Ch v. Tthm
Read the full judgment text of FCMC 8214/2011 on BabelCite. This Family Court judgment was delivered on 30 November 2020 before District Judge S Lo.
Discovery – Matrimonial Causes – Order 24 RHC – Bank Statements – Fishing Expedition – Beneficial Ownership – Costs in the Cause – District Court – Petitioner sought discovery of bank records and correspondence regarding 7 properties in divorce proceedings – Whether bank records are relevant to rental income mortgage repayment plea; Whether correspondence documents exist – Discovery order revised; fishing expedition claims rejected; costs in cause
Legal issues: Relevance of bank records for rental income · Existence of correspondence documents · Production of already produced documents
Outcome: Discovery order made with Schedule revised; certain documents disallowed.
Cites 1 case
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FCMC 8214/2011 [2020] HKFC 236 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 8214 OF 2011 ----------------------------
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----------------------- J U D G M E N T ----------------------- 1.By way of the summons taken out on 30 April 2019 (“Summons”), the petitioner (“W”) applies to compel the respondent (“H”) to file an affirmation stating whether he has at any time in his possession certain documents as specified in the Schedule as follows:
Background 2.W issued a petition for divorce based on 2-year separation on 21 June 2011 and decree absolute was granted on 31 July 2012. 3.After filing and service of the parties’ Form Es, questionnaires and answers, W issued a summons to join in several parties (ie the 5 interveners herein) and to set aside certain dispositions made by H in their favour. Thereafter, H took out a summons asking for an order for determining the beneficial ownerships of 7 specified items of landed properties as particularized therein (“the 7 Properties[2]”) by way preliminary issue on 5 January 2017. An order to such effect was made by DDJ AN Tse Ching (as she then was) on 3 November 2017 and 5 interveners were ordered to be joined. As directed by the court, H filed and served his point of claims, W filed her defence and counterclaim and H filed his reply and defence to counterclaim. However, no point of defence has ever been filed by the 5 interveners as ordered. 4.As pleaded in H’s point of claims, pursuant to the consent order in the Canadian divorce proceedings dated 6 February 2003 between H and his ex-wife Agnes Miu Ying Tsang (“Madam Mar”), a family trust had to set up for investment for the benefit of the 4 children of H and Madam Mar, who are the 2nd to 5th Interveners (“the 4 Children”). On 2 March 2004, they entered into a written trust agreement wherein Madam Mar was the settlor and H was appointed as trustee. In short, H pleads that he holds the 7 Properties on express, implied and/or constructive trust for the benefit of the 4 Children. 5.H filed his list of documents producing, inter alia, some cheques, tenancy agreements etc in relation to the 7 Properties. 6.Although H has not filed any affirmation to oppose this application nor stating that he is or is not in his possession the documents sought by W. Mr But for H has made submission to object this application. The Law 7.Mr Yim for W accepts that this discovery application is taken out in the context of the preliminary issue proceedings rather than under the ancillary relief proceedings, and submits that the relevant legal principles are governed by Order 24 rules 3, 7 and 8 of RHC. In my view, it is necessary for the court to look at the pleadings filed by the parties under the preliminary issue proceedings in order to identify the real issues in dispute and to determine this application. 8.The relevant parts of commentary concerning discovery can be found in para 24/7/1 to 24/7/6 and para 24/8/1 to 24/8/2 in the Hong Kong Civil Procedure 2021, which is not necessary to be reproduced here. 9.In gist, the main legal principles governing the present application are briefly summarised as follows:-
Discussion 10.In para (1) of the Schedule to the Summons, W asks for “the bank books, bank statements and/or relevant material relating to” various bank accounts as set out in the sub-para (a) to (f). In my view, the wordings of “and/or relevant material” are too general and the scope of this class of documents is too wide. W simply fails to establish as to how she or her lawyer believes that the so-called relevant material exists and indeed what they are. As said, order for specific discovery must identify with precision the documents required to the disclosed. I consider that the wordings of “and/or relevant material” amounts to “fishing” and should be disallowed. I now turn to discuss each paragraph of the Schedule below. Para (1)(a) of the Schedule and Chu Kee Building[3] 11.H pleads in his point of claims that the mortgage repayments in respect of Chu Kee Building were partly paid by the rental income derived from leasing out of this property, which was registered in H’s name. H must bear the burden of proof of such allegation and this is one of the real issues in dispute. 12.According to the tenancy agreement in respect of this property dated 3 November 2010 produced by H in his list of documents, the term of the tenancy is 2 years from 15 November 2010 to 14 November 2012 and the tenant shall pay monthly rent to the bank account of 012874XXX34335 with the Bank of China in the name of the landlord (ie H) pursuant to the said tenancy agreement. 13.I am satisfied that the entries in the said bank account showing the deposits of the rental paid by the tenant is relevant and necessary for disposing fairly of the matter since it is the pleaded case of H of using the rental income to pay the mortgage instalments of this property, which is disputed by W. 14.However, W asks for the bank record covering not only the terms of the tenancy but also the period “thereafter, if any” whilst` there is no evidence before me whether or not the tenant renewed the tenancy after 14 November 2012. In the circumstances, the wording in para (1)(a) of the Schedule to the Summons are unreasonably wide and I exercise my discretion to narrow its scope and revise as follows:
Para (1)(b) of the Schedule and Wah Hoi Mansion 15.H pleads in his point of claims that he paid the initial deposit of Wah Hoi Mansion, which was registered in joint name H and W. 16.In his list of documents, H produces 3 copy cheques issued by him from his bank account of 014XXX00080391 with the Bank of China (Hong Kong) Limited for purchase of this property and payment of estate agent fees. 17.I am satisfied that as some Chinese characters “華凱大廈落大訂” and “華凱大廈落首期” were hand-written on the cheques nos. 630253 and 630254, the entries in the said bank account showing the withdrawals of these 2 cheques are relevant and necessary for disposing fairly of the matter. 18.However, for the cheque no 630258 for payment of estate agent fee, I disagree that it is relevant to any real issues in dispute, discovery of which shall be disallowed. 19.For para (1)(b) of the Schedule, I exercise my discretion to revise as follows:
Para (1)(c) of the Schedule and Rialto Mansion 20.This property was originally registered in H’s name in 1997 but H pleads that he subsequently transferred the interest to 2 of the 4 Children (ie 2nd and 4th Interveners) and himself in 2012. H only pleads that he repaid the mortgage loan from his own resources to the exclusion of W but never said that the mortgage repayments were paid by the rental income derived from leasing out of this property. Accordingly, even if the tenant of this property did pay rent into H’s bank account of 012678XXX31240 as obliged by the term in the relevant tenancy agreement, I consider that it is irrelevant. I would disallow para (1)(c) of the Schedule. Para (1)(d) of the Schedule and Workshop 21.This property was registered in H’s name and H pleads in his point of claims that the mortgage repayments were partly paid by the rental income derived from leasing out of this property. 22.According to the 2 different tenancy agreements produced by H in his list of documents, it seems that the Workshop was divided into 2 units (ie Unit AB and Unit AA) which were rented out to 2 different tenants. For the agreement in respect of Unit AB, H’s bank account of 012874XXX34335 with the Bank of China was written therein. Although there is no express contractual obligation on the part of the tenant to pay rent into this specific account as stipulated, I still consider that it is implied or very likely for the tenant to do so. I would order the discovery of “the bank account of 012874XXX34335 with the Bank of China (Hong Kong) Limited in the name of H showing the deposits of the rental paid by the tenant from 1 July 2011 to 31 June 2013 in respect of Unit AB of the Workshop as defined in H’s point of claims” 23.For Unit AA, as there is simply no mention of any bank account of H in the relevant tenancy agreement, I disagree that there is any business practice or whatsoever for this particular tenant to pay rent into any of the H’s designated account and hence, the discovery for this part shall be disallowed. Para (1)(e) of the Schedule and Unit 407 24.This property was originally registered in H’s name in 2006 and subsequently transferred to the 1st Intervener in 2011. H pleads in his point of claims that the mortgage repayments were partly paid by the rental income derived from leasing out of this property. 25.According to the tenancy agreement produced by H in his list of documents, the tenant of Unit 407 issued 24 post-dated cheques in advance to H. I am satisfied that the production of the said cheques by H is relevant and necessary for disposing fairly of the matter. However, W asks for the bank books and statements of the account being used for accepting such rental. Although there is no evidence as to which bank account is used by H, I accept that H should have deposited these cheques into one of his bank accounts. I therefore order discovery of “the bank account in the name of H showing the deposits of the 24 post-dated cheques from 22 October 2011 to 21 October 2013 in respect of Unit 407 as defined in H’s point of claims”. Para (1)(f) of the Schedule and Unit 217 26.This property was registered in H’s name. Similarly, H pleads in his point of claims that the mortgage repayments were partly paid by the rental income derived from leasing out of this property. 27.According to the tenancy agreement produced by H in his list of documents, the tenant of Unit 217 issued 11 post-dated cheques in advance to H. I am satisfied that the production of the said cheques by H is necessary for disposing fairly of the matter. Similar to Unit 407, W asks for the bank books and statements of the account being used for depositing such rental. Although there is no evidence which bank account is indeed used, I order discovery of the bank account similar to the above. Paras (2), (3) and (4) of the Schedule 28.For paras (2) and (3) of the Schedule, W asks for discovery of all correspondence and other documents between H and Agnes Miu Ying Tsang (ie Madam Ma) relating to the 7 Properties and between H and the 2nd Intervener relating to Unit 407. There is no plea in H’s point of claims nor any document produced by H concerning these classes of documents. I am not satisfied there is any established practice between the said parties who are or were family members to communicate with each other by way of written correspondence or documents in the past. W simply fails to prove that the documents sought are in existence. I consider that W is to launch a fishing expedition with a view to hooking something. I refuse to order discovery of this part. 29.Lastly, Mr But for H confirmed that the Declaration sought in para (4) of the Schedule has been produced as exhibit in H’s 2nd affirmation dated 14 July 2015. I therefore refuse to order discovery of this document. Conclusion 30.In the circumstances, I make an order in terms of the Summons with the Schedule revised as follows:
31.For the avoidance of doubt, I disallow the discovery of the documents as per paras (2) to (4) of the Schedule. 32.Regarding the question of costs of this application, I consider that W only partly succeeds in this application and that a fair costs order shall be costs in the cause of the preliminary issue proceedings. I make a costs order nisi which shall be absolute unless any of the parties apply to vary within 14 days by summons.
Petitioner: Represented by Mr Eugene Yim instructed by M/S LCP Respondent: Represented by Mr S W But instructed by M/S Fairbairn Catley Low & Kong [1] Mr Yim for W clarified at the hearing that it should be Unit 407 instead of Unit 217 as defined in para 8 of H’s point of claims filed 15 January 2018 as Unit 407, Unit 217 etc. [2] See para 8 of H’s point of claims filed 15 January 2018, in which 7 properties are respectively defined. [3] One of the 7 Properties as defined in para 8 of H’s point of claims filed 15 January 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under FCMC 8214/2011