LONG HAI HONG v. CHAN YU, LYDIA AND OTHERS

HCMP 3179/2013
HCA 175/2018
HCA 721/2019 and
HCA 1537/2019
(Heard together)

[2024] HKCFI 2116

HCMP 3179/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 3179 OF 2013

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HCA 175/2018

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 175 OF 2018

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HCA 721/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 721 OF 2019

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HCA 1537/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1537 OF 2019

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(Heard together)

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REASONS FOR DECISION

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1.  These 4 sets of proceedings (“the 4 Actions”) were ordered to be tried together before one judge[1].

2.  The 4 Actions share common parties and certain issues. The commonality of parties relevant to this decision is: Madam Long Hai Hong (“Madam Long”) is the Applicant/Plaintiff in all of the 4 Actions, Madam Liu Dan (“Madam Liu”) is one of the Respondents/Defendants in all of the 4 Actions, Mr Xing Zhirong (“Mr Xing”) is the 2^nd Defendant in HCA 175/ 2018 and the 2^nd Defendant in HCA 1537/2019.

3.  By a summons issued in each of the 4 Actions all dated 23 June 2023, Madam Liu, Mr Xing and China Terry Limited, the 4^th Defendant in HCA 175/2018, (together “the Applying Parties”) applied in each of the 4 Actions, for an order for specific discovery by Madam Long of the same categories of documents. With the discovery of the other documents having been sought out, remain in dispute between the parties was the application for the discovery of “Category 2” documents (“the Discovery Applications”).

4.  On 29 September 2023, Master Grace Chow heard the Discovery Applications substantively, and by a decision given ex tempore, she dismissed them.

5.  By 4 Notices of Appeal all dated 13 October 2023, one in each of the 4 Actions, the Applying Parties appeal against the dismissal.

6.  At the conclusion of the hearing of the appeals, which were conducted by way of a hearing de novo, I dismissed the appeals, and having heard submissions on costs, awarded costs to Madam Long to be paid by the Applying Parties then summarily assessed at HK$140,000.

7.  These are my reasons.

HCMP 3179/2013 and the disputes therein

8.  Though the Discovery Applications were made in the 4 Actions, the documents sought relate only to the subject matter and disputes in HCMP 3179/2013. I would therefore only introduce background matters as relating to HCMP 3179/2013 sufficient for understanding this decision, as follows. I would not introduce those relating to the other 3 actions.

9.  Lee So Winston (“Winston”) was an American Chinese living in Beijing since at least 1992. Madam Long was his wife and now the Adminstratrix of his estate; and according to her, she had all along been a house wife. According to Madam Liu, she and Winston were business partners from 1993 onwards and in about 1998 they developed a romantic relationship and had been co-habiting together. Winston died unexpectedly on 18 September 2013.

10.  HCMP 3179/2013 was commenced by Madam Long in her personal capacity to seek to rectify the Register of Members of AJK Company Limited (“AJK Ltd”) by striking out the name of Madam Liu and entering the name of Madam Long as the registered shareholder of 940,000 shares (“the Disputed Shares”) representing 94% of the share capital of AJK Ltd. AJK Ltd may be owning a controlling interest in 北京漢成大廈物業有限公司 (“Beijing Hanwei”) which owns Hanwei Plaza, an office building in the Chaoyang District in Beijing. Presently, there is a dispute between the relevant parties as to whether the said controlling interest in Beijing Hanwei is owned by AJK Ltd or by another partnership called A.J.K. Company.

11.  Broadly summarized, Madam Long’s case in HCMP 3179/2013 is that AJK Ltd was incorporated in 1992 by Winston acting through nominee subscribers, that Winston provided the share capital and the capital to acquire Beijing Hanwei, that the registered shareholders were Winston’s nominees, that in November 2011 the Disputed Shares were registered in the name of Madam Long by Winston as a gift to her, but that without Madam Long’s authority, knowledge or consent, the Dispute Shares were wrongfully caused to be registered in the name of Madam Liu in June 2013.

12.  Madam Liu’s case, again summarized broadly, is that pursuant to a business arrangement between her and Mr Xing who was the original beneficial owner of the Dispute Shares, the Disputed Shares were transferred to her beneficially in January 2005. Due to the need of her business operations in 2011, Madam Liu sought a nominee to hold the Disputed Shares on her behalf. At the recommendation of Winston and in 2011, the Disputed Shares were registered in the name of Madam Long as Madam Liu’s nominee. Subsequently, at the end of 2012, the nominee arrangement was no longer necessary and in January 2013, the Disputed Shares were transferred back to Madam Liu. Her name was then registered in the Register of Members in June 2013.

13.  The Originating Summons (“the OS”) was issued on 25 November 2013, which is now proceeding as a writ action.

Matters leading to seeking the discovery of Category 2 documents

14.  The Applying Parties seek the discovery of Category 2 documents because Madam Long in her consolidated witness statement filed for the 4 Actions dated 28 December 2022 (“ Long WS”) expressly stated that certain statements of facts she affirmed to earlier were incorrect and she then gave the correct version there, as follows:

15.  In §5 and §8 of Madam Long’s 1^st affirmation filed herein on 20 December 2013 in support of the OS (“Long 1^st”), she respectively affirmed:

“ 5. 本人於2011年11月2日成為持有AJK 940,000股的註冊股東。我在收到有關股份證書後，即交給我的丈夫李甦 (Lee So, Winston) 並應存放在A JK的註冊地址保管至今。由於我在丈夫於2013年9月18日離世後無法與A JK取得聯繫並取回該股份證書，因此我無法在此誓詞中附上該股份證書副本作為證物。”

…

8. AJK的主要業務是作為北京漢威大廈物業有限公司 (以下簡稱「北京漢威」) 的母公司，而北京漢威的主要業務則是管理及處理位於北京市朝陽區江華路7號的漢威大廈的租賃業務。”

16.  However, in §2 to §5 of Long WS, Madam Long said:

“ 2. 我希望解釋我早前於3179號案中存檔的誓章中不正確的內容。因我多年來沒有工作，從沒有與律師打過交道，我與之前聘用的胡瑛律師不能正常溝通以致我早前簽署的誓章中有若干錯誤。在我丈夫過身後，我先聘請了北京君合律師事務所劉虹環律師從北京工商局調取有關我丈夫公司的註冊文件以瞭解我丈夫的具體生意情況。對於在香港註冊的公司，我臨時聘請了香港胡百全律師行盧樂翹律師查詢，劉虹環律師根據查詢結果為本人繪製了幾家公司的股權架構圖，其中因從1996年開始漢威大廈一直在使用AJK Company Limited印章，所以劉虹環律師將漢威大廈投資方認定為AJK Company Limited。之後改聘了北京通商律師事務所王家路和張有鳳律師，他們沿用了之前劉虹環律師繪製的公司股權架構圖，之後他們又推薦了香港鄭黃林律師行胡瑛律師，並依據架構圖指示胡瑛律師就我所持有的A JK Company Limited 94% 股權在香港發起訴訟。我早前於本案中存檔法庭的誓章是胡瑛律師根據我和張有鳳的描述編寫的。

3. 受限於我的文化水平和處事經驗，我對胡瑛律師編寫的誓章沒有質疑和審核，胡瑛律師在我簽署前也沒有向我詳細解釋說明，我也沒搞清楚在誓章中哪些是我描述的事實哪些是想表達的觀點，我出於對律師的完全信任做了簽署確認。經過這幾年處理李甦身後事的學習進步和現在律師的幫助，我現希望就有關錯誤作出以下澄清，及描述我知道的事情。

4. 我日期為2013年12月20日的誓章 (「我的第一份誓章」) 中的第5段的陳述並不正確。於2011年 (我現在無法記憶確實的日期)，我丈夫曾告訴我我已經是公司的股東，之後曾對我說 : 「有沒有跟你媽媽講，你現在是股東了，還要參加股東會的。」 我當時不知道他在香港有好幾家公司，也因為我從不過問他的工作，就習慣性地没有進一步詢問具體情況，我丈夫此後也沒有再向我談及此事。直至我丈夫過身後，朋友經查詢告訴我我已擁有香港一家名為 AJK Company Limited公司的94%股權。在我丈夫過身前，我對該公司一無所知，我丈夫沒有將任何AJK Company Limited的股權證書交給我。我現在知道有關股權證明書在香港亦會稱為「股票」，但以前我從不知道香港公司還有發出股票的做法和形式。事實上，我從未持有任何由AJK Company Limited發給我的股票，而誓章中我有關股票的描述是王家路，張有鳳、胡瑛律師會商後，認為我有股權就應該有股票，並假設儘管我手裡沒有股票一定是我丈夫放在保險櫃裡保存了而編寫的。

5. 我希望澄清我的第一份誓章第8段中的陳述如下 :-

(i) 我從不知道北京漢威大廈是由香港公司持有；

(ii) 通過盧樂翹律師查詢得知我擁有AJK Company Limited公司的94%股權；及

(iii) 劉虹環律師整理文件後所做的公司架構圖確認AJK Company Limited公司是北京漢威公司的唯一股東，

我理解兩名被告人並不同意我誓章中的觀點，但我得到的法律意見的確如此。”

17.  It is common ground that the exact statement of fact so admitted to be incorrect was “我在收到有關股份證書後，即交給我的丈夫李甦 (Lee So, Winston) 並應存放在A JK的註冊地址保管至今” (§5 of Long 1^st) and now the correct fact, according to and as admitted by Madam Long in Long WS, is “我從未持有任何由AJK Company Limited發給我的股票”.

The Category 2 documents

18.  In the respective schedules attached to the 4 summons, the contents of which are identical, the Applying Parties applied for the same Category 2 of documents:

“ Category 2: lawyers’ communications in relation to Madam Long's purported misstatements in her affirmations filed in HCMP 3179/2013

2. All communication(s) between Madam Long and her lawyers, in relation to and resulting in all those purported misstatements in her Affirmations previously filed in HCMP 3179/2013 (as alluded to in paragraphs 2 to 5 of Madam Long’s Witness Statements dated 28 December 2022 (“Madam Long’s Witness Statement”)), including but not limited to:

(1) all communication(s) between one or more of Madam Long / her representative(s) 劉虹環律師，王家路律師，張有鳳律師、胡瑛律師 and 盧樂翹律師in relation to the instructions given by Madam Long (or 王家路律師 and/or 張有鳳律師on her behalf) for commencing litigation in Hong Kong in respect of her alleged 94% shareholding in the 2^nd Respondent (“AJK Ltd”) based on the shareholding structure chart drawn by 劉虹環律師，as alleged in paragraph 2 of Madam Long's Witness Statement;

(2) the shareholding structure chart allegedly drawn by 劉虹環律師，as referred to in paragraph 2 of Madam Long’s Witness Statement;

(3) all communication(s) between one or more of Madam Long / her representative(s) 劉虹環律師，王家路律師，張有鳳律師、胡瑛律師 and 盧樂翹律師in relation to Madam Long’s purported misstatement in her 1^st Affirmation filed in HCMP 3179/2013 about her possession and safekeeping of the share certificate (股票) ，as referred to in paragraph 4 of Madam Long’s Witness Statement; and

(4) where any of the communication referred to in sub-paragraphs (1) and (3) above was verbal, copies of written record(s) evidencing such communication.”

19.  Though the following did not form part of my reasoning for dismissing the appeals, I must observe at this juncture that these requests of documents under Category 2 (a) are really wide in scope in that they seek all such communications not just between Madam Long and each of the 5 named lawyers but also all communications among and between any combination of these 6 persons, and (b) they contain a clear inconsistency in that the body of paragraph 2 requests for “All communication(s) … in relation to and resulting in all those purported misstatements” while sub-paragraph (1) requests for “All communication(s) … in relation to the instructions given by Madam Long (or 王家路律師 and/or 張有鳳律師on her behalf) for commencing litigation in Hong Kong”.

A preliminary point : the scope of Category 2

20.  Before the Master, the Applying Parties argued that Category 2 documents also included such requested documents in relation to and resulting in “the mis-statements” contained in §§5 to 10 of the 2^nd Affirmation of Madam Long (“Long 2^nd) filed on 13 January 2014. That was ruled against by the Master.

21.  It is not disputed that in §8 to §10 of Long WS:

(a)  Madam Long clarified that she had no knowledge in November 2011, but only acquired such knowledge after the passing of Winston, concerning the existence of AJK Ltd and the details of the assets it owned which she has set out in §5 to §7 of Long 2^nd;

(b)  Madam Long stated that §8 of Long 2^nd was incorrect, and the correct fact was that in November 2011, she had not seen any share certificate of AJK Ltd, Winston had not mentioned anything about any share certificate and she did not know which company it was that Winston said its shares would be gifted to her; and

(c)  Madam Long also stated that §9 of Long 2^nd was incorrect, and the correct fact was that prior to Winston’s passing in September 2013, she did not know about AJK Ltd and her appointment and then resignation as its director in 2012 and 2013, nor had she participated in any of its business.

22.  The same argument was pursued by Mr Lee at the hearing contending that Category 2 covers this larger scope of documents to include documents in relation to and resulting in the “mis-statements” contained in §5 to §10 of Long 2^nd.

23.  It is trite and only fair that the discovery application must identify with precision the category of documents the specific discovery of which is sought (Hong Kong Civil Procedure 2024§24/7/2).

24.  Here, though the body of paragraph 2 of Category 2 makes mention of “misstatements in her Affirmations”, which is in plural, the body of paragraph 2 itself, sub-paragraphs (1), (2) and (3) thereof only specifically refer to and identify the corrections contain in §2 to §5 of Long’s WS and there was no reference to or mention at all about the corrections made in §8 to §10 of Long WS.

25.  In my view, the requests by Category 2 clearly did not specify and did not cover the “mis-statements” contained in Long 2^nd as mentioned in §8 to §10 of Long WS. I so ruled at the hearing for the above reasons.

Category 2 documents do not relate to a matter in issue

26.  It is trite and not disputed that (a) there is no jurisdiction to make an order for specific discovery under O.24 r.7 unless, among others, there is a prima facie case that the documents relate to a matter in issue, and (b) specific discovery would not be ordered on documents relating solely to credit (Hong Kong Civil Procedure 2024§24/7/2).

27.  The factual statement that she have received the share certificates was merely a piece of evidence Madam Long proffered in Long 1^st, which she now retracted as incorrect in Long WS.

28.  Mr Chan, counsel for Madam Long, rightly pointed out, and not disputed by Mr Lee, that the factual issue about whether there were actually share certificates of AJK Ltd having been issued and the same having been in Madam Long’s possession at some point did not even feature in the pleadings.

29.  Mr Lee, counsel for the Applying Parties, submitted that the Category 2 documents relate to the issue as to whether at the time of the 2011 share transfer, Madam Long knew that the Disputed Shares were transferred into her name.

30.  I do not accept that submission. That specific knowledge is not in issue at all.

31.  As I mentioned in paragraph 21 above, in §8 to §10 of Long WS, Madam Long expressly stated that prior to Winston’s passing (a) she did not even know about the existence of AJK Ltd, and (b) she did not know which company it was that Winston said its shares would be gifted to her (among the other matters relating to AJK Ltd she expressly stated there that she did not know at the time).

32.  Moreover, the same lack of knowledge was pleaded by Madam Long in §4.13 of her Reply in HCMP 3179/2013 by her amendment made on 5 July 2023, thus :

“… At the material time, Mr Lee informed the Applicant that he had arranged to gift certain shares to her, but the Applicant did not discover the name of the Company and the exact number of shares gifted to her under the 2011 Transfer until she caused enquiries to be made after Mr Lee passed away.”

33.  Thus, (a) it has now been unequivocally admitted by Long in Long WS that did not at any time possessed the share certificates, and (b) Madam Long pleaded and admitted her such lack of knowledge as aforesaid.

34.  In my view, it is abundantly clear that the Category 2 documents do not relate to any issue in question and that they relate solely to credit.

35.  At the hearing and after hearing submissions on this point, I announced my decision that the documents sought did not relate to any matter in issue, which was sufficient to dismiss the appeals. I therefore did not call upon the parties to address the Court regarding the issue of legal professional privilege.

36.  For the above reasons, I dismissed the appeals with costs.