PETER LIT MA v. MICHAEL CHEN KANG HUANG AND ANOTHER

PETER LIT MA v. MICHAEL CHEN KANG HUANG AND ANOTHER

The defendant failed to overcome the first hurdle under Ostrich Farming by not providing a full and frank account of his finances nor demonstrating no other available funds or an arguable proprietary interest; the court therefore refused to exercise its discretion to permit use or sale of frozen assets and dismissed...

Source-derived case information.

Citation
PETER LIT MA v. MICHAEL CHEN KANG HUANG AND ANOTHER
Parties
Applicant / Judgment Debtor / Defendant: PETER LIT MA; 1st Respondent / 1st Judgment Creditor / 1st Plaintiff: MICHAEL CHEN KANG HUANG; 2nd Respondent / 2nd Judgment Creditor / 2nd Plaintiff: EUROMAT WORLDWIDE LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
27 August 2007
Case Number
HCSD9/2007
Procedural Posture
HCSD 9/2007 (application to Set Aside Statutory Demand) and HCA 218/2005 (action for Deceit, Fraudulent Misrepresentation and Money Had and Received) / Interlocutory Hearing on Mareva Variation and Statutory Demand (heard 21 August 2007)
Outcome
Application to set aside statutory demand dismissed; defendant's summons to vary Mareva dismissed; plaintiffs' summons allowed to remove the HK$5,000 per week withdrawal; costs to plaintiffs to be taxed on a party and party basis.
Legal Topics
Mareva Injunction, Statutory Demand Setting Aside, Proprietary Claim to Frozen Assets, Application to Use Frozen Funds for Legal Costs and Living Expenses, Full and Frank Financial Disclosure
Source Language
en
Bankruptcy Injunctions Trusts and Proprietary Claims Civil Fraud Civil Costs Mareva Injunction Statutory Demand Setting Aside Proprietary Claim to Frozen Assets +2 more

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Parties

PETER LIT MA

Applicant / Judgment Debtor / Defendant

MICHAEL CHEN KANG HUANG

1st Respondent / 1st Judgment Creditor / 1st Plaintiff

EUROMAT WORLDWIDE LIMITED

2nd Respondent / 2nd Judgment Creditor / 2nd Plaintiff

Procedural Posture

HCSD 9/2007 (application to Set Aside Statutory Demand) and HCA 218/2005 (action for Deceit, Fraudulent Misrepresentation and Money Had and Received) / Interlocutory Hearing on Mareva Variation and Statutory Demand (heard 21 August 2007)

Legal Issues

  1. 1 Whether the statutory demand based on costs should be set aside
  2. 2 Whether the defendant may use frozen funds or sell enjoined property to meet legal costs and living expenses
  3. 3 Whether the defendant satisfied the two-stage test (no other funds and arguable proprietary interest) and gave a full and frank account of finances

Ratio Decidendi

The defendant failed to overcome the first hurdle under Ostrich Farming by not providing a full and frank account of his finances nor demonstrating no other available funds or an arguable proprietary interest; the court therefore refused to exercise its discretion to permit use or sale of frozen assets and dismissed the application to set aside the statutory demand and the defendant's Mareva variation summons while allowing the plaintiffs' summons to remove the weekly withdrawal exception.

Court Disposition

Application to set aside statutory demand dismissed; defendant's summons to vary Mareva dismissed; plaintiffs' summons allowed to remove the HK$5,000 per week withdrawal; costs to plaintiffs to be taxed on a party and party basis.

Orders

  • Application to set aside the statutory demand dated 31 January 2007 dismissed.
  • Defendant's summons dated 12 April 2007 (to vary Mareva to permit sale of Flat F and payment of costs and legal fees) dismissed.