UNIVERSAL ELECTRONICS LTD v. CHAN HOI SHUN AND OTHERS t/a C.Y. SUPPLIES CO

DCCJ 724/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 724 OF 2008

----------------------

----------------------

-------------------------------------

REASONS FOR DECISION

-------------------------------------

Application to set aside witness summons

1.  The plaintiff has summonsed an officer of the Official Receiver’s Office to produce the documents supplied by a bankrupt person Chan Ming Fai to the Official Receiver’s Office for the purpose of the present trial.

2.  This was an application by the Official Receiver to set aside the witness summons on the following grounds:-

(a)   the summons was oppressive and vexatious as the plaintiff was seeking production of all documents in the possession of the Official Receiver in the administration of the bankrupt person; or alternatively

(b)   the issuing of the witness summons is an abuse of the court process since the documents obtained by the Official Receiver is secured for the purpose of the administration of the estate of the bankrupt person as opposed to assisting any creditor in the recovery of its debts.

3.  The plaintiff sued the defendant in fraud and conspiracy to defraud. It was the plaintiff’s allegation that Chan Ming Fai, the bankrupt person, has colluded with the defendant in defrauding the plaintiff of its goods when Chan Ming Fai ordered the goods from the plaintiff with an intention not to pay. It was the plaintiff’s belief that there were no contracts of sale between Chan Ming Fai and the defendant in respect of the 12 lots of goods collected by the defendant from the plaintiff. The plaintiff suspected Chan Ming Fai and the defendant had conspired to deceive the plaintiff of its goods.

4.  The plaintiff acted on Chan Ming Fai’s explanation that all contractual documents had been handed over to the Official Receiver and resolved to call upon the Official Receiver to produce Chan’s documents.

5.  It was the plaintiff’s intention to call upon the Official Receiver to produce contractual documents or to confirm there was no written contractual document between Chan Ming Fai and the defendant in respect of the purchase of 12 lots of disputed goods.

6.  Though the subpoena was worded unhappily wide as requiring the Official Receiver to produce “all documents in the possession of the Official Receiver”, it was quite clear from the exchange of correspondence between the plaintiff and the Official Receiver that the plaintiff was really only looking for the production of documents relating to the 12 lots of disputed goods.

7.  The primary duty of the Official Receiver is obviously the administration of the estate of the bankrupt person, but it would be unthinkable for the Official Receiver to be used as a shield against proof of criminal activities.

8.  In any event property in those documents rests with the bankrupt person Chan Ming Fai. If there be any need for claim of objection against discovery, that really ought to be claimed by the bankrupt person Chan Ming Fai. The dispute between the plaintiff and the Official Receiver about any possible objection to disclosure could easily be resolved by seeking the views of Chan as to whether the disclosure was agreed or would be objected to. Should Chan have given his consent to the disclosure of those documents, the present setting aside application would have been totally unnecessary. Neither the plaintiff nor the Official Receiver saw fit to consult Chan about his view concerning the disclosure of those documents.

9.  As the Official Receiver cannot possibly be seen to be someone who assisted the bankrupt to practice fraud against his creditors, I do not see any justification for the discharge of the witness summons.

10.  The application to set aside is refused. The Official Receiver is required to provide documents relevant to the present litigation. Since both the plaintiff and the Official Receiver were at fault in failing to consult Chan Ming Fai about any objection on his part to the disclosure of the documents in question, neither the plaintiff nor the Official Receiver should be entitled to the costs of this set aside application. There shall be no order for costs on this setting aside application; i.e. each party is to bear its own costs in the present setting aside application.

11.  As the Official Receiver is not a part of the present litigation, the costs of the Official Receiver in attending this trial is to be borne by the plaintiff.