PAUL'S MODELS ART GMBH & CO KG v. U.T. LTD AND OTHERS

HCA 1501/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1501 OF 2000

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JUDGMENT

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1.  On 18 January 2011, my judgment was handed down in relation to matters which were canvassed before me at the hearing on 24 November 2010. Materially for today’s purpose, the judgment dealt with an application for discovery either under r. 3 or r. 7 of O. 24, RHC by reference to certain categories of documents which were set out in an Amended Schedule to a summons seeking that discovery.

2.  Today’s hearing is the application made by the Plaintiff for leave to appeal from my judgment and the orders made consequential upon it in relation to those various categories.

3.  I can deal briefly with the principles applicable on the application for leave to appeal, there being no substantial difference between the way in which those principles have been enunciated by the parties this morning.

4.  Essentially under the relevant section of the High Court Ordinance the applicant for leave to appeal must establish that there are reasonable prospects of success.  Leave to appeal is not to be lightly granted.  The court must be satisfied that the appeal has some reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard.  Reasonable prospects of success involve the notion that the prospects of succeeding must be reasonable and therefore more than “fanciful”, without having to be “probable”.

5.  The main thrust of the application this morning relates to certain documents which have been referred to as the “related documents” which essentially comprise “purchase orders, shipping documents and accounting records relating to various invoices” referred to in the individual categories.  I dealt with disclosure by reference to the invoices themselves, but in my judgment in January I disallowed or did not order disclosure of the related documents (the purchase orders, shipping documents and accounting records relating to those invoices).

6.  As I think it is apparent from the judgment, in particular at paragraphs 65 to 69, the only point in contention on Category A was whether or not the class of documents to be disclosed should be limited to the invoices, or whether it should also include the purchase orders, shipping documents and accounting records relating to these invoices.

7.  I recollect, and I think that the judgment records that I asked Mr Pirie, then appearing for the plaintiff, what it is that the additional documents might add to the information that was already available from the invoices themselves.  The answer that I was given by Mr Pirie, as is reflected in paragraph 68 of the judgment, is that the invoices might go to other aspects of quantum.

8.  This morning, Mr Alder, now appearing for the Plaintiff, wishes to argue that the related documents are not limited to matters of quantum but also go to deal with matters of liability, and he has expanded upon that point orally in a way which is not entirely presaged in his skeleton argument but which is certainly touched upon in that argument.

9.  In broad terms, he says, the other documents might help to deal with questions of liability by identifying the scope and degree of collusion between the two “camps” of the defendants, as he calls them, in the scheme designed to get around the Agreement (as it was defined in my earlier judgment).

10.  Ultimately, I am not persuaded that there are reasonable prospects of success on this point for essentially the reasons which I gave in paragraph 69 of my judgment.

11.  As to the Categories B, C, D, E and G where there is also the desire to appeal in relation to the matters of those related documents, my reasoning is the same and I am also not satisfied that there are reasonable prospects of success on any such appeal.

12.  As to the other matters in the proposed appeal sought, the main criticism of my judgment in relation to Category B is that the exercise of my discretion was vitiated by what I said in paragraph 84 of the judgment.  There I recorded that Mr Shum, counsel for the 4^th and 5^th defendants, had told me that disclosure of the relevant invoices from the 1^st defendant to the 4^th defendant had already been provided.  This morning, Mr Shum has accepted that he did in fact tell me that on the previous occasion and has this morning referred me to an item on the 4^th and 5^th defendants’ First Supplementary List of Documents which appears to identify a class of documents which is those invoices.  On that basis, I do not think that there are reasonable prospects of success in establishing that the exercise of my discretion has been vitiated.

13.  As to Category E, the main criticism by Mr Alder this morning is in relation to what I said in paragraph 102 of my judgment and, in particular, the sentence where I identified that “insofar as there is any claim by the plaintiff arising from goods which were manufactured by the 1^st defendant or Davidson and sold on by the 4^th defendant, the relevant documents are already covered by other categories of documents sought”. Mr Alder is probably correct when he says that I should not have meant literally the relevant “documents” are already covered by other categories of documents sought, because there is no exact overlap between the categories of documents sought.  Therefore he is also correct in reading that sentence as being a reference by me to the relevant “matters” or “sales” as would have been already covered by other categories of documents sought.

14.  In this context, I was saying that I did not think that this category was necessary for production, and I am not persuaded that there are reasonable prospects of success of an appeal against that exercise of discretion.

15.  So far as the criticism in relation to Category E relates to the position of the 2^nd defendant, although this was raised in the draft Notice of Appeal, it was not a matter that was particularly pushed by Mr Alder this morning, but in any event I would say that I am also not satisfied that there would be reasonable prospects of success on an appeal in relation to that aspect.

16.  Ultimately therefore, I am against Mr Alder this morning and I refuse leave to appeal.

[After hearing submissions on costs]

17.  The costs of this application are to be paid by the plaintiff to the defendants, such costs to be assessed by summary assessment on paper.  The defendants shall within 7 days after this judgment file and serve their schedules of costs.  The plaintiff is to file and serve their comment within 3 days thereafter.   I do not see any need for a reply submission on the assessment, before I make that assessment.