TECHTRONIC PRODUCT DEVELOPMENT LTD AND ANOTHER v. FAUTEUX, DENIS GASTON

HCA 1235/2023

[2024] HKCFI 949

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1235 OF 2023

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BETWEEN

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D E C I S I O N

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1.  On 8 February 2024, I heard Ps’ application made by the Leave Summons (“the Feb 2024 Hearing”). On 20 February 2024, I handed down a written decision (“the Main Decision”), in which I allowed Ps’ application as per the Leave Summons (“the Feb 2024 Order”). On 5 March 2024, D took out a summons (“D’s Summons”) for leave to appeal against the Feb 2024 Order, and for a stay of execution pending the determination of the intended appeal. A draft notice of appeal (“DNOA”) is annexed to D’s Summons. As per D’s Summons, D is seeking a stay of execution “by way of interim interim injunction” restraining Ps from using the materials and information as set out in the Leave Summons (“the Materials and Information”) in or for the purpose of any criminal or civil proceedings or investigations in Hong Kong, in Mainland China, or elsewhere, other than the proceedings herein. After the Feb 2024 Order and before having notice of D’s Summons, Ps have disclosed some of the documents, materials and information covered by the said order to Dongguan Municipal Public Security Bureau Houjie Branch and the Suzhou Intermediate People’s Court.[1]

2.  This is my decision on D’s Summons. This decision should be read together with the Main Decision. For ease of reference, the abbreviations used in the Main Decision are adopted herein. A copy of the DNOA is annexed hereto.

3.  In the hearing before me, Ps are continuously represented by Mr Alexander Stock SC, leading Ms Sheena Wong. D is represented by a new team of counsel, ie Mr Sebastian Hughes and Mr Lavesh Kirpalani.

LEAVE TO APPEAL

4.  In the DNOA, D has put forward 9 grounds of appeal. Before moving to discuss the merits of these grounds, it would be useful to set out some cardinal principles first.

The principles

5.  Leave to appeal would only be granted if the appeal has a reasonable prospect of success (which means that the prospect of success is reasonable and more than fanciful, without having to be probable), or there is some other reason in the interests of justice why the appeal should be heard.[2]

6.  An appeal from the judgment made by a judge of the Court of First Instance to the Court of Appeal is not a de novo hearing. In the notice of appeal, the appellant has to identify a justifiable basis upon which the Court of Appeal may interfere in the decision of the judge below. The appeal is not a retrial or a de novo rehearing of the application which has already been determined by the court below.[3]

7.  What is required is a reasonably arguable appeal. Merely showing that an appeal is “arguable” and “not fanciful” is insufficient.[4]

8.  The Feb 2024 Order is made by me as a result of an exercise of discretion of this court. In order to succeed in the intended appeal, D has to overcome a very high hurdle. It is well established that the Court of Appeal would not interfere merely because it would have reached a different conclusion had it been hearing the application at first instance.[5] The Court of Appeal would only interfere where (a) the court below has misunderstood the law or the evidence, or (b) the exercise of discretion by the court below was plainly wrong such that it was outside the generous ambit within which a reasonable disagreement is possible.[6] The Court of Appeal is not to exercise an independent discretion of its own – its initial function is one of review only.[7]

9.  While a party intends to raise a new point in the appeal, which has not been raised in the original hearing in the court below, the reminder given by Lam VP (as His Lordship then was) in Lehmanbrown Ltd v Union Trade Holdings Inc[8] has to be borne in mind. In that case, the learned judge said:

“10. Whilst the Court of Appeal obviously has power to entertain new points in an appeal, it is also clearly and firmly established that new points which are fact sensitive or otherwise affect the course of evidence or conduct of the case at the hearing below should not be allowed. Though this principle is usually applied in situations where the new points necessitate further evidence to be adduced, it is not confined to such scenarios. Very often, the raising of new point by one party may lead to the other party raising counter arguments and the consideration of such counter arguments may involve factual assessment in a different light from that undertaken by the court below. Sometimes, it may involve a different weighing of factors in the exercise of discretion. Alternatively, the other party may embark on a different course of forensic conduct if the new point were taken earlier. The appellate court, in considering whether the new point would be entertained, is entitled to take these matters into account in order to avoid unfairness to the other party.” (Emphasis added)

10.  The mere fact that certain matters relied on by counsel were not mentioned in the judgment does not mean that the judge had not taken them into consideration. Nor is the judge required to address all the points made by counsel, whether legal or factual.[9]

Ground 1 – Theft Ordinance

11.  In relation to [1(1)] and [1(2)] under Ground (1) in the DNOA, D argues that his acts of downloading or copying documents from the Laptop or the TTI Group’s online cloud system were incapable of being “permanently depriving” Ps or the TTI Group of those documents, which is an element of the offence of theft. D also argues that I have failed to make a determination on this point. With respect, I am unable to agree.

(1) Theft Ordinance, s.7(1) provides:

“A person appropriating property belonging to another without meaning the other permanently to lose the thing itself is nevertheless to be regarded as having the intention of permanently depriving the other of it if his intention is to treat the thing as his own to dispose of regardless of the other’s rights ……” (Emphasis added)

(2) In the Main Decision, I have mentioned that according to Ps, D covertly mass downloaded Ps’ highly confidential information and valuable trade secrets (ie the proprietary information) to a removal device, without prior consent or authorisation of P1. Further, D divulged these documents to Reliance, who was a direct competitor of P1 and the TTI Group.[10] With respect, it goes without saying that it is plainly arguable that in doing all these, D had an intention to treat the proprietary information as his own to dispose of regardless Ps’ or the TTI Group’s rights in the same.

(3) There is no need to demonstrate that the offence of theft has been proved beyond reasonable doubt. Prima facie evidence would be sufficient.[11]

12.  As to the jurisdiction point taken in [1(3)] under Ground (1), this is an entirely new point which has not been raised by D in the Feb 2024 Hearing. The jurisdiction point is fact sensitive. In order to fully and fairly explore the point, there should be evidence showing what activity has taken place in which place. Ps have not been given an opportunity to adduce evidence to meet this fact sensitive point. In the circumstances, D should not be allowed to rely upon this point in the appeal. Allowing D to do so would be unfair to Ps.

13.  The unfairness to Ps is illustrated in the analysis below.

(1) Under common law, there is jurisdiction to try a case in Hong Kong where “a substantial measure of the activities constituting a crime” has taken place in Hong Kong, even if other activities connected with that same crime have occurred beyond the borders of its jurisdiction.[12]

(2) Under the Criminal Jurisdiction Ordinance (“CJO”), theft is a “Group A” offence.[13] A person may be guilty of a Group A offence, if a “relevant event” in relation to the offence occurred in Hong Kong.[14] A “relevant event” means “any act or omission or other event …… proof of which is required for conviction of the offence”.[15] The relevant event for theft would be the appropriation of property.

(3) Where a person situated in jurisdiction X gains access to a computer or computer system in jurisdiction Y, and thereby appropriates property, the appropriation of property which is the subject of the theft offence may be regarded as taking place in jurisdiction Y.[16]

(4) P1 is a Hong Kong company.

(5) While D was downloading confidential information from TTI Group’s online cloud system[17] (which might include computer system in Hong Kong), even if D was not in Hong Kong at that time, D might still be regarded as appropriating property in Hong Kong. In these circumstances, by applying either the common law and/or CJO, D might have committed an offence of theft which is triable in Hong Kong.

(6) As to whether TTI Group’s online cloud system included any computer system in Hong Kong at the material times, Ps have not been given an opportunity to adduce evidence on this issue. This shows that the jurisdiction point is indeed a fact sensitive point, and allowing D to rely upon this new point now in the appeal is indeed unfair to Ps.

(7) Regarding the confidential information downloaded by D from the Laptop, if such information was first copied to the Laptop from TTI Group’s online cloud system by D while D was in Hong Kong, and at the time of copying the information D had an intention to divulge the information to Reliance regardless of TTI Group’s rights in the information[18], and D was only using the Laptop as a temporary storage, D might be regarded as having committed the offence of theft in Hong Kong. All these are fact sensitive matters, which should be addressed by evidence and by submissions. These matters have not been explored in the Feb 2024 Hearing, for D did not raise the jurisdiction point prior to or in that hearing. In the circumstances, it would not be fair to allow D to run the jurisdiction point in the appeal.

14.  There is no merit in Ground 1.

Ground 2 – s.161 of the Crimes Ordinance

15.  The points under Ground 2 are new points which have not been raised by D before. D has not satisfactorily explained why he is entitled to take these points in the appeal notwithstanding the fact that he has not raised these points before in his evidence or submissions. I am of the view that these points should not be open to D in the appeal.

16.  Without prejudice to the above, I am of the view that there is no merit in these points.

(1) D has downloaded documents from the Laptop or the computer system of the TTI Group. The Laptop is not D’s own computer, but is a computer entrusted by P1 to D.[19] In other words, the Laptop is P1’s computer. The point in [3(1)] under Ground 2 in the DNOA does not have a correct factual basis.

(2) D relies upon SJ v Cheng Ka Yee[20] and submits that a work computer used by an employee could also be treated as the employee’s own computer, while there is no evidence showing the limit of the employee’s authority to use the same. With respect, this point is a concession offered by the prosecution in the Cheng Ka Yee case. This point is not a ruling made by the Court of Final Appeal, and the Court of Final Appeal has expressly refrained from commenting on the correctness of this concession.[21] In my view, D cannot derive any assistance from the Cheng Ka Yee case.

(3) As to the point in [3(2)] under Ground 2, Ps’ case is that the downloading activities from the Laptop and from TTI Group’s online cloud system were unauthorised by Ps.[22]

(4) Regarding the jurisdiction point in [3(3)] under Ground 2, by reason of the analysis set out in [13(1), (3) to (7)] above, as a matter of fairness, D should not be allowed to rely upon this point in the appeal.

17.  There is no merit in Ground 2.

Ground 3 – Alleged failure to identify documents

18.  In my view, this is a new point raised by D. In the original hearing, D has never said that the release sought by Ps should not cover all the documents, materials and information set out in the Leave Summons. D has never said that the scope of the release sought is too wide, and some of the documents, materials and information should not be subject to the release. I do not see any reason to why D is entitled to take this new point in the appeal. In my view, this point should not be open to D in the appeal.

19.  Without prejudice to the above, I am of the view that D cannot derive any assistance from this point.

(1) As submitted by Ps, the mere fact that the documents, materials and information covered by the Feb 2024 Order are voluminous simply reflects the gravity and scale of D’s unauthorised downloading. It plainly cannot be a limiting factor as to the scope of Ps’ release. There is no reason or logic as to why Ps’ release ought to be narrower than Ps’ entitlement to delivery up, or what D was able to and did deliver up. It has to be borne in mind that most of the documents are actually copies of Ps’ own documents which D was ordered to deliver back to Ps. The documents contained in the Work USB, Recovery USB and Email USB are claimed by D to (a) relate to or back up his work for P1 during the course of his employment, or (b) include emails and attachments which he might have exchanged with Reliance personnel which might be caught by the Aug 2023 Order.

(2) The overarching test is whether the release sought would achieve justice on the facts of this case, and whether there are cogent persuasive reasons and special circumstances which justify the grant. I am of the view that the answers to these question are clearly in the affirmative. See also Main Decision [51].

20.  There is no merit in Ground 3.

Ground 4 – Release from implied undertaking can only be granted if there is a serious fraud or in the public interest?

21.  It would not be correct to say that release from an implied undertaking can only be granted if to do so would be in the public interest, or would facilitate the investigation or prosecution of a serious fraud.

(1) The relevant principles are summarized in the Main Decision, [29] to [34].

(2) In the case relied upon by D, ie The Jewish Federation of Greater Washington Inc v Aiwo Trading Co Ltd & Anor[23], DHCJ Maurellet SC in fact said at [7(2)]:

“Each case turn on its own facts and no general principles can be formulated beyond stating that the court will not release or modify the implied undertaking, save in special circumstances and where the release or modification will not occasion injustice to the person giving discovery.” (Emphasis added)

(3) What has been said in The Jewish Federation of Greater Washington [7(2)] in fact stemmed from the Court of Final Appeal’s decision in SJ v FTCW[24]. See Anite Telecoms Limited v World Best Cargo-Link Company Limited[25] [19(2)].

(4) In the Main Decision, I have considered the evidence and the parties’ respective submissions, and concluded that D might have committed criminal offence(s) in Hong Kong and/or in the Mainland, and Ps have an arguable civil claim against D and others in the Mainland. I also concluded that releasing Ps from the implied undertaking would not occasion injustice to D. See Main Decision, [51].

22.  I am of the view that Ground 4 is not arguable.

Ground 5 – PSI

23.  I have dealt with the PSI issue in the Main Decision, [35] to [38], and [47] to [49]. Apart from repeating the arguments made in the Feb 2024 Hearing, D has not satisfactorily explained in what way I erred in the analysis as set out in the Main Decision. There is no satisfactory explanation as to why I am not bound by the principles endorsed by the Court of Appeal in SJ v FTCW[26] at [41] to [45]. In particular, the Lee Ming Tee case (which is a decision by the Court of Final Appeal)[27] cited by the Court of Appeal in SJ v FTCW at [42] to [44] clearly concerns answers given under compulsion. The point made by D in [9(3)] under Ground 5 in the DNOA is plainly unarguable.

24.  Further, in the Main Decision, I have in fact also applied the approach in Lim Suk Ling Priscilla v Amber Compounding Pharmacy Pte Ltd[28] to analyse the case. I concluded that even based upon that approach, D could not make out a case by relying upon PSI. See Main Decision, [38], [48] and [49].

25.  I am not satisfied that Ground 5 is reasonably arguable. There is no merit in this ground.

Ground 6 – Possible offence of “trade secret infringement” in the Mainland

26.  Ps would only need to demonstrate that prima facie, D may have committed the offence of “trade secret infringement” in the Mainland. Both Ps and D have adduced expert evidence on Mainland Chinese law, and I have considered the same. I have given my analysis in the Main Decision, [46(2)]. I am not persuaded that the points made by D under this ground have any reasonable prospect of success.

27.  There is no merit in Ground 6.

Ground 7 – Unfair disadvantage

28.  As submitted by Ps, given D’s position that there is no prima facie case that he has committed any criminal offence in the Mainland, the Feb 2024 Order would not subject D to any unfair disadvantage in criminal proceedings against D (if any) in the Mainland. See Main Decision, [51].

29.  Further, according to D’s expert, D does not have any right to remain silent in any criminal investigation or prosecution against him in the Mainland. On the other hand, D has the obligation to truthfully answer all the questions put to him in the investigation and in the trial. In the report dated 17 January 2024, D’s expert said at §2.14(a):

“Is there is right to remain silent?

(1) Art 120.1 of CrimPL[29] stipulates that when interrogating a suspect, investigators should first interrogate the suspect whether he has committed a crime, let him state the circumstances of his guilt or his plea of innocence, and then ask him questions. The suspect shall truthfully answer the investigators’ questions. However, there is the right to refuse to answer questions unrelated to this case.

(2) It can be seen that the CrimPL does not confirm that the suspect and defendants have the right to silence. That is to say, the laws of the Mainland do not encourage suspect and defendants to be silent, but expect suspect and defendants to truthfully state the facts of the case, so as to quickly find out the truth of the case, so that the innocent suspect and defendants can be freed from the proceedings in time, and the guilty suspect and defendants can be treated leniently because of their guilty plea.

(3) Although the law does not stipulate whether the accused has the obligation to answer truthfully in the prosecution and trial stages, requiring the suspect and the defendant to answer truthfully is actually denying the right of the accused to refuse to confess or to remain silent. If the defendant refuses to answer the investigators’ questioning, it will be seen as a refusal to repent. ……” (Emphasis added)

30.  According to D’s expert, D would not have any right to remain silent in any criminal investigation or proceedings against him in the Mainland. On the contrary, D has an obligation to truthfully answer the questions put to him in the investigation and in the criminal trial. With respect, D simply does not have any evidential basis to say that allowing Ps’ application as per the Leave Summons would subject D to any unfair disadvantage in any criminal proceedings against D in the Mainland.

31.  There is no merit in Ground 7.

Ground 8 – Civil proceedings against D in the Mainland

32.  The ruling made in Main Decision [46(2)(c)] is based upon a concession made by the counsel representing D in the Feb 2024 Hearing. Although D is represented by a new team of counsel in this hearing, there is no reason why D is not bound by the concession made by his counsel in the Feb 2024 Hearing. In any event, while there is a prima facie case that D might have committed the offence of “trade secret infringement” in the Mainland, there is no reason why Ps would not have a potential civil claim against D in the Mainland for the same matter.

33.  There is no merit in Ground 8.

Ground 9

34.  While there is no merit in all the previous grounds, Ground 9 does not have a leg to stand on.

Conclusion

35.  For the reasons above, I am of the view that there is no reasonable prospect of success in D’s appeal. D has not sought leave to appeal under the “some other reason in the interests of justice” limb. In any event, I do not see any reason to grant leave to D under this limb. I refuse to grant leave to appeal to D.

STAY OF EXECUTION

36.  It is trite that the existence of an arguable appeal (that is, one with reasonable prospects of success) is the minimum requirement before a court would even consider granting a stay. If there is no arguable appeal, no stay would be granted, however exceptional the circumstances may be otherwise justifying a stay of execution.[30]

37.  Since I have ruled that there is no reasonable prospect of success in D’s intended appeal and I have refused to grant leave to appeal to D, D’s application for stay of execution of the Feb 2024 Order pending the outcome of the appeal must also be refused.

38.  I would add one further comment. As per D’s Summons, the stay sought by D is “by way of interim interim injunction” restraining Ps from using the Materials and Information in or for the purpose of any criminal or civil proceedings or investigations in Hong Kong, in Mainland China, or elsewhere, other than the proceedings herein. With respect, I am of the view that it is incorrect and wrong to seek an interim interim injunction in these circumstances. For the sake of discussion, if the stay application is successful, an order staying the operation of the Feb 2024 Order pending the determination of the appeal would be sufficient. The effect of the Feb 2024 Order is to permit Ps to use the Materials and Information for the purposes of criminal or civil proceedings or investigations in Hong Kong and in Mainland China, notwithstanding the implied undertakings previously offered by Ps when Ps were seeking the Aug 2023 Order and Oct 2023 Order. If the operation of the Feb 2024 Order is stayed, Ps would be bound by the implied undertakings and would not be able to use the Materials and Information for any purpose other than for the purpose of these proceedings.

DISPOSITION

39.  I dismiss D’s Summons.

40.  At the end of the hearing, D requested for a short-term interim stay of 35 days to allow him to have some time to make a renewed application to the Court of Appeal for leave to appeal and for stay pending appeal. Having considered the parties’ respective submissions, without prejudice to all the above, I accede to this request and grant an order staying the operation of the Feb 2024 Order for 35 days. After the expiration of the 35-day period, the interim stay would expire without a further order. Since I am of the view that there is no merit in D’s Summons, no further stay would be granted by me.

41.  Costs should follow the event. There be an order that costs of D’s Summons be paid by D to Ps forthwith, with a certificate for 2 counsel. Those costs are summarily assessed at HK380,820.

42.  I thank all counsel for the helpful assistance rendered to the court.

Draft

Annexure

CACV             /2024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO.              OF 2024

(on appeal from HCA 1235/2023)

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BETWEEN

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NOTICE OF APPEAL

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TAKE NOTICE that pursuant to the leave granted by                   on                2024, the Court of Appeal will be moved so soon as Counsel can be heard on behalf of the Defendant on appeal from the Order herein of Deputy High Court Judge MK Liu dated 20 February 2024 (the “Order”), whereby it was ordered that:

(1) The Plaintiffs do have leave to use the documents, materials and/or information disclosed and/or delivered up by the Defendant pursuant to the Order made by Deputy High Court Judge MK Liu dated 11 August 2023 and the Order made by Deputy High Court Judge Phoebe Man dated 19 October 2023 (the “Materials”), consisting of:

1. All information or documents disclosed in the following items delivered up and handed over by the Defendant to Messrs. Norton Rose Fulbright Canada LLP on 18 August 2023 pursuant to paragraph 6.2 of the Order made by Deputy High Court Judge MK Liu dated 11 August 2023, including:

1.1 a USB in a plastic bag numbered “1”;

1.2 3 USBs in a plastic bag numbered “2”;

1.3 a USB in a plastic bag numbered “3”; and

1.4 a USB in a plastic bag numbered “4”

except for any files which appear to be the Defendant’s personal or private documents or information and are not relevant to these proceedings.

2. Findings in the report issued by Sandeep Jadav, Senior Managing Director of FTI Consulting dated 13 October 2023.

3. Information or documents disclosed by the Defendant in the affirmations filed by the Defendant in these proceedings, including:

3.1 Affirmation of Denis Gaston Fauteux dated 18 August 2023;

3.2 Second Affirmation of Denis Gaston Fauteux dated 27 September 2023;

3.3 Third Affirmation of Denis Gaston Fauteux dated 7 November 2023;

for the purposes of (i) lodging reports and/or criminal complaints to the relevant authorities in Hong Kong and/or the People’s Republic of China (“PRC”) and/or facilitating criminal investigations or proceedings in Hong Kong and/or the PRC, against the Defendant and/or parties as advised by the Plaintiffs’ legal advisors, including, (a) Jiangsu Ruien New Energy Technology Co., Ltd (“Reliance”) (江蘇睿恩新能源科技有限公司); (b) Jiangsu Changrui Lithium Battery Co., Ltd (江蘇常睿鋰電池有限公司); (c) Ms. Chen Xuan or Maggie Chen (陳璇); (d) Mr. Huang Qing Quan (黄清泉); (e) Mr. Kaiser, Wang Kai (王凱); (f) Mr. Kenny Wang (王喜慶) (“Intended Other Defendants”), and (ii) civil proceedings against the Defendant and the Intended Other Defendants in the PRC.

(2) There be liberty to apply;

(3) Costs of the Plaintiffs’ summons dated 8 December 2023 (the “Collateral Use Summons”) be to the Plaintiffs forthwith, with a certificate for two counsel, to be taxed if not agreed.

FOR ORDERS that:

(1) The Order of Deputy High Court Judge MK Liu dated 20 February 2024 be set aside;

(2) The Plaintiffs’ summons dated 8 December 2023 be dismissed;

(3) The Plaintiffs, whether acting by themselves, their directors, officers, servants, employees, agents, representatives, associated or subsidiary companies (including Techtronic Industries Co Ltd, 創科無線普通合夥(Techtronic Cordless GP), 創科研發有限公司(Techtronic Product Development Ltd), 東莞厚街科勁機電設備有限公司), or any of them howsoever, be restrained from using the Materials in or for the purpose of any criminal or civil proceedings or investigations in Hong Kong, the PRC or elsewhere, other than the proceedings in HCA 1235/2023; and

(4) The Defendant’s costs of and occasioned by this appeal and the Plaintiffs’ summons dated 8 December 2023 be paid by the Plaintiffs to the Defendant with certificate for two counsel, to be taxed if not agreed.

AND FURTHER TAKE NOTICE that the grounds of this appeal are that:

(1) No offence committed under Sections 2 and 9 of the Theft Ordinance (Cap 210)

1. The learned Deputy Judge erred in law and in principle in finding there was a prima facie case that the Defendant may have committed the offence of theft under sections 2 and 9 of the Theft Ordinance (Cap 210) (Decision paragraphs 43, 45 and 46(1)):

(1) The learned Deputy Judge failed to make any determination as to whether the Defendant’s acts of downloading or copying documents from his work laptop or from the TTI Group’s online cloud system were capable of meeting the constituent element under the offence of “permanently depriving” the Plaintiffs or the TTI Group of such documents;

(2) The learned Judge failed to make any determination as to whether the Defendant committed such acts “with the intention” of permanently depriving the Plaintiffs or the TTI Group of such documents;

(3) The learned Judge failed to take into account the fact that such acts took place not in Hong Kong but in Changzhou in the PRC.

2. In the premises, the learned Deputy Judge ought to have held that there was no case that the Defendant may have committed the offence of theft under sections 2 and 9 of the Theft Ordinance (Cap 210).

(2) No offence committed under Section 161 of the Crimes Ordinance (Cap 200)

3. The learned Deputy Judge erred in law and in principle in finding there was a prima facie case that the Defendant may have committed the offence of obtaining access to a computer with criminal or dishonest intent under section 161 of the Crimes Ordinance (Cap 200) (Decision paragraphs 43, 45 and 46(1)):

(1) The learned Deputy Judge failed to make any determination as to whether, as a matter of statutory construction, the offence applied to the use of the Defendant’s own work computer provided to him by the 1^st Plaintiff;

(2) The learned Judge failed to take into account the fact there was no evidence (nor was it submitted by the Plaintiffs) that the Defendant:

(a) Had “obtained access” to any other computer; and

(b) As an employee of the 1^st Plaintiff, was not permitted to access the documents on his work computer or from the TTI Group’s online cloud system;

(3) The learned Judge failed to take into account the fact that the Defendant’s acts of downloading or copying documents from his work computer or from the TTI Group’s online cloud system took place not in Hong Kong but in Changzhou in the PRC.

4. In the premises, the learned Deputy Judge ought to have held that there was no case that the Defendant may have committed the offence of obtaining access to a computer with criminal or dishonest intent under section 161 of the Crimes Ordinance (Cap 200).

(3) Failure to identify which documents were necessary for release

5. The learned Deputy Judge erred in law and principle in granting wholesale release of the implied undertaking in respect of all of the Materials, without any consideration as to whether they were necessary or proportional to the application; and, if so, precisely which of the Materials.

6. In the premises, the learned Deputy Judge ought to have dismissed the application as an abuse of process.

(4) Not a serious fraud or public interest case

7. Having cited the relevant principles (Decision paragraph 30), the learned Deputy Judge erred in law and principle and misapprehended the facts in failing to make any determination as to whether release of the implied undertaking was in the “public interest” or for the investigation or prosecution of “serious fraud” and in failing to consider, adequately or at all, whether the Plaintiffs had demonstrated cogent and persuasive reasons why they should be released from the implied undertaking (Jewish Federation of Greater Washington Inc v Aiwo Trading Co Ltd [2021] HKCFI 1381 [7(5)]). The learned Deputy Judge failed to take into account the following matters:

(1) Other than simply citing the relevant authorities, the Plaintiffs failed to put forward any positive case that any “serious fraud” had taken place;

(2) There is no allegation of fraud pleaded against the Defendant in the proceedings below;

(3) The Plaintiffs’ submissions, as to criminality, were simply that the Defendant “may” have committed offences under section 9 of the Theft Ordinance and under section 161 of the Crimes Ordinance (Decision paragraph 43); and that the Defendant “may” have committed the offence of “trade secret infringement” in the PRC (Decision paragraph 44).

(4) Other than simply citing the relevant authorities, the Plaintiffs failed to put forward any submissions that, in the circumstances of this case, it was in the “public interest” for the Plaintiffs to be released from their implied undertaking.

8. The learned Deputy Judge ought to have held that the Plaintiffs had failed to demonstrate cogent and persuasive reasons as to why they should be released from the implied undertaking, that this not a case where a serious fraud has been committed, and that it is not otherwise in the public interest for the Plaintiffs’ application to be granted.

(5) PSI not exhausted

9. The learned Deputy Judge erred in law and in principle and misapprehended the facts in:

(1) Finding that the Defendant could not rely on the privilege against self-incrimination (“PSI”) (Decision paragraph 47);

(2) Failing to apply and wrongly distinguishing the Judgment of the Singapore Court of Appeal in Lim Suk Ling Priscilla v Amber Compounding Pharmacy Pte Ltd [2020] 2 SLR 912 in failing to properly take account of the following findings therein:

(a) Where documents are disclosed under compulsion, the disclosing party retains its right to make a timely assertion of PSI;

(b) PSI need not be asserted until there is a “real and appreciable” risk, as opposed to a “mere possibility”, that a person may be exposed to criminal proceedings;

(3) Failing to distinguish the Hong Kong Court of Appeal authority SJ v FTCW [2014] 1 HKLRD 849 (Decision paragraph 38) – which did not concern the question of disclosure of documents under compulsion.

10. The learned Deputy Judge failed to take any or sufficient account of the following relevant facts:

(1) The Defendant’s disclosure of the Materials by way of his 1^st, 2^nd and 3^rd Affirmations was provided under compulsion resulting from the court’s disclosure orders (containing penal notices) and under threat of contempt proceedings; and

(2) The Defendant made a timely assertion of PSI in his 4^th Affirmation, following receipt of the Collateral Use Summons.

11. The learned Deputy Judge ought to have held that the Defendant was entitled to invoke PSI in resisting the Collateral Use Summons.

(6) No basis for finding in respect of a possible offence of “trade secret infringement” in the PRC

12. The learned Deputy Judge erred in law and in principle and misapprehended the facts in finding there was a prima facie case that the Defendant (and others) may have committed “trade secret infringement” in the PRC (Decision paragraphs 44, 45 and 46(2)) – when there was no sufficient evidence to support such a finding.

13. The learned Deputy Judge failed to take any or sufficient account of the fact the Plaintiffs had failed to adduce any evidence, including from its Experts, to identify any particular instances of the offence of trade secret infringement under PRC law (including failing to identify the relevant trade secret), and wrongly took into account the following matters:

(1) Evidence of the Defendant having simply sent emails and attachments to Reliance personnel (Decision paragraph 41);

(2) The bare assertion that the Defendant “might have passed at least some files” to Reliance (Decision paragraph 41); and

(3) The Defendant’s salary negotiations with respect to his potential employment with Reliance (Decision paragraph 46(2)(b)).

14. The learned Deputy Judge ought to have held that there was no, or insufficient, evidence to support any possible offence of trade secret infringement against the Defendant in the PRC.

(7) Failure to consider whether release from the implied undertaking would subject the Defendant to an unfair disadvantage in the potential PRC criminal proceedings

15. Having cited the relevant authorities (Decision paragraphs 30 and 34(2)), the learned Deputy Judge erred in law and principle in failing to make any determination as to whether the use of the Materials in PRC criminal proceedings may subject the Defendant to an unfair disadvantage, in particular in circumstances where the Materials were provided under compulsion.

16. The learned Deputy Judge ought to have held that the use of the Materials in any PRC criminal proceedings would subject to the Defendant to an unfair disadvantage.

(8) No basis for finding in respect of civil proceedings in the PRC

17. The learned Deputy Judge erred in law and principle in finding that the Plaintiffs had shown a prima facie arguable civil case against the Defendant and others in the PRC, simply on the basis that, if there can be potential criminal proceedings against the Defendant and others in the PRC, the Plaintiffs would have a potential civil claim against the Defendant and others in the PRC (Decision paragraph 46(2)(c)).

18. The learned Deputy Judge ought to have there was insufficient evidence to support a finding that there was a potential civil claim against the Defendant in the PRC.

(9) Wrongful exercise of Discretion

19. In the premises, the learned Deputy Judge:

(1) Erred in exercising his discretion to grant leave under the Collateral Use Summons in respect of the entirety of the Materials;

(2) Ought to have held that the Plaintiffs had failed to demonstrate (a) special circumstances; and (b) that the release of the implied undertaking would not occasion injustice to the Defendant; and

(3) Ought to have dismissed the Collateral Use Summons, on such grounds.

AND FURTHER TAKE NOTICE that the Plaintiff proposes that this appeal be expedited and assigned to the List of Interlocutory Appeals.

Dated the        day of                          2024