MAYER CORPORATION DEVELOPMENT INTERNATIONAL LTD v. ALLIANCE FINANCIAL INTELLIGENCE LTD AND OTHERS

CACV 66/2017

[2019] HKCA 1122

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 66 OF 2017

(ON APPEAL FROM HCCL NO 2 OF 2016)

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J U D G M E N T

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Hon Kwan VP (giving the Judgment of the Court):

1.  On 12 July 2019, we handed down our judgment (“the CA judgment”) allowing the appeal of the plaintiff, Mayer Corporation Development International Limited, (“Mayer”) against the decision of Mimmie Chan J on 7 February 2017, in which she ordered the plaintiff’s claim against the 4^th and 5^th defendants, Bumper East Limited and Aspial Investment Limited (“B&A”), to be struck out for disclosing no reasonable cause of action and as an abuse of process.

2.  B&A filed a notice of motion on 8 August 2019 seeking leave to appeal to the Court of Final Appeal.

3.  We will adopt the expressions and terms in the CA judgment.  The relevant background matters have been fully set out in the CA judgment at §§3 to 35 and will not be repeated here.

4.  The intended appeal of B&A seeks to challenge the holdings in all four issues raised before us^[1], namely, the adoption of fraud issue, the reasonable diligence requirement issue, the new evidence issue and the materiality issue.

5.  The questions said to be of great general or public importance in the notice of motion are as follows:

(1)  Is the legal position as to whether one party to proceedings had “adopted” the fraudulent evidence of another party in the same proceedings plain and obvious?

(2)  What principles of law should be applied, where proceedings are commenced to set aside an earlier judgment on the ground that it has been obtained by fraud, in determining whether the evidence given by one party at the earlier trial was “adopted” by another party to the same proceedings?

(3)  Is there a requirement on a party who seeks to set aside an earlier judgment on grounds that it was obtained by fraud to show that the new evidence relied on could not have been produced with reasonable diligence before the trial of the earlier action?

(4)  Is it inappropriate for the Court in striking out proceedings to decide whether a party seeking to set aside an earlier judgment on grounds that it was obtained by fraud must show that the new evidence relied on could not have been produced with reasonable diligence before the trial of the earlier action when fraud was raised and determined in the earlier action?

6.  B&A also invoke the “or otherwise” limb, contending that if the plaintiff is allowed to bring the present action, this raises the issue whether it is consistent with the principle of finality in litigation and the underlying objectives of the Civil Procedure Rules.

Questions (1) and (2)

7.  These questions address the holding on the adoption of fraud issue in the CA judgment at §§48 to 61.

8.  For the reasons set out in the CA judgment, we do not think it is reasonably arguable to contend that the legal position as to whether one party to proceedings had “adopted” the fraudulent evidence of another is plain and obvious.  It is not appropriate for the judge to strike out the present action on this basis.

9.  We decline to give leave to appeal on question (1) as it is not reasonably arguable.  It is inappropriate to give leave to appeal on question (2) as this question should be determined in the trial of the present action and not in an application to strike out the action.

Question (3)

10.  It is common ground that this question is of great general or public importance.  We agree with Mayer that it is premature and inappropriate for this question to be placed before the Court of Final Appeal for determination before findings of fact are made at the trial of the present action.

11.  B&A seek to draw a distinction between the present case and Takhar v Gracefield [2019] UKSC 13 in that unlike the English decision, fraud was raised and was determined in the earlier judgments of the B&A Actions.  Where fraud was raised at the original trial, factual findings are required to be made to determine whether Mayer could fall within the qualifications in the leading speeches of Takhar, such aswhether a deliberate decision was taken not to investigate or rely on materials later sought to be adduced to set aside the original judgment (Lord Sumption at §66, obiter), or the fact-sensitive evaluative approach of Lord Briggs who was in the minority (at §§68 and 86).

12.  B&A seek to challenge the holding in the CA judgment^[2] that the available evidence is insufficient to support a finding that Mayer had made a deliberate decision not to rely on handwriting expert evidence at the trial before Reyes J to counter the allegation that Ku’s signature in the 2^nd SCA was a forgery.  Contrary to B&A’s contention, we do not think factual findings on this can be made without a proper investigation at the trial.

13.  In any event, this question is not suitable for determination in a striking out application.

14.  We decline to give leave to appeal on question (3).

Question (4)

15.  Question (4) seems to us to be fact-sensitive, if it is sought to be argued that the fact that the issue of reasonable diligence arose in a striking out application does not make it inappropriate for the court to determine whether the reasonable diligence requirement was met.

16.  If this question seeks to address the holding in the CA judgment that the handwriting expert evidence was new and material evidence, as appeared from the first submission of Mr Litton^[3], this raises factual issues on which there is no dispute as to the legal principles to be applied^[4]. We agree with Mayer this does not give rise to any question of great general or public importance.

“Or otherwise” limb

17.  We do not propose to deal with the submissions of B&A, as it is the usual practice of the Court of Appeal to leave consideration of the “or otherwise” limb to the Appeal Committee of the Court of Final Appeal.

Conclusion and costs

18.  We decline to give leave to appeal to the Court of Final Appeal. Costs of the application should follow the event.

19.  Having considered the statement of costs of Mayer for summary assessment, we order B&A to pay the costs of Mayer of this application, assessed summarily at $45,009.