Kot See for v. Lam Man Cheung and Others

HCA 743/2019

[2019] HKCFI 2403

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 743 OF 2019

________________________

________________________

Before: Deputy High Court Judge MK Liu in Chambers

Date of Written Submissions of Plaintiff: 16 September 2019

Date of Written Submissions of 2^nd Defendant: 2 & 23 September 2019

Date of Decision: 27 September 2019

________________________

D E C I S I O N

________________________

1.By a summons filed on 2 August 2019 (“the Summons”), Tang applies for leave to appeal from my decision pronounced on 24 July 2019 (“the July Decision”)[1] and stay of execution of [2] to [4] of the Injunction pending appeal. This decision should be read together with the July Decision. Abbreviations used in the July Decision are adopted herein.

2.Mr Ambrose Ho SC for Tang proposes the following grounds of appeal:

(1) that I have erred in failing to have regard or proper regard to the infringement of Tang’s fundamental right of PSI in continuing [2] to [4] of the Injunction;

(2) that I have erred in holding that the balance between PSI and the effectiveness of the Injunction can be taken care of by Kot’s undertaking as set out in [30] of the July Decision (“the Express Undertaking”);

(3) that I erred in awarding the entirety of the costs of the Discharge Summons to Kot, given that the Express Undertaking was only offered by Kot at the hearing on 24 July 2019.

3.The principles concerning leave to appeal are well-established. Leave can only be granted if the appeal has a reasonable prospect of success (which means that the prospect of success is reasonable and more than fanciful, without having to be probable), or there is some other reason in the interests of justice why the appeal should be heard[2]. In respect of an appeal from an exercise of a discretion by the court below, the appeal would not be entertained unless it can be shown that the discretion was exercised under an error of law, in disregard of a principle, under a misapprehension of facts or the conclusion reached was “outside the generous ambit within which a reasonable disagreement is possible”[3].

4.Tang intends to challenge the decision concerning continuation of [2] to [4] of the Injunction and the decision concerning costs. These are decisions made as a result of the exercise of my discretion.

5.In respect of Grounds 1 and 2 of the intended appeal, my view is as follows:

(1) In [29] and [30] of the July Decision, I said:

“29. Mr Ho SC submits that in the event that the Court does not accept the arguments above, Tang would rely upon PSI and contend that because of PSI, §§2 - 4 of the Injunction should be discharged.

30. With respect, I am unable to accept Mr Ho SC’s submissions. Each case depends upon its owns facts. In my view, the balance between PSI and the effectiveness of the Injunction in this case can be taken care of by an undertaking offered by Kot that he (including his nominees, agents or servants or any of them) would not divulge any information disclosed by Tang in compliance with the Injunction to the police or the Department of Justice or any law enforcement authority[4]. Ms Tong has told me that Kot is willing to offer the undertaking.”

(2) At the time of the July Decision, my task was to hold the ring between Kot and Tang. I had no need and did not come to a final view on whether Kot would succeed at the trial and whether Tang’s PSI was indeed engaged in this case. With a view that Kot might succeed at the trial and Tang’s PSI might be engaged, I adopted the interim measures as set out in [30] of the July Decision. I am of the view that this is the right balance between the competing interests.

(3) Mr Ho SC submits that PSI is clearly engaged, and I ought to have considered that as a matter of principle, [2] to [4] of the Injunction should be discharged because of the infringement of Tang’s PSI unless Tang’s rights could be adequately and sufficiently safeguarded. In his submissions, I erred in approaching the issue as a balancing exercise.

(4) With respect to Mr Ho SC, I am unable to accept these submissions. As I said in the above, I have not come to a final view on whether PSI is clearly engaged in this case. Bearing the respective interests of Kot and Tang in mind, I adopted the interim measures as set out in [30] of the July Decision. I note that Mr Ho SC is not saying that as a result of the PSI raised by Tang, [2] to [4] of the Injunction must be set aside as a matter of course. The crux of the matter hinges on whether there is any measure adequately and sufficiently safeguarding Tang’s interest. In other words, the crux is whether the Express Undertaking together with the implied undertaking provided by Kot (“the Implied Undertaking”)[5] constitute an adequate and sufficient measure safeguarding Tang’s interest.

(5) Mr Ho SC submits that notwithstanding these undertakings, there is no adequate protection to Tang in the absence of an undertaking from the Department of Justice (“DoJ”) that no use would be made of the information divulged by Tang in compliance with [2] to [4] of the Injunction[6].

(6) Ms Sara Tong for Kot submits that the Court of Appeal in Manufacturer’s Life Insurance Co of Canada has not laid down any principle that in each and every case where PSI is engaged, adequate protection means that there must be an undertaking from the DoJ not to use the materials disclosed. Similarly, although whether an undertaking from DoJ is necessary has been discussed in Hui Chi Ming, there is no ruling in that case laying down any general principle. Ms Tong submits that the undertakings offered by Kot have already provided adequate protection to Tang.

(7) I agree with Ms Tong. Having considered the written submissions provided by Mr Ho SC and Ms Tong respectively, in my view, there is no authority laying down any general principle that once PSI is engaged, regardless of the facts of the case, there must be an undertaking from the DoJ for protection to be considered as adequate.

(8) In the circumstances of this case, I am of the view that the Implied Undertaking, coupled with the Express Undertaking, put it beyond doubt that Kot (including his nominees, agents or servants or any of them) would not divulge any information obtained by Kot from Tang under [2] to [4] of the Injunction to the police or the DoJ or any law enforcement authority.  In my judgment, that would be an adequate protection to Tang.

(9) Mr Ho SC submits that notwithstanding the undertakings offered by Kot, the police may obtain the information disclosed by Tang by applying for a search warrant against Kot and executing the same, thereby obtaining the documents disclosed by Tang and in Kot’s possession. Mr Ho SC also submits that Kot may disclose the information obtained to other third parties, such as journalists. The information may then be reported in the media and in turn assist the criminal investigation by the police.

(10) With respect to Mr Ho SC, in my view, these are fanciful risks. The disclosure to be made by Tang in compliance with [2] to [4] of the Injunction would be by affirmation(s) and letter(s). These documents would not be publicly accessible. To say that the police would try to obtain these documents from Kot by applying for a search warrant against Kot and executing the same (assuming that the application is successful), with respect, this is really fanciful. To say that Kot would pass the information obtained under the disclosure order to a third party with a view that the third party would provide the information to the police, there is no evidence showing that Kot may do so. Ms Tong submits that Kot has no intention to do so. In any event, Kot is bound by the undertakings and cannot do so.

(11) I am not persuaded that I have erred in principle in the exercise of my discretion. There is no merit in Grounds 1 and 2.

6.In respect of Ground 3 of the intended appeal, my view is as follows:

(1)  In [36] of the July Decision, I said:

“36. Costs should follow the event. On the question of PSI, Kot has already indicated that he is willing to offer an undertaking to take care of Tang’s interest in Ms Tong’s written submissions provided to the court before this hearing. However, Tang still pursued an application to discharge §§2 - 4 of the Injunction by relying upon PSI in this hearing. That application failed. In my view, Kot should get all the costs. I order that costs of the Discharge Summons and the Amendment Summons (including all costs reserved) be paid by Tang to Kot forthwith, with a certificate for 2 counsel. ……”

(2)  Mr Ho SC submits that the Express Undertaking was only offered at the hearing on 24 July 2019 after the enquiry made by the Court. For this reason, Kot should only be entitled to have 50% of the costs of the Discharge Summons.

(3)  With respect, I am unable to agree with Mr Ho SC. Most of the time in the hearing on 24 July 2019 has been spent on other issues. The time spent on the Express Undertaking is minimal. Further, as submitted by Ms Tong and as recorded in [36] of the July Decision, before the hearing on 24 July 2019, Kot had already indicated that he was willing to offer an undertaking to take care of Tang’s interest if necessary.

(4)  In these circumstances, I am not persuaded that I have erred in principle in awarding costs of the Discharge Summons to Kot without any deduction. There is no merit in this ground.

7.With respect to Mr Ho SC, I am of the view that the intended appeal does not have a reasonable prospect of success. I also do not see any reason why in the interests of justice the appeal should be heard. The application for leave to appeal must be refused.

8.Since I have refused to give Tang leave to appeal, the application for stay of execution of [2] to [4] of the Injunction pending appeal must also be refused.

9.I dismiss the Summons.  Costs should follow the event.  I order that costs of the Summons be paid by Tang to Kot, with a certificate for 2 counsel.  Those costs be summarily assessed.  There be leave to Kot to provide a bill of costs for summary assessment within 7 days, and leave to Tang to provide a written reply to the said bill within 7 days thereafter.

10.I thank counsel for the assistance rendered to the Court.

Ms Sara Tong and Ms Esther Mak instructed by Mayer Brown, for the Plaintiff

Mr Ambrose Ho, SC and Mr Jeff Chan instructed by F. Zimmern & Co., for the 2^nd Defendant