CHAN CHEUNG MING JACKY v. SIU SIN MAN (formerly known as SIU KIT LING)

CACV 152/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 152 OF 2014

(ON APPEAL FROM FCMP NO. 67 OF 2010)

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REASONS FOR JUDGMENT

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Hon Lam VP (giving the Reasons for Judgment of the Court):

1. This is an appeal against the refusal of leave to issue a subpoena by Deputy Judge Own [“the Judge”] on 12 June 2014. The application for leave was made by the applicant in FCMP 67 of 2010. The proceedings are brought under the Guardianship of Minors Ordinance [“GMO”] concerning the welfare of a child (who is 5½ years old) of the parties. The applicant is the father of the child whilst the respondent is her mother. The trial of the proceedings started on 12 June 2014 and it is still ongoing, having been adjourned part-heard. The main issue at the trial is the maintenance for the child under Section 10(2) of the Ordinance.

2. As it is provided under Section 10(2), the court may order the specified provisions for the maintenance of a child “as the court thinks reasonable having regard to the means of [the paying parent]”.  In the present case, the respondent is seeking such provisions from the applicant.  Thus, the court must have regard to the means of the applicant in determining what is reasonable.

3. One of the important issues regarding the means of the applicant is whether a sum of $32 million (once kept in his bank account, now transferred to his mother’s bank account) had been held by him on trust for his mother.  Due to her old age and infirmities, the mother was certified by a doctor as not being fit to testify in person.  The applicant wishes to call a bank officer (who had been told about the trust arrangement before there was any dispute between the parties) to give evidence on the same in order to support his case of trust.

4. Though the respondent does not positively challenge the case of trust, she puts the applicant to strict proof as to its existence.

5. The mother of the applicant had made an affirmation about the trust arrangement.  On 14 July 2014, the Judge granted leave to the applicant to file the affirmation and ordered that she needs not attend the trial for cross-examination.  As the Judge observed in his judgment of 14 July, notwithstanding the admission of the evidence of the mother the weight to be attached to it without any cross-examination would still be a matter for submissions at the trial.

6. Thus, it cannot be said at this stage that the mother’s evidence is determinative on the trust issue.

7. Actually, at the time when the applicant applied for leave to issue the subpoena in question, there had not been any application before the court for the filing of the mother’s evidence.  That application came later.

8. Though the trial had originally been fixed for one day only, it had taken up much more time.  After hearing some evidence on 12 June, it was adjourned part-heard to 11 July and then to 27 and 28 August.  It is expected that the cross-examination of the respondent would be completed by 27 August and the trial would then continue with the cross-examination of the applicant.  We were told at the hearing that parties have to attend a school interview with the child on 28 August and that date would have to be vacated.  The Family Court is seeking dates in December 2014 or January 2015 to complete the trial.

9. The Judge was critical of the lateness of the application for leave to issue the subpoena (it was made on 11 June, one day before the trial started, and refused on paper by the Judge without stating any reason on the same date[1]).  According to the transcript of the hearing of 12 June, he gave four reasons for refusing leave:

(a) The importance of giving priority to children matter (as compared with ancillary relief between divorced parties) and, since CJR, eleventh-hour application would unlikely be considered unless in very exceptional circumstances;

(b) As the bank officer did not give a witness statement, there is no certainty that she could give evidence about what she was told many years ago.  Even if she could give such evidence, it would only be evidence of what she had been told.  The evidence is not prima facie cogent;

(c) There was no application for leave to file the mother’s affirmation; and

(d) The applicant was represented by reputable and experienced lawyers who had ample time to seek directions from the court on the evidence on trust in good time.  But they had not done so.   

10. The Judge also refused leave to appeal on 12 June.

11. The applicant applied to the Court of Appeal for leave to appeal.  Leave was granted on 23 July 2014 with directions to facilitate the appeal to be heard before the trial resumed on 27 August 2014.

12. Before us, Mr Li (counsel for the respondent) again took a neutral stance though he referred us to some cases on the principles and considerations applicable to an application for leave to issue subpoena after the civil justice reform.  He also referred to the absence of explanation by the respondent as to the lateness of the application and the applicable principle in an appeal against a case management decision as set out in Wong Kar Gee Mimi v Severn Villa Ltd [2012] 1 HKLRD 887 at para 31.

13. Mr Chan focused his submissions on the Judge’s exercise of discretion being vitiated by taking irrelevant consideration into account and not taking relevant consideration into account.

The relevant principles

14. The relevant rules for the issue of subpoena in the Family Court are Order 38 Rules 14 to18 of the Rules of the District Court.  The requirement for leave of the court stems from Rule 14(5) which provides as follows:

“Before a writ of subpoena is issued a praecipe for the issue of the writ must be filed in the Registry together with a note from a judge or the master authorizing the issue of such writ …” (our emphasis)

15. Since the proceedings are held in chambers, Order 32 Rule 10 containing a similar requirement is also relevant.

16. These requirements were examined by the Court of Appeal in Li Man York Evelyn v Li Wai Tat Walton [1997] 3 HKC 532.  In that case, Mortimer VP identified at p.534H the role of the judge or master in giving the requisite authorization as follows:

“But it is only a filter process. He will ask himself such questions as: are the proceedings of such a nature as one would expect evidence to be called? Is this a cause or matter being heard in chambers in which oral evidence is appropriate? Is the application for a subpoena an abuse of process? Provided the answers to such questions are in favour of the applicant, he should give his note and grant leave. That filter process is one in which the judge should not and cannot take it upon himself to decide issues relating to the relevance of any evidence that may be given and its usefulness.”

17. On the facts of the case, the first instance judge had gone beyond that and went into the merits of the evidence.  That was held to be a wrong approach.  At p.535A, Mortimer VP said:

“What he should have done was to approach the matter as I have indicated, considering his role as simply to provide a preliminary filter to ensure that these applications are not an abuse of process, and that they relate to a cause or matter in which oral evidence is appropriate.”

18. It should also be noted that under Order 38 Rule 17, a writ of subpoena must be served within 12 weeks after the date of its issue and not less than 4 days before the day on which attendance before the court is required.  Thus, it is possible to issue and serve a writ of subpoena soon after a trial date has been fixed.

19. Since 1997, the role of the court in case management has assumed a greater prominence in our administration of civil justice.  Even before the CJR, in L v L HCMC 1 of 2003, 20 April 2005, the court considered the application for leave to issue subpoena from a case management angle when such application was made after the evidence had been closed.  In that case, the court conducted a balancing exercise before allowing the case to be re-opened and granted leave for the issue of subpoena.  Various factors were considered: the potential disruption to the trial, the prejudice that the other party may suffer, the explanation for the late application, the significance of the new evidence, the overall justice of the matter.  

20. Under CJR, Orders 1A and 1B were added to our rules (both the Rules of the High Court as well as the Rules of the District Court).  Order 1A rule 2 provides that whenever the court exercises its power under the rules (and that would include the power to grant leave to issue a subpoena), it must seek to give effect to the underlying objectives set out in rule 1.  Order 1A Rule 2(2) is also important:

“In giving effect to the underlying objectives of these Rules, the Court shall always recognize that the primary aim in exercising the powers of the Court is to secure the just resolution of disputes in accordance with the substantive rights of the parties.”

21. Since the introduction of the CJR, the power to grant leave for the issue of subpoena in a case management context has been considered in Big Island Construction (HK) Ltd v Wu Yi Development Co Ltd HCA 1957 of 2005, 29 Jan 2010 (Poon J); upheld on appeal in FBC Construction Co Ltd v Lee Ben [2014] 2 HKLRD 1054 at para 223 and Waddington Ltd v Chan Chun Hoo Thomas CACV 136 of 2013, 19 July 2013.  Those were cases decided in the context of ordinary civil trials and the courts emphasised that the proper stage to deal with questions relating to the issue of subpoena for witnesses is at the case management conference.

22. By now, it should be recognised that in the exercise of the power to grant leave to issue a subpoena, at least in respect of late applications, in addition to the matters Mortimer VP alluded to in Li Man York Evelyn v Li Wai Tat Walton, supra., the court must also bear in mind its case management duty.

23. We understand that in family proceedings, including those brought under the GMO, there is as yet no formal rule providing for the holding of case management conference.  There is also no rule in such proceedings for the filing of a statement of nature of evidence intended to be adduced (for a witness who is not willing to give a witness statement and may have to be subpoenaed to give evidence) as provided under Order 38 Rule 2A(5) of the Rules of the High Court.  But the absence of such rules does not mean that judges in the Family Court do not need to be concerned with case management.  Orders 1A and 1B are equally applicable to family proceedings, see Practice Direction 15.12 para 8.  Further, paragraph 16 of PD 15.12 provides:

“In order to provide better case management to Matrimonial Proceedings and Family Proceedings, the Court may, where applicable, apply some of the concepts and provisions contained in Order 25 of the RHC / RDC and any Practice Direction issued in relation to Case Management in Matrimonial Proceedings / Family Proceedings, with necessary modifications.”

24. Thus, if necessary, judges in the Family Court can resort to the powers and provisions in Order 25 and PD 5.2 to fulfil their case management function prescribed by Order 1A Rule 4 as buttressed by the powers set out in Order 1B.

25. Subject to two caveats, we are in broad agreement with the observations of Poon J in Big Island Construction (HK) Ltd v Wu Yi Development Co Ltd HCA 1957 of 2005, 29 Jan 2010 paras 2 to 6 on the practice regarding application for leave to issue subpoena in the context of general civil litigation.  As we said above, judges and practitioners in Family Court should adopt a similar approach, with necessary modifications having regard to the procedures in the family proceedings.

26. The first caveat we have is about the scope in which the other party to the litigation may apply for the setting aside of a subpoena.  We do not intend to delve into the topic at length in this judgment (as it is not necessary to do so in light of the neutral stance of Mr Li).  We would only invite attention to the following comments of Phipson on Evidence 18^th Edn para 8-21 and para 4 of the judgment of Poon J should be read in that light:

“It is not necessarily the case that the other party to the litigation has a right to apply to set aside a witness summons, although the authorities indicate that in specific instances he may object. It has been recognised that an opposing party in litigation may have a limited interest in setting aside a witness summons or subpoena, namely an interest that the hearing should not be allowed to expand beyond the trial of the issues raised by the pleadings and matters necessarily ancillary thereto. If a general right were recognised in an opposing party to raise objections to the witness summons, this may encourage ancillary litigation. An opposing party may object to the production and admissibility of the documents when the witness summons is complied with in court.”

27. The second caveat we have is about the comment of Poon J at para 6 of his judgment on the possibility of an application being dismissed on the basis of delay alone. Whilst we would not rule out this possibility entirely, one must always bear in mind Order 1A Rule 2(2).  As with the exercise of other kinds of discretion, the exercise of case management power must be with reference to the facts and circumstances of the case before the court.  There is no place for the application of a mechanical rule that the court will invariably refuse an application simply because a party is guilty of serious delay without any good explanation.  The court must conduct an overall balancing exercise.

28. Further, we need to emphasise this: case management by the court does not mean that the judge will dictate the evidence to be adduced.  Even in the context of family proceedings, our system is still primarily operated on an adversarial basis.  In general, subject to the questions of admissibility and relevance, each party in the proceedings is at liberty to call whatever evidence he or she considers necessary provided that procedural requirements are complied with.  Thus, in respect of an application for leave to issue a subpoena made in good time, the approach of Mortimer V-P should prevail.  However, in respect of a late application, the court will have to examine all the relevant circumstances and the significance of the intended evidence to be adduced is one factor to be taken into account. 

Application to the present case

29. In the present case, though there is no witness statement from the bank officer, the gist of the intended evidence was set out in a letter dated 11 June 2014 from the solicitors for the applicant to the clerk of the Judge.  That should be sufficient to serve the same purpose as a statement under Order 38 Rule 2A(5). We are satisfied that the proposed evidence from the bank officer is relevant. As the Judge recognised in his judgment of 14 July 2014, the weight to be attached to the affirmation of the mother is subject to submissions to be made at the trial.  At this stage, even though the intended evidence of the bank officer is based on what she had been told, we do not think one can say it adds nothing to the evidence of the applicant and his mother when the relevant conversations took place prior to any disputes having arisen between the parties.  We accept that in the present instance the test laid down in Li Man York Evelyn v Li Wai Tat Walton, supra is satisfied.

30. But that is not the end of the matter.  Beyond dispute, the application by the applicant was made at a very late stage and Mr Chan has not put before us explanation which could exonerate the applicant for the delay.  The trial date was fixed in early 2014 and the application was only made on 11 June 2014, one day before the trial commenced.  Before us, in addition to what had been set out at para 27 of the Affirmation of the applicant filed in HCMP 1572 of 2014, Mr Chan supplemented by telling us that initially it was expected that the mother of the applicant would give evidence on the trust.  It was only after the doctor certified on 26 April that she would not be fit to give evidence that the bank officer was contacted.  At the beginning, the bank officer was quite co-operative and it was expected that she would give evidence voluntarily.  It was only a couple of days before the trial that she indicated that the policy of the bank prohibits that and a subpoena would be necessary.

31. We note that this account of development leading to the late application for subpoena was not placed before the Judge.  Though we appreciated that in a usual application for leave to issue a subpoena such explanation is not necessary, we think the situation is quite different in respect of a late application.  As explained above, case management considerations come into play and a party making a late application should furnish the court with the relevant information accounting for the lateness in the application.  This is particularly so when the Judge had refused the application on paper on 11 June and the applicant asked the Judge to reconsider the matter on 12 June.

32. Further, even taking account of the explanation offered by Mr Chan, we are of the view that it could not exonerate the applicant in respect of the delay.  The issue of trust had been a live issue since the filing of Form E.  Actually, it could be said that the applicant should have been aware of the issue even before that since it was his own case that the $32 million had been transferred out of his account. Thus, he should have considered with his lawyers on the evidence supporting the case of the trust soon after the respondent issued her summons, at any rate when he prepared his Form E.  The health condition of his mother was not something arising out of the blue and the possibility of her not being able to testify in court should be something on the radar even before the certificate of the doctor in April 2014.

33. On Mr Chan’s own submission, the applicant’s team envisaged the calling of the bank officer in late April 2014.  Yet no step has been taken to notify the court or the other side of such possibility until the question of subpoena was raised on 12 June.

34. As we have observed in the course of the hearing, proper case management requires co-operation from the parties and their lawyers.  Thus, Order 1A Rule 3 requires them to assist the court in the furtherance of the underlying objectives in Order 1A Rule 1. Any failure to observe such a duty may be taken into account in respect of costs, see Order 62 rule 5.

35. The court depends on the parties providing it with timely and relevant information in order to exercise its case management power in a proper manner.  Thus, even though the court had not given any directions for the filing of affirmations or witness statements of third party witnesses in November 2013, the duty to assist under Order 1A rule 3 requires a party and his legal representatives to supply the court with all the relevant information.  As explained above, notwithstanding the lack of provision for case management conference in family proceedings, the spirit with regard to the duty to give relevant information under Order 25 Rule 6 is equally applicable.

36. On the facts of the present case, we are of the view that the applicant’s solicitors should have taken steps to alert the court and the respondent that there is a possibility of another witness being called at the trial and seek directions about the evidence of the bank officer.  Leaving that to a late stage and doing so by way of seeking leave for a subpoena to be issued on 11 June are not enough.   

37. This court has repeatedly stated that we will not interfere with case management decision unless the lower court has gone clearly wrong and made orders which will clearly involve an injustice or an inability for the trial court to carry out its task.  In these circumstances, is there any ground for this court to interfere with the Judge’s refusal of leave by way of his exercise of case management power?

38. With respect to the Judge, we are of the view that his refusal of leave is clearly wrong in the circumstances of this case.  Of the four reasons he gave, the first and fourth reasons appeared to be the principal reasons and they boil down to the question of delay.  Whilst he was entitled to be critical of the delay on the part of the applicant in making this application, he was incorrect in effectively making the unexplained delay as determinative on the outcome without considering other relevant factors.  With respect, it is not helpful to start with a premise (as the Judge did) that “eleventh hour application is unlikely to be considered by the court unless in very exceptional circumstances”.  Such a premise has a tendency of clouding the court’s judgment in respect of other relevant considerations.

39. The Judge was of the view that the evidence of the bank officer was not prima facie cogent.  Since the bank officer had declined to give a witness statement, we agree with the Judge that at this stage it is uncertain whether the officer could recall what she had been told years ago.  However, this is inherent in respect of the evidence of many witnesses who refused to give full co-operation to the party intending to call him or her.  The court should not pre-empt an application to have such witnesses to be called on the basis of such uncertainty.  Putting that aside, taking what is set out in the letter of 11 June 2014 on its face value (as the court must at this stage), if the bank officer could testify about what she was told about the true ownership of the fund in question when there was no reason for the applicant or his mother to lie about it, such evidence could be regarded as prima facie cogent.

40. The omission in terms of the filing of the mother’s affirmation was due to the disagreement between the parties on the condition under which the affirmation could be admissible. The Judge was aware of such disagreement.  In such circumstances, it should not have been relevant for his decision.  The disagreement was subsequently resolved by the Judge in his judgment of 14 July 2014 in favour of the applicant.

41. More significantly, the Judge failed to take account of the fact that in any event the trial could not have finished on 12 June.  Though the trial had only been fixed for one day, counsel seemed to be in agreement that it could not be completed in one day (though counsel for the respondent had expressed a hope that evidence could be completed within one day).  Based on the indication given in the letter of 11 June 2014 as to the scope of the intended evidence, it should not take very long to hear this extra witness.  Thus, the grant of leave to issue the subpoena would not have the effect of disrupting the trial or unduly prolong the same. As it turned out, the trial is still adjourned part heard and it is due to be resumed on 27 August.  It seems unlikely that the trial would be completed in August.

42. Not surprisingly, Mr Li did not suggest that the issue of the subpoena would cause any prejudice to his client.

43. In our judgment, the Judge’s exercise of discretion was flawed and this court should intervene. Assessing the position afresh, we are of the view that in this instance the overall justice of the matter points to leave being granted for the subpoena to be issued.

44. For these reasons, we allowed the appeal, set aside the Judge’s order and granted leave for the subpoena to be issued.

45. As for costs, we take the view that but for the delay on the part of the applicant in making the application, the court would have readily granted leave.  In the circumstances, substantial costs have been incurred owing to such delay.  We shall therefore order the applicant to bear the costs of the respondent at the court below in respect of the renewed application for leave and the application for leave to appeal, such costs is to be taxed if not agreed.  In respect of the costs of HCMP 1572 of 2014 and the costs of the appeal, we shall order each party to pay his or her own costs.  The respondent’s own costs are to be taxed according to Legal Aid Regulations.  

46. Before we end this judgment, we wish to express some concerns about case management in family proceedings.  We understand that a review of the family procedure rules is ongoing.  We also understand that there is a heavy caseload in the Family Court.  However, even before the implementation of any further changes as a result of the review, as we have tried to explain above, under the existing framework active case management is equally applicable to family proceedings as in other civil proceedings.  And we must stress again, at the risk of repetition, parties and their legal representatives owe a positive duty to assist the court in the proper carrying out of its case management function. It is high time that those involved in family proceedings should take a real look at paragraph 16 of PD 15.12.

47. It is unsatisfactory that open proposals setting out the parties’ respective positions were only exchanged a few days before trial.  It is also unsatisfactory that the trial of this matter has to take place in a piecemeal manner, with the evidence being heard on four different dates with substantial time gaps in between.  With the benefit of hindsight, it would have been much better if the parties had put their heads together to come up with a realistic timetable for trial before fixing dates for trial.  Mr Chan told us that those representing the applicant had tried to re-schedule the trial (fixed for 1 day pursuant to a direction given even before the Form Es had been filed) to a date with 3 days reserved.  That request had been rejected by the respondent and the court.  But one can hardly blame the Judge.  From the correspondence placed before us, apart from stating that counsel intended to cross-examine the respondent, limited information was presented to the court to explain why 3 days are necessary. The Judge was not even told about what issues were in dispute and how much time would be required for the evidence of each witness.  It is hoped that lessons are being learnt and a more effective case management regime (involving active co-operation from the parties and their legal representatives) will be in place to deal with all family proceedings.