HCA1143/2011 POON SHU FAN v. WONG TIN YAN AND ANOTHER - LawHero
HCA1143/2011
高等法院（民事訴訟）Yam J21/11/2011
HCA1143/2011
A A
B HCA 1143/2011 B
IN THE HIGH COURT OF THE
C C
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
D ACTION NO 1143 OF 2011 D
-------------------------
E E
BETWEEN
F F
POON SHU FAN Plaintiff
G G
and
H H
st
WONG TIN YAN 1 Defendant
I I
LEUNG YUK LIN 2nd Defendant
J J
-------------------------
K K
Before : Hon Yam J in Chambers
L Date of Hearing : 22 November 2011 L
Date of Decision : 22 November 2011
M M
Date of Handing Down Reasons for Decision : 16 March 2012
N N
---------------------------------------------------------
REASONS FOR DECISION
O --------------------------------------------------------- O
P The background P
Q 1. On 22 November 2011, after hearing submissions from Q
Mr Wilson Leung for the plaintiff and Ms Gekko Lan for the defendant,
R R
I made the following orders :
S S
T T
U U
V V
- 2 -
A A
(1) the Mareva injunction order made by the Honourable
B Mr Justice To on 7 July 2011 be discharged with costs to the B
defendants to be taxed and paid forthwith after the gross sum
C C
assessment is made. The defendant shall file the bill of costs
D to the Court within 14 days from the date hereof and the D
plaintiff shall file her Reply to the bill of costs within 7 days
E thereafter ; E
F (2) the plaintiff’s 1st Summons dated 11 July 2011 and the F
nd
2 Summons dated 19 July 2011 be dismissed with cost to the
G defendants on Gross Sum Assessment and paid forthwith ; G
H (3) leave be granted to the defendant to file the 3rd affirmation of H
Wong Sze Mei together with a letter from the defendants’
I I
solicitors dated 17 November 2011 annexing the company
search record of New Star Communication Co Ltd as exhibit ;
J J
(4) leave be granted to the plaintiff to file her draft affirmation in
K K
reply with the plaintiff’s solicitors’ undertaking to file and to
affirm the affirmation in the same form of draft affirmation
L L
within 7 days from the date hereof ;
M M
(5) time for service of this Summons be abridged ; and
N (6) the costs in respect of the 1st and 2nd defendants’ Summons N
filed herein on 18 November 2011 be costs in the cause.
O O
2. I now give reasons for my decisions.
P P
Q The background Q
R R
3. The defendants are husband and wife. They have
S 3 daughters, in order of seniority, Wong Sze Man (“Crystal”), Wong Sze S
Mei (“Joey”) and Wong Sze Ki (“Carina”). Joey and the plaintiff
T T
U U
V V
- 3 -
A A
(“Elizabeth”) were close friends and they went to the same schools when
B they were young. B
C C
4. Joey and Elizabeth were involved in the business of selling
D mobile phones and mobile phone accessories (“the Business”) through D
Cellular Baby Cell Phone Accessories Specialist Limited (“Cellular
E E
Baby”). Carina later participated in the Business. The exact
F arrangement between Elizabeth, Joey and Carina is heavily contested. F
Elizabeth says that Joey and Carina were only employees while Joey
G G
claims that she was in a 50 / 50 partnership with Elizabeth.
H H
5. The first issue in these proceedings is whether there was an
I I
oral contract between Elizabeth and the defendants for the investment in
J a flat in the Ocean Shores, Tseung Kwan O. The second issue is whether J
the 001 and 888 accounts, and the Stock Trading Account opened under
K K
the name of the 2nd defendant (“Madam Leung”) in Hang Seng Bank were
L agreed to be for the exclusive use of Elizabeth and whether the assets L
therein belonged to Elizabeth.
M M
N 6. It is undisputed evidence that Elizabeth transferred money to N
the 001 and 888 Accounts from her accounts in Canada in 2007-10.
O O
13 remittance forms were exhibited in PSF-2 and they showed various
P sums of money in HKD and CAD transferred to the 001 and 888 Accounts. P
Elizabeth says that the transfers were made in pursuant of the oral
Q Q
agreement and for her own investment purposes.
R R
7. The defendants, through Joey, say that the transfers were in
S S
fact payment for inventory purchase carried by Madam Leung.
T Madam Leung had been helping the Business by buying accessories in T
U U
V V
- 4 -
A A
Hong Kong (and later Shenzhen) and mailing them to Cellular Baby. The
B 13 remittances were in fact payment for the goods mailed to Cellular Baby. B
They rely on 10 Inward Remittances Advices exhibited in WSM-5 (8 of
C C
them say “Inventory Purchase” in Payment Details) and 6 credit advices
D exhibited in WSM-6 (5 of them say “Inventory Purchase” in Payment D
Details).
E E
F The grounds relied on by the defendants F
G G
8. Ms Lan submitted that the injunction should be discharged on
H the following grounds : H
I (1) serious material non-disclosure ; I
(2) no arguable case ;
J J
(3) delay ; and
K K
(4) no risk of dissipation.
L L
Issue 1--serious material non-disclosure
M M
9. Ms Lan raised numerous matters regarding non-disclosure,
N I will now classify them as follows : N
O (1) the role of Madam Leung in the Business. The amount and O
time of inventory purchase ;
P P
(2) concealment of the purpose behind the 13 remittances
Q exhibited in PSF-2 (10 of which corresponded to the advices Q
in WSM-5) ;
R R
(3) the reason behind operating a joint account with
S Madam Leung in Royal Bank of Canada No 00010-5002882; S
T T
U U
V V
- 5 -
A A
(4) Elizabeth had remitted money on behalf of Joey and Carina to
B Madam Leung from October 2009 to March 2010 ; and B
(5) the reason behind the breakdown of relationship between Joey
C C
and Elizabeth was not money matters but the fact that Joey
D was in a relationship with her boyfriend (“Sean”) and D
Elizabeth felt betrayed.
E E
10. Regarding item 1, I foresee that Madam Leung’s role in the
F F
Business will be a heavily contested matter if and when this case proceeds
G to trial. It is therefore inappropriate for me to comment on the precise G
role of Madam Leung without hearing evidence. In any event the
H H
application before me can be decided on those matters admitted by
I I
Elizabeth alone.
J J
11. In paragraph 52 of her first affirmation, Elizabeth affirmed :
K K
“52 From time to time, Cellular Baby would need to pay for
certain expenses in Hong Kong, eg for buying goods in Hong
L L
Kong, shipping goods from Hong Kong to Canada, printing
name cards in Hong Kong, etc. For the sake of convenience,
M and because of our close relationship, it was agreed in around M
2005 between me and Madam Leung that she would help me to
pay for such expenses. For this purpose, I arranged for her to
N have use of the Credit Cards. However, it was certainly not N
a part of agreement that Madam Leung could use the Credit
O Cards for her own personal expenses.” O
P 12. This paragraph was immediately under the subheading P
“Credit Cards”, which relates to the relatively non-contentious part of
Q Q
these proceedings regarding Madam Leung’s improper use of certain credit
R cards given by Elizabeth. R
S S
13. This seems to be the only occasion where the role of
T Madam Leung in purchasing goods for the Business is mentioned by T
U U
V V
- 6 -
A A
Elizabeth. Joey in her first affirmation pointed out that Madam Leung
B had in fact assumed a far more significant role in the Business. B
C C
14. This led Elizabeth to admit in her second affirmation that
D Madam Leung purchased some goods for Cellular Baby before 2003, but D
after 2003 her involvement was further reduced to purchasing goods from
E E
suppliers with no previous dealings, such as New Trend and New Star.
F F
15. In countering the accusation that she deliberately hid
G G
Madam Leung’s involvement, Elizabeth explained that she had been using
H Cellular Baby’s account to pay expenses since 2004. She did not use her H
personal account to pay for purchase by Cellular Baby. Therefore she did
I I
not see the need to include these matters in her first affirmation.
J J
16. I reject this explanation. It must have been obvious to
K K
Elizabeth and her solicitors that the business dealings between her and
L Madam sLeung are crucial matters that must be disclosed. If disclosed, L
the business dealings will highlight the nature of the relationship between
M M
them and most importantly the need to classify payment by Elizabeth
N (through her personal accounts or Cellular Baby’s) as personal or business. N
O O
17. The limited disclosure in paragraph 52 of her first affirmation
P was completely inadequate. First, it only says that from 2005 onward P
Elizabeth and Madam Leung agreed to the use of the credit cards. It
Q Q
makes no mention of the dealings regarding the Business between them
R before 2005. Second, her first affirmation says that Madam Leung would R
help with paying for expenses such as “for buying goods in Hong
S S
Kong… and printing name cards”. It was only in the second affirmation
T that she mentioned her role in “[sending] samples of the products” T
U U
V V
- 7 -
A A
(paragraph 10) and “continue to assist Cellular Baby by transferring money
B to suppliers in Hong Kong (particularly newer suppliers with whom B
Cellular Baby had yet to establish a stable working relationship)”
C C
(paragraph 16).
D D
18. I also reject the submission that Cellular Baby was a separate
E E
legal entity and its dealings with Madam Leung need not be disclosed. It
F is obvious from Elizabeth’s second affirmation that she had herself used F
Cellular Baby’s bank accounts to transfer money to Madam Leung “for
G G
[her] own personal purposes” (paragraph 22).
H H
19. Regarding the second item, Ms Lan submitted that Elizabeth
I I
was guilty of concealing the Details of Payment in the 13 remittances
J forms exhibited in PSF-2. Ms Lan drew support from the Inward J
Remittances Advices exhibited in WSM-5, corresponding to some of the
K K
13 remittances forms in PSF-2. One advice in WSM-5 dated 9 February
L 2010 says that the payment was for “Loan”. This description matches the L
description in the remittance form dated the same exhibited in PSF-2.
M M
N 20. Ms Lan submitted the above suggests that the details in the N
“receipt” can only be obtained from the details provided in the “payment
O O
advice”. The defendants’ case is that 8 of the advices in WSM-5 says it is
P for “Inventory Purchase” but the corresponding remittance advices in P
PSF-2 do not contain this information.
Q Q
R 21. Ms Lan further pointed out that some copies in PSF-2 appear R
to have been tampered with because “the dotted lines at the row for
S S
‘Details of Payment’… as if something have been covered up when
T T
U U
V V
- 8 -
A A
making the copies and thus blocking the originally continuous dotted
B lines”. B
C C
22. I accept that the information in the advices (“Inventory
D Purchase” and “Loan”) in WSM-5 could only come from the bank that D
carried out the remittances. I expect the remittance forms in PSF-2 to
E E
carry the same details but there were none in many of the advices. I need
F not ascertain the exact cause for the missing information. It might be, as F
Ms Lan submitted, the deliberate concealment during photocopying or
G G
other reasons. It is sufficient for me to say that the defendants have
H a strong case that the reasons behind at least 8 of the remittances were H
deliberately concealed.
I I
J 23. This allegation was first raised in paragraph 40 of Joey’s first J
affirmation and was never satisfactorily answered by the plaintiff’s side.
K K
Accordingly I hold that this is also a material non-disclosure on the part of
L Elizabeth. L
M M
24. Regarding the joint account in item 3, Ms Lan submitted that
N it was probably not referred to To J in the ex parte hearing and Elizabeth N
only explained in her 2nd affirmation that it was opened for her to make
O O
contribution to mortgage repayment. Ms Lan submitted the true purpose
P was for inventory purchase instead. P
Q Q
25. I do not accept that a case of material non-disclosure can be
R made out in relation to item 3. Reading paragraph 51(5) as a whole it is R
clear that Elizabeth mentioned the joint account in the context of she could
S S
not remember the details of her accounts with Royal Bank of Canada.
T T
U U
V V
- 9 -
A A
This might have been the reason why the purpose of the joint account was
B not explained at that time. B
C C
26. Regarding item 4, I do not believe there is enough evidence
D for me to determine the factual issue of whether Elizabeth remitted money D
to Madam Leung on behalf of Joey and Carina at this stage. As such
E E
a finding is a necessary prerequisite for holding that the plaintiff was guilty
F of material non-disclosure, I did not consider this item in arriving at my F
decision. In any event such a determination is unnecessary in light of my
G G
findings related to items 1 and 2.
H H
27. Regarding item 5, the defendants allege that Elizabeth is using
I I
the injunction to get back to Joey by causing hardship on the defendants.
J They say that the primary reason for the breakdown of relationship J
between Elizabeth and Joey is Joey’s relationship with Sean but not
K K
financial problems, as alleged by Elizabeth.
L L
28. I note that many of the alleged behaviours of Elizabeth relied
M M
on by the defendants might be criminal. Strong evidence is needed to
N support such an assertion. From the exhibited SMS messages of N
Elizabeth and the writings on the wall, there is some evidence that
O O
Elizabeth is seeking the injunction herein out of spite. I understand this
P issue cannot be decided at this stage on affirmation alone. But Joey P
raised all these allegations with supporting exhibits without any answer
Q Q
from Elizabeth. This supported the inference that the motivation behind
R the injunction application is emotional rather than financial. This would R
add weight to the decision to discharge the injunction.
S S
T T
U U
V V
- 10 -
A A
29. For the aforesaid reasons, I hold that Elizabeth was guilty of
B material non-disclosure in relation to items 1, 2 and 5. B
C C
Issue 2--no arguable case
D D
30. I agree with Mr Leung’s submission that the plaintiff does not
E need to make out a case that is likely to win and all that is required is one E
that is barely capable of serious argument.
F F
G 31. In her submission, Ms Lan pointed out a number of reasons G
why the plaintiff’s claim is “inherently unbelievable”, “plainly unlikely”
H H
and “unbelievable”. With respect these arguments only tend to show that
I the plaintiff has a weak case, but they are short of capable of suggesting I
that she has no arguable case.
J J
K 32. The plaintiff’s case is inherently facts based. At this stage, K
there is evidence to show that she remitted money to Madam Leung
L L
although the purpose behind the remittances is far from certain. After
M considering the plaintiff’s pleaded case and her evidence I consider that M
she has an arguable case.
N N
O Issue 3--delay O
P
33. Ms Lan submitted that Elizabeth should have applied for P
injunction shortly after June 2010, when there was a breakdown of
Q Q
relationship. Instead she had waited for about a year and made the
R application in July 2011 and was guilty of delay. R
S S
34. Mr Leung submitted the proper date to consider should be
T
24 May 2011 when Elizabeth discovered the defendants had sold the T
U U
V V
- 11 -
A A
property under the alleged oral agreement. There was only a “delay” of
B 5 weeks. B
C C
35. I accept Mr Leung’s submission regarding delay. Elizabeth
D was only expected to seek injunction when she learnt that there was a real D
risk that her assets would be dissipated.
E E
F Issue 4--real risk of dissipation F
G 36. I accept Mr Leung’s submission that the sale of the property G
without informing Elizabeth is sufficient to support the allegation that
H H
there was a real risk of dissipation. I do not believe the application by the
I defendants for legal aid points to any dishonesty on their part. It is I
possible that they did not know about the rules regarding legal aid and
J J
approached the wrong person for legal assistance.
K K
Conclusion
L L
37. Of the 4 issues advanced by Ms Lan the defendants only
M M
succeeded in material non-disclosure by the plaintiff. The ultimate issue
N
is whether I should have allowed the injunction to continue or discharge it N
and refuse to re-grant it.
O O
P
38. I held that the injunction should be discharged and not be P
re-granted because the material non-disclosure appears to be both
Q Q
deliberate and fraudulent. I am satisfied that the plaintiff or her legal
R advisors knew the importance of disclosing their extensive dealings in the R
Business. Those occasions when Elizabeth remitted money (through her
S S
account or Cellular Baby’s) to Madam Leung for the purpose of the
T T
U U
V V
- 12 -
A A
Business would clearly have a bearing on the outcome of the ex parte
B application and must be disclosed. B
C C
39. The remittance forms in PSF-2 are prima facie missing some
D information which happens to be about the purpose of the remittances. D
The reason for the missing information was not satisfactorily answered.
E E
The inference to be drawn from the above is that the information was
F deliberately and fraudulently removed. F
G G
40. Finally, there is evidence to support Joey’s contention that
H Elizabeth’s application herein is an emotional issue rather than a financial H
one.
I I
J 41. In these circumstances I discharged the injunction and refused J
to exercise my discretion in re-granting the injunction after its discharge.
K K
L L
M M
N N
(D Yam)
O Judge of the Court of First Instance O
High Court
P P
Q
Mr Wilson Leung, instructed by Danny Lau & Lam, for the plaintiff Q
Miss Gekko Lan, instructed by Peter W K Lo & Co, for the 1st and 2nd
R defendants R
S S
T T
U U
V V
A A
B HCA 1143/2011 B
IN THE HIGH COURT OF THE
C C
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
D ACTION NO 1143 OF 2011 D
-------------------------
E E
BETWEEN
F F
POON SHU FAN Plaintiff
G G
and
H H
st
WONG TIN YAN 1 Defendant
I I
LEUNG YUK LIN 2nd Defendant
J J
-------------------------
K K
Before : Hon Yam J in Chambers
L Date of Hearing : 22 November 2011 L
Date of Decision : 22 November 2011
M M
Date of Handing Down Reasons for Decision : 16 March 2012
N N
---------------------------------------------------------
REASONS FOR DECISION
O --------------------------------------------------------- O
P The background P
Q 1. On 22 November 2011, after hearing submissions from Q
Mr Wilson Leung for the plaintiff and Ms Gekko Lan for the defendant,
R R
I made the following orders :
S S
T T
U U
V V
- 2 -
A A
(1) the Mareva injunction order made by the Honourable
B Mr Justice To on 7 July 2011 be discharged with costs to the B
defendants to be taxed and paid forthwith after the gross sum
C C
assessment is made. The defendant shall file the bill of costs
D to the Court within 14 days from the date hereof and the D
plaintiff shall file her Reply to the bill of costs within 7 days
E thereafter ; E
F (2) the plaintiff’s 1st Summons dated 11 July 2011 and the F
nd
2 Summons dated 19 July 2011 be dismissed with cost to the
G defendants on Gross Sum Assessment and paid forthwith ; G
H (3) leave be granted to the defendant to file the 3rd affirmation of H
Wong Sze Mei together with a letter from the defendants’
I I
solicitors dated 17 November 2011 annexing the company
search record of New Star Communication Co Ltd as exhibit ;
J J
(4) leave be granted to the plaintiff to file her draft affirmation in
K K
reply with the plaintiff’s solicitors’ undertaking to file and to
affirm the affirmation in the same form of draft affirmation
L L
within 7 days from the date hereof ;
M M
(5) time for service of this Summons be abridged ; and
N (6) the costs in respect of the 1st and 2nd defendants’ Summons N
filed herein on 18 November 2011 be costs in the cause.
O O
2. I now give reasons for my decisions.
P P
Q The background Q
R R
3. The defendants are husband and wife. They have
S 3 daughters, in order of seniority, Wong Sze Man (“Crystal”), Wong Sze S
Mei (“Joey”) and Wong Sze Ki (“Carina”). Joey and the plaintiff
T T
U U
V V
- 3 -
A A
(“Elizabeth”) were close friends and they went to the same schools when
B they were young. B
C C
4. Joey and Elizabeth were involved in the business of selling
D mobile phones and mobile phone accessories (“the Business”) through D
Cellular Baby Cell Phone Accessories Specialist Limited (“Cellular
E E
Baby”). Carina later participated in the Business. The exact
F arrangement between Elizabeth, Joey and Carina is heavily contested. F
Elizabeth says that Joey and Carina were only employees while Joey
G G
claims that she was in a 50 / 50 partnership with Elizabeth.
H H
5. The first issue in these proceedings is whether there was an
I I
oral contract between Elizabeth and the defendants for the investment in
J a flat in the Ocean Shores, Tseung Kwan O. The second issue is whether J
the 001 and 888 accounts, and the Stock Trading Account opened under
K K
the name of the 2nd defendant (“Madam Leung”) in Hang Seng Bank were
L agreed to be for the exclusive use of Elizabeth and whether the assets L
therein belonged to Elizabeth.
M M
N 6. It is undisputed evidence that Elizabeth transferred money to N
the 001 and 888 Accounts from her accounts in Canada in 2007-10.
O O
13 remittance forms were exhibited in PSF-2 and they showed various
P sums of money in HKD and CAD transferred to the 001 and 888 Accounts. P
Elizabeth says that the transfers were made in pursuant of the oral
Q Q
agreement and for her own investment purposes.
R R
7. The defendants, through Joey, say that the transfers were in
S S
fact payment for inventory purchase carried by Madam Leung.
T Madam Leung had been helping the Business by buying accessories in T
U U
V V
- 4 -
A A
Hong Kong (and later Shenzhen) and mailing them to Cellular Baby. The
B 13 remittances were in fact payment for the goods mailed to Cellular Baby. B
They rely on 10 Inward Remittances Advices exhibited in WSM-5 (8 of
C C
them say “Inventory Purchase” in Payment Details) and 6 credit advices
D exhibited in WSM-6 (5 of them say “Inventory Purchase” in Payment D
Details).
E E
F The grounds relied on by the defendants F
G G
8. Ms Lan submitted that the injunction should be discharged on
H the following grounds : H
I (1) serious material non-disclosure ; I
(2) no arguable case ;
J J
(3) delay ; and
K K
(4) no risk of dissipation.
L L
Issue 1--serious material non-disclosure
M M
9. Ms Lan raised numerous matters regarding non-disclosure,
N I will now classify them as follows : N
O (1) the role of Madam Leung in the Business. The amount and O
time of inventory purchase ;
P P
(2) concealment of the purpose behind the 13 remittances
Q exhibited in PSF-2 (10 of which corresponded to the advices Q
in WSM-5) ;
R R
(3) the reason behind operating a joint account with
S Madam Leung in Royal Bank of Canada No 00010-5002882; S
T T
U U
V V
- 5 -
A A
(4) Elizabeth had remitted money on behalf of Joey and Carina to
B Madam Leung from October 2009 to March 2010 ; and B
(5) the reason behind the breakdown of relationship between Joey
C C
and Elizabeth was not money matters but the fact that Joey
D was in a relationship with her boyfriend (“Sean”) and D
Elizabeth felt betrayed.
E E
10. Regarding item 1, I foresee that Madam Leung’s role in the
F F
Business will be a heavily contested matter if and when this case proceeds
G to trial. It is therefore inappropriate for me to comment on the precise G
role of Madam Leung without hearing evidence. In any event the
H H
application before me can be decided on those matters admitted by
I I
Elizabeth alone.
J J
11. In paragraph 52 of her first affirmation, Elizabeth affirmed :
K K
“52 From time to time, Cellular Baby would need to pay for
certain expenses in Hong Kong, eg for buying goods in Hong
L L
Kong, shipping goods from Hong Kong to Canada, printing
name cards in Hong Kong, etc. For the sake of convenience,
M and because of our close relationship, it was agreed in around M
2005 between me and Madam Leung that she would help me to
pay for such expenses. For this purpose, I arranged for her to
N have use of the Credit Cards. However, it was certainly not N
a part of agreement that Madam Leung could use the Credit
O Cards for her own personal expenses.” O
P 12. This paragraph was immediately under the subheading P
“Credit Cards”, which relates to the relatively non-contentious part of
Q Q
these proceedings regarding Madam Leung’s improper use of certain credit
R cards given by Elizabeth. R
S S
13. This seems to be the only occasion where the role of
T Madam Leung in purchasing goods for the Business is mentioned by T
U U
V V
- 6 -
A A
Elizabeth. Joey in her first affirmation pointed out that Madam Leung
B had in fact assumed a far more significant role in the Business. B
C C
14. This led Elizabeth to admit in her second affirmation that
D Madam Leung purchased some goods for Cellular Baby before 2003, but D
after 2003 her involvement was further reduced to purchasing goods from
E E
suppliers with no previous dealings, such as New Trend and New Star.
F F
15. In countering the accusation that she deliberately hid
G G
Madam Leung’s involvement, Elizabeth explained that she had been using
H Cellular Baby’s account to pay expenses since 2004. She did not use her H
personal account to pay for purchase by Cellular Baby. Therefore she did
I I
not see the need to include these matters in her first affirmation.
J J
16. I reject this explanation. It must have been obvious to
K K
Elizabeth and her solicitors that the business dealings between her and
L Madam sLeung are crucial matters that must be disclosed. If disclosed, L
the business dealings will highlight the nature of the relationship between
M M
them and most importantly the need to classify payment by Elizabeth
N (through her personal accounts or Cellular Baby’s) as personal or business. N
O O
17. The limited disclosure in paragraph 52 of her first affirmation
P was completely inadequate. First, it only says that from 2005 onward P
Elizabeth and Madam Leung agreed to the use of the credit cards. It
Q Q
makes no mention of the dealings regarding the Business between them
R before 2005. Second, her first affirmation says that Madam Leung would R
help with paying for expenses such as “for buying goods in Hong
S S
Kong… and printing name cards”. It was only in the second affirmation
T that she mentioned her role in “[sending] samples of the products” T
U U
V V
- 7 -
A A
(paragraph 10) and “continue to assist Cellular Baby by transferring money
B to suppliers in Hong Kong (particularly newer suppliers with whom B
Cellular Baby had yet to establish a stable working relationship)”
C C
(paragraph 16).
D D
18. I also reject the submission that Cellular Baby was a separate
E E
legal entity and its dealings with Madam Leung need not be disclosed. It
F is obvious from Elizabeth’s second affirmation that she had herself used F
Cellular Baby’s bank accounts to transfer money to Madam Leung “for
G G
[her] own personal purposes” (paragraph 22).
H H
19. Regarding the second item, Ms Lan submitted that Elizabeth
I I
was guilty of concealing the Details of Payment in the 13 remittances
J forms exhibited in PSF-2. Ms Lan drew support from the Inward J
Remittances Advices exhibited in WSM-5, corresponding to some of the
K K
13 remittances forms in PSF-2. One advice in WSM-5 dated 9 February
L 2010 says that the payment was for “Loan”. This description matches the L
description in the remittance form dated the same exhibited in PSF-2.
M M
N 20. Ms Lan submitted the above suggests that the details in the N
“receipt” can only be obtained from the details provided in the “payment
O O
advice”. The defendants’ case is that 8 of the advices in WSM-5 says it is
P for “Inventory Purchase” but the corresponding remittance advices in P
PSF-2 do not contain this information.
Q Q
R 21. Ms Lan further pointed out that some copies in PSF-2 appear R
to have been tampered with because “the dotted lines at the row for
S S
‘Details of Payment’… as if something have been covered up when
T T
U U
V V
- 8 -
A A
making the copies and thus blocking the originally continuous dotted
B lines”. B
C C
22. I accept that the information in the advices (“Inventory
D Purchase” and “Loan”) in WSM-5 could only come from the bank that D
carried out the remittances. I expect the remittance forms in PSF-2 to
E E
carry the same details but there were none in many of the advices. I need
F not ascertain the exact cause for the missing information. It might be, as F
Ms Lan submitted, the deliberate concealment during photocopying or
G G
other reasons. It is sufficient for me to say that the defendants have
H a strong case that the reasons behind at least 8 of the remittances were H
deliberately concealed.
I I
J 23. This allegation was first raised in paragraph 40 of Joey’s first J
affirmation and was never satisfactorily answered by the plaintiff’s side.
K K
Accordingly I hold that this is also a material non-disclosure on the part of
L Elizabeth. L
M M
24. Regarding the joint account in item 3, Ms Lan submitted that
N it was probably not referred to To J in the ex parte hearing and Elizabeth N
only explained in her 2nd affirmation that it was opened for her to make
O O
contribution to mortgage repayment. Ms Lan submitted the true purpose
P was for inventory purchase instead. P
Q Q
25. I do not accept that a case of material non-disclosure can be
R made out in relation to item 3. Reading paragraph 51(5) as a whole it is R
clear that Elizabeth mentioned the joint account in the context of she could
S S
not remember the details of her accounts with Royal Bank of Canada.
T T
U U
V V
- 9 -
A A
This might have been the reason why the purpose of the joint account was
B not explained at that time. B
C C
26. Regarding item 4, I do not believe there is enough evidence
D for me to determine the factual issue of whether Elizabeth remitted money D
to Madam Leung on behalf of Joey and Carina at this stage. As such
E E
a finding is a necessary prerequisite for holding that the plaintiff was guilty
F of material non-disclosure, I did not consider this item in arriving at my F
decision. In any event such a determination is unnecessary in light of my
G G
findings related to items 1 and 2.
H H
27. Regarding item 5, the defendants allege that Elizabeth is using
I I
the injunction to get back to Joey by causing hardship on the defendants.
J They say that the primary reason for the breakdown of relationship J
between Elizabeth and Joey is Joey’s relationship with Sean but not
K K
financial problems, as alleged by Elizabeth.
L L
28. I note that many of the alleged behaviours of Elizabeth relied
M M
on by the defendants might be criminal. Strong evidence is needed to
N support such an assertion. From the exhibited SMS messages of N
Elizabeth and the writings on the wall, there is some evidence that
O O
Elizabeth is seeking the injunction herein out of spite. I understand this
P issue cannot be decided at this stage on affirmation alone. But Joey P
raised all these allegations with supporting exhibits without any answer
Q Q
from Elizabeth. This supported the inference that the motivation behind
R the injunction application is emotional rather than financial. This would R
add weight to the decision to discharge the injunction.
S S
T T
U U
V V
- 10 -
A A
29. For the aforesaid reasons, I hold that Elizabeth was guilty of
B material non-disclosure in relation to items 1, 2 and 5. B
C C
Issue 2--no arguable case
D D
30. I agree with Mr Leung’s submission that the plaintiff does not
E need to make out a case that is likely to win and all that is required is one E
that is barely capable of serious argument.
F F
G 31. In her submission, Ms Lan pointed out a number of reasons G
why the plaintiff’s claim is “inherently unbelievable”, “plainly unlikely”
H H
and “unbelievable”. With respect these arguments only tend to show that
I the plaintiff has a weak case, but they are short of capable of suggesting I
that she has no arguable case.
J J
K 32. The plaintiff’s case is inherently facts based. At this stage, K
there is evidence to show that she remitted money to Madam Leung
L L
although the purpose behind the remittances is far from certain. After
M considering the plaintiff’s pleaded case and her evidence I consider that M
she has an arguable case.
N N
O Issue 3--delay O
P
33. Ms Lan submitted that Elizabeth should have applied for P
injunction shortly after June 2010, when there was a breakdown of
Q Q
relationship. Instead she had waited for about a year and made the
R application in July 2011 and was guilty of delay. R
S S
34. Mr Leung submitted the proper date to consider should be
T
24 May 2011 when Elizabeth discovered the defendants had sold the T
U U
V V
- 11 -
A A
property under the alleged oral agreement. There was only a “delay” of
B 5 weeks. B
C C
35. I accept Mr Leung’s submission regarding delay. Elizabeth
D was only expected to seek injunction when she learnt that there was a real D
risk that her assets would be dissipated.
E E
F Issue 4--real risk of dissipation F
G 36. I accept Mr Leung’s submission that the sale of the property G
without informing Elizabeth is sufficient to support the allegation that
H H
there was a real risk of dissipation. I do not believe the application by the
I defendants for legal aid points to any dishonesty on their part. It is I
possible that they did not know about the rules regarding legal aid and
J J
approached the wrong person for legal assistance.
K K
Conclusion
L L
37. Of the 4 issues advanced by Ms Lan the defendants only
M M
succeeded in material non-disclosure by the plaintiff. The ultimate issue
N
is whether I should have allowed the injunction to continue or discharge it N
and refuse to re-grant it.
O O
P
38. I held that the injunction should be discharged and not be P
re-granted because the material non-disclosure appears to be both
Q Q
deliberate and fraudulent. I am satisfied that the plaintiff or her legal
R advisors knew the importance of disclosing their extensive dealings in the R
Business. Those occasions when Elizabeth remitted money (through her
S S
account or Cellular Baby’s) to Madam Leung for the purpose of the
T T
U U
V V
- 12 -
A A
Business would clearly have a bearing on the outcome of the ex parte
B application and must be disclosed. B
C C
39. The remittance forms in PSF-2 are prima facie missing some
D information which happens to be about the purpose of the remittances. D
The reason for the missing information was not satisfactorily answered.
E E
The inference to be drawn from the above is that the information was
F deliberately and fraudulently removed. F
G G
40. Finally, there is evidence to support Joey’s contention that
H Elizabeth’s application herein is an emotional issue rather than a financial H
one.
I I
J 41. In these circumstances I discharged the injunction and refused J
to exercise my discretion in re-granting the injunction after its discharge.
K K
L L
M M
N N
(D Yam)
O Judge of the Court of First Instance O
High Court
P P
Q
Mr Wilson Leung, instructed by Danny Lau & Lam, for the plaintiff Q
Miss Gekko Lan, instructed by Peter W K Lo & Co, for the 1st and 2nd
R defendants R
S S
T T
U U
V V