A.C. AGROBIOLOGICAL CORPORATION AND ANOTHER v. BUCK SALES LTD AND ANOTHER

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JUDGMENT

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Cons, J.A. delivered the judgment of the Court:

1. This is an appeal from Deputy Judge Betts who refused an injunction of the Mareva type. The application was otherwise adjourned for the other questions raised therein to be heard together with applications pending a hearing to be resumed before Hunter, J.

2. The background to the whole proceedings is confused, both factually and procedurally. The atmosphere is murky to say the least. Nevertheless it is necessary to attempt a brief outline of the necessary features.

3. The 1st Plaintiff is a Swiss company. It believes itself to have been deceived by a Mr. Maxwell whom it sent to do business in Hong Kong. It feels he has defrauded the company of much money. It therefore brought an action against him and against the 1st Defendant which is another company into which the money went. A Mareva injunction was swiftly obtained and included as one of the accounts scheduled to the injunction was an account with the Hong Nin Bank in the name of the lst Defendant. Subsequent to bringing that action the 1st Plaintiff assigned, amongst other things, the benefit of that action to the Appellant. In the meantime however the lst Plaintiff had released the particular account from the Mareva injunction.

4. In view of the assignment the Appellant thought it necessary to join in that action. It was granted leave to be joined as a second plaintiff and also obtained, on its own account, a Mareva injunction in terms identical to that which had earlier been obtained by the lst Plaintiff, including of course the scheduled account in the Hong Nin Bank. For reasons which are not readily apparent to us, and perhaps not relevant, the 1st Plaintiff applied to set aside both the joinder and the Mareva which the Appellant had obtained on its own account.

5. At this stage the Appellant began to suspect that the lst Plaintiff also was guilty of fraud and decided that it should no longer remain as co-plaintiff. Leave was first sought to be joined as "Intervener". and the following day - presumably as an application in substitution - to be joined as third defendant, raising fraud by way of counterclaim.

6. That application and the 1st Plaintiff's application to set aside the earlier order came before Hunter, J. on the 28th August. After some argument it was adjourned for further evidence, the judge giving various directions as to the filing of translations and affidavits, the time for which has not quite expired. Then in view of the very large sums involved, the ease with which monies can now be transferred from one part of the world to another, and what the Appellant is convinced to be a clear case of fraud, the Appellant was not content to let matters rest there without seeking further protection. Another summons was issued asking, inter alia, that the 1st Plaintiff be restrained from disposing of its assets in Hong Kong to the extent of $66.5 million. That request is now limited to $8.4 million, being the monies alleged to have been originally in the particular account in the Hong Nin Bank to which we have already referred.

7. Whether the request was so limited when the matter was before the Deputy Judge below we are not sure. But in any. event he refused to'' grant any injunction.

8. For a very long time now equity has freely granted injunctions to protect trust funds which might otherwise be dissipated before the Court could deal with the matter: Such jurisdiction appears now to have become assimilated with that of the more recently established Mareva injunction, and it is more on reliance on that aspect of the jurisdiction that the present injunction is sought.  The Appellant seeks to trace the monies said to have been taken in fraud

9. We have only. a very brief note of the reasons given by the judge below. .He said he was not satisfied that there would be a grave risk that judgement, if obtained, would be defeated by the monies having been dissipated beforehand. The Appellant suggests that he was further influenced by the fact that the Appellant and the 1st Plaintiff were still, at least upon the record, co-plaintiffs, admittedly a very unusual situation in which to apply for an injunction of this kind.  On the other hand the 1st Plaintiff suggests that the refusal was because the Appellant had not shown that the monies had ever come into the control or possession of the 1st Plaintiff. In addition counsel points out that the Appellant is in any event adequately protected in this respect because, apart .from the; relief which the Appellant seeks against the 1st Plaintiff, the Appellant already has an appropriate injunction.

10. To explain this we should interpose that the 1st Plaintiff had released the account from the original injunction because it had got the name wrong. The account was not in the name of the 1st Defendant, but in that of a Mr. Rabelbauer, who otherwise called himself Mr. Parker. .The Appellant had instituted separate proceedings against him and in those proceedings had obtained a restraining injunction and an order for discovery to assist the Appellant in following the money if possible.

11. We are not concerned today with the question of discovery. We are concerned with the monies themselves if they are still available anywhere. We know that the monies went into the Hong Nin Bank. That was in May last year. We know that monies were taken out by Mr. Rabelbauer, in particular the $8.4 million referred to in the statement by the Bank which is included in the appeal bundle. We know that Mr. Rabelbauer is an employee of the 1st Plaintiff, dealing with their monies. Before the order was made against him personally, the money had been taken from that particular account. We do not yet know where it is gone. On the face of things as they appear at the moment, those monies belong to the Appellant. If it is at all possible, this Court should do everything it can to protect the Appellant's interest in them. It is not suggested that the 1st Plaintiff itself has done anything wrong, but through their employee Mr. Rabelbauer they have intermeddled with those monies and in our view that is sufficient justification for our interferring i.e. at least until the matter can be fully dealt with, as it will be when the resumed summonses come again before Hunter, J.

12. It is suggested that we do not have jurisdiction to take this course. The same point was raised before the Deputy Judge below and rejected.. The Court's jurisdiction to grant injunctions is given in the widest possible terms. Although normally one plaintiff. may not act inconsistently with a co-plaintiff, the apparent conflict in this most unusual case seems to us temporary and illusory. The Appellant has already instituted proceedings to rectify its perhaps insufficiently considered haste to be joined as the 2nd Plaintiff and this matter too will be dealt with before Hunter, J. .

13. The judge below did not elaborate his reasons. In our view the history of these matters, as it appears from the evidence so far advanced, indicates clearly that if the monies are in fact still in or under the control of the 1st Plaintiff there is a real risk that they may not so remain.

14. For these reasons, we allow the appeal and vary the order of the judge below only to the extent that an injunction is granted in the following terms:

 

"An injunction. to restrain until the determination by Hunter, J. of .the summonses dated 20th, 23rd and 27th August or until further order the 1st Plaintiff whether by itself, its employees, servants. or agents or otherwise howsoever from transferring, charging, disposing of (otherwise than to the Centro Internationale Handelsbank AG) or in any other way dealing with or removing from the jurisdiction any of its assets within the jurisdiction of this Court save insofar as such assets exceed HK$8,400,000."