GENTLE SOAR LTD v. CMBC CAPITAL FINANCE LTD AND OTHERS

HCA 678/2021

[2021] HKCFI 2775

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 678 OF 2021

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DECISION

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1.  On 31 August 2021, D2 and D3 took out a summons (the “Further Evidence Summons”) for leave to adduce D3’s 2^nd Affirmation dated 31 August 2021 (“D3/2^nd”).

2.  Directions on the further conduct of the Injunction Summons were first given by Lisa Wong J on 13 May 2021.  Parties were given leave to obtain the earliest available hearing date.  A tight timetable for the filing of evidence was laid down.  P was to file further evidence within 7 days therefrom, D2 and D3 to file further evidence in opposition within 14 days thereafter, and P in reply within 14 days thereafter.  No further affirmation could be filed without leave.

3.  P filed his further evidence on 26 May 2021.

4.  On 16 June 2021, I extended time for D2 and D3 to file their further evidence in opposition to 6 July 2021.

5.  By the Order of 27 July 2021, and upon the application of D2 and D3, I extended the time for them to file further evidence in opposition to 2 August 2021.  This further extension was however granted on an unless basis.

6.  Then, on 2 August 2021, D2 and D3 filed the affirmation of Leung Man Man.   

7.  Nearly one month later, the Further Evidence Summons was taken out on 31 August 2021. 

8.  D3/2^nd comprises 110 paragraphs and 32 pages of contents, with 669 pages of documentary exhibits produced.  The contents are factual.  A lot of the events dealt with therein took place in May or June 2021. 

9.  At §3 of D3/2^nd, D3 says that he makes D3/2^nd to update the Court on recent developments in the matter that have not been included in the affirmations filed so far.

10.  No explanation has been given as to why most of the so‑called updates were not included in the earlier affirmations, nor why they were not dealt with before the deadline of 2 August 2021 imposed by this Court on an unless basis.  They clearly could have been, as a lot of the events set out in D3/2^nd took place in May and June.

11.  There is no escape from the criticisms that the application was made late, and was made late despite the procedural background set out above.

12.  However, the contents of D3/2^nd, or quite a part of them, are at least prima facie relevant to the consideration of the injunction which P seeks.  There is force in Mr Dawes’ submissions that without the update, the picture which this court may receive might be an askew one.

13.  Mr Ho objects to the application.  His stance is perfectly understandable.

14.  In deciding how my discretion is to be exercised, I have to consider all facts.  This is a case involving a listed company.  I am loath to make my decision on the substantive application without the full relevant picture. This is particularly so given the fact that I have to consider balance of convenience in due course.

15.  The delay should be discouraged.  Payment of costs do not necessary rectify prior incompliance or delay in taking steps in an action.

16.  However, on the facts of this case, I am persuaded that the fairest way of dealing with the matter is to allow the filing of D3/2^nd, give P time to respond, and then impose a tight timetable for parties to come back so as to limit the delay to the minimum. 

17.  To mark the disapproval of this Court in the lateness of the Further Evidence Summons, I award costs against D2 and D3 for the costs thrown away by this adjournment, with certificate for 2 senior counsel, to be assessed on an indemnity basis, the quantum of which (and in particular whether there be summary assessment) is to be considered together with the costs of the substantive hearing of the injunction application.  The lateness in which the application is made, set against the aforesaid procedural background, in any event constitutes in my view special events which justify indemnity costs.

18.  I also direct that D2 and D3 shall provide to P by close of business tomorrow a redacted version of D3/2^nd indicating which parts of D3/2^nd that they are no longer seeking to rely on, so that parties can focus on the importance.  At the same time, D2 and D3 may file an affirmation exhibiting (both without further comments or evidence) the inter partes correspondence that are now at bundle [C/III 1415 to 1446], and any latest correspondence which completes that chain.

19.  I give P 5 weeks to prepare and file its reply.  I direct that parties may come back before this court on 29 October 2021, with one day reserved.