China Metal Recycling (Holdings) Ltd (in Provisional Liquidation) and Another v. Chun Chi Wai and Others

HCA 1412/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1412 OF 2013

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D E C I S I O N

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Applications

1.I have before me two summonses, one issued by the 1^st and 13^th defendants on 1 December 2014 seeking leave to appeal against my earlier decision dated 17 November 2014 (“the decision”) granting an unless order against them and dismissing the 1^st defendant’s summons dated 24 June 2014 (“the Variation Summons”), and the other issued by the 1^st defendant also on 1 December 2014 seeking to vary the costs order nisi that I made in respect of the Variation Summons.

2.The background facts of this matter are set out in the decision and I shall not repeat them here.

Application for leave to appeal

3.Three grounds are relied upon by Mr Bernard Man (for the 1^st and 13^th defendants) in support of the application for leave to appeal.

4.First, it is said that there was no serious, contumelious or contumacious breach of the order of L Chan J made herein on 9 April 2014 (“the Chan Order”) by the 1^st and 13^th defendants.  In particular, it is argued that the 1^st and 13^th defendants were not required, under the Chan Order, to conduct any tracing exercise.  However, in finding that the 1^st and 13^th defendants had failed to fully or properly complied with the Chan Order, I did not do so by asking whether they had traced the monies referred to in paragraph 1(c) of that order.  Instead, I proceeded on the basis of what I considered to be the plain meaning and effect of the Chan Order, in particular the requirement on them to (i) provide a full explanation as to what had become of the monies and, in the event that any part of those monies had been used, spent or disposed of, providing full particulars of the circumstances in which the monies had been so used, spent or disposed of, and (ii) produce all documents which evidenced their explanation.  I also found it to be clear on the evidence that the 1^st and 13^th defendants had consciously decided not to fully and properly comply with the Chan Order.

5.Second, it is said that the Chan Order was insufficiently clear.  Mr Man argues that a point of principle is engaged here, namely, that where an order is not clear it would be wrong in principle to make an unless order for a failure to comply with the order, and relied on the decision of the English Court of Appeal in Raja v van Hoogstraten [2004] 2 All ER 793 in support of this proposition.  In the decision, I expressed the view that the Chan Order seemed to me to be reasonably clear and was well capable of being understood and complied with by the 1^st and 13^th defendants.  I remain of that view.  I should add that, in a case where a judge has reduced his reasons for making a decision into writing (as L Chan J did in this case), it would only be in a most exceptional case that recourse may be had to what passed between counsel and the judge in order to construe the order eventually made by the judge.  Further, I am given to understand that the 1^st and 13^th defendants have never sought to appeal against the Chan Order.

6.Ultimately, whether to make an unless order involves an exercise of discretion.

7.Third, it is said that the application to vary the injunction to allow for a loan should have been granted.  As explained in the decision, I considered that there was no basis, on any view of the matter, for me to vary the injunction. The 1^st defendant had in fact already obtained the loan of HK$5,000,000 from Wing On Finance Company Limited by the time that he took out the Variation Summons.  Thus, in relation to that loan, what the 1^st defendant was asking the court to do under his summons was not to vary the mareva injunction to enable the loan to be obtained and used to settle legal costs and disbursements incurred by the 1^st and 13^th defendants in these and other related legal proceedings, but to sanction, retrospectively, what the 1^st defendant had already done, or to provide confirmation or comfort that what he had done was not in breach of the injunction order.  I see no reason why the court should make such order.

8.The principles for granting leave to appeal are well established, and it is not necessary for me to recite them.  I do not consider that the 1^st and 13^th defendants have demonstrated that they have a reasonable prospect of success in the proposed appeal.

Application to vary costs order nisi

9.Costs are generally in the discretion of the court.  It is not suggested that I have acted contrary to any principle in ordering that there be no order as to the costs of the Variation Summons.  If the 1^st defendant’s argument regarding the effect of the injunction order is correct, the Variation Summons was unnecessary.  If his argument is incorrect, I would not have made any variation.  I am satisfied that the costs order that I made is fair in all the circumstances.

10.In conclusion, I dismiss the 1^st and 13^th defendants’ two summonses with costs to the plaintiffs.

Ms Eva Sit, instructed by Hogan Lovells, for the plaintiffs

Mr Bernard Man, instructed by Anthony Siu & Co, for the 1^st & 13^th defendants