Altogether Land Co Ltd v. Lc Finance Ltd and Others

HCA 2600/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2600 OF 2017

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BETWEEN

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D E C I S I O N

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1.In respect of the various matters debated before me this morning, my views and decision are as follows.

2.First, in so far as paragraph 2 of the ex parte injunction order dated 27 November 2017 relating to disclosure of assets by the defendants is concerned, the existing order requires the defendants to make disclosure in writing on or before 5 pm on 1 December 2017 (ie today), to be confirmed by affidavit within 5 business days after the service of that order on the defendants.  The defendants do not object to making the disclosure sought, but ask for 14 days to make the disclosure by affidavit.

3.In this regard, I take into account the nature of business carried on by the defendants, namely, as financiers against securities provided by borrowers, which suggests that the bulk of their assets would be monies in bank accounts and other securities, and the fact that the defendants are required to make disclosure of assets of an individual value of HK$10,000 or more, which seems to me to be a low limit.  Overall, I consider that it is reasonable to grant the extension of time sought, and I would therefore order a variation of paragraph 2 of the ex parte injunction order as per paragraph 1 of the schedule to the defendants’ summons dated 30 November 2017.

4.Second, in relation to paragraph 3 of the ex parte injunction order relating to further disclosure of information in respect of the shares in Guorui Properties Limited, the subject matter of the plaintiff’s proprietary claim, Mr West’s objection, as I understand it, is essentially that such order should not be granted in the context of a Mareva injunction.

5.However, as I understand from paragraphs 66 to 68 of Mr Chan’s skeleton submissions placed before the ex parte judge, it was explained to the judge that the further disclosure order sought was ancillary to the proprietary injunction previously granted by DHCJ S T Poon on 14 November 2017, as subsequently continued by the same judge on 17 November 2017.  I accept Mr Chan’s submission that the court has jurisdiction to make the order, and I consider that it matters little whether the further disclosure order is made the subject matter of a separate order, or included as part of the Mareva injunction order granted on 27 November 2017.

6.The further disclosure order having been made by the ex parte judge, I am not minded to disturb it in the absence of some cogent submission that it was wrongly made in the first place.  I would, however, extend the time for compliance to 14 days from today, in other words the same deadline under paragraph 2 of the order as varied as aforesaid.

7.Third, in so far as business expenses are concerned, the evidence before me is that the defendants require about HK$703,000 per month, mainly to pay staff, including mandatory provident funds. Mr Chan’s objection is that the defendants have not provided clear evidence that they have no other assets to pay the relevant expenses.  However, it is relevant that (i) the Mareva injunction currently restrains the defendants from dealing with or disposing of assets up to the huge sum of HK$362,848,000, (ii) the existing order only allows the defendants to spend HK$50,000 per week by way of business expenses which, I take it, was set without much consideration of the actual requirements of the defendants, as one would expect when an ex parte Mareva injunction is sought (I should make it clear that this observation is not intended to be a criticism), and (iii) there is evidence that the 2^nd defendant has to pay salaries to 13 to 14 employees.  Obviously, the court should be careful not to do anything which may result in those employees being left without payment of salaries.  I am also minded to fix an early hearing date of the discharge applications.

8.In all the circumstances, I shall vary paragraph (1) of the “Exception to this Order” as per paragraph 3 of the schedule to the defendants’ summons dated 30 November 2017.

9.I also give the following directions:

(1)  the ex parte injunction order dated 27 November 2017 varied as aforesaid be continued pending the substantive hearing of the plaintiff’s inter parte summons dated 27 November 2017 and paragraph 1 of the defendants’ summons dated 30 November 2017;

(2)  the aforesaid summonses be heard together with the plaintiff’s application for continuation of the proprietary injunction and the defendants’ application for discharge of that injunction on 14 February 2018, with 2 days reserved;

(3)  leave to the defendants to file evidence to support their discharge applications and to resist the plaintiff’s continuation applications within 21 days from the date hereof;

(4)  leave to the plaintiff to file evidence in reply within 21 days thereafter;

(5)  leave to the defendants to file a further round of evidence in reply within 14 days thereafter;

(6)  no further evidence be filed by the parties without leave of the court; and

(7)  costs of today be in the cause.

Mr Abraham Chan, SC and Mr Julian Lam, instructed by Baker & McKenzie, for the plaintiff

Mr Mark Andrew West, instructed by Kennedys, for the 1^st and 2^nd defendants