WIN HONOR MANAGEMENT LTD v. THE INCORPORATED OWNERS OF HILLTOP PLAZA

DCCJ 785/2025

[2026] HKDC 1358

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 785 OF 2025

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BETWEEN

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DECISION

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1.  This is the 1^st Defendant (“D1”)’s appeal against the order of Master Eva Leung (“Master”) dated 10 March 2026, whereby the learned Master ordered D1 to disclose the documents specified in paragraphs 1 to 7 of the Schedule annexed to the 2^nd Defendant (“D2”)’s summons dated 7 November 2025.

2.  At the hearing, Mr Ng for D1 confirmed that the scope of the present appeal is only limited to item 7 of the Schedule, namely the monthly bank statements of D1 in respect of the management of Hilltop Plaza (“Building”) for the financial years ended 31 December 2019 up to and including 31 December 2024 (“Bank Statements”).

BACKGROUND

3.  By a written agreement dated 26 April 2019 between the Plaintiff (“P”) and D1 (“First Agreement”), P agreed to provide security guard services to the Building from 1 May 2019 at a monthly fee of $41,500.

4.  On or about 28 April 2021, P and D1 signed another written agreement for the provision of security guard services to the Building from 1 May 2021 on essentially the same terms as the First Agreement (“Second Agreement”, and together the “Two Agreements”). It is noted that D1 signed the First Agreement and the Second Agreement “for Owners of Hilltop Plaza”.

5.  D2 was incorporated in or around July 2024.

6.  By a letter dated 24 September 2024, D2 terminated D1’s role as “DMC Manager” of the Building with effect from 1 January 2025.

7.  On 10 February 2025, P commenced the present action against D1 and D2.

8.  It is P’s case that:-

(a) P provided security guard services to the Building from 1 May 2021 up to 10 December 2024 in performance of the Second Agreement;

(b) D1 failed to pay the contract fee of the Second Agreement in full and the outstanding sum is $1,394,131 (“Outstanding Sum”); and

(c) The Second Agreement is binding on D2 as principal, even though D2 was incorporated after the date of the Second Agreement, and D2 is therefore liable for the Outstanding Sum

9.  In its Defence and Counterclaim filed on 17 June 2025, D2 admits that P provided security guard services to the Building from 1 May 2021 up to 10 December 2024. It is D2’s case that:-

(a) The owners of the Building (“Owners”) had settled all fees for security guard services provided by P by paying management fees to D1;

(b) D1 should have made use of the management fees received to settle the contract fee owed to P. If D1 failed to do so, that is D1’s fault; and

(c) Accordingly, D2 is not liable for the Outstanding Sum.

10.  In its Defence filed on 28 October 2025, D1 admits that the Outstanding Sum is owed to P but denies that D1 is liable to pay it. It is D1’s case that:-

(a) D1 is not personally liable under the Two Agreements as they were signed by D1 as agent for the Owners; therefore, liability to pay the Outstanding Sum lies on D2 and/or the Owners;

(b) Further, some of the Owners had failed to pay management fees since around 2015, and D1 was unable to fully settle P’s service fees because the management fees collected from the Owners were insufficient to pay all costs and expenses relating to the management of the Building; and

(c) As of 31 December 2024, the total amount owed to D1 by the Owners was $165,338.

11.  When D1 and D2 filed their respective Defences, they also issued Contribution Notices against each other seeking contribution or indemnity. In substance, they rely on their defences to P’s claim as the grounds for contribution or indemnity; namely D2 alleging that the Owners paid management fees to D1 and it was D1 which failed to settle the Outstanding Sum, whereas D1 alleging that some of the Owners failed to pay management fees, resulting in D1 having insufficient monies to pay the Outstanding Sum.

12.  Shortly after D1 filed its Defence on 28 October 2025, D2 took out the present application on 7 November 2025 for specific discovery of ten items of documents.

13.  On 24 November 2025, D2 filed the Statement of Claim against D1 in the contribution proceedings and pleaded that:-

(a) In the Building’s financial statements for the year ended 31 December 2024, it is stated that uncollected management fees were $167,376 as of 31 December 2024;

(b) In its Defence, D1 alleged that the outstanding management fees owed by the Owners and/or D2 to it were $165,338;

(c) By alleging that D2 owed management fees of $167,376 or $165,338 to it, D1 effectively admitted that the Owners and/or D2 had contributed sufficient management fees to enable it to settle the Outstanding Sum less the alleged uncollected or outstanding management fees;

(d) Upon receiving payments for the management expenses from the Owners and/or D2, D1 was under a duty to pay the Outstanding Sum to P;

(e) Accordingly, if P failed to receive the Outstanding Sum under the Second Agreement, it was due to D1’s failure to pay the said sum from the management fees paid by the Owners and/or D2.

14.  On 10 March 2026, D2’s application for specific discovery was heard by the learned Master. At the hearing, D2 narrowed the scope of its application to the following 7 items:-

(a) Item 1: The management accounts for the financial years from 2015 to 2024;

(b) Item 2: The audited financial statements for the financial years from 2015 to 2024;

(c) Item 3: All general ledgers, subsidiary ledgers and/or relevant documents for all items in the financial statements for the financial years from 2015 to 2024;

(d) Item 4: All underlying bills, invoices, vouchers, receipts and other documents of the financial statements for the financial years from 2015 to 2024;

(e) Item 5: The draft budget setting out the proposed expenditure during the financial year and the budget specifying the total proposed expenditure during the financial years from 2015 to 2024;

(f) Item 6: The summary of income and expenditure and a balance sheet for each 3-month period during the financial years from 2025 to 2024; and

(g) Item 7: The monthly bank statements of D1’s account in HSBC and BOC in respect of the management of the Building for the financial years from 2015 to 2024.

15.  D1 agreed to provide Items 1 to 6 of the Schedule but only for the financial years from 2019 to 2024. It also maintained its objection to Item 7.

16.  After hearing submissions, the learned Master ordered discovery of Items 1 to 7 for the financial years 2019 to 2024 and ordered D1 to pay 80% of D2’s costs of the application, summarily assessed at $95,00

17.  On 24 March 2026, D1 filed a Notice of Appeal to Judge in Chambers.

18.  On 8 May 2026, D2 filed the Amended Statement of Claim against D1 in the contribution proceedings and added that:-

(a) Pursuant to the BMO, D1 shall open and maintain an interest-bearing account and shall use that account exclusively in respect of the management of the Building;

(b) The Owners were requested by D1 to pay, and did pay, management fees into D1’s HSBC account and BOC’s account;

(c) Neither D1, the Building, nor any third party held any bank account for the specific use of the Building;

(d) In the financial statements of the Building from 2015 to 2024, there is no record of any bank account opened or maintained for the specific use of the Building;

(e) The above suggests that D1 has acted in breach of the BMO by mixing the management expenses with its own cash; and

(f) D1 had a marked and unexplained preference for settling other expenses of the Building (including its own remuneration) over P’s fees.

19.  On 10 June 2026, D1 filed the Defence and Counterclaim against D2 in the contribution proceedings in which it is pleaded that:-

(a) According to the audited account, the total accumulated deficit and debt of the account of the Building as of 31 December 2024 was $1,586,530, comprising an accumulated deficit of $1,421,192 and uncollected management fee from the Owners of $165,338;

(b) As of 31 December 2024, the amount immediately due and payable by the Owners and/or D2 to D1 was $1,566,130 consisting of (a) the Outstanding Sum (of $1,394,131); (b) amount payable to other service providers in the sum of $98,009; and (c) D1’s remuneration of $73,990.

20.  At the time of the appeal hearing, D1 has provided documents under items 1 to 6 already.

APPLICABLE LEGAL PRINCIPLES

21.  An appeal from a Master’s decision to judge in chambers is a de novo hearing, and the judge will deal with the matter in question as if it comes before him or her for the first time. The judge will of course give the weight it deserves to the previous decision of the Master; but he is in no way bound by it; Hong Kong Civil Procedure 2026 §58/1/2.

22.  The legal principles on discovery are well-settled and a helpful summary can be found in Deputy Judge Andrew Li’s recent decision in Victory City International Holdings Ltd (In Liquidation) v Deloitte Touche Tohmatsu (a firm) [2025] HKCFI 5505:-

(a) There is no jurisdiction to make an order for specific discovery under O.24 r.7 unless there is sufficient evidence or prima facie case that: (i) the documents or classes of documents exist which the other party has not disclosed; (ii) the documents relate to a matter in issue in the action; and (iii) the documents are in the possession, custody or power of the other party;

(b) Once it is established that those three prerequisites for jurisdiction do exist, the court has a discretion whether or not to order discovery;

(c) The court will not make an order unless the discovery sought is necessary either for disposing fairly of the cause or matter or for saving costs. The burden lies on the party resisting discovery to show that discovery is not so necessary;

(d) The Peruvian Guano test remains the test of relevance. A document is relevant if: (a) it is reasonable to suppose that it contains information which may, not must, either directly or indirectly enable the party requiring the same either to advance his own case or to damage the case of his adversary; or (b) it is a document which may fairly lead the party to a train of inquiry which may have either of those two consequences;

(e) For the purpose of discovery, the pleadings have to be looked at broadly;

(f) The order must identify with precision the documents or categories of documents which are required to be disclosed;

(g) Notwithstanding the Peruvian Guano test, “fishing” is not allowed, and discovery should not be oppressive.

THE SUBMISSIONS

D1’s submissions

23.  Mr Ng argued that:-

(a) The “matter in issue” must be determined by the pleadings in the contribution proceedings, not the main action. Discovery between co-defendants is confined to issues pleaded in the contribution notice and associated pleadings, not their defences in the main action;

(b) D2’s Amended Statement of Claim against D1 in the contribution proceedings and the Contribution Notice have not pleaded any issue that genuinely requires the Bank Statements. The pleaded issues concern accumulated deficit and debt and D2’s prima facie liability, which are already evidenced by audited accounts;

(c) Whether D1 failed to pay the Outstanding Sum from management expenses contributed by the Owners is “circular” and “beside the point”. The real issue is the existence of a total accumulated deficit of $1,586,530 as shown in the audited accounts, for which D1 has repeatedly demanded payment from D2;

(d) The Bank Statements are irrelevant to that deficit issue, and D2’s reliance on general allegations of mismanagement or failure to open a dedicated building account does not justify discovery of the Bank Statements;

(e) Even if relevance were established, D2 has not shown that disclosure of the Bank Statements is “necessary either for disposing fairly of the cause or matter or for saving costs”;

(f) Items 1 to 6 (which include management accounts, audited accounts and underlying documents) have already provided the material needed to address the pleaded deficit and are voluminous, making further discovery of the Bank Statement disproportionate;

(g) Case law cautions against excessively wide application of the Peruvian Guano test and against interlocutory discovery skirmishes. The Court should avoid wasteful, expensive discovery when the real issues can be tried on existing documents;

(h) D2’s application is “fishing” in that it seeks the Bank Statements not to support adequately particularised allegations but to search for material that might allow it to raise new allegations of mismanagement;

(i) D2’s summons was issued before pleadings in the contribution proceedings were deemed closed and before the time for general discovery. Specific discovery before pleadings is only ordered in exceptional circumstances, which are absent here; and

(j) In the alternative, if the court orders disclosure of the Bank Statements, the order should expressly allow redaction so that entries unrelated to the management of the Building are removed.

D2’s submissions

24.  Mr Lau for D2 framed the central factual questions as “where did the money go?”. The main issues involved included (a) whether owners paid management fees and, if not, by how much? (b) whether there was an ongoing deficit? (c) how D1 applied the management fees, including any preference to other expenses over P’s fees?

25.  Mr Lau submitted that:-

(a) The Bank Statements are the “most direct evidence” of money in and out of the management account of the Buildings, apart from financial statements and underlying documents. They are directly relevant to both D1’s case of deficit / non-payment and D2’s case of payment of management fee by the Owners in the main action, and therefore to the issues between D1 and D2;

(b) D1’s attempt to confine relevance to the contribution proceedings is flawed. D2 is entitled to seek from D1 documents relevant to issues in the main action, and relevance can extend beyond strictly pleaded issues where documents pertain to matters in controversy;

(c) Even if items nos. 1 to 6 are voluminous, that does not render discovery of bank statements unnecessary. The audited and unaudited financial statements are questionable. For instance, the financial statements from 2015 to 2020 are unaudited; the financial statements from 2022 to 2024 do not show a breakdown of the expenses, the financial statements from 2021 to 2024 appear to omit the bank accounts of the Building despite clear evidence showing that the Owners paid management fees by depositing them into D1’s bank accounts;

(d) On that basis, the Bank Statements are needed to clarify whether and how management fees were applied to P’s charges, cross-check the accuracy of Items 1 to 6 and investigate the alleged accumulated deficit;

(e) D1 has provided no evidential basis for its assertion that disclosure of the Bank Statements would significantly increase costs or be burdensome;

(f) D2’s application is not “fishing”. It is simply seeking to elicit evidence for the parties’ pleaded allegations regarding the Owners’ payment and non-payment of management fees;

(g) D1’s abandonment of its appeal on Items 1 to 6 shows that a broader scope of financial documents has already been accepted as non-fishing. The narrower request for bank statements cannot logically be characterised as fishing when the wider request is now accepted;

(h) D2 opposes any redaction of bank statements, pointing out that D1 has adduced no evidence that they contain entries unrelated to management of the Building, and that any such assertion is speculative;

(i) D2 denies that the application was taken out “too early”. As between P and D2, pleadings were deemed closed on 29 July 2025, so the application was after close of pleadings; and

(j) Under the authorities, specific discovery can be ordered “at any time”, and an application after close of pleadings is not premature.

DISCUSSIONS

26.  As can be seen from the above, one of the main disagreements between Mr Ng and Mr Lau is on whether, for discovery as between co-defendants, the issues in dispute should be confined to those issues pleaded in the contribution notices and the associated pleadings in the contribution proceedings or should include those issues pleaded in their Defences filed in the main action.

27.  Mr Ng submitted that, it is well-established that where a contribution or indemnity is sought against a co-defendant, the court will not order discovery until a contribution notice has been served, thereby putting the issue on the record before the court. As Somervell LJ stated in Clayson v Rolls Royce Ltd [1951] KB 746 at 751:

“…where one defendant as against another defendant is alleging a right to discovery,... then it is right that he should first deliver a [contribution] notice the party seeking discovery should serve his [contribution] notice on the other defendant so that the court when it comes determine his claim can have a record of what issues he seeks or is anxious to raise.”

28.  Mr Ng further submitted that the principle that discovery will not be ordered until a contribution notice has been served clearly demonstrates that the issues in dispute between co-defendants are confined to those pleaded in the contribution notice and its associated pleadings, and not their defences in the main action; see also Matthews and Malek, Disclosure, 6^th edition §4-17.

29.  It was Mr Ng’s submission that it is also well established that disclosure between parties other than claimants and defendants requires some issue between them for determination by the court, arising out of their pleadings; Disclosure §4-15. In Birchal v Birch Crisp & Co [1913] 2 Ch 375, the plaintiff, as assignee of the defendant Jackson, claimed to be entitled to an aliquot share of commission allegedly due from the defendants Birch, Crisp & Co to Jackson. Birch, Crisp & Co by their defence alleged that the plaintiff had no right at all, because they had a damages claim against Jackson for misrepresentation which they were entitled to set off against any claim by him for commission, but they did not file any counterclaim. The English Court of Appeal held that Birch, Crisp & Co were not entitled to an order for discovery against their co-defendant Jackson. Cozens-Hardy MR emphasised the absence of any counterclaim against the co-defendant, stating at 378–379:

“[Birch, Crisp & Co] put in a defence to such effect, but they do not in any way counterclaim in the action against ... Jackson ... There is no issue directed between the parties, no relief is asked, or, apart from counterclaim, could be asked, in this action by Birch, Crisp & Co against Jackson ...”

30.  Kennedy LJ likewise emphasised that the defendant had not counterclaimed against the co-defendant, and stated at 380-381:

“[Birch, Crisp & Co] might have counterclaimed against the plaintiff and Jackson because as they allege they are setting up this defence as a defence against the plaintiff so far as he is assignee of Jackson - and Jackson, their co-defendant, would properly have been made a defendant to that counterclaim because the agreement is an agreement with him, the invalidity of which they are seeking to assert as against the plaintiff. Then the judge at the trial in dealing with that counterclaim would have had to deal with the rights between the plaintiff, these defendants, and their co-defendant… [Birth Crisp & Co] [Birch, Crisp & Co] made no claim against Jackson at all; and there is no issue between them on the pleadings.”

31.  Mr Ng further referred to the following cases and submitted that where there are no rights to be adjusted between co-defendants and no issue arises between them, discovery will be refused:-

(a) In Brown v Watkins (1885) 16 QBD 125, the plaintiff brought claims against two defendants in the same action: one for breach of a contractual stipulation, and the other, in the alternative, for negligence as agent in effecting a contract without such stipulation contrary to instructions. As explained by Lord Esher MR in Shaw v Smith (1886) 18 QBD 193 at 197-198, the ratio of Brown v Watkins is that the application for discovery “must be by and against parties between whom there is some right to be adjusted in the action”. As there was no right to be adjusted between the defendants in Brown v Watkins, the court refused discovery by one defendant against his co-defendant;

(b) In Shaw v Smith, the plaintiff sued Smith for breach of covenant for quiet enjoyment, and sued Sir Joseph Whitwell Pease and Pease & Partners for letting down his surface by working their mines. The judge granted inspection of the mines of the latter defendants, but on appeal the English Court of Appeal set aside the order. Lord Esher, MR, stated at pp. 198-199 that:-

“[The defendant] Smith cannot be liable in respect of those workings upon his covenant for quite enjoyment, so with regard to those two causes of action there can be no rights to adjust as between [the defendant] Smith and the other defendants in the action ... So, it appears to me, there are nit any rights to be adjusted in the action between Smith and the other defendants I do not think [the rule] gives the Court any jurisdiction to make this order as between the defendant Smith and the other defendants. The mere accident of their both being defendants in the same action does not, in my opinion, give that jurisdiction, where there is no right to be adjusted in the action as between them”

(c) Smith v Shaw was applied in Birchal (p.378 per Cozens-Hardy MR). Similarly, in Manatee Towing Co and Coastal Tug & Barge Inc v Oceanbulk Maritime SA [1999] 1 Lloyd's Rep. 876, Rix J observed at 881 that “the circumstances in which one party may be justified in calling for discovery of documents from another party where no material issue directly arises between them may be rare”.

32.  On the other hand, Mr Lau referred to the following comments of Master Marlene Ng (as Her Ladyship then was) in Wu Ching Sau v New World First Bus Service Limited, HCPI 767/2009, 9 September 2010, to submit that, although the pleadings usually determine relevance to a matter in question, the obligation to provide discovery does not necessarily mean a matter on which an issue has joined in the pleadings, but the documents pertain to matters from which an inference can properly be drawn that they are the subject of controversy:

“66. In light of the above discussion, although the pleadings and particulars will usually determine relevance to a matter in question, the obligation to provide discovery in respect of a matter in question does not necessarily mean a matter on which issue has joined in the pleadings, but the documents must be matters as to which an inference can properly be drawn that they are the subject of controversy between the parties. But there is no doubt that discovery will not be ordered for the purpose of ‘fishing’ …”

33.  In my view, the above passage does not support Mr Lau’s argument. It is first noted that the case of Wu Ching Sau is not concerned with discovery as between co-defendants. In that case, the application for specific discovery was made by the plaintiff against the defendant.

34.  Furthermore, the comments of Master Marlene Ng (as Her Ladyship then was) were made in the context of the test of “relevance” (at §62). They do not address the separate question whether, for the purpose of discovery between co-defendants, the “issues in dispute” should be confined to those arising between them in the contribution proceedings or extended to encompass issues as between the plaintiff and the defendant(s) in the main action.

35.  Having considered the authorities cited by Mr Ng, I accept his submissions and find that, for discovery as between co-defendants, the issues in dispute are those pleaded in the Contribution Notices and the associated pleadings in the contribution proceedings, rather than in their Defences filed in the main action.

36.  The next question is whether the Bank Statements are relevant to any of the issues arising in the contribution proceedings between D1 and D2, and whether their disclosure is necessary for disposing fairly of those proceedings.

37.  In the present case, the allegations between D1 and D2 can be summarised as follows:-

D2’s allegations

(a) The Owners had fully paid the management fees to D1, and it was D1’s failure to apply the management fees received from the Owners which resulted in non-payment of the Outstanding Sum to P;

(b) D1 failed properly to manage the management fees paid by the Owners, including failing to open and maintain an account used exclusively for the management of the Building;

(c) Even if some of the Owners had failed to pay the management fees, the total amount of management fees due from the Owners is much less than the Outstanding Sum, and D1 chose to pay its own remuneration rather than settling P’s contract fee;

D1’s allegations

(d) Some of the Owners failed to pay the management fees, resulting in a deficit in the Building’s management account and leaving D1 without the financial means to pay the Outstanding Sum.

38.  Consistent with Mr Lau’s theme of “where did the money go?”, these allegations give rise to the following issues:-

(a) Whether the Owners paid the management fees and, if not, the extent of any shortfall;

(b) Whether there was an ongoing and continuing deficit in the Building’s management account; and

(c) How D1 applied the management fees it received, and whether there was any preference for settling other expenses over P’s fee.

39.  Mr Lau submitted that the Bank Statements are the most direct evidence of the money in and out of the Building’s management accounts and therefore directly relevant to the three issues identified above.

40.  With respect, I do not agree.

41.  As to the issue of payment or non-payment of management fees, one would expect D1, as manager, to have kept proper contemporaneous records of management fees received from the Owners, including the amount received each month and the particular unit from which it was received. One would also expect those payments to be evidenced by invoices and receipts and, in the event of default, demand letters; and these documents should already be encompassed within Items 1 to 6. Any shortfall in payment of management fees can, in principle, be calculated by deducting the amount actually received from the amount which ought to have been received. Against that background, it is difficult to see how the Bank Statements are relevant to the issue of payment or non-payment of management fees.

42.  The same applies to the issue of whether there was an ongoing deficit in the Building’s management account and its extent. The expenses incurred should be recorded in the management accounts and financial statements, supported by underlying documents such as payment vouchers, invoices and receipts from service providers, all of which should fall within Items 1 to 6. By comparing the total amount of management fees received with the total amount of properly evidenced expenses, one can readily ascertain whether there was a deficit and, if so, the amount of that deficit. I do not see how the Bank Statements, which merely show movements of monies in the bank accounts, are relevant for that purpose.

43.  As for the issue of how D1 applied the management fees and whether there was any preference for other expenses over P’s fees, that is in essence a question of factual explanation and justification by D1 based on the Building’s management accounts and underlying records already ordered to be disclosed. The Bank Statements, which record debits and credits on the bank accounts, do not themselves explain the purpose for which particular payments were made or why certain payments were prioritised over others. Those matters are more appropriately explored by reference to the accounting records and, ultimately, by witness evidence, rather than by trawling through raw bank data.

44.  Furthermore, I am not satisfied that discovery of the Bank Statements is necessary for resolving the issues that arise in the contribution proceedings at this stage.

45.  Bank statements normally contain only information as to the date, amount and mode of each deposit or withdrawal. Unless deposits and withdrawals are made by direct bank transfer with the name of the payor or payee clearly shown, it is often impossible to tell from the statements alone from whom a deposit originates or to whom a withdrawal is made without further enquiries of the banks. Even where the name of the payor or payee appears, the statements do not ordinarily indicate the underlying reason for the transaction.

46.  Mr Lau sought to justify the request for the Bank Statements by submitting that the truth and accuracy of the financial statements of the Building are “seriously questionable”. However, beyond general concerns and the absence of certain breakdowns, he was unable to identify any concrete irregularity in the Building’s management accounts or any specific entry that calls for further investigation by reference to the Bank Statements. In the absence of some particularised inconsistency or anomaly which cannot sensibly be explored on the basis of Items 1 to 6, D2’s request is, in my view, made for the purpose of enabling it to cross-check and audit the very documents already obtained under Items 1 to 6. That exercise is not necessary for disposing fairly of the proceedings at this stage and has a clear element of “fishing”, in the sense of looking for further mistakes or mismanagement rather than seeking evidence for specific, adequately particularised allegations.

47.  I should make clear that I am not ruling out the possibility that D2 might, at a later stage, be able to show that the Bank Statements have become relevant and necessary. If, after examining the documents disclosed under Items 1 to 6, D2 identifies specific irregularities or gaps in the financial records which cannot reasonably be investigated without reference to the underlying Bank Statements, that may justify a further, more tightly focused application for specific discovery of the Bank Statements. At present, however, D2 has not brought the case to that point.

48.  In summary, I am of the view that, at this stage, it has not been shown that the Bank Statements are relevant to any of the issues in dispute between D1 and D2, and that their discovery is not necessary for the fair disposal of the contribution proceedings or for saving costs.

DISPOSAL

49.  For the reasons set out above, I would allow D1’s appeal and set aside the learned Master’s order in relation to Item 7.

50.  Costs should follow the event. I therefore make an order nisi that D2 do pay D1’s costs of the appeal, with certificate for counsel. I am of the view that summary assessment is appropriate. I therefore direct that D1 shall submit its statement of costs within 7 days of this Decision and that D2 shall file its list of objections within 7 days thereafter. The summary assessment will be conducted on paper.

51.  As to the costs of D2’s application and the hearing before the learned Master, given my decision on Item 7, I would make an order nisi that 60% of D2’s costs of the application (including the hearing before the learned Master) be paid by D1 to D2 in any event and, based on the Master’s summary assessment (which has not been appealed), I would adjust the amount to HK$71,250 (being HK$95,000 × 6/8).

52.  The orders nisi made in the above two paragraphs will become absolute unless an application is made by any party to vary them within 14 days after the handing down of this Decision.

53.  Lastly, it remains for me to thank counsel for the helpful assistance rendered to the Court.