LUAN GANG v. SIMPSON MARINE LTD

HCA 107/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 107 OF 2011

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(By Original Action)

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(By Counterclaim)

AND

HCAJ 171/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 171 OF 2011

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R U L I N G

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[This ruling was given extempore but with the consent of counsel has been edited.]

1. I have two preliminary applications before me. For reasons which I will outline, they determine whether this trial should proceed or whether an adjournment should be ordered.

2. Ms Wong, leading counsel for the plaintiff, has made an application to permit the filing of the witness statement of Ms Xiao Han so that she may testify on behalf of the plaintiff. The application is opposed by Mr Alder, counsel for the defendant.

3. For his part, Mr Alder has made an application on behalf of the defendant to permit the admission into evidence of a large bundle of documentary material consisting of photographs, e-mails, invoices, technical manuals and the like. This application is opposed by Ms Wong.

4. So that the applications may be considered in context, a very brief background of the dispute must be given.

5. In or about December 2009, the plaintiff entered into an agreement with the defendant for the purchase of a yacht to be built in Italy and then brought to Hong Kong.  Not unusually, the yacht was to contain certain extra features not included in the basic model.

6. Of central importance to this litigation, one of the extra features was a VMA system, VMA standing for ‘vessel maneuvering system’. This system is used in the main for berthing a vessel. It is the plaintiff’s case that it was agreed that the VMA system would be installed so that it could be operated from both the helm and the flybridge.  This he considered to be an important installation as he would in the ordinary course of events be berthing the vessel in a busy marina.

7. It is the plaintiff’s case that, as the yacht was intended as a gift for his bride-to-be, the time of delivery of the yacht was of the essence. 

8. In the broadest of terms, it is the plaintiff’s case that the defendant failed to deliver the yacht within time with the VMA system duly installed. Accordingly, by letter from his solicitors dated 23 August 2010, it was asserted that there had been a breach of the contract and the plaintiff was entitled to refuse to accept delivery of the vessel.  The plaintiff sought the refund of the purchase price that had been paid in full and the refund of deposits paid in respect of certain late additions.

9. The assertion that there had been a breach of contract was denied by the defendant on the basis that the vessel was ready on time with the VMA system duly installed.

10. What needs to be mentioned is that during the course of the litigation an order was made for the sale of the yacht with the proceeds being lodged with the Court.  Accordingly, the expense of maintaining the vessel pending a final determination of this litigation has been avoided. This, in my view, is a point of some importance in determining whether an adjournment should or should not be granted.

11. A further matter of importance is that yesterday afternoon a ruling was handed down denying the plaintiff the right to give his evidence in the trial by way of video link from the USA.  It appears that the plaintiff now lives in the USA; it further appears, or so he has asserted, that he suffers from a bi-polar disorder and, because of his illness, has apparently been advised not to travel. Accordingly, if this trial goes ahead today, the plaintiff will not give evidence.  In light of that fact, other evidence to be led in support of his case naturally takes on greater significance.

12. This brings me to the plaintiff’s application to admit the witness statement of Ms Xiao. Ms Wong submits that this is a statement of considerable importance.  Ms Xiao apparently is the operations manager of a marina, knows about vessels and was with the plaintiff when he negotiated the terms of the contract to purchase his vessel. She also appears to have acted as some sort of ‘mediator’ at a later stage.

13. However, at the PTR in this matter held on 26 July 2013, the Court directed that “any statement from further witness or witnesses be filed and served within 14 days from the date hereof”, it being agreed that this direction was subject to the condition – made clear at the PTR – that this direction did not give carte blanche to the parties to file and use any witness statements they chose.  Leave was still required.

14. Ms Wong concedes that, while the witness statement of Ms Xiao was filed and served within the time allocated, regrettably no application for leave to use it has been made. She has therefore made that application orally before me.  It is an application which is opposed by the defence on the basis that notice of an intention to apply for leave should have been made but was not and it is simply too late, at the very commencement of the trial with the witness herself at the door of the court, to now seek leave.  For the statement to be admitted at this late stage defies what was directed at the PTR.

15. As to the contents of the statement, while there may be issues as to the relevance or admissibility of certain portions, it does seem to me, potentially at least, to appear to be a statement of importance to the plaintiff, the more so, as I have said, as the plaintiff himself will not be giving evidence.  To refuse to allow Ms Xiao to testify could therefore, potentially at least, be a major blow to the plaintiff’s case.

16. The defence application to file and use a bundle of new materials has also arisen very late in the day.  Indeed I understand that the bundle of materials was only served this past Friday in the late afternoon, today being a Tuesday.

17. The materials, however, appear to be of considerable importance to the defence case.  That is because, so Mr Alder argues, they support the defence case that by a specific date, that date being 18 August 2010, sea trials took place with the plaintiff himself being aboard the vessel and on that date the MVA system was fully installed – with a control at the helm and on the flybridge – and all was in good working order.

18. By that date therefore – several days before the plaintiff’s solicitors purported to refuse delivery of the vessel on the basis of breach of contract, misrepresentation and the like – the normal commissioning work was completed and the vessel fully ready for delivery with the plaintiff (by his presence on board during the successful sea trial) acknowledging that to be the case.

19. Mr Alder has pointed out that there is a photograph already in evidence which shows the plaintiff on the vessel, that photograph bearing the date of 18 August 2010.  As Mr Alder said during the course of submissions before me: the 18 August has become a, if not the, central date in these proceedings.

20. That may be so. The problem, however, is that the importance of this date and the evidence supporting it, was not apparently focused upon in the pleadings nor in the defence witness statements that have been filed.  Put simply, the identification of what could be a critical date has only, in any substantial form, arisen at the eleventh hour.  Earlier references – while they can be found – have been oblique.

21. On this basis, Ms Wong has opposed the admission into evidence of the bundle of materials. She has accepted however – correctly in my opinion – that she cannot oppose it in absolute terms and her opposition has been based on the contention that, if the materials are to be placed into evidence, time must be allowed for her to take full instructions from the plaintiff.

22. That time must be allowed appears to have been conceded by Mr Alder who has submitted however that instructions could be taken during the course of the trial or over the next couple of days with time still left to complete the trial.  Mr Alder’s suggestion was appealing.  An adjournment should be avoided if at all possible even if it does mean that the midnight candle must be burned.  But on consideration I am of the view that it would be unfair to the plaintiff to force him to consider this substantial bundle of evidential material over the next day or so, or while evidence is otherwise being given, and to give his instructions to Ms Wong. First, the plaintiff resides in the USA.  Second, he does not speak or read English well; he will therefore require Chinese translations, a task that will take time.  Third, there are a good many documents.  The result could well be that he is able to give informed instructions when there only remains a day or so to complete the trial or when a great deal of the evidence in this trial has already been given.

23. On the other hand, in my view, fairness dictates that it would be wrong simply to refuse to allow the defence to make use of evidential material that quite clearly is directly relevant to the dispute and may even be decisive.

24. I have therefore very reluctantly been drawn to the conclusion that it would be wrong to deny the plaintiff the opportunity to call the evidence of Ms Xiao and wrong to deny the defence the opportunity to use the bundle of materials that it seeks to place into evidence.

25. That being said, I am satisfied that it would be materially unfair to the plaintiff to make him answer the evidence contained in the defendant’s new bundle of materials ‘on the run’.  Put simply, the defendant must be given time to consider this new evidence.

26. I will therefore grant both applications to admit evidence but will do so in accordance with Ms Wong’s submission that the plaintiff must be given time to consider the new defence materials.  The present trial dates must therefore be vacated and new dates set down.  Counsels are agreed that four days will be sufficient. The sooner those dates can be set by the listing officer the better.

27. I have sought the views of counsel as to the issue of costs and they have no complaint with my suggestion that the question of costs must be reserved. There will therefore be an order to that effect.

28. I confess that I do not like reserving costs, leaving the decision to another judge who is once removed from the issue.  But in the present case I believe that the new trial judge will be better placed to determine with the benefit of hindsight whether an adjournment was required and in light of that where the fault lay in necessitating it.

29. As to the exact wording of the orders that flow from this decision, counsel have agreed to suggest a form of wording that may also encompass broader matters, for example, whether leave should be granted to amend the pleadings and/or witness statements, and the time within which such steps must be taken.  Counsels’ suggested form of wording is to be filed within 14 days of the date of this decision.