QUESTNET LTD v. KURT GEORG ROCCO RINCK AND ANOTHER

CACV 71/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 71 OF 2008

(ON APPEAL FROM HCA NO. 1475 OF 2006)

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J U D G M E N T

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Hon Rogers VP:

1.  This is an appeal from a decision of Chu J given on 22 February 2008.  It concerned a summons which had been taken out before the master on 13 November 2007 to discharge a prohibition order which had been made against the 2nd Defendant.  Because matters had moved on by then, the judge treated the application as an application to discharge the order which had been made on 7 December, which is the one which was then in effect.

2.  On this appeal, the major point taken by the 2nd Defendant has been that the court should go back and consider the order which had been originally made on 17 August 2006.  That was an order that was made with a view to the 2nd Defendant being joined into an action which had been brought against the 1st Defendant.  The action, briefly, concerns trust money which the Plaintiff alleges that the 1st Defendant has misused and, indeed, part of it passed to the 2nd Defendant and the 2nd Defendant is said to have misused that money and indeed acted in breach of an order.

3.  As a result, this case has dragged on.  There has already been one contempt proceedings, as a result of which, this Court was informed that the 2nd Defendant has served a period in prison as a result of being found in contempt.  There is another contempt proceedings for a separate contempt, the first hearing of which is due to take place on the 18th of this month.

4.  There has also been an examination of the 2nd Defendant because default judgment has been entered against him.  This Court was informed that, today, the fourth hearing of that, following the third adjournment part-heard of that examination proceedings, is due to take place.  That is somewhat dependent upon bank statements in respect of a company called Landbase Corporation being forthcoming from the Middle East.  That is something which the 2nd Defendant has been required to produce.

5.  Suffice it to say, on this appeal, the main ground of this appeal that this Court should go back to the order of 17 August 2006, which was made at the commencement of this action, seems to me to be flawed because a judgment in default was entered on 4 September 2007 and that judgment, subject to an appeal which we understand is coming up, has remained in force.  The Plaintiff clearly has valid grounds for seeking an order that the 2nd Defendant should remain in Hong Kong whilst the contempt proceedings and the examination remain on foot.

6.  Not only have these proceedings been somewhat protracted in Hong Kong, but we understand proceedings have also been taken in New Zealand from where the 2nd Defendant comes and where his family resides.  An attempt was made to make the 2nd Defendant bankrupt in New Zealand and, apparently, that attempt has recently failed, but there are other proceedings which are continuing there.  Whatever else emerges from the case, it does emerge that whatever assets the 2nd Defendant has, they are probably in New Zealand and the Plaintiff is probably best off proceeding against the 2nd Defendant in New Zealand, but it would only be fair to the 2nd Defendant if that were done whilst he was in New Zealand.

7.  This morning, in answer to requests from the Court, Mr Maurellet, who appeared on behalf of the Plaintiff, has taken instructions and has indicated that the Plaintiff does not intend to pursue any further prohibition orders once the contempt proceedings have been concluded and the examination has also been concluded, and that seems to me to be sensible.  The 2nd Defendant has been kept in Hong Kong now for nearly two and a half years and very little by way of money has been extracted.  We have been told that useful information as to possible assets of the 2nd Defendant has been obtained but that is something else.

8.  In my view, we have no alternative but to dismiss this appeal, but it is to be hoped that the proceedings in Hong Kong can be concluded as quickly as possible on the basis which I have outlined above.  I would therefore dismiss this appeal.

Hon Burrell J:

9.  I agree and have nothing to add.

CACV 71/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 71 OF 2008

(ON APPEAL FROM HCA NO. 1475 OF 2006)

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D E C I S I O N

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1.  This comes before me as an application for security for costs on an appeal which is to be heard on 10 December.

2.  Although the appeal was launched some time ago, in March of this year, this application comes late.  The reason it came late is that the Plaintiff, who seeks the costs, indicated that it thought that the appeal might in fact never take place if the 2nd Defendant, against whom the security for costs are sought and who is the Appellant, were made bankrupt.  That bankruptcy hearing is now not to take place until March of next year.  It is in those circumstances that this application is made late.

3.  I have to say, on this application, that the application for security for costs is not without grounds but I would also say that the 2nd Defendant does also have grounds for resisting on the basis that the matter concerns a prohibition order and the 2nd Defendant has been kept in Hong Kong for some time now, some two years, and has been unable to work during that time.

4.  Following an indication from the Court that the whole appeal may be derailed to the extent that it might have to be put off for a very long time, or for a considerable time, until it can be re-fixed were I to order security for costs, because it would be open to the 2nd Defendant then to appeal to the two-man court of the Court of Appeal which would inevitably not take place before 10 December, Mr Maurellet, who appears for the Plaintiff, indicated, at my suggestion, that I should make no order on this application.

5.  Having read the papers, and spent quite a deal of time reading the papers, I consider the right order to make today is that there should be no order on this application and no order as to costs and this will enable the appeal to go ahead.