There are no statutory provisions empowering the Hong Kong courts to provide assistance and recognition to foreign insolvency office holders. The courts therefore rely on their inherent power (where appropriate) under the common law principle of modified universalism to provide such assistance. Although the application of this principle is not without its problems, the courts in recent years have shown some willingness to assist the effective implementation of cross-border insolvency and restructuring regimes.
In Bespark Technologies Engineering Ltd v JV Fitness Ltd the High Court recently took the opportunity to remind liquidators of their duty to give full and frank disclosure when making an ex parte (without notice) application to the court. A failure to do so could have serious consequences, including a refusal to approve the appointment of a liquidator or an order for his or her removal. The duty to be full and frank applies to all ex parte applications, so there are general lessons to be learned.
First Asia Finance International Ltd v Tso Au Yim & Yeung appears to be another example of a misconceived claim against a defendant solicitors' firm. In this case, the court held that the solicitors owed no duty of care to the plaintiff company (which was not a client) with respect to the preparation of a settlement agreement. The plaintiff also failed with a claim that it had informally retained the defendant solicitors with respect to the drafting of the settlement agreement.
The Judiciary Administration in Hong Kong has proposed to increase the monetary jurisdiction limits for civil claims in the District Court. The proposals were recently considered by the Legislative Council Panel on Administration of Justice and Legal Services, further to a report of the Judiciary Administration. The proposals appear to have broad agreement among different stakeholders and, subject to the passage of a necessary resolution in the Legislative Council, look likely to be implemented sometime in 2018.
Earlier this year, in Universal Capital Bank v Hong Kong Heya Co Ltd, the High Court of Hong Kong confirmed that the 'fraud exception' to the jurisdiction to order summary judgment applied where the plaintiff's claim raised an allegation of dishonesty against the defendant. In a more recent case, the court endorsed the attempt in Universal Capital to limit the otherwise wide ambit of the fraud exception.