TOP FLYING INVESTMENT CO v. OPEN MISSION ASSETS LTD

HCA566/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.566 OF 2006

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REASONS   FOR   JUDGMENT

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Introduction

1.  This is the plaintiff’s application for leave to issue a writ of sequestration against the defendant and its sole director, Mr Liu Xue Lin, for their breaches of the following orders :

(1)    Order of Master de Souza dated 12 July 2006 ordering the defendant to deliver up the share certificates in respect of 50,036,000 shares in Goldwiz Holdings Limited to the plaintiff’s solicitor within 28 days (“the 1^st Order”);

(2)    Order of Master Hui dated 16 August 2006 ordering the defendant to comply with the 1^st Order by 19 August 2006 (“the 2^nd Order”);

(3)    Order of Mr Recorder McCoy, SC dated 30 August 2006 dismissing the defendant’s appeal against the 1^st Order (“the 3^rd Order”).

2. I allowed the application on 16 November 2006.  These are the reasons for my decision.

Background

3. The background circumstances had been fully set out in the Reasons for Decision handed down by Mr Recorder McCoy, SC on 1 September 2006.  I shall not repeat them here.

Dispensing service of the Orders

4. On 12 September 2006, Master de Souza made an order dispensing personal service on the officer of the defendant of the 1^st to 3^rd Orders with a penal notice endorsed.

5. At the time, the defendant was represented by Messrs Richards Butler (“RB”).  And the defendant, as its sole director, had made various affirmations both before the Masters and the Recorder.  The defendant and Mr Liu must have notice of the orders and must have been advised by RB of the consequences of non-compliance.  I am sure the learned Master must have these matters in mind when he ordered personal service be dispensed with.

Notice of motion and dispensing service

6. The defendant has failed to comply with the orders for delivery up.

7. By notice of motion dated 28 September 2006, the plaintiff took out the present application.  The notice of motion together with the supporting affirmation were served on RB on the same day.  (There is no evidence before me to suggest that RB did not have instructions to accept service for the defendant and Mr Liu.)

8. The notice of motion first came before me on 27 October 2006.  But earlier on 18 October 2006, RB obtained an order that they ceased to act for the defendant.  The plaintiff applied to me for an order that the service of the notice of motion on the defendant and Mr Liu be dispensed with.  On the evidence before me, I was satisfied that after RB received the notice of motion with the supporting affirmation, it must have duly informed Mr Liu, the defendant’s sole director.  The defendant and Mr Liu thus must have knowledge of the notice of motion.  It is appropriate in the circumstances to dispense with personal service.  And I so ordered.

Allowing the application

9. The matter came back before me on 16 November 2006.  Both the defendant and Mr Liu were absent.

10. I had duly considered all the evidence before me.  Mr Maurellet, appearing for the plaintiff, had fairly drawn my attention to the possible defence that the defendant and Mr Liu might wish to raise, namely, the alleged inability to deliver the share certificates, but submitted that it had already been rejected by the learned Recorder.  I agreed.

11. On the evidence before me, I was satisfied beyond a reasonable doubt that the defendant is in contempt by its failure to comply with the orders for delivery up and that Mr Liu, its sole director, is also guilty of contempt by failing to take reasonable steps to ensure compliance by the defendant.

12. For these reasons, I allowed the application and ordered the defendant and Mr Liu to pay costs on an indemnity basis.