ORIENT POWER HOLDINGS LTD AND OTHERS v. ERNST & YOUNG

ORIENT POWER HOLDINGS LTD AND OTHERS v. ERNST & YOUNG

A7 l (documents recording receipt of funds from customers via trade receivable financing) are not necessary for fair disposal because plaintiffs clarified they do not allege bank records are false and receipts from third party customers are not in dispute; discovery under O 24 r 13 is therefore not justified for A7 l. B1 is relevant to the IND Claim and to expert analysis of hypothetical deficiencies; limited discovery is ordered for invoices for professional expenses (receivers, liquidators and legal fees) and invoices in excess of HK$100,000 for trading expenses, with any privilege in legal invoices to be particularised. Costs ordered: plaintiffs to pay 70% of the costs of the summons,...

Citation
ORIENT POWER HOLDINGS LTD AND OTHERS v. ERNST & YOUNG
Parties
1st Plaintiff (receivers and Managers Appointed) (in Liquidation): Orient Power Holdings Limited; 2nd Plaintiff (receivers and Managers Appointed) (in Liquidation): Orient Power Electronics Limited; 3rd Plaintiff (receivers and Managers Appointed) (in Liquidation): Orient Power Car Stereos Limited; 4th Plaintiff (receivers and Managers Appointed) (in Liquidation): Orient Power Video Manufacturing Limited; Defendant: Ernst & Young
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
15 February 2017
Case Number
HCCL14/2014
Procedural Posture
Commercial Action (commercial Action No 14 of 2014) / Interlocutory Application for Specific Discovery (summons); Decision at Chambers
Outcome
Application partly granted and partly refused: A7 l refused; B1 granted in limited scope; costs awarded against plaintiffs
Legal Topics
Specific Discovery, Liquidators Dual Role and Expert Evidence, Calculation of Hypothetical Deficiency (ind Claim), Receivership and Liquidation Costs, Relevance and Proportionality in Disclosure
Source Language
EN
Civil Procedure Company Law Insolvency Professional Negligence Evidence/disclosure Specific Discovery Liquidators Dual Role and Expert Evidence Calculation of Hypothetical Deficiency (ind Claim) +2 more

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Parties

Orient Power Holdings Limited

1st Plaintiff (receivers and Managers Appointed) (in Liquidation)

Orient Power Electronics Limited

2nd Plaintiff (receivers and Managers Appointed) (in Liquidation)

Orient Power Car Stereos Limited

3rd Plaintiff (receivers and Managers Appointed) (in Liquidation)

Orient Power Video Manufacturing Limited

4th Plaintiff (receivers and Managers Appointed) (in Liquidation)

Ernst & Young

Defendant

Procedural Posture

Commercial Action (commercial Action No 14 of 2014) / Interlocutory Application for Specific Discovery (summons); Decision at Chambers

Legal Issues

  1. 1 Whether specific discovery should be ordered under O 24 r 13 as necessary for fair disposal or cost saving
  2. 2 Whether documents A7 l (documentation recording receipt of funds from customers via trade receivable financing) are relevant/necessary
  3. 3 Whether documents B1 (documentation evidencing fees and expenses of receivership and liquidation) are relevant/necessary to IND Claim and expert analysis

Ratio Decidendi

A7 l (documents recording receipt of funds from customers via trade receivable financing) are not necessary for fair disposal because plaintiffs clarified they do not allege bank records are false and receipts from third party customers are not in dispute; discovery under O 24 r 13 is therefore not justified for A7 l. B1 is relevant to the IND Claim and to expert analysis of hypothetical deficiencies; limited discovery is ordered for invoices for professional expenses (receivers, liquidators and legal fees) and invoices in excess of HK$100,000 for trading expenses, with any privilege in legal invoices to be particularised. Costs ordered: plaintiffs to pay 70% of the costs of the summons,...

Court Disposition

Application partly granted and partly refused: A7 l refused; B1 granted in limited scope; costs awarded against plaintiffs

Orders

  • Refusal to order discovery of category A7 l (documentation recording receipt of funds from customers via financing of trade receivables)
  • Order for discovery limited to category B1: production of invoices for professional expenses (including receivers, liquidators and legal fees) and invoices in excess of HK$100,000 for trading expenses incurred in the receivership and liquidation