SWISS SINGAPORE OVERSEAS ENTERPRISES PTE LTD v. CHINA CITIC BANK CORPORATION LTD, XIAMEN BRANCH

HCCL 11/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO 11 OF 2009

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D E C I S I O N

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1.  This decision is being handed down at the same time as my judgment in this action.

2.  By summons dated 15 April 2013, the plaintiff applied for specific discovery of any agreements or guarantees entered between the the defendant (“the Bank”) and Xiamen C & D Inc (“XCD”) and/or documents signed or unsigned evidencing the banking relationship between XCD and the Bank.  The application was resisted by the Bank.  At the hearing of the summons before me on 8 May 2013, the plaintiff narrowed the scope of the application by limiting it to those documents that were in existence in September 2008 in connection with letter of credit facilities and trust receipt facilities extended to XCD by the Bank.  I dismissed the application with costs to the Bank for the reason that the standing credit facility arrangements existing in September 2008 were not relevant to the estoppel defence raised by the Bank[1]. 

3.  I have found, in §§ 68 and 70 of my judgment just handed down, that as XCD was not liable to pay the amount of USD2.2 million to the Bank, it was not liable to provide any security for such payment.  I also went on to find that it was apparent from the evidence of the credit facility arrangements that the Bank did not require security from XCD in the course of their dealings and that, if it did not require security to cover the Bank’s liability to pay the amount stipulated in the letter of credit, which was a far greater sum than USD2.2 million, it is unlikely to have made arrangements to obtain security from XCD before releasing the documents to XCD on 23 September 2008. 

4.  It is clear from the above that the documents sought were relevant to the estoppel defence raised by the Bank and, further, that I had an imperfect understanding of the issues thrown up by the case at the time when I dismissed the specific discovery application.  However, no harm was done because the Bank itself produced the relevant documentation[2] prior to the CMC hearing on 7 June 2013, and which had been prompted by my wish to see the letter of credit application at trial[3].

5.  At the CMC hearing before me on 7 June 2013, the plaintiff applied to me to amend my costs order, which had not yet been sealed, on the ground that the Bank had supplied the very documents, via the supplemental witness statement of Mr Xu, that the plaintiff had sought by its specific discovery application.  It was submitted on behalf of the plaintiff that the costs of the specific discovery application should be awarded to the plaintiff.  At that hearing, I directed that this matter ought to be dealt with, and resolved, at the trial of the action.    

6.  The principles that apply to an application to vary an order made but not yet sealed are clear[4]. For a court of record, it is a well-established rule that until the point of time when the order is finally recorded, it has the power to recall and vary a decision it had earlier made.  The occasions when the court is reconvened to consider the re-opening of a decision should be exceptional.  In the exceptional case where the matter is allowed to be re-argued, the judge must exercise great caution in determining whether to alter his original decision. Where the judge is firmly satisfied that his previous decision was incorrect and that alteration is necessary to ensure that justice is done, alteration would be justified.  In such cases, the delay, expense and uncertainty involved in a further appeal would be avoided. 

7.  It was submitted on behalf of the Bank that I had rightly dismissed the plaintiff’s application for specific discovery because it was too wide.  This is true of the original application but, in the course of argument, the plaintiff had narrowed down the application considerably to cover only the standing credit arrangements in September 2008 relating to letter of credit and trust receipt facilities.

8.  It was further submitted that I had rightly dismissed the application because it had been pursued on a wholly erroneous footing, the plaintiff having said that the message of 22 September 2008 to the Bank was a “D/P” instruction, namely, that the Bank was instructed to deliver documents against payment.  I did not, at that time, accept that the message of 22 September 2008 resulted in an entirely new D/P transaction unrelated to the letter of credit.  However, the mistaken analysis by the plaintiff did not detract from the relevance of the standing credit arrangements to the estoppel defence raised by the defendant.

9.  Finally, it was submitted that the documents produced via the supplemental witness statement of Mr Xu was a result of prompting by the court rather than the application for specific discovery.  That may be so, however, these were the very documents sought by the plaintiff in its substantially narrowed down specific discovery application and which was resisted by the Bank. 

10.  For the reasons set out above, I am satisfied that my original decision to disallow the limited specific discovery sought by the plaintiff was incorrect and that, to ensure that justice is done, I ought to set aside the costs order I had made in favour of the defendant and substitute it with a costs order that the defendant pays the plaintiff 50% of its costs of the application for specific discovery.  I so order because the plaintiff was only partially successful in its application, the Bank being right to oppose the wide scope of the discovery originally sought.