Gladius Ltd and Another v. Tanner De Witt (A Firm)

HCMP 2193/2024

[2025] HKCFI 5974

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2193 OF 2024

________________________

________________________

BETWEEN

________________________

________________________

D E C I S I O N

________________________

Introduction and Background

1.By an Originating Summons filed on 31 October 2024 (“OS”), the Plaintiffs (“Ps”)  seek an order for the Defendant (“D”)  to produce a copy of all deeds, documents and papers in its possession, custody and power in relation to its services provided under and/or during the course of the retainers executed with Ps dated 21 June 2012 (“the Retainers”)  in relation to the action in HCA 971/2012 (“HCA 971”).

2.D, a firm of solicitors, acted for various defendants in HCA 971 (which included Ps between June 2012 and December 2018). Ultimately, in a Judgment handed down in HCA 971 on 28 September 2020 (“the Judgment”), it was held by Ng J inter alia that the defendants therein were nominees of and/or beneficially owned and controlled by David Ho, a discharged bankrupt.  However, shortly after the Judgment, it was discovered that all the defendants (including Ps)  were struck off or dissolved.  Ps were subsequently restored by the Trustees of David Ho (“the Trustees”)  in 2023 and the Trustees applied for the respective shares of Ps to be registered in the Trustees’ name and for their respective share register to be rectified accordingly which was so ordered by the court in 2024.

3.Prior to and subsequent to the issuance of the OS, following a formal demand letter for production of documents on 10 May 2024 by Ps’ solicitors, D had produced various documents to Ps.  The last round of documents produced was on 11 November 2025. 

4.At the call-over hearing of the OS on 13 May 2025, Cheng J ordered Ps to file and serve an affirmation identifying the remaining documents said to be outstanding.  In the 3^rd Affirmation of Chen Yung Ngai Kenneth filed on 30 July 2025, a table titled “Table A” of the file documents that D says Ps are not entitled is produced.  Ps’ Solicitors further revised Table A by letter dated 27 October 2025 (“Revised Table A”). These are documents set out in the narratives in the following bills issue by D to Ps:

(1)  Bill No. B011381;

(2)  Bill No. B011701;

(3)  Bill No. B012971;

(4)  Bill No. B013244;

(5)  Bill No. B013622;

(6)  Bill No. B019121;

(7)  Bill No. B021018; and

(8)  Bill No. B029501.

5.At today’s hearing, parties confirmed that the dispute as to Ps’ entitlement to various documents only relate to Items 1-7, 8-14, 15, 16 and 18 (“Remaining Items”).  D has provided the other items to Ps since the Revised Table A was prepared.

6.It was also confirmed that D’s grounds of objections to production of the Remaining Items can be classified into 3 categories:

(1)  Certain entries in the bills issued to Ps were wrong and they relate to another matter or case, namely, HCA 806/2006 (“HCA 806”)  which is unrelated to Ps;

(2)  Certain entries relate to internal communications within the firm which do not belong to Ps notwithstanding they were billed for preparation for such documents; and

(3)  The fee notes of Mr Jose Maurellet SC and Mr Charles Manzoni SC were paid out of D’s own pocket and Ps are not entitled to the payment records for settlement/receipts issued and related instructions and correspondence thereto.

Applicable Legal Principles

7.Section 65(1)  of the Legal Practitioners Ordinance, Cap. 159 provides:

“The jurisdiction of the Court to make orders for the delivery by a solicitor of a bill of costs and for the delivery up of, or otherwise in relation to, any deeds, documents or papers in his possession, custody or power is hereby declared to extend to cases in which no business has been done by him in the Court.”

8.In Ganatra, Annemarie Claire v Freda, Giovanni [2021] HKCFI 3611 at §62 Marlene Ng J held:

“There is (a)  inherent jurisdiction of the court over its officers to order a solicitor (upon summary application by his client by way of summons)  to deliver up to his client in proper condition all documents in the solicitor’s custody or power belonging solely to the applicant, eg for the purpose of drawing up an order and (b)  statutory jurisdiction under section 65(1)  of the Legal Practitioners Ordinance Cap 159 and Order 106 rule 5 of the RHC for the court to order a solicitor to delivery up documents in his possession, custody or power. …”

9.In the English case of Hanley v JC&A Solicitors [2018] 4 Costs L R 693, it was held that the neither the inherent jurisdiction of the court and the corresponding equivalent to s.65 of LPO confer discretion on the court to order delivery up of documents belonging to solicitors.

10.As for the ownership of documents upon the conclusion of the retainers, in Ho On Mansion (IO)  v Herman HM Hui & Co [2020] 3 HKLRD 18 at §21, Recorder Yvonne Cheng SC (as then she was)  referred to the decision of the New South Wales Court of Appeal, Wentworth v De Montfort (1988)  15 NSWLR 348, which reviewed a number of English authorities and the observations made therein:

“21.1 Although solicitors may in particular circumstances receive or create a document as an agent for their client, this is commonly not the case. The distinction between principal and agent and professional person and client is well established (citing Leicestershire County Council v Michael Faraday and Partners Ltd [1941] 2 KB 205 and Chantrey Martin (A Firm)  v Martin [1953] 2 QB 286). If a solicitor is acting only as agent for a client who is his principal in the doing of some act, the ordinary rules of agency apply to him, and documents brought into existence or received by him when so acting belong to the client. In the case of a professional person and his client, different principles apply. (See pp.351G-353F.)

21.2 Documents held by a solicitor relating to a client, including financial records, do not necessarily belong to the client (p.353F).

21.3 The principles which are to be applied do not form a coherent whole (p.353F).

21.4 Some particular examples and statements which throw some light on the matter include (pp.353G-355F):

21.4.1 Ex parte Horsfall (1827)  7 B&C 528 , where Lord Tenterden held that drafts and copies of certain deeds in the custody of an attorney were the property of his client on the ground that he who pays for the draft by law has a right to the possession of them;

21.4.2 Chantrey Martin, in which Jenkins LJ distinguished Ex parte Horsfall and expressed his view that that certain types of documents made by a solicitor for his own information in the course of his business would be owned by him;

21.4.3 Re Thomson (1855)  20 Beav 545; 24 LJ Ch 599 in which Sir John Romilly MR held that a client is not entitled to copies of letters written by the client's solicitor which have been entered in his letter books. The client is entitled to copies of those copies, but must pay for them. It was also held that letters written by the solicitor to third parties, relating exclusively to the client's business, are held by the solicitor as agent for the client and the client is entitled to them, the solicitor being entitled to make and keep copies;

21.4.4 Howard v Gunn (1863)  32 Beav 462, in which Sir John Romilly MR held that a letter written by a solicitor for a client to a third party belonged to the client;

21.4.5 Gibbon v Pease [1905] 1 KB 810, where the English Court of Appeal held that a building owner was entitled to require his architect to hand over plans which had been prepared by the architect in the course of performing his contractual obligations to carry out building alterations;

21.4.6 Re Ellis & Ellis [1908] WN (Eng)  215, where a firm of solicitors was found on the facts to have acted as an agent for a client in managing his affairs and receiving and paying sums on his behalf, and was held liable to deliver up not only an account of monies received, but also vouchers for payments made.

21.4.7 Cordery on Solicitors (8^th ed., 1988), which suggested that documents coming into existence during the currency of the retainer and for the purposes of business transacted by the solicitor pursuant to the retainer fell into four broad categories:

(i)  Documents prepared by the solicitor for the benefit of the client and which may be said to have been paid for by the client, belong to the client.

(ii)  Documents prepared by the solicitor for his own benefit or protection the preparation of which is not regarded as an item chargeable against the client, belong to the solicitor.

(iii)  Documents sent by the client to the solicitor during the course of the retainer, the property in which was intended at the date of despatch to pass from the client to the solicitor, belong to the solicitor.

(iv)  Documents prepared by a third party during the course of the retainer and sent to the solicitor (other than at the solicitor's expense), belong to the client.

Incidentally, it should be noted that a subsequent version of this passage Cordery (to essentially the same effect)  is cited in the Law Society Guidance Note on Storage and Destruction of Old Files (dated 25 June 2012), itself cited in Principle 5.23 of The Hong Kong Solicitors' Guide to Professional Conduct (Third Edition).

21.5 A number of considerations could be discerned from these decisions and statements as being relevant in the determination of ownership. These included whether or not the client was charged for the creation of the document, and whether the solicitor created the document for his client's benefit and protection, or did so for his own benefit and protection (p.355F).

21.6 In many cases a solicitor would have mixed reasons for creating a document (pp.355G-356B).

Thus if on his client's instructions he writes a letter of demand to a third party, it would be his duty to keep a copy of the letter, for the client may have to prove the sending of the letter and its contents, and the copy kept by the solicitor may be essential for this purpose. On the other hand the solicitor would want a copy for his own protection in order, for example, to be able to prove to his client that he had sent the letter of demand, and also for the purposes of making up a bill of costs. In such a case, the clients would be entitled to a copy of the letter and the solicitor would be entitled to charge him for it. On the other hand the solicitor would be entitled to keep a copy for his own records and absent some special agreement would not be entitled to charge the client for making that copy. Again if on his client's instructions the solicitor pays money to a third party and obtains a receipt, the receipt is obviously of benefit for the client for it is evidence that the third party has been paid. It is also evidence for the solicitor that he has carried out his client's instructions and would be needed by him if any questions as to payments out of his trust account were raised. Again in this case I should have thought that the client was entitled to the original receipt, but that the solicitor was entitled to retain a copy.

21.7  Where a solicitor receives and holds money in trust for his clients, he has legal title to his records of his dealings with the client's money in the trust account, while he is trustee.  The client is entitled to inspect them, and to have information about them, but they are not the client's property.  Normally, when a trustee ceases to hold office, either on appointment of a new trustee or the determination of the trust, he would be required to hand over all trust property to the new trustee or the beneficiaries.  This would generally apply to a trustee who is a solicitor, but there are important qualifications in some cases. If he is solicitor as well as trustee, he is required by law to maintain and retain proper financial records.  He is entitled to retain those records, some of which may refer to other clients as well as the trust, but the beneficiary should be provided with copies if asked for. Other records which he makes as solicitor and not as trustee are subject to the same principles as would apply as if he were not a trustee (p.356C-G).”

11.In the most recent issue of The Professional Conduct of Lawyers in Hong Kong, Vol.2 at §§[2403-2480] documents coming into existence during the retainer were put into four broad categories and their ownership stated as follows:

(1)  Documents coming into existence in the course of business transacted under a retainer and either prepared for the benefit of the client or received by the solicitor as agent for the client belong to the client (examples: instructions and briefs; most attendance notes, drafts, copies made for the client’s benefit of letters received by the solicitor; copies of letters written by the solicitor to third parties if contained in the client’s case file and used for the purpose of the client’s business);

(2)  Documents prepared by the solicitor for his own benefit or protection, the preparation of which is not regarded as an item chargeable against the client, belong to the solicitor (examples: copies of letters written to the client; copies made for the solicitor’s own benefit of letters received by the solicitor; copies of letters written by the solicitor to third parties if contained only in a filing system of all letters written in the solicitor’s office; tape recordings of conversations; inter-office memoranda; entries in diaries; time sheets; computerized records; office journals; books of account);

(3)  Documents sent to the solicitor by the client during the retainer, the property in which was intended at the date of dispatch to pass from the client to the solicitor belong to the solicitor (examples: letters, authorities and instructions written or given to the solicitor by the client);

(4)  Documents prepared by the third party during the course of the retainer and sent to the solicitor (other than at the solicitor’s expense)  belong to the client (examples: receipts and vouchers for disbursement made by the solicitor on behalf of the client; medical and witness reports; counsel’s advice and opinion; letters received by the solicitor from third parties).

Discussion and Disposition

12.In respect of the first category of objection, which relates to Items 1-7 of Revised Table A, although it is asserted by D that they related to HCA 806, this is a bare assertion as submitted by Mr Wong, counsel, appearing for Ps.  On the face of Bill B011381 and Bill B011701 (where Items 1-7 appear), they plainly stated that they relate to HCA 971 and, save for Item 4 which is expressly stated as “Not charged”, Ps were charged for those items therein suggesting that those work done for Ps’ benefit in HCA 971 for which Ps are charged.

13.Despite the submissions of Mr Darton, appearing for D, that given Ms Veronica Chan (a partner of D)  had stated on oath these items relate to HCA 806, with respect, it remains an assertion unsupported by any further explanation and documentary evidence.  Items 1 to 6 are found in Invoice B011381, 4 out of 6 items were billed by Mr Darton himself who could have made an affirmation to say that these were not related to HCA 971.  The other 2 items were billed by “HA” and “PT” (Prudence Tai)  who also did not file any affirmation.  Whilst from the Bar Table, Mr Darton said Items 2 and 6 referred to “RB” or “RSRB” who were solicitors for other actions, and reading from other items for example, the item dated 10 July 2012 “various tasks With PT and HA re RSRB costs claim in HCA 806” relates to HCA 806, that was not a matter stated in the evidence filed on behalf of D. 

14.On the state of the evidence before me, I am of the view that Items 1-7 came into existence in the course of business under the Retainers and were prepared for Ps’ benefit and belonged to Ps.

15.Whilst it was submitted by Mr Darton that it can be implied from the decision in Cosimo Borrelli & Ors v Linklaters (a firm)  [2025] HKCFI 5293 that which client paid for or was charged for a particular piece of work by their solicitors is not necessarily determinative of who owns the document, I do not accept that submission can be derived from the case.  In that case, CNG objected to Linklaters producing to SIL various documents including invoices issued to SIL by Linklaters.  Linklaters represented both SIL and CNG in the same action.  Linklaters executed separate retainers and separately invoiced SIL and CNG.  However, SIL’s invoices were fully paid by CNG (see §§18 and 55(1)).  Harris J held at §56:

“It is not asserted that the invoices are CNG’s documents. It is not asserted that the invoices are subject to CNG’s LLP. CNG is objecting to Linklaters producing to SIL, copies of SIL’s documents. As the production of the documents will simply put SIL in the position it normally would be, there is nothing unfair about the request…”.

16.Besides in the present case, even accepting the fact that Ps were invoiced for the work done is not determinative, that is not the only matter I have regard to but prima facie the appearance of the items in the bill for HCA 971 demonstrates that it was work done for the benefit of Ps arising from the Retainers.

17.In respect of the second category of objection, which relates to Items 8 to 14, D appears to accept that internal documents belong to the firm if the preparation of those documents is not regarded as an item chargeable against the client.  However, it was submitted that just because an item in a bill includes reference to an internal email it does not necessarily mean that the time charged includes preparation of that email.  If that was the case I would have expected D to put that in evidence and not simply assert that that is the case.  On the face of the Bills, Ps were charged for the emails, short note and long memo. 

18.It was also submitted that given the length of time that has elapsed since this work was carried out and it would be impossible to determine what elements were or were not charged, the appropriate course would be for the charge to be written off and a credit note issued to set off against the sums due to D.  However, this argument seems rather disingenuous when no such offer has been made.  Besides, there is some basis for Mr Wong’s submissions that as a matter of principle that cannot be right as it would enable a firm of solicitor’s having already charged for work done to offer to refund or reverse the charges whenever it does not wish to produce to the clients the documents sought.

19.I take the view that Items 8-14 were documents prepared for the benefit of Ps which D considered were chargeable and therefore belongs to Ps.  They should be produced by D.

20.In respect of the third category of objection, which relates to Items 15, 16 and 18, it is said that the request for those items is made on Ps’ misunderstanding that counsel’s fee notes were paid out of a sum provided on behalf of Ps whereas in fact D born those costs. According to the D’s client ledger:

(1)  On 5 November 2013, D received the sum of HK$150,000 from the Defendants from HCA 971 and booked the sum as “Money on Account”;

(2)  On 12 November 2013, the sum of HK$115,000 for settlement of the outstanding counsel fee notes were transferred to HCA 806;

(3)  On 21 November 2013, the sum of HK$85,000 was transferred back from HCA 806 to settle the fee note of Mr Manzoni dated 30 December 2011; and

(4)  On 13 February 2014, the sum of HK$85,000 was used to settle Mr Manzoni’s fee note.

21.However, the email correspondence produced by D also supports that although the HK$150,000 was partially used to settle the counsel fee of HK$115,000 in HCA 806, subsequently this was objected to by Ms Cindy Liu and resulted in the giving back of credit for the amount of HK$150,000 for costs owed by the Defendants in HCA 971.  I am satisfied from the objective evidence before me that counsel’s fees related to HCA 806 and as such the fee notes and receipts did not come into existence in the course of business transacted under the Retainers and need not be produced by D to Ps.

Costs

22.As agreed by the parties, which I also considered fair, there should be no order as to costs of the OS and D will provide to Ps the ordered Items (within 28 days from the date hereof)  at no costs to Ps.

Mr Joseph Wong, instructed by Messrs Lee, Wong & Lam, for the 1^st and 2^nd Plaintiffs

The Defendant appeared in person and represented by Mr Robin Darton