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Bhp Billiton Marketing Ag, Baar Switzerland v Transfield Shipping Inc, Panama

Judgment Cited authorities 6 Cited in Precedent Map Related
Vincent
Judgment Date29 April 2013
Year2013
Judgement NumberHCA2124/2011
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCA2124/2011 BHP BILLITON MARKETING AG, BAAR SWITZERLAND v. TRANSFIELD SHIPPING INC, PANAMA

HCA 2124/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2124 OF 2011

_____________

BETWEEN
BHP BILLITON MARKETING AG,
BAAR SWITZERLAND		 Plaintiff

and
TRANSFIELD SHIPPING INC, PANAMA Defendant

and
TRANSFIELD ER MARITIME LTD Intervener

_____________

Before: Deputy High Court Judge Lok in Chambers
Date of Hearing: 13 March 2013
Date of Decision: 29 April 2013

____________________________

DECISION

____________________________

1. There are 2 matters before me:

(i) an appeal lodged by the intervener, Transfield ER Maritime Ltd, against the decision of Master de Souza on 18 September 2012, granting the plaintiff’s application requiring HSBC to disclose the bank statements of an account held in the name of the intervener (“the Account”) and the flow of funds in the Account between 16 May 2011 and 15 December 2011; and

(ii) a summons taken out by the plaintiff dated 6 November 2012 (“the plaintiff’s Summons”), asking the court to consider whether any further order should be made in these proceedings by reason of the fact that the Mareva injunction was obtained in circumstances where certain undertakings given by the plaintiff in the related English proceedings were not brought to the attention to the judge granting the Mareva injunction in Hong Kong.

Background

2. On 26 February 2010, the plaintiff commenced an action in England against the defendant known as Transfield Shipping Inc, Panama, which is a Panama company, for breach of a Freight Forward Swap Agreement (“the Swap Agreement”). The Swap Agreement was contained in or evidenced by a written confirmation dated 14 February 2008 (“the Confirmation”).

3. The Confirmation provided that legal proceedings may be validly served on defendant at an address at Harbour Road, Wanchai, Hong Kong (“the Harbour Road Address”). The Confirmation also provided the Account as the defendant’s account for the purpose of the transaction under the Swap Agreement.

4. In the English proceedings, the court granted leave to the plaintiff to serve the proceedings out of jurisdiction at the defendant’s registered address in Panama and the Harbour Road Address. The Harbour Road Address was later found to be occupied by Transfield Resources Limited, which is another company associated with the defendant.

5. The defendant did not respond to the English proceedings. On 15 July 2010, default judgment in the sum of US$2,194,964.41 was entered against the defendant in the English court (“the UK Judgment”).

6. The plaintiff proceeded to effect service of the UK Judgment on the defendant. It was then discovered that the Harbour Road Address was empty. According to the record of the Companies Registry in Hong Kong, the registered office of Transfield Recourses Limited was changed to another address at Lockhart Road, Wanchai, Hong Kong (“the Lockhart Road Address”). With the leave of the English court, the UK Judgment was served on the defendant at the Lockhart Road Address.

7. In the end of 2010, the plaintiff discovered that the defendant was involved in another legal proceedings with a company called RTI Limited (“RTI”) in the English court. The legal proceedings were subsequently settled, and RTI paid a sum of US$14,000,000 to the defendant by means of a telegraphic transfer to the Account on about 16 May 2011.

8. Such information was obtained as a result of the plaintiff obtaining a disclosure order in the English proceedings against RTI’s solicitors. The disclosure order required RTI’s solicitors to provide information in relation to any sums which were due and owing to the defendant from RTI pursuant to the settlement agreement made between them, whether such monies had been paid and if so when, how much, into what account, etc.

9. The payment of such sum of money prompted the plaintiff to apply for a Mareva injunction against the defendant. On 2 June 2011, a worldwide Mareva injunction was obtained by the plaintiff against the defendant in the English court up to the value of US$2,650,000 (“the UK Injunction”).

10. Undertakings Nos 6 and 7 of the UK Injunction order read as follows:

“The Claimant will not without the permission of the Court use any information obtained as a result of this order for the purposes of any civil or criminal proceedings, either in England and Wales or in any jurisdiction, other than this claim.”

“The Claimant will not without the permission of the Court seek to enforce this order in any country outside England and Wales or seek an order of a similar nature including orders conferring a charge or other security against the Defendant or the Defendant’s assets.”

11. The plaintiff also made various attempts to serve the UK Injunction order on the defendant but without any success. In December 2011, it was discovered that Transfield Resources Limited had changed its registered address to another address at Lockhart Road.

12. On 15 December 2011, the plaintiff obtained a Mareva injunction in Hong Kong (“the HK Injunction”) before Carlson DHCJ in aid of the English proceedings up to the value of US$2,650,000. By the order of Yam J on 28 December 2011, the HK Injunction was ordered to be continued until further order of the court. Both the UK injunction order and the HK Injunction order directed that the defendant must not withdraw money from the Account.

13. The defendant has at no stage taken part in any aspect of the English or the Hong Kong Proceedings.

14. Obviously, the plaintiff wants to find out what happened to the defendant’s money paid into the Account on 16 May 2011. The plaintiff took out a summons on 15 February 2012 pursuant to s 21 of the Evidence Ordinance, Cap 8 (“the Discovery Summons”) requesting HSBC to disclose, inter alia, the bank statements of the Account and the flow of funds in the Account in the period from 16 May 2011 to 15 December 2011 (“the Relevant Period”).

15. HSBC, by its letter dated 16 February 2012, indicated that it did not contest the plaintiff’s Discovery Summons.

16. The intervener opposed the Discovery Summons and applied for leave to intervene.

17. On 18 September 2012, Master de Souza granted leave to the intervener to be joined for the purpose of the Discovery Summons. The learned Master also allowed the plaintiff’s application and made the discovery order against HSBC (“the Discovery Order”).

18. Shortly before the hearing on 14 September 2012, the intervener’s solicitors wrote to the plaintiff’s solicitors enquiring whether the plaintiff had complied with Undertaking Nos 6 and 7 before lodging the application for the HK Injunction. By the letter dated 17 September 2012, the plaintiff’s solicitors replied that the intervener did not have the requisite locus to seek confirmation in relation to the said queries.

19. Upon realising its failure to comply with Undertaking No 7, the plaintiff made an application for retrospective leave to commence the Hong Kong proceedings in the English court on 8 October 2012. It is the plaintiff’s case that there was an inadvertent breach of Undertaking No 7 and such breach was not noticed until it was brought to the plaintiff’s attention by the letter of the intervener’s solicitors dated 14 September 2012. On 11 November 2012, Smith J made an order in the English proceedings granting permission to the plaintiff to have issued the Hong Kong proceedings and to continue such proceedings for the enforcement of the UK Judgment and the UK Injunction. According to the transcript of the proceedings before Smith J, it seems that the learned judge accepted that there was no breach of Undertaking No 6. Again, the defendant did not appear in the hearing.

20. On 26 February 2013, the plaintiff obtained default judgment against the defendant in the Hong Kong proceedings herein in the sum of US$2,194,964.41 with interest thereon (“the HK Judgment”).

Merits of the appeal

21. The intervener now appeals against the Discovery Order. The intervener opposes the Discovery Order on the following grounds:

(i) the plaintiff’s claim is not a proprietary claim, and so there is no justification for the court to make the Discovery Order which has the effect to “trace” into the Account;

(ii) the scope of the disclosure sought is wider than the terms of the HK Injunction order;

(iii) the plaintiff has failed to establish that the Account belongs to the defendant, whether in form or in substance;

(iv) HSBC should not be ordered to disclose the information by reason of confidentiality and privacy; and

(v) by not informing Carlson DHCJ, Yam J and Master de Souza of the fact the HK Injunction was obtained without the leave of the English court, the plaintiff was in contempt of court and had failed in its duty to make full and frank disclosure.

22. Despite the able submission of Mr Sussex, SC, counsel for the intervener, I see no merit in these arguments.

23. It is well established that one purpose...

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