Liming Capital Ltd v. Yeung Hei Kwan, Jackie

HCA1818/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1818 OF 2008

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Coram:   Deputy High Court Judge Carlson in Chambers

Date of Hearing: 31 October 2008

Date of Ruling:  31 October 2008

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R U L I N G

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1.In this matter Mr Haddon-Cave who appears on behalf of the defendant is applying to discharge an ex-parte injunction made by Chu J. on the basis that the plaintiff through its principal witness Mr Weber has been guilty of material non-disclosure.

2.The fact of the matter is that Mr Weber has failed to disclose in his ex-parte affidavit that he has had a sexual relationship with the defendant and it is said on the defendant’s behalf that this liaison informed very much of their relationship which, of course, spread into their business relationship which has resulted in this action being brought by the plaintiff which employed Mr Weber as its agent.

3.Against that, it is submitted by Mr Arthur, on behalf of the plaintiff, that whilst Mr Weber accepts that he had a sexual relationship with the defendant it was not as serious as she has suggested and that somehow they were able to keep that side of things quite separate from their business dealings.  I do not think that is a point that can run in these circumstances, even putting aside the fact that their personal relationship may not have been quite as strong as the defendant has suggested, where she indicates in her affirmation that he was allowed to live with her and did live with her for a number of months whilst all of this was going on.  The fact is that this was a very significant piece of evidence which should have been placed before the judge. It is not for the plaintiff to say what is and what is not important.  In these circumstances it is for the ex-parte judge to be informed of all these matters and it is then for that judge to decide what weight to put on that particular evidence.  The fact that it may not have made any difference in the event is also not a matter which really ought to concern me at this stage.  I take the view that this was a material feature of the evidence which ought to have been placed before the ex-parte judge and in these circumstances I propose to discharge the injunction made by Chu J.

4.This then brings me to the very important issue of whether I should now reinstate the injunction having discharged it in these circumstances.  Mr Haddon-Cave says the matter is so serious that really the plaintiff is not to be indulged again.  Nevertheless, it strikes me that given the whole history of this matter and they were talking about a vast amount of money where there is quite a lot of evidence to indicate that this money has come into the hands of the defendant, a substantial proportion of which should have been passed over to the plaintiff.  Therefore I think that in all the circumstances, I ought to exercise my discretion in the plaintiff’s favour and reinstate this injunction.

5.I am perfectly satisfied that there is a serious issue to be tried here on all of these matters.   There is a question as to whether -- of course the fundamental question is whether the right plaintiff is before the court, whether it ought to be Mr Weber who is plaintiff  instead of the present plaintiff on whose behalf he is said to have acted.  But be that as it may, on the present material there is a perfectly good case that has been made out that the present plaintiff is the appropriate plaintiff.  It may be that on further consideration those advising the plaintiff may decide that to be on the safe side Mr Weber ought to be joined as second plaintiff, but that is for the future.  There is an agreement, something of a homemade agreement, in writing which is said to be between Mr Weber and the defendant herself.  That will no doubt all come into play at the trial.  The significance of this is that so far as I am concerned today there are a number of admissions, if I can put it in that way, which are contained in that agreement to which the defendant has signed up, and I think these are all significant matters which I ought to take into account in weighing up the evidence as it is currently presented, and so I think it is right that this injunction should be restored until trial or further order. 

6.That then brings me to a number of exceptions and one of them is the fortification of the injunction.  The plaintiff, which of course is an overseas plaintiff with no assets here at all, has given an undertaking in damages.  But I think there is a real risk that it may turn out to be worthless and so it ought to be fortified.   As matters presently stand, it may need to be looked at again in the future, I would have thought that $250,000 should be sufficient and this fortification ought to be provided within the next seven days.  There is already a substantial amount with the plaintiff’s solicitors and I am told by Mr Arthur, who appears for the plaintiff today, that further amounts have also been remitted to his firm, but $250,000 is to be held by Laracy Gall to the court’s order until further order.

7.The next matter relates to legal expenses.  There is an issue here which would also bear on the question of fortification, but I think it perhaps has more of a bearing on what I am now coming to which is how much, if anything, should be released to the defendant to pay for her legal expenses.  It is submitted on behalf of the plaintiff that this is very much a proprietary claim.  I think that would need further investigation.  There may well be something in the argument, but I take the view that the more usual course ought to apply in this case which is that the defendant should be at liberty to withdraw as from 1 November, that is from tomorrow, the monthly sum of $25,000 up to a maximum of $250,000.  So what I have in mind therefore is that for the next ten months, she will be able to withdraw $25,000 each month.  I also give her liberty to apply to vary this part of the order upon her showing cause for such variation and that would need to be supported by affidavit and bills of costs and so forth.

8.I think that is all I need to say save for two other matters, firstly, the very important question of the consequences of my having discharged the ex-parte injunction.  “Mr Arthur, the usual course is that the defendant ought to have her costs; and then there is a question of the committal proceedings. As the injunction has gone, I daresay that those proceedings will have to go as well because they were made under that injunction.  But of course the statement that she has already provided can stand in this injunction, so we do not have to have a repetition of all of that.  Now, did you want to say anything about it because, as you know, the usual course is that the defendant ought to have her costs on the discharge of the injunction.”

(Discussions on costs)

9.The usual order, and I can see no reason to depart from it,  is that she will have to have her costs in respect of that.  And as to today’s costs which will of course include the bulk of today’s costs, up to the time when I returned to court to deliver my judgment will also be to the Defendant, and then the rest of costs will be costs in the cause which includes the restoration of the injunction.

Randell Arthur of Messrs Laracy Gall, for the Plaintiff

Francis Haddon-Cave, instructed by Messrs Francis Kong & Co., for the Defendant