Kwan Wan Biu v. Hoi Tong Construction Company Ltd & Others
Read the full judgment text of HCA 4881/2000 on BabelCite. This High Court CFI judgment was delivered on 8 November 2001.
1. This is an appeal against the decision of the master dismissing the Plaintiff's application for specific discovery against the 1st Defendant.
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HCA004881/2000 HCA 4881/2000 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 4881 OF 2000 ____________
____________ Coram: Hon Jackson J in Chambers Date of Hearing: 8 November 2001 Date of Judgment: 8 November 2001 Date of Handing Down Reasons: 13 November 2001 _______________ J U D G M E N T _______________ 1.This is an appeal against the decision of the master dismissing the Plaintiff's application for specific discovery against the 1st Defendant. Background 2.The Plaintiff was the beneficial owner of all the shares in the 1st Defendant. He entered into an agreement in November 1995 to sell those shares to U Shing Engineering Company. The transfer of the shares took place in October 1996. In the meantime, U Shing Engineering Company took over the management of the 1st Defendant although the Plaintiff remained on record as a director until October 1996. The audited reports and financial statements of the 1st Defendant for the year ended 31st March 1996 stated that dividends in the sum of HK$3,930,000.00 had been declared for that period. The Plaintiff (as the registered owner of all of the shares in the 1st Defendant in that financial year) claims that he has never received such dividends. He now claims those dividends together with the sum of HK$170,768.50 which was also stated in the audited reports and statements of the 1st Defendant as being a debt owing to the directors. The documents 3.The Plaintiff seeks specific discovery of the following documents:
The principles 4.The principles relating to an application for specific discovery under Order 24 Rule 7 are as follows (see Lee Nui Foon v. Ocean Park Corporation (No. 1) [1995] 2 HKC 390):- 5.The burden is upon the party seeking the order to make out a prima facie case (which may be based upon a probability arising from the surrounding circumstances or, in part, upon specific facts deposed to) that:-
6.In addition to those principles it is well settled that discovery is not to be ordered to justify demands which, on the face of it, are not clearly related to the issues and which are required for speculative investigation. Putting it another way - and in colloquial English - discovery applications which amount to no more than 'fishing expeditions' will not be entertained. Conclusion 7.In hearing this appeal I had the advantage of argument from counsel instructed for both the Plaintiff and the 1st Defendant. 8.It became apparent during their submissions that there is now no issue concerning the declaration of the dividends and, that being so, Mr Cheng for the 1st Defendant was invited to undertake to amend the defence to put that matter beyond doubt and, in so doing, render superfluous the application for discovery of the documents (i) and (ii) referred to paragraph 3 above. Upon instructions Mr Cheng declined that invitation with the consequence that that issue of the declaration is still at large. Mr Cheng also made it clear that the 1st Defendant intends to concede nothing but, in effect, to put the Plaintiff to strict proof. The 1st Defendant is, of course, quite entitled to adopt that approach but cannot subsequently be heard to complain if, as a result, it is visited in costs. 9.As to the documents listed under item (iii) in paragraph 3 above Mr Cheng sought to argue that the Plaintiff had signed a document called a "Confirmation for Audit Purpose" in 1996 and, in so doing, he had accepted an explanation (expressed in figures) as to the disposal of the dividends and the monies due to directors - which explanation will (or may) be apparent from the documents in item (iii). 10.In response to that argument Mr Chung, counsel for the Plaintiff, says that that is yet another point in issue; that the Plaintiff denies that the so called 'explanation' now attached to the Confirmation for Audit Purpose was so attached when the Plaintiff signed it; that the Plaintiff does not in any event accept that explanation and that is precisely why he wants access to the documents sought. 11.I am quite satisfied that, at least prima facie, all of the documents of which the Plaintiff seeks discovery are in existence; that they are or were in the possession, custody or power of the 1st Defendant; that they relate to matters in question in the action and that their discovery is necessary both for disposing fairly of the cause or matter and for saving costs. 12.It was for all of these reasons that on the 8th November I set aside the order of the master made on 13th September 2001 and I ordered specific discovery in the terms as sought in the Plaintiff's summons dated 28th May. 13.As to costs I made an order that the 1st Defendant pay to the Plaintiff the costs of, and occasioned by, its application before the master and the costs of, and occasioned by, this appeal.
Representation: Mr Peter Chung, instructed by Messrs Holman Fenwick and Willan, for the Plaintiff Mr Christopher Cheng, instructed by Messrs Herman W K Kui & Co., for the 1st Defendant |