LIU KING YU v. HO WAI LAN JANKIE

CACV 737/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 737 OF 2001

(ON APPEAL FROM HCA NO. 2632 OF 1998)

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1. This is an appeal from a judgment of Beeson J handed down on 22 February 2001. The plaintiff's claim related to the sale of a microkeratome for use in lasik surgery. The plaintiff claimed that the microkeratome sold by the defendant did not correspond with the description that it must have a cutting head gap of 150 microns, was not reasonably fit for the purpose for which it had been sold and that it was not of merchantable quality. The basis of the claim stemmed from the plaintiff's allegation that the cutting head gap of the microkeratome was not 150 microns but was substantially larger. The judge held that the plaintiff succeeded in his claim and awarded $316,800 in respect of the cost of the machine and interest thereon. No award for loss of use of the machine was made. On the defendant's appeal this court dismissed the appeal and said that it would give its reasons in writing later.

2. On this appeal the judgment below is challenged on three main grounds:

(a) That the judge made no finding as to the parameters of permissible deviation from the cutting head gap of 150 microns.

(b) The judge made no finding as to the width of the cutting head gap.

(c) The judge was wrong to accept Dr Lim's evidence that the width of the cutting head gap was 185 microns.

Background

3. The background facts to this case are set out in the judgment below. There was no challenge to the background facts. They can be simply stated.

4. In November 1996, the plaintiff agreed to buy a microkeratome from the defendant. The agreement was partly oral and partly in writing. The microkeratome was to be used by the plaintiff in carrying out lasik surgery. This entailed the cutting of a flap in the cornea of the patient's eye. The judge accepted the plaintiff's evidence that he had told the defendant the purpose for which the microkeratome was required and that he wanted one with the cutting depth fixed at 150 microns.

5. In December 1996, the plaintiff first used the microkeratome supplied by the defendant. There were two patients involved. The plaintiff operated on a single eye of each. He was not satisfied with the accuracy of the corrections which were achieved by those operations.

6. On 23 December, the plaintiff carried out two further operations. Again he was not satisfied. He drew this to the attention of the defendant. The defendant arranged for him to attend an eye hospital in Shenzhen on 3 January 1997 to observe operations carried out there.

7. The plaintiff again complained to the defendant about the machine. The defendant responded by providing a certificate of quality addressed to the defendant from the United States manufacturer of the machine. It is, perhaps, a little odd that such a certificate could be forthcoming from the manufacturer some months after the plaintiff's microkeratome left the manufacturer. The certificate was dated 14 January 1997. It related to the machine with serial number 286. It has been assumed that this was the microkeratome supplied to the plaintiff by the defendant, although the papers do not appear to show that. Indeed, it is a little odd that in the defendant's supplemental witness statement filed on 4 August 1999, there is exhibited an invoice showing the sale of another microkeratome, said to be of the same model as that sold to the plaintiff. That invoice is number 80343 and dated 20 February 1997. It identifies the serial number of the microkeratome as 281. The invoice to the plaintiff, on the other hand was number 80287 dated 6 December 1996. There is no identification of the serial number. Hence a microkeratome sold 2 months after that sold to the plaintiff had a serial number lower than that of the item to which the certificate related. In my view, there must be some doubt as to whether the certificate from the manufacturer in Arizona, dated 14 January 1997, related to the plaintiff's microkeratome which must have been manufactured in November 1996 or earlier. This matter does not appear to have been explored in the court below.

8. It is to be noted that that certificate read:

"We SCMD Ltd., the manufacturer of Lasik Keratome, hereby certify the above reference commodity is fully in compliance with the requirements in Specifications, Quality, Quantity, Proper Packing and Marking. The fixed cutting depth of the Keratome Head is 150 microns."

This figure of 150 microns corresponded to the manual which was supplied with the machine. That also stated that the microkeratome was set at 150 microns.

9. In early to mid January, the plaintiff found that the results from his lasik surgery still did not produce the expected results. He therefore ordered another machine from another manufacturer and supplier. That machine was supplied in March 1997.

10. At first, the plaintiff considered that the inaccuracy in the results achieved might have been caused by the technique which he used. He checked his own technique against those of other operators. He was satisfied that his technique was not the cause. Furthermore, he achieved satisfactory results with his new machine.

11. The plaintiff then compared his microkeratome with one belonging to the I-Centre. That was another surgery which conducted lasik surgery. He considered that the microkeratome supplied to him by the defendant was set at a wider cutting head gap than the other. In view of the fact that he considered that he was being given little assistance by the defendant, he wrote to the manufacturer directly.

12. In May 1997, the plaintiff cut plastic film samples with the microkeratome he had been supplied by the defendant. He made similar cuttings with the microkeratome which he had borrowed from the I-Centre. His own readings were that the samples which he had made from his microkeratome were significantly more than 150 microns. He then instructed the Hong Kong Standards and Testing Centre Limited to compare the thicknesses of samples. They confirmed that the cutting depth of the original head was significantly more than 150 microns.

13. On 9 February 1998, the plaintiff commissioned measurements to be carried out by Safety, Accident and Failure Experts Limited. The width of the cutting head gap of the microkeratome supplied by the defendant was to be measured using a scanning electron microscope. The electron microscope which was used belonged to the University of Hong Kong. It was a Cambridge Stereo Scan S440. The measurements were carried out by Dr Lim.

14. By this stage, the defendant had instructed solicitors. When Dr Lim carried out his measurements both the defendant and an engineer employed by her, Mr Hermes Ho, were present. The defendant's solicitor, Mr Fung Shu Wah, was also there to observe the proceedings. Dr Lim carried out measurements on four microkeratomes. One was, of course, that supplied by the defendant to the plaintiff which is the microkeratome in issue. Another was one which belonged to the I-Centre and there were two from another surgery, 148 Vision Centre. Representatives from both those other Centres were also present.

15. The results of Dr Lim's measurements will be referred to later. It suffices to say that on 20 February 1998, the writ in this action was issued. Dr Lim's report was dated 27 February.

16. Dr Lim's report was the subject of a hearsay notice dated 4 August 1999. After that had been served the defendant produced a document referred to as "Review on measurement of the gap of microkeratome head". That is dated 27 August 1999 and was itself filed on 1 September. In that review Dr Lau makes various criticisms of Dr Lim's report and the conclusions contained therein. The following four matters are noteworthy however:

(1) Dr Lau was not present when Dr Lim carried out his original measurements.

(2) Neither Dr Lau nor the defendant asked to see a repeat of Dr Lim's measurements.

(3) It is apparent from Dr Lau's report that he carried out some measurements in order to prepare his review. It is surprising that, whilst choosing to make measurements and refer to them in his review, he neither attempted to measure the important measurement which is significant for this case nor, if he did, did he mention it in his review.

(4) It is also surprising that Dr Lau did not ask to be provided with the microkeratome which is in issue.

A. The parameters of permissible deviation

17. The judge had before her medical evidence relating to lasik surgery. That evidence consisted not only of documentary evidence in the form of statements from witnesses who were not called but the oral evidence of Professor Denis Lam, the chairman of the Department of Ophthalmology & Visual Sciences of The Chinese University. The evidence shows that one of the matters which is important in lasik surgery is the existence of a layer of a minimum of 250 microns of tissue after the corneal flap has been cut. The need for exactness in the thickness of the corneal flap was referred to by Professor Lam in his written statement. He said that some patients would not be able to have lasik surgery if the cutting depth were 190 microns whereas they could if it were 150 microns. The extra 40 microns would be critical in some cases. It is hardly surprising that an ophthalmologist conducting lasik surgery for the first time would wish to use a microkeratome with a gap of no more than 150 microns. No doubt such a person would feel more comfortable with the relative extra margin for error. More experience might give confidence in handling a narrower margin. As already noted, the certificate provided by the manufacturer of the machine, insofar as it is relevant, stated that the cutting depth was 150 microns. It did not itself mention any tolerances relevant to that specification.

18. The defendant's expert witness Dr Lau stated in his review "The nominal value of the width is 150 microns with a tolerance of 12 microns, according to the manufacturer of the SCMD Lasik Turbo Keratome System." As recorded by the judge at the top of page 14 of the judgment, the plaintiff and his witnesses accepted that a variation of plus or minus 10 microns could reasonably be expected.

19. In my view, it is implicit in the judgment that the judge considered that that was the sort of variation which would be acceptable and any variations in the gap beyond 12 microns would render the microkeratome defective. Indeed, at page 16 when the judge said:

"I am satisfied that the Plaintiff's evidence has established that the cutting depth of the Microkeratome head purchased by Dr Liu was so significantly in excess of that specified, that it did not correspond to the description of it and that it could not be used for the purpose for which it was intended by Dr Liu." (emphasis added)

Once it is appreciated that it was the manufacturer's own specifications which laid down a tolerance of plus or minus 12 microns and that was the description of the item, the defendant's first point on this appeal falls to the ground.

B. Findings as to the width of the gap

20. Although the judge did not give a precise measurement as to the width of gap which she found proved in respect of the microkeratome in suit, it is implicit from her judgment that she accepted Dr Lim's assessment of a gap of approximately 185 microns, which is referred to on page 12 of the judgment. On page 14 and 15 of the judgment she considers that, even taking into account margins for error based on a reasonable assessment of Dr Lau's evidence, the gap of the microkeratome in suit was clearly well in excess of the specifications. In my view, that approach to the question of the size of gap was entirely justified in the circumstances of this case.

C. The criticisms made by Dr Lau

21. It is noteworthy that after the conclusion of the evidence on 27 October 2000 there was an adjournment of some 12 days until 9 November 2000 when the judge heard the closing speeches. There were detailed written submissions which were prepared for the closing speeches. It is clear from at least pages 7 to 12 of the judgment and, in particular, page 9 that the judge well understood the criticisms which had been made by Dr Lau of Dr Lim's measurements and the manner in which he had carried out his measurements.

22. It might be noted in passing that there was a specific attack on the competency, impartiality and credibility of Dr Lim. That attack was clearly rejected by the judge. It has not been renewed in this court.

(1) The "b" measurement

23. The first point taken below and one of the points taken on this appeal was that when Dr Lim did his original measurement he failed to take into account what was referred to as the "b" measurement, or value. In simple terms a microkeratome is a miniature version of a carpenter's plane. It is a tool with a rectangular flat working surface. The surface has a slit across the width of the rectangular surface approximately mid-way between the two ends. A knife blade protrudes through the slit. The knife blade is at an angle to the plane of the working surface. When the tool is held against a surface and moved forward, a sliver of that surface can be cut by the tip of the blade. It is the distance between the tip of the knife and the plane of the rectangular surface which is the relevant gap. It is the gap which determines the thickness of the sliver.

24. If the beam of the electron microscope could be directed exactly parallel to the plane of the working surface, the measurement of the gap would be a direct measurement. However, in practice it is not possible to direct an electron beam exactly parallel to the flat surface. To avoid difficulties, the microkeratome is rotated so that the beam of the electron microscope is at an acute angle to the working surface. This enables the operator of the electron microscope to obtain an unobstructed view of the gap. This is described at paragraph 5 of Dr Lim's report. As, however, is demonstrated at pages 2 and 3 of Dr Lau's review this would give a measurement of a slightly larger gap than the true gap. The explanation is that the electron beam of the microscope would, in effect, be directed along the blade beyond the plane of the working surface. The gap between the tip of the blade and the plane of the working surface would appear larger. This is demonstrated in the 2 diagrams below. In Fig. 1 there is a cross-sectional representation of the microkeratome showing the electron beam in broken lines. The plane of the working surface is along the line AEP. The working surface of the head is shown at A-E. The tip of the blade is T. The area of the slit is adjacent to the letter V. The electron beam is shown as parallel to the working surface and hitting point P on the side of the blade. Fig. 2 shows the head rotated through an angleθ. The electron beam remains vertical. It then hits point P1. It is quite simple trigonometry to compensate for this. That is described on page 3 of Dr Lau's report. In simple terms, the gap which is measured by the electron beam has been marked d*. The cutting head gap is the distance marked d. (i.e. the distance from the tip of the blade to the plane of the working surface namely a point marked X.) d* is the same as the sum of 2 measurements namely the distance from T to a line passing vertically through X plus the distance from X to the line representing the electron beam. In order to calculate d, however, it is necessary to take the measurement from the leading edge of the slit in the plane of the working surface to the point marked X. That has been called the b-value. Once one has the value of b and the value of d*, the value of d can be calculated.

25. Dr Lim admitted that he did not take this matter into consideration when he did his calculation. However, the day before he gave evidence he said that he took the measurement of b and found it to be 110 microns. On page 3 of Dr Lau's report, it is stated that "Typical value of the b-value has been found from the head supplied by the Company through optical microscopy." Below that he puts the measurement of the b-value at 180 plus or minus 30 microns. From that it is evident that Dr Lau must have made his own measurements but made them on another microkeratome and not that in suit. Hence, for the purposes of these proceedings his measurement is clearly of little relevance, since it is not suggested that all microkeratomes produced by the manufacturer were defective, only that in suit.

A diagram is put in here

26. Be that as it may, as demonstrated by Mr Yeung on behalf of the plaintiff in his skeleton argument, given the formula which has to be used for calculating the gap, the difference in the ultimate figure is remarkably low because the figure for b has to be multiplied by the tangent ofθ, i.e. the angle through which the microkeratome is rotated when it is mounted in the electron microscope. On the basis of the plaintiff's case that was 2.8°. The tangent of 2.8°is 0.0489. Hence, a difference of, for example, 30 microns in the value for b would thus result in a difference of only 1.5 microns in the figure arrived at for d.

27. In the result, therefore, the defendant's point in relation to the correction of the value of the gap because of the rotation of the microkeratome in the electron microscope is academically correct and interesting but, as referred to by the judge at page 12 of the judgment, only serves to reduce Dr Lim's original figure from 190 microns to 185. That is still well outside specification.

(2) The angle of rotation

28. The major point taken on the appeal and also in Dr Lau's review relates to the possible discrepancy in the angle of rotation of the microkeratome in the electron microscope.

29. In Dr Lim's report, it is stated that a 5°allowance was made for possible errors arising from the "alignment of the gap." In his oral evidence, Dr Lim explained that 5°was a typographical error for .5° and that the 0.5°allowance was in fact made for the possibility of an uneven or undulating surface. In his oral evidence, he said that no allowance was made for the misalignment as a result the rotation of the microkeratome. This would give a maximum error of 0.1%. He went on to say that, taking into account the resolution power of the human eye on the screen, he believed that the maximum error incurred in the measurement was in a range of 1.5 microns.

30. The defendant seeks to found her case first on the basis of referring to a "5°uncertainty due to misalignment quoted in the report". That, as explained by Dr Lim, was a typographical error. It should have been 0.5°. However, Dr Lau goes further and tries to justify a further variation of 5°. He points to the difficulty of clamping the microkeratome in the electron microscope and the further difficulties encountered in removing and replacing heads. He says quite blandly at page 5 of his review "Unfortunately, no attempt has been made to align surface AB (that is the plane of the working surface) when a head is replaced and the same 2.8°inclination has been assumed for all calculation. If we assume another modest 5°misalignment to account for clamping and the variation due to the external features between the nuts, extra errors must be added to the measurement for the last three heads." On this basis Dr Lau added a further 5°variation to what he wrongly assumed was Dr Lim's 5°variation and only by that means was able to adjust Dr Lim's measurements to come within what Dr Lau himself had said had been the manufacturer's specifications.

31. Given the fact that Dr Lau had neither been present when Dr Lim had made his measurements, had not asked for a repeat of the measurement to be taken by Dr Lim in his presence, had not asked to inspect and measure the microkeratome in suit and had not even measured the cutting head gap of the microkeratome which he had obtained from the manufacturer, Dr Lau's comments can only be regarded as speculation.

32. Dr Lim was cross-examined about the angle and he was firm that the angle of tilt was 2.8°. At page 15 of the transcript his answer could not have been clearer. At page 25 of the transcript he made clear that his measurements were based on the same clamping angle, namely, 2.8°.

33. It is fundamental that if a criticism is to be made of the manner in which an experiment, in this case a measurement, has been carried out there must be a sound basis for that. It is for this reason that when parties carry out experiments the court invariably orders the opposing party be given access to view that experiment. If the experiment has already been carried out and the opposing party considers there are grounds to challenge the manner in which the experiment has been conducted a request to inspect a rerun of the experiment should be made.

34. In this case, as already noted above, the defendant was given an opportunity to be present at the measurements. Despite the fact that the defendant's engineer was also present, nobody who was present when Dr Lim made this measurement has come forward to say that the setting was wrong. Neither was any request made to view a repeat of Dr Lim carrying out his measurements.

35. In the absence of sight of Dr Lim carrying out his experiment the defendant is unable to point to any measurements which have been taken which would throw doubt on the accuracy of the way in which Dr Lim set up the microkeratome. Specifically an offer was made to provide the defendant with Dr Lim's microkeratome but that was not taken up. Nor even, as has also been noted above, did Dr Lau give any evidence as to any measurement which he made of the microkeratome from the manufacturer which had been provided to him.

36. In my view, the judge was wholly justified in quite evidently dismissing the defendant's arguments in this regard. As Dr Lim pointed out, unless it could be said that there was an error of 10 degrees in the angle of tilt which he had taken it was clear that microkeratome in suit was outside the specifications. There was, in my view, no basis for rejecting Dr Lim's clear evidence as to the angle which he took. He was unshaken in cross-examination as to this and for the reasons which I have already given the defendant's case was no more than speculation.

37. Finally, it might be mentioned that in the defendant's written submissions in the court below this point was only marginally touched on and not made the focus of the thrust of their case.

(3) Variations across the width

38. Criticism has been made that Dr Lim's calculations are based upon only one point of measurement. Two points can be made in respect of this. In the first place, even if the gap were only too wide in one part, it would be sufficient to show that it was out of tolerance. It can be no answer that, in an instrument designed to take a microscopic slice from a cornea, only part of that slice would be too deep. In practical terms, such a suggestion would hardly become the purveyor of such instruments. In the second place, as is pointed out by Mr Yeung, Dr Lim said in evidence that the results of the electron microscope showed that at least over the section shown in the attachments to Dr Lim's report the lines denoting the surface of the tip and the surface of the body of the microkeratome were flat.

39. The other criticisms which were made of Dr Lim's measurements were no more than, again, suppositions, unsupported by measurements or findings on his part. They would in any event lead to insignificant variations in the result of the measurement. Specifically it has been suggested that there were uneven surfaces which would have given different readings at different points. Although as mentioned above, it would suffice for the plaintiff's case to show that one measurement was seriously out of specification, as was pointed out by Dr Lim and Mr Yeung in argument, the printouts from the electron microscope reading which have been appended to Dr Lim's report show straight lines. There is, therefore, no indication that there is any significant unevenness in the surface. There is no reason to doubt Dr Lim's assertion that he considered that the surface was not uneven.

Conclusion

40. It is to be noted that there was no challenge on this appeal that if the gap were indeed outside the accepted tolerances for 150 micron microkeratome, then the finding that the microkeratome in suit did not correspond with the description in the contract, was not of merchantable quality and not fit for the purpose for which it was purchased should stand.

Hon Le Pichon JA:

41. I agree.

Hon Sakhrani J:

42. I agree.