CHINA MEDICAL TECHNOLOGIES, INC. (IN LIQUIDATION) AND OTHERS v. BI XIAO QIONG (IN HER PERSONAL CAPACITY AND AS TRUSTEE OF THE XIAO QIONG BI TRUST AND THE ALISA WU IRREVOCABLE TRUST)

CACV 505/2019

[2020] HKCA 541

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 505 OF 2019

(ON APPEAL FROM HCA 3391/2016 and 1417/2013)

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HCA 3391/2016

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HCA 1417/2013

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(CONSOLIDATED BY ORDER OF MASTER CHOW DATED 23 JULY 2018)

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DECISION

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Hon Lam VP (giving the Decision of the Court):

Introduction

1.  This is an application (the “Application”)[1] by the Plaintiffs under Order 59, rule 10(2) of the Rules of the High Court seeking leave to adduce further evidence in the appeal (the “Appeal”), namely the affidavit of Cosimo Borrelli dated 6 March 2020 exhibiting the Singapore Court of Appeal (“SGCA”) judgment in Civil Appeal No. 188/2018 handed down on 30 September 2019 (the “SGCA Judgment”).

2.  Having considered the papers, we are of the view that it is appropriate to deal with the application based on the written submissions only without an oral hearing, pursuant to Order 59, rule 14A(1) of the Rules of the High Court (Cap. 4A).

The Application

3.  The present appeal is against the Judgment of Ng J (the “Judge”) dated 22 May 2019 (the “Judgment”).  The Judge, after a hearing from 17-19 September 2018 (the “September 2018 Hearing”), set aside and discharged a worldwide Mareva injunction granted ex parte without notice by L Chan J on 11 December 2017 and amended by L Chan J on 8 January 2018 (the “Injunction”) as against the 2^nd, 5^th and 13^th Defendants.  The Injunction was discharged on the grounds of procedural abuse of the Court’s process and there was no risk of dissipation so as to justify a Mareva Injunction.

4.  By a summons dated 5 June 2019, the Plaintiffs applied for leave to appeal, which application was dismissed by the Judge on 17 July 2019. 

5.  Upon renewed application to the Court of Appeal, leave to appeal was granted by Barma and Au JJA on 17 October 2019. 

6.  The Plaintiffs filed the Notice of Appeal on 31 October 2019.  There are 3 grounds of appeal.  In brief, the first ground concerns the Judge’s finding of lack of real risk of dissipation.  The second ground is directed at the Judge’s findings that it was inappropriate to apply ex parte and that injunctive relief was not appropriate due to delay by the Plaintiffs.  The third ground concerns the Judge’s finding that the Plaintiffs had abused the process of the court.

7.  In the course of preparing the draft appeal bundle index, solicitors for the Plaintiffs sought to include the SGCA Judgment, which was handed down on 30 September 2019, i.e. after the handing down of the Judgment on 22 May 2019.

8.  By a letter dated 4 February 2019, solicitors for the 2^nd Defendant suggested that the Plaintiffs should “make application to adduce new evidence if that Judgment is important new evidence (by consent with D13 if possible)”.

9.  By a letter dated 17 February 2020, the 13^th Defendant opposed the inclusion of the SGCA Judgment in the appeal bundle, mainly on the ground that the SGCA Judgment is not “evidence” and is not relevant as the Court of Appeal has a positive duty to independently assess and evaluate the evidence before it.

10.  The Plaintiffs took out the Application by way of summons dated 10 March 2020.

11.  The 13^th Defendant opposes the Application, and an affidavit in opposition was filed on 5 May 2020.  The other Defendants involved in the appeal (namely, the 2^nd Defendant and the 5^th Defendant) take a neutral stance with respect to the Application.

The SGCA Judgment

12.  According to the affidavit of Cosimo Borrelli dated 6 March 2020 at paragraph 4, “[the SGCA Judgment] upholds the decision of the Supreme Court of Singapore to grant a Mareva injunction obtained by the same Plaintiffs as in [the present action in Hong Kong] against Ms Bi [i.e. the 13^th Defendant] on facts which were materially the same as in this action in Hong Kong.  That earlier decision was in evidence at the hearing before the Honourable Mr Justice Ng, together with other documents and evidence filed in the Singapore Action, which are exhibited to Borrelli 6 and Borrelli 10”.

13.  In their written submissions dated 19 May 2020, the Plaintiffs made it clear that the Plaintiffs do not seek to adduce the SGCA Judgment as the evidence of the facts found in it.  The Plaintiffs accepted that the SGCA Judgment is not admissible in Hong Kong as evidence of the facts found therein[2], referring to Hollington v Hewthorn [1943] 1 KB 587 (which was applied in Secretary of State for Trade and Industry v Bairstow [2004] Ch 1 as pointed out by the 13^th Defendant).  Neither are the Plaintiffs suggesting that the SGCA Judgment is binding on this court or that this court should abrogate its review function[3].

14.  Notwithstanding so, the Plaintiffs contended that “despite the evidence before the two courts being materially the same”, the Singapore Court of Appeal came to a conclusion “completely different” from the Judge’s conclusion on the question of risk of dissipation[4].  The Plaintiffs wish to “show the view formed by the Singapore Court of Appeal on the evidence before it” and then “invite the Court to take a similar view on materially similar facts”[5]. 

15.  The Plaintiffs submitted that the Application may be viewed in two distinct ways, namely either: (1) pursuant to Order 59 rule 10(2) of the Rules of the High Court (Cap. 4A) to adduce “evidence as to matters which have occurred after the date of the trial or hearing” (the “1^st Perspective”); or (2) not an application to adduce further evidence (as the SGCA Judgment is not relied on by the Plaintiffs as evidence of the truth of anything) (the “2^nd Perspective”)[6].

Discussions

16.  With respect, having read and considered the Plaintiff’s written submissions dated 19 May 2020, the 13^th Defendant’s written submissions dated 2 June 2020, and the Plaintiff’s written reply submissions dated 9 June 2020, we are of the view that none of the 1^st and 2^nd Perspectives justify the Application.  In short, the Application is misconceived.

17.  As to the 1^st Perspective, Order 59 rule 10(2) of the Rules of High Court (Cap 4A) provides that:

“ (2) The Court of Appeal shall have power to receive further evidence on questions of fact, either by oral examination in court, by affidavit, or by deposition taken before an examiner, but no such further evidence (other than evidence as to matters which have occurred after the date of the trial or hearing) shall be admitted except on special grounds.”

18.  Importantly, and quite rightly, the Plaintiffs acknowledged that they cannot rely on the SGCA Judgment as evidence of the truth of anything set out in that judgment. 

19.  The Plaintiffs intended to refer to the SGCA Judgment to show the conclusion reached by the Singapore Court of Appeal.  On this view, the SGCA Judgment is at most a record of how another court viewed the evidence.  It is an expression of opinion by the SGCA.  There is no suggestion that such opinion is a relevant fact for the disposal of the present appeal.

20.  The Plaintiffs, however, urged this court to receive the SGCA Judgment as evidence on appeal because it would be “an affront to one’s sense of fairness not to admit [the SGCA Judgment]”, referring to Re China Fishery Group Ltd [2020] HKCA 169 at [26]; Hughes v Singh, The Times, 21 April 1989; and the commentary in Hong Kong Civil Procedure 2020, Vol. 1 at [59/10/13] [7]. 

21.  With respect, this is “putting the cart before the horse”.  In the cases cited by the Plaintiffs, it was held that this court has a wide discretion in relation to admitting fresh evidence on developments after judgment below, and one of the considerations is that “the evidence should be admitted in all cases where it would be an affront to one’s sense of fairness not to admit it”.

22.  Even in the context of evidence of subsequent development, as held by the Court in PW v PPTW CACV 224/2013, 16 Dec 2014, the new development must have important influence on the outcome of the appeal before the discretion would be exercised in favour of admitting the evidence.

23.  In the present case, the SGCA Judgment is not “evidence” of any fact but only encapsulated the opinion of SGCA.  There is no basis to suggest that such opinion is a relevant fact in the present appeal.  Thus, it cannot fall within the scope of Order 59 rule 10(2). 

24.  In any event, it is unclear how it would be “an affront to one’s sense of fairness” not to admit the SGCA Judgment as evidence when the only purpose of referring to the SGCA Judgment (as submitted by the Plaintiff) is to “show the view formed by the Singapore Court of Appeal on the evidence before it”. Indeed, the Plaintiffs accepted that the SGCA Judgment would not “affect [any] basic assumption made at [the September 2018 Hearing]” [8]. In other words, the Plaintiffs cannot show that the admission of the SGCA Judgment would have an important influence on the outcome of the appeal.

25.  Though the judgment of the Supreme Court of Singapore was placed before the Judge at the September 2018 Hearing, the 13^th Defendant had all along been disputing the relevance of the first instance and appeal judgments of the Singaporean courts[9].  Our Decision on this application vindicates the stance of the 13^th Defendant on this issue.

26.  In the appeal, this court (as did the Judge in the court below) is duty bound to assess and evaluate the evidence before us independently in considering whether the decision of the Judge should be upheld or reversed.  The SGCA Judgment adds nothing to the evidence and it is irrelevant to the determination of the present appeal in terms of factual evaluation.

27.  On the other hand, if there were legal propositions which were relevant, a judgment of SGCA can of course be cited as a persuasive common law authority.  There have been cases where the judgments of SGCA were applied in the development of our common law.  However, that would not be the same as admitting the SGCA Judgment as evidence in the appeal.  It would be wrong to conflate the two concepts.  It would equally be wrong to refer to the SGCA Judgment as persuasive authority when the real purpose is not to rely on it in terms of proposition of law but only as to show that the SGCA had reached a certain conclusion on its view of the evidence which is similar to the one adduced in the Hong Kong proceedings.   

28.  The above analysis should put the contention in paragraph 1.2 of the Notice of Appeal[10] to rest.

29.  As to the 2^nd Perspective, we have great difficulty in understanding how such perspective (premised as it were on the basis that the present application is not an application to adduce further evidence) could support the summons of 10 March 2020 which sought specifically the relief for admitting further evidence on appeal.  Hence, the line of argument based on the 2^nd Perspective fails in limine in terms of the application under the summons.

30.  Further, the Plaintiffs’ reliance on XY, LLC v Jesse Zhu [2017] 6 HKC 479; [2016] HKCA 592 at [14]-[16] is misplaced.  We cannot find anything in that judgment which differs from our analysis above on the inappropriateness of adducing the SGCA Judgment as evidence in the present appeal.  In that case, the claim for injunction in Hong Kong was in aid of a Canadian judgment.  Kwan JA noted that the Canadian Court of Appeal judgments could not be regarded as evidence of the truth of the findings and were not relied on by the plaintiff as evidence of the truth of anything.  Her Ladyship held that there was no need for an application for further evidence to be adduced.  The case does not support Mr Lee’s proposition that notwithstanding it is not evidence, some order should be made for the inclusion of the SGCA Judgment.

31.  As regards the Plaintiffs’ reliance on Wei Xing v Willwin Development (Asia) Co Ltd [2017] HKCFI 680 at [14]to use the SGCA Judgment to support “the bona fides of this appeal” and “helps to explain the grave concern that has driven it to be pursued”, it is also misconceived.  That case concerned an application for an order under s. 740 of the Companies Ordinance (Cap 622), as to which good faith and purpose of the application are relevant considerations.  It was in such context the court said that the Mainland Judgment were “admissible to show that these judgments and findings had been made by the Mainland courts”.

32.  Contrast with the present appeal, what is in issue is at the highest the good faith of the Plaintiffs at the time of its application for ex parte relief at the court below instead of the good faith in bringing this appeal.  The SGCA Judgment was not available to the Plaintiffs.  We cannot see the relevance of it in the context of this appeal.

33.  Finally, Mr Lee suggested that “the Plaintiffs have only made a formal application because the 13^th Defendant objected to including the SGCA Judgment in the appeal bundle”, and that “[t]he alternative would have been for the Plaintiffs simply to include the SGCA Judgment in their list of authorities – like the respondent in XY, LLC – and leave D13’s objections to be determined at the hearing of the substantive appeal” [11]. 

34.  With respect, this is irrelevant to the determination of the Application, which was taken out of the Plaintiffs’ own volition.  Those advising the Plaintiffs should decide for themselves whether the relief sought in the summons is appropriate.  As analysed above, whether the Plaintiffs should include the SGCA Judgment in their list of authorities should be guided by the considerations we set out at [27] above and has nothing to do with adducing the same as evidence in the appeal.

Conclusion

35.  For all the above reasons, we dismiss the Application.  As the Application is entirely without merit, pursuant to the power under Order 59, rule 2A(8), we further order that no party may under rule 2A(7) request this determination to be reconsidered at an oral hearing inter partes.

36.  There is no reason why costs should not follow the event.  Regrettably, solicitors for the 13^th Defendant did not lodge any statement of costs in accordance with paragraph 36(9) of PD 4.1.  Though it would be disproportionate to deprive the 13^th Defendant costs of the opposition, the Court is entitled to take account of such failure in awarding costs.  We order that the Plaintiffs pay the 13^th Defendant’s costs of this application and make an order pursuant to Order 62 Rule 9A(1)(b) for payment of costs by way of summary assessment in the sum of $100,000.  This means that either party may seek to have the costs taxed notwithstanding such summary assessment.  Should there be any application for taxation pursuant to Rule 9A(2), the taxing master should take account of the failure to comply with paragraph 36(9) in the exercise of his discretion on the costs of the taxation.