WU SUET FEI AND ANOTHER v. KOWLOON DEVELOPMENT FINANCE LTD

HCA 1054/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1054 OF 2006

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D E C I S I O N

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Application

1. This is an application for specific discovery by the Plaintiffs against the Defendant.

Background

2. On 14 March 2003, Mr. Chung Coc Tuong executed a Building Mortgage (“the Mortgage”) in favour of the Defendant for a loan of $1m in respect of Lot No. 1838 in D.D. No.10 together with a 3-storeyed building (“the Building”) erecting or to be erected thereon.  Interest was levied at 33% per annum and the loan should be repaid 6 months from the issuance of the Certificate of Compliance.

3. The Building was constructed and the Certificate of Compliance was issued on 2 July 2003.  However, Mr. Chung (“the Deceased”) died on 25 March 2004.  Thereafter, the surviving widow of the Deceased, Madam Wu Suet Fei, liaised with the Defendant for redemption of the Mortgage, but the parties disputed with each other for a number of matters, including the locus of Madam Wu and the exact amount owed by the Deceased.

4. On 25 January 2006, Letters of Administration was issued to Madam Wu and Li Chun Ling in respect of the Deceased’s Estate under HCAG007766/2005.  They then commenced the present proceedings on 16 May 2006 against the Defendant for, inter alia, an account of the Mortgage.

5. The Defendant contested the proceedings and counterclaimed for vacant possession of the Building, payment due, interest, loss, costs and so forth.

6. By a summons dated 26 September 2006, the Plaintiffs sought discovery against the Defendant under Order 24 rule 7 of the Rules of the High Court and inherent jurisdiction of this Court for an order:

“(1)     that the Defendant shall make an affidavit stating:-

(a)     whether any document(s) evidencing the drawdown of the Building Mortgage (i.e. Drawdown Notice(s)) duly completed and signed by CHUNG COC TUONG deceased and addressed to the Defendant prior to his death;

(b)     whether any certificate(s) from the Contractor showing various stages of the construction works that have been completed; and

(c)     whether any document(s) confirming that the Defendant has advanced the whole sum of HK$1 Million to CHUNG COCO TUONG deceased; are, or have at any time been, in the Defendant’s possession, custody or power, and, if not then in its possession, custody or power, when it parted with them and what have become of them AND file and serve on the Plaintiff the same affidavit within 7 days of this Order; and

(2)     …”

7. The Defendant opposed the summons, but nevertheless did provide further discovery (“the Further Discovery”) by way of 3 further supplemental lists of documents filed on 4 October 2006, 26 October 2006 and 11 January 2007 respectively.

8. I heard the substantive argument of the matter on 8 May 2007.  Mr. Yau Man Fai of Messrs. Y.S. Lau & Partners acted for Plaintiffs and Mr. Andrew Leung of Counsel represented Defendant.  Having heard from the parties, I reserved my decision to be handed down.  I now do so.

Ruling

9. Upon consideration of the evidence authorities and submissions, I have decided not to make any order to the Plaintiffs’ summons, save on the question of costs.

Reasons

10. I say so because the Defendant, by the Further Discovery, had, in my view, answered the Plaintiff’s application and rendered the same academic when the matter came before me.  Briefly, the Plaintiffs told the Court that they wanted to redeem the Mortgage.  However, since it was the Deceased who handled the matter and the Plaintiffs only took up the matter as administrators, they asked the Defendant to show, among others, how the $1 m loan had been advanced.

11. The Defendant disclosed the following documents in the Further Discovery:

(a) Supplemental List of Documents:
“1.	Certificate of Contractor dated 17th October 2002	17/10/2002
2.	Certificate of Contractor dated 4th November 2002	4/11/2002
3.	Certificate of Contractor dated 18th November 2002	18/11/2002
4.	Certificate of Contractor dated 20th December 2002	20/12/2002
5.	Certificate of Contractor dated 8th January 2003	8/1/2003
6.	Copy Certificate of Contractor dated 11th May 2003	11/5/2003
7.	Notice of Draw Down dated 1st November 2002	1/11/2002
8.	Notice of Draw Down dated 8th November 2002	8/11/2002
9.	Notice of Draw Down dated 27th November 2002	27/11/2002
10.	Notice of Draw Down dated 27th December 2002	27/12/2002
11.	Notice of Draw Down dated 16th January 2003	16/1/2003
12.	Notice of Draw Down dated 23rd May 2003	23/5/2003
13.	Record of Payment dated 1st November 2002	1/11/2002
14.	Record of Payment dated 8th November 2002	8/11/2002
15.	Record of Payment dated 27th November 2002	27/11/2002
16.	Record of Payment dated 27th December 2002	27/12/2002
17.	Record of Payment dated 16th January 2003	16/1/2003
18.	Record of Payment dated 23rd May 2003	23/5/2003”
(b)  2nd Supplemental List of Documents:
“1.	Authorization of Chung Coc Tuong dated 16th April 2002	16/4/2002
2.	Copy Cheque of HK$138,620.00	17/4/2002
3.	Copy Cheque of HK$30,000.00	17/4/2002
4.	Copy Bill of Messrs. Leung Kin & Co.	Undated
(c) 3rd Supplemental List of Documents:
“1.	Copy Loan Memorandum dated 15th April 2002	15/4/2002
2.	Power of Attorney dated 17th April 2002	17/4/2002”

13. By examining the Further Discovery, I am satisfied on balance that the Defendant has discharged its obligation of discovery under the Plaintiffs’ summons.  In this respect, I note the complaints made by Mr. Yau as to the insufficiency of the Further Discovery.  Nonetheless, it suffices for me to agree with Mr. Leung that most of Mr Yau’s complaints are to be dealt with later by this Court because they are matters for cross-examination and evidence to be weighed by the Trial Judge.  Further or in the alternative, I am not satisfied that any further order for specific discovery is necessary in the circumstances either for disposing fairly of the cause or matter or for saving costs.

Costs

14. I do not have the benefit from the parties on the issue of costs.  Nonetheless, in my opinion, the Plaintiffs rightfully issued the summons.  Later, by the Further Discovery, the Defendant answered the application.  As such, a split costs order appears to be appropriate.  I therefore make an order nisi that:

(a) The Defendant shall bear the costs of and incidental to the Plaintiffs’ Summons dated 26 September 2006 up to the filing and service of the 3rd Supplemental List of Documents of the Defendant on 11 January 2007, including costs reserved on 6 October 2006 and 10 November 2006, to be taxed if not agreed, in any event.

(b) The Plaintiffs shall bear costs of the Defendant for the hearing on 8 May 2006, including Certificate of Counsel, to be taxed if not agreed, in any event.