Punjab National Bank v. Firestar Diamond Ltd (Formerly Known As Firestone Diamond Ltd)

HCA 872/2018

[2019] HKCFI 1479

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 872 OF 2018

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Before: Deputy High Court Judge Allan Leung in Chambers

Date of Hearing: 23 April 2019

Date of Decision: 23 April 2019

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D E C I S I O N

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1.This is the plaintiff’s non-party discovery application against Malca-Amit Global Limited (“Malca”), the 5^th third party in the action, under section 42 of the High Court Ordinance and Order 24, rule 7A. The purpose of the application is to enable the plaintiff to enforce the final judgments of 11 September and 17 September 2018 against the defendants for the sum of just over US$5 million.

2.It is clear that discovery can be ordered to assist the enforcement of judgments.  A Mareva injunction was granted against the 1^st to 3^rd defendants and the 1^st to 4^th third parties on 20 July 2018 and continued on 27 July 2018 until further order.

3.The documents sought are set out in the schedule of the plaintiff’s summons of 27 December 2018.  I have corrected the wrong references to the 1^st to 4^thdefendants in the schedule.  The documents are essentiallyinventories of the defendants and the third parties which relate to thousands of items of jewellery.

4.I do not believe there is any dispute as to the criteria for the court to order non-party discovery.  They are set out in the relevant court rules and authorities which I do not need to recite them in full.  Suffice it to say that the documents sought have to exist, are in the possession of the person against whom the application is made, are relevant to the questions in the action, are necessary for fairly disposing of the cause or matter and saving costs, and have to be carefully and precisely described.

5.The 1^st defendant filed an affirmation on 1 March 2019, opposing the plaintiff’s application on the ground, amongst others, that there are no judgments against the 1^st to 4^th third parties and that the disclosure already made is sufficient.  The plaintiff responded to that affirmation on 13 March 2019. 

6.Paragraph 2(1) of the injunction order does require the 1^st to 3^rd defendants and the 1^st to 4^th third parties to disclose the whereabouts of the assets.  For today’s purposes, none of the third parties were present to oppose the plaintiff’s application. 

7.Mr Allicock filed an affirmation on behalf of the 1^st defendant on 1 March, confirming that he was the sole director of the 1^st defendant and made the affirmation on behalf of the 1^st defendant.  There is no record whatsoever that the court has received notice suggesting that the third parties would appear at today’s hearing and oppose the application.

8.Malca adopts a neutral stance as long as the order for discovery is confined to the disclosure of information in relation to the defendants’ stocks physically located in Hong Kong and that the plaintiff pay the costsof the summons and for the compliance with any orders made.  It has also asked for 14 days instead of 7 days to file the affirmation as defined in the plaintiff’s summons.  It has not, therefore, filed any evidence in opposition to the summons.

9.I therefore make an order in terms of the summons save the changes to the draft order which were just discussed, essentially restricting the disclosure of the documents to inventories located in Hong Kong.

10.As to costs, Malca and the plaintiff have had discussions about the former’s costs but no agreement has been reached.

11.Malca has asked for HK$200,000 or for its costs to be summarily assessed on the basis of a schedule of costs provided.  I did not see any opposition from the plaintiff until this morning at the hearing when I was handed a summary of objections.  Holman Fenwick also did not have the opportunity to look at the objections.

12.In making a summary assessment, the court will take a global approach and consider if the total sum claimed is or appears disproportionate.  If it is not, then all that is required of the court is to be satisfied that each item of costs should be reasonably incurred.  If it is, the court will need to be satisfied that each item was necessary.

13.I have looked at the schedule of costs provided and am satisfied that the total sum claimed does not appear disproportionate. Whilst I consider the costs to be by and large reasonable, I have reduced some of the hours claimed by Malca and summarily assessed its costs at HK$150,000.

14.I do not consider it right for Malca’s costs to be borne by the defendants.  After all, this is the plaintiff’s summons and it would not be fair for a non-party to have to take any risks on the financial position of the defendants who have failed to pay for the judgments and are also subject to a Mareva injunction.  The plaintiff has clarified that the costs which they are seeking against the defendants are not in connection with this present application, and they confirm that they are happy to pay the non-party’s costs.

15.Malca’s costs assessed at HK$150,000 shall therefore be paid by the plaintiff within 14 days pursuant to Order 62, rule 9B(1)(a),subject to the right of either party to have the costs taxed pursuant to Order 62, rule 9A(2).

Mr Eric Woo, of ONC Lawyers, for the plaintiff

Mr Sunny Hathiramani, of Tanner De Witt, for the 1^st defendant

Mr Fergus Alexander Saurin, of Holman Fenwick Willan, for the 5^th third party