Joel Kai Thomas v. Tao Hsiao Shan, Alice

HCMP 209/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 209 OF 2011

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DECISION

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1.This is an application by the plaintiff (Joel) for leave to appeal against my decision made on 10 May 2013, discharging the Mareva injunction granted by myself on 21 December 2012 and dismissing Joel’s application to re-grant the injunction.

2.The facts of this case and my reasoning have been set out in the Decision dated 10 May 2013, and I do not want to repeat the same here.

3.There is no dispute about the principles to be considered by the court in determining whether to grant leave to appeal against an interlocutory order.  The applicant must be able to show either:

(i) the appeal has a reasonable prospect of success (i.e. more than “fanciful”, but not to the extent of being “probable”); or

(ii) there is some other reason in the interests of justice why the appeal should be heard.

4.As agreed by Ms Lam, counsel for Joel, the authorities referred to in the intended Notice of Appeal only support the proposition that without prejudice material is inadmissible and highly prejudicial and should not be placed before the court especially in ex parte application.  I do not dispute such proposition, and that was why Joel was perfectly justified in not referring to anything in the without prejudice meeting in the application in support of the ex parte application.

5.To me, the problem lies with the exchanges between the bench and counsel about the time when Madam Tao first disclosed to Joel that the 2 substantial sums of money had been transferred to her own personal account (“the First Disclosure Date”), or in other words, how long Madam Tao had concealed the whereabouts of such sums of money.  As Joel was trying to obtain a Mareva injunction nearly 5 years after the death of the deceased, I had made it clear to Ms Lam in the ex parte hearing that the First Disclosure Date was material for the court in determining whether there was any risk of dissipation of assets.  This can be clearly shown in the transcript itself.

6.I had emphasised more than once the importance of such answer, as I had warned Ms Lam that the answer provided by her might be used against Joel in a possible application to discharge the Mareva injunction.

7.By that time, I was not supposed to know that there were other communications between Joel and Madam Tao, and so we just focused on the disclosure by way of correspondence or affirmations.  But the concern of the court was more than clear, and one only needs to read the whole transcript to confirm such case.

8.Ms Lam asked for 5 minutes’ adjournment to confirm the matter.  After the adjournment, Ms Lam replied as follows:

“My Lords, to answer your Lordship’s question, there is no evidence or document filed by the defendant which is properly on the court file wherein she explains what happened to the sums after they were transferred into the Best Rate account.”

9.That might be a factually correct statement because the disclosure was not made by way of court documents.  Despite that, the answer must be a distorted statement.  As Joel’s legal representatives fully knew that the court was keen to know the First Disclosure Date, the only reasonable understanding from that answer was that Joel had just found out that the 2 substantial sums of money had been transferred to Madam Tao’s account.  That was a distorted if not a false statement.

10.With the greatest respect, what Ms Lam should have told the court is that, because of certain materials which should not be placed before the court, Joel cannot provide an answer to the question posed by the court, or something along that line.  It would then be up to the court to determine whether to pursue the question.  It might be the case that the court would not grant the injunction in the end, but Joel should not have taken the risk to obtain an injunction based on a distorted picture presented to the court.  I appreciate the difficulty facing Ms Lam at that time, but I am firmly of the view that the answer provided by her was a distorted statement in light of the earlier exchanges between counsel and the bench.

11.For myself, I do not think that anyone can possibly advance an argument that, because of the without prejudice rule, an applicant is entitled to present a distorted picture to the court in seeking an ex parte Mareva injunction.  No litigant, counsel or solicitor is entitled to mislead the court, especially on an ex parte application, by telling the court a state of affairs that he or she knows not to be true or misleading irrespective of how that knowledge has been obtained in the first place.  There is no one single authority which supports that a party can so mislead the court.

12.Further, it is not open to Ms Lam to argue that the First Disclosure Date is not a material fact.  I had clearly indicated so in the ex parte hearing.  If I had known that Madam Tao had made the disclosure earlier, I would not have granted the Mareva injunction in the first case.  In addition, this is a material fact because it would affect the risk of dissipation of assets.  Although the disclosure was made in a without prejudice meeting, there was always a risk that Joel might make use of the information in applying for relief from the court.  In fact, Joel had actually referred to some materials in the without prejudice meeting in the subsequent affirmation, and that was why Madam Tao made an application before Mr Recorder Jat to exclude those materials.  As Madam Tao had voluntarily disclosed such information to Joel, it seriously undermines Joel’s argument that Madam Tao had all along concealed the whereabouts of the 2 sums of money.  It also affects the court’s assessment as to whether Madam Tao is a person of low morality which justifies the granting of a Mareva injunction.

13.Finally, I sympathise the difficulty facing Ms Lam.  I fully accept that she did not mislead the court deliberately.  Exercising her professional judgment, she genuinely took the view that she was entitled to provide the aforesaid answer to the court.  To me, this was only a misjudgement on her part.

14.Based on the aforesaid, I take the view that the intended appeal is totally unarguable.  Neither is there any reason as to why the appeal should be heard in the interests of justice.  I therefore dismiss the plaintiff’s application with costs.

Mr Rachel Lam, instructed by Robertsons, for the plaintiff

Mr Paul Leung, instructed by Hampton, Winter & Glynn, for the defendant