Professional Documents
Culture Documents
D D
HCA 1822/2013
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and
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B
BETWEEN B
D and D
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(Heard Together)
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K DECISION K
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L L
Introduction
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1. There are three summonses before me, all filed by the defendant
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(“KPMG”) in these three actions, pursuant to Order 12, rule 8A seeking
O orders to require the plaintiff (“CMED”) to serve three protective writs O
issued by CMED.
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Q
2. CMED, now in liquidation, was a company incorporated under Q
the laws of the Cayman Islands traded on the NASDAQ from August 2005
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to March 2012. On 27 July 2012, it was placed into liquidation by the order
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B
3. CMED is hopelessly insolvent with provable claims in excess B
of US$400 million, but the Liquidators could only locate tangible assets of
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nominal value. During the course of their investigation, the Liquidators
D revealed prima facie evidence that the former management of CMED had D
stolen at least US$355 million from CMED through the FISH and SPR
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Technology acquisitions. The Liquidators have identified potential causes
F of action against a number of entities and individuals connected with CMED F
J
financial years ended 31 March 2004 to 2008. It also provided other advice J
and services to the CMED group for the financial years ended 31 March 2004
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to 2010. The Liquidators also identified possible causes of action against
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KPMG as outlined in the protective writs which may provide a source of L
recovery to CMED and its creditors. These causes of action comprise claims
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for, inter alia, loss and damage for breach of contractual, tortious and/or
which are the subject of the protective writs. Hence the protective writs have
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not yet been served. CMED has accordingly sought and obtained extensions
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B
of the validity of the protective writs. The protective writs will now expire B
on 19 June 2018 pursuant to the order of Lok J (the “Extension Order”). By
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these summonses KPMG seek orders requiring CMED to serve the protective
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Section 221 Orders
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6. The Liquidators first contacted KPMG in July 2012 three days
Ordinance in February 2015 (the “section 221 proceedings”) soon after their
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appointment in Hong Kong. These proceedings have been protracted and
K resulted in no less than nine hearings before and six orders by Harris J K
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Kong partnership and a member firm of the KPMG global network including O
KPMG Huazhen in the People’s Republic of China (“PRC”). KPMG and
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KPMG Huazhen are separate entities over which KPMG has no control.
Q
Although KPMG was officially the auditor of CMED, the field work in the Q
PRC in respect of the audit work in 2008 and 2009 was done by KPMG
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Huazhen as “component auditor”. Many of the documents sought by the
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B
the PRC Ministry of Finance (“MOF”), the regulator of accounting firms in B
the PRC.
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K
the Liquidators. K
allowed to take any copies out of the PRC. The deadline for compliance
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was extended to 31 May 2017.
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10. KPMG has complied with the above order insofar as documents
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located or accessible in Hong Kong are concerned. However, in respect of
R the Mainland documents, the Liquidators have been given access in the R
office of KPMG Huazhen but have not been provided with redacted copies.
S S
The reason proffered by KPMG is that by its letter dated 15 May 2017
T KPMG Huazhen expressly refused to provide copies unless and until a T
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B
11. On 26 May 2017, KPMG and KPMG Huazhen received an B
opinion issued by MOF dated 22 May 2017 (the “MOF Opinion”). It stated
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as follows:
Mainland and the Hong Kong Special Administrative Region (the “Mutual
O O
Arrangement”). KPMG argued that the MOF Opinion did not amount to the
P “written direction” required by KPMG Huazhen in its letter dated 15 May 2017. P
Q
13. The Liquidators took the view that KPMG had de facto control Q
R
over KPMG Huazhen and applied by summons filed on 6 June 2017 seeking R
certain orders which were purportedly to enforce KPMG’s compliance with
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the Section 221 Orders. That summons was dismissed as Harris J took the
T
view that the issue of control had not been resolved and that if the Liquidators T
took the view that KPMG had no legitimate excuse for failing to comply with
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B
the order and wished to enforce compliance, the appropriate course was to B
commence contempt proceedings against KPMG. Thus, the matter is
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presently at an impasse in relation to the documents located in the PRC.
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The law
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14. Pursuant to Order 12, rule 8A, a person named as a defendant in
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a writ which has not been served on him may by notice served on the plaintiff
G require him to either serve the writ on the defendant or to discontinue the G
action against him. If the plaintiff fails to comply with the notice, the court
H H
may on the application of the defendant by summons order the action to be
I dismissed or make such order as it thinks fit. There is a dearth of authorities I
on the court’s discretion under Order 12, rule 8A. Both parties referred me
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to Grande Holdings Ltd v Christopher Ho Wing On 1. However, counsel
K are divided as to the test to be applied in an application under this rule. K
L 15. Mr Hollander, leading counsel for KPMG, submits that the test L
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He quoted the following dicta of Godfrey Lam J in Sealegend Holdings Ltd O
v China Taiping Insurance (HK) Co Ltd : 2
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“ The law concerning the validity of a writ and its extension is no
mere formal procedural rule. Underlying it is the policy of the law
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that promotes finality to litigation, the prevention of stale claims,
and the protection of a defendant from having a claim hanging over
R his head indefinitely. Inasmuch as a plaintiff with a reasonable R
cause of action has a right to bring and serve proceedings within
prescribed periods, a (potential) defendant has a right not to be
S vexed by actions that are time-barred or writs that have expired, S
unless they are extended by the Court in accordance with the law.
T
It was open for six years, after the vessel was damaged, in this case T
1
HCA 565/2013 (unreported) 9 October 2013
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[2013] 4 HKLRD 508, para 29 U
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for the plaintiff to issue a writ and then open for another year for
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the plaintiff to serve it. These are generous time limits. The
present application concerns whether the plaintiff should be granted
C an indulgence where it has not served the proceedings on the C
3rd defendant within these limits. I am not persuaded that, post-
Civil Justice Reform, the court should more readily grant applications
D for extension of the validity of writs. In Hashtroodi v Hancock D
[2004] 1 WLR 3206, which was decided after the Civil Procedure
E Reform in England took effect in 1999, the English Court of Appeal E
said at [20]:
I
His argument is that an extension of the validity of the writ provides an I
extension of the statutory limitation period without the consent of the
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defendant which creates an obvious unfairness. The mechanism under
Ornament Manufactory Ltd 3 to forcing its service before the expiry of the
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period, the test would be whether there are good reasons for abridging the
Q period and whether in all circumstances, including balance of hardship, the Q
T
of the writ and in particular more than one extension of the writ; T
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[1996] 2 HKLR 338 at 341B–C U
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B
(2) whether the limitation period has (or is likely to have) passed; B
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16. On the other hand, Mr Manzoni SC, counsel for the Liquidators,
F submits that there is a distinction between an application for extension of the F
validity of a writ under Order 6, rule 8(2) and an application to dismiss a writ
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before service or compel its service before expiry. He submits, rightly in
H my view, that it is wrong for Mr Hollander to argue that the defendant has no H
defendant, the defendant may apply to have it set aside. All the issues
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required to be considered under the test in Chow Ching Man v Sun Wah
L Ornament Manufactory Ltd can then be ventilated in an inter parte hearing. L
N 17. A writ is valid in the first instance for twelve months but the N
court has jurisdiction to extend its validity from time to time for such period
O O
not exceeding twelve months at any one time: Order 6, rule 8(1) and (2). In
P an application to extend the validity, the test is that as set out in Chow Ching P
Man v Sun Wah Ornament Manufactory Ltd. But once that stage has passed,
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the argument about the need to maintain the limitation period must fall away.
R The period of validity of a writ, whether during the initial twelve-month R
when to issue the writ or not to issue it at all. This right of the plaintiff must
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B
be highly respected. This must be the starting point of consideration of any B
application seeking to accelerate the legal process. Thus in an application
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to compel service before expiry of the writ, the question must be whether
D there are good reasons why the proceedings should not be allowed to run its D
natural course.
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18. The applicant who seeks to accelerate this legal process must
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bear the burden of proof. What he has to prove could not be the usual
G elements as suggested by Mr Hollander in the case of an application for G
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considerations such as delay or prejudice would not suffice. He must, in J
my view, prove that it would be unjust if the proceedings are allowed to run
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its natural course, or put it in another way, that the plaintiff’s reliance on the
L
period of validity is unjust. L
that the threshold in proving unjustness must be very high and far surpasses
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that in proving prejudice in an application to extend the validity period of a
S writ or an application to set aside an extension previously granted. This is S
because the applicant is seeking to circumvent Order 6, rule 8(1) in the case
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of the original limitation period or an order of the court to extend the
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B
limitation period pursuant to Order 6, rule 8(2) if the writ already been B
extended. Not only that the standard of proof is high, the court will approach
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any application to circumvent its orders with extreme caution. Basically, this
D is the test and standard of proof required for an application under Order 12, D
reason of the plaintiff’s refusal to serve the writ despite the plaintiff’s notice.
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make such order as it thinks fit; but, as always, the exercise of discretion in
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each case must be decided in its own circumstances. The court takes into
K account the plaintiff’s explanation for not having yet served the writ. The K
most obvious of such explanation includes the complex affairs of the plaintiff
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and the difficulties it faces in investigating the claims and his readiness to
M engage in the litigation. M
N N
22. Third, to discharge that burden, the defendant has to satisfy the
O court that the circumstances of the case call for the court’s intervention, O
notwithstanding that the time for service of the writ is yet to expire. The
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test is that it is not just for the plaintiff to withhold the service of the writ or
Q to do so any further. Q
of unfairness, it must be over and above that “which could well be said to
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somehow arise in any given case”. Prejudice that arises merely from the
T existence of the writ will not generally suffice to make an order because T
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“short of dismissal of the action, the direction for the service of the writ, even U
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B
if acceded to, will not meaningfully address such complaint”. Prejudice or B
hardship could be actual or potential; but if it is the latter, it must be imminent
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or likely instead of merely possible. The prejudice or hardship suffered or
24. The sole question this court has to decide in these applications
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is whether KPMG has discharged the burden of proving that it is unjust to
G allow the protective writs to remain valid to the end of their natural expiry. G
H H
Grounds for the application
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25. KPMG’s original and only ground for seeking early service of the
J protective writs is set out in Jacqueline Wong’s affirmation dated 3 July 2017 J
(“Wong/1”) which was served with the summonses. The ground stated that
K K
it was desirable to force early service because once service has been effected,
L KPMG would be in a better position to make an application to obtain the L
O
in breach of the Section 221 Orders. This ground must be based on the O
MOF Opinion dated 22 May 2017.
P P
26. However, after the deadline for evidence had passed, KPMG filed
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a further affirmation by Jacqueline Wong (“Wong/2”) advancing an entirely
R new ground. KPMG now asserts for the first time that it would be unfair R
for KPMG to have to wait any longer for service because the Liquidators
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have been reviewing the documents for an extended period of time, and delay
T may cause difficulties in obtaining evidence due to the effluxion of time (the T
“Unfairness Ground”).
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C 27. A special feature of this case is the extraordinarily long time taken C
The cause of the delay is in hot dispute and is the single most important
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background fact which dictates the outcome of this application. Though
I this hearing should not be turned into a miniature trial on affidavit, a reliable I
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28. As result of the Section 221 Orders, the Liquidators were given
M access to the Mainland documents on 17 May 2016. KPMG produced M
its lawyers continued to be in the room with the Liquidators’ staff during the
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inspection. This is a wilful refusal to comply with the Section 221 Orders.
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B
As result of inadequate method of production and inspection conditions, B
KPMG have caused significant difficulties for, and delays to, the Liquidators’
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investigation, particularly where the Liquidators’ assessment of the potential
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31. KPMG Huazhen’s refusal to provide copies of their work papers M
made it necessary for the Liquidators to manually take notes of important
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documents in order to maintain a record of the document content and use the
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B
33. As result of the supervision and uncooperative attitude of KPMG B
Huazhen, the Liquidators had difficulties obtaining expert and legal advice
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on KPMG Huazhen’s accounting treatment and audit procedure in respect of
made it extremely difficult for the Liquidators to obtain the advice required for
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them to determine whether or not to commence proceedings against KPMG.
H H
34. KPMG Huazhen’s refusal to provide copies of its audit work
I papers made it impossible for the Liquidators to enquire from CMED’s I
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customers and suppliers regarding the authenticity of their signatures or J
chops on documents to enable the Liquidators to assess whether KPMG’s
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audit confirmation procedures were sufficient and properly carried out.
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35. KPMG Huazhen’s supervision of the inspection made it
M impossible for the Liquidators to discuss their findings arising from their review M
of KPMG’s audit work papers. Such discussions are clearly privileged and
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strictly confidential and could not be meaningfully conducted in the presence
O of KPMG Huazhen’s staff or lawyers. This impediment is not cured by O
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B
“January 2017 Order”), Harris J held that it is inefficient for the Liquidators B
to be forced to inspect the documents rather than to be provided with copies
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“because they are forced to work from notes of what staff thought were
D relevant parts of documents at the time they inspected the documents rather D
than use analytical software and storage capabilities to deal with the very
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large number of documents”.
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37. KPMG appealed. In dismissing its appeal on 12 April 2017,
G the Court of Appeal held that “the existing mode of inspection (implemented G
since 17 May 2016) is not wholly effective and there is a real need to order
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production of copies”.
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L L
39. Despite all these court orders, KPMG has not produced copies
M
of any of the Mainland documents and continued to supervise the Liquidators’ M
inspection at KPMG Huazhen’s office.
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B
41. The Liquidators’ complaints are substantially unanswered by B
KPMG. In the light of these orders and judgment, I have no difficulties to
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accept the Liquidators’ case that they have real difficulties in conducting
D their investigation into CMED’s affairs and are prevented from assessing the D
is due to factors beyond their control. The Liquidators are not in a position
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to determine whether the claims the subject of the protective writs should be
H pursued. KPMG is responsible for this state of affairs. H
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MUTUAL ARRANGEMENT GROUND
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Background
K K
42. I have set out in paragraphs 11 and 12 the background based on
L which KPMG considers it necessary to obtain a letter of request in order to L
the Liquidators under Order 39, rules 1 – 3 to court for the issuance of a letter
O O
of request to the PRC courts. It is hopeful that the letter of request will be
P issued by the Hong Kong court and executed by the PRC court. KPMG P
Huazhen will then release the Mainland documents and relieve KPMG of its
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obligation under the Section 221 Orders. KPMG argues that to proceed by
R
that route would require the protective writs to be served. R
S S
43. Insofar as KPMG seeks to place reliance on the MOP Opinion
T that a letter of request is necessary, I am not satisfied that such necessity is T
proved as I have strong reservation about the reliance which may be placed
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B
on the MOP Opinion. Like Harris J, I am not satisfied that KPMG has B
shown that PRC laws and regulations would be breached if the documents
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were produced to the Liquidators. While KPMG did request KPMG
requirement without any basis. The senior partner of KPMG Huazhen simply
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replied that it is:
F “ … not prepared to produce copies of the Documents to the F
Liquidators until the written direction is issued by the relevant
G Mainland authority and full compliance with the same is ensured.” G
H
Despite what was said in the MOF Opinion, what is significant lies in what H
was not said. It is not known what opinion was KPMG Huazhen seeking
I I
from MOF. The tone of the MOF Opinion suggests that the request was for
to me that MOF therefore did not deal with the issue whether such documents
M M
may be produced voluntarily but how their production could be compelled.
N Hence MOF suggested that the administrative supervision cooperation N
agreement was not applicable and advised KPMG Huazhen that the Mutual
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Arrangement might be invoked to compel KPMG Huazhen to produce the
P document. In my view, the MOF Opinion cannot be treated as evidence P
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G refuse to issue a letter of request unless the documents requested are directly G
material to an issue in the action. Thus until the writs have been served, there
H H
are technically no defendants who can join in any inter partes procedures.
I I
45. In reply, Mr Manzoni SC submits that the cases quoted are not
J J
authorities for the proposition that service is necessary to obtain a letter of
K request. In fact, KPMG has itself brought the present application which is K
The above conclusion takes away much of the steam in KPMG’s application.
P P
Q
46. KPMG’s alternative argument is that its chances of being Q
successful in obtaining the letter of request are highest if the protective writs
R R
have been served. It is apparent that KPMG’s primary argument for forcing
S service of the protective writ is that it wishes to obtain some advantage in its S
T T
4
(2006) 9 HKCFAR 766 at paras 38 – 39, 47, per Lord Millett NPJ
5
[1994] Ch 142, at 151E–G, 153H, per Nicholls VC
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[1997] 4 HKC 439, at 443I, 444A–B, 445A, per Woo J (as he then was) U
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B
proposed Mutual Arrangement application. The chances of success of such B
application with or without service of the protective writ is only of secondary
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importance. My concern, rather, is the certainty that the Mainland documents
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Certainty as to whether the Mainland Documents can be obtained
F F
47. There are two issues to be addressed here: first, whether a letter
G of request will be issued by the Hong Kong court; and second, whether, if G
issued, it will be executed by the Mainland court.
H H
48. On the first issue, Mr Hollander suggests that the test is just a
I I
reasonable chance test, quoting Saunders J’s decision in Chan Mei Yiu Paddy
J v Secretary for Justice (No 2) 7 . In that case, the court was faced with J
circumstances.
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U 7
[2008] 3 HKC 182 U
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B
satisfy the Hong Kong court that production by what it claims is a non-party B
is appropriate in such circumstances. Again, there is no such evidence.
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obtain an order for production of all the Mainland documents covered by the
F F
Section 221 Orders.
G G
52. Taking all these considerations into account, this is not a case of
H H
conflicting expert opinion on foreign law which the court feels uncomfortable
I to come to a decision one way or the other. The evidence shows it is not I
K
53. As for the second issue, there are differences between the PRC K
law experts of both parties. One opinion which is in common is that both
L L
experts agree that the Mutual Arrangement is a new procedure and its operation
M
is in many respects uncertain. On this limited issue, it may, as in the case of M
Chan Mei Yiu, be left to the PRC courts. But, if KPMG could not even pass
N N
the first hurdle, this issue does not arise for consideration.
O O
Whether Mutual Arrangement can achieve compliance with the Section 211
P
Orders P
R
with the Section 221 Orders and is doing all that is lawful to achieve that end. R
It is therefore KPMG’s case that through the use of the Mutual Arrangement
S
mechanism the impasse will somehow be solved. This is obviously not the S
T T
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B
case. As the Court of Final Appeal explained in Joint & Several Liquidators B
of Kong Wah Holdings Ltd v Grande Holdings Ltd , letters of request are:
8
C C
“ … concerned with adversarial litigation or arbitration, and are
designed to ensure that the court or tribunal is seized of all relevant
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material to enable it to determine the dispute which has been referred
to it for decision. They are concerned with obtaining evidence for
E resolving an existing dispute, not with the gathering of information E
as part of a continuing process of investigation.”
F F
The purposes for which the Liquidators obtained the Section 221 Orders are
G far broader than merely to use the Mainland documents in potential G
proceedings against KPMG. Besides, both experts agree that the Mainland
H H
documents obtained through the Mutual Arrangement may only be used as
I evidence in the present proceedings. They could not be used in the broader I
complying with the Section 221 Orders, but by a different route” as asserted
L L
by KPMG in its oral submission. Despite this point has been communicated
M to KPMG, this issue has never been addressed by KPMG skeleton M
submissions.
N N
O Conclusion O
the Mutual Arrangement mechanism, may not cover the scope of the
Q Q
Mainland documents required to be produced under the Section 221 Orders
R and it may not be used as evidence in any proceedings other than the present R
ones against KPMG. They may not serve the far greater purposes for which
S S
they were sought under the Section 221 Orders. Second, there is no
T certainty that the letters of request sought will be issued by the Hong Kong T
U 8
(2006) 9 HKCFAR 766, at para 31 U
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B
court and enforced by the PRC courts. Third, KPMG has not shown that B
the service of the protective writs is a necessary requirement for the issue of
C C
the letters of request. In a nutshell, KPMG has failed to show that the
D service of the protective writs is necessary in the first place; that it stands a D
good chance in obtaining the letter of request in the second; and lastly that
E E
the Mainland documents obtained under the Mutual Arrangement mechanism
F meet the purposes for which they were granted under the Section 221 Orders. F
G 56. With that conclusion in mind, I consider the impact of the court’s G
decision on KPMG’s application to the parties first one way and then the other.
H H
Under the first scenario, if KPMG’s application is allowed, CMED will be
I forced into litigation before the Liquidators are satisfied that it is the proper I
J
course to take or to abandon it altogether. It would be forced to file J
statements of claim when it is not ready to do so and will stand a great risk
K K
that its statements of claim may be struck out. It will stand a great risk of
L
losing the actions against KPMG. Under this scenario, the effect to CMED L
is fatal while the benefit to KPMG is obvious.
M M
against KPMG. If the Liquidators are ready to serve the protective writes,
P P
litigation will take its course. If they have to seek another extension, the
Q court will make a fair and just decision in accordance with the law and the Q
found not liable if its defence that it is prevented from complying with the
T T
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B
order by KPMG Huazhen is accepted. If they are found liable, it does not B
lie in their mouths to argue that they suffer any prejudice.
C C
58. When balancing the first scenario against the second, there is
D D
no reason why this court should force the issue of the protective writ with
E the result of giving to KPMG such an advantage which is grossly out of E
issued by the Hong Kong courts and executed by the PRC courts; and the
H H
certainty that the Mainland documents, if so obtained, will not meet the
I requirement under the Section 221 Orders. KPMG has failed to discharge I
J
the burden of showing that it would be unjust to allow the validity period of J
the protective writs to run its course.
K K
Introduction
M M
59. As already outlined in paragraphs 25 and 26, this new ground was
N N
advanced at the eleventh hour. It is contained in Wong/2 for which KPMG
O sought leave for it to be filed out of time. Wong/2 cannot be characterised O
consent to its filing, but argues that the failure to raise this ground at the
R R
proper or earlier stage demonstrates that is not genuine but an afterthought.
S I agree. Raising such a ground at such a late stage takes away all the thrust S
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B Effluxion of time B
time. KPMG sets out the following background. KPMG was first engaged
D D
as CMED’s auditor in 2005. Twelve years have passed since and eight years
E have lapsed since KPMG resigned as its auditor in August 2009. The first E
protective writ relates to matters going back to the year ended March 2004,
F F
more than 13 years ago. The second protective writ relates to matters going
G back to the year ended March 2008, more than nine years ago. The third G
protective writ relates to matters going back to the year ended March 2009,
H H
more than eight years ago.
I I
scrutinised by the court. Even after the protective writs are served, the
L L
actions will not, given their complexity, come on for trial for a considerable
M time thereafter. He therefore argues that it is unfair for KPMG to have such M
litigation hanging over its head for such a long period of time.
N N
O
62. His argument is a double edge sword. Time, not only has an O
impact on KPMG. It also has an impact on the Liquidators and, in my view,
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more adversely. KPMG was CMED’s auditor. It has a team of professionals,
Q
who were on the job. In short, KPMG knows CMED well and has possession Q
of the relevant documents. On the other hand, the Liquidators are total
R R
strangers. They took over CMED after its collapse and when it was in a mess.
S They need more time to investigate and understand what KPMG had done. S
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B
63. Next, Mr Hollander says that staff members who worked on the B
subject audit have left and more would have left and it would be difficult to
C C
procure their attendance as witnesses. Of those whose cooperation can be
the dates which individuals left KPMG’s employment in Hong Kong. The
H H
schedule showed that of 47 engagement team members, only three remain in
I KPMG and five remain in KPMG Huazhen. It appeared as though the I
J
entire generation of audit team members has left KPMG. However, there J
is no explanation of the importance of the role played by those individuals
K K
who had left, or the actual difficulties experienced in contacting them.
L
Besides, the Liquidators were appointed on 27 July 2012 and had almost L
immediately requested documents from KPMG. The first protective writ
M M
was filed on 26 September 2013. It is inconceivable, as experienced and
N respectable accountants, that KPMG would not have started taking steps to N
preserve documents, taking witness statements from potential witnesses,
O O
keeping track of their movements and obtaining their contact details and
P taking witness statements from them (if that had not been done before) if they P
the protective writs. Once the actions have commenced and the issues been
T T
identified, KPMG can start taking steps to procure evidence from witnesses.
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B
But Mr Hollander has failed to show how seven months can make any B
difference.
C C
66. Next, Mr Hollander argues that the prejudice here is entirely one
D D
way against KPMG as the Liquidators will in all likelihood rely heavily on
E documents and KPMG will be called to explain why its staff did what they E
did. He repeats his argument that memories will fail with time.
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fact that KPMG is being deprived of the benefits of the normal limitation
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period. But for the multiple extensions, the limitation period for nearly all
I of the causes of action would probably have expired. I
K
responsible for the present state of affairs by reason of their obstructive and K
uncooperative conduct, in particular, their refusal to comply with the Section
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221 Orders. The Liquidators are forced to accept the unlawful restriction
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in their investigation imposed on them and to progress at snail pace. KPMG’s M
conduct is inviting the multiple extensions. KPMG now wishes to take
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advantage of its own wrong to seek to abridge the current validity period of
O the protective writs and force service of the protective writs seven months O
before their expiry. The net result would be to force CMED into litigation
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before the Liquidators are satisfied that it is the proper course to take and to
Q stand the risk of losing the actions or to abandon them altogether. I can in Q
no way find it would be just to abridge the validity of the protective writs.
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the suggestion and insisted on enforcing the Section 221 Orders. I can see U
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A - 29 - A
B
nothing wrong with the change of stance. The express purpose of KPMG’s B
invoking the Mutual Arrangement mechanism, as the Liquidators now
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appreciate, is to circumvent the Section 221 Orders and Lok J’s Extension
D Order. Given the history in this case, particularly that the Liquidators are D
then filing of statements of claim before the Liquidators are able to present
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a proper case and then strike them out altogether. There are good reasons
H for the Liquidators to be cautious. H
I I
Conclusion
J J
70. For the above reasons, I dismiss KPMG’s application with costs
K to CMED and to be paid forthwith. K
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M M
(Anthony To)
N Deputy High Court Judge N
O O
Mr Charles Manzoni SC, instructed by Lipman Karas, for the plaintiff
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