Chinachem Financial Services Ltd v Century Venture Holdings Ltd

CourtHigh Court (Hong Kong)
Judgment Date25 March 2014
Citation[2014] 2 HKLRD 557
Judgement NumberHCA410/2013
Subject MatterCivil Action
HCA410/2013 CHINACHEM FINANCIAL SERVICES LTD v. CENTURY VENTURE HOLDINGS LTD

HCA 410/2013 & HCMP 2299/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 410 OF 2013

____________

BETWEEN

CHINACHEM FINANCIAL SERVICES LIMITED Plaintiff

and

CENTURY VENTURE HOLDINGS LIMITED Defendant

____________

AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2299 OF 2013

____________

IN THE MATTER of the Affirmation of Lam Yee Hung dated 18 June 2013 filed in the High Court Action No 410 of 2013

and

IN THE MATTER of Section 21L of the High Court Ordinance (Cap 4)

____________

BETWEEN

CHINACHEM FINANCIAL SERVICES LIMITED Plaintiff

and

CENTURY VENTURE HOLDINGS LIMITED Defendant

____________

(Heard together)

Before: Deputy High Court Judge Ramanathan SC in Court
Dates of Hearing: 2, 3, 4, 7, 30 and 31 October 2013
Date of Judgment: 25 March 2014

_______________

J U D G M E N T

_______________

INTRODUCTION

1. By a writ issued on 7 March 2013 in HCA 410/2013, the plaintiff sought the following declarations against the defendant, namely:

(a) that a contract entered into by them dated 25 August 2009 had expired by effluxion of time on 28 February 2012 and in any event was terminated and came to an end no later than 30 June 2012;

(b) that the defendant was not entitled to any remuneration from the plaintiff pursuant to the contract.

2. The Statement of Claim was issued on 2 April 2013 fleshing out the basis of the claim. The defendant then issued a summons on 18 June 2013 to stay the proceedings. The summons was supported by an affirmation of Mr Lam Yee Hung (“Lam”), a director of the defendant company dated the same date as the summons. Paragraph 53 of Lam’s affirmation made reference, amongst other things, to the defendant being given by Mr David Hui (“Hui”) in mid April 2012 a copy of a draft “Memorandum of Advice” with a Postscript prepared by Norton Rose for the plaintiff. A copy the draft Memorandum of Advice and Postscript was exhibited to the Lam affirmation as LYH‑65. Mr Hui was at that material time the Chief Executive Officer of the plaintiff.

3. This revelation then triggered the plaintiff to issue a summons on 20 August 2013 in HCA 410/2013 (A/18) seeking the following relief:

(i) that paragraph 53 of Lam’s affirmation and exhibit LYH‑65 (“the Privileged Materials”) be struck out on the grounds that they disclose information, materials and matters which attract legal professional privilege and that the defendant received the materials from David Hui, the plaintiff’s former CEO in circumstances whereby the defendant knew or ought to have known that the disclosure by David Hui was in breach of his fiduciary duties and/or duties of confidence owed to (inter alia) the plaintiff;

(ii) that the defendant be restrained whether by itself or through its agents, employees or servants or otherwise howsoever from using or relying on the Privileged Materials or information contained therein in the current action or for any other purposes, or disclosing, publishing, disposing or dealing with in any other way any of the Privileged Materials or information contained therein;

(iii) that the defendant deliver up within seven days to the plaintiff’s solicitors the original of the exhibit LYH‑65 received by the defendant together with any copies of the same or any part thereof.

4. This summons came before Godfrey Lam J on 23 August 2013. He ordered that the matter be adjourned for a speedy trial with two days reserved. He further ordered that no further evidence was to be filed apart from the evidence which had been filed before him without leave of the court and that reliance on any affidavit evidence was subject to the deponent being tendered for cross-examination with the costs of the hearing before him being reserved with certificate for two counsel for both parties (A/20A).

5. I have been provided with a copy of the transcript of the hearing before Godfrey Lam J and note that there were concerns raised by him as to whether the relief being sought by the plaintiff by their summons was interim in nature or by way of final relief as the relief sought in HCA 410/2013 was very different to that being sought by the summons. It was perhaps to avoid any technical arguments being raised on this score, the plaintiff’s solicitors have, I suspect out of an abundance of caution, issued on 9 September 2013 an originating summons under HCMP 2299/2013 (A/17A) seeking in essence and substance the identical relief as in the summons issued under HCA 410/2013.

6. By a letter dated 27 September 2013, Haldanes, the defendant’s solicitors which was faxed to my clerk seeking leave to issue a writ of subpoena ad testificandum against Hui requiring him to attend the hearing of the both the summons and the originating summonses on 2 and 3 October 2013 before me. I gave leave for the writ to be issued but directed that the question of whether Hui should be called as a witness was to be argued on 2 October 2013.

7. Both summonses were heard before me on 2 October and instead of the original two days the hearing lasted six days. Both the plaintiff and defendant were represented by leading counsel with their respective juniors. Mr David Hui also attended the first day in answer to the subpoena represented by his solicitor Mr Andrew Lam, who had instructions to apply for the discharge of the subpoena. Given this state of affairs the question of the subpoena issued against Hui was logically the matter that had to be addressed and disposed of first.

THE SUBPOENA ISSUE

8. Mr Edward Chan SC pursued the defendant’s application to call Hui as a witness identifying two areas which he submitted it was hoped Hui would be able to provide relevant evidence, namely,

(i) in relation to the meetings in March and April 2012 and

(ii) as to the reason(s) why he handed over the Norton Rose Memorandum of Advice to Mr Pang Chun Sing (“Pang”) of the defendant. Mr Chan SC frankly admitted that the defendant had not as yet any proof of evidence of Hui but suggested that if the court was to grant the defendant’s application to call Hui to give evidence then he would ask for the solicitors of Hui to provide a statement in that regard.

9. When asked by the court as to why this application by the defendant was being made at this late stage given the order of Godfrey Lam J had been made on 23 August 2013, Mr Chan SC’s response was that it was only after receiving and reading the plaintiff’s skeleton submissions for this hearing on 26 September 2013, and in particular paragraph 30 thereof, that the defendant and their legal advisers realised that, as he put it the court would be better assisted if Mr Hui could be asked to give evidence.”(T1/4:2‑6) He argued that if Hui was allowed to give evidence then the hearing could in the meantime proceed with the plaintiff calling their witnesses in the interim until a witness statement was procured.

10. On behalf of Hui, Mr Lam submitted by that as regards topic (i) there would be little difficulty in providing the information. However as regards topic (ii) he submitted that this was controversial as in the interim the plaintiff had issued an indorsed writ in HCA 1486/2013 in August 2013 against his client for breaches of fiduciary duties and have obtained an interlocutory injunction. They have yet to be served with the full Statement of Claim which was apparently expected to be filed and served by 4 October 2013.

11. He argued that his client would in effect be placed in an invidious position of being subject to cross‑examination by the plaintiff’s lawyers when he is not even fully aware of the nature and extent of the allegations against him. He argued that this would be both oppressive and prejudicial. He submitted that this was tantamount to an abuse of process by the defendant. He further submitted that in the event the subpoena was not discharged then he invited the court to limit the ambit of cross‑examination so that Mr Hui’s interests are not prejudiced in HCA 1486/2013.

12. Mr Huggins SC, leading counsel for the plaintiff essentially took a neutral position as to whether the subpoena should or should not be discharged on the basis that this was a matter entirely between the defendant and Mr Hui and his legal advisers. He however took exception to any suggestion that if Hui was to be called as a witness that his cross‑examination of Hui should be in anyway be circumscribed.

13. He also took issue with the belated application by the defendant to adduce this evidence when he argued that it must have been plain and obvious from the affirmations already filed by the parties in August 2013 before the hearing before Godfrey Lam J that Hui was a central figure to the defence being raised by the defendant. He argued that for the defendant’s lawyers to now say that the importance of Hui only became obvious after sight of paragraph 30 of the plaintiff’s skeleton submission simple defies logic or belief. He also took exception to the suggestion the plaintiff should open its case and call its witnesses before seeing what, if anything Hui was expected to say. To allow such a situation to develop he argued was procedurally unfair.

14. Having carefully considered the submissions of all the parties I ruled that I would discharge the subpoena against Mr Hui. In my short reasons given at the time I found that application by the defendant at this stage was belated. I was of the view that it must have been clear as a...

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