Polestar Assets Ltd v. Anton Capital Ltd and Another

HCA1836/2009
& HCMP1883/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1836 OF 2009

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BETWEEN

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AND

MISCELLANEOUS PROCEEDINGS NO. 1883 OF 2010

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(Consolidated by the order of the Honourable Mr Justice Reyes
dated the 8^th day of October 2010)

Before : Deputy High Court Judge Cheng, SC in Court

Dates of Hearing : 18–21, 26–28 April, 6–7 May and 2 July 2011

Date of Ruling: 28 December 2011

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RULING

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1.By an application dated the 9 September 2011, the plaintiff sought to adduce two new documentary evidence as well as to recall Mr Aggarwal for further cross-examination. The two documentary evidence is the judgment of Deputy High Court Judge Au-Yeung in HCA1061/2011 and charge sheets under which criminal charges were laid against Mr Aggarwal under ESCC2673/2011.

2.By a direction issued on 26 September 2011, the parties put in full submissions.  The plaintiff's submissions was made on 3 October 2011, the defendant on 17 October 2011 and the reply of the plaintiff on 24 October 2011.

3.For the reasons set out below, I would admit the two new documentary evidence.  I do not need to rule on the application of the plaintiff to recall Mr Aggarwal in the light of what is set out in the plaintiff’s reply :

“The intention to recall Mr Aggarwal is to give him a chance to comment on the bad character evidence to be adduced. This is now unnecessary given his formal admission as contained in Deputy High Court Judge Au-Yeung’s Judgment is clear and unequivocal. The authenticity of the admission and the truth of its contents are presumed to be believed.”

4.On that basis, the plaintiff no longer seeks to call Mr Aggarwal but leave it to the defendants to decide whether or not to recall him.

5.The parties do not dispute the principles set out in Yukio Takahashi v Cheng Zhen Shu, unrep., HCA2115/2004 (30 May 2008) citing Urban Transport Authority of New South Wales v Nweiser [1992] 28 NSWLR 471.  The authorities suggested that it is permissible to reopen the evidence even after the close of the parties case in the interests of justice.

6.In the judgment of Fung J in Yukio Takahashi :

“6. In Urban Transport Authority of New South Wales v Nweiser [1992] 28 NSWLR 471, Clark JA considered the following factors to be relevant in an application to re-open the evidence:

(1) The question of whether to open the case will be considered in the interest of justice.

(2) Tactical decision of not calling particular evidence is an important consideration but not decisive, and the application they more likely to be refused.

(3) If the evidence were not called due to mistake or lack of foresight, the application should normally be granted.”

7.The charge and conviction of Mr Aggarwal was not in existence at the time of the close of the parties’ case and it came into being before judgment is rendered.

8.The general principles governing when new evidence should be admitted are set out in Ladd v. Marshall and explained also in Phipson on Evidence 17^th edition at paragraphs 13-01. 

9.In paragraph 22-02 of Phipson on Evidence, the learned author highlights two considerations in deciding whether or not to admit evidence, one is “issue relevance” and the other “credibility relevance”. 

10.Whether or not issue relevance is established is a question of the position of the parties in their pleadings.  

11.On the assumption that the new evidence that is sought to be adduced to satisfy the issue relevance criteria, there are still considerations before such evidence could be admitted.  My attention is drawn particularly to the proposition that “If the evidence in question forms part of the transaction which is at issue, the res gestae principle would allow that evidence to be adduced” but not otherwise, argues the defendants.

12.In paragraph 22-07 of Phipson on Evidence, the learned author pointed out that as a matter of case law, the old general rule of exclusion of similar fact evidence have been overtaken by cases which suggest that where evidence is admissible as long as it satisfies the ordinary test of legal relevance.  The court however retains its judicial discretion to exclude admissible bad character evidence, and this is particularly so when new evidence is sought to be adduced after close of parties’ case.

13.The defendants drew my attention to the case of Mood Music Publishing Co. Ltd v De Wolfe Ltd.  Lord Denning at page 127 stated :

“In civil cases the courts will admit evidence of similar facts if it is logically probative, that is, if it is logically relevant in determining the matter which is in issue: provided that it is not oppressive or unfair to the other side: and also that the other side has fair notice of it and is able to deal with it.”

14.In a later case of O’Brien v Chief Constable of South Wales Police [2005] 2 A.C. 534 at paragraph 53, Lord Phillips of Worth Matravers said :

“I would simply apply the test of relevance as the test of admissibility of similar fact evidence in a civil suit. Such evidence is admissible if it is potentially probative of an issue in the action.”

15.As to the exercise of the discretion of whether or not to allow it to be admitted, his Lordships continued :

“Evidence of impropriety which reflects adversely on the character of a party may risk causing prejudice that is disproportionate to its relevance, particularly where the trial is taking place before a jury. In such a case the judge will be astute to see that the probative cogency of the evidence justifies this risk of prejudice in the interests of a fair trial.

Equally, when considering whether to admit evidence, or permit cross-examination, on matters that are collateral to the central issues, the judge will have regard to the need for proportionality and expedition.  He will consider whether the evidence in question is likely to be relatively uncontroversial, or whether its admission is likely to create side issues which will unbalance the trial and make it harder to see the wood from the trees.”

16.The balancing of the factors in exercising the discretion is summarised in paragraph 22-08 of Phipson on Evidence as :

“… Though expressd in the broadest terms in that rule [CPR r.32.1(2) of the Civil Procedure Rules 1998 of England and Wales], the source of that discretion is the court's power to control its own proceedings, so it may be supposed that the emphasis, in future, will be no less upon trial efficiency than upon the interests of the party potentially traduced. But the balance between proof and prejudice remains an element, especially in civil jury trials.”

17.However, the evidence that the plaintiff sought to adduce, namely the judgment against Mr Aggarwal and the charge sheets laid against him seems to be premised on the proposition that such evidence is relevant to the credibility of Mr Aggarwal as his convictions as well as admissions there bears close resemblance to his conduct in the present case. 

18.As to credibility evidence, the relevant passages in Phipson on Evidence are that set out under the heading of “Opponent’s witness”.  The general principle, as the learned author explained, is that such a witness may always be challenged as to his credibility by reference to material which shows him to be of bad character, as well as by reference to other material.  Where a witness is sought to be imputed by reason of a crime of which the witness has been convicted, as in this case.

19.In Hobbs v Tinling and Co. Ltd, the considerations for exercising the discretion to admit discreditable acts such as convictions are set out.

“(1) Such questions are proper if they are of such a nature that the truth of the imputation conveyed by them would seriously affect the opinion of the Court as to the credibility of the witness on the matter to which he testifies.

(2) Such questions are improper if the imputation which they convey relates to matters so remote in time, or of such a character, that the truth of the imputation would not affect, or would affect in a slight degree, the opinion of the Court as to the credibility of the witness on the matter to which he testifies.

(3) Such questions are improper if there is a great disproportion between the importance made against the witness’s character and the importance of his evidence.”

20.In paragraph 22-16, learned author of Phipson on Evidence stated the following, Sankey LJ’s dicta in Hobbs v Tinling & Co. Ltd “have compelling force for convictions, no less than for other elements of bad character of the witness in a civil case.”

21.I accept the defendant's submissions pointing out that insofar as the pleaded issues are concerned, the application of the plaintiff does not satisfy the issue relevance test.  The conviction and charges in the other case do not form part of the transaction which is at issue here.  It cannot be said to be potentially probative of any pleaded issue in this case.  In so concluding, I am not finding that the pleaded case against Mr Aggarwal of misrepresentation and concealment of the body of the Anton Agreement have not been established as asserted by the defendants in these submissions.  This is a matter that will have to be considered in the judgment itself.

22.However I am persuaded by the plaintiff’s argument that the judgment and charge sheets against Mr Aggarwal would be relevant to his credibility and thereby allowing me to form a better and informed view on the weight of the evidence of Mr Aggarwal.  The need to assess the weight of the evidence of Mr Aggarwal would clearly be in the interests of justice bearing in mind the highly contentious facts in this case.

23.As to whether I am actually influenced by these judgment and charge sheets will be a matter that will be dealt with in the judgment of the substantive disputes.  I am now only concerned with whether or not my discretion is to be exercised in allowing the admissibility of the judgment and the charge sheets.

24.To exclude such evidence that have come into being before judgment is delivered would, in my view, be adopting a blinkered approach.  In the premises, for the reasons set out above, I would admit the judgment and charge sheets into evidence of this trial.

25.From the detailed submissions of the parties on this issue, the parties have, it seems to me, adequately set out their submissions they would seek to make based on such new evidence if admitted.  I therefore do not propose to give further directions for the parties to make submissions on the evidence.

26.I thereby order and direct that the judgment and the charge sheets mentioned above be admitted in.

Mr Rimsky Yuen, SC and Mr Jeffrey Chau, instructed by Messrs Hau, Lau, Li & Yeung, for the Plaintiff in HCA1836/2009 and the Applicant in HCMP1883/2010

Mr Paul Mak, instructed by Messrs Hampton, Winter & Glynn, for the 1^st and 2^nd Defendants in HCA1836/2009 and the 2^nd Respondent in HCMP1883/2010.