LAM CHI BIN STANLEY v. OSK ASIA FUTURES LTD

FAMV No. 1 of 2004

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 1 OF 2004 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM
CACV NO. 294 OF 2002)

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D E T E R M I N A T I O N

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Mr Justice Ribeiro PJ:

1. The applicant is a judgment debtor in respect of a judgment for HK$9,147,400.00 in favour of the respondent. An order was made under O 49B r 1B that he be imprisoned for one month. This was on the ground that when orally examined under O 49B r 1A, he had wilfully failed to make "a full disclosure of all his assets, liabilities, income and expenditure" which was a duty placed on him by paragraph (2) of that rule. Imprisonment on that ground is authorised by section 21A(1) of the High Court Ordinance which confers jurisdiction to order imprisonment "to enforce, secure or pursue a judgment for payment of a specified sum of money". The applicant now seeks leave to appeal with a view to setting aside that order.

2. The circumstances in which the order for imprisonment came to be made are as follows:-

(a) When summary judgment was sought against the applicant, he was given leave to defend conditional on his paying $2.5 million into court.

(b) He filed two affirmations with a view to showing that the payment-in condition would force him to dispose of his interest in a Shanghai property development at a ruinous undervalue.

(c) Those affirmations stated in the clearest terms that he had provided HK$34 million from his own funds for that development through a company which he owned called Silicon. He exhibited a contract in other documents evidencing the transaction. The money in question was said to represent the bulk of his personal fortune.

(d) During his oral examination, he told an entirely different story. He said that he had not in fact invested the funds but that a company called Zhen Jiang (of which he could provide no particulars) had provided labour and materials valued at HK$34 million which it would recoup out of the proceeds of sale of the development. He said that he had merely procured this contribution and he also said that the development had subsequently been taken over by others, occupied by squatters and was physically in a sorry state.

(e) So, the applicant sought to retract his evidence about having invested HK$34 million from his personal fortune and now to suggest that any equity he had in the development was greatly diminished in value.

3. In a careful decision dated 13 July 2002, Master K Y Chan gives a series of cogent reasons why he found this story to be "wholly incredible". He found beyond reasonable doubt that the applicant had wilfully failed to make a full disclosure of all his assets "on" - which we read to mean "in connection with" - his investment in that development.

4. Ms Margaret Ng, appearing for the applicant, criticises the decision on the basis that the master failed to make a finding that there were available assets which were being concealed. However, there is no requirement of such a finding. The master is required to be satisfied beyond reasonable doubt that there has been the requisite wilful failure of disclosure, a finding which no doubt implicitly carries a belief that assets exist of which full disclosure has not been made.

5. The Court of Appeal (CACV 294/2002) dismissed the applicant's appeal on 2 May 2003 and after reviewing the evidence in detail, Yuen JA concluded that the master was entitled to find that the judgment creditor had wilfully failed to make full disclosure, setting out convincing grounds for that conclusion.

6. Ms Ng characterises the finding against her client as a failure to disclose the "source" of an asset, ie, the HK$34 million investment, rather than a failure to disclose that asset itself. She seeks to argue that such a failure is not caught by the rule, so that the order for imprisonment was made without jurisdiction. This is the principal ground upon which leave to appeal is sought.

7. With respect, that contention is not reasonably arguable. Questions were directed at the "source" of the HK$34 million on the basis of the applicant's affirmation stating that this was what he had invested and formed the bulk of his personal fortune. On that basis, a failure to make disclosure about such personal fortune was obviously a failure relating to his personal assets.

8. The applicant's response to this line of questions was to produce a totally different story which was found to have been wholly incredible, giving ample basis for the finding that he had wilfully failed to make full disclosure regarding that investment and its source. There is no question of the ambit of O 49B r 1A(2) being exceeded.

9. We accordingly dismiss the application for leave to appeal with costs.