LEONARD KOUTSOMIHALIS AND ANOTHER v. MAHAVIR CHETANMAL SHAH ( t/a AKI ENTERPRISES)

HCMP 1286/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1286 OF 2016

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D E C I S I O N

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1.  This is the applicants’ application for an order of committal against the respondent on the ground that he has failed to comply with paragraph 3 of the order granted by Bharwaney J on 9 December 2014 in HCA 2509/2014.

2.  On 9 December 2014, the applicants were granted an ex parte Mareva injunction (“the Order”) by Bharwaney J to freeze the respondent’s bank account with HSBC pending further recovery action. The Order was continued by Ng J on the return date on 19 December 2014.

3.  Paragraph 3 of the Order states as follows:-

“Each Defendant must:

3.1 inform the Plaintiffs in writing within 3 working days of this Order of all of its assets of an individual value of HK$8,000 or more in Hong Kong, whether in its own name or not, and whether solely or jointly owned, giving the value, location and details of all such assets. The Defendant may be entitled to refuse to provide some or all of this information on grounds that to do so may incriminate it.

3.2 confirm this information in an affidavit which must be served on the Plaintiffs’ solicitors within 7 working days after this Order has been served on the Defendant.”

4.  The Order, duly endorsed with a penal notice, was served on the respondent by hand delivery to the respondent’s business address, receipt of which was acknowledged by an occupant who applied the company chop of the respondent’s business (Aki Enterprises) on the covering letter of the applicant’s solicitors, on 15 December 2014.  That the respondent had notice of the Order is shown by the fact that he filed an affidavit on 6 February 2015 in HCA 2509/2014 to challenge the Order.  At paragraph 1 of that affidavit, the respondent made an express reference to the order of Ng J dated 19 December 2014 which, as earlier mentioned, continued the Order granted by Bharwaney J.

5.  The respondent has failed to comply with paragraphs 3.1 and 3.2 of the Order, whether within the stipulated time or at all, despite reminders sent by the applicants’ solicitors to the respondent’s solicitors by letters dated 8 December 2015 and 29 February 2016 respectively.

6.  The information sought by the applicants was intended to assist them to pursue their claim against the respondent.  The applicants’ case is that they are the victims of an internet fraud, having been deceived into parting with the total sum of US$1,196,464.45, part of which has been traced into the respondent’s bank account with HSBC (through an intermediate bank account also with HSBC held in the name of Innovative Network Limited).  So far, approximately US$239,000 in the respondent’s account has been restrained by the Order, leaving a sum of US$474,084.65 being unaccounted for.

7.  I am satisfied beyond reasonable doubt that the respondent has had proper notice of the Order, but wilfully failed to comply with the Order with knowledge of its contents.  His conduct constitutes a contempt of court: see P T Bank Penbangunan Indonesia (Persero) v Tan Eddie Tansil [1997] HKLRD 57, at 61 per Godfrey JA.

8.  The respondent has not appeared this morning.  Neither has he offered any explanation for his failure to comply with the Order, or any facts or matters in mitigation.

9.  In these circumstances, I make the following orders:

(1) the respondent be committed to prison for a period of 28 days for his failure to comply with paragraph 3 of the Order;

(2) the respondent do pay to the applicants the costs of and occasioned by this application, to be taxed if not agreed on an indemnity basis; and

(3) until such time as he has purged his contempt, the respondent shall not be heard or permitted further participation in HCA 2509/2014.