Read the full judgment text of CACV 505/2019, CACV 510/2019 on BabelCite. This Court of Appeal judgment was delivered on 19 January 2022 before Au JA and Chow JA.
Civil procedure – mareva injunction – worldwide freezing order – real risk of dissipation of assets – ex parte without notice application – procedural regularity – Chabra jurisdiction – material non-disclosure – good arguable case – US$521.8m fraud involving listed company China Medical Technologies, Inc. through purported acquisitions of worthless FISH and SPR technologies from Supreme Well Investments Limited controlled by Mr Tsang – funds siphoned through more than 50 bank accounts across at least 5 jurisdictions – Mr Tsang alleged to have acted on both sides of the Acquisitions as the prime mover behind the Fraud – whether the Judge erred in setting aside the ex parte worldwide mareva injunction on grounds of procedural irregularity and absence of real risk of dissipation – whether the Judge erred in finding a good arguable case against Ms Bi for dishonest assistance – whether the Tsang Properties (transferred from Mr Tsang to his former wife Ms Chui around the time of the divorce and Fraud) were amenable to Chabra jurisdiction – whether material misstatement that the Tsang Properties were purchased without mortgage justified discharge of the Injunction as against the Tsang Properties and Ms Chui – held: real risk of dissipation is to be assessed holistically, and a good arguable case of dishonesty at the heart of the claim may powerfully support the inference of risk of dissipation without significant further evidence – Convoy Collateral Ltd v Cho Kwai Chee applied – Judge erred in approach in failing to properly evaluate the significance of the nature of the alleged fraud – ex parte without notice application justified given the nature of the Fraud and the limited delay after the draft Statement of Claim was finalised in late August 2017 – good arguable case of dishonest assistance against Ms Bi established given her inability to produce documents justifying receipt of US$17.6m of Fraud proceeds – Chabra jurisdiction not established as the Plaintiffs failed to show a good arguable case that the Tsang Properties were in truth Mr Tsang's assets, particularly given documentary evidence that Ms Chui paid the down payments – material misstatement regarding the absence of mortgages on the Tsang Properties was material and inexcusable, warranting discharge of the Injunction in relation to the Tsang Properties and Ms Chui and refusal to re-grant – Main Appeal allowed, Chabra Appeal dismissed – Injunction continues against the 2nd, 5th, and 13th Defendants (save in respect of the Tsang Properties) – costs ordered against the 2nd, 5th, and 13th Defendants for the Main Appeal (apportioned equally) and in favour of the Interested Party for the Chabra Appeal – Fortification Summons remitted.
Legal issues: Real risk of dissipation of assets in mareva injunction application · Justification for ex parte without notice application · Good arguable case against Ms Bi · Chabra jurisdiction - good arguable case that Tsang Properties are Mr Tsang's assets · Material misstatement regarding mortgages on Tsang Properties
Outcome: Main Appeal allowed; Chabra Appeal dismissed. The Injunction continues against the 2nd, 5th, and 13th Defendants (save for paragraphs 4(2)(a) to (c) and (f) relating to the Tsang Properties). The Injunction as it relates to the Tsang Properties and Ms Chui is not re-granted. The Fortification Summons is remitted to the Judge for fresh consideration.
Cited by 14 cases · Cites 4 cases