In Poon v Poon, the defendant successfully applied to have certain paragraphs excluded from witness statements filed on behalf of the plaintiff on the basis that they referred to without prejudice conversations and meetings. The judgment applies established principles that underpin the protection given to without prejudice communications and demonstrates the court's reluctance to allow a party to 'cherry pick' from parts of wide-ranging discussions that were clearly undertaken on a without prejudice basis.
Mathnasium Center Licensing, LLC v Chang is another recent example of the courts sentencing makers of false statements of truth to a period of imprisonment for contempt of court. In this case, the defendant signed a false statement of truth in a defence filed on behalf of a company which he controlled and which was being sued by the plaintiff. The court found that it was beyond a reasonable doubt that the defendant must have known about the falsity of the admission and thus found him to be in contempt of court.
The Court of Appeal has refused permission to appeal an apparently wide-ranging order for the production of documents made in favour of the liquidators in China Medical Technologies Inc v Tsang. Despite the respondent's best efforts, the Court of Appeal decided that the issues stated to arise out of its judgment did not raise questions of great general or public importance. The outcome of the appeal is bolstered by a legislative amendment which amounts to a more coextensive power.
In China Medical Technologies Inc (In Liquidation) v Bank of East Asia Ltd, the court granted an ex parte order extending the validity of a writ, effectively giving the plaintiffs an additional year in which to effect service. The High Court has now discharged that order with the consequences that service was set aside and the action dismissed. This is the latest in a number of similar decisions and suggests that the courts will in future scrutinise extension applications much more closely.
The High Court recently rejected a defendant solicitors' firm's application to strike out a plaintiff's claim on the ground that it was commenced too late. Given the relatively high threshold in Hong Kong for an applicant to succeed with an application to strike out a claim before trial, the court's decision is not surprising. However, the written reasons given in the decision are a useful analysis of the legal principles involved in determining when a cause of action accrues for the tort of negligence.
The High Court has once again been asked to review its jurisdiction to grant permission to issue subpoenas directed at witnesses. In this case, the court granted permission to issue two subpoenas directed at two senior doctors, requiring them to give evidence (supported by specified documents) in aid of a registered dentist's court challenge arising out of disciplinary proceedings against him. The decision reiterates the relatively low threshold for the issue of subpoenas, while also illustrating their possible tactical use.
The High Court recently considered a prospective witness's application to set aside a subpoena directed at him. The subpoena combined directions to the witness to give evidence at trial on behalf of the plaintiff and to produce the originals of certain transaction documents. The court set aside the part of the subpoena directed at giving evidence but not the part directed at producing documents. The decision provides useful guidance as to the general practice for issuing subpoenas.
The issue of liability for costs plays a big part in the settlement of protracted civil litigation in Hong Kong. In particular, where the parties refuse to bear their own costs, which party will pay the other's costs becomes an important consideration. As another recent case demonstrates, without prejudice settlement offers can (among other things) seek to protect a party's position as to costs. Such offers are a common feature of the local litigation landscape for good reason.
In a recent case, the High Court allowed the plaintiff's application for an order that the first defendant and a representative of the second defendant attend a court hearing to be cross-examined on affirmations made by them in the proceedings. The case is a timely reminder of the seriousness of making affidavits or affirmations and of the need to be mindful of the documents to which they refer.
The High Court recently reiterated the general principles which govern its power to order a non-party to pay the costs of another party to court proceedings. The court's power is statutory but the general principles that govern the exercise of its discretion arise out of case law. The case law demonstrates that the court's discretion to make an order for costs against a non-party is wide. The interests of justice are paramount.
A High Court judge recently dismissed a party's appeal against a refusal to grant permission to issue subpoenas directed at another party's legal representatives. At the same time, the judge reminded litigants and their legal representatives that subpoenas (directing a witness to attend court to give evidence, produce documents or do both) should be issued in a timely manner, and that late subpoenas which upset the court's case management of trial dates are likely to be frowned upon.
The High Court recently considered the proper basis for the distribution of money in the client account of a closed law firm. The money is held by the relevant regulator on trust for the persons beneficially entitled to it – namely, the former clients. Where there is a shortfall between the verified claims of former clients and the balance in the client account, the court may need to direct how the money should be distributed.
First Asia Finance International Ltd v Tso Au Yim & Yeung appears to be another example of a misconceived claim against a defendant solicitors' firm. In this case, the court held that the solicitors owed no duty of care to the plaintiff company (which was not a client) with respect to the preparation of a settlement agreement. The plaintiff also failed with a claim that it had informally retained the defendant solicitors with respect to the drafting of the settlement agreement.
Securities and Futures Commission v Sun Min is another recent example of the Securities and Futures Commission using Section 213(2)(b) of the Securities and Futures Ordinance to obtain restitution, in the form of so-called 'restorative' orders, on behalf of counterparties to impugned transactions. What is interesting about this particular case is that the judge expressed some concern as to whether the amount of restoration sought might result in a windfall for the counterparties involved.
In another significant development in the Securities and Futures Commission's efforts to combat market misconduct-type activity involving listed shares in Hong Kong, the lead market regulator has commenced civil proceedings under Section 213 of the Securities and Futures Ordinance in respect of China Forestry Holdings Co Ltd (in official liquidation). The regulator's civil complaint also names two co-sponsors and the auditor involved with the company's initial public offering.
Defendants will welcome the recent decision in Bank of China (Hong Kong) Ltd v Ho Chi Lui, in which a Hong Kong judge struck out court proceedings that the plaintiff allowed to remain inactive for over 14 years. The decision is another illustration of the courts' willingness to strike out stale claims in cases of egregious delay, following the landmark Court of Final Appeal decision in Wing Fai Construction Co Ltd v Yip Kwong Robert.
The Court of Appeal recently handed down three consistent decisions confirming that prime rate plus 1% should continue to be used as the starting point for awarding pre-judgment interest on damages awarded by the courts in civil disputes. The court considered that there was insufficient evidence to show clearly that prime rate is no longer relevant or rarely used in Hong Kong.
Defendants in Hong Kong are making good use of Calderbank offers – that is, offers without prejudice save as to costs – as an alternative to, or in tandem with, the procedural regime for sanctioned payments into court and sanctioned offers that was introduced as part of the court rules seven years ago. This has led to some interesting disputes between parties as to who should bear liability for the legal costs.
The Securities and Futures Commission has commenced its first set of proceedings in the Market Misconduct Tribunal against a listed company for allegedly failing to disclose price-sensitive inside information to the public as soon as reasonably practicable, contrary to the Securities and Futures Ordinance. In the absence of a formal class action regime in Hong Kong, the commission has made headlines in bringing some of the highest-profile litigation in this jurisdiction.
Following the introduction of formal sanctioned payments and sanctioned offers, it has not been entirely clear to what extent pre-trial Calderbank offers (without prejudice save as to costs) still provide costs protection for an offeror. A recent case confirms that in certain circumstances, a Calderbank offer is appropriate and can provide costs protection for the offeror.