RPC updates
Quasi-proprietary claims: use of disputed funds to pay legal costs
RPC- Litigation
- United Kingdom
- 17 March 2020
In a recent case, the High Court considered to what extent a defendant should be permitted to use funds subject to a freezing injunction to fund its legal expenses where the claimant advances a quasi-proprietary claim over those funds. This decision provides helpful guidance on the analysis of quasi-proprietary claims and the circumstances in which claimants can insist that defendants meet a more onerous test before using disputed monies over which the claimant asserts ownership to fund their defence.
In with the old and the new technology
RPC- Litigation
- Hong Kong
- 17 March 2020
The High Court recently decided that it can, as part of its case management powers and of its own volition, order that a directions hearing take place by means of a telephone conference without the physical presence in court of the parties or their legal representatives. The court's decision is set against the background of the extraordinary measures adopted in Hong Kong to combat the coronavirus public health emergency.
Litigation funder liable for uncapped adverse costs
RPC- Litigation
- United Kingdom
- 10 March 2020
The Court of Appeal recently ordered a funder to pay the full amount of adverse costs. In a significant judgment for commercial litigation funders, the court found that the 'Arkin cap' (which can cap a litigation funder's liability for adverse costs at the amount of funding that was provided) is not a binding rule to be applied automatically in every case involving a litigation funder.
Court considers freezing of assets and 'Chabra' jurisdiction
RPC- Litigation
- Hong Kong
- 03 March 2020
In a recent case, the Court of First Instance discharged ex parte (without notice) injunctions restraining the second defendant from disposing of or dealing with its assets in Hong Kong. The injunctions were granted in aid only of the plaintiffs' claims against the first defendant which were being pursued in parallel proceedings in mainland China. This was on the basis that the second defendant's assets should be available to satisfy the plaintiffs' eventual judgment against the first defendant.
Beware: English jurisdiction clauses do not mean choice of English law
RPC- Litigation
- United Kingdom
- 03 March 2020
Where parties have agreed in a contract that the English courts will have jurisdiction in the event of a dispute, it does not automatically follow that English law will be the governing law. A party recently found this out, to its cost, when a different governing law clause meant an expired limitation period. This case demonstrates that those entering into contractual agreements should carefully consider a choice of law clause in order to designate the laws of a country that suits them.
Challenge to bank's suspension of account rejected
RPC- Litigation
- Hong Kong
- 18 February 2020
The High Court has rejected an application for summary judgment of a claim to release money frozen by a bank. This was in the context of an investigation into the alleged use of the account for criminal activity. In its defence, the bank argued that the customer agreement contained an implied term that the bank could act on evidence of suspected fraudulent conduct to suspend operation of the account.
Equitable compensation for breach of fiduciary duty: a question of loss?
RPC- Litigation
- United Kingdom
- 18 February 2020
A director who extracted money from a company by way of sham invoices may have a defence to an equitable compensation claim for misappropriation of the company's funds. The facts in this case may test the willingness of the trial court (due to hear the matter later in 2020) to develop the equitable remedies for breach of fiduciary duty.
Lenders face more allegations about their actions on restructuring
RPC- Litigation
- United Kingdom
- 11 February 2020
Representatives of a lender on a board will not automatically impose directors' duties on the lender, but they may apply where a director's specific instructions have led directly to a breach of fiduciary duty. The High Court recently explored this issue in an appeal in the case of Standish v Royal Bank of Scotland.
Bitcoin is 'property' and can therefore be subject of proprietary injunction
RPC- Litigation
- United Kingdom
- 04 February 2020
Following recent case law on the matter, the High Court has found that bitcoin can be 'property' and can therefore be the subject of a proprietary injunction. In reaching its conclusion, the court adopted the detailed analysis of the issue set out in the UK Jurisdictional Task Force's November 2019 Legal Statement on Crypto-Assets and Smart Contracts, thereby providing a far more detailed judicial basis for the finding than found in previous cases.
Top court confirms basis for indemnity costs
RPC- Litigation
- Hong Kong
- 04 February 2020
The Court of Final Appeal recently reaffirmed the principles applicable when the courts consider making an enhanced award of costs in favour of the successful party (ie, 'indemnity costs'). The judgment makes it clear that the courts' discretion to award indemnity costs is unrestricted – although, as a basic requirement, such costs should be ordered only when it is appropriate to do so and the receiving party must be able to show that the case has some special or unusual feature.
Covertly obtained information cannot be deployed until its legitimacy is resolved
RPC- Litigation
- United Kingdom
- 28 January 2020
The Court of Appeal recently confirmed that where a party has covertly obtained confidential information, any dispute as to the information's confidentiality must be resolved before it can be deployed in civil proceedings. Taking this approach preserves the confidentiality of the material and upholds the broad equitable principle that a person who has received information in confidence should not be permitted to take unfair advantage of it.
Overseas intervener in Hong Kong
RPC- Litigation
- Hong Kong
- 21 January 2020
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.
Witness evidence reform: evolution not revolution?
RPC- Litigation
- United Kingdom
- 21 January 2020
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.
Full and frank disclosure means more than just putting relevant matters in evidence – a new year warning
RPC- Litigation
- United Kingdom
- 14 January 2020
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.
Freezing orders: when will past conduct show a real risk of dissipation?
RPC- Litigation
- United Kingdom
- 07 January 2020
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.
No 'cherry picking' of wide-ranging without prejudice discussions
RPC- Litigation
- Hong Kong
- 07 January 2020
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.
Guaranteed to fail? Oral funding arrangements may be enforceable
RPC- Litigation
- United Kingdom
- 24 December 2019
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.
Top court rejects trustee's "high-level supervisory duty"
RPC- Litigation
- Hong Kong
- 17 December 2019
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.
Oral contract does not prevent agent from being paid in circumstances not catered for in contract
RPC- Litigation
- United Kingdom
- 10 December 2019
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.
Assessment of costs in District Court out of date
RPC- Litigation
- Hong Kong
- 10 December 2019
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.
