A A
B HCA 2114/2007 B
IN THE HIGH COURT OF THE
C HONG KONG SPECIAL ADMINISTRATIVE REGION C
COURT OF FIRST INSTANCE
D D
ACTION NO 2114 OF 2007
E __________________________ E
F
BETWEEN F
st
Shenzhen Futaihong Precision Industry Co., Ltd. 1 Plaintiff
G (深圳富泰宏精密工業有限公司) G
Hong Fu Jin Precision Industry (Shen Zhen) Co. Ltd. 2nd Plaintiff
H (鴻富錦精密工業(深圳)有限公司) H
FIH Precision Component (Beijing) Co. Ltd. 3rd Plaintiff
I I
(富智康精密組件(北京)有限公司)
(formerly known as Foxconn Precision
J Component (Beijing) Co. Ltd. J
(富士康精密組件(北京)有限公司))
K K
and
L L
BYD Company Limited 1st Defendant
M M
BYD (H.K.) Co., Limited 2nd Defendant
N Golden Link Worldwide Limited 3rd Defendant N
BYD Electronic Company Limited 4th Defendant
O O
Lead Wealth International Limited 5th Defendant
Tianjin BYD Electronics Company Limited 6th Defendant
P P
(天津比亞迪電子有限公司)
Q BYD Precision Manufacture Co. Ltd. 7th Defendant Q
(比亞迪精密制造有限公司)
R (BY ORIGINAL ACTION) R
S S
T T
U U
V V
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A A
B AND BETWEEN B
BYD Company Limited 1st Plaintiff
C C
BYD (H.K.) Co., Limited 2nd Plaintiff
D Golden Link Worldwide Limited 3rd Plaintiff D
BYD Electronic Company Limited 4th Plaintiff
E E
Lead Wealth International Limited 5th Plaintiff
Tianjin BYD Electronics Company Limited 6th Plaintiff
F F
(天津比亞迪電子有限公司)
G BYD Precision Manufacture Co., Ltd. 7th Plaintiff G
(比亞迪精密制造有限公司)
H H
and
I I
st
Hon Hai Precision Industry Co., Ltd. 1 Defendant
J (鴻海精密工業股份有限公司) J
FIH Mobile Limited 2nd Defendant
K (富智康集團有限公司) K
(formerly known as Foxconn International Holdings
L Limited (富士康國際控股有限公司)) L
Shenzhen Futaihong Precision Industry Co., Ltd. 3rd Defendant
M M
(深圳富泰宏精密工業有限公司)
Hong Fu Jin Precision Industry (Shen Zhen) Co., Ltd. 4th Defendant
N N
(鴻富錦精密工業(深圳)有限公司)
O (BY COUNTERCLAIM) O
P __________________________ P
Q Q
Before: Hon Ng J in Chambers
R Dates of Hearing: 5 January and 17 February 2017 R
Date of Decision: 15 March 2017
S S
T T
U U
V V
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A A
B ________________ B
DECISION
C C
________________
D D
1. By 3 summonses dated 12 July 2016 (“Expert Summons”),
E
1 August 2016 (“Amendment Summons”) and 14 September 2016 E
F
(“Costs Summons”) the BYD Parties sought leave to appeal against the F
decisions of this court
G G
(1) made on 28 June 2016 and 5 July 2016 (as embodied in an
H order dated 5 July 2016) concerning the parties’ respective H
applications for leave to adduce expert evidence (“Expert
I I
Evidence Decisions”);
J (2) dated 18 July 2016 granting the Foxconn Parties leave to J
amend their Re-Amended Statement of Claim in the manner
K K
set out in the draft Re-Re-Amended Statement of Claim
L (“Amendment Decision”); L
(3) dated 31 August 2016 in respect of the costs of the parties’
M M
respective applications for leave to adduce expert evidence
N and the Foxconn Parties’ application for leave to amend their N
RASOC (“Costs Decision”).
O O
2. The BYD Parties’ proposed grounds of appeal are set out in
P P
the draft notices of appeal attached to the 3 Summonses.
Q Q
3. On 17 February 2017, this court granted leave to the BYD
R R
parties to appeal against the Expert Evidence Decisions.
S S
4. This court will now deal with the leave applications relating
T T
to the Amendment Decision and, for completeness, the Costs Decision.
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V V
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A A
B 5. In summary, the gist of the proposed amendments is B
concerned with:
C C
(1) The involvement of 3 additional employees of the Foxconn
D D
Parties viz Dong Gening, Chen Quan and Akin Wang, and
the duties which they each owed to the Foxconn Parties:
E E
paragraph 16 (opening paragraph and sub-paragraphs 10–12)
F of the proposed amendments. F
(2) The wrongful acts and breaches of duties committed by the
G G
3 additional employees which the Foxconn Parties likewise
H alleged had been procured and induced by the BYD Parties: H
paragraphs 26D–26F and Schedules 13A–13C of the
I I
proposed amendments.
J (3) The additional confidential information which these J
3 employees had wrongfully disclosed to the BYD Parties
K K
between 2003 and 2005 and which the BYD Parties obtained
L
for their own use: Schedules 13A–13C of the proposed L
amendments.
M M
6. In the Amendment Decision, applying the well-established
N N
3-stage test as set out in paragraph 16 therein, this court concluded that:
O O
(1) For Stage 1: The BYD Parties did have a reasonably
P arguable limitation defence. P
(2) For Stage 2: The proposed amendments did not introduce
Q Q
new causes of action, but were further instances of the same
R causes of action or alternatively are further and better R
particulars of the existing allegations of the wrongdoings of
S the BYD Parties, and were permissible under the law. S
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A A
B (3) For Stage 3: Even if the proposed amendments amounted to B
new causes of action, they arose out of substantially the
C C
same facts as were already in the existing claims.
D (4) On the exercise of discretion, this court was not satisfied that D
that there was undue delay on the part of the Foxconn Parties.
E E
Nor was this court satisfied that the BYD Parties had clearly
F demonstrated the existence of real prejudice which could not F
be compensated for by an appropriate costs order.
G G
7. This court has received very detailed oral and written
H H
submissions of Mr Yu SC and Mr Wong SC on whether the BYD Parties
I can demonstrate their appeal has a reasonable prospect of success. I
Having carefully considered the matter, this court fully accepts the
J J
submissions of Mr Wong SC on Grounds (1) and (2) in the draft notice of
K appeal pertaining to Stages 2 and 3. It appears to this court that the BYD K
Parties were either misinterpreting this court’s approach and reasoning in
L L
reaching its conclusions or were merely complaining that this court
M should not have applied the legal principles to the facts in favour of the M
Foxconn Parties without really explaining why that constituted an error.
N N
O 8. Regarding Ground (3) in the draft notice of appeal pertaining O
to undue delay, this court again fully accepts the submissions of
P P
Mr Wong SC that the BYD Parties have failed to demonstrate the appeal
Q has a reasonable prospect of success based on that ground. As this court Q
said in paragraph 67 of the Amendment Decision, given the enormous
R R
scale of the BYD Discovery, 14 months are not necessarily an undue
S amount of time for the Foxconn Parties to formulate the proposed S
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A A
B amendments. In any event, mere delay is not sufficient to bar an B
application for leave to amend.
C C
D 9. However, regarding Ground (3) in the draft notice of appeal D
pertaining to prejudice, this court takes the view that the BYD Parties
E E
have a reasonable argument on whether the proposed amendments would
F cause real prejudice to them which could not be compensated for by an F
appropriate costs order and thus on whether the discretion should be
G G
exercised in their favour.
H H
10. In these circumstances, this court should grant leave to the
I I
BYD Parties to appeal against the Amendment Decision but only limited
J
to the issue of prejudice and hence the exercise of discretion, and will so J
order. Since leave is granted, costs of the Amendment Summons should
K K
be in the cause of the intended appeal and this court so orders on a nisi
L
basis. L
M 11. Regarding the BYD Parties’ Costs Summons, given that M
leave is given to them to appeal against the substantive Amendment
N N
Decision and the Expert Evidence Decision, this court is of the view that
O O
it is not necessary to separately give leave to appeal against the Costs
P
Decision. In the normal course of event, the costs below will be dealt P
with together with the costs of appeal by the Court of Appeal hearing the
Q Q
substantive appeals.
R R
S S
T T
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V V
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A A
B 12. This court therefore makes no order on the Costs Summons B
save that, on a nisi basis, orders costs of that summons to be in the cause
C C
of the intended substantive appeals.
D D
E E
F F
G
(Peter Ng) G
Judge of the Court of First Instance
High Court
H H
I Mr Wong Yan Lung SC and Mr Law Man Chung, instructed by Mayer Brown I
JSM, for the Plaintiffs by Original Action and the Defendants by
J Counterclaim J
K
Mr Benjamin Yu SC and Ms Sara Tong (5 January 2017 only), instructed by K
Herbert Smith Freehills, for the Defendants by Original Action and the
Plaintiffs by Counterclaim
L L
M M
N N
O O
P P
Q Q
R R
S S
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V V