LWF v. HCP

FCMC 12198 / 2020

[2025] HKFC 69

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NO. 12198 OF 2020

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BETWEEN

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DECISION
(Expert Evidence)

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A. The Application

1.  By a Summons dated 25 November 2024 (“the Summons”), the Respondent (“H”) applied for leave to rely on an expert report (“Report”) and to appoint Mr Zhang as H’s expert witness in opposition to the Section 17[1] Summons filed by the Petitioner (“W”) on 20 April 2022 (amended on 29 January 2024) (“Section 17 Summons”).

B. Background

2.  H and W are now aged 83 and 79 respectively. They were married in 1966. In December 2020, W presented the petition for divorce on the ground of 2 years separation. The decree absolute was issued on 18 May 2021.

3.  H is a merchant. He has business in the Mainland and Hong Kong. W is a housewife. Both parties own shares in their family companies incorporated in the Mainland and Hong Kong respectively.

4.  The parties have conducted several rounds of mediations and a mediator-assisted financial dispute resolution hearing. They have reached agreement on the distribution of most of their valuable assets in Hong Kong.

5.  They do not agree on the valuation and distribution of their Mainland family companies and landed properties. One of these assets is the Si Ma Property.

6.  In mid-2021, H (together with the family company) sold the Si Ma Property to a third party without prior notice to W (“Si Ma Sale”).

7.  In November 2021, H disclosed through a letter from his solicitors, PKCC, that the Si Ma Property was sold on 14 July 2021, 50% of the transfer price (RMB 15,000,000) was spent, and it was anticipated that there would be a commission fee of RMB 6,000,000.

8.  By another letter from PKCC in January 2022, H disclosed that the contract for the sale of Si Ma Property was made on 30 August 2021. The contract was signed by H in his own name and on behalf of a family company. As at 31 December 2021, RMB 23,500,000 was received from the Si Ma Sale, out of which RMB 15,000,000 was spent.

9.  W contended that the Si Ma Sale was a transaction made with an intention of defeating her claim for ancillary relief. She took out the Section 17 Summons and sought to set aside, inter alia, the Si Ma Sale.

10.  H denied. His case was that the family company suffered serious financial loss since 2020. The sale proceeds from the Si Ma Sale were used to pay the family company’s operating expenses. The sale, H said, was not made with an intention of defeating W’s ancillary relief claims.

11.  In opposition to the Section 17 Summons, H filed an 8^th Affirmation on 2 December 2022 (“H-8^th”). Among the exhibits of H-8^th is the Report described as《專項審計報告》dated 16 October 2022, issued by Guangdong Fuhe Certified Public Accountants Partnership (廣東富和會計師事務所). The makers of the Report are Mr Zhang and a Mr Liu. The purpose of the Report was to provide audited opinion (審計意見) on the receipts and expenses of the money received from the Si Ma Sale. The makers of the Report have not signed a statement of truth nor made declaration of his duty as required under O38 r37A to r37C.

12.  W took issue on the production of the Report without leave but she has not taken out application to exclude the Report from evidence.

13.  At the last CMH, I invited both parties to clarify their positions on this issue and make necessary applications, if they so wish, before the next CMH in December 2024. H took out the Summons in November 2024.

C. Grounds of H’s application

14.  H’s primary case is that he is entitled to adduce expert evidence without leave under O38 r36(2) of RDC[2].

15.  His fallback case is that leave should be granted to admit the Report in evidence for the Section 17 Summons pursuant to O38 r36(1) of RDC.

16.  Rule 3 of MCR[3] provides that:

“Subject to the provisions of these rules and of any enactment, the Rules of the High Court (Cap. 4 sub. leg. A) shall apply with the necessary modifications to the commencement of matrimonial proceedings in, and to the practice and procedure in matrimonial proceedings pending in the Court of First Instance or in the District Court.”

17.  Pursuant to Rule 3 of MCR, the RHC[4] (not RDC) shall apply to the present matrimonial proceedings with necessary modifications. Since the provisions of O38 r36 of RDC and of RHC are the same, I take H’s reference to RDC was to RHC in this application.

D. Whether H can adduce the Report as expert evidence without leave of the Court

18.  O38 r36 of RHC provides that:

“(1) Except with the leave of the Court or where all parties agree, no expert evidence may be adduced at the trial or hearing of any cause or matter unless the party seeking to adduce the evidence –

(a) has applied to the Court to determine whether a direction should be given under rule 37 or 41 (whichever is appropriate) and has complied with any direction given on the application.

(2) Nothing in paragraph (1) shall apply to evidence which is permitted to be given by affidavit or shall affect the enforcement under any other provision of these rules (except of Order 45 rule 5) of a direction given under this Part of this Order.”

19.  The Hong Kong Civil Procedure 2025 §38/36/1 at p.984 explains the rationale of r36(2) as follows:

“This rule does not apply to expert evidence which is permitted to be given by affidavit (r.36(2)). The obvious reason is that the filing of an affidavit and its service on the other parties is as effective a means of securing the disclosure of expert evidence as is provided by Part IV of this Order; and moreover, it would be highly impracticable to apply the provisions of this Part of the Order to proceedings, such as interlocutory proceedings in which evidence is normally given by affidavit.”

20.  §20 of Practice Direction 15.12 expressly stated that O38 of RHC applies with necessary modifications to contested matrimonial proceedings unless the Court orders otherwise:

“For the avoidance of doubt, those provisions in Order 38 of the RHC/RDC, in relation to “Expert Evidence” and any Practice Directions issued in connection therewith, shall, unless the Court orders otherwise, apply with necessary modifications, in defended / contested Matrimonial Proceedings / Family Proceedings when an expert needs to be instructed, subject to the directions hereinafter set out in this part.”

21.  This is not a case relating to children matters, the directions set out in §21 of PD 15.12 are not engaged.

22.  Before dealing with the applicability of O38 r36(2), it is of note that the Report exhibited to H-8^th was not put forward as an expert evidence before the Court. It was not verified by a statement of truth pursuant to O38 r37A. No reference was made to the provision of the code of conduct to the makers as required under O38 r37B. The makers of the report had not made declaration of their duty to the Court as required under O38 r37C. See: Tang Chi Chung v Tang Sun Yip, [2016] 1 HKC 528, §12; Regal Shining Ltd v Secretary for Justice [2014] HKLRD 832, §30.

23.  In H’s 13^th affirmation filed in support of the Summons (“H-13^th”), he attempted to rectify the above defects by exhibiting a witness statement signed by Mr Zhang on 29 July 2024 (“Zhang Statement”) in which Mr Zhang referred to the Report, made a declaration of his duty to the Court and signed a statement of truth.

24.  Moving to the consideration of O38 r36(2), under Rule 3 of MCR and §20 of PD15.12, O38 shall apply to matrimonial proceedings with the necessary modifications to the practice and procedure in matrimonial proceedings.

25.  Relevant to this application is the different practices on filing of affidavit evidence. In general civil cases, parties are usually directed to file witness statements (not affidavit) as their evidence for the trial. However, the practice of the Family Court is to direct parties to file affidavit as evidence for the trial including, for example, on ancillary relief dispute, and as in the present case, on claims under Section 17 of MPPO.

26.  It is inappropriate, in my view, to apply O38 r36(2) to matrimonial proceedings without suitable modifications taking heed of the above difference in practice. As otherwise, arguably, expert evidence can be adduced without leave in most of the proceedings in matrimonial cases including those that are determinative of the parties’ substantive rights. This is not the rationale of r36(2). It is not impracticable (let alone highly impracticable) to apply Part IV of O38 in the conduct of the Section 17 Summons. It is in fact common for the parties to seek leave of the Family Court to adduce expert evidence for use at trial although evidence is permitted to be given by affidavit.

27.  It is my view that O38 r36(2) does not operate to permit the use of expert evidence without leave for the trial of the Section 17 Summons even though evidence are directed to be given by affidavit. Neither is it desirable for case management purposes to allow the filing of expert evidence without leave in this circumstance.

28.  Mr Lai, counsel for H, cited three cases to support H’s primary case.

29.  The first one is New Well Master Company Limited (formerly known as Well Master Company Limited) v Tidjan Ananto, by Andreas Ananto, his Guardian Ad Litem [2023] HKCFI 1597.

30.  The plaintiff in this case took out an amended discovery summons pursuant to O24 r11 for discovery of documents said to be relevant to an application to represent the estate of the deceased defendant. The plaintiff sought at §§1-3 of the amended discovery summons disclosure of documents including the defendant’s wills, and at §4 for leave to adduce a proposed expert report prepared by a neurologist in relation to the testamentary capacity of the deceased. The plaintiff applied for leave to adduce the proposed expert report to support his amended discovery summons. K. Yeung J held that the plaintiff can rely on the proposed expert report for the purpose of the amended discovery summons without leave by operation of O38 r2(3) and r36(2) together.

31.  The second case is Tang Chi Chung v Tang Sun Yip [2016] 1 HKC 528, where the appellant sought to appeal against a declaration made by Chow J (as the learned judge then was) that the plaintiff was a member of a Tso as from the date of his birth and was entitled to enjoy all the rights of a member of the Tso. The grounds of appeal largely turn on Chow J’s treatment of the DNA report, being one of the documents considered in reaching the decision. The other evidence considered by Chow J was the affirmation of the father which confirmed that the plaintiff was his natural son and the birth certificate of the plaintiff.

32.  The appeal was dismissed as:

32.1. The DNA report did not qualify as an expert report under O38 as it was not verified by a statement of truth, it made no reference to the giving of code of conduct to the maker of the report and it did not contain a declaration of the maker’s duty to the Court as required by O38 r37A to r37C[5].

32.2. The admissibility of the DNA report was not challenged at the first instance hearing, as such the raising of an appeal point not argued below was not allowed[6].

32.3. Chow J was entitled to determine how much weight shall be placed on the DNA report, which was a piece of hearsay evidence.

33.  In obiter, the Court of Appeal referred to the rationale of O38 r36(2) in §14 of the decision (which is essentially the same as the rationale stated in the current issue of Hong Kong Civil Procedure cited in paragraph 19 above):

“14. The rationale is that the filing of an affidavit and its service on the other parties is as effective a means of securing the disclosure of expert evidence as is provided by Part IV of O 38; and moreover, it would be highly impracticable to apply the provisions of Part IV of O 38 to proceedings, such as interlocutory proceedings in which evidence is normally given by affidavit: Hong Kong Civil Procedure 2015, Vol 1 §38/36/1, p.808.”

34.  The third case is a ruling on an adjournment summons in CCMJ v SSM formerly known as SKL, FCMP 67/2010, 10 June 2015, in which Judge Own referred to O38 r36(2) and admitted a letter from a medical practitioner into evidence for the purpose of the adjournment summons.

35.  These three cases do not assist H. The expert evidence in the first and the third cases were admitted for interlocutory proceedings, namely a discovery summons and an adjournment summons. These interlocutory proceedings are very different from a trial of Section 17 Summons. The document in the second case was not adduced as expert evidence, and its admissibility as a hearsay evidence was not challenged at the first instance hearing.

36.  It is prudent for case management purposes to consider issues relating to expert evidence at direction hearings of the Section 17 Summons, so that proper directions (for example, on the scope of the expert evidence and whether a single joint expert or separate experts should be appointed) can be given to ensure that the trial will be conducted in a manner that meets the objectives set out in O1A r1. This prevents the parties from incurring unnecessary costs for the preparation of expert evidence which may subsequently turn out to be non-admissible or unhelpful to the proceedings.

E. Whether leave should be granted

37.  The legal principles applicable for leave to adduce expert evidence was summarised in Chui v Cheng [2024] 3 HKLRD 624 §28. I apply these principles without repeating them here.

38.  The parties are broadly in agreement with these legal principles except the principle summarised in §28.12 of Chui v Cheng[7]. Mr Lai cited Wong Hoi Fung v American International Assurance Co (Bermuda) Ltd & Anor [2002] 3 HKLRD 507 §11 in support of his submission that the Court should grant leave to adduce expert evidence if it could not be determined at that stage whether the expert evidence was related to the disputed issue. I do not agree with Mr Lai on this point. In a recent case, Shenzhen Futaihong Precision Industry Co v BYD Co Ltd [2018] HKCA 408, the Court of Appeal held that:

“12. … the court will not give directions for expert evidence to be adduced (carrying with it the incidence of substantial costs being incurred on its preparation and court time spent on the same) simply on the basis that the court cannot rule out a possibility of such evidence being relevant and helpful in the sense as discussed above. If the applicant for expert directions fails to persuade the court on relevance and necessity of such evidence, the application should be dismissed.”

39.  Applying the above principles, I am satisfied that the Report is relevant and necessary for the just resolution of the dispute in the Section 17 Summons.

40.  The Report set out the maker’s opinion, after reviewing documents provided by H and/or the family companies, on how and where the sale proceeds received from the Si Ma Sale were spent. It is thus relevant to the issues in the Section 17 Summons, in particular whether the Si Ma Sale was made with the intention of defeating W’s ancillary relief claims. It may also be helpful to assist the Court in reviewing the accounting documents.

41.  Further, contrary to the position taken by H at the previous CMH, H has now confirmed that if permitted by the Court, he would call Mr Zhang to give oral evidence at the trial, and would not object to the filing of expert evidence by W in response.

42.  On this basis, I grant leave to H to rely on the Report and appoint Mr Zhang to be H’s expert witness in the Section 17 Summons. I also grant W the leave to adduce her expert evidence on the same issue. Directions on expert evidence will be issued to the parties separately.

43.  On a nisi basis to become absolute in 14 days, I order that the costs of this application be in the cause of the Section 17 Summons.