XCHRX HANG YICK PROPERTIES MANAGEMENT LTD. v. THE INCORPORATED OWNERS OF KAM FUNG BUILDING, YUEN LONG

HCA 6983/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 6983 OF 1996

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D E C I S I O N

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1. There was an application dated 19 May 2000 made by the Defendant for the following order:-

"The documents produced by the Plaintiff to the Defendant on 18 May 2000 shall not be admitted as evidence given that the discovery and inspection of documents has been closed pursuant to the order given by Master Chung dated 4 December 1997 and that the case has been set down for trial on 21 June 2000."

The marginal notes of this summons state that the application was made pursuant to "O. 24 and O. 38 and Inherent Jurisdiction". When I enquired with Mr Ho for the Defendant which of the provisions in O. 24 and/or O. 38 are relied upon by the Defendant, he frankly admitted that none of the Rules of the High Court provides for that kind of relief. In the end, he concedes that he will have to rely on the court's inherent jurisdiction.

2. The Plaintiff brings this action as the former manager appointed by the deed of mutual covenant of a building at Castle Peak Road, Yuen Long known as "Kam Fung Building". The Defendant is the Incorporated owners of that building. The Plaintiff claims that it has performed its duties as the building's manager since 1988 and has thereby incurred and accumulated a deficit of HK$267,540.07 until its appointment was terminated in October 1994. The said sum was said to have been incurred during 1989 to October 1994.

3. In the Amended Defence and Counterclaim, the Defendant alleges that the Plaintiff has breached the terms and conditions of the deed of mutual covenant in failing to:-

(a) deliver all books and accounts in relation to the control, management and administration of the said building to the Defendant or the owners of the said building;

(b) provide an accurate summary of all items of income and expenditure for the management of the said company but only a fair summary of the same;

(c) report on the balance sheet as at the date of termination of the appointment of the manager.

By reason of the above, the Defendant says that the Plaintiff is unable to prove it has incurred the sum claimed in this action. Further, the Defendant alleges expenses which were not wholly, exclusively or properly incurred in the management of the said building were included in the sum claimed. There are other claims and allegations made in the Defendant's pleading which do not appear to be related to the present application.

4. Mr Ho informed me at the hearing of this application on 22 May 2000 that the trial of this action is scheduled to start on 21 June and end on 23 June. He complained that the vouchers, invoices and other accounting documents for the period from February 1988 to June 1991 "pre-1991" were not discovered by the Plaintiff until Thursday 18 May 2000. He showed me a letter dated 17 July 1998 from the Plaintiff's former solicitors claiming that those documents were not in the Plaintiff's possession. That claim now turns out to be wrong because those documents were in fact still possessed by the Plaintiff.

5. I managed to ascertain from Mr Ho that in this application, the Defendant is in fact asking for the trial date to be vacated so that it can have a proper opportunity to deal with the documents recently discovered by the Plaintiff. It is probably for this reason that on 26 May 2000 the Defendant took out another application asking, in essence, for the trial of the action fixed to be heard on 21 June 2000 to be adjourned.

6. Mr Wong for the Plaintiff argues that even if the Plaintiff had been at fault in not disclosing the "pre-1991" accounting documents earlier, that state of affairs has been corrected by the further discovery made on 18 May 2000. The Plaintiff has adduced evidence by way of an affirmation of Tang Yuen Lok dated 3 June 2000 to the effect that there ought to be more than ample time for the Defendant (since 18 May 2000) to produce an accounting report by 21 June 2000. Mr Ho does not object to this affirmation being used in this application but contends that the Defendant needs to perform a detailed verification of the accounts by examining all the documents and that would necessitate a much longer time than what Mr Tang says in his affirmation. I do not agree with Mr Ho. In view of Mr Tang's affirmation, I consider that a discovery of the "pre-1991" accounting documents on 18 May 2000 will provide the Defendant with an adequate opportunity to compile an accountant's report by 21 June if it proceeds to do so with due diligence since about 18 May 2000.

7. For this reason, the application to adjourn is refused. For completeness' sake, I should also dismiss the Defendant's summons dated 19 May 2000 not only for the above reasons but also the reason that this summons fails to ask for the proper relief.

8. Mr Wong asks for leave to file and serve a further witness statement. It appears to me that no prior notice has been given to the Defendant about this. Further, the proposed witness statement has not been shown to the court or the Defendant. In these circumstances, I do not consider it appropriate to decide the matter one way or the other at present. No order is therefore made on the Mr Wong's application at this stage.

9. The parties agree that time and costs may be saved by the case being heard by a bilingual judge and therefore ask for such a direction now. I agree and thus order that the action be tried before a bilingual judge (if available).