Cyberworks Audio Video Technology Ltd (in Compulsory Liquidation) v. Mei Ah (HK) Co Ltd

HCA 677/2006

[2020] HKCFI 347

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 677 OF 2006

________________________

AND

HCA 678/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 678 OF 2006

________________________

AND

HCA 2780/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2780 OF 2006

________________________

AND

HCA 658/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 658 OF 2011

________________________

___________________________________________

REASONS FOR RULING

___________________________________________

Introduction

1.This Ruling seeks to address important practical matters for case management, and in particular in the context of the current General Adjournment Period (“GAP”) arising from the Covid-19 situation in Hong Kong.

2.These consolidated actions were originally fixed for trial commencing on 18 February 2020.  The trial period was reserved for 17 days, up to and including 11 March 2020.  However, as a result of the GAP, the trial was unable to commence as originally fixed.  As at the time of writing this Ruling, it is presently unknown when the GAP will end.

3.In any event, another feature of the Covid-19 situation is that persons may be discouraged, or perhaps prevented, from travelling to Hong Kong.  This is certainly not going to be the only case in which witnesses who ordinarily reside overseas will either prefer not to travel to Hong Kong to give evidence, or will be restricted or prevented from travelling to Hong Kong to give evidence.

4.In this particular case, and for this reason, the plaintiff seeks leave to adduce the evidence of one of its witnesses by video-conferencing.  The plaintiff therefore seeks directions for the use of the facilities in the Technology Court.

5.The application is not controversial between the parties, and I have been provided with a Consent Summons dated 13 February 2020 by which the parties jointly seek a Consent Order in the following terms:

“1. The Plaintiff be granted leave to adduce the evidence of Joost Johannes Joseph Bekkers by videoconferencing.

2. The use of the Technology Court be directed only insofar as necessary for the giving of evidence by Joost Johannes Joseph Bekkers by use of the Technology Court’s videoconferencing facility on 21 February 2020, or in the event such date is not available any other date between 18 February 2020 and 11 March 2020; such evidence to be given from HK 3pm until no later than HK 8pm.

3. The Plaintiff be directed to:

a. Apply to the Clerk of Court in the High Court, to fix dates for the hearing in the Technology Court;

b. To contact and maintain such liaison with the Technology Court’s technical and other staff as may be required to give effect to Order 1 hearing.

4. Such other directions as the Court sees fit; and

5. Costs of this application be costs in the cause.”

6.The application is supported by the Affidavit of Katherine Elizabeth Jones, one of the solicitors for the plaintiff.  The affidavit explains the travel restrictions which have been imposed upon Mr Bekkers, and the consent of the defendants to his evidence being given by video-link. It also traverses the usual ground in support of such an application by reference to the provisions of Practice Direction 29.

7.Irrespective of the consent of the parties, the way in which evidence is to be taken at trial is a case management decision. Therefore, it requires active consideration by the Court, in this case by me as the assigned trial Judge.  Active case management may require decisions on individual applications, or for individual directions, to be made in a broader context.

8.However, on the current limitation of Court business during the GAP to matters which are “urgent and essential”, it might be thought that there is some doubt as to whether the Court is able to deal with the Consent Summons, even to make the order sought by consent.  Whilst there may later be a widening of the scope of matters which are regarded as being urgent or essential, in any event I take a different view.

9.It seems to me that case management is an ongoing process.  In the current circumstances, it would be sensible for the Court and the parties’ representatives to discuss, and for the Court to give directions, as to the way in which this case will be managed in future.  In the uncertainties of the length and limitations of the GAP, it would also seem sensible at least to canvas the possibility of giving directions on alternate contingent bases, which specifically seek to anticipate and provide for the potentially different scenarios which might arise.

10.Acknowledging that oral hearings conducted physically with the attendance of parties and/or their representatives together with the Judge (and judiciary staff) in a courtroom are currently not permitted on public health grounds, the obvious thing would be to conduct a hearing via telephone.

11.The question arises whether telephone hearings are permissible.  As will be seen from the following analysis, at least in the current circumstances I have no hesitation in deciding that they are permissible.

12.I therefore directed such a telephone hearing, and these are my reasons for doing so.

Analysis

13.I am dealing with matters in so far as they relate to proceedings in the High Court, and in particular to the Court of First Instance.  Those matters are ordinarily regulated by the High Court Ordinance Cap 4 (“HCO”) and the Rules of the High Court (“RHC”).  There are, of course, similar provisions to be found in the District Court Ordinance and the District Court Rules.

14.There is no express provision in the HCO or RHC which requires court hearings to be held with physical attendance of parties or their representatives.

15.The relevant provisions in the HCO contain terms including “hearing”, “hear”, “be heard”, “a judge sitting …”, “a judge … sitting in court”, and “appear”.  None of these terms are defined in the HCO, or the Interpretation and General Clauses Ordinance Cap 1 (“IGCO”).

16.Further examples include:

(1) Section 32A HCO states that:

“Business in the Court of First Instance shall be heard and disposed of in court except insofar as it may, under this or any other enactment or in accordance with the practice of the Court, be dealt with in chambers.”

(2) Under RHC O.32, r.5, if a party fails to “attend” a chambers hearing, the Court may proceed in its absence.

(3) Similarly, under O.35, r.1(1), if both parties fail to “appear” at trial, the action may be struck out of the list and if one party does not “appear”, the judge may proceed with the trial in its absence under O.35, r.1(2).

(4) Section 28 HCO and Order 33 refer to a “place” of trial.

17.Though references to, for example, “places” of hearings and trials might indicate the physical gathering of the Judge and the parties and the representatives in one place, which is certainly historically the norm, the words do not of themselves appear to mandate physical attendance.  It is also common that the actual parties to cases do not attend at Court, but are represented by solicitor or Counsel.  Though “attendance” and “appearance” are commonly understood to mean actual physical attendance in Court, there is no provision in the HCO or RHC actually prohibiting attendance by alternative means.

18.On the contrary, since the Civil Justice Reform which took effect in 2009, the Court and the parties together have been mandated to further the “underlying objectives” provided for in Order 1A.

19.Order 1A rule 1 provides that:

“The underlying objectives of these rules are –

(a) to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court;

(b) to ensure that a case is dealt with as expeditiously as is reasonably practicable;

(c) to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings;

(d) to ensure fairness between the parties;

(e) to facilitate the settlement of disputes; and

(f) to ensure that the resources of the Court are distributed fairly.”

20.Order 1A rule 2(1) requires the Court to give effect to the underlying objectives (a) when it exercises any of its powers (whether under its inherent jurisdiction or given to it by the rules or otherwise); or (b) when it interprets any of the rules or a practice direction.  It might be emphasised that the requirement to give effect to the underlying objectives arises whenever the Court exercises any of its powers or interprets any rule in the RHC.

21.Order 1A rule 3 imposes a duty on the parties to any proceedings and their legal representatives to assist the Court to further the underlying objectives.

22.Perhaps most importantly for present purposes is Order 1A rule 4, which imposes a positive duty on the Court to manage cases, and to do so actively.  Materially, that rule provides as follows (with my emphasis):

“(1) The Court shall further the underlying objectives of these rules by actively managing cases.

(2) Active case management includes –

(a) encouraging the parties to co-operate with each other in the conduct of the proceedings;

(b) identifying the issues at an early stage;

(c) deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others;

(d) deciding the order in which the issues are to be resolved;

(e) encouraging the parties to use an alternate dispute resolution procedure if the Court considers that appropriate, and facilitating the use of such a procedure;

(f) helping the parties to settle the whole or part of the case;

(g) fixing timetables or otherwise controlling the progress of the case;

(h) considering whether the likely benefits of taking a particular step justify the cost of taking it;

(i) dealing with the case without the parties needing to attend at court;

(j) dealing with as many aspects of the case as practicable on the same occasion;

(k) making use of technology;

(l) giving directions to ensure that the trial of the case proceeds quickly and efficiently.”

23.Reference can also be made to Order 1B. Under Order 1B rule 1, various general powers of management are identified, it being specifically pointed out that the list of powers in the rule is in addition to and not in substitution for any powers given to the Court by any other rule or practice direction or by any other enactment or any powers it may otherwise have.  One of the general powers is (with my emphasis) to:

“take any other step or make any other order for the purpose of managing the case and furthering the underlying objectives set out in Order 1A.”

24.Order 1B rule 2 provides a power to the Court to make orders of its own motion, as well as on an application. Order 1B rule 3 allows the Court, where it considers that it is necessary or desirable to give a direction on the procedure of the Court and that the direction is unlikely to be objected to by the parties, to give a direction of its own motion and without hearing the parties.  Such a direction is in the first instance by way of order nisi, which will become absolute 14 days after the order is made unless a party has applied to the Court for varying the order.

25.It is fair to point out that the possibility of telephone and video attendance was the subject of some consideration in the process of Civil Justice Reform.  During the working report stages, it was noted that CPR 3.1(2)(d) of the English Rules confers power on the English Court to hold a hearing and receive evidence by telephone or by using any other method of direct oral communication: see §87 of the Final Report.

26.Indeed, Practice Direction 23A of the English Civil Procedure Rules at §§6-7, which deals with telephone hearings and video-conferencing, interestingly provides at §6.9 that no party, or representative of a party, to an application being heard by telephone may attend the judge in person while the application is being heard unless every other party to the application has agreed that he may do so.  This seems to me to be a point of fairness, and the maintenance of both the appearance and fact of fairness, which can usefully be borne in mind also in Hong Kong.

27.But the wording of Order 1A rule 4 does not expressly refer to telephone or video hearings. Proposal 31 had suggested that provisions be made for dispensing with attendance, and for use of modern means of communication for hearings where costs may be saved with a view to streamlining interlocutory applications: see pp267-268 of the Final Report.  But, at §528 of the Final Report, it was stated:

“Most of the respondents commenting on Proposal 31 were in principle in favour of exploring ways to enable hearings to be held by telephone or video conference. Such conferencing would, however, only be viable if enough lawyers and other interested parties were interested in using such a system. Bearing in mind that the savings achievable, if any, would be relatively slight in a geographically small jurisdiction like Hong Kong and (as the Bar Association pointed out) that certain resources would be needed for this proposal to be put into effect, there is reason to doubt whether sufficient interest exists to make pursuit of this suggestion worthwhile. The Working Party accordingly does not recommend taking this suggestion any further.”

28.As a result, Recommendation 87 stated that “The Working Party recommends that the proposal for provision to be made for dispensing with attendance at hearings through using telephone or video conferencing facilities should not be pursued.”  This provides the background to the absence of any express provision relating to hearings to be held by other means.

29.But three points seem to me to arise from that consideration.  First, it seems that telephone and videoconferencing facilities were considered together, and not separately.  Secondly, the purpose of the consideration was essentially to consider how to regulate hearings conducted by such facilities.  Thirdly, I think the benefits of hearings using telephone or video-conferencing are not limited to costs issues; many other benefits might be obtained.

30.In my view, it is necessary to consider telephone hearings and video hearings separately, as different considerations may apply.  Whilst it might be accepted that video-conferencing resources may not yet be widely enjoyed by legal professionals in Hong Kong, the same certainly could not be said of the telephone.  Persons and firms have ready access to telephone conferencing facilities, either directly or through the employment of telephone conference service providers. Further, if telephone hearings are to take place, they can properly be regulated through the exercise of the Court’s own powers to ensure fairness, including those powers given and mandated under the underlying objectives.

31.In any event, not only has it been more than a decade since CJR was implemented, it has been consistently recognised that the situation of the GAP is “unprecedented”.  It cannot be in the interests of the administration of justice, or the maintenance of the rule of law in Hong Kong, for all work in the civil courts effectively to come to a halt simply because hearings normally require the kind of physical attendance which health considerations point against, where numerous court hearings can effectively, cost-effectively, expeditiously and fairly be dealt with over the telephone. (I ignore for present purposes the possibility of disposal on the papers.) Leaving aside the question of costs, there are clear benefits from conducting telephone hearings so as to continue management and disposal of cases, if circumstances would otherwise prevent that from happening.

32.The modern approach to the interpretation of statutes is to adopt a purposive interpretation.  The statutory language of the HCO and the RHC is construed having regard to its context and purpose.  Words are given their natural and ordinary meaning unless the context or purpose points to a different meaning, and context and purpose are considered when interpreting the words used.

33.Section 19 of the IGCO also expressly provides that:

“[a]n Ordinance shall be deemed to be remedial and shall receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Ordinance according to its true intent, meaning and spirit”.

34.There is also the concept of “always speaking” legislation.  Where the meaning of a statutory term has changed since the statute was enacted, the Court’s trend is to take the legislation as “always speaking”, rather than “historical”.  This means that the statute is applied to the circumstances as they arise and the history of the enactment is not relevant.

35.In this case, even assuming the correct approach might depend on what the legislature can best be taken to have meant in the particular context, it can hardly be imagined that when the Court and the parties and their representatives were put under a positive duty actively to manage cases including by making use of technology, that would somehow preclude the use of such (old) technology as the telephone in circumstances where the other underlying objectives are undoubtedly furthered by its use.

36.Telephone directions hearings would, in my view, promote the kind of active case management on points set out in Order 1A rule 4, at least including: (a) encouraging the parties to cooperate with each other in the conduct of the proceedings; (g) fixing timetables or otherwise controlling the progress of the case; (h) considering whether the likely benefits of taking a particular step justify the cost of taking it; (i) dealing with as many aspects of the case as practicable on the same occasion; (j) dealing with the case without the parties needing to attend at court; (k) making use of technology; and (l) giving directions to ensure that the trial of the case proceeds quickly and efficiently.

37.A telephone hearing would obviously also permit the parties to be “heard”, in circumstances where that might otherwise be prevented, or significantly delayed.  Avoidable delay should itself be anathema under active case management.  A telephone hearing would also obviously promote the fair and efficient disposal of the proceedings.

38.Further, in this case, each legal team to the proceedings is led by Senior Counsel, Mr Charles Manzoni SC and Mr Rimsky Yuen SC respectively, each of whom is experienced both in sitting as arbitrator and as acting as advocate in commercial arbitrations.  In commercial arbitrations, directions hearings held by telephone are entirely routine.  On the basis that I think it necessary or desirable to give a direction on the procedure of the Court that there should be a directions hearing held by telephone, I would therefore consider that such a direction is unlikely to be objected to by the parties, so that I can make it of my own motion and without hearing the parties.

39.Leaving aside Counsel, I think I can also infer from the Consent Summons already provided to me that the parties and their solicitors are themselves actively seeking to further the progress of this trial, and to do so cooperating with each other (just as the underlying objectives require).  It seems to me that in the current unfortunate and frustrating circumstances they would welcome pro-active case management by the trial Judge.

40.In fact, the current Covid-19 crisis is actually an opportunity for the Courts and parties to litigation to reassess how cases can best be actively managed in furtherance of the underlying objectives. Whilst this Ruling is born of the current circumstances, and addresses those circumstance, there seems to me to be a strong argument for moving matters in a similar way beyond the end of the crisis.

41.I think it must be acknowledged that concerns may be expressed that hearings held by telephone might offend against the general principle for the open and public administration of justice.  Nevertheless, the general principle already provides for exceptional cases when the Court may sit in private, where the administration of justice would be rendered impracticable by the presence of the public.  One such example is where it is necessary for the public safety. Therefore, if the view is that it is necessary for the public safety that ‘face-to-face’ hearings with the physical attendance of persons in Court must be suspended, then it seems obvious that the administration of justice could only practicably be continued by the exclusion of the public.

42.In this context, and by way of analogy, the Courts are familiar with the use of video-links in receiving witnesses’ evidence: see Practice Direction 9.5 and Live Television Link and Video Recorded Evidence Rules Cap 221J.  In Daimler AG v Leiduck, Herbert Heinz Horst[2013] 2 HKLRD 822, the Court of Appeal allowed the 1^st defendant to give evidence by video link for the purposes of trial.  Barma JA held (at §11) that the question was one of case management, taking into account whether or not the use of the Technology Court for this purpose would be likely to promote the fair and efficient disposal of the proceedings, to save costs and/or materially to delay disposal of the proceedings, as set out in §§4 and 5 of Practice Direction 29.  It was further held (at §20) that the medical evidence clearly and unequivocally stated that it would be hazardous to the 1^st defendant’s life and health to have to undertake the journey to Hong Kong.  Having considered other countervailing factors, it was held (at §28) that the course best calculated to achieve a just result for both parties was to permit the giving of evidence at the forthcoming trial by way of video link.

43.This lends support to the exercise of the Court’s wide case management powers in balancing the O.1A underlying objectives against healthcare concerns, with the support of technology.

44.Reference can also be made to proceedings in the Court of Final Appeal, where section 47 of the Court of Final Appeal Ordinance Cap. 484 (“CFAO”) provides that the Court or Appeal Committee may, if it considers it necessary in the interests of justice or public order or security, direct that (subject to certain exceptions set out in sub-section (4)) no person other than a person nominated by the Court or the Committee shall be in court or in the building in which the Court or the Committee sits.

45.In Chow Shun Yung v Wei Pih Stella (2003) 6 HKCFAR 299, in an unanimous decision of the Appeal Committee, Ribeiro PJ held (at §25) that the section is to regulate the access of the public to the Court and its precincts when hearings are being held in relation to properly constituted proceedings which have arrived at such hearing stage.

46.Even in circumstances of a telephone hearing, recordings can be made to which the parties, and perhaps the public, might later have access if appropriate.  For example, the Judge could sit in his or her courtroom, using a speakerphone so that all participants in the telephone hearing would be recorded using the DARTS system.

47.In the particular case with which I am now dealing, both Senior Counsel practice from the same set of Chambers, and Counsel and their instructing solicitors and any representatives of their clients might (if they thought it appropriate, and safe) usefully gather in one conference room for the purposes of the telephone hearing.  That practical measure may assist in cutting down on, for example, persons potentially speaking over each other.

Result

48.In the circumstances, I directed of my own motion that (unless the GAP has by then ceased) there would be a telephone directions hearing at 11am on 25 February 2020.  Detailed technical arrangements were to be made in consultation with my clerk.

49.At that hearing, the parties were told to be prepared to discuss and offer potential directions which might be made for the management of this case, including potential contingent arrangements depending upon the date when hearings in Court with the physical attendance of parties, representatives and witnesses might resume.

50.Obviously, that would require some prior discussion and perhaps agreement between the parties’ representatives.

51.The hearing would also canvas and make any appropriate directions in relation to the attendance of any witness by use of video-conferencing facilities in the Technology Court.

Postscript

52.The telephone hearing did in fact take place, as directed, on 25 February 2020.  It was conducted using telephone conference facilities.  As by now might be expected, no technical difficulties arose.  Those conducting the hearing were just as would have conducted a physically attended hearing, namely Leading Counsel for both sides and myself as the assigned trial Judge.  Junior Counsel and representatives of the instructing solicitors also dialled into and listened to the call.

53.I sat physically in my own court room, using a speakerphone so that the entire conversation was recorded on the DARTS system. As a result of the hearing, I was able to give various contingent directions.

Acknowledgement

54.I wish to record my gratitude to Miss Theresa Chow of Counsel, who has assisted with some of the independent research necessary for me to consider this Ruling, as amica curiae.

Gall, Solicitors for the plaintiff

Chan, Lau & Wai, Solicitors for the 1^st defendant, 2^nd defendant, 3^rd defendant and 4^th defendant