LEADER SCREWS MANUFACTURING CO LTD v. HUANG SHUNKUI

HCA 2067/2019

[2021] HKCFI 1302

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2067 OF 2019

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D E C I S I O N

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1.  On 18 January 2021, this Court declined to grant extension of time for the Defendant to file her defence and entered judgment in favour of the Plaintiff in default of defence (“the Judgment”). The Court also ordered, amongst others, that the Mareva injunction do continue for 6 months post-judgment.

2.  This is the Defendant’s Summons dated 26 April 2021:

(1)  to set aside or vary the Judgment;

(2)  for an order to uplift the Mareva injunction as regards her bank accounts; and

(3)  for an order to amend her application under (2) to uplift the Mareva injunction as regards all her assets.

(1)  Setting aside or vary the Judgment

3.  It is necessary to distinguish between a regular judgment from an irregular one.

4.  The Defendant has not demonstrated that the Judgment was an irregular judgment.  Plainly it was not because the Defendant had appeared at the hearing on 9 October 2020 (“the Hearing”) which led to the Judgment. 

5.  As it was a regular judgment, the Defendant has to demonstrate that she has real prospect of success on her defence and not just an arguable defence: Hong Kong Civil Procedure 2021, Vol 1, §13/9/14.

6.  In her affirmations, the Defendant merely produced some of the documents, including the draft defence, that had been considered in the Judgment.  The other documents (such as medical appointment slip or medical certificate) raised nothing that pointed to her having a defence at all.

7.  The Judgment was granted after submission of both parties at the Hearing and consideration of the merits of the draft defences.  If the Defendant was aggrieved by the Judgment, she should have appealed and not sought to set it aside or vary it.

8.  Further, the Summons was taken out over 3 months after the Judgment was handed down.  There was so much delay that even the appeal period had lapsed. The Defendant blamed it on the Resource Centre which guided her to take out the Summons and the Plaintiff’s directors who refused to negotiate with her. However, the Plaintiff had already obtained judgment and their refusal to negotiate could not revive the opportunity to defend.

9.  There are no merits in the application for setting aside the Judgment. The Defendant has not indicated that anything in the Judgment needed to be varied, except the Mareva injunction, discussed below.

(2) & (3) Setting aside the Mareva injunction

10.  The Defendant seeks to vary the terms of her Summons by affirmation. The Plaintiff has not raised objection.  I therefore considered her application to be one for setting aside the Mareva injunction altogether.

11.  The Plaintiff as judgment creditor was granted protection of the Mareva injunction for 6 months after judgment so that it could carry out enforcement proceedings.

12.  The only reason posed by the Defendant for setting aside the Mareva injunction was that she could not withdraw money from the bank for living and legal expenses.

13.  With regard to living expenses, the evidence showed that the Defendant had successfully withdrawn $25,000 pursuant to the Mareva injunction in the month of December 2020 from HSBC.  In addition, she asked the Plaintiff to write to the Industrial and Commercial Bank to enable her to withdraw monthly expenses.  If the Plaintiff had acceded to that request, she might have been able to withdraw $25,000 twice a month. 

14.  Mr Lau, solicitor for the Plaintiff, also explained that under the Mareva injunction, the Defendant was supposed to disclose her assets but has failed to do so.  Without knowing the full extent of the Defendant’s assets, it was difficult for the Plaintiff to consent to her withdrawal of monthly expenses.

15.  I find that the Defendant has not been entirely honest with the Court about her difficulty in making withdrawals.  She has not disclosed her other financial resources or lack of them to justify variation of the Mareva injunction.

16.  With regard to legal expenses, the Defendant has not explained the purpose of engaging lawyers after the Judgment, and the costs involved. 

17.  Overall, I see no reason why the Mareva injunction should be varied.

Conclusion

18.  The Summons is dismissed.

19.  The Summons is totally devoid of merits.  I make an order nisi that the Defendant shall pay costs to the Plaintiff on indemnity basis, summarily assessed in the sum of $48,430.

20.  I thank Mr Lau for his assistance.