Tsang Woon Ming v. Lai Ka Lim also known as Lai Kai Lim and Others

HCCW 407/2016

[2020] HKCFI 891

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO. 407 OF 2016

___________________

__________________

BETWEEN

__________________

HCA 33/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 33 OF 2017

__________________

BETWEEN

__________________

HCMP 2689/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2689 OF 2017

__________________

BETWEEN

__________________

(Heard Together)

Before: Hon Anthony Chan J in Chambers

Date of Hearing: 20 May 2020

Date of Decision: 20 May 2020

________________

R U L I N G

________________

1.This is an 11^th hour application by the Respondents of HCCW 407 of 2016, the Plaintiff of HCA 33 of 2017 and the Plaintiff in HCMP 2689 of 2017 (collectively “Respondents”) for the leave of the court to allow 3 witnesses, namely, the 2^nd Respondent (“Lin”), the beneficial owner of the 3^rd Respondent (“Ho”) and Ms Li Biyun to give evidence by video link at the trial which is scheduled to commence on 25 May 2012[1], two working days away.

2.On the evidence filed in support of this application, these witnesses reside in respectively Taiwan, Macau and Shenzhen.  The 3 actions, which are to be tried together, arose from a shareholders’ dispute.  Lin and Ho’s company are two of the 4 shareholders.  Ms Li was a director of the company which is the subject of the winding up proceedings.  The evidence of these witnesses has been described as “highly relevant to the central issues of the Actions and essential for the fair disposal of the Actions”. 

3.In the case of Lin and Ho, the basis of this application is that the attendance of these witnesses at the trial will require 2 periods of quarantine for each of them.  When they arrive in Hong Kong, they will have to go through a 14-day quarantine period.  The same quarantine will apply upon return to their place of residence.  There will therefore be a total period of quarantine of 28 days, unless the current restrictions imposed by reason of Covid-19 are relaxed.  In light of the quarantine requirements, the witnesses will not be able to attend the trial in person. 

4.In respect of Ms Li, she is subject to travel restrictions as a Mainland resident and she is unable to obtain a visa to come to Hong Kong.  However, the evidence suggests that there is an avenue open for an application of a visa on special ground, although such a visa will only be valid for 14 days.  Regrettably, there is no evidence whether Ms Li is eligible to apply for such a visa, nor any evidence whether the duration of the same may be extended on application.  It should be said that the burden of making out this application is on the Respondents. 

5.Before dealing with the merits of this application, I must mention the sheer lateness of it.  The trial was fixed over a year ago.  According to the directions of the court, the Petitioner (“Tsang”) was due to lodge and serve his Opening Submissions on 11 May 2020.  The Summons for this application was only filed on the following day, 12 May 2020. 

6.The reason put forward for the lateness was the General Adjourned Period (“GAP”) put in place by reason of the Covid-19 pandemic.  I regret to say that it is not a good reason.  The expiration of GAP on 3 May 2020 was announced in advance on 22 April 2020.  There was then sufficient time for at least Lin and Ho to come to Hong Kong and go through quarantine prior to trial. 

7.The timing of this application, whether intentional or otherwise, is such that the court is held to ransom in that the refusal of this application may result in an adjournment of the trial due to the importance of these witnesses.  That is certainly not a desirable result. However, the court must have regard to the rights of Tsang[2] to a fair trial of these proceedings. 

8.This application is rigorously resisted by Tsang.  Mr Cheung, who appears with Mr Yip for Tsang, described this application as “seeking wholesale transplant of the process of giving evidence of [the Respondents’] entire case”. 

9.The applicable legal principles were considered by the Court of First Instance in Sun Legend Investments Ltd v Ho Yuk Wah [2007] 4 HKLRD 239, §12 and Re James Henry Ting [2013] HKCFI 1569, §§28-30, and by the Court of Appeal in Re Chow Kam Fai [2004] 2 HKLRD 260; Mahajan v HCL Technologies (Hong Kong) Ltd [2010] 5 HKLRD 119; and Daimler AG v Leiduck (No 2) [2013] 2 HKLRD 822.  The principles may be summarised as follows :

(1)  The giving of evidence by video conferencing facilities (“VCF”) is an exception;

(2)  The starting point is that proceedings are conducted in court.  I would add that this is more important when it comes to a trial;

(3)  Sound reason is required to justify a departure from the starting point;

(4)  The solemnity of court proceedings and its atmosphere is highly important in the taking of evidence;

(5)  The court may be more disposed to exercise its discretion to allow evidence by VCF in respect of technical or purely factual evidence which involves no serious issue on credibility or relatively unimportant evidence;

(6)  Where the credibility of the witness is seriously contested, it is important for the witness to be examined under the solemn atmosphere of the court;

(7)  Costs and convenience may be important considerations which the court will have to weigh in the determination of the application;

(8)  Ultimately, it is a matter of judgment of the court choosing the course best calculated to achieve a just result by taking into account all the material considerations, including whether the witness is capable of attending the proceedings, any prejudice to the other party, the Underlying Objectives[3], any delay to the proceedings and practical considerations like the availability of the facilities (see Practice Direction 29).

10.On behalf of the Respondents, Mr Yip relies on the dictum in Sun Legend Investments Ltd, §12(2) that the threshold for a valid reason for the use of VCF is not high. With respect, it may not be very useful to focus on the threshold when the exercise is a holistic one balancing the countervailing interests before the court.

11.It should be noted that the use of VCF is a growing trend.  Recently, the court had adopted the use of such facilities for the disposal of cases during GAP (not extended to trials).

12.Having considered the matter carefully, I do not believe that the interest of justice is served by allowing this application in respect of Lin and Ho. 

13.To begin with, there is no good reason to justify this application.  As analysed above, there was sufficient time for the witnesses to come to Hong Kong to give evidence.  The real reason for the application is their unwillingness to have their business commitments interfered during the periods of quarantine. 

14.The evidence in respect of Ho is that he is “unable and unwilling to [go through quarantine] as he is currently managing an ongoing renovation project of a luxury store which is due to open on 16 June 2020”.  As regards Lin, he is “not able to subject himself to a long period of quarantine due to his speaking engagement”.

15.Whilst I can understand that quarantine is not an expected or welcome obligation, Lim and Ho (indirectly) are parties to the winging up proceedings, and they were instrumental in bringing HCA 33 of 2017 and HCMP 2689 of 2017 against Tsang.  Giving evidence at the trial should be a matter of top priority for them.  The trial was fixed long ago.  It was a matter of managing their affairs to ensure that they are available for the trial.  Putting their business interest first is not a good or sound reason for this application.

16.Further, it should be said that going through quarantine does not mean that a person is cut-off form the world.  VCF can be used for speaking at an event, and various technologies are available to able people to work from their residence.

17.The lateness of this application, coupled with the unsatisfactory proposal concerning the locations where the witnesses are to give evidence, mean that (a) there is little time for the parties to try to agree the appropriate “neutral” venues for the witnesses to give evidence instead of their offices as proposed; and (b) it is impossible for Tsang to make arrangements for the attendance by a representative of his solicitors (who will be required to go through quarantine) at each of the venues during the evidence.

18.In respect of the former, I agree with Mr Cheung that it would be inappropriate for witnesses to give evidence in their office, and “neutral” venues are essential for the purpose.  The latter is of great importance to ensure that there will be no foul play, eg, the trial bundles to be shown to the witnesses are unmarked and there will be no prompting of the witnesses.

19.There are other unresolved issues of practicality, eg, the equipment to be used for the VCF will have to be suitable and compatible with that of the court.  Indeed, Mr Cheung complains that many of the matters raised in PD 29 have not been addressed by the Respondents adequately or at all.  It is unnecessary to enumerate them all here. 

20.As in most shareholders’ disputes, credibility of the witnesses will be hotly contested at the trial.  Undoubtedly, the evidence of Lin and Ho are important and will be rigorously tested.  It is therefore inconsistent with the governing principles to allow their evidence to be given outside court, and equally inconsistent with the legitimate expectation of Tsang that their evidence be scrutinised in the solemn atmosphere of the court.  The cases where the court would allow the convenience of a crucial witness to justify giving evidence via VCF would be rare.

21.It is an important pillar of our legal system that justice is not only done but be seen to be done.  There will be a justified sense of grievance on the part of Tsang that Lin and Ho will have an advantage over him if this application is allowed.  The court will be deprived of the opportunity to observe them giving evidence in person under a solemn atmosphere[4]. In addition, there will likely be interruptions of the evidence due to, eg, quality of the audio, and such interruptions will normally be to the disadvantage of the cross-examiner.

22.For these reasons, I decline the application in respect of Lin and Ho. 

23.Much of the above analysis applies to the case of Ms Li.  There is, however, an important distinction in that, notwithstanding my misgivings over the quality of the evidence on her inability to come to Hong Kong (see para 4 above), I am prepared to accept that she is unable to come to give evidence, and it is a sound reason to support this application.

24.Further and importantly, Mr Yip has made clear to the court that if this application is granted in respect of Ms Li there will be no adjournment application by the Respondents in respect of the trial.

25.As regards the various issues of practicality identified above, it will be quite different for the parties to try to agree an appropriate venue for 1 witness as opposed to 3 who are situated in different areas.  In respect of the attendance of a representative of Tsang in the course of Ms Li’s evidence, I believe that it is feasible for a Mainland lawyer to be instructed to do so.  Quite fairly, Mr Cheung did not suggest otherwise. 

26.Fortunately, the first week of the trial will be taken up by the evidence of Tsang and his witness.  There should therefore be sufficient time for the various issues of practicality to be resolved. 

27.Taking all material circumstances into account, I believe that acceding to the application in respect of Ms Li is the course best calculated to achieve a just result, and I grant the application accordingly. 

28.I shall hear the parties on the consequential directions and costs. 

Mr Lawrence Cheung and Mr Micky Yip, instructed by Kelvin Cheung & Co, for the Petitioner in HCCW 407/2016, the 1^st Defendant in HCA 33/2017 and the 1^st Defendant in HCMP 2689/2017

Mr Richard Yip, instructed by Tonys Lawyers, for the 1^st to 3^rd Respondents in HCCW 407/2016, the Plaintiff in HCA 33/2017 and the Plaintiff in HCMP 2689/2017