XCHRX SHUM WAI WAN v. KWONG FUNG CHU

HCA 1917/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1917 OF 1998

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J U D G M E N T

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1. This is an application by the Plaintiff for the continuation of a Mareva injunction granted on 1st May 1998.

2. The order that was granted on 1st May 1998 by Suffiad J. imposed a ceiling in the sum of $1,888,550.00 and was in respect of two specific assets of the Defendant namely, (a) the property known as Flat B, 29th Floor, Tower 10, South Horizons, Ap Lei Chau, Hong Kong and; (b) Flat G, 1st Floor, Tower 23A, South Horizons, Hong Kong, or the net sale proceeds after payment of any mortgages if they had been sold, and also any money in personal bank accounts or accounts jointly owned by the Defendant with others.

3. On 6th May 1998, there was a variation by consent of the order of 1st May. The Defendant had sold one of the two properties and on an undertaking given to the Court to pay the sum of $586,045.54 into Court, the Defendant was at liberty to sell and complete her sale of the property known as Flat B, 29th Floor, Tower 10, South Horizons, Ap Lei Chau, Hong Kong. By the same order, the Defendant was also prohibited from disposing of or dealing with or diminishing the value of two car parks, namely, Service Vehicle Parking Spaces, No. S7 and S8 on Level 2 (For Commercial Use) in East Commercial Block, South Horizons, No. 18A South Horizon Drive, Hong Kong.

4. The Plaintiff has made it plain to me that she no longer wishes to pursue her claim for specific performance, but indeed will be seeking an assessment of damages. Thus, the Plaintiff has elected to seek damages instead of specific performance. I am told that the hearing of the assessment will take place on 29th July 1998.

5. The Defendant does not seek to discharge the Mareva injunction but simply to vary it. Mr. Chun, appearing for the Defendant has submitted that the Plaintiff's claim in damages is less than the amount suggested by counsel for the Plaintiff. He further submitted that with the money paid into court which will remain in court and the two car park spaces which a valuer has valued at $1,200,000.00 as at the end of May 1998, there will be sufficient security for the Plaintiff's claim in damages. He, therefore, asked that the order should be varied so that the other residential property namely, Flat G is taken out of the Mareva injunction and is not to be subjected to an injunction.

6. It is important that the Plaintiff has sufficient security for his claim. The basis for obtaining Mareva relief initially was the fear of a risk of dissipation of assets. It is not been challenged that it was not proper to grant the Mareva injunction in the first place and indeed it is not suggested that the Mareva injunction should not continue. The only question is the ceiling in respect of which the Mareva injunction should stand.

7. Having heard the various arguments, it seems to me that the Plaintiff's claim in damages and legal costs would be in excess of $1,800,000.00. The value of the two car parks are said by the Defendant to be $1,200.000.00 as at the end of May 1998 but the Plaintiff has suggested that the figure should be $800,000.00 based on what estate agents have said to Ms. Ip who has filed an affirmation dealing with her challenge to the valuation made on behalf of the Defendant. I am not able to resolve this conflict of evidence as to the valuation of the car parks save to say that even taking the Defendant's valuation as at the end of May 1998, it is reasonable to assume that as at today's date, there would have been a further drop in value of the two car parks, and as at the end of July 1998 when the hearing of the assessment of damages will take place, it is likely that the value will be less than as has been set out in the valuer's report as at the end of May 1998.

8. It seems to me, therefore, that the suggestion made by counsel for the Defendant that the car parks and the money in Court would provide sufficient security does not find favour with me. On the other hand, I am conscious of the fact that the Plaintiff should not be over secured and I think a proper order in this case is to vary the injunction so that the car parks are taken out of the injunction but that the residential property does remain subject to the Mareva injunction. The property after all has been mortgaged in the sum of $1,800,000.00 and I have been told by counsel for the Plaintiff that there should be about $2,500,000.00 left after taking the mortgage into account according to a valuation report. These figures may of course change by the time the assessment of damages takes place but it seems to me that if the residential property is subject to the Mareva injunction together with the money that has already been paid into Court, there should be sufficient security for the Plaintiff's judgment in damages. I, therefore, continue the Mareva injunction and vary the orders made on 1st May and 6th May 1998 by ordering that the car park spaces, the Service Vehicle Car Parking Spaces S7 and S8 on Level 2 (For Commercial Use) in East Commercial Block, South Horizons, No. 18A South Horizon Drive, Hong Kong be no longer subject to the Mareva injunction but that the sum of $586,045.54 do remain in Court and the other property Flat G, 1st Floor, Tower 23A, South Horizons, Hong Kong be subject to the Mareva injunction. The order is made on the Plaintiff's usual undertaking in damages. Costs in the cause of the assessment of damages.

(Arjan H. Sakhrani)

Judge of the Court of First Instance