YANG FOO-OI by LEUNG PING CHIU, ROY her next friend v. WAI WAI CHEN AND ANOTHER

HCA 1739/2010

[2018] HKCFI 2278

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1739 OF 2010

________________________

________________________

_________________

D E C I S I O N

_________________

1.  There are 2 discovery applications by the Defendants. The first Summons (filed on 22 November 2017) has been overtaken by an application to amend it filed on 5 July 2018 (“1^st Application”). On 5 July 2018, the Defendants took out their second discovery application (“2^nd Application”).

2.  The 1^st Application concerns Angela and the parties had agreed that she be joined as a party to that Application.

Background

3.  In a Ruling dated 2 August 2018, a brief summary of the development of this case since the handing down of the Judgment in this case on 29 November 2016 was provided in paras 2 to 5 thereof.  For the purpose of resolving the discovery applications, I need to elaborate a little on the issues in the cross‑applications by the Defendants to challenge the locus of Yang and Yang’s application to join Angela as a party in this action (“Cross‑Applications”)[1].

4.  However, before doing so, it should be noted that it is the position of Yang and Angela that they had provided a considerable amount of discovery to the Defendants pursuant to their requests to try to avoid unnecessary augments.  They have now drawn a line and resist these applications as unmeritorious. 

5.  An Agreed List of Issues had been filed by the parties pursuant to the directions of the court, which contains also the disagreed issues.  Ultimately, the relevance of the issues is for the court.  The Cross‑Applications arise because of the Deed of Gift.  The Defendants contend that the Deed (the validity of which they dispute) had the effect of transferring and assigning Yang’s causes of action in this action to Angela, such that Yang had no locus to pursue those claims.  The position of Yang and Angela is that the Deed did not have such effect whether as a matter of construction or of law.

6.  In response to the challenge to Yang’s locus, there is an application for Angela to be joined as a plaintiff so that she can claim the benefit of the Judgment, should it be the case that the claims had been assigned to her. 

7.  The Defendants resist the joinder application on the basis that:

(1) Angela had allegedly an intention to deceive the court; and

(2) the Defendants would be prejudiced by the application because they contend that the course and the result of the trial would have been different.

8.  The evidence of Angela and Mr David Wong (“Wong”), whose firm (Messrs Wong, Hui & Co (“WH”)) was instructed by Yang to prepare the Gift Documents, is that for reasons they had given neither of them thought that the Deed would cover Yang’s claims in the present action.  Their evidence will be challenged by the Defendants.  However, it is not the intention of the Defendants to advance any evidence of their own in the hearing to resolve the Cross‑Applications.

2^nd Application

9.  I shall deal firstly with the 2^nd Application under which the following documents are sought to be disclosed:

(1) Unredacted copy of the attendance notes for the meetings on 4 December 2012, 11 December 2012 and 12 December 2012 exhibited in the Affirmation of Wong filed on 14 February 2018 (“Wong 1^st”);

(2) The “transfer documents” referred to in para 34 of Wong 1^st in respect of 4 companies;

(3) The “corporate documents” referred to in para 4(b) of the Affidavit of Anne Hui (“Hui”) filed on 15 May 2018 (“Hui 1^st”).

Attendance Notes

10.  In Wong 1^st, the deponent set out how the Gift Documents had come into existence.  In particular, he referred to the 3 meetings and exhibited the related attendance notes (“AN”). 

11.  The first AN stated that on 4 December 2012 there was a half day meeting between Wong, Angela (recorded as “B”) and Rachel (Angela’s assistant) at the office of Messrs DLA Piper, and “joined by Ms. Elaine Chan later” (it was a reference to Ms Elaine Chen of Messrs Clifford Chance).  The AN also recorded that Wong interviewed Yang at her hospital room later that afternoon.  Wong’s evidence is that, during the meeting at DLA office, they discussed, inter alia, the intended gift by Yang to Angela.  Later in the afternoon, he met with Yang alone to confirm her intention to do so.  He clarified that Ms Chen was not at the DLA office but was at the hospital to see Yang on other matters.

12.  The second AN stated that there was a conference on 11 December 2012 from 3 pm to 4:30 pm between Wong, Hui (a partner of WH), Angela, Rachel and “MM” (Ms Coco Chan, another assistant of Angela).  According to Wong, they discussed, inter alia, the composition of the HK$15 billion figure in clause 1 of the Gift Declaration during this meeting.

13.  The third AN stated that on 12 December 2012, Yang, Wong, Dr John Wong Yee Him (a psychiatrist) and Hui were present in the hospital for the execution of a Deed of Gift, a Declaration (on execution of the Deed of Gift) and a Power of Attorney.

14.  Each of the AN was redacted in part.  In respect of each of the redaction, Wong’s evidence is that the “redacted parts concern other matters not relevant to the making of the gift and contain privileged information”.

Relevance

15.  There is no issue that the test to be applied in deciding whether the disputed material is relevant is whether it is not unreasonable to suppose that the passages contained information which may either directly or indirectly enable the defendant either to advance his own case or to damage the plaintiff’s case.  The court would ordinarily accept the oath of the party that the parts redacted were irrelevant as conclusive, unless it appears from the documents produced that it is not the case: GE Capital Corporate Finance Group Ltd v Bankers Trust Co [1995] 1 WLR 172 at 174B‑F, 175D‑H and 177A.

Analysis

16.  On behalf of the Defendants, it was said that on the face of the AN these were single‑purpose meetings, and therefore the redacted parts did not concern irrelevant matters.

17.  Further, in respect of the first AN, the redaction appeared after the sentence “Was briefed on the progress of preparing for gifts from Mrs A to B”, and before “Through introduction of Elaine, Mr Tommy Lam, a solicitor was instructed to prepare documents for execution”.  It was argued that all the signs were that the redacted part concerned the progress of the preparation of the gifts from Yang to Angela.

18.  Firstly, all 3 AN were quite brief and evidently not intended to be properly structured documents (the second and third AN were handwritten by Hui at the meetings).  Secondly, it would not be surprising that other matters were discussed during these meetings, bearing in mind in particular that Wong had been acting for Yang over a number of complex disputes, and that Angela had been assisting her mother in the communication between her and her solicitor (see Wong 1^st, para 8).

19.  In respect of the second and third AN, there is simply no basis to question Wong’s evidence on relevance.  As regards the first AN, I do not believe that the analysis set out in para 17 above constitutes sufficient reason to question the unequivocal claim of irrelevance from a very experienced solicitor.

20.  Although Yang had agreed to the Defendants’ suggestion that the court can examine the AN to see if the redactions are indeed irrelevant (she says that they are clearly so), the position advanced by Mr Strachan SC, appeared with Mr Chau and Mr Man for the Defendants, is that:

(a) such a course is not the usual one for the court to adopt; and

(b) the Defendants’ counsel would not be in a position to offer any meaningful assistance to the court if they have not read the redacted parts. 

This court was referred by the Defendants to the commentaries in Passmore on Privilege, 3^rd edn, [9-042], and by Yang to GE Capital, at 177G‑H. 

21.  In short, the Defendants’ position is that at least one or more members of their team of lawyers would have to see the unredacted documents, and that such member(s) would have to obtain instructions from the Defendants before they can assist the court.  Yang does not agree with the Defendants.

22.  Given my view that there is no sufficient ground to question Wong’s claim of irrelevance, I am not inclined to examine the AN.  Further, there is no need to consider the objection of discovery based on privilege.  However, I agree with Mr Man SC, appeared with Mr Lam for Yang and Angela, that the considerations for the court under that heading are similar to relevance[2], and I would have upheld the claim of privilege had it been necessary to do so.

Transfer documents

23.  It was mentioned in para 34 of Wong 1^st that he was informed by Hui that “there were transfer documents of the shares in certain companies owned by Madam Yang”.  This was said in the context that another firm of solicitors, Messrs Keith Lam Lau & Chan (“KLLC”) had been handling Yang’s intended gift.  Hui checked what had been done by KLLC and informed Wong about the transfer documents.  Wong said that:

“As a result, I considered that there was no need to re‑execute the same documents, and that was the reason why only an assignment of indebtedness was executed on 20 December 2012.”

24.  Yang’s solicitors (Messrs Clifford Chance (“CC”)) were asked to provide copies of the transfer documents referred to in para 34.  In response, CC produced the instruments of transfer in respect of 5 of the 9 companies referred to in the Schedule to the Assignment of Indebtedness, and informed the Defendants’ solicitors (Messrs Mayer Brown (“MB”)) that all the transfer documents had been provided to them whilst also questioned the relevance of the documents.

25.  A fifth Affirmation of Angela (“Angela 5^th”) was filed to, inter alia, answer the discovery request in respect of the transfer documents of the 4 companies (for which no transfer document was provided to MB).  She explained that:

(1) There is no transfer document as regards 1 of these companies, Wei An Development Ltd.  It was a wholly owned subsidiary of Timeworth Group Ltd, for which transfer documents had been executed and produced;

(2) In respect of the other 3 companies, Sino Portfolio International Ltd, Southern Territories Group Ltd and Jesteburg Co Ltd, their transfer documents were not executed in 2012 or 2013 and were never provided to WH.  Therefore, they were not reviewed by Hui and were not referred to in Wong 1^st, §34. 

Corporate documents

26.  The “corporate documents” were documents received from KLLC and referred to in para 4(b) of Hui 1^st.  Hui further stated that she prepared the Schedule to a letter to Angela dated 16 January 2013 (“Letter”) on the basis of these corporate documents. The Schedule contained standard corporate information about 5 companies held by Yang, namely, Metro Union Group Ltd, Redbridge Enterprises Ltd; Time Choice Finance Ltd; Upper Wise Management Ltd and Timeworth Group Ltd (not the companies referred to in the preceding para).  The instruments of transfer and board resolutions listed in the Schedule had been disclosed by CC (despite the stated reservation on their relevance) via its letter of 11 April 2018.

Analysis

27.  The applicable principles were summarised by Fok JA (as he then was) in Moulin Global Eyecare Holdings Ltd v Olivia Lee Sin Mei [2013] 3 HKLRD 72 at §35:

(1) There is a 2‑stage test.  First, the party who has referred to the document in a pleading or affidavit bears the burden of showing good cause why an order for production should not be made.  As a matter of practicality, the fact of reference in a pleading or affidavit may make it difficult for a party to contend that the document does not exist or is not relevant.  However, that is not the end of the inquiry as there is not then a presumptive rule in favour of an order for production.

(2) The second stage is the requirement under O 24 r 13 which imposes a burden on the applicant for an order for production to show that the order is necessary either for disposing fairly of the cause or matter or for saving costs.

28.  The issues whether the transfer documents were referred to in Wong 1^st and their relevance must be considered with common sense.  Firstly, in light of the above evidence in Angela 5^th, it cannot be said that the documents in question were, in truth, referred to in Wong 1^st.  In any case, in para 34 of that Affirmation, Wong was relating what he was told by Hui in respect of the existence of transfer documents in “certain companies”.  Such evidence must be properly understood in its context.  There was no suggestion that Wong checked any of those documents himself.

29.  Secondly, the fact that Hui had only seen the transfer documents of 5 companies is borne out by the Letter in which the writer referred to various formalities to be complied with for the completion of legal ownership of certain assets.  In the Schedule attached to the letter, only 5 companies were referred to (see para 26 above).

30.  Thirdly, the relevant part of Wong 1^st merely explained what he did in the course of preparing the Gift Documents.  I am inclined to agree with Mr Man that such evidence did not render these documents relevant or necessary for the fair disposal of the Cross-Applications or saving cost.  The court will not be concerned with, as Mr Man characterised it, the mechanics of the transfer of gifts.

31.  Questions of relevance must be assessed against the issues in the case.  Whilst I can understand that the Defendants are adopting a carpet‑bombing approach in trying to overturn the Judgment, the court is not dictated by such approach.  I am unable to see any real relevance or necessity in the transfer documents, and none has been shown by the Defendants.

32.  The Defendants submitted that Angela’s confirmation that the transfer documents of 3 of the companies were not provided to Wong “raises more questions than answers”, that Wong’s account “remains problematic” and that the documents are necessary for Vivien to “properly understand the dealings between David Wong, Angela and Yang”.  However, it is not properly explained why the dealings between Wong, Angela and Yang in respect of the Assignment of Indebtedness or the completion procedure would be relevant for the resolution of the Cross‑Applications.  In my view, this is little more than a fishing exercise with the hope that something may turn up which can be used for the Defendants’ purposes.

33.  Much of the above analysis applies equally to the corporate documents.  Indeed, the transfer documents and the corporate documents were dealt with collectively in submissions.  The Defendants’ case here is little more than an assertion that they were referred to in para 4(b) of Hui 1^st.  I see no real relevance or necessity in these documents (insofar as there is any which has not been disclosed).

1^st Application

34.  Three classes of documents had been identified by Mr Strachan under this application:

(1) Documents relating to (a) Angela’s abandonment of the use / setting up of a trust to receive No 8 Mount Austin Road (“8 MA”) for her own benefit and (b) when and how 8 MA was transferred to Yang;

(2) Documents concerning the medical condition of Yang and the issue of who gave instructions, during the period from 7 June 2014 (when Yang suffered from a major stroke) to 24 March 2016 (when the Next Friend was appointed).  The latter include: (a) documents evidencing the identity of those who attended meetings with or otherwise instructed CC in relation to this action between 7 June 2014 and 24 March 2016 and (b) documents evidencing Angela’s authority to give instructions to CC between 7 June 2014 and 24 March 2016;

(3) The advice referred to in para 45 of Angela’s second Affirmation (“Angela 2^nd”).

8 MA

35.  The matters concerning 8 MA were raised at the trial by the Defendants to challenge the credibility of Angela.  This court found that despite a cross-examination lasting the better part of 2 days, there was little in the cross-examination of Angela which was of real relevance to the action (see Judgment, §§72 to 78). 

36.  The fact is that 8 MA was indeed transferred to Yang in 2005.  Angela’s evidence that she did not want to hold onto the blank transfer form for the shares of the company holding that property was corroborated by the Defendants’ own witness, Stephen.  This court was “unable to see anything of real importance rising from these matters concerning 8 MA”.

37.  The Defendants may like to have another bite at the cherry, but they have yet to make out any entitlement to have a re‑trial. The Cross‑Applications do not entitled the Defendants to re‑run their case.  I am not satisfied that the documents under this head are either relevant or necessary for the fair disposal of the Cross‑Applications or saving costs. 

38.  There is a blanket assertion by the Defendants that if Angela were the plaintiff in this action, she would have had to produce the requested documents, which would either have supported or contradicted her case.

39.  Firstly, the action was about Yang’s claim against the Defendants.  Even if the claim had been assigned to Angela, it would not have changed the character of the same.  Secondly, matter of discovery is and would have been governed by relevance and necessity.  The 8 MA matter concerned only the credibility of Angela.  The court had found that Angela’s evidence had little relevance to the trial.

40.  Thirdly, the Cross‑Applications are primarily about the effect of the Gift Documents, and the Defendants’ allegations that Angela had an intention to deceive the court and any prejudice to them.  I do not believe that these allegations of deception or prejudice entitle the Defendants to re‑run the trial.  No such suggestion had been advanced on behalf of the Defendants.

41.  Fourthly, at the risk of stating the obvious, a party is not entitled to boundless discovery merely because of his challenge of the credibility of a witness.

42.  Fifthly, Mr Man submitted that the real purpose of the request is an attempt to fortify Vivien’s case on how she shared the assets given to her by her father with her mother by referring to what Angela did.  There is considerable force in the submissions, and if that is that case, I agree with Mr Man that Angela’s subjective intention on how she should share her part of the assets with her mother is of little relevance.  More importantly, it was not Vivien’s case that she had in any way relied on what Angela had in mind or done to direct or change the course of her own action.

43.  Finally, I agree with Mr Man that the fact that Angela had already produced similar documents voluntarily does not advance the Defendants’ case because it was done to avoid unnecessary arguments and under protest as to relevance.  I should add that a litigant should not be penalised for acting reasonably to avoid arguments.

Yang’s medical condition and instructions to CC

44.  These materials go to the Defendants’ allegation that Angela had deliberately concealed from the court the fact that it was she who was instrumental in prosecuting this action.  The Defendants contend that during the period from 7 June 2014 to 24 March 2016, it must have been Angela who was giving instructions, because Yang was incapable of doing so.

45.  First of all, there is a disagreement between the parties on the legitimate scope of the “intention to deceive”.  Yang’s case is that only an intention to deceive by suppressing the Gift Documents would be relevant to the issues raised in the Cross-Applications.  The wider allegations of intention to deceive made by the Defendants are irrelevant.

46.  The phrase “intention to deceive” came from the judgment of Phillimore LJ in Mercer Alloys Corp v Rolls Royce Ltd [1971] 1 WLR 1520, which was cited by the Defendants as setting out the principles applicable to when a post-judgment joinder would be allowed.  The relevant part of the judgment appeared at 1527G‑H:

“What has happened here? When this action originally began it was perfectly properly constituted with Mercer and Stalco as the plaintiffs. In July 1970 there was a merger: Stalco merged with Whittaker … [defendant’s counsel] concedes, very fairly, that if, on the day when the parties reached agreement on the compromise of the action, anyone had thought to mention the fact of this merger, there could have been no objection by the defendants to the substitution of Whittaker for Stalco as one of the two plaintiffs. Nobody stood to gain anything by leaving the action constituted in the name of Mercer and Stalco as opposed to Mercer and Whittaker. There was never any intention to deceive. What had happened was merely that the American lawyers, no doubt realising that the action would have been properly constituted in California, did not realise that this correction was necessary in England. Consequently, the English solicitors for the plaintiffs were not informed of the true situation.” [emphasis added]

47.  There is certainly force in Mr Man’s submission that Phillimore LJ was referring to an intention to deceive by not joining the party proposed to be joined before judgment was entered.   This would cover an intention to deceive by suppressing facts giving rise to the need for the joinder application.

48.  Mr Man submitted that the wider allegations of intention to deceive are irrelevant.  Whether Angela was instrumental in prosecuting this action has nothing to do with whether she should have been joined as a plaintiff.  She could have such an instrumental role even if the Deed of Gift was never executed.  The revelation of the Gift Documents cannot justify the making of any sweeping allegation the Defendants wish in the hope of upsetting the Judgment.

49.  I do not believe that it is appropriate to determine in this application the legal question of the scope of the intention to deceive.  However, I struggle to see the relevance of the allegation that Angela was prosecuting this action during the period of time in question.  It must have been clear to everyone by the time of the hearing of the application for the appointment of the Next Friend on 5 April 2016 that Yang was incapacitated.  If the Defendants were interested in the subject documents, they could have applied for specific discovery or served interrogatories on Yang (acting by her Next Friend) and possibly Angela.  

50.  The allegation that Angela was “driving the bus” deserves a closer look.  I fail to see anything objectionable to a daughter helping her incapacitated mother to continue with an action she had started.  The real objection, and the sting in the allegation, is that the case against Vivien was false and engineered by Angela.  Such allegation was rejected by this court after the trial: see Judgment, §72.  I see no justification for that to be re-litigated in the Cross Applications.

51.  Further, Yang must have given instructions to her solicitors prior to 7 June 2014: see, eg, the Statement of Truth to the Statement of Claim and Amended Statement of Claim.  There were 2 witness statements and 3 affirmations from Yang before the court at the trial (see Judgment, §223).  They were all made before June 2014.  Evidence was adduced about Yang’s mental capacity in respect of her written evidence: see Judgment, §§66, 68, 79, 80 and 223 to 225).  

52.  In the premises, it is difficult to understand the relevance of the allegation that Angela was “driving the bus” during the period of time in question or how it would assist the court in resolving the Cross-Applications.

53.  Finally, I agree with Mr Man that the documents which evidence the identity of those who attended meetings with CC would not in any case assist the court on why they were there unless the court looks into privileged material concerning the meeting.  The Defendants had disavowed any intention to infringe such privilege.   

The advice referred to in para 45 of Angela 2^nd

54.  In Angela 2^nd, para 45, she said that:

“… I made preliminary enquiries with some of my legal advisors as to whether, as a general matter, HCA 1739/2010 could be assignable. … The effect of the advice from all the legal advisors with whom I enquired was that an assignment would involve very complex issues.”

55.  Angela has confirmed on oath that the advice referred to above was not contained in any document: Angela 5^th, §§9‑10. I agree with Mr Man that no issue of discovery arises in light of such evidence.

Conclusions

56.  For these reasons, both the 1^st and 2^nd Applications are dismissed, save that the parties are in agreement that no order be made in respect of §§4(1)‑(4) of the Discovery Summons filed on 22 November 2017.  I order accordingly.

57.  As for costs, the parties are largely in agreement that the costs in respect of §§4(1)-(4) of the said Summons be reserved.  I see no reason to deal with the costs of Mr Seto’s 5^th Affirmation differently as suggested by Mr Man, and such costs are likewise reserved.  Save as aforesaid, I make an order nisi that the costs of and occasioned by these applications be to Yang with a certificate for 2 counsel.

58.  I am grateful to all counsel for their assistance.