Cross-border Enforcement — Court of Appeal rejects fishing expedition backed by letter of request from foreign court
The Court clarified that such requests would be examined by reference to Hong Kong law. In the present case, the request amounted to impermissible fishing.
Re Evidence Ordinance (Cap 8) of the Laws of Hong Kong
|Reference:|| HKCA 766,  HKEC 2911|
|Court:||Court of Appeal|
|Before:||Hon Lam VP, Chu JA and G Lam J in Court|
|Date of Judgment:||16 September 2020|
|Appearance:||Robin D’Souza (led by Charles Manzoni SC), instructed by Jones Day, acted for the successful Respondents|
The Court of Appeal upheld the High Court’s decision to set aside an order granted pursuant to the US Federal Court’s request to examine non-party witnesses in Hong Kong. The Court clarified that such requests would be examined by reference to Hong Kong law; in the present case, the request amounted to impermissible fishing.
The Applicants obtained judgement in the US Federal Court for the sum of US$100,738,980 against various judgment debtors. The Applicant alleged that one of the judgment debtors is owed receivables from two companies including SSG Capital Partners I, LP (“SSG Capital”) and Value Team Corporation (“VTC”). The Respondents are officers of the two companies.
Subsequently, the Applicants were appointed as collection agents by the Washington State Court to collect the receivables of the judgment debtor, including the alleged receivables owed by SSG Capital and VTC.
The US Federal Court issued a letter of request to Hong Kong Courts, seeking to compel directors from SSG Capital and VTC to provide deposition testimony regarding the alleged receivables. Neither SSG Capital nor VTC were parties to the US proceedings.
The requested order was initially granted, but later set aside by the Hong Kong Court of First Instance. The Applicants appealed to the Court of Appeal (“CA”).
The Hon Mr Justice LAM, VP (giving the Judgment of the Court) affirmed the High Court’s decision to set aside the order. The Court clarified, among others, that:
• Section 76(3) of the Evidence Ordinance does not provide for pre-trial discovery against non-party witnesses other than those falling within the limited scope of Norwich Pharmacal discovery;
• While weight must be given to the necessity and relevance of the evidence procured, it is ultimately for the Hong Kong judge to decide – on the basis of Hong Kong law – whether the request constitutes a fishing exercise;
• If the evidence is not obtained for use of the requesting court to resolve live issues before it, the request for oral examination of non-party witnesses would amount to a fishing expedition, which cannot be allowed.
On the facts of the present case, the purpose of the examination was clearly investigatory. The letter of request did not mention the use of the evidence in any pending or contemplated adjudicative process in the Federal Court. Moreover, whether the alleged receivables were in fact owed by SSG Capital and VTC continues to be in dispute.
The CA concluded that, in the absence of any garnishee proceedings, the Applicant’s request amounted only to a fishing exercise to obtain information before they plot out their next move.
This case commentary is authored by Tracy Chu.
|Robin was called to the Bar in 2006. He practices in civil and commercial litigation with experience in areas of company and shareholder disputes, insolvency, contracts, property, trust, probate, civil fraud, and asset recovery. He regularly acts for and against multinationals, listed companies, investor funds, and high net worth individuals.
|Tracy joined Chambers in 2020 upon completion of her pupillage with Mr. Chan Chi Hung SC, Mr. Tim Kwok, Mr. Giles Surman, Ms. Catherine Wong and Mr. Robin D’Souza.
Disclaimer: This article does not constitute legal advice and seeks to set out the general principles of the law. Detailed advice should therefore be sought from a legal professional relating to the individual merits and facts of a particular case.