GOLIATH FAR EAST LTD v. TENG FEI RUN TRADE LTD

HCA 1397/2019

[2019] HKCFI 1959

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1397 OF 2019

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REASONS FOR DECISION

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1.  In the afternoon of 1 August 2019, I heard on an ex parte basis an application for a Mareva injunction as well as a disclosure order against a bank. I allowed the former whereas I refused the latter.

2.  Today is the hearing of the inter partes continuation of the injunction which I have continued.

3.  I now give brief reasons explaining my refusal to grant the disclosure on 1 August 2019.

4.  The plaintiff (“P”) claims it is the victim of an email fraud.  The last payment it made as a result to this alleged fraud was on 29 July 2019.

5.  On the basis of the evidence before me I had little difficulty in granting P the injunctive relief sought.

6.  P also sought a disclosure order against the bank relying on section 21 of the Evidence Ordinance (Cap 8) (“the Ordinance”).

7.  The bank was not given notice of P’s application seeking for a disclosure order.

8.  Section 21 provides that:

“ Court or judge may direct copies of entries in banker’s record to be taken

(1) On the application of any party to any proceedings, the court or a judge may order that such party be at liberty to inspect and take copies of any entries in a banker’s record for any of the purposes of such proceedings.

(2) An order under this section may be made either with or without summoning the bank or any other party, and shall be served on the bank 3 clear days before the same is to be obeyed, unless the court or judge otherwise directs.

(3) The costs of any application to the court or judge under or forthe purposes of this section, and the costs of anything done orto be done under an order of the court or judge made under or for the purposes of this section, shall be in the discretion of the court or judge, who may order the same or any part thereofto be paid to any party by the bank, where the same have been occasioned by default or delay on the part of the bank.

(4)   Any such order against a bank may be enforced as if the bank were a party to the proceeding.”

9.  Section 21(2) provides that the Court is empowered to make an order against a bank “with or without summoning it”.

10.  Section 21(4) makes it clear that such an order may be enforced as if the bank were a party to the proceedings.

11.  In either case the Order shall be served on the bank at least three clear days before the same is to be obeyed unless the Court otherwise directs.

12.  It is the position that therefore, there is no need to join a bank as such.

13.  There is clear jurisdiction to make an order against a non-party bank under the Ordinance.

14.  The question here is to identify in what circumstances is it appropriate to make such an order without giving notice to a bank.

15.  In Asiya Asset Management (Cayman) Ltd v Dipper Trading Co Ltd [2019] 3 HKC 145 in the context of the Norwich Pharmacaljurisdiction, I held that although the Court had jurisdiction to make an order without notice to the innocent third party, as a matter of discretion the Court would ordinarily only exercise its discretion in such cases where it is either not possible to give notice or where to do so would frustrate the purpose of the order.

16.  This is not the case here.

17.  In some cases the matter should be dealt with on an inter partes basis, or at the very least by giving a few hours’ notice.

18.  If the reason for not giving the bank notice is the worry that it would notify third parties or the alleged fraudster, then the proper way to proceed would be to (1) first seek an ex parte without notice gagging order against the bank; (2) seek disclosure against the bank either on an inter partes basis or at the very least ex parte with notice.  This would thus ensure that the provision of notice would not result in third parties being alerted.

19.  Inconvenience and added costs by themselves plainly do not justify seeking disclosure on a without notice basis against third parties. This offends basic notions of fairness including the right to be heard.

20.  On 1 August 2019 I thus invited the Plaintiff’s legal advisers to consider making a further disclosure application the following day in the mid morning after giving notice to the bank which they did. On 2 August 2019 I therefore made the disclosure order against the bank after notice had been given.