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

DCCJ 3011/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3011 OF 2005

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BETWEEN

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Coram :  Deputy District Judge E. Yip in Chambers

Date of Hearing :    20^th October 2006

Date of Handing Down Decision :  27^th October 2006

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DECISION

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The background

1.The plaintiff was an insurance agent cum manager working for the defendant.  She left the defendant to work for another insurance company as agent cum manager.  Seven agents previously working under her also left the defendant to work under her in the new insurance company at the same time. 

2.Before leaving the defendant, she had resigned by given one month’s prior notice to the defendant.  Before the expiry of the notice period, the defendant dismissed her on the ground that she was in breach of her agent’s and manager’s agreements with the defendant by soliciting, enticing, inducing and/or encouraging some of seven agents working under her to leave the defendant to work under her in the new insurance company.  The defendant relied on such breach of those agreements to deny her certain commission, bonus, allowances, remuneration.  She claimed against the defendant such items and alternatively damages. 

3.Before the master, the defendant took out a summons for specific discovery of 2 classes of documents:

1. Documents in relation to the plaintiff’s terms of appointment as agent of 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

2. 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.

4.The master dismissed the defendant’s summons with costs to the plaintiff.  The defendant appealed to me but only in respect of the second class of documents.  In the course of the hearing before me, the defendant applies for leave to amend, so as to narrow down the scope of, the second class of documents.  The plaintiff raises no objection.  I grant the plaintiff leave to do so. 

5.The amended class of documents is as follows:

Documents in relation to the structure of the plaintiff’s team of agents at AIA (in the period between 11 April 2003 and 31 July 2003, both dates inclusive) which identify any of the agents referred to in paragraph 10(ii) to (viii) of the Amended Defence as either directly or indirectly under the plaintiff’s supervision.

The law

6.The party seeking the order has to make out a prima facie case as follows:

(1)   There is in existence a specific document or class of documents;

(2)   The plaintiff has or had the document in her possession, custody or power;

(3)   The document or class of documents relates to a matter in question;

(4)   Discovery is necessary either for disposing fairly of the cause or matter of for saving costs.

[see Lee Nui Foon v Ocean Park Corp (No 1) [1995] 2 HKC 390, at 391 – 392, per Cheung J (as he then was )] 

(1)   That there is in existence a specific document or class of documents; and (2) that the plaintiff has or had the document in her possession, custody or power

7.Yi Man-wai in her first affirmation of [para 11 at p. 64] stated, inter alia, as follows:

(i) According to the information derived from the Hong Kong Federation of Insurers’ website, the plaintiff has been registered as an insurance agent of AIA since 28 May 2003;

(ii) According to the information derived from the Hong Kong Federation of Insurers’ website, the seven agents in question have been registered as insurance agents of AIA since 28 or 30 May 2003, i.e., from the same date as the plaintiff or 2 days thereafter;

…..

(iv)      An international company such as AIA will maintain organizational charts of sales teams and list the identities of team members.  Such records will be necessary for the purpose of calculating the payment of bonus, commission and/or remuneration (or both).  I believe that such records or versions thereof, would have been provided to the plaintiff for the purpose of managing her team(s) of agents in AIA.

8.Throughout, the plaintiff never expressly or impliedly denied the existence of such a class of documents or that she has not or had not the documents in her possession, custody or power. 

(3)  That the document or class of documents relates to a matter in question; and (4) that discovery is necessary either for disposing fairly of the cause or matter of for saving costs

9.In The Compagnie Financiere et Commerciale du Pacific v The Peruvian Guano Co (1882) 11 QBD 55 (CA), at 63 Brett L.J. explained how a document related to the matters in question in the action as follows:

It seems to me that every document relates to the matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may – not which must –either directly or indirectly enable the party ….. to advance his own case or to damage the case of his adversary.  I have put in the words ‘either directly or indirectly,’ because, as it seems to me, a document can properly be said to contain information which may enable the party requiring [it] to advance his own case or to damage the case of his adversary, if it is a document which may fairly lead him to a train of inquiry, which may have either of these two consequences. 

10.On the status of the applying party’s pleaded case in a discovery application, in Format Communications v ITT Ltd. [1983] FSR 473, 477 Slade L.J. agreed with the submission that:

for the purpose of testing the materiality of discovery ….. it is the case of the party seeking the discovery ….. that must be assumed to be true and not that of the party against whom discovery is sought …..

11.In our present case, the defendant pleaded [in Amended Defence para 10, p. 23] as follows:

[I]t is averred that the plaintiff breached her [Agency Agreement and her Manager’s Agreement] with the defendant by soliciting, enticing, inducing and/or encouraging some of the defendant’s agents, who had been directly under the supervision of the plaintiff, to resign from their position with the defendant with the sole purpose of joining the plaintiff at her new place of employment.

Thereafter came the dates and circumstances of the seven agents thereby induced. 

12.Counsel for the respondent in this appeal argues that there could not be a case of inducement because there was no evidence that any of those seven agents were so induced by the plaintiff.  He relies on the case of Deacons v White & Case Ltd [2003] 3 HKLRD 670.  In that case, the issue for the trial judge was whether the defendants had committed the tort of inducing their team-members in the same solicitors’ firm, to leave in concert or the team-members left of their own accord.  Deputy Judge Gill, on the facts before him, found that there was no inducement.  

13.I do not see how the rationale behind that case is applicable to our present case.  As Slade L.J. in Format Communications v ITT Ltd.  (supra) had said, the pleaded defence case was one of inducement.  We must assume, for the purpose of this discovery application, it to be the true.  This is no room for this Court at this juncture to make a ruling, as was incumbent upon the trial judge in Deacons v White & Case Ltd (supra), that inducement was a plea rejected by the Court. 

14.It is obvious that the class of documents sought by the defendant here would assist its case or damage the plaintiff’s case on the issue of inducement, an alleged act in breach of the agreements. 

The conclusion

15.I give judgment to the defendant on this appeal in terms of the amended class of documents sought in paragraph 2 under the schedule of the summons.  I set aside the master’s order.  The parties have informed me in advance that in any event, some editing has to be done to block out data unrelated to our present case.  They have requested for an order for liberty to apply before me in case that they should disagree on the extent of the editing.  I do make this order now. 

16.I make an order nisi for the defendant to have costs of this appeal, with certificate for counsel, but no order as to costs in the hearing before the master.  This costs order shall become absolute after 14 days from today.   

The Plaintiff: represented by Mr. Herbert Au-yeung instructed by Messrs. Tony Kan & Co., Solicitors.

The Defendant: represented by Mr. Stewart Wong instructed by Messrs. Herbert Smith, Solicitors.