DAIMLER AG (formerly known as MERCEDES‑BENZ AG) v. HELGE HERBERT LEIDUCK AND ANOTHER

HCA 4089/1994

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 4089 OF 1994

________________________

________________________

________________________

DECISION

________________________

1. By a Decision handed down on 17 June 2016 ("Decision"), I dismissed with costs the plaintiff's application for leave to serve upon the defendants interrogatories concerning various matters contained in the 21^st Affidavit of Jeremy David Levy dated 23 August 2013 and the 4^th Affidavit of Helge Leiduck dated 23 September 2013 and the exhibits thereto, which interrogatories were appended to the Decision.

2. By a Summons dated 30 June 2016, the plaintiff applies for leave to appeal against the Decision ("Leave Application").  In support, the plaintiff relies upon 5 detailed grounds of appeal that run to 11 pages. Instead of setting these proposed grounds of appeal out in this Decision, I attach them as an appendix hereto.

3. The plaintiff also seeks a stay of these proceedings (including the delivery of judgment on the Competency Issue) and the vacation of all hearing dates that have been fixed ("Stay Application") to enable the plaintiff to proceed with the appeal (if the Leave Application succeeds) or (if the Leave Application fails) to renew its application for leave to appeal before the Court of Appeal and, if the Court of Appeal grants leave, to proceed with the appeal.

4. Unless otherwise stated, I shall continue to use the abbreviations adopted in the Decision.

LEAVE APPLICATION

5. The Court of First Instance can grant leave to appeal against a civil interlocutory judgment or order under section 14AA(4) of the High Court Ordinance (Cap 4) if it is satisfied either that the appeal has a reasonable prospect of success or that there is some other reason in the interests of justice why the appeal should be heard.

Merits

6. A reasonable prospect of success requires the intended appeal to be more than "arguable" or "not fanciful", without having to be "probable": SMSE v KL [2009] 4 HKLRD 125, [17] and Wynn Resorts (Macau) SA v Mong Henry [2009] 5 HKC 515, [19].

7. Even if there is a reasonable prospect of success, the court still retains a residual discretion to refuse leave (though a reasonable prospect of success would weigh heavily in favour of the grant of leave).  For instance, consistent with the underlying objective under Order 1A, rule 1(c) of the Rules of the High Court (Cap 4A) (ie promotion of reasonable proportion and procedural economy in the conduct of proceedings), the court may refuse leave to appeal in the interests of procedural economy and proportionality.  See Ho Yuen Ki Winnie v Ho Hung Sun Stanley under HCA 391/2006, unreported, 25 May 2009, [3] and on renewed application to the Court of Appeal under HCMP 1009/2009, unreported, 24 August 2009, [22].  See also Wong Kar Gee Mimi v Severn Villa Limited [2012] 1 HKLRD 887, [31].  In Ho Yuen Ki Winnie, A Cheung J (as he then was) (at [7 - 9]) and the Court of Appeal (Le Pichon and Hartmann JJA) (at [22]) were not convinced that there was a reasonable prospect of success but indicated obiter that they would not grant leave even if they were of a different view because the intended appeal would merely be an interlocutory skirmish that only served to increase costs and delay adjudication of the litigation.

8. The question whether the plaintiff’s intended appeal against the Decision has a reasonable prospect of success should be addressed in context, which is that the grant or refusal of leave to serve interrogatories is discretionary.  An appellate court would not interfere with a decision made in exercise of discretion unless the judge at first instance had erred in principle of law, or had misapprehended material facts, or had taken into account irrelevant matters or had failed to take relevant matters into account, or where the judge's conclusion was so plainly wrong that it was "outside the generous ambit within which a reasonable disagreement is possible": Cheung Kam Wah v Cheung Hon Wah [2005] 1 HKC 136, [17] and Carlos Manuel Kwong v Lo Kam Wing, CACV 128/2005, unreported, 3 November 2005, [28].

9. I have carefully considered the proposed grounds of appeal and the written and oral submissions made thereon by Counsel for the plaintiff, Mr John Yan SC (leading Ms Sara Tong), which comprehensively challenge almost every aspect of the Decision.  I have further reviewed the Interrogatories and the Decision in light of such proposed grounds and submissions.  I am not persuaded that the plaintiff has a reasonable prospect of convincing the Court of Appeal that the Interrogatories or any of them satisfy the dual requirement of relevance and necessity.

10. Approaching the Leave Application with a sense of proportion, I do not propose to address each and every detailed point made by the plaintiff.  I refer to the Decision.  With the exception of paragraph 27 (which I will deal with in paragraph 37 below), the legal principles set out in other parts of the Decision are not controversial.  I have explained in the Decision why, applying those principles, I believed the answers to the Interrogatories to be not relevant / necessary.  I will not reiterate the reasons already given in the Decision.  I will however make the following further observations, in case this matter be taken further which seems likely in view of the Stay Application.

11. I start by referring to the Interrogatories.  Mr Horace Wong SC (leading Mr Clark Wang) for the defendants described them as prolix.  I did not go so far in the Decision.  However, looking at them, while I appreciated a party's desire to leave no stone unturned by chasing down every possible lead, I was at the same time mindful that resources, both of the parties and the court, are not unlimited.  Subject to the proper application of relevant legal principles established in decided cases, the assessment of the relevance or necessity or otherwise of an interrogatory should be approached with a sense of procedural proportionality and economy.

Proposed Ground (1) - Relevance to, and necessity for fair disposal of, Competency Issue

12. The plaintiff takes issue with my dismissal of Interrogatories 1(ii), 2, 3, 4, 5, 6, 7, 8, 9(v) and (vi), 10, 11(ii) and (iii), 12 and 13(ii) and (iii) as being irrelevant to the Competency Issue. See paragraph 10 of the Decision and proposed Ground (1)(i) and (ii).

13. In identifying the three matters to which he said the Interrogatories would be relevant (Decision §4), Mr Yan SC did not further elaborate on which interrogatory was relevant to which matter.  In support of the Leave Application, Mr Yan SC himself emphasizes that the plaintiff does not have to show that each and every of the Interrogatories is relevant to the Competency Issue as some are relevant to the defendants' conduct of the application for an inquiry as to damages and to the question of costs (paragraph 13 of Mr Yan SC's written submissions dated 9 August 2016).

14. I remain of the view that the 3 matters set out in paragraph 10 of the Decision as being likely to be elicited by Interrogatories 1(ii), 2, 3, 4, 5, 6, 7, 8, 9(v) and (vi), 10, 11(ii) and (iii), 12 and 13(ii) and (iii) are irrelevant to the Competency Issue:

(1)  The Competency Issue is precisely defined.  It inquires about Mr Leiduck's competence or otherwise as a witness on the specific dates when he signed various affidavits / witness statements / statements of truth and gave evidence in court.

(2)  I agree with Mr Wong SC that Mr Leiduck Jr's involvement in the conduct of these proceedings prior to his appointment as next friend on 5 November 2013 is neither here nor there insofar as the Competency Issue is concerned.  Such involvement, if any, could have been due to any number of reasons, not necessarily Mr Leiduck's poor mental health, particularly given Mr Leiduck's multiple physical disabilities and consequential dependency on assistance by others in the management of his affairs.

(3)  I still do not see how Mr Leiduck Jr's instructions to and/or communications with Mr Leiduck's doctors and lawyers about the Hong Kong and Augsburg proceedings involving Mr Leiduck could be relevant to the Competency Issue.

(4)  The times at which and the means by which Mr Leiduck Jr gave instructions to and/or communicated with Mr Leiduck's doctors and lawyers about Mr Leiduck's mental health, etc and the respective times when Mr Leiduck Jr and Robertsons became aware that Mr Leiduck had, or might have, become incompetent are likewise neither here nor there.  The question is when Mr Leiduck became incompetent, not when his son or his lawyers might become aware of it.

15. The plaintiff also takes issue with my dismissal of the remaining interrogatories (numbered 1(i), 9(i) to (vi), 11(i) and 13(i) ) as being unnecessary for the fair disposal of the Competency Issue.  See paragraphs 11 to 17 of the Decision and proposed Ground (1)(iii) and (iv).

16. I weighed the necessity of these interrogatories for the purpose of the Competency Issue against the primary factual evidence that is available on the mental condition of Mr Leiduck (including the six leverarch files of original and translated contemporaneous records kept by independent medical and nursing professionals who cared for Mr Leiduck from November 2001 right up to his death on 23 March 2014; the information provided by various informants to the joint expert (Dr Hans Förstl); and the transcripts of Mr Leiduck's oral testimony) as well as the opinion evidence that has been given on the basis of such primary factual evidence by Dr Förstl and the parties' own experts (Professor Felice Lieh‑Mak for the plaintiff and Professor Helen Chiu Fung Kum for the defendants) [1] who have between them produced seven expert reports of about 300 pages (not including reference materials) and who have altogether been examined in court for 20 days. [2]

17. I have also had the benefit of the parties' closing submissions on the Competency Issue, made both in writing which add up to hundreds of pages (not including authorities) and orally in court (which took three full hearing days) [3].

18. It is against this body of evidence and submissions and with regard to the range of sub‑issues that I have to deal with in order to resolve the Competency Issue that I came to the view that I would not be further assisted on the Competency Issue by the answers to these interrogatories.

19. In particular, Mr Yan SC identified the 5 matters set out in paragraph 8 of the Decision as being relevant to Mr Leiduck's mental condition in 2013.  As stated in paragraphs 27(3)(F) to (L) of the decision handed down herein on 22 April 2014, [4] Dr Förstl has already expressed the view that except for his testimony on 8 May 2013, Mr Leiduck was incompetent within the meaning of section 3(b) of the Evidence Ordinance (Cap 8) ("EO") on all the occasions on which he gave oral evidence which began on 25 February 2013.

20. With regard to the evidence given on 8 May 2013, Dr Förstl is unable to find in the transcripts sufficient material pointing to an inability to receive just impressions of facts or to relate such facts truly on the part of Mr Leiduck though he was indisputably of unsound mind on account of the diagnosis of dementia with Lewy bodies ("DLB").  What I have to determine is whether DLB is characterised by such significant and drastic fluctuations as described by Dr Förstl so that each occasion on which Mr Leiduck gave evidence and each piece of evidence given by him has to be examined and whether Dr Förstl's evaluation of Mr Leiduck's evidence on 8 May 2013 should be accepted.  Mr Leiduck's answers to Interrogatories 1(i), 9(i) to (vi), 11(i) and 13(i) would not shed light on these questions.

21. I have not overlooked the fact that apart from giving oral evidence, in 2013, Mr Leiduck also signed a statement of truth to verify the defendants' Consolidated Points of Reply on 23 January 2013 and an Answer to Interrogatories on 28 January 2013.[5]  As stated in paragraph 15 of the Decision, the month of January 2013 is well covered by the daily nursing records.

22. In support of the Leave Application, Mr Yan SC expanded his argument by taking the point that some of the Interrogatories were worded in open‑ended terms that might elicit pre‑2013 information (eg when Mr Leiduck Jr first observed in Mr Leiduck a symptom of cognitive impairment).

23. In my view, it is important to pay regard to what was actually being said in the affidavits on which the Interrogatories are based:

(1)  Reading Mr Leiduck Jr’s 4^th Affidavit as a whole, he was saying that, apart from some loss of concentration and memory (paragraph 4), his father was fine right up to his mother's funeral in March 2013.  The reasons given by Mr Leiduck Jr for asking Mr Leiduck to give him a general power of attorney, a matter in which the plaintiff seems very interested, were the initial illness and later death of Mrs Barbara Leiduck who had been taking care of Mr Leiduck’s daily affairs.

(2)  As for the loss of concentration and memory, it is significant to note that it is mentioned in the same sentence that says that Mr Leiduck's mind was sober and that he generally knew what he was talking about in February 2013.

(3)  As for Mr Levy, he did not make any personal observations about Mr Leiduck.  And the earliest event mentioned by Mr Levy took place in March 2013.

In light of the contents of the two affidavits, I have no reason to suppose that the open‑ended interrogatories would extract from Mr Leiduck Jr (who was already one of Dr Förstl's informants) information about Mr Leiduck's mental condition before 2013 that would assist me on the Competency Issue to any or any material degree.

24. As for the plaintiff's insistence that Mr Leiduck Jr should be required to provide his knowledge and observations as regards Mr Leiduck's mental condition on oath, rather than simply orally to Dr Förstl (who the plaintiff says is not in a position to assess the credibility of Mr Leiduck Jr's statements), I have been reminded by Mr Wong SC that:

(1)  Prof Lieh‑Mak gave no or little weight to the observations made by the informants, including Mr Leiduck Jr, recorded in Dr Förstl's report dated 24 March 2014.

(2)  In Mr Yan SC's closing submissions on the Competency Issue, the Plaintiff's position on the information provided by members of Mr Leiduck’s family, including Mr Leiduck Jr, is that "they are fully aware of the present proceedings and the significance of the information they may give on this case and hence may not be entirely objective".  Consequently, the plaintiff embraces the approach of Prof Lieh‑Mak, and commends her for “[focusing] on the contemporaneous and objective medical and nursing records which, in [Prof Lieh‑Mak’s] view, were already sufficient to enable her to come to her opinions on competence of”Mr Leiduck.

Proposed Ground (2) — Relevance to, and necessity for fair disposal of, Effects Issue

25. The plaintiff's submission at first instance on the relevance and necessity of the Interrogatories for the purpose of the Effects Issue was simply premised upon it being dependent upon the court’s rulings on the Competency Issue.

26. In support of the Leave Application, the plaintiff takes a new point under proposed Ground (2)(ii) to (v) that in the event that any of Mr Leiduck's affidavits / witness statements are held not be affected by incompetence, the court has a discretion under section 47(1) of the EO to exclude such hearsay evidence if the plaintiff objects to their admission and their exclusion is not prejudicial to the interests of justice.

27. Mr Yan SC further refers to section 49 of the EO which requires the court, in estimating the weight (if any) to be given to hearsay evidence in civil proceedings, to have regard to any circumstances from which any inference can reasonably be drawn as to the reliability or otherwise of the evidence.  Under section 49(2)(d) and (f), two of the relevant circumstances are:

(1)  whether any person involved had any motive to conceal or misrepresent matters; and

(2)  whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight.

28. According to Mr Yan SC, answers to the Interrogatories will provide the court with information as to whether the defendants and those acting according to their instructions and on their behalf (including Mr Leiduck Jr and Robertsons) had known about Mr Leiduck's incompetence but chose to conceal such matters from the court and from the plaintiff.

29. I duly note what Mr Wong SC says in response in paragraph 36 of the defendants' Skeleton Submissions dated 10 August 2016.  However, I do not wish to pre‑empt either party's submissions on the merits of the plaintiff's proposed reliance on section 49(2)(d) and (f) of the EO at the hearing of the Effects Issue by addressing the point here in this context.

30. To my mind, on the question whether there has been any delay in alerting the plaintiff and the court about Mr Leiduck's incompetence, it is sufficient to refer to paragraphs 21 and 22 of the Decision.  Although I have referred expressly to just the Stein Report and the Pfeffer Reports, it seems to me what I have said in these paragraphs should apply equally to all the other medical reports on Mr Leiduck.  That is to say, all such medical reports can be taken as being in the hands of Mr Leiduck once they were compiled.

31. Mr Yan SC however complains that I have overlooked the position of the 2^nd defendant.  He seeks to fill that gap by relying on Mr Leiduck Jr's appointment as a director of the 2^nd defendant on 13 February 2013 in place of his mother who died on 3 February 2013. According to Mr Yan SC, knowledge of Mr Leiduck's incompetence on the part of Mr Leiduck Jr ought to be imputed to the 2^nd defendant from the time of his appointment as director of the 2^nd defendant.

32. The position of the 2^nd defendant can be dealt with shortly.  It appears that Mr Yan SC has overlooked the fact that Mr Leiduck had at all material times remained a director of the 2^nd defendant so that his own knowledge of his mental condition can be imputed to the 2^nd defendant.  It is therefore wholly unnecessary to bring in Mr Leiduck Jr for the purpose of fixing the 2^nd defendant with notice of Mr Leiduck's incompetence.

33. To reinforce his submission on proposed Ground (2), Mr Yan SC also referred to the concern that I previously expressed as to why the matter of Mr Leiduck's incompetence had not been drawn to the court and the plaintiff's attention earlier and observed that such question has still not been properly answered or addressed (proposed Ground (2)(iii) and (iv) ).

34. I am afraid I do not understand the plaintiff's determination to extract an explanation on this matter from the defendants.  On the plaintiff’s case, the timing of the disclosure of Mr Leiduck's incompetence goes to the defendants' conduct of the application for an inquiry as to damages, which is material to the court’s exercise of discretion as to whether to order an inquiry as to damages or not (and as to costs).  I repeat what I have already said in paragraphs 21 and 22 of the Decision and paragraphs 30 to 32 above on how the question as to whether there has been delay by the defendants in alerting the plaintiff and the court about Mr Leiduck's incompetence can be adequately addressed on existing materials.  If there has been delay, the presence or absence of a proper explanation therefor would be one of the matters that I would take into account in deciding whether to order an inquiry as to damages and in awarding costs.  I would however not be hampered in my exercise of such discretion by the lack of an explanation for the delay by the defendants.  Where necessary and appropriate, an adverse inference can be drawn when an explanation is called for but not given.  It is a matter for the defendants.  They remain silence at their own risks.

Proposed Ground (3) — Relevance to, and necessity for fair disposal of, the defendants' application for an inquiry as to damages

35. I refer to what I have said in paragraphs 30 to 32 above, which also deals with Ground (3).

Proposed Ground (4) — Relevance to, and necessity for fair disposal of, the question of costs

36. With regard to the question of costs between the plaintiff and the defendants (Ground (4)(iv) to (v) ), while I have not expressly dealt with the same in the Decision under the heading of “Relevance to, and necessity for the fair disposal of the question of costs”, the plaintiff’s case against the defendants on the wasted costs in connection with Mr Leiduck’s evidence is based on the failure on the part of the defendants to disclose Mr Leiduck’s mental state and the relevant medical reports to the court and the plaintiff at the earliest opportunity.  That being the case, I would have thought the same is covered by paragraphs 21 and 22 of the Decision, which I have supplemented by paragraphs 30 to 32 above.

37. As for costs against Mr Leiduck Jr and Robertsons, I accept that I have overstated in paragraph 27 of the Decision the hurdle facing an applicant for costs against a non‑party at the first stage of the procedure under Order 62, rule 6A.  The correct position is that at the first stage, the court will refuse the joinder of the targeted non‑party only if it is “plain and obvious that the application amounts to an abuse of process, by reason of delay or other misconduct on the part of the applicant, or because the application can be seen to be manifestly and fundamentally misconceived as to be an abuse by the applicant”: see Sun Focus Investment Ltd v Tang Shing Bor (No 2) [2012] 5 HKLRD 853, [19] per Mimmie Chan J.

38. Nevertheless, I believe what I went on to summarise in paragraph 29 of the Decision remains valid:

“… the mechanism for seeking costs against a non‑party or a legal representative does not include a roving inquiry into the conduct of the non‑party or legal representative to enable the applying party to gather evidence or other materials to build or support the costs application against the non‑party or legal representative. Rather it is upon the applying party to show at the first stage a case that justifies it being allowed to proceed to the second stage (of hearing and adjudication).”

39. I remain of the view that the Interrogatories is a fishing expedition to obtain materials to boost the plaintiff’s position on costs against Mr Leiduck Jr and Robertsons, if not to put the plaintiff in the position to mount applications for costs against Mr Leiduck Jr and Robertsons.

Proposed Ground (5) — Necessity for Saving Costs

40. The plaintiff questions my assessment that it would have been most unlikely for the plaintiff to be permitted to cross‑examine Mr Leiduck Jr on Mr Leiduck’s mental health given the relatively little weight that Mr Leiduck Jr’s observations would command in view of the whole body of medical and nursing records on Mr Leiduck that has been disclosed by the defendants.

41. Had an application to cross‑examine Mr Leiduck Jr been made by the plaintiff, it would have been within my case management discretion to disallow the same.

42. More importantly, Mr Wong SC has highlighted the fact that the plaintiff had never requested to cross‑examine Mr Leiduck Jr in the inquiry held by the court on the Competency Issue.  In this regard, the inquiry has been conducted through a tailor‑made procedure largely agreed upon by the parties and sanctioned by the court, as obtained in the Order dated 5 November 2013 as amended on 24 December 2013.  Under that procedure, a jointly appointed expert (Dr Förstl) was given unrestricted access and assistance from both parties (in particular the defendants) to inquire into all the relevant circumstances and to report to the court the evidence that he had gathered and his findings and opinions.  Two more experts (Prof Lieh-Mak and Prof Chiu) were subsequently appointed by the parties, with the leave of the court, to assist the court in assessing the opinions provided by Dr Förstl.  Such inquiry has been completed after almost three years including 23 days spent in court.  At no time during the inquiry before the last day of the final submissions on the Competency Issue had it ever been suggested that in addition to the interviews to be conducted by Dr Förstl, any of the informants who had contact with Mr Leiduck at the relevant times (including Mr Leiduck Jr) needed to be tendered for the plaintiff’s cross examination.

“Some other reason”

43. Neither party has referred me to any decided case in which the court granted leave to appeal on this basis, though my attention is drawn to Hong Kong Civil Procedure 2016, Volume 1, §59/2A/4 which points out that it is impossible to give an exhaustive list of the circumstances under which an intended appeal that has no reasonable prospect of success should be heard in the interests of justice but suggests that one such circumstance is where the question raised is one of general principle, decided for the first time, or a question of importance upon which further argument and a decision of the Court of Appeal would be to the public advantage.

44. The issue on which the plaintiff says the Court of Appeal should be given the opportunity to give guidance is whether a litigant who has caused wastage of time, costs and judicial resources by putting forward an incompetence witness ought to be required to provide a full and frank explanation to the court and to the opposing party as to why disclosure of such incompetence was not (or could not have been) made earlier.

45. For the reason already set out in paragraphs 33 and 34 above, I am not persuaded that this justifies the Court of Appeal hearing the intended appeal.

STAY APPLICATION

46. This is not the first time in these proceedings that I am faced with the dilemma whether to stay the trial to enable a party to pursue a proposed interlocutory appeal to the Court of Appeal.

47. In the Decision handed down by me on 2 April 2013, I summarised the relevant principles in paragraphs 7 to 13 as follows:

“7. While I agree with Mr John Yan SC for the Plaintiff that each case turns on its own facts, in particular, the nature and effect of the interlocutory order sought to be appealed against and its bearing on the issues to be decided, it can be stated as a matter of general principle that appeals to the Court of Appeal in the course of trials of actions or other substantial hearings of applications are highly undesirable and greatly discouraged. Apart from disrupting the trial or hearing and adding to the workload of the Court of Appeal, many such interlocutory appeals might eventually turn out to be academic having regard to the final outcome of the trial or hearing. Consequently, the Court of Appeal may hear an interlocutory appeal in the course of a trial or hearing but only in exceptional circumstances. See Hong Kong Civil Procedure 2013, Volume 1, p 458, §20/8/12 (citing the English Court of Appeal’s judgment in McGarry (E) Electrical v Burroughs Machines, unreported, 14 April 1986, Transcript No 346). An example of exceptional circumstances given by the learned authors is where the trial is likely to be lengthy and an application for amendment to pleading is made to the trial judge which is substantial or crucial and which, whether granted or refused, will or may affect the final outcome of the action or is likely to be decisive after litigation. In such a situation, the trial judge may rule on the application and give the parties leave to appeal, and then adjourn the trial before him to enable the parties to appeal with due expedition to the Court of Appeal who may in its discretion hear the appeal speedily, and thereafter the parties will return before the judge to resume the trial in the light of the decision of the Court of Appeal on the proposed amendment.

8. The same statement of principle at p 369, §20/5–8/12 of the Annual Practice was cited with approval by the Court of Appeal in Lam Choi King v Yeung Fook Chi [1991] 1 HKC 219 at 226G–227B, which involved an interlocutory appeal against a ruling made in the course of a trial excluding the evidence of a witness called by the plaintiff on the ground that it was irrelevant to the issues for trial. The Court of Appeal considered the views expressed by the editors of the Annual Practice as to the undesirability of interlocutory appeals in the course of trials to be apposite to the situation before it, although those views were expressed in the context of amendments to pleadings in a system of litigation which envisaged the grant or refusal of leave to bring interlocutory appeals.

9. The general disapproval of interlocutory appeals during trial save in exceptional circumstances was said by the Court of Appeal in To Kan Chi v Pui Man Yau [1998] 3 HKC 371 at 387 per Nazareth VP to be ‘not in doubt’ and to have been ‘reinforced by the increasing emphasis by this court upon case management by the trial judge’ (see further paragraph 11 below). See also CKW Company Limited v Secretary for Justice [2005] 1 HKC 96, an interlocutory appeal against a decision made by a trial judge on the first day of trial refusing to revisit his earlier decision for a split trial of the issues of liability and quantum, at 109A–H per Woo VP citing Lam Choi King and To Kan Chi.

10. Having regard to such general principle, it would be obvious that risks that commonly exist where parties wish to appeal against interlocutory orders and directions when the trial or hearing is still ongoing (for example, that the time and costs incurred for the trial or hearing, if continued, or part thereof would be wasted if the proposed interlocutory appeal were successful) are not exceptional circumstances. See Wang Sin Shin v Nina Kung, HCAP 8/1999, unreported (Chu J, 17 March 2005),§6.

11. On what may constitute exceptional circumstances, apart from the grant or refusal of leave for substantial or crucial amendments to pleadings having a decisive effect on the final outcome of a lengthy trial as identified in the Annual Practice and adopted by the editors of Hong Kong Civil Procedure (or, I suppose, any other interlocutory orders or directions having such an effect), it seems that an interlocutory appeal to the Court of Appeal may also be allowed to proceed in the middle of a trial or hearing where the judge has erred in principle and the particular matter is not capable of being remedied on appeal post trial. In support, in To Kan Chi, supra, the only case cited by the parties in which the Court had exercised its discretion to adjourn a trial pending an interlocutory appeal, the trial judge allowed to stand 5 writs of subpoena deuces tecum directed to 5 Government departments requiring them to produce 32 original files to which the Government as a defendant had in its list of documents referred. The 5 Government departments subpoenaed were however not themselves parties to the proceedings. Nazareth VP said at 387F–H:

'There remains to be dealt with Mr Barlow's point that interlocutory appeals during trial should be discouraged (see Supreme Court Practice 1997, Vol 1, p 364 para 20/5-8/15), also Lam Choi King v Yeung Fook Chi (t/a Yeung Yat Fat Wood Co) & Ors [1991] 1 HKC 219 at 226G-227D).

That principle is not in doubt, and has been reinforced by the increasing emphasis by this Court upon case management by the trial judge. However, here it is a matter of non-parties being vexed and probably also oppressed by having to examine the massive files involved. Moreover, it is not a question of the particular matter being capable of being remedied on appeal post trial, as is ordinarily possible in matters inter partes. While not underrating the disruptive and potentially prejudicial effect of this appeal upon the plaintiffs, particularly in the context of prolonged hearings, I have no doubt that the non-party Government departments must be permitted to proceed with their appeal.'

12. The burden is on the party seeking the adjournment pending the interlocutory appeal to demonstrate that there are exceptional circumstances justifying the adjournment. It is not for the opposing party to show why the trial or hearing should not be adjourned or show urgency in having to proceed with the trial or hearing as scheduled. Urgency will only make it more difficult to justify adjourning the trial or hearing. See Wang Sin Shin v Nina Kung, supra, §5.

13.   Following the coming into force of the Civil Justice Reform which introduces the requirement for leave to bring interlocutory appeals, a party who wishes to appeal against an interlocutory order made in the course of a trial would have to and should issue a summons for leave to appeal within the time prescribed by the rules of the Court for such step to preserve that option.  Unless there are exceptional circumstances justifying the adjournment of the trial pending the interlocutory appeal, adherence to the principle of discouragement of interlocutory appeals during trial would require the judge to continue with the trial as scheduled.  Given that one of the objectives of such principle is to prevent the unnecessary pursuit of potentially academic interlocutory appeals, contrary to Mr Yan SC's submissions, it would in such circumstances be generally appropriate and sensible for the trial judge to adjourn the argument on, and the determination of, the application for leave to appeal sine die with liberty to the applicant to restore after the conclusion of the trial.  Otherwise, the applicant for leave would be compelled by the rules of the Court to proceed with the interlocutory appeal upon leave being granted by the trial judge or to seek leave from the Court of Appeal itself if the trial judge declines leave and then to proceed with the appeal if the Court of Appeal gives leave."

48. Bearing in mind these principles, I have come to the conclusion (not without some initial resistance) that on balance the court and the parties should not press ahead with the determination of the Competency Issue and the Effects Issue and the balance of the trial before the disposal of the plaintiff's intended renewed application to the Court of Appeal for leave to appeal against the Decision and, if leave be granted, the appeal.

49. I have taken into account the following considerations: the resources that has already been put by the parties and the court into the inquiry into Mr Leiduck's competence or otherwise as a witness (not to mention the trial as to whether there should be an inquiry as to damages); the relevance of the Interrogatories to multiple issues asserted by the plaintiff; the place of Mr Leiduck's evidence in the defendants' case; and the potential domino effect that a ruling by the Court of Appeal that I have erred in the Decision might have on the outcome of the Competency Issue and the Effects Issue and consequently on whether there should be an inquiry as to damages.

50. I am however not prepared to grant an open-ended stay.  At the time moment, the hearing of the Effects Issue has been set down for 21, 22 and 23 September 2016.  I will vacate that hearing.  The parties and the court are, in the meantime, to reserve 7, 8 and 9 December 2016 for the adjourned hearing of the Effects Issue.  The court and the parties shall revisit the further conduct of these proceedings upon the disposal of the Plaintiff's renewed leave application before the Court of Appeal.  The Plaintiff is therefore to report to the court the outcome once such application is determined. 

ORDER

51. For the above reasons, I dismiss the Leave Application. I also make an order nisi that the plaintiff should pay the defendants' costs to be assessed summarily.  The defendants should file and serve their statement of costs within 14 days.  The plaintiff should file and serve its statement of objections (if any) within 14 days thereafter.  The defendants should have 14 days to respond to the plaintiff's objections (if any).

52. I further direct that the hearing of the Effects Issues on 21, 22 and 23 September 2016 be vacated and adjourned to 7, 8 and 9 December 2016.

Appendix

The Plaintiff’s grounds of appeal

(1)   The learned judge erred in finding that the Interrogatories are not relevant to the Competency Issue:

(i)  Having accepted that interrogatories on the 5 matters raised in the 21^st Affidavit of Jeremy David Levy dated 23.8.2013 (“JDL’s 21^st Affidavit”) and the 4^th Affidavit of Helge Leiduck dated 23 September 2013 (“HL’s 4^th Affidavit”) (as set out at §8 of the Decision) may be regarded as potentially relevant to the competency or otherwise of Mr. Hebert Heinz Horst Leiduck (“Mr. Leiduck”) during 2013 if couched in terms restricted to eliciting details about Mr. Leiduck’s mental condition, the learned judge erred in finding (at §10 of the Decision) that the bulk of the Interrogatories go beyond this.  The learned Judge ought to have held that answers to the Interrogatories will provide information as to the 5 matters set out at §8 of the Decision.

(ii) The learned Judge erred in finding that the 3 matters set out in §10 of the Decision are irrelevant to the Competency Issue (as defined in §§18-19 of the Decision dated 22 April 2014). The learned Judge ought to have held that the 3 matters are relevant to the Competency Issue in that :

(a) The involvement of Mr. Helge Leiduck (“Helge Leiduck”) in the conduct of these proceedings prior to his appointment as Mr. Leiduck’s next friend in November 2013 is relevant to Mr. Leiduck’s mental condition at the relevant times, particularly his capability of independently handling matters concerning these proceedings and the extent to which he had to rely on Helge Leiduck’s assistance in handling these proceedings e.g. giving instructions to his legal team for the conduct of these proceedings.

(b) Helge Leiduck’s instructions to and/or communications with the doctors who had taken care of and/or examined Mr. Leiduck as well as lawyers acting for Mr. Leiduck concerning the proceedings in Hong Kong and Augsburg with which Mr. Leiduck was concerned, and regarding Mr. Leiduck’s mental health, his examinations by the said doctors and the results of the examinations are relevant to Mr. Leiduck’s mental condition at the relevant times.  As Helge Leiduck purports to have had close contact with his father during the relevant times and personally observed the deterioration of his mental health, his instructions to and/or communications with Mr. Leiduck’s doctors and lawyers would be relevant to Mr. Leiduck’s mental condition at the relevant times.

(c) Similarly, the Interrogatories concerning the events in the Augsburg court, in particular, the alleged inability of Mr. Leiduck to give evidence as a witness in the trial of Mr. Schreiber pursuant to subpoena(s) issued to him leading to the court’s order for a medical examination of Mr. Leiduck (see §§7-8 of the Interrogatories) are plainly relevant to the Competency Issue as the events in the Augsburg court directly or indirectly reflect upon the competency of Mr. Leiduck as a witness in these proceedings.

(d) The time when Helge Leiduck and Messrs. Robertsons respectively became aware that Mr. Leiduck had, or might have become incompetent as a party and as a witness is relevant to the issue as to when Mr. Leiduck first became incompetent.

(iii)  Having found (at §11 of the Decision) that answers to Interrogatories 1(i), 9(i) to (vi), 11(i) and 13(i) may provide information as to when Helge Leiduck first observed symptoms of cognitive impairment in Mr. Leiduck, which are potentially relevant to Mr. Leiduck’s competence, the learned Judge erred in holding (at §§12-16) that such Interrogatories are not necessary and that the Court would not be assisted to any material degree by Helge Leiduck’s answers to such Interrogatories by reason that “extensive” and “voluminous” medical records of Mr. Leiduck have been disclosed:

(a) The availability of medical records does not detract from the relevance and necessity of the Interrogatories in the Court’s determination of the Competency Issue.  In any event, the medical records available in respect of Mr. Leiduck for the period prior to 2011 were limited.

(b) Dr. Hans Forstl (the joint expert) and Professor Helen Chiu (the expert appointed by the Defendants), who gave evidence on the Competency Issue, considered observations from “informants” to be relevant in assessing Mr. Leiduck’s competence at the material times.

(c) As Helge Leiduck was allegedly the person closest to Mr. Leiduck and with whom Mr. Leiduck allegedly had frequent contact and communication, his observations (if given on oath and assessed by the Court to be credible) would be relevant to the Court’s assessment of the experts’ evidence as to Mr. Leiduck’s mental state at different periods in time.

(iv)  The learned Judge erred in finding at §17 of the Decision that since Dr. Forstl has been provided with JDL’s 21^st Affidavit and HL’s 4^th Affidavit, and that he also interviewed Helge Leiduck (and stated the information obtained in his report), and that the Court would take such information into account in ruling on the Competency Issue, it would be unnecessary to require Helge Leiduck to answer the Interrogatories “just so that [the court] can have the same or similar information verified on oath”:

(a) The Interrogatories do not ask for “the same or similar information” as what has already been stated in HL’s 4^th Affidavit and in Dr. Forstl’s report.

(b) If the learned Judge is to take into account the information provided by Helge Leiduck to Dr. Forstl as stated in Dr. Forstl’s report (which is no more than hearsay), it is all the more important for the Court to require Helge Leiduck to provide his observations as to Mr. Leiduck’s mental condition on oath, especially given that the Defendants have chosen not to tender him as a witness for the purpose of proving competency of Mr. Leiduck at the relevant times.

(c) Indeed, the learned Judge’s indication that she would take into account information contained in JDL’s 21^st Affidavit and HL’s 4^th Affidavit and Helge Leiduck’s observations communicated to Dr. Forstl in ruling on the Competency Issue is inconsistent with her finding that the Interrogatories would not assist the Court and would not be necessary by reason of the availability of medical records concerning Mr. Leiduck.

(d) The fact that Helge Leiduck’s answers to the Interrogatories may result in “another source of contention between the parties” should not be a reason to refuse leave for the Plaintiff to serve the Interrogatories if they are relevant to the issues which the Court has to resolve in these proceedings.  Further, the fact that Helge Leiduck’s credibility and reliability as a witness in these proceedings is an issue of contention between the parties renders it even more important that he ought to be required to provide his observations and knowledge as regards Mr. Leiduck’s mental condition on oath, rather than simply orally to the Joint Expert who cannot be in a position to assess the credibility of his statements.

(2)   The learned Judge erred in finding that the Interrogatories are not relevant to the Effects Issue.  The learned Judge ought to have held that the Interrogatories are relevant to the Effects Issue (as defined in §§18-19 of the Decision dated 22 April 2014) in that should the Defendants seek to rely on the affidavits and/or witness statements filed by Mr. Leiduck as hearsay evidence:

(i) Section 50(1) of the Evidence Ordinance (Cap. 8) (“EO”) requires it to be shown that Mr. Leiduck was “competent as a witness” at the time he made such affidavits and/or witness statements.  Therefore, as Interrogatories are relevant to the Competency Issue (which is what the learned Judge ought to have found), they are also relevant to the Effects Issue.

(ii) Further, the Court has a discretion to exclude hearsay evidence under section 47 EO where an objection is made by the Plaintiff and it is not prejudicial to the interests of justice to exclude such evidence.  In the exercise of such discretion, and in assessing whether it is “prejudicial to the interests of justice” to exclude hearsay evidence in a particular case, the Court is to have regard to all circumstances, and the matters set out in section 49 EO are relevant to the exercise of discretion, in particular whether any person involved had any motive to conceal or misrepresent matters, and whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight.  Answers to the Interrogatories will provide the Court with information as to whether the Defendants and those acting according to their instructions and on their behalf (including Helge Leiduck and the Defendants’ solicitors) had known about Mr. Leiduck’s incompetence but chose to conceal such matters from the Court and from the Plaintiff.

(iii) Indeed, at the hearing on 5 November 2013 (in respect of the Defendants’ application for the appointment of a next friend), the learned Judge had herself expressed concern as to why the matter of Mr. Leiduck’s incompetence had not been drawn to the Court’s attention in early June 2013.  Such questions have not been properly answered or addressed by the Defendants.

(iv) In the learned Judge’s decision dated 22 April 2014 (relating to the Plaintiff’s application to adduce evidence from its own expert on the competence of Mr. Leiduck), it was rightly held at §50 that “a party does owe a duty to the Court and to the opposite party not to knowingly, recklessly or negligently put forward an incompetent witness”. The learned Judge went on to state at §51:

“On the facts presently disclosed by the Defendants and known to the Court and the Plaintiff, by early June 2013 at the latest if not earlier[6], the question was raised within the Defendants’ camp regarding Mr Leiduck’s fitness to be questioned as a witness because that was what Dr Pfeffer was specifically asked to examine Mr Leiduck for.  The 1^st Pfeffer Report, though brief, concluded in no uncertain terms that Mr Leiduck was “legally incompetent, incapable of being questioned and unfit to face proceedings in view of his cognitive and emotional disturbances as well as his physical impairment”.  That being the case, that report should have been brought to the attention of the Court and the Plaintiff as soon as it was available to the Defendants in June 2013.  Had that been done, the preparation for the hearing and determination of the Competency Issue could have been set in motion months earlier than November 2013.”

(v) In the Plaintiff’s submissions to the Court in relation to the Competency Issue, the Plaintiff has raised other matters which go to demonstrate that the Defendants (and those acting on their behalf and in accordance with their instructions) had deliberately taken steps to conceal Mr. Leiduck’s incompetence.

(3)   The learned Judge erred in finding that the Interrogatories are not relevant to the exercise of the Court’s discretion as to whether or not the Defendants should be allowed to proceed with the inquiry as to damages:

(i) As rightly stated at §18 of the Decision, in exercise of the Court’s discretion whether or not to enforce the cross-undertaking in damages, all circumstances of the case including, in particular, the conduct of the Defendants in the enforcement of the cross-undertaking are relevant (see, for example, F. Hoffmann-La Roche & Co. A.G & Ors. v. Secretary of State for Trade and Industry [1975] A.C. 295, per Lord Diplock at 361D-F and Cheltenham & Gloucester Building Society v Ricketts & Ors [1993] 1 W.L.R. 1545, per Peter-Gibson L.J. at pp.1554H-1556F).

(ii) The Interrogatories are relevant to the conduct of the Defendants in these proceedings, in particular, whether they had deliberately concealed and/or failed to disclose to the Court and to the Plaintiff the incompetency of Mr. Leiduck at an earlier stage, and as soon as they had knowledge of such incompetency.

(iii) The learned Judge erred in finding at §22 of the Decision that given that (i) Helge Leiduck was not a party to these proceedings until his appointment as Mr. Leiduck’s next friend on 5 November 2013; (ii) Messrs. Robertsons are the Defendants’ solicitors; and (iii) the Defendants’ acceptance that the Stein report and Pfeffer Reports can be treated as being in Mr. Leiduck’s hands once they were compiled, the fixing of the time of Messrs. Robertsons’ knowledge would  not  add to the Plaintiff’s argument as regards the Defendants’ conduct of these proceedings.  The learned Judge failed to take into account the following:

(a) The 2^nd Defendant is also one of the applicants for leave to proceed with the inquiry as to damages.

(b) Given that Helge Leiduck was, since 13 February 2013, a director of the 2^nd Defendant, his knowledge ought to be attributed to the 2^nd Defendant insofar as Mr. Leiduck’s competence is concerned (Mr. Leiduck was the witness for both himself and the 2^nd Defendant).  As stated in §5 of HL’s 4^th Affidavit, Mr. Leiduck had also executed a power of attorney in favour of Helge Leiduck on 27 March 2013 to enable him to take care of his affairs.

(c) Given that Messrs. Robertsons is and was at all material times solicitors for both the 1^st and 2^nd Defendants and thus must be presumed to have been acting in accordance with their instructions in these proceedings, their knowledge is also relevant to the Defendants’ conduct herein. 

(d) Therefore, the knowledge of Helge Leiduck and Messrs. Robertsons as regards Mr. Leiduck’s incompetence and mental condition is relevant to the Defendants’ conduct in these proceedings, in particular, whether they had deliberately concealed and/or failed to disclose to the Court and to the Plaintiff the incompetency of Mr. Leiduck at an earlier stage.

(e) The decision not to disclose relevant information to the Court must presumably have been made by the 1^st Defendant, Helge Leiduck as the controlling mind of the 2^nd Defendant or persons who had authority to act on the Defendants’ behalf.  The Defendants cannot seek to hide behind those acting with their authority and for and on their behalf.

(4)   The learned Judge erred in finding that the Interrogatories are not relevant to the question of costs:

(i) The Court has a wide discretion in respect of making orders as to costs of proceedings.  Order 62 r.5 RHC provides that the Court in exercising its discretion as to costs shall take into account, inter alia, the underlying objectives set out in Order 1A, rule 1 (including to ensure “fairness” between the parties) and the conduct of all the parties, which would include (a) the manner in which a party has pursued or defended his case or a particular allegation or issue; and (b) conduct before, as well as during, the proceedings.  Litigation misconduct and abuse of process are also factors justifying indemnity costs orders against litigants.

(ii) The failure on the part of the Defendants to disclose Mr. Leiduck’s mental state and the relevant medical reports to the Court and to the Plaintiff at the earliest opportunity is directly relevant to the Court’s exercise of discretion when deciding the issue of costs in these proceedings.

(iii) As rightly stated by the learned Judge at §24 of the Decision, the wastage of costs in connection with Mr. Leiduck’s evidence could be substantial.

(iv) The learned Judge erred in finding at §25 that since the Interrogatories seek to ascertain the knowledge of Helge Leiduck and Messrs. Robertsons of Mr. Leiduck’s incompetence, the Plaintiff is only contemplating costs as between the Plaintiff and Helge Leiduck and Messrs. Robertsons.  It is clear from §43 of the Plaintiff’s Skeleton Submissions dated 10 January 2014 and §§38-41 of the Plaintiff’s Skeleton Submissions dated 14 January 2014 (in relation to P’s Summons), that the Plaintiff’s case is that the Interrogatories are relevant to costs as between the Plaintiff and the Defendants.

(v) As set out in §(3)(ii) above, the knowledge of Helge Leiduck (being a director of the 2^nd Defendant since 13 February 2013) and Messrs. Robertsons (being solicitors of the Defendants and acting in accordance with their instructions) as regards Mr. Leiduck’s incompetence and mental condition is relevant to the Defendants’ conduct in these proceedings, in particular, whether they had deliberately concealed and/or failed to disclose to the Court and to the Plaintiff the incompetency of Mr. Leiduck at an earlier stage.  Therefore, the knowledge of Helge Leiduck and Messrs. Robertsons is relevant to the costs liability of the Defendants themselves.

(vi) The learned judge also erred in finding (at §§26-30 of the Decision) that the Interrogatories are not relevant to the liability for costs on the part of Helge Leiduck and/or Messrs. Robertsons:

(a) Whether an application for a wasted costs order as against the Defendants’ legal team is appropriate or justified in the circumstances would depend, inter alia, on the evidence disclosed and to be disclosed, the answers to the Interrogatories and the Court’s determination of the Competency Issue and the Effects Issue.

(b) The fact that no application has yet been made by the Plaintiff to hold Helge Leiduck and/or Messrs. Robertsons personally liable for costs cannot be a reason to refuse leave to serve the interrogatories, especially in the light of the fact that the Court has itself raised concerns as to why the matter of Mr. Leiduck’s possible incompetence had not been drawn to the Court’s attention earlier.

(c) The incidence of costs is a matter which this Court will have to determine in these proceedings and the Interrogatories are plainly relevant in respect thereof.

(d) Contrary to the Judge’s agreement with the Defendants’ submission that the Interrogatories is a “fishing expedition”, the Interrogatories are based on the precise allegations raised in HL’s 4^th Affidavit and/or JDL’s 21^st Affidavit and the findings in the medical reports exhibited thereto, and only seek further details as regards, inter alia, the timing of various events (which the Defendants admit had occurred), the persons involved and/or who were informed in respect thereof.  

(5)   The learned Judge erred in finding at §32 of the Decision that the Interrogatories are not necessary for saving costs by reason that cross-examination of Helge Leiduck would “most unlikely” be allowed due to the “little weight” that his evidence would command in view of the “whole body of medical and nursing records on Mr. Leiduck that has been disclosed by the Defendants”:

(i) The relevance of Helge Leiduck’s answers to the Interrogatories as regards the Competency Issue is set out in §(1) above.

(ii) Given Helge Leiduck’s alleged close contact with his father during the relevant times and his personal observations as to the deterioration of his mental health as stated in his 4^th Affidavit, the Defendants ought to have called him as a witness for the purpose of proving Mr. Leiduck’s competence at the relevant time.

(iii) In any event, as stated in §§(2), (3) and (4) above, the Interrogatories are relevant not only to the Competency Issue, but also to the Effects Issue, the exercise of the Court’s discretion as to whether or not the Defendants should be allowed to proceed with the inquiry as to damages, and the question of costs.  The Defendants’ answers to the Interrogatories may lead to costs and time being saved in that:

(a) JDL’s 21^st Affidavit and HL’s 4^th Affidavit were filed at a very late stage in the proceedings when all of the Defendants’ factual witnesses had already given evidence.

(b) Subject to an application by the Plaintiff for Helge Leiduck to be recalled for the purpose of cross-examining him on the contents of his 4^th Affidavit and/or for Mr. Jeremy Levy to be tendered for cross-examination on the contents of his 21^st Affidavit, the Plaintiff has no opportunity to challenge the contents thereof or to request for further information and particulars of the allegations raised, which would be inherently unfair to the Plaintiff.

(c) The answers which the Defendants may give to the Interrogatories could obviate the need for cross-examination of the deponents or at least shorten any such cross-examination, which will lead to a saving of costs and time.