David Electrical Engineering Ltd. v. Billy Lok & Partners General Contractors Ltd.

DCCJ12458/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 12458 OF 2001

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R U L I N G

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1. This is a summons for specific discovery. The claim is for $98,000. The plaintiff was a nominated subcontractor of the defendant at a building site. The amount which the plaintiff says it is owed by the defendant is a little over $98,000. The defendant denies that it owes that amount, but it is accepted, and indeed averred on behalf of the defendant, that the amount owing is, in round figures, $62,000.

2. The defence is put in this way. That the plaintiff was one of a number of nominated subcontractors. There were also further subcontractors - although it is not absolutely clear what the distinction between a nominated subcontractor and a subcontractor is - and that the defendant then, by process of discussion and negotiation, arrived at a consensus and indeed an agreement with all those subcontractors to accept a reduction in their invoices and in that way the defendant was able to come to an overall agreement with the employer on the contract itself.

3. The plaintiff says that it certainly was not a party to any such consensus or agreement with the defendant. The purpose of this application for specific discovery is to elicit from the defendant all manner of documents relating to this alleged consensus with the other subcontractors.

4. In order to pursue this the plaintiff has filed a request for further and better particulars. That request was answered and in general terms it is said in the answer that the agreement was reached orally with the various subcontractors. But it is also right to say that there has been disclosure of five letters from subcontractors which set out the terms of an agreement and those letters evidence the payment out to those subcontractors pursuant to that agreement.

5. In coming to a conclusion on this matter I am very conscious of the fact that this is an extremely modest claim and far too often in this court, which of course is well used to dealing with modest claims, the incidence of costs does tend to get completely out of hand and costs are then allowed to dominate the whole of the litigation and I am anxious to prevent that.

6. But, that having been said, it seems to me that Ms Liu on behalf of the plaintiff, does have a real point here. If there has been an agreement of this sort between the defendant and its subcontractors and payment out has been made pursuant to that agreement, it seems to me only right that the defendant should, at the very least, produce the final product of that agreement which I suspect is in the form of a letter of the same type as the five that have already been disclosed.

7. And so to that limited extent I am going to order discovery. I think this is relevant to the issue and that discovery of this sort should be ordered.

8. And so I order that the defendant do within 28 days discover by list with inspection 7 days thereafter the letters or documents evidencing the final payment to all the defendant's nominated subcontractors and other subcontractors which evidence the alleged consensus and/or agreement referred to in paragraphs 9 and 11 of the defence.

9. That is the extent of the order that I am proposing to make. I think it would be going much too far to then go on and order the whole range of documents which Ms Liu's summons asks for. I think that it both unnecessary and would only be conducive to adding to the costs of the litigation which would be wholly out of all proportion to the value of the claim. So that is the order.

(Discussion re costs)

10. My sense of this is that I think, even if given time, the defendant would have been most unlikely to comply with any part of this summons. But, on the other hand, it is right to say that the plaintiff has not achieved everything that it was seeking by this summons. I think the proper order for costs is plaintiff's costs in the cause. They have obviously had to come here to get such discovery as I have ordered, but I think where they have in fact failed to get all of the discovery, the best or the most appropriate order is to say plaintiff's costs in the cause. In that way, if of course they were to succeed in the action they would get these costs. If they were to fail in the action and the defendant were to get his costs of the action, then at least the plaintiff is protected to the extent that they would only have to bear their own costs of this summons.