Big Island Construction (HK) Ltd v. Wu Yi Development Co Ltd and Another

HCA1957/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1957 OF 2005

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Before : Hon Poon J in Court

Date of Hearing : 22 February 2010

Date of Decision : 22 February 2010

Date of Reasons for Decision : 25 February 2010

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REASONS FOR DECISION

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Introduction

1.On Day 26 of the trial, the Big Island Parties applied to admit as evidence numerous new documents.  The parties agreed that the copy company search report of福州閩港建築開發有限公司, which had been referred to in the course of cross-examination without objection, should go in but disagreed if the remaining documents (“the New Documents”) should.  After hearing counsel, I refused to admit the New Documents.  These are the reasons for my decision. 

The New Documents

2.The New Documents that the Big Island Parties sought to introduce fell broadly into the following categories :

(1) Copy extracts of the website of China Wu Yi Corporation Limited showing the projects undertaken by the Wu Yi Group in 2000 and 2001.  They are said to be relevant to the Big Island Parties’ case that the various purported RMB remittances allegedly made on Li De Fu’s instructions were more likely to be Wu Yi Group’s own purchases of raw materials for large scale construction projects ongoing at the material time. 

(2) Copy company search reports of China Wu Yi and Fujian Construction. 

(3) Copy company search reports of the applicants named on the 23 applications for bank drafts or remittances which the Wu Yi Parties relied on. 

(4) Copy company search reports of the recipients named on the 23 applications for bank drafts or remittances.  The Big Island Parties contended that they showed the dubious nature of the purported recipients and the alleged scheme of fund exchange. 

(5) Copy company search report of福州輕工進出口有限公司.  This company is the entity through which Li De Fu allegedly remitted US$240,350 to Nationbuild Pacific Ltd.

(6) Copy Bank Indonesia Regulation No. 1/9/PBI/1999 and copy internet article regarding the foreign exchange control policy in Indonesia.  The Big Island Parties argued that they arose from questions put to Mr Ben Lee in cross-examination as to whether there were foreign exchange restrictions in Indonesia at the material time in 2000. 

(7) Copy company search reports of various companies, which Big Island Parties relied on to show the close relationship between Lin Baoshun and Xu Zhonghua. 

Refusing the application

3.In the Reasons for Decision handed down on 22 February 2010, I said :

“2.   Discovery is a continuing obligation.  But it does not mean that the court will condone late discovery made at the commencement or in the middle of the trial.  The court is generally not sympathetic towards such 11^th hour discovery.  In fact, the court rarely exercises its discretion to admit late documents.  This is particularly so after the CJR when numerous measures have been introduced to ensure that the case is properly prepared by the parties for trial.  Litigants, as well as their legal representatives, should be warned again that any late discovery will be refused unless it is well justified. 

3.    The burden lies squarely on the applicant why the court should exercise the discretion in his favour.  He must first provide a good and credible explanation, by way of an affidavit, as to why the document was not disclosed earlier.  Absent such explanation, the application may be refused on the ground of delay alone. 

4.    The applicant must also convince the court that document is relevant to the issues before the court.  Even if it is relevant, the court will not necessarily admit it.  Depending on the circumstances, the court may wish to apply a sense of reasonable proportionality.  For example, if the document will not add much to what has already been adduced, the court may decline to admit it. 

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4.At the outset, I wish to dispose of two contentions raised by the Big Island Parties.  First, they argued that since most of the New Documents are public documents and are not controversial, they should be admitted.  Even assuming that they are public documents (which the Wu Yi Parties do not accept), the Big Island Parties still need to justify the late application with good, strong reasons.  Secondly, they argued that although the New Documents had not been referred to in cross-examination, their substance had been.  So the Wu Yi Parties had been overly technical in opposing their admission.  I disagree.  As rightly submitted by the Wu Yi Parties, the New Documents ought to have been expressly referred to in cross-examination so that their admissibility could have been dealt with there and then.  Now that the Big Island Parties chose to apply for their admission at this stage, the Wu Yi Parties could legitimately object. 

5.In my view, the Big Island Parties have failed completely to advance any reason to explain the lateness of their application.  On this ground alone, the application must fail. 

6.In any event, I do not think the New Documents really add anything substantial to the issues now before the court. 

7.Items 1 and 2 are really background information.  They do not take the matter any further.  The Big Island Parties wished to rely on Item 1 to show that the various purported RMB remittances allegedly made on Li De Fu’s instructions were more likely to be Wu Yi Group’s own purchases of raw materials for large scale construction projects ongoing at the material time.  But that is not the Big Island Parties’ pleaded case.  Nor had Mr Ben Lee or Ms Li Hung so alleged in their evidence. 

8.Items 3, 4 and 5 can be dealt with together.  The identity of the applicants and their status as companies in the Wu Yi Group are not in dispute.  So Item 3 does not add anything.  For the recipients and福州輕工, one should bear in mind that according to both parties, they are complete strangers.  In particular, it is not the Big Island Parties’ pleaded case that the Wu Yi Parties knew these entities; or that the Wu Yi Parties did enter into business transactions with them resulting in the bank drafts or remittances; or that the Wu Yi Parties colluded with them to fabricate the applications for bank drafts and remittances.  I do not think items 4 and 5 will in the circumstances take the matter any further. 

9.Items 6 and 7 relate purely to the credibility of the witnesses.  I do not think discovery pertaining to credibility alone can be admitted at such a late stage of the proceedings. 

10.For the above reasons, I refused to admit the New Documents. 

Mr Daniel R. Fung, SC leading Ms Sara Tong and Mr Benny Lo,  instructed by Messrs Stephenson Harwood, for the Plaintiff

Mr Ambrose Ho, SC leading Mr Lawrence Ng and Mr Harry Liu, instructed by Messrs Ford, Kwan & Co., for the 1^st and 2^nd Defendants