TCWF v. LKKS

CACV 167/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 167 OF 2013

(ON APPEAL FROM HCMC NO. 5 OF 2008)

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Hon Kwan JA (giving the Judgment of the Court):

1.  This judgment deals with the wife’s appeal against the order made by Ng J on 15 May 2013 in HCMC 5 of 2008. By a summons issued on 24 December 2012, the wife sought leave of the court to make use of and disclose the two judgments of Saunders J in those proceedings, being “the Main Judgment” and “the Barrell Judgment”, for the purpose of enforcement proceedings in other jurisdictions against the husband. The context in which that summons was issued was that the majority of the ancillary relief award ordered in her favour under “the Main Order” has not been paid. Her summons was opposed by the husband and the intervening parties, being the father and OIL. It was dismissed by Ng J.

2.  The wife brought this appeal with the leave of this court granted on 9 August 2013.

The judgment of Ng J

3.  There being no stay of the Main Order, it was accepted by all that the wife could freely make use of and disclose the Main Order or the Barrell Order for the purpose of enforcement proceedings within or outside Hong Kong.  Notwithstanding this, the husband and the father took the position, which was accepted by Ng J, different considerations should apply as regards the Main Judgment and the Barrell Judgment, because of the restriction imposed by Saunders J regarding the publication of the reasoned judgment.

4.  Ng J was of the view this was “far from being a normal case” because of the orders made by Saunders J regarding the publication and redaction of the Main Judgment.

5.  Specifically, the Main Judgment was not released for publication by Saunders J when it was handed down on 1 December 2011 but only a summary of it was published.  By the Barrell Order made by Deputy Judge Saunders on 6 July 2012, the Main Judgment as amended was to be published with a number of redactions as specified.  The judge then stayed the publication of the Main Judgment with redactions, pending the appeals of the husband and the father against the publication and the extent of the redactions.  Their appeals were heard by this court in October 2013.

6.  In Ng J’s view, what the wife was seeking in her summons was carte blanche permission to disclose the Main Judgment and the Barrell Judgment in their entirety “to anyone anywhere, as long as such disclosure is made in the course of enforcement proceedings that she decides to take” (paras 25 and 31 of the judgment).  No safeguards against “general publication” of the two judgments were offered by the wife.  The wife had not identified any paragraphs in the judgments that are “strictly necessary” for her intended enforcement proceedings (para 29).  Ng J was of the view there is “more than a reasonable prospect” that disclosure initially to a limited number of foreign lawyers and foreign courts for the purpose of enforcement proceedings “could well lead to publication of the two Judgments”.  If that should happen before the appeals were heard by this court in October 2013, that part of the appeals relating to redaction and publication would be rendered nugatory and become academic (paras 23 and 31).  He therefore exercised his discretion to refuse leave to the wife.

The arguments on appeal

7.  On appeal, Mr Howard, QC submitted on behalf of the wife that Ng J was wrong to treat her application for leave to disclose the judgments for enforcement purposes as “tantamount to sanctioning general publication” of the judgments (para 24 of the judgment). The judge had overstated the risk that the limited disclosure she sought would inevitably lead to general publication.  In assessing the risk of wider dissemination, he had failed to take into account safeguards that existed or which could be imposed to prevent this from happening.  Reasonable safeguards would include the implied undertaking of the wife under the law she must not use the judgment for a collateral purpose or countenance wider dissemination than was strictly necessary for enforcement purpose.  The implied undertaking of confidentiality could have been made express by the court.  The judge was also in error to characterise her application as “little more than an application of convenience, rather than necessity” (para 30 of the judgment).

8.  Mr Coleman, SC and Mr Todd, QC largely repeated the submissions made in the court below.  They emphasised the factual situation pertaining at the time of the hearing before Ng J, that there had been a specific prohibition by operation of the orders of Deputy Judge Saunders, that the Main Judgment will remain private to the parties pending the appeals of the husband and the father on the issues of publication and redaction of the judgment, and the court below should not do anything to pre-empt that result and rule on something that would in effect render the appeals in some way nugatory.  There was no wrongful exercise of discretion.  Furthermore, the wife’s appeal against Ng J’s order is academic, as the Main Judgment and the Barrell Judgment are the subject of the substantive appeals heard by this court in October 2013.  Unless this court were to dismiss all appeals and cross-appeals, the order or judgment that the wife would be enforcing would be the award of this court and not the award made in the court below.

Is this appeal academic?

9.  Mr Howard advanced a number of reasons why the wife’s appeal is not academic.  We are inclined to agree with him.

10.  Whatever the outcome of the substantive appeals, it is clear there will be a huge amount of money outstanding and which the wife is entitled to enforce against the husband.  She wanted to use the unredacted judgment of the court below (subject of course to any criticism that may be made by this court of that judgment) for the purpose of enforcement so that any enforcing court would get the full picture.  Even if the husband and the father were to succeed on the redactions they sought, she would like this court to make clear that she is entitled to use the unredacted judgment for enforcement, subject to her implied or express undertaking on confidentiality.  So for these reasons, she seeks a reversal of Ng J’s substantive order as well as his order on costs.

11.  We do not think the wife’s pursuit of this appeal is in any way improper.

The risk of general publication

12.  We are inclined to think that the judge had overstated the risk of general publication pending the determination of the substantive appeals if leave was to be granted to the wife to disclose and make use of the Main Judgment and the Barrell Judgment for the purpose of enforcement.

13.  As this court (Lam JA and Barma JA) has emphasised in our reasons for decision in CACV 166 of 2012 on 24 December 2012, the disclosure sought by the wife is “different from the general publication of the judgment which … is also one of the issues raised in a Notice of Appeal [of the husband, in CACV166 of 2012]” (para 12).  “The grant of leave to disclose the judgment for the limited purpose of enforcement of the judgment (which would itself be subject to implied undertaking if not express) would not impinge on the determination of appeal as to the general publication of the judgment.” (para 26)

14.  Ng J failed to take into account the force of the implied undertaking as to confidentiality of the wife, and that it could have been made an express undertaking if need be.  The wife would still be subject to this undertaking in the pursuit of enforcement proceedings in foreign courts.  In an ordinary case, there would not be a breach of the implied undertaking to use documents for the enforcement of a judgment, as there would be nothing collateral or alien about enforcement of the court’s order (Vitol SA v Capri Marine Ltd & Ors (No 2) [2010] EWHC 458 (Comm) at para 23, per Tomlinson J).  In this particular situation, because of the stay imposed by Deputy Judge Saunders which has the effect that the judgment will remain private to the parties pending the substantive appeals, the wife has to be extra careful her implied undertaking would be strictly complied with.

15.  Whilst it is correct that the wife did not make any offer of safeguards against general publication in her summons, affidavit or skeleton argument, as noted by the judge in para 25 of the judgment, Mr Howard has drawn our attention to the wife’s oral submission (she was then acting in person at the hearing) in which she raised with the judge that if the court considered she should give certain undertakings, she would be very happy to consider them [B/388, line 20].  The judge did not explore the question of an undertaking or safeguard with the wife.  When the judge refused the wife’s application for leave to appeal against his order in a subsequent hearing, he voiced his concern that any undertaking of confidentiality given by the wife would not bind a foreign court [B/460, line E].

16.  We do not think that is the right approach.  As submitted by Mr Howard, there is no suggestion that a responsible foreign court would not have honoured the wife’s undertaking of confidentiality to the Hong Kong court.  And if the wife should really find herself in a difficult position that her undertaking might be breached, she would have to choose between the alternatives of not proceeding in the foreign court, or laying herself open to contempt proceedings in the Hong Kong court.

17.  The judge was also in error in holding that the wife’s application was merely for convenience and not necessary to her enforcement proceedings.  The wife wished to rely in particular on the findings in the Main Judgment of the husband’s beneficial ownership of the assets.  There is no reason why she should have to rehearse all the primary evidence in support of such findings before each foreign court instead of relying on the findings already made by Saunders J.

Conclusion and orders

18.  For the above reasons, we allow the wife’s appeal and set aside the order of Ng J on 15 May 2013.  We make an order permitting the wife to make use of and disclose the Main Judgment as corrected on 6 July 2012 and the Barrell Judgment in their unredacted form for the purpose of enforcement proceedings.

19.  We also set aside the costs orders against the wife made by Ng J on 15 May 2013 and 19 July 2013.  In lieu thereof, we would award the costs of those applications to the wife.

20.  We make an order nisi that the wife’s costs of the appeal be paid by the husband and the intervening parties, with a certificate for two counsel.  We decline to exercise our discretion to order costs on an indemnity basis as sought by the wife.