STEP BY STEP LTD AND OTHERS v. DOROTHY JANE FURNESS AND OTHERS

STEP BY STEP LTD AND OTHERS v. DOROTHY JANE FURNESS AND OTHERS

The court allowed the appeal in part: it varied the Master's order to require discovery of specified transactional classes of supporting documents for the 3rd defendant (banking records, records of income, records of purchases and expenses, records of assets) from incorporation to September 2008 verified by affidavit; it upheld the limitation of audited accounts to the end of the 2007-2008 financial year and refused the plaintiffs' broader open‑ended request for all auditor working papers and supporting documents and refused discovery of supporting accounting documents for the 4th defendant because those requests were overbroad, not shown to be necessary and amounted to fishing; the court...

Citation
STEP BY STEP LTD AND OTHERS v. DOROTHY JANE FURNESS AND OTHERS
Parties
1st Plaintiff: STEP BY STEP LIMITED; 2nd Plaintiff: NEW SUCCESS ENTERPRISES LIMITED; 3rd Plaintiff: STEP UP LIMITED; 1st Defendant: DOROTHY JANE FURNESS; 2nd Defendant: RAPHAEL HOMER ECHALUCE; 3rd Defendant: ENTERTAIN COMPANY LIMITED; 4th Defendant: MAD DOGS WANCHAI PUBLIC HOUSE LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
16 September 2009
Case Number
HCMP840/2007
Procedural Posture
Civil Action Discovery Application / Appeal From Master's Decision in Chambers
Outcome
Appeal allowed in part; Master's orders varied to order limited discovery for 3rd defendant and to refuse wider categories and discovery for 4th defendant
Legal Topics
Specific Discovery, Relevance and Necessity, Audited Accounts, Tracing Misappropriated Funds, Admission of Further Evidence on Appeal
Source Language
EN
Civil Procedure Company Law Equity Insolvency/tracing Evidence Specific Discovery Relevance and Necessity Audited Accounts +2 more

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Parties

STEP BY STEP LIMITED

1st Plaintiff

NEW SUCCESS ENTERPRISES LIMITED

2nd Plaintiff

STEP UP LIMITED

3rd Plaintiff

DOROTHY JANE FURNESS

1st Defendant

RAPHAEL HOMER ECHALUCE

2nd Defendant

ENTERTAIN COMPANY LIMITED

3rd Defendant

MAD DOGS WANCHAI PUBLIC HOUSE LIMITED

4th Defendant

Procedural Posture

Civil Action Discovery Application / Appeal From Master's Decision in Chambers

Legal Issues

  1. 1 Whether the documents sought are relevant and necessary for fair disposal or saving costs
  2. 2 Whether broad supporting audit documents should be ordered or limited to transactional records
  3. 3 Whether discovery in respect of the 4th defendant amounts to fishing and should be refused

Ratio Decidendi

The court allowed the appeal in part: it varied the Master's order to require discovery of specified transactional classes of supporting documents for the 3rd defendant (banking records, records of income, records of purchases and expenses, records of assets) from incorporation to September 2008 verified by affidavit; it upheld the limitation of audited accounts to the end of the 2007-2008 financial year and refused the plaintiffs' broader open‑ended request for all auditor working papers and supporting documents and refused discovery of supporting accounting documents for the 4th defendant because those requests were overbroad, not shown to be necessary and amounted to fishing; the court...

Court Disposition

Appeal allowed in part; Master's orders varied to order limited discovery for 3rd defendant and to refuse wider categories and discovery for 4th defendant

Orders

  • Discovery to be given of specified classes of documents in category (2) for the 3rd defendant from incorporation to September 2008, to be verified on affidavit (banking records including cheque books, deposit slips, withdrawal slips, cash books, telegraphic transfer forms and confirmations; records of income...
  • Audited accounts of the 3rd and 4th defendants limited to the end of the financial year 2007-2008 and not to date