Accent Delight International Ltd and Another v. Yves Bouvier and Another
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HCMP 573/2015 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 573 OF 2015 ________________________
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____________________ DECISION Background 1.On 15 June 2015, I heard counsel for the parties in these proceedings on the continuation of an ex parte Mareva injunction. On 19 June 2015, I handed down a decision holding that the plaintiffs had been guilty of material non‑disclosure in failing to draw the court’s attention to the fact that an argument was open that the governing law of the relationship between the parties may be Swiss law. That was a matter which I held should have been put before the ex parte judge for consideration in the exercise of discretion under section 21M(4) of the High Court Ordinance (“HCO”). 2.However I continued the injunction, and allowed time for the plaintiffs to seek a re‑grant. By summons dated 30 June 2015, a re‑grant of the Mareva injunction was sought on substantially the same terms. 3.The most recent statement of the principles to be applied in Hong Kong when considering the discretion to continue, discharge or re‑grant an injunction where there has been material non‑disclosure is that of the Court of Appeal in Excel Courage Holdings Ltd v Wong Sin Lai [2014] 3 HKLRD 642. The court adopted a summary of the main principles as set out by Deputy Judge Alan Boyle QC in Arena Corp Ltd v Schroeder [2003] EWHC 1089, in the following terms:
4.The Court of Appeal went on to say:
5.Mr Manzoni took me extensively through the judgment in Arena, and I have carefully considered the extremely thorough review of the authorities undertaken by the deputy judge in that case. 6.I understand the reference to the “penal” jurisdiction of the court in this context to be the punishment of the party guilty of material non-disclosure by either a denial of a remedy to which he would otherwise be entitled or costs or both. 7.These are the principles that I apply. What the ex parte judge was told 8.In order to determine precisely what the ex parte judge was told about the involvement of Swiss law in the matter I have carefully read the information that was put before the judge, and the transcript of the hearing. What follows is what the judge was told about the situation, first from the affidavit of Ms Dawson, the solicitor for the plaintiffs, second from Mr Beresford’s skeleton and third from the transcript. 9.Ms Dawson’s affidavit said that the relief was sought in aid of the plaintiffs’ claims against Mr Bouvier in the Principality of Monaco, and against Mr Bouvier, MEI and a Ms Rappo in civil proceedings intended to be commenced in Singapore, immediately prior to the making of the application: see §5. A description of the parties to the proceedings showed that the plaintiffs’ had Swiss counsel, and a beneficiary of the family trusts which owned the plaintiff companies was of Swiss nationality, that Mr Bouvier was a Swiss businessman and a Singapore permanent president and the majority shareholder and president of a Geneva Freeport: see §§9‑10. 10.It said that Mr Sazonov, the plaintiffs’ representative, instructed Mr Bouvier to act as an agent to negotiate the sale and purchase of 38 valuable artworks: see §12. It said the plaintiffs had only ever understood Mr Bouvier to receive a commission on sales, generally 2%, and they were not aware that he was allegedly inflating the purchase prices through MEI: see §§15‑16. 11.It describes Mr Bouvier’s arrest in Monaco on 25 February 2015: see §20, and describes the progress of the Monaco proceedings: see §§21‑25. That description exhibited a Monaco legal opinion from Ms Gazo. In §31 it is recorded that the payments for the purchase price of the artworks were all made to MEI’s bank account located in Switzerland. Transcripts of Mr Bouvier’s interviews with the Monegasque police are exhibited. 12.Under a heading: “FULL AND FRANK DISCLOSURE” in §46, the following statement is made, in respect of the content of an interview given to a Swiss publication in which Mr Bouvier sought to set out the basis of his defence to the Monaco criminal proceedings:
13.The skeleton makes it plain that the Singapore proceedings, in aid of which the Mareva injunction was sought, were principally based upon fiduciary duties arising from a contract of agency, and the assertion that by interposing a “seller” owned by Mr Bouvier, a secret profit had been made in breach of the obligations of the agency contract. It referred to the Monaco criminal proceedings, and the intention of the plaintiffs to commence civil proceedings in Monaco. 14.The fact that the jurisdiction sought to be exercised arose under section 21M, HCO was dealt with comprehensively including a reference to Refco Inc v Eastern Trading Co [1999] 1 Lloyd’s Rep 159, 170‑171, and Motorola Credit Corpn v Uzan [2004] 1 WLR 113 at 115. The particular passages referred to in those decisions dealt specifically with the English equivalent to section 21M(4), that is the question in United Kingdom, of whether it is inexpedient, and in Hong Kong, unjust or inconvenient, to make an order. 15.When dealing with the assets in Hong Kong, the skeleton referred to the fact that Mr Bouvier’s “broker’s fees” for the early transactions were paid to an account with a Geneva bank, but later to HSBC in Hong Kong. 16.The skeleton, like the affidavit contained a heading: “Full and frank disclosure”. That contained the following paragraph:
A footnote referred the reader to the particular paragraphs of Mr Sazonov’s affidavit, which exhibited the trend of the interviews. 17.The next paragraph in the skeleton referred to an October 2006 sale agreement as a potential expression substantiating that defence. That defence was sought to be rebutted by Mr Beresford, by referring to Mr Sazonov’s evidence that he understood that MEI had been interposed to protect the confidentiality of the real, undisclosed, seller and that MEI was just a nominee controlled by Mr Bouvier. It was pointed out that the interposition of MEI may also have been to protect the confidentiality of the buyer. 18.A warranty in the October 2006 sale agreement was specifically referred to, but the Swiss law clause in the contract was not referred to. 19.There was no reference in either the affidavit of Ms Dawson or the skeleton that Mr Bouvier had asserted in the course of his police interviews in Monaco that the relationship between the parties was governed by Swiss law. 20.The transcript of the hearing makes it clear that in the course of the discussion the judge was reminded by counsel that in all but five of the transactions, MEI was the seller which issued an invoice and was paid in Switzerland: see p128F‑P. 21.The following exchange took place shortly thereafter; at pp130P‑131Q:
Mr Bouvier’s assertions to the Monaco police 22.The plaintiffs’ knowledge that Mr Bouvier took the view that the governing law of contracts was Swiss law came from statements made by Mr Bouvier to the Monaco police. In his second interview in Monaco, on 26 February 2015, Mr Bouvier said:
In his third statement to the Monaco police, again on 26 February 2015, Mr Bouvier said:
23.Mr Beresford accepts, as he must, that the ex parte judge was not told, either in the affidavit in support, in the skeleton, or orally at the hearing, that Mr Bouvier asserted that Swiss law was applicable to the arrangements between the parties. 24.It is right that the passages from the interviews that I have set out were exhibited to Ms Dawson’s affidavit. It is well established that the fact that a fact which may later be found to be material is contained in the exhibits is not an answer to material non‑disclosure: Standard Chartered Securities Ltd v Lai Arthur & Ors [1993] 1 HKC 375 at 380; Rever (AMA) Salon Ltd v For Danny & Ors [2001] 1 HKC 241 at 246E‑F. Swiss law on agency 25.By the time the matter reached me on 15 June 2015, both sides had put in expert Swiss law opinions on a number of issues of Swiss law. Although Mr Manzoni’s skeleton appeared to assert that at Swiss law the conduct of Mr Bouvier, assessed on the assumption that plaintiffs view of the facts was correct, was not actionable he did not present the matter in that way. Instead, he submitted that by failing to disclose that Swiss law may be the governing law of the relationship, a potential defence available to Mr Bouvier was not disclosed to the court. It was, Mr Manzoni said, material non-disclosure not to put that defence to the court. 26.The opinion put in for Mr Bouvier came from Prof Dr Lüchinger. As to agency, this was said:
27.The opinion for the plaintiffs came from Mr Marc Joory. In relation to agency he said:
28.Prof Dr Lüchinger responded to Mr Joory in the following terms:
29.Mr Manzoni emphasised the requirement noted by both experts that the existence of a contract, (of whatever form of agency), will depend upon whether the parties had exchanged mutual declarations of intent; see Lüchinger §11; Joory §19. Was the non-disclosure deliberate 30.Mr Manzoni argued that the non-disclosure was both deliberate and not innocent. He said that the plaintiffs knew the significance of Swiss law and had made a deliberate and conscious decision not to draw it to the court’s attention. 31.He pointed out that there had been no explanation from the plaintiffs of the non‑disclosure, and said that the onus was on the plaintiffs to give a proper explanation. He says that in the absence of an affidavit, there is no evidential basis to suggest that the non‑disclosure was innocent. In that respect he relied upon the following passage from the judgment of Anthony Chan J in UES International (HK) Ltd v Maritime Maruba SA (unreported, 19 November 2013, HCA 632/2011) at §54, where the judge, rejecting a re‑grant of an injunction following material non‑disclosure said:
32.That statement is undoubtedly correct, but it does not follow that it is necessary that there should be an affidavit explaining the non‑disclosure, or that in the absence of an affidavit it should be found that there is no explanation. 33.First, I had made an order that there be no further affidavits. It may well be that on occasions it will be necessary to file an affidavit explaining non‑disclosure. Had it been necessary in this case I have no doubt at all that Mr Beresford would have sought leave to file an appropriate affidavit, and Mr Manzoni was obliged to acknowledge that he could not oppose such an affidavit. 34.Second, the passage cited does not place an “onus” on a party accused of non‑disclosure to blame any non‑disclosure by way of affidavit. To do so would, as Mr Beresford submitted, reverse the burden of proof and would be prima facie objectionable as being inconsistent with the presumption of innocence in the exercise of the penal jurisdiction. 35.There is no reason why innocence in the non‑disclosure should be found in the general circumstances disclosed by the case. In so saying, I accept that the element of gravity is a fact that will weigh in the balance, together with all the circumstances when deciding, on the balance of probabilities, whether the non‑disclosure was deliberate or innocent. 36.First, other than that of the orders, Mr Manzoni was unable to point to any advantage, substantive or tactical, that the plaintiffs might have obtained in not referring the ex parte judged to the possibility that Swiss law might be the governing law of the contract. He submitted that a significant advantage has been obtained as a consequence of the inappropriate non‑disclosure in that disclosure orders and affidavits had been secured, a step that could not now be undone. 37.However, the information obtained by way of the disclosure orders had been sealed and have not yet been seen by those advising the plaintiffs. So if the disclosure orders are found to have been wrongfully obtained, those orders can be discharged and the disclosed material is protected. In simple terms, the step can be undone. 38.Deliberate material non-disclosure is a charge of the utmost gravity to level at lawyers, particularly when, as Mr Manzoni acknowledged in his skeleton, the lawyers were well respected. I accept Mr Beresford’s submission that it is common sense to start with the assumption that reputable lawyers do not deliberately mislead the court. To find otherwise requires a cogent evidential basis. It is entirely different of course, if a party were to conceal relevant information from his solicitors or counsel. In those circumstances, deliberate non-disclosure will be more likely to be found from the mere fact of the non-disclosure, and an affidavit is more likely to be required. 39.It is beyond argument that the plaintiffs’ lawyers are highly reputable, as are the defendants’ lawyers. In the absence of any particular advantage being demonstrable that might arise from the concealment of the possible involvement of Swiss law there is simply no evidential basis upon which it can be said that the non‑disclosure, although subsequently revealed as material, might be said to be deliberate. 40.Mr Beresford was perfectly able to argue, on the basis of the information before the court, that the proper conclusion is that the plaintiffs and their advisers simply did not appreciate the significance of Mr Bouvier’s assertion to be Monaco police that the contract might be governed by Swiss law. It is quite understandable that the consequences of Mr Bouvier’s assertions in respect of Swiss law might not be fully appreciated, when even by 13 March 2015, when the orders were obtained, Mr Bouvier had not commenced proceedings in Switzerland for the recovery of the money he believed was due to him on the final purchase. Despite having time to commence proceedings in Switzerland, (one might have thought, bearing in mind the assertion of Swiss law governing the contracts, an immediate logical response to the action in Monaco), Mr Bouvier had done nothing to substantiate his assertion that Switzerland was the appropriate jurisdiction. 41.It is useful to remember too, that it is a common occurrence in Hong Kong courts, and I have no doubt in Singapore courts, that where an action proceeds on a contract, the governing law of which is another country, that law is duly proved, and the local court makes its decision. At the time the injunctions were sought, those advising the plaintiffs had no reason, other than the assertion in the interviews, which assertion had not been pursued, to think that the Swiss courts might become involved in the matter. Even if Swiss law governing the contracts, there is no reason why the proceedings should not continue in Singapore, where Mr Bouvier lived, with the Singapore courts appropriately applying Swiss law. 42.I accept Mr Beresford’s submission that in the circumstances of this case the failure to inform the ex parte judge Mr Bouvier asserted the proceedings were governed by Swiss law was not a deliberate, but an innocent non-disclosure. As Mr Beresford eloquently put it, from the circumstances, the non‑disclosure can be seen to be venial not venal. The significance of Swiss law 43.Mr Manzoni argued that Swiss law was significant, first because of the circumstances in which agency might arise, and second because, he said, Swiss law provided a defence to the assertions made by the plaintiffs. 44.The contention that Swiss law was significant because of the circumstances in which agency might arise arose from the statements of both Prof Dr Lüchinger and Mr Joory that the existence of a contract of agency will depend upon whether or not the parties had “exchanged mutual declarations of intent”. The opinions were plainly based on the Swiss Code of Obligations, Article 1 (referred to by Mr Joory as the basis for a contract) which provides:
45.I accept Mr Beresford’s submission that the expression “a mutual expression of intent” is likely to mean nothing more than the concept of a consensus ad idem, a concept well known to our law. It is significant in my view that in her second opinion Prof Dr Lüchinger did not in any way challenge Mr Joory’s opinion that the mutual expression of intent may be express or implied. That is clear from Art 1. SCO, and shows that there is no particular magic to the expression “mutual expression of intent”. 46.Thus, whether at Swiss law, Hong Kong law, or Singaporean law, in order to establish the contractual agency arrangement alleged by the plaintiffs, it will be necessary to establish that there had been a meeting of minds between Mr Rybolovlev, through Mr Sazonov, and Mr Bouvier, that an agency was established. It is plain from the exchange between Mr Beresford and the ex parte judge that she was aware that a contract of agency must be established. 47.I am satisfied that even if the judge had been shown the situation of agency law in Switzerland that information would not have affected the outcome of the application for the injunction. 48.The ex parte judge was well aware of the contention of Mr Bouvier that he was a vendor of artworks in his own right, and not an agent. Plainly, at Hong Kong law, at Singaporean law and as is revealed by the Swiss law opinions, it is an answer to a claim based on a contract of agency that the putative agent was not in fact an agent but a dealer in his own right. 49.Those defences, whether the requirement to have a meeting of minds for a contract, or that Mr Bouvier would assert to be a seller in his own right, were not concealed from the judge. It is not necessary to say to a High Court judge that for there to be a contract there requires proof of a meeting of minds between the parties to the contract. The matter is so fundamental as to not require discussion. The “seller in his own right” defence was specifically discussed in an exchange with counsel. It matters not that there was an additional jurisdiction open to consideration, because there is no suggestion that the position would be any different in Switzerland. The non‑disclosure in this respect might be material if there were significant differences between Hong Kong law and Swiss law. But there are not. And, in any event there were no Swiss proceedings either on foot or threatened by a letter before action. 50.In the circumstances, I am satisfied that the ex parte judge was not in any way misled by the non-disclosure of the possible involvement of Swiss law. Significance of Swiss law under section 21M(4) 51.The Court of First Instance in Hong Kong is empowered by section 21M, HCO to grant relief in respect of foreign proceedings which are capable of giving rise to a judgment which may be enforced in Hong Kong. The court may refuse to exercise that jurisdiction in the circumstances set out in section 21M(4), which provides:
52.The equivalent United Kingdom legislation[4] is in these terms:
53.It was not suggested that there is any significant difference between the expression “inexpedient”, or the expression “unjust or inconvenient”. 54.The principal authorities on the interpretation of this provision are Refco and Motorola (see §14 above) and Credit Suisse Fides Trust SA v Cuoghi (CA) [1998] QB 818. In each of those decisions the merits of the matter were before one single jurisdiction overseas, and there was no suggestion that another jurisdiction might become involved in the merits. In Refco, the primary proceedings were before the courts of Northern Illinois; in Motorola, the primary proceedings were in New York. In both cases, the defendants were resident in the primary jurisdiction, but had assets in the jurisdiction in which relief was sought, the United Kingdom. In Credit Suisse, the primary proceedings were in Switzerland, but the defendant, against whom relief was sought, was resident, and had assets, in England. 55.In both Refco and Motorola the following passage from the decision of Lord Bingham CJ in Credit Suisse, at 882D was cited[5]:
56.An example of a circumstance where it was found to be unjust or inconvenient to grant section 21M relief is found in the decision of the Court of Appeal in Compania Sud Americana de Vapores SA v Hin-Pro International Logistics Ltd, (unreported, 11 March 2015, CACV 243/2014). There, Compania Sud Americana, a South American shipping company was suing Hin-Pro, a Hong Kong company in England on bills of lading relating to the delivery of goods between South America and the PRC. The contracts contained exclusive jurisdiction clauses in favour of litigation in England. Hin-Pro ignored the exclusive jurisdiction provisions and sued in Wuhan. 57.The English courts issued anti-suit injunctions prohibiting Hin-Pro from taking further steps in the proceedings in Wuhan. The orders were ignored by Hin-Pro which had not taken part in the English anti-suit action. As Hin-Pro was a Hong Kong company, Compania Sud Americana came to Hong Kong and sought an injunction in Hong Kong under section 21M, in support of the English anti-suit injunctions. 58.The injunctions were granted ex parte and continued, but later set aside by the Court of First Instance. The setting aside was upheld by the Court of Appeal on an appeal by Compania Sud Americana. 59.The anti-suit injunctions issued by the English courts were directed to the activities of Hin-Pro in the courts in Wuhan. Whilst it was right that there was a dispute in respect of the exclusive jurisdiction clause, there was no doubt that the Wuhan courts were seized of the proceedings. To make orders in Hong Kong, in the assistance of the anti-suit injunctions issued by the English courts, directed at the conduct of the Wuhan proceedings, was to obstruct or hamper the management of the case by the Wuhan courts. Plainly, it is not appropriate for the Hong Kong court to become involved in a dispute between two other countries as to where jurisdiction in respect of a contract was to be found. 60.The case is a clear demonstration of circumstances in which it may be unjust or inconvenient for the Hong Kong court to become involved in granting relief. 61.Compania Sud Americana is also a good example of why it is necessary, on an ex parte application, to disclose whether or not any other jurisdictions might be involved in proceedings. Plainly, where proceedings are on foot in two different jurisdictions, both based on the same subject matter, there is a risk of conflicting, inconsistent or overlapping orders in other courts. Disclosure is essential to enable the court to carry out the exercise required under section 21M(4), and determine whether or not it is unjust or inconvenient to make the grant of relief. Each case must be dealt with on its own facts and merits. 62.In the present case, Switzerland was potentially a jurisdiction which could be involved in proceedings. It was accordingly a material non‑disclosure that the ex parte judge was not informed of Mr Bouvier’s assertion that the Swiss courts were the proper courts in which to bring the proceedings. 63.If, for example, after his arrest, Mr Bouvier had gone to the Swiss courts and sued for the money he said was due on the most recent purchase, (a discussion about which had taken him to Monaco), it would have been vital to inform the ex parte judge of those proceedings. With the plaintiffs bringing their proceedings in Singapore, and Mr Bouvier bringing proceedings in Switzerland, a potential conflict of the Hin-Pro nature arose and under section 21M(4) the Hong Kong court would need to decide if it was unjust or inconvenient to become involved in the dispute between the parties by granting relief in Hong Kong. 64.It is not without significance in my view that even now, Mr Bouvier has not sought, in Singapore, to move the proceedings to Switzerland. Nor has he commenced proceedings in Switzerland. His application to stay in Singapore based on forum non conveniens argues that the proceedings ought to be in Monaco. A good arguable case 65.In §§47‑52 of my decision of 19 June 2015, I dealt with the factual circumstances of the dealings between the parties, and the terms of the e‑mails in which Mr Bouvier apparently sought to reduce the price at which he was selling the artworks should be reduced. It had been argued for Mr Bouvier that the e-mails were mere “negotiation tactics”. The discussion led me to the conclusion that the factual circumstances raised a very strong case of breach of fiduciary duty or deceit. 66.Mr Manzoni sought to explain the negotiation tactics in the e‑mails in this way. Mr Bouvier was, he said, the purchaser in his own right of the artworks, and was endeavouring to sell them to Mr Rybolovlev at a price which exceeded the price that Mr Bouvier had paid. This sale at a higher price, was, Mr Manzoni said, an action Mr Bouvier, as the owner of the artwork, was perfectly entitled to take. Mr Manzoni said that Mr Rybolovlev acquired precisely what he wanted to acquire, at a price with which he was happy. 67.The “negotiation tactics” on the part of Mr Bouvier, as I understood Mr Manzoni’s submission, involved offering the artworks to Mr Rybolovlev at what might be considered a greatly inflated price, certainly more than the market price which might be said to have been established on the sale from the original owner. In order to ensure that a sale was obtained at a higher price than Mr Bouvier had paid, (thereby ensuring a profit to Mr Bouvier), the e-mails were sent to encourage Mr Rybolovlev to accept the higher than market price, although lower than the opening price suggested by Mr Bouvier. 68.In an application for summary judgment under Order 14 the argument could not be characterised as moonshine, but, as I indicated during the hearing, the highest I would put it is that I can see how the argument may be made. I remain of the view that there is a very strong case of breach of fiduciary duty or deceit. Discussion 69.In applying the principles set out at §3 above, I take into account the foregoing findings of fact and the conclusions I have reached. 70.I recognise that the general rule is that where there has been a breach of the duty of full and fair disclosure the order should be discharged and not renewed, however I have jurisdiction, to be sparingly exercised, to continue or re‑grant the order. 71.In §§30‑42 above I have examined whether or not the non-disclosure was deliberate, and have come to the conclusion that it was innocent. The primary relevance of the possibility that Swiss law may be the proper law of the contracts lies in the consideration of the issue under section 21M(4) as to whether or not it would be unjust or inconvenient to grant the application. In Compania Sud Americana there was a conflict between two jurisdictions and the Court of Appeal agreed with the lower court’s conclusion that that conflict rendered it unjust or inconvenient to Hong Kong courts to become involved in the dispute. 72.In the present case, in the absence of proceedings in Switzerland, that conflict issue did not arise, although it was a future possibility. The ex parte judge was well aware of the existence of the Monaco proceedings, but they are principally criminal in nature, although they will be able to proceed to a civil conclusion in respect of a limited number of the artworks, if criminal liability is found in due course. 73.Mr Manzoni did not suggest that there was any risk of conflicting, inconsistent or overlapping orders between the Singaporean and Monegasque courts. The relief sought in Hong Kong does not in any way obstruct or hamper the management of the civil proceedings in Singapore or the criminal or civil proceedings in Monaco. It was not suggested that making the orders sought would obstruct or hamper any proceedings that might be issued in Switzerland 74.The inevitable conclusion that the ex parte judge would have come to, had the potential involvement of the Swiss courts been disclosed, would have been that it was neither unjust nor inconvenient to grant the relief sought. Consequently, the matter not disclosed, although material, was neither particularly important nor significant to the outcome of the application. 75.Weighing all of these matters I have come to the conclusion that the non‑disclosure in this case, although material, may properly be described as innocent. It was a non‑disclosure that did not impact at all on the decision that was ultimately made. 76.In Arena, the deputy judge cited[6] the following passage from Slade LJ in Brink’s-MAT Ltd v Elcombe [1988] 1 WLR 1350 at 1359:
77.In §§47‑52 of my decision of 19 June 2015, and in §§65-68 above I have considered the issue of a good arguable case and have come to the conclusion that there is a very strong case of breach of fiduciary duty or deceit against Mr Bouvier. Great care must be taken in the decision to discharge and not re‑grant an injunction for material non-disclosure where the non‑disclosure is innocent, does not have an impact on the final decision, and the plaintiff establishes a very strong case. It is here that the tension between the two kinds of public interest referred to by Court of Appeal in Excel Courage Holdings arises. 78.On the one hand, the administration of justice must be protected and if an injunction was granted without full disclosure and a significant advantage thereby obtained, the courts will not hesitate to take away the injunction. But if the non‑disclosure, although material, is innocent and not important, the application of the golden rule may become an instrument of injustice in the deprivation of a protection that would otherwise be given to an innocent party. 79.Here, other than the grant of the Mareva injunction and disclosure orders, the plaintiffs have had no significant substantive or tactical advantage that cannot be remedied. If the non‑disclosure had been deliberate, or had a significant impact on the ultimate decision, it would be right to take away the injunction, and with it the disclosure orders. But where there is a very strong case of breach of fiduciary duty and, and the non‑disclosure, although material, it is innocent and has no impact on the ultimate decision, it would in my view result in an injustice to the plaintiffs if they were deprived of the Mareva and disclosure orders. 80.In the present case, having regard to the nature of the non‑disclosure, and the strength of the plaintiffs’ case, it would be quite out of proportion to the offence to punish the plaintiffs by depriving them of the orders they have obtained. Disposal 81.For the foregoing reasons I am satisfied that this is a proper case in which, notwithstanding that material non-disclosure has been found, I should exercise my discretion in favour of the plaintiffs and order that the relief granted should not be set aside but continued. 82.In so holding I have weighed in the balance whether or not the injunction should be discharged but immediately re-granted, with the consequence that the defendants would be entitled to a costs order. The material non‑disclosure in this case was not, in my view, so serious as to warrant that penalty. 83.I understand from Mr Manzoni that if the injunctions were to be continued or re-granted the defendants would wish to be heard further on the specific terms of the injunctions. Leave is accordingly reserved to apply. Costs 84.There will be an order nisi that the costs of the proceedings be to the plaintiffs, to be taxed on the party and party basis if not agreed.
Mr Roger Beresford, instructed by Freshfields Bruckhaus Deringer, for the 1st and 2nd plaintiffs Mr Charles Manzoni SC, leading Mr Val Chow, instructed by Zhong Lun Law Firm, for the 1st and 2nd defendants [1] Swiss Code of Obligations [2] Swiss Code of Obligations [3] By Mr Joory [4] Civil Jurisdiction and Judgments Act 1982 section 25 [5] In Refco, at First Instance, at 163, per Rix J; in the Court of Appeal, at 172, per Morritt LJ and at 175, per Millett LJ. In Motorola, (partially), at 136, §78 per Potter LJ giving the judgment of the court. [6] At §179 |
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Further hearings and rulings under HCMP 573/2015