GRAND PLANET LTD v. THE INCORPORATED OWNERS OF LUCKY COMMERICAL CENTRE

DCCJ 1424/2020

[2021] HKDC 198

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1424 OF 2020

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DECISION

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Introduction

1.  The dispute in this action is whether a door (the “Old Door”) at the entrance or to the Flat Roof above the 27^th Floor of Lucky Commercial Centre No 103 Des Voeux Road West, Hong Kong (respectively, the “Property” and “Building”) is or was a common part or part and parcel of the Property which is owned by the plaintiff.

2.  According to the plaintiff, after the Statement of Claim was filed and before the defendant filed its Defence dated 9 July 2020, the defendant had without informing the plaintiff or the court proceeded to destroy and/or remove the Old Door and replaced it with a new door (the “New Door”).

3.  The plaintiff continues to proceed with this action and seeks declaratory and injunctive relief on the basis that the Old Door and the New Door are not common parts of the Building but are for the plaintiff’s exclusive use, occupation and/or enjoyment only.

4.  Paragraph 5 of the consent order dated 9 September 2020 (the “Order”) provides that:-

“The Defendant do within 14 days from the date of the Order, by the Chairman of its Management Committee or it duly authorized officer, file and serve on the Plaintiff an affirmation or affidavit disclosing all records and documents relating to the discussions, decisions and carrying out of the dismantling of the Door (as defined in the Statement of Claim herein dated the 8 May 2020) and its replacement by a new door (“New Door”) for the period from the 8 May 2020 up to the date hereof, including inter alia all such records and/or documents (such as inter alia internal memoranda, correspondence, contracts, drawings, sketches, specifications, photographs, invoices, receipts, photographs and all other documents exchanged between the Defendant, members of its Management Committee, the Manager of the Building and/or their contractors, suppliers and/or agents) relating to the discussions, decisions and carrying out of the dismantling of the Door and its replacement by the New Door.”

5.  Mr Chow Hung Hing, the Chairman of the Management Committee of the defendant filed and served an affirmation dated 22 September 2020 and disclosed 8 documents in compliance with paragraph 5 of the Order.  He further affirmed that apart from the said documents, there were no other relevant documents referred to in the Order.

6.  The plaintiff takes the view that there was only purported compliance of paragraph 5 of the Order by the defendant.

7.  There are now two applications by summonses before me:-

(1)     The defendant’s Summons dated 5 January 2021 for an extension of time to file and serve an Amended Defence (the “defendant’s Summons”).

(2)     The plaintiff’s Summons dated 14 January 2021for an unless order with sanctions specified on the ground of non-compliance of paragraph 5 of the Order (the “plaintiff’s Summons”).

The defendant’s summons for time extension

8.  There being no real controversy regarding the defendant’s request for time extension to file an Amended Defence, I will make an order in the terms of the defendant’s Summons.

Whether an unless order should be made

9.  There can be no dispute that an unless order is an order of last resort and should only be made where there is a history of failure to comply with the rules or court orders.  There is at the same time no dispute that the court has a discretion not to enforce strict compliance of an order.  Hence in deciding whether to compel further compliance of the order, including the imposition of an unless order, the court has to look at all the circumstances of the case so as to arrive at a fair and just decision: AXA China Region Insurance Co Ltd v Pacific Century Insurance Co Ltd (No  2)[1].

10.  In AXA China Region, the court considered that it would not be a fair exercise of the court’s discretion to impose an unless order that carried the sanction of striking out the Defence.  In particular, it could not be said that without strict compliance with the order, AXA ran the risk of being deprived of a fair trial.  To engage in protracted interlocutory proceedings would only divert the parties’ attention, energy and resources from the resolution of the real disputes between them.

11.  Likewise, having considered the overall circumstances of this present case, I do not consider it would be fair for me to exercise the discretion in favour of the plaintiff.

12.  First, this is not a case where it is said that the defendant made no attempt to comply with paragraph 5 of the Order.  It is beyond dispute that Mr Chow has disclosed a total of 8 documents by way of an affirmation within the time limit imposed by the said Order.

13.  More importantly, the defendant also authorized Mr Teddy Leung to file an Affirmation on 1 February 2021 to confirm that the defendant does not and never had in its possession any of the documents sought under paragraph 1(a) to (d) of the plaintiff’s Summons apart from producing a purchase order and the completion certificate.  

14.  In essence, the plaintiff is now trying to suggest there must be more documents.  Whilst the plaintiff is adamant that as the defendant disclosed two further documents by way of Mr Leung’s Affirmation, the initial disclosure by Mr Chow’s Affirmation must be deficient, there is in fact no real evidence pointing to the existence of further documents.  The submissions in this regard are at best speculative.

15.  It is trite that the oath of the party giving discovery is conclusive, unless the court can be satisfied – not on a conflict of affidavits, but either from the documents produced or from anything in the affidavit made by [that party], or by any admission by him in the pleadings, or necessarily from the circumstances of the case – that the affidavit does not truly state that which it ought to state.” See for example: Re Prudential Enterprises (No 2)[2].  Obviously, I am not in a position to conduct a mini-trial on affidavit evidence or make any finding of fact upon disputed evidence and I am not satisfied that the explanation by Mr Leung is clearly incomplete and unsatisfactory.

16.  Second, even if there had been deficiencies in the initial disclosure by Mr Chow’s Affirmation, such deficiencies were at best minor and technical in nature.  I am not at all persuaded that there is or was any so-called deliberate or contumelious non-compliance on the part of the defendant.

17.  The scope of search under the Order is not insubstantial and this is acknowledged by the plaintiff’s counsel, Mr Cheung. I am of the view that considerable time and resources would have to be devoted to ensure compliance with the disclosure obligation.  The lapse of 4 months for the defendant to file Mr Leung’s Affirmation to disclose two further documents after Mr Chow’s Affirmation and repeated complaints from the plaintiff regarding the initial disclosure do not mean there is a history of failure to comply with court orders on the part of the defendant.

18.  Third, the time and costs incurred for further pursuing and complying with this disclosure obligation are completely out of proportion in view of the limited relevance and/or materiality or necessity of these documents sought.  I am unable to ascertain what is the relevance and purpose for this entire exercise which flies in the face of the objectives under Order 1A rule 1.

19.  This is further demonstrated by the fact that the plaintiff was indeed contemplating to withdraw its Summons after having received Mr Leung’s Affirmation.  In the letter dated 5 February 2021, the plaintiff’s solicitors proposed for the withdrawal on the basis that costs be paid by the defendant on an indemnity basis.  Apparently, the parties could not agree on the position regarding costs and the plaintiff now sees fit to have their Summons fully argued before me.

20.  I am also unable to see how these documents would shed light on whether the Old Door or the New Door is and was part and parcel of the plaintiff’s property or is/was otherwise a common part of the Building.  This is a dispute which falls to be determined on a proper construction of the DMC, the First Assignment and/or the Building Management Ordinance.

21.  Fourth, I am thus unable to see how, without strict compliance of paragraph 5 of the Order, given the discovery or disclosure already made, the plaintiff would be prejudiced or would run the risk of being deprived of a fair trial.

22.  Fifth, in these circumstances, the application for unless order carrying a sanction of striking out the Defence on the basis of some initial minor non-compliance is wholly disproportionate, unwarranted and without merits.

           See: Chan May May v Raymond Yu Tai Chuen[3]

23.  Finally, I also agree with Mr Oh’s submissions that it is not apt to draw analogy between the disclosure order in this case and an ancillary disclosure order in a Mareva injunction.  A disclosure order made in aid of a Mareva injunction is to prevent abuse by the defendant to frustrate or defeat the very purpose of the Mareva injunction.  The primary purpose of such disclosure is to preserve assets or property which might otherwise be dissipated.

24.  For the reasons set out above, I can see no real purpose served for making an unless order in this present case.  The fact that the defendant had agreed to the terms of the Order and the disclosure obligation thereunder does not mean the plaintiff can ride on it and to use the same as an oppressive weapon.

25.  For all these reasons, I have no hesitation in dismissing the plaintiff’s Summons.

26.  In respect of costs, I should take into account the fact that there was no full compliance with paragraph 5 of the Order by the defendant until after the plaintiff’s Summons was filed.

27.  I therefore make the following costs order:-

(1)     The defendant do pay the plaintiff’s costs of and occasioned by the plaintiff’s Summons dated 14 January 2021 up to and including 1 February 2021 ie the time when Mr Leung’s Affirmation was filed and served.  Such costs are to be taxed if not agreed.

(2)     The plaintiff do pay the defendant’s costs of and occasioned by the plaintiff’s Summons as from 2 February 2021.  Such costs are to be taxed if not agreed with certificate for counsel.

28.  It remains for me to thank counsel for their assistance.