Redland Precast Concrete Products (China) Ltd v. Aes Steel Mould (Hong Kong) Ltd

HCCT 20/2018

[2021] HKCFI 1342

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 20 OF 2018

(TRANSFERRED FROM HCA 2730 OF 2015)

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Before: Hon Mimmie Chan J in Chambers (open to public)

Date of Hearing: 11 May 2021

Date of Decision: 11 May 2021

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D E C I S I O N

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1.The already adjourned trial of this action has, since March 2020, being fixed to commence in September 2021, which is less than 5 months away, and not a generously long period of time for a construction dispute with issues on quality of work done and on quantum of costs and damages.

2.These proceedings were commenced in November 2015. On 19 November 2019, this Court issued directions and granted leave to the parties to adduce single joint expert evidence on defects and on quantum (“Expert Directions”). Joint instructions were sent in December 2019 to the expert appointed for defects, Mr Chan. He produced his defects report on 13 January 2020 (“SJE Report”).

3.The trial was scheduled to commence in February 2020, but had to be adjourned due to the general adjournment caused by the pandemic. In the Plaintiff’s Opening Submissions dated 1 February 2020 filed in anticipation of the trial in February, the Plaintiff already indicated that it intended to cross-examine Mr Chan on the SJE Report.

4.In March 2020, the trial was re-scheduled to commence on 27 September 2021, with 12 days reserved on the basis of the status of the pleadings and the original directions for trial.

5.It was only on 19 February 2021 that the Plaintiff applied by summons for leave to appoint one Mr Eric Chiu to be the Plaintiff’s expert on defects and to answer the questions raised for the expert, as per the Expert Directions of 19 November 2019. The application was supported by the affirmation of the director of the Plaintiff, Mr Lau Chun Ming (“Lau”). In Lau’s affirmation, he deposed to the fact that shortly after the new trial dates were refixed in March 2020, the Plaintiff had asked Mr Chiu to review the SJE Report, and that Mr Chiu commenced preparation of his expert report in June 2020, but it was not until February 2021, nearly a year after the adjournment of the original trial dates, that Mr Chiu produced his expert report, which was 200 pages long excluding appendices. Mr Chiu’s draft report was then made available to the Defendant.

6.The grounds of the Plaintiff’s application for leave to appoint its own expert is that, according to Counsel, the SJE Report was “largely founded upon the parties’ unpleaded case”, that Mr Chan’s expert conclusions are unsustainable, that he had referred to irrelevant matters or documents, and that he had not referred to relevant facts in the witnesses’ statements when expressing his opinion.  As such, it was contended that the SJE report would not be of assistance to the Court at trial.  The Plaintiff argued by way of contrast that Mr Chiu’s opinion was detailed, and had referred in his report to facts and matters in witnesses’ statements to support at least some of his conclusions on the Defendant’s liability.  The Plaintiff claims that Mr Chan’s opinion was oversimplified and of “loose tone” in comparison.

7.The grounds relied upon by the Plaintiff are in my view insufficient and inadequate to support its application to file its own expert report and to rely on the opinions of Mr Chiu at trial.  First and foremost, the impact of the application on the milestone trial dates must be considered. This will be dealt with below.  However, I am not satisfied overall that the Plaintiff’s complaints against the SJE Report should be addressed by permitting it to rely on its own expert report.

8.There have been more than enough cases of trial being unduly prolonged and distracted, and the costs of preparation for trial being wasted unnecessarily as a result of prolix, very often unnecessarily complicated expert reports.  Single joint expert evidence is preferred and has been used as the starting point for expert directions by the Construction Court.  It is not useful to refer to cases in which separate experts, or further experts after the engagement of single joint experts, have been allowed.  Each case must be decided by reference to its own individual circumstances, depending on the issues in dispute, the stage at which the matter has to be considered, the reasons relied upon and the overall fairness to the parties.

9.The fact that there is an opinion (in this case that of Mr Chiu) which is materially different from the opinion in the SJE Report cannot be the reason for the Expert Directions to be ignored. Otherwise, it will be encouraging parties to shop for experts to see if a different and more favorable conclusion in its favour can be found, and that is not conducive to costs effectiveness of proceedings nor to expeditious disposal of a case. As observed in Chinachem Charitable Foundation Limited v Chan Chun Chuen [2009] 5 HKC 119, experts shopping can lead to potential abuse and unfairness, as well as compromising the impartiality of expert evidence which is of great importance in the fair resolution of disputes by the court. Permitting a party to instruct a new expert inevitably requires the parties to restart the whole process of expert instruction, which effectively means wasting all the time and costs already incurred in compiling and preparing the existing expert reports.

10.The basis for the difference in opinion, as identified by the Plaintiff, has to be carefully examined before its application to produce a new expert report can be allowed.

11.If, as contended by the Plaintiff, Mr Chan had in the SJE Report relied on matters which are not pleaded, or are irrelevant, the Plaintiff will have good grounds and will be entitled at trial to ask the Court to exclude consideration of these matters.  If there are matters in the factual witnesses’ statements which are relevant to the expert’s opinion evidence, they should be drawn to the attention of Mr Chan, for his consideration as to whether his opinion should be varied, or otherwise maintained.  If Mr Chan’s opinion is incorrect or unreliable by virtue of his failure to take into consideration relevant factual matters, it is open to Counsel for the Plaintiff to question Mr Chan in cross‑examination, and to make submissions to the Court at the appropriate stage at trial.  As Counsel for the Defendant has rightly pointed out, there are procedures established for clarification to be sought from single joint experts (Chan Yuet Keung v Harmony (International) Knitting Factory Ltd [2010] 5 HKLRD 599; Chan Chi Lam t/a Hoi Fat Construction Co v Lam Woo & Co Ltd, unreported, HCCT 52/2014, 13 March 2017).  With all these options open to the Plaintiff, it will not be prejudiced simply because it contends that Mr Chan’s conclusions are based on unpleaded matters, or have failed to take factual matters into his consideration.

12.It is not for an expert to argue in his report on matters of facts set out in witnesses’ statements, nor to argue on the construction of contract documents or terms - which are matters for Counsel’s submissions at trial, and for the Court to determine.  It is unnecessary for experts to elaborate at length on these matters of facts or on their relevance, as Counsel suggested Mr Chiu has properly done, and what Mr Chan failed to do.  If the Plaintiff cannot cross-examine Mr Chan because of absence of facts, that is not a problem caused by the SJE Report, but a problem in the factual witnesses’ statements, which should have dealt with all relevant and pleaded matters.  For unpleaded matters, they do not have to be dealt with in the witness statements at all.

13.As for the other matters identified (in Dennis Kwok Ho Ming v Poon Sui Cheong Albert (unreported, 29 December 2017, HCMP 1526, 1527 & 1528/2013) to be of relevance in the Court’s consideration of whether or not a party should be permitted to instruct its own expert to challenge the SJE Report, such as the nature of the dispute, the amount at stake, the delay and the effect on trial, I have considered them but I am not satisfied that, balanced against delay, the proximity to trial and the alternatives open to the Plaintiff with regard to the alleged defects in the SJE Report, it would either be just, or in accordance with the underlying objectives of the CJR, to permit the further expert report of Mr Chiu.

14.The main consideration is the delay.  If the Plaintiff had made its application, in March 2020 when the original trial dates had to be adjourned, the Court might have been more susceptible to granting leave.  However, despite having received the SJE Report in January 2020, and having been made aware of what it regarded as the inadequacies of the SJE Report, the Plaintiff did not apply to the Court to consider its application for leave to appoint its own expert until February 2021.  There have been no good reasons to justify this delay.  In the interim between March 2020 and February 2021, the Plaintiff could have raised its concerns with both the Defendant and Mr Chan, and sought the Defendant’s agreement as to whether the Plaintiff could appoint its own expert before the trial should resume.  I have not been referred to any evidence that any such attempts had been made.  Instead, with only 5 months to trial, the Defendant was served with a lengthy report and appendices, to consider the options open to it with regard to the new report on defects.  This is not in accordance with the CJR objectives of procedural economy, expeditious dealing with the case, cost-effectiveness of practice and procedure, fairness, or facilitating settlement of disputes.  The Plaintiff instead proceeded to appoint its expert in March 2020 and the expert took the leisure and liberty of 10 months to prepare the report before service on the Defendant.  The 10 months could have been spent by the Plaintiff in conferring with the Defendant on suitable alternatives, including preparing further instructions to Mr Chan, and seeking clarification from him.  This is a prime example of the Plaintiff failing to take steps to properly prepare for trial until the last months.

15.Five months between granting leave to adduce further expert evidence and commencing trial is not, from experience and taking into consideration the issues in dispute in this case, a reasonably fair timetable for the Defendant to consider Mr Chiu’s report, to engage another expert if that is what the Defendant decides to do, and to prepare the documents required for trial.  It is obviously undesirable to adjourn and delay the trial again.  The Plaintiff’s application does have impact on milestone dates, and there is prejudice to the Defendant if it should be required to make these last minute preparations before the trial commences.  I do not consider that giving leave to the Plaintiff to adduce expert evidence at this stage, for the reasons it relies on, will be just or fair to the Defendant, when the Plaintiff itself has sat on its application for 12 months.

16.Just as importantly, the Plaintiff’s application to appoint Mr Chiu as an expert and to rely on Mr Chiu’s report is not a fair or cost-effective proposal to deal with the alleged problems of the SJE Report, because of its choice of candidate.  In asserting that Mr Chan’s conclusions are unsubstantiated, and that the Plaintiff has lost confidence in Mr Chan as the joint expert because of the defects in the SJE Report, the Plaintiff seeks to rely instead on the report of Mr Chiu when, as the Defendant has pointed out, there are serious questions as to whether Mr Chiu is a totally independent expert who would not be influenced or biased by his connections with the Plaintiff.

17.It is true that, as Counsel for the Plaintiff pointed out, Mr Chiu already, on his own volition, disclosed in his expert report that he has been a consultant of the Plaintiff since 2011, and that since 2003, he had worked for companies which are connected with Lau - the substantial shareholder of the Plaintiff.  Mr Chiu was an executive director of a listed company in which Lau was a major shareholder, executive director and chairman.  Since 2001, Mr Chiu has been providing advice on contract matters and “of various nature” to Lau and his companies.  He further disclosed that he has known Lau’s family for over 20 years and had from time to time provided advice and assistance to them in different matters.

18.What Mr Chiu failed to disclose in his report is that, on the evidence of Mr Lai Kin Chor of the Defendant, Mr Chiu had as the Plaintiff’s representative taken part in a full day substantive mediation session on 8 November 2016, when various matters relating to the dispute in these proceedings had been discussed, and settlement options had been explored through the mediator.  The Defendant pointed out that Mr Chiu would have been privy to privileged and confidential information disclosed by the parties in the course of the confidential meetings in mediation.

19.These concerns and objections expressed by the Defendant as to Mr Chiu’s role and involvement with the Plaintiff are reasonable, and not without basis as giving rise to a perception that there is a real danger of bias on the part of Mr Chiu as an expert.

20.If the Plaintiff should be permitted to produce and rely on the opinion evidence of Mr Chiu, there would be further time and costs to be wasted at trial, by arguments as to whether Mr Chiu truly appreciated his duties to the Court, to act as an impartial and independent expert, and whether his testimony and evidence on defects can be accepted by the Court.  Even though there is no absolute bar to Mr Chiu acting as expert by virtue of his acting as a consultant to the Plaintiff, where it is not clear which opposing view of the experts should be preferred on any disputed issue, the Court may well prefer the opinion of Mr Chan as opposed to that of Mr Chiu in view of his connections with the Plaintiff.  The costs of granting leave to produce Mr Chiu’s report, and the days of examination and cross-examination of the 2 expert witnesses on the basis of Mr Chiu’s evidence, could well be all totally wasted.

21.The undue delay on the Plaintiff’s part in making its application, coupled with its choice of the expert proposed to replace Mr Chan, in my view smack of expert shopping, to obtain an opinion more favorable to the Plaintiff.  This cannot and will not be condoned by the Court.

22.For all the above reasons, the Plaintiff’s Summons for leave is dismissed, with costs on indemnity basis.  The report of Mr Chiu was prepared without leave of the court and such costs should not be allowed to be recovered from the Defendant even if the Plaintiff should succeed at trial in its claims made.

Ms Queenie WS Ng, instructed by KH Lam & Co, for the plaintiff

Mr Vincent Li, instructed by Lui & Law, for the defendant