Hornor Resources (International) Co Ltd v. Savvy Resources Ltd

HCA335/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 335 OF 2010

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BETWEEN

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Before : Hon Chu J in Chambers

Date of Hearing : 19 March 2010

Date of Decision : 23 March 2010

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DECISION

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1.In this action, the plaintiff claims against the defendant for damages for breach of a contract for the sale and purchase of iron products.

The Mareva injunction and subsequent applications

2.On 5 March 2010, the plaintiff applied for and was granted ex parte a worldwide Mareva injunction against the defendant up to the limit of US$6,435,000. 

3.On 8 March 2010, the plaintiff issued the summons for the continuation of the Mareva injunction.  On 11 March 2010, the defendant applied by summons for the discharge of the injunction. 

4.At the hearing on 12 March 2010, Poon J adjourned both summonses for one week for argument and gave directions for filing of evidence. 

5.Upon the defendant’s application, Poon J varied the ex parte order by: (1) increasing the weekly business expenses to US$500,000; (2) increasing the expenses for legal representation and advice for an additional HK$300,000 for the one-week period from 12 to 19 March 2010; (3) ordering a stay of paragraphs 4 and 5 of the ex parte order requiring the defendant to make disclosure as to its assets; and (4) ordering the plaintiff to provide fortification of its undertaking by way of bank guarantee or payment into court in the amount of US$ 2 million.  On 16 March 2010, the plaintiff paid into court US$ 2 million in compliance with the Order of Poon J.

6.In the afternoon of 12 March 2010, the defendant issued a summons for stay of these proceedings on the ground of the arbitration clause in the parties’ contract and/or the exclusive jurisdiction clause in favour of the Courts of England and Wales.  The plaintiff does not oppose the stay summons.  The plaintiff however asks for the continuation of the injunction whereas the defendant seeks to have it discharged.  Accordingly, the primary questions for determination at this hearing are whether the Mareva Injunction should be discharged or should it be continued while these proceedings are stayed.  In this regard, I accept that this court has jurisdiction and power to make a Mareva injunction while the proceedings are stayed: section 2GC of Arbitration Ordinance, Cap.341 and section 21M of High Court Ordinance, Cap.4.

The dispute

7.It is common ground that by a written contract dated 9 December 2009 (“the Contract”), the plaintiff contracted to buy and the defendant agreed to sell 150,000 WMT of iron ore products, made up of 75,000 WMT of special sinter feed and 75,000 WMT of concentrates of iron ore (“the Products”).  Under clause 2.2 of the Contract, the Products shall be delivered before 10 February 2010 and in accordance with the provisions in Annex 1 of the Contract.  Clause 1 of Annex 1 provides that within 10 working date from the date of completion of loading of the Products onto the vessel, the defendant shall notify the plaintiff of: (i) the name of the vessel; (ii) the bill of lading quantity; (iii) loading port cargo analysis and (iv) the approximate value of the Products loaded.  Further under clause 9(c) of Annex 3, upon completion of the loading of the Products, the defendant is required to send the shipment documents specified therein to the plaintiff and the negotiating bank within 28 days after the departure of the shipment of the Products from the loading port. 

8.On 18 December 2009, the plaintiff issued in favour of the defendant an irrevocable letter of credit for the payment of the Products.  The defendant has however not made delivery under the Contract. 

9.The evidence before the court shows that the defendant had entered into a contract dated 27 July 2009 (“the Namisa’s Contract”) with Namisa Europe, LDA (“Namisa”) for the supply of 120,000 WMT of iron ore products.  Subsequently in mid-September 2009, the defendant and Namisa agreed on the supply of an additional quantity of iron ore products, being 150,000 WMT sinter feed.  As a result, an amendment dated 21 September 2009 was made to the Namisa’s Contract (“the 1^st Amendment”).  Then by the end of November 2009, Namisa agreed to further sell and the defendant agreed to buy an additional quantity of 75,000 WMT special sinter feed and 75,000 WMT concentrates of iron ores.  This led to a second amendment of the Naimisa’s Contract (“the 2^nd Amendment”).  The goods purchased from Namisa under the 2^nd Amendment are the same as the Products to be sold to the plaintiff under the Contract.

10.The evidence further shows that on 8 January 2010, the defendant contracted with a third party (whose identity has been withheld by the defendant and it has referred to this party as the “Long Term Customer”) for the sale to it of 75,000 WMT special sinter feed and 75,000 WMT concentrates of iron ores to be delivered before 10 February 2010.  The goods sold under this contract are the same as the Products sold to the plaintiff under the Contract.  The delivery dates are also the same.

11.In summary, what happened was: after contracting with Namisa for the supply of 75,000 WMT special sinter feed and 75,000 WMT concentrates of iron ores, the defendant entered into the Contract for the sale of these products to the plaintiff.  About a month later, the defendant entered into another contract with a third party for the sale of the same products with the same delivery date.

12.It is the defendant’s case that as it was not in a position to make delivery to both the plaintiff and the Long Term Customer, it had made a commercial decision of making delivery to the Long Term Customer.  Other than the suggestion that this is a long-term customer, the defendant has not explained why it had preferred this customer to the plaintiff.

Delay in serving the ex parte order

13.In applying to discharge the Mareva injunction, the defendant not only says that the plaintiff has failed to meet the requirements for the grant of a Mareva injunction, but also on the basis that the application should not have been made ex parte in the first place and that there was delay in serving the injunction on the defendant. 

14.On the delay in serving the injunction on the defendant, the ex parte hearing finished at 5:30 pm on 5 March 2010.  The order was sealed on 6 March 2010, which was a Saturday, and served on the defendant at 3 pm on Monday, 8 March 2010.  By then, the defendant had already been alerted of the order by its bank on whom the plaintiff had served the injunction.  The plaintiff had on 6 March served an unsealed copy of the order on a third party whom it mistakenly believed had contracted with the defendant for the purchase of the goods that were to be sold to the plaintiff.

15.The plaintiff was obliged to effect service on the defendant as soon as practicable.  It has not done so in that the injunction should have been served or at least brought to the defendant’s notice by email or fax earlier than the afternoon of 8 March 2010.  The delay has not caused significant or substantial prejudice to the defendant.  On the facts of this case, I do not consider that the delay ought by itself lead to a discharge of the Mareva injunction, though it may be relevant to the exercise of the court’s discretion. 

Basis for proceeding ex parte

16.As to the propriety of proceeding ex parte with the application, the plaintiff had in the morning of 5 March 2010 emailed a letter of demand to the defendant.  Strictly speaking, it could have given notice to the defendant of its ex parte application.  However, I accept that in most cases of Mareva injunction, the concern about risk of dissipation will mean there is a need not to give notice to the defendant of the application. The case of Thane Investments Ltd & Ors v. Tomlinson & Ors [2003] EWCA Civ 1272 on which Mr Yan SC places considerable reliance has a different factual matrix.  I agree that where the parties are already engaged in litigations and/or are legally represented, there is a stronger case for requiring notice to be given of an injunction application.

17.It is correct that para.26(c) of Practice Direction 11.1 requires the affidavit in support of the application to state the facts as justifying the application to be made ex parte.  The ex parte judge was no doubt aware that it was an ex parte hearing and he was prepared to grant the injunction on the basis of the affidavit evidence and submissions before him.  I do not consider that non-compliance with para.26(c) Practice Direction 11.1 by itself would have justified this court to discharge the injunction, though it may be relevant to the court’s exercise of discretion.        

18.I now turn to consider the requirements for Mareva injunction.

Good arguable case

19.In my view, it cannot be seriously argued that the plaintiff does not have a good arguable case on its claim for damages for breach of contract.  There is no doubt that a binding sale and purchase contract exists between the parties and there is no real dispute that the defendant has not made delivery under the contract.  The defendant has offered certain explanations as to why it was unable to make delivery, which is not relevant in the context of whether the plaintiff has a good arguable case.  I shall come to them when considering the question of a real risk of dissipation. 

20.The defendant argues that under the Contract, time is not of the essence.  It further refers to clauses 9.1 and 9.2 of the Contract.  Clause 9.1 provides that unless there is early termination of the Contract in accordance with the provisions therein, the Contract shall continue to be in full force and effort until all obligations under the Contract are complied with by the parties.  Clause 9.2(a) provides that if either party defaults in performing its obligations, then the innocent party may terminate the Contract by giving 60-day written notice.  The defendant says that the plaintiff had failed to give the 60-day notice and that the claim is premature. 

21.In my view, without deciding the point, whether time is of the essence of the Contract will not impact upon whether the plaintiff has a good arguable case for a claim in damages for non-delivery.  Similarly, the effect of clause 9.1 only impacts on whether and how the plaintiff may terminate the Contract on the basis of a breach by the defendant.  It will not preclude the claimant from pursuing a claim for damages for non-delivery.

22.The defendant also raises challenge to the amount of loss alleged by the plaintiff.  The loss is estimated to be US$6,435,000, which is derived by taking the difference between the market price in February 2010 (the time for delivery under the Contract) and the price of the Products under the Contract.  It is not the defendant’s argument that the plaintiff will suffer no loss as a result of its failure to make delivery under the Contract.  The plaintiff has indicated that the Products were for sub-sale to its customer.  I do not understand the defendant to be disputing that the plaintiff will resell or has resold the Products, although it has questioned the veracity of the sub-sale contract between the plaintiff and Ningbo Foreign Trade Co.  If the resale price under the Ningbo contract is taken into account, the loss of the plaintiff in terms of loss of profits will be approximately US$5.3 million.  It is common ground, and the evidence from both sides show that the market for the Products had raised substantially between December 2009 and February 2010, an increase o over 30%.   At this interlocutory stage, I do not consider that the plaintiff’s estimated loss of US$ 6,435,000 can be said to be unarguable.

Real risk of dissipation

23.The plaintiff’s case on risk of dissipation of assets, both at the ex parte stage and at this inter partes stage, is based mainly on the conduct of the defendant.  It is said that the defendant’s acts when dealing with the plaintiff were dishonest and exhibited a low standard of commercial morality, justifying an inference that it would remove assets beyond the reach of the plaintiff once it has knowledge of these legal proceedings against it.  The defendant on the other hand argues that the plaintiff is required, but has failed, to adduce solid evidence to support a real risk of dissipation by the defendant.

24.It is trite that each case must depend on its own facts.  In assessing whether the plaintiff has shown a real risk that, unless the defendant is restrained, the judgment will go unsatisfied, a number of factors are relevant, including the existence of good arguable grounds to say that the defendant has acted fraudulently or dishonestly or with an unacceptably low standard of commercial morality giving rise to a feeling of uneasiness about the defendant: Gee, Commercial Injunctions (5^th edition), pp.357 para.12.040. 

25.In Honsaico Trading Ltd v. Hong Yiah Seng Co Ltd [1990] 1 HKLR 235, a case concerning the continuation of a Mareva injunction where the issue was whether there was a real risk of the defendant dissipating its assets to avoid a judgment, Godfrey J (as he then was) considered that the most important consideration in the case was the devious conduct of the defendant in its dealings with the plaintiff.  He pointed out that (at 240F-I):

“I am not here to punish the defendant because I disapprove of its conduct; that is not the purpose of a Mareva injunction. But, if I come to the view that its conduct, in relation to this transaction, leaves me so uneasy that I am driven to the conclusion that there is a real risk that a judgment in favour of the plaintiff might remain unsatisfied, then I conceive it to be my duty to grant the injunction.  …”

Godfrey J concluded that the defendant in the case had exhibited an unacceptably low standard of commercial morality in its dealings with the plaintiff, and he was driven to the conclusion that there was a danger that if the defendant thought it was in its best interests to do it, it would not shrink from attempting to defeat the interests of the plaintiff under an eventual judgment.

26.Mr Yan SC, who appears for the defendant, submits that the court must exercise caution in applying the concept of “low standard of commercial morality”.  Reliance is placed on the judgment of Waung J in China Minsheng Banking Corp Ltd (Shenzhen Branch) v. Dichain Holdings Limited & Anor (unreported, HCCT 58/2006, 17 November 2006), which cautioned that the judgment of Godfrey J in Honsaico Trading Co should not be applied too strictly or too literally (at para.14).  Mr Yan SC further refers to Thane Investments Ltd & Ors v. Tomlinson & Ors [2003] EWCA Civ 1272, which is an appeal against the grant of a post-judgment Mareva injunction, in which Peter Gibson LJ stressed the need in each case to scrutinize with care what is alleged to have been the dishonesty of the person against whom the order is sought to see if it really justifies the inference of risk of dissipation (at para.28).

27.I accept that the court should examine with care allegations that a defendant has acted dishonestly and should not too readily infer a real risk of dissipation from the conduct or commercial morality of a defendant.  It is also important to bear in mind that ultimately the question is whether on the evidence, which includes evidence of the defendant’s conduct in its dealings with the plaintiff, a refusal of the injunction will involve a real risk that the judgment in favour of the plaintiff would remain unsatisfied.

28.In the present case, the plaintiff says that the defendant had acted dishonestly and had given false or misleading information to the plaintiff about the shipment and delivery under the Contract.  It is said that the defendant has no regard for its contractual obligation and had resold the Products to take advantage of the rising market.  It is also said that the defendant deliberately concealed from the plaintiff its intention not to make delivery to the plaintiff under the Contract and further gave untrue explanations for its failure to make delivery, both to the plaintiff and in these proceedings.

29.The defendant’s explanation for the failure to make delivery under the Contract is that there was a delay in the delivery by Namisa to the defendant.  Mr Leung Yuen Yuen said in his first affirmation that (at para.41): “The defendant had all along intended to deliver the Products but it was just that it could not do so in accordance with the schedule stipulated in the Contract due to delays in the supply of raw materials under the Head Contract.”  As noted above, up to February 2010, the defendant had only secured from Namisa one contract for the supply of the Products (i.e. the 2^nd Amendment) whereas it had entered into two contracts for the sale of the Products.  Mr Leung sought to explain the position by asserting in his third affirmation that the defendant had placed another order at about the same time as the order in respect of the 2^nd Amendment, namely, around August 2009 (at para.17).  As Ms Tam SC points out, this is not borne out by the series of emails between the representatives of the defendant and Namisa between August and November 2009.  In fact, the assertion is directly at odds with the contemporaneous emails, which indicate that it was only by the end of November 2009 that Namisa was able to commit to sell and deliver to the defendant one shipment of the Products.  The explanation that the non-delivery is caused by Namisa’s delays in making supply under its contract with the defendant is demonstrably untrue. 

30.Even if Mr Leung’s assertion that the defendant had orally placed an order for an additional shipment is to be accepted, it is clear that Namisa had not committed itself contractually to supply it because admittedly the parties have yet to enter into a third amendment to the Namisa Contract.  The fact therefore remains that after entering into the Contract with the plaintiff, the defendant consciously chose to enter into a second contract for the sale of the Products when it had to its knowledge only secured one shipment of the Products.  There is no evidence of a reasonable prospect of the defendant being able to meet its obligations under both contracts.  The plaintiff is justified in its criticism that the defendant has no regard at all for its contractual obligations. It is a misleading suggestion for the defendant to say that it had taken a commercial decision of making delivery to the Long Term Customer because there were insufficient goods to make delivery under both contracts.  The failure to deliver to the plaintiff is not something unforeseen or accidental, but is the direct and inevitable result of the defendant’s knowingly acting in disregard of its contractual obligations.  The defendant has offered no cogent reason for preferring a subsequent buyer to the plaintiff.  The plaintiff’s contention that the subsequent sale was made simply to take advantage of the rising market is, in my view, quite probable.  The defendant’s conduct is commercially unacceptable.    

31.The plaintiff also says that the defendant deliberately concealed the fact that it was not going to make delivery under the Contract and misled the plaintiff into believing that the goods contracted for were being shipped from Brazil on the vessel MV CHS Cosmos (“Cosmos”).  The series of emails between Miss Joanna Zhang of the plaintiff and Mr Leung of the defendant show that the defendant had conveyed the message that the goods to be delivered to the plaintiff were shipped on board Cosmos.  As early as 7 January 2010, Mr Leung provided the details of Cosmos.  On 1 February 2010, upon Ms Zhang’s enquiries, Mr Leung gave the latest update on the berthing and estimated departure time of Cosmos as well as the demurrage rate for the vessel.  And upon being chased for the shipment advice, Mr Leung replied on 8 February 2010 that Cosmos “is waiting for advice.” 

32.I note there is no direct evidence from the defendant as to when it decided that the goods supplied by Namisa would be delivered to the Long Term Customer and not to the plaintiff.  It is however reasonable to infer that at the latest when Cosmos sailed from the port of loading, the defendant would have known that the goods laden on the vessel were not for delivery to the plaintiff.  In fact, it is probable that the defendant would have decided not to deliver to the plaintiff when it chartered the vessel to carry the goods from the Brazilian port.  At any rate, by the series of emails on 1 February 2010 and thereafter, the defendant was plainly misleading the plaintiff into believing or continuing to believe that the goods contracted for were in the process of being carried to the port of delivery.  It was because of this that the plaintiff’s initial complaints were based on breaches of the obligations to give relevant information after loading (under clause 1 of Annex 1) and to deliver the shipment documents (under clause 9 of Annex 3). 

33.The defendant sought to argue that Mr Leung never confirmed that Cosmos was the vessel carrying the goods for the plaintiff or that the goods contracted by the plaintiff would be loaded onto Cosmos.  It is said that in the 7 January 2010 email, Mr Leung had indicated that the vessel was Cosmos or another substitute.  In my view, this is immaterial and does not serve to put the defendant in any better light.  The plaintiff’s compliant is not that it was misled as to the identity of the vessel carrying the goods.  Rather, the complaint is that it was misled into believing that the Contract was being performed when to the defendant’s knowledge there was a breach and no delivery to the plaintiff was being contemplated. 

34.The defendant also argues that since it had not issued a shipment advice, the plaintiff should have known that the delivery might have to be delayed.  Mr Leung said in his first affirmation that on 8 February 2010, with only one out of two shipments was delivered by Namisa and the defendant was waiting for another shipment from Namisa, the defendant had yet to decide on how to allocate the goods between its customers and the destination port was not yet confirmed.  These contentions are inherently unreliable.  As analyzed above, so far as the Products are concerned, the defendant had only contracted for one shipment with Namisa.  It is not the case that a second shipment from Namisa was pending.  It is also inherently improbable that some 6 days after the vessel sailed from the port of loading, the defendant was still undecided as to which customer the cargo on board the vessel was to be delivered.   

35.The plaintiff also relies on what was said by Mr Leung during his meeting with Mr Wang Yang of the plaintiff on 1 March 2010.  According to Mr Wang, Mr Leung told him that the 1^st seller, a Hong Kong company associated with Guangxi Shenglong Yejin Co Ltd (formerly known as Guangxi Wanxin Steel Co., Ltd), had refused to deliver the Products to it.  This was subsequently discovered by Mr Wang to be untrue.  Mr Leung disputed Mr Wang’s evidence about the meeting.  As a result, Mr Wang produced the tape recording of the meeting together with the transcript to substantiate his evidence.  Admittedly, as the recording was done by a mobile phone, it is not of good quality and much of what Mr Leung said was inaudible.  However, I do accept Ms Tam’s submissions that it would be most odd and unnatural for Mr Wang to be making repeated references to Guangxi Wanxin refusing to make delivery and to say so out of his own volition.

36.Mr Yan submits that even if Mr Leung had said that the non-delivery was due to Guangxi Wanxin’ refusal to make delivery, it is entirely understandable for him to make up excuses given that the defendant had decided to make delivery to the Long Term Customer instead of to the plaintiff.  It is said that no adverse inference should be drawn against the defendant.  It may be so if this is taken in isolation.  However, when viewed together with the other conduct of the defendant in dealing with the plaintiff, including entering into a subsequent contract for the sale of the Products when it had only secured one shipment and the series of emails with Miss Zhang with regard to Cosmos, it would show that as late as March 2010, the defendant was still trying to conceal the real reason for the non-delivery.        

37.The plaintiff further relies on what was learnt from its business contacts as to the defendant’s conduct in its business dealings with other parties.  It is said that the defendant had also breached its contractual obligations to those parties.  The defendant denies these allegations.  The plaintiff’s evidence in this regard is primarily hearsay.  The evidence also shows that the information Mr Wang obtained from his contacts is not entirely reliable.  I do not attach weight to this aspect of the plaintiff’s case.      

38.In my view, there are good arguable grounds for the plaintiff’s saying that the defendant was dishonest in its dealings with the plaintiff, that it deliberately concealed from the plaintiff its breach of the Contract and knowingly misled the plaintiff to believe that as performing its contractual obligations.  There are also good arguable grounds for the submission that the defendant had not been truthful both to the plaintiff and in these proceedings as to the real reason for the non-delivery under the Contract.    

39.The defendant is a BVI company incorporated in March 2007.  It does not seem to have an established place of business address, whether in Hong Kong or elsewhere.  Mr Leung stated in his affirmations that the defendant is a well-established and reputed corporation and has been doing business with various reputable clients.  It is also said that its business turnover for the previous year is in excess of US$ 150 million.  Mr Yan submits that all these are incompatible with the defendant having a low standard of commercial morality in dealing with customers. It is also submitted that there is no credible basis for suggesting that the defendant would suddenly move away its assets just to avoid one claim of the plaintiff.

40.I have placed no weight on the plaintiff’s evidence as to the defendant’s conduct in dealing with other customers.  The defendant has adduced evidence of its contracts with some established clients.  However, what is more important is the defendant’s behaviour when dealing with the plaintiff and in response to the plaintiff’s claim.  For reasons stated above, I have come to the view that there are good arguable ground for saying that the defendant has been dishonest in its dealing with the plaintiff and some of its assertions in these proceedings are demonstrably unreliable. 

41.The defendant has not adduced any documentary evidence to substantiate its case that it has a large and successful business operation.  The plaintiff’s affirmations state that the defendant had bank accounts in Hong Kong.  Other than this, there is no evidence as to the nature or size of the defendant’s assets.  Mr Yan indicates in his submissions that the only asset of the defendant is cash in bank and the amount is about US$3 million.  I am unable to accept that on the available evidence, it can be said that there is no room for giving rise to a real risk of the plaintiff’s interest under an eventual judgment being defeated by the defendant.  In this regard, Ms Tam has observed that since the defendant’s management is said to have over 20 years of experience in the raw materials business, it will not be difficult for the defendant’s management to operate the business under another corporate identity.  I agree.           

42.In short, I am of the view that the plaintiff has made out a case of a real risk of dissipation.

Balance of convenience

43.The defendant contends that the grant or continuation of the injunction is neither just nor convenient because it has the effect of destroying its business.  The defendant says that the nature of its business is such that it requires funds for the purpose of issuing letters of credit to pay its suppliers on a regular basis.  The injunction has already undermined the bank’s confidence of the defendant’s financial ability and led banks to withdraw banking facilities and refuse issuing letters of credit.  With the injunction in place, the defendant has been unable to pay its suppliers and in turn unable to make delivery to its buyers.  Additionally, it cannot sell its existing stock of raw materials or enter into new contracts.  The actual and potential financial loss to the defendant and the damage to its business reputation and goodwill is said to be extremely substantial.  It is estimated to be over US$7 million.     

44.The defendant has adduced evidence of some existing transactions with its suppliers and buyers, their demands for issue of letters of credit or for delivery of goods and also cancellation of contract on account of no letters of credit being opened.  I accept that the injunction has inconvenienced and adversely affected the defendant’s business.  I have however to balance the inconvenience and hardship to the defendant with the risk of dissipation and the need to protect the plaintiff’s interests.  The Mareva injunction is up to a limit of about US$ 6.5 million, which means the defendant may deal with assets above that limit.  The defendant has adduced no evidence on the nature and extent of its assets.  While its business turnover in the previous year was said to be over US$150 million, it is indicated in submissions that the only asset of the defendant is cash in bank in the amount of about US$3 million.  On the other hand, it is explained that the weekly expenses of US$500,000 permitted under the injunction can only meet the freight charges.  Even taking into account the defendant’s explanation that when paying its suppliers, it operates on the basis of back-to-back letters of credit, it is difficult to reconcile these assertions.  On the strength of the available evidence and information, I am not satisfied it has been shown that the continuation of the Mareva injunction will bring the defendant’s business operation to a halt and/or bring about devastating effects on the defendant that the balance of convenience lies in favour of discharging or not continuing the injunction.

Further fortification of the plaintiff’s undertaking

45.Having regard to the unsatisfactory nature of the evidence, I am not persuaded that a case has been made out for requiring the plaintiff to provide further fortification of its undertaking.

Conclusion

46.For the reasons stated above, the application to discharge the Mareva injunction is refused.  The Mareva Injunction granted on 5 March 2010 as varied by the order dated 12 March 2010 will be continued until further order of the court.  Subject to the continuation of the Mareva injunction and save that there is liberty to the parties to apply in connection with the Mareva injunction, I make an order under the defendant’s summons dated 12 March 2010 for a stay of the proceedings in this action.

47.Applying the rule of costs follow event, there is an order nisi that the defendant pays the plaintiff the costs of the ex parte application and the costs of the summonses dated 8 and 11 March 2010 to be taxed if not agreed.  As to the costs of the summons dated 12 March 2010, I make an order nisi that there is no order as to costs.

Ms Winnie Tam SC leading Mr Douglas T Y Lam and Miss Sabrina Ho instructed by Messrs Richards Butler for the plaintiff.

Mr John Yan SC leading Miss Sara Tong instructed by Messrs Alfred Lam, Keung & Ko for the defendant.