XCHRX RICHCOMBE INVESTMENT LTD v. TIN FUNG & ANOTHER

HCA 18283/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 18283 OF 1999

____________________

J U D G M E N T

____________________

1. This is an application for a Mareva injunction against the Defendants to prevent disposal of their assets until trial, the total value of which is estimated to be at least US$66 million or HK$508 million. The US$66 million is made up of the following two sums :

(1) US$21,161,998 ("the US$21.16 million") being the total of four remittances ("the four remittances") for the amounts and made on the dates as follows :

(a) US$3,800,000 on 9 November 1992

(b) US$3,360,000 on 29 March 1993

(c) US$5,000,000 on 26 November 1993

(d) US$9,000,000 on 6 December 1993

and

(2) US$45 million being the estimated profits allegedly earned by the defendants

2. The plaintiff first applied for and was granted an ex parte Mareva injunction by Deputy Judge Muttrie on 14 December 2000. It was only on 14 December 2000 that the application was made despite the fact that the writ was issued in November 1999. The matters of complaint relate to events some of which had occurred in 1992, 1993 and 1994. An undertaking was given to the ex parte judge that the plaintiff would fortify its undertaking in damages by providing a written bank guarantee for HK$5 million on or before 21 December 2000. This the plaintiff failed to do and hence there was a clear breach of the undertaking given to the court. On the return date on 22 December 2000 and on the defendants' application, I discharged the ex parte order.

3. In the afternoon of the same day, 22 December 2000, the plaintiff made a fresh application for a Mareva injunction ex parte on notice before Suffiad J. This was effectively an inter partes hearing as counsel for the defendants appeared and argued against the making of the order. At this hearing, a cashier's order for HK$5 million was produced to Suffiad J so that this could be used as fortification instead of the written guarantee. After hearing arguments from both counsel, Suffiad J dismissed the application he being of the view that on the evidence there was no real risk of dissipation of assets.

4. This is yet another fresh application for a Mareva injunction before me.

5. The plaintiff is a BVI company incorporated on 11 May 1993. Yin Jiang ("Yin") and his wife are the only directors and shareholders of the plaintiff. Yin has made the affirmations on behalf of the plaintiff in support of this application. According to Yin, he was since the mid 1980s employed as a financial controller by a state-owned business entity incorporated in the Mainland, namely China National Chemicals Import and Export Corporation ("Sinochem"). It was dealing with foreign exchange trading commodities and forex and institutional investments in the international financial market. Yin was also the deputy general manager of another state-owned business incorporated in the Mainland, namely China International United Petroleum and Chemicals Company Limited ("Unipec"). From about 1988 to 1991 Sinochem and Unipec had been involved in forex trading in the Mainland. Yin suggested to Jiang Yun Long ("Jiang") the vice-president of Sinochem that they should conduct forex dealings in Hong Kong and for that reason Sinochem and Unipec decided to have a presence in Hong Kong. According to Yin, they used Senior Market Limited ("SMHK") which was a company incorporated in Hong Kong in 1988. An agreement was reached whereby SMHK would be used as a vehicle for the forex dealings to be engaged on behalf of Sinochem and Unipec. Another party or organisation that features in these proceedings is the Nanjing Party. I have been told by Mr Sarony SC, for the plaintiff, that this was the Nanjing Military Intelligence Department, which is part of the People's Liberation Army, and which was playing a substantial commercial role. The 1st defendant accepts that Sinochem and the Nanjing Party played central roles in the transactions in this case. The money used and owned by them effectively was money belonging to the state of the People's Republic of China.

6. It is the plaintiff's case that substantial forex dealings were undertaken in Hong Kong using SMHK as the vehicle. Yin was the person representing the Sinochem and Unipec camp and the 1st defendant was representing the Nanjing Party camp. The 1st defendant, however, says that he, representing the Nanjing Party, set up SHMK in Hong Kong in 1988.

7. The 1st defendant accepts that substantial forex dealings were conducted in Hong Kong through SMHK and that SMHK was permitted to use the credit line that Sinochem had with Morgan Stanley and other banks. According to Yin, he came to Hong Kong in 1993 and he continued to trade with Morgan Stanley using SMHK as a vehicle. SMHK itself had no substantial assets and Yin claims that funding for the forex dealings engaged by SMHK came from Sinochem. He came to work in Hong Kong as instructed by Jiang of Sinochem. He was responsible for representing Sinochem and Unipec in Hong Kong in the forex dealings. Yin and his wife took up shares in SMHK as new shares were allotted in 1993. The shareholders of SMHK became as to 50%, Yin and his wife (3,000 and 2,000 shares, respectively) and as to other 50% shareholding, the 1st defendant and his wife, the 2nd defendant (3,000 and 2,000 shares, respectively). There is no dispute that Yin and his wife held the 50% shareholding in SMHK on behalf of Sinochem (which includes Unipec) and that the 1st and 2nd defendants held the other 50% shareholding on behalf of the Nanjing Party.

8. As part of the corporate structure, Yin states that he set up Senior Market Holdings Limited ("SM Holdings") a BVI company which was incorporated on 18 August 1993. The purpose of this was to make SM Holdings the holding company of a number of companies including SMHK. Yin also states (and this is disputed) that when he arrived in Hong Kong he decided to set up the plaintiff whose task was to become the holding company of SM Holdings. As I have said, the plaintiff is a BVI company which was incorporated on 11 May 1993.

9. The shares of SM Holdings were held as to 50% by Yin and his wife and as to the other 50% by the 1st and 2nd defendants. All four of them were directors. Yin states in para 15 of his 1st affirmation:

"The beneficial ownership of Senior Market Holdings was and is vested in the Plaintiff being the mother company which is directly accountable to Sinochem and Unipec as a trustee."

So, the plaintiff's case is that all the shares held by the shareholders of SM Holdings were held in trust for the plaintiff. This is a matter of substantial dispute between the parties.

10. The plaintiff relies on a declaration of trust dated 18 August 1993 (exhibit "YJ-8A") signed by the 1st defendant confirming that he and his wife held their shares in SM Holdings in trust for the plaintiff. The plaintiff also relies on the annual returns of Dragon Trend Development Limited and Ling Shun Development Limited, subsidiaries of SM Holdings, to show that one share in each of those companies was transferred to the plaintiff in 1999. However, as has been pointed out by Mr Chan, SC for the defendants, those annual returns were signed by Yin in 2000 and there is no supporting evidence to show that the transfers were done with the knowledge of the 1st or 2nd defendants.

11. The defendants say that the declaration of trust is a false document. The 1st defendant also says that he did not even know of the plaintiff until the commencement of this action. He points to various curious features of the declaration of trust including the fact that it is typed on the letterhead of SMHK, that his wife never signed this document and that it was not signed in the presence of a solicitor. This was despite the fact that on the very same day, 18 August 1993, they all attended the offices of a firm of solicitors to sign the documents in connection with SM Holdings. The 1st defendant states that he had provided blank letterheads of SMHK bearing his signature to Yin in the past to facilitate the operation of SMHK and he suggests, therefore, that Yin had used one of the blank letterheads to fill in the particulars contained in the declaration of trust. The 1st defendant points out that Yin's wife had also provided similar blank papers bearing her signature to the 1st defendant for the same reason of facilitating the operation of SMHK. These have been produced as exhibit "TF-8".

12. A further point is also made as to one of the disputed documents bearing the signature of the 1st defendant, namely exhibit "YJ-2A", the alleged agreement dated 30 August 1991. The point made is that the address on the letterhead of this document is a North Point address in King's Road. As at the date of the alleged agreement, 30 August 1991, SMHK had not moved to the North Point address. It was only after 1992 that the removal was made to that address and hence the point is made that it was impossible that an agreement could have been signed on 30 August 1991 on a letterhead bearing the North Point Address. These are formidable points. It is clear that there are substantial disputes of fact on the evidence. The case should not, of course, be tried on affidavit evidence alone. These are matters that can only be resolved at trial with the benefit of discovery including interrogatories, and cross-examination.

13. As part of the background, Yin was dismissed by Sinochem in 1994. Notwithstanding this, the evidence shows that Sinochem relied on him to deal on its behalf with negotiations conducted with Lehman Brothers in respect of a claim by Lehman Brothers against Sinochem and Unipec for unauthorised dealings carried out by Jiang resulting in substantial loss to Sinochem and Unipec. Yin was successful in negotiating a settlement with Lehman Brothers in 1996.

14. The plaintiff's claim is in respect of fraudulent breach of trust against the 1st and 2nd defendants. There is a specific claim for the return of the said sum of US$21.16 million being the four remittances totalling that sum together with estimated profits said to total US$45 million which it is alleged that the defendants have converted to their use. It is also pleaded in the amended statement of claim that SM Holdings purchased 25% shareholding of WangFujien Hotel in Beijing for US$46 million and it is alleged that the defendants have wrongfully converted the said shareholding to their own use by attempting to sell the said 25% shareholding to another party in about September 1994. It is also pleaded that the plaintiff purchased in or around 1993 two floors of Goumou Plaza in Fujian Province for US$3.3 million. It is alleged that the defendants wrongfully pledged the said floors of Goumou Plaza for US$2.15 million and have retained the money for their own use. There is also a claim for the said sum of US$2.15 million as well as for an account of what is due to the plaintiff from the defendants in respect of monies received by them from 1996 onwards and payment of sums found due on the taking of such account. The plaintiff's claims are strenuously denied and the parties have been actively engaged in this litigation for well over a year already.

15. Although it is pleaded in para 5 of the amended statement of claim that the US$21.16 million was injected by the plaintiff into SM Holdings, the evidence does not support this. It is pertinent to observe that as at the date of two of the four remittances, the plaintiff was not even incorporated. And the evidence does not show that the remittances were ever made to the defendants. It is also denied by the defendants that the 25% shareholding in the said WangFujien Hotel were converted by them. According to the 1st defendant, SMHK acquired the 25% shareholding in the said hotel on or about 8 April 1993 and such shares are still owned by SMHK. As for the said two floors of Goumou Plaza, it is denied that the plaintiff purchased the same and there is no evidence to support the assertion that the plaintiff purchased the same in 1993. It is also denied that the said floors were pledged and that US$2.15 million was obtained. The defendants' case is that in about March 1993, SMHK used one of the four remittances in the sum of US$3.36 million to purchase the said two floors of Goumou Plaza from Fujian Min Jia Real Estate Co Ltd, the vendor. It is denied that there was a pledge of the said two floors or that the defendants or SMHK have received the said sum of US$2.15 million.

16. The evidence shows that on 24 March 1997 a meeting was held with two state officials, Yin and the 1st defendant where the important document described as the 'summing up' account of Yin's work in SMHK and SM Holdings as well as related problems was signed by those attending, (exhibit "YL-12"). There is a dispute as to the circumstances under which exhibit "YL-12" was signed by the 1st defendant and whether or not the 1st defendant knew about the documents referred to therein. However, whatever the position may have been before 1997, by the 'summing up' account Yin acknowledged, inter alia, that during the period of cooperation the 1st defendant had represented the Nanjing Party whereas Yin had represented Sinochem and Unipec, that the start up capital which Sinochem had transferred to SMHK had been paid back to Sinochem and Unipec, that the remaining assets of SMHK were profits earned from its operations, that SMHK and SM Holdings were companies actually owned and administered by the Nanjing Party. There was effectively a take over by the Nanjing Party and this was acknowledged by Yin. It was further stated that the profits made by Yin through Sinochem or Unipec, SMHK or SM Holdings were to be handed over to the Nanjing Party. These included the amounts set out therein which made up the US$21.16 million. It was also stated that Yin was an officer assigned by the Nanjing Party to work overseas and to be responsible to the Nanjing Party for what he does through SM Holdings.

17. So, whatever the position might have been before 1997, on 24 March 1997 it was agreed by those attending including Yin that the ultimate beneficiary was the Nanjing Party. This was acknowledged by Yin. It is pertinent to note that nowhere in the 'summing up' account is the plaintiff ever mentioned.

18. In those circumstances, it has been forcefully submitted by Mr Chan, for the defendants, that the plaintiff cannot be the proper plaintiff in this action for any relief against the defendants. If anyone has a cause of action, it is the ultimate beneficiary, namely the Nanjing Party. There is no evidence to show that the Nanjing Party has ever authorized the plaintiff to bring these proceedings.

19. In the light of the admissions made by Yin in the 'summing up' account dated 24 March 1997, it is difficult to see how the plaintiff can have a good arguable case against the defendants for the purpose of seeking a Mareva injunction.

20. There is a further and fundamental point raised against the plaintiff. Yin states that the beneficial ownership of SM Holdings was vested in the plaintiff being the mother company which is directly accountable to Sinochem and Unipec as a trustee (para 15 of Yin's 1st affirmation). The plaintiff is a limited company incorporated in BVI with Yin and his wife as the only shareholders and directors. SM Holdings is said to be the wholly owned subsidiary of the plaintiff. SMHK is in turn said to be the wholly owned subsidiary of SM Holdings.

21. It is trite law that a shareholder of a company has no rights over the assets of the company. His rights are to the shares of the company and not to the assets of the company. He owns the shares, not the assets. The assets belong to the company. This distinction is of fundamental importance and a matter of basic company law.

22. This distinction was emphasized by Clough JA in the Court of Appeal in Oriental Peer Co Ltd v Terrian Ltd [1987] 2 HKC 61 @ 72 when he said :

"The subject matter of the declaration sought was the beneficial interest in an undivided half-share of the Redhill site which is the property of one or other of the applicants. Terrian, as a shareholder of Polly Jack, has no legal or equitable interest whatsoever in the property (if any) of that company.

This is trite law but it is too often overlooked and, as Lord Russell of Killowen observed in EBM Co Ltd v Dominion Bank [1937] 3 All ER 555 (PC) at p. 564 it is 'of supreme importance that the distinction should be clearly marked, observed and maintained between an incorporated company's legal entity and its actions, assets, rights and liabilities on the one hand, and the individual shareholders and their actions, assets, rights and liabilities on the other hand'.

As the English Court of Appeal emphasized in Prudential Assurance Co Ltd v Newman Industries (No 2) Ltd [1982] Ch 204, 223A-B, shares are merely a right of participation in the company on the terms of the articles of association. The same point was made by Lord Buckmaster in Macaura v Northern Assurance Co Ltd [1925] AC 619, 626 where he indicated that the shareholder has no right to any item of the company's property but is entitled to a share in the profits while the company continues to carry on business and a share in the distribution of the surplus assets when the company is wound up."

23. On the evidence, none of the four remittances came from the plaintiff. One of the four remittances in the sum of about US$3.36 million was made to Fujian Min Jia Real Estate Co Ltd, the vendor of the said two floors of Goumou Plaza in Fujian Province. According to the 1st defendant, Morgan Stanley was instructed to transfer the said sum from SMHK's account at Morgan Stanley to the account of the said vendor. The beneficiary of the other three remittances was either SMHK or SM Holdings.

24. If there was any misuse of the US$21.16 million, then these were wrongs done to the companies. If wrongs are done to a company, the company is the only one who can sue in respect of those wrongs, save in the case of a derivative action brought by minority shareholders which is not the situation here. Also, it must be borne in mind that a subsidiary company is a separate legal entity from the parent company. (B.I.S. Consultants Ltd v Dao Heng Bank Ltd [1989] 1 HKLR 446 @ 448 H-J) That being so, I fail to see how the plaintiff, described as the mother company, can have a good arguable cause of action against the defendants.

25. In support of the plaintiff's causes of action against the defendants, Mr Sarony relied on the following written submission :

"Where someone holds shares in a parent company on trust for a beneficiary and the trustee has power over the assets of a wholly owned subsidiary of the parent company, if the trustee conducts the affairs of the subsidiary in a manner so as to prejudice the assets of the subsidiary by so doing he automatically damages the assets in the parent company. By so doing, he acts in a manner inimical to the value of the shares in the parent company, thereby rendering him in breach of the fiduciary duty that he owes to the beneficiary not to do anything which would diminish the worth of the assets held on trust."

26. It was in effect argued that as the defendants held shares in the parent company, namely SM Holdings, on trust for a beneficiary, namely the plaintiff, and the trustees, i.e. the defendants, have power over the assets of a wholly owned subsidiary of the parent company, i.e. the assets of SMHK, in a manner so as to prejudice the assets of the said subsidiary SMHK, by so doing they automatically damage the assets in the parent company SM Holdings. By so doing, it is argued, that the defendants act in a manner inimical to the value of the shares in the parent company SM Holdings thereby rendering them in breach of the fiduciary duty that they owe to the beneficiary, namely the plaintiff, not to do anything which would diminish the worth of the assets held on trust.

27. I cannot accept this submission. First, this is not the plaintiff's case as pleaded. Secondly, it is also not the plaintiff's case on the affirmation evidence. According to para 15 of Yin's 1st affirmation, the beneficial ownership of SM Holdings was and is vested in the plaintiff being the mother company which is directly accountable to Sinochem and Unipec as trustee. According to Yin, therefore, the plaintiff was and is merely a trustee on behalf of Sinochem and Unipec. The plaintiff is not the ultimate beneficiary and is not the beneficial owner. Thirdly, in any event, it is wrong, in my view, to suggest that the beneficiary can be placed in any better position than the registered holder of the shares in the subsidiary. Even assuming that the plaintiff is the beneficiary, it can acquire no better rights than if it were the registered holder of the shares in the subsidiary, namely SMHK.

28. It was held in Butt v Kelson and others [1952] 1 Ch 197 that beneficiaries of shares were not entitled to call on trustee directors to use their powers as though such powers were held on trust for the beneficiaries. It was held that the beneficiaries were entitled to be treated as though they were the registered shareholders. As such, they could not compel the trustees, who were also the directors, to disclose company documents.

29. The fundamental distinction between a company's legal entity and its assets rights and liabilities on the one hand and the individual shareholders and their actions, assets, rights and liabilities on the other hand must not be overlooked.

30. As a first hurdle, the plaintiff must show a good arguable case for the purpose of this application. I am not satisfied that the plaintiff has a good arguable case against the defendants. The defendants have, in my judgment, a good arguable defence and a Mareva injunction should not be granted. In Bank Mellat v Nikpour [1985] FSR 87, Lord Denning MR said at 90 :

"It seems to me that although there might be an arguable case for the plaintiff bank on the merits, equally, on the material which has been put before us, there might be a good arguable defence. So much so that it is not a case in which a Mareva injunction should granted."

31. It has also been pointed out to me by Mr Chan that the amended statement of claim and the supporting affirmations of Yin contained serious and material inaccuracies which had the effect of misleading the court at the ex parte stage. At that stage, the ex parte judge did not, of course, have the benefit of argument from the defendants.

32. It must be remembered that a Mareva injunction is an exceptional order which is highly intrusive in nature affecting as it does the assets of a defendant. It has been described as one of the law's two "nuclear weapons", the other being the Anton Piller order. (Bank Mellat v Nikpour [1985] FSR 87 @ 92)

33. There is a stringent duty on the part of the applicant and its legal advisers to make the fullest and frankest disclosure of all relevant matters when applying for such an order ex parte. As Mortimer JA said in Fenn Kar Bak Lily v Goh Kim Lay and another [1995] 3 HKC 313 @ 316 :

"A Mareva injunction is a draconian order which if made unjustly can cause incalculable damage to defendants. The order is one which should be regarded as unusual. It is designed for the preservation of assets in good commercial claims. As this court said in Tamco Electrical & Electronics (Hong Kong) Ltd v Ng Chun Fai Stephen [1994] 1 HKLR 178 at 191 line 41: '...... these wholly exceptional orders were devised for use in rare and extreme cases'.

As the application is ex parte, the duty on the party applying and its legal advisers is stringent."

34. It is plain that the duty is to make the fullest and frankest disclosure of all relevant matters including those against application. It is not sufficient to merely exhibit voluminous exhibits and expect the ex parte judge to consider the voluminous exhibits in detail. It is clearly the duty of the legal advisers to point out to the judge hearing the application any points which are to their client's disadvantage. The applicant has the responsibility of ensuring that all relevant points are presented clearly and distinctly, (Standard Chartered Securities Ltd v Lai Arthur and others [1993] 1 HKC 375 @ 381).

35. Where the documents placed before the court contained serious and material errors and inaccuracies which could have the effect of misleading the court, those matters must be drawn to the court's attention as at the ex parte hearing the court rightly relies on the applicant and its legal advisers to make the fullest and frankest disclosure. It should be observed that this was not the type of case where the plaintiff rushed to court urgently even before a writ was issued to apply for an ex parte Mareva injunction. The proceedings had been on foot for over a year with the parties being engaged in hostile litigation for that period before the Mareva injunction was applied for. There was plenty of time to formulate and to present the case clearly and distinctly.

36. Unfortunately, the documents placed before the ex parte judge contained material and serious inaccuracies. The most serious was the allegation that the defendants were directors of the plaintiff when the evidence simply did not support this. In para 22 of Yin's 1st affirmation, he states that :

"The Defendants in breach of their duties as trustees, directors as well as administrators towards the plaintiff failed to account to the plaintiff........................."

It was untrue to the knowledge of Yin to affirm that the defendants were directors of the plaintiff. In the context of this case, this was very serious as the plaintiff is seeking an account from the defendants. If the defendants were in fact directors of the plaintiff, then unquestionably they owed fiduciary duties to the plaintiff and were accountable to the plaintiff. But in fact they were never directors of the plaintiff and what Yin affirmed in para 22 of his 1st affirmation could well have misled the ex parte judge. Also, this allegation as regards the 2nd defendant was repeated in the 4th affirmation of Yin made after the ex parte order in para 9 where he states :

"......... the 2nd defendant is still a director and an accountant of the plaintiff."

37. A further material inaccuracy was to allege that the 2nd defendant was employed as the accountant/auditor of the plaintiff (para 3(b) of the amendment statement of claim). The 2nd defendant denies that she was the accountant of the plaintiff and that is in issue. But she was certainly never the auditor of the plaintiff.

38. Another material inaccuracy is contained in para 28 of Yin's 1st affirmation where he states that the 25% shareholding of the said WangFujien Hotel was held by the plaintiff. The 25% shareholding in the said hotel was never held by the plaintiff and there is no evidence to show that it was ever so held. This is also contrary to the plaintiff's pleaded case in para 12 of the amendment statement of claim where it is pleaded that SM Holdings purchased and became the owner of the said 25% shareholding.

39. There is also another material inaccuracy in para 17 of the amendment statement of claim where it is pleaded that the plaintiff in or around 1993 purchased the said two floors of Goumou Plaza in Fujian Province. On the evidence, the plaintiff was never the purchaser of the said two floors.

40. In my view, there was a breach of the stringent duty to make the fullest and frankest disclosure of all relevant matters to the ex parte judge. That would have been sufficient reason in itself to discharge the ex parte order.

41. I turn to the risk of dissipation of assets. It is not enough to merely assert that there is such a risk. The plaintiff must demonstrate by solid evidence that there is a real risk of dissipation of assets. It must be remembered that some of the matters of complaint took place as early as 1992. The four remittances were made in 1992 and 1993. Also, the plaintiff relies on an alleged fraudulent attempt in 1994 on the part of the defendants to sell the 25% shareholding of the said hotel to a third party as well as an alleged fraudulent pledge by the 1st defendant of the said two floors of Goumou Plaza in 1993.

42. The plaintiff also says that there is a growing risk that assets of the defendants will be dissipated or disposed of because the defendants are the subject of investigation following some business blunder in the Mainland. Yin has stated in paras 7 and 8 of his 4th affirmation that in March 2000 he was informed that the 1st defendant was under investigation on matters of his misconduct including theft of state property, financial irregularities and fraud. He has also stated that the 1st defendant was aware since about mid October 2000 that he was the subject of detailed investigation in the Mainland. On that evidence, the plaintiff asks the court to infer that there is a real risk of dissipation of assets by the defendants. The defendants strenuously deny the allegations of the plaintiff and has dealt with the allegations of the plaintiff in the affirmations made by the defendants. The 1st defendant further states that it is true that Yin has made unfounded complaints against him but that the authorities after investigation did not see fit to accept such complaints or to commence any action against him or his wife.

43. As I have said, the parties have been engaged in hostile litigation in these proceedings since the writ was issued in November 1999. Some of the matters of complaint took place years ago as early as 1992, 1993 and 1994 well before the issue of the writ. Yet, the first time the plaintiff applied for a Mareva injunction was only on 14 December 2000. When the writ was issued in November 1999 there could not have been any apprehension of a real risk on the part of the plaintiff that the defendants' assets would be dissipated or disposed of, otherwise the plaintiff would have applied for a Mareva injunction then. That must also have been the position in March 2000 when Yin discovered that the defendants were under investigation. Also, although it is alleged that the 1st defendant was aware that he was under investigation in mid October 2000, no application for a Mareva injunction was made at that time. Furthermore, it is pertinent to observe that it has been some two months since the Mareva injunction was discharged on 22 December 2000. There is no evidence to show that since that time the defendants have taken any steps to dissipate or to dispose of their assets. At the hearing before Suffiad J on 22 December 2000, which was effectively an inter partes hearing, he was of the view that there was no real risk of dissipation of assets. In the light of all the evidence before me, I agree with Suffiad J. I am not satisfied on the evidence that there is a real risk of dissipation of assets and for this reason also, I would dismiss the application for a Mareva injunction. The plaintiff's applications by summons dated 15 December and 28 December 2000 are dismissed.

[After hearing submissions on costs]

44. As I have set out in my judgment, there are serious and material inaccuracies in the documents placed before the court. There was false and misleading evidence affirmed by Yin in support of the application which has not even been corrected in any subsequent affirmation. The application for a Mareva injunction ought never to have been applied for on that evidence. The plaintiff's application is, in my view, improper, oppressive and also misconceived as a matter of fact and law. This is a proper case for the court to order costs on an indemnity basis and I make an order that the costs of the application including the costs reserved on 22 December, 29 December 2000 and 12 January 2001 be costs to the defendants such costs to be taxed on an indemnity basis and to be paid forthwith. Certificate for two counsel.