SMSE v. KL

CACV 111/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 111 OF 2009

(ON APPEAL FROM HCMC NO. 2 OF 2006)

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JUDGMENT

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Hon Tang VP:

1.  This appeal concerns a subpoena duces tecum issued on the application of the respondent (“the husband”) against the appellant (“Mr Eric So”) to produce the documents set out in the schedule to the subpoena (“the Schedule”).  The documents are documents of South Sea Leatherwares Limited (“SSL”).  It is agreed that although the subpoena was addressed to Mr Eric So, he is required to produce the documents as an officer of SSL.  Mr Eric So is the brother of the petitioner (“the wife”). 

2.  By a summons dated 11 November 2008, Mr Eric So applied to set aside the subpoena.  The application was heard before Hartmann JA sitting as an additional judge of the Court of First Instance on 23 and 30 January 2009.  By his ruling dated 9 April 2009 (“the Ruling”), Hartmann JA dismissed the application to set aside the subpoena.  However he was not prepared to order that all the documents listed in the Schedule must be made available by Mr Eric So.  He said:

“73.   … What, in my judgment, must be identified by those who represent the husband are the minimum number of documents which are absolutely necessary to enable the report to be prepared by the forensic account to a level of reasonable accuracy and no more.”

3.  The learned judge then gave the parties 21 days to agree a list of documents.  He added that:

“75.   … Issues of editing should also be taken into account.  If the parties are unable to reach agreement within that time period then the matter is to be set down for hearing before myself. …”

4.  The parties were unable to agree.  So the matter went back to the learned judge on 30 April 2009, when he made the order of 30 April 2009 (“the Order”).  On the same occasion he gave leave to appeal.

5.  The Order states:

“1. Eric So do provide to the Respondent the documents referred to at paragraph 1(a) of the Schedule of the writ of subpoena duces tecum of 7 November 2008 (the ‘Schedule’) by Tuesday 5 May 2009 at 4 pm;

2.  Eric So do provide to the Respondent the following documents within 10 business days from the date hereof:

(a) a schedule showing all sales revenues of South Sea Leatherwares Limited (‘SSL’) to Dooney & Bourke (‘D&B’) from 1 April 2002 to 31 March 2008;

(b) a schedule showing all sales revenues of SSL (overall and to D&B) from 1 April 2008 to 31 March 2009 (unaudited);

(c) a projection / budget of SSL’s overall sales revenues for the period 1 April 2009 to 31 March 2012;

(d) the documents referred to at paragraph 1(d) of the Schedule, save the underlying voucher and receipts;

(e) the documents referred to at paragraph 1(g) of the Schedule;

3.  Documents referred to at paragraphs 1 to 2 above be provided to the Respondent’s expert witness, Mr Trevor Dick, on an unredacted basis;

4.  Eric So do advise Mr Trevor Dick of any proposed redactions on the documents referred to at paragraphs 1 to 2 above to be provided to the Respondent and do seek Mr Trevor Dick’s agreement to the redactions; in the event that no agreement is reached, the matter be set down for hearing;”

6.  Mr Bartlett who appears for Mr Eric So submitted that the Order should not have been made and the subpoena should have been set aside because the documents were not necessary for disposing fairly of the matter. 

7.  Para. 1 of the Order refers to para. 1(a) of the Schedule.  The documents referred to in para. 1(a) of the Schedule are the audited financial statements of SSL.  As for paras. 2(a), (b) and (c) of the Order, the schedules required were offered by Mr Eric So in lieu of an order for production of underlying documents.  We were told that Mr Eric So offered the schedules when it was obvious that the learned judge was about to order the production of the underlying documents.  Mr Bartlett complained that the Order was a discovery in disguise, in particular, paras. 2(d) and (e) of the Order, which in turn refer to paras. 1(d) and 1(g) in the Schedule which cover:

“(d)   SSL's general ledgers, underlying vouchers and receipts recording all payments made to (the husband), (the wife), Chinastar Overseas Limited (‘CSO’) and China Star (Asia) Limited (‘CSA’), whether by SSL directly or via Mr Eric So or other directors/shareholders/officers of SSL;

……

(g) bank statements and other documents of SSL showing payments made to (the husband) and/or (the wife), whether by SSL directly or via Mr Eric So or other directors/shareholders/officers of SSL;”

8.  The production of documents has been stayed by this Court (differently constituted) pending the determination of this appeal.

Background

9.  The marriage broke down in July 2004.  Divorce proceedings were commenced in the following year.  Ancillary relief proceedings are continuing.  It seems to be uncontroversial that the matrimonial assets are at least HK$140 million.  The husband is an American citizen.  The couple came to work in Hong Kong in the following year.  They took up an employment in what was then a sole proprietorship called South Seas Manufacturing owned by the father of the wife.  They were employed to do marketing.  The business had been founded by the wife’s father in or about 1970.  It was, and remains, a leather manufacturing business, specialising in the manufacture of handbags.  According to the husband, when they first joined the business, it was operating on a relatively small scale with an annual revenue of about US$3 million.  However, by about 2005/2006 its annual revenue had increased to about US$65 million.

10.  The learned judge said:

“12.   … it is the husband’s case that, during the time when he and the wife were doing the marketing for the business, he was able to transform that business, bringing considerable wealth to the So family and, of course, to himself and his wife too.”

11.  SSL was incorporated in late 1990.  The husband was given 50,000 shares and the wife 100,000 shares.  The wife’s parents and her two brothers held a total of 750,000 shares by a corporate vehicle.  The learned judge said:

“16.   In or about 2002, seemingly for reasons related to United States tax, the husband and wife surrendered their shares in SSL and set up their own marketing business called Chinastar.  Chinastar acted solely as a sales agent for the family business, SSL.  In this regard, an agency agreement was entered into between SSL and Chinastar in which Chinastar was entitled to receive commission payments for sales which it secured for SSL.”

12.  The agency agreement was terminated on 2 March 2006.  However:

“17.   In addition to these ‘formal’ commissions – and of central importance to the husband’s case in the ancillary relief proceedings – is his contention that, with the business doing so well, in or about 1990 an arrangement was set up in terms of which the husband and wife and other family members received further regular payments, effectively ‘informal’ commissions known as ‘family gifts’.  It is the husband’s case – which is denied by the wife and her brother, Eric So – that these payments can accurately be described as commissions because they were calculated by reference to the sale price of SSL’s handbags.  Mr Benjamin Yu SC, leading counsel for the husband, described the system of calculation in the following terms:

What happened was that SSL kept two sets of cost sheets, internal cost sheets and external cost sheets.  The internal cost sheets, which were not shown to customers, revealed the actual costs of producing the handbags.  The external cost sheets (also called ‘presentation cost sheets’), which were shown to customers, incorporated the actual costs as well as an additional fictional cost representing the family gift payments.

18.    This additional fictional cost, said Mr Yu, normally averaged 5% of the price of each handbag but could be up to 8%.

19.    Should it be determined at trial that the husband is to be believed in his description of the true nature of the family gifts, their financial importance is clear.  By way of illustration, in his conclusion that the husband and wife earned in excess of US$20 million in the five years between 2002 and 2006, Mr Dick calculated that this sum included an amount of about US$9.6 million in the form of payments made by Eric So, these payments being what the husband has described as family gifts.”

It is the husband’s case that such payments were made by bank transfers as well as in cash. 

13.  The husband continued his marketing work for SSL until about August 2005.  He has since left Hong Kong and has remained unemployed since.  The wife’s case as understood by the learned judge is that at the beginning of 2006, she returned to the family business as an employee.  Although she had to do the work that both she and her husband had done previously, her initial monthly salary was just HK$20,500 per month, this was increased in mid-2006 to HK$39,500.  That amounted to an annual salary in 2006 of US$46,500.  That is to be contrasted with the income which the husband’s expert Mr Dick has calculated was received by the husband and wife in 2003, 2004 and 2005; namely, US$4.741 million, US$8.973 million and US$2.957 million.  Anyway, according to the wife, her salary was increased in January 2008 to HK$108,000 per month and there has been a bonus awarded to her of HK$600,000.  

14.  However,

“27.   … The wife has said that, while generally aware of these gifts, she had no knowledge of their exact amounts or the method of their payment.  They were, however, payments of a personal nature, she has said, and were not directly related to sales made by SSL.

28.    Her brother, Eric So, has described the payments as being either gifts in their true sense, especially gifts made by the father to help with the medical expenses of his two grandchildren, or forms of ‘loan’ which seemingly have never been the subject of any demand for repayment.”

15.  The learned judge said:

“31.   As to this contested issue, while it is not for me at this stage to come to any findings of fact, there are indications on the papers, and I put it no higher than that, that very substantial payments were made to the husband and wife in addition to the formal commission earned by Chinastar and that these payments, for some of the time at least, may well have been calculated in the manner suggested by the husband.”

16.  He went on to say:

“33.   The law on the subject is well settled.  If a subpoena is challenged, the burden is on the party who caused the subpoena to be issued, in this case the husband, to show that the documents to which the subpoena relates are necessary either for disposing fairly of the cause or for saving costs.  That being the case, if the documents sought pursuant to the subpoena concern an issue of either no relevance at all or, at best, of peripheral relevance, they cannot be necessary for disposing fairly of the ancillary relief dispute.”

The Appeal

Necessity

17.  Mr Bartlett did not seriously dispute relevance.  But he submitted that the learned judge had confused relevance for need or necessity.  With respect, we do not agree.  The learned judge clearly recognized that relevance was a necessary precondition to maintaining the subpoena but it was not a sufficient condition for doing so.  He agreed with the submissions of Mr Benjamin Yu SC, then acting for the husband, that the documents:

“36.   … are needed in order to determine the nature and extent of family gifts and commissions received by the husband-and-wife from the family business, SSL, during their marriage and which, on the husband’s case, the wife is either still receiving or is entitled to receive.”

18.  The learned judge had also rejected Mr Bartlett’s submission that the documents were unnecessary because the matter could be resolved by the court making adverse inferences against the wife.  

19.  The learned judge was also of the view that the documents sought were required because of the US tax liability of the parties.  He said:

“48.   As Mr Yu pointed out, the potential tax liability of either the husband or wife or of their companies is a matter which the court will be obliged to take into account in assessing an equitable division of the family assets.

……

50.    It is not for me at this stage to determine where any fault may lie in respect of the tax affairs of the husband and wife.  But it does seem to me that, if the husband is to be able to make an accurate return to the IRS, one that will protect both himself and the wife, then he will require sight of historical documents concerning their joint and several incomes.  As Mr Yu stressed, the issue of tax could be of central materiality in the ancillary relief proceedings, especially if penalties are levied by the IRS.  The more pressing therefore is the requirement for the husband (and the wife) to be able to make accurate returns to the IRS based on relevant documents.”

20.  Mr Bartlett submitted the fact that the documents sought are required by the husband to file US tax returns would not by itself support the subpoena.  Mr Strachan agreed.  But, as Mr Strachan has explained, the parties’ liability to US tax featured prominently in interlocutory proceedings between the parties which included an order by Saw J of payment into court on account of such liability as well as an application on behalf of the wife for an adjournment pending the determination on potential liability of US tax so that they can be resolved before and not after the hearing of the ancillary proceedings.  They showed that the potential liability of the parties to US tax is relevant to the ancillary order to be made.  The documents sought are required for such potential liability to be ascertained.

21.  Mr Bartlett also submitted that in the ancillary proceedings, the court should take a broad brush approach.  He referred to Parra v Parra [2003] 1 FLR 942, a decision of the English Court of Appeal.  But as the headnote in that case stated:

“This was a fundamentally simple case.” 

Thus, Thorpe LJ said at para. 26:

“… the overwhelmingly obvious solution in this case was equal division of family assets … the simple virtue of equality outweighs sophisticated arguments for adjustment one way or the other.”

22.  However, after a trial of preliminary issue of three days, followed by three days of the trial of the application, the trial judge awarded the wife a lump sum of £925,000 in return for her half-share in the company and its premises which she co-owned with her husband, as opposed to a lump sum of £818,641 (reflecting an equal division) which the Court of Appeal ordered.  Thorpe LJ observed:

“[4]   … After reserving his judgment Charles J worked assiduously on its preparation. He sought answers and comment from leading counsel for the parties in written exchanges. Later he acceded to an application by the husband to reopen the evidence at a hearing on 22 March 2002. On 22 April 2002, he sent out his draft judgment. On 8 May 2002, he held a further hearing to deal with a number of issues arising out of the draft judgment, which he then handed down. At a hearing on 22 May 2002, he handed down a separate judgment on costs. To the main judgment there was annexed a schedule setting out the judge's preliminary view as to the form of provisions and covenants binding on the parties and their estates to ensure that in the event that the husband ever realised the potential inherent in residential development of Star Works after the judgment the gain should be shared equally with the wife. This mechanism has generally been referred to as the claw back provision. We were told that the mechanism is known to conveyancers as overage.”

23.  It was in such context that Thorpe LJ said:

“[22]    The judgment that emerged is a tribute to the judge's exhaustive investigation of a mass of detailed evidence. The result is painstakingly thorough. But the outcome of ancillary relief cases depends upon the exercise of a singularly broad judgment that obviates the need for the investigation of minute detail and equally the need to make findings on minor issues in dispute. The judicial task is very different from the task of the judge in the civil justice system whose obligation is to make findings on all issues in dispute relevant to outcome. The quasi-inquisitorial role of the judge in ancillary relief litigation obliges him to investigate issues which he considers relevant to outcome even if not advanced by either party. Equally, he is not bound to adopt a conclusion upon which the parties have agreed. But this independence must be matched by an obligation to eschew over-elaboration and to endeavour to paint the canvas of his judgment with a broad brush rather than with a fine sable. Judgments in this field need to be simple in structure and simply explained.”

24.  Ours is not such a case at all.  The true character of the payments (commissions, gifts or loans) would not lend itself easily to a broad brush solution.  The known payments consisted of sums calculated to two-decimal points and there are e-mail messages which suggest that they were calculated with reference to business with customers of SSL.  If the husband’s case is correct, then with the documents to be obtained, the husband should be able to prove clearly that the so-called family gifts were disguised commission payments.

25.  Moreover as the learned judge pointed out:

“43.   As to the need for the documents listed in the subpoena, Mr Yu acknowledged that Mr Trevor Dick, acting as a forensic accountant, has put forward expert evidence in relation to a capitalised value of the wife’s income stream.  The report, however, because of a present lack of relevant documents, may not be accurate nor reliable.  As Mr Yu said, the report at this time has to be based on a number of assumptions.”

26.  Indeed, the capitalized likely future annual income stream is thus shown as a wide range from US$22 million to US$63 million. 

27.  Mr Bartlett also made the point that the husband did not mention any family gifts or secret commission payments or income when filing tax return with the US Inland Revenue Service (“IRS”).  That in the “Ferraro letter” written to the IRS by the husband’s US accountant, the IRS was told that the husband had received “cash gifts from a non-US person”.  But this simply goes to the credibility of the husband.  Mr Bartlett also submitted that Mr Dick had not been able to establish the precise relationship between the amount received from Mr Eric So and the sales revenue recorded in the South Seas business.  That is so.  But the husband’s case is that with the documents sought he or his expert should be able to do so.

28.  Mr Bartlett also submitted that the documents were not necessary and could be extrapolated if necessary and that they were only required by Mr Dick “refine” his views, and that would not justify invading the privacy of a non-party.  Mr Bartlett relied on Morgan v Morgan [1977] 2 All ER 515.  There the wife was the only child and her father a widower was aged 74 and his health was not good.  The husband wanted the court to have before it evidence of the father’s assets and testamentary dispositions when it came to consider what financial resources the wife was likely to have in the foreseeable future since the husband contended that it was likely that on the father’s death, most if not all, of his estate would pass to his wife and that she would be better off financially than her husband.  The husband issued a writ of subpoena ad testificandum and a writ of subpoena duces tecum requiring the father to disclose the value of his assets including his will.  The father objected to the writs and applied to have them set aside, and they were set aside.  The father owned a farm.  As the learned judge said, the farm was in an area where farming land was considered good and reasonably valuable.  Presumably, the acreage of the farm was known and that the farm buildings are plainly visible from the road:

“so that it ought not to be difficult for a land valuer to make a fairly accurate estimate of the agricultural value of the land and the buildings of it”.

The learned judge was of the view that although the evidence of the father would be of relevance to the court when considering what financial resources the wife was likely to have in the foreseeable future, the paramount consideration was the right of individual and it would be oppressive to forensic review that information as it was not a party to the proceedings and his privacy ought not to be invaded in that way. 

29.  The facts in Morgan are very different from the present case.  Moreover, as the learned judge has made clear in the ruling, he dismissed the application to set aside the subpoena after he has considered the following matters:

“63.   … First, how important is the information to the issues?  Second, has the applicant taken appropriate steps to obtain the information within the proceedings before seeking disclosure from the third party?  Third, would it be sufficient for the court simply to draw adverse inferences on the basis that the party from whom the information was sought within the proceedings has failed to supply their information?  Fourth, what is the nature of the relationship, if any, between the parties to the proceedings and the third party?  Fifth, if disclosure is necessary and proportionate wheel (sic) the editing of documents protect private information?”

30.  In my view, the decision of the learned judge cannot be faulted.

Disguised Discovery

31.  Mr Bartlett also submitted that the husband was in effect seeking inter partes disclosure on discovery against a non-party.

32.  Mr Bartlett’s’ complaint is principally directed to paras. 2(d) and (e) of the Order.  He submitted that these two paragraphs fall within the realm of discovery rather than the production of the document under a subpoena.  Paras. 2(d) and (e) require production of classes of documents rather than individually identified documents.

33.  He relied on Panayiotou and Ors v Sony Music Entertainment (UK) Ltd [1994] 2 WLR 241, where Sir Donald Nicholls VC (as he then was), followed an established rule that a subpoena to produce documents cannot be drawn so widely as to amount to requiring the witness to give discovery and made an order:

“… directing the issue of a letter of request for the production of documents to the extent that the request was not a disguise for seeking discovery of documents.”

34.  However, Nicholls VC at 249E referred to a dictum of Lord Diplock in Rio Tinto-Zinc Corporation v. Westinghouse Electric Corporation [1978] AC 547 at 635, where Lord Diplock said:

“Classes of documents provided the description of the class is sufficiently clear, may be required to be produced on subpoena duces tecum.”

35.  I agree with Mr Strachan that the documents required under para. 2(d) and (e) have been sufficiently clearly identified and may be required to be produced on subpoena duces tecum.

36.  Mr Bartlett submitted that the learned judge had erred in that he had applied different and more relaxed procedure law in the family context, and that he failed to properly apply the court’s role in protecting the rights of third parties served with a subpoena.  What the judge said was that:

“70.   … There is clear authority to the effect that the family courts are more relaxed in their approach to the test of particularity. …”

I believe the learned judge had in mind the observations in Charman v Charman [2006] 2 FLR 422 on the particularity required in the identification of documents in family proceedings, such that an appellant is not limited to documents which he can prove to exist.  I do not believe the learned judge had in anyway overlooked the importance of protecting the privacy of a non-party.

Miscellaneous

37.  Mr Bartlett submitted that the husband was seeking production of the documents for an ulterior motive namely to put improper pressure on SSL.  The learned judge has dealt with that in paras. 60 and 61 of his judgment.  The learned judge has also rejected Mr Bartlett’s submission that the setting aside of the husband’s earlier subpoena for the same documents would preclude the issue of the subpoena. 

38.  Mr Bartlett also submitted that the learned judge ought not to have dismissed the application on 9 April 2009, before he has determined how the Schedule should be whittled down.  It is true that not everything in the Schedule was ordered to be produced, but the husband was substantially successful.

Redaction

39.  The learned judge had ordered the documents to be produced without redaction.  In his ruling on 30 April 2009 he said:

“I come then to the question of redaction, that is, the blacking out of aspects of the company papers which; while considered to be irrelevant for present purposes, are nevertheless of a confidential nature. In my judgment, a court should be very cautious before ordering redaction. It is an open invitation to a distortion of the papers before the other side even gets a look at them.

I am aware that this court, through another judge, allowed the husband to black out certain details of his banking documents, but that order was made in very different circumstances and subject to very different imperatives.

That being said, I can understand that Mr So may feel that there are certain confidential matters which have no relevance whatsoever to the present proceedings and which are simply not necessary to be made known to the husband and all of those who advise him.

That being so, while I order that all the documents which are produced be produced to Mr Dick, that is, to the forensic accountant, without being redacted, if Mr So, or those who advise him, believe that certain parts of those documents should be redacted, then the matter can be discussed first with the forensic accountant and if there is any disagreement, then this court will determine that issue at a summary hearing after normal court hours.

I sincerely hope that no such hearing will be necessary. Mr Dick will know, once he has had an opportunity to evaluate all the documents, full well whether certain particular material is irrelevant or not. He will also know whether that material may perhaps be of an embarrassing nature, a confidential nature, or may perhaps even reflect matters of trade which any company would not wish to have known, and he will then, I am quite sure, be happy to agree to the redaction and both the husband and those who instruct the husband will have to rest with the wisdom of Mr Dick's decision.”

40.  It is accepted that only material documents could be ordered to be produced.  The same applies to entries in documents.  see per Kempster JA (as he then was) at 404 in Guess?, Inc and Ors v Lee Seck Mon and Ors [1989] 1 HKLR 399.

41.  The headnotes to the report in GE Capital Corp v Bankers Trust Co and Ors [1995] 2 All ER 993, a decision of the English Court of Appeal shows:

“It was well established that a party was entitled to seal up or cover up parts of a disclosed document on the ground of irrelevance just as it could withhold an entire document on that ground, provided that the irrelevant part could be covered without destroying the sense of the rest or making it misleading. …”

42.  Mr Strachan accepted that Mr Eric So was entitled to redact the documents to be provided under paras. 2(d) and (e).  However, in relation to the audited accounts, he submitted that no redaction should be permitted without following the procedure laid down by the learned judge. 

43.  In my opinion, Mr Bartlett is correct that if a document contains materials which are immaterial and irrelevant, they should be redacted.  The burden is on the husband to show, if he can, that the redaction had been done wrongly.  I understand Mr Strachan’s concern that this may lead to further dispute between the parties, but it is important to maintain the principle that any intrusion on the privacy of a third party must be justified.

Costs

44.  The learned judge has ordered that the cost of the application to set aside the subpoena as well as the costs of the hearing on 30 April 2009 should be borne by Mr Eric So.  Mr Bartlett submitted that the learned judge was wrong and that no reasonable judge would have done so. 

45.  I note that in the ruling, the learned judge had initially made an order nisi that the cost were to be in the cause.  After submissions from the parties, he ordered that Mr Eric So to bear the cost of the application.  Later he made a similar order regarding the hearing of 30 April 2009.  These orders are within the discretion of the learned judge and we do not believe we are entitled to interfere. 

Disposition

46.  For the above reason, I would dismiss the appeal, save that para. 2(c) of the Order should be deleted.

Costs of the appeal

47.  The appellant has been party successfully (on redaction) and that should be reflected in the Order.  I make an order nisi that the appellant pays 80% of the respondent’s costs of the appeal.

Hon Cheung JA:

48.  I agree with the reasons of the judgment of Tang VP.

49.  I will make the following additional observation.

50.  First, while the Judge held that the family courts are more relaxed in their approach to the test of particularity, he at the same time recognized that, ‘even if in family matters a more relaxed approach is adopted, this does not mean that the court can ride roughshod over the interest of third parties’.

51.  The Judge was clearly right in his approach.  That a Family Judge is exercising a quasi-inquisitorial role and should adopt a broad-brush approach and eschew over-elaboration are principles well supported by authorities : Parra v. Parra [2003] 1 FLR 942 at 949 per Thorpe LJ.

52.  At the same time because a third party is not a party to the proceedings, the law recognizes that any requirement by a Court to disclose personal information against a third party is an interference with his privacy rights and it has to be justified for the protection of the rights of the applicant : M v M [2006] 2 FLR 1253.  The principles relating to application for information against third parties are the same be they relate to family or non-family matters : see the summary of the principles in Charman v. Charman [2007] 2 FLR 467 at [17]-[22].  The protection of privacy rights is enshrined by Article 39 of the Basic Law and Article 14 of the Bill of Rights.

53.  Hence in the context of a subpoena against a third party to produce documents, the law recognized that it cannot be drawn so widely as to amount to requiring the witness to give discovery; the object is to compel the witness to produce evidence directly material to the issues in the case; he is not required to undertake an unfairly burdensome search through his records to locate a document or to see if he has any document relating to a particular subject matter; further where the third party is a company, an order to produce a company’s documents cannot be directed at an individual, the order must be directed at the company : Parayiotou v. Sony Music Ltd [1994] 2 WLR 241 per Sir Donald Nicholls VC (as he then was) at 248 and 244; To Kan Chi v. Pui Man Yau [1998] 3 HKC 371.

54.  In this case the documents sought against the company are clearly necessary to determine the issue concerning the true nature of the payments to the parties.  The documents are sufficiently particularized for them to be produced by the company.

55.  The only difference we have with the Judge is on redaction of the documents.  To prohibit the company to redact the part of a document not relevant to the issue clearly impinges upon the company’s right to privacy.  The situation is not improved by allowing the husband’s expert to have access to the unredacted documents.  He is not a Court appointed expert.  I do not accept that a party’s expert should have access to confidential information so considered by the non-party.

56.  Any dispute relating to redacted part would have to be resolved by the Judge hearing the ancillary relief application.

Hon Tang VP:

57.  The appeal is dismissed save that para. 2(c) of the Order should be deleted.  We also make an order nisi that the appellant pays 80% of the respondent’s costs of the appeal.