Matheus Simoes Marques Ferreira and Others v. Alessandro Golombiewski Teixeira and Another

HCA 2139/2020

[2021] HKCFI 1678

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2139 OF 2020

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Before: Hon Au-Yeung J in Chambers

Date of Hearing: 9 June 2021

Date of Decision: 9 June 2021

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D E C I S I O N

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1.This is the hearing of D2’s application for the dismissal of this action under Order 19, rule 1 of the Rules of the High Court, alternatively for security for costs on the basis that the Plaintiffs are resident out of jurisdiction.

2.The Plaintiffs issued a writ on 22 December 2020 suing, amongst others, D2 for a sum of US$15,804,880 (“lost profits”) as restitutionary damages.  The causes of action against D2 were in unjust enrichment and constructive trust.  The Plaintiffs also asked for an inquiry and account to be taken of D2’s use of the lost profits.

3.On the same day, the Plaintiffs obtained, ex parte, a Mareva injunction from Alex Lee J, freezing D2’s assets in Hong Kong up to the value of US$15,804,880.

4.On 31 December 2020, the Mareva injunction was continued by the order of Linda Chan J.  The learned Judge also ordered the Plaintiffs to fortify their undertakings as to damages by paying US$500,000 into Court within 14 days therefrom.

5.The Plaintiffs did not make the payment in.  On 15 January 2021, Linda Chan J ordered that, unless the Plaintiffs do make payment in by 1 February 2021, the Mareva injunction order would be discharged.

6.The Plaintiffs did not make the payment in and Linda Chan J made an order confirming discharge of the Mareva injunction order on 2 March 2021.  Linda Chan J gave liberty to D2 to apply for directions for the purpose of an inquiry as to damages occasioned by the Mareva injunction order.

7.Till this date, the Plaintiffs have not filed and served their statement of claim despite Master Hui’s order, on 1 February 2021, extending time for the Plaintiffs to do so by 22 February 2021.

8.On 21 April 2021, D2 took out the present summons, seeking an order that the action be dismissed by reason of the Plaintiffs’ default in serving their statement of claim.

9.Under Order 19, rule 1, where the plaintiff is required by the rules to serve a statement of claim on the defendant and he fails to serve it on him, the defendant may, after the expiration of the period fixed by or under the rules for service of the statement of claim, apply to the Court for an order to dismiss the action, and the Court may by order dismiss the action or make such other order on such terms as it thinks just.

10.I am satisfied that I should exercise my power under Order 19, rule 1 to dismiss the action on the following grounds:

(1)  By now, the Plaintiffs have had nearly 6 months since issue of the writ to prepare the statement of claim but failed to do so.

(2)  Having obtained the Mareva injunction order, the Plaintiffs were under an obligation to prosecute the proceedings with diligence, but have failed to do so.

(3)  It is evident from sub-paragraphs (1) and (2) that the Plaintiffs have simply lost interest in prosecuting this action.

11.The action having been dismissed, it is not necessary to make any order on the summons for security for costs.  However, as the summons for security was taken out (rightly, in my view) on 29 December 2020 before the return date for the ex parte Mareva injunction order, the Plaintiffs should also get costs thereunder.

12.The Plaintiffs have not demonstrated any reason for their default in terms of paragraphs 10(1)-(2) above. 

13.I therefore make an order nisi that costs of this action, including the application under Order 19, rule 1 and the security summons, should be to the Plaintiffs on indemnity basis, summarily assessed at $99,432.

14.I thank Mr Tai for his assistance.

Mr Terrence Tai, instructed by Rowdget W Young & Co, for the 2^nd Defendant

Attendance of Reed Smith Richards Butler, for the 1^st to 5^th Plaintiffs, was excused