IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO. 1 OF 2008
Coram : Deputy High Court Judge Carlson in Chambers
Date of Hearing : 25 January 2008
Date of Ruling : 25 January 2008
R U L I N G
1. What I am required to rule on this afternoon is short. The 1st defendant is inviting me to vary the existing ex-parte Mareva injunction dated 31 December last to permit it to pay its reasonable business expenses and legal fees.
2. Mr Smith, SC, who appears for the plaintiff has suggested that this is already provided for under the terms of the existing ordercircumscribed by what, in the circumstances, might be reasonable. Nevertheless, it seems to me that Mr Scott, SC, is right in sayingthat I should provide an amount, otherwise the bank or banks which hold the 1st defendant’s account will not be able to releaseany money. In the circumstances, I will in a moment provide what I judge to be a reasonable amount as matters presently stand.
3. The next issue concerns fortification of the plaintiffs’ undertaking in damages; something over $11 million is sought by the 1stdefendant. Lastly, I also need to make some ancillary orders which I will do presently.
4. As to the amount for business expenses, a sum of $28,787,260 is asked for, justification for which is to be found in bundle E, pages263 and 264, which will enable the project to continue, this all coming from the first affirmation of Mr Kwan Wah-kwun dated 24 Januarythis year.
5. I propose to allow this to be spent as a maximum at this stage on terms of the 1st defendant provides the plaintiff, on a fortnightlybasis, a schedule setting out the amount spent on its business expenses and bank accounts from which those expenses are met; secondly,copies of documents supporting and/or demonstrating the payments made in each case.
6. Mr Smith had suggested that this should come on a weekly basis. It seems to me that fortnightly is probably less onerous and issufficiently frequent to protect the plaintiffs’ interests. I will also allow $1 million to be withdrawn for legal expenses.
7. I now turn to fortification. The plaintiffs being overseas companies with no assets to speak of in Hong Kong, Mr Justice Reyeshas ordered the plaintiff to provide $8 million to the 2nd defendant but the basis for that amount is different from that which isput forward on the 1st defendant’s behalf, putting its potential losses at this more substantial figure of $11 million and theselosses are sought to be justified at pages 254A, B, C and D of bundle E.
8. In this regard, Mr Smith has addressed a number of persuasive submissions as to why I should order, in effect, a nominal amount. But it seems to me that Mr Scott has been able to demonstrate a proper basis for saying that the 1st defendant faces very substantiallosses arising from this injunction if it turns out that the injunction should not have been ordered.
9. I propose to err on the side of conservatism if only because this can be looked at again if need be. Fortification should be providedin the sum of $9 million on or before 31 January, the terms of the order being as appear in (d) on page 2 of Mr Scott’s skeleton. I will also extend the 1st defendant’s time for service of its defence and counter-claim to 27 February this year and say thattoday’s costs should be reserved, in the first instance, to 1 February when I will hear the substantive argument as to whetherthe injunction can stand. This order will go with certificate for two counsel.
10. So the order therefore will be as appears at paragraph 5 of Mr Scott’s skeleton with the additions that I have just provided inthis ruling. I think that is all I need to say.
Clifford Smith, SC and Frances Lok, instructed by Messrs Robertsons, for the 1st and 2nd Plaintiff
John Scott, SC and Janine Cheung, instructed by Messrs Richards Butler, for the 1st Defendant