Lo Mei Kin Stella v. Lo Mei Kin Stella

HCA 2682/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2682 OF 2008

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Before: Hon Saunders J in Chambers

Date of Ruling: 21 January 2011

Date of Reasons for Ruling: 18 February 2011

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REASONS FOR RULING

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1.On 21 January 2011, I made a ruling in respect of an interlocutory summons in this action, in which the defendant by original action in HCA 2682 of 2008 and the defendant in HCA 1609 of 2010, (“the defendant”), sought to have an application to set aside certain injunction orders heard earlier than the fixed date of 4 July 2011. The defendant now seeks reasons for that ruling.

2.These actions are being conducted at the same time as another action, HCA 1610 of 2010.  All three actions arise out of a dispute over the disposition of the estate of a deceased person.  The plaintiff by original action in HCA 2682 of 2008, (“the plaintiff”), is the deceased’s son, and the administrator of the estate.  The defendant says she was a companion to the deceased and relies upon a number of grounds to assert that various assets in the estate belong to her.  It is not in dispute that all three actions are based on the same factual matrix and that similar issues arise on the three actions.

3.On 27 October 2010, I made injunction orders in these actions restraining the defendant from disposing of certain assets that are subject of the dispute.

4.These actions have been set down for hearing 12 days, commencing on 30 August 2011, but with the application to set aside the interlocutory injunctions to be heard on 4 July 2011. 

5.By a summons dated 6 January 2011, the defendant sought an order that the hearing date for the application to set aside the interlocutory injunctions be brought forward, to be heard if necessary by another judge. 

6.Although the plaintiff had no objection to an earlier hearing date, the plaintiff sought, by summons dated 18 January 2011, that all three sets of proceedings should be heard together, commencing on 30 August 2011.

7.The defendant did not object to the order that the three actions should be heard together.  That was entirely sensible as the central evidential issues to be dealt with in each of the three actions are essentially identical.

8.In support of her summons to have the injunctions discharged, the defendant relied upon her 7th affidavit to contend that the assets have been frozen unreasonably and oppressively. 

9.The matters upon which she relied are all matters which will require to be ventilated at the trial.  To show that, it is sufficient to outline the headings under which the various matters were described in the 7th affidavit.  They are: Material Non-Disclosure; My Case on Merits; (the deceased’s) Use of His Companies; Why (the deceased’s) Assets are Now Mine; (the deceased’s) Assurances; Ventris Place Property: A Response to Allegations Against Me.

10.These are all matters which go to the very heart of the substantive proceedings.  They will form the central issues at the trial.

11.On 21 January 2011, when the matter came before me, I indicated to the parties representatives that, having read the skeletons that had been filed, I was not inclined to bring forward the hearing date for the application to set aside the injunction, but that I was able to extend the trial dates so that the application to set aside the interlocutory injunction could be heard at the same time as the trial.  That will result in a delay of about eight weeks in the application to set aside the injunctions being heard.

12.I asked Mr Kwong if he had anything to say about that proposition.  He said he was in my hands. 

13.Having regard to the fact that the matters upon which the defendant relies to have the interlocutory injunction set aside are all matters which require to be ventilated at the trial, as they are in dispute, it would not be at all sensible to attempt to conduct a separate trial, at an earlier date on those issues, simply for the purpose of considering an application to discharge interlocutory injunctions. 

14.Findings of credibility would inevitably need to be made which would impact on the trial.  Witnesses would be required to give evidence on two separate occasions.  Both of those factors militate strongly against any earlier hearing of the application to set aside the injunctions. The consequence of potentially contrary findings of credibility or the need for witnesses to give evidence on two separate occasions would be aggravated if I were to adopt the defendant’s suggestion that, in order to have the matter heard earlier, the application to set aside the injunction should be heard by another judge.

15.Nothing in the 7^th affidavit of the defendant demonstrated any serious prejudice to her by having the assets restrained.  It is not suggested that she is unable to meet her legal costs by virtue of the orders.  Notwithstanding the defendant’s assertions to the contrary, it is strongly arguable that were the interlocutory injunction orders set aside, there is a serious risk that the defendant would proceed to dispose of some or all of the assets.  That is a situation that could not be reversed, nor the plaintiff be adequately compensated in damages, should the plaintiff succeed in the action.

16.On the other hand any prejudice to the defendant by being held out of the assets until the trial is capable of being compensated by damages or interest, should she succeed in resisting the claims against her.  I note that the plaintiff has given the usual undertaking.

17.I appreciate that the course that I have taken will delay the consideration of the defendant’s application to discharge the injunctions.  That is unfortunate, but in the whole circumstances of this case it would be quite wrong to proceed to consider the discharge application separate to the trial of the substantive issues which are so interlinked with the issues on the question of the discharge.  In all the circumstances a delay of eight weeks is not unreasonable.

18.The defendant says that the action of banks upon receiving the Mareva order has been excessive.  If that is so, it is to the banks that she should look rather than the discharge of the injunctions, and if the action of the banks is excessive or oppressive, she should take appropriate steps against the banks.  If they have acted in excess of any order made then appropriate orders can be made to assist the defendant.  The banks would of course be entitled to be heard on any such application.

19.Accordingly, for these reasons I declined the application to bring forward the hearing date to discharge the interlocutory injunctions, allocated three additional days to the trial dates, and ordered that the three sets of proceedings, be heard at the same time, together with the application to set aside the interlocutory injunctions.  The scheduled hearing on 4 July 2011, must consequently be vacated.

20.I ordered that the costs of each of the applications before me be in the cause.

Mr Clifford Smith, SC & Mr Dennis Kwok, instructed by Messrs Norton Rose Hong Kong, for the Plaintiff (by original action) in HCA 2682/2008 and the Plaintiff in HCA 1609/2010

Mr Paul Kwong of Messrs Paul Kwong & Co., for the Defendant (by original action) in HCA 2682/2008 and the Defendant in HCA 1609/2010