MOTOROLA SOLUTIONS CREDIT CO LLC (formerly known as MOTOROLA CREDIT CORPORATION) v. KEMAL UZAN AND OTHERS

HCA 2232/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2232 OF 2013

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REASONS FOR DECISION

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Introduction

1. This was the hearing of the application by Colin Alan Cook, HPF Private Investment Fund Company Ltd, AA Capital Investments Ltd and Hijaz Investments Hong Kong Ltd, respectively the 8^th, 9^th, 11^th and 12^th defendants (“D8”, “D9”, D11” and “D12” and collectively “the defendants”) by summons dated 20 January 2014 (“the discharge summons”) to discharge an ex parte Mareva injunction granted by DHCJ Lok on 15 November 2013 and continued on 22 November 2013 by DHCJ Seagroatt.

2. Under the terms of the order of 22 November 2013, the defendants were to file reply affidavits by 20 December 2013 which they failed to do.  Instead, the defendants took out the present summons on 21 January 2014, 3 days before the return date for the inter partes hearing.  On the return date, L Chan J continued the injunction order “for want of evidence in opposition” until trial or further order and gave directions for the filing of evidence for the hearing of the discharge summons.

3. At the conclusion of this hearing, the defendants’ discharge summons was dismissed with costs on a party and party basis to be taxed and payable forthwith to the plaintiff.  My reasons appear below. 

Background

4. In 2003, the plaintiff obtained a judgment in the US against D1 to D6 (“the Uzans”) who had been found by the US courts to have defrauded the plaintiff amongst others of approximately US$2 billion.  In 2010, the plaintiff obtained a US judgment against the D7, the alter ego of the Uzans.  The UK courts domesticated the US judgments in 2004 against D2 and D4 and in 2010 against the D1 and D3.

5. The Uzans have strenuously resisted enforcement in every possible way (as they had vowed to do through counsel in the US proceedings) and the plaintiff has so far only recovered part the judgment sums.

6. In 2011 and 2012, the plaintiff discovered that D9, D11 and D12 (companies incorporated in Hong Kong) are part of the complex web of nominee companies established by the Uzans to hold and/or launder the downstream assets located in the Middle East. It was in those circumstances that the plaintiff obtained the injunction order.

The application for an adjournment

7. On 15 May 2014 the defendants’ then solicitors Angela Ho & Associates delivered the hearing bundles (consisting of 19 box files) together with defendants’ counsel’s written skeleton and two box files of authorities.  Senior and junior counsel for the defendants on that date had prepared the written skeleton submitted.

8. On 16 May 2014, Tanner DeWitt wrote to the court to the effect that they had “recently been appointed” to act for the defendants in place of Angela Ho & Associates.  Upon inquiry being made, the court was advised that there would not be a change of counsel.

9. At the hearing, it transpired that the defendants were not represented by counsel although out of courtesy to the court and very properly, senior and junior counsel who had previously been instructed appeared in court to provide an explanation.  At senior counsel’s request, the chambers hearing became a hearing that was “not open to the public”.

10. The court was informed that senior and junior counsel were retained approximately two weeks earlier and briefs had been delivered by Angela Ho & Associates for them to appear, apparently not only at this hearing but also at another hearing before another judge scheduled for the last week of May.  Due to the change of solicitors, counsel’s understanding was that the briefs previously delivered were no longer valid or effective and new briefs from Tanner DeWitt were necessary if they were to represent the defendants at the hearing before this court. The court was also informed that the Hong Kong Bar Association from whom they had taken advice had confirmed their understanding of the situation. 

11. Despite having been told by Tanner DeWitt that they would be briefed, such briefs had not been forthcoming right up to that moment.  In those circumstances, there was little the court could do but to excuse counsel from attendance.

12. Mr Mark Side, a partner of Tanner DeWitt who was in court advised the court that his firm was not in a position to deliver the briefs because it had not yet been put in funds which be believed “to be on the way”.  The circumstances in which briefs had previously been sent out are not known.  

13. My understanding of the explanation proffered by Mr Side was that the funds emanate from the Middle East and because the weekend is observed on different days in the Middle East (Friday and Saturday which are nonbanking days) and the banks in the West do not operate on Sundays, there was a mismatch resulting in the delay.  Mr Side’s understanding was that the “monies were initiated to be paid on Sunday”.  He asked that the summons not be dismissed and that the hearing be adjourned, presumably, sine die.

14. When pressed as to the basis of that understanding, Mr Side informed the court that he was told on the telephone after banking hours on Monday 19 May by a solicitor (whom he did not identify) in another jurisdiction (which turns out to be Singapore) who acts for Mr Cook (D8) and that he had spoken to that solicitor on various occasions since being instructed.

The court’s discretion

15. Whether an adjournment should be granted in the events that have occurred engaged the exercise of the court’s discretion.  In this regard, a number of matters are material.

16. The first matter to note is that both the hearing and hearing date could not have taken the defendants by surprise since it was the defendants’ application and the date was fixed about three months ago in consultation with counsel’s diaries.  Accordingly, I do not accept that the present difficulties were caused by the change of solicitors on the Thursday before the hearing assuming that to be the case. 

17. Second, the present hearing is not the first occasion that the defendants have appeared in court in this matter.  The defendants have been legally represented at the several hearings that have taken place since November 2013.  They have been legally represented in court on all those occasions, making or resisting applications of one kind or another.  Therefore, the defendants must know that their solicitors must be put in funds if they are to be legally represented at a hearing.

18. Third, D8 is an ex-Royal Marine.  He is also the director of D9 and D11 and holds shares in both those companies as a nominee for the real owner whom he has not identified as such.  D8’s evidence (filed on behalf of D9 and D11 as well) suggest that the defendants are investors in large investment projects, this notwithstanding the fact that it is their evidence that they do not own any asset worth HK$10,000 or more in Hong Kong. 

19. Fourth, it is also their evidence that as of 20 January 2014, the amount of legal costs incurred in this case had already exceeded US $100,000.  It is clear from D8’s second affirmation (at § 35) filed in support of the summons before this court, that at that time (January 2014) it was already contemplated that senior counsel would be instructed to represent the defendants and that legal costs would easily add up to “millions of Hong Kong dollars”.  One would expect that arrangements for adequate and timely funding for this exercise would have been put in place in good time.

20. Fifth, quite why the former firm was replaced is not known.  In any event, I do not consider the identity of the firm to be of relevance nor the fact that there has been a change of firm.  Whichever firm was to represent the defendants, it had to be put in funds so that counsel could be briefed and represent the defendants at the hearing.

21. Sixth, one day has been set aside to hear the application the defendants’ summons to discharge. If the hearing cannot take place as scheduled and is adjourned, a new date would have to be fixed in consultation with counsel’s diaries.  This, coupled with the state of the court’s diary, necessarily means that any adjourned hearing would not be happening any time soon.

22. In my view, a last-minute application for an adjournment should not be entertained absent exceptional circumstances supported by credible evidence.  Mr Side’s explanation is at best speculative, based on hearsay from a third party.  That third party may or may not have authority to represent the defendants.  In this matter alone, according to the court’s record, the defendants are onto their third set of counsel and, as we have seen, Angela Ho & Associates were replaced on the eve of the substantive hearing. 

23. More surprising is the fact that Mr Side does not appear to have had any direct communication with the defendants.  I find that state of affairs wholly inexplicable.

24. In exercising my discretion, regard must be had to the underlying objectives of the CJR.  The fact that the hearing could not proceed has resulted in a complete waste of judicial time and resources which could have been devoted to other cases.  It has also deprived other litigants of a valuable court day.   

25. The defendants have chosen to conduct themselves in a way that is in total disregard of their obligations to further the underlying objectives of the CJR stated in O 1A, r 1. Parties and their legal representatives need to be mindful of the duty imposed on them by O 1A, r 3 and take heed that court dates are not to be trifled with in the absence of good cause.

26. While much of the hearing took place in chambers (not open to the public), I consider it in the public interest that the reasons for not granting an adjournment and dismissing the defendants’ discharge summons be made public.