Read the full judgment text of HCA 5165/2001 on BabelCite. This High Court CFI judgment was delivered on 3 July 2002 before Deputy High Court Judge Poon.
Civil procedure – discovery in aid of Mareva injunction – proprietary claim – constructive trust – Bankers Trust jurisdiction – section 21 of the Evidence Ordinance, Cap.8 – plaintiff is freight forwarder, 1st defendant is former managing director, 2nd defendant is 1st defendant's wife and former services manager, 3rd defendant is owned by 1st and 2nd defendants and was designated exporter for major customer Rustan – plaintiff discovered misdeeds by 1st defendant regarding Rustan payments including short-invoicing and invoicing for non-existent warehouse charges – defendants resigned and 1st defendant gave undertaking and paid about HK$1 million – funds totalling almost HK$8 million paid into 3rd defendant's bank accounts – ex parte Mareva injunction obtained but discharged for material non-disclosure and fresh injunction granted on fortification – plaintiff applied for discovery in aid of Mareva injunction – purpose of discovery order to preserve assets which might otherwise be dissipated notwithstanding the injunction – whether plaintiff must establish a strong prima facie case for ancillary discovery higher than good arguable case for Mareva injunction – court questioned whether strong prima facie case is synonymous with good arguable case and declined to decide the point but proceeded on assumption that strong prima facie case required – plaintiff held to have strong prima facie case – defendants admitted funds paid into 3rd defendant's accounts – newly raised joint venture agreement defence was oral, not reduced to writing since 1993, not referred to in 1st defendant's deed of undertaking, not raised in earlier discharge application, with no documentary evidence of its implementation – joint venture point described as suspicious and requiring to be tried – bank statements required from July 1995 starting point to render tracing exercise effective – requests regarding what became of monies and further transfers by third parties not objectionable – defendants to state if they do not know – discovery orders granted with extended time for compliance – costs to be plaintiff's costs in the cause – Representation: Mr Dennis Law, instructed by Messrs Wilson Yeung & Co., for the Plaintiff; Miss Jennifer Tsang, instructed by Messrs Hui & Lam, for the 1st to 3rd Defendants.
Legal issues: Standard for granting discovery in aid of a Mareva injunction · Whether the plaintiff has a strong prima facie case on its claims · Scope of discovery order in aid of Mareva injunction
Outcome: Discovery orders granted to the plaintiff in aid of the Mareva injunction; the defendants' application to resist discovery was dismissed, and time for compliance was extended.