Hwang Joon Sang and Another v. Golden Electronics Inc. and Others

HCA 1529/2019

[2021] HKCFI 2425

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1529 OF 2019

________________________

________________________

Before: Hon Coleman J in Chambers (Open to Public)

Date of Hearing:  17 August 2021

Date of Judgment: 19 August 2021

______________

J U D G M E N T

______________

A.   Introduction

1.This hearing was, in effect, the resumption of the hearing of an application dated 26 April 2021 (“Discharge Summons”) made by (only) the 1^st to 7^th defendants (“D1”, “D2”, “D3”, “D4”, “D5”, “D6” or Vivien and “D7” respectively, and together, for present purposes, “Defendants”), seeking to discharge certain injunction orders made against them.  The Discharge Summons was originally fixed for hearing on 6 July 2021.

2.At the hearing on that date, and by a Decision of the same date [2021] HKCFI 1973, I dealt with a Hadkinson application made by the 1^st plaintiff (“Jason”) and 2^nd plaintiff (“Future Cell”) (together, “Plaintiffs”).  I held that the Defendants had engaged in long-term deliberate non-compliance with court orders, and I granted the Hadkinson Order.  I gave a direction that the Defendants should fully comply with the various disclosure orders before the Court would entertain the Discharge Summons.

3.As before, I can identify the broad nature of the dispute as follows.

4.Jason and is the sole director and shareholder of Future Cell.  They bring their claim against D6 (“Vivien”) and various other defendants, essentially arising out of alleged breaches of fiduciary or other duties owed by Vivien and/or a conspiracy to injure by unlawful means and/or unjust enrichment, because significant funds have been transferred on Vivien’s instructions away from companies which the Plaintiffs allege are their nominees or bare trustees of the funds/assets held by those companies.

5.The claim has given rise to various interlocutory applications leading to numerous orders for interim injunctive relief, in the form of proprietary injunctions, freezing injunctions and disclosure orders.  With the benefit of the orders granted, the Plaintiffs have sought to perform a tracing exercise, which has identified, they say, that Vivien caused the nominee companies to transfer their funds through multi-tier recipients so as to put them out of reach of the Plaintiffs.

6.Vivien is the sole shareholder and director of each of D1 to D5 and D7 and she now asserts that they are not nominee or trustee companies belonging to the Plaintiffs, but that they are beneficially owned by herself.

7.The original worldwide Mareva injunction was granted against D1 to D6 by order of Anthony Chan J dated 23 August 2019 (“August 2019 Order”), and the worldwide Mareva and proprietary injunction was granted against D7 by my order dated 27 February 2020 (“February 2020 Order”).

8.There was significant delay following the grant and service of the August 2019 Order and the February 2020 Order before the Defendant even sought legal advice in October 2020, and before she eventually issued the Discharge Summons in April 2021.

9.The Plaintiffs continue to be represented by Mr Douglas Lam SC, leading Mr Moses Park and Mr Billy Mok of Counsel; the Defendants continue to be represented by Mr Nelson Miu and Ms Jolie Kung.

10.This is my Judgment.

B.   Whether Disclosure Given as Required

11.As indicated above, I gave a direction that the Defendants should fully comply with the various disclosure orders before the Court would entertain the Discharge Summons.  Vivien has since made certain disclosure on behalf of herself and the other Defendants.  Originally, the Plaintiffs did not accept that appropriate disclosure has been made, and the submission was made that the Hadkinson Order should be continued.

12.The criticism of the disclosure is made in the 20^th affirmation of the Plaintiffs’ solicitor, and Vivien has sought to respond to it in her 5^th affirmation.

13.However, in light of that response, Mr Lam did not pursue any application for the continuation of the Hadkinson Order.

14.In any event, I do not think it necessary to engage in a detailed examination of the disclosure, the criticisms and the response at this stage.  At least substantial disclosure has now been provided and, in the exercise of my discretion, I do not think it necessary to continue the Hadkinson Order any further.

15.Rather, I think it preferable to address and determine the merits of the Discharge Summons, to which I now turn.

C.   Discharge Summons

16.The Discharge Summons seeks the discharge of the August 2019 Order as continued by various orders, as well as the injunction orders against all other Defendants, including the February 2020 Order as against D7.

17.The grounds put forward as founding the Discharge Summons are that:

(1)  there was material non-disclosure, as to:

(a)  Vivien’s alleged misrepresentation about currency law, and

(b)  the (lack of) reason for her “abscondment”;

(2)  the Plaintiffs have failed to satisfy a good arguable case; and

(3)  the Plaintiffs are not entitled to equitable relief because they have not come to court with ‘clean hands’.

18.Though put and addressed in that order by Mr Miu, I agree with Mr Lam that it may be more helpful first to consider the merits of the claim, and whether it satisfies the good arguable case test, before considering whether there has been material non-disclosure and, if so, what should be the consequences of that.

D.   Good Arguable Case

D.1    Applicable Principles

19.It is settled that an applicant for a Mareva injunction needs to show a good arguable case in the sense of a case which is more than barely capable of serious argument, and yet not necessarily one which the Judge believes to have a better than 50% chance of success.

20.Therefore, if the court now considers the plaintiffs have failed to show a good arguable case, not only will the original order be discharged, no question of any re-grant could arise.

21.On the other hand, there should be no attempt to persuade a court to resolve disputed questions of fact, whether relating to the merits of the underlying claim in respect of which a Mareva is sought or relating to the elements of the Mareva jurisdiction such as that of dissipation.  Similarly, there should be no detailed arguments on difficult points of law on which the claim of either party may ultimately depend. Further, the existence of a good arguable defence to a claim does not necessarily negate the existence of a good arguable case on the claim.

D.2    This Case

22.The essence of each side’s cases are diametrically opposed.  Jason says that Vivien worked for him, because he trusted her, and that he is the beneficial owner of D1-5 and D7 (and indirectly their assets).  Vivien says the opposite, namely that Jason in effect worked for her, sometimes as an agent for commission and sometimes as a counterparty to the sale and purchase of product, and that she is the beneficial owner of D1-5 and D7.  Insofar as she suggests that Jason was a business partner, it is clear that she means he was but a counterparty to her business arrangements.

23.There is, on these diametrically opposed cases, no room for any middle ground.  Importantly, neither party suggests that they were parties to a partnership, in the sense of a legal entity in which they both had ownership rights and liability obligations.

24.Mr Miu submitted that the Plaintiffs’ case – which he sought to summarise in §19 of his skeleton argument – was and remains flimsy and nebulous.  He submitted that material aspects of the case had been shown to be false by evidence now produced, both by the Defendants and the Plaintiffs.

25.However, despite Mr Miu’s meticulous approach to various aspects of the case, I do not think his analysis identifies that there is not even a good arguable case shown by the plaintiffs.  Mr Miu’s analysis may perhaps show that there is also a good arguable defence, but that is insufficient to satisfy the burden on the Discharge Summons.  He is able to show that mistakes have been made in Jason’s evidence, such that Jason has conceded that fact.  But, I am not convinced those mistakes are necessarily of the greatest materiality in the overall picture.  Nor do I think it appropriate at this stage to engage in a point by point consideration of what Jason and Vivien say respectively.  More importantly, essentially the arguments raise contentions or disputes of fact of a nature which can only be resolved at trial.

26.Mr Miu’s main focus was on the relationship between Jason and Vivien, on which the Plaintiffs base their claim that Vivien owed them fiduciary duties.  He says that the Plaintiff’s case is one of the relationship of employer/employee, but that cannot be made out because there were none of the indicia of employment present.  He says there was no written contract of employment, no commencement date, no agreed terms and no particular monthly salary, no requirement that Vivien should work exclusively for the Plaintiffs, and no control by him as to how Vivien should carry out her work.

27.On the other hand, as Mr Lam submits, the existence of a fiduciary duty would be as regards Vivien’s dealing with monies which did not belong to her, but to the Plaintiffs.  Indeed, it seems to me that it is probably the wrong point of focus as to whether there were the indicia of employment, which is the sort of exercise typically conducted when looking to see whether a relationship is one of a contract of service as opposed to a contract for services.  In this case, the core allegation rests on the point that Vivien was entrusted by Jason to handle his and Future Cell’s funds.  That is what gave rise to the alleged fiduciary duties.

28.The allegations of trust also arise in the context that Jason says that he and Vivien were previously romantically involved.  Whilst Vivien denies that, there are references in the WeChat messages to them previously being lovers, to which there is no response by Vivien.  It might be said that the general tone of the messages sent in June 2019 are consistent with a man who feels suddenly betrayed by his long-term assistant and former lover, after she has apparently disappeared with his funds.

29.Indeed, the WeChat messages make clear that Jason was seeking to recover his own funds from Vivien.  In the face of those contemporaneous demands, Vivien remained silent, and never disputed that Jason was the owner of the funds.  Her belated claim that she was always the true beneficial owner of the relevant defendant companies, and hence their funds, is not convincing. Indeed, a strong picture is painted by the evidence that Vivien assisted or worked for and reported to Jason.  She regularly reported bank balances and the financial position of the Defendants, and sought approval from him on various matters.  She occasionally addressed him as ‘boss’.  That she did so is some evidence that she was his secretary or assistant in his employ, or at least handling his funds at his direction.  Her explanation in evidence as to why she did so – namely to show suppliers the financial strength of the parties they were trading with – does not strike me at this stage as particularly compelling.  Indeed, on the format of the reporting, that explanation appears to make little sense.  It makes little sense why, for example, the reports were not simply in the form of balance sheets, and it is difficult to see why any supplier would be satisfied with the WeChat reporting, or be interested in the explanation that some monies had been used to pay for lunches etc.  Vivien’s explanation is something which she can put forward at trial, but it certainly does not remove the good arguable case.

30.As it happens, as a result of the disclosure obtained so far in this case, there is also a strong argument that the represented bank balances in May and June 2019 were misrepresentations by Vivien to Jason.  The available bank statements for 2019 showed nothing like the figures that Vivien was representing.  It seems to make less sense that she was misrepresenting her own funds, than it does that she was misrepresenting Jason’s funds so as to prevent or suspend his discovery that they had been dissipated.  It might also be noted in passing that one of the messages reporting bank balances includes an explanation that some expenditure was for “salary”.

31.Vivien was remunerated at times by payments from Future Cell.  I accept there is some question or confusion as to the basis of the payments, but that is not something that can be resolved at this stage.  Indeed, there is some force in some of the points made by or for Vivien.  On the other hand, there is no evidence of any negotiation or bargaining between Vivien and Jason as would follow from her case, and Jason’s evidence is that Vivien has none of the requisite skills, knowledge, or connections to source products. She did not know any of the suppliers and customers personally, with one exception, and Vivien has not produced any evidence that she had direct contact with suppliers and customers.  On the other hand, he majored in material engineering for electronics and had working experience in the electronics, semiconductors and display sectors.  The evidence from business associates also identifies that they knew Vivien only to be Jason’s administrative assistant or secretary.  Vivien challenges that evidence, but that gives rise to matters for trial.

32.There is also the oddity that, if it was Vivien who was conducting the multi-million dollar business through companies which she owned, that activity appears to have ceased suddenly and entirely in June 2019. This is shown by the asset disclosure lately given by Vivien.  Indeed, the disclosure of assets also does not seem to evidence that the various Defendant companies were actively engaged in business – except now, as Mr Lam suggests, the business of lending and holding an unparticularised interest in a body of artwork, which rather smacks of money laundering.  Perhaps more relevantly, there was a complete lack of reaction to the commencement of these proceedings and the obtaining of various injunctions, which had the effect (on Vivien’s case) of significantly interfering with the business and/or companies of which she was owner, and funds in accounts to which she lays claim.  On her own evidence, she did not even consult lawyers until October 2020, more than a year after she knew of these proceedings.

33.Further, the suggestion by the Defendants that the various transfers to the ‘second-tier’ defendants were for ordinary business transactions, investments, personal loans and/or other dealings with Vivien’s friends and acquaintances is something that would necessarily be investigated at trial.  At this stage, the inherent likelihood of that suggestion being correct seems relatively low, but in any event such evidence as Vivien has produced does not negate the existence of a good arguable case on the claim.

34.As a general point, I do not accept Mr Miu’s submission that it has been Jason’s approach to evidence that “if his lie is exposed he will adopt the true position and hopefully people forget he has lied”.  Of course, where it is accepted that mistakes may have been made there is room for criticism of certain aspects of his evidence, and there may be plenty of room for testing that evidence at trial.  Again, however, that does not remove the existence of a good arguable case.  I reject Mr Miu’s submission that Jason has engaged in “bare assertions, with little or no documentary evidence in support”.

35.I also take into account the matters relating to Vivien’s evolving case about her reaction to certain messages sent by Jason in late June 2019 (being part of the matters relied upon by her for one of the arguments on material non-disclosure: see below).  There is a strong suggestion from the totality of the evidence that Vivien has simply lied about this.  This is unhelpful to an applicant who asks the court to accept all her other evidence at the interlocutory stage.

D.3    Conclusion on Good Arguable Case

36.I am entirely satisfied that the Plaintiffs demonstrated, and continue to demonstrate, at least a good arguable case on their claim.

E.   Material Non-Disclosure

E.1    Applicable Principles

37.The guiding principles on material disclosure are well-established.  For present purposes they can be summarised as follows, without reference to previous authority:

(1)  An applicant making an ex parte application must act fairly in all material aspects when preparing and presenting the application.

(2)  This includes the duty to disclose to the Court all matters which are material, meaning those matters material to the court’s assessment and decision whether or not to grant the relief without notice, and if so on what terms.

(3)  The test as to materiality is an objective one, and ultimately a question for the court.  Hence, it is no excuse for an applicant subsequently to say that he was generally unaware, or did not believe, that the facts were relevant or important.

(4)  Non-disclosure may be material even if its effect is just to give a seriously different ‘flavour’ to the case.

(5)  The duty of full and frank disclosure is a stringent one, designed to protect the absent party.

(6)  Therefore, if material non-disclosure has occurred at the ex parte application, the order obtained at such an application would likely be set aside automatically without going into the merits.

(7)  Nevertheless, there is a discretion to re-grant the same order.  That jurisdiction should be only sparingly exercised, taking into account the need to protect the administration of justice and uphold the public interest in requiring full and fair disclosure.

(8)  Hence, an assessment will be made as to the degree and extent of the culpability with regards to the non-disclosure.  The more serious or culpable the non-disclosure, the more likely the court is to set its order aside and not renew it, however prejudicial the consequences.

(9)  It is therefore relevant that the breach was innocent, but there is no general rule that an innocent breach will not attract the sanction of discharge.  Nor is there a general rule that a deliberate breach will attract that sanction.

(10)  The application of principles which seek to uphold the integrity of the judicial process should not be carried to such lengths as will allow them to become the instrument of injustice.

(11)  Because of the penal nature of the jurisdiction, the court should have regard to the proportionality between the punishment and offence.

(12)  When exercising the discretion whether to re-grant the order, the court should take into account all relevant circumstances.

E.2    The 1^st Alleged Non-Disclosure

38.As part of Jason’s 2^nd affirmation, used in support of the injunction applications, Jason asserted that he had asked Vivien about transferring large sums to Future Cell, but that Vivien refused citing currency control laws (which he has now been advised was false, as the transfer of funds would not be prohibited by Hong Kong law).

39.In her 1^st affirmation, Vivien asserts that Jason well knew that remittances far exceeding US$30,000-US$40,000 could be made to Future Cell without any problem, since a remittance as large as US$681,206 had been made from D3 to Future Cell in May 2017 without problem.  All that was required was a proper invoice to evidence the underlying transaction.  Vivien says the true reason why she refused to remit larger sums was because Jason intended to create a fictitious marketing contract as the underlying document, which she would not go along with.

40.In his 13^th affirmation, Jason did not deny the fictitious nature of the proposed marketing contracts, but maintained that as the beneficial owner of D1 and D2, he had the power to cause them to enter those contracts, which Vivien did not tell him would be illegal. In reply, Vivien explained in her 2^nd affirmation that the creation of fictitious documents to support a remittance would clearly be an attempt to circumvent anti-money laundering regulations, and that she would be the one facing trouble if it were subsequently discovered.

41.Mr Miu submitted that the most likely true reason for Jason’s request to be paid part of his commissions in cash in Hong Kong was to avoid declaring them as income to the South Korean tax authorities. Therefore, the request for remittances of large sums was to avoid the risk of carrying large sums in cash from Hong Kong to South Korea.

42.Mr Miu submits that, knowing full well that Vivien would not appear in court to contest the proceedings (because she had rushed back to Taiwan after receipt of life-threatening messages), Jason made up the story of misrepresentation by Vivien about currency control laws. Worse, he did so to cover up his own proposal of creating a fictitious contract to evade anti-money laundering regulations.

43.However, I agree with Mr Lam that it is not clear on the evidence how these matters can properly be said to amount to an issue of material non-disclosure.  Despite the attempt to paint it in this way, there was no fraudulent scheme.  The Plaintiffs (on their case) were the beneficial owners of funds held by D1 to D5, and were intending to make intra-group transfers to allow finance for Future Cell.  That the contracts were to be made for a proper purpose – that is, not for an illegal, fraudulent or money-laundering purpose – seems to me to be consistent with the reading of the relevant email message relied upon by Vivien, and in particular the phrase “make a contract officially”.  Further, Vivien’s complaint about non-disclosure turns to a significant degree on accepting her case that she is the beneficial owner of the funds.  Without that, the money-laundering allegation seems to have some logical difficulties.

44.On Jason’s case, he has no experience in finance or law and he took Vivien’s explanation of currency controls (if that is what she said) at face value.  Against her warning, and in light of his wish to have larger amounts transferred to Future Cell, Jason asked Vivien to check with her main point of contact at the Taipei Fubon bank as to whether there would be an issue.  However, Vivien cited currency control laws again at a subsequent meeting and refused to transfer large amounts.

45.There is ultimately no dispute that Vivien did tell Jason that she would not transfer to him larger sums/funds.  The dispute is as to why, but that is really a merits point rather than a non-disclosure point.  Mr Lam has accepted that it might have been better to have referred to the previous larger transfer, in anticipation of a potential argument in answer to Jason’s case.  But, that seems to me to be almost immaterial in the context of the merits of the case as a whole, and probably not material to any assessment of the risk of dissipation.

46.In conclusion, and it can be noted that I was one of the Judges who granted the original injunctions, I do not accept there was really any material non-disclosure in this respect.

E.3    The 2^nd Alleged Non-Disclosure

47.The second alleged misrepresentation was as to why Vivien went back to Taiwan.  For that, Vivien relies upon the WeChat messages sent between 25 June and 11 July 2019, and her assertion that the messages exhibited by Jason were manufactured.  This was, not least, because of the excision of those threats made to her, such as to involve Japanese yakuza and Chinese gangsters to go after Vivien and her son, and to steal the money back.

48.Again, in his 13^th affirmation, Jason did not deny the veracity of the fuller picture of the messages, nor did he explain how his own exhibit was compiled, save to acknowledge that the exhibit could have been better described.  Instead he asserted that it was unconvincing and unbelievable that Vivien was allegedly so afraid of the threats that she fled to Taiwan, when she failed to report the matter to the police in Hong Kong or Japan or South Korea or Taiwan.  He also pointed out that Vivien had herself not shown the true picture because he had sincerely apologised to her on 29 June 2019 by email and by WeChat.

49.I traversed some of the relevant evidential ground relating to the messages in my previous Decision [2021] HKCFI 1793, at §§42-47 and 51, which can be read and which I shall adopt for present purposes without simple repetition of it.

50.Mr Miu submitted that the original exhibit to Jason’s affirmation was a misrepresentation or blatant lie far worse than a mere non-disclosure.  He also submitted that it was material, and its materiality must have been appreciated by Jason, as he went to the trouble of excluding that material.  This was not, therefore, an innocent oversight, but rather was a deliberate attempt to deceive the Court.

51.Though the threats were clearly wholly inappropriate and should never have been uttered, there was an immediate retraction from them and an apology for them.  I accept that there were a number of messages over a two- or three-day period before the retraction and apology came, and it might not have been immediately accepted as genuine.  But I remain of the view that Vivien must have known the power of that retraction and apology, because she herself deliberately failed to disclose it to the Court when complaining about the threats.  She must have known that, had she revealed the apology, it may well paint a very different picture.  This is particularly so against the evolving evidence: see below.

52.Indeed, the remainder of the context is also relevant.  On many occasions, the messages contain Jason’s statements that he did not want anyone to be hurt, that he did not want to lose his ‘partner’ (Vivien), that he still loved her and wanted her to come back, and that he would pursue legal proceedings, though he preferred and hoped for a compromise and to reach an agreement.

53.Further, as time has passed (approaching two years by the time of the Discharge Summons), it might be thought that it had become clearer still that the Plaintiffs were and are pursuing judicial remedies as opposed to any other form of redress.  Yet at no point until April 2021 was the Discharge Summons issued, in circumstances where I do not accept that it was the commencement of criminal proceedings in Taiwan in October 2020 that Vivien realised for the first time she had no option but to fight back.  As pointed out before, the terms of the August 2019 Order and the February 2020 Order specifically identified her right and the other Defendants’ right to apply at any time to vary or discharge the orders.

54.But most importantly, (1) the chronology is against Vivien’s submissions, and (2) Vivien’s case has shifted to the extent that there is at least a strong argument that she deliberately lied in her earlier affirmations, and that her complaint of non-disclosure is based on that lie.

55.As to the first point, on the evidence originally put forward, it seems that the threatening words were communicated only after Vivien absconded and became uncontactable.  Hence, I agree with Mr Lam that it is illogical to suggest that she absconded because of the use of those words.  Indeed, if Vivien had not apparently disappeared with the Plaintiffs’ money, Jason would not have reason to have sent the messages (inappropriate though they were), and it might be thought that he would not have become increasingly desperate as the messages reveal.

56.Further, on the original evidence as filed, it did not seem to me that Vivien likely felt “threatened”.  She was apparently in Hong Kong on 4 July 2019, and had a meal at a restaurant in Causeway Bay using the credit card of one of Jason’s clients.  On that basis, either she did not “flee back” to Taiwan as she claimed, or if she had travelled to Taiwan she nevertheless felt able to return to Hong Kong.

57.As to the second point, the evolution of Vivien’s case is stark.  In her first affirmation she had a section headed ‘Reasons for my “Abscondment”’.  In it, having set out the content of certain messages, she expressly said, “That was why I had to flee back to Taiwan in a big hurry”.  There can be no doubt that Vivien was intending to leave the impression that it was the threatening emails which caused her to leave Hong Kong and to go to Taiwan, and to do so in a big hurry.  Indeed, later in the same affirmation she referred back to her explanation of “the true reason for my hurried departure from Hong Kong” and how she had “withdrawn to Taiwan where I thought I would be safe”.

58.In her 2^nd affirmation, Vivien wrote about what she called Jason’s criminal intimidation in “sending the gangsters to kill me in Hong Kong”.  As she put it, “Rushing back to Taiwan where I am surrounded by my own folks is the safest course that I could have taken in the circumstances”.  Again, there can be no doubt that Vivien was intending to leave the impression that she had left Hong Kong in a rush, to go back to Taiwan to find the safety not available to her in Hong Kong.

59.But since the last hearing and my Hadkinson decision, which raised questions about the chronology and the veracity or logic of her allegations, Vivien has filed further evidence in her 4^th affirmation.  In it, she has made a complete volte face.  Now she says that she was not in fact in Hong Kong on 4 July 2019, and in fact had been in Taiwan throughout the period from 6 June to 10 July 2019.  That evidence in effect gives the lie to her own previous evidence by showing that she did not “flee” or “rush back” from Hong Kong to Taiwan – because, on the new evidence, she was already in Taiwan and had been for some time.  It was simply not the threats which caused her to leave Hong Kong and rush to safety Taiwan, as she originally claimed.  Indeed, there is also a further significant change in the evidence, because she claims not to have received the messages as soon as they were sent, as she had left her mobile phone behind and only picked them up later.  Having read them, despite being in preparation to fly to Hong Kong, she now says she immediately cancelled the flight.

60.There is no attempt to explain away the complete inconsistencies in her evidence, and her change of stance.  Further, the explanation as to why she had been non-communicative at the relevant time, resting on the assertion that her mother encountered traffic accident on 17 May 2019, which required Vivien to attend to her whilst in hospital and afterwards, is also somewhat contradicted by the continuing business messages from Vivien to Jason in May and June 2019 (including when she was continuing to report to him the various bank balances – false reports though they now, at least at first blush, appear to be).

61.Hence, the suggested material non-disclosure in failing to explain the “true” reasons for Vivien’s abscondment from Hong Kong does not seem to me to get off the ground.

62.Perhaps recognising that possible view, Mr Miu added to his oral submissions that there was also non-disclosure from the non-disclosed messages, not just because they contain the threats but because they contain references to “partnership” and “50-50 sharing”.  His submission was that, whilst the idea of a partnership was neither the case of the Plaintiffs nor that of the Defendants, the Court might take a different view and so the references were material.

63.I disagree.  First, I do not think it material that there were words which in another context might be capable of being consistent with something, if that something is plainly not the case of any party to this action.  Secondly, the context of the words seems to me at this stage to be relatively plain (though I do not suggest that it would not be open to some exploration at trial).  The words “partner” or “partnership” seem to me to be most likely used in a very loose sense, to denote counterparties or close colleagues, or to denote a close personal relationship (not least in the context of allied references to being lovers).  The references to “sharing” seem to me to identify sharing of Jason’s profit (for example, “my profit”) by an agreement that would need to be put in place, and not by a partnership or sharing agreement already in place.  So I do not accept the submission that these messages give a seriously different flavour to the case.

64.Indeed, I tend to agree with Mr Lam’s description that these messages actually enhance the flavour of the case being put forward by the Plaintiffs.  I accept that that may mean that the messages were, at their most technical, material in the sense of being relevant to an assessment whether to grant or not grant the injunction.  However, to continue the analogy, they were probably simply extra seasoning to an already well-made dish.

65.Again, Mr Lam has accepted that it would have been perhaps better to have produced the full set of messages, both those sent by WeChat and those sent by SMS, and perhaps those sent both to Vivien and to her son.  Of course, that the messages were edited out from a larger number must mean that they were, in that sense, intentionally not disclosed.  But I do not think that they were intentionally not disclosed for an ulterior or contumelious purpose.

66.I therefore accept that the non-disclosure of the threats was innocent.  But in any event, for the reasons identified, it was not material.

E.4    Conclusion on Material Non-Disclosure

67.I am not persuaded that there was any substantial or material non-disclosure.

68.In any event, even on the assumption that there was material non-disclosure, such are the overall circumstances that – in light of the conclusion as to at least a good arguable case and against the totality of circumstances – I would in the exercise of my discretion certainly continue and/or re-grant the injunctions.

69.I do not overlook the need to protect the administration of justice and uphold the public interest in requiring full and fair disclosure.  But in my assessment as to the degree and extent of the culpability with regards to the alleged non-disclosure, and my view that any breach was an innocent breach, a discharge of the original injunction and/or a failure to re-grant would be wholly disproportionate.

70.Indeed, in this case, there is a real sense that in recognition of significant difficulties as regards the merits the Defendants have cast about for allegations that they can make about non-disclosure.  One complaint seems to me to be almost obviously not a material non-disclosure but a dispute on the merits, and the other complaint is based on an apparent lie.  This is a case where the application of principles which seek to uphold the integrity of the judicial process should not be carried to such lengths as would allow them to become the instrument of injustice.

F.   Clean Hands

71.The ‘clean hands’ argument stands or falls with the allegations of material non-disclosure.

72.In this case, and in the exercise of my discretion, I see no basis for depriving the Plaintiffs – through some application of the clean hands principle – of the injunctive relief which they have obtained and wished to maintain, and to which I think they are plainly entitled.

G.   Result

73.The Discharge Summons is dismissed.

74.It also logically follows that any remaining part the Stay Summons referred to in my earlier Decision should be dismissed. Further, I have already allowed the Hadkinson application.

75.At present, where the Plaintiffs have been comprehensively successful on the various summonses, I see no reason why the costs should not follow the event.  Therefore, I would order the Defendants to pay the Plaintiffs’ costs, to be payable forthwith following a gross or summary assessment, which can be performed on the papers.

76.However, as I have not heard any costs argument, I shall make that costs order in the first instance on a nisi basis. Any variation application should be made within 14 days, and any response to that application should be filed 7 days thereafter.  If no variation application is made, the costs order will become absolute.

77.In any event, the Plaintiffs should file a Statement of Costs for Summary Assessment by 27 August 2021.  The Defendant should file any Objections to that Statement by 3 September 2021. Should it be appropriate in light of either (a) no variation application or (b) the result of any variation application, I shall then summarily assess the costs on the papers.

Mr Douglas Lam SC, Mr Moses Park and Mr Billy Mok, instructed by ONC Lawyers, for the plaintiffs

Mr Nelson Miu and Ms Jolie Kung, instructed by Law Office of Y.C. Lee, for the 1^st to 7^th defendants