JEAN-PHILIPPE GASTON MARIE BENOIST v. QIAO YUANZHANG AND OTHERS

HCMP 766/2018, HCA 834/2020 and HCA 835/2020

(HEARD TOGETHER)

[2023] HKCFI 1437

HCMP 766/2018

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 766 OF 2018

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BETWEEN

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AND

HCA 834/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 834 OF 2020

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BETWEEN

AND

HCA 835/2020

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 835 OF 2020

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BETWEEN

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(HEARD TOGETHER)

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D E C I S I O N

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1.  I have before me a series of summonses relating to these proceedings. Two of them have been dealt with by consent and one has been adjourned for the parties to attempt to agree the minor dispute concerning the contents of a witness statement, to which the application relates.

2.  The contentious summons is dated 8 December 2022 and seeks specific discovery by the Petitioner of the 2^nd Respondent’s bank accounts for the period December 2016 to May 2018.

3.  Explaining precisely why the bank statements are thought to be relevant to the issues in these proceedings is complicated. In summary it may be stated as follows.

4.  The 1^st and 2^nd Respondents plead a defence which contends that there was an alteration in the parties’ interests in the 3^rd Respondent which is the Company, the subject of the unfair prejudice petition. The 1^st and 2^nd Respondents contend that this adjustment was a consequence of what the 1^st and 2^nd Respondents categorise as capital injections made by the parties set out in Schedule 1 to the Amended Defence.

5.  The adjustments are constituted by a number of payments made by the 2^nd Respondent on the Petitioner’s behalf. The 2^nd Respondent was utilised by the Petitioner and the 1^st Respondent to carry out the business which was intended to be operated by the Company prior to the Company being able to operate that business itself in the Mainland.

6.  The complexity that the arrangement gave rise to was that effectively, as I understand the position, the 2^nd Respondent was conducting this new business whilst conducting its own existing business. The Petitioner questions whether or not the allocation of expenses by the 2^nd Respondent to the new business is correct.

7.  As things stand at the moment the parties have not managed to agree an audit of the income and expenditure of the new business conducted by the 2^nd Respondent. As a consequence, contends the Petitioner, he is not able to agree the figures contained in Schedule 1.

8.  The resolution of the dispute that, therefore, currently exists concerning whether or not the figures in Schedule 1 are accurate necessitates an analysis of the records of the 2^nd Respondent said to record the income and expenditure of the new business and the Petitioner argues that in order for, what Ms Leung described in argument as, an audit to be completed satisfactorily by an independent accountant, the 2^nd Respondent will have to provide bank statements which allow a reconciliation of its ledgers with those bank statements to confirm that the 2^nd Respondent has properly allocated expenditure and the ledgers are genuine.

9.  I would say that this dispute is not very clear from the pleadings and was not clear to me from the written submissions that I received from the Petitioner. On balance it seems to me that the nature of the rather messy dispute, that it would appear exists over the financial affairs of the new business conducted by the 2^nd Respondent makes the bank statements for the period covered by the relevant entries in Schedule 1 discoverable.

10.  I will, therefore, make an order in the form of the draft that has been handed it up to me for the 2^nd Respondent to disclose within 42 days the bank account numbers of the accounts of the 2^nd Respondent used to carry out the transactions taking into account in the relevant ledgers for the period December 2016 to August 2017 inclusive and for inspection, or copies to be provided, of the bank statements for the relevant period. The bank statements can be redacted to exclude entries which the 1^st and 2^nd Respondents believe are attributable to the business conducted by the 2^nd Respondent unconnected with the new business.

11.  Given the way the matter has developed, it seems to me, and this is not disputed by the Petitioner, that the appropriate costs order is that there be no order as to costs.