XCHRX JIANGMEN CHAO CHENG THREAD CO. LTD v. NG SIU LUN AND ANOTHER

HCA 219/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 219 OF 2000

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REASONS FOR DECISION

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1. The Plaintiff claims against the 2nd named Defendant Madam Ng on the basis that she was personally involved in the dealings with the Plaintiff and has failed and/or refused to repay the debt of over $3 million.

2. Bearing in my mind the relationship between the 2nd named Defendant and the 1st named Defendant who is the sole proprietor of the firm in question, bearing in mind the active participation of the 2nd named Defendant and in particular, the allegation by the Plaintiff that in effect there was fraud on the part of the 2nd named Defendant and someone else in the ordering of the materials and goods from the Plaintiff, there is, in my view, at least a very strong arguable case that the 2nd named Defendant would be liable for the debt in question.

3. As far as the 1st named Defendant is concerned, he claims not have any knowledge about the contracts in question and he sought to shift the blame onto his son and his wife. But there is no dispute that at all material time he was the sole proprietor of the factory in question and on his own case, he left the running of the factory to his wife and son. He claims not to have taken any active part in the business because of his illness.

4. On those undisputed evidence, in my view, there is at least a triable issue as to whether the 1st named Defendant is himself liable for letting someone else to have authorities to represent the factory in their dealings with the Plaintiff.

5. On the evidence before this Court, I have not the slightest hesitation in concluding that there is indeed a serious question to be tried.

6. In the light of the manner in which the business dealings were concluded with the Plaintiff in particular, the use of a limited company and the attempt to shift the responsibility onto one another and bearing in mind also, the background of the 1st named Defendant, namely his ability to reside out of Hong Kong and his only known asset is the three factory premises which are the subject matter for a resumption order, there are valid reasons for the Plaintiff to be concerned as to whether the debt can be recovered.

7. Bearing in mind the suspicious way in which the business dealings were concluded with the Plaintiff by the factory and/or the limited company and the relationship of the 1st and the 2nd named Defendants as well as their son Mr Ng Yun Ming, in my view, there is also a real risk of dissipation of property. Therefore, prima facie an Mareva injunction against the assets of the two named Defendants is right and proper.

8. Mr Szeto on behalf of the 1st named Defendant makes submission on the basis of a fallback situation that the 1st named Defendant ought to be allowed to continue to run the business with a view to pay back the debt, and in any event, he requires adequate fund to seek medical treatments.

9. As I have observed in the course of counsel's argument, it is never the intention or the purpose of any Mareva injunction to prevent a Defendant from carrying on with his life or his business and hence provisions must always be made for living expenses and ordinary business expenses. Indeed such provisions had been made in the original order in the present case. Of course, whether the amounts so provided are adequate or otherwise is a matter that can be in dispute and the Court may have to vary such figures in appropriate circumstances.

10. At the moment, there is no evidence before me as to how much the Defendants require to carry on with their lives and/or the business. Insofar as the 2nd named Defendant is concerned, there is no suggestion of any intention to carry on any particular business as such.

11. But bearing in mind, the difficult health condition of the 1st named Defendant, I am prepared to vary the original order by increasing the weekly ordinary living expenses of the 1st named Defendant from $6,000 to $10,000. But any application for further variation must be properly made and supported by evidence.

12. On the application before me, the order I make is that the ex parte order of Gill DJ is to continue until trial or until further orders. The only variation I make is to the exception by increasing the ordinary living expenses of the 1st named Defendant from $6,000 to $10,000 per week.