BOLD SHINE INVESTMENT LTD v. TSUI YEE KWAN

HCA 1867/1999 and HCA 1676/2011
(Heard together)

[2022] HKCFI 1957

HCA 1867/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1867 OF 1999

_____________

AND

HCA 1676/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1676 OF 2011

_____________

_____________

____________________

DECISION

____________________

INTRODUCTION

1.  This is the Plaintiff’s summons (“Summons”) for an application pursuant to Order 39, rule 2 of the Rules of the High Court, Cap. 4A dated 17^th of January 2022 so that:

“a letter of request shall issue to the proper judicial authority of the People’s Republic of China (“PRC”) for the examination of Luo Bing Kun (“Luo”), the Plaintiff’s factual witness on the Plaintiff’s behalf at Qingyuan prison and/or any designated places in Guangdong Province in the PRC and that the action be stayed until the return of the said letter of request and examination”.

2.  The Summons was directed to be determined on the papers by an Order of Au Yeung J.

3.  It is pleaded in the statement of claim that Luo is a director and shareholder of the Plaintiff (to the tune of 45%). In so far as it is relevant, the Plaintiff in these proceedings seeks a declaration that a property situate in Argyle Street Kowloon is held by the Defendant upon trust for the Plaintiff, and that the Defendant is to account to the Plaintiff for all sums received by the Defendant for the rental of the said property.

4.  As is apparent from the action number, these proceedings were commenced more than 10 years ago. The determination of the Summons will no doubt have an impact on the case management of these proceedings, as well as the mode and timing of the trial.

5.  Although many authorities were cited and fairly lengthy submissions were lodged, having considered them, it seems to me that the dispute between the parties fell within a fairly narrow compass.

THE ISSUES

        Issue 1: is cross-examination covered by the Arrangement when the HK Court is the requesting party

6.  The first issue is whether or not pursuant to the Arrangement on Mutual Taking of Evidence in Civil and Commercial Matters between the Courts of the Mainland and the Hong Kong Special Administrative Region (“Hong Kong SAR”), it is open to the Hong Kong SAR Courts through letters of request to request for certain witnesses to be examined and cross-examined (“the Arrangement”).  What is meant by being cross-examined this specific context will be considered below in more detail.

7.  This issue depends on the interpretation and understanding of the Arrangement.

8.  The Arrangement was recently the subject of judicial consideration by Au Yeung J in Huang Yu Hui v Zheng Shi Zi [2021] HKCFI 3362.

9.  The Plaintiff has also ‘adduced’ the opinion of Professor Zeng of the Sun Yat Sen University belatedly (on 11/4/2022).  There are some arguments over it, not least because it was adduced late.

10.  I have had regard to that evidence and will formally give leave to the Plaintiff to adduce the affirmation exhibiting it. However, for reasons which I explain below, I do not consider that it takes the Plaintiff’s case any further.

11.  I also note that^[1]:

(1)  The expert evidence is not in the form of sworn evidence^[2].

(2)  It contains no statement that the maker has read and accepted the code regarding the giving of expert evidence and his acceptance of the overriding duty owed to the court.

  Issue 2: should a letter of request be issued if it is to examine in chief only/chiefly

12.  The second issue arises in this way.

13.  Assuming that the Arrangement does not allow for cross-examination (either in the conventional sense as understood in Hong Kong SAR or only allows for a more limited or diluted form of cross-examination), should the Court nevertheless exercise its judicial discretion whether or not to grant the letter of request?

14.  I understand from the submissions filed on behalf of the Plaintiff that it accepts that the unavailability of cross-examination in the sense conventionally understood in common law systems would be one factor relevant^[3] (but on the Plaintiff’s case by no means a decisive factor) to the exercise of discretion.

DISCUSSION

          Issue 1: does the Arrangement allow for fully-fledged cross-examination

15.  The Arrangement (which I append its original version in the Chinese language to this judgment) provides in its recitals that in accordance with Article 95 of the Basic Law of the Hong Kong SAR of the People’s Republic of China and through consultation between the Supreme People’s Court and the Hong Kong SAR, the following arrangement is hereby made for the mutual taking of evidence and civil and commercial matters.

16.  There is no doubt that the present proceedings fall within civil and commercial matters and the Defendant has not contended otherwise.

17.  Article 6 is important and in my view, its wording and structure are fundamental to understanding what can and cannot be done. For reasons which are perfectly and immediately understandable, what can be requested in terms of the scope of assistance depends on whether the request is made by a People’s Court of the Mainland or a Hong Kong SAR Court:

“Article 6

The scope of assistance that may be requested by a People’s Court of the Mainland in requesting the taking of evidence by the Courts of the HKSAR under the Arrangement includes:

(1) examination of witnesses;

(2) obtaining of documents;

(3) inspection, photographing, preservation, custody or detention of any property;

(4) taking of samples of any property or carrying out of any experiments on any property;

(5) medical examination of any person.

The scope of assistance that may be requested by a court of the HKSAR in seeking the taking of evidence by the People’s Courts of the Mainland under the Arrangement includes:

(1) obtaining of statements from parties concerned and testimonies from witnesses;

(2) provision of documentary evidence, real evidence, audio-visual information and electronic data;

(3) conduct of site examination and authentication.”

(my emphasis)

18.  It can immediately be seen from the difference in wordings between the two subsections of Article 6 that whilst a People’s Court can request the Hong Kong SAR Courts for the “examination of witnesses” under the Arrangement, no such provision exists for the Hong Kong SAR Courts to make a request to the People’s Court.

19.  If examination of witnesses had been provided for under the Arrangement regardless of which party was the requester, there would have been no need for this dichotomy.

20.  As explained above, whether or not cross-examination of a witness in the Mainland Chinese Courts is within the scope of the Arrangement is a matter which had already been considered by Au Yeung J in Huang Yu Hui (supra).

21.  At paragraph 7(1) of that judgment, her Ladyship noted that the letter of request had been opposed on the basis that it would not be executed by the Mainland Chinese Courts as the examination of the defendant witness would fall outside the scope of the Arrangement.

22.  Her Ladyship analysed this issue as follows at paragraphs 24-37. I set out in full as I believe it comprehensively deals with some (indeed most) of the points made by the Plaintiff in this application at least in so far as Issue 1 is concerned:

“F. Issue 2: Whether cross-examination of a witness in the Mainland Chinese courts is within the scope of the Arrangement

24. The experts take different views as to whether it is permissible to conduct cross-examination of the Defendant under Articles 6 and 7 of the Arrangement beyond taking a statement from him (ie question 2).

25. Under Article 6 of the Arrangement, a distinction has to be made between who the requesting party is. If the requesting party is Hong Kong, only a statement can be taken from a witness; cross-examination is not provided for. If the requesting party is Mainland China, cross-examination is allowed. The difference in terminology, ie examination (訊問) and obtaining (“取得”) speaks for itself.

26. This interpretation of Article 6 is made even more apparent when compared to the parallel arrangement governing Mainland China and Macao, ie《關於内地與澳門特別行政區法院就民商事案件相互委托送達司法文書和調取證據的安排》(“Mainland-Macau Arrangement”), the amended version of which took effect on 1 March 2020.

(1) Article 18: “代為調取證據的範圍包括：代為詢問當事人、證人和鑑定人，代為進行鑑定和司法勘驗，調取其他與訴訟有關的證據”. (emphasis added)

(2) Article 20: “受委托方法院在執行委托取證據時，根據委托方法院的請求，可以允許委托方法院派司法人員出席。必要時，經受委托方允許，委托方法院的司法人員可以向證人、鑑定人等發問”. (emphasis added)

(3) Article 22: “受委托方法院可以根據委托方法院的請求，並經證人、鑑定人同意，協助安排其轄區的證人、鑑定人到對方轄區出庭作證。……本條規定的出庭作證人員，在澳門特別行政區還包括當事人”.

(4) Article 23 : “受委托方法院可以根據委托方法院的請求，並經證人、鑑定人同意，協助安排其轄區的證人、鑑定人通過視頻、音頻作證”.

27. The power to examine or cross-examine a witness in Mainland China exists under the Mainland-Macao Arrangement but not the Arrangement. According to the Defendant’s expert evidence, which I accept, Article 6 of the Arrangement provides for a unilateral way of taking evidence (“取得當事人的陳述及證人證言”) and not an interactive process (“互動的、動態的盤問/訊問程序”).

28. The Defendant has already prepared witness statements before he was jailed. What he applies for now is cross-examination, which does not fall within the scope of Article 6.

29. The Defendant’s expert, however, contends otherwise:

30. Firstly, he asserts that Article 6 of the Arrangement does not refer to “examination of witnesses” in the scope of assistance from the Mainland Chinese courts because of the different terminology used under Mainland law and Hong Kong law. He says that “statements from parties concerned” （當事人陳述）and “testimonies from witnesses” （證人證言）are one of 8 types of evidence under PRC law (A/217-8).

31. Without disrespect, the Arrangement is one negotiated between Mainland China and Hong Kong. The terminology in the Arrangement indicates that the draftsmen did not intend to introduce, wholesale, all types of evidence under Mainland law where Hong Kong is the requesting party.

32. Secondly, the Defendant’s expert says that the although there are no specific provisions for cross-examination under Mainland Chinese Court law, cross-examination could be achieved through a “confrontation” process (質證) under Mainland Chinese law. Under the confrontation process, the parties and their legal representatives can ask questions of a witness before evidence becomes admissible. The Defendant’s expert also cited the PRC Evidence Code (證據規定) which provides that the parties and their legal representatives can ask questions of witnesses upon approval of the Mainland Chinese courts and this is not disputed by the Plaintiff’s expert:

‘雖然中國大陸法律沒有關於盤問的具體規定，但是……在審判人員許可的情況下，當事人及其訴訟代理人是可以詢問證人的。

中國大陸法律中沒有關於盤問的具體規定，根據《民事訴訟法》和相關司法解釋法官當事人雙方及其律師可以對證人進行詢問，但是當事人雙方及其律師的詢問要在獲得法官的許可下，但是中國大陸法律沒有關於順序、回合、問題範圍等的詳細規定。

所以，雖然中國大陸法律中沒有盤問的具體規定，但是在質証過程中訴訟雙方是可以對証人做出詢問並且達成和香港普通法規定的盤問相同的效果的。’（A/218）

33. With respect, the Defendant’s expert himself made a distinction between cross-examination in general and examination in the confrontation process. It is plain that the confrontation process is for the limited purpose of establishing admissibility of evidence, whereas cross-examination under Hong Kong law is for much wider purposes of attacking credibility, establishing the truth of one’s case and destroying the truth of the opponent’s case.

34. Thirdly, the Defendant’s expert refers to the case of HKSAR v Hui Yat Sing (A/218-9) wherein the assistance of the Mainland Chinese courts was sought to cross-examine a witness. However, that was a criminal case not governed by the Arrangement. This has been confirmed by the opinion of the Plaintiff’s expert.

35. Fourthly, the Defendant’s expert suggests that even if the present request does not fall within the scope of assistance of Article 6, the Mainland Chinese courts may still, pursuant to Article 7, arrange for cross-examination, as this is not in breach of PRC law.

36. Mr Lai, counsel for the Defendant, submits that even if there is material difference between the confrontation process and cross-examination under Hong Kong law, it would not prevent the Court from issuing an LR. He relies on Delco Participation, §58, for the proposition that the important point is for there to be a fair and proper opportunity for the Plaintiff to cross-examine the Defendant:

‘Nor does it seem to me necessarily fatal to the application that there may be difference between the cross-examination which might be conducted in a Hong Kong court and the cross-examination which might be conducted in the Dutch court. What seems to me to be important is that Fang/HWH and CT/CTHK would have a fair and proper opportunity to cross-examine SVO on those issues in the Hong Kong actions on which they wish to cross-examine.”

37.  With respect, that is putting the cart before the horse. Article 6 governs the scope of assistance. Article 7 governs the manner of giving assistance. If Article 6 is not invoked, the procedural provision of Article 7 simply does not come into play. Article 7 cannot be invoked to expand the scope of assistance.’

23.  Huang Yu Hui (supra) is of course strictly speaking not binding on me. I however respectfully agree with her Ladyship’s analysis and do not consider that the submissions now made by the Plaintiff or the points made in the ‘opinion’ of Professor Zeng take the matter any further.

24.  There is nothing of substance which suggests that the People’s Court would pursuant to the Arrangement agree for Mr Luo to be cross-examined in the sense conventionally understood in Hong Kong SAR.

25.  As Sir Donald Nicholls observed in Panayiotou v Sony Music Entertainment (UK) Ltd [1994] Ch 142 at p 150F, “the English court would not normally embark on such a course unless there was reason to suppose the foreign court would be receptive to the request”.

26.  The issue here is not whether cross-examination is generally available in the case of domestic litigation^[4] in the Mainland Chinese Courts, but whether there is a basis for thinking that the People’s Court would be receptive to a request for cross-examination from the Hong Kong SAR Court.

27.  Based on the Arrangement and on the evidence before me, I am not satisfied that there is sufficient reason to suppose that the People’s Court would be receptive to a request for cross-examination and therefore I find Issue 1 against the Plaintiff.

28.  I therefore need to consider Issue 2.

          Issue 2:is it necessary for the purposes of justice if no or restrictive form of cross-examination

29.  Even if Luo cannot be cross-examined under the Arrangement, should he be ‘examined’ in chief^[5] assuming that this is available under the Arrangement?

30.  The Plaintiff’s fallback submissions, as contained in his Notes of Submissions, put it this way: “the fact that (assuming it is correct but Ps are not conceding it) the witnesses might not be cross-examined by Ds goes to the Court’s discretion and it does not go to jurisdiction”.

31.  In so far as it goes, it seems to me that this submission is correct. The non-availability of fully-fledged cross-examination is one factor to consider and to be balanced against other ones in favour of making a letter of request.

32.  It is accepted by the Plaintiff that where “the witness’s evidence merits fully fledged cross-examination yet such cross-examination will not be available if the matter proceeds by way of a letter of request, then this will weigh against the application” (the Conflict of Laws in Hong Kong 3^rd ed, paragraph 11.060, citing Okura & Company [1977] HKLR 557, a decision of Commissioner Liu QC (as Liu J.A then was).

33.  It is important to bear in mind, in particular by reference to judicial comity, that the Hong Kong SAR Court is not (and should not be) comparing the overall merits of its own judicial processes and procedures with that of other jurisdictions.

34.  What the Hong Kong SAR Court, as the requesting Court, has to do is to ask itself whether the processes available in the requested Court (assuming it accedes to the letter of request) are such that it would facilitate a fair trial in Hong Kong SAR in any particular case or would otherwise be for the purposes of justice to do so.

35.  Coleman J in Delco Participation B.V. v HWH Holdings Ltd[2021] HKCFI 249 summarised the relevant applicable principles on issuing letter of request at paragraphs 21-23, 25-28 as follows:

“21.  Issuing a letter of request is part of the inherent jurisdiction of, and in the discretion of, the High Court: see Kwan Chui Kwok v Tao Wai Chun [2002] HKCA 304 at §12.

22.  The relevant considerations for the court have been considered in, for example, Tang Yi v Edmund de Rothschild Asset Management Hong Kong Ltd[2018] HKCFI 1050 at §§13-17.  Reference can also be made to Johnston and Harris ‘The Conflict of Laws in Hong Kong’ 3^rd Ed at §§11-056 to 11-061.

23.  The starting point remains that witnesses should attend in person in Hong Kong to give their evidence. Therefore, the onus lies on the applicant to demonstrate that the witness cannot reasonably be expected to come to Hong Kong.  The court will bring a healthy dose of scepticism to arguments that the parties themselves, or the parties’ own employees, family members or other associates will not come to Hong Kong at their behest, where there is no medical or other reason to justify the refusal to come.

25.  It also falls to the applicant to satisfy the court that the evidence to be obtained is necessary in the interests of justice.  The actual wording to be found in Order 39 rule 1 is “necessary for the purposes of justice”, which seems to me to identify one requirement of necessity, and not two separate requirements of (a) necessity and (b) in the interests of justice.  In so far as any submissions have seemed to suggest two separate requirements, I reject that point.  The necessity is tied to the purposes of justice.

26.  One important feature is to consider whether the witness can give substantial evidence material to an issue in the trial, requiring the court to identify the issue to which the evidence is said to relate, and then to consider whether the evidence sought is relevant to that issue.  That approach identifies that the relevant interests or purposes of justice are the interests of all the parties to the litigation (not just the applicant).  That triggers a consideration of potential prejudice as well as benefit in the letter of request procedure, but it should be obvious that one of the purposes of justice is to seek to reach the fair adjudication of the factual issue(s) in question.

27.  If the evidence is such that a full-fledged examination (including cross-examination) is appropriate, such as where it concerns disputed versions of what an individual has said, that would weigh against the making of an order.

28.  On the other hand, if on the examination proposed to be conducted in the foreign jurisdiction the rights of the parties would not be so different from those under Hong Kong law, the letter of request may be issued.  Further, including in the letter of request particular provisions designed to obtain improved facilities for the conduct of the cross-examination might, where relevant, be added to the order.” (my emphasis)

36.  Louis Chan J in Tang Yi v Edmond de Rothschild [2018] HKCFI 1050 put it this way at paragraph 16:

“16.  If the evidence is such that a full-fledged cross-examination is appropriate (e.g. it concerns disputed version of what an individual has said), that would weigh against the making of an order (The Conflict of Laws at §11.060).”

37.  As explained above, I accept that the unavailability of ‘fully-fledged’ cross-examination not to be fatal to the making of a letter of request (see International Justice Assistance by David McLean at p.79)

38.  I also accept that in the present case (and this is not seriously opposed by the Defendant) that the evidence of Luo would be important to the Plaintiff’s case. I also accept that Luo, given his current incarceration, would not be able to come to Hong Kong SAR to give evidence. This is of course not the fault of the Plaintiff but neither is it the fault of the Defendant.

39.  However, Luo has already filed a written witness statement.

40.  What I have to compare from the perspective of the trial is (1) the Court can look at and submissions will be made on the weight to be given to the statement of Luo and (2) Luo can be examined-in-chief or perhaps orally confirm or swear that the contents of this witness statements are true but cannot be cross-examined.

41.  Is it better from the perspective of the trial and the trial Judge if Luo can be examined-in-chief but in substance not be cross-examined, than if only his witness statement is produced?

42.  In the present circumstances, I am unable to see how the parties and indeed the Court would be in a more advantageous position to assess Luo’s evidence (if it is to be given in chief) as opposed to considering his statement as a hearsay statement on the basis that he was unable rather than unwilling to make himself available for cross-examination.

43.  In any event, in the post civil justice reforms era, it is quite unusual for the Court to allow substantial (if at all any) examination-in-chief. In the premises, from a point of view of a fair trial or looking at the purposes of justice, I do not think it has been demonstrated that an examination-in-chief without fully-fledged^[6] cross-examination would be necessary, let alone desirable.

44.  Therefore, it does not seem to me that the letter of request (if in reality sought for the purpose of examination-in-chief rather than for cross-examination as understood in our system) would either be in the interests of justice, let alone being necessary in the interest of justice.

OTHER MATTERS

45.  Given my conclusions above, it is unnecessary to consider another ground relied upon by the Defendant to resist this application, namely delay.

46.  While the Plaintiff has skilfully tried to explain away the delay, I am of the view that there was delay (at least from the date of the filing of the witness statement of Luo until the filing of the Summons).

47.  However, had I considered that the letter of request was otherwise necessary for the purposes of justice, I would have been prepared to accede the Summons, albeit the inexcusable delay would be a factor I would have considered relevant to the issue of costs.

DISPOSAL

48.  For these reasons, I would dismiss the Summons as well as the summons seeking retrospective leave to file evidence dated 12^th April 2022. It seems to me plain that costs follow the event, and the Plaintiff will bear the costs of this Summons to be taxed summarily on a gross sum basis. I will thus make the costs order on a nisi basis.  The parties have submitted gross sum assessment schedules.  If no application is made within 14 days to vary the costs order I will assess the costs on a gross sum basis.

49.  It remains for me to thank the parties’ respective counsel team for their able assistance.

Annexure