BEIJING SONGXIANGHU ARCHITECTURAL DECORATION ENGINEERING CO LTD v. KITTY KAM also known as WANG YUZHI

HCA 1289/2022

[2025] HKCFI 219

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

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BETWEEN

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REASONS FOR DECISION

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1.  I will continue to adopt the expressions and abbreviations used in this court’s Reasons for Decision handed down on 1 November 2024 [2024] HKCFI 3068 (“the November Reasons”) for making, among others, the unless order to enforce the compliance of the Repatriation Order (“the 1^st Unless Order”) upon the Plaintiff’s application by the 1^st Unless Summons. I refer to the recent procedural history in this action as narrated therein without repeating them here.

2.  As mentioned in §§11, 15 and 20(b) and (2) of the November Reasons. The substantive argument of the 2^nd Unless Summons and the remainder of the Leave Summons were adjourned to a date to be fixed. This was the substantive hearing of those 2 matters.

3.  At the conclusion of the hearing, I ordered:

a. In respect of the 2^nd Unless Summons, that unless on or before 4 p.m. on 20 January 2025, Kam complies with paragraph 4 of my Order dated 9 August 2024 and in the event that the part final judgment entered on 25 October 2024 in respect of HK$220,548,682 (Sum A) (“the Part Judgment”) is set aside by the court or Kam is otherwise entitled to defend the claim on the said sum, Kam be debarred from defending this action to the extent of HK$49,586,000 out of the sum as defined in paragraph 3 of the Amended Statement of Claim and P be at liberty to enter against Kam judgment for the said sum of HK$49,586,000 in the form of Annex 2 of the 2^nd Unless Summons as revised; and

b. In respect of the Leave Summons, that, for the avoidance of doubt, P be released from the undertaking given under paragraph 5 of Schedule 2 of the Order of Anthony Chan J dated 13 January 2023 (“the Undertaking”) to the extent of enforcing the Part Judgment anywhere outside this jurisdiction.

4.  After having heard submissions on costs, I ordered that the costs of the 2^nd Unless Summons, including all costs reserved and 75% of the costs of the Leave Summons, also including all costs reserved, be to P with certificate for 2 counsel. The reasons for these 2 costs orders were given orally at the hearing together with directions for their summary assessment.

5.  I said written reasons would be provided, which I now do.

The remainder of the Leave Summons

6.  To recap the immediate background:

a. On around 17 September 2024 and by Kam’s Draft 11^th, P was informed by Kam that the HK$170,962,682 hitherto in D’s Account was allegedly “returned” to SSI by Kam, but Kam claimed to be unable to provide any information whatsoever about the whereabouts of that sum.

b. As P has given the Undertaking, it took out the Leave Summons on 24 September 2024 applying for leave to commence proceedings in Singapore against Kam and/or to commence 3^rd party discovery proceedings against Standard Chartered Singapore and other 3^rd parties in Singapore.

c. At the call-over hearing of the Leave Summons on 27 September 2024 and for the reasons set out in the November Reasons, leave was given to P to commence proceedings for discovery against Standard Chartered Singapore or other relevant 3^rd parties in Singapore.

d. On 27 September 2024, this Court granted the 1^st Unless Order.

e. On 25 October 2024, the Part Judgment was entered upon Kam failing to comply with the 1^st Unless Order.

7.  Mr Timothy Lam, counsel for Kam, in his written submissions strenuously resisted the granting of leave to P to commence fresh proceedings against Kam in Singapore. In gist, he submitted that P was overly aggressive, that it would be oppressive and vexatious to allow P to commence parallel proceedings against Kam in Singapore.

8.  He cited Agritrade Resources Ltd v Ashok Kumar Sahoo [2021] HKCFI 685 in which Deputy High Court Judge To at §138 summarized the guidelines set out in Dadourian Group International Inc v Simms and Others [2006] 1 WLR 2499 for granting permission to enforce a worldwide Mareva order abroad. Those guidelines have been referred to and set out in §34 of the November Reasons.

9.  He stressed that though these guidelines are not intended to be strict jackets (per DHCJ To at §139 in Agritrade Resources Ltd), they should be followed unless there were good reasons justifying otherwise. He submitted that under those guidelines, P should at least proffer evidence as to the applicable law and practice in Singapore, which P has not. P also need to prove that there existed assets belonging to Kam in Singapore, on which presently P has no evidence.

10.  At the hearing, Mr Douglas Lam SC (leading Ms Ho and Ms Kat), counsel for P, clarified and confirmed that as the Part Judgment has been so entered on 27 September 2024, P would now only be seeking by the remainder of the Leave Summons for leave to enforce the Part Judgment in Singapore by, among others, registering the Part Judgment in Singapore under the Reciprocal Enforcement of Foreign Judgments Act 1959 and then taking such enforcement or execution procedures there. In the course of the exchange with the bench, Mr Lam SC further clarified that P was in effect seeking, for the avoidance of doubt, a release from the Undertaking to the extent that P be at liberty to enforce the Part Judgment in other jurisdictions as P might be advised or desire (“the Release”). He explained that as this action was still ongoing and the Mareva Injunction subsisting, it would be proper and necessary for P for the avoidance of doubt to obtain the Release.

11.  As P was merely seeking the Release to enforce the Part Judgment elsewhere (and it was not disputed that Kam did not have sufficient assets in Hong Kong to satisfy the Part Judgment), and not seeking to apply for an interlocutory Mareva injunction elsewhere in addition to the one it obtained in Hong Kong, the above-mentioned guidelines are not applicable or relevant; nor was there any reason for requiring P, as a judgment creditor, to have to satisfactorily prove to this court that Kam has assets in Singapore before the Release would be given. Moreover, Kam could hardly complain that the taking of such steps to execute the Part Judgment, be it in Singapore or elsewhere, was overly aggressive or oppressive.

12.  Mr Timothy Lam then took a procedural objection and complained that hitherto until this hearing P has not so clearly specified its position. However, in §17 of the Affirmation of Wang Guiwu filed on behalf of P on 15 November 2024, Wang has mentioned that P was seeking leave by the remainder of the Leave Summons to enforce the judgment P obtained. In the circumstances, I rejected this procedural objection and released P from the Undertaking in terms set out above, but accepted that some costs spent by Kam for this hearing could have saved had P’s present position been made as clear earlier, and thought it fair to deprive P some of its costs for this hearing.

The 2^nd Unless Summons

13.  Kam has persistently failed to comply with the January 2023 Disclosure Order.

14.  By the 49.5M Disclosure Order given on 6 August 2024, Kam was ordered to comply with the January 2023 Disclosure Order by filing and serving on P within 28 days an affirmation stating, in relation to the remaining part of Sum A in the amount of HK$49,586,000 (HK$220,548,682 - HK$170,962,682), the present location and the recipient(s) of that sum and the location, nature and value of assets which represent in whole or in part or are derived from the proceeds of that sum regardless of whether or not such proceeds are in Kam’s own name and whether they are solely or jointly owned.

15.  There was no dispute that Kam has again failed to comply with the 49.5M Disclosure Order in time or at all.

16.  By the 2^nd Unless Summons, P was seeking to enforce compliance by an unless order to be backed by the sanction of striking out the Amended Defence and entering of final judgment over P’s claims should Kam fail to comply in time.

17.  In his written submissions, Mr Timothy Lam essentially rehashed the arguments Kam made on the last occasion in opposition to the 1^st Unless Summons - that the sanction was draconian, that the sanction served no utility, that P’s claims against Kam consisted of serious allegations of fraud and dishonesty, and that a fair trial was still possible despite Kam’s failure to comply with the 49.5M Disclosure Order.

18.  Save that I accepted that the sanction of judgment should be proportionately confined to the sum of HK$49,685,000 only (which Mr Lam SC readily accepted), I reject all the above arguments for the same reasons I expressed in the November Reasons and in my Decision handed down on 16 December 2024 [2024] HKCFI 3614 refusing Kam leave to appeal against the 1^st Unless Order.

19.  Apart from those arguments, Mr Timothy Lam raised the following contentions.

20.  He contended that as the Part Judgment has already been entered, the sanction to be imposed upon the non-compliance of this 2^nd Unless Order of entering judgment in respect of Sum A (or part of it) would expose Kam to double recovery and was also wrong in principle in that P’s claim over Sum A was already adjudicated and concluded by the Part Judgment and was thus res judicata and that therefore no further judgment could be entered over it. Further or alternatively, he contended that the 2^nd Unless Summons should be adjourned sine die with liberty to restore pending the result of Kam’s appeal against the 1^st Unless Order (and consequentially the Part Judgment).

21.  Mr Lam SC opposed any adjournment pending the outcome of the appeal and was content with terming the sanction such that it would be limited to debarring Kam from defending P’s claim in respect of the sum of HK$49,685,000 and that the sanction would be operative only in the event that Kam has successfully set aside the Part Judgment.

22.  So termed, the sanction would not offend the doctrine of res judicata or subject Kam to the jeopardy of double recovery. I was also satisfied that the sanction so termed was just and proportionate in the circumstances. Thus, there was no reason to adjourn the determination of the 2^nd Unless Summons to await the result of the pending appeal and I rejected Kam’s proposal for adjournment.

23.  I thus granted the unless order in terms as set out in §3 above.

24.  I thank Mr Lam SC, Ms Ho, Ms Sat and Mr Timothy Lam for their assistance.