MARYO DEVELOPMENT LTD v. TSANG YAU MAY AND OTHERS

MARYO DEVELOPMENT LTD v. TSANG YAU MAY AND OTHERS

The application to set aside the regular default judgment was refused because D3 failed to demonstrate a real prospect of success: his factual account was internally inconsistent and commercially implausible in material respects, he did not provide credible explanations for the transactional anomalies or for his delay and inaction, and balancing the merits and other considerations (including plaintiff's changed position and prejudice) required dismissal of the set-aside application while varying the injunction to reduce frozen assets.

Citation
MARYO DEVELOPMENT LTD v. TSANG YAU MAY AND OTHERS
Parties
Plaintiff: Plaintiff (P); 3rd Defendant: Third Defendant (D3)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
13 April 2015
Case Number
HCA2297/2012
Procedural Posture
Civil Breach of Fiduciary Duty / Knowing Receipt / Company Law / Interlocutory Application to Set Aside Regular/default Judgment and Variation of Mareva Injunction/payment Orders
Outcome
Application to set aside default judgment (paragraphs 1-2 of the summons) dismissed; Mareva/injunction order varied to reduce frozen asset cap and other paragraphs adjourned sine die with liberty to restore; costs ordered nisi against D3 for paragraphs 1-2
Legal Topics
Set Aside Default Judgment, Knowing Receipt, Constructive Trust, Mareva Injunction / Freezing Orders, Variation of Payment Orders, Assessment of Expert Valuation
Source Language
EN
Company Law Trusts and Equitable Remedies Civil Procedure Injunctions Directors' Duties Criminal Investigations (context) Set Aside Default Judgment Knowing Receipt +4 more

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Parties

Plaintiff (P)

Plaintiff

Third Defendant (D3)

3rd Defendant

Procedural Posture

Civil Breach of Fiduciary Duty / Knowing Receipt / Company Law / Interlocutory Application to Set Aside Regular/default Judgment and Variation of Mareva Injunction/payment Orders

Legal Issues

  1. 1 Whether defendant (D3) demonstrated a meritorious defence with a real prospect of success sufficient to set aside a regular default judgment
  2. 2 Whether payments of HK$9,130,000 were received by D3 in knowing receipt of proceeds of breach of fiduciary duty
  3. 3 Whether the 22/7/11 transaction was genuine or a sham to siphon company funds

Ratio Decidendi

The application to set aside the regular default judgment was refused because D3 failed to demonstrate a real prospect of success: his factual account was internally inconsistent and commercially implausible in material respects, he did not provide credible explanations for the transactional anomalies or for his delay and inaction, and balancing the merits and other considerations (including plaintiff's changed position and prejudice) required dismissal of the set-aside application while varying the injunction to reduce frozen assets.

Court Disposition

Application to set aside default judgment (paragraphs 1-2 of the summons) dismissed; Mareva/injunction order varied to reduce frozen asset cap and other paragraphs adjourned sine die with liberty to restore; costs ordered nisi against D3 for paragraphs 1-2

Orders

  • Dismissed paragraphs 1-2 of the Summons (application to set aside D3 Judgment)
  • Costs order nisi: D3 to pay plaintiff's costs of and occasioned by paragraphs 1-2 of the Summons to be taxed if not agreed