CLEARFLOW COMMERCIAL FINANCE CORP v. ATL POWER SYSTEMS CO LTD

HCA 750/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 750 OF 2017

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REASONS FOR DECISION

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1.  There were two applications before me. First, there was the plaintiff’s application for a garnishee order absolute pursuant to the garnishee order nisi dated 18 May 2017. At the last hearing, the Master adjourned the application to this Court in view of the presence of an injunction order affecting the bank account held by the Judgment Debtor with the Garnishee.

2.  The second Summons was taken out by Hunter Amenities International Ltd. (“the Applicant”) on 7 July 2017 seeking to intervene in the present proceedings and oppose the garnishee order application. The Applicant obtained judgment in the District Court against the same Judgment Debtor in DCMP 486 of 2017.  They also obtained a Mareva injunction against the assets of the Judgment Debtor on 17 February 2017 and a garnishee order nisi on 17 June 2017. 

3.  I can deal with the Applicant’s Summons very quickly.  Having heard the submissions of the plaintiff and having the opportunity of a short adjournment to enable the Applicant’s solicitors to review the papers in these proceedings, Ms Wong, for the Applicant, confirmed that having taken instructions, they would not proceed with their Summons. 

4.  As to the garnishee order application, there were two matters that I had to deal with in deciding whether to make an order absolute.  They were the garnishee order nisi and the Mareva injunction obtained by the Applicant. 

5.  The garnishee order nisi of the plaintiff was served on the Garnishee on 22 May 2017.  The other garnishee order nisi was only obtained by the Applicant on 17 June 2017.  By reason of the principle of chronological priority and the absence of a stay of execution, the plaintiff’s garnishee order nisi took priority over the Applicant’s garnishee order nisi (see the case of International Associated Attorneys Ltd v Eurostock Energy Ltd (HCA 180/2012, 5 October 2012),Au-Yeung J at para 19). 

6.  As to the other issue, it is well established that Mareva Injunction does not create a security interest, confer priority or any propriety interest on the party obtaining the injunction.  Accordingly, a Mareva Injunction would not have the effect of preventing the judgment creditor from exercising his right to seek a garnishee order (see the above case of International Associated Attorneys Ltd v Eurostock Energy Ltd  (HCA 180/2012, 5 October 2012),at para 20 and the case of Re Ling Ex parte Enrobook Pty Ltd (1996) 142 ALR 87, at 92 – 93). 

7.  Having considered the papers before me and the submissions made by Mr Cao, I was satisfied that a charging order absolute should be made in accordance with the plaintiff’s application. 

8.  In relation to the Applicant’s Summons, the plaintiff did not seek any costs. 

9.  As to the garnishee order application, the plaintiff submitted a skeleton bill for a total sum of HK$125,610 for summary assessment. Mr Cao submitted that since the last hearing before the Master, they had incurred costs in preparing a detailed affidavit in support as well as submissions and authorities.  Having considered the matter, I allowed costs in the sum of HK$30,000. 

10.  I made the following order:

(1) The Applicant’s Summons dated 7 July 2017 be dismissed with no order as to costs;

(2) The plaintiff’s garnishee order nisi be made absolute;

(3) Costs be to the plaintiff in the sum of HK$30,000;

(4) The Garnishee be at liberty to retain HK$100 for their costs of this application out of the balance of the debt due from them to the Judgment Debtor.