任俊國 v. CHIN CHOI MING

HCA 2017/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2017 OF 2017

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D E C I S I O N

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INTRODUCTION

1.  On 18 October 2017, the plaintiff (“Mr Yam”) took out an ex parte summons, returnable on 3 November 2017, seeking a “Mareva injunction/proprietary injunction” with an ancillary disclosure order against the defendant (“Mr Chin”).  At the ex parte hearing on 3 November 2017, Mr Wong informed the court that his client would no longer seek a Mareva injunction, but would maintain the application for a proprietary injunction in respect of the Vehicle and the Licence (more particularly described below) in the form of the draft order attached to the summons.

PLAINTIFF’S CASE

2.  Mr Yam’s application is supported by his affirmation filed on 18 October 2017.  His case against Mr Chin, so far as one can gather from that affirmation, can shortly be stated as follows.

3.  Mr Yam is a Chinese national and have substantial business dealings in Mainland China.  Mr Chin is a retired policeman residing in Hong Kong.

4.  The plaintiff’s daughter and Mr Chin’s son married in Hong Kong in September 2011. They have a son born on 19 March 2014.  According to Mr Yam, due to his daughter’s permanent residency in Hong Kong and later the birth of his grandson, he always spent 4 to 5 months every year in Hong Kong.

5.  On 26 March 2014 (shortly after the birth of his grandson), Mr Yam purchased a vehicle, a Toyota Alphard (“the Vehicle”), from Crown Motors Ltd in Hong Kong, and paid the purchase price of RMB661,743.72.  Mr Yam said that since he was a Mainlander who was not always in Hong Kong, he was not familiar with the local rules and regulations relating to vehicle registration, insurance and related matters, and Mr Chin offered to take care of the administration work in relation to the Vehicle on his behalf.  Accordingly, Mr Yam agreed to register the Vehicle in the name of Mr Chin.  Mr Wong said that Mr Yam’s purchase of the Vehicle was related to the birth of his grandson (presumably so that he could come to Hong Kong more conveniently to visit the grandson).  There is, however, no specific statement by Mr Yam in his affirmation to this effect.

6.  Anyhow, it can be seen, from the records kept by the Transport Department (Exhibit RJG-2), that the Vehicle (identified by its Engine Number and Chassis Number), with registration mark AY1908, was registered in the name of Mr Chin as at 12 January 2017.   The date of first registration of the Vehicle was 22 April 2014.

7.  Mr Yam said that he also purchased a PRC cross-border licence (“the Licence”) because he often travelled between Hong Kong and Mainland China and considered that it would be convenient to obtain a PRC cross-border licence for the Vehicle. According to Mr Yam, he made an arrangement through a friend to obtain the Licence and paid a sum of about RMB1,000,000 for the Licence in or about April 2014.  I pause to note that no further particulars of the Licence (eg, its date or number) have been given.  Neither has Mr Yam produced any evidence of the payment for the Licence, or indeed any documentary evidence in respect of the Licence.

8.  As in the case of the Vehicle, the Licence was registered in the name of Mr Chin. This was because, according to Mr Yam, the Vehicle was registered in Mr Chin’s name and Mr Chin offered to take care of the administrative work required in registering the PRC Licence and to register himself as the driver of the Vehicle corresponding to the PRC Licence.

9.  Mr Yam said that the Licence was eventually obtained and displayed on the Vehicle.  It was used by him for travelling back and forth between Hong Kong and China, and was parked either at the car parking space of his residence in Hong Kong or a car park in the neighbourhood.

10.  Mr Yam further said that all expenses relating to the Vehicle, including but not limited to car park rentals, petrol fees, auto-toll fees, etc, were borne by him by utilizing funds that he paid to his daughter.

11.  In addition to the Vehicle, Mr Yam said that Mr Chin was also registered as the owner of another vehicle belonging to Mr Yam’s daughter, a Porsche Panamera (“the Second Vehicle), with registration mark MW8966, in November 2012 for similar reasons, namely, her daughter was at that time still a Mainlander without a Hong Kong Identity Card and it was convenient to register it under Mr Chin’s name.  The records kept by the Transport Department show that the Second Vehicle was registered in the name of Mr Chin as at 12 January 2017 (Exhibit RJG-3).  The date of first registration of the Second Vehicle was 13 November 2012.

12.  On 12 January 2017, Mr Yam’s daughter presented a divorce petition against her husband (ie, Mr Chin’s son).  According to Mr Yam, after his daughter’s presentation of the divorce petition:-

(1) Mr Chin disposed of the Second Vehicle to his wife’s brother sometime in February 2017, which transfer was only reversed after the legal representative of Mr Yam’s daughter had a made complaint of the matter to a judge of the Family Court at a hearing on 25 May 2017.  The records kept by the Transport Department show that the Second Vehicle was registered in the name of a person called Yuen Sai Ching as at 13 March 2017 (Exhibit RJG-4), and became registered in the name of Mr Chin again as at 1 June 2017 (Exhibit RJG‑5). As can be seen from Exhibit RJG-5, the Second Vehicle now bears the registration mark AY1908, ie, the Vehicle’s former registration mark.

(2) In respect of the Vehicle, Mr Yam said that in or about September 2017, his daughter told him that an un-named mutual friend of her and Mr Chin’s son informed her that the Vehicle had been sold by Mr Chin and the proceeds were now in a bank account belonging to Mr Chin.

13.  In paragraph 19 of his affirmation, Mr Yam asserted that he verily believed that the Vehicle and Licence had been disposed of by Mr Chin without his prior knowledge or consent.  It is not entirely clear on what basis Mr Yam alleged that the Licence had been disposed of by Mr Chin.

14.  On the basis of the above facts and matters, Mr Wong submits that Mr Yam has shown (i) at least a serious issue to be tried (if not a good arguable case) that Mr Chin held the Vehicle and Licence on a resulting trust for Mr Yam, (ii) the balance of convenience lies in granting a proprietary injunction against Mr Chin to preserve, or restrain the disposition of, the proceeds of sale of the Vehicle and Licence, and (iii) it is just and convenient for a proprietary injunction to be granted in the present case.

DEFENDANT’S CASE

15.  In view of the ex parte nature of the application, there was no evidence from Mr Chin and he did not appear at the hearing.  Nevertheless, Mr Chin previously filed a “home-made” defence in this action on 12 October 2017. Essentially, Mr Chin’s case, as one can gather from that defence, is that the Vehicle and Licence were gifts made by Mr Yam to thank him for looking after Mr Yam’s daughter in Hong Kong.  The defendant accepts that he often used the Vehicle to transport Mr Yam, Mr Yam’s daughter and her family members back and forth between Hong Kong and Mainland China.  He also says that all the running costs of the Vehicle, including repairs and maintenance, insurance, licences, petrol, etc. were paid by him.

16.  Mr Chin did not deal with the allegations relating to the Second Vehicle in the defence, presumably because there was no allegation raised in relation to the Second Vehicle in the writ dated 29 August 2017.

NO PROPER EVIDENCE OF EXISTENCE OR WHEREABOUTS OF THE PROCEEDS OF SALE

17.  On the existing materials before the court, the question of whether there was a “gift” or a “trust” of the Vehicle and Licence rests essentially on the bare assertions of Mr Yam and Mr Chin respectively.  Mr Yam has, I consider, raised an arguable case against Mr Chin on the issue of trust, but no more, at this stage.

18.  There is no evidence of what was the amount of the sale proceeds of the Vehicle and/or Licence and, more importantly, there is no evidence whatsoever that the sale proceeds or any part thereof still remain or are still in the hands of Mr Chin.

19.  Insofar as Mr Yam is relying on what he was told by his daughter, who in turn was allegedly told by an unnamed friend, that the proceeds of sale of the Vehicle were kept in a bank account belonging to Mr Chin, such evidence is double hearsay in nature.  The allegation that the proceeds of sale were kept in a bank account belonging to Mr Chin is wholly lacking in particulars.  I do not consider such evidence to be satisfactory or sufficient for the purpose of supporting an application for an ex parte injunction against Mr Chin.  In any event, the evidence contained in paragraph 20 of Mr Yam’s affirmation could at most be taken to mean that in September 2017, Mr Yam was told by his daughter that she had been told that the sale proceeds of the Vehicle (but not the Licence) were, at that time, in a bank account belonging to Mr Chin.  It cannot be read to mean that the sale proceeds remained in that bank account as at the date of his affirmation, still less that they remain in that bank account now. There is also no information, or particulars, relating to Mr Chin’s account (eg, the name of the bank or the account number) in which the sale proceeds of the Vehicle were allegedly kept.

20.  A proprietary injunction, by definition, is an injunction which relates to a specific asset held by or under the control of the defendant, or its traceable proceeds, in respect of which a proprietary claim is raised by the plaintiff.  In order to justify the grant of a proprietary injunction, the plaintiff ought, ordinarily, to adduce some reasonable evidence of the existence of the specific asset or its traceable proceeds and that the same are still being held by or under the control of the defendant.  The distinction between a Mareva injunction and a proprietary injunction was discussed by To J in Falcon Private Bank Ltd v Borry Bernard Edouard Charles Limited, HCA 1934/2011 (9 July 2012), at paragraph 78, as follows:-

“A Mareva injunction is designed to protect the claimant against the dissipation of assets against which he might otherwise execute judgment whether immediately or in the future: see Gee’s Commercial Injunctions, 5^th edition at paragraphs 3.029 and 5.009. So long as the claimant has a claim against the defendant and that the defendant has assets which may be used to satisfy judgment, a claimant may apply for a Mareva injunction to restrain the defendant from dissipating his assets. A claimant’s right to a proprietary injunction is different. It is issued to preserve assets which a claimant has a proprietary claim so that they can be turned over to the claimant if he is successful in the action. A proprietary injunction is easier to obtain and not subject to the usual liberties inserted into Mareva relief and there is no need to prove risk of dissipation. It is a better relief than Mareva injunction, provided that the property has not been dissipated” [emphasis added].

21.  Where the asset forming the subject matter of the proprietary claim has been dissipated such that it could no longer be traced, no proprietary claim can be made and, it follows, no proprietary injunction can be granted.  In the present case, there is no evidence to show that there is currently any asset in the hands of Mr Chin which could form the subject matter of a proprietary claim by Mr Yam.  It would, in my view, be an improper use of the court’s jurisdiction, under the guise of an application for an ex parte proprietary injunction, to ask the court to make an “ancillary” disclosure order to enable Mr Yam to find out the whereabouts of the proceeds of sale of the Vehicle and/or the Licence, or whether any part of the proceeds of sale is still in the hands of Mr Chin.  To make such disclosure order would effectively be permitting a fishing expedition by Mr Yam in the absence of Mr Chin.  I also note that there is no claim for tracing in Mr Yam’s writ against Mr Chin in this action.

22.  I would not rule out the possibility of some special or exceptional cases in which it would be justifiable for the court to grant a proprietary injunction or make an ancillary disclosure order even where the plaintiff is unable to point to an identifiable asset in the hands of the defendant which could form the subject matter of a proprietary claim.  However, this is far from such a case.  As previously observed, I consider Mr Yam’s case to be arguable, but no more. There are also many gaps in Mr Yam’s case as summarized above.  It would, in my view, to be draconian to grant an ex parte injunction against Mr Chin on the basis of the existing materials before the court.

ORDER SOUGHT IS IN ANY EVENT INAPPROPRIATE

23.  In paragraph 1 of the draft order, Mr Yam seeks an order that Mr Chin must not:-

“(a) remove from Hong Kong any of his assets which are within Hong Kong whether in his own name or not, and whether solely or jointly owned, up to the value of HK$1,972,340.24; or

(b) in any way dispose of or deal with or diminish the value of any of his assets, whether within or outside Hong Kong, whether in his own name or not, and whether solely or jointly owned up to the same value. This prohibition includes the following assets in particular:-

(i) A Toyota Alphard vehicle [with a specified Chassis Number] previously with Registration Mark ‘AY1908’ or the net sale money or proceeds if it has been sold (‘the Sale Proceeds’)”.

24.  In view of Mr Yam’s decision not to seek a Mareva injunction against Mr Chin, no injunction in terms of paragraph 1(a) and (b) (save and except that part commencing with “This prohibition …”) should be granted.

25.  For the same reason, the references to the amount of HK$1,972,340.24 (being the proposed limit of the Mareva injunction originally sought) in the draft order under the headings “Duration of this Order” and “Exceptions to this Order” are inappropriate.

26.  In relation to the part of paragraph 1(b) commencing with “This prohibition …”, insofar as it seeks to restrain Mr Chin from disposing of the Vehicle, the same is otiose since it is Mr Yam’s case that Mr Chin has already disposed of the same.

27.  Hence, the only part of the draft injunction which the court may conceivably grant would be that relating to the “net sale money or proceeds” of the Vehicle.  However, as earlier mentioned, there is no evidence that any part of the proceeds of sale of the Vehicle (or Licence) is still in the hands of Mr Chin.  I am not prepared to exercise my discretion to grant an injunction in such general terms.

28.  In passing, I should mention that at the hearing on 3 November 2017, the court specifically asked Mr Wong whether, in view of Mr Yam’s decision not to pursue the application for a Mareva injunction, the proposed injunction was still appropriate.  Mr Wong maintained that it was still appropriate for the proprietary injunction sought, but said that Mr Yam would be happy to abide by such amendments to the draft order as might be made by the court.  As I informed Mr Wong, it was not for the court to draft an appropriate form of the injunction for his client.  This ought to be so, particularly where Mr Yam was fully represented by counsel and solicitor whereas Mr Chin was absent at the hearing.  Mr Wong did not put forward any revised draft order for the court’s consideration.  In the circumstances, Mr Yam’s application must be considered on the basis of the draft order as annexed to his ex parte summons.

DISPOSTION

29.  For the above reasons, I refuse to grant the proprietary injunction sought by Mr Yam against Mr Chin.  The ex parte summons dated 18 October 2017 is therefore dismissed with no order as to costs.