Cosimo Borrelli and Others v. Linklaters (A Firm)
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CACV 1122/2025, [2026] HKCA 1731 On Appeal from [2025] HKCFI 5293 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO 1122 OF 2025 (ON APPEAL FROM HCMP NO 410 OF 2025) ________________________
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__________________ D E C I S I O N __________________ Hon Coleman JA (giving the Judgment of the Court): A. Introduction 1.This is an application (“Stay Summons”) for a stay of execution in respect of parts of the Order dated 5 November 2025 made by Harris J (or “Judge”) reflecting his Judgment, [2025] HKCFI 5293, pending the determination of the appeal brought by the Intervener (“CNG”) against the Judgment. 2.It arises in the following circumstances. (We shall adopt for present purposes the definitions and abbreviations used by the Judge in the Judgment.) 3.The 3rd Plaintiff (“SIL”) and CNG were both former clients of the Defendant (“Linklaters”) in HKIAC arbitration proceedings brought against them both (“Existing Arbitration”). Linklaters was engaged separately by CNG and SIL on 5 August 2020 and 11 December 2020 respectively to act for them in the Existing Arbitration. Linklaters was subsequently replaced as legal representative for both SIL and CNG in August 2023. 4.By Originating Summons dated 17 March 2025 (“Delivery-Up Summons”), SIL – together with the 1st and 2nd Plaintiffs (“Receivers”) – sought an order for Linklaters to produce the documents set out in Annexure A to the summons. 5.Linklaters did not object to delivering up to SIL, as its former client, the documents that form part of SIL’s client file. Linklaters provided a List of Documents based on Annexure A, consisting of two broad categories of documents, namely (1) documents which Linklaters believe exclusively belong to SIL (“Category 1”), and (2) documents which Linklaters believe belong to both SIL and CNG (“Category 2”). 6.However, CNG applied to intervene (“Joinder Summons”), and to oppose the Delivery-Up Summons in respect of (1) various invoices issued by Linklaters to SIL (“Invoices”) listed under Category 1, and (2) documents in Appendices 1, 2 and 3 (Tabs 3 and 4) of Category 2. CNG had no objection to delivery up of the remaining documents in the List of Documents. 7.The matter came before Harris J on 2 September 2025, leading to his Judgment. In the Judgment and Order, Harris J:
8.On 20 November 2025, CNG applied for a stay of execution of the Order pending its intended appeal, which it subsequently issued by Notice of Appeal dated 1 December 2025. The application for stay was dismissed by Harris J on 26 March 2026, for reasons which he gave in his Reasons for Decision dated 31 March 2026, [2026] HKCFI 1910. However, he granted an interim stayed pending the Court of Appeal’s determination of an application to it for a stay, if the application (“Stay Summons”) was issued by 16 April 2026, which it was. 9.The Stay Summons seeks a stay of execution in respect of §§1, 5, 6 and 8 of the Order, pending the determination of CNG’s appeal against the Judgment. 10.Written skeleton submissions were provided by CNG on 21 May 2026, by SIL and Linklaters on 4 June 2026, and by CNG in reply on 11 June 2026. 11.Having considered the submissions, this is our Decision. B. The Judgment 12.As to the order for delivery up found in §1 of the Order, the Judgment set out the following matters and conclusions, with references to paragraph numbers of the Judgment as shown:
13.The Judgment also led to §§5, 6 and 8 of the Order, dealing with costs, all made on a nisi basis. 14.A variation application made by the Plaintiffs was dismissed by the Judge in his Decision dated 19 May 2026, [2026] HKCFI 2820, for the reasons he gave in that Decision. Hence, the costs orders became absolute. C. The Notice of Appeal 15.In its Notice of Appeal, CNG raises no less than 10 grounds of appeal, as follows:
D. Harris J’s Refusal of Stay 16.In his Reasons for Decision dismissing CNG’s application for a stay pending appeal, Harris J identified the relevant principles as including that the Court must be satisfied that there is a good reason to grant a stay pending appeal, and it requires the applicant to demonstrate on a preliminary basis that it has at least an arguable appeal. However, where what is challenged is a finding of primary fact, the Court of Appeal will be reluctant to interfere and demonstrating an arguable appeal requires an applicant to surmount a high hurdle. 17.He then made the following points and conclusions:
18.In essence, the Judge held that – though delivery up of the Documents would render the appeal nugatory – there was insufficient merit in the grounds of appeal to identify any good reason to grant a stay. E. Applicable Principles 19.The legal principles applicable on an application for a stay of execution pending appeal are well settled, and do not require reference to authority. They can be summarised as follows:
20.As to the circumstances in which an appellate court will interfere with findings of fact made at first instance, the following well-settled principles apply:
21.We apply those principles. F. Whether Appeal would be Rendered Nugatory 22.On behalf of CNG, Mr Norman Nip SC, leading Mr Leon Guo, submitted that there are clearly good reasons for ordering a stay of execution, for otherwise CNG’s appeal will be rendered nugatory. This is, he said, because if the Documents are disclosed to and seen by SIL they cannot be “undisclosed” or “unseen” even in the event of a successful appeal. 23.On behalf of SIL, Mr James Wood submitted that the issue of SIL not being able to “unsee” the Documents is a ‘red herring’, where the relevant documents were in SIL’s possession and still would be in the normal course, and it cannot be correct for CNG to keep SIL out of what is essentially replacement documentation. However, that submission presupposes that the appeal would fail, and (like Harris J) we are prepared to proceed on the basis that the refusal of a stay of execution might render the appeal nugatory. 24.Nevertheless, we think it relevant to note that if there is little merit in the main ground of appeal, Ground 1, then the risk of the appeal being rendered nugatory is significantly reduced. Indeed, on the facts, and the finding made by the Judge which is the subject of the main challenge in the appeal, SIL has already seen the relevant documents. We keep this in mind as to the appropriate way to exercise our discretion. 25.The focus, therefore, is on the apparent merits of the appeal. G. Argument and Analysis G.1 Introduction 26.Mr Nip submitted that all 10 grounds of appeal are strong and meritorious, and that by themselves they are sufficient to warrant a stay. Alternatively, he argued that the grounds are at least arguable. He sought to emphasise that the grounds of appeal do not concern only any factual finding of the Judge, but in fact concern the Judge’s errors of law, including on the principles of LPP and partial waiver of it. The legal errors and erroneous findings on critical facts resulted, Mr Nip said, in the erroneous decision in the Judgment. G.2 Ground 1 27.We think it fair to say that Ground 1 is likely the main focus of the appeal. It concerns the finding that the Category 2 documents belong to SIL, and hence LPP is an irrelevant consideration. As already identified above, that finding was made on the basis that, since Category 2 documents were exchanged between Linklaters and SIL’s representatives and employees, and Linklaters were of the view that the documents belonged to both SIL and CNG, so that they are at least co-owned by SIL, and hence LPP is irrelevant. 28.Mr Nip submitted that it is at least arguable that the Judge made an error of law, in wrongly conflating the mere disclosure of documents to SIL (for a limited purpose) with CNG having passed or transferred ownership to or shared title of such documents with SIL. He submitted (with references to authority cited omitted) that:
29.Mr Wood again makes the submission, with which the Judge agreed, that the relevant finding was one of fact, and one which the Judge was plainly entitled to arrive at on the evidence, including but not limited to the evidence and submissions of Linklaters. Mr Wood submitted that it is a misuse of the appellate process for the Court of Appeal to be invited to take over the role of the trial judge as the primary assessor of the evidence in the manner in which CNG invites it to do, running the same arguments as were unsuccessfully advanced before the Judge. 30.Mr Wood further submitted that:
31.This Ground 1, it seems to us, may turn essentially on what was meant by the Judge when he said in §§53 and 54 that the Category 2 documents “belong to SIL” as well as CNG. We think it perhaps unlikely the Judge was using the phrase in the sense of strict “ownership” or “title”. The Judge was perhaps simply identifying documents properly in the hands of a person, properly received by that person, and to which the person was therefore entitled (as it happens, in this case, together with another person). As Mr Wood put it, on Linklaters’ evidence, the documents were created or exchanged for the collective benefit of both SIL and CNG without any meaningful differentiation of the work performed for them by Linklaters. 32.We see the argument that the Judge’s finding that the Category 2 documents “belong to” SIL – in the sense that it was properly entitled to receive them and hold them – was a finding of fact. But we note the point also perhaps followed the application of a legal principle relating to common interest privilege, and in circumstances where the limited purpose of any waiver appears to have ended. 33.We also note that the Judge specifically identified that how the documents can be deployed by SIL may be governed by matters relating to LPP (in accordance with the principles he had previously rehearsed). As stated by the Judge again in his Reasons for Decision refusing the stay, common interest privilege in the attenuated form of a partial waiver (as argued by CNG) is relevant to disclosure and production of documents to third parties. But he said no reason had been advanced for extending common interest privilege to a case where one of the parties to the common interest relationship wants to obtain its documents from its solicitors. 34.We can see the force in that analysis. In short, we see the argument that when one of the parties to a common interest privilege obtains documents for the identified limited purpose, it has those documents, it is entitled to have those documents, and it is entitled to use those documents (albeit for the limited purpose only). Hence, it might be argued that there would be no impropriety if SIL continued to hold the relevant documents (so long as there was no improper disclosure and production of them to third parties). But the issue has arisen in this case because SIL has lost possession of the documents, and it is able to regain possession of that to which it was previously entitled because copies of the documents are held by and can be provided by its former solicitors, Linklaters. 35.CNG’s challenge might, in those circumstances, be regarded as “premature” – where SIL is simply reconstituting its books and records from copies available from (here) its former solicitors. What it does or does not do with those documents may be another matter, and it may be that any questions of abuse have at least not yet arisen. 36.However, on balance on the materials, we think the merit of Ground 1 just meets meet the reasonable prospects of success threshold. Together with the point about the appeal being rendered nugatory (see above), we think this just meets the test of good reason for a stay. G.3 Ground 2 37.Mr Nip submitted that Ground 2 concerns the error in law in failing to consider that mere existence of common interest between CNG and SIL is insufficient to confer a free-standing right for SIL to obtain disclosure of documents. He argued that:
38.But Mr Wood submitted that Ground 2 is baseless and confusing. He said the Judge did not decide that SIL was entitled to obtain disclosure of Category 2 documents by reason of any common interest privilege between CNG and SIL. Rather, the Judge found that SIL was entitled to those documents because on the evidence the Category 2 documents belong to both SIL and CNG. That was another finding of fact justified on the evidence, and not liable to be set aside. Further, the Order was not made on the basis that there was any “conferring” or “sharing” of title to the documents with SIL. 39.We tend to agree with Mr Wood, and that Ground 2 may be setting up a ‘strawman’ argument, or one based upon an incorrect premise. Our initial view is that this ground is not very strong, but it remains linked to Ground 1. G.4 Ground 3 40.Mr Nip submitted that the Judge erred in not finding that SIL is not entitled to the Clause 8.3 Documents, because those documents falling within the scope of Clause 8.3 would not form part of SIL’s client file but would remain as Linklaters’ property. But, neither the inherent jurisdiction nor section 65 of the Legal Practitioners Ordinance confer a power on the Court to order delivery up of documents belonging to solicitors. 41.That may be correct, but it seems Mr Wood is likely correct to see this point – as did the Judge – as entirely arid. Indeed, as Mr Wood also identifies, it is unclear on what basis CNG might think that it has standing to interfere in the solicitor-client relationship between Linklaters and SIL so as to prevent Linklaters from volunteering to deliver up documents that it might regard as its own. 42.Our initial view is that Ground 3 does not have reasonable prospects of success. G.5 Ground 4 43.Mr Nip submitted that Ground 4 involves the Judge’s error of finding that Tian Na’s evidence had changed, when the Judge’s criticism is clearly misplaced, for the reasons identified in the Notice of Appeal. 44.However, we tend to agree with Mr Wood that it was plainly open to the Judge to come to the view he did on the evaluation of the evidence. As Mr Wood has pointed out, Ms Tian’s affirmations did not refer to any document or discussion that recorded the alleged basis on which SIL representatives and employees were approached by Linklaters in the context of the Existing Arbitration, and what purportedly transpired was only her interpretation of what was taking place. 45.Our initial view is that Ground 4 does not have reasonable prospects of success. G.6 Ground 5 46.This ground is said to concern the Judge’s error of drawing an inference against CNG, for having shown the Judge very few of the voluminous documents, and the finding that CNG failed to identify items in the List of Documents as falling within what it called the CNG Exclusive Documents category. This was an error, Mr Nip submitted, because the practice is that claims to privilege are invariably made in lists of documents in generic terms, and the Court has power to require a more detailed listing or supporting particulars. So, this was not a ground for rejecting a claim to LPP. In any event, Mr Nip submitted, the Judge also failed to give due weight to the reasons why few documents from the List of Documents were presented. 47.However, we tend again to agree with Mr Wood that the Judge did not in fact draw any material inference against CNG in the Judgment. We note it was also agreed at the hearing of the Delivery-Up Summons by leading Counsel for CNG that the Court did not need to consider the documents on an individual case by case basis. Indeed, as the Judge himself recorded, the argument was listed for one day, obviously on the basis that the documents would not all be able to be reviewed individually within that time set aside. 48.Ground 5 does not seem to us to have reasonable prospects of success. G.7 Grounds 6 and 7 49.In his submissions, Mr Nip dealt with these two grounds together. He said that they concern the Judge’s failure to review, consider and/or provide adequate reasons in rejecting Category 2 documents (in particular tabs 3 and 4 of Appendix 3) as CNG’s Exclusive Documents or subject to CNG’s LPP. The submission is based upon the matters set out in the Notice of Appeal which seeks to identify the materials provided as an annex to CNG’s skeleton submissions (provided separately only to the Court pursuant to an order) which contained references to exhibits of draft witness statements and email chains, which it is said the Judge ought to have considered and evaluated, and which should have led to the conclusion that SIL is not entitled to Category 2 documents because CNG has retained and is entitled to assert LPP against SIL in respect of them. 50.Mr Wood submitted that Ground 6 seeks to appeal the finding of fact that the Category 2 documents belong to both SIL and CNG. He submitted that the Judge’s decision in that regard was explained and justified on the evidence, and was not plainly wrong. 51.We tend to agree. In other words, the criticism identified in Grounds 6 and 7 does not seem to lead anywhere, unless there is any reasonable basis to think that the finding that the Category 2 documents belong to both SIL and CNG would be set aside. We do not think that these grounds provide any particularly strong reason for the grant of a stay. G.8 Grounds 8 to 10 52.In his submissions, Mr Nip also dealt with these Grounds 8, 9 and 10 together. He submitted that they all point to the Judge’s failure to consider a distinct or independent ground that it is an abuse of the Court’s process to seek disclosure of documents with ulterior motive. The criticism is that the Judge failed to address the authority submitted by CNG supporting the principal relied on (which Mr Nip says must be right as a matter of law), and failed to consider or evaluate CNG’s six points of analysis as to why the requested disclosure would amount to an abuse of process, or engage the application of the legal proposition/principle in the analysis or evaluation. 53.Mr Nip further submitted that the absence of analysis on the question of abuse stems from the Judge’s erroneous finding that the documents belong to SIL, and hence LPP is irrelevant (which Mr Nip recognised hinged on Ground 1). 54.We tend to agree with Mr Wood that the Judge did specifically refer to the issue of abuse of process in the Judgment. There was no obligation on the Judge to refer to all of the authorities cited to him, and he proceeded on the basis that it cannot be an abuse of process for SIL to seek to obtain copies of its own documents as would have been available to it in the normal course of events. Mr Wood pointed to the fact that it is not disputed by CNG that the documents were previously in SIL’s possession, and obtained without objection from CNG at the time. 55.We do not think Grounds 8 to 10 on their own reach the minimum standard for the grant of a stay. But they depend on Ground 1, which we have conclude is just reasonably arguable. G.9 Conclusion on Stay of §§1 and 5 of the Order 56.In the circumstances, we grant the stay pending appeal sought in respect of §1 of the Order and the consequential costs order in §5. But, on our view as to the merits, and against the time already taken, we grant the stay on a condition that the appeal be immediately set down and that it will be argued on a date which we now fix for 10am on 8 January 2027. H. Possible Stay of §§6 and 8 of the Order 57.Whilst neutral on the other aspects of the application for a stay, Linklaters opposes the Stay Summons in so far as it concerns §§6 and 8 of the Order. Mr Justin Tang of Linklaters submitted that it does so for three reasons:
58.Mr Nip submitted that Linklaters’ opposition to a stay of the costs order should be rejected because (1) Linklaters was not truly neutral, because the finding in §53 of the Judgment proceeded expressly from Linklaters’s own view, which is subject to the challenge on appeal, (2) CNG faces the same risks of non-recovery due to SIL having no known assets in Hong Kong, and (3) the LPP is enjoyed by CNG, not Linklaters, and the criticisms of CNG do not take away that right so as to place it somehow in a better position than CNG on costs. 59.However, we see no real merit in those points in the context of an application for a stay, and instead accept the submissions made by Linklaters. 60.In the circumstances, we refuse to grant the stay pending appeal sought in respect of §§6 and 8 of the Order. I. Result 61.We grant the stay on §§1 and 5 of the Order, on the condition that the appeal is immediately set down and for the hearing fixed at 10am on 8 January 2027. We refuse the application made by the Stay Summons for a stay pending appeal of §§6 and 8 of the Order. 62.As to costs, the costs as between CNG and SIL will be reserved to the appeal. Further, we make an order nisi that costs follow the event as between CNG and Linklaters, such that CNG pay the costs of Linklaters, to be taxed if not agreed. The order will become absolute after 14 days if no party seeks a variation. Any variation application will be dealt with on paper.
Mr James Wood, instructed by Karas So LLP, for the plaintiffs Mr Justin Tang, Solicitor Advocate of Linklaters, the defendant in person Mr Norman Nip SC and Mr Leon Guo, instructed by GH Legal, for the intervener | ||||||||||||||||||||||||||||||||
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