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Non-party Discovery


Mar 15, 2018

Prior to Civil Justice Reform (“CJR”) in 2009, non-party discovery was only available for personal injury actions.  However, the scope was later expanded by the CJR to cover all actions. 
The jurisdiction of the Court is granted by s.42 of the High Court Ordinance (Cap. 4) (“HCO”) and O.24 r.7A of the Rules of the High Court (Cap. 4A) (“RHC”). 


The requirements that the applicant has to fulfill are:

  1. the non-party is likely to have the documents sought in his possession, custody or power (s.42(1) HCO; RHC O.24 r.7A(3)(b));
  2. the documents sought are relevant to an issue or issues arising in or which is likely to arise in the proceedings (s.42(1) HCO; RHC O.24 r.7A(3)(b)); and
  3. the order is necessary either for fairly disposing of the matter or for saving costs (RHC O 24 r 8(2))

 

Relevance


As affirmed in the Hong Kong case of Tullett Prebon (Hong Kong) Ltd v Chan Yeung Fong Nick [2011] HKEC 761, the test of relevance remains the Peruvian Guano test, i.e. documents are considered relevant if they contain information which may directly or indirectly enable a party either to advance his own case or to damage that of his adversary. These include documents which may fairly lead to a train of inquiry, which may have either of these two consequences. 


Court’s discretion


The Court in Bruce James Stinson v Gu Ming Gao [2016] HKEC 452 pointed out that even if the requirements had been met, the court must still exercise its discretion. Disclosure orders against third parties are exceptional.  It should neither be used as a fishing exercise for documents nor be speculative.

Factors which should be taken into consideration include:

  1. How important is the information to the issues?
  2. Has the applicant taken appropriate steps to obtain the information within the proceedings before seeking disclosure from the third party?
  3. Would it be sufficient for the court simply to draw adverse inferences on the basis that the party from whom the information was sought within the proceedings has failed to supply the information?
  4. What is the nature of the relationship, if any, between the parties to the proceedings and the third party?
  5. If disclosure is necessary and proportionate will the editing of documents protect private information?

 

Countervailing factors


In exercising its discretion, the court will also balance the need for disclosure in the interests of the administration of justice against any countervailing factor raised by the respondent or the third party. “Protection of personal data” under the Personal Data (Privacy) Ordinance (Cap.486) (“PDPO”) and “duty of confidentiality” under statutory provisions or common law are two comparatively common countervailing factors. 

A balancing exercise concerning weighing up disclosure against right to confidentiality is apparent in the case of Chan Yim Wah Wallace v New World First Ferry Services Ltd [2015] HKEC 762.  The Court in the same case also made “obiter” observations about the extent to which data protection legislation prevented the disclosure of documents relating to accidents that have taken place. One broad observation made by the Court is that the exemptions under s.58(1)(d) and (2) and s.60B of the PDPO (for example personal data held for the prevention or remedying of unlawful or seriously improper conduct by persons, personal data required in connection with any legal proceedings in Hong Kong) do not create any obligation on the information holder to make disclosure. The Court added that the application for discovery must be founded upon the Norwich Pharmacal principle (i.e. disclosure to be ordered against the third party who has become innocently involved in the wrongful acts of others so as to facilitate their wrongdoing) or based on s.41 (which empowers the Court to order pre-action discovery upon satisfaction of certain conditions) or s.42 (see above) of the HCO and the corresponding rules of the High Court.


Costs


The party against whom the discovery order is sought, i.e. the third party, will usually be awarded his costs in normal circumstances. (s.43(2) HCO; O.62 r.3 RHC)

 

For more information on Litigation & Dispute Resolution matters, please contact:-
Barry Hoy | barryhoy@robertsonshk.com | +852 2861 8415

 

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