Hong Kong Yin Hing Monastery Ltd v. Secretary for Justice

HCMP 118/2011

[2020] HKCFI 609

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 118 OF 2011

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Before:  Hon Lok J in Chambers

Date of Hearing:  9 September 2019

Date of Decision:  16 April 2020

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DECISION

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1.This is the Plaintiff’s appeal from the order of Master Chow (“the Master”) dated 17 December 2018 dismissing its application for specific discovery.

2.The Plaintiff’s application, made by summons dated 28 February 2018, was initially for discovery of two broad classes of documents.

3.By the time of the hearing before the Master, the Plaintiff’s requests were narrowed down to one for the unredaction of an internal memo dated 18 December 1985 (“the Disputed Memo”), which the Government had produced but partially redacted on the ground of legal professional privilege (“LPP”).

4.The Master refused to order the Government to produce the unredacted version of the Disputed Memo.  The Plaintiff now appeals against the Master’s decision.

The Plaintiff’s case

5.The Plaintiff is the government lessee of Lot No. 395 in Demarcation District No. 310, Lantau (“the Lot”) and holds the Lot under New Grant No. 5748 dated 13 November 1974 (“the New Grant”).

6.The New Grant contained the following Special Condition (Special Condition 31) commonly found in Government leases:

“No grave shall be made on the lot, nor shall any human remains whether in earthenware jars or otherwise be interred therein or deposited thereon.”

7.By January 1986, various structures had been erected on the Lot (“the 1986 Structures”) and ashes resulting from the cremation of human remains were stored in some of the 1986 Structures.

8.By letter dated 20 January 1986 (“the 1986 Letter”), the District Lands Officer, Islands (“DLO”) on behalf of the Government informed the Plaintiff that:

“...This office is now not prepared to take lease enforcement action against the storage of human ashes within and confined to the existing structures at the above [Lot].

I must however warn you that the above does not confer on you any right or preclude from any action taken by other Government departments for your above activity. The Government reserves all its rights under the conditions of the above [Lot], including the right of re-entry, in case of any future breach of lease conditions.”

9.Before the DLO issued the 1986 Letter, there was an internal memo dated 14 November 1985 (“the November 1985 Memo”) issued by the Director of Housing to the DLO and copied to various other persons. The November 1985 Memo stated, inter alia, that:

“...I am sure the other addressees of this memo will support the proposal of the incorporation of an additional ‘user’ to the lease in question for the placement of tablets and bone-blacks.”

10.The Plaintiff claims that the November 1985 Memo is relevant to the construction of the 1986 Letter.

11.By letter dated 7 October 2010, the DLO informed the Plaintiff that storage of human ashes on the Lot is a breach of Special Condition 31 and other provisions in the New Grant, and the Government may take enforcement action if the breaches are not rectified.

12.On 25 January 2011, the Plaintiff commenced this action and claims that:

(i)  storage of human ashes in the Lot is lawful and permitted under the New Grant, because Special Condition 31, on its true construction, does not prohibit the storage of human ashes, which are not “grave” or “human remains”[1]; and

(ii)  alternatively, if storage of human ashes is a breach of Special Condition 31, the Government is not entitled to take enforcement action on account of storage of human ashes in the 1986 Structures, whether they were already deposited at the time of the 1986 Letter or only deposited after the 1986 Letter.

13.The Plaintiff’s alternative case is premised upon the following:

(i)  by the 1986 Letter (properly construed when read together with the November 1985 Memo), the Government has: (i) waived Special Condition 31 with respect to the 1986 Structures; and (ii) represented that it would not take enforcement action for breach of Special Condition 31 with respect to the 1986 Structures and is now estopped from doing so; and

(ii)  the Government’s enforcement action is time-barred under section 4 of the Limitation Ordinance (Cap 347) or barred by the doctrine of laches.

The Government’s case

14.The Government’s case is that storage of human ashes on the Lot is in breach of Special Condition 31, save to the limited extent provided under the 1986 Letter.

15.The 1986 Letter, on its true construction, merely provided that the Government would withhold enforcement action against those human ashes already deposited as at the date of the 1986 Letter in two of the 1986 Structures (“the Two 1986 Structures”).  In other words, the following are not covered:

(i)  any deposits made in the Lot subsequent to the 1986 Letter, whether in the Two 1986 Structures, other 1986 Structures, or structures erected after the 1986 Letter; and

(ii)  any deposits already made at the date of the 1986 Letter in any 1986 Structures that are not the Two 1986 Structures.

16.The Government claims that the said construction is supported by the matters below, as reflected in the November 1985 Memo:

(i)  the human ashes already deposited at the time of the 1986 Letter in the Two 1986 Structures were the human ashes that had been relocated to the Lot from the Great Buddha Temple;

(ii)  such relocation was required because the Great Buddha Temple was set to be compulsorily cleared for public works; and

(iii)  the clearance created concern and ire from the temple supporters as regards the displacement of ancestral materials.

17.It was in the above context, says the Government, that:

(i)  the November 1985 Memo suggested the incorporation of an additional “user” for placement of tablets and bone-blacks; and

(ii)  the DLO issued the 1986 Letter.

18.In the circumstances, it is the Government’s case that there was no waiver or representation by way of the 1986 Letter as alleged.  Further, by reason of the matters below, the Plaintiff has been in continuing breach of Special Condition 31 and the Government is not time-barred or prevented by laches to take enforcement action.

19.In around October 2009, it came to the Government’s attention that the Plaintiff was selling niches for the storage of human ashes at the Lot.  A site inspection of Lot by the DLO on 20 July 2010 revealed there were approximately: (i) 4,500 niches on the Lot, of which about 1,200 were occupied; and (ii) 6,100 ancestral spirit tablets, of which 1,200 had been used.

20.As there were more niches than those covered in the 1986 Letter, the Government claims that new human ashes were deposited at the Lot after the said letter.  As stated above, any deposits made subsequent to the 1986 Letter are not covered by the same and thus constitute a breach of the New Grant, calling for enforcement action by the Government.

21.The Government therefore counterclaims in this action for:

(i)  a declaration that the Plaintiff is in breach of Special Condition 31; and

(ii)  an order that the Plaintiff do forthwith remove the human ashes falling outside the scope of the 1986 Letter from the Lot and cease the sale or advertisement of the sale of niches for storage of human ashes on the Lot.

22.On the basis of the parties’ respective cases, a main issue in the action concerns the proper construction of the 1986 Letter. In particular, two aspects of the scope of the 1986 Letter are in dispute:

(i)  The timing of the deposits – does it cover only deposits made at the date of the 1986 Letter, or does it also cover deposits made thereafter?

(ii)  The location of the deposits – does it cover only deposits made in the Two 1986 Structures, or does it also cover deposits in the 1986 Structures other than the Two 1986 Structures?

The discovery

23.This action was first commenced by way of originating summons.  On 2 November 2016, I made an order for the action to continue as if the same has been commenced by writ.

24.The Government filed a List of Documents dated 15 August 2017.

25.By letter dated 17 August 2017, the Plaintiff asked the Government for documents within the classes set out in a schedule.

26.By letter dated 27 October 2017, the Government replied to the Plaintiff’s letter and provided a Supplemental List of Documents and the documents therein.  The Government made it clear that “documents which are not relevant and which are subject to privilege have not been included in the list”.

27.The Disputed Memo, which was one of the documents disclosed, was partially redacted.  In the Affirmation of Hon Tsui San Shirley (“Hon’s Affirmation”) filed on behalf of the Government, the officer of the District Lands Office, Islands stated that:

“With regard to the memo dated 18 December 1985 [i.e. the Disputed Memo] in the above table, the [Government] objects to produce the same except as redacted, on the ground that such part thereof as the [Government] caused to be redacted consist of professional communications of a confidential character between officers of the Lands Department and legal advisors of the Lands Department for the purpose of obtaining or giving legal advice and assistance, and is subject to legal professional privilege.”

28.According to the Plaintiff, the requested documents would be relevant to “ascertaining the intent of the maker of the 1986 Letter”.^[2] However, since the court would be construing the 1986 Letter objectively, what the maker of the 1986 Letter subjectively intended to be the effect of the letter is irrelevant to a claim of waiver or estoppel.[3]  Under such circumstances, the requested documents are quite irrelevant to the issues in the present case.

29.Despite such observation, the Government has disclosed the Disputed Memo in the Supplemental List of Documents.  Hence, the Government may be estopped from denying the relevance of the Disputed Memo and the court has to proceed to determine whether the Government is entitled to redact certain part of the document on the ground of LPP.

The relevant legal principles

30.The present case turns on the question as to whether the Government has provided sufficient particulars about the Disputed Memo to establish the claim for LPP.

31.The general principles on discovery and in particular the redaction of documents have been summarised by me in K&L Gates v Navin Kumar Aggarwal & Ors[4].

32.Though the burden is on the party claiming privilege to establish it, the oath of the party providing discovery is generally conclusive.  This applies to both: (i) the question of whether the party has or has had any documents other than those disclosed; and (ii) the grounds stated in support of a claim for privilege.[5]

33.After the party providing discovery has filed evidence on oath concerning redaction, the burden then shifts to the counter-party to show that a redaction has been done wrongly.[6]

34.In Mimi Kar Kee Wong Hung v Severn Villa Ltd & Ors, Kwan JA stated the following:[7]

“The test is not whether the redacted parts are potentially relevant, and it is not enough that they might provide material for cross-examination as to credit. The test is whether it is not unreasonable to suppose that the parts redacted do contain information which may, either directly or indirectly, enable Ms Wong to advance her own case or to damage the defendants’ case. A heavy burden lies on the party who seeks to challenge the veracity of the other party’s oath regarding redaction”.

35.Kwan JA’s dicta is about redaction on the ground of irrelevance, but the emphasis on the heavy burden upon the party challenging the veracity of the other party’s oath must apply, a fortiori, where the redaction is on the ground of LPP.  This is because “LPP is a fundamental right which the courts will jealously protect”.[8]

36.As to what information that needs to be supplied to establish a claim for LPP, the courts always face a dilemma.  On the one hand, a more detailed description of the documents in the discovery process may be capable of undermining the privilege by revealing too much information.[9]  On the other hand, a party can simply make a bare allegation to avoid discovery making it difficult for the court to scrutinize the genuineness of the allegation.

37.For LPP, there is a clear distinction between a claim for litigation privilege and legal advice privilege.  In West London Pipeline and Storage Ltd v Total UK Ltd, Beatson J said the following:^[10]

“Litigation privilege differs from legal advice privilege, which protects all communications to lawyers. It relates only to communications at the stage when litigation is pending or in contemplation, and only those made for the sole or dominant purpose of obtaining legal advice or conducting that litigation.”

38.The requirements as to the particularity of the documents may be different for these two kinds of privilege.  In respect of a claim for litigation privilege, it would require the court to determine the purpose and motive for the making of the document concerned, but there is no such requirement in the case of legal advice privilege.  Different considerations may therefore apply in determining these two different claims.  There is no hard and fast rule and each case must depend on his own facts.

39.West London Pipeline[11] was a case concerning litigation privilege, the issue of which was whether certain communications were made for the “sole or dominant purpose” of obtaining legal advice for, or conducting, pending or contemplated litigation. Against such context, one can understand why Beatson J considered the affidavits before him unsatisfactory in that they did not enable him to conclude the claim for litigation privilege (on the basis of the deponent’s assertion that the dominant purpose in setting up an investigation into the explosion at an oil terminal was to prepare for contemplated legal proceedings) had been established.

40.It is also worth noting that Beatson J had specified a few scenarios whilst the court may go behind an affidavit of document to scrutinise the validity of a privilege claim, when it is reasonably certain from: (i) the statements of the party making it that the deponent has erroneously represented or has misconceived the character of the documents in respect of which privilege is claimed; (ii) the evidence of the person who or entity which directed the creation of the communications or documents over which privilege is claimed that the affidavit is incorrect; or (iii) the other evidence before the court that the affidavit is incorrect or incomplete on the material points.[12]

41.As the court is required to ascertain the sole or dominant purpose for the making of the document, it needs to consider these matters in deciding whether a claim for litigation privilege is properly established.

42.In Re Highgrade Traders Ltd[13], a case relied upon by the Plaintiff, the issue was again whether a bare assertion of a deponent as to his “dominant motive” was sufficient for a claim of litigation privilege.

43.On the other hand, whether a document contains confidential legal advice is a more straightforward question.  In most cases, the court has to accept the oath given by the party providing discovery as conclusive.  Requiring the deponent to provide too much details about the nature of the legal advice may actually undermine the privilege itself.

44.The dicta I made in K&L Gates v Navin Kumar Aggarwal & Ors[14], therefore, have to be read in such context.

45.For legal advice privilege, communications which contain reference to legal advice are privileged even though the purposes for the making of the communications are unrelated to litigation.  In Documentary Evidence by Charles Hollander QC (13 ed), the learned author said the following:[15]

“Previously, it had been difficult to fit within existing principles the situation where a mere reference to legal advice appears in an unprivileged document. Now, since GE Capital and The Sagheera it is the position that privilege can be claimed for a privileged part of an otherwise unprivileged document and it would be anomalous if privilege could not be claimed for a reference to legal advice in an otherwise unprivileged document. Thus, it may be stated that communications which contain reference to legal advice are privileged to the extent that the legal advice may be redacted whatever the purpose or motive (short of fraud) for which the document comes into existence. So where internal memoranda passed within a bank recording deliberations on whether or not to lend money to certain shipowners, the bank was held entitled to blank out passages containing information and advice obtained from the bank’s lawyers, even though the purpose for which the documents had come into existence was to enable the bank to decide whether to continue to lend money to the owners. Saville J said:

“If a lawyer-client communication falls within the principles set out in [Balabel] (that is to say, is covered by legal professional privilege) then internal documents or part of the documents of the clients (or indeed the lawyer) reproducing or otherwise revealing those communications are also covered by the same privilege whatever the purpose or motive (short of fraud) for which the documents come into existence.”

46.On some occasions, the court may have to look at a whole series of communications in trying to ascertain the relevant context in which a particular document was created and the roles of the sender and recipient in such context.  Sometimes the context may appear on the face of the documents.[16]

47.In Hastie Group Ltd (in lig) v Moore t/as Deloitte Touche Tohmatsu[17], where the relevant document over which privilege was claimed related to a variety of distinct issues (e.g. some redacted materials were legal advice on the issue of “priority of proceeds” while others were strategies on “claims to be made against former directors and officers” of the Hastie Group), the court required a brief explanation of what each redaction related to.

48.In K&L Gates v Navin Kumar Aggarwal & Ors[18], where it was merely asserted that there was a “company secretarial file” subject to legal privilege[19], it was not at all clear what issue the allegedly privileged file might have related to.  In those circumstances, I took the view that further clarification should be made.

49.In contrast, in a case where it is obvious what the redacted material relates to, it will be completely otiose to require the party claiming privilege to spell out what is already apparent on the face of the document or from the surrounding circumstances.  It is critically important that the party must not be made to disclose the very matters which the claim for privilege is designed to protect.[20]

The Disputed Memo and the claim for LPP

50.In the present case, the Disputed Memo was part of a series of internal memos which the Government has disclosed:

(i)  the November 1985 Memo dated 14 November 1985 from the Director of Housing to DLO;

(ii)  the memo dated 3 December 1985 from the District Officer (Islands) to DLO;

(iii)  the Disputed Memo dated 18 December 1985 from DLO to the Director of Housing; and

(iv)  the memo dated 20 December 1985 from the Director of Housing to DLO.

51.I agree with Ms Cheng, counsel for the Government, that the following matters are clear from these memos:

(i)  the series of internal memos (including the Disputed Memo) all concerned one and only one topic, i.e. the relocation of human ashes and tablets from the Great Buddha Temple to the Yin Hing Monastery; and

(ii)  the District Lands Office, Islands and the Lands Department both had a role in the enforcement of Government leases.

52.In the case that the legal advice contained and redacted in the Disputed Memo was given by “legal advisers of the Lands Department” to “officers of the Lands Department”, which the court has no reason to doubt the truthfulness of such allegation, there is then no conceivable doubt that such redacted legal advice must relate to the legal implications of the storage of human ashes at the Yin Hing Monastery.  It is difficult to see how the Government can descend into even greater specificity without disclosing the very content of the legal advice which the claim for privilege is designed to protect.

53.Mr Tsui, counsel for the Plaintiff, makes the following submissions:

(i)  Hon’s Affirmation is “wrong” in that the redacted part of the Disputed Memo “must be a reproduction of the legal opinion, if it existed, in a summary or paraphrased manner”;

(ii)  there was “no mention or reference to the fact that it was the legal adviser’s suggestions/comments/advice being quoted, summarized or paraphrased”;

(iii)  there was “no indication on the scope and nature of the alleged legal opinion, or what issue was involved”; and

(iv)  there was “no explanation as to why conveying the opinion of the legal advisors was necessary in reply to the 1985 Memo”.

54.I find no merit in the first two arguments.  While the Disputed Memo was from the DLO to the Director of Housing, Hon’s Affirmation clearly explains that the redacted part “consist[s] of professional communications of a confidential character between officers of the Lands Department and legal advisors of the Lands Department for the purpose of obtaining or giving legal advice and assistance”.  It should be plain to the Plaintiff that the Disputed Memo reproduced legal advice over which privilege can be claimed.  Whether the legal advice was in “quoted, summarized or paraphrased” form is irrelevant and unnecessary for a claim for privilege.[21]

55.The present case is quite different from the facts in Financial Services Compensation Scheme Ltd v Abbey National Treasury Services Plc[22],a case relied on by Mr Tsui.  The deponent here has positively affirmed that the redacted part of the Disputed Memo contains confidential legal advice, whereas the issues in Financial Services Compensation Scheme were whether the redacted part “evidences” or “reveals” the substance of the legal advice, or whether it could be “inferred” from the documents that they contained legal advice.

56.As to third argument, I agree with Ms Cheng that the nature of the legal advice is clearly identified in Hon’s Affirmation as being given by “legal advisers of the Lands Department” to “officers of the Lands Department”.   As mentioned above, the scope and issue of the advice plainly relate to the storage of human ashes at the Yin Hing Monastery, which was the one and only matter with which the series of memos (including the Disputed Memo) was concerned.

57.As to the fourth argument, it is unclear why an explanation along the lines contended by the Plaintiff is necessary, and how it could be done meaningfully without disclosing the content of the legal advice which the claim for privilege is designed to protect in the first place.

58.For the reasons above, the Plaintiff has failed to discharge the burden in challenging the veracity of the oath of the officer of the District Lands Office, Islands, who has no personal stakes in the matter, regarding the redaction of the Disputed Memo.  I agree with Ms Cheng that this is not a case where the court should go behind an affidavit claiming privilege.  I therefore affirm the decision of the Master and dismiss the appeal.

59.Both parties agree that costs should follow the event.  I therefore order that the costs of this appeal be paid by the Plaintiff.

Mr Wilfred Tsui, instructed by Louis K Y Pau & Co., for the Plaintiff

Ms Bonnie Cheng, instructed by the Department of Justice, for the Defendant