FUNG SHING CHUNG v. CHOI KING HUNG

HCA 2860/2018

[2023] HKCFI 2730

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2860 OF 2018

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BETWEEN

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REASONS FOR DECISION AND RULING ON COSTS

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A. Introduction

1.  The Defendant took out a summons 2 clear days before this pre-trial review for leave to file his 4^th supplemental witness statement (“4^th SWS”). I have dismissed the summons. Here are my reasons.

B. Factual background

2.  The Plaintiff’s case is that on or about 12 September 2013, he made a loan of RMB 8 million to the Defendant, at an interest rate of 5% per annum repayable on demand (“the Loan”). This action is the Plaintiff’s claim for payment.

3.  The Plaintiff relied on the following documents by which the Defendant was said to have acknowledged the Loan：

(1) 3 Memoranda of Understanding dated 13 April, 2016, 4 May 2017 and 4 July 2017. One Ms Jessie Chan was allegedly present in the office on all 4 occasions when the 4 Memoranda were signed.

(2) A further Memorandum signed by the parties dated 3 August 2018 (“the Memorandum”), by which the Defendant acknowledged that the outstanding amount of the Loan calculated up to 31 August 2018 was US$1,014,983.32.

4.  The Defendant did not repay. He disputed the existence of the Loan. In the first version of his defence filed on 27 December 2018, he alleged, amongst others, that he was intoxicated at the time of the signing of the Memorandum and thus lacked the capacity to agree the contents. In the 5^th version of his defence filed on 27 March 2023, he claimed that the first 3 Memoranda were forged.

5.  The Defendant also made a counterclaim with respect to 6 cheques, which was disputed by the Plaintiff for reasons that did not concern this summons.

6.  The parties have filed multiple witness statements. A supplemental witness statement of Ms Jesse Chan was filed on 3 October 2023 (“Chan’s 3^rd WS”), in answer to the Defendant’s 5^th version of the defence.

7.  The Defendant claimed that it was after Chan’s 3^rd WS was filed that he knew of the dates of execution of the 4 Memoranda and that Chan was there to witness the executions. The Defendant claims that he had discovered documentary evidence in rebuttal and hence filed this summons.

8.  The trial would commence on 8 January 2024 with 6 days reserved.

C. Legal principles for grant of leave to adduce late witness statements

9.  As stated in §34 of PD 5.2, the pre-trial review is not an extension of the case management conference and late interlocutory applications may be dismissed on delay alone. This is because ample time had usually been given to the parties to do so before a case was set down for trial. There should be no ambush on the opponent. A late application could be dismissed on the ground of lateness alone. See Echelles Riffiaud S.A. v the Secretary for Justice [2022] HKCFI 3486, §9; [2022] HKCFI 2675, §13.

10.  Whether to give leave to adduce late witness statements is a case management exercise. The discretion is to be exercised after the Court has considered all the circumstances, including prejudice caused to the opponent in having to divert his attention from preparation for the trial to answering such a late summons. The Court also bears in mind the objectives of reaching a just resolution of disputes in accordance with the substantive rights of the parties and dealing with cases expeditiously, costs-effectively and proportionately.

11.  I also echo the forceful comments of Mimmie Chan J in Converge Design and Construction Co Ltd v Mount Kelly International Limited [2020] HKCFI 2433, §2:

“The courts have emphasized on repeated occasions that CJR is about early preparation for trial, in order to achieve the objectives of the Rules. It needs no further reminder that delay itself is a ground to refuse a late application, either for discovery or for the introduction of new pleadings and evidence, when trial is imminent. The onus is on the applicant to justify its delay and to show good reason for leave to be granted. Whilst delay is to be weighed against the probative value and relevance of the pleadings and the evidence sought to be introduced, it need not be emphasized further that the primary aim in the Court’s exercise of its powers is to secure the just resolution of disputes in accordance with the substantive rights of the parties. Such just resolution of disputes requires due consideration of the time occasioned by last minute applications to introduce amendments to the pleadings and/or evidence on the eve of trial. Prejudice is inevitably caused, in the disruptions in the preparation for trial, the need to consider the new evidence and the need to respond thereto, coupled with the need to locate witnesses at the last minute to consider and if necessary to respond to the new evidence, and the last minute distraction from the proper focus and priority of the due preparation for trial. This is actual prejudice.”

12.  Further, Mimmie Chan J held that it is not the function of witness statements to argue with opposing witnesses, and it is not the proper conduct of litigation to have rounds of statements of point by point rebuttal of the opposing witness statement: Converge Design, §7.

D. Reasons for refusing leave

13.  Firstly, this was a late application served only after the Plaintiff’s filing of his skeleton submission for the pre-trial review.

14.  Secondly, the Defendant had attempted to adduce a late witness statement already and it was dismissed by A Chan J on 6 January 2023. A Chan J observed that there had already been an “extraordinary proliferation of evidence” filed in this case and that the Defendant had been making use of late applications as a delaying tactic: [2023] HKCFI 100, §§20, 28-29.

15.  Thirdly, the Defendant has misled the Court to say that he had only received Chan’s 3^rd WS on 3 October 2023. The fact was that a draft Chan's 3rd WS was given to the Defendant a month earlier, on 5 September 2023, as an annex to the Plaintiff’s summons for leave. There was no explanation as to why the Defendant had to wait for a total of 5 weeks before taking out the present summons.

16.  Fourthly, the allegations in Chan’s 3^rd WS were not new except the hours of execution of the Memoranda. The dates of those Memoranda have been disclosed by the Plaintiff in his witness statement as early as 26 August 2020, §§11, 13 and 15 and the witness statement of Ms Jesse Chan dated 31 March 2021, §§23(b), (c) and (e). The facts that the Memoranda bore dates which were the same as the dates of execution and that Ms Jesse Chan was present when the Memoranda were signed were all pleaded in the reply and defence to counterclaim filed on 15 May 2023. There was no reason why the Defendant could not have tried to locate the documentary evidence in rebuttal earlier and include §§1-8 of the 4^th SWS in earlier witness statements.

17.  Fifthly, the purported contents of the 4^th SWS were not in answer to “new” allegations in Chan’s 3^rd WS:

(1) §§9-11 of the 4^th SWS sought to produce evidence of a photo and calendar to support the Defendant’s case that he was intoxicated on the date of execution of the Memorandum.

(2) §12 of the 4^th SWS expressly referred to the Plaintiff’s first witness statement, which was filed over 3 years ago, on 26 August 2023. The Defendant sought to adduce further documents dated 2013 to 2018. Such evidence could have been produced earlier in other witness statements.

(3) §13 of the 4^th SWS reiterated the Defendant’s position in his witness statement dated 26 August 2020. He should not be allowed to repeat.

18.  Sixthly, the Defendant’s conduct was more egregious when are took into account his late application for amendment to introduce a serious cause of action in forgery only on 15 March 2023, over 4 years since he first filed his defence. He did not file a supplemental witness statement pursuant to the amendment but made a late application for filing expert evidence, which had caused difficulty to the Plaintiff. The experts would only meet by 1 November 2023 and the joint report would only be ready for filing by 13 December 2023. The trial is to take place on 8 January 2023.

19.  Such late expert reports would already cause prejudice to the Plaintiff. The late 4^th SWS would create a further burden on his preparation of the case.

20.  Seventhly, it was wrong for the Defendant to think that the Court should give him the indulgence of responding point by point rebuttal of Chan’s 3^rd WS.

21.  For all the reasons given, in particular the prejudice that would be caused to the Plaintiff for the late filing, I declined to give leave to file the 4^th SWS.

22.  Costs of the summons should follow the event and be to the Plaintiff.