WASON HOLDINGS LTD AND OTHERS v. BHP INTERNATIONAL MARKETS LTD AND ANOTHER

WASON HOLDINGS LTD AND OTHERS v. BHP INTERNATIONAL MARKETS LTD AND ANOTHER

The writ discloses serious issues to be tried and cannot be struck out; the ex parte injunction was properly continued in part because plaintiffs have arguable proprietary claims (constructive trust) and a real risk that the defendant may not be able to satisfy monetary relief so damages may be inadequate;...

Source-derived case information.

Citation
WASON HOLDINGS LTD AND OTHERS v. BHP INTERNATIONAL MARKETS LTD AND ANOTHER
Parties
1st Plaintiff: Wason Holdings Limited; 2nd Plaintiff: Walong Holdings Limited; 3rd Plaintiff: Sky Infinity Holdings Limited; 1st Defendant: BHP International Markets Limited; 2nd Defendant: Matford, LDC
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
20 March 2015
Case Number
HCA1692/2014
Procedural Posture
Civil Proceedings Concerning Contract, Equitable Proprietary Remedies and Interlocutory Relief / Interlocutory Applications (continuation/discharge of Ex Parte Injunction; Disclosure; Strike Out)
Outcome
Application to strike out dismissed; plaintiffs’ continuation summons allowed in part (injunction continued as to proceeds/present equivalent); 1st defendant’s discharge summons dismissed; disclosure summons granted; costs awarded to plaintiffs (order nisi)
Legal Topics
Stock‑secured Lending, Conversion, Constructive Trust, Mareva Type Asset Preservation, Strike Out for No Cause, Full and Frank Disclosure
Source Language
en
Contract Law Equity Injunctions Civil Procedure Trusts and Tracing Disclosure Orders Stock‑secured Lending Conversion +4 more

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Parties

Wason Holdings Limited

1st Plaintiff

Walong Holdings Limited

2nd Plaintiff

Sky Infinity Holdings Limited

3rd Plaintiff

BHP International Markets Limited

1st Defendant

Matford, LDC

2nd Defendant

Procedural Posture

Civil Proceedings Concerning Contract, Equitable Proprietary Remedies and Interlocutory Relief / Interlocutory Applications (continuation/discharge of Ex Parte Injunction; Disclosure; Strike Out)

Legal Issues

  1. 1 Whether there is a serious issue to be tried as to which version of the agreement is authentic and whether defendant had power to sell the pledged shares
  2. 2 Whether sales of the shares amounted to conversion and whether proceeds are held on constructive trust such that plaintiffs can trace into substituted assets
  3. 3 Whether damages would be an adequate remedy or injunction should be continued in whole or in part

Ratio Decidendi

The writ discloses serious issues to be tried and cannot be struck out; the ex parte injunction was properly continued in part because plaintiffs have arguable proprietary claims (constructive trust) and a real risk that the defendant may not be able to satisfy monetary relief so damages may be inadequate; disclosure is necessary to enable tracing of proceeds which may have been mixed and re‑lent; allegations of material non‑disclosure, abuse and breach of undertaking were insufficient to discharge the injunction.

Court Disposition

Application to strike out dismissed; plaintiffs’ continuation summons allowed in part (injunction continued as to proceeds/present equivalent); 1st defendant’s discharge summons dismissed; disclosure summons granted; costs awarded to plaintiffs (order nisi)

Orders

  • Grant continuation of injunction insofar as it restrains the 1st defendant from disposing of or dealing with or diminishing in value any of the proceeds of sale of the Shares or their present equivalent
  • Dismiss paragraphs 1 and 2 of the 1st defendant’s discharge summons