Case Document

100%Judiciary

HCA 2449/2013
and HCA 371/2014
(Heard Together)

[2018] HKCFI 2458

HCA 2449/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2449 OF 2013

______________

BETWEEN
	GOLDBAY FORTIS LIMITED	Plaintiff
	and
	RICH RESOURCE DEVELOPMENT LIMITED	Defendant

______________

AND

HCA 371/2014

ACTION NO 371 OF 2014

______________

BETWEEN
	GOLDBAY FORTIS LIMITED	Plaintiff
	and
	ASIA ALLIED INFRASTURCTURE HOLDINGS LIMITED (亞洲聯合基健控股有限公司)	Defendant

______________

(Heard Together)

Before:

Deputy High Court Judge Keith Yeung SC in Chambers

Date of Hearing:	26 September 2018
Date of Decision:	26 September 2018

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DECISION

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1.This is the Pre-trial Review of HCA 2449/2013 and HCA 371/2014 (heard together) scheduled to commence on 15 January 2019. Apart from seeking certain specific directions for the trial, which are less controversial and which directions I have dealt with consent from the parties, the plaintiff seeks directions on two specific matters. I will deal with them in turn as follows.

Subpoena duces tecum

2.On the application of the plaintiff, Master Wong on 29 August 2018 granted leave to issue 8 Writs of subpoena duces tecum. They are in two sets. Each set of 4 is materially the same, against each of the MTR Corporation Limited (“MTRC”), High Peace Corporation Limited (“High Peace”), Mr David K.L. Law of Messrs Law & Co (“Mr Law”), solicitors acting for High Peace, and Mr Joseph Chung of Messrs Deacons (“Mr Chung”), solicitors for Rich Resource.

3.MTRC has indicated that it requires more time to consider the matter. They asked until end of October to reply. The plaintiff has agreed to the request.

4.Mr Lam and High Peace have maintained that the Subpoena against each of them is liable to be set aside. They nonetheless have indicated that they are willing to produce those documents they set out in their respective letters to the plaintiff. Mr Pow SC who appears for the plaintiff submits that the plaintiff requires time to consider those documents to decide whether in its view Mr Lam and High Peace have adequately answered the Subpoenas. The plaintiff says however that it cannot form a final view in this regard until after they have had the chance to consider the position of Deacons, which I now turn to.

5.Mr Chung of Deacons was served the Subpoenas on 31 August 2018. On 24 September 2018, a substantive reply was issued on his behalf. His position is that:

(a) in so far as documents/correspondence with parties (ie High Peace and the plaintiff) other than with Rich Resource (he calls them Category (1)), the relevant documents have already been disclosed by Rich Resource;

(b) in so far as communication between Deacons and Rich Resourceis concerned, they are divided into Category 2(a) and Category 2(b). In respect of Category 2(a), he is prepared to produce those which he has set out in a list without waiving legal professional privilege in general. In respect of Category 2(b), production is objected to on the basis of legal professional privilege.

6.The plaintiff seeks the following directions in relation to the Subpoenas against Mr Chung:

(a)   the preparation by him of a list setting out the documents in Category 2(b);

(b)   that list must contain adequate description of the documents in it;

(c)   the ground upon which legal professional privilege is claimed; and

(d)   whether legal professional privilege is claimed in respect of the whole of those documents.

7.I refuse to give the directions:

(a)   As explained by the Court of Appeal in To Kan Chi v. Pui Man Yau [1998] 3 HKC 371, it is incumbent upon the party seeking a subpoena to identify the documents concerned;

(b)   Whilst there is no application before me to have the leaves granted by Master Wong set aside, I still have to bear in mind the applicable legal principles when considering and deciding upon the further conduct of the matter;

(c)   Had the documents which the plaintiff is by the Subpoenas seeking to compel Mr Chung to produce been clearly set out inthe Subpoenas, the plaintiff would have known what documents are in Category 2(b). To order Mr Chung to come up with the detailed list is to order him to do what the plaintiff ought to have done to start with. I am not prepared to do that;

(d)   The application for leave was made very late. It could have and should have been made earlier;

(e)   I note that before the application for leave, no application for specific discovery of the documents had been made against RichResource. Nor had there been any correspondence between the plaintiff and the parties concerned for discovery or production of the documents. Further, Order 24, rule 7A could have been invoked, but it was not. An application for discovery ought notto be permitted to be disguised as an application for a subpoena;

(f)   The representative from Rich Resource is going to be a witness during the trial.The existence or otherwise of the documents which the plaintiff is seeking to compel Deacons to produce under the Subpoenas can be the subject matter for cross-examination;

(g)   In the circumstances, I refuse to make the directions sought.

Further expert valuation reports

8.The plaintiff seeks leave to update the market value of the Properties to a date close to trial. I grant leave for parties to do so, though I will order exchange on a date earlier than the one proposed on behalf of the plaintiff. My reasons are as follows:

(a)   At Particulars (i)(b) and (c) under paragraph 33 of the Statement of Claim in HCA 2449/2013, the plaintiff pleads that on the issue of quantum, it relies on the following:

“ (b) the differences between the sum of HK$324,000,000.00 and the market value of the Commercial Development to be assessed by professional valuation as of 4th November 2013, date of this Writ, and/or date of Judgment as this Court deems fit.

(c)   the differences between the sum of HK$75,990,000.00 and the market value of the 49% interest in the Car Park Development to be assessed by professional valuation as of 4th November 2013, date of this Writ, and/or date of Judgment as this Court deems fit.”

(b)   Paragraph 33 of the Statement of Claim in HCA 2449/2013 has been adopted and repeated in the Statement of Claim in HCA 371/2014—see Particulars (1) under paragraph 7 of that Statement of Claim;

(c)   That the plaintiff seeks to rely on the value of the Property as at the date of Judgment as one possible basis of assessment does not take the defendants by surprise;

(d)   Expert reports on the value of the Property as at the date of thealleged breach and date of the Writ have by consent been obtained. It appears true that the plaintiff has not, subsequent to pleadings, repeated its intention to adduce expert valuation reports as at the date of judgment. In particular, all previous directions on the filing of expert reports were confined to valuation as at the dates of breach and Writ;

(e)   Whilst it would have been better if the plaintiff had warned the parties of its intention to seek this further report, it should be noted that all those directions were concerned with retrospective or historical valuation. The valuation the plaintiff is now seeking leave to do is a prospective valuation. It can only be reliably done closer to the date of the judgment;

(f)   I note that none of the defendants have raised any specific prejudice that granting leave may cause;

(i)   Mr Li SC, leading counsel for Rich Resource, in his written submissions objects on three bases:

(1)   that the plaintiff has not taken out proper application for the same, that it has to seek leave and that it has to justify it—This is more a procedural objection. Even in the absence of any specific summons, the Court during a PTR has wide powers to deal with case management issue, which the matter in my view is one. I have also read the pleadings and heard Mr Pow. I am satisfied that in the circumstances of this case, the application is justified;

(2)   that “there has never been any intimation by GF that it also wants to have a valuation on the date of judgment as pleaded or 8 January 2019”—I have dealt with this above;

(3)   that “Legally, it is virtually impossible to say that the date of judgment which is at least more than 5 years after the ‘agreement’ ended can be the relevant valuation date” — I have been taken through a number of authorities. I have considered the case of Johnson v Agnew [1980] AC 367 at 400H – 401C. The adoption of the value of the property concerned on a date other than that of the breach is legally possible. Whist the general rule is to take the date of breach, “this is not an absolute rule: if to follow it would give rise to injustice, the court has power to fix such other date as may be appropriate in the circumstances.” Market fluctuation can be a relevant considerationwhen deciding whether the general rule should beapplied—see Suleman v Shahsavari [1988] 1 WLR 1181 at 1183D–E. The Court is to compensate wrong, but not to perpetuate wrong. I agree with Mr Pow that this is not the occasion to determine the issue. All the plaintiff is seeking to do is to have the opportunity to be prepared for the possibility.

(ii)   Mr Chua SC on behalf of Asia Allied objected on the basis that this will be the plaintiff’s third bite of the cherry, and that “to allow this proposal at this late state would incur unnecessary time and expense on such reports veryclose to trial, which is undesirable.” However, any time and expense if turned out to be improperly spent can be subsequently compensated. Given the pleadings and the law as explained in Johnson v Agnew, it is my view that it is desirable to have the report. As to the concern about the lateness of the application, it can be addressed by the imposition of a tighter timetable;

(g)   On the other hand, if I refuse the plaintiff leave at this stage, there will be no evidence before the court on the value of the property as at the date closer to judgment, even if the Court ultimately is of the view that it is fair and just to adopt that value as the basis of assessment.