Choy Yuen on, David v. Lam Kin Chung and Another

HCA 2599/2014 & HCA 110/2018
(Heard Together)

[2021] HKCFI 287

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTIONS NO 2599 OF 2014 & 110 OF 2018

________________________

BETWEEN

________________________

Before:  Hon K Yeung J in Chambers

Date of Hearing:  7 January 2021

Date of Decision:  4 February 2021

________________________

D E C I S I O N

________________________

A.  Introduction

1.These are the appeals brought by the plaintiff (“P”) against the decisions (the “Decisions”) of Master Winnie Tsui (the “Master”) given on 1 June 2020 dismissing P’s Summonses both dated 19 November 2019 (“P’s Summonses”) for leaves to engage an expert in place of the one he originally engaged.  The issue is whether P has made out a case, based on certain alleged conduct of his original expert, for the Court to exercise its discretion in favor of his applications.

2.Two actions are involved in these appeals.  They have been ordered to be tried together.  For the purpose of these appeals, there is no need to make separate reference to them, except to note that two identical summonses (ie P’s Summonses) have been filed, one in each action.

3.Mr K M Chong together with Mr Alvin Chong appeared for P.  Mr Jason Pow SC leading Mr Peter K C Wong appeared for the 1^st defendant (“D1”).

4.In respect of the 2^nd defendant (“D2”), he on 8 May 2020 by fax notified all parties and the Court that he would, for personal reasons, withdraw from the hearing of P’s Summonses.  He did not appear during this hearing.  I proceeded with the appeals in his absence.  I deemed it expedient to do so.

5.I record that although the index of Hearing Bundle C suggests that P objects to the inclusion of the documents contained therein, Mr Chong clarified at the outset of the hearing that his position is just that those documents are in his submission not relevant.  He otherwise has no objection to this Court referring to them.   

B.  The affirmatory evidence

6.On behalf of P, Mr Chan Chun On (“CCO”) has filed his 3^rd and 4^th affirmations (“CCO/Aff3” and “CCO/Aff4”).  CCO is the partner of Messrs C O Chan & Co (“COC & CO”), the solicitors previously acting for P.  CCO/Aff3 was filed in support of P’s Summonses.  CCO/Aff4 was filed in reply to those filed on behalf of Ds in opposition.

7.In opposition, D1 has filed one affirmation (“D1/Aff”).  D1 has also engaged Cheng Hung Yan (“Cheng”), who is a director of the Valuation and Advisory Services Department of Cushman & Wakefield Limited (“C&W”).  C&W is a real estate service firm in Hong Kong providing, inter alia, surveying service.  Cheng is in effect the expert engaged by D1 for the purpose of resisting P’s Summonses.  Cheng has filed one affirmation (“Cheng/Aff”) on D1’s behalf.

8.Before his withdrawal from the hearing, D2 had also filed one affirmation in opposition[1].

C.  P’s claims

9.P’s claims and the underlying facts have no direct bearing upon these appeals, except to explain why valuation evidence is deemed necessary during the trial.

10.P is a member and director of Soka Gakkai International of Hong Kong (the “Association”).  The Association is a Buddhist organization.

11.D1 and D2 are also members of the Association.

12.The Association used to own certain commercial premises at Chai Wan (the “Chai Wan Property”).

13.In July 2011, the Association sold the Chai Wan Property at HK$80 million.

14.Sometime shortly later, and still in 2011, the Association purchased certain commercial premises at Sai Wan Ho at $23.8 million (the “Sai Wan Ho Property”, and together with the Chai Wan Property, collectively the “Subject Properties”).

15.As summarized by Mr Chong[2]:

(a)  It is P’s case that both of the Subject Properties were sold and purchased by P pursuant to resolutions passed by the Association;

(b)  P’s causes of action relate to D1’s and D2’s publication of matters said to be libelous of P, to the effect that:

(i)  P had sold and/or procured the sale of the Chai Wan Property at a gross undervalue;

(ii)  P had purchased and/or procured the purchase of the Sai Wan Ho Property at an overvalue;

(iii)  P had, by deceptive and fraudulent means and in collaboration with outsiders, made profits from breach of his fiduciary duties in the purchase of the Sai Wan Ho Property; and

(iv)  P had caused loss to the Association, made profits for himself, and had brought shame upon the Association.  P was unworthy to be a member and director of the Association.

16.In the light of the nature of the claim, expert valuation evidence on the Subject Properties becomes relevant to assist the Court to decide whether they were sold and/or purchased at an undervalue or overvalue.  The valuation evidence will also be relevant to the defence of justification which D1 and D2 have raised.

D.  The expert directions, and the exchange of expert reports

17.In mid-December 2018, CCO started to have communications with Mr Charles Chan of Savills Valuation & Professional Service Ltd (“Charles Chan” and “Savills” respectively) with the view of engaging him as P’s expert.

18.On 19 December 2018, Charles Chan wrote to CCO and asked for the names of the parties in the present actions for conflict check.

19.CCO says that sometime after 19 December 2018, he was informed that the conflict check came back negative, and he subsequently confirmed the appointment of Charles Chan as P’s expert[3].

20.By Order of 20 December 2018, Master H Au Yeung gave certain expert directions (“Master Expert Directions”).  Leave was granted to the parties to adduce one surveyor’s report each on (1) the market value of the Chai Wan Property as at 28 July 2011, (2) the market value of the Sai Wan Ho Property as at 26 August 2011, and (3) the annual rental income that may be generated by the Chai Wan Property during a particular period.  P was directed to inform the Court and Ds in writing the name of his expert by no later than 31 December 2018.  Without prejudice joint meeting between the experts and the filing of a joint statement were also directed.

21.On 31 December 2018, CCO informed the Court and Ds that P would retain Charles Chan as his expert.

22.On 14 January 2019, Charles Chan wrote to CCO and said that sometime after 21 December 2018:

“ [D1] approached us for a new instruction regarding valuation of a property in Wanchai for financing purpose.

Since this potential new instruction from [D1] isn’t related to the subject matter in any aspect save and except the identity of the instructing party, we consider there won’t be any conflict of interests arising from both instructions.  If you have a different view in this regard, please let us know by close of business today.”

23.There is no evidence that CCO or P expressed any different view to Charles Chan as requested.

24.On 31 January 2019, CCO wrote to Messrs Rowdget W Young & Co (“RY&Co”) then solicitors for D1 to complain about what Charles Chan had disclosed to P.

25.On 12 February 2019, RY&Co replied.  It is a 3-page letter.  Explanations were offered.  Mr Pow summarizes those explanations given as follows:

(a)  D1 is an experienced real estate merchant since 1987;

(b)  D1 has business contact and successful deals with Savills since 1999;

(c)  The valuation of the property involved a project loan from banks;

(d)  D1 has never provided any privileged information to Charles Chan;

(e)  D1 has informed Savills that he was a party to the present actions so that Savills could take necessary steps as part of its intake process.

26.CCO in CCO/Aff3 describes his reaction upon receipt of that letter.  He says that it came to him as a complete surprise.  He says further[4] that:

“ Had I been informed that there is potential conflict of interest at the outset, prior to instructing Savills, I would have advised [P] to instruct another surveyor expert to avoid unnecessary dispute. Unfortunately, the newly arisen potential conflict came only after [P] has confirmed instruction with Savills. After consulting with [P] and counsel, we reached the conclusion that Savills, being a globally recognised real estate services provider and a listed company, would handle our situation professionally and with integrity, thereby refrained from taking out further application to vary our expert appointment, so as to avoid further delay on the matter. On 15^th February 2019, an email was sent to Mr Charles Chan to officially confirm his appointment as [P’s] expert.” (Emphasis added)

27.In that email of 15 February 2019[5], CCO referred to certain previous telephone conversations he had had with Charles Chan.  The contents of those conversations have not been revealed, whether in that email or otherwise on affirmations.  CCO then said “I confirm our client shall retain you for the relevant valuation service …”.

28.The deadline for the exchange of expert reports had been extended a number of times.  CCO says in CCO/Aff3 that it was as a result of the further time Charles Chan required and requested to prepare his reports.

29.On 3 April 2019, 3 draft reports were sent by Charles Chan to CCO.  They dealt with separately the valuation of the Chai Wan Property (the “CW(V) Draft Savills Report”), its rental valuation (the “CW(R) Draft Savills Report”), and the valuation of the Sai Wan Ho Property (the “SWH Draft Savills Report”, and collectively the “Draft Savills Reports”).

30.CCO says[6] that P’s legal team needed time to consult Charles Chan on any question or issue that may arise from those Draft Savills Reports, and that “this is especially important when the conclusions reached by Mr. Charles Chan in the [Draft Savills Reports] completely contradicted [P’s] case”.

31.The deadline for P to exchange expert reports was subsequently on 16 April 2019 extended on an unless basis to 30 April 2019.

32.In the meantime, on 10 April 2019, CCO sent a list of 7 questions to Charles Chan in relation to the Draft Savills Reports (the “Queries”).

33.On 25 April 2019, Charles Chan sent to CCO 3 revised reports (the “CW(V) Revised Savills Report”, the “CW(R) Revised Savills Report”, and the “SWH Revised Savills Report”, and collectively the “Revised Savills Reports”).  CCO says[7] that:

“ 20. … After perusing the [Revised Savills Reports], however, it was obvious that Mr. Charles Chan had made no effort in addressing [P’s] questions and there were no significant changes made to the [Revised Savills Reports] when comparing to the [Draft Savills Reports]. And Mr. Charles Chan refused to make any revision to his draft report. As such it is regrettable to say that Mr. Charles Chan as the expert had not been cooperative and failed in his duty to deal with and carry out [P’s] instructions.

21.  In light of the Unless Order, however, [P] could not risk non-compliance and thereby had no alternative but to exchange the [Revised Savills Reports] first and to address the issue later.  As such, [P] and [D1] finally exchanged their expert reports on 30^th April 2019, being the last date for compliance.”

34.There is no evidence from P as to, in respect of the questions they had raised with Charles Chan, what if any further communication he or CCO had with Charles Chan during the period between 25 April 2019 and 30 April 2019.

35.Between 24 May 2019 and 9 July 2019, various without prejudice meetings and telephone calls were held between Charles Chan and Ms Dorothy Chow (“Dorothy Chow”, the expert engaged by D1) to narrow down the differences and in compliance with the expert directions.

36.On 9 July 2019, the Joint Expert Statement was filed.

37.On 30 August 2019, P instructed Mr Jack Chan of Landscope Surveyors Ltd (“Jack Chan” and “Landscope” respectively) to prepare a new set of valuation reports in respect of the Subject Properties. They became ready on 30 October 2019 (the “Landscope Reports”).

38.Mr Pow has prepared as Annex B of his written submissions a table of comparison of the several valuations reports.  Mr Chong has not disputed their accuracy.  The following table is an extract from that annex setting out the conclusions set out by Charles Chan in the Revised Savills Reports and the Joint Expert Statement, and by Jack Chan in the Landscope Reports:

	Sale/Purchase price	Charles Chan		Jack Chan
		Revised Savills Reports	Joint Expert Statement
Chai Wan Property (valuation)	$80m	$116.5m (+46%)	$114.9m	$92m (+15%)
Chai Wan Property (rental)	N/A	$10,971,600	$11,758,800	$10,812,200
Sai Wan Ho Property	$23.8m	$18.4m (-23%)	$19.2m	$20.7m (-13%)

39.In gist, taken at their face values, the Revised Savills Reports show that the Chai Wan Property was sold at 46% lower than the market price, and the Sai Wan Ho Property purchased at 23% higher than the market price.  The correspondent percentages according to the Landscope Reports are 15% and 13%.

E.  P’s Summonses

40.On 19 November 2019, P took out P’s Summonses.  They were taken out pursuant to Order 38 rule 44.  P sought leave thereby to:

(a)  instruct Jack Chan in place of Charles Chan as the valuator/surveyor expert for P;

(b)  alternatively, to instruct Jack Chan as the second valuator/surveyor expert for P; and

(c)  file and serve the Landscope Reports.

F.  The applicable principles on change of experts

41.There is little dispute between the parties as to what the applicable principles are.  Mr Pow refers this Court to the observations of Lam J (as he then was) at §§23 to 25 in Chinachem Charitable Foundation Ltd v Chan Chun Chuen & another [2009] 5 HKC 190.  Mr Chong instead refers me to Law Chung Fai v Lam Ming Kuen, unrep, HCPI 96/2008, 13 September 2010, wherein Bharwaney J, having cited and considered those same (and some additional) paragraphs from Chinachem, summarized the principles at §9 as follows:

“ 9.  The principles that have to be applied in determining an application to change an expert witness may be summarised as follows:

(a)  The court’s discretion, whether or not to allow a party to change his expert, is exercised within the ambit of the court’s management powers. These powers must be exercised in the light of the underlying objectives of the recent civil justice reform, including the need to ensure the cost effectiveness of the proceedings; to ensure that the case is dealt with expeditiously; to ensure reasonable proportionality having regard to the amount of money involved, the importance of the case, the complexity of the issues, and the financial position of each party; to ensure procedural economy in the conduct of the proceedings; and to ensure fairness between the parties.

(b)  In the exercise of its powers of case management, the court recognises that the primary aim is to secure the just resolution of the dispute in accordance with the substantive rights of the parties.

(c)  Expert shopping is undesirable and, whenever possible, the court will use its powers to prevent it. It can lead to potential unfairness between those who can afford to shop around for the opinions of more than one expert and those who cannot. Expert shopping is not conducive to cost effectiveness of the proceedings and the expeditious disposal of a case.

(d)  The disclosure of the original expert’s report, and the waiver of the privilege that would normally be attached to it, would usually be imposed as a condition for granting permission to call a substitute expert. However, the disclosure of the original expert’s report per se does not guarantee that the court would permit a substitute expert to be called.

(e)  To curtail expert shopping, the court may refuse to grant leave if the only reason for calling a substitute expert is that his opinion is more favourable to the party calling him than the opinion of the original expert.

(f)  However, if the court is satisfied that the just resolution of a dispute requires leave to be granted for a substitute expert to be called, it should not refuse leave simply because the opinion of the substitute expert is more favourable than that of the original expert.

(g)  In every case, the court should examine the grounds put forward by the substitute expert and make a preliminary assessment of the cogency of those grounds as compared with those set out in the report of the original expert and the report of the expert engaged by the other side. If the court is satisfied that there are relevant matters canvassed by the substitute expert which may be important to the just resolution of the dispute which was omitted from the reports of the original expert, or which was outside the expertise of the original expert, a prima facie case would be made up for the admission of the substitute expert report in the interests of the just resolution of the dispute.

(h)  In every case, however, the court must also have regard to other relevant circumstances, such as the potential disruption to the trial, the prejudice to the other parties, and the explanation offered by the applicant for the change of experts. All these matters have to be considered and weighed in the light of and against the underlying objectives of the civil justice reform: to ensure cost effectiveness and economy, expedition, proportionality, and fairness between the parties.

(i)  It is not possible to lay down definitive and exhaustive guidelines to cover and cater for every possible situation that may arise and which prompts an application by a party to change his expert.

(j)  Ultimately, the court strives to do justice between the parties and, in cases where the court permits the parties to call expert evidence, the court strives to ensure a level playing field with fair access to proper experts for all parties.”

42.Mr Pow has in addition referred this Court to Chang Pui Yin & others v Bank of Singapore Limited, unrep, HCCL 12/2013, 5 April 2017, where Mimmie Chan J, noting the unfairness and abuse which expert shopping may lead to, and noting further the time and costs that would be wasted in ordering a new expert, observed at §8 that the “court should not permit the change of experts without very good reasons being adduced”.  

43.On the other hand, Mr Chong has referred me to Edwards-Tubb v JD Wetherspoon Plc [2011] 1 WLR 1373, wherein Hughes LJ observed at §30, inter alia, that:

“ … I certainly accept that there may be perfectly good reasons for a party to wish to instruct a second expert. Those reasons may not always be that the report of the first expert is disappointingly favourable to the other side, and even when that is the reason the first expert is not necessarily right. That means that it will often, perhaps normally, be proper to allow a party the option, at his own expense, of seeking a second opinion. It would not usually be right simply to deny him permission to rely on expert B and thus force him to rely on expert A, in whom he has, for whatever reason, lost confidence …”

44.The approaches explained in the above-mentioned cases are in my view entirely consistent.  They explain that the Court, when faced with an application to replace an expert, should be alive to the possibility of expert shopping and the undesirable consequences which such conduct can lead to.  But on the other hand, the Court should not as a rule simply shut its door to any application for change of experts, but should consider all the circumstances in ways as explained in those cases to see whether good reasons have been shown.  The onus of showing good reasons is on the applying party.  Ultimately, what the court strives to do is to do justice between the parties.

45.I apply the above when considering the present appeals.

G.  P’s reasons for taking out P’s Summonses

46.The onus is on D1 to show good reasons to have Charles Chan replaced by Jack Chan.  Mr Chong accepts that.

47.As summarized by Mr Chong[8], those reasons in his submissions are:

(a)  shortly after his engagement by P, Charles Chan put himself in a position where his own interest and duties to P came into conflict;

(b)  Charles Chan is apparently incompetent due to his refusal to clarify issues which his draft reports had given rise to, which issues P had asked him to clarify; and

(c)  by reason of (a) and (b) above, P has lost confidence in Charles Chan.

48.Mr Chong submits that P is not expert shopping.

49.I state this at the outset.  The end of the present exercise is not to find whether there was any conflict as alleged, or whether Charles Chan was incompetent in the discharge of his duties.  The purpose is to consider the facts underlying those complaints to decide whether, in accordance with the applicable legal principles, good reasons have been made out.

50.I therefore approach the matter as follows.  I will consider first of all the facts underlying the complaints.  I will then consider whether, in the light of those facts, good reasons have been made out.

G.1.  Conflict of interest / Professional integrity — the underlying facts

51.During his oral submissions, Mr Chong developed the issue of conflict of interest under the topic of professional integrity.  Under that same heading he developed further the complaint that Charles Chan had failed to make the necessary disclosure to P in accordance with §§1.3.1 and 1.3.2 of the Rules of Conduct of the Hong Kong Institute of Surveyors (the “Rules of Conduct”).

52.I will consider those two limbs separately.

G.1.a.  Conflict of interest?

53.To start with, there is no evidence that Charles Chan was personally engaged by D1 for the new project, or that he would personally be involved in that project.  The evidence in fact suggests the contrary:

(a)  In D1/Aff[9], D1 said that his instruction was to Savills but not Charles Chan;

(b)  According to the contemporaneous emails produced by D1:

(i)  D1 on 9 January 2019 reminded Charles Chan and a Mr Steven Wong of Savills that he was involved in the present actions.  He on 10 January 2019 further gave them P’s name;

(ii)  On 16 January 2019, Steven Wong replied[10], saying that:

“ Since this potential new instruction does not related [sic.] to the subject matter in any aspect save and except the identity of the instructing party, we consider there won’t be any conflict of interests arising from both instructions.

Anyway we fully understand your concern on this issue and in order to avoid any potential undesirable consequences, we would like to confirm that our Mr. Chan will not involve in this subject valuation assignment and this exercise will be handled by myself and our senior director, Mr. Freddie Ling …”

54.Mr Chong next submitted that given Charles Chan’s position with Savills, the new instructions from D1 would result in some indirect financial benefits to Charles Chan.

55.There is no evidence before me as to the remuneration package agreed between Charles Chan and Savills.  It is sheer speculation to suggest that Charles Chan would benefit somehow from the new instruction.

56.Mr Chong relies also on the time proximity between P’s disclosure of the identity of his expert and the new instruction by D1 to Savills.  That in my view does not by itself establish any conflict.

57.I note further that:

(a)  On 14 January 2019, Charles Chan wrote to CCO and informed CCO of the new instructions.  I have above mentioned the relevant email.  Charles Chan stated therein the view that there would not be any conflict of interest.  P was requested to let him know if he had any different view;

(b)  There is no evidence that P or CCO had expressed any different view to Charles Chan;

(c)  Having on 12 February 2019 received D1’s explanations through RY&Co, and with the benefit of counsel advice, P on 15 February through CCO confirmed the appointment of Charles Chan as P’s expert.

58.Given the above, I accept Mr Pow’s submission in this regard that P’s complaint on the conflict ground is nothing but an unsubstantiated afterthought.

G.1.b.  Breach of the Rules of Conduct?

59.Charles Chan did on 14 January 2019 disclosed the new instructions to CCO and stated the view that there was no conflict.  As I have observed above, there is no evidence that CCO or P conveyed to Charles Chan any view different from that as expressed by Charles Chan.

60.Further, I accept Mr Pow’s submission that the imposition of the disclosure requirements under paragraph 1.3 of the Rules of Conduct is premised upon the existence of conflict or potential conflict.  None has been established in the present case.  Further, I repeat that Charles Chan did state the view that there was no conflict, and there is no evidence that P expressed to him any different view.

G.1.c.  Conclusion on the conflict / professional integrity ground

61.In my view, the facts do not support the complaint of conflict or lack of professional integrity.

G.2.  The incompetence ground

62.P relies primarily on (1) the Queries, and (2) the substantial differences in the opinions of Charles Chan and Jack Chan and the reasons therefor.

G.2.a.  The Queries

63.To start with, I note, as submitted by Mr Pow and not refuted by Mr Chong, that the Queries related only to the Sai Wan Ho Property.  No queries were raised in respect of Charles Chan’s valuation of the Chai Wan Property.

64.P claims that Charles Chan failed and refused to make any revision to the Draft Savills Reports.  I have set out above the material parts of §20 of CCO/Aff3. 

65.Relying on that, Mr Chong submits at §34 of his written submissions that:

“ It is noteworthy from a comparison of Charles Chan’s first and second reports that they are repetitive of the other and, despite queries raised by P’s previous solicitors, Charles Chan has either completely failed or refused to clarify on matters which would, in any event, be required should the matter proceed to trial.”

66.It is factually untrue to say that Charles Chan refused to make any change to the Draft Savills Reports:

(a)  The 1^st question of the Queries related to the flat roof area stated on Appendix II of the SWH Draft Savills Report.  That question has been addressed in the SWH Revised Savills Report.  Mr Chong in the course of his oral submissions accepted that;

(b)  The 7^th question of the Queries related to Appendix III of the SWH Draft Savills Report which was the location plan of the comparables Charles Chan adopted.  That appendix was updated in the SWH Revised Savills Report.

67.The 2^nd question related to the reason why Charles Chan did not include certain area on the ground floor in the calculation of the converted area.  Mr Pow submits that Charles Chan has given reason for the same.  He states in a footnote of Appendix II of the SWH Revised Savills Report that “For the Property and Comparable 2, areas on street level are considered as entrances of the premises and are excluded in the converted area for valuation analysis”.

68.The 3^rd and 4^th questions related to the selection of comparables.  Mr Pow submits that they have effectively been answered when Charles Chan in the SWH Revised Savills Report explained the valuation methodology and criteria of selection of comparables.

69.The 5^th and 6^th questions related to the rationale behind certain conversion rates which Charles Chan had adopted.  Mr Pow accepts that Charles Chan did not explain to P the rationale of his judgment[11].

G.2.b.  The reasons for the differences between Charles Chan and Jack Chan

70.The differences in the opinions expressed by Charles Chan and Jack Chan are substantial.  I have set them out above.

71.At §24 of CCO/Aff3, CCO says that he has consulted Jack Chan why that is so, and sets out the reasons which Jack Chan has given him.  Those reasons are:

(a)  in relation to the Chai Wan Property, failure to consider some relevant comparables, the disregarding of certain saleable ground floor areas, the use of inappropriate conversion factor, insufficient size adjustment, and failure to consider the existing layout;

(b)  in relation to the Sai Wan Ho Property, failure to consider some relevant comparables, the disregarding of certain saleable ground floor areas, the adoption of comparables not proximate in time or dissimilar in nature, and the use of inappropriate conversion factor.

72.In respect of the choice of comparables by Charles Chan, I note the following matters which I regard as significant.  In respect of the Chai Wan Property:

(a)  The Chai Wan Property occupies both the Ground and 1^st Floors of Walton Estate;

(b)  Charles Chan included in the CW(V) Revised Savills Report no comparables from the Ground Floor of Walton Estate;

(c)  In the Landscope Reports[12], Jack Chan included 3 Ground Floor comparables, 2 of which from the Ground Floor of Walton Estate, and the remaining 1 from Winner Centre nearby (the “3 G/F Comparables”);

(d)  Those comparables are either in the very same building which the Chai Wan Property is in or in Winner Center nearby[13], and appear also to be proximate in time (April 2011, and May and June 2012); and

(e)  The report prepared by Dorothy Chow has included those same 3 G/F Comparables[14].

73.D1 engages Cheng to give his opinions on those reasons.  It is for that main purpose that Cheng/Aff was filed.  The following matters from Cheng/Aff are significant:

(a)  Cheng considers those reasons given by Jack Chan as recited CCO;

(b)  he concludes at §23 that the mattes set out in §24 of CCO/Aff3 are merely differences in opinion and are within the reasonable range of disagreement between surveyors;

(c)  Whilst that is his conclusion, I do note the following opinions of his which I regard as significant;

(d)  In respect of the 3 G/F Comparables:

(i)  Cheng notes that Charles Chan has not taken them into account, whilst Jack Chan has (§14(b));

(ii)  he then expresses the following opinions at §§14(c) and to (e)[15], that:

“ (c)  Although I consider that a surveyor, in valuing the [Chai Wan Property], should try to locate relevant and suitable Ground Floor Comparable as far as possible, the lack of Ground Floor Comparables would not preclude a surveyor from arriving at a valuation of the [Chai Wan Property];

(d)  In any event, since the [CW(V) Revised Savills Report] contained no explanation as to why it did not take into account any Ground Floor Comparables, I would refrain from commenting on whether this would affect the accuracy of the valuation results unless and until the rationale behind this comes to light.

(e)  Having perused the valuation table of the [CW(V) Revised Savills Report], it was found that the Saleable Area (GF) of 39.6 sq.m did not include in the Converted Floor Area to arrive at the Market Value.  [P] could have sought a further opinion from his expert in relation to the reason for not including the Ground Floor Comparable and the Saleable Area (GF) in his valuation.”

(e)  In respect of the Sai Wan Ho Property, he says at §19(c) that:

“ Having perused the valuation table of the [SWH Revised Savills Report], it was found that the Saleable Area (GF) of 22.0 sq.m did not include in the Converted Floor Area to arrive at the Market Value. [P] could have sought a further opinion from his expert in relation to the reason for not including the Saleable Area (GF) in his valuation.”

G.3.  Whether good reasons shown

74.I have made my observations on the main facts underlying P’s complaints.  I now consider whether P has shown good reasons for the Orders he is seeking.

75.There are at least 2 questions amongst the Queries which Charles Chan has not expressly addressed and dealt with (see §69 above).  Mr Pow accepts that.

76.There are aspects of the Revised Savills Reports which can give rise to genuine cause for concern.

77.Part of the Chai Wan Property is on the Ground Floor.  The CW(V) Revised Savills Report contains no comparables from the Ground Floor.  It turns out that there are three (ie the 3 G/F Comparables).  Not only are they proximate in time, 2 of them are in the very same building where the Chai Wan Property is in (ie the Walton Estate), and the remaining one in Winner Centre nearby.

78.On my preliminary assessment, the 3 G/F Comparables are very relevant.

79.Both Dorothy Chow and Jack Chan have included them.

80.Charles Chan did not.

81.Cheng opines that a surveyor “should try to locate relevant and suitable Ground Floor Comparable as far as possible”.  He cannot comment on whether the non-inclusion of the 3 G/F Comparables would affect the accuracy of Charles Chan’s valuation unless and until the rationale behind the non-inclusion comes to light.

82.There are also the issues in relation to the Saleable Area (GF) which Cheng opines that “[P] could have sought a further opinion from his expert” in relation thereto.

83.These matters in my view lend support to P’s case that he has lost confidence in Charles Chan.

84.Mr Pow submits that as the 3 G/F Comparables have been included by Dorothy Chow (and hence also in the Joint Expert Statement), they would be considered by the Court in any event.

85.That may be so.  But that does not help P in so far as his level of confidence in Charles Chan is concerned.

86.It further does not help that upon P’s refusal to pay Savills for their professional fees for the preparation of the various reports, Savills have threatened to sue, and P is on the other hand contemplating a complaint to the Hong Kong Institute of Surveyors.

87.Mr Pow points to a number of case management considerations and prejudices which he submits D1 may suffer should P’s Summonses be allowed:

(a)  He submits that P would have the advantage of Jack Chan being able to prepare his reports with the benefit of the reports prepared by Dorothy Chow. In this regard, I accept Mr Chong’s submissions that there will be joint without prejudice meeting between the parties’ experts anyway.  The perceived advantage is in my view illusory;

(b)  On delay, I note that the Landscope Reports are now ready and have in effect already served (as CCO-13).  Exchange can be dispensed with.  Without prejudice meeting can take place soon.  A joint statement can then be filed.  I have further been informed that no milestone date has yet be fixed, and the disruption to any trial is not going to be substantial;

(c)  Mr Pow submits that even if P is to be successful after trial, the damages would be modest, and the further costs that would be necessitated by the substitution of P’s expert would be out of all proportion to the damage allegedly suffered;

(d)  On costs, in the course of submissions, and upon this Court’s request for clarification, Mr Chong accepts that P will have to bear the costs of and occasioned by P’s Summonses, in the sense that he will have to bear any costs wasted on, for example, the previous joint meetings between Charles Chan and Dorothy Chow and the preparation of the Joint Expert Statement, and the further costs that will need to be incurred as a result of the filing of the Landscope Reports.  Whilst the fact that P is willing to compensate D1 on costs is not decisive of the matter, it is one matter relevant to the Court’s exercise of discretion.

88.Mr Pow has made various submissions on the effects of the Landscope Reports on the trial.  He submits that the existing Joint Expert Statement has gone through all the key issues involve, and that P has failed to illustrate how the Landscope Reports can assist the court in securing the just resolution of the disputes.  He also points to various agreements which Charles Chan has reached with Dorothy Chow in the Joint Expert Statement, and that the appointment of Jack Chan may lead to withdrawal of those agreements.

89.I refer back to my observations on the facts underlying the complaint. P has shown causes for genuine concern.  Forcing P to call an expert which he has cause not to trust is in my view not conducive towards the just resolution of the dispute in accordance with the substantive rights of the parties.  The same can be said about holding P to the agreements made on his behalf by an expert who he has cause not to trust.

90.I note that Jack Chan’s opinions are much more favourable to P compared with those of Charles Chan’s.  That could suggest expert shopping. But I remind myself of the relevant considerations made by Bharwaney J in Law Chung Fai, that

“ … the court may refuse to grant leave if the only reason for calling a substitute expert is that his opinion is more favourable to the party calling him than the opinion of the original expert.

However, if the court is satisfied that the just resolution of a dispute requires leave to be granted for a substitute expert to be called, it should not refuse leave simply because the opinion of the substitute expert is more favourable than that of the original expert.” 

91.Having considered all the relevant circumstances, and for the reasons set out above, but subject to the conditions I am going to impose, I am of the views that justice between the parties warrants and justifies the exercise of the discretion in this Court in granting the Orders sought.  In my view, that will ensure a much more level playing field between the parties.

H.  Conditions and Conclusion

92.Whilst P has been able to show good reasons, the reality remains that D1 is taken to court in respect of this matter through no fault of his.  Costs has been wasted.  Further costs will also need to be incurred.

93.Towards the end of the hearing, Mr Pow handed in Daimler AB v Leiduck (re: expert evidence) (No.3) [2018] 1 HKLRD 1188 wherein Lisa Wong J granted the defendants leave to change expert but conditional upon the payment in of a sum as security for the plaintiff’s related costs.  I will adopt the same approach.

94.In the end, I make the following Order:

(a)  Subject to the satisfaction of the condition (the “Condition”) below:

(i)  the appeals are allowed;

(ii)  I grant leave in terms of §1(a) of both of P’s Summonses;

(iii)  I grant leave in terms of §1(c) of both of P’s Summonses, and that P is to file and serve the Landscope Reports within 3 days of the satisfaction of the Condition.  Exchange is thereby deemed;

(b)  If the Condition is not met, the appeals are dismissed;

(c)  The Condition is that P should make a payment into court in the sum specified below within 14 days from the date hereof;

(d)  I make an order nisi that the amount of that sum shall be HK$250,000.  I name that figure bearing in mind that the costs incurred by D1 on the engagement of Dorothy Chow to prepare her original expert reports have not and will not be wasted.  What are are those incurred on the joint meeting with Charles Chan and the preparation of the Joint Expert Statement.  Further costs on reviewing the Landscope Reports, holding joint meeting with Jack Chan, and the preparation of joint expert statement will be necessary.  In the circumstances, I deem the amount of HK$250,000 as a reasonable one;

(e)  §5 of the Master Expert Directions is adopted.

I.  Costs

95.I make the following costs order on a nisi basis:

(a)  The costs of and occasioned by P’s Summonses be to D1 (in the sense as explained in §87(d) above, but excluding the hearing before the Master);

(b)  If P fails to meet the Condition, the costs of and occasioned by P’s Summonses, including the hearing before the Master and the appeals shall be to D1, with certificate for 2 counsel;

(c)  If P meets the Condition, the costs of the hearing before the Master and the appeals shall be P’s costs in the cause, to be taxed if not agreed.  Whilst P is seeking the Court’s indulgence, he is successful in these appeals (if the Condition is met).

96.Any parties who intend to seek any variation of the nisi orders above should write in within 14 days, upon which I will give further directions on the further conduct of the matter.

Mr K M Chong and Mr Alvin Chong, instructed by T K Tsui & Co, for the Plaintiff

Mr Jason Pow SC, leading Mr Peter K C Wong, instructed by Nixon Peabody CWL, for the 1^st Defendant

The 2^nd Defendant was not represented and did not appear