Rambas Marketing Co., Llc v. Chow Kam Fai David

CACV001055/2001

CACV 1055/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 1055 OF 2001

(ON APPEAL FROM HCA 10190 OF 2000)

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Coram: Hon Mayo VP and Waung J, in Court

Date of Hearing: 12 March 2002

Date of Judgment: 12 March 2002

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J U D G M E N T

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Hon Mayo VP:

1.This is an appeal from an interlocutory judgment of Mr Recorder Ma (as he then was) when he dismissed the defendant's application for a stay on the grounds that Hong Kong was not the forum conveniens for the disposal of this action.

2.The plaintiff is a Nevada corporation which is registered as an overseas company in Hong Kong. It claims to be the lawful successor in title to Sheraton Desert Inn Corporation (SDIC) which operated the Desert Inn Casino in Las Vegas, Nevada.

3.The claim which the plaintiff is seeking to make against the defendant is for the recovery of the balance of a gambling debt.

4.It is claimed that the defendant signed three "markers" which enabled him to obtain US$5 million worth of gambling chips on 13 August 1995. He lost all of the gambling chips at the casino. It is accepted by the plaintiff that the defendant made part payment of US$232,000.00 on 11 April 1996. The claim being made is in relation to the balance of US$4,768,000.00.

5.It is pertinent to observe that following the determination of this application the plaintiff applied to the court for summary judgment under Order 14. The defendant sought a stay which was refused. Thereafter the plaintiff successfully obtained summary judgment. There has been no appeal from this.

6.At the time when the Judge entertained the forum conveniens application the plaintiff's claim in Nevada was still not time-barred. Now it is. One of the consequences of this is that if the present appeal is successful the plaintiff will be unable to pursue any claim it may have in the courts of Nevada.

7.There is a further consequence. The fact that a judgment has now been obtained in respect of this claim may have a significant bearing upon the cases being run by the respective parties.

8.The way the Judge dealt with the application was to set out fully Hunter JA's summary of the requirements in The Adhiguna Meranti [1987] HKLR 904 which in turn were derived from Spiliada [1986] 3 WLR 972:

"(I) Is it shown that Hong Kong is not only not the natural or appropriate forum for the trial, but that there is another available forum which is clearly or distinctly more appropriate than Hong Kong (p.986H). The evidential burden is here upon the applicant. The emphasis is upon 'appropriate' rather than 'convenient' because this is not simply a matter of practical convenience. The purpose is to identify the forum 'with which the action has the most real and substantial connection' per Lord Keith in the Abidin Daver [1984] AC 398. The principal factors are enumerated at p.987D. Failure by the applicant at this stage is normally fatal.

(II) If the answer to (I) is yes, will a trial at this other forum deprive the plaintiff of any 'legitimate personal or juridical advantages'? (pp.987F, 991-3). The evidential burden here lies upon the plaintiff (pp.986A and 987G).

(III) If the answer to (II) is yes, a court has to balance the advantages of (I) against the disadvantages of (II), Abidin Daver per Lord Brandon at p.419. Deprivation of one or more personal or juridical advantages will not necessarily be fatal to the applicant provided that the court is satisfied that notwithstanding such loss 'substantial justice will be done in the available appropriate forum' (p.991H). The court must try to be objective (p.991F). Proof of this, which can fairly be called the ultimate burden of persuasion, rests upon the applicant for the stay. By these means he establishes that on balance the other forum is more suitable 'for the interests of all the parties and the ends of justice'. This may be another way of saying that the plaintiffs' choice of forum has been shown to be so inappropriate as to deserve the pejorative description of 'forum-shopping' and to be restrained accordingly, cp. Lord Reid in The Atlantic Star [1974] AC 436."

9.There can be no doubt that these are the principles governing an application of this nature.

10.The Judge was almost exclusively concerned with stage I in the exercise. That is whether the defendant has succeeded in discharging the burden placed upon him of demonstrating that there is some other forum which is clearly or distinctly more appropriate than Hong Kong.

11.To find the answer to this the Judge had to consider the evidence which lay before him.

12.The first point which has to be made is that the defendant's supporting affidavit is mainly confined to identifying his background and present residential status. He claims at the present time to be mainly residing in Macau. It is not however contended that the action should be heard in the courts of Macau. The defendant did undertake to submit to the jurisdiction of the courts of Nevada.

13.The most important point made in the defendant's affidavit was to verify the contents of Mr Jeffrey Lane his lawyer's affidavit which dealt with the issues arising in this action.

14.It is evident from this affidavit that five issues will arise.

(1) The plaintiff's locus standi. It is contended by Mr Lane that the assignment of the debt to the plaintiff did not validly assign it to them. As was pointed out by the Judge what this amounted to was that the plaintiff was being put to formal proof of its claim. At this stage it is by no means clear the extent to which controversial issues will be engaged.

(2) The claim had been compromised. According to Mr Lane's affidavit the defendant operates a casino in Macau. Mr Lane then goes on to say that there is an international practice or convention that the operators of casinos do not enforce gaming debts against the operators of other casinos.

It is further contended that when the defendant signed the markers in question he did so on behalf of customers he was introducing to the casino and that the markers were only intended to provide security for his customers' gaming activities.

It was further claimed that when the defendant paid US$232,000.00 to SDIC this was in full and final settlement of his indebtedness.

It is apparent from the judgment delivered by the Judge that insufficient particulars had been given of these matters to enable him to conclude that any substantial issues would be joined on any of these matters.

(3) A marker which has not been negotiated cannot be enforced without proof of an underlying credit agreement.

(4) Where a marker is given as security for gambling debts it is in any event unenforceable.

(5) Jurisdiction is limited to the Nevada State Gaming Control Board.

15.These issues can all conveniently be shortly dealt with together.

16.On none of these issues was sufficient detail provided to enable the Judge to conclude that any problems would be encountered which could not readily be resolved by the Hong Kong courts.

17.Although the Judge quite rightly resisted the temptation of expressing views on the merits it is apparent from the affidavits of law submitted by the plaintiff that the issues involved are not complicated or difficult. The plaintiff would either succeed in proving its claim or it would not.

18.Mr Coleman for the defendant has set out with commendable industry all of the connecting factors which he submits clearly demonstrate that Nevada is the appropriate jurisdiction to entertain this claim.

19.The problem though which arises is the nature and extent of the material which was available to the Judge when he heard this application.

20.The defendant has not in my view been able to demonstrate on the criteria laid down in Spiliada with sufficient particularity that Nevada is clearly or distinctly a more appropriate forum for the resolution of this litigation.

21.In my view this appeal should be dismissed.

Hon Waung J:

22.I agree and I only wish to add this. This is an appeal against the exercise of discretion by the Judge. I think the Judge has correctly identified the principles. He has weighed all the circumstances together and I believe that he had exercised his discretion correctly. Nothing has been said to us to persuade us that we should disturb the exercise of his discretion. He applied the principles correctly. I also agree that the appeal should be dismissed.

Hon Mayo VP:

23.The appeal is accordingly dismissed. We order costs be to the plaintiff with certificate for two counsel.

24.In conclusion we would like to thank both counsel for the assistance they have given us.

Representation:

Mr John Griffiths, SC and Mr Anthony Houghton, instructed by Messrs Deacons, for the Plaintiff.

Mr Russell Coleman, instructed by Messrs Wilkinson & Grist, for the Defendant.

Please refer to FAMV8/2002 for the relevant appeal(s) to the Court of Final Appeal.