XIE LI XIN v. LAW KA YAN THOMPSON AND OTHERS

HCA 1476/2017

[2022] HKCFI 1909

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1476 OF 2017

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D E C I S I O N

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A.  INTRODUCTION

1.  This is the hearing of the plaintiff (“Xie”)’s application by summons dated 23 May 2022 (“Summons”) for an order that leave be granted to him to disclose and/or make use of the information and/or documents listed in Schedule 1 to the Summons (“Schedule 1 Documents”) for the purpose of (i) enforcing and/or pursuing his rights in ancillary legal proceedings brought by or against the 1^st defendant (“Law”) (and his family members and/or entities controlled by him), and (ii) facilitating other investigations, whether civil or criminal.

2.  The Schedule 1 Documents comprise:

(1)  First, the transcript of the audio recording (including the audio recording itself) of the oral evidence given by Law and Xie at the trial of this Action (“Transcripts”);

(2)  Second, the Affirmation of Law filed on 27 July 2017, the 3^rd Affirmation of Law filed on 6 July 2020, the 4^th Affirmation of Law filed on 17 July 2020, and the 5^th Affirmation of Law filed on 10 August 2020 (collectively “Law’s Affirmations”), together with the exhibits thereto.

3.  The Summons is supported by the 5^th Affirmation of Xie, which was filed before this court handed down its judgment in the present Action on 30 May 2022 (“Judgment”).

4.  The Summons and the 5^th Affirmation of Xie have been served on Law on 27 May 2022.  Law has not appeared today to oppose the Summons.

B.   RELEVANT LEGAL PRINCIPLES

5.  There is in law an implied undertaking on the part of a party who obtains discovery not to use the disclosed documents for any collateral or ulterior purpose (see: Hong Kong Civil Procedure 2022, Practice Note 24/14A/1).

6.  Leave of the court is required before reporting any wrongdoings revealed by documents disclosed on discovery to appropriate authorities.  It is a balancing exercise whether what is sought to be achieved by relaxing the implied undertaking is more important for the administration of justice generally, such as in discouraging and punishing false evidence, than in maintaining confidentiality so as not to operate as a disincentive to full and frank discovery (see: Re NDT (BVI) Trading Ltd (No 2) [2009] 5 HKLRD 615 at paragraph 7).

7.  On the other hand, any undertaking, whether express or implied, not to use a document for any purposes other than those of the proceedings in which it is disclosed shall cease to apply to such documents after it has been read to or by the court, or referred to, in open court, unless the court for special reasons has otherwise ordered on the application of a party or of the person to whom the document belongs (see: Order 24, rule 14A of the Rules of the High Court, Cap 4A).

C.   DISCUSSION

C1.   Transcripts

8.  Given that the transcripts are, by definition, a record of what was said in open court, a party who intends to make use of the transcripts of court proceedings should not be subject to the usual implied undertaking.

9.  Moreover, given this court’s direction at paragraph 223 of the Judgment, there should be no question that there are compelling justifications for Xie’s intended use of the Transcripts to assist the on-going investigations of the Police.

C2.    Law’s Affirmations

10.  Law’s Affirmations were filed in compliance with the disclosure obligation imposed under paragraph 17 of the Injunction Order made by Deputy High Court Judge Saunders dated 22 June 2017 (as subsequently varied) and/or this court’s order dated 29 June 2020.

11.  As such, they may be regarded as documents disclosed by Law “under compulsion”, thereby giving rise to an implied undertaking on the part of Xie not to use the same for collateral or ulterior purposes.

12.  Xie seeks leave of this court to be released from such an implied undertaking to permit the disclosure and/or use of Law’s Affirmations (i) in the Law Family Actions and (ii) for facilitating other investigations (whether criminal or civil) against Law.

13.  First, insofar as the Law Family Actions are concerned:

(1)  The plaintiffs in six of the Law Family Actions have applied for charging orders against Law’s assets on the strength of default judgments.  It is expected that the remaining actions will unfold in a similar manner.

(2)  In determining whether the charging order should be made absolute, one of the factors the court has to consider, quite apart from whether the judgment is “bogus” or not, is the solvency of the defendant (which includes Law).  It is well-established that the court may refuse to make a charging order absolute where to do so would give the plaintiff priority over unsecured creditors of a defendant who is probably insolvent (see: Hong Kong Civil Procedure 2022, Practice Note 50/9A/23).

(3)  Law’s Affirmations, being disclosure affirmations in relation to his assets, are directly relevant to the question of Law’s solvency.  These affirmations should be made available to the court hearing those charging order applications so that the court is appraised of the full extent of Law’s assets and liabilities.

14.  Second, insofar as other investigations (whether criminal or otherwise) are concerned, it is well accepted that where, as here, the court is satisfied that there had been illegal or unlawful conduct, the public interest in the investigation or prosecution of serious fraud generally “takes precedence over the general concern of courts to control the collateral use of compulsorily disclosed documents” (see: NDT Trading Ltd (supra) at paragraph 8).  As such, a clear case for releasing Xie from his implied undertaking is made out.

D.  CONCLUSION

15.  For all the reasons stated above, the court makes an order in terms of paragraph 1 of the Summons.