NG KWOK PIU PHILIP AND OTHERS v. TO PUI KUI AND OTHERS

HCA 51/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 51 OF 2007

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D E C I S I O N

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Background

1.  On 22 September 2010, Au J made an order (“Consolidation Order”) for consolidation of HCA 51 of 2007 (“HCA 51”), HCA 523 of 2008 (“HCA 523”), HCA 1040 of 2009 (“HCA 1040”) and HCA 1041 of 2009 (“HCA 1041”), on the ground that these 4 actions (collectively “Actions”) involve the same parties, and there are common factual and legal issues to be determined.  There are in fact 2 other actions involving the same parties, HCA 524 of 2008 (“HCA 524”) and HCA 522 of 2008 (“HCA 522”).  Under the Consolidation Order, HCA 524 is to be heard after the consolidated hearing of the 4 Actions, and HCA 522 is to be heard after the consolidated hearing of the 4 Actions and after the hearing of HCA 524.  All these 6 actions were ordered to be heard by the same judge.

2.  The Actions involve a dispute amongst members of the Ng family and 3 companies owned and controlled by the family: Hultucktong Enterprises Limited (“HEL”), Hultucktong Company Limited (“HCL”) and Hultucktong Commercial & Industrial Company Limited (“HCIL”).  The issues raised in the Actions are the same, whether there was a restructuring of the family companies which allegedly took place in February and May 1997, and whether the father of the family (“Father”) had transferred his shares in the companies to the mother and the siblings in the manner alleged by one camp of the family.  The other camp of the family claim that there was no such restructuring and transfer, that meetings claimed by those alleging the restructuring to have taken place in fact never took place, and that documents relating to the meetings and transfers of shares were never signed by them.

3.  It is relevant to note that after the disputed restructuring and transfers and before the commencement of any of the proceedings, Father died in March 2002.

4.  HCA 522 and HCA 524 raise relatively discrete issues, involving at least one bank as a party to HCA 522, and despite the Consolidation Order, HCA 522 was in fact tried before the Actions and HCA 524.  Judgment had been reserved in HCA 522, and was delivered on 3 March 2014 (after the hearing before me in February 2014).

5.  The Actions and HCA 524 proceeded after the Consolidation Order.  On 18 May 2011, Au J made an order, on the parties’ consent application, for leave to adduce expert evidence on the authenticity of the signatures appearing on a total of 96 documents.  At the Case Management Conference of the Actions which took place before Reyes J as the designated trial judge on 22 June 2011, the learned judge issued further directions for trial of the Actions and HCA 524.  These directions revised the order for production of expert evidence, by limiting the handwriting expert evidence to be adduced for the Actions and HCA 524 to cover only the authenticity of the signatures of Father.  Reyes J took the view that dispute on the genuineness of signatures of live witnesses can be determined by cross-examination of the witnesses at trial.  Father of course had died, and accordingly expert evidence was allowed to cover Father’s signatures which appeared on some of the disputed documents.  The Actions and HCA 524 were directed to be set down for trial before Reyes J, with 5 days reserved, and the parties were directed to agree on the reference sample signatures of Father to be provided to the handwriting experts.

6.  The Actions and HCA 524 were set down on 2 September 2011 for trial to commence on 20 September 2012.

7.  On 6 September 2012, the parties made a joint application by consent on the agreed protocol for the exchange of expert reports on the genuineness of Father’s signatures on a total of 20 documents.  The consent application was approved by Deputy High Court Judge Seagroatt (as the designated trial judge of the Actions) on 17 September 2012, and made an order of the court.

8.  The parties’ experts compiled and exchanged their reports.  A joint report dated 5 October 2012 was later prepared for use at the trial.

9.  On the first day of the trial of the Actions, the learned trial judge observed that there would be “an indigestible load to be dealt with” if the Actions were to be tried together.  He proposed that a judgment on HCA 523 be given first.  There was disagreement between the parties before me as to whether the trial, which eventually spanned 17 days in October and November 2012, was intended to be the hearing, of the evidence at least, for the disposal of all the Actions.  Philip’s camp of the family, comprising Philip, Olympia, Tony/Kwok Tung and Stephanie/Oi Che, insist that the hearing was confined to the issues raised for determination in HCA 523 only.  Mother’s camp, which comprised Mother and Angela, and Andrew who acts in person, take the view that the evidence in relation to all the Actions was intended to be adduced and considered at the hearing in October.

10.  What cannot be disputed is that the trial did proceed before Deputy Judge Seagroatt, and at the trial, factual and expert evidence was adduced, with the factual witnesses being extensively cross-examined on all the events which took place in February and May 1997, and in relation to all the documents signed by the parties in respect of the alleged restructuring and transfers of shares, and the meetings allegedly held for the transactions.  It is also undisputed, as would appear from the transcripts of the hearing in October, that all the parties, and this includes Philip’s camp, acknowledged at the commencement of the hearing that there was much overlap between HCA 523 and the other Actions. This has in fact been the stance of Philip’s camp throughout the course of the conduct of the Actions, as evidenced by the application made by Philip’s camp for consolidation and the evidence filed by Philip’s camp in support of that application.  From the transcripts, it is also clear that the parties accepted on Day 1 of the trial that a decision or judgment in HCA 523 would have and was expected to have impact on the other Actions, to the extent that it was envisaged then that much would “fall away” as a result of a decision in HCA 523 (Day 1 transcript, pp 25 & 31).  Mother’s camp, at least, referred to HCA 523 as the “lead action”.  Issue estoppel (arising from the decision and findings made in HCA 523) was raised by Philip’s camp and considered.

11.  In any event, after hearing the evidence and submissions made on behalf of the parties, judgment was handed down by Deputy High Court Judge Seagroatt on 30 November 2012 (“Judgment”).  The Judgment is expressed to be confined to the issues in HCA 523.  His Lordship made this clear in his Judgment.  Notwithstanding that, and as to be expected, His Lordship made findings on the issues in HCA 523, and on the credibility of all the factual witnesses, in the light of their evidence on the documents produced at the trial in respect of all the transactions which allegedly took place and affected the companies, including the transfers of shares and the meetings which took place in 1997.

The application and the dispute

12.  Unfortunately, it transpires that nothing has “fallen away” as a result of the Judgment in HCA 523.  The other Actions are progressing to trial, and at the directions hearing before me on 12 February 2014, Philip’s camp applied again for leave to adduce expert evidence on 119 documents on which the signatures of Mother and the siblings appear (“Disputed Documents”). These include documents relating to the disputed transactions in 1997.

13.  As leading counsel for Mother’s camp highlighted, this application for leave to adduce expert evidence on the Disputed Documents is already the third application made by Philip’s camp for expert handwriting evidence to be adduced in respect of the documents containing the disputed signatures.  The first application led to the order of Au J made on 18 May 2011.  The scope of the expert evidence was confined by the designated trial judge on 22 June 2011, to cover only the authenticity of Father’s signatures on specific documents.  As Mr Aiken SC emphasized, it also led to a consent summons dated 6 September 2012 signed by all parties regarding the protocol for the production of handwriting expert opinion, on the basis of the scope of the order made by the designated trial judge on 22 June 2011.  The second application was made on Day 3 of the trial before Deputy Judge Seagroatt on 5 October 2012, when Philip’s camp applied to expand the scope of the expert evidence allowed by Reyes J on 22 June 2011, to cover signatures other than those of Father on the disputed documents.  That application was rejected by the judge.

14.  Even if, as leading counsel for Philip’s camp contends, res judicata and issue estoppel do not apply to interlocutory orders and directions made on expert evidence, I drew the parties’ attention to Order 38 rule 44 RHC.  This provides that any direction given under Order 38 on expert evidence may “on sufficient cause being shown be revoked or varied by a subsequent direction given at or before the trial of the cause or matter”.  It is thus incumbent on Philip’s camp, as applicant for a further or fresh order giving leave to produce expert evidence, to establish “sufficient cause” to vary the orders made by the designated trial judge on 22 June 2011 and 5 October 2012 (“Orders”).

Any sufficient cause shown?

15.  I am not satisfied that sufficient cause has been shown to vary or revoke the Orders.

16.  It is pertinent to bear in mind that from the time the Consolidation Order was made in September 2010, the Actions had been consolidated, ordered “to be tried one after the other, with HCA 523 as the lead action” by the same judge, and the Actions had been prepared, conducted and progressed on that basis.  Discovery was made and evidence was filed on that basis, without dispute by any party.  At the commencement of the trial when “the parameters” of the hearing were considered and discussed amongst counsel and the trial judge, and as the hearing progressed, it was on the basis that the witnesses would be heard and cross-examined (for HCA 523 at least, if not for all the Actions) and that submissions would be made on the evidence as it stood at the commencement of the trial of the consolidated Actions.

17.  None of the parties appealed against either of the Orders or any of the directions on expert evidence as made.

18.  There has been no change in the circumstances of the remaining Actions to justify a variation of the Orders.  When the trial commenced, it was to be a trial of the 4 Actions.  The allegations of forgery (which the expert evidence proposed is to meet) had been made when the pleadings were filed.  The disputes on the authenticity of the Disputed Documents and the genuineness of the transactions in question are not new.  The parties had come prepared to proceed with the trial of the 4 Actions, either together or one after the other, on the basis of the evidence filed for all the Actions, and in accordance with the orders and directions of the Court made since the Consolidation Order in September 2010.  Not having appealed against the Orders, the parties must be taken to have accepted that the absence of expert evidence on the signatures of the parties other than Father would not prejudice the trial of any of the Actions.  There could have been no injustice to Philip’s camp to have proceeded with the trial of the Actions in October 2012, as planned.

19.  I see no factor and no change now to suggest any prejudice to any party, if the remaining 3 Actions proceed to trial now without the expert evidence.  The pleadings now remain unchanged.  The factual witnesses for the remaining Actions are the same.  The only change is that the trial of the issues in the remaining 3 of the original 4 Actions has been postponed, as a result of the case management decision of the learned judge, and his view taken, supported by the parties, that a trial of the 4 Actions at the same time would be unmanageable and that it would be sensible and in the interests of the parties for HCA 523 to be decided and a judgment to be handed down on HCA 523 first.  Fortuitously, the parties now have more time before the trial of the remaining Actions takes place, and those acting for Philip’s camp treat this as an opportunity to prepare and produce further expert evidence which they say is relevant and would assist the trial judge’s determination of the issues in dispute in the remaining 3 Actions.

20.  Bearing in mind that the primary aim of the Court’s exercise of its powers under the rules of the Court is the just resolution of disputes in accordance with the parties’ substantive legal rights (O1A r2 RHC), the question posed by the application made on behalf of Philip’s camp is: would it be just and fair to allow them to produce their expert evidence when the trial of the 3 Actions resumes?

21.  Would it be fair to accede to the application made by Philip’s camp, when evidence for the Actions had been prepared and served pursuant to the Consolidation Order, when the trial judge designated to hear the Actions (together or one after the other) has heard the evidence of the witnesses in HCA 523, when the issues in HCA 523 and the other remaining Actions are interconnected and substantially overlap, and when the trial judge has delivered a Judgment which deals with the credibility of the witnesses (if not on all the issues in the Actions, then on the issues raised in HCA 523), in circumstances when the parties and their legal advisers have agreed at the commencement of the trial that the findings of the judge in HCA 523 would have impact on the same parties in the remaining Actions and the issues raised in the remaining Actions? In my view, it would not be fair or just to the other parties in the Actions, if Philip’s camp should be allowed to reopen the state of the evidence on the Disputed Documents, and be allowed to adduce fresh expert evidence.  I consider that it would be against the objectives of procedural economy, cost effectiveness and proportionality under the Civil Justice Reform, to revoke and vary the Orders now, in order to permit Philip’s camp to adduce fresh evidence on an important issue which has, from day one of the commencement of the Actions, been the focus of all parties’ attention, and at the very heart of the dispute as to the genuineness of the restructuring exercise and the transfers of shares which took place in 1997.  The main purpose of consolidation is to save time and costs.  The objective of the application for consolidation, the making of the Consolidation Order and the making of the Orders must conceivably and can only be aimed at saving the parties’ costs, simplifying and not duplicating procedure, avoiding the necessity for totally separate trials of the Actions, and the achievement of the most efficient and effective manner of trying the connected Actions which raise common issues of fact and law, and involve the calling of the same witnesses to give evidence on the same issues and transactions in dispute.  In my view, it would defeat all the orders made by the Court in the consolidated Actions, if the parties should be allowed at this stage to reopen the evidence, and duplicate procedure, if not causing it to be wasted.

22.  As the designated trial judge had indicated in June 2011, dispute on the genuineness of signatures of live witnesses can be determined by cross-examination of the witnesses at trial.  The witnesses are still available. They had been cross-examined, and may still be recalled for cross-examination if the necessity arises.  Expert evidence was allowed only for the disputed signatures of Father, who died, but Deputy Judge Seagroatt made it clear in the Judgment that he found the expert reports to be of very limited use to his determination of the issues in HCA 523.  Many of the documents considered by the experts were not original documents, and it was still unclear at the hearing before me in February 2014 whether original documents would be available for all the Disputed Documents. 

Conclusion and orders made

23.  In all, I am not satisfied that expert evidence on the Disputed Documents would be necessary for the determination of the issues in dispute in the remaining Actions, and I am not satisfied that there is sufficient cause to vary the Orders already made for the trial of the Actions.

24.  Accordingly, I dismiss the summons issued by Philip’s camp for leave to adduce expert evidence, with costs to be paid by them, with certificate for 2 Counsel.

25.  Philip’s camp and Mother’s camp have been able to agree on other directions for the trial of the Actions, and I am prepared to make the directions they propose, subject to one caveat.  For the easier management of the trial of the remaining 3 Actions when it resumes, I now direct the parties to agree on a timetable for the filing of ONE set of consolidated pleadings, to be served only for the purpose of setting out all the facts and issues already raised for determination in the remaining Actions.  This will facilitate the hearing of the remaining 3 Actions together.  I will give liberty to the parties to apply to submit a set of the proposed directions to incorporate the service of consolidated pleadings, and to reflect the estimate of the length of trial bearing in mind the service of consolidated pleadings.  It is hoped that the parties can sensibly agree and deal with these remaining matters on paper. 

26.  The parties are further directed to immediately fix early dates for the trial of the remaining Actions, to avoid further delay and disruption.