RPC updates

Permission to appeal order for production of documents to liquidators refused
RPC
  • Litigation
  • Hong Kong
  • 15 October 2019

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.

World freezing orders: recent dissipations and reasonable delays
RPC
  • Litigation
  • United Kingdom
  • 15 October 2019

The High Court has held that a delay in applying for a world freezing order was not fatal to its continuation at the return date, as the underlying transactions provided solid evidence of a risk of dissipation and the delay in seeking relief was not material and did not evidence the absence of a genuine belief in that risk. While the court may be reluctant to freeze assets on the basis of historic transactions, the ultimate question is whether solid evidence exists of a risk of dissipation even if the trail goes somewhat cold thereafter.

Tortious claims against third party may trigger anti-suit injunction
RPC
  • Litigation
  • United Kingdom
  • 08 October 2019

A party's attempt to circumvent a jurisdiction clause by bringing tortious claims against a third party has been thwarted by the High Court. In granting an anti-suit injunction, the court explored the substance of the claims and found them to be vexatious and oppressive and designed to evade the exclusive jurisdiction clause. This case demonstrates the courts' willingness to look into the substance of an impugned foreign claim in order to assess whether it is a tactic designed to evade an exclusive jurisdiction clause.

One bad disclosure apple can spoil the whole full and frank barrel
RPC
  • Litigation
  • United Kingdom
  • 01 October 2019

The High Court recently provided a further reminder of the perils of failing to comply with the duty of full and frank disclosure on ex parte applications. This case highlights the onerous burden on applications for worldwide freezing orders to carry out reasonable enquiries to comply with the duty of full and frank disclosure. The court expects applicants to properly investigate the factual basis of their own assertions and that of the likely defence.

Subjective expectation versus objective intention: when will terms be implied into contracts?
RPC
  • Litigation
  • United Kingdom
  • 24 September 2019

The High Court recently implied a term into a contract for the sale of government global depositary notes by Lehman Brothers International (Europe) in order to make the contract workable. The decision is of interest because it considers how the courts should address a situation where the subjective expectation of the parties at the time is clear, but the objective intention apparent from their bargain is more difficult to determine, particularly where the objective interpretation may lead to a contract being incapable of being performed.

Setting aside orders to extend validity of writs
RPC
  • Litigation
  • Hong Kong
  • 24 September 2019

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.

Pay heed to tiered dispute resolution clauses
RPC
  • Litigation
  • United Kingdom
  • 17 September 2019

The High Court recently upheld a tiered dispute resolution clause in accordance with established principles of contractual interpretation. The court ordered a stay of proceedings for mediation and, in support of the mediation, also ordered pleadings to be served in advance to optimise the prospects of a settlement. This decision continues the post-Sureterm union between commercial common sense and the plain and ordinary meaning of words.

High Court waits for no lawyer
RPC
  • Litigation
  • United Kingdom
  • 10 September 2019

An appeal was recently lost after an application for an oral hearing was made just two days late. The High Court's decision is a timely reminder of the strictness of court deadlines and of the importance of being upfront with the court which, on this occasion, was unwilling to forgive ambiguity as to whether the deadline had been met.

Court rejects solicitors' application to dismiss based on time-bar
RPC
  • Litigation
  • Hong Kong
  • 10 September 2019

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.

Subpoena in aid of disciplinary challenge
RPC
  • Litigation
  • Hong Kong
  • 27 August 2019

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.

Notice givers take care – ignore contracts at your peril
RPC
  • Litigation
  • United Kingdom
  • 27 August 2019

The Court of Appeal recently confirmed that an objective test will be applied when assessing whether a unilateral contractual notice has been validly given. This decision is a helpful reminder that the finer details of contractual notice provisions are not mere technicalities; parties must remain aware of the fact that failure to comply with the mechanics of the notice provisions set out in a contract may have serious consequences.

Court reviews issue of subpoenas
RPC
  • Litigation
  • Hong Kong
  • 13 August 2019

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.

Clarity, clarity, clarity: more contract drafting lessons from High Court
RPC
  • Litigation
  • United Kingdom
  • 13 August 2019

The High Court recently adopted an interesting approach to the well-known principles of contractual interpretation in a dispute concerning the financing of a wind farm development. The application of these principles remains tricky, particularly in cases where defined terms provide for flexibility. As a result, while parties should strive for clarity in drafting, they should also give particular consideration to possible options for terminating contracts when they are no longer needed.

What makes a Quistclose trust?
RPC
  • Litigation
  • United Kingdom
  • 06 August 2019

The Court of Appeal recently set out the relevant circumstances in which a Quistclose trust can arise in the context of bank transfers. The decision reinforces the understandable reluctance on the part of the courts to erode the basic principle that a banker-customer relationship is no more than a contractual one of debtor and creditor.

Settlement offers and costs disputes
RPC
  • Litigation
  • Hong Kong
  • 30 July 2019

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.

Innocent party entitled to damages even though performance of contract was impossible
RPC
  • Litigation
  • United Kingdom
  • 30 July 2019

A recent Court of Appeal case considered the proper interpretation of exceptions or force majeure clauses and provided guidance on the correct application of the compensatory principle of damages. This case provides yet another warning about the need for clarity in drafting contractual clauses and the implications of getting it wrong.

The art of the (settlement) deal
RPC
  • Litigation
  • United Kingdom
  • 23 July 2019

According to the Court of Appeal, giving up a right which a debtor does not even know it has is sufficient consideration for settling a debt. However, the vexed question of what amounts to 'good' consideration remains uncertain enough for those entering into a contract to always consider whether good consideration has been given. Among other things, parties should consider whether good consideration has been provided and, if there is any doubt, pay the contractual counterparty a nominal amount.

Agent's failure to disclose relevant information: a 'Gauguin-tuan' error?
RPC
  • Litigation
  • United Kingdom
  • 16 July 2019

In a recent decision concerning the sale of a Gauguin painting, the Court of Appeal confirmed that if an agent sells a principal's property and fails to disclose to the principal that it received a higher offer for the property, it will not lose its commission unless it acted dishonestly or in bad faith. As such, agents should be careful to pass relevant information to their principal, particularly if they are under a contractual obligation to do so.

Costs recovery for DIY litigation
RPC
  • Litigation
  • Hong Kong
  • 16 July 2019

Hong Kong has a high incidence of litigants in person, which is largely explained by the cost of civil litigation generally, the absence of class actions, contingent fee arrangements and third-party funding of most civil claims, and the financial eligibility limits for civil legal aid. As recent decisions show, the rates at which litigants in person are awarded costs are far from generous and, to get more, they have to prove that they had to work on the case during their working hours or that they suffered actual pecuniary loss.

Collision of legal duties, family loyalties and unreliable truth
RPC
  • Litigation
  • United Kingdom
  • 09 July 2019

In a case which has attracted public, press and legal attention, the High Court recently found that the directors of a family-run business should have ensured that the company's interests took precedence over any personal and private loyalties felt towards their family members where those competing interests came into conflict. The court's findings offer a number of helpful reminders of crucial considerations for both businesspeople and legal professionals.

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