DAO HENG BANK LTD v. TAM SIU PING CHRISTINE AND OTHERS

HCMP5132/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.5132 OF 1998

----------------------

-----------------------

---------------------------

J U D G M E N T

---------------------------

This is an appeal against two orders made by Master Jones on 18th March 1999. By the first order the Plaintiff's application to produce certain documents pursuant to Order 24, rule 10 was dismissed. The dismissal was stated to be without prejudice to an application for specific discovery. By the second order the Defendants' application for the originating summons to be heard by a judge in court was also dismissed. The Plaintiff now appeals the first order and the Defendants appeal the second order.

1. Inspection of documents

Order 24, rule 10(1) states :-

" Any party to a cause or matter shall be entitled at any time to serve a notice on any other party in whose pleadings, affidavits or witness statements reference is made to any document requiring him to produce that document for the inspection of the party giving the notice and to permit him to take copies thereof."

The key words are "reference is made to any document". It is not necessary that the document be specifically identified or described in the affirmation, a general reference to the document will suffice. However a mere inference that the document exists is not sufficient, its existence must be "directly alluded to". The test is fully laid out at 24/10/2 of the Rules of the Supreme Court as follows :-

" Where a document is not specifically mentioned in an affidavit or pleading or witness statement, but an assertion made in the affidavit or pleading or witness statement gives rise to the inference that the document must or might exist, 'reference is made' to it in the affidavit or pleading or witness statement for the purpose of ordering its production only if, on the fair meaning of the words in their context, the document is directly alluded to in the affidavit or pleading or witness statement, and not if the reference arises merely by inference; accordingly, a mere opinion that on the balance of probabilities a transaction referred to in an affidavit or pleading or witness statement must have been effected by a particular document does not give the court jurisdiction to make an order under the rule for its production."

In this case a person named Kwan Chui Kuen has, on 26th January 1999, filed an affirmation asking to be joined as a Co-Defendant as she claims to have a beneficial interest in some of the properties of which the Plaintiff Bank is claming possession. She claims that her interest in the properties stems from the fact that in 1978 she won $800,000 on the Mark Six Lottery and she made certain investments with her winnings.

In support of its application the Plaintiff relies on the following passages in the affirmation :-

"5. After collecting the prize money, my husband then paid the prize money into his bank account with Hongkong Bank. In the year 1978, the prize money of HK$800,000 could then be regarded as quite a lot of money with substantial purchasing power. After receiving the prize money, my husband and I together discussed how best to invest the prize money.

Use of the Prize Money

6. After some discussion, my husband and I eventually decided to use the prize money for the following purposes :-

(1) about HK$180,000 to pay off the then mortgage on Flat A, 8th Floor, Hillview Court, Nos.30 and 32 Hillwood Road, Kowloon (named as the 5th Property in these proceedings) which was originally purchased in 1977 in the sole name of my husband for use and occupation by our family. The 10% down payment for the 5th Property was provided by my husband and myself roughly in equal shares.

(2) about HK$625,000 to purchase 5 urban taxis (each costing about HK$125,000) in the name of my 2nd son Tam Ho Keung for taxi rental and investment purposes without the necessity of any financing arrangements. ...

Town House, No.20, Sunderland Estate ('the 1st Property')

12. In early 1992, my daughter (Tam Siu Ping Christine) mentioned to me that she wanted to purchase the 1st Property at the price of about HK$7,300,000. She asked for my financial assistance to make the down payment of about HK$1,500,000 (about 20% of the purchase price). She also promised me that in return for my financial assistance, my husband and I could live at the 1st Property for the rest of our lives. The 1st Property being located at Kowloon Tong is a luxury property with far better facilities than the 5th Property."

The Plaintiff Bank then applied for the following documents for inspection :-

1. copy of bank statement, pay-in slip of bank account with Hongkong Bank and/or other evidence confirming the deposit of HK$800,000.00 referred to in paragraph 5 of the Affirmation;

2. copy of bank statement and/or other evidence showing the withdrawal of HK$180,000.00 referred to in paragraph 6(1) of the Affirmation;

3. copy of withdrawal slip, cheques, receipts and/or other evidence showing that half share of the 10% down payment for the 5th property referred to in paragraph 6(1) of the Affirmation;

4. copy of vehicle registration documents of 5 urban taxis referred to in paragraph 6(2) of the Affirmation;

5. copy of bank statements, pay-in slips, receipts and/or other evidence of financial assistance of HK$150,000.00 referred to in paragraph 12 of the Affirmation.

(The figure in item 5 should have read $1,500,000.00.)

It is plain that in the affirmation no reference is made to bank statements, pay-in slips, cheques or vehicle registration documents. The question is not whether their existence can be inferred but whether they have been directly alluded to.

It is plain that if $800,000 is put into a bank, a document evidencing that deposit must have existed. However, stating on affirmation that another person paid money into a bank is a far cry from a direct allusion that a specific document exists. It was, after all, 21 years ago.

The documents in relation to Items 1-4 would all be of similar age. Item 5 however refers to an alleged transaction about seven years ago. In this instance the alleged allusion to a document in the affirmation is more tenuous. It merely refers in paragraph 12 (and 13) to a request for financial assistance from her daughter and her agreement to make a loan.

Thus, the court's primary reason for dismissing the Plaintiff's appeal is that the test for applying the rule has not been satisfied. As stated in the learned Master's order the Plaintiff's right to make an application for specific discovery remains.

There is a second reason for not allowing the appeal. The Defendants failed to serve a counter-notice under section 10(2) and thereby objected to the application to produce documents. In these circumstances Order 24, rule 11 requires the Plaintiff to make the application for an order from the court to produce the documents. Such an application must be supported by an affirmation, inter alia, specifying or describing the documents pursuant to Order 24, rule 11(3). No such affirmation has been filed.

2. Hearing to be before a Master or a Judge?

This is a mortgage application. It is commenced by Originating Summons. Mr Li on the Defendants' behalf has referred me to a number of authorities which state that originating summons should be before a Judge. The cases he refered to were all Vendor and Purchaser Summonses. He conceded that usually mortgage applications were heard by a Master. He conceded also that the mere fact that it was contested was not a ground, per se, to place it before a Judge. His real ground therefore was that it was complex, there were eight or nine Defendants and involved a number of different properties. In spite of this, the estimates of time needed to hear the case by each side were similar. The Plaintiff's estimate was three hours, the Defendants' was one day. I am not persuaded that there are any sufficient reasons to transfer this case and I accordingly dismiss the Defendants' appeal against the order refusing a transfer.

The Plaintiff's appeal is dismissed with costs. The Defendants' appeal is dismissed with costs.