In re Zadeh v Registrar of Companies, the Court of First Instance held that an application by an overseas company to intervene as a party in existing proceedings in Hong Kong did not expose it to a liability to provide security for costs and that, even if the court did have jurisdiction to order security for costs, it would not have ordered the intervener to do so. Although security for costs against overseas or dubiously solvent plaintiffs is a useful tool in civil litigation, this case demonstrates some of the procedural limits.
Concern that current practice in relation to factual witness evidence does not achieve the best evidence at proportionate cost prompted the creation of the Witness Evidence Working Group to consider how the current practice could be improved in the business and property courts. The group's recommendations focus on the more consistent enforcement of existing rules with some limited new measures.
New year, new reminder of the obligation to make full and frank disclosure in without notice applications, this time in the context of a falling out within the UK Independence Party. The obligation can be satisfied only by drawing the court's attention to legal or factual matters which could undermine the applicant's own application; it is not enough to simply put relevant matters in evidence before the court.
In Lakatamia Shipping Co Ltd v Morimoto, the Court of Appeal overturned a decision to discharge a worldwide freezing order. According to the court, evidence that the respondent had previously assisted her son to dissipate assets, while being aware of an earlier freezing order and judgment against him, demonstrated a real risk of dissipation if a second freezing order was not continued against her.
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.
Funding arrangements should be in writing or at least impose a primary obligation on the funder to pay. So said the Court of Appeal when exploring whether an oral arrangement to fund a litigant was an unenforceable guarantee or an enforceable agreement to pay in any event. This case shows that as with all contracts, recording them in writing gives all parties certainty.
In Zhang Hong Li & Ors v DBS Bank (Hong Kong) Ltd & Ors, the Court of Final Appeal interpreted a so-called 'anti-Bartlett clause' in a trust deed and held that it excluded the imposition of a "high-level supervisory duty" on the trustee to supervise or review the investment decisions of an investment adviser appointed by the underlying private investment company.
In a recent case, the Court of Appeal held that an oral contract for a specified introduction fee payable to an agent if a property sold at a particular price did not prevent the agent from being remunerated when that property was sold for a lesser sum (despite the contract being silent on the matter). However, the sum awarded by the court was significantly lower than the introduction fee specified in the contract.
The monetary jurisdiction for civil cases heard by Hong Kong's busy District Court was significantly increased in December 2018. In light of this, the District Court now determines more complex and important civil cases. Therefore, a good case can be made for the abolition of the so-called 'Two-Thirds Rule'. If this is a step too far, a legislative provision should be implemented that provides judges with a wide and flexible discretion to depart from the rule where appropriate in all the circumstances.
The Court of Appeal recently sought to impose some order on an unfair prejudice petition which had been mired in wrangling over pleadings for six years. The decision shows that parties presenting an unfair prejudice petition should ensure that it sets out the grounds for relief as these cannot, in general, later be extended in the points of claim. Where points of claim lack particularity or disclose no basis for the relief sought, requests for further information or applications to strike out should be brought promptly.
In a recent High Court case, the defendants successfully resisted summary judgment for breach of contract on the basis of the prevention principle, which excuses a breach of contract where the other party's actions caused it. Following this decision, contracting parties may wish to consider whether to insert express wording into contracts containing no set-off clauses that would exclude this principle.
In an important and interesting judgment, the High Court declined to admit an overseas barrister unless he appeared with a local barrister. The applicant had applied for ad hoc admission to conduct a case in Hong Kong, on the basis that he would appear with the two solicitor advocates who had charge of the case. Therefore, they sought the removal of what is a usual condition to the grant of ad hoc admission – namely, that the applicant (an English Queen's Counsel) appear with a local barrister.
An email containing legal advice leaked to a claimant in an employment dispute did not fall foul of the iniquity principle and therefore remained privileged. An overheard conversation, believed to be in relation to the claimant's dismissal, could not be relied on to aid the interpretation of the email as there was no evidence that the individuals engaged in the conversation had seen it.
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.
When will an order for costs be made against a family member who was not a party to the underlying proceedings but who contributed significantly to funding the losing party's defence? According to a recent case, the answer is when the funder has a personal interest in the litigation.
The High Court recently clarified that merely contracting with another party and thereby giving it the opportunity or means to breach another pre-existing contract is not itself sufficient to constitute inducing breach of contract. More practically, the case is a reminder of the perils of becoming involved as a third party in others' disputes.
The Court of Appeal recently confirmed that Article 6(1) of the Lugano Convention is not subject to a 'sole object' test. Where claimants have a sustainable claim against an 'anchor defendant' that they intend to pursue to judgment, they can rely on Article 6(1) to bring a foreign co-defendant within the jurisdiction. This decision will be of significant assistance to claimants where one or more co-defendants are domiciled in their preferred jurisdiction.
Summary judgment is not available in Hong Kong civil actions which include a claim based on an allegation of fraud. The rule has traditionally been broadly interpreted by the courts, such that any claim raising an allegation of dishonesty against a defendant prevents a plaintiff from applying for summary judgment. The inflexibility of this rule, and the ambit of the meaning of 'dishonesty' in this context, have been the subject of judicial criticism. Now, there are proposals afoot to abolish the so-called 'fraud exception'.
In a recent case involving a man killed on a motorway, the High Court set out the difference between evidence which will be subject to Civil Procedure Rule (CPR) 35's restrictions and that which will not. Specifically, where relevant opinion evidence (even hearsay) is prepared by someone qualified to give expert evidence, it will generally be prima facie admissible. However, where evidence is produced by an expert instructed by the parties for the purposes of the proceedings, it will be subject to CPR 35.
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.