BALTRAY HK LTD. v. TZU SHIH SHIH AND ANOTHER

HCA 254/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST ISNTANCE

CIVIL ACTION NO. 254 OF 2002

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REASONS FOR DECISION

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1. On 10 July 2002, I continued a mareva injunction that had been granted by Chu J on 21 January 2002 (and which had been continued by Sakhrani J on 1 February 2002). The mareva injunction that I granted was without a stated limit. Part of the Order against both defendants was a discovery order under which the defendants were ordered within 21 days and by affidavit evidence, to disclose assets both inside and outside Hong Kong. In the Schedule of bank accounts under the Order, there was identified a Powervantage account at the Hongkong and Shanghai Banking Corporation numbered 495-483927-833 ("the Powervantage Account").

2. By a joint affirmation dated 19 July 2002, the defendants purported to disclose their worldwide assets. The plaintiff was not satisfied with this affirmation. Nor am I. Apart from anything else, no attempt was made to disclose the whereabouts or products or destination of the sum of US$2.3 million that had been deposited in the Powervantage account in or about November or December 2001. In the 3rd affirmation of the 1st defendant dated 3 September 2002, the 1st defendant merely deposes to the closing of that account.

3. Meanwhile, the defendants sought by various summonses to vary the 10 July 2002 order so that they could make use of what assets they had disclosed to meet their legal and personal expenses.

4. The first of such summonses was dated 22 July 2002. On 6 August 2002, I dismissed that summons on the basis that the defendants had failed to be full and frank about the extent of their assets. I took the view that before the court could exercise its discretion to allow the defendants to utilise certain assets, the full extent of the defendants' assets had to be known. The essential problem was this: where the court was not satisfied that the defendants had made full disclosure of their assets, it would be unfair to allow them to utilise the known assets for legal and personal expenses when there may well be other assets (undisclosed) which could be used for this purpose. The danger from the plaintiff's point of view is that the defendants will use up the known assets (which are not extensive) and yet conceal other assets.

5. I made known to the defendants' counsel at the 6 August 2002 hearing that if the defendants were to succeed on any application to vary, they had to serve further evidence.

6. By a summons dated 4 September 2002, the defendants again applied to vary the 10 July 2002 order and for the same purpose, namely to meet their legal and personal expenses. I have already referred to the 3rd affirmation of the 1st defendant dated 3 September 2002, which was served in support of this summons.

7. On 12 September 2002, I indicated to the defendants' counsel that the state of the evidence on this point was again far from satisfactory. Not only was there an absence of any explanation for the US$2.3 million that had been in the Powervantage account, the magnitude of the defendants' personal expenditure (NTW$684,780.00) was such that it would appear that the defendants must possess greater assets than they had hitherto revealed. I therefore adjourned the hearing of 4 September 2002 summons, giving leave to the defendants to serve further evidence. In particular, I was anxious to allow the defendants yet another opportunity to disclose the full extent of their assets, an obligation that had been in existence at least from the time of the 10 July 2002 order.

8. No evidence was filed by the defendants in compliance with this deadline. By a summons dated 29 October 2002, the defendants sought an unless order to the effect that unless the defendants served and filed evidence to disclose the full extent of their assets within seven days, the defence and counterclaim was to be struck out and judgment entered against them in terms of the relief sought in the Amended Statement of Claim.

9. On 14 November 2002, the defendants again applied to vary the 10 July 2002 order again for the purpose of allowing them to utilise moneys from their disclosed assets. By now, the defendants were acting in person.

10. At the hearing of the three summonses on 20 November 2002, I once again adjourned the matter to give the defendants yet another chance to serve affidavit evidence. The time limit for this was 21 days.

11. This time limit was later extended to 24 December 2002, following a request from the defendants by a letter dated 6 December 2002. The defendants had apparently applied for legal aid since the last hearing.

12. By another letter dated 27 December 2002, the defendant requested that the proceedings be "slowed down", presumably because of his legal aid application. No explanation however was given as to why the defendants had not served any affidavit evidence. By letter dated 6 January 2003 from the court, the parties were informed that the hearing fixed for 15 January 2003, would proceed. Legal aid was refused on 8 January 2003.

13. Mr Chua Guan Hock appeared for the plaintiff at the hearing on 14 January 2003. The 1st defendant was absent (I was told that he had misplaced his passport) but the 2nd defendant was present instead.

14. Before the hearing commenced, the 2nd defendant produced a letter jointly signed by her and the 1st defendant in which a number of matters are raised. There are some references there to the Powervantage account and the said sum of US$2.3 million.

15. The 2nd defendant sought relief in terms of the defendants' two summonses. I expressed some concern over the conduct of the matter on the part of both defendants and how unsatisfactory I thought their approach had hitherto been. Much was made of the fact that the defendants are unrepresented and I can sympathise with that. However, in approaching these three summonses before me, I must bear in mind not only the defendants' position, but also the plaintiff's. The plaintiff has suffered a history of delay and has been forced to endure a number of adjournments of hearings before this court. The hearing on 14 January 2003 represented the fourth hearing in which the defendants have sought to vary the 10 July 2002 order. The defendants' summonses cannot still be resolved owing to the defendants' failure to come up with satisfactory evidence in relation their assets. Only when they have done so will the court be in any position to deal with their summonses.

16. As to the plaintiff's summons, I agree with Mr Chua that there has been a history of default on the defendants' part to comply with the discovery obligations contained in the 10 July 2002 order. The facts I have referred to above demonstrate this. Not only that, the following matters are also not to be ignored:-

17. In these circumstances, at the conclusion of the hearing, I made an unless order to the effect that unless the defendants file and serve affidavit or affirmation evidence in relation to their assets (dealing with those specific matters that were explained to the 2nd defendant at the hearing and which she stated she understood), by 5.00 p.m. on7 February 2003, the Defence and Counterclaim would be struck out and judgment entered against the defendants in the sum of HK$9,065,896.52 with interest, as claimed in the Amended Statement of Claim. Costs were ordered against the defendants on an indemnity basis.

18. I also adjourned the defendants' two summonses pending the filing and service of the affidavit evidence I have just referred to.

19. At the conclusion of the hearing, I expressly told the 2nd defendant that the court was giving her and her husband a final chance. As Mr Chua says, there comes a point when enough is enough.