OLDHAM LI & NIE (A SOLICITORS FIRM) v. ROBERT WILLIAM HONG SAN YUNG

DCCJ 1202/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1202 OF 2005

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DECISION

Background

1. In this matter the Plaintiff (“P”) claims from the Defendant (“D”) professional fees, and D seeks orders for Discovery (1st & 2nd summonses) and to amend the 2nd Summons (by his 3rd Summons).  The 3rd Summons was not opposed and I make an order in terms.  Accordingly in this Decision I only need to discuss the first two summonses.

The 1st Summons

2. In this Summons D seeks discovery of documents relating to the sale of a Mercedes Benz car which, it is not disputed, was given by D to P in payment of his debt.  The car was subsequently sold, from which transaction P has received moneys, but the amount is in dispute, because P says it has only received $120,000 while D believes the car was worth at least $230,000.  D therefore seeks discovery of documents evidencing P’s benefit.  P says there are no such documents as P has never been the owner, the car having been sold via a middleman Mr LI to the buyer, and the net proceeds were received in cash.

3. As the car was sold in order to satisfy at least part of the relevant debt which was moneys owed by a client to a solicitors firm, and P agrees (via Mr Oldham) it has received $120,000, in the normal course of events the moneys whether in cash or by cheque must have been deposited into the solicitors trust account.  I find on the balance of probabilities that there must be at least a banking record and an entry in the trust account ledgers to show how much the net proceeds to P actually were, even though a part of the sale price itself might have gone to a middleman.  The amount so disclosed is directly relevant to the debt now being claimed for, and so these documents are relevant.  Accordingly I make an order for discovery under this Summons.

The 2nd Summons

4. D seeks an order for discovery of 4 documents:

(a)	The Assignment document: This was about a debt allegedly owed by Hong Kong Post to One Studio (D’s company) so that if the Assignment had been of value, and if Hong Kong Post had paid money to P, One Studio’s debt to P would be reduced. On this basis the documents, if in existence, are relevant. P says it does not have the document. As it is privy only to One Studio and Hong Kong Post, all external to P, if anybody should have possession of such a document, One Studio and D (being its director) would be such persons. Even if such a document exists, for the above reasons I am not surprised that P says it simply does not possess the same. Further, even if a written Assignment exists, it does not prove that Hong Kong Post had paid P any money. Indeed the papers show that Hong Kong Post disputed liability to One Studio. But even if Hong Kong Post acknowledges a debt owed to One Studio, and the Assignment is tendered to court at trial, the court cannot say on the strength of the Assignment that P’s claim has been reduced. Accordingly I am unable to see any relevance of the Assignment to the issue of debt now claimed, and whether any repayment has actually been made. For the above reasons the application must be refused.
(b)	The Outstanding invoice issued by One Studio to Hong Kong Post: Again P says it does not have such a document. For the same reasons as under subparagraph “(a)” above the application is also refused.
(c)	The Payment documents: D bases this application on the strength of a ledger printout found in Bundle C page 37, purporting to show that in respect of an Invoice No.812/99 One Studio had paid $21,047.85, but this is only One Studio’s ledger, not P’s ledger. If it was the other way round D would have strong grounds to say P must have the original documents relating to this entry, but this is not the situation here. The other payment document sought to be discovered is based on the strength of Bundle C page 29 to the effect that a cheque of $27,000 had been paid over, being again only D’s unilateral assertion. P says it has searched its records and found no document or record to show that these two alleged payments have been made (see Bundle B page 20 at paragraphs 8 and 9). I find it incredible that D, a mature person in commercial business dealing with customers himself, if he had truly paid a creditor large sums of money, that he could have kept no record himself, no receipt, no copy of cheques or cheque butts, or if drawn on a bank draft then a photocopy of the draft, or at least a withdrawal slip from his bank for the purpose of buying the draft. Indeed D has made enquiries with his own bank (DBS Bank), but the Bank replied that D’s particulars were too vague for the Bank to make any search. I agree with the Bank. Furthermore, P being a solicitors firm, I do not accept that moneys could have by-passed the stringent requirements of its trust account, with payments leaving no trace. In the circumstances I cannot see how I can order P to make discovery of documents particulars of which are completely vague. Accordingly the application must be refused.
(d)	Plaintiff’s letter to One Studio on the balance of moneys owed: D bases this application on the strength of Bundle B page 14 at paragraph 25. Again this is a mere assertion by D. P says there is no such letter: see Bundle B page 22 at paragraph 14. If such a letter existed, I would expect One Studio (and/or D as its director) must have the same, because on any view this is an all-important document. D says the letter may have been addressed to his or One Studio’s accountants. If so I would expect D to be able to locate it from his own accountants. This is an alleged document P says it does not have, but which if what D says is true then D himself or his agents should have. In the circumstances I find it unreasonable to make an order for discovery, and the application must be refused.

Costs

5. D has succeeded in the 1st and the 3rd Summonses, but failed in the 2nd Summons.  I find the substance of the 2nd Summons to be approximately half of the volume of work involved in the 3 summonses, including their preparation and arguments in court.  Accordingly I make no order as to costs regarding any of the 3 Summonses.  In other words each side bears its own costs.