Galsworthy Ltd v. Liu Cheng Chan and Others

HCA 560/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 560 OF 2017

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BETWEEN

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D E C I S I O N

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1.This is the Plaintiff’s application for leave to appeal against my order made this morning discharging the Mareva Injunction against the 2^nd Defendant (Decision).

2.The skeleton submissions in support of this application is a re-run of the arguments ventilated and ruled upon this morning (see Decision).

3.I regret to say, with respect, that there is a failure by the Plaintiff to properly understand the principles of Mareva relief.  It seems to be of the view that there should be preserved in respect of each Defendant US$60 million of his/her assets until the conclusion of this action by which time the Plaintiff may make a choice over the individual Defendant against whom to enforce its judgment.  The proposition is too absurd and so fundamentally against the principles to merit serious analysis.

4.As can be seen from the Decision, even with the discharge of the Injunction against the 2^nd Defendant, there are assets of the remaining Defendants to the value of about US$120 million being frozen by the Orders.  This is twice the value of the Plaintiff’s pleaded claim.

5.The Plaintiff complaints that the valuation of the assets of the 1^st and 3^rd Defendants may be overstated or that they may dissipate with such assets or that it may be impossible to enforce against such assets.  There is no merit in such arguments.  Quite apart from the misconception that a Mareva injunction is to provide some sort of guarantee over the Plaintiff’s claim, the assets of the Defendants were disclosed in March and May 2017.  There is ample time for the Plaintiff to carry out whatever investigation it sees fit in respect of such assets.  Further, the disclosure is to enable the Plaintiff to police the Orders so that it may ensure that the assets would not disappear.

6.There is no dispute that the Plaintiff’s cause of action here is one of conspiracy between the Defendants, and that it is highly unlikely that the Plaintiff will only succeed against the 2^nd Defendant in this action but not against any of the other two.  Hence, it has not been shown that the discharge of the Injunction against the 2^nd Defendant would result in a situation where there is no assets against which the Plaintiff can enforce a judgment in this case.

7.On this issue of costs, it is incorrect to suggest that the court accepted that the Plaintiff cannot be criticised for the initial application for Mareva Injunction.  What the court had pointed out repeatedly was that it was inappropriate to grant the Orders in their present form without any rider or qualification (see the Decision).

8.In addition, it was also pointed out to the Plaintiff that, having obtained the ex parte Orders, it has every obligation to go back to the court to vary the Orders in the event of any injustice.  Such obligation cannot be questioned.

9.For these reasons, this application is dismissed.  I shall hear the parties on costs.

[Submissions on costs of the application]

10.Costs of this application be to the Defendants.

Mr Jason Toms of Reed Smith Richards Butler, for the Plaintiff

Mr Dominic Geiser of Herbert Smith Freehills, for the 1^st to 3^rd Defendants