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HCA 259/2007
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO. 259 OF 2007
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BETWEEN
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OXYVITAL LIMITED |
Plaintiff |
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and |
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DEACONS (A FIRM) |
Defendant |
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Before: Deputy High Court Judge Au in Chambers
Date of Hearing: 18 November 2008
Date of Handing Down Decision: 24 November 2008
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D E C I S I O N
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I. Introduction
1.By way of the present action, the Plaintiff sues the Defendant for negligence as its solicitors in failing to duly make applications for patent registrations for an invention in the USA and China.
2.Upon the Plaintiff’s application by summons, on 14 July 2008, Master Lung made an order as follows:
(1) Leave be granted to the Plaintiff and the Defendant to call expert witnesses at trial in respect of the following evidence:
(a) The patentability of the original USA patent, and the normal and accepted procedure relating to patent applications in the USA.
(b) The patentability of the original PRC patent, and the normal and accepted procedure relating to patent applications in the PRC.
(c) The generally accepted practice and standard of care of patent lawyers/attorneys in Hong Kong handling patent applications in Hong Kong and overseas jurisdictions and in what respects the Defendant failed to meet such general practice and standard of care and to carry out its professional duties of care in handling the Plaintiff’s patent portfolio.
(d) The quantification of the Plaintiff’s loss and damage.
(e) The nature and scope of the Plaintiff’s technology and its patentability in light of prior art; andthe “catalytic action” of the Plaintiff’s technology and IAQ unit in order to determine whether it operates as claimed by the Plaintiff.
(2) The expert reports shall be exchanged and filled within 4 months of the date of this order.
(3) Costs of the application be in the cause.
3.The Defendant now appeals against only paragraph 1(c) of Master Lung’s order. It is the Defendant’s case that such expert evidence is inadmissible and irrelevant to the issues of this action, and therefore should not be allowed.
4.On the other hand, in opposing the appeal, the Plaintiff accepts that the scope of expert evidence originally set out in paragraph 1(c) of Master Lung’s Order should be amended by deleting the references to “duty of care”, as duty of care is a question of law and thus not for the expert. Paragraph 1(c) should therefore be amended to read: “The generally accepted practice of patent lawyers/attorneys in Hong Kong handling patent applications in Hong Kong and overseas jurisdictions and in what respects (if any) the Defendant failed to meet such general practice and standard of care and to carry out its professional duties of care in handling the Plaintiff’s patent portfolio”.
II. The parties’ case
5.For the purpose of this appeal, it is sufficient for me to set out the gist of the parties’ relevant pleaded case respectively as follows.
The Plaintiff’s case
6.The Plaintiff is the assignee of all the title, right and interest in and to of an invention (“the Invention”) in relation to a method and apparatus for improving air quality within a building or any enclosed space.
7.In February 2000, the Plaintiff engaged the Defendant as its solicitors to advise and to act for it in relation to making applications for patent registrations of the Invention in various jurisdictions.
8.In August 2000, the Defendant filed an application for patent registration in relation to the Invention (“the Original USA Application”). The deadline for completion of the Original USA Application was on 4 August 2001.
9.After confirming instructions with the Plaintiff, in August 2001, the Defendant through their USA patent attorney filed a patent application under the Patent Cooperation Treaty (“the PCT Application”) in relation to the Invention.
10.For that purpose, on the PCT Application form, the Plaintiff had designated a multiplicity of member states under the Treaty. The designated states were: USA, EP (i.e., member countries of the European Patent Convention), China, Japan, Korea and Singapore.
11.After the filing of the PCT Application, the Original USA Application was not further proceeded with, and lapsed after 4 August 2001.
12.When the PCT Application entered into the national phase, the Defendant did not make any application for the Plaintiff for patent registration of the Invention in the USA under the national phase of the PCT Application.
13.On the other hand, in June 2002, the Defendant instructed their PRC patent agent to file a patent application in China in relation to the Invention (“the PRC Application”) under the national phase of the PCT Application.
14.In December 2004, the PRC patent agent informed the Defendant that responses should be made to the State Intellectual Property Office in relation to the first official action concerning the PRC Application on or before 11 April 2005.
15.However, by their letter dated 15 December 2004, the Defendant instructed the PRC patent agent to passively abandon the PRC Application by not responding to the first official action. The Defendant said in the letter that they had been having difficulties in securing payment of their costs from the Plaintiff.
16.The PRC patent agent followed the Defendants’ instruction. The PRC Application finally lapsed and was regarded as having been withdrawn.
17.The net result of the above is that eventually no valid patent registration was made for the Invention in both the PRC and the USA.
18.The Plaintiff says, by designating USA as one of the countries in the PCT Application Form, it had given a specific instruction to the Defendant to file an application for registration of patent for the Invention in the USA under the national phase of the PCT Application.
19.It is the Plaintiff’s case that, the Defendant had therefore failed to follow the Plaintiff’s instructions:
(1) in not proceeding to apply for the USA patent registration under the national phase of the PCT Application,
(2) in not proceeding with the Original USA Application, when at the same time it did not apply for the USA patent registration under the national phase.
20.Further, the Plaintiff also says at the material times the Defendant:
(1) had not informed and reported to the Plaintiff about their failure to proceed with the USA patent application under the national phase of the PCT Application;
(2) had not sought instructions from the Plaintiff to do so when it allowed the Original USA Application to lapse;
(3) had not sought instructions from the Plaintiff to do so before they instructed the PRC patent agent to abandon the PRC Application;
(4) had not reported to the Plaintiff their instructions to the PRC patent agent to abandon the PRC Application before the expiry of the deadline for responding to the first official action.
21.It is also the Plaintiff’s case that:
(1) Even if (which is denied) it had not settled the Defendant’s bills at that material time, before they actually instructed the PRC patent agent to abandon the PRC Application, the Defendant should have first informed it about their intended act and sought further instructions from the Plaintiff;
(2) The Defendant had been misleading the Plaintiff into believing that patent applications were ongoing in the USA and China and nothing wrong was arising out from these applications.
The Defendant’s case
22.The Defendant’s relevant case is as follows:
(1) The Defendant had all along properly and duly reported to the Plaintiff the progress and status of the various patent registration applications.
(2) In relation to the USA applications:
(a) The Plaintiff had been duly advised by the Defendant that the Original USA Application was only provisional in nature, so as to secure priority, and that this purpose had been superseded by the filing of the PCT Application.
(b) The Plaintiff all along was aware of the fact that Original USA Application would lapse by 4 August 2001, as it had been so duly informed and advised by the Defendant.
(c) There was no instruction from the Plaintiff to require the Defendant to apply for USA patent registration under the national phase of the PCT Application.
(d) In this regard, the mere designation of USA in the PCT Application form by the Plaintiff did not amount to any instruction to the Defendant to make patent registration application in the USA under the national phase of the PCT Application. This is so because any PCT applications would usually designate USA as a country, and this does not constitute an instruction to apply for patent registration in USA under the relevant national phase.
(3) In relation to the PRC Application:
(a) the Plaintiff provided express instruction to ask the Defendant to make it under the national phase of the PCT Application in 2002, but not by designating China in the PCT Application form.
(b) although the Defendant had not received instruction to do so, the Defendant was entitled to write to the China patent agent to passively abandon the PRC Application when the Plaintiff failed to settle the Defendant’s long outstanding bills.
III. The Law
23.Insofar as whether certain expert evidence is relevant and admissible for the determination of issues arising from a professional negligence claim against solicitors (or barristers), I regard the following as the general guiding legal principles:
(1) Although properly defined expert evidence is generally relevant and admissible to assist the court in deciding whether the acts or omissions of a professional defendant constituted negligence, solicitors’ negligence cases are generally an exception: Jackson & Powell on Professional Liability (6th ed), paras 6-007, 6-008; Simpson and Lord Hoffmann, Professional Negligence and Liability (2008), para 9.131.
(2) Expert evidence is rarely admitted on the question of whether a solicitor has discharged his duty of skill and care. The rationale appears to be that the court themselves generally possess the necessary professional expertise to decide the question: Jackson & Powell on Professional Liability, supra, paras 6-007, 6-008; Professional Negligence and Liability, supra, para 9.131
(3) In particular, the evidence of what another solicitor or barrister (the expert) would have done in a particular situation if he were in the place of the defendant is generally irrelevant and thus inadmissible to the question of whether the defendant solicitor or barrister is negligent. Thus, in a case on whether the defendant conveyancing solicitor was negligent in failing to register an option to purchase a piece of farmland, Oliver J said in Midland Bank v Hett, Stubbs & Kemp [1979] Ch 384 at 402[1] as follows:
“…I have heard the evidence of a number of practising solicitors. Mr Harman modestly contended himself with calling one; but Mr Gatehouse - mindful, no doubt, of what is said to be the divine preference for big battalions - called no less than three. I must say that I doubt the value, or even admissibility, of this sort of evidence, which seems to be becoming customary in cases of this type. The extent of legal duty in any given situation must, I think, be a question of law for the court. Clearly, if there is some practice in a particular profession, some accepted standard of conduct which is laid down by professional institute or sanctioned by common usage, evidence of that can and ought to be received. But evidence which amounts to no more than an expression of opinion by a particular practitioner of what he thinks that he would have done had he been placed, hypothetically and without the benefit of hindsight, in the position of the defendants, is of little assistance to the court; whilst evidence of that witnesses’ view of what, as a matter of law, the solicitor’s duty was in the particular circumstances of the case is, I should have thought, inadmissible, for that is the very question which it is the court’s function to decide.” (emphasis added)
(4) On other hand, there are occasions which would still warrant the admission of expert evidence if this is shown to be relevant to issuesconcerning the questions of established general practice in the profession[2]or are related to a specialized or complex area of the practice of the law where it could not be expected that the court itself possess the relevant expertise[3]: Midland Bank, supra, 402; Professional Negligence and Liability, supra, para 9.132.
24.In other words, generally speaking, unless it can be demonstrated that the issues arising from a solicitors’ negligence claim involve debate on established professional practices, or allegations of negligence relating to the practice in a specialized or complex branch of the law, expert evidence is irrelevant and thus inadmissible. Of course, these exceptions are not intended to be exhaustive, and each case must be guided by it own facts when determining whether expert evidence on solicitors’ practice should be admitted.
25.Further, in deciding whether to grant leave at the pre-trial stage to the parties to adduce certain expert evidence, the Court should look at the question of relevance and probative value of the proposed scope of expert evidence. In relation to this I will respectfully adopt Chu J’s observations in Wong Hoi Fung v. American International Assurance Co (Bermuda) Ltd (unrep., HCA 4567/2001, 8 October 2002) at paragraphs 11 and 12 as follows:
“11. Modern judicial authorities recognize that the court has inherent power to rule on the admissibility of expert evidence at a pre-trial stage: Woodford and Ackfroyd v. Burgess [2000] CP report 79, Ko Chi Keung v. Lee Ping Yan Andrew [2001] 2 HKC 63 and Annabell Kin Yee Lee & Anor v Lee Wing Kim (May Lee) & Anor (unreported), HCA 9522/1997. Where the proposed expert evidence is plainly inadmissible or irrelevant, the court ought to exercise its discretion to refuse the admission of such evidence. But where the court cannot form a clear view on the relevance of the proposed expert evidence or where it considers that the proposed evidence is clearly relevant, then it should grant leave for the evidence to be adduced at the trial: Ko Chi Keung v. Lee Ping Yan Andrew (supra), at p. 67 and Annabell Kin Yee Lee & Others v. Lee Wing Kim (May Lee) & Anor (supra), at p. 15.
12. In deciding whether certain expert evidence should be received, the relevant test has been stated to be a two-stage one. Firstly, the evidence has to be admissible ‘as expert evidence’ for the purpose of section 58 of the Evidence Ordinance, Cap. 8. Secondly, the evidence must be relevant, in the sense that it is helpful to the court in arriving at its decision on one or more of the issues to be resolved: Barings plc (in Liquidation) & Anor v. Coppers and Lybrand & Ors, Lexis Transcript, 9 February 2001, Evans-Lombe J at paras 44-45.”
26.With these principles in mind, I will now move on to deal with this appeal as follows.
IV. The present Appeal
Whether the expert evidence in the form as sought is relevant and admissible
27.In determining this question, one must first identify the relevant issues in the action. Issues are defined by the pleadings.
28.Other than the Plaintiff’s pleaded case as I have set out above, the Plaintiff’s particulars of negligence are pleaded at paragraph 57 of the Statement of Claim as follows:
“57. In the premises, the Plaintiff avers that the Defendant in breach of the aforesaid implied terms of the Defendant's retainer, and/or negligently, and/or in breach of the aforesaid fiduciary duties, have failed to carry out the Plaintiff's instructions with reasonable diligence and/or have failed to exercise reasonable skill and care in the performance of their duties.
Particulars of Breaches of Contractual Duties and/or Negligence
A. Generally:-
(1) Failing to carry out the Plaintiff's instructions with reasonable diligence, in particular, failing to pursue the Plaintiff's patent applications with reasonable diligence before their respective deadlines expired;
(2) Failing to advise or warn the Plaintiff of those steps or acts that should be taken or done in order to continue the proper and timely pursuit of the parent applications;
(3) Failing to keep the Plaintiff informed of the status of its patent applications and/or the steps or action that should be taken in relation to each of those patent applications;
(4) Failing to disclose to the Plaintiff all the communications and/or correspondence exchanged between the Defendant and their patent agents in overseas jurisdictions;
(5) Knowingly or negligently giving false information to the Plaintiff in relation to the status of its patent applications;
(6) Giving instructions to their patent agents in overseas jurisdictions in connection with Plaintiff's patent applications without seeking the Plaintiff's consent or approval;
(7) Failing to take all such reasonable or necessary steps so as to protect the Plaintiff's interest in relation to its patent applications;
(8) Failing to take instructions from the Plaintiff and/or advise the Plaintiff in connection with all matters arising from the Plaintiff's patent applications;
B. In relation to the Original USA Application:-
(9) Failing to advise the Plaintiff as to the steps that the Plaintiff needed to take before 4th August 2001 for the purpose of proceeding with the Original USA Application;
(10) Failing to inform the Plaintiff that the Defendant had instructed Jacobson not to proceed with the Original USA Application by their letter dated 3rd August 2001 from the Defendant to Jacobson and as a result causing the lapse of the Original USA Application on 4th August 2001;
(11) Failing to carry out the Plaintiff's instructions to proceed with the filing of a patent application in the USA under the national phase of the PCT Application;
(12) Failing to advise the Plaintiff or seek the Plaintiff's confirmation to proceed with the filing of a new patent application in the USA under the national phase of the PCT Application;
(13) Knowingly or negligently giving false information to the Plaintiff in relation to the status of the Original USA Application;
C. In relation to the PRC Application:-
(14) Failing to inform the Plaintiff of the First Office Action, under which the Plaintiff was required to give responses in order to avoid the lapse of the PRC Application;
(15) Failing to advise the Plaintiff to response to the First Office Action before the deadline expired on 11th April 2005;
(16) Failing to give timely disclosure of the communications between the Defendant and China Sinda in relation to the PRC Application;
(17) Giving instructions to China Sinda to abandon the PRC Application by inaction without seeking the Plaintiff's consent or approval;
(18) Failing to inform the Plaintiff or seeking the Plaintiff's consent before giving instructions to China Sinda on or about 8th February 2005 to abandon the PRC Application;
(19) Failing to inform or advise the Plaintiff that the PRC Application was deemed to have been withdrawn before the time for the filing of the restoration of the PRC Application had expired on 10th August 2005;
(20) Knowingly or or negligently giving false information to the Plaintiff in relation to the status of the PRC Application;
(21) Failing to keep a proper account of the invoices issued by the Defendant and advanced deposit on account paid by the Plaintiff in respect of the PRC Application; and
(22) If (which is denied) the Plaintiff had not settled all the Defendant's previous invoices in relation to the PRC Application, the Defendant failed to inform and/or request the Plaintiff to settle those outstanding invoices before giving or confirming their instructions to China Sinda to procure or permit the abandonment of the PRC Application.”
29.These particulars of negligence should of course be read and understood in the context of the Plaintiff’s pleaded case as summarized in paragraphs 6 to 21 above.
30.In the Defence, when read together with the summary of the Defendant’s pleaded case set out in paragraph 22 above, the Defendant effectively deny any of these particulars of negligence.
31.Thus, reading the pleadings together, the substantive issues of negligence between the parties are: (a) whether the Defendant had or had not properly followed the Plaintiff’s instructions, generally, and in relation to the USA applications; (b) whether the Defendant had or had not properly reported to the Plaintiff and updated it on the progress of the matters in hand, generally and in relation to the USA applications and PRC Application, and (c) in relation to the PRC Application, whether the Plaintiff had not settled the Defendant’s outstanding bills at the material time, and even if so, whether the Defendant were entitled to unilaterally instruct their PRC patent agent not to carry out the work that the Defendant were engaged by the Plaintiff to do.
32.Save as to one issue which I would discuss later, it can be seen from the above that no issues of established standard practice are raised by the pleadings. There are also no specific or particularized allegations which relate to any specialized practice on patent registration application[4].
33.In the premises, I accept the submissions of Mr Stewart Wong, counsel for the Defendant, that these issues are questions of fact, and relate to the practice of a solicitor in general. Albeit the context under which these issues arise concerns patent applications, the dispute between the parties on whether there was negligence do not relate to any issues of a specialist or technical nature so that the Court would need expert assistance in deciding whether what the Defendant had allegedly done or failed to do falls below the standard of a reasonably competent patent lawyer/attorney.
34.Mr Westbrook SC for the Plaintiff however submits that the Defendant’s objection is raised prematurely. He says the law in relation to the relevance and admissibility of expert evidence in solicitors’ negligence case is not settled, and thus the Court should not decide against the application for the filing of expert evidence now. The more appropriate course (as further submitted by Mr Westbrook) is for the Court to allow the parties to file the expert evidence first, and if the Defendant still wants to object to it or any part of it after seeing the evidence, it is still open to them to do so either before or at the trial.
35.Mr Westbrook relies on the decision of Neuberger J (as he then was) in Liverpool Roman Catholic Archdiocesan Trustees, supra, to support his submissions.
36.In Liverpool Roman Catholic Archdiocesan Trustees, the claimant charity organisation ran a number of clubs and community centres which made profits from the sale of alcoholic drinks. Mr Goldberg QC (a leading silk in the practice of revenue law) was asked to advise on whether, in relation to these profits, the claimant was entitled to benefit from the charitable exemption under a particular section of the Income and Corporation Taxes Act 1988, and whether any steps should be taken to reorganise the activities offered at the clubs run by the claimant for that purpose. Mr Goldberg advised that the exemption did apply, and that for various reasons the activities did not need to be reorganised. The Inland Revenue however did not accept the same and raised assessments to tax on the claimant. The claimant eventually settled with the Inland Revenue and paid a substantial sum, which was significantly less than the assessed tax liability. The claimant then claimed against Mr Goldberg QC for negligent advice.
37.The application before Neuberger J at the case management conference was to exclude the expert evidence of Mr Flesch QC (another leading silk in the practice of revenue law) called by Mr Goldberg on the ground of inadmissibility as, inter alia, what Mr Flesch could at best give as evidence was merely on what he would have done in the circumstances.
38.After reviewing various authorities on the admissibility of expert evidence concerning solicitors’ negligence (including those I have cited above), Neuburger J arrived at the conclusion[5] that the right course for him to do in that case was to stand the matter over to the trial judge. In explaining his decision, the learned judge said as follows:
“In the present case, I can reach one of three conclusions. The first is to hold that this evidence is admissible. The second is to hold that the evidence is not admissible. The third is to stand the matter over to the trial judge. Although I have heard full argument and have had an opportunity, as I hope I have indicated, to consider the authorities, I have reached the conclusion that the right course is to stand it over to the trial judge. It is fair to say that there is considerable force, in light of the authorities to which I have referred, in Mr Briggs' argument that this evidence is inadmissible or unhelpful. But it seems to me that the state of the authorities is not pellucid in the sense that, even if I came to the conclusion that, in my view, the evidence contained in the report was inadmissible, I could not be confident that the Court of Appeal would not take a different view. Secondly, it is not inconceivable that the judge hearing this matter, after he has considered all the evidence and all the arguments (which I have not done) would come to a different view from whatever view I came to.
The reason I think there is a powerful argument for saying that the report is inadmissible is that of the most recent learning on this issue, that of Jonathan Parker J Insofar as he differs from Jacob J in Routestone, it seems to me that at first instance I should follow Jonathan Parker J. It does seem to me that that sentence which Mr Briggs strongly relies on is of very great assistance to him.
However, it is impossible always to say in every case whether expert evidence of a certain type is or is not admissible. It seems to me that this shines through in the way in which Simon Brown LJ and Millett LJ expressed their views and their reasons for concluding that expert evidence was inadmissible in Bown. Secondly, the position at first instance is not entirely clear. Therefore if I was to rule out the evidence now, there would be a possibility of Court of Appeal holding that I was wrong. Given that we are now a week before trial and this point could and should have been raised over a year ago, it is very unfair to put the defendant in a position - and unsatisfactory even for the claimant to be put in the position - in which the case will go ahead on what may turn out to be a wrong basis, or the case may have to be adjourned while my decision is appealed, or the Court of Appeal may have to be bothered, and other litigants in Court of Appeal inconvenienced, by an urgent appeal being brought.
Further, the state of the law is not clear and because I do not think that it is possible to be absolutist about evidence of this nature being admissible or inadmissible in every case. Accordingly, I am left with the feeling that it is conceivable that if I was to rule out this evidence the trial judge might, after reading all the documents (and, possibly, hearing some of the factual evidence) conclude that in fact he would have been assisted by hearing from Mr Flesch.
Thirdly, quite apart from these two points but connected with them, the trial judge may decide that, even though he thinks this evidence is inadmissible, it is possible that his decision on the point would be reviewed and overturned by the Court of Appeal. He may therefore think that, bearing in mind the lateness of the application and the way in which he can control cross-examination of Mr Flesch, and even though he thinks it is inadmissible, the right course is to admit the evidence de bene esse. If I rule the evidence out now or rule it in now, that would prevent him from having the sort of flexibility which, particularly in light of the Civil Proceedure Rules 1998, I think he should enjoy.
I am also slightly uncomfortable about ruling the evidence out at this stage in light of the view taken by Lloyd J in a not dissimilar case, Matrix Securities Ltd v Theodore Goddard (a firm) [1998] STC 1, [1998] PNLR 290. He made brief reference to the fact that the evidence of an expert witness as to what he would have done in the same chambers as the defendant barrister in that case - by coincidence, as it happens, the same as the defendant in the present case - was helpful: see at p 305E of the latter report. It is perfectly right, as Mr Briggs points out, that the issue on which he found it helpful was concerned with practice in relation to a practical matter rather than pure legal advice. But I have been taken to the judgment of Lloyd J where he decided that the evidence was to be admissible on 9 October 1997. In the end, of course, if I thought that it was right to reject this evidence at this stage, then, particularly as this case is distinguishable from Matrix Securities, it would have been my duty to exclude it unless there were any other good reasons not to do so.
As is probably clear from this judgment, if I had to decide this point now and thought I should decide it now, I would be inclined to hold that it was inadmissible in light of the approach of Jonathan Parker J in Barings (No 5). But if I were hearing this case, I might well think that the right course was nonetheless to have this evidence in, bearing in mind the very late nature of this application and the possibility of an appeal. That is my provisional view if I had to make up my mind as the trial judge, with the arguments I currently have heard. I do not have to make up my mind at this stage. I do not have the information which the trial judge will have. I therefore think it wrong, for the reasons that I have given, to fetter his discretion which I think he should be entitled to exercise, above all in light of the very late nature of this application.
I therefore propose to make no order but, for what it is worth, I do think, on the arguments I have heard, that the contention that Mr Flesch is personally prevented from giving expert evidence in this case is wrong. But, in fairness to the claimant, if I am not prepared to rule on the admissibility, my observations on that issue should be regarded as no more than obiter.”
39.Mr Westbrook relies on Neuberger J’s observation that “the state of law is not clear and because I do not think that it is possible to be absolutist about evidence of this nature being admissible or inadmissible in every case”, and says that the Court should not therefore rule the expert evidence as sought now but should leave it to any objection later when it is produced.
40.With respect, I do not think what Mr Justice Neuberger was saying in the above quote was intended to put a question mark on the general principles I have set out above, which is derived from a long line of cases and accepted to be so by leading texts on professional negligence. As I understand it by reading this observation in the proper context of his judgment, in stating that the law was “not clear”, the learned judge was only saying that the law had not been developed to the state to exclude expert evidence in each and every negligence claim against lawyers, and therefore each case must still be decided on its own facts or circumstances.
41.This is of course correct, as I have also so qualified the general principles above.
42.Liverpool Roman Catholic Archdiocesan Trustees concerns a negligence claim on a specialist legal advice on a specialized and presumably complex area of the revenue law. During the course of the proceedings, the claimant’s solicitors and counsel in fact expressed the view that expert evidence would be appropriate, admissible and relevant, albeit later it was the defendant (but not the claimant) who sought to adduce the expert report. The application to exclude the expert evidence came rather late, and was only made after the claimant had received the expert report for more than a year.
43.In light of the issue arising from that case, and the above background leading to the arguments before Neuberger J, I am not surprised that the learned judge decided on the circumstances of that case to stand over the matter to the trial judge, as he could not be satisfied that it was a plain and obvious case that the expert evidence should be excluded. His decision, looked at in these lights[6], is entirely consistent with the general principles set out above.
44.For the reasons I have stated in paragraphs 27 to 33 above, the Liverpool case is very different from the present case.
45.For these reasons, and with the greatest respect, I therefore do not accept Mr Westbrook’s submissions.
46.In the present case, and applying the guiding principles, I am satisfied even at this stage that the expert evidence as sought (even in the amended terms) is clearly not related and relevant to any of the issues raised, or would not render assistance to the Court in determining whether the Defendant was negligent on the matters as pleaded. In my judgment, the expert evidence sought is inadmissible and leave should not be granted to the parties to adduce the same.
Another area that calls for expert evidence
47.Notwithstanding the above, Mr Wong for the Defendant fairly accepts that there is one issue of the pleadings which the Court may find helpful the assistance of expert evidence in the practice of patent law. This is in relation to whether, as pleaded by the Defendant[7], any PCT application would be likely to designate the USA (among other countries and regional patent conventions) and the fact that the USA was originally so designated (among other countries) for the purpose of such application does not demonstrate any intention to pursue a national phase application in the USA.
48.Given the Defendant’s acceptance that expert evidence on this question is relevant and admissible, as this relates to a specialized area of the practice which the Court may be assisted, I would therefore grant leave to the parties to adduce expert evidence on this limited extent.
V. Conclusion
49.For the reasons given above, I allow the appeal and set aside paragraph 1(c) of the Master’s Order, and replace it with an order that leave is granted to the Plaintiff and the Defendant to call expert witnesses at trial in respect of the question as to whether any PCT application would be likely to designate the USA (among other countries and regional patent conventions) and the fact that the USA was originally so designated (among other countries) for the purpose of such application does not demonstrate any intention to pursue a national phase application in the USA.
50.There will also be liberty to the parties to apply for directions on the filing and exchange of the said expert reports.
51.As the Defendant has substantially succeeded in this appeal, I further make an order nisi that costs of this appeal be to the Defendant, to be taxed if not agreed. Unless any of the parties applies to vary itin writing, the order nisishall be made absolute 14 days from today.
52.I thank counsel for their assistance in this matter.
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(Thomas Au) |
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Deputy High Court Judge |
Mr. Simon WESTBROOK, SC, instructed by Messrs Laracy Gall for Plaintiff.
Mr. Stewart K.M. WONG, instructed by Messrs Herbert Smith for Defendant.
[1]Approved by the Court of Appeal in Bown v Gould & Swayne [1996] 1 PNLR 130, 133C-F, 135A-B per Simon Brown LJ. See also the observations made by Millet LJ at 137A-B, where His Lordship said: “I deplore the suggestion that it is either helpful or necessary to call expert evidence from high street solicitors whose individual practices may be eccentric and differ and whose practice certainly does not make the law of the land”.
[2]For example, in Edward Wong Finance Co Ltd v Johnson Stokes & Master [1984] AC 296.
[3]For examples, in Matrix Securities Ltd v Theodore Goddard [1998] STC 1; Liverpool Roman Catholic Archdiocesan Trustees Inc v Goldberg [2001] Lloyd’s Report P.N. 518; and Andrew Master Hones Ltd v Cruikshank & Fairwheather [1980] RPC 16.
[4]Although it is pleaded under paragraphs 57(2), (7) and (9) of the Statement of Claim that the Defendant had (a) failed to advise the Plaintiff as to the steps or acts that should be taken generally and in relation to the Original USA Application, and (b) failed to take “all such reasonable or necessary steps” to protect the Plaintiff’s interest in its patent applications, other than the allegations summarized at paragraphs 6 to 22 in this Decision, there are no further specific pleas in the Statement of Claim on what these alleged steps or acts were. Thus, reading the pleading as a whole, it is my view that these pleas relate no more than to the Plaintiff’s case that the Defendant had not followed its instructions to make a patent registration application in the USA under the national phase of the PCT Application, and to report and update the Plaintiff as to the progress of the matters.
[5]At pages 8 and 9 of the Lexis Transcript.
[6]As borne out by the above quoted part of the learned judge’s decision.
[7]At paragraph 19 of the Statement of Claim.
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