Read the full judgment text of FACV 000028/2008 on BabelCite. This FACV judgment was delivered on 24 February 2009 before Chief Justice Li, Mr Justice Bokhary PJ, Mr Justice Chan PJ, Mr Justice Ribeiro PJ and Lord Hoffmann NPJ.
Civil procedure – discovery and inspection – companies in liquidation – private examinations under s.221 of the Companies Ordinance (Cap 32) – transcripts and notes of s.221 examinations and interviews conducted under threat of s.221 – Companies (Winding-up) Rules r.62 – Rule of court safeguarding information obtained by an extraordinary, inquisitorial process – whether such transcripts and notes are open to inspection on discovery in ordinary civil litigation between the company in liquidation and a civil opponent – whether leave under rule 62 is required – whether the inquisitorial nature of s.221 proceedings precludes legal professional privilege – whether litigation privilege attaches under the dominant purpose test (Waugh v British Railways Board) – legal professional privilege as a fundamental constitutional right under arts 35 and 41 of the Basic Law – Kwan J had held the s.221 transcripts and notes were not protected by legal professional privilege and ordered specific discovery in favour of EYHK, an audit negligence defendant, and the Court of Appeal affirmed – origin of the private examination jurisdiction traced from s.115 of the English Companies Act 1862 (Re Gold Company; Re Greys Brewery Company; Re Norwich Equitable Fire Insurance Company; North Australian Territory Company v Goldsborough, Mort and Company; Learoyd v Halifax Joint Stock Banking Company) – more recent development in Re Esal (Commodities) Ltd (No.2), Re Barlow Clowes Gilt Managers Ltd, Marcel v Commissioner of Police of the Metropolis, and Hamilton v Naviede – public interest exception recognised in criminal and regulatory contexts (Re Poulson; Re Barlow Clowes; Hamilton v Naviede) but not in ordinary civil litigation – purpose of s.221 is not limited to reconstituting the state of the company's knowledge but extends to discovering facts and documents relating to potential claims (British & Commonwealth Holdings Plc v Spicer & Oppenheim; Re Pantmaenog Timber Co Ltd; Kong Wah Holdings Ltd v Grande Holdings Ltd) – concurrent findings of fact reviewed and reversed on the basis of affidavit evidence – dominant purpose was for liquidators to obtain legal advice in connection with litigation in real prospect, since by May 2004 the only remaining assets were potential claims and a protective writ had been issued naming EYHK, with most interviews conducted after the writ and all but two after its issuance – Re L (A Minor) distinguished as concerning child welfare in care proceedings – Three Rivers (No 5) too narrow an approach; Pratt Holdings preferred – appeal allowed and disclosure orders set aside, with costs nisi to Akai here and below and partial lifting of the stay of Kwan J's order for a further affidavit.
Legal issues: Disclosure of s.221 private examination transcripts and notes on discovery in ordinary civil litigation · Whether litigation privilege protects s.221 transcripts and notes · Whether s.221's statutory purpose and the inquisitorial nature of s.221 proceedings prevent legal professional privilege attaching · Effect of rule 62 of the Companies (Winding-up) Rules on disclosure of s.221 material
Outcome: Appeal allowed; orders for disclosure of the s.221 transcripts and notes set aside.