BEIJING SONGXIANGHU ARCHITECTURAL DECORATION ENGINEERING CO., LTD v. KITTY KAM also known as WANG YUZHI

HCA 1289/2022

[2023] HKCFI 159

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

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BETWEEN

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DECISION

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1.  There is before the court Plaintiff’s Summons filed on 6 October 2022 for a Mareva Injunction against the Defendant (“Kam”) to restrain her from removing from Hong Kong any of her assets up to the value of HK$253,048,682 (being the aggregate of HK$220,548,682 (“Sum A”) and a further sum of HK$32,500,000 (“Sum B”)), together with a disclosure order.

2.  There is also a Summons filed on 14 December 2022 by Kam for a stay of these proceedings pending the final determination of an arbitration (“Arbitration”) between the Plaintiff and Sunshine Success Global Inc (“SSGI”), save and except the said Injunction Summons.

Issues

3.  For the Mareva application, Kam takes issue with (i) whether the Plaintiff has a good arguable case; (ii) there is no risk of dissipation; and (iii) the balance of convenience.

4.  In respect of the Stay application, Kam contends that (i) there are many common issues between the Arbitration and this action; (ii) staying the latter would avoid inconsistent findings and save judicial resources and costs; and (iii) she has offered to become a respondent in the Arbitration and be bound by the result.

Background

5.  The Plaintiff is a Mainland company. In its dealings with Kam, the Plaintiff was acting via Mr Wang Guiwu (“Wang”). Kam (whose former name was Wang Yu Zhi) is the daughter of Mr Wang Bin, who was the former Chairman of China Insurance (Group) Company. It is not controversial that Wang Bin was a well-known figure in the Mainland business circle.

6.  Sunshine Success International LP (“SSI”) is an exempted partnership registered in the Cayman Islands on 6 July 2018. Its registered office was located at the address of Maricorp Services Ltd (“Maricorp”) since its registration until February 2022 when Maricorp was replaced by Maples Corporate Services Ltd (“Maples”) as it registered agent.

7.  From February 2022 until at least 8 December 2022, SSI’s registered office was located at the address of Maples. Sometime after 8 December 2022, SSI’s registered office was (and is) located at the address of Tricor Services (Cayman Islands) Ltd.

8.  SSGI was incorporated on 5 July 2018 (1 day before SSI’s registration in the Cayman Islands) and has been SSI’s General Partner since its registration. By virtue of being the General Partner, SSGI has been in control of SSI. SSGI was (and is) a company owned and controlled by Kam.

9.  Kam has been SSGI’s sole director since its incorporation. Sunshine Success Global Ltd, a BVI company incorporated on 15 May 2018, is the sole shareholder of SSGI. Kam is in turn Sunshine Success Global Ltd’s sole shareholder and sole director (appointed on date of incorporation).

Investment

10.  On 1 November 2019, the Plaintiff, through an agent in Hong Kong (Kong Fung Trade Ltd), transferred Sum A into SSGI’s account held with Chiyu Banking Corp Ltd (“Account”) in accordance with the instructions of Kam. The Account was opened by Kam on about 27 July 2018. She was stated in the bank record as the ultimate owner and controller of SSGI, and is the sole signatory of the Account.

11.  Sum A was for investment as a limited partner of SSI which, Wang was allegedly told by Kam, will invest in new real estate projects, including London, Japan and Australia.

12.  I shall deal with the controversies between the parties in a little more detail below. However, Kam’s evidence is that in Autumn 2019 she told one Mr Zhi that she was “operating a Cayman investment fund through a partnership structure” and that “the fund intended to invest primarily in commercial properties, private equity and stocks…”. The Plaintiff accepts that Zhi was acting as a go-between at various stages, whereas Kam seems to say that Zhi was the true investor of Sum A and the Plaintiff was merely his nominee.

13.  On 13 November 2019, there was a transfer by SSGI under the authorization of Kam of HK$420.5 million, which included Sum A, from the Account to SSGI’s savings account. According to the bank records obtained by the Plaintiff by way of a Norwich Pharmacal Order, Sum A (mixed with other funds) might have gone back into the Account in tranches but all the money were swiftly transferred out. By 4 Jaunary 2022, there was no money left in the Account. Neither SSGI nor Kam has provided any evidence as to the current whereabouts of Sum A (or Sum B).

Agreements

14.  It is common ground that on 15 December 2019, Wang on behalf of the Plaintiff signed and appended the Plaintiff’s stamp on a Partnership Agreement (經修訂和重述的有限合夥協議) and a Subscription Agreement. They were both dated 1 August 2019. Kam only appended SSGI’s stamp on the Partnership Agreement but did not sign on it on behalf of SSGI at that time. SSGI’s solicitors only provided the signed Partnership Agreement to the Plaintiff on 27 June 2022.

15.  On 15 December 2019, Wang was also given by Kam a draft Letter Agreement, but that document was not signed by either party.

16.  The Partnership Agreement contained, inter alia, the following terms :

Recital A, “[SSGI] and the Initial Limited Partner … formed [SSI] … by executing the Exempted Limited Partnership Agreement of the Partnership dated 06.07.2018 (the “Initial Limited Partnership Agreement”) …”.

Recital B, “The Partners desire to enter into this Agreement to amend and restate the Initial Exempted Limited Partnership Agreement in its entirety to reflect, inter alia, the admission of the additional Persons into the Partnership as Limited Partners thereof and to clarify certain terms and provisions related to the Partners’ ownership and management of the Partnership”.

The definitions under Clause 1.1:

“‘Initial Limited Partner’” means Brilliant Investment Consultancy Limited, Deternal Management Co., Ltd, who was admitted to the Partnership to facilitate the filing of the registration and the formation of the Partnership prior to the Initial Closing Date”.

“‘Limited Partner’” means any Person executing this Agreement as a limited partner of the Partnership …”.

“‘Partner’” means any General Partner or Limited Partner.”

“‘Partnership’” means the limited partnership formed pursuant to this Agreement, as the said limited partnership may from time to time be constituted”.

Clause 1.2 (Formation and Continuation): “The Partners hereby agree to form [SSI] ... [SSGI] shall file all amendments to the information provided in respect of the Registration ...”.

Clause 1.4 (Purpose): “The primary purpose of the Partnership is to build long-term capital appreciation generally through acquiring, holding, managing and disposing of commercial real estate investments in London, Japan, and in Australia …”.

Clause 2.7 (Report): “The fiscal year of the Partnership shall be the calendar year. As promptly as possible after the close of the first full fiscal year of the Partnership ending on 31 December, and each fiscal year of the Partnership thereafter, the Limited Partners will receive from the Partnership an annual financial report prepared by [SSGI] in accordance with the accounting standard reasonably determined by [SSGI] within one hundred and twenty (120) days of the closing of the Partnership’s fiscal year …”.

Clause 3.5 (Register and Partnership Record): “[SSGI] shall maintain or cause to be maintained at the registered office of the Partnership or such other place as it shall determine in its sole discretion: (a) … the Register which shall contain the name and address of each Person who is a Limited Partner, the date on which a Person became a Limited Partner and the date on which a Person ceased to be a Limited Partner, which Register shall be open for inspection with [SSGI]’s consent; and (b) … a record of the amount and date of the Capital Contributions of each Limited Partner and the amount and date of any payment representing a return of the whole or any part of the Capital Contributions of any Limited Partner, which record shall be open to inspection with [SSGI]’s consent”.

Sum B

17.  On 20 February 2020, the Plaintiff (through Kong Fung) transferred Sum B into the bank account of Redstone Capital Holding Corp. (“Redstone Capital”) and the bank account of Wise Bravo Ltd (“Wise Bravo”).

18.  Kam disputes that Sum B was transferred to the two companies by the Plaintiff at her request. She said that she had no knowledge of the deposits, and denies that it had anything to do with SSI or the investment in question.

Plaintiff’s case of fraud

19.  It is the Plaintiff’s case that it has been defrauded by SSGI and Kam of both Sum A and Sum B.

20.  The Plaintiff transferred Sum A to SSGI in reliance upon the “First Oral Representations” made by Kam on behalf of herself and SSGI to Wang on behalf of the Plaintiff in around September or October 2019 at a meeting which took place in a hotel in Beijing attended by Wang, Kam, her parents (“Mr and Mrs Wang”) and Zhi as follows :

(1) The Plaintiff’s funds would be invested in newly developed real estate projects in, inter alia, London, Japan and Australia;

(2) The Plaintiff would acquire an interest as a limited partner in SSI;

(3) SSGI was the General Partner of SSI and Kam its manager responsible for managing SSI’s operations;

(4) Kam would provide information about the investment after the signing of relevant agreements.

21.  The Plaintiff also relied upon the First Oral Representations for the execution of the Partnership Agreement and the Subscription Agreement. The First Oral Representations were, the Plaintiff says, reflected in the terms of the Partnership Agreement as set out above.

22.  The Plaintiff transferred Sum B into the accounts of Redstone Capital and Wise Bravo in reliance upon the “Second Oral Representations” made by Kam (acting through Mr and Mrs Wang) to Wang on behalf of the Plaintiff (through Zhi) as follows :

(1) Kam was in need of funds to repay her personal debts overseas, and asked the Plaintiff to provide the funds to her;

(2) Kam would treat the funds provided to her as the Plaintiff’s capital contribution for subscription of additional interest in SSI. She would procure SSGI and SSI to make the necessary arrangements to increase the Plaintiff’s interest in SSI.

23.  Since early 2020, Wang tried to contact Kam over WeChat without success. Through Zhi, he repeatedly asked Mr and Mrs Wang to ask their daughter to provide the Plaintiff with the executed Partnership Agreement and Letter Agreement. Wang was assured (through Zhi) by the couple that there should not be any problem. However, the requested documents were not forthcoming.

24.  In around mid-February 2022, Wang managed to contact Kam through her new WeChat account. Wang informed her that as the Plaintiff had never received the executed Partnership Agreement and Letter Agreement, or information relating to SSI, the Plaintiff wished to withdraw from SSI and transfer its interest to a third-party buyer.

25.  Between February and March 2022, Wang made repeated requests to Kam for (a) the executed Partnership Agreement and Letter Agreement; (b) basic information about SSGI; and (c) the projects and value of SSI’s investments (“Requests”). Such information was needed by the Plaintiff to ascertain the status of its investment with Sums A and B, and to allow information to be provided to third party investors to whom the Plaintiff might dispose of the investment.

26.  However, Kam put up various excuses not to fulfil the Requests. For instance, she was looking for a Cayman lawyer to make the arrangement and she was overseas and needed more time.

27.  Given Kam’s response, the Plaintiff became concerned about its investment. On 20 April 2022, the Plaintiff’s solicitors (“PCW”) issued a letter (“20 April Letter”) to both SSI and SSGI setting out the Requests again, but no response was received by the deadline of 28 April 2022.

28.  On 13 May 2022, the Plaintiff obtained a Norwich Pharmacal order against Chiyu Bank in respect of the Account. The information revealed by the documents provided by Chiyu Bank to the Plaintiff on 14 June 2022 had been summarized in para 13 above.

29.  On 30 May 2022, SSGI’s solicitors (“DP”) wrote to PCW referring to 20 April Letter but without providing any substantive reply.

30.  By a letter of DP dated 13 June 2022 to PCW, it was stated that “… in 2019 your client invested in a 15-year Cayman fund … It follows, therefore, that there is no proper basis for your client to seek disclosure orders or otherwise. Your client’s investment is secure”. No particulars was given about the investment.

31.  In PCW’s reply to DP dated 22 June 2022, concerned was expressed that SSGI’s bare assertion that the Plaintiff’s investment was “secured” was insufficient, and SSGI as General Partner had failed to provide documents or information about the structure and business affairs of SSI to the Plaintiff.

32.  By DP’s letter dated 27 June 2022, SSGI repeated that the fund which the Plaintiff invested in was for a term of 15 years and enclosed an executed copy of the Partnership Agreement.

33.  On 9 September 2022, the Plaintiff obtained disclosure of the corporate records of SSI from Maples pursuant to a Court Order of the Cayman Islands (“Cayman Disclosure”).

34.  The Register of SSI obtained under Cayman Disclosure (“Register”), which was kept at Maples (SSGI’s then registered office) revealed that the Plaintiff was never a limited partner of SSI. The Register was certified by Maples on 16 August 2022. The only partners of SSI were SSGI, Deternal Management Co Ltd and Brilliant Investments Consultancy Ltd. According to Clause 1.1 of the Partnership Agreement, Brilliant Investments and Deternal Management were admitted as limited partners only for the purposes of registration and formation of the Partnership (see para 16 above).

35.  Based on the above, the Plaintiff says that it was defrauded by Kam and SSGI of Sum A and Sum B. It has never been a limited partner of SSI and there is no evidence at all that the Sums were applied to any investment. On 5 October 2022, these proceedings and the Injunction Summons were issued against Kam. On the same day, the Plaintiff issued an Originating Summons (“OS”) for a proprietary injunction to restrain SSGI from disposing of or dealing with the sum of HK$220,548,682 (representing Sum A) pending final determination of the Arbitration.

Evasive conduct of Kam/SSGI

36.  In this application, the Plaintiff also relies upon the following conducts of Kim and SSGI.

37.  Despite having full knowledge of these proceedings and the OS, Kam and SSGI refused to accept service of the proceedings on the basis that they were out of the jurisdiction. However, at the first hearing of the Injunction Summons and an application for interim order under the OS on 14 October 2022, Kam appeared by leading and junior counsel who were instructed by her new solicitors (“GD”) without accepting service of the proceedings. That hearing was adjourned to 4 November 2022 due to the issue of service of proceedings[1].

38.  The refusal to accept service left the Plaintiff with no alternative but to incur time and costs to apply for and obtained leave to serve out of jurisdiction together with leave to serve the proceedings on GD. On 3 November 2022, Kam and SSGI eventually accepted service via GD. However, their “gamesmanship” was met with strong disapproval of this court and indemnity costs orders were made to mark such disapproval: see Order dated 11 November 2022.

39.  In respect of the Arbitration[2], the Plaintiff filed its Notice of Arbitration on 10 October 2022. SSGI failed to file its Answer to the Notice of Arbitration by the initial deadline of 9 November 2022. Such Answer was only filed on 30 November 2022.

40.  On 17 November 2022, the Plaintiff duly paid its share of the initial deposit for arbitration fees. SSGI failed to pay its share of the fees by the initial deadline of 7 December 2022. By a letter dated 22 December 2022, the HKIAC noted such failure and asked for the outstanding fees to be paid by 5 January 2022. SSGI eventually paid its share of the fees on 5 January 2022.

41.  On 17 November 2022, the Plaintiff duly filed and served its Statement of Claim. On 14 December 2022, the day before the deadline for Kam to file her Defence, she took out the Stay Summons.

Kam’s case

42.  Kam says that the Plaintiff’s case of a defrauded investor is false. Instead, it is now regretting the investment and wishes to extricate itself from it before maturity.

43.  At a meeting in or around October 2019 at a hotel in Beijing, Zhi met with Kam and discussed about SSI. Zhi expressed his interest to invest in SSI. Kam was not made aware of the Plaintiff, or Wang, and considered that the principal was Zhi.

44.  After she learned from Wang on 15 December 2022 that the Plaintiff was in her words “the nominee investor in [SSI] for [Sum A]”, Kam caused the Plaintiff to be registered as a Limited Partner of SSI in January 2020 but back-dated to 1 November 2019, the date of transfer of Sum A to SSGI.

45.  On 15 December 2019, Kam provided Wang with drafts of the Partnership Agreement, Subscription Agreement and Letter Agreement via WeChat. The two discussed the terms of those documents terms on WeChat.

46.  Later that day, Wang met Kam at the Beijing hotel. This was the first time that they met. Wang’s case that he was at earlier meetings and had representations made directly to him are untrue.

47.  More than two years then passed without Zhi, Wang or the Plaintiff taking any issue with the Plaintiff’s investment in SSI. The Plaintiff’s suggestion that attempts were made to contact Kam is disputed. In 2022, Wang suddenly started taking issue with the Plaintiff’s investment and from March 2022, conversations between him and Kam continued in which, through various arguments, the Plaintiff sought to extricate itself from the investment.

48.  A redacted copy of that the Register was exhibited by Kam. It was said that the copy of the Register produced by Maples under Cayman Disclosure was clearly the original version at the time when SSI was set up in 2018, prior to the investment made by the Plaintiff.

49.  Kam says that she is completely unconnected with the transfer of Sum B, which was unknown to her or SSGI.

Analysis

50.  I have set out a fair amount of details of the factual evidence because the issues turn largely on the evaluation of the same.

Applicable principles

51.  The applicable legal principles are well-established over which there is no dispute. In respect of Mareva relief on inter parte basis, the Plaintiff must show that it has (a) a good arguable case on its substantive claims; (b) Kam has assets within the jurisdiction; (c) the balance of convenience is in favour of granting the injunction; and (d) there is a real risk of dissipation or removal of assets from the jurisdiction which would render the Plaintiff’s judgment of no effect: see China City Construction & Development Co., (HK) Ltd v 宁波佳合港湾股权投资合伙企业（有限合伙）[2020] HKCFI 1925 at [41]-[43], per DHCJ Dawes SC; Convoy Collateral Ltd v Cho Kwai Chee [2020] HKCA 537 at [35]-[54] and [77]-[78] per Lam VP (as he then was); Re Chau Cham Wong Patrick (a bankrupt) [2016] 2 HKLRD 278 at [33]-[34] per P Ng J.

52.  To render a Mareva injunction effective, the court has the discretion to order the defendant to make a statement of his assets and to give discovery of documents for the purpose of ascertaining the existence, nature and location of assets: see A v C (No 1) [1981] 1 QB 956 at 959E-961.

Good arguable case

53.  A good arguable case is simply a case which is more than barely capable of serious argument, and not necessarily one which has a better than 50% chance of success (see China City Construction, supra, [42]). It is not a very onerous burden.

54.  Plainly, it is not possible to resolve the factual conflicts on paper. However, the court must take a view on whether a good arguable case has been made out by the Plaintiff based on the evidence before it. The uncontroversial evidence will be important. The assessment should be guided by inherent probabilities and sound common sense.

55.  Both sides had referred to the WeChat exchanges between Wong and Kam, some of which may be regarded as objective and/or incontrovertible. Before dealing with some of them, I shall point out the unusual features of Kam’s case.

56.  On the evidence, Kam seems to be the only person acting on behalf of SSI or SSGI, despite the fact that the former purported to be a multi-million dollar investment vehicle managed by the latter. SSI’s registered address is that of a service provider. There is no sign that either entity has any staff, which is the suggestion derived from Kam’s WeChat messages, eg, she had to handle herself the simple task of providing a copy of the executed Agreements to the Plaintiff.

57.  More importantly, it is striking that neither Kam nor SSGI had behaved in a manner consistent with a normal and honest investment provider. Why would they refuse to provide a fully executed copy of the Partnership Agreement to the Plaintiff as soon as practicable after having received a huge sum from it? Why would they refuse to tell the Plaintiff what its money was invested in if the money was not misused? To say, vaguely, that the money was invested in a 15-year Cayman fund is not an answer expected of a normal or honest investment provider.

58.  It is common ground that neither the Partnership Agreement nor the Subscription Agreement stated that the Plaintiff’s money was to be invested in a 15-year Cayman fund. If the “fund” meant SSI, why was it not so stated by Kam’s lawyers? If it was some other legitimate fund, why was that not explained? That vague reference was premised solely upon Kam’s say so without a shred of evidence or any explanation.

59.  Ms Ho, who appeared for the Plaintiff, had made a powerful point that if the Plaintiff’s money was legitimately invested, Kam and SSGI would have been most forthcoming to dispel any misunderstanding or suspicion on the Plaintiff’s part that it has been cheated. All that needed to be shown to the Plaintiff would be the Register and some information on where the money was invested and that the investment was still held.

60.  Indeed, the point can be taken further. If the information suggested by Ms Ho were provided, it would be complete answer to this application. The would be no need for Kam to incur huge costs in defending these proceedings.

61.  In my view, these usual features must be taken into account in assessing the Plaintiff’s substantive claims, and they are indeed telling.

62.  I find the proposition that the Plaintiff was Zhi’s nominee somewhat ambiguous. Does it mean that the Plaintiff was holding the Investment on trust for Zhi? There is no reason not to, at least for the present purposes, accept the Plaintiff’s evidence that Zhi was merely acting as the go-between, in particular, vis-à-vis the Plaintiff and Mr and Mrs Wang who were acting on behalf of Kam. In any case, on Kam’s case, the Register she produced recorded the Plaintiff as a Limited Partner in respect of Sum A. Mr Manzoni SC, who appeared for Kam, accepted that Kam is not challenging the Plaintiff’s entitlement to sue in these proceedings.

63.  Whether Wang had met with Kam prior to the payment of Sum A is an important controversy because unless he did there was no basis for the Plaintiff’s case that the money was paid based on the First Oral Representations. In my view, the Plaintiff has made out a good arguable case in this regard based on inherent probabilities.

64.  It is inherently improbable for the Plaintiff not to have met and discuss with the provider for an investment of HK$220 million. On the other hand, Kam’s evidence that she did not meet Wang prior to 15 December 2019 was only supported by her own assertion in a long WeChat message. I am unable to accept that it was a piece of contemporaneous evidence in Kam’s favour. That long message was in the nature of a ranting reply by Kam to one of Wang in which he threatened to pursue, inter alia, a criminal complaint against her for fraud in the Mainland.

65.  In respect of the internal transfer of HK$420.5 million (see para 14 above), I agree with Mr Manzoni that it did not reflect any wrongdoing. However, what is alarming is that it appears that all the money had gone out of the only identified account of SSGI, and Kam and SSGI (under her control) have steadfastly refused to tell the Plaintiff anything about what had happened to its money.

66.  As regards the Register belatedly produced by Kam, I share the scepticism of the Plaintiff on its veracity. Kam’s assertion that the copy of the Register produced by Maples under Cayman Disclosure was out-of-date does not detract from the strength of the Plaintiff’s case :

(1) The copy Maples produced was a certified true copy of the original Register. Why would there be 2 originals, if the one produced by Kam is genuine?

(2) Maples had confirmed that its Register (dated 16 August 2022) was the latest version in its possession at the time when the disclosure was made, and no later version has been provided to it. Further, Maples was not aware of any update to the Register. If Kam had updated the Register as she alleged, why did she not inform Maples?

(3) Kam’s assertion that she had informed Maples that she was keeping the original Register sat poorly with the above. Had it been told, one would not expect Maples to simply produce a certified true copy of the original Register but inform the Plaintiff’s lawyers that there was another original Register not in its possession.

(4) Further, there is no record in SSI’s corporate documents that the Register was kept anywhere other than its registered office. As a matter of Cayman law, if a limited partnership’s register is kept in a place other than its registered office, a record of the address of that other place must be maintained at the registered office by the general partner.

(5) Kam’s evidence that she updated the Register in January 2020 was not properly explained and it sat poorly with her other assertion that she knew that the Plaintiff was the “nominee investor” on 15 December 2019[3]. Why did she not update the Register soon after Wong signed the Agreements with Sum A already paid?

67.  I am unable to accept Mr Manzoni’s arguments that Kam had no obligation in her personal capacity to identify what had happened to the Plaintiff’s money and SSGI’s obligation to do so is contractual and any breach should be determined by arbitration. It would be putting one’s head in the sand not to recognise that SSI was (and is) under the control of SSGI as the General Partner. In turn, SSGI was (and is) under the ownership and control of Kam. If there was a fraud on the Plaintiff, the fruits of the crime would go to Kam. In any case, these arguments do not address the Plaintiff’s case of fraud.

68.  For completeness, I am unable to accept Kam’s allegation that the Plaintiff did not contact her (or attempted to do so) after signing the Agreements on 15 December 2019 until early 2022. Common sense dictates that after having made a HK$200 million investment and without even getting a fully executed Agreement, the Plaintiff would have been anxious to find out what had happened to its investment.

69.  Wang’s evidence was that he was unable to contact Kam since early 2020. He then communicated with Mr and Mrs Wong (through Zhi) who assured him that there was no problem. Having considered Mr Wong’s reputation and influence in the Mainland, he did not think that Kam and/or SSGI were cheating the Plaintiff. He eventually managed to get in touch with Kam in mid-February 2022. Some of the communications between Wong and Kam can be seen from the WeChat messages. In particular, they evidenced Wong’s attempts to press for the Agreements and information about the investment, and Kam’s excuses. I believe that Wang’s evidence is credible.

70.  In respect of Sum B, I take into account Mr Manzoni’s criticisms that the Plaintiff’s case was based on the communications between Zhi and Mr and Mrs Wang. On the other hand, they constituted no legal inhibition to the Plaintiff’s claims. Rather, it’s a matter of weight of the evidence. I note from Kam’s WeChat messages that she did not take issue with Wang that her parents spoke for her.

71.  The most compelling piece of evidence that Sum B was paid at the request of Kam may be the payments themselves. It was a significant amount of money which the Plaintiff would not have paid unless there was a good reason for doing so. Further, as submitted by Ms Ho, the Plaintiff’s case is supported by some WeChat exchanges between Wang and Kam in which Wang referred to payments made to account provided by Mr and Mrs Wang for the repayment of Kam’s debt(s)[4]. There was no objection expressed by Kam which no doubt would have been forcefully made if what Wang said was untrue.

72.  As to Mr Manzoni’s submission that the Plaintiff had engineered a case of fraud to get out of an unwanted investment, Wang’s evidence was that the Plaintiff wanted to dispose of the investment because it was stonewalled by Kam on its requests for Agreements and information. I find the explanation reasonable and credible. Indeed, it was the most natural thing for an investor to do faced with such situation.

73.  I also reject the suggestion that Plaintiff had changed its case or that it is guilty of delay in making this application. I agree with Ms Ho that the evidence suggested that the Plaintiff acted properly in making necessary enquiries, eg, getting the Cayman Disclosure, before advancing a case of fraud against Kam.

74.  In the premises, I am quite satisfied that there is a good arguable of fraud by Kam.

Balance of convenience and risk of dissipation

75.  Once a case of fraud has been made out, the resolution of these issues is straightforward.

76.  The Plaintiff has been cheated a large sum of money. The current whereabouts of the money is unknown. Only one valuable property of Kam has been identified, a landed property in Hong Kong worth about HK$40 million. The balance of convenience is clearly in favour of granting the Injunction.

77.  As for dissipation of assets, it is trite that fraud should be taken into account by the court. I am satisfied that the Plaintiff has made out a good case to infer such risk. Kam’s stance in stonewalling the Plaintiff is, in the circumstances, a good pointer in this regard. I have taken into account that Kam has not disposed of her Hong Kong property. On the other hand, its value is only about 20% of Sum A. Properties are not liquid assets and the current market is not in favour of vendors.

Stay

78.  I have been reminded of the principles stated in Geng Feng v AI International Technology Ltd [2021] HKCFI 2701 at [18].

79.  I decline to exercise my discretion to order a stay. It is not disputed that the Plaintiff had commenced these proceedings as of right. Such right should not be deprived without strong reason.

80.  Although I accept that there is much overlap between these proceedings and the Arbitration and the advantages of having the dispute resolved by one tribunal, the evidence shows that SSGI (under Kam’s instructions) has been dragging its feet in the Arbitration. No arbitrator has yet been appointed because the parties cannot agree on whether there should be a single or a panel of 3 arbitrators. Plainly, a determined party can cause considerable delay in the resolution of an arbitration.

Disposition

81.  For these reasons, I grant the Mareva Injunction as per the draft order attached to the Summons with the following modifications: (a) under para 3, 48 hours should be allowed; (b) under para 17, costs be paid by Kam; (c) under Schedule 2, para 2, fortification should be in the sum of HK$3 million.

82.  In addition, I take the view that Kam’s disclosure obligations under the Injunction should be expanded to include Sum A, Sum B and their present equivalents. This is justified because SSGI, who received Sum A, was (and is) basically Kam’s alter ego, and Sum B was paid at Kam’s request. A perfected draft of the Injunction should be submitted to the court for approval as soon as practicable.

83.  I take the view that the costs of and occasioned by the Injunction Summons should be paid by Kam because it had been fully contested.

84.  The Stay Summons is dismissed with costs to the Plaintiff.

85.  All costs orders are made on nisi basis.

86.  Last but not least, I am grateful to counsel for their assistance.