SENG SUN DEVELOPMENT CO LTD v. HONG KONG RESOURCES INVESTMENT CO LTD

HCA 2231 / 2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2231 OF 2007

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DECISION ON COSTS

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I.   Introduction

1.  At the call-over hearing of the Plaintiff’s Summons (“the Discovery Summons”) for specific discovery on 31 July 2008, the Defendant consented to an Order being made in terms of the Discovery Summons. 

2.  At the request of the parties, directions were then given for the filing of evidence and written submissions to argue on the costs of the Discovery Summons.

3.  Since then, the Defendant and the Plaintiff have respectively filed an affirmation in support of the costs arguments.  The Plaintiff’s solicitors filed their submissions on 24 September and 3 October 2008.  The Defendant’s solicitors filed their submissions on 30 September and 6 October 2008. 

4.  In essence, the Plaintiff asks for all the costs of the Discovery Summons, and the Defendant submits that costs of the Discovery Summons, including the costs of the hearing on 31 July, should be costs in the cause, and any costs incurred thereafter be to the Defendant.

5.  This is the decision on costs of the Discovery Summons.

II.  Discussion

6.  It is the Defendant’s contention that before the Discovery Summons was issued on 25 July 2008, the Defendant had by correspondence in principle agreed to provide the discovery as set out in the Plaintiff’s letter dated 4 July 2008.  All it was asking for was to be given a reasonable time to deal with the discovery request.

7.  The Plaintiff however submits that the Defendant had been evasive in making discovery, and there was no genuine attempt for it to do so.  Thus, it was reasonable for the Plaintiff to issue the Discovery Summons on 25 July.

8.  In light of the contentions, the central question that I need to answer is, by reference to the position of the parties as reflected in the correspondence between the Plaintiff’s solicitors (“SWL”) and the Defendant’s solicitors (“FWNG”), and the filing of the Defendant’s supplemental list of documents, whether it was reasonable for the Plaintiff to issue the Discovery Summons on 25 July 2008.

9.  The events before the issue of the Discovery Summons can be summarized as follows:

4 July 2008	SWL’s letter to FWNL seeking discovery of 9 categories of documents (the same as now set out in the Schedule of the Discovery Summons). The Defendant was asked to make discovery within 5 days of the letter, or otherwise the Plaintiff would take out an application to Court.
7 July 2008	FWNL’s letter saying that they were taking instructions from the Defendant, and would revert within 14 days. They also said 5 days’ timeframe imposed by the SWL was unreasonable and oppressive.
8 July 2008	SWL’s letter stating that given the progress of the case, the Defendant had not been doing much, and it should respond within the next 5 days of the letter. SWL urged the Defendant to consent to the specific discovery save as to costs.
11 July 2008	FWNL’s letter repeating that the timeframe imposed by the Plaintiff was oppressive and unreasonable. It further stated that the Defendant had retrieved some of the requested documents and would revert to the Plaintiff as soon as practicable.
21 July 2008	FWNL’s letter, in adopting the numbering of the Schedule of discovery, stated that the Defendant had in its possession various documents (as identified and set out in the letter). It also said that one of these documents was in their view irrelevant but was disclosed only to save costs, and that a further list of document would be filed soon.
23 July 2008	FWNL served on SWL the Defendant’s Supplemental List of Documents.SWL’s letter requesting copies of documents under the Defendant’s Supplemental List of Documents
25 July 2008	Plaintiff issued the Discovery Summons, returnable on 31 July 2008, seeking (a) specific discovery of all the documents set out in the Schedule, (b) an affirmation to be filed by the Defendant on the discovery of documents.
29 July 2008	The Defendant provided copies of the documents under the Supplemental List of Documents.

10.  In light of the above chronology, the Defendant discovered certain documents within about 19 days of the Plaintiff’s request.   As the Plaintiff only issued the Discovery Summons after the filing of the Defendant’s Supplemental List of Documents, there is thus no question that this discovery was made too late for the purpose of the Plaintiff’s application.

11.  Although the Plaintiff requested for copies of the documents under the Defendants’ Supplemental List of Documents on the same day when it was served on SWL, it did not wait for the provision of them^[1] (which was made 6 days later) before it issued the Discovery Summons 2 days later. 

12.  In my view, it would have been reasonable for the Plaintiff to wait until it had received the documents before deciding whether to issue the Discovery Summons, so as to see whether the discovery then made by the Defendant was complete vis-à-vis the Schedule.  This is particularly so as the Discovery Summons still seeks specific discovery of all the documents set out in the Schedule.

13.  At the same time, I believe it was unreasonably long for the Defendant to have taken 6 days to produce copies of these documents.  When it served its Supplemental List of Documents on 23 July 2008, it should already have the documents in hands.  Moreover, it must be noted that FWNL stated in their letter dated 11 July 2008 that the Defendant had already “retrieved” the documents.  There is however no evidence before me to explain why the Defendant still needed 6 days to provide copies of these documents.  In my judgment, in light of the circumstances of the request for discovery as set out above, a reasonable time for the Defendant to provide copies of these documents would be 2 to 3 days.

14.  In the premises, I am of the view that both parties had acted to a certain extent unreasonably, which had led to the issue of the Discovery Summons on 23 July 2008.

15.  On the other hand, after the issue of the Discovery Summons on 25 July 2008, and given the Defendant’s position as indicated in the correspondence before 25 July and its consent on 31 July 2008 to an order being made in terms of the Discovery Summons, I believe the Defendant should have written or communicated with the Plaintiff before 31 July 2008 indicating its consent.  Had it done so, the hearing on 31 July could have been used to deal with the costs arguments alone, without the need for a further adjournment for written submissions and the filing of evidence.

16.  In light of the above, in the exercise of my discretion, I consider it to be just and fair in all the circumstances to make a costs order to the effect that the costs of the Discovery Summons (including the costs of the hearing on 31 July 2008) be in the cause, while the costs incurred for the costs arguments be to the Plaintiff.

III.    Conclusion

17.  For the above reasons, I make the following costs order:

(1)  Subject to paragraph (2) below, costs of the Discovery Summons, including the costs of the hearing on 31 July, be in the cause.

(2)  The costs incurred after 31 July 2008 for preparing the evidence and the written submissions on the costs argument be to the Plaintiff, to be taxed if not agreed.

 

 

[1] As reflected in FWNL’s letter dated 29 July 2008 in calculating the photocopying charges.