Las Vegas Hil Ton Corporation v. Lo Yuk Leung

HCA008739A/1997

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

Coram: The Hon Mr Justice Findlay, in Chambers

Date of hearing: 24 November 1997

Date of handing down of judgment: 28 November 1997

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JUDGMENT

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Background

1. On 21 August 1997, the plaintiff issued a writ of summons against the defendant. The statement of claim alleged that the defendant obtained credit to the extent of US$3 million from the plaintiff to acquire gaming chips for the purpose of gambling at the plaintiff's tables in Nevada. Between 20 and 25 July 1996, the defendant utilised the credit extended to him, and, at the end of that period, he owed US2.74 million. This was payable in full by 22 January 1997, but the defendant has failed to pay.

2. On 4 September 1997, the defendant acknowledged service of the writ. On 12 September 1997, the defendant was served with a notice of intention to enter judgment. On 13 September 1997, the defendant issued a summons seeking an extension of 2 months within which to file and serve his defence. He was given a 30-day extension on 15 September 1997.

3. On 9 October 1997, the plaintiff issued a summons seeking summary judgment. On 28 October 1997, the defendant issued summons seeking a stay of the plaintiff's action on the grounds that the courts of Nevada were "the appropriate and natural forum for the resolution of the dispute between the parties to this action" rather than the courts of Hong Kong. The defendant made an affirmation in support of his application. In this, he points to aspects of the "plaintiff's own case (which is not admitted by me)" that, he argues, indicate that "Overwhelmingly, Nevada is the proper jurisdiction for the determination of this dispute." What the defendant does not do is identify the dispute that he talks about.

4. Registrar Betts heard both summonses on 10 November 1997. He ordered that the defendant's summons be heard "with but prior to the Plaintiff's summons". He also ordered that the plaintiff have leave to file and serve evidence in opposition within 42 days, and that the defendant have leave to file and serve evidence in reply within 28 days thereafter.

5. Registrar Betts ordered that the plaintiff's summons "be heard immediately after the Defendant's summons". In addition, he ordered that "The Defendant do have evidence in opposition to the Plaintiff's summons available for immediate filing and do provide a copy of the proposed evidence to the Plaintiff's solicitors within 42 days". He made a similar order in relation to the plaintiff's evidence.

6. On 13 November 1997, the defendant filed a notice of appeal against the order in respect of the plaintiff's summons seeking an order that the order by Registrar Betts be set aside. What the defendant does not like about Registrar's Betts order is that it requires that the plaintiff's summons be heard immediately after the defendant's summons, and that it requires the defendant to disclose his evidence before it may be necessary to do so. Mr Whitehead says that, if the defendant's application succeeds, it will not be necessary for him to file and serve evidence in the summary judgment application, and, by the early disclosure, the plaintiff will gain an advantage to which it is not entitled.

7. On 20 November 1997. the plaintiff also filed a notice of appeal. This sought an order that the defendant's summons be dismissed. Mr Lai argues that the defendant's summons was a mere delaying tactic, and it should be dismissed. He also says that judgment should be entered for the plaintiff.

8. The plaintiff's notice of appeal was out of time. No evidence was filed to justify this, but Mr Lai informed me that the plaintiff had not intended to appeal and did so only as "a reaction" to the defendant's appeal. As I understood Mr Lai, the plaintiff wanted to ensure that, if part of what Registrar Betts ordered on 10 November 1997 was to be reconsidered, the whole matter should be re-opened. This approach, to me, seems sensible. Indeed, even without the plaintiff's notice of appeal, it is difficult to understand how I could conduct the defendant's appeal as a re-hearing of only part of what Registrar Betts ordered. The Registrar's order was a package in which he was seeking to do justice to both parties in respect of both summonses. I can hardly change part of his order without reconsidering the whole package. Accordingly, I condone the plaintiff's late filing of its appeal and will consider it.

Considerations of the Appeals

9. The appeals are to be conducted as re-hearings of the summonses. Having considered the summonses afresh. I differ from Registrar Betts as to their proper disposal.

10. In my view, the defendant's summons is too late. In Mansour v Mansour [1990] FCR 17, Lord Donaldson MR, with whom Neill LJ and Balcombe LJ agreed, said at page 18 -

"If people want to raise the issue that the action would be more conveniently tried in a foreign court, they should do so at the very outset before costs are incurred in the proceedings .... it is of paramount importance that any application of this nature, which in effect is in much the same position as an application based upon the proposition that the court has no jurisdiction, should be made at the outset and that no steps, or very minimal steps, should be taken in the action before it is made. So, for my part, I would certainly refuse leave to appeal that order."

11. There are of course, strict time limits in the rules for applications under Order 12, rule 8.

12. This passage was cited with approval by Fuad. V.-P. in Hanil Bank and Others v Societe Generale and Others [1993] I HKLR 308, at 315.

13. The defendant did not make his application at the very outset. He did nothing, in fact, until he was told that application would be made for default judgment. Even then, he did not apply for a stay, but sought and obtained a lengthy extension of time in which to file a defence. After this, he sat idle until almost three weeks after the plaintiff intimated he would seek summary judgment. Only then, almost two months after he was aware of the action did he issue a summons seeking a stay.

14. In his affirmation in support of his application for a stay, the defendant makes no attempt at all to explain why he did not make an immediate application.

15. The principles relating to this sort of application are set out in Spiliada Maritime Corporation v Consulex Ltd [1987] AC 460. At page 477E, Lord Goff said-

"In my opinion, the burden resting on the defendant is not just to show that England is not the natural or appropriate forum for the trial, but to establish that there is another available forum which is clearly or distinctly more appropriate than the English forum. In this way, proper regard is paid to the fact that jurisdiction has been founded in England as of right..."

16. If the defendant truly believed that Nevada was "clearly or distinctly more appropriate than" Hong Kong as a forum for the trial of the issues in this matter, one would have expected this to be immediately apparent to the defendant and his legal advisers.

17. But this is not all. The defendant makes no effort in his affirmation to explain why he now thinks that Nevada was clearly or distinctly more appropriate than Hong Kong as a forum for the trial of the issues. It is, of course, necessary for him to do this because he lives at 30 Kennedy Road in Hong Kong, and one would have thought, on the face of it, that, if he were interested in anything more than delaying this matter as long as possible, he would be happy to have the matter tried in Hong Kong as a place much more convenient to him. If there were to be a trial, it is the plaintiff which would find it inconvenient to have a trial a long way from its base. In the absence of such an explanation, the court is left with the impression that his application is nothing but a delaying tactic.

18. The defendant utters not one word about the nature of his defence. This is important because it is not possible for this court to know which forum is clearly or distinctly more appropriate unless it knows what issues are to be tried. If, as may be the case, the defendant has no defence at all, then obviously the Nevada courts cannot be clearly and distinctly more appropriate to try the dispute - there is no dispute. The same would be the case if the defendant has a purely factual defence. If, on the other hand, there is a defence founded on the law of Nevada, one might conclude that Nevada is the appropriate forum to decide this. The defendant does not give the court any material upon which to judge this matter.

19. When I put this point to Mr Whitehead, he said that the defendant is entitled to conceal his defence at this stage. I do not accept this. As I have tried to point out, the question for me is whether the matters to be decided - the disputes or the issues - are more appropriate for the one jurisdiction or the other. That cannot be decided if the defendant conceals his hand and I do not know the nature of the disputes or issues.

20. Accordingly, on the defendant's summons, I conclude that it is too late, and, in any event, he has not begun to make out any kind of case upon which the court can accede to the application. His summons is dismissed.

21. On the plaintiff's summons. I do not think it would be just to enter judgment. Despite his reluctance to disclose one. the defendant may have some defence. I will give him the opportunity to answer the plaintiff's evidence in support of summary judgment. But I do not think that the defendant should have a lengthy period in which to do this. He has had ample time to consider the matter. The plaintiff's summons is adjourned to a judge in chambers to be heard as soon as possible. The defendant is given leave to file and serve evidence within 14 days on the summary judgment application, and the plaintiff is given leave to respond to this within a further 7 days.

The Costs

22. On the face of the matter, there seems no reason why costs should not follow the events. There will be an order nisi that the defendant pay the costs of the appeals. There will also be an order nisi that the defendant pay the costs of its application for a stay. I believe the costs of the plaintiff's application for summary judgment should be reserved. I make an order nisi accordingly.

Representation:

Mr Alex Lai, of Messrs Deacons Graham & James, for the plaintiff.

Mr Robert Whitehead, instructed by Messrs Stephenson Harwood & Lo, for the defendant.