PT TUGU PRATAMA INDONESIA v. CITIBANK N.A.

HCCL 1/2007

[2018] HKCFI 1398

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO 1 OF 2007

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D E C I S I O N

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1.  There are only 2 items of discovery outstanding in the present application, namely, paras 2 and 3 of Schedule 1 of the Defendant’s Amended Summons. I propose to deal with them quickly in light of the following circumstances.

2.  This action was started over 11 years ago in February 2007 concerning events which took place as long as 24 years ago between 1994 and 1998.  A 10-day trial of this action is to take place starting on 29 August 2018, a little over 2 months away. 

3.  The 2 items of discovery relate to an Affirmation made by the President Director of the Plaintiff, Mr Hamzah, back in May 2007.  The Affirmation was made to resist an application by the Defendant to strike out this action. In para 7 of the Affirmation, Mr Hamzah provided a brief account of the background to this action in 8 short sub-paragraphs.  The 2 items relate each to one such sub-paragraph, namely, paras 7(1)(g) and (h).

4.  This 11^th hour discovery application relating to an Affirmation which the Defendant had received 11 years ago must be examined by the court with a healthy degree of scepticism.  At this stage, the parties are to focus their resources on the trial.

5.  In respect of para 2 of Schedule 1, the relevant part of para 7(1)(g) of the Affirmation set out where the money, the subject matter of this action, came from and what Mr Hamzah believed was the purpose of the payments to the Plaintiff, namely, dividends from 2 related companies.  Those matters had been clarified in a witness statement from Mr Parameswara filed in March 2018. 

6.  Based upon para 7(1)(g), the Defendant seeks discovery of documents evidencing the declaration of dividends.  First of all, the payment of dividends is not part of the pleaded case of the Plaintiff.  In simple terms, the Plaintiff’s pleaded case is that the Defendant had wrongfully acted upon the instructions of its rogue directors and transferred huge sums of money from its account to those of the rogue directors. 

7.  Prima facie, the money in the Plaintiff’s account belonged to it.  There is no pleaded challenge by the Defendant over the Plaintiff’s title to the money.  I see no real relevance in the documents sought, and I am not satisfied that the discovery is necessary for the fair disposal of this action or for saving costs.  Further, item 2 involves extensive discovery going back over 20 years.  Allowing it shortly before trial cannot be consistent with the underlying objectives promulgated under the CJR.

8.  Finally, I agree with the Plaintiff that O.24, r.10 cannot assist the Defendant because para 7(1)(g) made no reference to the documents sought. It referred to the belief that the money paid to the Plaintiff represented dividends. 

9.  Para 7(1)(h) made 2 points: (a) there was no transaction recorded in the books of the Plaintiff which might justify the payments to the rogue directors; and (b) those payments were part of a scheme to divert substantial sums of money from the Plaintiff via related companies before ending up in the pockets of the rogue directors.  Para 3 of Schedule 1 seeks discovery of documents evidencing the scheme. 

10.  With respect, this is a misconceived application.  Read in context, the reference to a scheme was likely to be what Mr Hamzah believed to be the case.  Secondly, the relevant point is point (a).  Whether there was a scheme or what it was is probably a matter of inference.  The reasons for rejecting the application under para 2 of Schedule 1 (see para 7 above) apply with greater force here. 

11.  I also agree with the Plaintiff that the reliance on O.24, r.10 cannot bear scrutiny because there was no reference to any document.

12.  Finally, para 3 of Schedule defines the classes of documents sought by reference to an issue, which is impermissible (see Li Tak Yee Samuel v Societe Generale Bank and Trust, HCA 2478/2009, 16 April 2013, §§38-41).  The blue pencil exercise proposed by the Defendant to salvage this application cannot be justified due to the lack of merit in the discovery exercise.

13.  In any case, the reformulation of para 3 into 3 paragraphs has rightly been criticised by the Plaintiff as to their width and lack of clarity.  The Plaintiff’s offer to cut down on the reformulated request does not assist on the merit of this last minute discovery request.

14.  For these reasons, this application is dismissed, and I shall hear the parties on costs.