XCHRX GRAND TRADE DEVELOPMENT LTD. v. BONANCE INTERNATIONAL LTD.

HCMP 2342/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2342 OF 2000

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D E C I S I O N

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1. This is the Plaintiff's application for a Mareva type of injunction after I dismissed its claim on 31 October 2000. It is made ex parte on notice. The reasons for the dismissal of the Plaintiff's claim have been set out in the written Judgment dated 31 October 2000.

2. Before a Mareva injunction is granted the Plaintiff has to satisfy the court 3 matters:

(1) a good arguable case;

(2) the Defendant has assets within the jurisdiction;

(3) a real risk of dissipation of assets which would render the Plaintiff's claim nugatory.

3. In relation to the "good arguable case" requirement, Mr Lam for the Plaintiff now relies on Section 11(2), Companies Ordinance Cap. 32 and Article 114, Table A. This argument was not advanced by him at the time of trial of this action. There is no direct evidence regarding whether the Articles of Association of Winkit or Manibest (in the words of Section 11(2)) "exclude or modify" Article 114 (and/or any other provisions) of Table A. However, Mr Lam argues that Article 19 in Winkit's Articles of Association shows that the other provisions of Table A are applicable.

4. Mr Lam also argues that it is irrelevant whether the Plaintiff has relied on Section 11(2), Cap. 32 and Article 114, Table A at the time of requisitions on title because this is a matter of law and the Plaintiff is entitled to raise this point even if it had not been raised earlier.

5. I agree with Mr Lam that there may be a good arguable case as to whether Article 114, Table A may apply to Winkit. However, I disagree with his argument that it is open to the Plaintiff (as purchaser) to raise an argument on the Defendant's title based on Section 11(2), Cap. 32 and Article 114, Table A when they were not relied upon at the relevant time. All the material facts were known to the Plaintiff at that time. In these circumstances, if the Plaintiff were allowed to raise new arguments relating to title beyond the time prescribed in the sale and purchase agreements (or the time scheduled for completion), the Defendant would be placed in an impossible position.

6. For the above reasons, I do not find that the Plaintiff has shown a "good arguable case".

7. By reason of the matters set out below, even if the Plaintiff had been able to establish a good arguable case, I do not consider that it has established that the Defendant has assets within the jurisdiction.

8. The Defendant has a paid up capital of $100.00 only and does not appear to have any other activities or assets in Hong Kong: see paragraph 17 of the affirmation of Mr William Choi dated 2 November 2000. The suit property which it used to hold was already sold on 5 October 2000. The $1.38m deposit was retained by the Defendant's solicitors until the resolution of this action: see the letter dated 1 August 2000. This action was resolved on Friday 31 October 2000 when Judgment was handed down on that day. The deposit is likely to have been released by the Defendant's solicitors by now. By reason of the above matters, I do not consider that there is satisfactory evidence that the Defendant still has assets within the jurisdiction.

9. The application is, therefore, refused.