WONG CHONG YIP v. CHAN YIN FONG

HCPI 755/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 755 OF 2006

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D E C I S I O N

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1.  This is an application for specific discovery and discovery of documents from non-parties. 

2.  The plaintiff claims against the defendant damages for personal injury.  The plaintiff used to work as a cook for the defendant.  The accident allegedly happened on 11 October 2003 inside the defendant’s kitchen.  The defendant operated a small restaurant or cafe of Hong Kong style. 

3.  This action was instituted on 4 September 2006.  The defendant issued a summons on 19 September 2006 seeking a stay of this action.  The ground is that the plaintiff had signed a Release, Discharge and Indemnity dated 9 June 2004 (“the Release”) and the Release is still valid and binding on the plaintiff.  The registrar gave directions on 27 September 2006 for the filing of affidavits under this summons. 

4.  The defendant issued a further summons asking for the trial of a preliminary issue of whether the Release was an agreement binding on the plaintiff.  The registrar on 30 November 2006 ordered a trial of the preliminary issue and gave directions for, among others, exchange of list of documents.

5.  The trial of the preliminary issue was fixed on 28 February 2007 with the next day also reserved.  The defendant filed his list of documents on 14 December 2006. 

6.  There was a dispute as to the sufficiency of the defendant’s discovery.  On 12 February 2007 the plaintiff issued a summons against the defendant for “specific discovery of all documents appertaining to the alleged settlement documents allegedly signed by the plaintiff on or about 9 June 2004, including but not limited to all correspondence exchanged amongst the defendant, Wing Lung Insurance Company Limited and TRM (Hong Kong) Limited.  Computation sheets relating to the calculation of settlement sum and settlement proposal(s) prepared by the said TRM (Hong Kong) Limited”.

7.  The summons also asked for discovery of the same documents by Wing Lung Insurance Company Limited (“Wing Lung”) and TRM (HK) Limited (“TRM”) under section 42 of the High Court Ordinance and O.24 r.7A of the Rules of the High Court.

8.  Wing Lung was the defendant’s insurer and has taken up the defence of this action for the defendant.  TRM is a company specialising in investigation of industrial accident victims and the cause of injury.  They also recommend recovery treatment, monitor the progress of recovery, recommend and negotiate compensation proposals, draft and witness the execution of compensation settlement documents.  In the present case, TRM had been engaged by Wing Lung to handle the plaintiff’s case.  They negotiated with the plaintiff and agreed with him a compensation package which was embodied in the Release. 

9.  The plaintiff opposed the application to stay on the ground that the Release and the documents pertaining to the settlement embodied in the Release were signed by him as a result of duress and undue influence practised upon him by the staff of TRM and of misrepresentation made to him by the defendant and by the representatives of the insurer. 

10.  The plaintiff’s case is that the defendant, TRM and Wing Lung had colluded together to procure from him a very unfavourable settlement which was not enough even to cover his employee compensation entitlement, not to say his common law damages.  Their plan was for the defendant to firstly put him under financial difficulty by withholding from him part of his periodic payments payable under the Employees’ Compensation Ordinance.  This fact was proved by the evidence of outstanding payments from time to time.  The outstanding periodic payments as at 15 February 2004 was at about $10,200.  The outstanding increased to about $26,697 on 2 May 2004.

11.  After the plaintiff was put into financial difficulty, TRM then got in touch with the plaintiff at about the end of March 2004 and befriended him.  TRM then expressed to him that it was wrong for the defendant to withhold the periodic payments.  They promised to help. 

12.  The plaintiff went to TRM’s office in mid-April 2004.  A Miss Hou of TRM advised him to settle the claim with the plaintiff. 

13.  As a result of the intervention by TRM, the plaintiff got all his outstanding periodic payments from the defendant on 2 May 2006.  He applied part of the payments to clear his debts.  He also got his last two periodic payments in full through TRM though a few days later than the due days.  As a result TRM’s help, he developed trust and faith in TRM.  He therefore yielded to their undue influence and signed the Release which gave him very poor terms of settlement. 

14.  The intervention of TRM which produced a favourable result on the payment of periodic payments is not something that should be regarded as sinister.  Quite the contrary.  However, if such act was merely used to induce trust and faith in a person for the purpose of exploiting that person, that is a different thing.  I cannot tell at this stage if the terms of the settlements are good or bad.  I would also say that even if the terms are not favourable to the plaintiff, that does not necessarily mean that the plaintiff had accepted them as a result of duress and undue influence. 

15.  However, given the claim as made by the plaintiff in his affirmation, he is entitled to try to establish it by his own evidence as well as by cross-examination of the defence witnesses.  He is also entitled to make discovery of documents which are relevant to this claim and to seek discovery from the defendant on the same basis.  I therefore take the view that he is entitled to discovery of the documents as described in his summons.

16.  However, the defendant has already gone on oath to say that he never had any such document in his custody, power or possession.  I therefore would not order him to make such discovery. 

17.  Regarding the position of Wing Lung and TRM, I do not think I can require them to make discovery on the ground that Wing Lung is in charge of the defence and TRM was Wing Lung’s agent in dealing with the plaintiff.  Mr Lam for the plaintiff has referred me to Abu Dhabi National Tanker Company v Product Star Shipping Limited [1992] 2 All ER 20.  He also submitted that if the defendant, at the time of discovery, is merely a nominal party, I can require discovery from his principal Wing Lung.  I do not agree. 

18.  The plaintiff has sued the defendant.  Whether the conduct of the defence has been taken up by Wing Lung can have no effect on the plaintiff.  The defendant is still a defendant in every sense of the word despite the conduct of the defence is in Wing Lung’s hands.  I do not think the defendant is a mere nominee of Wing Lung.  He is subject to the full rigour of any order, direction or judgment that may be made against him in this action 

19.  However, as I have formed the view that the documents sought by the plaintiff are relevant, I would order Wing Lung and TRM to disclose them under section 42 of the High Court Ordinance and O.24 r.7A of the Rules of the High Court.  I would therefore make an order in terms of paragraph 2 of the plaintiff’s summons for discovery and I order Wing Lung and TRM to comply with this order in two clear days from today. 

20.  I would also deal with another argument of Mr Pang, counsel for the defendant, Wing Lung and TRM, which I do not accept.  Mr Pang said that these documents were subject to litigation privilege and thus not required to be disclosed.  He referred me to paragraphs 23-81 and 23-82 of Phipson on Evidence, 16th edition:

“The second category of legal professional privilege is wider than the first, but arises only when litigation is in prospect or pending.  From that moment on, any communications between the client and his solicitor or agent, or between one of them and a third party, will be privileged if they come into existence for the sole or dominant purpose of either giving or getting legal advice with regard to the litigation or collecting evidence for use in the litigation.  This is the basis for claiming privilege for correspondence with witnesses of fact or experts, and proofs, reports or documents generated by them.  The principle is that a party or potential party should be free to seek evidence without being obliged to disclose the result of its researches to the other side.  In Anderson v Bank of British Columbia, James LJ said: ‘As you may have no right to see your adversary’s brief, you have no right to see that which comes into existence merely as materials for the brief.’

In order for litigation privilege to apply, there must be a confidential communication between client and lawyer or lawyer and agent, or between one of these and a third party made for the dominant purpose of use in litigation: that is, to seek or provide information or evidence to be used in, or in connection with, litigation in which the client is or may become a party, and when litigation is either in process or reasonably in prospect.  Where a report is prepared by a third party such as an expert for the purposes of litigation, it will normally be privileged.  But this is not the case in respect of legal advice privilege.”

21.  The documents sought by the plaintiff did not come into existence for the sole or dominant purpose of either giving or getting legal advice with regard to litigation or collecting evidence for use in litigation.  Quite the contrary.  I do not think the documents sought are covered by this privilege.

22.  On the subject of costs.  Paragraph 24/7A/8 of the Hong Kong Civil Procedure 2007 states:

“The person against whom an order is sought under this Rule is entitled to his costs of the application and of complying with any order made thereon, unless the court orders otherwise.”

23.  Since the defence of this action, the application to stay and the application for determination of preliminary issue are all in the control of Wing Lung and Wing Lung has lost this application, I think I can exercise my discretion and order costs other than in the usual way.  I order the defendant to pay the plaintiff’s costs of this application up to and including his second affirmation filed on 15 February 2007 when he said he did not have the documents in question.  I further order Wing Lung and TRM to pay the plaintiff’s costs of this application up to and including today’s hearing.

24.  The plaintiff’s summons has also asked for an order to vacate the dates of hearing on 28 February 2007 and 1 March 2007.  However, Wing Lung and TRM have already collected the necessary documents and are ready to disclose them.  I therefore would not interfere with the hearing dates as fixed.  I of course do not preclude further application to vacate if made on solid grounds.