Islamic Republic of Iran Shipping Lines v. Phiniqia International Shipping Llc and Others

HCMP 2034/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 2034OF 2014

(ON AN INTENDED APPEAL FROM HCA NO. 2368 of 2012)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.This is an application for leave to appeal against the decision of Deputy High Court Judge Simon Leung on 21 July 2014. By that decision, the learned judge discharged a Mareva injunction granted in favour of the Plaintiff. The judge did so primarily for the reason that he was not satisfied that there was any risk of dissipation of assets by the Defendants. He was also not satisfied that there is a good arguable case of conspiracy against the 5^th and 6^th Defendants though he found there is a good arguable case of breach of duty of care by them.

2.This decision is interlocutory in nature.  The 1^st Defendant applied for leave to appeal against that decision.  The judge refused leave on 1 August 2014.  Reasons for his refusal of leave were handed down on 1 August 2014.  The Plaintiff now seeks leave to appeal from this court.

3.The history of the matter was adequately set out in the judgment of the judge on 21 July 2014.  The discharge of the injunction was an exercise of discretion.  This court will only interfere with an exercise of discretion in the limited circumstances set out by Lord Diplock in Hadmor Productions Ltd v Hamilton [1983] 1 AC 191 at p.220B-F, see also the recent judgment of the Court of Final Appeal in SPH v SA [2014] 3 HKLRD 497 at para 65.    

4.The judge has carefully explained in his judgment why he was not satisfied with the risk of dissipation.  Contrary to what is suggested by Mr Sussex SC (representing the Plaintiff in this application with Mr Yu), a fair reading of the judgment shows that the judge did not simply discharge the injunction on the ground of delay.  It is delay coupled with the knowledge of legal action (in the form of the English action) by the Plaintiff (and thus the opportunity to remove assets) on the part of the 4^th Defendant during the relevant long lapse of time that the judge took into account.  The judge did have regard to the imputation cast against the 4^th Defendant by reason of his holding that there is a good arguable case on conspiracy and the allegation that he held the shares of DBL for the 1^st or 2^nd Defendants.  In the end, having regard to all these matters, he concluded that the Plaintiff had not made out a case of risk of dissipation of assets. 

5.As the judge succinctly pointed out in his Decision of 1 August 2014 when he refused leave to appeal, in essence what the Plaintiff tried to argue in the intended appeal is to challenge the assessment of risk of dissipation by the judge.  We are of the view that on the materials before him, it is open to the judge to come to the conclusion that the risk of dissipation had not been made out. 

6.On the argument that the judge erred in finding that there is no good arguable case on conspiracy against the 5^th and 6^th Defendants, again it is a challenge to the assessment of the evidence by the judge.  The reasons given by the judge at paras 62 to 65 of the judgment highlighted the evidential gap in the conspiracy case against these defendants.  The judge was also correct in holding that in such circumstances, the Plaintiff has not established the requisite risk of dissipation against the 5^th and 6^th Defendants.

7.On the whole, we also do not discern any errors in principle in the exercise of the discretion by the judge.

8.For these reasons we do not think the intended appeal has any reasonable prospect of success.  We refuse to grant leave.

9.We are of the view that the application for leave is totally without merit and we make an order pursuant to Order 59 rule 2A(8) of the Rules of High Court that no party may request this determination to be reconsidered at an oral hearing inter partes.

10.We also order the Plaintiff to pay the costs of the 4^th to 6^th Defendants in the present proceedings.  We provisionally fix such costs at $30,000.  Parties may put in written submissions (not more than 3 pages) within 7 days if they disagree with that provisional assessment.  In that event, we would deal with those submissions on paper.

Written submissions by Mr Charles Sussex, SC and Mr Jason Yu, instructed by Smyth & Co, for the plaintiff

Written submissions by Mr Anthony Chan, instructed by Holman Fenwick Willan, for the 4^th to 6^thdefendants