CATHAY PACIFIC AIRWAYS LTD. v. CATHAY PACIFIC AIRWAYS FLIGHT ATTENDANTS UNION

1994, M.P. No. 1296

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

(IN THE MATTER OF PREMISES AT 3RD FLOOR,
BLOCK B, CATHAY PACIFIC AIRWAYS BUILDING,
HONG KONG INTERNATIONAL AIRPORT, KAI TAK, KOWLOON)

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J U D G M E N T

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1. As the title to this action makes clear, this case is a dispute between the Plaintiff airline and its Flight Attendants Union. Although the proceedings have generated considerable amounts of paper, the broad shape of the case is relatively straightforward. For a period commencing in 1979 and lasting until 1993 the Plaintiff permitted the Defendant Union to occupy various office space free of charge. A licence was granted, says the Plaintiff, which was gratuitous and revocable at will or upon reasonable notice. Such purported revocation occurred by letter dated 31st March 1993, although the Defendant declined to move from the present premises, which I understand, are in the region of 950 sq. ft. at the Kai Tak complex. The Plaintiff claims an order for possession and mesne profits.

2. The Defendant's case, put broadly, is on two levels. First, says the Union, there is in place a contractual licence to occupy, emanating from an oral agreement evidenced in writing, albeit the formulation of the terms of this licence are several; in particular, the Defendant pleads that in consideration of the Defendant Union agreeing to accept the terms and conditions of a 1987 Year End Review Agreement, the Plaintiff agreed to recognise the Union and to provide free office space for the duration of such recognition. And second, the Defendant says that the Plaintiff is estopped from claiming that the Union is not entitled to occupy the premises. Both elements of the case are larded with considerable detail; for present purposes, however, I simply delimit the broad lines of demarcation of the dispute, and I dare say that in the fullness of time it will be a most interesting case to try.

3. This however is not the issue presently before me. The present application is in the form of a Defendant's summons for specific discovery dated 4th March 1997. I pause to note that, although this is not a Commercial List case, the application appears to have "leapfrogged" the Master, apparently for reasons of convenience and at the behest of the Plaintiff. I trust the parties and others in the field of commercial litigation will take note of the fact that High Court Judges are not supernumerary Masters; certainly the Judge presently in charge of the Commercial List, a List which is already congested, will in future decline to be treated as such.

4. But I digress. The Defendant's specific discovery summons appends thereto the normal Schedule, which in this instance contains 13 categories of documents, and Mr. Pow, for the Defendant, forcefully submits that, save and except categories 7, 10 and 11, which he does not pursue, an order should be made in terms of the balance. For his part Mr. Reyes for the Plaintiff resists, and resists upon a number of grounds.

5. I think it important at this stage, however, to put the matter into context. For this is not the first such specific discovery application taken out by the Defendant. A previous application, by summons dated 21st October 1995, was made in wide terms: 11 categories of documents were then requested. An affidavit sworn by a Mr. Bueking dated 19th March 1996 disposed to the fact that the Plaintiff did not have in its possession, custody or power item Nos. 1, 2, 3, 5, 6, 9, 10 and 11 of the categories of documents then sought, which left in dispute only items 4, 7 and 8 outstanding within that application. Discovery in these restricted terms was refused by the Master, whose refusal was upheld by Mrs. Justice Bokhary on 27th June 1996, which decision was again upheld by the Court of Appeal in a Judgment dated 21st November 1996; at that hearing the Defendant's appeal against the Order of Bokhary J. was dismissed.

6. I recite this sequence of events for two reasons: first, because the present application, I am informed by Mr. Pow, owes its origins to certain observations made by Sears J. during the course of that appeal; and second, because it has a direct bearing upon Mr. Reyes's submissions before me, in this application, as to the issue of duplication.

7. It is against this background, then, that Mr. Pow mounts the present application. He says that this is a new application and that the documents requested are different to those the subject of the previous application. He submits also that the Plaintiff's affidavit in opposition to the present application, namely that of a Mr. Edward Nichol dated 19th March 1997, is inadequate, being descriptive rather than definitive in terms of what documents may or may not exist, and relying, instead of actuality, upon perceived general practice within Cathay Pacific Airways; for example, Mr. Nichol observes "it was not and, as far as I am aware, never has been Cathay's practice for these types of decision [such as the present decision to grant free office premises] to be Board of Directors' decisions. It would have been normal practice for no documents to have been generated evidencing whether or not this decision should have been made". And with regard to Mr. Nichol's further statement on oath to the effect that "the decision to revoke the offer of free office space to the F.A.U. was a decision I made in 1993. I had full authority to make this decision and no documents evidencing why I made this decision were generated", Mr. Pow suggests that the precise phrasing of this part of the affidavit does not dispel the Union's suspicion that nevertheless there may be some documents in existence.

8. I am bound to observe that, in my view, there is little to be gained by submitting such affidavit evidence to a level of scrutiny which would befit a Chancery practitioner attempting to rigidly construe a disputed will or tax statute; moreover I also consider that, when taken with the earlier affidavit of Mr. Bueking in the previous application, the deposed paucity of relevant documents held by Cathay is fairly evident, and on the present state of play I am not impressed by what I took, at the outset at least, to be a veiled implication that in some way the Plaintiff, a publicly listed company, was suppressing documents, although to be fair to Mr. Pow he specifically resiled from any such apparent position, in my judgment correctly, contenting himself, I think, with an argument as to the lack of precision within Mr. Nichol's "cursory" affidavit.

9. Mr. Pow categorises his Schedule into the following broad subsets of documents, namely, Items 1 to 3, 4 to 6, 8, 9, and 12 to 13, after, as I have earlier indicated, specifically abandoning items 7, 10 and 11. I bear in mind, in this context, that as a matter of historical fact there is no issue that the office space was variously granted, that the Union was recognised, and that the licence previously granted was purportedly revoked, factors which broadly correspond to the subject matter of the subsets of documents now sought, and I have considered carefully their direct relevance to the outstanding issues for decision in this case; as Ching J.A. remarked in his Judgment dismissing the appeal against the refusal of the previous discovery order, "recognition of unions must surely be very different from facts upon which a licence or an estoppel can arise", an observation which, with respect, seems to me to be right on point when considering, for example, category 8 in the Schedule to the present application.

10. Mr. Anselmo Reyes, who appears for the Plaintiff, opposes the application as made. He reminds me of the provisions of Ord. 24 r. 8, in particular the statutory benchmark of discovery being necessary only for disposing fairly of the matter and for saving costs, and he makes, I think, three broad submissions. First, that there is an obvious duplication in the categories of documents now sought: viz. categories 1 to 6 duplicate category 1 of the previous application, categories 8 to 11 duplicate categories 3, 8 and 9 of the previous application, and categories 12 to 13 duplicate category 11 of the previous application; second, that in any event the tranches of documents sought are, in the factual circumstances of this case, irrelevant and unnecessary; and third, that in some instances the requests are so wide as to be oppressive, requiring a search for peripheral material which may have been on file since 1970, and certainly not a matter falling within the rubric of Ord. 24 r. 8.

11. The application, of course, is essentially one for the exercise of the discretion of the Court, after reminding itself of the applicable legal principles. At the conclusion of the argument I adjourned the matter overnight to carefully consider the respective submissions and all the material before me, which I have now done; and I am bound to say that such subsequent scrutiny has not altered my initial impression.

12. Accordingly, out of the Schedule of documents requested, I am minded only to order category 3, as amended (the substitution of the word "all" for the first three words, "all documents containing") and category 11. I do so only because I am not satisfied on the face of Mr. Nichol's affidavit that it definitely may be said that there are no Board Resolutions in existence, notwithstanding that the tenor of such affidavit would leave one with the distinct impression that the decisions to grant the free premises to the Union and to revoke the licence so granted were not decisions taken at Board levels. I note here that Mr. Reyes was constrained to say during argument that having heard Mr. Pow on the point he would have no objection to producing any such Board Resolutions, although he made it clear that he thought it highly unlikely in the circumstances that there were any in existence. In any event, to put the matter beyond doubt I make this order in terms of paragraphs 3 and 11 of the Schedule, with the concomitant order that such further list is to be verified by an affidavit to be sworn by a responsible officer of the Plaintiff company who is in the position to say that he has himself investigated and searched the records; if indeed there are no such resolutions in existence, then doubtless such officer will be minded to say so on oath.

13. Beyond this, however, I am not prepared to go. I consider that the other categories of documents do in fact substantially duplicate the subject matter of the previous application, the residue of which was dismissed, and which in any event, given the admitted facts of this matter and the matters remaining in issue, are at the fringes of relevance, if indeed they are relevant at all. Moreover, given the content of the affidavit evidence presently in place, I am far from satisfied that this application is, in fact, any more than an extended fishing expedition which, if given full rein, would verge in some instances upon the oppressive.

14. Finally, whilst I do not wish to be considered unfair, I hope that I may be permitted to observe that the considerable effort which has obviously gone into this further discovery application could perhaps more usefully have been spent in actually bringing the case to trial. Interlocutory applications have their place, but they are no substitute for the actual decision of the disputes which, unhappily in this case, continue to divide the parties. I will now hear Counsel on costs, and upon any further matters arising.

(Submissions from Counsel).

15. I sometimes think that in applications like this the costs element of the case often poses the most difficult area for decision. Mr. Reyes is brief and to the point. He says that he has substantially prevailed, and he asks for his costs. Mr. Pow, in response, recognises the ambit of the Judgment which has just been delivered, but makes the fair point that the application was in part at least the result of a somewhat cursory affidavit in opposition by Mr. Nichol, which, to use his words, did not come near to putting the Defendant in a "comfortable position". He says that the fair order would be costs in the cause. Mr. Reyes rejoins that if indeed the affidavit of Mr. Nichol was less than precise, then such matters could certainly have been ventilated in correspondence; after all the relevant affidavit was served shortly after the summons in March of this year, but there was no attempt at clarification on the part of the Defendant.

16. At the end of the day, of course, there is always an element of broad brush about costs orders. They cannot and indeed should not be measured as if by micrometer, and must depend upon the Court's overall assessment of the case before it. I also think there is much to be said for a global order which does not turn out to be a Taxing Master's nightmare. And nor do I think that an order that is dependent upon the cause is appropriate. An application like this is a discrete matter which is self-contained, and as a matter of principle should attract a definitive costs order.

17. Accordingly, after taking into account all the circumstances before me, with particular reference both to this application and to its predecessor, and to the degree of success achieved by the Defendant in terms of the scope of this application as presently constituted, in my judgment the broad justice of the case is best served by ordering, which I now do, that the Defendant is to pay 70% of the Plaintiff's costs of this application in any event, such costs to be taxed if not agreed.

18. The only other matter of relevance today is a direction as to the time within which the Plaintiff should file its further list and affidavit verifying the same. Mr. Reyes asks for 21 days, and in the circumstances, given the effective loss of a week because of the Handover, I think that that is not unreasonable. Certainly Mr. Pow does not raise any objection, he simply wishes to achieve certainty. Accordingly, 21 days is what Mr. Reyes shall have.

19. Finally, may I express my thanks to both Counsel for their considerable assistance in boiling down what could have been a complex argument into convenient and precise form. I am grateful for their efforts.