P.T. WEARWEL INTERNATIONAL v. COSMOPOLITAN MERCHANDISE (INTERNATIONAL) LTD.

1989 No. A4364

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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DECISION

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1. This is an Action in which the Plaintiff claims damages against the Defendant for breach of 2 Contracts made in March, 1987 as revised in May, 1987.

2. By Paragraph 3 of the Order dated the 29th September, 1993, Master Jones ordered that "the parties do mutually exchange signed witnesses' statements as to fact within 42 days".

3. The Plaintiff served the following on the Defendant:-

(a) Proof of Evidence of Shyam Lal Uttam dated the 30th November, 1993, and

(b) Proof of Evidence of Prem Buxani dated the 16th May, 1994.

4. The Defendant served the following on the Plaintiff:-

(c) Statement of John Yen dated the 3rd February, 1994, and

(d) Statement of Louis Pollicastri dated the 7th April, 1994.

5. The Action has been set down in the Fixture List for trial. The trial commenced on the 16th June, 1994. After his opening, Mr. Kumar Ramanathan, Counsel for the Plaintiff, called his first witness, Mr. Prem Buxani, to give evidence in chief at about 3:45 p.m. In his evidence in chief, the witness confirmed his signed statement (his "Proof of Evidence") and adopted its contents as evidence. The evidence in chief of the witness continued. When the witness was asked about a Letter of Credit to which no reference had been made in the Proof of Evidence, Mr. A.K. Houghton, Counsel for the Defendant objected. He relied on Order 38A R. 2A(2) and (5) (a) and Paragraph 38/2A/11 of The Supreme Court Practice, 1993, and suggested that the evidence of the witness be confined to matters, the substance of which was included in the Proof of Evidence served.

6. As it was almost 4:30 p.m., I said I would adjourn the hearing to 10:00 a.m. on Monday, the 20th June, 1994. Before I rose, I drew the attention of Counsel for both parties to the following passages in the Judgment of Keith J. in Ng Kam Chun, Stephen trading as Chun Mou Estate Agency Company v. Chan Wai Hing, Janet, H.C. Action No. A3036 of 1992, 9th February, 1994, unreported, at pp. 23 - 24:-

"THE WRITTEN STATEMENTS

This was a case in which the master at the Summons for Directions had ordered the exchange of witness statements under Ord. 38 r.2A(2) of the Rules of the Supreme Court. At the beginning of the trial and with the consent of the parties, I ordered the statements to stand as the witnesses' evidence-in-chief. However, I also gave leave to the parties to lead such evidence as they wished from the witnesses to supplement the contents of their statements.

When Mr. Ng came to give evidence, he was asked so many supplementary questions that he continued to give his oral evidence-in-chief for over 3 hours. That was because his witnesses statement had only set out the bare bones of his evidence. It had been drafted in such a way that it needed to be fleshed out considerably. I mention that because I am afraid that I have not yet tried a case in Hong Kong in which it has not been necessary to flesh out the witness statement by supplementary oral evidence given over a number of hours. The time has now arrived when it is necessary for someone to spell out to those who are responsible for drafting witness statements that they must get their act together. The witness statement should contain the whole of the witness' evidence in the detail in which the witness would have given it if his evidence has been elicited by oral questions at the trial. Anything less than that prevents the statements from serving the purposes which they are intended to achieve - saving time, eliminating any element of surprise in the witnesses' evidence, enabling the parties to know the full strength of the case they have to meet, and enabling counsel to prepare a crisp and effective cross-examination. I give notice to the profession that, unless there is a good explanation for a witness statement not properly covering the areas on which supplementary questions are sought to be asked, I shall be unlikely to give leave, pursuant to Ord. 38 r. 2A(5)(a), for evidence to be led from that witness on those topics."

7. Unfortunately, Counsel for the Plaintiff was prevented by illness from attending Court on the 20th June, 1994, and the hearing was adjourned to the 21st June, 1994.

8. At the resumed hearing on the 21st June, 1994, Mr. Ramanathan explained that the Plaintiff had initially intended to call some other person as a witness; that when it was realised that the other person would not be available as a witness, the Proof of Evidence of the witness was prepared in a rush. He told me that the 4 areas which he would like the witness to "elaborate on" were:-

(a) circumstances under which the Plaintiff signed the 2 Contracts and the 2 revised Contracts with the Defendant, rather than with the foreign company which the Defendant contended was the Defendant's principal;

(b) Plaintiff's inability to open the fabric L/C and the subsequent opening of the fabric L/C by the Defendant;

(c) The delay of the 2 shipments, 1 by air and 1 by sea; and

(d) The reason(s) why Category 350 was requested in lieu of Category 351.

9. Mr. Ramanathan contended that these matters were relevant and that I had a discretion, which he invited me to exercise in favour of the Plaintiff, so as to do justice to both parties; and that it would be a denial of justice if the Plaintiff were to be deprived of the opportunity to adduce relevant evidence which would assist the Plaintiff. He suggested that as the case was heavily documented, the Defendant would not be taken by surprise. In the alternative, he contended that the Defendant would not suffer any prejudice that could not be compensated by an appropriate order as to costs.

10. When the hearing resumed after lunch, it transpired that the witness had left for the air port to catch a 3:30 p.m. flight. There is room for misunderstanding and I do not intend to take the departure of the witness any further. But I should make it abundantly clear to both parties that in the absence of a good explanation which is accepted by the Court, the disappearance of a witness is at the peril of the party intending to call such witness.

11. It is a sad reflection on the profession and/or law reporting that the situation does not seem to have improved some 4 months since the Judgment of Keith J. in the Ng Kam Chun case, at least so far as I am know from my limited experience on the bench. I respectfully agree with everything which Keith J. said about witness statements.

12. Service of witness statements is ordered under O. 38 R. 2A(2) where the Court thinks fit "for the purpose of disposing fairly and expeditiously of the cause or matter and saving costs". Such purpose cannot be achieved if those responsible for the preparation of witness statements make no attempt to set out "the whole of the witness' evidence in the detail in which the witness would have given it if his evidence had been elicited by oral questions of the trial". A sketchy statement does not enable the other parties to know the full strength of the oral evidence (in contrast with documentary evidence disclosed on discovery) they have to meet. Time and costs are wasted in taking further evidence in chief, evidence which could and should have been disclosed in the witness statements.

13. The Proof of Evidence of the witness consists of 8 paragraphs, taking up 1 1/2 pages. It is completely silent on area (a) on which "elaboration" was sought, and contains sketchy references to the other 3 areas. It is no excuse to say that it was prepared in a rush. There is nothing to prevent the Plaintiff's Solicitors from serving a full Supplemental Statement in good time before the date fixed for trial, say within 10 days from date when the Proof of Evidence was served. The case may be heavily documented, but the Defendant is entitled to know thefull strength of the oral evidence as to facts of the Plaintiff.

14. In my judgment, I do not think the Plaintiff has offered any good explanation for the sloppy witness statement which the draftsman sees fit to style "Proof of Evidence".

15. Under O. 38 R. 2A(5)(a), the Plaintiff may not lead evidence from the witness the substance of which is not included in the Proof of Evidence, without consent of the Defendant which is not forthcoming, or leave of the Court.

16. In my judgment, leave is required before the Plaintiff can lead evidence to "elaborate" on the 4 areas. In the absence of any good explanation, I am reluctant to grant leave. However, the message of Keith J. may not have been (sufficiently) brought to the attention of the profession. In the exercise of my discretion, I will grant leave in this case to allow the Plaintiff to lead evidence on the 4 areas which Counsel for the Plaintiff told me about, but only on terms. Mr. Ramanathan conceded that I had jurisdiction and discretion to impose terms on any leave which I might grant, and Mr. Houghton referred me to Paragraph 38/2A/6 of the White Book on terms. Having heard Counsel for both parties, I order that:-

(1) The Plaintiff do serve on the Defendant's Solicitors by 12:00 noon, Saturday, the 2nd July, 1994 a signed Supplemental Statement of Prem Buxani and a signed Supplemental Statement of Shyam Lay Uttam;

(2) The Defendant be at liberty, if so advised, to serve on the Plaintiff's Solicitors by 4:00 pm on Tuesday, the 12th July, 1994 signed witness statement or statements in reply to the Plaintiff's Supplemental Statements;

(3) Costs of and thrown away by the Plaintiff's application and the adjournment, including (for the avoidance of doubt) the costs of the hearing on the 21st and 22nd June, 1994 be taxed and paid by the Plaintiff to the Defendant forthwith.

17. I should add that I would have been prepared to entertain an application by the Defendant for costs on any indemnity basis if such an application had been made.

18. I intend to adjourn to hearing to Monday, the 1st August, 1994, with an estimated time of hearing of 5 days. I would also reserve the 8th and 9th August, 1994. As Mr. Houghton intimated to me his intention to apply for security for costs, the Plaintiff being a foreign plaintiff, I defer making the Order adjourning this matter until I shall have disposed of his application, and I also defer the question whether any order for security for costs which I may be persuaded to make should, as Mr. Hougton submits, be made a condition for granting leave under O. 38 R. 2A (5)(a).

19. I do not know if it may be of assistance to the profession that I direct that pp. 23 - 24 of the Judgment of Keith J. in Ng Kam Chun and my Decision be drawn to the attention of the Law Society and the Bar Association, and I will invite Counsel, if they see fit, to assist me.