Read the full judgment text of CACV 66/2017 on BabelCite. This Court of Appeal judgment was delivered on 12 July 2019 before Kwan VP, Cheung JA, L Chan J.
Civil procedure – striking out – setting aside a judgment for fraud – abuse of process – res judicata – fraud of a party – adoption of fraud – fresh evidence – reasonable diligence – materiality – share custodian agreement – 200 million shares in Mayer Holdings Limited – consolidated actions HCA 238/2012 and HCCL 3/2012 – oral agreements to sell shares – forgery of 2nd Share Custodian Agreement (2nd SCA) – handwriting expert evidence – whether the perjured evidence and fraud of the 1st to 3rd defendants could be treated as adopted by the innocent 4th and 5th defendants (Bumper East Limited and Aspial Investment Limited) under the 'fraud of a party' rule where B&A relied on and adopted the evidence of the co-defendants and shared a common foe – held, it is not plain and obvious the legal position taken by Mayer is untenable; the court should not strike out the action on the adoption of fraud issue – whether a claimant bringing a new independent action to set aside a judgment for fraud must show the fresh evidence could not have been produced with reasonable diligence before the trial of the previous action – held, following Takhar v Gracefield [2019] UKSC 13 and Clone v Players (2018) 92 ALJR 399, it is inappropriate on a striking out application to determine that the reasonable diligence requirement must be met where new evidence is deployed to establish fraud raised unsuccessfully in the earlier proceedings – whether the 2016 handwriting expert reports (obtained after hard-fought discovery applications in 2015 and based on further control signatures of Ku) constitute 'new evidence' and satisfy the materiality requirement – held, the 2016 expert reports are new evidence and satisfy the materiality requirement, as the absence of expert evidence to prove Ku's signatures genuine was an operative cause of Reyes J's decision that the 2nd SCA was a fake – whether the affirmations from the seven Taiwan investors obtained in 2015 are 'new evidence' and material – held, the investors' evidence is not new and does not satisfy the materiality requirement, being merely 'further details' of evidence already considered by Reyes J – appeal allowed – order striking out Mayer's claim against the 4th and 5th defendants set aside – leave to amend statement of claim granted – 4th and 5th defendants to pay Mayer's costs of the appeal and the striking out application, with certificate for two counsel – Mayer to pay the costs of and occasioned by the amendment in any event.
Legal issues: Adoption of fraud by B&A under the 'fraud of a party' rule · Reasonable diligence requirement for setting aside a judgment for fraud · Whether the handwriting expert reports constitute 'new evidence' and satisfy the materiality requirement · Whether the seven Taiwan investors' evidence constitutes new evidence and is material
Outcome: Appeal allowed; the order of Mimmie Chan J striking out Mayer's claim against the 4th and 5th defendants was set aside; Mayer granted leave to amend its statement of claim.
Cited by 12 cases · Cites 7 cases