CULTURECOM LTD AND OTHERS v. CHIN KWOK CHUNG AND OTHERS

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

-----------------

-----------------

JUDGMENT

-----------------

1. This is an appeal from a decision of Master Cannon given on the 18th of September 1995 dismissing an application made by the 3rd defendant in paragraph 2 of a summons issued by that defendant and dated the 8th of May 1995.

2. The order which was sought by the 3rd Defendant in that summons was that the plaintiffs make specific discovery of certain documents listed in a schedule to the summons and the schedule reads as follows:

"Schedule - all papers and documents relating to the following actions:

Save and except those papers and documents already discovered by the plaintiffs."

3. When she appeared for the 3rd defendant today, Miss Rattigan informed the court that the application under (b) in the schedule would not be pursued, but she sought to have the Master's order reversed and to obtain specific discovery as prayed in the original summons.

4. The principles governing an application for specific discovery are well-known. They are discussed at page 458 of the 1995 Edition of the Supreme Court Practice Vol. 1 and they have been summarised in the judgment of Cheung J. in the Hong Kong case of Lee Nui Foon v. Ocean Park Corp. (No. 1) [1995] 2 HKC 390. There is no dispute between the parties as to the applicable law, but it may be helpful to refer to certain principles to which reference has been made in the present case.

5. An important principle is this. Where a claim to see a class is made, the class must not be defined or described so widely as to include documents which are not relevant to the issue. Molnlycke AB v. Proctere Gamble Ltd. No. 3 [1990] RPC 498 approving Fuji Photo Film Co. Ltd. v. Cast Paper Ltd. [1989] RPC 713. The pre-requisites mentioned above must be established in respect of the class described as a class not as regards some documents in the class only.

6. The plaintiffs have already delivered a very long list of documents to the defendant and they say that they have discovered all documents which relate to the issues which are to be tried between the plaintiffs and the 3rd defendant. The 3rd defendant does not accept that and has asked for more: in particular it has asked, as appears from the summons, for "all papers and documents relating to the actions listed".

7. The plaintiffs' claim against the 3rd defendant as set out in the Amended Statement of Claim amounts to allegations of breaches of fiduciary duty by the 3rd defendant as a director of Jademan. The plaintiffs' case is that the 1st and 2nd defendants were trying to get long term control of the 1st plaintiff by packing the Board of Directors with their nominees, and there was a mutual bestowing of benefits between the directors, in particular the 1st, 2nd and 3rd defendants. It is the plaintiffs' case that in attempting to consolidate their control, the 1st and 2nd defendants instituted legal proceedings against Sally Aw Sian and the Sing Tao Group, and together with the 3rd and 4th defendants attempted unsuccessfully to effect a share placement to one William Doo.

8. There does not seem to be an issue as to whether certain proceedings were taken and certain acts were carried out. The main issue is the motivation of the 3rd defendant and whether in doing what he did, he was acting in good faith or whether he was acting in breach of his fiduciary duty to the company of which he was a director.

9. The struggle between certain parties for control of the Jademan Group gave rise to numerous sets of legal proceedings and it appears to be the 3rd defendant's case that since all the proceedings have some connection with the struggle that was going on, they must relate to the issues to be tried between the plaintiffs and the 3rd defendant in such a way as to make each and every piece of paper which relate to each and every one of the actions listed in the schedule, relevant to and probative in relation to the issues which remain to be tried.

10. The first difficulty is that the very definition of the class of documents as "all papers and documents relating to" a particular legal action is far too wide to permit a person faced with an order in those terms ever to be sure that he has complied with it. Secondly, it is not enough that a document relates in some way to proceedings. I have already set out above the criteria for making an order for specific discovery of all papers and documents relating to High Court Miscellaneous Proceedings No. MP3182 of 1989, it is said that the proceedings were instituted by the 2nd defendant and a company called Tabor against Tony Wong, James Capel (Far East) Ltd., Liu Chong Hing Bank and Standard Chartered Bank for a directory order in relation to the shares in the 1st plaintiff which were subject to a charge pursuant to an agreement made by Tony Wong with Tabor. It is said that those proceedings are relevant to the present action because it is alleged that the proceedings MP 3182 were instituted by the directors in order to frustrate any attempt by Tony Wong to redeem his portfolio under the Tabor loan agreement, and therefore to consolidate their control, and it has been submitted on behalf of the 3rd defendant that "documents in these proceedings will therefore be of relevance to the court's determination of the plaintiffs' allegation in this regard".

11. In relation generally to the various proceedings referred to, it appears to be the 3rd defendant's case that in the papers relating to those proceedings, there may be some documents which, if the defendant saw them, might be considered to be relevant to the issues in these proceedings, but Miss Rattigan was unable to name a particular specific issue and identify a document or a class of documents which could be shown to be directly related to that issue in such a way as to satisfy the requirements for specific discovery.

12. As a matter of common sense, it must be that many documents relating to the various proceedings referred to must be quite irrelevant to the issues to be tried between the plaintiffs and the 3rd defendant, and on that ground alone, the 3rd defendant's application must fail.

13. It is not enough to show the possible relevance of some parts of a class of documents: it is necessary to identify the documents or show that the whole class must be relevant. In his fourth affirmation, the 3rd defendant says in relation to certain exhibits, documents in his possession, "these exhibits should show that their respective pleadings are relevant to the issue raised in the amended Statement of Claim". It is not sufficient to speculate as to whether documents might be helpful. It is necessary to demonstrate that they satisfy the criteria.

14. The plaintiffs strongly object to this application not least because of its lateness. They have delivered a long list of documents. The 3rd defendant has at last and very late delivered his witness statement to the plaintiffs and if an order for specific discovery were to be made at this stage, the effect would be to prevent the plaintiffs from setting down this action for trial and it is the plaintiffs' contention that the application is a manoeuvre designed to delay the resolution of the proceedings.

15. There are some specific objections in relation to HCMP No. 3182 of 1989. The plaintiff points out that none of the plaintiffs in the present action were parties to the proceedings specified. In those circumstances, it is difficult to see how the 3rd defendant can show that any of the plaintiffs have the documents in question in their possession, control or power. And it is submitted that the relevance of the documents to the issues in the present case has not been demonstrated, the defendant appears to be interested in particulars of a settlement achieved in 1993, but the issue in this case is the motivation for the start of the proceedings in 1989 to 1990.

16. So far as High Court Action 7105 of 1989 is concerned, again it is pointed out that none of the plaintiffs in this action were parties to the proceedings specified and there is no evidence to show the relevance of a particular document or class of documents.

17. In HCCL 15 of 1990, again it is submitted and rightly that there has been no evidence to demonstrate the relevance of any documents in that case and I should say here that generally, I take account of the fact that a large number of documents have already been disclosed in relation to various actions.

18. HCA 4431 of 1990 is a case where the 3rd defendant himself was a party and in those circumstances, the plaintiff complains that this is what Mr. Kat for the plaintiffs describes as a "botheration application" and quite unjustified.

19. In HCA 5236 of 1990, it is pointed out on behalf of the plaintiffs that a large number of documents have already been discovered and may be found in the long list already delivered by the plaintiffs. The class of documents already disclosed includes the trial bundles, the pleadings file and the correspondence file. Again it is submitted that the relevance of any particular document other than those already disclosed has not been demonstrated.

20. In relation to this particular matter, a question has been raised as to what happened to an appeal brought against a decision of Mr. Justice Liu to award costs on an indemnity basis. It may be of interest to find out what happened, but the fact is that the plaintiffs have specifically pleaded the quantum of damage they say they suffered as a result of the misconduct of the defendant. They have specified the amounts of money which they have lost and they say that they have discovered the relevant documents.

21. The defence as pleaded simply denies liability. There is no pleading denying the loss or challenging the quantum specifically, and it is very difficult to see how any case could be made out for the proposition that papers relating to an appeal which counsel for the plaintiffs thinks came to nothing can be said to be relevant to a live issue in these proceedings. Again the 3rd defendant himself was a party to the action.

22. With regard to HCMP 424 of 1990, none of the plaintiffs were parties to the proceedings in question, and in those circumstances, it has not been established, even prima facie, that any of them were in possession or control of or had power over the relative papers. The relevance has not been stated other than in the general terms which I have already described. The plaintiffs have already disclosed one document in relation to the proceedings on the basis that it may be relevant, but the 3rd defendant has not referred to it or explained why he needs any more.

23. In HCMP 2965 of 1990, again the plaintiff complains that there is no explanation from the defendant in his fourth affirmation as to what the action relates to or how it is relevant to the matters at issue and, once again, there is no evidence to establish possession, custody or power on behalf of any of the plaintiffs.

24. In May, when the defendant made his fourth affidavit, he had not produced his witness statement, and it appears that part of the reason for issuing the summons may have been the hope of obtaining information in order to enable him to make it, but now without the documents he has delivered a witness statement to the other side.

25. The final submission made on behalf of the plaintiffs is that the facts relied upon by them are set out in full in the pleadings and they have discovered a large number of documents. It is their case that the 3rd defendant was an active director at the material time; was involved in the transactions in relation to which they make complaint and has failed to show why he needs "all papers and documents relating to" other proceedings, several of which are quite unconnected with the matters in question in this action.

26. I am satisfied that the 3rd defendant has not made out a case for an order in the terms sought. As drafted, it is far too wide and would be quite unjust. It is not enough to say that a particular class of documents may be relevant: it is necessary to be much more specific and to identify the issue, the document and the manner in which it relates to the issue and is probative. The 3rd defendant also needs to show that an order is necessary for the determination of the issues to which the documents are said to relate: c.f.

Rome & another v. Punjab National Bank.

27. The 3rd defendant has failed to show that discovery of the mass of papers that must be represented by the list in the schedule is necessary. In fact, I take the contrary view. It is not necessary. The application is a fishing expedition. It is misconceived and it will be dismissed.