DAIMLER AG (formerly known as MERCEDES BENZ AG) v. LEIDUCK, HERBERT HEINZ HORST AND ANOTHER

HCA 4089/1994

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.4089 OF 1994

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DECISION

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1. Before the Court is the Defendants’ application by Summons dated 5 April 2013 (“Inspection Summons”) for the production by the Plaintiff within 7 days of the “originals of Extract A, Extract B, and Extract C of the Croci Report that were referred to in the Plaintiff’s Answer to Interrogatories dated 9 August 2012”[1] (“Extract A”, “Extract B” and “Extract C” respectively and “Extracts” collectively) for inspection by the Defendants.

2. Although the Inspection Summons asks for the originals, it will become apparent from paragraph 21 below that the Extracts were themselves copy documents when they were, according to the Plaintiff, first passed to the Plaintiff in 1994.  Hence, by the expressions “Extract A”, “Extract B”, “Extract C” and “Extracts” (without being qualified with the word “original”), I mean the actual copy documents first received by the Plaintiff in 1994.

Rules pursuant to which application is made

3.  The margin of the Inspection Summons cites Order 24, rules 10 and 11 of the Rules of the High Court (Cap 4) which, together with rule 9, make provisions for inspection of documents by parties to litigation as follows:

“Inspection of documents referred to in list

9. A party who has served a list of documents on any other party, whether in compliance with rule 2 or with an order under rule 3, must allow the other party to inspect the documents referred to in the list (other than any one which he objects to produce) and to take copies thereof and, accordingly, he must when he serves the list on the other party also serve on him a notice stating a time within 7 days after service thereof at which the said documents may be inspected at a place specified in the notice.

Inspection of documents referred to in pleadings and affidavits

10. (1) Any party to a cause or matter shall be entitled at any time to serve a notice on any other party in whose pleadings, affidavits or witness statements served under Order 38, rule 2A, or experts' reports, reference is made to any document requiring him to produce that document for the inspection of the party giving the notice and to permit him to take copies thereof.

(2) The party on whom a notice is served under paragraph (1) must, within 4 days after service of the notice, serve on the party giving the notice a notice stating a time within 7 days after the service thereof at which the documents, or such of them as he does not object to produce, may be inspected at a place specified in the notice, and stating which (if any) of the documents he objects to produce and on what grounds.”

Order for production for inspection

11.(1) If a party who is required by rule 9 to serve such a notice as is therein mentioned or who is served with a notice under rule 10(1)-

(a) fails to serve a notice under rule 9 or, as the case may be, rule 10(2), or

(b) objects to produce any document for inspection, or

(c) offers inspection at a time or place such that, in the opinion of the Court, it is unreasonable to offer inspection then or, as the case may be, there, then, subject to rule 13(1), the Court may, on the application of the party entitled to inspection, make an order for production of the documents in question for inspection at such time and place, and in such manner, as it thinks fit.

(2) Without prejudice to paragraph (1), but subject to rule 13(1), the Court may, on the application of any party to a cause or matter, order any other party to permit the party applying to inspect any documents in the possession, custody or power of that other party relating to any matter in question in the cause or matter.

(3) An application for an order under paragraph (2) must be supported by an affidavit specifying or describing the documents of which inspection is sought and stating the belief of the deponent that they are in the possession, custody or power of the other party and that they relate to a matter in question in the cause or matter.”

4.  For the sake of completeness, insofar as it is material, rule 13 stipulates that no order for the production of any documents for inspection unless the Court is of the opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs.

Relevant background: the Extracts and their significance

5.  This action was commenced by the Plaintiff to recover certain monies[2] (together with interest) that had been advanced by it to one Intercontinental Resources Societe Anonym Monegasque (“IRSAM”), a company incorporated in the Principality of Monaco and of which the 1^st Defendant (“Mr Leiduck”) was the sole owner and president, pursuant to an agreement contained in or evidenced by a letter dated 8 July 1993 from the                             Plaintiff to IRSAM.

6.  On 29 April 1994, the Plaintiff applied for and obtained a Mareva injunction (“Injunction”) against both Mr Leiduck and Intercontinental Resources Company Limited (“IRC”), a company incorporated in Hong Kong and of which Mr Leiduck was a 99.998% shareholder and a director, upon the usual cross-undertaking as to damages (“Undertaking”). 

7.  The factual basis put forward by the Plaintiff in joining IRC as the 2^nd Defendant to this action was that the Plaintiff had received information (“Information”) that after the monies paid by the Plaintiff to IRSAM had been credited to IRSAM’s account with Banque Nagelmackers 1747 (Luxembourg) S.A. (“Banque Nagelmackers”), US$6 million thereof was misapplied towards the repayment of a loan (“Loan”) owed to Banque Nagelmackers jointly by IRC and one Vernal Establishment, a Liechtenstein company wholly owned by Mr Leiduck, in July 1993.

8.  In this regard, in paragraph 13 of his Affidavit made on 29 April 1994 in support of the application for the Injunction (“Carolan Affidavit”), after mentioning the fact that Mr Leiduck was then being incarcerated and subject to criminal investigation in Monaco, Mr Paul John Carolan (then a partner of Messrs Baker & McKenzie (“B&M”), solicitors for the Plaintiff) gave one Monsieur Jacques Lefort (“Monsieur Lefort”), a magistrate in Monaco investigating the criminal complaints against Mr Leiduck, as the source of the Information as follows:

“The Investigating Magistrate in Monaco, M Lefort, has seized files relating to the bank accounts of IRSAM and [Mr Leiduck]. The Plaintiff’s Paris lawyer, Maître Georges Fridmanis, met with the Investigating Magistrate on 5 April 1994 who believes that he has found evidence of the following movements of money. After filing its penal suit in Monaco, Maître Fridmanis was given access to the Investigating Magistrates files on 22 and 26 April 1994.”

9.  In fact, the Information was wrong.  The monies advanced by the Plaintiff to IRSAM had not been used by or for the benefit of IRC.  By an Affirmation made on 9 May 1994, Mr Philip Yip Tai Yick, IRC’s director and general manager, explained (with the support of a letter dated 6 May 1994 from the lawyer of Banque Nagelmackers) that the Loan had not been repaid and was still outstanding. 

10.  Such evidence was not accepted by the Plaintiff whose solicitors, B&M, wrote to IRC’s then solicitors, Messrs Denton Hall (“DH”), on 11 May 1994 as follows:

“2. Our client’s Paris lawyer is now permitted … to inspect documents in the possession of the investigating magistrate which support the evidence of [the Carolan Affidavit] (namely, to the effect that the loan in question was repaid).

3. However, the magistrate will not release these documents or allow us to take copies.  Accordingly our client’s Paris lawyer will prepare a report which we will have translated that will be exhibited to a further affidavit to be put before the Court … You will therefore appreciate that we are unable to advise our client to discharge the injunction against your client and nor should you expect that we could do so.”

11.  The Plaintiff, however, changed position within a few days.  By a letter dated 14 May 1994 from B&M to DH, the Plaintiff advised IRC that:

“We have now received instructions from our client following a report by its Paris lawyer on the banking records in the possession of the Investigating Magistrate.

This report indicates (contrary to earlier information which had been provided by the Magistrate) that the loan in question has not been repaid out of the funds advanced to the 1^st Defendant by our client.

Accordingly, we will discharge the Mareva injunction against the 2^nd Defendant. …

We would not seek to resist the order for costs in favour of your client provided you can confirm there will be no claim for damages pursuant to our client’s undertaking. …”

12.  The parties’ solicitors then agreed over the telephone and confirmed by letters on 16 May 1994 that the Plaintiff would pay IRC’s costs and disbursements on an indemnity basis and that IRC would make no claim for damages pursuant to the Undertaking (“Settlement Agreement”).

13.  The Injunction was discharged by consent, and the action discontinued, as against IRC on 17 May and 22 August respectively.

14.  As against Mr Leiduck, the service of the Writ of Summons herein on him in Monaco was finally set aside and the Injunction against him discharged on 26 July 1995 for want of jurisdiction over him by the Hong Kong Courts.

15.  Then, by a Summons issued on 23 July 2007, in enforcement of the Undertaking, the Defendants apply for an inquiry as to the damages suffered by them by reason of the Injunction and for payment of the sum(s) found due upon such inquiry.

16.  However, having agreed not to enforce the Undertaking, it is incumbent upon IRC to have the Settlement Agreement set aside first before it can claim damages.

17.  Insofar as it is relevant to the present application, as pleaded in paragraphs 7, 9, 10(1), (3), (4) and 11 of the Consolidated Points of Claim filed on 18 December 2012, IRC’s case for setting aside the Settlement Agreement is premised partly upon the Plaintiff having made the following representations (“Representation”) to IRC between 29 April and 14 May 1994 which induced IRC to enter into the Settlement Agreement but which were false and made by the Plaintiff fraudulently or, alternatively, negligently:

(1)   that at the time of the application for the Injunction, the Plaintiff genuinely believed that, in July 1993, Mr Leiduck had applied US$6 million out of the US$20 million advanced by the Plaintiff to discharge the Loan;

(2)   that such belief was based on information obtained from:

(A) what Monsieur Lefort, had informed the Plaintiff’s lawyer in Paris, Maître Fridmanis, during their meeting on 5 April 1994;

(B) what Maître Fridmanis was able to extract from the files of Monsieur Lefort to which he was given access on 22 and 26 April 1994;

(3)   that, at least up to 14 May 1994, the Plaintiff did not have any copy of the files in Monsieur Lefort’s possession as he did not release the same to the Plaintiff or allow the Plaintiff to take copies;

(4)   that, at the time of the application for the Injunction, the Plaintiff had discharged its duty to make full and frank disclosure and had exhibited all relevant documents available to the Plaintiff in the Carolan Affidavit;

(5)   that it was only during the period between 11 and 14 May 1994 when the Plaintiff found out, for the first time, that the Information was false after considering, and as a result of, a report made by Maître Fridmanis; and

(6)   that the use of and reliance on the Information in the Carolan Affidavit was a genuine mistake on the part of the Plaintiff, which mistake was only discovered by the Plaintiff on about 14 May 1994.

18.  The Defendants say that the Representations were false and were either negligent or fraudulent because, according to the Defendants:

(1)   The Plaintiff had obtained from Monsieur Lefort on 12 April 1994 a copy of an Expert Report dated 11 March 1994 and prepared by one Jean-Humbert Croci (“Croci Report”), which was ordered by and submitted to Monsieur Lefort for the purpose of analysing the accounts of Mr Leiduck and companies controlled by him, including IRC’s account with Banque Nagelmackers.

(2)   Alternatively, the Plaintiff obtained a copy of at least a part or parts of the Croci Report from Monsieur Lefort prior to the application for the Injunction on 29 April 1994 and during the currency of the Injunction (from 29 April to 17 May 1994).

(3)   It was clear from the Croci Report that the Information was false.  

(4)   The Plaintiff did not disclose either to the Court or the Defendants the Croci Report, or the fact that the Plaintiff had knowledge or possession of the same, or part thereof, until 2010.

19.  The Defendants say that it was clear from the Croci Report that the Information was false because pages 20, 35 47 and 48 thereof showed the Loan to be still outstanding even as at 30 September 1993.

20.  Insofar as the Defendants are concerned, they first became aware of the existence of the Corci Report in early February 2010 when the Plaintiff disclosed, upon the Defendants’ request, the “report” prepared by the Plaintiff’s lawyer in Paris mentioned in B&M’s said letter dated 14 May 1994 to DH.  Such “report” took the form of a facsimile dated 13 May 1994 from Maître Fridmanis to B&M enclosing the cover page and pages 20 and 24 of the Croci Report (“Fridmanis Report”).  A full copy of the Fridmanis Report was provided to the Defendants under cover of B&M’s letter dated 26 June 2012 to Messrs Robertsons, solicitors for the Defendant.

21.  The Plaintiff’s case as to its receipt of the Croci Report is set out in the Answers to Interrogatories dated 9 August 2012 and filed on 14 August 2012 (“Answers”) by which Mr René von Samson-Himmelstjerna (“Mr RVS”), the Plaintiff’s in-house Senior Legal Counsel since 1998, stated, in answer to the Defendants’ interrogatory as to when the Plaintiff, either through its own employee or through its agent or representative, including but not limited to Maître Fridmanis, first obtained the Croci Report, that:

“Due to the passage of time since the relevant events took place in 1994, i.e. more than 18 years ago, the Plaintiff and its legal advisors are unable to ascertain the exact time when the Plaintiff first obtained the Croci Report. To the best of my information and belief, the Plaintiff first obtained part of the Croci Report (consisting of pages 47 to 53) sometime on or around 27 April 1994 (“Extract A”) from the Plaintiff’s solicitors in Paris. On an unknown date after 27 April 1994, the Plaintiff obtained another part of the Croci Report (consisting of pages 31 to 53) (“Extract B”) from the Plaintiff’s solicitors in Paris. Between 11 and 13 May 1994, the Plaintiff obtained a further part of the Croci Report (consisting of the cover page, page 20 and page 24) (“Extract C”) from the Plaintiff’s solicitors in Paris. Copies of Extract A and Extract B are attached herewith. A copy of Extract C has been provided to the Defendant under cover of a letter from Baker & McKenzie to Robertsons dated 2 February 2010. Due to the lapse of time, the Plaintiff is unable to ascertain whether, and if so, when, the Plaintiff obtained a full copy of the Croci Report during the relevant period up to 17 May 1994 (the “Relevant Period”). Under cover of Baker & McKenzie’s letter to Robertsons dated 26 June 2012, a full copy of the Croci Report was provided to the Defendants. This was first obtained by the Plaintiff in November 2011 through the Plaintiffs’ solicitors in Monaco, who obtained a full copy of the Croci Report from the Office of the Public Prosecutor of Monaco in or about October 2011.”

Defendants’ request for inspection and Plaintiff’s response in correspondence

22.  The Defendants first asked for, inter alia, the Extracts, to be produced for inspection by Robertsons’ letter dated 14 February 2013 to B&M, which was followed up by chasers dated 1, 15 and 27 March 2013.  None of these letters specifically referred to Order 24, rule 10(1).

23.  B&M responded by letters dated 15 February, 1, 8 and 28 March 2013 which said either that they were taking instructions or that they and the Plaintiff were still making inquiries.  Needless to say, the Plaintiff did not serve any notice under rule 10(2).

Plaintiff’s grounds of opposition to order for production for inspection

24.  The Plaintiff takes the following preliminary points of objection:

(1)   First, in the absence of any reference to Order 24, rule 10, the Defendants’ said request for inspection cannot fairly be regarded as a proper “notice” under rule 10(1) such that the Plaintiff was required to respond to such request within the 4 day time limit prescribed under rule 10(2).  Consequently, rule 11 (1)(a) cannot be said to have been triggered so as to entitle the Defendants to issue the Inspection Summons.

(2)   Second, the Defendants are not entitled to request for inspection of the Extracts under rule 10 or rule 11(1).  Although, reference was made in the Answers to the Extracts, copies of these extracts had already been provided to the Defendants.  If the Defendants wish to seek inspection of the originals, they ought only be entitled to make an application under rule 11(2), in which case it must be, but has not been, shown that the documents are in the possession, custody or power of the Plaintiff.

25.  The main substantive ground upon which the Plaintiff opposes the Inspection Summons is that it does not have possession, custody or power of the Extracts.  Despite an exhaustive search through the Plaintiff’s records, these documents can no longer be located.  It is thus impossible for the Plaintiff to produce them for inspection.

26.  In this regard, the Plaintiff’s evidence has developed as follows.  First, by his Third Affirmation filed on 10 April 2013, Mr RVS deposed that:

“I have caused a thorough search to be conducted for the original of the Extracts but such originals could not be found. In addition, I also searched for the relevant originals myself and could not locate any originals of the Extracts.” (paragraph 6)

“… I was unable to conduct the search for the originals of the Extracts myself during the period between 14^th February 2013 and 6^th March 2013. However, during that period, I instructed my colleague to undertake a search, but he could not locate any such originals of the Extracts.” (paragraph 8)

“In order to the sure that the Plaintiff no longer had the originals of the Extracts, I personally conducted a further search upon my return to my offices in Beijing after the adjournment of the Trial. I was unable to locate any such originals.” (paragraph 9)

27.  Then, by his Fourth Affirmation filed on 22 April 2013 (which Counsel for the Defendants could not have reviewed and taken into account before they lodged written submissions in support of the Inspection Summons on the same day), Mr RVS further explained that:

(1)   He has no direct knowledge of the various relevant events in 1994 that are the subject of these proceedings.

(2)   The persons within the Plaintiff who had direct knowledge of such events are no longer available to provide information or evidence due to the passage of time since those events.

(3)   He provided the Answers based on his understanding (true to the best of his information and belief) derived from information obtained by the Plaintiff and its legal advisors at the relevant time when the subject events took place.

(4)   In providing the Answers regarding when the Plaintiff first obtained the Croci Report, he had reviewed all the Plaintiff’s records relating to all disputes involving the Plaintiff and the Defendants which were passed on to him after he took over responsibility for handling those disputes in 1999, and he also had B&M reviewed their relevant records. 

(5)   He located, not Extract A or Extract B themselves, but copies of the same (“Plaintiff’s Copy Extract A” and “Plaintiff’s Copy Extract B” respectively). 

(6)   He was not able to locate Extract C or a copy of it within the Plaintiff’s records.  He therefore relied on a copy of the same extract that was attached to the Fridmanis Report which was provided to him by B&M (“B&M’s Copy Extract C”).

(7)   In providing the Answers, he did not have the Extracts, but relied on copies of these documents.

(8)   He learnt from B&M just recently in April 2013 that some handwritten markings/notations on the Plaintiff’s Copy Extract A and Copy Extract Bhad been redacted by them by reason of legal professional privilege. 

(9)   He and his colleague have conducted a thorough search of the Plaintiff’s records for the Extracts but were unable to locate them.  As far as he was aware, if they still exist, they would have been found within those records.  There are no other records in the Plaintiff’s possession, custody or power, apart from the ones that he and his colleague have searched, where the Extracts, if they still exist, can be found.

(10)        He has no knowledge as to the whereabouts of the Extracts.  Due to the lapse of time since they were received, neither he nor the Plaintiff can ascertain why the Extracts are no longer within the Plaintiff’s records or what may have become of them.  The records before 1999 were not kept by him and were only passed on to him in 1999.  The persons within the Plaintiff who kept the pre-1999 records are no longer available to provide information about such records.  Due to the long lapse of time since the Extracts were received, it is most likely that they no longer exist.

28.  Ms Kareena Teh, a partner of B&M having the conduct of this action on behalf of the Plaintiff, also disclosed in paragraph 7 of an Affidavit filed on 6 May 2013 (which was after Counsel for the Defendants have lodged supplemental written submissions in support of the Inspection Summons on 2 May 2013) that a part of B&M’s Copy Extract C, i.e. page 24 of the Croci Report which formed part of the Fridmanis Report, had been redacted by B&M before a copy of the same was provided to the Defendants on 2 February 2010 on the ground of irrelevance to these proceedings. 

29.  Ms Teh then goes on to say in paragraph 15: 

“I confirm that the redactions to the copies of Extracts A and B were made by reason of legal professional privilege or possible legal professional privilege and the redaction of the copy of Extract C was made by reason of irrelevance to these proceedings. I also wish to point out that the copy of the Croci Report provided to the Defendants under cover of B&M’s letter of 26 June 2012 had some handwritten markings / notations which were redacted at the time by reason of possible legal professional privilege. Since the redactions were made, B&M has been able to ascertain that the handwritten markings / notations on the copies of the Croci Report and Extract B are unlikely to be subject to legal professional privilege, whilst some of the handwritten markings / notations on the copy of Extract A are. Nonetheless, as the Plaintiff has nothing to hide, it is prepared to waive legal professional privilege in respect of the handwritten markings / notations on the copy of Extract A that are subject to legal professional privilege on the condition that the waiver is for the limited purpose of allowing the Defendants to consider the handwritten markings / notations on such extract and to make such use of them for the purposes of these proceedings only, and that such waiver should not be taken as a collateral waiver of legal professional privilege in respect of any other documents or correspondence. In the event that the Defendants accept and agree to the limited waiver in the aforesaid terms in writing, the un-redacted copy of Extract A can be made available to the Defendants for their inspection at a mutually convenient time. For avoidance of doubt, this waiver of legal professional privilege is a limited purpose waiver and should not be constructed as a waiver of legal professional privilege generally. The un-redacted copies of Extract B and the Croci Report can also be made available for inspection. In the meantime, copies of the un-redacted copies of Extract B and the Croci Report appear at Tab 8 and Tab 9 respectively. I wish to clarify that B&M does not have the original copies of three extracts of the Croci Report as they were received by the Plaintiff at the relevant time, and, as affirmed by Mr. von Samson at paragraphs 6 of the 3^rd affirmation and at paragraph 12 of the 4^th Affirmation of Rene von Samson-Himmelstjerna dated 17 Aril 2013 and filed and served on 22 April 2013, neither does the Plaintiff.”

No order should be made in respect of the Extracts

30.  As a result of the Plaintiff’s said evidence, though not giving up on the Inspection Summons entirely, Mr Horace Wong SC (with him Mr Clark Wang) for the Defendants (rightly in my view) do not press for the production of the Extracts (i.e. the actual original copies as received by the Plaintiff in 1994).

31.  Nevertheless, to do justice to the submissions that Counsel have made in respect of these original copies, I shall briefly explain why I consider Mr Wong SC to have taken the right course in this regard.

32.  I see nothing in either of the preliminary objections to the Inspection Summons mentioned in paragraph 24 above:

(1)   First, the only provisions for the production by a party of documents for inspection by another party are Order 24, rules 9 to 11, which cover documents referred to in a list of documents (rule 9), documents referred to in pleadings, affidavits, witness statements and expert reports (rule 10) and any other relevant documents in the possession, custody or power of a party (rule 11(2)).  The Extracts are not referred to in any list of documents.  In fact, there has not been any general or Court ordered discovery for the purposes of the Defendants’ application for inquiry.  Robertsons’ letter of 14 February 2013 to B&M, though not specifically citing rule 10(1), did refer to the Answers as being the document making references to the Extracts.  An affidavit filed in answer to interrogatories is an “affidavit” for the purposes of Order 24, rule 10: see Zida Technologies Ltd v Tiga Technologies Ltd[2001] 3 HKLRD 698, §35 per Deputy High Court Judge McCoy SC (following Moore v Peachey [1891] 2 QB 707 at 708 per Denman and Willes JJ).  It should, in my view, be clear to the Plaintiff that the Defendants were seeking inspection under rule 10(1).  That being the case, there is no reason why Robertsons’ 14 February 2013 cannot be regarded as a rule 10(1) notice so that the Plaintiff’s failure to serve a notice under rule 10(2) within the time prescribed triggered off the power of the Court to make an order under rule 11(1).

(2)   Second, I do not follow why (and the Plaintiff has not suggested any reason why) the provision of copies of the Extracts by the Plaintiff to the Defendants prior to Robertsons’ 14 February 2013 letter would displace the application of rule 10 so that an application for inspection of the originals of the Extracts must then be made under rule 11(2).  The documents remain having been referred to in an affidavit.

33.  Turning then to the Plaintiff’s substantive ground of opposition, I can find no cause for doubting the Plaintiff’s evidence that it no longer has within its possession, custody or power any of the Extracts, particularly, having regard to the facts that the documents were received by the Plaintiff some 19 years ago in 1994 and that the Plaintiff would have no reason to hold onto them at least after July 1995 when it would appear to them that this action had concluded.

34.  An order for production of document for inspection will not be made if “good cause” is shown.  The absence of possession, custody or power of the documents sought to be inspected, while not depriving the Court of the jurisdiction to order inspection under Order 24, rules 10 and 11(1)[3], may amount to good cause and is a factor to be taken into account by the Court in deciding the discretion whether to order inspection on the particular facts of the case.

35.  The Defendants initially rely heavily on Rafidain Bank and Zida Technologies Ltd in which production for inspection was ordered despite the defendants’ professed lack of possession, custody or power of the documents.  However, I note that in both of these cases, the evidence suggested that the party against whom inspection was sought, though not in possession, custody or power of the documents in question, would be able to obtain them from third parties (i.e. the Patriotic Union of Kurdistan whose right to receive the money claimed was asserted by the first defendant in Rafidain Bank[4] and the mainland manufacturers who appeared to be the customs agent for the defendant in Zida Technologies[5]).

36.  I agree with Mr John Yan SC (with him Ms Sara Tong) for the Plaintiff that the fact that a party from whom inspection is sought does not have, and has no means to obtain, the documents sought to be inspected (which is the case here) ought to be regarded as a sufficient reason for the Court not to order inspection: see Quilter v Heatly (1883) Ch D 42, per Jessel MR at p 49.

37.  For the above reasons, had my ruling been required, I would have declined to order production of the Extracts.

Defendants’ alternative argument

38.  Unfortunately, that is not the end of the matter.

39.  Following Ms Teh’s said Affidavit, by a letter dated 15 May 2013 from Robertsons to B&M, the Defendants, whilst standing by the submissions which we have made in support of the Inspection Summons and considering the Plaintiff’s explanations in respect of the Extracts to be entirely unsatisfactory, indicated that they would be prepared to withdraw the Inspection Summons on the conditions:

(1)   that the Plaintiff pays the Defendants’ costs of the summons incurred up to date to be assessed on a gross sum basis;

(2)   that the Plaintiff provides for inspection by the Defendants the un-redacted Plaintiff’s Copy Extract B and the entire (presumably un-redacted) Croci Report within 14 days on a date and at a time to be mutually agreed;

(3)   that the Plaintiff provides for inspection by the Defendants the un-redacted Plaintiff’s Copy Extract A within 14 days on a date and at a time to be mutually agreed.  As for the conditions sought to be imposed by the Plaintiff for allowing inspection of this document, the Defendants consider them to be entirely unnecessary as there is in any event an implied undertaking given by the Defendants not to use these documents for any collateral purposes.

40.  Upon rejection of this proposal for the disposal of the Inspection Summons by the Plaintiff, Mr Wong SC then contends that the wording of paragraph 1 of the Inspection Summons (quoted in paragraph 1 above) is capable of including the copies which the Plaintiff or its solicitors had used to make the copies of the Extracts provided to the Defendants, i.e. the Plaintiff’s Copy Extract A, the Plaintiff’s Copy Extract B and B&M’s Copy Extract C (“Copy Extracts” when referred to collectively), but without any redactions.

41.  In short, according to Mr Wong SC, a request for the original of a document can be construed as a request for an intermediate copy of the document that was used to be reproduce an end copy. 

42.  I am unable to agree with Mr Wong SC that paragraph 1 of the Inspection Summons, as it is presently drafted and without amendment, can include the Copy Extracts.

43.  First, if one goes back to the Answers, the terms “Extract A”, “Extract B” and “Extract C” are plainly shorthand expressions used by Mr RVS to refer to the three partial documents actually received by the Plaintiff on various dates in 1994.  As such, they must refer to the very documents that were actually received by the Plaintiff in 1994.  These shorthand expressions have been adopted in Robertsons’ 14 February 2013 letter and paragraph 1 of the Inspection Summons to identify the documents the production of which is required for inspection.

44.  Second, presumably to prevent any doubt from arising, the Defendants add the word “originals” in the description of the documents that are the subject matter of the request/application in Robertsons’ 14 February 2013 letter and paragraph 1 of the Inspection Summons.  Such word can only have been used to make it clear that the Defendants are after the actual Extracts that were received by the Plaintiff in 1994.  Indeed, at the time of the issue of Inspection Summons, the Defendants were unaware that the Plaintiff no longer had those documents or that the attachments to the Answers had been reproduced with the use of copies of the Extracts.

45.  Third, on 11 April 2013, the 22^nd day of this trial, in answer to my question, Mr Wong SC clarified and confirmed that the Defendants are seeking inspection of the “original” Croci Report Extracts, as they were first received by the Plaintiff.

46.  For these reasons, I am of the view that the Copy Extracts are plainly not the documents sought in the Inspection Summons.  In Mr Yan SC’s words, the application that the Plaintiff has been summonsed to meet is not for the production of the Copy Extracts.

Orders

47.  I dismiss the Inspection Summons.

48.  On costs, subject to any submissions that the parties may wish to make, in my opinion, the Defendants are entitled to issue the Inspection Summons and to maintain the application made thereby up to a reasonable time after being served with Mr RVS’s Fourth Affirmation (which explains for the first time that the copies of the Extracts that have been provided to the Defendants were made, not from the Extracts, but copies thereof) but should thereafter have reconsidered their stance.  Looking at the matter in the round, in particular, the amount of work done by the parties before and after Mr RVS’s Fourth Affirmation, I make an order nisi that there be no order as to costs.

Postscripts

49.  Although I refuse to order the Plaintiff to produce the Copy Extracts under the Inspection Summons, I would like to make the following observations with a view to assisting the parties.

50.  Now that the Plaintiff has referred to the un-redacted copies of the Plaintiff’s Copy Extract A, the Plaintiff’s Copy Extract B and the Croci Report in Mr RVS’s Fourth Affirmation and Ms Teh’s Affidavit, there is no reason why the Defendants cannot ask to inspect them under rule 10(1).

51.  In view of paragraph 15 of Ms Teh’s Affidavit, there should be no difficulty regarding the un-redacted Plaintiff’s Copy Extract B and Croci Report.

52.  As for the un-redacted Plaintiff’s Copy Extract A, I note that, while asserting legal professional privilege in respect of the handwritten markings/notations on the document, the Plaintiff is prepared to waive such privilege if the Defendants accept the waiver to be limited to allowing them to consider the said markings/notations (and not to be extended to any other documents or correspondence) and agree to use those markings/notations only for the purposes of these proceedings (and not any other collateral purposes).  Although the Defendants take issue with these conditions, as I understand it, they are not refusing to be bound in the way demanded by the Plaintiff.  Rather, they have taken and expressed the view that the conditions are unnecessary as they would in any event be implicitly imposed by the implied undertaking.  That being the case, there is no real or meaningful difference between the parties regarding the scope of the Plaintiff’s waiver or the use to which the handwritten markings/notations can be put by the Defendants.  I would be very surprised and disappointed if the parties should see fit to waste any time and costs on debating this matter.

[1] This description of the documents sought to be produced for inspection is taken from paragraph 1 of the Inspection Summons.

[2] US$20 million less US$5 million which had been recovered by the Plaintiff under a bank guarantee provided by IRSAM.

[3] See Zida Technologies Ltd, supra, per DHCJ McCoy SC at §42, applying Rafidain Bank v Agon Universal Sugar Trading Co [1987] 1 WLR 1606 (CA).

[4] See Nourse LJ at 1612B-C.

[5] See DHCJ McCoy SC at §47.