TERESA ANNE HOLLADAY v. FRED KAN & CO (A FIRM) AND ANOTHER

HCA012723A/1996

HCA 12723/96

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 12723 OF 1996

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

BETWEEN
	TERESA ANNE HOLLADAY	Plaintiff
	AND
	FRED KAN & CO. (a firm)	1st Defendant
	STEPHENSON HAR WOOD & LO (a firm)	2nd Defendant

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

Coram: The Hon. Mr. Justice Waung in Chambers

Date of Hearing: 7 May 1999

Date of Delivery of Judgment: 7 May 1999

 

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

JUDGMENT

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

 

1. This is an appeal from the Master whereby he dismissed an application of the 1^st Defendant for specific discovery. The original discovery sought covered 5 categories of documents. On this appeal the 1^st Defendant only seeks the discovery of one category of documents, namely documents, correspondence, receipt, memorandum and financial information relating to the financial assistance given to the Plaintiff and her son by Cecil Chao for the period from May 1995 to 1999 including particularly bank statements of the Plaintiff.

2. The claim of the Plaintiff against the 1^st Defendant solicitors is for damages for negligence in that Mr. Wu of the 1^st Defendant as her solicitor failed to discharge his duties to ensure that the oral agreement for her ample financial provision made by the Plaintiff with Cecil Chao (her co-habitee and the father of their children) would be reflected in what is called the 1^st Agreement of 26^th September 1994.

3. Paragraph 11 of the Statement of Claim reads:-

"By reason of Mr. Wu's and the 1^st Defendant's breach of duty and/or negligence and/or the breach of contract, the Plaintiff suffered loss and damage and she failed to obtain, and she failed to have the opportunity to take action to obtain, the benefits intended under the oral agreement and/or to avoid the risk or risks which the oral agreement was intended to avoid."

4. The oral agreement as pleaded by the Plaintiff in paragraph 4 of the Statement of Claim provides for four benefits:-

	(1)	HK$10 million upon the death of Cecil Chao;
	(2)	$2 million per year upon separation from Cecil Chao or their ceasing to co-habit;
	(3)	immediate payment of HK$500,000 for the Plaintiff to purchase a property in USA;
	(4)	the use of a credit card with limit of HK$100,000 upon either the death of Cecil Chao or their separation or termination of co-habitation.

5. The Defence of the 1^st Defendant denies paragraph 4 (oral agreement) and paragraph 11 (loss and damage) of the Statement of Claim. Although the 1^st Defendant puts the Plaintiff to strict proof that:-

"the Plaintiff lost any opportunity to obtain the benefits intended under the alleged oral agreement or any benefit"

6. This seems to me to add nothing to the denial. It is to be noted that nowhere in the Defence, did the 1^st Defendant allege that the damages should be reduced because of:-

	(a)	benefits which the Plaintiff had received from Cecil Chao either in performance of or pursuant to the oral agreement or the 1st Agreement or generally;
	(b)	benefits which the Plaintiff had generally obtained by her own work and employment.

7. The issue therefore strictly on the pleadings between the Plaintiff and the 1^st Defendant is a simple one, namely that if there was negligence by the 1^st Defendant whether the Plaintiff had lost and would lose the 4 benefits under the oral argument, namely the $10 million on his death, the $2 million yearly upon separation, $500,000 for the house and $100,000 credit card. The discovery of her benefits strictly speaking simply does not arise as there is no relevant issue on this. Solicitors for the 1^st Defendant however have embarked on a request for large scale discovery of her benefits after their separation. This is totally unjustified. The present appeal for what I will call benefit documents for the period from 1995 to 1999 is in my view devoid of any merit. The 1^st Defendant fails to satisfy any of the fundamental requirements for specific discovery.

8. The fundamental requirement on any application for specific discovery (see Deak & Co. v N.M. Rothschild & Sons Ltd. [1981] HKC 78) is that the applicant must show:-

	(1)	there is in existence a specific class of documents;
	(2)	the Plaintiff has the possession of that particular class of documents;
	(3)	the particular class of documents is relevant to the issue;
	(4)	the discovery of that class of documents is necessary for disposing fairly of the cause or matter or for saving costs.

9. First class of documents: the class of documents sought by the 1^st Defendant are documents, correspondence, receipt, memorandum, financial information including bank statements evidencing or relating to the financial assistance given to the Plaintiff and her son by Cecil Chao. Is that a class of documents recognised in law. In the case of Deak & Co. v. Rothschild. Barker J.A. made it very clear that when you have a general description of class of documents bearing on an issue, it is not a class of documents and you can see that at page 82. "In our judgment", he said: "Class of documents must be classified by its nature." And then he gave examples of this of documents bearing on an issue not being a class. I am of the view that on the basis of Deak v. Rothcild, that the class of documents now sought cannot be said to be a class of documents. How can documents evidencing or relating to financial assistance by Cecil Chao to the Plaintiff be a class of documents. Assuming I am wrong, then under the first requirement there is the question of whether there is in existence a specific class of documents and in relation to the second requirement, the question whether the Plaintiff has in her possession that particular class of documents. I would just take for example, bank statements which can be said to be a prime case of the discovery of specific class of documents sought by the 1^st Defendant.

10. There is no evidence that the Plaintiff has particular bank accounts in particular banks for the period, let alone that she has in her possession bank statements relating to these unknown and unspecific bank accounts. The same goes for the other classes of documents. There is indeed no evidence that there is in existence, these classes of documents or that she has possession of them. The 1^st Defendant therefore falls on the first as well as the second hurdle of the requirements.

11. The third hurdle will be seen to be fatal for the 1^st Defendant. In order to succeed on specific discovery, the applicant must show that the class of documents relates to an issue. In Astra National Productions v Neo Art Production Ltd. [1928] W.N. 218, Tomlin J. in a classic judgment said this:-

"A document might be relevant either by reason of its character-for instance, the mere fact that it was a document of a particular kind or it might be relevant by reason of its contents, and if the applicant was relying upon a particular class of documents because they might have certain contents, in his view, it was not enough for him to say 'they must be this particular class of documents' unless the mere fact that they belonged to the class was sufficient to constitute relevancy. If the mere fact that they belonged to the class was not sufficient to constitute relevancy but the relevancy had to depend on the particular contents, then, it seemed to him there must be a prima facie case for particular contents made before, under the rule, discovery could be granted."

12. I would assume for the moment that I was wrong, in that there is on the pleadings an issue, that is to say, an issue whether the Plaintiff had received benefits from Cecil Chao by way of financial assistance for herself and her son for the period from 1995 to 1999. I assume that there is in existence that issue. Then the question is whether the class of documents sought is relevant to the issue simply because of their character or because of what might be in their contents. I do not see how for example in relation to bank statements they can be said to be relevant because of their character. Relevancy of the class therefore in this case had to depend on their particular contents and there is simply no proper evidence of what must be the contents of the class of documents sought. Under this requirement, it seems to me that the application for the wide classes of documents simply does not get off the ground, even as I said, assuming that there is a viable issue of benefits received by the Plaintiff from Cecil Chao.

13. Finally on the fourth requirement, all I would like to say in kindness to the 1^st Defendant is that it has not been shown to me that the discovery of the benefits documents including the bank statements of the Plaintiff for the period from 1995 to 1999 is necessary for the fair disposition of the Action or to save costs. In fact, I am convinced that this whole fishing expedition is oppressive and will merely prolong the Action and increase the costs.

14. In my judgment, the application has no merit. The appeal must be dismissed with costs, which will be summarily assessed by me as a gross sum under Order 62 rule 9(4)(b) at a date to be fixed in consultation with all parties, at which hearing I will also give directions as to the future course of the Action for the Plaintiff and for both Defendants, including the timetable of the Action and the question of whether there shall be a separate trial of liability.

 

 

	(William Waung)
	Judge of the Court of First Instance

 

Representation:

Mr. Robert Whitehead for the Appellant/1^st Defendant instructed by Messrs. Barlow Lyle & Gilbert.

Mr. Russell Coleman for the Respondent/Plaintiff instructed by Messrs. Hampton Winter & Glynn.

HCA012723/1996

1996, No. A12723

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

________________

BETWEEN
	TERESA ANNE HOLLADAY	Plaintiff
	AND
	FRED KAN & CO. (A FIRM) STEPHENSON HARWOOD & LO. (A FIRM)	1st Defendant 2nd Defendant

________________

Coram: Hon. Mr. Justice Barnett in Chambers

Date of hearing: 8 October 1997

Date of handing down of judgment: 13 October 1997

 

________________

J U D G M E N T

________________

 

1. In this action, the Plaintiff brings claims against two firms of solicitors for negligence and for breach of duty and contract. In her summons for directions, the Plaintiff sought a direction that:

"the parties do have leave to produce expert evidence from a solicitor at the trial of this action and the report of the expert to be exchanged within 30 days."

2. Master Woolley declined to give such a direction. Against that decision the Plaintiff now appeals.

3. As I observed at the hearing of the appeal, that direction is couched in somewhat vague terms. I accept that in some cases there will be no doubt as to the issues which the experts will be expected to address. For example, in a personal injuries case an orthopaedic surgeon will have little difficulty in coming to grips with the extent of any injury and any question of permanent disability. In other cases, however, and this case seems to me to be a classical example, the issues to be addressed by the experts should be defined. Otherwise, there is a danger that when the experts' reports are exchanged, it will be found that the respective experts have taken different directions so that the real matter or matters upon which their expert assistance is required have only been met in part or on one side.

4. Mr. Coleman for the Plaintiff had in fact come prepared to define the matters on which the evidence of a solicitor could help the court. He said that these were matters of practice upon which the solicitor would give his opinion in the light of his understanding of the law. There are, he said, two matters. First, the appropriate practice where a conflict of interest situation arises. Second, the appropriate response by a solicitor where there are overlapping aspects of family, testamentary and contractual law and, in the case of the 2nd Defendant, an additional consideration of whether another solicitor has already been negligent.

5. In dealing with an application under Ord. 38 for leave to adduce expert evidence, the court has a limited function. Because it is generally a matter for the parties to an action to decide which witnesses they wish to call, the court's principle function is as to disclosure and exchange of the experts' evidence. Those reports having been exchanged, it may later be necessary for the trial judge, either at trial or in a pre-trial hearing, to decide upon questions of admissibility of such reports either in whole or in part. In my view, however, the judge or master hearing the initial application under Ord. 38 does have a filtering role. He must be satisfied that there is a matter upon which it is proper to call expert evidence. That is for there to be an expression of opinion upon some aspect of science, art or professional practice that is otherwise outside of the competence of the court.

6. For the 1st Defendant, Mr. Scott whose submission was endorsed by Ms. Newall for the 2nd Defendant said that the particulars upon which the Plaintiff relies to establish the Defendants' negligence and breach of duty and contract are simply matters of fact and/or law which will be peculiarly within the competence of the judge at trial to decide. In effect, all that the Plaintiff is seeking to do is to obtain the opinion of a solicitor upon these matters but not an expert opinion.

7. In Midland Bank Trust Co. Ltd. and Another v. Hett, Stubbs and Kemp (A Firm) (1979) Ch 384 Oliver J. was dealing with a claim in negligence and breach of duty in relation to a firm of solicitors. At p. 402 he said:

"The extent of the legal duty in any given situation must, I think, be a question of law for the court. Clearly, if there is some practice in a particular profession, some accepted standard of conduct which is laid down by a professional institute or sanctioned by common usage, evidence of that can and ought to be received. But evidence which really amounts to no more than an expression of opinion by a particular practitioner of what he thinks that he would have done had he been place, hypothetically and without the benefit of hindsight, in the position of the defendants, is of little assistance to the court; whilst evidence of the witnesses'' view of what, as a matter of law, the solicitor's duty was in the particular circumstances of the case is, I should have thought, inadmissible, for that is the very question which it is the court's function to decide."

8. The question of a solicitor's duty arose again in Carradine Properties Ltd. v. D. J. Freeman & Co. (A Firm) in which the Court of Appeal gave its decision on 18^th February 1982. In the course of his judgment, Lord Denning

M. R. said that the parties:

"wanted to call expert evidence as to what would be the duty of solicitors in such a case as this. It seems to me that in an appropriate case an expert can give evidence in a solicitors' negligence case, just as a medical man can give evidence in a medical negligence case or an engineer in a motor accident case. But that is only expert evidence as to the best and accepted practice in a profession or trade. A man with expertise in a profession or trade can give evidence of the practice, but he cannot give evidence as to whether in this particular case there was negligence or not. In some cases he blurts out quite naturally, "If I had been in that position I would have done this or that". It is a very usual question to be asked and no objection is taken to it. But the present case is different. Carradine wished to call a lawyer of the city of London who was very experienced in insurance matters. He was to give his own view as to what he thought these solicitors should have done. He was not going to speak as to the established or recommended practice of solicitors in general. The judge in his discretion did not allow him to be called. It was a matter for the judge in his discretion. I think the judge was right."

9. It is apparent that neither the judge nor the Court of Appeal had any difficulty in discerning the duties imposed upon solicitors and whether or not the solicitors had discharged those duties.

10. More recently, the Court of Appeal applied the dictum of Oliver J. in Bown v. Gould and Swayne (1996) P.N.L.R. 130. There the defendants were a firm of solicitors against whom, once again, proceedings had been brought in negligence and breach of contract. The plaintiff sought leave to adduce evidence of a conveyancing expert. Leave was refused by the judge at a pre-trial review. At p. 135, Simon Brown L.J. said that counsel for the plaintiff:

"submitted that what the solicitors should have done is a matter of practice such as falls into the category of evidence that is properly the subject of admissible expert evidence within Oliver J.'s formulation in Midland Bank. That, however, in my judgment, is a fundamental misconception and it underlay all his submissions on the point. What solicitors should properly do in the very particular and highly individualistic circumstances of this case is by no means a matter of practice. It is a matter of law to be resolved by the judge.

Each of the seven respects in which the appellant's solicitor's first affidavit sought to contend that expert evidence would assist the court, proves, on analysis, to involve either a question of law or a question of fact. None of those matters can sensibly be regarded as inviting a view as to "some practice in [the solicitors'] profession, some accepted standard of conduct... laid down... or sanctioned by common usage".

I entirely share the view of the judge below that, on the contrary, the evidence here sought to be adduced falls foul of Oliver J.'s dictum. It would mount to no more than an expression of opinion by the expert, either as to what he himself would have done, which could not assist, or as to what he thinks should have been done, which would have been the very issue for the judge to determine."

11. Millett and Leggatt L.J.J. agreed.

12. In reply to the Defendants' submission, Mr. Coleman said that the 1st Defendant denied owing duties to the Plaintiff while the 2nd Defendant puts in issue the duties said to be owed. He submitted that the court potentially would be assisted by evidence from an expert in the relevant field as to the duties owed by the Defendants.

13. In my judgment, that reply puts in perspective the difficulties faced by the Plaintiff in applying for leave to adduce expert evidence. With respect, Mr. Coleman has really been unable to identify or define the areas or matters in relation to which expert evidence could properly be given. Whether any and, if so, what duty or duties were owed by the Defendants to the Plaintiff is a matter of law to be determined by the judge with the assistance if necessary of counsel. The particulars of breach upon which the Plaintiff seeks to rely are matters of fact and/or law which will be for the judge to determine, again with the assistance of counsel where necessary. As far as I can see, no questions of practice or particular standards of conduct arise on which it would be appropriate for a solicitor to help the court. I cannot see that a solicitor, if allowed to give evidence, could do more than say that "in the circumstances I would have done so and so". That, of course, is not expert evidence.

14. Accordingly, this part of the appeal must be dismissed, with costs to the Defendants in any event.

15. I say "this part of the appeal" because the Plaintiff's Notice of Appeal also asked for the master's order for costs on the summons for directions, which was to the Defendants in any event, should be set aside. Unfortunately, this aspect of the notice was overlooked all round. From the file, it is clear that there was a number of adjourned hearings of the summons. Quite why this was so and what course they took is far from clear.

16. If the Plaintiff wishes, she may apply within 14 days to restore this aspect of the appeal before me.

	(N. J. Barnett)
	Judge of the Court of First Instance

Representation:

Mr. Russell Coleman, instructed by Messrs. Hampton, Winter & Glynn for Plaintiff.

Mr. J. C. Sott of Messrs. Barlow Lyde & Gilbert for 1st Defendant.

Ms. Glenys Newall, instructed by Messrs. Wilkinson & Grist for 2nd Defendant.