Re Kong Wah Holdings Ltd (in Compulsory Liquidation)
Read the full judgment text of HCCW 49/2000 on BabelCite. This High Court CFI judgment was delivered on 12 June 2006.
1. This is an appeal of [examinee] from a ruling given by Master de Souza on 6 June 2006. [Examinee] was the [position] [company examinee worked for]. He has retired from [company] some years ago and now resides in England. On 14 June 2006, the liquidators of Akai Holdings Limited and Kong Wah Holdings Limited (collectively “the Companies”) will commence the oral examination of [examinee] under section 221 of the Companies Ordinance, Cap. 32 before the Master, pursuant to an order I made in J
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HCCW 49/2000 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE COMPANIES (WINDING-UP) NO. 49 OF 2000 ____________
AND HCCW 50/2000 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE COMPANIES (WINDING-UP) NO. 50 OF 2000 ____________
____________ (Heard together) Before: Hon Kwan J in Chambers (not open to public) Date of Hearing: 12 June 2006 Date of Judgment: 12 June 2006 ______________ J U D G M E N T ______________ 1.This is an appeal of [examinee] from a ruling given by Master de Souza on 6 June 2006. [Examinee] was the [position] [company examinee worked for]. He has retired from [company] some years ago and now resides in England. On 14 June 2006, the liquidators of Akai Holdings Limited and Kong Wah Holdings Limited (collectively “the Companies”) will commence the oral examination of [examinee] under section 221 of the Companies Ordinance, Cap. 32 before the Master, pursuant to an order I made in January this year. 2.No suggestion has been made by the liquidators that [examinee] was party to any wrongdoing. He is required to be examined orally because of the involvement of [company] in the affairs of the Companies as [role] and [role] and the involvement of [company] with other parties who are the subject of investigation by the liquidators. 3.When I made the order for oral examination, I mentioned in my decision that [solicitors], who acted for [examinee] and [number] of the examinees, had requested the liquidators to provide a list of the topics the liquidators intended to cover in the examination and that I considered this reasonable. 4.On 27 April 2006, the liquidators provided [solicitors] a list of the intended topics of examination for the [number] examinees including [examinee]. 5.On 3 May 2006, [solicitors] requested the liquidators to provide to the examinees bundles of relevant documents for use at the examinations and to identify precisely within the bundles in relation to each witness what documents the liquidators intended to concentrate on. The liquidators acceded to the first part of the request but not the latter. Bundles of relevant documents were provided to the examinees shortly before their examination was to commence. [Examinee] is the last of the [number] to be examined. The relevant documents were provided on the basis that they could not be used for any purpose other than to refresh the memory of the examinees and to prepare them for the examination. 6.When relevant documents were sent to [examinee] care of [solicitors] on 2 and 3 June 2006, it was expressly stated in the covering letters of the liquidators that the documents are “confidential and are not to be disclosed to or discussed with anybody including [his] legal advisers”. This statement did not appear in some of the earlier covering letters providing the relevant documents to the other examinees. 7.On receipt of the above letters, [solicitors] wrote to the liquidators on 5 June 2006 objecting to the above term in the covering letters to [examinee] and making clear their position in these respects:
8.On 6 June 2006, counsel for [examinee] sought a ruling from the Master if [examinee] could seek legal advice generally on the documents provided by the liquidators. 9.The Master made a ruling, which is the subject of this appeal, that [examinee] does not have uninhibited ability or a general right to take legal advice prior to the commencement of his examination on the documents provided to him by the liquidators for the limited purpose of refreshing his memory. The Master has made clear in what he said on the day after this ruling that what he had ruled is “obviously in the context of the documents supplied”. In other words, the ruling is confined to legal advice in respect of the documents supplied. The Master has not ruled that [examinee] is not permitted to take legal advice regarding his examination in general, prior to the commencement of the examination, so long as this does not involve [examinee] going through the documents supplied with his legal advisers. Further, if he wishes to seek legal advice before the commencement of his examination on any particular matter arising from the documents supplied, he may apply to court for this purpose, identifying sufficiently the area or areas of his concern to the court and the liquidators and the Master will rule on this after hearing arguments. What he is not permitted to do, by the ruling of the Master, is to take legal advice on the documents in general, without the leave of the court. 10.The scope and purport of the Master’s ruling would appear to be very limited. 11.The reason for this ruling, as the Master has explained, is that he sees a risk that the evidence [examinee] is to give in his examination may be coloured, even with the best will in the world, if he is allowed to go through the documents supplied and to have a general discussion or even a more detailed discussion on points arising from those documents with his legal advisers. He was not saying that [examinee] would be coached in giving evidence, but it is important to “ensure that the witness gives his evidence as best as he can, having refreshed his memory from the documents without any assistance”. He noted that he had made a similar ruling on another occasion, after an examination has commenced, that if a matter should arise which requires legal advice to be taken before further examination is to continue, an application could be made to him for that purpose with the examinee identifying to the court the area of advice he would be seeking. As mentioned earlier, the Master thinks it appropriate to adopt a similar approach in the present situation, before the commencement of the examination. 12.[Examinee] challenges this ruling as a matter of principle. Neither he nor his legal advisers have looked at the documents supplied by the liquidators at this stage. 13.A fair balance is to be struck between the uninhibited right to legal advice and the need to ensure the integrity and effectiveness of the examination in that the evidence of the examinee should remain his own unrehearsed and untainted evidence. I am not persuaded by [examinee’s counsel], counsel for [examinee], that the Master has over-stepped the line. 14.[Examinee]’s right to seek legal advice in general on his examination is not curtailed. He was a senior [profession], there is no suggestion that he requires assistance in perusing or understanding the documents provided for the purpose of refreshing his memory. 15.[Examinee’s counsel] has emphasized repeatedly that he and those instructing him are mindful of their professional ethics and duties that they may not coach a witness, and gave assurance that that would not happen in giving legal advice to [examinee] in respect of the documents provided. [Examinee’s counsel] gave as examples the kind of legal advice that may be provided: [examinee] may wish to ascertain from his lawyers if there are other documents which are relevant to an issue but have not been included in the bundle; or he may wish his lawyers to advise him which documents relate to which of the issues to be canvassed in the liquidators’ list of issues as these topics are very broad and general. 16.I agree with Miss Linda Chan for the liquidators there is a heightened risk in this situation if [examinee] is allowed to go through the documents with [examinee’s solicitors] and counsel for seeking legal advice in general, particularly as the legal advisers have advised other examinees and have taken part in earlier examinations and are privy to documents and evidence given in the earlier examinations, which they accept should not be divulged to [examinee]. It seems to me that the legal advisers would be put in a very difficult position. What if some of the documents provided to [examinee] are among the documents canvassed in an earlier examination? And what if another examinee was shown in the examination a document relevant to an issue but not included in the bundle provided to that examinee? Are the advisers of [examinee] to inform him the bundle [examinee] is given is likewise incomplete or show [examinee] that further document? If the legal advisers are to advise him which of the documents are relevant to which of the issues in the liquidators’ list (the topics are common to all the examinees), are they to have regard to their knowledge and information acquired in respect of the previous examinees, or are they to erase from their minds the knowledge and information they have already acquired? 17.Common sense should prevail in this situation. In the ordinary course, the examinee is entitled to advance notice, in general terms, of the topics on which he is to be examined (Re Arrows Limited (No. 4) [1995] 2 AC 75 at 101G to 102A; In re Norton Warburg Holdings Limited and Norton Warburg Investment Management Limited [1983] BCLC 235). There is no invariable rule or practice what further information should be provided to the examinee to prepare him for the examination, it is a matter for the unfettered discretion of tribunal seized with the conduct of the examination to do what is fair in all the circumstances of the case. 18.[Examinee’s counsel] has accepted that it is a basic principle of giving evidence that once an examination has begun, legal advisers would need leave of the court to speak with an examinee. That principle is to guard against the risk that a witness’s testimony may be affected or compromised if he is allowed to consult with his legal advisers in the course of giving evidence. The Master’s assessment of this particular situation is that the risk is not any less. I am inclined to agree with him. 19.[Examinee’s counsel] further submitted there is no clear legal basis to support the Master’s ruling. I disagree. 20.[Examinee’s counsel] said he is not putting his case at a high constitutional level. Nevertheless, he seeks to rely on Article 35 of the Basic Law which provides that Hong Kong residents shall have the right to confidential legal advice for timely protection of their lawful rights and interests. I am given to understand that [examinee] has the status of a Hong Kong permanent resident, notwithstanding he has left Hong Kong to live in England. The right to legal advice is for protection of lawful rights and interests. This right may be restricted where there is danger that the evidence of a witness may be contaminated and there is risk that the course of justice may be compromised. As mentioned earlier, [examinee]’s right to seek legal advice in general on his examination is not curtailed. 21.Miss Chan has cited dicta from various decisions in England and Australia in the context of criminal proceedings and ordinary civil litigation to demonstrate the strictness of the rule designed to guard against the risk of coaching or training witnesses and what is permissible in what is known as “witness familiarisation” (the decision of the English Court of Appeal in R v Momodou [2005] 2 All ER 571 at paragraphs 61 to 65; the decision of Lewison J in Ultraframe (UK) Limited v Fielding (No. 1) [2005] EWHC 1638 at paragraphs 22 to 31; and the decision of Young J in Re Equiticorp Finance Limited; ex parte Brock (No. 2) (1992) 7 ACSR 13 at 16 to 17). I find such dicta helpful and instructive, I do not propose to set them out in extenso. I note that in England, great care is taken in the witness familiarisation process that the process should not touch on any of the matters in issue in the proceedings and nothing in it should play on or trigger the witness’s recollection of events. 22.Lastly as to the point that it would be inimical to confidentiality if [examinee] should be required in applying for leave to disclose to the court the area or matter for which he needs legal advice, I do not see why that should involve divulging confidential information. 23.For the above reasons, I would dismiss this appeal with costs to the liquidators.
Miss Linda Chan, instructed by Laracy Gall, for the Joint and Several Liquidators [Counsel], instructed by [solicitors], for the Applicant |
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