CHINA EVERGRANDE GROUP (IN LIQUIDATION) v. HUI KA YAN AND OTHERS

HCMP 1080/2024

[2024] HKCFI 2040

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1080 OF 2024

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AND

HCA 551/2024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 551 OF 2024

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(Heard together)

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R U L I N G

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1.  The matters being dealt with by me this morning arise in the context of two connected actions, being HCMP 1080/2024 (“HCMP Action”) and HCA 551/2024 (“HCA Action”).

2.  Today mainly concerns the return date of two inter partes summonses issued in the HCMP Action, as regards only the 3^rd defendant to that action (“Madam Ding”) – though she is also the 5^th defendant to the HCA Action. The summonses respectively seek the continuation against Madam Ding of (1) the Chabra Mareva injunction granted by me on an ex parte basis on 12 July 2024, and (2) the proprietary and worldwide Mareva injunctions granted by me on an ex parte basis on 29 July 2024. The Plaintiff seeks the continuation of both orders until the final determination of these proceedings, or further order.

3.  It is relevant to note that orders in similar terms to the proprietary and worldwide Mareva injunctions were granted against Madam Ding by a Court in London on 30 July 2024 (“London Order”).

4.  On the materials provided to me, I am satisfied that Madam Ding has been served with the documents in the Hong Kong proceedings, and I think she has also been served with the documents leading to and including the London Order. But Madam Ding has yet to engage in the Hong Kong proceedings and is not represented.

5.  Mr Manzoni SC, who appears for the Plaintiff this morning as on the previous hearings, has informed me that solicitors in London who may potentially be instructed by Madam Ding in relation to the proceedings in London have contacted the solicitors acting for the Plaintiff in London. Amongst other things, those solicitors have requested a variation of the London Order to permit Madam Ding to spend a greater sum on legal fees than is currently permitted under the terms of that order, and to extend the date for the ancillary asset disclosure required by the London Order from its current date of within four days of service of the London Order on Madam Ding to a new date of 9 August 2024.

6.  I have seen correspondence between the sets of London solicitors, by which it appears that the Plaintiff is content to agree to a variation of the London order to permit Madam Ding to spend the sum of £150,000 up to 7 August 2024, and for the asset disclosure deadline to be extended to 4pm on 7 August 2024 – though I do not think that extension has yet been agreed, and there may yet be a variation application to be heard by the Court in London.

7.  I do not think I need to be concerned about the relevant figure permitted for expenditure on legal fees. But I am concerned about the potential or actual mismatch between the asset disclosure deadlines in the order made by me and the London Order. I think it would be unattractive for the Hong Kong order to continue to contain the deadline to provide essentially the same asset disclosure as is required under the London Order, on a date which is earlier than the Plaintiff is prepared to accept by way of a variation to the current terms of the London Order. In essence, I do not think that Madam Ding should be left in the position that she risks being held in contempt of court, or required to run that risk, notwithstanding that the Plaintiff has indicated that in practice it would unlikely complain if disclosure is not provided in Hong Kong by the deadline which the Plaintiff is content to agree in London.

8.  In those circumstances, whilst I am prepared – on the materials and in the exercise of my discretion – to continue the Chabra Mareva injunction and the proprietary and worldwide Mareva injunctions against Madam Ding until trial or further order, I will do so on the basis that I vary the deadline for the provision of asset disclosure under the Mareva injunction order to 7 August 2024.

9.  I am conscious that this may not be an entirely satisfactory way of bringing the appropriate deadlines in London and in Hong Kong into line, but it seems that matter can be revisited as appropriate depending on what occurs in London, and once Madam Ding has the opportunity properly to instruct solicitors in London and, it may be hoped, in Hong Kong.

10.  A further matter which arises this morning is in relation to the current confidentiality orders applicable to these proceedings. In the underlying winding up proceedings relating to the Plaintiff, HCCW 2020/2022 (“HCCW Action”), Linda Chan J has made orders on 20 March 2024 and 25 July 2024 cloaking the HCA Action and/or claims against the defendants to that action with confidentiality/anonymity. As I understand it, that was in the circumstances that the Plaintiff was continuing to make investigation into its claim which it had protected by issue of the writ in the HCA Action, and also against a concern as to risk of dissipation of assets (which risk I have found to exist in my making of the various injunction orders). I have also accordingly made confidentiality orders in the HCMP Action.

11.  Obviously, the confidentiality orders have been sought by the Plaintiff for the intended potential benefit ultimately of the creditors of the Plaintiff, but the Plaintiff has recognised that once the writ in the HCA Action has been served on the defendants, the need or justification for confidentiality no longer exists, and the confidentiality orders can be discontinued.

12.  Ordinarily, I would be minded to accede immediately to lifting the confidentiality orders as has been requested by the Plaintiff. But Mr Manzoni has properly reminded me that the 2^nd defendant in both the HCMP Action and HCA Action (“Mr Xia”) has previously expressed a concern about being identified, even in circumstances where an initial was used instead of his name in the heading or listing of proceedings. The concern was expressed in correspondence sent to me in response to my indication that I intended to publish (by uploading to the judiciary website) my recent decision made in the context of the worldwide Mareva injunction application proceedings involving Mr Xia – whose application to discharge the injunction against him will be heard by me on 2 October 2024. I did not think that the concerns expressed warranted not uploading the decision suitably anonymized, and it was indeed published.

13.  However, against that background, I have considered whether it would be appropriate now to lift the confidentiality order without first hearing from Mr Xia. Having adjourned the hearing briefly this morning so as to take the time to think about it, I do not think it is necessary to hear first from Mr Xia. The matter seems to me to be quite clear. Had there been no confidentiality order made in the first place, Mr Xia would almost certainly have had no proper basis to have requested the fact that he is made a defendant to the HCA Action (or the HCMP Action) to be cloaked by confidentiality or anonymity. Ordinarily business of the sort being litigated in these proceedings would be conducted in accordance with the usual principles of transparency and open justice. The HCCW Action is being conducted in the usual way. The confidentiality/anonymity orders were sought and obtained by the Plaintiff for reasons which the Plaintiff properly recognizes no longer pertain, following service of the writ in the HCA Action on the defendants to that action.

14.  The orders made in the HCCW Action were plainly intended to have limited duration, and were made expressly until further order of the Court. The Court not being only the Court as constituted by Linda Chan J, it is appropriate for me to make the orders I now think to be appropriate. I will therefore lift the confidentiality as regards the HCA Action (by making orders in and/or as regards to the HCA Action and HCCW Action) and in the HCMP Action.

15.  Lastly, on the materials now provided to me, I am satisfied that it is appropriate to grant leave to serve a concurrent writ in the HCA Action out of the jurisdiction on the 3^rd defendant to that action (“CFO Pan”), at the identified addressed in the People’s Republic of China or elsewhere in the People’s Republic of China.

16.  I make the appropriate orders in accordance with the above terms, which can be drawn up for my approval.