LIU XIAN FENG SAM AND ANOTHER v. LIU BO AND OTHERS

HCA5474/2001

香港特別行政區

高等法院原訟法庭

民事司法管轄權

案件編號2001年第5474號

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主審法官： 高等法院原訟法庭法官任懿君

判 案 書

前言

1. 本訴訟涉及第一原告人劉先鋒及第一被告人劉波兩叔侄的金錢糾紛。

2. 原告人入稟法院向劉波Easy Super Limited(“Easy Super”) (浚穎有限公司)和First Victory International Limited(“First Victory”)(冠順國際有限公司)追討2,579,310 美元。劉先鋒聲稱是他或他全資擁有的美國公司King Star Computer Inc. (第二原告人)把該款項存入劉波香港私人戶口和Easy Super的香港戶口，讓劉波可於香港及中國內地替他購買電腦零件。

3. 劉波則堅稱金錢為他所擁有，是三叔劉先鋒給他生產電腦伺服器(computer servers)的報酬。此外，劉波提出反索償，要求劉先鋒歸還早前從他香港私人戶口擅自動用的410,000 美元。

4. 劉先鋒、劉波均選擇出庭作證。雙方並無傳召其他證人。

原告人案情

5. 劉先鋒於1986 年移居美國三藩市。他曾於1988 年至1991 年間任職Compaq電腦公司的裝嵌技工。及後，他於1991 年在加州矽谷(Silicon Valley)成立King Star Computer Inc. ，開拓生產伺服器的生意。

6. 1998 年，劉先鋒返回中國內地安徽省馬鞍山市，成立馬鞍山明星電腦公司，計劃於內地生產伺服器。不過，計劃最終沒有得到落實，他反而在馬鞍山市開設了一所網吧。

7. 2000 年6 月，劉先鋒在侄兒劉雲的穿針引線下安排正失業的劉波以每月工資800 元人民幣進入其內地公司工作。

8. 2001 年初，劉波和另外兩名劉先鋒的外甥陶傳保、陶慶功向叔父表示希望移民加拿大。為幫助侄兒及便利公司資金調動，劉先鋒於同年5 月在香港出資成立Easy Super和First Victory兩有限公司。Easy Super的股東是劉波和陶傳保，董事則為劉波一人。First Victory的股東及董事為陶傳保、陶慶功兩兄弟。

9. 2001 年5 月14 日，在陶傳保弟弟劉先益的陪同下，劉先鋒和劉波到香港恆生銀行加拿芬道分行開啟兩個賬戶。呈堂的銀行文件顯示，這兩個賬戶的持有人分別是劉波和Easy Super。劉先鋒只是劉波私人戶口的被授權簽字人，劉波則是Easy Super戶口的唯一被授權簽字人。

10. 劉先鋒解釋，他由始至終都指示劉波去開啟一個屬於他倆的聯名戶口，好讓二人能動用戶口內的資金購買電腦零件和軟件。基於對劉波的信任，在開戶時他沒有去了解太多就簽名，也不知道原來劉波才是該戶的唯一持有人。至於Easy Super戶口，他更不清楚為何自己不是該戶的被授權簽字人。劉先鋒指出，由於與劉波在開戶時早有共識自己才是兩個戶口的主人，賬戶支票簿一直歸他保管，並放於深圳辦公室內。

11. 2001 年5 月下旬至2001 年9 月，在劉先鋒的指示下，一筆共值2,364,500 美元的款項從King Star Computer Inc. 美國戶口存入First Victory深圳戶口。於同年5 月至10 月，一筆與上述數額相約美元款項由First Victory深圳戶口存入上述劉波的私人戶口。

12. 2001 年6 月至2001 年9 月，在劉先鋒的指示下，另一筆共值624,810 美元的款項從King Star Computer Inc. 美國戶口存入Easy Super香港戶口。

13. 根據劉先鋒的說法，上述資金調動是因為他有意幫助侄兒創造有利移民申請的條件和發展在中國內地的電腦生意，例如投資網吧。

14. 2001 年6 月21 日，劉波以支票過戶形式從Easy Super香港戶口調動85 萬美元到劉波的私人戶口。劉先鋒解釋，當時劉波因證件問題而未能於6 月到港，他於是吩咐侄兒作出如此安排以方便自己動用公司資金。

15. 2001 年10 月5 日，劉先鋒動用劉波私人戶口內的40 萬美元作基金投資。他亦曾於劉波的私人戶口提取10 萬美元自用。於2001 年12 月3 日前，劉波從沒有針對這些舉動作任何投訴。

16. 2001 年7、8 月時份，劉先鋒太太從丈夫的妹妹劉先美口中得知劉波向昆山明星電腦公司借錢。

17. 2001 年11 月，劉先鋒與太太返抵上海，劉波到機場迎接。三人在昆山停留了3至4 天才出發到馬鞍山市。停留昆山期間 ，劉太太在辦公室內發現劉波簽下的借據。

18. 2001 年11 月20 日，劉太太當著劉先鋒面前質問劉波，要求他歸還借款。當時，劉波沒有否認動用過公司金錢，沒有解釋動用的金錢是工作使費，更沒有表明金錢是他所有。劉波只說金錢已花光，他也沒辦法。最後，劉波拂袖而去。

19. 有感公司資金可能被人擅自動用，劉先鋒決定將劉波私人戶口和Easy Super戶口內的美元轉賬到太太在香港的戶口。

20. 2001 年11 月26 日，劉先鋒與太太乘火車到達深圳並於當地消遣了3至4 日。期間，劉先鋒嘗試過聯絡劉波一次，不果 。劉先鋒表示，他不立即到香港辦理轉賬手續是因為他知道劉波的港澳通行證已過期，劉波不可能於短期內來港。

21. 2001 年11 月30 日，劉先鋒與太太前往香港恆生銀行加拿芬道分行，欲轉賬250 萬美元。銀行職員要求二人用支票進行過戶。劉先鋒與太太立即折返深圳辦事處找支票簿。

22. 2001 年12 月1 日，劉先鋒找回有關支票簿並發現劉波簽下三張空白支票。他命公司會計員魯華與其太太商量開票事宜。劉太太帶著支票即日來回深港兩地。過程中，劉太太沒有遇上任何問題。

23. 2001 年12 月4 日，劉太太致電恆生銀行，查詢轉賬情況，才得知支票不能兌現。劉先鋒與太太於同日下午4 時趕到銀行了解情況。由於劉波已取消劉先鋒被授權簽字人的身份，銀行職員拒絕讓他們查閱戶口。劉先鋒遍尋不獲劉波音訊。

24. 翌日，劉先鋒到尖沙咀另一恆生銀行分行找一位相熟的銀行職員。該朋友向他透露有關戶口只剩餘大約66 萬美元。劉先鋒最終決定報警求助。

25. 經魯華安排，劉先鋒與劉波於2001 年12 月10 日在深圳竹園賓館見面。劉波承認將有關戶口內的120 多萬美元過戶到大新銀行。他亦同意應把金錢物歸原主及陪同三叔回港處理有關事宜。兩叔侄同意用5 張支票來攤還該筆款項。開票後，在場的六人包括劉先鋒、劉波一起整夜輪流玩撲克牌。

26. 2001 年12 月11 日早上，劉先鋒陪同劉波到深圳中旅社辦理泰國簽證。原因是劉波沒有有效的港澳通行證。大家想到由深圳經泰國到香港的辨法。申請簽證期間，劉波質疑做法的可行性。劉波提議返回馬鞍山市申請港澳通行證。最終，劉先鋒劉波兩叔侄乘飛機到南京。陶傳保與劉先益於機場接機。四人於當日晚上7 時到達馬鞍山市。劉先鋒入住酒店而劉波則返回公司宿舍休息。

27. 第二 天早上11 時許，劉先鋒接到弟弟劉先益電話，得知劉波在申請港澳通行證期間逃走了。

28. 大約在2001 年12 月13 日，劉先鋒到香港恆生銀行要求兌現劉波在竹園賓館簽下的5 張支票。銀行職員表示除非劉波在場，否則轉賬無法進行。劉先鋒報警求助及聘請律師向香港法院申請禁制令。

29. 2003 年4 月初，劉先鋒獲悉劉波因懷疑偽造身份證明物件而被馬鞍山市公安拘捕。劉波託人傳話，表示希望劉先鋒能代其支付律師費以辦理保釋申請，而他則願意交還金錢。

30. 大約於2003 年4 月18 日，劉先鋒收到一封由劉波書寫及簽署的道歉信。詢問過香港律師的法律意見後，劉先鋒認為劉波有必要做一份公證書。劉波提出條件，要求被釋放和得到2 萬元人民幣。劉先鋒答應，後到公安局撤銷對劉波的投訴。

31. 劉波於2003 年4 月30 日獲准保釋外出。而劉先鋒一方則開始忙著為公證書作準備。

32. 劉先鋒在劉波潛逃期間代領了他的身份證明文件。順應劉波的要求，劉先鋒作出聲明，確認他從未使用劉波的證件作任何不法勾當。

33. 2003 年，劉先鋒與劉波在公證人見證下交換文件。本以為事情告一段落。怎料，劉波後來推翻先前的說話，拒絕歸還金錢。

被告人劉波的案情

34. 劉波於大學時期曾修讀電腦操作及應用的科目。1991 年畢業後，他進入馬鋼，工作範圍離不開電腦應用方面。每月工資最多不超過2,000 元人民幣。

35. 2000 年6 月，劉波於馬鞍山市街頭遇上剛從美國返鄉的三叔劉先鋒。大家交換聯絡電話。據劉波所說，當時他正在黨校內進修。

36. 2000 年7 月，劉波收到三叔的邀請到深圳竹園賓館商談設計電腦伺服器事宜。三叔提出，若劉波能替他設計一個由普通私人電腦硬件組成的伺服器，他願意給劉波50 萬元人民幣作報酬。

37. 商談完畢，劉波和三叔到深圳的賽格市場選購普通私人電腦的硬件。過了3至4 天，劉波帶著三叔購買的一台私人電腦回到馬鞍山市，進行設計伺服器的研究。

38. 2000 年9 月，劉波與三叔再次於深圳竹園賓館會面。劉波向三叔展示設計圖並詳述自己的設計概念。待上海新奇生公司完成製作機箱，劉波便著手負責裝嵌電腦組件及對伺服器進行調試。其後，三叔帶著一個由劉波獨力設計的2U 伺服器回美國。

39. 2000 年10 月，三叔再次與劉波在內地見面。三叔對劉波的設計表示讚賞，並要求他多製作幾台供美國公司宣傳之用。這次，劉波決定製作42 台2U 伺服器。機箱仍然由上海新奇生公司製作，裝嵌組件、調試伺服器則落在劉波一人身上。

40. 2000 年12 月初，劉波完成生產42 台2U 伺服器。他以速遞方法付運到美國King Star Computer Inc.。

41. 2001 年1 月，三叔從美國到深圳與劉波見面。三叔告訴劉波他的設計在美國大受歡迎。美國微軟電腦公司就劉波的設計跟三叔簽定合同，涉及金額高達2,000 萬至3,000 萬美元一年。為此，三叔主動提出跟劉波簽約，內容如下：

(甲)   King Star Computer Inc. 以20 萬美元一部的價錢向劉波訂購15 部伺服器。每部伺服器需由80 台劉波設計的2U 伺服器所組成；

(乙)   King Star Computer Inc. 以50 萬美元聘請劉波在未來5 年跟進他所設計的4 款伺服器；及

(丙)   假若劉波的設計為King Star Computer Inc. 帶來盈餘，劉波可獲利潤的百分之十。

42. 簽訂合同後，劉波著手以馬鞍山明星電腦公司名義進行生產。一切機箱交由上海新奇生公司製造，電腦零件購自深圳和香港再運送到上海。生產初期，劉波獨力負責裝嵌及調試工作。2001 年1 月至3 月間，劉波製造、寄運200 台2U 伺服器到美國。

43. 2001 年3 月，劉波運用三叔早前給他的50 萬元人民幣設計費成立昆山明星。劉波接受三叔的建議，把小姑媽劉先美和另一 名親戚劉明俊列為該公司股東。

44. 因昆山明星的員工分擔了裝嵌的工作，劉波在2001 年3 月至5 月間成功製造及寄運600 台2U 伺服器到美國。

45. 2001 年5 月，三叔以First Victory名義跟屬於劉波擁有的Easy Super簽訂兩份合同，大意是First Victory以20 萬美 元一部的價錢訂購劉波設計的兩款1U 伺服器各15 部。每部需由80 台伺服器組成。

46. 2001 年5 月14 日，在三叔的陪同下劉波到香港恆生銀行加拿芬道分店替Easy Super和自己開啟賬戶。整過個程，每簽署一 份文件，銀行職員都有解釋內容，三叔亦在場聆聽。劉波授權三叔成為他私人戶口的被授權簽字人。

47. 2001 年5 月30 日起至同年10 月15 日，三叔將劉波應得的報酬經First Victory深圳戶口存入Easy Super香港戶口和劉波香港私人戶口。

48. 2001 年7 月，劉波共製成及寄運410 台2U 伺服器。

49. 2001 年12 月3 日，劉波因港澳通行證已逾期無效，於是在深圳參加旅行團到香港。抵埗後，他到恆生銀行欲從自己的私人戶口提取現金購買電腦零件來製造15 部1U 伺服器。查看之下，劉波驚覺賬戶內只剩餘7 萬美元。銀行經理隨後拿出4 張聲稱由劉波簽署的支票。劉波當場更改自己的簽名、取消給予三叔的授權並作出聲明，表示支票並不是他本人發出的。此外，劉波特意叮囑銀行負責人，若非他在場，不要兌現任何以他名義簽署的支票。而銀行方面承諾會替劉波追回失去的金錢。

50. 2001 年12 月5 日 ，劉波回到上海。他一直無法聯絡上三叔。

51. 2001 年12 月10 日，當時劉波身在上海，他收到魯華的通知，說已找到三叔並安排他倆叔侄於深圳竹園賓館見面。劉波依時應約。三叔解釋款項是他太太挪用的。三叔希望劉波能與他一起回馬鞍山市找三嬸說明白。劉波與三叔就在賓館逗留一夜，待明天啟程回馬鞍山市。

52. 2001 年12 月11 日，劉波與三叔乘坐飛機於下午4 時抵達南京機場。到場迎接的有劉先益、陶傳保等。一行人再轉陸路到三嬸位於馬鞍山市的住所玉蘭園。到達玉蘭園的時間大約是下午5 時，劉波不但未能見到三嬸，而且三叔更命他交出手提電話。劉波感覺到他被綁架了。

53. 晚上11 時，劉波被帶到一處名為向山的地方。在那裡，劉波被逼簽下數張支票。他身上的物品亦被姑媽劉先美及兩名陌生人拿走，當中包括眼鏡、護照、身份證、港澳通行證、銀包、家裡門匙和昆山明星辦公室、昆山明星宿舍及深圳辦公室的鑰匙。

54. 2001 年12 月14 日，劉波被帶到及禁錮於昆山明星宿舍，由陶傳保、陶慶功等人看管。劉波向陶氏兄弟詳述12 月3 日發生事情的始末。過了兩天左右，陶氏兄弟決定放走劉波並給他500 元人民幣應急。劉波致電回家，請太太為其申請補領身份證。而他本人則到上海找哥哥劉雲。

55. 得到哥哥金錢上的協助，劉波帶著太太為他申請的新身份證起行到香港向警方求助。大約於2001 年12 月24 日，劉波到達深圳，嘗試在沙頭角口岸報警。當時警方表示，除非他進入香港境內，否則暫時不能受理他的案件。

56. 2002 年1 月5 日，劉波參加到香港的旅行團，但在通過海關之際被扣留。他被帶到尖沙咀警署錄取共兩份會面記錄，協助警方調查一宗涉及130 萬美元的盜竊案件。

57. 期後，警方正式落案起訴劉波盜取劉先鋒130 美元。劉波被還押茘枝角拘留所直至2002 年8 月23 日律政司刑事檢控科決定撤銷起訴為止。2002 年8 月24 日劉波離開香港。

58. 為準備這次由三叔興起的民事訴訟，劉波曾於2003 年1 月到過上海新奇生公司、昆山及深圳辦公室找尋重要文件。可惜，昆山辦公室已由別的公司租用，而存於其他地方的重要文件懷疑已全被三叔拿走。

59. 2003 年4 月3 日，劉波被公安以偽造身份證明文件的罪名強行從廣州開平帶返馬鞍山市。

60. 2003 年4 月4 日，於馬鞍山市公安局孫棉春辦公室內，劉波被逼供有關這宗香港民事訴訟的事。劉波堅決不合作。辦公室的人就不向他提供飯餐，不准他睡覺，有時更毒打已被鎖上手扣的他。

61. 這樣的對待一直持續到第二天。劉波的意志變得薄弱。辦公室的人終於成功逼令他抄寫及簽署給三叔的道歉信。

62. 2003 年4 月30 日，劉波獲准保釋外出。三叔是他的擔保人。三叔指派劉先益、陶傳保等人居於劉波家。據劉波所講，三叔此舉實為軟禁他，防止他與外界聯繫。

63. 遭軟禁期間，劉波撰寫一份經歷書並將之秘密地傳真到香港的代表律師。經歷書目的為講述劉波在馬鞍山市公安局內被威逼利誘下簽署文件的情況。

64. 劉波指出，他從來沒有在任何公證人前作過公證書，沒有給香港代表律師出解聘信，更沒有致函香港高等法院懇求裁定三叔勝訴。

案件綜合分析

65. 本席認為劉先鋒的證供有不盡不實之處。

66. 首先，劉先鋒沒可能不知道自己只是劉波私人戶口的被授權簽字人而不是持有人。從該戶口的印鑑咭可見，銀行職員在劉先鋒的護照號碼旁寫上「被授權人」，而他就於護照號碼緊接的下方簽署。本席認為一個多冒失的人在這情況下也沒可能錯^誤理解劉先鋒與劉波是共同擁有該戶口的。另外，關於Easy Super的戶口，劉先鋒既不是Easy Super的股東，也不是董事，甚至連被授權簽字人也不是，他就更無理由相信自己有權力動用內裡的資金。

67. 第二，劉先鋒一直都聲稱自己不知2U 機箱為何物。不過，當將King Star Computer Inc. 的網頁向他展示時，他便顯得不耐煩。網頁開宗明義是介紹1U、2U、3U 等機箱的。劉先鋒又怎可能對2U 機箱全無了解呢？本席相信，他並不是不懂，只是為著某種原因刻意迴避問題。

68. 第三，為甚麼劉先鋒在2001 年短短5個月內將大量美元存入有關戶口呢？他承認劉波曾經代買機箱，亦曾經提及存款目的一為方便劉波於中國內地及香港購買電腦零件和軟件；二為開拓中國內地的電腦生意。但究竟怎樣的發展計劃，買多少零件及軟件需要用上幾百萬美元呢？劉先鋒沒有任何解釋。另外，若然存款是用來購買電腦零件，開拓生意，那為甚麼金錢從5月存入以來，除了劉先鋒曾拿41 萬美元自用外，就沒有人動用過呢？劉先鋒也沒有交代。

69. 本席考慮到剛踏入二十一世紀，被千年蟲問題困擾的矽谷經濟一落千丈，很多矽谷的生產商都紛紛到中國內地和香港購買零件以減低成本。劉先鋒當時是否其中一份子？他是否將資金先注入香港銀行以準備在不久將來於內地大展拳腳？有這個可能。不過，這只是本席的揣測。實情如何，就只有劉先鋒、劉波兩叔侄最清楚。

70. 話雖如此，本席認為三叔的不盡不實之處，仍不足以動搖他案情的重要部分：有關款項無論轉賬到誰人的戶口，它都是由King Star Computer Inc. 美國戶口轉出來。換句說話，金錢本屬於劉先鋒的。這一點劉波也沒有爭議。本案的關鍵在於劉波能否於答辯中成立有關款項為著某個原因而最終成為了他的財產。

71. 劉波的證供有多個犯駁之處嚴重影響他個人誠信及案情。

72. 第一、聽過專家證人張教授的證供，本席對劉波能否製造一部如他所說般強而有力的伺服器深感懷疑。張教授清楚解釋為何他認為劉波說不上是在設計伺服器，更遑論是在設計一部強而有力的伺服器。例如，劉波聲稱於每一台伺服器內都裝上一個光驅盤，而每一部強而有力的伺服器就內藏80 個光驅盤。張教授指出，礙於光驅盤的功用只在閱讀資料，一部擁有80 台處理器的伺服器只需要一至兩個光驅盤已足夠應付。劉波所謂的設計在實際應用上只會浪費金錢和浪費伺服器內的空間。劉波就張教授所言沒有多加反駁，他更由始至終都無法清楚交代究竟是怎樣將80 台伺服器連結在一起的。

73. 第二、劉波聲稱三叔在雙方沒有任何磋商下主動向他提出以20 萬美元一部的價錢訂購他設計的15 部伺服器。若每一部伺服器的成本真如他所說為12 萬至14 萬美元，製造一部伺服器便能為劉波帶來6至8 萬美元利潤。另一方面，劉波指三叔將他設計的42 台伺服器以每台3,000 美元售予美國微軟電腦公司。本席姑且假設劉波的設計有3,000 美元的市場價值。屈指一算，一部劉波設計的伺服器就只能為三叔帶來24 萬美元進賬、4 萬美元的利潤。那麼，劉先鋒所得之利潤豈非比劉波所得的還要少？加上，劉波自己也承認他為三叔所做的其實任何曾修讀電腦學系的大學生都能做到。本席不禁要問，一個白手興家的生意人如劉先鋒可不可能在沒任何磋商之下簽定如此合同，讓侄兒於短時間內賺取比自己還要多的巨額利潤呢？本席認為不可能。

74. 再者，若然有關戶口內的美元都屬於劉波，他於2001 年1 月至11 月期間為何不動用自己的儲蓄反而要多次向馬鞍山明星及昆山明星借款數百至數千元人民幣呢？劉波說，他身為內地人士是不能隨意到港的。不過，證據顯示，劉波曾於2001 年12 月3 日前和2002 年1 月5 日兩度在無有效港澳通行證的情況下藉著在深圳參加旅行團於短時間內進入香港。因此，本席認為若劉波想到香港走一趟，他絕對有方法在短時間內辦到。

75. 本席觀察到劉波在不同情況下對自己的案情都有明顯不同的演繹。第一個版本出現於他向香港警方錄取的會面記錄內。這份會面紀錄的自願性不受爭議。當時警方表明來意是調查劉先鋒聲稱被盜130 萬美元事宜。劉波花了很多時間和篇幅忙著去解釋為何有關的130 萬美元是屬於他。不過，他就從來沒有向警方指出其實戶口內的整整250 萬美元都是他從售賣伺服器給三叔賺回來的。第二個版本出現於他給劉先鋒的道歉信的。本席留意到信上的書寫時間。當時劉波的確在國內被拘留中。可是，觀乎劉波於審訊時的整體表現，本席對他的誠信存極大疑問。本席不相信他當時在威逼利誘的情況下抄寫那封信。再者，有鑑於劉波的案情犯駁之處甚多，本席認為即使法庭相信那封道歉信是劉波被逼抄寫，而不信納它為本案可信之證據，亦不影響本席對這案件的裁決。

76. 除了以上提及的兩份文件，劉波在致香港高等法院的函件，為禁制令聆訊而準備的誓章及後來的答辯書中對事情發生始末都有敍述。每一次的敍述跟他先前的說法都或多或少有出入。最後，劉波走上證人台講出最新的案情：戶口內的250 萬美元都是他向三叔售賣自己設計的伺服器所賺回來的。若這說法反映事實，劉波被香港警方查問時何不直截了當將此和盤托出？劉波聲稱當時他思緒混亂，加上與警員、在場傳譯員似乎言語溝通上有障礙，所以無法好好表達自己。本席對他這樣的解釋並不相信。此外，劉波於庭上作供時亦為自己的案情加添了新情節。例如，他聲稱自己與三叔簽約前曾向後者提供42 台試驗性質的伺服器以供King Star Computer Inc. 作宣傳之用；他亦聲稱後來改用較輕的鋁合金代替鍍鋅板作為伺服器機箱的材料。聽過劉波的證供，本席感覺他在見招拆招，不斷改變自己的說法試圖去創作一個他自覺更合理的案情。

結論

77. 基於以上原因，本席認為第一被告人的案情不可信。由於雙方同意第一原告人為有關款項的來源而第一被告人又未能在答辯中成立款項成為了他的財產，本席裁定原告人得直。

命令

78. 劉波香港私人戶口及Easy Super香港戶口內的存款屬於第一、第二原告人。

79. 第一、第二被告人需要將有關戶口內的存款全數歸還第一、第二原告人。

80. 第一、第二被告人需要支付利息，由傳訊令狀發票日起計至宣判當日為止。年息8 厘。宣判日以後的利息以判決利率計算，直至被告人付清款項為止。

81. 第一被告人的反申索被撤銷。

82. 第一被告人需要支付原告人的訟費。如果雙方不能就訟費達成協議，金額將由聆案官釐定。

83. 對劉波兩個渣打銀行戶口下第三債務人命令：14 日內如第一被告人無任何申請或抗辯，這命令便成為永久性的第三債務人命令。

84. 第一被告人被永久禁制動用上述有關戶口。

HCA5474/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.5474 OF 2001

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R U L I N G

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1. It has been said in Ostrich Farming Corporation Ltd v. Brian Phillip Ketchell et al [1997] EW CA Civ 2953 that the decision I have to make is a difficult decision.  Difficult as it is, I must make a decision today and on the basis of all the evidence I have heard so far and now put before me.

2. The easier decision in respect of the living expenses is just a minimal sum of $23,800.  I said minimal because I am comparing that with the size of the money now in the bank, in the sum of about US$2.5 million.

3. Whilst I do not encourage the defendant (and their lawyers who have drafted his affirmation) under oath, saying one thing and then I was informed in fact that certain parts of his affirmation is not quite correct. I have to deal with his situation now : i.e. he was actually not gainfully employed since September 2005.  He got a job but I was told just now he actually has not received any salary yet.  I do not quite understand why that is so.  It was said that he had to prepare his defence in this case.  But he came to Hong Kong only shortly before the trial and if he was in Singapore all the time since September, why he was not working since September, in October and for the better part of November.  I was also told that his family was in Singapore.  I was not told when and if they have started to live in Singapore since September where their living expenses come from.  All these were quite unknown to me.

4. The affirmation gives me the impression that he has been receiving a salary for September, October, and the better part of November.  But of course if he has a family there and he only has S$5,000 to live on for months for a family of three, then it would not be surprising now he only got HK$3,000 with him in Hong Kong, not to mention how much money his wife has at the moment for the purpose of her and their child’s living before he is gainfully employed.  It is not disclosed to me whether his wife is working at all.  But $23,800 is not a large sum of money and he needs the money to survive until the end of the trial, so I allow the applicant to withdraw $23,800 from the bank accounts under dispute.

5. The difficult decision as stated in Ostrich Farming is that the plaintiff is claiming proprietary rights over the money in those accounts.  In short, the plaintiff is saying that “this is my money” and in the case cited as decided by the English Court of Appeal, Lord Justice Roch said that there are two stages, one of course is whether he has no other funds to pay for his legal expenses and two, whether the court should exercise its discretion in favour of the defendant.  It has been said in respect of the second stage that the power in the court is a discretionary power.  The court in deciding whether to exercise that power, must weigh the potential injustice in the plaintiff for permitting the funds which may turn out to be the plaintiff’s property to be diminished so that the defendant can be legally represented, against the possible injustice to the defendant of depriving him of the opportunity of having the assistance of professional lawyers in advancing what may, at the end of the day, turn out to be a successful defence.

6. In order to perform this process, it has been said that it required a “careful and anxious judgment”, and the judge must have evidence so that he can consider all the relevant circumstances, so that he can weigh the relative strength of the plaintiffs’ claims to the property in the funds held by the defendant and the defendant’s defence to that claim.  In the Ostrich Farming case, the English Court of Appeal decided that the judge did not have that required evidence for either stage and therefore they allowed the appeal and disallowed the defendants’ application.

7. In the case before me, of course, I have the benefit of having heard evidence to the stage when the one and only one witness for the defence, the 1^st defendant himself has given evidence-in-chief.

8. Now I want to deal with the first hurdle first.  There is no other funds from which the 1^st defendant Liu Bo can derive $600,000 he required for his legal fees.  The only thing he has is the agreement with the solicitors, and that is his solicitors have graciously, gratuitously and charitably agreed with his client that his client would pay him $20,000 a day until the end of the case and the counsel fee.  If after the case is over, he could not pay those fee within three months thereafter, that would become a debt liability and the liability would attract an interest of 5% per annum.

9. Mr Chain for the plaintiffs submitted strongly that if that is the arrangement, then the court should just allow that arrangement to go on.  He was not in need of any fund.  But to my mind, I do not think this court should rely on the charitable attitude of a firm of solicitors who has bravely agreed to conduct the case for a foreigner so that he could be legally represented in this court in this jurisdiction, in order to ensure that he would get the best possible result through the due process of the law.

10. If I just rely on this agreement because of the charitable attitude of this firm of solicitors, then this will discourage solicitors from taking up cases on liability basis only.  There are solicitors who would not move a finger without costs on account, but there are solicitors who would exercise their discretion on case-to-case basis in order to assist poor litigants and for that kind of charitable attitude, to my mind, it should be encouraged rather than discouraged.

11. Solicitors would be liable to pay counsel fee even though he has no costs on account.  It is not an answer to counsel to say “it’s too bad, I haven’t got costs on account, I can’t pay you”.  Once the brief is marked then counsel is entitled to be paid, and this firm of solicitors have so charitably agreed to represent Liu Bo on that basis.  In other words, they would have to pay counsel fees themselves out of their own pocket first and wait for three months after the case is over and sue Liu Bo for the outstanding amount together with interest if their fees and expenses are not paid.

12. Therefore, in respect of the first hurdle, I would not say that Liu Bo has fund to turn to because of this agreement with solicitors.

13. The second hurdle is the merit of the case.  Obviously, I am in a much better position than the judge in the Ostrich Farming case.  Evidence has been given by the plaintiff, evidence-in-chief has been given by the only defence witness and of course there may be a rebuttal evidence from Prof. Cheung.

14. My difficulty at this stage is on the assessment of the merit of the defence.  I really have to see how the 1^st defendant would fare under cross-examination.  I cannot, at this stage, say he has no merit in his defence at all.  I cannot prejudge at this stage without the cross-examination, and I cannot prejudge the case without hearing the final submissions.  Of course, if I have the chance of hearing the cross-examination, I will be in a much better position to assess the merit of the defence case.  But my duty here is to make an assessment, rightly or wrong of course just on the tentative basis, I say “tentative” because counsel have not made their closing speeches and if cases could be decided after hearing evidence, of course then there is no need to hear counsel submissions.  My task, however is just a preliminary assessment on the available evidence.

15. All in all, I would not say the defence has no merit on his defence, and therefore, at this stage, I would consider that he is entitled to this application in respect of the legal costs incurred and to be incurred until 13 January 2006.  Obviously, this is just an assessment of the evidence so far, it is not prejudging the case, it is not even an assessment which would not be changed at the end of the day.

16. For those reasons I have given, I allow the application and therefore vary the injunction order by providing that the injunction previously re-granted by Fung DJ dated 24 October 2005 does not prohibit the 1^st defendant from withdrawing from those accounts in Hang Seng Bank maintained by him up to a total of $623,800 towards his living expenses in Hong Kong and legal advice and representation expenses according to schedule A and B annexed thereto.

17. I think costs should be in the cause because it has something to do with the merit of the case.

HCA5474/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.5474 OF 2001

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D E C I S I O N

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1.  I will allow the insertion of the proposed undertaking for the following reasons:  It is in similar terms of the undertaking given by the 1st defendant in dealing with similar expenses in the order of Mr Recorder Wong dated 17 May 2004.  These expenses are allowed for a specific purpose: for travelling to and for living expenses in Hong Kong and, more importantly, for retaining mainland lawyers.  As a matter of principle, it is in the same vein as the order of Mr Recorder Wong.  That the amount is now smaller does not alter the principle.

2.  As a matter of practice, I cannot see the impossibility of the solicitor for the 1st defendant to honour the undertaking because they are for the specific purposes.  With those incidents coming up, such as travelling to Hong Kong, staying in Hong Kong, and the engagement of a lawyer in mainland, then the sums can be released.  This view is fortified by the lack of difficulty in the honouring the undertaking given before.

3.  The only other matter is that the plaintiff did not add this undertaking in the original draft served on the solicitor for the 1st defendant whereby the original draft was already agreed.  Be that as it may, I think it would only affect costs of the present application, and not the substance of the matter.

4.  Hence, I will allow the insertion of the undertaking.  I propose to make no order as to costs on the present hearing, subject to whatever parties have to say further.

(Court discussion re costs)

5.  I make no order as to costs for today’s hearing.

HCA5474/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.5474 OF 2001

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D E C I S I O N

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1.  There are two applications before me today following on my decision on 8 March 2005 in discharging the Mareva Injunction and ordering a re-grant on terms. 

2.  The first application relates to the terms of the order. Fortunately the parties have agreed to that and I need not deal with it now, save that the draft consent order will be submitted for approval in due course.

3.  The second is the argument on the costs nisi.  I have made an order nisi that the 1st and 2nd plaintiff pay the costs of the application to set aside the Mareva Injunction.  Mr Kwong for the defendants said that order nisi should be made absolute. 

4.  On the other hand, Mr Chain for the plaintiffs argued that the order nisi should be varied to the extent that the costs should be paid in any event and not forthwith.  Mr Chain referred to the fact that the plaintiff had obtained a re-grant of the Mareva Injunction enjoining funds now standing in the accounts of the defendant, and the 1st defendant had filed an affidavit that he was of no means whereby he obtained from the court an order for legal expenses up to the trial of this matter to be paid out of the enjoined funds.  Mr Chain submitted that in the event that the plaintiffs were to succeed and the defendant were to lose, in theory, the defendant would have to reimburse the legal expenses which they have spent out of the funds enjoined.  But in practice, because of the stated impecuniosity of the defendant, it would most likely be that the plaintiff would take no further action on the matter.  So if the costs order were to be taxed forthwith instead of in any event and being available for set-off against each other, the plaintiffs would be in double jeopardy in the sense that they would have to pay now and not recover later. 

5.  In reply, Mr Kwong submitted that the discharge was brought about by blunders made by the plaintiffs, and they should bear the consequence of having to pay the costs forthwith. 

6.  I have looked into the facts, albeit at a prima facie level.  Suffice it to say that granted there were material non-disclosure on the part of the plaintiffs which led to the Mareva Injunction obtained being discharged, I saw fit that justice required that it should be re-granted on terms.  The defendants are so to speak obtaining legal expenses “on credit” in the event they were to lose.  The “debit” side should be treated pari passu.  In such circumstances, I accede to the argument of Mr Chain.  I make an order that the costs be paid by the 1st and 2nd plaintiffs in any event.

HCA5474/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.5474 OF 2001

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D E C I S I O N

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1. There are two summonses before me :

(1)	The 1st defendant’s amended summons dated 16 September 2004 :
	(a)	to set aside the Mareva injunction granted ex parte by Deputy Judge Muttrie on 21 December 2001;
	(b)	alternatively, to vary the Mareva injunction to provide for legal and living expenses for the 1st defendant; and
	(c)	for security of costs against the 1st and 2nd plaintiffs.
(2)	The 1st defendant’s summons dated 21 February 2005 that unless the 1st plaintiff do file the official record from the Higher People’s Court of Anhui Province (“Anhui Court”) showing that the action “(2004) 皖民一初字第三号” (i.e. (2004) Anhui Civil First Instance No. 3) (“Anhui Proceedings”) has been finally discontinued or withdrawn by the 1st plaintiff, the Mareva injunction be set aside.

Background

2. The 1^st and 2^nd plaintiffs asserts a proprietary claim against the 1^st defendant as trustee for US$2,579,310 remitted by the 1^st plaintiff into the 1^st defendant’s bank accounts.  The major account was in the sole name of the 1^st defendant and the 1^st plaintiff was made an authorized signatory upon the opening of the account.  The 1^st plaintiff alleged that he believed the account was a joint account.  The Mareva injunction was taken out shortly after the signing authorization of the 1^st plaintiff was cancelled by the 1^st defendant.

3. The 2^nd plaintiff was incorporated in the United States and is beneficially owned by the 1^st plaintiff.  As at the application for the Mareva injunction, the action was constituted as the 1^st plaintiff trading as the 2^nd plaintiff.  The title of the action was amended on 18 May 2004.

4. The 1^st defendant asserts beneficial ownership of the funds in the accounts as profits for computer servers sold by him pursuant to contract with the 1^st plaintiff.  He also counterclaimed US$400,000 withdrawn by the 1^st plaintiff from his account, and for share of profits on the computer servers sold by the 1^st plaintiff.

5. The Mareva injunction has frozen about HK$19 million.  The inter partes return date has been successively adjourned by consent.  The injunction has been varied twice, before Chu J on 12 April 2002 and Mr Recorder Wong SC on 17 May 2004, for legal and living expenses for the 1^st defendant.

6. On 5 January 2002, the 1^st defendant was arrested by the Hong Kong Police for alleged misappropriation of the said funds.  He was remanded in custody for trial in the District Court, but on 23 August 2002, the Department of Justice withdrew the charge against the 1^st defendant, apparently on inconsistencies in the 1^st plaintiff’s statements.

7. The trial date is fixed to be on 28 November 2005 with 10 days reserved.  What led to the renewed efforts to set aside the injunction are two recent developments.

8. First, notwithstanding an undertaking in the Mareva injunction that the 1^st plaintiff “will not without the leave of the court begin proceedings against the 1^st defendant in any other jurisdiction”, on 12 September 2004 the 1^st plaintiff commenced the Anhui Proceedings over the same subject matter and on 20 December 2004, the Anhui Court issued a Notice to Answer to the Proceedings requiring the 1^st defendant to file a defence before 31 January 2004, and a summons requiring the 1^st defendant to attend court on 17 February 2005.

9. On 1 February 2005, I granted an order that the 1^st plaintiff do discontinue or withdraw the Anhui Proceedings.  At that stage, the former solicitor for the 1^st and 2^nd plaintiffs had no instruction to oppose the 1^st application’s application.

10. Secondly, the 1^st defendant discovered that the affirmation of the 1^st plaintiff in support of the application for the Mareva injunction contained untruths relating to his property ownership.  The 1^st plaintiff affirmed that he resided in Reamwood Avenue, Sunnyvale, California (“Reamwood Property”), and he owned the property free from mortgage, and the property was worth US$1 million.  In fact, the 1^st plaintiff only rented the Reamwood Property as a shop.

Grounds for setting aside

11. The grounds of Mr Kwong for the 1^st defendant for setting aside the Mareva injunction can be summarized as follows :

(1)	breach of undertaking in commencing the Anhui Proceedings;
(2)	false disclosure of ownership of the Reamwood Property;
(3)	non-disclosure of the 1st plaintiff’s previous banking dealings with the 1st defendant;
(4)	non-disclosure of the 2nd plaintiff’s financial position by producing only unaudited accounts;
(5)	failure to disclose the academic qualification of the 1st plaintiff notwithstanding the 1st defendant’s challenge that he had none;
(6)	failure to disclose two sales contracts requested by the 1st defendant; and
(7)	failure to disclose evidence of events leading to the cancellation of the signing authorization of the 1st plaintiff in the original affirmation.

Legal principles

12. I find the following legal principles relevant to the consideration to the setting aside of the Mareva injunction.

13. It is trite law that an applicant for an ex parte injunction has the duty to make full and frank disclosure of all material facts known to him.  The court in exercise of the ex parte jurisdiction will be in an invidious position if it cannot rely on the applicant and/or its lawyers to do so.

14. In Citibank N.A. v. Express Ship Management Services Ltd & anor [1987] HKLR 1184, 1190, Fuad JA (as he then was) stated :

“

The cases show what are to be regarded as material facts in this context: ‘all facts that are relevant to the weighing operation which the court has to make in deciding whether or not to grant the order’: per Browne-Wilkinson J (as he then was) in Thermax v. Schott Industrial Glass [1981] FSR 289, 298.  His test has been applied in several cases.  I find the decision of Goulding J in Wardle Fabrics Ltd. v. G. Myristis Ltd. [1984] FSR 263 to be particular helpful in that case the judge emphasized the correct test is not simply whether, if the non-disclosure had not occurred, the ex parte judge would, nevertheless, have made the order, but whether the facts not disclosed, being relevant, should have been in the scales.”

15. In Fitzgerald v. Williams [1996] QB 657, 667-8, Sir Thomas Bingham MR (as he then was) stated that :

“

In seeking ex parte relief an applicant must disclose to the judge any fact known to him which might affect the judge’s decision whether to grant relief or what relief to grant.  It is no answer for an applicant who falls down on his duty to show that his breach of duty was committed in good faith and inadvertently, or to show that the relief would have been granted even had he complied with his duty.  The courts have traditionally insisted on strict compliance with this rule, as affording essential protection to an absent defendant, and as applications for ex parte relief have multiplied so the importance of complying with this duty has grown.  The law does not however require a judge to whom an application for discharge is made to grant the relief on proof that there was material which should have been but had not been disclosed to the original judge.  The later judge has then to exercise his own judgment whether, in all the circumstances, the interests of justice are best served by discharging, or maintaining, or varying the original order.  In making this judgment he will have regard to the importance of securing compliance with the fundamental principle, but he will have regard also to the significance in the context of the particular case of the facts which had not been disclosed when they should have been.”

16. As to the financial position of the applicant, in Nam Wah Holdings Co. Ltd & ors v. Excel Nobel Development & ors [2000] 3 HKC 118, 128-9, Ribeiro J (as he then was) said :

“

… if a plaintiff’s financial position is such that, viewed fairly, it may be said to raise realistic doubts as to the plaintiff’s ability to honour the cross-undertaking, it becomes incumbent upon the plaintiff to make full and frank disclosure of his financial position to the ex parte judge so as to permit the judge to determine for himself the correct order to make in the light of such disclosures.  The judge in such cases have various options.  He may consider it proper to refuse the injunction altogether.  Or, he may decide to require some degree of fortification of the cross-undertaking as a condition for the grant of the injunction.  Alternatively, he may simple decide to grant the injunction against the cross-undertaking notwithstanding the risk that it may not be honoured or fully honoured if called upon.  It is however crucial that all relevant material be placed before the judge so that he can make the decision for himself : Lock International plc v. Beswick [1989] 1 WLR 1268 at 1279C.”

17. In Dormeuil Frères S.A. v. Nicolian Ltd [1988] 1 WLR 1362, Sir Nicolas Browne-Wilkinson VC (as he then was) stated there is no absolute right to have an ex parte order has been obtained without due disclosure set aside; there is a discretion in the court whether to do so or not.  The real question at the time of the inter partes hearing should not be what has happened in the past but what should happen in the future.  The court has to consider the substantial merits of the case or the balance of convenience.

Consideration

18. It is necessary to consider the seriousness of any non-disclosure and breach of undertaking against the substantial merits of the case and the balance of convenience.

19. It is not in dispute that the funds in the accounts were remitted by the 1^st plaintiff to the 1^st defendant.  It is also not in dispute that the 1^st plaintiff has had signing authorization over the 1^st defendant’s account.  The 1^st plaintiff said the funds were to serve as assets proof for his application to emigrate to Canada, and also for purchase of goods by the 1^st defendant in Hong Kong for him.

20. Mr Chain for the 1^st and 2^nd plaintiffs pointed out that there are serious discrepancies as to the 1^st defendant’s explanation on the funds in his bank accounts.  In his 1^st Affirmation dated 23 December 2002, the 1^st defendant said he had designed a computer server and the unit costs were about US$120,000 to US$140,000, and the profits were US$60,000 to US$80,000.  He sold 15 sets at US$200,000 each to the 1^st plaintiff and received US$3 million or about HK$23 million as purchase price.  He made the first set and used the profit from it to make the second one and so on.  The 1^st plaintiff was authorized to operate the account in order to withdraw funds to purchase the parts.  Mr Chain pointed out the inherent improbabilities that the 1^st plaintiff would be paying for the parts and yet the 1^st defendant would still receive the full purchase price without deduction. 

21. In his witness statement dated 31 December 2003, 1^st defendant changed his version that the funds were profits of selling 30 sets to the 1^st plaintiff.  He did not have to pay for the costs as the 1^st plaintiff had paid the suppliers.

22. Mr Chain pointed out that the funds were remitted in eight tranches between 30 May 2001 and 26 September 2001.  According to the 1^st defendant, the production of the 30 sets ran from January to August 2001.  If so, from January to May 2001, there was no inflow of cash to fund the production.  The 1^st defendant had to abandon ship the earlier version that he used the profits from the first set to produce the second and so on.  Mr Chain also asked rhetorically that if the funds were profits to the 1^st defendant, then why surprising they were sitting in the accounts?

23. There is no documents relating to any production except two invoices to a shanghai factory for cardboard boxes and 400 computer cases, etc.  The 1^st defendant explained that all the relevant documents were taken away by the 1^st plaintiff.

24. Mr Kwong submitted that the 1^st defendant might have made innocent mistakes about whether there were 15 sets or 30 sets delivered.  The 1^st plaintiff did assert that the funds were partly for the 1^st defendant to buy goods.  As the default judgment has been set aside, it goes without saying that the defence is not slender or tenuous.

25. At the interlocutory stage, I can at best view the respective cases ex prima facie.  I note that admittedly substantial funds were remitted by the 1^st plaintiff to the 1^st defendant and the most part had been sitting in the accounts.  The 1^st plaintiff had had signing authorization, but it was suddenly cancelled.  The truth can only be found out at the trial.  Mr Kwong conceded that practically speaking, if the Mareva injunction were lifted, one might very well not see the trial at all.

26. I now consider the breach of undertaking.  Mr Chain accepted that the commencement of the Anhui Proceedings was a breach and there was no justification.  The 1^st plaintiff explained that he was not fully advised as to the effect of the undertaking.  Mr Chain offered on behalf of the 1^st plaintiff an undertaking not to restore the Anhui Proceedings without the leave of the court.

27. The 1^st plaintiff affirmed that he never gave instructions to restore the Anhui Proceedings in December 2004.  His solicitor Mr Cheong produced a Civil Adjudication dated 4 November 2004 by the Anhui Court that the Anhui Proceedings has been stayed pending the conclusion of the proceedings herein.  Mr Cheong also stated that according to Mr Chui, the 1^st plaintiff’s lawyer in the Mainland, the summons on the 1^st defendant to appear was supposed to have been issued before the stay, but not yet served because the 1^st defendant had disappeared for months, and when the 1^st defendant unexpectedly sent an agent to the Anhui Court to collect the documents, the summons was given to the agent notwithstanding the stay.  The hearing on 17 February 2004 has been vacated.

28. Mr Kwong queried the worth of any further undertaking in that notwithstanding the stay in November 2004, the 1^st defendant was still summoned subsequently in December 2004.  Mr Kwong pointed out that on 24 September 2002, default judgement was entered against the 1^st defendant, and subsequently set aside by the master on 13 February 2003.  He surmised the 1^st plaintiff must have restored the Anhui Proceedings on the strength of the default judgment without disclosing the fact that it had been set aside.  Mr Kwong said the 1^st defendant would be placed in grave prejudice as under the Chinese Civil Procedural Code, a party who disobeys a court summons twice without justification is liable to arrest, and there is nothing this court could do to relieve the 1^st defendant if the Anhui Proceedings were restored once again.

29. I think Mr Kwong’s fear may be allayed thus.  Granted that the 1^st defendant has not attended the Anhui Court last month and there does not seem to be any prejudice to him shown.  As Mr Chain submitted, the Civil Adjudication dated 4 November 2004 ordering the stay is valid and subsisting, and that is the best defence to any charge of not entering an appearance or filing a defence.  Further, if the 1^st plaintiff is to breach the undertaking again, he could hardly expect any sympathy from the court here.

30. As to the various complaints on false and non-disclosure, Mr Chain submitted that unlike the breach of undertaking, they are not matters arisen recently or matters which the 1^st defendant could not have found out earlier.  The 1^st defendant has consented to the continuation of the Mareva injunction, and sought two variations for the release of funds.  The 1^st defendant could have raised the complaints in order to set aside the injunction on those two previous occasions.  Mr Chain referred to Chanel Ltd v. Woolworth & Co. Ltd [1981] 1 WLR 485, 492 where Buckley LJ said that “(e)ven in interlocutory matters a party cannot fight over a battle which has already been fought unless there has been some significant change in circumstances, or the party has become aware of facts which he could not reasonably have known, or found out, in time for the first encounter.”

31. But for the breach of the undertaking, I might have agreed with Mr Chain.  Now there is an admitted breach, I can see why Mr Kwong is bringing the complaints for the court to consider the matter in its entirety.

32. Mr Chain submitted that the in light of the substantial merits and balance of convenience, and without prejudice to his stance that the Mareva injunction should be continued, even if the injunction were to be discharged, a re-grant was almost certain, and Mr Kwong’s application amounted to no more than satellite litigation with the only result of incurring unnecessary costs.  Mr Kwong replied that the false and/or non-disclosure serve to demonstrate that the 1^st plaintiff is not worthy of the undertaking given.  Even if the court were to re-grant the injunction, it should be on terms such as fortification.

33. As the court is exercising the discretion with fine balance between seriousness of the breach of undertaking and non-disclosure against the substantial merits and convenience, I shall consider Mr Kwong’s other grounds even if it could have been made earlier.

34. On the false disclosure of the Reamwood Property, the 1^st plaintiff has now affirmed that he jointly owns with his family members two properties in California : Knikerbocker Avenue, Sunnyvale purchased in August 1990 and Arques Avenue, Sunnyvale purchased in July 1999.  The values were about US$440,000 and US$742,000 and he owns 1/2 and 1/3 respectively.  They were both subject to mortgage at the time of the Mareva injunction.  Mr Chain submitted the mistake was an honest one and there was no realistic doubt as to the 1^st plaintiff's financial soundness.  With respect, as pointed out in the authorities, it is of utmost importance that the applicant make full and frank disclosure such that the court is apprised of the accurate position.  It is also the duty of the lawyer in whom the court will inevitably place reliance in an ex parte application to see to it that the information disclosed is accurate.  I fail to see how the 1^st plaintiff could have said any property he owned was free from mortgage when his two properties were subject to mortgage, let alone the shop rented was the residence he owned.  At the very least, the 1^st plaintiff and those acting for him have been very careless.  I view this breach very seriously.

35. As to the non-disclosure of previous banking dealings with the 1^st defendant, the 1^st plaintiff’s case was that in May 2001, he went for the first time with the 1^st defendant to the bank to open the account with signing authorization.  He was ignorant of the banking practice and believed that the account was a joint account.  Mr Kwong pointed out that bank record showed that in fact in March 2001, the 1^st defendant had opened at the same branch a sole name account with the 1^st plaintiff as an authorized signatory.  This undermined the 1^st plaintiff’s allegation that he went to the bank for the first time in May and was ignorant of banking procedures.

36. Mr Chain pointed out that the account opened in March 2001 was disclosed in the affirmation as one of the several accounts opened by the 1^st defendant in or about May.  There is no deliberate non-disclosure.  Further, as the 1^st plaintiff was only an authorized signatory in the March account as opposed of it being a joint account, that is consistent with his case that he mistook an authorized signatory as a joint account holder. 

37. As to the unaudited accounts, Mr Chain submitted that under United States law, private companies are not required to have the accounts audited, and at any rate, the unaudited accounts were prepared by professional accountants.  As to the point that the 1^st plaintiff had affirmed the worth of the 2^nd plaintiff in 2001 was around US$7 million, whereas taking into account the liabilities of US$2 million, the net asset value was only about US$5 million, Mr Chain submitted that the liabilities were disclosed in the 2001 accounts and there was no deliberate attempt to overstate the financial position.  As to the point that the 2004 unaudited accounts show the net worth of the 2^nd plaintiff has fallen to just under US$1 million, Mr Chain submitted that was a separate matter for the consideration of fortification of the undertaking as to damages.

38. Mr Chain submitted that the existence of the two sales contracts is disputed, and they cannot be the subject of any complaint of non-disclosure.  And the 1^st plaintiff’s academic qualification falls into the same category.

39. As to events leading to the cancellation of the signing right, the 1^st plaintiff said he discovered the cancellation through account enquiry.  In fact, he presented three cheques allegedly signed by the 1^st defendant and was informed of the cancellation when the cheques were countermanded.  The 1^st defendant alleged those cheques were forged.  Mr Kwong submitted that the omission of the details showed the 1^st plaintiff was conscious of guilt.  On the other hand, Mr Chain submitted that the 1^st plaintiff still had the signing right then and there was no need for forgery. 

40. For the present consideration, dispute as to evidence must defer to the substantial merits of the case ex prima facie.  Having considered all the matters, I am of the view that the false disclosure as to the Reamwood Property is of such seriousness that the Mareva injunction should be discharged.  However, whatever misgivings there might be about the 1^st defendant have not caused me to completely overlook the substantial merits and balance of convenience, and I am prepared to re-grant the injunction on terms.

41. The sum enjoined of HK$19 million is very substantial, and the assets of both the 1^st and 2^nd plaintiffs have decreased substantially from about US$6 million in 2001 to around US$1.5 million now.  Lurking behind the strength of the prima facie case must be the inevitable attack on the 1^st plaintiff’s credibility at trial on matters arising herein.  I find that fortification of the undertaking as to damages is necessary, and it should be in the sum of HK$2 million.

42. Mr Chain referred to Marc Rich & Co. Holding Gmbh v. Alex Krasner & ors [1999] EWCA Civ 581 where the English Court of Appeal affirmed the judge’s decision to continue the injunction notwithstanding he had found serious non-disclosure and lack of objectivity in the plaintiff’s presentation.  Mr Chain submitted that I should continue the injunction rather than to re-grant it upon discharge.  I have said that the discretion is a fine balancing exercise, and every case depends on its individual circumstances.

Variation

43. The 1^st defendant has been allowed living expenses of HK$5,000 per month and legal expenses of HK$790,000 for the trial.

44. Mr Kwong sought further variation as follows :

(1)	living expenses to be increased to HK$13,000 per month for the 1st defendant to come to live in Hong Kong from Shanghai;
(2)	alternatively, living expenses for three weeks in Hong Kong for the duration of the trial and one week beforehand, and expenses for three trips to Hong Kong for the purpose of giving instructions;
(3)	disbursement for handwriting expert at HK$80,000; and
(4)	legal fees for retaining lawyer in the Mainland to make enquiries into and to deal with the Anhui Proceedings generally.

45. Mr Kwong has abandoned the request for representation by Senior Counsel at trial and for an expert on computer.

46. Mr Chain referred to Ostrich Farming Corporation Ltd v. Brian Phillip Ketchell & anor [1997] EWCA Civ 2953 for the two staged approach in dealing with release of funds for legal and other expenses.  After referring to Fitzgerald v. Williams [1996] 2 All ER 171 per Sir Thomas Bingham MR, Millet LJ (as he then was) said at page 5 of 7 :

“	Sir Thomas Bingham was there laying down the rule that proper evidence must be submitted to establish that the defendant has no other funds beyond those to which the plaintiff lays a proprietary claim which are available to him for the payment of his legal fees and other legitimate expenses.  But he was not saying that this was sufficient.  It was only the first step.
	It cannot be sufficient for a defendant to establish that he has no other funds with which to conduct his own defence.  For even if that be so, he must in addition show that there is an arguable case for his having recourse to the funds in question.  If he cannot show an arguable claim in his part to the funds, he has no right to use the money.”

47. Mr Chain submitted that the 1^st defendant has failed to disclose his means in engaging two counsel in the application before Mr Recorder Wong SC, and also for counsel in the present application.  Mr Kwong replied that the 1^st defendant has affirmed that apart from the enjoined funds and some petty cash, the 1^st defendant has no other assets, and he was given to understand that the legal fees incurred had not been settled.  As such, I am prepared to proceed to consider whether further variation is justified.

48. As to coming to live Hong Kong, the 1^st defendant has not filed any evidence on his right to stay.  Hence, I shall not entertain such application.  The alternative application for the three weeks stay for the preparation and actual duration of the trial is reasonable and is granted.

49. As to the visits to give instructions, the 1^st defendants has previously been allowed HK$10,000 for two trips.  Those trips have been used up for the present application.  As the Mareva injunction is discharged, I shall allow two trips in lieu.

50. As to the handwriting expert, at the directions hearing on 21 July 2004, the master ordered that the parties should make application for leave to adduce expert evidence within 28 days.  No application has ever been made.  Mr Chain submitted that leave to adduce expert evidence now will jeopardize the trial date fixed.  One may add that likewise the estimated length of trial.  Also having considered the significance of the three impugned in relation to the broad issues of the case, the application for funds for the handwriting expert is refused.

51. On legal expenses in relation to the Anhui Proceedings, as those proceedings are brought by the 1^st plaintiff in breach of the undertaking, the unnecessary expenses are of the 1^st plaintiff’s making.  I shall allow HK$10,000 as a reasonable sum to deal with the matter.

Security for costs

52. Mr Chain agreed that both the 1^st and 2^nd plaintiffs are ordinarily resident out of the jurisdiction.  The question is one of quantum.

53. HK$790,000 have been allowed as legal expenses for the trial.  The 1^st defendant claimed that about HK$1.8 million had been incurred prior to the second application for variation, but such had been disallowed by Mr Recorder Wong SC.  Doing the best I can in considering all the circumstances including the relative merits, I shall set a ballpark figure of HK$350,000.

Conclusion

54. I shall discharge the Mareva injunction and re-grant it on terms of fortification of undertaking as to damages to the extent of HK$2 million.  Variation to release legal and living expenses is allowed to the limited extent indicated above.  The 1^st and 2^nd plaintiff shall give security for costs to the extent of HK$350,000.  I shall hear parties as to the form of the order if agreement cannot be reached.

Costs

55. I shall make an order nisi that the 1^st and 2^nd plaintiffs do pay the costs of the application to set aside the Mareva injunction by reason of the discharge and re-grant with fortification.  This order nisi covers both summonses relating to the same subject matter.  As Mr Kwong had not strenuously argued against the re-grant, and the time taken up was insubstantial, the costs on the re-grant could be subsumed in the costs of the discharge.

56. As to variation, as each party has been partially successful, I shall make no order as to costs.

57. As to security for costs, as Mr Chain had not strenuously argued against the application, the time taken up was insubstantial, I shall make no order as to costs.

Mr Benjamin Chain and Miss Anita Ma, instructed by Messrs S.K. Wong & Lee, for the 1^st and 2^nd Plaintiffs

Mr Jimmy Wong, instructed by Messrs Paul Kwong & Co., for the 1^st Defendant