Litigation, Hong Kong updates

Assessment of costs in District Court out of date
RPC
  • Hong Kong
  • 10 December 2019

The monetary jurisdiction for civil cases heard by Hong Kong's busy District Court was significantly increased in December 2018. In light of this, the District Court now determines more complex and important civil cases. Therefore, a good case can be made for the abolition of the so-called 'Two-Thirds Rule'. If this is a step too far, a legislative provision should be implemented that provides judges with a wide and flexible discretion to depart from the rule where appropriate in all the circumstances.

Ad hoc admission of English QC with local barrister
RPC
  • Hong Kong
  • 26 November 2019

In an important and interesting judgment, the High Court declined to admit an overseas barrister unless he appeared with a local barrister. The applicant had applied for ad hoc admission to conduct a case in Hong Kong, on the basis that he would appear with the two solicitor advocates who had charge of the case. Therefore, they sought the removal of what is a usual condition to the grant of ad hoc admission – namely, that the applicant (an English Queen's Counsel) appear with a local barrister.

False statement of truth leads to prison
RPC
  • Hong Kong
  • 12 November 2019

Mathnasium Center Licensing, LLC v Chang is another recent example of the courts sentencing makers of false statements of truth to a period of imprisonment for contempt of court. In this case, the defendant signed a false statement of truth in a defence filed on behalf of a company which he controlled and which was being sued by the plaintiff. The court found that it was beyond a reasonable doubt that the defendant must have known about the falsity of the admission and thus found him to be in contempt of court.

Review of 'fraud exception' to summary judgment
RPC
  • Hong Kong
  • 29 October 2019

Summary judgment is not available in Hong Kong civil actions which include a claim based on an allegation of fraud. The rule has traditionally been broadly interpreted by the courts, such that any claim raising an allegation of dishonesty against a defendant prevents a plaintiff from applying for summary judgment. The inflexibility of this rule, and the ambit of the meaning of 'dishonesty' in this context, have been the subject of judicial criticism. Now, there are proposals afoot to abolish the so-called 'fraud exception'.

Permission to appeal order for production of documents to liquidators refused
RPC
  • Hong Kong
  • 15 October 2019

The Court of Appeal has refused permission to appeal an apparently wide-ranging order for the production of documents made in favour of the liquidators in China Medical Technologies Inc v Tsang. Despite the respondent's best efforts, the Court of Appeal decided that the issues stated to arise out of its judgment did not raise questions of great general or public importance. The outcome of the appeal is bolstered by a legislative amendment which amounts to a more coextensive power.

Setting aside orders to extend validity of writs
RPC
  • Hong Kong
  • 24 September 2019

In China Medical Technologies Inc (In Liquidation) v Bank of East Asia Ltd, the court granted an ex parte order extending the validity of a writ, effectively giving the plaintiffs an additional year in which to effect service. The High Court has now discharged that order with the consequences that service was set aside and the action dismissed. This is the latest in a number of similar decisions and suggests that the courts will in future scrutinise extension applications much more closely.

Court rejects solicitors' application to dismiss based on time-bar
RPC
  • Hong Kong
  • 10 September 2019

The High Court recently rejected a defendant solicitors' firm's application to strike out a plaintiff's claim on the ground that it was commenced too late. Given the relatively high threshold in Hong Kong for an applicant to succeed with an application to strike out a claim before trial, the court's decision is not surprising. However, the written reasons given in the decision are a useful analysis of the legal principles involved in determining when a cause of action accrues for the tort of negligence.

Subpoena in aid of disciplinary challenge
RPC
  • Hong Kong
  • 27 August 2019

The High Court has once again been asked to review its jurisdiction to grant permission to issue subpoenas directed at witnesses. In this case, the court granted permission to issue two subpoenas directed at two senior doctors, requiring them to give evidence (supported by specified documents) in aid of a registered dentist's court challenge arising out of disciplinary proceedings against him. The decision reiterates the relatively low threshold for the issue of subpoenas, while also illustrating their possible tactical use.

Court reviews issue of subpoenas
RPC
  • Hong Kong
  • 13 August 2019

The High Court recently considered a prospective witness's application to set aside a subpoena directed at him. The subpoena combined directions to the witness to give evidence at trial on behalf of the plaintiff and to produce the originals of certain transaction documents. The court set aside the part of the subpoena directed at giving evidence but not the part directed at producing documents. The decision provides useful guidance as to the general practice for issuing subpoenas.

Settlement offers and costs disputes
RPC
  • Hong Kong
  • 30 July 2019

The issue of liability for costs plays a big part in the settlement of protracted civil litigation in Hong Kong. In particular, where the parties refuse to bear their own costs, which party will pay the other's costs becomes an important consideration. As another recent case demonstrates, without prejudice settlement offers can (among other things) seek to protect a party's position as to costs. Such offers are a common feature of the local litigation landscape for good reason.

Costs recovery for DIY litigation
RPC
  • Hong Kong
  • 16 July 2019

Hong Kong has a high incidence of litigants in person, which is largely explained by the cost of civil litigation generally, the absence of class actions, contingent fee arrangements and third-party funding of most civil claims, and the financial eligibility limits for civil legal aid. As recent decisions show, the rates at which litigants in person are awarded costs are far from generous and, to get more, they have to prove that they had to work on the case during their working hours or that they suffered actual pecuniary loss.

Cross-examination of deponent and early disclosure
RPC
  • Hong Kong
  • 02 July 2019

In a recent case, the High Court allowed the plaintiff's application for an order that the first defendant and a representative of the second defendant attend a court hearing to be cross-examined on affirmations made by them in the proceedings. The case is a timely reminder of the seriousness of making affidavits or affirmations and of the need to be mindful of the documents to which they refer.

Court reviews non-party costs orders
RPC
  • Hong Kong
  • 18 June 2019

The High Court recently reiterated the general principles which govern its power to order a non-party to pay the costs of another party to court proceedings. The court's power is statutory but the general principles that govern the exercise of its discretion arise out of case law. The case law demonstrates that the court's discretion to make an order for costs against a non-party is wide. The interests of justice are paramount.

Court critical of late subpoenas
RPC
  • Hong Kong
  • 04 June 2019

A High Court judge recently dismissed a party's appeal against a refusal to grant permission to issue subpoenas directed at another party's legal representatives. At the same time, the judge reminded litigants and their legal representatives that subpoenas (directing a witness to attend court to give evidence, produce documents or do both) should be issued in a timely manner, and that late subpoenas which upset the court's case management of trial dates are likely to be frowned upon.

The gagging order and Norwich Pharmacal two step
RPC
  • Hong Kong
  • 21 May 2019

The Norwich Pharmacal order is an important tool for combating fraud. Given the prevalence of electronic and identity fraud, the ability of victims to recover lost money through the civil courts has assumed a high profile of late. For plaintiffs who fall prey to such fraudsters, the ability to obtain a court order prohibiting a defendant from disposing of (among other things) money in a bank account (ie, a Mareva injunction) and to obtain timely disclosure of details of alleged wrongdoing from a defendant's bank (eg, Norwich Pharmacal relief) is often crucial.

Settlement, costs and persons under disability
RPC
  • Hong Kong
  • 07 May 2019

The High Court recently handed down a practice note relating to the practice of making settlement offers or payments into court in cases involving claims on behalf of persons under a disability. The practice note confirms the previously understood position that the self-contained procedural regime for formal sanctioned offers and sanctioned payments in Order 22 of the court rules does not apply to claims for money arising out of proceedings on behalf of persons under a disability.

Courts confirm basis for indemnity costs
RPC
  • Hong Kong
  • 23 April 2019

A couple of recent first-instance decisions demonstrate the courts' wide discretion to award costs between parties based on a higher rate of recovery (referred to as an 'indemnity basis'). Such costs are not literally an indemnity – the receiving party does not recover all of their costs from the paying party. While indemnity costs are not the norm, many parties and their legal representatives often seek such costs without sufficient regard to whether this is actually justified.

Court ruling highlights importance of cross-examination
RPC
  • Hong Kong
  • 09 April 2019

A recent High Court decision confirms that the normal practice for trial of proceedings commenced by writ is for a witness statement to stand as the witness's evidence-in-chief without them having to give such evidence verbally prior to cross-examination. Further, where a person gives a witness statement but is unable to attend the trial, the weight to be attached to that statement (if any) is a matter for the trial judge.

Lawyers go where angels fear to tread
RPC
  • Hong Kong
  • 26 March 2019

In a relatively close-knit community such as Hong Kong, it is not uncommon for parties to proceedings or their witnesses, lawyers or experts to be known to a judge or tribunal member, which could create a perception of potential bias. In these circumstances, applications might be made for the recusal of the judge or tribunal member and for the case to be reassigned. Two recent cases serve as a timely reminder of the inherent difficulties and sensitivities involved in an assessment of apparent bias.

Waiver of privilege during court proceedings
RPC
  • Hong Kong
  • 12 March 2019

In a recent case before the High Court, a novel issue arose as to whether a party's deployment of privileged documents for the purposes of the trial of a preliminary issue concerning limitation would result in privilege in the documents being waived (lost) for the purposes of the main trial, in the event that the court held that the claim was not time barred. The case is a useful reminder of the potential danger of trying to deploy privileged material for the purposes of only part of court proceedings.

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