Well Joint Trading Ltd v. Chiu Chung Chiu and Others

HCA 1768/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1768 OF 2011

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BETWEEN

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Before: Deputy High Court Judge Burrell in Chambers

Date of Hearing: 1 March 2012

Date of Decision: 7 March 2012

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D E C I S I O N

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1.This is an application by the 1^st and 2^nd defendants for leave to appeal against an order of this court made on 13 February 2012 by which an ex parte injunction, made on 9 October 2011, was continued after an inter partes hearing, until conclusion of the trial or further order.

2.Being an interlocutory order leave is required pursuant to section 14AA of the High Court Ordinance (Cap 4).  The applicant must satisfy this court that the appeal has a reasonable prospect of success or that there is some other reason in the interest of justice why the appeal should be heard.  It is recognized to be a high threshold.  Le Pichon JA in SMSE v KL [2002] 4 HKLRD 125 stated that leave to appeal in interlocutory matters “was not lightly granted.”

3.In this application only the first test, namely “a reasonable prospect of success” is relied on.

4.Mr Michael Chai, counsel for the applicants, accepts that the court’s reasons for either granting or refusing leave should be only briefly stated.  It would be unwise and inappropriate to embark on a detailed analysis of the applicant’s grounds of appeal which ultimately will be, if the matter proceeds, the task of the higher court.

5.I will refer briefly to each of the seven grounds of appeal.

Ground 1

“The learned Judge failed to take into account the Plaintiff’s failure to make full and frank disclosure at the ex parte application, and/or the Plaintiff’s inequitable conduct at the ex parte and inter partes stage, in making a mis-statement, failing to refer to the Court the inaccuracy in the statement, and/or failing to refer to the Court the irregular features in the statement, that Centaline Property Agency had advertised and published flyer for the sale of Flat E, 20^th Floor, Tower 4, Metro City, Phase II, No.8 Yan King Road, Tseung Kwan O, New Territories.”

6.This is a complaint that the injunction should not have been continued because of lack of full and frank disclosure at the ex parte stage.  The facts surrounding the particular issue (namely, whether or not a particular properly had been advertised for sale which was relevant to the issue of the risk of assets being dissipated) were in dispute. Mr Norman Nip, counsel for the plaintiff, pointed out that the so-called “mix-up” by the property agents was not known to the plaintiff at the time of the ex parte application.  Whether or not it was known at the time is a matter of dispute.  In any event, at the highest it was a disputed fact which was of minor relevance when placed alongside other matters relevant to the issue of risk of dissipation against which there is no appeal.

Ground 2

“The learned Judge failed to take into account the evidence that the 2^nd Defendant did not understand sufficiently or at all the purported agreement of 6 June 2011.”

7.The “agreement” of 6 June 2011 is a central plank in the plaintiff’s case.  Ground 2 relates only to the 2^nd defendant’s complaint that it should not be held against him.  The 1^st defendant makes no such complaint.

8.The question to be addressed is as follows.  Are the 2^nd defendant’s prospects of persuading the Court of Appeal that the injunction should not have been continued because of his (disputed) claim that he did not understand the written agreement that he signed, reasonable?  I do not think that they are.  Whether or not he ultimately persuades the trial judge of that contention is another matter.

Ground 3

“The learned Judge found that there was a serious issue to be tried in respect of the plaintiff’s claim against the 1^st and 2^nd Defendant in relation to the 3,500MT of steel bars based on inference when there was no sufficient evidence or at all in support of the inference to be drawn.”

9.The “facts” that were taken into account when deciding to continue the injunction were that the 3,500MT of steel was delivered to the plaintiff in Hong Kong when the defendants were running the plaintiff’s operations and that since then the steel has disappeared.  The defendants have also, by the 6 June 2011 agreement, promised to locate the missing steel.

10.I am not persuaded that this should have been ignored when considering the overall factual matrix relevant to the question of whether or not the plaintiff had a good arguable case.  The same applies to ground 4.

Ground 4

“The learned Judge took into account the previous conviction of the 2^nd Defendant in 1995, which is a matter irrelevant to issue.”

11.At the inter partes hearing this fact was not challenged and neither was it argued that it should be ignored on the grounds of relevance.  Looking at the overall picture it is ultimately a question of weight.  The weight in this instance may well be small.

Grounds 5, 6 and 7

“5. The learned Judge failed to take into account the Plaintiff’s failure to make full and frank disclosure at the ex parte application in nor informing the Court that its assets were minimal.

6. The learned Judge failed to take into account the Plaintiff’s case and evidence that it had encountered difficulties in enforcing the $15 million receivables and that it had not made any recovery in relation to it.

7. The learned Judge was wrong in making the Order in all circumstances.”

12.The remaining grounds may be taken together.  Grounds 6 and 7 were dealt with in the written decision.  The complaint seems to be no more than that the court did not agree with the defendant’s submissions concerning them.  Ground 7 adds nothing.

13.In conclusion Mr Nip added, with some force, that a number of reasons given for the continuation of the injunction have not been addressed in the grounds of appeal and it therefore follows that many of the more compelling reasons for granting the injunction are not the subject matter of complaint.

14.In all the circumstances leave to appeal is refused.  The costs shall be to the plaintiff to be paid forthwith.

Mr Norman Nip, instructed by Keith Lam, Lau & Chan, for the plaintiff

Mr Michael Chai, instructed by Cham & Co., for the 1^st and 2^nd defendants

Please refer to HCMP498/2012 for the relevant appeal(s) to the Court of Appeal.