LEE YUK LIN v. YEUNG CHUN HUNG

DCMP 3981/2021

[2022] HKDC 307

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 3981 OF 2021

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REASONS FOR DECISION

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1.  Before me for substantive hearing conducted remotely via video link were:

(a)  the plaintiff’s summons dated 21 October 2021 to continue a Mareva injunction granted by this court on 20 October 2021 upon the plaintiff’s ex-parte application (“the ex-parte Injunction”); and

(b)  the defendant’s summons dated 28 December 2021 to discharge the ex-parte Injunction.

2.  By the ex-parte Injunction, the defendant was enjoined up to the return day from removing from Hong Kong, disposing of, dealing with or diminishing the value of any of his assets in Hong Kong up to the value of US$127,887 and in particular the Policy No B725001342 dated 28 July 2019 issued by AIA International Limited (“the AIA Policy” and “AIA”).

3.  At the hearing, the plaintiff accepted an undertaking by the defendant in lieu of injunction (a) not to dispose of or diminish the value of the AIA Policy save the payments referred to in (b), (b) to continue to cause monthly interest from the AIA Policy to be paid to the plaintiff, and (c) to provide to the plaintiff statements issued by AIA regarding the AIA Policy. Upon the acceptance of that undertaking, I made no order on the plaintiff’s said summons. Having heard the parties on costs, I also ordered that the costs of the plaintiff’s ex-parte application and the plaintiff’s said summons be in the cause with Legal Aid taxation of the plaintiff’s own costs.

4.  What was left in dispute was whether the ex-parte Injunction should be discharged.

5.  At the conclusion of the hearing, I dismissed the defendant’s summons with costs which I then summarily assessed. I said I would provide written reasons. These are my reasons.

The parties’ dispute

6.  The plaintiff is the mother of the defendant. She is now 66 years old. The defendant, who was born in 1989 and is now 33 years old, is her second son.

7.  The plaintiff was divorced in 1994. She received no maintenance from her ex-husband. They had three sons, all of whom used to live with the plaintiff. The plaintiff had been a civil servant and had retired in about 2010. After the retirement, she received a pension of around $3,410 a month and worked for a while as a casual worker earning limited income.

8.  According to the defendant, the plaintiff “has been a regular and heavy gambler for years [and] was declared bankrupt on 13 November 2003”[1] and his older brother Yeung Chun Chin (“The Older Brother ”) is also a heavy gambler.

9.  The third son Yeung Chun To (“the Deceased”) left for Australia on working holiday in around 2015. On 4 December 2017 and most unfortunately, the Deceased met with a fatal work accident.

10.  It turned out that the Deceased was a member of the Hostplus Superannuation Fund (“Hostplus”) under Policy No 103637796 and was entitled to certain death benefit payable to the dependants of the member or his legal personal representative. According to the plaintiff, she first learned in February 2019 that the death benefit amounted to AUD 228,577.07 (“the Death Benefit”).

11.  It is common ground that the defendant and his then girl friend (now wife) flew to Australia to take care of the Deceased’s funeral matters and they instructed an Australian law firm to claim the Death Benefit.

12.  According to the defendant’s case, the plaintiff and the Older Brother were not dependants of the Deceased and moreover, they voluntarily signed Section C of the claim form entitled “Intention not to be considered in the payment of the Death Benefit” both dated 5 February 2018 to waive their claim to the Death Benefit.

13.  The defendant then made a statutory declaration dated 13 July 2018 pursuant to Australia’s Statutory Declarations Act 1959 (“the Statutory Declaration”) declaring, among others, that the plaintiff was not the Deceased’s dependant and was financially supported by the Older Brother and by her own savings[2] , while he was the Deceased’s dependant having received from the Deceased a total of HK$22,319.69 on 9 occasions during the period from 2 June 2016 to 4 November 2017.

14.  In the meantime and on 14 May 2018, the plaintiff was granted the Letters of Administration of the Deceased’s estate by the Probate Registry. This was not mentioned in the Statutory Declaration. It was only declared there that the Deceased did not have a Will.

15.  The plaintiff’s case is that she was a dependant of the Deceased. In gist, she said that the Deceased regularly gave her HK$4,000 a month as living expenses before he went to Australia, and after he went to Australia, gave her various lump sums amounting to HK$30,000 odd each and at times monthly sums at HK$6,000 a month.

16.  Further, it is her case deposed in her 2^nd affirmation filed on 10 January 2022 that her signature and the Older Brother’s signature in the said Section C were forged.

17.  It is common ground that in mid February 2019, the plaintiff received a letter from Hostplus dated 6 February 2019 informing her, among others, that the Death Benefit amounting to AUD 228,577.07, that it would be paid as to 100% to the defendant, that Hostplus noted that the plaintiff did not wish to make a claim for the Death Benefit, and that the plaintiff has 28 days to disagree with the payment proposal.   This letter did not mention that the plaintiff had signed the said Section C.

18.  It is the plaintiff’s case that she then asked the defendant what had happened. The defendant then asked the plaintiff not to reply to the said letter and said that he had instructed lawyers to handle the matter, that the defendant would hold the Death Benefit on trust for her and would remit the full sum to her. Upon such assurance, the plaintiff only by various emails[3] to Hostplus (“the Emails”) made a number of enquiries, including as to whether they need to fly to Australia and whether they need to pay tax and such, but did not raise any objection with Hostplus concerning their payment proposal.

19.  On about 4 August 2019, the plaintiff was informed by the defendant that he had already received the Death Benefit and (without consulting the plaintiff or obtaining her agreement) had used the balance (netting the funeral and legal expenses) in the sum of USD 127,887 to purchase an investment policy with AIA, namely the AIA Policy. The defendant then gave the plaintiff an ATM card of a bank account held in the defendant’s name with Standard Chartered Bank (“D’s Bank Account”) with a balance of HK$45,000 (said to be balance of the Death Benefit netting all the expenses and the USD 127,887) and told the plaintiff that she would receive the income generated by the AIA Policy thought D’s Bank Account. For ease of reference, I will refer to the above-mentioned arrangement made by the defendant as “the Arrangement”. The plaintiff immediately asked the defendant to cancel the AIA Policy as it was still within the cooling-off period but the defendant refused.

20.  I note that the defendant did not dispute that he had never consulted the plaintiff or obtained her consent or agreement before he purchased the AIA Policy with the balance of the Death Benefit or made the Arrangement.

21.  It is common ground that the defendant is the sole owner of the AIA Policy, that he has sole and complete control over it in that he is entitled to all its income and that he can at will terminate the AIA Policy and withdraw the entire sum (subject to AIA’s conditions).

22.  On 7 August 2019, the plaintiff and the defendant had 3 telephone conversations, with the last one joined by the Older Brother[4] (“the Telephone Conversations”). In gist, the plaintiff demanded the defendant to return the Death Benefit, which the defendant adamantly refused. The defendant threatened to move out of the family home if the plaintiff took legal action, but added that he could be reached (presumably by phone).

23.  On 9 August 2019, by her former solicitors the plaintiff issued to the defendant a long but mildly worded letter before action (“the Letter-before-action”). I note that in the Letter-before-action, the plaintiff clearly stated that she had not signed any document waiving her entitlement to the Death Benefit. The plaintiff there also complained that the defendant has been keeping her in the dark relating to the claim for the Death Benefit. However, the defendant never responded to this letter. 

24.  It is not disputed that shortly after, the defendant moved out of the family home as he threatened. It is also common ground that the defendant has never informed the plaintiff his new address. It was in the defendant’s affirmation filed on 28 December 2021 after the ex-parte Injunction was granted that the defendant divulged his address.

25.  On 16 August 2019, the plaintiff’s former solicitors issued a letter to Hostplus seeking the documents provided by the defendant in his claim for the Death Benefit. Hostplus apparently did not respond. It was later upon the chasers issued by the plaintiff’s present solicitors that Hostplus responded in August 2021 citing the lack of consent by the defendant as reason not to provide the documents sought.

26.  It is emphasized by the defendant, and accepted by the plaintiff, that in about July to August 2020 the plaintiff suffered certain back injuries and the defendant attended her on occasions.

27.  The plaintiff said that she continued to receive the income from the AIA Policy through D’s Bank Account.

28.  It is the plaintiff’s case that she had been trying, and was hoping, to persuade the defendant to return the Death Benefit voluntarily to avert legal action. However, the defendant refused. 

29.  It is common ground that in October 2020, the defendant got married, but without informing or involving the plaintiff or inviting her to attend the wedding. The plaintiff took it as a sign that her relationship with the defendant had deteriorated to a serious extent.

30.  In April 2021, the plaintiff applied for Legal Aid and was later granted it. On 20 September 2021, the Director of Legal Aid approved aid for an application for a Mareva injunction which was eventually filed on 20 October 2021.

31.  The defendant’s evidence and allegation now are that both the plaintiff and the Older Brother were heavy gamblers and that both owed debts to moneylenders, and that “[he was] pretty sure that the Plaintiff intends to surrender the said insurance policy with AIA in order to receive the cash value for repayment of their various loans owed to money lenders”[5] .

32.  I note that this is a very different picture from that declared by the defendant in the Statutory Declaration that the plaintiff was financially supported by the Older Brother and her own personal savings.

33.  The plaintiff denies in her affirmation that she owed any debt to money lenders.

Discussion

34.  The defendant expressly accepted that there is a serious question to be tried regarding the plaintiff’s entitlement to the Death Benefit. By offering the undertaking, the defendant essentially also accepted that the balance of convenience favoured that the defendant be enjoined in the manner he has undertaken.

35.  The reasons put forth by the defendant for discharging the ex-parte Injunction were (a) that there was material non-disclosure, and (b) there was no urgency and/or risk of dissipation of assets by the defendant sufficient to justify an application ex-parte, instead of an application ex-parte on notice or even inter-partes.

36.  The defendant said there were 4 matters that were material but were not disclosed during the plaintiff’s ex-parte application.

37.  First, the defendant submitted that the plaintiff ought to have disclosed to the court that the defendant in the Telephone Conversations repeated told the plaintiff that the Death Benefit belonged to the Deceased and that he would not “touch”[6] it, implying that he had no intention of  keeping the Death Benefit for his own personal use.

38.  I do not accept there was material non-disclosure there.

39.  The plaintiff expressly stated in paragraph 31 of her affirmation filed on 20 October 2021 (“P’s 1^st Aff”):

“I believe the Defendant’s answers to my present claim, as indicated by him in the recordings of telephone conversation exhibited in “LYL-7”, are that he wanted to safekeep the Death Benefit, not to be touched by any of the family members as if Chun To were still alive, and all income generated from the Policy would be paid to me via the ATM card as housekeeping money from Chun To. However, as the Death Benefit belongs to me, my position is that the Defendant has no right to dictate how to use the same”[7] .

Thus and contrary to the defendant’s allegation of non-disclosure, in the ex-parte application the plaintiff had indeed disclosed the defendant’s alleged intention given in the Telephone Conversations.

40.  Moreover and seems to me importantly, the defendant’s repeated claim to the effect that the Death Benefit belonged to the Deceased and he would not “touch” it was a rather specious statement. By the Arrangement, the defendant in fact has already grabbed the sole beneficial ownership of the Death Benefit for himself to the exclusion of the plaintiff in her lifetime (subject only to him voluntarily giving the plaintiff its income at his pleasure); and later upon the demise of the plaintiff, to the exclusion of her estate, and at which time the Death Benefit would be the defendant’s to keep.

41.  In any case, the defendant’s utterance of his own intention was but a self-serving statement, which as such has always been considered to carry little weight as a piece of evidence in his favour, and I therefore would not have considered such self-serving statement a material in his favour in assessing whether there would have been a risk to dissipate.

42.  Second, it was said that the plaintiff failed to disclose that she continued to receive monthly income from the AIA Policy. Again, that was clearly factually incorrect because, as mentioned, the plaintiff did disclose the same with details in paragraph 27 of P’s 1^st Aff.

43.  Third, it was complained that the plaintiff failed to draw “sufficient attention” to the court of (a) Hostplus’ letter dated 6 February 2019 in which Hostplus wrote: “The Trustee also notes that Ms Yuk Lin Lee [the plaintiff] and Mr Ming Yeung [the ex-husband of the plaintiff] wishes (sic) not to claim for the benefit”, and (b) the Emails. However and indeed, in paragraph 13 of P’s 1^st Aff, she actually quoted the sentence in Hostplus’ letter which is quoted above, and said that it was blatantly untrue. She then deposed to how she and the Older Brother made various enquiries by the Emails which were then exhibited as “LYL-5”. She then deposed to the oral assurance made by the defendant to her as set out in paragraph 18 above. In paragraph 16 of P’s Aff, she then deposed that it was in reliance of the said assurance that she did not reply to Hostplus’ said letter or made claim to the Death Benefit in her own name. As the plaintiff has so deposed to these matters, I fail to understand what further “sufficient attention” she was allegedly required to draw to the court. There is clearly no substance or merits to this complaint. 

44.  Fourth and lastly, the defendant deposed to the fact that he had attended the plaintiff on occasions when she was injured in July or August 2020 and said that he was reachable by phone. The defendant then submitted that the plaintiff ought to have disclosed these matters, failing which it was material non-disclosure. In light of the matters discussed below concerning the risk of dissipation, I do not consider the fact that the defendant was reachable by phone on those occasions so material such that the failure to mention them would amount to material non-disclosure.

45.  In the premises, I do not find the plaintiff guilty of material non-disclosure.

46.  Next, the defendant argued that the plaintiff ought not have applied for the Mareva injunction ex-parte and the plaintiff should have applied for it ex-parte on notice or inter-partes. The thrust of Ms Cheung’s argument was that there was no urgency justifying an application ex-parte, citing and relying heavily on SCC Venture VI Holdco G, Ltd v Zhao Chang Peng [2018] HKCFI 819, Slik Hong Kong Co Ltd v Gerald Rhoslyn HCA 1424/2005 (unrep, 25 July 2005, Lam J (as the learned PJ then was)). Notably, these two cases concerned an application for an injunction of another nature other than a Mareva injunction.

47.  While regarding applications for injunctions generally (indeed regarding any application), it is well established and trite that natural justice requires all interested parties to be heard save in most exceptional circumstances and therefore any party who comes to court applying for the same ex-parte rather than inter-partes would be required to demonstrate such exceptional circumstances. However, it is equally trite that in the context of a Mareva injunction restraining the disposal of assets, the main feature and exceptional circumstance required to be demonstrated to the satisfaction of the court is that there is a real risk of dissipation of assets by the defendant which will render the plaintiff’s judgment of no effect. If such is demonstrated and “If a Mareva injunction is to be efficacious it must be swift and secret, in the sense that the injunction must always be granted ex parte, without notice to the defendant” (§29/1/58 Hong Kong Civil Procedure 2022). Therefore and with respect, I think Ms Cheung’s heavy reliance on “lack of urgency” simpliciter as a reason that the plaintiff’s application for a Mareva injunction should not have been made ex-parte was misplaced. Regarding urgency, and therefore the timing of such an application and whether there was, and if so the nature and circumstances of, any delay would be considered by the court in the overall circumstances of each case, with the well-established principle that delay per se would not necessarily bar the granting of a Mareva injunction.

48.  The focus therefore is whether it has been demonstrated that there is a real risk of dissipation of assets. To that I will now turn.

49.  The principles guiding the court in assessing whether there are risks of dissipation of assets justifying the grant of a Mareva injunction are well established and have been quite comprehensively reviewed by the Court of Appeal in Convoy Collateral Limited v. Cho Kwai Chee [2020] HKCA 537. They need not be repeated here, albeit I am bearing them in mind. As most recently been aptly put by G Lam JA (sitting as an additional CFI judge): “This assessment is not an exact science but is based on an evaluative judgment by the court taking a holistic view of the circumstances of the case”[8] .

50.  For the following reasons, I am satisfied that there is a real risk of dissipation of assets by the defendant in order to keep the Death Benefit (or its equivalent) out of the reach of the plaintiff.

51.  It is evident from the contents of the Telephone Conversations and the affirmation evidence filed by the defendant that he held a strong subjective belief (for whatever reasons, and whether those reasons were valid or not) that the Death Benefit had to be kept out of the reach and control of the plaintiff. He claimed that otherwise it would have been squandered by the plaintiff (or together with the Older Brother) in a jiffy.

52.  Given the family circumstances as I have outlined above, I find it hard to believe that the Deceased had not financially supported the plaintiff at all, which was what the defendant declared in the Statutory Declaration. With the defendant’s present affirmation evidence that the plaintiff and the Older Brother were and are heavy gamblers, and the plaintiff was declared bankrupt in 2003 and that both owe debts to money lenders, I find it hard to believe that what the defendant declared in the Statutory Declaration that the plaintiff was financially supported by the Older Brother and her own personal savings was entirely truthful. Given the plaintiff’s contemporaneous and consistent demands in the Telephone Conversations and then by the Letter-before-action for the return of the Death Benefit, I would think there is certain degree of credibility that she did not raise objection to the payment proposal in the Hostplus’ letter dated 6 February 2019 because she was assured by the defendant that he would give her the Death Benefit after he received the same. In other words, there seems to me to be some ring of truth in the plaintiff’s allegation that the defendant was then less than honest to her. From these I take the view that when dealing with the Death Benefit, there is a real likelihood that the defendant was prepared to make a false declaration and be dishonest to the plaintiff in order to keep the Death Benefit out of her reach and control.

53.  As have already mentioned, I find the defendant’s consistent claim that he would not “touch” the Death Benefit specious.

54.  It seems to me that the Arrangement was one that the defendant had secretly planned for a while, one that purposefully kept the money in the sole ownership and complete control and discretion of the defendant, and one that ensured the plaintiff has no say or control whatsoever. The defendant never consulted the plaintiff beforehand. He essentially forced a fait accompli on the plaintiff. It might have been well intended, but the subjective intention (even if a good one) did not detract from the nature and set-up of the scheme.

55.  I accept there is some credibility in the plaintiff’s case that the defendant has been keeping her in the dark and has not provided her with accurate information or documentations regarding the Death Benefit.

56.  When the plaintiff mentioned in the Telephone Conversations that she might engage a lawyer to seek the return of the Death Benefit, the defendant threatened to move out from the family home. Days later, when he received the Letter-before-action, he moved out without leaving his new address to the plaintiff. Despite that being a solicitors’ letter, he completely ignored it and did not respond. Though he later attended the plaintiff when she was injured, the defendant did not leave his residential address with the plaintiff. He also did not involve the plaintiff in his wedding nor invited her. The inference I draw is that he was prepared to evade the plaintiff and to evade enforcement actions to be taken by the plaintiff.

57.  With the defendant’s strong belief and insistence that the plaintiff be kept out of reach of the Death Benefit, his apparent readiness to forgo probity to achieve his ends, his specious claim, the nature and thoughtfulness of the Arrangement and his said evasiveness, I was at the time of the ex-parte application, and am now, satisfied that the plaintiff has demonstrated that there was a real risk of dissipation. In particular, I am satisfied that had he been notified of the application for the Mareva injunction, there would have been a real risk that he might cash out the AIA Policy and dissipated the assets so as to keep them out of the plaintiff’s reach.

58.  I do not agree with Ms Cheung that the fact that the defendant kept paying the income from the AIA Policy into D’s Bank Account for the plaintiff to withdraw would show that he had no intention to dissipate assets. As the Arrangement was one he devised and imposed upon the plaintiff, he of course would be content to continue with it. Rather, the real question is how he would react when he knew that legal action has actually been commenced and an application for a Mareva injunction was being made. Looking at the matter holistically in the circumstances, I come to my assessment in the preceding paragraph.

59.  Likewise, the fact that defendant had been reachable by phone and had attended the plaintiff when she was injured was, in my view, not something weighing in the defendant’s favour. Clearly, by leaving the phone number but without divulging his new address, the defendant retained the control of whether to take the plaintiff’s phone call or to reject it, of whether to meet with the plaintiff or to evade her altogether. In fact, such stance was consistent with his conduct of imposing what he would like done on the plaintiff with complete and sole control retained by him.

60.  Lastly, I will deal with the matter of the timing of the plaintiff’s ex-parte application and whether there was delay. The plaintiff only applied for a Mareva injunction in October 2021, which was slightly more than 2 years after the issuance of the Letter-before-action. In the particular circumstances of this case, it seems to me that so long as the plaintiff was willing to submit herself to the Arrangement, there seemed to be no risk of dissipation in that there was no need for the defendant to dissipate. Rather, the pertinent question, as said, is what the defendant’s reaction would have been if the plaintiff decided to enforce her right by a legal action. On that, I have concluded as above said. I therefore do not regard the time lapsed as of particular relevance or importance.

61.  For the above reasons, I found no basis or merits to discharge the ex-parte Injunction and dismissed the defendant’s summons with costs.