K&L GATES v. NAVIN KUMAR AGGARWAL

HCA 1061/2011 & HCA 349/2012
(Consolidated)
[2019] HKCFI 702

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1061 OF 2011

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 349 OF 2011

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(Consolidated by the order of
Deputy High Court Judge B Chu dated 10 July 2013)

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DECISION

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1.   These are two discovery applications issued in October 2015 against the various Defendants.

2.   There have been a series of discovery applications in this case.  The previous applications were taken out by the various Defendants against the Plaintiff, and these two are the ones made by the Plaintiff.

3.   I have handed down a detailed Decision on the previous applications on 27 November 2017 (“the Previous Decision”).  For the purpose of this Decision, I will adopt the same abbreviations and monoculture that I have used in the Previous Decision.

4.   The background of this case has been set out in §§2 to 13 of the Previous Decision, and I do not want to repeat the same here.

THE RELEVANT LEGAL PRINCIPLES

5.  I have also summarised the relevant legal principles on discovery application in §§15 to 24 of the Previous Decision.  I will adopt the same principles here.

6. Since most of the requests in the present applications relate to a class of documents, it is also well established that the class for discovery should not be defined or described too widely, and should not be defined so as to include documents which are not relevant.[1] Further, the class of documents must be classified by their nature, and cannot be described simply as documents going to a particular issue.[2]

7.  On the question of relevance, the following legal principles are also applicable for the purpose of the present applications:

(i)   Although relevance will primarily be determined by reference to pleadings, relevance of an issue cannot be dictated by a party unilaterally simply by importing it in the pleadings.[3]

(ii)   Thus, discovery is not required of documents which relate to irrelevant allegations in pleadings which even if substantiated cannot affect the result in the action.[4]

8.  After the hearing, I am given to understand that the relevant parties have agreed for the dismissal of the claim against the Melco Defendants.  The relevant parties have also confirmed that they do not require the court to give the decision on the discovery application vis-à-vis K&L Gates and the Melco Defendants.  Despite that, I agree with K&L Gates that the court should take into account the evidence filed in the applications involving the Melco Defendants in considering the other discovery applications against the Wynn and Venetian Defendants.

THE DOCUMENTS REQUESTED IN THE PRESENT APPLICATIONS

9.  The documents sought to be disclosed by the Wynn and Venetian Defendants are:

(i)   Documents pertaining to the Defendants’ business and/or the casino entities related to the Defendants and relationship between these entitles (“the Intra-Group Relationship Documents”)[5].

(ii)   Communications and documents, whether internally, with associated companies in the same group or other third parties, in relation to and/or arising out of the gambling activities of Aggarwal, including communications and documents pertaining to approval processes, policies, regulations, rules and applications and/or bank documents of the Defendants in relation to the remittances of money to and from the Defendants and/or casino entities related to the Defendants (“the Gambling Activities Documents”)[6].

(iii)   Communications and documents relating to regulatory/statutory compliance, anti-money laundering compliance, policies and procedures on the part of each of the Defendants and their related entitles the subject of this action (“the Compliance Documents”)[7].

10.  K&L Gates also requests the Wynn and Venetian Defendants to file a further and better list of documents (“the Further List”).

11.  Apart from the aforesaid, additional request is made against the Wynn Defendants for the discovery of the credit agreement dated 10 January 2010 referred to in certain Answers to Request for Further and Better Particulars[8]. This has been disclosed.  I assume that, because of the dismissal of the claim against the Melco Defendants, K&L Gates is not pressing for the document referred to in §1 of Schedule 2 of the summons against the Melco Defendants.

12.  K&L Gates has identified 5 broad issues as to why the requested documents are relevant to the determination of the claim:

(i)   Knowledge issue (“Knowledge Issue”): Did the Casino Defendants actually know, or ought they have known, that the monies Aggarwal paid to the Casino Defendants were not Aggarwal’s own money?

(ii)   Authority issue (“Authority Issue”): What was the relationship between the different defendants within the group?  On whose authority and on what basis were the moneys transferred between the different defendants within the group to allow Aggarwal to use these monies to gamble at the casino and/or to apply them to “settle” Aggarwal’s indebtedness to the casino arising from the gambling activities?

(iii)   Consideration issue (“Consideration Issue”): Did the Casino Defendants indeed provide valuable consideration in exchange for the monies they received?  Insofar as they allegedly provided credit to Aggarwal (which was not all the time), how, when, why and how much credit was provided?  How, when and how much of the misappropriated monies were applied to settle the credit allegedly extended, and by whom?

(iv)   Jurisdiction issue (“Jurisdiction Issue”): For the 10^th Defendant (“D10”) and the 11^th Defendant (“D11”) who deny that they were subject to the supervision of the Gaming Inspection and Coordination Bureau of Macau (Direcção de Inspecção e Coordenação de Jogos)(“DICJ”) at all, what was their relationship with their “associates”, i.e. the 14^th Defendant (“D14”) and the 9^th Defendant (“D9”)?  Did their dealing with the latter make them agents of the concessionaires or sub-concessionaires, such that they were likewise subject to reporting duties?  For the Casino Defendants who all deny they were obligated to make reports (“the JFIU Reports”) to the Joint Financial Intelligent Unit in Hong Kong (“JFIU”), whether or not they made such reports and why, or if they did not, why not.

(v)   Compliance issue (“Compliance Issue”): Regarding D14 and D9, who accept that they were licensed by DICJ but make no admission or deny their obligations to file any report, were they obligated to file any report with the DICJ or the Financial Intelligence Office of Macau (Gabinete de Informação Financeira)(“GIF”), and if so, what reports were filed?  Did they breach their reporting obligations?  What documents were generated leading to the submission of reports to DICJ?  In the case of the Casino Defendants incorporated in Hong Kong and/or had bank accounts in Hong Kong where the misappropriated monies were remitted (D10 and D11), did they breach their obligations to file reports to the JFIU?  What documents were generated internally leading to the submissions of reports to JFIU?  D10 has disclosed JFIU reports, but D11 have not.

13.  With these possible issues in mind, I then deal with the specific requests made by K&L Gates.

THE INTRA-GROUP RELATIONSHIP DOCUMENTS

14.  There is no dispute that the Wynn and Venetian Defendants received various remittances or transfers from K&L Gates (“the Transfers”): 3 transfers in the respective sums of $8 million, $3.6 million and $5 million in the case of the Wynn Defendants and the total sum of $36.4 million in the case of the Venetian Defendants.  These sums were either withdrawn by Aggarwal in gaming chip for gambling or were used to repay credits previously advanced by the casinos to Aggarwal.

15.  K&L Gates seeks to recover these sums of money from the Wynn and Venetian Defendants.  The basis of the claim is summarised in §10 of the Previous Decision.

16.  According to K&L Gates, it needs to obtain the Intra-Group Relationship Documents in order to ascertain the exact relationships between the various companies within the Wynn’s group and the Venetian’s group.  It is necessary because of the nature of the defence pleaded by these Defendants.

17.  According to Mr Coleman, SC, counsel for K&L Gates, the Intra-Group Relationship Documents would be relevant to all the 5 Issues.

18.  First, I must point out that the request is far too widely formulated to be a proper “class”.  Many documents covered by this class are plainly irrelevant. Documents concerning, say, the procurement of playing cards or the employment of croupiers would fall under this class, but can have no possible relevance to the issues in the case.  Further, the request would basically include every document relevant to Casino Defendants’ businesses, e.g. balance sheets, management accounts, tax returns, promotional materials, customer and hotel guest information, membership information, food and beverage operations.  It is clear that these documents cannot all be relevant.  Indeed the vast majority are plainly irrelevant.

19.  Mr Coleman cannot defend these criticisms.  In the course of his submission, he submits a revised schedule (“the Revised Schedule”) which does not contain any request for “documents pertaining to the Defendants’ business and/or the casino entities related to the Defendants and the relationship between these entitles”.  The only thing that resembles the earlier general request for Intra-Group Relationship Documents is Item A of the Revised Schedule which reads as follows:

“Documents which show:

(1) the authorization given by … … D9 to D11 and D14 to D10 to receive or pay money or act for and on behalf of the latter (or vice versa) in respect of the remittances caused to be made by/to Aggarwal to/from each of them separately; and

(2)the scope or type of services provided by … …  D11 to D9 (or casinos operated by D9), and D10 to D14 (or casinos operated by D14) in respect of the remittances caused to be made by/to Aggarwal to/from each of them respectively.”

20.  This is no application to amend the discovery summonses limiting the requests to the ones stated in the Revised Schedule.

21.  In the Previous Decision, I have applied the blue pencil test to revise some of the wordings of the original requests so as to narrow down the scope of the discovery.  Mr Coleman argues that the new formulated request is only a sub-set of the original request and so the court should likewise apply the blue pencil test to allow the revised request.

22.  In my judgment, it would be too far-fetch to ask the court to apply the same test to reformulate a totally different class of documents in respect of the Intra-Group Relationship Documents.  This is clearly a classic case of a sweeping class drafted without regard to whether all documents in the class would be relevant; or worse, an attempt to fish for irrelevant documents.  It is incumbent on an applicant for discovery to precisely formulate his request, and not cast the net widely and then say, at least some relevant documents will be caught.  Such kind of exercise should not be allowed.[9]

23.  I appreciate that, taking into account the unusual nature of the claim, some allowance should be given to K&L Gates for the difficulty in formulating a class with great precision.  However, the reformulated class in the Revised Schedule is totally different from the unnecessary wide formulation in the original request, and there is simply no justification for K&L Gates to have drafted the original class in such way.  For this reason alone, I refuse to apply the blue pencil test and disallow the general request for Intra-Group Relationship Documents.

24.  Even if the class was first formulated in the revised form, the result would be the same.

25.  As I understand it, K&L Gates is seeking discovery of two kinds of documents in the revised request: (i) documents relating to authorization in respect of remittances made by Aggarwal; and (ii) documents relating to the type of services provided by one defendant to another defendant within the same group regarding the remittances made by Aggarwal.

26.  First, I do not see the relevance of the documents relating to remittances other than the Transfers which are the subject matters of the claim.

27.  For the documents relating to the authorization in respect of the Transfers, this particular request will be dealt with in some length in the latter part of this Decision on the request relating to Aggarwal’s gambling activities.  The two requests overlap to a great extent.  I will adopt the same reasoning there in rejecting such request.

28.  For the documents relating to the type of services provided, I cannot see the relevance of further discovery.  As I see it, the relationships between the different defendants in the same group of casino are now clear from the pleadings and the documents so far disclosed by the parties.  Being casinos operated in Macau, the Wynn and Venetian Defendants have also given detailed accounts as to the roles of the different defendants in the operations.  Any further investigation in this area is simply a fishing expedition which is a waste of time.

29.  Further, though the relationships between the different defendants are mentioned in the pleadings, it is quite immaterial to the overall scheme of the litigation.  As to the Jurisdiction Issue and whether a particular defendant was subject to the Macanese regulatory regime, these are very much issues of Macanese law and the parties can make submissions at the trial based on the relevant statutory provisions.  I cannot see how these documents would affect the real issues that have to be determined at the trial.  This case has already gone into an advanced stage and witness statements have been exchanged, and so the court should focus on the main issues and not be distracted by unnecessary discovery which would only prolong the proceedings.  Hence, even if a case of marginal relevance can be made out, I will still exercise the discretion against such discovery.

THE GAMBLING ACTIVITIES DOCUMENTS

30.  This is serious confusion in the formulation of the requests relating to the Gambling Activities Documents.  The wordings used in the two summonses are different.  To summarize the requests under Items B, C and E of Schedule 1 of the summons against the Wynn Defendants and Items B & D of the Schedule of the summons against the Venetian Defendants, the requests cover basically documents relating to the gambling activities of Aggarwal (“the Gambling Activities Request”).  They also specifically cover documents “pertaining to approval processes, policies, regulations, rules and application and/or bank documents of each of the Defendants in relation to the remittances of money the subject of this Action” (“the Remittance Process Request”).  In the summons against the Venetian Defendants, the latter is formulated as a sub-set of the former.  In the summons against the Wynn Defendants, it is formulated as two separate requests.

31.  Both requests cover documents and communications whether internally, with other associated companies in the same group or other third parties.

32.  In the Revised Schedule, these requests are now contained in Items B, C and E.  The requests are in substance the same but with some minor amendments in the wordings.  As K&L Gates now accepts that the requests against the Wynn and Venetian Defendants are the same, it is difficult to understand why different formulations are used in the original summonses.  It only complicates the task of the court.

33.  According to my understanding, it is K&L Gates’ case that the Gambling Activities Documents are relevant mainly on the Knowledge, Authority and Consideration Issues.

(i)   The Remittance Process Request

34.  I first start with the narrower Remittance Process Request.

35.  I agree with Mr Man, SC, counsel for the Wynn Defendants, that the formulation is confusing and embarrassing. 

36.  There are 3 different parts to this formulation: (i) “communications and documents”; (ii) “pertaining to approval process, policies, regulations, rules and applications and/or bank documents of [the Defendants]”; (iii) “in relation to the remittances of money the subject of this Action” (presumably referring to the Transfers). This leads to many possible combinations and thus uncertainties.  Some of these combinations do not make sense.  It is not clear why there would be communications pertaining to the approval processes or regulations etc., or why they would be relevant.  Even more confusing is “communications and documents… pertaining to… bank documents of the Defendants in relation to [the Transfers]”.  In fact, bank documents relating to the Transfers have already been disclosed.

37.  In the Revised Schedule, Mr Coleman finally agrees to delete the reference to the bank documents.

38.  Second, the class is clearly too wide, too vague and imprecise to constitute a proper “class”.  The references to “policies, regulations, rules” are too imprecise.  Clearly not every rule and policy in relation to remittance of moneys would be relevant.

39.  Again, a sweeping class was drafted without regard to whether all documents in the class would be relevant.  As mentioned above[10], it is incumbent on an applicant for discovery to precisely formulate his request, and not cast the net widely and then say, at least some relevant documents will be caught.

40.  Third, I have serious doubt as to whether the documents requested are relevant to the issues in the present case. Even if one were to consider the internal policies of the Casino Defendants as to anti-money laundering matters or suspicious transfers, they are irrelevant to the issue of their knowledge as to the propriety of the Transfers.

41.  The question of whether the Casino Defendants had actual knowledge is a question of fact.  Either they had actual knowledge, or they did not.  It would not matter what the policies said. As to constructive knowledge, the internal policies do not represent the standard imposed by the general law as to what would amount to constructive knowledge of Aggarwal’s alleged wrongs.

42.  K&L Gates also seeks to justify the discovery on the basis of that being relevant to whether valuable consideration had been given by the Casino Defendants.  However, it is obvious that the Remittance Process Request, or indeed the Gambling Activities Request, has nothing to do with whether consideration had in fact been given by the Casino Defendants.  The discovery concerning that issue has already been given in the form of the markers issued to Aggarwal by the Casino Defendants as well as the various credit agreements and approvals made in favour of Aggarwal.

43.  Finally, substantial discovery has already been made by the Wynn and Venetian Defendants and K&L Gates has failed to prove the existence of other documents not disclosed.

44.  As for the Wynn Defendants, they have already disclosed the following documents relating to the Transfers and Aggarwal’s gambling activities: (i) remittance advices by banks, and internal records of remittance and receipt of funds from Aggarwal[11]; (ii) internal records (in the form of a table) of the transfer of funds from Aggarwal to the Wynn Defendants and out of them, and Aggarwal’s player history showing his gaming activities and his overall record against the casino[12]; and (iii) a credit report of Aggarwal by Central Credit LLC (“the Central Credit Report”)[13].

45.  As to why the Wynn Defendants eventually made a report to the Hong Kong Police, their solicitors had provided a detailed account in their letter to the Police dated 5 March 2010.

46.  Mr Jason Martin Schall (“Mr Schall), who is the Senior Vice President (Legal) of D14, has confirmed on oath that “the procedures of D14 in respect of third party transfer was not contained in the written anti-money laundering policy effective at the material times”.[14]  He has also explained that back in 2010, Wynn Macau was not required to conduct real-time enquiry in respect of third party wire transfers, though it would conduct retrospective reviews.[15]

47.  Mr Coleman submits that even if there was no written procedure, there would have been some guidelines or documents (contained in various documents, notes or memoranda) about how to handle remittances from third parties.  This, however, is just another way to describe a “written procedure”.   Plainly, Mr Schall’s confirmation must be conclusive.

48.  Mr Schall has also explained that it was just a matter of administrative convenience whether funds would be received by D10 or D14, and there were no procedure or policy governing fund transfers between them.  Further, the funds were transferred between them generally, and that no specific transfers was made from D10 to D14 in relation to the Transfers, as they were mixed in the general fund transfers and possibly formed part of a $50 million transfer on 14 January 2010 and a $100 million transfer on 24 September 2010.[16] Thus, there were no persons or documents that specifically dealt with the transfer of Aggarwal’s funds from D10 to D14.

49.  Mr Coleman also relies on the reference in the internal records of the Wynn Defendants to one “Eddie Tseng” (“ Mr Tseng”) to suggest that there are other relevant documents.   But as explained by Mr Schall, Mr Tseng was simply the former marketing officer who looked after Aggarwal’s account.[17] Indeed, it has also been confirmed that there is no record or document which shows that Mr Tseng dealt with the monies transferred by Aggarwal to D10 or D14, as he had no authority to deal with such funds.[18]

50.  Faced with this confirmation, Mr Coleman then suggests in its skeleton that there would probably be “reports, memoranda or notes” sent by Mr Tseng to his superior.  However, it has not been explained the basis why such documents exist.  Indeed, the internal records of the Wynn Defendants noted “refer to Eddie Tseng” rather than “refer to Eddie Tseng’s notes/reports etc”.

51.  K&L Gates also seizes upon the answer that Mr Tseng did not have authority to remit funds out of D10, and says that “someone else must have authority” and there should be documents regulating who had such authority.[19] For myself, I do not see how the question about who had authority, or the rules governing who had authority, would be relevant to the issues in this case.  Further, the Wynn Defendants have already confirmed that fund transfers between D10 and D14 were general and not specific to the Transfers. It has also been confirmed that there are no written authorisations dealing with the relationship between them.  Under such circumstances, there is simply no basis for K&L Gates to suggest that there are other relevant documents.

52.  As a further attempt, K&L Gates relies on the transfer remittance forms already disclosed and says that there should be other “internal communications, approvals, memoranda, notes and procedural forms”.[20]  But it is quite plain that any comments and accounting approvals were also marked on the same form, and K&L Gates has not explained any basis to suggest that there would be further documents.

53.  K&L Gates also refers to an obligation by D10 to maintain “books and records” under a Marketing and Secondment Services Framework Agreement made between D10 and D14.[21]  However, that Agreement only provides in general terms that D10 shall maintain “such books and records as may be required by the laws applicable to the jurisdiction” in which D10 operates.  This does not indicate that there are further relevant documents which have not been disclosed.

54.  K&L Gates also seeks discovery of documents relating to the credit committee of Wynn Macau (“the Credit Committee”) “to ascertain its remit, its scope of operations and policies, including minutes and memoranda”.[22]

55.  This is clearly not a legitimate request. The Wynn Defendants have disclosed an email dated 21 July 2010, which recorded the decision by the Credit Committee to stop granting credit to Aggarwal and to return any money not from Aggarwal’s own account, due to suspicions as to the source of Aggarwal’s funds.  It is plain that the general remit and policies of the Credit Committee is irrelevant, and K&L Gates is only conducting a fishing exercise hoping to find some materials to substantiate its claim.  As to the said email, Mr Schall has explained that the decision was his, which was endorsed by the Chief Financial Officer (“the CFO”), and there was no meeting involved in making the decision.[23] There is simply no basis for K&L Gates to challenge the Wynn Defendants’ confirmation by affidavit on this point.

56.  As to the Credit Committee, it is suggested that such committee would have minutes showing discussions about a patron’s credit status and “irregular remittances”.   However, it has not been explained why Aggarwal’s credit status (and D14’s view thereof) is relevant.  As to any discussion of “irregular remittances”, D14 has already disclosed the email dated 21 July 2010, which recorded Mr Schall’s decision to refuse further credit to Aggarwal following the various “irregular remittances”, which Mr Schall has explained.  K&L Gates has not put forward any basis why there should be other documented discussions on this topic.

57.  For the Venetian Defendants, all documents concerning the receipt and handling of the Transfers, and practically all documents concerning the “trail” of the Transfers up to the utilization by Aggarwal, have been disclosed.  Moreover, the Venetian Defendants have also disclosed, even before the present application, the internal policies on handling of remittances as well as the grant of facilities to Aggarwal in the 1^st and 2^nd Lists of Documents.  The exercise was completed by the filing of the 3^rd List of Documents, which disclosed all relevant internal policies concerning receipt of funds, grant of gambling chips and grant of credit, as well as all instances where credit was granted to Aggarwal.   In particular, the following documents have been disclosed: (i) the initial credit check of Aggarwal; and (ii) the credit check of Aggarwal on each occasion when he was granted credit in respect of which the Transfers were ultimately used to discharge his debts arising therefrom.^[24]  Finally, D9’s General Counsel (Litigation), Mr Alun Wyn Hughes (“Mr Hughes”), has confirmed on oath that all relevant documentation relating to the Transfers and the trail of funds have been disclosed.[25]

58.  K&L Gates tries to “nit-pick”, a word used by Ms Sit, counsel for the Venetian Defendants, on various items of documents already disclosed to try to salvage its “class”.  However, this is impermissible.  If K&L Gates has a genuine request in respect of a specific document, it should tailor its request accordingly, and not use an unacceptably wide request with a view to “catch” some documents.  In any event, the Venetian Defendants have already disclosed the policies for the grant of credit and credit patron classification, and I do see the need for further discovery which will help to resolve the issues in the present case.

59.  For the above reasons, I disallow the Remittance Process Request.

(ii)    The Gambling Activities Request

60.  I then turn to the broader Gambling Activities Request.  Again, I agree with the Wynn and Venetian Defendants that the request, whether in the original or revised form, is extremely wide and vague.

61.  First, the words “in relation to and/or arising out of” are words of the widest import, and include practically everything conceivable that may have anything to do with the gambling activities of Aggarwal.  As such, documents concerning the actual bets placed by Aggarwal (even in respect of the transactions involving the Transfers), all the bets ever placed by Aggarwal (whether they were concerned with the Transfers), which rooms Aggarwal slept in and even which restaurant he ate at whilst staying with the Casino Defendants to gamble, would fall to be disclosed.  Aggarwal had been a patron of D9’s clubs since July 2004 and the Wynn Defendants since November 2006, and so the documentation involved should have been substantial.

62.  Further, the present case concerns the recovery of the specific remittances and transfers made to the Casino Defendants, and it is hard to justify the discovery relating to all the gambling activities of Aggarwal without specifying the relevant periods.  As mentioned above[26], it is incumbent on an applicant for discovery to precisely formulate his request, and not cast the net widely and then say, at least some relevant documents will be caught.

63.  It seems that K&L Gates is really interested in documents relating to the due diligence conducted on Aggarwal and his credit worthiness. In its supporting affidavits, K&L Gates attempts to identify the documents that it seeks to obtain: (i) policies for the grant of credit to customers and classification of credit customers; (ii) the internal processing of remittances; and (iii) contacts made with other casinos concerning the credit worthiness of Aggarwal.  If that is the case, there is simply no point for K&L Gates to make such a wide and vague request in the first place.  It is also impossible for the court to reformulate the whole request using the blue pencil test.

64.  Even if the request was targeted against these documents in the first place, I would still refuse the request on the ground that K&L Gates has failed to show that there are other relevant documents not disclosed.

65.  As mentioned above[27], the Wynn and Venetian Defendants have already made substantial discovery about the gambling activities of Aggarwal.  Further, Mr Schall and Mr Hughes have both given detailed explanations about the process of granting and later denying credit facilities (the latter in the case of the Wynn Defendants) to Aggarwal, and how the Transfers were used to fund the gambling activities of Aggarwal and to relay credits previously advanced by the casinos to Aggarwal.  They have also explained why the Wynn and Venetian Defendants have disclosed all the relevant documents concerning the credit worthiness of Aggarwal.  There is simply no basis to suggest that there are other relevant documents which have not been disclosed.

66.  Whilst accepting that certain documents have been disclosed, K&L Gates suggests that “there has been no confirmation that what has been disclosed represents the entirety of all documents pertaining to [Aggarwal’s] account”.  However, it is wrong for K&L Gates to draft an impermissibly wide class and say that some documents within this class exist, and ask the Casino Defendants to confirm that there is nothing else in such a class.  It is not the function of such an application to allow the applicant to check whether his opponent has given sufficient discovery, and the burden is on the applicant to show that there are other relevant documents not disclosed.[28]

67.  As against the Wynn Defendants, K&L Gates say that there must be records and documents in relation to their decision to continue giving credit to Aggarwal from January up to July 2010.  However, Mr Schall has given a detailed account about the process.

68.  Mr Schall was the person who decided in July 2010 to stop Aggarwal’s credit.  He has explained that Aggarwal had a pre-existing credit line, and until this was terminated in July 2010, no decision would be required to give Aggarwal fresh credit.  As to the discussion between Mr Schall and the CFO about this decision, Mr Schall has explained that he made the decision and relayed the suggestion to the CFO, who had no objection and sent out the email dated 21 July 2010.  He explained that the “decision” by the Credit Committee was really this discussion between him and the CFO.  He confirmed that there are no other written records or communications in relation to the credit given to Aggarwal.

69.  As to the “internal review” referred to in Mr Schall’s Witness Statement which led to the report to JFIU[29], Mr Schall has in fact confirmed that there was “no report, internal communications, attendance note and the like regarding [his] instructions to file the reports”[30].

70.  Mr Schall explained that there are no other documents.  There is nothing to contradict such assertion.  This must be conclusive and it is not for K&L Gates to speculate that there must be other documents or written communications.

71.  K&L Gates also refers to due diligence documents regarding Aggarwal’s position as a partner of K&L Gates, and documents of internal discussions as to the making of reports to JFIU. However, Mr Schall has confirmed that he made the decision to make the reports solely, and that he did not conduct any internet searches, write internal notes or send emails, whereas any discussion with lawyers would be privileged.[31] K&L Gates criticizes the process, but that has nothing to do with whether there should be other documents to be disclosed.  At most it is a matter for trial.

72.  As to the possible existence of third party communications, K&L Gates relies on the gaming report in respect of Aggarwal prepared by Central Credit LLC for the Wynn Defendants and asserts that: (i) there exists “a convention” of casinos communicating with each other in relation to their patrons and their credit worthiness; and (ii) the casinos were communicating with each other to ascertain Aggarwal’s activities and funding, and as such, all of them would have knowledge of Aggarwal using K&L Gates’ money to gamble at various other casinos.[32]

73.  However, there is no basis to support these assertions. As explained by the Wynn Defendants, Central Credit LLC is an agency based in the United States which gathers information of players from major casinos to allow the casinos to share credit information.[33] This does not provide any basis to suggest that any inter-casino communications such as “emails, correspondence, notes, reports, forms, memoranda” exist. Plainly, the whole point is that the sharing of information occurred through the credit agency.  Much less does this show that all information in relation to a patron, including his source of funds, would be provided to the information collecting agency. The gaming report itself does not contain such information.  As explained by Mr Schall, the main purpose of such reports is to provide information as to a patron’s credit status, whether he owes money to other casinos and whether his balance has been settled.[34]

74.  In any event, the Wynn Defendants have confirmed on oath that there was no such written communication in relation to Aggarwal, and no note, report or other similar documents on the subject other than the report disclosed.^[35] Mr Schall drew a distinction between a patron’s gambling activities and funding (which is not something that would be shared) and credit intelligence (which is often shared), and what he said was that generally, there would rarely be written communications about credit intelligence.  Mr Schall then specifically confirmed that in relation to Aggarwal, there was “no written communications” with other casinos “whether as to credit, source of funds or otherwise”, and there was “no note, report or the like” other than those already disclosed.[36]

75.  To salvage this request, K&L Gates says that Mr Schall has not disclosed or confirmed the existence or otherwise of “communications which led to the making or requisitioning of a Central Credit LLC report”.[37] It is not clear why such communications would be relevant or necessary.  Further, this is moving the goalposts, as such “communications” (which cannot be communications with other casinos in light of Mr Schall’s confirmation) do not even fall within the class as formulated.

76.  Then K&L Gates tries to rely on documents disclosed by other casinos (D13) to suggest that there were verbal communications between D14 and other casinos on Aggarwal.

77.  Again this cannot salvage the application.  Such documents have never been relied on by K&L Gates as evidence in the discovery application. It cannot simply insert other documents into the hearing bundle and rely on the same as evidence in the application.  More importantly, verbal communications cannot be the subject of a discovery application.

78.  As against the Venetian Defendants, Mr Coleman relies on the handwritten annotations in the “gaming reports” prepared by Central Credit LLC for D9, as well as the internal “Preferred Patron Call Log” to argue that there must be documents in existence which record the communications with other casinos that resulted in such compilation.   However, it is clear that the documents are titled “Preferred Patron Call Log”, indicating it is a record of telephone calls made by D9 to other casinos to gather the information recorded therein.  The information in the call log was then transposed, by hand, into the Central Credit LLC report.  As such, there is no basis for K&L Gates to allege that there exist other documents which the Venetian Defendants have not disclosed.

79.  Hence, in light of the excessive width and the vagueness of the Remittance Process and Gambling Activities Requests, the lack of relevance and the substantial discovery already made, it is clear that these requests are not necessary for the fair disposal of the matter or for saving costs.  The wide and open-ended nature of the requests, in the context where all relevant and conceivably relevant discovery has already been given, will only occasion oppression to the Wynn and Venetian Defendants.  Further, it is incumbent upon K&L Gates to properly draft and specify any class of documents it seeks.  Plainly, K&L Gates has failed in such duty.  The fact that it can later in the supporting affidavits identify the specific documents requested only shows that the original requests have been drafted unreasonably wide.

80.  Further, this is a classic case of a fishing expedition.  Without knowing the details of the operation of the casinos, K&L Gates wishes to find some communications or documents which might have alerted the Casino Defendants about the unlawful activities of Aggarwal.  However, extensive discovery and explanations have already been given by the Wynn and Venetian Defendants, and so any further discovery can only be regarded as a fishing exercise.  I therefore refuse the request for Gambling Activities Documents.

THE COMPLIANCE DOCUMENTS

81.  The request for the Compliance Documents is one of the main battlefields between the parties. In the Revised Schedule, K&L Gates has revised the class to cover “communication and documents (including internal documents) relating to regulatory/statutory compliance, [anti-money laundering] compliance on the part of each of the Defendants in relation to and/or arising of the gambling activities of Aggarwal”.  According to K&L Gates, the Compliance Documents are relevant to the Knowledge, Jurisdiction and Compliance Issues.

82.  Apart from the knowing receipt and the money had and received claims, K&L Gates is also bringing a breach of duty claim against the Casino Defendants for failing to make certain reports to the relevant authorities in relation to the Transfers^[38], including:

(i)   the “ROVE”^[39]report (“the ROVE Report”) for any bets or gaming credit taken out exceeding MOP 500,000, which may be filed with DICJ; and

(ii)   the “RTS”^[40]report (“the RTS Reports”) for suspicious transactions, which may be filed with GIF.

83.  It is alleged that if timely reports had been made, police investigation would have commenced, and Aggarwal’s fraud would have been “intercepted, prevented, or curtailed”.^[41]

84.  It is to be noted that the Wynn Defendants actually made a report to the Hong Kong regulatory authorities which eventually led to the arrest of Aggarwal.  According to the Wynn Defendants, they did not consider there to be any real risk that the Transfers came from stolen monies.  Nevertheless, out of caution, D10 reported each of the Transfers, so far as they relate to the Wynn Defendants, to JFIU by way of 3 reports dated 5 March, 15 and 22 July 2010 respectively.

(i)   Width of the request and relevance

85.  First, I agree with the Wynn and Venetian Defendants that the original request is simply too wide.  To begin with, the class covers “documents relating to regulatory/statutory compliance”.   The Casino Defendants could be subject to many different regulatory regimes, including, e.g. tax, business registration, food and beverage licenses, etc., and I cannot see how those documents relating to other statutory regimes are relevant in the present case.  Further, this class is not formulated by reference to the Transfers.

86.  In the Revised Schedule, Mr Coleman has narrowed down the request to the documents relating to the gambling activities of Aggarwal.  However, the request is still too wide as it would cover documents relating to all sorts of statutory regimes which concern the gambling activities of Aggarwal, for example, tax papers arising from the gambling activities of Aggarwal.  Further, the words “in relation to and/or arising out of the gambling activities” simply cast the net too wide.

87.  K&L Gates tries to limit the scope of the request in the affidavits.  It is suggested that this class of documents relate to the Casino Defendants’ reporting obligations to make reports to regulatory authorities in Macau, i.e. GIF and DICJ.  It includes the ROVE and RTS Reports and the underlying documents which caused the creation thereof.  If so, the proper approach would have been to draft a request along those lines, and not to have an open-ended category which serves no real purpose other than fishing.

88.  Second, I have great reservation as to whether the class of documents, whether in the general form or in the trimmed down version concerning the ROVE and RTS Reports, are relevant at least in respect of the Jurisdiction Issue.

89.  K&L Gates claims that each Wynn and Venetian Defendants owed it a duty to make the reports to, inter alia, DICJ and GIF, and had failed in such duty.

90.  For the Venetian Defendants, D9 admits that it had filed ROVE Reports but denies that there were facts or matters as to warrant filing of RTS Report at the time.  On the other hand, D11 denies being subject to the requirements of ROVE or RTS Reports altogether. Thus, the position is clear on the pleadings.  D9 had filed ROVE Reports but not RTS Report at the time of the Transfers, and D11 had filed neither.  It is then up to K&L Gates to demonstrate at trial that: (i) D9 owed the duty as alleged vis-à-vis K&L Gates; (ii) D9 had breached that duty with respect to RTS Report; (iii) D11 was subject to the jurisdiction of DICJ or GIF, both Macanese authorities; (iv) D11 owed the duty as alleged vis-à-vis K&L Gates; and (v) D11 had breached that duty with respect to ROVE and RTS Reports.

91.  These are all issues of law as well as Macanese law.  How and why ROVE Reports were generated by D9 have nothing to do with them.  Accordingly, the ROVE Reports or their underlying documents have nothing to do with the live issues between the parties.

92.  For the Wynn Defendants, it is D10’s case that it was not subject to the jurisdiction of DICJ and GIF, and it would not have made any ROVE or RTS Reports.  The issue only relates to D14, who accepts that it is subject to the supervision of DICJ.

93.  So far as the Jurisdiction Issue is concerned, whether D10 and D11 are subject to supervision of the Macanese regulatory authorities are matter of Macanese law.  It is clear that the contents of the ROVE and RTS Reports have nothing to do with at least the Jurisdiction Issue.

(ii)    Necessity for the fair disposal of the case

94.  More importantly, neither the discovery of the ROVE or RTS Reports would be necessary for the fair disposal of the case.

95.  Mr Man has correctly pointed out that K&L Gates is adopting an inconsistent stance as to the existence of the ROVE or RTS Reports in relation to the Casino Defendants.  Its pleaded case, as verified by Statement of Truth, is that the Casino Defendants failed to make such reports.  Yet in the discovery application, K&L Gates criticizes the Casino Defendants for not having made discovery of the ROVE or RTS Reports.  This can only be on the basis that such reports exist but are not disclosed.

96.  K&L Gates’ stance is therefore convoluted and inconsistent. If it accepts that such reports exist, then the basis for its whole case on the failure to make reports to the Macanese authorities would be gone.  If it maintains its case that such reports do not exist, then the case for discovery is not made out.

97.  Mr Coleman submits that, since it is the pleaded case of the Wynn and Venetian Defendants that D14 and D9 had filed the necessary reports in fulfilment of their reporting obligations, the contents of the ROVE and RTS Reports filed by these Defendants are relevant.  Further, the reports would also show when these Defendants did have knowledge of the suspicious activities of Aggarwal, and that would be relevant to the determination of the knowing receipt claim.

98.  I first deal with the Knowledge Issue.  It has all along been K&L Gates’ case that the Casino Defendants, at the time when they received the Transfers, knew or should have known that such Transfers were not Aggarwal’s own money because the relevant cheques came from K&L Gates’ client account.  For the knowing receipt claim, the main focus of the investigation is whether the Casino Defendants did have knowledge when they received the Transfers, and so the subsequent reports filed by the Casino Defendants would not help the court in determining such issue.

99.  Further, it is clear that the ROVE Reports were filed on the basis of the amount of the bets and not by reason of the suspicious activities of the casino’s clients.  Hence, the ROVE Reports would hardly be relevant to the Knowledge Issue.

100.  For the breach of duty claim, the discovery of the actual ROVE and RTS Reports is unlikely to be of significant impact to K&L Gates’ case.  In order to establish causation for the breach of duty claim, K&L Gates would have to prove that, had the Macanese regulatory authorities received the ROVE and RTS Reports earlier, they would have taken certain measures leading to the arrest of Aggarwal.  I imagine that the regulatory authorities would have received voluminous reports from the casinos each day, and K&L Gates would then have to tell the court how the authorities would have handled and acted upon those reports.  Unlike what happened in Hong Kong in respect of the JIFU reports, the court cannot assume that once the reports had been made, the Macanese regulatory authorities would have taken immediate actions.  Without knowing the operations of the Macanese regulatory authorities and how they conduct investigation of money laundering activities, it is impossible for K&L Gates to prove that, had the Casino Defendants made the reports earlier, it would have led to the arrest of Aggarwal soon thereafter. 

101.  This case has gone into an advanced stage and witness statements have been exchanged.  According to my understanding from Mr Coleman, it is extremely unlikely that K&L Gates will adduce evidence relating to the operational procedures of the Macanese regulatory authorities.  Further, taking into account the stance of the authorities as stated in the DICJ Letter mentioned below, it is quite impossible for K&L Gates to obtain supporting evidence in this regard.  Under such circumstances, the probative value of the actual ROVE or RTS Reports is marginal, and the court should not therefore order discovery of such reports as they would not seriously affect the result of the case.

(iii)    The risk of sanction by the Macanese regulatory authorities

102.  Even if I am wrong on the aforesaid analysis, I will still exercise my discretion in not allowing the discovery of the ROVE and RTS Reports, as there is serious risk of sanction by the Macanese regulatory authorities in the case of such disclosure. 

103.  In law, the fact that compliance with a disclosure order sought will or may entail a breach of foreign law is not an absolute bar to discovery, but is a relevant consideration for the court in determining whether disclosure should be ordered as a matter of discretion.[42]  This is because the privilege against self-incrimination is not available in respect of criminal liability under foreign law.[43]

104.  There is no clear guidance in the authorities as to how the discretion is to be exercised.  It appears that an important factor is whether the party from whom discovery is sought faces a real risk of prosecution in the foreign jurisdiction.[44]  The test is whether there is reasonable ground to apprehend danger.[45]

105.  There is expert evidence on Macanese law from 3 different experts before the court: Mr Jorge Menezes (K&L Gates’ expert), Mr Nuno Simoes (the Wynn Defendants’ expert), and Mr Henrique Saldanha (the Venetian Defendants’ expert).

106.  The experts have not been required to give oral evidence or be cross-examined at the present hearing.  The court is therefore faced with their conflicting evidence (so far as there is conflict) in the written reports. Insofar as the court is required to resolve the disputes, the court would have to do the best it can, and such a situation would call for a “careful, balanced analysis”, and a legitimate consideration may be the way in which the respective expert reports are argued.[46]

107.  In the context of the discovery application, the question for the court is whether there is a real risk that a discovery order would in effect compel the Wynn and Venetian Defendants to breach the Macanese law, and if so the court would be entitled to take this into account.  It follows that the court is not required to finally resolve the dispute between the experts.

108.  It is common ground between the experts that there is a prohibition against the disclosure of the contents or information contained in the ROVE and RTS reports.[47]

109.  It is accepted by all the experts that the applicable law is found in Law No. 2/2006, Article 7(4) & (5).  Further, in Instructions No. 2/2006 issued by DICJ, §10.1 states that the information in ROVE and RTS Reports would be classified as confidential.  §10.2 specifically states that the persons subject to the Instructions cannot communicate the filing of RTS Reports to any other persons or entities.

110.  It is common ground that a breach of Art 7(4) of Law No.2/2006 may lead to the following sanctions:[48]

(i)   A fine of MOP$10,000 to MOP$500,000 for individuals, and MOP$100,000 to MOP$5,000,000 for legal persons under Administrative Regulation no.7/2006.

(ii)   There may also be criminal liability under Art 348 of the Criminal Codefor violation of secrecy, albeit this only applies if there is an intention to benefit or consciousness that this would cause loss to the public interest or another person.

111.  The persons who may be liable for the above sanctions would include the Casino Defendants and their employees.[49]

112.  These kinds of statutory provisions do have serious public interest implications.  In order to effectively tackle the crime of money laundering and to encourage the provision of information to the regulatory and law enforcement agencies, it is essential to protect the confidentiality of such kind of reports.

113.  There seems to be a dispute as to whether the disclosure of the internal documents of the Casino Defendants relating to the existence of a ROVE or RTS Report is unlawful, as K&L Gates’ expert argues that such secondary documents can be disclosed.  However, since the purpose and effect of the statute is to prohibit the information and existence of ROVE and RTS Reports to be disclosed, it should follow that secondary evidence of the existence or contents of the reports cannot be disclosed.  Further, it is very difficult to see how there could realistically be internal documents which only relate to the existence of ROVE or RTS Reports for a particular transaction, but not the contents of such reports.  Hence, I prefer to accept the expert evidence of the Wynn Defendants in this regard.

114.  One of the main disputes between the experts is whether the Casino Defendants’ compliance with a court order for disclosure would fall within one of the exceptions prohibiting disclosures of the ROVE or RTS Reports.  K&L Gates’ expert suggests that the purpose of the confidentiality provisions is to protect the secrecy of the criminal investigation and the privacy of a defendant.  Thus, the confidentiality provisions do not apply now since several years have passed since Aggarwal’s arrest and conviction in Hong Kong, that Aggarwal was not under any confidential criminal investigation or proceedings in Macau, that the relevant facts have been revealed in the Hong Kong criminal proceedings.

115.  However, there is no express exception provided for in the said provisions, and so what K&L Gates’ expert is asking the court to do is to read a whole new sub-paragraph of exception into Article 7 to the effect that the prohibition ceases to have effect when the relevant criminal investigation is completed.  Apart from his personal opinion, I find no basis to support such exception.

116.  In fact, such kind of confidential documents may shed light as to how the Macanese authorities would investigate money laundering activities and the details of their operations.  They may also reveal the criteria and circumstances under which the casinos would make a report of suspicious activities to the law enforcement agency, which, if made public, may affect the efficiency in policing money laundering activities in Macau.  In the case of disclosure, it may also discourage the casinos to provide similar information in the future.   The information in the ROVE and RTS Reports may therefore remain sensitive even after the completion of the investigation works.  Hence, in the absence of precedents, it would be dangerous to improvise an exception for the purpose of this case.

117.  More importantly, the court cannot ignore the view of the DICJ about the confidentiality of the ROVE and RTS Reports, and there is a real risk of sanction being applied against the Wynn and Venetian Defendants if they disclose any reports as a result of a discovery order by this court.

118.  On 28 November 2016, the DICJ had written a letter to D14 (“the DICJ Letter”), in which the DICJ cited various statutory provisions and reinstated the confidential nature of the ROVE and RTS Reports.   DICJ also directed that, if D14 comes to be notified by the court to disclose any such reports, it shall refuse to do so, otherwise it would be subject to the penalty of the applicable administrative and criminal responsibility.  In effect, the DICJ agrees with the views on the law expressed by the experts of the Wynn and Venetian Defendants.

119.  The DICJ Letter strongly suggests that DICJ would take steps to investigate or prosecute or refer to authorities or apply sanctions against the Casino Defendants in the case of disclosure. 

120.  Such views of DICJ are particularly important given that it is the regulatory authority overseeing casinos in Macau, and that it is authorised to issue directives regarding anti-money laundering and anti-terrorism measures (which is the DICJ Instruction).  Such directives represent how the relevant authorities would likely enforce the relevant legal provisions.  Based on such express view indicated in the DICJ Letter, there is real risk of enforcement if the Wynn and Venetian Defendants are to make discovery even pursuant to an order of the Hong Kong court.

121.  K&L Gates’ expert tries to discredit the DICJ Letter by arguing that DICJ is a mere supervisory body and has no authority to classify documents as confidential or to authorise or prohibit disclosure of information, or to provide legal advice, or to apply any sanctions.

122.  However, I prefer to accept the views of the DICJ and the experts of the Wynn and Venetian Defendants in this regard.  DICJ was specifically given authority to set out directives on how to comply with Law no. 2/2006.  It is also common ground that part of the DICJ’s function is to “evaluate and sanction incompliance with the substantive and procedural applicable laws, the administrative breaches committed”, as provided in Article 2(9) of Administrative Regulation no. 34/2003.  The fine under Administrative Regulation no.7/2006 is precisely an administrative sanction for breaching Art 7(4) of Law no. 2/2006.   Hence, the risk of sanction is real.

123.  Furthermore, the regulatory dimension is also important.  As explained by the expert of the Wynn Defendants, DICJ is the regulatory authority on gaming matters, and acting against the views and instructions of DICJ can cause operational issues and prejudice to the Casino Defendants, especially when it comes to the renewal of their gaming concessions. This is a major risk to the Casino Defendants if they act against the instructions of DICJ.[50] Specifically, breach of the relevant laws and administrative sanctions may affect whether the Casino Defendants or their employees are considered “suitable” person to hold the gaming concession.[51]  It follows that an order compelling disclosure would in practice cause great prejudice to the Casino Defendants.

124.  Mr Coleman argues that the risk of sanction is speculative as ROVE Reports had been disclosed by other Casino Defendants (i.e. the 3^rd and 12^th Defendants) with no follow-up actions taken against them.  However, I do not accept such submission in light of the clear stance of the Macanese regulatory authorities stated in the DICJ Letter.

125.  For the above reasons, I prefer to accept the evidence of the Wynn and Venetian Defendants’ experts on Macanese law.  In fact, it is not necessary for the court to resolve the difference in opinion between the experts, for all the court needs to be satisfied for present purpose is whether there is reasonable ground to apprehend danger.  Based on the existing evidence, there are more than sufficient materials to support the existence of such danger. 

126.  K&L Gates relies on the case of Wynn Resorts (Macau) SA v Mong Henry[52] to argue that no weight should be placed on the DICJ Letter.  However, the context of Mong Henry is very different.  In that case, the court entertained substantive argument of Macanese law in a summary judgment application on whether a statute only covered credit agreements between casinos and junkets, or extend to those between casinos and patrons generally.  In making her determination, Chu J (as she then was) considered but did not place decisive weight on 2 documents emanating from DICJ which were clearly not directly on point.[53]  On the other hand, in this case, on the face of Art. 2(1) and 9 of Reg n^o 7/2006 and the DICJ Letter, one cannot simply say there is no appreciable risk of sanction resulting from the disclosure of the reports.

127.  Nor does the case of China Medical Technologies Inc (Joint Liquidators) v KPMG[54] assist.  All parties accepted in that case that there was no longer any risk of contravening Mainland secrecy laws or any issue of confidentiality arising from the “sensitive information”.  That is very different from the present case.

128.  Real risk of sanction is an important consideration for the court in exercising the discretion whether to order discovery of the ROVE and RTS Reports.  Taking into account such risk and other factors as mentioned above such as relevance, necessity for the fair disposal of the case and the marginal probative value of the reports, I will exercise my discretion against the discovery of such reports.

(iv)    Documents apart from the ROVE and RTS Reports

129.  In its supporting affidavits, K&L Gates refers extensively to “regular meetings” in relation to the requirements and internal controls relating to money laundering activities, DICJ audits, “procedures in relation to high value and suspicious transactions”, code of business and ethics, training modules relating to anti-money laundering etc.  This is impossibly wide and K&L Gates has made no attempt to identify what the relevant documents are.  It is difficult to understand why documents such as DICJ audits and code of business conduct and ethics are relevant to the issues in this case.

130.  K&L Gates also suggests that there should be internal communications in relation to the reports made by D10 to JFIU.  However, as mentioned above, Mr Schall has confirmed that he alone made the decision to make the reports.  He had not involved other staff, and there are no other internal communications, reports or attendance notes.

131.  As to the “Anti-Money Laundering and Procedures” of the Casino Defendants, as explained above[55], whether it has been breached is not relevant to any issues.

132.  For the above reasons, I refuse the request for the Compliance Documents.

133.  It is also clear that there is no basis for the court to order the Wynn or Venetian Defendants to file a Further List.

CONCLUSION

134.  Based on the aforesaid analysis, I dismiss both discovery summonses against the Wynn and Venetian Defendants.  It is clear that the requests have not been formulated properly.  They were drafted in the widest possible terms with a view to catch some relevant documents.  In the subsequent affidavits, K&L Gates was able to identify some specific targeted documents.  If those are the documents sought to be disclosed, there is no justifiable reason as to why the original class was formulated so wide.  All the requests can be dismissed on this ground alone.

135.  Further, substantial discovery has been made by the Wynn and Venetian Defendants, and K&L Gates has simply failed to prove the existence of other documents not disclosed.  After the Wynn and Venetian Defendants have given detailed accounts of their operations relating to Aggarwal’s gambling activities, K&L Gates always moves the goal posts and tries to salvage the applications by pointing to other possible documents. This would not be fair to the Wynn and Venetian Defendants considering the excessive width of the original requests.  The submission of the Revised Schedule in the course of the argument only reinforces the fact that the original requests were formulated too wide.

136.  ROVE and RTS Reports are always sensitive documents.  With a view to find some materials to substantiate its claims, K&L Gates is trespassing into an area which will jealously be guarded by regulatory and law enforcement agencies about the confidential reports provided by informants.  For the reasons given above, I do not consider it appropriate to order discovery of these reports.

137.  I also make a costs order nisi that the costs of these 2 summonses be paid by K&L Gates to the Wynn and Venetian Defendants with certificate for two counsel, which shall be made absolute 21 days after the date of the handing down of this Decision.