Lin Man Yuan v. Lin Man Yuan v. Kin Ming Holdings International Ltd

HCA 216/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 216 OF 2008

BETWEEN

BETWEEN

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DECISION

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THE APPLICATION

1.There are two summonses taken out by the defendants (“the Applicants”) in the main action (the plaintiffs in the Counterclaim) on 24 April 2013 as amended under the order made on 29 April 2013 for leave to apply for leave to adduce expert evidence at trial from:-

(1)  Mr Joel C. Autencio, Real Estate Appraiser, on the valuation of the Villarmor Golf Course Project; and

(2)  Dr Lee Wing Ho Peter, Clinical Psychologist, on the issue of the mental distress of Mr Jose Kho (2nd plaintiff by Counterclaim)

2.The Respondents are the plaintiffs in the main action and the defendants in the Counterclaim.

3.Mr. J. Chang, counsel acts for the Applicants and Mr. Fung, senior counsel and Ms. F. Lok, counsel act for the Respondents.

THE FACTUAL BACKGROUND

4.The parties had appeared before me in another interlocutory application where the Applicants applied for security for costs against the Respondents on 18 June 2013. I shall recite the brief factual background below.

5.In short, this is a case about a dispute between the parties over the development rights on a piece of land in Xiamen, PRC.  The central issue in the main action is whether an oral agreement exists alongside a written agreement.  It is a valuable piece of land for development of residential/ commercial units amounting to a total building area of 335,192.16 sq. m.  The 1st Respondent had paid RMB125 million as deposit, which was subsequently returned by the Applicants to the 1st Respondent for the reason that the written agreement had terminated, which the 1st Respondent disputes and argues that the written agreement still remains binding upon the Applicants.  This is the main issue in the main action for the trial.  However, the Applicants had, at one stage, raised the issue that the 1st Respondent and her husband, the 2nd Respondent, had employed third parties to threaten Mr. Jose Kho, the 2nd Applicant, which gave rise to the Applicants’ application for an injunction and their application to join Mr. Kho as the 2nd plaintiff in the Counterclaim.  Mr. Kho counterclaimed that because of the harassment, he had suffered mental distress, as a result of which he had lost business opportunities in the total sum of US$1,100 million^[1].  The expert evidence under the application refers to the Counterclaim only.

6.On 5 July 2012, DHCJ Mimmie Chan (as she then was) gave directions for the filing of pleadings (following the joinder of Mr Kho), directed a CMC to be held before a Master, and ordered that “no further interlocutory applications shall be brought without leave of the court”.  At the Case Management Conference hearing,I had raised whether medical evidence would be necessary for the mental distress issue in the Counterclaim, which the Applicants would take it, in support of their application today, as the court was indicating that medical evidence should be adduced.  This is obviously a wrong concept under the present civil litigation regime.  Unlike the civil litigation culture before the Civil Justice Reform where the court would take a laissez-faire approach, leaving the conduct of the proceedings to the respective parties, Order 1A of the RHC has imposed an obligation upon the court to actively manage the case.  Active case management under Order 1A rule 4(2) includes, inter alia, identifying the issues and giving directions to ensure that the trial of a case proceeds quickly and efficiently, rule 4(2)(b) and (l) respectively.  At the Case Management Conference, the court would always pay attention to the pleaded case and ensure the preparation has been done properly before leave is given to the plaintiff to set the case down for trial.  I raised the issue at the Case Management Conference in order to ensure that there would not be a last minute application for expert evidence before trial, which should not be taken as the Court was making any indication to any party. If the Applicants confirmed that they would not require expert evidence, this would be put on record, which will assist the court if the Applicants are to make the application shortly before trial.

7.The Applicants, after seeking senior counsel’s advice, had taken out the application by way of two summonses for leave to adduce the expert reports on the valuation of the golf course and the medical report compiled by Dr. Lee on Mr. Kho (collectively called “the expert reports”).  The Respondents opposed the application on a technical ground that the Applicants could not take out the application without leave from the Court as provided in the order dated 5 July 2012 made by Deputy Judge M. Chan (as she then was).  The Applicants therefore amended the summons to the effect that the application was for leave to apply for leave to adduce expert reports.

8.However, I consider that it will be costs and time saving if I can also deal with the issue whether leave should be given to the Applicants to adduce the expert reports in the same hearing.  The written submissions of the parties have also discussed whether leave should be given to the Applicants to adduce the expert reports.  Mr. Fung SC has no objection to this proposal.  Mr. Chang also agrees with me on this proposal.

9.Mr. Fung SC refers me to the chronology of proceedings to demonstrate that there had been a lot of interlocutory hearings for this matter. It appears obvious that Deputy Judge M. Chan (as she then was) was dissatisfied with the progress of the matter and therefore she made the directions that the parties had to obtain leave for any further interlocutory applications in her order dated 5 July 2012.

RESPONDENTS’ GROUNDS OF OBJECTION

10.The facts above set out the background of today’s application. I shall now set out the reasons of the Respondents’ objection as follows:

a.   expertise is not made out;

b.   they are unnecessary or irrelevant in that they are not helpful to the Court in resolving any issue justly but tends to prejudice the Respondents unjustly; and

c.    the Applicants are guilty of undue delay in bringing this application which causes prejudice to the Respondents that cannot be compensated by costs.[2]

THE LEGAL PRINCIPLES

11.The legal principles applicable to the application are as follows:

a.   The Court has the jurisdiction to rule on the admissibility of expert evidence at the pre-trial stage and 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.  In deciding whether certain proposed 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.  §§12 and 13 of Wong Hoi Fung v American International Assurance Company (Bermuda) Limited & Shrila Chan [2002] 3 HKLRD 507;

b.   The burden to show that the expert has sufficient familiarity and knowledge of the matter on which he gives his expertise is on the Applicants and that the court has the power to exclude the expert reports if they are irrelevant or not helpful for the resolution of the disputes justly. Re Ocean Time Development Ltd. [2008] 2 HKLRD 393 at paras. 13 to 16 by Barma J. at §§13-16 as proposed by Mr. Fung, SC;

c.    If the status of the expert is challenged, the court has the discretion to determine whether the expert evidence should be admissible. In Susan Field v. Barber Asia Limited HCA7119/2000 delivered on 17 June 2003, Deputy Judge Barma (as he then was) said at §17 “Although it is fair to say (and Mr Green readily accepted) that he had no experience of acting as a financial advisor to expatriates, or in Hong Kong, I do not consider that these limitations impinged significantly on Mr Green’s ability to express an opinion on what I consider, at the end of the day, to be reasonably straightforward matters of investment and financial advice.”

d.   Where there is a challenge on the expert’s qualification in giving his expert opinion, the issue should be left to the trial, in which counsel may cross-examine the expert.  At §27 of Citibank N.A. v Noble Treasure & Others HCA2639/2008 by Deputy Judge Au-Yeung (as she then was) on 23 December 2010 said: “In my view, the queries that Mr. Rogers have on the qualifications of Mr. Green are best left to be dealt with at the trial, when the plaintiff will be at liberty to cross-examine Mr. Green.  If the queries of Mr. Rogers are established, they go more to the weight to be attached to Mr. Green’s evidence than his suitability as an expert. The trial judge will also distinguish between opinion evidence on which he may be guided by the expert and evidence of facts which he alone can decide.”

DISCUSSION

12.We shall now proceed to consider the Respondents’ objections to the expert reports by reference to the above principles.

Paragraph 10(a): Expertise not made out

13.In respect of the valuation report for the golf course project, Mr. Fung SC challenges Mr. Autencio’s qualification as an expert in this field. He submits that Mr. Autencio had neither stated his qualifications nor made the declaration as an expert in compliance with Appendix D of Order 38 RHC in his first expert report, but only did so in the supplemental expert report, which was filed without court’s leave; that he had inflated the value of the golf courses project and that his expert report would therefore not be useful for the trial judge.[3]

14.Mr. Fung SC agrees that if leave is given to the Applicants to adduce Mr. Autencio’s supplemental expert report, those technical defects regarding the qualifications and the declaration can be rectified.  He has no objection that the supplemental expert report of Mr. Autencio should be dealt with in this hearing as well.  I am grateful for Mr. Fung’s sensible agreement, which will certainly save time and costs for the parties and the Court.  This kind of conduct complies with Order 1A rule 3 RHC, which calls for co-operation of the members of the legal profession to assist the Court in furthering the underlying objectives of the rules.

Paragraph 10(b): reports not helpful

15.As to the challenge to Mr. Autencio’s expertise and his expert report, the issues should be left to the trial judge for determination as according to Barma J. (as he then was) in Susan Field’s caseand Deputy Judge Au-Yeung (as she then was) in Citibank N.A.’s case mentioned above.

16.As to the medical report of Dr. Lee Wing Ho, Peter, Mr. Fung SC challenges his qualification more aggressively, citing the case of Cheung Yuen Fan Sally v Hong Kong University of Science & Technology HCPI 106 & 107/2003 (unrep; 13^th March 2006) in which the court held: “Clinical psychologists are not normally medically qualified, and are referred to as “doctors” by virtue of their PhD degrees.  Therefore a non-medically qualified clinical psychologist’s report cannot be relevant or necessary in the circumstances.”[4]

17.Mr. Chang reminds me of the fact that the ruling of Master Kwan was on a Personal Injury’s case whereas this case is not on personal injury.  It is on the mental distress symptoms, which caused economic loss to the Applicants.  I agree that for the personal injury cases where liability will depend on the finding of facts leading to the accident, the expert report will normally not be of assistance except for some peculiar traffic accident cases where there were no witnesses at the scene to tell how the accidents took place and the courts had to rely upon expertise evidence to determine the time and the braking distance by reference to the brake-marks of the vehicles.  For the present Counterclaim, the Applicants have pleaded that because of the harassments caused by the Respondents, Mr. Kho had suffered from mental distress symptoms, which caused the economic loss to him.  Whether Mr. Kho has suffered from such mental distress symptoms will be a matter of fact to be found by the trial judge.  The question is whether Dr. Lee’s expert report will assist the trial judge to make the finding of the facts. On the face of it, the causation of mental distress symptoms and the degree of the influence will be examined at the trial.  The trial judge will require some sort of expert opinions on these issues.

18.Mr. Fung SC complains that Dr. Lee’s tests were not objective tests and he had admitted self-serving statements from Mr. Kho for his report; that he has given opinion on the credibility of Mr. Kho, thereby usurping the court’s function and to admit his expert report would cause more time and costs to be wasted for the trial.^[5]

19.Mr. Fung SC has helpfully taken me through some salient paragraphs of the expert report of Dr. Lee to demonstrate his complaints.  The complaints go to the suitability of Dr. Lee as the expert on the mental distress of Mr. Kho for the reason that he was not the expert Mr. Kho had consulted when he suffered from the alleged mental distress symptoms, the methodology of his tests and the quality of his expert report, all of which will require examination of the contents of the expert report and cross-examination of Dr. Lee himself by counsel, which should be left to the trial judge as according to the cases mentioned above.

20.Mr. Fung SC does not say that expert evidence on the valuation of the golf course project and on the mental distress as alleged by Mr. Kho is not necessary.  All he complains is that the expert reports are not helpful for the court.  On the other hand, the Applicants argue that the expert reports are relevant to the issues pleaded in the Counterclaim and the expert reports are useful to assist the court for the trial.  If no leave is given to the Applicants to adduce the expert reports for the trial, it appears to me that the Applicants will only have two options, viz., either to proceed to trial without expert evidence in support of their Counterclaim, in which event the trial judge will not be assisted at all for the determination of the issues in dispute and the Applicants may fail in their counterclaim or the Applicants will have to prepare other expert reports in place of the existing expert reports.

21.In the circumstances, I have doubt that the expert reports and the supplemental expert report on the golf course project are irrelevant to the issues in the Counterclaim and that to allow them to be adduced in the trial will waste costs and time.  If leave is given to the Applicants to adduce the expert reports for the trial, the trial judge certainly has the power to consider what weight should be given to the expert reports.  He or she may even give no weight to the expert reports or simply reject them outright after hearing the evidence and cross-examination of the experts by counsel.  In accordance with Wong Hoi Fung’s decision, on these grounds of objection, the Court should give leave to the Applicants to adduce the expert reports for the trial.  I am bound by this decision.

Paragraph 10(c): delay

22.Finally, Mr. Fung SC relies upon the Applicants’ delay in taking out the application.  The fact that the Applicants have not taken out the application in compliance with the Order dated 5 July 2012 cannot be denied.  Where the Court has the discretion to allow or refuse the application of adducing expert evidence, which is crucial for the trial, the Court has to exercise its discretion judiciously as guided by the established authorities in order to maintain consistency in the administration of justice.  It is trite law that the Court has to take into consideration of all the circumstances relating to the issues before exercising its discretion.  Ultimately, in the final analysis, the Court has to ask itself whether it is just to exercise the discretion, which he or she has to exercise.  This approach is adamantly and clearly stated in the authorities.  In the judgment of Lord Denning in Aeronave SPA v Westland Charters [1971] 3 All ER 531 at 533 where the discussion was whether there was inflexible rule that security for costs order should be made against a foreign plaintiff.  The learned judge took the view that there was not and he said “It is the usual practice of the courts to make a foreign plaintiff give security for costs.  But it does so, as a matter of discretion, because it is just to do so. (emphasis added) …” In the Judgment of the Court of Final Appeal in The Liquidator of Wing Fai Construction Company Limited (in Compulsory Liquidation) v. Yip Kwong Robert & Others (2011) 14 HKCFAR935, the Court of Final Appeal was discussing the exercising of the Court’s discretion on striking out of the cases for breaches of the rules.  At §34 of the judgment, the Chief Justice said:

‘Rules do not exist for the sake of compliance with them as an end in itself; they exist for the purpose of ensuring that disputes before the courts are justly resolved. It does not, however, provide any excuse for parties or their legal representatives not to comply with the Rules or orders made by the court, nor does it relieve them of this duty under O.1A r.3. The emphasis must be placed on the word “just”.’

23.As submitted by Mr. Chang, the trial has been scheduled to commence in September 2014, about one year from today.  There is still reasonable time for the Respondents to prepare expert evidence in response to the expert reports adduced by the Applicants.  As disclosed today, the Respondents have already obtained Professor Lieh Mak’s expert report in response to the Applicant’s medical report.[6] It seems that the Respondents are not taken by surprise that the Applicants would adduce expert evidence.  As I have observed in the previous hearing of security for costs on 18 June 2013, on the issue of the quantum for the security, Mr. Fung SC submitted that there would be two expert witnesses for the Counterclaim. See paragraph 21 of the Decision dated 18 June 2013.

24.Mr. Fung SC has not stated why the delay cannot be compensated by costs in his written submissions.

25.Mr. Fung SC submits that to allow the expert reports to be adduced as evidence at trial, the estimated length of the trial may be affected.  Mr. Chang refers me to the 4th Listing Questionnaires in which Senior Counsel acting for the Applicants had indicated that there would be expert evidence at the trial.  He takes the view that the expert reports will not affect the estimated length of the trial.  As there is still about one year from the trial, I do not consider this factor plays an important role in my determination of the issues today.

CONCLUSION

26.Balancing all the circumstances, I consider that it is just for leave to be given to the Applicants to apply for expert evidence for the Counterclaim and further that leave should be given to the Applicants to adduce the expert report and the supplemental expert report of Mr. Autencio and the expert report of Dr. Lee Wing Ho, Peter at the trial.  I shall now consider what consequential directions should be given to the Respondents to prepare the expert evidence in response to the Applicants’ expert reports.

27.By consent, the Respondents are at liberty to serve the expert reports in response to Mr. Autencio’s expert report and supplemental expert report and Dr. Lee’s medical report within 3 months from the date hereof and the Applicants may then be at liberty to serve their expert reports in reply within one month thereafter.  There shall be liberty to apply for further directions on the availability of Mr. Kho for medical examination.

COSTS

28.On the question of costs for this application, including the hearing today, Mr. Chang submits that there should be two sets of costs, one being the costs up to 3 June 2013 (including the costs for the call-over hearing on 29 April 2013 with counsel certificate), which should be given to the Respondents and the costs for the substantive hearing today (with counsel’s certificate) be given to the Applicants.  Mr. Fung asks for costs for this application on the ground that the Applicants are asking for indulgence.  Alternatively, the costs should be in the cause.  Mr. Fung further submits that the application is for leave to apply for leave to adduce the expert evidence.  The Court has proposed that both leave to have leave and the leave to adduce the expert evidence should be dealt with together. This may cast some strength to his argument that the costs should be in the cause.  Mr. Chang argues that since the Respondents had argued both applications, viz. leave to apply for leave and the leave to adduce expert evidence, and the Court has ruled in favour of the Applicants, the costs should be given to the Applicants.  Costs are matters of the court’s discretion under Order 62 rule 5 of RHC and the Court should take into consideration of the factors as stated therein.  This Court should take into consideration that the Applicants have not complied with Deputy Chan’ order dated 5 July 2012 to take out the application and that the application is only for leave to apply for leave to adduce expert evidence.  The Respondents had suggested to allow the Applicants to adduce the expert report of Mr. Autencio, subject to the conditions that no admission was to be made to the contents and the costs.  However, such negotiation did not come to a fruitful conclusion.  Today’s arguments on the issues have disposed of all the issues on the expert evidence for the trial and on the whole, I have to say that the rulings today are in favour of the Applicants.  There is no reason why they should not have the costs for the arguments today.  I therefore order that the costs up to 3 June 2013 be to the Respondents, as conceded by Mr. Chang and the costs for today’s hearing, (with counsel’s certificate) be to the Applicants; such costs are to be assessed under Order 62 rule 9A RHC by the Applicants lodging and serving the schedule of costs within 7 days from the date hereof, followed by the Respondents’ lists of objection within 7 days thereafter.  The parties will be advised whether the assessment will be made summarily on paper or there should be a hearing for assessment on such time and date to be informed.  The parties should endeavour to settle the costs themselves without a hearing.

29.The Court makes an order in terms as follows:

a.   Leave be given to the Applicants to apply for leave and further that leave be given to the Applicants to adduce the expert reports as provided under paragraph 26;

b.   In terms of paragraph 27 on further directions; and

c.   Costs in terms of paragraph 28.

Mr. Patrick Fung S.C. and Ms. Frances Lok, instructed by Jesse H.Y.  Kwok & Co., for the plaintiff (in main action) and the defendants (by counterclaim)

Mr. Jonathan Chang, instructed by Simon Si & Co., for the defendants (in main action) and the plaintiffs (by counterclaim)