DAIMLER AG (FORMERLY MERCEDES BENZ AG) v. LEIDUCK, HERBERT HEINZ HORST AND ANOTHER

CACV 172 /2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 172 OF 2011

(ON APPEAL FROM HCA NO. 4089 OF 1994)

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BETWEEN

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J U D G M E N T

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Hon Fok JA (giving the Judgment of the Court):

1.  On 3 May 2012, we allowed the plaintiff’s appeal with the result that, subject to an order that the plaintiff provide further answers to certain interrogatories administered by the defendants, we granted relief to the plaintiff from sanctions flowing from its breach of an unless order to provide those answers.

2.  The defendants now seek, by a notice of motion dated 31 May 2012, leave to appeal to the Court of Final Appeal pursuant to s. 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance (Cap. 484) on the ground that there are questions of great general or public importance involved in the intended appeal or that the appeal ought otherwise be submitted to the Court of Final Appeal for decision.

3.  It is said that the intended appeal involves five questions of great general or public importance as set out in the notice of motion.

4.  With respect, we do not consider that the question of whether any distinction should be drawn, for the purposes of RHC O.2 r.5(1)(f), between a party and its legal adviser (Question 1) is one which gives rise to a question of great general or public importance.  The wording of the rule itself expressly states that the Court should take into account whether the failure to comply was caused by the party in default or his legal representative.  The weight to be attached to this factor in any particular case is a matter for the discretion of the Court.

5.  The questions of whether a sanction under an unless order takes effect when there is only a partial, as opposed to total, breach of the unless order or where the breach may require further determination (Questions 2 and 3) do not arise from our judgment, which proceeded on the footing that the automatic sanction flowing from breach of the unless order had taken effect.

6.  Nor did we hold that a claim for legal professional privilege must be taken in the answer on oath, so the question of whether the Istel line of cases requires this (Question 4) also does not arise from our judgment.

7.  The final question of whether it is open to the Court of Appeal to grant relief to a party for breach of an unless order when the relevant breach was all along denied by that party and no application was made for relief (Question 5) raises the question of whether the Court has no discretion to grant relief from sanction at all in such circumstances.  We do not think that proposition is reasonably arguable as it would be inconsistent with the wide powers of case management conferred, for example, by RHC O.1A rr.1, 2 and 4 and O.2, r.5(1)(a).  So far as the question is directed to a challenge to the particular exercise of our discretion to grant relief in the present case, this does not, in our view, give rise to a question of great general or public importance.

8.  As to the “or otherwise” ground, it is contended for the defendants that leave should be granted on this basis because the plaintiff misled the Court into believing that its non-compliance with the unless order was not deliberate and that its claim for legal professional privilege was bona fide.  The defendants submit that the answers now provided by the plaintiff pursuant to the order consequent on our judgment shows that the plaintiff’s claim of legal professional privilege in the original answers could not possibly have been genuine and so, it follows, its non-compliance with the unless order must have been intentional and deliberate.  It is submitted that this factor would support the Judge’s exercise of discretion or would now entitle the Court of Final Appeal to exercise a fresh discretion on whether to grant the plaintiff relief from the sanction of the unless order.

9.  It has been repeatedly said that the grant of leave on this ground is an exceptional course: see, e.g. Chao Keh Lung v Don Xia (2004) 7 HKCFAR 260 at §9.

10.  We are not satisfied that it must, as the defendants contend,  inevitably be inferred from the answers now given to the interrogatories that the plaintiff’s claim of legal professional privilege in the original answers was made in bad faith.  The question of whether the breach of the unless order was intentional or caused by default of the plaintiff’s legal representatives was only part of the overall circumstances taken into account by this Court in arriving at our decision to grant relief from sanction.  We considered the question of proportionality to be a weighty factor because of the consequence flowing from the sanction, namely a finding of fraud by default.  It is by no means clear to us that, even if a fresh discretion were to be exercised, the decision to grant relief from sanction would be any different.

11.  Finally, the intended appeal is an interlocutory appeal and we bear in mind the observation of the Appeal Committee in CSAV Group (Hong Kong) Ltd v Jamshed Safdar (2007) 10 HKCFAR 629 that interlocutory appeals to the Court of Final Appeal on procedural issues are rare and exceptional.

12.  In the circumstances, we do not consider that the intended appeal involves any question of great general or public importance or that leave should be granted on the “or otherwise” ground.

13.  Accordingly, we dismiss the notice of motion with costs to the plaintiff, to be taxed if not agreed, with a certificate for two counsel.