LAW MAN WAI v. KWAN SAU SIM

HCA 2307/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 2307 OF 2009

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DECISION

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1.  This is the defendant’s application for leave to file and serve supplemental witness statement. This case has been set down for trial to commence on 9 July 2013. The plaintiff opposed. I now explain my order given at the end of today’s hearing.

2.  Briefly the plaintiff claims that 2 real properties registered in the name of the defendant were in fact purchased by him in 2004 and are held on trust for him. Specifically, the plaintiff allegedly provided the purchase money by various payments to the defendant in 2004 amounting to a total sum of about HK$8,200,000. In breach of trust, the defendant sought to sell one of the properties in 2009. The plaintiff seeks, among other relief, declaration of his right in the properties.

3.  The defendant admits receipt of, among other sums, about HK$8,300,000 from the plaintiff in 2004 but disputes the alleged nature of those payments.  She contends that her husband and the plaintiff, who are cousins, were the donees in equal shares of an inter vivos gift of money by their aunt in 1999.  The entire sum of the gift was given to the plaintiff, who undertook to forward half of it to the defendant’s husband.  The payments made by the plaintiff in 2004 to her represented part of her husband’s half share of such gift.

4.  As to the 2 properties, the defendant contends that she purchased them after the passing of the aunt in 2001 from the executor of the will and administrator of the estate of the aunt.  She allegedly purchased them by money consisting of her own money, money from her husband and the money received on behalf of her husband from the plaintiff mentioned above.

5.  The pleadings and current witness statements of the parties also raise factual dispute as to: (1) the nature of other payments made by the plaintiff to and for the defendant and her family between 1999 and 2009 (besides the sum of about HK$8,300,000 in 2004 mentioned above); (2) the nature of the transfer of certain property in Kowloon from the plaintiff’s then girlfriend to the defendant in 2004; and (3) the right to the rental income collected by the plaintiff from the tenant of one of the properties.

6.  It is contended that the plaintiff has yet to account in full the half share of the aunt’s inter vivos gift of money that the defendant’s husband is entitled to. For that, the defendant’s husband actually commenced another action against the plaintiff, seeking account and order for payment of what the plaintiff allegedly owes to him.  This is HCA 143/2010 which, for the obvious factual nexus, has been ordered to be tried together with the present action.

7.  This is no doubt a late application for one of this sort.  In the case management conference in May 2012, the parties were faced with an unless order for the exchange of witness statements.  Directions for the obtaining of counsel advice and taking out of all interlocutory applications were given on the same occasion.  The parties met the deadline for the exchange of witness statements in July 2012.  Yet the thought of adducing the supplemental statement now came 3 weeks prior to the trial.  Mr Yau for the defendant acknowledged that the lateness could not be explained.  But he urged that this alone should not dictate the outcome of an application of this sort without regard to what the leave being sought actually entails.

8.  Counsel acknowledged the concern of the court as, if I may so say with respect, precisely put by Bharwaney J in Parsad v Great Wealthy Engineering Co Ltd [2012] 3 HKLRD 705 (at §6):

“Whilst the primary aim is to secure the just resolution of the dispute in accordance with the substantive rights of the parties, and which must include the right of a party to rely on admissible, relevant and probative factual 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 for the late application. These matters have to be considered and weighed in the light of and against the underlying objectives of Civil Justice Reform to ensure cost effectiveness and economy, expedition, proportionality, and fairness between the parties.”

9.  Essentially the defendant’s supplemental statement serves the following purposes:

(1)   tabulation of the payments and property transferred by the plaintiff to the defendant (or her husband) from 2000 to 2009 with reference to the paginated trial bundle (ie Schedule 1);

(2)   tabulation of the rental payments in respect of one of the properties in question that was let since its purchase with reference to the paginated trial bundle (ie Schedule 2); and

(3)   the defendant’s response to the plaintiff’s evidence in respect of the various gifts to the defendant and her family (by way of cash, settlement of credit card balances and gift of objects) as well as loans, amounting to HK$11,726,137, with reference to the documentary evidence relied on by the plaintiff (ie Schedules 3-5).

10.  Indeed Ms Ng observed that the proposed supplemental witness statement is not made to fill in any gaps in her current statement.  Nor is it concerned with supplemental facts.  Rather it is largely concerned with presentation and comments on the existing documentary evidence.  She took the view that those are matters of submission.  That is probably true in respect of schedules 1 and 2 of the proposed supplemental witness statement.  In that case, the question is whether it really needs to take the form of the witness statement.

11.  Relatively more controversial may be what the defendant says in the proposed supplemental witness statement in connection with schedules 3 to 5.  It is mainly response to the plaintiff’s evidence in his statement.  The response is however brief.  Ms Ng submitted that such rebuttal evidence could be given orally.  But the concern of the defendant, Mr Yau submitted, is the uncertainty as to whether it would be open to her to do so, if not specifically cross-examined upon.

12.  I observe that the extent to which the defendant seeks to adduce really new evidence by way of the supplemental witness statement is indeed limited and brief.  The identification and tabulation of the documentary evidence with reference to the paginated trial bundle should also help save time and costs at the trial.    Prejudice to the plaintiff could be addressed by the appropriate direction, though further substantial response by the plaintiff is, I believe, not likely.  Disruption of the forthcoming trial is not expected.

13.  Not without reluctance, and mainly because of the late stage at which the application was taken out, I gave leave to the defendant to file and serve her supplemental witness statement as per draft within today.  As requested, I also gave leave to the plaintiff to file and serve supplemental witness statement strictly in response to the defendant’s supplemental witness statement, if any, no later than the day before trial.  As mentioned above, I do not contemplate the real need for the plaintiff to provide elaborate, if any, response to the defendant’s response to his own evidence.  The footing for cross examination of the defendant in trial is all there.

14.  As to costs, the court has warned that the applicant in a late application should normally be expected to face an adverse order (and in appropriate circumstances on indemnity basis): see Li Xiao Yun & Anor v China Gas Holdings Ltd, CACV 39/2013 (11 March 2013) at §18.  Mr Yau acknowledged that his client is seeking indulgence of the court.  I therefore ordered that the costs of and occasioned by this application be to the plaintiff in any event to be taxed, if not agreed, with certificate for counsel.