FUNG SHING CHUNG v. CHOI KING HUNG

HCA 2860/2018

[2023] HKCFI 2332

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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D E C I S I O N

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THE APPEAL

1.  This is the Plaintiff’s appeal against Master Hui’s Order dated 20 July 2023, by which the Master, inter alia, granted leave for the Defendant to adduce handwriting expert evidence.

2.  It is established law that the present appeal is dealt with by way of re-hearing under Order 58, r 1, and this Court would treat the Defendant’s Summons for expert evidence as though it came before this Court for the first time. (See: Hong Kong Civil Procedure 2023, Vol.1 at §58/1/2)

ANALYSIS AND DETERMINATION

3.  This appeal is dealt with by way of paper disposal. The parties have filed two rounds of written submissions and this Court has invited further submissions to clarify certain issues that this Court has raised with the parties.

4.  First, I must say that this application was made at a very late stage. The trial has already been set down and due to commence in January 2024. The Defendant’s case is that his former counsel advised that he would address the issue of the three previous memorandums at trial, and hence there was no need to amend his pleadings.

5.  In August 2022, the Defendant changed his counsel who advised the need to deal with the three previous memorandums by way of amendments to the pleadings. First, change of counsel is not a good explanation for the delay. In any event, there is no good explanation as to why no proper application for expert evidence was taken out in or around August 2022.

6.  Mr Kok for the Plaintiff has made a very powerful submission that the Defendant is guilty of serious and unjustified delay in applying for the expert evidence. Mr Kok is right that the applicable principles for late applications for leave to adduce expert evidence were set out in Tao, Soh Ngun v. HSBC [2018] HKCFI 2543 at §§5 to 6:-

“(1) Since the Civil Justice Reform, late applications are frowned upon and have a high threshold to pass. They can be dismissed on the basis of lateness alone (at §5(1));

(2) A late application should be accompanied by a full and frank account for its lateness, as the court would not grant any indulgence (even on terms as to costs) without a satisfactory explanation from the applicant (at §5(2), citing Chok Yick Interior Design v. Lau Chi Lun HCA 1480/2008 (5 May 2010), at §28);

(3) [E]ven if a prima facie case is made out for the admission of expert evidence, the court must also have regard to other relevant circumstances, such as the potential disruption to the trial, the prejudice to the other parties, and the explanation offered by the applicant in cases where a late application is made for expert evidence to be adduced;

(4) Expert directions should be sought as early as possible…. Expert directions should be fully complied with before a case is set down for trial. That is to enable the length of the trial to be fixed with reference to what really needs to be tried in terms of the expert evidence as distilled and identified in the experts’ joint report setting out their areas of agreements and disagreements and the reasons therefor; and

(5) If new expert evidence sought to be adduced at a late stage could derail the trial dates or prolong the trial beyond the time allocated for the case, the court may refuse leave, even if that means that the applicant would have great difficulties in establishing his case (at §6(5); Choi Yick (supra) at §32).”

7.  Mr Kok for the Plaintiff submitted that the Defendant’s present application was made extremely and unjustifiably late:-

(1) The three previous memorandums were already disclosed in the Plaintiff’s Supplemental List of Documents as early as 26 August 2020 (ie about 2.5 years before the Defendant’s Summons).

(2) Upon the Defendant’s request, the Plaintiff’s solicitors already provided copies of the three previous memorandums to the Defendant by 2/9/2020. The Defendant then specifically addressed the three previous memorandums in the Defendant’s Supplemental Witness Statement dated 25 May 2021 (ie 21 months before the Defendant’s Summons).

(3) Moreover, “[u]nder the CJR regime, parties and their legal representatives must address the question of expert evidence after the close of pleadings when they prepare their Timetabling Questionnaire”: Choi Yick, at §13. In the present case, in each of the Defendant’s Timetabling/Listing Questionnaires (from 2020 up to late 2022), the Defendant has throughout indicated that he did not intend to adduce expert evidence. Mr Kok, hence submitted that the Defendant has already had “ample opportunity to put his house in order”, and P is “entitled to assume” that the Defendant is not going to adduce any expert evidence at the trial: Wong Sui Yeung v. Chiu Kwong Wing [2005] 3 HKLRD 495, §§19, 26 (affirmed on appeal).

(4) Further, the Court expects that expert directions to be “fully complied with” before a case is set down for trial: Tao, Soh Ngun at §6(4). In this case, the Court ordered the proceedings to be set down for trial on 15 September 2022, and the trial dates were fixed on 18 October 2022. In the present case, the application was made more than 4 months after the trial dates were fixed.

8.  Secondly, I agree that the Defendant’s explanation for the delay in making his application is not a good one.

9.  Mr Kok also submitted that thirdly, the Defendant’s serious and unexplained delay would cause irreparable prejudice to the Plaintiff. The Defendant’s late attempt to adduce expert evidence would impose a “highly unfair burden” on the Plaintiff, in that it would “disrupt [P’s] trial preparation by diverting away attention and requiring expenditure of time and costs on the applications and the new matters arising therefrom, which is in itself a form of prejudice”: Credit One v. Wong Wun Heng [2019] 4 HKLRD 591 at §13, per G Lam J (as he then was); Tao, Soh Ngun at §5(4).

10.  It is also submitted that the Plaintiff would be unfairly and oppressively prejudiced by being forced to scramble in the limited time to prepare his expert evidence— bearing in mind that (i) the notorious difficulty in engaging handwriting experts in Hong Kong, and (ii) further investigations and steps would invariably need to be taken, including for obtaining appropriate samples from the Defendant to engage in any expert analysis.

11.  Mr Kok submitted that one matter is for certain— if leave for expert evidence were given as sought by the Defendant, the Defendant would effectively gain a significant and unfair litigation advantage solely by reason of his own unjustified delay. The trial is due to commence on 9 January 2024 (ie about 4 months away). The observations in Redland Precast v. Aes [2021] HKCFI 1342 are directly apposite (at §15; affirmed by the Court of Appeal in [2021] HKCA 1229, at §§25-27) — “Five months between granting leave to adduce further expert evidence and commencing trial is not… a reasonably fair timetable for the Defendant to consider [the expert’s] report, to engage another expert if that is what the Defendant decides to do, and to prepare the documents required for trial. It is obviously undesirable to adjourn and delay the trial again. The Plaintiff’s application does have impact on milestone dates, and there is prejudice to the Defendant if it should be required to make these last minute preparations before the trial commences. I do not consider that giving leave to the Plaintiff to adduce expert evidence at this stage, for the reasons it relies on, will be just or fair to the Defendant, when the Plaintiff itself has sat on its application for 12 months”. The observations in Redland Precast apply a fortiori to the present case, in which the Defendant inexplicably sat on his application for up to 2.5 years.

12.  Finally, the late introduction of expert evidence would inevitably prolong the trial beyond the time allocated, and it could even derail the trial dates. The Defendant’s application should be refused on the ground of lateness alone, “even if that means that the applicant would have great difficulties in establishing his case”: Tao, Soh Ngun at §6(5); at Choi Yick at§32.

13.  I am of the view that the submissions of Mr Kok are very persuasive and cannot be faulted.

14.  However, there is an important distinguishing fact in the present case which is the order of Master David Chan dated 22 March 2023. By such orders, the Defendant was allowed to advance a plea of forgery in relation to the three previous memorandums. The Defendant’s Summons to adduce handwriting expert evidence was taken out on 27 February 2023. I am of the view that once Master David Chan made his orders on 22 March 2023 and in the absence of any appeal against such orders, the Plaintiff should be aware of the fact that the Defendant would be allowed to adduce evidence to prove his newly pleaded case of forgery. Handwriting expert evidence is something on the agenda by reason of the Summons dated 27 February 2023.

15.  Subject to the issue of relevance which will be addressed below, it is difficult to justify that having allowed the Defendant to amend his pleadings to introduce a plea of forgery, then the Court should debar him from adducing handwriting expert evidence on the basis of delay when the Summons was taken out on 27 February 2023. It pre-dates the Orders of Master David Chan.

16.  On the issue of relevance, Mr Kok submitted that the Defendant has failed to show the relevance and necessity of the proposed handwriting evidence expert. It is correct that as set out by the Court of Appeal in Shenzhen Futaihong v. BYD [2019] 2 HKC 175:

“(1) [T]he 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… (at §12).

(2) If the applicant for expert directions fails to persuade the court on relevance and necessity of such evidence, the application should be dismissed: (at §12).

(3) Expert evidence ‘will not be helpful where the issue to be decided is one on which the Court is able to come to a fully informed decision without hearing such evidence’ (§6).

(4) There has to be a ‘solid evidential basis’ to support the application for expert evidence (at §§51 and 56); see also Lei Shing Hong Credit Ltd v. Accufast Ltd [2021] HKCFI 853 [P#3], at §§22(e)(iii), per K Yeung J.”

17.  Mr Kok for the Plaintiff submitted that first, the Plaintiff’s case against the Defendant on the subject Agreement is contained in and evidenced by the Memorandum dated 3 August 2018 (“Memorandum”) — and not the three previous memorandums for which expert evidence is sought. Indeed, the three previous memorandums were not even mentioned in the Statement of Claim.

18.  The three previous memorandums merely recorded the previous outstanding loan amounts and interests as at various dates in 2016 to 2017. The prior calculations in the three previous memorandums have since been updated and entirely superseded by the Memorandum dated 3 August 2018.

19.  Mr Kok submitted that there is no issue of “forgery” for the Memorandum. To the contrary, the Defendant expressly admits that he had signed the Memorandum on 3 August 2018. Hence, even taking the Defendant’s allegations at its highest, any alleged “forgery” in the three previous memorandums cannot relevantly bear on the real disputes between the parties.

20.  The same conclusion was reached in Chan Yuk Kwan v. Chau Yee Chai Henry HCA 6/2003 (12 May 2006) (affirmed by the Court of Appeal in CACV 228/2006 (3 January 2007), at §16), in which the defendants alleged forgery for the two amendments to the subject insurance policy— but there was no issue of forgery for the insurance policy itself. At first instance, the Court held as follows:-

“The defendants merely seek to prove that the two amendments were forged… Even if the court should find that these signatures on the two amendments were indeed forged, it still does not advance the defendants’ case because there was already the policy which was applied for in favour of the plaintiff.” (at §7)

21.  It is true that the Plaintiff is not relying on the three previous memorandums to prove its claims. However, that is not the point. The point is the Plaintiff is relying of the three previous memorandums to prove the credibility of his case. The parties have joined issues on the case of forgery in relation to the three previous memorandums. It is thus one of the factual issues that the trial judge has to deal with. The Plaintiff is not saying that he will not rely on the three previous memorandums at all during the trial. At the end of the day, after full ventilation of the evidence, it may well be the case that the issue on the authenticity of the three previous memorandums is a minor or even peripheral issue in this case. However, at this stage, the Court cannot say that a serious factual issue joined by the parties in the pleadings is irrelevant to the determination of the issues in this case.

22.  This is not a case where the Court cannot rule out the possibility that the handwriting expert evidence may be helpful at the trial. It is a case that the issue of forgery of the three previous memorandums is joined by the parties in the pleadings and subject to the issue of delay and prejudice, the Defendant should be allowed to adduce handwriting expert evidence to prove his case.

23.  Secondly, Mr Kok submitted that the Defendant’s proposed expert evidence should not be admitted because there is no evidential basis (still less any “solid evidential basis”) in support of such evidence: Lei Shing Hong Credit (supra), at §22(e)(iii); Shenzhen Futaihong (supra), at §§51, 56:-

(1) The Defendant has filed a total of four factual witness statements herein, which was described by Hon A Chan J as an “extraordinary proliferation of evidence”. However, the Defendant has never alleged in any of these rounds of evidence that the three previous memorandums (all bearing his signatures) were somehow “forged”.

(2) To the contrary, the Defendant specifically addressed the three previous memorandums in his supplemental witness statement dated 25 May 2021. It is pertinent to note that the Defendant’s own factual case is not that the documents were “forged” or that he had not signed them. Rather, the Defendant’s factual case is that (i) the Defendant does not recall having signed the three previous memorandums, and (ii) if the Defendant had signed on them, the Defendant positively believes that the three previous memorandums related to the cooperation business between the Plaintiff and the Defendant.

(3) Still further, even on the Defendant’s latest allegation (not contained in his witness statements), the Defendant could do no more than the bare and unparticularised assertion that the three previous memorandums were “forged”. Specifically, and as was found in Chan Yuk Kwan (at §7), the Defendant has raised “no evidence to show who was responsible for the alleged forgery” on the three previous memorandums at all.

24.  There is force in Mr Kok’s submissions. However, the draft handwriting expert report, if admitted and proved, is itself an important (albeit not in any way conclusive) factor to be taken into account in the court’s overall assessment of the authenticity of the three previous memorandums. I have not lost sight of the nature of the probative value of handwriting expert evidence and the factual witness who could testify as to the authenticity of the three previous memorandums. I am of the view that the handwriting expert report as attached to the application pursuant to the Summons is itself an evidential basis. I do not think it is a prerequisite for the Defendant to identify who actually forged his signature.

25.  Thirdly, Mr Kok submitted that the proposed handwriting evidence should not be admitted, since the Defendant has failed to show that it is necessary or helpful to the Court to come to a full informed decision. The leading authority with respect to handwriting evidence is Nina Kung v. Wong Din Shin (2005) 8 HKCFAR 381, in which the Court of Final Appeal observed the following:-

(1) “It can be seen that the courts generally prefer the direct evidence of witnesses who actually saw and heard what happened to the opinion evidence of an expert. This is especially so in the case of handwriting evidence because of the nature of such evidence” (at §15), per Chan PJ; and

(2) “[H]andwriting evidence is necessarily of a lower order of cogency than direct evidence of execution” (at §393), per Ribeiro PJ.

26.  In Chan Yuk Kwan (supra), the Court of Appeal affirmed the judge’s decision to dismiss the defendant’s application for expert evidence, and the it pertinently observed as follows:-

“[T]he first point to be made on these documents is that there is the signature of the agent/witness Money Chiu. So to my mind, the most important evidence in relation to these documents would be the evidence of the agent/witness: what she has got to say about these documents and how they came to be signed.” (at §12)

27.  Mr Kok submitted that applying the above legal principles, the proposed handwriting evidence is plainly unnecessary and unhelpful. In this case, there is direct evidence of factual witnesses as to the signing and execution of the three previous memorandums, including notably the factual evidence of the witness Ms Jessie Chan. Such evidence from the factual witnesses is the “most important evidence” for determining any allegation of “forgery”.

28.  As I said above, I have not lost sight of the above legal principles which I am sure the trial judge will duly take into account. However, it cannot be gainsaid that the proposed handwriting expert evidence is a piece of relevant evidence to be taken into account in the Court’s holistic assessment of all the factual evidence though at the end of the day, the Court may find it to be of little assistance or value. But this is not something for this Court to pre-judge at this stage. Putting the Plaintiff’s argument to its logical extreme, it would mean that under no circumstances could handwriting expert evidence be admitted. This cannot be right.

29.  Mr Kok further submitted that, even on a cursory view at this juncture, the Defendant’s proposed handwriting evidence is singularly unhelpful and lacks evidential value because:-

(1) As a start, the Defendant has only selected 13 known signatures for the expert analysis. In Nina Kung, the Court of Final Appeal observed that that the “limited range of known samples” (ie 18 samples) had “necessarily hampered” the experts’ analysis (at §§396 to 398).

(2) The Defendant had selectively hand-picked only 13 samples, when according to the Defendant’s own case, the Defendant would have had to sign numerous documents over the years in view of the parties’ very frequent business affairs. No explanation is given as to how and why only those limited samples were chosen.

(3) Further, the Defendant’s proposed expert failed to even compare the Defendant’s admitted signature in the Memorandum with those in the three previous memorandums — when they are on any view substantially similar. This starkly demonstrates the self-serving and unhelpful nature of the Defendant’s proposed expert evidence.

30.  I am of the view that it is not appropriate for this Court to rule out at this stage that the handwriting expert report is so defective that even if admitted, it has no probative value as submitted by Mr Kok. I agree that the issue of sample size has to be addressed at the trial when the Court has the full facts ventilated before it. It is not a ground for rejecting the evidence at this stage.

31.  In any event, if the Plaintiff really considers that the proposed handwriting expert report is so defective that it is not worthwhile to file his own expert report to dignify it, it is a matter entirely for the Plaintiff. The Plaintiff is entitled to make submissions at the trial as to why the proposed handwriting expert report has no probative value.

32.  Finally, this Court is keenly aware of the issue of prejudice to the Plaintiff by reason of the delay in making the present application. I am convinced that the Plaintiff has been prejudiced for the reasons advanced by Mr Kok above. There is also the possibility that the Plaintiff might not be able to come up with a proper expert report in time for the trial.

33.  However, this Court has to strike a balance to achieve substantive justice in the present case bearing in mind the overall objective of Order 1A r 1(d) of the Rules of High Court (Cap 4A) to secure the just resolution of the disputes between the parties. Whilst the facts of Yeung Wing Lun Alan v Yeung Chung Kwong and Ors [2023] HKCA 664 are different from the present case, it does highlight the important principle that the Court has to take into account what is the best way forward in order to achieve a just resolution of the disputes between the parties whilst not to allow one party’s dereliction of duty in the process to unfairly prejudice the other party.

34.  Bearing in mind all of the above considerations, my view is that the Defendant’s Summons for adducing its proposed handwriting expert evidence should be allowed subject to the following conditions:

(1) The Defendant should fully co-operate with the Plaintiff in supplying adequate sample signatures for the Plaintiff’s proposed handwriting expert and rendering reasonable assistance to the Plaintiff in relation to its preparation of his handwriting expert report.

(2) Should it transpire that the Plaintiff could not find a suitable handwriting expert and to prepare a handwriting expert report in time, the trial fixed in January 2024 should proceed with the proviso that the issue of handwriting expert evidence to be tried on a separate occasion as soon as practicable as directed by the trial judge.

DISPOSITION

35.  For all the reasons stated above, I dismiss the Plaintiff’s present appeal.

36.  However, as this is an indulgence granted by the Court, and there is substantive delay on the part of the Defendant to make the present application, I am of the view that a proper costs order should be the Plaintiff’s costs in the cause of the action.

37.  Finally, I thank the parties, in particular, Mr Kok for the Plaintiff, for their helpful assistance to this Court.