WU YANG v. DAYUAN INTERNATIONAL DEVELOPMENT LTD AND OTHERS

HCCW 103/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 103 OF 2015

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D E C I S I O N

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1.  This is my decision on whether to grant a further extension of time for compliance with paragraph 4(3) of the Injunction Order (“Disclosure Order”) pursuant to paragraph 2 of the order of Chow J dated 26 March 2015.

2.  I will not grant any further extension of time for the following reasons.

3.  Firstly, the Disclosure Order is required in support of paragraph 3(2) of the Injunction Order.  Without the Disclosure Order, paragraph 3(2) will not be effective, bearing in mind in particular the fact that there is evidence of fraud having been committed by those in control of the 1^st and/or 8^th respondents.

4.  It would not be appropriate to allow the respondents[1] to seek to change their stance by arguing today, instead of at the substantive hearing for their discharge application, whether paragraph 3(2) should be allowed to stand.  For today’s purpose, this court must take a practical and broad-brush view of these matters and provide for the appropriate interim relief until the determination of the respondents’ discharge application.  There is no doubt in my mind that paragraph 3(2) is justified on the existing evidence.

5.  Secondly, I do not agree that the maintenance of the Disclosure Order is inconsistent with the principles adumbrated in Pacific King Shipping Holdings Pte Ltd v Huang Ziqiang [2015] 1 HKLRD 830.

6.  Apart from the fact that the facts of that case are different to those before this court, the disclosure here concerns the assets of the 8^th respondent which is the main asset of the 1^st respondent in respect of which the petitioner is a 30% shareholder.  I see no reason to take the view that the Disclosure Order is outside the proper parameters prescribed by law.

7.  I do not agree that the court may only grant a disclosure order where the plaintiff has a proprietary claim.  This is not my understanding of Pacific King Shipping Holdings Pte Ltd, see headnotes and paragraph 28 of the judgment.

8.  Thirdly, Mr Mok has not been able to advance a single argument of prejudice.  This is not a case where the disclosure constitutes an infringement of privacy or is otherwise oppressive.  The disclosure concerns the assets of a 70% owned subsidiary and there is evidence before the court that those in charge of the 1^st and/or 8^th respondents might have misappropriated such assets.

9.  Further, I agree with Ms Chan that the 4^th and 6^th respondents have the duty to account for what has transpired to the dividends in question.

10.  Finally, whilst I agree that the petitioner’s indirect interest in 30% of the dividends has been secured, I do not believe that this constitutes a good reason to resist the Disclosure Order.  The petitioner clearly has a legitimate interest in the preservation of the dividends.  They reflect the value and prospects of the 1^st respondent.