KOMAL PATEL AND OTHERS v. CHRIS AU AND OTHERS

HCA 183/2014 &
HCA 2063/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 183 OF 2014

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AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2063 OF 2015

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D E C I S I O N

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Introduction

1.  By summons dated 24 June 2016, the 1^st defendant applies for specific discovery against the 1^st, 3^rd and 4^th plaintiffs (by original action) and the 5^th defendant (by counterclaim) in relation to 3 classes of documents.

2.  This is the second time that the 1^st defendant has made an application for specific discovery.  He previously made one in April 2015 which included specific discovery for most of the documents sought by the present application, except it was only directed to the plaintiffs (by original action), and not to the 5^th defendant (by counterclaim) (Essence) as it is now.  The previous application was rejected by this Court.  The present application therefore begs the question why should it be entertained if it was previously rejected and is now made after a significant period of delay and at a very late stage of the proceedings, shortly before the case is fixed for a lengthy trial.

Application for specific discovery

3.  The specific discovery against each of the parties is generally particularised by the Schedule attached to the summons.  The Schedule reads:

“1. Bank statements, payment instructions, authorisations and receipts of all bank accounts held or controlled by the 5^th Defendant (by Counterclaim) in HCA 183/2014 including but not limited to the bank account held by the 5^th Defendant (by Counterclaim) in HCA 183/2014 with OCBC Singapore with the account number 629488487001 in respect of the following:-

(1) all payments into the 5^th Defendant (by Counterclaim)’s in HCA 183/2014 bank account(s) in respect of dividend payments made by KDT BVI to the 5^th Defendant (by Counterclaim) in HCA 183/2014 for the period September 2010 to January 2014;

(2) all payments out of the 5^th Defendant (by Counterclaim)’s in HCA 183/2014 bank account(s) in respect of the dividend payments received from KDT BVI by the 5^th Defendant (by Counterclaim) in HCA 183/2014 for the period September 2010 to January 2014;

(3) all payments into the 5^th Defendant (by Counterclaim)’s in HCA 183/2014 bank account(s) in respect of the sale proceeds of the sale of the 5^th Defendant (by Counterclaim)’s in HCA 183/2014 shares in KDT BVI to L Capital for the period January 2014 until the present;

(4) all payments out of the 5^th Defendant (by Counterclaim)’s in HCA 183/2014 bank account(s) in respect of the sale proceeds received from L Capital (for the sale of the 5^th Defendant (by Counterclaim)’s in HCA 183/2014 shares in KDT BVI to L Capital) for the period January 2014 until the present; and

(5) bank statements, payment instructions /authorizations/receipts of all bank accounts held or controlled by the 1^st and 3^rd Plaintiff (by Original Action) in HCA 183/2014 and the 6^th Defendant (by Counterclaim) in HCA 183/2014, into which funds from the 5^th Defendant (by Counterclaim) in HCA 183/2014 were remitted from September 2010 to present.

2. The Interim Statements of the 4^th Plaintiff (by Original Action) and the 5^th Defendant (by Counterclaim) in HCA 183/2014 for the period from September 2010 to present; and

3. The Cashbook of the 5^th Defendant (by Counterclaim) in HCA 183/2014 for the period from September 2010 to present.”

4.  For ease of reference I will refer to each set of documents in the Schedule as Class 1, 2 and 3 documents respectively. 

5.  Except for an order as to costs, the orders sought for specific discovery are twelve in total and are as follows:

“1. The 5^th Defendant (by Counterclaim) in HCA 183/2014 does within 14 days of the date of this order file and serve on the 1^st Defendant (by Original Action) in HCA 183/2014 a further and better list of documents which are or have been in its possession, custody or power relating to the matters in question in this action, including but not limited to the documents specified in the attached Schedule, and if any of the documents have at any time been but are no longer in its possession, custody or power, stating when it parted with them and what has become of them;

2. The 5^th Defendant (by Counterclaim) in HCA 183/2014 does within 14 days of the date of this order file and serve an affidavit verifying the further and better list of documents, and stating whether any of the documents or classes of documents referred to and specified or indicated in the attached Schedule is or are or has or have at any time been in its possession, custody or power; and if the same or any of them, having at any time been, be not now in its possession, custody or power, stating when it departed of them and what has become of them;

3. The 5^th Defendant (by Counterclaim) in HCA 183/2014 does produce those documents mentioned in the said further and better list of documents which are in its possession, custody or power for the 1^st Defendant (by Original Action)’s in HCA 183/2014 inspection within 7 days thereafter;

4. The 1^st Plaintiff (by Original Action) and the 3^rd Plaintiff (by Original Action) in HCA 183/2014 do within 14 days of the date of this order file and serve on the 1^st Defendant (by Original Action) in HCA 183/2014 a further and better list of documents which are or have been in their possession, custody or power relating to the matters in question in this action, including but not limited to the documents specified in paragraph no.1(5) of the attached Schedule, and if any of the documents have at any time been but are no longer in their possession, custody or power, stating when they parted with them and what has become of them;

5. The 1^st Plaintiff (by Original Action) and the 3^rd Plaintiff (by Original Action) in HCA 183/2014 do within 14 days of the date of this order file and serve an affidavit verifying the further and better list of documents, and stating whether any of the documents or classes of documents referred to and specified or indicated in paragraph no.1(5) of the attached Schedule is or are or has or have at any time been in their possession, custody or power; and if the same or any of them, having at any time been, be not now in their possession, custody or power, stating when they departed of them and what has become of them;

6. The 1^st Plaintiff (by Original Action) and the 3^rd Plaintiff (by Original Action) in HCA 183/2014 do produce those documents mentioned in the said further and better list of documents which are in their possession, custody or power for the 1^st Defendant (by Original Action)’s in HCA 183/2014 inspection within 7 days thereafter;

7. The 1^st Plaintiff (by Original Action) and the 4^th Plaintiff (by Original Action) in HCA 183/2014 do within 14 days of the date of this order file and serve on the 1^st Defendant (by Original Action) in HCA 183/2014 a further and better list of documents which are or have been in their possession, custody or power relating to the matters in question in this action, including but not limited to the documents specified in paragraph no.2 of the attached Schedule, and if any of the documents have at any time been but are no longer in their possession, custody or power, stating when they parted with them and what has become of them;

8. The 1^st Plaintiff (by Original Action) and the 4^th Plaintiff (by Original Action) in HCA 183/2014 do within 14 days of the date of this order file and serve an affidavit verifying the further and better list of documents, and stating whether any of the documents or classes of documents referred to and specified or indicated in paragraph no.2 of the attached Schedule is or are or has or have at any time been in their possession, custody or power; and if the same or any of them, having at any time been, be not now in their possession, custody or power, stating when they departed of them and what has become of them;

9. The 1^st Plaintiff (by Original Action) and the 4^th Plaintiff (by Original Action) in HCA 183/2014 do produce those documents mentioned in the said further and better list of documents which are in his possession, custody or power for the 1^st Defendant (by Original Action)’s in HCA 183/2014 inspection within 7 days thereafter;

10. The 1^st Plaintiff (by Original Action) in HCA 183/2014 do within 14 days of the date of this order file and serve on the 1^st Defendant (by Original Action) in HCA 183/2014 a further and better list of documents which are or have been in its possession, custody or power relating to the matters in question in this action, including but not limited to the documents specified in paragraph no.3 of the attached Schedule, and if any of the documents have at any time been but are no longer in his possession, custody or power, stating when he parted with them and what has become of them;

11. The 1^st Plaintiff (by Original Action) in HCA 183/2014 do within 14 days of the date of this order file and serve an affidavit verifying the further and better list of documents, and stating whether any of the documents or classes of documents referred to and specified or indicated in paragraph no.3 of the attached Schedule is or are or has or have at any time been in his possession, custody or power; and if the same or any of them, having at any time been, be not now in his possession, custody or power, stating when he departed of them and what has become of them;

12. The 1^st Plaintiff (by Original Action) in HCA 183/2014 do produce those documents mentioned in the said further and better list of documents which are in his possession, custody or power for the 1^st Defendant (by Original Action)’s in HCA 183/2014 inspection within 7 days thereafter.”

6.  The obvious point to make about the application is that the terms are general and the scope is wide.  No attempt has been made to specifically particularise the documents sought for disclosure.  It is expressed in wide and sweeping terms as if to cast a net as far and wide as possible in the hope of catching something.  This application is made at a time when the standard disclosure between the parties has taken place long ago.  Only at the hearing of the application was any attempt made by the 1^st defendant to define and limit the orders sought.

The basis of the application

7.  The 1^st defendant seeks to support the application by his 23^rd affirmation dated 24 June 2016.  This application for specific discovery primarily focuses on the banking records of Essence. 

8.  The 1^st defendant notes that the parties agree that Essence has held beneficial and/or legal interests in Kudeta Limited (the 1^st plaintiff in HCA 2063/2015) (referred to as Kudeta BVI or KDT BVI) but do not agree as to who the ultimate beneficial owners of Essence were at various times.  The 1^st defendant claims that this is an issue in the proceedings because the question of the beneficial ownership of Essence will have a bearing on the beneficial ownership of Kudeta BVI. 

9.  Mr Tony Tam of Messrs Lo and Lo, solicitors, appeared on behalf of the 1^st defendant in the present application and now acts on his behalf in these proceedings.  The 1^st defendant has had at various times different firms of solicitors act for him, truncated with periods when he has acted in person. 

10.  Mr Tam confirmed that the object of the application seeks disclosure of documents that show or establish the beneficial ownership of Essence.  And yet, the application does not specifically request disclosure of such documents, but it may be argued that given the loose and fluid arrangement between the parties as to their interests in Kudeta BVI, such documents if they exist may not show the full picture. 

11.  The central issue in this case is the beneficial ownership of Kudeta BVI which has been held by various corporate entities and in various percentage interests from time to time.  The relevant entities are the 3^rd defendant, Retribution Limited (Retribution), the 4^th plaintiff, Rocky Cape International Limited (Rocky Cape), and Essence Investments Limited.  Prior to 30 January 2014, Retribution held 72.5% and Essence held 27.5% of the shares in Kudeta BVI.  The two companies are separate entities and it appeared that they operated separately from each other.  On 30 January 2014, L Capital KDT Limited (L Capital) acquired a 51% stake in Kudeta BVI and Retribution held the remaining 49% stake. 

12.  A key issue in dispute between the plaintiffs and the 1^st defendant is the beneficial ownership of Retribution, in particular between the 1^st plaintiff, 3^rd plaintiff and the 1^st defendant.  The 1^st defendant argues as part of his case that the beneficial ownership or interests which they or others associated with them may have in Essence could be relevant to the ultimate determination in these proceedings as to the beneficial ownership and interests held in Retribution and in Kudeta BVI. 

13.  The 1^st defendant in his 23^rd affirmation notes that Essence is a company incorporated and registered in the Marshall Islands.  The sole nominee shareholder and director is Dr Knut Unger, a lawyer based in Singapore.  He also notes that it is agreed by the parties that from about 26 January 2011, Essence held legal ownership of 27.5% of the shares of Kudeta BVI.  He further notes that the defendants’ pleaded case is that the beneficial owners of Essence included the 1^st plaintiff, the 3^rd plaintiff and Mr Yew Kuan Cheong (Mr Cheong), whereas the plaintiffs’ pleaded case is that at the material times Essence was beneficially owned solely by Mr Cheong. 

14.  It is the 1^st defendant’s case that the legal ownership of Essence does not reflect the beneficial ownership and therefore documents showing the flow of funds between various parties in the proceedings are likely to provide evidence as to the beneficial ownership of Essence and ultimately the beneficial ownership of Kudeta BVI.  Such evidence, it is submitted, may come from the payment of dividends by Kudeta BVI to Essence and the proceeds of the sale of Essence’s shareholding in Kudeta BVI to L Capital and the distribution of those funds to another or others.

15.  Mr Tam in his written submission dated and filed on the day of hearing, qualified to some extent the terms and scope of the documents sought in the Schedule.  As to item 1(1) the documents sought were for the period from September 2010 to October 2012.  As to item 1(2) the documents sought were for the period from September 2010 to February 2013. This was extended by four months from October 2012 in order to cater for any delay in the remittance of dividends.  As to item 1(3) the documents sought concern the remittance of the sale proceeds of Essence’s shareholding in Kudeta BVI to L Capital for the period from January to February 2014.  As to item 1(4) the documents sought relate to the sale proceeds received by Essence from L Capital which were paid to Mr Cheong.  The periods that the documents cover have not been changed and are from January 2014 to the present.  As to item 1(5) the documents sought relate to the payment of dividends or sale proceeds received by Essence to the 1^st and 3^rd plaintiffs.  The periods that the documents cover have not been changed and are from September 2010 to the present.

16.  The 1^st defendant points out that on 17 November 2014 his former solicitors wrote to the solicitors for the plaintiffs requesting amongst other things bank statements as to the beneficial ownership of the various parties involved in the period since the incorporation of Kudeta BVI.  Furthermore, if such documents were not disclosed an application would be made for specific discovery.  The plaintiffs filed and served their list of documents on 4 December 2014 which was received by the 1^st defendant’s solicitors on 12 December 2014.  He claims that the review of the disclosed documents is ongoing but it was immediately apparent that the plaintiffs had failed to disclose documents relating to the beneficial ownership and bank statements of Essence. 

The previous application

17.  This brought about the previous application for specific discovery in April 2015 where the 1^st defendant essentially requested from the plaintiffs the banking records in relation to Essence.  The matters mentioned by the 1^st defendant in his 23^rd affirmation in support of the present application were also made in his 8^th affirmation in support of the previous application made by him. 

18.  The previous application was solely directed to the plaintiffs and the class of documents sought by the 1^st defendant to be disclosed were described as follows:

“(a) Bank statements, payment instructions / authorizations / receipts of all bank accounts held or controlled by the 4^th Plaintiff in the period from 20 July 2009 to present, including but not limited to the bank account held by the 4^th Plaintiff with OCBC Singapore with the account number 629561168001.

(b) Bank statements, payment instructions / authorizations / receipts of all bank accounts held or controlled by Essence in the period from 22 October 2010 to present including but not limited to the bank account held by Essence with OCBC Singapore with the account number 629488487001.

(c) Bank statements, payment instructions / authorizations / receipts of all bank accounts held or controlled by the 1^st Plaintiff, 2^nd Plaintiff and 3^rd Plaintiff into which funds from the 4^th Plaintiff and/or Essence were remitted from 20 July 2009 to present.”

19.  As can be seen, the disclosure related to all the banking records of the 4^th plaintiff, Rocky Cape, from 20 July 2009 to present; Essence from 22 October 2010 to present; and the 1^st, 2^nd and 3^rd plaintiffs in relation to funds received by Rocky Cape and Essence from 20 July 2009 to present. 

20.  This Court by its decision dated 27 April 2015 granted the application in relation to Rocky Cape in so far as to cover the bank records in relation to the payment of funds from Kudeta BVI to Rocky Cape’s bank accounts and any payment or transfer of those funds to another, and the bank records of the 1^st, 2^nd and 3^rd plaintiffs in relation to remittances from Rocky Cape attributable to payments from Kudeta BVI.  The plaintiffs had agreed to disclose the documents in (c) above for the period up to October 2012 which was the date from when no further payments were made by Kudeta BVI to Rocky Cape. 

21.  This Court refused the application in relation to Essence primarily because the discovery was directed to the plaintiffs and not to Essence and at that stage it appeared that there was a lack of evidential materiality of the documents in relation to the original claim.  The plaintiffs had argued that they did not possess or control the documents in (b) above and that the discovery of them should be directed to Essence.  This was acknowledged by Mr Tam in his written submission.[1]

22.  It seems the 1^st defendant’s then solicitors wrote to Essence’s solicitors on 28 April 2015 requesting discovery of the banking records of Essence.  However, this was rejected by Essence’s solicitors in a letter dated 5 May 2015 on the basis that no explanation had been given as to why the beneficial interest in Essence was an issue to be decided at trial and how it concerned the 1^st defendant, and also because the scope of the documents sought was too wide. 

23.  There was discovery between the parties but it was not until 24 June 2016 that the present application was taken out.  The delay in making the application is a relevant matter that needs to be addressed, especially at this late stage in the proceedings, with a lengthy trial due to start in early November 2016. 

The relevant legal principles

24.  Like the previous application, this application is made pursuant to Order 24, rules 3 and 7 of the Rules of the High Court which seeks from the Court a total of twelve orders against the specified party or parties to file and serve either a list or affidavit of documents which are in the possession, custody or power of the party or parties concerned.

25.  The relevant legal principles applicable to a specific discovery application are contained in paragraphs 13 to 20 of the April 2015 decision.  Suffice to say, the 1^st defendant has the burden of demonstrating the relevance of the disclosure sought which is primarily to be judged with reference to the pleaded cases of the parties and that it is necessary either for disposing fairly of the cause or matter or for saving costs.

26.  As described by Sir John Donaldson MR in Davies v Eli Lilly & Co [1987] 1 WLR 428, civil litigation is conducted with the “cards face up on the table”.  An order for specific discovery normally arises after the standard disclosure directions have taken place.  The court’s powers in ordering disclosure are particularly wide, especially in cases where a claim involves serious fraud allegations and such disclosure is necessary in order to address any problems that may arise.  As a general rule, a party must disclose those documents it has in its possession, custody or power that it intends to rely on or which adversely affect its case and this extends to such documents that it has had in its possession, custody or power.  The principal purpose of disclosure is to enable the parties to evaluate and ascertain the strength or weakness of their respective cases, so as to encourage appropriate resolution of the dispute between the parties and the saving of costs. 

27.  There are three essential prerequisites for the jurisdiction to be invoked.  First, the documents or classes of documents exist which the other party had not disclosed.  Secondly, the documents relate to a matter in issue in the action.  Thirdly, the documents are, or have been, in the possession, custody or power of the other party.  A court will not make the order unless the discovery sought is shown to be relevant to an issue in the pleaded cases of the parties and that it is necessary either for disposing fairly of the action or for saving costs.  As I stated in §17 of the April 2015 decision:

“Relevance is highly important in the exercise of discovery and will primarily be determined by reference to the pleadings. The threshold test is that the documents sought must be relevant in that it is reasonable to suppose that they may directly or indirectly enable the party requiring the discovery either to advance his own case or undermine the case of the opposing party but subject to the limitation that the discovery is not be used as a fishing expedition. The court can still refuse the application if the documents being sought are unlikely to contain or yield information of sufficient evidential materiality to the pleaded case of the parties as to make their disclosure necessary for the fair disposal of the proceedings or to save costs. This is stipulated under Order 24 rule 8.”

28.  It has been held that in deciding whether or not to make an order for specific discovery the court will take into account all the circumstances of the case, including any delay in making the application: Harris v The Society of Lloyd’s [2008] EWHC 1433. 

29.  In civil litigation, courts are driven to ensure that cases are fairly and efficiently disposed of.  It is in this regard that courts exercise their case management powers to ensure proper focus and preparation for trial without any undue delay or disruption to the proceedings. Courts will therefore take into account any inappropriate delay in making an application for discovery, especially when it may have adverse consequences to the parties in preparing and presenting their cases, and to the carriage of the case overall.  Ultimately, courts will be very much guided by whether the application is truly necessary for the fair and efficient disposal of the case.  See Citibank NA v Days Properties Ltd, CACV 192/2013, 29 November 2013, unreported, at §15 per Lam VP; and Chun Wo Building Construction Ltd v Metta Resources Ltd, HCCT 29/2013, 22 March 2016, unreported, at §§1-3, 31-33 per A Chan J. 

Opposition to the application

30.  The parties, the subject of the application, the plaintiffs and Essence, oppose it because no adequate explanation for the delay has been provided by the 1^st defendant.  It is noted that the trial of this action will commence on 7 November 2016 with a case management conference fixed for 30 August 2016, and yet the present application was taken out more than 14 months after the April 2015 decision.  It is also noted that the present application was not foreshadowed at the case management hearing on 19 February 2016 and no explanation has been given by the 1^st defendant for the substantial delay which has occurred in making the present application.  They generally complain that the description of the class of documents remains exceptionally broad in scope and for all intents and purposes it is the same class of documents that is sought by the 1^st defendant, as previously rejected. 

31.  Both the plaintiffs and Essence particularly address the three classes of documents that have been requested to be disclosed by the 1^st defendant.  In respect of Class 1 documents, it is submitted that this Court has already determined that there is no evidential materiality of this class of documents to the original claim in its decision of April 2015 and it should not be allowed to be re-litigated.  They both complain that the matters covered are extensive, broad in scope and cover a very wide period of time, from “September 2010 to present”. 

32.  The plaintiffs point out that the 1^st defendant as part of his pleaded case has stated that the Kudeta business ceased to distribute dividends or to make any payments by way of shareholder loans as intended dividends after October 2012 to all its shareholders.  This was noted in the April 2015 decision and discovery was limited to documents up to October 2012. 

33.  The plaintiffs also take issue with the 1^st defendant’s contention that the ultimate beneficial ownership of Essence is an important issue for trial.  They note that the L Capital agreements confirmed the ownership of Kudeta BVI and that Mr Cheong is the beneficial owner of Essence, and that in any event the 1^st defendant has failed to understand that the mere payment or transfer of money to Essence from the 1^st and/or 3^rd plaintiffs does not evidence any beneficial ownership by them in Essence. 

34.  The plaintiffs in particular note that they have already confirmed in these proceedings that they do not have in their possession, custody or power any documents related to Essence.[2]  They also note that they have already carried out disclosure of bank statements pursuant to the Court’s order of 27 April 2015 where the 1^st and 3^rd plaintiffs in their supplemental list of documents dated 18 May 2015, disclosed their bank statements from 20 July 2009 to October 2012. 

35.  There appears to be no discernment by the 1^st defendant in his request for the documents to be disclosed under the Class 1 documents.  The parties complain that this application for further and specific discovery is a fishing expedition.  I have to agree with their grounds of complaint given the generality and width of the application.  In addressing and considering the present application, the parties and the Court have been heavily and unnecessarily burdened in relation to its terms and scope. 

36.  In respect of the Class 2 documents, it is submitted by Essence that the documents do not exist and therefore are not in its possession, custody or power.[3] Equally, the plaintiffs also confirmed that they do not have these documents in their possession, custody or power.[4] 

37.  In respect of the Class 3 documents, it is submitted by Essence that this class of documents are not relevant for the same reasons as the Class 1 documents, although it is further submitted that there is no independent basis to order specific discovery for this class of documents.  The plaintiffs also make the point that this request is misdirected at them. 

38.  They note that the explanation now given by the 1^st defendant in his 23^rd Affirmation as to the relevance and necessity of these documents in the present application is the same as the explanation given by him in his 8^th Affirmation filed in support of the previous application which was rejected by the Court.  They further note that this application is for the most part identical to the previous rejected application.  The previous application was rejected by the Court mainly because it was directed at the plaintiffs and because it also lacked evidential materiality to the original claim.

39.  The 1^st defendant makes the point that the April 2015 decision was essentially refused because it was directed to the plaintiffs instead of Essence and that since that decision the parties have made amendments to their respective pleadings and evidence has been filed and exchanged which makes the issue of Essence’s beneficial ownership evidentially material. 

40.  It is claimed by the 1^st defendant that he requested the documents of Essence through his solicitors by letter dated 27 April 2015.  A reply was made on 31 July 2015 where Essence’s solicitors said that their client’s discovery of relevant documents was not due until 3 August 2015.  As already mentioned, that does not fully reveal what occurred.  The solicitors for Essence replied on 5 May 2015 and refused the request on the grounds of relevance and the width of the documents sought. 

41.  The 1^st defendant also claims that he was occupied with other matters in relation to these proceedings from August 2015 to May 2016 and that explains the delay in making the application.  He further claims that he indicated his intention to make the present application at the hearing in these proceedings on 19 February 2016. 

42.  Even so, this seriously questions why it has taken the 1^st defendant this long to make basically the same application but this time directed to Essence instead of the plaintiffs, although the plaintiffs have also been mentioned in some of the orders sought. If it was of such significance to the 1^st defendant’s case, why has it taken so long for this application to be made?  It should be noted that both Essence and Mr Cheong were made parties to the counterclaim by the 1^st defendant on 31 March 2014.  So they were parties to these proceedings back when the previous specific discovery was made and yet they were not made the subject of an application for specific discovery until now. 

The question of delay

43.  I must say that I do not find any of these matters provide an adequate explanation for the lateness of this application. Essence has been a party to these proceedings since March 2014 and that was well before the previous application for specific discovery.  I therefore have to consider the timing of the application and the impact it will have on the parties from whom disclosure is sought.  This has been an intense and strenuously fought litigation that has now been running for over three years which has been inundated with numerous interlocutory and pre-trial applications. 

44.  A previous set of trial dates were aborted a little under a year ago largely due to a last-minute application from the 1^st defendant.  In similar circumstances, this application has been made some four months before the trial is fixed to commence.  The application seeks disclosure from the parties of an array of banking and financial records that traverse many years.  It will place an onerous burden on the parties and would require them to carry out an extensive disclosure exercise at a time when they would otherwise be preparing themselves for trial.  There is also concern that the outcome of this disclosure exercise may spawn a number of unnecessary and collateral applications.  It is not insignificant that this application comes at a time when all pre-trial matters were in the process of being completed in readiness for trial, including the filing of the experts’ joint note on 22 July 2016. 

45.  Upon careful reflection, I have decided not to reject the application because of the unexplained and unacceptable delay.  It will, however, have a bearing on the question of costs.  I had to strike a balance between the issue of delay on one hand, and the relevance of the disclosure on the other.  I have narrowly come down in favour of the latter. 

The terms of the disclosure

46.  There is also the question whether the application for specific discovery is properly directed to the issue to which it is said to relate.  My overall impression is that the terms of the application are broad and wide and lack the necessary specificity. 

47.  A sweeping request for documents without displaying the appropriate particularity, relevance and necessity is unacceptable.  It has to be directed to a specific issue or issues in the pleaded cases and confined to what is necessary and no more.  No attempt has been made by the 1^st defendant to properly address his application.

48.  The purpose of the present application as claimed by the 1^st defendant is to discover documents showing the beneficial ownership of Essence.  But no such documents have been requested, and instead the 1^st defendant wants a wide range of banking and financial records to identify and trace any financial dealings between Essence and the plaintiffs.  Whilst it does raise an eyebrow as to the width and scope of the application, it is arguable that certain banking and financial records could or would reveal the financial dealings or stake that a person has in a company which may lead to determining what if any beneficial interest he may hold in it. 

The order for disclosure

49.  In general terms, I am prepared to accept the relevance of certain documents within the Class 1 documents as part of the 1^st defendant’s case.  I am not satisfied that the Class 2 and 3 documents should be the subject of disclosure.  The Class 2 and 3 documents are not documents in the possession, custody or power of the plaintiffs and so no order should in any event be made against them for disclosure of these documents.  The same applies to Essence in relation to the Class 2 documents.  In relation to the remaining documents, I am of the view that the 1^st defendant is merely fishing to see what is out there. 

50.  I will grant the application to the extent that Essence is to file and serve a list of documents which are or have been in its possession, custody or power, consisting of its bank records in relation to (1) the payments of funds from Kudeta BVI, namely, remittances of dividends or distributable profits, to Essence and any payment or transfer of those funds to another from September 2010 to October 2012 and (2) the payment of the proceeds of sale of Essence’s shareholding to L Capital and any payment or transfer of those funds to another from January to February 2014. 

51.  I will not make an order against the 1^st and 3^rd plaintiffs to disclose their bank records from September 2010 to October 2012, as they have already disclosed them pursuant to my order arising from the April 2015 decision.  I will make an order against the 1^st and 3^rd plaintiffs to disclose their bank records in relation to the receipt of funds from Essence of the proceeds of sale of Essence’s shareholding to L Capital for the period from January to February 2014. 

Discovery complaints against the 1^st defendant

52.  The plaintiffs in their written submission also complain about the 1^st defendant’s failure to properly carry out his discovery obligations in these actions.  They specifically complain that discovery by the 1^st defendant has been carried out either in a piecemeal fashion or not at all as required.  They note that previously undisclosed documents have been referred to or produced by the 1^st defendant’s expert.  They also note that previously disclosed documents are redacted copies of bank statements. 

53.  The plaintiffs submit that the 1^st defendant is withholding relevant documents or parts of the relevant documents and is choosing to make selective discovery in these actions. 

54.  I will hear the parties on this matter and address it at the case management conference to be held on 30 August 2016. 

The question of costs

55.  On the question of costs, my preliminary view is to rule against the 1^st defendant even though he has, to the very limited extent that I have ordered, succeeded in his application.  First, because of the generality and width of his application which has unnecessarily occupied the parties in order to address its terms and scope.  Secondly, because of the inordinate and unexplained delay that has been occasioned by the application.  As I have noted, it could very well have adverse and unfair consequences on the other parties as well as disrupting the proceedings altogether. The order granted does touch on a relevant issue in the defendant’s case, but as I indicated I was close to refusing it because of the inordinate delay and the stage of the proceedings when it was made. 

56.  I will therefore make an order nisi that the 1^st defendant pays the costs of the plaintiffs and Essence forthwith.