INDUSTRIAL BANK CO., LTD. v. RICH CROWN INTERNATIONAL INDUSTRIES LTD AND OTHERS

HCA 298/2020

[2022] HKCFI 725

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 298 OF 2020

________________________

________________________

________________________

D E C I S I O N

________________________

1.  By a Judgment dated 7 January 2022 granted under Order 14 (“Judgment”), this Court, amongst others, dismissed the Defendants’ Leave Summons and Fresh Evidence Summons, which sought leave to file and serve Zhang 4^th and 6^th in opposition to the Plaintiff’s application for summary judgment. This is the Defendants’ application for leave to appeal against that dismissal.

2.  Leave to appeal will not be granted unless the appeal has a reasonable prospect of success or there is some other reason in the interest of justice why the appeal should be heard: section 14AA of the High Court Ordinance, Cap 4; SMSE v KL [2009] 4 HKLRD 125, at §17.

3.  The intended appeal is against the exercise of discretion in excluding further affirmations in a case management decision.  The Court of Appeal will not interfere with a decision of that nature unless the lower court has gone clearly wrong and made an order which clearly involved an injustice or an ability for the trial court to carry out its task, or had erred in principle or that the order was irrational: Wong Kar Gee Mimi v Severn Villa Ltd [2012] 1 HKLRD 887, at §31.

Leave Summons in respect of Zhang 4^th

4.  In respect of grounds 1-5, the critical point is there was no explanation as to why the evidence (existing in 2018 and 2019)  could not have been obtained with reasonable diligence and dealt with in the previous 2 rounds of affirmations.  In addition, some of the evidence were wechat conversations between Zhang himself and Dong.  It could not be seriously argued that Zhang had no access to its own mobile phone device due to travel restrictions between jurisdictions.

5.  Even if the Defendants could justify “stylistic and other amendments” to the draft Zhang 4^th, and the draft Zhang 4^th was given to the Plaintiff 4 weeks before the hearing, there was no denial that the final version of Zhang 4^th added new exhibits.

6.  In respect of grounds 6-7, the so called updates were irrelevant and the Defendants could not satisfy the 2^nd limb of Ladd v Marshall.

7.  With respect to Mr Strachan SC, it cannot be the case that where there are allegations of fraud, that of itself would constitute extenuating circumstances.  Were it the case, pleaders need not follow the principles of pleading fraud as set out in §42 of the Judgment and can easily obtain leave to file further affirmation without meeting the requirements in Jose Miranda Da Costa Junior.

8.  There is nothing in the grounds of appeal or Mr Strachan SC’s submission to show that this Court has gone clearly wrong and made an order which clearly involved an injustice. 

Fresh Evidence Summons in respect of Zhang 6^th

9.  The Defendants have not contended that this Court has erred in legal principles or wrongly identified the bone of contention to be the 2^nd limb of Ladd v Marshall.

10.  The Defendants say that this Court has erred in taking the view that the Malaysian project the Malaysian project turned out to be a sham instead of its being a sham throughout.  With respect, regardless of which view was correct, this Court has in substance taken into account the contents of the Liquidators’ Report before applying the second limb of Ladd v Marshall. See §§91-94 of the Judgment.

11.  Further, this Court has assumed Mr Strachan SC’s test for admission of fresh evidence to be right, ie whether or not interests of justice are better served by allowing or rejecting the application, and applied it to reject the Fresh Evidence Summons.  See §101 of the Judgment.

12.  There is nothing in the grounds of appeal or Mr Strachan SC’s submission to show that this Court has gone clearly wrong and made an order which clearly involved an injustice. 

Other reasons in the interest of justice to grant leave

13.  The Defendants have lodged an appeal as of right against the Judgment and submit that it is in the interests of justice that the Court of Appeal should also have before it the Defendants’ appeal as regards Zhang 4^th and 6^th.  This argument has been rejected in the past.  If that submission is correct, it would create an exception to the leave requirement for interlocutory appeals which is not to be found in the rules.  See Jose Miranda da Costa Junior, at §21, DHCJ Le Pichon.

Conclusion

14.  The application is devoid of merits and I dismiss the same.

15.  Under the contractual provisions in the Facility Agreement (§102 of the Judgment), the Defendants should bear the costs of the Plaintiff on indemnity basis, summarily assessed at $150,000.  I make an order nisi accordingly.

16.  I thank counsel for their assistance.