PACIFIC ELECTRIC WIRE & CABLE CO LTD v. HU HUNG CHIU AND OTHERS

FAMV No. 71 of 2007

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 71 OF 2007 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM CACV NO. 369 OF 2006)

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DETERMINATION

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Mr Justice Ribeiro PJ:

1.  The respondent is a Taiwanese corporation which was until 2004 listed on the Taiwan stock exchange.  The 1^st applicant, Hu Hung Chiu, held senior positions in its management, including the post of chief financial officer.  The 2^nd applicant, Hu Sun Mar Li, is his wife.  They are both Taiwan residents.

2.  The respondent’s case is that very large sums were fraudulently extracted from its coffers with Mr Hu’s involvement.  It alleges that some of these funds were used to purchase substantial assets in Hong Kong consisting of a large parcel of listed shares and certain landed properties.  It seeks to recover those assets as well as any rentals and sale proceeds possibly derived from them and contends that the applicants are liable as constructive trustees.

3.  Three High Court actions were commenced in Hong Kong against a number of defendants, including the companies holding the assets in question.  On 19 May 2005, Master Ho gave the respondent leave to serve the applicants in Taiwan, making them parties to the extant actions. 

4.  However, on 29 September 2006, Mr Recorder Anthony Chan SC set aside the orders granting leave on the grounds that (i) there had been material non-disclosure of the fact that proceedings seeking overlapping relief had been commenced as civil proceedings ancillary to criminal proceedings instituted against Mr Hu in Taiwan; (ii) that there was no serious question to be tried as against Mrs Hu; (iii) that the evidence was deficient; (iv) and that service was defective and contrary to Taiwan law.  He rejected as illusory an undertaking offered by the respondent not to prosecute the ancillary civil proceedings in relation to the Hong Kong assets while the Hong Kong proceedings were afoot.   The Recorder also rejected the respondent’s fresh application for leave to serve the applicants in Taiwan both on the grounds of forum non conveniens and as a response to what he saw as a serious case of non-disclosure.

5.  In the Court of Appeal, the respondent accepted that there had been a material non-disclosure.  The issue was whether the respondent should be given leave afresh.  The Court of Appeal decided in favour of giving leave, reversing the Recorder on this point.  It took the view that the evidence was sufficient, showing that the applicants were necessary or proper parties to the actions properly commenced in Hong Kong to recover assets situated here; that the presence of those assets made this the forum conveniens; that there clearly was a triable issue against Mrs Hu as a director of a company indirectly holding assets said to be the traceable proceeds of funds allegedly stolen from the respondent; and that questions regarding service in Taiwan were academic, since such service had already been set aside.

6.  The applicants now seek leave to appeal with a view to making the same arguments they had advanced in the Court of Appeal.  It is said that questions of great general or public importance arise, namely: as to the proper approach to fresh applications for leave after the ex parte order has been set aside for non-disclosure; as to the adequacy of the undertaking offered by the respondent; as to the correctness of the Court of Appeal’s decision to interfere with the Recorder’s views on the forum conveniens; as to the triability of the issue against Mrs Hu; and as to the validity of service effected in Taiwan.

7.  The orders sought to be appealed from are interlocutory orders and, as the Appeal Committee held in CSAV Group (Hong Kong) Limited (formerly Norasia Services (HKG) Ltd) v Jamhed Safdar (FAMV 52 of 2007, 5 November 2007):

“Interlocutory appeals to the final court on procedural issues such as discovery are – as they should be – rare and exceptional.  Leave to bring such an appeal will generally be refused unless it can clearly be seen that (i) the proposed appeal genuinely raises a question of law of great general or public importance; (ii) the result of the appeal would indeed turn on how that question is answered; and (iii) such result is likely to make a significant contribution to the just disposal of the litigation.” (per Bokhary PJ)

8.  In our view, this application falls far short of meeting such requirements.  The questions identified by the applicants seek to challenge the view taken by the Court of Appeal on discretionary and fact-specific matters in granting leave to serve outside the jurisdiction on a fresh application.  They give rise to no questions of law of great general or public importance and no other basis exists for the grant of leave.  The application is refused with costs.