Shum Ngo Sheung Winnie v. Axa China Region Insurance Co Ltd

DCCJ 3011/2005

IN THE DISTICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3011 OF 2005

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BETWEEN

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Before: Master Tracy Chan in Chambers

Date of Hearing:  28 June 2006

Date of handing down Reasons for Decision:  30 June 2006

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REASONS  FOR  DECISION

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1.This is the Defendant’s application made under Order 24 r.7 of the Rules of the District Court for specific discovery of 2 groups of documents against the Plaintiff in relation to :

i. Documents in relation to the Plaintiff’s terms of appointment as agent of American International Company Limited (“AIA”) including but not limited to the agency contract, any letter of offer of agency, any letter of acceptance of agency, notes of conversations between the Plaintiff and any member of AIA in relation to the terms of the Plaintiff’s appointment as agent; and

ii. Documents in relation to the structures of the Plaintiff’s team of agents at AIA which identify the agents directly or indirectly under the Plaintiff’s supervision.

Claim

2.The Plaintiff claims against the Defendant for remuneration, bonus, allowances and commission due and owing to her upon the termination of her agency agreement (“the Agency Agreement”) with the Defendant.

Defence

3.In the Defence the Defendant denies that the Plaintiff was entitled to any part of her claim or at all as she was in breach of the Agency Agreement.  Allegedly, the Plaintiff was in breach of, inter alia, clause 4.1 of the Agency Agreement, namely inducing 7 other agents to leave their service with the Defendant.

Issues

4.The main issue to be tried would be whether the Plaintiff was in breach of clause 4 of the Agency Agreement.

Present Application

5.Parties do not dispute that the tests to be applied in this application should be (i) whether the documents do exist; (ii) whether they relates to a matter in question in the action; (iii) whether they are in the possession of the plaintiffs and (iv) whether discovery is necessary either for disposing fairly of the cause or mater or for saving costs (Lee Niu Foon v. Ocean Park Corp. No 1 [1995] 2 HKC 390).

First Class of Documents: Documents in relation to terms of appointment between Plaintiff and AIA

6.Mr. Chang for the Defendant submitted that from the circumstantial evidence, they believe that the documents listed in paragraph 1(i) exist because according to the code of conduct in the trade of insurance, the contract between an insurance company and an agent must be in writing and no doubt, they must be in the possession of the plaintiff.  The purpose of seeking discovery on such documents is to see whether a condition that the Plaintiff would bring along her team of agents recruited whist working for the Defendant had been put down in writing as one of the terms of appointment amongst others.  It is the Defendant’s contention that such documents would tend to go a long way in establishing the Defence case that the Plaintiff had something to do with the other 7 agents’ leaving the Defendant; ie, the substance of violating clause 4 of the Agency Agreement.

7.Mr. Au Yeung for the Plaintiff argued that the Defendant had failed to make out a prima facie case on the existence of such documents and the request was too wide in the sense that the documents asked for were not specifically described.  In reply, Mr. Chang said that the Defendant had no idea whether such a condition exist or in which type of documents it was spelled out, in an agency contract or any collateral contract or other records.

8.Mr. Au Yeung further criticized the Defendant for not making out their case on relevance by way of affirmation.  He said that this application was a sheer fishing expedition taken by the Defendant.  He further pointed out that in paragraph 4.1 of the Affirmation of Miss Yi, it was said that the document was relevant in proving that the Plaintiff’s joining AIA without prior approval of the Defendant was in breach of clause 11.2(f) of the Agency Agreement; but nowhere in her Affirmation, the alleged breach of clause 4 of the Agency Agreement by the Plaintiff was mentioned. 

Ruling on First Class of Documents

9.I am not satisfied that the Defendant has made out a prima facie case on the existence of such a condition.  It was only sheer speculation on the part of the Defendant that such condition might exist and if it did exist, presumably, it should have been contained in some documents setting out the terms of appointment, such as the agency contract or collateral contract or notes of conversation.  Further, I agree with Mr. Au Yeung’s argument that the scope of the documents asked for was too wide.  It appears to me that what Mr. Chang has asked for is a document or any documents, no matter how you name it, as far as it contains any terms of appointment, in part or in full, which may or may not contain a condition that might suit their defence is to be disclosed to assist the Defendant to make out their Defence.  This is not the purpose of discovery.  The application for documents under paragraph 1(i) herein is therefore refused.

Second Class of Documents: Documents showing the Team Structure in which Plaintiff is one member

10.The second class of documents the Defendant asked for were documents in relation to the structure of the Plaintiff’s team of agents at AIA which identify the agents either directly or indirectly under the Plaintiff’s supervision.  Mr. Chang for the Defendant contended that there had to be some documents of this kind as they normal served as the basis for calculation of commission, bonus and remunerations.  On the question of relevance, Mr. Chang said that if those 7 agents were put under the supervision of the Plaintiff, the inference in favour of the Defendant’s case would be much enhanced.  He further submitted that this class of document is to be disclosed because they may fairly lead to a train of inquiry which may have either of these consequences.

11.I am not satisfied that the Defendant had made out a prima facie case on relevance of the documents.  The issue is whether the Plaintiff had induced the other 7 to leave the Defendant.  Whether they have been directly or indirectly under the supervision of the Plaintiff in AIA is not relevant to the issue.  The 7 agents might have been so deployed within the organization because of a reason other than that they were induced to leave the service of the Defendant. 

12.As to the argument on such documents may lead to a train of inquiry and therefore, they are relevant, I am of the view that the applicant must satisfy the court that there is a basis for the belief that if by discovery of such information, a train of inquiry leading to some meaningful consequences would follow.  In the present application, I am not satisfied that this is the case.  It was a sheer fishing exercise.  Further, I am of the view that the documents under the request had not been specifically described. The application for documents under class 2 is refused.

13.For the reasons aforesaid, the Summons taken out by the Defendant is dismissed.  I make an order nisi that the Defendant do pay costs of this application to the Plaintiff and such costs are to be taxed if not agreed.

Mr Herbert Au-yeung, instructed by Messrs Tong Kan & Co., for the Plaintiff

Mr Jonathan Chang, instructed by Messrs Herbert Smith, for the Defendant