LMH v. KLH

CACV 28/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 28 OF 2006

(ON APPEAL FROM HCMC No. 2 OF 2002 )

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REASONS FOR JUDGMENT

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Hon.  Yuen JA:

1.  This was an appeal from an order of Hartmann J refusing to order disclosure of a document on the grounds of legal professional privilege.  At the conclusion of the appeal, we allowed the appeal with reasons to be handed down.

2.  The application arose in the context of divorce proceedings instituted by the Petitioner (‘the Husband’) and opposed by the Respondent (‘the Wife’).  Rule 3 of the Matrimonial Causes Rules Cap. 179 applies the Rules of the High Court (including discovery) to matrimonial proceedings. There is no dispute that there should be full and frank disclosure of relevant documents.

Background

3.  It is common ground that in 1999, a former spiritual adviser of the couple (‘Dr. S’) obtained from their house (in disputed circumstances) a bundle of documents pertaining to the assets of the husband and wife. 

4.  In 2002, these divorce proceedings were instituted.  Obviously the identification of the parties’ assets is directly relevant to the claim for ancillary relief.

5.  It is common ground that the documents Dr S took do not belong to him, are directly relevant to the proceedings between the parties and are not privileged.  The Husband claims that the documents were his.  As such, in general litigation they would have to be included in his list of documents under Schedule 2 of Form No. 26 as documents previously in his possession.  And if he managed to get them back (whether in original or copy form), he would have to disclose them for inspection by the Wife.   

6.  At the end of 2002, Dr S contacted the Husband’s Singapore lawyer Murugaiyan Sivakumar and in effect offered to pass the documents to the Husband in exchange for money. 

7.  The Husband said he wanted to inspect the documents first.  Mr Sivakumar the Husband’s Singapore lawyer therefore arranged with Dr S to inspect the documents at the latter’s home in Singapore.   Mr Jonathan Mok, the Husband’s Hong Kong lawyer, also went for the inspection as the Singapore lawyer was not substantively involved with the case at the time. 

8.  Mr Sivakumar the Husband’s Singapore lawyer said in his affirmation that "it was agreed that this would be done on a ‘without prejudice’ basis as Dr S was concerned about potential claims for these documents" (para. 5).  It is therefore clear that Dr S was not asserting that these documents were his, nor was he imparting any confidential information of his own (cf Sarah C Getty Trust, Getty v Getty and another [1985] 2 All ER 809). 

The Schedule

9.  Mr Sivakumar the Husband’s Singapore lawyer said that at the inspection, "Mr Mok drew up a list on [of] the documents inspected by him as aide-memoire to facilitate him in advising the Petitioner" (para. 5).  It is this list (which has been referred to as ‘the Schedule’) which is the subject-matter of appeal. 

Application for disclosure

10.  In 2005, the Wife sought disclosure of the Schedule.  The Husband argued that he was exempt from providing it by reason of legal professional privilege. 

11.  The matter came before the judge who said that the issue "had not been the easiest matter to resolve" but allowed the claim of legal professional privilege and dismissed the application for disclosure. 

12.  The Wife now appeals against that order. 

Principles

13.  The judge’s order was of course made in the exercise of his discretion and it is well-established that an appellate court should not interfere with the exercise of a judge’s discretion unless it is satisfied that the judge has erred in law or in principle, or if he has taken into account some matter which he should not have taken into account, or has left out of account some matter which he should have taken into account, or if the decision was so plainly wrong that it must have been reached by a faulty assessment of the weights of the different factors which have to be taken into account (cf  Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 WLR 394, applied in Lakhan v Wu Wing Tat [1987] 3 HKC 54).

Judge’s reasoning

14.  The judge’s reasoning is set out in the following passages from his judgment.

"11. On the evidence therefore the schedule was prepared by the solicitor for the purposes of fulfilling his professional mandate in order to better advise his client.  Accordingly the schedule must be taken to be more than a simple long-hand copy of the documents studied by the solicitor.  While it may contain details of those documents, in light of the mandate being fulfilled by the solicitor, the schedule must, to some material degree, consist of the solicitor’s impression of those documents.  That impression in turn will have been coloured by the solicitor’s view of the value of the documents to his client.

13. In the present case, put bluntly, the husband was being offered documents for sale, documents which, it was said, would be of assistance to him in his litigation.  The husband sought advice from his solicitor as to what should prudently and sensibly be done in the circumstances : would the documents be of value or would they not?  The schedule was the result of the solicitor’s research and skill; it was a document made for the purposes of legal advice and as such must be accorded legal professional privilege. 

14. I would add that the fact that the schedule may contain verbatim extracts from various documents in the possession of Dr S does not, in my opinion, mean that the schedule itself can be made the subject of dissection, divided into pieces that are privileged and are not.  Even assuming that the schedule is capable of such dissection, I believe it would constitute a wrongful encroachment upon and, in this case, a diminution of the principles that underline legal professional privilege to attempt to do so".  (Emphasis added).           

Discussion

15.  With great respect to the judge, there was no evidence before him that established legal professional privilege.  It was common ground that the documents were directly relevant to the proceedings and were unprivileged documents.  Accordingly, as the judge accepted (para. 8), the documents would have to be disclosed for inspection by the Wife if they were in the Husband’s possession, or if they were in the possession of his solicitors - even if they had obtained them and were holding them for the purposes of giving him legal advice on them. 

16.  It is well-established that no privilege attaches to a photocopy of unprivileged documents, even if the photocopy were made by solicitors who did so for the purpose of giving legal advice.  There are a number of cases to this effect and it is not disputed by counsel for the Husband.

17.  Since no privilege attaches to a solicitor’s photo-copy of unprivileged documents, it follows that no privilege attaches to a handwritten copy he makes of them even though it was created entirely by the solicitor "as an aide-memoire to facilitate him in advising the Petitioner".  

18.  From that I think it must follow that no privilege attaches if a solicitor makes a list of unprivileged documents - which is no more than a summary way of copying the documents - if it did not involve in an abstracting process the betrayal of the trend of any legal advice he is giving the client (Ventouris v Mountain [1991] 3 All ER 472, 479 f-g). 

19.  I do not see from the evidence any material that supports the judge’s inferences in paras. 11 and 13 of his judgment that the Schedule "must" have consisted of the solicitor’s "impression" of the "value" of the documents to his client’s case and which was "the result of the solicitor’s research and skill".  If that were the case, one would have expected an affirmation to that effect from Mr Mok, the Husband’s Hong Kong lawyer himself.  There is none.  Disclosure as a general rule is regarded as beneficial, and exceptions have to be justified (Ventouris v Mountain, 476 d-e).  A party who claims legal professional privilege has the burden of establishing it.  But there is no evidence from Mr Mok the Husband’s Hong Kong lawyer (whose firm is still acting for the Husband) that any legal research or skill was involved in making the list, or that he added to it any legal advice or communications to his client.  Mr Pilbrow counsel for the Husband said there is no evidence what was written on the Schedule.  But Mr Mok would of course know what he had written on the Schedule.  If he had done anything beyond making a clerical list, he need only have gone on affirmation to say so, and no-one could have gainsaid it.   

20.  It may well be that on the basis of that Schedule, the Hong Kong lawyers later advised the Husband whether to pay Dr  S for the documents.  If there was a letter of advice from the Hong Kong lawyers to the Husband, that letter would of course be privileged but it is not that document that is sought for disclosure.

21.  The evidence from Mr Sivakumar the Singapore lawyer indicates that the Schedule was simply a list which the Hong Kong lawyer made of the documents produced by Dr S at his home.  Those  circumstances would render it unlikely that Mr Mok would have done anything other than make a clerical list of the documents - which were pre-existing documents directly relevant to the proceedings and which were clearly not privileged. 

22.  Accordingly, with respect to the judge, I consider that on the evidence before him, there was no basis on which he could have exercised the discretion to refuse disclosure on the ground of legal professional privilege. 

Exercise of discretion

23.  It therefore fell to this court to consider afresh in the exercise of its discretion whether to order disclosure of the Schedule.  In my view it was clear that the Schedule should be disclosed.  It is common ground that the documents are directly relevant and would be important in the court’s consideration of the claim for ancillary relief.  If they had remained in the possession of either party, each would have to allow inspection by the other.  If Dr S had the documents in Hong Kong, it is difficult to see how he could object to being compelled to produce them at a hearing for ancillary relief.

24.  As it is however, since it would appear that the documents have remained with Dr S in Singapore, the Schedule (albeit only a list) is the only form of the documents which is available.  It is all the more important that it be disclosed.

Order

25.  For those reasons I allowed the appeal.  Paragraph 1 of the judge’s order is set aside and there shall be an order in terms of para. 1 of the Wife’s (Respondent’s) summons filed on 25 November 2005.  The Wife (Respondent) having succeeded on both parts of her summons, it was ordered that the costs here and below be paid by the Husband (Petitioner) to the Wife (Respondent).

Hon Waung J:

26.  I agree.