STEVEN MICHAEL HUMPAGE v. SIU KA FUNG

HCPI 579/2016

[2018] HKCFI 638

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 579 OF 2016

_________________________

_________________________

________________

D E C I S I O N

________________

1.  This is the plaintiff’s application to adduce expert evidence for i) profitability of a proposed business plan for a bar from a “business expert” and ii) care regime for the plaintiff from an occupational therapist.

BACKGROUND

2.  This is a personal injury claim and the plaintiff, who had been working as a bar manager, was injured in a road traffic accident resulting in physical injuries, brain damage and psychological damages.

3.  There is agreement between the parties’ expert psychiatrists as well as the single joint expert clinical psychologist that the plaintiff would not be able to return to his previous job due to his residual mental impairment.

BAR BUSINESS EXPERT

4.  The plaintiff’s case is that he has intended to open his own bar with a number of business partners, but this is now not possible due to his physical and (mainly) mental impairment.

5.  The plaintiff himself does not recall any of this business plan now, but the evidence came from his wife (who was aware that the plaintiff has been “discussing various new ventures with parties for bars which he would run”) but mainly from a friend, Mr. Geoffrey Spender.

6.  Mr. Spender stated in his witness statement that he had a background as the Chief Financial Officer of a bank and founder and manager of various investment consultancy firms, and thus was experienced in analysing and investing in a diversified portfolio of equity.  He was involved with the business plan as a friend, investor and adviser at the plaintiff’s discussions with various parties since around December 2013.

7.  He gave further details regarding this business plan including the following :-

a. The location would be in Kennedy Town: an excellent location has been identified but two other locations were also looked at as possibilities.

b. The venture would be structured with the plaintiff taking a personal equity and as the majority “owner manager”.  The plaintiff was deemed to have the right experience and customer base.

c. The bar was to open on or about 1 October 2014.

d. The capital investment would be HK$1M.  There were details of the planned capital contribution.

e. The plaintiff’s own contribution would be from anticipated compensation from a “wrongful dismissal” case (which he could not pursue now after the accident) or from other “stop‑gap” alternatives like salaries from work or loans from friends.

f. There were “cash flow breakeven” and “net return targets”, and net return on equity of 40% p.a. “was in line with market standards and was a reasonable target based on” the plaintiff’s and Philip Gordon’s experience. (Mr. Gordon was one of the parties involved in the discussion).

8.  Mr. Spender had also enclosed 3 pages of handwritten notes which he claimed documented the discussions of this business plan.

9.  The legal principle regarding adducing expert evidence is trite and need not be repeated here.

10.  My concern in this case is that although there is a “business plan”, it has not been put into action so there is no tenancy agreement, no staff employment contracts, no details of any application for e.g. liquor and food licence, no bills for any outgoings like decoration fees and expenses, rents or salaries, no receipts for income and, of course, no profit and loss accounts.  The plan has, in reality, not progressed beyond the discussion stage with potential partners and identification of 3 potential sites.  Besides this, there is a “vacuum” of information.

11.  Secondly, I do not think that the “bar business” is an academic subject to be studied in an institution.  It is not a science where if one put in certain factors into a formula, there must be certain results in precise statistical way.

12.  The expert proposed by the plaintiff, Mr. Robert David Cooper, has undoubtedly vast experience in managing bars and restaurants in Hong Kong.  His university degree was in geography which was unrelated.

13.  In other words, Mr. Cooper was proposed as an expert in the bar business not by virtue of any special qualifications, academic research publications etc. but by, perhaps, his experience and track records in the industry etc.

14.  I would refer to the judgment of Evans‑Lombe J in Barings Plc v Coopers & Lybrand (No.2) [2001] Lloyd’s Rep Bank 85 at 45 :

“Expert evidence is admissible under section 3 of the Civil Evidence Act 1972 in any case where the court accepts that there exists a recognised expertise governed by recognised standards and rules of conduct capable of influencing the court’s decision….”

15.  I am not sure that there exists any “recognised expertise governed by recognised standards and rules of conduct” in the bar industry. I am not so bold as to say that expert evidence must be precluded from any area not “governed by recognised standards and rules of conduct”. However, under such circumstances, the court must carefully scrutinise the usefulness (or the probative value) of any such evidence in determining the issue in question, which, in this case, is “the prospect of the plaintiff’s alleged but not implemented business plan”.

16.  Thirdly, I note that Mr. Spender considered himself to be qualified “to give a logical view of the prospect of” the plaintiff’s business. Indeed, he was able to give an opinion “from a private equity investor point of point of view”, that the “projection is a fair target and probably more on the conservative side.”

17.  Two other potential partners named by Mr. Spender, Alan Lammin and Philip Gordon, are “investors and have been in the bar industry for many years”, and indeed “Philip Gordon gave valuable input…he had just done another deal (presumably another bar business) at the time.”

18.  As for the target in return, Mr. Spender stated that “Philip and other investors in the industry usually expect a higher p.a. return given the risk in the food and beverage industry which tends to be a very fashionable business with many startups but businesses switching owners very quickly or going out of business.”  Indeed, the plaintiff himself was said to have “considerable experience in operating and managing bars and restaurants.” (although there may be a limitation in his evidence due to his mental disabilities).

19.  If any “expertise” actually comes by way of experience and track records etc., there seems to be no lack of witnesses or potential witnesses who are experienced “investors in the industry”.  I cannot see why any of these people cannot give evidence as to what they think of this business plan, what profits they anticipated and what risks they might perceive as potential “investors in the industry”, and have these evidence tested in court.

20.  Much has been said by Mr. Spender regarding the plaintiff’s experience, personality, commitment and client base in Kennedy Town area.  If Mr. Spender’s belief is that these are key factors and the “right combination of elements” for success, then only he, and those potential investors who know the plaintiff well, and not an outside “expert in bar business”, would be able to provide specific evidence to support such a belief.

21.  Finally, one must also consider the application in the context of the CJR.  Given the circumstances in this case and that the plaintiff has already intended to call Mr. Spender and Mr. Gordon as witnesses, I am not convinced that any “expert” evidence would be of much further help to the court.  Therefore, there is no justification (nor necessity) to spend time and costs on such.

OCCUPATIONAL THERAPY EXPERT

22.  The parties’ orthopaedics and neurological experts did not specifically recommend assessment by expert in occupational therapy.

23.  The issue was first raised by the single joint clinical psychology expert Professor Peter Lee in his Supplemental Psychological report dated 25 September 2017: “On observing him and seeing how he orientates himself during my several sessions with him, I feel that Mr. Humpage has a basic competence in running the routines of his daily life.  In this regard, should any further advice be needed, perhaps the more able advice from an occupational therapist may need to be obtained.”

24.  The parties also wrote to their respective psychiatric experts seeking “advice on any therapeutic interventions and therapeutic assistive devices…care regime and care personnel required…special needs for the environment at home, work, and / or leisure…transport, socialization etc.”

25.  Both psychiatric experts replied that such matters fell outside their scope of expertise and both were “of the opinion that expert opinion should be sought from an Occupational Therapist.” (Joint Supplemental Psychiatric Assessment Report dated 7 October 2017).

26.  Indeed, although the plaintiff suffered some residual physical disability in his right arm (which on that basis alone might not justify seeking opinion from an occupational therapist), the main problem was his mental disability.

27.  Of course, the plaintiff did himself undergo treatment by occupational therapist and he was assessed to have decreased cognitive function with impaired orientation, attention, comprehension, repetition and memory (Occupational Therapy Report by Nigel Cheung dated 9 October 2015).

28.  Although the existing psychiatry and phycology experts had advised further management like psychological therapy, physiotherapy and employment of a full time domestic assistant, they opined that there were issues regarding the plaintiff’s care which are outside their expertise but within the expertise of an occupational therapist.

29.  I also note from the letter dated 15 August 2017 from Ms. TSANG LAU Kit-ping that these are the areas that an occupational therapist would be able to address.

30.  I would therefore allow leave for each party to adduce expert evidence from an occupational therapist, but this would be restricted to only those 3 issues specifically raised by the expert psychiatrists in the Joint Supplemental Psychiatric Assessment Report.  There would be no need for the occupational therapist expert to address management already recommended by the existing experts.

ORDER

31.  I would therefore give the following orders:

a. No leave be granted to the parties to adduce expert evidence from a business expert to comment on the likely profitability or otherwise over several years of the proposed business the plaintiff intended to engaged in, namely a bar in Kennedy Town as detailed in paragraph 11 of the witness statement of Mr. Geoffrey Spender dated 22 August 2016;

b. Leave be granted to each party to adduce expert evidence from an occupational therapist relating only to the following:-

      In addition to what the experts in psychiatry and clinical psychology already advised, whether there are any further :-

   i. Therapeutic interventions and therapeutic assistive devices to help the plaintiff to improve his function, physically, cognitively and psycho‑socially;

   ii. Care regime and care personnel required for the plaintiff; and

   iii. Recommendations in relation to special needs for the environment at home, work, and / or leisure, and other additional expenses such as transport, socialization etc.

c.   Parties shall within 28 days of this order jointly write to the PI Master to report on the names of the experts in occupational therapy to be appointed, the date of examination / assessment and further case management directions leading to setting down including fixing a date for the Checklist Review hearing.

32.  As for costs, as I have allowed one application and disallow the other, I would give an Order Nisi for costs of and occasioned by this Summons be in the cause with certificate granted to counsel.  The plaintiff’s own costs be taxed in accordance with Legal Aid Regulations.