CH v. TTHM

FCMC 8214/2011

[2020] HKFC 236

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 8214 OF 2011

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J U D G M E N T
( Discovery )

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1.  By way of the summons taken out on 30 April 2019 (“Summons”), the petitioner (“W”) applies to compel the respondent (“H”) to file an affirmation stating whether he has at any time in his possession certain documents as specified in the Schedule as follows:

(1)   The bank books, bank statements and/or relevant material relating to the following: -

(a)   the bank account of 012874XXX34335 with the Bank of China (Hong Kong) Limited in the name of the Respondent as shown on item 36, namely tenancy agreement, of the Respondent’s List of Documents dated 3^rd May 2018 (“the List”) from the date of 3^rd November 2010 to 14^th November 2012, and thereafter, if any;

(b)   the bank account of 014-XXX-00080391 with the Bank of China (Hong Kong) Limited in the name of the Respondent as shown on items 27，28 and 29, namely the Respondent’s cheques, of the List from the date of 1^st July 2008 to the date of 30^th September 2008;

(c)   the bank account of 012678XXX31240 with the Bank of China (Hong Kong) Limited in the name of the Respondent as shown on item 50, namely tenancy agreement, of the List from the date of 1^st February 2011 to the date of 31^st January 2013, and thereafter, if any;

(d)   the bank account in the name of the Respondent in relation to its being used for rental payment by the tenant of items 43 and 44, namely tenancy agreements respectively, of the List from the date of 1^st July 2011 to the date of 31^st October 2013, and thereafter, if any;

(e)   the bank account in the name of the Respondent in relation to its being used for rental payment by the tenant of item 45, namely tenancy agreements, of the List from the date of 22^nd October 2011 to the date of 21^st October 2013, and thereafter, if any;

(f)    the bank account in the name of the Respondent in relation to its being used for rental payment by the tenant of item 46, namely tenancy agreements, of the List from the date of 1^st March 2012 to the date of 28^th February 2014, and thereafter, if any;

(2)   All the correspondence and other document passing between the Respondent and/or other party and Agnes Miu Ying Tsang relating to the assets, money and/or financial transfers and/or transactions of the assets from items 1 to 11 of the Schedule “A” to a trust settlement made on 2^nd day of March 2004 as shown on item 20 of the List from the period of about December 2005 to October 2010 in relation to purchase of the Properties (Items No.2 to No.7) allegedly being purchased with rental income, the trust property and/or loans from family member and the time afterwards relating to respective repayment of mortgage loans; and

(3)   All the correspondence and other documents passing between the Respondent and Desmond Kwon Fai Tsang (“the 2nd Intervener”) relating to assets, money and/or financial transfer and/or transaction of the income allegedly pooled by the 2^nd Intervener together with some of the Trust Property in relation to the purchase of Unit No.7, 4th Floor, Wellborne Commercial Centre, No.8 Java Road, North Point on 26 January 2006 (“Unit 217[1]”) and the time onwards to the date of 26th January 2007; and

(4)   Declaration by the Respondent (re: bank account) dated 19^th June 2011, (item No.41 of the List).

Background

2.  W issued a petition for divorce based on 2-year separation on 21 June 2011 and decree absolute was granted on 31 July 2012.

3.  After filing and service of the parties’ Form Es, questionnaires and answers, W issued a summons to join in several parties (ie the 5 interveners herein) and to set aside certain dispositions made by H in their favour.  Thereafter, H took out a summons asking for an order for determining the beneficial ownerships of 7 specified items of landed properties as particularized therein (“the 7 Properties[2]”) by way preliminary issue on 5 January 2017.  An order to such effect was made by DDJ AN Tse Ching (as she then was) on 3 November 2017 and 5 interveners were ordered to be joined.  As directed by the court, H filed and served his point of claims, W filed her defence and counterclaim and H filed his reply and defence to counterclaim. However, no point of defence has ever been filed by the 5 interveners as ordered.

4.  As pleaded in H’s point of claims, pursuant to the consent order in the Canadian divorce proceedings dated 6 February 2003 between H and his ex-wife Agnes Miu Ying Tsang (“Madam Mar”), a family trust had to set up for investment for the benefit of the 4 children of H and Madam Mar, who are the 2^nd to 5^th Interveners (“the 4 Children”).  On 2 March 2004, they entered into a written trust agreement wherein Madam Mar was the settlor and H was appointed as trustee.  In short, H pleads that he holds the 7 Properties on express, implied and/or constructive trust for the benefit of the 4 Children.

5.  H filed his list of documents producing, inter alia, some cheques, tenancy agreements etc in relation to the 7 Properties.

6.  Although H has not filed any affirmation to oppose this application nor stating that he is or is not in his possession the documents sought by W. Mr But for H has made submission to object this application.

The Law

7.  Mr Yim for W accepts that this discovery application is taken out in the context of the preliminary issue proceedings rather than under the ancillary relief proceedings, and submits that the relevant legal principles are governed by Order 24 rules 3, 7 and 8 of RHC.  In my view, it is necessary for the court to look at the pleadings filed by the parties under the preliminary issue proceedings in order to identify the real issues in dispute and to determine this application.

8.  The relevant parts of commentary concerning discovery can be found in para 24/7/1 to 24/7/6 and para 24/8/1 to 24/8/2 in the Hong Kong Civil Procedure 2021, which is not necessary to be reproduced here.

9.  In gist, the main legal principles governing the present application are briefly summarised as follows:-

(1)     The court must be satisfied that the documents sought are in existence, in the possession, custody or power of H and relevant to the issues in dispute.

(2)     The court will not order production unless it is satisfied that the production is necessary either for disposing fairly of the issues between the parties or for saving costs.

(3)     Discovery should not be allowed if it is oppressive, fishing or too wide and sweeping in scope.

(4) The order for specific discovery must identify with precision the documents required to the disclosed, for otherwise the person giving discovery may find himself in serious trouble for swearing to a false affidavit.

(5)     Where discovery is sought in relation to a class of documents, the class should not be defined or described too widely, and should not be defined so as to include documents which are not relevant.

Discussion

10.  In para (1) of the Schedule to the Summons, W asks for “the bank books, bank statements and/or relevant material relating to” various bank accounts as set out in the sub-para (a) to (f).  In my view, the wordings of “and/or relevant material” are too general and the scope of this class of documents is too wide.  W simply fails to establish as to how she or her lawyer believes that the so-called relevant material exists and indeed what they are.  As said, order for specific discovery must identify with precision the documents required to the disclosed.  I consider that the wordings of “and/or relevant material” amounts to “fishing” and should be disallowed.  I now turn to discuss each paragraph of the Schedule below.   

Para (1)(a) of the Schedule and Chu Kee Building[3]

11.  H pleads in his point of claims that the mortgage repayments in respect of Chu Kee Building were partly paid by the rental income derived from leasing out of this property, which was registered in H’s name.  H must bear the burden of proof of such allegation and this is one of the real issues in dispute.

12.  According to the tenancy agreement in respect of this property dated 3 November 2010 produced by H in his list of documents, the term of the tenancy is 2 years from 15 November 2010 to 14 November 2012 and the tenant shall pay monthly rent to the bank account of 012874XXX34335 with the Bank of China in the name of the landlord (ie H) pursuant to the said tenancy agreement.

13.  I am satisfied that the entries in the said bank account showing the deposits of the rental paid by the tenant is relevant and necessary for disposing fairly of the matter since it is the pleaded case of H of using the rental income to pay the mortgage instalments of this property, which is disputed by W. 

14.  However, W asks for the bank record covering not only the terms of the tenancy but also the period “thereafter, if any” whilst` there is no evidence before me whether or not the tenant renewed the tenancy after 14 November 2012.  In the circumstances, the wording in para (1)(a) of the Schedule to the Summons are unreasonably wide and I exercise my discretion to narrow its scope and revise as follows:

“The bank account of 012874XXX34335 with the Bank of China (Hong Kong) Limited in the name of H showing the deposits of the rental paid by the tenant from 3 November 2010 to 14 November 2012 in respect of Chu Kee Building as defined in H’s point of claims”

Para (1)(b) of the Schedule and Wah Hoi Mansion

15.  H pleads in his point of claims that he paid the initial deposit of Wah Hoi Mansion, which was registered in joint name H and W.

16.  In his list of documents, H produces 3 copy cheques issued by him from his bank account of 014XXX00080391 with the Bank of China (Hong Kong) Limited for purchase of this property and payment of estate agent fees.

17.  I am satisfied that as some Chinese characters “華凱大廈落大訂” and “華凱大廈落首期” were hand-written on the cheques nos. 630253 and 630254, the entries in the said bank account showing the withdrawals of these 2 cheques are relevant and necessary for disposing fairly of the matter.

18.  However, for the cheque no 630258 for payment of estate agent fee, I disagree that it is relevant to any real issues in dispute, discovery of which shall be disallowed.

19.  For para (1)(b) of the Schedule, I exercise my discretion to revise as follows:

“the bank account of 014XXX00080391 with the Bank of China (Hong Kong) Limited in the name of H showing the withdrawals of the 2 cheques as per items 27 and 28 of H’s list of documents.”

Para (1)(c) of the Schedule and Rialto Mansion

20.  This property was originally registered in H’s name in 1997 but H pleads that he subsequently transferred the interest to 2 of the 4 Children (ie 2^nd and 4^th Interveners) and himself in 2012. H only pleads that he repaid the mortgage loan from his own resources to the exclusion of W but never said that the mortgage repayments were paid by the rental income derived from leasing out of this property. Accordingly, even if the tenant of this property did pay rent into H’s bank account of 012678XXX31240 as obliged by the term in the relevant tenancy agreement, I consider that it is irrelevant.  I would disallow para (1)(c) of the Schedule.

Para (1)(d) of the Schedule and Workshop

21.  This property was registered in H’s name and H pleads in his point of claims that the mortgage repayments were partly paid by the rental income derived from leasing out of this property.

22.  According to the 2 different tenancy agreements produced by H in his list of documents, it seems that the Workshop was divided into 2 units (ie Unit AB and Unit AA) which were rented out to 2 different tenants.  For the agreement in respect of Unit AB, H’s bank account of 012874XXX34335 with the Bank of China was written therein.  Although there is no express contractual obligation on the part of the tenant to pay rent into this specific account as stipulated, I still consider that it is implied or very likely for the tenant to do so.  I would order the discovery of “the bank account of 012874XXX34335 with the Bank of China (Hong Kong) Limited in the name of H showing the deposits of the rental paid by the tenant from 1 July 2011 to 31 June 2013 in respect of Unit AB of the Workshop as defined in H’s point of claims”

23.  For Unit AA, as there is simply no mention of any bank account of H in the relevant tenancy agreement, I disagree that there is any business practice or whatsoever for this particular tenant to pay rent into any of the H’s designated account and hence, the discovery for this part shall be disallowed.

Para (1)(e) of the Schedule and Unit 407

24.  This property was originally registered in H’s name in 2006 and subsequently transferred to the 1st Intervener in 2011.  H pleads in his point of claims that the mortgage repayments were partly paid by the rental income derived from leasing out of this property.

25.  According to the tenancy agreement produced by H in his list of documents, the tenant of Unit 407 issued 24 post-dated cheques in advance to H.  I am satisfied that the production of the said cheques by H is relevant and necessary for disposing fairly of the matter.  However, W asks for the bank books and statements of the account being used for accepting such rental.  Although there is no evidence as to which bank account is used by H, I accept that H should have deposited these cheques into one of his bank accounts.  I therefore order discovery of “the bank account in the name of H showing the deposits of the 24 post-dated cheques from 22 October 2011 to 21 October 2013 in respect of Unit 407 as defined in H’s point of claims”.

Para (1)(f) of the Schedule and Unit 217

26.  This property was registered in H’s name.  Similarly, H pleads in his point of claims that the mortgage repayments were partly paid by the rental income derived from leasing out of this property.

27.  According to the tenancy agreement produced by H in his list of documents, the tenant of Unit 217 issued 11 post-dated cheques in advance to H.  I am satisfied that the production of the said cheques by H is necessary for disposing fairly of the matter.  Similar to Unit 407, W asks for the bank books and statements of the account being used for depositing such rental.  Although there is no evidence which bank account is indeed used, I order discovery of the bank account similar to the above.

Paras (2), (3) and (4) of the Schedule

28.  For paras (2) and (3) of the Schedule, W asks for discovery of all correspondence and other documents between H and Agnes Miu Ying Tsang (ie Madam Ma) relating to the 7 Properties and between H and the 2^nd Intervener relating to Unit 407.  There is no plea in H’s point of claims nor any document produced by H concerning these classes of documents.  I am not satisfied there is any established practice between the said parties who are or were family members to communicate with each other by way of written correspondence or documents in the past. W simply fails to prove that the documents sought are in existence. I consider that W is to launch a fishing expedition with a view to hooking something.  I refuse to order discovery of this part.

29.  Lastly, Mr But for H confirmed that the Declaration sought in para (4) of the Schedule has been produced as exhibit in H’s 2^nd affirmation dated 14 July 2015.  I therefore refuse to order discovery of this document.

Conclusion

30.  In the circumstances, I make an order in terms of the Summons with the Schedule revised as follows:

(1)     the bank books and bank statements relating to the following:

(a)  the bank account of 012874XXX34335 with the Bank of China (Hong Kong) Limited in the name of H showing the deposits of the rental paid by the tenant from 3 November 2010 to 14 November 2012 in respect of Chu Kee Building as defined in H’s point of claims;

(b)the bank account of 014XXX00080391 with the Bank of China (Hong Kong) Limited in the name of H showing the withdrawals of the 2 cheques as per items 27 and 28 of H’s list of documents;

(c)  the bank account of 012874XXX34335 with the Bank of China (Hong Kong) Limited in the name of H showing the deposits of the rental paid by the tenant from 1 July 2011 to 31 June 2013 in respect of Unit AB of the Workshop as defined in H’s point of claims;

(d)the bank account in the name of H showing the deposits of the 24 post-dated cheques drawn by the tenant from 22 October 2011 to 21 October 2013 in respect of Unit 407 as defined in H’s point of claims; and

(e)  the bank account in the name of H showing the deposits of the 11 post-dated cheques drawn by the tenant from 1 March 2012 to 28 February 2013 in respect of Unit 217 as defined in H’s point of claims.

31.  For the avoidance of doubt, I disallow the discovery of the documents as per paras (2) to (4) of the Schedule.

32.  Regarding the question of costs of this application, I consider that W only partly succeeds in this application and that a fair costs order shall be costs in the cause of the preliminary issue proceedings.  I make a costs order nisi which shall be absolute unless any of the parties apply to vary within 14 days by summons.