HAN JAEJOON v. LEE SANG YOUNG

HCA 1484/2022

[2023] HKCFI 348

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1484 OF 2022

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D E C I S I O N

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1.  The is the first hearing of the summons filed by P on 9 January 2023 for continuation of the Injunction which he obtained on 16 December 2022 on an ex parte on notice basis. The matter come before me as the Summons Judge.

2.  The summons will have to be adjourned for substantive arguments. I will give directions on the further conduct of the same at a later stage.

3.  The issue that needs to be addressed at this stage is whether the Injunction should be continued pending the substantive hearing of the summons. P asks it to be. D says it should not be, principally on the basis of material non-disclosure, and that if it is to be continued, its effects should be confined domestically.

4.  As observed by Lam VP (as the PJ then was) in China Shanshui Cement Group Ltd v Zhang Caikui [2018] HKCA 409, in relation to an application for interim-interim relief, the court’s primary concern is to do practical justice on the balance of fairness.

5.  As also explained by Lam VP also in that case, whatever views formed at such hearing and whatever decisions made must be provisional, open for further arguments and revisiting in the future. This is particularly so in the present case, when the present summons was, due to what P says to be an oversight, filed only on 9 January 2023. A notice to act was only filed for D the day before this hearing. Mr Chong’s submissions were only received after 5 pm, and the supplemental bundle handed to court on the morning of the hearing.

6.  The court will nonetheless do the best this court can.

7.  When considering an application of this nature, and more so on an interim interim basis when the court hardly has the opportunity to consider the matter in much detail, the concern is to take whichever course appears to carry the lower risk of injustice if it should turn out that it is wrong.

8.  In the present case, the crux of the dispute relates to the ownership of 65% of the shares in JL Global Co Limited (“JL”).

9.  That claim is proprietary in nature.

10.  On the evidence, I am satisfied that a serious issue to be tried has been demonstrated.

11.  In my view, it is just and convenient to have those shares preserved.

12.  Mr Chong has pointed to some non-disclosure arising from the appeal judgment handed down by the Seoul High Court on 5 January 2023 (the “Korean Appeal Judgment”).

13.  To start with Mr Alder objects to this court referring to that judgment and to the WhatsApp messages referred to therein (included in the Supplemental Bundle).

14.  That judgment was handed down on 5 January 2023. P himself refers to it in his latest affidavit. But for reasons which have not been adequately explained, he has not produced that judgment.

15.  As I have mentioned above, the present summons was filed late, leaving D little time to respond.

16.  In the circumstances, I find it fair for me to refer to the judgment and to the messages, without prejudice to P subsequently if deemed necessary producing his own translated version. I mention also that Mr Lee, Mr Alder’s co-counsel for P, is a native Korean speaker.

17.  The Korean Appeal Judgment appears to focus upon the management of the Korean Subsidiary called DW Development Co Ltd (“DW”) and P’s status therein. The focus is less on the dispute of the 65% shares in JL.

18.  JL is a Hong Kong company. The preservation of its shares is squarely a matter within the jurisdiction of the Hong Kong Courts.

19.  Despite Mr Chong’s objections, I am of the view that on the American Cyanamid criteria, and on the balance of fairness, interim interim measures should be in place to preserve the shares.

20.  I accept Mr Alder’s submissions that if there is such need, it will make a mockery of the Injunction if its effect is to be confined domestically, thereby opening up the possibility of disposal, dealing in, parting with or encumbering of the shares by acts undertaken beyond the seas.

21.  Paragraphs 2 and 3 of the Injunction are however of different nature. They concern acts of holding out in relation to the ownership of the shares in JL, their voting rights, and may even interfere with the management and operation of DW.

22.  DW is a company in Korea. As can be seen from the Korean Appeal Judgment, the Korean Courts have seized upon the matter, and have granted an injunction against P in respect of inter alia acts “disposing of, altering, modifying, using or consuming [DW’s] assets or existing contractual or legal relationships.”

23.  Given the above, this court needs to exercise its jurisdiction in relation to the operation of DW in circumspection.

24.  There is indeed serious dispute between the parties as to P’s role in the DW[1]. Certain aspects of his conduct in that regard are subject of an injunction in Korea.

25.  Preserving the Shares in JL does not necessarily require this court to impose injunctive relief in relation to JL’s operation in Korea.

26.  On a balance of fairness basis, I am going to confine §§2 and 3 of the Injunction to conduct in Hong Kong, in the way as suggested by Mr Chong. I will also as suggested by Mr Chong take out §§3(4) to 3(6).

27.  In the absence of opposition, I order P to make fortification by a payment into court in the sum of HK$1,000,000 within 21 days.

28.  I continue the Injunction to the extent explained above till disposition of the summons, and will hear parties on its exact terms.

29.  Given the dispute, I am going to direct a tight timetable for filing evidence, and will direct early hearing date of the Summons.

30.  Costs reserved.