TAIHAN ELECTRIC WIRE CO LTD AND ANOTHER v. LEE CHI YUEN ARCTIC AND OTHERS

TAIHAN ELECTRIC WIRE CO LTD AND ANOTHER v. LEE CHI YUEN ARCTIC AND OTHERS

The application for a Mareva injunction was dismissed because the plaintiffs failed to show a good arguable case on the merits when the case depended heavily on Lau whose credibility was undermined by inconsistencies and his failure to file an affidavit in reply; the balance of convenience favored defendants in light of the prejudice to D5 and doubts about causation and completeness of evidence; therefore freezing relief was unjustified.

Citation
TAIHAN ELECTRIC WIRE CO LTD AND ANOTHER v. LEE CHI YUEN ARCTIC AND OTHERS
Parties
1st Plaintiff: Taihan Electric Wire Company Limited; 2nd Plaintiff: Taihan Global Holdings Limited; 1st Defendant: Lee Chi Yuen; 5th Defendant: D5 (Lee's company); 6th Defendant: D6; 7th Defendant: D7
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
1 November 2013
Case Number
HCA454/2013
Procedural Posture
Civil Interlocutory Application for Mareva (freezing) Injunction / Inter Partes Hearing of Interim Mareva Injunction Application (applications Dismissed)
Outcome
Application for Mareva (freezing) injunction dismissed
Legal Topics
Mareva Injunction, Dishonest Assistance, Constructive Trust, Conversion, Breach of Fiduciary Duty, Disclosure Obligations, Fortification of Undertaking, Agency Vs Principal
Source Language
EN
Equity Trusts Injunctions Fraud Civil Procedure Commercial Law Mareva Injunction Dishonest Assistance +6 more

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Parties

Taihan Electric Wire Company Limited

1st Plaintiff

Taihan Global Holdings Limited

2nd Plaintiff

Lee Chi Yuen

1st Defendant

D5 (Lee's company)

5th Defendant

D6

6th Defendant

D7

7th Defendant

Procedural Posture

Civil Interlocutory Application for Mareva (freezing) Injunction / Inter Partes Hearing of Interim Mareva Injunction Application (applications Dismissed)

Legal Issues

  1. 1 Whether plaintiffs have a good arguable case that defendants acted as agents and misappropriated sale proceeds
  2. 2 Whether there is a real risk of dissipation of assets warranting a Mareva injunction
  3. 3 Whether defendants D5–D7 hold property on constructive trust

Ratio Decidendi

The application for a Mareva injunction was dismissed because the plaintiffs failed to show a good arguable case on the merits when the case depended heavily on Lau whose credibility was undermined by inconsistencies and his failure to file an affidavit in reply; the balance of convenience favored defendants in light of the prejudice to D5 and doubts about causation and completeness of evidence; therefore freezing relief was unjustified.

Court Disposition

Application for Mareva (freezing) injunction dismissed

Orders

  • Application dismissed
  • Costs of the application to be borne by Taihan Global Holdings Limited (TGH) on a nisi basis with certificates for two counsel