XCHRX THE YIEN YIEH COMMERCIAL BANK LTD. v. LAM KWOK CHOI

HCA 8158/2000
(Intended Action No. 76/2000)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 8158 OF 2000

(INTENDED ACTION NO. 76 OF 2000)

____________

_______________

D E C I S I O N

_______________

1. I have before me this afternoon an urgent ex parte application for a mareva injunction which has been made on behalf of the Yien Yieh Commercial Bank Limited and relates to an injunction to prevent the disposal of assets by the intended Defendant, Mr Lam Kwok Choi.

2. A brief history of the matter as it appears from the papers before me may be summarized as follows:

(1) The Yien Yieh Commercial Bank has afforded banking facilities to a company called Viewson Enterprises Ltd which is a trading company. To secure these banking facilities, the Plaintiff Bank has obtained guarantees from the directors of the company including the Intended Defendant.

(2) The banking facilities advanced had by 9 August of this year (in Hong Kong currency and US currency) exceeded HK$12 million.

(3) Viewson obtained banking facilities from the Plaintiff Bank on the basis that it had entered into contracts for the sale of goods to a third party. However, a check with the third party led to the discovery that no such contracts had been concluded. Fearing a fraud upon itself, the Plaintiff Bank informed the police. The police investigated the matter and, I am informed, are satisfied that there is, in fact, a prima facie case of fraud.

(4) The directors of Viewson, including the Intended Defendant, have all fled the jurisdiction.

(5) However, the Intended Defendant is the owner of a residential property in Hong Kong and has entered into an agreement for the sale of that property. The Plaintiff Bank does not wish to prevent that sale taking place but seeks, by way of injunction, to secure the proceeds of sale after legitimate costs (such as the mortgage and legal fees) have been met.

3. Having set out a brief history, I turn now to the law. First, I am satisfied on the papers that the Plaintiff Bank does have a good arguable case in respect of a substantive claim over which this Court has jurisdiction. The evidence before me shows that the Bank has advanced moneys to Viewson but is unlikely to obtain payment from that company and must therefore look to the guarantors. The claim is a substantial one and unless I grant the mareva injunction, the known assets will not be sufficient to meet the claim.

4. Second, I am satisfied that the Intended Defendant, Mr Lam Kwok Choi, does have assets within Hong Kong, namely the residential property and also, it seems, two bank accounts with Hang Seng Bank.

5. Third, I am satisfied that there is a real risk of dissipation or disposal of the assets which would render a material portion of the Plaintiff Bank's relief nugatory. I am satisfied that this is the case essentially by way of inference. My inferences are based on the fact that the police are satisfied that a prima facie case of fraud exists upon the Plaintiff Bank. The fraud has, so it would seem, been committed by the managers of Viewson. The Intended Defendant is one of those persons, the others being his brothers. There is evidence to show that the Defendant has fled the jurisdiction. I am satisfied that it would be foolish to think that once the funds are released from the sale they themselves will not somehow be removed from the jurisdiction too.

6. In the circumstances, I am satisfied that the injunction should be granted upon the terms and conditions sought.