CHINA MEDICAL TECHNOLOGIES, INC (IN LIQUIDATION) AND OTHERS v. BANK OF CHINA (HONG KONG) LTD

HCA 1742/2018

[2026] HKCFI 2817

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1742 OF 2018

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DECISION

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Introduction

1.  By summons dated 28 November 2025 (“the Summons”), D applies for, among other things, specific discovery against Ps.

2.  By an order dated 12 December 2025, Mr Justice Eugene Fung ordered that, among other things, D’s application for specific discovery (“the Application”)  by the Summons be adjourned to a date to be fixed for substantive argument.

3.  The parties made an application by their joint letter dated 16 March 2026 to this court for paper disposal of the Application.  This court granted their joint application by an order dated 20 March 2026.  In the said order, this court gave directions to the parties for filing of their respective written submissions.

4.  It transpired that during the adjournment, the parties managed to reach some agreements and Ps are agreeable to disclose some of the documents sought by D in the Summons on conditions by reason of the purported confidentiality of such documents.  The remaining issues are whether the proposed conditions should be imposed on the disclosure of the allegedly confidential documents and liability and quantum of costs of the Application.

5.  Mr Manzoni SC filed his written submissions for Ps and Mr Chan filed his (including his reply submissions)  for D.

6.  In this Decision, I shall determine these two issues.

Proposed confidentiality measures

7.  D asks for, among other things, the disclosure of court documents in the legal action commenced by Ps against KPMG (“the KPMG Documents”).  D says that these KPMG Documents shed light on when P could have discovered the alleged fraud with due diligence and this has a bearing on the limitation defence of D in this action.  D also says that the KPMG Documents is also relevant to the issue of quantum of damages recovered by Ps in this action as there may be overlapping losses in these two sets of proceedings.

8.  Now Ps agree to disclose the KPMG Documents but they claim that these documents are confidential and cannot be disclosed without the consent of KPMG.  Ps have proposed the following conditions to be imposed on the disclosure of the KPMG Documents:

(1)  The KPMG Documents are exhibited to a confidential affidavit and placed in a sealed envelope not available for inspection by the public;

(2)  The KPMG Documents are kept in a separate confidential bundle at trial and not to be referred to in open court;

(3)  The KPMG Documents are only made available to two of D’s management, D’s legal department, D’s solicitors and D’s counsel;

(4)  D be at liberty to vary, from time to time, the two members of its senior management permitted to access the confidential affidavits and its exhibits, subject to Ps and their solicitors being notified in advance of such variation and provided with the name(s)  and position(s)  of the substitute member(s); and

(5)  The KPMG Documents are only used for the sole purpose of these proceedings and they must be returned or destroyed upon final resolution of these proceedings.  

9.  Despite its express doubt about the entitlement of Ps to these conditions, D adopts a neutral position and does not oppose the foregoing confidentiality measures proposed by Ps.   

10.  This court is not sure whether all the KPMG Documents are confidential and hence the protective measures are warranted.  However, in light of the neutral position of D, as an interim measure, I am agreeable to the imposition of such conditions on the disclosure of the KPMG Documents. Such conditions must be subject to variations either by D upon its application after its examination of these documents or by the trial judge. Lifting of these conditions should also be considered if the consent of KPMG is obtained.

Costs issue

11.  Mr Chan submits that D should be entitled to the costs of and occasioned by the Application on the basis that D has succeeded in obtaining disclosure of almost all of the documents sought and D would not have been able to obtain such disclosure but for the Application.  D also seeks summary assessment of such costs and D’s Statement of Costs has been provided to this court.  

12.  Mr Manzoni refers this court to a letter dated 31 October 2025 sent to Ps by D (“the D’s Letter”)  prior to the issuance of the Summons.  He highlights that the scope of the documents which D sought discovery was far wider than those sought by the Summons.  Ps made a detailed reply and refused to make such discovery by their letter dated 10 November 2025 (“the Ps’ Letter”).

13.  Mr Manzoni highlights that D did not reply to the Ps’ Letter though apparently their objection was accepted as reflected by the curtailment of the scope of discovery by the Summons.  He then submits that D should have responded properly to Ps’ Letter and sought discovery of documents within a reduced scope.  P could have acceded to such a request and made disclosure voluntarily.  Hence, the Application could have been avoided and costs could have been saved.

14.  Mr Manzoni asks this court to bear in mind the underlying objectives in O 1A and the appropriate costs order is costs in the cause.

15.  Whilst this court has a broad discretion as to costs, this court would take into account the matters set out in O. 62, r. 5(1), RHC. Relevant guidelines can also be found in Re Lucky Ford Industrial Ltd [2013] 3 HKLRD 550 at §14 where Harris J said this,

“In my view having regard to O1A r1 the correct approach to determining costs in cases which do not involve the court granting substantive relief is for the Court first to consider the terms of settlement and assess whether the petitioner has obtained substantially what he sought in his petition. If he did it will not be necessary or appropriate for the Court to consider evidence and arguments directed to the merits of the case and whether or not the petitioner would have been successful if the petition had gone to trial. The petitioner will be treated as having been successful and entitled to his costs.”

16.  Further, DHCJ William Wong SC in Perrine Chamonix Limited v Star League Limited and Anor. (unreported, HCA 1139/2017, 13 September 2017)  at §25 said this,

“If, but for a plaintiff’s or an applicant’s application, he or she would not have obtained the relief he or she seeks in a writ of summons or a summons, then he or she is in effect the substantive winner of the case. The fact that a defendant consents to the claims by a plaintiff or an applicant which renders it unnecessary for the plaintiff or the applicant to continue the action or summons should not be a reason for denying the plaintiff or the applicant his or her costs.”

17.  I have perused the D’s Letter and the Ps’ Letter. In the former, D asked for those documents which Ps now agree to disclose. I agree with Mr Chan that in the latter, Ps did not indicate that they agreed to disclose such documents to D. Ps insisted that all of the documents sought by D are irrelevant and not discoverable.

18.  The parties agree that 28 November 2025 was the final day for them to take out interlocutory applications. The Summons was taken out on the very last day.

19.  I agree with Mr Chan that D could not have afforded the time to reason and argue with Ps any further after its receipt of the Ps’ Letter and before they took out the Summons 18 days later. It obviously took time to prepare the Application.

20.  It is also apparent from the Ps’ Letter that they were not easily amenable to persuasion. Ps did not offer any discovery. Nor did they ask D to withhold making an application for specific discovery with their agreement to jointly apply to the court for an extension of time to do so.  

21.  In the circumstances, I do not accept that the Application is avoidable. But for the Application, D could not have had discovery of the documents now agreed to be provided by Ps.

22.  D is effectively the substantive winner of the Application. D should be entitled to costs of and occasioned by the Application.

23.  As to the quantum, I have studied D’s Statement of Costs and Ps’ List of Objections thereto. D asks for HK$633,785 and Ps contends that the appropriate amount should be HK$300,850 after a total deduction of $332,935.

24.  For the purpose of my summary assessment, I shall adopt a broad-brush approach and I shall not embark on a mini-taxation.

25.  I agree with Ps that Mr Chan alone could sufficiently handle the Application and there was no need to involve senior counsel.

26.  For the professional charges of the solicitors, I am of the view that the Application is straightforward and most of the work should have been competently undertaken by the Senior Associate and the Junior Associate assisted by the trainee solicitor. I believe that HK$220,000 should be reasonable to cover their professional service.   

27.  I, therefore, come to the conclusion that a round figure of HK$300,000 should be the amount payable by Ps to D as its costs of and occasioned by the Application.

28.  Lastly, I thank Mr Manzoni and Mr Chan for their helpful assistance.