XCHRX ZHU KUAN COMPANY OF ZHUHAI SEZ v. BRICKELL LIMITED (In Liquidation) AND OTHERS

1995 No. Cl42

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. The plaintiff's case in this action is a fairly complicated story, but it is sufficient, for the purposes of the matter before me, to say that the plaintiff alleges that the first defendant was holding 106.2008 metric tonnes of tin, or the proceeds of the sale of this tin, on trust for the plaintiff, and that the second and third defendants were aware of this because the plaintiff told them it had a claim to the tin. The second and third defendants were the liquidators of the first defendant. The plaintiff says that the second and third defendants owed a duty to the plaintiff to, in effect, account to it for the tin or the proceeds, and to investigate its claim, but failed to do so.

2. The defence of the first, second and third defendants consists, Mr Wong accepts unapologetically, of little more than denials and non-admissions. It says very little affirmatively.

3. Not surprisingly, the plaintiff has filed no reply to the defence. In a letter dated 13 June 1995, the plaintiff's solicitors wrote to the solicitors for the first, second and third defendants saying ". . . we are not in a position to file a reply until interrogatories to be addressed to your client and/ or their employees are to be served and answered by the addressees. We shall serve upon your client interrogatories soon."

4. The pleadings closed on 18 July 1995. On 2 September 1995, the plaintiff took out interrogatories. These interrogatories consist of nine straightforward requests. It is agreed that they fall into three divisions -

• Those under which the plaintiff seeks details of what the second and third defendants did to investigate its claim.

• Those under which the plaintiff seeks details of the steps taken by the second and third defendants to ensure that there was a proper distribution of the assets of the first defendant.

• Those under which the plaintiff seeks details of the stocks of tin handled by the first defendant. The purpose of the inquiries under this head is identify what the plaintiff says was its tin.

5. On 15 September 1995, the first, second and third defendants took out a summons seeking an order that the interrogatories be withdrawn. This is the summons now before me.

6. Interrogatories must relate to a matter in question between the parties and must be necessary either for disposing fairly of the matter or for saving costs.

7. Mr Wong argues that the plaintiff falls at the first hurdle because it cannot show that the interrogatories are necessary for either purpose. He says that the information that the plaintiff seeks may be revealed by discovery, the exchange of witness statements or the cross-examination of the second and third defendants. There is no suggestion that the interrogatories do not relate to a matter in question.

8. It is unlikely, in my view, that what the plaintiff wants to know will be revealed under the process for the discovery of documents. The plaintiff's interrogatories do not ask about documents. If the defendant's discovery says nothing about documents that relate to the plaintiff's queries, that will not mean that the second and third defendants have nothing to say about the queries raised in the interrogatories. If discovery does reveal, say, a letter making inquiries about the plaintiff's claim, that will not mean that this reveals all that is to be said about the queries.

9. Under an exchange of witness statements, what is said by the second and third defendants will be directed at what evidence they can give that will support the defendants' case; they will not be statements of the facts that might go to assisting in the establishment of the plaintiff's case. It is not for the second and third defendants to establish that they had a duty to the plaintiff, or what they did when the plaintiff made its claim. There is no need for them to say anything in their statements about these matters, and, if it is their attitude that they want to tell the plaintiff as little as possible, as seems to be the case judging from the nature of the defence filed, they will not say anything that will help the plaintiff prepare for trial. In any event, the plaintiff must also supply witness statements. Answers to the interrogatories will tell the plaintiff what it has to establish in the areas covered by them, and, therefore, what should be contained in its witness statements.

10. In the circumstances of this case, I do not think it is reasonable to expect the plaintiff to wait until cross-examination until it knows what the first, second and third defendants have to say about the plaintiff's case in the areas covered by the interrogatories. By that stage, the plaintiff will have prepared for trial, and, perhaps, incurred costs to investigate matters that may be unnecessary.

11. Mr Wong next says that the interrogatories are objectionable because they are "fishing". Interrogatories are said to be "fishing" if they seek to gather facts to establish a line of attack not already pleaded, or which seek to ascertain whether a fact exists where the interrogating party has no reasonable grounds for belief in the existence of the fact. The first is certainly not the case here. The plaintiff pleads that the second and third defendants had a duty to it in relation to the tin, and breached that duty. The interrogatories go to that matter. And, on the plaintiff's case, it has reasonable grounds to believe that the second and third defendants either did not investigate its claim properly or, having done so, did not distribute the assets properly. There is nothing unreasonable about this line of inquiry.

12. In any event, Mr Wong says, the plaintiff is seeking to require the first, second and third defendants to set up an affirmative case, when they are not obliged to do so. I do not think this is so. The interrogatories are seeking facts that would assist in supporting the plaintiff's case. Of course, it may be that, incidentally, the effect of the interrogatories will be to oblige the first, second and third defendants to state their case, but this is not their purpose. This consequence must be inevitable in most cases, it being so that pleadings are not independent, but linked together. If a party asks interrogatories about its own case, this must, to some extent, have some impact on the other party's pleaded case.

13. It seems to me that the interrogatories are necessary for disposing fairly of the matter. The plaintiff cannot properly prepare for trial unless it knows what evidence it needs to establish the facts that are crucial to its case. If it does not have answers to these interrogatories, the plaintiff must be cautious and assume that it needs every possible piece of evidence that will help to establish its case. A large part of the costs of doing this will be saved if, as I suspect the second and third defendants will be able to do without difficulty, they give these details relating to the plaintiff's claim.

14. In the result, I dismiss the summons. Mr Wong asks that, in this event, the first, second and third defendants be given 28 days to answer the interrogatories. This seems reasonable, and I so order.

15. On the face of it, the plaintiff is entitled to its costs in any event, and I make an order nisi accordingly.