XCHRX GIANT ELECTRONICS LTD. v. IN-TECH ELECTRONICS LTD. AND OTHERS

HCA 15823/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 15823 OF 1999

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REASONS FOR DECISION

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1. On 22 December 1999 I handed down judgment in this matter and made two orders, the first, on the application of the defendants, discharging the Anton Piller order made by Mr Justice Suffiad on 5 October 1999, and the second, on an application by the plaintiff, an order for delivery up of a number of documents found in the possession of the defendants in the course of execution of the Anton Piller. At the same time I made an order nisi for costs in favour of the defendants on their application, and in favour of the plaintiff on theirs, to be taxed on a party and party basis.

2. The parties appeared before me on 7 March 2000 for further argument on the question of costs when I varied the order to the extent that the defendants' costs were to be taxed on the indemnity basis with a certificate for two counsel and to be taxed and paid forthwith, and the plaintiff's costs, also with a certificate for two counsel, were in any event. I now give my reasons for so doing.

The defendants' application

3. This was to set aside the Anton Piller order on the grounds of material non-disclosure and abuse of process. In my decision, I found that there had been material non-disclosure in two particular areas, and one questionable area where further information might have shed a different light on the matter. The nature of the non-disclosure was more failure to make enquiries and discover information which would have been highly relevant than deliberately concealing facts which were known. I found that the plaintiff's principal witness had at her disposal the means to make such enquiries, but failed to do so, acting possibly hastily and over zealously on suspicion alone. This I considered was sufficient material non-disclosure to justify discharge of the order. However, it would not on its own be so culpable as to justify any order for costs other than on the usual party and party basis.

4. The other matter which put the whole matter in a totally different light was the manner of execution. Apart from a larger than usual number of members of the plaintiff company attending the execution, with the obvious danger of a competitor acquiring knowledge which may be of commercial use to them, which I found in itself not an abuse provided that the execution was scrupulously conducted, there was what I considered to be a deliberate attempt to take advantage of the opportunity given by the execution to take and keep notes on commercially sensitive matters which were not a subject of the execution. This, in my view, took the case out of the area of an order which ought to be discharged for non-disclosure without mala fides, into that of one where a valuable but powerful weapon, granted grudgingly and on strict terms by the courts, was misused.

5. Such behaviour must be discouraged, and the disapproval of the court must be shown, by an appropriate order for costs, which in this case I consider to be indemnity costs to be taxed and paid forthwith.

The plaintiff's application

6. The plaintiff's application was for delivery up of a number of documents many of which were admitted by the defendants to be the property of the plaintiff. I could see no reason why the plaintiff should not have an order restoring their property to them, and my findings as to the manner of execution does not affect the fact that it did show that some documents had been removed by the defendants, whether innocently or not, and they had no right to retain them. That being so, the plaintiff was entitled to the order, with costs on the usual basis in any event, and in respect of both applications a certificate that the participation of two counsel was justified.