Daimler Ag (Formerly Known As Mercedes Benz Ag) v. Helge Herbert Leiduck and Another

HCA 4089/1994

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.4089 OF 1994

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DECISION

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1.The issue arising for decision is whether the Plaintiff should be allowed to adduce evidence from its own expert after a single expert who has been jointly instructed by the parties has made a report and given oral evidence.

Circumstances giving rise to need for expert evidence & issue for expert evidence

2.As explained in the Reasons for Decision that I handed down on 12 March 2013, before the Court is an application (“Inquiry Application”) by both Defendants for an inquiry as to the damages suffered by them by reason of the Mareva injunction made against them on 29 April 1994 (“Injunction”), in enforcement of the cross undertaking as to damages upon which the Plaintiff applied for and obtained such injunction.

3.The trial of the issues relevant to whether there should be an inquiry was originally set down for 16 days from 4 to 28 February 2013.

4.In support of the Inquiry Application, Mr Herbert Leiduck (“Mr Leiduck”)[1] signed Statements of Truth to verify the Defendants’ pleadings[2] on 16 November 2010, 15 December 2012 and 23 January 2013.  He further swore/signed a number of affidavits/witness statements on 7 January 2008, 9 December 2008, 25 June 2009, 30 March 2010, 6 April 2010, 27 September 2011, 11 January 2012, 19 September 2012, 15 November 2012 and 28 January 2013, all of which have been adopted as his evidence in chief. 

5.Mr Leiduck was then cross-examined by Mr John Yan SC (with him Ms Sara Tong) for the Plaintiff on the following days in 2013: 25 and 27 February; 1, 5, 6 and 7 March; 10 and 11 April; 8, 9, 14 and 15 May; 6 and 7 June and 16 August.  His re-examination by Mr Horace Wong SC (with him Mr Clark Wang) commenced on 16 August 2013 and continued on 19 and 21 August 2013. 

6.In this regard, Mr Leiduck testified from a business centre in Germany (where he resided) via video link pursuant to leave granted by the Court of Appeal on 29 January 2013 in CACV 12/2013.[3]  Further, on the days when Mr Leiduck testified, the Court sat for such purpose from 6 pm to 8 pm (from 25 February to 10 April 2013[4]) or from 5 pm to 7 pm (from 11 April 2013 onwards).  Quite apart from the time difference between Hong Kong and Germany, those late and short sitting hours were adopted to prevent Mr Leiduck from being over-stressed by giving evidence having regard to his advanced age (over 80 years), physical disabilities (blindness and considerable age-related hearing impairment) and medical conditions (particulars of which can be found in §§6-7 ofthe Court of Appeal’s said judgment) as well as to allow Mr Leiduck enough time after waking up to wear off the effects of the overnight medication that he was taking. I believe it is not unfair for me to say that the accommodation of the special needs of Mr Leiduck as a witness is a significant reason (though not the only reason) why this trial has overrun so seriously.    

7.However, while the Plaintiff and the Court were made aware of Mr Leiduck’s physical disabilities and ailments, they have not been alerted to the facts that:

(1) On 7 July 2011[5], following a report by Mr Leiduck’s wife of incidents of visual hallucinations (some scenic) and disorientation, a Dr A Gallard, a specialist in neurology, diagnosed Mr Leiduck to be suffering from dementia with Lewy-bodies (“DLB”).

(2) On 3 January 2012[6], a Dr F Sondhauss, a consultant/specialist for psychiatry and psychotherapy, made psychological findings of, inter alia, erratic and long-winded thought processes, reduced attention and concentration, impaired long-term memory, paranoid thoughts, misperceptions in the form of visual hallucinations and impaired relation to reality and diagnosed Mr Leiduck to be suffering from moderate dementia. 

8.On 22 August 2013 (i.e. the 34^th day of this trial), at 5 pm, when Mr Leiduck was due to continue his evidence in re-examination, Mr Wong SC handed up to the Court the English translation of a medical report dated 12 June 2013 (“Stein Report”) by a Dr Albrecht Stein (“Dr Stein”) which on its face:

(1) recorded that Mr Leiduck had been summonsed twice by the court in Augsburg, Bavaria, Germany for questioning as a witness in respect of certain criminal proceedings against one Karlheinz Schreiber for tax evasion but was neither willing nor able to appear due to his illness;

(2) was commissioned by the Augsburg court as a result of Mr Leiduck’s unwillingness and inability to testify;

(3) addressed the question “whether Mr Leiduck is able to make a statement as a witness” in terms of his abilities to reasonably express his interests during the court room proceedings, to formulate his statement as a witness in a comprehensible manner, to answer specific questions of the parties in the case adequately and truly, to follow court proceedings adequately, to meet the obligation to tell the truth, to understand questions and statements of other parties in the proceedings and to adequately and actively assert his own legal interests;

(4) noted that Mr Leiduck was suffering from dementia and cerebral-organic psycho-syndrome and taking medication for dementia (exelon); and

(5) concluded that Mr Leiduck was then completely unable to participate as a witness in court proceedings, with no prospect of recovery.  In particular, it was said, inter alia, that Mr Leiduck had considerable deficiencies in both long and short-term memory; that due to the considerable reduction in his memory function, particularly the long-term memory, he could not be questioned “responsibly” on things that happened many years ago; that many experiences were increasingly processed by Mr Leiduck in a delusional manner as a result of his advanced age and the illness pattern of dementia and the cerebral-organic psycho-syndrome which would only intensify; and that he could no longer answer sophisticated questions which went beyond his personal situation in a manner which was adequate and met his obligation to tell the truth.

9.In addition to the Stein Report, Mr Wong SC also mentioned that Mr Leiduck had also been examined by some other doctor.  Counsel was however not then in a position to provide any further detail to the Court and the Plaintiff save that the other doctor also concluded that Mr Leiduck was “in bad shape” and that there was another, albeit shorter, medical report on Mr Leiduck.

10.The trial was adjourned to 28 August 2013 for the Defendants to make full and proper disclosure of all the information that they had at hand regarding Mr Leiduck’s mental health and capacity and for both parties to consider the implications of such information on the status of the evidence already given by Mr Leiduck and prepare submissions on what the Court can and should do in the circumstances.

11.The Stein Report and its English translation were formally produced by the 21^st Affidavit of Mr Jeremy Levy (“Mr Levy”) of Messrs Robertsons, solicitors for the Defendants, made on 23 August 2013 which also exhibited 2 other medial reports on Mr Leiduck dated 11 June 2013 and 16 August 2013[7] (“1^st Pfeffer Report” and “2^nd Pfeffer Report” respectively and “Pfeffer Reports” collectively) by a Dr Klaus-Dieter Pfeffer (“Dr Pfeffer”) with English translations as well as the following explanations:

Regarding the Stein Reports:

(1) Mr Leiduck was summonsed by the Bavarian Superior State Court in Augsburg to testify at the trial of Karlheinz Schreiber in about March 2013.  In order to ascertain whether Mr Leiduck was fit to give evidence, on 4 June 2013, the Augsburg court ordered Dr Stein to examine Mr Leiduck.  Dr Stein’s examination of Mr Leiduck was conducted in about June 2013, following which the Stein Report was compiled.

(2) After the Stein Report was submitted to the Augsburg court, Mr Leiduck Jr asked the lawyer who represented Mr Leiduck before the Augsburg court, a Dr Stefan Kirsch (“Dr Kirsch”), to obtain a copy of the Stein Report.  On 19 August 2013, Dr Kirsch sent Mr Leiduck Jr a copy of the Stein Report (written in German), which was soon forwarded to Mr Levy.  Mr Levy obtained an English translation in the morning on 22 August 2013.

Regarding the Pfeffer Reports

(3) Since about June 2013, the people taking care of Mr Leiduck at the senior home where he was staying became aware that his condition was deteriorating and that he was having hallucinations.  Dr Christine Funk (“Dr Funk”), the general practitioner in charge of Mr Leiduck’s medical treatment, then made arrangements for Mr Leiduck to be examined by Dr Pfeffer, a specialist in psychiatry and psychotherapy.  Dr Pfeffer first examined Mr Leiduck on 7 June 2013 and compiled the 1^st Pfeffer Report.

(4) Concerned with his father’s condition, Mr Leiduck Jr requested Dr Pfeffer to examine him again, which Dr Pfeffer did on 9 August 2013, following which he compiled the 2^nd Pfeffer Report. 

12.Turning then to the Pfeffer Reports, insofar as it is material for present purpose:

(1) Dr Pfeffer stated in his 1^st report that the “patient is facing various legal proceedings, e.g. in Hong Kong or Augsburg.  The issue is whether he is fit to be questioned.  He has been called as a witness on several occasions, but could no longer remember things from the past correctly, became tired quickly and was not able to stand up to the stress.”

(2) He considered “the patient to be legally incompetent, incapable of being questioned and unfit to face proceedings in view of his cognitive and emotional disturbances as well as his physical impairment”.

(3) He stated in his 2^nd report that according to Mr Leiduck Jr, “his father is often unaware of reality, over-estimates himself, takes his delusions seriously”.

(4) Dr Pfeffer concluded in his 2^nd report that Mr Leiduck “remained mentally incompetent, unfit to be questioned, legally incompetent and unable to defend his own interests”.

13.By the resumed hearing on 28 August 2013, it was recognised by all concerned that the contents and conclusions of the Stein Report and the Pfeffer Reports put into question Mr Leiduck’s fitness both as a party and as a witness.

14.At the invitation of the Defendants, I stayed all further proceedings in this action pending an application to be made for the appointment of Mr Leiduck Jr as next friend for Mr Leiduck for the purpose of carrying on these proceedings on Mr Leiduck’s behalf (“Next Friend Application”). 

15.In support of the Next Friend Application which was made by Summons dated 25 September 2013, Mr Leiduck Jr swore his 4^th Affidavit on 23 September 2013 to depose to the following:

(1) After his wife’s death on 3 February 2013, Mr Leiduck had “lost some concentration and memory”.

(2) Mr Leiduck executed a general power of attorney on 27 March 2013 to enable Mr Leiduck Jr to take care of his affairs.  Mr Leiduck Jr had after May 2013 been practically managing most if not all of Mr Leiduck’s personal affairs on his own using the power of attorney as Mr Leiduck no longer gave him specific instructions anymore.

(3) In mid May 2013, Mr Leiduck Jr observed a clear deterioration of the mental capability of Mr Leiduck who started to talk about a lot of incoherent and imaginative matters and was having hallucinations.

(4) Mr Leiduck Jr reported his father’s condition to Dr Funk who then asked Dr Pfeffer to examine Mr Leiduck and assess his condition, as result of which Dr Pfeffer produced the 1^st Pfeffer Report to Dr Funk.

(5) The court order pursuant to which the Stein Report was compiled was made following Mr Leiduck’s absence before the Augsburg court despite having been twice subpoenaed and after submissions were made by Dr Kirsch that due to Mr Leiduck’s medical condition, he could not travel to the court to testify.

(6) Mr Leiduck’s condition worsened rapidly between June and August 2013 so much so that Mr Leiduck Jr asked Dr Pfeffer to examine his father again at the beginning of August, as result of which the doctor compiled the 2^nd Pfeffer Report”. 

(7) Meanwhile, Mr Leiduck Jr asked Dr Kirsch to request for a copy of the Stein Report which he received on 19 August 2013 and immediately forwarded to Mr Levy.

16.I have set out the detailed circumstances from which the issue regarding Mr Leiduck’s fitness as a party and as a witness arose because they appear to me to be relevant to one of the objections raised by Mr Wong SC to the present application by the Plaintiff.  

17.Coming back to the chronology, on 5 November 2013, I heard and granted the Next Friend Application, thereby dealing with Mr Leiduck’s fitness as a party.

18.On the same day and subsequently on 8 November and 3 December 2013, with a large measure of agreement between the parties, I also gave and revised directions (“Competency Issue Directions”) for resolving what has become known as the “Competency Issue”, which encompasses the following aspects:

(1) whether Mr Leiduck was, at the time of his examination by the Joint Expert (defined in §19(1) below) incompetent to give evidence in these proceedings within the meaning of s 3(b) of the Evidence Ordinance (Cap 8)[8];

(2) if so, since which date had he become so incompetent;

(3) in particular, whether Mr Leiduck was so incompetent on the dates when he swore/signed his affidavits/witness statements, signed statements of truth and gave oral evidence; and

(4) whether and, if so, how likely Mr Leiduck might recover from his incompetence in the future.

19.It is unnecessary for present purpose for me to set out the Competency Issue Directions save to mention that they provided for:

(1) the appointment of a single joint expert specialising in medical psychiatry (“Joint Expert”) to assess Mr Leiduck’s mental condition at the various times material to the Competency Issue; and

(2) a tight timetable, not just for the hearing and determination of the Competency Issue, but also for the further conduct of the Inquiry Application up to the completion of evidence as follows:

14-17 April 2014	Oral evidence of the Joint Expert and Submissions on the Competency Issue
22 April 2014	Court’s ruling on the Competency Issue
25, 28 & 30 April 2014	Submissions by the parties on the effects of the findings on the Competency Issue on Mr Leiduck’s evidence and the further conduct of the trial (“Effects Issue”)
Before 13 May 2014	Court’s ruling on the Effects Issue
13 May 2014	Hearing of the Plaintiff’s application (if any) arising from the Court’s decision on the Effects Issue
13-16, 19-23, 26-30 May 2014	Oral evidence of the Plaintiff’s only witnesses as to fact, Mr Rene Von Samson-Himmelstjerna (whose cross-examination has already begun in the morning on 22 August 2013) and Mr Lim Chu Hoon, and oral evidence of the parties’ respective expert witnesses on Russian company law and company registration system (see §9 of Reasons for Decisions dated 12 March 2013)

20.For the sake of completeness, pending sight of the Joint Expert’s report, I declined the Plaintiff’s request to give the parties leave to apply, within 21 days after receipt of the Joint Expert’s report, for permission to adduce further evidence on the Competency Issue from their own expert.  However, I expressly left it open to the parties to apply for further directions, if thought appropriate, upon seeing the Joint Expert’s report.

21.Pursuant to the Competency Issue Directions and by a joint letter of instructions dated 27 December 2013 from the parties’ solicitors (settled by the Court failing full agreement between the parties), a Professor Dr med Hans Förstl (“Dr Förstl”)[9], a neurologist, psychiatrist and psychotherapist as well as the Geriatrics Director of the Department of Psychiatry and Psychotherapy, Technicshe Universität München, was appointed as the Joint Expert.

Dr Förstl’s opinion

22.Before I come to Dr Förstl’s opinion, in response to his request for clarification of the relevant meaning of incompetence, by Robertsons’ letter dated 25 February 2014 to Dr Förstl (again settled by the Court failing agreement between the parties), it was explained to Dr Förstl, inter alia, that a person falls within s 3(b) of the Evidence Ordinance if and only if:

(1) he is of unsound mind (which Dr Förstl calls “Criterion (1)” as a matter of shorthand in his report); and

(2) by reason of his being of unsound mind, he appears incapable of

(a) receiving just (in the sense of “right”, “proper” or “correct”) impressions of the facts respecting which he is examined (“Criterion (2a)” in Dr Förstl’s report); or

(b) relating such facts truly (“Criterion (2b)” in Dr Förstl’s report).

A person is not incompetent simply by reasons of his having any particular mental illness or condition, unless he thereby appears incapable of receiving just impressions of the facts respecting which he is examined or of relating such facts truly.

23.Dr Förstl has had the benefit of (1) reviewing the pleadings, affidavits, witness statements and transcripts of the oral testimony in question; (2) studying the 5 tranches of medical and nursing records in respect of Mr Leiduck in Trial Bundles 18-24 in their original texts (i.e. in German); (3) interviewing (and/or obtaining further information from) various doctors and nursing staff who had treated/taken care of Mr Leiduck as well as Mr Leiduck Jr, Ms Herlinde Leiduck (Mr Leiduck Jr’s wife), Dr Linda Koiran (Mr Leiduck’s daughter), Dr med Lother Schumann (Mr Leiduck’s wife’s cousin and long-term friend and himself an orthopaedic surgeon) and Mrs Schumann; and (4) personally examining Mr Leiduck twice on 30 January and 9 February 2014 at his nursing home.

24.Dr Förstl submitted a 75-page written report on 25 March 2014 and attended court to answer the parties’ and the Court’s questions arising from his report on 14 to 16 April 2014.

25.Dr Förstl correctly understands s 3(b) to be triggered if criteria (1), (2a) and (2b) are met in the following ways: (1) and (2a) are true; or (1) and (2b) are true; or (1) and (2a) and (2b) are true.

26.With this understanding, in respect of each the 3 criteria, Dr Förstl has looked for and considered:

(1) Criterion (1) (“unsound mind”): the diagnosis of DLB or evidence of other significant neuropsychiatric disease;

(2) Criterion (2a) (“incapable of receiving just impressions”): evidence of impaired recollection and comprehension of facts, more specifically, facts respecting which Mr Leiduck was examined; and

(3) Criterion (2b) (“incapable of relating facts truly”): evidence of impaired ability to present those facts.

27.For present purpose, briefly stated (and hopefully without doing injustice to Dr Förstl’s very comprehensive explanation of his opinion):

(1) Dr Förstl is in no doubt that Mr Leiduck was incompetent on the 2 occasions when he was examined by Dr Förstl.  More specifically, Mr Leiduck showed a moderately severe form of dementia syndrome with predominant amnesia, disorientation and attention deficits (Criterion (1)).  By reason of his being demented, he was disoriented, unable to concentrate and to learn simple facts (Criterion (2a)) and to present the facts properly and realistically during attentional, delayed recall, definition and planning tasks (Criterion (2b)).

(2) Nor is Dr Förstl in any doubt that Mr Leiduck would not recover from the state of incompetence because he suffered from an irreversible brain disease with a relentless course and limited life expectancy.  Even though there might be fluctuations in his performance, it would be highly unlikely (<99%) that he would even for very short periods (in terms of hours) attain levels of cognition observed in previous years.  Longer periods (in terms of days) of sufficient cognitive performance can be ruled out with final certainty.

(3) As to when Mr Leiduck became incompetent and, more specifically, whether Mr Leiduck was incompetent on the various dates he prepared his written evidence and gave his oral testimony:

(A) A diagnosis of DLB was first made on 7 July 2011 and the clinical diagnostic features of DLB (cognitive impairment with a great deal of fluctuations, occasional visual hallucinations and (mild) Parkinsonism) have been satisfied ever since.

(B) Further, Dr Förstl also sees from the cranial Computed Tomography (cCT) images recorded on the same day[10] clear evidence of severe vascular brain changes in Mr Leiduck, which is diagnostic for vascular dementia (or a vascular contribution to cognitive impairment).

(C) The correct etiological diagnosis is therefore mixed dementia with vascular and neurodegenerative brain changes (vide infra).

(D) However, while some earlier medical reports mentioned suspicious symptoms, there is no sufficient medical evidence reliably pointing to earlier significant cognitive deficits or other relevant psychopathology that might account for “unsound mind” before July 2011.

(E) Hence, criterion (1) (“unsound mind”) could not be satisfied for the period prior to July 2011.

(F) However, even for the period after July 2011, Mr Leiduck did not have to suffer from signs of dementia everyday even if he had this disease (which was a type of brain change).  The course of both DLB and vascular dementia, though downhill, is characterised by fluctuations, the amplitudes of which can be quite significant and drastic.  The patient may on some days be capable of performing quite well, not appearing to be demented at all.  On other occasions, especially under pressure, he may show clear signs of dementia.  Some of these fluctuations may even arise spontaneously.  They can occur within a matter of hours.

(G) The typical changeability of these forms of dementia means that criteria (2a) and (2b) could be satisfied differently at different times and under different circumstances.  Sitting in a familiar environment (like one’s own study) drafting, giving instructions for the preparation of, approving or signing a written statement with the assistance of an attorney and holding out during cross-examination in a strange setting (like a court room or interview room) present different situational demands.

(H) In this regard, Mr Leiduck’s mental state and competence had been significantly and almost constantly affected after his wife’s death on 3 February 2013 and became obvious with the beginning of his oral testimony on 25 February 2013.  Even then, remarkable changes - including occasional and transient recoveries – were to be observed between February and August 2013.

(I) Therefore, each occasion on which Mr Leiduck gave evidence, and each piece of evidence given by him, has to be examined and evaluated individually.

(J) Fully appreciating that it is not for him to examine the truth or falsity of Mr Leiduck’s evidence, Dr Förstl focuses less on contents but more on the form of presentation.

(K) Dr Förstl is satisfied that Mr Leiduck was incompetent in the relevant sense on all the occasions on which he gave oral evidence, save for the 8 May 2013 session.  Dr Förstl finds in the transcripts of the examination of Mr Leiduck in Court (which provide the most reliable evidence) proof of Mr Leiduck’s impaired recall (of names, dates and other detailed facts) from his verbatim memory and persistent resort to his gist memory.  Mr Leiduck was also verbose and at times incoherent and became unable to relate the facts properly when he did not take in the questions or directions or while he was occupied with his thoughts and intent on presenting his side of the story.

(L) Dr Förstl however cannot find in the transcript of Mr Leiduck’s cross-examination on 8 May 2013 sufficient material pointing to fulfilment of criteria (2a) and (2b).

(M) As for the evidence contained in Mr Leiduck’s various statements of truth, affidavits and witness statements, Dr Förstl cannot find sufficient evidence upon which he can conclude whether Mr Leiduck was competent or incompetent when making them, even after 7 July 2011.  That is because Dr Förstl does not feel able to assume, without reliable evidence, whether Mr Leiduck drafted, gave instructions for, approved or signed a particular written proof in a good or bad moment during the fluctuating course of his dementia.

Plaintiff’s application for leave to adduce further medical expert evidence on Mr Leiduck’s incompetence before February 2013

28.On 14 April 2014, before the commencement of Dr Förstl’s oral evidence, Mr Yan SC handed up a report dated 14 April 2014 by Professor Felice Lieh Mak (“Prof Lieh Mak”), a specialist in psychiatry, which is prepared on the basis of the English translations of the same 5 tranches of medical and nursing records made available to and considered by Dr Förstl and which expresses:

(1) agreement with Dr Förstl’s opinion that Mr Leiduck was incompetent from February 2013 onwards; and

(2) the contrary opinion that Mr Leiduck had become incompetent from 2008 and remained so throughout the material time up to January 2013.

29.Mr Yan SC, however, he did not there and then make any application in respect of Prof Lieh Mak’s report.  He reserved the option to do so after Dr Förstl’s evidence in Court.

30.At the conclusion of Dr Förstl’s evidence in Court on 16 April 2014, Mr Yan SC confirmed that he had instruction to apply for leave to adduce additional expert medical evidence from Prof Lieh Mak on the Competency Issue, more particularly, Mr Leiduck’s competence or otherwise prior to February 2013.

31.I heard the application on 17 April 2014.

Relevant principles governing admission of additional expert evidence following appointment of single joint expert

32.The appointment of a single joint expert (“SJE”), whether by agreement between the parties or imposed by the Court, does not per se bar a party from seeking leave to instruct its own expert to challenge the SJE’s evidence or aspects thereof. 

33.Leave should and would be granted if, upon balancing all relevant considerations, it is just and accords with the underlying objectives of the Civil Justice Reform (as set out in the Rules of the High Court Order 1A, rule 1) to do so.  See Daniels v Walker [2000] 1 WLR 1382 (CA), per Lord Woolf MR at 1386H and L v L, HCMC 1/2003, unreported, 20 April 2005, per Lam J (as he then was) at §§22 and 25.  See also Hodgkinson, Expert Evidence: Law and Practice (3^rd Edition) at §5-005 p 158.

34.In Cosgrove v Pattison [2001] CP Rep 68, Neuberger J identified 9 factors for consideration in deciding whether to allow the evidence of a second expert, in addition to the evidence of an expert instructed jointly, under Civil Procedure Rules Part 35:

(1) the nature of the dispute;

(2) the number of disputes on which the expert evidence is relevant;

(3) the reason for requiring the second report;

(4) the amount at stake or the nature of the issues at stake;

(5) the effect of permitting a second expert report on the conduct of the trial;

(6) the delay in making the application;

(7) the delay that might be caused in the conduct of the proceedings;

(8) any other special features;

(9) the overall justice to the parties.

35.With regard to the reason for requiring own-party expert evidence, in Daniels v Walker, supra, Lord Woolf MR held (at 1387E) that additional expert evidence may be permitted where the dissatisfied party’s reasons for wishing to adduce such evidence are “not fanciful”.  The same judge then seemed to suggest, obiter[11], a more stringent test in Peet v Mid-Kent Healthcare Trust [2002] 1 WLR 210 (CA) at §28, in that “good reasons”, as opposed to “reasons which are not fanciful”, must be shown. 

36.In L v L, supra, Lam J was referred to both cases and the language of §17 of his Lordship’s judgment[12] appears more consistent with a preference for the “not fanciful reasons” test in Daniels v Walker.  Further, it is observed in Hodgkinson, Expert Evidence: Law and Practice, supra, p 158 at footnote 34 that the later dicta was probably per incuriam.  The distinction seems to me to be a fine one.  I do not think the application before me would turn on which of these tests should be followed.  However, I am inclined to think that, for what is essentially a case management decision to be made to achieve justice and upon balancing all material factors of which the reasons for challenging the SJE’s opinion is but one, it should be sufficient if those reasons are not fanciful, particularly if the other considerations also point to own-party expert evidence being appropriate.

37.While on the reasons for own-party expert evidence, Mr Wong SC refers to and highlights precedents of such evidence being allowed where the SJE was found to have been instructed by a party’s solicitors many times before (Smolen v Solon Co-operative Housing Services Limited [2003] EWCA Civ 1240) or where a party’s solicitors had secret communications with the SJE (Oldham Metropolitan Borough Council v GW & Ors [2007] EWHC 136 (Fam)).  However, the situations in which own-party expert evidence is allowed are not confined to these rather unusual circumstances.  Certainly, a case can be made with reference to the materiality, significance and quality of the additional expert evidence in respect of which leave is sought.

38.Neuberger J’s list is acknowledged to be non-exhaustive. The learned authors of Hodgkinson, Expert Evidence: Law and Practice, supra, mention at §5-005 p 159 other examples, two of which are to my mind relevant to the present application: (1) whether the SJE’s report can be challenged by cross-examination without the need for a further report; and (2) whether the parties have already engaged own-party experts.

Whether leave should be given

39.Turning then to the instant case, although the Court is not at this stage conducting the actual inquiry as to damages, the amounts at stake are potentially enormous if an inquiry be ordered.  As stated in my Reasons for Decision dated 12 March 2013, there is a claim for damages by the 2^nd Defendant (“IRC”) for loss of the value of its business or alternatively by Mr Leiduck for loss of the opportunity to sell his IRC shares.  In this regard, the Defendants put forward an agreement that they claim had been reached in principle with a third party in early 1994 to purchase of 70% of the shares of IRC at US$20 million and to bring the investment in IRC up to US$40 million.  There is also a claim for damages for loss of the opportunity to earn commission on a project to build 15,000 houses in the Leningrad and Tula Regions to the tune of €90 million minus expenses to be assessed.

40.While the Court is yet to hear submissions on how the exclusion of almost the entirety of the evidence given by Mr Leiduck under cross-examination while incompetent (which Mr Wong SC seems to have accepted) would affect the treatment of his remaining evidence (which is the Effects Issue), subject to and pending such submissions, I proceed on the basis that what is left of Mr Leiduck’s evidence that is untainted by incompetence (i.e. his various affidavits and witness statements) would bear upon the question whether an inquiry as to damages ought to be directed.  This seems to be implied by the equally strenuous efforts by the Plaintiff to question, and by the Defendants to support, Dr Förstl’s opinion regarding the evidence given by Mr Leiduck before February 2013.

41.Prof Lieh Mak’s proposed evidence will be limited to addressing Mr Leiduck’s competence or otherwise before February 2013.  Although, as pointed by Mr Yan SC, the Court is not obliged to accept Dr Förstl’s conclusions and analysis leading to such conclusions but is required to assess the same in light of all other evidence before it, such expert evidence is, by nature, difficult to effectively challenge simply by cross-examination of the SJE without the support of a different opinion, backed by reasons, from another expert. Without pre-judging the matter, in the absence of additional expert evidence to the contrary, it is much more likely that I would attach the greatest of weight to and accept Dr Förstl’s assessment.

42.Mr Wong SC doubts the usefulness of input from another medical expert who would not enjoy the same advantages as Dr Förstl in terms of being able to read the original German texts (often in scribbled handwriting) of the available medical and nursing records and of having spoken to material informants. The short answer to such objection is that the English translations should be verified to be full and accurate (if necessary by involving some who can read doctors’ handwriting in German) and that Dr Förstl has already included in his report summaries of the information that he has obtained from the various interviewees.

43.Mr Wong SC also questions the validity of Prof Lieh Mak’s views by making the following points:

(1) The medical records in respect of Mr Leiduck from before 2008 contained no hint whatsoever of any cognitive deficit.

(2) Prof Lieh Mak’s conclusion of Mr Leiduck’s incompetence in 2008 is prima facie based on the contents of his 1^st and 2^nd Affidavits dated 7 January and 9 December 2008, which may implicitly suggest judgment being passed on the truth or falsity of such evidence.  

(3) Insofar as Prof Lieh Mak seeks to draw support for such conclusion from other materials (namely, Dr Sondhauss’ report, the Stein Report, the 2^nd Pfeffer Report and what Mr Leiduck Jr told Dr Pfeffer), they cover a much later time frame.

(4) In fact, as far as 2008 is concerned, a report dated 27 March 2008 recorded normal psychological findings and one dated 27 May 2008 described Mr Leiduck as “orientated” and showing organised line of thoughts and adequate responses.  Also, a nursing report covering a short period of hospitalisation in late May 2008 stated that Mr Leiduck was alert, oriented to identity, situation, location and time, cooperative and active with no dementia.

(5) Prof Lieh Mak’s conclusion of Mr Leiduck’s incompetence in 2009 is prima facie based on the contents of his 3^rd Affidavit dated 25 June 2009 and the same criticism can be made.  In fact, no neurological or psychiatric symptoms were noted in 2 medical reports covering the period from October to December 2009.

(6) Prof Lieh Mak’s conclusion of Mr Leiduck’s incompetence in 2010 rests entirely upon the premises that Mr Leiduck showed an early presentation of DLB in 2008 and that DLB is an irreversible condition.  However, a medical report dated 28 February 2010 recorded “normal” “general neurological examination findings”.

(7) Prof Lieh Mak’s conclusion of Mr Leiduck’s incompetence in 2011 is based on Dr Gallard’s report and the cCT images dated 7 July 2011.  However, Mr Wong SC points out that Dr Gallard actually noted Mr Leiduck’s “relatively good memory performance”.

(8) While Prof Lieh Mak’s conclusion of Mr Leiduck’s incompetence from January 2012 to January 2013 is based on medical and nursing notes from that period which documented numerous incidents of manifestation of symptoms of Mr Leiduck’s dementia, the expert has not at all addressed the fluctuating course of the forms of dementia suffered by Mr Leiduck, which has greatly influenced Dr Förstl’s assessment.

44.While these do appear to me to be valid points to be put to Prof Lieh Mak in cross-examination, what I am unable to assume is that she would have no or no cogent answers to all such queries.  In this regard, I am mindful that the retrospective assessment of the mental capacity and competence of a witness is clearly not an exact science.  On the materials presently available to me, I cannot say that the views set out in Prof Lieh Mak’s report are patently fanciful, certainly not without hearing her. 

45.Mr Wong SC also expresses concern about the increased costs and delay that would inevitably result from the reception of additional medical expert evidence at this stage.  If Prof Lieh Mak’s report is in, one anticipates an application for reciprocal leave by the Defendants and the recall of Dr Förstl so that he is given a fair opportunity to deal with the new evidence.

46.First, on a proper view, the prejudice is suffered equally by both sides to these proceedings. 

47.Second, the additional costs should be viewed and weighed in the perspective of the magnitude of costs that has no doubt been already incurred in this matter.  Anyway, each of the parties has already engaged its own expert.  In this regard, the Defendants have admittedly also enlisted the assistance of an expert, albeit for the more limited purposes of helping them understand Dr Förstl’s report and formulate questions for the cross-examination of Dr Förstl.

48.Third, yes, the timetable carefully laid down before for the determination of the Competency Issue and the Effects Issue and for the conclusion of evidence on the Inquiry Application will no doubt slip.

49.However, I think one can be forgiven for not showing the Defendants the sympathy that is usually extended to the party at the receiving of this kind of application.  I have already set out in some details how the Competency Issue arose.  I agree with Mr Yan SC that the Defendants are very much the engineer of the delay and consequential anxieties they now moan about.

50.Mr Wong SC disputes the existence of any obligation on the part of a party to constantly update the Court with information of his health condition or that of a witness he calls or intends to call.  I am of the view that a party does owe a duty to the Court and to the opposite party not to knowingly, recklessly or negligently put forward an incompetent witness.  Given the subtle course by which how a lot of diseases affecting the human mind can develop, generalisation is not helpful.  Much depends on the particular facts of the case. 

51.On the facts presently disclosed by the Defendants and known to the Court and the Plaintiff, by early June 2013 at the latest if not earlier[13], the question was raised within the Defendants’ camp regarding Mr Leiduck’s fitness to be questioned as a witness because that was what Dr Pfeffer was specifically asked to examine Mr Leiduck for.  The 1^st Pfeffer Report, though brief, concluded in no uncertain terms that Mr Leiduck was “legally incompetent, incapable of being questioned and unfit to face proceedings in view of his cognitive and emotional disturbances as well as his physical impairment”.  That being the case, that report should have been brought to the attention of the Court and the Plaintiff as soon as it was available to the Defendants in June 2013.  Had that been done, the preparation for the hearing and determination of the Competency Issue could have been set in motion months earlier than November 2013. 

52.Further, the possibility of an application for leave to adduce own-party medical expert evidence after sight of the Joint Expert’s report was expressly flagged by the Plaintiff and left open by the Court at the hearing on 5 November 2013 so that, contrary to Mr Wong SC’s submissions, the Defendants could have no “legitimate expectation” that there would be no such additional evidence.  

53.As it is, the Plaintiff has acted as quickly and efficiently as it can in the circumstances in having Prof Lieh Mak’s report ready by 14 April 2014 after receiving Dr Förstl’s report on 25 March 2014.

54.While on delay, I observe that in L v L (supra), notwithstanding the application being made in the course of closing submissions and the need for re-opening of the evidence, leave was given for the issue of a subpoena against a bank for the production of a valuation report because there was no reason to believe that such valuation was not bona fide and the difference between such valuation and that of the SJE was too large to be discounted away as within the reasonable range of disagreement between experts (§17).

55.For these reasons, I give the Plaintiff leave to adduce additional expert evidence of Prof Lieh Mak on whether Mr Leiduck was incompetent from January 2008 to January 2013.

56.I will hear the parties on costs and consequential directions for further conduct on 25 April 2014.

Mr John M Y Yan SC and Ms Sara Tong, instructed by Messrs Baker & McKenzie, for the Plaintiff

Mr Horace Wong SC and Mr Clark Wang, instructed by Messrs Robertsons, for the Defendants