XCHRX WOON KAY CHANG v. EQUITABLE BANKING CORPORATION

HCA 10693/97

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 10693 OF 1997

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J U D G M E N T

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1. This is an appeal from the order of Master Cannon made on 9 February 2001 whereby she ordered that the defendant do give discovery of all documents relating to HCA no. 3811 of 1996 ("the other action") within 14 days.

2. In this action, the plaintiff claims against the defendant bank, for, inter alia, an account of all sums found due from the defendant to the plaintiff in respect of monies deposited by him or on his behalf with the defendant and for payment of all sums found due. The plaintiff's case is that the defendant through its employee, Carmen Go the third party, had acted for him in the management of his investments and had used the monies deposited into his various accounts with the defendant. The defendant denies that the third party was authorised to act as an investment adviser and asserts that the dealings she had with the plaintiff in respect of his investments were carried out by her in her own personal capacity and not on behalf of the defendant with the full knowledge and consent of the plaintiff.

3. The plaintiff's solicitors came across the other action and sought discovery from the defendant of all documents relating to the other action. The plaintiff's application before the Master was made under O.24; r.3, R.H.C.

4. The plaintiff relies on the fact that the other action was instituted by two other customers of the defendant bank against the defendant bank as well as against the third party. There was only an endorsement of claim filed in the other action claiming damages for breach of contract, alternatively damages for conversion, alternatively damages for deceit in relation to the payment by the plaintiffs in the other action to the defendant bank for a sum of US$250,000 on or about 9 April 1990. This was during the period of time that the plaintiff was also a customer of the defendant. As the evidence shows, the other action was never proceeded with as it was settled shortly after commencement on a no admission as to liability basis. No defence was filed.

5. The plaintiff relies on the fact that in its amended defence in these proceedings, the defendant has raised a number of issues, in particular, by paras 4 and 5 thereof. It is pleaded that the third party was engaged on an honorary basis by the defendant as a consultant on business development and that she was not given any responsibility or duty other than to solicit and refer customers to the Hong Kong branch of the defendant. It is also pleaded that she had no authority to act as investment adviser for any customer. The plaintiff says, therefore, that the documents relating to the other action are relevant in these proceedings and ought to be disclosed.

6. As is stated in the marginal note 24/3/7 in the Hong Kong White Book 2001, an order may be made for a further and better list of documents where it appears, inter alia, from admissions made that the party making discovery has or has had other relevant documents in his possession, custody or power. It is also stated there that an order may be made where the basis on which the first list of documents was made is palpably wrong ―― where the party has misconceived his case so that the court is confident that if he had conceived it properly he would have disclosed further documents.

7. In my view, on the evidence before me, there is no admission made by the defendant that it has relevant documents in its possession, custody or power. On the contrary, in the 3rd affirmation of Santi Chung Chun King, affirmed recently on 6 March 2001 which was after the Master's order, he has affirmed that the documents relating to the other action are irrelevant to the matters stated in the pleadings in these proceedings. He has also affirmed that in any event, the claim in the other action was by a different party for a different type of transaction than that referred to in the pleadings in these proceedings and that the documents do not relate to any complaints made by customers about investments undertaken by the third party for those customers.

8. As I have said the other action proceeded no further than the endorsement of claim. As no defence was filed, it is not possible to ascertain from the court documents what the issues between parties were or what they would have been. It has not been demonstrated to me that the other action is indeed relevant to the issues in these proceedings. In the circumstances, it seems to me that the matters stated in the 3rd affirmation of Santi Chung Chun King should be regarded as conclusive at this interlocutory stage of the action (see also marginal note 24/7/1 in the Hong Kong White Book 2001). He has affirmed that the documents relating to the other action are irrelevant to the matters stated in the pleadings in these proceedings. I cannot say that that is palpably wrong. In the circumstances, the discovery sought should be refused. The appeal is allowed and the order of Master Cannon is set aside.

[After hearing submissions on costs]

9. As the appeal turns upon evidence filed recently, I think that the proper order for costs is that the costs order made by Master Cannon should stand, that is, costs to the plaintiff in any event. As for the costs of the appeal, it should be costs to the defendant in any event.