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苏州太合汇投資管理有限公司 v 霍尔果斯市摩伽互联娱乐有限公司

Judgment Cited authorities 17 Cited in Precedent Map Related
Vincent
JurisdictionHong Kong
Judgment Date09 December 2022
Neutral Citation[2022] HKCFI 3657
Year2022
Subject MatterMiscellaneous Proceedings
Judgement NumberHCMP1663/2022
HCMP1663/2022 苏州太合汇投資管理有限公司 v. 霍尔果斯市摩伽互联娱乐有限公司

HCMP 1663/2022

[2022] HKCFI 3657

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1663 OF 2022

________________________

IN THE MATTER of section 21M of the High Court Ordinance, Cap 4
and
IN THE MATTER of Order 29 of the Rules of the High Court, Cap 4A
and
IN THE MATTER of Order 11 of the Rules of the High Court, Cap 4A

____________________

BETWEEN
苏州太合汇投資管理有限公司 Plaintiff
and
霍尔果斯市摩伽互联娱乐有限公司 Defendant

____________________

Before: Mr Recorder William Wong SC in Chambers

Date of Hearing: 25 November 2022

Date of Judgment: 9 December 2022

________________

J U D G M E N T

_________________

INTRODUCTION

1. This application raises an interesting and important point of law concerning the applicable test and ambit of the Court’s Chabra jurisdiction to grant injunction against non-cause of action defendant (“NCAD”).

2. By a summons dated 9 November 2022, the Plaintiff seeks to, inter alia, continue the ex parte post-judgment Mareva injunction (“Chabra Injunction”) against MMOGA, a wholly-owned subsidiary of the Defendant, which was granted by Mr Justice K Yeung on 8 November 2022 (the “Summons”), pursuant to the Court’s Chabra jurisdiction and s.21M of the High Court Ordinance (Cap 4) (“HCO”).

3. The Chabra Injunction restrains MMOGA from disposing of or otherwise dealing with its assets in Hong Kong up to the value of HK$222,799,944.24.

MATERIAL FACTS

4. The following salient facts are largely undisputed:

(1) The Defendant is a judgment debtor of the Plaintiff for the sum of HK$222,799,944.24 (the “Judgment Sum”) pursuant to a conciliatory statement granted by consent by the Shanghai Financial Court of the PRC dated 16 December 2021 (“PRC Judgment”).

(2) On 27 July 2022, the PRC Judgment has been registered in HCMP 633/2022 (“Registration Action”) by an Order of Master Hui pursuant to the Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap 597) (“MJREO”). There is no dispute that the Plaintiff, after registration of the PRC Judgment, is entitled to enforce the same as a Hong Kong Judgment including applying for charging order over the Defendant’s shareholding in MMOGA.

(3) On 20 October 2022, in aid of the enforcement of the PRC Judgment, Mr Justice S T Poon granted an ex parte post-judgment Mareva injunction against the Defendant (“Post-Judgment Injunction”), restraining the Defendant from disposing of or otherwise dealing with its assets in Hong Kong up to the value of HK$222,799,944.24. No application has been made to set aside the Post-Judgment Injunction although it is fair to infer that the Defendant does have knowledge of the same, at the very least, through MMOGA.

(4) On 8 November 2022, Mr Justice K Yeung further granted the Chabra Injunction against MMOGA, a wholly-owned subsidiary of the Defendant, on the bases that (a) MMOGA’s assets are liable to enforcement of the PRC Judgment by the Plaintiff against the Defendant, and (b) there was a real risk of dissipation of assets on MMOGA’s part.

(5) On 11 November 2022, this Court continued the Post-Judgment Injunction without any opposition from the Defendant and adjourned the hearing of the continuation of the Chabra Injunction for further argument. This is the substantive hearing of the same.

5. It is pertinent to note that on 16 December 2021, the PRC Judgment was granted against the Defendant by consent. The Defendant’s parent company, Whole Easy Internet Technology Co Ltd (“Whole Easy”), was also a party liable for the Judgment Sum under the PRC Judgment.

6. Pursuant to the PRC Judgment, the Defendant acknowledged its liability to the Plaintiff and agreed to repay the Plaintiff the sum of RMB194,444,667.77 within 2 weeks of the date of the judgment (i.e. by 1 January 2022).

7. Nonetheless, the Defendant failed to satisfy any part of the PRC Judgment by 1 January 2022. Thereafter, the Plaintiff applied to commence the enforcement process in the PRC.

8. On 27 January 2022, the Shanghai Financial Court issued an enforcement notice (“Notice of Enforcement”) and a disclosure order (“PRC Disclosure Order”) against the Defendant for it to comply with the PRC Judgment and to make disclosure regarding its assets.

9. Notwithstanding the Notice of Enforcement and the PRC Disclosure Order, the Defendant refused and failed to comply with the PRC Judgment. This was despite the Defendant’s apparent ability to repay at least part of the PRC Judgment:

(1) As stated in the 2021 Annual Report dated 29 April 2022 (“2021 Annual Report”) and the 2022 Interim Report dated 26 August 2022 (“2022 Interim Report”) of Whole Easy, the Defendant had net assets of RMB1,065,806,357.25 on 31 December 2021 and RMB1,137,003,823.31 on 30 June 2022 respectively.

(2) Further, the 2021 Annual Report and the 2022 Interim Report recorded that Whole Easy and/or subsidiaries of Whole Easy (collectively, “Whole Easy Group”) had available bank deposits (可随时用于支付的银行存款) of RMB139,988,583.56 on 31 December 2021 and RMB201,918,777.14 on 30 June 2022 respectively.

(3) Moreover, from the 2021 Annual Report and the 2022 Interim Report, the Whole Easy Group had deposit overseas (存放在境外的款项总额) amounting to RMB158,696,136.95 (as at 31 December 2021) and RMB199,073,534.65 (as at 30 June 2022) respectively (although it was not clear with which subsidiary the cash was placed).

(4) There is also no dispute that the Defendant and MMOGA continue to market themselves proactively. For instance, in the 2021 Annual Report, MMOGA was described as having ‘海量忠实客户群体’ and ‘领军优势’. It was stated that MMOGA was prepared to find overseas opportunities (准备在海外游戏运营方面寻找突破口). Of course, this Court bears in mind that the Defendant and MMOGA are separate legal entities. MMOGA is perfectly entitled to carry on its legitimate business in due course.

10. Further, the Defendant also breached the PRC Disclosure Order by failing to make any disclosure regarding its assets.

11. On 27 May 2022, the Plaintiff commenced the Registration Action in Hong Kong. Notice of the Registration Action has not been given to the Defendant then. The Plaintiff’s explanation is that it was minded to exhaust the avenues of enforcement in the Mainland before formally commencing acts of enforcement in Hong Kong.

12. On 26 August 2022, in view of the Defendant’s refusal to satisfy the PRC Judgment, the Plaintiff applied before the Shanghai Financial Court for:

(1) An order (“Restriction Order”) of restriction on high-level consumption (限制高消费) against the Defendant;

(2) An order (“Listing Order”) to add the Defendant to the list of dishonest persons (失信被执行人).

13. On 21 and 27 September 2022 respectively, the Shanghai Financial Court granted the Restriction Order and Listing Order. The Listing Order against the Defendant was made on the basis that it has refused to fulfil its legal obligation despite having the financial ability to do so (有能力但不履行生效法律文书确定业务).

14. Notwithstanding the grant of the Restriction Order and Listing Order, the Defendant still refuses to satisfy the PRC Judgment.

15. On 12 October 2022, the Shanghai Financial Court issued an enforcement decision (“Enforcement Decision”) at the completion of the enforcement process, with minimal recovery being achieved.

16. On 20 October 2022, the Plaintiff applied for the Post-Judgment Injunction on the basis that there is an objective risk of dissipation on the part of the Defendant.

17. On 3 November 2022, the Defendant and MMOGA wrote to the Plaintiff complaining that MMOGA’s account maintained with the Standard Chartered Bank (Hong Kong) Limited (“SCBHK”) has now been wrongfully frozen as a result of P’s communications with SCBHK, alleging that the same has caused disruption to the operation of MMOGA.

18. In view of the parties’ disagreement on the effect of the Post-Judgment Injunction on MMOGA, on 8 November 2022, the Plaintiff applied and obtained the Chabra injunction against MMOGA.

19. From the above undisputed narrative of facts, it appears that the Defendant, albeit with the financial ability to satisfy the PRC Judgment, is determined not to fulfil its civil obligations and does not care whether it breaches any order of the Mainland Courts. Nonetheless, the Defendant, via MMOGA, is still operating an active business with assets in Hong Kong and overseas.

JURIPRUDENCE ON CHABRA INJUNCTION

20. The starting point of analysis is the leading judgment of Popplewell J in PJSC Vseukrainskyi Aktsionernyl Bank v Maksimov [2013] EWHC 422 (Comm) at §7 as approved by Tomlinson LJ in Lakatamia Shipping Co Ltd v Su [2015] 1 WLR 291 at §32 where the learned judge said:

“(1) The Chabra jurisdiction may be exercised where there is good reason to suppose that assets in the name of a defendant against whom the claimant asserts no cause of action (the NCAD) would be amendable to some process, ultimately enforceable by the courts, by which the assets would be available to satisfy a judgment against a defendant whom the claimant asserts to be liable on his substantive claim (the CAD).

(2) The test of ‘good reason to suppose’ is to be equated with a good arguable case, that is to say one which is more than barely capable of serious argument, but yet not necessarily one which the judge believes to have a better than 50% chance of success.

(3) In such cases the jurisdiction will be exercised where it is just and convenient to do so. The jurisdiction is exceptional and should be exercised with caution, taking care that it should not operate oppressively to innocent third parties who are not substantive...

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