Silver Universe Investment Ltd v China Times Securities Ltd & Others (HCA 1824/2018)
The Court of First Instance gave judgments in Silver universe Investment Ltd v China Times Securities Ltd & Others (HCA 1824/2018) on 18 January 2019 and 29 March 2019 granting interlocutory injunctions and enforcing disclosure orders in aid of the injunctions.
In the judgment dated 29 March 2019, Deputy High Court Judge Keith Yeung SC held that the standard of compliance with disclosure orders in aid of injunctions is much higher than the standard in orders for discovery under O.24, having regard to the importance of disclosure in rendering the freezing orders effective.
This case on the face of it concerns a sophisticated financing arrangement whereby the lender entered into a non-recourse loan agreement with the Plaintiff for a loan, secured by the Plaintiff’s shares in a listed company which were in turn held in custody in an account with a broker licensed by the Securities and Futures Commission.
Only 1/3 of the loan was advanced, while suspicious movement of the shares held with the broker was detected.
The Court granted proprietary injunctions against the lender and the broker and made disclosure orders in aid of the injunctions requiring them to disclose the whereabouts of the shares and their traceable proceeds.
Applying the heightened standard of compliance, the Court found that lender acted in breach of the disclosure order and made a further unless order to enforce the disclosure order.
Earl Deng and Tara Liao acted for the Plaintiff.