HONG KONG BROADBAND NETWORK LTD v. HONG KONG CABLE TELEVISION LTD

HCA 9172/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 9172 OF 2000

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J U D G M E N T

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Introduction

1.  This is an appeal by the Defendant against the decision of the Master on 30 September 2005 whereby he dismissed the Defendant's summons for specific discovery and two summonses for further and better particulars.

2.  The plaintiff and the defendant are competitors in the supply of broadband internet service.  The defendant is also the provider of cable television service.  The plaintiff's case against the defendant is in trespass, conversion and wrongful interference with business or contracts.  What the plaintiff alleges is that the defendant has, on divers occasions, disconnected what are called "drop-in cables" from the plaintiff's 2-way taps installed in some 11 housing estates or buildings.  The drop-in cables are cables which connect individual units of a building to the public network installed in multi-storeyed buildings.  2-way taps are devices which the plaintiff installs for its customers to receive simultaneous television broadcast and broadband internet access services provided by the plaintiff.  One of those taps was installed inside the flat or unit of a consumer whilst another tap was installed outside the flat or unit.  The plaintiff further claims exemplary damages on the basis that the wrongful disconnections were allegedly committed by the defendant with a contumelious or reckless disregard of the plaintiff's rights to connect to the drop-in cables of their customers and to provide services to their customers, having calculated that the gain to be made by such wrongful disconnections will probably exceed the damages it probably has to pay.

3.  The defendant has filed a defence and counterclaim.  The defendant admits that the disconnections complained of were carried out by its employees.  Its main contention is that the plaintiff's previous conduct in disconnecting and re-connecting the defendant's taps to the drop-in cables to fit in the plaintiff's taps amounted to "unauthorized interconnections" and to trespass of the defendant's property and network.  The defendant complains that the plaintiff's connections resulted in a drop in signal strength adversely affecting the level of defendant's cable television services to its customers.  The defendant counterclaims for damages and for an injunction requiring the plaintiff to remove and disconnect all "unauthorized interconnections" and for an order that the plaintiff do provide to the defendant a list of all flats, units, estates, buildings or other locations in Hong Kong where the plaintiff has interfered with and/or made connection to the defendant's taps and/or cables.

4.  This action was commenced some 5 years ago in September 2000.  At the time, the plaintiff obtained an ex parte injunction against the defendant, which injunction has been continued inter partes.  There was an order for speedy trial.  Notwithstanding this order, the action has gone dormant for a period of some 3 years between February 2001 when the defendant filed its list of documents and April 2004 when the plaintiff filed its list.

Discovery

5.  The defendant's summons of 9 March 2005 originally sought discovery of the following:

(1)     All Broadband Network Service Plan Registration Forms completed by Common Customers since May 2000

(2)     All Broadband Network Service Installation Order Forms completed by Common Customers since May 2000

(3)     All further documents relating to, recording or evidencing any agreement between any Common Customer and the Plaintiff for the provision of the Plaintiff's broadband services entered into since June 2000 or the termination of such agreement or services.

The summons provides a definition of "Common Customer" as follows:

“Common Customer means a cable television services customer or former customer of the Defendant or other householder at an estate listed in the Amended Statement of Claim herein who, any time between May 2000 and the present, became a customer of the Plaintiff for broadband services delivered via co-axial cable and the drop cable of whose flat was, immediately prior to becoming such a customer of the Plaintiff, connected to the Defendant's cable television network.”

6.  When the parties appeared before the Master, the defendant modified its summons to ask for the following differently worded relief.  That is now the subject of an amended summons before me:

“1.     All agreements or contracts or, where there is no agreement in writing, all documents evidencing agreement, between the Plaintiff and individual users referred to in paragraphs 7 and 18 of the Amended Statement of Claim.

2.      All agreements or contracts or, where there is no agreement in writing, all documents evidencing agreement, between the Plaintiff and individual users for the termination of any agreement referred to in 1 above.”

7.  Paragraph 7 of the Statement of Claim pleads as follows:

“The constructions of the Plaintiff's network and the installation works were carried out pursuant to agreements made between the Plaintiff and the Incorporated Owners of the users' Buildings and Estates and agreements between the Plaintiff and the individual users.  In cases where the buildings were government estates, the Plaintiff would enter into such agreements with the Housing Authority.”

8.  There is no dispute between the parties as to the principles which apply to the determination of this summons.  The only issue which divides the parties now is whether the documents "relate to one or more of the matters in question in the cause or matter" within the meaning of Order 24 rule 7(3) of the Rules of the High Court.

9.  As for the cause of action in trespass and conversion, Mr Beresford submitted that the documents sought were relevant in a number of ways.

(1)    Quantum of the plaintiff's loss

The defendant wishes to know how many disconnections do the plaintiff complains about and what their value to the plaintiff is.  Mr Beresford pointed out that the standard form agreement between the plaintiff and its customers has 3 different service plans.  He contended that information as to which service plan each particular customer subscribed to was crucial information relating to the plaintiff's claim for loss of profit and goodwill pleaded in paragraphs 15, 16 and 18 of the Statement of Claim.  The defendant also seeks discovery of documents relevant to the termination of the service.  This is to enable the defendant to ascertain the duration of the plaintiff's service to the customer, a matter which Mr Beresford says is relevant to quantum.

(2)    The issue of wrongful interference with the defendant's system and the quantum of the defendant's loss as claimed in the counterclaim

It is said that information as to the service addresses would enable the defendant to find out whether the defendant's cable television signals have been interfered with.  The defendant also wants to take steps to find out whether at the time of the plaintiff's original connection with the system, the plaintiff had used a model of 2-way tap (DM-02) which was accepted to be likely to generate more interference than another model (DM-22).

(3)    The issue of whether the 2-way taps were in the possession of the plaintiff

It is said that information as to service addresses would also enable the defendant to conduct inquiries as to whether the 2-way taps were chattels for which the plaintiff can claim an immediate right to possession or whether they were fixtures.

(4)    The issue of whether there has been disconnection

Mr Beresford submitted that without the discovery sought, the defendant would be prevented from arming itself with evidence that particular interconnections were not disconnected by the defendant as alleged by the plaintiff.

10.  As to the cause of action for wrongful interference with business, Mr Beresford contends that the defendant is entitled to see the actual agreements which the plaintiff claims is the subject of wrongful interference.  He argued that the terms of the agreement are relevant to the issue whether the defendant did interfere with the performance of the agreements.

11.  In resisting the discovery application, Mr Leong for the plaintiff emphasized that the battle lines drawn when the parties filed their pleadings and fought an interlocutory injunction application in the year 2000 were very different from those urged upon me by Mr Beresford.  Mr Leong pointed out that the Defence plainly admitted disconnections in the 11 housing estates or buildings.  Mr Leong's arguments amount to this: that the defendant has not, in its defence or counterclaim, raised any issue which required identification of the particular flat or unit where the disconnection occur or whether DM-02 or DM-22 was used.  He argued that the defendant is not prejudiced by non discovery of the plaintiff's agreements with its customers.  As to Mr Beresford's point that the defendant wanted to know the service address in order to carry out investigations and testings, Mr Leong submitted that it would be unrealistic for the defendant to expect to obtain any evidence of probative value now, 5 years after the events complained of.

12.  I am here concerned only with the question of relevance.  Whether disclosure is or is not necessary for disposing fairly of the cause or matter or for saving costs will be considered later.  I am also not concerned at this juncture with whether there ought to be production following discovery.

13.  In my view the documents sought are relevant to the issue of quantum of the plaintiff's alleged loss of profit and loss of goodwill.  It seems to me that the documents are relevant at least in showing the number of disconnections that the plaintiff is complaining about or has evidence of, and what was the value of such agreements to the plaintiff.  Both of these matters are relevant to the plaintiff's claim of general damages for loss of profit or loss of goodwill.  I accept that the documents relating to the termination of service would also be relevant to show the duration the plaintiff's service, and hence relevant to the question of the plaintiff's alleged loss of profit and loss of goodwill.

14.  I also see force in Mr Beresford's contention that disclosure of the documents (and thus the service addresses of the customers) will enable the defendant to pursue various avenues of inquiry in gathering evidence, such as evidence of whether DM-02 or DM-22 was used in a particular location, and the testing of the degree of any interference on site.  This is a matter which may go to the defendant's counterclaim for loss and damage.  Mr Leong's argument that it is now 5 years after the matters complained of and that any evidence obtained would be of little or no probative value may or may not be correct.  That, however, does not negate the relevance of the documents in the Peruvian Guano sense.

15.  I am less impressed by the other reasons of relevance urged upon me by Mr Beresford.  The question of whether the 2-way taps are fixtures or chattel has not been raised in the pleadings.  Nor do the pleadings disclose any issue between the parties as to whether a particular disconnection did take place or not.  However, for the reasons given above, I am satisfied that the documents sought are relevant to the issues between the parties, and should prima facie be disclosed.

Whether discovery is necessary

16.  When the Master rejected the defendant's summons, he was not satisfied that discovery of the documents sought would be necessary either for disposing fairly of the cause or matter or for saving costs.  The Master expressed the view that what the defendant was really after was the plaintiff's list of customers.  He considered that where, as here, the defendant refuses to disclose its own list of customers; discovery of the plaintiff's list does not help much in resolving the parties' disputes, and is only oppressive in nature and will add costs and further complicate the proceedings.

17.  This matter is, however, no longer relied on by Mr Leong.  Before me, Mr Leong did not contend that if the documents sought are relevant, discovery would be oppressive.  There is no suggestion that the defendant's motive in obtaining discovery is otherwise than bona fide for the purpose of pursuing this litigation.

18.  It is trite that under Order 24 rule 8 the burden is on the party resisting discovery to show that discovery is not necessary either for disposing fairly of the cause or matter or for saving costs.  The plaintiff has adduced no evidence in this regard.  Mr Leong has not been able to tell the Court what the total number of disconnections is.  Such evidence as there is before me suggests that the number of disconnections involved may be beyond 900.  I broached with the parties whether, in the light of the comments of the Courts summarised in Hong Kong Civil Procedure 2004 para. 24/0/12 on the importance of case management and the exhortations to avoid interlocutory discovery skirmishes, a more appropriate order in the present case would be to require the plaintiff to state the total number of disconnections alleged in respect of each housing estate or building as well as the relative percentages of DM-02 and DM-22 used before and after disconnection.  Mr Beresford did not warm to the suggestion.  In the end, I am persuaded that this course would not be fair to the defendant.  I bear in mind that the documents are relevant in the Peruvian Guano sense, that the plaintiff does not complain that discovery would be oppressive, and indeed has not adduced any evidence to show why discovery is not necessary.  Further, discovery may enable the defendant to carry out investigations which may yield some evidence and I cannot say at this stage that any evidence thus obtained would not be probative.  I also bear in mind that the lapse of time which has occurred between 2001 and 2004 could not be blamed on the defendant.

19.  In the circumstances, I am not satisfied that discovery would not be necessary for the purpose of disposing fairly of the issues or for saving costs.

Request for Particulars

20.  The defendant first made a request for further and better particulars by letter dated 14 February 2005.  The defendant has since issued two summonses for further and better particulars.  The first was issued on 9 March 2005 ("1st F & BP Summons") and the second on 29 April 2005 ("2nd F & BP Summons").  After the defendant served its requests, the plaintiff provided some particulars.  The defendant has pursued the rest.  I shall deal with the outstanding requests.

Request 1 under the 2nd F & BP Summons

21.  Request 1 under the 2nd F & BP Summons seeks to require the plaintiff to identify each and every 2-way tap referred to in paragraph 6(2) of the Statement of Claim.  The specific request is that the plaintiff should state whether it was a DM-02 or DM-22 (a less instrusive equipment) or some other and if so what type of 2-way tap, the date and precise place of installation.  The request also seeks particulars of the date or dates that it has been disconnected or deactivated by the plaintiff.

22.  Mr Beresford referred me to Bullen & Leake & Jacob's Precedents of Pleadings, 13th ed. (1990) pp. 955-956 for the proposition that a plaintiff must identify the goods in a claim for trespass or conversion.  However, he accepted that the degree of identification required will depend upon the nature of the case.  There are three aspects of identification requested: (a) as to location of the tap, (b) the date of installation and (c) as to the model number of the tap.

23.  Given that the defendant has admitted the disconnections, I do not see why the precise location or the date of installation of the taps is relevant to the plaintiff's claim.  Such information may be useful to the defendant in respect of its counterclaim.  But as Mr Beresford rightly acknowledged, the defendant cannot obtain particulars of the claim for the purpose of assisting it in its counterclaim.  Information as to location and the approximate date of installation is, however, likely to be available or can be inferred from the agreements the plaintiff have with its customers.  In my judgment, location and date of installation need not be provided by way of particulars.

24.  As noted above there are two 2-way taps involved in every connection, one outside and another inside the unit.  So far as identification of model number is concerned, the defendant wishes to know the model number of the tap outside the unit.  There is no dispute that the one inside the unit is a DM-02 tap.  Mr Leong contended that whether a DM-02 or DM-22 tap was used is not material whether to the claim or the counterclaim.

25.  I am unable to accept Mr Leong's argument that whether the tap in question is a DM-02 tap or a DM-22 tap is irrelevant to the counterclaim.  It is common ground that a DM-22 tap would constitute less interference with the defendant's signal.  That suggests that the defendant may have a stronger case on loss if the majority of the taps were DM-02 instead of DM-22.  However, this does not avail the defendant.  As noted above, the defendant is not entitled to request for further and better particulars of the allegations in the Statement of Claim merely because such particulars may assist it in its counterclaim.  As for the claim, I am not satisfied that the precise model of the tap is of relevance.  Accordingly, I am not prepared to order the plaintiff to identify in each and every case whether the 2-way tap is one of DM-02 or of DM-22.

26.  Request 1.2 seeks particulars of disconnection or deactivation.  The allegation in respect of which such particulars are sought is the following:

“The Plaintiff's 2-way tap to which the Defendant's 3-way/4-way tap output and the Plaintiff's network output are then connected (“the installation works”).”

27.  In my judgment, the particulars sought do not arise from the allegation.  I would decline to make an order on this request.

Request 2 under 2nd F & BP Summons

28.  This request seeks particulars of paragraph 8(1) of the Statement of Claim which pleads "the drop-in cables of such customers are disconnected from the Plaintiff's 2-way taps and were directly connected to the Defendant's 3-way/4-way taps only".  The requests are

(1)     identify each and every drop-in cable referred to,

(2)     state the name and address of each customer and identify all relevant contracts,

(3)     identify each and every 2-way tap referred to.

29.  Mr Beresford accepts that there is a clear overlap between this request and request 1.1 under the same summons.  There is no suggestion that the location of the drop-in cable would be different from the location of the 2-way tap.  For the reasons given above, I decline to make an order in respect of requests (1) (2) or (3).

Request 3 under 2nd F & BP Summons

30.  Request 3 under the summons the 2nd F & BP Summons seeks to require the plaintiff to identify each and every 2-way tap or other equipment which has been reconnected by the plaintiff's technicians as pleaded in paragraph 8(2) of the Statement of Claim.  The defendant wants to know whether the 2-tap way or other equipment so reconnected with DM-02 or DM-22 or some other type of 2-way tap.

31.  This request relates not to the original tap which is alleged to be the subject of trespass or conversion, but to the replacement 2-way tap.  The defendant wishes to find out whether the replacement tap is DM-02 or DM-22 or some other model.  For the reasons given above, I do not consider that the model number of the tap is relevant to the plaintiff's claim.  Again, the fact that this information may be of relevance to the counterclaim does not assist the defendant on this application.  I decline to order the particulars requested.

Request 5 under the 2nd F & BP Summons

32.  Paragraph 16 of the Statement of Claim alleges that the defendant has wrongfully deprived the plaintiff of 2-way taps by disconnecting and discarding the same.  Mr Leong pointed out that the plaintiff has indicated that its special damages are limited to the sum of HK$8,857.50 being the value of labour costs incurred by the plaintiff in completing the reinstatement work.  He submitted that since the claim for special damages are confined to labour cost, it is implicit that the plaintiff is not seeking to recover any damages under this paragraph for having been deprived of the value of any 2-way tap.

33.  In my judgment, Mr Beresford is right in his contention that the plaintiff should either abandon this allegation under paragraph 16 or provide the particulars.  It is not good enough for the plaintiff merely to state that it is not claiming any special damages on this plea.  The defendant is entitled to know whether it has to meet a case that some of the taps were disconnected and discarded.  This is especially so when the plaintiff is relying on this plea in paragraph 16 as one of the matters for claiming exemplary damages.  I would accordingly order the particulars requested unless the plaintiff takes such step as may be necessary to amend the Statement of Claim to withdraw the allegation contained in paragraph 16.

Requests 6 and 7 of the 2nd F & BP Summons

34.  It is convenient to take these two requests together.  Both relate to the defendant's request for particulars of knowledge.  The plaintiff furnished some particulars in answer to the requests but prefaced the answers by the words "such knowledge of the defendant was implied from all the circumstances of the case, including but not limited to ...".  The defendant takes objection to the words in italics claiming that those words enable the plaintiff to enlarge on the particulars, and defeat the whole purpose of seeking particulars.  Mr Leong retorted that the words would not have that effect as no court would allow a party to adduce evidence not foreshadowed.

35.  In my view it is unfortunate that the parties have to spend any time or cost in debating this question.  It is evident that the plaintiff is not able to furnish any particulars other than those already supplied.  A less objectionable form of words would be for the plaintiff to indicate that the particulars supplied are the best that could be supplied for the time being, reserving the right to furnish further particulars if and when necessary.  In my view, it would meet the interest of justice if I make no order on this request, but record, as I have already done, Mr Leong's concession that it would not be open to the plaintiff to adduce evidence outside the specific matters presently pleaded.  This is, of course, without prejudice to the plaintiff's right to apply to amend the particulars or supply further voluntary particulars in amplication of its case.

Request 8 of the 2nd F & BP Summons

36.  This request seeks particulars of an allegation in paragraph 18 of the Statement of Claim of damage to the plaintiff's taps "as pleaded above".  The request is to give full particulars of the alleged damage to the plaintiff's 2-way taps, identifying the 2-way taps alleged to have been damages, and stating where above it is pleaded.

37.  I agree that it is not clear from the Statement of Claim what this relates to.  I would direct the plaintiff to give the particulars requested.

Requests 3 and 4 in the 1st F & BP Summons and request 4 in the 2nd F & BP Summons

38.  These requests relate to the damages claimed by the plaintiff.  The plaintiff indicated by letter dated 18 May 2005 that it "limits its claim for damages against the Defendant to HK$8,857.50".  Mr Leong has stated both before the Master and in this Court that this relates only to the claim for special damages.  The defendant says with some justification that this has not been made clear in the letter.  Nevertheless, since this has been clarified by Mr Leong, there was no further particularisation the defendant asked for.  Mr Beresford also pointed out that the plaintiff has disclosed certain table which appeared to provide a breakdown of the labour cost said to have been incurred.  Again, it would have been better if the plaintiff indicates unequivocally that the particulars contained in the table relates to the claim of special damages.  However, no order is really called for now that the defendant knows the case it has to meet.

Orders

39.  For the reasons I have attempted to state, I would allow the defendant's appeal, set aside the Orders made by the Master (including the orders as to costs) and make the following orders:

(1)     The plaintiff do within 21 days from the date of this Order make and file and serve on the defendant an affidavit or affirmation stating whether the documents specified in the Schedule hereto are or have at any time been in its possession, custody or power, and if not then in its possession, custody or power, when it parted with them and what has become of them.

Schedule

“1.     All agreements or contracts or, where there is no agreement is writing, all documents evidencing agreement, between the Plaintiff and individual users referred to in paragraphs 7 and 18 of the Amended Statement of Claim.

2.      All agreements or contracts or, where there is no agreement in writing, all documents evidencing agreement, between the Plaintiff and individual users for the termination of any agreement referred to in 1. above.”

(2)     The plaintiff do within 21 days from the date of this order file and serve on the defendant the following further and better particulars of its Statement of Claim:

Under paragraph 16

Of the allegation that

“the Defendant has wrongfully deprived the Plaintiff of the 2-way taps by disconnecting and discarding such 2-way taps by reason whereof the Plaintiff has suffered loss and damage.”

State the location of each and every 2-way tap of which the Plaintiff has been allegedly deprived.

PROVIDED THAT the plaintiff shall be relieved of its obligation to furnish the particulars under this paragraph if it shall within the said 21 days have taken such steps as may be necessary to amend the Statement of Claim to withdraw the allegation contained in paragraph 16.

Under paragraph 18

Of the allegation that

“the Defendant committed the said wrongful acts of … damaging the Plaintiff's 2-way taps as pleaded above.”

Give full particulars of the alleged damage to the Plaintiff's 2-way taps, identifying the 2-way taps alleged to have been damaged, and identifying the plea which is being referred to in the Statement of Claim.

Costs

40.  My provisional view is that the defendant is successful on the summons for discovery and should have the costs of that summons both here and below.  I make an order nisi to that effect in the summons for discovery.  As for the summonses for particulars, the defendant has only limited success.  It failed to persuade me on a fair amount of its requests whilst some fall away after clarification.  I make orders nisi that the costs of the summonses for particulars, both here and below, be costs in the cause.  The orders nisi shall be absolute unless an application is made to vary or set aside the order within 14 days from the date of the order.