Malayan Banking Berhad, Singapore Branch v. Legend Six Holdings Ltd and Another

HCMP 2182/2019

[2020] HKCFI 990

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2182 OF 2019

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BETWEEN

Before: Deputy High Court Judge Hall-Jones in Chambers

Date of Hearing: 5 May 2020

Date of Decision: 28 May 2020

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D E C I S I O N

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1.This matter concerns the plaintiff’s application, made by Originating Summons dated 26 November 2019, for the following:

(1) Pre-action discovery against the 1^st respondent, Legend Six Holdings Limited (“Legend Six”); and

(2) Norwich Pharmacal and/or banker’s books orders for third party discovery against the 2^nd respondent, Bank of China (Hong Kong) Limited (“BOC”).

2.BOC has adopted a neutral position in relation to the relief sought against it and was excused from attending the substantive hearing.

A. FACTUAL BACKGROUND

3.In the plaintiff’s case, by a letter of offer (“LOA”) dated 10 May 2018, the plaintiff offered loan facilities to a Singapore company known as Inter-Pacific Petroleum Pte Ltd (“IPP”).  IPP is said to have been a purchaser of fuel oil, carrying on the business of bunker trading.

4.Clause 6 of the LOA stated that the purpose of the facilities was, among other things, for IPP’s trade financing in petroleum products. The LOA was secured by, inter alia, a personal guarantee dated 10 May 2018 given by Ms Cheung Lai Na, a Hong Kong resident (“Cheung”). 

5.Between June and August 2019, IPP applied for twelve letter of credit from the plaintiff (“the L/Cs”).  The beneficiaries of these L/C’s were two Singaporean companies, namely Citus Pte Ltd (“Citus”) and its subsidiary Citus Trading Pte Ltd (“CTPL”).

6.The plaintiff asserts that documents submitted by IPP with each L/C were along these lines:

(1) IPP represented to the plaintiff that it was purchasing fuel oil from Citus and/or CTPL, upon which IPP would on-sell the goods to other third parties including Mercuria Energy Trading Pte Ltd, Sinochem International (Singapore) Pte Ltd and PETCO Trading Labuan Company Ltd (“the Customers”);

(2) The above transactions were allegedly supported by sales contracts between IPP and Citus/CTPL, contracts between IPP and the Customers, and invoices issued for the transactions by IPP and Citus/CTPL. 

7.We then turn to Legend Six.  From the plaintiff's submissions, it is asserted that the goods supplied by Citus/CTPL to IPP were previously supplied by Legend Six.  In short, the fuel oil is said to have been sold from Legend Six, to Citus/CTPL, to IPP and then to the Customers.  

8.During the period June to August 2019, Citus/CTPL presented the L/Cs to the plaintiff for discounting. The applications for discount were evidently supported by bills of lading where:

(1) The shipper was Legend Six. The goods to be shipped were stated to be “RMG 380 CST” fuel oil;

(2) The port of loading for all shipments were Malaysian and the purported destination was Singapore;

(3) Each of the B/Ls was purportedly signed by the vessel’s master accompanied with the master’s chop.

9.The plaintiff then discounted the L/Cs on a full recourse basis and credited the relevant funds to Citus and CTPL’s USD bank accounts with the plaintiff.  Thereafter, Citus/CTPL gave instructions to the plaintiff to transfer the funds (less certain amounts) to Legend Six’s account with BOC. 

10.However, in the plaintiff’s case, this raft of purported transactions turns out to have been a fraud.  In August 2019, the plaintiff’s Singapore solicitors wrote to the Customers, reminding them to make payment for invoices issued by IPP (and which had been assigned to the plaintiff by way of a deed of charge dated 23 April 2014).

11.No doubt to the consternation of the plaintiff, each of the Customers denied that they had signed any contracts at all with IPP for the purported transactions. On this basis, they each denied liability to make the requested payments.

12.Upon separate inquiry, ten of the ship owners of the relevant vessels stated that none of the purported shipments had in fact taken place and that the bills of lading were all forged.

13.The plaintiff describes this state of affairs as “a classic letters of credit fraud”, perpetrated against the plaintiff.  The plaintiff maintains that IPP, Cheung, Citus, CTPL, Legend Six and potentially others, were parties to this fraud.  Specifically, the plaintiff asserts that:

(1) Legend Six entered into fraudulent sales contracts with Citus or CTPL, in that there were no underlying sales of oil cargoes by Legend Six to Citus or CTPL;

(2) In turn, Citus or CTPL entered into fraudulent sales contracts with IPP, again with no underlying sales of oil cargoes;

(3) IPP applied for the twelve L/Cs from the plaintiff on the basis of “fictitious” sales of oil cargoes using forged documents, and Citus or CTPL applied to the plaintiff for discounting of the L/Cs using forged bills of lading, when there had been no actual loading of the oil cargoes onto the vessels in question;

(4) The plaintiff discounted the L/Cs and credited the relevant funds to Citus and CTPLs’ accounts, which funds were then transferred to the Legend Six BOC Account;

(5) Further, on 20 August 2019, shortly after L/C’s in this case were presented to the plaintiff and funds were transferred by the plaintiff to Legend Six, IPP applied to the High Court of Singapore for appointment of judicial managers. A formal order for judicial management was made by the Singapore courts on 4 September 2019.

14.The plaintiff also asserts that IPP, Legend Six and Cheung (amongst others) have defrauded another bank, Société Générale, Singapore Branch (“SocGen”), in a similar way.  I was referred in this regard to the ongoing proceedings in HCA 1617/2019 (see Société Générale, Singapore Branch v Inter-Pacific Group Ltd & Ors [2019] HKCFI 2405, [2019] HKCFI 2947) (“the SocGen Proceedings”).  I shall return to these proceedings in more detail below. 

15.Mr Dawes SC, appearing for the plaintiff, states that the plaintiff intends to bring an action in the Hong Kong High Court against Legend Six, IPP, Cheung, Citus and CTPL and potentially others (together the “Intended Defendants”) to recover the sum of US$ 66,323,521.65, being the sum said to be due and owing under the facilities granted by the plaintiff and/or as a result of the fraud described above.  The present applications are made to support such an action.    

16.For clarity, I mention here that dollar amounts referred to in this decision are references to United States dollars, unless otherwise stated.

17.At this stage, Legend Six has elected to remain largely silent as to these allegations, save to say that its sole director and shareholder, Mr Chen Chun John (“Chen”) asserts that he has no knowledge of the alleged transactions or fraud, nor any knowledge of the SocGen Proceedings.  Legend Six also submits that not all of the L/C payments went to Legend Six.        

B. OVERVIEW OF MATTERS ADDRESSED

18.I shall address the arguments of the parties in sections, as follows: overview of the SocGen Proceedings (section C); pre-action discovery against Legend Six (section D); Norwich Pharmacal and banker’s books orders against BOC (section E); defence of privilege against self-incrimination (section F); and decision and costs (section G).

C. THE SOCGEN PROCEEDINGS

19.The parties in these proceedings have referred to the ongoing SocGen Proceedings, referring me in particular to two decisions therein dated 20 September and 5 December 2019.  I have reviewed these decisions and comment briefly upon them below.

20.The facts recited in the first decision, from the K Yeung J, bear some striking similarities to the present case. In both cases, there is a bank seeking to recover sums said to have been fraudulently transferred in the context of allegedly fraudulent letters of credit. There is a significant commonality of protagonists in the alleged frauds, namely IPP, Cheung, Legend Six and Chen. And the alleged fraudulent transfers occurred over a similar period, in mid-2019.  

21.The first decision recites that SocGen, as the plaintiff in those proceedings had obtained Mareva injunctive relief as well as discovery orders. These included a banker’s books order pursuant to section 21 of the Evidence Ordinance against the Bank of China. This was in respect of the Bank of China account of the 6^th Defendant in the SocGen Proceedings, namely Legend Six.  It is not apparent from the first decision whether the applications for discovery and banker’s books orders were contested – and if they were, on what grounds.

22.My understanding from Counsel in the present case is that the funds frozen in the SocGen Proceedings may include funds that are the subject of the present proceedings. 

23.A further feature of the first decision in the SocGen Proceedings, of which I have taken note, is that substantial sums appear to have been transferred by Legend Six to other parties shortly after the alleged fraud in that case. These include a transfer of $44.85 million to the 10^th defendant in those proceedings, $24.96 million to the 8th defendant, $6.65 million to 9^th defendant and $3.05 million to the third defendant. With that knowledge, SocGen sought and obtained further Mareva injunctive relief against the 8^th to 10^th defendants.

24.I would pause further to note paragraph 7 from the first decision which states that “the evidence demonstrates a deliberate fraud on the plaintiff with forged documents over a protracted period of time”. Those observations were commented upon and adopted in the second decision in the SocGen Proceedings.

D. PRE-ACTION DISCOVERY AGAINST LEGEND SIX

Legal principles

25.The parties in this case each referred me to the decision of G Lam J in Zhang Shouen v Standard Chartered Bank (Hong Kong) Limited (unrep., HCMP 682/2015, 15 October 2015, at §21) for a summary of the relevant principles for pre-action discovery, namely that:

“(1) The applicant appears to be likely to be a party to subsequent proceedings in the court in which a claim is likely to be made. To satisfy the requirement that a claim is likely to be made, the applicant must show that a claim ‘may’ or ‘may well’ be made if discovery is granted. In this regard, it matters not that the action may depend on the result of the discovery, as long as the claim is reasonable and far from irresponsible or speculative: See Hong Kong Civil Procedure (2020) §24/7A/5.

(2) The respondent appears likely to be a party to such proceedings.

(3) The respondent appears likely to have or to have had in his possession custody or power the document requested.

(4) The requested document is “directly relevant” to an issue arising or likely to arise out of that claim. “Direct relevance” is shown only if:

(a) the document would be likely to be relied on in evidence by any party in the proceedings. ‘Likely’ has the same meaning as ‘may well’ or ‘reasonable prospect’; or

(b) the document supports or adversely affects any party’s case. The applicant can be reasonably expected to prove this on a balance of probabilities.

(5) The applicant must satisfy the court that the order for pre-action discovery is necessary either for disposing fairly of the cause or matter or for saving costs. “

26.Mr Dawes made two further submissions as to guiding principles, namely, that:

(1) The court has the power to order disclosure of a “class of documents” provided it is shown that all documents in the class meet the jurisdictional requirements, including in particular, the test of direct relevance.  See Zhang Shouen (§24);

(2) In cases where allegations of fraud are being mounted, and there is a reasonable basis for such allegations, the court recognises that the task of making good the claim would be fraught with difficulties which may not be overcome without pre-action disclosure.  As such, “a degree of inquiry” should be permitted to the prospective plaintiff.  This proposition is drawn from the decision of Zervos J in VTB DC LLC v Top Fuel Corporation Ltd (unrep., HCMP 1543/2013, 16 April 2014) (§41).

The parties’ submissions

27.The plaintiff says that tests set out in Zhang Shouen are met, namely:

(1) The plaintiff is likely to be a party in subsequent proceedings;

(2) Legend Six appears likely to be a party to those proceedings;

(3) It is likely that Legend Six has or has had in its possession, custody or power the documents requested, ie the requested Legend Six contracts, bank statements, records of remittances etc;

(4) The requested documents are directly relevant to issues arising or likely to arise out of the intended claim.  In this respect, Mr Dawes submits that the plaintiff intends to bring claims in constructive trust, knowing receipt, dishonest assistance, unlawful means, conspiracy and/or conspiracy to injure. Mr Dawes says that it is readily apparent that the requested documents are directly relevant to properly plead and pursue such claims;

(5) And finally, the requested pre-action discovery is necessary either for disposing fairly of the cause or matter or for saving costs. Here, Mr Dawes submits, as already noted, that the requested documents are necessary in order for a properly particularised claim against the Intended Defendants to be pleaded. There is no other avenue open to the plaintiff at this juncture to obtain the requested documents. Further, Mr Dawes notes that the plaintiff wishes to take care in making allegations of fraud and that such allegations should only be pleaded when there is sufficient evidence i.e., the plaintiff wishes to properly particularise proposed claims where those claims are founded upon allegations of fraud. Additionally, the plaintiff says that it would be hindered in its ability to recover funds if it has to wait until discovery and that costs will be wasted if additional parties are identified and added partway through the proceedings, with amendments to pleadings.

28.Mr Man, appearing for Legend Six, asserts that it is incumbent upon the plaintiff seeking pre-action discovery in these proceedings to show, not only that discovery of the document in question is necessary, but that discovery of the documents before commencement of the action is necessary. For this proposition, Mr Man relies upon Zhang Shouen (supra) at §33.

29.In this respect, Mr Man submits as follows:

(1) It is said to be evident from the plaintiff’s own affidavit evidence that it already has sufficient information to plead its claims and that as such, no further discovery is necessary before commencement of the action;

(2) While it may be accepted that pleading fraud entails more stringent requirements, a plaintiff is allowed to proceed with a case of fraud even if his case is only augmented after discovery (Deak Perera Far East Ltd v Deak & Ors [1995] 2 HKC 28, at 38B-D). And while it is often said that “fraud may only be pleaded when there is sufficient evidence”, Mr Man submits this should be understood to mean only that fraud cannot and should not be pleaded unless the pleader has clear instructions to plead fraud and he has before him reasonably credible material which, as it stands, establishes a prima facie case of fraud (see Hui Yin San v Tsoi Ping Kwan [2010] 1 HKC 585, at §15).

30.On these bases, Mr Man submits that pre-action discovery is plainly not necessary at this juncture. 

31.Mr Man also asserts that the pre-action discovery sought by the plaintiff is unjustifiably wide and extensive.  It is said to be unreasonable that the proposed order should relate to all bank accounts rather than just the Legend Six bank account at BOC. There is nothing to support discovery beyond the BOC account (noting of course the general principle that bank accounts are confidential). Equally, Mr Man asserts that there is no justification to pursue records of remittances to any and all entities. It is said to be unreasonable to request Legend Six to provide records of remittances from any of its bank accounts to any other entities i.e. entities other than the “Specified Entities” named in the originating summons. Mr Man’s third submission as to the requested relief being too extensive is that there is no basis for a freezing order to be sought beyond 30 August 2019 since Legend Six cannot in any event operate its bank accounts after that date (due to the existing Mareva injunction in the SocGen Proceedings).

Discussion

32.I will apply the decision of G Lam J in the Zhang Shouen case.  In addition, I believe that it is appropriate for this Court, on the facts of this case, to take on board the observations of Zervos J in VTB DC LLC v Top Fuel Corporation Ltd, to the effect in hearing the present application, a degree of enquiry should be permitted to the plaintiff provided of course that they have shown a reasonable basis for the allegations made against Legend Six.

33.The application of the fivefold test laid out in Zhang Shouen appears straightforward:

(1) The plaintiff herein is likely to be a party in upcoming proceedings and given the facts, the likelihood of those proceedings being commenced is surely high;

(2) Given the facts outlined above, it should be equally apparent that Legend Six is likely to be a party to those proceedings;

(3) Legend Six appears likely to have or to have had in its possession, custody or power the documents requested. This is not really in contention;

(4) Nor did I comprehend a serious challenge to Mr Dawes’ assertion that the requested documents are “directly relevant” to issues arising or likely to arise out of the upcoming proceedings;

(5) We must then determine whether the pre-action discovery as sought is necessary either for fairly disposing of the cause or matter or for saving costs. On this question, I accept Mr Dawes’ submission that the requested documents are necessary for the plaintiff to identify prospective defendants and to fully and properly plead its case against each of those defendants. It can be observed in the SocGen Proceedings that obtaining important documents partway through proceedings of this type can lead to parties being added to the proceedings midway through. The plaintiff in this case seeks the requested documents so that it can “set out its stall” properly in its first pleading. I believe that proceeding in this manner is necessary, particularly given the allegations as to fraud.  It is also a more efficient course and this, in itself, is likely to save costs.

34.In principle then, the conditions for exercising this Court’s power to order pre-action discovery against Legend Six are met.

35.That being so, I turn to examine Mr Man’s contention that for pre-action discovery to be ordered, the requested discovery should not merely be necessary but rather, necessary before commencement of the action. The focus of Mr Man’s challenge at this point are the assertions that: (i) the matters already rehearsed by the plaintiff in these proceedings are enough to file a pleading if the plaintiff wishes to do so; (ii) following Deak Perera, the plaintiff can always supplement its case after discovery; and (iii) in  any event, all that the plaintiff really requires at this point is clear instructions to plead fraud, supported by reasonable credible material which, as it stands, establishes a prime facie case of fraud.

36.On balance, and for the similar reasons as outlined above (at §33(5)), I am not persuaded by these arguments. It seems to me that the documents requested from Legend Six are limited in scope and central to a case that the plaintiff would plead and particularise against that party – and to identify and plead cases against potential additional defendants. It has already seen from the SocGen Proceedings that the result of “later” discovery may lead to parties being added partway through an action, with resulting inefficiencies and unnecessary costs.  I would add that pre-action discovery in these proceedings would also put the plaintiff on a more similar footing to the plaintiff in the SocGen Proceedings.

37.For these reasons, I am satisfied that discovery of the requested documents before commencement of the action, is necessary.

38.It remains then, to address the submissions of Legend Six that the requested pre-action discovery is unjustifiably wide and extensive. Having considered the submissions of Legend Six on this question, I have determined as follows:

(1) The complaint that it is unreasonable that the proposed order against Legend Six should relate to all bank accounts rather than just the Legend Six bank account at BOC has no merit. Given the allegations of fraud that have been made - and noting also that additional parties were added to the SocGen Proceedings after discovery, it is reasonable (and perhaps unsurprising) that the plaintiff should request a broad range of Legend Six statements etc, to allow it to trace the monies received from the alleged fraud, including potentially tracing them through Legend Six’s own accounts.  It is argued that there is nothing to support discovery being given that goes beyond Legend Six’s BOC account.  But given the nature of the allegations made in these proceedings (and in the SocGen Proceedings), it is entirely reasonable in my view for the plaintiff to enquire beyond the BOC account;

(2) The suggestion that pre-action discovery should be limited only to the “Specified Entities” as defined in paragraph 6 of the originating summons is also rejected. Given that the plaintiff’s request for discovery is directed towards tracing monies alleged to have been lost due to fraud, it is reasonable for any order to be broad enough to cover all potential receiving parties rather than just the parties believed by the plaintiff, as of today, to have been involved in the alleged fraud; 

(3) Legend Six say that there is no basis or need for extending any pre-action discovery beyond 30 August 2019, this being the date from which Legend Six could no longer operate its accounts due to the Mareva injunction in the SocGen Proceedings.  I do not believe that it is necessary to limit an order for pre-action discovery so that it terminates on this date. There will presumably be few (if any) transactions on Legend Six’s accounts beyond this date so complying with an order as currently drafted would not be onerous.

39.I am satisfied that that pre-action discovery against Legend Six, in the terms sought, is appropriate, subject to PSI arguments as addressed below.  

E. NORWICH PHARMACAL AND BANKER’S BOOKS ORDERS AGAINST BOC

Legal principles 

40.As regards BOC, the discovery orders sought by the plaintiff are framed as a Norwich Pharmacal application, alternatively a banker’s books application pursuant to section 21 of the Evidence Ordinance (Cap.8).

41.As to the Norwich Pharmacal application, Mr Dawes referred me to the decision of Ma J (as he then was) in A Co v B Co [2002] 3 HKLRD 111, at §13).  Mr Dawes, in his written submissions, summarised the position as follows:

(1) There must be cogent and compelling evidence to demonstrate that serious tortious or wrongful activities have taken place. And where fraud or similar serious allegations are made, the degree of proof must correspondingly be high.

(2) It must be clearly demonstrated that the order will or will very likely reap substantial and worthwhile benefits for the plaintiff. Where, as in the present case, the plaintiff is likely to make a tracing claim, there must be a serious possibility that the discovery sought must either allow the plaintiff to preserve what may well be his assets or realistically lead to the discovery of such assets.

(3) The discovery sought must not be unduly wide.  It must be specific, and restricted to those or those classes of documents that are necessary to enable the plaintiff to preserve or discover assets.  What is important is that the discovery, whether wide or narrow, is necessary.

Parties’ submissions

42.Mr Dawes submits that the matters to be considered, as set out in A Co v B Co are satisfied, namely:

(1) There is ample evidence of fraud perpetrated by the Intended Defendants against the plaintiff.  This evidence is said to be unchallenged;

(2) The disclosure is likely to reap substantial and worthwhile benefits to the plaintiff, namely; (i) there is clear evidence that the plaintiff’s funds had been transferred into the Legend Six BOC Account.  There is also basis to infer that Legend Six is a conduit for fraudulent funds.  Thus, Mr Dawes maintains that there is a clear nexus between the bank accounts to be disclosed and the misappropriated funds (in this regard, Mr Dawes refers to Yaron Brown v Lexinta Ltd [2018] HKCFI 2302, at §20-21); (ii) therefore, the particulars of remittances from bank accounts maintained by Legend Six with BOC will allow the plaintiff to ascertain and trace the funds paid pursuant to the allegedly fictitious transactions, as well as to identify and commence proceedings against relevant recipients; (iii) additionally, there is a clear nexus between the Legend Six BOC Account and other accounts maintained by Legend Six with BOC. In the plaintiff’s submission, there is “every possibility” of inter-account transfer of the subject funds, which on the plaintiff’s case, would provide further evidence of fraud; and (iv)   notwithstanding that some time has passed since the time of the alleged fraud, the application would still have real prospect of locating the proceeds of fraud. The plaintiff relies upon the existing Mareva injunction in the SocGen proceedings in this regard;

(3) Next, Mr Dawes submits that the information and documents sought in the originating summons are well defined. Here, Mr Dawes invites the Court to allow some degree of flexibility in the scope of disclosure, since the plaintiff does not know when, where or how the relevant funds may have been dissipated by Legend Six. Mr Dawes also asserts that it is not uncommon for disclosure to be ordered for all documents of all accounts held by a defendant with a relevant bank over a specific period. He submitted that the scope of the present application is narrower than that in A Co v B Co (in that case, the defendants were ordered to disclose all documents in relation to all accounts held with the relevant banks and the flow of funds into and out of such accounts from the material time until the date of compliance with the order (A Co v B Co, at §7).

43.As to the relief sought against BOC, Mr Man’s submissions were directed towards the third limb of the test laid out in A Co v B Co.  Here, Mr Man repeated his prior submissions to the effect that the Norwich Pharmacal and banker’s books relief as sought by the plaintiff is unjustifiably wide and extensive (§31 herein). 

Discussion

44.Given the facts as set out in section A herein, I am satisfied that on the facts of this case there is cogent and compelling evidence of fraud. It is also noted that K Yeung J reached a similar conclusion in the SocGen Proceedings, which, as explained, bear some similar hallmarks to the present matter. Accordingly, I am satisfied that the first limb of the test set out in A Co v B Co is satisfied.

45.I am equally satisfied that the second limb of the test set out in A Co v B Co is met.  I accept the submissions of Mr Dawes in this regard noting in particular that the Mareva injunction in the SocGen Proceedings may have had the effect of freezing the same accounts which are of interest to the plaintiff in the present action. In these circumstances, it appears that a tracing claim, as foreshadowed by the plaintiff, gives rise to a serious possibility that the plaintiff may identify, preserve and recover its assets. The additional parties added to the SocGen Proceedings (§23 herein) suggest that the plaintiff’s expectations may not be in vain.

46.As to the third limb of the test laid out in A Co v B Co, Mr Man maintains that the pre-action discovery sought by the plaintiff is unjustifiably wide and extensive. I have rejected these arguments in relation to Legend Six and I respectfully reject these arguments equally as regards BOC.

47.Thus, my finding is that the Norwich Pharmacal and banker’s books order against BOC, in the terms sought, are appropriate, subject again to PSI arguments as addressed below.  

F. DEFENCE OF PRIVILEGE AGAINST SELF-INCRIMINATION

48.The main thrust of the submissions of Legend Six is based on the principle of there being a privilege against self-incrimination (“PSI”).  This is said to operate both as a matter of common law privilege (as buttressed by section 65 of the Evidence Ordinance) and also by the operation of Hong Kong’s Basic Law and the Hong Kong Bill of Rights Ordinance (Cap. 383).

49.The parties’ submissions regarding PSI are rather different from one another and need to be set out in some detail.

Plaintiff’s written submissions 

50.As the potential application of PSI had been aired in an earlier round of written submissions, the plaintiff went onto the “front foot” on Legend Six’s claim to PSI.  Mr Dawes begins with the decision of Ribeiro J in the Court of Final Appeal in HKSAR v Lee Ming Tee (2001) 4 HKCFAR 133. From that case, there is this passage (at 177E-G):

“…it is important to bear in mind that the purpose of the privilege is to respect the will of the accused to remain silent, thereby ensuring that the accused is not compelled to provide proof of his or her guilt. The privilege has no application to evidence which exists independently of the will of the accused. This proposition was expressly recognised in Saunders v United Kingdom (1996) 23 EHRR 313 at para 69. Indeed, in my judgment, there is much to be said for the general proposition that there is no inherent unfairness in establishing a person’s guilt by the use of reliable objective evidence obtained from an independent source, even if the acquisition of that evidence was facilitated by clues contained in the excluded admissions...”.

51.Mr Dawes’ submission is that as a matter of binding authority in Hong Kong, there is a clear distinction between materials on the one hand which had an independent existence irrespective of the questioning or the use of compulsory powers materials on the other hand, which have come into existence as a result of compulsion.

52.Mr Dawes referred to several subsequent decisions which, in his submission, demonstrate that PSI cannot be asserted in relation to pre-existing documents. These decisions were: Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170; SJ v FTCW [2014] 1 HKLRD 849; Pacific Harbor Advisors Pte Ltd v Winson Federal Ltd (unrep., CACV 115/2016, 22 June 2016); and Anite Telecoms Limited v World Best Cargo-Link Company Limited (unrep., HCA 2560/2013, 19 October 2015).

53.Mr Dawes puts the plaintiff’s case in this way. He says that PSI is concerned with the revulsion against compelling a person to make incriminating statements. PSI discourages the ill-treatment of a suspect and it equally discourages the production of dubious confessions (AT&T Istel v Tully [1993] AC 45 (at 53B). In the plaintiff’s case none of this applies in cases such as the present one, when a party is simply required to disclose documents that exist prior to, and independently of, the proposed disclosure order.

54.The plaintiff submits that the documents it seeks are clearly identified, that they are all pre-existing real evidence which came into existence independently of any compulsion to make disclosure and that the evidential value of the requested documents turns on what those documents say for themselves - and not on what Legend Six is now compelled to say.

55.In Mr Dawes’ submission, there is a separate point to be made as to why PSI is not engaged as regards BOC. It is simply this - Legend Six is not entitled to oppose the application against BOC on the ground that the documents sought as against BOC would be incriminating against Legend Six itself. In this regard, Mr Dawes relies upon the decision of DHCJ K Yeung (as he then was) in Tiger Asia Resort Limited v Kazuo Okada [2018] HKCFI 472. The plaintiff says that this decision held that PSI was not engaged in the inspection of banker’s records in relation to accounts held by the defendant’s. See the following passage from the Tiger Asia decision (§26):

“It is not the defendants who are being compelled to disclose any incriminatory material. The bankers’ records exist independently of their will. ‘The privilege is not a privilege against incrimination; it is a privilege against self-incrimination’.” [emphasis in original]

56.The passage from the foregoing paragraph cited in speech marks is from the decision in Controlled Consultants Pty Ltd v Commissioner for Corporate Affairs (1985) 156 CLR 385, 393.

57.Even aside from the principles laid out above, the plaintiff maintains that Legend Six has failed to show that PSI is engaged at all on the evidence that is before this Court. Here, the plaintiff relies upon the following principles:

(1) PSI is only engaged if it exposes a party to a real and appreciable risk of incrimination or a risk of prosecution. The Court must see, from the circumstances of the case and the nature of the evidence, which the witness is called to give, that there are reasonable grounds to apprehend danger to the witness from his being called to answer (see R v Boyes (1861) 1 B&S 311, at 330, per Cockburn CJ);

(2) PSI must be claimed on oath by the party asserting it on his own behalf. However, the mere fact that a party swears that his answer would incriminate him is not conclusive or sufficient (see Istel Ltd v Tully (supra) at 67H-68B per Lord Lowry);

(3) It is not enough for the party invoking PSI to establish that he is facing a real risk of prosecution of a particular offence. He must go further and establish that requiring him to provide disclosure has a tendency to expose him to a criminal charge (see China Shanshui Cement Group Ltd v Zhang Caikui [2017] 2 HKLRD 719, §8 per Queeny Au-Yeung J);  

(4) In deciding whether a claim for PSI should be upheld, the Court has to examine whether there is a “clear link” between the information sought and the offence (see China Shanshui §9).

58.In the plaintiff’s case, Legend Six fails at these hurdles:

(1) There is no basis at all to conclude that there is a real and appreciable risk of incrimination of Legend Six. Its affidavit evidence is silent on this question. Further, there is no evidence of any charges brought against Legend Six, still less any searches or investigations conducted by the police. The plaintiff says that the relevant charge is important in order to properly assess the risk of incrimination. As an example, section 33 of the Theft Ordinance (Cap. 210) has abrogated PSI for offences thereunder. In the present case, without the necessary evidence, the plaintiff says that any assertion of PSI simply begs the questions - what proceedings, proceedings for what offence? The plaintiff further asserts that the dearth of evidence from Legend Six means that it is not possible to draw any link between the documents sought by the plaintiff with any criminal offences;

(2) In fact, the plaintiff says that all of the pointers in this case militate against there being any real risk of prosecution. SocGen have already obtained banker’s books orders against BOC in the ongoing SocGen Proceedings and the ongoing developments in those proceedings does not suggest risks for Legend Six of the type contended for by them.

(3) Finally, the plaintiff submits that in the Court’s assessment of the risk of prosecution, any risk of incrimination of Chen ought not be taken into consideration. This is on the basis that privilege claimed by a company against materials being sought against it is personal to the company and “not descendible”. The risk of incrimination of the directors should not be taken into account. Mr Dawes referred the Court in this regard to the decision of Recorder McCoy SC in Salt & Light Development Inc [2006] 2 HKLRD 279, at §§78-81. 

R1’s written submissions

59.Mr Man’s submissions on PSI begins, not with the decision of Hong Kong’s Court of Final Appeal in the Lee Ming Tee case (supra) but rather, with the proposition from the textbook “Hollander: Documentary Evidence in Hong Kong” (1^st edition 2015) (§§19-001 and 19-006) that “PSI is a common law privilege, buttressed by section 65 of the Evidence Ordinance (Cap.8)”. 

60.From these two sources, it is said that it should be undisputed that the common law privilege not merely enables a witness to refuse to answer in court, but also to refuse to produce documents or answer interrogatories whether at trial or before trial in civil proceedings.

61.In Mr Man’s submission, there are a number of English authorities to support this proposition. These include the House of Lords’ decision in Rank Film Ltd v Video Information Centre [1982] AC 380; the Court of Appeal decision in Waterhouse v Barker [1924] 2 KB 758; the House of Lords decision in Rio Tino Zinc Corpn v Westinghouse Electric Corpn [1978] AC 547; the Court of Appeal decision in Sociedade Nacional de Combustiveis de Angola UEE v Lundqvist [1991] 2 QB 310 and the decision of Kensington International Limited v Republic of the Congo [2007] EWHC 1632.

62.Aside from what Mr Man asserts as to the common law, he submits further that PSI is also an integral part of a right to a fair trial under article 10 of the Hong Kong Bill of Rights (see section 8 of the Hong Kong Bill of Rights Ordinance (Cap. 383)).

63.Mr Man then addresses the requirement that for PSI to apply, the documents in question must expose the party to a risk of self-incrimination. In this regard and relying upon the decision of Gross J in Kensington International (supra), Mr Man says that:

(1) There must be grounds to apprehend the danger and those grounds must be reasonable, rather than fanciful;

(2) But the relevant risk does not need to be as high as one of conviction;

(3) It is not simply the risk of prosecution. The party is entitled to claim the privilege in relation to any piece of information or evidence on which the prosecution might (i) wish to rely on in establishing guilt; (ii) wish to rely in making its decision whether to prosecute or not.

64.Applying the principles from Kensington International, Mr Man asserts that it is “blatantly obvious” that the documents sought by the plaintiff would expose Legend Six to a risk of incriminating itself for the common law offence of conspiracy to defraud in Hong Kong. It is said that this can readily be seen from a review of the plaintiff’s evidence and of the plaintiff’s skeleton arguments.  Mr Man submits that:

(1) Chen for Legend Six has deposed his apprehension;

(2) The correct test from the authorities is not whether there are existing charges or investigations;

(3) While PSI is abrogated for offences under section 33 of the Theft Ordinance (Cap.210), it is not abrogated for the common law offence of conspiracy to defraud, said to be the most likely charge against Legend Six;

(4) As to the plaintiff’s assertion that SocGen has previously obtained a banker’s books order in respect of Legend Six’s BOC account – and that such order has been complied with by BOC - Mr Man submits that it is unclear as to whether that order has, in fact, been complied with. Mr Man urged this Court not to simply assume that the banker’s books orders in the ongoing SocGen Proceedings have been complied with.

65.Mr Man then turned his attention towards refuting the plaintiff’s proposition that PSI cannot be asserted in relation to pre-existing documents or materials. He says that this can be done both at common law and by reliance upon the Hong Kong Bill of Rights.  While I shall return to this part of Mr Man’s submissions below, the gist of Mr Man’s submissions on this point can be briefly summarised in this way:

(1) As to common law: (i) the English cases relied upon by Mr Man dealt with existing documents; (ii) relying upon Volaw Trust and Corporate Services Ltd v Office of the Comptroller of Taxes [2019] UKPC 29, it is clear that PSI has been extended to the production of documents at the pre-trial stage; (iii) drawing a distinction on production of pre-existing evidence would be inconsistent with the plain wording of section 65 of the Evidence Ordinance; (iv) any inroads into PSI are a matter for the legislature; (v) Mr Man then set about demonstrating to this Court that upon a careful analysis, the Hong Kong cases relied upon by the plaintiff are not what they seem.  An important plank in Mr Man’s argument at this juncture is the assertion (drawn from the minority decision of Lawrence Collins LJ in C plc v P [2008] Ch 1) that production of documents pursuant to a “testimonial obligation” (in this case, Legend Six having to verify the existence of documents by affirmation) is within the scope of PSI;

(2) As to the Bill of Rights, Mr Man again refers to article 10 of the Bill of Rights and to its European equivalent[1]. For the European position, Mr Man refers again to the Volaw Trust case (supra), said to be authority for the following propositions: (i) since the right to a fair trial is unqualified, a determination of whether there has been a violation of the applicable EU article involves an assessment of the fairness of the proceedings as a whole; (ii) the proposition that PSI is not engaged by compulsion to produce pre-existing documents is too categorically stated and that a more nuanced approach must be adopted; (iii) PSI has two purposes, avoiding miscarriages of justice and protecting suspects against improper compulsion; (iv) in assessing potential violations of the right to PSI, one must look at the nature and degree of compulsion to obtain evidence, the weight of public interest in the investigation, the existence of safeguards and the use to which any material so obtained may be put. Put briefly, Mr Man’s position is that a proper application of these propositions means that compelling Legend Six to disclose the requested documents would violate article 10 of the Bill of Rights.

PSI discussion

(i) Applicable law

66.As can be seen, Counsel for the parties in this matter propose altogether different starting points for the PSI enquiry. Mr Dawes contends that one must begin with the decision of the Hong Kong Court of Final Appeal in HKSAR v Lee Ming Tee (supra).  Mr Man says that we should begin with the proposition that the common law enables a witness to refuse to answer in court and also to refuse to produce documents or answer interrogatories whether at trial or before trial in civil proceedings. This is said to arise from section 65 of the Evidence Ordinance (Cap. 8).  Mr Man submits that the common law approach is best illustrated in the House of Lords decision in Rank Film Ltd v Video Information Centre (supra).

67.I believe that it is clear indeed that the starting point for an analysis of PSI in Hong Kong must be the Lee Ming Tee case. That decision is binding on this Court.

68.While Mr Dawes cites what is perhaps the key passage from the decision of Ribeiro PJ in Lee Ming Tee (§50 herein), below is a more extensive extract from the decision, to give fuller context:

“Corporate fraud is today a matter of major concern which calls for strong regulation of the kind found in ss 142 to 152F of the Ordinance, particularly s 145(3A). Moreover, those who hold corporate office and are engaged in corporate activities, especially activities which impinge upon the public, are well aware of the existence of the legislative regulatory régime and that compliance with its provisions is a necessary condition of participation in those activities.

No one could seriously argue that it is wrong or unfair for the legislature to empower an inspector to investigate the facts where circumstances suggest that a company's affairs may be conducted with intent to defraud others. As discussed above, where the investigation confirms such fears, the public interest in protecting the public from fraud strongly suggests in principle that the product of the investigation should be made available to the appropriate public authorities. Balancing against that public interest the important countervailing public interest in an accused being assured of a fair trial, the solution adopted by s 145(3A) appears to be entirely acceptable and consistent with the purposes of articles 10 and 11(1). The Legislature has struck a balance which allows the Inspector to abrogate the privilege but subjects the elicited evidence to a direct use prohibition, inferentially permitting derivative use.

In evaluating this balance, it is important to bear in mind that the purpose of the privilege is to respect the will of the accused to remain silent, thereby ensuring that the accused is not compelled to provide proof of his or her guilt. The privilege has no application to evidence which exists independently of the will of the accused. This proposition was expressly recognised in Saunders v United Kingdom at para 69. Indeed, in my judgment, there is much to be said for the general proposition that there is no inherent unfairness in establishing a person's guilt by the use of reliable objective evidence obtained from an independent source, even if the acquisition of that evidence was facilitated by clues contained in the excluded admissions. This view accords with common law doctrine based on Rex v Warickshall and the cases approving it, cited above.

Taken in the foregoing context and also in the context of our trial procedures as a whole (including the court's residual discretion to exclude evidence to secure the fairness of the trial), the absence of a derivative use immunity does not mean that an accused will not receive a fair trial. Nor does it undermine the presumption of innocence.”

69.As noted by Mr Dawes, this decision has been applied subsequently in a number of Hong Kong decisions including:

(1) In the Court of Appeal decision in Koon Wing Yee v Insider Dealing Tribunal (supra), Sir Anthony Mason NPJ applied Lee Ming Tee and observed (at §81) that PSI “does not extend to evidence compulsorily obtained which exists independently of the will of the accused. But it does cover compulsorily obtained answers, if objected to, because the answers are obtained against the will of the accused”;

(2) In the Court of Appeal decision in Secretary for Justice v FTCW (supra), where Lam VP (at §52) stated “In C Plc v P [2008] Ch 1, independent evidence was held by Peter Smith J to mean evidence that came into existence independently of (and usually prior to) any compulsory questioning of the defendant or any application of the court’s discovery process”;  

(3) In a third Court of Appeal decision in Pacific Harbor Advisors Pte Ltd v Winson Federal Ltd (supra), where Lam VP said as follows: “PSI does not protect a person from being required to produce documents which have existence independent of the person claiming the privilege, see HKSAR v Lee Ming Tee [and] Saunders v United Kingdom (1997) 23 EHRR 313.  Thus, an examinee under [RHC] Order 48 can be required to produce documents shedding light on his assets and financial situation even if he claims PSI”;

(4) There is also a prior decision of this Court on the question of PSI in Hong Kong, namely the decision of B Chu J in Anite Telecoms Limited v World Best Cargo-Link Company Limited (supra). This decision contains a helpful summary of the applicable PSI cases including a review of the majority and minority decisions of the English Court of Appeal in C Plc v P (supra), Secretary for Justice v FTCW (supra) and Lee Ming Tee.  Having reviewed the authorities, the learned it judge in Anite was satisfied that the Hong Kong authorities on PSI are “quite clear”.  She accepted and applied the principle that the bank documents in question should be disclosed since they existed independently of the disclosure order in question.

70.Thus, it seems clear that in Hong Kong a person can be required to produce documents which have an existence which is independent of the person claiming the privilege.  The question in the present case therefore is directed to what the requested documents say for themselves, not what Legend Six might be compelled to say about those documents.

71.I would add one further reference from a case cited by Mr Dawes namely, the decision of Lord Templeman in AT&T Istel Ltd v Tully (supra), at 53B-D.  It is in these terms:

“This is a powerful reason for the existence of the privilege against self-incrimination in certain circumstances. Indeed, in my opinion, the privilege can only be justified on two grounds, first that it discourages the ill-treatment of a suspect and secondly that it discourages the production of dubious confessions… I regard the privilege against self-incrimination exercise of oil in civil proceedings as an archaic and unjustifiable survival from the past when the court directs the production of relevant documents and requires the defendant to specify his dealings with the plaintiff’s property or money.”

72.Returning now to Mr Man’s submissions, how – if at all - does the 1982 decision of the House of Lords in Rank Film (and the other cases cited by Mr Man) fit into the foregoing analysis of PSI in Hong Kong?

73.I am hesitant to give weight to the Rank Film decision, for the following reasons:

(1) To allow a party to rely on PSI so as to avoid disclosure of pre-existing documents in a civil action, when disclosure of those same documents would not be prevented in a seizure of documents in criminal proceedings would be an anomalous outcome and one which judges and commentators alike have commented upon as being undesirable;

(2) The Court of Final Appeal in the Lee Ming Tee was aware of the Rank Film case (referring to and citing it in its judgment) and elected not to follow it; that is to say the findings from the decision of Ribeiro J cited at §68 herein were reached upon a consideration of the decision in Rank Film;

(3) In A-G’s Reference (No.7 of 2000) [2001] EWCA Crim 888, the English Court of Appeal, Criminal Division did not support an objection to the obtaining or admissibility of evidence that was already in existence and where the only effect of the use of compulsory powers was to bring it to the attention of the court;

(4) The majority in the Court of Appeal in C Plc v P (supra), consisting of Sir Martin Nourse and Longmore LJ, accepted the distinction between admissions obtained in breach of a defendant’s right to remain silent and material which is obtained by the use of compulsory powers but which has an existence independent of the will of the defendant. The Court in C Plc v P referred to Saunders v United Kingdom, which of course formed the basis of the court’s decision in Lee Ming Tee;

(5) The decision in Rank Film was not followed in the decision of Popplewell J in JSC BTA Bank v Ablyazov [2014] EWHC 2788 Comm. That decision determined that PSI does not provide a person with protection against the risk of incriminating itself by the provision of documents which came into existence independently of any order…which compelled their production.  The rationale for the decision of Popplewell J can be seen to be similar to the position on PSI that has been adopted by the Hong Kong courts from the time of Lee Ming Tee and the subsequent Hong Kong decisions cited above;

(6) In summary, Hong Kong law appears clear on the application of PSI to cases of this type. English law has had to contend with the Rank Film decision and while cases such as JSC BTA Bank v Ablyazov [2014] perhaps suggest that Hong Kong and English law on this issue is now converging, one may note the comment from Zuckerman on “Civil Procedure, Principles of Practice”, that “the process of freeing the court from the dead weight of the 1982 Rank Film Distributors decision has been lengthy”.

74.I have considered the other cases referred to by Mr Man in support of his reliance upon Rank Film (as cited at §61 herein). However, in my view, those cases provide no basis for this court to depart from the Hong Kong authorities on PSI, as cited above. Three of those cases predate Saunders v United Kingdom and Lee Ming Tee.  The fourth, that of Kensington International Limited v Republic of the Congo (supra) gives no cause for departure from the Lee Ming Tee line of authorities.

75.I am satisfied that Hong Kong law on the question of PSI is as set out in the decision of Lee Ming Tee and the subsequent cases described above. I do not regard the Rank Film decision (or the decisions relied upon by Mr Man which have applied Rank Film) as forming any sort of platform from which one could properly depart from the established Hong Kong authorities.  Indeed, the reverse appears true. It appears to me that the weight of more recent English authorities suggests that English law on the question of PSI is more convergent with rather than divergent from Hong Kong law.

76.There is one further point from Mr Man which ought to be addressed.  This is as follows. Even if one accepts the principles set out in Lee Ming Tee, paragraph 2 of the plaintiff’s originating summons would, if granted, require Legend Six to file and serve a discovery affirmation. Mr Man submits that producing the documents contemplated by the originating summons, combined with a discovery affirmation, would introduce a compelled testimonial aspect and it can no longer be said that the requested documents would exist truly independently of the will of the person producing the documents.

77.I do not accept this submission. It is apparent from paragraph 2 of the originating summons that the plaintiff proposes a simple affirmation in the usual terms, requiring the maker of the affirmation to state whether it has or has at any time had in its possession, custody or power the class of documents as requested and if the said documents or any of them have been but are not now in its possession, custody or power, stating when it parted with them and what has become of them.

78.Albeit that addressing these matters would be done by way of affirmation, I do not believe that such an affirmation changes the position at all, as Mr man would contend. In my view, upon a correct application of Lee Ming Tee, it is acceptable in principle for the plaintiff in this case to seek pre-existing documents – documents that exist prior to and independently of the proposed order.

79.Thus, I will apply the principles set out in Lee Ming Tee to the present case.  This can be done briefly.  Accepting Mr Dawes submissions, the documents requested in the originating summons are all pre-existing documents and I see no reason in principle why they should not be disclosed subject to Mr Man’s further arguments, as set out below.

(ii) Risk of prosecution

80.One must turn now to the parties’ submissions as to whether PSI is engaged on the facts of this case.  The question (put simply) is whether there is a real risk of prosecution that brings PSI into play. Here, I refer to the submissions of the parties as summarised at §§57-58 and §§63-64 herein.

81.The correct starting point for this part of the enquiry is the decision of Queeny Au-Yeung J in China Shanshui Cement Group Ltd v Zhang Caikui [2017] 2 HKLRD 719, at §8-9.  In that case, the learned judge held that in deciding whether a claim for PSI would be upheld: (i) it is not enough or an examinee to establish that he is facing a real risk of prosecution for an offence. He must also establish that requiring him to answer questions in the examination has a tendency to expose him to a criminal charge; and (ii) the court will also have to examine whether there is a clear link between the answers sought and the offence.

82.On the facts before me, it is difficult to see how a claim to PSI can be seen to have arisen. The affidavit evidence of Legend Six is silent on the issue of risk of prosecution. There is no evidence that providing the documents in question would expose Legend Six to a criminal charge, nor that there is any apparent link between the documents requested and a criminal charge. Mr Man refers to the risk of charges of conspiracy to defraud. My difficulty with that reference is that so much relating to the alleged fraud in this case (as well as the fraud alleged in the SocGen Proceedings) is already in the public domain. Even assuming a risk of incrimination of Chen, the director of Legend Six, I accept Mr Dawes’ submission that privilege claimed by a company against materials being sought against it is personal to the company and not “descendible”.  See the decision of Recorder McCoy SC in Salt & Light Development Inc [2006] 2 HKLRD 279, at §§78-81.

(iii) Tiger Asia case

83.One then turns to Mr Dawes’ argument that as regards BOC there is an additional ground militating against PSI being engaged. This arises from the case of Tiger Asia (supra).  See §§55-56 herein.

84.I accept Mr Dawes’ submissions as to the applicability of Tiger Asia and while Mr Man sought to argue that this Court should not follow Tiger Asia, that argument was premised on English authorities which I do not believe bear on the issue. I would go further in this regard by agreeing with and adopting the language of the learned judge in Tiger Asia that PSI is not a privilege against incrimination; it is a privilege against self-incrimination.  There is a world of difference between these two concepts.  The application of this distinction to the facts of the present case mean that Legend Six cannot properly oppose the application against BOC on the ground that the documents sought as against BOC may be incriminating against Legend Six. 

(iv) Bill of Rights

85.The final issue which arises on the question of PSI is Mr Man’s reliance upon article 10 of the Hong Kong Bill of Rights. Mr Man submits that PSI is an integral part of the right to a fair trial under article 10.  I have sought to summarise Mr Man’s arguments concerning article 10 in §65(2) herein do not repeat them here.

86.In response to this part of Mr Man’s submissions, Mr Dawes refers to the decision of Secretary for Justice v FTCW (supra).  In that case, Lam VP determined that for article 10 to apply there must either be a criminal charge or alternatively, the situation of the suspected person has been substantially affected. That person’s position will have been substantially affected as soon as the suspicion against him is being seriously investigated and the prosecution case compiled. This, in Mr Dawes’ submission is the test that needs to be satisfied in this case if article 10 is to take effect. In his submission, there is no evidence before this court at all of any suspicion against Legend Six being investigated, nor of a case being compiled against it.

87.I accept Mr Dawes submissions on this question, including that as an evidential matter there is insufficient material before this court to give rise to a PSI claim based on article 10.

88.I would respond further to Mr Man’s article 10 arguments in this manner. A central part of Mr Man’s argument that article 10 applies is implicit criticism that it is too categorical to state that PSI is not engaged by compulsion to produce pre-existing documents.  In Mr Man’s words, a “more nuanced approach” is required.  The difficulty with this argument is my determination herein that the Hong Kong courts recognise just that, namely, that PSI is indeed not engaged by compulsion to produce pre-existing documents which have an existence independent of the party claiming the privilege. Mr Man’s article 10 arguments fall at this same hurdle.

G. DECISION AND COSTS

89.I have decided that pre-action discovery against Legend Six and Norwich Pharmacal and banker’s books orders against BOC are appropriate in this case and in the terms sought by the plaintiff.  I have also decided that Legend Six’s claims to PSI are unfounded.

90.This being so, I make an order in the terms of the plaintiff’s originating summons dated 26 November 2019.  This is subject to the following amendment proposed by the plaintiff (and not objected to by Legend Six): amend the preamble of paragraph 3(4) of the originating summons by deleting “if so” and replacing the same with “if applicable”.

91.The plaintiff also sought an order that it and/or its legal advisers be at liberty to inspect and take copies of the documents disclosed by the respondents. This appears to be covered by paragraph 4 of the originating summons in which case, it seems that no further order is required.

92.At the conclusion of the hearing, the plaintiff did not address the Court on the question of costs. Costs were however addressed in the written submissions of Legend Six.  Those submissions included reference to; section 43(2) of the High Court Ordinance (referring to the decision of Marlene Ng in Lau Tsz Hung Ringo v First Refrigeration Engineering Ltd (unrep., HCMP 1166/2013, [2013] HKEC 1033)); to Order 62 rule 3(12) of the Rules of the High Court; and to Matthews and Malek, Disclosure (5^th edition), 2016), at §3.46.  Mr Man submitted that Legend Six should be entitled to costs irrespective of the outcome of the application.

93.It seems to me that it was open to Legend Six, as a party resisting discovery to test and challenge the relief sought by the plaintiff.  Robust resistance should not, in the ordinary course, carry negative costs consequences. In this case however the plaintiff has mounted a PSI claim which, as I have found, ran counter to a number of well-established Hong Kong authorities.   I do not believe that the plaintiff should have to bear the costs of defending such a challenge.

94.In these circumstances, I make an order nisi that each party bear its own costs of the plaintiff’s originating summons dated 26 November 2019.

Mr Victor Dawes, SC and Ms Esther Mak, instructed by Lu & Partners LLP, for the Applicant

Mr James Man, instructed by Tony Kan & Co, for the 1^st respondent

Attendance of K.W. Ng & Co., for the 2^nd respondent, was excused