XCHRX MAXWELL ENGINEERING CO. LTD. v. CHUNG FAI ENGINEERING CO. (a firm)

HCA 10504/96

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 10504 OF 1996

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J U D G M E N T

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1. This is an appeal from part of an order made by Master Mary Yuen on 19 January 2001, namely, para 2(c) thereof.

2. The judgment creditor obtained judgment against the judgment debtor after trial before Burrell J on 27 June 2000. The trial judge dismissed the judgment debtor's claim and gave judgment to the judgment creditor on its counterclaim for HK$6,071,000 together with interest and costs. I am told that there is a pending appeal to the Court of Appeal by the judgment debtor against the judgment of the trial judge.

3. On 28 August 2000, Master Jones ordered that Mr Chan Kwok Fai, Mr Ho Ching Chiu and Mr Chan Guo Fu, directors of Tech-Wing Industrial Limited do attend and be orally examined under O. 48, r. 2, RHC. Subsequently, only Mr Chan Kwok Fai and Mr HO Ching Chiu were served with the order.

4. It is important to bear in mind that the judgment debtor is a firm by the name of Chung Fai Engineering Company. As the application for registration of a branch business which is in evidence shows, Chung Fai Engineering Company was registered as a branch business of Tech-Wing Industrial Limited. And the branch business of Tech-Wing Industrial Limited commenced business on 1 September 1993. Tech-Wing Industrial Limited was incorporated on 26 March 1991. So, the position is that Tech-Wing Industrial Limited also carries on business under the business name of Chung Fai Engineering Company, the judgment debtor. By the order made under O. 48, RHC, the said three directors of Tech-Wing Industrial Limited were ordered to attend for examination.

5. The matter eventually came before Master Mary Yuen on 19 January 2001. She adjourned the examination to a date to be fixed. She also ordered Mr Chan Kwok Fai and Mr Ho Ching Chiu to supply further documents to the judgment creditor. The appeal before me is in respect only of para 2(c) of her order which required the said two directors to supply :

"(c) Accounts of Chung Fai Engineering Co. Ltd., from June 1996 to May 1999 in relation to the receipt of payment from Wing Hing Constructions Company Limited or payment from Chung Fai Engineering Co."

6. Chung Fai Engineering Company Limited is a company which was incorporated on 25 June 1996. Both Mr Chan Kwok Fai and Mr Ho Ching Chiu are also directors of Chung Fai Engineering Company Limited. On this appeal, it has been contended by Ms Cheung that discovery is being sought against a non-party to the proceedings namely, Chung Fai Engineering Company Limited, which is not permissible.

7. In my view, although both Mr Chan Kwok Fai and Mr Ho Ching Chiu are directors of both Tech-Wing Industrial Limited and Chung Fai Engineering Company Limited, it must be borne in mind that Chung Fai Engineering Company Limited is not a party to the proceedings. The accounts of Chung Fai Engineering Company Limited, which were ordered to be supplied by the master under para 2(c) of her order, are documents belonging to the company, Chung Fai Engineering Company Limited and not to the individual directors. In any event, the relevant ledgers of Tech-Wing Industrial Limited have already been produced. Mr Kwok, for the judgment creditor, has drawn my attention to the fact that certain entries show payments from the judgment debtor to Chung Fai Engineering Company Limited. These are matters in respect of which no doubt the judgment creditor will wish to examine both Mr Chan Kwok Fai and Mr Ho Ching Chiu at the adjourned hearing of the examination. However, I am unable to see how Mr Chan Kwok Fai and Mr Ho Ching Chiu can be ordered to supply or produce documents which belong not to them or to the judgment debtor but to another separate legal entity, namely Chung Fai Engineering Company Limited. In the circumstances, the appeal is allowed. Para 2(c) of Master Mary Yuen's order is set aside.