LAU HO MING v. WONG PAK HO

DCEC 342/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 342 OF 2009

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DECISION

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1.  This is an application by the Applicant under s 47B of the District Court Ordinance (Cap 336) for discovery against a non-party. For reasons explained below, the application is dismissed with an order that the Applicant should pay one-third of the costs of the party against whom discovery is sought.

Background

2.  The Applicant, an employee of the Respondent who suffered injury at work on 1 April 2007, is the successful party in DCEC 342/2009.  On 8 February 2010, final judgment was entered against the Respondent for the sum of HK$167,817 with interest and costs.  Despite industrious efforts on the part of the Applicant’s solicitors, the Applicant was unable to enforce the judgment against the Respondent. At the end, the Applicant turned to the Employees Compensation Assistance Fund Board (“the Fund Board”) for relief payment out of the Employees Compensation Assistance Fund.  Disputes arose as to whether the Applicant can be considered an “eligible person who is unable to recover from an employer”[1]. After debating back and forth with solicitors for the Fund Board, the Applicant’s solicitors finally agreed to commence bankruptcy proceedings against the respondent. However, they soon found themselves in another dead end.  They were unable to commence bankruptcy proceedings against the Respondent because they were unable to identify him with sufficient precision by reference to his HKID card number or his passport number[2]. The solicitors for the Fund Board suggested that the Applicant should seek an order against the bank with whom the Respondent had kept an account for disclosure of the Respondent’s account opening documents, which might contain his HKID card number[3]. The Applicant’s solicitors then took out this application against the Bank of China (Hong Kong) Limited (“the Bank”) for the disclosure of the respondent’s account opening documents.

Discussion 

3.  Section 47B of the District Court Ordinance (Cap 336) provides as follows:-

“(1) A party to proceedings in an action, in which a claim is made, may apply to the Court in accordance with rules of court for an order for discovery of documents against a person who is not a party to the proceedings and who is likely to have or to have had in his possession, custody or power documents relevant to an issue arising out of the claim.”

4.  An application under s 47B must be in accordance with rules of court.  The relevant rules are Order 24, rule 7A and rule 8 of the Rules of the District Court (Cap 336H), which provide:-

“7A (2) An application after the commencement of proceedings for an order under section 47B(1) of the Ordinance for the disclosure of documents by a person who is not a party to the proceedings shall be made by summons, which must be served on that person personally and on every party to the proceedings other than the applicant.

(3) A summons under paragraph (1) or (2) shall be supported by an affidavit which must –

…

(b) in any case, specify or describe the documents in respect of which the order is sought and show, if practicable by reference to any pleading served or intended to be served in the proceedings, that the documents are relevant to an issue arising or likely to arise in the proceedings and that the person against whom the order is sought is likely to have or have had them in his possession, custody or power.

8 (2) No order for the disclosure of documents shall be made under section 47A or 47B of the Ordinance, unless the Court is of opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs.”

5.  On the issue of relevance required under s 47B(1) and the court rules, To J said in Tullett Prebon (Hong Kong) Ltd v Chan Yeung Fong Nick, unreported, HCA 2197/2009 (date of judgment: 9 June 2011):-

“13 Usually, the most hotly contested issue in discovery is relevancy. In The Compagnie Financiere Du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 (CA), Brett LJ held that a document is relevant if:-

“… it is reasonable to suppose, contains information which may – not which must – either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary … if it is a document which may fairly lead him to a train of inquiry, which may have either of these two consequences.”

The Peruvian Guano test remains the test of relevance today.  In considering the issue of relevance, the general approach is to look at the documents sought against the causes of action pleaded and issues to be litigated.”  (highlight added)

6.  The reference to the Peruvian Guano test is obviously made in relation to the issues to be resolved between the parties in the underlying cause or matter.  My reading of s 47B and the relevant rules is that only those documents that are relevant to an outstanding or anticipated issue in the underlying proceedings and necessary either for fair disposal of the cause or matter or for saving costs can be made the subjects of an application under s 47B.  Such reading is supported by the words highlighted in the above passage.

7.  The Peruvian Guano test has been applied time and again in applications for specific discovery against a non-party.  However, as far as I am aware, the court’s power under s 47B has never been invoked in a situation similar to the present one. Given that the present proceedings have already been disposed of, the documents sought cannot be said to be relevant to an issue arising or likely to arise in these proceedings. Hence, the Applicant’s application must be dismissed.

Costs

8.  An innocent bystander is normally entitled to the costs of the application and of compliance with the discovery order: Order 62, rule 3(12).  However, a different order may be made if the court considers it just to do so.  In considering whether to make a different order, regard must be had to all the circumstances including the extent to which it is reasonable for the person against whom the order is sought to oppose the application: S (a child) v W Primary Care Trust [2004] EWHC 2085.

9.  In this case, notwithstanding the neutral stance said to have been taken by the Bank, Mr. Ng, solicitor for the Bank, has raised a few objections to the Applicant’s application.  In particular, he argues that bankruptcy proceedings against the Respondent are inherently implausible and bound to fail.  What makes him say so is that the Applicant’s solicitors mentioned in one of their letters to the solicitors for the Fund Board that they believed that the Respondent had fled to mainland China to make himself judgment-proof[4]. In the light of what is said in the letter, Mr Ng, citing s  4(1)(c) of the Bankruptcy Ordinance (Cap 6), argues that the intended bankruptcy proceedings are misconceived and bound to fail.

10.  Section 4(1) of the Bankruptcy Ordinance provides as follows:-

“(1) A bankruptcy petition shall not be presented to the court under section 3(1)(a) or (b) unless the debtor-

(a) is domiciled in Hong Kong;

(b) is personally present in Hong Kong on the day on which the petition is presented; or

(c) at any time in the period of 3 years ending with that day –

(i) has been ordinarily resident, or has had a place of residence, in Hong Kong; or

(ii) has carried on business in Hong Kong.”

11.  Relying on s 4(1)(c) and reminding me that it was more than five years ago that the Respondent openly announced that he would leave Hong Kong to make himself judgment proof, Mr Ng argues that the Respondent must have stayed out of Hong Kong for more than 5 years.

12.  It should be noted that it is not necessary to show that the debtor was ordinarily resident or had a place of residence in Hong Kong throughout the whole 3 years preceding the presentation of the bankruptcy petition.  The key question is whether the debtor was ordinarily resident or had a place of residence in Hong Kong at any time during the period of 3 years: Re Ip Pui Man Nina, unreported, HCB 309/2010.

13.  Even though the Respondent did announce sometime in 2009 that he would leave Hong Kong to avoid enforcement of judgment, that announcement alone cannot be taken as evidence that he did not have a place of residence or was not ordinarily resident in Hong Kong at any time in the last 3 years.  Hence, I reject Mr. Ng’s argument that the announcement made by the Respondent will constitute an absolute bar to bankruptcy proceedings.

14.  Furthermore, the Respondent used to have a business and an address in Hong Kong, chances are he was, and presumably is still domiciled in Hong Kong.  As explained by Deputy Judge L Chan (as he then was) in Re Ku Chu Keung (a debtor) [2007] 2 HKLRD 292 (English translation unreported, HCB 3394/2005, 12 June 2006), the domicile of a person is deemed to continue until it is proved that he has acquired a new domicile.  An abandonment or change of domicile is a serious issue which cannot be inferred without satisfactory proof.  In this case, there is simply no evidence that the Respondent has changed his domicile.

15.  On the information hitherto available, I am unimpressed by Mr Ng’s argument that the disclosure of the respondent’s HKID number will be of no help at all because the intended bankruptcy proceedings against the respondent are bound to fail.

16.  Mr Ng also draws my attention to the duty of confidentiality owed by a bank to its customers.  The short answer is that confidentiality per se is no bar to discovery unless the information sought is privileged: Lee Hing Sang v Estate of Li Kwan, deceased, unreported, HCPI 665/2009, 31 August 2012.

17.  Taking all the factors into account, I will allow one-third of the Bank’s costs.

18.  I make the following orders:-

(1) The applicant’s summons dated 9 July 2015 be dismissed;

(2) the applicant should pay one-third of the Bank’s costs of and occasioned by this application, to be taxed if not agreed; and

(3) the applicant’s own costs to be taxed in accordance with Legal Aid Regulation.

19.  The above costs order nisi shall become absolute in 14 days in the absence of an application for variation.