FENN KAR BAK LILY AND ANOTHER v. MATTHEW CHAN AND ANOTHER

HCPI 402/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 402 OF 2008

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D E C I S I O N

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1.  On 11 June 2005, a private helicopter piloted by the 1^st defendant on a recreational flight fell about 10 feet to the ground after an unsuccessful attempt to take off. The 1^st plaintiff, a practising solicitor and senior partner of a law firm, was a passenger on board the helicopter and sustained an injury to her back. She claims damages for personal injuries in this action in which interlocutory judgment for damages to be assessed has already been entered.

2.  The 1^st plaintiff returned to work some 3 months later.  In their joint orthopaedic report dated 3 March 2009, Professor Kenneth Man Chee Chung, engaged by the plaintiffs’ solicitors, and Dr Danny Tsoi Chi Wah, engaged by the defendant’s solicitors, expressed the joint opinion that “Ms Fenn was able to return to work and engage duties at the law firm.  Both parties agreed that she may experience back pain during her daily work.  It is estimated that she may need to rest for 10-15 minutes after continuous desktop work for 2-3 hrs.  Her working hours need not be limited to 9:30 a.m. to 5:00 p.m.”. 

3.  The 1^st plaintiff claimed a very substantial sum in excess of $70m in the Statement of Damages served on her behalf.  In her Revised Statement of Damages dated 10 February 2011, she still claimed a very substantial sum in excess of $35m.  The bulk of this claim, in excess of $30m, is said to be made up of pre-trial and future financial losses. 

4.  How did the 1^st plaintiff, who was able to return to full-time work shortly after the accident with minimal reduction in her working efficiency, suffer these very substantial losses?  The 1^st plaintiff is the majority equity partner in her firm, holding on average over 90% of the equity from the time of the accident up till the present.  It was her intention to sell her equity at fair market value on her retirement.  She was 46 years old at the time of the accident, and she will be 53 years old in August this year.  The 1^st plaintiff explained in her Revised Statement of Damages that she suffered these substantial losses because her expansion plans for her firm were wholly frustrated by the occurrence of the accident.  She claims almost $11m, being her share of the loss in the net cash flow of her firm, between the time of the accident to December 2011, the notional date of trial.  She pleaded in §93 of her Revised Statement of Damages that, but for the accident, the net cash flow of her firm for this period would have been $14,137,000, and that, given the accident, the actual net cash flow for this period will only be $1,951,000. 

5.  She claims future financial losses in the sum of almost $20m on the basis that the value of her firm, but for the accident, was $33,200,000 but that its value, given the accident, was only $11,500,000 resulting in a diminution in value of $21,700,000.  Her 92% share of this value amounted to $19,900,000.  No discount has been offered for accelerated receipt of this alleged future loss.

6.  Given these very substantial claims, it is not surprising that the 1^st defendant’s solicitors sought discovery of the books and accounts of the 1^st plaintiff’s firm.  On 27 July 2009, they took out a summons for specific discovery of the following documents, set out in the schedule to the summons :

“Schedule

(a) Bank statements or passbooks of the 1^st plaintiff for the period from June 2002 up to date

(b) Tax returns filed by or on behalf of the 1^st plaintiff during the years of assessment 2002/2003, 2003/2004, 2004/2005, 2005/2006, 2006/2007 and 2007/2008

(c) Notice of Assessment and Demand for Tax issued to the 1^st plaintiff for the years of assessment 2002/2003, 2003/2004, 2004/2005, 2005/2006, 2006/2007 and 2007/2008

(d) Copies of all professional fee billing/invoices issued by Lily Fenn & Partners (‘LFP’) since January 2004 to December 2007, including all detailed breakdown or narrative of time costs and expenses

(e) List of billing of Partners ‘A’, ‘B’ and ‘C’ of LFP since its inception in 2002 (and the date when they joined LFP) to 30 April 2004

(f) List of billing of other fee earners (consultants, partners and assistant solicitors) of LFP since its inception in 2002 to 30 April 2008

(g) Audited accounts, profit and loss accounts, balance sheets of LFP for the years ending on 30 April 2003, 2004, 2005, 2006, 2007 and 2008

(h) All Management Accounts for LFP for the financial years ending on 30 April 2003, 2004, 2005, 2006, 2007 and 2008. Among other items these will identify billable hours, billings, professional fees received, net fees by client partner, introductions by client partner, expenditure, profit and loss account (including staff hiring expenses and staff costs, premises expenses, IT expenses, facilities, transport, insurance, practice development and business travel etc), bank and other debtors

(i) Copies of the ledgers, which were used by the auditors and/or accountants for LFP when auditing LFP’s accounts, for the financial years ending on 30 April 2003, 2004, 2005, 2006, 2007 and 2008

(j) Copies of the ledgers of all the operating expense accounts for the years ending on 30April 2003, 2004, 2005, 2006, 2007 and 2008

(k) List of invoice collections of LFP showing the date of collection, invoice numbers, payees, amount etc. since January 2004 to December 2007

(l) Bank statements for LFP covering the financial years ending on 30 April 2003, 2004, 2005, 2006, 2007 and 2008

(m) Tax Returns filed by LFP for the years of assessment 2002/03, 2003/2004, 2004/2005, 2005/2006, 2006/2007 and 2007/2008

(n) Tax computation records filed by LFP with Inland Revenue Department for the years of assessment 2002/03, 2003/2004, 2004/2005, 2005/2006, 2006/2007 and 2007/2008

(o) Partnership deeds of all the equity and salaried partners joining LFP since its inception in 2002 to 30 April 2008, including agreements on the exit price payable to a retiring partner of LFP

(p) Partners’ capital accounts and current accounts showing the capital contributions and repayments, and basic and additional drawings made by the equity partners of LFP since its inception in 2002 to 30 April 2008

(q) Employment contracts of all fee earners and employees joining LFP since its inception in 2002 to 30 April 2008, including supplemental agreements on the calculation of commissions or allowances

(r) Employer’s Returns of Remuneration and Pensions for the years of assessment 2002/03, 2003/2004, 2004/2005, 2005/2006, 2006/2007 and 2007/2008

(s) Payroll slips or advices showing monthly salaries and commissions paid to the employees of LFP for the period from 1 May 2002 to 30 April 2008

(t) List/record of files or cases assigned to other partners and colleagues of LFP and the applicable billings during the financial years 2002/03, 2003/2004, 2004/2005, 2005/2006, 2006/2007 and 2007/2008

(u) Timesheets or engagement work-in-progress of the 1^st plaintiff and LFP since its inception in 2002 to 30 April 2008

(v) Analysis by the auditors and/or accountants for LFP of the 1^st plaintiff’s income for the financial years ending on 30 April 2003, 2004, 2005, 2006, 2007 and 2008

(w)    Correspondence between LFP and auditors and/or accountants for LFP during the financial years 2002/2003, 2003/2004, 2004/2005, 2005/2006, 2006/2007 and 2007/2008”

7.  However, at the hearing before Fung J on 10 November 2009, instead of making an order for specific discovery, the parties agreed and the court ordered that forensic accounting experts prepare a report for the court.  The order was made in these terms :

“1. The accountancy/valuation experts for the parties do attend a without prejudice meeting (‘WP Expert Meeting’) to discuss and agree on

(a) the valuation methodology for the 1^st plaintiff’s legal practice;

(b) the underlying parameters; and

(c) financial information required for the purpose of such valuation, and produce a joint expert report thereon within 7 days thereafter.

2. Within 14 days of the WP Expert Meeting, the accountancy/valuation experts do produce a joint report stating with reasons :

(a) the methodology, the parameters and the underlying information that they have agreed to use, or alternatively if they cannot agree to a methodology, what each side proposes as the preferred approach, the parameters, and the underlying information required for computing the 1^st plaintiff’s loss and damages;

(b) the net profits of Lily Fenn & Partners (and/or the 1^st plaintiff) since 1 March 2002 until 31 October 2009; and

(c) the discovery that has been obtained from the 1^st plaintiff or Lily Fenn & Partners, and what additional documents they would need to assess the 1^st plaintiff’s loss and damages.

3. The parties do revise and exchange their current Lists of Accounting Issues within 14 days after the WP Expert Meeting. The exchange do take place before the parties contemplate any discovery application;

4. The 1^st defendant’s Summons of 27 July 2009 and this Pre-Trial Review hearing be adjourned with costs thereof be reserved; and

(5) There be liberty to apply.”

8.  Since then, the time limits set out in that order have been extended. 

9.  The accountancy experts, Mr Yam of Grant Sherman Appraisal Ltd for the plaintiffs, and Mr Fordham of Ernst & Young for the defendant, have met and have prepared two reports for the court.  They have agreed upon a number of primary matters, including the methodology for valuation and the underlying parameters for that evaluation.  However, they are unable to agree, in a number of areas, upon the documents they need to assess the 1^st plaintiff’s loss and damages.  The experts’ agreement and disagreement on what, if any, additional documents were required was identified to me and I dealt with the 1^st defendant’s application as a specific discovery application of the additional documents sought by Mr Fordham, applying the principles applicable to the exercise of the court’s discretion under O. 24, r. 7 of the Rules of the High Court. 

10.  I deal with this application by applying normal discovery principles of existence and relevance.  Even if the documents concerned are in existence and relevant, the court will not make an order for their discovery unless it is of the opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs.  Accordingly, the court will not make a discovery order where the probative value of the document sought is minimal or where the discovery sought is oppressive or disproportionate to the fair and reasonable disposition of the cause or matter. 

11.  The 1^st plaintiff is the major equity shareholder in her firm and claims loss of income from her practice, and loss of the capital value of her firm, as a result of the accident in question.  In such cases, including cases where a self-employed claimant claims loss of profits or income, it is necessary to have access to and to review the accounting books and records of the practice or the business, such as ledgers of receipts and expenses, profit and loss accounts and balance sheets, and tax returns and assessments.  It is provided in §66 of the Practice Direction on Personal Injuries PD18.1 that, at the time of service of the writ, a self-employed plaintiff must serve copies of :

“… his[/her] profit and loss accounts, together with copies of his[/her] tax returns lodged with the Inland Revenue Department by him/her and, where appropriate, by his[/her] employer(s), and his[/her] ORSO and/or MPF Statements.”

This discovery is not only necessary for the defendant to understand and test the veracity of the plaintiff’s claims but is also necessary for the plaintiff, who must rely on the primary accounting documents of his firm or business to substantiate his claims for loss of profits or income.  A defendant’s request for primary accounting documents in these cases cannot be called a fishing exercise “to hunt around for documents in the hope that something useful would turn up enabling [one party] to controvert what the other party has said ...” (cf. the observations of Mustill LJ, as he then was, in Berkeley Administration v McClelland (1990) FSR 381). 

12.  I remind myself of the observations of Mayo VP in Yau Chin Kwan v Tin Shui Wai Development Limited (CACV 247/2001) where he said :

“16. Complaint is made by the defendant that the request which was being made was oppressive on account of the large volume of documents involved. The Judge recognised that compliance with the requests would occasion the defendant’s some inconvenience. It was however necessary for him to weigh this against the possible injustice which would be caused if this material was not available to the plaintiffs at the trial.

17. It should perhaps be added that it has not been established that if the discovery is limited to the time indicated by the plaintiffs that there would be oppression.  It can reasonably be assumed that the defendant and those advising him would have a sophisticated system for the retention and retrieval of documents and there should be no undue difficulty in compliance with the order which is being sought by the plaintiffs.” 

13.  The extent of discovery that is ordered to be made must be relative to the issues raised in the case, and the complexity and importance of those issues.  Where, as in this case, the 1^st plaintiff claims income and capital losses of about $30m, the defendant must be given an opportunity to test her claim by examining the books and records of her practice.  However, instead of permitting direct access to those books and records, that 1^st plaintiff has produced a report from another accountant, not the forensic accountants commissioned to prepare a joint report in the case.  This other accountant is a Mr Johnny Chan, a certified public accountant, and in his report dated 14 December 2009 he states :

“We have performed the procedures agreed with you and enumerated below with respect to the accompanying income statements of Lily Fenn & Partners set out on page 3 for the period from 10 January 2002 (dated of commencement) to 30 April 2003, and for the years ended at 30 April 2004, 2005, 2006, 2007, 2008 and 2009. Copies of the respective stand-alone income statements for each of the financial period and years are set out in Appendixes 1 through 7. Our engagement was undertaken in accordance with Hong Kong Standard on Related Services 4400, ‘Engagements to Perform Agreed-Upon Procedures Regarding Financial Information’ issued by the Hong Kong Institute of Certified Public Accountants (HKICPA), a copy of which is set out in Appendix 8.

The procedures were performed solely to assist you in ascertaining (a) that the income statements have been prepared according to the underlying accounting records and books of the partnership and (b) that the income statements filed with Hong Kong Inland Revenue Department, together with the tax returns of Lily Fenn & Partners, for taxation purposes in the relevant tax assessment years are similar in all material respects to the income statements set out in the Appendixes and are summarized as follows :

1. We obtained and checked the additions and deductions in the income statements for the relevant financial period and years, and we compared and reconciled each account item in the income statements to the underlying accounting records and books.

2. We obtained the tax returns of Lily Fenn & Partners for the relevant tax assessment years filed with Hong Kong Inland Revenue Department, and we compare the contents of those filed tax returns with those of the relevant income statements for material discrepancy and inconsistency.

We report our findings below :

(a) With respect of item 1, we found the additions and deductions in the income statements to be correct and each account item in the income statements matched and agreed to the underlying accounting records and books.

(b) With respect of item 2, we found the contents of those filed tax returns matched and agreed to those of the relevant income statements in all material respects. We have not noted any material discrepancy and inconsistency among the documents under consideration, with the following insignificant exceptions …”

14.  Whether or not Mr Johnny Chan has seen the source documents containing the accounting records of the partnership is not entirely clear from his report.  What is clear is that a party cannot unilaterally produce an accountant’s report in this form and then say to his opposite party that “you have no right to look at the source documents because my accountant has “verified” my accounts”.  Mr Chan has made it clear in his report that he has not performed any audit and that he does not “express any assurance on the income statements of the partnership for the relevant financial period and years”.  One of the purposes of discovery is for a party to test the veracity of the claims of the opposite party by examining documents relevant to the issues raised to see whether or not they support the claims of the party advancing them.  In the present case and in cases of this nature, discovery should be made of the primary accounting documents of the firm or business. 

15.  Having made those general observations, I turn to the specific classes of documents in respect of which discovery has been sought and I do so by reference to the very helpful appendix produced by Mr Ruy Barretto SC and his junior Mr Jean-Paul Wou.  The latest version of this appendix is dated 1 February 2011. 

16.  Despite Mr Barretto’s valiant attempts on behalf of the 1^st plaintiff, I have no difficulty in ordering discovery of the 1^st plaintiff’s bank statements or passbooks from June 2002 up to the present.  Although Mr Barretto submitted that these bank statements did not relate to the value of the 1^st plaintiff’s share in the practice, I accept the submissions of Mr Robert Whitehead SC, leading Mr Ashok Sakhrani, that the 1^st plaintiff’s case is that she repeatedly ploughed back monies that she received into the partnership.  Her personal wealth is highly relevant to the issue of, and must impact upon, her future investment plans.  The starting point must be the assets that she has available to invest in the practice, whether or not such investment plans are affected by changes in the market, or by loss of confidence on the part of third parties in her firm, after she suffered her accident. 

17.  I refuse the application for specific discovery of the tax returns of the 1^st plaintiff and notices of assessment and demand for tax for the years of assessment 2002/03 to 2007/08 in respect of the former, and 2002/03 to 2006/07 in respect of the latter, for the reason that these documents are not in existence.  The 1^st plaintiff did not file tax returns.  Her firm filed tax returns but she did not. 

18.  Before dealing with the documents sought in sub-paragraphs (d), (i) and (j) of the schedule to the 1^st defendant’s summons, I deal briefly with the documents sought under sub-paragraphs (e), (f), (g) and (h).  I do not make any orders for specific discovery of these classes of documents for these reasons.  I have been given an undertaking by the 1^st plaintiff to disclose the billings of the partners of the firm for the years 2002, 2003, 2009 and 2010 if they exist.  Billings for the years 2004 to 2008 have already been disclosed.  The additional billings sought for the other years are likely to exist, and will be produced and disclosed in due course.  The 1^st plaintiff has already filed an affidavit asserting that the documents sought under sub-paragraph (f), in respect of billings of other fee earners (consultants, partners and assistant solicitors), do not exist.  As regards the request under sub-paragraph (g), for audited accounts, profit and loss accounts and balance sheet of the firm, I am informed and I accept that the firm does not need to audit its accounts, and does not have audited accounts, and that profit and loss accounts and balance sheets were disclosed under item 100 of the 4^th Supplemental List of Documents dated 5 August 2010.  These accounts span the period from 10 January 2002 up to 30 April 2010.  The request under sub-paragraph (h), for all management accounts, falls away because the 1^st plaintiff has affirmed that there are no management accounts and that these documents do not exist. 

19.  Mr Whitehead submitted that it is because there are no audited accounts and no management accounts that it is important to have discovery of copies of all professional fees/billings/invoices issued by the firm, including detailed breakdown or narrative of time, costs and expenses for the relevant period as sought under sub-paragraph (d) of the schedule to the 1^st defendant’s summons.  The accounts disclosed under item 100 of the 4^th Supplemental List of Documents contain a statement of the professional fees received for the year in question without giving any breakdown of the same and without identifying the fee earners and the clients concerned.  These accounts do not give a flavour of what or who is the driving force behind the growth of the business of the firm.  I agree with Mr Whitehead that these documents should be disclosed.  It is necessary to look at them to make a historical review of the nature and growth, or decline, of the business of the firm and to test whether or not the accident suffered by the 1^st plaintiff had any impact on the firm’s earnings.  For the same reason, i.e., the absence of audited accounts and management accounts, Mr Whitehead submitted that the ledgers used by the accountants of the firm, sought under sub-paragraph (i), and copies of ledgers of the operating expense accounts, sought under sub-paragraph (j), for the years in question should be disclosed.  The ledgers appear to be the underlying documents relied upon to calculate the gross fee income of the firm and are plainly relevant to the forensic accountants’ task of assessing the net profit and loss.  However, I am not persuaded that there is any serious controversy in relation to the operating expenses of the firm.  The accounts disclosed under item 100 of the 1^st plaintiff’s 4^th Supplemental List of Documents give a detailed breakdown all those expenses and the figures shown on those accounts do not appear to me to be controversial.  The 1^st defendant needs to look at the primary accounting documents relating to income generation, not those relating to the normal running expenses of a solicitors’ firm.  I am prepared to order specific discovery of the documents sought under sub-paragraph (d) and also sub-paragraph (i), but limited to ledgers in respect of all professional fees earned by the firm.  I do not order specific discovery of the documents sought under sub-paragraph (j). 

20.  I have ordered discovery of the documents sought under sub-paragraph (d), and to a limited extent under sub-paragraph (i), notwithstanding the objection raised by Mr Barretto based on the claim for privilege in respect of solicitors’ bills of costs, the firm’s duty of confidence to its clients, the objection raised by the firm’s partners, and the absence of authority from the firm’s clients to disclose these documents.  It is said that the last two elements affect the 1^st plaintiff’s power to disclose these documents. 

21.  I am not impressed by the submission based on the objection raised by the other partners.  There were only two equity partners, the 1^st plaintiff herself, being an equity owner of about 90% of the shareholding of the firm, and one other equity partner, a Mr Tse.  The 1^st plaintiff’s agreement with Mr Tse contains a confidentiality clause providing that the partner shall endeavour to keep confidential any confidential information and shall not use or disclose such information “except with the consent of the other partner or in accordance with the orders of a court of competent jurisdiction …”.  The court’s order for specific discovery empowers the 1^st plaintiff to disclose the documents concerned.  It is also clear from the agreement with the salaried partners that accounts, vouchers, ledgers, receipts remain in the sole ownership, possession, custody and control of the equity partners.  Quite apart from the contractual arrangements between the partners, the 1^st plaintiff has power to access, inspect and copy the documents concerned by virtue of section 26(i) of the Partnership Ordinance, Cap.38, which provides :

“… the partnership books are to be kept at the place of business of the partnership (or the principal place, if there are more places than one), and every partner may, when he thinks fit, have access to and inspect and copy any of them.”

22.  Turning to the question of confidentiality, I rely on and apply the principle set out by Lord Wilberforce in Science Research Council v Nasse [1980] AC 1028 at 1066A in these terms :

“The ultimate test in discrimination (as in other) proceedings is whether discovery is necessary for disposing fairly of the proceedings. If it is, then discovery must be ordered notwithstanding confidentiality.”

andat p. 1066B :

“[The court] will naturally consider whether justice can be done by special measures such as “covering up”, substituting anonymous references for specific names, or, in rare cases, hearing in camera.”

I have concluded that the discovery of the billing documents is necessary for disposing fairly of these proceedings.  I order such discovery to be made notwithstanding that these documents are or may be confidential.  Although I order specific discovery of these documents, I also grant liberty to the 1^st plaintiff to apply to me ex parte to restrict discovery to particular individuals, or in some other way, or to cover up any documents, parts of documents, if minded so to do. 

23.  The claim for privilege is misconceived since the discovery of the billing documents ought not to include instructions from clients or legal advice given to clients.  As the authors of Disclosure, 3^rd Edition, have stated at §11.12 on p. 282 :

“… the rule relates to communications, and does not therefore cover all documents relating to a client’s affairs. For example, it does not protect … the client account ledger which a solicitor maintains in relation to his client’s money … fee record relating to the client.”

24.  I also conclude that the discovery of the tax returns and tax computation records sought under sub-paragraphs (m) and (n) of the schedule to the 1^st defendant’s summons is necessary for disposing fairly of these proceedings.  These are primary documents and their discovery is not excused just because I have ordered discovery of the billing documents and ledgers.  For the reasons set out above, I do not accept the submission made by Mr Barretto in respect of these documents based on the objection raised by the firm’s partners. 

25.  Upon the disclosure of the documents under sub-paragraphs (d) and (i) as amended, the 1^st defendant will not need to see the list of invoice collections showing the date of collection, invoice numbers, payees, amount etc., nor the bank statements of the firm covering the relevant years. To order discovery at this stage of these further documents, which have been sought under sub-paragraphs (k) and (l) of the schedule to the 1^st defendant’s summons, would be excessive.  If something suspicious or unusual is shown in the documents disclosed under sub-paragraphs (d) and (i) as amended, the 1^st defendant can make further application for the documents relating to the suspicious or unusual transactions. 

26.  The documents listed in sub-paragraph (o), in respect of partnership deeds, have already been supplied.  In addition, the 1^st plaintiff has given an undertaking to furnish the documents sought under sub-paragraph (p), in respect of partners’ capital and current accounts. 

27.  The other contested classes of documents that have been sought are listed in sub-paragraph (q), in respect of employment contracts of all fee earners and employees joining the firm, including supplemental agreements on the calculation of commissions and allowances, and sub-paragraph (r), in respect of Employer’s Returns of Remuneration and Pensions for the years of assessment from 2002 to the present.  As I have not ordered disclosure of copies of ledgers of all operating expense accounts under sub-paragraph (j) of the schedule to the 1^st defendant’s summons, it becomes necessary to consider these two particular classes of documents.  I note that the firm had 38 staff by April 2009 and conclude that it is unnecessary to disclose these documents in respect of all employees of the firm.  However, I think it is necessary for the fair disposal of the proceedings that these documents be disclosed insofar as they relate to fee earners, including assistant solicitors and legal executives, but not in respect of clerical staff. 

28.  Mr Whitehead did not press for the documents sought under sub-paragraph (s), in respect of payroll slips, nor those under sub-paragraphs (v) and (w), in respect of analysis by and correspondence with auditors and accountants.  In any event, the documents sought under sub-paragraph (v) do not exist. 

29.  Mr Whitehead sought discovery of the documents listed under sub-paragraph (t), being lists/records of files or cases assigned to other partners and other colleagues of the firm and the applicable billings. I order specific discovery of these documents as they relate directly to the extent to which the 1^st plaintiff herself participated in the business of the firm and the extent to which she assigned or delegated work to others.  The impact of her injuries on the financial fortunes of her firm would be lessened if she had the ability to delegate work.  

30.  Although these documents are clearly relevant, I do not order discovery of the timesheets of the 1^st plaintiff, sought under sub-paragraph (u), as these documents do not exist. 

31.  The service of the 1^st plaintiff’s Revised Statement of Damages prompted an application for discovery of additional documents.  This can be dealt with quite briefly.  The 1^st defendant has agreed to provide minutes of meetings discussing the impact of the accident and efforts to mitigate such impact.  I am told that 2 classes of documents sought (records of bad debts and business plans, budgets, forecasts and projections) do not exist and I have been given an undertaking on behalf of the 1^st plaintiff that an affidavit would be filed in due course to confirm this. 

32.  The remaining matter of controversy relates to the application for minutes of all partnership/management meetings.  These have been provided to me to review them in order to ascertain their relevance and, if relevant, to consider whether or not any part of the minutes ought to be covered up because of confidential information recorded therein.  This I have done.  The minutes are relevant to the issues raised and I order them to be disclosed.  However, I grant liberty to the 1^st plaintiff to apply to me ex parte to cover up any part or parts of the minutes on the grounds that they contain irrelevant confidential information.  

33.  I conclude that the 1^st defendant has succeeded substantially in his application for specific discovery and I order that the costs of the application and two-thirds of the costs of the hearing taken up with this application to be paid by the 1^st plaintiff to the 1^st defendant in any event.  I give certificate for 2 counsel.