THE ATTORNEY GENERAL v. TIN SHUI WAI DEVELOPMENT LIMITED AND OTHERS

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. By an High Court action No. 5 of 1987 on the Construction List, ("the main action"), the 1st defendant ("TSW") seeks very substantial damages from the Crown by reason of an alleged breach of the terms of an agreement between the Crown and TSW dated the 29th day of July 1982 under which the parties were to reclaim a very large area of land to the North-west of Yuen Long, the Tin Shui Wai, and to then develop what was originally planned to be a major satellite town. One of the terms of the agreement was that the Crown would take certain steps to fulfill its obligations thereunder within a reasonable time.

2. The scheme has been delayed and it is the case for the plaintiffs that there was no reasonable cause for such delay and they have suffered loss for which they claim.

3. The trial of the main action is to be before Sears, J. the Judge in charge of the Construction List but will not take place until late this year or in 1989.

4. An order for discovery of each party's documents was made in the main action and so far as the Crown was concerned, this involved many thousands of such documents contained in numerous files.

5. Messrs. Johnson Stokes and Master ('J.S.M.') were engaged by the Crown to act as its solicitors in the matter and the documents were held by them in a board room from where some ten files at a time were taken to an interview room where they were made available for inspection by members of the 5th defendant, also a firm of solicitors, who were acting for TSW in the main action. These documents were contained in a list of documents which had been supplied to TSW on the 16th of December 1987. A second list was supplied a few days ago.

6. There are a large number of documents in both lists for which the Crown claims privilege either on the ground that it would be contrary to the public interest to disclose their contents or that they contain legal advice for which professional privilege can be claimed. In respect of the former a certificate from the Chief Secretary is required and this has been executed in respect of each list. Privilege is claimed for some documents only under public interest, some only for professional privilege and a few come within both categories.

7. Inspection of the documents by the 5th defendant began on the 4th of January 1988 and continued on the 5th, 6th and 7th. However on the 6th January an assistant solicitor employed by JSM, Mrs. J.A. Adams, found that apparently a file containing what were claimed to be privileged documents was missing from the board room ("the missing file") and when it could not be found a search was made. On the late afternoon of the 7th January the file was found in the interview room, the representatives of the 5th defendant having left. It is not in dispute that JSM did not intend that the file be made available to the 5th defendant nor is it in dispute that in fact they did see it and have taken copies of the documents in it. On the following day the senior partner of the 5th defendant telephoned Mr. R.S. Peard, a consultant with JSM and, as a matter of courtesy, told him that they had seen the file and had made such copies.

8. JSM then sought an undertaking from the 5th defendant that no use would be made of the copies of the documents from the missing file. That undertaking was not received and accordingly this action was commenced by a separate writ seeking an injunction restraining the defendants from using or disclosing the contents of the missing file. That claim is listed before me on the 17th of March. It is the case for the Crown that the documents were clearly privileged, were made available by mistake and that the representatives of the 5th defendant must have realised such was the case. They rely on a line of authorities culminating in English and American Ins. Co. Ltd. v Herbert Smith and Co.⁽¹⁾ which followed Goddard v Nationwide Building Society ⁽²⁾. The position following those decisions is that if a privileged document has come into the possession of the other party, no matter how that has happened, the person in whom the privilege lies is entitled to an order for delivery up of possession unless the document has already been tendered in evidence. It is a principle founded on practicalities and as Mr. Machin, leading counsel for the defendants, has said has occupied a deal of time in the recent wide-spread litigation over the book 'Spycatcher'.

9. The statement of claim in this action has amended since the issue of the two summonses which are now before me and an affidavit sworn by Mr Jeremy Mathews, the Crown Solicitor, has been filed in support. The amended statement of claim sets out in detail the exact circumstances under which the Crown says the defendants came to have sight of the missing file and of the grounds on which it seeks recovery of copies made of those documents and for an order preventing the defendants making use of them.

10. The two summonses before me are virtually identical, one being directed to the 1st, 2nd, 3rd and 5th defendants, the other to the 4th defendant who is the project manager of the 1st defendant. They sought an order to strike out the amended statement of claim on various grounds but Mr. Machin relies only on ground (d) in each case, i.e. that the claim is an abuse of the process of this Court. He suggests that as Sears J. will be hearing an application in the main hearing that the Chief Secretary's certificate should he discharged, he should also deal with the claim in this action and I should adjourn the matter to be heard before him and vacate the hearing before me on the 17th March. There is also an application in the main action for interim payment by the Crown on the basis that the documents in the missing file show that there is no defence to the claim founded on unreasonable delay. That should also be heard at the same time and by the same Judge. Mr. Machin also undertook that at the hearing of the claim on the 17th March it would not be part of the defendant's case that the documents on the missing file were now in evidence and it was too late to retrieve them. It would, however, be strongly argued that the Crown is seeking an equitable remedy and must come to the Court with clean hands. This it can't do as the documents show clearly that it has been guilty of deliberate delay in carrying out the terms of the 1982 contract and its defence to the main claim is false and dishonest. He relies in particular on a memo from a Senior Crown Counsel in the Attorney General's Chambers which Mr. Machin says shows that the Crown has clearly deliberately delayed carrying out its bargain. If the documents are made available they will show that the claim that reasonable efforts have been made to carry out the contract cannot be supported. The interests of justice overrides other considerations such as public security and the court must not let its processes be abused in this way.

11. The reasons why it is suggested that Sears J. hear this claim are that:-

12. In reply to the Crown's submission that I had no jurisdiction to hear the summons it was the defendants case that the summonses are issued pursuant to Order 18 rule 19 but also in the inherent jurisdiction of the court to regulate its procedure in the interest of Justice.

13. For the Crown Mr. Barma says that this is a separate issue from the main claim and should be separately decided by a different Judge. Many of the documents in the missing file are privileged as containing legal advice and in particular that applies to Crown Counsel's memo. He concedes that at the hearing the defendants will be able to raise the "dirty hands" argument but he relies on the dicta of Nourse L.J. in Goddard at P. 745 that once it is established that the facts bring the claim within the principles of Lord Ashburton v Pape⁽³⁾ the Court has no discretion but to grant the equitable relief sought. Here the 5th defendant must have been aware that the missing file did contain privileged information when they examined it and must have been aware that a mistake had been made in letting them see it. He argues that it is essential that this claim be heard and decided before the main claim and that this is a different matter to that to be considered in the challenge to be made in the main action against the Chief Secretary's certificate. It is also argued that if the Crown's case that the documents on the missing file are privileged and under the circumstances of them being disclosed by mistake, no use can be made of them. If that argument succeeds it would be wrong for the trial Judge to have ever seen them.

14. There are arguments on both sides but on balance I consider that this claim should be heard by the same judge who is to deal with the challenge to the Chief Secretary's certificate. He will be familiar with the background of the matter and I do not consider that, in the light of the inadvertant disclosure of the papers in the missing file, the challenge to the Chief Secretary's certificate is totally separate to the claim for professional legal privilege. I think there will be a considerable saving in time if both matters are dealt with together. The summonses are dismissed and the hearing date of 17th March is vacated on the undertaking that the defendants will seek to have the claim heard by Sears J. at the same time as the summonses on discovery of the "public interest" documents.

15. There will be no order as to costs. If required the Plaintiff will have leave to appeal.

(1)    [1987] NLJ 148

(2)    [1986] 3 WLR 734

(3)    [1913] 2 Ch. 469