LAU ONG UI v. LAU CHI HUNG and Others

1992, No. A2289

IN THE SUPREME COURT OF HONG KONG

IN THE HIGH COURT

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JUDGMENT

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1. There is litigation between the plaintiff and the defendants over a partnership and the plaintiff's interest in that partnership.

2. On the 23 February 1995, the plaintiff issued a summons claiming an order under Order 29 and the inherent jurisdiction of this court that the first defendant deliver to the plaintiff's solicitors the originals of two documents - a notice (the notice) given by the second and third defendants to the first defendant dated 31 July 1991 and a deed (the deed) dated 3 September 1991 - "for observation to be made and/or experiment to be tried on or with the said original documents by the Plaintiff's experts as to their authenticity".

3. One of the claims by the plaintiff against the defendants in the main litigation is for a declaration that a purported dissolution of the partnership and a purported sale by the first defendant to the other defendants of the plaintiff's beneficial interest in a one-sixth share of the partnership are null and void and not binding on the plaintiff. According to an affirmation filed on behalf of the plaintiff in support of the summons, this purported dissolution and sale were disclosed to the plaintiff "at a late stage . . . and in circumstances which should be described as dubious". Copies of letters exchanged between the parties are produced. It is said that - "From these letter one is bound to form the view that the Notice . . . and the Deed . . . are of dubious origins". The plaintiff produces some examination reports by a forensic science expert relating to the notice and the deed. It is alleged that - "In view of the comments made therein and the dubious character of the said Notice and the said Deed, it is respectfully submitted that it is necessary or expedient for the purpose of obtaining full information or evidence in this action that the 1st Defendant be ordered to deliver to my firm the originals of the said Notice and the said Deed for observation to be made and/or to be tried on or with the same."

4. The defendants have not sought to deny any of the evidence produced by the plaintiff.

5. I have read the correspondence produced by the plaintiff. On 20 May 1991, the plaintiff's solicitors wrote to the first defendant asserting the plaintiff's interest in the partnership. The first defendant's solicitors responded substantively on 6 June 1991 and did not deny the plaintiff's allegations. Then followed correspondence between 5 July 1991 and 6 August 1991 in which the plaintiff sought the tax returns relating to the partnership and the first defendant resisted this request. On 12 September 1991, the plaintiff's solicitors wrote to the second and third defendants notifying them of the plaintiff's interest in the partnership. On the same day, the plaintiff's solicitors wrote to the first defendant's solicitors saying that their client had received a letter from the first defendant saying that their joint interest "has been or is about to be disposed of in favour of the other two partners". The plaintiff demanded a hold on the proposed transaction. The first defendant's solicitors replied to this letter on 13 September 1991 requesting "authority" for the proposition that the plaintiff's consent was required for the disposal. Further correspondence followed until, on 26 November 1991, the first defendant's solicitors said - "An update account up to the date of our client being expelled from the said firm will be supplied to your client as soon as it is available". This was the first time the first defendant's solicitors mentioned that the first defendant had been "expelled". The plaintiff's solicitors challenged this expulsion and expressed that they were suspicious about the first defendant's conduct. They suggested that the expulsion was a "sham". On 2 December 1991, the first defendant's solicitors repeated that the first defendant had been expelled. On 6 December, 1991, the plaintiff's solicitors pointed out that the partnership deed provided only for dissolution of the partnership in certain circumstances, not expulsion. On 13 December 1991, the first defendant's solicitors sent a copy of the notice to the plaintiff's solicitors, saying that the first defendant took the stand that the partnership was validly terminated on 31 August 1991. There followed correspondence between the plaintiff's solicitors and the first defendant's solicitors in which the plaintiff's solicitors expressed their unhappiness with the situation and the first defendant's solicitors defended their client's position. Then, on 10 January 1992, the first defendant's solicitors sent a copy of the deed to the plaintiff's solicitors. On 27 January 1992, the first defendant's solicitors said that they had no further instructions from their client. The plaintiff's solicitors wrote directly to the first defendant on 24 February 1992, and also to the second and third defendants. On 3 March 1992, the second and third defendants replied by letter.

6. In her report dated 23 April 1993, the forensic scientist says that it is highly likely that this letter dated 3 March 1992 was typed on the same machine as the machine used to type a letter dated 29 May 1992 purporting to emanate from the first defendant's solicitors. In a report dated 8 November 1993, the scientist says she compared photocopies of the notice and the deed. She said that the fact that the documents were copies enabled her to base her opinion only on the design of the letters. She said that it appeared to her that the documents were produced on the same or the same brand of typewriter or word processor. She concluded that, to reach a more definitive conclusion, an examination of the original documents would be necessary. In a further report dated 15 July 1994, the scientist comments that she compared copies of the notice, the deed and letters purporting to emanate from the first defendant's solicitors. She reported that it was possible that the same printer was used to produce all these documents, but, before a more definitive conclusion could be reached, it was necessary to examine the originals of the notice and the deed.

7. In my view, the plaintiff is quite right to be suspicious about the conduct of the defendants in this matter. It is suggested that the first defendant was given notice of dissolution of the partnership on 31 July 1991. But the first defendant makes no mention of this notice until 31 December 1991, and only after the plaintiff expressed suspicions about the expulsion mentioned for the first time on 26 November 1991; that it was a "sham". And the deed, purportedly executed on 3 September 1991, is produced only on 10 January 1992, and only after, on 6 December, 1991, the plaintiff's solicitors pointed out that the partnership deed provided only for dissolution of the partnership in certain circumstances, not expulsion. It is also to be noted that the first defendant's solicitors produced the notice and the deed in an off-hand, by-the-way attitude, as if no explanation was required of this strange conduct.

8. The defendants seek to create the impression that the first defendant, on the one hand, and the second and third defendants, on the other, are acting independently and at arm's length. If it is so that the notice dated 31 July 1991 purporting to have been given by the second and third defendants to the first defendant and the deed dated 3 September 1991, prepared, on the face of it, by the first defendant's solicitors, and documents purporting to emanate from the second and third defendants personally and a letter from the first defendant's solicitors, all came from the same source, and there is good reason for believing that this may be so, there is cause for suspicion that they are, in fact, acting together against the plaintiff. Of course, there is no reason why they should not act together to protect their common interests, but one would expect that they would be frank about this and explain what has happened. The fact that they have no sought to do so, inclines me to think that there may well be some sinister motive for joint action; perhaps to conceal the true facts and invent others that now suit the purposes of all of the defendants.

9. Mr Tso, who appeared for the first defendant, was able to advance no good reason why the documents should not be handed over for examination. He said that his client resisted the order only because, as I understood him, his client was unhappy with the plaintiff's attitude in this matter. Mr Tso did try to suggest that the originals of the documents had some intrinsic value, but when I pointed out that they were not bank-notes or original oil-paintings, and that their only value lay in what they said - and this was clear - he did not pursue this submission.

10. In these circumstances, I believe that the forensic scientist should have the opportunity of examining the originals of the notice and the deed. Under the rules and the court's inherent jurisdiction, I have the power allow this to be done to ensure that the ends of justice are met in this litigation. I order that the first defendant, or his solicitors or agents, hand over the originals of the notice and the deed to the plaintiff's solicitors for examination and tests. Once this has been done, the originals of these documents shall be delivered to the court for safe-keeping. If necessary, I will give any further directions required to implement this order.

11. The costs of this application be the plaintiff's costs in the cause in any event.

12. I should record that, although I have shown below that the second and third defendants were not represented and did not appear, after the hearing of this matter had concluded, my clerk reported to me that a solicitor saying she represented the second and third defendants had spoken to her. The solicitor said she had arrived late. She did not make herself known to me and seek to be heard.

(J.K. FINDLAY)

Judge of the High Court