STANDARD CHARTERED BANK (HONG KONG) LTD v. LAU LAI WENDY AND ANOTHER

CAMP 38/2021

[2021] HKCA 380

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 38 OF 2021

(ON AN INTENDED APPEAL FROM HCA 1478/2017)

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J U D G M E N T

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Hon Lam VP (giving the Judgment of the Court):

1.  This is an application for leave to appeal against the decision of Anthony Chan J on 5 January 2021. By that decision, the Judge refused to allow the evidence of the 2^nd Defendant (who resided in Beijing) to be adduced by way of VCF at the trial of the action.

2.  The application for taking evidence by VCF was made at an extremely late stage: the summons was taken out on 29 December 2020 when the trial was due to commenced on 11 January 2021.

3.  There was a pre-trial review on 7 October 2020 at which the Judge already alerted those acting for the 2^nd Defendant to make proper preparation for the 2^nd Defendant to attend the trial in light of the COVID-19 pandemic.  Notwithstanding so, no step had been taken by the 2^nd Defendant to make the necessary arrangement until the issue of the summons on 29 December 2020. 

4.  In the affirmation of the 2^nd Defendant of 28 December 2020, she said she had been observing the situation regarding the pandemic in Hong Kong in December and she intended to come to give evidence if the situation improved.  However, due to the persistence of the pandemic in Hong Kong, she decided that it would be a serious threat to her health if she had to come to give evidence in person.

5.  In the judgment of 5 January 2021, the judge rejected that explanation at [2] to [6].  He regarded the application as a tactical manoeuvre.  The judge also had regard to the established principles set out in Re Nobility School Ltd [2020] HKCFI 891 and did not find sufficient ground to allow the application.  He placed weight on the fact that the evidence of the 2^nd Defendant would be of critical importance to the trial and he took the view that it would be unsatisfactory to have evidence of key witnesses given via video link.  He referred to the possibility of seeking exemption from the Department of Justice for dispensation of the strict quarantine requirement and suggested that to be an option to explore.  In any event, he regarded the 2^nd Defendant to be the author of her own misfortune if it was too late for her to attend trial.  He therefore dismissed the application with costs. 

6.  The trial took place on 11 and 15 January 2021. The 2^nd Defendant did not give evidence at the trial.  Judgment was handed down on 1 February 2021.

7.  The 2^nd Defendant only applied for leave to appeal on 13 January 2021 after the trial had commenced.  The judge refused to grant leave on 15 January 2021.  Mr Ho, for the 2^nd Defendant (with Ms So), made the application on behalf of the 2^nd Defendant.  Counsel contended that the judge’s rejection of 2^nd Defendant’s health concern was irrational.  He also submitted that the courts in other jurisdictions were more receptive to the use of VCF in hearing evidence.  The judge did not consider these proposed grounds of appeal to be reasonably arguable and dismissed the application for leave accordingly.

8.  By a summons of 29 January 2021, the 2^nd Defendant renewed the application for leave before us.

9.  Having read Mr Ho’s written submissions and the written submissions of Mr Sussex SC (with Mr Ng) for the Plaintiff, we came to the clear and firm view that the intended appeal is totally without merit and leave should not be granted.

10.  The decision on refusal to take evidence of a highly controversial witness by VCF is a case management decision: Mahajan v HCL Technologies (Hong Kong) Ltd [2010] 5 HKLRD 119; Re James Henry Ting HCMP 2136/2013, 7 March 2014.  As this Court repeatedly emphasized, the threshold for disturbing a case management decision made by a trial judge is very high.  As held in 厦門新景地集團有限公司v Eton Properties Limited HCMP 13/2012, 14 February 2012; Yang Foo-Oi v Wai Wai Chen [2019] HKCA 49 and NPYJ v SMRC [2020] HKCA 832, the Court of Appeal would only intervene if the decision was wrong in principle or otherwise clearly wrong.

11.  We are not satisfied that there is any reasonable prospect for the 2^nd Defendant to succeed in meeting such high threshold.

12.  As stated in his judgment, the judge applied the approach set out in Re Nobility School Ltd, supra in assessing the application of the 2^nd Defendant.  Mr Ho did not suggest that the approach was wrong in principle.

13.  Counsel contended that the judge failed to have regard to the exceptional nature of COVID-19 that warranted departure from the norm of hearing viva voce evidence.  Reference was made to overseas practice in receiving video-linked evidence as showing that no prejudice would be occasioned by the application was acceded to.  He also contended that the judge erred in not accepting the 2^nd Defendant’s subjective concern of health safety as good ground for her application. Such concern was said to be a good excuse for the lateness of the application.

14.  In our judgment, none of the matters canvassed by Mr Ho could give rise to a proper basis for this Court to conclude that the judge’s decision was clearly wrong.

15.  First, we are of the clear and firm view that given the circumstances under which the application was belatedly made despite the reminder at the pre-trial review on timely arrangement for witness to come here in light of quarantine requirement, the judge was perfectly entitled to reject the 2^nd Defendant’s claim that real reason for the application was her health concern.

16.  This is particularly so when the 2^nd Defendant was fully aware of the significance of her testimony and the likelihood of serious challenge to her credibility by those acting for the Plaintiff.

17.  Given that the quarantine requirement in Hong Kong had been in place for a while, the 2^nd Defendant should have made preparation in that regard well before end of December 2020 if she had serious intention (as she claimed) of coming to Hong Kong to give evidence.  If she did not have such intention, she should have made the application much earlier in light of the judge’s indication at the pre-trial review.

18.  Further, in light of the highly controversial nature of her evidence (she claimed that the money transferred to her account were interests paid at the rates of 20% and 40% per annum from the bank), there is no basis for her to assume that her VCF application would be readily acceded to in light of the approach set out in Mahajan v HCL Technologies (Hong Kong) Ltd, supra, and Re Nobility School Ltd, supra.  Hence, she should have made the application much earlier so that if the application failed she could still have time to make arrangement to come to give evidence in person.

19.  We see no basis for this Court to disturb the judge’s conclusion that the application was a tactical manoeuvre on the part of the 2^nd Defendant.  We do not find any reasonable prospect of success in the argument that the judge’s conclusion was irrational.

20.  Second, this being a case management decision by the judge, how other judges in Hong Kong or overseas had exercised their power in light of the facts and circumstances of different cases are neither here nor there.  Whilst there were cases where judges prepared to take evidence by VCF, there were other cases where judges found such course to be unsatisfactory.

21.  The judge, as the trial judge, was in the best position to assess if such a course should be adopted in respect of the evidence from this particular witness.  In the present case, the judge gave sound reason for not accepting the proposed course as satisfactory.  We do not see any reason to disagree.  In view of such assessment, it is wrong for the 2^nd Defendant to suggest that giving evidence by VCF would not occasion any prejudice to the Plaintiff.

22.  Notwithstanding the COVID-19 pandemic, as far as the situations in Hong Kong are concerned, the taking of viva voce evidence in person (both in civil and criminal trials) remains the usual norm here.

23.  As far as the prejudice to the 2^nd Defendant is concerned, as the judge rightly noted, she was the author of her own misfortune.  There is no material difference between her situation and that of a defendant who deliberately chose not to come to court to give evidence hoping but failing to convince the court to receive her evidence by VCF.  Such a defendant could hardly complain that the court adjudicated the case without the benefit of her evidence.  

24.  As regards the other evidence in the trial and the Plaintiff’s reliance on the hearsay evidence of the 1^st Defendant, it should not have bearing on the outcome of the 2^nd Defendant’s application.  This was in any event not a point taken before the judge when the application was heard on 5 January 2021. 

25.  For these reasons, we refuse to grant leave and dismiss the summons of 29 January 2021.  We also order the 2^nd Defendant to pay the costs of the Plaintiff.  In view of the utterly lack of merit of this renewed application, we agree with Mr Sussex that the 2^nd Defendant should pay costs on indemnity basis. 

26.  Having considered the Statement of Costs of the Plaintiff, we fix such costs at HK$168,380.

27.  Further, we are of the view that the application is totally without merit.  Pursuant to Order 59 Rule 2A(8) of the Rules of the High Court (Cap 4A), we make an order that no party may request this determination to be reconsidered at an oral hearing inter partes.