Foelan Wong v. Wong Tze Kin

DCCJ 2650/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2650 OF 2011

________________________

________________________

________________________

RESAONS FOR DECISIONS

________________________

Background

1.In this case, the plaintiff paid $120,000 to the defendant in late September 2010.  The plaintiff said that it was for fees (the “Fees”) to obtain credit facilities called Equity Line of Credit (the “ELC”) for the purpose of resuming listing of a company called PAQ International Holdings Ltd (“PAQ”) at the Alternative Investment Market in London (the “Relisting Project”).

2.The plaintiff’s case was that he and the defendant would share the Fees equally. Each of them should put up $60,000.  The plaintiff paid his share and advance $60,000 for the defendant’s share.  The total of the Fees and the remittance charge was $116,750.  The plaintiff’s share was $58,375.  There was a balance of $1,625 out of the plaintiff’s share paid.  The plaintiff claims against the defendant for repayment of the said advance of $60,000 and the balance of his payment for his share but he confined his claim to $61,500.

3.The defendant agreed that the parties were to bear the Fees and the remittance charge in equal shares.  The defendant’s case was that $60,000 out of the said $120,000 was to pay the plaintiff’s share for the Fees.  For the remaining $60,000, the defendant said that $50,000 was for the plaintiff’s share of investment in a deal of gold bar (the “Gold Deal”) and $10,000 was for sundries expenses paid by the defendant for the Relisting Project.  The defendant said that all outstanding items between the parties had been settled in October 2010 when he paid $30,000 to the plaintiff by cheque together with some cash payments.  He said that he owed no further moneys to the plaintiff.

4.This Action was set down for a 4-day trial before me commencing on 3 July 2013.

Matters to be determined before trial

5.In the pre-trial review before me held on 3 May 2013, the parties informed me that the plaintiff might raise preliminary issues on authenticity of documents.  I gave directions for the parties to lodge their respective submissions in the event that there were such preliminary issues.

6.The plaintiff raised a preliminary issue on admission of two documents as evidence at trial and asked for them to be excluded from evidence of this case before the commencement of the trial.  The documents concerned were an “Irrevocable Master Fee Protection Agreement” and a “Sale & Purchase Agreement” (the “Gold Deal Documents”).  Both documents were produced by the defendant and said to be related to the Gold Deal.  Both parties lodged their submissions on the preliminary issue.

7.On 25 June 2013, the defendant took out a summons (the “Summons’) for leave to file and serve a further supplemental witness statement of the defendant (the “3^rd Supplemental Statement”).  Various documents were annexed to the 3^rd Supplemental Statement (the “Latest Documents”).

8.The defendant filed his 4^th supplemental list of documents and his 3^rd supplemental hearsay notice both on 20 June 2013 to cover the Latest Documents.  The defendant put in a further trial bundle (“Bundle D2”) to include the Latest Documents, two letters between the parties’ solicitors and documents annexed to the plaintiff’s reply dated 24 February 2012 which had previously been struck out by the order dated 12 June 2012.

9.The plaintiff opposed the Summons and the inclusion of Bundle D2 in the trial bundles.  The plaintiff also took issue on authenticity of four documents included in the defendant’s 4^th supplemental list of documents, namely a document entitled “Non-Disclosure and Non-Circumvention Agreement” and three telephone bills (the “Objected Documents”).  The plaintiff also asked for the Objected Documents to be excluded from evidence of this case before the commencement of the trial.

10.Accordingly, the court was asked to deal with the following matters before the commencement of the trial:

(1) Whether leave should be granted for the defendant to adduce the 3^rd Supplemental Statement at the trial?

(2) Whether the defendant might rely on documents included in Bundle D2 at the trial?

(3) Whether I should before the commencement of the trial exclude the Gold Deal Documents and/or the Objected Documents as evidence for the trial?

Decisions

11.I heard the parties’ submissions on the above matters before the commencement of the trial and made the following rulings on 3 July 2013:

(1) I granted leave for the defendant to file and serve the 3^rd Supplemental Statement and to rely on the same at the trial.  I also grant leave for the plaintiff to lead evidence-in-chief on matters raised in the 3^rd Supplemental Statement.

(2) I directed that the defendant might rely on documents included in Bundle D2 at the trial.

(3) I decline to exclude before the commencement of the trial the Gold Deal Documents and/or the Objected Documents (except the Non-Disclosure and Non-Circumvention Agreement) as evidence of this case.

12.I ordered the defendant to pay the plaintiff’s costs for the Summons and the costs for arguing the inclusion of Bundle D2 for the trial.

13.I ordered the plaintiff to pay the defendant’s costs for arguing the exclusion of the Gold Deal Documents and/or the Objected Documents from evidence of this case before the commencement of the trial.

14.I had reserved my reasons for my said decisions which I now set out below.

Development of the proceedings

15.Before I deal with the parties’ submissions on the aforesaid matters, it will be helpful to briefly set out the development of this case to put the issues concerned in context.

16.The plaintiff issued the writ on 14 July 2011 without legal representation claiming for $270,000.  The writ was endorsed with a statement of claim.

17.The defendant filed his defence on 24 August 2011.

18.The plaintiff filed his reply on 14 September 2011 (the “First Reply”).

19.The plaintiff filed a document entitled “此信是回覆區域法院雷健文聆案官席前内庭審訊 - 命令，位[sic]於2012年1月5日發出” (the “Second Reply”).  The Second Reply had eight attachments (the “Attachments”).

20.Upon the application of the defendant, the court had on 12 June 2012 struck out the Second Reply as well as part of the statement of claim and part of the First Reply.

21.On 19 December 2011, pursuant to Order 18 rule 22 of The Rules of the District Court (the “Rules”), the court directed the parties to file and serve their respective statement of issues in dispute on or before 21 May 2012.  No statements of issues in dispute were filed by the parties by 21 May 2012.  The court then on 13 June 2012 directed the parties to filed joint statement of issues in dispute on or before 22 August 2012.  No joint statement of issues in dispute was filed by 22 August 2012.

22.On 19 December 2011, the court also directed the parties to file and serve witness statements on or before 16 April 2012.  No witness statements were filed by 16 April 2012.  On 13 June 2012, the court directed the parties to file and serve their witness statements on or before 25 July 2012 which time was subsequently extended to 2 August 2012.

23.On 25 July 2012, the plaintiff filed his witness statement.  On 2 August 2012, the defendant filed his own witness statement and the witness statement of Mr Yau Kwong Chi Kelvin (“Mr Yau”).

24.On 3 October 2012, the plaintiff’s solicitors filed their Notice to Act.

25.On 25 October 2012, the plaintiff filed his amended statement of claim which was a redraft of the whole statement of claim.  On 13 December 2012, the defendant filed its amended defence which was also a redraft of the whole defence.  The plaintiff filed the amended reply on 30 January 2013 which was a complete redraft of the First Reply.

26.On 24 October 2012, when the court granted leave for the parties to amend their pleadings, the court also directed the parties to serve and exchange supplemental or further witness statements on or before 16 January 2013.  The parties did not file their respective supplemental witness statements until 19 March 2013. 

27.On 24 October 2012, the court also directed the parties to file and serve statements of issues in dispute on or before 6 February 2013.  The plaintiff filed his statement of issues in dispute on 26 March 2013 setting out 16 issues. The defendant filed his statement of issues in dispute on 27 March 2013 setting out 5 issues.

28.On 28 March 2013, the court directed the parties to file and serve an agreed statement of issues in dispute on or before 25 April 2013.  The court also set down the trial to commence on 3 July 2013 and fixed the pre-trial review for 3 May 2013.

29.On 25 April 2013, the parties filed the agreed statement of issues in dispute setting out 12 agreed issues and 5 non-agreed issues.

30.On 2 May 2013, the parties issued a consent summons for filing and serving of further witness statement and supplemental witness statement by the plaintiff and supplemental witness statements of the defendant in reply.  The said consent application was approved by me at the pre-trial review hearing held on 3 May 2013.  The plaintiff filed his supplemental witness statement on 24 May 2013.  The defendant also filed his 2^nd supplemental witness statement and the supplemental witness statement of Mr Yau on the same day.

31.At the pre-trail review held on 3 May 2013, I discussed with the parties the issues in dispute.  The parties agreed that the issues in dispute could be narrowed down to three issues.  On 30 May 2013, the parties filed an agreed statement of issues in dispute setting out the three issues identified in the pre-trial review as follows:

“(1) Whether the Plaintiff agreed with the Defendant to invest $50,000 into the Gold Deal?

(2) What is the purpose of $30,000 paid by the Defendant to the Plaintiff?

(3) Whether there was any balance cash payment?”

32.On 20 June 2013, the defendant filed the 4^th supplemental list of document disclosing the Latest Documents and the 3^rd supplemental hearsay notice covering the Latest Documents.

33.On 25 June 2013, the defendant took out the Summons. 

The Summons

34.The Summons was taken out eight days before the commencement of the trial.  By the Summons, the defendant sought leave to file and serve the 3^rd Supplemental Statement.

35.Mr Tsoi represented the defendant informed me that draft of the 3^rd Supplemental Statement had been sent to the plaintiff on 19 June 2013.  The defendant sought the plaintiff’s consent for his application.  The plaintiff refused to give consent on the ground that the reasons put forward by the defendant were not valid reasons.

36.Mr Tsoi said that at the pre-trial review, the parties had agreed to the three issues in dispute.  The 3^rd Supplemental Statement aimed at focusing on these issues and putting together evidence relating to these issues.  He submitted that the 3^rd Supplemental Statement was prepared for the just and expeditious disposal of the issues.  It had also set out the background of this case in context.  Mr Tsoi said that the matters covered by the 3^rd Supplemental Statement were not new matters.  He submitted that these matters might also be adduced during examination-in-chief of the defendant.  Granting the defendant’s application would help to save the time for examination-in-chief of the defendant.

37.Mr Tsoi said that the plaintiff had previously raised requests for further and better particulars of defence on 15 March 2013 and had raised requests for interrogatories to the defendant on 18 March 2013.  Although the plaintiff had not pursued these requests further, the 3^rd Supplemental Statement would clarify the defendant’s case which would also be useful to the plaintiff for cross-examining the defendant.

38.Mr Wong for the plaintiff opposed to the application.  He said that the defendant could have applied earlier.  The defendant had not provided any valid reasons for such late application.  He submitted that the fact that the issues in dispute were finalized at the pre-trial review should not be accepted as a valid reason for adducing supplemental witness statement, otherwise a dangerous precedent would be set.

39.Mr Wong did not dispute that draft of the 3^rd Supplemental Statement was received by the plaintiff’s solicitors on 19 June 2013 but said that the plaintiff’s solicitors did not have sufficient time to take instructions thereon as Mr Wong was in court the whole week after 19 June 2013.  He submitted that allowing the defendant to file and serve the 3^rd Supplemental Statement would cause prejudice to the plaintiff as the plaintiff was caught by surprise by new matters raised in the 3^rd Supplemental Statement such as alleged conversations and telephone records to which the plaintiff did not have the opportunity to reply.

40.Mr Wong said that the defendant had previously refused to provide the particulars requested.  The defendant might not now using the requests as ground for his present application.  He submitted that such late application did not conform to the underlying objectives of the Civil Justice Reform (the “CJR”). 

41.Paras 2 to 12 of the 3^rd Supplemental Statement deal with the plaintiff’s allegation that the defendant had been cheating him in relation to the ELC. Paras 13 to 18 deal with the payment of the Fees.  Paras 19 to 22 deal with the background of the Gold Deal.  Paras 23 to 29 deal with the alleged agreement for the plaintiff to invest in the Gold Deal.  Paras 30 to 38 are on matters occurred after delisting of PAQ.

42.To determine this application, I have to consider whether justice will be better served if leave is granted or refused and whether a satisfactory explanation for such late application has been provided by the defendant.

43.The main issue in dispute between the parties was whether the plaintiff had agreed to invest $50,000 in the Gold Deal as alleged by the defendant.  Particulars of how the alleged agreement was reached are of course relevant.  The defendant’s case was that part of the $120,000 paid by the plaintiff to the defendant was the plaintiff’s investment in the Gold Deal.  The plaintiff’s case was that the whole of $120,000 was to pay the Fees.  Details of the parties’ arrangement for payment of the Fees are also relevant.  The parties’ knowledge in ELC is relevant background.   

44.Both parties alleged various oral communications between them in support of their respective case.  Credibility of the parties is in issue.  The parties’ knowledge to the transactions concerned, particulars of the alleged verbal communications and the parties’ conduct both before and after the forming of the alleged verbal agreements are relevant.

45.I am satisfied that the matters raised in the 3^rd Supplemental Statement are relevant for determination of the disputes between the parties. The issue is whether justice will be better served with or without it.

46.The 3^rd Supplemental Statement has not raised new matters.  It only elaborates matters previously raised and puts them in a more organized way.  If the defendant’s application is not granted, the defendant may seek to adduce the evidence by way of clarification at examination-in-chief.  This will no doubt lengthen the time for the defendant’s examination-in-chief.  I shall also expect arguments between the parties in the course of the trial on whether the defendant is clarifying his evidence or leading new evidence when the defendant attempts to give evidence on matters covered by the 3^rd Supplemental Statement at his examination-in-chief.  Time will also be spent by the parties to argue on whether leave shall be granted under Order 38 rule 2A(7)(b)(i) of the Rules for the defendant to amplify his witnesses statements previously filed. 

47.The matters raised in the 3^rd Supplemental Statement were mainly details and particulars of matters happened between the plaintiff and the defendant. Draft of the 3^rd Supplemental Statement had been sent to the plaintiff’s solicitors on 19 June 2013, ie two weeks before the trial.  In view of the nature of the matters raised, I am of the view that the plaintiff’s solicitors should have sufficient time to take instructions from the plaintiff on these matters.  The fact that the trial counsel was engaged in other court hearings in between would not hinder the plaintiff’s solicitors doing their job.

48.I agree that it might be too rush for the plaintiff to prepare further witness statement to deal with matters raised in the 3^rd Supplemental Statement.  This can be remedied by allow the plaintiff to adduce evidence to deal with those matters at his examination-in-chief.  In such case, I do not see any prejudice causing injustice to the plaintiff in granting the defendant’s application.

49.The application was made on the first day of the trial.  None of the parties raised any possibilities of postponing the trial if the defendant’s application is granted.  In view of the nature of the matters raised in the 3^rd Supplemental Statement, I do not think that any application for postponing the trial can be justified.  In such case, the trial will not be affected by granting the defendant’s application.

50.The underlying objectives of the CJR as set out in Order 1A rule 1 of the Rules includes, inter alia, the following:

(1) to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court;

(2) to ensure that a case is dealt with as expeditiously as is reasonably practicable;

(3) to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings; and

(4) to ensure fairness between the parties.

51.Order 1A rule 2(2) of the Rules further provides that:

“(2) In giving effect to the underlying objectives of these rules, the Court shall always recognize that the primary aim in exercising the powers of the Court is to secure the just resolution of disputes in accordance with the substantive rights of the parties.”

52.In Chan Wing Cheung, Allan v Ho Shu Yee Susana, unreported, CACV 393/2004 (decision on 10 January 2005), where Ma CJHC (as he then was) said at para 9(4) that:

“In any event, where an indulgence is sought from the Court, it would be a rare case indeed that this would be given, even on terms as to costs, without a satisfactory explanation being given to justify the grant of the indulgence.”

53.This application is no doubt a late application.  Mr Tsoi’s explanation was that the agreed issues in dispute were finalized only at the pre-trial review held on 3 May 2013.  The defendant was then more focused in preparing his case for trial and considered that a supplemental witness statement from the defendant focusing on the agreed issues in dispute would assist the just and expeditious disposal of the issues.

54.From the section of “development of the proceedings” set out above, it can be seen that the case for trial was not started to be formulated until 25 October 2012 when the plaintiff amended his statement of claim by deleting the whole of his original statement of claim and rewriting a new statement of claim.  Amendments to pleadings, all by deleting the whole of the original pleadings and rewriting new pleadings, were completed by the parties at the end of January 2013.  The case reached trial from there in about five months.

55.The parties first filed their respective statement of issues in dispute at the end of March 2013 despite various previous orders requiring them to file the same at earlier dates.  As at the end of March 2013, ie about three months before the trial, the parties had different perception on issues in dispute in this case.  The plaintiff identified 16 issues.  The defendant identified five issues.  This remained the position when the trial date was fixed.

56.The situation did not improve much with the assistance from the court in the case management conference held on 28 March 2013.  The agreed statement of issues filed by the parties on 25 April 2013 identified 12 agreed issues and the parties still could not agree on 5 issues.  The trial was then only two months away.

57.At the pre-trial review held on 3 May 2013, with the assistance of trial counsel, the court identified three issues being issues in dispute which were agreed by the parties.

58.It seems that the allegation of various oral agreements and arrangements alleged by both parties had side tracked the attention of their legal representatives causing them losing focus on the core issues.  In such case, it is understandable that the previous witness statements filed might not be focusing enough to present the parties’ evidence in the most efficient way.

59.I agree with Mr Wong that it would set a dangerous precedent if supplemental witness statement would be allowed as a matter of routine after framing of issues.  However, in this special case when both parties had difficulties to reach consensus on issues in dispute when the trial was only two months away, I am prepared to view the defendant’s application from a more sympathetic angle and accept Mr Tsoi explanation for the late application.

60.The matters covered by the 3^rd Supplemental Statement are relevant to the determination of the issues in dispute.  They are not new matters.  They are particulars of matters raised in the pleadings or previous witness statements.  The plaintiff had been provided with copy of the draft statement two weeks before the trial.  Although the plaintiff did not have the chance to file further witness statement in reply, he could adduce evidence to deal with matters raised in the 3^rd Supplemental Statement in his examination-in-chief.  The trial date would not be affected.  In fact, I was of the view that the 3^rd Supplemental Statement might help to reduce the length of trial.

61.After considering the whole circumstances of the case, I was of the view that justice would be administered in a more efficient way by allowing the defendant to file and serve the 3^rd Supplemental Statement and allowing the plaintiff to adduce evidence to deal with matters raised therein in his examination-in-chief.

Bundle D2

62.Bundle D2 consisted of the following three categories of documents:

(1) the Latest Documents;

(2) the Attachments; and

(3) two letters between the parties’ solicitors.

63.Mr Wong opposed to include Bundle D2 in the trial bundles on the grounds that the documents were lately disclosed and the plaintiff did not have sufficient time to verify them.

64.Mr Tsoi said that the Attachments were attachments to the Second Reply and some of them, although not all, had been disclosed by the plaintiff and included in other trial bundles.  This was confirmed by Mr Wong.  Mr Tsoi said that putting the Attachments together in Bundle D2 was to give the court a full picture of the documents attached to the Second Reply.

65.Mr Wong confirmed that the Attachments were attachments attached to the Second Reply.

66.The Latest Documents are documents annexed to the 3^rd Supplemental Statement which had been provided to the plaintiff’s solicitors on 19 June 2013 together with the draft statement.  They consist of 14 items of which 9 were emails exchanged between the parties which are nothing new to the plaintiff.

67.The remaining five documents in the category of the Latest Documents are the followings:

(1) Non-Disclosure and Non-Circumvention Agreement;

(2) three telephone bills of the defendant; and

(3) AFG Sample Consultancy Agreement.

68.The defendant annexed the Non-Disclosure and Non-Circumvention Agreement to the 3^rd Supplemental Statement to explain why he did not show documents relating to the Gold Deal to the plaintiff.  He produced his telephone bills to prove he had made various telephone calls to the plaintiff.  He produced the AFG Sample Consultancy Agreement to show that fee was payable for the ELC.  A similar, though not identical, consultancy agreement signed by PAQ had been included in Bundle B of the trial bundles (pp 197 to 202).  This is not a completely new document to the plaintiff.

69.Mr Wong confirmed that the plaintiff would take issue on authenticity of the Non-Disclosure and Non-Circumvention Agreement and the three telephone bills.  I do not see much can be done by the plaintiff to verify these documents.  As the plaintiff would take issue on authenticity of these documents, the defendant would have to prove their authenticity in any event.

70.The other documents in Bundle D2 are not new documents to the plaintiff, they were documents attached by the plaintiff to the Second Reply and exchanges between the parties’ solicitors.  As I have granted leave for the defendant to file and serve the 3^rd Supplemental Statement, I see no reason for not allowing the defendant to refer to documents annexed to the 3^rd Supplemental Statement at the trial.  I allow Bundle D2 to be included in the trial bundles.

Exclusion of documents in the trial

71.The plaintiff in the preliminary issue raised asked me to exclude the Gold Deal Documents.  At the hearing of the preliminary issue, Mr Wong confirmed that the plaintiff asked to extend the preliminary issue to cover the Objected Documents.  Mr Tsoi confirmed that he would not rely on the Non-Disclosure and Non-Circumvention Agreement at the trial.  In such case, it is not necessary for me to deal with the Non-Disclosure and Non-Circumvention Agreement in the preliminary issue.

72.The preliminary issue only concerned the following documents:

(1) the Irrevocable Master Fee Protection Agreement dated 24 September 2010 (the “Master Fee Agreement”);

(2) the Sale & Purchase Agreement for Gold Bars also dated 24 September 2010 (the “S&P Agreement”); and

(3) three telephone bills of the defendant dated 7 October 2010, 7 January 2011 and 7 February 2011 (the “Telephone Bills”)

73.The defendant included the Gold Deal Documents, ie the Master Fee Agreement and the S&P Agreement, in the supplemental list of documents dated 7 March 2013 and in the hearsay notice dated 27 March 2013. The plaintiff had on 25 April 2013 pursuant to Order 27 rule 4(2) of the Rules served a notice disputing the authenticity of the Gold Deal Documents.

74.Order 27 rule 4(2) of the Rules provides that:

“(2) If before the expiration of 21 days after inspection of the documents specified in a list of documents or after the time limited for inspection of those documents expires, whichever is the later, the party on whom the list is served serves on the party whose list it is a notice stating, in relation to any document specified therein, that he does not admit the authenticity of that document and requires it to be proved at the trial, he shall not be deemed to make any admission in relation to that document under paragraph (1).”

75.The defendant included the Telephone Bills in the 4^th supplemental list of documents and 3^rd supplemental hearsay notice both dated 20 June 2013.  The time for the plaintiff to serve any notice under Order 27 rule 4(2) would not expire until after the commencement of the trial.  Mr Wong confirmed at the hearing for the preliminary issue that the plaintiff also disputed the authenticity of the Telephone Bills.

76.In such case, the defendant has to prove the authenticity of the Gold Deal Documents and the Telephone Bills at trial.  The plaintiff asked the court to exclude the aforesaid documents as evidence at trial before the commencement of the trial.

77.Mr Wong while agreed that the documents concerned were not per se inadmissible documents, submitted that I should exercise my discretion to exclude these documents from evidence of this case before the trial was commenced.

78.He submitted that the documents were not pleaded in the amended defence.  It was unclear whether the Gold Deal Documents were related to the Gold Deal.  These documents were not referred to in the defendant’s witness statement filed on 2 August 2012.  They were referred to only in the defendant’s supplemental witness statement filed on 19 March 2013. He said that the plaintiff had denied the Gold Deal.  In his skeleton submission on the preliminary issue, he submitted that:

“It would be unjust to force P to admit evidence in support of the existence of the alleged Gold Deal. P is entitled and has every right to put D on strict proof regarding, the authenticity and accuracy of Item 17 [the Master Fee Agreement] and 18 [the S&P Agreement].”

79.Mr Wong submitted at the hearing that in the supplemental witness statement of the defendant, the defendant should have provided information to prove the authenticity of the Gold Deal Documents. However, the defendant had failed to state the place at which these documents were signed; how and by whom they were signed.  The defendant had also failed to explain the amendments to the dates of the Master Fee Agreement.  Mr Wong submitted that putting the defendant’s case to the highest, the defendant still failed to prove the authenticity of the Gold Deal Documents.

80.Mr Wong further submitted that other than the purported signature of the defendant on page 5 of the Master Fee Agreement, the rest of the Master Fee Agreement and the S&P Agreement were hearsay evidence.  He referred to section 47(1) of the Evidence Ordinance (Cap 8) to submit that the plaintiff had objected to admission of these documents and it could not be seen that the exclusion of these documents would be prejudicial to the interests of justice.  He submitted that the Gold Deal Documents should be excluded under section 47(1) of the Evidence Ordinance.

81.Section 47(1) of the Evidence Ordinance provides as follows:

“(1) In civil proceedings evidence shall not be excluded on the ground that it is hearsay unless –

(a) a party against whom the evidence is to be adduced objects to the admission of the evidence; and

(b) the court is satisfied, having regard to the circumstances of the case, that the exclusion of the evidence is not prejudicial to the interests of justice.”

82.Mr Wong did not make separate submission in respect of the Telephone Bills.  I assumed that his submission in relation to the Gold Deal Documents also applied to the Telephone Bills.

83.Mr Tsoi submitted that the authenticity of the Gold Deal Documents was only collateral to the central issues at trial which was whether the plaintiff had agreed with the defendant to invest $50,000 into the Gold Deal.  Whether there was in actual fact a Gold Deal would only affect the credibility of the parties.  The authenticity of documents relating to the Gold Deal was collateral.

84.Mr Tsoi submitted that the plaintiff had no evidential basis to exclude the admission of the Gold Deal Documents by way of an authenticity challenge as fraud was not pleaded and the plaintiff did not alleged that the Master Fee Agreement was a forged document.  He submitted that the two agreements had to be read together when their dates of execution were considered.

85.Mr Tsoi agreed that credibility of the parties was crucial and it would be in the interests of justice to weight the defendant’s evidence in the light of the documents related to the Gold Deal.  He said that the plaintiff was entitled to cross-examine the defendant over the authenticity of the documents concerned.

86.He submitted that even if the documents concerned were admitted as evidence, whether the contents were true and how much weight would be attached to the documents were still matters to be determined by the court.

87.Mr Tsoi agreed that the S&P Agreement was hearsay evidence but disagreed that the Master Fee Agreement was hearsay as the defendant was one of the parties signing the Master Fee Agreement.  He submitted that in assessing whether the exclusion of a piece of hearsay evidence would be prejudicial to the interests of justice, the court should take into account the matters set out in section 49 of the Evidence Ordinance which included:

(1) whether it would have been reasonable and practicable for the party by whom the evidence was adduced to have produced the maker of the original statement as a witness;

(2) whether the original statement was made contemporaneously with the occurrence or existence of the matters stated;

(3) whether the evidence involves multiple hearsay;

(4) whether any person involved had any motive to conceal or misrepresent matters;

(5) whether the original statement was an edited account, or was made in collaboration with another or for a particular purpose;

(6) whether the circumstances in which the evidence was adduced as hearsay were such as to suggest an attempt to prevent proper evaluation of its weight;

(7) whether or not the evidence adduced by the party was consistent with any evidence previously adduced by the party.

88.He submitted that the defendant had served hearsay notices in relation to the Gold Deal Documents and the Telephone Bills.  The defendant had made it clear that he intended to rely on the documents at trial without calling their makers as witnesses and the plaintiff had not insisted that the defendant should call the makers to give evidence at the trial.

89.Mr Tsoi submitted that the court should before the commencement of the trial admit the documents concerned as evidence at the trial and should give them full weight and needed not wait until “the conclusion of the proceedings” as provided by section 47(2)(b) of the Evidence Ordinance.

90.A document is authenticated by being identified.  How identification is achieved depends on the circumstances. There is no hard and fast rule. (See para 41-07 of Phipson on Evidence 17^th edition 2010).

91.The fact that a document is not referred to in the pleadings is not a ground to exclude the document from evidence.  Not all documents relevant to the case will be referred to in the pleadings.

92.In para 12 of the supplemental witness statement dated 19 March 2013 of the defendant, the defendant stated that:

“On or around 24^th September 2010, the parties to the Gold Deal signed an “Irrevocable Master Fee Protection Agreement” (“Master Agreement”) and a “Sale and Purchase Agreement for Gold Bars” (“SPA”)”.

93.In paras 15 and 36 of the 3^rd Supplemental Statement, the defendant stated that:

“In the next telephone call, the Plaintiff and I agreed to pay the fee to speed up the process. Hence the Term Sheet was issued. All the telephone conversations with the Plaintiff and Mr. Nasir Mogul can be found on my mobile phone bill (see Appendix-7) [telephone bill dated 7 October 2010].” (Para 15)

“My phone records from 1^st January 2010 to 19 January 2010 can be found on my telephone bill (Appendix- 13) [telephone bills dated 7 January 2011 and 7 February 2011].” (Para 36)

94.I agree that the plaintiff is entitled to put the defendant on strict proof regarding the authenticity and accuracy of the Gold Deal Documents and the Telephone Bills.  The plaintiff had by the notice dated 24 April 2013 (filed on 25 April 2013) put the defendant on strict proof regarding the authenticity and accuracy of the Gold Deal Documents.  Mr Wong stated at the hearing that the plaintiff also put the defendant on strict proof regarding the authenticity and accuracy of the Telephone Bills.  However, I do not agree that putting the defendant’s case to the highest, the defendant would not be able to prove the authenticity of the Gold Deal Documents and the Telephone Bills.  The defendant had identified the documents in his witness statements.  Whether the defendant can prove the authenticity of these documents at trial is a matter which will be dealt with after the court has heard evidence from the defendant and submissions from the parties.  As Mr Wong agreed that these documents were not per se inadmissible, I do not see that I shall before hearing any evidence and before the commencement of the trial exclude these documents as evidence on the ground that the defendant will be unable to prove their authenticity.

95.The Gold Deal Documents were documents said to be related to the Gold Deal.  Whether the plaintiff had agreed to invest $50,000 in the Gold Deal was the main issue in this case.  Both parties relied on various oral agreements and oral communications to support their respective case.  The Telephone Bills were evidence on telephone communication between the parties.  These documents are prima facie relevant.  The court has to further assess the relevancy and weight to be attached in the context of how these documents were produced and come to possession of the defendant in the light of evidence to be adduced in the trial.  I am not satisfied at this stage of proceedings, ie before the commencement of the trial, that to exclude these relevant documents are not prejudicial to the interests of justice.

96.I note that section 47(2)(b) of the Evidence Ordinance provides that in the case of civil proceedings other that civil proceedings before a jury, the court may determine whether or not to exclude evidence on the ground that it is hearsay at the conclusion of the proceedings.  I do not agree that it is appropriate to tackle hearsay evidence differently in this case.  I refuse the plaintiff request to exclude the Gold Deal Documents and the Telephone Bills before the commencement of the trial.

97.In making the above determination, I had expressly refrained from making any ruling on the admission of the Gold Deal Documents and the Telephone Bills.  I shall leave that issue to be determined at the end of the trial.  The parties are at liberty to make submissions on admission and weight to be attached to these documents in their closing submissions as they see fit.

Costs

98.The defendant was seeking indulgence from the court to file further supplemental witness statement, the content of which should have been included in his previous witness statement if his legal advisors had focused on the relevant issues without being side-tracked.  This was a very late application.  Although in the very special circumstances of this case, I allow the defendant’s application, I see no reasons why the defendant should not bear the costs.  I ordered the defendant to pay the plaintiff’s costs for his application including the costs for determining whether Bundle D2 should be included in the trial bundles.  I granted counsel certificate.  I had subsequently assessed such costs by summary assessment at $25,941 payable forthwith.

99.I had declined the plaintiff’s request to exclude before the commencement of the trial the Gold Deal Documents and the Telephone Bills as evidence at trial. The plaintiff should bear the defendant’s costs with counsel certificate for this preliminary issue raised by the plaintiff.  I so ordered.  I had subsequently also assessed such costs by summary assessment at $17,515 payable forthwith.

Mr Brian MW Wong, instructed by Chan & Tsu, for the plaintiff

Mr Eric Tsoi, instructed by Joseph SC Chan & Co, for the defendant