SZE KA WAI v. CHOY WAI KA

HCA 1825/2018

[2019] HKCFI 2781

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1825 OF 2018

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BETWEEN

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DECISION

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Introduction

1.  By a summons filed on 29 July 2019 (“the Summons”), the Plaintiff (“P”) sought specific discovery of various documents against the Defendant (“D”). The documents sought included “bank statements and passbooks of all the bank accounts maintained by D covering the period from April 2010 to February 2017, and all tax returns filed by D for the years 2010/2011 to 2017/2018” (“the Disputed Documents”).  

2.  I heard the Summons substantively today. My decision is to (1) dismiss the Summons; and (2) order P to pay the costs of the Summons, including all costs reserved, summarily assessed by me with Certificate for Counsel at HKD 123,520, to D, forthwith (“the Decision”).

3.  My reasons for the Decision are as follows.

Background Facts

4.  P and D were lovers. They were the registered co-owners of a residential unit in Tseung Kwan O, Hong Kong (“the Property”).

5.  P’s case was that she was a piano teacher who intended to buy the Property for long-term investment and her own usage. As her income was irregular, she was unable to obtain a mortgage loan for the purchase of the Property. D offered to help by agreeing to be named as a joint owner and joint borrower for the purchase of the Property. P accepted D’s offer and organized the purchase accordingly. There was an oral agreement in 2011 to the effect that D must hold his interests in the Property on trust for P and transfer such interests to P upon P’s demand. P paid for everything with her own money. P and D broke up in or around early 2017. By a solicitor’s letter dated 16 July 2018, P demanded performance of the oral agreement, which D refused. P therefore commenced this action.

6.  D’s case was that P and D had all along intended the Property to be jointly owned by them in equal shares, both at law and in Equity, and that each of them would contribute towards its purchase price. They did in fact contribute towards repaying the mortgage loan for the Property “in approximately equal shares”. D counterclaims an order for sale pursuant to Section 6 of the Partition Ordinance (Cap 352), plus other reliefs. 

P’s Submissions

7.  Mr Timothy Lam, Counsel for P, submitted, inter alia, that (1) D’s lists of documents were deficient; (2) the bank documents sought may lead to a train of inquiry enabling P to disprove D’s case; (3) the tax returns sought may reveal information on D’s capacity to contribute towards the purchase price for the Property; (4) D had on 17 September 2019 filed a 2^nd Affirmation (“the 2^nd Affirmation”), by which D alleged he did not keep his bank statements and could not retrieve copies of them, and the tax returns sought simply did not exist at all, but such assertions were deficient, and D should be ordered to file a further affidavit to properly meet his duty of disclosure; (5) P was entitled to bind D to a specific story via the further affidavit before trial; and (6) since the root cause of P’s application was D’s inadequate disclosure, costs should not be awarded against P even if I were to dismiss the Summons. 

D’s Submissions

8.  Mr Simon Wong, Counsel for D, submitted, inter alia, that (1) no order for discovery would be necessary after D filed the 2^nd Affirmation as its contents were conclusive at interlocutory stages of these proceedings unless they could be shown to be lies, and they plainly could not be shown to be lies; (2) as DHCJ William Wong SC had correctly stated in Li Lihong v Choi Tung Chi & Another [2018] HKCFI 2344, discovery should not be ordered unless it would be “necessary” for disposing fairly of the cause or matter or for saving costs; and (3) there was no basis for P to challenge the contents of the 2^nd Affirmation at this stage since this was not an application for leave to deliver interrogatories. 

My View

9.  I agree with D’s submissions in their entirety.

10.  This is not a commercial case where the success or otherwise of a claim turns on the documentation. This is a dispute between former lovers, and the outcome turns on the inherent probabilities of their stories, the credibility of their own oral evidence, and the circumstantial evidence. For a case of this nature, if P takes the view that D had been guilty of non-disclosure, the best way to deal with it would be to serve interrogatories on D under Order 26 or cross-examine D during the trial itself. In my view, there is plainly no necessity, or utility, in ordering D to file an affirmation over and above the 2^nd Affirmation at this stage. It would be a pointless, or futile, order, serving no useful purpose. With respect, I decline to make such an order. 

11.  In fact, I am slightly surprised P saw fit to ask for yet another affirmation once she has had sight of the 2^nd Affirmation. As Yuen JA of the Court of Appeal observed in L v C [2007] 3 HKLRD 819 at paragraph 191(2), where a party has been guilty of failing to make full disclosure, he cannot complain if uncertainties are determined against his favour. For a case of this nature, if P’s various complaints about D’s non-disclosure were shown to be valid at the trial itself, that would work against D, and work in favour of P. A further discovery order against D is simply unnecessary. 

12.  For the avoidance of doubt, subject to further orders of this Court, my dismissal of the Summons is without prejudice to the legal rights of the parties on the administration of interrogatories under Order 26 and/or the cross-examination of witnesses during the trial itself. 

Costs

13.  Despite the most able submissions of Mr Lam, Counsel for P, delivered with eloquence, I take the view that costs should simply follow the event. D is plainly the winner vis-à-vis the Summons. The costs of the Summons should be paid by P to D. 

14.  On the question of Certificate for Counsel, in my judgment it was reasonable, necessary and proper for both sides to engage Counsel to argue the Summons. Both Counsel had been helpful to this Court. 

15.  On the quantum of costs, D claims HKD 145,420. Pursuant to paragraphs 13 & 14 of Practice Direction 14.3, I examined each item in D’s Statement of Costs, and also the final figure. 

16.  I would only allow HKD 1,300 for Item D4, given that D had already instructed Mr Wong, a competent Counsel, to attend this hearing, and it was with respect unnecessary for a senior solicitor to accompany Mr Wong. This hearing did not last 3 hours as originally anticipated. There should be some further reduction as time for “conducting legal research” is generally irrecoverable. 

17.  Taking a broad-brush approach in assessing quantum of costs, I consider a total figure of HKD 123,520 to be fair and reasonable. 

Final Remarks

18.  I do thank both Counsel for their most able assistance.