2. Non-party discovery: getting documents from a stranger to the proceedings

2. Non-party discovery: getting documents from a stranger to the proceedings 

In the High Court, discovery against a non-party after proceedings have commenced is governed by section 42(1) of the High Court Ordinance (Cap. 4) and Order 24, rule 7A(2) of the Rules of the High Court (Cap. 4A). In the District Court, it is governed by section 47B(1) of the District Court Ordinance (Cap. 336) and Order 24, rule 7A(2) of the Rules of the District Court (Cap. 336H). 

These provisions allow a party to existing proceedings to seek discovery of documents from a person who is not a party to the litigation. 

The non-party is sometimes described as a “stranger” to the action. Because the person is not already a litigant, the court treats this type of order as exceptional. It will not make an order that is oppressive or unnecessarily burdensome. 

How does the Peruvian Guano test apply to non-party discovery? 

Unlike pre-action discovery, non-party discovery is not confined to the “directly relevant” test. The broader Peruvian Guano test of relevance applies. 

The Peruvian Guano test requires a party to disclose not just documents that are direct evidence for or against an issue in the case, but also any documents that “it is reasonable to suppose” might contain information that could help the party advance his own case or harm his opponent’s case. This includes documents that might not themselves be evidence, but could lead to further inquiries that might turn up useful information. The test is therefore quite broad: if a document could, even indirectly, assist a party’s case or damage the other side’s, or lead a party towards such information, it must be disclosed. 

Imagine a civil case where a company (Company A) is suing another company (Company B) for breach of contract, claiming that Company B failed to deliver goods on time, causing financial losses. However, Company A believes that a third-party logistics company (Company C), which was responsible for transporting the goods, has documents that could support its case. 

Under the Peruvian Guano test, Company A could request non-party discovery from Company C, requiring it to disclose documents that might assist in proving Company A's case or damaging Company B’s defence. For example:  

1. Advancing the applicant’s case: A delivery schedule maintained by Company C showing that the goods were picked up late from Company B’s warehouse. It is reasonable to suppose this contains information that enables Company A to advance its own case regarding Company B’s breach. 
2. Damaging the adversary’s case: Internal Company C emails noting that Company B repeatedly ignored calls to confirm the goods were ready. This is reasonable to suppose would damage Company B's defence (e.g. if Company B claimed Company C was at fault). 
3. Train of inquiry: A contract between Company B and Company C that outlines their delivery obligations. While this contract might not directly address the specific delivery in question, it could lead to further inquiries about whether Company B breached its obligations. For instance, the contract might outline the timelines, procedures, or conditions under which Company B was required to deliver the goods to Company C for transportation. If the contract specifies that Company B was responsible for ensuring timely delivery to Company C, this could lead to further inquiries about whether Company B adhered to these obligations. Further, the contract might contain clauses that highlight penalties or remedies for delays or breaches. This could lead to further investigation into whether such penalties were triggered or whether there were any communications between the parties about potential breaches. 

However, even where the Peruvian Guano test is satisfied, the applicant must still show that the order is necessary. The court will guard against speculative applications and fishing expeditions. 

Limitations on disclosure 

A non-party cannot be compelled to produce documents protected by legal professional privilege. 

The court will balance the need for open justice against the protection of personal data. It may order that documents be redacted to remove personal particulars or sensitive information. 

For highly sensitive documents, the court may restrict inspection to a “confidentiality ring” comprising the party’s legal advisers and expert witnesses only, often with a condition that the information not be shared with the client. 

How is an application for non-party discovery made? 

An application for non-party discovery is made by summons. The summons must be served personally on the non-party and also served on every other party to the action. 

The application must be supported by an affidavit/affirmation that satisfies the following:  

1. Precision: It must specify or describe the documents or classes of documents with care and precision. General discovery is not permitted against non-parties. 
2. Relevance: It must show the documents are relevant to an issue arising in the proceedings. 
3. Necessity: It must show that discovery is necessary either for disposing fairly of the cause or matter or for saving costs. 
4. Possession: It must show the non-party is “likely” to have or have had the documents in his possession, custody, or power. 

The court may refuse the application if the request is too wide, oppressive, or unnecessary. 

The court will typically award the non-party his costs for both the application and for complying with it. If the non-party was faulty or dilatory in responding to an earlier written request for the documents, the court may deny his costs or even order him to pay the applicant’s costs.