CHU KONG AND ANOTHER v. LAU WING YAN AND OTHERS

CHU KONG AND ANOTHER v. LAU WING YAN AND OTHERS

Defendants failed to demonstrate sufficient justification to stay the ancillary disclosure orders because they did not prove Mr Lau's beneficial ownership and unencumbered status of the Hong Kong properties; the available Hong Kong property coverage (approx. US$10m) was insufficient against the mareva amount (approx. US$27m), creating a substantial shortfall and so the balance of prejudice favoured maintaining and varying the disclosure orders pending disposal of the discharge summonses.

Citation
[2021] HKCFI 181
Parties
1st Plaintiff (hca 227/2017): Canton Plus Enterprise Limited; 2nd Plaintiff (hca 227/2017): Anais Development Sa; 1st Defendant (hca 227/2017): Tong Zhenjun (童楨軍); 2nd Defendant (hca 227/2017): Liang Pan (梁攀); 3rd Defendant (hca 227/2017); Plaintiff (counterclaim HCA 227/2017); 1st Defendant (hca 1026/2020); 1st Defendant (hca 2132/2020): Lau Wing Yan (劉永人); 4th Defendant (hca 227/2017): Prosperous Elite Ventures Limited (鑫傑創投有限公司); 5th Defendant (hca 227/2017); 6th Defendant (hca 1026/2020): Pacific Bulk Cape Company Limited; 6th Defendant (hca 227/2017); 7th Defendant (hca 1026/2020): Pacific Bulk Enterprises Company Limited; 7th Defendant (hca 227/2017); 8th Defendant (hca 1026/2020): Pacific Bulk Panamax Company Limited; 8th Defendant (hca 227/2017); 9th Defendant (hca 1026/2020): Pacific Bulk Supramax Company Limited; 9th Defendant (hca 227/2017): Profit Far Limited (益遠有限公司); 10th Defendant (hca 227/2017): Pacific Bulk Shipping Limited; 1st Plaintiff (hca 1026/2020): Chu Kong; 2nd Plaintiff (hca 1026/2020): Trenus Oceanway Ltd; 2nd Defendant (hca 1026/2020): Chang Dafa (常大法); 3rd Defendant (hca 1026/2020): Richland International Limited; 4th Defendant (hca 1026/2020): Smartplace Limited; 5th Defendant (hca 1026/2020): Pacific Bulk Shipping (Cayman) Limited; 10th Defendant (hca 1026/2020): Ecosuccess Limited; Plaintiff (hca 2132/2020): Connect Plus Limited; 2nd Defendant (hca 2132/2020): Yang Haitao; 3rd Defendant (hca 2132/2020): Wat Fung Ying; 4th Defendant (hca 2132/2020): Yan Donghai; 5th Defendant (hca 2132/2020): Go Prosper International Limited; 6th Defendant (hca 2132/2020): Pacific Bulk Lines Company Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
15 January 2021
Case Number
HCA1026/2020
Procedural Posture
Interim Applications for Continuation/discharge of Ex Parte Mareva and Proprietary Injunctions (derivative Actions) / Return Day/interlocutory Stage (application to Stay Disclosure Orders; Substantive Discharge Summonses Adjourned)
Outcome
Stay application dismissed; interlocutory injunctions granted on 5 January 2021 continue until disposal of the discharge summonses or further order; disclosure orders maintained with specified variations; costs awarded to plaintiffs for the stay application.
Legal Topics
Mareva Injunction, Proprietary Injunction, Ancillary Disclosure Orders, Material Non Disclosure, Balancing of Prejudice, Costs
Source Language
EN
Civil Procedure Injunctions Company Law Shareholder Derivative Actions Asset Preservation Disclosure Mareva Injunction Proprietary Injunction +4 more

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Parties

Canton Plus Enterprise Limited

1st Plaintiff (hca 227/2017)

Anais Development Sa

2nd Plaintiff (hca 227/2017)

Tong Zhenjun (童楨軍)

1st Defendant (hca 227/2017)

Liang Pan (梁攀)

2nd Defendant (hca 227/2017)

Lau Wing Yan (劉永人)

3rd Defendant (hca 227/2017); Plaintiff (counterclaim HCA 227/2017); 1st Defendant (hca 1026/2020); 1st Defendant (hca 2132/2020)

Prosperous Elite Ventures Limited (鑫傑創投有限公司)

4th Defendant (hca 227/2017)

Pacific Bulk Cape Company Limited

5th Defendant (hca 227/2017); 6th Defendant (hca 1026/2020)

Pacific Bulk Enterprises Company Limited

6th Defendant (hca 227/2017); 7th Defendant (hca 1026/2020)

Pacific Bulk Panamax Company Limited

7th Defendant (hca 227/2017); 8th Defendant (hca 1026/2020)

Pacific Bulk Supramax Company Limited

8th Defendant (hca 227/2017); 9th Defendant (hca 1026/2020)

Profit Far Limited (益遠有限公司)

9th Defendant (hca 227/2017)

Pacific Bulk Shipping Limited

10th Defendant (hca 227/2017)

Chu Kong

1st Plaintiff (hca 1026/2020)

Trenus Oceanway Ltd

2nd Plaintiff (hca 1026/2020)

Chang Dafa (常大法)

2nd Defendant (hca 1026/2020)

Richland International Limited

3rd Defendant (hca 1026/2020)

Smartplace Limited

4th Defendant (hca 1026/2020)

Pacific Bulk Shipping (Cayman) Limited

5th Defendant (hca 1026/2020)

Ecosuccess Limited

10th Defendant (hca 1026/2020)

Connect Plus Limited

Plaintiff (hca 2132/2020)

Yang Haitao

2nd Defendant (hca 2132/2020)

Wat Fung Ying

3rd Defendant (hca 2132/2020)

Yan Donghai

4th Defendant (hca 2132/2020)

Go Prosper International Limited

5th Defendant (hca 2132/2020)

Pacific Bulk Lines Company Limited

6th Defendant (hca 2132/2020)

Procedural Posture

Interim Applications for Continuation/discharge of Ex Parte Mareva and Proprietary Injunctions (derivative Actions) / Return Day/interlocutory Stage (application to Stay Disclosure Orders; Substantive Discharge Summonses Adjourned)

Legal Issues

  1. 1 Whether ancillary disclosure orders should be stayed pending disposal of discharge summonses
  2. 2 Whether defendants have established beneficial ownership and encumbrance status of Hong Kong real property sufficient to obviate disclosure
  3. 3 How to balance defendant privacy/prejudice from disclosure against plaintiffs' risk of assets being dissipated

Ratio Decidendi

Defendants failed to demonstrate sufficient justification to stay the ancillary disclosure orders because they did not prove Mr Lau's beneficial ownership and unencumbered status of the Hong Kong properties; the available Hong Kong property coverage (approx. US$10m) was insufficient against the mareva amount (approx. US$27m), creating a substantial shortfall and so the balance of prejudice favoured maintaining and varying the disclosure orders pending disposal of the discharge summonses.

Court Disposition

Stay application dismissed; interlocutory injunctions granted on 5 January 2021 continue until disposal of the discharge summonses or further order; disclosure orders maintained with specified variations; costs awarded to plaintiffs for the stay application.

Orders

  • Stay application dismissed
  • Injunctions granted by Deputy High Court Judge To on 5 January 2021 to continue until disposal of the discharge summonses or further order of the court