MOCRA LTD v. KERRY-ANN WARREN

HCA 634/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 634 OF 2010

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J U D G M E N T

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I. INTRODUCTION

1.  In October 2009 Mocra agreed to transfer sums of money at Ms Warren’s instruction to secure a percentage share (the precise percentage to be determined later) of an oil trading platform.  Ms Warren said at the time that she was a director of a company known as Jaeger Oil and Gas Limited (JOG).  It is unclear where precisely JOG was incorporated.  Ms Warren, in her affirmation evidence, says that she believes JOG to be a BVI company.

2.  Pursuant to this agreement, Mocra transferred US$250,000 from its HSBC Singapore account to the account of a Ms Macartney-Scott on 22 October 2009.  On 26 October 2009 Mocra transferred a further EUR 133,162.75 from its HSBC Singapore account to Ms Warren’s personal account.

3.  The deal fell through. Mocra never obtained a share of any oil trading platform.  It therefore claimed the return of its monies from Ms Warren in early 2010.  But Ms Warren failed to return any monies.

4.  Mocra applied for summary judgment.  On 21 June 2010, Ms Warren having failed to appear at a hearing of Mocra’s application, the Master granted summary judgment to Mocra.

5.  Ms Warren appealed against the judgment by Notice dated 5 July 2010.  I gave directions for the disposal of the appeal on 17 August 2010.  On those directions, Ms Warren was to file an affirmation within 28 days, setting out the facts and matters upon which she proposed to rely by way of defence.  Ms Warren did no such thing.  She did not file any affirmation in support of her appeal until 22 August 2011, more than a year later.  Even then, the late filing appears to have been prompted by bankruptcy proceedings brought against her by Mocra to enforce the summary judgment.

6.  Ms Warren claims that she needed a year to gather evidence in support of her defence.  She says that it was difficult for her to obtain evidence because, being under a prohibition order obtained by the defendant, she has been unable to leave Hong Kong.  She asserts that the evidence which she requires is located in various parts of the world.

7.  Ms Warren’s appeal came up again before me on 8 November 2011.  By that time she was hopelessly and inexcusably out of time.  Nonetheless, in light of the fact that she is unrepresented, I decided to hear her appeal against the summary judgment substantively.  I gave updated directions for the filing of evidence.  I then adjourned Ms Warren’s appeal until 25 November 2011, the present hearing.

II. DISCUSSION

8.  In the face of Ms Warren’s absence, the Master was entirely justified in giving summary judgment in June 2010.  That judgment was consequently a regular one.

9.  In order to set the judgment aside, Ms Warren has to show, not just that she has an arguable case, but that she has an arguable defence with a reasonable prospect of success.  There is no point in setting aside a regular judgment of this Court if a defendant’s prospects are merely speculative or fanciful.

10.  Ms Warren essentially claims to have 3 defences.  They are that:-

(1) this Court lacks jurisdiction;

(2) Mocra is the wrong plaintiff; and,

(3) if Mocra is the correct plaintiff, the agreement by which monies were transferred was not between Mocra and Ms Warren, but between Mocra and JOG.

A. Wrong jurisdiction

11.  It is now too late to query jurisdiction.  A litigant who wishes to contest jurisdiction must do so promptly.

12.  Ms Warren has only recently sought to challenge jurisdiction.  That is more than a year after proceedings were initiated.

13.  Further, Ms Warren has delayed in filing evidence in support of her appeal against summary judgment. She has sought the Court’s indulgence to grant her more time in which to file evidence in support.  This is not to mention the extensions or stays which Ms Warren has sought in relation to Mocra’s proceedings against her to enforce its summary judgment.

14.  By any yardstick on the facts here, Ms Warren must be deemed to have submitted to the Hong Kong court’s jurisdiction long ago.

15.  The challenge to jurisdiction therefore has no prospect of success at all.

B. Wrong plaintiff

16.  Mocra has produced evidence establishing that the relevant monies were transferred from its account.

17.  On the other hand, Ms Warren has not in her affirmation evidence identified the person (if not Mocra) whom she believes to be the proper plaintiff.  Asked in oral submission whom she alleged to be the proper plaintiff, she named Mr Neil White (a director of Mocra).  She explained that was because she negotiated the transfer arrangement with Mr White.

18.  A company can only act by a human agent.  It is therefore hardly surprising that the transfer arrangement was negotiated by Mocra through Mr White.  That matter being the only basis upon which Ms Warren is relying in respect of the allegation of wrong plaintiff, the second defence is bound to fail.

19.  It is incumbent on Ms Warren, especially after so much delay, to state her defence with precision and particularity.  The Court will not set aside a regular judgment where a defendant fails to condescend to the particulars of an alleged defence.  Without full particulars, the Court will not be able to conclude that a defence has a reasonable prospect of success.

C. Wrong defendant

20.  Mocra’s evidence in support of Ms Warren being the correct defendant is compelling.  In contrast, Ms Warren’s explanations are obscure.

21.  The first tranche of US$250,000 was transferred by Mocra to the account of Ms Macartney Scott at Scott Petroleum, Chase, J P Morgan, 270 Park Ave., New York.

22.  If JOG was the real counterparty to the agreement with Mocra, why did Ms Warren not ask for the monies to be sent direct to a JOG account?  No explanation is ventured as to who Ms Macartney Scott is and precisely what her role in the whole deal was supposed to be.

23.  In oral submission, Ms Warren alleged that monies were sent to Scott Petroleum to obtain a bank guarantee.  Ms Macartney Scott is said to work for Scott Petroleum.

24.  Nowhere has Ms Warren explained why Scott Petroleum should be obtaining a bank guarantee in respect of an intended purchase by JOG of a share in an oil platform.  What exactly was the bank guarantee for?  What was being guaranteed on behalf of whom for what purpose?  What has Scott Petroleum done with the monies transferred, given that the deal for an oil platform has not materialised?  Ms Warren is silent on all this.

25.  The second tranche was transferred to Ms Warren’s account at Verwaltungs-und Privatbank (VP Bank) in Singapore.  This is odd.  Why was it necessary to transfer to Ms Warren at all?

26.  Ms Warren claims to have transferred the money almost immediately she received the same to other directors of JOG.  But why did the money have to be routed through Ms Warren’s account in the first place if JOG or its other directors was the ultimate destination?

27.  What was the purpose of this second tranche?  Orally in court, Ms Warren claimed that the monies were to be used to provide JOG with financing capital.  That explanation is vague. If the monies were destined for the eventual purchase of an oil platform, why should some of it go to Scott Petroleum, while the rest allegedly went to provide JOG with venture capital?

28.  Both transactions were made pursuant to emails from Ms Warren.  One email dated 22 October 2009 instructed Mocra to transfer the second tranche in euros because “I [Ms Warren] do not want to hold dollars at this time”.

29.  Ms Warren orally explained that the quoted passage was written because she did not want the dollars already in her personal account to be mixed with JOG’s money. Receiving JOG’s money in euros would keep the funds distinct from Ms Warren’s monies.  That is difficult to believe.  If Ms Warren were truly concerned to keep her monies separate, why did she not simply instruct the second tranche to be sent directly to a JOG account?

30.  In relation to the first tranche, Ms Warren asked in the same October 2009 email for a tracer number “as they appear to seriously doubt that I HAVE IT”.  Ms Warren suggests that the highlighted words (implying the monies were to be treated as belonging to Ms Warren) were written tongue in cheek.  That is again hard to accept as a credible explanation.

31.  In a later email dated 2 February 2010, Ms Warren wrote to Mr White of Mocra as follows: “I give you my word your monies will be returned, when?  Is not honestly a date I can give you at the moment, but I will when I can”.  Why would Ms Warren be writing in that way, if (as she now claims) all along she knew that the agreement was with JOG not her?

32.  Orally in court, Ms Warren explained that all she meant by the February 2010 email was that she was trying her best to obtain repayment of the monies from JOG.  She was trying to help Mr White at the cost of her own directorship position in JOG.  She could only promise to do her best to recover the monies from JOG.  She could only pass on monies to Mocra once JOG paid up what JOG owed.

33.  Again, Ms Warren’s explanation, particularly when read against the October 2009 email discussed above, is difficult to square with the actual words used in the body of the February 2010 email.  Ms Warren clearly seems to be saying in the February 2010 email that she (not JOG) would repay when she (not JOG) could.

34.  Ms Warren is not a lawyer.  But she has been an investment banker.  She has worked for Salomon Brothers, Credit Suisse First Boston and J P Morgan.  In those circumstances, it strains credulity to imagine that Ms Warren would admit a liability when all along she believed that the relevant contract was with someone else.

35.  It seems to me that Ms Warren is being less than frank in her explanations.  It is not a matter of producing random documents (most of which have little apparent relevance to this case) as evidence.  Ms Warren has not in her affirmation evidence given a full explanation of why she received the monies and what has since become of them.  These are matters which on any view should be within Ms Warren’s personal knowledge.

36.  By reason of the foregoing, I am unable to accept Ms Warren’s third defence as credible.  It is far too unparticularised for the Court to conclude that the defence has a reasonable prospect of success.  To the contrary, the available evidence militates strongly against the third defence.

III. CONCLUSION

37.  Ms Warren’s alleged defences are untenable.  She fails in her appeal.  Her application to set aside the summary judgment is dismissed.  Ms Warren applied for a stay of execution of the summary judgment pending the hearing of her appeal.  The appeal having been dismissed, there is no basis for such a stay of execution.

38.  There will be a Costs Order Nisi that Ms Warren pay Mocra’s costs of the hearings before me on 8 and 25 November 2011, including Mocra’s costs in relation to Ms Warren’s appeal.  The Costs Order Nisi will become absolute in 14 days unless one party or then applies before then to have it varied.