TRENUS OCEANWAY LTD v. RICHLAND INTERNATIONAL LTD AND ANOTHER

HCCW 352/2014

[2021] HKCFI 3294

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO 352 OF 2014

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D E C I S I O N

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1.  On 25 March 2021 I delivered my decision in respect of the 1^st Respondent’s application for third party discovery against HSBC and DBS (collectively “Banks”). I dismissed the application for the reasons explained in my decision. The 1^st Respondent seeks leave to appeal.

2.  The relevant principles are summarised in my decision delivered four days ago in the same proceedings, which was an application by the Petitioner on that occasion for leave to appeal my dismissal of an application by it for specific discovery.  I will repeat what I say in [2]–[3] of that decision[1]:

“2. The Petitioner seeks leave to appeal that decision. The principles that apply to leave applications are not controversial. It is convenient to quote the summary of them in [5]–[7] of the Petitioner’s skeleton.

‘5. The relevant principles are trite and were recently considered by this Court in Re Smartplace Limited [2021] HKCFI 1924 at §2. In brief:

(a)  Leave to appeal will generally be granted where there is a reasonable prospect of success or some other reason in the interest of justice for permitting an appeal is demonstrated.

(b)  Where a decision involves the exercise of discretion, the Court of Appeal will only interfere with the same where it is demonstrated that decision was reached under mistake of law and disregard to principle, or under misapprehension as to facts.

6. To be fair, it has also been held by the Court of Appeal (consisting of Kwan JA, as she then was, and Fok JA, as he then was)  in Sunny Tadjudin v. Bank of America, NA (Unrep., HCMP 691/2012, 29 June 2012)  at §25, “[U]nless very special circumstances are made out, an exercise of the discretion in refusing specific discovery would not be disturbed on appeal”.

7. Regard may also be had to the considerations summarised at §7 in K&L Gates v. Navin Kumar Aggarwal [2019] HKCFI 200, as follows:

(a)  Leave to appeal may only be granted if the applicant can demonstrate reasonable prospects of success, meaning that the prospects of succeeding must be reasonable and therefore more than fanciful, without having to be probable. Merely showing that the appeal is arguable and not fanciful is not sufficient.

(b)  In specific discovery applications, the scope of the order often requires a judgment call to be made, having regard to all the circumstances. The fact that some irrelevant materials may be caught, of itself, is no basis to say the judge has erred, or that the Court of Appeal should intervene.

(c)  It is a misuse of the appellate process to give the litigant (or his counsel)  a platform for regurgitating his arguments again in the hope that the appellate judges may come to a different view. The relevant question for the Court of Appeal is whether the judge has fallen into palpable errors which can give rise to grounds for intervention by the appellate court.

(d)  Lodging an appeal with ill-considered and unsatisfactory grounds of appeal, particularly those that provide no more than a lengthy critique of the judgment rather than identify a justifiable basis for the Court of Appeal interfering in the decision of the judge below, is not acceptable.

(e)  Even if the threshold test of reasonable prospect is satisfied, the court still retains a discretion whether to grant leave, and may refuse leave in the interests of procedural economy and proportionality.

(f)  Case management decisions made in the exercise of discretion (which include orders for specific discovery)  are only subject to appeal in rare circumstances, and the hurdle faced by the appellant is very high.

(g)  In the context of specific discovery, one consideration relevant to the exercise of discretion is the progress (or lack thereof)  in the prosecution of the action and whether further arguments over discovery would impede, as opposed to progress, the determination of the real disputes between the parties.’

3.  In short, it is necessary for the Petitioner to demonstrate that I have made not only an error, but an error of sufficient gravity to justify the Court of Appeal interfering in what is a matter of discretion.”

3.  The 1^st Respondent advances three proposed grounds of appeal.  The first is that my reasoning in [4] of the decision was erroneous because the 1^st Respondent was seeking orders that the Banks state when they parted with the documents and not simply disclosure of what they still have in order that the information in the documents could be considered.  It is correct that my decision preceded on the basis that the purpose of the specific discovery application was to obtain documents from the Banks in order to consider their contents, although [2] of the summons makes reference to an order that the Banks explain the circumstances in which they ceased to have possession custody or power of documents which they once had but no longer have.  The reason for this is that this was the way the application was framed and advanced by Mr Joffe.  Mr Lui, who appeared for the 1^st Respondent on the leave application, fairly accepted that it was not argued before me that, as is now suggested, it was also important to see whether or not, for example, records of transfers might have not existed during the period in which the Petitioner says the transfer took place as this would be relevant to a determination of the veracity of part of the Petitioner’s case that they did.  I proceeded on the basis that if I concluded, as I did, that it had not been demonstrated that it was likely that the Banks had the documents sought there was no justification for ordering discovery as it was not necessary (RHC O 24 r13)  as it had not been suggested to me that even if the Banks no longer had the documents, whether they had ever had them was relevant.

4.  The second and third grounds concerns my assessment of the evidence and whether it demonstrated as is required by Section 42 of the High Court Ordinance, Cap 4 that it is likely that the Banks have or had in their possession the relevant documents.  What is now argued is that in the Petitioner’s own affirmations there was evidence that suggested that the Banks had more documents and this evidence, in combination with the letters referred to in my decision, was sufficient to demonstrate that it was likely the Banks had the documents.  However, Mr Lui again very fairly accepted that the evidence was not drawn to my attention in either the 1^st Respondent’s written or oral submissions, which is why I did not have regard to it in reaching my decision.

5.  I accept that with the benefit of further thought the 1^st Respondent is able to point to relevant matters to which I did not have regard.  It may be that if these matters had been drawn to my attention and their relevance developed during submissions it might have had a bearing on my ultimate decision. However, this is not what happened.  This raises the question of whether the exercise of a discretion in respect of a discovery application can properly be appealed if the basis for saying that the decision is wrong is that weight was not given to matters, which had not been brought to the court’s attention, or not adequately brought to the court’s attention.  In these circumstances can it be said that the court, in a relevant way, misapprehended the facts?  No authority on this question was brought to my attention.  However, given the principles that I explain in the passages from the authorities quoted earlier it seems to me that the answer is no.  If it is only in cases which involve “very special circumstances” or in which “the judge had fallen into palpable error” that the Court of Appeal will intervene then it would seem to me that the failure to bring the relevant facts and matters adequately to the court’s attention leading to a possible misapprehension by the court of what are the relevant facts and matters, is not something that justifies intervention by the Court of Appeal and, therefore, the 1^st Respondent has not demonstrated that it has a reasonable prospect of success.  Otherwise a party is simply being given the opportunity to have another go at putting its case in a more persuasive form.

6.  I, therefore, dismiss the application.  The 1^st Respondent shall pay the Petitioner’s costs with a certificate for counsel, such costs to be taxed if not agreed and paid forthwith.