XCHRX CHIU PUI WAN AND ANOTEHR v. CHAN SAI WING t/a PHILIP S. W. CHAN & CO.

HCA 330/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 330 OF 2001

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D E C I S I O N

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1. This is the Defendant's application:-

(a) under RHC O. 24 r. 7(1) for an order that the Plaintiffs do within 7 days make an affidavit stating whether any of the documents specified in the Schedule attached to the summons is, or has at any time been, in the Plaintiffs' possession, custody or power, and if not then in their possession, custody or power when they parted with it and what has become of the same;

(b) under O. 24 r. 3(1) for an order that the Plaintiffs do within 7 days make and serve a Supplemental List of Documents to include the documents specified in the said schedule.

2. The Plaintiffs bring this action alleging that the Defendant was their former legal representative. The Plaintiffs further allege that the Defendant has, in such capacity, failed to give them proper legal advice. As a result, the Plaintiffs entered into a number of sale and purchase agreements relating to land properties in the New Territories. The Plaintiffs claim in this action for the loss allegedly caused by the Defendant's wrongful act. The loss is said to be the amount of deposits paid by the Plaintiffs pursuant to the said sale and purchase agreements.

3. The Defendant denies the claim. The lines of defence put forth include:-

(1) the Defendant was not the Plaintiffs' legal representative and merely witnessed the execution of the sale and purchase agreements;

(2) the loss of the deposits was caused by the Plaintiffs' breach of the said sale and purchase agreements and not the Defendant's alleged failure to advise them.

4. On 31 August 2001, the Defendant's solicitors wrote to the Plaintiffs' solicitors asking for the discovery of documents "exchanged between the Plaintiffs and the Vendors [of the said land properties in the New Territories] or its agent of the Properties (as pleaded and defined in the Plaintiffs' Statement of Claim)".

5. In an application made pursuance to O. 24 r. 7(1), the court has to be satisfied:-

(a) there is a prima facie case that the documents or class of documents sought in the application exist;

(b) the party against whom the order is sought has or had those documents in his possession, custody or power;

(c) those documents relate to a matter in question in the action;

(d) the order sought is necessary either for disposing fairly of the cause or matter or for saving costs.

6. The affidavit filed by the Defendant in support of this application stated in summary that:-

(1) on 10 October 2001, the Defendant's solicitors received some documents from the Defendant. These documents were part of the correspondence between the Plaintiffs and the Vendors or the Vendors' agent or Vendors' solicitors regarding the sale and purchase of land properties in the New Territories;

(2) the Defendant's solicitors asked for the discovery of the documents by letters dated 31 August 2001 and 5 September 2001 respectively. On 1 September 2001 and 22 September 2001 respectively, the Plaintiffs' solicitors in effect denied that the documents exist;

(3) the Defendant's solicitors informed the Plaintiffs' solicitors of (1) above on 15 October 2001. The Plaintiffs' solicitors wrote on 15 October 2001 to enquire the relevance of the documents. The Defendant's solicitors informed the Plaintiffs' solicitors that they were relevant to whether the loss claimed was caused by the Defendant's alleged wrongful acts.

7. Points (a) and (b) are not disputed by the Plaintiffs at today's hearing. In relation to point (c), the Plaintiffs argue that the documents sought came into existence only after the date of the alleged wrongful act. Even if that is true, I do not consider that should affect the relevance of the documents to one of the issues in this action, namely, causation of loss.

8. By reason of the matters aforesaid, I am satisfied that the Defendant has established points (a) to (c) above. The correspondence supplied by the Defendant in October 2001 (see 6(1) above) is incomplete and it can be inferred that there are other related documents in existence. For this reason, I am satisfied that the order sought herein is necessary for the fair disposal of the cause or matter or for saving costs.

9. The Plaintiffs also argue that the description of documents in the Schedule is too wide and goes beyond the "class of documents" as that phrase was understood in Deak & Co v. Rothschild & Sons Ltd [1981] HKC 78 and Anne Holladay v. Fred Kan (1999) HKCU Lexis 455, 7 May 1999. I consider it appropriate to replace the words "letters, note, and any other documents" in the Schedule attached to the summons with "correspondence and documents relating to any payment". This amendment is not opposed by the Defendant.

10. In these circumstances, subject to the amendment to the Schedule, I am satisfied that my discretion should be exercised in granting paragraph 1 of the summons. For the same reasons, I am satisfied that an order should be made in terms of paragraph 2 of the summons.