TANG HIN FAI AND ANOTHER v. TANG HIN LUNG AND OTHERS

HCMP 1610/2017

[2023] HKCFI 724

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1610 OF 2017

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DECISION

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INTRODUCTION

1.  This is the 2^nd defendant’s application for discovery against a non-party, Century 21 On Hing Property Consultants Limited (“the respondent”).  The application was made by virtue of a summons filed on 20 February 2023 (“the Summons”). 

BACKGROUND OF THE DISPUTE

2.  This action concerns a property in Beverly Garden, 1 Tong Ming Street, Tseung Kwan O, Sai Kung, New Territories (“the Property”).  At all material times, the plaintiffs were and are the registered owners thereof. 

3.  The 1^st plaintiff and the 2^nd plaintiff are husband and wife.

4.  The 1^st plaintiff and the 1^st defendant are brothers.

5.  The 2^nd defendant is the 1^st defendant’s wife, and the 3^rd and 4^th defendants are the children of the 1^st and 2^nd defendants.

6.  The plaintiffs alleged that pursuant to an oral agreement reached orally in 2003, they had granted a licence orally to the 1^st defendant and his immediate family members (i.e. the 2^nd, 3^rd and 4^th defendants) to occupy the Property until they were requested by the plaintiffs to vacate the Property.  The plaintiffs further alleged that as the defendants had failed to vacate the Property despite the termination of the said licence in 2017, they therefore claim herein for, among other reliefs, vacant possession of the Property.

7.  The defendants, on the other hand, asserted that what they were granted orally in 2003 was not a licence to occupy the Property, but ownership of the Property on consideration that the 1^st defendant shall pay off, inter alia, the then outstanding amount of the mortgage loan which the plaintiffs obtained for the purchase of the Property.

8.  The main issue in this action is therefore the precise terms of the oral agreement which the parties reached in 2003.

PROCEDURAL BACKGROUND

9.  This action was commenced by way of Originating Summons in July 2017, and was ordered on 30 July 2018 to carry on as if begun by writ.  Pleadings, list of documents and witness statements were then filed/exchanged according to usual case management directions.

10.  The deadline for the parties to take out further interlocutory applications upon seeking counsel’s advice initially fell on 23 November 2020.  Such a deadline was subsequently postponed, firstly to 12 April 2021, and then to 25 January 2022.

11.  Upon parties’ confirmation that they were ready for trial, leave to set this case down for trial was granted on 31 May 2022. 

12.  The action was set down for trial accordingly, and the trial has been fixed to commence on 20 March 2023, with 7 days reserved. 

13.  In preparation thereof, a PTR has been held on 2 November 2022, in which the plaintiffs had been directed to lodge and serve their opening submissions by 6 March 2023 (yesterday).

14.  As aforesaid, on 20 February 2023, the 2^nd defendant filed the Summons and asked for a discovery order against the respondent.

THE DISCOVERY APPLICATION

Background

15.  What the 2^nd defendant is now asking for is the disclosure by the respondent of the listing records in relation to the Property (“the Listing Records”) from 2002 to 2004.

16.  In her 3^rd Affirmation, the 2^nd defendant explained, among other things, that:

(1)  On 27 January 2023, she had had a gathering with some friends whom she had known for a long time, and one of them (“the Friend”) is an estate agent working in the Tseung Kwan O District.  The Friend informed her that according to her knowledge, the plaintiffs had attempted to sell the Property in the open market via the respondent in 2003, and it was very probable that such a record could still be found in the respondent’s computer system;

(2)  This latest information was different from her understanding all along, as she and the 1^st defendant always thought that, while the plaintiffs initially intended to sell the Property through estate agent, the plaintiffs had never actually put the Property up for sale through any estate agent.  Neither did she ever imagine that the relevant estate agent would keep such a record for as long as 20 years;

(3)  She therefore went to the Tseung Kwan O Branch of the respondent on 28 January 2023 and made enquiry on the matter.  She was informed by an estate agent thereat that:

(a)  There was indeed a record in the respondent’s computer system showing that the 1^st plaintiff had put up the Property for sale through the respondent and that the 1^st plaintiff had subsequently withdrawn his instruction given to the respondent for the reason that he had sold the Property to his brother (“the Subject Computer Records”);

(b)  The respondent would not release the Subject Computer Records to the 2^nd defendant without a court order in the light of the respondent’s personal data policy.

Applicable legal principles

Discovery application against non-party

17.  Section 42 of the High Court Ordinance (Cap.4, Laws of Hong Kong) (“HCO”) and Order 24 rule 7A(2) of the Rules of the High Court (Cap.4A, Laws of Hong Kong)  (“RHC”) confer jurisdiction upon the Court to order a non-party to disclose documents which are relevant to an issue arising out of a claim made within the extant proceedings.  The applicant has to meet the following requirements:

(1)  the non-party is likely to have the documents in his possession, custody or power (section 42(1) of the HCO; Order 24 rule 7A(3)(b) of the RHC);

(2)  the documents sought are relevant to an issue arising or likely to arise in the proceedings (section 42(1) of the HCO; Order 24 rule 7A(3)(b) of the RHC); and

(3)  the order is necessary either for disposing fairly of the cause or matter or for saving costs (Order 24 rule 8(2) of the RHC).[1]

18.  It is trite that the test for relevance is the Peruvian Guano test. 

Late applications

19.  There is no dispute that this is a very late application, as the trial has been scheduled to commence in less than 2 weeks’ time (on 20 March 2023).  In this regard, what was said by Mimmie Chan J in Converge Design and Construction Company Limited v Mount Kelly International Limited [2020] HKCFI 2433 should be borne in mind:

“2. The courts have emphasized on repeated occasions that CJR is about early preparation for trial, in order to achieve the objectives of the Rules. It needs no further reminder that delay itself is a ground to refuse a late application, either for discovery or for the introduction of new pleadings and evidence, when trial is imminent. The onus is on the applicant to justify its delay and to show good reason for leave to be granted. Whilst delay is to be weighed against the probative value and relevance of the pleadings and the evidence sought to be introduced, it need not be emphasized further that the primary aim in the Court’s exercise of its powers is to secure the just resolution of disputes in accordance with the substantive rights of the parties. Such just resolution of disputes requires due consideration of the time occasioned by last minute applications to introduce amendments to the pleadings and/or evidence on the eve of trial. Prejudice is inevitably caused, in the disruptions in the preparation for trial, the need to consider the new evidence and the need to respond thereto, coupled with the need to locate witnesses at the last minute to consider and if necessary to respond to the new evidence, and the last minute distraction from the proper focus and priority of the due preparation for trial. This is actual prejudice.

[…]

9.         As for lists of documents and discovery made on the eve of trial, it is for the litigant giving discovery at the eleventh hour to establish why the Court should exercise its discretion to permit the late discovery (Hong Lok School Limited v Chow Sai Yiu, HCA 17139/1999, 7 July 2003 and Big Island Construction (HK) Limited v Wu Yi Development Company Limited, HCA 1957/2005, 22 February 2010).  Absent a good and credible explanation, by affidavit, as to why the document was not disclosed earlier, the application may be refused on the ground of delay alone.  Even if there are documents hitherto disclosed, but were not referred to in the witness statements filed for trial, there should be affidavit evidence as to the use proposed to be made of the documents in question, the provenance and the maker of the document, its relevance to the issues before the Court, and the availability or otherwise of the maker of the document to attend trial for cross-examination.  Clearly, this is all to ensure that the opponent in the litigation can fairly prepare for trial, and to enable the Court to properly exercise its discretion in dealing with objections from the opponent.”

20.  This Court’s attention has also been drawn to the case of Civic Limited v 余綺妙 & Others (HCA 225/2011, unreported, 12 July 2013), in which DHCJ M Ng (as her Ladyship then was) followed the approach in Liu Chen v Chan Poon Wing & Another (HCPI 779/2006, unreported, 7 October 2009) and held that whether a court will allow a late application for further discovery[2] is a balancing exercise and the considerations of the court are largely three-fold:

(1)  the merits of the proposed application, ie whether the application if granted will assist the court in securing “the just resolution of disputes in accordance with the substantive rights of the parties” (see Order 1A rule 2(2) of the Rules of the High Court;

(2)  the presence or absence of any real prejudice to the other party;

(3)  any conscious flouting of rules of court, practice directions and/or case management timetables, or any over-reaching or deliberate manoeuvring on the part of the applicant.

DISCUSSION

21.  While it appears to me that the Listing Records are relevant and that the respondent is indeed in possession of such records, I am of the view that the Court should not exercise its discretion in allowing this application for the following reasons:

(1)  I do not accept that the 2^nd defendant has shown any good reason that the application should be allowed despite the delay.  As aforesaid, this action has been started for a long time.  However, it did not occur to the 2^nd defendant that she had to make enquiry with the respondent in all these years (if she had done so, it would be more likely than not that she would have been informed about the Subject Computer Records once the enquiry was made, just like what happened on 28 January 2023). She explained that she did not make any enquiry in the past because it had all along been her understanding that the plaintiff had never attempted to sell the Property in the open market.  If such an understanding came from the plaintiffs in around 2003, then the question is, why did she still believe in the plaintiffs in the light of her allegation that they have broken their promise. On the other hand, if the said understanding did not come from the plaintiffs but was just the 2^nd defendant’s own assumption, then she only has herself to blame.  In short, what she is now saying in effect is that she had now come to realise a new way to prove her case which she did not think of previously.  I do not think that is a good reason for the delay at all;

(2)  While the respondent has indicated by its solicitors’ letter dated 6 March 2023 (“the respondent’s Letter”) that it has no objection against the application, it has not informed the Court when it will be able to disclose the Subject Computer Records if a court order is made.  Ms Chan for the 2^nd defendant suggested that the court should only allow 3 days for the respondent to comply with the discovery order.  Even assuming that the respondent is able to comply with the court order accordingly, when the document is made available to the parties, there will only be slightly more than a week left before the trial begins.  It is highly undesirable;

(3)  At the moment, there is no information on who actually typed up the Subject Computer Records in the respondent’s computer system and whether the person who did the input had had direct conversation with the 1^st plaintiff in 2003 (in other words, whether it involved multiple hearsay).  As a matter of fairness, if the 2^nd defendant is allowed to rely on the Subject Computer Records, the plaintiffs should be given an adequate chance to investigate further into the matter, so that, if necessary, they can, for example, subpoena the relevant witness(es) to give evidence at the trial and be cross-examined.  However, given the fact that the trial shall start in less than two weeks’ time, there is simply not enough time for the plaintiffs to do so;

(4)  Even if there is adequate time for the plaintiffs to do further investigation into the matter before the upcoming trial, spending such time within the coming two weeks would mean that the plaintiffs’ other preparation work for the trial would be affected.  In other words, the plaintiffs would be distracted from the proper focus and priority of the due preparation for trial.  This is very unfair to them;

(5)  Furthermore, it was further asserted by solicitors in the respondent’s letter that “their client would not be able to testify to the content of such record”.  It is therefore doubtful whether anything useful can be found by the plaintiffs even if effort is spent on the matter (but that does not mean that the plaintiffs should not do their investigations into the matter).  Hence, taking into consideration the quality of the evidence to be further adduced, I cannot accept Ms Chan’s submission that the Subject Computer Records are crucial in the just resolution of the disputes herein;

(6)  Ms Chan submitted that the Subject Computer Records are admissible without further proof pursuant to section 54(1) of the Evidence Ordinance (Cap.8, Laws of Hong Kong) as they are “records of a business” as defined therein.  However, it should be noted that the Court still retains a power to disapply the said section 54(1)[3].  Hence, I do not think it can be said that those records must have probative value by virtue of the said section 54(1) as suggested by Ms Chan;

ORDER

22.  By reasons of the aforesaid, the Summons is hereby dismissed.

COSTS

23.  Costs should follow the event. 

24.  The 2^nd defendant shall bear the plaintiffs’ costs of the Summons.  The plaintiffs’ costs are summarily assessed pursuant to Order 62 rule 9A(1)(a) of the RHC at $44,700, and shall be paid by the 2^nd defendant to the plaintiffs on or before 21 March 2023.

25.  The 1^st, 3^rd and 4^th defendants’ own costs shall be taxed in accordance with the Legal Aid Regulations.