HAPPY DYNASTY HOLDINGS LTD v. CHINA STATE CONSTRUCTION ENGINEERING (HONG KONG) LTD

HCMP 1658/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 1658 OF 2015

(ON AN INTENDED APPEAL FROM HCCT NO. 21 OF 2014)

________________________

________________________

________________________

JUDGMENT
________________________

Hon Lam VP (giving the Judgment of the Court):

1.  This is an application for leave to appeal against a decision of Mimmie Chan J as the judge in charge of the Construction and Arbitration List in respect of a specific discovery application by the plaintiff. The learned judge [“the Judge”] refused to grant discovery on 21 May 2015. She gave a short judgment in which the grounds for refusing specific discovery were set out in these paragraphs:

“ 2. Having heard submissions from counsel, for which I thank them, the only real issue for determination at trial is whether or not there was a binding agreement made between the parties as a result of the meeting and the email of 27 June.  It is not in dispute that the subcontracts in question were not awarded to the plaintiff.  If there was a binding agreement, the defendant was in breach in awarding the subcontracts to a third party.  Why it did so is irrelevant to the question of breach.  I am not satisfied that the documents sought by the plaintiff are necessary for the determination of this main issue at trial, of whether or not there was an agreement made.

3. I am not satisfied that the documents identified in items 2 and 3 of the Schedule to the summons are relevant to the matters in question.  Documents which relate purely to credit, and to impeach the credit or credibility of the opposing party will not be ordered. 

4. Even if the documents identified in the Schedule can, in any way, be said to be relevant in the wide Peruvian sense, I am not satisfied, in view of the pleadings, the issues which are in dispute, and the discovery already made by the defendant, that they are necessary either for disposing fairly of the cause, or for saving costs.”

2.  The plaintiff applied for leave to appeal before the judge.  Leave was refused by the judge on 25 June 2015.

3.  The plaintiff now renews the application for leave to appeal before us.  The application is supported by a statement prepared by Mr Cooney SC.

4.  The application for leave is opposed by the defendant.  We have before us a statement in opposition prepared by Mr Lam SC counsel for the defendant.

5.  We have read the documents filed in light of the statements prepared by counsel.  The documents placed before includes the written submissions at the court below.

6.  It has repeatedly been said that decisions on specific discovery, especially when it is a decision by a judge in charge of a specialist list, is very much an exercise of discretion in case management and this court will only interfere on the rare occasions where it can be shown that the judge’s exercise of that power was clearly wrong, see Shine Grace Investment Ltd v Citibank NA HCMP 258/2012, 2 August 2012; Shine Grace Investment Ltd v Citibank NA HCMP 3177/2014, 9 February 2015.

7.  With respect, the plaintiff has not come remotely near to showing that the Judge’s decision in the present instance was clearly wrong. 

8.  There is no suggestion that the judge had applied the wrong test in the exercise of her discretion.  The Judge was clearly alive to the Peruvian Guano test as she made express reference to it in her judgment.  The contentions of Mr Cooney are, in substance, attacks on how the Judge applied the Peruvian Guano test in assessing relevance.  In that respect, we do not think Ngan In Leng v Chu Yuet Wah [2013] 1 HKLRD 717 takes the matter further.

9.  We are not impressed by Mr Cooney’s submission that the Judge misapprehended the basis on which the plaintiff argued that the documents were relevant.  The judgment of 21 May 2015 was an ex tempore judgment given immediately after hearing the submissions of the parties.  Parties filed detail written submissions which the Judge must have read before the hearing.

10.  In respect of the documents prior to 27 June 2013, we do not see any reasonable basis for suggesting that there was an internal document which actually recorded a firm decision by the defendant that the contract would be awarded to the plaintiff if the price were to come down to a certain level.  It is suggested that there could be some analysis of quotations put forward by various contractors.  In our view, even if that were true and such analysis shows that the price quoted by the plaintiff was not as competitive as other contractors though in other respects the plaintiff was on par or even better than other contractors, that would be consistent with the defence case as to what were discussed at the meeting of 27 June 2013.  The discovery of those materials would not make the plaintiff’s case more plausible.    

11.  In respect of the documents from 27 June to 31 July 2013, it is difficult to see how those documents would advance the plausibility of the plaintiff’s case about the meeting of 27 June 2013 bearing in mind that there was a change in the conditions of the contract in July (which led to a 7^th tender being submitted by the plaintiff, and presumably also by other contractors).

12.  The Judge no doubt had these matters in mind when she said she did not find the documents to be relevant.

13.  As had been said in Shine Grace Investment Ltd v Citibank NA, HCMP 3177/2014:

“ An appeal, particularly an interlocutory appeal against the exercise of discretion, is not the forum for a re-running of arguments on relevance which had been duly rejected. An appellant has to show that the judge had clearly gone wrong.”

14.  We are not able to say that the plaintiff has any reasonable prospect of success in contending that the Judge was clearly wrong in her conclusion as to relevance.  Further, we are of the view that the Judge was plainly right in her assessment that these documents are not necessary for disposing fairly of the cause or for saving costs.  It strikes us that the application for specific discovery is very much a fishing exercise in nature. 

15.  Nor do we regard it as reasonably arguable that the Judge took irrelevant matter into consideration when she referred to the irrelevance of why the defendant breached the contract in light of the plaintiff’s written submissions before the Judge (as highlighted by Mr Lam at paragraph 8(b) in his statement in the present application).  

16.  The application for leave is dismissed. 

17.  We are also of the view that the application is totally without merit.  Pursuant to Order 59 Rule 2A(8), the Rules of the High Court, we make an order that no party may request our refusal of leave to be reconsidered at an oral hearing inter partes.

18.  We further order the plaintiff to pay the costs of the defendant in this application on indemnity basis.  As this court had said on a number of occasions in the past, hopeless applications for leave to appeal should be discouraged and they will usually be visited with indemnity costs.  Based on the defendant’s statement of costs, which we find to be reasonable, we fix the costs at $86,128.