LUAN GANG AND OTHERS v. CAL DIVE OFFSHORE CONTRACTORS (MAURITIUS) LTD

LUAN GANG AND OTHERS v. CAL DIVE OFFSHORE CONTRACTORS (MAURITIUS) LTD

The court held that variation of a restraint order at the interlocutory stage to pay unsecured creditors or to release funds for legal costs is permissible only where there are ample assets such that the variation will not frustrate the purpose of any future confiscation order; the SJ’s material (including the PRC expert report and account flows) provided reasonable cause to believe the respondents benefited from specified offences and no inordinate delay was shown; the applications by the 5th respondent and Intervener to vary the order to pay the arbitration award and legal costs were refused except for limited paragraphs previously granted on 13 December 2012; costs nisi awarded to the...

Citation
LUAN GANG AND OTHERS v. CAL DIVE OFFSHORE CONTRACTORS (MAURITIUS) LTD
Parties
1st Respondent: Male Luan Gang; 2nd Respondent: Luan Hong (Female); 3rd Respondent: Li Sanyue (Female); 4th Respondent: Tian Lingyue (Female); 5th Respondent (applicant to Vary Restraint Order): Offtech International Limited; 6th Respondent: Bluewhale Offshore Engineering Technology Co. Ltd.; 7th Respondent: Grand Plus Investment Limited; Intended Intervener: Cal Dive Offshore Contractors (Mauritius) Ltd; Applicant / Prosecution: Secretary for Justice
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
23 January 2013
Case Number
HCMP409/2011
Procedural Posture
Variation of Restraint Order Under Organized and Serious Crimes Ordinance (cap 455) / Interlocutory Application to Vary Restraint Order (application Dated 10 Aug 2012 and Intervener Summons 11 Dec 2012)
Outcome
Application to vary the restraint order refused in major part; limited amendments previously granted on 13 December 2012 are maintained; costs nisi awarded in favour of the Secretary for Justice against the 5th respondent and the Intervener jointly and severally.
Legal Topics
Restraint Order, Variation of Restraint Orders, Priority of Unsecured Creditors, Confiscation Orders, Money Laundering, Admissibility and Weight of Out‑of‑jurisdiction Reports, Legal Costs From Restrained Funds
Source Language
EN
Criminal Law Confiscation and Restraint Law Procedural Law Cross‑border/international Law Restraint Order Variation of Restraint Orders Priority of Unsecured Creditors Confiscation Orders +3 more

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Parties

Male Luan Gang

1st Respondent

Luan Hong (Female)

2nd Respondent

Li Sanyue (Female)

3rd Respondent

Tian Lingyue (Female)

4th Respondent

Offtech International Limited

5th Respondent (applicant to Vary Restraint Order)

Bluewhale Offshore Engineering Technology Co. Ltd.

6th Respondent

Grand Plus Investment Limited

7th Respondent

Cal Dive Offshore Contractors (Mauritius) Ltd

Intended Intervener

Secretary for Justice

Applicant / Prosecution

Procedural Posture

Variation of Restraint Order Under Organized and Serious Crimes Ordinance (cap 455) / Interlocutory Application to Vary Restraint Order (application Dated 10 Aug 2012 and Intervener Summons 11 Dec 2012)

Legal Issues

  1. 1 Whether court has discretion at restraint order stage to vary a restraint order to pay a bona fide unsecured creditor
  2. 2 Whether a bona fide unsecured creditor can obtain priority over assets preserved for a future confiscation order
  3. 3 What evidential standard and material is necessary to obtain or support a restraint order

Ratio Decidendi

The court held that variation of a restraint order at the interlocutory stage to pay unsecured creditors or to release funds for legal costs is permissible only where there are ample assets such that the variation will not frustrate the purpose of any future confiscation order; the SJ’s material (including the PRC expert report and account flows) provided reasonable cause to believe the respondents benefited from specified offences and no inordinate delay was shown; the applications by the 5th respondent and Intervener to vary the order to pay the arbitration award and legal costs were refused except for limited paragraphs previously granted on 13 December 2012; costs nisi awarded to the...

Court Disposition

Application to vary the restraint order refused in major part; limited amendments previously granted on 13 December 2012 are maintained; costs nisi awarded in favour of the Secretary for Justice against the 5th respondent and the Intervener jointly and severally.

Orders

  • Summons of the 5th respondent dated 10 August 2012: paragraphs 1(a)(i) to (iii) refused
  • Summons of the 5th respondent dated 10 August 2012: paragraph 1(b) as amended already granted on 13 December 2012