HORST JOACHIM FRANZ GEICKE v. 1-ONASIA LTD AND OTHERS

HCA 2379/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2379 OF 2009

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BETWEEN

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DECISION

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1.  There are two summonses before the court: (i) the Plaintiff’s summons dated 11 August 2011 for leave to adduce 6 invoices issued by the 1^st Defendant (“the Invoices”) and 2 receipts (“the Receipts”) issued by Messrs. Haldanes to the Plaintiff’s wife (“the Wife”) in relation a surveillance operation known as “Project October” (“the 1^st Summons”); and (ii) the Plaintiff’s summons dated 19 September 2011 for specific discovery of the Invoices from the Defendants (“the 2^nd Summons”). The relief sought in the two summonses are in the alternative.

Background

2.  The Plaintiff is a businessman resident in Hong Kong with business interests in Hong Kong, Vietnam and elsewhere.  The Plaintiff and the Wife were married in Hong Kong in 1987 and they separated in 2009.  There are two children of the family: a daughter aged 19 and a son aged 15 (“the Children”).  Since September 2009, the Plaintiff and the Wife have been engaged in divorce proceedings in Hong Kong (“the Matrimonial Proceedings”) which are still pending and are bitterly fought.

3.  The 1^st Defendant is a Hong Kong company engaged in the provision of surveillance, security and investigation services and the 2^nd Defendant is the chief executive officer of the 1^st Defendant.  According to the Defendants’ case, the 3^rd Defendant was an independent contractor of the 1^st Defendant at the material time.

4.  It is not disputed that since October 2009, the Wife had engaged the 1^st Defendant to provide, inter alia, a campaign of general surveillance and investigation services relating to the Plaintiff.  The campaign was named “Project October”.

5.  It is the Plaintiff’s case that at the time of the issue of the Writ, surveillance had been carried on by the Defendants in Hong Kong on at least 10 occasions and in Vietnam on at least 4 occasions.  The Plaintiff and the Children were followed by the 1^st Defendant’s agents and their whereabouts were closely monitored to the extent that they felt harassed and intimidated, and the matter was reported to the police on 17 October 2009.

6.  It is also the Plaintiff’s case that bugging devices were installed by the Defendants in the Plaintiff’s car and in one of the Children’s bedroom in the Wife’s home.  The Plaintiff claims that such measures were taken by the Defendants to obtain personal and confidential information of the Plaintiff and the Children.

7.  As a result of the aforesaid alleged unlawful acts, the Plaintiff issued the Writ on 27 November 2009 and obtained an ex parte interlocutory injunction restraining the 1^st and the 2^nd Defendants from assaulting, harassing, molesting, threatening, communicating or otherwise interfering with the Plaintiff or the Children within the Plaintiff’s home or in any other place in any manner whatsoever.  Prior to the return date of the said ex parte application, it was agreed that the Defendants would provide an undertaking in terms of the injunction and the summons for the continuation of the injunction was adjourned sine die with liberty to restore.

8.  In this action, on the basis of the said alleged unlawful acts which are all part of a campaign on the part of the 1^st Defendant, who was then acting on the Wife’s instructions, to carry out covert and secret investigations over the personal and business affairs of the Plaintiff and the Children, the Plaintiff claims against the Defendants for, inter alia:

(i) conspiracy to injure the Plaintiff by using unlawful means;

(ii) contravention of the Personal Data (Privacy) Ordinance, Cap. 486 and breach of the duty of confidence; and

(iii) harassment and/or intimidation and/or trespass to the person.

9.  Although the Defendants admit that they have been engaged by the Wife to obtain evidence to be used in the Matrimonial Proceedings and were engaged by her to carry out “a programme of general surveillance” on the Plaintiff from early October 2009, they deny that they have committed any unlawful acts.  In particular:

(i) it is the Defendants’ case that their engagement and work were limited to “observing the Plaintiff’s meetings in public places” and to “conduct record and asset checks on the Plaintiff”;

(ii) the Defendants allege that the Plaintiff should have no expectation that his “movements and meetings in public places” would be private and confidential;

(iii) the Defendants deny that they have taken steps to obtain and collect private and confidential information from the Plaintiff and the Children or are otherwise in possession of any confidential or private information; and

(iv) the Defendants deny that they have carried out any surveillance on the Children.

10.  Although the Wife is not a party to this action, the Defendants have never denied that their legal fees in this action are being paid for entirely by the Wife.

11.  The Plaintiff had pressed for discovery but very limited documents were disclosed by the Defendants in the present case, certainly not including the Invoices and the Receipts. These documents were subsequently disclosed by the Wife in her application for maintenance pending suit in the Matrimonial Proceedings as evidence of her engagement of the 1^st Defendant’s services and the payments that she had made to the 1^st Defendant for the services rendered.

12.  The Plaintiff takes the view that the Invoices and the Receipts are relevant in the instant proceedings and so the Plaintiff issued the 1^st Summons on 11 August 2011 seeking leave to adduce such documents as evidence in this action.  The Defendants object the application on the ground that the Matrimonial Proceedings in which the Invoices and the Receipts were disclosed are private proceedings and that the Plaintiff is subject to an implied undertaking in respect of which this court has no jurisdiction to release.  Given the Defendants’ stance, the Plaintiff issued the 2^nd Summons on 19 September 2011.  In this particular summons, the Plaintiff only asks for specific discovery of the Invoices and not the Receipts.  The Plaintiff accepts that the Defendants may not be in possession of the Receipts which were issued by Messrs. Haldanes to the Wife.

13.  In the hearing, Ms. Tong, counsel for the Plaintiff, indicates that if the court is minded to grant an order for discovery under the 2^nd Summons, the Plaintiff will not press for any order under the 1^st Summons.  In view of such stance and the simple nature of the 2^nd Summons, I will deal with that particular summons first.

The 2^nd Summons

14.  The Defendants object the 2^nd Summons on the following grounds:

(i) by issuing the 2^nd Summons, the Plaintiff is seeking to circumvent the prohibition against the use of the documents disclosed in the Matrimonial Proceedings without leave, which amounts to an abuse of process;

(ii) as the Plaintiff has possession of the Invoices, it is not necessary for specific discovery to be ordered; and

(iii) in any event, the Invoices are irrelevant and immaterial to the Plaintiff’s claim, given the admissions made by the Defendants to many of the Plaintiff’s allegations in respect of the particulars of the surveillance operation as pleaded in the Re-Amended Statement of Claim.

(a) Question of relevance

15.  I propose to deal with the question of relevance first.  If the documents in question are not relevant to the issues involved in the dispute, there is simply no basis for the court to make an order for specific discovery.

16.  It is quite unnecessary for me to recite the well-accepted legal principles for discovery as laid down in the case of Compagnie Financiere du Pacifique v Peruvian Guano (1882) 11 QBD 55.

17.  Undoubtedly, the Invoices are all in relation to the surveillance campaign conducted by the Defendants on the Plaintiff and allegedly on the Children which is the subject matter of this action.  I agree with Ms. Tong that the Invoices are directly relevant in providing information as to the scope, nature, duration and extent of the Defendants’ surveillance activities on the Plaintiff and the Children, and the steps taken by them to obtain alleged private and confidential information by using alleged unlawful means, or are capable of leading to a train of inquiry which may lead the Plaintiff to information to support his own case or to discredit the Defendants’ case.  The Invoices may contain descriptions of the services rendered and the work done as well as the items of equipment purchased for the purpose of carrying out such services.  All such information is directly relevant to the issues in this action.

18.  It seems that the only reason put forward by Mr. Lo, counsel for the Defendants, to say that the Invoices are irrelevant is that the Defendants have made a number of admissions in the pleading about the details of the surveillance activities.  According to Mr. Lo, the Defendants admit that they have carried out the surveillance activities as pleaded in the Re-Amended Statement of Claim, and so the dispute between the parties is narrowed down to the lawfulness of such activities.  Hence, the Invoices are not relevant to the determination of the issues of the case.

19.  I am a bit puzzled by such argument.  If the Invoices contain nothing more than the particulars already pleaded in the Re-Amended Statement of Claim, why do the Defendants object the discovery of such documents?  Although I do not have the opportunity of examining the contents of the Invoices myself, I would imagine that the Invoices do contain some relevant information or materials that the Plaintiff is seeking to rely on at the trial of this action, otherwise there is no point for the parties to appear in court to argue on such matter.  That is already sufficient for the court to order discovery of such documents.

20.  There is a dispute between the parties as to whether the Defendants have admitted all the relevant details of the surveillance activities pleaded in the Re-Amended Statement of Claim.  However, it is not appropriate for the court to conduct a forensic exercise at this stage to examine whether the admissions cover all the particulars in the pleadings.  It should be a matter for the trial judge.

21.  Further, the relevance of a document should not be tested solely against the detailed particulars pleaded by the parties.  In this regard, Deputy High Court Judge H. Wong, SC said the following in Chan Hung v Yung Kwong Chung,HCA 216 & 217 of 2004, unreported (decision on 15 January 2009):

“27. … … … For the purpose of discovery, the relevance of a document should not be solely tested against the detailed particulars pleaded by the parties. It is the pleaded case of the parties in the broad sense that one should be concerned with. A document may be generally relevant to a party’s case as pleaded (many so-called ‘background documents’ are of this nature) although its relevance cannot be specifically pinned to some pleaded particulars. For discovery purposes, the pleadings have to be looked at broadly.”

22.  One must bear in mind that the Invoices are by themselves very important documentary evidence.  Apart from the details of the surveillance activities referred to in the Invoices, they may or may not contain other information which can assist the Plaintiff’s case.  As I see it, so long as the Invoices are directly relevant documents, the Plaintiff should be allowed to make use of the documents in whatever manner that is best in the interest of the Plaintiff’s claim, and it is not appropriate for the court to limit the scope as to how the Plaintiff should present his claim or evidence at the trial of this action.  Further, there is certainly a dispute between the parties as to whether the Defendants have conducted surveillance on the Children, and the Invoices may help the court to determine this particular issue.

23.  I would add one more observation.  Since it was supposed to be a covert surveillance operation, the Plaintiff would not be able to know the full extent of the alleged unlawful activities relating to the surveillance on the Plaintiff and the Children until the Defendants make full discovery of the relevant documents including the Invoices.  This is also an additional reason why discovery should be ordered in the instant case.

(b) Abuse of process

24.  It is also the Defendants’ submission that a discovery order would have the effect of releasing the Plaintiff from the implied undertaking given in the Matrimonial Proceedings which are private in nature.  The implied undertaking was made for the protection of the Wife so that the Plaintiff would not be able to use the documents in other proceedings.  Instead of asking the court for an order for discovery, the Defendants say that the Plaintiff should have applied in the Matrimonial Proceedings for leave to use the Invoices in the instant case.  In so doing, the Wife would have the opportunity to address the court on such application.  Hence, it is an abuse of process to by-pass such procedure and to make the application for discovery in the instant proceedings.

25.  I also reject such argument.  No matter what happens in the Matrimonial Proceedings, there is an independent obligation on the part of the Defendants to disclose documents which are relevant to the issues in the instant case.  Assuming that the Invoices have not been disclosed in the Matrimonial Proceedings, it seems that the Defendants accept that they are obliged to disclose the Invoices here.  In such circumstances, why should it make a difference when the Wife happened to make use of such documents in support of her application for maintenance pending suit in the Matrimonial Proceedings?  Hence, unless the Defendants can establish any valid reason as to why the Invoices should not be disclosed such as legal privilege, there is nothing to deny the Plaintiff of his right to insist the Defendants to disclose documents which are relevant in the present case.  There is no abuse of process.

26.  It is certainly open to the Plaintiff to adopt such course of action.  In fact, that was actually what happened in the Australian case of Patrick v Capital Finance Pty Ltd (No. 3) [2003] FCA 385.  In that case, there were related proceedings both in the Federal Court and the County Court.  In the Federal Court, the Court was asked to determine the question of discovery relating to a document disclosed in the County Court proceedings.  The party applying for discovery initially made an application in the County Court for leave to use the document in the Federal Court proceedings. After reflection, that party withdrew the application in the County Court and made an application for discovery in the Federal Court on the ground that the opposite party had an independent obligation to disclose relevant documents in the Federal Court proceedings.  The Federal Court saw nothing wrong with such approach and entertained the application for specific discovery.

27.  As there is an independent obligation on the part of the Defendants for discovery, the court should not refuse to entertain the discovery application simply because the Wife is not a party to the proceedings. In fact, this action can be considered as a satellite litigation of the Matrimonial Proceedings, but it does not mean that the Wife should be heard in all interlocutory applications in the instant case.  In any event, it is open to the Wife to make an application to intervene in the present proceedings if necessary.  I also cannot think of any possible prejudice that can be caused to the Wife by the discovery of the Invoices which are crucial documents in this case.  In particular, the Wife voluntarily made use of the Invoices in the Matrimonial Proceedings and such documents were not disclosed under the compulsion of law.  Hence, I reject the Defendants’ abuse of process argument.

(c) Necessity of the discovery order

28.  I also do not accept the Defendants’ contention that since the Plaintiff is in possession of the Invoices, it is unnecessary for the court to order specific discovery in the present case.  Although it is the Plaintiff’s argument that the Invoices are not subject to the implied undertaking because they are not documents disclosed under compulsion, the Plaintiff is not certain about his legal position.  If the Plaintiff simply produces the Invoices in the instant proceedings, there is a danger that he would be liable for contempt for breach of the implied undertaking.  It would therefore be necessary for the Plaintiff to make the present application.  As I see it, the Plaintiff just insists on his right to require the Defendants to disclose documents which are relevant to the issues of the case.  If the Defendants refuse to do so, an order for specific discovery is necessary.

The 1^st Summons

29.  In view of my aforesaid ruling, it is quite unnecessary for me to deal with the 1^st Summons.  However, since I still have to decide on the issue of costs of the 1^st Summons, I feel obliged to deal briefly with the arguments advanced by the parties on this summons, in particular on the issue as to whether this court has the jurisdiction to entertain the application in the instant action as opposed to the Matrimonial Proceedings.

30.  By issuing the 1^st Summons, the Plaintiff is asking the court to grant leave to adduce the Invoices and the Receipts disclosed by the Wife in the Matrimonial Proceedings which are private in nature.  The Defendants have all along objected the 1^st Summons on the ground that the court has no jurisdiction to deal with the application in the instant proceedings.  The argument is two-fold.  Firstly, the Invoices and the Receipts were disclosed in the Matrimonial Proceedings subject to the implied undertaking made by the Plaintiff not to use the documents in other proceedings.  The implied undertaking was made for the protection of the Wife. Since the Wife is not a party in the instant proceedings, the proper procedure should be the Plaintiff making an application in the Matrimonial Proceedings for leave to use the Invoices in the instant case.  Hence, this court has no jurisdiction to entertain such application.  Secondly, r. 121 of the Matrimonial Causes Rules, Cap. 179A (“the MCR”) provides that no document filed in the matrimonial proceedings, other than a decree or order made in open court, shall be open to inspection by the public without the leave of the court.  By reason of such rule, the court in this particular action should not allow the Plaintiff to adduce the Invoices and the Receipts in evidence which would have the effect of making such documents available for inspection by other parties, unless leave of the court seized with the matrimonial proceedings has been obtained.  Mr. Lo also cites the case of Re Boldwin Construction Co. Ltd. & Ors. [2003] 4 HKC 156 in support of such proposition.

31.  The court in the Boldwin case had to deal with 3 petitions to wind up 3 different companies.  These petitions were related to a married couple who were then involved in divorce proceedings.  There were various summonses before the court to appoint provisional liquidators for the companies.  Before dealing with these summonses, the court had to consider whether certain parts of the evidence adduced by the husband should be struck out as they were in contravention of r. 121 of the MCR.  The husband sought to produce in evidence materials disclosed in the matrimonial proceedings between the wife and himself in order to show that the wife had an ulterior motive to serve in these applications.  Kwan J, as she then was, held that the evidence adduced by the husband in contravention of r. 121 of the MCR should be struck out as the provision prohibited the inspection of documents in matrimonial proceedings by third parties without leave and that the court should not allow such documents to be exhibited in other proceedings where they would be available for inspection by other parties, unless leave of the court seized with the matrimonial proceedings had been obtained (at 164E-166D).

32.  I agree with such dicta of Kwan J.  The rationale and wording of r. 121 are clear.  Matrimonial proceedings are private in nature.  For the protection of the parties involved in the proceedings, the documents filed in such proceedings should not be disclosed in public unless leave of the court seized with the matrimonial proceedings has been obtained.  Hence if the Plaintiff just proceeds with the application under the 1^st Summons, the proper procedure is that such application should be made in the Matrimonial Proceedings.  The Defendants are, therefore, quite justified to oppose the Plaintiff’s application under the 1^st Summons.

33.  However, I notice one oddity in the MCR. According to r. 121, leave should be obtained from the “court” for the inspection of the documents.  “Court” is defined in s. 2(2) of the MCR to mean the District Court.  This definition is different from the one in the main Ordinance which also includes the High Court.   Hence, even if the matrimonial proceedings have been transferred to the High Court and documents are filed in the High Court proceedings, as in what happened in the present case, any application for inspection of such documents would have to be made in the District Court.  This would be quite undesirable as the High Court in the matrimonial proceedings would be in the best position to adjudicate on such matter.  In any event, the effect of r. 121 is that leave for inspection should be obtained from the court seized with the matrimonial proceedings.

34.  Despite my dicta on the effect of r. 121, I must emphasis once again that there is nothing wrong for the Plaintiff to proceed with the application for specific discovery under the 2^nd Summons.  The Plaintiff has an option in this regard, either to apply in the Matrimonial Proceedings for leave to use the Invoices in the instant proceedings, or to insist on his right to request the Defendants to disclose the Invoices by way of discovery.  I just repeat the observations that I have made in paragraphs 25 to 27 above, and the court should not therefore be deterred to make an order for discovery simply because of r. 121 of the MCR. 

35.  By reason of the aforesaid, I make an order for discovery in terms of paragraphs 1 and 2 of the 2^nd Summons and dismiss the application under the 1^st Summons.  I also make an order nisi that:

(i) the costs of the 2^nd Summons be to the Plaintiff;

(ii) the costs of the 1^st Summons be to the Defendants; and

(iii) there be certificate for counsel for the said two summonses.

The order nisi shall be made absolute 14 days after the date of the handing down of this decision. The parties agree that any application to vary the costs order shall be dealt with by the court on papers, and I therefore direct that such application shall be made in writing with full reasons given and the opposite party shall submit the written reply, if any, within 7 days thereafter.