Read the full judgment text of CACV 63/2017 and CACV 76/2017 on BabelCite. This Court of Appeal judgment was delivered on 18 July 2018 before Lam VP, Kwan JA, Barma JA.
Civil procedure – expert evidence – admissibility and case management – amendment of pleadings – new cause of action – limitation – whether amendments introduce new cause of action – whether new causes of action arise out of same or substantially the same facts – exercise of discretion. The Foxconn Parties (Shenzhen Futaihong, Hong Fu Jin and FIH) sued the BYD Parties for breach of confidence, inducing breach of contractual and fiduciary duties, conspiracy and dishonest assistance, alleging that the BYD Parties wrongfully received and used the Foxconn Parties' confidential information, including operation manuals and records of suppliers and customers, through former Foxconn employees to set up a similar production line by August 2006. The BYD Parties applied for leave to adduce expert evidence on, inter alia, the nature, value and accessibility of information in the mobile phone market, trends in the mobile phone industry, PRC law and Taiwanese law. By summons dated 29 March 2016 (as amended on 24 June 2016), the BYD Parties sought expert directions. The application was refused in part by Ng J, who also granted the Foxconn Parties leave to amend the Re-Amended Statement of Claim to add allegations relating to three additional employees (Dong, Chen Quan and Akin Wang) following discoveries made in the BYD Discovery of July 2014. The BYD Parties appealed. Held, dismissing both appeals: (1) On the admissibility of expert evidence, the conditions for admissibility require that the subject matter be one where expert evidence may properly be given, that the witness is qualified as an expert, and that the evidence is relevant and helpful. Expert directions are a case management matter and the Court of Appeal will only interfere where the decision was not in accordance with established principles or was plainly wrong. The BYD Parties' summons was unsupported by any affidavit or affirmation, no draft expert reports were produced, the BYD defence was a bare non-admission, and the information did not involve highly technical matters. The judge was entitled to refuse expert directions on the nature, value and accessibility of the alleged confidential information and on industry trends, the questions being either factual, too general or unhelpful. (2) On the formulation of PRC law and Taiwanese law issues, the judge was entitled to exercise his discretion to extend the scope of expert evidence, applying the double actionability approach in First Laser Ltd v Fujian Enterprises (2012) 15 HKCFAR 569, and bearing in mind the underlying objectives in Order 1A. (3) On the amendments, applying the three-stage test in Ballinger v Mercer Ltd [2014] 1 WLR 3597 and Diamandis v Wills [2015] EWHC 312 (Ch), the disputed amendments did not introduce a new cause of action for the breach of confidence claim, which is the primary claim. For the other claims (inducing breach of duties, conspiracy and dishonest assistance in respect of Chen Quan and Akin Wang, and parts relating to Dong), a new cause of action was introduced but the new cause of action arose out of the same or substantially the same facts as were already in issue in the existing claim, satisfying the conditions in Order 20 rule 5(5) of the Rules of the High Court and section 35(6)(a) of the Limitation Ordinance (Cap 347). The judge's exercise of discretion to allow the amendments was not plainly wrong; the BYD Parties failed to establish real prejudice that could not be compensated by costs. Both appeals dismissed with costs nisi and a certificate for three counsel.
Legal issues: Admissibility of expert evidence on nature, value and accessibility of confidential information · Admissibility of expert evidence on mobile phone industry trends and expansion · Formulation of expert issues on PRC law and Taiwanese law · Whether disputed amendments introduce a new cause of action for breach of confidence · Whether new causes of action in other claims arise out of substantially the same facts · Exercise of discretion to allow amendments that would otherwise be statute-barred
Outcome: Both appeals dismissed. The Court of Appeal upheld the judge's decisions refusing most of the BYD Parties' application for expert directions, and upheld the judge's decision to grant the Foxconn Parties leave to amend the Re-Amended Statement of Claim.
Cited by 29 cases · Cites 3 cases