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.
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.
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.
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.
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.
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.
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.
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.