XCHRX LEE SHUK YEE v. LEE SUK PING and Others

IN THE HIGH COURT

(Probate Action No. P9 of 1993)

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J U D G M E N T

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Mrs Justice V. Bokhary:

INTRODUCTION

1. This is an appeal by the Defendants in this probate action against an Order made by Master Jennings on 4th June 1996 striking out their Defence and Counterclaim for failure to comply with an Unless Order which he had made on 3rd October 1995.

2. The parties are siblings. Their father ("the Deceased") had died on 22nd February 1990. The Plaintiff claims a grant of Letters of Administration of the Deceased's estate. And the same thing is counterclaimed by the 1st Defendant supported by the other Defendants.

3. On 17th May 1995, Master Jennings had made an Order requiring the Defendants to make discovery of documents as per the schedule to such Order ("the Original Schedule").

4. Contending that the Defendants had failed to make discovery as per the Original Schedule, the Plaintiff took out an application which resulted in the making of the Unless Order which I mentioned at the outset.

5. By that Unless Order, it was provided that the Defence and Counterclaim be struck out unless by 4 pm on 10th October 1995 the Defendants completed discovery as per the Original Schedule.

6. On 3rd November 1995, the Plaintiff, contending that the Defendants had not complied with the Unless Order, took out a Summons to strike out the Defence and Counterclaim.

7. Upon the return date of that Striking Out Summons, Master Jennings adjourned its hearing to a fresh date, directing in effect that the Plaintiff file an Amended Schedule specifying the respects in which she says that the Defendants had failed to comply with the Unless Order.

8. The Plaintiff duly filed such an Amended Schedule on 6th March 1996.

9. There is no dispute as to the principles to be applied. They are succinctly set out in the White Book at p.468 in note 24/16/1, which note I need not recite here.

10. The Plaintiff no longer pursues items 2(d), 2(e), 3(d), 4(a), 4(b) and 6 of her Amended Schedule. She pursues all the other items thereof.

11. What I propose to do now is to go through all the items on which the Plaintiff does pursue.

THE AMENDED SCHEDULE ITEM BY ITEM

"1(a) Directors' Report and Audited Accounts of Special Effect for the year ended 31.03.94" and

"1(b) Directors' Report and Audited Accounts of Special Effect for the year ended 31.03.95"

12. These two items can be dealt with together. The Defendants have filed evidence, which I cannot dismiss as untrue, that the Audited Accounts for the years ended 31.03.94 and 31.03.95 were not in existence at the material time.

13. Be that as it may, the Original Schedule specified "All financial statements of Special Effect Trading Investments Company Limited ("Special Effect") for the years from 1990 to date." I am satisfied that it must have been perfectly plain to the Defendants that the only reason why the Amended Schedule spoke of Audited Accounts for the years ended 31.03.94 and 31.03.95 is that the Defendants had disclosed Audited Accounts for the preceding years. I am equally satisfied that it would also have been perfectly plain to the Defendants that if Audited Accounts were unavailable for any year or years, then Unaudited Accounts should have been discovered for that year or those years.

14. The Defendants have not put forward either in evidence or in argument anything to suggest with any degree of conviction that even Unaudited Accounts for the years ended 31.03.94 and 31.03.95 did not exist. It is inherently unlikely that they would not exist.

15. I am satisfied that in regard to these two items the Master was justified in finding that the Defendants were in contumelious disobedience of the Unless Order and would, on that basis, be justified in striking out their Defence and Counterclaim. This judgment could end here, but I will continue to deal with the other items nevertheless.

"2(a) General journals, books and records of Special Effect for the year ended 31.03.94" and

"2(b) General journals, books and records of Special Effect for the year ended 31.03.95"

16. It is plain that these items refers to those journals and books which would be maintained on a day-to-day basis. Having regard to the allegations in this case, what is plainly required would be those books and journals "as is" in the state they were left in as day-to-day documents. The Defendants filed evidence saying that the documents here in question were in the process of being completed. That is not what is required. As I said, the documents were required "as is". Some computer printouts were produced. In my view, Ms Eu for the Plaintiff is right when she says that discovery had to be made of the journals and books from which information was extracted for the purpose of feeding the same into the computer.

17. In regard to these two items also, I am satisfied that the Master was justified in finding contumelious disobedience and striking out accordingly.

"2(c) Accounting records, receipts, vouchers and ledgers for the years 1990 to 1995"

18. Item 2 of the Original Schedule speaks of all books and records. As far as ledgers are concerned, Ms Eu concedes that they come within the concept of books under items 2(a) and 2(b). As far as receipts and vouchers are concerned, no specific mention are made of them in item 2 of the Original Schedule. There is here some ambiguity which should be resolved in favour of the party facing striking out. I do not think that item 2(c) avails the Plaintiff.

"3. Statements in relation to the accounts held by Special Effect with

Sin Hua Savings and Commercial Bank Limited: -

(a) 031-349-0-022998-9 from 1st January 1990 to 09.05.90; and from 11.05.90 to date

(b) 031-349-0-023103-0 from 1st February 1990 to 09.08.91; and from 11.10.91 to date

(c) 031-352-0-010987-1 from 1st January 1990 to 24.07.91; and from 26.02.94 to date"

19. In my view, Ms Eu's point is well made when she says that the Defendants chose not to take any reasonable steps to get these bank statements despite the Unless Order. In seeking to meet the argument that such choice was contumelious, Mr Mumford for the Defendants described the documents in question as - here I quote from his skeleton argument - "a small number of irrelevant bank statements". I do not see that the argument can be dismissed in that way.

20. The Defendants assert that the bank account named in item 3(a) could not be operated after the Deceased's death. There are a number of entries which call that assertion into question. As one can see from certain entries - and this is common ground - on 9th May 1990, months after the Deceased's death, the balance of the item 3(a) bank account was reduced to zero by the transfer from it of $158,763.15 for the purpose of opening the item 3(b) bank account. That account was in turn promptly depleted by transfers so that by the 19th of the same month its balance stood at a mere $463.15.

21. In my view, items 3(a), (b) and (c) also justify a finding of contumelious disobedience which warrants striking out.

"5. All rent receipts or other documents evidencing the payment or receipt of rent or licence fee in respect of the letting, sub-letting, use or licence of the various lots listed in Schedule D to the Statement of Claim from 1990 to date

7. All rent receipts or other documents evidencing the payment or receipt of rent or licence fee in respect of the letting, sub-letting, use or licence of the lots stated in paragraph 6 above"

22. I deal with these two items together because the main argument and counter-argument under them is the same. In paragraph 11 of Mr Tang Pui Hung's Affirmation on 31st May 1996, he says that there were no rent receipts for either of the item 5 Lots or the item 7 Lots.

23. Ms Eu submits that what Mr Tang says in paragraph 11 of that Affirmation is contradicted by paragraph 4 of the same Affirmation, which includes this sentence "The deceased however frequently requested for the return of the accounting records and documents including the relevant leasing documents, rental receipts and vouchers for his own purposes."

24. Mr Mumford responds by pointing out that there were Lots other than the item 5 and item 7 Lots; that rent receipts were discovered in respect of those other Lots; and that those must be the rent receipts to which Mr Tang is referring in paragraph 4 of his Affirmation.

25. That may be so. It is not clear that it is not so. Certainly it is not in the least clear that Mr Tang was indeed contradicting himself.

26. All things considered, I do not think that either item 5 or item 7 assists the Plaintiff. Her main argument here is not made out. Nor are the subsidiary ones here. Contumelious disobedience is nowhere near made out by reference to either item 5 or item 7.

RESULT

27. Nevertheless, the Plaintiff succeeds in resisting this appeal since I am satisfied, for the reasons which I have given, that the Master was entitled to strike out by reference to items 1(a), 1(b), 2(a), 2(b), 3(a), 3(b) and 3(c).

28. I should also mention that Mr Mumford did argue additionally that by reason of their lack of involvement with Special Effect and their position generally, no striking out would be appropriate against the 2nd, 3rd and 4th Defendants since they were in no position to make discovery any way. I reject that argument. First of all, they did not appeal the Unless Order. Secondly, there would be no utility in their Defence and Counterclaim once the 1st Defendant is struck out since they merely support her quest for a grant of Letters of Administration as an alternative to a grant in favour of the Plaintiff.

29. The appeal is dismissed.