CATHAY PACIFIC AIRWAYS LTD v. LUK SHU KEUNG AND OTHERS

HCA2895/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2895 OF 2001

R U L I N G

1.  I have no doubt this is a bona fide application made by Mr Lintern-Smith on behalf of the 1st defendant, who is undoubtedly the main character in these proceedings. 

2.  The plaintiff, so far as this matter is concerned, is acting perfectly reasonably.  In correspondence it has indicated that it would be prepared to consent to any reasonable order relating to the release of funds provided the 1st defendant would indicate to it, either by himself or through the other defendants, what their assets are.  That is a reasonable stance to take because Mr Lintern-Smith is representing all of them. 

3.  At the moment, one does not have any indication, other than from Mr Lintern-Smith, to the effect that although he is representing the other defendants as well he has not had very much contact with them, and although the amended-defence has been filed on behalf of all of them, most of the costs which had been expended and which are going to be expended in defending this action are going to be on behalf of the 1st defendant. 

4.  It seems to me that this is a perfectly logical answer to the problem, but it is only a partial one, because there is no doubt that of these individuals, a number of them are close relatives of the 1st defendant, the 3rd Defendant being his wife, and the 5th is his sister-in-law.  One of the matters that can be legitimately raised on an occasion such as this is whether the 1st Defendant could turn to them for financial assistance in what is always, of course, a difficult and delicate balancing exercise where one needs to protect the legitimate interests of the plaintiff whilst, on the other hand, not leaving the defendant in a position where he simply cannot afford to pay his lawyers and therefore is perhaps left unrepresented in what is obviously going to be a difficult and fairly long action if it were to come to trial. 

5.  The way I have approached this matter is by being reasonably generous to the 1st defendant, but to I wish make it absolutely clear to him that on the next occasion he is going to need to be more forthcoming than he has on this occasion.  I am going to direct the release of $900,000 from the proceeds of sale of this particular property against which the plaintiff has no proprietary claim and so one can afford to be more generous in relation to these funds than would be the case in respect of other properties against which the Plaintiff is asserting a proprietary claim.  But on the next occasion it strikes me that - and Mr Lintern-Smith has said that inevitably there is going to have to be a next occasion where more moneys are going to be needed and applied for release - if the 1st defendant is going to have any decent chance at obtaining the release of more funds, he is going to need to be more forthcoming as to what attempts he has made to obtain money from other sources, particularly from the other defendants, two of which are his close relatives.  It would help him immeasurably, if he were to come to court on the next occasion, providing full disclosure of their assets. 

6.  Nevertheless, today I am going to release this substantial amount of money simply because I have no doubt, based on the skeleton bill, that most of this, if not all of it, has been spoken for.  There has obviously been a great deal of time and effort that has been gone into preparing the amended defence, and further instructions have had to be obtained.  It is, therefore, only right that this amount should be released today.  But in future I do not really think the court could legitimately be persuaded to release more unless there is far more disclosure of the assets of the other defendants, and also of the efforts that the 1st defendant, as the principal defendant in this action, has made to obtain other funds. 

(Discussion re costs in the cause)

7.  Well, I have considered it, and I think costs in the cause is the right order.  In a real sense, this matter had to come to court.  You now have had a substantial amount of money released, but it is some way down on what you were asking for, and you have obtained this “advice” from me as to how any future application would need to be mounted.  Thank you very much.