Read the full judgment text of HCA 392/2020 on BabelCite. This Court of First Instance judgment was delivered on 8 January 2021 before Stewart Wong SC.
Civil procedure – interlocutory injunctions – Mareva injunction and proprietary injunction – continuation and discharge – payment into court – effect of payment in on right to challenge injunction – real risk of dissipation – serious issue to be tried – balance of convenience – material non-disclosure – unjust enrichment – constructive trust – third party payments – plaintiff claims to be victim of internal fraud by its Finance and Accounting Manager – funds transferred to 44 defendants as second layer recipients – whether plaintiff established real risk of dissipation separately against the 14th defendant – whether a defendant who deals with an application for an interlocutory injunction by way of payment into court can subsequently challenge the grant of the injunction – whether the plaintiff complied with its duty of full and frank disclosure at the ex parte hearing – proprietary injunction over a sum of money where monetary award would be adequate remedy – whether the 14th defendant and its parent were bona fide vendors with no knowledge of fraud – whether the Exception in the Injunction order was self-executing upon payment in – whether the 14th defendant was precluded by the payment in from challenging the Injunctions – whether the plaintiff's new arguments about 'low commercial standards' regarding the Traki transaction could be raised – construction of Consent Order reserving right to challenge – Emailgen Systems Corpn v Exclaimer Ltd principle – Convoy Collateral Ltd v Cho Kwai Chee principles on risk of dissipation – Universal Entertainment Corporation v Kazuo Okada – Crete Maritime Corp v Emirates Shipping Line DMCEST spectrum of conduct – Heitkamp & Thumann KG v Living Profit Trading Develop Ltd on proprietary injunctions – Samtani v Samtani – Wason Holdings Ltd v BHP International Markets Ltd – 匯力（天津）股權投資基金管理有限公司 v Sunfund Investment & Management Co Ltd on new bases not advanced ex parte – court held the plaintiff failed to establish a real risk of dissipation against the 14th defendant, who was not alleged to be involved in the underlying fraud – court held the proprietary injunction was not necessary or appropriate in the absence of evidence of the 14th defendant's inability to satisfy a monetary award – court found real substance in the 14th defendant's complaint of material non-disclosure – Injunctions ought not to have been granted or continued – sum paid into court ordered to be paid out to the 14th defendant with interest – plaintiff to pay the 14th defendant's costs of the Summonses and all costs of and occasioned by the Injunctions, with a certificate for counsel, on a nisi basis – application for indemnity costs refused.
Legal issues: Effect of payment into court on the 14th defendant's right to challenge the Injunctions · Whether the plaintiff established a real risk of dissipation to justify the Mareva injunction against the 14th defendant · Whether the proprietary injunction was necessary and appropriate · Whether the plaintiff made material non-disclosure at the ex parte hearing
Outcome: The court held that the Mareva and proprietary injunctions ought not to have been granted or continued against the 14th defendant. The sum of US$179,693.93 paid into court by the 14th defendant (together with accrued interest) was ordered to be paid out to the 14th defendant. The plaintiff was ordered to pay the 14th defendant's costs of the summonses and all costs occasioned by the injunctions, on a nisi basis, with a certificate for counsel, to be taxed if not agreed.
Cited by 9 cases · Cites 9 cases