Korita Packaging Ltd and Another v. Shahaneys (H.K.) Ltd
Read the full judgment text of HCA 2167/2020 on BabelCite. This High Court CFI judgment was delivered on 12 July 2022.
1. This Decision deals with the Defendant’s Summons dated 26 May 2022 (the “ Summons ”) for leave to file fresh evidence on appeal by way of the 3 rd Affirmation of Rajesh Gobind Shahani (together with its exhibits) dated 26 May 2022.
Cites 2 cases
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HCA 2167/2020 [2022] HKCFI 2082 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 2167 OF 2020 __________________ BETWEEN
_________________ Before: Deputy High Court Judge Kenneth Wong in Chambers Date of Hearing: 31 May 2022 Date of Decision: 12 July 2022 _________________ D E C I S I O N _________________ A. INTRODUCTION 1.This Decision deals with the Defendant’s Summons dated 26 May 2022 (the “Summons”) for leave to file fresh evidence on appeal by way of the 3rd Affirmation of Rajesh Gobind Shahani (together with its exhibits) dated 26 May 2022. 2.On 28 January 2022, Master D. To entered summary judgment against the Defendant. The Defendant appealed against the summary judgment on 10 February 2022. The hearing of his appeal was scheduled to be heard before this Court on 31 May 2022. On 26 May 2022, 5 days before the appeal hearing, by the Summons returnable at the same time of the appeal hearing, the Defendant applied for leave to adduce new evidence on appeal. 3.At the hearing on 31 May 2022, the parties agreed that if the Defendant’s application to adduce new evidence is allowed, the Plaintiff should be given opportunity to file evidence in reply. Therefore, the hearing of the Defendant’s appeal was adjourned to a date to be fixed and not to be heard before this Decision. B. THE PLAINTIFFS’ CASE 4.The Plaintiffs’ cause of action is money had and received. In gist, in January 2020, the 1st Plaintiff and the 2nd Plaintiff respectively ordered (the “Alleged Purchase Agreement”) certain specified machines (the “Goods”) from the Defendant at the price of USD3,411,855 (the “Money”) and paid for them in full, but the Purchase Agreement was terminated because the Defendant had failed to deliver the Goods. After the Plaintiffs’ demand, on diver dates from February to April 2020, the Defendant returned various sums totalling USD850,000 to the 1st Plaintiff. No further repayment was made to either plaintiff. The Plaintiffs therefore commenced the present proceedings claiming the balance in the sum of USD2,561,855 (USD1,401,855 for the 1st Plaintiff and USD1,160,000 for the 2nd Plaintiff) from the Defendant. 5.There is no dispute between the parties that the Plaintiffs did pay the Money to the Defendant, and that the Defendant did not deliver any Goods to the Plaintiffs. The Plaintiffs produced invoices of the Goods issued by the Defendant (the “Invoices”) evidencing the existence of the Purchase Agreement and submit that their case is simple and straightforward. C. THE DEFENDANT’S CASE 6.Essentially, the Defendant says that:
D. THE SUMMARY JUDGMENT 7.On 28 January 2022, after hearing the parties, Master D. To granted summary judgment against the Defendant, who was adjudged to pay:
In addition, the Defendant was ordered to pay the Plaintiffs’ costs of the action. 8.By a Notice of Appeal dated 10 February 2022, the Defendant appealed against the summary judgment. E. THE FRESH EVIDENCE THAT THE DEFENDANT SEEKS TO ADDUCE 9.The fresh evidence sought to be adduced consists of screenshots from certain WhatsApp messages exchanged between Mr Nilkesh Choksi (“Mr Choksi”) for the Plaintiffs and Mr Rajesh Gobind Shahani (“Mr Rajesh Shahani”) for the Defendant, exhibited as
to 3rd Affirmation of Rajesh Gobind Shahani filed on 26 May 2022. 10.The contents of those messages which the Plaintiffs sought to rely on and the significance which the Plaintiffs intend to attach to them are set out in paragraphs 20 and 21 (in respect of RGS-12) and paragraphs 23 and 24 (in respect of RGSA-13) of the 2nd Affirmation of Mr Rajesh Shahani filed on 26 May 2022 in support of the Summons:
F. APPLICABLE PRINCIPLE FOR ADMISSION OF NEW EVIDENCE ON APPEAL 11.According to Order 58, rule 1(5) of the Rules of the High Court, no further evidence (other than evidence as to matters which have occurred after the date on which the judgment was given) may be received on the hearing of this appeal except on special grounds. 12.As explained in paragraph 58/1/3 of Hong Kong Civil Procedure 2022, the phrase ‘special ground’ is the same expression as in Order 59, rule 10(2) and requires the conditions laid down in Ladd v Marshall [1954] 1 WLR 1489 to be satisfied, namely, that further evidence is admissible on appeal only where such evidence:
13.In the context of an appeal against summary judgment, Lam VP (as he then was) in Yu Wing Cheong & the other v Yu Wing Yin [2020] HKCA 629 applied the approach of the United Kingdom’s House of Lords in Langdale v Danby [1982] 1 WLR 1123 at 1133B to F per Lord Bridge:
14.However, this approach does not simply mean a more relaxed approach towards the admission of new evidence, in view of the litigation culture preferred by the court since the introduction of the Civil Justice Reform in Hong Kong SAR, namely, that parties should prepare their case properly prior to the hearing before a Master. The court will adopt a holistic approach, taking into account the overall context with all relevant factors. See paragraph 58/1/3 of Hong Kong Civil Procedure 2022. G. ANALYSIS
15.The Defendant’s explanation was set out in paragraphs 5 to 16 of the 2nd Affirmation of Mr Rajesh Shahani. In essence, Mr Rajesh Shahani said the further evidence in RGS-12 and RGS-13 are WhatsApp messages missing from exhibit NC-1 of Mr Choksi’s 1st Affirmation, which contained WhatsApp messages exchanged between Mr Choksi and Mr Rajesh Shahani. In essence only one explanation was given. Mr Rajesh Shahani said he did not check those messages exhibited by Mr Choksi in NC-1, because he assumed that those messages were complete but in fact not. He gave various reasons why he made the assumption: that Mr Choksi “would be honest and exhibit the complete conversion and not to cut things out”, that Mr “Choksi’s WhatsApp Record was in the format of a transcript (not in the form of WhatsApp screenshot interface, which made it less easy to cross-check), that he “was being naïve for [he] had trusted Mr Choksi as a close friend of [his] father (who [he] used to respect and trust as a family friend when [he] was young) would at least present his [Mr Choksi’s] evidence in a fair way”. 16.Mr Rajesh Shahani said it was only until 20 May 2022, 12 days before this hearing and after Mr Ng, counsel for the Defendant who was instructed for this appeal after the summary judgment was granted, asked him during conference to check the accuracy of the WhatsApp messages in NC-1, that he “checked the chat box stored in my iPhone and was alarmed to find out for the first time that Choksi’s WhatsApp Record has been substantially doctored”. 17.I haste to first point out that the Defendant’s accusation of “doctoring” evidence is serious. Without yet hearing any explanation from Mr Choksi, it would not be fair for me to comment. 18.However, on the face of what Mr Rajesh Shahani said in his affirmation, it was plain that the Defendant has failed to show to the Court that the further evidence could not have been obtained with reasonable diligence, for the following reasons:
19.Therefore, the Defendant has failed to satisfy the first condition in Ladd v Marshall as set out in paragraph 12(1) above.
20.The fresh evidence sought to be adduced has been described in section E above. At the hearing, Mr Felix Ng for the Defendant fairly accepted that the further evidence now sought to be adduced by the Defendant could not by itself raise triable issue. Nonetheless, he submits that the following utterance by Mr Choksi in RGS-12 is influential to the outcome of this appeal because it provides support for the two propositions which I have already set out in paragraph 10(1) above:
As quoted in paragraph 10(1) above, before Mr Choksi mentioned this, Mr Rajesh Shahani (Rajesh) wrote that he would need some time “to redo all invoices to Shahaneys and print out” and that they would meet at 12 on that day (21 February 2020). 21.I do not accept that Mr Choksi’s above mention (assuming that he did make such a mention) provides any support to the two propositions as suggested by Mr Ng. 22.Firstly, there was no reference in the above mention what the “17 year old matter” was. The Defendant submits that it referred to the Alleged 2003/04 Loan. I do not accept. The mere mention of the words “17 year old matter” cannot in any way serve to evince that there was a loan, not to mention that the loan was derived from outstanding payments for certain machineries purchased by the 1st Plaintiff from the Defendant in 2003 and 2004. 23.Secondly, Mr Rajesh Shahani mentioned “redo all invoices to Shahaneys”. There was no mention on what the invoices were and why they needed to be redone. Moreover, if “Shahaneys” was intended to mean the Defendant (i.e. Shanhaneys (H.K.) Ltd), then Mr Rajesh Shahani would be saying that he would redo the invoices “to” the Defendant. Then from which company the invoices were issued? And why Mr Rajesh Shahani would redo invoices to be issued to the Defendant? On the other hand, if “Shahaneys” did not mean the Defendant, then to which company Mr Rajesh Shahani would address the invoices and on which company behalf? Further, there was no clue on what “redo” mean”. It could not be readily inferred from the word “redo” that sham invoices were to be prepared at the instruction of Mr Choksi, and there was nothing that could be drawn from here to show that invoices to be “redone” were the Invoices. 24.All in all, in those few messages which the Defendant now seeks to adduce, nothing was mentioned on and no reference was made to the Alleged 2003/04 Loan and the Alleged Machinery Funding & Loan Agreement. 25.For the above reasons, in my view, RGS-12 is a red herring. To assert that it provides support for the two propositions set out in paragraph 10(1) above is reading too much into it, or simply a misreading. 26.RGS-13 seeks to introduce two pictures (and some additional messages as well) following the text message shared grey as set out in paragraph 10(2) above. In Mr Ng’s submission, these two pictures, together with the text message, show that when Mr Rajesh Shahani mentioned USD3 million, he was not referring to the payment that the Defendant should return to the Plaintiffs but the costs of raw materials for the mask-making business of Mr Gautam Shahani, Mr Rajesh Shahani’s brother. Mr Ng said it was in line with another reference to USD3 million for raw material by Mr Gautam Shahani in an earlier message to Mr Choksi on 16 March 2020. 27.I do not consider RGS-13 helpful, and that it would have important influence on the outcome of the Defendant’s appeal against the summary judgment. 28.Firstly, as submitted by Mr Keith Cheung, the Plaintiffs’ counsel, reading in context, I doubt whether the reference to USD 3 million really means the costs of raw materials for Mr Gautam Shahani’s mask-making business. The two pictured seem to depict a mask-making machine and its certain specifications. However, Mr Rajesh Shahani mentioned that, “I completed everything on 20 April 2020 for USD 3M. Now bank is just completing some AMA procedure. You will get good news tomorrow. …” There is no mention or reference or indication from which it can be said “USD 3M” in that sentence refers to the costs of raw material for Mr Gautam Shahani’s mask-making machines. It seems to me it is more likely to mean the money that the Defendant should return or promised to return to the Plaintiffs. 29.Secondly, the Defendant say these messages are important evidence supporting its case. It is necessary to look at the words and the context objectively and see whether these messages do have strong influence on the Defendant’s success in this appeal, i.e. establishing triable issue. I do not consider these messages bear out what Mr Ng said they mean. 30.Thirdly, in any event, the highest that the Defendant can put with regard to these messages in RGS-13 is that Mr Rajesh Shahani’s reference to USD 3 million was not an admission that the Defendant should pay or has promised to pay USD 3 million to the Plaintiffs. Even if this is accepted by the Court, in my view, they could not negate or diminish the effect of other pieces of evidence which serve to support the Plaintiffs’ case. Therefore, the probation value of RGS-13 is minute, and is not anywhere close to have any important influence on the result of this appeal. 31.The failure to satisfy the first and second conditions as explained in sections G(1) and G(2) above have been sufficient for me to dispose of the Summons. For completeness, I shall briefly deal with the third condition in Ladd v Marshall.
32.The Defendant discovered the further evidence sought to be adduced at the eleventh hour before the appeal. Its solicitors wrote to the Plaintiffs’ solicitors enclosing the further evidence on 24 May 2022, only seven days before the appeal hearing. The summon for leave to adduce the further evidence was taken out on 26 May 2022, together with the filing and serving of Mr Rajesh Shahani’s 2nd Affirmation in support. 33.The Defendant asserts that there are substantial messages missing in the WhatsApp record produced in NC-1 by Mr Choksi, and the complete record of all the messages exchanged is attached to the letter from the Defendant’s solicitors to the Plaintiffs’ solicitors dated 24 May 2022 and exhibited as RGS-10, although the material messages are only those shown in RGS-12 and RGS-13. 34.The Defendant expressly accuses the Plaintiffs of “doctoring” the WhatsApp messages. No doubt this is a very serious allegation which entitle the Plaintiffs to be given reasonable opportunity to reply. This should include a reasonable opportunity to verify the authenticity and completeness of the further evidence. Without this opportunity being given to the Plaintiffs, the Court is in no position to hold that the third condition in Ladd v Marshall has been satisfied.
35.As mentioned above, Mr Choksi’s 1st Affirmation, which exhibited the WhatsApp messages between Mr Rajesh Shahani and Mr Choksi (NC-1), was filed and served on 4 November 2021. Although it was suggested in Langdale v Danby above that the standard of diligence required of a defendant preparing his case in opposition to a summons for summary judgment, especially if under pressure of time, may not be so high as that required in preparing for trial, many months have indeed passed since the Defendant has had sight of the WhatsApp record which it now says incomplete and applies for leave to adduce the further evidence. This does not sit well with the litigation culture preferred by the Court since the introduction of the Civil Justice Reform in Hong Kong SAR, that parties should prepare their case properly prior to the hearing before a Master. And as explained in section G(1) above, it would be rather unjust to the Plaintiffs to allow the Defendant to introduce for the first time on appeal evidence which was readily available at the hearing of the Summons but was not produced, the sole reason of which is attributed to the Defendant’s own omission to check the accuracy and completeness of the WhatsApp record produced by the Plaintffs many months ago. 36.Moreover, as noted in section G(2) above, the further evidence is incapable of raising a triable issue, and its probative value is, in my view, peripheral at best. H. CONCLUSION & DISPOSAL OF THE SUMMONS 37.Taking into account the overall context with all relevant factors, for the above reasons, the Summons should be dismissed. 38.I make an order that the Summons be dismissed. Hence, there is no need for the Plaintiffs to file and serve evidence in reply. 39.There is no reason why the costs of the Summons should not follow the event. I therefore order that the costs of the Summons be paid by the Defendant to the Plaintiffs, the amount of which is to be assessed summarily on paper, with the following directions:
Mr Keith Cheung, instructed by Robertsons, for the 1st and 2nd Plaintiffs Mr Felix Ng, instructed by Titus, for the Defendant | |||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under HCA 2167/2020