GREEN ELITE LTD (IN LIQUIDATION) v. FANG ANKONG AND ANOTHER

HCA 1779/2022

[2024] HKCFI 1349

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1779 OF 2022

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REASONS FOR DECISION

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1.  Before me to be heard together were 2 applications:

(1)  Paragraph 1 of the 1^st and 2^nd Defendants’ (respectively “Fang” and “HWH”, together “Ds”)  summons dated 5 June 2023 applying for an interim stay of this action pending the final determination of their appeal against the foreign judgment of the Court of Appeal of the Eastern Caribbean Supreme Court dated 9 January 2023 (BVIHCMAP 2022/0013)  to the Judicial Committee of the Privy Council (“the Privy Council Appeal”)  or until further order of the Court (“the Stay Application”); and

(2)  The Plaintiff (“Green Elite”)’s summons dated 28 August 2023 applying for summary judgment against Ds (“the O14 Application”).

2.  On 30 April 2024 and responding to the parties’ joint letter, this Court issued certain directions nisi, among others, on the order of speeches at this hearing.  As Green Elite’s submissions developed, it became necessary to, and this Court did during the hearing, rule that the Stay Application be heard first, with reasons given orally immediately after the ruling.

3.  At the conclusion of the hearing of the Stay Application, this Court ordered (a)  an interim stay in terms as sought with the exception that Green Elite be at liberty to apply for an order freezing or preserving the HK Funds (defined below)  for the purpose of satisfying any potential judgment in Green Elite’s favour in this action, and (b)  the substantive hearing of the O14 Application be adjourned sine die with liberty to restore after the expiry of the said stay.

4.  These are my reasons.

Background

5.  By a judgment given after trial by the Eastern Caribbean Supreme Court, British Virgin Islands (“BVI Court”)  on 17 January 2022 (and recorded in an order dated 20 January 2022 and entered on 26 January 2022)  in favour of Green Elite against, inter alios, Fang and HWH (“BVI Action” and “BVI Judgment”), Fang was ordered to pay Green Elite HK$150,000,000 and HK$8,733,490.88 with interest and HWH was ordered to pay Green Elite HK$3,450,000 with interest.

6.  Fang is the sole shareholder and director of HWH, a BVI company.

7.  By an order dated 23 February 2022 (“BVI Injunction Order”), Green Elite obtained in BVI a worldwide freezing injunction against Fang, restraining him from (a)  dealing with or diminishing the value of any of his assets in the PRC up to the value of HK$195,000,000 and (b)  dealing with or diminishing the value of any of his assets up to the value of US$24,975,717 (equivalent to HK$195,000,000 at the time)  whether they are in or outside BVI (which does not apply to Fang’s assets in the PRC)  until further order of the court.

8.  On the same occasion, Ds’ application for a stay of execution of the BVI Judgment was refused by the BVI Court.

9.  On 16 December 2022, Green Elite commenced this common law action in Hong Kong for the enforcement of the BVI Judgment.

10.  On 9 January 2023, Ds’ appeal against the BVI Judgment was dismissed by the BVI Court of Appeal (“BVI CA”).

11.  On 25 May 2023, Ds obtained conditional leave from BVI CA as of right to appeal to the Privy Council.  On the same occasion, Ds’ application to the BVI CA for a stay of execution of the BVI Judgment was refused without reasons being given.

12.  Fang’s shares in HWH have since become the subject matter of a BVI charging order which is currently subject to a limited stay pending the Privy Council Appeal.

13.  On 2 June 2023, Lisa Wong J handed down her Decision herein ([2023] HKCFI 1505)  dismissing Green Elite’s application for an interim-interim Mareva Injunction against Ds pending the substantive hearing of Green Elite’s inter partes summons herein dated 24 April 2023 applying for a Mareva Injunction pending trial or further order.

14.  Sometime in 2023, Green Elite also commenced an action in the Republic of Singapore against Fang to enforce the BVI Judgment there as against him.  By an order by consent made on 14 December 2023, the proceedings in Singapore were stayed pending the final determination of the Privy Council Appeal upon an undertaking given by Fang that he would not dispose of or diminished the value of his assets in Singapore.

15.  Very recently, on 30 April 2024, the contested hearing of Green Elite’s application for Mareva Injunction against Ds was heard before Coleman J ([2024] HKCFI 1191)  who dismissed it at the conclusion of the hearing.  The principal reason for the dismissal was that the learned Judge concluded that Green Elite has not established a real risk of dissipation of assets by Ds.  The dismissal was without prejudice to Green Elite making any similar or related application upon any contingent circumstances as may arise in the future.  One likely contingency is the possible release of the HK Funds in the future, as explained below.

16.  The Privy Council Appeal has been scheduled to be heard in November 2024, upon Ds having earlier fulfilled the conditions to the leave to appeal.

The HK Funds

17.  For the present purpose of the Stay Application, I need to briefly introduce the HK Funds and thus mention the HK Proceedings.

18.  It is Ds’ stance not seriously disputed by Green Elite that in substance the BVI Action is but one set of proceedings ventilating “the wide-ranging disputes on many fronts”[1] between the two camps - the “Delco” group of companies on one part, and Fang and his companies on the other – involving “a complex set of commercial relationships spanning a period of more than ten years”[2] following their falling out after having successfully operated together their joint venture in scrap metal recycling business in the 1990s and 2000s and the public listing of the business.

19.  Apart from the BVI Action, the Privy Council Appeal and the said action in Singapore, there are in Hong Kong 3 High Court actions litigating between the two camps, namely HCA 2943/2015, HCA 3040/2015 and HCA 2939/2016 (“the HK Proceedings”), the trial of which has already taken place and the delivery of the judgment is pending.

20.  It is common ground that (a)  HWH has paid into Court under the HK Proceedings HK$41,900,000, and (b)  Messrs Stephenson Harwood are holding in escrow Fang and HWH’s money in the sum of HK$64,067,118 (together “the HK Funds”), which are subject to the BVI Injunction Order and are placed into successive time deposits with the consent of Fang, HWH, Delco, and Green Elite, and cannot be withdrawn at any time without regard to the maturity date and/or without penalty[3].

21.  Green Elite is concerned that, notwithstanding the BVI Injunction Order, should the trial court adjudicates the HK Proceedings in any manner favourable to Fang and his companies such that all or part of the HK Funds were to be released to Fang and HWH, they would be free to dissipate them out of the reach of Green Elite.

The applicable principles

22.  Mr Wong referred to Poon Ka Man Jason v Cheng Wai To & Ors[2018] HKCFI 771 in which Q Au-Yeung J summarized the principles relevant to a stay, at §§36 to 39 :

“36.  The court has discretion, as a matter of case management, to grant a stay of proceedings generally or until a specified date or event: High Court Ordinance, Section 16(3); Order 1B, rule 1(2)(e)  of the Rules of the High Court (“RHC”).

37.  Where, as here, the action was commenced as of right, the court should only grant a stay when there are “very good reasons” and in “rare and compelling circumstances”.  The stay must not cause injustice to the Plaintiff, and the Defendants must show that continuing the proceedings would be unjust to them.  See: Zhang Xiuhong v Liu Wenchen & ors (HCA 2118/2012, 20 July 2017), §34, per Au-Yeung J, citing Ng J’s judgment in AIG Europe Ltd & ors v Fast-Link Express Ltd & ors (HCAJ 114/2014, 10 January 2017), §§9-13.  The ultimate question is what would serve the ends of justice.

38.  Exercise of discretion would involve balancing between (1)  possible wastage of Court’s time and resources and also parties’ time and costs (if there is no stay)  on the one hand and (2)  possible delay of the proceedings for a short period of time (if there is a stay)  on the other hand: see The Al Dhabiyyah [1999] 4 HKC 414, at p 420A-F.

39.  The court must bear in mind that the underlying objectives of the court is to increase cost-effectiveness of court proceedings; ensure that a case is dealt with as expeditiously as is reasonably practicable; promote reasonable proportion and procedural economy in the conduct of proceedings; and to facilitate settlement of disputes: Order lA, rule 1(a), (b), (c)  and (e)  of the RHC.”

23.  Mr Wong also cited 廈門新景地集團有限公司 v. Eton Properties Ltd and Others [2018] HKCFI 910 in which Mimmie Chan J observed, after considering Poon Ka Man Jason and The Al Dhabiyyah :

“27. With respect, I agree with the analyses and observations made by both Au-Yeung J and Waung J [in The Al Dhabiyyah], that this Court has the general and wide power under s16 (3)  to stay the proceedings before it, “where it thinks it fit so to do”, and that this is essentially a matter of sensible case management, to be decided with the objectives in mind of what is fair and just, as well as the other matters set out in Order 1A RHC as being the underlying objectives of the RHC (including the powers of management under Order 1B).

28.  In Eastman Chemical Ltd v Heyro Chemical Ltd [2012] 2 HKLRD 135, Deputy High Court Judge Lisa Wong SC (as Her Ladyship then was)  also applied the underlying objectives in Order 1A when she dealt with an application to stay proceedings pending the hearing of a winding up petition, taking into account what would serve the ends of justice between the parties and the administration of justice generally, whether a stay will cause injustice to the plaintiff, whether continuing the proceedings would be unjust, and that a plaintiff commencing proceedings as of right should not be deprived of the right to continue those proceedings in the absence of very good reasons.  No doubt, these are the applicable principles in determining whether proceedings which take place before this Court should be stayed.”

24.  Mr Wong further submitted that the Court has an equitable jurisdiction to stay the execution of a foreign judgment where there is a pending appeal from it in the foreign court, and this jurisdiction to stay may be exercised upon proper terms or subject to conditions, citing China NPL Holdings Pte Ltdv Mo Haidan [2021] 1 HKLRD 344, at §27-29, per Lam VP (as he then was)  giving the judgment of the Court :

“27. Thus, when an appeal in the foreign court is pending, Hong Kong court may enforce the foreign judgment subject to conditions which will save the interests of the appealing party. In Nouvion v Freeman (1889)  15 App Cas 1, Lord Watson made these observations at p.13:

“ In order to its receiving effect here, a foreign decree need not be final in the sense that it cannot be made the subject of appeal to a higher Court; but it must be final and unalterable in the Court which pronounced it; and if appealable the English Court will only enforce it, subject to conditions which will save the interests of those who have the right of appeal.”

28. After quoting this dicta, the learned editors of Dicey Morris & Collins, The Conflict of Laws Vol.1, 15^th Edn, at paragraph 14-026 continued:

“ So in a proper case a stay of execution would no doubt be ordered pending a possible appeal.”

29. Commenting on the same topic, the learned editors of Cheshire, North & Fawcett, Private International Law,15^th Edn, at p.550 summarized the common law position as follows:

“ … Neither the fact that the judgment may be reversed on appeal, nor even the stronger fact that an actual appeal is pending in the foreign country, is a bar to the effectiveness of the judgment in England; though where an appeal is pending the English court has an equitable jurisdiction to stay execution, which it will generally exercise. If, however, the effect under the foreign law of a pending appeal is to stay execution of the judgment, it would seem that, in the interim, the judgment is not effective in England.” (our emphasis)”

25.  Ms Mak did not dispute these principles.  She emphasized that the Court should only grant a stay when there are “very good reasons” and in “rare and compelling circumstances.”.  Ms Mak also relied on certain passages in China NPL Holdings Pte Ltd to support of (a)  her argument that great weight should be given to the refusal of a stay by the BVI CA, and (b)  her fall-back position – that if this Court was minded to grant some form of stay, this Court should proceed to hear the O14 Application substantively and then to grant a stay of execution of the judgment should the Court accede to the application, rather than granting an interim general stay of proceedings and thus adjourning the substantive hearing of the O14 Application.

Discussion

26.  Mr Wong submitted that Ds’ case for the stay was a straightforward one.  First, it would be wastage of judicial resources and the parties’ time and costs if there were no stay and the Privy Council Appeal turned out to be successful.  Second, the stay would cause no or little real prejudice to Green Elite.  Third, the refusal of stay would be unjust to Ds (a)  as Green Elite was contemplating threatening bankruptcy proceedings against Fang should it obtain the summary judgment, and (b)  it was seriously doubtful whether Green Elite, now in liquidation, would be able to pay Ds their costs (already incurred and further costs to be incurred)  should a stay be refused and the Privy Council Appeal be successful.  Fourth, a stay of execution would likely be granted even if Green Elite were successful in the O14 Application, therefore it was plainly wasteful, and also of little utility, for Green Elite to continue to press for judgment by hearing the O14 Application substantively.

27.  Green Elite did not seriously dispute that the said threat of commencing bankruptcy proceedings against Fang or the eventuality that Green Elite might not be able to pay Ds’ incurred and future costs (in case the Privy Council Appeal is successful)  were potential injustice to Ds.  It is also indisputable that there would be a wastage of costs and judicial resources if the stay was not granted and the Privy Council Appeal turned out to be successful.

28.  Green Elite put forth a number of matters and contentions to resist the stay.

29.  Green Elite emphasized that this action was commenced by Green Elite as of right, that there was no defence and therefore a stay would “deprive” Green Elite of judgment and it was, as always, an important aspect of the right of any claimant that he/she should be able to get to the fruit of judgment as soon as reasonably practicable, and thus any delay was in and of itself prejudicial to him/her. 

30.  Apart from this general right being curtailed by the stay (which Ds did not dispute), Green Elite did not put forth any other specific matters causing other prejudice to Green Elite.

31.  Green Elite referred to the fact that (a)  Ds lost twice in BVI, once before the BVI Court and another before the BVI CA (b)  Ds application for stay was refused twice in BVI, and (c)  Ds were allowed to appeal to Privy Council as a matter of right.

32.  The fact that the appeal to Privy Council was as of right per se could only be a neutral factor insofar as whether it reflects on the merits of the appeal is concerned.  When pressed as to whether Green Elite was contending that the Privy Council Appeal lacked substance and was a mere delaying ploy, that it had a low chance of success or was completely lacking in merits, Ms Mak stated that Green Elite was not so contending. She also accepted that in the materials before this Court, it could not be readily shown that the Privy Council Appeal lacked merits.  I think that was a fair and right concession, as (a)  the BVI Court, in refusing the stay, merely said, among others, that “I don’t consider this is a case where the ground of appeal is so strong”[4], (b)  while the BVI CA did not give any reasons for the refusal a stay, (c)  the draft Grounds of Appeal, Written Submissions and Supplemental Written Submissions of the Appellant for the hearing before BVI CA for leave to appeal consisted respectively of 6 pages, 12 pages and 4 pages and the latter two were settled by King’s Counsel and they appeared to be raising points of some substance.  Therefore, I would be considering the Stay Application on the basis that the Privy Council Appeal is at least arguable.

33.  Ms Mak referred to part of the analysis by Lam VP (as he then was)  in China NPL Holdings Pte Ltd concerning the rationale for the rule that “under the common law English court would not enforce the foreign judgment subject to such a stay [a stay by the foreign court]”in which the learned Judge opined :

“49. In our judgment, the present situation falls squarely within the kind of stay contemplated by Russell LJ. As held by all members of the Court of Appeal in Berliner Industriebank v Jost, supra, under the common law English court would not enforce the foreign judgment subject to such a stay. We hold that the same approach is applicable under the common law in Hong Kong.

50. Different analysis had been put forward for this rule: (a)  the stay (viz lack of present enforceability)  rendered the foreign judgment not final and conclusive (per Russell LJ in Colt Industries Inc v Sarlie (No.2), supra; Salmon and Phillimore LJJ in Berliner Industriebank v Jost, supra; Eder J in Enercon GmbH v Enercon (India)  Ltd, supra); (b)  comity (Teare J in Midtown Acquisitions v Essar Global, supra); (c)  the lack of a presently due and payable in the terms of the obligation flowing from the foreign judgment (Salmon and Phillimore LJJ as well as Lyell J in Berliner Industriebank v Jost, supra).

…

52.  As presently advised, we do not find it necessary to go that far in this judgment.  Instead, we prefer to rest our analysis on rationale (b)  and (c).  Comity and obligation are the two theoretical underpinning for the recognition and enforcement of foreign judgment at common law, see Cheshire, North & Fawcett, Private International Law,15^th Edn, at p.525-526[5].  …”

34.  Ms Mak contended that the learned Judge clearly opined that comity and obligation were the two theoretical underpinning for the recognition and enforcement of foreign judgment at common law, therefore, this Court should give a “greater weight” to the 2 refusals for stay in BVI.

35.  However, it is one thing to recognize that comity is one of the theoretical underpins for recognizing and enforcing a foreign judgment, it is quite another to say that therefore in exercising case management discretion in the enforcement proceedings of that foreign judgment in Hong Kong, the Hong Kong Court should “achieve comity” by giving a “greater” weight to the foreign court’s case management decision such as to have to follow it closely.  I do not accept China NPL Holdings Pte Ltd is authority for such a proposition, nor do I see any good reason, as a matter of principle, to do so.  I thus do not accept such contention that, as a matter of course or as a matter of principle, the BVI refusals should be given “greater” weight.  The discretion whether to grant a stay should remain flexible and facts sensitive and be exercised according to the principles summarized above.

36.  Indeed, I accept Mr Wong’s contention that, if the court is to consider what happened in the foreign court(s)  as weighty matters, as much, if not more, consideration should be given to the fact that Green Elite actually consented in Singapore to an interim stay of its action to enforce the BVI Judgment there, as the Singaporean action is of the exact same nature as this action.

37.  Green Elite explained that it consented in Singapore because Fang gave an undertaking to the Singapore Court that he would not dispose of his assets in Singapore, whereas Fang did not give any such undertaking in Hong Kong.  Be that as it may, I accept that Ds have a valid point - that it was thereby shown, that given the assets were secured in the interim, Green Elite did not really mind the delay as much as it claimed here, as it did not seek to contest the stay in Singapore based on the claimed prejudice of delay in getting to the fruit of judgment.

38.  I understand it was suggested by Green Elite that a stay might accentuate the potential risk of dissipation of assets. However, and as mentioned, the application for a Mareva Injunction taken out by Green Elite to address that very concern was dismissed by Colemen J with the principal reason that he was not satisfied that there was a real risk of dissipation of assets.  Moreover, in the course of hearing, Ds readily agreed to provide for an exception to the interim stay such as to enable Green Elite to make an application, if it was minded, to secure the HK Funds.

39.  As a fallback, Ms Mak contended that if a stay was to be granted, the appropriate course to take was to continue to hear the O14 Application substantively, which was what was scheduled to occur on this occasion, and there was no defence, and then grant a stay of execution of the judgment.

40.  Ms Mak referred to China NPL Holdings Pte Ltd in which Lam VP (as he then was)  observed obiter that

“54. … Second scenario: the foreign judgment is actually subject to a pending appeal which has been duly filed. A variant of this scenario is that steps were being taken to seek leave to appeal. According to Nouvion v Freeman, supra and Colt Industries Inc v Sarlie (No.2), supra, in none of these scenarios would the enforcing court preclude judgment being entered under the common law though in the second scenario the enforcing court may consider granting a stay of execution pending the determination of the appeal in the foreign court.”

She submitted that therefore the course, as alluded to by the learned judge in that obiter, of entering judgment and then granting a stay of execution pending the determination of the appeal in the foreign court should be adopted.  However, the learned judge only observed that “in none of these scenarios would the enforcing court preclude judgment being entered” (my emphasis), and therefore it was only said that the entering of judgment is something the enforcing court could do.  At the hearing, Ms Mak accepted, in my view rightly, that the obiter was not meant to, and did not, effect any change in the general principles governing whether to grant a stay in the present set of circumstances.

41.  Mr Wong disputed Green Elite’s claim that there was no defence.  He submitted, as is trite, that as a matter of law, there was available defence based on lack of jurisdiction, fraud, public policy or against natural justice.

42.  As this is not the hearing of the O14 Application, Mr Wong gave but a broad outline of Ds’ defence case thus, (a)  that Delco (as equal share holder of the shareholding in Green Elite with the Fang camp)  had in fact been paid US$6,275,000 for the CT shares and thus ceased to have further interest in the CT shares, (b)  the BVI Action was commenced by liquidators of Green Elite to recover the proceeds of the CT shares from Fang essentially for the benefit of Delco (as one of the contributories), (c)  the proceeds of the CT shares have been distributed to the Three Employees by Fang in fulfilment of the sole purpose of incorporating Green Elite, (d)  the payment of US$6,275,000 was an issue in the BVI Action, while the actual payment, and if so the nature of payment, of the same sum was also one of the many hotly disputed factual issues in the HK Proceedings[6] in relation to the complex commercial dealings between the two camps, and (e)  therefore it was blatantly unjust for Delco to recover something it has already received payment for and before these factual issues were resolved, and (f)  no summary judgment should be entered either on the basis that there was an arguable defence or that there were some other reasons it should not be granted.

43.  Green Elite would dispute many, if not all, of these allegations.

44.  The clear picture was that there would be substantial arguments to be heard and to be resolved and substantial numbers of documents to refer to regarding the O14 Application such that substantial judicial resources, the parties’ time and costs would need to be spent thereon.

45.  As said, Mr Wong’s point was that such would be potentially a wastage and would be of little utility as a stay of execution would very likely be granted even after this Court were to conclude that summary judgment ought to be given.

46.  Ms Mak contended that if the O14 Application were to be adjourned, there would have to be a delay of several months to retore its substantive hearing if the Privy Council Appeal were to be unsuccessful.

47.  In the scheme of things including (a)  disputes between the two camps have been subjected to litigations for 9 years since 2015, (b)  many of the underlying factual disputes are close to some form of resolution in the HK Proceedings, (c)  as noted in §16 of the Decision of Lisa Wong J herein dated 2 June 2023, Green Elite was “complacent and laid back” in its enforcement of the BVI Judgment in Hong Kong as shown by the procedural chronology of this action, (d)  the Singaporean action was stayed by consent of Green Elite pending the Privy Council Appeal, (e)  there is no specific complaint of prejudice save general delay, and (f)  there is no risk of dissipation of assets, and (g)  the potential injustice to Ds, I considered a general stay appropriate and I did not consider the several months’ potential delay mentioned in the preceding paragraph was of much significance.

48.  Thus, I was of the clear view that the proper balance and sensible case management decision was to grant the stay with the said exception and to adjourn the substantive hearing of the O14 Application to be heard, if at all, after the expiry of the stay.

49.  I thank Mr Wong, Ms Mak and Mr Phang for their able assistance.

Ms. Esther MAK, instructed by Tanner De Witt, for the Plaintiff

Mr. William WONG SC leading Mr. Roger PHANG, instructed by Zhong Lun Law Firm, for the 1^st and 2^nd Defendants

HCA 1779/2022

[2024] HKCFI 1191

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1779 OF 2022

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D E C I S I O N

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A.  Introduction

1.  The Plaintiff (“Green Elite”) makes an application for a Mareva injunction, argued today on the last day of April 2024, but on an inter partes summons issued over one year ago on 24 April 2023, arising out of these proceedings commenced four months before that on 16 December 2022, seeking to enforce by way of common law enforcement a judgment (“BVI Judgment”) made by the British Virgin Islands Court (“BVI Court”) almost one year before that on 26 January 2022.

2.  On that chronology alone, it might be thought that the application faces inevitable difficulties.

3.  An added hurdle arises from the fact that the identified Hong Kong assets which trigger the making of enforcement proceedings in Hong Kong (“HK Funds”) are already in effect ‘frozen’ and incapable of dissipation, at least pending a decision awaited following a trial in Hong Kong in other proceedings involving the 1^st and 2^nd defendants (“Fang” and “HWH” respectively).

4.  The summons first came on for hearing before Lisa Wong J on 28 April 2023, when the only point of contention between the parties was whether Green Elite was entitled to interim-interim protection during the period of adjournment pending the substantive argument to be fixed before me.

5.  In her Decision dated 2 June 2023, Lisa Wong J declined to grant Green Elite any interim-interim Mareva relief, as she was not persuaded that the threshold had been met for the grant of such relief against either Fang or HWH. In particular, she was not satisfied as to the existence of a real risk of dissipation, an essential element that an applicant for Mareva relief must establish by cogent evidence.

6.  Ms Esther Mak, Counsel for Green Elite, rightly points out that Lisa Wong J’s Decision is no bar to the grant of remedy at this substantive argument. I agree that the argument needs to be considered in its present circumstances, which may include matters which have occurred over the past 12 months or so, since the hearing before Lisa Wong J.

7.  Ms Mak has also addressed the five main points of opposition raised by Mr William Wong SC, leading Mr Roger Phang of Counsel, who act for Fang and HWH, to which I shall return as necessary.

8.  This is my Decision.

B.  Background

9.  The necessary background can be set out quite shortly.

10.  The BVI Judgment was given against (amongst others) Fang and HWH after a nine-day trial at which Fang and HWH were represented. Ms Mak submits that the BVI proceedings provide important context of the risk of dissipation, and I agree that the context is capable of being taken into account in the assessment of that risk now.

11.  The proceedings – incidentally, commenced as long ago as 14 December 2018, by the then recently appointed Liquidators – concerned Green Elite’s claims for payments of the sums of (1) the HK$150 million sales proceeds of certain shares (together with interest of around HK$20.6 million accruing) (“Sales Proceeds”); (2) a debt owed as a director (“Director’s Debt”) in the aggregate sum of around HK$10.22 million (inclusive of interest accruing); and (3) dividend payments plus interest in the aggregate sum of about HK$4 million (“Dividend Payments”).

12.  The claim was based upon allegations, amongst other things, that Fang had breached his fiduciary duties as director of Green Elite, and that he distributed the Sales Proceeds for an improper purpose, and further or alternatively failed to comply with the approval and authorisations required in the relevant BVI statute.

13.  In the BVI Judgment, the BVI Court found that:

(1)  The relevant distributions were not properly authorised by Green Elite, having never been approved at Board level, formally or informally.

(2)  Fang is liable for the money as a loan which appeared in Green Elite’s accounts.

(3)  HWH is liable for the Dividend Payments – but not the claim to the Sales Proceeds and the Director’s Debt.

14.  The BVI Judgment was subsequently upheld in its entirety on appeal, though Fang and HWH have been granted leave to appeal to the Privy Council. I understand the grant of leave was effectively automatic, and gives no indication as to any view of the merits of the appeal, which may not be strong against the concurrent findings of the two lower courts.

15.  Nevertheless, it is in the face of that further appeal that Fang has chosen not to satisfy the BVI Judgment.

16.  In January 2022, leading to an order dated 23 February 2022, but entered on 17 March 2022, Green Elite applied for and obtained injunctions in the BVI. The BVI Court ordered Fang (1) not to dispose of, deal with, or diminish the value of any of its assets in the PRC (apparently intended as a reference to include Hong Kong) up to the value of HK$195 million, and (2) not to deal with or diminish the value of any his assets up to the value of almost US$25 million, whether they are in or outside BVI (which does not apply to Fang’s assets in the PRC).

17.  The BVI Court also ordered Fang to give ancillary asset disclosure, and to identify Green Elite’s legal representatives of the amount concerned and the source of monies used by him within the ordered allowance for ordinary living expenses and a reasonable amount for legal advice and representation.

18.  The current proceedings were commenced on 16 December 2022. The current summons was issued on 24 April 2023. By the summons, Green Elite seeks domestic Mareva injunctions against each of (1) Fang up to HK$180,890,529.70 and (2) HWH up to the same ceiling or alternatively HK$4,040,186.30. The application against HWH is made invoking the so-called Chabra jurisdiction, where Fang is the sole owner and director of HWH.

C.  The Battleground

19.  It is, perhaps, helpful first to set out the battleground between the parties. The five points to which I have already made reference raised by Mr Wong as grounds of opposition to the application are as follows:

(1)  there is no risk of dissipation of assets including, in particular, the HK funds sitting in court or being held in escrow;

(2)  Green Elite refuses and is unable to give the usual unlimited cross-undertaking as to damages;

(3)  the terms of the injunction sought are not ancillary or back to back with the injunction order granted by the BVI court, but conflict with it and seek to obtain what the BVI court refused to grant;

(4)  the ancillary disclosure order sought against Mr Fang is vexatious and unnecessary as he has already been ordered by the BVI court to disclose his assets and has complied with that order, and the ancillary disclosure order sought against HWH must fall together with the injunction sought against it which was refused by the BVI court; and

(5)  the application smacks of an attempt by Delco to have a second bite at the cherry in the event that the court rejects its earlier application for similar orders.

D.  Applicable Principles

20.  The principles for the grant of injunctions in aid of or ancillary to a foreign judgment are well settled. While the present application for an injunction is brought in the action for the common law enforcement of the judgment, the BVI judgment, the case law for section 21M of the High Court Ordinance applications is relevant to the present injunctive relief sought in aid of the enforcement of a foreign judgment.

21.  As Ms Mak submits, and I accept to be correct, first, the courts have in the past stated that the most appropriate place to make orders affecting assets is where the assets are located: see, for example, Crédit Suisse Fides Trust S.A. v Cuoghi [1998] QB 818 at 827C-D. Essentially, the idea is to bring those assets within the power of the court of the place where the assets are located.

22.  Secondly, a back-to-back Mareva injunction can be granted even if a worldwide Mareva injunction was granted in the primary court.

23.  Thirdly, though there is no exhaustive list of considerations which may cause it to be thought expedient for the court to grant back‑to‑back relief, one factor to bear in mind is whether the making of the order would interfere with the management of the case in the primary court in the sense that it would give rise to disharmony, confusion, or the risk of conflicting, inconsistent, or overlapping orders in other jurisdictions.

24.  Fourthly, there is no hard and fast rule that the applicant must seek injunctive relief which completely mirrors the relief sought in the primary court before it can apply for an injunction in aid of foreign proceedings, and here I remember that the assets which are the main trigger for the application include the HK Funds, but reference has been made to other assets of Fang and HWH which either are or may be in Hong Kong.

25.  As regards the principles relevant for the grant of a domestic Mareva injunction in Hong Kong, they are also well settled. It falls upon the applicant to satisfy the court that: (1) there is a good arguable case; (2) there is a real risk of dissipation or removal of assets so as to render any judgment nugatory; (3) the balance of convenience lies in favour of granting a Mareva injunction; and (4) there are assets within the jurisdiction.

26.  As to whether there is a risk of dissipation, that may be inferred from, to adopt a phrase which is commonly used, ‘unacceptably low standards of commercial morality’ on the part of the defendant. But that has, perhaps, been better explained by the Court of Appeal in Convoy Collateral Ltd v Cho Kwai Chee [2020] 6 HKC 81, at §§35 to 53.

27.  The ultimate question is whether the applicant succeeds in showing objectively there is a solid basis for concluding that there is a real risk of unjustified dissipation of assets by a defendant. That question is to be answered by examining the evidence holistically.

28.  Evidence of dishonest and fraudulent conduct or other serious wrongdoings which form the basis of the claims, and which reflect adversely on the integrity of the defendant, could point powerfully towards an inference of such risk. Since the assessment is in respect of the risk of dissipation as opposed to the fact of actual dissipation the exercise necessarily involves an evaluative and predictive judgment. Thus, the evidential burden can be satisfied by drawing proper inferences from a holistic consideration of all the circumstantial materials that are indicative of risk.

29.  Of course, it is also well settled that where a judgment has already been entered against a defendant, the court will be more ready to grant what is called a post-judgment Mareva injunction than in circumstances prior to judgment, because not least the first limb of the requirements for the grant of a domestic Mareva injunction is well satisfied by a prior judgment in favour of the plaintiff.

E.  Risk of Dissipation

30.  The main battleground in the argument between the parties relates to whether there is or is not a real risk of dissipation.

31.  Ms Mak says there is a solid basis for concluding that there is, indeed, a real risk. First, she points to the fact of the BVI injunction order which shows that the BVI Court, as the primary trier of fact with the closest contact with Fang and HWH, was satisfied that there is a risk of dissipation when it granted the injunctions there.

32.  Reference has been made to the passage in the decision of Jack J when granting the injunctions, where he said that:

Although I have acquitted Mr Fang of dishonesty in the judgment which I delivered after the trial, nonetheless there were significant criticisms to be made of his behaviour, and that although I found him not to be a dishonest man that does not mean that I should proceed on the basis that he is going to happily pay his judgment debts.

33.  Secondly, Ms Mak relies on the fact that Fang has refused to satisfy the judgment when he has the apparent ability to do so and that, she says, is a significant factor indicative of risk of dissipation. The refusal to satisfy the debt at least identifies a refusal to recognise an immediate liability. Notwithstanding that, she says Fang and HWH must recognise that the chances of successfully appealing the judgment are, on current evidence, at least slim – and where the making of the appeal does not operate as a stay. Indeed, Fang has twice attempted to obtain a stay in the BVI, but both attempts were unsuccessful.

34.  Thirdly, she points to the matters giving rise to the subject matter of the BVI proceedings themselves, which she says are identified as having been suspicious and where, for example, Jack J concluded that there had been a cover-up and there would have been no need for a cover-up if there was nothing to hide.

35.  Fourthly, Ms Mak relies on various acts which she says indicate Fang’s intention to take advantage of every opportunity to resist enforcement of judgment and evade responsibility to pay a judgment creditor what has been found to be due.

36.  She points to the refusal to provide an undertaking which merely sought to confirm that the HK Funds would not be dissipated in the event that the Hong Kong proceedings were determined in Fang and HWH’s favour. Of course, Mr Fang says it is precisely because the BVI injunction has been made in worldwide terms that any further undertaking is pointless, but Ms Mak says the opposite should be the case: because it was given, he should have agreed to the further injunction in Hong Kong.

37.  Ms Mak also refers to what are clearly at least strongly arguable pieces of evidence to show a degree of evasion in accepting service of these proceedings by Mr Fang.

38.  As to the so-called ‘stable door’ argument, where Fang has argued that there is no real risk of dissipation because he would have dissipated the assets a long time ago if he wished to, Ms Mak says that the remarks made in Lisa Wong J’s judgment were made in the context of the then only live question of whether an interim-interim injunction should be given as an urgent temporary stop-gap measure, and that those comments have no weight in the present proceedings. In any event, a real risk of dissipation is not determined by whether there could have been dissipation, but whether the evaluative and predictive judgment identifies that there is a real risk of dissipation.

39.  As to the HK Funds, Ms Mak identifies that they could not have been dealt with or dissipated in any event But that seems to me to be an argument that must cut at least both ways.

40.  For his part, Mr Wong says the court should place great weight on the fact that it is not disputed by Green Elite that the HK Funds are currently not subject to any risk of dissipation, and that what Green Elite is really arguing is that there either will be or could be a real risk of dissipation once the trial judgment in the Hong Kong proceedings is handed down, if the outcome is in favour of Mr Fang and HWH. But, says Mr Wong, that is a speculative contention.

41.  But, more importantly, irrespective of the outcome of the Hong Kong proceedings, there are real practical hurdles in at least any immediate dissipation steps taking place. Firstly, as regards the sum of HK$41.9 million paid into court in one of the actions dealt with at that trial, those moneys cannot come out of court without an order of the court. Secondly, as for the funds held in escrow by the solicitors, they are being placed into successive time deposits with the consent of Fang, HWH, Delco, and Green Elite, and cannot be withdrawn at any time without regard to the maturity date and/or without penalty. Further, the solicitors, of course, know of the terms of the BVI injunction order which is in worldwide terms and would cover Mr Fang’s assets in Hong Kong, a point which seems to me to have real weight.

42.  I also take into account that Green Elite is not relying on any actual act of dissipation, notwithstanding the lengthy period of many years over which relevant litigation has been going. Further, I take into account the points also relied upon by Lisa Wong J in relation to the timing of and, to an extent, the delay in the making of this current application.

43.  Less weight seems to me should be given to the other matters relied upon by Mr Wong. But in the overall assessment it seems to me that Green Elite has not established a real risk of dissipation of assets.

44.  Ultimately, it is making what can be described as a contingent application (1) in circumstances where the assets over which it makes that application are, in any event, a subset of assets already frozen in the foreign jurisdiction, and (2) in circumstances where the court is less concerned in Hong Kong to be in a position to take control over those assets insofar as it does not already have effective practical control over those assets.

45.  That finding having been made by me, that is effectively determinative of the application, but I will deal with the other points shortly.

F.  Other Points

46.  On the point relating to balance of convenience and whether, as Mr Wong argues, Green Elite would be overprotected if an injunction in Hong Kong were to be given in addition to the injunction orders already granted in the BVI, I accept Ms Mak’s submissions that the degree of additional security interest, if that is the proper term for it, is but the inevitable consequence of the making of a mirroring or back-to-back order, which would not in any way be improper.

47.  I do not think there are real as opposed to theoretical problems as regards the amounts frozen and/or as would be used to satisfy any judgment, if it is maintained on the Privy Council appeal, where there are various mechanisms for dealing with those circumstances so as to ensure that the judgment would be satisfied only once from whatever assets it is appropriate to seek that satisfaction. I bear in mind, again, that this is an application that is being made in the post-judgment context.

48.  As to the point about cross-undertaking on damages, there is no real dispute that the question of any cross-undertaking is a matter within the discretion of the court. Ultimately, the test whether a cross-undertaking or a limited form of cross-undertaking should be taken is a matter of fairness. Again, it seems to me to be highly relevant in this context that the application is being made post-judgment and, indeed, as part of a step to seek to be able to enforce that judgment.

49.  I take into account also that in the BVI proceedings, the court there accepted what seemed to be common ground between the parties that it was appropriate that a cross-undertaking be given by Green Elite, but limited to its net realisable assets. In the overall circumstances of the matter, taking those features into account, had I granted an injunction, I would not have required any cross‑undertaking from Green Elite or its liquidators in Hong Kong.

50.  As regards the question of any ancillary disclosure order, it seems to me to follow that if I were persuaded that it is appropriate to grant a Hong Kong Mareva injunction in order to bring Hong Kong assets within the overall control of the Hong Kong court – notwithstanding that they are a subset of the assets subject to the worldwide Mareva granted in the BVI – I would order disclosure in Hong Kong to ensure that the Hong Kong court is in the best position to carry out the relevant function.

51.  Of course, I see the argument that there is no point in giving – and it would be vexatious to Mr Fang to be required to give – disclosure where he has already given that disclosure in the BVI and where there is at present no suggestion that there has been a failure to comply with the requirements for disclosure of the Hong Kong assets within the overall disclosure required by the BVI injunction order. But, on the other hand, it seems to me in the exercise of my discretion that the contrary argument is more persuasive: if he has already given that disclosure, and it is said to be accurate, then there is little difficulty in providing it again to the Hong Kong court as an ancillary adjunct to ensure the policing of and proper enforcement of an injunction which the Hong Kong court would, on that hypothesis, have decided should be granted.

52.  As to Mr Wong’s last point about the second bite of the cherry, I do not think that that would have been determinative in any event, although I see little merit in that particular argument. It seems to me that there are differences between the application made by Delco and the application now made by Green Elite. But I have taken into account in my assessment, in particular as regards to the real risk of dissipation, that the Delco application has been made and what are the potential consequences of that application are dependent upon the potential consequences of my judgment in the trial of the three actions which judgment is, I know, eagerly awaited as it, unfortunately, has been for some time.

G.  Result

53.  In conclusion, I dismiss the application, albeit that I do so without prejudice to any future circumstances where a similar or related application might be felt to be appropriate in future, in any contingent circumstances as may then arise.

(Submissions re on costs)

H.  Costs

54.  As to costs, Mr Wong submits that the appropriate costs order is that the costs should be paid by the plaintiff to the defendants on an indemnity basis with certificate for two Counsel, whereas Ms Mak suggests that the correct order to make is that the costs should be the defendants’ costs in the cause without certificate for two counsel, that is that taxation would proceed on the basis of only one Counsel.

55.  The argument between the parties is essentially in relation to three points.

56.  The first point arises because Mr Wong says that in the undertakings given by Green Elite to the BVI Court as what might be called part of the ‘price’ of obtaining the BVI injunction orders, Green Elite gave, amongst others, the following undertaking, namely, that it would not, without the permission of the court, seek to enforce the order in any country outside BVI, or seek an order of a similar nature, including orders conferring a charge or other security against the defendants or the defendants’ assets – provided that, for the avoidance of doubt, nothing in the order or undertakings prevents the claimant from taking steps to execute or enforce the trial order save as prohibited by paragraph 1 of the order.

57.  Mr Wong submits that the proviso obviously does not bite on an application such as the present domestic Mareva application. Therefore, he says, Green Elite has acted in breach of the undertaking given to the BVI Court in making an application outside BVI to seek an order of a similar nature to the order obtained in the BVI.

58.  Ms Mak points to the fact that this is a relatively new point raised by Fang and HWH in one of the affirmations and, in particular, in the skeleton argument filed by Mr Wong, and that no steps have been taken by them in the BVI if it is really thought that Green Elite has acted in breach of the order or undertakings given so as to obtain that order. She also makes the submission that, in any event, the application here is to be considered on its own merits, not least where what was being sought was an order in relation to what is, in effect, a subset of the matters dealt with within the BVI injunction order.

59.  It seems to me that whether or not there has been a breach of the undertaking given to the BVI Court is a matter for the BVI Court to determine. But, if I were to form the firm view that there has been a breach, I might take that into my discretionary consideration when dealing with costs in the very broad discretion that arises on a decision relating to costs. But my preliminary view would be, even if there was a breach of that undertaking where what is being sought was a mirror order over a subset of the matters covered by that order, it is difficult to imagine that the BVI Court, if asked, would not have granted permission to make this application. Of itself, I do not think that is a matter which weighs heavily in pointing towards an indemnity basis of a costs order in these proceedings.

60.  The second point relates to the first undertaking given to the BVI Court, namely, in effect, as to the extent of the cross‑undertaking that was given. I have already decided that point against Mr Wong and the practical reality is that the cross-undertaking given in the BVI proceedings could only be to the extent of Green Elite’s assets at the time that any cross-undertaking would be acted upon or any claim for compensation under that cross-undertaking would be made.

61.  I have borne in mind a point that was made in argument earlier, that the practical reality is that Green Elite’s assets are essentially reflected in the value of the BVI Judgment so that if the appeal to the Privy Council fails, then the likelihood of any cross-undertaking being activated would be nil, and if the appeal to the Privy Council succeeds then Green Elite’s assets are, in practical terms, reduced to zero or almost zero.

62.  As to the third point, Mr Wong strongly makes the submission that Lisa Wong J gave due warning to Green Elite when she decided not to grant interim-interim relief largely on the basis of her being not satisfied that there was a real risk of dissipation because of the delay in the making of the application.

63.  I do not think it is necessary for me to go back to the individual parts of Lisa Wong J’s reasoning in her Decision. But I think it is fair to say that obviously the timing of matters weighed heavily in her consideration. Further, of course, the absence of any evidence of there having been any actual dissipation at least up until that point weighed heavily in her decision making, albeit that she was applying the relevant test for the grant or refusal of interim-interim relief at that time, which may not be exactly same test as is applicable on the substantive argument which I have heard today.

64.  Ultimately, I am not persuaded that there has been such abuse or other circumstances as warrant an indemnity costs order. But I am persuaded that it is entirely appropriate that the costs should include a certificate for two Counsel in the circumstances of the case and the way in which it has been argued.

65.  Mr Wong has invited me to engage in a gross sum assessment, which I am content to do. This is a standalone application which has been dealt with on a basis which gives rise to an immediate costs order, and the sooner that the costs assessment is dealt with in an appropriate way the better.

66.  Therefore, I suggest that Mr Wong’s side put forward a skeleton bill or a statement of costs for summary assessment within 14 days from today, and that Ms Mak's side have 14 days to list out any objections. I will then deal with the summary assessment on the usual relatively broad-brush basis on paper without any further submission, unless I invite it.

Ms Esther Mak, instructed by Tanner De Witt, for the plaintiff

Mr William Wong SC and Mr Roger Phang, instructed by Zhong Lun Law Firm LLP, for the defendants

HCA 1779/2022

[2023] HKCFI 1505

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1779 OF 2022

________________________

________________________

________________________

________________________

DECISION

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1.  This is a common law action for the enforcement of a judgment (“BVI Judgment”)  given by the Eastern Caribbean Supreme Court, British Virgin Islands (“BVI Court”)  on 17 January 2022[1] (and recorded in an order dated 20 January 2022 and entered on 26 January 2022)  in favour of the plaintiff (“Green Elite”)  against, inter alios, the 1^st defendant and the 2^nd defendant (“Fang” and “HWH” respectively and “defendants” collectively).

2.  Fang is the sole shareholder and director of HWH, a BVI company.  Fang’s 50,000 shares in HWH has since become the subject-matter of a charging order which is currently subject to a limited stay pending the defendants’ appeal to the Privy Council (“BVI Charging Order”).

3.  The BVI Judgment has since been wholly upheld on appeal.  The defendants’ application for leave to appeal to the Privy Council was, as at the hearing before me on 28 April 2023, listed to be heard sometime in May 2023.

4.  In the meantime, by an order dated 23 February 2022 and entered on 17 March 2022)  (“BVI Injunction Order”), Green Elite further obtained in the BVI a worldwide freezing injunction against Fang[2], restraining him from (1)  dealing with or diminishing the value of any of his assets in the PRC up to the value of HK$195,000,000 and (2)  dealing with or diminishing the value of any of his assets up to the value of US$24,975,717[3] whether they are in or outside BVI (which does not apply to Fang’s assets in the PRC)  until further order of the court. 

5.  To facilitate the enforcement of the BVI Injunction Order, the BVI Court has ordered Fang to disclose in writing to Green Elite’s BVI legal representatives details of (1)  all his assets outside the PRC having a value over US$50,000, regardless of how they are held; and (2)  the actual amounts and sources of his living expenses and legal costs.  See §§14 and 17 of the BVI Injunction Order.

6.  By an inter partes summons issued herein on 24 April 2023 (“Summons”), Green Elite seeks domestic Mareva injunctions against each of (1)  Fang up to HK$180,890,529.70 and (2)  HWH (invoking the Chabra jurisdiction[4] on the ground of Fang’s sole ownership and control)  up to the same ceiling or alternatively, HK$4,040,186.30.

7.  At the call-over hearing on 28 April 2023, with the parties’ agreement, I ordered the substantive argument of the Summons to be adjourned to a date to be fixed before Mr Justice Coleman[5] and gave directions for the filing and service of affidavit evidence for use at the adjourned hearing.

8.  The only point of contention between the parties is whether Green Elite is entitled to interim interim protection during the period of adjournment.

9.  It has become fashionable nowadays for a party seeking interlocutory injunctive relief under an inter partes summons which has to be adjourned for substantive argument to invariably ask for interim interim remedy before the disposal of the summons.

10.  However, as explained by the Court of Appeal in China Shanshui Cement Group Limited v Zhang Caikui, CAMP 58/2018, unreported, 19 July 2018; [2018] HKCA 409 at [13] per Lam VP (as he then was), the grant of interim interim relief is meant to be an urgent temporary stop-gap measure and the circumstances were such that the court has to do practical justice on the balance of fairness even though it may not have sufficient time to consider the matter fully.

11.  Notwithstanding Miss Esther Mak’s able submission, I am not persuaded that Green Elite has met the threshold for the grant of an interim interim Mareva injunction against either of the defendants on the facts of this case, particularly those pertinent to the existence or otherwise of a real risk of dissipation, which is of course an essential element that an applicant for Mareva relief must establish by cogent evidence.

12.  Green Elite has not identified, and is not relying on, any act of actual dissipation by either of the defendants. 

13.  Rather, it invites the court to infer the existence of a real risk of dissipation from Fang’s “evasive” conduct in, inter alia:

(1)  not satisfying the judgment debt under the BVI Judgment (“BVI Judgment Debt”)  which remains wholly outstanding;

(2)  failing to disclose a number of assets in breach of the asset disclosure requirements imposed by the BVI Injunction Order;

(3)  failing to disclose his living expenses and legal costs in breach of the expenses disclosure requirements imposed by the BVI Injunction Order;  

(4)  initially evading Green Elite’s attempts to serve him personally while at the same time refusing to instruct solicitors to accept service on his behalf in this action;

(5)  refusing to undertake not to use the sums of (a)  HK$41,900,000 paid into court by HWH under the Related Hong Kong Proceedings and (b)  HK$64,067,118 held in escrow by the defendants’ former solicitors in their client account (“HKFunds” collectively)  pending satisfaction of the BVI Judgment Debt; and

(6)  declining to give an undertaking in terms similar to the BVI Injunction Order.

14.  For the reasons following, it is unnecessary, and I do not propose, to pass judgment on whether the aforesaid acts and/or omissions by Fang, whether on their own or together with the circumstances giving rise to Green Elite’s causes of action litigated in the BVI, would support an inference of a real risk of dissipation by the defendants.

15.  First:

(1)  The action in which the BVI Judgment was given was commenced on 14 December 2018.  The trial took place in October and November 2021, with judgment being rendered at first instance on 17 January 2022. 

(2)  There is no evidence before me that Green Elite had seen any need to apply to the BVI Court for any pre-trial Mareva relief or to invoke the Hong Kong courts’ jurisdiction under s 21M of the High Court Ordinance (Cap 4)  in aid of the proceedings in the BVI.

(3)  Indeed, Green Elite was contented to wait for 11 months after the BVI Judgment until 16 December 2022 to issue the writ of summons herein. 

(4)  Green Elite then waited 4 more months until 12 April 2023 to apply for leave to issue a concurrent writ and serve the same on HWH out of the jurisdiction in the BVI.  There is no suggestion of any difficulty in locating HWH’s address for service.  Leave was granted on 20 April 2023.

(5)  Green Elite finally took out the Summons on 24 April 2023.

16.  Such procedural chronology, which I would describe as complacent and laid back, hardly conveys the necessary urgency required for the grant of interim interim relief.

17.  It is no answer for Green Elite to reiterate the undisputed principle that the most appropriate place to make orders affecting assets is the place where the assets are located.  The matter under scrutiny is whether the applicant for interim interim relief (i.e. Green Elite)  has satisfied the requirements laid down and followed by the courts of the place where the assets to be frozen are located (i.e. the Hong Kong courts)  in exercising their power to grant such relief.

18.  Second, unlike the usual case where an application for a Mareva injunction is made ex parte without notice to the opposite party, the Summons (rightly in the particular circumstances of this case)  takes the inter partes form.  The undeniable harsh reality is that had the defendants been minded to do so, they would have had ample opportunities to unjustifiably dissipate their assets since December 2018 (when litigation began in the BVI)  and before the BVI Injunction Order.

19.  Third, Green Elite is presently protected by:

(1)  the BVI Injunction Order which is worldwide in terms indisputably covering any assets that Fang has in Hong Kong;

(2)  the BVI Charging Order (although the value of Fang’s shares in HWH is at this moment unknown); and

(3)  the HK Funds which will remain secure before judgment is handed down in the Related HK Proceedings.  I do not accept Green Elite’s suggestion that it would be difficult for it to obtain timely information as to when Coleman J would hand down judgment.  With respect, those acting for Green Elite can have the daily cause of the High Court checked everyday.  Alternatively, out of abundance of caution, they may write to Coleman J’s clerk to alert his lordship of Green Elite’s application by the Summons and interest in the HK Funds and to invite the learned judge not to make any immediate order affecting the HK Funds without first hearing Green Elite.

20.  For these reasons, I decline to grant Green Elite any interim interim Mareva relief.

21.  But for the disagreement on interim interim relief, the parties would have eventually agreed on the adjournment of the substantive hearing of the Summons and the timetable for the filing and service of affidavit evidence.  I therefore award, on a nisi basis, the costs of the hearing on 28 April 2023 to the defendants, to be assessed summarily on paper by me.  The defendants are to file and serve a statement of their costs of such hearing within 7 days from the date of this decision.  Green Elite shall have 7 days thereafter to file and serve a list of its objections, if any.

Miss Esther Mak, instructed by Tanner De Witt, for the plaintiff

Mr Roger Phang, instructed by Zhong Lun Law Firm LLP, for the defendants