JADE’S REALM LTD v. DIRECTOR OF LANDS for and on behalf of THE GOVERNMENT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION

HCA 1509/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1509 OF 2012

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J U D G M E N T

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Introduction

1.  This is the Defendant’s application by summons dated 18 November 2013 (“Summons”) for specific discovery and inspection of two categories of documents pursuant to RHC Order 24. The documents sought were set out in the Schedule to the Summons (“Schedule”). The application is supported by the Second Affidavit of Man Lai Ki Vickie dated 18 November 2013 (“Man 2^nd”). No affidavit in opposition has been filed by the Plaintiff.

The Plaintiff’s pleaded case

2.  As pleaded by the Plaintiff, the Hong Kong Government[1] was and is the owner of a piece of land in DD 214 (“Land”) in Nam Wai, Sai Kung, New Territories. For identification purpose, the Land is shaded yellow on a plan annexed to the amended Statement of Claim now replaced by the 8^th Schedule (“8^th Schedule Plan”).

3.  By a Block Crown Lease dated 27 March 1907, Lot Nos. 355 and 356 in DD 214 (“the Lots”) were granted to one Yau Chiu Wa and others who were members of the Yau Clan. Through a chain of assignments, the Plaintiff became the registered owner of the Lots on 7 September 2007 and has remained so ever since. For identification purpose, the Lots are shaded pink on a plan annexed to the amended Statement of Claim now replaced by the 9^th Schedule (“9^th Schedule Plan”). The Lots adjourn the Land and are completely surrounded by it.

4.  The Lots and the Land (collectively as “Enclosed Area”) are delineated by a stone wall traced purple (“Stone Wall”) on a plan annexed to the amended Statement of Claim now replaced by the 10^th Schedule (“10^th Schedule Plan”). 

5.  As pleaded in paragraph 8 of the amended Statement of Claim, between 1907 and 7 September 2007, a number of houses and structures (“Houses and Structures”) had been “constructed, completed and rebuilt” by the Plaintiff’s predecessors-in-title and the Plaintiff on the Enclosed Area. For identification purpose, the Houses and Structures are shaded green on the 10^th Schedule Plan.

6.  On the Plaintiff’s case, the Stone Wall was built in or about 1937 by the then registered owners of the Lots and members of the Yau Clan. Since not later than 1937, the Enclosed Area has been in the exclusive possession of and enjoyed by the Plaintiff’s predecessors‑in‑title and the Plaintiff as a single tenement.

7.  It is further the Plaintiff’s case that, despite changes in ownership, the predecessors-in-title of the Plaintiff continued to possess exclusively the Enclosed Area and incur money and money’s worth in the maintenance, repair and reconstruction of the Stone Wall and the Houses and Structures.  Further, since 7 September 2007, the Plaintiff has continued and still continues to occupy the Enclosed Area and incur money and money’s worth in the maintenance, repair and reconstruction of the Stone Wall and the Houses and Structures.

8.  Lastly, the Defendant is said to be estopped from denying the Plaintiff’s title of and in the Land on the ground that the construction, maintenance and repair works on the Enclosed Area were done openly but the Defendant had stood by and acquiesced in the improvements to the Land and the Lots by the predecessors-in-title of the Plaintiff and the Plaintiff itself.

9.  In the prayer for relief, the Plaintiff claims inter alia:

(1)  a Declaration that the Defendant’s title of and in the Land has been extinguished by virtue of the Limitation Ordinance;

(2)  a Declaration that the Plaintiff has acquired a squatter’s title to the Land;

(3)  a Declaration that the Lots are as identified in the 9^th Schedule Plan;

(4)  a Declaration that the Plaintiff has acquired a proprietary interest in the Land, the Stone Wall and all buildings and structures thereon and that the Defendant is estopped from exercising the Government’s right therein.

10.  The Plaintiff has also put forward a number of alternative cases with regard to the locations of the Lots and the Land. For identification purpose, these locations are colour-shaded on the plans annexed to the amended Statement of Claim now replaced by the 11^th, 12^th and 13^th Schedules. In the prayer for relief, the Plaintiff claims similar Declarations with regard to the Land and the Lots so identified.

The amended Defence and Counterclaim

11.  The Defendant disputes the Plaintiff’s claims on a number of grounds. For the present purpose, this court needs only mention five.

12.  First, the boundaries of the Lots are not as set out in the plans annexed to the amended Statement of Claim. Rather, they are as indicated on a plan annexed to the amended Defence and Counterclaim now replaced by Schedule E (“Schedule E Plan”).

13.  Second, there were acknowledgments of the Government’s title to the Land by the Plaintiff’s predecessors-in-title, including Madam Chu Kit Ha (“Madam Chu”), at various times between 1962 and 2006, so that the limitation period should be deemed to commence only on the dates of the acknowledgements pursuant to section 23 of the Limitation Ordinance.

14.  Third, the Defendant disputes the time when the Houses and Structures referred to in paragraph 8 of the amended Statement of Claim were erected. The Defendant’s pleaded case, at paragraph 10(A) of the amended Defence and Counterclaim, is that they were first seen on the dates set out below and identified on a plan annexed to the amended Defence and Counterclaim now replaced by Schedule G (“Schedule G Plan”).

Area	Date
E1a (Structure No. 1[2] in BLUE)	11 June 1972
E1b (Structure No. 1 in ORANGE)	6 February 2004
E2a (Structure No. 2)	27 December 1956
E2b (Structure No. 2)	3 October 1972
E3 (Structure No. 3)	19 February 1963
E4 (Structure No. 4)	October 1974
E5	1959
E6	3 October 1984
E7a	27 July 2008
E7b	22 November 2007

15.  Fourth, the occupation of some of the Houses and Structures ie Structures Nos. 2, 3 & 4 was allowed to continue with the Government’s consent or licence consequent upon a territory-wide stock-taking survey on squatting structures in 1982 by the Squatter Control Unit of the Housing Department and, for that reason, was not adverse.

16.  Fifth, the Plaintiff has acquired no proprietary interest in the Land. Nor is the Government estopped from exercising its rights over or taking any action in relation to the Land: in particular, the Defendant did not stand by or acquiesce in the investments in or improvements to the Houses and Structures by the Plaintiff’s predecessors-in-title and the Plaintiff.

17.  In its amended Counterclaim, the Defendant counterclaims for:

(1)  a Declaration that the boundaries of the Lots are as set out in the Schedule E Plan;

(2)  an Order for the delivery of vacation possession of the Land to the Government; and

(3)  mesne profits for the Plaintiff’s wrongful use and occupation of the Land since September 2007.

The amended Reply and Defence to Counterclaim

18.  By its amended Reply and Defence to Counterclaim dated 12 December 2013, the Plaintiff joins issue with the Defendant. At 15, the Plaintiff said it further relied upon the oral representation (“Oral Representation”) described in Schedule 3 thereof made by the Defendant, her servant or agent, to the Plaintiff’s solicitors Messrs. Wong, Hui and Co. “of intention not to take enforcement action in respect of the Land Lots or against any structures on the Land Lots or in the Land which were instrumental in the Plaintiff’s decision to purchase the Land Lots.  In the premises, the Plaintiff has acted to its detriment by relying upon such representation and the Defendant is estopped from enforcing her rights.”

19.  Schedule 3 reads:

“1.  Immediately prior to entering into a provisional sale and purchase agreement with its predecessor-in-title for the purchase of the Land Lots, the Plaintiff, through its solicitor, one Allen Che (“Mr Che”) of Wong, Hui & Co, contacted the Defendant on at least one occasion, that occasion being on the morning of 25 June 2007, by attending at the offices of the Defendant in Sai Kung, enquiring into the possibility of the Government or the Defendant taking enforcement action against the Land or any structure erected on the Land Lots and/or the Land as the Plaintiff would be concerned as to whether it would have quiet enjoyment should it complete the sale and purchase.

2.  Mr David PH Wong of Wong, Hui & Co reported back to the Plaintiff by email on the evening of 25 June 2007 in respect of Mr Che’s meeting with the Defendant’s officers and advised that Mr Che had attended at the District Lands Office, Sai Kung that morning and that, in response to Mr Che’s informal enquiry, the Land Executive in charge of land control had told Mr Che that he was not aware of any existing or planned land control action at the Land Lots or the structures on Government land in their immediate vicinity.

3.  Based upon the oral representations of the Defendant (without which the Plaintiff would not have proceeded with the purchase), the Plaintiff executed the Provisional Sale and Purchase Agreement in respect of the Land Lots and the Land on 27 June 2007, completed the purchase of the Land Lots on 7 September 2007 and incurred substantial money and money’s worth in the renovation and decoration of the Land Lots and the Land.” (emphasis added)

The Legal Principles

20.  I shall first remind myself of the principles which are germane to the present application.

(1)  There is no jurisdiction to make an order for specific discovery under RHC O 24 r 7 unless there is sufficient evidence or prima facie case that: (a) the documents or classes of documents exist which the other party has not disclosed; (b) the documents relate to a matter in issue in the action; and (c) the documents are in the possession, custody or power of the other party.  

(2)  Once it is established that those three prerequisites for jurisdiction do exist, the court has a discretion whether or not to order discovery. 

(3)  The Court will not make an order unless the discovery sought is necessary either for disposing fairly of the cause or matter or for saving costs.

(4)  The Peruvian Guano test remains the test of relevance.  A document is relevant if:

(i)  it is reasonable to suppose that it contains information which may, not must, either directly or indirectly enable the party requiring the same either to advance his own case or to damage the case of his adversary; or

(ii)  it is a document which may fairly lead the party to a train of inquiry which may have either of those two consequences.

(5)  For the purpose of discovery, the pleadings have to be looked at broadly.

(6)  The order must identify with precision the documents or categories of documents which are required to be disclosed, for otherwise the person giving discovery may find himself in serious trouble for swearing to a false affidavit, even though doing his best to give an honest disclosure.

(7)  Notwithstanding the Peruvian Guano test, “fishing” is not allowed, and discovery should not be oppressive.   

(8)  The respondent may answer an application for specific discovery by an affidavit stating that he does not have the documents, and this will be conclusive at the interlocutory stage.  

See: Hong Kong Civil Procedure 2015 Vol. 1 para. 24/7/1; Berkeley Administration Inc v McClelland [1990] FSR 381 at 382-3; Lee Nui Foon v Ocean Park Corp (No 1) [1995] 2 HKC 390 at 391-3; Paul’s  Model Art GMBH v UT Ltd [2006] 1 HKC 238 at paragraphs 24 & 32; Tai Fook Futures Ltd v Cheung Moon Hoi Jeff [2006] 4 HKC 81 at paragraphs 33 to 35; Billion Lead Investment Ltd v. Union Joyce Ltd. unrep.; HCMP 2145 of 2011; 14 December 2012; at paragraph 16; Jade’s Realm Ltd. v Director of Lands unrep.; HCA1509 of 2012; 10 June 2014; at paragraph 21.

The Documents sought

21.  I now return to the Schedule.

Paragraph (1) Documents

22.  Paragraph (1) of the Schedule reads:

“Messrs. Wong, Hui & Co. (“Wong Hui”)’s conveyancing files with respect to the sale and purchase of Lot Nos. 355 and 356 in D.D. 214 (the “Lots”) by the Plaintiff from Treasure Island (Asia) Limited (“Treasure Island”) completed on 7 September 2007 (“the Completion”), containing documents in relation to … the search on the title of the Lots conducted by Wong Hui for the Plaintiff, requisitions on the title made by Wong Hui against Treasure Island, replies to such requisitions from Treasure Island and/or its solicitors and Wong Hui’s legal advice to the Plaintiff on the title of the Lots and on the alleged oral representations set forth in Schedule 3…”.

23.  In order to properly understand the purpose and ambit of this request, it is necessary to refer to the Provisional Sale and Purchase Agreement dated 27 June 2007 (“Provisional Agreement”) between Treasure Island and two directors of the Plaintiff. By the Provisional Agreement, the subject matter of the sale was not just the Lots but also Treasure Island’s rights, title and interest in and to:

(1)  “any other land within the boundaries of the walls surrounding the [Lots]”; and

(2)  “the walls of the boundaries to such land and all structures and buildings on the [Lots] and within the said boundaries”.

24.  At least as far as the “structures and buildings” are concerned, their inclusion in the Provisional Agreement appeared to have been prompted by the advice given by Wong Hui to Mr Simon Deane of the Plaintiff in an email dated 20 June 2007 at paragraph 4.2 where it was stated that “The subject matter of the sale and purchase must include the various structures erected on Government Land”.

25.  Mr Chong, for the Plaintiff, resists this request on three grounds viz. the documents in question are (i) privileged; (ii) irrelevant; and (iii) there is no evidence to show that the same exist, given that the Plaintiff has made substantial discovery of documents.

26.  The Plaintiff’s possession, custody or power over the documents in Wong Hui’s conveyancing files is not in dispute.  Indeed, the Plaintiff has disclosed in its List of Documents filed on 13 December 2012 (“Main List”) inter alia a copy of the email dated 25 June 2007 from Wong Hui to its director Mr Simon Deane (“25 June email”) and in its Supplemental List of Documents filed on 2 December 2013 (“Supplemental List”) inter alia (i) at Section G, email correspondence among Treasure Island, the Plaintiff, Wong Hui and the estate agent dated from 4 to 27 June 2007 and a copy of the Provisional Agreement; (ii) at Section H, correspondence between Wong Hui and Treasure Island’s solicitors between 9 July and 7 September 2007, as well as one letter from Wong Hui to the Plaintiff dated 25 June 2008 enclosing the aforesaid inter‑solicitors correspondence.

27.  I shall deal with the three grounds in reverse order.

28.  As far as ground (iii) is concerned, Mr Mok for the Defendant submits that there is no question this category of documents exists.

29.  I agree.

30.  It is well-established that, in order to discharge their duty as solicitors for the Plaintiff, Wong Hui would have to investigate Treasure Island’s title to the Lots, the Land and the Houses and Structures and advise the Plaintiff accordingly. Matters canvassed by such title investigations would likely include the proper boundaries of the Lots, whether Treasure Island’s title to the Lots, the Land and the Houses and Structures was satisfactory and whether the Land and the Houses and Structures, in so far as they are situated outside the boundary of the Lots, would be liable to enforcement actions by the Government.

31.  While the Plaintiff has disclosed the 25 June email, it is inconceivable that Wong Hui’s investigation on title would consist of only one “informal” inquiry with a Land Executive at the District Lands Office, Sai Kung prior to the Provisional Agreement. Given that Mr Simon Deane, director of the Plaintiff, is a solicitor himself, it is also inconceivable that the Plaintiff would be satisfied with Wong Hui’s investigation on title if it only consisted of one such “informal” inquiry. A fortiori, when the purchase price payable by the Plaintiff to Treasure Island was HK$19.8 million, not an insignificant sum by any measure.

32.  It is common practice for conveyancing solicitors to keep in a file contemporaneous correspondence with clients, contemporaneous correspondence with the solicitors on the opposite side, requisitions on title, answers to requisitions, attendance notes and so on which would be the best evidence of the work done by the solicitors in the discharge of their duty to clients. Of course, it varies from solicitor to solicitor as to how detailed the file is kept but the maintenance of such a file cannot reasonably be disputed. In so far as I can ascertain from the face of the Main List, the Supplemental List and the documents in the hearing bundles, the Plaintiff has not disclosed (i) drafts or engrossed copies of the formal Sale and Purchase Agreement or the Deed of Assignment; (ii) its communications with Wong Hui after 27 June 2007; (iii) Wong Hui’s attendance notes (which would record their contact/ conversation with the Plaintiff, Treasure Island’s solicitors and the Sai Kung District Lands Office); or (iv) documents containing Wong Hui’s advice on title.

33.  Importantly, as submitted by Mr Mok, the clearest sign that the Plaintiff has made incomplete discovery is that there was a change of the subject matter of the sale after the signing of the Provisional Agreement:

(1)  As I said in paragraph 23 above, in the Provisional Agreement, the subject matter of the sale was not just the Lots, but also included Treasure Island’s rights title and interest in and to any other land and all structures within the boundaries of the Stone Wall.

(2)  However, as revealed in the 1-page enclosure to a fax message from Wong Hui to Treasure Island’s solicitors dated 7 September 2007, the description of “The Property” at page 7 of the formal Sale and Purchase Agreement, and hence the subject matter of the sale, was confined to the Lots only.

34.  If that was the case, it is likely that there would be negotiations and communications between Treasure Island and the Plaintiff leading to their agreement to revise the subject matter of the sale, as well as communications between the Plaintiff and Wong Hui recording the Plaintiff’s instructions concerning the change. Given that it was Wong Hui’s original advice that the “structures and buildings” erected on Government Land must be included in the Provisional Agreement, it is also likely that the Plaintiff would have sought and obtained Wong Hui’s advice on the change to the subject matter of the sale. None of these have been disclosed by the Plaintiff.

35.  In these circumstances, I am satisfied that there is a prima facie case that Paragraph (1) documents exist which the Plaintiff has not fully disclosed.

36.  As far as ground (ii) is concerned, Mr Chong submits at paragraph 16 of his Skeleton that it is difficult to see how discovery of Paragraph (1) documents would assist in the resolution of the issues arisen from the plea of Oral Representation and estoppel.

37.  With respect, I do not share Mr Chong’s difficulty.

38.  In light of the original subject matter of the sale in the Provisional Agreement, the subsequent change to the description of “Property” in the formal Sale and Purchase Agreement, as well as the Plaintiff’s pleas of adverse possession, Oral Representation and estoppel, in  my view, documents in Wong Hui’s conveyancing files would prima facie be relevant to the following matters :

(1)  What rights, if any, did Treasure Island have or claim to have over the Land and the Houses and Structures within the Stone Wall in respect of which it purported to sell under the Provisional Agreement ?

(2)  What inquiries have Wong Hui made to verify the existence of such rights which Treasure Island purported to sell ?

(3)  What was Wong Hui’s advice to the Plaintiff concerning such rights which Treasure Island purported to sell ?

(4)  Whether in response to Mr Che’s “informal enquiry” on 25 June 2007, the Land Executive at the District Lands Office, Sai Kung, did make the Oral Representation ?

(5)  If the Land Executive did make the Oral Representation,

(i)  what “land control action” was meant to be encompassed by the representation ?

(ii)  did it amount to a representation that the Government would refrain indefinitely from taking any legal action in relation to the Land and the Houses and Structures;

(iii)  was it intended to be relied on by the Plaintiff ?

(iv)  what was Wong Hui’s advice to the Plaintiff concerning the status of such “informal enquiry” and the effect of the Oral Representation ?

(v)  did the Plaintiff in fact rely on the Oral Representation in entering into the Provisional Agreement ?

(6)  Whether Wong Hui have made further inquiries the District Lands Office, Sai Kung, after the signing of the Provisional Agreement on 27 June 2007 and if yes, the result of such further inquiries and what was Wong Hui’s advice to the Plaintiff in relation thereto ?

(7)  What prompted the change in the subject matter of the sale after the signing of the Provisional Agreement on 27 June 2007 ?

(8)  Whether the Plaintiff continued to rely on the Oral Representation after 27 June 2007 in completing the sale and purchase and incurring money on the maintenance, repair and reconstruction of the Stone Wall and the Houses and Structures ?

39.  In my judgment, it is reasonable to suppose that Wong Hui’s conveyancing files would contain information which may directly or indirectly enable the Defendant to damage the Plaintiff’s case on Oral Representation and estoppel or may fairly lead the Defendant to a train of inquiry which may do so.

40.  Take one simple example. In a letter dated 20 June 2008 from Wong Hui, as solicitors for the Plaintiff, to the Lands Department, it was stated that the Plaintiff had “acquired a possessory title over the area of Government land currently enclosed by a wall” and that “According to in depth enquiries” made before completing the purchase in September 2007, “this portion of land has, for well over 60 years, been enclosed and used for the exclusive use and enjoyment of the previous owners of the Lots”.  Such statements made by Wong Hui on behalf of the Plaintiff may or may not be entirely correct, but unless contemporaneous documents evidencing such enquiries are disclosed, it will be difficult for the Defendant to assess the veracity of such statements. Suppose the files contain attendance notes evidencing further or “formal” inquiries made by Wong Hui with the District Lands Office, Sai Kung after 27 June 2007. The answers given to such “formal” inquiries may disclaim or qualify the Oral Representation said to have been made in the morning of 25 June 2007 or otherwise shed light on the plea that the Plaintiff had relied on the Oral Representation in completing the sale and purchase and incurred money on the maintenance, repair and reconstruction of the Stone Wall and the Houses and Structures.

41.  Take another example. Suppose the files contain communications between Treasure Island and the Plaintiff after 27 June 2007 which explained the change to the subject matter of the sale. Such communications may reveal that Treasure Island disclaimed any possessory title to the Land, that part of the Houses and Structures situated outside the boundary of the Lots or simply the Plaintiff questioned whether, apart from the Lots, Treasure Island had any rights to sell. If so, such communications would clearly be relevant to whether the Plaintiff did rely and reasonably relied on the Oral Representation in proceeding to completion and continue to incur money on the maintenance, repair and reconstruction of the Stone Wall and the Houses and Structures.

42.  For these reasons, I am satisfied that Paragraph (1) documents are prima facie relevant to the matters in issue as stated in paragraph 38 above and, subject to the question of privilege, should be disclosed.

43.  I now come to the question of privilege.

44.  Mr Chong submits in paragraphs 16 and 17 of his skeleton that “legal advice [given by Wong Hui] falls within the category of class of documents privileged from discovery” and “It is absurd to suggest that discovery of communications between solicitor and client (the report from Messrs Wong Hui & Co aforesaid) would mean waiver of all documents falling with the privilege.  It is well-settled law that waiver of one privilege document is not waiver of the rest.”

45.  It is well-established that legal professional privilege (“LPP”) is a fundamental human right long established in the common law. In Hong Kong, LPP is constitutionally guaranteed by Article 35 of the Basic Law: Goldlion Properties Ltd v Regent National Enterprises Ltd. [2006] 1 HKLRD 793; Akai Holding Ltd v Ernst & Young (a Hong Kong firm) [2009] 12 HKCFA 649; Secretary for Justice v Florence Tsang Chiu Wing & Ors unrep.; FACV No. 5 & 6 of 2014; 6 November 2014; Ma CJ, Ribeiro, Tang & Fok PJJ, Spigelman NPJ.

46.  It is also not in dispute that prima facie LPP would have attached to a large number, though not necessarily all, of Paragraph (1) documents, either because they convey legal advice from Wong Hui to the Plaintiff or they contain information and a specific request from the Plaintiff to Wong Hui for legal advice: Balabel v Air India [1988] Ch 317. As stated by Taylor LJ in Balabel v Air India at 330, the test is “whether the communication or other document was made confidentially for the purposes of legal advice”.

47.  The critical question, for the present purpose, is whether the privilege which would have attached to such of those Paragraph (1) documents has been waived by the Plaintiff.

48.  As far as express waiver is concerned, the test is as stated by Lord Bingham of Cornhill CJ in Paragon Finance Plc v Freshfields [1999] 1 WLR 1183 at 1188C:

“A client expressly waives his legal professional privilege when he elects to disclose communications which the privilege would entitle him not to disclose. Where the disclosure is partial, issues may arise on the scope of the waiver....But the law is clear. While there is no rule that a party who waives privilege in relation to one communication is taken to waive privilege in relation to all, a party may not waive privilege in such a partial and selective manner that unfairness or misunderstanding may result.” (emphasis added)

49.  That passage was quoted by Woo V-P in Goldlion Properties Ltd v Regent National Enterprises Ltd. at paragraph 35 with approval.

50.  But privilege may also be waived other than expressly. The question here is whether a party who chooses to waive privilege in relation to some documents should be obliged to disclose other documents so as to prevent the court and his opponent from being given only a partial picture.

51.  In this regard, the following observations by Mustill J (as he then was) in Nea Karteria Maritime Co v Atlantic & Great Lakes Steamship Corp. [1981] Com. LR 132, 138 (referred to in paragraph 21 of Goldlion Properties Ltd v Regent National Enterprises Ltd.)are pertinent:

“Where a person is deploying in court material which would otherwise be privileged, the opposite party and the court must have the opportunity of satisfying themselves that what the party has chosen to release from privilege represents the whole of the material relevant to the issue in question. To allow an individual item to be plucked out of context would be to risk injustice through its real weight or meaning being misunderstood.” (emphasis added)

52.  At paragraph 48, Woo V-P observed that: 

“Fairness on the opposite party has been the basis for the courts to hold for a waiver of the privilege: see Derby & Company Ltd v Weldon (No. 10) [1991] 1 WLR 660, Burnell v BTC [1956] 1 QB 187 and Wing Fai Construction Co Ltd v Benefit Holdings; unrep.; HCA No. 810 of 2003)”.

53.  Of similar effect are the observations by Elias J (as he then was) in Brennan v Sunderland City Council [2009] ICR 479 at [62] & [67]:

“62. We begin with the observation that the underlying principle here is fairness. We agree with Mr Engelman that it is also inconsistency – waiving where it suits and claiming privilege where it does not – but the test for determining whether there is such inconsistency as would warrant a finding of waiver is fairness.

…

67. However, in our view, the answer to the question whether waiver has occurred or not depends upon considering together both what has been disclosed, and the circumstances in which disclosure has occurred. As to the latter, the authorities in England strongly support the view that a degree of reliance is required before waiver arises, but there may be issues as to the extent of the reliance. Ultimately, there is the single composite question of whether, having regard to these considerations, fairness requires that the full advice be made available. A court might, for example, find it difficult to say what side of the contents/effect line a particular disclosure falls, but the answer to whether there has been waiver may be easier to discern if the focus is on the question whether fairness requires full disclosure.” (emphasis added)

54.  Applying the test of fairness, this court is of the firm view that fairness dictates that there should be full discovery of Paragraph (1) documents albeit that they contain privileged communications between the Plaintiff and Wong Hui for the purposes of legal advice. The reasons are these.

55.  This court has already referred to paragraph 15 as well as Schedule 3 of the amended Reply and Defence to Counterclaim. It is clear that the Plaintiff has relied on the result of the “informal” inquiries made by Wong Hui with the District Land Office, Sai Kung, and communicated to it on 25 June 2007 in support of its pleas of Oral Representation, reliance and estoppel. In other words, the Plaintiff has deployed part of its communications with Wong Hui to advance its own case in the present action.

56.  However, from the other privileged communications disclosed by the Plaintiff, it is likely that Wong Hui’s inquiries with the District Land Office were not confined to the general “informal” inquiries recorded in the 25 June email, but would include another kind of inquiries viz. more “specific” inquiries in relation to the Lots which could be conducted with Treasure Island’s authorization and which might be more fruitful for the Plaintiff: see email dated 21 June 2007 from Wong Hui to the Plaintiff. Further, in light of Wong Hui’s duty as solicitors for the Plaintiff in the conveyancing transaction and for the reasons set out in paragraphs 30‑31 above, it is most unlikely that Wong Hui’s inquiries and investigation on title would completely cease after the email on 25 June 2007.  If that is the case, then prima facie there would be further communications between Wong Hui and the Plaintiff after 25 June 2007 which contained the former’s advice on title.

57.  Adopting the reasoning of Woo V-P in Goldlion Properties Ltd v Regent National Enterprises Ltd. at paragraph 59, it seems to me that it would create unfairness to the Defendant if the Plaintiff were to be allowed to deploy the disclosed portions of Wong Hui’s advice to its advantage but to claim privilege in respect of the advice given after 27 June 2007 unless Wong Hui’s advice in its entirety is disclosed to the Defendant and the court to ensure that there is no "cherry picking”. This unfairness is all the more critical since on the Plaintiff’s own case, it relied on the Oral Representation not merely in entering into the Provisional Agreement on 27  June 2007. Its case is that it relied on the Oral Representation in completing the sale and purchase in September 2007 and in incurring money thereafter in the maintenance of the Stone Wall and the House and Structures. Hence, Wong Hui’s inquiries and investigation on title and their advice to the Plaintiff after 27 June 2007 would directly impinge upon the veracity of the Plaintiff’s case of reliance on the Oral Representation.

58.  If, as submitted by Mr Mok, Wong Hui had subsequent to the 25 June email advised the Plaintiff that the District Land Office’s response to “informal” enquiries could not be relied upon or taken as firm indication that no future enforcement actions would be taken by the Government, it would be grossly unfair to the Defendant if the Plaintiff were allowed to cherry‑pick and withhold such advice on the ground of privilege. Indeed, it would be a gross travesty of justice if the Plaintiff were so allowed.

59.  To conclude, for the above reasons, I would reject all the Plaintiff’s grounds of opposition and allow this part of the application.

Paragraph (2) of the Schedule

60.  Paragraph (2) of the Schedule reads:

“A full set of the negotiations, communications and correspondences exchanged between Treasure Island and the Plaintiff in relation to the sale and purchase of the Lots and pertaining to the matters covered by Document No. 134 of the Plaintiff’s List of Documents filed on 13 December 2012, namely, the “Project Summary in relation to renovation work on 98 Nam Wai, including surveys showing fish farm dated 11 September 2006, by Treasure Island (Asia) Limited” dated 1 January 2009.”

61.  As clarified by Mr Mok in court, what the Defendant seeks in the first part of Paragraph (2) ie “A full set of the negotiations, communications and correspondences exchanged between Treasure Island and the Plaintiff in relation to the sale and purchase of the Lots”are contemporaneous communications between the Plaintiff and Treasure Island which recorded the Plaintiff’s efforts in investigating title from Treasure Island in 2007. According to Mr Mok, from the documents already disclosed by the Plaintiff, it would appear that the Plaintiff had made some investigations on “what happened on the ground”, so to speak.

62.  As to the second part of Paragraph (2) ie the matters covered by Document no. 134 (“Project Summary”), Mr Mok submitted that they would encompass investigations on the rights of Treasure Island, if any, in  relation to the Land and the enforcement action taken by the Government. One such enforcement action was mentioned in the Project Summary ie a Building Order no. CWP/S1/93566/03/NT which had been withdrawn on 3 October 2006. Mr Mok stressed to this court that while the Project Summary was dated 1 January 2009 ie well after completion of the sale, what was sought was not negotiations, communications etc between the Plaintiff and Treasure Island in relation to the obtaining of the Project Summary from Treasure Island, but in relation to the matters covered by it.

63.  The Defendant resists this part of the application on the ground of irrelevance and that there is no evidence to show that Paragraph (2) documents exist which have not been disclosed.

64.  Again dealing with the two grounds in reverse order, I am satisfied that prima facie the Plaintiff had made efforts in investigating title from Treasure Island prior to completion in September 2007 and there exist written communications between the Plaintiff and Treasure Island recording the same which have not been fully disclosed.

65.  A number of examples have been given in Mr Mok’s skeleton. Take Document 144, for instance, which is a reply email dated 11 June 2007 from Mr Billson of Treasure Island to the estate agent which referred to inter alia “the brief”. Neither the preceding email from the estate agent to Treasure Island nor “the brief” has been disclosed. Take Document 147 as another example which is an email dated 13 June 2007 from Mr Simon Deane of the Plaintiff to Mr Billson of Treasure Island. The email referred to “copy materials attached that you sent to us” on the basis of which Mr Deane asked for the status of the boundary correction regarding the Lots and whether the Government acknowledged that they included the new boundaries. The Plaintiff has not disclosed the “copy materials attached” or the covering email from Mr Billson to Mr Deane. Lastly, Document 155 is an email dated 14 June 2007 from Mr Deane to Mr Billson. Its first paragraph reads: “All the points about boundaries are coming out now with the valuations from the banks, including CITIC and BOC”. Neither the valuations from the banks nor the points about the boundaries as raised by them have been disclosed.

66.  As far as relevance is concerned, in my view, the Plaintiff’s negotiations and communications with Treasure Island up to completion in September 2007 would shed light on inter alia what rights, if any, did Treasure Island have or claim to have over the Land and the Houses and Structures within the Stone Wall in respect of which it purported to sell under the Provisional Agreement and the cause for the change to the subject matter of the sale. Further, the Plaintiff’s own efforts in investigating the boundary of the Lots and Treasure Island’s title to the Land and the Houses and Structures would at least be relevant to the questions (i) whether the Plaintiff did rely on the Oral Representation in not just entering into the Provisional Agreement, but in completing the sale and incurring money on the maintenance, repair and reconstruction of the Stone Wall and the Houses and Structures and (ii) whether it was reasonable for the Plaintiff to do so.

67.  For the above reasons, I am satisfied that there should be an order for discovery and inspection in terms of the 1^st part of Paragraph (2) ie “A full set of the negotiations, communications and correspondences exchanged between Treasure Island and the Plaintiff in relation to the sale and purchase of the Lots”.

68.  In my view, an order for discovery and inspection in terms of the 2^nd part of Paragraph (2) is redundant and unjustified.  It is redundant in so far as matters covered by the Project Summary are also covered by the contemporaneous negotiations, communications and correspondences exchanged between Treasure Island and the Plaintiff in relation to the sale and purchase.  It is unjustified in so far as the Project Summary also contains details of the renovation works carried out by Treasure Island’s contractor between November 2006 and April 2007, as set out in section 4.0 thereof.  Details of such renovation works have no or only minimal relevance to the issues in this action.  Further, it is my view that discovery of documents pertaining to such works e.g. Treasure Island’s contract with the contractor, invoices and receipts etc which are, strictly speaking, within the 2^nd part of Paragraph (2), is unnecessary for disposing fairly of the cause or matter or for saving costs.

Disposition and Costs Order nisi

69.  In the exercise of its discretion, this court hereby allows the Defendant’s application and grants an order in terms of paragraphs 1 and 2 of the Summons, save and except that Paragraph (2) of the Schedule to the Summons should be limited to the 1^st part as indicated in paragraph 67 above.

70.  There shall be an order nisi that costs be to the Defendant, to be taxed if not agreed, with certificate for 1 Counsel and paid forthwith.