MORAL LUCK FINANCE LTD v. CHEUNG KWAI YIN

HCMP 1306/2017

[2018] HKCFI 1795

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1306 OF 2017

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DECISION

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1.  On 13 July 2018, the applicant obtained from Wong J on an ex parte basis a Mareva injunction against the plaintiff. This is the return date hearing.

2.  Background of the matter can be gleaned from the judgments of the Court of Final Appeal in FACV 5 and 6 of 2015.  In gist, the plaintiff was a licensed money lender and lent the defendant $30,000.  As he defaulted in making repayments, it obtained a judgment against him, a charging order on his flat and an order for vacant possession and sale, all in default of acknowledgement of service by the defendant.  The applicant, the defendant’s wife, approached the court contending that the defendant was mentally incapacitated and sought orders that she be appointed his guardian ad litem and that the judgment and consequential orders be set aside.  Her application was objected to by the plaintiff and rejected by Deputy District Judge R Yu (as he then was) before District Court.  Her appeal to the Court of Appeal was dismissed.  She appealed to the Court of Final Appeal.  On 24 June 2015, her appeal was allowed.  She was also awarded costs.  According to the relevant Bill of Costs prepared prior to taxation, the total amount of costs which she was entitled to claim from the plaintiff was HK$3,359,928.

3.  The applicant proceeded to have her costs taxed.  The plaintiff had been mostly unresponsive in the process.  There had also been certain developments which caused the applicant concern.  They included the following: (1) according to the List of Dismissed or Withdrawn Applicationsfor Money Lenders (as at 30 April 2017), the plaintiff’s application for moneylender licence was dismissed; (2) some unusual changes of shareholding and directorship of the plaintiff; and (3) that the plaintiff could not be found at its registered address when a clerk of the applicant’s legal advisers attended the same on 2 June 2017. 

4.  On 6 June 2017, and supported by the applicant’s 1^staffirmation of the same date, the Applicant obtained from Lisa Wong J on an ex parte basis a Mareva injunction against the plaintiff prohibiting its disposal of assets up to HK$3 million.  Disclosure in aid was also ordered.  Despite the appearance at some stage (during the first return date on 16 June 2017) by someone claiming to have been authorized to represent the plaintiff, the plaintiff failed to arrange properly its representation before the court.  The plaintiff ultimately filed no evidence in opposition.  In the end, the Marevainjunction was ordered to be continued by Au Yeung J on 23 June 2017 until 28 days after completion of the taxation proceedings in FACV 5 and 6 of 2015 (the “23/6/17 Mareva Injunction”).

5.  The plaintiff failed to give any disclosure in aid as ordered.

6.  The taxation hearings subsequently took place on 30 June 2017, 7 August 2017, 23 October 2017 and 17 January 2018.  During the first hearing, somebody (called 余磊) who claimed to be a director of the plaintiff appeared.  He said that he had no intention of settling the outstanding costs.  The taxation hearing was then adjourned, as proper application would have to be taken out by the purported director to get leave to represent the plaintiff.  The plaintiff however did not appear during the subsequent hearings. 

7.  The sealed Order of the allocatur was issued on 20 April 2018.  The total amount of costs allowed is HK$2,967,105.60.  As per the Order of Au-Yeung J, the 23/6/17 Mareva Injunction lapsed on 18 May 2018.

8.  On 13 July 2018, with her 2^nd affirmation of 10 July 2018 in support, the applicant applied for and obtained before Wong J what is in effect a re-grant of the 23/6/17 Mareva Injunction (the “13-7-18 Mareva Injunction”). The ceiling of the restrained amount was, in accordance with the amount of the costs allowed, adjusted to HK$2,967,105.60.  I note that on 7 June 2018, the applicant applied for Legal Aid.  That accounts for the slight delay in the making of the application before Wong J.

9.  I have read the 2^nd affirmation of the applicant.  I have read the authorities cited to me, which include Menno Leendert Vos v Global Fair Industrial Ltd & others HCA 4200/1995(unreported, 25 March 2010).  I have heard counsel for the applicant.  I note that this is in effect an application for a post-judgment Mareva injunction.  The existence of a good arguable case is not in doubt.  Given the circumstances of the case and the conduct of the plaintiff as outlined above, including the failure on the part of the plaintiff to make disclosure in aid as ordered by the 23/6/17 Mareva Injunction, and in the absence of any evidence in opposition from the plaintiff, a serious risk of dissipation can in my view be inferred.  The balance of convenience is also in favour of the continuation of the 13-7-18 Mareva Injunction.  However, whilst I am prepared to continue the 13‑7‑18 Mareva Injunction pending initiation of execution process, I am not prepared to order it to be continued indefinitely.  In my view, it is not appropriate to do so—see Republic of Haiti v Duvalier [1990] 1 QB 202, per Staughton LJ at 214G–H.  While the applicant will need some protection in terms of the 13-7-18 Mareva Injunction at this stage, she should avail herself of the usual execution mechanism in due course.  I will proceed to hear Mr Ma on the duration.

(Discussion with counsel)

10.  The Injunction granted by Wong J on 17 July 2018 be continued until 16 July 2019 unless before then it is varied or discharged by a court order, with costs reserved.