GLOBAL GAMING PHILIPPINES LLC v. DEUTSCHE BANK AG, HONG KONG BRANCH

HCCL 1/2017

[2019] HKCFI 405

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO 1 of 2017

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D E C I S I O N

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Application

1.  Before the court is the summons issued on 26 September 2017 (“Summons”) by the plaintiff Global Gaming Philippines LLC (“GGAM”) pursuant to s 42(1) of the High Court Ordinance (Cap 4) (“HCO”) and Order 24 rule 7A(2) of the Rules of the High Court (Cap 4A) (“RHC”) for discovery of 4 classes of documents against the respondent Mr Enrique K Razon Jr (“Mr Razon”) who is not a party to the underlying action herein between GGAM and the defendant Deutsche Bank AG (“DB”), Hong Kong Branch (“DBHK”).

Background leading to the underlying action: dispute and proceedings between GGAM and the Bloomberry Parties

2.  GGAM, a Delaware company, is a member of the group of companies under Global Gaming Asset Management LP, which develop, acquire, invest in, advise on and manage hospitality projects around the world, especially those in the casino sector.

3.  More particularly, GGAM was established to enter into a Management Services Agreement dated 9 September 2011 (“MSA”) with Sureste Properties Inc (“Sureste”) and its direct wholly-owned subsidiary Bloomberry Resorts and Hotels Inc (“BRHI”) to provide management and technical services in the development and construction of the Solaire Resort & Casino (“Solaire”), a luxury hotel and gaming resort in Manila, Philippines, and to manage the operation of Solaire (once completed) for 10 years.  BRHI is the licence holder and operator of the casino component of Solaire whereas Sureste operates the hotel and other non-gaming components of Solaire.

4.  Sureste is in turn a direct wholly-owned subsidiary of Bloomberry Resorts Corporation (“BRC”), a company listed on the Philippine Stock Exchange.

5.  Mr Razon, a Filipino billionaire and one of the richest persons in the Philippines, is by himself and through various holding companies including Sureste and one Prime Metroline Holdings Inc (“Prime Metroline”) the single largest and controlling shareholder of BRC.  He also acts as the Chairman and Chief Executive Officer of BRC.

6.  To become a co-owner of the Solaire project, GGAM also entered into an Equity Option Agreement dated 16 April 2012 (“EOA”) with the predecessor in interest to Prime Metroline and BRC, pursuant to which GGAM, at a consideration of US$37.43 million, purchased and received 921,184,056 shares in BRC (“Shares”) in December 2012.

7.  The Shares were initially held for GGAM by Deutsche Regis Partners Inc (“Deutsche Regis”), a joint venture of DB in the Philippines.  They were subsequently transferred to DB’s Manila Branch (“DB Manila”) pursuant to a Multi-Market Custody Agreement dated 19 December 2012 between GGAM and DBHK (“MMCA”).[1]  Following a restructure of GGAM’s accounts with DB in October 2013, in place of DB Manila, DBHK became the direct custodian of the Shares.  This was done pursuant to the MMCA as extended to DBHK and amended on 12 September 2013 (“Amended MMCA”). 

8.  While the Shares are in DBHK’s custody, dividends in the sum of PHP32,241,441.96 (approximately US$643,014) (“Dividends”) were distributed in respect of the Shares on 5 May 2015.[2]

9.  Dispute subsequently arose between GGAM on the one hand and Sureste, BRHI and Prime Metroline (“Bloomberry Parties” collectively) on the other hand, which culminated in the purported termination of the MSA by BRHI and Sureste on the ground of GGAM’s breach thereof.  Such dispute generated two sets of proceedings.

10.  First:

(1)   On 12 September 2013, GGAM commenced arbitration proceedings against Sureste and BRHI in accordance with the MSA in Singapore (“Singapore Arbitration”). 

(2)   One of the issues for determination was the ownership of the Shares, with BRHI and Sureste contending that GGAM had become obliged to return the Shares to them.

11.  Second, arising from BRHI and Sureste’s said assertion, prior to the constitution of the tribunal (“Singapore Arbitral Tribunal”) in the Singapore Arbitration:

(1)   On 17 January 2014, the Bloomberry Parties filed with the Regional Trial Court of Makati City, Philippines (“Makati Court”) an urgent petition for issuance of interim measures of protection against GGAM, Deutsche Regis[3] and the Philippine Stock Exchange.

(2)   On 25 February 2014, the Makati Court issued a reasoned decision granting the interim measures of protection sought by the Bloomberry Parties (“Injunction Decision”).

(3)   On 27 February 2014, the Makati Court issued a Writ of Preliminary Injunction the operative part of which enjoined, inter alia, GGAM and Deutsche Regis, their successors, representatives, agents and all persons assisting them or acting in their behalf or under their direction from disposing of or facilitating, allowing, implementing and completing the sale or transfer of any of the Shares during the pendency of the Singapore Arbitration (“Injunction”).

(4)   On the same date, the Makati Court also issued a Writ of Preliminary Attachment (“Attachment”) directing the attachment of the Shares.

(5)   On 3 March 2014, in compliance, the Branch Sheriff of the Makati Court issued a Notice of Garnishment to DB, which referred to the Shares and notified DB that it should not deliver, transfer or otherwise dispose of such shares in its possession belonging to GGAM to any person or entity except to the Branch Sheriff under the penalty of law (“Garnishment”).

12.  DB itself was not a party to the said proceedings before the Makati Court but the Injunction, the Attachment and the Garnishment (“Philippine Injunction Orders” collectively) were served on DB Manila on 28 February 2014 and 3 March 2014 respectively.

13.  On 11 March 2014, GGAM filed a Petition for Review on Certiorari (“Review Petition”) with the Philippine Court of Appeals (“Philippine CA”) seeking to annul the Philippine Injunction Orders.

14.  In the meantime, the Singapore Arbitral Tribunal was constituted on 28 March 2014.  Thereafter:

(1)   By a decision dated 30 May 2014, the Singapore Arbitral Tribunal ruled that the Philippine Injunction Orders were “a temporary order only in effect as long as not confirmed, revoked or modified” by the Singapore Arbitral Tribunal.

(2)   On 9 December 2014, upon GGAM’s application, the Singapore Arbitral Tribunal ruled that the Philippine Injunction Orders should be deemed to be vacated and lifted (“Interim Arbitral Order”) and directed the parties to bring this ruling before the Philippine courts to assure its implementation.

15.  GGAM took the view that, under Philippine law, the Interim Arbitral Order was self-executing and that no additional action (in the form of recognition and enforcement) was required to vacate and lift the Philippine Injunction Orders.

16.  However, as directed by the Interim Arbitral Order and because the Review Petition was pending, by Manifestation and Motion dated 15 December 2014, the GGAM notified the Philippine CA of the Interim Arbitral Order, contending that it was self-executing and asking the Philippine CA to enter judgment to confirm it and to remand the case to the Makati Court for any further implementing measures that might be necessary or appropriate.

17.  This was met with opposition from the Bloomberry Parties who, by a Comment/Opposition dated 29 January 2015, disagreed that the Interim Arbitral Order was self-executing.

18.  By a Resolution issued on 29 May 2015, the Philippine CA

(1)   dismissed the Review Petition as being academic as nothing was left for the court to annul since the Interim Arbitral Order not only superseded the Injunction Decision but also vacated and lifted the Philippine Injunction Orders; and

(2)   ordered that the case be remanded to the Makati Court for recognition and enforcement

(“1^st Philippine CA Resolution”).

19.  The 1^st Philippine CA Resolution provoked:

(1)   the Bloomberry Parties’ Motion for Clarification, asking the Philippine CA to declare that it had not recognised and enforced the Interim Arbitral Order and that the Philippine Injunction Orders were not ipso facto lifted; and

(2)   GGAM’s Motion for Amendment of the 1^st Philippine CA Resolution to direct the Makati Court to take steps pursuant to the Interim Arbitral Order. 

20.  On 27 November 2015, the Philippine CA issued a second Resolution, denying the Bloomberry Parties and GGAM’s said respective motions but expressly ruling that the Interim Arbitral Order was not self-executing and that the Philippine Injunction Orders would remain effective until GGAM applied for and obtained a Philippine court order to vacate it and repeated its earlier direction for the case to be remanded to the Makati Court for recognition and enforcement of the Interim Arbitral Order (“2^nd Philippine CA Resolution”).

21.  There was no appeal by GGAM against either the 1^st or 2^nd Philippine CA Resolutions.  On 17 May 2016, the Philippine CA issued an Entry of Judgment, confirming that the 1^st Philippine CA Resolution became final and executory on 21 January 2016.

22.  GGAM ultimately succeeded in the Singapore Arbitration.  On 20 September 2016, the Singapore Arbitral Tribunal made a Partial Award on Liability in favour of GGAM (“Liability Award”), ruling that:

(1)   BRHI and Sureste’s termination of the MSA was unjustified and constituted a breach of the MSA.  BRHI and Sureste are liable to GGAM for management fees.

(2)   Neither Sureste nor BRHI could challenge GGAM’s title to the Shares so that GGAM can exercise its rights in relation to the Shares.

23.  Since 3 October 2016, GGAM has requested DBHK, and DBHK has refused, to release to GGAM the Shares and the Dividends.  On 28 November 2016, GGAM provided a copy of the Liability Award to DBHK.  The reason given by DBHK for not releasing the Shares and the Dividends to GGAM is its concern that the Philippine Injunction Orders still subsist. 

24.  In the meantime, the Bloomberry Parties have continued to renew the annual surety bonds (in the sum of PHP800 million equivalent to US$15.97 million) conditional upon which the Philippine Injunction Orders were issued, with the last such renewal in February 2017.  The Makati Court made an order “noting” such renewal on 10 February 2017.

GGAM’s claim against DBHK

25.  By the writ of summons issued herein on 31 March 2017, GGAM claims against DBHK for the immediate release of the Shares and the Dividends and for damages for the loss caused to GGAM by DBHK’s refusal to release the Shares and the Dividends.  It is GGAM’s case that DBHK has acted in breach of the Amended MMCA in that DBHK has refused to release the Shares and the Dividends despite GGAM’s repeated demands therefor since about 3 October 2016.

DBHK’s defence and action after commencement of this action

26.  In defence, DBHK refers to and relies on, inter alia, the following terms of the Amended MMCA:

(1)   Clause 12.5 which provided inter alia:

“… The Bank may with notice to the Client further refuse to execute any instruction or accept any deposit if in the Bank’s opinion it is contrary to any applicable law, rule or other regulatory requirement (including those arising from any governmental authority, self-regulatory organisation, stock exchange, clearing house, depository, settlement system or market) or the assets for deposit are not in good order.”

(2)   Clause 19 which read:

“Where the Bank is notified of any adverse claim or dispute in relation to any Securities and/or Cash, the Bank shall inform the Client of the same and shall be entitled to take whatever action reasonably deemed necessary by it in relation to such Securities and/or Cash.”

27.  DBHK claims to have formed the opinion that the existence of the Philippine Injunction Orders renders the release of the Shares and/or the Dividends to GGAM contrary to applicable Philippine law, rules and/or regulatory requirements.  Further or alternatively, DBHK has, by reason of the Philippine Injunction Orders, been notified of adverse claims or disputes in relation to the Shares and/or the Dividends and has reasonably deemed it necessary to decline to act on GGAM’s instructions for the release of the Shares and the Dividends.

28.  After the commencement of this action, on 11 September 2017, taking the view that any issue as to the continuation or effect of the Philippine Injunction Orders should be determined by the courts in the Philippines, DB (through DB Manila) itself brought a Motion for Clarification in the Makati Court seeking orders as to: (1) whether the Philippine Injunction Orders remain valid; and (2) whether the Shares and the Dividends may be released to GGAM.

29.  On 23 November 2017, the Makati Court held that the Philippine Injunction Orders have remained valid.  GGAM does not accept, and would appeal against, this decision.[4]

GGAM’s reply and response

30.  At the hearing on 18 December 2017, Mr Victor Joffe (with Miss Sheena Wong) for GGAM referred to Braganza v BP Shipping Ltd [2015] 1 WLR 1661 for the proposition that, where a contractual term gives one party to the contract the power to exercise a discretion, or to form an opinion as to relevant facts and where the decision would affect the rights and obligations of all parties, there is a conflict of interest.  While the court will not make that decision for the parties, the court will seek to ensure that the power is not abused by implying a term in appropriate cases that the power should be exercised not only in good faith but also without being arbitrary and capricious or even irrational in the sense in which the term is used when reviewing the decisions of public authorities, so that such a decision can be impugned, not only where it is one that no reasonable decision-maker could have reached but also where the decision-making process has failed to exclude extraneous considerations or to take account of obviously relevant ones.

31.  By way of illustration, in Braganza v BP Shipping Ltd, the defendant employer was entitled to withhold compensation for death, accidental injury or illness if, in its or its insurer’s opinion, the death, accidental injury or illness resulted from the employee’s willful act, default or misconduct.  On the basis of a report by an internal investigation team that the most likely explanation for the disappearance of the claimant’s husband was that he had committed suicide, rather than accidentally falling overboard, the defendant’s general manager decided for the purposes of the death in service benefit clause that the claimant’s husband had committed suicide and that no benefit was payable to the claimant.   It was held that, applying the above test, the correct approach to an investigation into cause of death for the purposes of a death in service benefit claim was that suicide was such an inherently unlikely act that a positive conclusion as to its occurrence could not be made without cogent evidence to support it and that, on the evidence, the investigation team’s report and conclusion did not amount to sufficiently cogent evidence to justify a conclusion by the general manager that the claimant’s husband had committed suicide.  The general manager’s decision could not stand and the claimant was entitled to the contractual death in service benefit.

32.  Bearing in mind such principle, GGAM contends in reply that:

(1)   The Philippine Injunction Orders were subject to confirmation, modification, amendment, revision and revocation by the Singapore Arbitral Tribunal.  GGAM so contends by reason of:

(a)   the express wording of the Injunction Decision which indicates that, in making the Philippine Injunction Orders, the Makati Court contemplated that the Singapore Arbitral Tribunal, after it had been constituted, might modify, amend, revise or revoke such orders; and

(b)   the provisions of the Philippine Special Rules of Court on Alternative Dispute Resolution pursuant to which the Injunction Decision was made.  In particular, it is GGAM’s contention that local courts’ enforcement and recognition of the Interim Arbitral Order is not required by virtue of rules 5.9, 5.13, 5.14 and 5.16.

(2)   The Singapore Arbitral Tribunal had on 9 December 2014 by the Interim Arbitral Order unequivocally revoked, superseded, vacated and/or lifted the Philippine Injunction Orders.

(3)   The Philippine CA had acknowledged the revocation of the Philippine Injunction Orders by the Singapore Arbitral Tribunal, which is not changed by the Bloomberry Parties’ renewal of the surety bonds for the Philippine Injunction Orders.  The “noting” of such renewal by the Makati Court is administrative only and does not confirm the existence or validity of the Philippine Injunctions Orders.

(4)   The Philippine Injunction Orders ceased to exist or bind any party, including but not limited to DBHK or DB Manila.

(5)   DBHK has since 9 December 2014 (the date of the Interim Arbitral Order) not been prohibited from releasing the Shares and/or the Dividends to GGAM.

(6)   The Singapore Arbitral Tribunal reiterated in the Liability Award that GGAM can exercise its rights in relation to the Shares.

(7)   There is therefore no factual or legal basis for DBHK to continue to hold the opinion that releasing the Shares or the Dividends to GGAM would be contrary to the Philippine Injunction Orders or the law of the Philippines or to believe or suspect that there are still any adverse claims or disputes in relation to the Shares or the Dividends.

(8)   The DB Motion is therefore unnecessary.

33.  For present purpose, it is pertinent to note paragraphs 6.3 and 6.4 of GGAM’s reply by which GGAM pleads that:

(1)   In about later 2016 or early 2017, a Mr John Farry on behalf of DBHK privately told a Mr Daniel Weiner (GGAM’s outside counsel) and a Mr Michael Popok on behalf of GGAM that DBHK was willing to release the Shares with BRC’s consent.  However, BRC, without any basis, objected to the release of the Shares to GGAM and DBHK, acting upon such objection, has refused to release the Shares.

(2)   Subject to discovery, GGAM reserves its rights to plead further regarding the interactions between DBHK and any of the Bloomberry Parties and the influence by the Bloomberry Parties over DBHK in respect of the release and/or non-release of the Shares and the Dividends.

34.  I note that although Mr Farry recalls speaking with Mr Popok and Mr Weiner in about later 2016 or early 2017, he does not recall making the said statements attributed to him.  He has further produced an email from Mr Weiner to him on 20 December 2016 which referred to a conversation between the 3 gentlemen earlier on that day and which also referred to the Injunction and related appeals and arbitration, but not pressure allegedly been placed on DB by BRC or Mr Razon.

Application for third party discovery and service of application

35.  Against such background, by the Summons, GGAM applies against Mr Razon for discovery of 4 classes of documents (“Documents” collectively):

(1)   all correspondence between Mr Razon and DBHK and/or DB Manila in relation to the release or non-release of the Shares and the Dividends (“Class 1 Documents”);

(2)   notes, minutes and recordings of meetings and phone calls between Mr Razon and DBHK and/or DB Manila in relation to the release or non-release of the Shares and the Dividends (“Class 2 Documents”);

(3)   all correspondence between Mr Razon on the one hand and BRC and the Bloomberry Parties on the other (including their respective employees and agents) in relation to the release or non-release of the Shares and the Dividends (“Class 3 Documents”); and

(4)   notes, minutes and recordings of meetings and phone calls between Mr Razon on the one hand and BRC and the Bloomberry Parties on the other (including their respective employees and agents) in relation to the release or non-release of the Shares and the Dividends (“Class 4 Documents”).

36.  Mr Razon is ordinarily resident in the Philippines.  Nevertheless, GGAM served the Summons on Mr Razon when he was visiting Hong Kong for the 2-day Forbes Global CEO Conference in 2017, which was a public event.

Bases for the Summons

37.  In taking out the Summons, GGAM suggests that in refusing to release the Shares and the Dividends, DBHK acted on Mr Razon’s instructions.  GGAM so suggests on 4 bases:

(1)   Mr Razon is exceedingly wealthy.  He is a major client of DB and is influential in the Philippines.

(2)   In response to an inquiry by GGAM’s counsel in Singapore as to whether there would be objection to the release of the Shares and the Dividends, the law firm acting for Sureste and BRHI in the Singapore Arbitration stated that Mr Razon objected to the release of the Shares.  To be precise, what was said was that Mr Razon had repeatedly indicated that there would be no objection if GGAM was “not demanding excessive and unwarranted ‘compensation’ in addition to the Shares”.

(3)   Sureste and BRHI renewed the security to keep the Philippine Injunction in effect, which shows that Mr Razon wanted the Shares not to be released.

(4)   The Global Head of Corporate Finance / Global Capital Markets and Global Transaction Banking Legal at DB in London, i.e. Mr Farry, had told people related to GGAM that “BRC had put pressure on [DB] and told [DB] “don’t release the Shares”.

Mr Razon’s grounds of opposition

38.  Mr Razon opposes the Summons principally on 5 grounds:

(1)   The Summons is based on mere insinuation and surmise, and is woefully inadequate.

(2)   The documents that GGAM seeks are irrelevant and/or unnecessary for fair resolution of the issues between GGAM and DB.

(3)   The Classes 1 and 2 Documents, if discoverable, could and should be obtained from DB, not Mr Razon.

(4)   Mr Razon has denied the existence of the Classes 3 and 4 Documents or asserted legal professional privilege over them as the Shares and their release remain the subject of legal proceedings between DB and the Bloomberry Parties, which GGAM does not and cannot seriously dispute.

(5)   The documents sought, if existing, would be abroad.  An order compelling discovery of such documents would encroach upon the sovereignty of a foreign state which would be granted only in exceptional urgent circumstances, which is not the case here.

Analysis

39.  Non-party discovery is granted by the discretionary exercise of the power vested in the court by s 42 of the HCO and Order 24 rule 7A(2) of the RHC and there is no existing ‘right’ or ‘entitlement’ to such discovery vested in a plaintiff: per Bharwaney J in Chan Yim Wah Wallace v New World First Ferry Services Limited [2015] 3 HKC 382 at [18]. 

40.  Such exercise of discretion involves the conventional considerations of ‘existence, relevance and necessity’ under Order 24 rules 7A and 8(2) as well as a balancing exercise of the need for disclosure in the interest of the administration of justice to ensure a fair trial on full evidence and applicable countervailing factors: see again Chan Yim Wah Wallace[5] at [19].

41.  So at the first stage, the usual criteria of existence, possession custody or power, relevance and necessity apply equally to discovery from a non-party.

42.  The Peruvian Guano test[6] applies to determine whether the documents sought from the non-party are relevant to an issue arising out of the claim that has been made: per To J in Tullett Prebon (Hong Kong) Limited v Chan Yeung Fong Nick, HCA 219/2009, unreported, 9 June 2011 at [74] and [76]. 

43.  Nevertheless, the need to ensure reasonable proportionality and procedural economy in the conduct of proceedings under Order 1A may inhibit the court from granting non-party discovery under s 42 and Order 24 rule 7A(2) for background or ‘chain of inquiry’ documents: Chan Yim Wah Wallace at [20] and [53].

44.  When what is sought is a class of documents, each document of the class must be relevant in the Peruvian Guano sense.  The court has power to order a non-party to disclose relevant documents which meet the Peruvian Guano test but has no power to order disclosure of documents that do not.  This principle cannot be circumvented by including the relevant documents in a class which also includes documents which do not meet the Peruvian Guano test.  See Tullett Prebon (Hong Kong) Limited at [81]-[84], where To J adopted what Chadwick LJ said in Three Rivers District Council v Bank of England (No 4) [2003] 1 WLR 210 (CA) at [34]-[38]. 

45.  Fishing expedition with a view to hunting around the documents in the hope that they will reveal some improprieties on the part of the opposite party or will provide information for the applicant to pursue more inquires is not permitted.  See Ngan In Leng v Chu Yuet Wah (No 1) [2013] 1 HKLRD 717, per Deputy Judge Queeny Au-Yeung (as her Ladyship then was) at [26] and [62(5)].

46.  The court must also consider whether disclosure is necessary in order to dispose fairly of the claim or to save costs. The following considerations are relevant: (1) how important is the information to the issues; (2) has the applicant taken appropriate steps to obtain the information within the proceedings before seeking discovery from the third party; (3) would it be sufficient to draw adverse inferences on the basis that the party from whom the information was sought within the proceedings has failed to supply the information; (4) what is the nature of the relationship, if any, between the parties to the proceedings and the third party; and (5) if disclosure is necessary and proportionate, will the editing of documents protect private information?  See Tullett Prebon (Hong Kong) Limited at [85] at which To J adopted, for the purposes of considering whether to exercise his discretion to order non-party disclosure, Hartmann JA’s approach in SMSE v KL (No 2), HCMC 2/2006, unreported, at [63] in the context of an application to set aside a subpoena duces tecum. 

47.  The condition of necessity requires the court to focus on the necessity of the third party being required to make discovery.  A third party should not be ordered to make discovery if it is not necessary to do so, e.g. where the information can be obtained from within the proceedings or other sources: Chan Yim Wah Wallace v New World First Ferry Services Limited at [55].

48.  If there is no other route to obtain the relevant and necessary information, the court must in the third and final stage proceed to balance the different interests: Chan Yim Wah Wallace v New World First Ferry Services Limited at [60].

49.  The third party’s right to privilege is preserved by Order 24 rule 7A(6).

50.  Where the non-party is a foreign person, as in this case, additional considerations must be made.  A non-party can only be compelled to produce documents that are abroad in exceptional circumstances of urgent necessity.  See: Dicey, Morris and Collins on The Conflict of Laws, 15^th edition, Volume 1, at 8R-067, 8-069, 8-072 and 8-073.  Where it is necessary to obtain evidence under compulsion from a third party who is outside the jurisdiction, the proper procedure should be, inter alia, by way of a letter of request to the foreign court.  See Dicey, Morris and Collins on The Conflict of Laws, supra, Rule 23(3) at paragraph 8R-067 and paragraph 8-740 and Mackinnon v Donaldson, Lufkin & Jenrette Securities[1986] Ch 482 at 499F-H.

51.  Turning to the case before me, it is unnecessary for the proper disposal of the Summons to examine whether there is sufficient evidence in support of GGAM’s allegation that Mr Razon had required DBHK not to release the Shares and the Dividends to GGAM and, in holding onto the Shares and the Dividends, DBHK has acted on Mr Razon’s instruction.

52.  Applying the principles summarised above, the Summons can in my opinion be dealt with on the following bases. 

53.  First, even assuming existence, Mr Razon is ordinarily resident in the Philippines.  One would expect the Documents to be in his possession custody or power in the Philippines.  GGAM has not suggested otherwise.  GGAM was able technically to enliven the Hong Kong court’s jurisdiction only by taking advantage Mr Razon’s visit and stay for a 2-day conference here.  However, the same principle should apply even if the foreign non-party is served within jurisdiction.  The court should not demand foreign non-parties to obey its sovereign authority in respect of conduct abroad.  Ordering discovery by a foreigner of documents outside the jurisdiction concerning their conduct outside the jurisdiction would encroach on the sovereignty of a foreign state.  See Mackinnon v Donaldson, Lufkin & Jenrette Securities[1986] Ch 482, per Hoffmann J at 493G-H and 498C-E (in the context of an application by a non-party American bank to discharge an ex parte order under s 7 of the Bankers’ Books Evidence Act 1879 which required it to produce books and papers held in New York relating to an account of one of the defendants and to set aide a subpoena duces tecum against an officer at its London office) and R v Grossman (1981) 73 Cr App R 302, per Lord Denning MR, at 307-308.

54.  GGAM has not raised any urgency or exceptional circumstances to take this case out of the ordinary.  The correct course for it to take, if it really wants discovery from Mr Razon, is to apply to the Philippine court or to ask the Hong Kong court to issue a letter of request to the Philippine court.  The Hong Kong court should not be asked to encroach upon the sovereignty of the Philippines by making an order against Mr Razon who is in the Philippines for discovery of documents which (if existing) are also in the Philippines.

55.  On this ground alone, the Summons should be dismissed.

56.  Second, I see no merit in the Summons insofar as it relates to the Classes 1 and 2 Documents on the additional ground that they can or should in any event be obtained from within the proceedings so that it is unnecessary to seek them from Mr Razon as a non-party.

57.  The Classes 1 and 2 Documents, if they exist, would be generated in the course of communications between Mr Razon and DBHK and/or DB Manila, which means that DB should and would have possession custody or power over the same documents.  DBHK is the defendant to this action.  Any such documents can be obtained from DB. 

58.  In this connection, on 21 November 2017, GGAM’s solicitors Kobre & Kim (“K&K”) wrote to DBHK’s solicitors Davis Polk (“DP”), seeking discovery of all correspondence and notes etc of meetings and phone calls between “any of the Bloomberry Parties and DBHK or DB Manila discussing the Shares or the Dividends”, i.e. the Classes 1 and 2 Documents.  By a letter dated 28 November 2017 to K&K, DP questioned inter alia why the documents sought are relevant and necessary to the determination of the contested issues in these proceedings.  I do not read DP’s said letter as containing DBHK’s refusal to disclose the Classes 1 and 2 Documents.  Rather, DBHK was just asking to be satisfied that such documents are properly discoverable by it. 

59.  Indeed, even where the other party to the action does refuse to give discovery, it does not follow that it would then become necessary to obtain the documents from the other party to the documents but who is a stranger to the proceedings.  The proper course is not to drag in a third party who is thought to have the documents because it is open to the party seeking the documents to, and he should simply, apply for specific discovery against the other party to the proceedings.  If the 4 criteria of existence, possession custody or power, relevance and necessity are fulfilled, discovery by the other party within the proceedings should and would be ordered.

60.  Third, on the premises that the Classes 1 and 2 Documents, if discoverable, should and would be discovered by DB, one questions the relevance of the Classes 3 and 4 Documents or how their discovery would be necessary for the fair disposal of this action or the saving of costs.  If the Classes 1 and 2 Documents should reveal pressure/influence having been brought by Mr Razon on DB not to release the Shares and the Dividends, then GGAM would not need the Classes 3 and 4 Documents.  Even if the Classes 1 and 2 Documents do not verify or support GGAM’s suspicion about the true reason why DBHK has refused to release the Shares and Dividends, I fail to see how papers documenting the internal communications between Mr Razon and the Bloomberry Parties about the release or otherwise of the Shares and the Dividends would assist GGAM.  That Mr Razon and the Bloomberry Parties should so discuss is unremarkable.  After all, the Shares and the Dividends were/are a subject of the Singapore Arbitration and the Philippine Injunction Orders.  This is so even if Mr Razon and the Bloomberry Parties expressly wish the Shares and the Dividends not to be released.  Of course, they so wish.  The issue put forward by GGAM for the purpose of the Summons is whether Mr Razon instructed DBHK to hold onto the Shares and the Dividends, and not whether Mr Razon desired the Shares and the Dividends to remain with DBHK.

61.  Fourth, GGAM is here not searching for material to support an allegation of fact which haa been raised bona fide with adequate particularization.  Rather, it is trying to solicit information which may enable an allegation of fact to be raised or lead to a line of inquiry which would disclose evidence.  This is a classic fishing expedition.  See C v C, CACV 410/2005, unreported, 28 July 2006, per Rogers VP at [8].

Disposition

62.  For these reasons, I dismiss the Summons and make an order nisi that GGAM should pay Mr Razon’s costs of and occasioned by the Summons to be taxed forthwith on a party and party basis with certificate for counsel, if not agreed.