TREASURE WEALTH PROPERTIES LTD v. SPLENDID ACHIEVEMENT LTD

LDCS 8000 of 2010

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

LAND COMPULSORY SALE APPLICATION NO. LDCS 8000 OF 2010

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R U L I N G

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1.  This is an application for specific discovery by the Applicant.  After hearing from Counsel, I made an order on 4^th July 2011 for the Respondent to file and serve an affirmation to set out and exhibit all correspondence the Respondent had, either by itself or through its agent and/or solicitors, with the Building Department or the Building Authority (“the Government Authority”) concerning the permitted use of the ground floor units in question as well as whether enforcement action will be taken by the Government Authority under Section 25(2) of the Buildings Ordinance (“the Correspondence”).  This is the reason for the ruling.

2.  It is not in dispute that the Respondent did conduct some enquiries with the Government Authority by correspondence which are in the possession of the Respondent.  It is also not in dispute that such enquiries did touch upon the permitted use of the ground floor shops in question. 

3.  The issue in this application is whether the Correspondence are relevant and necessary and whether they are subject to litigation privilege.

The Applicant’s Case

4.  Mr. Mok for the Applicant submitted that the Respondent’s expert, Mr. Yung, had in his report dated 14 April 2011 (“Mr. Yung’s Report”) raised the issue that the use of the 2 ground floor units was against the permitted use and enforcement action may be taken by the Government Authority to stop the use (“the Issues”). If the Issues were resolved in line with Mr. Yung’s report, this will affect the valuation of the ground floor units in question.  Hence, the disclosure of the Correspondence must be relevant to a matter in question in this case.

5.  As for the allegation of litigation privilege, Mr. Mok submitted that there is no supporting evidence from the Respondent by way of affirmation to support the contention that the enquiry with the Government Authority was for the dominant purpose of use in litigation.  This is the result of a conscious election on the part of the Respondent not to file any affirmation.  In any event, the Government Authority was exercising its statutory function in answering the enquiries and not necessarily for the pre-dominant purpose of litigation unless there is evidence in support.

The Respondent’s Case

6.  Mr. Leung for the Respondent submitted that the Correspondence was not relevant to this case and when exercising its discretion, the court should also consider the probative value of the Correspondence and have it weighed against the inconvenience of discovery as well as whether the document is necessary in fairly disposing of the matter or to save costs.    

7.  Mr. Leung contended that the views of the Government Authority in the Correspondence is not conclusive and may change from time to time.  It serves no probative value and disclosure is not justified.  And since the Applicant had also made similar enquiries with the Government Authority, it would not be reasonable to expect a different reply from the Government Authority so the Correspondence added no value in evidence. 

8.  Whilst accepting that Mr. Yung’s Report had put the Issues in dispute, Mr. Leung argued that however, it does not mean that the experts have to consider the views of the Government Authority.  And it was for the Court to decide on the Issues but not the Government Authority.  Relying on the case of Wong Wan Leung and Others v Director of Lands (LDMR 10/1996), it is submitted that the Applicant is forcing the Respondent to do something that should be done by the Applicant, i.e. it should be the Applicant to make further enquiries with the Government Authority for clarification.

9.  As for litigation privilege, Mr. Leung submitted that even though there is no evidence from the Respondent to support the fact that the Correspondence are for the dominant purpose of litigation, this court should infer that the purpose must be for the litigation, otherwise there is no reason for the Respondent to conduct the enquiry.

Discussion

10.  It is common ground that relevance of the specified documents is the consideration in deciding whether disclosure should be ordered.  The documents requested should relate to a matter in issue.  Given the fact that Mr. Leung for the Respondent also accepted that the  Issues is in dispute in this case, any evidence related to the Issues must be relevant.

11.  The Correspondence showed the Government Authority’s view as far as the Issues are concerned.  Even though the views may not be conclusive, it is certainly a relevant evidence for the court to consider in reaching its decision.  There is nothing to suggest that the views expressed by the Government Authority in the Correspondence is no longer valid or in Mr. Leung’s words, had changed.  I found the Correspondence is relevant to the Issues in this case.

12.  Having said so, this court still retained a discretion as to whether or not to order disclosure.  I did not accept that the Correspondence had no probative value. The Respondent not only refused to disclose the Correspondence, but also refused to disclose the content of the Correspondence except to say that content of the Correspondence is not materially different from the Applicant’s enquiry.  Without this information, there is no basis to say that the Correspondence have no probative value.  And without knowing the content of the Correspondence, one cannot tell whether it contained a different answer from that obtained by the Applicant or whether the enquiry was similar to those made by the Applicant. 

13.  The Correspondence is in the possession of the Respondent.  There is nothing from the Respondent to establish that there is any inconvenience of discovery nor is there anything to suggest that disproportionate costs will be incurred if disclosure is ordered.  And I also found the Correspondence being necessary in disposing of the Issues since the views of the Government Authority should be considered by the court. 

14.  “In order for litigation privilege to apply, there must be a confidential communication between client and lawyer or lawyer and agent or between one of these and a third party made for the dominant purpose of use in litigation” (Documentary Evidence by Charles Hollander Q.C. and M.A. Cantab at page 296).  Given the fact that there is no evidence from the Respondent as to the circumstances as to when and how the Correspondence came into existence, I found the Respondent failed to establish that the Correspondence is obtained for the dominant purpose of use in litigation and subject to litigation privilege.