TSUI SZE WAI, SAMMY v. WONG YU TSAI AND ANOTHER

HCMP 357/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 357 OF 2006

____________

____________

____________

______________

D E C I S I O N

_____________

1.  On 10 August 2006, on the petitioner’s application for an interlocutory injunction in this petition under section 168A of the Companies Ordinance, Cap. 32, I made an order to dismiss the application on various undertakings given by the 1^st respondent Wong Yu Tsai, who at that time was represented by counsel.

2.  Among the undertakings given to the court were the following:  pending the determination of the petition and an action brought in the PRC by the 1^st respondent against the petitioner in June 2006, the 1^st respondent is to deposit all income and profits which Shenzhen Huayuan Plastic Products Company Limited (“SH”) may receive under the Lau Sin Tung Industrial District project (“the Project”) into a designated account; the 1^st respondent is to disclose the details of the designated account and its balance to the petitioner’s solicitors within 14 days; and upon receipt of any income or profits from the Project, the 1^st respondent is to disclose to the petitioner’s solicitors the amount received and particulars of the account or accounts into which the said sum has been deposited and to produce to the petitioner’s solicitors documents evidencing such deposit.

3.  By a letter dated 17 August 2006, the 1^st respondent by his solicitors provided details of the designated account to the petitioner’s solicitors and the balance of that account.

4.  Some time in November 2006, the petitioner received information from the joint venture partner of SH in the Project, Shenzhen Lai Sun Industrial Company Limited (“Lai Sun”), that the Shenzhen Highway Authority was to pay compensation for the resumption of land and that such compensation had been paid into the bank account of Lai Sun.

5.  The petitioner’s solicitors wrote to the 1^st respondent’s solicitors reminding the 1^st respondent to comply with his understanding to the court.  After some exchange of correspondence, on 13 November 2006, the 1^st respondent’s solicitors wrote to the petitioner’s solicitors stating that on 7 November 2006, Lai Sun had paid the 1^st respondent’s company RMB525,100.00 from the amount received as compensation.  There was a further sum of RMB2,474,900.00 which was due to a contractor under the Project and that this amount was paid to the contractor out of the compensation fund.  Documents were enclosed with the said letter of the 1^st respondent’s solicitors and it would appear that a cheque was drawn from the bank account of SH with the Agricultural Bank of China for RMB2,474,900.00 payable to the contractor.  That bank account was not the designated account as advised by the 1^st respondent’s solicitors in August 2006.

6.  On 15 November 2006, the petitioner’s solicitors wrote to the 1^st respondent’s solicitors requiring compliance with the undertaking given to the court on 10 August 2006 and asking the 1^st respondent to produce to them documents evidencing the deposit of the sum of RMB3 million (made up of the 2 sums mentioned above of RMB2,474,900.00 and RMB525,100.00) into the designated bank account.

7.  The 1^st respondent replied by his solicitors on the same day stating that he considered he has complied with his undertaking to the court.  I do not agree with this.  By the undertaking, the 1^st respondent was required to deposit all income and profits which SH may receive under the Project into the designated account.  He is also required to disclose on receipt of such income or profits from the Project the amount received, the particulars of the account into which the sum had been deposited and to produce documents evidencing such deposit.  On the face of it, it does not appear to me that the 1^st respondent has complied strictly with the terms of the undertaking.

8.  The petitioner issued a summons on 28 November 2006 seeking an order that the 1^st respondent should make an affirmation deposing to various matters within 7 days.  He also seeks an order that the 1^st respondent should within 7 days do all that is necessary to assist the petitioner to be added as a joint signatory to the designated bank account, as he is of the view that this measure is required for his effective protection over the disposal of the amounts in the designated account.

9.  The 1^st respondent has notice of this summons.  On 18 December 2006, he wrote to the court stating that he is unable to attend the hearing today and sought an adjournment.  On 19 December 2006, he filed a notice of intention to act in person.

10.  As the 1^st respondent has not attended today, I do not propose to make any order on the latter part of the petitioner’s summons requiring the petitioner to be added as a joint signatory to the designated account, so that part of the summons is adjourned.  However, even in his absence, I think it right to order the 1^st respondent to make an affirmation to depose to various matters as required by the petitioner and to produce relevant supporting documents, as there would appear to have been a prima facie breach of his undertaking to the court on 11 August 2006.

11.  I would make an order in these terms:

The 1^st respondent do within 14 days hereof make and file an affidavit to depose to the following matters and producing all relevant supporting documents including bank statements:

(a)    whether SH has since 10 August 2006 received or has been entitled to receive any income or profits from the Project;

(b)     what amount was received and into what bank account or accounts was such sum deposited; and

(c)      what interests of SH in respect of the Project have been disposed of, giving full details of to whom, how and when such disposals were made.

12.  I see no reason why the 1^st respondent should not bear the petitioner’s costs of the summons and of the hearing today.  I order him to pay the petitioner’s costs of the application in any event.