TERESA ANNE HOLLADAY v. FRED KAN & CO (A FIRM) AND ANOTHER

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 12723 OF 1996

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JUDGMENT

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1. This is an appeal from the Master whereby he dismissed an application of the 1^st Defendant for specific discovery. The original discovery sought covered 5 categories of documents. On this appeal the 1^st Defendant only seeks the discovery of one category of documents, namely documents, correspondence, receipt, memorandum and financial information relating to the financial assistance given to the Plaintiff and her son by Cecil Chao for the period from May 1995 to 1999 including particularly bank statements of the Plaintiff.

2. The claim of the Plaintiff against the 1^st Defendant solicitors is for damages for negligence in that Mr. Wu of the 1^st Defendant as her solicitor failed to discharge his duties to ensure that the oral agreement for her ample financial provision made by the Plaintiff with Cecil Chao (her co-habitee and the father of their children) would be reflected in what is called the 1^st Agreement of 26^th September 1994.

3. Paragraph 11 of the Statement of Claim reads:-

"By reason of Mr. Wu's and the 1^st Defendant's breach of duty and/or negligence and/or the breach of contract, the Plaintiff suffered loss and damage and she failed to obtain, and she failed to have the opportunity to take action to obtain, the benefits intended under the oral agreement and/or to avoid the risk or risks which the oral agreement was intended to avoid."

4. The oral agreement as pleaded by the Plaintiff in paragraph 4 of the Statement of Claim provides for four benefits:-

5. The Defence of the 1^st Defendant denies paragraph 4 (oral agreement) and paragraph 11 (loss and damage) of the Statement of Claim. Although the 1^st Defendant puts the Plaintiff to strict proof that:-

"the Plaintiff lost any opportunity to obtain the benefits intended under the alleged oral agreement or any benefit"

6. This seems to me to add nothing to the denial. It is to be noted that nowhere in the Defence, did the 1^st Defendant allege that the damages should be reduced because of:-

7. The issue therefore strictly on the pleadings between the Plaintiff and the 1^st Defendant is a simple one, namely that if there was negligence by the 1^st Defendant whether the Plaintiff had lost and would lose the 4 benefits under the oral argument, namely the $10 million on his death, the $2 million yearly upon separation, $500,000 for the house and $100,000 credit card. The discovery of her benefits strictly speaking simply does not arise as there is no relevant issue on this. Solicitors for the 1^st Defendant however have embarked on a request for large scale discovery of her benefits after their separation. This is totally unjustified. The present appeal for what I will call benefit documents for the period from 1995 to 1999 is in my view devoid of any merit. The 1^st Defendant fails to satisfy any of the fundamental requirements for specific discovery.

8. The fundamental requirement on any application for specific discovery (see Deak & Co. v N.M. Rothschild & Sons Ltd. [1981] HKC 78) is that the applicant must show:-

9. First class of documents: the class of documents sought by the 1^st Defendant are documents, correspondence, receipt, memorandum, financial information including bank statements evidencing or relating to the financial assistance given to the Plaintiff and her son by Cecil Chao. Is that a class of documents recognised in law. In the case of Deak & Co. v. Rothschild. Barker J.A. made it very clear that when you have a general description of class of documents bearing on an issue, it is not a class of documents and you can see that at page 82. "In our judgment", he said: "Class of documents must be classified by its nature." And then he gave examples of this of documents bearing on an issue not being a class. I am of the view that on the basis of Deak v. Rothcild, that the class of documents now sought cannot be said to be a class of documents. How can documents evidencing or relating to financial assistance by Cecil Chao to the Plaintiff be a class of documents. Assuming I am wrong, then under the first requirement there is the question of whether there is in existence a specific class of documents and in relation to the second requirement, the question whether the Plaintiff has in her possession that particular class of documents. I would just take for example, bank statements which can be said to be a prime case of the discovery of specific class of documents sought by the 1^st Defendant.

10. There is no evidence that the Plaintiff has particular bank accounts in particular banks for the period, let alone that she has in her possession bank statements relating to these unknown and unspecific bank accounts. The same goes for the other classes of documents. There is indeed no evidence that there is in existence, these classes of documents or that she has possession of them. The 1^st Defendant therefore falls on the first as well as the second hurdle of the requirements.

11. The third hurdle will be seen to be fatal for the 1^st Defendant. In order to succeed on specific discovery, the applicant must show that the class of documents relates to an issue. In Astra National Productions v Neo Art Production Ltd. [1928] W.N. 218, Tomlin J. in a classic judgment said this:-

"A document might be relevant either by reason of its character-for instance, the mere fact that it was a document of a particular kind or it might be relevant by reason of its contents, and if the applicant was relying upon a particular class of documents because they might have certain contents, in his view, it was not enough for him to say 'they must be this particular class of documents' unless the mere fact that they belonged to the class was sufficient to constitute relevancy. If the mere fact that they belonged to the class was not sufficient to constitute relevancy but the relevancy had to depend on the particular contents, then, it seemed to him there must be a prima facie case for particular contents made before, under the rule, discovery could be granted."

12. I would assume for the moment that I was wrong, in that there is on the pleadings an issue, that is to say, an issue whether the Plaintiff had received benefits from Cecil Chao by way of financial assistance for herself and her son for the period from 1995 to 1999. I assume that there is in existence that issue. Then the question is whether the class of documents sought is relevant to the issue simply because of their character or because of what might be in their contents. I do not see how for example in relation to bank statements they can be said to be relevant because of their character. Relevancy of the class therefore in this case had to depend on their particular contents and there is simply no proper evidence of what must be the contents of the class of documents sought. Under this requirement, it seems to me that the application for the wide classes of documents simply does not get off the ground, even as I said, assuming that there is a viable issue of benefits received by the Plaintiff from Cecil Chao.

13. Finally on the fourth requirement, all I would like to say in kindness to the 1^st Defendant is that it has not been shown to me that the discovery of the benefits documents including the bank statements of the Plaintiff for the period from 1995 to 1999 is necessary for the fair disposition of the Action or to save costs. In fact, I am convinced that this whole fishing expedition is oppressive and will merely prolong the Action and increase the costs.

14. In my judgment, the application has no merit. The appeal must be dismissed with costs, which will be summarily assessed by me as a gross sum under Order 62 rule 9(4)(b) at a date to be fixed in consultation with all parties, at which hearing I will also give directions as to the future course of the Action for the Plaintiff and for both Defendants, including the timetable of the Action and the question of whether there shall be a separate trial of liability.