A v. B
Read the full judgment text of HCMC 2/2023 on BabelCite. This High Court CFI judgment was delivered on 7 March 2025.
1. By summons dated 4 February 2025 ( “the Expert Summons” ), the respondent ( “H” ) seeks leave to adduce expert opinion in the forthcoming ancillary relief trial ( “the AR Trial” ) prepared by his own expert Mr Martin John Tupila ( “Tupila” ) on certain issues, which he contends to be necessary despite the fact that Mr Jerome McDonagh – the single joint expert appointed by the parties ( “the SJE” ) – had already produced 2 reports.
Cites 6 cases
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HCMC 2/2023 [2025] HKCFI 978 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MATRIMONIAL CAUSES NO 2 OF 2023 _________________
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_________________ DECISION _________________ A. INTRODUCTION 1.By summons dated 4 February 2025 (“the Expert Summons”), the respondent (“H”) seeks leave to adduce expert opinion in the forthcoming ancillary relief trial (“the AR Trial”) prepared by his own expert Mr Martin John Tupila (“Tupila”) on certain issues, which he contends to be necessary despite the fact that Mr Jerome McDonagh – the single joint expert appointed by the parties (“the SJE”) – had already produced 2 reports. 2.The AR Trial has been scheduled to commence on 9 April 2025. B. BACKGROUND 3.I should first of all set out the relevant background of this application. 4.This is a big money case. 5.H started an asset management company in in (“AB Limited”). Subsequently, he set up an offshore fund management company in (“CD Limited”). His career has proved to be very successful. It is undisputed that CD Limited together with its subsidiaries (including AB Limited) (“the Business”) must be the most important asset of the family. 6.While this case was still pending in the Family Court, parties had already appointed their own experts to value the Business. H’s expert was Tupila, and the petitioner (“W”)’s expert was Mr Ferry Choy (“Choy”). As a result, the following expert reports had been prepared:
7.By an order dated 28 April 2023, this case was transferred to the Court of First Instance. 8.The First Direction Hearing was then fixed to be held on 9 August 2023 before this Court. 9.For the purpose of the First Direction Hearing, H’s senior counsel had lodged written submissions, in which she summarised the opinion of the aforesaid experts as follow:
10.She then continued in her submission:
11.Therefore, on 5 September 2023, this Court gave, inter alia, the following expert directions by consent:
12.Pursuant to the said expert directions, parties agreed that Mr Jerome McDonagh be appointed as the single joint expert. 13.By letter dated 10 July 2024, parties wrote a joint letter to the Court as they could not completely agree on the content of the joint letter of instruction to be sent to the SJE. Part of the disagreement concerned whether parties should be permitted to invite the SJE to give consideration to some specific issues which they considered relevant. At the end of the day, this Court agreed with H that they should be allowed to do so, and that H’s draft joint instruction letter should be adopted. The finalised letter (“the Joint Instruction Letter”) was then sent to the SJE accordingly. 14.On 17 October 2024, the SJE completed his 1st Report (“the 1st SJE Report”). 15.On 13 November 2024, H’s solicitors raised 8 questions with the SJE as follows:
16.W considered that only questions No.1 and No.8 raised by H should be dealt with by the SJE right away, and that the remaining questions could be raised during the trial, unless the SJE considered that it is absolutely necessary to address them there and then. 17.Having considered W’s reply, the SJE responded that:
18.The SJE then prepared his 2nd Report dated 28 November 2024 (“the 2nd SJE Report”). 19.The 1st SJE Report and the 2nd SJE Report were then filed on 9 December 2024. 20.By the Experts Summons which was taken out on 4 February 2025, H asks for leave to adduce an expert opinion prepared by Tupila on the following issues arising from and/or in relation to the 1st SJE Report and the 2nd SJE Report:
C. LEGAL PRINCIPLES 21.Both parties have referred this Court to Daimler AG (formerly known as Mercedes-Benz AG) v Helge Herbert Leiduck and another [2014] 3 HKLRD 56, in which Madam Recorder Lisa Wong SC (as her Ladyship then was) set out the legal principles governing the admission of additional expert evidence following appointment of single joint expert:
22.H’s counsel has also drawn this Court’s attention to the following passage in Daniels v Walker (Practice Note) [2000] 1 WLR 1382, at 1387D – G:
23.It was further submitted that the real test may be summed up as follows (as per the learned authors of Hodgkinson, Expert Evidence: Law and Practice (5th Ed., 2020) at §5-005 (page 149)):
24.I agree with the above submission. In this regard, I should also bear in mind the guidance given by G Lam JA in Redland Precast Concrete Products (China) Limited v AES Steel Mould (Hong Kong) Limited [2021] HKCA 1229 at [13] which is binding on this Court:
D. DISCUSSION D1. Delay 25.As I mentioned at the beginning of this Decision, the AR Trial has been scheduled to commence on 9 April 2025, which is only around 1 month away. 26.H admitted that “the Expert Summons has come somewhat closer to the trial than is ideal”[3]. In my view, that must be a correct concession, or even an understatement of the actual situation. 27.H has emphasised that the “best” case that he is now trying to run by virtue of the proposed expert evidence to be given by Tupila is actually not a new point but involves essentially the same questions which the parties have been litigating for at least half a decade[4]. That being the case, upon H’s receipt of the 2nd SJE Report on 28 November 2024, he should have been able to take out the present application pretty quickly, instead of waiting until 4 February 2025. 28.H stated that since the 1st SJE Report and the 2nd SJE Report were not filed until 9 December 2024, it made no sense for him to take out this application before that date. I have some doubt about this assertion, because it should be apparent to him by the time when the 2nd SJE Report was released on 28 November 2024 that the SJE would not answer any other questions which his solicitors had raised. The filing of the 1st SJE Report and the 2nd SJE Report into court is therefore just a formality. 29.Even if procedurally speaking H could not take out the Expert Summons before the filing of the said reports, he could have started preparing for it earlier and then made the present application right away upon the said reports were filed. Indeed, H’s counsel accepted that “the earliest date H could have pursued the Expert Summons was on 9 December 2024”. 30.Even if he could only start preparing for the making of the application on 9 December 2024 (which I do not agree), given H all along knew what he was looking for in terms of expert evidence, and in the light of all the circumstances, I do not think it was reasonable for H to take more than 2 months after he has received the 2nd SJE Report to make the present application. 31.H explained that by the time the 1st SJE Report and the 2nd SJE Report were filed on 9 December 2024, preparation of the Narrative Affidavits and agreed documents was well underway. That may be so. However, I still consider that the present application should have been filed much earlier. 32.In any event, the Court would have to consider the prejudice which the orders sought under the Expert Summons would cause to W, no matter whether H should be blamed for the late application. 33.H argued that there is no basis for W to assert prejudice because parties have spent years arguing over the questions behind the expert issues raised in the Expert Summons, and he has given advance notice to W of his intention to seek the appointment of a second expert and his arguments in support. With respect, I do not agree. The so-called “advance notice” was in fact only H’s “reservation of right” for bringing this application. There was no reason why W would have to start preparing for it before H served the Expert Summons on her. 34.Further, as I mentioned above, the trial is only around 1 month away. If H’s application is acceded to, it would greatly disrupt W’s preparation of the trial, since attention, time and effort would have to be diverted to the consideration of the further expert report produced by Tupila dated 4 March 2025 (“Tupila’s 2025 Draft Report”) (which was only served on the Court and W by H together with his Written Reply Submissions on 4 March 2025), and also to the preparation of W’s own expert evidence (there is no reason why W should not be given leave to call her own expert if H is allowed to do so). This in itself is a form of prejudice. 35.In this regard, H argued that given W previously had her own expert, Choy, to comment on the earlier reports of Tupila, it should not be difficult for W to respond to Tupila’s 2025 Draft Report should she wish to do so as there is still over a month before the start of the trial. With respect, I do not agree. W simply should not be put into such a position in the first place. It is unfair to impose upon W an obligation to consider the Tupila’s 2025 Draft Report and to cause her own expert to produce a report within such a short time. Moreover, it is extremely unlikely that there will be enough time for the parties’ respective experts to meet and prepare a joint statement before the commencement of the trial (not to mention well before it). 36.Furthermore, if 2 more experts are to be called to give oral evidence at the trial, it is very likely that the original estimated length of trial of 8 days would not be enough. The high likelihood is that further trial dates would have to be fixed. However, given the fact that both sides have engaged senior counsel, and given the very busy schedule of this Court, it is very likely that it would be difficult to find new hearing dates which are relatively close to 17 April 2025 (the last scheduled day for the adducing of evidence). That means it is highly probable that the trial would have to be truncated with a large gap between the 2 trial periods. This is very undesirable. D2. The Proposed Expert Issues 37.H contends that a further expert report from his own expert is necessary because the SJE has failed to:
and as a result, he is unable to run a sizeable part of his case (namely, an immediate cash-out approach would have a great impact on the realisable value of the Business) at full force. 38.He therefore, by virtue of the Expert Summons, raises 5 expert issues for his own expert to opine on (see [20] above). 39.The question is: are these expert issues proper in the circumstances of the present case, especially in the light of how H had conducted his case in these proceedings? 40.To answer this question in relation to Expert Issue (1) and Expert Issue (2), one should firstly make reference to the Joint Instruction Letter which provides, inter alia, that:
41.Then one should refer to the 1st SJE Report and the 2nd SJE Report. 42.From the aforesaid documents, it is clear that:
43.At the end of the day, the reality is that H is not satisfied with the opinion of the SJE, apparently because the SJE’s opinion is not favourable to him (allegedly because the SJE has not dealt with certain scenarios). This may be seen from H’s skeleton which concluded that:
44.However, that does not necessarily mean that it would be open to H to call his own expert so as to feed him with supporting evidence for running his “best” case, especially when the trial is imminent. 45.In the present case, a special feature which one also has to bear in mind is that the questions raised under Expert Issues 2(a) and 2(c) are not something new to H. If such questions are so important in the running of his “best” case, he should have insisted to include such issues in the Joint Instruction Letter as “must-answer” items, rather than leaving the matter to be decided by the SJE. While I can appreciate H’s good gesture in not taking that stance so as to facilitate an amicable agreement with W on the content of the Joint Instruction Letter, he must still face the obstacle in persuading the Court that he should be allowed to regret and adopt a different stance, especially when we are now so close to the trial dates. It should also be borne in mind that the Joint Instruction Letter was drafted by H (see [13] above). 46.What is not covered in the SJE’s 1st Report and the SJE’s 2nd Report is Expert Issue 2(b), which deals with the question of whether the Business may be unable to comply with capital surplus requirements imposed by the Securities and Futures Commission on the Business and/or its entities if cash is to be raised for the purpose of immediate lump sum payment. It seems that this matter has indeed been raised in the Joint Instruction Letter too, when the SJE was asked to refer to “relevant Securities and Futures (Financial Resources) Rules including Cap 571N regarding financial resources requirements and any other capital requirements imposed by any external regulator or government”. However, for unknown reason, this issue was not dealt with by the SJE, nor was it included as one of the H’s Follow-Up Questions. 47.But no matter what, it now appears from Tupila’s 2025 Draft Report that there is no indication that the Business would be unable to comply with its immediately regulatory capital requirements even if H were to raise cash through realisation of some or all surplus assets in CD Limited[6]. That being the case, this issue is no longer relevant for our purpose. 48.Expert Issue (3) is related to forced sale discount. Although this matter was already raised in Tupila’s 2020 Report and Tupila’s 2022 Report, it was not included as one of the issues which must be dealt with by the SJE pursuant to the Joint Instruction Letter. As explained above, it is not right for H to be allowed to make a U-turn at this stage. I therefore hold that this is not a proper expert issue. 49.In H’s Reply Submissions[7], H seems to accept that the SJE has already answered this issue by contending that there should be no discount given. If that is so, then it seems to me that the timing of this application and the prejudice which a new expert report from H would cause to W would be the more important factors in the balancing exercise (see Section D1 above). 50.Expert Issue (4) concerns the relationship between the withdrawal of capital from the CD Funds and the valuation of the Business. This was covered by sub-paragraph (xiii) in the Joint Instruction Letter (see [40] above). H should not be allowed to raise it again now by virtue of his own expert’s report. He should be bound by how he conducted his case previously. 51.Expert Issue (5) asks whether it is necessary to wind the Business up in order to achieve an immediate settlement, and if so, what the liquidation value is. 52.I wonder how H’s expert would be able to answer the first part of the question, given that would depend on the value of H’s other assets. 53.I have dealt with liquidation value above – by sub-paragraph (xii) in the Joint Instruction Letter (see [40] above), he has left it to the SJE to decide whether he should take this matter into account. Hence, I do not think this is an expert issue which is proper at this stage to be answered by H’s own expert. D3. Exercise of discretion 54.H has argued that he should be allowed to put forward evidence from his own expert on what may transpire to be the most important dispute between the parties at the trial. 55.It was further reiterated that dismissing the Expert Summons would prejudice H’s ability to put his best case forward, and that it would be very unfair to H for barring him from calling his own expert on an important part of his case. 56.However, it must be borne in mind that when the Court conducts a balancing exercise, the Court has to consider the interest of both parties. 57.Having taken all the matters under Sections D1 and D2 into consideration, I am of the view that the Court should exercise its discretion against H. E. DISPOSITION 58.I therefore dismiss the Expert Summons. F. COSTS 59.I make a costs order nisi that H shall bear W’s costs of the Expert Summons, with certificate for 2 counsel. 60.The above order nisi shall become absolute in the absence of application to vary (which, if any, shall be made by letter, and will be disposed of on paper) within 14 days hereof. 61.Unless any application for variation of the aforesaid costs order nisi is made within time, W shall lodge and serve her statement of costs on or before 16 April 2025. H shall lodge and serve his statement of objection by 25 April 2025. Summary assessment of the costs of the application will be conducted on paper (no matter whether any statement of objection is lodged within time) thereafter. The costs assessed shall be paid within 14 days after assessment.
Mr Nigel Kat SC leading Ms Madeleine Booth, instructed by Withers, for the petitioner Ms Mairead Rattigan SC leading Mr Adrian Kwan, instructed by Haldanes, for the respondent | ||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under HCMC 2/2023