BEIJING SONGXIANGHU ARCHITECTURAL DECORATION ENGINEERING CO., LTD v. KITTY KAM also known as WANG YUZHI

HCA 1289/2022

[2026] HKCFI 2449

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

________________________

________________________

________________________

DECISION

________________________

Introduction and Procedural Background

1.  By Summons dated 3 April 2025 (“the Summons”), the Defendant (“D”)  seeks inter alia an order to restrain the Plaintiff (“P”)  from pursuing or continuing:

(1)  The freezing injunction application in England (claim no. CL-2025-000090)  against D (“the English Injunction Application”); and

(2)  The discovery proceedings in Singapore (HCA/OA 1198/2024)  against D (“the Singapore Discovery Application”).

2.  By Amended Inter Parte Summons dated 7 April 2025 (“the Amendment Summons”), D seeks to amend the Summons inter alia to include also an order declaring that the English Injunction Application was brought in breach of the undertaking provided in paragraph 5 of Schedule 2 to the Order of Anthony Chan J dated 13 January 2023 (“the Undertaking”).  The learned judge had granted inter alia a domestic Mareva injunction against D up to the amount of HK$253,048,682 (“the Sum”)  which P claimed D defrauded it of by representing to P that the Sum would be applied to invest in real estate projects which it transpired was never so applied.   As confirmed at the outset of today’s hearing, P did not object to the Amendment Summons.  I formally granted leave to amend the Summons in terms of the Amendment Summons at the beginning of today’s hearing.

3.  The Undertaking, being taken from the standard form wording under PD 11.2, states:

“ The Plaintiff will not without the leave of the Court begin proceedings against the defendant in any other jurisdiction or use information obtained as a result of an order of the Court in this jurisdiction for the purpose of civil or criminal proceedings in any other jurisdiction. ”

4.  The Undertaking was subsequently varied on two separate occasions by DHCJ KC Chan (“the Judge”):

(1)  By Order dated 27 September 2024:

“ 1. Leave be granted to the Plaintiff to institute discovery proceedings against third parties including but not limited to Standard Chartered Bank Singapore Limited in the courts of Singapore (“the Intended Proceedings”);

 2. Leave be granted to the Plaintiff to use information in this Action, including such information obtained from or resulting from Orders dated 13 January 2023, 9 August 2024 and 29 August 2024, for the purposes of the Intended Proceedings; ”

(“the First Leave Order”)

(2)  By Order dated 16 December 2024:

“ For the avoidance of doubt, the Plaintiff be released from the undertaking given under paragraph 5 of Schedule 2 of the Order made by the Honourable Mr Justice Anthony Chan dated 13 January 2023 to the extent of, and be at liberty to, enforce the Judgment entered herein on 25 October 2024[1], if it so desire, anywhere outside this jurisdiction. ”

(“the Second Leave Order”)

5.  On 15 November 2024, P commenced the Singapore Discovery Application against Standard Chartered Singapore (“SCS”)  seeking disclosure of bank accounts held by or controlled by D with SCS.  However, at the Registrar’s Case Conference on 4 December 2024, Senior Assistant Registrar Lee Yeow Wee David (“the Registrar”), indicated that the prevailing position in Singapore is that the alleged tortfeasor should be added as a party to non-party discovery proceedings and directed P to write to D including a draft amended originating application seeking to add D as a second respondent.  D’s position is that the proposed joinder is in breach of the Undertaking. 

6.  On 21 March 2025, P applied and obtained on an ex parte basis a freezing injunction order against D from Knowles J restraining D from disposing of, dealing with or diminishing her assets in England and Wales up to the value of £30M (“the English Injunction”).  The English Injunction was continued on the return date on 28 March 2025 by Butcher J notwithstanding D appeared and sought to discharge the same on the ground that the English Injunction Application had been taken out in breach of the Undertaking.  That decision is subject to an appeal which will be heard by the English Court of Appeal on 23 April 2026 (“the CA Appeal”).

Discussion

7.  Counsel (Mr Douglas Lam SC leading Ms Sabrina Ho, Mr Arthur Poon and Mr Alex Yeung, counsel, appeared for P, and Mr William Wong SC leading Mr Charlie Liu, counsel, appeared for D)  did not dispute that an “anti-suit injunction” could be granted if it is found that the English Injunction Application and/or the Singapore Discovery Application was in breach of the Undertaking.

8.  Accordingly, it was not disputed that the central question for this court is whether the English Injunction Application and the Singapore Discovery Application are each caught by the Undertaking which turns on the proper construction of the Undertaking, the First Leave Order and the Second Leave Order.

9.  Essentially, P’s position was:

(1)  Regardless of whether the English Injunction Application fell within the Undertaking (which it is denied), on a proper construction of the Second Leave Order, it must cover the English Injunction Application;

(2)  In any event, the English Injunction Application was never within the scope of the Undertaking having regard to its purpose and origin; and

(3)  The Singapore Discovery Application is covered by the First Leave Order.  D is joined as a nominal defendant and no orders are sought against D even after she is joined, so D cannot complain of any oppression against her but on the other hand, the First Leave Order was granted to enable P to obtain information directly from SCS and it could not have been intended that the discovery application “should ground to a halt” just because D is joined as a nominal party.

10.  On the other hand, D submitted that on a plain and literal reading of the Undertaking, the English Injunction Application and the Singapore Discovery Application are each caught by the Undertaking.

11.  As held by DHCJ To (as he then was)  in Agritrade Resources Limited & Anor v Ashok Kumar Sahoo[2021] HKCFI 685 at §121, the meaning and effect of an undertaking is a matter of construction for which the usual rules of statutory construction apply.  Furthermore, an undertaking has to be construed against the origin of the Mareva relief and the purpose for which the undertaking was given.

12.  It was explained in Agritrade Resources Limited that the court has two concerns that underpin the origin of the undertaking: (1)  avoiding the oppression of the defendant by the institution of multiple proceedings for enforcement of the domestic freezing order in several foreign countries at the expense of the ability of the defendant to defend the domestic proceedings; and (2)  preventing the enforcement of the freezing order in a foreign jurisdiction having a more far-reaching effect that in the home jurisdiction.  The theme (or rationale)  of the undertaking is to prevent abuse of the exceptional and extreme Mareva relief from being used as a means of oppression on the defendant.  To address these concerns, the undertakings are imposed: (1)  to ensure the court’s jurisdiction is not being abused or invoked on a temporary basis for tactical reasons or ulterior purposes; (2)  to ensure that a defendant will not be harassed more than necessary; and (3)  to enable the court to police circumstances in which the applicant sought to use the relief obtained as a means to obtain further or greater or oppressive relief against the defendant abroad.  See ibid, §122.

13.  To similar effect see also Eastgate Partners Limited v Suthi Tejavibulya & Ors (unrep)  CACV 289/2005, 29 March 2006, where Rogers VP held that a court granting Mareva relief is entitled to demand of the plaintiff that the litigation will indeed be conducted in the local jurisdiction, with a view to ensuring “that a defendant will not be harassed more than necessary and the court’s jurisdiction is not being invoked on a temporary basis for tactical reasons”.  To sue the same parties in two different jurisdictions in respect of the same claim might well be oppressive and can be restrained.  See §§11 and 15. 

14.  Having regard to the origin of the Mareva relief and the purpose of undertakings where a domestic Mareva injunction is granted, and the natural and ordinary meaning of the words used, I have no doubt that the Undertaking prohibits P from commencing any proceedings against D in any foreign jurisdiction without leave from the Hong Kong court.  It extends to all proceedings on the same subject matter as that of this Hong Kong action.

15.  In respect of the English Injunction Application, P submitted that the word “enforce” in the Second Leave Order was intended to cover post-judgment freezing order ancillary to the Part Judgment and not merely limited to execution of the Part Judgment in other jurisdictions. 

16.  Firstly, it was submitted that the natural and ordinary meaning of “enforce” simply means “to compel observance” (by referring to Words and Phrases Legally Defined (2025 Edn), p.1102)  and the meaning of “execution” is not limited to direct execution over assets of a judgment debtor (referring to The Zafiro [1960] P 1 at 14).   It was submitted that the court should not conflate “enforcement” with “direct execution”.

17.  Secondly, it was submitted that the circumstances in which the Second Leave Order was granted clearly show that the Judge’s intention and purpose was to “enable means which lead to an effective, actual observance of the Part Judgment, and not just hollow execution in the blind” given the previous flouting of court orders by D (by referring to the Judge’s Reasons for Decision dated 8 January 2025 ([2025] HKCFI 219), §§6 and 11, Reasons for Decision dated 1 November 2024 ([2024] HKCFI 3068), §§37 and 50(a), Decision dated 16 December 2024 ([2024] HKCFI 3614), §11 and Reasons for Decision dated 22 August 2024 ([2024] HKCFI 2194), §54.)  I was invited to have regard also to that fact that currently the Part Judgment remains unsatisfied and there is no visibility of where the Sum is.

18.  Thirdly, it was submitted that “enforce” is intended to cover all means leading to the actual observance of the Part Judgment, and in particular, intended to cover post-judgment freezing injunctions which are granted to secure the fruits of judgment by referring to China CITIC Bank Corp Limited (Quanzhou Branch)  v Li Kwai Chun & Ors[2018] HKCFI 1800 at §29 per DHCJ  Keith Yeung SC (as he then was); Emmott v Michael Wilson & Partners Ltd [2019] 4 WLR 53 at §53 per Gross LJ and Great Station Properties SA v UMS Holdings Ltd [2017] EWHC 3330 (Comm)  at §63 per Teare J.

19.  However, with greatest respect to Mr Lam, I was not persuaded by any of the above submissions.  I am of the view that leave to “enforce” the Part Judgment in the Second Leave Order was not intended to include the obtaining of a freezing injunction in England and Wales.

20.  It has been held that a freezing injunction is different in character from an orthodox interlocutory injunction in that it “does not enforce anything, but merely prepares the ground for a possible execution by different means in the future”.  The applicant “does not claim any interest in the assets and seeks an inhibition of dealings with them simply in order to keep them available for a possible future execution to satisfy an unconnected claim.” “Nor does Mareva injunction enforce the plaintiff’s rights even when a judgment has ascertained that they exist, for it merely ensures that once the mechanisms of enforcement are set in motion, there is something physically available upon which they can work”: see Convoy Collateral Ltd v Broad Idea International Ltd [2022] 2 WLR 703 per Lord Legatt JSC at §§84-85 citing Lord Mustill in Mercedes Benz AG v Leiduck [1996] AC 284 at 299B and 302.

21.  The characterization of a Mareva injunction as a step which may lead to enforcement or pave the way to enforcement rather than enforcement itself has also been confirmed by the English Court of Appeal in: (1)  Masri v Consolidated Contractors International (UK)  Ltd and others (No 2) [2009] QB 450 at §§123-124 per Lawrence Collins LJ; and (2)  Cyprus Popular Bank Public Co Ltd (in special administration)  v Vgenopoulous and others [2018] QB 886 at §§65-66 per Flaux LJ.

22.  Thus even if Mr Lam is correct that the English Injunction was a post-judgment injunction, which for reasons to be explained I do not accept, it is not allowed under the Second Leave Order granting leave to “enforce” the Part Judgment.

23.  As for what was intended by the Second Leave Order, contrary to Mr Lam’s submissions, the Judge in his Reasons for Decision (see [2025] HKCFI 219)  at §11 in relation to Second Leave Order drew the distinction between enforcement of a judgment elsewhere and seeking to apply for an interlocutory Mareva injunction in addition to the one already obtained in Hong Kong.  As to what the Judge had in mind when referring to enforcement of the Part Judgment elsewhere, this is clear from §10 where he mentioned that Mr Lam had “clarified and confirmed that P would now only be seeking by the remainder of the Leave Summons for leave to enforce the Part Judgment by, among others, registering the Part Judgment in Singapore under the Reciprocal Enforcement of Foreign Judgments Act 1959 and then taking such enforcement or execution procedures there”.  Thus what the Judge plainly intended was to allow P to enforce the Part Judgment by registration in Singapore and then take enforcement or execution procedures there.  In the same paragraph, the Judge noted that Mr Lam further clarified that P was seeking for the avoidance of doubt a release from the Undertaking to the extent that P be at liberty to enforce the Part Judgment in other jurisdiction as might be advised or desire.

24.  Mr Lam however submitted that §11 where the judge referred to “interlocutory Mareva injunction” when read together with §§8-9, the release was intended to exclude an application for enforcement of a worldwide Mareva abroad for which the guidelines set out in Dadourian Group International Inc v Simms v Others [2006] 1 WLR 2499 (as summarised by DHCJ To at §138 in Agritrade Resources Limited)  applied.  Not only was that not what was stated (the Judge would have stated “not seeking to apply to enforce the Mareva injunction obtained in Hong Kong” and deleted the words “in addition to the one it obtained in Hong Kong”), given that there is no suggestion that the Mareva injunction obtained from Anthony Chan J (as he then was)  was a worldwide Mareva, I am afraid this submission was not Mr Lam’s best point.

25.  Mr Lam also submitted that by granting leave to enforce the Part Judgment elsewhere this necessarily means leave was granted to commence proceedings under common law to enforce the Part Judgment and any ancillary applications part and parcel to those proceedings.  However, as a matter of fact, the English Injunction Application was commenced by separate originating process, by a Part 8 claim (claim no. CL-2025-000090)  whereas the action for recognition and enforcement at common law of the Part Judgment was commenced by a separate Part 7 claim (claim no. CL-2025-000087)  (“the Enforcement Action”). 

26.  Even if procedurally the separate claim was required, as a matter of substance over form, it is clear that the English Injunction Application was seeking a freestanding interlocutory injunction separate from the proceedings to enforce the Part Judgment in England.  The English Injunction Application was taken out under s.25 of the Civil Jurisdiction and Judgments Acts 1982 (“CJJA”)  which is equivalent of s.21M of the High Court Ordinance, Cap.4 in Hong Kong.  See Gee on Commercial Injunctions, 7^th Edn, §6-062, that proceedings under s.25 of CJJA are “freestanding proceedings brought solely for the purpose of obtaining the interim relief”.  

27.  It is made clear in the Part 8 claim (see para (2)  of the Details of Claim)  that a domestic freezing injunction and ancillary disclosure orders were interim relief in that it was sought pending determination of the Enforcement Action and the actual enforcement of the Part Judgment.  This is also consistent with P’s ex parte skeleton which characterized the relief sought as interim relief in aid of substantive proceedings taking place in any jurisdiction.  That is plainly contrary to what the Judge had said the Second Leave Order did not authorize, i.e. an interlocutory Mareva injunction in addition to the one obtained in Hong Kong. 

28.  I also do not accept P’s submissions that the English Injunction Application was a “post-judgment injunction” to enforce the Part Judgment which was not strictly speaking a Mareva injunction (relying on the decision of DHCJ To in Menno Leendert Vos v Global Fair Industrial Limited & Ors (unrep)  HCA 4200/1995, 25 March 2010 at §9)  and caught by what was “carved out” by the Judge.  The Part 8 claim plainly recognizes that there is no “judgment” as such pending the determination of the Enforcement Action.  Hence, there was a reference to the Part 7 claim for recognition and enforcement at common law of the Part Judgment and that the domestic freezing injunction was pending the determination of the Enforcement Action and actual enforcement of the Part Judgment.  In para (3), it was also recognized that there was a possibility that the Part Judgment is set aside and the underlying proceedings in Hong Kong would proceed to trial and in that eventuality, P seeks the injunction in support of those proceedings.

29.  In rejecting the submissions that the English Injunction is post-judgment injunction, I necessarily reject the alternative submissions of P that the Undertaking was not intended to debar applications for post-judgment injunction.  

30.  Firstly, it was submitted that the “two concerns” identified by DHCJ To in Agritrade Resources Limited were not engaged because it is not for enforcing the domestic Mareva elsewhere but to enforce the Part Judgment.  However, as already explained, the English Injunction Application was a separate application from the Enforcement Action in seeking another self-standing Mareva outside of Hong Kong in addition to the Mareva already obtained in Hong Kong.  At least some of the three rationales of the Undertaking already mentioned are engaged where D would be harassed more than necessary by proceedings in the UK in seeking further or greater relief (up to £30M)  on top of the Mareva already obtained in Hong Kong.

31.  Secondly, it was submitted that by obtaining a post-judgment Mareva to enforce the Part Judgment, the English Injunction Application did not fall within the Undertaking which only covers proceedings in respect of the same subject matter.  However, in the Part 8 claim, albeit in the alternative basis, it was clearly stated that that English Injunction was in support of the underlying claims in Hong Kong.  Moreover, in the absence of any authorities cited to me, I fail to see why as a matter of principle the fact that the granting of Part Judgment may have converted the underlying cause of action into a debt and suing on that debt takes it outside of a case of commencing proceedings in respect of the same subject matter in two jurisdictions which can be oppressive.

32.  As for the Singapore Discovery Application, it is clear from the terms of the First Leave Order that leave is only granted to commence discovery proceedings against third parties in Singapore.  D plainly is not a “third party”.  When P sought leave by Summons on 24 September 2025 for leave “against the Defendant and/or third party discovery proceedings against [SCS]”, P plainly understood and recognized at that stage that leave was specifically required for proceeding against D.

33.  Whilst it was submitted that D is only joined as a nominal party, there is no distinction in the First Leave Order between proceedings in which substantive orders or sought against D and where no substantive orders are sought.  Nor is there any distinction where D is joined as a substantive or nominal party.  In view of the fact that undertakings are as solemn, binding and effective as an order of the court (see e.g. Hussain v Hussain [1986] 1 All ER 961 at 963 per Sir John Donaldson MR and Koza Ltd v Koza Altin Isletmeleri AS [2021] 1 WLR 170 at §66 per Popplewell LJ), and breach of court orders may lead to contempt proceedings in appropriate circumstances, I would hesitate to read words into the order that is not there and the First Leave Order should be read strictly and literally.

34.  Whilst it was submitted by P that D cannot complain of any “oppression” simply because she is a party as a matter of procedure, and it is not disputed that no orders are made against her, I cannot accept that being a party to those proceedings, which would require her time and costs to attend and resist those proceedings, which Mr Lam accepted she would have the right to, that is not oppression or vexatious.  The fact of the matter is that the Singapore Discovery Application concerns the same subject matter as the Hong Kong action.  The whole purpose of that application was to trace and obtain disclosure regarding D’s account held with SCS which D said in these proceedings she was unable to provide any information about the whereabouts. To sue D in two jurisdictions in respect of the same claim to obtain the same relief could be considered oppressive.

Disposition and Orders

35.  In all, having considered all the submissions, I am of the view that the English Injunction Application and Singapore Discovery Application were in breach of the Undertaking and D is entitled to the orders sought in the Amended Summons.

36.  I hope to be forgiven if I have not expressly dealt with each and every one of the submissions made or authorities cited by counsel, which for the avoidance of doubt, I have considered.  However, due to the court’s desire to resolve this matter before the CA Appeal scheduled for hearing on 23 April 2026 and I have been informed that when leave was granted Popplewell LJ had inquired the status and result of D’s present application, I only set out herein the main arguments and my views necessary for disposal of this matter.

[Discussion on terms of the order and costs]

Mr Douglas Lam SC leading Ms Sabrina Ho, Mr Arthur Poon and Mr Alex Yeung, instructed by Messrs. P.C. Woo & Co., for the Plaintiff

Mr William Wong SC leading Mr Charlie Liu, instructed by Messrs. NWK Lawyers, for the Defendant

HCA 1289/2022

[2025] HKCFI 4497

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

______________

BETWEEN

______________

__________________________________

REASONS FOR DECISION

__________________________________

I.  INTRODUCTION

1.  Before me were:-

(1)  Charging Order: Notice to Show Cause filed on 7 February 2024, (the “1^st Charging Order Nisi”) charging on the property in the name of the Defendant (the “Property”);

(2)  Charging Order: Notice to Show Cause filed on 12 August 2025 (the “2^nd Charging Order Nisi”) charging on the Property; and

(3)  Charging Order: Notice to Show Cause filed on 12 August 2025 (the “3^rd Charging OrderNisi”) charging on the Property.

2.  The 1^st Charging Order Nisi was in respect of:-

(1)  A judgment sum of HK$650,000.00 by judgment dated 8 March 2023 (the “2023 Judgment”) with interest of HK$46,440.91 accrued thereon as at 23 January 2024, totalling HK$696,440.91; and

(2)  “the costs of this application”.

3.  The 2^nd Charging Order Nisi was in respect of 31 costs orders in the proceedings totalling HK$4,362,450.00 (the “31 Costs Orders”) made between 26 January 2023 and 29 May 2025 and “the costs of this application”.

4.  The 3^rd Charging Order Nisi was in respect of a judgment sum of HK$220,548,682.00 entered on 25 October 2024 (the “Default Judgment”) as a result of the Defendant’s failure to comply with an unless order dated 27 September 2024 (the “Unless Order”) and the accrued interest thereon, totalling HK$303,561,118.09, and “the costs of this application”.

5.  Mr Arthur Poon, counsel for the Plaintiff, submitted that I should make the three Charging Order Nisi absolute. Ms Euchine Ng, leading Ms Valerie Kwok, counsel for the Defendant, submitted that I should discharge the 1^st Charging Order Nisi, and adjourned the 2^nd and 3^rd Charging Orders Nisi after the determination of the outstanding appeals and applications (discussed below).

6.  At the end of the hearing, I made the following order:-

(1)  The 1^st Costs Order Nisi be made absolute in respect of HK$650,000.00 and interest thereon in the sum of HK$139,183.37 as at 16 September 2025, and the costs of HK$1,365,000.00;

(2)  The 2^nd Costs Order Nisi be made absolute in respect of HK$4,362,450.00 and interest thereon in the sum of HK$277,682.74, and the costs of HK$58,000.00; and

(3)  The 3^rd Costs Order Nisi be made absolute in respect of HK$220,548,682.00, interest thereon in the sum of HK$69,342,367.47 and HK$16,710,921.54 as at 16 September 2025 and the costs of HK$58,000.00.

7.  These are my reasons.

II.  THE 1^ST CHARGING ORDER NISI

8.  In respect of the 1^st Charging Order Nisi:-

(1)  After it was made on 29 January 2024, in March 2024, the Defendant raise a preliminary issue that the Property was beneficially owned not by the Defendant but his mother.

(2)  On 23 October 2024, Master Frances Lok SC made an order that the preliminary issue shall be tried first. The trial of the preliminary issue was fixed to take place on 21 July 2025 with two days reserved.

(3)  Just two weeks before the scheduled hearing, on 8 July 2025, the Defendant sent to the Plaintiff a cheque of HK$782,174.43 (the “1^st Cheque”) in an attempt to settle the 2023 Judgment with interest accrued thereon.

(4)  However, the Plaintiff refused to cash the 1st Cheque on the ground that the sum did not include the “costs of this application”. “The costs of this application” had, at that time, not yet been taxed because the preliminary issue, being part of the application to make the 1st Charging Order Nisi absolute, was yet to take place.

(5)  On 10 July 2025, in writing, the Plaintiff demanded the Defendant to pay “the costs of this application” in the sum of HK$1,821,910.00.

(6)  On 10 July 2025, the Defendant replied, saying that the costs in the bill of costs were well beyond the standard cost of HK$10,400.00 even on an indemnity basis for an application for charging order nisi according to the “Lump Sum Assessment References Figures” issued by the Law Society. Instead, the Defendant sent out a cheque of HK$10,400.00 (the “2^nd Cheque”) as “the costs of this application”.

(7)  On 21 July 2025, the trial of the preliminary issue took place before DHCJ Andrew Li. The Defendant’s legal representatives did not have any instructions, however, to argue on the preliminary issue; nor did the Defendant or her mother, though having filed affirmations, attend the Court for cross-examination. DHCJ Andrew Li answered the preliminary issue in favour of the Plaintiff, that is, the Defendant has beneficial ownership in the Property, and assessed the costs to be HK$1,300,000.00: see [2025] HKCFI 3356.

9.  Mr Poon submitted that the Plaintiff was entitled not to cash the 1^st Cheque because the 1^st Cheque did not include “the costs of this application” and the 2^nd Cheque was insufficient to cover “the costs of this application”. Ms Ng submitted that “the costs of this application” was not an ascertained sum and therefore cannot be part of the 1^st Charging Order Nisi.

10.  A charging order can only be made in respect of an ascertained sum. As Ms Ng pointed out, the practice is that when making a charging order nisi absolute, the Court would at the same time assess “the costs of this application” and add the assessed costs to the charging order absolute.

11.  However, in my view, it does not follow that the chargor nisi has to accept the payment of the underlying sum without the costs of the application for the charging order, when the costs have yet to be fixed. The parties have to apply some common sense. For example, if the application is a run-of-the-mill application for a chagrining order, the standard costs according to the Law Society could be a good reference. It would probably be reasonable for the chargor nisi to accept the payment with the standard costs and if he refuses to do so, this would be a consideration the Court will take into account in determining whether to make the charging order nisi absolute when the payment is still on the table for acceptance, and there may also be costs consequence. However, where the costs of the application, due to substantially disputed issues, would be reasonably expected to be far more substantial than the standard costs, it would probably be reasonable for the chargor nisi to refuse the chargee’s offer of the standard costs only, and it would probably lie ill in the charge nisi’s mouth to say that it has made any genuine offer to settle the matter. Of course, if the chargee nisi would separate the underlying sums and the costs, that may make life easier – for instance, in offering to pay the underlying sum and the costs, the chargee nisi makes it clear that if the chargor nisi does not accept the costs, the chargor nisi should still accept the underlying sum and leaving the charging order application in respect of the costs to be argued and determined. At the end of the day, if the matter has to proceed to determination of a grant of a charging order absolute, the Court would usually assess the costs at the same time and add the assessed costs to the charging order absolute. The chargee can there and then still make the payment to discharge the charging order.

12.  In the present case, the Defendant’s offer of the standard costs near the trial of the preliminary issue in exchange for the complete discharge of the 1^st Charging Order Nisi was, in my view, disingenuous. By the time of the trial of the preliminary issue, the costs could by no way anywhere near the standard costs. It was entirely reasonable for the Plaintiff to reject this offer, because otherwise, the 1^st Charging Order Nisi would be discharged and the Plaintiff would lose the protection of a chagrining order in respect of the costs of the application that would be included in the charging order absolute.

13.  Upon DHCJ Andrew Li’s decision, the costs were assessed at HK$1,300,000.00. For the further costs incurred up to the hearing before me, at the end of the hearing before me, I summarily assessed the costs of the present application as well.

14.  Therefore, I rejected Ms Ng’s argument that the 1^st and 2^nd Cheques were already payment of the sums in the 1^st Charging Order Nisi. The Plaintiff was entitled to reject them in the circumstances. The delivery of the 1^st and 2^nd Cheques should not stop the accrual of interest on the underlying sums.

III.  THE 1^ST, 2^ND AND 3^RD CHARGING ORDERS NISI

15.  In respect of all the 1^st, 2^nd and 3^rd Charging Orders Nisi, Ms Ng first submitted that on 5 September 2025, the Defendant filed summons for an application for stay of the execution of the Default Judgment (the “Stay Application”) pending appeal against the Default Judgment lodged on 22 November 2024 (the “Default Judgment Appeal”). The Stay Application would be heard on 16 October 2025 for directions. Ms Ng submitted that if the Stay Application would succeed, then the Plaintiff would not be entitled to enforce the 3^rd Charging Order Nisi.

16.  The Default Judgment was made on 25 October 2024. The Default Judgment Appeal was lodged on 22 November 2024. The purported reason for the inordinate delay in applying for a stay only one year later was that the Defendant thought that the merits of the appeal but in the light of DHCJ Andrew Li’s comments that there was no stay application: see §62 of his Lordship’s decision, the Defendant thought fit now to make the Stay Application.

17.  I was unable to accept this reason as any good reason. The Defendant was all along legally advised, and it was well established that an appeal did not operate as a stay. It was the Defendant’s own decision whether to apply for a stay or not, but the Court proceeded on the well-established principle and thus the Plaintiff was prima facie entitled to execute an order made in its favour.

18.  Secondly, Ms Ng submitted that the Default Judgment Appeal (to be heard on 7 November 2024), and the application for leave to appeal against the Unless Order lodged on 30 December 2024 (the “Application for Leave against the Unless Order”), if they would succeed, would mean that (1) the underlying liability of the 3^rd Charging Order Nisi would be asset aside; and (2) out of the 31 Costs Orders underlying the 2^nd Charging Order Nisi, a quarter of the total liability would be set aside. However, in my view, in the absence of any stay pending the Default Judgment Appeal, the Default Judgment Appeal itself was not a reason not to make the charging order nisi absolute. In respect of the Application for Leave against the Unless Order, there would at most be a quarter of the 31 Costs Orders set aside, and in any event, there was no stay of any of the costs order despite the Application for Leave against the Unless Order.

19.  Thirdly, referring to that the Defendant’s application by summons filed on 8 November 2024 for relief from sanction (the “Relief From Sanction Application”) of the Unless Order, which was adjourned on 27 February 2025 with liberty to restore after the determination of the Default Judgment Appeal, Ms Ng submitted that making the 3^rd Charging Order Nisi would frustrate the regime of relief from sanction. In my view, the Relief From Sanction Application would depend on the outcome of the Default Judgment Appeal. Further and in any event, while the Relief From Sanction Application was adjourned pending the determination of the Default Judgment Appeal, there was no stay or not even any application for a stay of the sanction of the Unless Order, namely, the Default Judgment.

20.  Fourthly, referring to the appeal lodged on 18 August 2025 against DHCJ Andrew Li’s declaration in respect of the preliminary issue in favour of the Plaintiff, Ms Ng submitted that if his Lordship’s judgment would be set aside, then the basis for all the Charging Orders Nisi, being that the Defendant beneficially owned the Property, would not subsist and all the Charging Orders Nisi should be set aside as a result. My short answer was that again, there was no stay or not even any application for stay of the declaration.

21.  Fifthly, Ms Ng submitted that if the Court would make the Charging Orders Nisi absolute now, and if the underlying basis would be set aside, then costs would be wasted in unwinding any enforcement. However, in my view, a charging order absolute was not a sales order, which was not a matter before me. A charging order absolute mainly gives security and priority. Ms Ng was right in submitting that the priority would date back to the date of the Charging Orders Nisi. However, I did not agree with her that this would mean that the Plaintiff would suffer no prejudice from the Court not making the orders absolute. After all, the burden lied upon the Defendant to show cause why the Charging Orders Nisi should not be made absolute. A delay in making them absolute, without good reason, in my view would be prejudice to the Plaintiff’s right.

22.  Sixthly, Ms Ng submitted that the unchallenged liabilities (taking into account the Default Judgment Appeal and the Application for Leave against the Unless Order) would be HK$3,228,450.00 only, while the value of the Property was HK$47,430,000.00. Ms Ng submitted that it would be disproportional to make the Charging Orders Nisi or any of them absolute. However, as I explained above, there was no stay of the relevant orders. Further and in any event, as Mr Poon submitted, which I agreed:-

(1)  I was entitled to consider all relevant matters such as the chargee’s conduct: see Union Finance Ltd v Leung Wai Ling [2000] 2 HKC 821 at 824C per Chung J;

(2)  The Defendant’s conduct had been criticised by the Court as “abusive” and deploying “games and tactics”: see [2023] HKCFI 159 at §38 per Anthony Chan J (as he then was); [2024] HKCFI 3068 at §24 per DHCJ KC Chan; [2025] HKCFI 3356 at §5 per DHCJ Andrew Li;

(3)  The Defendant did not settle any costs order underlying the 2nd Charging Order Nisi, even though only a quarter of the total sum were challenged (though not stayed);

(4)  The Defendant had adduced no evidence that he had any other assets within jurisdiction;

(5)  The Defendant’s mother had filed affirmation to show any hardship, and in any event, a charging order, as explained above, only gives security and priority, but not a sales order itself; and

(6)  I did not agree with Ms Ng that I should consider each of the Charging Orders Nisi individually in determining proportionality. All the Charging Orders Nisi were made in the same proceedings between the same parties. It would, in my view, be appropriate here to consider them all together in determining proportionality.

IV.  CONCLUSION

23.  In the circumstances, having considered, individually and as a whole, the reasons advanced by Ms Ng, I thought it appropriate to grant the order set out in §6 above.

24.  Lastly, I thank Mr Poon and Ms Ng as well as Ms Kwok for their assistance.

Mr Arthur Poon, instructed by P.C. Woo & Co., for the Plaintiff

Ms Euchine Ng, leading Ms Valerie Kwok, instructed by NWK Lawyers, for the Defendant

HCA 1289/2022

[2025] HKCFI 3356

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1289 OF 2022

____________

____________

__________________________________

REASONS FOR DECISION

__________________________________

1.  At the end of the first day of the trial on the preliminary issue as defined in Master Frances Lok SC’s Order dated 23 October 2024 of whether the beneficial interest of a property known as Flat B on the 16^th Floor of Tower 2, Larvotto, No.8 Ap Lei Chau Praya Road, Hong Kong (“the Property”) should be vested in the defendant (“D”) or the intervener (“I”) in this case (“the Preliminary Issue”), I dismissed D and I’s claims.  I also made a declaration that the Property’s legal and beneficial interest vested with D. Consequential costs orders and further directions in relation to 2 further ex parte charging orders nisi applied for by the plaintiff (“P”) were also made by me after hearing submissions from the parties.

2.  I said I would reduce the decisions I made above at the hearing into writing and would provide the reasons for my decisions in due course. Here are the reasons.

BACKGROUND       

Events leading to the trial on the Preliminary Issue

3.  Originally 2 days had been reserved for the trial in open court involving 5 counsel and 3 parties’ solicitors for the Preliminary Issue.  This is an issue raised by D and I for the first time after a charging order: notice to show cause application was made by P on 29 January 2024.  A charging order nisi was subsequently made by Master Dick Ho on 19 March 2024 (“the Charging Order Nisi”).  Before that, D had on several different occasions, whether in her own affirmations or through her solicitors by letters, specifically confirmed that the Property was owned by her.

4.  D is a litigant who has been severely criticized by Anthony Chan J and Deputy High Court Judge KC Chan in several of their judgments / decisions in this case before.  Both of the learned judges have described D as someone who has deployed “litigation gamesmanship” throughout these proceedings.  It has also been revealed that D has persistently flouted, ignored and blatantly breached the orders of the Court throughout the present proceedings.  The history of this case strongly suggests to this Court that D seems to think that she is above the law and she can ignore and flout the orders of the Court as and when she likes.  She would also deploy whatever litigation games and tactics in order to frustrate the claims of P and the orders made by the Court.

5.  The Preliminary Issue is yet another classic example of how D tries to play this game and to perfect her skill in litigation gamesmanship.  Except this time she involves her mother, I, in this case.  They basically joined together to raise the Preliminary Issue in order to try to defeat P’s legitimate request to enforce a costs order of HK$650,000 (plus interest) made by Anthony Chan J.  They ran this issue for over a year and only chose to abandon it on the first day of the trial by not turning up in court to prove it.

6.  Briefly, the history leading to the events on the first day of the trial can be summarized in the following paragraphs.

7.  On 13 January 2023, Anthony Chan J granted a Mareva injunction against D and in favour of P in the sum of HK$253,048,682 prohibiting D from removing assets up to that amount from Hong Kong.  She was also prohibited from, inter alia, disposing of and/or dealing with or diminishing the value of her assets in Hong Kong, including the Property.

8.  By way of a summons dated 14 December 2022, D applied for a stay of proceedings (“the Stay Summons”).

9.  The Stay Summons was dismissed by Anthony Chan J on 13 January 2023 with an order nisi that the costs of it be paid by D to P. 

10.  On 8 March 2023, Anthony Chan J made an order that the costs of and occasioned by P’s summons dated 5 October 2022 and the Stay Summons be summarily assessed at HK$650,000.

11.  On 29 January 2024, in its capacity as the judgment creditor, P applied for the charging order: notice to show cause against D for the sum of HK$650,000 plus interest (which amounted to a sum of HK$696,440.91) ordered by Anthony Chan J on 8 March 2023.

12.  The hearing to show costs was originally fixed to be heard before Master SP Yip on 5 March 2024.

13.  By an Order dated 19 March 2024, Master Dick Ho ordered D to file and serve her affidavit in opposition to the Charging Order Nisi and directed P to file evidence in reply.  D was represented by her then solicitors at the hearing.  One can assume that the Preliminary Issue must have been raised by D for the first time as the master made the directions for parties to file evidence on the issue at that hearing.

14.  On 28 May 2024, D filed the 6^th affirmation of Kitty Kam (“Kam 6^th”), for the first time formally raising the issue in writing that the beneficial owner of the Property actually belonged to I, her mother Madam Liu and not her.  This is despite of the fact that she was the registered owner of the Property since the date when the Property was first purchased. I also filed the affirmation of Liu Jiang Fan dated 6 May 2024 (“Liu 1^st”) to support this newly raised claim of beneficial interest of the Property actually belonged to her rather than D.  The Court would describe the claims made were based on some rather wild and far-fetched assertions but without any credible documents in support.    

15.  On 15 July 2024, P filed the 8^th affirmation of Luk Ka Yan, a solicitor from P’s firm, inter alia, in reply to the claims and allegations raised by D and I in their affirmations.

16.  On 23 October 2024, seeing the urgency of the matter and the newly asserted claims, Master Frances Lok SC made the Order that the Preliminary Issue to be heard substantively on the first available date before a bilingual judge (“Master Lok’s Order”).  Further directions were given by Master Lok for parties to file another round of affirmation evidence.  Significantly, under §7 of Master Lok’s Order, it has been specifically ordered that the affirmations filed would stand as evidence-in-chief of the respective deponents for the trial and all deponents who filed affirmation(s) shall attend the trial for cross-examination, failing which their evidence shall not be admitted in evidence at the trial. 

17.  Master Lok also gave directions for the parties to file and serve opening submissions and list of authorities, trial timetable, dramatis personae and chronology.  Since D and I were the parties who asserted the beneficial interest claim and caused the Preliminary Issue to be heard, Master Lok ordered her and I to file the above documents at least 14 days before the trial.  P was ordered to file its submissions and list of authorities  at least 7 days before the trial.

18.  The trial for the Preliminary Issue was later fixed before me for trial on 21 July 2025 (with 22 July 2025 reserved) after consultation with counsel’s diaries.         

19.  As a result of some of the wild and far-fetched claims made by D and I, P took out 2 separate summonses dated 27 March 2025 applied for (1) discovery and inspection of some of the documents mentioned in Kam 13^th and Liu 1^st (“the Discovery & Inspection Summons”) and (2) interrogatories against D and I (“the Interrogatories Summons”). 

20.  By an order dated 29 April 2025, this Court ordered the above 2 summonses to be heard before the trial on the Preliminary Issue.  The hearing of those summonses was later fixed to be heard before me on 14 July 2025 (with 1 day reserved). 

21.  Consistent with D’s conduct throughout these proceedings, both D and I did not respond to the requests made under the Discovery & Inspection Summons and the Interrogatories Summons. Nor did they lodge any skeleton submissions and list of authorities pursuant to the practice directions.

22.  Instead, very belatedly and without any prior notice, D through her solicitors sent a cheque of HK$782,174.43 on 8 July 2025 in purported settlement of P’s claim under the Charging Order Nisi including the interests thereof.  D asked the Court to vacate the hearing for the above 2 summonses as in her view she has already settled all her liabilities under the Charging Order Nisi. This was not accepted by P nor by the Court.

23.  At the hearing on 14 July 2025, I made an Order directing D and I to file and serve affidavit evidence in order to make discovery of the complete and unredacted documents requested by P under the Discovery & Inspection Summons within 3 days.  By another order made by me on the same date, this Court also ordered them to answer the interrogatories requested by P under the Interrogatories Summons.  The Court ordered costs of and occasioned by those 2 summonses to be paid by D and I to P on an indemnity basis, such costs to be summarily assessed by the Court and to be paid forthwith.

24.  Again, consistent with her usual behavior, D has simply ignored my Orders. On this occasion, her mother has also ignored them. 

Events that took place on the first day of trial              

25.  §7 of Master Lok’s Order has made it clear that D and I are going to be barred from relying on the affirmations filed by them on the Preliminary Issue if they do not turn up in court and subject themselves to cross-examination at the trial.  

26.  On the first day of the trial, both D and I failed to turn up.

27.  The Court has been informed by Ms Leung for D and Ms Yau for I that they have no instructions to argue the Preliminary Issue on behalf of their respective clients at the trial at all. Their instructions are limited to argue on the issue of costs arising out of the Charging Order Nisi and the costs resulting from the Preliminary Issue, including the trial fixed for hearing the issue before me on 21 July 2025.  

28.  Given the repeated “litigation gamesmanship” played by D as mentioned by both Anthony Chan J and DHCJ KC Chan in several of their previous judgments / decisions in this case, the absence of D and I at the first day of the trial perhaps was not surprising.  It is consistent with D’s contemptuous and appalling conduct throughout these proceedings.  Only this time she was joined by her mother, I in this case.

29.  However, it means that 2 days reserved for the trial, which are “milestone dates” under the CJR, would be wasted if the Court were not able to proceed with the trial on the Preliminary Issue. Also, it would mean that the issue will be left undecided by the Court with the possibility that D and I will able to raise the same issue again in some future dates.

30.  As D and I had failed to provide any discovery and inspection of the documents and answered any interrogatories ordered by the Court on 14 July 2025, it is reasonable to assume that D and I knew well that their case is very flimsy and without any solid foundation at all.

31.  As the Preliminary Issue was raised and asserted by them, D and I carry the burden of proof. It is for them to prove the beneficial ownership of the Property vested with I and not D at the trial.

32.  They have failed to do so by firstly not lodging any skeleton submissions and list of authorities as ordered by Master Lok; and secondly by not turning up in court to prove the issue.

33.  In this case, instead of simply paying up the sum under the Charging Order Nisi together with interest and the fixed costs thereof back in March 2024, D and I chose to raise the Preliminary Issue and forced P to file evidence and investigate into the issue.  They also caused the Court to spend a great deal of public resources to entertain their claim and to reserve at least 1 day for the two summonses and 2 days for the trial, when, as it turned out, all along they had no intention to turn up in court and prove the issue.   

34.  In this futile exercise, D managed to delay the whole proceedings for at least 16 months, ie from the date of the Charging Order Nisi in March 2024 to the date of the trial, causing a lot of unnecessary costs and time incurred by P and wasting a lot of the precious resources of the Court.  None of those costs incurred by P have been met by D to date.

35.  At the hearing, Ms Leung has invited the Court to accept an “undertaking” from D that she would agree to be barred from raising the Preliminary Issue in any future charging order nisi applications instead of having the Court proceeding with the trial.  Given D’s record in ignoring or disobeying most if not all the orders of the Court in the past and her skills in litigation gamesmanship, I have no hesitation to dismiss such a request as I have no confidence in D (and her mother for that matter) that she will abide to any orders made by this Court at all.      

36.  I agree with Mr Lam’s submissions that the Court should proceed with the trial on the Preliminary Issue.

37.  I therefore invited Ms Leung and Ms Yau to call D and I as witnesses and proceed with proving the Preliminary Issue at the trial since it is an issue raised by their clients and must be proved by them.

38.  Ms Leung and Ms Yau both confirmed that they did not have instructions to conduct the trial on the Preliminary Issue on behalf of their clients.  In any event, both D and I were not in court.  They therefore were not in the position to proceed with proving the Preliminary Issue.

39.  Under such circumstances, I have invited Mr Lam to address me as why the Court should not proceed with the trial and decide on the Preliminary Issue immediately.

Decision of the Court in relation to the Preliminary Issue

40.  Having heard Mr Lam’s submissions, I am satisfied that since D and I have called no evidence on the Preliminary Issue, I find there is absolute no basis or evidence to support their hollow and unsubstantiated allegations that the beneficial interest is vested in I.  In this regard, I agree with the legal principles set out in Mr Lam’s skeleton submissions on the Preliminary Issue and the authorities relied on by him.  Since D is the registered owner of the Property and the legal owner of it, in the absence of any credible evidence produced by her and I to the contrary (which there is none), there is simply no basis for her to suggest that the beneficial interest should somehow be vested in somebody else.

41.  The Court therefore found that the allegations made by D and I on the alleged beneficial ownership not proven and their claims made under the Preliminary Issue must be dismissed.

42.  The Court further made a declaration that both the legal and beneficial interest of the Property was and is belonged to D and not I or anybody else.

43.  The Court then adjourned the case to the afternoon for P to address me on the proposed terms of the draft order based on the decisions I made on the Preliminary Issue and for the parties to address me on the issue of costs, including the figure of the summary assessment on those costs.

Order made by the Court  

44.  When the parties returned to court in the afternoon, Mr Lam presented me with a draft order based on the decisions I made above.  I invited Ms Leung and Ms Yau to address me on the draft and in particular on the issue of costs. 

45.  Having heard submissions from the parties, I made the following orders at the end of the hearing (“the Order”):-

“(1)  The Defendant is the legal and beneficial owner of Flat B, 16^th Floor, Tower 2, Larvotto, No. 8 Ap Lei Chau Praya Road, Hong Kong (the “Property”)

(2)  The Defendant and the Intervener’s assertion that the Intervener is the beneficial owner of the Property (the “Preliminary Issue”) be dismissed;

(3)  Costs of and occasioned by the Preliminary Issue, including the Plaintiff’s summons for discovery and inspection and the Plaintiff’s summons for leave to file and serve interrogatories both dated 27 March 2025, the trial of the Preliminary Issue as defined in the Order of Master Frances Lok SC dated 23 October 2024 and all reserved costs be payable forthwith by the Defendant and the Intervener, jointly and severally, on an indemnity basis, with certificate for 2 counsel, summarily assessed at HK$1,075,000.00.

(4)  The hearing for the Charging Order: Notice to Show Cause dated 29 January 2024 be adjourned to a date to be fixed with 30 minutes reserved before Deputy High Court Judge Gary Lam on 16 September 2025 at 9:30 am and to be heard together with:

(a)  The Charging Order: Notice to Show Cause dated 21 July 2025 (by the 8^th Affirmation of Chan Sin Yuen Sharmaine dated 15 July 2025)(the “2^nd Charging Order”); and

(b)  The Charging Order: Notice to Show Cause dated 21 July 2025 (by the 9^th Affirmation of Chan Sin Yuen Sharmaine dated 17 July 2025) (the “3^rd Charging Order”).

(5)  The Defendant do have leave to file affirmation evidence, if so advised, in respect of the 2^nd Charging Order and the 3^rd Charging Order within 28 days hereof.

(6)  The Plaintiff do have leave to file evidence in reply, if so advised, in respect of the 2^nd Charging Order and the 3^rd  Charging Order within 14 days hereof.

(7)  No further affirmations to be filed without the leave of the Court.

(8)  Costs of the 2^nd Charging Order and the 3^rd Charging Order be reserved.

(9)  There be liberty to apply.”

Reasons for the Order made

46.  On the issue of costs, in my view, there is no reason why all the costs in relation to the Preliminary Issue should not follow the event. 

47.  §(3) of the Order deals with the costs for the assertion of the Preliminary Issue including the Discovery & Inspection Summons and the Interrogatories Summons; the trial of the Preliminary Issue as defined in the Order of Master Frances Lok SC dated 23 October 2024; and all reserved costs be payable forthwith by D and I, jointly and severally, on an indemnity basis, with certificate for 2 counsel and to be summarily assessed.

48.  The only objections to the above proposed draft costs order suggested by P by Ms Leung and Ms Yau for D and I are: (1) they should not be jointly and severally liable to pay for those costs; (2) there should not be a certificate for 2 counsel; and (3) the actual amount which has been summarily assessed.

49.  Very belatedly, Ms Leung informed the Court that over lunch time she was able to obtain instructions that D is willing to bear all the above costs herself and asks the Court not to make any costs order against her mother, ie I.  She submits that I should not be responsible for any of the costs, whether partly, jointly or severally.  D’s rationale is that since P now has the Property as security against any costs to be payable under the Preliminary Issue and all the related applications, there is no reason why a separate costs order should be imposed on her mother.  Ms Yau made similar submissions on behalf of I.

50.  I disagree.

51.  I very much see this whole saga of raising the Preliminary Issue as yet another “litigation gamesmanship” played by D in order to defeat P’s legitimate request to seek the amount of HK$650,000 costs plus interest to be paid under the Charging Order Nisi.  By colluding with her mother together, they came up with this far-fetched and totally unmeritorious story of somehow it was I who was the beneficial owner of the Property.  This bold assertion was hardly supported by any credible documentary evidence at all disclosed under the affirmations filed by them.  When D and I were asked to produce documents to support their claims and to answer interrogatories about how the agreement and funds to purchase the Property come about, they simply chose to ignore those requests.  They managed to drag this simple matter to pay a modest amount of costs ordered by Anthony Chan J for 16 months without having to pay a single cent for it.  After all the farce, they decided not to appear at the trial to prove the Preliminary Issue.

52.  I therefore find that they both are equally responsible for bringing this whole Preliminary Issue in the first place and maintaining it for the past 16 months or so.  In my opinion, it was very much a “joint effort” between the mother and the daughter.  Without one of them to support each other’s story, this argument on beneficial ownership could not even take off the ground.  I do not see why they should not be both held liable for the costs incurred by P.  I therefore ordered that those costs mentioned in §(3) of the draft order should be borne by them jointly and severally.  I also see little point in making a technical distinction between the relatively small amount of costs incurred by P in dealing with I’s solicitors as contrast to those incurred in dealing with D’s solicitors.  To me, both D and I, as the daughter and the mother, are in this whole scheme of raising and maintaining the unmeritorious claim of beneficial ownership together. I do not see why they should not be held jointly and severally liable for those costs.

53.  For the issue of certificate for 2 counsel, I consider claiming the costs of 2 counsel (where in fact 3 counsel appeared on behalf of P) is perfectly reasonable in the circumstances of this case.  Considering the importance of the Preliminary Issue which will have a huge impact on whether P will likely to be able to recover parts of its costs and the judgment debt that had been granted in its favour so far, I consider the use of senior counsel and an experienced junior counsel is amply justified and proportionate.  I therefore allowed certificate for 2 counsel in this case.

54.  For the summary assessment on the costs itself, I bear in mind that this is for a gross sum assessment and the Court should take a broad brush approach to the figures claimed instead of going through each and every single item as in a taxation hearing.

55.  Having taken into account of the objections raised by Ms Leung and Ms Yau on behalf of their clients, I had summarily assessed the costs for the matters stated under §(3) of the draft order submitted by Mr Lam at HK$1,075,000.00, based on the statement of costs submitted to the Court at the hearing.  Subsequently, on 22 July 2025, P’s solicitors wrote to the Court and stated that in the above statement of costs they had inadvertently omitted counsel’s brief for attending the hearing for the Discovery & Inspection Summons and the Interrogatories Summons heard by the Court on 14 July 2025.  As I had already ordered the costs of those 2 summonses to be paid to P on an indemnity basis on 14 July 2025, it is clear that it was a genuine omission on the part of P.  Since the Court has a general jurisdiction to amend or rectify its order before it is sealed when there are strong reasons to do so: See Sun Jianqiang v Trans-Island Limousine Service Ltd [2004] 1 HKC 533 at §§25-28, I consider inadvertent failure of the parties to draw the Court’s attention to a relevant fact is one of them.  I consider the omission to draw the Court’s attention to the above counsel’s bill is plainly a relevant fact and constitutes strong reason for the Court to amend or rectify the Order made by me at the end of the hearing on 21 July 2025.  In the circumstances, the summarily assessed costs under §(3) of my Order will be amended to a figure of HK$1,300,000.00.

56.  For §(4) of the Order, I directed the Charging Order to Show Cause dated 29 January 2024 to be adjourned to be heard by Deputy High Court Judge Gary Lam on 16 September 2025 at 9:30 am together with the 2^nd Charging Order and the 3^rd Charging Order mentioned therein.

57.  I would like to say a few words about the 2^nd Charging Order and the 3^rd Charging Order here.

58.  The 2^nd Charging Order: Notice to Show Cause was dated 21 July 2025 and supported by the 8^th affirmation of Chan Sin Yuen Sharmaine dated 15 July 2025.  It is basically an ex parte application made by P for a charging order nisi to ask D to show cause based on the debt owed by the D resulting from the 31 different costs orders that the Court has ordered D to pay in these proceedings so far (“the 31 Costs Orders”).  They ranged from small sums like fixed costs of HK$1,040 which D agreed to pay under some consent summonses to large sums up to HK$1.7 million summarily assessed by DHCJ KC Chan as a result of the various decisions and findings made against D.  It is not disputed by Ms Leung that all the costs under the 31 Costs Orders were supposed to be paid forthwith but D has so far not paid any of them.  Not even a single cent.  The total net sum owed by D to P under the 31 Costs Orders added up to a staggering sum of HK$4,362,450.00 With interest, it added up to a sum of HK$4,577,026.61 as of 15 July 2025.

59.  There is no reason in my view why P is not entitled to issue a 2^nd Charging Order to ask D to show cause as to why the outstanding debt under the 31 Costs Orders should not be made absolute, provided sufficient time and notice are given to D to do so.   

60.  For the 3^rd Charging Order: Notice to Show Cause dated 21 July 2025, it is supported by the 9^th affirmation of Chan Siu Yuen Sharmaine dated 17 July 2025.  In short, this is based on the outstanding judgment debt in the sum of HK$220,548,682.00 together with interest pursuant to the Partial Judgment obtained against D on 25 October 2024.  The total outstanding debt owed by D (as judgment debtor) to P (as judgment creditor) including interest in the amount of HK$83,012,436.09 added up to a total sum of HK$303,561,118.09.

61.  No payment has been made by D to settle any part of the outstanding judgment debt and the entirety of the outstanding judgment debt remains wholly unsatisfied by D to date.  This is not disputed by Ms Leung at the hearing.

62.  Although D has lodged an appeal in CACV 495/2024 and CAMP 247/2024 against the Partial Judgment, the substantive hearing of which is fixed on 7 November 2025 to be heard by the Court of Appeal, there is no stay of execution applied for by D. 

63.  Again, I see no reason why P is not entitled to issue the 3^rd Charging Order to ask D to show cause as to why the outstanding debt arising out of the Partial Judgment should not be made absolute, provided sufficient time and notice are given to D to do so.  

64.  Hence, for §(5) of the Order, I allowed D to file affirmation evidence within 28 days instead of the original suggested time of 14 days.  Similarly, I have allowed 14 days for P to file evidence in reply instead of 7 days.

65.  I also added a new §(9) to give parties liberty to apply as requested by Ms Leung.

HCA 1289/2022

[2025] HKCFI 219

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

______________

BETWEEN

______________

__________________________________

REASONS FOR DECISION

__________________________________

1.  I will continue to adopt the expressions and abbreviations used in this court’s Reasons for Decision handed down on 1 November 2024 [2024] HKCFI 3068 (“the November Reasons”) for making, among others, the unless order to enforce the compliance of the Repatriation Order (“the 1^st Unless Order”) upon the Plaintiff’s application by the 1^st Unless Summons. I refer to the recent procedural history in this action as narrated therein without repeating them here.

2.  As mentioned in §§11, 15 and 20(b) and (2) of the November Reasons. The substantive argument of the 2^nd Unless Summons and the remainder of the Leave Summons were adjourned to a date to be fixed. This was the substantive hearing of those 2 matters.

3.  At the conclusion of the hearing, I ordered:

a. In respect of the 2^nd Unless Summons, that unless on or before 4 p.m. on 20 January 2025, Kam complies with paragraph 4 of my Order dated 9 August 2024 and in the event that the part final judgment entered on 25 October 2024 in respect of HK$220,548,682 (Sum A) (“the Part Judgment”) is set aside by the court or Kam is otherwise entitled to defend the claim on the said sum, Kam be debarred from defending this action to the extent of HK$49,586,000 out of the sum as defined in paragraph 3 of the Amended Statement of Claim and P be at liberty to enter against Kam judgment for the said sum of HK$49,586,000 in the form of Annex 2 of the 2^nd Unless Summons as revised; and

b. In respect of the Leave Summons, that, for the avoidance of doubt, P be released from the undertaking given under paragraph 5 of Schedule 2 of the Order of Anthony Chan J dated 13 January 2023 (“the Undertaking”) to the extent of enforcing the Part Judgment anywhere outside this jurisdiction.

4.  After having heard submissions on costs, I ordered that the costs of the 2^nd Unless Summons, including all costs reserved and 75% of the costs of the Leave Summons, also including all costs reserved, be to P with certificate for 2 counsel. The reasons for these 2 costs orders were given orally at the hearing together with directions for their summary assessment.

5.  I said written reasons would be provided, which I now do.

The remainder of the Leave Summons

6.  To recap the immediate background:

a. On around 17 September 2024 and by Kam’s Draft 11^th, P was informed by Kam that the HK$170,962,682 hitherto in D’s Account was allegedly “returned” to SSI by Kam, but Kam claimed to be unable to provide any information whatsoever about the whereabouts of that sum.

b. As P has given the Undertaking, it took out the Leave Summons on 24 September 2024 applying for leave to commence proceedings in Singapore against Kam and/or to commence 3^rd party discovery proceedings against Standard Chartered Singapore and other 3^rdparties in Singapore.

c. At the call-over hearing of the Leave Summons on 27 September 2024 and for the reasons set out in the November Reasons, leave was given to P to commence proceedings for discovery against Standard Chartered Singapore or other relevant 3^rd parties in Singapore.

d. On 27 September 2024, this Court granted the 1^st Unless Order.

e. On 25 October 2024, the Part Judgment was entered upon Kam failing to comply with the 1^st Unless Order.

7.  Mr Timothy Lam, counsel for Kam, in his written submissions strenuously resisted the granting of leave to P to commence fresh proceedings against Kam in Singapore. In gist, he submitted that P was overly aggressive, that it would be oppressive and vexatious to allow P to commence parallel proceedings against Kam in Singapore.

8.  He cited Agritrade Resources Ltd v Ashok Kumar Sahoo[2021] HKCFI 685 in which Deputy High Court Judge To at §138 summarized the guidelines set out in Dadourian Group International Inc v Simms and Others [2006] 1 WLR 2499 for granting permission to enforce a worldwide Mareva order abroad. Those guidelines have been referred to and set out in §34 of the November Reasons.

9.  He stressed that though these guidelines are not intended to be strict jackets (per DHCJ To at §139 in Agritrade Resources Ltd), they should be followed unless there were good reasons justifying otherwise. He submitted that under those guidelines, P should at least proffer evidence as to the applicable law and practice in Singapore, which P has not. P also need to prove that there existed assets belonging to Kam in Singapore, on which presently P has no evidence.

10.  At the hearing, Mr Douglas Lam SC (leading Ms Ho and Ms Kat), counsel for P, clarified and confirmed that as the Part Judgment has been so entered on 27 September 2024, P would now only be seeking by the remainder of the Leave Summons for leave to enforce the Part Judgment in Singapore by, among others, registering the Part Judgment in Singapore under the Reciprocal Enforcement of Foreign Judgments Act 1959 and then taking such enforcement or execution procedures there. In the course of the exchange with the bench, Mr Lam SC further clarified that P was in effect seeking, for the avoidance of doubt, a release from the Undertaking to the extent that P be at liberty to enforce the Part Judgment in other jurisdictions as P might be advised or desire (“the Release”). He explained that as this action was still ongoing and the Mareva Injunction subsisting, it would be proper and necessary for P for the avoidance of doubt to obtain the Release.

11.  As P was merely seeking the Release to enforce the Part Judgment elsewhere (and it was not disputed that Kam did not have sufficient assets in Hong Kong to satisfy the Part Judgment), and not seeking to apply for an interlocutory Mareva injunction elsewhere in addition to the one it obtained in Hong Kong, the above-mentioned guidelines are not applicable or relevant; nor was there any reason for requiring P, as a judgment creditor, to have to satisfactorily prove to this court that Kam has assets in Singapore before the Release would be given. Moreover, Kam could hardly complain that the taking of such steps to execute the Part Judgment, be it in Singapore or elsewhere, was overly aggressive or oppressive.

12.  Mr Timothy Lam then took a procedural objection and complained that hitherto until this hearing P has not so clearly specified its position. However, in §17 of the Affirmation of Wang Guiwu filed on behalf of P on 15 November 2024, Wang has mentioned that P was seeking leave by the remainder of the Leave Summons to enforce the judgment P obtained. In the circumstances, I rejected this procedural objection and released P from the Undertaking in terms set out above, but accepted that some costs spent by Kam for this hearing could have saved had P’s present position been made as clear earlier, and thought it fair to deprive P some of its costs for this hearing.

The 2^nd Unless Summons

13.  Kam has persistently failed to comply with the January 2023 Disclosure Order.

14.  By the 49.5M Disclosure Order given on 6 August 2024, Kam was ordered to comply with the January 2023 Disclosure Order by filing and serving on P within 28 days an affirmation stating, in relation to the remaining part of Sum A in the amount of HK$49,586,000 (HK$220,548,682 - HK$170,962,682), the present location and the recipient(s) of that sum and the location, nature and value of assets which represent in whole or in part or are derived from the proceeds of that sum regardless of whether or not such proceeds are in Kam’s own name and whether they are solely or jointly owned.

15.  There was no dispute that Kam has again failed to comply with the 49.5M Disclosure Order in time or at all.

16.  By the 2^nd Unless Summons, P was seeking to enforce compliance by an unless order to be backed by the sanction of striking out the Amended Defence and entering of final judgment over P’s claims should Kam fail to comply in time.

17.  In his written submissions, Mr Timothy Lam essentially rehashed the arguments Kam made on the last occasion in opposition to the 1^st Unless Summons - that the sanction was draconian, that the sanction served no utility, that P’s claims against Kam consisted of serious allegations of fraud and dishonesty, and that a fair trial was still possible despite Kam’s failure to comply with the 49.5M Disclosure Order.

18.  Save that I accepted that the sanction of judgment should be proportionately confined to the sum of HK$49,685,000 only (which Mr Lam SC readily accepted), I reject all the above arguments for the same reasons I expressed in the November Reasons and in my Decision handed down on 16 December 2024 [2024] HKCFI 3614 refusing Kam leave to appeal against the 1^st Unless Order.

19.  Apart from those arguments, Mr Timothy Lam raised the following contentions.

20.  He contended that as the Part Judgment has already been entered, the sanction to be imposed upon the non-compliance of this 2^ndUnless Order of entering judgment in respect of Sum A (or part of it) would expose Kam to double recovery and was also wrong in principle in that P’s claim over Sum A was already adjudicated and concluded by the Part Judgment and was thus res judicata and that therefore no further judgment could be entered over it. Further or alternatively, he contended that the 2^nd Unless Summons should be adjourned sine die with liberty to restore pending the result of Kam’s appeal against the 1^st Unless Order (and consequentially the Part Judgment).

21.  Mr Lam SC opposed any adjournment pending the outcome of the appeal and was content with terming the sanction such that it would be limited to debarring Kam from defending P’s claim in respect of the sum of HK$49,685,000 and that the sanction would be operative only in the event that Kam has successfully set aside the Part Judgment.

22.  So termed, the sanction would not offend the doctrine of res judicata or subject Kam to the jeopardy of double recovery. I was also satisfied that the sanction so termed was just and proportionate in the circumstances. Thus, there was no reason to adjourn the determination of the 2^nd Unless Summons to await the result of the pending appeal and I rejected Kam’s proposal for adjournment.

23.  I thus granted the unless order in terms as set out in §3 above.

24.  I thank Mr Lam SC, Ms Ho, Ms Sat and Mr Timothy Lam for their assistance.

Mr Douglas Lam SC leading Ms Sabrina Ho and Ms Sakinah Sat, instructed by Messrs PC Woo & Co, for the Plaintiff

Mr Timothy Lam, instructed by Messrs Fung Wong Ng & Lam LLP Solicitors, for the Defendant

HCA 1289/2022

[2024] HKCFI 3614

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

________________________

________________________

________________________

DECISION

________________________

1.  For determination on papers is the Defendant’s summons dated 10 October 2024 applying for leave to appeal against the unless order I made on 27 September 2024, by which I ordered that unless on or before 4:00 p.m. on 25 October 2024 the Defendant pays into Court the sum of HK$170,962,682 in compliance with paragraph 2 of my Order dated 9 August 2024, the Defendant’s Amended Defence in relation to the sum of HK$220,548,682 (Sum A)  be struck out and judgment giving a number of reliefs in respect of Sum A be entered against her (“the Unless Order”).

2.  The Reasons for Decision granting the Unless Order was handed down on 1 November 2024 [2024] HKCFI 3068 (“the Reasons”).  For consistency, I will continue to adopt the terms and abbreviations used in the Reasons.

3.  Upon failure by Kam to comply with the Unless Order, part judgement as aforesaid has been entered against Kam.

4.  Kam in her written submissions stated that her primary position was that her appeal against the Unless Order was as of right and no leave was required.  It was also stated that an appeal was already lodged on 22 November 2024 under CACV 495/2024.  P by a short paragraph in its written submissions submitted that leave was required and cited a number of authorities.  As I am refusing leave substantively as set out below, it is not necessary for me to delve into it any further.

5.  Annexed to Kam’s summons is a draft Notice of Appeal.  In it, Kam raised 3 grounds of appeal.

6.  Of note is that none of the grounds raised seeks to dispute

(a)  my assessment and finding that Kam’s breach of the Repatriation Order was inexcusable, intentional and contumelious, and that her litigation conducts abusive and evident of gamesmanship, the facts and reasons for which were extensively set out in §§22 – 32 of the Reasons;

(b)  particularly, my assessment and view that the form and content of Kam’s Draft 11^th was appalling (§26 of the Reasons)  and that what Kam said in §4 of Kam’s Draft 11^th was disingenuous and hardly believable, and clearly not a full or even meaningful disclosure (§29 of the Reasons); and

(c)  the principles and approach concerning the granting of unless orders as set out in §§39 – 44 of the Reasons.

7.  It is trite that leave will not be granted unless the intended appeal has a reasonable prospect of success or there is some other reason in the interest of justice for the appeal to be heard.

8.  Grounds 1 and 2 can be conveniently dealt with together.  In these 2 Grounds, it was complained that I erred in “failing to consider” the matters listed below.  These matters indeed have been considered by me but I either rejected them altogether or did not consider them of such relevance or weight as would sufficiently sway me to exercise my discretion in refusing to grant the Unless Order.  I will not repeat what I said in the Reasons but would give the reference in respect of each matter.

(a)  That there was no utility in granting the Unless Order (and consequentially, the Unless Order was to punish Kam).  Considered in §45 and §50(a)  of the Reasons.

(b)  That there are “other remedies available to the Plaintiff”, including

i.  bringing committal proceedings against Kam.  Considered in §50(a)  of the Reasons;

ii.  instituting proceedings in Singapore against Kam or against third parties for discovery.  Considered in §49 of the Reasons; and

iii.  enforcing any future judgment against the PRC properties disclosed by Kam.  Considered in §49 of the Reasons.

9.  Ground 3 complains that I erred by failing to consider or give proper weight to the following : (a)  the sanction is disproportionate when the default only related to the repatriation of HK$170,962,682, (b)  the default would not prevent P from having a fair trial, (c)  P’s case involved serious allegations against Kam including fraud, dishonesty etc, (d)  the amount P claims is substantial, and (e)  “the Plaintiff’s position is protected” despite the default in compliance of the Repatriate Order.

10.  I have addressed the question of proportionality in §§44-47 and 51 of the Reasons.  I do not think it is the law that proportionality in this context is to be measured by merely comparing dollar to dollar.  In the overall circumstances of the case, especially Kam’s inexcusable, intentional and contumelious breach and her abusive litigation conducts and the prejudice P would likely suffer due to the failure to comply with the Repatriation Order, I was of the firm view that the sanction imposed was proportionate and just.

11.  A premise unargued but assumed under Kam’s present grounds of appeal and contentions is that the use of unless order with sanction is confined only to ensuring there would be a fair trial procedurally, and the prejudice that P was complaining (alluded to in §45 of the Reasons)  is completely irrelevant or is to be completely ignored.  That premise in my view is not the law.  Rather, I accept the submissions by Ms Ho, citing ORB v Ruhan [2016] EWHC 850 at §178 per Popplewell J that “The interest of a party in seeking an effective and realistic outcome to his litigation, if he succeeds, may be as important in the balance of things” and JSC BTA Bank v Ablyazov & Others [2010] EWCH 2352 at §§41 and 42 per Clark J that “I do not accept that the question is solely whether non-compliance will render further conduct of the proceedings unsatisfactory … the object of the present case is to compensate the bank … by securing a judgment against the wrong-doers which can effectively be enforced so as to make a real recovery.”, that the use of an unless order with sanction is not so narrowly restricted to merely ensuring that there would be a fair trial procedurally, but rather, its use is to ensure and attain the overall justice, including as an important and equally material part of it, that whether the party aggrieved would have an effective and realistic outcome and real recovery.  This Court in §§45 and 50(a)  have alluded to P’s submissions thereon and accepted them as a weighty factor.

12.  Factors (c), (d)  and (e)  of Ground 3 could be factors (among others)  to be considered, which this Court did.  Concerning factors (c)  and (d), I do not agree that they should be so weighty such that a defendant being sued for a very substantial sum on a cause of action involving fraud and dishonest would effectively be treated leniently regarding, if not completely shielded from, the sanction of an unless order.  In such situation, as in the present case, there is much to be said that a plaintiff who has been defrauded of a substantial sum should be afforded the measure to ensure compliance of an unless order by backing it with effective sanction. Conversely, regarding factor (e)  and as I said in §49 of the Reasons, a plaintiff who has “other resorts” should not be disadvantaged in obtaining an unless order backed by sanction in enforcing compliance of an order.

13.  I am of the clear view that in the circumstances of this case, factors (b)  to (e)  were rightly given little or no weight.

14.  In all, there is no reasonable prospect of success for Kam’s intended appeal nor is there any reason in the interest of justice that the intended appeal should be heard.  I thus refuse leave to appeal.

15.  Ms Ho submitted that this application for leave is hopeless and should be visited with disapproval by way of taxation of costs on indemnity basis.  Though I come to a view that this application is of little merits, I do not want to express any disapproval purely on that basis, as the Unless Order with the present sanction does carry serious consequences and a degree of latitude should be afforded to Kam for her to ventilate her stance.

16.  I would order on nisi basis that the costs of this application be to P, to be made absolute in 14 days.  Within 7 days thereafter, and unless there is an application to vary, Kam do lodge and serve her List of Objections to P’s Statement of Costs already lodged and served, and the costs will be summarily assessed on papers.

17.  I thank Ms Ho and Mr Poon and solicitors for Kam for their assistance.

Ms Sabrina Ho and Mr Arthur Poon, instructed by Messrs PC Woo & Co, for the Plaintiff

Messrs Fung Wong Ng & Lam LLP Solicitors, for the Defendant  

HCA 1289/2022

[2024] HKCFI 3069

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

______________

______________

_____________________________________________

DECISION

(on variation of costs orders)

_____________________________________________

1.  There are 2 costs orders in respect of which the parties are seeking variation.

Costs of the Defendant’s summons dated 23 May 2024 seeking the Confidentiality Order (“the Confidentiality Summons”)

2.  On 30 May 2024, this Court dismissed the Confidentiality Summons at the conclusion of the hearing. The Reasons for Decision was handed down on 19 June 2024 ([2024] 4 HKLRD 274), and in §29 thereof I awarded costs to the Plaintiff (“P”). As I have not heard parties fully on costs at the end of that hearing and my Reasons were then not yet given, it was right to treat the said costs order as an order given on nisi basis though it has not been expressly stated as such.

3.  By summons dated 4 July 2024, P first seeks leave to file the summons out of time, and then to vary the costs order such that the costs be assessed summarily and paid forthwith and taxed on indemnity basis with certificate for 2 counsel.

4.  P lodged its written submissions in support dated 30 July 2024 and Kam hers in opposition dated 13 August 2024.

5.  Kam does not object to the summons being filed out of time on the basis that she be awarded the usual costs for seeking extension of time at HK$1,040. D objects to the costs being awarded on indemnity basis and does not agree to a certificate for 2 counsel.

6.  P raised two main points. First, Kam has pursued unarguable, weak or thin points, or points that are plainly wrong in law. Second, that Kam had raised the issue of arbitral confidentiality with Anthony Chan J when P applied for the Mareva Injunction herein and the HCCT Proprietary Injunction in the related proceedings, but was rejected then by the learned judge, it was therefore an abuse for Kam to raise the matter again by the Confidentiality Summons.

7.  I do not accept these 2 points.

8.  Regarding the first, as I said in the Reasons for Decision, while the principles of open justice is well established, the operation and ambit of section 18(2)(a)(i) of the AO was not. I do not regard Kam’s application as so weak that it ought not have been made or so weak as to warrant indemnity costs.

9.  Regarding the second, I do not view the issuance of the Confidentiality Summons as an abuse in that the matter has already been squarely decided by Anthony Chan J. From the judge’s notes, this Court understands that at the time the application for the Mareva Injunction and the HCCT Proprietary Injunction were heard together, the matter of arbitral confidentiality was raised by senior counsel for Kam but was not formally applied for or was fully argued before the learned Judge who considered that the arbitral confidentiality (as the matters stood at the time) would already been sufficiently protected by handing down two separate Decisions and the one concerning the HCCT Proprietary Injunction be not published. Indeed, though this abuse point was raised in P’s written submissions opposing the Confidentiality Summons, it was not seriously pursued at the oral hearing; and this Court did not refuse the application on the basis of an abuse of process but instead went on to hear the application substantively and decided it based on substantive merits.

10.  Therefore, I would not award the costs on indemnity basis.

11.  Though Kam argued against a certificate for 2 counsel, Kam herself engaged Mr Chain SC, and not his junior, to move and argue the application. I consider it appropriate to certify for the attendance of 2 counsel. Summary assessment and payment forthwith thereafter are evidently appropriate and not serious contested. I would so direct.

12.  Disposal :

(a)  The costs order is therefore varied to : Kam do pay P its costs of the Confidentiality Summons to be taxed on party and party basis with certificate for 2 counsel to be assessed summarily and payable forthwith.

(b)  Since the parties have already lodged their respective Statement of Costs and List of Objections, I direct that the summary assessment shall take place together with the summarily assessments of other sets of costs at the hearing at 2:30 pm on 16 December 2024.

(c)  Since each party wins some on this application to vary, the fair costs order for this variation application seems to me would be no order as to costs. I so order on nisi basis to be made absolute in the absence of any application to vary by letter within the next 7 days.

Costs of the Defendant’s summons dated 20 November 2023 for striking out and discharge of the Mareva Injunction (“the Striking Out Summons”)

13.  On 30 May 2024, this Court also dismissed the Striking Out Summons at the conclusion of the hearing. The Reasons for Decision was handed down also on 19 June 2024 ([2024] HKCFI 1658).

14.  At §80 of the Reasons for Decision, I gave my provisional view on the costs of the Striking Out Summons and made the costs order nisi, thus :

“My provisional view is that this application for striking out is clearly without basis and unmeritorious, that Kam 5^th was unreasonable in length and in seeking to present arguments rather than facts and arguing as if this were a trial over those issues, but which eventually were abandoned save but one point, that the resistance against allowing the Plaintiff to refer to the draft amendment is totally unreasonable and unmeritorious, and the application to seek to discharge the Mareva Injunction was based on or consequential upon similar arguments. In the round and provisionally, I consider it clearly appropriate to order Kam to pay the costs of her summons to be taxed on an indemnity basis. I also certify for 2 counsel. I so order on nisi basis which will become absolute in 21 days unless any party applies by summons to vary within that time.

15.  By P’s summons dated 4 July 2024, P seeks to vary the costs order nisi by (a) including in this order the costs reserved under the Order dated 8 December 2023, and (b) for the costs to be summarily assessed and paid forthwith.

16.  By Kam’s summons dated 5 July 2024, she seeks to vary by (a) having the costs be taxed on party and party basis, and (b) giving certificate for one counsel only.

17.  The parties have lodged their respective submissions both dated 30 July 2024, and their reply submissions both dated 13 August 2024.

18.  Kam’s submissions against taxing on indemnity basis are summarized thus :

“What appears to have occurred is that your Lordship simply did not agree that the case is a proper one for striking out. Numerous reasons were given.” (§8 of Kam’s submissions dated 30 July 2024)

19.  Kam also urged that though the late abandonment of the many points may form the basis for awarding indemnity costs as in China Shanshui Cement Group Limited & Others v TianRui (International) Holding Company Limited (HCA 548/2019, [2021] HKCFI 2745, unrep., 13 September 2021), she asked this Court to consider, as in that case, to apportion such that only part of the costs be taxed on indemnity basis and the remaining on party and party basis.

20.  As set out in the Reasons for Decision, this Court held that Kam’s case for striking out was much more unmeritorious than what Kam now contends, namely, that this Court just did not agree that it was a proper case for striking out. To name but 2 matters : (a) this Court at §4 already made reference to the fact that Anthony Chan J has already decided, after a contested hearing in January 2023, that the Plaintiff has a good arguable case, which logically means that it has been decided that the Plaintiff’s case would not be so weak as to bound to fail (which was the basis for Kam’s striking out) and (b) the very key matter of the so called “undisputed evidence” relied on by Kam for the striking out was far from “undisputed”, and was clearly and evidently disputed and disputable such that it evidently did not justify a striking out (§§40-49). In my view, the striking out application ought not have been taken out.

21.  Moreover, there were also the other conducts I set out in §80 of the Reasons (which I need not repeat or elaborate here) over which Kam has not sought to respond to here.

22.  In my view, this is a case that amply justify awarding costs on indemnity basis.

23.  I do not find at all appropriate the approach advocated by Kam to apportion part of the costs to be taxed on indemnity basis and part of the costs on party and party basis. Kam abandoned 7 out of the 8 points elaborately argued in Kam 5^th, and importantly, they were abandoned so late that the time and costs spent by P in preparing to deal with them at the hearing were already spent. There is thus little meaning or utility in awarding, say, only 7/8 of the costs to be taxed on indemnity basis. Moreover, there were the other conducts such that together they fully justify, in my view, the taxation of the entire costs on indemnity basis. So far as actual hearing time that were saved by the late abandonment, Kam would be entitled to the savings in costs even when taxed on indemnity basis.

24.  Next, I must reject the contention that the matter justified only certifying for one counsel. As Kam herself acknowledged, she engaged Mr Chain SC and his junior. The complexity of the matter and the amount involved clearly justified engaging 2 counsel. I do not think any more need to be said in this regard.

25.  Summary assessment and the costs payable forthwith are clearly justified and not seriously contested by Kam. I would so direct. Kam did not contest against including the costs reserved under the Order dated 8 December 2023.

26.  Disposal:

(a)  The costs order is therefore varied to : Kam do pay P its costs of the Striking Out Summons, including the costs reserved under the Order dated 8 December 2023, to be taxed on indemnity basis with certificate for 2 counsel to be assessed summarily and payable forthwith.

(b)  Likewise, the parties have already lodged their respective Statement of Costs and List of Objections, I direct that the summary assessment shall take place together with the summarily assessments of other sets of costs at the hearing at 2:30 pm on 16 December 2024.

(c)  P is clearly the winner and on nisi basis Kam do pay P its costs of the 2 variation summonses, which will become absolute in the absence of any application to vary by letter within the next 7 days. Such costs are also to be assessed summarily on 16 December 2024.

For that purpose, P do lodge and serve its Statements of Costs within 7 days after the costs order nisi becomes absolute and Kam to lodge her Lists of Objections 7 days after.

Messrs. PC Woo & Co, for the Plaintiff

Messrs. W.K To & Co, for the Defendant

HCA 1289/2022

[2024] HKCFI 3068

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

______________

______________

__________________________________

R E A S O N S   F O R   D E C I S I O N

__________________________________

1.  This Court has heard a number of interlocutory applications in this action in which the Plaintiff claims against the Defendant for fraud, dishonest assistance and conspiracy to injure by unlawful means to recover the total amounts transferred on 1 November 2019 in the total sum of HK$220,548,682 (being Sum A) and on 20 February 2020 in the total sum of HK$32,500,000 (being Sum B), or alternatively damages.

2.  Relevant to the matter at hand is the order I made on 9 August 2024 (“the 9 Aug Order”) upon the Plaintiff’s application by summons dated 8 February 2024, the Reasons for Decision of which was handed down on 22 August 2024 ([2024] HKCFI 2194). Hereinbelow, I will continue to adopt the abbreviations used therein.

3.  By the 9 August Order, this Court

a.  restrains Kam from (save for complying with the Repatriation Order) disposing of or dealing with Sum A and Sum B or any traceable proceeds thereof, including the sum of HK$170,962,682 held in D’s Account in Standard Chartered Singapore as on 22 February 2023 (“the Proprietary Injunction”);

b.  orders Kam to pay into court within 14 days the sum of HK$170,962,682 held in D’s Account; (“the Repatriation Order”); and

c.  orders Kam to comply with the January 2023 Disclosure Order by filing and serving on the Plaintiff within 28 days an affirmation stating, in relation to the remaining part of Sum A in the amount of HK$49,586,000 (HK$220,548,682 - HK$170,962,682), the present location and the recipient(s) of that sum and the location, nature and value of assets which represent in whole or in part or are derived from the proceeds of that sum regardless of whether or not such proceeds are in Kam’s own name and whether they are solely or jointly owned (“the 49.5M Disclosure Order”).

4.  On 23 August 2024, the last day for complying with the Repatriation Order, Kam issued 2 summonses (together “Kam’s Appeal and Stay Summonses”) respectively applying for

a.  leave to appeal against the 9 Aug Order; and

b.  a stay of execution of the 9 Aug Order pending appeal.

5.  The Repatriation Order was not complied with by Kam by 23 August 2024 or at all.

6.  On 26 August 2024, P took out a summons to enforce the compliance of the Repatriation Order by an order that unless Kam duly pays into Court within 3 days the sum of HK$170,962,682, her Amended Defence be struck out and judgment be entered against her (“1^st Unless Summons”).

7.  The 1^st Unless Summons was returnable before me 3 days later on 29 August 2024. On that occasion, without offering any explanation whatsoever as to why she had failed to comply with the Repatriation Order, Kam through her counsel Mr Acorn Lam urged that directions be given for her to file evidence to oppose (but was unable to indicate the nature or broad effect of the evidence when enquired by the bench) and that the 1^st Unless Summons be heard together with Kam’s Appeal and Stay Summonses, which was scheduled to be heard on 28 October 2024. Mr Acorn Lam relied heavily on the fact that there was a pending application for leave to appeal and stay pending appeal. Upon taking that into account and the fact that Mr Acorn Lam indicated, after having stood down the matter for him to confirm instructions from Kam, that Kam would be able to file a short affirmation on or before 4:00pm on 5 September 2024 (“Kam’s Assurance Affirmation”) confirming that the HK$170,962,682 currently still remained in D’s Account and exhibiting documentary proof thereto, including bank statements, I acceded to Kam’s proposed directions, but gave liberty to P to restore the 1^st Unless Summons for hearing at an early date if Kam filed to file Kam’s Assurance Affirmation in time.

8.  Despite having indicated on 29 August 2024 that she would do so, Kam failed to file Kam’s Assurance Affirmation on 5 September 2024 or at all. No explanation of the failure was even offered at any point.

9.  Kam also failed to comply with the 49.5M Disclosure Order on or before 6 September 2024, or at all.

10.  The 1^st Unless Summons was then restored to be heard before me on 12 September 2024. Kam this time appeared by Mr Abraham Chan SC (leading Mr Lam and Mr Lau). Mr Chan essentially submitted that (a) the sanction applied to be imposed by the 1^st Unless Summons was draconian, (b) the time directed by me on 29 August 2024 for Kam to file her affirmation in opposition, which was on or before 19 September 2024, has not expired, (c) despite again unable to proffer any information as to what Kam might depose to, Kam should be given a chance to file her evidence, and (d) the matter should be adjourned for a substantive hearing for Kam to argue whether such sanction ought to be imposed, and if so, on what terms. Having also heard Mr Lam SC, counsel for P, this Court accepted Mr Chan’s submissions. Having discussed with counsel for both sides who agreed to such directions, I directed under an unless order that Kam do file her affirmation in opposition to the 1^st Unless Summons and in support of Kam’s Appeal and Stay Summonses (which she has not yet filed despite time to do so has expired) on or before 4:00 pm on 17 September 2024 and that the hearing date of the 1^st Unless Summons and Kam’s Appeal and Stay Summonses be moved up to 27 September 2024.

11.  On 16 September 2024, P took out another summons to apply for another unless order to enforce the compliance of the 49.5M Disclosure Order, that unless she so complies within 14 days, she be debarred from defending this action, her Amended Defence be struck out and judgment be entered against her (“2^nd Unless Summons”).

12.  On 17 September 2024, the last day for Kam to file her affirmation evidence, Kam’s solicitors filed an affirmation exhibiting a draft undated and unsigned 11^th affirmation of Kam (“Kam’s Draft 11^th”) which, among others, purported to disclose in §4 thereof, alarmingly, that the sum of HK$170,962,682 was no longer kept in D’s Account, thus:

“4. 關於港幣 170,962,682元款項，在原告人多次去信渣打銀行(新加坡)有限公司提出質詢及要求後，該行關閉了戶口號碼為 6527563202的戶口。由于該筆款項一直由本人代Sunshine Success International LP (“SSLP”) 持有，本人在無可奈何的情況下將該筆款項交回SSLP。然而，基於本人目前已不再參與SSLP及SSGI的任何事務，本人無法了解該筆款項的去向。”

13.  I should also mention that in §5 of Kam’s Draft 11^th, Kam listed out the addresses of 10 properties in Mainland said to be owned by her and in the total value of RMB 210,000,000, and said that the Plaintiff might later enforce the judgment in this action against them should its claim eventually prevail, and in §6 of Kam’s Draft 11^th, Kam sought to explain that the 49.5M Disclosure Order was not complied with because she had recently changed her legal team.

14.  Then on 23 September 2024, Kam by her solicitors’ letter proposed to withdraw Kam’s Appeal and Stay Summonses. A consent summons was filed to that effect one day before this hearing.

15.  On 24 September 2024, P took out a summons applying for leave to commence proceedings in Singapore against Kam and/or to commence 3^rd party discovery proceedings against Standard Chartered Singapore and other third parties (“the Leave Summons”).

16.  The 2^nd Unless Summons and the Leave Summons were returnable before me at this hearing.

17.  At the hearing, leave for the withdrawal of Kam’s Appeal and Stay Summonses was formally given, and having heard submissions, I ordered the costs of Kam’s Appeal and Stay Summonses be paid by Kam taxed on indemnity basis with certificate for 2 counsel to be summarily assessed. Reasons for this costs order were given orally at the hearing.

18.  Then after some discussions on procedural matters between the bench, Mr Lam SC (leading Ms Ho and Ms Sat), counsel for P and Mr Chan SC (leading Mr Lam and Mr Lau),

a.  Mr Lam confirmed that P would not be seeking on this occasion a substantive order on the 2^nd Unless Summons and the Leave Summons insofar as concerning leave to commence proceedings against Kam in Singapore, and that directions on them be given; but P would pursue at this hearing leave to commence proceedings in Singapore for discovery; and

b.  Mr Chan did not further maintain that the substantive hearing of the 1^st Unless Summons should be adjourned to be heard with, or after, this Court has decided on the Leave Summons.

19.  For determination therefore was whether the unless order sought by 1^st Unless Summons should be granted, and if so, on what terms, and whether leave to commence discovery proceedings in Singapore against Standard Chartered Singapore or other third parties should be granted.

20.  At the conclusion of the hearing, I

a.  granted an unless order largely in terms of paragraph 1 of the 1^st Unless Summons save that the deadline was changed to “on or before 4:00pm on 25 October 2024” and that in default, Kam’s Amended Defence be struck out and judgment be entered not in respect of the Plaintiff’s whole claim but only “in relation to Sum A, being HK$220,548,682”;

b.  made an order in terms of the Leave Summons limited to instituting proceedings for discovery against Standard Chartered Singapore or other relevant 3^rd parties in Singapore, with the remainder of that summons to be argued substantively with the 2^nd Unless Summons;

c.  in respect of the 2^nd Unless Summons, gave directions for the filing of evidence and the fixing of the date for its substantive argument together with the remainder of the Leave Summons;

d.  having heard submissions thereon, reserved the question of whether the costs of the 1^st Unless Summons should be taxed on indemnity basis, it being agreed that Kam should bear the instance of such costs.

21.  These are my reasons for the above orders and decision on the basis of taxation of the costs of the 1^st Unless Summons.

Kam’s breach of the Repatriation Order was inexcusable, intentional and contumelious; and her litigation conducts abusive

22.  In its written submissions, the Plaintiff has set out extensively the relevant procedural history, and the assurances given by Kam on oath and by her counsel in court that the sum of HK$170,962,682 and US$6,300,000 will continue to remain in D’s Account pending the outcome of the Arbitration and this action. The Plaintiff then submitted that Kam’s breach of the Repatriation Order was blatant, inexcusable, intentional and contumelious, and that her litigation conducts were abusive. The Plaintiff has also been repeatedly pointing out since the hearing on 29 August 2024, which was an undisputed fact, that Kam has offered no explanation whatsoever about her non-compliance despite repeatedly seeking, and was given, time to file evidence.

23.  In the written submission lodged on her behalf and in Mr Chan’s oral submissions, no submission was made to contest the Plaintiff’s said submission. Mr Chan, advocating the best he could for Kam, reminded this Court that it should be slow and cautious in coming to adverse findings of Kam’s conducts. Such reminder of course was always pertinent. In fact, this Court has always bore that very much in mind with or without the reminder.

24.  That said, on present materials and for reasons expressed below, and not unreluctantly, this Court formed the clear view that Kam has consciously decided not to comply with the Repatriation Order (and possibly the Mareva Injunction, the HCCT Proprietary Injunction and the Proprietary Injunction), and that her breach was flagrant, inexcusable, contumelious, and her litigation conducts were abusive and evident of litigation gamesmanship as the Plaintiff complained.

25.  Firstly, I accept the Plaintiff’s submissions that Kam has repeatedly gave the Court (and the Plaintiff) express assurances that (a) the sum of HK$170,962,682 and US$6,300,000 were remaining, at the time the assurances were made, and will remain, in D’s Account pending the outcome of the Arbitration and this action, and (b) she was subject to the Mareva Injunction and the HCCT Proprietary Injunction not to remove the money from D’s Account. Mr Lam (and his juniors) have helpfully listed, referenced and quoted the sources of all such express assurances in Annex 1 to his written submissions, which consists of 3 full pages. They were not contested by Kam. I do not need to refer to all of them here, suffice it to mention the more recent ones :

a.  In Kam’s 10^th Affirmation dated 5 August 2024 (filed in opposition to the Plaintiff’s application for the Proprietary Injunction and the Repatriation Order), in §§44 and 45 thereof, Kam said on oath emphatically that since her solicitors’ letter dated 17 January 2023 she had repeated assured in this action and in the Arbitration that “the sums of HK$170,962,682 and US$6,300,000 continue to remain in that account pending the outcome of the Arbitration and this action”;

b.  Senior counsel appearing at the 9 August 2024 hearing for Kam (not Mr Chan) repeatedly stressed that Kam has repeatedly stated and assured that the money was and would remain in D’s Account and that the injunctive relief in place was already effective in preventing any dissipation or interference; and

c.  At the hearing on 29 August 2024 and after having taken instructions from Kam, Mr Acorn Lam, then counsel for Kam, on behalf of Kam stated to this Court that Kam was prepared to file Kam’s Assurance Affirmation to confirm that the money was still in D’s Account.

26.  Secondly, and as said, despite Kam herself repeatedly asked for and was given time to file evidence, and therefore was afforded proper and ample opportunity to explain, Kam never filed any, but only on the last day purportedly adduced Kam’s Draft 11^th. However, and as submitted by Mr Lam, which I accept, the form and content of Kam Draft 11^th was appalling. It was only exhibited as a draft to her solicitor’s affirmation. It is beyond understanding, nor was it explained, as to why it was not even signed. I consider this matter against the background that in the 6 hearings before this Court since 30 May 2024, Kam has been repeatedly changing her legal representations. In the hearings before me since and including 30 May 2024, she was represented by 4 different firms of solicitors and 5 different teams of counsel. It is thus of particular importance that the factual matters to be relied on by Kam are to be properly affirmed to on oath by her, which was clearly not the case in respect of Kam’s Draft 11^th.

27.  Thirdly, Draft Kam 11^th not only did not offer any explanation for non-compliance of the Proprietary Order, but in fact said that the HK$170,962,682 and US$6,300,000 have been dissipated from D’s Account.

28.  Fourthly, such dissipation of the money was (a) contrary to the said assurances Kam has been making to the Court and to the Plaintiff, (b) on its face was a direct breach of the Proprietary Injunction granted by this Court on 9 August 2024, and (c) a potential breach of the HCCT Proprietary Injunction. Such dissipation clearly calls for a detail and full explanation.

29.  Yet and fifthly, what she said in §4 of Draft Kam 11^th is disingenuous and hardly believable, and clearly not a full or even meaningful disclosure:

a.  D’s Account was held in Kam’s personal name, even if it were closed, as alleged, it must be Kam herself who would be signing the mandate to transfer the money into whichever immediate bank account or whatever destination (regardless of whether directly to an account held by SSI or ultimately reaching SSI, as alleged). Standard Chartered Singapore clearly was not entitled to transfer away the money in D’s Account without Kam’s authority. It is thus completely disingenuous and unbelievable for her to even claim that “本人無法了解該筆款項的去向”.

b.  Not only was the destination of the money not divulged, there were no details whatsoever given by Kam regarding the date D’s Account was closed, and how, when and to whom (in terms of name of the holder of the destination account) the money was sent. The date is particularly important as this Court has on 9 August 2024 imposed the Proprietary Injunction against her.

c.  Also importantly, upon an account being closed by a bank and money transferred out, there must have been documentations. But none whatsoever was exhibited or produced. The only inference is therefore that Kam is suppressing their production. In this regard, at the hearing on 29 August 2024, this Court has indicated that Kam must produce documentary proof in Kam’s Assurance Affirmation and this Court indeed has discussed specifically with Mr Acorn Lam as to the specific bank documents to produce. Instructions were then sought by Kam’s legal team when the hearing was stood down and Kam indicated through counsel that she was prepared to file that affirmation and produce those bank statements. Kam therefore must have been appraised of the need and importance to produce documentary proof, even if she did not already know earlier.

d.  She said the reason for the closure of D’s account was P’s enquiries with Standard Chartered Singapore. The materials and evidence now are that such enquiries were made in 2023. It would not have explained such recent closure of D’s Account, if it indeed was recent at all.

e.  There was no explanation whatsoever as to why she was in any way compelled to “return the money to SSI”. Her claim of so-called “無可奈何” is completely unsubstantiated.

30.  Sixthly, I also accept, as has been pointed out by Mr Lam, that in §2(c) of the draft Notice of Appeal against the 9 August Order attached to Kam’s summons dated 23 August 2024, Kam complained that this Court erred in failing “to consider the less oppressive option of transferring the sum into the Defendant’s own bank account within the jurisdiction”, which therefore implied that such option was still open to her as on 23 August 2024, which is wholly inconsistent with her apparent stance in Draft Kam 11^th that the money has been transferred away beyond her knowledge or control before she could have complied with the Repatriation Order.

31.  Seventhly and similarly, in light of Kam counsel’s indication on 29 August 2024 that Kam was prepared to file Kam’s Assurance Affirmation, it also indicated that the money was still in D’s Account as on that date. That would suggest that Kam has purposefully and intentionally flouted the Repatriation Order (and breached the Proprietary Injunction) and is now making up a feeble excuse in Draft Kam 11^th.

32.  Lastly, despite the expiry of time and then given further time to file affirmation evidence in support of Kam’s Leave and Stay Summonses, Kam never filed any, but only indicated days before the same was due for substantive hearing that she would be withdrawing them. I accept Mr Lam’s submissions that taken together with the other conducts of Kam as alluded to above, it showed that Kam’s Leave and Stay Summonses were not taken out in good faith and was merely used as a ploy to buy time, and such conducts were abusive in nature.

Leave to commence proceeding in Singapore for discovery clearly called for

33.  It is common ground that in obtaining the Mareva Injunction from Anthony Chan J in January 2023 against Kam, the Plkaintiff has given the Court an undertaking to the effect that that it will not without leave of the Court begin proceedings against Kam in any other jurisdiction or to seek to enforce the Mareva Injunction outside Hong Kong. Hence, the Leave Summons.

34.  It is not disputed between Mr Lam and Mr Chan that the relevant principles were summarized in Agritrade Resources Ltd v Ashok Kumar Sahoo[2021] HKCFI 685 at §138 to 139 where DHCJ To adopted the guidelines set out by Arden LJ (as she then was) in Dadourian Group International Inc v Simms [2006] 1 WLR 2499 at §25 , namely,

“(1) The grant of permission should be just and convenient for the purpose of ensuring the effectiveness of the worldwide freezing order and the addition that it is not oppressive to the parties to the local proceedings or to third parties who may be joined to the foreign proceedings;

(2) All relevant circumstances and options need to be considered. In particular, consideration should be given to granting relief on terms, for example, terms as to the extension to third parties with the undertaking to compensate for costs incurred as a result of the worldwide freezing order and as to the type of proceedings that may be commenced abroad, proportionality of the steps proposed to be taken abroad and in addition to the form of any order;

(3) The interests of the applicant should be balanced against the interests of the other parties to the proceedings and any new party likely to be joined to the foreign proceedings;

(4) Permission should not normally be given in terms that would enable the applicant to obtain relief in the foreign proceedings which is superior to the relief given by the worldwide freezing order;

(5) The evidence in support of the application for permission should contain all the information so far as it can reasonably be obtained in the time available necessary to enable the judge to reach an informed decision including evidence as to the applicable law and practice in the foreign court, evidence as to the nature of the proposed proceedings to be commenced and evidence as to the assets believed to be located in the jurisdiction of the foreign court and the names of the parties by whom such assets are held;

(6) The standard of proof as to the existence of assets that are both within the worldwide freezing order and within the jurisdiction of the foreign court is a real prospect, that is, the applicant must show that there is a real prospect that such assets are located within the jurisdiction of the foreign court in question;

(7) There must be evidence of a risk of dissipation of the assets in question;”

35.  I bore these principles in mind in considering the leave sought at this hearing, which was only confined to commencing discovery proceedings in Singapore so that the Plaintiff might trace the money.

36.  As alluded to above, despite the Plaintiff having obtained in Hong Kong the Mareva Injunction, the HCCT Proprietary Injunction, the Proprietary Injunction and the Repatriation Order, and despite Kam’s said repeated assurances and repeated contentions that there was no risk of dissipation, the alarming fact now, as it turns out, is that the HK$170,962,682 in D’s Account thought to have been frozen there is gone, and Kam refused to divulge its whereabouts, but claimed, most incredibly and disingenuously, that she was “unable to understand” where the money has gone (“本人無法了解該筆款項的去向”). Moreover, Kam has also flouted the 49.5M Disclosure Order.

37.  Kam having so flouted these orders and dissipated the money as aforesaid, it was clearly just and convenient for the purpose of ensuring the effectiveness of these orders to grant the leave. It clearly would not be oppressive to Kam, or SSGI or SSGI. Indeed, in light of Kam’s flagrant, intentional and contumelious breaches and abusive conducts, it lay very ill in her mouth to even to begin to complain of any oppression. It was evident that any further delay in granting this leave would only jeopardize the interest of the Plaintiff in locating and tracing these sums over which it has been making a proprietary claim.

38.  I thus had no hesitation to conclude at the hearing that it was not only just and convenient, but indeed expedient, to grant to the Plaintiff the leave to commence discovery proceedings in Singapore.

An unless order enforcing compliance of the Repatriation Order

39.  The starting point must be that court orders are to be complied with. An unless order backed by sanction is a common and rudimentarily measure to coerce compliance.

40.  The importance to have effective powers and sanctions to ensure compliance of court orders cannot be overstated. It has been vividly highlighted by Rix LJ in JSC BTA Bank v Ablyazov [2013] 2 All ER 414 at §188 :

“The authorities demonstrate that it is vital for the court, in the interests of justice, to have effective powers, and effective sanctions. Without these, it would be possible for a defendant (or, in a different situation, a claimant) to flout the orders of the court, which are the court’s considered means by which to keep the scales of justice for the parties even. If once it became known that the court was unable or unwilling to maintain the effectiveness of its orders, then it would lose all control over litigation of this kind, with terrible consequences for the administration of justice. Those wrongly accused of fraud would be relieved of a certain amount of inconvenience, but fraudsters would rejoice and hitch a free ride to interminable litigation on the back of ill-gotten gains.”

41.  The above observation of Rix LJ was approved and applied by Chow J (as the learned JA then was) in China Metal Recycling (Holidays) Limited v Chun Chi Wai (HCA 1412/2013, unrep., 17 November 2014) in the context of enforcing the compliance of a discovery order against the defendants by an unless order backed by the sanction of striking out the defence and entering judgment. The Plaintiff has also cited other cases in which similar unless orders as the one now sought were granted. I do not think I need to refer to them in any detail, as quite clearly whether to grant such an unless order is very fact-sensitive and often nuanced, and each case must be considered on its own facts and circumstances.

42.  Certain general principles were not disputed :

a.  An unless order is an order of last resort.

b.  It is generally more appropriate where there is a history of failure to comply, or where the default is deliberate, contumelious, or the inexcusable.

c.  However, when there is flagrant breach of an order, the fact that there is no history of disobedience of court orders would count for very little (per Kwan JA (as the learned VP then was) in Bruce James Stinsonv Gu Ming Gao CACV 61/2017, unrep., 12 January 2018 §63).

d.  The sanction that accompanies an unless order must be commensurate with the default in question and meet the justice of the case (AXA China Region Insurance Co Ltd & Another v Pacific Century Insurance Co Ltd & Others (No 2) [2005] 3 HKC 359, at 379C, per Chu J (as the learned VP then was)).

43.  Mr Chan placed reliance on the guidelines for a “more calibrated use” of an unless order set out in the Singapore Court of Appeal case of Mitora Pte Ltd v Agritrade International (Pte) Ltd [2013] 3 SLR 1179 cited in §58 of the judgment in Bruce James Stinson, which was not disputed by Mr Lam:

“(a) ‘unless orders’ stipulating the consequence of dismissal should not be given as a matter of course but as a last resort when the defaulter’s conduct is inexcusable;

(b) the conditions appended to ‘unless orders’ should as far as possible be tailored to the prejudice which would be suffered should there be non-compliance; and

(c) other means of penalising contumelious or persistent breaches are available, including but not limited to

(i) awarding costs on an indemnity basis;

(ii) ordering the payment of the plaintiff’s claim or part thereof into court where the defaulting party is a defendant …;

(iii) striking out relevant portions of the defaulting party’s statement of claim or defence rather than the whole;

(iv) barring the defaulting party from adducing certain classes of evidence or calling related witnesses; and

(v) raising adverse inferences against the defaulting party at trial.”

44.  Mr Lam submitted that the sanction of striking out a defence and entering judgment is suitable and proportionate where the failure to comply effectively deprive the affected litigant his substantive rights on account of the default, citing §58 to 65 of the judgment in Bruce James Stinson. Particularly, Kwan JA (as the learned VP then was) observed in §64 :

“ … Where a litigant’s conduct puts the fairness of the trial in jeopardy, such that any judgment in favour of that litigant would have to be regarded as unsafe, or where it amounts to such an abuse of process as to render further proceedings unsatisfactory and to prevent the court from doing justice, the court is entitled to refuse to allow that litigant to take further part in the proceedings.”

45.  Mr Lam emphasized that, not only was Kam’s default deliberate, contumelious and flagrant, her failure to comply with the Repatriation Order was not a mere procedural default, but the default would affect the Plaintiff’s substantive rights in that Kam has been consistently employing her litigation gamesmanship requiring the Plaintiff to expend much more time and costs than were otherwise necessary and reasonable in seeking its redress, and when the subject money (over which the Plaintiff has a proprietary claim) is not secured, it is very likely that at the end of the day when all these costs and time were spent, the Plaintiff would only have obtained an empty judgment.

46.  Mr Chan raised the point that the sanction for default of the unless order of striking out the entire Defence and entering judgment against Kam on both Sums A and B was disproportionate in that the Repatriation Order covered only the majority of Sum A. Mr Lam has, indeed and very fairly, already acknowledged the validity of this point at the hearing on 12 September 2024, and at this hearing readily agreed to tailor down the sanction upon default to striking out the Defence and entering judgment in respect of Sum A only.

47.  Mr Chan advocating as much as he could on behalf of Kam against the granting of the unless order in the tailored-down form and submitted :

a.  The purpose of the unless order is not to penalize Kam.

b.  As such an order is one of last resort, and there are other resorts in the present case in that the Plaintiff could and is intending to commence proceedings against Kam in Singapore, that Kam has voluntarily provided information of her assets in Mainland for the Plaintiff to enforce its judgment should it prevail at the end of the day.

c.  The unless order sought is inappropriate or is not proportionate as under the guidelines set out in paragraph 43 above, there are other options available to deal with the present default, including

i.  contempt proceedings against Kam (as in VIS Trading Co Ltd v Nazarov & Others [2015] EWHC 3327), and at present there is nothing to indicate contempt proceedings against Kam would be futile;

ii.  imposing the sanction of awarding indemnity costs against Kam; and

iii.  imposing the sanction of debarring Kam from filing witness statement or otherwise proffering evidence in support of her defence case.

d.  Enforcing compliance with the Repatriation Order is not an end in itself, and in the interest of administration of justice, putting in place orders and arrangements for the trial to take place at the earliest possible date would better serve the interest of justice.

48.  Without any disrespect to Mr Chan, I do not find it necessary to refer to or analyse the many authorities he cited as examples where no unless orders were given or other sanctions were imposed upon default, as I have said, such cases were decided on their own particular set of facts and considerations. Suffice to mention that it was not said that any of those cases bear closely similar circumstances as in the present one. In my view, this Court is guided by the general principles set out above and must assess the matter on the facts and considerations before it.

49.  I do not accept the submission that the availability of “other resorts” to the Plaintiff would make the unless order inappropriate. When one refers to an unless order being an order of last resort, one is talking about the last resort to ensure compliance of that court order. It should not be confused with the resorts available to the Plaintiff to pursue his claim or to enforce the judgment he might ultimately obtain. Otherwise and following the logic of such contention and if it were accepted, it would mean that for a plaintiff who has an opportunity to pursue a claim in a different jurisdiction or has the means to enforce the judgment, he would thereby be disadvantaged in, if not altogether be denied from (though a court order was flouted and the situation otherwise warrants it), obtaining the imposition of the sanction of “refuse[ing] to allow that litigant to take further part in the proceedings”, as Kwan VP put it in Bruce James Stinson. Such cannot be right.

50.  For the following reasons, I take the view that in the present circumstances the other options/sanctions advocated by Mr Chan for Kam are clearly inappropriate, if not wrong :

a.  Leaving the Plaintiff to initiate contempt proceedings would not redress the fact and manner that the Plaintiff’s substantive rights are affected, namely, that the Plaintiff would be put to the futile expenditure of much time and costs (and potentially an inordinate amount due to Kam’s litigation gamesmanship) to obtain but an empty judgment. Moreover and practically, Kam has been outside of the jurisdiction at all times since the commencing of this action. Contempt proceedings would very well end up as another fruitless but expensive chase on the side on the part of the Plaintiff. It plays further into Kam’s gamesmanship and prejudices the Plaintiff further.

b.  Likewise, barring Kam from further proffering evidence means that the Plaintiff nevertheless would be required to further spend time and costs in prosecuting this action before it could obtain a judgment. Moreover, in principle, Mr Chan is right in limiting the sanction to Sum A only, therefore the sanction would have to be debarring Kam from filing witness statement and proffering evidence in respect of her case on Sum A only, and not in respect of Sum B. This would create much potential for dispute on a practical level with the attendant time and costs, and therefore further prejudices the Plaintiff.

c.  This Court has, in respect of a number of interlocutory matters, considered as appropriate and has ordered costs to be paid by Kam on indemnity basis. Such did not seem to have any effect on her insofar as ensuring compliance of court orders is concerned.

d.  The fact that there are other appropriate measures already available to serve the interest of justice in a particular case, like directions for a speedy trial as Kam now advocates, evidently could not be an excuse that a defaulter can point to and say that therefore no sanction should be imposed upon me for my non-compliance. With respect, such contention needs to be stated to be dismissed.

51.  It is very evident to me that in view of Kam’s such contumelious and flagrant breach and the manner that the Plaintiff’s substantive rights are thereby affected, that the unless order with the said tailored-down sanction now sought by the Plaintiff is just, appropriate and proportionate.

Costs of the 1^st Unless Summons be taxed on party and party basis; and other costs related matters

52.  At the hearing, Mr Lam relied on and highlighted Kam’s conducts already alluded to above and sought indemnity costs. Mr Chan submitted that in light of the draconian sanction and despite Kam has been in breach, she was entitled to be heard to oppose the 1^st Unless Summons, and by her contesting it, it did bring about the exclusion of Sum B from the sanction, which was not insubstantial, even though such was not serious contested by the Plaintiff at the hearing. Mr Chan also referred to the fact that in the number of cases cited before me where similar unless orders were given, indemnity costs were not awarded against the defaulter who contested unsuccessfully the application of the unless order.

53.  This Court is unfavourably impressed by the fact and manner that Kam breached the Repatriation Order and by her litigation gamesmanship, to put it mildly. However, I think Mr Chan’s submission has some force. Confining to considering only Kam’s conduct after the 1^st Unless Summons was issued, I would take into account : (a) Kam indicated that she was prepared to file Kam’s Assurance Affirmation, but she didn’t, possibly as another ploy to buy time and necessitated the Plaintiff restoring the matter and another directions hearing, (b) the form of Draft Kam 11^th is appalling and its contents are not merit of belief, and (c) points of opposition were raised and some were weak to the point of being close to unarguable, but I am not quite prepared to say that they ought not have been raised in the first place (d) yet and rather weightily in my mind, Kam’s opposition effectively brought about the exclusion of Sum B in that if there were no opposition, the Plaintiff might have obtained a sanction covering the entire claim.

54.  Considering that I would be assessing the costs summarily and would be very much minded in the circumstances to allow the costs occasioned by restoring the matter for an early hearing and the fees of senior counsel for attending both the hearings on 29 August 2024 and 12 September 2024, I am persuaded by Mr Chan by a thin margin that indemnity costs might not be entirely appropriate. I would therefore order the costs of the 1^st Unless Summons be paid by Kam on party and party basis.

55.  Concerning this set of costs and the costs of Kam’s Appeal and Stay Summonses, the Plaintiff is to lodge and serve its Statements of Costs within 7 days, Kam to lodge and serve her Lists of Objections within the next 7 days, and the Plaintiff may lodge and serve its respective Replies within 3 days thereafter.

56.  At the hearing, I have discussed with the parties and ordered that the summary assessments of the other outstanding sets of costs shall be conducted together at a hearing before me, which is now scheduled to take place on 16 December 2024. The summary assessments of the costs of the 1^st Unless Summons and Kam’s Appeal and Stay Summonses shall also be conducted at the same hearing.

57.  Lastly, I thank Mr Lam and Mr Chan and their juniors for their assistance.

Mr Douglas Lam SC leading Ms Sabrina Ho and Ms Sakinah Sat, instructed by Messrs PC Woo & Co, for the Plaintiff

Mr Abraham Chan SC leading and Mr Timothy Lam, instructed by Messrs Fung Wong Ng & Lam LLP Solicitors, for the Defendant

HCA 1289/2022

[2024] HKCFI 2194

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

______________

______________

_______________________________

REASONS FOR DECISION

_______________________________

1.  For ease of reference and consistency, I will continue to adopt in these Reasons for Decision the abbreviations used in this Court’s Reasons for Decision handed down herein on 19 June 2024 [2024] HKCFI 1658 refusing Kam’s application to strike out the Plaintiff’s claim against her and to discharge the Mareva Injunction granted on 13 January 2023 (“the Striking Out Reasons”).

2.  On this occasion and for determination was the Plaintiff’s application by summons dated 8 February 2024 for an order:

(a)  Save for the compliance with paragraph (b) below, restraining Kam from disposing of or dealing with Sum A and Sum B or any traceable proceeds thereof, including the sums of HK$170,962,682 and US$6,300,000 held in Kam’s bank account number 652756XXXX[1] with Standard Chartered Bank Singapore Limited (respectively “D’s Account” and “Standard Chartered Singapore”) as of 22 February 2023 (“the Proprietary Injunction”);

(b)  Ordering Kam to pay into Court within 7 days Sum A and Sum B, including the said sums of HK$170,962,682 and US$6,300,000 or such sums deemed just and sufficient by the Court; (“the Repatriation Order”); and

(c)  That Kam do comply with paragraph 4 of the Mareva Injunction within 7 days by serving on the Plaintiff an affirmation stating, in relation to HK$49,586,000, being part of Sum A, the present location and the recipient(s) of that sum and the location, nature and value of assets which represent in whole or in part or are derived from the proceeds of that sum before the sum was purportedly transferred to D’s Account as US$6,300,000, regardless of whether or not such proceeds are in the Defendant’s own name and whether they are solely or jointly owned (“the Disclosure Order”).

3.  Mr Douglas Lam SC, leading Ms Sat and Mr Poon appeared for the Plaintiff and Mr Mike Lui SC leading Mr Lee appeared for Kam.

4.  At the conclusion of the hearing, I granted:

(a)  the Proprietary Injunction, but only in respect of the sum of HK$170,962,682;

(b)  the Repatriation Order, but also only in respect of the sum of HK$170,962,682, which is to be complied with within 14 days;

(c)  the Disclosure Order but in terms of its amended form, and to be complied with by Kam within 28 days; and

(d)  the costs order that Kam do pay 90% of the Plaintiff’s costs of its summons to be summarily assessed, with certificate for 2 counsel

with the provision that (a) my refusal to grant the Proprietary Injunction and the Repatriation Order to cover the sum of HK$49,586,000 and/or the sum of US$6,300,000 was without prejudice to the Plaintiff later applying for similar orders concerning those 2 sums (or any part thereof), if advised after disclosure is made by Kam in relation to the sum of HK$49,586,000, and (b) for the avoidance of doubt, the sum actually paid into Court by Kam pursuant to the revised Repatriation Order would correspondingly and automatically reduce the amount so prohibited in the Mareva Injunction pursuant to paragraph 9 therein.

5.  I said written reasons would be provided, and here are my reasons.

Kam’s contentions against this application

6.  As Kam’s contentions against this application would make the related recent developments in this action, in HCCT ███████ and in the Arbitration relevant, and therefore for the same to be set out in a clear and chronological manner, as I intend to do in the next section, I will first give a summary of Kam’s such contentions.

7.  In her written submissions, Kam referred to certain failed application by the Plaintiff in HCCT ███████ and ███████████████████ █████████████████████ in the Arbitration, and contended that (a) the Mareva Injunction and the HCCT Proprietary Injunction (defined below), which the Plaintiff have obtained, are already sufficient and effective injunctive relief, but (b) the Plaintiff has been abusing the process by this application, (b) the Plaintiff has been engaging in vexatious, oppressive and overly aggressive conducts and “trial and error” litigation strategies, (c) the Plaintiff has seriously delayed in making this present application, and (d) all these caused great prejudice to Kam.

The factual background and relevant procedural history herein, in HCCT █████ and the Arbitration

8.  The factual background, the parties’ respective case and the relevant procedural history in this action up to late May 2024 have been set out in §23 to §29 and §36 to §39 of the Striking Out Reasons, I would not repeat them here.

9.  It will be recalled that in this action, the Plaintiff claims that it has been defrauded by Kam over very substantial amounts, which have been conveniently referred to as “Sum A” and “Sum B”.

10.  According to the Plaintiff, not disputed by Kam, that on 1 November 2019, the Plaintiff, by 2 transfers made by Kong Fung on its behalf, transferred Sum A (ie. the total sum of HK$220,548,682) to the Chiyu Account held by SSGI. 

11.  According to the Plaintiff, on 20 February 2020, a further total sum of HK$32,500,000 (ie Sum B) was transferred by Kong Fung on the Plaintiff’s behalf to Redstone Capital and Wise Bravo pursuant to certain promises and instructions given by Kam.  The receipt of Sum B by SSGI (and related allegations) was disputed by Kam.

12.  Since February 2022, there were a number of written requests made by the Plaintiff for information relating to Sum A and Sum B, but all to no avail.  They included Wang’s repeated requests to Kam Between February and March 2022 for, among others, information relating to the projects and value of SSI’s investments, which were not responded to, and the Plaintiff’s solicitors’ letter of 20 April 2022 which was replied to by letters of the solicitors of SSGI dated 30 May 2022 and 13 June 2022 to the effect that the Plaintiff had no proper basis to seek disclosure and that “Your client’s investment is secure”.  No particulars whatsoever were given about the investment.

13.  In the meantime, on 13 May 2022, the Plaintiff obtained a Norwich Pharmacal order against Chiyu Bank. From the documents disclosed by Chiyu Bank, there were a number of substantial transfers in and out of the Chiyu Account authorized by Kam. The upshot was that by 4 January 2022, there was no money left in the Chiyu Account.

14.  On 9 September 2022, the Plaintiff obtained disclosure of the corporate records of SSI from Maples pursuant to a Court Order of the Cayman Islands.

15.  On 13 January 2023,

(a)  the Mareva Injunction was granted herein against Kam up to the value of HK$253,048,682 (being the aggregate of Sum A and Sum B); and

(b)  a proprietary injunction in respect of Sum A was also granted in HCCT ██████ against ████ in aid of the Arbitration (“the HCCT Proprietary Injunction”).

16.  There was no appeal by Kam or ████ against the granting of the Mareva Injunction and the HCCT Proprietary Injunction.

17.  The terms of the Mareva Injunction and the disclosure order provided in paragraph 4 thereof (“the January 2023 Disclosure Order”) and the terms of the HCCT Proprietary Injunction are pertinent :

The Mareva Injunction :

“1. The Defendant must not –

(1) Remove from Hong Kong any of his assets which are within Hong Kong whether in his own name or not, and whether solely or jointly owned, up to the value of HK$253,048,682 (the “Claimed Amount”), or

(2) In any way dispose of or deal with or diminish the value of any of his assets, which are within Hong Kong, whether in her own name or not, and whether solely or jointly owned up to the value of the Claimed Amount. This prohibition includes the following assets in particular:

a. The property known as Flat B (including …) on the 16th Floor of Tower 2, Larvotto, No. 8 Ap Lei Chau Praya Road, Hong Kong, or the net sale money after payment of any mortgages if it has been sold;

b. any money in the account number 608-173XXX-XXX at the Hongkong and Shanghai Banking Corporation.

…

4. The Defendant must inform the Plaintiff in writing within 48 hours from the service of this Order of the location and recipient(s) of the sums of HK$100,000,000 and HK$120,548,682 (in aggregate of HK$220,548,682 (the“Sum”)) transferred on 1November 2019 by Kong Fung Trade Ltd (“Kong Fung”) on behalf of the Plaintiff to Sunshine Success Global Inc's bank account maintained with Chiyu Banking Corp Ltd., (Account Number 7302002XXXX) and the further sums of HK$12,500,000 and HK$20,000,000 (in aggregate of HK$32,500,000 (“the “Further Sum”)) transferred on 20 February 2020 by Kong Fung on behalf of the Plaintiff to the bank account of Redstone Capital Holding Corp. maintained with United Overseas Bank Ltd Hong Kong (Account Number: 081313XXXX) and the bank account of Wise Bravo Limited maintained with DBS Bank (Hong Kong) Ltd (Account number 00051XXXX) and the location, nature and value of all assets which represent in whole or in part or are derived from the proceeds of the Sum and the Further Sum, regardless of whether or not such proceeds are in the Defendant’s own name and whether they are solely or jointly owned.”

The HCCT Proprietary Injunction :

“1. PROPRIETARY INJUNCTION

████████████████████████████████████████████████████████████████████████████████████████
████████████████████████████████████████████████████████████████████████████████████████.”

18.  As there is a dispute as to whether Kam has complied with the January 2023 Disclosure Order, I will set out the related correspondence and Kam’s disclosure in more detail in §19 to §25 below.

19.  Pursuant to the Mareva Injunction and the disclosure orders therein, including the January 2023 Disclosure Order and ████████████████████ ████ HCCT ███████████████,

(a)  Kam and ████ by their solicitors’ letter dated 17 January 2023[2], disclosed:

(i)    her assets in Hong Kong were the property named in §1(2)(a) of the Mareva Injunction with an approximate value of HK$47.4 million and about US$43,000 in the client’s account of her solicitors;

(ii)   HK$170,962,682 of Sum A was currently maintained in D’s Account in Singapore;

(iii)  HK$49,586,000 “has been applied to cover the management fee paid by the Partnership [SSI] to Sunshine Global Inc”; and

(iv)  “steps have been arranged for a sum of HK$49,586,000 to be transferred into [D’s Account] shortly”.

(b)  Kam filed her 3^rd affirmation herein on 19 January 2023 exhibiting her solicitors’ said letter dated 17 January 2023 and confirmed the information therein as true and accurate.

20.  The next day on 18 January 2023, the Plaintiff’s solicitors wrote to ████████████████████ enclosing the HCCT Proprietary Injunction and requested the bank to refrain from dealing with the sum enjoined[3]. 

21.  In the meantime, by their letter dated 20 January 2023 to Kam’s solicitors[4], the Plaintiff’s solicitors asked for the disclosure of the current whereabouts of the HK$49,586,000.

22.  In response by letter dated 31 January 2023[5], Kam’s solicitors said that they were instructed that “a sum equivalent to the amount of management fee applied will be paid into [D’s Account] by 3 February 2023” (my emphasis).  There was no disclosure made in the letter relating to the HK$49,586,000.

23.  By its letter dated 9 February 2023, ███████████████████ answered that it was not within the jurisdiction of the Hong Kong Court  █████

█████████████████████████████████████████████████████████████████████████████████.
In this connection, it is common ground that the HCCT Proprietary Injunction cannot be recognized under  █████████

24.  On 21 February 2023, the Plaintiff’s solicitors issued a letter to Kam’s solicitors[6] chasing for confirmation with documents that HK$49,586,000 has been paid into D’s Account.

25.  By a short letter dated 24 February 2023 to the Plaintiff’s solicitors[7], Kam’s solicitors stated merely that “You will note from the enclosed record HK$170,962,700 and US$6,300,000 are maintained in [D’s Account]”.  Nothing further was said though several pages of completely redacted bank statements (save the 2 entries) were enclosed.  In his submissions, Mr Lam pointed out that US$6,300,000 multiplied by the exchange rate of HK$7.8 to US$1 equals to HK$49,140,000.  Thus, the shortfall of HK$446,000 remained unaccounted for. This is not disputed by Mr Lui.

26.  On 27 March 2023, the Plaintiff issued an application in HCCT ████████████████████████████████████████████████████████████████████████████████████████████ (“the HCCT Leave Application”).

27.  On ███████████, the HCCT Leave Application was ███████ ███ dismissed ██████████████████████████████████████████

████████████████████████████████████████████████████████████████████████████████████
██████████████████████████████████████████████.

28.  On 4 September 2023, ███████████████ the Arbitration ████ ███████████████████████████████████████████████.

29.  By 2 summonses both dated 20 November 2023 respectively issued herein and in HCCT ██████, Kam and ████████████ sought to discharge the Mareva Injunction and the HCCT Proprietary Injunction consequential upon similar striking out sought in both set of proceedings by the said summonses.

30.  On 27 November 2023, █████████████████████████ Arbitration █████████████████████████████████████████████

31.  On 8 February 2024, the Plaintiff issued the present summons.

32.  As mentioned, on 30 May 2024, this Court dismissed Kam’s summons herein for striking out and for the consequential discharge of the Mareva Injunction.

33.  Shortly after in June 2024, █████ application in HCCT █████ to discharge the HCCT Proprietary Injunction was also dismissed.

Applicable principles

34.  Kam did not dispute the well-established principles relating to proprietary injunction.  They were conveniently summarized by DHCJ Marlene Ng (as she then was) in Heitkamp & Thumann Kg v. Living Profit Trading Develop Ltd &  Others[2018] HKCFI 1006 at §55-§57 :

“55. For an interim injunction to protect a claim for trust property, the Amercian Cyanamid principles apply, ie an applicant must show (a) there is a serious question to be tried on the merits of the claims, (b) the balance of convenience is in favour of granting an interlocutory injunction, and (c) it is just and convenient to grant the injunction “although irremediable damage need not necessarily be shown and the court will readily find that the balance of convenience favours the preservation of the fund pending trial. See eg Lewin (supra) at §38-14; A v C [1981] QB 956; CY Foundation Group v Cheng Chee Tock & Ors [2012] 1 HKLRD 532 at §§14, 37”.[33]

56. As to the substantive merits of the claim, “the court need only be satisfied that the claim “is not frivolous or vexatious, in other words, that there is a serious question to be tried.” (American Cyanamid (supra) at 407).  If the opposing party seeks to show there is no serious issue to be tried, the threshold is high, as it would be necessary to demonstrate that the claim should be struck out.  See eg Yifung Properties Ltd & Ors v Manchester Securities Corp and Ors (unreported) CACV258/2015, 9 September 2016, at §20.”[34]

57. In Zimmer Sweden AB v KPN Hong Kong Limited & anor,[35] DHCJ Kent Yee concurred with To J’s observations in Falcon Private Bank Ltd v Borry Bernard Edouard Charles Limited & anor [36] that the application does not have to show risk of dissipation of assets:[37]

“…… A claimant’s right to a proprietary injunction is different. It is issued to preserve assets which a claimant has a proprietary claim so that they can be turned over to the claimant if he is successful in the action. A proprietary injunction is easier to obtain and not subject to the usual liberties inserted into Mareva relief and there is no need to prove risk of dissipation. It is a better relief than Mareva injunction, provided that the property has not been dissipated. ……”” (my emphasis)

35.  As pointed out by Mr Lam, and not disputed by Mr Lui, in light of the proprietary nature of a claim, it is unnecessary to demonstrate any risk of dissipation as such and delay per se does not prevent a proprietary injunction from being granted, citing Yan Yu Ying v Leung Wing Hei[2021] HKCFI 3160 at §14-§15, per K Yeung J :

“14. Mr Chang objects to the grant of any interim‑interim relief.  He relies on delay on P’s part in bringing the present application.  He submits that P on 3 February 2021 by the latest knew that the Police had returned the Subject Bitcoins to D.  One of the NCL reports is dated 17 May 2021.  The PowerPoint was demonstrated in June 2021.  P could not demonstrate any “extreme urgency”. Further, there is no risk of dissipation.  Had D intended to dissipate, he would have plenty of time to do so before his arrest, and after the lapsing of the no consent letters.

15. With respect, none of those objections takes into account the proprietary nature of P’s claim.  As explained by Flaux J in Madoff Securities International Ltd & Anor v Raven & Ors [2012] 2 All ER (Comm) 634, at §§127‑128, that:

“127. MSIL seeks a proprietary injunction against the Kohn defendants. It is essentially common ground that there are three elements which the claimant has to demonstrate for the grant of a proprietary injunction, following the approach prescribed by American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504, [1975] AC 396: (1) that the claimant has shown that there is a serious issue to be tried on the merits; (2) that the balance of convenience is in favour of granting an injunction and (3) that it is just and convenient to grant the injunction.

128. In other words, both the basis for a proprietary injunction and the circumstances in which it will be granted are different from the case of a freezing injunction: see Polly Peck International plc v Nadir (No 2) [1992] 4 All ER 769 at 787 per Lord Donaldson of Lymington MR.  In particular, unlike in the case of a freezing injunction, it is not necessary to show any risk of dissipation of assets and, even if there has been delay in making an application which might lead to refusal of a freezing injunction, a proprietary injunction may nonetheless be granted: see Cherney v Neuman [2009] EWHC 1743 (Ch) at [101]–[102] per Judge Waksman QC sitting as a Judge of the High Court.”

36.  Mr Lam accepted that where it is shown that because of the delay, it would be unreasonable to grant the remedy and it has become practically unjust to do so, an application for a proprietary injunction will be refused (Dingway Investment Ltd (in Liquidation) v China City Construction & Development Co (Hong Kong) Ltd (No.2) [2023] 3 HKLRD 705 at §24-§28, Monsanto Co v Stauffer Chemical Co [1984] FSR 559 at 571).

37.  Mr Lui emphasized that:

“72. However, a proprietary injunction will not be granted if a monetary award will be an adequate remedy for the plaintiff. In particular, where the proprietary claim of a plaintiff is not to any specific real or personal property but to money, the plaintiff can be adequately compensated by a monetary award, unless there is evidence which calls into question the ability of the defendant to meet the award (for example its insolvency), so that a proprietary injunction is not necessary or justified”

(per Coleman J in Predicine Holdings Ltd v Bianchi (Hong Kong) Limited & Others[2021] HKCFI 123 at §72

38.  Mr Lam did not dispute that, but added and referred to the next paragraph of the judgment of that learned judge :

“73. To that point, I would add that a proprietary injunction may be considered necessary or justified where there is evidence which calls into question the willingness of the defendant to meet any award, or which sufficiently demonstrate an intention from which it can be inferred it would not meet an award. In other words, though it is not necessary to show a risk of dissipation for the purposes of obtaining a proprietary injunction, if such a risk is demonstrated it may be an additional factor which points in favour of the grant of a proprietary injunction.”

39.  Last but not least, and in support of Kam’s contentions, Mr Lui submitted, and not disputed by Mr Lam and this Court readily accepted, that the granting of an interim injunction, be it proprietary or not, is a discretionary relief and the Court always retains a residual consideration to refuse to grant such relief where it is shown that the application is an abuse of process.

DISCUSSIONS

Non-compliance of the January 2023 Disclosure Order

40.  Kam maintained, though rightly not strenuously argued by Mr Lui orally, that she has not failed to comply with the January 2023 Disclosure Order.

41.  Under the January 2023 Disclosure Order, Kam was ordered to disclose “the location, nature and value of all assets which represent in whole or in part or are derived from the proceeds of the Sum”.

42.  As I set out in paragraph 19(a) above, in Kam’s solicitors’ letter dated 17 January 2023, Kam only disclosed that HK$170,962,682 of Sum A was currently maintained in D’s Account in Singapore and HK$49,586,000 “has been applied to cover the management fee paid by the Partnership [SSI] to Sunshine Global Inc”.  In other words, Kam only said that HK$49,586,000 was used to pay SSGI purported management fees, but without any details whatsoever.

43.  In my view, since it is common ground that Kam indirectly wholly owned SSGI and there is evidence that she is the only person operating SSGI and operating the Chiyu Account and she is allegedly currently holding the HK$170,962,682 of Sum A in D’s Account (which is in her name), there is amble evidence to support that Kam must have knowledge as to when and into which bank account(s) of SSGI the HK$49,586,000 has been allegedly paid as “management fee”, the whereabouts of the sum, whether the sum has been converted into other assets and the whereabouts of such assets.  Yet, save the sentence quoted in §42 above, Kam said nothing by way of disclosure.

44.  Evidently, merely saying (by her solicitor’s letter) that “steps have been arranged for a sum of HK$49,586,000 to be transferred into [D’s Account] shortly” could not be regard as due disclosure in compliance with the January 2023 Disclosure Order.  The subsequent transfer of US$6,300,000 into D’s Account (not to mention without stating the relationship between this US$6,300,000 and the said sum of HK$49,586,000) could not by any stretch be a fulfilment of her disclosure obligation.  There is also the shortfall of HK$446,000, on which nothing was even mentioned by Kam.

45.  In the premises, I was of the clear view that there had not been full compliance with the January 2023 Disclosure Order by Kam and I proceeded to consider the Plaintiff’s present application on that basis.  Moreover, having considered the correspondence set out in §19-§25 and Kam’s conducts, I took the view that I could not regard Kam as a litigant who was sufficiently serious over complying with court orders.

The Mareva Injunction and the HCCT Proprietary Injunction are already sufficient and effective injunctive relief ?

46.  I have no difficulty in not accepting Kam’s such bare assertion.

47.  Evidently, at the time of the application for the Mareva Injunction and the HCCT Proprietary Injunction (together “the 2 Injunctions”), the Plaintiff had no information as regards the whereabouts of Sum A and Sum B.  Such lack of information was not the Plaintiff’s fault.  Rather, it has repeatedly chased Kam and ████ for the information but was repeatedly refused.

48.  It was after having obtained the 2 Injunctions that it was disclosed to the Plaintiff by Kam that HK$170,962,682 was already removed some time ago out of the jurisdiction to Singapore into D’s Account.  Therefore, (a) the Mareva Injunction, which only freezes assets within Hong Kong, does not catch the said sum, (b) there was the difficulty, as above alluded to, in seeking to secure ███████████████████████ compliance with the HCCT Proprietary Injunction.

49.  The 2 Injunctions are clearly not “sufficient or effective” in protecting the Plaintiff’s potential interest in Sum A and Sum B, particularly the said sum of HK$170,962,682.  Likewise, I do not regard any fault could be attributed to the Plaintiff for such insufficiency or ineffectiveness.

No abuse of process or real prejudice

50.  Kam now claims that she has been vexed by various and multiple applications for injunctive reliefs by the Plaintiff, and particularly parallel applications for proprietary injunctions herein ██████████████, and that such was overly aggressive and she was abused.  Those complaints aside, Kam did not depose to any facts in support of any substantive prejudice that she would or might suffer if the Proprietary Injunction and the Repatriation Order were granted.

51.  I find no substance in her such complaints.

52.  Evidently, the HCCT Leave Application was taken out by the Plaintiff in March 2023 when it realised by mid February 2023 that it had difficulty in enforcing the HCCT Proprietary Injunction ██████████████ ████████████████████. Though the HCCT Leave Application failed for the reason I mentioned, there was nothing to show that the Leave Application was taken out to abuse ████. Rather, it seems to me to be a mis-step, ███████ █████████████████████████████████████████████████████████████.

53.  Having been adjudicated against on 18 August 2023 in HCCT ███████████████████████████████████████████████████████████████████████████████████
███████████████████████████████████████████████████████████████████████████████████
███████████████████████████████████████████████████████████████████████████████████.

54.  Kam complained that the Plaintiff adopted a “trial and error” strategy.  By this Court’s reckoning, the Plaintiff has been trying to secure the money to protect it for the purpose of its claims but has been met with full scale resistance from Kam/SSGI, necessitating various procedural steps to be taken.  I find no substance in this complaint by merely describing the procedural steps taken by the Plaintiff by this label of “trial and error”.

55.  Mr Lui contended that despite ████████████████████████ was still pending (albeit stayed), the Plaintiff made the present application in February 2024, and Kam thus was prejudiced by having to face 2 parallel applications for proprietary injunction over essentially the same sum of money.  Despite the effort, Mr Lui could but only pointed to the expenditure of extra time and costs as the prejudice suffered by Kam.  I do not accept that the Plaintiff’s such conduct amounted to an abuse or vexation, and in any case not an abuse sufficient to reject the Plaintiff’s present application, for these reasons :

(a)  As Mr Lam pointed out, which I accept, ████████████████ ████████ was made against ███ and not against Kam.  Though it is the Plaintiff’s newly amended case that SSGI has been the alter ego of Kam or a device of hers to perpetrate fraud, it has always been Kam’s stance that such is not the case and herself, SSGI and SSI are distinct legal entities; Kam therefore could not blow hot and cold.

(b)  ████████████████████████ was stayed at the time this application was taken out; in any case, any alleged prejudice is on costs █████████████████████████████████████████
█████████████████████████.

56.  A point was also made in Kam’s written submissions to the effect, as I understand it, that on each occasion when the Plaintiff applied for the Mareva Injunction, the HCCT Proprietary Injunction, for leave in the Leave Application and ████████████████████████, the Plaintiff “has misled SSGI/Kam and told the Court … that the proprietary injunctive relief against SSGI will offer sufficient protection”.  Mr Lui, in my view rightly, did not further pursue this point orally.

57.  To conclude, I accept the Plaintiff’s explanations that these different applications were made in this action, HCCT █████ and ████████████ at different stages for the reasons and in the circumstances set out above and that the Plaintiff was not trying to seek double or excessive injunctive relief, and the Plaintiff did not abuse the process, or abuse Kam.

Delay ? No dissipation of assets ? Balance of convenience

58.  I accept Kam’s point that the Plaintiff could have applied for the Proprietary Injunction and the Repatriation Order by late February 2023 when the Plaintiff has already been informed by Kam that HK$170,962,682 of Sum A was sitting in D’s Account. There was thus a delay of a year between that time and the time the Plaintiff issued the present summons.  Mr Lam did not dispute there was such a delay. However, the Plaintiff was not sitting idle but has taken other not unreasonable steps to seek to secure the money.  Moreover, save delay per se, Kam did not point to any detriment she has suffered by reason of the delay.  I was thus of the clear view that it was not shown that the delay would make it unreasonable or would make it practically unjust to grant the interlocutory relief now sought.

59.  Mr Lui argued that it has not been shown that there would be a real risk of dissipation of assets in that there was presently no suggestion that the money was not still maintained in D’s Account.  Mr Lui further argued that the prejudice Kam suffered by reason of the multiple applications for the proprietary injunction should tilt the balance of convenience.

60.  Mr Lam submitted that the granting of a proprietary injunction does not depend on such risk being established.

61.  On balance of convenience, Mr Lam submitted to the effect that

(a)  All the affirmations filed by Kam in this action and in
HCCT ██████ were affirmed to by her outside Hong Kong, mostly in London.  In other words, Kam was never within the jurisdiction in the course of these proceedings.  She apparently is not resident in Hong Kong.

(b)  The Mareva Injunction, the only injunctive order made against Kam personally does not catch the money in D’s Account.

(c)  The HCCT Proprietary Injunction was made against ████.  █████ █████████████████████████████████████████████████████████████████████████████████████████████████████████████. Further, little is known about ███, ██████████████████████████████████████████████████████████████████████████████████████████████████████████████. Should the money be dissipated, there would be little meaningful recourse by the Plaintiff against ████.

(d)  The HK$170,962,682 and US$6,300,000 in D’s Account are far from secure and their remaining there depends on the will and wish of Kam.

(e)  Kam has not fully complied with the January 2023 Disclosure Order and has not accounted for the shortfall of HK$446,000.

(f)  Thus, there is evidence which calls into question the willingness of her to meet the judgment or that she would still keep the money in D’s Account later on when circumstances changes.

62.  As I said, I do not regard Kam having been abused, nor has she suffered any real prejudice as she complained.  I am persuaded by the fact that the Plaintiff’s claim is a proprietary one, and the subject money in which the Plaintiff has a proprietary claim remains outside the jurisdiction and the reach of the Hong Kong Court; and I accept Mr Lam’s submission that its present whereabouts is known and it remains in D’s Account only at the wish of Kam, with little real assurance to the Plaintiff.

63.  Kam has not been able to show any substantive prejudice she would suffer by the imposition of the Proprietary Injunction and by ordering the repatriation of the same.

64.  I was of the clear view that not granting the present orders to the Plaintiff would carry a greater risk of injustice and that the balance of convenience favoured granting the orders.

No evidence to show that the Plaintiff has a proprietary claim over the US$6,300,000 in D’s Account

65.  Mr Lui went through the correspondence mentioned in §19 to §25 above and made the point that there was no admission on the part of Kam that the US$6,300,000 later transferred into D’s Account was the traceable proceeds of Sum A or Sum B and that there was no other evidence whatsoever showing so.  He further submitted that as the Plaintiff’s present application was based on his proprietary claim over the subject sums, and there being no such evidence on the US$6,300,000, the sum should not be caught by the Proprietary Injunction, nor should it be ordered to be repatriated to Hong Kong, nor disclosure be ordered specifically regarding it.

66.  It was indisputable that such was the state of the evidence as submitted by Mr Lui.  At the hearing, Mr Lam in my view rightly and sensibly did not further contest the point.

67.  The Proprietary Injunction and the Repatriation Order therefore was granted only limited to the HK$170,962,682, with the provision that it was without prejudice to the Plaintiff applying for similar orders should later on there would be evidence tracing the balance of Sum A into other sums or assets.

The Disclosure Order

68.  As it has been made clear that there was as yet no disclosure by Kam in respect of the balance of sum A, ie HK$ HK$49,586,000, Mr Lam at the hearing orally seek leave to amend the Plaintiff’s summons to tidy the terms of the Disclosure Order to reflect that disclosure was specifically sought in relation to that balance.  The leave to amend this part was not opposed by Mr Lui.

69.  Mr Lam also sought to amend by including a paragraph requiring Kam to exhibit in her affirmation for disclosure all documentations in her possession custody or control supporting the transactions disclosed relating to that sum or part thereof.  Mr Lui informed this Court that he was instructed to oppose the leave to amend this part but did not make any submissions in opposition.  I gave leave to amend for the reasons :

(a)  It is well-established that the discovery of such supporting documents is within the rights of a claimant to seek to trace the money it has a proprietary claim and it has been part of the Plaintiff’s case for discovery that it was sought pursuant to its proprietary rights;

(b)  Without the documentations, the Plaintiff would be hampered in taking further action to trace or secure the sum; and

(c)  Kam has not fully complied with the January 2023 Discovery Order for over a year and she should be ordered to substantiate her disclosure by providing the supporting documents.

70.  I thus made the Disclosure Order in its amended terms.

COSTS

71.  Mr Lui did not dispute that the costs should follow the event, but submitted that the Plaintiff should pay for the costs of the oral application for amendment of the summons over the terms of the Discovery Order and be deprived of part of its costs as Kam prevailed over the contention over the US$6,300,000 which led to the orders being granted in a reduced form and not as sought by the Plaintiff.

72.  After hearing counsel, in the round and taking into account the minor costs of the amendment, I ordered Kam to pay the Plaintiff 90% of its costs of this application, with certificate for 2 counsel, to be summarily assessed on paper with directions therefor given.

73.  I thank Mr Lam, Mr Lui and their junior counsel for their able assistance.

HCA 1289/2022

[2024] HKCFI 1944

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

_______________________

_______________________

________________________

REASONS FOR DECISION

________________________

1.  On 30 May 2024, at the conclusion of the respective hearings, I dismissed with costs

a.  the Defendant’s summons dated 23 May 2024 seeking an order, among others, that the hearing of the Defendant’s striking out application on 30 May 2024 be closed to the public (“the Confidentiality Application”); and

b.  the Defendant’s summons dated 20 November 2023 seeking an order to strike out the Plaintiff’s Statement of Claim and to dismiss the Plaintiff’s claim herein (“the Striking Out Application”).

2.  The respective Reasons for Decision were handed down on 19 June 2024. Herein below, I will refer to my said decisions respectively as “the Confidentiality Decision” and “the Striking Out Decision” and together “the 2 Decision”, and the Reasons respectively as “the Confidentiality Reasons” and “the Striking Out Reasons” and together “the 2 Reasons”. I will continue to adopt here the abbreviations used in the 2 Reasons.

3.  By summons taken out on 13 June 2024, Kam applies for leave to appeal against the 2 Decisions on the grounds set out in the draft Notice of Appeal annexed thereto. The draft Notice of Appeal sets out 14 grounds altogether, 12 in respect of the Striking Out Decision and 2 in respect of the Confidentiality Decision. As the leave summons was taken out before the 2 Reasons were handed down, the summons further asked for leave to submit a fresh draft Notice of Appeal after the 2 Reasons were handed down, but no such fresh draft has been submitted.

4.  At the conclusion of the hearing of the leave Summons, I refused to give leave to appeal and ordered costs be paid by Kam to the Plaintiff to be taxed on indemnity basis which I then summarily assessed at HK$214,000.

5.  These are my reasons.

Refusing leave to appeal against the Confidentiality Decision

6.  In the skeleton submissions lodged on 15 July 2024 by Mr Lee (who did not appear for Kam in the Confidentiality Application and the Striking Out Application) on behalf of Kam (“Kam’s Skeleton”), it was stated that now all but Ground 2(2) and Ground 5 were no longer pursued. There was also no submission made in support of Grounds 14 and 15, which were stated to be the Grounds of appeal against the Confidentiality Decision. The above notwithstanding, Kam’s Skeleton made no express mention about abandoning the application for leave to appeal against the Confidentially Decision.

7.  Upon enquiry by this Court at the hearing, Mr Lee said that the application for leave to appeal against the Confidentiality Decision was in fact not abandoned and that his instruction was to seek orally at the hearing an adjournment of the hearing for leave to appeal against the Confidentiality Decision for the same to be heard together at the hearing before this Court on 6 August 2024, which will be the hearing of the application by Kam for an order to keep the Confidentiality Reasons from being published or made available to the public.

8.  Ms Ho, counsel for the Plaintiff, duly objected. Without calling on Ms Ho, I refused the application for the adjournment as (a) it was made unduly late and without any explanation for the lateness, and (b) the so-called reason that the leave application could or should be conveniently dealt with together with the other application was clearly untenable as the nature and issues of these 2 applications were completely different in that whether a written decision should be made public or be published depended on an established set of principles which did not concern with whether the decision was considered by a party to be correct or not.

9.  Mr Lee then made no submission in support for leave to appeal against the Confidentiality Decision. I thus formally refused Kam’s application for such leave.

Refusing leave to appeal against the Striking Out Decision

10.  By Ground 2(2) and Ground 5, Kam complains :

“ (2) The Learner Judge erred in not determining and finding that the undisputed Cayman Island Law was such that the Plaintiff must have acquired interest in the LP as an indisputable fact, particularly in light of the Plaintiff’s failure to address an answer to the contrary.”

“ 5. The Learner Judge erred in taking into account irrelevant matters in reaching his decision to dismiss the Striking Out Application, including but not limited to considering provisions in the Partnership Agreement pertaining to a contractual claim which had not been pleaded nor pursued by the Plaintiff.”

11.  While those being the 2 Grounds and with due respect to Mr Lee, he did not address in Kam’s Skeleton the 2 Grounds as such, but went on to make (in §7 to §30) various arguments contending for the merits of the “Contractual Fulfilment Point”, and contending how the point was “unanswerable”, and how the falsity of the representations alleged by the Plaintiff was not shown and such. “Contractual Fulfilment Point” was a phrase I coined in the Striking Out Reasons (§10) to conveniently denote the central argument advanced by Kam for the striking out, which boiled down to this : that once it was established that the Plaintiff has acquired an interest as a limited partner in SSI, the Plaintiff’s present case must fail.

12.  I therefore accept Ms Ho’s submission that by Kam’s Skeleton, Kam was not contending in support of Grounds 2(2) and 5, but was advancing a mix of completely new arguments and a rehash of Kam’s arguments raised in the Striking Out Application that have nothing to do the 2 Grounds, and that Kam was in fact attempting to re-argue the striking out.

13.  Ground 2(2) complained that this Court erred and ought to have determined and found in Kam’s favour in the Striking Out Application that the Plaintiff had indeed acquired an interest as a limited partner in SSI.

14.  The 2 premises stated in Ground 2(2) supporting such a finding ought to have been made were (a) “in light of the Plaintiff’s failure to address an answer to the contrary”, and (b) the acquisition of such interest under undisputed Cayman Island Law was “an undisputable fact”.

15.  As I set out in §40 of the Striking Out Decision, these 2 premises were arguments advanced by Kam.

16.  In §40 to §49 of the Striking Out Reasons, I summarized Kam’s submissions and the Plaintiff’s expert’s opinion disputing the matter (namely §78 to §86 of Conyers 2^nd at Trial Bundles B7/1426 -1428), I then came to a view that the relevant law was indeed undisputed by the parties but its application on the facts and the conclusion were disputed. I then rejected Kam’s claim that her own expert’s view was regarded as definitive and stated my reasons and conclusion that the issue is a matter for trial and could not be determined in Kam’s favour in the Striking Out Application.

17.  Thus, the Plaintiff in fact “has addressed an answer” and not failed to do so as asserted in Ground 2(2), and that the acquisition of the interest was only asserted by Kam to be “indisputable” but found by me to be otherwise.

18.  Such assertion is now repeated in §20 of Kam’s Skeleton. There, the only material cited in support that the acquisition was “indisputable” was Kam’s own expert opinion, namely Walkers 1^st §§4.6-4.8. It is completely untenable and unreasonable for Kam to claim it is “indisputable” by merely referring to her own expert and ignoring the Plaintiff’s.

19.  The other matter argued by Kam making the matter “indisputable” was that this Court should not consider the 2022 Maples Register at all, which was said to be precluded by pleading, nor should this Court give weight to it.

20.  Conyers cited section 29(1) and (4) of the ELPA, which was not disputed by Walker, which provide that the Register shall be prima facie evidence showing the names and details of each person who is a limited partner. Conyers then referred to the 2022 Maples Register which did not record the Plaintiff as a limited partner.

21.  Such being the context, this Court completely failed to understand Kam’s so-called pleading point, particularly bearing in mind that Kam was seeking the striking out on the basis that the Plaintiff’s claim must fail and therefore evidence was allowed to be considered by the Court for that purpose. Evidently, the dispute over the validity and/or weight of the 2022 Maples Register, unless it can readily and clearly be shown one way or the other without investigation, are always questions only suitable to be dealt with at trial and not on striking out.

22.  Moreover, and as I stated in §71 of the Striking Out Reasons, even if the Plaintiff has acquired an interest as a limited partner, it does not follow that there would be no falsity regarding the other representations pleaded in §8(1) of the Statement of Claim or that there would be no fraud. There is now no complaint that I erred in that view.

23.  I find no merits or prospect of success in respect of Ground 2(2).

24.  Ground 5 complains that this Court took into account irrelevant matters “including but not limited to considering provisions in the Partnership Agreement”.

25.  In Kam’s Skeleton, it was not identified which provision of the Partnership Agreement this Court has taken into account, and particularly taken into account as a reason for refusing the striking out.

26.  At the hearing, Mr Lee stated upon enquiry by this Court that only §24 of Kam’s Skeleton related to Ground 5. In that paragraph, it was complained that this Court ought not have taken into account that the Plaintiff has not received any dividends and Kam/SSGI/SSI has not provided any financial report or information (which matters were common ground).

27.  Indeed, in §75 of the Striking Out Reasons, this Court made reference to and duly considered that “there is no evidence indicating that any account of whatever sort or nature has been prepared by Kam/SSGI/SSI regarding the operation, assets and investments of SSI”.

28.  In the present case, the Plaintiff complained that Kam perpetrated fraud by making representations fraudulently to induce, and having in fact induced, the Plaintiff to pay over a substantial amount of money purportedly to invest on the Plaintiff’s behalf but Kam indeed had no intention to invest and indeed had not so invested; and that one of the fraudulent representation alleged was that Kam represented that she would provide information about the investment. That being the Plaintiff’s case, this Court completely failed to understand how Kam could even begin to argue that the fact that no dividend has been paid since November 2019 and no financial information has ever been provided were irrelevant, particularly in the context of Kam’s present contention for striking out that the Plaintiff’s case was bound to fail and against the backdrop that a substantial sum of HK$49,586,000, has been allegedly applied and paid as management fee to an entity owned and controlled by Kam.

29.  Ground 5 has no merits at all and has no prospect of success.

30.  Thus, I also refused leave to appeal against the Striking Out Decision.

Indemnity costs

31.  Having heard submissions on costs at the hearing, I acceded to the Plaintiff’s submission to award costs of this application to the Plaintiff on indemnity basis, for these reasons:

a.  I accepted Ms Ho’s submission that Kam adopted a “kitchen-sink” approach and advanced 14 Grounds most of which were either intelligible, completely lacking in merits or were new arguments. Upon a reasonable time after the Striking Out Reasons were handed down on 19 June 2024, Kam should have taken steps to withdraw all but the 2 Grounds now relied on. Yet, it was only 3 days before the hearing, ie on 15 July 2024, and by Kam’s Skeleton that it was disclosed for the first time that all but Grounds 2(2) and 5 were abandoned;

b.  Even Ground 2(2) and 5 are completely lacking in any merits and are hopeless; and

c.  Lastly but weightily, I accepted and was much persuaded by this submission of Ms Ho, that (i) Kam’s conducts were appalling, and here as she did in the Striking Out Application, which was yet another instance of her gamesmanship, Kam initially raised numerous unmeritorious grounds/matters (in striking out, 8 grounds) but at the last minute dropped the majority of them, (ii) thereby very substantial time and costs were spent and wasted by the Plaintiff and much Court time and judicial resources were also wasted, and (iii) the Court must express its affront and disapproval of such conducts as a matter of principle and to deter further similar abuse.

32.  I thank counsel for their assistance.

Miss Sabrina HO and Ms Sakinah SAT, instructed by P.C. Woo & Co, for the Plaintiff

Mr Jun LEE, instructed by W K To & Co., for the Defendant

HCA 1289/2022

[2024] HKCFI 1657

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

______________

BETWEEN

______________

__________________________________

REASONS FOR DECISION

__________________________________

1.  There would be before me to take place on 30 May 2024 the contested hearing of the Defendant (“Kam”)’s summons to strike out the Statement of Claim and to discharge the Mareva Injunction granted against Kam on 13 January 2023.

2.  By a long letter dated 21 May 2024 to the Court attaching a draft order, a bundle of authorities and a bundle of documents, Kam’s solicitors sought an order in terms of the draft. I directed a summons to be issued for the application which was to be returnable before me at 9:30 am on 30 May 2024 and that the hearing of the summons be closed to the public.

3.  On 23 May 2024, Kam accordingly took out a summons seeking an order (“the Confidentiality Order”) in gist that (a) the hearing on 30 May 2024 be closed to the public, (b) the decision to be given on the striking out summons (“the Striking-out Decision”) be not searched, inspected or published without leave of the Court, (c) documents in the Court file containing information relating to the Arbitration be sealed and not available for public inspection, or alternatively (d) such part of the hearing on 30 May 2024 during which “information relating to the Arbitration” would be disclosed be closed to the public, and (e) in the Striking-out Decision, the parties and a number of persons/entities be anonymized and all references to “information relating to the Arbitration” be redacted and the parties’ comments on the redaction be obtained before the Striking-out Decision would be released to the public.

4.  At the conclusion of the hearing of this summons, I dismissed it with written reasons to be provided. At the time, I expressly enquired with Mr Chain, counsel for Kam, as to whether Kam would have any objection against making these Reasons, which would contain no more information relating to the Arbitration as have already been disclosed in the decision of Anthony Chan J herein handed down on 13 January 2023 ([2023] HKCFI 159)(“the Mareva Decision”). Mr Chain confirmed that Kam has no objection.

5.  There are my reasons.

6.  In this action, the Plaintiff claims against Kam to recover 2 sums totalling about HK$253 millions, or damages, for fraud, dishonest assistance and conspiracy to injure by unlawful means. The background and other relevant matters are set out in the Reasons for the Striking-out Decision to be handed down at the same time as these Reasons, which I will not repeat here.

7.  Shortly after this action was commenced, a set of arbitration proceedings were commenced by the Plaintiff herein against an entity related to Kam (“the Arbitration”). As was mentioned in the Mareva Decision, “there are many common issues between the Arbitration and this action”^[1] and “there is much overlap between these proceedings and the Arbitration”^[2].

8.  Kam said that confidentiality is protected in the Arbitration under sections 16 and 18 of the Arbitration Ordinance Cap 609 (“the AO”) which provide :

“16. Proceedings to be heard otherwise than in open court

(1) Subject to subsection (2), proceedings under this Ordinance in the court are to be heard otherwise than in open court.

(2) The court may order those proceedings to be heard in open court—

(a) on the application of any party; or

(b) if, in any particular case, the court is satisfied that those proceedings ought to be heard in open court.

(3) An order of the court under subsection (2) is not subject to appeal.”

“18.Disclosure of information relating to arbitral proceedings and awards prohibited

(1) Unless otherwise agreed by the parties, no party may publish, disclose or communicate any information relating to—

(a) the arbitral proceedings under the arbitration agreement; or

(b) an award made in those arbitral proceedings.

(2) Nothing in subsection (1) prevents the publication, disclosure or communication of information referred to in that subsection by a party—

(a) if the publication, disclosure or communication is made—

(i) to protect or pursue a legal right or interest of the party; or

(ii) to enforce or challenge the award referred to in that subsection,

in legal proceedings before a court or other judicial authority in or outside Hong Kong;

(b) if the publication, disclosure or communication is made to any government body, regulatory body, court or tribunal and the party is obliged by law to make the publication, disclosure or communication; or

(c) if the publication, disclosure or communication is made to a professional or any other adviser of any of the parties.”

9.  Kam’s stance was that the confidentiality is undermined by “this gap created by the Plaintiff’s decision to commence this [sic] parallel proceedings against [Kam]” and which “effectively left open a loophole that allows the Plaintiff to breach its confidentiality obligations … through the backdoor at its wishes”^[3].

10.  By this application, and as an alternative to making the hearing on 30 May 2024 closed to the public and the Striking-out Decision not available to the public, Kam sought private hearing and redaction of the Striking-out Decision whenever there would be disclosure of “information relating to the Arbitration”.

11.  Evidently therefore, the first important thing was to identify with some precision what “information relating to the Arbitration” means and encompasses. At the hearing, Mr Chain effectively said that as the allegations made by the Plaintiff and the evidence and documents proffered by the parties very much overlapped between this action and the Arbitration, Kam was essentially seeking to have all references to them kept private and be redacted.

12.  Therefore and effectively, Kam was alternatively seeking to have the majority part (if not the entirety) of the hearing be closed to the public and all the substantive contents of the Strike-out Decision redacted.

13.  This application was opposed by the Plaintiff.

Discussion

14.  As the respondent in the Arbitration is an entity related to Kam, the Plaintiff is thus suing different parties in the 2 sets of proceedings. Mr Chain said that the Plaintiff intended in their draft amendment to its Statement of Claim to plead a case that Kam and the entity was an alter ego of Kam. However, the intended amendment was strenuously resisted by Kam, who has refused to have it heard together with the Striking-out on 30 May 2024 and its substantive hearing therefore has yet to take place, this court would be considering this application on the parties’ present pleaded case.

15.  The starting point must be that open administration of justice is a fundamental principle of great importance. The relevant principles have been elucidated in the well-known judgment of A Cheung CJHC (as the Chief Justice then was) and Stock VP (as the NPJ then was) in Asia Television Ltd v Communication Authority [2013] 2 HKLRD 354. It is also provided and made clear by Article 10 of the Hong Kong Bill of Rights Ordinance Cap 383:

“… In the determination of … his rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law. The press and the public may be excluded from all or part of a trial for reasons of morals, public order (ordre public) or national security in a democratic society, or when the interest of the private lives of the parties so requires, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice; but any judgment rendered … in a suit at law shall be made public except where the interest of juvenile persons otherwise requires or the proceedings concern matrimonial disputes or the guardianship of children.”

16.  Any departure from such openness in any given case must be justified by reference to the principles and the circumstances of the case in question. A central consideration is whether the due administration of justice requires the principle of open administration of justice to be compromised.

17.  Kam emphasized that she is entitled to arbitral confidentiality as is protected by section 18 of the AO.

18.  However, section 18(2)(a)(i) provides the exception that a party may disclose such information “to protect or pursue a legal right or interest of the party”. As pointed out by the Plaintiff^[4] and not disputed by Kam, Article 45.3 of the 2018 HKIAC Administered Arbitration Rules (which governed the Arbitration) provides similarly that a party is not prevented from disclosure of such information to protect or pursue a legal right or interest of the party.

19.  It is not disputed that the Plaintiff is entitled to bring this action against Kam as of right. The Plaintiff’s allegations, the evidence and documents it proffered in this action therefore are disclosed to pursue a legal right or interest of the Plaintiff within the meaning of section 18(2)(a)(i) and of the said Article 45.3 of the HKIAC Rules.

20.  Kam prayed in aid the English Court of Appeal case of CDE v NOP [2021] EWCA Civ 1908. There, and rather similar to the present case, the defendants in that action in the Commercial Court were accused of having orchestrated a fraud. Those same allegations were the subject of an arbitration against companies said to be connected with the defendants. The arbitrators produced an award finding that the claimant’s allegations were well-founded. The claimants said that the award was binding on the defendants as they were privy to it and sought to made the award public and admit the award as evidence in the action. The question of whether the award was binding (“the privity application”) would be determined in a coming hearing at which the claimant would apply for summary judgment. The broad issue argued on that appeal concerned the extent to which proceedings in that action, particularly the privity application, which involved reference to the contents of the award should be heard in public.

21.  In the judgment of Males LJ, agreed to by Popplewell LJ and Warby LJ, the learned Judge held:

a. The general rule under CPR r 39.2 is that a court hearing is to be in public, which reflects the long-standing and well-established principle of open justice.

b. “[A] hearing may only take place in private if, and even then only to the extent that, the court is satisfied of one or more of the matters set out in sub-paragraphs (a) to (g) of paragraph 3 [of CPR r 39.2] and that it is necessary to sit in private to secure the proper administration of justice. Necessity is a demanding test” (original emphasis)(§38).

c. The disclosure of the contents of the arbitral award falls within CPR r 39.2(3)(c), allowing the hearing to be held in private in that “it involves confidential information (including information relating to personal financial matters) and publicity would damage that confidentiality”; and the fact that arbitration and/or the award is confidential is sufficient to demonstrate confidentiality regardless whether its disclosure would cause harm over and above the fact of disclosure itself.

d. “The critical question, therefore, was whether it was necessary to sit in private to secure the proper administration of justice” (§41).

e. The first instance judge was right in holding the case management conference in private.

f. The CA upheld the order of the judge effectively making no decision whether the privity application should be heard in public and placing the burden on the claimant to seek a determination from the judge hearing the privity application to decide whether the hearing should be held in public or private. However, the CA replaced paragraph 2 of the order of the judge, which was wrong in principle, making clear that “The starting point is that the hearing of the privity application should be in public and any derogation from that position needs to be justified in accordance with the provisions of CPR r 39.2” (§47).

22.  Importantly, and relevant for the present purpose, Males LJ had this to say at the end of his judgment:

“50. That said, we make clear that the considerations which led us to conclude that the judge was right to hold the case management conference in private will not apply, or at least will not apply with anything like the same force, to the privity application. That will be an application for summary judgment at which the court will be required to adjudicate on the merits of the dispute. Moreover, if the court holds that the hearing should be held in public, there will beno question of any breach of article 30.1 of the LCIA Rules. That rules entitles a party to put the award in evidence before a state court in order to protect or pursue a legal right. That is what the clamant will do. If the applicable procedural rules mean that the court will sit in public to hear that application, these isno breach of article 30.1.” (my emphasis)

23.  Article 30.1 of the LCIA Rules reads :

“30.1 The parties undertake as a general principle to keep confidential all awards in the arbitration, together with all materials in the arbitration created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain, save and to the extent that disclosure may be required of a party by legal duty, to protect or pursue a legal right, or to enforce or challenge an award in legal proceedings before a state court or other legal authority.” (my emphasis)

24.  Thus and firstly, Males LJ saw it necessary to make clear that the considerations leading to the conclusion that it was necessary to have the case management conference heard in private did not have the same force if applied in the context of a hearing where the merits of the dispute would be considered and decided. This is pertinent here as the striking out application could potentially affect the Plaintiff’s substantive right.

25.  Secondly, the learned Judge mentioned twice that should the hearing of the privity application be decided under procedural rules to be heard in public, there would be no breach of confidentiality as such disclosure was in order to protect or pursue a legal right of the claimant.

26.  With the case of CDE v NOP so properly understood, I accept the Plaintiff’s submission that it does not assist Kam. Rather, and in my view, the judgment in that case reinforced that disclosure to protect or pursue a legal right of the party, as provided by section 18(2)(a)(i) of the AO, does not amount to a breach of the arbitral confidentiality.

27.  The arbitral confidentiality being so excepted by section18(2)(a)(i), it fell on Kam to satisfy the Court that there were otherwise cogent reasons in this particular case (save arbitral confidentiality) to justify a departure from open justice, or that due administration of justice requires the principle of open administration of justice to be compromised.

28.  Other than arbitral confidentiality, Kam did not put forth any such other reasons or justification.

29.  I therefore refused Kam’s application with costs to the Plaintiff.

Mr Douglas LAM SC leading Ms Sabrina HO and Ms Sakinah SAT, instructed by P.C. Woo & Co., for the Plaintiff

Mr Christopher CHAIN SC leading Mr Jing En SIM, instructed by Latham & Watkins LLP, for the Defendant

HCA 1289/2022

[2024] HKCFI 1658

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

______________

BETWEEN

______________

__________________________________

REASONS FOR DECISION

__________________________________

1.  In this action, the Plaintiff claims against the Defendant (“Kam”) in respect of 2 sums, namely HK$220,548,682 (“Sum A”) and HK$32,500,000 (“Sum B”), for fraud, dishonest assistance and conspiracy to injure by unlawful means.

2.  Before me for substantive hearing and determination was Kam’s summons dated 20 November 2023 seeking an order that

a. The Plaintiff’s Statement of Claim be struck out and the Plaintiff’s claim herein be dismissed on the grounds that it discloses no reasonable cause of action, it is scandalous, frivolous or vexatious or is otherwise an abuse of process; and

b. In the alternative, the Injunction Prohibiting Disposal of Assets in Hong Kong made herein on 13 January 2023 (“the Mareva Injunction”) be discharged.

The scope, basis and issues in this striking out

3.  In the 5^th Affirmation of Kam (“Kam 5^th”)[1] filed in support of her striking out application consisting of 45 pages, she raised and elaborated on 8 points under section C thereof, which contain more submissions than disposition of facts, arguing that the Plaintiff’s allegations of fraud against her are without proper basis. To give some flavour of what the 8 points she raised are, I will set out their titles:

“C.1. The Partnership Agreement and the Subscription Agreement are valid and subsisting instruments and operated such that the Plaintiff had duly acquired an interest as a limited partner of [SSI]”

“C.2. The Plaintiff’s reliance on the Purported Maples’ 2022 LP Register is completely misleading”

“C.3. SSGI’s discretion to deal with Sum A pursuant to the Partnership Agreement”

“C.4. The Plaintiff was in any event not the representee of the First Alleged Oral Representations nor the actual payor of Sum A”

“C.5. The Plaintiff could not have relied on the First Alleged Oral Representations”

“C.6. In any event, the payment of Sum A (and any alleged loss arising from it) could not have been made in reliance upon the First Alleged Oral Representations”

“C.7. No evidence that the Second Alleged Oral Representations were ever made”

“C.8. The Plaintiff in any event could not have relied on the Second Alleged Oral Representations, nor was it the actual payor of Sum B”

4.  However, the issue of whether the Plaintiff has a good arguable case of fraud against Kam, among other issues, in fact has already been hotly contested and adjudicated in the Plaintiff’s application for the Mareva Injunction heard on 12 January 2023 before A Chan J when Kam appeared by Mr Manzoni SC (“the Mareva Application”). The learned Judge handed down his Decision the next day on 13 January 2023 by which he held in favour of the Plaintiff on that and other issues and granted the Mareva Injunction (“the Mareva Decision”).

5.  Kam did not appeal against the Mareva Decision.

6.  In his written submissions dated 28 May 2024, Mr Lam SC (leading Ms Ho and Ms Sat), counsel for the Plaintiff, submitted extensively that all these issues so raised in Kam 5^th have been considered and adjudicated by A Chan J in the Mareva Decision, and therefore it was a blatant abuse of process (under Henderson v Henderson principle) for Kam to re-argue now that the Plaintiff’s claim is bound to fail.

7.  Mr Lam submitted that the striking out should be refused on the basis of abuse of process alone, but that in any case, this is obviously not a proper case for striking out.

8.  In the written submissions dated 27 May 2024 lodged by Mr Chain SC (leading Mr Cheng and Mr Sim), counsel for Kam, it was for the first time indicated that the scope and basis relied on for the striking out were much more limited. Instead of what was asked for in the summons, Kam now seeks:

a. An order for striking out the Plaintiff’s pleaded claim for Sum A, specifically §§3 (insofar as Sum A is referred), 8 to 10, 17, 19, 21(1), 22 to 26 and Relief 1 of the Statement of Claim, on grounds of frivolousness, in that it plainly and obviously cannot succeed at trial;

b. Alternatively, an order for striking out the Plaintiff’s pleaded claim of dishonest assistance relating to Sum A and Relief 1(a) on grounds of no reasonable cause of action, that P has failed to plead any breach of trust or fiduciary duty;

c. Consequentially upon the Plaintiff’s claim for Sum A being struck out, the entire Mareva Injunction be discharged; and

d. Alternatively, the entire Mareva Injunction be discharged due to lack of any good arguable case on merits.

9.  Mr Lam SC registered a complaint over such last-minute change in the scope and basis, but was prepared to proceed with the hearing on the basis of Kam’s present stance.

10.  In Kam’s written submission and her reply skeleton submissions dated 29 May 2024, the one matter that Kam said has now been indisputably proved justifying the striking out of the claim for Sum A was that under Cayman Islands law the Plaintiff in fact has acquired an interest as a limited partner in SSI (defined below)(“the Contractual Fulfilment Point”), points C2 to C8 as raised in Kam 5^th were no longer referred to and relied on, and the Henderson abuse point as raised by Mr Lam in respect of points C2 to C8 was also not addressed to directly.

11.  Such being the parties’ latest stances, this Court enquired at the hearing and Mr Chain accepted, in my view rightly and sensibly, that since the Plaintiff’s case of fraud over Sum A has been adjudged by A Chan J as having reached the threshold of “good arguable case”, it would mean that the claim has been adjudged to be “more than barely capable of serious argument, and yet not necessarily one that the judge believes to have a better than 50% chance of success”[2], and that such level of merits of the claim logically speaking is one that has already overcome the “bound to fail” threshold.

12.  Mr Chain also confirmed that Kam was not seeking now to re-argue the matters canvassed in the Mareva Application. Mr Chain said that there was now a material change of circumstances in that there has been available since the Mareva Decision “undisputed evidence” not placed before A Chan J proving the Contractual Fulfilment Point, which would show or lead to the result that the Plaintiff’s claim over Sum A would be bound to fail.

13.  Mr Lam initially contended that there was no real material change of circumstances in that the so-called “undisputed evidence” by way of Cayman Islands law expert reports could have been, but were not, proffered in the Mareva Application. In the course of the hearing, Mr Lam did not further pursue that contention.

14.  With such narrowing of scope and basis of the striking out, the abuse of process point raised by the Plaintiff and the other 7 points raised in Kam’s 5^th (ie. points C2 to C8) were no longer in issue in this application.

Dismissing the striking out application and withdrawal of the application to discharge the Mareva Injunction

15.  At the conclusion of the hearing for the striking out and before hearing the application to discharge the Mareva Injunction, I announced my decision dismissing the striking out application and indicated that written reasons would be provided.

16.  After a short adjournment, Kam sought leave to withdraw her application to discharge the Mareva Injunction, which leave was granted and that application was withdrawn.

17.  Mr Chain did not dispute that costs should follow the event regarding the striking out and that Kam should also pay the costs of the withdrawn application to discharge the Mareva Injunction. The question outstanding was whether such costs should be taxed on an indemnity basis, as the Plaintiff asked. As discussed with counsel, this Court would indicate its provisional view thereon by way of an order nisi in these Reasons.

The applicable principles

18.  The principles applicable to striking out are trite and not controversial. However, they bear repeating in the circumstances of the present case.

19.  Striking out is an exercise of summary powers only for plain and obvious cases. One must be careful not to summarily drive a plaintiff from the judgment seat. Before the court will strike out a claim for being frivolous, it must be shown that the claim is impossible, not just improbable, to succeed and is bound to fail or can have no prospect of success or is obviously unsustainable. The mere fact that the case is weak and not likely to succeed does not suffice to merit a striking out. The burden is on the party seeking to strike out to prove so. The threshold is a high one.

20.  Mr Chain relied on the principle, which is trite and was not disputed, that where fraud is being alleged, the court will not allow allegations of such nature to be made without proper evidence and if they were made irresponsibly, it will exercise its inherent jurisdiction to strike out the same (Chinachem Charitable Foundation Ltd v Chan Wai Tong Christopher[2022] HKCA 1907 §6).

21.  Mr Chain also placed reliance on Polyline Development Ltd v Ching Lin Luen[2021] HKCFI 483 (§§69, 76 and 77) to support a proposition that where a striking out application is taken out against a statement of claim alleging fraud, the court must take an overall view of the statement of claim to identify what is the real complaint and then decide whether it is sustainable.

22.  I do not accept that Mr Recorder Manzoni SC laid down such a general proposition in that case. There, the learned Recorder was dealing with a statement of claim that he found could be described as “kitchen sink” - containing every possible cause of action that the pleader could think of. And in view of the transactions and particular set of factual and legal allegations before him, the learned Recorder approached his analysis by, among others, sorting out and identifying what the “real complaint” was. I have no doubt that, where it is appropriate to the case, such an approach may be adopted as a useful analytical process or tool. But the crux of the matter in the present case, I think, is how Mr Chain sought to force the Plaintiff’s claim herein from what it is expressed to be in the Statement of Claim into what Kam considered to be “the real complaint”. I will have to say more about this in due course.

Background and the factual setting

23.  The relevant background and factual setting were lucidly summarized by A Chan J in the Mareva Decision. I gratefully adopt the same, including the abbreviations used :

“Background

5. The Plaintiff is a Mainland company. In its dealings with Kam, the Plaintiff was acting via Mr Wang Guiwu (“Wang”). Kam (whose former name was Wang Yu Zhi) is the daughter of Mr Wang Bin, who was the former Chairman of China Insurance (Group) Company. It is not controversial that Wang Bin was a well-known figure in the Mainland business circle.

6. Sunshine Success International LP (“SSI”) is an exempted partnership registered in the Cayman Islands on 6 July 2018. Its registered office was located at the address of Maricorp Services Ltd (“Maricorp”) since its registration until February 2022 when Maricorp was replaced by Maples Corporate Services Ltd (“Maples”) as it registered agent.

7. From February 2022 until at least 8 December 2022, SSI’s registered office was located at the address of Maples. Sometime after 8 December 2022, SSI’s registered office was (and is) located at the address of Tricor Services (Cayman Islands) Ltd.

8. [Sunshine Success Global Inc (“SSGI”)] was incorporated on 5 July 2018 (1 day before SSI’s registration in the Cayman Islands) and has been SSI’s General Partner since its registration. By virtue of being the General Partner, SSGI has been in control of SSI. SSGI was (and is) a company owned and controlled by Kam.

9. Kam has been SSGI’s sole director since its incorporation. Sunshine Success Global Ltd, a BVI company incorporated on 15 May 2018, is the sole shareholder of SSGI. Kam is in turn Sunshine Success Global Ltd’s sole shareholder and sole director (appointed on date of incorporation).

Investment

10. On 1 November 2019, the Plaintiff, through an agent in Hong Kong (Kong Fung Trade Ltd), transferred Sum A into SSGI’s account held with Chiyu Banking Corp Ltd (“Account”) in accordance with the instructions of Kam. The Account was opened by Kam on about 27 July 2018. She was stated in the bank record as the ultimate owner and controller of SSGI, and is the sole signatory of the Account.

11. Sum A was for investment as a limited partner of SSI which, Wang was allegedly told by Kam, will invest in new real estate projects, including London, Japan and Australia.

12. … However, Kam’s evidence is that in Autumn 2019 she told one Mr Zhi that she was “operating a Cayman investment fund through a partnership structure” and that “the fund intended to invest primarily in commercial properties, private equity and stocks…”. The Plaintiff accepts that Zhi was acting as a go-between at various stages, whereas Kam seems to say that Zhi was the true investor of Sum A and the Plaintiff was merely his nominee.

13. On 13 November 2019, there was a transfer by SSGI under the authorization of Kam of HK$420.5 million, which included Sum A, from the Account to SSGI’s savings account. According to the bank records obtained by the Plaintiff by way of a Norwich Pharmacal Order, Sum A (mixed with other funds) might have gone back into the Account in tranches but all the money were swiftly transferred out. By 4 January 2022, there was no money left in the Account. Neither SSGI nor Kam has provided any evidence as to the current whereabouts of Sum A (or Sum B).

Agreements

14. It is common ground that on 15 December 2019, Wang on behalf of the Plaintiff signed and appended the Plaintiff’s stamp on a Partnership Agreement (經修訂和重述的有限合夥協議) and a Subscription Agreement. They were both dated 1 August 2019. Kam only appended SSGI’s stamp on the Partnership Agreement but did not sign on it on behalf of SSGI at that time. SSGI’s solicitors only provided the signed Partnership Agreement to the Plaintiff on 27 June 2022.

15. On 15 December 2019, Wang was also given by Kam a draft Letter Agreement, but that document was not signed by either party.

16. The Partnership Agreement contained, inter alia, the following terms :

Recital A, ‘[SSGI] and the Initial Limited Partner … formed [SSI] … by executing the Exempted Limited Partnership Agreement of the Partnership dated 06.07.2018 (the “Initial Limited Partnership Agreement”) …’.

Recital B, ‘The Partners desire to enter into this Agreement to amend and restate the Initial Exempted Limited Partnership Agreement in its entirety to reflect, inter alia, the admission of the additional Persons into the Partnership as Limited Partners thereof and to clarify certain terms and provisions related to the Partners’ ownership and management of the Partnership’.”

The definitions under Clause 1.1:

“‘Initial Limited Partner’ means Brilliant Investment Consultancy Limited, Deternal Management Co., Ltd, who was admitted to the Partnership to facilitate the filing of the registration and the formation of the Partnership prior to the Initial Closing Date.

‘Limited Partner’ means any Person executing this Agreement as a limited partner of the Partnership …

‘Partner’ means any General Partner or Limited Partner.

‘Partnership’ means the limited partnership formed pursuant to this Agreement, as the said limited partnership may from time to time be constituted.”

Clause 1.2 (Formation and Continuation): “The Partners hereby agree to form [SSI] ... [SSGI] shall file all amendments to the information provided in respect of the Registration ...”.

Clause 1.4 (Purpose): “The primary purpose of the Partnership is to build long-term capital appreciation generally through acquiring, holding, managing and disposing of commercial real estate investments in London, Japan, and in Australia …”.

Clause 2.7 (Report): “The fiscal year of the Partnership shall be the calendar year. As promptly as possible after the close of the first full fiscal year of the Partnership ending on 31 December, and each fiscal year of the Partnership thereafter, the Limited Partners will receive from the Partnership an annual financial report prepared by [SSGI] in accordance with the accounting standard reasonably determined by [SSGI] within one hundred and twenty (120) days of the closing of the Partnership’s fiscal year …”.

Clause 3.5 (Register and Partnership Record): “[SSGI] shall maintain or cause to be maintained at the registered office of the Partnership or such other place as it shall determine in its sole discretion: (a) … the Register which shall contain the name and address of each Person who is a Limited Partner, the date on which a Person became a Limited Partner and the date on which a Person ceased to be a Limited Partner, which Register shall be open for inspection with [SSGI]’s consent; and (b) … a record of the amount and date of the Capital Contributions of each Limited Partner and the amount and date of any payment representing a return of the whole or any part of the Capital Contributions of any Limited Partner, which record shall be open to inspection with [SSGI]’s consent”.

“Sum B

17. On 20 February 2020, the Plaintiff (through Kong Fung) transferred Sum B into the bank account of Redstone Capital Holding Corp. (“Redstone Capital”) and the bank account of Wise Bravo Ltd (“Wise Bravo”).”

The Plaintiff’s case of fraud, and matters it relied on in the Mareva Application

24.  The Plaintiff’s case pleaded in its Statement of Claim filed on 17 November 2022 is that Kam together with SSGI carried out a fraudulent scheme to deprive P of Sum A and Sum B[3].

25.  It was pleaded that Sum A and Sum B were transferred to Kam in reliance of certain oral representations made by Kam :

a. After 2 meetings between inter alios Wang and Kam and Kam having learned that the Plaintiff was seeking out investment opportunities, then in around September or October 2019 at a meeting which took place in a hotel in Beijing attended by Wang, Kam, Kam’s parents (“Mr and Mrs Wang”) and Zhi, Kam on her own behalf and on behalf of SSGI made the following oral representations (“the First Oral Representations”):

i. The new investment fund would invest in newly developed real estate properties in, inter alia, London, Japan and Australia.

ii. For the purpose of P’s investment in the new fund, P would acquire an interest as a limited partner in SSI.

iii. Kam is the manager of SSGI, the General Partner of SSI, and Kam would be responsible for all of SSI’s operations.

iv. Kam would provide information about the investment after the signing of the relevant documents.

b. In reliance of the First Oral Representations,

i. on 1 November 2019, the Plaintiff transferred Sum A to a bank account in Chiyu Banking Corporation Ltd held in the name of SSGI (“the Chiyu Account”) by 2 transfers made by Kong Fung on P’s behalf; and

ii. Wang on behalf of P executed the Partnership Agreement and the Subscription Agreement on 15 December 2019, which were backdated to 1 August 2019 upon Kam’s suggestion.

c. In or around early February 2020, Kam (acting through Mr and Mrs Wang) made to Wang on behalf of the Plaintiff (through Zhi) the following oral representations (“the Second Oral Representations”) :

i. Kam was in need of funds to repay her personal debts overseas, and asked the Plaintiff to provide the funds to her;

ii. Kam would treat the funds provided to her as the Plaintiff’s capital contribution for subscription of additional interest in SSI. She would procure SSGI and SSI to make the necessary arrangements to increase the Plaintiff’s interest in SSI.

d. In reliance of the Second Oral Representation,

i. the Plaintiff informed Kam that it agreed to so provide HK$32,500,000 to Kam upon Kam’s undertaking that she would treat the amount as P’s contribution for subscription for additional interest in SSI and would procure SSGI and SSI to make the necessary arrangements to increase P’s interest in SSI;

ii. Mr and Mrs Wang (on behalf of Kam) then informed Zhi (on behalf of P) that Kam agreed and undertook to prepare a written agreement to be signed by Kam and P to record the said arrangement; and

iii. Further upon Kam’s promise set out in the preceding sub-paragraph and on 20 February 2020, Kong Fung on behalf of P transferred HK$12,500,000 and HK$20,000,000 into accounts designated by Kam, namely and respectively, the bank account of Redstone Capital and the bank account of Wise Bravo, which together made up Sum B.

26.  It was then pleaded that the First and Second Oral Representations were false and were made fraudulently in that :

a. The Plaintiff has never acquired any interest in SSI, as shown in the Register of Partnership Interests of SSI, which showed that only SSGI, Deternal Management Co Ltd and Brilliant Investments Consultancy Limited were limited partners.

b. Kam and SSGI have never had any intention to arrange the Plaintiff to acquire any or any further interest in SSI.

c. Kam and SSGI have never had any intention to apply Sum A and Sum B to invest in newly developed real estate properties.

d. Sum A was, together with other funds, transferred out of the Chiyu Account to another bank account held by SSGI.

e. Kam has failed to provide, or procure SSGI to provide, to the Plaintiff any information about the investment of SSI, and by SSGI’s solicitors’ letter dated 13 June 2022 misled the Plaintiff by claiming that “[the Plaintiff’s] investment is secure”.

27.  The following further matters were deposed to in the affirmation evidence filed by the Plaintiff and relied on by it in the Mareva Application:

a. Since early 2020, Wang tried to contact Kam over WeChat without success. Through Zhi, Wang repeatedly asked Mr and Mrs Wang to ask their daughter to provide the Plaintiff with the executed Partnership Agreement and Letter Agreement. Wang was assured (through Zhi) by the couple that there should not be any problem. However, the requested documents were not forthcoming.

b. In around mid-February 2022, Wang managed to contact Kam through her new WeChat account.

c. Between February and March 2022, Wang made repeated requests to Kam for (a) the executed Partnership Agreement and Letter Agreement; (b) basic information about SSGI; and (c) the projects and value of SSI’s investments (“the Requests”). Such information was needed by the Plaintiff to ascertain the status of its investment with Sums A and B, and to allow information to be provided to third party investors to whom the Plaintiff might dispose of the investment.

d. However, Kam put up various excuses not to fulfil the Requests. For instance, she was looking for a Cayman lawyer to make the arrangement and she was overseas and needed more time.

e. Given Kam’s response, the Plaintiff became concerned about its investment. On 20 April 2022, the Plaintiff’s solicitors (“PCW”) issued a letter (“20 April Letter”) to both SSI and SSGI setting out the Requests again, but no response was received by the deadline of 28 April 2022.

f. On 13 May 2022, the Plaintiff obtained a Norwich Pharmacal order against Chiyu Bank. The information revealed by the documents provided by Chiyu Bank to the Plaintiff on 14 June 2022 showed that on 13 November 2019, there was a transfer by SSGI under the authorization of Kam of HK$420.5 million, which included Sum A, from the Chiyu Account to SSGI’s savings account. According to the bank records, Sum A (mixed with other funds) might have gone back into the Chiyu Account in tranches but all the money were swiftly transferred out. By 4 January 2022, there was no money left in the Chiyu Account.

g. On 30 May 2022, SSGI’s solicitors (“DP”) wrote to PCW referring to 20 April Letter but without providing any substantive reply. By another letter of DP dated 13 June 2022 to PCW, it was stated that “… in 2019 your client invested in a 15-year Cayman fund … It follows, therefore, that there is no proper basis for your client to seek disclosure orders or otherwise. Your client’s investment is secure”. No particulars were given about the investment.

h. In PCW’s reply to DP on 22 June 2022, concerned was expressed that SSGI’s bare assertion that the Plaintiff’s investment was “secured” was insufficient, and SSGI as General Partner had failed to provide documents or information about the structure and business affairs of SSI to the Plaintiff. DP replied by letter dated 27 June 2022 in which SSGI repeated that the fund which the Plaintiff invested in was for a term of 15 years and enclosed an executed copy of the Partnership Agreement.

i. On 9 September 2022, the Plaintiff obtained disclosure of the corporate records of SSI from Maples pursuant to a Court Order of the Cayman Islands (“Cayman Disclosure”). The Register of SSI obtained under Cayman Disclosure (“2022 MaplesRegister”), which was kept at Maples (SSGI’s then registered office) revealed that the Plaintiff was never a limited partner of SSI. The Register was certified by Maples on 16 August 2022. The 2022 Maples Register showed that the partners of SSI were SSGI, Deternal Management Co Ltd and Brilliant Investments Consultancy Ltd. According to Clause 1.1 of the Partnership Agreement, Brilliant Investments and Deternal Management were admitted as limited partners only for the purposes of registration and formation of the Partnership.

Kam’s case presented in the Mareva Application

28.  Kam said that the Plaintiff was regretting the investment and was trying to extricate itself from it before maturity. Kam raised a number of disputes by way of defence in the Mareva Application which were summarized in §§42 to 49 of the Mareva Decision.

29.  As the only contention raised by Kam’s for this striking out is the Contractual Fulfilment Point, I therefore do not think it necessary here to go into the other matters Kam disputed or alleged by way of defence. Suffice it to mention that those disputes should be resolved at trial, but I have borne those disputes in mind as backdrops to this application.

The Mareva Decision

30.  For the present purpose, I think it pertinent to recap the gist of the Mareva Decision concerning whether a good arguable case was shown, as follows.

31.  In §§56 to 61 of the Mareva Decision, the learned Judge observed that there were a number of unusual features of Kam’s case, which “are indeed telling”, including (a) SSI purported to be a multi-million dollar investment vehicle managed by SSGI, there was no sign that SSI or SSGI has any staff, (b) neither Kam nor SSGI behaved in a manner consistent with a normal and honest investment provider in that they refused to provide a fully executed copy of the Partnership Agreement to the Plaintiff as soon as practicable after having received a huge sum from it and they continuously refused to tell the Plaintiff what has happened to the money and its whereabouts, (c) Kam made vague references to an investment in a 15-year Cayman fund without any explanation or a shred of evidence.

32.  The learned Judge then analysed the principal factual controversies and contentions, including (a) whether Wang had met with Kam prior to the payment of Sum A (Wang said they did and Kam said they did not), (b) that correspondences showed that Kam steadfastly refused to tell the Plaintiff what had happened to its money, (c) the parties’ respective case over the 2022 Maples Register, (d) the Plaintiff’s case regarding the circumstances relating to the payment of Sum B was to an extent corroborated by certain WeChat messages, (d) the credibility of Wang’s evidence and (e) Kam’s contention that any breach should be determined by arbitration.

33.  The learned Judge also made reference to the Plaintiff’s reliance on certain evasive conducts of Kam after the present action was commenced (see §36-41 of the Mareva Decision), which conducts the learned Judge described as “gamesmanship” (and an indemnity costs order dated 11 November 2022 has been made to mark the disapproval).

34.  The learned Judge also considered the Plaintiff’s point, which he described as powerful, that if the Plaintiff’s money was legitimately invested, Kam and SSGI would have been most forthcoming to dispel any misunderstanding or suspicion on the Plaintiff’s part that it has been cheated by simply showing to the Plaintiff the Register of SSI and information on where the money was invested and was held. The learned Judge further observed that the point could be taken further in that if such information was provided it would be a complete answer to the Mareva Application and there would be no need for Kam to incur huge costs in defending these proceedings.

35.  The learned Judge then concluded in §74 that he was quite satisfied that there was a good arguable case of fraud against Kam.

Disclosures made by Kam after the Mareva Decision

36.  In compliance with the Disclosure Order made by A Chan J on 13 January 2023 ordering Kam to disclose the whereabouts of Sum A and Sum B, Kam disclosed that HK$170,962,682 of Sum A was kept in a bank account held in Kam’s personal name at Standard Chartered Bank Singapore Limited (account no: 631XXX) and that the balance of Sum A, namely HK$49,586,000, has been applied as management fee paid by SSI to SSGI but Kam stated that the same would in due course be transferred back into and would remain at the same account at Standard Chartered Bank Singapore. As Kam’s case was that she has no knowledge of and did not receive Sum B, there was no disclosure on it. No further information was disclosed by Kam.

37.  I note that Kam has not fully complied with the Disclosure Order as she failed to disclose the whereabouts of the said balance of HK$49,586,000. Further, there was no explanation or any detail whatsoever given relating to the purported charging of “management fee” of HK$49,586,000 by SSGI and payment to it by SSI. There were further complaints by the Plaintiff that Kam has not fully complied in other respects. I do not think I need to go into them here.

38.  Upon the Plaintiff’s direct enquiry with Standard Chartered Bank Singapore shortly after Kam’s said disclosure, it was discovered that there was no account identified by the said number “631XXX”. Upon further enquiry with Kam’s solicitors, it was only then said that the actual account number was in fact “652756XXXX” and “631XXX” was the client number.

39.  Then weeks later on 24 February 2023, Kam disclosed a very heavily redacted bank statement of the above-mentioned Singaporean account in her name which showed that HK$170,962,700 and another sum of US$6,300,000 (equivalent to HK$49,140,000) were kept in that account. There was no further information or explanation given.

“Undisputable evidence” proving that the Plaintiff had acquired an interest in SSI ?

40.  Kam now says that considering the Cayman Islands law expert reports proffered by the parties and based on undisputed facts, it is indisputably proved that the Plaintiff had acquired an interest in SSI under Cayman Islands law.

41.  In this application, the parties have proffered the following expert reports on Cayman Islands law:

a. By Kam : (i) A memorandum of advice given by Walkers (Singapore) LLP dated 23 October 2023 (“Walker 1^st”)[4], and (ii) A memorandum of advice also given by Walkers (Singapore) LLP dated 5 April 2024 (“Walker 2^nd”)[5].

b. By the Plaintiff : A memo of advice given by Conyers Dill & Pearman dated 2 February 2024 (“Conyers 2^nd”)[6].

42.  Mr Chain submitted that

a. The experts did not dispute that there were only 2 conditions for the Plaintiff’s acquisition of an interest in SSI, which were (i) the Plaintiff’s valid execution and delivery of the Partnership Agreement and the Subscription Agreement (together “the LP Agreements”) (and SSI’s execution of the same were irrelevant), and (ii) SSI’s act or indication of acceptance of the Plaintiff as a limited partner of SSI.

b. Condition 1 was indisputably satisfied according to the Plaintiff’s own case that Wang signed the LP Agreements on behalf of the Plaintiff on 15 December 2019.

c. Condition 2 was satisfied by the conducts of SSGI in requesting and receiving from the Plaintiff Sum A and by Kam on behalf of SSGI taking away the LP Agreements signed by Wang on 15 December 2019.

d. Thus, it was indisputable that under Cayman Islands law the Plaintiff had effectively from 15 December 2019 acquired an interest in SSI.

43.  Mr Lam submitted that there were clearly disputes. Among others, Conyers opined that[7]

a. whether the Plaintiff’s offer to subscribe (by executing and delivering the LP Agreements) was to be accepted was at the general partner’s (ie. SSGI’s) discretion.

b. Under section 29(1) and (4) of the Exempted Limited Partnership Act (2021 Revision)(“the ELPA”), the Register shall be prima facie evidence showing the name and other details of each person who is a limited partner.

c. However, the Plaintiff was not shown to be a limited partner of SSI in the 2022 Maples Register.

d. The Plaintiff has never enjoyed any rights or benefits as a limited partner of SSI, including receiving dividends pursuant to clause 5.2 of the Partnership Agreement or financial reports pursuant to clause 2.7. Thus, and despite Kam’s claim, it is shown that SSI has never treated the Plaintiff as a limited partner.

44.  Therefore, it seems to me that there is no substantial conflict between the respective experts on the law and it is common ground between the parties that whether the Plaintiff has actually acquired an interest in SSI would depend on whether SSGI had accepted the Plaintiff as a limited partner of SSI.

45.  The dispute is on the application of the law. Kam now contends that receiving Sum A and taking away the LP Agreements signed by Wang by Kam on 15 December 2019 amounted to sufficient act or indication of acceptance on the part of SSGI. While the Plaintiff contends that the 2022 Maples Register, as a prima facie evidence as provided by the ELPA did not show that the Plaintiff was a limited partner, nor was there any objective facts showing that the Plaintiff has been in any way from December 2019 to date been treated as a limited partner. Thus, the parties are each relying on a different set of acts/conducts/factors as proving or showing that SSGI had or had not accepted the Plaintiff as a limited partner.

46.  Mr Chain submitted effectively that the opinion and conclusion of Walkers were definitive. On the present materials and in the context of this application, I do not think I can come to that conclusion.

47.  As it is not disputed that (a) the 2022 Maples Register did not show the Plaintiff as a limited partner of SSI, (b) the entitlements of a limited partner under clauses 5.2 and 2.7 and (c) the Plaintiff has not been given or received any of these entitlements in all these times, I take the view that Conyers’ such opinion and the Plaintiff’s such contention are at least arguable.

48.  I accept Mr Lam’s submission that the parties’ disputes surrounding the 2022 Maples Register and/or whether SSGI in fact had maintained its own Register and that it had in or around January 2020 caused the Plaintiff to be registered as a limited partner in that Register allegedly maintained by SSGI (as alleged in the substantially amended §6(10) of the Amended Defence and not earlier) are matters material for deciding whether the Plaintiff has in fact acquired the interest, and that they are matters for trial.

49.  It therefore seems to me very clear that whether SSGI had in fact accepted the Plaintiff as a limited partner of SSI is a question that could not be resolved in the context of a striking out application and is a matter for trial. I thus hold that Kam has not shown to be indisputable that the Plaintiff had indeed acquired an interest in SSI.

Was the Plaintiff entitled to refer the Court to its draft Amended Statement of Claim to resist this striking out?

50.  About 2 months after Kam issued the present summons on 20 November 2023, the Plaintiff issued a summons dated 30 January 2024 to apply for leave to amend the Statement of Claim (“the Amendment Summons”).

51.  The Plaintiff seeks to add the following averments by the draft Amended Statement of Claim ;

a. By §2(4), SSI and SSGI are mere facades or devises used by Kam to perpetrate fraud or evade legal obligation and liability, they are thus alter egos of Kam and the corporate veils should be lifted.

b. By §§16A to 16E, pleading the facts surrounding the disclosure made by Kam in compliance of A Chan J’s Order dated 13 January 2023, and how Kam failed to disclose and explain a number of matters.

c. By §§20A to 20F, pleading that even if the Plaintiff acquired any interest in SSI, by reasons of the matters already pleaded and the matters now particularized in these paragraphs supporting the allegations that Kam never intended to, or procured SSGI to, perform the LP Agreements and that Kam dishonestly intended at the outset to deal with the money for her own use and benefit; and therefore the LP Agreements were mere devices used by Kam and SSGI to carry out their scheme to defraud and are null and void.

d. By adding 4 sub-paragraphs to §22 pleading as particulars in support of the Plaintiff’s claim against Kam for knowing receipt and/or dishonest assistance that Kam procured SSGI to pay the money into Kam’s personal bank account when Kam well knew the money was SSGI’s.

e. By adding the particulars to §25, pleading the overt acts in support of the Plaintiff’s claim of conspiracy to injure by unlawful means were the same matters pleaded in paragraphs 4 to 20D of the Amended Statement of Claim.

f. Adding the prayers for the relief of a declaration and an injunction in respect of Sum A.

52.  It is trite that

“Where an application to amend a pleading which was sought to be struck out had been made, it would be more expedient and convenient to deal with the striking-out application on the facts as pleaded in the proposed amended pleading” (§18/19/4 at p.558 of Hong Kong Civil Procedure 2024).

53.  The Plaintiff has been seeking to have the Amendment Summons to be heard together with the present summons, but such course was refused by Kam, and a separate set of directions for filing of evidence and then fixing a hearing date was given for the Amendment Summons.

54.  Mr Lam asked the striking out be considered on the facts and matters intended to be pleaded in the draft Amended Statement of Claim.

55.  Mr Chain asked that this Court “must be vigilant towards any attempt by P to unjustifiably muddy the waters”[8], and that the Plaintiff was not entitled to refer to or rely on the draft because, according to him, the Plaintiff has made a prior and unequivocal election and indication that the intended amendment would not be so relied on.

56.  Upon examination and with respect to Mr Chain, such assertion that the Plaintiff had so elected and indicated is completely without basis, and was based on mis-quoting completely out of context part of the Plaintiff’s solicitors’ letter dated 8 April 2024 (“P’s Letter”)[9], thus :

“3.2 By solicitors’ letter of 5^th April 2024, P described the ‘implication of the intended amendments to the [SOC] under the Amendment Summons’ as ‘irrelevant’ to D’s Strike Out Summons.

3.3 In the same letter it was further expressly stated that :

‘…Any matters contained in [D’s evidence in reply for D’s Strike Out Summons] should merely be responding to the matters raised in [P’s evidence in opposition to D’s Strike Out Summons]. Any opposition or response [D] may have in respect of the Amendment Summons should be dealt with in [D’s] other affirmation filed in opposition thereto (emphasis added) ’”

(§§3.2 and 3.3 of Kam’s written submissions)

57.  P’s Letter was written in response to Kam’s solicitors’ letter dated 2 April 2024, which, however, is not included in the hearing bundles. To show context, I would quote P’s Letter from the beginning up to the relevant part:

“We refer to your letter dated 2nd of April 2024 (the “Letter”) which was sent to us after office hour at 8:22 p.m.. Unless otherwise specified or stated, we shall adopt the abbreviations and nomenclature in the Letter.

Firstly, our client is of the view that your client has more than sufficient time (being too whole months) to consider our client’s affirmation in opposition to the Striking Out Summons filed on 8 February 2024 (the “Opposition Affirmation”). As such, we do not see the reason that your client requires yet another lengthy time extension of 35 days to file the same.

Further, with due respect, your argument of requiring more time to prepare your client’s evidence in reply in the Striking Out Summons as a result of any implication of the intended amendments to the Statement of Claim in the Action under the Amendment Summons may have on the same is irrelevant. Any matters contained in your affirmation in reply should merely be responding to the matters raised in our client’s Opposition Affirmation. Any opposition or response your client may have in respect of the Amendment Summons should be dealt with in your other affirmation filed in opposition thereto. …”

58.  Thus, it is abundantly clear that in P’s Letter, it was only said that Kam’s argument was irrelevant in that Kam argued that she need more time to file the reply affirmation for the striking out because of the alleged “implication of the intended amendments”; and it was only further emphasized that the 2 sets of affirmation evidence should confine themselves to the respective applications for which a particular affirmation was filed, which was of course the proper course to take.

59.  I therefore completely rejected this totally groundless assertion that the Plaintiff has so unequivocally elected.

60.  Moreover and it can be recalled, at the time the Plaintiff filed the Statement of Claim on 17 November 2022, it has, after much fruitless chasing for a long time, finally received a copy of the allegedly executed Partnership Agreement under cover of Kam’s solicitors’ letter dated 27 June 2022 and no or little meaningful information concerning what had become of the money and concerning the operation of SSI was, up to that point, given to the Plaintiff despite its repeated requests. Limited information was then obtained by the Plaintiff through a Norwich Pharmacal Order against Chiyu Bank and the Disclosure Order granted by A Chan J against Kam.

61.  As I set out above, the intended amendments by and large sought to plead matters that occurred or became known to the Plaintiff after the Statement of Claim was filed and to align the Plaintiff’s pleaded case in light of the discovery of those matters.

62.  In my view, quite apart from the fact that it was expedient and convenient to consider the striking out on the basis of the draft amendment, it would, in the circumstances of this case, be unjust and wrong not to allow the Plaintiff to refer to and rely on the draft amendment in this application.

63.  For these reasons, at the hearing I ruled that the Plaintiff was entitled to refer to and rely on the proposed amendments to the Statement of Claim.

Clearly not a case for striking out

64.  By reason of my views and holdings set out in paragraphs 44-49 above, Kam’s striking out application would fail in limine.

65.  At the hearing, I have invited Mr Lam to address me on the assumption, taking Kam’s case at its highest, that it was shown that the Plaintiff has actually acquired an interest in SSI. And in case I am wrong regarding my said views and holdings in paragraphs 44-49 above, I would also refuse Kam’s striking out application for the following reasons.

66.  Mr Chain argued that “the real complaint and real essence” [10] and “main complaint”[11] of P’s alleged claim in fraud for Sum A was that it never received an interest in SSI, and it being shown indisputably that the Plaintiff has acquired an interest in SSI, the Plaintiff thus has obtained exactly what it bargained for under the LP Agreements, there would be no falsity and therefore no fraud[12], and the Plaintiff would have no grounds for complaint as against Kam personally[13].

67.  With respect, such an argument is clearly untenable, and is premised on Kam’s own unilateral and asserted interpretation of the Plaintiff’s claim of fraud in relation to Sum A made under the guise of identifying “the real complaint” in purported reliance on Polyline Development Ltd v Ching Lin Luen.

68.  The Plaintiff’s claim in respect of Sum A is set out in the Statement of Claim, which is straight forward.

69.  As alluded to above, the Plaintiff’s case of fraud in respect of Sum A pleaded in the Statement of Claim is that Sum A was paid into the Chiyu Account to Kam as a result and in reliance of the First Oral Representations, which are false and made with fraudulent intent, and the representation that the Plaintiff would acquire an interest in SSI was but only one of the 4 representations pleaded in §8(1) of the Statement of Claim. In this regard, I must reject Kam’s contention that this is the “real complaint” of the Plaintiff, with the attendant alleged consequence that the Court should ignore, or treat as in any way insignificant, the Plaintiff’s claim in relation to the other representations and their alleged falsity.

70.  The other 2 representations that the Plaintiff now alleges having been made by Kam and are false are (a) “The new fund would invest in newly developed real estate properties in, inter alia, London, Japan and Australia” (§8(1)(a) of the Statement of Claim) and (b) “The Defendant would provide information about the investment after the signing of the relevant agreements” (§8(1)(d) of the Statement of Claim). It is not the Plaintiff’s case, nor Kam’s, that the Plaintiff’s claim in relation to these 2 representations would rise or fall together with that in relation to the representation that the Plaintiff would acquire an interest in SSI.

71.  There is thus no basis or any reason in support of the contention that if the Plaintiff had in fact acquired an interest in SSI, then there would be no falsity regarding the other representations pleaded in §8(1) of the Statement of Claim or that there would be no fraud.

72.  Looking at this from another angle, even if the Plaintiff has a good cause of action to sue SSI and/or SSGI (and for argument’s sake, even Kam herself) for breach of the LP Agreements, as a matter of principle, the Plaintiff is not necessarily thereby precluded from suing Kam for fraud where there are further and additional materials and evidence justifying it.

73.  As have mentioned, A Chan J have considered those further and additional matters and evidence and held that the Plaintiff has a good arguable case of fraud against Kam. I respectfully agree with the learned Judge’s assessment and conclusion.

74.  The bare and uncontested facts remain that (a) since the Plaintiff paid over Sum A, SSI has not invested in any real estate properties in London, Japan, Australia or anywhere, and (b) Kam/SSGI/SSI have not provided to the Plaintiff any real information about the investment.

75.  Moreover, as confirmed by Mr Chain upon this Court’s enquiry, despite SSI being a multi-million dollar investment vehicle and SSGI its manager and HK$49,586,000 allegedly having been charged by SSGI as management fee, thus far (ie since late 2019 to date) there is no evidence indicating that any account of whatever sort or nature has been prepared by Kam/SSGI/SSI regarding the operation, assets and investments of SSI.

76.  I further accept Mr Lam’s submission that the arguably defective and very limited nature of the disclosure provided by Kam in purported compliance with the Disclosure Order and the further information so disclosed regarding the whereabouts of the money, limited though it is, are additional matters that arguably fortified the Plaintiff’s case of fraud.

77.  Kam may have good explanations or defence to all of the above mentioned matters, but all these are to be resolved at trial.

78.  Regarding Kam’s application to strike out the Plaintiff’s claim for dishonest assistance as disclosing no reasonable cause of action, as Sum A might on one view be regarded as having been received by SSI and managed by SSGI and the Plaintiff’s case is that Kam was in de facto control of SSGI and SSI and that they schemed together in the fraud, I find the further and alternative claim against Kam of dishonestly assisting SSGI and SSI, as pleaded in §§22 and 23 of the Statement of Claim, a sustainable alternative claim and ought not be struck out.

79.  For the reasons expressed above, it was in my view very clear that it has not been shown that the Plaintiff’s claim in respect of Sum A and Kam’s dishonest assistance should be struck out. I thus dismissed Kam’s striking out application.

Order indemnity costs on nisi basis

80.  My provisional view is that this application for striking out is clearly without basis and unmeritorious, that Kam 5^th was unreasonable in length and in seeking to present arguments rather than facts and arguing as if this were a trial over those issues, but which eventually were abandoned save but one point, that the resistance against allowing the Plaintiff to refer to the draft amendment is totally unreasonable and unmeritorious, and the application to seek to discharge the Mareva Injunction was based on or consequential upon similar arguments. In the round and provisionally, I consider it clearly appropriate to order Kam to pay the costs of her summons to be taxed on an indemnity basis. I also certify for 2 counsel. I so order on nisi basis which will become absolute in 21 days unless any party applies by summons to vary within that time.

The other outstanding summonses

81.  As I indicated to the parties at the outset of the hearing, there was a clear need to manage robustly the outstanding summonses which include (a) the Amendment Summons, (b) the Plaintiff’s summons dated 8 February 2024 for a proprietary injunction, disclosure and repatriation of the money (“the Proprietary Injunction Summons”), and (c) the Plaintiff’s summons dated 29 February 2024 for this striking out and discharge application and the other outstanding applications to be heard together with similar applications made in a related proceedings before the same Judge (“the Heard Together Summons”).

82.  At the end of the hearing and with the parties’ input and consent, leave was granted to withdraw the Heard Together Summons with costs of and incidental thereto be made costs in the cause, and directions were given to file evidence in relation to the Proprietary Injunction Summons and to have the same heard together substantively with the Amendment Summons before this Court on 9 August 2024.

83.  Kam should take into consideration this Court’s observations above concerning the proposed amendment to the Statement of Claim in relation to her intended opposition against the Amendment Summons.

84.  Lastly, I thank Mr Lam, Mr Chain and their junior counsel for their assistance.

Mr Douglas LAM SC leading Ms Sabrina HO and Ms Sakinah SAT, instructed by PC Woo & Co, for the Plaintiff

Mr Christopher CHAIN SC leading Mr Jing En SIM, instructed by Latham & Watkins LLP, for the Defendant

HCA 1289/2022

[2023] HKCFI 159

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

____________________

BETWEEN

____________________

________________

DECISION

________________

1.  There is before the court Plaintiff’s Summons filed on 6 October 2022 for a Mareva Injunction against the Defendant (“Kam”) to restrain her from removing from Hong Kong any of her assets up to the value of HK$253,048,682 (being the aggregate of HK$220,548,682 (“Sum A”) and a further sum of HK$32,500,000 (“Sum B”)), together with a disclosure order.

2.  There is also a Summons filed on 14 December 2022 by Kam for a stay of these proceedings pending the final determination of an arbitration (“Arbitration”) between the Plaintiff and Sunshine Success Global Inc (“SSGI”), save and except the said Injunction Summons.

Issues

3.  For the Mareva application, Kam takes issue with (i) whether the Plaintiff has a good arguable case; (ii) there is no risk of dissipation; and (iii) the balance of convenience.

4.  In respect of the Stay application, Kam contends that (i) there are many common issues between the Arbitration and this action; (ii) staying the latter would avoid inconsistent findings and save judicial resources and costs; and (iii) she has offered to become a respondent in the Arbitration and be bound by the result.

Background

5.  The Plaintiff is a Mainland company. In its dealings with Kam, the Plaintiff was acting via Mr Wang Guiwu (“Wang”). Kam (whose former name was Wang Yu Zhi) is the daughter of Mr Wang Bin, who was the former Chairman of China Insurance (Group) Company. It is not controversial that Wang Bin was a well-known figure in the Mainland business circle.

6.  Sunshine Success International LP (“SSI”) is an exempted partnership registered in the Cayman Islands on 6 July 2018. Its registered office was located at the address of Maricorp Services Ltd (“Maricorp”) since its registration until February 2022 when Maricorp was replaced by Maples Corporate Services Ltd (“Maples”) as it registered agent.

7.  From February 2022 until at least 8 December 2022, SSI’s registered office was located at the address of Maples. Sometime after 8 December 2022, SSI’s registered office was (and is) located at the address of Tricor Services (Cayman Islands) Ltd.

8.  SSGI was incorporated on 5 July 2018 (1 day before SSI’s registration in the Cayman Islands) and has been SSI’s General Partner since its registration. By virtue of being the General Partner, SSGI has been in control of SSI. SSGI was (and is) a company owned and controlled by Kam.

9.  Kam has been SSGI’s sole director since its incorporation. Sunshine Success Global Ltd, a BVI company incorporated on 15 May 2018, is the sole shareholder of SSGI. Kam is in turn Sunshine Success Global Ltd’s sole shareholder and sole director (appointed on date of incorporation).

Investment

10.  On 1 November 2019, the Plaintiff, through an agent in Hong Kong (Kong Fung Trade Ltd), transferred Sum A into SSGI’s account held with Chiyu Banking Corp Ltd (“Account”) in accordance with the instructions of Kam. The Account was opened by Kam on about 27 July 2018. She was stated in the bank record as the ultimate owner and controller of SSGI, and is the sole signatory of the Account.

11.  Sum A was for investment as a limited partner of SSI which, Wang was allegedly told by Kam, will invest in new real estate projects, including London, Japan and Australia.

12.  I shall deal with the controversies between the parties in a little more detail below. However, Kam’s evidence is that in Autumn 2019 she told one Mr Zhi that she was “operating a Cayman investment fund through a partnership structure” and that “the fund intended to invest primarily in commercial properties, private equity and stocks…”. The Plaintiff accepts that Zhi was acting as a go-between at various stages, whereas Kam seems to say that Zhi was the true investor of Sum A and the Plaintiff was merely his nominee.

13.  On 13 November 2019, there was a transfer by SSGI under the authorization of Kam of HK$420.5 million, which included Sum A, from the Account to SSGI’s savings account. According to the bank records obtained by the Plaintiff by way of a Norwich Pharmacal Order, Sum A (mixed with other funds) might have gone back into the Account in tranches but all the money were swiftly transferred out. By 4 Jaunary 2022, there was no money left in the Account. Neither SSGI nor Kam has provided any evidence as to the current whereabouts of Sum A (or Sum B).

Agreements

14.  It is common ground that on 15 December 2019, Wang on behalf of the Plaintiff signed and appended the Plaintiff’s stamp on a Partnership Agreement (經修訂和重述的有限合夥協議) and a Subscription Agreement. They were both dated 1 August 2019. Kam only appended SSGI’s stamp on the Partnership Agreement but did not sign on it on behalf of SSGI at that time. SSGI’s solicitors only provided the signed Partnership Agreement to the Plaintiff on 27 June 2022.

15.  On 15 December 2019, Wang was also given by Kam a draft Letter Agreement, but that document was not signed by either party.

16.  The Partnership Agreement contained, inter alia, the following terms :

Recital A, “[SSGI] and the Initial Limited Partner … formed [SSI] … by executing the Exempted Limited Partnership Agreement of the Partnership dated 06.07.2018 (the “Initial Limited Partnership Agreement”) …”.

Recital B, “The Partners desire to enter into this Agreement to amend and restate the Initial Exempted Limited Partnership Agreement in its entirety to reflect, inter alia, the admission of the additional Persons into the Partnership as Limited Partners thereof and to clarify certain terms and provisions related to the Partners’ ownership and management of the Partnership”.

The definitions under Clause 1.1:

“‘Initial Limited Partner’” means Brilliant Investment Consultancy Limited, Deternal Management Co., Ltd, who was admitted to the Partnership to facilitate the filing of the registration and the formation of the Partnership prior to the Initial Closing Date”.

“‘Limited Partner’” means any Person executing this Agreement as a limited partner of the Partnership …”.

“‘Partner’” means any General Partner or Limited Partner.”

“‘Partnership’” means the limited partnership formed pursuant to this Agreement, as the said limited partnership may from time to time be constituted”.

Clause 1.2 (Formation and Continuation): “The Partners hereby agree to form [SSI] ... [SSGI] shall file all amendments to the information provided in respect of the Registration ...”.

Clause 1.4 (Purpose): “The primary purpose of the Partnership is to build long-term capital appreciation generally through acquiring, holding, managing and disposing of commercial real estate investments in London, Japan, and in Australia …”.

Clause 2.7 (Report): “The fiscal year of the Partnership shall be the calendar year. As promptly as possible after the close of the first full fiscal year of the Partnership ending on 31 December, and each fiscal year of the Partnership thereafter, the Limited Partners will receive from the Partnership an annual financial report prepared by [SSGI] in accordance with the accounting standard reasonably determined by [SSGI] within one hundred and twenty (120) days of the closing of the Partnership’s fiscal year …”.

Clause 3.5 (Register and Partnership Record): “[SSGI] shall maintain or cause to be maintained at the registered office of the Partnership or such other place as it shall determine in its sole discretion: (a) … the Register which shall contain the name and address of each Person who is a Limited Partner, the date on which a Person became a Limited Partner and the date on which a Person ceased to be a Limited Partner, which Register shall be open for inspection with [SSGI]’s consent; and (b) … a record of the amount and date of the Capital Contributions of each Limited Partner and the amount and date of any payment representing a return of the whole or any part of the Capital Contributions of any Limited Partner, which record shall be open to inspection with [SSGI]’s consent”.

Sum B

17.  On 20 February 2020, the Plaintiff (through Kong Fung) transferred Sum B into the bank account of Redstone Capital Holding Corp. (“Redstone Capital”) and the bank account of Wise Bravo Ltd (“Wise Bravo”).

18.  Kam disputes that Sum B was transferred to the two companies by the Plaintiff at her request. She said that she had no knowledge of the deposits, and denies that it had anything to do with SSI or the investment in question.

Plaintiff’s case of fraud

19.  It is the Plaintiff’s case that it has been defrauded by SSGI and Kam of both Sum A and Sum B.

20.  The Plaintiff transferred Sum A to SSGI in reliance upon the “First Oral Representations” made by Kam on behalf of herself and SSGI to Wang on behalf of the Plaintiff in around September or October 2019 at a meeting which took place in a hotel in Beijing attended by Wang, Kam, her parents (“Mr and Mrs Wang”) and Zhi as follows :

(1) The Plaintiff’s funds would be invested in newly developed real estate projects in, inter alia, London, Japan and Australia;

(2) The Plaintiff would acquire an interest as a limited partner in SSI;

(3) SSGI was the General Partner of SSI and Kam its manager responsible for managing SSI’s operations;

(4) Kam would provide information about the investment after the signing of relevant agreements.

21.  The Plaintiff also relied upon the First Oral Representations for the execution of the Partnership Agreement and the Subscription Agreement. The First Oral Representations were, the Plaintiff says, reflected in the terms of the Partnership Agreement as set out above.

22.  The Plaintiff transferred Sum B into the accounts of Redstone Capital and Wise Bravo in reliance upon the “Second Oral Representations” made by Kam (acting through Mr and Mrs Wang) to Wang on behalf of the Plaintiff (through Zhi) as follows :

(1) Kam was in need of funds to repay her personal debts overseas, and asked the Plaintiff to provide the funds to her;

(2) Kam would treat the funds provided to her as the Plaintiff’s capital contribution for subscription of additional interest in SSI. She would procure SSGI and SSI to make the necessary arrangements to increase the Plaintiff’s interest in SSI.

23.  Since early 2020, Wang tried to contact Kam over WeChat without success. Through Zhi, he repeatedly asked Mr and Mrs Wang to ask their daughter to provide the Plaintiff with the executed Partnership Agreement and Letter Agreement. Wang was assured (through Zhi) by the couple that there should not be any problem. However, the requested documents were not forthcoming.

24.  In around mid-February 2022, Wang managed to contact Kam through her new WeChat account. Wang informed her that as the Plaintiff had never received the executed Partnership Agreement and Letter Agreement, or information relating to SSI, the Plaintiff wished to withdraw from SSI and transfer its interest to a third-party buyer.

25.  Between February and March 2022, Wang made repeated requests to Kam for (a) the executed Partnership Agreement and Letter Agreement; (b) basic information about SSGI; and (c) the projects and value of SSI’s investments (“Requests”). Such information was needed by the Plaintiff to ascertain the status of its investment with Sums A and B, and to allow information to be provided to third party investors to whom the Plaintiff might dispose of the investment.

26.  However, Kam put up various excuses not to fulfil the Requests. For instance, she was looking for a Cayman lawyer to make the arrangement and she was overseas and needed more time.

27.  Given Kam’s response, the Plaintiff became concerned about its investment. On 20 April 2022, the Plaintiff’s solicitors (“PCW”) issued a letter (“20 April Letter”) to both SSI and SSGI setting out the Requests again, but no response was received by the deadline of 28 April 2022.

28.  On 13 May 2022, the Plaintiff obtained a Norwich Pharmacal order against Chiyu Bank in respect of the Account. The information revealed by the documents provided by Chiyu Bank to the Plaintiff on 14 June 2022 had been summarized in para 13 above.

29.  On 30 May 2022, SSGI’s solicitors (“DP”) wrote to PCW referring to 20 April Letter but without providing any substantive reply.

30.  By a letter of DP dated 13 June 2022 to PCW, it was stated that “… in 2019 your client invested in a 15-year Cayman fund … It follows, therefore, that there is no proper basis for your client to seek disclosure orders or otherwise. Your client’s investment is secure”. No particulars was given about the investment.

31.  In PCW’s reply to DP dated 22 June 2022, concerned was expressed that SSGI’s bare assertion that the Plaintiff’s investment was “secured” was insufficient, and SSGI as General Partner had failed to provide documents or information about the structure and business affairs of SSI to the Plaintiff.

32.  By DP’s letter dated 27 June 2022, SSGI repeated that the fund which the Plaintiff invested in was for a term of 15 years and enclosed an executed copy of the Partnership Agreement.

33.  On 9 September 2022, the Plaintiff obtained disclosure of the corporate records of SSI from Maples pursuant to a Court Order of the Cayman Islands (“Cayman Disclosure”).

34.  The Register of SSI obtained under Cayman Disclosure (“Register”), which was kept at Maples (SSGI’s then registered office) revealed that the Plaintiff was never a limited partner of SSI. The Register was certified by Maples on 16 August 2022. The only partners of SSI were SSGI, Deternal Management Co Ltd and Brilliant Investments Consultancy Ltd. According to Clause 1.1 of the Partnership Agreement, Brilliant Investments and Deternal Management were admitted as limited partners only for the purposes of registration and formation of the Partnership (see para 16 above).

35.  Based on the above, the Plaintiff says that it was defrauded by Kam and SSGI of Sum A and Sum B. It has never been a limited partner of SSI and there is no evidence at all that the Sums were applied to any investment. On 5 October 2022, these proceedings and the Injunction Summons were issued against Kam. On the same day, the Plaintiff issued an Originating Summons (“OS”) for a proprietary injunction to restrain SSGI from disposing of or dealing with the sum of HK$220,548,682 (representing Sum A) pending final determination of the Arbitration.

Evasive conduct of Kam/SSGI

36.  In this application, the Plaintiff also relies upon the following conducts of Kim and SSGI.

37.  Despite having full knowledge of these proceedings and the OS, Kam and SSGI refused to accept service of the proceedings on the basis that they were out of the jurisdiction. However, at the first hearing of the Injunction Summons and an application for interim order under the OS on 14 October 2022, Kam appeared by leading and junior counsel who were instructed by her new solicitors (“GD”) without accepting service of the proceedings. That hearing was adjourned to 4 November 2022 due to the issue of service of proceedings[1].

38.  The refusal to accept service left the Plaintiff with no alternative but to incur time and costs to apply for and obtained leave to serve out of jurisdiction together with leave to serve the proceedings on GD. On 3 November 2022, Kam and SSGI eventually accepted service via GD. However, their “gamesmanship” was met with strong disapproval of this court and indemnity costs orders were made to mark such disapproval: see Order dated 11 November 2022.

39.  In respect of the Arbitration[2], the Plaintiff filed its Notice of Arbitration on 10 October 2022. SSGI failed to file its Answer to the Notice of Arbitration by the initial deadline of 9 November 2022. Such Answer was only filed on 30 November 2022.

40.  On 17 November 2022, the Plaintiff duly paid its share of the initial deposit for arbitration fees. SSGI failed to pay its share of the fees by the initial deadline of 7 December 2022. By a letter dated 22 December 2022, the HKIAC noted such failure and asked for the outstanding fees to be paid by 5 January 2022. SSGI eventually paid its share of the fees on 5 January 2022.

41.  On 17 November 2022, the Plaintiff duly filed and served its Statement of Claim. On 14 December 2022, the day before the deadline for Kam to file her Defence, she took out the Stay Summons.

Kam’s case

42.  Kam says that the Plaintiff’s case of a defrauded investor is false. Instead, it is now regretting the investment and wishes to extricate itself from it before maturity.

43.  At a meeting in or around October 2019 at a hotel in Beijing, Zhi met with Kam and discussed about SSI. Zhi expressed his interest to invest in SSI. Kam was not made aware of the Plaintiff, or Wang, and considered that the principal was Zhi.

44.  After she learned from Wang on 15 December 2022 that the Plaintiff was in her words “the nominee investor in [SSI] for [Sum A]”, Kam caused the Plaintiff to be registered as a Limited Partner of SSI in January 2020 but back-dated to 1 November 2019, the date of transfer of Sum A to SSGI.

45.  On 15 December 2019, Kam provided Wang with drafts of the Partnership Agreement, Subscription Agreement and Letter Agreement via WeChat. The two discussed the terms of those documents terms on WeChat.

46.  Later that day, Wang met Kam at the Beijing hotel. This was the first time that they met. Wang’s case that he was at earlier meetings and had representations made directly to him are untrue.

47.  More than two years then passed without Zhi, Wang or the Plaintiff taking any issue with the Plaintiff’s investment in SSI. The Plaintiff’s suggestion that attempts were made to contact Kam is disputed. In 2022, Wang suddenly started taking issue with the Plaintiff’s investment and from March 2022, conversations between him and Kam continued in which, through various arguments, the Plaintiff sought to extricate itself from the investment.

48.  A redacted copy of that the Register was exhibited by Kam. It was said that the copy of the Register produced by Maples under Cayman Disclosure was clearly the original version at the time when SSI was set up in 2018, prior to the investment made by the Plaintiff.

49.  Kam says that she is completely unconnected with the transfer of Sum B, which was unknown to her or SSGI.

Analysis

50.  I have set out a fair amount of details of the factual evidence because the issues turn largely on the evaluation of the same.

Applicable principles

51.  The applicable legal principles are well-established over which there is no dispute. In respect of Mareva relief on inter parte basis, the Plaintiff must show that it has (a) a good arguable case on its substantive claims; (b) Kam has assets within the jurisdiction; (c) the balance of convenience is in favour of granting the injunction; and (d) there is a real risk of dissipation or removal of assets from the jurisdiction which would render the Plaintiff’s judgment of no effect: see China City Construction & Development Co., (HK) Ltd v宁波佳合港湾股权投资合伙企业（有限合伙）[2020] HKCFI 1925 at [41]-[43], per DHCJ Dawes SC; Convoy Collateral Ltd v Cho Kwai Chee[2020] HKCA 537 at [35]-[54] and [77]-[78] per Lam VP (as he then was); Re Chau Cham Wong Patrick (a bankrupt) [2016] 2 HKLRD 278 at [33]-[34] per P Ng J.

52.  To render a Mareva injunction effective, the court has the discretion to order the defendant to make a statement of his assets and to give discovery of documents for the purpose of ascertaining the existence, nature and location of assets: see A v C (No 1) [1981] 1 QB 956 at 959E-961.

Good arguable case

53.  A good arguable case is simply a case which is more than barely capable of serious argument, and not necessarily one which has a better than 50% chance of success (see China City Construction, supra, [42]). It is not a very onerous burden.

54.  Plainly, it is not possible to resolve the factual conflicts on paper. However, the court must take a view on whether a good arguable case has been made out by the Plaintiff based on the evidence before it. The uncontroversial evidence will be important. The assessment should be guided by inherent probabilities and sound common sense.

55.  Both sides had referred to the WeChat exchanges between Wong and Kam, some of which may be regarded as objective and/or incontrovertible. Before dealing with some of them, I shall point out the unusual features of Kam’s case.

56.  On the evidence, Kam seems to be the only person acting on behalf of SSI or SSGI, despite the fact that the former purported to be a multi-million dollar investment vehicle managed by the latter. SSI’s registered address is that of a service provider. There is no sign that either entity has any staff, which is the suggestion derived from Kam’s WeChat messages, eg, she had to handle herself the simple task of providing a copy of the executed Agreements to the Plaintiff.

57.  More importantly, it is striking that neither Kam nor SSGI had behaved in a manner consistent with a normal and honest investment provider. Why would they refuse to provide a fully executed copy of the Partnership Agreement to the Plaintiff as soon as practicable after having received a huge sum from it? Why would they refuse to tell the Plaintiff what its money was invested in if the money was not misused? To say, vaguely, that the money was invested in a 15-year Cayman fund is not an answer expected of a normal or honest investment provider.

58.  It is common ground that neither the Partnership Agreement nor the Subscription Agreement stated that the Plaintiff’s money was to be invested in a 15-year Cayman fund. If the “fund” meant SSI, why was it not so stated by Kam’s lawyers? If it was some other legitimate fund, why was that not explained? That vague reference was premised solely upon Kam’s say so without a shred of evidence or any explanation.

59.  Ms Ho, who appeared for the Plaintiff, had made a powerful point that if the Plaintiff’s money was legitimately invested, Kam and SSGI would have been most forthcoming to dispel any misunderstanding or suspicion on the Plaintiff’s part that it has been cheated. All that needed to be shown to the Plaintiff would be the Register and some information on where the money was invested and that the investment was still held.

60.  Indeed, the point can be taken further. If the information suggested by Ms Ho were provided, it would be complete answer to this application. The would be no need for Kam to incur huge costs in defending these proceedings.

61.  In my view, these usual features must be taken into account in assessing the Plaintiff’s substantive claims, and they are indeed telling.

62.  I find the proposition that the Plaintiff was Zhi’s nominee somewhat ambiguous. Does it mean that the Plaintiff was holding the Investment on trust for Zhi? There is no reason not to, at least for the present purposes, accept the Plaintiff’s evidence that Zhi was merely acting as the go-between, in particular, vis-à-vis the Plaintiff and Mr and Mrs Wang who were acting on behalf of Kam. In any case, on Kam’s case, the Register she produced recorded the Plaintiff as a Limited Partner in respect of Sum A. Mr Manzoni SC, who appeared for Kam, accepted that Kam is not challenging the Plaintiff’s entitlement to sue in these proceedings.

63.  Whether Wang had met with Kam prior to the payment of Sum A is an important controversy because unless he did there was no basis for the Plaintiff’s case that the money was paid based on the First Oral Representations. In my view, the Plaintiff has made out a good arguable case in this regard based on inherent probabilities.

64.  It is inherently improbable for the Plaintiff not to have met and discuss with the provider for an investment of HK$220 million. On the other hand, Kam’s evidence that she did not meet Wang prior to 15 December 2019 was only supported by her own assertion in a long WeChat message. I am unable to accept that it was a piece of contemporaneous evidence in Kam’s favour. That long message was in the nature of a ranting reply by Kam to one of Wang in which he threatened to pursue, inter alia, a criminal complaint against her for fraud in the Mainland.

65.  In respect of the internal transfer of HK$420.5 million (see para 14 above), I agree with Mr Manzoni that it did not reflect any wrongdoing. However, what is alarming is that it appears that all the money had gone out of the only identified account of SSGI, and Kam and SSGI (under her control) have steadfastly refused to tell the Plaintiff anything about what had happened to its money.

66.  As regards the Register belatedly produced by Kam, I share the scepticism of the Plaintiff on its veracity. Kam’s assertion that the copy of the Register produced by Maples under Cayman Disclosure was out-of-date does not detract from the strength of the Plaintiff’s case :

(1) The copy Maples produced was a certified true copy of the original Register. Why would there be 2 originals, if the one produced by Kam is genuine?

(2) Maples had confirmed that its Register (dated 16 August 2022) was the latest version in its possession at the time when the disclosure was made, and no later version has been provided to it. Further, Maples was not aware of any update to the Register. If Kam had updated the Register as she alleged, why did she not inform Maples?

(3) Kam’s assertion that she had informed Maples that she was keeping the original Register sat poorly with the above. Had it been told, one would not expect Maples to simply produce a certified true copy of the original Register but inform the Plaintiff’s lawyers that there was another original Register not in its possession.

(4) Further, there is no record in SSI’s corporate documents that the Register was kept anywhere other than its registered office. As a matter of Cayman law, if a limited partnership’s register is kept in a place other than its registered office, a record of the address of that other place must be maintained at the registered office by the general partner.

(5) Kam’s evidence that she updated the Register in January 2020 was not properly explained and it sat poorly with her other assertion that she knew that the Plaintiff was the “nominee investor” on 15 December 2019[3]. Why did she not update the Register soon after Wong signed the Agreements with Sum A already paid?

67.  I am unable to accept Mr Manzoni’s arguments that Kam had no obligation in her personal capacity to identify what had happened to the Plaintiff’s money and SSGI’s obligation to do so is contractual and any breach should be determined by arbitration. It would be putting one’s head in the sand not to recognise that SSI was (and is) under the control of SSGI as the General Partner. In turn, SSGI was (and is) under the ownership and control of Kam. If there was a fraud on the Plaintiff, the fruits of the crime would go to Kam. In any case, these arguments do not address the Plaintiff’s case of fraud.

68.  For completeness, I am unable to accept Kam’s allegation that the Plaintiff did not contact her (or attempted to do so) after signing the Agreements on 15 December 2019 until early 2022. Common sense dictates that after having made a HK$200 million investment and without even getting a fully executed Agreement, the Plaintiff would have been anxious to find out what had happened to its investment.

69.  Wang’s evidence was that he was unable to contact Kam since early 2020. He then communicated with Mr and Mrs Wong (through Zhi) who assured him that there was no problem. Having considered Mr Wong’s reputation and influence in the Mainland, he did not think that Kam and/or SSGI were cheating the Plaintiff. He eventually managed to get in touch with Kam in mid-February 2022. Some of the communications between Wong and Kam can be seen from the WeChat messages. In particular, they evidenced Wong’s attempts to press for the Agreements and information about the investment, and Kam’s excuses. I believe that Wang’s evidence is credible.

70.  In respect of Sum B, I take into account Mr Manzoni’s criticisms that the Plaintiff’s case was based on the communications between Zhi and Mr and Mrs Wang. On the other hand, they constituted no legal inhibition to the Plaintiff’s claims. Rather, it’s a matter of weight of the evidence. I note from Kam’s WeChat messages that she did not take issue with Wang that her parents spoke for her.

71.  The most compelling piece of evidence that Sum B was paid at the request of Kam may be the payments themselves. It was a significant amount of money which the Plaintiff would not have paid unless there was a good reason for doing so. Further, as submitted by Ms Ho, the Plaintiff’s case is supported by some WeChat exchanges between Wang and Kam in which Wang referred to payments made to account provided by Mr and Mrs Wang for the repayment of Kam’s debt(s)[4]. There was no objection expressed by Kam which no doubt would have been forcefully made if what Wang said was untrue.

72.  As to Mr Manzoni’s submission that the Plaintiff had engineered a case of fraud to get out of an unwanted investment, Wang’s evidence was that the Plaintiff wanted to dispose of the investment because it was stonewalled by Kam on its requests for Agreements and information. I find the explanation reasonable and credible. Indeed, it was the most natural thing for an investor to do faced with such situation.

73.  I also reject the suggestion that Plaintiff had changed its case or that it is guilty of delay in making this application. I agree with Ms Ho that the evidence suggested that the Plaintiff acted properly in making necessary enquiries, eg, getting the Cayman Disclosure, before advancing a case of fraud against Kam.

74.  In the premises, I am quite satisfied that there is a good arguable of fraud by Kam.

Balance of convenience and risk of dissipation

75.  Once a case of fraud has been made out, the resolution of these issues is straightforward.

76.  The Plaintiff has been cheated a large sum of money. The current whereabouts of the money is unknown. Only one valuable property of Kam has been identified, a landed property in Hong Kong worth about HK$40 million. The balance of convenience is clearly in favour of granting the Injunction.

77.  As for dissipation of assets, it is trite that fraud should be taken into account by the court. I am satisfied that the Plaintiff has made out a good case to infer such risk. Kam’s stance in stonewalling the Plaintiff is, in the circumstances, a good pointer in this regard. I have taken into account that Kam has not disposed of her Hong Kong property. On the other hand, its value is only about 20% of Sum A. Properties are not liquid assets and the current market is not in favour of vendors.

Stay

78.  I have been reminded of the principles stated in Geng Feng v AI International Technology Ltd[2021] HKCFI 2701 at [18].

79.  I decline to exercise my discretion to order a stay. It is not disputed that the Plaintiff had commenced these proceedings as of right. Such right should not be deprived without strong reason.

80.  Although I accept that there is much overlap between these proceedings and the Arbitration and the advantages of having the dispute resolved by one tribunal, the evidence shows that SSGI (under Kam’s instructions) has been dragging its feet in the Arbitration. No arbitrator has yet been appointed because the parties cannot agree on whether there should be a single or a panel of 3 arbitrators. Plainly, a determined party can cause considerable delay in the resolution of an arbitration.

Disposition

81.  For these reasons, I grant the Mareva Injunction as per the draft order attached to the Summons with the following modifications: (a) under para 3, 48 hours should be allowed; (b) under para 17, costs be paid by Kam; (c) under Schedule 2, para 2, fortification should be in the sum of HK$3 million.

82.  In addition, I take the view that Kam’s disclosure obligations under the Injunction should be expanded to include Sum A, Sum B and their present equivalents. This is justified because SSGI, who received Sum A, was (and is) basically Kam’s alter ego, and Sum B was paid at Kam’s request. A perfected draft of the Injunction should be submitted to the court for approval as soon as practicable.

83.  I take the view that the costs of and occasioned by the Injunction Summons should be paid by Kam because it had been fully contested.

84.  The Stay Summons is dismissed with costs to the Plaintiff.

85.  All costs orders are made on nisi basis.

86.  Last but not least, I am grateful to counsel for their assistance.

Ms Sabrina Ho, instructed by PC Woo & Co., for the Plaintiff

Mr Charles Manzoni SC, instructed by Gibson, Dunn & Crutcher, for the Defendant