LEADER SCREWS MANUFACTURING CO LTD v. HUANG SHUNKUI

HCA 2067/2019

[2021] HKCFI 2041

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2067 OF 2019

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D E C I S I O N

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1.  The Court handed down judgment on 18 January 2021 in favour of the plaintiff company in default of defence (“the Judgment”). The defendant (“Madam Huang”) was ordered to pay an amount of over $14.6 million to the plaintiff with interest still accruing. The Court also ordered the pre-judgment Mareva injunction to continue for 6 months after judgment. On 7 May 2021, this Court dismissed Madam Huang’s attempt to set aside the Judgment and to vary the Mareva injunction, with an order for indemnity costs against her.

2.  On 8 June 2021, this Court heard an application by the Company for the appointment of receivers by way of equitable execution (“Receivership Application”).  Upon Madam Huang’s undertaking to sell the stocks and unit trusts in her accounts within 14 days and to pay the net proceeds to the Company (“the Undertaking”), this Court adjourned the Receivership Application.

3.  Madam Huang did not fulfil her Undertaking.  As the Mareva injunction is due to expire on 17 July 2021, the Company took out this summons to extend the Mareva injunction for 9 months.

4.  Madam Huang has lodged an unsworn statement in opposition and a set of submission.  With no disrespect, the contents of her unsworn statement and submission were totally unfocused and irrelevant.  She kept repeating her irrelevant stance of wishing to communicate with her former bosses of the Company and that she wanted the injunction imposed on her bank accounts to be uplifted.  It was quite clear that Madam Huang has not and could not put forward any valid ground in opposition.

5.  The Court does have power to extend a post-judgment Mareva injunction but such power should not be lightly exercised.  Absent any material change of circumstances, the primary concern of the Court is whether the judgment creditor has been diligent in taking out execution process necessary in the meantime and whether it is in the interests of justice to extend the validity of the Mareva injunction.

6.  In the present case, Company has been active in seeking enforcement of the Judgment ever since it was handed down.  By now, the Company has obtained a charging order absolute and a garnishee order absolute.  The Company has made the Receivership Application and applied for an order to examine Madam Huang as a judgment debtor.

7.  The enforcement process thus far has led to recoveries of at most $8 million (including the market value of the landed properties of Madam Huang).

8.  Madam Huang has never been cooperative in the enforcement process.  She paid nothing.  She has objected to the applications for the charging order, garnishee order and Receivership Application.  She has failed to make disclosure of her assets under the injunction.  She has flouted the Undertaking.  The Company is unable to lay their hands on the securities and unit trusts held in Madam Huang’s account without her cooperation.

9.  The Company has already taken steps to restore the Receivership Application for hearing.  The hearing for examination of judgment debtor that is yet to take place pending discovery by Huang.

10.  In her submissions, Madam Huang kept emphasizing that she wanted the injunction over the bank accounts to be uplifted so that she could use the money for her living expenses.  There is every risk that upon expiry of the Mareva injunction, Madam Huang will remove the monies, stocks and securities and unit trusts in the bank accounts to frustrate enforcement of the Judgment.

11.  In view of the matters in paragraphs 6-10 above, it is in the interests of justice to continue the Mareva injunction.  A period of 9 months should be sufficient protection to the Plaintiff’s interests pending resolution of the Receivership Application and examination of judgment debtor.  I make an order accordingly.

12.  I thank Mr Lau for his assistance.