CHINA EVERGRANDE GROUP (IN LIQUIDATION) v. HUI KA YAN AND OTHERS

HCMP 1080/2024

[2025] HKCFI 5618

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1080 OF 2024

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AND

HCA 551/2024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 551 OF 2024

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(Consolidated pursuant to the Order of Honourable Mr Justice Coleman
dated 12th February 2025)

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D E C I S I O N

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A.  Introduction

1.  The background – factual and procedural – of these proceedings has been canvassed in a number of previous Decisions, and needs not be repeated at any length here. For present purposes, the focus is on the position as between the Plaintiff (“CEG”) and 3^rd Defendant (“Ms Ding”).

2.  By its Summons filed on 27 September 2024 (“Jurisdiction Variation Summons”), CEG made an application for variation (“Variation”) of the undertakings given in paragraphs 6 and 7 of Schedule 2 to the Proprietary and Mareva Injunction dated 29 July 2024 (as varied) as against Ms Ding (“HK Injunction Order”).

3.  The undertakings restrict CEG from commencing proceedings against Ms Ding (except for in Hong Kong, the UK, the Cayman Islands, and the BVI), using information obtained as a result of the HK Injunction Order in any proceedings, and seeking to enforce the HK Injunction Order or obtain an order of similar nature.

4.  The gist of the Variation sought by CEG is to permit it to commence proceedings in any of Jersey, Gibraltar, Canada and Singapore (“Identified Jurisdictions”) against Ms Ding, who holds substantial assets in those jurisdictions as known to CEG by her disclosure, for the aim of enforcing, recognising or seeking other relief mirroring the terms of the HK Injunction Order, and to use information obtained as a result of the HK Injunction Order for the purpose of those proceedings.

5.  By my directions dated 2 October 2024, the Jurisdiction Variation Summons is to be determined on paper.

6.  In support of the Jurisdiction Variation Summons, CEG filed the 1^st, 2^nd and 3^rd Affirmations of Jordan George Moulds on 27 September 2024, 18 November 2024 and 3 January 2025 respectively (“Moulds 1”, “Moulds 2” and “Moulds 3”). In opposition, Ms Ding relies on the 2^nd and 4^th Affirmations of Chan Mei Yuk filed on 28 October 2024 and 5 December 2024 respectively (“Chan 2” and “Chan 4”).

7.  CEG filed its skeleton submissions on 17 January 2025 and reply submissions on 14 February 2025 respectively. Mr Vincent Chen, Counsel for Ms Ding, filed his skeleton submissions on 7 February 2025.

8.  Having considered the materials filed by the parties concerned, this is my Decision.

B.  Background

9.  The Jurisdiction Variation Summons comes about against the following factual background, much of which has been helpfully summarised in the parties’ skeleton submissions.

10.  After obtaining the HK Injunction Order, CEG sought and obtained injunctive relief in the High Court in London (“UK Injunction Order”) in substantially similar terms to the HK Injunction Order.

11.  Pursuant to the UK Injunction Order, Ms Ding gave asset disclosure in the UK proceedings on 9 and 21 August 2024. The same asset disclosure was given by Ms Ding in this action by her 2^nd Affirmation filed on 5 September 2024 (“Asset Disclosure”), which disclosed that she has various assets of an individual value of or above £150,000 in the UK, Jersey, Gibraltar, Canada, Singapore, Hong Kong and Mainland China.

12.  Following the Asset Disclosure, CEG’s solicitors in Hong Kong and the UK have written to, among others, the banks identified in the Asset Disclosure to notify them of the HK and UK Injunction Orders, with a view to having them to freeze Ms Ding’s account held with them, to give effect to the HK and UK Injunction Orders.

13.  Certain banks in the Identified Jurisdictions, holding significant assets of Ms Ding, have either replied that they require local court orders for compliance with the terms of the HK and/or UK Injunction Orders, or did not acknowledge or respond to the letters from CEG’s solicitors, which are summarised in the table below in CEG’s skeleton submissions (with bank account details omitted):

Jurisdiction	Bank	Approximate Total Value	Responses
Canada	Bank of Montreal	CAD 9 million	Local order required for the bank to comply with the HK Injunction Order.
	Canadian Imperial Bank of Commerce (“CIBC”)	CAD 28 million	Local order required for the bank to comply with the HK Injunction Order.
	Royal Bank of Canada	CAD 100 million	Local order required for the bank to comply with the HK and UK Injunction Orders.
Gibraltar	Bank J. Safra Sarasin (Gibraltar) Limited	USD 57.6 million	Local order required for the bank to comply with the HK and UK Injunction Orders.
Jersey	Barclays Bank Plc	GBP 675,593.61	No response received.
Singapore	Bank J. Sarasin Limited Singapore	USD 71 million	Local order required for the bank to comply with the UK Injunction Order. No response received in respect of the HK Injunction Order.

C.  Legal Principles

14.  The undertakings require CEG to obtain the leave from the Court to seek to enforce the HK Injunction Order outside Hong Kong or seek an order of a similar nature (except for the UK, the Cayman Islands, and the BVI), which is in the standard form language.

15.  The primary justification as relied upon by CEG for seeking grant of leave to enforce abroad a Mareva injunction is that doing so will render the injunction effective in safeguarding the applicant’s position in respect of assets located abroad: Dadourian Group International Inc v Simmons and Ors [2006] 3 All ER 48 at §27.

16.  Second, in the determination as to whether to grant permission, the following guidelines (i.e. Dadourian guidelines), which have been recognised and adopted by the Hong Kong Courts in RACP Pharmaceutical Holdings v Li Xiaobo [2007] 2 HKLRD 331 at §9 and Agritrade Resources v Ashok Kumar Sahoo [2021] HKCFI 685 at §138), will be taken into consideration by the Court, in particular:

(1)  The grant of permission should be just and convenient for the purpose of ensuring the effectiveness of the worldwide freezing order and in addition that it is not oppressive to the parties to the local proceedings or to third parties who may be joined to the foreign proceedings;

(2)  All relevant circumstances and options need to be considered. In particular, consideration should be given to granting relief on terms, for example, terms as to the extension to third parties with the undertaking to compensate for costs incurred as a result of the worldwide freezing order and as to the type of proceedings that may be commenced abroad, proportionality of the steps proposed to be taken abroad and in addition to the form of any order; and

(3)  There must be evidence of a risk of dissipation of the assets in question.

17.  Third, in respect of the issue on risk of dissipation, the following principles are relevant:

(1)  Where it can be demonstrated that there is a real prospect that the assets in relation to which the applicant wishes to bring foreign proceedings are assets beneficially owned by the defendant, the burden on the applicant to show risk of dissipation is likely to be satisfied by the evidence in support of the original injunction order: Dadourian Group at §48;

(2)  The fact that the defendant has been compliant with the injunction order is not a bar to relief, because there is no guarantee that the defendant will continue to be compliant in the future and the plaintiff could be left unprotected: Arcadia Petroleum Ltd v Bosworth [2015] EWHC 3700 (Comm) at §71.

18.  Mr Chen firstly emphasised that there are “twin concerns” – see Bankas Snoras AB (a company incorporated pursuant to the laws of the Republic of Lithuania) v Antonov [2018] EWHC 887 (Comm) at §44 – as addressed by the undertakings, mainly:

(1)  the avoidance of the oppression of the defendant by the institution of multiple proceedings for the enforcement of the local freezing order in several countries at the expense of the ability of the defendant to defend the local proceedings;

(2)  the prevention of the enforcement of the freezing order in a foreign jurisdiction having a more far-reaching effect in that jurisdiction than locally, for example by creating a security interest in favour of the claimant.

19.  In Agritrade Resources Limited through the Joint Provisional Liquidators Ng Kian Kiat, Oon Su Sun and E Alexander Whittaker [2021] HKCFI at §122, it was further added that:

The theme is to prevent abuse of this exceptional and extreme relief (i.e. Worldwide Mareva injunction) from being used as a means of oppression on the defendant. To address these concerns, the undertakings are imposed to ensure the court’s jurisdiction is not being abused or invoked on a temporary basis for tactical reasons or ulterior purposes; to ensure that a defendant will not be harassed more than necessary; and to enable the court to police the circumstances in which the applicant sought to use the relief obtained, in particular the disclosures, as a means to obtain further or greater or oppressive relief against the defendant abroad. It is these concerns which gave rise to the undertaking.

20.  Second, the Court has to consider whether it is “just and convenient” to grant the relaxation sought (Dadourian Group International; Agritrade Resources at §138), and in particular “there must be evidence of a risk of dissipation of the assets in question” (Agritrade Resources at §138(7)).

21.  Third, the Dadourian guidelines are not intended to be a straitjacket. They revolve around the general principles discussed earlier, namely, abuse of this form of exceptional and extreme relief, multiplicity of proceedings and oppression to the defendant (Agritrade Resources at §139).

D.  Just and convenient

22.  Having considered the arguments relied upon and affirmation evidence filed by the parties, I accept CEG’s submission that the order sought is necessary for ensuring the effectiveness of the HK Injunction Order for the following reasons.

23.  First, Ms Ding has disclosed assets exceeding US$220 million across the four Identified Jurisdictions (see above table), which are subject to the HK Injunction Order prohibiting her from in any way disposing of, dealing with, or diminishing the value of, any (1) Dividend Assets and (2) assets up to a value of US$358.5 million. Without enforcing the HK Injunction Order in each of the Identified Jurisdictions, the Plaintiff has no way to ensure that the HK Injunction Order is effective as against the US$220 million identified in those jurisdictions.

24.  Second, it is plain from the nature of the responses received or absent from the banks (see table above) that the only way to ensure the effectiveness of the HK Injunction Order as against the US$220 million in the Identified Jurisdictions is to obtain local orders in those jurisdictions and enforce them against the banks holding Ms Ding’s behalf.

25.  Third, in response to the above, the two points made in the affirmation evidence filed on behalf of Ms Ding do not provide adequate assurance that the HK Injunction Order is effective in respect of the US$220 million in the identified Jurisdictions because:

(1)  In a letter from CIBC’s solicitors dated 11 November 2024, it is stated that CIBC has frozen Ms Ding’s accounts and intends to keep them frozen pending clarification of what steps she intends to take with respect to the applicability of the Mareva Injunction to her CIBC accounts, which provide no sufficient comfort where it appears to anticipate that any freeze on assets applied by CIBC might be lifted at its election and without first obtaining its agreement. CEG does not have any control over what “clarifications” Ms Ding may provide to CIBC, and it is unclear whether CIBC may unfreeze the accounts in future. The grant of local relief remains necessary, just and appropriate in circumstances where: (a) CIBC’s clear response is that CIBC requires a Canadian court order; and (b) CIBC is only one of the three banks which holds Ms Ding’s assets in Canada.

(2)  Ms Ding’s promise is merely self-policing (as offered in Chan 4 at §11).

26.  As regards the alleged uncooperative and unnecessarily defensive approach taken by Ms Ding, the main thrust of CEG’s argument is that additional time and costs are required to ascertain whether Ms Ding has properly complied with the Injunction Orders and that Ms Ding’s reluctance to address the Plaintiff’s reasonable enquiries makes it difficult for the Plaintiff to rely on her self-policing of the Injunction Orders.

27.  I find it fair for CEG to assert that Ms Ding has adopted a “generally uncooperative approach” (in the solicitors for CEG’s words) to the proceedings in Hong Kong and England, which poses difficulties for CEG to ascertain if Ms Ding is complying with the terms of the Order, as illustrated by the following matters:

(1)  Ms Ding’s abrupt change in position in respect of Carnation Way Properties owned by her and managed by Jones Lang Lasalle (“JLL”) shows, at best, a lack of understanding of the UK and Injunction Orders, or at worst, a blatant disregard for their terms.

(2)  Ms Ding’s account with Sarasin: despite CEG’s requests, Ms Ding has refused to provide any information that would verify the circumstances and timing of the redemption of the settlement sum about 23 July 2024 (i.e. just a week after she was served with the Chabra injunction).

(3)  Ms Ding’s accounts with CIBC: the Plaintiff has encountered difficulties in verifying information regarding Ms Ding’s compliance with the HK Injunction Order, as illustrated by the correspondence relating to Ms Ding’s accounts with CIBC, the details of which need not be repeated herein.

E.  Risk of dissipation

28.  CEG has emphasised that this Court has already determined in granting the HK Injunction Order (as has the English Court in granting the UK Injunction Order) that there exists a real risk of dissipation by Ms Ding, and that determination was made after receiving CEG’s evidence which in line with Dadourian Group is relied upon by CEG to demonstrate the continued risk of dissipation by Ms Ding. That risk of dissipation is even stronger in the light of the matters relied upon by CEG as set out above.

29.  I acknowledge that in response, Mr Chen submitted that the matters as relied upon by CEG do not even show Ms Ding had any intention to dissipate her assets in the Identified Jurisdictions for the following reasons:

(1)  Whether the banks in the Identified Jurisdiction, which had their own concerns and were presumably advised by their lawyers on what to do, responded to CEG’s request is beyond Ms Ding’s control.

(2)  CEG’s prior speculation on Ms Ding’s change in travel plan as part of any plan to dissipate her assets is entirely unfounded and unjustified.

(3)  As to the alleged lack of co-operation by Ms Ding, CEG and Ms Ding are engaged in a hotly contentious litigation, and the latter’s duty is just to comply with court orders.

30.  As to CEG’s alleged difficulty in ascertaining if Ms Ding is complying with the terms of the Order and will continue to do so (regarding three matters, namely Ms Ding’s (a) alleged abrupt change of position in respect of JLL’s management of the Carnation Way Properties, (b) account with Sarasin and (c) account with CIBC), Mr Chen provided submissions in reply at some length, but I do not think they need to be rehearsed at that same length in this Decision.

31.  The submissions of Mr Chen are in summary that:

(1)  there is no basis to infer that Ms Ding has any intention to dissipate her assets or not to comply with orders of any courts;

(2)  it is factually incorrect and unfair for CEG to make submission that Ms Ding has refused to provide information required for verification of her assertions, circumstances and timing in relation to the redemption of a Senior Loan Fund, and in particular CEG’s request for documentation showing the source of fund is entirely unjustified as such documents are wholly irrelevant to whether the Senior Loan Fund (and the proceeds) forms part of the non-Dividends Assets; and

(3)  CEG’s complaint is entirely unjustified as it has only presented a partial picture, which cannot be taken to infer any intention of Ms Ding to dissipate assets or any failure of Ms Ding in providing explanation as regards CEG’s “concerns”.

32.  Ms Ding’s application for discharge of the HK Injunction Order (“Discharge Application”) was heard by this Court on 21 March 2025. I have reserved my decision to be handled down later. Mr Chen submits that because of the interaction between the real risk of dissipation for the purposes of this Variation of Jurisdiction application and those of Ms Ding’s Discharge Application, the determination of this application should wait until determination of the Discharge Application. With respect, I do not agree that as a matter of better case management, this application should only be determined after the result of Ms Ding’s Discharge Application is known.

33.  I accept CEG’s submission that unless and until Ms Ding succeeds in the Discharge Application, the HK Injunction Order is in effect and CEG should be entitled to ensure its effectiveness in the Identified Jurisdictions. In particular, it seems to me that there is a proper basis for CEG to suggest that without enforcing the HK Injunction Order in the Identified Jurisdictions, it has no way to ensure that the HK Injunction Order is effective as against the US$220 million identified in those jurisdictions.

F.  Asserted Prejudice and Proportionality

34.  Mr Chen’s submissions on the prejudice and potential oppression to Ms Ding can be summarised as follows:

(1)  substantial legal costs will be incurred by Ms Ding to instruct legal representatives and seek legal assistance in the Identified Jurisdictions (in view of the scale of the litigation between CEG and her and the fact that she is not residing in those jurisdictions), which causes funding issues to her due to the current sole useable source of funds and will make her end up undefended – a prospect is highly oppressive and will lead to substantial prejudice to her;

(2)  as Ms Ding is currently subject to both the HK Injunction Order and the UK Injunction Order, she simply had and has no intention not to obey either of them, which in particular will make her liable to be prosecuted for contempt of court for breaching the UK Order (as she is currently residing in the UK); and

(3)  Ms Ding was informed by some banks in those jurisdictions that they would require consent from CEG before proceeding with handling the funds in the relevant accounts, for example CIBC.

35.  Though I see some force in Mr Chen’s submissions, I am of the view that the balance of convenience is in favour of granting the Variation sought.

36.  In consideration of the applicable legal principles and evidence filed by the parties, I accept the following submissions made by CEG:

(1)  the issues of proportionality and oppression to the other parties ought to be weighted in the balance against the interests of the Plaintiff in enforcing the HK Injunction Order;

(2)  the Variation sought is proportionate as a tailored response to Ms Ding’s asset disclosure, will not cause any undue oppression or prejudice to Ms Ding or others and is to ensure the HK Injunction Order is effective;

(3)  the Variation sought is limited in the following ways:

(a)  it does not enable CEG to bring any type of civil or criminal proceedings in the Identified Jurisdictions and is expressly limited to enabling CEG to commence proceedings to enforce, recognise or seek other relief mirroring the terms of the HK Injunction Order, and to use information obtained as a result of the HK Injunction Order for the purpose of those proceedings; and

(b)  it does not entitle CEG to commence proceedings in any possible jurisdiction and is limited to the Identified Jurisdictions on the grounds that (i) there is available in each of those jurisdictions relief equivalent to the relief granted by the HK Injunction Order and (ii) there is a need for such relief in those jurisdictions in order to give effect to the HK Injunction Order.

37.  As to Mr Chen’s point about substantial legal costs to be incurred by Ms Ding in requiring legal assistance, with respect, I disagree for the following reasons as relied upon by CEG in its Reply:

(1)  There is no reason to suggest that CEG would, without leave of the Hong Kong Court, seek orders in the Identified Jurisdictions which are beyond or different in scope to the HK Injunction Order.

(2)  The fact that CEG will need to apply afresh rather than by way of direct recognition of the HK Injunction Order in certain of the jurisdictions may well increase costs to be incurred by CEG (though I am also of the view that it would be impossible that there is no impact at all on Ms Ding if CEG commences proceedings in the Identified Jurisdictions).

G.  Result

38.  For the reasons given above, I make an order in terms of the Jurisdiction Variation Summons (as amended by consent).

39.  The costs of the Jurisdiction Variation Summons shall be paid by Ms Ding to the Plaintiff, to be taxed if not agreed.