DCCJ 1530/2019
[2021] HKDC 1175
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CIVIL ACTION NO. 1530 OF 2019
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| BETWEEN | | |
| | CHONG CHI KI PIERRE | Plaintiff |
and |
| | GLORY SKY PRECIOUS METALS LIMITED | 1st Defendant |
| | 姚詠 also known as PINDY YAU | 2nd Defendant |
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Coram: His Honour Judge H. Au-Yeung (Paper Disposal)
Date of Written Submissions: 5 July 2021
Date of Decision: 15 September 2021
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DECISION
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THE APPEAL
1. This is the 1st defendant’s appeal out of time against Master B Mak’s order made on 25 August 2020 under which he ordered that:
“(1) The Commissioner of Police do disclose certified copies of the following documents to the plaintiff on or before 8 September 2020, namely, the employment contract and/or employment records including any employer’s tax return and MPF application between the 1st and 2nd Defendants;
(2) Costs of and occasioned by this application (including costs incurred by the Commissioner of Police in compliance of Order hereof) be paid by the Plaintiff to the Commissioner of Police, in the sum of HK$5,200. Such costs to be reimbursed by the 1st Defendant to the Plaintiff in any event; and
(3) The 1st Defendant do pay the Plaintiff costs of this application on an indemnity basis, such cost being summarily assessed as HK$55,750 to be paid forthwith.”
2. In the event the appeal against the above order is successful, the 1st defendant also seeks to appeal against a part of Master B Mak’s order dated 14 October 2020, under which the 1st defendant was required to pay forthwith the plaintiff’s costs of a summons filed by the 1st defendant on 4 September 2020 (for rehearing the summons leading to the making of the orders quoted in the preceding paragraph) which was summarily assessed at $6,000.
3. Before I consider the 1st defendant’s appeal, it is necessary to set out the background of this action in some detail.
BACKGROUND
4. This action was commenced on 27 March 2019 by the plaintiff against the 1st and 2nd defendants. By his Statement of Claim, the plaintiff alleged, among other things, that:
(1) The 1st defendant was at all material times a limited company engaging in the business of trading of precious metals and provision of investment services in relation to securities, foreign exchange, metal, futures and wealth management;
(2) The 2nd defendant was at the material times an employee and/or agent of the 1st defendant with the designated agent code L802(15), and was involved in the 1st defendant’s business of providing investment services[1];
(3) The 2nd defendant had breached her fiduciary duties towards the plaintiff in executing over 70 unauthorised transactions using monies deposited in the plaintiff’s account with the 1st defendant within a period of 9 days, with a view to maximizing her commissions and/or administrative fees earned by the 1st defendant;
(4) The 1st defendant was in breach of its fiduciary duties owed to the plaintiff by, among other things, failing to supervise the 2nd defendant or to provide adequate training and/or instruction to the 2nd defendant.
5. In its Defence which was filed on 5 June 2019, the 1st defendant denied, among other matters, the plaintiff’s case set out in paragraph 4(2) above. Hence, one of the issues in the present case as defined by the pleadings is the relationship between the 1st and 2nd defendants.
6. On 6 November 2019, the plaintiff took out a specific discovery summons against the 1st defendant, pursuant to which the plaintiff asked the 1st defendant to make discovery in relation to 6 different categories of documents set out in the schedule annexed to the said summons. The first two types of requested documents are:
“(1) Employment contract between the 1st Defendant and the 2nd Defendant, or in the alternative any document indicating the employer and employee relationship between the 1st and 2nd Defendant, such as any employer’s return filed in respect to the 2nd Defendant to the Inland Revenue Department by the 1st Defendant or Mandatory Provident Fund application;
(2) All employment contract or agency agreement between the 1st Defendant and the person bearing agent code L802(15) of the 1st Defendant;”
7. By consent, Master Peony Wong made a number of orders on 2 January 2020, including the following:
“[T]he 1st Defendant do within 28 days from the date of the order make and file an affidavit stating whether the documents referred to and specified in the [said schedule] or any and which of them are or have at any time been in his possession, custody or power; and if the same or any of them, having at any time been, but not now in his possession, custody or power, stating when he parted with them and what has become of them”
8. Pursuant to Master Peony Wong’s order, the 1st defendant filed an affirmation of Yeung Ping Kwan (“Yeung”) (who was a director of the 1st defendant) on 13 March 2020[2]. In relation to the said two categories of documents, Yeung affirmed that:
“3. In relation to item 1 of the Schedule, no such document ever existed. The Defendant has denied the allegation made in paragraph 3 of the Statement of Claim. Further, the Plaintiff has failed to establish a prima facie case of existence of such document under item 1 of the Schedule.
4. In relation to item 2 of the Schedule, there was no employment relationship between the 1st Defendant and the person bearing agent code L802(15) of the 1st Defendant. There was a written agency agreement signed between the 1st Defendant and the person bearing agent code L802(15).”
9. On the same day, the 1st defendant filed a list of document disclosing a document which was described as “Copy Agency Agreement with agent having agent code L802(15)” dated 22 January 2015.
10. It has now transpired that the plaintiff had reported the case to the Commercial Crime Bureau of the Police Force (“CCB”), and as a result, the plaintiff’s solicitors had communicated with CCB and requested for certain information and document in relation to the 2nd defendant since March 2019. The relevant correspondence is as follows:
(1) By letter dated 13 August 2018, CCB asked the plaintiff to indicate whether he would intend to commence civil proceedings against the 1st defendant to recover his investment;
(2) By letter dated 14 March 2019, the plaintiff’s solicitors requested CCB to provide them with the 2nd defendant’s last known address for the purpose of serving the writ herein on her;
(3) By letter dated 26 August 2019, the plaintiff’s solicitors asked CCB for, among other things, the 2nd defendant’s employment contract with the 1st defendant and information about her “duration of employment period with the 1st defendant”;
(4) By letter dated 4 October 2019, CCB informed the plaintiff’s solicitors that the 2nd defendant was one of their “investigation subjects”, and told the plaintiff’s solicitors that the plaintiff might, if required, obtain further information about the 2nd defendant through civil procedures;
(5) By letter dated 20 December 2019, CCB informed the plaintiff’s solicitors about the 2nd defendant’s “latest known address” which was “obtained from her employment record dated 15 April 2015”[3];
(6) By letter dated 11 February 2020, the plaintiff’s solicitors informed CCB that despite CCB’s assertion that the 2nd defendant’s address could be obtained from her employment record dated 15 April 2015, the 1st defendant’s director (Yeung) affirmed that there was no employment agreement / employment relationship between the 1st and 2nd defendants. The plaintiff’s solicitors therefore requested CCB to let them have the said employment record(s) or the like for the plaintiff’s necessary action;
(7) CCB then replied by a letter[4] which was sent to the plaintiff’s solicitors on 2 March 2020. In this letter, CCB stated that the employment agreement concerned between the 1st and 2nd defendants was seized in the 1st defendant’s office on 11 July 2018. However, CCB did not provide the plaintiff’s solicitors with the said agreement, and said that the plaintiff’s solicitors had to obtain the agreement through civil procedures.
11. The plaintiff then took out a summons (“the Non-Party Discovery Summons”) on 2 July 2020 (returnable on 21 July 2020) and asked for a non-party discovery order against the Commissioner of Police. The substantive order sought reads:
“The Commissioner of Police do disclose the following documents to the Plaintiff within 14 days, namely, the employment contract and/or employment records including any employer’s tax return and MPF application between the 1st and 2nd Defendants”
12. The Non-Party Discovery Summons was supported by an affirmation made by the plaintiff to which the aforesaid letters from the CCB were exhibited.
13. By letter dated 3 July 2020 sent by the 1st defendant’s solicitors to the plaintiff’s solicitors, the 1st defendant’s solicitors pointed out that only the replies from the Police had been exhibited to the plaintiff’s aforesaid supporting affirmation. The 1st defendant’s solicitors therefore requested the plaintiff to disclose the relevant correspondence from the plaintiff’s solicitors to the Police for consideration, and stated that they (the 1st defendant’s solicitors) would take the 1st defendant’s instructions upon receipt of all the relevant documents.
14. The handling solicitor of this case for the plaintiff, Chan Chi Man Oliver, therefore made an affidavit and exhibited various letters sent by his firm to CCB as requested. This affidavit was then filed on 17 August 2020.
15. The hearing of the Non-Party Discovery Summons was eventually heard on 25 August 2020[5]. Only the plaintiff had attended the hearing (by counsel). The defendants did not attend because:
(1) According to the letter of the 1st defendant’s solicitor dated 28 August 2020, the hearing date was not properly marked in the solicitor’s diary;
(2) The 2nd defendant did not oppose against the plaintiff’s application and her solicitors had asked to be excused.
16. Neither did the Department of Justice attend the hearing on 25 August 2020. Master B Mak was informed about this by letter dated 21 August 2020 sent by the plaintiff’s solicitors which reads:
“We refer to the captioned Proceedings and write to inform you that DOJ has disclosed 8 paper of documents to us as requested by us in Para 1 of the Inter-Parte Summons, hence, it remains for the parties to argue on costs as referred to Para 2 of the Summons. As such, we write to your Master that as DOJ has already discharged its duty as aforesaid, DOJ can be excused from the forthcoming hearing.”
(emphasis added)
17. At the hearing on 25 August 2020, the plaintiff’s counsel informed Master B Mak that:
“Master, this is the summons application by the plaintiff for discovery of documents from the Commissioner of Police being the third party in this case. In fact, the DOJ has already provided with those documents to the plaintiff, and they therefore ask for excuse to attend this hearing. […]
[…]
In fact, Master, if I may, because the DOJ has provided the copies of those documents, if I may have an order from Master that certified true copies of those copies be provided because that may be conducive to our subsequent proceedings. [..]”[6]
(emphasis is mine)
18. The learned Master then made the following order:
“The Commissioner of Police do disclose certified copies of the following documents to the Plaintiff on or before 8 September 2020, namely, the employment contract and/or employment records including any employer’s tax return and MPF application between the 1st and 2nd Defendants”
19. He also made the following costs orders:
“Costs of and occasioned by this application (including costs incurred by the Commissioner of Police in compliance of Order hereof) be paid by the Plaintiff to the Commissioner of Police, in the sum of $5,200. Such costs to be reimbursed by the 1st Defendant to the Plaintiff in any event; and
The 1st Defendant do pay the Plaintiff costs of this application on an indemnity basis, such cost being summarily assessed as HK$55,750 to be paid forthwith.”
20. On 4 September 2020, the 1st defendant took out a summons (“the Rehearing Summons”) (returnable on 13 October 2020) and sought the following orders:
“1. the court do re-hear the Summons of the Plaintiff filed on 2 July 2020 for discovery against the Commissioner of Police, particularly, paragraph 2 of the Summons [on costs], given that the Summons was heard by the court on 25 August 2020 in the absence of the 1st defendant and that the order made has not been perfected;
2. the order made at the said hearing of 25 August 2020 shall not be perfected pending the determination of this Summons; and
3. the costs of this application be provided for.”
21. The order of the court made on 25 August 2020 was subsequently sealed on 5 October 2020, that is, slight more than a week before the scheduled hearing date of the Rehearing Summons.
22. At the hearing on 14 October 2020[7], it was accepted by the 1st defendant and the court that the learned Master did not have any further jurisdiction to deal with the Non-Party Discovery Summons as the order dated 25 August 2020 had already been perfected by then. The court therefore dismissed the Rehearing Summons. The court also ordered the 1st defendant to pay $6,000 costs to the plaintiff forthwith.
23. The 1st defendant then filed a Notice of Appeal to Judge in Chambers herein on the same day.
24. By consent[8], the appeal was ordered on 18 March 2021 to be dealt with on papers. Directions had been given to the parties to lodge and serve hearing bundle and written submissions. However, the plaintiff’s legal aid certificate had been discharged subsequently, and he had not lodged any written submissions pursuant to this court’s directions at all despite the expiry of the deadline to do so on 19 July 2021. This court therefore proceeded to consider the 1st defendant’s appeal on the basis of the 1st defendant’s written submissions alone.
DISCUSSION
25. The 1st defendant’s appeal may be divided into 3 parts, which are against the following orders respectively:
(1) The non-party discovery order made on 25 August 2020;
(2) The costs orders dated 25 August 2020; and
(3) The costs order made on 14 October 2020.
26. As far as the first 2 parts of the appeal are concerned, the appeal was made out of time, as the Notice of Appeal was only filed on 14 October 2020 which was more than 14 days after the subject orders were made.
27. In considering whether to extend time for the 1st defendant to appeal against the orders made on 25 August 2020, the court has to consider the following factors:
(1) the length of the delay;
(2) the reasons for the delay, in terms of firstly why the original time limit was not complied with and, secondly, why the application for extension of time could not have been made earlier;
(3) the chances of the appeal succeeding if leave is given; and
(4) the prejudice to the other party if application is granted.
(see Postwell Limited v Cheng Kap Sang [2004] 2 HKLRD 355 at paragraph 33)
28. I will deal with the above in turn below.
Length and reason of the delay
29. According to Order 58 rule 1(3) of the Rules of the District Court (Cap.336H) (“RDC”), an appeal against Master’s decision should be made within 14 days after the decision appealed against was given. As the subject decision was made on 25 August 2020, the appeal herein should have been made on or before 8 September 2020. Therefore, there was a delay of around 5 weeks when the Notice of Appeal was filed on 14 October 2020. While the delay was not substantial, it cannot be said to be short either.
30. Having said that, I think I should have sympathy on the 1st defendant in the present case, because the 1st defendant’s original plan was to apply to have the Non-Party Discovery Summons re-heard before the learned Master, and for such purpose, the 1st defendant had taken out the Rehearing Summons on 4 September 2020 (it was still within the 14-day appeal period by then). The Rehearing Summons was scheduled to be heard on 13 October 2020. However, the plaintiff did not withhold the process of perfection of the order dated 25 August 2020, which was subsequently sealed on 5 October 2020. It was only because of this that the door for rehearing was shut by the time when the Rehearing Summons was heard on 14 October 2020, and as a result 1st defendant had no other choice but to lodge the appeal herein, which it did on 14 October 2020 – the same day when the Rehearing Summons was dismissed for want of jurisdiction on the part of the learned Master.
31. In my view, in the above circumstances, there was a good reason for the delay.
Prejudice to the plaintiff
32. The plaintiff has not put forward any grounds of prejudice which he would suffer in the event this appeal is allowed. I would therefore take it that there is no such prejudice.
Merits of the appeal against the non-party discovery order
33. It may be recalled that, by the Non-Party Discovery Summons, the plaintiff was seeking to obtain the employment contract and/or employment records including any employer’s tax return and MPF application between the 1st and 2nd defendants.
34. However, the court was informed by the plaintiff’s counsel during the hearing on 25 August 2020 that the plaintiff had been provided with those documents by the Department of Justice. Be that as it may, the plaintiff’s counsel still requested the court to make an order in terms of the Non-Party Discovery Summons, and specified that certified copies of the documents should be provided. The court had acceded to this request.
35. It is now revealed that what the Department of Justice had supplied to the plaintiff’s solicitors were in fact the following documents:
(1) A copy of an agent application form (代理申請表) (2 pages) signed by Yiu Wing (姚詠) dated 15 April 2015 submitted to 灝天貴金屬有限公司 (the 1st defendant);
(2) A copy of Yiu Wing (姚詠)’s ID card;
(3) A monthly statement issued by “Hong Kong Broadband Network” for the month of May 2015 to Yiu Wing (which bore her address);
(4) A copy of agency agreement (代理合約) between the 1st defendant and the 2nd defendant dated 15 April 2015 (2 pages);
(5) A copy of a document on the calculation of commission issued by the 1st defendant; and
(6) A copy of the operation code issued by the 1st defendant which was signed by 姚詠.
36. With the above background, I will now deal with the 1st defendant’s very extensive submissions on why it was said that the non-party discovery order should not have been made.
37. Firstly, the 1st defendant’s solicitor submitted that since the Non-Party Discovery Summons only asked for an order against the Commissioner of Police to disclose documents without asking the Commissioner of Police to make an affidavit stating whether the documents requested “are, or at any time have been, in his possession, custody or power and, if not then in his possession, custody or power, when he parted with them and what has become of them” in accordance with section 47B(2) of the District Court Ordinance (Cap.336) (“DCO”) and Order 24 rule 7A(5) of the RDC, the said summons was bad and defective and should have been dismissed on this ground alone.
38. Section 47B(2) of the DCO provides that:
“The Court may order the person, if it appears to it that the person is likely to have or to have had in his possession, custody or power any relevant documents—
(a) to disclose whether those documents are in his possession, custody or power; and
(b) to produce the documents in his possession, custody or power to the applicant or, on the conditions specified in the order—
(i) to the applicant’s legal advisers;
(ii) to the applicant’s legal advisers and a medical or other professional adviser of the applicant; or
(iii) if the applicant has no legal adviser, to a medical or other professional adviser of the applicant.”
39. Order 24 rule 7A(5) of the RDC stipulates that:
“An order under section 47A or 47B(1) of the Ordinance for the disclosure of documents […] shall require the person against whom the order is made to make an affidavit stating whether any documents specified or described in the order are, or at any time have been, in his possession, custody or power and, if not then in his possession, custody or power, when he parted with them and what has become of them.”
40. The 1st defendant’s solicitor went further to submit that:
“More importantly, given the specific requirement under section 47B, the court may make an order under sub-section (2)(a) AND (2)(b), but not (2)(a) OR (2)(b), the court had no power, or jurisdiction, to make the Order under section 47B, or Order 24, rule 7A(5), for production of any documents with (sic) FIRST ‘requiring the person against whom the order is made to make an affidavit stating whether any documents specified or described in the order are, or at any time have been, in his possession, custody or power and, if not then in his possession, custody or power, when he parted with them and what has become of them’.”[9]
41. I have no hesitation in rejecting these arguments.
42. It is clear that section 47B(2) of the DCO is a statutory provision empowering the court to make an order for discovery against non-parties. The fact that the provision has given two different powers to the court in this regard does not mean that the court is obliged to exercise both powers at the same time. Viewed in such light, the word “shall” used in Order 24 rule 7A of the RDC, in my judgment, is to be read as directory rather than mandatory.
43. Furthermore, by the time when the Non-Party Discovery Summons was filed by the plaintiff, the CCB had already confirmed in writing that they were in possession of an employment agreement between the 1st and 2nd defendants (although, as will be seen below, CCB had probably misunderstood the nature of the document concerned). It is perfectly understandable why the plaintiff did not ask for an order that the Commissioner of Police shall make an affidavit confirming his possession of the relevant document, and the omission of such a relief in the Non-Party Discovery Summons would not render the said summons bad or defective as alleged.
44. Indeed, there had been occasions in the past when the court made an order of discovery against a non-party without asking such a party to make an affidavit stating whether he/she had the document required (see, for example, Tullett Prebon (Hong Kong) Limited v Chan Yeung Fong Nick & Others (HCA 2197/2009, unreported, 9 June 2011).
45. Secondly, it was submitted that the plaintiff did not identify the issues in the affidavits filed in support of the Non-Party Discovery Summons nor to show by reference to the pleading served that the documents being sought are relevant to an issue arising in the proceedings in compliance with Order 24 rule 7A(3)(b) of the RDC.
46. I do not accept this argument, as the plaintiff did in his supporting affidavit filed on 2 July 2020 made reference to his Statement of Claim, asserting that his case against the 2nd defendant was that she had informed him that she was working as an investment consultant with the 1st defendant, and that her designated agent code with the 1st defendant was L802(15). The plaintiff also stated that the 1st defendant had denied that there was any employment record as such.
47. Furthermore, one must not forget that the order against the Commissioner of Police was made with the consent of the DOJ given on behalf of the Commissioner of Police. Even if the plaintiff’s supporting affidavit was defective (which I do not agree), in my view, this is just an irregularity which would not take away the court’s power to make the order as it did with such consent.
48. Thirdly, the 1st defendant’s solicitor drew the court’s attention to the fact that the documents disclosed by the DOJ were actually not employment contract or employment record. He therefore submitted that:
“Given the requirement that the Plaintiff should specify and describe the documents with care and precision, the court should not re-write the specification or description for the Plaintiff, especially when the Plaintiff had legal representation, and the [Non-Party Discovery] Summons and the 2nd Affidavit of CHONG Chi Ki Pierre were both prepared by counsel for the Plaintiff, and in any event the court should not have endorsed, or indeed condoned, a ‘fishing’ or ‘speculative’ exercise.
In this regard, given the discrepancies in the specifications and descriptions of the documents ‘actually produced’ and ‘sought in the application’, either the specification or description of the documents used by the Plaintiff in the [Non-Party Discovery] Summons and in the supporting affidavits was WRONG, or, the police was not complying with the Order made, or the police was making voluntary disclosure WITHOUT A COURT ORDER. In the former case, the court should not have made paragraph 1 of the Order. In the latter case, the court should not have made the costs order as it did. The court would have made no order as to costs, or even, ordered that the Plaintiff was to pay the 1st Defendant, and/or the police, the costs of the application.
Had the court given the normal order for discovery requiring the Commissioner of Police to make an affidavit in the usual way, the Commissioner of Police might not have been able to state on oath that it has the documents as specified or described in the Summons, in its possession, custody or power.”[10]
49. It is most unfair on the part of the 1st defendant’s solicitor to allege even at this stage that the plaintiff was conducting a fishing or speculative exercise, when he has already had the opportunity to peruse the correspondence exchanged between the CCB and the plaintiff’s solicitors. It is apparent that the plaintiff had made the non-party discovery application for employment agreement simply because the CCB had in its letter (which was received by the plaintiff’s solicitors on 2 March 2020) stated unequivocally that they had seized an employment agreement between the 1st and 2nd defendants at the 1st defendant’s office on 11 July 2018.
50. Further, when the learned Master made the non-party discovery order on 25 August 2020, he was informed that the DOJ had already provided the plaintiff with the documents requested. I cannot see how it can be said that he should not have made the order as he did.
51. I agree with the 1st defendant’s solicitor that it has now transpired that none of the documents disclosed is “employment agreement” or “employment record” between the 1st and 2nd defendants. There was just an agency agreement between them. However, in my view, faced with such a situation, it would be up to the plaintiff (but not the 1st defendant) to pursue the matter against the Commissioner of Police further, if he so wish. The same applies to the requirement of making an affidavit “in the usual way”. It is purely a matter for the plaintiff to consider.
52. On the 1st defendant’s argument on costs, I will deal with it in the latter part of this Decision.
53. Fourthly, the 1st defendant’s solicitor submitted that the plaintiff’s application was bad and defective in that it was clear from the plaintiff’s own case that the 2nd defendant was an agent rather than an employee of the 1st defendant, and as a result, the plaintiff should not have asked for the production of any employment agreement and/or employment record.
54. As aforesaid, the plaintiff’s application was made on the basis that his solicitors were informed by CCB that an employment agreement between the 1st and 2nd defendants had been seized by the Police. Hence, when the application was made, there was no doubt that the document asked for (i.e. employment agreement) really existed.
55. Furthermore, I do not think it is correct for the 1st defendant’s solicitor to submit that the plaintiff’s own case was that the 2nd defendant was the 1st defendant’s agent rather than employee, as these 2 capacities have been pleaded in the alternative in the Statement of Claim: See paragraph 4(2) above.
56. There is nothing in the 1st defendant’s solicitor’s argument in this regard and I reject it without hesitation.
57. Fifthly, the 1st defendant’s solicitor alleged that, the plaintiff, by referring in his supporting affidavit to an assertion made in a CCB’s letter which stated that the 1st defendant was allegedly involved in a case of conspiracy to defraud, was indirectly making an allegation of fraud against the 1st defendant. It was said that the plaintiff should not have done so because there was no allegation of fraud in the pleading, and as a result such a matter is irrelevant as far as the Non-Party Discovery Summons is concerned.
58. I do not agree that the plaintiff was making an allegation of fraud in the present case by referring to what was stated by CCB in its letter. The reference made was only a part of the background explaining why the CCB had contact with the plaintiff’s solicitors and under what circumstances the “employment agreement” had come into the possession of the Police.
59. The argument raised in this regard has therefore no merits.
60. Sixthly, the 1st defendant’s solicitor complained that the plaintiff’s supporting affidavit had not explained why the documents sought would be necessary for disposing fairly the cause or matter, or for saving costs, and:
“[…] In the circumstances, it would be extremely difficult to the extent of impossible, for the Plaintiff to be able to prove the documents sought would be necessary for disposing fairly the cause or matter in these proceedings, let alone for saving costs. Given that the legal burden was NOT satisfied, NO order should have been made […]”[11]
61. The 1st defendant’s solicitor continued in his submissions:
“Those 8 pages of documents might have shed light on the real relationship between the 1st and 2nd Defendants. The Plaintiff failed to explain to the court as to how the relationship issue could or would have made an important difference, in the adjudication of the claims in this action, either in terms of relevancy of the documents to the issues, or whether the Order was necessary for disposing fairly the cause or matter in these proceedings, or for saving costs. The court should not have done the jobs of the counsel for the Plaintiff, for the Plaintiff. Otherwise, it would be unfair to the 1st Defendant.”[12]
62. I think the 1st defendant’s solicitor is probably having Order 24 rule 8(2) of the RDC in mind when he made this line of submissions. The said rule provides that:
“No order for the disclosure of documents shall be made under section 47A or 47B of the Ordinance, unless the Court is of opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs.”
63. It is trite that the function of supporting affidavits is to set out the factual matters which will be relied on in the application. Parties are not supposed to make submissions in affidavits nor to treat affidavits as their written submissions.
64. Hence, I do not understand how it can be said that “it would be extremely difficult to the extent of impossible, for the Plaintiff to be able to prove the documents sought would be necessary for disposing fairly the cause or matter in these proceedings, let alone for saving costs” on the basis that the argument was not made in the supporting affidavit.
65. Furthermore, as the 1st defendant’s solicitor recognised, the documents produced by DOJ would shed light on the real relationship between the 1st and 2nd defendants. Indeed, the plaintiff’s averment made in paragraph 3 of the Statement of Claim that the 2nd defendant was at all material times an employee and/or agent of the 1st defendant was denied by the 1st defendant in its Defence. The production of the document would no doubt be necessary for disposing fairly the matter in these proceedings and for saving costs.
66. Lastly, the 1st defendant’s solicitor questioned the necessity on the part of the plaintiff to take out the Non-Party Discovery Summons. He pointed to the fact that the Police had voluntarily made disclosure to the plaintiff even before any court order was made, apparently in reliance of the exemptions provided by sections 58 and 60B of the Personal Data (Privacy) Ordinance (Cap.486).
67. However, as the 1st defendant’s solicitor recognised, it was the CCB who informed the plaintiff’s solicitors that if they were to obtain the employment agreement seized by the Police, they would have to do it through civil procedure. In these circumstances, I do not think the plaintiff can be blamed for taking out the Non-Party Discovery Summons as he did. I do not agree with the 1st defendant’s solicitor that the plaintiff’s solicitors should have incurred further time and costs to persuade the CCB in releasing the documents requested without a court order.
68. In any event, I am of the view that the court should exercise its discretion in making the non-party discovery order against the Commissioner of Police.
69. To conclude, I hold the view that the 1st defendant’s appeal against the non-party discovery order has no merits at all.
70. Having taken all circumstances into account, I would dismiss the 1st defendant’s appeal against the non-party discovery order made out of time.
Merits of the appeal against the costs orders dated 25 August 2020
71. While this is an appeal from a decision of Master, the appeal against costs orders is not dealt with by an actual rehearing of the matter, for it is trite that a judge in chambers will not allow an appeal from a Master’s costs order unless it is unreasonable or the Master had erred in law.[13]
72. To recap, the learned Master made the following costs order on 25 August 2020:
“(1) […]
(2) Costs of and occasioned by this [Non-Party Discovery] application (including costs incurred by the Commissioner of Police in compliance of Order hereof) be paid by the Plaintiff to the Commissioner of Police, in the sum of HK$5,200. Such costs to be reimbursed by the 1st Defendant to the Plaintiff in any event; and
(3) The 1st Defendant do pay the Plaintiff costs of this application on an indemnity basis, such cost being summarily assessed as HK$55,750 to be paid forthwith.”
73. The learned Master’s reasons for making the aforesaid costs orders are as follows:
“1. At the hearing of the plaintiff’s summons dated 30 June 2020 on 25 August 2020, the legal representative for the 1st defendant was absent.
2. Mr Harrison Cheung, counsel for the plaintiff, informed the court that the Department of Justice had already provided the requested documents to the plaintiff leaving the question of costs to be dealt with.
3. Mr Cheung asked for costs of the summons against the 1st defendant on an indemnity basis and that the 1st defendant to reimburse the plaintiff the costs paid to the Commissioner of Police.
4. Mr Cheung informed the court that the plaintiff had taken out a summons dated 6 November 2019 requesting the 1st defendant to disclose, inter alia, the employment contract or any document indicating the employer and employee relationship between the 1st and 2nd defendants. By the Affirmation of Yeung Ping Kwan filed on 13 March 2020, the 1st defendant denied the existence of such document. However, the Commissioner of Police did provide such documents to the plaintiff.
5. Mr Cheung therefore asked for costs against the 1st defendant on an indemnity basis.
6. I am satisfied that the requested documents were in fact in existence. The answer given in the Affirmation of Yeung Ping Kwan was untrue. The attitude of the 1st defendant in response to the plaintiff’s request was not only for the purpose of delaying the progress of the plaintiff’s claim but also of obstructing the plaintiff’s bid to gather documentary evidence which is necessary for disposing the matter fairly.
7. Therefore, I am satisfied that the 1st defendant should bear the costs of the application on an indemnity basis and to reimburse the plaintiff the costs of the Commissioner of Police.
8. In relation to the plaintiff’s statement of costs, I find the time claimed by the instructing solicitors and counsel in the preparation of documents was unreasonably excessive and therefore deducted therefrom 5 hours and 5.5 hours respectively.”
(emphasis added)
74. It can be seen from the above that the learned Master had been led to believe that Yeung (director of the 1st defendant) had stated something untrue in his discovery affirmation. It seems to me that he had totally relied on what the plaintiff’s counsel told him at the hearing (which I think he was perfectly entitled to do so, as counsel are expected to be truthful to the court).
75. However, it is now revealed that:
(1) The documents produced by the DOJ were not employment agreement or employment record as such, and therefore were not documents requested for under the Non-Party Discovery Summons;
(2) It cannot be said that Yeung had been proved to be lying in his discovery affirmation by reference to the documents that were disclosed by the DOJ.
76. In these circumstances, the basis relied on by the learned Master for making the indemnity costs order was in fact non-existent, and it would be unreasonable for any indemnity costs order to be made against the 1st defendant in such circumstances. Having said that, I should make it clear that, on the basis of what he had been told in the hearing, the learned Master should not be blamed at all for having made the costs order as he did.
77. As far as the costs of the Commissioner of Police in the sum of $5,200 was concerned, the 1st defendant’s solicitor submitted that the Commissioner should not have been awarded such costs because the CCB should have relied on the exemptions under the Personal Data (Privacy) Ordinance and provided the documents requested without asking the plaintiff to obtain them through civil procedures. I am not prepared to consider this argument by reason of the simple fact that the 1st defendant did not serve the Notice of Appeal to Judge in Chambers filed on 14 October 2020 on the Commissioner of Police.
78. However, since it is my view that it was not shown that Yeung had lied in his affirmation filed on 13 March 2020, there is no reason why the 1st defendant should be ordered to reimburse the plaintiff of the costs of the Commissioner of Police in any event.
79. In my view, the costs of the Non-Party Discovery Summons (including the costs of the Commissioner of Police in the sum of $5,200) should be in the cause. I would allow the 1st defendant’s appeal out of time to such an extent.
Merits of the appeal against the costs order made on 14 October 2020
80. The hearing held on 14 October 2020 concerned the Rehearing Summons. At the hearing, the plaintiff submitted, which was accepted by the 1st defendant, that the court no longer had jurisdiction to re-hear the Non-Party Discovery Summons because the order made on 25 August 2020 had already been sealed on 5 October 2020. The learned Master therefore dismissed the Rehearing Summons, and ordered the 1st defendant to pay costs to the plaintiff forthwith in the sum of $6,000.
81. According to the handwritten notes of the learned Master, his reasons for making such a costs order were as follows:
“Turning to the question of costs, it seems to me that by only taking out the summons is insufficient to stop P from perfecting the orders. D should have asked leave to prevent P from doing so, e.g. for a stay of execution.
[Therefore], I order D1 to pay P costs of the summons.”
82. The 1st defendant’s solicitor argued that:
“The 1st Defendant would submit that it was reasonable for the 1st Defendant to have issued the Rehearing Summons in the circumstances. It remained good until 5 October 2020 when the Order was perfected and sealed. It was through no action, or fault, of the 1st Defendant, that the court could not adjudicate the Rehearing Summons on 14 October 2020. It was due to the own making of the Plaintiff and his legal advisors, alone. At the very least, why the 1st Defendant ought to pay for the costs of the Rehearing Summons up to 5 October 2020?
[…]
The 1st Defendant respectfully submits that after the CJR, and having due regard to the provisions under Orders 1A and 1B of the Rules of the District Court, the Plaintiff ought not have perfected the order of 25 August 2020 when an application to rehear the [Non-Party Discovery] Summons had been taken out, and pending to be heard.
The Summons ought to have been adjudicated upon, on its own merits. The application to rehear the [Non-Party Discovery] Summons provided the court precisely the opportunity to do that. The court was deprived of that opportunity by the own making of the Plaintiff. This is not justice or fairness. The 1st Defendant was forced to take a more formal route, to appeal against the Order, and more costs were incurred. This kind of conduct of the Plaintiff has to be discouraged, given the considerations under the said Order 1A and 1B.”[14]
83. The question here is whether the plaintiff was under any duty, particularly after the CJR, in withholding the perfection of the order dated 25 August 2020 in the light of the 1st defendant’s taking out of the Rehearing Summons.
84. The 1st defendant’s solicitor did not mention specifically pursuant to which provision(s) of Order 1A or 1B of the RDC it was alleged that the plaintiff’s solicitors ought not have perfected the order dated 25 August 2020 before the hearing of the Rehearing Summons. I suspect that he was referring to Order 1A rule 3 of the RDC which reads:
“The parties to any proceedings and their legal representatives shall assist the Court to further the underlying objectives of these rules.”
85. In my view, there was no such duty on the part of the plaintiff’s solicitors as alleged by the 1st defendant’s solicitor.
86. First of all, under Order 1A rule 3 of the RDC quoted above, the duty which was imposed on the plaintiff’s solicitors was to assist the Court to further the underlying objectives but not to assist another party. To put it in another way, the duty that was imposed here was a duty to the court, but not to the other side.
87. Furthermore, we must not lose sight of the obligation on the part of the plaintiff’s solicitors to perfect a court order on a timely basis. On this matter, Order 42 rule 5(5) of the RDC provides that:
“Every order made and required to be drawn up must be drawn up by the party initiating the application upon which the order was made and if that party fails to draw up the order within 7 days after it is made any other party affected by the order may draw it up.”
88. On the other hand, paragraph 1 of Practice Direction 16.1 stipulates that:
“A draft order should be submitted for approval as soon as practicable but in any case not later than 7 days after the pronouncement of the order. As regards who should submit a draft order for approval, solicitors should note Order 42, rule 5.”
89. It can thus be seen that if the argument of the 1st defendant’s solicitor is accepted, then it would mean that the duty which was imposed by CJR would require the plaintiff’s solicitors to breach their obligations under another part of the RDC and a Practice Direction. That cannot be right.
90. In my view, the taking out of the Rehearing Summons per se would not have the effect of justifying the delay in the perfection of the court order concerned. In the circumstances of the present case, it would be up to the 1st defendant to apply to the court and ask for a suitable court order in ensuring that the learned Master would still have jurisdiction to rehear the Non-Party Discovery Summons by the time of the hearing. With greatest respect, the 1st defendant’s solicitor only had himself to blame for failing to take further steps in protecting his client’s position.
91. Moreover, it should also be borne in mind that the Rehearing Summons was necessitated because of the failure on the part of the 1st defendant’s solicitor to mark his diary properly which led to his absence from the hearing on 25 August 2020. Even if the learned Master agreed on 14 October 2020 to set aside his own order made on 25 August 2020, it would not be unreasonable for him to order the 1st defendant to pay for the costs of the Rehearing Summons, nor do I think he had erred in law in making such an order.
92. I therefore come to the conclusion that the costs order made by the learned Master on 14 October 2020 was not unreasonable nor that he had erred in law.
93. The 1st defendant’s appeal in this regard is therefore dismissed.
ORDER
94. By reasons of the aforesaid,
(1) I allow the 1st defendant’s appeal against the costs order dated 25 August 2020 as follows:
(i) Paragraphs 2 and 3 of the order dated 25 August 2020 shall be set aside;
(ii) It is ordered that the costs of and occasioned by the Non-Party Discovery Summons (including the costs of the Commissioner of Police in the sum of $5,200 paid by the plaintiff to the Commissioner of Police) shall be in the cause of this action.
(2) The 1st defendant’s appeal against paragraph 1 of the order dated 25 August 2020 and paragraph 2 of the order dated 14 October 2020 shall be dismissed.
COSTS
95. The 1st defendant has only succeeded in its appeal against the costs order made on 25 August 2020. I think the costs of the appeal against such a costs order would be roughly around 30% of the total costs of the appeal.
96. In my view, the appeal against the non-party discovery order should not have been made. Apart from the fact that the arguments made by the 1st defendant are unmeritorious, the appeal actually cannot serve any meaningful purpose. As emphasized time and again in this Decision, CCB had already provided the plaintiff with the document which they described as “employment agreement” before the hearing on 25 August 2020. Even though the document apparently was not an employment agreement as such but an agency agreement, the plaintiff was content with what he had been given, and no further action against the Commissioner of Police was taken. Hence, even if this court were to set aside the substantive discovery order against the Commissioner of Police herein, it cannot change the fact that the agency agreement had been provided nor would it have any effect on the subsequent procedure of this case.
97. If the plaintiff were legally represented in this appeal, given the result of the appeal and what I observed above, I would have thought a fair order would be for the 1st defendant to pay a certain proportion of the plaintiff’s costs of the appeal.
98. However, as aforesaid, the plaintiff’s legal aid certificate had been discharged, and he had not lodged any written submission for the purpose of this appeal. I therefore make a costs order nisi that there be no order as to the costs of the appeal. The above order nisi shall become absolute in the absence of application to vary (which, if any, shall be made by letter) within 14 days hereof.
| ( H. Au-Yeung )
District Judge |
The plaintiff acting in person, not lodged submission
Ching & Co for the 1st defendant
[1] Paragraph 3 of the Statement of Claim
[2] The affirmation was affirmed on 5 February 2020, and it must have been served on the plaintiff’s solicitors on or before 11 February 2020: See paragraph 10(6) below.
[3] Quoted from CCB’s letter dated 20 December 2019
[4] The letter was dated 21 January 2020 which must be a typo because this letter was replying to the letter of the plaintiff’s solicitors dated 11 February 2020
[5] The hearing had been re-fixed from 21 July 2020 because of stay of proceedings herein caused by the 2nd defendant’s application for legal aid in early July 2020
[6] Quoted from the transcript of the hearing
[7] For some reasons, the rehearing application was only heard on 14 October 2020
[8] At that time, both the plaintiff and the 1st defendant were legally represented
[9] Paragraph 14 of the 1st defendant’s written submissions
[10] Paragraphs 32 – 34 of the 1st defendant’s written submissions
[11] Paragraph 47 of the 1st defendant’s written submissions
[12] Paragraph 48 of the 1st defendant’s written submissions
[13] Yuan Chu Chen & Others v Chen Min Chun & Others (HCA 1714/2015, unreported, 6 December 2017), at paragraph 7
[14] Paragraphs 123, 125 and 126 of the 1st defendant’s written submissions