SHENZHEN FUTAIHONG PRECISION INDUSTRY CO LTD AND ANOTHER v. BYD CO LTD AND OTHERS

HCA 2114/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2114 OF 2007

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J U D G M E N T

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1.  This is an application in which the plaintiff seeks an order preserving evidence.  The plaintiff and the defendants are in litigation both in the PRC and in Hong Kong.  The plaintiff has made a decision that it is going to discontinue the proceedings in the court in Shenzhen, in the PRC.  It is an inevitable consequence of that discontinuance that crucial evidence, presently held by that court, will be within the released by that court. 

2.  The order sought by the plaintiffs is to decide to preserve that evidence for use in the Hong Kong proceedings.  At the same time, the defendants have filed an application to stay the Hong Kong proceedings and they say that would come on before Deputy High Court Judge Gill in about the middle of this year.  The point Mr Mok makes is that if the stay application is successful and the plaintiff has already discontinued its proceedings in the PRC, a great deal of cost in expense would have been wasted.

3.  Mr Mok makes a point that in the PRC, a defendant in his client’s situation cannot recover costs on the discontinuance in the way they can in Hong Kong.  Mr Mok frankly concedes that there will be no prejudice to his clients as a result of an order preserving the evidence.  He says that the prejudice that will arise will be the prejudice suffered as a result of the increased, costs involved should the plaintiff have discontinued in the PRC, the defendants be successful in the stay action in Hong Kong and the PRC proceedings have to be started again.

4.  In my view, this application to preserve evidence must stand on its own, to be judged in the light of the clear decision by the plaintiff to discontinue in the PRC.  That is a decision it is entitled to make and although that may be seen by Mr Mok to be to his clients disadvantage, that is a consequence that the defendants will have to live with.  The tactical circumstances Mr Mok relies on are in my view insufficient to militate against the making of the order.

5.  I am satisfied I have jurisdiction to make the order in the light of the location and Hong Kong base of the defendant companies.  I am satisfied the evidence held by the Shenzhen Court is material evidence. 

6.  I am satisfied that there is a real risk of the destruction of the evidence.  In that respect I rely that on the matter which sets out in paragraph 25 of Mr Poon’s submission. 

7.  It weighs against Mr Mok’s position that his client is unwilling to give an undertaking to preserve the evidence.  That is particularly so in the light of emails which demonstrated at least someone in the defendants’ organisation has it in mind to destroy evidence.  It is also relevant that it appears to be the situation that after the hard disks were copied by the PRC police, documents and information were deleted from a computer in the possession of one of the defendants’ employees.

8.  For these reasons, I am satisfied this is a proper case in which an order sought in terms should be made.  There will be an order accordingly.  I note that the plaintiff offers, and he will be required to give, the undertaking in damages.

9.  If the formulation of the order creates a problem in relation to procedure in the PRC, and if an agreement cannot be reached, come back to the Court.  Leave was reserved to apply accordingly.  Costs of and incidental to the application are in the cause.  There will be a certificate for two counsel.