Chow Sin Kim v. Cambo Enterprises Ltd

DCCJ4205/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4205/2006

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BETWEEN

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Coram: Deputy District Judge Frederick HF Chan (in Chambers open to public)

Date of hearing: 15^th October 2008

Date of handing down the reasons for decision: 17^th October 2008

REASONS FOR DECISION

The Plaintiff’s claim

1.This interlocutory decision deals with the procedural skirmishes of discovery in respect of a motor survey report. The protagonists are the Plaintiff and the 1^st Defendant. The essential background may be sketched as follows. Madam Chow Sin Kim (the Plaintiff) was the registered owner of a second-hand Toyota Supra JAZ80 saloon car  registration no. CV996 (“CV996”). The CV996 was insured with Royal and Sun Alliance Insurance (Hong Kong) Limited.

2.In the early afternoon of 27^th August 2000, the Plaintiff drove CV996 to visit the Kamboat Chinese Cuisine Restaurant which was located at 1/F., Yen Sheng Centre, No.61, Hoi Yuen Road, Kwun Tong, Kowloon and she entrusted the CV996 to a car-jockey (the 2^nd Defendant) who was employed by the Defendant for custody. The CV996 was damaged and rendered a constructive total loss.

3.It is the Plaintiff’s case that the 1^st Defendant (who was the employer) and the 2^nd Defendant should be held liable to her for loss and damage in respect of the constructive total loss of the CV996.

4.Subsequently, the Plaintiff’s previous solicitors (Messrs. Cheng Chan & Co.) (“C & C”) issued a demand letter on 25^th April 2001 to the Defendants’ solicitors (Messrs. Lo & Lo) (“Lo & Lo”) to seek compensation for the loss and damage suffered by the Plaintiff. The last paragraph contained C & C’s threats of legal proceedings against the Defendants.

5.On 2^nd May 2001, Lo & Lo issued a Calderbank letter which was marked “without prejudice save as to costs” to C & C and relied to the demand letter as follows:

“We refer to your letter dated 25^th April 2001 in respect of the above matter.

On an entirely without prejudice and non-admission of liability basis, we shall be grateful if you can kindly let us have a copy of your survey report in respect of vehicle registration no. CV996 for our client’s consideration”.

6.Two days later and on 4^th May 2001, C & C replied to Lo & Lo and said:

“We refer to your letter of 2^nd May 2001 and now enclose herewith copies of the survey report …”.

7.The threats of legal proceedings were repeated by C & C in that letter. The survey report which was sent by C & C to Lo & Lo was dated 28^th September 2000 which was prepared by Messrs. Adjusting Services (Motor) Limited, a firm of motor claims adjusters and surveyors (“the Old Survey Report”). It is worth noting that the penultimate paragraph of the Old Survey Report said that:

“Our recommended figures are all made on a ‘Without Prejudice’ basis to the question of liability and they are to the best of our belief and knowledge”.  

8.Undoubtedly, the Old Survey Report was provided by the Plaintiff to the 1^st Defendant on a without prejudice basis and with a view to allowing the 1^st Defendant to consider the claims made by the Plaintiff as per the demand letter. However, the parties failed to compromise.

9.On 25^th August 2006, the Plaintiff issued the Writ of Summons with a Statement of Claim against the 1^st and 2^nd Defendants. The Plaintiff is claiming about HK$719,000 from the Defendants and the pleaded causes of action included bailment, breach of contract and negligence.

10.On 29^th January 2007, the Plaintiff obtained a default judgment with costs and damages to be assessed in the present action against the 2^nd Defendant. Then, on 7^th February 2007, Messrs. Great East Asia Surveyors & Consultants Co. Ltd. prepared a new motor survey report for the Plaintiff (“the New Survey Report”) and later the Plaintiff had disclosed the New Survey Report to the 1^st Defendant in discovery.

11.Paragraph 13 of the Statement of Claim stated that:

“13.   By reason of the said breach of duty … of the Defendants … the Plaintiff has been put to expense …

J       Survey fee incurred by Royal and Sun Alliance Insurance (Hong Kong) Limited, the Insurance company… HK$750”.

12.The 1^st Defendant denied the Plaintiff’s claims in their entirety and both liability and quantum of damages are being challenged by the Defendant.

Disclosure by the 1^st Defendant

13.It is pertinent to note that the 1^st Defendant had unilaterally taken the following procedural steps to disclose the Old Survey Report:

(a)    On 12^th January 2007, the 1^st Defendant filed its List of Documents and included the Old Survey Report as Item 1 in Schedule 1 of Part I;

(b)   On 5^th February 2008, the 1^st Defendant filed a Bundle of Expert Reports and included the Old Survey Report as Item 1;

(c)    On 13^th September 2008, the 1^st Defendant filed a hearsay notice under sections 47 and 49 of the Evidence Ordinance and the Old Survey Report was included as Item 3:

“Take notice that the 1^st Defendant … desires to adduce in evidence at the trial of this action … the following documents”.

14.On 12^th August 2008, the Plaintiff’s present solicitors (Messrs. Alex Ho & Co.) (“Ho & Co.”) filed the Plaintiff’s Answer to the 1^st Defendant’s Request for Further and Better Particulars of the Plaintiff’s Statement of Claim which said (“the Answer”):

“Request:

7.   Under Paragraph 13J hereof, of the claim that:

“Survey fee incurred by  Royal and Sun Alliance Insurance  (Hong Kong)

Limited, the insurance company                                       HK$750.00”

…

State whether such fee was paid by the Plaintiff or by Royal and Sun Alliance Insurance (Hong Kong) Limited to procure a survey report to be prepared by a loss adjuster …

Answer:

… The fee was paid by Royal and Sun Alliance Insurance (Hong Kong) Limited to procure a survey report to be prepared by a loss adjuster. The Plaintiff avers that the said survey report was disclosed to the Defendants on without prejudice save as to costs basis and the 1^st Defendant should not rely on it as evidence in the trial”.

15.On 15^th August 2008, Lo & Lo issued a letter to Ho & Co. and asked for discovery of the Old Survey Report:

“… We shall be obliged if you will disclose to us the documents referred to in the … Answer… the survey report prepared by the loss adjuster.

Please note that this request for disclosure and inspection is made pursuant to Order 24, rule 10 of the Rules of the High Court … If your client shall fail to disclose the aforesaid documents for our inspection forthwith, an application will be made to the Court for specific discovery under Order 24 without further notice to you”.

16.The Plaintiff refused to budge and emphasized that the Old Survey Report was subjected to the protection of the without prejudice privilege. On 13^th September 2008, the 1^st Defendant issued an inter parte summons pursuant to Order 24 rule 7 of the Rules of the District Court (Cap. 336, Sub. Leg.) (“RDC”) and asked, inter alia, for specific discovery of the Old Survey Report (“the Discovery Application”). It is crucial to bear in mind what the 1^st Defendant was aiming to achieve by virtue of the Discovery Application:

“… the Plaintiff do within 7 days … make file and serve on the 1^st Defendant an … affirmation stating whether she has or any time had in her possession, custody or power the following documents, and if the said documents or any of them had been but are not now in his [sic.] possession, custody or power stating when she parted with the same and what became of the same …

(d)  Answer to Request 7 –

(i)   the survey report prepared by the loss adjuster”.

17.On 26^th September 2008, the Discovery Application was argued before District Court Master Clement Lee (“the Master”) and at the hearing before the Master, the Plaintiff explicitly abandoned the claim in relation to the fees for the preparation of the Old Survey Report[1]. The Master opined that the Old Survey Report was protected by the without prejudice privilege from discovery and he forthrightly dismissed the Discovery Application with costs.

18.Dissatisfied, the 1^st Defendant lodged an appeal on 6^th October 2008 against the Master’s dismissal of the Discovery Application. Both parties agreed that the present appeal against the Master’s dismissal of the Discovery Application should be conducted by the Court by way of a re-hearing. Indeed, the 1^st Defendant’s solicitors had taken the liberty of filing an affirmation of Mr. Alan W. K. Cheung (the handling solicitor of the 1^st Defendant) dated 11^th October 2008.

19.Pausing here, I note with displeasure that Mr. Alan Cheung had put forward legal submissions and arguments to seek to support the 1^st Defendant’s appeal against the Master’s dismissal of the Discovery Application. Mr. Alan Cheung went on to depose in paragraph 11 that:

“The status of [the Old Survey Report] was misconceived by the Master as the said report was referred to in the pleadings”.

20.With the benefits of hindsight, I believe that the said paragraph 11 of Mr. Alan Cheung’s affirmation should and could have been more felicitously and appropriately worded to include only factual matters. With respect, I take this opportunity to reiterate the rule that affirmations should not contain legal arguments and submissions. As succinctly commented by the learned editors of the Hong Kong Civil Procedure 2008, Volume 1, paragraph 41/6/1, at p. 685:

“… in Robert Lee Flickinger v. Director of Immigration [1998] 1 HKLR 81, Clough JA observed that an affidavit which contained “much objectionable hearsay and much exposition of the views of [deponents] solicitor on forensic matters was liable to be struck out under this rule as flagrantly in breach of O. 41, r. 5(1) …”. 

21.On 15^th October 2008, Mr. Alex Ho (the handling solicitor of the Plaintiff) filed an affirmation in reply and reiterated once again that the Old Survey Report was provided to the 1^st Defendant on an entirely without prejudice basis and should not be disclosed by production and inspection.

22.At the appeal hearing before me, Mr. Ho proffered the following undertaking to the Court on the Plaintiff’s behalf:

(a)    The Plaintiff shall, within 7 days, file and serve an Amended Statement of Claim whereby paragraph 13J will be deleted;

(b)   The Plaintiff shall pay the costs of and occasioned by the amendment to the Statement of Claim to the 1^st Defendant, such costs to be taxed if not agreed and be paid in any event.

23.The 1^st Defendant accepted the above undertaking. The appeal proceeded to argument and Ms. Vanessa Kwok (counsel for the 1^st Defendant) candidly conceded that the Old Survey Report was received by the 1^st Defendant from the Plaintiff when the parties were conducting on-going negotiations on a possible settlement.

24.She cited a total of 5 cases to support her arguments. However, I do not consider those cases relevant to the present appeal as none of them referred to the without prejudice privilege.

The keyissue

25.Both parties were in consensus that in resolving the present appeal, the  fundamental issue for the Court to determine is:

“Whether, in the circumstances of the present case, the Old Survey Report was subjected to the without prejudice privilege?”

26.I am of the view that the applicable legal principles were crystallized in the following relevant cases.

The English position

27.The 1^st case is Rabin v. Mendoza & Co. [1954] 1 WLR 271 (“the Rabin’s Case”), the plaintiff engaged the defendant surveyor’s firm to carry out a survey in respect of his house. He later complained to the defendant’s partner that he could not succeed in raising money by way of a mortgage from a bank. The plaintiff alleged that the survey was negligently done by the defendant’s firm. An interview was held between the plaintiff’s solicitors and the defendant’s partner where it was agreed (on a strictly without prejudice basis) that the defendant would engage an independent surveyor’s firm to prepare a survey report. Survey reports were duly obtained by the defendant but the parties failed to reach an amicable settlement on the dispute. The plaintiff resorted to legal proceedings and sued the defendant for professional negligence in conducting the survey for his house.

28.The defendant disclosed the surveyor reports in Part II of the schedule to their affidavit of documents and claimed that the reports were subjected to the without prejudice privilege[2]. The plaintiff disputed that claim and sought production of the survey reports. Master Burnand dismissed the plaintiff’s application for the production of the survey reports. The plaintiff’s appeal was dismissed by Croom-Johnson J.

29.The plaintiff took the case to the English Court of Appeal where he failed again. In a terse ex tempore judgment, Lord Justice Denning (as the Master of Rolls then was) said at pp. 273-274:

“… if documents come into being under an express, or, I would add, a tacit, agreement that they should not be used to the prejudice of either party, an order for production will not be made.

This case seems to me to fall within that principle. This report was clearly made as a result of a “without prejudice” interview and it was made solely for the purposes of the “without prejudice” negotiations. The solicitor for the plaintiff himself says in his affidavit that at the time of the interview it was contemplated that steps such as these should be undertaken. I find myself, therefore, in agreement with the decision of Master Burnand and the judge that this is not a case where production should be ordered”.

30.Lord Justice Romer concurred and said at p. 274:

“It seems to me perfectly plain in those circumstances that the only object of obtaining the report was to implement the understanding which was arrived at during the interview which was without prejudice; therefore, in my judgment, the protection extends to the report which was obtained in pursuance of that particular understanding.

The question then arises whether, notwithstanding that protection, it ought to be produced. I think that there is no question that it ought to be disclosed in the affidavit of documents, because it relates to a matter in question in the proceedings, and the defendants have rightly disclosed it; but they have disclosed it in Part II of the Schedule to their affidavit and they claim immunity from production and inspection … It seems to me that it would be monstrous to allow the plaintiff to make use – as he certainly would make use – for his own purposes as against the defendants of a document which is entitled to the protection of “without prejudice” status” (my emphasis).

31.It is tolerably clear from the report of the Rabin’s Case that the plaintiff was truly after was to have a look at the contents of those survey reports. In the present case, the 1^st Defendant already has a copy of the Old Survey Report. Indeed, the Old Survey Report was exhibited as “CWK-2” in Mr. Alan Cheung’s affirmation and he continued to say in paragraph 7 that:

“The said survey report is both necessary and relevant information which will enable the 1^st Defendant to properly quantify the Plaintiff’s claim as well as to assist the trial judge to assess the veracity of the Plaintiff’s claim”.

32.As indicated in the above chronology of events, the 1^st Defendant in fact had a copy of the Old Survey Report on 4^th May 2001 and to date, the 1^st Defendant had already had about 7 years to ponder on the contents of the Old Survey Report and “to properly quantify the Plaintiff’s claims”.

33.The Rabin’s Case was endorsed by the House of Lords in Rush & Tomkins Ltd. v. Greater London Council [1989] 1 AC 1280 (“the Rush & Tomkins’ Case”). The plaintiff entered into a building contract with the 1^st defendant for a housing development and the 2^nd defendant was the sub-contractor for the building works. The plaintiff began an action against both the 1^st and 2^nd defendants but later settled with the 1^st defendant. The 2^nd defendant applied for specific discovery against the plaintiff in respect of the settlement details which culminated in the compromise between the plaintiff and the 1^st defendant. The dispute on discovery ended up before the House of Lords. It is worthy to note that when the case was trawled through the English Court of Appeal and the House of Lords, the Rabin’s Case was neither cited nor argued by counsel. Lord Griffiths, in giving the unanimous speech of the House of Lords, rejected the discovery application on the ground that the negotiation documents between the plaintiff and the 1^st defendant were all subject to the without prejudice privilege. It was his Lordship who first mentioned the Rabin’s Case and adroitly observed:

“This authority shows that even as between the parties to “without prejudice” correspondence they are not entitled to discovery against one another (at p. 1304) …

I have come to the conclusion that the wiser course is to protect “without prejudice” communications between parties to litigation from production to other parties in the same litigation (at p. 1305)”.

34.The 3^rd relevant case is Sampson v. John Boddy Timber Limited (11^th May 1995, unreported, Lexis Transcript), English Court of Appeal (Sir Thomas Bingham MR, Evans and Aldous LJJ.). There, the plaintiff was injured in an industrial accident and his solicitors entered into a long negotiation which proved to be unfruitful. Letters were exchanged between the plaintiff’s and defendant’s solicitors. The plaintiff brought legal proceedings against the defendant. One of the letters was listed in the defendant’s list of documents under Part I, Schedule I. The case was listed for trial before His Honor Judge Geoffrey Baker QC sitting as a deputy High Court in Leeds. In opening the case for the plaintiff, the plaintiff’s barrister invited the trial judge to have a look at one of the letters. The defendant’s counsel vehemently objected. At the end of the day, the trial judge held that the letter which was paraded before him was covered by the without prejudice privilege and should not be considered. The trial was aborted. On the same day, the judge made a wasted costs order against the plaintiff’s counsel.

35.Feeling aggrieved, the plaintiff’s counsel went to the English Court of Appeal where the wasted costs order was quashed. Sir Thomas Bingham (the Master of the Rolls), as the Senior Law Lord of the House of Lords then was, held that the letter was indeed covered by the without prejudice privilege. His Lordship referred to the Rabin’s Case and observed at p. 6:

“It may be observed that in the ordinary situation inter partes production is unlikely to be an issue, since the other party will already have either the original or copy of relevant letters”.

36.In the present case, the 1^st Defendant had (so to speak) nailed the color to the mast vis-à-vis the Old Survey Report when the 1^st Defendant’s solicitors, Mr. Alan Cheung deposed categorically that the raison d’être of the Discovery Application was “to assist the trial judge to assess the veracity of the Plaintiff’s claim”. To achieve that goal, it must follow (as day follows night) that the 1^st Defendant will seek to rely on the contents of the Old Survey Report at the trial proper. Indeed, the 1^st Defendant has taken the liberty of including the Old Survey Report in its hearsay notice.

37.With respect, that course of action of deploying the Old Survey Report at trial as envisaged by the 1^st Defendant is flawed.

The HKSAR case

38.The 4^th case was the HKSAR decision of Gross Fortune International Ltd. v. Set Win International Ltd. [2000] 1 HKC 269 (“the Gross Fortune’s Case”), the plaintiff was the vendor of a shop premises which the defendant agreed to purchase. The deal fell through and the plaintiff sued the defendant for the forfeiture of the deposits and damages. The defendant, in its defence, pleaded that there was a compromise agreement. In the defendant’s list of documents, it listed some letters which according to the defendant contained the alleged compromise agreement with the plaintiff. The plaintiff applied to the court to delete the letters from the defendant’s list of documents. The plaintiff’s application was allowed by a master but dismissed on appeal by Mr. Justice Chung. The plaintiff’s appeal to the Court of Appeal was dismissed.

39.Mr. Justice Ribeiro JA (as he then was) said pertinently at pp. 272-274: “The relevant principles have recently been authoritatively stated by the House of Lords in Rush Tompkins Ltd. v. Greater London Council [1989] 1 AC 1280. That was a case where the plaintiff had settled with the first defendant after without prejudice negotiations. The second defendant fought on and sought discovery of documents containing those negotiations.

Lord Griffiths, with whom all the other Law Lords agreed, summarized some of principles relevant to this appeal. At p. 1299, his Lordship said:

The ‘without prejudice’ rule is a rule governing the admissibility of evidence and is founded upon the public policy of encouraging litigants to settle their differences rather than litigate them to a finish.

He quoted the judgment of Oliver LJ in Cutts v. Head [1984] Ch. 299 at 306 where Oliver LJ stated:

The public policy justification, in truth, essentially rests on the desirability of preventing statements or offers made in the course of negotiations for settlement being brought before the court of trial as admissions on the question of liability.

However, as Lord Griffiths pointed out:

… the rule is not absolute and resort may be had to ‘without prejudice’ material for a variety of reasons when the justice of the case requires it. … Thus the ‘without prejudice’ material will be admissible if the issue is whether or not the negotiations resulted in an agreed settlement, which is the point that Lindley LJ. was making in Walker v. Walker (1899) 23 QBD 335 and which was applied in Tomlin v. Standard Telephone & Cables Ltd. [1969] 1 WLR 1378 (at p.1300)

The rule is therefore principally a rule about the admissibility of evidence at the trial. It aims to exclude possible admissions made in the course of without prejudice negotiations, being used against the parties and therefore to encourage free and frank settlement negotiations prior to the trial.

The fact that a document may be inadmissible at the trial does not mean that it does not have to be disclosed. As Lord Griffiths put it:

The general rule is that a party is entitled to discovery of all documents that relate to the matters in issue irrespective of admissibility (at p. 1303).

However, the without prejudice rule has been extended to protect without prejudice documents against production in the discovery process in certain cases.

Thus, in Rabin v. Mendoza [1954] 1 WLR 271, the defendants obtained a survey report in aid of certain without prejudice negotiations. Those negotiations failed. They disclosed the report in their list but claimed privilege over it. The plaintiff, who had not seen the report, sought an order for its production and was refused.

Lord Griffiths dealing with this authority commented (at p. 1304) that it shows that even as between the parties to ‘without prejudice’ correspondence, they are not entitled to discovery against one another.

The point to note, however, is that in extending this protection to discovery, the court was concerned with the prevention of production of privileged documents to persons who were not already in possession of those documents and who were not, for instance, parties to correspondence contained in those documents. At p. 1300, Lord Griffiths said:

Nearly all the cases in which the scope of the ‘without prejudice’ rule has been considered concern the admissibility of evidence at trial after negotiations have failed. In such circumstances, no question of discovery arises because the parties are well aware of what passed between them in the negotiations.

Therefore, in such cases, the rule retains its function as a basis for objecting to admissibility at the trial. However, as in the present case where there are only two litigants involved and both are well aware of contents of the communications passing between them in the without prejudice negotiations, no issue arises on discovery.

It seems clear to me that it does not matter in the slightest to the plaintiff whether the defendant has listed these documents in their list of documents or whether they have listed them in Pt I or Pt II of the First Schedule.

If the documents objected to are without prejudice, then they will be inadmissible, whatever they may contain” (emphasis added).

40.In the English treatise titled “Privilege” (2^nd Edition, 2006), Mr. Colin Passmore commented on the Great Fortune’s Case as follows at pp. 479-480:

“So far as concerns what litigants do about listing documents at the disclosure stage of litigation that are protected by the privilege, the practice tends to be that parties list them – as in Rabin v. Mendoza – even though they are not obliged to produce them. One judge in the Hong Kong Court of Appeal decision, Great Fortune International Ltd v. Set Win International Ltd, decided under court rules similar to the former RSC, has suggested there is no need to list them at all. Ribeiro J. noted that since the privilege is principally concerned with the admissibility of evidence at trial, by extending the protection to discovery, the court is concerned with the prevention of production of privileged documents to persons who were not already in possession of them and who were not parties to correspondence contained in those documents. In such cases, the rule retained its function as a basis for objecting to admissibility at trial. But where the litigation concerned the parties to the communications, no issue arose on discovery and it was immaterial whether or how a party listed such documents. This view may logically be correct but it is nevertheless better practice to list such documents, at least generally, so as to reduce the risk of any challenge to their non-production”.

The Australian experience

41.Lastly, I would turn to the very helpful Australian decision of Jovista Pty Ltd. v. Fai General Insurance Co. Ltd. [1998] WASC 298 (unreported, 29^th September 1998). There, the plaintiff applied for summary judgment against the defendant. In the supporting affidavit, the plaintiff exhibited two loss adjusters’ reports and a letter (marked without prejudice) from the defendant’s solicitor to the plaintiff’s solicitor which was issued before the suit was commenced. The defendant objected and argued that both the loss adjuster’s reports and the letter were privileged as they were provided to the plaintiff on a without prejudice basis.

42.The matter was ventilated before Master Sanderson of the Supreme Court of Western Australia. The learned Master applied the principles laid down by Lord Justice Denning in the Rabin’s Case and said:

“It is to be noted that this formulation of the principle seems to owe much to contract. It seems based on an agreement between the parties to the effect that if negotiations take place then certain documents, which are either generated for the purposes of, or used in the course of, negotiations will be privileged (at p. 6)

… the role of negotiation in preventing actions being commenced and disposing of them as expeditiously as possible is not to be underestimated. Care must be taken not to undermine any incentive the parties may have to negotiate a settlement without resort to the courts (at p. 7)”.

43.Master Sanderson went on to hold that the loss adjuster’s reports were supplied to the plaintiff for the purposes of negotiation and were thus squarely covered by the without prejudice privilege. Hence, the plaintiff could not rely on them as evidence in the summary judgment application:

“To my mind the position is clear. The defendant’s solicitors were making bona fide attempts to find a way to negotiate a settlement of the dispute between the plaintiff and the defendant. For this purpose the defendant’s solicitors provided copies of the assessor’s reports. If they were not acting in good faith, if they had no intention of settling the dispute, they would not have produced these reports. To adapt the test in Rogers v. Rogers to this case, a claim had been made by the plaintiff against the defendant, the negotiations took place bona fide and with a view to compromise. It therefore seems to me that the assessor’s reports are privileged (at p. 8)”.

44.Neither Mr. Ho (for the Plaintiff) nor Ms. Kwok (for the 1^st Defendant) demurred to the above authorities.

Conclusion

45.To recapitulate, I am of the firm view that the Old Survey Report should not be disclosed in the discovery exercises in the present case. I would highlight the following aspects, which individually and cumulatively, require the Court to affirm the Master’s decision to reject the Discovery Application. They are:

(a)    The correspondence placed before me clearly indicated that there was an express agreement and understanding between the plaintiff and the 1^st Defendant that the Old Survey Report was supplied to the 1^st Defendant on a without prejudice basis;

(b)   The backdrop against which the Old Survey Report was provided by the Plaintiff to the 1^st Defendant was the Plaintiff’s extant threats of legal proceedings to recover the loss and damage in respect of the CV996;

(c)    The mere fact that the Old Survey Report admittedly contains relevant evidence is simply neither here nor there;

(d)   Insofar as the 1^st Defendant still harbors the wishful thinking that should the Old Survey Report be disclosed pursuant to the Discovery Application then, in due course, they could deploy the contents of it forensically to attack and defend the Plaintiff’s case on quantum of damages at the trial proper, it is a totally misplaced view;

(e)    in this regard and mutatis mutandis, I would respectfully echo what was said by Lord Griffiths in Rush & Thompsons’ Case at p. 1305:

“If a party obtains discovery of the “without prejudice” correspondence can make no use of it at trial it can be of only very limited value to him. It may give some insight into his opponent’s general approach to the issues in the case but in most cases this is likely to be of marginal significance and will be properly be revealed to him in direct negotiation in any event. In my view this advantage does not outweigh the damage that would be done to the conduct of settlement negotiation if solicitors thought that what was said and written between them would become common currency available to all other parties to the litigation. In my view, the general public policy that applies to protect genuine negotiations from being admissions in evidence should also be extended to protect those negotiations from being discoverable to third parties”;  

(f)     The focus should be placed by the Court on whether the Old Survey Report was covered by the without prejudice privilege;

(g)    The sheer weight of the authorities referred to above compels no other conclusion but that the Discovery Application lacks legal merits.

46.After considering all the circumstances of the present case, I have no hesitation to hold that the answer to the issue should be “yes” and the Old Survey Report should not be discoverable under O. 24 RDC.

47.Before I depart from this appeal, I would respectfully pay tributes to the succinct ruling of the Master who made the correct and well-justified decision to dismiss the Discovery Application on valid grounds of without prejudice privilege notwithstanding the fact that when the Summons was argued before him, he did not have the benefits of reading and considering the authorities which I have referred to extensively in this ruling.

Results

48.In all, I would dismiss the appeal of the 1^st Defendant against the Master’s dismissal of the Discovery Application with costs. I would make an order nisi that the costs of the present appeal and the appeal hearing should be paid by the 1^st Defendant to the Plaintiff, to be taxed if not agreed and such costs should be paid forthwith.

Representations:

Mr. Alex S. W. Ho of Messrs. Alex Ho & Co., solicitors for the Plaintiff;

Ms. Vanessa K. W. Kwok instructed by Messrs. Lo & Lo, solicitors for the 1^st Defendant.

[1]HK$750.

[2]At p. 273 of the report, it was said that the defendant claimed that:

“all of the said letters and reports were prepared and made as a result of and in pursuance of to the best of my knowledge and belief a without prejudice discussion between the plaintiff’s solicitors and the partner in the defendant’s firm”.