GALLERIA RESOURCES LTD v. EFG BANK, HONG KONG BRANCH

HCMP1127/2009

   IN THE HIGH COURT OF THE

   HONG KONG SPECIAL ADMINISTRATIVE REGION

   COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1127 OF 2009

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BETWEEN

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J U D G M E N T

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1.   The plaintiff is a company incorporated in accordance with the Laws of Hong Kong with its registered office in British Virgin Islands. This is an application by the plaintiff for an interim mandatory injunction that the defendant, being a bank in Hong Kong, should comply with the instructions of the plaintiff to the bank given earlier for certain payments out from the plaintiff’s accounts with them.

2.   Those instructions were made by the plaintiff through e-mail on 8 June 2009. The next day the bank informed the plaintiff to contact one Detective Senior Inspector Mr R.J.C Harding of the Hong Kong Police. In the affirmation in support of the application for the plaintiff by one Mr Rafat Ali Rizvi., he said that therefore the plaintiff instructed a firm of solicitors, who now appears before me, to demand the bank for a formal explanation why their instructions were not carried out.

3.   I would have thought therefore the plaintiff should contact Mr Harding to find out why the bank did not comply with their instructions. I find it quite surprising that the plaintiff has no sense of curiosity at all, to say the least. Any account holder would wonder why he should contact a senior inspector of the Hong Kong Police when he was just asking the bank to make several transfers and payments.

4.   Be that as it may, the bank then wrote back promptly on the same day and say that the bank had advised the plaintiff to contact Mr Harding “for reason as to why he cannot access the funds”. The plaintiff’s deponent in support of this application, Mr Rizvi then went on to say :

“The Plaintiff is not aware that there is any police investigation against the Plaintiff in Hong Kong, nor has any attempts to be made by the Hong Kong Police to contact the Plaintiff. The Plaintiff also has not been served with, and is unaware of, any orders of this Honourable Court in any way restricting the funds in their said account. I therefore believe that the Bank has no valid reason to withhold the funds in the said account.”

To my mind, it amounted to say that I have closed my eyes and therefore I am not aware of any police investigation. The direction was given by the bank to its customer to contact a detective senior inspector and if the plaintiff had contacted the inspector, he would know what police investigation and what was the state of affair there and then in respect of his funds in the said account.

5.   Today Mr Douglas Lam for the plaintiff had boldly submitted to me that there is no legal obligation on the plaintiff to find out what was wrong with his lay client’s fund in the bank. I cannot accept that submission. The legal obligation is there to my mind. The bank refused to comply with an instruction of the client due to, obviously, intervention of the police. Mr Lam then submitted that the police would have to apply for the freezing of the funds. Without referring to the Police Ordinance I understand the police has the power under the Ordinance or other Ordinance in any event. Be that as it may, the refusal of the plaintiff to contact the police is quite alarming and, to say the least, when they were so desirous of getting the money out of the bank.

6.   Today Mr Zervos SC of the Department of Justice appears for the police before me and he is seeking a right of audience before me. But without troubling Mr Zervos I do not find it is necessary for me to decide whether he should have a right of audience before my decision on the plaintiff’s summons. The summons to my mind should be dismissed right away.

7.   The guiding principle of granting an interim mandatory injunction is that you have to have a case with a very high chance of success at the end of the day so that the court can be satisfied that after granting the mandatory injunction, it will not cause any irreversible damage to the defendant or anyone. I am afraid the plaintiff today has failed that test altogether.

8.   In respect of costs I think this is a clear case where the defendant is entitled to have costs paid forthwith even at the end of the day should the plaintiff succeed in the originating summons. They have not made out their case properly in order to satisfy me that an interim mandatory injunction should be granted. The emphasis is in the word “interim” because it is just for the time being and, for that reason, I think the defendant is entitled to costs to be paid forthwith. I will also order that taxation should be on the gross sum assessment basis before a Master because that will be much faster and cheaper.

9.   Having decided on the summons, I then decided that Mr Zervos has a right of audience. Mr Zervos then informed this Court that the plaintiff is now being investigated for money laundering and therefore the account is now frozen pending further police investigation. This has been done under section 25(1) of Organized and Serious Crimes Ordinance, Cap. 455. I then enquired whether Mr Harding is in Court to-day. Having ascertained that he is in Court throughout these proceedings, I then indicated to the plaintiff’s solicitors that if they and/or their client is interested to contact Mr Harding, they can do so right after this Court has adjourned.