MIDLAND REALTY INTERNATIONAL LTD. v. MIDLAND REALTY INTERNATIONAL LTD.

HCA 3065/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3065 OF 2001

(Transferred from DCCJ No. 21237 of 1999)

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J U D G M E N T

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1. There are two applications; the first, an appeal against a Master's decision dismissing the defendant's application for further and better particulars, the second, the plaintiff's application for specific discovery.

History

2. The proceedings derive from the sale and purchase of an apartment in which the defendant was the owner and vendor. The parties were introduced by the plaintiff, a licensed real estate agent, who prepared the provisional sale and purchase agreement under the terms of which it was appointed as agent and entitled in the usual manner to commission payable by both parties. The defendant's share of this came to $88,000. The transaction proceeded to completion but the defendant declined to pay the commission or any part of it. A writ resulted issued by the plaintiff in March 1999, followed by the statement of claim in November 1999. The defendant filed its defence and a counterclaim in the same month. The defence is that the plaintiff as its agent failed to serve it honestly and in good faith; in particular, that it did not disclose to the defendant the apartment's true worth, thus causing the defendant to sell it at a price less than it could have bargained for. The counterclaim is for that consequential loss. The plaintiff filed a reply and defence to counterclaim in December 1999. That same month the defendant requested further and better particulars; the plaintiff responded in the next month. The defendant did not accept as adequate that response and in August 2001 applied for further and better particulars. The next month the plaintiff made what the defendant found to be a satisfactory response to one of the requests. The application as to the remaining requests came before Master Lung in November 2001 when he dismissed the same. The first matter is the appeal against that dismissal.

3. At a directions hearing also in November 2001 it was ordered that the parties exchange and file lists of documents with consequent inspection. The plaintiff not being satisfied that the defendant has or had complied applied for discovery of specific documents. That is the second matter.

Specific Discovery

4. At the hearing I was informed at the outset that of the four matters applied for by the plaintiff under this head it no longer was pursuing those at paragraphs 1 and 2, and the parties had agreed those at 3 and 4 with the time to comply extended to 21 days. What was not agreed was where the costs should fall. Mr Harris for the plaintiff asked for costs; Mr Dawes for the defendant invited me to reserve them to some future date and hearing. I heard argument, reserving my decision to this judgment.

5. The plaintiff having been put to the expense of filing a summons before the terms of discovery were agreed as asked for save as to time, it seems to me that the appropriate order is that it should have its costs of the summons. I order accordingly.

Further and Butter Particulars

6. The applications stem from the defendant's allegation that the plaintiff failed in its duty as the defendant's agent to ensure that it received the best possible price for the subject apartment.

7. The requests in effect are twofold.

8. The first arises from the plaintiff in its pleadings and answers already given stating that it did supply the defendant, verbally, with information concerning the sale prices offered and achieved in comparable sales, and has particularized that information. The defendant claims to be entitled to be told, "in clear terms: the contents of the alleged information; the alleged latest record including the transaction prices, the dates of transaction, the identities of the properties concerned, the length of period for completion and other factors, if any, affecting the price of the [apartment] which the plaintiff alleged had been provided to the defendant."

9. The second arises from the plaintiff stating that in the course of promoting the apartment it showed a prospective purchaser through having quoted an asking price higher than that it was eventually sold for. The defendant wants to know the name of the prospective purchaser, the basis for the quotation, why this information was withheld and other related matters.

10. Is it entitled to the further and better particulars asked for? First it is necessary to consider the rules of procedure and principles deriving therefrom.

The Law

11. Under the heading "Matters which must be specifically pleaded" Order 18 rule 8 RHC says in part:-

" 8. - (1) A party must in any pleading subsequent to a statement of claim plead specifically any matter, for example, performance, release, any relevant statute of limitation, fraud or any fact showing illegality-

(a) which he alleges makes any claim or defence of the opposite party not maintainable; or

(b) which, if not specifically pleaded, might take the opposite party by surprise; or

(c) which raises issues of fact not arising out of the preceding pleading.

.......

12. On the question as to whether the content of documents and conversations should be fully pleaded the White Book at 18/7/13 states:-

" Documents and conversations - The general rule is that only the gist is to be pleaded; however, if the precise words of a document or conversation are themselves material, they must be set out in full in the pleading. In an action for libel, the precise words of the offending document are always material (Harris v. Warre (1879) 4 C.P.D. 125; Yung Chi Kin Larry v. Leung Tin Wai [1993] 1 H.K.C. 143). In some cases, the precise words of a clause in a will or other document may be material (Darbishire v. Leigh [1896] 1 Q.B. 558 at 559)."

13. And by way of a commentary to Order 18 rule 12 which states that every pleading must contain the necessary particulars of any claim or defence, the White Book at 18/12/1 states:-

" Effect of rule - The requirement to give particulars reflects the overriding principle that the litigation between the parties, and particularly the trial, should be conducted fairly, openly, without surprises and, as far as possible, so as to minimise costs. In Aktieselskabet Dansk Skibsfinansiering v. Wheelock Marden [1994] 2 H.K.C. 264 Bokhary J.A. said at 269E-270E that the functions of properly particularised pleadings are as follows:

(1) to inform the other side of the nature of the case that they have to meet as distinguished from the mode in which that case is to be proved;

(2) to prevent the other side from being taken by surprise at the trial;

(3) to enable the other side to know with what evidence they ought to be prepared and to prepare for trial;

(4) to limit the generality of the pleadings, the claim and the evidence;

(5) to limit and define the issues to be tried, and as to which discovery is required;

(6) to tie the hands of the party so that he cannot without leave go into any matters not included (although if the opponent omits to ask for particulars, evidence may be given which supports any material allegation in the pleadings).

......"

Applying the Law to the Application

14. Mr Dawes submits that as this is a counterclaim for negligent misrepresentation it is essential for the defendant to know in precise detail what the case for the plaintiff is that it has to meet. Mr Harris submits that the information sought by the defence is a matter of evidence. What has been pleaded by the plaintiff in its defence to the counterclaim is sufficient to "tie the hands of the plaintiff" and it cannot be said that the defendant would be taken by surprise. In his own words: "Each party knows precisely what the other's case is. Further particulars are not needed."

15. I am satisfied that that is indeed the case. A representative of the plaintiff with full knowledge of the history is to give evidence and has filed a comprehensive witness statement which sets out in some detail the evidence upon which the plaintiff intends to rely. In my view it would be wrong to require this to be incorporated into the pleadings, even in gist. So, I find that the plaintiff should not be required to provide the further and better particulars sought; the appeal is dismissed. Costs of the appeal shall be to the plaintiff in any event. (The order for costs is nisi at first instance).