XCHRX BOLTON INDUSTRIAL (H.K.) LTD. v. SHEK YUK CHING AND OTHERS

HCA 8210/2000
(Intended Action No. 77/2000)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 8210/2000

(INTENDED ACTION NO. 77 OF 2000)

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D E C I S I O N

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1. I have before me this morning an application by the Plaintiff, Bolton Industrial (HK) Limited, for a mareva injunction together with certain ancillary relief. The application is made ex parte but has been made on notice to the 2nd, 3rd, 4th and 5th Defendants which are banking institutions. There has been no appearance for these parties.

2. The background facts are simple enough. The Intended 1st Defendant was employed by the Plaintiff for many years as an accountant. It appears that recently a study of documents in the accounts department revealed that the 1st Defendant had circumvented the normal safety procedures for the signing of cheques and had been able to use a large number of cheques for the purposes of stealing money from the Plaintiff and paying it into various accounts held by her and/or her husband. The accounts are believed to be held by the 2nd to the 5th Defendants.

3. The Intended 1st Defendant was arrested by the police after the Plaintiff had made a report. I am informed that prior to her arrest, the Intended 1st Defendant made admissions (at least in part) of stealing funds from the Plaintiff. This admission was made to one of the directors. When cautioned by the police, however, it appears that she elected to remain silent. The funds involved are very substantial. It is suggested that the Intended 1st Defendant may well have stolen in excess of HK$10 million.

4. In order to obtain a mareva injunction, it is necessary for the Applicant to show that it has a good arguable case. I am satisfied that on the papers this has more than adequately been revealed. The evidence is that the Intended 1st Defendant has stolen a very large sum of money from the Plaintiff.

5. The second matter that must be shown is that the Defendant has assets within the jurisdiction. The existence of multiple accounts suggests that they do hold assets even if the extent of those assets are not yet known. There is no suggestion that the 1st Defendant necessarily removed those funds from this jurisdiction.

6. It is also necessary, of course, for the Applicant to show that whatever assets are within Hong Kong are likely to be dealt with in such a way as to frustrate any judgment which the Plaintiff may obtain. Again, I think it can readily be inferred that the Intended 1st Defendant, having obtained the funds dishonestly in the first place, would have little compunction in removing them from the jurisdiction in order to obtain two results. First, to remove any evidence of her wrong doing and second, to ensure that the fruits of her wrong doing are placed beyond the reach of the Plaintiff Company and/or the authorities.

7. Insofar as is necessary, counsel who has appeared before me this morning that is Mr Ng has referred me to the authority Guinness Plc v. Saunders [1987] the Independent of April 15. I am, therefore, satisfied that the necessary requirements for the issue of an ex parte mareva have been met and I will make all the required orders in that regard.

8. Counsel has, however, asked for one further order and I am inclined to grant him that order too. It appears that the Intended 1st Defendant, after her arrest and after being interviewed by the police, has been released on a cash bail. I am told that the amount of the bail is HK$500,000.00. There is, however, no evidence that her travel documents have been seized or that she has been placed on any list maintained by the authorities which prevents her from leaving Hong Kong.

9. In the circumstances, the Plaintiff seeks a prohibition order in terms of Order 44A of the Rules of the High Court. Counsel has helpfully supplied me with a copy of an authority of this Court, namely AVCO Financial Services (Asia) Ltd v Topma Electronics Ltd & Ors [1999] 4 HKC at 193 in which Bokhary J set out the basis upon which prohibition orders in circumstances similar to this may be given. I need do no more than quote from the headnote which reads as follows:

"Even where there was a judgment, an order prohibiting the judgment debtor from leaving Hong Kong was for the purpose of facilitating the enforcement of that judgment. It would not be appropriate to make a prohibition order unless prohibiting the judgment debtor from leaving Hong Kong was reasonably and properly conducive to the enforcement of the judgment. It must be remembered that what had to be justified was an order interfering with a person's freedom to leave Hong Kong, which was a freedom guaranteed by art 31 of the Basic Law. There must at least be some evidence that enforcement of the judgment would be impeded in some significant way if no prohibition order were made."

10. I am satisfied that the circumstances of the present case warrant the issue of a prohibition order. On the evidence before me, it appears that the Intended 1st Defendant stole a large sum of money. It is not, however, clear at this juncture where those funds now rest. Are they all in these bank accounts? Are they perhaps held some where else? Are certain of the funds outside the jurisdiction? If so, can steps be taken to bring those funds back into the jurisdiction? It goes without saying that if the Intended 1st Defendant leaves Hong Kong, she would no doubt do so with the intention of avoiding any criminal proceedings that may be taken against her and with the intention of preventing the Plaintiff from obtaining a return of the money stolen from it. It, therefore, follows that the Plaintiff would be critically handicapped in any endeavour it may make by way of proper procedure to ascertain the present whereabouts of the stolen moneys.

11. There will, therefore, be a prohibition order. Counsel has studied Form 106 in appendix A to the rules and we are agreed that both paragraphs that appear in the body of the order should be completed, the one not being exclusive of the other. There will, therefore, be an order in terms of the draft and a prohibition order as prayed.