HIGH FASHION NEW MEDIA CORPORATION LTD v. LEONG MA LI

HCMP 932/2020

[2021] HKCFI 3466

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 932 OF 2020

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D E C I S I O N

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A.  Introduction

1.  The present application before the court is an interlocutory matter relating to these committal proceedings, brought by the plaintiff concerning the defendant’s alleged breaches of an injunction order dated 5 December 2014, made by Chow J (as he then was)  in underlying proceedings HCA 1953/2014.

2.  The relevant order restrained the defendant from dealing with capital bank accounts of the plaintiff’s wholly-owned subsidiary, unless signatures of both the defendant and a representative of the plaintiff had been obtained.

3.  The defendant has already been found guilty of contempt of that order once before, by Chow J on 8 August 2017 in HCMP 108/2016 and HCMP 1707/2016.  The plaintiff says that further unauthorised transactions have been discovered even after those findings of contempt, and it is those breaches which are the subject of the present committal proceedings.

4.  A prior interlocutory hearing was dealt with by G Lam J (as he then was)  on 25 February 2021.  The proper meaning of orders made on that date are at issue.  The substantive hearing has been fixed for dates in May 2022.

5.  The issue arises on the defendant’s summons dated 25 March 2021, made pursuant to section 48 of the Evidence Ordinance Cap 8 (“EO”), by which the defendant seeks orders that:

(1)  the defendant be allowed to call and cross-examine Yau Oi Kwan (“Ms Yau”), who deposed an affirmation dated 1 August 2020 (“Yau Affirmation”);

(2)  the plaintiff should make the necessary arrangements to secure the attendance of Ms Yau at the substantive hearing of these proceedings; and

(3)  unless the plaintiff secures the attendance of Ms Yau for cross-examination at the substantive hearing, the Yau Affirmation shall be excluded on the ground that it is hearsay.

6.  The plaintiff has no objection to the first paragraph of the summons, and apparently never has had.  However, the other two paragraphs are controversial.

7.  Numerous affidavits have been filed, and significant heat has clearly been generated in these and the underlying proceedings.  I am, therefore, grateful to the succinct written and oral submissions of Mr Roger Phang, Counsel for the defendant, and Ms Eva Leung, Counsel for the plaintiff, for creating less heat and for throwing more light on the arguments.

8.  Ultimately, the proper orders to make on the defendant’s summons seem to me to be clear.

B.  Further Background

9.  By way of further background, prior to the directions hearing on 25 February 2021, the plaintiff served notice under section 47A of the EO that it intends to adduce the Yau Affirmation and its exhibits as hearsay evidence.

10.  In his skeleton argument filed for that directions hearing, Mr Phang reserved the defendant’s right to apply for leave to call Ms Yau as a witness and cross-examine her on the Yau Affirmation pursuant to section 48 of the EO, and suggested allowing 21 days for such an application.  On that basis, Mr Phang submitted that the Court might make directions including for such an application and a direction that:

Save and except the [Yau Affirmation] and the exhibits therein being hearsay evidence, all other affirmations filed herein shall stand as evidence in chief in the substantive hearing.

11.  Mr Phang’s proposals as varied by the Court ultimately became paragraphs 3 and 4 of the Order made by G Lam J on that day.  As they appear on the face of the Order they are:

3.  Save and except the [Yau Affirmation] being hearsay evidence, no affirmation filed herein may be relied upon unless the deponent attends the substantive hearing for cross-examination;

4.  The Defendant, if so advised, do within 28 days hereof take out an application under [section 48 of the EO] for leave to call [Ms Yau] as a witness and cross-examine her on the [Yau Affirmation] and the exhibits therein as if she had been called by the Plaintiff

C.  Relevant Provisions

12.  Section 48 of the EO provides as follows:

Power to call witness for cross-examination on hearsay statement, etc

Rules of court may provide that where a party to civil proceedings produces hearsay evidence of a statement made by a person and does not call that person as a witness –

(a)  any other party to the proceedings may, with the leave of the court, call that person as a witness and cross-examine him on the statement as if he had been called by the first-mentioned party and as if the hearsay statement were his evidence in chief;

(b)  any party to the proceedings may call additional evidence to attack or support the reliability of the hearsay statement or to attack or support the reliability of that additional evidence.

13.  The relevant rule in the RHC is Order 38 rule 21, which provides as follows:

21.  Power to call witness for cross-examination on hearsay evidence and to call additional evidence to attack or support hearsay evidence (O. 38, r. 21)

(1)  Where a party tenders as hearsay evidence a statement made by a person but does not propose to call the person who made the statement to give evidence, the Court may, on application—

(a)  allow another party to call and cross-examine the person who made the statement on its contents;

(b)  allow any party to call—

(i)  additional evidence to attack or support the reliability of the statement;

(ii)  additional evidence to attack or support that first-mentioned additional evidence.

(2)  Where the Court allows another party to call and cross-examine the person who made the statement, it may give such directions as it thinks fit to secure the attendance of that person and as to the procedure to be followed.

14.  As Mr Phang submits, it is not in every case that where a party seeks to adduce hearsay evidence, the other party would be entitled to seek an order from the court directing the former party to procure the attendance of the maker for cross-examination.  The discretion is to be exercised in light of various matters, including the impact of that piece of hearsay evidence, the relationship of the maker with either party, the history of the case, the practicalities as to the procurement of the maker to give evidence, and other relevant considerations.

15.  Mr Phang also points to Order 38 rule 2, which gives the Court the discretion to order an affidavit of any witness to be read at the trial if in the circumstances of the case it thinks it reasonable to so order, and the further discretion to order the production of the deponent for cross-examination as the Court thinks fit.

D.  The Contest

16.  Ms Leung’s opposition to the order sought by the defendant is based on the following reasons:

(1)  on 25 February 2021, the Court has already made the direction that the Yau Affirmation would be adduced as hearsay evidence and the deponent (Ms Yau)  is not required to attend the substantive hearing;

(2)  the defendant’s purpose for calling Ms Yau is to support the defendant’s own case; and

(3)  it would not be in the interests of justice to exclude the Yau Affirmation, as her affirmation has clear probative value and would assist the Court in determining the key issues at trial.

E.  Attempted Re-Argument?

17.  Ms Leung submits that G Lam J’s Order of 25 February 2021 is very clear, that the Yau Affirmation has been accepted as hearsay evidence and Ms Yau has been excused from attending the substantive hearing.  Ms Leung relies on the fact that the order was made by consent – she points to the words proposed by Mr Phang – when the defendant had no objection to the Yau Affirmation being adduced as hearsay evidence, only making reservation that she might consider applying under section 48 of the EO to call Ms Yau for cross-examination.

18.  So, says Ms Leung, the Court should not now entertain the defendant’s change of mind on an agreed direction.

19.  In response, Mr Phang asks for paragraph 3 of the Order to be read in context, and together with paragraph 4.  G Lam J having been plainly aware of the proposed application under section 48, he could not have intended pre-emptively to make any orders restricting the scope of the orders that might be made on such an application.

20.  I am of the view that Mr Phang is correct. Addressing Ms Leung’s first submission, the Yau Affirmation has been recognized as hearsay evidence, but I do not think Ms Yau has also already been excused from attending the substantive hearing.  Of course, it is right that the recognition at the time of making the Order on 25 February 2021 was that the Yau Affirmation was hearsay, but that is precisely what might trigger the application under section 48 which was indeed foreshadowed. Describing it as hearsay could not have been intended to pre-empt whatever orders the Court might ultimately think appropriate on the foreshadowed section 48 application.

21.  Further, the exception carved out in paragraph 3 of the Order seems to me properly to reflect that fact.  Whilst there remained an issue as to how the evidence of Ms Yau might be dealt with on the recognition that it contained hearsay evidence and might be the subject of section 48 application, no such issues remained as regards the affirmations of other deponents, so that the Court could direct that their affirmations would not be able to be relied upon unless the deponents were to attend the hearing for cross-examination.

22.  Put shortly, I do not think G Lam J has already decided that the Yau affirmation should be read at the substantive hearing, regardless of whether or not she attends for cross-examination.

F.  Who Should Procure Ms Yau’s Attendance?

23.  Ms Leung relies on a passage in the evidence filed by the defendant which states that the purpose of calling Ms Yau is that she is a key witness who could give evidence “relevant to the Defendant’s case that there was no genuine intention to honour the undertaking to pay all legitimate expenses of” the subsidiary company.  So, Ms Leung says, if the defendant wishes to call Ms Yau to support her own case, the proper way is to issue a writ of subpoena to secure Ms Yau’s attendance at the substantive hearing.

24.  Mr Phang says this turns the true position on its head.  It is the plaintiff which has adduced the evidence in the Yau Affirmation that the plaintiff had not breached any undertaking.  That is seriously disputed by the defendant, who (as is accepted)  is entitled to cross-examine Ms Yau on the factual basis for her to make that statement. So, says Mr Phang, the defendant is seeking to do no more than cross-examine Ms Yau on her evidence which the plaintiff is relying on, so that the Court can assess her credibility.

25.  Further, Mr Phang points out that the plaintiff has already contacted Ms Yau and secured her assistance in producing an affirmation specifically in support of the Amended Originating Summons in these proceedings.  Therefore, even if Ms Yau no longer works for the relevant subsidiary, it is likely that the plaintiff has maintained or can regain contact with Ms Yau.  Whereas, on the contrary, Ms Yau was never related to the defendant and the defendant has no contact with her. Further, says Mr Phang, where the Yau Affirmation was brought into existence by the plaintiff for the purpose of pursuing the contempt proceedings against the defendant, the burden of securing Ms Yau’s attendance ought to fall on the plaintiff.

26.  Of course, there may be little practical difference if Ms Yau is unwilling to attend without compulsion.  In those circumstances, whether at the request of the plaintiff or at the request of the defendant, it may be that the Court would be asked to issue a subpoena to compel her to attend.  I anticipate that where the parties agree that her evidence is relevant and probative to key issues, there would be no difficulty in obtaining such a subpoena.

27.  Though this issue is slightly more finely balanced, I agree with Mr Phang.  I think it does fall to the plaintiff to make the arrangements to secure Ms Yau’s attendance.

G.  What If Ms Yau Fails to Attend for Cross-examination?

28.  On this point, I agree with Ms Leung that it is well-settled that hearsay evidence is usually admissible in civil committal proceedings.

29.  On that basis, not least having considered the content of the Yau Affirmation and its exhibits, and the fact that both parties consider Ms Yau’s evidence as capable of being relevant and probative, it seems to me that the evidence should be admissible at the substantive hearing even if Ms Yau fails to attend for cross-examination, though of course subject to the weight to be determined by the trial judge with regard to the various features including those set out in section 49 of the EO.

30.  Indeed, how to assess admissible evidence, and what weight is to be accorded, are obvious matters for the trial judge. Therefore, it seems to me that it would be quite wrong for the Court at this interlocutory stage to shut out the evidence altogether on the contingent basis that Ms Yau might not attend the substantive hearing for cross-examination, notwithstanding the grant of an order under section 48 of the EO.

31.  So, even though I do not think G Lam J has already decided the point, as it happens I would independently reach the result that the Yau Affirmation shall stand as hearsay evidence even if Ms Yau does not attend the trial to be cross-examined, without prejudice to the parties being able to make submissions as to the weight to be given to it.

H.  The Result

32.  I make an order in the terms of paragraphs 1 and 2 of the Summons.  However, I refuse the requested order in the terms of paragraph 3 of the Summons.

[argument on costs]

I.  Costs

33.  Mr Phang asks for the costs of the summons, and Ms Leung of course says the opposite, or that there should at least be no order.

34.  I note that paragraph 1 of the summons was never really in dispute, though the Court would still need to be satisfied such an order is apt to the case.  I have found for the defendant on paragraph 2, but against her on paragraph 3 (which in the end Mr Phang did not really press at the hearing).

35.  I have considered whether the costs could simply be reserved to the Judge hearing the substantive application, but it seems to me that it is appropriate to make an order now.  In the circumstances described, and in the exercise of my discretion, I make no order as to costs.