THE LIQUIDATOR OF WING FAI CONSTRUCTION CO LTD (IN LIQUIDATION) v. YIP KWONG ROBERT AND OTHERS

HCCW 735/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 735 OF 2002

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R E A S O N S   F O R   D E C I S I O N

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1. On 5 October 2016 the 2^nd respondent obtained from a Master two writs of subpoena ad testificandum directed to Mr Camille Jojo of Norton Rose Fulbright Hong Kong and Mr Thomas Fyfe of Summons & Simmons respectively, requiring them to testify at the trial of these proceedings. On 13 October, the first day of trial, Ms Chan SC who appeared for the Applicant (“the Liquidator”) objected to the admission of any evidence from the two solicitors. On 14 October, at the end of the opening, having heard arguments, I ruled that the proposed evidence should not be admitted and I set aside the subpoenas accordingly, for reasons to be handed down. These are my reasons.

2. The evidence sought to be adduced is in substance the witness statements and the transcript of the oral evidence of the two solicitors given in May 2012 in the context of an application by the 2^nd respondent herein (being one of the defendants to the criminal charges) to stay the criminal proceedings in DCCC 153/2010.  The gist of Mr Jojo’s evidence was that Mr Hill, the Liquidator, had in negotiations in October 2008 suggested that if the respondents were able to settle the civil claim by paying over $35 million, the Liquidator would be in a position to confirm with the Department of Justice that restitution had been paid and that the Liquidator had no further interest in pursuing the criminal complaint.  The gist of Mr Fyfe’s evidence was that the Liquidator’s solicitor Mr Bowers had, in February and March 2010, informed him in negotiations that the Liquidator was looking for a global settlement sum of $38 million and that Mr Hill could stay out of the jurisdiction, and hence out of reach of a subpoena, if a global settlement could be reached.

3. I should say at once that neither Mr Hill nor Mr Bowers was a party to or a witness in those criminal proceedings and had not had an opportunity of openly responding to or refuting the allegations made against them.

4. Given the timing of the subpoenas the question that immediately arose was: why were these attempts to adduce the evidence made at the eleventh hour?  Mr Barlow SC, for the 2^nd respondent, submitted that the materials in question were “unused materials” provided by the prosecution to the 2^nd respondent and, as such, subject to (or at least believed to be subject to) an implied undertaking by the 2^nd respondent not to use them for any purpose other than the criminal proceedings.  It was said that the 2^nd respondent was not released from the implied undertaking until August 2016.

5. I do not accept that explanation.  The materials were, as I understand the position, used in open court in the stay application and in the judicial review proceedings arising therefrom.  As the Court of Appeal held in Allied Group Ltd v Secretary for Justice (unrep, CACV 1/2003, 10 October 2003), the implied undertaking does not prevent the use of material which has become freely available by reason of having been referred to in open court and in judgments.  Furthermore, the transcript surely was not part of the “unused materials”.  It has not been shown on what basis the transcript of the hearing of the stay application could be said to be subject to an implied undertaking.

6. In any event, there is no property in a witness.  I cannot see what there was to preclude the 2^nd respondent from obtaining a statement from Mr Jojo and Mr Fyfe for use in these civil proceedings if it was felt that their evidence was relevant.  Both of them were solicitors who had acted for the 2^nd respondent.  In fact, Mr Fyfe was the solicitor in Messrs Simmons & Simmons handling these civil proceedings on behalf of the 2^nd respondent up to 2015. The witness statements in this case were exchanged in June 2014 when Mr Fyfe was acting for the 2^nd respondent.

7. To be fair, Mr Barlow did not submit that Mr Jojo and Mr Fyfe had refused to provide a statement voluntarily.  In fact he said that, for all he knew, they might be willing to testify, but the 2^nd respondent’s team thought that they would prefer to be subpoenaed.  It follows however that there is no good explanation why their evidence is being sought to be adduced at such a late stage, well past the deadline set by the unless order for exchange, or why no earlier notice or statement of the nature or gist of the evidence had been given to the Liquidator (even at the pre-trial review or in the 2^nd respondent’s opening submissions for trial).

8. In addition, I consider that the proposed evidence lacks relevance.  Mr Barlow submitted that it was relevant in two ways: first, to show that the Liquidator had been involved in impropriety in a case where equitable remedies for restitution are being sought.  Nothing however has been pleaded in this regard whether as an allegation of unclean hands or otherwise.  Secondly, he submitted that it was relevant to whether Mr Hill who had no relevant personal knowledge could give any evidence that was reliable.  This means that the point goes merely to credit, and then only with respect to a witness who, on Mr Barlow’s submission, has little relevant personal knowledge anyway regarding the matters in issue.  I do not think that this justifies admitting the proposed evidence.

9.  Ms Chan had also argued that the proposed evidence was protected by without prejudice privilege, given that the conversations, assuming they did take place as alleged, occurred in negotiations for a compromise of the proceedings.  Mr Barlow argued that the evidence would disclose unambiguous impropriety in that the Liquidator effectively offered to sabotage the prosecution in return for a settlement of the civil proceedings, and as such fell within the exception to the privilege: see Libertarian Investments Ltd v Hall (2013) 16 HKCFAR 681 at §§31-33; Crane World Asia Pte Ltd v Hontrade Engineering Ltd [2016] 3 HKLRD 640.  I did not find it necessary to rely on the privilege point to exclude the evidence and it is unnecessary for me to express any view on this matter.