THE JOINT AND SEVERAL LIQUIDATORS OF CHINA MEDICAL TECHNOLOGIES, INC v. CHRISTOPHER BARRY ABBISS AND OTHERS

HCMP 2590/2017

[2019] HKCFI 501

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2590 OF 2017

________________

IN THE MATTER of an application on behalf of the Joint & Several Liquidators of China Medical Technologies, Inc. against Christopher Barry Abbiss and the 90 other persons listed as the 2nd to 91st Defendants in the Schedule hereto for orders of committal

________________

BETWEEN
	THE JOINT AND SEVERAL LIQUIDATORS OF CHINA MEDICAL TECHNOLOGIES, INC	Plaintiffs
AND
	CHRISTOPHER BARRY ABBISS	Defendants
	and the 90 other persons listed as the 2nd to 91st Defendants in the Schedule hereto

________________

Before:

Hon Harris J in Chambers

Date of Hearing:	11 January 2019
Date of Decision:	11 January 2019

___________________

D E C I S I O N

___________________

1.   By a summons dated 16 April 2018 the defendants applied to set aside the ex-parte leave granted on 10 November 2017 to the liquidators of China Medical Technologies, Inc (“the Liquidators”) to issue contempt proceedings against them on the grounds of material non‑disclosure. In previous decisions I have explained the circumstances leading up to the commencement of contempt proceedings, most recently in my decision on 9 January 2019.  It is not necessary to repeat the background to the application.  I will simply start by explaining the alleged non-disclosure.

2.   On 24 February 2016, I made an order that KPMG Hong Kong (“KPMG HK”) disclose to the Liquidators various of the Company’s documents (“the Order”).[1] A proportion has been produced by KPMG HK in the course of the audit of the Company’s financial statements, others have been produced by KPMG Huazhen when assisting KPMG HK in the audits.  The Order was subsequently amended both by me and also the Court of Appeal, although in the case of the latter only to the extent of extending time for compliance.  There has been substantial failure by KPMG HK to comply with the Order.  In summary, KPMG HK say that it is because KPMG Huazhen refused to produce the documents to the Liquidators that they have been unable to comply with the Order.  I note in passing that the Order does not direct KPMG Huazhen to do anything, and KPMG HK have failed in any evidence to explain why they have not obtained at least their documents from KPMG Huazhen.  Be that as it may, it is the case of the defendants that by the middle of May 2017, KPMG Huazhen had made it clear that it would not provide copies of the documents to the Liquidators and this, say KPMG HK, has prevented further compliance with the Order. 

3.  On 26 May 2017, KPMG Huazhen and KMPMG HK received a letter which KPMG HK characterised, in their evidence, as an opinion issued by the General Office of the Ministry of Finance.  The relevant part of the opinion in translation says this:

“We acknowledge receipt of your request for instructions on whether audit work papers can be produced to the Hong Kong appointed liquidators. After consultation with relevant authorities in charge, the matters concerning the Hong Kong High Court’s judgment on production of audit work papers to the Hong Kong appointed liquidators fall under the judicial scope. The administrative supervision cooperation agreement between the Mainland and the Hong Kong Special Administrative Region is not applicable. There is no basis for us to approve the production of audit work papers to the Hong Kong appointed liquidators.

The Hong Kong courts, if necessary during hearing of civil and commercial matters, can request the courts of the Mainland to provide assistance in obtaining audit work papers in accordance with the Arrangement on Mutual Taking of Evidence in Civil and Commercial Matters between the Courts of the Mainland and the Hong Kong Special Administrative Region.”

KPMG HK’s solicitor Mr Smyth says this in [48] of his affidavit in support of his client’s application:

“On the basis of the MOF Reply Opinion, there was a route of procuring the Documents in the Mainland to be produced to the Liquidators, namely, by a request made by the Hong Kong court to the courts of the Mainland to provide assistance in accordance with The Arrangement on Mutual Taking of Evidence in Civil and Commercial Matters between the Courts of the Mainland and the Hong Kong Special Administrative Region (the ‘Arrangement’), which came into force on 1 March 2017.”

4.  It would appear that KPMG HK have interpreted the Ministry of Finance’s letter as a statement that the documents could be procured by use of a letter of request issued by the Hong Kong High Court to a court of competent jurisdiction in the Mainland, as a result of the provisions of the protocol referred to in the Ministry of Finance’s letter.  On this assumption KPMG HK’s lawyers apparently decided they should try and use this process, but in order to do so, there needs to be civil proceedings in Hong Kong in which the letter of request could be issued. 

5.  Three protective writs have been issued since 2013 by the Liquidators on behalf of the Company: HCA 1822/2013, HCA 1138/2014, and HCA 2276/2016.  They have not been served.  KPMG HK were advised that they would need to be served before letters of request could be issued.  KPMG HK’s solicitors wrote to the Liquidators proposing that this take place, and then a joint application be made for issue of the letter of request.  The Liquidators declined.

6.  On 21 June 2017, the Liquidators’ solicitors Lipman Karas wrote a lengthy letter to my clerk, which was intended for me and which I read, dealing with the hearing of further summonses relating to KPMG HK’s non-compliance with the Order and also the extension of the three writs to which I have referred.  The letter refers in detail on pp 2 and 3 to the 10^th affidavit of Ms Jacqueline Wong, and KPMG HK’s apparent intention to try and obtain production of the documents through the protocol to which I have referred earlier, and the service on 9 June 2017 by KPMG HK of notices under Order 12 requiring service of the protective writs for this purpose.  The letter explains why the Liquidators did not agree.  My clerk replied on my behalf on 28 June 2017 informing the parties that my diary could not accommodate additional applications in the period required.

7.  On 4 July 2017, KPMG HK issued summonses pursuant to Order 12 seeking orders that the writs be served in order that it could make an application for letters of request.  KPMG HK’s solicitors wrote to my clerk asking if I could hear the application, but my diary prevented this and it was fixed before Deputy High Court Judge To on 1 November 2017 who heard the application and dismissed it on 23 March 2018.[2]

8.  The statement in support of the ex-parte application to me for leave to commence contempt proceedings is dated 24 October 2017 (“the Statement”).  It is 20 pages long.  I was familiar with the background to the application and I was also aware of the application under Order 12 for an order that writs should be served at the time of the application.  At [29] of the Statement, the Liquidators referred to the matters that I have described in the previous paragraphs.  It is appropriate to quote them:

“29. On 31 May 2017 at or around 5:30pm, one hour after the time limit for compliance with the January 2017 Order, KPMG served on the Liquidators the Tenth Affidavit of Ms Wong dated 31 May 2017, which:

29.1. exhibited a letter from the Ministry of Finance (‘MOF’) dated 22 May 2017 (‘MOF Reply Letter’) apparently in response to KPMG Huazhen’s further ‘request for instructions on whether audit work papers can be produced to the [Liquidators]’, in which the MOF stated that ‘the matters concerning the Hong Kong High Court’s judgment on production of audit work papers to the [Liquidators] fall under the judicial scope’ and ‘[t]here is no basis for [MOF] to approve the production of audit work papers to the [Liquidators]’;

29.2. asserted that the MOF has in the MOF Reply Letter stated that the parties could utilise the Arrangement on Mutual Taking of Evidence in Civil and Commercial Matters between the Court of the Mainland and the Hong Kong Special Administrative Region (‘Mutual Arrangement’) to obtain the Mainland Documents (at [12]);

29.3. asserted that the Liquidators would need to serve the Protective Writs on KPMG in order to use the Mutual Arrangement, and stated that an application would be made to compel service (KPMG subsequently filed applications to compel the Company to serve the Writs on 4 July 2017) (at [16]–[18]);

29.4. referred to the letter from KPMG Huazhen to KPMG of 15 May 2017, in which KPMG Huazhen purportedly refused to produce the Documents to the Liquidators until a ‘written direction is issued by the relevant Mainland authority’ (at [13]); and

29.5. asserted that she had ‘no reason to believe’ that ‘KPMG Huazhen’ would be prepared to produce copies of the Mainland Documents to the Liquidators following the MOF Reply Letter, ‘[s]ince the MOF did not, in the MOF Reply [Letter], give any approval for copies of the Documents to be provided to the Liquidators’ (at [13]).”

9.  KPMG HK say that there were key admissions from the Statement that constitute material non-disclosure and, as a result, the leave should be set aside.  The suggested admissions are in short:

(1)   The failure to explain that the Order 12 application was fixed to be heard by DHCJ To on 1 November 2017, only about a week after the leave application was filed.  Mr Joffe, on behalf of KPMG HK, submitted that the Liquidators should have disclosed that the application was to be heard imminently, as this was relevant to whether leave should be granted, because I might take the view (and it was not, which I agree, for the Liquidators to assess whether I would or would not) that determination of the leave application should await the outcome of the Order 12 application.

(2)   The Statement fails to properly explain the context of the Order 12 application, which was relevant because KPMG HK’s attempts to find a way to comply with the Order was relevant to the consideration by the court of whether or not to grant leave.  If, argued Mr Joffe, KPMG HK had made the efforts to comply, they needed to be properly explained: China Metal Recycling (Holdings) Ltdv Chun Hei Man.[3] Mr Joffe said that the Statement fails properly to explain the context and in particular the following facts:

(i)   KPMG HK’s intention to apply for letters of request as explained in [18] of Jacqueline Wong’s 10^th affidavit filed in the section 221 proceedings.

(ii)  The Liquidators’ initially receptive attitude to the proposal to use a letter of request, which subsequently changed and became opposition to the Order 12 application.  Mr Joffe argued that this initial response and the Liquidators’ change of mind and opposition to the Order 12 application should have been disclosed, because it went to the issue of whether the Liquidators had acted reasonably which, if the court took the view they had not, was a factor weighing against committal. 

10.  Paragraph 18 of Ms Wong’s 10^th affidavit simply states:

“Once the writs have been served, KPMG HK can (and indeed, the Liquidators could) apply (pursuant to RHC O.39 rr.1-3) for letters of request to be issued by the Hong Kong courts to the relevant court in Mainland China seeking assistance (pursuant to the Mutual Arrangement) in obtaining evidence in the form of the Documents.”

I was aware that this was KPMG HK’s proposal from the 21 June 2017 letter and reading [18] at the time of reading the Statement.  I was also aware, when reading the Statement, that the Liquidators opposed the Order 12 application.  It seems to me that this is implicit in the Statement, but I knew it anyway, and the reasons why they did so because of the letter of 21 June 2017.  It was a matter that I did not think justified declining leave. 

11.  As is apparent from my previous decisions, I have dealt with all the applications in these proceedings and I am very familiar with the background to the application for leave to commence contempt proceedings.  It seems to me that KPMG HK’s complaints are nitpicking.  It is apparent from [29] of the Statement, particularly given my background knowledge, that KPMG HK proposed to use the Mutual Arrangement to obtain an order that would give KPMG Huazhen the comfort they demanded before releasing the documents.  I knew that the application had been issued in July 2017: [29] expressly states this.  The fact that the hearing was shortly to be heard, in my view, is neither here nor there.  I can see no reason why a decision by DHCJ To that the writs should be served would have altered my decision to grant leave. The fact was, as is clear from my earlier decisions, I had taken the view that KPMG HK have repeatedly failed to comply with the Order and leave was legitimately to be granted. 

12.  I will, therefore, dismiss the application.  I take it there is no dispute that the defendants should pay the Liquidators’ costs of the application and I will make that order.

 
 

	(Jonathan Harris)
	Judge of the Court of First Instance High Court

   

Mr Charles Manzoni SC, instructed by Lipman Karas, for the plaintiffs

Mr Victor Joffe and Mr Wilson Leung, instructed by Reynolds Porter Chamberlain, for the 1^st to 91^st defendants

 

Schedule

Defendants

Partners of KPMG who were Partners at all times from 5 February 2015

Defendant No.	Name (English)	Name (Chinese)	ID Card No.	Address
1st	ABBISS, CHRISTOPHER BARRY		[REDACTED]	[REDACTED]
2nd	AU, YAT FO	區日科
3rd	BARBER, VAUGHN CARLYLE
4th	BOWDERN, DARREN RAYMOND
5th	BOWRA, MARK WILLIAM
6th	CHAMBERLAIN, RUPERT JOSEPH
7th	CHAN, KIM TAK*DANIEL	陳儉德
8th	CHAN, SIU TUNG	陳少東
9th	CHATTOCK, JOHN PAUL
10th	CHENG, PUI NGAR	鄭沛雅
11th	CHENG, WING HAN	鄭詠嫻
12th	CHEUNG, CHO TUNG*TONY	張楚東
13th	CHEUNG, WAI YU*JANET	張慧如
14th	CHEUNG, WING HAN	張頴嫻
15th	CHIU, MUN WAI	招敏慧
16th	CHOI, CHUNG CHUEN	蔡忠銓
17th	CHU, NGAR YEE	朱雅儀
18th	CHU, PING FAI	朱炳輝
19th	CHUI, MING WAI	徐明慧
20th	CHUNG, KAI MING	鍾啟明
21st	CHUNG, WAI YIN*CHRISTINE	鍾慧賢
22nd	CROWE, WILLIAM ANDREW		[REDACTED]	[REDACTED]
23rd	DEBNAM, NICHOLAS JAMES
24th	DONOWHO, SIMON CHRISTOPHER
25th	FONG, HOI WAN	方海雲
26th	FONG, KWIN	房炅
27th	FUNG, PING KWONG	馮炳光
28th	FUNG, TING HO*EDWIN	馮定豪
29th	FUNG, YUEN MAN*CHERYL	馮婉文
30th	GLEAVE, SIMON JOHN EDWARD
31st	GRASSICK, ALUN CLARK
32nd	GU, JOHN JUNHUA	古軍華
33rd	GUEN, KIN SHING	姜健成
34th	HO, KHOON MING
35th	HO, WAI MING	何偉明
36th	HO, YING MAN*SIMON	何應文
37th	JAMIESON, GRANT ANDREW
38th	KO, CHEE WAI*DAVID	高智緯
39th	KUNG, PETER	龔永德
40th	LAI, CHI YIN	黎志賢
41st	LAI, CHUN MAN	黎俊文
42nd	LAM, KAI WA	林啟華
43rd	LAU, KWOK YIN*PAUL	劉國賢
44th	LEE, KA NANG	李家能
45th	LEE, KWO HANG*FELIX	李果行
46th	LEE, LING TAK*MAGGIE	李令德
47th	LEE, LOK MAN	李樂文
48th	LEE, WAI SHUN WILSON	李威信	[REDACTED]	[REDACTED]
49th	LEE, YUEN MEI*MARIA	李婉薇
50th	LEUNG, SUET NGOR	梁雪娥
51st	LEUNG, SZE KIT	梁思傑
52nd	LEUNG, TAT MING	梁達明
53rd	LI, KA LAM	李嘉林
54th	LI, SHUK YIN	李淑賢
55th	LIU, TSZ BUN*BENNETT	廖子彬
56th	LIU, YUN BONN	廖潤邦
57th	MACPHERSON, AYESHA ABBAS
58th	MCSHEAFFREY, PAUL KEVIN
59th	MERCER, STEPHEN GEORGE
60th	MORLEY, CATHERINE SUSANNA
61st	NG, KAR LING*JOHNNY	吳嘉寧
62nd	NG, KWOK KEUNG*RAYMOND	吳國強
63rd	NG, YIU FAI	伍耀輝
64th	NIKZAD ABBAS ABADI, BABAK
65th	O’BRIEN, IAN CHARLES
66th	PANG, SHING CHOR*ERIC	彭成初
67th	PARKER, STEVEN ROY
68th	PHILLIPS, WARREN PETER
69th	SHUM, MAN KWONG*ALEX	岑文光
70th	SIU, CHI HUNG	蕭志雄
71st	SZE, CHIN FONG*RONALD	施展芳
72nd	TANG, YUEN YEE*LOREN GERTRUD	鄧苑儀
73rd	TO, HONSON	陶匡淳
74th	TSE, WONG PUI	謝旺培	[REDACTED]	[REDACTED]
75th	WAI, KA LUN	韋家倫
76th	WAN, CHI YAU*CHARLES	温梓佑
77th	WEIR, ANDREW WALTER BOUGOURD ROSS
78th	WONG, JACQUELINE	黃潔雲
79th	WONG, MAN KAI*RICKY	黃文楷
80th	WONG, MAN YEE KATY	黃文怡
81st	WONG, PO SHAN	黃寶珊
82nd	WONG, SAU LING	王秀玲
83rd	WONG, WING SZE*TIFFANY	黃詠詩
84th	WONG, YUEN SHAN ELISE	黃婉珊
85th	WU, MAO CHIN
86th	XING, CHRISTOPHER GUO
87th	YAN, LAP KEI*ISAAC	殷立基
88th	YEUNG, KA CHUN	楊家俊
89th	YEUNG, KA YIN KARMEN	楊嘉燕
90th	YIP, KA MING*ALICE	葉嘉明
91st	ZIRLEN, BRUCE

HCMP 2590/2017

[2019] HKCFI 67

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2590 OF 2017

________________

IN THE MATTER of an application on behalf of the Joint & Several Liquidators of China Medical Technologies, Inc. against Christopher Barry Abbiss and the 90 other persons listed as the 2nd to 91st Defendants in the Schedule hereto for orders of committal

________________

BETWEEN
	THE JOINT AND SEVERAL LIQUIDATORS OF	Plaintiffs
	CHINA MEDICAL TECHNOLOGIES, INC
AND
	CHRISTOPHER BARRY ABBISS	Defendants
	and the 90 other persons listed as the 2nd to 91st Defendants in the Schedule hereto

________________

Before: Hon Harris J in Chambers

Date of Hearing: 25 July 2018

Date of Decision: 9 January 2019

___________________

D E C I S I O N

___________________

1.   By summonses dated 11 December 2017 and 16 April 2018 the Defendants seek to strike out as against certain Defendants the present contempt proceedings.  By further summonses dated 9 March 2018 and 16 April 2018 the Defendants seek the determination of a preliminary issue in respect of the contempt proceedings.

2.   The contempt proceedings arise from orders made pursuant to section 221 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, (“Orders”).  These Orders were obtained by the Plaintiffs who are the Joint and Several Liquidators of China Medical Technologies Inc.  The Respondents to the Orders were KPMG (1^st Respondent) and 16 individuals at the time assumed to be partners in KPMG (2^nd to 17^th Respondents).  The precise terms of the Orders and the circumstances in which they came to be made and varied do not matter for present purposes, but are described in detail in my decisions in HCCW 435/2012 and in one decision of the Court of Appeal in CACV 65/2017.  For present purposes what is relevant is who the Orders were made against and, arguably, the persons named as the Respondents to the Orders.  Each of the Orders directed the 1^st Respondent, KPMG, to do what was specified in the Orders.  None of the Orders required the 2^nd to 17^th Respondents to do anything although it did provide for them to return to court in the event that they believed that there was a problem which inhibited compliance with the Orders.

3.  The originating summons dated 22 November 2017 commencing the contempt proceedings, which was amended on 21 December 2017, names 91 Defendants, who are listed in the schedule to the originating summons.  The 91 Defendants are said in the heading to the schedule to be partners of KPMG at all times from 5 February 2015.  Paragraph 6 of the originating summons asserts that KPMG is a partnership under the laws of Hong Kong (which is not in dispute) and comprises of or is owned by the Defendants each of whom was a partner of KPMG throughout the section 221 proceedings and remains so at the date of the statement dated 25 October 2017 in support of the application for leave to commence the contempt proceedings.

4.  The strike out application is based on the premise that there are two categories of Defendants who should not be joined as parties to the contempt proceedings.  The 1^st category consists of eight partners who had retired at the date of issue of the contempt proceedings: 22 November 2017.  An order has been agreed in respect of this application except costs.

5.  The 2^nd category are those Defendants who were not named as Respondents to the Orders, did not file evidence in the section 221 proceedings and have filed evidence stating that they had no involvement in, nor knowledge of, the section 221 proceedings.  In the period prior to the hearing of the application, the parties managed to agree amendments to the Defendants to the amended originating summons deleting partners who the Liquidators are prepared to agree should not be defendants to the contempt proceedings.  However, costs remain in issue.

6.  It seems to me that in respect of both categories the Liquidators should pay the costs.  There was never any realistic prospect of the court making substantive orders, including adverse costs orders, against partners who were not Respondents to the Orders and in respect of whom there was no reason to believe they were in some way culpable for any contempt that is established.  The Liquidators in deciding to commence the contempt proceedings against all KPMG’s partners took the risk of facing the kind of objections that led to the strike out application.

7.  The claims against the category 2 Defendants were always likely to be problematic.  In respect of the category 1 Defendants only two partners were Respondents to the Orders, Edwin Fung (D28) and Isaac Yan (D87), who were respectively the 13^th and 10^th Respondents.  The other six also fell within category 2.  It seems to me that it was perfectly reasonable for the relevant Defendants to seek to have themselves removed as Defendants, and the fact that to do so the applications were structured depending on the precise circumstances of each Defendant in one of the two ways that I have described is immaterial.  The applications were properly brought and successful and it cannot in my view sensibly be said that the way they have behaved has in some way resulted in them being joined, as it turns out, unnecessarily.

8.  The more substantive matter for my determination is the preliminary issue. The parties have tried unsuccessfully to agree the formulation of the point of law to be decided without success.

9.  The Defendants argue that the following is the appropriate formulation:  Whether the Rules of the High Court (Cap 4A) O 81, r 1 is applicable to an order made pursuant to section 221 of the former Companies Ordinance, Cap 32 (or pursuant to section 286B of the present Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32), such that the Court can make an order pursuant to the said section 221 (or pursuant to the said section 286B) binding on all the individual partners of a firm by merely naming the firm, but without naming any of the partners, in the order.

10.  The Liquidators argue that it should be formulated as follows:

(1)  Is an order pursuant to section 221 (now repealed) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32 made in the name of a firm valid and enforceable?

(2)  If such an order is enforceable, may such an order by enforced by an application for committal for contempt pursuant to O 52 of the Rules of the High Court in the name of the partners of the firm, subject to the obligation to obtain leave to commence proceedings against those partners, or is such application to be brought against the firm itself?

11.  The inability to agree the formulation of the preliminary issue arises in large part I suspect, because the Defendants have not made it clear what they say the consequence would be if I answer their formulation of it, as the Defendants argue I should, in the negative.  The argument itself is straightforward.  The Defendants do not argue that an order pursuant to section 221 cannot be made against a partnership.  The Defendants argue that if an order is made against a partnership the respondents, for reasons explained below, should be each partner in the partnership at the relevant time, namely, when the claim arose.  RHC O 81 does not apply to an application under section 221 and, therefore the Respondent cannot be the name of the firm as is the case in the relevant proceedings.

12.  Section 221(1)  is in the following terms:

“221. Power to summon persons suspected of having property of company

(1) The court may, at any time after the appointment of a provisional liquidator or the making of a winding-up order, summon before it any officer of the company or person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or any person whom the court deems capable of giving information concerning the promotion, formation, trade, dealings, affairs, or property of the company.”

13.  “Person” is defined in section 3 of the Interpretation and General Clauses Ordinance, Cap 1, as including “any body of persons, corporate or unincorporated….”  An order can, therefore, be made against a partnership and this, as I have already noted, is uncontroversial. 

14.  Mr Joffe argued that a partnership is not a separate legal entity and, therefore, a partnership can only be sued in the name of individual partners.  RHC O 81 is a procedural device which avoids the necessity of naming all partners and permits the partnership to be sued in the firm’s name.  It does not alter substantive partnership law.[1]  The Defendants argue, O 81 does not apply to all applications brought against a partnership in the High Court.  Order 81, r 1 is in the following terms:

“1. Actions by and against firms within jurisdiction (O. 81, r. 1)

Subject to the provisions of any written law, any 2 or more persons claiming to be entitled, or alleged to be liable, as partners in respect of a cause of action and carrying on business within the jurisdiction may sue, or be sued, in the name of the firm (if any) of which they were partners at the time when the cause of action accrued.”

15.  The reminder of the order is framed in such language, says Mr Joffe, as to be only apposite to writ actions, which is consistent with the reference to causes of action and parties being sued being sued in r 1.  I accept that the drafter seems to have been focused on partnerships, which either as plaintiffs or defendants become parties to writ actions or other proceedings, which require acknowledgement of service and commonly produce final judgments.  It does, however, seem strange that what, as Mr Joffe accepts, is a procedural device intended to avoid the necessity of listing all the partners in the firm in the court documents, does not apply to all applications in the High Court in which an order is sought against a partnership.  Mr Manzoni cited a number of final appellate authorities in which it would appear that section 221 type orders had been made against partnerships in the firm’s name in various jurisdictions with similar rules to O 81 without this point ever being raised.[2]

16.  Counsel did not cite any authorities in which contempt proceedings has been brought against a partnership in a firm’s name. My own research has identified two.  The first is Re A Solicitor (Disclosure of Confidential Records)[3] in which a firm of solicitors was held liable for contempt of court.  The court said “I impose a fine upon the firm of solicitors collectively of £1,000.  I order the firm to pay the costs of the Official Solicitor of the committal proceedings, those costs, if not agreed, to be taxed on an indemnity basis.”  The consequence for individual partners was that they became liable to contribute to the payment of the fine.

17.  In Grand Union Insurance Co Ltd v Clyde & Co (A Firm),[4] there was an application for contempt of court against Clyde & Co.  Although the court found that the applicant had failed to prove beyond a reasonable doubt that the firm was guilty of contempt, there is nothing in the report to indicate that the defendants or the court doubted that Clyde & Co as a partnership could be liable for contempt of court.

18.  These authorities do not consider whether O 81 or its foreign equivalent applied to the proceedings before the court and are not authorities for the construction advanced by Mr Manzoni, although they do appear to demonstrate that in various cases it has been assumed that applications, including contempt proceedings, which are not commenced by writ or involve proceedings that might conventionally described as “suits”, can be issued with the partnership being described by the use of the firm’s name rather than listing each partner.

19.  It seems to me that the answer to the question is this.  Order 81, r 1 refers to claims in respect of a cause of action.  As Diplock LJ explained in the Court of Appeal in Letang v Cooper[5] a cause of action can be defined as “simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person.”  This is wide enough to cover a liquidator seeking an order for production pursuant to section 221.  This being the case is there any particular reason why the rule should be read as restrictively as Mr Joffe contends?  Mr Joffe’s argument for so doing turns on the assumption that O 81, r 1 is to be read as applying only to partnerships suing or being sued; a reading which is supported he says by the tenor of the subsequent rules.  This seems to be unnecessarily restrictive.  I note that r 8, which was introduced after a similar amendment in England in 1962, provides that rr 2–7 apply to actions commenced to actions begun by originating summons.  This is relevant in two ways.  First, it indicates that r 1 applies to claims against a partnership that can be begun by originating summons such as an application for an order under section 221.  Secondly, all that r 8 does is to apply the procedures in rr2–7 to originating summons proceedings, which indicates in my view that r 1 applied to applications begun by originating summons even before the introduction of r 8.  It follows that rr 2–7 are not to be read as defining what kind of action r1 applies to.

20.  It seems to me that there is no reason to read O 81, r 1 in the restrictive way in which the Defendants contend.  I, therefore, answer the question posed in the summons in the affirmative.

21.  This would seem to leave open the question of who, given the agreement to delete various partners, are the defendants.  It would appear that it is no longer the partnership as a whole, but the remaining individual partners.  Whether or not orders against particular partners should be made in the event that contempt is proved, as opposed to an order against the partnership, will depend on whether or not RHC O 45, r 7(2)(a) has been complied with.[6] The effect of the Orders was to require KPMG to do certain things.  Any individual partner of KPMG served in accordance with r 7(2)(a) became under a personal obligation to takes steps to facilitate compliance.  This is a consequence of the characteristics of a partnership, which imposes joint liability for the obligations on the partnership on each partner.[7]  Precisely what has happened in terms of service and its consequences are not matters I have to consider at this stage.

22.  I will make a costs order nisi that the Defendants pay the Liquidators costs of the preliminary issues, such costs to be taxed if not agreed, and paid forthwith.

	(Jonathan Harris)
	Judge of the Court of First Instance High Court

Mr Charles Manzoni SC, instructed by Lipman Karas, for the plaintiffs

Mr Victor Joffe and Mr Wilson Leung, instructed by Reynolds Porter Chamberlain, for the 1^st to 91^st defendants

Schedule

Defendants

Partners of KPMG who were Partners at all times from 5 February 2015

Defendant No.	Name (English)	Name (Chinese)	ID Card No.	Address
1st	ABBISS, CHRISTOPHER BARRY		[REDACTED]	[REDACTED]
2nd	AU, YAT FO	區日科
3rd	BARBER, VAUGHN CARLYLE
4th	BOWDERN, DARREN RAYMOND
5th	BOWRA, MARK WILLIAM
6th	CHAMBERLAIN, RUPERT JOSEPH
7th	CHAN, KIM TAK*DANIEL	陳儉德
8th	CHAN, SIU TUNG	陳少東
9th	CHATTOCK, JOHN PAUL
10th	CHENG, PUI NGAR	鄭沛雅
11th	CHENG, WING HAN	鄭詠嫻
12th	CHEUNG, CHO TUNG*TONY	張楚東
13th	CHEUNG, WAI YU*JANET	張慧如
14th	CHEUNG, WING HAN	張頴嫻
15th	CHIU, MUN WAI	招敏慧
16th	CHOI, CHUNG CHUEN	蔡忠銓
17th	CHU, NGAR YEE	朱雅儀
18th	CHU, PING FAI	朱炳輝
19th	CHUI, MING WAI	徐明慧
20th	CHUNG, KAI MING	鍾啟明
21st	CHUNG, WAI YIN*CHRISTINE	鍾慧賢
22nd	CROWE, WILLIAM ANDREW		[REDACTED]	[REDACTED]
23rd	DEBNAM, NICHOLAS JAMES
24th	DONOWHO, SIMON CHRISTOPHER
25th	FONG, HOI WAN	方海雲
26th	FONG, KWIN	房炅
27th	FUNG, PING KWONG	馮炳光
28th	FUNG, TING HO*EDWIN	馮定豪
29th	FUNG, YUEN MAN*CHERYL	馮婉文
30th	GLEAVE, SIMON JOHN EDWARD
31st	GRASSICK, ALUN CLARK
32nd	GU, JOHN JUNHUA	古軍華
33rd	GUEN, KIN SHING	姜健成
34th	HO, KHOON MING
35th	HO, WAI MING	何偉明
36th	HO, YING MAN*SIMON	何應文
37th	JAMIESON, GRANT ANDREW
38th	KO, CHEE WAI*DAVID	高智緯
39th	KUNG, PETER	龔永德
40th	LAI, CHI YIN	黎志賢
41st	LAI, CHUN MAN	黎俊文
42nd	LAM, KAI WA	林啟華
43rd	LAU, KWOK YIN*PAUL	劉國賢
44th	LEE, KA NANG	李家能
45th	LEE, KWO HANG*FELIX	李果行
46th	LEE, LING TAK*MAGGIE	李令德
47th	LEE, LOK MAN	李樂文
48th	LEE, WAI SHUN WILSON	李威信	[REDACTED]	[REDACTED]
49th	LEE, YUEN MEI*MARIA	李婉薇
50th	LEUNG, SUET NGOR	梁雪娥
51st	LEUNG, SZE KIT	梁思傑
52nd	LEUNG, TAT MING	梁達明
53rd	LI, KA LAM	李嘉林
54th	LI, SHUK YIN	李淑賢
55th	LIU, TSZ BUN*BENNETT	廖子彬
56th	LIU, YUN BONN	廖潤邦
57th	MACPHERSON, AYESHA ABBAS
58th	MCSHEAFFREY, PAUL KEVIN
59th	MERCER, STEPHEN GEORGE
60th	MORLEY, CATHERINE SUSANNA
61st	NG, KAR LING*JOHNNY	吳嘉寧
62nd	NG, KWOK KEUNG*RAYMOND	吳國強
63rd	NG, YIU FAI	伍耀輝
64th	NIKZAD ABBAS ABADI, BABAK
65th	O’BRIEN, IAN CHARLES
66th	PANG, SHING CHOR*ERIC	彭成初
67th	PARKER, STEVEN ROY
68th	PHILLIPS, WARREN PETER
69th	SHUM, MAN KWONG*ALEX	岑文光
70th	SIU, CHI HUNG	蕭志雄
71st	SZE, CHIN FONG*RONALD	施展芳
72nd	TANG, YUEN YEE*LOREN GERTRUD	鄧苑儀
73rd	TO, HONSON	陶匡淳
74th	TSE, WONG PUI	謝旺培	[REDACTED]	[REDACTED]
75th	WAI, KA LUN	韋家倫
76th	WAN, CHI YAU*CHARLES	温梓佑
77th	WEIR, ANDREW WALTER BOUGOURD ROSS
78th	WONG, JACQUELINE	黃潔雲
79th	WONG, MAN KAI*RICKY	黃文楷
80th	WONG, MAN YEE KATY	黃文怡
81st	WONG, PO SHAN	黃寶珊
82nd	WONG, SAU LING	王秀玲
83rd	WONG, WING SZE*TIFFANY	黃詠詩
84th	WONG, YUEN SHAN ELISE	黃婉珊
85th	WU, MAO CHIN
86th	XING, CHRISTOPHER GUO
87th	YAN, LAP KEI*ISAAC	殷立基
88th	YEUNG, KA CHUN	楊家俊
89th	YEUNG, KA YIN KARMEN	楊嘉燕
90th	YIP, KA MING*ALICE	葉嘉明
91st	ZIRLEN, BRUCE