PACIFIC LINK COMMUNICATIONS LIMITED v. MELVYN WONG MAN HIM & OTHERS

IN THE COURT OF APPEAL

1994, No. 189
(Civil)

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J U D G M E N T

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Mortimer JA :

This is the plaintiffs' appeal against the decision of Mayo J on 4 October 1994 dismissing its application by summons of 20 July 1994 under O.24 r.10 for production for inspection of a document known as the 'Shun Tak Document'.

The facts

1. The 1st defendant was until 27 February 1992 the general manager of the plaintiff, a licensed operator of a public mobile telephone system in Hong Kong. He is now employed by a competitor. The plaintiff's claim is that when still employed, he misused the plaintiff's confidential information and trade secrets and was in breach of his contract of employment by infidelity for assisting a competitor who later became his employer. That he denies in his defence and counterclaims for wrongful dismissal.

2. When the 1st defendant was summarily dismissed on 27 February 1992, Mr Morrison, who is a partner in the solicitor's firm acting for the plaintiff employer, was in attendance with the president of the company. When the 1st defendant was told to collect his personal effects and leave at once, he took a number of documents - including the one which is the subject of this appeal - and put them in his pocket.

3. According to the 1st defendant, those documents were private papers and the 'Shun Tak Document' related to a private project which he was doing for a consortium. He would not allow Mr Morrison to take a photocopy of the document but he allowed a hand-written copy of part of it. That hand-written copy, which is before us, is headed 'Shun Tak Holdings Ltd - G.S. and Project Forecasts Summary'. Missing from the hand-written copy in the possession of the plaintiffs are figures set out in a table form on the original document.

4. The plaintiff says that this document is relevant to these proceedings and ought to be produced for its inspection because it is relevant to an application by the 1st defendant's new employers - or persons associated with them - for the 4th cellular telephone licence, applications for which were invited in April 1992, shortly after the 1st defendant's dismissal.

The history of discovery

5. The history of discovery, very briefly, is this. On 1 June 1993 the 1st defendant made discovery by list. He made a supplemental list on 13 October 1993. No reference to the document appeared in either list. But on 13 January 1994, the plaintiff applied for specific discovery of the document. On 21 March the 1st defendant made his first affirmation dealing with the document. It suffices to say that as an affirmation dealing with specific discovery of the document, it is wholly inadequate.

6. On 4 May 1994 the plaintiff obtained an order for specific discovery. On 8 June the 1st defendant made a further affirmation. As to the 'Shun Tak Document' he said simply this:

"The Shun Tak Document is a document shown to me by my friend for my comment and has shortly after 27th February 1992 been returned to my friend. However, a copy of this document was shown to my solicitors before it was returned and a copy of it is in their possession."

Consequent upon that, on 4 June 1994, the plaintiff served a notice to produce the document under O.24 r.10. That rule reads simply:

"1. Any party to a course or matter shall be entitled at any time to serve a notice on any other party in whose pleadings, affidavits or witness statements, 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.

2. The party on whom a notice is served under paragraph 1 must within 4 days of the service of the notice serve on the party giving a notice, a notice stating a time within 7 days after the notice thereof, at which the documents or such of them as he does not object to produce may be inspected at a date specified in the notice and stating which if any of the documents he objects to produce and on what grounds."

On 9 July 1994, under O.24 r.10(2), objection was taken. The notice simply states that the document is irrelevant to the matters in question in the present action.

7. The plaintiff issued a summons for production and inspection of the document on 20 July 1994 which Mayo J later dismissed.

The decision below

8. Mayo J's decision is short enough to be read in full. He said this:

"While I have a certain measure of sympathy for the Plaintiff, I am satisfied on the authority of Lonrho v. Fayed that the statement on affidavit to the effect that the document is irrelevant must be accepted at its face value for the purpose of this application. I agree with Mr Chain that this issue should be ventilated at the trial itself and that it would be unsatisfactory to attempt to resolve this outstanding issue at an interlocutory state. This being the case, this application is dismissed."

The issue before us is simply whether the judge was right to regard himself bound to accept the statement on affidavit that the document was irrelevant on the authority of Lonrho v Fayed (No.3) The Times, June 24, 1993. The statement on affidavit related back to the first affirmation of the 1st defendant. That affirmation, among other things, says that the Shun Tak document is not relevant. It says that:

"It is something shown to me by a friend for my comment and it is not relevant to these proceedings."

It is to be noted that the affidavit does not give any further particulars.

Submissions of counsel assessed

9. Mr Russell Coleman, who appears for the plaintiff, submits that the judge's view that he was bound to accept the 1st defendant's affirmation on the relevance of the document by Lonrho v Fayed is simply wrong. That case is authority - if further authority be needed - that an affidavit sworn pursuant to O.24 r.7(1) is conclusive at the interlocutory stage as to whether a document is or has been in the party's possession, custody or power.

10. Mr Chain, who appears for the 1st defendant, maintains that case is authority for Mayo J's decision but, it is my firm view that Mr Coleman's submissions in this respect are correct. The provisions of O.24 r.10 and the objections to production and inspection of document by a party under O.24 r.10(2) are not covered by the principle that affidavits by a party have to be taken at face value as to their relevance.

11. Nevertheless, Mr Chain submits that the question of relevancy is to be judged by those advising the defendant. Their view is based on the defendant's evidence. The defendant having said that the document is not relevant, the court cannot go behind his affidavit. In my judgment, that proposition is simply wrong. It is clear from the decisions in Thornett v Barclays Bank (France), Limited [1989] 1KB 675 and Jones v The Monte Video Gas Co (1880) 5 QBD 556 that this is not so.

Is the document relevant?

12. But in this case, the matter does not rest there. There is evidence before this Court which plainly demonstrates that for the purposes of discovery it is a relevant document. It is a document which relates to a matter in question between the parties and a matter in question in the action. It suffices to say that on the plaintiff's evidence, the 1st defendant said that the document was related to a private project that he was doing for a consortium and that the initials GSM stand for 'Global Services Mobile'. That is sufficient to relate the document to an application which was later made for a mobile telephone licence even though this is denied by the defendant. The matter does not rest there. Mr Chain submits that in this case the precise contents of the document are irrelevant or at most of marginal relevance. The concession that it is at the most of marginal relevance is quite sufficient to determine this case.

13. Mr Chain's further submission that the plaintiff knows what the document is about and has enough information to cross-examine the 1st defendant about his possession and use of the document is nothing to the point. The document is plainly relevant on discovery. In my judgment, discovery of the document is necessary for disposing fairly of the cause or matter and for saving costs. Mr Chain's submission that the hand-written copy made by Mr Morrison is sufficient is wrong. It seems that the copy is not entirely accurate and it does not record the figures described as 'various figures in table form'. Those figures may be essential relevant to this action, quite apart from the other parts of the document.

Conclusion

14. The judge below thought himself bound by Lonrho v Fayed. In this he was wrong. It therefore falls for this Court to exercise its own discretion in this matter. Doing that on the grounds that I have set out, I would have no hesitation in allowing this appeal and ordering the production of this document for inspection by the plaintiff.

Power V-P :

15. I have nothing to add. I concur with what has fallen from my brother.

Litton JA : I concur.