Samson Tsang Tak Yung v. The Joint and Several Provisional Liquidators of China Medical Technologies, Inc.

FAMV No. 341 of 2019

[2020] HKCFA 8

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 341 OF 2019 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM

CACV NO. 46 OF 2015)

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REASONS FOR DETERMINATION

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Mr Justice Bokhary NPJ:

1.At the conclusion of the hearing of this application for leave to appeal to the Court of Final Appeal, we dismissed the application with costs, saying that we would hand down our reasons later.  These are the reasons.

2.Mr Samson Tsang used to be a director and the chief financial officer of China Medical Technologies, Inc (“the Company”).  It was ordered that the Company be wound up.  An order for Mr Tsang’s examination under s 221 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) was made.

3.The Company’s Joint and Several Liquidators (“the Liquidators”) applied for: (i) a direction extending the scope of the matters on which Mr Tsang may be examined; and (ii) an order for the production of further documents, being documents on such extended matters.

4.Harris J made that direction as to scope, doing so by directing that Mr Tsang may be examined on (i) “the value and recoverability of any actual or contingent causes of action that may be available to [the Company]” and on (ii) “the assets of [the Company] under the control of Mr Tsang, his Wife or other persons or entities”.  But he refused to order Mr Tsang to produce the further documents sought by the Liquidators.  He was of the view that there are matters on which a person can be examined but cannot be ordered to produce documents.  While acknowledging that such a mismatch may be thought odd, he nevertheless considered it to be the law.  He felt driven to place a narrower construction on s 221(3), which spoke of producing documents “relating to the company”, than on s 221(1), which spoke of giving information “concerning the promotion, formation, trade, dealings, affairs, or property of the company”.  On that basis, he refused to order production of documents on the extended matters which he directed that the examination may include.

5.Dissatisfied with that refusal, the Liquidators appealed to the Court of Appeal.  That appeal was allowed so as to order Mr Tsang to the produce the documents which Harris J had refused to order him to produce.  By a judgment which Barma JA gave and with which Yuen and McWalters JJA agreed, the Court of Appeal held that the phrase “relating to the company” in s 221(3) was to be construed to include at least the matters set out in the longer phrase used in s 221(1).

6.That is the judgment against which Mr Tsang sought leave to appeal to the Court of Final Appeal.  He sought such leave both on the “question of law of great general or public importance” ground and on the “or otherwise” ground.

7.Of the five questions put forward on Mr Tsang’s behalf as questions of law of great general importance, the first four relate directly or indirectly to the construction of s 221. That section has been replaced by s 286B which renders the scope of documentary discovery essentially co-extensive with that of oral examination.

8.Normally, a question on the construction of statutory provision which has ceased to exist is hardly likely to amount a question of law of great general or public importance.  It might if there remain many cases which turn on that question of construction.  But neither side is aware of any other such case apart from one, it being a case arising out of this liquidation.

9.By the fifth question put forward on his behalf as a question of law of great general or public importance, Mr Tsang sought to take in the Court of Final Appeal a constitutional point which he had not taken below.  As was said in Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356 at para 39, where acceptance of a point would amount to a major development of the law, a party seeking to raise the point in the final appellate court without having taken it in the intermediate appellate court faces a hurdle even if the point does not depend on any issue of fact.  In the circumstances, Mr Tsang has not managed to overcome that hurdle.

10.For the foregoing reasons, it would not be appropriate to grant Mr Tsang leave to appeal on the “question of law of great general or public importance” ground.

11.Nor would it be appropriate to grant him leave to appeal on the “or otherwise” ground.  Whether on the “question of law of great general or public importance” ground or on the “or otherwise” ground, the granting of leave to appeal to the Court of Final Appeal is, as s 22(1)(b) of the Court’s statute expressly stipulates, discretionary. Since resolving questions of law of great general or public importance is the primary role of a court of last resort, the discretion to grant leave to appeal on the “or otherwise” ground is a residual discretion.  As such, it is not to be exercised lightly.

12.Even if the points put forward on Mr Tsang’s behalf can be considered arguable, they do not appear to be strong.

13.With a view to meeting the Liquidators’ reliance on CSAV Group (Hong Kong) Ltd v Jamshed Safdar (2007) 10 HKCFAR 629, it is said on Mr Tsang’s behalf that a “s 221 (or s 268B) order is only ‘interlocutory’ in the technical sense that it does not determine finally a given controversy of legal rights” and that “[i]t is not interlocutory in the usual sense of going to pure case management or determining matters of procedure or on what evidence a final determination is to take place.”  The problem with that argument advanced on Mr Tsang’s behalf is that the orders in the CASV case were orders for discovery of documents and an order for the production of documents is precisely what Mr Tsang seeks to have overturned on appeal to the Court of Final Appeal.  As was said at para 1 in the CSAV case, “[i]nterlocutory appeals to the final court on procedural issues such as discovery are - as they should be - rare and exceptional.”  That catches this leave application.  There is no warrant for an exercise of discretion to grant Mr Tsang the leave which he seeks.

14.Mr Tsang has not complied with the order for the production of documents.  Nor, indeed, has he complied with the order for oral examination.  As to the Liquidators’ stance on such non-compliance, it is contended on Mr Tsang’s behalf that the Liquidators are in effect seeking a Hadkinson order (meaning the form of order which takes its name from the case of Hadkinson v Hadkinson [1952] P 285). And, so the contention continues, the Liquidators are doing that without taking out a proper application for such order and without having demonstrated that the requirements for making such an order are met.  But all that the Liquidators are really submitting in this connection is that Mr Tsang’s non-compliance with the orders for oral examination and the production of documents militates strongly against an exercise of discretion to grant him leave to appeal.  That is a legitimate submission.  As it happens, however, the Liquidators have, for the foregoing reasons, defeated this leave application without having to rely on any such submission.

Mr Edward Alder and Mr Newton Mak, instructed by P. C. Woo & Co., for the Respondent (Applicant)

Mr Charles Manzoni, SC, instructed by Lipman Karas, for the Applicants (Respondents)