XCHRX CROWN LTD. v. WONG HON CHEE, DAVID

HCA9593/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.9593 OF 2000

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REASONS FOR DECISION

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1. This is an appeal by Wong Hon Chee, David ("the defendant") against the Order of the Master made on 23 March 2001 dismissing his application for discovery against Crown Limited ("the plaintiff"). The defendant gave his submissions in Chinese and Mr Jeevan Hingorani, counsel for the plaintiff, rendered his submissions in English. At the conclusion of the submissions, I dismissed the appeal and explained my reasons for so doing in Cantonese. I now reduce my reasons into writing.

BACKGROUND

2. In this action, the plaintiff claims against the defendant AUD3,060,000, being the balance of a credit facility granted by the plaintiff to the defendant for the purpose of gambling at the plaintiff's casino in Melbourne, Australia. The defendant denies the credit facility and any liability for it. Alternatively, the defendant seeks to set off the claim by way of a counterclaim in damages for breach of agreement.

3. The defendant avers that he was a licensed junket operator at the plaintiff's casino and that he was entitled to commission based on the amount of gamblings of the gamblers he introduced to the plaintiff's casino. His case is that there was an oral agreement between him and the plaintiff that in relation to gamblers introduced by him, the plaintiff would not grant junket operator licences or, without his consent, grant credit facilities to them and would not tout for business or provide betting services directly to them. The defendant says that the plaintiff was in breach of this agreement by granting three operator licences to four named persons, granting credit facilities to five named persons and touting with respect to three named persons. All these named individuals are said to be the defendant's clients. The counterclaim is for loss of commission in the sum of AUD6,392,000, calculated on the average betting of 11 named individuals, only eight of whom have been identified in the particulars of the three breaches pleaded.

4. The plaintiff, in its Reply and Defence to Counterclaim, denies the oral agreement, the breaches and the damages claimed. The plaintiff also denies that the defendant had introduced gamblers to its casino since 1996 and the entitlement to commission as alleged. The plaintiff, however, avers that there was a written junket agreement between the parties which incorporated the plaintiff's Non-Exclusive Overseas Gaming Promotion Agreement and that the plaintiff has discharged all its obligations thereunder.

5. The plaintiff had requested for further and better particulars of the alleged oral agreement and breaches. Nearly all the requests were not answered either on the basis that the defendant did not understand the requests or that he could not remember.

6. Discovery and exchange of witness statements had also taken place. The action was set down for trial in the fixture list and the trial is fixed for seven days from 21 to 29 January 2002.

THE APPLICATION

7. On 16 March 2001, the defendant took out a summons applying for an order that the plaintiff filed a supplementary list of document covering the following documents :

(i) All records related to the junket to the casino arranged by the defendant in June 2000, including at least :

(a) the chip vouchers signed by the defendant at the casino;

(b) the documents for calculating the rolling of clients on that occasion;

(c) the documents for the calculation of commissions; and

(d) all other documents relevant to the question of money on that occasion

("the 1st category")

(ii) The licences and credit provided by the casino to 11 named clients of the defendant and the entertainment records of at least five visits they made after obtaining their respective licences

("the 2nd category")

The 11 clients named in the 2nd category are the 11 individuals on whose average betting the defendant's claim of loss and damage is based.

8. The principal reason advanced by the defendant for the application is that the documents are crucial to his defence and counterclaim. The plaintiff opposes the application on a number of grounds. In respect of the 1st category of documents sought, the plaintiff had shortly before the hearing before the Master filed a second list of documents disclosing further documents within the 1st category. As to the 2nd category of documents sought, the plaintiff objects on the basis that part of them are irrelevant and also that it is prohibited by the Australian law from divulging the information without the consent of the persons named. The plaintiff further requires the defendant to provide the names of these persons in English as appearing on their passports and their passport numbers.

REASONS FOR REFUSAL

(1) The applicable principles

9. In requesting for a supplementary list of documents, the defendant is in effect seeking from the plaintiff a further and better list of documents. The application, therefore, falls within Order 24, rule 3, Rules of High Court.

10. Generally speaking, parties in civil proceedings are obliged to disclose documents that are relevant to the matters in question and that which are or have been in their possession custody or power. An order for a further and better list of documents may be made where it appears from the list itself, or from the documents referred to in it, or from admissions, that the party making discovery has or had other relevant documents in his possession, custody or power : Hong Kong Civil Procedure 2001, para. 24/3/7. The burden is on the party seeking discovery to prove relevance, possession custody or power and the existence of further documents.

11. Discovery may be refused where the court considers that the discovery sought is not necessary either for disposing fairly of the matter or for saving costs : Order 24, rule 8, see also Hong Kong Civil Procedure 2001, paras. 24/8/1 and 24/0/12. A party will also not be compelled to give discovery which will expose him to a penalty : Hong Kong Civil Procedure 2001, para. 24/5/33. The burden is on the party opposing discovery to establish that the discovery sought is unnecessary or that the documents are privileged.

(2) The 1st category of documents

12. The relevance and possession custody or power of the 1st category of documents are not in issue. It, therefore, remains for the defendant to show that there are further documents in the plaintiff's possession custody or power. The plaintiff had filed a total of two lists of documents. It will appear that item nos. 3 to 9 of the 1st list of documents and item nos. 2 and 3 of the 2nd list of documents are documents falling within the description of the 1st category of documents.

13. The defendant has not pointed to any material to show that the plaintiff's two lists are incomplete or that the discovery is inadequate. As a matter of fact, the defendant has not inspected the documents disclosed by the plaintiff. The defendant is not really in a position to say that the plaintiff has further relevant documents which it has not disclosed. The application in respect of the 1st category of documents therefore fails.

(3) The 2nd category of documents

14. There are three types of documents within the 2nd category. The first type relates to junket operator licences, the second concerns credit facilities granted by the plaintiff and the last relates to the entertainment records of the named persons. The defendant's pleaded case is that only three licences were granted to the four persons named in paragraph 5 of the Defence and Counterclaim. There is therefore no basis for seeking documents relating to the licences granted to the other named persons, when it is not alleged that these other persons had been granted operator licences. For the same reason, the defendant cannot seek discovery of entertainment records of these other persons in respect of visits made after they obtained the licences. As to the second type of documents under the 2nd category, the defendant only pleads that credit facilities had been granted to five persons named in paragraph 6 of the Defence and Counterclaim. The defendant has not demonstrated the relevance of the documents on the credit facilities granted to the other six named persons.

15. Furthermore, in relation to three of the persons named in paragraph 1(ii) of the summons (黃秋平、鄺華甫、連超), they are not pleaded as persons to whom junket operator licence or credit facilities had been granted. They are also not among those said to have solicited or touted by the plaintiff under paragraph 7 of the Defence and Counterclaim. The relevance of documents relating to them has not been shown. This remains so notwithstanding that the defendant has included the average betting of these three persons in estimating his loss and damage, as pleaded in paragraph 8(a) of the Defence and Counterclaim.

16. The lack of relevance aside, the plaintiff also objects to an order for discovery on the 2nd category of documents on the ground that they are prejudiced. The plaintiff has adduced evidence that under section 151 of the Victorian Casino Control Act 1991, the plaintiff cannot divulge information with respect to the affairs of persons including customers of the casino without the express authorization of such persons. Under section 20 of the same Act, any contravention of the Act constitutes a ground for disciplinary action by the Victorian Casino and Gaming Authority. The sanctions for such disciplinary action include cancellation or suspension of the casino licence. On the basis of the Act, the plaintiff argues that an order for discovery should not be made unless the defendant produces evidence of express authorizations given by the named persons together with proper verifications of the identity of the persons giving the authorization.

17. The defendant has not challenged the plaintiff's assertion that it will be exposed to penalty for disclosing the information or document sought without proper and express authorization. Indeed, the defendant had procured three of the eleven named persons to sign authorizations for release of their documents. This suggests that he accepts the plaintiff's claim of privilege is properly based. In my view, the plaintiff's claim of privilege is established. That being the case, it is incumbent upon the defendant to obtain the necessary authorizations from the persons involved before the plaintiff can be called upon to make discovery of any relevant document relating to them. In addition, among the three persons who had signed the authorizations is Mr Kwong (鄺華甫). As pointed out, the relevance of him and of documents relating to him is not established.

18. I turn next to the argument that the defendant should provide the names of the 11 persons in English as appearing on their passports and the numbers of their passports. It is not in dispute that the plaintiff maintains a computer system called "SYCO" that contains the information covered by the 2nd category of documents. The plaintiff however says that the system was English based that the records kept are based on the customers' English names and other details as appearing on their application forms, including their names in English and passport numbers. Accordingly, the plaintiff argues that an order should not be made when the defendant has only supplied the Chinese names and the Hong Kong Identity Card numbers of some of the 11 persons. Before the defendant issued the summons, the plaintiff had written to the defendant to request for the English names and passport numbers, but the defendant replied that he was unable to provide it.

19. I am of the view that the plaintiff's objection is a valid one. The defendant does not dispute, whether by evidence or submissions, that the "SYCO" system is English based and that it records the customers' names in English and their passport numbers. On the contrary, the statement of Ng Mei Ling, Candy affirmed on 18 April 2001 and filed in support of the application supports the plaintiff's contentions. Miss Ng, who was formerly an employee of the plaintiff, says in her statement that the "SYCO" system records the passport details of the customers. She does not say that the system records the Chinese names and Hong Kong Identity Card numbers of the customers. What Miss Ng also says is that it is not possible for the plaintiff to say that they do not know which players the defendant is talking about because two of the plaintiff's personnel know these players personally. Quite apart from the fact that Miss Ng does not specify in the statement who are the players that she is referring to, the fact that the plaintiff's staff know the players personally is no answer to the objection raised. When it comes to searching the records and the computer system, it is a prerequisite that the plaintiff has the proper tool, hence the basic data, to conduct the search. The plaintiff's casino receives over 4,000 customers a year. It is unreasonable and too cumbersome an exercise to require the plaintiff to go through the records between 1996 and now to see whether any of its customers bear English names that resemble the transliterations of the 11 Chinese names given by the defendant. This is particularly so when the passport numbers are not available to verify the search, bearing in mind that different Chinese characters can give rise to the same English transliteration and vice versa.

20. Mr Hingorani indicates that the plaintiff is prepared to consider the defendant's request if the English names and passport numbers are given, subject to the questions of relevance and authorizations. That in my view is a reasonable stance to take. The position is that these 11 persons are said to be the clients of the defendant. The defendant should have the means of contacting them to obtain the information, even if he has not already had them for the purpose of arranging the junkets or visits to the casino(s). It is not necessary, and certainly not in the interest of saving costs, to compel the plaintiff to undertake the wide-ranging discovery exercise applied for by the defendant.

21. There is one final matter that I need to deal with. The defendant has repeatedly emphasized the fact that the documents or information sought are crucial to his Defence and Counterclaim. This may well be. However, this does not afford any ground for ignoring the principles applicable to applications for discovery. Afterall, it must not be forgotten that the defendant bears the burden of proving his defence and counterclaim. He cannot expect the plaintiff to assist him in discharging that burden. Although he is entitled to seek discovery on documents relevant to his case, he has to come within the confines of the rules and procedure.

CONCLUSION

22. For the reasons aforesaid, the Master's order dismissing the defendant's application is correct. The appeal is therefore refused with costs to the plaintiff against the defendant, to be taxed if not agreed.