Chan Wai Lung v. Lee Shu Yen and Another

HCA 736/2022

[2025] HKCFI 952

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 736 OF 2022

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DECISION

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1.This is the Plaintiff’s application by summons dated 24 February 2025 for an unless order to compel the 1^st and 2^nd Defendants (the “Defendants”) to comply with orders made by this Court following the dismissal on 26 September 2024 of the Defendants’ application to discharge the undertaking set out in Schedule 1 to the Order of Ng J dated 24 June 2022.

2.Two orders were made:

(a)  the order dated 26 September 2024 (as amended on 7 November 2024) for payment in of certain sums into Court (the “Payment In Order”); and

(b)  the order dated 25 November 2024 that the Defendants pay costs in the sum of $380,000 to the Plaintiff within 14 days (the “Costs Order”)

(collectively, the “Orders”).

3.The Defendants have flouted the Orders.

4.The Defendants’ former solicitors, Messrs CPH Legal served a cease to act order on the Plaintiff on 11 February 2025.

5.The Payment In Order was specifically made to address the Defendants’ breach of the Undertaking which has persisted for over 2 ½ years. The Defendants remain in breach of the Undertaking.

6.Under the Payment In Order, the Defendants were required:-

(i)   to pay the sum of $5,441,115.77 (the “Sum”) into Court within 14 days;

(ii)  within 14 days to instruct and require (a) Citibank to transfer a sum of $121,022.61 out from D1’s bank account into Court; and (b) DBS Bank to transfer a sum of $1,203,795.22 out from D2’s bank account into Court.

7.Ms Euchine Ng, counsel for the Plaintiff, submits that the Defendants have consciously decided to flout the Orders made by this Court and that such breaches are flagrant, inexcusable and contumelious:

(a)  in respect of Sum, given the Defendants’ assurances to the Court and the Plaintiff that the funds have been “preserved”, there is no legitimate reason for non-compliance within the 14 day period and close to 5 months have elapsed since the payment deadline;

(b)  in respect of the monies remaining with Citibank and DBS Bank, not only did the Defendants not give instructions until 10 October 2024, the deadline for so doing, thereafter, they unreasonably obstructed the banks from complying with the instructions by ignoring and continuing to ignore the banks’ requests for necessary documents and authorizations; and

(c)  as regards the Costs Order, the payment deadline was 9 December 2024, some 3 months ago.

8.The relief the Summons seeks is that unless the Defendants comply with the Orders within 7 days, they be debarred from defending these proceedings and the Defendant’s Defence be struck out and judgment be entered against the Defendants.

9.I am more than satisfied that such an “unless order” is appropriate. The Defendants’ conduct since the Undertaking is shown to be particularly brazen and wholly unacceptable:

(a)  by concealing the closure of the HSBC and SCB accounts and the release of their balances for approximately 2 years;

(b)  by refusing to disclose the whereabouts of the funds released;

(c)  having failed in their Discharge Summons, they are now unrepresented and may not further participate in the proceedings, leaving the Plaintiff to further engage in costly and wasteful proceedings;

(d)the Defendants’ wilful conduct has caused identifiable assets effectively frozen under the Undertaking to be substantially reduced from $6.7m odd to $1.3m odd (being the amounts remaining with Citibank and DBS Bank) which is less than 10% of the Plaintiff’s claim; and

(e)  while barring the Defendants from defending the proceedings should they fail to comply with the Orders is draconian, it is called for given the insouciance displayed by their conduct in these proceedings to date.

10.The Plaintiff’s draft order is in terms of the Summons except that the Defendants are given 14 days rather than 7 to comply with this order in conformity with paragraph 2 of Practice Direction 16.5.

11.The draft order also provides that the costs of this Summons be to the Plaintiff with certificate for counsel to beasts summarily assessed on an indemnity basis and payable forthwith which is entirely appropriate in the circumstances. Accordingly, I will make an order in terms of the draft order submitted.

12.The Plaintiff’s statement of costs be served on the Defendants who have 14 days thereafter to lodge their list of objections with the Court.

Ms Euchine Ng, instructed by NWK Lawyers, for the Plaintiff

1^st and 2^nd Defendants, in person, absent