Ho Shuk Ming v. Fong Kwok Shan, Christine and Others

HCA 265 /2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO HCA 265 OF 2012

_________________________

BETWEEN

_________________________

Before: Mr. Registrar K.W. Lung in Chambers (Open to the public)

Date of Hearing: 26 September 2014

Date of Decision: 26 September 2014

_____________

D E C I S I O N

_____________

The applications

1.By summons dated 15 January 2014, the 1^st and 15^th defendants (“the defendants”) seek an order under O.24 r.7 RHC against the Secretary for Justice (on behalf of the Director of Lands), the 21^st defendant of this action.

2.The defendants have also taken out another summons dated 18 September 2014 for leave to serve a 4^th affirmation of the 1^st defendant, the purpose of which is to exhibit a judgment from G. Lam J. in HCA 666/2007.  The 21^st defendant considers that this is unnecessary and improper.

3.By another summons dated 24 September 2014, the 1^st defendant asks for leave to serve the 5^th affirmation in support of the defendants’ application. This 5^th affirmation intends to deal with the “technical objection” raised by the 21^st defendant. In this affirmation, the 1^st defendant affirmed that it is her belief that the Government has, or at some time had, in its possession, custody or power the class of documents specified or described in the schedule to the summons dated 15 January 2014 and that they relate to the issue of illegality raised by the plaintiff in paragraph 44 of the Re-Re-Re-Amended Statement of Claim.

4.The 21^st defendant opposes the defendants’ application for specific discovery under O.24 r.7.  But it does not oppose the 4^th and 5^th affirmations of the 1^st defendant.  They are admitted into evidence and I shall simply deal with the costs of them at the end of this Decision.

5.The parties are legally represented.[1]

6.The defendants’ specific discovery against the 21^st defendant is, as set out in the Schedule to the summons, as follows:

“All Government papers on the Small House Policy starting with the 1972 ExCo Memorandum XCR (72) 219 dated 14 November 1972 “Policy with regard to Small House in Rural Areas of the New Territories” including but not limited to different versions of statutory declarations which an applicant (to erect a Small House) was required to make from 1972 to 1996, and all related document.”[2]

7.This morning, the defendants propose and the 21^st defendant does not oppose that the above schedule should be replaced by the following:

“all paper and correspondence which relate to the Government’s changing the wordings of the Declaration required from an Applicant (to erect a Small House)”

The grounds of objection

8.The 21^st defendant has raised three objections to the application, viz. 1) the defendants have not complied with O.24, r.7(3); 2) the defendants have failed to identify the documents with precision and 3) the defendants have not shown that the documents are relevant or necessary for the fair disposal of the cause or matter or for saving costs.[3]

The factual background

9.Briefly stated, the plaintiff was the registered owner of certain pieces of land in the New Territories.  She had entered into agreements with the developer for the development of building small houses on the pieces of land. Through various agreements, her pieces of land were held by the “tings”, who are indigenous males, entitled to erect small houses on the pieces of land under the Small House Policy of the Government. Those tings have no interest in the pieces of land. They were only paid a fee to allow the relevant applications under the policy to be made in their names. The plaintiff is dissatisfied with the progress of the development and she claimed against the developer and all those tings, seeking an order to set aside the various agreements for the recovery of the pieces of the land.  The plaintiff claimed that those agreements were illegal contracts or against public policy. They are void and liable to be set aside.  The 21^st defendant was joined so as to be subject to the court order for setting aside the building licenses and government permissions and other registrations.[4]

10.It is not disputed that the 21^st defendant had disclosed a) all documents executed by the other defendants in their applications under the Policy, and b) all standard declaration forms since 1993 (the interactions between the parties commenced in 1994)[5] and the pamphlets issued by the Lands Department entitled “The New Territories Small House Policy, How to Apply for a Small House Grant” dated January 1994 and April 1996 respectively, in which there are minor changes between these two versions, showing the change of the Small House Policy.[6]

The law

11.It will be convenient to set out O.24 r.7 here:

7. Order for discovery of particular documents (O. 24, r. 7)

(1) Subject to rule 8, the Court may at any time, on the application of any party to a cause or matter, make an order requiring any other party to make an affidavit stating whether any document specified or described in the application or any class of document so specified or described is, or has at any time been, in his possession, custody or power, and if not then in his possession, custody or power when he parted with it and what has become of it. (L.N. 157 of 2003 and L.N. 199 of 2003)

(2) An order may be made against a party under this rule notwithstanding that he may already have made or been required to make a list of documents or affidavit under rule 2 or rule 3.

(3) An application for an order under this rule must be supported by an affidavit stating the belief of the deponent that the party from whom discovery is sought under this rule has, or at some time had, in his possession, custody or power the document, or class of document, specified or described in the application and that it relates to one or more of the matters in question in the cause or matter. (emphasis added)

8.  Discovery to be ordered only if necessary (O. 24, r. 8)

(1) On the hearing of an application for an order under rule 3 or 7 the Court, if satisfied that discovery is not necessary, or not necessary at that stage of the cause or matter, may dismiss or, as the case may be, adjourn the application and shall in any case refuse to make such an order if and so far as it is of opinion that discovery is not necessary either for disposing fairly of the cause or matter or for saving costs. (L.N. 152 of 2008)

(2) No order for the disclosure of documents shall be made under section 41 or 42 of the Ordinance, unless the Court is of opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs. (L.N. 152 of 2008)

12.The relevant legal principles for this application are succinctly set out by the Court of Appeal in Deak and Company (Far East) Ltd. v N.M. Rothschild and Sons Limited & Others [1981] HKC 78 per Barker JA, 4 November 1981. At page 3 of the judgment, the Court of Appeal said:

“Thus in order to obtain an order for discovery under Order 24 rule 7 the party seeking it has to make out a prima facie case:

(a) that there is in existence a specified document or class of documents;

(b) that the party against whom the order is sought has or had the document in his possession, custody or power;

(c) that the document or class of document relates to a matter in question in the action; and

(d) that discovery thereof is necessary either for disposing fairly of the cause or matter or for saving costs.”    

At page 5 of the judgment, the Court of Appeal said:

‘Moreover, it has to be remembered that, even if existence, possession etc. and relevancy are established, discovery will still only be granted if it is necessary for fairly disposing of the cause or matter: of Lord Wilbeforce in Science Research Council v. Nasse (3) at page 1066 where he said:

"The ultimate test in discrimination (as in other proceedings) is whether discovery is necessary for disposing fairly of the proceedings."

And in deciding that question one of the matters which a Court has to bear in mind is whether it would be oppressive to order discovery - that is oppressive on the party required to give it. What is oppressive must depend upon the particular circumstances of each case.’

13.The above authority has not changed after the CJR.  See Tullett Prebon (Hong Kong) Ltd. v Chan Yeung Fong Nick & Others HCA2197/2009, To J. (unreported) 9 June 2011 at §§11-12 and the case cited by Mr. Lam, that is, Lee Sai Nam v Li Shu Chung, unreported, HCA1711/2009, DHCJ Marlene Ng, 10 January 2014.

The defendants’ reply

14.In reply to the 21^st defendant’s objection that the defendants have not complied with O.24 r.7(3) and that the scope is too wide, Mr. Chain submits that the defendants have no knowledge of what the documents the Government has.[7]  He complains that the 21^st defendant has not disclosed the 1972 ExCo paper (this the 21^st defendant has agreed to supply to the defendants).  If the defendants have no knowledge of what the documents the Government has, it is difficult to understand the basis on which the 1^st defendant can say in her 5^th affirmation that she believed the Government had the documents set out in the schedule.  The only impression one gets under the circumstances is that it is the defendants’ fishing exercise for the documents, which should not be allowed.  See §§8-9 Mariner International Hotels Ltd. v Atlas Ltd. & Another (unreported, HCA10714/1998, 10752/1998 & 10821/1998, Burrell J. 18 January 2002).

15.Mr. Chain is aware of his difficulty and he submits that this is an unusual case where the defendants are in no position to know the papers, being the minutes, memoranda, the letters or other forms of correspondence within the Lands Department and therefore the application will be defeated if the normal rule of the law is applied. This begs the question whether the rule of law should bend in such circumstances. Mr. Chain has not been able to refer me to any authorities to say that fishing exercise should be allowed or a wider margin should be given to the defendants for identification of the documents as a class. The law has to be fair for both parties. If the defendants are unable to specify the class of the documents, it is unfair to invite the Court to make an order against the government official to make an affidavit the way it is proposed. There is a real risk that the government official will commit an offence for making untrue statutory declaration.

16.As to the relevance of the documents, in the 5^th affirmation of the 1^st defendant, the 1^st defendant refers to paragraph 44 of the Re-Re-Re-Amended Statement of Claim, which alleged that the defendants under the various agreements with the tings, had committed the tort of misrepresentation by having the tings to make untrue statutory declarations, representing to the Government that they were the beneficial owners of the pieces of land on which small houses would be built, against the Small House Policy as pleaded in paragraph 41, rendering all the agreements signed by the plaintiff and the defendants and the licenses or permits issued by the Government void.

17.In paragraph 32 of the defendants’ Re-Amended Defence and Counterclaim, the defendants denied any act of misrepresentation to deceive the Government, rendering the Development Agreement, the 2000 Development Agreement, the 2000 House Selection Agreement and the 2004 Agreement void. The defendants have also pleaded that the Government had not issued any fixed Small House Policy with the restrictions as alleged as understood by the indigenous villagers.  However, the main issue of the dispute is the untrue statutory declarations that the plaintiff alleged the defendants and the tings had made to deceive the Government, rendering the agreements signed and permits issued by the Government void. The 21^st defendant is right to say that the scope of the discovery is too wide, which may involve all the papers and materials exchanged internally for the Small House Policy as kept by the Government, a far disproportionate exercise for the resolution of the disputes between the parties. In fact, there is no reference in the pleadings that the change of the Small House Policy, still less the reasons for such change, will be in issue at the trial.  Thus analyzed, the proposed discovery will not save costs or will be necessary for a fair trial.

18.I also agree with Mr. Lam that the scope is too wide, especially when the request refers to “all paper and correspondence which relate to the Government’s changing the wordings of the Declaration …”  The request appears to be vague.  The Court of Appeal in  Deak and Company (Far East) Ltd decided that a class of documents must be clearly identified specific class of documents, classified by not merely bearing on an issue, but also by its nature and it must not be oppressive.  Lee Sai Nam case says that the class must be a class as a whole, not part of a class only. There is also another caution against forcing the deponent to make false affidavit if the document or class of documents are vague.  (See Paul’s Model Art GMBH & Co. KG v UT Ltd. & Others [2006] 1 HKC238)  

19.The defendants’ application is dismissed.

20.The 21^st defendant should be entitled to the costs of the application and the costs for the 4^th and 5^th affirmations of the 1^st defendant to be assessed under O.62 r.9A RHC at $100,000 to be paid by the defendants within 14 days from the date hereof. The costs of the plaintiff be the costs in the cause, to be taxed, if not agreed.  The plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations.

21.The Court shall now make an order  in terms as follows:

a.   Paragraph 1 of the defendants’ summons dated 15 January 2014 be dismissed;

b.   Costs as per paragraph 20 supra.

Ms. Tang Sau Yu, of Robin Bridge & John Liu, for the plaintiff

Mr. Benjamin Chain, instructed by Y.S. Lau & Partners, for the 1^st & 15^th defendants

Mr. Simon Lam, instructed by Department of Justice, for the 21^st defendant