VALUABLE RESOURCES LTD v. CHARU MEHTA AND OTHERS

HCCL10/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO.10 OF 2007

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J U D G M E N T

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1. On 23 January 2008, I gave judgment in this action in relation to an application by the defendants for a stay of proceedings and also for setting aside an ex parte order for material of non-disclosure.  I refused the application but, on that basis, ordered that the application be dismissed on terms of an undertaking to be given by the plaintiff.  Paragraph 12 of my judgment at page 5 reads :

“12.        It seems to me therefore that it is really too premature at present for the Hong Kong court at present to grant any of the relief of stay sought by the defendants.  Having said that, I do wish to impose upon the plaintiff the undertaking of not using any of the documents that come out from the Hong Kong proceedings except for the purpose of the Hong Kong proceedings and not to give them to any third party.  I think that undertaking should come from both the liquidator as well as the company.  I understand the parties will discuss this and agree on a formula.  So the order I would make is the appropriate undertaking agreeable to both sides should be given.”

2. That was in January this year.  Unfortunately, the parties had not been able to agree on the precise formula of the undertaking and furthermore because a subsequent event has arisen, namely that the petition to strike out, so to speak, the criminal complaint had been successful.  One party, namely the plaintiff, in correspondence, has put to the defendants that the undertaking should now go having regard to the new circumstances of the defendants no longer being in peril, so to speak. 

3. The matter is brought before me today arising out of some correspondence where I think Mr Khaw, counsel for the plaintiff, today sought to persuade me that the circumstances have changed so that the undertaking should be deleted, so to speak, from the order that I made.  He acknowledged quite fairly that the appeal period in India has not yet expired, that is in relation to the petition, the appeal period being 90 days. 

4. It seems to me therefore that this being the case, especially having regard to recent correspondence, where I think Messrs Johnson Stokes & Master, solicitors for the defendants was seeking an absolute assurance that there would be no appeal and no positive answer came back, and having regard to the present circumstances and that appeal can be lodged, appeal can be successful, that it is somewhat premature for me today to accede to Mr Khaw’s request.  It seems to me that far more harm may come from my doing what is sought to be done, sought by Mr Khaw than wait until it is quite clear that there can be no revival of the criminal complaint, so to speak.

5. I therefore do not accede to the request made by the plaintiff for the variation of the undertaking.  So far as the undertaking is concerned, the parties have shown me a draft and I have heard also submission from Mr Whitehead.  It seems to me that undertaking should be amended from the draft that was given to me today by adding a provision relating to non-giving of the documents to third party.  So I would suggest therefore, and I so direct, that undertaking to be given by the plaintiff and Mr Bickerton, the liquidator, should be in the following form :

“The plaintiff and Mr Andrew David Bickerton (the liquidator) undertake not to :

(a)      use or disclose to any third party any document, pleading affidavit, exhibit, witness statement or other materials (hereinafter referred to as “Prohibited Documents”) obtained in HCCL10/2007 (hereinafter called “the Action”) for any purpose other than those of the Action; and

(b)     give to any third party any of the Prohibited Documents.

If the plaintiff and the liquidator intend to use or to disclose to or to give to any third party any of the Prohibited Documents for any other purpose, leave of the High Court of Hong Kong shall be sought, unless the court otherwise directs, on 7 days’ written notice to the 1^st and 2^nd defendants or their solicitors.”