” which P states stemmed from D’s failure to terminate or cancel the capacity reservation, as follows[11]:

Account	Description	Total
867792263409 (Muxic)	Unused Reservation Linux g4dn.4xlarge Instance Hour	US$57,881.47

24.On Step 2, P deposes to the following:

“Under [P’s] usual business practice, [P] would settle the charges for the use of Cloud Services by its Member Accounts to AWS on a monthly basis. Due to [D’s] refusal to pay the charges of its use of Cloud Services in May 2023, [P] has settled the said charges to AWS over four batches …”[12] (emphasis added)

D.2  D’s evidence on the Oral Contract

25.D puts P to strict proof of the Oral Contract[13], relying on two matters to demonstrate the unlikelihood of its existence.

26.First, D denies the existence of any “usual business practice” or “mode of operation / course of dealing” by virtue of its settlement of the Undisputed Invoices, which concerned development costs for conducting “proof of concept test” and stress test in a sandbox environment on AWS for a prospective metaverse concert[14].

27.Second, D did not actually use the Cloud Services in the period alleged in the Disputed Invoices because D’s 2^nd Event was already cancelled, i.e. Step 1[15]. The 2023-05 Usage Report fails to prove that the usage of cloud services shown in the Member Account was caused by D, given the absence of documentary records such as work logs or data used by D through the Member Account, or that it was related to Ingram[16]. The Disputed Invoices lack any breakdown and particulars[17].

D.3  Analysis of the Oral Contract Defence

28.It is important to consider “the basic premise of the plaintiff’s claim or its inherent strength and weakness”, and whether “[i]n the absence of a proper explanation by the plaintiff, a serious doubt is cast on the plaintiff’s case and hence a triable issue is raised”: Ju Yan Di Emperory Genesisy v Yau Wai Han [2015] 1 HKLRD 822 §§14, 16, Cheung JA.

29.In my view, P’s own evidence, in particular on Step 2, casts serious doubt on its case, and a triable issue is plainly raised.

30.First, P’s pleaded case regarding the Oral Contract materially differs from its case disclosed in the pre-action letter dated 30 January 2024, in which P alleged a “Contract B” dated 1 May 2023, a “Contract C” dated 11 May 2023, and an alleged agreement “Since 2023”. The alleged telephone conversation on 27 January 2023 is conspicuous by its absence.

31.Second, a more fundamental problem appears in P’s case. According to the Oral Contract pleaded in the SOC §11, P would first pay AWS (Step 2) before issuing invoices to D for reimbursement (Step 3). This is contradictory to both the Answer to FBP and Wong 1^st Aff(P) §10, in which P states that its payments to AWS in respect of the Disputed Invoices were “due to” D’s refusal to pay the relevant charges (to P). This creates serious doubt as to whether the parties did agree to the terms of the Oral Contract as pleaded, in particular Step 2 where P would pay AWS first and then seek some kind of reimbursement from D in Step 3.

32.Lastly, P’s own evidence at least implicitly suggests that it has never paid AWS the relevant charges incurred pursuant to the Oral Contract. Since Step 2 has not been performed, there is no basis for P to issue the Disputed Invoices and seek payment.

33.At the hearing, Mr Wong, counsel appearing for P, fairly accepted that P adduced no evidence to explain any of the above. On this ground alone, the appeal is dismissed.

34.For completeness, there is also a serious issue to be tried in respect of Step 1 of the Oral Contract. In the WhatsApp messages dated 16 May 2023, Isaac Chong of D informed Miss Lam of AWS that they had “terminate[d] all the EC2 instances after the event”. Mr Wong frankly acknowledged that there is no evidence as to what “event” was referred to. Since D2’s 2^nd Event was cancelled, it may well refer to D’s 1^st Event held in February 2023. It follows that P’s assertion that this meant D only terminated the relevant Cloud Services “after the event on 11 May 2023”[18] is unsupported by, and contrary to, the evidence.

E.  THE AUTHORITY DEFENCE

35.P relies on four matters to argue that D had represented that Mr Lam had authority to enter into the Oral Contract[19]:

(1)  D produced and permitted Mr Lam to distribute a business card stating his title as “Metaverse Production Director”[20].

(2)  D assigned Mr Lam an email account [email protected] and allowed him to use it to communicate with third parties.

(3)  D settled the Undisputed Invoices, and a Miss Law of D confirmed such payment with Mr Peng of P via WhatsApp[21].

(4)  Isaac Chong’s omission to raise any issue as to Mr Lam’s authority, despite being sent all four invoices by emails copied to Mr Lam, was alleged by P to constitute “representations by conduct/silence”.

36.D relies on the following to argue that Mr Lam lacked actual or apparent authority to enter into the Oral Contract on behalf of D.

(1)  Mr Lam was employed as a “part-time senior metaverse developer”; and his position shown in his employment contract dated 20 June 2022 was “Senior Metaverse Developer (part-time)”[22].

(2)  He was neither a director nor senior enough to make such a decision as his business card stated his job title as “Metaverse Production Manager”. However, D did not exhibit any such business card, and only exhibited an Annual Return dated 8 February 2025 (i.e. more than two years after the material events)[23].

(3)  Mr Lam had to work under the supervision of a project manager or Mr Chau (D’s CEO), and could only communicate with clients for the limited purposes of advising and liaising on technical aspects of specific projects[24]. Mr Lam, as a member of D’s technical staff, was required to seek prior approval from his superior even for the purchase of tools or services[25].

37.In Thanakharn Kasikorn Thai Chamkat v Akai Holdings Ltd (2010) 13 HKCFAR 479, Lord Neuberger of Abbotsbury NPJ (with whom the other members of the Court agreed) authoritatively explained the law on apparent authority as follows:

(1)  “[A]pparent authority is based on a representation (normally implied) as between the alleged principal and the third party as to the authority of the alleged agent” (§64).

(2)  If an agent purports to clothe himself with authority, the question would still arise as to whether he had authority to authorise himself to bind his principal, which is, at least normally, the same as asking whether he has apparent authority to bind his principal (§66).

(3)  “It must be a most unusual and peculiar case where an agent who is known to have no general authority to enter into transactions of a certain type can by reason of circumstances created by the principal reasonably be believed to have specific authority to enter into a particular transaction of that type.” (§§68, 70)

(4)  It is “very hard indeed to conceive of any circumstances in which an alleged agent, who does not have actual or apparent authority to bind the principal, can nevertheless acquire apparent authority to do so, simply by representing to the third party that he has such authority” (§70).

(5)  “[B]efore any representation by the agent could be relied on to assist the contention that he had apparent authority, the court would have to be satisfied that the principal had given the alleged agent apparent authority to make the representation in question. Furthermore, any such representation would have to be “clear and unequivocal … by reference to the practical realities of the particular case” (§71).

(6)  “[T]he indoor management rule cannot be used to create authority where none otherwise exists; it merely entitles an outsider, in the absence of anything putting him upon inquiry, to presume regularity in the internal affairs of a company when confronted by a person apparently acting with the authority of the company.” (§59, citing Northside Developments (1990) 170 CLR 146, 198, Dawson J)

38.Despite the valiant attempt by Mr Wong to contend for the existence of authority based on the four matters alleged by P, as well as the indoor management rule, a triable issue or a bona fide defence on authority is plainly raised in light of the above authority. It is fairly accepted that there is no evidence at all that Mr Lam participated in any of the discussions shown in the emails and WhatsApp produced. Even if it is established that he was privy to those discussions, this fact would hardly assist P’s case that Mr Lam had actual or apparent authority to enter into the Oral Contract. The appeal is dismissed on this additional ground.

F.  IRREGULAR STATEMENT OF TRUTH

39.In the SOC and Answer to FBP, the two respective Statements of Truth read:

“The Plaintiff, Materia Logic Limited, believes that the facts stated in this Statement of Claim are true.

I, Wong Ka Ki, the Director of Materia Logic Limited, am authorised to sign this Statement of Truth of the Plaintiff.”

40.In the Defence, the Statement of Truth reads:

“We, the Defendant, believe that the facts stated in the Defence are true.

Name: Chau Kin Wang

Director of the Defendant”

41.The aforesaid Statements of Truth are irregular: Grandee Model & Casting Co Ltd v Grey Advertising Hong Kong Ltd [2012] 3 HKC 155 §§5, 16-21 (Temporary Registrar C Lee); Bpost Hong Kong Ltd v Jade Incorporation Ltd [2017] 5 HKLRD 453 §§19, 27 (DDJ Benny Lo). As the parties failed to verify the said documents in accordance with Order 41A, rules 3 and 5 of the Rules of the District Court, Cap 336H, they have been directed by consent to file fresh Statements of Truth strictly in accordance with Order 41A, rule 5 read with the above authorities within seven days from the date of this hearing.

G.  DISPOSITION

42.For the above reasons, the learned Master was entirely correct in granting D unconditional leave to defend. I make an order in the following terms:

(1)  P’s appeal be dismissed.

(2)  On a nisi basis, P do pay D the costs of and occasioned by this appeal, to be summarily assessed on the papers, with certificate for counsel.

43.For the purposes of summary assessment, the parties are directed to lodge and serve both physically and electronically:

(1)  D’s statement of costs (limited to 2 pages) within 7 days from the date of this decision;

(2)  P’s bullet-point objections (limited to 2 pages) within 7 days thereafter; and

(3)  D’s bullet-point reply (limited to 2 pages), if any, within 3 days thereafter.

44.I thank Mr Wong and Mr Mok for their helpful submissions.

Mr Joseph Wong, instructed by David Fenn & Co, for the Plaintiff

Mr Billy Mok, instructed by Ravenscroft & Schmierer, for the Defendant