TAISHIN INTERNATIONAL BANK CO., LTD v. QFI LTD

HCA 194/2016

[2020] HKCFI 938

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 194 OF 2016

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DECISION

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1.  The controversy to be resolved in these proceedings is a commercial dispute between the plaintiff (“P”) and the defendant (“D”) concerning various FX transactions. Each side has only one factual witness, ie Mr Benson Ko (“Ko”) who will give evidence for P, and Ms Sophie Huang (“Huang”) who will give evidence for D. The trial has been scheduled to commence on 15 June 2020, with 7 days reserved.

2.  By a consent summons dated 11 March 2020, the parties jointly sought directions concerning the trial. After considering the papers, on 16 March 2020, I gave directions concerning the preparation of the trial (“the PTR Order”) and vacated the pre-trial review fixed on 24 March 2020 (originally scheduled on 20 February 2020, but was adjourned to 24 March 2020 due to the General Adjourned Period (“GAP”)).

3.  On 18 May 2020, D filed a summons (“the summons”) seeking some directions concerning the trial.  Save and except one matter, the directions sought by D are not controversial.  The matter which is vigorously opposed by P is D’s application for leave to allow Huang to give evidence in the trial by videoconferencing, and alternatively, for adjourning the trial to a period to be re-fixed (“the application”).

4.  Mr Bernard Man SC (leading Mr Thomas Wong) for D and Mr Alan Leong SC (leading Mr Alfred Cheng) for P have set out the principles concerning giving evidence through videoconference facilities (“VCF”) in detail in their respective written submissions.  See Re Chow Kam Fai ex p Rambas Marketing Co LLC [2004] 2 HKLRD 260, Sun Legend Investments Ktd v Ho Yuk Wah [2008] 4 HKLRD 239, Mahajan v HCL Technologies (Hong Kong) Ltd [2010] 5 HKLRD 119, Daimler AG v Leiduck (No 2) [2013] 2 HKLRD 822.  I have borne those principles in mind while I am considering the application. 

5.  The grounds put forward by D in support of the application are as follows:

(1)     Huang is residing in Shanghai.  The application, necessitated by the continued difficulties presented by the COVID-19 pandemic, can only be made at a time reasonably close to the trial.  The summons was therefore issued around one month before the commencement of the trial. Given the unpredictability of the pandemic and the quarantine policies, it is only at this time that the parties and the court are in a position to reasonably assess the severity of the risks and the difficulties at the time of the trial.

(2)     Huang will suffer considerable disruptions to her work and family commitments if she is to attend the trial in person. Since she is living in Shanghai, if she travels to Hong Kong to give evidence in the coming trial, she will be subject to compulsory quarantine for a total period of 28 days, ie 14 days upon arriving in Hong Kong plus 14 days upon returning to Shanghai.

(3)     There are significant health risks for Huang to travel between Shanghai and Hong Kong as both places continue to report new cases of COVID-19.  Further, the risk of transmission in an airplane is also a justified concern.

(4)     Since the pandemic is by no means under control, it is possible that Shanghai and/or Hong Kong will tighten their immigration policies in the near future, making Huang’s visit to Hong Kong (or return to Shanghai) even more difficult or impossible.

(5)     P will suffer no or little prejudice if the order for VCF is granted.  While there may be some disadvantage to P in cross-examining Huang through the medium of a plasma screen and speakers, and to the judge in assessing Huang’s credibility, such disadvantages are unlikely to be serious, given the technologies nowadays are very advanced, and cross-examination by video-link would be as naturally and freely as when a witness is in the court room.

6.  The grounds of objection raised by P are as follows:

(1)     There is a substantial delay in taking out the application with no reasonable explanation.  There were ample opportunities for D to make an application for VCF evidence at an earlier time, but D did not do so. 

(a)     Compulsory quarantine for visitors coming from Mainland China was introduced by the HKSAR Government on 8 February 2020, and has been in effect to date.  Since then, D must be taken to be fully aware of the need for Huang to go through compulsory quarantine, if she is to come to Hong Kong from Shanghai to give evidence at the forthcoming trial.  Alternatively, D must be well aware of the need to make an application for video link evidence as early as 8 February 2020.

(b)     Upon the vacation of the original pre-trial review scheduled on 20 February 2020 by reason of the GAP, the parties had discussion for the paper disposal of the pre-trial review.  During the correspondence, D could well have, but it never raised the need to apply for VCF evidence for Huang.  In the consent summons dated 12 March 2020, D did not raise any need for VCF evidence.

(c)     As per the PTR Order made by this court on 16 March 2020, witnesses have to attend the trial and be subject to cross-examination. It must be obvious to D that Huang would not be able to comply with those directions, and an application had to be made forthwith to permit her to be cross examined through VCF.  But there was radar silence on D’s part for 2 whole months.

(d)     As a result, D must be bound by its inaction.  No reasonable explanation has been put forward by D to explain the inordinate delay.

(2)     Huang may have to undergo quarantine for 28 days if she comes to Hong Kong in the coming trial.  However, the inconvenience itself cannot be a sufficient factor justifying the VCF evidence application.  The trial was set down in the fixture list on 21 November 2018.  The quarantine policy in Hong Kong has been in place since 8 February 2020.  Huang in fact has sufficient time to arrange her family and business engagements to enable her to come to Hong Kong to give evidence.

(3)     This case is a contest of credibility between Ko and Huang.  If Ko has to give evidence in the courtroom while Huang can give evidence through VCF, there would be an imbalance between the parties.

(4)     D’s concern of any health risk that Huang might face in travelling to Hong Kong should not be an overriding factor.  It is a risk all travellers take when overseas trips are necessary.  Further, the suggestion that there might be transmission risk in air travel is neither supported by evidence or general scientific knowledge.  There is also no evidence to show that Huang would not be exposed to the same risk by her busy work and family engagement in Shanghai.

(5)     The COVID-19 pandemic has been easing in Hong Kong and Shanghai.  D cannot be taken seriously on the concern of the alleged health risk.

7.  Having considered the parties’ respective submissions, I agree that there has been delay by D in taking out the application.  I also agree that the inconvenience which Huang may have to face if she comes to Hong Kong to give evidence, ie undergoing quarantine for 28 days, is not a sufficient factor justifying VCF evidence.

8.  However, notwithstanding the above, I am of the view that the application should still be allowed for the reasons below:

(1)     The outbreak of COVID-19 in the beginning of 2020 is an unexpected and unforeseeable event.

(2)     COVID-19 is something very new to the scientists.  Understandably, there is not much scientific finding concerning COVID-19 at the moment.  In this context, with respect, I am not attracted by P’s argument that there is no evidence in support of the transmission risk in air travel mentioned by D.  In my view, the transmission risk in air travel raised by D, to say the least, is a legitimate concern of a reasonable person nowadays.

(3)     Health should be the paramount concern of everyone.  Insofar as practicable, I have to make arrangements to ensure the safety of everyone participating in the trial.

(4)     If Huang is allowed to give evidence in Shanghai through VCF, no doubt P is entitled to have an observer at the place in which Huang would give evidence.  The role of the observe is to make sure that everything in that place is proper while Huang is giving evidence.  Given that Huang is prepared to give evidence in Shanghai, it should not be difficult for P to engage an agent in Shanghai (for example, a Mainland lawyer) to be the observer.

(5)     Huang should give evidence at a neutral place, ie a place with no connection with Huang, D, or D’s solicitors.  It would not be difficult to find such a place (for example, a room in a conference centre) in Shanghai.

(6)     I am fully aware that this is a one-on-one case. If Huang is allowed to give evidence through VCF, I am prepared to allow Ko to have the same privilege.  Likewise, Ko must give evidence at a neutral place, and D would be entitled to have an observer at that place while Ko is giving evidence.

(7)     At the moment, VCF would be available throughout the 6-day trial, save and except the morning on 16 June 2020, the morning on 17 June 2020, and the morning on 23 June 2020.  I am told that the estimated length of the cross-examination of Ko is 2 days and the estimated length of the cross-examination of Huang is 2 days.  That being the case, it is practicable to allow both Ko and Huang to give evidence through VCF during the trial.

(8)     The same privilege, ie giving oral evidence through VCF, is given to both Ko and Huang.  P and D would be treated equally. In the circumstances, although the application is a very late application, there would be no prejudice to P if the application is allowed.

(9)     Further, with the improvements in technology, nowadays it is not uncommon for the court to receive evidence through VCF.  See Leiduck (No 2), [26]; Polanski v Conde Nast Publications Ltd [2005] UKHL 10, [14], [43], [69], and [84].

9.  Ultimately, I have to exercise my case management powers to secure the just resolution of disputes in accordance with the substantive rights of the parties.  For the reasons set out in [8] above, I would allow the application.  However, at the same time, I would also allow Ko to give evidence through VCF in the trial.

10.  I have to say that I am just offering that Ko may give evidence through VCF.  If Ko wants to come to the court to give evidence, he is certainly entitled to do so.

11.  Since I have allowed the application, there would be no need for me to consider §5 of the summons.  As to the directions sought in §§6, 7 and 8 of the summons, these are non-controversial and I would allow the same.  For the avoidance of doubt, the real-time transcription service mentioned in §6 of the summons should be arranged by the parties by engaging a private service provider.  Further, since the witnesses are going to give evidence in Chinese and submissions would be in English, the real-time transcription service should be able to produce both Chinese and English real-time transcription.

12.  I would take this opportunity to give further directions concerning the trial:

(1)     For the purpose of having more time to hear the oral evidence in the trial, I direct that the parties shall prepare detailed written opening submissions, and the length of the oral opening submissions of each party should not be more than ½ hour.

(2)     The PTR Order and this order should be included in the trial bundles.  Further, any documents which would be referred to during the trial should also be included in the trial bundles.

13.  Costs of the summons be reserved.

14.  D shall prepare a draft order in accordance with this decision and, after seeking P’s comments on the same, submit the draft order to this court for approval on or before 29 May 2020.

15.  I thank counsel for the assistance rendered to the court.