CHINA METAL RECYCLING (HOLDINGS) LTD (Provisional Liquidators Appointed) v. CHUN CHI WAI AND OTHERS

CHINA METAL RECYCLING (HOLDINGS) LTD (Provisional Liquidators Appointed) v. CHUN CHI WAI AND OTHERS

The court held it has jurisdiction to order further disclosure in aid of a freezing injunction where facts justify it; given the implausibility of defendants' prior disclosures and the sums received, a further targeted disclosure was warranted but paragraph 1(b) must be amended to require disclosure of what has become of proceeds or assets of individual value HK$50,000 or more that have been disposed of, encumbered or otherwise dealt with since 30 July 2013; the court granted the amended disclosure order and refused to impose immediate striking‑out, giving defendants one further opportunity; costs ordered to plaintiffs.

Citation
CHINA METAL RECYCLING (HOLDINGS) LTD (Provisional Liquidators Appointed) v. CHUN CHI WAI AND OTHERS
Parties
1st Plaintiff: China Metal Recycling (Holdings) Limited (Provisional Liquidators Appointed); 2nd Plaintiff: Central Steel (Macao Commercial Offshore) Limited (Provisional Liquidators Appointed); 1st Defendant: Chun Chi Wai; 2nd Defendant: Lai Wun Yin; 3rd Defendant: Lane Tone (HK) Material Limited; 4th Defendant: Jason Metal Recycle Corp; 5th Defendant: Cheung Fat Metal Recycling Company Limited; 6th Defendant: Qi Le Metal Recycling Co; 7th Defendant: Metallurgical Industry Limited; 8th Defendant: Hoi Cheung Metal Recycling Limited; 9th Defendant: Chak Kwan Metal Recycling Limited; 10th Defendant: Pacific Metal Recycle Limited; 11th Defendant: Healthy World Trading Ltd; 12th Defendant: Gold Dragon International Logistics Ltd; 13th Defendant: Wellrun Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
9 April 2014
Case Number
HCA1412/2013
Procedural Posture
Civil Commercial Freezing (mareva) Injunction and Ancillary Disclosure Application / Chambers Application for Further Disclosure by Way of Unless Order (decision)
Outcome
Further disclosure order granted in amended terms (temporal limit from 30 July 2013 and limited to proceeds/assets of individual value HK$50,000 or more disposed of/encumbered/dealt with); defendants given one further opportunity to comply; not struck out at this stage; costs to plaintiffs.
Legal Topics
Mareva Injunction, Disclosure of Assets, Unless Order (sanction), Variation of Injunction, Policing of Disclosure, Contempt
Source Language
EN
Civil Commercial Company Law Equity Injunctions Asset Tracing Mareva Injunction Disclosure of Assets +4 more

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Parties

China Metal Recycling (Holdings) Limited (Provisional Liquidators Appointed)

1st Plaintiff

Central Steel (Macao Commercial Offshore) Limited (Provisional Liquidators Appointed)

2nd Plaintiff

Chun Chi Wai

1st Defendant

Lai Wun Yin

2nd Defendant

Lane Tone (HK) Material Limited

3rd Defendant

Jason Metal Recycle Corp

4th Defendant

Cheung Fat Metal Recycling Company Limited

5th Defendant

Qi Le Metal Recycling Co

6th Defendant

Metallurgical Industry Limited

7th Defendant

Hoi Cheung Metal Recycling Limited

8th Defendant

Chak Kwan Metal Recycling Limited

9th Defendant

Pacific Metal Recycle Limited

10th Defendant

Healthy World Trading Ltd

11th Defendant

Gold Dragon International Logistics Ltd

12th Defendant

Wellrun Limited

13th Defendant

Procedural Posture

Civil Commercial Freezing (mareva) Injunction and Ancillary Disclosure Application / Chambers Application for Further Disclosure by Way of Unless Order (decision)

Legal Issues

  1. 1 Whether the court has jurisdiction to order further disclosure of assets to ascertain what has become of assets since grant of a Mareva injunction
  2. 2 Whether a disclosure order can be used to 'police' past dissipation or concealment of assets
  3. 3 Whether an unless order with striking-out/entry of judgment sanction is appropriate in the circumstances

Ratio Decidendi

The court held it has jurisdiction to order further disclosure in aid of a freezing injunction where facts justify it; given the implausibility of defendants' prior disclosures and the sums received, a further targeted disclosure was warranted but paragraph 1(b) must be amended to require disclosure of what has become of proceeds or assets of individual value HK$50,000 or more that have been disposed of, encumbered or otherwise dealt with since 30 July 2013; the court granted the amended disclosure order and refused to impose immediate striking‑out, giving defendants one further opportunity; costs ordered to plaintiffs.

Court Disposition

Further disclosure order granted in amended terms (temporal limit from 30 July 2013 and limited to proceeds/assets of individual value HK$50,000 or more disposed of/encumbered/dealt with); defendants given one further opportunity to comply; not struck out at this stage; costs to plaintiffs.

Orders

  • Order that defendants disclose what has become of proceeds of assets of individual value HK$50,000 or more which have been disposed of, encumbered or otherwise dealt with since 30 July 2013 (as amendment to paragraph 1(b) of the summons)
  • Costs of the application to the plaintiffs