SO Chun Man Paul and Another v. The Incorporated Owners of Chee On Building

LDBM 43/1999

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. LDBM 43 of 1999

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D E C I S I O N

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1. The Applicants' application is for the following orders : -

1. The Respondent do afford the Applicants or their agents an opportunity to examine the documents set out in Schedule I annexed to the affidavit in support of the application, and to take copies thereof (pursuant to s.10 (2)(b)(ii) (Cap. 17) and/or O.24 r. 10(1) RHC) ("The first application");

2. The Respondent do permit the Applicants and/or their agents to inspect the documents set out in Schedule II annexed to the aforesaid affidavit (pursuant to s. 10 (1) (Cap.17) and O. 24 r. 11(2) RHC)("The second application"); and/or

3. The Respondent do make affirmation(s) stating whether:

(1) any of the documents set out in Schedule II, are or have at any time been, in the Respondent's possession custody or power; and

(2) if not then in the Respondent's possession custody or power :

(a) when the Respondent parted with them; and

(b) what have become of them.

(pursuant to S. 10(1) (Cap. 17) and O. 24 r. 7(1) RHC)("The third application")

The first application

2. In support this application, the Applicants rely on section 10(2)(b)(ii) of the Lands Tribunal Ordinance. Section 10(2) reads : -

"(2) Without prejudice to the generality of the powers vested in it under subsection (1), the Tribunal may -

(a) on the application of any party to any proceedings before it , or of its own motion, order any party to the proceedings to disclose to the Tribunal the existence of any document which is in the power of such party to produce and which the Tribunal considers is or may be material to the determination of the matter being heard by the Tribunal;

(b) order any party to any proceedings before it -

(i) to produce to the Tribunal any document which it may require and which is in the power of such party to produce; and

(ii) to afford to any other party to the proceedings an opportunity to examine any such document or copy thereof and to take copies thereof;"

(Underlines provided)

3. At the commencement of the hearing of the application, the Applicants' Counsel, Mr. Maurice Chan, applied to this Tribunal that this application should also be heard under section 10(2)(a). I allowed his application. The documents required by the Applicants are those set out in Schedule I. The Applicants alleged that these documents are material to the determination of the disputes between the parties. But these disputes will only be heard some time in the future. These documents are not material to the determination of the matter being heard by the Tribunal, which is the present application. Further, the order, if made, will be an order for disclosure of documents to the Tribunal. The Applicants have not applied for such an order, and no order will be made in this regard. There is no basis for ordering the Respondent to disclose any document to the Tribunal for the time being. Therefore section 10(2)(a) does not apply in this application.

4. Section 10(2)(b)(ii) must be invoked together with (b)(i), because "such document" is the document referred to in (b)(i). It is only when the Tribunal imposes an order under (b)(i), then it may also impose an order under (b)(ii). If no order is made under (b)(i), then no order can be made under (b)(ii).

5. The phrase "on the application of any party to any proceedings before it" under section 10(2)(a) empowers any party to the proceedings before the Tribunal to make an application to the Tribunal for an order under subsection (2)(a). But such a phrase is absent in subsection (2)(b). This clearly reflects the intention of the Legislature that subsection (2)(b) is not to be invoked by the parties. One of the conditions to be met before the Tribunal makes an order for production of a document under subsection (2)(b)(i) is that the document may be required by the Tribunal. Whether the Tribunal requires a document or not is a matter to be decided solely by the Tribunal itself. It is not for the parties to the proceedings to perform the role of the Tribunal by acting in its place and deciding for the Tribunal what or which document it may require. For the time being, the Tribunal does not require any document to be produced to it. No order is required to be made under subsection (2)(b)(i) and (ii). Accordingly subsection (2)(b)(ii) is inapplicable in this application.

O. 24 r 10(1) RHC

6. In support of the first application, the Applicants also rely on Order 24 Rule 10(1) of the Rules of High Court ("RHC") which provides as follows : -

"(1) Any party to a cause or matter shall be entitled at any time to serve a notice on any other party in whose pleadings, affidavits or witness statements served under Order 38, rule 2A, or experts' reports, reference is made to any document requiring him to produce that document for the inspection of the party giving the notice and to permit him to take copies thereof."

(Underlines provided)

7. According to O. 24 r. 11(1), if a party who is served with a notice under rule 10(1) objects to produce any document for inspection, then the Court may, on the application of the party entitled to inspection, make an order for production of the document(s) in question for inspection.

8. In order to succeed in its application, the Applicants must show that they have served the requisite notice on the Respondent, and that in the Respondent's pleading reference is made to the documents they applied for.

Reference to document in pleading

9. The documents set out in paragraph 1 and paragraph 5(1) of the Schedule I are referred to in the Notice of Opposition.

10. Paragraph 4(1) of Schedule I states " The Respondent's invitation to tender for the Works (in purported compliance with the Code of Practice, G. N. 1873 of 1993)." Paragraph 7(a) of the Notice of Opposition only refers to the Code of Practice without making reference to any Gazette Notice or Year. Likewise, the Notice of Application only refers to the Code of Practice without reference to any Gazettee Notice or Year.

11. Paragraph 7(b)(i) of the Notice of Opposition states "The Respondent issued more than 5 invitations for tender to the contractors interested in the renovation work of the Building". But paragraph 4(1) only refers to "invitation to tender". Paragraph 4(1) document is therefore not the documents referred to in paragraph 7(b)(i).

12. Paragraph 4(4) of Schedule I refers to "5 or more tenders for the Works (in purported compliance with paragraph 4(b) of the aforesaid Code)". Paragraph 7(b)(ii) of the Notice of Opposition states " the Respondent received more than 5 tenders from various contractors", without referring to the Code of Practice. It is not clear if paragraph 4(4) documents are the documents referred to in paragraph 7(b)(ii)

13. Mr. Maurice Chan submitted that the documents set out in paragraph 2(1) referred to in Schedule I are expressly referred to in the "pleadings". Therefore they fall within the cope of O. 24 r. 10(1). Paragraph 2(1) documents are "Notice of a general meeting of the Respondent to be held on 16.6.1997 and/or all documents evidencing the proposed resolution(s) to be passed at the aforesaid general meeting". Paragraph 3 of the Notice of Opposition states : -

" Save it is admitted that resolutions were validly passed on 16th June 1997 in an Extraordinary General Meeting of the owners of the Building ("the Extraordinary General Meeting") in relating to certain renovation and repair works of the Building, paragraph 4 thereof is not admitted and the Applicants are put to strict proof thereof."

No reference is made in this paragraph to any notice of meeting or documents containing the proposed resolutions to be passed at the meeting.

14. All the documents set out in the 5 paragraphs of Schedule I, save and except those set out in paragraph 1 and paragraph 5(1) (and possibly paragraph 4(4)), were not referred to in the Notice of Opposition.

The notice required under O. 24 r. 10(1)

15. The only notice sent by the Applicants to the Respondent requesting the latter to produce documents for their inspection is the letter dated 4th May, 2000, in which the Applicants set out all the particulars of documents concerned. The first group of documents they intended to inspect pursuant to paragraph 9 of the Code of Practice on Procurement of Supplies of Goods and Services are : -

"all tender documents, copies of contract, amounts and invoices and any other documents in the possession of the Corporation and relating to the procurement of supplies, goods and services kept by the Corporation within the last 6 years (i.e., from 1994 onwards)"

16. The second group of documents mentioned in his letter which they intended to inspect are substantially those listed out under Schedule II.

17. The first group of documents are similar to the documents referred to in paragraph 4(8) of Schedule I. But the Applicants did not ask for the documents for 6 years. The first group of documents are set out as follows : -

"(8) All tender documents, and copies of all:

(a) contracts;

(b) accounts;

(c) invoices; and

(d) any other documents

in the possession of the Respondent and relating to the procurement of supplies goods and services for the Works (in purported compliance with paragraph 9 of the Code);"

18. In the letter aforesaid the Applicants did not refer to the Notice of Opposition. In their letters to the Respondent, they never indicated that they would rely on O. 24 r. 10(1). It is abundantly clear that they never intended to use the letter dated 4th May, 2000 as a notice required to be served under O. 24 r. 10(1).

19. I find that the Applicants have not sent the requisite notice under O. 24 r. 10(1) to the Respondent requiring the latter to produce the documents set out in these 5 paragraphs for inspection. The Applicants have failed to satisfy the requirements imposed by O. 24 r. 10.

The second application

20. The application is made pursuant to section 10(1) (Cap. 17) and O. 24 r. 11(2) Rules of the High Court. These enabling sections are clearly referred to in the summons itself and in the affirmation of Mr. Fung, the Applicants' solicitor. Paragraph 2 of the Summons is as follows : -

"2. The Respondent do permit the Applicants and/or their agents, to inspect the documents set out in Schedule II annexed hereto (pursuant to s. 10(1)(Cap. 17) and O. 24 r. 11(2) R H C) and/or"

(Underline provided)

21. This is identical in wording to paragraph (2) of Mr. Fung's affirmation.

22. In paragraph 12 of his written submission, Mr. Maurice Chan wrote : -

"In support of Schedule II items, the summons cites the following enabling provisions : -

(1) O. 24 r. 10(1) (discovery of pleaded documents);

(2) O. 24 r. 11(2) (production of documents for inspection)."

That simply is not correct. The summons and Mr. Fung's affirmation do not refer to O. 24 r. 10(1) at all. Instead they only refer to s. 10(1) (Cap.17) and O. 24 r. 11(2) RHC. The Applicants only applied for an order for inspection; they did not apply for an order of discovery.

23. Section 10(1) of the Lands Tribunal Ordinance (Cap. 17) empowers the Tribunal to follow the practice and procedure of the Court of First Instance in the exercise of its civil jurisdiction. Therefore the Applicants can invoke O. 24 r. 11(2) which reads : -

"Without prejudice to paragraph (1), but subject to rule 13(1), the Court may, on the application of any party to a cause or matter, order any other party to permit the party applying to inspect any documents in the possession, custody, or power of that other party relating to any matter in question in the cause or matter."

24. O. 24 r. 11(3) provides : -

"An application for an order under paragraph (2) must be supported by an affidavit specifying or describing the documents of which inspection is sought and stating the belief of the deponent that they are in the possession, custody or power of the other party and that they relate to a matter in question in the cause or matter."

25. O. 24 r. 13(1) provides : -

"No order for the production of any documents for inspection or to the Court or for the supply of a copy of any document shall be made under any of the foregoing rules unless the Court is of opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs."

26. Page 479 of Volume I of The Supreme Court Practice 1999 states that under Rule 13, "it is for the party applying for the order for production to satisfy the court that the order for production and inspection is necessary either for disposing fairly of the cause or matter, or for saving costs (Dolling- Baker v. Merrett [1991] 2 All E. R. 890, C A). It is not enough for the applicant to show that the documents are relevant; he must also show that their production and inspection is necessary for one or more of the purposes mentioned in the rule ...... ." (Underlines added)

27. Under Paragraph 4(1) of the affirmation Mr. Fung set out 8 "disputes" (item (a) to (h)), and for each item, he referred to one or more documents set out in Schedule II which he alleged to be material to that item of dispute. Mr. Fung did not refer item 16 in Schedule II to any item of dispute. Although Mr. Fung said that he verily believed that the 17 items of documents set out under Schedule II are material to the issues referred to in Schedule III as annexed to his affirmation, which allegedly shows some of the issues in this case, he did not show which document(s) are related to which issue(s) set out in Schedule III, and how they are material to those issues.

28. During the hearing, Mr. Maurice Chan informed this Tribunal that they no longer required documents items 1, 2, 3 and 9.

29. Upon persuing the contents of Dispute 4(1)(a) to Dispute 4(1)(c) as set out in the affirmation, to which items 1 to 8 are related, I fail to see how these 8 items of documents are material to the cause or matter in this case, because Disputes 4(1)(a) to Dispute 4(1)(c) are not causes or matters in this case. Items 9 to 17 appear not to be directly related to the issues in this case.

30. When citing O. 24 r. 11(2) Mr. Maurice Chan left out the most important phrase in the rule, namely "Without prejudice to paragraph (1) but subject to rule 13(1)". He submitted that items 11 to 17 in Schedule II are related to the matters in question in the proceedings within the scope of the case of Compagnie Financiere du Pacifique v Peruvian Guano (1882) 11QBD55. In paragraph 7 of his submission, when making submission for the application for Schedule I items under s.10(2)(b)(ii) Cap. 17 and O. 24 r. 10(1) (discovery of pleaded documents), he made the following statement : -

'7. The classic formulation of the test as to relevance for discovery is that of Brett L J in Compagnie Financiere du Pacifique v Peruvian Guano Co. (1882) 11QBD55 at 63:

"It seems to me that every document relates to the matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may - not which must - either directly on indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary ... if it is a document which may fairly lead him to a train of enquiry, which may have either of these 2 consequences."

the Peruvian test has been applied and approved on many occasions and is regarded as the principal test as to relevance."

31. Mr. Maurice Chan applied the test as to relevance for discovery of documents in the Peruvian Guano case, under O. 24 r. 10(1). But as pointed out before, the summons and Mr. Fung's affirmation do not refer to O. 24 r. 10(1). They also do not refer to the discovery of documents. Therefore Mr. Maurice Chan's submission in this regarded is misconceived.

32. In any event neither Mr. Fung nor Mr. Maurice Chan addressed their mind to the requirements laid down in rule 13(1). They fail to show that the order the Applicants applied for is necessary either for disposing fairly of the cause or matter or for saving costs.

33. The summons was heard on 3rd January 2001 and 15th February 2001. On 12th February 2001, the Applicants filed in an amended Notice of Application. The amendment is a substantial amendment which contains a number of issues. But there is no affidavit made pursuant to O. 24 r. 11(3) stating the belief of the deponent that they relate to a matter in question in the cause or matter as contained in the amended portions of the Notice of Application. Therefore O. 24 r. 11(3) has not been complied with.

34. On 3rd January 2001, Mr. Maurice Chan and Mr. Chan, solicitor for the Respondent, reached an agreement that the Respondent do permit the Applicants to inspect and to make photocopies of items 1, 2(1), 2(2), 3(1), 3(2), 5(1), 5(2) under Schedule I, and items 11 to 17 under Schedule II. I made an order in terms of their agreement. I am satisfied that the Respondent did not concede liability on their part in reaching the agreement.

The third application

35. This application involving Schedule II documents is made pursuant to O. 24 r. 7(1) RHC. Rule 7 provides : -

"7 - (1) Subject to rule 8, the Court may at any time, on the application of any party to a cause or matter, make an order requiring any other party to make an affidavit stating whether any document specified or described in the application or any class of document so specified or described is, or has at any time been, in his possession, custody or power, and if not then in his possession, custody or power when he parted with it and what has become of it.

(2) .......

(3) An application for an order under this rule must be supported by an affidavit stating the belief of the deponent that the party from whom discovery is sought under this rule has, or at same time had, in his possession, custody or power of the document, or class of documents, specified or described in the application and that it relates to one or more of the matters in the cause or matter."

(Emphasis added)

36. Rule 8 provides : -

"On the hearing of an application for an order under rule 3, 7, or 7A the Court, if satisfied that discovery is not necessary, or not necessary at that stage of the cause or matter, may dismiss or, as the case may be, adjourn the application and shall in any case refuse to make such an order if and so far as it is of opinion that discovery is not necessary either for disposing fairly of the cause or matter or for saving costs."

37. In his affirmation, Mr. Fung stated that in the event that the Respondent's solicitors have wrongly supposed that the Respondent has the Requested Documents in its possession, custody or power, he verily believed that there was genuine merit in ordering the Respondent to make the requested affidavit. The correspondence between the Applicants and the Respondent clearly shows that the Respondent never denied that it has the requested documents in its custody. Thus there is no basis for this application to be made.

38. The documents set out in Schedule II are not documents necessary for the determination of the issues set out in the Notice of Application. The Respondent has not yet responded to the amended Notice of Application. Until the Respondent has responded to the Amended Notice of Application, so that the new issues (if any) can be identified discovery of the document(s) set out in Schedule II are not necessary at this stage.

39. For the reasons set out above, subject to the order made by consent, I dismiss the three applications.

Costs

40. I make an order nisi in favour of the Respondent, to be made absolute in 14 days' time, to be taxed if not agreed.