Sang Cheol Woo v. Yoo Shin Choi (Naturalized Name Charles C. Spackman)

HCA 1586/2016

[2022] HKCFI 1163

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1586 OF 2016

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BETWEEN

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Before: Hon Ng J in Court

Dates of Hearing: 2-3, 7-8 and 28 September 2021

Date of Judgment: 6 May 2022

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JUDGMENT

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Introduction

1.This is the trial of the Action in which the Plaintiff seeks to enforce a judgment entered by the Seoul High Court on 29 September 2011 (“Seoul High Court Judgment”) in his favour against the Defendant.

2.The Korean proceedings were extraordinarily protracted, as can be seen from the next section.

3.Putting it very simply, in the Korean proceedings, the Plaintiff claimed against multiple defendants, including the Defendant, for damages for his loss arising from an alleged securities fraud jointly committed on him by those defendants. The Plaintiff lost at first instance before the Seoul Central District Court.

4.The Plaintiff then appealed to the Seoul High Court in relation to 5 defendants, including the Defendant. By the Seoul High Court Judgment, the Seoul High Court allowed the appeal and ordered the Defendant and the 4 other defendants to jointly pay the Plaintiff damages in the sum of KRW5,207,884,800 plus interest.[1]

5.Only the Defendant and 2 others viz Littauer Technologies Co Ltd (“Littauer”) and Korea Technology Investment Corporation (later renamed as SBI Investment Co Ltd) (“KTIC”) appealed to the Supreme Court of Korea against the Seoul High Court Judgment. The remaining 2 defendants viz Mr Gap Soo Seo (“Seo”) and Silverline Investment Ltd (“Silverline”) did not and the Seoul High Court Judgment against them stands. Hence, by the Seoul High Court Judgment, the Defendant, Seo and Silverline are held jointly liable to the Plaintiff.

6.On 31 October 2013, the Supreme Court of Korea handed down its judgment (“2013 Supreme Court Judgment”) dismissing the Defendant’s appeal but allowing the appeals of the 2 other defendants viz Littauer and KTIC.

7.As can be seen from the events set out in the next section, the Korean proceedings did not stop after the handing down of the 2013 Supreme Court Judgment. In 2017, the Defendant lodged a retrial application with the Seoul High Court. The re-trial application was dismissed. In 2018, the Defendant’s appeal to the Korean Supreme Court was also dismissed.

8.To put the Defendant’s resistance to the enforcement of the Seoul High Court Judgment in its proper perspective, procedurally, the Defendant has exhausted all avenue of appeal and application for retrial available to him under the Korea legal system in order to set aside the Seoul High Court Judgment. He failed to overturn the Seoul High Court Judgment before the Korean Supreme Court in 2013. He failed to obtained a re-trial in 2017 and he also failed to reverse the Seoul High Court’s dismissal of his retrial application before the Korean Supreme Court in 2018. The matter is clearly res judicata between the Plaintiff and the Defendant - the Seoul High Court Judgment is final and conclusive against him. This much is in fact accepted in the Defendant’s Retrial Complaint dated 26 April 2017 in support of his re-trial application.

The Facts

9.The Plaintiff is a citizen and resident of the Republic of Korea.

10.The Defendant is a US citizen and a permanent resident of the HKSAR.

11.The parties have lodged with the court a statement of agreed facts. Based on that statement and other contemporaneous documents, Mr Lui has set out in section C of his Opening submissions the undisputed and indisputable background facts which this court finds helpful[2]. For ease of comprehension, a more succinct version of Section C is set out below.

Seoul Central District Court – dismissing the Plaintiff’s claims

12.On 25 July 2003, the Plaintiff started proceedings in the Seoul Central District Court against 10 defendants including the Defendant as the 2nd defendant, and subsequently added an 11th defendant.

13.On 4 March 2004, the Hong Kong High Court tried to, but could not, effect personal service of documents of the District Court proceedings on the Defendant in Hong Kong.

14.On 20 July 2004, the Seoul Central District Court ordered the Plaintiff to effect service of documents of the District Court proceedings by way of “public notice” on the Defendant as a substitute for personal service. Pursuant to the order, the Plaintiff issued 19 public notices.

15.On 28 July 2008, the Plaintiff effected personal service via the Hong Kong High Court on the Defendant in Hong Kong of documents of the Seoul Central District Court proceedings.

16.The Defendant never entered an appearance or otherwise participated in the Seoul Central District Court proceedings.

17.On 5 November 2008, the Seoul Central District Court dismissed the Plaintiff’s claims.

Seoul High Court – allowing the Plaintiff’s appeal

18.On 2 December 2008, the Plaintiff lodged his appeal to the Seoul High Court[3] against the Seoul Central District Court judgment. The Plaintiff took steps to serve those proceedings on inter alia the Defendant[4].

19.From 5 November 2009 to 21 December 2010, 4 hearings were held in the Seoul High Court without addressing the merits of the Plaintiff’s appeal in relation to the Defendant. The Seoul High Court ordered postponement of the hearing of the Plaintiff’s appeal in relation to the Defendant to allow revision of the Defendant’s address and execution of evidence procedure.

20.In the appeal proceedings, the Plaintiff withdrew his claims against 6 other defendants leaving Littauer, the Defendant, KTIC, Seo and Silverline as the 1st, 2nd, 7th, 8th and 9th defendants remaining.

21.At the hearing on 21 December 2010, which the Defendant did not attend, the Seoul High Court heard oral arguments regarding other remaining defendants but did not hear the Plaintiff’s submissions on his appeal concerning the Defendant. The Seoul High Court postponed the hearing of the Plaintiff’s arguments to allow the Defendant to appear and ordered the Plaintiff to re-apply for service abroad of the appeal papers on the Defendant.

22.The Plaintiff applied for service abroad as directed by the Seoul High Court. The documents which the Plaintiff requested to be served on the Defendant through the Bailiff’s Assistant of the Hong Kong High Court were:

(1) Notice of Appeal dated 2 December 2008;

(2) Appellate Brief dated 28 January 2009;

(3) Preparatory Pleadings (Appellate Brief) dated 12 February 2009; and

(4) Notice of Hearing Date (for the postponed hearing to be held on 1 September 2011) and Announcement Date (for announcing ruling on 29 September 2011).

23.On 21 April 2011, the Plaintiff served on the Defendant in Hong Kong the above appeal documents. The Defendant admitted in this Action that he had received the above appeal documents but decided not to participate in the Seoul High Court proceedings.

24.The Plaintiff did not serve 2 other appeal documents on the Defendant. They are:

(1) Preparatory Pleading dated 30 October 2009 (“Oct 2009 Pleading”); and

(2) Preparatory Pleading dated 20 December 2010 (“Dec 2010 Pleading”).[5]

25.On 1 September 2011, the appeal hearing was held before the Seoul High Court. The Defendant did not attend that hearing.

26.As stated in the Record of Argument for the hearing on 1 September 2011, the Plaintiff’s attorney only raised arguments at the hearing on the points raised in the Appellate Brief dated 28 January 2009 and the Preparatory Pleadings (Appellate Brief) dated 12 February 2009. The Plaintiff’s attorney did not address or rely on the Oct 2009 Pleading or the Dec 2010 Pleading.

27.On 29 September 2011, the Seoul High Court Judgment was handed down allowing the Plaintiff’s appeal in respect of his claims against the Defendant and 4 other defendants.

28.The judgment against the Defendant and Silverline was based on deemed confession for the undisputed fact that they had not appeared to contest the Plaintiff’s appeal[6]. At page 8 of the Seoul High Court Judgment, the High Court explained:

“ B. Regarding Defendant Yoo Shin Choi and Defendant Silverline

Since the above Defendants did not appear in court and did not object to the Plaintiff’s argument even after receiving a lawful service not based on public notice, they shall be deemed to have made admissions thereof pursuant to Article 150, Paragraph 3 of the Civil Procedure Act.

Therefore, the above Defendants shall be liable for the above loss of KRW 5,207,884,800 … to Plaintiff jointly with the remaining Defendants.”

Supreme Court of Korea – dismissing the Defendant’s appeal but allowing 2 other defendants’ appeals

29.3 defendants held liable by the Seoul High Court appealed. Seo and Silverline did not. The Seoul High Court Judgment against them stands.

30.On 13 October 2011, KTIC lodged its appeal to the Supreme Court of Korea. On 28 October 2011, the Defendant and Littauer lodged their appeals to the Supreme Court of Korea. They instructed the same lawyers who represented Littauer in the Seoul High Court.

31.On 2 January and 25 April 2012, the Defendant filed jointly with Littauer Reasons for Appeal and Supplementary Reasons for Appeal containing comprehensive submissions on the merits of their appeals without disputing the jurisdiction of the Korean Courts over the Defendant.

32.According to the Reasons for Appeal at pages 41-46 and Supplementary Reasons for Appeal at pages 20-22, other than the complaint about injustice because the Defendant was said to be the only defendant held liable, all complaints of irregularity or unfairness pleaded in this Action attacking the “deemed confession” basis were raised before the Supreme Court of Korea.

33.On 31 October 2013, the Supreme Court of Korea handed down judgment allowing the appeals of Littauer and KTIC but dismissing the Defendant’s appeal. The Supreme Court ordered the Plaintiff’s claims against Littauer and KTIC to be remanded to the Seoul High Court for reconsideration.[7]

34.The Supreme Court of Korea rejected the Defendant’s contention that the Seoul High Court had erred in giving judgment against him on the basis of “deemed confession”. Pages 2 - 3 of the 2013 Supreme Court Judgment set out the Court’s reasoning as follows:

“1. Regarding Defendant Yoo Shin Choi’s Reasons for Appeal

Since we could learn the following facts through the records, Defendant Yoo Shin Choi shall be deemed to have made an admission of the above reasons for claim according to the Article 150 of the Civil Procedures Act: the first instance court dismissed Plaintiff’s claims after proceeding with the lawsuit by serving Defendant Yoo Shin Choi with the Complaint, Pleadings, Notice of Argument Dates, etc. by public notice; the original court served Defendant Yoo Shin Choi, who was residing in Hong Kong at that time, with the Notice of Appeal, Reasons for Appeal, and Pleadings dated 02/12/2009, and Notice of Argument Dates by service in a foreign country after Plaintiff appealed; at the 5th argument for the original trial[8], Plaintiff made an argument for the reasons for the claim through the Notice of Appeal, Reasons for Appeal, and Pleadings dated 02/12/2009, stating that Defendant Yoo Shin Choi raised the value of shares of Defendant Littauer Tech by promoting to the media about attracting a large amount of foreign capital to Defendant Littauer Technology Limited (hereinafter referred to as ‘Defendant Littauer Tech’) and AsiaNet Corp. Ltd., an Internet-related holding company located in Hong Kong [on 08/13/2004, the company name was changed to Silverline investments Ltd., which was a co-Defendant of the original trial. Hereinafter referred to as ‘AsiaNet’], Plaintiff believed in these statements and purchased the shares of Defendant Littauer Tech, and Plaintiff incurred a loss of KRW 5,207,884,800 due to Defendants dumping the shares of Defendant Littauer Tech purchased by Plaintiff through capital increase with consideration in this case and the share prices plummeted; and the above Defendant did not attend the arguments for the lower court trial and did not submit any pleadings. In addition, it cannot be deemed that the above Defendant contested the reasons for claim even though the trial proceeded by service by public notice on the above Defendant in the lower court trial and the claims against the above Defendant were dismissed.

There is no reason to continue reviewing this case as it is deemed that the above Defendant made an admission of the Plaintiff’s reasons for the claim considering the following: it is proper for the original court[9], from the same purpose, to accept Plaintiff’s claims against Defendant Yoo Shin Choi by presuming that Defendant Yoo Shin Choi made an admission of the Plaintiff’s reasons for the claim; it cannot be reasoned that [the original court] committed an error by not exercising a right to request explanations by misunderstanding the legal principle regarding deemed confession as the arguments in the Reasons for Appeal or did not complete all the necessary hearings; and the remaining arguments in the Reasons for Appeal by Defendant Yoo Shin Choi argues that there were errors in the fact-finding of the original court regarding fraudulent acts and damages.” (emphasis added)

The Defendant’s unsuccessful retrial application before the Seoul High Court and the Supreme Court of Korea

35.On 26 April 2017, the Defendant made a retrial application with the Seoul High Court. According to the Retrial Complaint filed by the Defendant, he re-argued all the grounds that had been rejected by the Supreme Court of Korea in his failed appeal.

36.On 21 December 2017, the Seoul High Court dismissed the Defendant’s retrial application. The Defendant then appealed to the Supreme Court of Korea against that decision.

37.On 30 May 2018, the Supreme Court of Korea dismissed the Defendant’s appeal against the Seoul High Court’s dismissal of his retrial application.

Enforcement proceedings in Korea and other jurisdictions

38.On 31 March 2016, the Seoul Central District Court entered a Writ of Execution ordering the enforcement of the Seoul High Court Judgment against the Defendant.

39.On 15 June 2016, the Plaintiff commenced this Action in Hong Kong.

40.On 11 September 2018, the Plaintiff obtained a final judgment against the Defendant in the Supreme Court of the State of New York in recognition of the Seoul High Court Judgment. The Defendant was legally represented and contested the proceedings.

The issues and the witnesses

41.The Agreed issues[10] for this court’s adjudication are as follows.

42.Whether, for any of the following reasons, if found to be factually substantiated on the evidence (independently or collectively), the Seoul High Court Judgment offends and/or its enforcement would offend Hong Kong notions of substantial justice and/or public policy:

(1) There was no observation of due process in proceedings before the Seoul High Court by reason of the non-service on the Defendant of the Plaintiff’s Preparatory Pleadings dated 30 October 2009 and 20 December 2010 ie the Oct 2009 and Dec 2010 Pleadings. (“Ground 1”)

(2) There was effective or de facto dismissal of the Plaintiff’s claims against the Defendant in the Korean proceedings by reason of the 2013 Supreme Court Judgment, and/or the 2014 Remand Judgment, and/or the alleged non-engagement of Article 760 of the Korean Civil Act (“CA760”)[11]. (“Ground 2”)

(3) There was an absolute bar on any effective review of the merits of the Defendant’s defence to the Plaintiff’s claims on liability and quantum by reason of the “deemed confession” rule[12] in the Korean proceedings, so that there was no effective means for the Defendant to set aside or appeal against the Seoul High Court Judgment. (“Ground 3”)

(4) There was no proper judicial assessment on the quantum of damages. (“Ground 4”)

43.Essentially, Mr Lee for the Defendant urges this court to refuse enforcement of the Seoul High Court Judgment on the basis that by reason of the above 4 grounds, enforcement of the Seoul High Court Judgment would offend Hong Kong notions of substantial justice and/or public policy.

44.At trial, the Plaintiff testified on his behalf. The Defendant declined to testify despite having filed a witness statement.

45.Both parties also called 1 expert witness each on Korean law to opine on 3 questions:

(1) Question 1: For the purposes of determining the Plaintiff’s claims under CA760, was it necessary for all defendants to be held liable on the same factual basis in order for any defendant to be held liable?

(2) Question 2: Did the 2013 Supreme Court Judgment or the 2014 Remand Judgment constitute an effective or de facto dismissal of the Plaintiff’s claims against the Defendant in Korea?

(3) Question 3: Did the “deemed confession” rule as a matter of Korean Law amount to an absolute bar on an effective review, by the Supreme Court or any other Korean Court, of the merits of the Defendant’s defence to the Plaintiff’s claims in Korea?

46.As Mr Lui submits in his Closing submissions which are not disputed by Mr Lee:

(1) On Question 1, the Defendant’s expert effectively conceded the position in his report (that all defendants sued must be held liable[13] in order for any of them to be held liable) when he said in cross-examination that CA760 applies where two or more persons are held liable for a joint tortious act.

(2) On Questions 2 and 3, the experts have no disagreement on the status and effect of the Korean Judgments and the application of the deemed confession rule.

Deliberation

47.The applicable legal principles can be summarised as follows.

48.The starting point is that, subject to a number of well-established exceptions, including those referred to at paragraph 51 below, a foreign judgment which is final and conclusive on the merits is conclusive as to any matter thereby adjudicated upon and cannot be impeached for any error either of fact or of law: Dicey, Morris & Collins, The Conflict of Laws (15^th ed) Vol 1 Rule 48 at para 14R-118.

49.A foreign default judgment may be “final and conclusive” for the purpose of its enforcement in the local jurisdiction, provided that the judgment must be one given by a court of competent jurisdiction on the merits. The local courts draw no distinction between a judgment after trial and a judgment by default: Fabiano Hotels Ltd v Profitmax Holdings Inc & Ors [2017] 6 HKC 414 at [19] - [21], [25].

50.A foreign judgment on the merits means the judgment pronounced by a foreign court of competent jurisdiction according to its established procedure in which the whole merits of the case were open to the parties, however much they may have failed to take advantage of them, or may have waived any of their rights, and cannot thereafter be disputed: Fabiano Hotels Ltd at [44].

51.A foreign judgment which is “final and conclusive” will be enforced in Hong Kong, unless, for instance, the foreign proceedings offend against Hong Kong notions of substantial/natural justice or the enforcement of the foreign judgment would be contrary to Hong Kong notions of public policy: Dicey, Morris & Collins, The Conflict of Laws Rule 52 at para 14R-162, Rule 51 at para 14R-152; Pemberton v Hughes [1899] 1 Ch 781 at 790; Adams v Cape Industries Plc [1990] Ch 433, 559E-F; Fabiano Hotels Ltd at [17] - [18]. The public policy exception is a narrow one that must be necessarily confined in line with the comity of nations principle - simply because a case could have been decided differently in Hong Kong is not a weighty enough factor to invoke it: Reeves v One World Challenge LLC [2006] 2 NZLR 184 at [56].

52.A foreign judgment which is arguably or even manifestly wrong on the merits is not impeachable on the ground that it would offend Hong Kong concepts of substantial justice. Further, a mere procedural irregularity would not offend Hong Kong concepts of substantial justice: Dicey, Morris & Collins, The Conflict of Laws at paras 14-163 & 14-165; Adams v Cape Industries Plc at 567H; Nintendo of America Inc v Bung Enterprises Ltd [2000] 2 HKC 629 at 637A-B.

53.In his written Closing, Mr Lui gives an “executive summary” of his principal submissions which would serve to defeat the Defendant’s opposition to the Plaintiff’s claim herein. Suffice it for this court to highlight the following two which are not disputed.

54.First, the grounds raised by the Defendant to resist enforcement essentially seek to re-argue the case already finally and conclusively decided in Korea, in (i) complaining about the alleged procedural irregularity in the Korean proceedings concerning the non-service of the Oct 2009 and Dec 2010 Pleadings, (ii) raising substantive issues of Korean law ie the alleged non-applicability of CA760, or (iii) attacking the fairness of the Korean legal system featuring the “deemed confession” rule. This is not disputed by Mr Lee. These grounds in effect invite this court to reconsider the merits of the Seoul High Court Judgment, which this court should decline to do.

55.Second, those grounds raised by the Defendant to resist enforcement of the Seoul High Court Judgment were already raised and rejected in his first appeal to the Supreme Court and subsequently in his retrial application to the Seoul High Court and his second appeal therefrom again to the Supreme Court of Korea. This is also not disputed by Mr Lee.

56.With these preliminary submissions in mind, this court turns specifically to the 4 Grounds relied upon by the Defendant. In this court’s view, none of the grounds are meritorious, either on the facts or as a matter of law, and they do not support the contention that enforcement of the Seoul High Court Judgment would offend Hong Kong notions of substantial justice or public policy.

57.Regarding Ground 1, Mr Lee emphasises in his Closing submissions that (i) the Plaintiff has indeed filed the Oct 2009 and Dec 2010 Pleadings in support of his appeal to the Seoul High Court but has not served them on the Defendant, and (ii) the Oct 2009 and Dec 2010 Pleadings contained direct reference to the Defendant by name and passages on his liability. Mr Lee further submits the arguments that the Plaintiff raised in the Oct 2009 and Dec 2010 Pleadings were those that the Seoul High Court found the Defendant had deemed to have accepted under the “deemed confession” rule.

58.The first answer to Ground 1 is that the undisputed evidence shows the Plaintiff had not been directed by the Seoul High Court to serve the Oct 2009 and Dec 2010 Pleadings on the Defendant. Moreover, the Plaintiff had not relied on the 2 pleadings against the Defendant before the Seoul High Court. This is confirmed by the Plaintiff’s own testimony as well as the Korean Court documents which are undisputed.

(1) First, the Record of Arguments for the hearing on 1 September 2011 shows that the list of documents relied upon by the Plaintiff’s attorney in prosecuting the Plaintiff’s appeal in relation to the Defendant did not include those two pleadings. The reason given by the Plaintiff is that those 2 pleadings only pertained to the Plaintiff’s appeal against the other defendants.

(2) Second, in the Korean 2013 Supreme Court Judgment quoted above, the Supreme Court, after reviewing the records, also confirmed that the Plaintiff’s attorney did not raise any argument before the Seoul High Court in reliance on the Oct 2009 and Dec 2010 Pleadings. Obviously, the Korean Supreme Court did not see anything irregular in the non-service of these 2 documents on the Defendant as there was no mention of them when the Supreme Court eventually dismissed the Defendant’s appeal.

59.As Mr Lui submits, if the Plaintiff did not rely on those 2 pleadings in his appeal in relation to the Defendant before the Seoul High Court, it is irrelevant whether the Defendant was referred to somewhere in them as one of the co-defendants.

60.What Mr Lee appears to contend is that, notwithstanding the Plaintiff’s non-reliance of the 2 pleadings, the Seoul High Court nevertheless had in fact relied upon them in finding the Defendant liable to the Plaintiff. This is a question of fact.

61.The answer to that contention is that it is simply not substantiated with evidence eg from a Korean attorney who appeared in and was familiar with the proceedings before the Seoul High Court and was therefore in a position to testify whether the Seoul High Court had indeed relied upon them in finding against the Defendant. Instead, what Mr Lee invites this court to do in Closing is to read the entirety of the Seoul High Court Judgment, including those parts specifically concerning the other defendants, compare it with the contents of what had been served on the Defendant, and draw the inference that the Seoul High Court must have also relied on the contents of the 2 pleadings against his client.

62.In essence, the Defendant’s contention is premised on Mr Lee’s own conjecture of what the Seoul High Court had done with the 2 pleadings and invites this court to carry out the same exercise and to second guess the Seoul High Court’s thinking.

63.Mr Lui submits and this court agrees that it is unsafe and unsatisfactory for this court to decide, based simply on reading a translated copy of the judgment, whether the Seoul High Court had indeed relied on the Oct 2009 and Dec 2010 Pleadings in finding the Defendant liable. As a matter of inherent probabilities, if it is undisputed that the Plaintiff did not rely on the 2 pleadings in his appeal against the Defendant, how probable would it be for the Seoul High Court to rely on them in finding against the Defendant? For these reasons, this court is not prepared to make a finding of fact that the Seoul High Court had relied on the Oct 2009 and Dec 2010 Pleadings in finding the Defendant liable.

64.For completeness, Mr Lui submits that the Defendant had already complained once in his Retrial Complaint that the Seoul High Court had not afforded him an opportunity to rebut the Oct 2009 and Dec 2010 Pleadings in his retrial application before the Seoul High Court in 2017. The Seoul High Court saw no merits in the complaint and dismissed the retrial application.

65.For these reasons, Ground 1 is rejected.

66.Regarding Ground 2, in essence, Mr Lee submits that, judging from the contents of the 2013 Supreme Court Judgment and the 2014 Remand Judgment, both the Supreme Court and the Seoul High Court have made findings that were either inconsistent with or have rejected all the Plaintiff’s factual allegations that the Defendant was “deemed” to have confessed to in the Seoul High Court Judgment. In his Closing submissions and in particular Annex II, Mr Lee has gone to great length to select bits and pieces from the 2013 Supreme Court Judgment and the 2014 Remand Judgment, purporting to demonstrate that the Korean Supreme Court (and the Seoul High Court) have effectively or de facto dismissed the Plaintiff’s claim against the Defendant. In other words, he is submitting that the Seoul High Court Judgment has effectively been overturned so far as concerns the Defendant.

67.As this court sees it, the laborious exercise carried out by Mr Lee is futile and unhelpful and that Ground 2 is a complete non-point and should be rejected.

68.First, the notion of effective or de facto dismissal of the Plaintiff’s claim against the Defendant is a curious one. Either the Korean Supreme Court had allowed the Defendant’s appeal against the Seoul High Court Judgment or it had not. On the evidence, it is indisputable that the Korean Supreme Court had not and that was it, since the Korean Supreme Court is a Court of final appeal in Korea. As Mr Lui notes in his Closing submissions, there is no or no satisfactory evidence, by way of expert opinion, that there is such a legally recognised concept as a matter of Korean law. The Defendant’s own expert has not testified, with supporting materials, that there is such a concept under Korean law - he simply asserts in the Joint Memorandum that because the 2013 Supreme Court Judgment’s and the 2014 Remand Judgment’s findings of fact contradict those in the Seoul High Court Judgment, those Judgments “therefore constitute an effective and de facto dismissal of facts and allegations that formed the basis of the Plaintiff’s claim against the Defendant in this case.” In this court’s view, one would require much more than a bare assertion in order to persuade this court to accept such an odd notion. The testimony of the Defendant’s expert in this regard must be rejected.

69.Mr Lui submits and this court agrees that it is not possible to reconcile the Defendant’s contention of effective or de facto dismissal of the Plaintiff’s claim with the fact that (i) in the 2013 Supreme Court Judgment, the Supreme Court did dismiss the Defendant’s appeal and upheld the Seoul High Court Judgment against him, or the fact that (ii) in 2017 and 2018, both the Seoul High Court and the Korean Supreme Court had decided against the Defendant in his retrial application and appeal. If the Korean Supreme Court had effectively or de facto dismissed the Plaintiff’s claim against the Defendant in 2013, one would have expected the Korean Supreme Court to have said so in its 2018 Judgment, instead of simply dismissing the Defendant’s retrial appeal.

70.Second, the observations and findings that the Korean Supreme Court and the Seoul High Court have made only had effect on the other 2 defendants viz Littauer and KTIC. The Supreme Court upheld their appeals and remanded the Plaintiff’s claims against them to the High Court for re-trial. In the subsequent remand proceedings before the Seoul High Court, they both succeeded in having the Plaintiff’s claims against them dismissed. The Defendant’s position was wholly unaffected by the Korean Supreme Court who dismissed his appeal. Further, the Defendant was not even a party to the remand proceedings. It is therefore difficult to see why the observations and findings of the Korean Supreme Court and the Seoul High Court were intended to apply also to the Defendant’s case. There is no answer to this in Mr Lee’s Closing submissions.

71.Third, it is trite law that a foreign judgment, even if it is manifestly wrong on the merits, is not impeachable on the ground that it would offend the Hong Kong notions of substantial justice: Dicey, Morris & Collins, The Conflict of Laws at para 14-163; Adams v Cape Industries Plc at 569E; Nintendo of America Inc at 637A-B. But what the Defendant is seeking to do here is exactly that: to impeach the Seoul High Court Judgment on the ground that it is clearly wrong on the merits.

72.The Defendant also contends that CA760 was not engaged in light of those findings made in the 2013 Supreme Court Judgment and the 2014 Remand Judgment in favour of Littauer and KTIC. But this argument becomes academic given the concession of the Defendant’s expert in Court that CA760 was applicable so long as two or more persons (instead of all defendants) were held liable for a joint tortious act. In the present case, by the Seoul High Court Judgment, the Defendant, Seo and Silverline were held jointly liable to the Plaintiff which would suffice for the application of CA760. Further, the contention CA760 was not engaged is just another way of arguing that the Seoul High Court Judgment is wrong on the merits and should not be enforced in Hong Kong.

73.Regarding Ground 3, the Defendant’s submission is that both parties’ experts agree that if the “deemed confession” rule is applied in a court of second instance ie the Seoul High Court, the Korean Supreme Court cannot review the facts so found by the Seoul High Court. The experts further agree that the Korean Supreme Court has limited jurisdiction and can only interfere with a decision of the Court below if the lower Court had erred on a question of law. The Defendant’s case is that the application of these Korean legal principles means that there was an absolute bar on any effective review of the merits of his defence in the Korean proceedings and hence no remedy was available to him.

74.Taking at its highest, the “deemed confession” rule only prevents the Korean Supreme Court from reviewing the facts so found by the Seoul High Court by the application of that rule.[14] It is a complete non sequitur to suggest that there was an absolute bar on any effective review of the merits of his defence at all. To the extent that the Defendant’s expert asserts in the Joint Memorandum that there was no real remedy against the “deemed confession” rule on appeal to the Supreme Court, that assertion must be rejected as being groundless. This is because there is no suggestion by the experts that the application of the rule itself is unchallengeable as a matter of law. As Mr Lui puts it in his oral closing, of course the Supreme Court can review whether the lower court’s application of the rule is legally correct or not ie whether the lower Court had erred on a question of law.

75.The fact is that the Defendant had taken all available steps within the Korean legal system to try to overturn the Seoul High Court Judgment by way of appeal and then by way of a retrial application. Just because the Defendant had lost all the way does not mean there was no effective review of the merits of his defence. It is not uncommon for final appellate courts to have limited powers to review and overturn the findings of fact by the lower courts, as is the case with eg our CFA. In this court’s view, there is nothing inherently unfair or objectionable about such a limitation on the powers of final appellate courts. If the Defendant failed in the Korean Supreme Court because of the “deemed confession” rule, he has no cause for complaint in the Hong Kong Courts as that is just a feature within the Korean legal system. In line with the comity of nations principle, it is inappropriate for this court to embark upon any qualitative assessment of the justice of the Korean legal system and its laws, whether in the name of Hong Kong’s notions of substantial justice and/or public policy.

76.For these reasons, Ground 3 is also rejected.

77.Lastly, Ground 4.

78.In his Opening submissions, Mr Lee has succinctly summarised Ground 4 as follows:

“70. Both the Supreme Court Judgment and the Remand Judgment have clearly rejected P’s claims in Korea and found that in any event there was no causation between any of the defendants’ alleged acts and any loss that P may have suffered.

71. D’s case therefore is that there was no proper judicial assessment of damages and that the award made under the Seoul High Court Judgment was arbitrary, irrational and could not in any way be said to be related to P’s true entitlement …”

79.In his Closing submissions, Mr Lee elaborated on Ground 4 by quoting a few truncated passages in the 2013 Supreme Court Judgment and the 2014 Remand Judgment in support of the proposition that the 2013 Supreme Court Judgment and the 2014 Remand Judgment have rejected the Plaintiff’s claims in substance and found that there was no causation between any of the Defendant’s alleged acts and any alleged damage that the Plaintiff may have suffered.

80.It seems to this court that in substance Ground 4 is just a variant of Ground 2 in that Mr Lee is seeking to argue that the Korean Supreme Court[15] has dismissed the Plaintiff’s claim against the Defendant in terms of liability (Ground 2) as well as quantum (Ground 4) and therefore the Seoul High Court Judgment has effectively been overruled even though it has not. This is made abundantly clear by Mr Lee’s assertion at para 49 of his Closing that “Even the parties’ experts agree that the 2013 Supreme Court Judgment and 2014 Remand Judgment found that there was no jointly committed tortious act and no causation between any of the Defendant’s alleged acts and the Plaintiff’s alleged damage” citing the Joint Memorandum at paragraph 11, which deals with the alleged effective or de facto dismissal of the Plaintiff’s claims against the Defendant ie Ground 2.

81.But as this court notes earlier, the observations and findings made by the Korean Supreme Court and the Seoul High Court only had effect on the case of the other 2 defendants viz Littauer and KTIC. The Defendant’s position was wholly unaffected by the 2013 Supreme Court Judgment since the Korean Supreme Court actually dismissed his appeal, notwithstanding the various passages quoted by Mr Lee. As for the 2014 Remand Judgment, the Defendant was not even a party to it and hence his position could not have been improved by whatever was stated in it. Any assertion by the Defendant to the contrary is simply what it is - a bare assertion.

82.For the same reasons that this court rejects Ground 2, Ground 4 must also be rejected.

83.Further, in this court’s view, dressing up Ground 4 as a case of “No Judicial Assessment of Damages” is misleading in that it conveys the inaccurate impression that the learned Judges in the Seoul High Court Judgment had arbitrarily came up with the figure of KRW5,207,884,800 as the quantum of the Defendant’s liability towards the Plaintiff.

84.As pointed out in paragraph 54 of the Plaintiff’s Closing submissions, the Seoul High Court did conduct its assessment and analysis on the question of damages, accepting the evidence that the Plaintiff acquired shares of Littauer for KRW5,790,744,000 and subsequently sold them for a meagre KRW582,859,200, and held at p 24/26 of the Seoul High Court Judgment that:

“It shall be reasonable to conclude that the scope of loss is KRW 5,207,884,800, which is the amount deducting the sales price of Defendant Littauer Tech shares possessed by Plaintiff, KRW 582,859,200, from the stock purchase price of KRW 5,790,744,000 borrowed by Plaintiff in order to purchase the shares of Defendant Littauer Tech”.

Disposition and costs order

85.In the premises, this court finds in favour of the Plaintiff. There shall be judgment in favour of the Plaintiff for:

(1) A declaration that the Plaintiff is entitled to enforce the Seoul High Court Judgment against the Defendant.

(2) The sum of KRW5,207,884,800 together with interest thereon calculated at 5% per annum from 5 June 2001 to 29 September 2011 and at 20% per annum thereafter until payment.

86.The parties having agreed that costs should follow the event, there shall be an order that costs of the Action be to the Plaintiff to be taxed if not agreed and paid by the Defendant forthwith, certificate for counsel.

Mr Mike Lui, instructed by Kobre & Kim, for the Plaintiff

Mr Jun Lee, instructed by John C H Suen & Co, for the Defendant