THE INCORPORATED OWNERS OF VICTORIA CENTRE v. LEE TAK FAI AND ANOTHER

DCCJ 3431/2017

[2020] HKDC 244

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3431 OF 2017

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DECISION

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Introduction

1.  By summons dated 12 June 2019, 1^st and 2^nd defendants (together the “defendants”) seek specific discovery of various documents as set out in Schedule A of the summons.  Master Raymund Chow dismissed the defendants’ application on 25 October 2019.  This is an appeal by the defendants against Master Chow’s decision.

2.  There is no dispute that an appeal from a master to a judge in chambers is dealt with by way of an actual rehearing of the application leading to the order under appeal[1].

Background

3.  The plaintiff is the incorporated owners of Victoria Centre (the “Building”).  The defendants are the registered owners of Flat C, 15^th Floor, Block 1 of the Building (the “Flat”). It is alleged that:-

(1)  at or around 15:57 on 6 May 2015, it was found that the common corridor on 15/F of Block 1 of the Building was flooded and that water escaped from the Flat. 

(2)  the hose connection joint at the flush water valve inside the toilet of the Flat was burst, causing a large quantity of flush water to escape from the Flat through the common corridor on 15^th Floor of Block 1 of the Building, to the lift shafts of Lift No 8 and Lift No 9, causing serious damage to both Lift No 8 and Lift No 9. 

(3)  the flush water leakage was caused by the negligence of the defendants.

(4)  The plaintiff suffers damages amounting to HK$972,505.

4.  The defendants put forward the following defence:-

(1)  The plaintiff is put to strict proof of the incident on 6 May 2015 and that water escaped from the Flat due to the bursting of the flush water valve inside the toilet of the Flat.

(2)  The water leakage in all probability originated from the ground and/or walls appurtenant to the basins and/or shafts of Lift No 8 and Lift No 9.

(3)  If the water leakage arose within the Flat (which is denied), it was not reasonably foreseeable by the defendants.

(4)  If the water leakage arose within the Flat (which is denied), it did not cause any damage to Lift No 8 and/or Lift No 9.

(5)  The alleged damage of Lift No 8 and/or Lift No 9 were caused by at least one separate and distinct water leakage incident from other residential units in the Building between 2011 and 2015.

(6)  The plaintiff failed to repair the damage to Lift No 8 and Lift No 9 following the previous water leakage incidents.

(7)  Thus the damage caused by any alleged water leakage incident is an aggravation of the damage caused by the previous water leakage incidents.

(8)  The defendants deny any negligence or breach of duty.

Documents sought

5.  The documents sought by the defendants are as follows:-

“Category 1

1. All the notice(s) and/or“通告”concerning any water seepage and/or leakage into Lift No 8 and Lift No 9 of domestic Block 1 of Victoria Centre, No 15 Watson Road, Hong Kong from 1^st January 2011 to 6^th May 2015 issued and/or posted by the Plaintiff and/or the Manager and/or their agent and/or servant.

Category 2

2. All the incident report(s) (“事件報告”) compiled and/or issued by the Manager of domestic Block 1 of Victoria Centre, No 15 Watson Road, Hong Kong concerning any water seepage and/or leakage into Lift No 8 and Lift No 9 from 1^st January 2011 to 6^th May 2015.

Category 3

3. Maintenance and/or inspection and/or repair record(s) and/or report(s) of Lift No 8 and Lift No 9 of domestic Block 1 of Victoria Centre, No 15 Watson Road, Hong Kong concerning any water seepage and/or leakage into Lift No 8 and Lift No, 9 from 1^st January 2011 to 6^th May 2015 issued by the Plaintiff and/or the Manager and/or the contractor maintaining the said 2 lifts including but not limited to:-

(a)  升降機故障記錄；

(b)  升降機故障記錄冊；

(c)  大廈日誌簿；

(d)  更換零件記錄；

(e)  維修記錄簿；

(f)  升降機運作報告；

(g)  故障檢查報告；

(h)  升降機服務故障統計資料。

Category 4

4. Lift log book(s) and/or“升降機工作日誌”Lift No 8 and Lift No 9 of domestic Block 1 of Victoria Centre, No 15 Watson Road, Hong Kong from 1^st January 2011 to 6^th May 2015.

Category 5

5. Inspection and/or testing and/or maintenance report(s) and/or record(s) concerning the water seepage and/or leakage in the lift shafts of the Lift No 8 and Lift No 9 of domestic Block 1 of Victoria Centre, No 15 Watson Road, Hong Kong uncovered on 31^st March 2014.”

Legal principles

6.  The parties do not dispute the relevant legal principles.  Zervos J. had succinctly summarized the position in Komal Patel & Ors v Chris Au & Ors[2].

“Order 24 rule 3(1) provides that, subject to rules 4 and 8, the court may order any party to a cause or matter to make and serve on any other party a list of the documents which are or have been in his possession, custody or power relating to any matter in question in the cause or matter, and may at the same time or subsequently also order him to make and file an affidavit verifying such a list and to serve a copy thereof on the other party.

Order 24 rule 7(1) provides that, subject to rule 8, the court may at any time, on the application of any party to a cause or matter, make an order requiring any other party to make an affidavit stating whether any document specified or described in the application is, or has at any time being, in his possession, custody or power, and if not, then in his possession, custody or power when he parted with it and what has become of it.

The orders sought by the parties seek from the other party verification that they possess or had possessed specified documents, and to produce copies of the documents that they possess and to state what has become of the documents that they no longer possess.

The general principles regarding specific discovery have been usefully summarised by Ng J in Jade’s Realm Ltd v Director of Lands, HCA 1509/2012, 9 January 2015 as follows:

“(1) There is no jurisdiction to make an order for specific discovery under RHC O 24 r 7 unless there is sufficient evidence or prima facie case that: (a) the documents or classes of documents exist which the other party has not disclosed; (b) the documents relate to a matter in issue in the action; and (c) the documents are in the possession, custody or power of the other party.

(2) Once it is established that those three prerequisites for jurisdiction do exist, the court has a discretion whether or not to order discovery.

(3) The Court will not make an order unless the discovery sought is necessary either for disposing fairly of the cause or matter or for saving costs.

(4) The Peruvian Guano test remains the test of relevance. A document is relevant if:

(i)  it is reasonable to suppose that it contains information which may, not must, either directly or indirectly enable the party requiring the same either to advance his own case or to damage the case of his adversary; or

(ii) it is a document which may fairly lead the party to a train of inquiry which may have either of those two consequences.

(5) For the purpose of discovery, the pleadings have to be looked at broadly.

(6) The order must identify with precision the documents or categories of documents which are required to be disclosed, for otherwise the person giving discovery may find himself in serious trouble for swearing to a false affidavit, even though doing his best to give an honest disclosure.

(7) Notwithstanding the Peruvian Guano test, ‘fishing’ is not allowed, and discovery should not be oppressive.

(8) The respondent may answer an application for specific discovery by an affidavit stating that he does not have the documents, and this will be conclusive at the interlocutory stage.”

Relevance is highly important in the exercise of discovery and will primarily be determined by reference to the pleadings.  The threshold test is that the documents sought must be relevant in that it is reasonable to suppose that they may directly or indirectly enable the party requiring the discovery either to advance his own case or undermine the case of the opposing party but subject to the limitation that the discovery is not be used as a fishing expedition.  The court can still refuse the application if the documents being sought are unlikely to contain or yield information of sufficient evidential materiality to the pleaded case of the parties as to make their disclosure necessary for the fair disposal of the proceedings or to save costs.  This is stipulated under Order 24 rule 8.”

Jurisdiction

7.  Before the jurisdiction of the court is invoked, the defendants must be able to show:-

(a)  The documents exist.

(b)  The documents relate to matters in issue.

(c)  The documents are in the plaintiff’s possession

Category 1 documents

8.  The defendants need to show a prima facie case of the existence of the documents in question[3].

9.  For Category 1 documents, the defendants rely on:-

(a)  the plaintiff’s meeting minutes dated 29 June 2015 and 3 October 2016 which referred to water leakage incidents on 6 May 2015 (the incident in question) and August to September 2016, and

(b)  section 7 of the Lifts and Escalators (General) Regulation (Cap 618A)

to show that: if there were any leakage causing Lift No 8 and/or Lift No 9 to suspend more than 4 hours, the registered contractor maintaining the lifts is required to display particulars of the reasons for suspension and in 2015 and 2016, and the plaintiff had issued notices to owners of the Building.

10.  However, other than two incidents in 13 April 2012 and mid-2014 respectively (these are not pleaded but only mentioned in affirmations and witness statements), the defendants have not demonstrated between 2011 to 2015 whether there were any other water seepage cases and if so when did those incidents occur.  To ask for “All the notice(s) and/or“通告”concerning any water seepage and/or leakage into Lift No 8 and Lift No 9” during the said period is clearly a fishing exercise to see whether any other water seepage incidents had occurred between 2011 and 2015.  The defendants have not demonstrated there is a prima facie case of the existence of all of such notices. 

11.  At most, the defendants could only demonstrate a prima facie case for the existence of notice(s) and/or“通告”concerning any water seepage and/or leakage into Lift No 8 and Lift No 9 of the Building in relation to the water leakage incidents on 13 April 2012 and in mid-2014.

12.  As to “relevance”, the real question is whether the documents sought to be discovered are relevant to the issues between the parties.  The issues or questions must be those identified in the pleadings, although it had been held that matters can be “in question” even though not expressly raised on the pleadings[4]. However, even if an issue is raised in the pleadings, it is not necessarily determinative as to whether it relates to a “matter in question” (Paul’s Model Art Gmbh & Co v UT Limited & Ors (unrep CACV 139/2005, 14 December 2005)

13.  The defendants say that the Category 1 documents are relevant to whether there were separate and distinct water leakages from other residential units or from the ground or walls appurtenant to the lift shafts into Lift No 8 and Lift No 9 between 2011 to 2015; and whether such water leakages caused damage to Lift No 8 and Lift No 9 and if so, the extent of the damages.  This submission cannot assist the defendants in the present application, as it clearly demonstrates that other than the water leakage incidents on 13 April 2012 and in mid-2014, the defendants do not actually know whether there were any other previous water leakages, and whether such leakages caused any damage at all.  What they are hoping to achieve by the present application is to fish for documents and information that may assist their defence.

14.  It is thus not surprising that the defendants in their defence have not been able to particularize whether there were any previous water leakages and when they occurred, let alone what damages were caused.  It is simply averred that “the alleged damage of Lift No 8 and/or Lift No 9 if any, were caused by at least one separate and distinct water leakage from other residential units in the Building between 2011 and 2015”. 

15.  The defendants have the burden to particularize their case as it is their case that previous water leakage incidents had caused damage to Lift No 8 and Lift No 9 as observed on 6 May 2015.  In failing to provide any particulars, the defence remains nebulous and vague. 

16.  “The relevance of an issue … is dependent on its substance and contents in the light of the subject matter of the trial and not simply on its mere presence in pleadings or the existence of a denial of it by a party.” Allington Investments Corp v Ors v First Pacific Bancshares Holdings Ltd & Anor [1995] 2 HKC 139 per Jerome Chan J at 145B

17.  As such, I am of the view that the defendants have failed to properly put the prior water leakage incidents in issue.  If a party can put a matter in issue simply by pleading a vague defence with no particulars in support, they can easily disguise a fishing attempt by doing so.  This cannot be the spirit behind an application for specific discovery.  

18.  Further, the plaintiff admits to previous leakages but any damage caused by the previous leakages have been fixed.  There is no pleading by the defendants to suggest that after the previous leakages, Lift No 8 and Lift No 9 had not passed the annual examinations and were not in use or had been in operation illegally.  In the absence of such pleading, it is difficult to see how previous water leakages could be relevant.

19.  I am thus of the view that the previous water leakage incidents and their damage have not been adequately put in issue and are irrelevant.  As such, the Category 1 documents sought are not relevant to the matters in issue at trial.

20.  In any event, I do not think the notices sought are relevant to the issues between the parties as the plaintiff admits there were previous water leakages in the past but such damage had been repaired. 

21.  As to possession: as I am of the opinion that the defendants have failed to establish a case of existence, it follows that they would also fail to establish a case of such documents being in the plaintiff’s possession.

Category 2 documents

22.  The defendants rely on the incident report in 2015 (the present water leakage) and an incident report the defendants obtained from another owner in relation to the 13 April 2012 water leakage to say that such incident reports must also exist for “any water seepage and/or leakage into Lift No 8 and Lift No 9 from 1^st January 2011 to 6^th May 2015”.

23.  Similarly, the defendants simply do not know (other than in 13 April 2012 and mid-2014) whether there were other previous water leakage incidents.  The defendants fail to establish a prima facie case for the existence of “all the incident report(s) (“事件報告”) compiled and/or issued by the Manager of Block 1 of the Building concerning any water seepage and/or leakage into Lift No 8 and Lift No 9 from 1^st January 2011 to 6^th May 2015”.  The defendants are simply fishing for information in the hope that something to their advantage may turn up.

24.  I am not satisfied that a prima facie case for the existence of the Category 2 documents have been made out.

25.  As to relevance, the defendants say that it is relevant to whether the source of water in Lift No 8 or No 9 originated from the ground or the walls appurtenant to the basins and/or shafts of Lift No 8 and Lift No 9.  I fail to see how the Category 2 documents are relevant to the source of the water in the present water leakage - the fact that previous water leakages have the same or different source of water cannot affect the determination of the source in the present water leakage.  

26.  The reasons set out above in paragraphs 12 to 19 equally apply to the Category 2 documents.  I am of the view that they are not relevant to the matters in issue.

27.  For the same reasons I find that the defendants have failed to show that the Category 2 documents are in existence, I find that the defendants have failed to show that the Category 2 documents are in the plaintiff’s possession.

Category 3-5 documents

28.  I am satisfied that there is a prima facie case that the Category 3-5 documents are in existence and are in the plaintiff’s possession.

29.  As to relevance, the defendants say that they are relevant to:-

(a)  whether the source of water in Lift No 8 or No 9 originated from the ground or the walls appurtenant to the basins and/or shafts of Lift No 8 and Lift No 9.

(b)  whether there were separate and distinct water leakage(s) from other residential units into Lift No 8 and Lift No 9 between 2011 and 2015. 

(c)  whether such leakages caused any damage to No 8 and Lift No 9.

(d)  Whether and when the plaintiff repaired the damages.

(e)  Whether the alleged damages of Lift No 8 and Lift No 9 were aggravation of the plaintiff’s failure to repair the previous damages.

30.  The reasons set out above in paragraphs 12 to 19 equally apply to the Category 2 documents.  I fail to see how the Category 3 to 5 documents are relevant to the issues in question.  I am of the view that they are not relevant to the matters in issue.

31.  Further, by seeking the Category 3 to 5 documents, the defendants in effect are asking for the general maintenance of the Lift No 8 and Lift No 9 to be proved.  The plaintiff has put forward a report prepared by Dr Christina Lam on the exact parts of the lifts damaged during the 2015 water leakage incident in question.  The scope of the defendants’ request is clearly too wide.  Again, the defendants are simply hoping to stumble upon something from these documents which may assist their defence.

No jurisdiction

32.  Consequently, I am of the view that the court’s jurisdiction has not been invoked and the defendants’ application fails. However, in the event that I am wrong, such that the documents sought are in existence, relevant and are in the plaintiff’s possession, I would still not make an order for the discovery sought as I am not convinced that it is necessary nor will it dispose fairly of the cause or matter nor save costs.

Necessary/fair disposal of matter/save costs

33.  The parties had filed a Joint Statement of Issue in Dispute.  Previous water leakage incidents were not included as an issue in dispute.  From the pleadings, there is a stark omission of any particulars of the previous water leakage incidents relied upon by the defendants as a defence to the plaintiff’s claim.  The defendants are simply trying to obtain information which may be relevant to fill in the gaps of their defence.  The application is simply a fishing exercise.

34.  Further, whilst the plaintiff had obtained leave to adduce expert evidence on quantum of damages, the defendant had elected not to adduce expert evidence on liability or quantum.  Without any expert evidence on liability, even if the documents sought were to be made available, it is difficult to see how the causes of previous water leakages or the extent of their damage or repair could assist the court in the fair disposal of the matters in issue, including the cause of the alleged damage.  I do not agree with the defendants’ submission that the court can simply draw inference from such documents to determine the issues in the absence of an expert report.

35.  If the defendants wish to rely on the identified and admitted previous water leakage incidents in their defence, they are already in possession of the relevant documents: the defendants already have the incident report and the quotation of relevant repairs for the water leakage incident in April 2012.  The defendants also have the minutes of the IO meeting for the fresh water leakage incident in mid-2014 which warranted no repairs. The cause of the leakage and the follow-up actions had been recorded therein.

36.  Thus, the documents sought are not necessary for the fair disposal of the matters to be resolved at the trial.  The discovery of the documents sought by the defendants would occasion unnecessary costs rather than saving costs.

Disposition

37.  In the circumstances, the 1^st defendant’s and the 2^nd defendant’s appeal is dismissed.  Costs of the appeal shall be paid by the 1^st defendant and the 2^nd defendant to the plaintiff, with certificate for counsel, to be taxed if not agreed.