Schindler Lifts (Hong Kong) Ltd v. The Incorporated Owners of Shun Chi Court
Read the full judgment text of DCCJ 1797/2016 on BabelCite. This District Court judgment was delivered on 18 January 2019.
1. This is the plaintiff’s appeal against Master SH Lee’s Order dated 16 May 2018 (“the Order”) where the master had refused an application of the plaintiff to seek specific discovery of certain documents against the defendant in this case.
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DCCJ 1797/2016 [2019] HKDC 79 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 1797 OF 2016 ---------------------------
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-------------------------- DECISION -------------------------- INTRODUCTION 1.This is the plaintiff’s appeal against Master SH Lee’s Order dated 16 May 2018 (“the Order”) where the master had refused an application of the plaintiff to seek specific discovery of certain documents against the defendant in this case. BACKGROUND The application 2.The plaintiff and the defendant had entered into a contract for the maintenance of the passengers’ lifts situated within the defendant’s estate. The lifts located over several blocks of buildings. There was a total of 24 lifts (“the Lifts”). The contract expired on 31 December 2015 (“the Contract”). Thereafter, the defendant engaged Sun Fai Engineering & Equipment Company Limited (“Sun Fai”), an unrelated company, to carry out inspection and necessary repair/remedial works to the Lifts and also to replace the Lifts with new ones. The defendant asserts in its counterclaim that the remedial works carried out by Sun Fai should have been done by the plaintiff during the period covered by the Contract and at no extra charge to the defendant. 3.At the CMC hearing on 3 January 2018, the parties agreed that the following are the issues in dispute in this case:-
4.The specific discovery application is related to the counterclaim made by the defendant against the plaintiff in the proceedings. 5.The plaintiff’s application for specific discovery under its summons dated 14 November 2017 (“the Summons”) originally including the following categories of documents:-
6.I should note that by the time of the appeal, item (1) above had been abandoned and the dates for items (2) and (3) had been amended twice. DISCUSSION Procedural matters 7.Before discussing the substantive issues relating to the appeal, I would like to deal with a couple of procedural matters in this case first. (i) Plaintiff’s appeal bundle 8.Pursuant to practice direction 5.4 (“PD 5.4”), the parties were supposed to agree on and jointly prepare an agreed appeal hearing bundle, dramatis personae and chronology (See §3 of PD 5.4). However, the plaintiff’s solicitors compiled and lodged the appeal bundle in this case unilaterally without first consulting or seeking the defendant’s agreement. 9.At the hearing before the master, the defendant had raised the issue that items 7-9 contained in the present appeal bundle should not be included because it had never been exhibited in any of the affirmations filed by the plaintiff. Further, the defendant claims that those documents were filed after the plaintiff issued the Summons. On the last occasion, the master ruled that those items should be excluded from the hearing bundle. 10.As such, the plaintiff must be fully aware that the defendant would challenge or likely to challenge those items to be included in the appeal bundle. However, without seeking the defendant’s consent, the plaintiff chose to include those items in the appeal bundle. 11.At the appeal hearing, the defendant insisted that those items should not be included in the appeal bundle. 12.Items 7 & 8 consisted of 2 Chinese witness statements from the committee members of the defendant. Item 9 is the “2nd Answer to Further and Better Particulars” dated 11 December 2017 provided by the defendant. As part of the court documents, strictly speaking, they do not need to be included in the appeal bundle in order for the court to look at them. 13.After spending over an hour arguing on the matter at a 2-hour hearing originally fixed on 16 August 2018, I ruled that those documents, while relevant, are only very marginally related to the issues raised by the plaintiff in the present appeal. As the plaintiff’s solicitor has rightly conceded at the hearing, they would only go to the issue of credibility and contained “a small point” only. However, in the interest of justice, I ruled that, like any other documents relevant to the issue of the application, they should be placed before the court. However, I have also specifically mentioned the fact that the plaintiff did not have to include these documents in the appeal bundle, being witness statements and pleadings filed in the proceedings, before they could refer them at the hearing. I therefore allowed items 7-9 to be included in the appeal bundle, subject to the issue of costs. I have specifically reserved the costs issue on that ruling and will deal with it now. 14.First, in my judgment, the arguments are totally unnecessary had the plaintiff’s solicitors observed the requests under the practice directions (“PD”) when compiling the hearing bundle. It has unnecessary prolonged the appeal to the extent that it required a second hearing on 21 August 2018 in order for the parties to complete their submissions. 15.Second, what I am more concerned with in this case is not whether those marginally relevant documents should be included in the appeal bundle (I ruled that they should), but the rather controversial way they found their way in there. 16.It is clear that the plaintiff’s solicitors have shown very little or no regard at all in following the PD in this case. In my view, there is absolutely no reason why the plaintiff’s solicitors could not have sought the defendant solicitors’ agreement on the contents of the appeal bundle by sending them a draft index first before preparing the bundle filing it in court unilaterally. It is clear that the plaintiff had made no attempt to do so and had deliberately included those items which it was fully aware that the defendant was very likely going to dispute. Even in the event that the defendant were to dispute them, the plaintiff could have easily placed those documents under a separate bundle or in different section in the same bundle. In choosing to ignore the PD, not only it shows a complete lack of respect to their opponent, it also creates totally unnecessary work (and therefore incurring unnecessary costs) on both sides. In this case, it has also resulted in a further hearing. Most importantly, such act in my view has undermined the underlying objectives of the Civil Justice Reform (“CJR”) which could have been easily avoided should the plaintiff’s solicitors cared to observe the PD in this case. 17.In my judgment, what makes this case worse is the fact that, after the defendant raised the objection, instead of rectifying the mistake by simply took out the offending documents from the appeal bundle and apologize to the other side, the plaintiff chose to lodge a “supplemental skeleton argument” to allegedly “deal with some procedural matters raised by the defendant in its skeleton” on 15 August 2018, the day before the substantive hearing. 18.Not only the so called “supplemental skeleton argument” was filed late in the day and without the leave of the court, in my view, it simply has created unnecessary work for themselves and caused additional costs to what was a simple and straightforward appeal. 19.In my judgment, all the above unnecessary work and additional costs were caused by the failure of the plaintiff’s solicitors in observing the PD. I see no reason why the plaintiff should not bear those costs and on an indemnity basis. I so make such an order. I would therefore direct the defendant to lodge a statement of costs with the clerk of this court pertaining to this procedural issue (including the time spent on arguing on the matter at the first hearing), within 7 days after the handing down of this decision, with copy to the other side; and the plaintiff to lodge a statement of objection within 7 days thereafter, for the court’s summary assessment. (ii) Plaintiff’s skeleton submissions 20.One other procedural matter which I would like to mention is the fact that there are a few documents attached to the plaintiff’s skeleton submission dated 13 August 2018, including extracts from an ordinance and a copy of an unreported judgment. They are not labelled as part of the authorities going to be relied on by the plaintiff at the hearing. No list of authorities had been drawn up and no numbering had been given to those documents. They were in breach of §§5&10 of PD 5.4. (iii) No pagination in the appeal bundle index 21.I also noted that no page numbers have been provided in the appeal bundle’s index. This makes referencing to the documents in the bundle extremely difficult, if not impossible. 22.Although (ii) and (iii) above are not important matters, but it does in my view show that either the plaintiff’s solicitors do not care about following the requirements under the PD or worse still had simply chose to ignore them and decided to do things in their own ways. Either way, it makes a mockery of having the PD in the first place and displays a certain element of arrogance on their part. I consider such defective ways of including cases without a list of authorities and preparing bundle index without page number reference should not only be frown upon, but any materials included in such a way in future should be simply ignored by the court and the solicitors responsible should personally bear all the unnecessary costs involved. Substantive issues (i) Legal principles involved 23.The criteria of making specific discovery has been succinctly summarized in Jade’s Realm Ltd v Director of Lands (2014), unreported, HCA 1509/2012 (10.6.2014) as follows :-
24.Therefore, as a prerequisite for specific discovery, the plaintiff must show (a) the documents exists which has not been disclosed already; (b) the documents relate to a matter in issue; and (c) the documents are in the possession, custody or power of the other party. (ii) The plaintiff’s requests for specific discovery 25.At the outset, I would like to point out the fact that the plaintiff’s request for specific discovery is rather unusual and the path it has taken was rather unconventional. 26.In his skeleton argument, the plaintiff’s solicitor, Mr Geoffrey Shaw (who represented the plaintiff at the appeal hearing), has submitted that, given the contractual relationship between Sun Fai and the defendant, “one would expect the following documents would be generated”:-
27.The plaintiff complained that the defendant had only produced - but did not discover - a quote from Sun Fai which states that the goods were to be delivered 130 days after the signing of the contract and receipt of a deposit. 28.Further, the plaintiff complains that the defendant has only discovered a small number of documents in this case, namely:-
29.Thus, the plaintiff claims that the defendant has only discovered one single document in connection with the remedial work and the contract with Sun Fai. 30.The plaintiff further claims that the documents they seek are necessary for the plaintiff to develop its defence to the defendant’s counterclaim, in particular to investigate into whether the defendant has mitigated its alleged loss. (iii) History of the application 31.Before dealing with whether the discovery should be allowed, I think it is important to set out the history of the application here in order to understand why a simple application could get so out of hand. 32.On 29 June 2017, the plaintiff’s solicitors, Messrs Haley Ho & Partners (“HHP”), wrote to the defendant’s solicitors, Messrs Lam Fung & Co (“LFC”), requesting further discovery. I think it is fair to say that the request was couched in very wide and general terms and for unnecessary lengthy period of time. The original period from which discovery was sought for all 3 categories of documents was from 1 January 2013 to 18 January 2016, a period of over 3 years. 33.On 12 July 2017, LFC asked for further time to search for and locate the documents. 34.On 27 July 2017, LFC replied to HHP and stated categorically that they did not have the “relevant documents and information” requested. 35.Not satisfied with the answer, HHP wrote to LFC on 7 August 2017 again, asking whether the requested documents “have been in your client’s possession, custody or power”. 36.On 11 August 2017, LFC replied and stated that “[w]ithout prejudice to our previous reply, the discovery request made by you as stated in your letter dated 29th June 2017 is too wide”. LFC also clearly stated that “[a]ny document the Plaintiff seeks to discover must be matters to which an inference can properly be drawn that they are subject to controversy between the parties.” They asked HHP to identify “the period and relevancy of the documents and information” they were requesting for. They stated that upon receiving their reply, they will request the defendant to conduct a search again for the “said documents and information”. 37.On 18 December 2017, Mr TH Wong, the chairperson of the defendant, made an affirmation and confirmed that “the Defendant has (sic) previously confirmed that it has no further documents to be disclosed”. 38.However, what the plaintiff did not mention in its written submissions is the fact that before this specific discovery application was made, the plaintiff had already issued a summons seeking an “unless order” for the defendant to file a supplemental list of documents. They lost the application before the master. Then on appeal, His Honour Judge KW Wong made the following order:-
39.The reasons for that decision was handed down by the court on 22 September 2017. 40.Therefore, what seems to be abundantly clear in this case is that, prior to the Summons was issued, the defendant had already confirmed to the plaintiff that it has no further documents to be disclosed, other than those which had already been disclosed by the defendant. 41.In relation to the 3 categories of documents sought by the plaintiff in the discovery summons, the defendant had also made clear by its letter dated 27 September 2017 that the defendant did not have and do not have in the possession of the documents the plaintiff was asking for. 42.However, the plaintiff was still not satisfied with those unequivocal answers. It proceeded with the specific discovery application on 14 November 2017. Having lost the application before the master, it then took the matter on appeal before me. 43.It is important to note that in the Summons originally heard before the master, the dates sought for the documents between (1) the defendant and Sun Fai; (2) the defendant and companies other than Sun Fai; (3) the defendant and EMSD was in relation to a period just slightly over 3 years between 1 January 2013 and 18 January 2016. 44.I note the fact that it has never been disputed in this case that, for the period between 1 January 2013 and 31 December 2015, the plaintiff was the contractor responsible for the inspection, repair work and extra remedial work for the Lifts at the defendant’s premises. The defendant did not engage Sun Fai to carry out any of those works during that period. Therefore, it is not surprising that Wong of the defendant has stated in his affirmation that there was “no emails, letters, messages, reports, meeting notes, invoices, receipts, quotes, contracts or other documents” passed between the defendant and Sun Fai during that period. 45.As for the period between 1 January 2016 and 18 January 2016, ie the first 18 days of the contract period between the defendant and Sun Fai, Wong has already stated in his affirmation that the defendant had disclosed all such relevant written documents exchanged between the defendant and Sun Fai in relation to the inspection, repair work and extra remedial work for the Lifts in question. That will be the end of the matter. If the plaintiff does not believe Wong, it can always cross-examine him on this matter at the trial. 46.For the category (ii) documents, the defendant already in its letter dated 27 September 2017 stated clearly that it did not have “in its possession, custody of power of those item requested” since, according to them, “such items never existed.” By the same token, between 1 January 2016 and 18 January 2016, the defendant stated for those 18 days when Sun Fai was engaged, there was no documents passed between the defendant and companies other than Sun Fai. 47.For the category (iii) documents, ie documents allegedly passed between the defendant and EMSD, I do not see the relevancy of this at all. Besides, the defendant in its letter dated 27 September 2017 has also made its position very clear on this. It is not surprising therefore that the plaintiff abandoned the request for this category of documents before the appeal. 48.One would have thought that given those unequivocal answers provided by the defendant both in LFC’s letters and Wong’s affirmation, the plaintiff would have been satisfied with their requests. Unfortunately, that was not the case. Instead, it only caused the plaintiff to move its “goalposts”. I notice that each time after the defendant had answered their requests, the plaintiff would then change the dates. For example, before the case was heard before the master, the plaintiff had amended its request, after having had the opportunity to read the affirmation of Wong where the defendant stated categorically that they did not have the documents requested for and had not been in possession of the same. On 23 February 2018, HHP wrote to LFC, indicating its intention to amend their summons to “enlarge” the period of the documents between 1 January 2013 and 31 December 2016 instead of the original “1 January 2013 and 18 January 2016”. 49.On the basis that their client would object to their seeking of the further discovery summons, and on without admitting the period now sought by the plaintiff, LFC wrote back to HHP on 28 February 2018, stating they have no objection to the amendments to the application provided they paid their client’s costs. 50.As a result, the plaintiff amended its application by amending the dates of the documents requested for, from the original date of 1 January 2013 to 18 January 2016 to cover the period from 1 January 2013 to 31 December 2016 instead: (See the amended annexure attached to the Order of Master SP Yip which was filed by consent on 3 April 2018). 51.On 1 March 2018, HHP wrote to LFC, enclosing a draft consent summons for the latter’s consideration. 52.On 2 March 2018, LFC responded by confirming that they did not require a further affirmation to deal with the proposed amendment. They also opined that the plaintiff need not to have any affirmation in reply as a result. 53.On 18 December 2017, which was before HHP “enlarged” the period sought for the further discovery, LFC provided the revised further and better particular (“RF&BP”), which stated that the Contract between the defendant and Sun Fai was in written form. 54.On 11 January 2018, HHP wrote to LFC, referring to Order 24 rule 10 and 11(A) of the Rules of the District Court, requesting a copy of the written contract. 55.On 25 January 2018, LFC responded by providing a detailed “letter” dated 16 December 2015 issued by Sun Fai with the heading of 「九龍觀塘順緻街4-10號順緻苑升降機更新工程投標」 (“Renewal work tender for the lifts at the (defendant’s premises)”). This letter consisted of 4 pages and was written in Chinese. It is a detailed contract in the form of a “quotation”/ “tender” provided by Sun Fai to the defendant for the replacing (as contrast to the repairs or maintenance) of the Lifts as was expressly mentioned in LFC’s letter to HHP dated 25 January 2018. In this letter, LFC has specifically pointed out that “the nature of the contract is entirely different from the maintenance contract the plaintiff and the defendant entered into.” Nevertheless, the defendant sent the plaintiff the “quotation” between Sun Fai and the defendant for the purpose of saving costs and time on both sides. LFC had expressly reserved the right to challenge the relevance of the contract produced by them should the same be produced and included for the trial. 56.In my judgment, it is quite clear from the letter of LFC dated 25 January 2018 that the contract they have mentioned in the RF&BP dated 18 December 2017 for the “changing of all the Lifts” in the defendant’s building was the same “tender” (投標) or “quote” referred to by the defendant in the F&BP. This 4 page document contains all the detailed terms of the contract, including the specifications of the new lifts, the price of each of the lifts and all the payment terms and installation schedules. The letter was signed by Sun Fai with a company chop at the end. 57.I reject the plaintiff’s submission that this was not a written contract and was merely a “quote”. I further reject their contention that Wong’s affirmation in this respect was untrue. With respect, just because the plaintiff’s solicitors could not understand or misunderstood the contents of the “quote”, it does not mean that it was not a contract between the defendant and Sun Fai for the “changing of the lifts”. I find that this contract/tender/quote was not for the maintenance but for the replacement of the Lifts which the defendant had repeatedly emphasised to the plaintiff. Of course, the provision of the new lifts has nothing to do with the issue in dispute between the parties in this case. Thus, again, this document is not relevant to the issues in dispute between the parties. 58.In any event, the “enlarged” period from 1 January 2013 and 31 December 2016 is in my view too long and the documents sought for not relevant to the issues in dispute between the parties in this case. In my view, it was most unlikely that the plaintiff would have been able to obtain an order for the enlarged period at the hearing before the master in any event. 59.Given the above, it is perhaps not surprising to learn that, at the hearing before the master, he directed that the plaintiff to amend the period for which it sought discovery and to reduce it to the period from 18 January 2016 to 31 December 2016 only (“the reduced period”). The reduced period covered a length of around 11.5 months only, which was after the Contract between the plaintiff and the defendant expired on 31 December 2015. I agree with the master’s observation that this would be the only relevant period for the plaintiff’s proposed specific discovery. (iv) Findings of the court 60.I agree with the master that this summons, in the further revised form for the reduced period, should be dismissed with costs for the following reasons. 61.First, I agree with Ms Tang, counsel for the defendant, that the documents sought before the master is not relevant to the issue in dispute between the parties. As stated above, the main issue in this case is whether the detective items existed before the Contract between the plaintiff and the defendant expired on 31 December 2015. What the plaintiff is now seeking is to discover documents which supposed to have exchanged between the defendant and Sun Fai and other companies for a period up to one year after the contractual relationship between the plaintiff and the defendant had ended. 62.For the period originally stated in the summons, namely, between 1 January 2013 and 18 January 2016, the defendant had already through Wong’s affirmation confirmed that there were no further documents to be disclosed: See §5 of Wong’s affirmation. 63.As for the 3 categories of documents sought by the plaintiff in the Summons, Wong also confirmed in the affirmation that those documents did not exist or it had already been disclosed already: See §§10 -12 of Wong’s affirmation. 64.For the period between 1 January 2013 and 31 December 2015, the plaintiff was the contractor’s responsible for the inspection, repair and remedial work for the Lifts. Wong already confirmed that the defendant did not engage any companies other than the plaintiff to carry out such works. Hence, there was no such documents existed between the defendant and companies other than Sun Fai. 65.For the period between 1 January 2016 and 18 January 2016, only Sun Fai was engaged for the inspection, repair and extra remedial work for the Lifts in question. Wong confirmed that there were no documents exchanged between the defendant and companies other than Sun Fai during this period. 66.Given the above matters deposed to by Wong, I agree with Ms Tang’s submission that the “reduced period” for the discovery would not throw any light for the issue in dispute between the plaintiff and the defendant. If there were any repair done by either Sun Fai or other companies before the work of the plaintiff was found to be unsatisfactory, the relevant period must be before the expiry rather than after it. 67.Further, judging from the contents of the contract/quote/tender between the defendant and Sun Fai dated 16 December 2015, it was for the replacing or changing of the Lifts. It has nothing to do with the alleged defective maintenance and/or repair work done by the plaintiff prior to the expiry of the Contract. Thus, it is again not relevant to the issues in dispute. 68.In addition, I accept the defendant’s submission that the request originally sought before the master was simply too wide. The original request sought was also far too general. Further, the period it purported to cover, namely, for over 3 years, was also far too long. 69.In my judgment, the defendant’s stance has remained clear and consistent all along, namely, they had no such documents requested by the plaintiff in their possession, and whatever relevant documents they have, they had already disclosed to the plaintiff. In this respect, I agree with Ms Tang’s submission that discovery do not require parties to turn out the contents of the filing system as if under criminal investigation, merely on the off-chance that something might show up, from which some relatively weak influence which is prejudicial to the case of the disclosing parties might be drawn: See Chau Ka Chik Tso & Others v Secretary for Justice [2006] 2 HKC 95 at 100I-101A. 70.Moreover, in my judgment, the plaintiff in this case has failed to state in its affirmation of why it believed the documents being sought existed at all. There was nothing contained in the plaintiff’s affidavit, which was filed by the plaintiff’s solicitor on behalf of his client, had existed at all. It was, with respect, wishful thinking or mere speculation on the part of the plaintiff. 71.What I find rather disturbing in this case is that when the plaintiff realised that its first request was not sustainable, they then “enlarged” their request to cover a longer period of time. And when that was being challenged by the master at the hearing, they then agreed to “reduce” the period of the discovery down to the reduced period of 11.5 months only. In my judgment, this constant moving of “goalposts” demonstrates that the plaintiff’s application was a “fishing expedition” which was taken out with no real conviction that they believe the documents existed in the first place at all. 72.It is trite that the function of specific discovery is not given a party an opportunity to check up on whether his opponent has given sufficient discovery, the duty of that with the party itself. If the party does not believe his opponent, the proper course to take is to explore the matter during cross-examination at the trial: See Nokia Corporation v TCT Mobile Limited, unreported HCCL 19/2011 5 August 2013; Ng J). 73.I therefore find that the plaintiff in this case has failed to show (a) the documents sought, whether in the original, “enlarged” or “reduced” form, existed at all; (b) that the documents are relevant to the issues in dispute; and (c) that the documents had been in the possession, custody or power of the defendant at all times. 74.The plaintiff strained his argument so far as to say that the documents are relevant to the issue on the mitigation of loss. However, as Ms Tang has rightly pointed out, such issue has not been pleaded in the counterclaim or in the plaintiff’s reply to the counterclaim at all. In any event, there was no mention by any parties or any other companies other than Sun Fai who had been involved in the possible repair/maintenance work. There was no mention of any other companies in the pleadings, witness statement nor was any there mention of any other companies other than Sun Fai in any of the pleadings, witness statements or affirmations filed by the plaintiff. In other words, no other companies ever existed which was remotely related to the dealings between the plaintiff and the defendant in this case. As such, the plaintiff has simply failed to establish where their belief of such documents had ever existed has come from. Thus, in my judgment, the relevance of such categories of documents has not been established at all. 75.Lastly, I would like to mention the fact that in my view the plaintiff has conducted this application with a certain degree of oppressiveness. First, it started with a request in very wide and general terms and for a very lengthy period. When the plaintiff realised that it was not able to get what they wanted, it then changing its “goalposts”byenlarging the scope of the application. When that failed, they then sought to use some technical arguments, namely, that the defendant had never filed a further affirmation to confirm that the documents sought by them in the “enlarged period” had ever been in their possession or existed at all. In my judgment, such way of conducting litigation is not only unhelpful but will bring us back to the “dark age” of the pre-CJR era where satellite applications were allowed to mushroom. As we all know, they only distract the parties from focusing on the real issues in dispute. In my view, such unnecessary wasting of time and costs should be avoided at all cost and the parties should take a more pragmatic and practical approach to the conduct of litigation. CONCLUSION 76.In conclusion, I would dismiss the plaintiff’s appeal with costs in favour of the defendant. Given the way how this application was conducted, I would order that the costs of the appeal should be paid by the plaintiff on an indemnity basis, with certificate of counsel, such costs to be taxed if not agreed. 77.In this regard, I would direct the defendant to lodge a statement of costs within 7 days from the date of handing down this decision and the plaintiff to lodge a statement of objection, within 7 days thereafter, for the court’s summary assessment on the costs of the appeal.
Mr Geoffrey Shaw of Haley Ho & Partners, for the plaintiff Ms Candy Tang, instructed by Lam Fung & Co, for the defendant | |||||||||||||||||||||||||
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