HCA 265/2012
[2021] HKCFI 1009
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO 265 OF 2012
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BETWEEN
FONG KWOK SHAN, CHRISTINE
1st Defendant
方國珊
and
SECRETARY FOR JUSTICE
21st Defendant
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Before: Hon Wilson Chan J in Chambers
Date of Hearing: 4 March 2021
Date of Decision: 4 March 2021
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D E C I S I O N
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1. A judgment in this case was handed down by this court on 9 July 2019 (the “Judgment ”) which concerned agreements made between the owner of a piece of land in Sai Kung and a developer to develop a number of small houses on the land, purporting to take the benefit of the Government’s New Territories Small House Policy (the “Policy ”). Under the Policy, an adult indigenous villager (colloquially called a ding) of a recognised village in the New Territories may apply to the Director of Lands (the “Director ”) for permission to erect a small house in the New Territories, which administratively would involve submitting to the Director an application form with a statutory declaration attached thereto.
2. It was a finding of the court as stated in the Judgment that the statutory declarations made or to be made by the dings concerned “must all be false ”. It was also found that, in order to implement the development scheme concerned, the dings had to make false declarations to the Director. The development agreements and schemes concerned were therefore held to be illegal and liable to be set aside.
3. In accepting the submissions of the Director, it was also held in the Judgment that the building licenses and permissions letters obtained on the basis of false statutory declarations were merely voidable at the instance of the Director, not void ab initio . The said licenses and permission letters may contain terms that the Director may wish to enforce against the respective grantee and that there is a legitimate reason as to why the Director would like to retain his discretion as to what to do with the building licenses and permission letters (ie, whether they should be avoided or allowed to subsist).
4. In view of the Judgment, the Secretary for Justice (“SJ ”) the 21st defendant in this case, on behalf of the Director applies for leave to be released from the implied undertaking to make use of the documents listed in the Schedule of the Summons in such way and in such manner as may be reasonable necessary, including supplying the documents or copies thereof to relevant persons, organization or authorities, for the following purposes, namely:
(1) Investigating into the conduct of the plaintiff and the 1st to 20th defendants, as well as that of their officers, employees, agent and advisers, in relation to the applications to the Director for grants, licenses, certificates and permissions that were the subject matter of the action herein;
(2) Taking reasonable follow up actions consequential to the said investigation, including revocation of the said grants, licenses, certificates and permissions, and/or seeking appropriate remedies and taking appropriate enforcement actions pursuing thereto; and
(3) Referring the said applications to the relevant law enforcement institutions for investigation and possible legal action(s), and being used in the said investigation and action(s).
5. It is not in dispute that all parties to this litigation, including the Director in this case, have given an implied undertaking to the court not to use documents disclosed by one party to the other for any collateral or ulterior purpose other than for the conduct of the litigation.
6. The Court of Final Appeal in Secretary for Justice v Florence Tsang Chiu Wing [2014] 6 HKC 285, per Ribeiro PJ at paragraph 23, has held that where release from such an undertaking is sought it is for the person who has obtained documents to demonstrate cogent and persuasive reasons why it should be released. Each case turns on its own facts and no general principle can be formulated beyond stating that the court will not release or modify the implied undertaking given on discovery save in special circumstances and where the release or modification will not occasion injustice to the person giving discovery.
7. The authorities cited by the 1st defendant do not take the matter further. In EMI Records Limited v Spillane & Ors [1986] 2 All ER 1016, Sir Nicholas Brown-Wilkinson, VC, is quoted by the 1st defendant to have said:
“So long as documents are held solely as the result of discovery (particularly discovery under compulsion under an Anton Piller order) in my judgment it would be quite wrong to authorise their use in criminal proceedings brought under fiscal laws and having no connection with the original cause of action .” (Emphasis supplied)
The present case is clearly distinguishable. The making of the false statutory declarations was clearly closely connected with the development of the small houses in question.
8. I accept that in the present case, there are cogent and persuasive reasons to release the Director from the undertaking. In particular, it is in the public interest to release the Director from such undertaking.
9. As set out above, building licences and permissions letters obtained on the basis of false statutory declarations were merely voidable at the instance of the Director, not void ab initio . The documents produced over the course of discovery are necessary for the Director to consider which terms, and how to (if at all) enforce a given term on the licenses and permissions against the respective grantee. They are also necessary for him in his exercise of discretion as to what to do with the building licenses and permission letter.
10. Further, to maintain the integrity of the Policy and the application process for development of Small Houses, the Director would also need to use the documents for investigation as to the conduct of the plaintiff and the 1st to 20th defendants (which may include looking into the conduct of their officers, employees, agents and advisers) in relation to the application to the Director for grants, licenses, certificates and permissions involved in this case, so that any loopholes on the reliance on statutory declarations and other administrative procedures under the Policy can be identified and be avoided in the future.
11. Lastly, given the Judgment has held that false statutory declarations were made by persons involved in the development of the Land, it is in the public interest for the Director to refer the documents to the relevant law enforcement institutions for further investigation.
12. Given the plaintiff’s neutral stance in the application, I accept that there will be no injustice to the plaintiff if the Director is to be released from the undertaking concerning documents which were disclosed in the plaintiff’s various lists of documents.
13. As to the documents disclosed by the defendants, they are the agreements between the various defendants and Green House, Wills and open letters exchanged between the plaintiff and the defendants. No legal professional privilege has been asserted over the documents. Other than saying that she genuinely thought the documents disclosed would be used only for the litigation, the 1st defendant did not provide any other reason in opposition to the Director being released from the undertaking. Given the public interest in referring to the documents as identified in paragraphs 8 to 11 above, in my view, they outweigh any injustice to the defendants in the circumstances.
14. For the reasons set out above, I grant an order in terms of paragraph 1 of the Summons.
(Wilson Chan)
The 1st defendant acted in person and appeared
Ms Katherine Chan, GC, of the Department of Justice, for the 21st defendant