GEOFFREY HOLDINGS LTD v. PERSONAL REPRESENTATIVE(S) OF LAM SHEK ALIAS LAM SHEK TAU. DECEASED

DCCJ 5054/2017
DCCJ 5053/2017
Consolidated

[2020] HKDC 1001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5054 OF 2017

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IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5053 OF 2017

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DECISION

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INTRODUCTION

1.  Before me is a summons filed herein on 18 May 2020 taken out by the plaintiff for leave to adduce expert evidence on quantum.  According to the summons, the plaintiff asked the Court to make the following orders:-

“ (1)  Leave be granted to the Plaintiff to adduce expert evidence on quantum from Mr Wong Kin Piu in the field of construction regarding the estimated costs for demolition of unauthorized structures on the land lots in question.

(2)     The Plaintiff shall file and serve the said expert report on quantum within 28 days from the Order to be made herein, and such expert report shall be adduced in evidence without calling the maker thereof unless otherwise directed by trial judge.

(3)     Costs of this application be in the cause.”

2.  The 1^st and 2^nd defendants oppose the application. The main ground of opposition is that the proposed evidence is not necessary to resolve the relevant issue in dispute.

3.  I heard the application on 30 November 2020.

4.  At the hearing, the plaintiff was represented by Mr Derek Chan, and the 1^st and 2^nd defendants by Ms Kelly Shum.  Both counsel have lodged their respective skeleton submissions on behalf of their clients.  The 3^rd defendant was not legally represented and does not appear.

5.  At the conclusion of the hearing, I indicated that I would hand down a written decision on 4 November 2020.  This is my decision.

BACKGROUND

6.  The plaintiff is a limited company[1] and the registered owner of certain portions of Section C of Sub-section 3 of Section C of Lot No 1212 in Demarcation District No 115, Yuen Long, New Territories (“the Land”)[2].  The plaintiff avers that the owner of the adjacent piece of land, a Mr Lam Shek, alias Lam Shek Tau, now deceased (the “Deceased”), had wrongfully entered and/or trespassed and occupied a portion of the Land identified in the plan annexed to the statement of claim as the “Green Area”[3].  It is also averred that another portion of the Land (which is identified in the said plan as the “Red Area” [4]) had wrongfully been entered and/or trespassed and occupied by unknown persons.  The plaintiff also asserts that structure(s) and/or canopy erected on the said Red and Green Areas were in breach of the Government Lease and/or the Building Ordinance, and the District Lands Officer had issued letter threatening to institute enforcement action against the plaintiff[5].

7.  After the commencement of the proceedings in relation to the Red Area, a Mr Lam Che Chung (“Mr Lam”) identified himself as the occupier of the Red Area[6]. After consolidation of the actions, Mr Lam was named as the 1^st defendant in his capacity as the appointed person to represent the estate of the Deceased; and he was also named as the 2^nd defendant in his personal capacity.  Unknown occupiers of the Red Area were named as the 3^rd defendant[7]. 

8.  The plaintiff claims against the defendants for vacant possession, as well as loss and/or damages to be assessed.  One of the losses are damages representing the costs for demolishing and/or removing the structure(s) and/or canopy on the Green and Red Areas[8].

9.  The 1^st and 2^nd defendants’ defence is that the Deceased and his family including Mr Lam had been in adverse possession of both Red and Green Areas and thereby acquired possessory title thereof by virtue of the Limitation Ordinance with the title of the plaintiff to the same being extinguished[9]. The 1^st and 2^nd defendants counterclaimed for a declaration in that effect.

EXPERT EVIDENCE INTENDED TO BE ADDUCED

10.  On 12 March 2019, Registrar Ho granted leave to the parties to exchange witness statements as to fact[10]. The plaintiff’s witness statement was made by a Mr Wong Kin Piu (“Mr Wong”)[11], who gave evidence in respect of the estimated costs for the demolition of the structures located on the Green and Red Areas.

11.  Upon obtaining counsel’s advice, the plaintiff took the view that the evidence given by Mr Wong was tantamount to an expert opinion, and hence leave from the Court is required in order for it to be admissible.  Correspondence was exchanged between the parties’ solicitors, but no consensus was reached[12]. The plaintiff therefore took out the present application for leave to adduce the same.

12.  At the hearing, Mr Chan made clear of the plaintiff’s position that the plaintiff would not rely on the witness statement of Mr Wong per se, but it would instead seek leave to adduce a proper expert report on quantum. 

13.  In his affirmation, Mr Lam put forth the following three grounds of opposition on behalf of the 1^st and 2^nd defendants:-

(a)     If the defendants ultimately prevail at trial, there would not be any need to demolish the structures, and the costs on instructing experts would be wasted[13];

(b)     The 1^st and 2^nd defendants were prepared to give an undertaking that they would demolish the structures within 42 days after the completion of the appellate process[14]; and

(c)     Since Mr Wong’s opinion was given in reliance of photographs taken in May 2019, the structures might no longer be the same shape at the time of the trial.  Accordingly, Mr Lam considered that Mr Wong’s evidence was of doubtful probative value[15].

14.  In the Skeleton Submissions of the 1^st and 2^nd defendants, Ms Shum raised two objections against granting leave to adduce the said proposed expert evidence on quantum[16]:-

(a)     The expert evidence was unnecessary as there were more cost-effective ways to address the issue; and

(b)     Mr Wong’s evidence was not probative to be admissible.

LEGAL PRINCIPLES

15.  Order 38, rule 36(1) of the Rules of the District Court provides that, except with the leave of the Court, or where all parties agree, or where the parties comply with any direction given in applications under rules 37 or 41, no expert evidence may be adduced at the trial or hearing of any cause or matter.  It is trite that the burden is on the applicant to show that the proposed expert evidence is relevant to the issue in dispute.  The Court has to examine the pleadings to determine whether the proposed expert evidence is required to resolve the issue in dispute[17].

16.  The test for the admissibility of expert evidence has been conveniently laid down by Madam Justice Chu J (as her Ladyship then was) in the Wong Hoi Fung case[18]. The test is thus:-

“11. … 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.

12.       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 s.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.”

17.  Mr Justice Bharwaney J also made the following observation in the Fung Chun Man case[19]:-

“9.     The enactment of the CJR did not result in a change to O.38, r.36 of the Rules of the High Court ("RHC"). However, after the enactment of the CJR, it is clear that the court's discretion, whether or not to grant leave to a party to adduce expert evidence, is to be exercised within the ambit of the court's management powers. Those powers must be exercised in the light of the underlying objectives of the CJR, including the need to ensure the cost effectiveness of the proceedings; to ensure that the case is dealt with expeditiously; to ensure reasonable proportionality having regard to the amount of money involved, the importance of the case, the complexity of the issues, and the financial position of each party; to ensure procedural economy in the conduct of the proceedings; and to ensure fairness between the parties.”

DISCUSSION

(1)             Mr Wong is a qualified expert

18.  Applying the test laid down in the Wong Hoi Fung case, the first question I need to ask is whether Mr Wong is qualified to give opinion evidence.  Ms Shum submitted in her skeleton submissions that Mr Wong was not qualified as an expert in respect of the issue concerning the demolition costs because he did “not have the necessary expertise to perform demolition works of village house”[20]. In her oral submissions, Ms Shum also criticized Mr Wong’s qualification on the basis that he was not an authorized person within the meaning of the Buildings Ordinance to co-ordinate the building works, which include the demolition works[21]. She also challenged the impartiality of Mr Wong because Mr Wong based his opinion solely on the quotation made by himself and did not seek out quotations from other contractors for the estimated costs of the demolition works. 

19.  I am not able to agree with Ms Shum’s submissions.  Firstly, I do not accept the general proposition that only those have expertise in performing the demolition works can give opinion on the estimate costs of the demolition works.  As Mr Chan rightly pointed out at his closing submissions, it is not necessary for an expert to possess any technical knowledge of the demolition works in order for him to give accurate opinion on the costs of the works.  Nor was Ms Shum able to pinpoint any special features in the present case that would render the said proposition valid here.  For these reasons, I also reject Ms Shum’s submission that only an authorized person within the meaning of the Buildings Ordinance could give expert opinion on the estimate costs of the demolition works.

20.  Ms Shum challenged Mr Wong’s impartiality on the basis that his opinion was based on the quotation given by him.  In my view, this challenge may be valid if Mr Wong will be the one who eventually carries out the demolition works and receives rewards (monetary or otherwise) for the works.  However, there is no evidence indicating that Mr Wong is such a person.  I do not find anything objectionable for Mr Wong to base his opinion on his own quotation. Moreover, as Mr Chan pointed out at the hearing, Mr Wong confirmed in his witness statement that the quotation was “based on reasonable workmanship and at a fair market price”[22]. In my view, Ms Shum’s criticism on Mr Wong’s impartiality is wholly unjustified.

21.  Ms Shum also criticized Mr Wong’s evidence in that he failed to seek quotations from other contractors.  I think Ms Shum may have confused between a non-expert to obtain a fair price and an expert to give his opinion on the price.  In the former case, it is indeed a good practice for non-expert to seek quotations from different contractors.  This practice may even be considered as an effective method to prevent corruption.  However, insofar as an expert is concerned, seeking quotation from other contractors is tantamount to asking an expert to consult other experts before an expert opinion is to be given.  This cannot be the correct approach.

22.  According to his curriculum vitae[23], Mr Wong obtained a higher diploma in building surveying and a bachelor’s degree in construction management.  He is an experienced project manager in the construction field and has been working as a director in a construction company for 9 years.  He had involved in over 60 projects ranging from building services improvements to alternation addition and renovation works.  As I said, I do not find it necessary for an expert to have actually performed the demolition works himself before he can give an accurate estimate for the costs of the works.  Accordingly, I am satisfied that, for the purpose of s 58 of the Evidence Ordinance, Mr Wong is qualified to give expert opinion in respect of the estimate costs of the demolition works. 

(2)             The proposed evidence is relevant

23.  The next question is whether the proposed evidence is relevant in determining a live issue between the parties in the present proceedings.  As mentioned earlier, the plaintiff prayed for relief in terms of damages to be assessed.  Such damages include the costs for the demolition of the structures located on the Red and Green Areas.  There is no doubt that it is a live issue between the parties in respect of the quantum of damages.  As Mr Chan rightly pointed out[24], in absence of any order for split trial, it is incumbent upon the plaintiff to adduce evidence to substantiate its claim for damages at trial[25]. Indeed, without such evidence, the plaintiff could at best obtain nominal damages even if the defendants are eventually found liability to pay damages in favour of the plaintiff.

24.  At the hearing, Ms Shum fairly accepted that the 1^st and 2^nd defendants would not dispute the relevancy of the proposed evidence.  I am therefore satisfied that Mr Wong’s opinion is relevant in resolving this issue.

(3)             There are no other reasons to exclude the proposed evidence 

25.  As I mentioned in the introduction of this decision, the main argument put forth by the 1^st and 2^nd defendants to oppose the admissibility of the proposed evidence of Mr Wong is that the evidence is unnecessary because there are more cost-effective ways to deal with the issue. At the hearing, Mr Chan criticized this argument on the basis that there was no authority in support of the proposition that necessity was a criterion for the admissibility of expert evidence.  He submitted instead that the only criterion for admissibility was relevancy. 

26.  However, as Mr Justice Bharwaney J observed, the admission of expert evidence is within the ambit of the Court’s case management powers.  Hence, in determining whether a piece of proposed expert evidence is admissible, the Court should have regard to the objectives of the CJR.  The Court may exercise its discretion to exclude the proposed expert evidence if it finds that its admission is inconsistent with the objectives of the CJR.  It is therefore necessary for me to deal with Ms Shum’s criticism on the lack of necessity to admit the proposed evidence.

27.  Ms Shum relied on the undertaking proposed to be given by the 1^st and 2^nd defendants that they were prepared to demolish the structures within 42 days after the completion of any appellate process[26].  Alternatively, Ms Shum submitted that the plaintiff might seek an order that if the defendants failed to demolish the structures within a certain period of time, the plaintiff would be at liberty to carry out the works and be entitled to recover the costs from the defendants on full indemnity basis[27].  In her oral submission, Ms Shum also asserted that the plaintiff’s prayer for vacant possession was inconsistent with the prayer for damages representing the demolition costs.

28.  First of all, as Mr Chan rightly pointed out[28], the 1^st and 2^nd defendants could not force the plaintiff to accept their undertaking that they would demolish the structures after the completion of all appellate process.  In his skeleton submissions, Mr Chan gave various reasons why it was reasonable for the plaintiff not to accept the proposed undertaking. 

29.  I accept Mr Chan’s submission that, because of the enforcement actions threatened to be taken by the Government, it is of paramount importance for the plaintiff to ensure that the demolition works are to be completed satisfactorily and expeditiously.  In my view, if the plaintiff is eventually successful to recover possession of the disputed areas, it is perfectly entitled for it to dictate as to how and when the demolition works are to be done.  In the circumstances of this case, it cannot be said to be unreasonable for the plaintiff to refuse to accept the proposed undertaking offered by the 1^st and 2^nd defendants.

30.  Ms Shum criticized Mr Chan’s submission on the basis that there was no evidence showing that the re-entry and the termination of the Government lease was eminent[29]. But, as mentioned above, the same has been pleaded in the amended consolidated statement of claim.  At this preliminary stage, what the Court can do is to take the facts as pleaded and assume they would be eventually proven at trial.

31.  Ms Shum secondly submitted that there was an alternative way to deal with the issue, namely that the plaintiff should have sought for an order for demolition with the full recovery of costs if the defendants fail to do so.  Ms Shum relied on the Ho Man Yuen case[30], where HH Judge MK Liu ordered (among others) that, in the event the plaintiff there failed to demolish and remove the relevant structures, the defendant was at liberty to do the works and to recover the costs for the works from the plaintiff in full indemnity, and the amount of the costs would be assessed by the Court if not agreed.

32.  At the hearing, Mr Chan made two observations in respect of the Ho Man Yuen case.  First, Mr Chan pointed out that the order was in fact made in pursuance of the relief sought by the defendant there in its counterclaim. Secondly, the order involved the Court’s assessment of the amount of the costs, which was indeed what the plaintiff sought for in the present case. 

33.  In my view, the Ho Man Yuen case is clearly distinguishable from the present one.  I also agree with Mr Chan that the execution of such an order would involve many variables, and more likely than not that it would attract satellite litigations.  Insofar as the present case is concerned, I cannot see how such an order is consistent with the objectives of the CJR.  Accordingly, the Ho Man Yuen case cannot assist the 1^st and 2^nd defendant’s case in opposing the admissibility of the proposed evidence.

34.  Thirdly, Ms Shum submitted orally at the hearing that the reliefs sought by the plaintiff (namely vacant possession and damages for the demolition of the structures) were inconsistent with each other.  I must say that the logical connection between vacant possession and the demolition of the structures on the areas is not obvious to me.  According to its usual meaning, “vacant possession” means that the property is to be empty of people and the purchaser is able to assume and enjoy immediate and exclusive possession, occupation, and control of the property.  Chattels on the property must also be emptied if such chattels substantially prevent or interfere with the enjoyment of the right of possession of a substantial part of the property[31]. In the present case, there is no evidence that the structures amounted to chattels and that they would substantially prevent or interfere with the plaintiff’s right to enjoy the parts of the areas.  There is no basis for me to draw any inference to that effect.  The question whether vacant possession would necessarily imply the demolition of the structures is one of fact that is to be determined by the trial judge.  In any event, I have no doubt that the parties’ legal representatives would ensure that the final order of the Court would be consistent, practicable, or workable.  Accordingly, I do not accept that the alleged inconsistency of the reliefs sought by the plaintiff could resist the admissibility of the proposed evidence of Mr Wong.

35.  Ms Shum also submitted that the admission of the proposed expert evidence would lengthen the trial and increase the costs[32]. With all due respect, I do not agree.  Based on the materials placed before me, I am of the firm view that the most cost-effective way to resolve the dispute is to have the damages of the demolition costs to be assessed by the trial judge at the trial.   I must admit that I cannot see any better option than that.  This submission is therefore rejected.

36.  Ms Shum further submitted that the 1^st and 2^nd defendants should be entitled to cross-examine the expert witness at the trial.  In my view, it is premature for me to make order for cross-examination at this preliminary stage.  Clearly, there is nothing that prevents the 1^st and 2^nd defendants from applying to the trial judge for an order for cross-examination where and when it is appropriate.

37.  Ms Shum criticized the proposed evidence given by Mr Wong on the grounds that the evidence is qualified in terms of validity and that Mr Wong only relied on the photographs in giving his opinion and did not have any personal knowledge of the structures[33]. Mr Lam also deposed that the structures might have changed when the trial was to be taken place.  As Mr Chan rightly pointed out, these criticisms amounted to an attack on the weights of the evidence, which issues falls on the trial judge to decide.  In any event, I do not find these criticisms can justify the exclusion of the proposed evidence.

38.  Ms Shum finally criticized the proposed evidence on the basis that there was no evidence that Mr Wong was fully aware of his duty as an expert to the Court[34]. Initially, I found that this criticism had some force, as I noted that Mr Wong’s witness statement contained no declaration in compliance with Order 38, rule 37B(1).  However, the force of this argument vanished when Mr Chan confirmed at the hearing that the plaintiff did not seek to rely on Mr Chan’s witness statement per se, but would instead seek leave to adduce a proper expert report on quantum.

(4)             Conclusion

39.  For the reasons as aforesaid, I am satisfied that Mr Wong is qualified to give his opinion in respect of the estimate costs of the demolition works and that such opinion is relevant in determining a live issue between the parties at trial.  There are no other reasons for me to exclude the proposed evidence of Mr Wong.  I would therefore make an order in terms of paragraphs 1 and 2 of the plaintiff’s summons filed on 18 May 2020.

40.  Ms Shum confirmed at the hearing that the 1^st and 2^nd defendants would not seek leave to adduce expert evidence on quantum at this stage.  I therefore would not make any order to that effect.

COSTS

41.  While the plaintiff sought in the summons for an order that costs be in the cause, Mr Chan submitted at the hearing that, in light of the opposition of the 1^st and 2^nd defendants, the plaintiff would ask for costs of the application.  In the present case, I do not see any reason why I should depart from the usual principle that costs should follow the events. Accordingly, I would order that the 1^st and 2^nd defendants should pay the plaintiff’s costs of this application.  I also consider it appropriate to conduct a summary assessment of costs.

42.  According to the plaintiff’s statement of costs, its costs of this application amounted to $79,665.99.  On a board bush approach, I summarily assess the plaintiff’s costs of this application at $55,000.

DISPOSITION

43.  For the reasons as aforesaid, I make an order in terms of paragraphs 1 and 2 of the plaintiff’s summons filed herein on 18 May 2020.  I also order that the 1^st and 2^nd defendant should pay the plaintiff’s costs of this application, summarily assessed at $55,000, payable forthwith.

44.  Lastly, I would like to thank Mr Chan and Ms Shum for their assistance rendered to this Court.