Chan Wai Yee v. Kwong Wai Piu, The Administrator of the Estate of Wong Chin also known as Kwong Wong Chun (or Gine), Deceased

CACV 411/2020

[2022] HKCA 346

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 411 OF 2020

(ON APPEAL FROM HCA NO 1206 OF 2015)

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Before: Hon Kwan VP, Yuen and Chu JJA in Court

Date of Hearing and Judgment: 15 February 2022

Date of Reasons for Judgment and Decision on Costs: 1 March 2022

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REASONS FOR JUDGMENT AND
DECISION ON COSTS

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Hon Yuen JA (giving the Court’s Reasons for Judgment and Decision on Costs):

1.1.This was the plaintiff’s appeal from the Judgment of DHCJ To (“the judge”) given on 31 July 2020 (“the Judgment”) in which the judge:

(1)  dismissed the plaintiff’s claim for adverse possession of a residential unit in a building in Percival Street/Lee Garden Road (“the Property”);

(2)  ordered that the defendant do have possession of the Property, with mesne profits at the rate agreed between the parties with interest at prime +1% from the date of counterclaim until judgment and thereafter at judgment rate until payment; and

(3)  made an order nisi that the plaintiff pay the defendant’s costs of the action on an indemnity basis, such costs to be taxed if not agreed.

1.2At the conclusion of the hearing of the appeal, we allowed the appeal, set aside the judge’s orders, and made an order that the case be remitted to the Court of First Instance for re-trial before another judge, with a direction for an early hearing date.  We also heard the parties on costs, on which we reserved our decision which will be given below.

Ground of appeal against basis of costs     

2.Before we discuss the appeal, there is one matter which we should deal with first, deriving from the judge’s order that the plaintiff pay the defendant’s costs on an indemnity basis.

3.1.At the conclusion of the trial, the parties’ counsel agreed that costs would follow the event, but the judge did not ask them to address him on the basis of costs.

3.2.   In the Judgment, he made an order nisi for costs to be paid on an indemnity basis.  No reasons were set out.

3.3.   Under Order 42 rule 5B(6) of the Rules of the High Court, either party can apply for variation of a costs order nisi within 14 days.  However, the plaintiff did not do that.  Instead, on 27 August 2020, she filed a notice of appeal in which she included a ground of appeal1 that “without any discussion or explanation, the judge ordered the plaintiff to pay costs of the action on an indemnity basis.  There is no reason to depart from the usual cost order on a party to party basis”.

4.1.This approach was unacceptable.  The purpose of a costs order nisi is to enable the party who is dissatisfied with that order to make submissions2 to the judge on the appropriate order of costs.  Having considered all parties’ submissions, the judge would then decide on the order absolute, normally giving reasons for his decision.  That way, on appeal, the appellate court would have the benefit of knowing the judge’s reasons which it would consider when deciding whether the costs order absolute should be disturbed.

4.2.  It was therefore clearly unsatisfactory for the plaintiff to appeal against the indemnity costs order on the ground that the judge gave no explanation for it, when she had failed to follow the appropriate procedure provided under the rules of court for her to obtain such an explanation.

4.3.  In seeking to justify that approach, counsel for the plaintiff submitted first that Ground (4) was not a stand-alone ground.  However, that is not to the point.  Stand-alone ground or not, a party cannot ignore the procedure provided by the rules for the judge to give a reasoned decision, and then complain that the judge did not give reasons.  Counsel then relied on legal professional privilege.  Whatever counsel’s instructions might have been, it is nevertheless his duty to the Court not to abuse the process. In light of those observations from the court, counsel then abandoned Ground (4).

5.In this court’s experience, this is not the first time that legal representatives have chosen to ignore O.42 rule 5B(6) and failed to apply to vary a costs order nisi, only to appeal the costs order absolute on the ground that the judge had failed to give reasons for the order.  It is our view that to ignore the rules of court in this way is tantamount to an abuse of process.  Such a ground of appeal, stand-alone or not, is liable to be struck out, with the possibility of a wasted costs order against legal representatives.

Background 

6.The action concerned a residential unit in a “walk-up” tenement building3 on Percival Street/Lee Garden Road which was constructed in the 1960's.  It was purchased in the name of an individual who in 1971 assigned it as trustee to Madam Kwong Wong Chun or Gine (“Madam Wong”).

7.The case of the defendant (who was born in 1944) is that he is Madam Wong’s son4. Madam Wong died in 1974, but it was not until more than 42 years later, in 2017, that the defendant obtained Letters of Administration to her estate.  The defendant said in his witness statement (“D’s W/S”) that he was not aware that he needed to obtain letters of administration5, and subsequently he had difficulties proving his identity6.

8.1.It is common ground that on 15 April 1968, Mr Chan Hau Ching (“Mr Chan”), the plaintiff’s father, started to rent the Property from the defendant.

8.2.   The stamped rent receipt7 dated 15 April 1968 (“the 1^st rent receipt”) showed the following:

-  Madam Wong was named as the landlord;

-  the defendant was named as “handling recipient of funds”;

-  the monthly rent was $250;

-  on the side, an address in Bonham Strand, a telephone number (440214), the defendant’s name, and a reference to another person surnamed Kwong who is identified as “aunt”.

8.3.   There is also a stamped receipt8 of the same date in which the defendant acknowledged receipt from Mr Chan of a rental deposit of $250 and the electricity meter deposit of $100.

8.4.   Thereafter Mr Chan lived at the Property with his wife and children (including the plaintiff).  It is common ground that the defendant used to visit the Property to collect rent.  The plaintiff has produced a bundle of rent receipts, each for rent of $250 a month9, ending with one dated 19 March 1980 in which the defendant acknowledged receipt of $500 as rent for the period 15 February to 14 April 1980¹⁰.

9.It is common ground that thereafter for 35 years (when the plaintiff commenced proceedings for adverse possession), no rent has been paid by Mr Chan or the plaintiff or anyone in their family to the defendant or anyone else for occupation of the Property.

The plaintiff’s case     

10.1.The plaintiff’s case is that after March 1980, the defendant did not visit the Property again to collect rent, or at all.  A few months after April 1980, the Chan family took the following actions to look for the defendant.

(1)  Mr Chan “made every effort” to contact the defendant at 440214, ie the telephone number written on the side of the 1^st rent receipt¹¹.  However, no one answered the calls.  (The defendant said¹² this number was cancelled after 1979 as he had moved house: see also §12.4(i) below).

(2)  Mr Chan’s son did a Land Office search against the Property.  The plaintiff produced a receipt dated 24 July 1980¹³ for photo-copying fees for a Land Office Register memorial, which showed that in the assignment in 1971¹⁴, Madam Wong’s address was in Bangkok.  (At trial, the plaintiff admitted that although the family was not informed of Madam Wong’s death, they did not think of writing to her in Bangkok)¹⁵.

(3)  The plaintiff or her father then placed notices¹⁶ in the Sing Tao newspaper for 3 days (15-17 August 1980).  She produced a receipt and the notices which stated¹⁷:

“ SEARCH FOR PERSON

Kwong Wai Piu previously resided at Bonham Strand. Please contact Chan Hau Ching of Percival Street immediately upon seeing [this] newspaper”. (Emphasis added).

10.2.   When the defendant did not respond to the above attempts to find him and did not come to collect rent, Mr Chan (and subsequently the plaintiff) started to treat the Property as his (her) own. The plaintiff’s husband moved in with the Chan family in 1985.  Her siblings moved out one by one thereafter.  Mr Chan died in 2005 and his wife died in 2012.  The plaintiff, her husband and their daughter were the last occupants.

10.3.   The plaintiff gave the following evidence:

(i)  In 1983, after Mr Chan had saved up spare money, he renovated the Property including removing a wall to increase the size of the living room, renovating the walls, and changing the locks of the front gate and front door¹⁸.

(ii)  Also in 1983, the plaintiff installed under her own name a separate water meter for the Property¹⁹.

(iii)  Starting in 1983, the plaintiff attended meetings of the incorporated owners of the building²⁰.

(iv)  In 1986, another member of the family installed under his own name a new electricity meter for the Property²¹ (even though, at the commencement of the tenancy in 1968²², Mr Chan had already paid the defendant a deposit for the electricity meter²³).

(v)  In 1992, Mr Chan and the plaintiff renovated the Property again, and changed the locks on the front gate and front door again.

(vi)  When in September and November 1995, the Building Authority made Building Orders against the building, the plaintiff’s family paid about $12,000 for the share of repair costs allocated to the Property.

(vii)  When in 2010, the Building Authority made another Building Order against the building, the plaintiff participated in the search for building contractors, and paid $30,000- $40,000 for the share of repair costs allocated to the Property.

(viii)  When developers started to acquire units in the building for redevelopment, and other occupants had moved out, the plaintiff moved out of the Property due to her concerns over the lack of hygiene and security in the building, but she kept the Property locked up and kept the key²⁴.

(ix)  She issued legal proceedings against Madam Wong in 2015 for adverse possession and obtained default judgment on 18 October 2017.

(x)  The family had no contact with the defendant after March 1980, until he applied on 6 December 2017 to set aside the default judgment²⁵.

The defendant’s case

11.The defendant’s case below is gleaned from his witness statement, as he did not give evidence at trial in the circumstances discussed in §§15.1 - 15.4 below.

12.1.It was common ground that the defendant did not collect rent after April 1980 and thereafter.  Indeed he did not say that he even demanded rent after that date.  He alleged that was due to the following events:

1980 - 1995

-  In “around April 1980", Mr Chan requested him to renovate the Property, “including alteration to the balcony and the flooring, and the renovation expenses were about $36,000".   As the defendant did not have enough money to do so, they orally agreed that Mr Chan would carry out and pay for the renovation (the value of which was agreed to be $36,000), and the defendant would let Mr Chan and his family live in the Property, rent-free, for 15 years²⁶ (“the 1^st Oral Agreement”).

1995-2010 

-  “Sometime in around the end of 1995, I cannot now recall the exact date but it was around the time when the oral agreement between Mr Chan and me was coming to an end, I went up to the Property to tell Mr Chan that after the lapse of the 15-year rent-free period, I would like to charge $350 a month as rental.  In response, Mr Chan was reluctant to agree to the proposed rental²⁷”.  (Emphasis added).

-  “During that time, Mr Chan also told me that there was an Order to require [sic] the outer walls and windows of the Property and asked me to make contribution thereto.  In light of his reluctance to agree to the proposed rental and the order from the Buildings Department, Mr Chan and I made another oral agreement. Pursuant to the new agreement, Mr Chan would be responsible for carrying out the repairs (the value of which was agreed to be $45,000) and for complying with any other orders of the Buildings Department, and I would let him and his family live in the Property, rent-free, for another 15 years”²⁸ (“the2^nd Oral Agreement”).  (Emphasis added)

2011-2012

-  “In around 2011, I went up to the Property once to look for Mr Chan’s wife, but to no avail. Starting from 2012, my health condition has begun to deteriorate.  Also, I have pension to support my living (as I was a civil servant throughout my whole career), so there was no urge for me to collect the rental from Mr Chan’s wife”²⁹. (Emphasis added).

2013 - 2014

-  “Sometime in 2013 ... I went up to the Property to look for Mr Chan’s wife with a view to negotiating the lease terms, but again to no avail.  In 2014, I had a major health issue and had spent half a year in hospital.  In the same year, I have also begun to live in an elderly care home until to date, and it has become impractical for me to get out to collect rent from Mr Chan’s family”³⁰ (Emphasis added).

12.2.   So, essentially, the defendant’s explanation why he had not collected (or demanded) rent from the Property was that:

-  he had permitted Mr Chan and his family to stay “rent-free” at the Property for 30 years by reason of the 2 Oral Agreements;

-  thereafter, he did not need the money, or was unwell;

-  it was “impractical” for him to go out to collect rent after he moved to a seniors’ home.

12.3.   Pausing there, it can be seen from the italicized passages in §12.1 above that the witness statement contained some lacunae giving rise to at least the following queries.

(i)  Under the alleged 1^st Oral Agreement, the rent-free period expired on 15 April 1995.  However, in §16 of D’s W/S, he said it was “coming to an end” around “the end of 1995".  His case thus appears to be internally inconsistent.   There was no explanation for this internal inconsistency.

(ii)  In §17 of D’s W/S, the defendant alleged that “during that time”, Mr Chan told him there “was” a Building Order, and it was partly “in light” of the Order that the 2^nd Oral Agreement was made.  However, this is inconsistent with written evidence in the form of the Building Orders (the earliest of which was made in September 1995, some 5 months after 15 April 1995).  There was no explanation for this when the defendant’s case was that the 2 “rent-free” periods finished on 14 April 2010³¹.  It is noteworthy that in the defendant’s own words, when he allegedly made the 2^nd Oral Agreement, “there was an Order” (not that an order was likely³²).  Further, if the agreed value of the required repairs for the outer walls and windows was $45,000, he did not explain the agreement for the further open-ended commitment by Mr Chan to comply with “any other orders of the Buildings Department”.  The reference to “any other orders” also pre-supposed that at least one order was existing.

(iii)  Further, on the defendant’s own case, the two 15-year rent-free periods would have expired in April 2010 (or as the judge put it, “the Plaintiff’s possession was with the consent of the Defendant which expired on 14 April 2010"³³).  However, the defendant only alleged that “in around 2011, I went up to the Property once to look for Mr Chan’s wife, but to no avail” (Emphasis added).

-  First, he did not explain why he did not visit the Property to propose new terms or collect rent until some 8 months (at least) after the end of the 2^nd rent-free period in April 2010.

-  Secondly, he did not explain why he only visited the Property once in the entire year if he intended to propose new terms or collect rent.

-  Thirdly, the words “to no avail” are ambiguous as to what he alleged actually happened, but there was no elaboration at all³⁴. Mrs Chan’s mental condition after 2005 is discussed in §12.4(v) below.

-  There was no explanation why he did not write to the Chan family at all at any stage.

(iv)  As for the repeated use of the term “to no avail” regarding the defendant’s alleged visit in 2013, again this was ambiguous as to what he alleged actually happened, but again there was no elaboration.

(v)  As for the impracticality of his visiting the Property to collect rent after he moved to a seniors’ home, there was no explanation why he did not adopt any alternative means to collect rent (eg by asking his cousin Mr Kwong Ping Kuen³⁵ to assist, or by asking for payment to a bank account).

12.4.   Further,

(i)  although the defendant said in his witness statement that he had given Mr Chan his new telephone number³⁶ and had “left with” him his new address and telephone number³⁷, he did not say when or how he did so;

(ii)  he gave no reason why Mr Chan would have needed to look for him a few months after the alleged 1^st Oral Agreement³⁸;

(iii)  he said he went to the Property in 1983, 1996 and 2006, but he did not say why he did so (which could not be to collect rent, as these were within the alleged “rent-free” periods)³⁹;

(iv)  he did not mention Mr Chan’s physical condition and how he allegedly communicated with him in 1980, 1983 and 1996 (the plaintiff testified that Mr Chan had suffered a stroke in 1975 after which it was very difficult for him to communicate with persons other than his family members)⁴⁰; this is discussed in §§22 & 23.1 below.

(v)  he did not mention Mrs Chan’s mental condition when he allegedly saw her in 2006⁴¹.  The plaintiff testified that shortly after her father died, ie in 2005, her mother suffered from depression and dementia, always shut herself away in the washroom making no contact with the family or other people, “not to mention the Defendant”⁴².  She confirmed this in cross-examination⁴³.   The judge made no finding on this issue as he considered that the defendant’s alleged visits “have no significance” and “as the defendant was not available for cross-examination”: Judgment §58.

13.As a matter of completeness⁴⁴, after the defendant received offers from developers interested in acquiring the Property in 2015, he instructed legal representatives in 2016 to apply for administration of Madam Wong’s estate which he obtained in October 2017.  In November 2017, his solicitors conducted a land search of the Property and found the default judgment⁴⁵.  The default judgment was set aside by consent, and the action was continued against him as personal representative.

14.The defendant alleged that he had not abandoned the Property, as shown by his payment of rates and property tax, but the issue of adverse possession was not dependent upon the plaintiff proving abandonment⁴⁶ by the defendant.  The issues at trial were set out in the Judgment as follows⁴⁷:

“The first crucial issue is whether she [the plaintiff] was in occupation pursuant to the two oral Agreements. If not, the second issue is whether she had at any time since 15 April 1980 the requisite intent to [possess] the Property to the exclusion of the Defendant”.

Trial

15.1.The trial of the action commenced on 29 June 2020.  When opening the defendant’s case, the defendant’s counsel informed the judge that “the defendant himself, due to his health condition, is not able to testify in court so we will not call him to testify”⁴⁸.   A medical report dated 27 June 2020 was presented, which stated the following:

“The above name patient has been assessed on 27^th June 2020, he was chair bound, transferred from bed to chair needed 2 assistance [sic], his speech was slurred and needed time to express”.

15.2.   It is noteworthy that:

(i)  there was no suggestion that the defendant was a mentally incapacitated person; indeed, the judge found that he “is a man of sound mind”⁴⁹;

(ii)  the medical report was silent as to when his current condition had begun;

(iii)  he was able to sign the witness statement in 2018, and there was no evidence at trial that if cross-examined, he would be unable to hear questions, or write out his answers if necessary.

15.3.   The plaintiff’s counsel objected to the witness statement being adduced as no hearsay notice had been filed pursuant to Order 38 rule 2A(6) and (9), contrary to the mandatory provisions of s.47A(2) Evidence Ordinance, cap.8 (“EO”).  If a hearsay notice had been filed in good time, the plaintiff would have been able to apply for interrogatories so as to test the contents of the defendant’s witness statement.

15.4.   In the Judgment, the judge said⁵⁰:

“the plaintiff may be handicapped in not being able to cross-examine the Defendant. That could be offset by testing what the Defendant said in his witness statement against contemporaneous documents, documents and evidence not in dispute, incontrovertible evidence and the Plaintiff’s evidence. In the end, it is all a question of weight. I shall admit this witness statement and constantly remind myself of the need for caution and that the Plaintiff was deprived of the chance of cross-examination”.

16.For the reasons set out in the Judgment, the judge dismissed the plaintiff’s claim and gave judgment to the defendant on his counterclaim.

Appeal

17.The plaintiff filed a notice of appeal on 27 August 2020 and the defendant filed a respondent’s notice to affirm the Judgment on additional grounds on 7 September 2020.

Discussion

18.There were two main points of concern about the Judgment.

18.1.   The first point was that the judge made findings of fact inferring serious misconduct on the part of Mr Chan and the plaintiff, which were unwarranted as they were not supported by evidence, and which had not been put to the plaintiff in cross-examination.

18.2.   The second point was that, even though the judge had a discretion to admit the defendant’s witness statement as evidence, when estimating what weight could be placed on it, the judge failed to consider:

(1)  whether it would have been reasonable and practicable to have produced the defendant as witness: s.49(2)(a) EO, and

(2)  the lacunae in the witness statement which affected its reliability: s.49(1) EO.

Inferences unsupported by evidence

19.The first point concerned the inferences made by the judge regarding the Chan family’s attempts to look for the defendant in 1980 (ie the phone calls to the telephone number written on the 1^st rent receipt, the Land Office search and the newspaper notices).  These attempts corroborated the plaintiff’s case that the Chan family was trying to look for the defendant as he had not gone to collect rent for a few months.  On the other hand, the defendant did not suggest any other reason why the family would need to make such efforts to contact him⁵¹.

20.1.However, the judge considered that “the plaintiff’s father was just planting evidence”⁵², described his efforts to contact the defendant as “dis-ingenious”⁵³, and took the view that the efforts of the plaintiff and her father were “either concoctions or were made with the purpose of obtaining no result”⁵⁴.

20.2.   These are inferences of egregious misconduct which required a high standard of proof.  With respect to the judge, the evidence did not permit such inferences to be drawn (especially in the light of the lacunae in the defendant’s witness statement and when the defendant himself did not attend court for cross-examination).

21.1.In relation to the family’s attempts to find the defendant, the plaintiff was cross-examined as follows:

(1)  the defendant’s counsel asked whether she agreed that if they had made inquiries with the Rating and Valuation Department, they could have discovered the defendant’s new contact details.  In answer, the plaintiff said she did not know⁵⁵.  The same applied to counsel’s question whether Mr Chan or she had asked the government authorities dealing with rates and property tax if they could pay these charges for the Property. In answer, the plaintiff said she did not know that that could be done⁵⁶.  These answers were not challenged by any evidence that the family did know at the time that these things could have been done, and the judge did not find that their ignorance was incredible;

(2)  the defendant’s counsel then suggested that the family could have written to Madam Wong at the Bangkok address.  In answer, the plaintiff said they had not thought about doing that⁵⁷.  Again this answer was not challenged by any evidence that the family did think of it at the time, and the judge did not find that it was incredible for them not to have thought of doing so.

21.2.   It is obvious from the terms of the newspaper notices that the family knew the defendant had moved away from the old address, because the notices referred to him as having “previously resided at Bonham Strand”.   However, it was never put to the plaintiff that she actually knew the defendant’s new contact details.  It was proper of the defendant’s counsel not to do so, for the only allegation in the defendant’s witness statement was that these had been given to or “left with” Mr Chan only.

22.In this regard, it would appear that the judge did not take into consideration the plaintiff’s evidence (which was not challenged in cross-examination) that the effect of Mr Chan’s 1^st stroke some years before was such that he had to retire from work and had to be looked after by his wife and children⁵⁸.  In this context, evidence of when and how⁵⁹ the defendant allegedly gave to or “left with” Mr Chan his new contact details would have been significant to ascertain whether, when and how Mr Chan was made aware of these details - this evidence was lacking in the defendant’s witness statement.

23.1.It would appear that whilst the judge did not reject the evidence that Mr Chan had suffered his 1^st stroke in 1975, he did not accept⁶⁰ that Mr Chan suffered from slurred speech and limited movements in 1980 by seizing upon a sentence in the plaintiff’s witness statement that in 1980 “my father made every effort to contact the Defendant by telephone ...”⁶¹.

23.2.   However, it would appear that the judge presupposed that the sentence must have meant that those efforts were only made by Mr Chan personally, despite (a) the plaintiff’s testimony that whilst the family could understand her father’s speech after his stroke, strangers could not do so, on which she was not challenged in cross-examination⁶², and (b) there was evidence, eg the Land Office search receipt made out to Mr Chan’s son, which showed that the plaintiff and her brother were assisting their father in his attempts to look for the defendant.

24.1.Indeed, there were other possibilities why Mr Chan needed to publish the notices.  Even assuming that at one point the new contact details had been written down (by the defendant⁶³ or by Mr Chan), the latter could have simply forgotten where he had put it.

24.2.   It is well-established that when many hypotheses may be put which the evidence does not exclude positively, a tribunal should not infer too readily serious misconduct such as “planting evidence” or “concoctions”.  It is not enough when the evidence gives rise to conflicting inferences of equal degrees of probability⁶⁴.

24.3.   However, in the present case, the judge’s finding that “the father must have been informed of the defendant’s up-to-date telephone number” led to his finding that “the plaintiff’s evidence that her father rang up the defendant’s former telephone number was not just a concoction but one made with intent to mislead”⁶⁵.  (Emphasis added).

25.1.Further, it was never put to the plaintiff in cross-examination that the efforts she made to look for the defendant were concoctions or were made with the purpose of obtaining no result⁶⁶.

25.2.   Before this court, counsel for the defendant confirmed that it was not his case that the plaintiff was part of a scheme laid down as long ago as 1980 to prepare for an adverse possession claim to be made in 2015, and he confirmed that he had not asked the judge to draw such serious inferences of misconduct.

26.1.Unfortunately, the view taken by the judge that Mr Chan was “planting evidence” and that efforts made by him and the plaintiff back in 1980 were “either concoctions or were made with the purpose of obtaining no result” clearly coloured the judge’s view of the plaintiff’s case.

26.2.   For instance, the judge rejected the evidence that Mr Chan suffered from slurred speech and had limited movements as being “glaringly contradictory to her [the plaintiff’s] evidence that her father together with [her] arranged to renovate the Property in 1983". Whilst a person with those conditions might not be able to arrange renovation easily on his own, there is no reason why Mr Chan could not do so together with the assistance of his daughter who was then 26 years old⁶⁷ and working as an accounts clerk⁶⁸. 

26.3.   It might also have been the reason for the indemnity basis of costs ordered.

27.For the above reasons, we found the first point on appeal has been substantiated.

The defendant’s witness statement  

28.It is clear in the Judgment that the judge had some misgivings about the defendant’s case, but considered that he could find support for it from the doubts he had in the plaintiff’s case⁶⁹. 

29.After the judge found that the defendant had been a Chinese Language Officer with the civil service, “a man of sound mind and good education ... had a good job and good exposure to society”⁷⁰, the judge had the following comments⁷¹:

(i)  the defendant’s case that he would automatically become the owner of the Property upon his mother’s death “begs belief”;

(ii)  given his stable employment, his evidence that “he had no means to pay renovation costs and building costs to comply with Building Orders is also hard to believe”;

(iii)  “even harder to believe is his evidence that on two occasions he orally agreed to allow the plaintiff’s father’s family to reside in the Property for two terms of 15 years without reducing the agreements into writing”.

30.1.The judge commented “on one view, all these may seem incredible.  On another view, these may reflect the Defendant’s casual nature in dealing with his affairs and his naivety”⁷².

30.2.     There was no evidence of the defendant’s nature, whether in his own witness statement or his cousin’s evidence.  A judge would of course be entitled to make such a finding of a witness’ nature after seeing and hearing him in the witness box, but in the present case, that did not occur as the defendant was not called to give evidence in court, and his evidence was contained only in his witness statement.

31.1.Although the judge was entitled to admit the defendant’s witness statement (against the plaintiff’s objection), s49(2)(a) EO stipulates that when estimating what weight could be placed on a hearsay statement, the judge must consider whether it would have been reasonable and practicable to have produced the defendant as witness.

31.2.   In this regard,

(i)  the medical report did not state that the defendant could not attend court to be a witness;

(ii)  it was not the defendant’s case that he was a mentally incapacitated person, and the judge found that he was “of sound mind” (he was 76 then);

(iii)  the medical report only mentioned physical impediments.  The fact that he needed assistance in moving from a bed to a chair did not render it unreasonable or impracticable for him to be called, as the court building is wheelchair-accessible;

(iv)  as for his speech being slurred and his needing time to express himself, that condition did not render it unreasonable or impracticable for him to be called either.  His witness statement had been translated to him and he had signed it, so if it was necessary to overcome a speaking impediment, he could write out his answers. What was material was his mental, not physical, capacity;

(v)  of course, a judge would also give such rest breaks to a witness as may be necessary.

31.3.   The judge did not appear to have taken these matters into account when he said, after referring to the medical report only, “I am satisfied that he has difficulties in speaking and was unable to attend court to testify”⁷³.

32.1.The fact that the defendant was not called took on greater significance when one considers the lacunae in his witness statement.  Although the judge acknowledged that the plaintiff may be handicapped by not being able to cross-examine the defendant, and did say that he would remind himself of the need for caution⁷⁴, the lacunae in the witness statement (such as those in §§12.3 - 12.4 above) were not or not sufficiently recognized when the judge considered the reliability of the hearsay evidence.

32.2.   Further, the judge’s acceptance of the defendant’s case despite his misgivings and the lacunae were at least in part due to his rejection of the plaintiff’s case as containing “planted evidence” and “concocted evidence”.  He said⁷⁵:

“All in all, I find that the plaintiff’s evidence about the efforts made by her and her father in contacting the defendant were either concoctions or were made with the purpose of obtaining no result. These findings cast doubt on the plaintiff’s evidence about the defendant’s disappearance since April 1980 and conversely support the defendant’s case of the 1^st Oral Agreement”. (Emphasis added).

The judge also referred to Mr Chan’s “planting” of evidence when accepting the defendant’s evidence on the 2^nd Oral Agreement⁷⁶.

33.For the above reasons, we found the second point on appeal has also been substantiated.

34.Having perused the Respondent’s Notice and read and heard the submissions of the defendant’s counsel, we did not consider the matters raised to be so substantial as to enable this court to affirm the judge’s order.

Order

35.1.As this is a case where much would depend on the defendant’s evidence under cross-examination for a judge to make material findings of fact, we considered, despite the initial submissions by the plaintiff’s counsel to the contrary, that a re-trial would be necessary.

35.2.   Accordingly, we allowed the appeal, set aside the judge’s order, and made an order that the case be remitted to the Court of First Instance for re-trial before another judge, with a direction for an early hearing date.

Decision on Costs

36.As for costs, we have heard counsel’s submissions, and consider that the appropriate order is that the defendant pay the costs of the appeal to the plaintiff, and that the costs of the trial before DHCJ To be costs in the cause of the re-trial.

Mr Sunny Chan, instructed by Eddie Lee & Company, for the plaintiff  

Mr Patrick Siu, instructed by B C Chow & Co, for the defendant