Kader Industrial Co. Ltd. v. Galco International Toys N.V.

HCA000477H/1991

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

1991, No. A250

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1991, No. A477

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1991. No. A320

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Coram: the Hon Mr Justice Findlay, in Chambers

Date of hearing: 26 July 1995

Date of handing down of judgment: 31 July 1995

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JUDGMENT

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1. I have before me a summons issued Galco International Toys N.V. (the plaintiff) in which it asks for an order, under Order 38, rule 36, that -

"(i) The Plaintiff and Defendant do disclose on or before the 1st day of November 1995 reports of experts of the law of the United States of America as to whether :

a) The code of Federal Regulations Title 16 issued under the Federal Hazardous Substances Act and the Consumer Product Safety Act by the Consumer Product Safety Commission;

b) Regulations F963 - 86 of the American Society for Testing and Materials

or either of them have application to toys with micro-biological contamination and if so whether the contamination herein alleged by the Plaintiff contravened the said Code of Federal Regulations Title 16 and Regulations F963 - 86 of the American Society for Testing and Materials.

(ii) Such reports to be agreed, if possible.

(iii) Unless such reports are agreed the parties be at liberty to call witnesses limited to those witnesses whose reports have been disclosed and to one witness for each party."

2. Order 38, rule 36 says -

"Except with the leave of the Court or where all parties agree, no expert evidence may be adduced at the trial or hearing of any cause or matter unless the party seeking to adduce the evidence -

(a) has applied to the Court to determine whether a direction should be given [under rule 37, which provides for directions that the substance of the oral expert evidence be disclosed in the form of a written report] and has complied with any direction given on the application .... ."

3. On 19 September 1994, the plaintiff applied to Yam, J. for further directions relating to the reports of various experts. One direction sought was that -

"A report by an Attorney-at-Law in respect of an Advice on United States Law in particular in relation to the CPSC Regulations be agreed if possible, and that, if not the expert evidence be limited to one witness for each party;"

4. This application was made under Order 27, rule 7, which provides for a party to seek directions when the other party has issued a summons for directions. The plaintiff's application for further directions was dismissed. There was no appeal from this decision. This application was mentioned to me in December 1994, when, before trial, the parties wished to amend their pleadings. Mr Mills-Owen raised the matter as part his argument that I should not allow the application by the defendant to amend its pleadings, and, if I did, I should adjourn the trial. This is what I said on that occasion -

"Mr Mills-Owen says that expert evidence will be required to assist me in construing the Standards to determine whether or not they apply to micro-biological contamination. I wondered, when Mr Mills-Owen raised this, why I would need assistance on the aspect of the Standards now sought to be pleaded, but apparently not on the aspects relied upon by the plaintiff or those aspects already pleaded by the defendant. He attempted to explain this. He said that the plaintiff took the view that the existing pleadings called for expert evidence. An application was made to a judge for directions on this point.

The direction, amongst others, sought was "A report by an Attorney-at-Law in respect of an Advice on United States Law in particular in relation to the CPSC Regulations be agreed if possible, and that, if not agreed the expert evidence be limited to one witness for each party."

The judge dismissed the summons saying, I am told, that it was "vague, unnecessary and improper". There was no appeal against this decision.

I am not sure what effect this ruling has. I have some doubt that it has the effect of debarring a party from calling expert evidence, although this seems to be the way the parties have interpreted it. In terms, the direction refused was one calling for an expert's report to be agreed, or for the number of expert witnesses to be limited. Certainly, I accept that it does not dictate to me that I must not hear expert evidence because it is inadmissible; that, as Mr Mills-Owen argues, is a matter for me. In any event, if the parties were right in assuming that the judge was saying that expert evidence was unnecessary, I agree. If I have any particular expertise, it is in the area of statute law, and I do not believe that any difficulty that may arise in construing the Standards would be helped by having the view of another.

However, whatever the effect of this ruling, I do not see that the amendments applied for by the defendant make any difference to the situation. The question of the proper construction of the Standards is in issue now, and it will remain so if the amendments are allowed. Nothing in this respect would be changed by the amendments sought to be made."

5. Mr Griffiths argues that the application now before me has already been decided by Yam, J. in September 1994 and by me in December 1994. He says that the plaintiff cannot now reopen the matter before me.

6. The application that was refused by Yam, J. was that an expert's report be agreed, if possible, or that expert evidence be limited to one witness for each party. On the authority of Mandarin Resources Corp. v Cheng and Others (Unreported; CA 1987, No.146), by which I am bound, this decision raises an "interlocutory issue estoppel", whether it was right or wrong, and I cannot consider again whether to order that an expert's report be agreed, if possible, or that expert witnesses be limited. The decision does not, however, deal with an application for a direction that the substance of oral expert evidence be disclosed in written reports; no "interlocutory issue estoppel" arises on this aspect of the matter.

7. As for my own contribution to the confusion in December 1994, I was not dealing with any application at all in relation to the calling of expert evidence. I was commenting on the decision of Yam, J. and considering the impact of the possibility of calling expert evidence on the application to amend and to adjourn. I certainly did not refuse any application for directions that the substance of oral expert evidence be disclosed in written reports. Accordingly, no "interlocutory issue estoppel" can arise from this in relation to this aspect of the application now before me.

8. There was some debate before me as to the need to call expert evidence to prove the law of the United States of America and its proper interpretation; Mr Mills-Owen saying, very gently and politely, that I was wrong in what I said on this aspect of the matter in December 1994, and Mr Griffiths arguing, not unnaturally, that I was right. Having considered the authorities relied upon by Mr Mills-Owen, I am inclined to think I was wrong. It seems in the light of the defendant's defence, certainly as it now stands, that every aspect of the "Standards" is put in issue, including whether or not they are "true" and accurately described by the plaintiff. This means, as I see it, that the plaintiff must prove what the "Standards" say, their applicability to the case before me and what they mean. Even supposing that the documents in the agreed bundle can be said to be proved, they need to be interpreted and applied. The authorities say that I should not, except in special circumstances, attempt this alone; I must have expert evidence on the foreign law to help me. But, in any event, it is not for me to tell the plaintiff what witnesses it needs to prove its case; that is its own business. It is entitled, whatever I might think about the need to call experts, to prepare the way for the reception of their evidence. Whether or not their evidence is relevant or admissible is a matter to be decided when the plaintiff seeks to lead that evidence. Naturally, the plaintiff does not want to resume the trial depending on the leave of the Court or the agreement of the parties to enable it to adduce the expert evidence. So, what it has done is to apply for directions for disclosure of experts reports. It, no doubt, intends to comply with any such directions, so that the leave of the court or the agreement of the parties at a later stage is unnecessary. If I refuse this application, the plaintiff has done what is required of it, but the result would be that there would be no direction that the experts reports be disclosed, and that would not be in the interests of justice; I can foresee that it may result in the trial being adjourned again. The first direction sought also, of course, would oblige the defendant to disclose any experts' reports, and this seems right if the defendant intends to adduce such evidence. If it does not, the direction would not apply.

9. Accordingly, I make a direction in terms of paragraph 1. (i) of the summons. For the reasons I have given, I am precluded from making a direction in terms of sub-paragraph (ii), not that this matters very much. The parties can agree the reports if they see fit, although I regard this prospect as unlikely. As for sub-paragraph (iii), the parties do not need me to tell them they are liberty to call expert witnesses whose reports have been disclosed if the reports are not agreed; whether or not their evidence would be admissible is another matter. As I have already explained, I am not able to make a direction limiting the number of expert witnesses, no matter how sensible this would be.

10. As for the costs of the hearing on 26 July 1995, a very short time was taken up by other matters that were, very sensibly, agreed by the parties. I am inclined to think these costs should be in the cause. The rest of the time was taken up by arguing the matter with which this judgment is concerned. On the face of it, there seems no reason why the costs here should not follow the event; the plaintiff succeeded in getting the main direction it sought, and the defendant should pay the costs. I make orders nisi accordingly.

Representation:

Mr R. Mills-Owen, Q.C., and Mr J. Bleach Q.C., instructed by Messrs Denton Hall, for Galco International Toys N.V.

Mr J. Griffiths, Q.C., and Mr B Barlow, instructed by Messrs P.C. Woo & Co., for Kader Industrial Company Limited.