RE THE PRUDENTIAL ENTERPRISE LTD

HCCW594/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP NO.594 OF 1999

---------------------

---------------------

-----------------------

D E C I S I O N

-----------------------

1. This is the petitioners' application by summons filed on 23 September 2003 made pursuant to Order 24, rule 7, Rules of the High Court. Broadly speaking, the petitioners seek specific discovery by affidavit against the 1st respondent in respect of the corporate documents, accounts and banking documents and also documents on acquisitions of certain UK properties of two Guernsey companies, Mount Eden Land Limited ("MEL") and Mount Cook Land Limited ("MCL").

2. The relevance of these documents is not in issue. It has always been the petitioners' case that the 1st respondent beneficially owns and controls MEL and MCL.

3. Previously by summons filed on 15 February 2001 ("the 1st Summons"), the petitioners had also applied under Order 24, rule 7 for discovery by the 1st respondent of similar and more documents of MEL and MCL and another Guernsey company, Interstitial Holdings Limited. These three companies are involved in the Interstitial Scheme, which is one of the petitioners' central complaints in these proceedings. In meeting the 1st Summons, the 1st respondent filed his 10th affidavit in which he stated that he had ceased to be a director of MEL and MCL on 2 January 2001 and no longer controlled the two companies. The 1st respondent further stated that he no longer had access to the documents of the two companies and he had not in his possession custody or power any of the classes of documents sought by the 1st Summons. As a result of what was stated in this 10th affidavit, the petitioners' application could not be taken any further. The 1st Summons was dismissed with the decision being handed down on 10 August 2001.

4. The petitioners present application were prompted by an article appearing in a UK newspaper, Evening Standard, on 13 June 2003, and also three judgments of the English Courts to which MEL or MCL are parties. The 1st respondent is not a party to any of these litigations. He had also not testified in any of them, though there had been unsuccessful attempts to subpoena him. In these three judgments, the judges either found or commented that the 1st respondent was in control of MEL or MCL with regard to certain dealings or activities undertaken by them. In two of the cases, the dealings or activities in question occurred or continued after January 2001. The article in Evening Standard is a coverage of the 1st respondent and his involvement and activities in the London property market. The article made references to the judgments and the judges' findings and comments on the 1st respondent and his role in MEL and MCL.

5. The petitioners contend that the article and the judgments provide new materials and evidence showing that the 1st respondent has remained in control of MEL and MCL, in contradiction to what the 1st respondent stated in his 10th affidavit. On this basis, the petitioners make the present application.

6. The 1st respondent resists the application on two main grounds :

(1)	The newspaper article and the judgments (collectively referred to as "the UK materials') are inadmissible evidence, and
(2)	The present application is an attempt to re-litigate a matter that had been decided by the court, which is not permissible.

Admissibility of the UK materials

7. Under the common law, it has been established in a line of decisions starting from Hollington v. Newthorn & Co. Ltd [1943] 2 All ER 35 that judicial findings are inadmissible as evidence of the facts upon which they were based in subsequent proceedings between one of the parties to the earlier proceedings and a stranger : see a summary of the decisions in Secretary of State v. Bairstow [2003] 1 BCLC 696, at 703-706. In the Bairstow case, it was held that this principle was not confined to cases in which the earlier decision was made in criminal proceedings. The rationale behind the principle is that the findings only represent the conclusions or opinions of the judge in the earlier action. Unlike facts that are evidence, the judge's opinions are not relevant.

8. The parts of the three English judgments that the petitioners seek to rely are clearly the findings or comments of the English judges. On the common law principle set out above, they are inadmissible as evidence in the present action to show that the 1st respondent has remained in control of MEL and/or MCL.

9. In Symphony Group plc v. Hodgson [1993] 4 All ER 143 at 153, Balcombe LJ stated that a departure from this principle is justified if the connection of the non-party with the earlier proceedings was so close that he will not suffer any injustice by allowing this exception to the general principle. Relying on this proposition, the petitioners argue that the present case justifies a departure from the general principle because the 1st respondent was at liberty to take part in the UK proceedings and, at least in one of then, he had deliberately avoided attendance at the trial.

10. I am unable to accept this submission. The general position is that as between a party to the earlier action and a party who is not, judicial findings are inadmissible as evidence of the facts so found. The exception or departure that Balcombe LJ was referring to is a situation where the party who is not a party in the earlier action is so closely connected to the earlier action such that it would be not be unjust for the findings in the earlier action to be admitted in the subsequent action. In the present case, neither the petitioners nor the 1st respondent was a party to the three English proceedings. The exception referred to by Balcombe LJ has no application at all. It is therefore not open to the petitioners to rely on the English judgments as the basis for the present application.

11. As to the article in Evening Standard, plainly that is hearsay materials. Given that the English judgments, on which the article was based, are inadmissible, no weight can be placed on the article.

Attempt to re-litigate?

12. As a matter of general principle, when an interlocutory application was dismissed, whether on procedural ground or merits, it is not permissible to make a fresh application for the same relief and/or on the same ground : Sanyo Electric Trading Co Ltd v. Leung Kwok-hing [1993] 1 HKLR 253. There are, however, recognized exceptions, such as in Order 14 or contempt of court proceedings : see Wong Kam Hong v. Triangle Motors Ltd [1998] 2 HKLRD 330, or in applications to discharge injunctions : Chu Hing Ching v. Chan Kam Ming [2001] 1 HKC 396. The Rules also provide for certain exceptions by enabling applications be made to vary or revoke an earlier order or decision.

13. Another possible exception to the general rule against re-litigating over interlocutory applications will be where there is a significant change of circumstances. In Chanel Ltd v. Woolworth & Co. [1981] 1 WLR 485, at 492H, Buckley LJ in dismissing an appeal against the dismissal of a motion to discharge undertakings given by consent on an interlocutory injunction application, held that :

"The defendants are seeking a rehearing on evidence which, or much of which, so far as one can tell, they could have adduced on the earlier occasion if they had sought an adequate adjournment, which they would probably have obtained. Even in interlocutory matters a party cannot fight over again a battle which has already been fought unless there has been some significant change of circumstances, or the party has become aware of facts which he could not reasonably have known, or found out, in time for the first encounter."

14. The petitioners' present summons involve the consideration of two issues :

(1)	Whether the 1st respondent has remained in control of MEL and MCL after 2 January 2001 when he ceased to be director of the companies, and
(2)	Whether the 1st respondent has possession custody or control of the documents of MEL and MCL.

15. Both these issues had been considered and adjudicated upon under the 1st Summons. Insofar as the petitioners rely on the UK materials as amounting to new evidence or circumstances, I have already ruled that they are inadmissible to prove the 1st respondent's role in or control of MEL and MCL.

16. Irrespective of the admissibility of the UK materials, the present application is effectively an attempt to contradict the statement and assertion the 1st respondent made in his 10th affidavit. As stated in my Decision of 10 August 2001, this is generally not permissible. Attempt to contradict an affidavit of documents will only be permitted if it can be shown by admissions in pleadings or the contents of the affidavit itself or documents referred thereto that the affidavit is insufficient : Jones v. Monte Video Co. (1880) 5 QBD 556 at 558. The UK materials, even if admissible, will not entitle the petitioners to challenge the veracity of the 1st respondent's assertion that he no longer has and does not have the documents sought.

17. Mr Mok submits that discovery is an ongoing process such that if fresh evidence comes to light, then it is only logical that the petitioners are entitled to make a fresh application for specific discovery. In my view, if there is fresh evidence that shows the existence or relevance of documents previously sought but refused, then there can be no doubt that a renewed application for discovery is permissible. But where, as the petitioners contend here, fresh evidence arises casting doubt on the assertion on oath by the party from whom discovery is sought that he does not have the documents asked for, then the applying party cannot make a renewed discovery application on the basis that the responding party has not been truthful in his assertion on oath.

18. Additionally, the 1st respondent has, in response to the present application, made his 16th affidavit in which he again stated that he no longer had and did not have any of the classes of document sought in his possession custody and control. At this interlocutory stage, this affidavit has to be accepted as conclusive, and the petitioners cannot seek to challenge or contradict it.

Conclusion

19. For the reasons given above, the petitioners' summons is dismissed. There will also be an order nisi that the petitioners pay the 1st respondent's costs of the application, to be taxed if not agreed.