Semk Products (Holdings) Ltd v. Oj v. Ltd

HCMP 1846/2020

[2020] HKCFI 3000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1846 OF 2020

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DECISION

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1.This is the hearing of the Originating Summons taken out by the Applicant against the Respondent for pre‑action discovery.

2.I have read the affirmation of service of Leung Pak Kwan.  I am satisfied that the Originating Summons together with the affirmation in support of Mr Hui Ha Lam have validly been served upon the Respondent.  The Respondent has filed no Acknowledgement of Service.

3.The Applicant’s case in summary is as follows:

(a)     the Applicant and inter alios the Respondent (as the Investor) on 28 March 2013 entered into a Deed of Grant of Share Warrant (the “Deed”);

(b)     pursuant to the Deed, the Applicant has issued inter alia some Share Warrants (the “Share Warrants”) to the Respondent;

(c)     some of those Share Warrants have been exercised and converted into shares (the “Shares”);

(d)     the Respondent has at some stage, on more than one occasions and without the Applicant’s consent transferred away or otherwise divested itself of some of those Share Warrants and Shares.  Those Share Warrants and Shares have become involved in 2 actions before the Court of First Instance, being HCA 985/2019 and HCA 1177/2020; 

(e)     there is an issue as to whether certain non‑assignment terms in the Deed prohibit the Respondent from so doing;

(f)     the Applicant seeks by way of pre‑action discovery by the Respondent of, amongst other things, documents and information relating to its dealings relating to the Share Warrants and Shares and the persons involved.

4.On the relevant principles on pre‑action discovery, I have been cited Zhang Shouen v Standard Chartered Bank (Hong Kong) Limited, unrep, HCMP 682/2015, 15 October 2015, which I have considered.  On the use of any document and information which may be so discovered, I have been cited Seacliff Limited v Decca Limited & Ors, unrep, HCMP 4900/2000, 30 August 2001, which I have also considered.

5.I have read the affirmation in support of Mr Hui Ha Lam.

6.I have considered the contents of the Deed.  §12.1 thereof is of particular relevance, which provides that:

“ This Deed shall be binding on and shall enure for the benefit of the parties hereto, their respective successors and permitted assigns, provided that the Warrants shall not be assigned by the Investor without the prior written consent of the Company.”

7.I have read the Decision of Coleman J handed down on 25 September 2020 in HCA 985/2019[1]. At §57 thereof, His Lordship observed that the terms of the Deed, and in particular §12.1 thereof:

“ …strongly suggests that assignment of the rights created by the Warrants would be permitted only with the prior written consent of the Company …”

I respectfully agree.

8.I am satisfied that the Applicant has made out a case for pre‑action discovery of the documents and information requested so that details of any dealings by the Respondent of the Share Warrants and the Shares and the parties involved in them may be identified, and if deemed appropriate, pursued.

9.I make an order in terms of the draft order that has been placed before me as amended.

10.I also make a costs order in terms of §3 of the draft order, summarily assessed at HK$100,000.

Mr Michael H Y Lok and Mr Jonathan T H Lee, instructed by Wilkinson & Grist, for the Applicant

The Respondent, was not represented and did not appear