Professional Documents
Culture Documents
B HCA 2448/2014 B
E
COURT OF FIRST INSTANCE E
ACTION NO 2448 OF 2014
F ____________ F
G BETWEEN G
L L
Before: Hon Au-Yeung J in Court
M Dates of Hearing: 27 and 28 March 2018 M
O O
_____________
P DECISION P
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R R
A. INTRODUCTION
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1. There are 2 summonses before the court made by the Defendant
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(“BOC”):
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2. The Plaintiff was wound up in the Cayman Islands in 2012. An
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ancillary winding-up order was made in Hong Kong on 1 September F
2014. Mr Borrelli has been one of the Liquidators appointed by the
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Cayman Islands court and the Hong Kong Court respectively.
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3. The Plaintiff was hopelessly insolvent, with provable claims in excess
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of US$400 million. Ongoing investigations showed that the Plaintiff’s
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4. There were transfers of funds made between November 2006 and
N December 2009 (“the Transfers”) from the Plaintiff’s account with BOC N
5. Supreme Well and its bank accounts were controlled by the Plaintiff’s
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former management. Supreme Well did not have any business operations
R and was struck off the Register of Companies in the BVI after receiving R
US$355.5 million from the Plaintiff. The Liquidators do not know the
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ultimate recipients of the Plaintiff’s cash.
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breach of contract, dishonest assistance, knowing receipt, breaches of E
duty and of trust, conspiracy, negligence and/or unjust enrichment.
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7. The Indorsement of Claim (“the Indorsement”) expressly stated as G
follows:
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“THIS WRIT is issued solely for the purpose of preserving the
I claims identified above in light of the pending expiry of I
possible limitation periods” and the Plaintiff “has made no
decision as to whether or not it will pursue the claims” which
J will be subject to “further and on-going investigations” by the J
Liquidators and the outcome of those investigations.
K To the extent that any prima facie limitation periods relating to K
the claims might have expired, and in circumstances where the
L Plaintiff only obtained knowledge of the claims in February L
2014, the Plaintiff intends to rely on provisions of the
Limitation Ordinance (Cap 347) either directly or by analogy to
M extend the relevant limitation period” M
N N
8. On 30 November 2015, ie one day before the expiry date, the
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Liquidators made an ex parte application to extend the validity of the O
Writ for 12 months (“the Extension Application”).
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its application against BOC (and BEA) for production of documents and
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oral examination of certain employees of the banks pursuant to s.221 of
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Cap 32 (“the s.221 Application”), for which judgment was then pending.
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of the Writ “for 12 months from the date of its expiry” (“the Extension E
Order”), ie up to 1 December 2016.
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11.Eight days later, on 15 December 2015, Harris J handed down his G
decision (“Harris J’s Judgment”) largely dismissing the Plaintiff’s s.221
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Application but ordering interrogatories to be served on BOC’s
J (a) The documents sought, save for one narrow category, were J
not documents “relating to the company” within the meaning
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of section 221(3) of Cap 32 and hence the court had no
L jurisdiction to order their production. (§16) L
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12.The Plaintiff obtained, from Harris J, leave to appeal on the E
construction of section 221(3) and his holding thereunder but not on other
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grounds.
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13.On 3 November 2016, the Court of Appeal declined to give leave on
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further grounds that failed before Harris J. The Court of Appeal held
15.Shortly before the expiry date, the Plaintiff purported to serve the Writ
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by leaving and by ordinary post on 29 November 2016. There is dispute
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as to the date of service.
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16.BOC submits that the Extension Order should be set aside because:
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(a) There were no good reasons or matters capable of being
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good reasons advanced for the extension. What were
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Appeal; and
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(c) The Liquidators were guilty of material non-disclosure in
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failing to inform the Master that some causes of action have G
expired before filing of the Writ and that some causes would
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expire if the Writ was not renewed.
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17.BOC also submits that service of the Writ ought to be set aside
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because:
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(a) The Writ was not left at the registered office of BOC on
L 14th floor, Bank of China Tower, 1 Garden Road, Hong Kong L
O (b) The deemed date of service by ordinary post was after expiry O
made, BOC submits that it must follow that the Writ was not served
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during the period of validity and the action should stand dismissed.
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19.The Liquidators oppose both applications. They say that the grounds
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for seeking the extension was the Liquidators’ genuine views that they
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before pursuing serious allegations against BOC in costly and risky E
litigation.
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20.Whether there were matters capable of amounting to good reason was G
to be determined by reference to the circumstances prevailing at the time
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the Extension Application was made and not by reference to a subsequent
K 21.The Liquidators also submit that Harris J’s Judgment was of limited K
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22.Further, BOC has been provided with a copy the Writ since March
O 2015. BOC relied on it in the s.221 Application as the source of the O
23.The Liquidators deny that failure to bring Harris J’s Judgment to the
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attention of the Master amounted to material non-disclosure. If it did, the
S non-disclosure was innocent. S
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B 24.Mr Manzoni SC, counsel for the plaintiff, conceded that Mr Borrelli B
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25.If there was material non-disclosure, the Liquidators request the court E
to affirm or regrant the Extension Order.
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26.As to service of the Writ, the Liquidators contend that service had G
been validly effected by leaving with the receptionist who received the
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Writ on behalf of BOC. Ordinary post was effected 2 clear days after
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B. LEGAL PRINCIPLES FOR SETTING ASIDE THE EXTENSION
ORDER
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28.The power to grant extension of validity of a writ involves a two-stage
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process under Order 6, rule 8(2) of the Rules of the High Court (“RHC”).
H In the first stage, the plaintiff must first establish matters amounting to H
stages are not “watertight” compartments for all purposes and some
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relevant factors may overlap: Chow Ching Man v Sun Wah Ornament
L Manufactory Limited [1996] 2 HKLR 338 at 341B-C (Bokhary JA, as he L
O O
29.Where the failure to serve a writ within its normal validity period is
P the result of a choice, then it is necessary to decide whether the choice P
was made for a good reason, meaning one which is at least capable of
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amounting to a good reason: Chow Ching Man, supra, at 344C.
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30.The court does not ordinarily treat a plaintiff’s desire to see through
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some parallel set of proceedings as a good reason for holding up service
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full particulars may be capable of being a good reason. In Portico E
Housing Association Ltd v Brian Moorehead & Partners (1986) 6 ConLR
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1, at p 8, Stephenson LJ, having referred to Howells v Taylor and Walker
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decided in 1981, stated as follows: G
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35.The rationale has been explained in Sealegend Holdings Ltd v China E
Taiping Insurance (HK) Co Ltd [2013] 4 HKLRD 508 at §29, per
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Godfrey Lam J:
Commercial Bank v Haque [1994] CLC 230 at 241H, per Evans LJ.
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37.It was only 3 months before the issue of the Writ that Harris J had
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determined to re-open the petition to wind up the Plaintiff in Hong Kong
R and to grant the petition in Hong Kong. At that stage there were good R
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reasons to be suspicious of fraudulent conduct which required S
investigation.
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B 38.The liquidation was complex but the Liquidators had limited books B
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Cayman Islands, against a total of 18 defendants. None had been served E
pending further investigations by the Liquidators. The Liquidators’
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attempt to seek disclosure of information from the Plaintiff’s former
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management and other individual or entities have met with opposition. G
H H
39.The Liquidators wanted to be responsible in pleading a case of fraud
I against BOC with proper particulars. They were aware of their duties to I
act in the interests of the creditors, their public interest in the proper
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investigation of the Plaintiff’s affairs and to avoid incurring costs for the
K pursuit of an unmeritorious claim against BOC. K
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40.The Liquidators’ basis for the Extension Application was that there
M was not enough information to make an informed decision on whether the M
Plaintiff had a viable claim against BOC which they should pursue.
N N
Borrelli-1st (placed before the Master) was replete with examples of such
O concerns of the Liquidators. O
P P
41.The Liquidators therefore needed to carry out further investigations,
Q not limited to the s.221 Application. Borrelli-1 st deposed that the Q
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the Writ was the possibility that further documents would be obtained
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through the s.221 Application, bridging large gaps in the Liquidators’
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understanding of BOC’s knowledge and conduct.
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43.In fact, Mr Manzoni SC acknowledged in his written submission
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(§§53 & 56) that the only means of obtaining relevant information
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regarding BOC’s knowledge and conduct in relation to the subject G
payments stated in the Writ was the s.221 Application.
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I 44.There was frank disclosure to the Master that judgment on the s.221 I
st
Application was pending. Borrelli-1 informed the Master that BOC had
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argued that the documents sought did not relate to the Plaintiff and were
K not reasonably required by the Liquidators; and had argued that the K
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45.The s.221 Application was not a straightforward application. The
O hearing took 3 days and Harris J’s Judgment was handed down 3 months O
want to ensure that they had obtained, as far as possible, all information
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concerning the propriety of the acquisition by the Company of the
S Technologies and to trace the proceeds of the acquisition (§36 of his S
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47.Failure to serve the writ within the first 12 months was a deliberate
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choice of the Liquidators. I do find that choice to be supported by
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matters capable of being good reasons at the time of the Extension Order. G
However, that is not the end of the Extension Application. Further
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analyses is necessary as it may have impact on the exercise of the court’s
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48.At this inter parte hearing, the court can take into account Borrelli-3rd
K and Harris J’s Judgment notwithstanding that they were post-Extension K
Order.
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their functions.
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S 50.Both Harris J and the Court of Appeal never lost sight of the fact that S
one of the Liquidators’ purposes for the s.221 Application was to “assess
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decide whether or not to proceed, they did not have enough to plead a E
case of fraud. That, in my view, is sophistry. Harris J did not just mean
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that there was enough for the Liquidators to decide to proceed but also to
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decide not to proceed. G
H H
52.The Liquidators did not accept Harris J's Judgment until the Court of
I Appeal’s refusal of leave to appeal (Borrelli-3rd, §§27 & 59). They had I
submitted to the Court of Appeal that they were still not in possession of
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any requisite information to point to BOC’s knowledge of any fraud or
K breach of duty by the Plaintiff’s management; that they could not point to K
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53.Mr Manzoni SC submits that Harris J’s Judgment was of limited scope
Q as it only dealt with internal documents of the BOC to see if there were Q
legal justifications for the Transfers; that Judgment did not remove the
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entire basis of the Extension Order.
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55.However, all of these reasons have in fact been put before Harris J.
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See the confidential affidavit of Borrelli dated 11 February 2015, §§23 &
J 87. J
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56.Borrelli-3rd, §35 further identified specific acquisitions of further
L information since the Extension Order. L
M M
57.Firstly, there were said to be documents received from Paul Weiss.
N The Liquidators received the first tranche in November 2015, and further N
tranches in April, June and August 2016. Paul Weiss was the law firm
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which had carried out independent “internal investigation” into the
P Plaintiff’s business and affairs in 2009 and cleared the management of the P
R 58.However, Borrelli-1st did not mention how the Paul Weiss documents R
would have let the Liquidators learn more about BOC’s knowledge of the
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fraud, the information the Liquidators expected to obtain, the volume of
T documents, how long it would take to review them and why this would T
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B justify the grant of a 12-month extension. It turned out that the Paul B
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59.Secondly, the Liquidators had made enquiries as to the true market E
value of the Technologies and that required further work. However,
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ascertaining such market value was not mentioned in Borrelli-1 st. In any
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case, this only went to proof of the view already formed by the G
Liquidators that the Technologies were not of commercial value, rather
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than help them to decide the viability of the case against BOC. Applying
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62.The Liquidators also interviewed relevant persons involved in the
S Plaintiff’s affairs. The s.221 Application relating to Bank of East Asia S
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affidavits.
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E
were ongoing not only with respect to the knowledge and conduct of E
BOC, but also with respect to the nature and consequences of the
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suspicious transactions themselves, the location of the assets seemingly
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misappropriated, and the conduct of other persons potentially responsible G
for the losses incurred by the Company.”
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reasons to extend the Writ on the date the Extension Order was made.
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or his legal advisers to decide the question, hence it is no excuse for the
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applicant subsequently to say that he was genuinely unaware, or did not
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court’s assessment of the application in question, and it is no answer to a E
complaint of non-disclosure that if the relevant matters had been placed
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before the court, the decision would have been the same: Gee, 6th ed, at
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§9-003; New Asia Energy Limited v Concord Oil (Hong Kong) Limited, G
unreported, CACV 347/1998, 3 November 1999, at pp.4-5, Keith JA.
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has the responsibility of ensuring that all relevant points are presented
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clearly and distinctly: Gee, at §9-005.
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that: (a) the defence is one which can reasonably be expected to be raised
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in due course by the defendant, and (b) the defence is not one which can
Q be dismissed as without substance or importance. Gee, at §9-007; New Q
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B parte order where there is little hope of doing so on the substantial merits B
E
71.In deciding whether to set aside an ex parte order on the ground of E
material non-disclosure, the court adopts a four-limb test:
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(a) Was there non-disclosure of facts?
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(b) Were the facts not disclosed material?
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(c) Was the non-disclosure innocent?
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D2. Application of the law to non-disclosure of Harris J's judgment
O 72.It is not disputed that the Liquidators had not returned to the Master O
with news of Harris J’s Judgment; nor had they alerted the Master to any
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possible defence of BOC arising out of that Judgment.
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73.Mr Manzoni SC does not dispute that the continuing duty of R
disclosure applies, post-ex parte order, to situations where a claimant has
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obtained an ex parte order on a basis which he knows he could no longer
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support, or where the court has been misinformed, or has been given T
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E
definition. There are no authorities that apply the continuing duty to an E
extension application. In Network Telecom (Europe) Ltd v Telephone
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Systems Intl Inc [2004] 1 All ER, 418, at §§83 & 85, Burton J held that he
G
would not have set aside the ex parte order on the ground of non- G
disclosure in the absence of any prior case which had extended the
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continuing duty to disclose, beyond a ‘nuclear weapons’ case, to service
I out of the jurisdiction. He found that the duty in that case was not I
something that would then have been obvious to a litigation solicitor.
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K 75.Mr Manzoni SC contends that the continuing duty should not apply to K
(a) The nature and scope of any such duty must accommodate
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features of the jurisdiction which distinguish it from, for
N example, Mareva jurisdictions. N
O (b) The Court should have regard to whether the duty ought to O
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E
unnecessarily wasteful of time, costs and court resources. E
For example, the Liquidators may have to inform the Master
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of the s.221 Decision, the intended appeal, give an update on
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the progress of the Liquidators’ review of documents G
produced by Paul Weiss, or their pursuit of other
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investigations, including what new questions those reviews
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Court of Appeal did not address the issue, as the alleged non-disclosures
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were not of such materiality to justify the discharge of the injunction in
L question: [2018] HKCA 113, §35, per Barma JA (Yuen JA agreeing). L
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78.However, with regard to the contention in paragraph 75(a), there was
N Hong Kong authority which held that the continuing duty applied to all N
expiry of the extended period: Lee Fai v Chan Kui [1997] HKLRD 1154,
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at 1157F, per Godfrey JA.
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court to re-grant the order. E
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81.With regard to the contention in paragraph 75(c), the submission is an
G
exaggeration. The law does not require the Liquidators to continuously G
update the Master on every development in the investigation. It is the
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material changes of circumstances that the Liquidators need to report to
the Master.
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P P
83.With regard to the contention in paragraph 75(e), a defendant should
Q not be forced to seek accelerated service or to strike out a stale claim. Q
This was all the more so when BOC’s knowledge of the existence of the
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Writ was gained in the first 12 months of its validity, in the course of the
S s.221 Application. There was nothing which pointed to BOC’s knowledge S
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B 84.I see no reason for not applying the continuing duty of disclosure to an B
extension application.
C C
E
tested this way. (i) Had Harris J's Judgment been available at the time of E
the Extension Application, should the Plaintiff have produced it for the
F F
Master’s consideration? (ii) Alternatively, but for the fact that Harris J
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was seized of the s.221 Application, would the Master have to decide if G
seeking the subject matter of the s.221 Application was capable of being a
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good reason? The answers to these 2 questions were plainly “yes”. The
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86.The Extension Order was not sealed until 5 months after its making, ie
K on 26 May 2017. There was ample time for the Liquidators to consider K
the effect of Harris J's Judgment and update the Master on it.
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ongoing, it could not be said with certainty that in the light of Harris J’s
N N
Judgment, the Master would have definitely granted the Extension Order
O or for the full 12 months. O
P P
88.Was the non-disclosure innocent? Having regard to paragraphs 74 and
Q 79, I am of the view that the non-disclosure was innocent. Q
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89.In my view, to set aside the Extension Order in such circumstances
S would be wholly disproportionate to the prejudice the Plaintiff would S
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B would have set aside the Extension Order on the ground of non-disclosure B
of Harris J’s Judgment but re-granted the extension for the same period.
C C
D D
E. ISSUE (3): WHETHER THERE WAS MATERIAL NON-
DISCLOSURE IN FAILING TO INFORM THE MASTER OF THE
E E
POSSIBLE DEFENCES IN LIMITATION
F 90.Where a writ was issued before the period of limitation relevant to the F
I (1) At a time when the writ is still valid and before the relevant I
(2) At a time when the writ is still valid but the relevant period
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of limitation has expired;
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(3) At a time when the writ has ceased to be valid and the
M relevant period of limitation has expired. M
N N
91.In both categories (1) and (2), it is still possible for the plaintiff
O (subject to any difficulties of service which there may be) to serve the O
Writ before its validity expires, and, if he does so, the defendant will not
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be able to rely on a defence of limitation.
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92.In category (1) but not category (2) cases, it is also possible for the
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plaintiff, before the original writ ceases to be valid, to issue a fresh writ
S which will remain valid for a further 12 months. S
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B 93.In neither category (1) nor category (2) cases, therefore, can it B
properly be said that, at the time when the extension application is made,
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a defendant who has not been served has an accrued right of limitation.
D D
E
94.In category (3) cases, it is not possible for the plaintiff to serve the E
writ effectively unless its validity is first retrospectively extended. In this
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category, therefore, it can properly be said that, at the time when the
G
extension application is made, a defendant on whom the writ has not been G
served has an accrued right of limitation.
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I 95.I will add a category (4), where a writ was issued after the limitation I
period of a relevant cause has expired. The defendant has an accrued
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right of limitation at the time when the extension application is made.
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96.In the present case, there is no dispute that the prima facie limitation
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period was 6 years for all causes of action. This was how Borrelli-1 st
M dealt with the limitation issues: M
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period had not yet expired when the Writ was issued. This contradicted
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the Indorsement which implied the opposite, which was why the Plaintiff
L intended to rely on the provisions of the Limitation Ordinance to directly L
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st
98.At this hearing, Mr Manzoni SC concedes that §89 in Borrelli-1
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contained a “mistake”, but he submits that it was a mistake without
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significance. If the limitation defence was available prior to expiry of the Q
Writ, neither issue of the writ nor its extension would have affected that
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defence.
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99.Without disrespect, I am unable to agree. Mr Borrelli himself never
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admitted that it was a mistake. Borrelli-3 rd, §81, expressly refused to
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limitation periods and went at length to deal with the limitation defences.
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E
(eg the Fund Flow Diagram exhibited to Borrelli-1st) from which the E
Master could compare with the Indorsement and work out for himself
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when any claim would prima facie have expired. The Liquidators had to
G
ensure that all relevant points were presented clearly and distinctly to the G
Master in the affidavit: Gee, at 9-005.
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statute barred on the date the extension order was granted and the rest
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would be barred in less than 8 weeks’ time (415f-417c). Hutchison LJ
M held that to be a very serious omission, amounting to a failure to comply M
S S
Underlying Claim Category
according to
Date Event Kleinwort v Benson
T T
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A A
B B
Underlying Claim
1. 3 November Payment of US$30 million by Category
C according to C
2006 5 cashier orders from the Plaintiff’s
Kleinwort v Benson
BOC account to Supreme Well’s BEA
D Account. D
2. 5 March 2007 Payment of US$76.8 million by
E 13 cashier orders from the Plaintiff’s E
BOC account to Supreme Well’s BOC
Account.
F F
3. 29 May 2007 Payment of US$7.45 million by
2 cashier orders from the Plaintiff’s
G BOC account to Supreme Well’s BOC G
Account.
H 4. 2 August 2007 Payment of US$22 million by H
4 cashier orders from the Plaintiff’s
BOC account to Supreme Well’s BOC
I Account. I
Q
9. 3 July 2009 Payment of US$21.75 million by Category 2 Q
1 cashier order from CMED
Technologies’ Standard Chartered
R Account to Supreme Well’s BOC R
Account.
S S
T T
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A A
B B
Underlying Claim
10. 4 December 2009 Payment of US$20 million by Category 1
Category
C C
1 cashier order from CMED according to
Technologies’ Standard Chartered Kleinwort v Benson
D Account to Supreme Well’s BEA D
Account.
[Note: the Liquidators did say that Supreme Well made payments totalling
F $234.79 million into accounts held with BOC.] F
H
within the 6-year limitation period, the description of Event 10 did not H
show BOC’s involvement. Moreover, the Plaintiff did not alert the
I I
Master that grant of the Extension Order for the period after 4 December
J
2016 would deprive BOC of a limitation defence. The Plaintiff had not J
attempted to segregate Event 10 from other Events. Even if the Master
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would have granted an extension order just for Event 10, he would have
M M
104. Category 2 totalled US$132.25 million. Amongst Events 7-
N 9, the identity of the payors were not shown on the 2 cashier orders dated N
10 March and 3 July 2009. Mr Borrelli did not explain how it could be
O O
suggested that BOC had knowingly or dishonestly assisted in the receipt
P of such sums. Further, although §62 of Borrelli-1st stated that the Plaintiff P
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B a limitation defence which had accrued prior to the issue of the Writ. B
BOC could still run the limitation defence despite the Extension Order.
C C
D 106. With the greatest respect, that was sophistry. Those other D
E
events (worth US$203.25 million) fell within Category 4. The E
Liquidators knew about it as reflected in the Indorsement. Mere issue of
F F
the Writ had deprived BOC of the limitation defence and BOC would
G
have to incur costs on striking it out. G
H H
107. By not mentioning the preceding paragraph, the Liquidators
I further misled the Master into believing that the Plaintiff would be denied I
an unexpired claim as large as US$355.5 million if the Writ was not
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extended.
K K
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109. Mr Borrelli’s affidavits said nothing about BOC’s knowledge
S of the fraud to enable the Plaintiff to invoke s.26 of the Limitation S
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E
BOC’s knowledge was the s.221 Application (which failed). E
F F
110. I find that there was not only material non-disclosure but
G
also misrepresentation of the limitation issues before the Master. G
H H
F. ISSUE (4): IF THERE HAD BEEN MATERIAL NON-DISCLOSURE,
I
WHETHER THE EXTENSION ORDER SHOULD BE AFFIRMED OR I
RE-GRANTED
J F1. Legal principles for affirmation or re-grant of an ex parte order J
K 111. If the Court finds that there has been material non-disclosure, K
the general rule is that it should discharge the order and refuse to renew
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it. Nevertheless, the Court has jurisdiction to continue or re-grant the
M order. The relevant factors can be found in Excel Courage Holdings Ltd M
fair disclosure.
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(b) The Court should assess, among other things, the degree and
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extent of the culpability with regard to the non-disclosure,
S and the degree of importance of the undisclosed matters to S
the application (although the fact that the judge might have
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made the order anyway is of little significance).
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(d) There are no hard and fast rules as to whether the discretion
F
to continue or re-grant the order should be exercised, and the F
court should take into account all relevant circumstances.
G G
H
112. An important issue will always be how material the H
information was. Where the undisclosed information was central to the
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case, the order granted should be discharged notwithstanding the absence
K K
F2. Application of the Legal principles
L L
113. Computation of the 6-year limitation period in this action
M would have posed no difficulty to the most junior solicitor or liquidator. M
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E
the fraud. However, this prejudice may be reduced if, eg, the Liquidators E
can establish their claims against other entities. Anyhow, the court should
F F
take a hard stance on Liquidators who are guilty of material non-
G
disclosure and misrepresentation. G
H H
116. The prejudice to BOC, if there is a re-grant, would be great,
I for BOC would have to incur costs for striking out this action on I
limitation grounds. Moreover, the relevant Events dated as far back as 12
J J
years. There was potential prejudice in terms of difficulty in collecting
K evidence when officers involved had left the employ of BOC and K
December 2016. It may also be expected that a lot of the evidence would
N N
be documentary in nature and as early as 2012 the Liquidators have
O specifically requested BOC that document preservation procedures be O
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117. Mr Manzoni SC prays in aid Wing Fai Construction v
S Yip Kwong Robert (2011) 14 HKCFAR 935, §§64 & 68, wherein Ma CJ S
said that “the role of the court as not being to prevent actions being
T T
litigated but quite the opposite”. He suggests that the foundation (for
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B striking out, in that case) is whether or not there had been abuse of B
process.
C C
D 118. With respect, that authority does not trump the legal D
E
safeguards which are to ensure fairness to both parties. If the test of E
abuse is of any relevance, it was the Liquidators who have abused by
F F
their material non-disclosure and misrepresentation.
G G
119. Just as the lack of prejudice to a defendant per se is not a
H H
good reason for extending a writ, the lack of prejudice to a defendant per
K F3. Findings K
reasons at the time of the Extension Order. However, those matters have
M M
turned out to be not good reasons because of Harris J's judgment. The
N “other investigations” of the Liquidators could not carry their case N
a re-grant.
S S
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the application for setting aside service of the Writ briefly for the sake of
E E
completeness and costs.
F F
I I
123. Section 827 should be strictly adhered to by leaving the writ
J at the registered office of the limited company: Re Hongkong Zhongxing J
M
124. In this case, the Writ was not left at the Registered Office but M
at the reception desk on the ground floor of BOC Tower on 29 November
N N
2016. The process server (Mr Tsang Tak Wah) explained that the
O
reception desk was surrounded with BOC signage. He asserted that O
a receptionist (Ms Lui) told him to leave the Writ there, which was denied
P P
by Ms Lui. Ms Lui stamped the Writ with BOC’s chop marked “Bank of
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125. The court is unable to resolve the conflict of evidence on the
is impossible for the court to decide or infer what the gesture of Ms Lui
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B or Mr Tsang meant and whether what was taken out from the drawer for B
E
evidence that she was employed by an entity called Sun Chung Property E
Management Co Ltd and not BOC. And there was no dispute that it was
F F
perfectly possible for the process server to go up to the 14 th floor. He
G
only had to register his personal details at the reception desk. The staff at G
th
the reception desk on 14 floor could acknowledge service of the Writ.
H H
J J
H. ISSUE (6): WAS SERVICE OF THE WRIT BY ORDINARY POST
K
EFFECTED BEFORE EXPIRY OF THE VALIDITY PERIOD? K
2016”.
N N
O 129. The postal chop bearing the date of 30 November 2016 was O
the best evidence of the posting date of 30 November. The Writ was thus
P P
deemed to be served on the second working day after posting, ie
Q 2 December 2016, after the Writ had expired: Practice Direction 19.2, §2. Q
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130. Mr Manzoni SC submits that BOC has failed to adduce
S “convincing evidence” to the effect that the Writ was not received within S
the time for service: Bank of China (Hong Kong) Ltd v Cheung King
T T
Fung [2007] 1 HKLRD 462, Tang JA (as he then was) at §34. BOC’s
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December 2016 with the Writ attached, as if the Writ was received by
C C
BOC that day, without stating the actual date of receipt.
D D
E
131. With respect, Bank of China (Hong Kong) Ltd v Cheung E
King Fung has to be read in context. There, the plaintiff had served the
F F
writ by registered post and filed an affirmation of service showing that
G
the copy writ had not been returned to the plaintiff through the post G
undelivered to the addressee. In applying to set aside the default
H H
judgment, the defendant claimed that he had not received the writ and
I applied to set aside the judgment. It was in that context that Tang JA said I
that the court did not have to accept a defendant’s assertion that he had
J J
not received the writ through the post and that a defendant was required
K to provide convincing evidence of receipt. K
L L
132. In the present case, the Plaintiff has not even crossed the
M threshold of proper service by leaving at the Registered Office or by M
ordinary post within the specified time. BOC v Cheung King Fung did
N N
not begin to apply.
O O
Q Q
I. ISSUE (7): SHOULD ANY IRREGULARITY IN SERVICE BE
CURED?
R R
134. Under Order 2, rule 1, RHC, defective service of
S proceedings, however gross the defect and even a total failure to serve, is S
curable by the court, which may exercise its discretion not to set aside
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service if (i) the irregularity is technical rather than substantive; and (ii)
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B the court is satisfied that the proceedings have come to the attention of B
E
135. Examples of the court’s exercise of such discretion can be E
found in:
F F
(a) Hong Kong and Shanghai Banking Corp Ltd v Ong Tong
G G
Sing [2008] 3 HKLRD 444, §§29-36, DHCJ Gill where,
H
following substantial inter-partes correspondence, the writ H
was served by delivering a copy of the writ to the
I I
defendants’ office and leaving it with the receptionist, rather
defendant.
R R
S 136. In the present case, BOC had received a copy of the writ in S
the context of the s.221 Application, but it was within the first year of
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validity.
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E
recognized by s.827 of Cap 622. E
F F
138. Mr Manzoni SC submits that it is inappropriate for
G
a defendant who has instructed solicitors in related proceedings, to refuse G
to instruct their solicitors to answer questions about whether they are
H H
instructed to accept service in the hope that service by some other means
I may be avoided. The Court takes a dim view of such a “catch me if you I
can” approach by defendants: see Bank of China (Hong Kong) Ltd v
J J
Chen Jianren [2009] 3 HKLRD 163, DHCJ Carlson at §§23-24.
K K
extension. However, what the defendant would want was to have the
R R
plaintiff re-serve the writ in Mainland China, obliging the plaintiff to go
S through the process under Order 11 with all the delay and expense. S
T T
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E
Deputy Judge Carlson nevertheless invoked Order 2, rule 1 (to cure E
irregularity) and Order 3, rule 5 (to extend time) (§18). He found that
F F
renewal of the writ would not deprive the defendant of a limitation
G
defence. Having referred to several authorities, Deputy Judge Carlson G
came to the conclusion that the defendant has received the writ and knew
H H
what the case was all about and was able to respond to it. “In the absence
I of any prejudice”, in circumstances that the writ had been brought to the I
defendant’s attention in November 2006, he upheld the master’s deemed
J J
service order (§24).
K K
Q 142. The plaintiff in Chen Jianren had purportedly served the writ Q
properly on the defendant at the last known addresses within the first year
R R
of the validity. Here, the Plaintiff deliberately deferred service of the
S Writ till the end of a 2-year validity period (compared to only one year in S
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D 143. I therefore set aside service of the Writ and the action is D
E
dismissed. E
F F
J. COSTS
G 144. In principle, costs should follow the event so that BOC will G
J
13 November 2017, §45, Yuen JA. J
K K
K. CONCLUSION
L 145. I order as follows: L
M M
(1) In respect of BOC’s summons to set aside the Extension
N
Order, the Extension Order is set aside; N
O
(2) In respect of BOC’s summons for setting aside service of the O
Writ, the service is set aside;
P P
(3) The action is dismissed;
Q Q
(4) On a nisi basis, costs of both summonses and the action be to
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BOC with certificates for 2 counsel only, ie Mr Huggins SC
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personally.
C C
E E
F F
G G
H H
(Queeny Au-Yeung)
Judge of the Court of First Instance
I High Court I
J J
Mr Charles Manzoni SC instructed by and Mr Jason Karas (Solicitor
Advocate) of Lipman Karas, for the Plaintiff
K K
M M
N N
O O
P P
Q Q
R R
S S
T T
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