DBS BANK (HONG KONG) LTD v. SIT PAN JIT

HCA 382/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 382 OF 2009

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REASONS FOR DECISION (No 1)
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1.  The trial of the present action commenced on 11 February 2014. Judgment was handed down on 2 April 2015 (“Judgment”). For easy reference, I shall adopt the abbreviations in the Judgment.

2.  Yim’s witness statement dated 16 August 2011 mentioned she would rely on audio-recordings of various telephone conversations between Kong and Sit (a) from April 2004 to June 2007 regarding the alleged investment experience, (b) from 2007 to January 2008 regarding the ELNs, and (c) on 28 October 2008 regarding margin call.  These audio-recordings were disclosed as two CDs listed in DBS’ List of Documents filed on 24 November 2009 and two CDs listed in DBS’ Supplemental List of Documents filed on 28 January 2011.  Transcripts of these audio-recorded telephone conversations were subsequently prepared and disclosed in DBS’ 2^nd Supplemental List of Documents filed on 11 October 2011.

3.  DBS disclosed a CD containing audio-recordings of 113 telephone conversations among various persons (“Last CD”) in its 3^rd Supplemental List of Documents filed on 10 February 2012, but did not provide any transcripts. 

4.  On 14 September 2012, Sit’s solicitors wrote to DBS’ solicitors in relation to the direction by Registrar KW Lung requiring the parties to bring along transcripts of the audio-recordings between Sit and DBS’ staff for his consideration/determination of DBS’ application for trial before a bilingual judge, and requested for transcripts of the audio‑recordings contained in the Last CD.  On 17 September 2012, DBS’ solicitors replied that DBS was not in possession of such transcripts. 

5.  On 19 November 2013, Sit’s solicitors wrote to DBS’ solicitors referring to the draft index of the documents bundle and again requested for such transcripts.  On 21 November 2013, DBS’ solicitors replied by reiterating that DBS was not in possession of such transcripts.  On 3 January 2014, Sit’s solicitors wrote to DBS’ solicitors referring to the draft indices of the trial bundles and stated that since DBS refused to provide the transcripts for the Last CD, they reserved Sit’s right to oppose the production of the Last CD as evidence. 

6.  Under cover of a letter dated 4 February 2014, about seven days before the trial, DBS’ solicitors disclosed transcripts (81 pages) (“New Transcripts”) of audio-recordings of 12 telephone conversations between DBS’ staff and Sit (“Audio-Recordings”).  The Audio‑Recordings came from the Last CD discovered/disclosed almost two years ago.  In such letter, DBS’ solicitors explained that “[solely] for the purpose of facilitating the conduct of the trial and saving the Court’s time and the parties’ time in playing the CD at the trial, we have prepared the [New Transcripts]”.  They claimed this should not be considered as new discovery of documents under Order 24 of the Rules of the High Court (“RHC”). 

7.  On 10 February 2014, Sit’s solicitors replied to state that the New Transcripts constituted discovery of new documents and complained against DBS’ failure to comply with Order 24 rules 1 and 2(1) of the RHC, to seek leave to give further discovery and/or to seek leave to adduce the New Transcripts as evidence at trial.  They also objected to the lateness of such new discovery which had not been explained/justified and which caused great prejudice to Sit.

8.  In short, DBS’ stance was that the primary evidence being the Audio-Recordings had been properly and timely discovered/disclosed, so there was no question of any late discovery, and the transcription was merely to save the time of playing the Last CD during trial and to assist the court in assessing the evidence.  However, Sit maintained that DBS’ purported use of the New Transcripts was contrary to their previous stance and in any event constituted belated discovery of new materials, which should be rejected by the court.

9.  Mr Lee SC (and Mr Lee and Mr Chau with him), counsel for Sit, raised his objection on the first day of trial.  Mr Lee SC was reluctant to even let this court read the New Transcripts for the purpose of adjudicating the dispute as to their relevance and admissibility for fear they would “poison [my] mind although [I was] not sitting with a jury”.  I was not persuaded that a professional judge sitting as judge and jury should be barred from sight of the New Transcripts for the purpose of determining whether they were relevant and/or admissible.  If this court should rule them to be inadmissible, then they would, quite simply, be disregarded.

10.  As a starting point, notwithstanding the reservation of right in the letter by Sit’s solicitors dated 3 February 2014, Mr Lee SC accepted he could not object to the admissibility of the Audio-Recordings which had been discovered/disclosed long ago.  So although Mr Lee SC objected to this court receiving the New Transcripts which were in written form, he had no objection at all if DBS were to adopt the “long‑hand” method of playing the Audio-Recordings during trial and asking the court to consider and assess such evidence in audio-recorded form.  Further, if the factual witnesses were to be questioned about the 12 subject telephone conversations, Mr Lee SC conceded the Audio‑Recordings could be played during the trial for the witnesses and then relevant questions be put to them. 

11.  In a nutshell, Mr Lee SC asked the court had to “open its ears” but to “close its eyes” to the documentary evidence (the Last CD being a discoverable document and was in fact discovered and disclosed two years ago) in respect of the 12 subject telephone conversations.  But even if (as Mr Lee SC suggested but Mr Wong SC (and Mr Dawes with him), counsel for DBS, disagreed) the court were to forgo the “short-hand” method of reading the New Transcripts, it was accepted that the primary evidence being the Audio-Recordings was relevant and admissible, and the court could assess such primary evidence by adopting the “long-hand” method of listening to the Audio-Recordings. 

12.  On such basis, Mr Wong SC argued that this boiled down to a question as to whether the New Transcripts were an accurate transcription of the Audio-Recordings, and not a question whether the New Transcripts were discoverable and/or admissible.  If they were an accurate transcription, then their scope and content would be the same as the Audio-Recordings (which themselves were relevant and admissible) albeit in visual rather than audio form.

13.  Mr Lee SC raised a number of concerns.  First, he argued that the New Transcripts appeared to add a gloss to the Audio-Recordings, eg the Audio-Recordings might only reveal unidentified voices, but the New Transcripts purported to label the voices as belonging to identified persons.  Apart from Sit and Kong (who at all material times was the RM who served Sit), the New Transcripts indentified other persons (eg Poon, “Another staff of [DBS], “Candy Lam”, “Sandy” and “Relationship Manager”) which were not self-evident or obtained by listening to the Audio-Recordings, and Poon and “Candy Lam” never featured in the evidence at all.

14.  Secondly, Mr Lee SC complained that the New Transcripts were incorrect in that they contained DBS’ interpretation and/or deduction as to the contents of the Audio-Recordings.  He gave the following example:

Conversations in the New Transcripts	Conversations in the Audio-Recordings
Rm: 你而家其他d都係好低risk呀? D: 都係，好低risk … [F/79/1950] (tape at 5:52 [F/78])	Rm: 你而家其他都好低XXXX [4 mumbled sounds] (sounds like “低risk” in an “elongated” way)架喎。 D: 係(娥) RM: 好低risk架喎。 D: 哈哈，XX [two inaudible syllables the source of which could not be determined] (sound like “下話” in Cantonese slang)

15.  Thirdly, Mr Lee SC suggested that the New Transcripts contained errors, eg in certain telephone conversations the identities of the respective speakers were reversed.  [F/79/1911]

16.  On such basis, it was suggested that the New Transcripts could not be regarded as part of the documents that had been discovered already.  Apart from the Last CD (which contained the Audio‑Recordings and which was indisputably a discoverable document), the New Transcripts were independently discoverable documents on their own, so timely discovery of the Last CD was insufficient.  In short, Mr Lee SC submitted that DBS was seeking to make late discovery of new documents, and reminded that transcripts of other audio-recordings were disclosed by way of discovery under Order 24 of the RHC.

17.  Mr Lee SC argued that since the New Transcripts could not have been prepared within a short time, it must have been a concerted effort on the part of a number of persons to produce them, and yet they were never discovered or disclosed by way of a supplemental list of documents.  On such basis, Mr Lee SC suggested there was breach of the continuing obligation to give discovery.  Mr Lee SC warned that if I were to hold that the New Transcripts were not discoverable documents, it would set a bad precedent that would encourage litigants to follow DBS’ example by springing transcripts of audio-recordings onto their opponents at the eleventh hour.

18.  Mr Lee SC drew my attention to Hong Kong Civil Procedure 2014 Vol 1 para 24/2/2 at p 540 which stated that “The meaning of “documents” is not restricted to paper writings, but extends to anything upon which evidence or information is recorded in a manner intelligible to the senses or capable of being made intelligible by the use of equipment.  Thus tape recordings of evidence or information are documents …… “Inspection” extends to examining such recordings or other documents with appropriate equipment ……”  I am unable to see how this passage relates to transcripts as distinct from audio-recordings.

19.  Mr Lee SC also referred to Hong Kong Civil Procedure 2014 Vol 1 para  24/11A/1 at p 576 which stated:

‘Where during trial of an action the defendant was ordered, upon the plaintiff’s request, to produce for the plaintiff copies of the “LiveNote” transcript of proceedings which had been kept by the defendant since the commencement of the trial, the defendant could also submit to the plaintiff an account of the “reasonable charges” incurred in producing those documents ……’

I am not persuaded that this adds anything further.  Even if the “LiveNote” transcript of proceedings ought to be discovered and produced, it could only be on the basis that it would lead to some saving of costs by speeding up the trial (eg minimising disputes over what the witness said when he/she gave evidence during examination, facilitating the preparation of submissions, speeding up the giving of evidence by the witnesses, etc).  This must also be a weighty factor in allowing for its production to the opponent since the primary materials as to the actual proceedings at trial (eg counsel’s submissions and witnesses’ evidence) was already before the court.  Such considerations apply with equal force to the present circumstances.

20.  Mr Lee SC further submitted the New Transcripts lacked evidential value having regard to the lack of information as to inter alia context, timing and identity of participants of such conversations.  He added that at this late stage Sit would suffer prejudice because it would not be possible for Sit to investigate/ascertain the identity of the persons involved in the conversations and if necessary call those persons to give evidence to ensure the correctness of the New Transcripts in time and/or to adduce new evidence or make supplemental witness statements to explain why and the circumstances under which certain alleged conversations took place. 

21.  I shall deal with Mr Lee SC’s last proposition first.  In my view, there could not be any question that the New Transcripts were relevant.  Since, as Mr Lee SC accepted, the Audio-Recordings could be deployed as admissible and relevant evidence at trial, it followed that the New Transcripts which should not travel beyond the scope of such recordings were also relevant.  In truth, Mr Lee SC’s complaints as to the lack of (a) contextual information in relation of the telephone conversations and (b) identification of the participants were not directed against the New Transcripts but the Audio-Recordings themselves for the New Transcripts would not add to or detract from the contents of the Audio-Recordings.  It lied ill in Sit’s mouth to now complain that he was surprised and unable to take instructions on documentary evidence disclosed by way of the Last CD or that he now wished to gather and adduce more evidence in response to the Audio-Recordings discovered and disclosed more than two years ago.  How he wished to make use of and/or respond to available documentary evidence was a matter for him. 

22.  Even on Sit’s own case, Mr Lee SC was wholly unable to say why it would be a matter of good and efficient case management for the Audio-Recordings to be played in court and have each of such recordings recorded in written form either by handwritten notes or by LiveNote recording (with translation into English) instead of having a full and accurate set of transcripts before the court.  He was unable to identify any mischief arising from the latter “short hand” approach except to insist that as a matter of law the New Transcripts were on their own discoverable documents and should not be allowed as late discovery.  Mr Lee SC maintained that if necessary the former “long hand” approach should be adopted.

23.  In my view, apart from the pertinent consideration that Sit should not be prejudiced by any inaccuracy of the New Transcripts and that time should be allowed for Sit to verify their accuracy, which matters I would return to below, I would have exercised my discretion to allow the New Transcripts whether or not they were independently discoverable documents.  The practical advantages of saving time and costs by having a ready and accurate written reference to the audio evidence in the Audio‑Recordings that would facilitate examination of the factual witnesses and preparation of submissions, minimise disputes over what was said in the Audio-Recordings, and speed up the trial must be good and efficient case management factors that would lean strongly towards allowing the New Transcripts to be used.

24.  That said, I am unable to accept Mr Lee SC’s proposition that the New Transcripts were independently discoverable documents. The New Transcripts were post-litigation documents created solely for the purpose of facilitating the litigation by providing a convenient visual reference for the Audio-Recordings to enable the court and the parties to consider the primary evidence more easily.  The primary document/ evidence was the Last CD that contained the Audio-Recordings, which had been disclosed in good time.  The New Transcripts were nothing more than a written or visual aide-memoire of the Audio‑Recordings which had no independent existence outside of the Audio-Recordings themselves.  If for some reason the Audio‑Recordings were rendered irrelevant, inadmissible or redundant, there would be no basis to adduce the New Transcripts on their own. They had no independent existence and their fate was irrevocably tied to that of the “mother” Audio-Recordings.  This represented a distinct difference from the example of the “LiveNote” recordings since there could be no question that the trial process itself was before the court.

25.  Given such conclusion, Mr Lee SC’s complaints about late discovery fell away (save and except for the issue of the accuracy of the New Transcripts).  Indeed, Mr Lee SC’s reliance on Liu Chen v Chan Poon Wing & anor HCPI779/2006 (unreported, 7 October 2009) demonstrated it was inapt to apply the principles in relation to late new discovery to the present circumstances.  Relying on such authority, Mr Lee SC complained there was no affidavit evidence to account for the lateness, the provenance/makers of such documents, the relevant of such documents to the issues before the court, and the availability or non‑availability of the makers to attend trial for cross-examination in case the opponent objected to the hearsay evidence.  But in relation to the New Transcripts, the material “makers” of the document were not the persons who carried out the clerical task of transcribing the Audio‑Recordings, but the participants of the 12 subject telephone conversations and that came from the Audio-Recordings and not the New Transcripts.  As for the relevance of the New Transcripts to the issues before the court, it did not turn on the transcription itself but on the contents of the Audio-Recordings. 

26.  Mr Lee SC reminded that the Last CD contained audio‑recordings of 113 telephone conversations.  He accepted Sit had two years to consider the Last CD to see if there were any information useful to his case, and he also agreed there was no obligation on the part of DBS to provide Sit with transcripts of the audio-recordings.  But Mr Lee SC complained that DBS never intimated possible use of the Audio-Recordings or New Transcripts at the pre-trial review hearings or at all.  He argued that if DBS wanted to use any of the audio-recordings in the Last CD, they should first provide the relevant transcripts for Sit to consider and then it would be up to Sit to decide whether to produce transcripts of other audio-recordings. 

27.  But such complaint was not about late discovery at all.  There was no question that the Audio-Recordings were discovered on a timely basis.  The heart of Mr Lee SC’s objection was not that the Last CD had not been properly discovered, but that Sit did not know how DBS would make use of the Audio-Recordings in the Last CD, and he ought to be told by way of provision of the relevant transcripts.  I am not persuaded this was a proper complaint. The Audio-Recordings were discovered two years ago, and if Sit wanted to rely on any part of them he could listen to those recordings and have any part of them transcribed.  More significantly, even if the court were to forego the New Transcripts, Sit would have to face the Audio-Recordings notwithstanding his complaints of lack of contextual information and his alleged inability to gather evidence in response.  In my view, the spectre of setting a bad precedent by allowing the New Transcripts was, as Mr Wong SC said, a false alarm and unfounded.

28.  I now turn to the question of the correctness of the New Transcripts.  This could be addressed by allowing time for Sit to check through the New Transcripts to ensure their accuracy and to have the New Transcripts refer to the audio-recorded voices as “voice A”, “voice B”, etc, and leaving DBS (if they could) to elicit direct evidence as to their identities from Sit during cross-examination and/or to draw appropriate inferences from other available evidence or even from the contents of the subject conversations itself.  Mr Wong SC had no problem with such approach.  Naturally, if there were any inaccuracies, the relevant Audio-Recording could be played, and the alleged error could be debated and/or rectified.  Ultimately, the parties could address the court on the weight and usefulness of the Audio-Recordings and/or the New Transcripts.

29.  Mr Lee complained that Sit could not check the accuracy of the New Transcripts given the shortness of time.  Bearing in mind that Sit would not start to give evidence until some days later, and final submissions would not be due until even later, there would be time enough for Sit’s legal team to listen to the Audio-Recordings to check the accuracy of the New Transcripts, which was essentially a clerical albeit tedious task.  This task was in contra-distinction to the effort in listening to the Audio-Recordings for the purpose taking instructions on their contents, which should have been attended to already, especially when it must have been anticipated that Mr Wong SC could or would cross‑examine Sit on the audio-recordings of his telephone conversations with DBS’ staff.

30.  For all of the above reasons, at the hearing on 11 February 2014, I allowed DBS to adduce the New Transcripts subject to (a) allowing time for Sit to verify their accuracy and (b) requiring DBS to describe the recorded voices as “voice A”, “voice B” etc without identifying the speakers, and I urged the parties to resolve these matters before the start of Sit’s evidence.  Since the New Transcripts were nothing more than transcription of the original Audio-Recordings, I also held that the primary evidence would be the Audio-Recordings in case of any disagreement over the accuracy of the transcription.

31.  In the afternoon on the 3^rd day of trial, Mr Lee SC asked the court to rise early so that he would have time to work on the New Transcripts.  [Day3/94/6-21] Mr Wong SC and the court acceded such request.  [Day3/95/1-19] At 3:40pm, Mr Lee SC asked the court to rise and the case was adjourned for him to attend to the New Transcripts.  [Day3/129/24-25 to Day3/130/1-15]

32.  In the morning on the 4^th day of trial, Mr Lee SC reported on progress in relation to the New Transcripts.  Mr Lee SC suggested an alternative approach of not agreeing to the accuracy of the New Transcripts but allowing Mr Wong SC to use the New Transcripts to cross-examine Sit, and then sorting out any discrepancy between the New Transcripts and the Audio-Recordings later.  The court expressed concern as to this approach since leaving disagreements (if any) to a later stage when witness evidence had been closed could cause problems, especially when clarification from the factual witnesses might be required to resolve the discrepancies.  The court indicated it would be better to elicit any challenge to the accuracy of the New Transcripts by identifying the impugned passages before Mr Wong SC started to use them to cross‑examine Sit, so that the relevant parts of the Audio-Recordings could be played to resolve the disputes.

33.  In the afternoon on the 4^th day of the trial, Mr Lee SC finished his cross-examination of Leung and Mr Wong SC had no re‑examination questions.  To accommodate Mr Lee SC in his review of the New Transcripts, the court adjourned the trial at 2:47pm to let Sit’s legal team have the whole afternoon to attend to the New Transcripts.  [Day4/116/24-25 to Day4/118/1-6]

34.  In the morning on the 5^th day of the trial, Mr Lee SC reported there was no problem with the New Transcripts save that they had inserted some amendments, and DBS also had some minor amendments.  This was also confirmed by Mr Wong SC.  [Day5/2/11‑25 to Day5/3/1-25] Mr Lee SC confirmed there was no dispute over the voices of Sit and Kong, and it was agreed that other voices would not have identifiers, thus leaving Mr Wong SC to elicit their identities from Sit during cross-examination (if he could) or to draw inferences from the contents of the agreed New Transcripts themselves.

35.  In the morning on the 6^th day of trial, Mr Lee SC and Mr Wong SC confirmed that the marked up New Transcripts handed up to the court were agreed subject to the caveat as set out in the above paragraph as to the identities of voices in the Audio-Recordings other than those of Kong and Sit.

36.  In his closing submissions on the 12^th day of trial, Mr Lee SC acknowledged that the revised New Transcripts were agreed and neither party had asked the court to hear the Audio-Recordings (save for  one telephone conversation on 3 March 2008) or to revisit the question the accuracy of the revised New Transcripts.  He was prepared to proceed on the basis of the revised New Transcripts.  [Day12/126/21-25 to Day12/128/21]

37.  At the hearing on 11 February 2014, I also reserved the issue of costs of the argument on this matter.  Whilst I have ruled in favour of DBS to allow the New Transcripts, time was fairly taken up to work out the arrangements for Sit to vet the accuracy of the New Transcripts and how to use/deploy such transcripts at trial.  In the circumstances, I make a costs order nisi that Sit shall pay DBS half of the costs of the argument in relation to the New Transcripts to be taxed if not agreed with certificate for two counsel.  To assist the taxing master, the hearing for such argument took place between 2:30pm and 3:40pm on the 1^st day of trial.