BALSAM LTD. AND ANOTHER v. PHILIP O KAI SING AND OTHERS

HCMP 5422/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 5422 OF 1999

(On an intended appeal from HCA 12839/99)

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D E C I S I O N

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Rogers, J.A. :

This is an application for stay of execution of an order made by Findlay, J. on 1st September.

2. The history of the matter is that Findlay, J. granted ex parte a Mareva injunction against 4 Defendants on 9th August 1999. On 13th August, the Judge added to the Action, the 5th Defendant. I do not need to set out the facts of the case because they are adequately set out in the judgment below.

3. When the matter came to be argued inter partes before the Judge on 27th August, the Judge came to the conclusion that in respect of at least two of the branches of the cause of action on which the Plaintiffs had at first lodged this action, the Plaintiffs had failed to establish a good cause of action. I refer to page 5 of his written judgment on 1st September. First, there is the false expenses claim. He said that :-

"This is not a satisfactory allegation on which to base a cause of action, but, in any event, the only evidence that there is something wrong here is a belief expressed by Mr TP Chan, without any hard facts to back up that belief. Even Mr TP Chan himself does not suggest that he is able to sort out legitimate claims from any false ones. So, here there is no good cause of action against the first defendant, and certainly not against the other defendants, who are not even mentioned in this respect."

4. Pausing there, I entirely agree with what Findlay, J. said. It seems to me, that the evidence was deficient to say the least.

5. Again, in respect of the allegation of unpaid deliveries at $25,000 a month, the Judge came to the conclusion that :-

"Mr. T.P. Chan expresses his belief that the first defendant 'and all the other defendants have simply received payment and have not paid the money' to the plaintiffs. He says this, but produces no evidence at all to back this belief. This is not even, as one might expect, evidence that those to whom deliveries were made have been contacted, and say that they paid the defendants. So, quite apart from the difficulty of not identifying the injured plaintiff, this cause of action is not viable on this basis."

6. I have to say that having considered the evidence which founded this application in the first place, I entirely agree with the Judge that in all respects I consider that the evidence was to be euphemistic "sketchy". This is a matter where the Judge initially was persuaded ex parte to grant an injunction. But having reviewed the matter inter partes, he has come to the conclusion that it is not an appropriate case for an injunction. I am not disposed on what I have read to alter that conclusion at this stage nor to alter the effect of it.

7. A Mareva injunction is very serious matter indeed and it has strong repercussions. It has particular repercussions in this case where the 1st and 3rd Defendants are under investigation and have lost their means of livelihood. It would be a particularly serious matter in their case. In my view, if Mareva injunctions are sought in circumstances like that, it must be on clear evidence, backed up by sufficient documentary evidence that the Court can be satisfied that there is a proper claim. In my view, that does not exist here and I am not, at this stage, prepared to re-instate the injunction. I would also mention that it seems that something of a machine gun approach was taken in this case. The Plaintiff was not even prepared to continue any application against the 2nd and 4th Defendants against whom injunctions were granted at the beginning.

8. I therefore refuse this application.