The High Court recently considered applications for retrospective permission to make collateral use of documents disclosed under a pre-action disclosure order where there had been a breach of the implied undertaking as to the use of disclosed documents. Although retrospective permission may be given, an application for permission should not be used to circumvent the usual procedure for obtaining consent to collateral use of documents.
The recent decision of the High Court in Ninotre Investment Ltd v L & A International Holdings Ltd is a further example of the court's statutory power to grant a qualifying shareholder access to and inspection of company records. Section 740 of the Companies Ordinance (Cap 622) has become an established mechanism for aggrieved shareholders, with legitimate complaints in their capacity as shareholders, to obtain access to and inspection of company records.
The Court of Appeal has dismissed an application to strike out a claim for abuse of process on the basis of Summers v Fairclough in circumstances where final judgment had already been handed down. There are already established methods of challenging judgments allegedly obtained by fraud, and these should be utilised instead.
The Securities and Futures Commission (SFC) has been using Section 213 of the Securities and Futures Ordinance (Cap 571) to good effect to secure (among other things) compensation on behalf of counterparty investors to impugned transactions. As a result of a recent landmark judgment of the Court of Final Appeal, the SFC's remit under Section 213 extends not only to (for example) insider dealing involving locally listed securities and regulated trades, but also to contraventions of Section 300.
With privilege remaining a hot topic, and with the recent SFO v ENRC decision still fresh in many legal professionals' minds, another judgment on legal advice privilege has been handed down – this time with a lesson for solicitors drafting supporting witness statements. It is of crucial importance to ensure that the utmost care is taken when making a claim to privilege, not least because the opposing party will usually have no choice other than to rely on what it is told.
In the latest of a long line of higher court authorities debating the boundaries between black letter and more purposive approaches to contractual construction, the Court of Appeal has taken another step away from the high-water marks of the business common sense approach to contractual meaning. The decision confirms that parties are more likely to be able to work contractual machinery according to the black letter terms in which it is set out on the face of the contract.
The High Court recently considered whether in principle a judgment creditor is entitled to a charging order over funds paid into court by a judgment debtor in a different action involving another party. The case is an interesting review of the respective interests of the parties when funds are paid into court pursuant to a court order. It concerns the application of established principles to what appears to be a different situation, but one that may give other litigants pause for thought.
The test for inducement in cases of fraudulent misrepresentation is whether 'but for' the misrepresentation, the claimant 'might' have acted differently. The lower hurdle was clarified by the High Court in Nederlandse Industrie Van Eiprodukten v Rembrandt Enterprises and represents a departure from previous authorities, in which the test had been said to be whether but for the misrepresentation the claimant would have entered into the contract anyway.
The proliferation of fraud and blackmail offences carried out online has left victims, and the courts, playing catch-up. However, in a number of recent cases, the civil courts have shown that they are adapting to keep pace with cybercriminals and are addressing the imbalance that exists between victims and criminals who seek to hide behind a veil of anonymity in this digital age.
The Court of Appeal recently considered whether claims for loan principal and interest were separate claims for the purpose of an application for permission to serve a claim form out of the jurisdiction and whether an obligation to pay interest could be implied into an oral loan agreement. The decision provides a helpful clarification of the nature of claims for interest and the application of the modern test for implication of contractual terms to a claim for an implied term for payment of interest.
In a cautionary tale, a group company and its current liquidators have had their claim against the group company's former liquidators struck out under the 'no reflective loss' principle. The strike-out was granted on the basis that the group company's subsidiaries had a closer nexus to the relevant loss than the group company. The appeal judgment demonstrates that the courts will not shy away from dismissing defective claims against professional advisers without trial.
The Court of Appeal recently held that a director who had made continuing fraudulent misrepresentations was liable for damages calculated at the point of sale and not at the point of entering into the contract. This judgment is a reminder that, in the right case, deceit may be used to pierce the corporate veil. It also highlights the considerations when assessing damages regarding continuing representations, particularly when there is time between the representation being made and the performance of the contract.
The Hong Kong government recently issued a consultation paper, and sought views from members of the public and interested stakeholders, on a proposed arrangement between Hong Kong and the mainland for the reciprocal recognition and enforcement of judgments in civil and commercial matters. The proposed arrangement seeks to provide a mechanism which widens the existing and limited scope for the enforcement of mainland court civil judgments in Hong Kong and vice versa.
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.
To render a force majeure clause watertight, time should be taken to consider all of the potential risks that may prevent parties from fulfilling their obligations under the contract and spell these out in the clause. Also, where an event has occurred, parties must be able to demonstrate that the force majeure event was the sole cause of any failure to fulfil their contractual obligations. This was recently upheld by the High Court.
It is understandable that directors might be reluctant to seek legal advice – be it due to concern about time or cost or a potential conflict of interest if seeking advice internally. However, as a recent case demonstrates, this is a small price to pay to avoid the time and financial cost of a claim, especially when a company's subsequent precarious financial position shines a light on an officer's behaviour and competence.
In certain circumstances the courts in Hong Kong can extend Mareva relief against a defendant to third parties under the so-called 'Chabra' jurisdiction. In a recent case, the assets which the trustees sought to locate were not directly held by the bankrupt, but appear to have been indirectly held through a family trust and related companies. As before, the court demonstrated its willingness to extend Mareva relief under the Chabra jurisdiction in deserving cases.
The Commercial Court recently discharged an injunction restraining the enforcement of a US court order made under Section 1782 of Title 28 of the US Code (Assistance to foreign and international tribunals and to litigants before such tribunals). Section 1782 applications can be a useful weapon in an English litigator's armoury as a means of obtaining evidence under the control of a US-based entity through US-style discovery, including by the use of depositions and documentary evidence.
The Supreme Court recently ruled that a bank providing a reference relating to its customer owed a tortious duty of care only to the addressee. The decision reflects the wider judicial trend of restricting the circumstances in which duties of care for negligent misstatement are found to exist on the basis of an assumption of responsibility by the party making the statement.
A recent decision of the Court of First Instance confirms the conventional thinking that a relationship between a bank and a customer does not of itself give rise to a duty of care to advise on the part of the bank. The court dismissed the claimant investor's mis-selling claim against the bank on the basis that neither the terms of the relevant contracts entered into with the bank nor the circumstances of the case suggested that there had been an assumption of a duty to advise by the bank.