Funville Ltd v. Tam Chun Wai and Others

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D E C I S I O N

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A.  INTRODUCTION

1.Before this Court is the Variation Summons dated 24 April 2026 taken out by the 4^th Defendant (“Pat”) and the 5^th Defendant (“ATC”) to vary the interim injunction order (“the Injunction Order”) so as to carve out a bank account of Pat and the costs on account held by the former solicitors of Pat and ATC on their account (“costs on account”). Pat wants to be able to withdraw HK$50,000 per month from her bank account for her living and legal expenses.

2.The Plaintiff amicably agrees, as a matter of practicality, that the Injunction Order should not cover the costs on account, and that Pat can only withdraw HK$20,000 per month for her living and legal expenses.

B.  BACKGROUND

3.The Plaintiff is a Hong Kong Company which makes and sells toys. D1 (“Tommy”), a registered CPA, had been its financial controller from 2005 until his arrest on 8 May 2025.

4.Pat is the wife of Tommy. ATC is a sole proprietorship set up in the name of Pat. However, Pat claims that ATC was in fact operated by Tommy.

5.On 7 May 2025, during a trip in Taiwan, Tommy allegedly confessed to Pat that he had misappropriated several million dollars from the Plaintiff to support his investment in Thailand. On Pat’s persuasion, Tommy returned to Hong Kong and admitted his guilt to the Plaintiff on 8 May 2025. He was arrested on the same day.

6.On 9 May 2025, Tommy was charged with theft. He has since been remanded in custody.

7.The Plaintiff discovered that from January 2018 to April 2025, Tommy and D2 (Tommy’s sister and the other person in the Plaintiff’s accounting team) had misappropriated sums of money amounting to USD$21,052,913.51 (the “Misappropriated Sum”) from the Plaintiff’s bank account and understated its profits to conceal the misappropriations. The Misappropriated Sum was diverted to D3 (Tommy’s company), Pat and ATC and two Thai individuals without legitimate commercial reasons. Amongst others, ATC had received at least US$7.7 million.

8.The Defendants are sued in knowing receipt, dishonest assistance, constructive trust, unjust enrichment and conspiracy. The Plaintiff seeks restitution of the Misappropriated Sum.

9.By their Defence filed on 19 March 2026, Pat and ATC denied liability. They claimed that Tommy had had other sources of income apart from his job with the Plaintiff. ATC was in fact operated by Tommy. Pat was not clear about its connection with the Plaintiff’s business and whether ATC had the legal right to receive or retain the money from the Plaintiff.

10.Pat also claimed that she was informed that Tommy’s business in Thailand was gaining success, so their family lived in luxury. All the capital or profits given by Tommy to Pat were expended on daily expenses of the family or returned to Tommy at his request. Pat did not know whether the money received by her from Tommy was in breach of trust to the Plaintiff or whether Tommy had transferred any assets to ATC.

11.On 30 March 2026, this Court (a) granted the Injunction Order on ex parte basis against, amongst others, Pat, restraining her from disposing of assets up to the value of US$21,052,913.51; (b) made a Disclosure Order against Pat requiring her to disclose assets that have an individual value of HK$10,000.

12.On 10 April 2026, the ex parte Injunction Order was continued by this Court (the “Continuation Order”). As an interim measure, this Court varied the Injunction Order so that Pat was allowed to withdraw a total of no more than HK$20,000 per month from her own earnings, for two times, for her living expenses, pending her variation application to be taken out on 24 April 2026, failing which the allowance shall cease after the 2 withdrawals.

13.Purportedly pursuant to the Disclosure Order, Pat disclosed by an affirmation filed on 17 April 2026 that she has 2 bank accounts with balances of $7,700.00 and $74.25 respectively, according to her memory. ATC has 3 bank accounts but the balances are unknown to her, save that she learnt from Tommy’s affirmation that those accounts had been cancelled. She has 2 cars, a Kia worth about HK$60,000 and a Toyota worth about HK$140,000 subject to a mortgage of about HK$110,381.26. She has 7 luxury handbags and 7 earrings. She has MPF but is not aware of the value. She has no other assets individually worth over HK$10,000.

14.By the Variation Summons, Pat in substance wants to be able to operate her Citibank Bank account which is used to receive her income. Alternatively a new bank account is to be opened by her for her use. She also wants the costs on account in the sum of HK$51,250 held by her and ATC’s former solicitors, to be applied towards her legal expenses.

15.D5 claims in her affirmation filed on 9 April 2026 that she has mainly been relying on loans from her relatives and/or friends for her living and legal expenses. Although she has not worked for 20 years, she has been working as a part-time Uber driver since about September 2025. Her monthly income varies from $14,321.27 to $36,515.52. There could be some months with more earnings. Since her bank account was frozen, she could not log on to the bank mobile app to obtain the relevant bank statements.

16.Her monthly expenses are said to be HK$34,850 to HK$43,850, broken down into:

(1)  Transportation: HK$6,000.00 - $15,000.00 (including money to be spent on petrol for her job)

(2)  Car mortgage repayment: HK$4,450.00

(3)  Food: HK$8,400.00

(4)  Foreign helper: HK$6,000.00

(5)  Miscellaneous payments: HK$6,000.00

(6)  Maintenance costs of her pets: HK$4,000.00

17.Pat asks for a monthly amount of HK$40,000 for her living expenses and HK$10,000 for her legal costs, “though she may not be able to earn HK$50,000 in every month.”

18.At this hearing, Pat orally supplements her evidence to the effect that with only HK$20,000 per month, she is unable to afford daily spendings, including increased petrol price. She could not pay tunnel fees and had to pay fines. Further, she alleges that there are potential medical expenses in relation to her spinal issues.

19.Ms Lok, counsel for the Plaintiff, submits that the Variation Summons is without merit. Pat markedly fails to discharge her burden to show by sufficient evidence that she does not have other assets available to meet the legal fees or other expenses and the purpose of the application is not an attempt to dissipate the assets. The undisputed facts, the hollow defence and the appallingly defective and illusory “disclosure” point to the exact opposite.

20.However, the Plaintiff has made a pragmatic proposal of allowing Pat to withdraw HK$20,000 per month from her own earnings for her living expenses and/or legal costs until trial or further order and to release the costs on account for the legal costs.

C.  LEGAL PRINCIPLES

21.To seek payment out for living or legal expenses under an ‘ordinary’ Mareva injunction, where there is no proprietary claim asserted against the enjoined assets, the Court should consider whether the defendant has shown by sufficient evidence that (a) he does not have other assets available to meet the payment, and (b) the purpose of the application is not an attempt to dissipate the assets (which prima facie are the defendant’s) to frustrate the enforcement of judgment by the plaintiff: Wharf Ltd v Lau Yuen How [2010] 1 HKLRD 783 at §14, per Au J (as he then was).

D.  ANALYSES

22.The Injunction Order is not proprietary in nature. What Pat is seeking is principally payment out from her own income and not the Plaintiff’s assets, but she cannot ask for more than what she earns.

23.Considering paragraph 15 above, keeping a car is necessary to enable Pat to make a living. HK$37,000 per month appears to be reasonable for her and her family’s (but not the pets’) expenses.

24.Pat’s oral evidence at the hearing cannot be taken into account as it was an ambush on the Plaintiff.

25.However, the following circumstances arouse my concerns. In her 3^rd affirmation filed on 24 April 2026,

(a)  §7 admits that Pat had mentioned to the Plaintiff on 8 May 2025 that she was willing to sell all her assets to help Tommy repay the Plaintiff. Pat also mentioned the investment in Thailand. Pat assured the Plaintiff that the Thai investments were true (because all those information was what D1 told her).

(b)  §10 denies ever trying to hide from the Plaintiff the existence of a property in Fanling in the joint names of Pat and her mother. Pat claims that that property belonged entirely to her mother and had nothing to do with the Plaintiff, although there was no documentary evidence at all.

26.The Fanling property was sold in early 2026. Pat, purportedly at the generosity of her mother, took half of the net proceeds, ie around HK$1,700,000. She did not, as promised in paragraph 25(a) above, provide any part of the proceeds to the Plaintiff. Instead, she allegedly gave HK$1,246,000 in cash:

(a)  to pay for decoration fees owed by Tommy (with proof);

(b)  to repay her mother HK$152,000, (without proof);

(c)  to repay her relatives and friends HK$1,025,000, who allegedly had been supporting the living and legal expenses of Tommy, D3 and Pat (without proof, save for HK$95,000 from one Madam Cheung);

(d)  to repay her credit card debt of HK$200,000 (with proof for only about HK$120,000); and

(e)  to repay school fees and living expenses of her younger daughter in Japan (with insufficient proof).

27.Items (b) and (c) form the bulk of her share of the net proceeds which appears to have vanished without proof. There was also no reason why she had to pay these people in cash instead of through means that could leave a paper trail.

28.Further, Pat has never stated eg that the Thai investments had failed. She never tried to ascertain from Tommy to see if they could be realized.

29.In such circumstances, I am not satisfied that she has discharged her burden under the tests of Wharf v Lau.  I am of the view that the Plaintiffs’ proposal to let her withdraw HK$20,000 per month was more than reasonable.

E.  CONCLUSION

30.I therefore order that:

(1)  §11 of the Continuation Order be varied and replaced by the following provision:

“The 4^th Defendant be permitted to withdraw from her Citibank (Hong Kong) Limited account number XXXXXXXX a total of HK$20,000 per month for her living and legal expenses until trial or further order of the Court.”

(2)  The ex parte Injunction Order made on 30 March 2026 as continued by the Order dated 10 April 2026 shall not operate over the 4^th Defendant’s HK$51,250.00 currently held at the client’s account in the 4^th and 5^th Defendants with Messrs Au‑Yeung, Chan & Ho.

(3)  Costs of and occasioned by the D4/D5 Variation Summons be in the cause of the action.

31.I thank Ms Lok for her assistance.

Ms Frances Lok SC, instructed by Robertsons, for the Plaintiff

The 4^th and 5^th Defendants appeared in person