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

HCMP 459/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 459 OF 2015

(ON AN INTENDED APPEAL FROM HCA NO. 1412 OF 2013)

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

1.On 17 November 2014, Chow J granted an unless order against the 1^st and 13^th Defendants in respect of the latters’ non-compliance with the order for disclosure made by L Chan J on 9 April 2014. The disclosure order was ancillary to the Mareva injunctions granted against the defendants. Chow J also refused these defendants’ application for the variation of the injunctions against the defendants.

2.These defendants’ application for leave to appeal against these orders of Chow J was refused by the learned judge on 12 February 2015.  They now apply to this court for leave to appeal.

3.Having read the written submissions of the parties and heard their counsel, we are of the view that the proposed appeal has no reasonable prospect of success.  We therefore refuse to grant leave.

4.The defendants wish to challenge the exercise of discretion by the judge.  Mr Mak relied on 2 broad grounds in the challenge regarding the making of the unless order.  Counsel submitted that the order of L Chan J was unclear and therefore even if there had been non-compliance by the defendants, they should not be faced with the sanction of an unless order.  Further, counsel submitted that the judge erred in holding that the breaches were serious enough to warrant the making of unless order.

5.With respect, we agree with the judge that the order of L Chan J was clear and the defendants had plainly failed to comply with the requirement to give “full explanation” and “full particulars of the circumstances” under paragraph 1(c) and to exhibit “all documents which evidence the matters” under paragraph 1(d) of that order.

6.As regards the seriousness of the breach, we are of the view that the judge was quite entitled to come to the conclusion that it is a case which warrants an unless order to be made in light of the history and the background of the matter, particularly those set out at paragraphs 51 to 54 of his judgment.  As the judge recorded at paragraph 51, there was no dispute before him that the court does have the power to grant unless order to ensure compliance with disclosure orders in aid of Mareva injunctions, citing JSC BTA Bank v Ablyazov [2013] 2 All ER 515.  See also CIBC Mellon Trust Co v Stolzenberg [2004] EWCA Civ 827; Lexi Holdings plc v Luqman [2007] EWCA Civ 1501; JSC BTA Bank v Ablyazov (No 3) [2010] EWHC 2219 (QB).  Before us, Mr Mak properly disavowed any intention to argue otherwise.  Nor do we regard Raja v Van Hoogstraten [2004] 2 All R 793 paragraph 112 and Marcan Shipping (London) v Kefalas [2007] 1 WLR 1864 paragraph 36 (cited in the written submissions of the defendants) as authorities deciding otherwise. 

7.In our view, the question boils down to whether the judge was correct in coming to the conclusion that an unless order should be made in the present circumstances in order to safeguard the interest of justice which the Mareva injunctions and the disclosure order sought to achieve.  On this question, we simply could not see any basis for contending that the judge was clearly wrong. 

8.As regards the variation, the judge agreed with the contention of the defendants that even without such variation the loans advanced by Wing On payable directly to the solicitors for the satisfaction of the defendants’ incurred legal expenses do not infringe the Mareva injunction.  There is no appeal against that decision by the Plaintiff.  In such circumstances, we simply cannot see any basis for the defendants to appeal against the refusal to grant the variation.

9.We dismiss the defendants’ summons of 26 February 2015 and we order the 1^st and 13^th Defendants to pay the costs of the Plaintiff on indemnity basis.  This court has repeatedly said that unmeritorious application for leave to challenge the exercise of discretion by a judge, especially after leave had been refused with a reasoned decision, should be visited with such consequence.

10.Having considered the statement of costs submitted on behalf of the Plaintiff and heard Mr Mak on behalf of the defendants, we fix the costs of the Plaintiff at $84,807.

Ms Eva Sit, instructed by Hogan Lovells, for the 1^st and 2^nd plaintiffs

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