HONG YIT KIU AND ANOTHER v. PAUL CW TSE & CO (a firm)

HCA9055/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.9055 OF 2000

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D E C I S I O N

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1. This is an application by the defendant against the plaintiffs in this action for specific discovery under Order 24, rules 7 and 11 for four categories of documents which are set out in the defendant's summons dated 3 March 2004 in the schedule thereto.

2. By this action the plaintiffs claimed against the defendant for breach of duty in contract and in tort arising out of the plaintiffs' purchase of a property, the defendant being the solicitor the plaintiffs had retained for that purpose. The details or the basis of the plaintiffs' claim are not relevant for present purposes.

3. In the Amended Statement of Claim by paragraphs 26(a), (b) and (c), the plaintiffs advanced a number of claims for damages including under paragraph 26(a) pain, suffering, loss of amenities, physical inconvenience, mental stress and so on, and it is claimed that by reason of the defendant's breach of duty since about mid-1999 the 1st plaintiff had suffered insomnia, pneumonia, arthritis of the right knee, impairment of concentration and other ailments, and was diagnosed in June 2003 to be suffering from depressive disorder. It is also claimed in paragraph 26(b) that there was a loss of opportunity and profits to resell the property at the rising market. In paragraph 26(c), the plaintiffs made a claim for loss or diminution in value of the property by reason of the lack of a complete set of title documents in a falling market.

4. Under the particulars under that sub-paragraph, they referred to two specific incidents :

(1) they have said that they had only one offer for HK$8.5 million from a third party to purchase the property in or about early 1998; and

(2) there are contemplated time and again from about mid-1999 to the present, that is the present date of the amendment to the Statement of Claim, to cut loss and sell the property.

In relation to these items the defendant seeks discovery of various documents as set out in the schedule to the summons. I will not set them out in detail here save for the necessity to refer to one sub-category in a moment.

5. The action has reached the stage where a split trial of liability and quantum has been ordered and the trial of liability is now scheduled for November of this year. On that basis the plaintiffs rejected the request for specific discovery on the basis that such discovery is not necessary at this stage of the proceedings. Mr Wu on behalf of the plaintiffs referred me to the judgment of Lightman J in the English High Court in the case of Baldock v. Addison & Ors [1995] 1 WLR at page 158. In that case Lightman J, in a considered judgment, held that where there has been a split trial of the action with the issue of liability being determined before any question of assessment of damages, then it would need special circumstances before the court would exercise its discretion to order discovery relating solely to quantum which, as I have already described, is the present circumstances before me. There is nothing, in my view, put before me to justify why I should not follow that approach.

6. I note also that in Kapur v. J.W. Francis & Co. (1988) The Times, the English Court of Appeal had come to a similar view where if there is a separate trial of liability and quantum, the court would not normally exercise its discretion to order discovery solely in relation to quantum and a party seeking such discovery must satisfy the court that such an order was not wasteful of cost, and would be of real assistance to him in making a realistic and sensible offer of settlement or paying in. There is nothing in the evidence before me to show that this is the case.

7. In any event, Lightman J in Baldock considered the point that an opportunity for the party seeking discovery to assess the prospects of success and to determine whether to go on with the matter is not sufficient by itself to engage the court's discretion in ordering discovery. That being the case, I see no reason why the defendant should have discovery that they seek by their summons.

8. I would note and record that the defendant's solicitor, Miss Tse, has informed me this morning since the conclusion of certain related proceedings by the mortgagee that a split trial is no longer necessary and she referred me to correspondence between the solicitors in March of this year indicating that the plaintiffs' solicitors have shown that there is no in-principle reason why a trial of liability and damages should not now be held together.

9. Before me Mr Wu today has no instructions to comment on that proposed course of action and in any event there being no summons before me that is not something that I will take into account. In any event I have to mention that whether, if an application were made to the court in due course, a combined trial will be held is far from clear. As I said the trial date for the trial of liability has been set for November of this year, if there is to be a combined trial of both liability and quantum, it is not at all clear at this stage whether the November dates could be kept and if the combined trial were to be held and the trial has to be delayed that may cause prejudice to the plaintiffs. For that reason I do not speculate upon whether an application for varying the direction for a split trial would be made and, if so, whether discovery would be appropriate consequent upon that variation of the direction. Therefore the rejection of the discovery sought today should not bar the defendant from seeking such discovery if they see fit when the question of quantum becomes relevant and also that must be without prejudice to the plaintiffs' opposition to any such further application.

10. I mentioned earlier that there is one item that I would wish to mention specifically and that is in relation to item (c) in the schedule to the defendant's summons. By the present schedule they seek : "Documents relating to all mortgage repayments by the Plaintiffs to Orix Asia Limited on the Property, including all documents issued to Orix Asia Limited." As it is framed at the moment, this is far too wide. It would include documents which could not in any way be said to be necessary, such as copies of cheques or copies of deposit slips which would be relating to mortgage repayments made by the plaintiffs but cannot be said to be conducive to the fair disposal of the matter.

11. Before me today when I raised the issue with Miss Tse of the defendant, she has proposed to amend that paragraph of the schedule to the following : "All those documents issued by Orix Asia Limited to the plaintiffs in relation to their mortgage repayments on their Property." Having rejected the defendant's application for discovery as being premature and unnecessary at this stage of the proceedings, I need not make an order on that.

12. Therefore for those reasons I make no order on the defendant's summons.

13. I will now hear the parties on costs.

[Submissions on Costs]

14. Having heard both parties I see no reason why the plaintiffs should not have their costs, however I would order that the costs be to the plaintiffs in any event rather than to be taxed.