Wong Yu Cho, Rolly and Another v. Art Statements Ltd and Others

DCCJ 1224/2018 and

DCCJ 5763/2018

(Consolidated)

[2023] HKDC 462

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1224 AND 5763 OF 2018

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J U D G M E N T

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1.  Introduction

1.1These consolidated proceedings are concerned with the consignment of a number of artefacts. DCCJ Nos 1224 and 5763 of 2018[1] were consolidated pursuant to an order dated 31 January 2019. The former was ordered to serve as the leading action and the pleadings filed therein to stand as the pleadings in the consolidated proceedings.

1.2The 1^st plaintiff professes to be a famous art collector. The 2^nd plaintiff is the 1^st plaintiff’s late wife. Following the 2^nd plaintiff’s demise on 13 August 2019, leave was granted on 15 December 2020 to the 1^st plaintiff to continue these consolidated proceedings notwithstanding that the 2^nd plaintiff had passed away.

1.3The 2^nd defendant is and was at all material times a shareholder and a director of the 1^st defendant. The 1^st defendant operates an art gallery named Art Statements in Hong Kong and has been in that business for more than 15 years. The 1^st and 2^nd defendants are collectively referred to below as the “Relevant Defendants”.

1.4The 3^rd defendant has never acknowledged service or taken part in these proceedings[2]. It is common ground between the 1^st plaintiff and the Relevant Defendants that the 3^rd defendant was acquainted with the 2^nd plaintiff and also was a friend of the 2^nd defendant. The 3^rd defendant introduced the 2^nd defendant to the 1^st plaintiff in early 2017.

1.5The salient events may at this stage be summarized as follows.

(1)  On 27 March 2017, the plaintiffs and the 1^st defendant entered into a written consignment agreement (“Consignment Agreement”) in respect of 16 artefacts (“16 Items”), amongst which were (a) a pair of stone Lions (“Stone Lions”)[3] and (b) a marble Guanyin Statute (“Guanyin Statute”)[4]. I shall return to the terms of the Consignment Agreement when I consider the 1^st defendant’s counterclaim below. For present purposes, suffice it to point out that they make provisions for a fixed consignment period (27 March to 30 June 2017) and for a distribution of sale proceeds in the event of sale by the 1^st defendant of any of the items (70% to the 1^st plaintiff and 30% to the 1^st defendant). The 16 Items were moved from the plaintiffs’ residence to the 1^st defendant’s gallery on 12 March 2017, some two weeks prior to the execution of the Consignment.

(2)  On 15 May 2017, the 1^st plaintiff further handed over a number of thangkas[5] to the 2^nd defendant on the understanding that they would be sold. Unlike the 16 Items, no written agreement was executed in respect of the thangkas. The parties are now in dispute over the quantity of thangkas handed over (the 1^st plaintiff says 28 and the Relevant Defendants say 24) and the terms upon which they were handed over.

(3)  It is common ground that the 16 Items were not returned to the plaintiffs immediately following the expiry of the fixed consignment period (ie 30 June 2017).

(4)  The 1^st defendant became suspicious that the 16 Items were not genuine. On 31 October 2017, the 1^st defendant commenced proceedings initially against only against the 1^st plaintiff in the Small Claims Tribunal[6] and subsequently joined the 2^nd plaintiff as an additional defendant. The claims made by the 1^st defendant were in respect of (a) transportation costs of the 16 Items to the 1^st defendant’s gallery, (b) installation costs to exhibit the 16 Items at the 1^st defendant’s gallery, (c) transportation costs of the 16 Items back to the plaintiffs and (d) damages to reputation, together in the total sum of HK$49,300.

(5)  Following a hearing before the learned Adjudicator on 28 November 2017, the 16 Items and 24 thangkas were returned to plaintiffs on 30 November 2017. It is to be noted that the return of the 16 Items and the thangkas was not as a result of any order made by the learned Adjudicator, as the Small Claims Tribunal only deals with monetary claims.

1.6The plaintiffs plead the following relief against the Relevant Defendants:

(1)  the return of four thangkas or their value in lieu (at HK$100,000 each or a total sum of HK$400,000) (“Thangka Claim”);

(2)  a sum of HK$400,000 being 10% of the aggregate value of the Guanyin Statute (claimed to have a value at HK$3.5 million) and Stone Lions (claimed to have a value of HK$500,000) “due to the loss of the good timing and opportunity of the Plaintiffs to sell”[7] the two items (“Loss of Chance Claim”).

1.7As against the 3^rd defendant, the plaintiffs seek “all the damages and losses due to the 3^rd defendant introducing the 2^nd defendant to the plaintiffs”.

1.8The 1^st defendant in closing curtailed the scope of its claims when compared to those made in the Small Claims Tribunal[8]. The 1^st defendant counterclaims against the plaintiffs for reimbursement of various transportation and installation charges relating to the 16 Items in the sum of HK$18,300. It is the 1^st defendant’s pleaded case that the intention and purpose of the Consignment Agreement was to exhibit genuine and valuable artwork for sale at the 1^st defendant’s gallery. However, there was a breach of the Consignment Agreement as the 16 Items were not genuine articles or of low value, and the 1^st defendant says that, as a result, it is entitled to be reimbursed for the expenditures incurred.

1.9At the trial, the 1^st plaintiff appeared in person[9] and the Relevant Defendants were represented by Mr Derek Hu (with Ms Sharon Chan), both of counsel.

2.  Issues for determination

2.1As I understand the parties’ rival positions advanced in closing, the following issues arise for my determination.

2.2As regards the plaintiffs’ Thangka Claim, the primary dispute is whether 28 (as contended by the plaintiffs) or 24 (as contended by the Relevant Defendants) thangkas were handed over by the 1^st plaintiff to the 2^nd defendant in May 2017 (there being no dispute that 24 were returned on 30 November 2017). Should the plaintiffs prevail on the foregoing factual issue, there is a further dispute between the parties on the value to be attributed to the four thangkas.

2.3As regards the plaintiff’s Loss of Chance Claim, Mr Hu did not contend that the 1^st defendant was entitled to retain the 16 Items beyond the expiry of the agreed consignment period (ie 30 June 2017). The dispute between the parties is whether I should accept the plaintiffs’ evidence that a customer had expressed to the 1^st plaintiff an interest to purchase the Stone Lions and Guanyin Statute in late April 2017 but decided against purchasing them at the end of October 2017 as the customer by then was unable to view or inspect the two items. Should the plaintiffs succeed on the liability issue, there is a dispute on the value to be placed on the Stone Lions and the Guanyin Statute.

2.4In relation to both the Thangka Claim and the Loss of Chance Claim, Mr Hu argued that they must fail against the 2^nd defendant irrespective of whether the plaintiffs succeed against the 1^st defendant, as the 2^nd defendant at all material times was acting in his capacity as an officer and representative of the 1^st defendant and therefore assumed no personal liability.

2.5As the 1^st defendant’s counterclaim involves only an insignificant amount, the 1^st plaintiff did not address it substantively or with any degree of detail. However, the burden remains on the 1^st defendant to prove its case.

2.6There is an issue on whether the 3^rd defendant was validly served in DCCJ 1224 of 2018. As pointed out above, the plaintiffs never sought to enter default judgment against the 3^rd defendant. I therefore need to decide what order, if any, should be made in respect of the plaintiffs’ claim against the 3^rd defendant.

3.  The evidence and the assessment approach

3.1In terms of factual evidence, three witness statements were filed for the plaintiffs from (1) the 1^st plaintiff himself, (2) Mr Wong Pak Wing (“Mr Wong”) and (3) Mr Lee Sun Wa (“Mr Lee”). The Relevant Defendants called the 2^nd defendant, Ms Thisby Cheng (“Ms Cheng”) and Mr Fabio Rossi (“Mr Rossi”).

3.2The parties also obtained leave to adduce expert evidence on quantum. The issues for which leave was granted were: (1) the authenticity and value of the Guanyin Statute, (2) the authenticity and value of the Stone Lions and (3) the authenticity and value of the thangkas. The plaintiffs relied on the evidence of Mr Michael Weisbrod (“Mr Weisbrod”) and the Relevant Defendants on that of Ms Felita Hui (“Ms Hui”).

3.3The resolution of the factual disputes in the present case hinges largely on the credibility of the factual witnesses. In assessing their credibility, I bear in mind the approach set out in, for example, Hui Cheung Fai & Anor v Daiwa Development Ltd & Ors, HCA 1734 o 2009, 8 April 2014 at §§79-83. In essence, importance is attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of the events. It is further important to assess the consistency of the evidence of a witness with undisputed or indisputable evidence, and its internal consistency, namely by comparing the oral testimony and his witness statement(s).

3.4In assessing the expert evidence, I find the following principles especially pertinent to the present case.

3.5The duties of an expert witness are summarized in The Ikarian Reefer (No 1) [1993] 2 Lloyds Rep 68 and include the following established principles: Maysun Engineering Co Ltd v International Education and Academic Exchanges Foundation Co Ltd t/a Hong Kong Institute of Technology, DCCJ 27 of 2006, 22 September 2010 §31.

(1)  Expert evidence presented in court should be, and be seen to be, the independent product of the expert uninfluenced as to form or content by the exigencies of litigation.

(2)  Independent assistance should be provided to the court by way of objective unbiased opinion regarding matters within the expertise of the expert. An expert witness should not assume the role of advocate.

(3)  Facts or assumptions upon which the opinion was based should be stated together with material facts which could detract from the concluded opinion.

(4)  An expert witness should make clear when a question or issue fell outside his expertise.

3.6In particular, an expert must explain the basis of his or her evidence and mere assertion carries little weight. An expert’s bald statement of his opinion is not of any real assistance and proper evaluation of the opinion can only be undertaken if the process of reasoning which led to the conclusion, including the premises from which the reasoning proceeds, are disclosed by the expert: Kennedy v Cordia (Services) LLP [2016] 1 WLR 597 §48.

4.  The 1^st plaintiff’s oral application to adjourn the trial

4.1Before dealing with the substantive issues of the present case, I should first set out the reasons for dismissing an application made by the 1^st plaintiff on the third day of the trial for adjournment (“Oral Application”).

4.2The trial commenced on 10 November 2022. The 1^st plaintiff gave evidence on 10 November 2022 and Mr Wong did so on 11 November 2022 (a Friday). Following the completion of Mr Wong’s evidence, the plaintiffs ran out of witnesses as Mr Lee did not attend court to give evidence. Mr Rossi was interposed in order to allow the 1^st plaintiff an opportunity to secure the attendance of Mr Lee over the weekend.

4.3On the third day of the trial (ie 14 November 2022), the 1^st plaintiff produced a letter from Mr Lee stating that (1) he was unwell, and (2) as he was residing in the PRC he could not attend court to give evidence due to the COVID-19 travelling restrictions imposed in the Mainland. The Oral Application was made for an indefinite adjournment of the trial, as no dates for the resumption of the trial was proffered by the 1^st plaintiff. The 1^st plaintiff was candid in admitting that he did not consider making an application for Mr Lee to attend the trial remotely as he was unfamiliar with the procedures. In fact, the 1^st plaintiff confirmed that he never made any arrangements to secure the attendance of Mr Lee as he mistakenly thought that he could simply rely on his witness statement.

4.4Mr Hu naturally opposed the Oral Application. He pointed out that the trial was set down in August 2021 and there was ample time for the 1^st plaintiff to make the necessary applications or arrangements to enable Mr Lee to give evidence at the trial, whether in person or remotely (if justified).

4.5I did not find that there was any or any cogent reason to accede to the Oral Application. There was no medical certificate produced by Mr Lee to verify that he was unwell and there was no evidence to support Mr Lee’s assertion that there was a blanket prohibition which prevented him from travelling to Hong Kong to give evidence: 張侃 v 尚品滙(香港)國際貿易有限公司 [2022] HKDC 669 §§5-20.

4.6What was tolerably clear was that the 1^st plaintiff operated under a misapprehension that the attendance of Mr Lee was not required. As stated at AXA China Region Insurance v Leong Fong Cheng [2016] 6 HKC 220 §§47 and 55, a litigant acting in person should bear the responsibility for the proper preparation of his or her own case in accordance with the rules and procedures of the court and there is ample assistance such as the Resource Centre for Unrepresented Litigants and the Legal Advice Scheme for Unrepresented Litigants on Civil Procedures (Procedural Advice Scheme) to guide a litigant acting in person to comply with the court’s rules and procedures. In fact, as stated in an order dated 22 October 2020, the 1^st plaintiff was specifically made aware that, if necessary, he could seek assistance form the Procedural Advice Scheme.

4.7It was for the above reasons that I dismissed the Oral Application with costs to the Relevant Defendants.

5.  The factual evidence

5.1The matters set out at §1.5 above are largely not in dispute or indisputable. In this section, I will set out those matters which are germane to the resolution of the issues identified at section 2 above. I should point out that:

(1)  As a general proposition, many matters which were peripheral to the main issues were initially advanced by the Relevant Defendants in evidence for the purpose of damaging the credibility of the 1^st plaintiff (and also that of Mr Weisbrod). For example, the Relevant Defendants expressed doubt about whether the 1^st plaintiff (as he claimed) belonged to Malaysian nobility and reference was made to the fact that Mr Weisbrod was convicted of certain tax-related matters in New York in December 2007. In the course of the trial, Mr Hu adopted a more restrained approach and focused on those issues which were directly relevant disputes between the parties.

(2)  Due to what he thought were unfair tactics, during the trial, the 1^st plaintiff was demonstrably antagonistic towards the Relevant Defendants’ legal team and witnesses. As there were allegations that his collection was not genuine, the 1^st plaintiff did not hesitate to show his displeasure. It may be said that the 1^st plaintiff could have conducted himself with more courtesy but I have not allowed such observation to affect my deliberation.

(a)  The plaintiffs’ evidence

5.2As stated at §3.1 above, three witness statements were filed for the plaintiffs. Very probably due to the fact that the plaintiffs had throughout acted in person, the statements of Mr Wong and Mr Lee were not verified by a statement of truth. Mr Hu did not take any issue on their admissibility by reason of such omission: RDC Order 41A, rule 7[10].

The 1^st plaintiff’s evidence

5.3The following matters are set out in the 1^st plaintiff’s witness statement dated 12 July 2021 which he adopted.

(1)  In mid-February 2017, Mr Lee, who was a long-time customer, went to visit the 1^st plaintiff at his residence to view and took photographs of the 1^st plaintiff collection.

(2)  Following the execution of the Consignment Agreement (on 27 March 2017), on 27 April 2017, Mr Lee brought along one of his own clients (“Alleged Client”) to visit the 1^st plaintiff at his residence. Mr Lee had previously shown photographs of the 1^st plaintiff’s collection to the Alleged Client and the Alleged Client was particularly interested in the Guanyin Statute and the Stone Lions. The 1^st plaintiff informed Mr Lee and the Alleged Client that the Guanyin Statute and the Stone Lions were consigned to others and would be returned by the end of June 2017.

(3)  On the same day, the 1^st plaintiff sent a letter to the Relevant Defendants (“27/4/17 Letter”) seeking the return of the 16 Items as no deposit had been paid: 1^st plaintiff’s witness statement §7. The 1^st plaintiff explained that he did not want to lose the good opportunity to sell the Guanyin Statute and the Stone Lions.

(4)  On 15 May 2017, the 2^nd plaintiff called the 1^st plaintiff stating that he had some customers interested in some large thangkas. Before the 2^nd defendant went to collect the thangkas at the 1^st plaintiff’s residence, the 1^st plaintiff had counted the number of thangkas (28 pieces) which he then placed in a large blue bag. The 2^nd defendant went to the 1^st plaintiff’s residence alone and was in a rush. The 1^st plaintiff and the 2^nd defendant did not go through the thangkas one by one but they reached an oral agreement that the 2^nd defendant would be responsible for the safekeeping of the thangkas and their return in the event no sale materialized. The 2^nd defendant thereafter hurriedly took the bag containing the thangkas and left the 1^st plaintiff’s residence.

(5)  On 31 May (“31/5/17 Letter”) and 23 June 2017 (“23/6/17 Letter”), the 1^st plaintiff sent two further letters to the Relevant Defendants requesting the return of the 16 Items. The 27/4/17 Letter, the 31/5/17 Letter and the 23/6/17 Letter are collectively referred to as the “Letters”.

(6)  Mr Lee informed the 1^st plaintiff that he had received a deposit from the Alleged Client in respect of the Guanyin Statute and the Stone Lions and requested the 1^st plaintiff to contact him as soon as the 16 Items were returned to the 1^st plaintiff.

(7)  As the 16 Items were not returned at the end of the consignment period (ie 30 June 2016), the 1^st plaintiff had to explain to Mr Lee that he was still chasing for the return of the Guanyin Statute and the Stone Lions but without success. Eventually, at the end of October 2017, Mr Lee informed the 1^st plaintiff that the Alleged Client had bought some other items and decided against purchasing the Guanyin Statute and the Stone Lions.

(8)  Following the hearing at the Small Claims Tribunal on 28 November 2017, the 16 Items and 24 thangkas were returned to the 1^st plaintiff’s residence on 30 November 2017 at around 6:30 pm by a logistic company called Setia Movers. The 1^st plaintiff was accompanied by Mr Wong and another friend. The 1^st plaintiff told Mr Wong and the driver of Setia Movers (a Mr Tham) that there were supposed to be 28 thangkas.

(9)  The 1^st plaintiff then requested Mr Tham to call the 2^nd defendant. The 1^st plaintiff spoke to the 2^nd defendant directly and was told that the 2^nd defendant would look for the missing thangkas. The 1^st plaintiff requested Mr Tham to record in writing that four thangkas were missing (“Delivery Note”). Mr Tham complied and signed the Delivery Note.

(10)  A few days later, the 1^st plaintiff called the 2^nd defendant and the 3^rd defendant but no satisfactory response was proffered. As a result, the 1^st plaintiff decided to sue the defendants.

5.4The 1^st plaintiff’s viva voce evidence was inconsistent with his statement in a number of material aspects. Mr Hu also further pointed to a number of inconsistencies between the 1^st plaintiff’s evidence and the position set out in various other documents. The more significant inconsistencies are set out in the paragraphs following.

5.5I first deal with the inconsistencies relevant to the Thangka Claim.

(1)  Contrary to §5.3(4) above, the 1^st plaintiff in cross-examination stated that (a) the visit by the 2^nd defendant on 15 May 2017 was an extended affair and (b) there was a specific agreement made with the 2^nd defendant that the thangkas would be valued at HK$100,000 each and that the thangkas would be returned in about two to three days were the 2^nd defendant unable to sell them (“Alleged Oral Agreement”).

(2)  According to the 1^st plaintiff’s viva voce evidence, three or four thangkas were displayed at his residence and he took out the others (23 or 24) from a cabinet. The thangkas were shown to the 2^nd defendant one by one and the 2^nd defendant examined the thangkas for a lengthy period. After the examination, the 2^nd defendant assisted in packing the thangkas into a bag.

(3)  The 1^st plaintiff agreed in cross-examination that his viva voce evidence was not consistent with his witness statement. He explained that his witness statement was drafted by his son and did not accurately reflect what in fact transpired.

(4)  The 1^st plaintiff further accepted in cross-examination that his evidence that the Alleged Oral Agreement was concluded with the 2^nd defendant was inconsistent with Statement of Claim §7, where it was asserted that the obligation to return the thangka was on the 1^st and not the 2^nd defendant. The 1^st plaintiff again explained that the Statement of Claim was drafted by his son and did not accurately set out his case.

5.6I turn next to the Loss of Chance Claim.

(1)  As set out at §§5.3(2) and (3) above, according to the 1^st plaintiff’s witness statement, he was first introduced to the Alleged Client on 27 April 2017 and the 27/4/2017 Letter was sent on the same day seeking the return of the 16 Items. As the 1^st plaintiff has not produced any other aide-memoire (for example, a diary), it is obvious that the seminal date stated in his witness statement was by reference to the 27/4/2017 Letter.

(2)  However, the content of the 27/4/2017 Letter was problematic. First, it sought the return of the thangkas, which was chronologically impossible as the thangkas were only handed over to the 2^nd defendant on 15 May 2017. Secondly, the 27/4/2017 Letter complained that the Relevant Defendants were unable to sell any of the 16 Items for over three months, which was again wrong as the Consignment Agreement was executed one month earlier on 27 March 2017.

(3)  Somewhat startlingly, the 1^st plaintiff clarified in his viva voce evidence that the Letters were all written at the same time and sent all at once as he was advised to create a paper trail to support his claim. He was unable to remember when the Letters were written or sent. He invited the court to disregard the Letters as they were “not important”.

(4)  Further, the 1^st plaintiff said in the witness box that he never informed the Relevant Defendants that there was an interested buyer for the Guanyin Statute and the Stone Lions. This flatly contradicted the contents of the 27/4/2017 Letter and the 15 May 2017 Letter.

Mr Wong’s evidence

5.7In his very brief witness statement, Mr Wong stated that he was present when Setia Movers delivered the 16 Items and the 24 thangkas to the 1^st plaintiff’s residence on 30 November 2017. Whilst he was told by the 1^st plaintiff that there ought to be 28 thangkas, he did not have any personal knowledge on how many were handed over by the 1^st plaintiff on 15 May 2017. Mr Wong gave evidence that Mr Tham handed his phone to the 1^st plaintiff, but he accepted in cross-examination that he did not know to whom the 1^st plaintiff spoke and did not hear what was said by the 1^st plaintiff on the phone.

Mr Lee’s witness statement

5.8Whilst I have taken into account Mr Hu’s submission that I should decline to admit Mr Lee’s witness statement as hearsay evidence, I prefer to adopt the approach set out at Chan Wai Chung v China Travel Service (Hong Kong) Ltd & Ors [2022] HKCFI 3718 §34, namely to treat Mr Lee’s (unjustified) absence from the trial as a relevant factor to the assessment of the weight to be given to the contents of Mr Lee’s witness statement.

5.9In my view, no weight should be placed on Mr Lee’s witness statement. In arriving at that conclusion, I have taken stock of the factors set out at section 49(2) of the Evidence Ordinance Cap 8. First, for the reasons set out at section 4 above, I do not find that there was any or any proper basis for Me Lee to refrain from giving viva voce evidence at the trial. Secondly, Mr Lee’s statement (dated 20 July 2019) was not made contemporaneously with the events therein stated (between February to October 2017). Thirdly, Mr Lee’s witness statement was clearly an edited account, in that it was prepared as a witness statement for the specific purpose of the present litigation.

5.10Further and in any event, the substance of Mr Lee’s witness statement was to corroborate the matters set out in the 1^st plaintiff’s witness statement summarized at §5.3(2), (6) and (7) above. However, Mr Lee’s witness statement was extremely scanty on the details. Like the 1^st plaintiff’s witness statement, no detail was proffered in relation to the identity and the background of the Alleged Client or the amount of deposit purportedly paid by the Alleged Client.

(b)  The Relevant Defendants’ evidence

5.11As stated at §3.1 above, the Relevant Defendants called Mr Rossi, Ms Cheng and the 2^nd defendant himself. I should point out that the 2^nd defendant’s witness statements covered a vast array of topics[11] and many propositions not related to the Thangka Claim and the Loss of Chance Claim were not put to the 1^st plaintiff in cross-examination. For example, as stated at §3.2 above, leave was granted to the parties to adduce expert evidence on the authenticity of the thangkas, the Guanyin Statute and the Stone Lions. Although the 2^nd defendant’s witness statement raised questions on the authenticity of the other items which comprised the 16 Items, such allegations were not put to the 1^st plaintiff in cross-examination. I will focus only on those matters relied on by Mr Hu in closing.

Mr Rossi’s evidence

5.12Mr Rossi is the sole owner of an art gallery called Rossi & Rossi (Hong Kong) Ltd in Hong Kong and a co-owner of Rossi & Rossi Ltd in London with his mother. Whilst Mr Rossi has an impressive credentials, from his formal education and experience as a dealer in antique artworks, I remind myself that he was called as a factual witness for the Relevant Defendants. As such, I will focus on the factual matters given in his evidence.

5.13Mr Rossi gave the following evidence.

(1)  On 17 May 2017 (ie two days after the 1^st plaintiff handed over the thangkas to the 2^nd defendant), he received an email from the 2^nd defendant stating that the 2^nd defendant had received 23 thangkas. The 2^nd defendant asked Mr Rossi to take a look at thangkas. Mr Rossi agreed in cross-examination that it was his understanding that the 2^nd defendant was interested in selling the thangkas to him.

(2)  Mr Rossi visited the 1^st defendant’s gallery on 24 May 2017. Having looked at the thangkas, Mr Rossi’s view was that the thangkas had no commercial value as they were either blackened by dirt or soot and most of them had tears and holes. Mr Rossi was not interested in purchasing any of them or recommending them to his clients.

Ms Cheng’s evidence

5.14It is Ms Cheng’s evidence that she accompanied the 2^nd defendant to the 1^st plaintiff’s residence to collect the thangkas. She made a correction to the date of that visit from 17 to 15 May 2017. She disagreed with the 1^st plaintiff’s proposition that she was not present at the 1^st plaintiff’s residence on 15 May 2017.

5.15Ms Cheng said as follows.

(1)  When she and the 2^nd defendant were at the 1^st plaintiff’s residence, the 1^st plaintiff took out from a wooden cabinet a stack of what he alleged were folded thangkas. The 1^st plaintiff then put the stack of thangkas into a large Ikea bag but unfolded one to show the 2^nd defendant and her. She was adamant that no one counted how many thangkas were placed in the Ikea bag.

(2)  After the thangkas were placed in the Ikea bag, she and the 2^nd defendant stayed at the 1^st plaintiff’s residence for a bit longer and were shown other items. In total, they stayed for around 30 minutes and they departed with the Ikea bag.

The 2^nd defendant’s evidence

5.16The 2^nd defendant gave the following evidence in respect of the Thangka Claim.

(1)  Similar to Ms Cheng, the 2^nd defendant corrected the date on which he collected the thangkas from 17 to 15 May 2017. He was also adamant that no one counted the thangkas before they were placed inside an Ikea Bag.

(2)  The 2^nd defendant disagreed with the 1^st plaintiff’s proposition that an agreement was reached that each thangka would be valued at HK$100,000.

(3)  After collecting the thangkas and returning to the 1^st defendant’s gallery, the 2^nd defendant took the thangkas out of the Ikea bag and counted 23 pieces and emailed Mr Rossi accordingly. As to why it was said by the 1^st plaintiff that 24 were return on 30 November 2017, the 2^nd defendant explained that he could only assume that one was likely “glued” to another by filth.

(4)  The 2^nd defendant only showed the thangkas to Mr Rossi. He shared Mr Rossi’s view that the thangkas were in poor condition and had no commercial value. After Mr Rossi’s visit, the 2^nd defendant placed the thangkas back into the Ikea bag. The Ikea bag was kept at the 1^st defendant’s gallery and the thangkas were returned in the Ikea bag on 30 November 2017.

(5)  Although the 2^nd defendant stated in his supplemental witness statement that he did not receive any telephone call on 30 November 2017, he accepted in cross-examination that he did speak to Mr Tham. He further explained that he only spoke to Mr Tham and was told that the 1^st plaintiff refused to let Mr Tham depart unless Mr Tham signed the Delivery Note. Mr Tham read the content of the Delivery Note to the 2^nd defendant over the phone and he agreed to Mr Tham signing it to “free him” from the 1^st plaintiff. He added that, by 30 November 2017, he was no longer on speaking terms with the 1^st plaintiff.

5.17In relation to the Loss of Chance Claim, the 2^nd defendant said as follows.

(1)  At the material time, he was never told of any potential clients for any of the 16 Items. He insisted that the never received the Letters.

(2)  If there was in fact a buyer interested in the Guanyin Statute and the Stone Lions in April 2017, there was nothing to prevent the 1^st plaintiff from directing the interested buyer to view them at the 1^st defendant’s gallery.

6.  Analysis of the Loss of Chance Claim and the Thangka Claim

6.1As stated at §§2.2, 2.3 and 3.3 above, the liability issues in respect of the Thangka Claim and the Loss of Chance Claim hinge largely on the credibility of the factual witnesses. For the reasons adumbrated below, I prefer the evidence of the Relevant Defendants’ factual witnesses.

6.2In relation to the Loss of Chance Claim, I do not accept the 1^st plaintiff’s evidence on the existence of the Alleged Client for the following reasons (Mr Wong did not give evidence on the issue and I have concluded that no weight should be placed on Mr Lee’s evidence).

(1)  I have already pointed out at §5.6 above the inconsistencies in the 1^st plaintiff’s evidence given in relation to the Loss of Chance Claim. The 1^st plaintiff’s admission that the 27 April 2017 Letter was not written on the date stated is significant, as it casts a serious doubt on the 1^st plaintiff’s evidence that the Alleged Client came into the picture on 27 April 2017.

(2)  Further, as set out at §5.10 above, the 1^st plaintiff (and Mr Lee) were silent on the identity and background of the Alleged Client. There is no evidence that any indicative price was discussed with the Alleged Client (subject to inspection of the Guanyin Statute and the Stone Lions) or the amount of deposit paid by the Alleged Client.

(3)  As stated at §5.17(2) above, the 2^nd defendant made the observation that there was nothing to prevent the 1^st plaintiff from directing the Alleged Client to view them at the 1^st defendant’s gallery. I find force in the foregoing observation, especially since it is the 1^st plaintiff’s evidence that the Alleged Client came into the picture on 27 April 2017 when the parties were still on good terms. The 1^st plaintiff explained that he did not do so because he wanted to avoid sharing the proceeds with the 1^st defendant pursuant to the Consignment Agreement. I do not find the 1^st plaintiff’s explanation convincing. The Consignment Agreement does not state that the 1^st defendant is entitled to its 30% share even if the sale of an item was procured by the 1^st plaintiff himself. Even if there was any ambiguity, the obvious option was for the 1^st plaintiff to discuss the issue with the 1^st defendant.

6.3As stated at Hong Jing Co Ltd v Zhuhai Kwok Yuen Investment Co Ltd [2013] 1 HKLRD 441 §§83-85, where a plaintiff claims that, in the absence of a breach of contract by a defendant, a third party would have acted in a particular way so as to benefit the plaintiff, he need not prove that hypothetical act would have occurred on the balance of probabilities. Provided that the plaintiff can prove that in the absence of the breach there was a real or substantial (not a speculative) chance of the third party’s act, the court must assess the chance of that act resulting (usually as a percentage) and then discount the plaintiff’s damages for his loss by reference to that percentage.

6.4Here, it is not the 1^st plaintiff’s case that either he was actively marketing the 16 Items or there was another potential buyer other than the Alleged Client before the 16 Items were returned on 30 November 2017. Even on the plaintiffs’ own case, there is only a 10% chance that the Alleged Client would have purchased the Guanyin Statute and the Stone Lions. Where I have rejected the 1^st plaintiff’s evidence on the existence of the Alleged Client, it seems to me that the Loss of Chance claim cannot get off the ground, on the basis that the 1^st plaintiff is unable to prove that there was a real or substantial chance of selling the Guanyin Statute or the Stone Lions between the expiry of the consignment period (30 June 2017) and the return of the 16 Items on 30 November 2017. I reject the Loss of Chance Claim.

6.5For completeness, in so far as it is the plaintiffs’ case that the 2^nd defendant can be held liable for the Loss of Chance Claim, I reject such contention. The Loss of Chance Claim is premised on an alleged breach of the Consignment Agreement. It is plain, and I find, that the Consignment Agreement was entered into with the 1^st defendant and not the 2^nd defendant. Indeed, in the 1^st plaintiff’s (amended) closing submissions, he only really contended that the 2^nd defendant ought to be liable for the Thangka Claim by reason of the Alleged Oral Agreement.

6.6In relation to the Thangka Claim, I also do not accept the 1^st plaintiff’s evidence that 28 pieces were handed over to the 2^nd defendant on 15 May 2017 for the following reasons.

(1)  The 1^st plaintiff’s evidence that 28 pieces of thangkas were handed over on 15 May 2017 is not supported by any documentary evidence. I have already identified the inconsistencies in the 1^st plaintiff’s evidence at §5.5 above. I do not find it justified for the 1^st plaintiff to blame the inconsistencies on his son. In my view, it is plain that the 1^st plaintiff departed from his witness statement to bolster his case by (1) creating an impression that the 2^nd defendant had an opportunity to and did count the thangkas before they were placed in the Ikea bag and (2) advancing the Alleged Oral Agreement to crystallize the value of the thangkas and to hold the 2^nd defendant liable.

(2)  I have not lost sight of the fact that both Ms Cheng and the 2^nd defendant also corrected the date on which the thangkas were handed over[12] (which the 1^st plaintiff in closing placed heavy reliance). Such minor corrections do not in my view adversely affect the credibility of Ms Cheng and the 2^nd defendant.

(3)  It is true that the 2^nd defendant also accepted another inaccuracy, in that he accepted that there was in fact a phone call from Mr Tham on 30 November 2017: §5.16(5) above. However, I do not believe what transpired on 30 November 2017 assists the 1^st plaintiff.

(4)  The 1^st plaintiff naturally placed reliance on the Delivery Note signed by Mr Tham[13]. In my view, the Delivery Note amounts simply to a record of the 1^st plaintiff’s complaint made to Mr Tham on 30 November 2017. The wording is not couched in terms of an acknowledgment by the Relevant Defendants that four pieces of thangkas were missing. I do not find it surprising at all for the 2^nd defendant to have agreed to Mr Tham signing it when the content was read to him over the phone, especially when a failure to do so would have prevented Mr Tham from leaving the 1^st plaintiff’s residence: §5.16(5) above.

(5)  For avoidance of doubt, I specifically reject the 1^st plaintiff’s evidence that the Alleged Oral Agreement was concluded with the 2^nd defendant.

6.7Conversely, I accept the evidence of Mr Rossi and the 2^nd defendant. Mr Rossi was informed by the 2^nd defendant by email that there were only 23 pieces of thangkas on 17 May 2017, only two days after the 2^nd defendant collected the thangkas on 15 May 2017 and before the relationship between the 1^st plaintiff and the Relevant Defendants turned sour. As Mr Rossi was a potential purchaser, there was no incentive for the 2^nd defendant to understate the quantity or to withhold four pieces from Mr Rossi for his viewing. I also accept the 2^nd defendant’s evidence that after Mr Rossi had expressed a negative view on the quality of the thangkas, the 2^nd defendants repacked all of them into the Ikea bag, did not show or sell the any of the thangkas to anyone else and the entire lot was redelivered in the Ikea bag to the plaintiffs on 30 November 2017. I reject the Thangka Claim.

6.8I should state in passing that, in closing, the 1^st plaintiff contended that the 2^nd defendant had cheated him. There is simply no cogent evidence to support such an allegation of serious misconduct.

7.  The expert evidence

7.1Were I wrong in determining the liability issue against the plaintiffs on the Thangka Claim and the Loss of Chance Claim, I would have determined the value of the Guanyin Statue, the Stone Lions and the thangkas as follows.

7.2The experts’ valuation is set out as follows[14]:

	Mr Weisbrod	Ms Hui
Guanyin Statute	US$650,000	HK$5,000
Stone Lions	US$180,000	HK$15,000
Thangkas	HK$160,000 per piece for the four pieces covered in Mr Weisbrod’s reports	HK$5,000 for the 11 pieces made available for Ms Hui’s inspection

7.3The Guanyin Statute and the Stone Lions were described in the Consignment Agreement as being from the Ming Dynasty and the value attributed to them were respectively HK$3.5 million and HK$500,000. There is no dispute that the descriptions and value of the 16 Items in the Consignment Agreement were provided by the 1^st plaintiff.

7.4In terms of expertise, the 1^st plaintiff readily acknowledged that there was an “expert gap”, in that Mr Weisbrod did not receive any formal training whilst Ms Hui received formal education in art history and museum studies and is a member of the International Society of Appraiser since 2010. Although Mr Weisbrod did not receive any formal training, he is an art dealer, consultant and appraiser of early Chinese Antiquities and has been one since 1972. I am prepared to proceed on the basis that Mr Weisbrod has the requisite expertise.

7.5I have already set out what I consider to be the correct approach in assessing expert evidence at §§3.4 to 3.6 above. I prefer the opinion of Ms Hui for the following reasons.

7.6First, In my view, Mr Weisbrod’s opinion in many instances amounted to mere assertions.

(1)  As regards the Guanyin Statute, his appraisal amounts to little more than a description of the item[15] and an assertion the description was “typical in style and taste of the Ming Dynasty”. He however accepted in cross-examination that such descriptions can be replicated in a modern reproduction. He expressed a similar opinion on the Stone Lions.

(2)  Mr Weisbrod’s opinion on the thangkas is even briefer. He stated as follows:

“Very large Thankas [sic], depicting Buddhist images, with a large Buddhist Figure in the center of the surrounding Buddhist Constellations.

The above Thankas [sic] are guaranteed to be of the period stated above, and can be replaced for the value as written.”

7.7Conversely, Ms Hui, in concluding that the Guanyin Statute and the Stone Lions were not of the Ming Dynasty, set out a number of reasons for her conclusions, including a comparison of various features with known specimen from the period, craftsmanship, and whether the Guanyin Statute and the Stone Lions showed any signs of age. In relation to the thangkas, Ms Hui stated that the 11 pieces that were made available for her inspection were dirty, torn and discoloured and could not be sold in the market, as collectors of thangkas placed great emphasis on its condition, colour and provenance.

7.8Secondly, I harbour doubt on the independence of Mr Weisbord.

(1)  In supporting his opinion, Mr Weisbrod referred to the provenance of the Guanyin Statute and the Stone Lions as being from the Wong Tat Sun Collection (ie the 1^st plaintiff’s father’s collection). Although he initially said in cross-examination that provenance was not important, he later justified his opinion that the Guanyin Statute and the Stone Lions were not recent reproductions as “they were in the collection from decades ago.” However, he has not referred to any material to support his assumption on provenance and only asserted that it was “common knowledge” that the 1^st plaintiff’s father had these sculptures.

(2)  When cross-examined on the poor condition of the thangkas, Mr Weisbrod did not disagree but simply stated the poor condition “may be a good sign.” There is no evidence produced by Mr Weisbrod to support his assertion that torn and discoloured thangkas could command a valuation close of HK$160,000 per piece.

(3)  It was revealed in his oral testimony that he was a friend of the 1^st plaintiff and there was the possibility of carrying out business with the 1^st plaintiff.

7.9For the above reasons, had it been necessary to access the value of the Guanyin Statute, the Stone Lions and the thangkas, I would have adopted Ms Hui’s valuation as set out at §7.2 above. In relation to the Thangka Claim, I would have apportioned Ms Hu’s valuation (for 11 pieces) to the number of thangkas claimed by the plaintiffs, ie [HK$5,000 / 11 x 4 =] HK$1,818.

8.  The 1^st defendant’s counterclaim

8.1As stated at §7.3 above, the 1^st plaintiff provided the description and value of the 16 Items contained in the Consignment Agreement. The Consignment Agreement further contains the following express terms:

(1)  Consignment period: 27 March to 30 June 2017;

(2)  In the event of sales, the distribution of the percentage is 70% to Rolly Wong and 30% to Art Statements;

(3)  Art Statements agrees to assume full responsibility, including transportation and insurance coverage (“nail to nail”) from the date of delivery to the date of return;

(4)  Artworks are not to be loaned or consigned to any third party without the advance written permission of Rolly Wong.

8.2The 1^st defendant’s counterclaim is for the transportation costs to and from the 1^st defendant’s gallery and the installation costs to exhibit the 16 Items at the 1^st defendant’s gallery.

8.3As I understand Mr Hu, he contends that as the Guanyin Statue and the Stone Lions did not fit their descriptions stated in the Consignment Agreement (ie not from the Ming Dynasty and not of the value attributed to them by the 1^st plaintiff), the 1^st defendant is entitled to be reimbursed the sums expended by it for all 16 Items.

8.4I have difficulty with Mr Hu’s argument.

(1)  First, Mr Hu has not sought to address the express term cited at §8.1(3) above. That clause expressly contemplates that the 1^st defendant would be responsible for the expenditures incurred for the stated period even in the event that none of the 16 Items was sold.

(2)  Secondly, Mr Hu has not attempted to (a) demonstrate that apart from the Guanyin Statute and the Stone Lions, the plaintiffs were otherwise in breach in relation to the rest of the 16 Items or (b) explain why in such circumstances, the plaintiffs are liable to reimburse the expenditures expended for all 16 Items (and pleaded as a liquidated sum). Put another way, whilst I accept that the 1^st defendant is entitled to claim expenditure wasted as a result of the plaintiffs’ breach (Chitty on Contracts, 34^th Ed §§29-025 to 29-027), Mr Hu has not sought to explain how it can be said that the expenditures have been entirely wasted when it is the 1^st defendant’s case that only two of the 16 Items constituted a breach of the Consignment Agreement.

(3)  Indeed, the claim as pleaded in the 1^st defendant’s Defence and Counterclaim (§18) is premised on the averment that all of the 16 Items were not genuine articles and/or of low value. As stated at §5.11 above, Mr Hu did not put the propositions to the 1^st plaintiff that the apart from the Guanyin Statute and the Stone Lions, the other items were also not genuine and therefore of low value.

8.5For the above reasons, I dismiss the 1^st defendant’s counterclaim.

9.  The plaintiffs’ claim against the 3^rd defendant

9.1The plaintiffs’ writ was purportedly served on the 3^rd defendant at the business address of the Relevant Defendants. The 1^st plaintiff submitted that one should overlook that the Relevant Defendants’ address was not the usual or last known address and that the 3^rd defendant should be “involved in the case” since she was the person who introduced the 2^nd defendant to the 1^st plaintiff”: 1^st plaintiff’s Opening Submissions §2.

9.2I am unable to accept the 1^st plaintiff’s submissions. As stated above, the plaintiffs did not seek to enter default judgment against the 3^rd defendant. Even had they attempted to do so, it was incumbent for the plaintiffs to prove proper service of the writ: RDC Order 13, rule 7.

9.3As there is no proof that the writ was properly served on the 3^rd defendant, I decline to grant any order on the plaintiffs’ claim against the 3^rd defendant. In any event, the plaintiff’s pleaded claim is fraught with difficulties. The plaintiffs have not pleaded the basis for fixing liability on the 3^rd defendant for introducing the 2^nd defendant to the 1^st plaintiff and no particulars of damages are pleaded for the claim against the 3^rd defendant.

9.4It is of course the 1^st plaintiff’s prerogative as to whether he will take any further action against the 3^rd defendant, but I suspect any application to renew the writ in the present circumstances is likely to be viewed unfavourably by the court.

10.  Conclusion

10.1For the above reasons, I dismiss the plaintiffs’ claim against the Relevant Defendants and dismiss the 1^st defendant’s counterclaim against the plaintiffs.

10.2There is no reason why costs should not follow the event. I make a costs order nisi that the plaintiffs are to pay to the Relevant Defendant the costs of the action (including all costs reserved if any) with a certificate for counsel and the Relevant Defendants are to pay to the plaintiffs the costs of the counterclaim (including all costs reserved if any), to be taxed if not agreed[16].

10.3I acknowledge that it is possible for a simpler costs order such as the proportional approach adopted in Cyberworks Audio Video Technology Ltd (In Compulsory Liquidation) v Mei Ah (HK) Company Ltd [2020] HKCFI 2792 §§44-46. However, I leave it to parties as to whether such is sought in an application for variation of the costs order nisi.

The 1^st plaintiff acting in person, present

The 2^nd plaintiff acting in person and did not appear

Mr Derek Hu and Ms Sharon Chan, instructed by SM & Co., for the 1^st and 2^nd defendants

The 3^rd defendant acting in person and did not appear