CHINA METAL RECYCLING (HOLDINGS) LTD (IN PROVISIONAL LIQUIDATION) AND ANOTHER v. CHUN CHI WAI AND OTHERS

CHINA METAL RECYCLING (HOLDINGS) LTD (IN PROVISIONAL LIQUIDATION) AND ANOTHER v. CHUN CHI WAI AND OTHERS

Court found on the evidence that the 1st and 13th defendants had not fully and properly complied with the Chan Order; it was just, proportionate and within jurisdiction to make a modified unless order requiring full disclosure within 14 days and providing for striking out/entry of judgment if not complied with; the Variation Summons was dismissed because the defendants failed to demonstrate necessity or absence of other funding and because retrospective variation to sanction past loans was inappropriate, and the court applied the Ablyazov line that unsecured drawdown rights do not automatically amount to an "asset" under a standard freezing order but declined to grant the variation in any...

Citation
CHINA METAL RECYCLING (HOLDINGS) LTD (IN PROVISIONAL LIQUIDATION) AND ANOTHER v. CHUN CHI WAI AND OTHERS
Parties
1st Plaintiff: CHINA METAL RECYCLING (HOLDINGS) LIMITED (IN PROVISIONAL LIQUIDATION); 2nd Plaintiff: CENTRAL STEEL (MACAO COMMERCIAL OFFSHORE) LIMITED (IN PROVISIONAL LIQUIDATION); 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
17 November 2014
Case Number
HCA1412/2013
Procedural Posture
Civil Freezing Injunction (mareva) and Disclosure Proceedings Arising From Alleged Large‑scale Fraud / Interlocutory Applications (variation Summons and Unless Order Summons); Decision on Interlocutory Applications by Court of First Instance
Outcome
Unless order granted in modified terms; Variation Summons dismissed.
Legal Topics
Mareva Injunction, Freezing Order, Disclosure Obligations, Unless Order, Variation of Injunction, Costs
Source Language
EN
Civil Procedure Injunctions Company Law Fraud Asset Preservation Mareva Injunction Freezing Order Disclosure Obligations +3 more

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Parties

CHINA METAL RECYCLING (HOLDINGS) LIMITED (IN PROVISIONAL LIQUIDATION)

1st Plaintiff

CENTRAL STEEL (MACAO COMMERCIAL OFFSHORE) LIMITED (IN PROVISIONAL LIQUIDATION)

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 Freezing Injunction (mareva) and Disclosure Proceedings Arising From Alleged Large‑scale Fraud / Interlocutory Applications (variation Summons and Unless Order Summons); Decision on Interlocutory Applications by Court of First Instance

Legal Issues

  1. 1 Whether the 1st and 13th defendants have fully and properly complied with the disclosure order (the Chan Order)
  2. 2 Whether an unless order striking out the defence and permitting judgment should be made for non‑compliance
  3. 3 Whether the 1st defendant's unsecured loan facility and drawdowns to pay legal costs breached the Re‑Amended Injunction Order

Ratio Decidendi

Court found on the evidence that the 1st and 13th defendants had not fully and properly complied with the Chan Order; it was just, proportionate and within jurisdiction to make a modified unless order requiring full disclosure within 14 days and providing for striking out/entry of judgment if not complied with; the Variation Summons was dismissed because the defendants failed to demonstrate necessity or absence of other funding and because retrospective variation to sanction past loans was inappropriate, and the court applied the Ablyazov line that unsecured drawdown rights do not automatically amount to an "asset" under a standard freezing order but declined to grant the variation in any...

Court Disposition

Unless order granted in modified terms; Variation Summons dismissed.

Orders

  • 1. The 1st and 13th defendants shall, within 14 days, each serve an affidavit or affirmation fully and properly complying with the Chan Order (providing full disclosure of all assets of individual value HK$50,000 or more, explanations for dispositions between 30 July 2013 and the date of the affidavit, full...
  • 2. Unless the 1st and 13th defendants comply with the above within the time specified, their defence shall be struck out and the plaintiffs shall be at liberty to enter judgment against them in this action with costs.