上海諾港科學集團有限公司 (formerly known as 上海諾港科技有限公司) v. WORLD LAUREATES MANAGEMENT LTD (formerly known as WORLD LAUREATES ASSOCIATION LTD)

HCMP 1544/2023

[2024] HKCFI 1540

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1544 OF 2023

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BETWEEN

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DECISION

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Introduction

1.  By originating summons filed on 14 September 2023 (the “Originating Summons”), the plaintiff (“P”) applies for pre-action discovery against the defendant (“D”). In the Originating Summons, section 41 of the High Court Ordinance (Cap 4) and Order 24 rule 7A of the Rules of the High Court (Cap 4A) are relied upon.

2.  P seeks disclosure of the following (the “Requested Documents”):

(1) all entries and records relating to the bank account maintained by D with the account number 789-350501-883 with Hang Seng Bank Limited (“D’s HSB Account”) and the bank account maintained by D with the account number 012-875-2-040478-9 with Bank of China (Hong Kong) Limited (“D’s BOC Account”) in the period between 6 September 2019 and the date of the Order to be made relating to:

(a) Payments into and out of the accounts;

(b) the source and destination of all payments into and out of the accounts;

(c) the person or persons giving instructions for all transactions of the accounts;

(d) the opening of the accounts and the mandates

within the possession, custody or power of D, and such entries and records are to include, in particular:

(i) bank account statements;

(ii) correspondence;

(iii) deposit, withdrawal, and remittance advices; and

(iv) cheques;

(2) all entries and records relating to any other bank account(s) held by D or Wang Hou (“Wang”), D’s sole director, in Hong Kong or elsewhere insofar as they relate to the transactions of payment in and payment out in relation to the sponsorship received by D under the “合作協議書” on or about 6 September 2019 (the “Sponsorship Agreement”) and a “補充協議” on or about 11 November 2020 (the “Supplemental Sponsorship Agreement”, and together the “Sponsorship Agreements”) both entered into between D and Sequoia Capital China Advisors (Hong Kong) Limited (紅杉中國投資管理（香港）有限公司) (“Sequoia Capital”) (formerly known as 紅杉資本投資管理（香港）有限公司), within the possession, custody or power of D, and such entries and records to include, in particular:

(i) bank account statements;

(ii) correspondence;

(iii) deposit, withdrawal and remittance advices; and

(iv) cheques; and

(3) D’s books and records, including all entries in the journals and accounts, vouchers, invoices, receipts bills, or other transaction records insofar as they relate to the transactions of payment in and payment out in relation to the sponsorship received by D under the Sponsorship Agreements.

Background Facts

2.  The background facts as summarised by Mr William Wong S.C. and Ms Ebony Ling, counsel for P, and the basis for the application are as follows:

(1) P is a limited company incorporated in the Mainland China which was set up and has operated as the project company for the organisation of the World Laureates Forum (the “Forum”), which is a major science forum held annually in Shanghai and participated by Nobel Prize laureates and other renowned international scientists since 2018.

(2) From 6 May 2021 to date, P’s shares are held:

(i) 80% by 世界頂尖科學家(上海)科技有限公司 (“Shanghai WLA”); and

(ii) 20% by 華夏幸福（深圳）運營管理有限公司 (“China Fortune”).

(3) P acts as the financial nerve centre of the Forum in that it receives all incomes and pays all expenditures of the Forum. It is also the only decision-making body who is responsible for the planning and organizing the Forum. The income of the Forum mainly comes from sponsorships for exposure at the Forum. P is the only entity procuring sponsorship, marketing and publicity of the Forum. With the exception of the Sponsorship Agreements, all sponsors of the Forum entered into sponsorship agreements directly with P and made sponsorship payments to P directly.

(4) Wang was the Chairman of the Board, the General Manager and Legal Representative of P from the incorporation of P until 17 February 2022. He also indirectly held the majority of P’s shares through different corporate vehicles ultimately controlled by him, including inter alia Shanghai WLA.

(5) D is a private limited company incorporated in Hong Kong on 25 May 2018. D has been using “World Laureates Association (世界頂尖科學家協會)” as its business name. Wang is the sole director and ultimately sole shareholder of D until he transferred all of his shareholding to a Cayman Island corporate vehicle controlled by him.

(6) P’s case is that despite the similarity in the name of D with the Forum, D had and has no role to play in the Forum. D was used by Wang to receive and dissipate funds relating to the Forum with a name deliberately chosen to portray a false image that it is somehow related to the Forum.

(7) On 17 February 2022, due to a change in the corporate structure of Shanghai WLA, which is effected by a sale of the majority stake in Shanghai WLA by Wang, the senior management and P’s Board underwent a substantial change of personnel (the “Change of Management”) including inter alia, Wang having been removed as the Chairman of the Board, the General Manager and the Legal Representative of P; and instead became the Vice Chairman of the Board of P.

(8) Wang had since the Change of Management ceased to have control over P but remained as one of the five directors of P’s Board.

(9) After the Change of Management, P’s newly appointed senior management discovered that:

(i) D had entered into a “合作協議書” on around 6 September 2019 (i.e. the Sponsorship Agreement) and a “補充協議” on around 11 November 2020 (i.e. the Supplemental Sponsorship Agreement) with Sequoia Capital. Both agreements were signed by Wang on behalf of D; and

(ii) there are certain purported service agreements and consultancy agreement between P and D (the “Purported Service Agreements”), pursuant to which P had paid a total of US$13.9 million to D between October 2018 to November 2021. P argues that the Purported Service Agreements seemed to be self-dealing transactions entered into by Wang representing both P and D before the Change of Management, but such disputes are within the jurisdiction of Mainland courts.

(10) Pursuant to the Sponsorship Agreements between Sequoia Capital and D, Sequoia Capital agreed to sponsor the Forum in consideration of various advertising rights, naming rights and other publicity privileges during the Forum held in 2019, 2020 and 2021. Such sponsorship funds were however paid to D’s HSB Account or D’s BOC Account:

(i) RMB 5.5M as the first instalment for 2019 Forum (the “1^st Sequioa Payment”);

(ii) RMB 4.5M as the second instalment for the 2019 Forum (the “2^nd Sequioa Payment”);

(iii) RMB 8M for the 2020 Forum (the “3^rd Sequioa Payment”);

(iv) RMB 10M for the 2021 Forum (the “4^th Sequioa Payment”, and together the “Sequioa Payments”);

(11) Certain inward remittance notices discovered by P suggest that D has received at least three of the Sequoia Payments (the 2^nd, 3^rd and 4^th Sequoia Payments). D does not dispute that the Sequioa Payments were received by D whilst all other sponsorships were received by P.

(12) All obligations and expenses under the Sponsorship Agreements, i.e. various advertising rights, naming rights and other publicity privileges, were performed, and provided to Sequoia Capital, by P. As such, D received all the Sequioa Payments whilst P performed the obligations and incurred expenses.

(13) D, Wang and Wang’s wife have failed to disclose any documents relating to the Sequioa Payments to P.

3.  P therefore took out the present application to seek discovery of documents which are directly relevant to P’s intended claim, against D, Wang and other related parties.

Legal principles

4.  Mr Wong and Mr Christopher Chain S.C., counsel for D, agree on the applicable principles for pre-action discovery as follows.

5.  The relevant statutory provisions are contained in section 41 of the High Court Ordinance (Cap 4) and Order 24 rules 7A and 8 of the Rules of the High Court (Cap 4A).

6.  Section 41 of the High Court Ordinance provides as follows:

“(1) On the application, in accordance with rules of court, of a person who appears to the Court of First Instance to be likely to be a party to subsequent proceedings in that Court in which a claim is likely to be made, the Court of First Instance shall, in such circumstances as may be specified in the rules, have power to order a person who appears to the Court of First Instance to be likely to be a party to the proceedings and to be likely to have or to have had in his possession, custody or power any documents which are directly relevant to an issue arising or likely to arise out of that claim—

(a) to disclose whether those documents are in his possession, custody or power; and

(b) to produce such of those documents as are in his possession, custody or power to the applicant or, on such conditions as may be specified in the order—

(i) to the applicant’s legal advisers;

(ii) to the applicant’s legal advisers and any medical or other professional adviser of the applicant; or

(iii) if the applicant has no legal adviser, to any medical or other professional adviser of the applicant.

(2) For the purposes of subsection (1), a document is only to be regarded as directly relevant to an issue arising or likely to arise out of a claim in the anticipated proceedings if—

(a) the document would be likely to be relied on in evidence by any party in the proceedings; or

(b) the document supports or adversely affects any party’s case.”

7.  Order 24 rule 7A of the Rules of the High Court provides as follows:

“(1) An application for an order under section 41 of the Ordinance for the disclosure of documents before the commencement of proceedings shall be made by originating summons (in Form No. 10 in Appendix A) and the person against whom the order is sought shall be made defendant to the summons.

…

(3) A summons under paragraph (1) or (2) shall be supported by an affidavit which must—

(a) in the case of a summons under paragraph (1), state the grounds on which it is alleged that the applicant and the person against whom the order is sought are likely to be parties to subsequent proceedings in the Court of First Instance;

(b) in any case, specify or describe the documents in respect of which the order is sought and show, if practicable by reference to any pleading served or intended to be served in the proceedings, that the documents are relevant to an issue arising or likely to arise in the proceedings and that the person against whom the order is sought is likely to have or have had them in his possession, custody or power.

(3A) In the case of a summons under paragraph (1), paragraph (3)(b) shall be construed as if for the word “relevant”, there were substituted the words “directly relevant (within the meaning of section 41 of the Ordinance)”.

…”

8.  Lastly, Order 24 rule 8(2) of the Rules of the High Court provides:

“No order for the disclosure of documents shall be made under section 41 or 42 of the Ordinance, unless the Court is of opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs.”

9.  The principles governing pre-action discovery are set out and explained by Zervos J (as he then was) in VTB Debt Centre LLC v Top Fuel Corporation Ltd HCMP 1543/2013, 16 April 2014 and by G Lam J (as he then was) in Zhang Shouen & Anor v Standard Chartered Bank (Hong Kong) Ltd HCMP 682/2015, 15 October 2015.

10.  There are five requirements:

(1) The applicant appears to be likely to be a party to subsequent proceedings in the court in which a claim is likely to be made. In order to satisfy the requirement that a claim is likely to be made, the applicant must show that a claim “may” or “may well” be made if discovery is granted.

(2) The respondent appears likely to be a party to such proceedings.

(3) The respondent appears likely to have or to have had in his possession, custody or power the document requested.

(4) The requested document is “directly relevant” to an issue arising or likely to arise out of that claim. “Direct relevance” is shown only if:

(i) the document would be likely to be relied on in evidence by any party in the proceedings; or

(ii) the document supports or adversely affects any party’s case.

(5) The applicant must satisfy the court that the order for pre-action discovery is necessary either for disposing fairly of the cause or matter or for saving costs.

11.  The first four requirements are jurisdictional conditions. Unless they are satisfied, the jurisdiction to order pre-action discovery does not arise. If they are satisfied, the court has a discretion to order pre-action discovery of the document in question. The fifth requirement means that the court will not exercise its discretion to make an order unless discovery is necessary either for disposing fairly of the cause or matter or for saving costs[1].

12.  In order to take advantage of the section, the applicant must disclose the nature of the claim he intends to make and show not only the intention of making it but also that there is a reasonable basis for making it. Ill-founded, irresponsible and speculative allegations based merely on hope would not provide a reasonable basis for an intended claim in subsequent proceedings. The burden of persuasion rests with the applicant. He needs to show a potentially meritorious claim which comes within the section[2].

13.  The court must be clear what the issues in the litigation are likely to be. This involves knowing the nature of the intended claim, the constituent elements of the cause of action, the allegations being made by the intended plaintiff, and the issues that are likely to arise. This requires the applicant to supply meaningful details of the intended claim, so that the potential defendant can properly respond to the application and evidence and so that the court can see from the combined evidence of the parties the likely issues and assess, by reference to the issues, the direct relevance, if any, of the documents sought[3].

14.  Pre-action discovery is not intended to be simple general discovery or specific discovery taking place before commencement of an action. It is not intended to extend to “background” documents or documents simply leading to a possible “train of inquiry”[4].

15.  In pre-action discovery, the onus is on the applicant to show that the order is necessary either for disposing fairly of the cause or matter or for saving costs^[5]. It is incumbent for an applicant to show that discovery of the document before commencement of the action is necessary. The pre-action discovery regime is intended to strike: “a reasonable balance between the need to protect against harassment and fishing applications on the one hand and the need to enable a potentially meritorious plaintiff to bring a claim which could not effectively otherwise be brought.”^[6].

16.  An allegation that costs can be saved by avoiding the need for amendment of pleadings is unlikely to be a sufficient reason to render disclosure of the relevant documents “necessary”, if a plaintiff already has sufficient information to plead a prima facie case^[7].

Discussion

Requirements 1 & 2: The applicant appears to be likely to be a party to subsequent proceedings in the court in which a claim is likely to be made

17.  In his written submissions, Mr Wong submitted that given the cause of action based on unlawful interception and/or misappropriation by D of the Sequoia Payments belonging to P, a proprietary claim will likely be made by P against D, and P and D are both likely parties in the claim. However, it became apparent at the hearing that Mr Wong’s focus was not so much on a claim against D, but more on the intended claims against further potential defendants who were the recipients of any transfers from D based on tracing.

18.  On behalf of D, Mr Chain submitted that there was no reasonable basis for P’s intended claims against D:

(1) D clearly played a role in the Forum, as supported by the 2020 and 2021 Audit Reports of the Forum, which shows that P had signed contracts with D to arrange for the participation of foreign experts in the 2020 Forum.

(2) D was responsible for making payments to overseas scientists for the Forum. Due to cross-border foreign exchange controls in the Mainland, payments were more conveniently made to overseas entities from D’s accounts in Hong Kong. It is said that the Sequoia Payments had been paid out to overseas scientists and institutions from 2018 – 2022.

19.  In response to such explanation, Mr Wong submitted that they do not constitute a valid defence as the expenditures in the total amount of around US$2.89M were incurred prior to the receipt of the first instalment of Sequoia Payments in 2019. There are also insufficient payment details to substantiate D’s allegation that it had paid out the entirety of the receipts to scientists overseas. Wang also admitted in his affirmation that payments made in a particular year may not be for the Forum in that particular year.

20.  In my view, short of D successfully demonstrating the intended claim lacks reasonable basis and is ill-founded, irresponsible or speculative, there is no need, and indeed it would be inappropriate, for the court to resolve at this stage whether D’s explanation provides a complete defence to P’s allegations. So long as there is a reasonable prospect that a claim may well be made, this jurisdictional requirement is satisfied.

21.  I am of the view that based on the following, there is a reasonable prospect that a claim may well be made by P against D, and that such a claim cannot be said to be “ill-founded, irresponsible and speculative allegations based merely on hope”^[8]:

(1) There is no dispute that P is the organiser, operator and executive unit of the Forum. The Sequoia Payments are made in RMB. There is at the moment, no overwhelmingly convincing reason why the Sequoia Payments ought to be paid directly into D’s BOC Account.

(2) The Sequoia Payments had been received by D, yet P had carried out the obligations of the Sponsorship Agreements.

(3) Despite D’s attempt to justify the receipt of the Sequoia Payments by alleging that it had all along been responsible for incurring expenditures on behalf of the Forum and the Sequoia Payments had been used to defray such expenses, at this stage it cannot be concluded one way or the other whether forensically the amount received by D throughout equals the alleged expenditure D incurred for and on behalf of P.

(4) Other than the Sequoia Payments, no other payment for sponsorship had been paid to D. D tried to justify this by saying that as Sequoia Capital was a Hong Kong entity, it preferred to pay D, which is also a Hong Kong company. However, Sequoia Capital had actually separately entered into another co-operation agreement with P in December 2022 whereby RMB 8 million had been paid directly to P without any issue. There is thus no merit in the justification as evidence presently stands.

22.  I am of the view that Requirements 1 and 2 have been satisfied.

Requirement 3: D likely to have the Requested Documents in his possession

23.  D does not seem to dispute it has possession of the records relating to the bank account maintained by D. However, D objects to the suggestion that D has in its possession “records relating to any bank account(s) held by … Wang”. Mr Chain submitted that D, as a separate legal entity, cannot be said to be likely to have documents relating to Wang’s bank account in its possession.

24.  At the hearing, Mr Wong clarified that P is only seeking “all entries and records relating to any other bank account(s) of Wang held by the Defendant”. Paragraph (2) under the Schedule to the Originating Summons is to be amended accordingly.

25.  Mr Wong submitted that as the Sequoia Payments were received by D and as Wang is the ultimate sole shareholder of D, Wang is potentially a receiving party. This is supported by the fact that in the Audited Accounts of D, there are clearly funds being paid by D to Wang. If Wang had received the Sequoia Payments from D, D, as the paying party, would have in its possession records of such transactions.

26.  Mr Chain does not seem to object that if there were such payments, D would be in possession of records showing such payments being paid to accounts held by Wang. Thus, insofar as Requirement 3 is concerned, there is no further objection to the fact that D is likely to have the Requested Documents in its possession.

27.  I am of the view that Requirement 3 is satisfied.

Requirement 4: Requested Documents are “directly relevant”

28.  A document is “directly relevant” if it would be likely to be relied on in evidence by any party in the proceedings, or if it supports or adversely affects any party’s case. When considering this requirement, Mr Chain’s complaint that certain document requests are too wide is considered at the same time under this requirement – if the document is directly relevant, it will certainly not be too wide.

Payments Into the Accounts

29.  As P’s case primarily rests on diversion of the Sequoia Payments to D, documents in relation to the Sequoia Payments made into any of D’s account would clearly be directly relevant.

30.  P already has in its possession the remittance forms showing that 3 out of 4 of the Sequoia Payments were paid into D’s BOC Account. As for the 1^st Sequoia Payment, Wang already confirmed on oath (without disclosing any bank statements or documents in support) that it was also paid into D’s BOC Account. Although D has not provided any bank statement in support, there is nothing at the moment which would suggest Wang had lied on oath in relation to this payment.

31.  At the same time, P’s case is that other than the Sequoia Payments, all other income from sponsorships were received by P.

32.  As such, I am unable to see how documents or information in relation to all other payments into D’s HSB Account and D’s BOC Account or other of D’s accounts would be relevant.

Payments Out of the Accounts

33.  Mr Wong submitted that as a tracing exercise would be impossible without documents in relation to payments out of the accounts, documents in relation to payment out of D’s bank accounts are clearly “directly relevant”. The case of Malayan Banking Berhad v Legend Six Holdings Ltd ^[9] is relied upon as the Court of First Instance having ordered pre-action discovery of documents on the basis that it would enable P to trace into the relevant payments.

34.  Mr Chain submitted that the circumstances in Malayan Banking is an exceptional case. In the absence of special circumstances (where there were concerted fraud, parallel proceedings against different defendant fraudsters and injunctions in place), pre-action discovery cannot and should not be invoked to allow a tracing exercise to be conducted and/or completed at a pre-action stage. The entitlement to trace is, normally, a final relief. If there was any genuine exceptional urgency to trace in the present case, proceedings could already have been commenced against D and ex parte injunctive relief could have been sought.

35.  Mr Wong submitted that the relevant tests do not impose such requirements of “exceptional circumstances” as suggested by Mr Chain. P has already, in the affidavit evidence made clear the basis for their tracing claim, namely:

(1) The Requested Documents would enable P to:

(i) identify the whereabouts of and trace the Sequoia Payments through D’s bank accounts;

(ii) identify other receiving parties of the Sequoia Payments against whom P may make a tracing claim (knowing receipt or dishonest assistance);

(2) claim against D for knowing receipt or dishonest assistance of Wang’s breach of director’s duties.

36.  Based on the purpose of tracing, which has been set out, Mr Wong submitted that the records and documents in relation to payments made out of D’s relevant accounts in relation to the Sequoia Payments would be directly relevant.

37.  On the issue of tracing, I agree with Mr Chain, that it is rare for a court to grant pre-action discovery to assist with a tracing claim. This is demonstrated by the fact that Mr Wong and Ms Ling only managed to find one case in Hong Kong (being Malayan Banking) where the court had allowed for pre-action discovery to enable tracing. This is the basis upon which Mr Chain submitted that there would be some special circumstances, such as that on par with that in Malayan Banking where there were parallel proceedings against different defendant fraudsters.

38.  The basis for P’s tracing claim runs thus: if Wang has diverted P’s business to D and entered the Sponsorship Agreements with Sequoia Capital, he would have breached his fiduciary duties owed to P by causing P to perform D’s obligations under the Sponsorship Agreements at P’s expense. If that were the case, D could be liable for dishonest assistance, knowing receipt etc. I am of the view that if P had wanted to pursue this claim against D, which is based on a breach of director’s duties against Wang, the evidence directly relevant to this liability would be that related to D’s knowledge of Wang’s breach of fiduciary duties.

39.  However, what is being sought to be disclosed are in fact the tracing of the fund flow from D back to Wang (or to other parties). The true intention for seeking disclosure of such documents is to add Wang (or other recipients) as a defendant. If that were the true intention, P should have also made Wang a defendant to the present application and demonstrate that a case may well be made against Wang, and that Wang is likely to be a party. That has not been done.

40.  Tracing of the whereabouts of the Sequoia Payments is a remedy that would only be available to P after liability is established and sometimes, after an election has been made, if there is an alternative claim for damages. I am of the view that it is not the intention for pre-action discovery to allow a plaintiff to begin a tracing exercise at the pre-action stage. I bear in mind that pre-action discovery is not intended to extend to “background” documents or documents simply leading to a possible “train of inquiry”.

41.  After the hearing, I had asked parties to submit further cases where the court has allowed pre-action discovery in aid of tracing. Mr Wong and Ms Ling had found a UK case, Re Sustainable Wealth Investments (UK) Limited ^[10] and an Australian case, Peter Bentley Guest v Verna Anne Guest & Anor^[11].

42.  In Re Sustainable Wealth Investments (UK) Limited, the facts are such that the defendant company was being investigated on carrying out a ponzi scheme involving fictitious investment and there were more victims than the plaintiff. Several directors of the defendant company had already been convicted. Ultimately, only a settlement document was allowed in the pre-action discovery application, on the basis that the funds into which the applicant must trace are derived from it. As such, it can be seen that disclosure of all other documents enabling the entire tracing exercise were not allowed. Further, the learned Judge was also of the opinion that the receiver and the Serious Fraud Office ought to be heard before further documents would be ordered to be disclosed.

43.  In Peter Bentley Guest v Verna Anne Guest & Anor, it can be seen that the applicable principles are not entirely the same as those that are applicable in Hong Kong. Again, not all documents sought to be disclosed were allowed. Only documents for the identification of trust assets and beneficiaries were ordered to be disclosed. In that case, however, there was no dispute that a trust arrangement existed, as opposed to the present case. Further, the Judge also noted^[12] that:

“pre-action discovery must be distinguished from ordinary discovery in litigation which is an entitlement. Once a case is formulated with allegations that have a tenable basis, and an action is started, then [the plaintiff] can pursue energetically the ordinary right to discovery of documents that are relevant to the case as alleged. That is an important distinction to help understand the purview of the procedural rule at play here and the limits of its availability.”

44.  I thus find that the above cases do not assist P.

45.  I am of the view that documents in relation to payments out of D’s bank accounts are not directly relevant to an issue arising or likely to arise out of the claim against D. The jurisdictional requirement is not satisfied for this class of documents.

Documents relating to the opening of the accounts and mandates

46.  Mr Wong submission is that these are the normal documents which would be sought for a tracing exercise where wrongdoing is alleged. However, I am not convinced that that alone would make such documents “directly relevant” to any of the issues raised. Mr Wong has not demonstrated how the information likely to be on such documents would assist P’s intended claim.

47.  I am of the view that these documents are not directly relevant. The jurisdictional requirement is not satisfied for this class of documents.

D's books and records in relation to the Sponsorship Agreements

48.  I agree with Mr Chain’s submission that (3) of the Schedule is a mere catch-all provision as the documents sought thereunder would already be included in (1) or (2) of the Schedule. The discussion above would thus equally apply.

Requirement 5: Pre-action discovery is necessary

49.  Mr Wong submitted that the pre-action discovery as sought is necessary either for fairly disposing of the cause or matter or for saving costs for the following reasons:

(1) The Requested Documents are necessary in order for a properly particularised claim against the intended defendants to be pleaded.

(2) There is no other avenue open to P at this juncture to obtain the Requested Documents.

(3) P wishes to properly particularise claims and join the necessary defendants and avoid making amendments at a later stage.

(4) P would need to ascertain if the misappropriated funds have been transferred away, and if so, to trace them.

50.  Mr Chain submitted that it is clear that P already possessed sufficient information to commence proceedings against D as it could already particularize the date, amount, and recipient account of the Sequoia Payments. P is already in possession of the underlying contracts pursuant to which the Sequoia Payments are made. The remittances notices of the Sequoia Payments are also available to P. Pre-action discovery is thus not necessary.

51.  I agree with Mr Chain’s submission that pre-action discovery is not an investigative tool, it should not be granted to “assist a claimant in developing and finessing his causes of action”, to obtain evidence to “boost one’s case”, for “refinement” of a pleading, or simply to avoid the need to amend pleadings later – otherwise it would render general discovery otiose.

52.  Reasons 1 and 3 put forward by Mr Wong relate to refining any pleading that P is already able to produce, with the information that is already available. P should already be able to formulate a claim against D based on the Sponsorship Agreements and the remittance notices of 3 out of the 4 Sequoia Payments. Although the remittance notice of the 1^st Sequoia Payment is missing, I do not think that will bar a plea against D, as the designated account for payment under the Sponsorship Agreements is D’s HSB account and D has already deposed to the 1^st Sequoia Payment having been paid into D’s BOC Account.

53.  Reasons 2 and 4 can be resolved in the natural course of litigation that follows once a statement of claim has been filed.

54.  I am therefore not persuaded that the requirement of “necessity” has been satisfied in relation to the Requested Documents.

Abuse of Process

55.  D alleges that this application is being taken out to exert improper pressure against Wang due to other disputes between Wang and a Mr Wu Xiangdong of China Fortune, in relation to an alleged failure to pay for the value of the shares.

56.  I do not see how an application for pre-action discovery would exert pressure against Wang. If the Sequoia Payments are all accounted for, whether there are other disputes between Wang and other parties are irrelevant.

Conclusion

57.  To conclude, in this pre-action discovery application, P has failed to satisfy the fundamental jurisdictional requirement of direct relevance in relation to documents on the payments out of D’s bank accounts and the opening of bank accounts and mandates.

58.  Further, P has failed to demonstrate that pre-action discovery of the Requested Documents is necessary. P’s present application thus fails.

Order

59.  I order that the Originating Summons be dismissed.

60.  I order, on a nisi basis, that the defendant do have costs of the Originating Summons, to be summarily assessed, with certificate for 2 counsel.

61.  The defendant do lodge and serve a statement of costs within 14 days hereof. The plaintiff do lodge and serve its list of objections, if any, within 14 days thereafter.

62.  I thank counsel for their helpful assistance.