HO LAI CHUEN, CADIA t/a RESOLUTION SOFTWARE CONSULTANTS v. XEROX (HONG KONG) LTD.

HCA6454/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. HCA 6454 OF 1997

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R U L I N G

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1. This is the seventh day of a trial between the parties relating to an alleged breach of contract for the sale and purchase of a certain computer software program. Ever since the first day of the trial, the defendant's side is assisted by LiveNote-taker, providing instantaneous on screen transcript service of the trial.

2. Moreover, at the end of each day, a hard copy of the transcript is provided for the use by the defendant which engaged the LiveNote-taker. With the agreement of the plaintiff's side, the court has also been made available the use of a laptop displaying the instantaneous transcript produced by the LiveNote-taker, as well as a hard copy of the transcript on a daily basis.

3. I emphasise the agreement of the plaintiff because, without the agreement of the plaintiff, as I had said, or ruled, on the first day of the hearing, I would not have allowed the laptop to remain on my table or allowed the provision of the transcript in the form of a hard copy to me on a daily basis, my view being that this would amount to a unilateral communication with the court by one party.

4. This morning Mr Kerr, counsel for the plaintiff, made an application for discovery of the LiveNote transcript, both in relation to the soft form as well as the hard form - or the soft copy as well as the hard copy.

5. He relied on Documentary Evidence (7th edition) by Charles Hollander QC and Tom Adam, paragraph 9-12 and paragraph 9-13, to the effect that transcript of proceedings in open court, or for that matter in chambers, taken by anyone, including shorthand writers and, for that purpose, including LiveNote-taker, does not attract any legal professional privilege and is therefore liable to be disclosed by the party engaging in the note-taking process.

6. The relevant passages in the textbook relied on a number of older English authorities, including Re Worthwick (1888) 38 Ch D 370, Rawstone v Preston (1885) 30 Ch D 116, as well as Ainsworth v Wilding [1900] 2 Ch 315, all to the effect that no privilege attached to these shorthand notes or transcripts and they should be disclosed by the party obtaining the notes or the transcripts.

7. Mr Kerr therefore argued that, similarly, the LiveNote transcript obtained by the defendant in the present case should be disclosed.

8. This application was objected to by Mr Jat, counsel for the defendant. Mr Jat argued and pointed out that in all those authorities relied on by Mr Kerr, they related to discovery of transcript obtained in a previous set of proceedings, and therefore Mr Jat drew the distinction that, whereas the transcript could be relevant to either the issues in the second action or the issue of credibility in the second action, and therefore the transcript in the first action should be disclosed, the situation is different when one is talking about discovery of the transcript of the trial in the very action in which the trial took place. So Mr Jat argued that the transcript of the trial itself could not be relevant to the issues in the action.

9. For my part, I cannot see any logical distinction between the two. Either the transcript is relevant to the issues, or it is not relevant to the issues. Either the transcript is relevant to the question of credibility, or it is not relevant to the question of credibility. The fact that it so happens that the issues or the question of credibility arose in a second action does not alter the fact or the question of relevancy. A second action can raise precisely the same issues as an earlier one.

10. Moreover, I do not agree with Mr Jat when he argued that, at trial, it is only what a witness orally said and how he or she behaved, i.e. the demeanour, which would be relevant to a trial judge. In my judgment, a record of what the witness said is a document relevant by itself to, for example, the truthfulness of what he or she said, as well as being relevant to the question of credibility of that witness.

11. As Mr Kerr pointed out, very often in an appeal, all that the Court of Appeal would have, or would have to rely on, is the transcript in order to decide the issues between the parties in that action, or in appropriate cases, the credibility of the witnesses in question.

12. For my part, I can see no real distinction between the transcript and, for example, a previous police statement made by a witness outside court.

13. So for all these reasons, in my judgment, the transcript is relevant to the issues in the action and, moreover, since Mr Jat accepts the authorities cited by the other side relating to the question of legal professional privilege, or perhaps more correctly, the absence of the privilege, in my judgment, a prima facie case for the discovery of the LiveNote transcript has been made out.

14. But then Mr Jat reminded me of Order 24, Rule 8, and perhaps I could add Order 24, Rule 13, relating to discovery and production of documents, in which the test of discovery and production as being necessary has been imposed by the rules.

15. The burden, for some reason, is not the same under the two rules; it is on the party applying for production under Rule 13 but is on the party resisting discovery under Rule 8, but at the end of the day, in the context of the present application, in my judgment, it does not really matter. The test is whether it is necessary either for disposing fairly of the cause or matter or for saving costs. I agree that this is the test which I need to apply my mind to.

16. For my part, I would say that the provision of the LiveNote transcript to the plaintiff, bearing in mind that the defendant as well as the court have the benefit of the LiveNote transcript and in the circumstances of this relatively long trial, is a step which would likely lead to some saving of costs. If nothing else, it would speed up the giving of evidence by the witnesses.

17. Given the well-known accuracy of the LiveNote transcript, that would also help to minimise disputes over what a witness has said or has not said in the witness-box, both for the sake of examination of witnesses as well as the general conduct of the trial. So in my judgment, discovery of the transcript would tend to save the costs of the proceedings.

18. So for all those reasons, I am ordering that there be discovery and production of the LiveNote transcript.

19. Now, that leaves me with the form of discovery and production. Mr Kerr told me that he applied for full and instantaneous discovery. By that he is really asking for the provision of a laptop so that he could have the transcript available to his very eyes in an instantaneous manner, and he also wants a hard copy every day.

20. I suppose Mr Jat's side does not really have any real objection to it, provided that the plaintiff is prepared to share half of the cost of the provision, which amounts to around $7,000 per day, so I was told. Mr Jat also indicated to me that, on the other hand, if one is simply talking about the provision of an extra set of transcript (i.e. a hard copy) at the end of each day, the cost charged by the LiveNote company would only be around $500.

21. The rules and, more particularly, Order 24, Rule 11A(2), actually says that if a party on the receiving end of a successful discovery application is required to produce a copy of the document in question - and bearing in mind that the word "document" has a very wide meaning - he must, within seven days, provide or supply a copy to the other side with an account of the "reasonable charges".

22. As I said, Mr Jat, in effect, argued that, in the present case, the reasonable charges for the provision of any copy, soft or hard, would be half of the cost charged by LiveNote, i.e. around $7,000. On the other hand, Mr Kerr argued that this would really be a matter of taxation; anything over and above the normal photocopying charge sanctioned by the court would have to be the subject of a specific application by the defendant during the taxation stage.

23. That might well be so in relation to a hard copy, but Mr Kerr is asking for a soft copy. So in my judgment, if he asks for a soft copy, he must pay the reasonable charges for a soft copy, and the charge is $7,000 per day, according to Mr Jat. I can see no good answer to that demand.

24. So far as the past six days' cost is concerned, that had been incurred by the defendant without knowing that, on the seventh day, they would be asked to disclose the transcript. And for the past six days, there is no question of the provision of any soft copy to Mr Kerr. But as regards the transcript from today onwards, certainly, it is open, at least in theory, to the defendant to stop using the LiveNote. If they continue to use the LiveNote, that would be on the understanding that a soft copy would be provided to the other side, pursuant to the order that I am going to make.

25. In my judgment, it is reasonable for Mr Jat's side to expect the plaintiff to be paying half of the cost of the soft copy from today onwards as the reasonable charges for the provision of the LiveNote. I note that the word "reasonable" is used instead of the word "necessary" which is the criterion used on a party and party taxation. So it is really more akin to a common fund taxation if taxation is a good analogy. Equality is equity.

26. So in the exercise of my discretion, if there is any in the matter, but in any event, in my judgment, the reasonable cost or charge for the provision of a soft copy, i.e. an instantaneous copy of the transcript, is really half the cost charged by LiveNote and, as indicated to me, it should be in the region of $7,000.

27. I am not sure if it is worthwhile for the parties really to work out the actual amount up to the last dollar and cent. I would impose a ballpark figure of $7,000 per day, this matter having taken up a sufficiently long time of the trial already. So $7,000 per day for the provision of the soft copy. But if Mr Kerr is content with a hard copy every day, then, in my judgment, a reasonable charge would be $500 as an extra user.

28. I believe I have dealt with all the matters argued before me this morning. For the purpose of the record, I note the time taken for the argument. We started at 10.25 and it is now 11.50. I shall now hear the parties on the question of costs, if they want to apply for a separate order relating to the costs of this application. If not, then we will press on with the trial.