No disclosure of insurance policy but beware

In Moulin Global Eyecare Holdings Limited (in liq) v Olivia Lee [2013] 3 HKLRD 72, the Court of Appeal refused to order inspection of an insurance policy ("the policy") referred to in an affidavit filed on behalf of the defendant.

The Rules of the High Court Order 24, Rules 10-11A (“RHC O.24, rr.10-11A”) allow a party to inspect and obtain copies of a document “referred to” in pleadings or affidavits. However, the court can still refuse inspection if the document is irrelevant or it would be unfair to order its production.

In brief, the plaintiff company (in liquidation) commenced proceedings against the defendant. Settlements reached between the plaintiff and certain non-parties were disclosed to the defendant pursuant to a court order, but subject to conditions as to the persons allowed to review the documents concerned. The defendant applied to expand the parties entitled to access the settlement agreements to include her insurer. In doing so, she referred to the policy in her supporting affidavit.

The plaintiff applied for an order that the defendant disclose the policy.

At first instance the court declined to order production because: (i) it was irrelevant; (ii) production would be prejudicial to the defendant, as the plaintiff would gain a tactical advantage if it became aware of the coverage limit under the policy.

The plaintiff appealed to the Court of Appeal. That appeal was dismissed.

In short, the Court of Appeal noted that O.24, r.13 conferred on the court a broad and unfettered discretion to consider whether production was necessary for fair disposal of the cause or matter or saving costs. This included consideration of the degree of relevance and importance of the document and the context of the application. The advantages and disadvantages of ordering production were also relevant to the question of “fairness”.

The Court of Appeal concluded that disclosure of the policy would provide the plaintiff with “a windfall and manifest advantage”.

The case serves as a reminder for parties to consider carefully what documents they refer to in (among other things) their pleadings and affidavits. Failure to do so risks having to give “early” disclosure, which could be strategically damaging. As the Court of Appeal noted, generally speaking a party who refers to a document in a pleading or an affidavit would normally be required to give inspection of it.

- David Smyth, Senior Partner, Smyth & Co in association with RPC