LO KAI BUN v. PONG MAN YI AND OTHERS

HCA4700/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 4700 OF 2002

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R U L I N G

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1. I have to decide whether to allow the Defendants to file a further list of documents and an additional witness statement by the 1st Defendant which speaks to the effect of those documents.

2. Ms Lau accepts, as she must, that all of this comes very late.  The first tranche of the trial took place in November last year and I last had the matter before me in March when I gave further directions.  The Plaintiff has now been cross-examined and this is all very inconvenient, although I have allowed him to speak to his solicitors so that they could take his instructions on the documents in order to determine the extent of the difficulties that might ensue for him if I were to allow these documents to go in.  Mr Yip for the Plaintiff takes sharp objection to what the Defendants wish to do. 

3. I should start examining whether these documents are admissible in the first place as being relevant to what I must ultimately determine.  The central issue in the action is whether the Plaintiff knew the nature and effect of the documents and agreements that he was signing in the course of transferring the core family businesses to the control of his wife, the 1st Defendant.  Her case is that he most certainly knew and that he had prepared himself for all of this by starting off businesses of his own which have since traded with customers of the original family companies; in effect, that he has set up rival businesses.  In this regard, these allegations have already been pleaded. 

4. This current late discovery relates to further and subsequently established businesses with factories, or at least a factory, in China.  The Defendants say the directorships and shareholdings have been given to family and associates but that these persons are no more than the Plaintiff’s nominees and that the real control lies with the Plaintiff. 

5. Ms Lau submits that although down the chronological line, this new evidence is part of a pattern of the Plaintiff developing a new business persona for himself after he had knowingly transferred the original family business to the control of the 1st Defendant.  That is how relevance is established and the evidence should be admitted. 

6. Mr Yip, in reply, says three things:  firstly, the documents do not pass the test of relevance and so nothing further should be seen or heard of them; secondly, if they are relevant, they should be pleaded or, at least, particulars in support of the Defendant’s case that the Plaintiff knew of the nature and effect of the documents that he signed when he transferred the business.  If that is so, then he must be given an opportunity to reply by pleading, either by amendment or new pleading.  Lastly, that his client will be forensically prejudiced if I allow this.  He should not have to be bothered by such matters in the middle of cross-examination.  Further, the Plaintiff and his solicitors will have to consider calling additional witnesses to counter the suggestions raised by the new discovery.  These documents are late and this lateness should sound in my discretion as to whether I should allow the documents to be put in. 

7. Plainly, there is much force in Mr Yip’s submission.  If I do allow this, it is going to further disrupt the trial which had originally been under-estimated and then adjourned, but which was further adjourned to these dates on the strong indication that an overall settlement was likely.  That expectation has come to nothing.  We now have a further five days which will be insufficient and so a further adjournment, part-heard, is inevitable.  This is all most unsatisfactory from everybody’s point of view.

8. As to relevance, I am persuaded that the new documents pass muster on that score.  The Defendants should have an opportunity, all other things being equal - which they are not - to develop this crucial part of their case that the Plaintiff knew what he was originally signing.  The next question is whether Ms Lau needs to plead their effect.  She says she does not; this is evidence and need not be pleaded.  Mr Yip refers to Order 18, rule 12 (see the note at page 301 of the current Practice) which is the well-known provision about particulars of knowledge having to be pleaded.

9. I uphold Mr Yip in this regard.  Ms Lau will need to provide particulars of knowledge relating to the Plaintiff’s signature of the original documents as these new documents are said to affect that averment by the Defendants and which, should include the main constituents of these new documents, before she can be allowed to use them in the trial.  Mr Yip will be allowed to respond, if he so wishes, by amendment of his present pleadings. 

10. Implicit in my saying this is that I have decided to allow this evidence to go in.  I do so because I regard it as relevant and the court should receive it, this having been said - the Plaintiff should be accommodated procedurally.  During this part of the trial, I will give him any further time that he, reasonably, requires to consider the documents with his solicitors.  He has already had most of yesterday. 

11. I will not permit cross-examination on these documents until he is in a position to respond to them properly.  I will also allow him to file further witness statements by himself and of other witnesses who can respond to this new evidence.  This case will inevitably have to go over after we complete this five-day segment and so that delay will remove any constraints as to time that have at present been placed on him by the lateness of the documents.  Lateness can and will be compensated for in costs.