Sunny Tadjudin v. Bank of America, National Association
Read the full judgment text of HCA 322/2008 on BabelCite. This High Court CFI judgment was delivered on 22 December 2011.
1. The Plaintiff was employed by the Defendant as Vice President of its Distressed Debt Trading Group from April 2000 to August 2007 (" Employment "). In these proceedings, the Plaintiff claims from the Defendant a sum of $28.3 million. These represent damages in respect of what the Plaintiff claims to be the Defendant's breach of the implied terms of their contract of Employment. The damages represent performance bonuses for the period from 1 January 2005 to June 2007, which the Plaintiff claim
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HCA 322/2008 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 322 OF 2008 (Transferred from LBTC 5551 of 2007) -------------------- BETWEEN
------------------- Coram : Deputy High Court Judge Mimmie Chan in Chambers (open to public) Dates of hearing : 6 & 7 December 2011 Date of handing down Decision : 22 December 2011 DECISION Background 1.The Plaintiff was employed by the Defendant as Vice President of its Distressed Debt Trading Group from April 2000 to August 2007 ("Employment"). In these proceedings, the Plaintiff claims from the Defendant a sum of $28.3 million. These represent damages in respect of what the Plaintiff claims to be the Defendant's breach of the implied terms of their contract of Employment. The damages represent performance bonuses for the period from 1 January 2005 to June 2007, which the Plaintiff claims would have been paid to her under the Defendant's performance incentive program ("Program"), but for the Defendant's breach of contract. 2.The Plaintiff's case is premised on the Defendant's breach of the following duties which she claims are implied under the Employment contract:
3.The Plaintiff alleges that the basis of the irrationality or perversity of the Defendant's conduct was that there was a discriminatory state of affairs within the Defendant against female employees such as the Plaintiff, and that this affected all the important aspects of an employee's position within the Defendant. It was as a result of such sexual discrimination and/or victimization that she was unfairly assessed in terms of her performance, received reduced bonuses as a result, and was eventually dismissed. The Plaintiff further claims that but for the termination of her Employment, she would still have been employed at the time of the Defendant's payment of the performance bonus for the year 2007, of which she was ultimately deprived. 4.The Plaintiff has separately commenced proceedings against the Defendant under the Sex Discrimination Ordinance ("Discrimination Proceedings"), which proceedings are still pending in the District Court. 5.By way of discovery, the Defendant has filed a List of Documents on 20 June 2011, a Supplemental List on 14 September 2011, and a Second Supplemental List on 25th of October 2011. Over 730 sets of documents have already been disclosed. The Plaintiff now seeks specific discovery of 9 categories of documents, and further and better particulars of the Defence. The Discovery Application: applicable legal principles 6.The legal principles applicable to the determination of the Plaintiff's applications are not in dispute. In relation to specific discovery, the party seeking the order for discovery must make out a prima facie case that a specified document or class of documents exists; that the party against whom the order is sought has or had the documents in his possession, custody or control; that the documents relate to a matter in question in the action; and that discovery is necessary either for disposing fairly of the cause or matter or for saving costs. It is for the party resisting the order for discovery to show that discovery is not necessary. 7.It is also clear that post CJR, the Court should give effect to the underlying objectives of the rules and procedures when it exercises its powers under Order 24 and when it interprets the provisions of Order 24. In deciding whether any document relates to a matter in question in the action, whether any document is or has been in the possession, custody or power of a party, and whether discovery of a document sought is necessary either for disposing fairly of the cause or matter or for saving costs, the Court should always bear in mind the objectives of cost effectiveness, expeditious disposal of cases, proportionality, procedural economy and ensurance of fairness between the parties. 8.The focus of the arguments advanced at the hearing has been on whether the discretion of the Court should be exercised to order discovery, where the documents sought by the Plaintiff have not been identified with precision, or where the class of documents sought is unnecessarily wide, or are confidential. The Defendant also argues that there is insufficient evidence produced by the Plaintiff to show that the documents which she seeks exist, but have not been disclosed. 9.I will deal with the discovery application by categories of the documents sought, setting out (where appropriate) my approach to each category in general, and making orders in relation to each item of the request for discovery. The Defendant's Human Resources Documents and guidelines/policy documents on anti-sex discrimination 10.The request made by the Plaintiff in this category include documents which she claims form part of or have been incorporated into her contract of Employment, including documents relating to the Defendant's anti- discrimination policies, and documents which evidence the Defendant's system of evaluating employees' performance under their employment by the Defendant. 11.One key issue at trial is whether the terms contended for by the Plaintiff can be implied into her contract of Employment with the Defendant. Documents which form part of the contract are clearly relevant to the matter in dispute. The documents disclosed by the Defendant include the Plaintiff's acknowledgment of receipt in May 2000 of the Defendant's Employee Handbook. There is an obvious case that the Employee Handbook once existed and was in the possession of the Defendant. 12.It is also not in dispute that the Defendant had an anti- discrimination policy which applied to the Employment. 13.The request for specific discovery of the Handbook and the Anti-Discrimination Policy as provided to the Plaintiff and applicable in May 2000 is sufficiently clear. I see nothing oppressive in requiring the Defendant to provide discovery of this, and by its officer to depose to the status of the existence or otherwise of the documents referred to in items A1 and A2. 14.The documents originally sought by the Plaintiff under category A include "documents having information on and/or relating to the Defendant's job evaluation system" and "assignment of job codes/job description in relation to each ISSG member", and relating to "job code alignment". "ISSG members" are employees within the Defendant's International Special Situation Group ("ISSG"), a name assigned to the former Distressed Debt Trading Group of which the Plaintiff was employed as Vice President. The Plaintiff claims that an employee's job code or banding in general affects his or her performance evaluation and the Defendant's ultimate assessment of the employee's bonus entitlement. 15.The Defendant objects generally to requests for documents which are classified by reference to their relating to or bearing upon an issue, as opposed to the nature of the documents. On this basis, and relying on the decision in Deak & Co (Far East) Ltd. v. NM Rothschild & Sons Ltd. [1981] HKC 78, the Defendant takes objection to the Plaintiff's requests for documents which relate to, show or pertain to the Defendant's job evaluation system and its job codes assignment (under category A), and the Defendant's performance evaluation system (included in the other categories dealt with in the following paragraphs). 16.On this question, I agree with Mr. Dykes SC that as the more recent cases on discovery show, the focus should be on whether the documents relate, either by their nature or by their content, to any relevant issue in the proceedings. I would be prepared to order discovery of a class of documents which relate to an issue, so long as the issue is relevant to the matters in dispute, and such discovery is necessary. 17.In the course of the hearing, the Plaintiff's requests for discovery were narrowed down. In relation to the category A documents, the Plaintiff's amendments to her requests have confined the documents sought to those which record the "methodology" for job codes and job description assignment for each ISSG member, as opposed to the original request for all documents which relate to the assessment of skills and assignment of job codes to each employee within the entire ISSG of the Defendant. The ambit of the original request made under item A3 would clearly have been too wide to be justifiable. The Plaintiff further seeks discovery of documents "directly recording and/or pertained to the job code alignment" which resulted in the job code alignment of the Plaintiff in March 2005. 18.Mr. Dykes argued that documents relating to job coding (under category A) and to performance evaluation (under the next category B) are relevant, as they will assist the Court to determine whether discrimination existed within the Defendant's system, and whether an inference can be drawn that the Plaintiff had received unfavorable treatment on the ground of her being female. 19.I have to bear in mind that the issue for trial in these proceedings is not whether the Defendant had a discriminatory policy against female employees. The real issue is whether, on the basis that the implied terms contended for by the Plaintiff do form part of the Employment, the Defendant was in breach of contract in that its assessment of the Plaintiff's performance for 2006 and/or 2007, and its determination of the Plaintiff's entitlement to the bonuses for the years 2005, 2006 and 2007 were irrational, perverse, or such that no reasonable employer could have so decided in the circumstances of the case (Clark v. Nomura International plc [2000] IRLR 766 and Post Vanessa Jane v. Nomura HCA 7259 /1997, unreported 29 May 2001). 20.Insofar as the Plaintiff seeks documents recording the Defendant's "methodology" of job codes/job description assignment, the Defendant has already made discovery of what it claims to be the relevant documentation, namely, the Employee Handbooks containing provisions on performance evaluation and job bands, and the Manager's Guide (item 166 of the Defendant's List). The letter to the Plaintiff (item 44 of the Defendant’s List), and the Job Comparison Table and the Job Code Description (item 181 of the Defendant's List) also show the Plaintiff's job code and job description assignment. These and the other documents already disclosed on the Defendant's assessment of the Plaintiff should be adequate for the Court's determination of the issue of whether the Defendant's evaluation of the Plaintiff and her bonus entitlement are perverse or irrational. 21.The Plaintiff claims that on the question of whether she had been the victim of the Defendant's discrimination policy, Mr. John Liptak is the relevant comparator. Her requests for documents relating to Mr. Liptak are dealt with under category D below. In my judgment, to order discovery of documents relating to the Defendant's assessment and treatment of all other employees within the ISSG would be unnecessary at this stage and in this action, bearing in mind the ambit of the real issues to be determined in these proceedings, the probative value of the documents sought and the wide extent of the discovery required of the Defendant, which covers all employees within ISSG. 22.I decline to make any orders in respect of items A3 and A4. 23.In relation to item A5 of the amended request for discovery, the Plaintiff seeks documents "directly recording and/or pertained to the Defendant's internal policy that only staff who were granted trading mandate would be allowed to engage in any trading activities on behalf of the Defendant". 24.I agree with Mr. Man who appears for the Defendant that on the face of the pleadings, the issue relating to the trading mandate is extremely narrow. It is not disputed that the Plaintiff was not granted a trading mandate to buy and sell securities, but that she was authorized to, and did, execute trades with the prior approval of another ISSG member holding a trade mandate. Even if there were documents recording or pertaining to the Defendant's internal policy of the kind referred to in item A5 of the request, the documents are of merely vestigial importance and marginal relevance. It would in my judgment be disproportionate to order discovery in terms of items A5. The Defendant's performance incentive program, bonus pool and bonuses 25.The Defendant has already made discovery of documents relating to its "Pay for Performance" program and its discretionary "performance incentive program"(i.e. the Program). I cannot see from the face of the lists of documents already served and from the documents disclosed that the Defendant has or has had other relevant documents beyond those disclosed. 26.The Courts have emphasized that it is not a purpose of discovery to merely give a party the opportunity to check up on whether the discovery had been properly carried out (Berkeley Administration Inc. v. McClelland [1990] FSR 381). If necessary, the Plaintiff can seek the appropriate opportunity at the trial of the action to cross-examine the Defendant's witnesses on the documents disclosed, e.g. as to the dates of any different versions of the slides or Handbooks. At this stage, I do not consider that a prima facie case for specific discovery has been made out by the Plaintiff, nor that it would be necessary to order further discovery of a wide range of documents relating to the Defendant's performance evaluation system, or its assessment of the "actual efforts" of all its ISSG members. To the extent that the request is amended to seek discovery only of the Defendant's "policy documents" in these respects, such documents would appear to have been included in the Defendant's Lists already. 27.I decline to make the orders sought for items B6, B7 and B8. 28.As for the Plaintiff's request under item B9 for documents relating to the ISSG bonus pool, the Plaintiff relies on documents disclosed under item 721 of the Defendant's List, to show that the Defendant's bonus pools represented the aggregate money available for distribution to ISSG employees as bonuses. Documents disclosed and included on pages 7183 and 7184 of the hearing bundles also suggest that there are documents in the possession of the Defendant and available to at least some employees which show the profit and loss contributions made by employees within ISSG, and which are relevant in the process of the Defendant's determination of an employee's bonus entitlement. 29.The Plaintiff disputes the amounts of the bonuses paid to her in 2005, 2006 and 2007. In deciding whether the Defendant's determination of the Plaintiff's performance and entitlement to bonuses for 2005 to 2007 was such that no reasonable employer would have made, the Court will take into consideration matters such as the Plaintiff's contribution to the ISSG profits or losses, her work behavior and performance, and the profits available for distribution to the ISSG. The Defendant's case is that there is no formulaic approach, and that other factors may also be relevant, but documents relating to the profits available for distribution are relevant in the Peruvian Guano sense. 30.Adopting a proportionate approach on the question of necessity, I will allow the discovery orders sought under item B9, but restricted to "documents directly recording ISSG's bonus pool including the aggregate bonus paid to ISSG employees, its percentage to ISSG's total revenue and the allocation methodology for each of the performance years from 2005 to 2007". 31.On the same basis of proportionality, I will only allow the discovery orders sought under item B10 for "all documents directly recording the policy and methodology for the assessment and determination of bonuses for ISSG employees for each of the performance years from 2005 to 2007". If the Defendant claims that all relevant documents have already been disclosed, it should be a simple matter for its authorized officers so to state on affidavit. 32.I am not satisfied that documents recording or generally pertaining to the assessment of each ISSG employee and the determination of ISSG employees' entitlement to bonuses, even bonuses from the same pool, are necessary to dispose fairly of the cause or matter in these proceedings, or for saving costs. It has to be borne in mind that the question in dispute in these proceedings is whether the Defendant’s assessment of the Plaintiff and its determination of the Plaintiff's bonuses are such that no reasonable employer would have made, and not whether the Defendant's decisions were fair to the Plaintiff, or whether they were simply reasonable. I agree with Counsel for the Defendant that the trial should not be permitted to escalate to a trial on the performance, and for the assessment, of all other ISSG employees. 33.The Plaintiff's request for documents submitted to the New York Attorney General relating to the bonuses of all ISSG team members receiving bonuses exceeding US $250,000 is a fishing request. The Plaintiff argues that the documents "should show the actual performance of the incentive program and help to resolve the issue in dispute as to the nature of the performance incentive program". The nature of the Program can be resolved at trial on the basis of the contractual and other documents already disclosed, without the necessity of resorting to the documents submitted by the Defendant to the New York Attorney General. I refuse the orders sought under item B11. The Plaintiff's employment records 34.It is the Plaintiff's claim that at Mr. Liptak's request, she had completed and submitted to the Defendant in March 2007 her Performance and Development Plan ("March 2007 PDP"). She alleges that in breach of the Defendant's implied duties not to implement its performance evaluation of the Plaintiff and not to administer the Program in an irrational, perverse or arbitrary manner or in a manner that was not bona fide, the March 2007 PDP was not returned to the Plaintiff, and that Mr. Liptak did not review the March 2007 PDP with her. 35.The Defendant admits in its Defence that the March 2007 PDP had been submitted by the Plaintiff. There is no doubt that such a document is in the possession of the Defendant, and it is clearly relevant to the question of whether and how the Plaintiff's performance was evaluated in 2007, before the decision was made to terminate the Employment. I will allow the Plaintiff's amended request under item C12 for discovery of the March 2007 PDP "as reviewed or completed" by Mr. Liptak. 36.I will also allow the request under item C13 for discovery of "documents directly recording and/or pertaining to the Plaintiff's mid-2007 performance evaluation including correspondence/e-mails between JL and the Defendant's Human Resources Department". I agree that the documents disclosed under item 140 of the Defendant's List and on pages 3604 to 3607 of the hearing bundles suggest that the Defendant had considered and reviewed the Plaintiff's performance in or before July 2007. The Defendant's authorized officer should state whether the Defendant is in possession, custody or control of documents recording and/or pertaining to the Plaintiff's performance evaluation in 2007. 37.The documents sought under item C14 and C15 are likewise relevant and necessary, and I will make orders in the terms sought. Documents in relation to John Liptak 38.Mr. Liptak is the Plaintiff's male colleague in ISSG Asia. The Plaintiff claims that Mr. Liptak is a comparator for the purpose of deciding whether the Defendant had practised a discriminatory policy against her, and which led to her dismissal and being paid reduced or no bonuses. It is the Plaintiff's case that despite significant losses on Mr. Liptak's portfolio, and despite the Plaintiff's significant contribution to the profits earned by ISSG Asia, she was paid a bonus for the 2006 performance year which was lower than the bonus paid to Mr. Liptak. The Plaintiff further claims that she had been unfairly assessed in her performance evaluation for 2006, so that her bonus entitlement would be reduced and Mr. Liptak's bonus payment from the ISSG bonus pool could be increased. 39.The Plaintiff therefore seeks discovery of documents which relate to Mr. Liptak's performance evaluation for the performance year 2007, and to the bonus awarded to Mr. Liptak for the performance years 2005 to 2007. 40.The Defendant objects to discovery of documents relating to Mr. Liptak, on the basis that Mr. Liptak had different work experience, responsibilities and targets, and occupied a different position when compared with the Plaintiff. The Defendant also claims that there is no justification to order discovery of documents which are confidential to either Mr. Liptak or the Defendant. 41.When considering the relevance of the documents sought, I bear in mind that it is the Plaintiff's claim which has to be considered, and not just the Defence. On her case, documents showing Mr. Liptak's performance, the Defendant's evaluation of Mr. Liptak and the bonuses paid to Mr. Liptak contain information for comparison purposes, which may directly or indirectly enable the Plaintiff to advance her case on the Defendant's discriminatory practices and the perversity or irrationality of the Defendant's evaluation of the Plaintiff, and its decision on the bonuses paid to the Plaintiff. 42.I bear in mind that the documents sought to be disclosed involve issues of confidentiality affecting Mr. Liptak and the Defendant, but the need to preserve confidentiality has to be balanced against the probative value of the documents concerned, and the objective of disposing fairly of the case and in accordance with the substantive rights of the parties involved (see Science Research Council v. Nassee [1980] AC 1028). Bearing in mind the issues involved, I will order discovery of "documents directly recording and/or pertaining to Mr. Liptak's performance evaluation for the performance year 2007", as sought under item D16, and "documents directly recording and/or pertaining to the bonus awarded to Mr. Liptak for the performance years 2005, 2006 and 2007", as sought under items D17. 43.However, as Burrell J emphasized in Mariner International Hotels Limited v. Atlas Limited [2002] HKEC 186, the task of the Court is to determine when doing justice to the claim stops, and "fishing" starts, when "the onerous nature of the discovery exercise passes from the necessary and permissible to the unnecessary and impermissible". This case is a typical example where discovery should be sensibly controlled, and not allowed to be used as an oppressive weapon, to be pursued without sufficient regard to economy and efficiency in terms of the usefulness of the information which is likely to be obtained from the documents disclosed. 44.I am not satisfied that discovery is necessary in respect of documents which relate to the "description of (Mr. Liptak's) job activities", his actual work performed, his trading mandate, or "his improvement of ISSG's profitability". On the last category of documents just mentioned, the Defendant has only pleaded that it was one of Mr. Liptak's major responsibilities to "lead the team and improve its profitability". Discovery of the wide class of documents sought by the Plaintiff will only lengthen the trial and lead to immaterial matters being introduced. 45.Nor do I see, in the context of the matters in question in these proceedings, the relevance of documents relating to Mr. Liptak's promotion to his position of Head of Desk, when he was so promoted, and documents evidencing Mr. Liptak becoming the Plaintiff's manager. The matters complained of by the Plaintiff in these proceedings do not include the fact of Mr. Liptak’s promotion, but even if Mr. Liptak’s position as Head of Desk is by itself relevant to the Plaintiff’s complaints regarding the perversity of the dismissal and bonuses decisions affecting her, discovery of documents relating to the fact of Mr. Liptak’s promotion and becoming the Plaintiff's manager is not necessary, either for disposing fairly of the matter, or for saving costs. 46.The trial of this action is not about Mr. Liptak's detailed employment history and experience, his work on the projects in which he was involved during his employment by the Defendant, nor on his trading mandate. Documents recording or evidencing these matters are all of vestigial importance, and orders for their disclosure are not necessary, particularly since I have allowed discovery of documents which pertained to or record Mr. Liptak's performance evaluation and the bonuses awarded to him for the relevant years in question. 47.I refuse the orders sought in respect of item D18 to D24. ISSG Operations/Loss Dumping 48.The Plaintiff claims that certain loss-making distressed debt assets ("Asia P&P Assets") were transferred from Mr. Liptak's portfolio to hers in October 2005, which she claims resulted in the losses being attributed to her portfolio. The Plaintiff claims that this was done to improve Mr. Liptak's performance and to increase the bonus paid to him. According to the Plaintiff's case, she was also victimized for reporting the hidden losses of the Asia P&P Assets in Mr. Liptak's portfolio, as her evaluation was as a result downgraded in November 2005, thus affecting her bonus for the 2005 performance year. 49.Discovery has already been made of a large amount of documents showing the value of assets, the profit and loss positions of assets or projects managed by different employees of the Defendant including the Plaintiff and Mr. Liptak, and other financial figures. The specific documents which the Plaintiff now seeks are "documents directly recording and/or pertained to the policy and/or practices of the marking/valuation of ISSG's book/portfolio during 2005 to 2007". 50.The valuation of the assets concerned is raised in a narrow context. The Defendant admits that the asset management of the Asia P&P Assets was transferred from Mr. Liptak's portfolio to the Plaintiff's. The Defendant also admits that the value of the Asia P&P Assets was adjusted pursuant to the Plaintiff's request. The Defendant claims that the assets remained under the overall portfolio managed by Mr. Liptak, and also claims that the Plaintiff had not suffered any detriment as a result of the "loss dumping" incident. 51.I fail to see how the request for documents relating to "the policy and practices of the marking and valuation of ISSG's portfolio" relates to any real issue in dispute in these proceedings. To permit discovery of a wide range of documents on valuation of the entire ISSG's books and portfolios from 2005 to 2007 is totally disproportionate, oppressive and unnecessary. I refuse the orders sought under item E25. 52.Under item E26 of the request, the Plaintiff seeks discovery of "quarterly end usage reports including details of individual assets from IH 2000 to IH 2007". The Plaintiff claims that these documents are relevant to her plea in paragraph 44 (3) of the Reply. Here, she claims that during 2000 to 2005, she was the only female analyst in Asia and was provided with significantly lower capital /country limits to invest for the Defendant. The Plaintiff claims that this is evidence of the Defendant's discriminatory practices against female employees. 53.The Defendant has already made discovery of end usage reports. I do not consider that further discovery is necessary for disposing of the issues in these proceedings which are not about whether the Defendant generally discriminates against its female employees, but whether its decisions to terminate the Employment and relating to the bonuses awarded to the Plaintiff were, in any way or for whatever reason, perverse, irrational or not bona fide. 54.Under item E27, the Plaintiff seeks discovery of documents which directly evidence and/or pertained to the assessment made by the Head of Desk and the management of the expertise or specialisation of each ISSG member at all material times. This appears to relate to whether the Plaintiff had been unfairly assessed, as she claims. I agree with Counsel for the Defendant that many documents have already been disclosed to show the Defendant's policy as to how its employees are assessed, and relating to the Plaintiff 's assessment. I do not consider that the further discovery of the wide range of documents sought in relation to the expertise or specialization of each and every ISSG member is necessary. I reject the orders sought for items E26 and E27. Profit and Loss Reports 55.The Plaintiff seeks discovery of "documents directly recording and/or pertained to ISSG Global and ISSG Asia profit and loss numbers for the first half of 2007", and ISSG Asia's aggregate profit/loss from 2005 to 2007. The Defendant has already disclosed the profit and loss reports of ISSG relating to the analysts within ISSG, except for the 2007 revenue report showing the profit and loss contributions by analyst. It is doubtful that much of the profit and loss figures contained in the volumes of documents already disclosed would be of assistance at the trial. At this stage, I do not consider that further discovery of the profit and loss reports is necessary to dispose fairly of the cause or matter in these proceedings. Further discovery is certainly unnecessary for saving costs. 56.I refuse the orders sought for items F28 and F29. 57.The Defendant has also made ample discovery of documents which show the profit and loss of assets or projects managed by the Plaintiff or within her portfolio, on which her performance was assessed. The parties may dispute the method of calculation of the "aggregate value” of the projects in which the Plaintiff had participated, or even the calculation of the Defendant's or the ISSG profits, but this can and should be dealt with by cross-examination of the relevant witnesses at trial on the basis of the documents already disclosed, and not by fishing for any material which may or may not exist. In view of the extent of the discovery so far made, of documents on the evaluation of the Plaintiff and Mr. Liptak, the profit and loss position documents and documents relating to the ISSG bonus pool, I am not satisfied that there are documents of the type which the Plaintiff seeks under items F30 to F32, which exist but have not been disclosed. Nor do I consider that discovery of such documents is necessary. Documents relating to Treatment and Comparison of Male and Female Employees of ISSG 58.Bearing in mind the issues to be dealt with at trial in these proceedings, I do not consider that discovery of documents which relate to the Defendant's treatment and comparison of male and female employees within ISSG is necessary. Whether or not the Defendant has a sexually discriminatory policy or practice is more properly the subject of the Discrimination Proceedings which are currently on foot. Discovery is ongoing in those proceedings, and in view of the discovery already made in these proceedings dealing with breach of the implied terms, it is unnecessary to order discovery of the documents in category G of the Plaintiff's requests. Complete chain of correspondence/e-mails 59.Discovery has already been made of a long series of correspondence and e-mails. The Plaintiff seeks discovery of the "complete chain" of such correspondence. This request covers a wide category of documents, but is imprecise as to when the "chain" can be considered to be "complete". The Plaintiff has failed to discharge the onus which is on her to identify what documents are missing in the chain, how they are relevant, and that they are in existence and in the possession of the Defendant. I will not make any order under this category. Plaintiff's specific discovery requests by way of correspondence dated 8 September 2011 60.Under item I38, the Plaintiff seeks "documents directly recording and/or pertained to the recommendation on bonus payments by Ken Schneier and Scott Gordon in consultation with Judy Wai of the Human Resources Department of the Defendant and approved by the board of the Defendant for each of 2005 and 2006 performance years". The Defendant has already disclosed e-mails exchanged between the relevant personnel on "2005 year end compensation", 2006 “revenue forecast”, 2006 total compensation for employees including the Plaintiff and Mr. Liptak, "Adjustments to 2006 Targets" and "GMS compensation communication in Asia [ISSG]" with "2006 year end compensation communication", 2005 and 2006 Annual Compensation and 2006 Ratings, all affecting the Plaintiff. The Plaintiff has not shown that other documents exist, are in the possession of the Defendant and have not been disclosed. In view of the discovery already made and the issues for determination at trial, I refuse any order for further discovery. 61.In her Amended Statement of Claim, the Plaintiff disputes the Performance Improvement Plan Review dated 17 August 2007 ("PIP Review") which Mr. Liptak had given to her in relation to his assessment of her performance. The PIP Review contains the complaint that the Plaintiff had not provided Mr. Liptak with weekly updates on her projects. The Plaintiff claims that she had provided such updates, and seeks specific discovery under item I39 of "a complete set of e-mails sent by the Plaintiff to Mr. Liptak on her projects during the period from 20 June 2007 to 28 August 2007". 62.On its part, the Defendant claims that it has already made discovery of e-mails sent by the Plaintiff regarding "write ups of the credits she covered". It is not clear whether these contain all the weekly updates referred to by the Plaintiff. 63.As the Plaintiff's request covers a specified period and relates only to the projects on which she worked during this period, I will order discovery of the documents sought. 64.For all the reasons set out above in relation to the issues for determination at trial, and balancing the interests of proportionality, cost effectiveness, confidentiality and the fair disposal of the cause in these proceedings, I will not order discovery of the documents which contain redacted information on the historical compensation of ISSG employees, adjustments to their 2006 targets, their 2006 total compensation, and their 2007 compensation. I will, however, allow discovery of the e-mails on pages 5652 to 5655, with the information on Mr. Liptak unredacted. The request for Further and Better Particulars: applicable legal principles 65.Again, the legal principles are clear. The main functions of particulars are to inform the other side of the nature of the case that they have to meet, as distinguished from the mode in which that case is to be proved, to prevent the other side from being taken by surprise at trial, to limit the generality of the pleadings, the claim and the evidence, and to limit and define the issues to be tried. Since the Civil Justice Reforms, under Order 18 rule 12 (3B), no order for particulars shall be made unless the Court is of the opinion that the order is necessary either for disposing fairly of the cause or matter, or for saving costs. Much of what is stated in the preceding paragraphs of this Decision in relation to discovery is equally applicable to the determination of the Plaintiff's requests for particulars, in that the Court must take a proportionate approach, balancing the interests of the fair disposal of the cause or matter in accordance with the parties' substantive rights against cost effectiveness, expeditious disposal of cases, procedural economy, and confidentiality. 66.Item 3 of the request for particulars deals with paragraph 4 (7) of the Defence, which pleads that the Defendant at all material times had an internal policy that only staff who were granted trading mandate would be allowed to engage in any trading expertise on behalf of the Defendant. 67.The Plaintiff requests the identification of "all documents which evidence the alleged internal policy". This is a request for evidence, to which the Plaintiff is not entitled. 68.In any event, bearing in mind the matters set out in paragraph 24 above concerning the narrow ambit of the dispute on the trading mandate, I do not consider that the further particulars sought by the Plaintiff are necessary for the fair disposal of the matter, or for saving costs. The Defendant has sufficiently pleaded its case in relation to the trading activities of the ISSG members, and no further particulars are required. 69.Under item 4 of the request for particulars, the Plaintiff seeks particulars of the expertise or specialization of each ISSG member at all material times, and the identity of the individuals who assessed the expertise or specialization of each ISSG member at all material times. Bearing in mind the issues for determination in these proceedings, it is not necessary to determine the expertise or specialization of each ISSG member, and by whom they were assessed. The particulars sought are not necessary. 70.Under item 6, the Plaintiff seeks particulars of paragraph 7(2) of the Defence, which pleads: "It is denied that under the Employment Agreement, the Plaintiff was entitled to be considered under (the Program) otherwise than on the basis that the bonuses the payable only at the absolute discretion of the Defendant." 71.The particulars sought are, first, for the identification of "all documents which evidence the alleged performance evaluation system under (the Program) which awarded bonuses on the basis of absolute discretion". This is a request for evidence, to which the Plaintiff is not entitled. 72.In relation to the request under item 6(b), I will allow this, which requires the Defendant to state whether the performance evaluation system which awarded bonuses on the basis of absolute discretion was applicable only to the Plaintiff, or to all ISSG employees. This should be a simple answer. 73.No further particulars are required, as the request under item 3(c) has been answered. 74.Paragraph 8 of the Defence contains a denial of paragraph 5(1) of the Amended Statement of Claim, which sets out one of the implied terms relied upon by the Plaintiff. The Defendant has in the same paragraph 8 put forward its case on the implied term. The Defendant's plea is sufficiently clear, and I do not see the necessity for the further particulars sought. 75.Paragraph 9 of the Defence pleads that paragraphs 5(2) and 5(3) are not admitted. The Defendant's case on the internal guideline on performance evaluation has been set out in paragraph 9. The plea is sufficiently clear, and I do not see the necessity for further particulars. 76.In relation to item 11, the Defendant has stated in its Answer to the request that the particulars of ISSG Asia's aggregate profits are "guess estimates", how the estimations are made, and has referred to particulars identified in the documents disclosed. The further particulars sought by the Plaintiff amount to a request for evidence and how the Defendant's estimated figures are to be proved. 77.The Plaintiff concedes that particulars are no longer necessary in respect of item 13. 78.Item 16 relates to paragraph 15(3) of the Defence, which reads: "It is not admitted that the Plaintiff's performance evaluation by the Defendant for the calendar year of 2005 was not returned to or reviewed with her at the material time." In answer to the Plaintiff's request to state whether the Plaintiff's performance evaluation was returned to or reviewed with her, the Defendant has already answered that the Plaintiff's performance was reviewed by Mr. Schneier and discussed with the Plaintiff orally during the reviews in July 2005 in November 2005. I consider that the Defendant's case is sufficiently clear, and no further particulars are necessary. 79.In paragraph 17(3) of the Defence, the Defendant pleads that paragraph 10 of the Amended Statement of claim is not admitted. Paragraph 10 pleads that Mr. Liptak's portfolio was lossmaking, and that for two consecutive periods in 2006 and 2007, that Mr. Liptak's portfolio incurred losses of approximately US $7 million to US $8 million. There is a clear non-admission by the Defendant. I do not consider that further particulars are necessary. 80.The Plaintiff pleads in paragraph 13(2) of the Amended statement of claim that in breach of its contractual duties, the Defendant did not review with the Plaintiff her 2006 Performance and Development Plan, although the Plan was returned to her. In paragraph 20(2) of the Defence, the Defendant pleads that for the year end 2006 performance review, Ken Schneier of the Defendant gave clear comments on the Plaintiff 's overall performance rating and identified the areas of weakness that the Plaintiff was expected to focus and improve upon. The Defendant pleads in paragraph 20(3) that it is "not admitted that Ken Schneier did not review the aforesaid performance appraisal with the Plaintiff". 81.By item 19 of the Plaintiff's request for particulars, she asks the Defendant to state "whether it is the Defendant's pleaded case that Ken Schneier had reviewed the aforesaid performance with the Plaintiff". To define the issues on alleged breach for determination at trial, and to inform the Plaintiff clearly of the nature of the Defendant's case in relation to its performance appraisal of the Plaintiff for 2006, I will make an order for particulars to be furnished under item 19 (a) and (b). 82.In relation to item 20, I consider that the Defendant has furnished an adequate answer to the Plaintiff's request in relation to paragraph 13A of the Amended Statement of claim. The Defendant's case on the discretionary incentive bonus and the bonus pool has been clearly pleaded, and I do not consider that further particulars are necessary. 83.Paragraph 22(1) of the Defence contains an admission. The Plaintiff is not entitled to seek particulars of admissions (paragraph 18/12/2 Hong Kong Civil Procedure 2012; Jacob & Goldrein: Pleadings Principles and Practice (1990) p172). 84.Paragraph 22 (2) of the Defence contains a clear plea: "It is not admitted that John Liptak's portfolio had incurred significant trading losses in 2006." Further particulars sought under item 22 are therefore unnecessary. 85.In relation to the requests made under items 24 and 25 for particulars of Mr. Liptak's employment history, work experience and work performance, they are requests for evidence, to which the Plaintiff is not entitled. I also refer to the matters stated in paragraph 46 above. The order for particulars is unnecessary for disposing fairly of the matter, or for saving costs. 86.Item 26 of the request seeks particulars of paragraph 26 of the Defence, which contains a denial of paragraphs 17 of the Amended Statement of Claim. Paragraph 17 of the Amended Statement of Claim pleads the Defendant's breach of contractual duties by reason of the fact that the Plaintiff was treated less favorably than Mr. Liptak in terms of financial compensation, opportunities for promotion and access to facilities and services. There is a clear denial and further particulars are not necessary. In any event, by reason of the matters stated in paragraph 58 above, further particulars of the claim of alleged discrimination are not necessary in these proceedings. 87.The request made under item 27 in relation to Mr. Liptak's appointment as Head of Desk has been adequately answered. I do not consider that further particulars are required or necessary. 88.Item 28 of the request seeks particulars of paragraph 30 of the Defence, which states that paragraphs 21 and 22 of the Amended Statement of Claim are not admitted. Paragraph 21 of the Amended Statement of Claim pleads that managers of the Defendant were required to discuss with their associates by 31 July 2007 the performance ratings assigned by the managers in the Performance and Development Plans which were to be submitted in March 2007. The Plaintiff claims in paragraph 22 of the Amended Statement of Claim that the Defendant was in breach of the implied terms of the contract of Employment, as no copy of the March 2007 PDP completed by the Plaintiff in March 2007 was returned to or reviewed with her by Mr. Liptak, nor did he inform her of or discuss with her the performance ratings he had assigned to her in the March 2007 PDP. 89.By item 28, the Plaintiff requests the Defendant to state whether it is its pleaded case that managers were not required by the Defendant to discuss the performance ratings assigned by the managers to the associates in the Performance and Development plans, and whether the March 2007 PDP was returned to or reviewed with the Plaintiff. 90.The answer furnished by the Defendant is not satisfactory. It simply states that the warning letter and the Performance Improvement Plan ("PIP") had been issued to the Plaintiff on 29 June 2007, and "there was no requirement for the Plaintiff's manager to complete a separate Performance Development Plan in addition to the Performance Improvement Plan". The Defendant also states that by setting a list of goals in the PIP, the Plaintiff was told what was expected of her, how she was doing and in what ways she did not meet the performance objectives. 91.The Defendant's evaluation of the Plaintiff's performance in early 2007 is material to its termination of the Employment and to the decision regarding the Plaintiff's bonus entitlement. I am satisfied that the particulars sought are necessary for disposing fairly of the cause or matter or for saving costs. The Defendant's answer that the managers were not required to complete a separate PDP in addition to the PIP does not answer the request as to whether the managers were required to discuss the associate's performance ratings with the associate. Nor has the Defendant answered whether it is its case that the March 2007 PDP had been returned to or reviewed with the Plaintiff. 92.To clearly identify the issues for trial, I will order that the Defendant furnishes the particulars sought under item 28 (a) and (b) of the request for particulars. 93.By way of challenge of the Defendant’s evaluation of her performance, the Plaintiff claims in paragraph 25 of the Amended Statement of Claim that Mr. Liptak had no sufficient cause to issue a warning letter to her in June 2007. To this, the Defendant pleads in paragraph 33(1) that there was good reason to issue the warning letter. It further pleads in paragraph 33(3) of the Defence that conflicts had surfaced between the Plaintiff and Mr. Liptak in January 2005, that the Plaintiff had refused to recognize the role of Mr. Liptak as Head of Desk, refused to keep him informed of her projects and made deliberate attempts to skip reporting line. The Defendant also pleads that such behavior on the Plaintiff’s part disrupted the operation of the Hong Kong Desk of ISSG as a team. 94.Under item 29 of the request for particulars, the Plaintiff sought particulars of the facts, matters and circumstances relied upon in support of the Defendant’s above allegations, that conflict had surfaced between the Plaintiff and Mr. Liptak, that the Plaintiff refused to recognize Mr. Liptak’s role of Head of Desk, etc. 95.I agree with Mr. Man that the Defendant had already pleaded the material facts relied on by the Defendant as to its reason to issue the warning letter: namely, the conflicts which had allegedly surfaced, the Plaintiff’s alleged refusal to recognize Mr. Liptak’s role, her alleged refusal to keep Mr. Liptak informed, her deliberate attempts to skip the reporting line, and the alleged disruption of the team. The further matters sought by the Plaintiff constitute evidence to prove these pleaded facts, to which the Plaintiff is not entitled. 96.The same objection applies to item 34 of the request, which seeks particulars of the Defendant’s non admission of paragraph 31 of the Amended Statement of Claim. The said paragraph 31 relates to the Defendant’s lack of cause to make the allegations that the Plaintiff had failed to comply with a Performance Improvement Plan (“PIP”) issued to her after the warning letter of 29 June 2007. The Defendant has answered the Plaintiff’s request to state its case, by referring to the facts pleaded in paragraphs 35 and 37 of the Defence. The further particulars sought amount to evidence, to which the Plaintiff is not entitled. 97.In relation to item 35 of the request, I cannot agree that the Defendant’s pleas in paragraphs 37 and 39 conflict. Paragraph 37 admits paragraph 30 of the Amended Statement of Claim, which pleads the August Meeting and Mr. Liptak’s allegation that the Plaintiff had failed to comply with the requirements of the PIP. Paragraph 39 of the Defence makes a denial of paragraph 32 of the Amended Statement of Claim, which pleads that Mr. Liptak informed the Plaintiff at the August Meeting that her Employment would be terminated by reason of her failure to comply with the requirements of the PIP, save as to the options Mr. Liptak allegedly gave to the Plaintiff at the August Meeting. The Defendant’s pleas as to what it admits and what it denies are sufficiently clear, and I do not consider that further particulars are necessary. 98.The Defendant has adequately answered the Plaintiff’s request made under item 36, relating to the 2 “Does Not Meet” ratings given to her for her 2006 performance review, in respect of her “behavior”. No further particulars are necessary for the Defendant’s plea on these ratings, and on the letter dated 3 October 2007 referred to in paragraph 43(1) of the Defence. 99.The Defendant has already stated in its Answer to item 37(b) of the request that “Mr. Liptak did not conduct any additional review meeting with the Plaintiff to go through the Performance and Development Plan” submitted by the Plaintiff on or about 29 March 2007. There was only a review on 20 August 2007 of the PIP submitted by the Plaintiff on or about 29 March 2007. As such, no further particulars need to be given in answer to item 37(c). 100.I do not consider that the particulars sought under items 37(a) and 37(d) are necessary, as the pleas on the letter of 3 October 2007 and the reviews conducted in 2007 are sufficiently clear from the pleadings and the Answers to the requests. Conclusions on Discovery and Particulars 101.In relation to the orders for discovery which I have made, they will be for:
102.In relation to the requests for particulars, I will make an order in terms of paragraph 1 of the Plaintiff 's Summons issued on 27 June 2011, in respect only of items 6(b), 19(a) and (b) and 28(a) and (b) of the requests. 103.I do not consider that it is necessary or appropriate to make unless orders at this stage in respect of the orders for discovery and particulars I have made. Other matters covered by the Summonses 104.Under paragraph 1 of the Plaintiff’s Summons issued on 26 October 2011, the Plaintiff seeks an order compelling the Defendant to amend its Supplemental Lists so that the form of the Lists complies with Form No. 26 in Appendix A of RHC (“Form 26”). The Plaintiff argues that Order 24 rule 5(1) provides that a list of documents "must be in Form No. 26". 105.The Plaintiff takes objection to the form of the Defendant's Supplemental Lists, as it contains an additional paragraph 6 which states:
106.Although Order 24 rule 5 specifies that a list of documents "must be" in Form 26, Order 1 rule 9 provides that "the forms in the Appendices shall be used where applicable with such variations as the circumstances of the particular case require". Paragraph 1/9/1 of the Hong Kong Civil Procedure provides that "a certain latitude is permitted", which latitude is intended to mitigate excessive formality and technicality, when a variation to meet the requirements of a particular case would make the form more valuable and suitable as an instrument to achieve the real objective of the form. 107.The objective of discovery is to ensure that all relevant documentation is disclosed by each party, thus enabling the parties to find evidence supporting their own case and to determine the case of their opponents. Further objectives of the discovery process are to enable a party to obtain the best possible evidence or admissions from his opponent, and to evaluate the strength of the opponent's case, thus to shorten the trial and lessen the cost of litigation. The advantages of the discovery process include fairness to both sides, playing “with all the cards face up on the table”, reducing surprise at trial, and encouraging settlement (para 1.02, Discovery by Matthews and Malek, 1992 edition). Documents to be disclosed should be sufficiently identified to enable the other side to ascertain and ask for those he wishes to inspect and to enable the court, if application is made, to see whether the rule or any order for discovery has been complied with, and if necessary, to make an order for production for inspection which is clear and can be enforced (paragraph 24/5/3, Hong Kong Civil Procedure 2012). 108.Although the Court can allow for sufficient latitude to allow variations to Form 26 to suit the circumstances and needs of the particular case, I consider that the additional paragraph 6 inserted in the Defendant's Lists in this case should be amended or otherwise struck out. The Defendant states in paragraph 6 that the documents enumerated in Schedule 1 include documents which are irrelevant to the issues in dispute, relating to allegations which are outside the jurisdiction of the Court. However, the Defendant does not state which of such documents relate to the irrelevant pleas, in respect of which the Defendant reserves its right to dispute the jurisdiction of the Court. This is embarrassing to the parties' position. Neither the Court nor the Plaintiff knows which of the documents enumerated in the entire Schedule 1 are accepted by the Defendant to be relevant to the matters in question in these proceedings, in respect of which the Defendant accepts that the Court has jurisdiction to compel the parties to comply with their obligations for discovery. As opposed to identifying the issues in dispute, paragraph 6 of the Defendant's Supplemental Lists invites disputes and issues being raised at trial and leading up to trial, and this cannot be in furtherance of the objectives of the rules. Nor can the objective of discovery be achieved by the present form of the Defendant's Supplemental Lists. 109.I will order that unless the Defendant, within 14 days from the handing down of this Decision, amends its Supplemental Lists by deleting paragraph 6, or amends the Supplemental Lists to an acceptable form, paragraph 6 of each of the Defendant's Supplemental Lists dated 14 September 2011 and 25 October 2011 will be struck out. 110.Although the Plaintiff has lodged a Notice of Appeal against an Unless Order made by the Master on 4 November 2011 (“Unless Order”), whereby she has to serve her witness statements by 23 December 2011, no arguments have been made on the appeal at the hearing before me. Mr. Dykes only seeks an extension of time for the Plaintiff to consider the documents to be disclosed by the Defendant before she files her witness statements in accordance with the Unless Order. 111.In view of the Orders I have made, I will extend the time for the Plaintiff to comply with the Unless Order within 10 weeks from the date of handing down of this Decision. Enough time has been wasted by these interlocutory skirmishes, and the timetable I have indicated for the discovery, particulars and the service of the witness statements should be adequate. Costs 112.Although the subject applications contain a total of 40 requests for discovery and 63 requests for particulars, I have only made orders for 10 items for discovery and 5 items for particulars. The requests for particulars are mostly for evidence, or amount to interrogatories for information. The majority of the requests for discovery and particulars have been found to be unnecessary either for disposing fairly of the cause or matter or for saving costs. But for the last minute amendments made in the course of the hearing to confine the discovery exercise to “policy” or “methodology” documents, or documents which directly contain the information sought, nearly all the requests would have been disallowed due to the unnecessarily wide range of the documents sought. For these reasons, I consider that the whole exercise of the applications for discovery and particulars has been unnecessary, oppressive and unreasonable. 113.I will make an order nisi that 90% of the costs of the subject applications are to be paid by the Plaintiff on an indemnity basis, with the balance 10% of the costs of the applications to be paid by the Defendant on party and party basis. This order nisi will become absolute unless either party applies within 21 days to vary the same. There will be certificate for counsel. 114.The Appeal lodged against the Unless Order is dismissed, with costs.
Mr. Philip Dykes, S.C. and Mr. Dennis Kwok, instructed by Messrs. William K.W. Leung & Co., for the Plaintiff Mr. Bernard Man, instructed by Messrs. Mayer Brown JSM, for the Defendant Please refer to HCMP337/2012 for the relevant appeal(s) to the Court of Appeal. |
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