SINGH BALWINDER v. SINO PHIL ENGINEERING SERVICES LTD AND ANOTHER

DCEC374/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES' COMPENSATION CASE NO. 374 OF 2003

D E C I S I O N

1.  This is my decision concerning the application to set aside the writ of Subpoena duces tecum issued against Miss Leung.

Background

2.  This case concerns with the applicant’s application for compensation under the Employees’ Compensation Ordinance (hereinafter called “the Ordinance”) against the 1st respondent as his employer and the 2nd respondent as the principal contractor.  The trial was scheduled to start on 10 October. 

3.  On 26 September, the 2nd respondent issued a writ of Subpoena duces tecum (hereinafter called “the Subpoena”) against Miss Carol Leung Pui-yee (hereinafter called “Miss Leung”) of Ming An Insurance Company (Hong Kong) Limited (hereinafter called “Ming An”) requiring her to attend the trial and produce the following documents:

“	1.	Correspondences, declarations and statements between Hip Shing Contractors Limited (formerly known as Geotechnical Engineering Services Limited) and The Ming An Insurance Company (Hong Kong) Limited in relation to the applicant;
	2.	Correspondences with the Labour Department and The Ming An Insurance Company (Hong Kong) Limited in relation to the applicant; and
	3.	Correspondences, declarations and statements between SP Engineering Services (Hong Kong) Limited (formerly known as Jaytey Engineering Limited) and The Ming An Insurance Company (Hong Kong Limited) in relation to the applicant,
	and all other documents related to the aforesaid applicant.”

4.  Ming An is the insurer under two separate employees’ compensation insurance policies taken out respectively by Geotechnical Engineering Services Limited, which is now known as Hip Shing Contractors Limited (hereinafter called “Geotec”) and Jaytey Engineering Limited which is now known as SP Engineering (Hong Kong) Limited (hereinafter called “Jaytey”).

The application

5.  By a summons dated 8 October, Miss Leung applied to set aside the Subpoena on the ground that the issue of the Subpoena was oppressive and vexatious and an abuse of the process of the court. 

6.  The application is resisted by the 2nd respondent.  The applicant and the 1st respondent take a neutral stance insofar as the application is concerned. 

7.  Given the fact that the trial is due to start before me irrespective of my ruling on the present application, the less I say, the better.

Argument in support of the application

8.  Mr Lam, counsel for Miss Leung, mounts an attack on the Subpoena along the two hurdles identified by Mayo J in Brisilver Investment Limited v Wong Fat Tso, CACV 251/1999, as follows:

(1) that it must be demonstrated that the exercise is not akin to obtaining discovery from a party who is not a party to the litigation; and

(2) that the documents must be relevant and admissible.

9.  In relation to the first hurdle, Mr Lam observes that the documents identified in the Subpoena are described in very vague and general terms.  Even assuming that such documents exist, the mere existence of such documents is not sufficient to justify the issuance of the Subpoena.  He submits that the 2nd respondent has no idea what specific documents may be involved and, more importantly, what the content of such documents is.  The inference to be drawn is that the 2nd respondent is embarking on a speculative exercise against Ming An or Miss Leung who are not a party to these proceedings, hoping that some documents in the insurer’s possession might assist their case.  He submits that the 2nd respondent has treated the Subpoena as if it were a specific discovery application under Order 24, Rule 7 against a party.

10.  In relation to the second hurdle, Mr Lam submits that the identity of the applicant’s employer does not appear to be a live issue in this case.  This is because the applicant is claiming the 1st respondent to be his employer at the time of the accident and which is admitted by the 1st respondent.  Irrespective of who the employer was, the 2nd respondent would be liable as the principal contractor under the Ordinance.

11.  He further observes that the 2nd respondent had applied to join Geotec and Jaytey as respondents in this case.  The application was dismissed by Her Honour Judge Wong on 22 December 2004 (hereinafter called “the Joinder Decision”).  Whilst Mr Lam is not suggesting that the Joinder Decision constitutes res judicata against the 2nd respondent, Mr Lam does not stop there.  He prays in aid the judgment of Andrew Cheung J in Ng Yat Chi v China Resources (Holdings) Company Limited, HCA 424/2005, and submits that this court should act on its own motion to strike out the averment in paragraph 2(i) of the 2nd respondent’s Answer that the applicant was employed by Geotec.  He submits that it is an abuse of process for the 2nd respondent to continue to allege at the trial that either Geotec or Jaytey was the employer when the 2nd respondent has neither appealed against the Joinder Decision nor made a second application to join Geotec and Jaytey in light of the new evidence that the 2nd respondent says has emerged since the Joinder Decision.

Argument in opposition to the application

12.  On the part of Mr Krishnan, the solicitor representing the 2nd respondent, he submits that the 2nd respondent’s case in these proceedings is that:

(1)	the 2nd respondent disputes the fact of the accident, and
(2)	more importantly, the 2nd respondent contends that the applicant was not employed by the 1st respondent at the time of the accident but was an employee of either Geotec or Jaytey.

13.  According to Mr Krishnan, the significance of the 2nd respondent’s contention regarding the identity of the applicant’s employer is that the 1st respondent was not insured at the time of the accident but both Geotec and Jaytey were.  If the 2nd respondent’s contention is correct, Geotec or Jaytey may be deemed to be the applicant’s employer by reason of the definition of “employer” under section 3 of the Ordinance, and the 2nd respondent may then get meaningful indemnity under section 24 of the Ordinance from Geotec or Jaytey through their employees’ compensation insurance with Ming An.

14.  He submits that the issue of the identity of the applicant’s employer has always been a live issue in this case.  The 2nd respondent could not get meaningful discovery on this issue from the applicant.  The 2nd respondent obtained orders for specific discovery against the 1st respondent, Geotec and Jaytey respectively on 28 May.  On 1 August, the 2nd respondent received documents from Geotec in pursuance of the orders for specific discovery which include a letter dated 13 July 2003 from Toplis & Harding (Hong Kong) Limited, the loss adjustors appointed by Ming An (hereinafter called “The Toplis Letter”).  From the Toplis Letter, the 2nd respondent realises the existence of the documents identified in the Subpoena and hence the Subpoena.

15.  Mr Krishnan says that the Subpoena is not oppressive because the documents have been specified with sufficient particularity and the documents involved would only be two slim files at the maximum.  He submits that the request is proportionate to the claim. 

16.  Concerning the Joinder Decision, Mr Krishnan says that the decision was based on affidavit evidence before the judge at the time and has since been overtaken by subsequent discovery.  The 2nd respondent did not bother to appeal against the decision because the amount involved is small. 

17.  In any event, Mr Krishnan submits that the issue of who was the actual or deemed employer of the applicant can still be pursued as a live issue at the trial, notwithstanding the Joinder Decision.  He accepts that the 2nd respondent could have applied for specific discovery against Ming An or Miss Leung before trial, just like the 2nd respondent’s applications concerning Geotec and Jaytey.  However, he says that there is no obligation on the 2nd respondent to do so and he admits that the 2nd respondent has made a conscious decision to request for the documents by way of the Subpoena.

The relevant legal principles

18.  Mr Lam submits that the general principles applicable to the issue of Subpoena duces tecum can be found in the judgment of Nazareth VP of the Court of Appeal in To Kan Chi v Pui Man Yu [1998] 3 HKC 369 at 377G to 379G, which was quoted from the judgment of Yam J in the lower court and supplemented with comments of the Court of Appeal.

19.  In the subsequent case of Brisilver Investment Limited v Wong Fat Tso, CACV 251/1999, the Court of Appeal reaffirmed the correctness of the principles enunciated in To Kan Chi and summarised them as follows:

"	(1)	There shall be no discovery from a non-party to an action [subject to certain exceptions]...;
	(2)	A subpoena should not be used for making discovery only [and the Court of Appeal observed that the reference to the word “only” can be misleading]...;
	(3)	Subpoena should not be used as a fishing exercise for documents nor speculative...; and
	(4)	A subpoena should not be oppressive to the witness when, say, for example, the terms are too wide.  The party issuing the subpoena … has to show that these witnesses are required to produce relevant and admissible evidence for trial and that those documents to be produced must be required and are necessary for the fair disposal of the case..."

20.  Mayo JA noted from these principles that:

“… essentially, two hurdles have to be surmounted for the defendants to establish that they are entitled to Subpoena the documents.  The first is that it must be demonstrated that the exercise is not akin to obtaining discovery from a party who is not a party to the litigation.  The second is that the documents must be relevant and admissible.”

21.  Although Mr Krishnan has submitted in his written submission that the test for specific discovery seems to be more stringent than, if not the same as, that for Subpoena, he does not dispute the general validity of the above legal principles.  He, however, reminds me that the claims in To Kan Chi and Brisilver were not in relation to a claim for personal injuries.  By that, I take him to refer me to the court’s power to order discovery of documents even against a person who is not a party to the proceedings in which a claim for personal injuries is made.  See section 47B of the District Court Ordinance and Order 24, Rule 7A of the Rules of the District Court.  Mr Krishnan submits that the present case, which is in the nature of a claim for personal injuries, is distinguishable from To Kan Chi and Brisilver. 

22.  In my view, the Court of Appeal in setting out the above general principles has already taken into consideration Mr Krishnan’s observation concerning section 47B of the District Court Ordinance and Order 24, Rule 7A of the Rules of the District Court.  Significantly, the Court of Appeal does not propound an absolute rule that there shall be no discovery from a non-party to an action but noted that the general rule should be subject to certain exceptions.

23.  I respectfully adopt the principles enunciated by the Court of Appeal in To Kan Chi andBrisilver, including the elaborations in the judgments for the purpose of the ensuing discussion. 

Discussion

24.  I shall begin the discussion by considering the Subpoena in relation to the first hurdle identified by Mayo J in Brisilver. 

25.  Mr Krishnan has submitted that the 2nd respondent was only informed of the existence of the documents requested under the Subpoena by the Toplis Letter.  He attempts to demonstrate by means of the letter the existence of documents such as correspondence(s), investigation report(s) and interview statement(s).  For the purpose of this application, Mr Lam is prepared to assume that some of these documents exist.

26.  To start with, I note that the scope of the documents requested under the Subpoena is significantly larger than the document, the existence of which may be disclosed in the Toplis Letter. 

27.  It is most important to note from the first paragraph of the Toplis Letter that the loss adjustor was appointed by Ming An to investigate the employees’ compensation claimed under policy No. PECH-00-02297-6 and in relation to the accident on 15 May 2001 only. 

28.  However, by the Subpoena, the 2nd respondent has requested for all correspondences, declarations and statements between Geotec and Ming An; all correspondence between the Labour Department and Ming An; all correspondence, declarations and statements between Jaytey and Ming An; and all other documents in relation to the applicant.  These documents, even if they do exist, may or may not relate to the policy identified in the Toplis Letter or to the accident in question.  More significantly, the documents requested under the Subpoena may or may not relate to the issue of the identity of the applicant’s employer at the time of the accident.

29.  In this connection, Mr Krishnan has conceded that while the 2nd respondent may have some idea as to what information may be derived from the documents identified in the Toplis Letter, he does not have specific knowledge in any detail.  Mr Krishnan then submits that it would be impossible for the 2nd defendant to know precisely what these documents are without seeing them and hence the Subpoena against Miss Leung. 

30.  The more Mr Krishnan explains the purpose of the Subpoena, the more it becomes clear that the argument amounts to little more than speculative assertion that there may be material which would show that the applicant was employed by either Jaytey or Geotec.  This process of extracting relevant evidence by means of the Subpoena has all the hallmark characteristics of obtaining discovery from Ming An or Miss Leung.  In my view, this amounts to an attempt to fish for relevant evidence on the part of the 2nd respondent.

31.  In this regard, I am guided by the following observation of Sir Donald Nicholas, VC in Panayiotou v Sony Music Limited [1994] Ch 142 at 151,  which has been quoted in To Kan Chi:

“...it is established that a Subpoena to produce documents cannot be drawn so widely as to amount to requiring the witness to give discovery.  The object of the Subpoena is to compel the witness to produce evidence directly material to the issue in the case.  The object is not to require him to produce documents just because they may be useful for the purpose of corroborating or challenging a witness or because they may lead to a chain of inquiry which may result in the discovery of evidence or may, in some other way, advance one party’s case or damage the other’s.  Nor is the witness to be required to undertake an unfairly burdensome search through his records to find this or that document or to see if he has any documents relating to a particular subject matter...”

32.  In my view, the fallacy in the 2nd respondent’s argument is in its failure to appreciate the difference between an application for specific discovery (even against a non-party in the proceedings involving a claim for personal injuries) and the use of Subpoena duces tecum. 

33.  Mr Krishnan admits that the 2nd respondent has been provided with Toplis Letter as early as 1 August 2005.  The 2nd respondent has made a conscious decision not to apply for specific discovery against Ming An or Miss Leung under Order 24, Rule 7A.  Instead, the 2nd respondent has elected to seek discovery by means of the Subpoena. But the 2nd defendant has failed to appreciate that the threshold for the issue of the Subpoena duces tecum is in fact more stringent than for an application for specific discovery.

34.  Given the present description of documents in the Subpoena, I also accept Mr Lam’s submission that Miss Leung will have difficulty knowing what documents to bring to court.  Mr Krishnan’s submission that there could at most be two slim files for Miss Leung to go over is pure speculation. 

35.  In this regard, I can do no better than to recite the observation of Godfrey J in Overseas Trust Bank Limited v Coopers and Lybrand (a firm), HCA 5764/1986:

“In a subpoena duces tecum, the description of the document required to be produced must be sufficiently specific to enable the addressee to put his hand on the documents or the file without having to consider for himself what documents he needs to produce and what documents he does not need to produce.”

36.  I now turn to the second hurdle.  The question of relevance and admissibility must be judged by reference to the pleadings in this case. 

37.  In paragraph 1 of the Amended Application, the applicant pleads that the 1st respondent was his employer and the 2nd respondent was the principal contractor.  Although the 1st respondent denies that the 1st respondent was the employer in paragraph 1 of its Answer, the 1st respondent has indicated in an open letter by its former solicitors and confirms at the hearing before me that it accepts that the applicant was its employee. 

38.  In paragraph 2(i) of the 2nd respondent’s Answer, the 2nd respondent avers that the applicant was employed by Geotec.  Significantly, it is noted that it is not the 2nd respondent’s pleaded case that the applicant was an employee of Jaytey. 

39.  In the premises, even if those “correspondences, declarations and statements between [Jaytey] and [Ming An] in relation to the applicant” exist and are evidence of the applicant’s being employed by Jaytey, they are not evidence relevant and admissible to the issues in this case as disclosed in the pleadings. 

40.  The specific discovery orders made by Her Honour Judge Chan on 28 May will not take the 2nd respondent’s case further.  First, neither Ming An nor Miss Leung was a party to that application and they are not bound by the orders.  Secondly, Mr Krishnan has in fact conceded that the scope of the documents requested under the Subpoena is beyond the scope of the orders.  Thirdly, the 1st respondent, Geotec, and Jaytey were all absent and the application was not argued.  And lastly, the test applied by the learned Judge is different from that to be applied here.

41.  Before I leave the second hurdle, I should also briefly deal with the effect of the Joinder Decision. 

42.  It is common ground amongst all parties that since the Joinder Decision is a decision on an interlocutory application, it does not in law give rise to res judicata or issue of estoppel. 

43.  In a Joinder Decision, Her Honour Judge Wong dismissed the 2nd respondent’s application to join Geotec and Jaytey as respondents.  The basis of the learned judge’s decision appears in paragraphs 23 to 24 of her decision.

44.  It is important to read the Joinder Decision in its proper context.  The learned judge considered the application on the basis of the affidavit evidence then before her.  Most significantly, she was careful not to make any finding on whether Geotec or Jaytey was the employer of the applicant. 

45.  Can the 2nd respondent still invite the court to find at the trial that Geotec or Jaytey was the employer given the Joinder Decision?  I guess a short answer to the question must be yes given the fact that there is no res judicata unless the court is prepared to go down the avenue suggested by Mr Lam.

46.  For the time being, I feel inhibited, without hearing the evidence, to go into the merits of the 2nd respondent’s case as to whether Geotec or Jaytey was the employer.  Suffice it to say that what Mr Lam suggests me to do is most draconian.  Having reflected on all the circumstances of this case and notwithstanding Mr Lam’s most able submission, I am not persuaded that I should exercise the discretion to strike out the averment in the 2nd respondent’s Answer out of my own motion.  Having said that, no doubt Mr Munro will pick up this matter again at the trial when he submits on the evidence. 

Conclusion

47.  For the above reasons, I accept that the issuance of the Subpoena is oppressive and vexatious.  I allow Miss Leung’s application and set aside the Subpoena issued against her.

(Court discussion re costs)

48.  For the reasons advanced by Mr Lam, I agree that the 2nd respondent should bear Miss Leung’s costs on an indemnity basis.  I have already found that the issuance of the Subpoena is oppressive and vexatious and it would be unfair to ask Miss Leung (who is not a party) to bear any portion of her costs of the application.  So I order Miss Leung’s costs of the application be borne by the 2nd respondent and payable forthwith on indemnity basis, to be taxed if not agreed, and with certificate of counsel.

49.  Regarding the applicant’s costs, the applicant is a party to the present application and will have to be here by reason of the trial.  I order the applicant’s costs of the application be paid by the 2nd respondent in any event, to be taxed if not agreed. 

50.  Regarding the 1st respondent’s costs, although Mr de Souza has been served with a Subpoena, that is served on him in a different capacity.  I order that the 1st respondent’s costs of the application be paid by the 2nd respondent in any event, to be taxed if not agreed.

(Further court discussion re costs)

51.  Without clear evidence as to the fault of causing the adjournment of the trial, a fair costs order would be costs of and occasioned by the adjournment be costs in the cause and I so order.