Lam Mee King v. Wong Kuo Sun John

DCCJ 2408 of 2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2408 OF 2009

_________________

BETWEEN         

_________________

Coram : Deputy District Judge A. Kot in Chambers (Open to Public)

Date of Hearing : 7^th April 2011

Date of Handing Down Decision : 11^th April 2011

_________________

D E C I S I O N

_________________

INTRODUCTION

1.This is the Plaintiff’s appeal against the decision of Master K K Pang made on 22 February 2011 granting leave to the Defendant to adduce expert evidence.

BACKGROUND

2.The Plaintiff claims against the Defendant for the failure to complete a sale concerning a plot of land in the New Territories (“the Property”).  The Property consists of 2 portions of land, a larger northern portion and a smaller southern portion, separated from each other by the Kam Sheung Road.

3.The Defendant’s defence is that the agreement is void because the registered owner Mr. Gene Don Wong (“the deceased”) had never intended to sell the Property to the Plaintiff but only a portion of it and the Deceased is suffering from dementia and was incapable of making any valid agreement for the sale (page 30 of Bundle).

4.The medical report of the Deceased was disclosed by the Defendant in the first list of documents dated 15^th October 2009.  The Plaintiff requested for the Deceased to be examined by her doctor in relation to his mental condition on 5^th July 2010 (page 138 of Bundle) and 14^th July 2010 (page 139 of Bundle).  By a letter dated 19^th July 2010, the solicitor for the Defendant replied that the Deceased who was residing in Canada, was still tired and weak upon discharge from hospital due to a slight heart attack and bleeding ulcer, hence not physically fit to travel back to Hong Kong (page 140 of Bundle).  No arrangement could be made for the Deceased to be examined since he passed away on 15^th October 2010 (page 145 of Bundle). 

5.At the CMC hearing on 22^nd February 2011, the Defendant submitted a list of proposed directions (page 165 of Bundle) asking for leave for the medical report of the Deceased prepared by Dr. Cheung Hung Kin (“Dr. Cheung’s Report”) as well as a valuation report prepared by Mr. Lo Hon Cheung (“Mr. Lo’s Report”) to be filed.  At the end of the hearing, Master K K Pang granted leave for each party to file a medical report and for a joint valuation report concerning the market value of the Property to be filed (paragraph 1-4 of the order on page 114 of Bundle) (“the Master’s Order”).

6.By notice of appeal dated 8^th March 2011, the Plaintiff appealed against the Master’s order.

THE LEGAL PRINCIPLES

7.An appeal against the Master’s decision pursuant to Order 58 of the Rules of District Court is by nature a re-hearing.

8.In deciding whether leave should be granted to adduce expert evidence, the court has to consider if the proposed expert evidence is necessary, relevant and of probative value.

THE MEDICAL REPORT

9.Mr. Chain for the Plaintiff submitted that Dr. Cheung’s report is irrelevant in the sense that even if allowed to be adduced, it cannot advance the Defendant’s case any further.  This is so since the Defendant failed to plead that the Plaintiff had knowledge of the Deceased’s lack of intention and capacity, which is crucial in order to succeed in avoiding a contract.  Relying on the case of The Imperial Loan Company Limited v Stone [1892] 1 QB 599, it is submitted that a plea of knowledge has to be expressly made and properly particularised. Since the Defendant failed to plead the same, the Deceased’s capacity is plainly irrelevant.  And if the Defendant is relying on the medical evidence to establish the capacity of the Deceased in understanding the transaction itself, the court had to consider the proportionality and prejudice to the Plaintiff. Since the Deceased had passed away, the Plaintiff is prejudiced and the medical evidence should not be allowed to be admitted.

10.Mr. Cheung for the Defendant submitted that the Defendant had answered the Plaintiff’s request for medical records (page 160 of Bundle) and had provided the same to the Plaintiff.  If the Plaintiff found the medical records disclosed so far are not sufficient, application for specific discovery can be made.  Dr. Cheung’s Report is relevant to the mental condition of the Deceased and tends to show how likely the Deceased is being affected by the misrepresentation.  The Plaintiff is able to obtain advice from its own doctor, Dr. Singer to comment on the medical report as revealed from the Affirmation in support of this application (page 134-135 of Bundle).

11.Having heard the argument, I am satisfied that medical evidence regarding the Deceased’s mental capacity to enter into the sales agreement should be admitted.  It is clear from the pleadings that this is a live issue in this case.  Whether the Deceased is suffering from dementia and whether he had the ability to understand the transactions has to be determined at trial.  Medical evidence as to his mental condition is a must.

12.Whether the Deceased had mental incapacity and whether there is evidence to prove that the Plaintiff had knowledge of the same is two separate issues to be established at trial.  The medical evidence may not be able to show the latter, but is certainly capable in resolving the former.  By finding that the Defendant is not able to establish knowledge on the part of the Plaintiff and disallowed the medical evidence to be adduced at this stage is a pre-judge of the issue usurping the function of the trial court.

13.Even though the deceased is no longer available for medical examination or cross-examination in court, the Plaintiff can still provide its own medical expert with all the medical records of the Deceased for advice and comments in order to challenge the findings in Dr. Cheung’s Report.  Whatever prejudice likely to be caused to the Plaintiff is cured.

THE VALUATION REPORT

14.Mr. Chain submitted that the market value of the Property, i.e. quantum, is never an issue in this case.  Even if it is, Mr. Lo’s Report has been prepared on the wrong basis, i.e. a valuation not without vacant possession (page 295 and 300 of Bundle).  Since the sale between the Plaintiff and the Deceased is one without vacant possession (page 234 of Bundle), Mr. Lo’s Report is of no probative value, irrelevant and inadmissible (Man Ping Nam and another v Man Fong Hang [2006] 4 HKLRD 484).  Again, if the Defendant is relying on the Deceased’s understanding of the transaction which meant to be a plea of mistake, the defence is again not available since the Defendant had not pleaded the knowledge of the mistake on the part of the Plaintiff.  Hence, the valuation report is irrelevant and should be inadmissible.

15.Mr. Cheung submitted that it is the Defendant’s case that the Deceased only intended to sell the small portion but not the whole lot. The price offered by the Plaintiff represented the value of the whole lot or merely a part of it will shed light on what the parties actually intended to buy or sell.  How much the Property worth at the material time is clearly relevant.  Knowledge of the Plaintiff had already been pleaded in paragraph 16 of the Defence (page 29 of Bundle).  The case of Man v Man quoted by the Plaintiff is not on admissibility of expert reports but rather the Court of Appeal found there is insufficient evidence to come to the conclusion made by the trial judge.  There is also no evidence in Man v Man to show how much would be required to obtain vacant possession.  In this case, evidence will come out at trial as to how vacant possession can be obtained and the expert can give further evidence on this issue.

16.I accept Mr. Chain’s contention that Mr. Lo’s Report has no probative value since it is not a valuation of the Property without vacant possession.  But this is a non-point since the Master’s Order is for parties to adduce expert evidence by way of a single joint expert report.  So the issue is whether the valuation of the Property is relevant to any issue in this case.

17.The defence involved an allegation that the Deceased only intended to sell a portion of the land and not the whole lot.  I agree with Mr. Cheung that if the value of the Property at the time of sale is different from the agreed price in the sale, this may be relevant evidence to show the actual intention in the sale.  This is not related to the issue of quantum but to the intention of the Deceased at the time of sale.  This is directly relevant to the defence raised.

18.Given the ruling that Mr. Lo’s Report is inadmissible and the objective of promoting a sense of reasonable proportion and procedural economy in the conduct of proceedings under the CJR, a joint valuation report should be prepared instead of each party adducing their own.  Having said so, I agreed with Mr. Chain that the joint valuation report to be admitted should be done on the basis of without vacant possession in line with the sales agreement.

CONCLUSION

19.I found that medical evidence by way of expert report is relevant to the issue as to whether the Deceased had the mental capacity to enter into the sales agreement and the valuation report is relevant to the issue as to whether the Deceased intended to sell the Property or just a portion of it.  Having satisfied that these evidence are relevant to the issues in this case, medical report and valuation report should be admissible.  I found the Master’s Order cannot be faulted except further qualification as to the basis of valuation should be specified.

20.Given the dates for compliance of the Master’s Order had already lapsed, I direct that parties do write to the CMC Master within 14 days by way of joint written application stating the directions required for the obtaining of the medical report as well as the valuation report.

The Order

21.It is ordered that :-

a. The appeal is dismissed and paragraph 1-4 of the Master’s order dated 22 February 2011 do stand except for the words “with vacant possession at the time of sale” to be inserted at the end of paragraph 3 and the words “on quantum” be deleted from paragraph 3;

b. parties do write to the CMC Master within 14 days by way of joint written application stating the directions required for the obtaining of the medical report as well as the valuation report;

c. Costs order nisi that costs of and occasioned by this appeal be to the Defendant with Certificate for Counsel, to be taxed if not agreed.  Unless any of the parties applies by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.

Mr. Benjamin Chain instructed by Messrs Andrew Chan & Co. for the Plaintiff

Mr. Kam Cheung instructed by Messrs Chiu, Szeto & Cheng for the Defendant