1. In the context of applications for Mareva relief, it is well established that evidence of low commercial morality may in appropriate circumstances give rise to the inference of a real risk of dissipation of assets. However, it is trite that one should not draw such an inference too readily.
2. In Convoy Collateral Limited v. Cho Kwai Chee & Ors.  HKCA 537 (3 July 2020), the Court of Appeal (Lam V.P. and Barma J.A.) had occasion to review the relevant authorities and has provided much needed clarity on this issue.
3. The Court of Appeal held that:
(1) The applicant must show a real risk, judged objectively, that a future judgment would not be met because of an unjustified dissipation of assets. In this context dissipation means putting the assets out of reach of a judgment whether by concealment or transfer (§35).
(2) On the onus borne by the applicant, many authorities had referred to the need for a solid evidential basis to establish a real risk of dissipation, the preferable description of the burden is of a “solid basis” for concluding that there is a real risk of dissipation (§37). A solid basis to support an inference of risk of dissipation is to be contrasted with unsupported or bare statements of fear which would carry little weight (§41).
(3) Since the assessment is in respect of the risk of dissipation as opposed to the fact of actual dissipation, the exercise necessarily involves an evaluative and predictive judgment. Thus, the evidential burden can be satisfied by drawing proper inferences from a holistic consideration of all the circumstantial materials that are indicative of risk. Such materials are not confined to acts of actual dissipation of assets (§32(a), §40).
(4) Evidence of dishonest and fraudulent conduct or other serious wrongdoings which form the basis of the claims, and which reflect adversely on the integrity of the defendant could point powerfully towards an inference of such risk (§53). In particular, where the dishonesty alleged is at the heart of the claim against the relevant defendant, the Court may well find itself able to draw the inference that the making out, to the necessary standard, of that case against the defendant also establishes sufficiently the risk of dissipation of assets (§47).
(5) On the other hand, the Court must be vigilant in scrutinizing the allegations in a claim with care before drawing the inference of risk of dissipation (§43).
(6) In the present case, it was not disputed that a good arguable case on the pleaded claims had been demonstrated (§63). The underlying premise of the claims involved the commission of serious and sophisticated wrongdoings which involved manipulation of the affairs of listed companies in a dishonest manner (§64).
(7) The aforesaid conduct was “a serious form of dishonest deception” as it allowed the perpetrator to evade one’s fiduciary obligations to listed companies and side-step compliance with the rules imposed by regulatory authorities designed for the protection of the general investing public. The Court should have no hesitation in finding a real risk of dissipation (§64).
(8) On the facts, there was ample evidence to support an inference that dissipation of assets was a real option on Roy Cho’s agenda in response to investigations and litigations against him (§58).
4. The Court of Appeal’s decision makes clear that what is required from the applicant is a “solid basis” for inferring a real risk of dissipation. A solid basis is to be contrasted with unsupported or bare statements of fear which would carry little weight.
5. Further, it is equally clear that the Court must approach the evidence holistically, taking into account all the circumstances. Evidence of fraudulent conduct or lack of integrity can, in appropriate circumstances, amount to powerful indicators of a risk of dissipation, although the Court must scrutinise the evidence with care.