KCMA v. ABC AND OTHERS

KCMA v. ABC AND OTHERS

The court concluded there was non-compliance with the 1st Undertaking by H (unilateral distribution/reimbursement requests, withdrawals and charging of trust-related assets) and, given continuing control by H as Investment Director and absence of full financial disclosure, there remained a real risk of dissipation;...

Source-derived case information.

Citation
[2019] HKCFI 2873
Parties
Petitioner: KCMA; 1st Respondent: ABC; 2nd Respondent Trustee of the Family Trust: PBB; 3rd Respondent Trustee of the Education Trust: PBB; 4th Respondent: K
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
22 November 2019
Case Number
HCMC1/2019
Procedural Posture
Matrimonial Causes (ancillary Relief / Enforcement Applications Relating to Trusts) / High Court (court of First Instance) Decision on Injunction and Discovery Applications (chambers)
Outcome
Injunction granted in part against H; undertakings accepted in part; orders against Trustee and K dismissed; discovery adjourned sine die with liberty to restore
Legal Topics
Mareva Injunction, Proprietary Injunction, Section 17 MPPO Presumption, Undertakings, Discovery Against Persons in Possession Custody or Power, Decanting and Change of Trust Administration, Cross Jurisdictional Proceedings (bvi/nevada)
Source Language
en
Family Law Trusts and Trustees Injunctions Civil Procedure International Trusts/companies Mareva Injunction Proprietary Injunction Section 17 MPPO Presumption +4 more

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Parties

KCMA

Petitioner

ABC

1st Respondent

PBB

2nd Respondent Trustee of the Family Trust

PBB

3rd Respondent Trustee of the Education Trust

K

4th Respondent

Procedural Posture

Matrimonial Causes (ancillary Relief / Enforcement Applications Relating to Trusts) / High Court (court of First Instance) Decision on Injunction and Discovery Applications (chambers)

Legal Issues

  1. 1 Whether interim injunctions (Mareva or proprietary) should be granted restraining distributions/withdrawals and other trust alterations
  2. 2 Whether settlor/Investment Director (H) breached undertakings and whether there is real risk of dissipation
  3. 3 Whether injunctions should be made directly against the Trustees or K (4th respondent)

Ratio Decidendi

The court concluded there was non-compliance with the 1st Undertaking by H (unilateral distribution/reimbursement requests, withdrawals and charging of trust-related assets) and, given continuing control by H as Investment Director and absence of full financial disclosure, there remained a real risk of dissipation; accordingly an injunction was just and convenient and granted against H restraining distributions/withdrawals and related extractions from the US Trusts (subject to ordinary proper expenses and W agreement or court leave), but no injunction was made directly against the Trustees or K because there was insufficient evidence they would dissipate assets or that they possessed the...

Court Disposition

Injunction granted in part against H; undertakings accepted in part; orders against Trustee and K dismissed; discovery adjourned sine die with liberty to restore

Orders

  • Injunction in terms of paragraph 2a of the Summons against H restraining him from making or causing distributions, withdrawals, lending, provision of collateral, borrowing or any form of extractions from the US Trusts, save for ordinary and proper expenses of maintenance and/or save as agreed by W or ordered by the...
  • H's undertaking in respect of paragraph 2b (No Parting With Possession re Indian Apartment) accepted; full address/description to be stated