ANG JIMMY TJUN MIN v. KHOO CHUN KIM AND OTHERS

HCA 16/2021 and
HCA 17/2021
(Heard Together)

[2023] HKCFI 3047

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 16 OF 2021

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AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 17 OF 2021

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D E C I S I O N

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A. INTRODUCTION

1.  These are the applications of the 4^th defendant (“Mother”) by summons dated 6 January 2023 in respectively HCA 16/2021 and HCA 17/2021 for her evidence to be taken by deposition before a Master and a direction that such deposition may be taken through video-conferencing facilities (“VCF”) (the “Deposition Summonses”).

2.  By letter dated 31 August 2023, the plaintiff indicated that he would no longer oppose §§1 and 2 of the Deposition Summonses, ie Mother can have her evidence taken by deposition before a Master.  However, the plaintiff maintains his opposition to the deposition being taken by VCF: see §3 of the Deposition Summonses.  Hence, the outstanding issue in the Deposition Summonses which requires determination by the court is whether Mother’s deposition can be taken by VCF.  In this regard, Mother’s application for her examination to be conducted by VCF from Singapore is “strongly supported” by the 1^st and 2^nd defendants.

B.      RELEVANT FACTUAL BACKGROUND

3.  The relevant factual background of these proceedings has been set out in the plaintiff’s Skeleton Submissions as follows.

4.  The present proceedings are common law derivative actions commenced by the plaintiff (“Jimmy”) as minority shareholder of Banner (China) Investment Company Limited (“Banner”) in HCA 16/2021 and Leebury Investments Limited (“Leebury”) in HCA 17/2021 respectively.

5.  The parties are family members.  Jimmy and the 2^nd defendant (“Eileen”) are respectively the son and daughter of Mother.  The 1^st defendant (“Jeffrey”) is the husband of Eileen.  The father (the “Deceased”) passed away back in 2008.

6.  Banner and Leebury’s shareholding and directorship are as follows:

(1)  Banner:

(a)  Shareholders are Mother (75%), Eileen (12.5%) and Jimmy (12.5%);

(b)  Directors were Jimmy, Jeffrey and Mother but Jimmy has been removed as director since 20 July 2022;

(2)  Leebury:

(a)  Shareholders are a family-controlled company called Ang’s Holdings Limited (92.5%), Mother (5%), Eileen (1.25%) and Jimmy (1.25%);

(b)  Directors are Jimmy and Mother.

7.  In HCA 16/2021:

(1)  Jimmy’s case is that the defendants misappropriated and/or are liable for the misappropriation of two categories of assets belonging to Banner: (i) 63,000 shares of East West Bankcorp (“EWB Shares”), and (ii) funds in the amount of around US$4.1 million. In particular, Jimmy’s primary case is that the EWB Shares are held by Banner as the legal owner for the benefit of the estate of the Deceased (the “Estate”);

(2)  Jeffrey, Eileen and Mother’s case is that the EWB Shares are held on trust for Mother, and not for the Estate.  They also claim that Jimmy consented to or acquiesced in the transfer of the assets away from Banner;

(3)  Jimmy has helpfully summarised the issues regarding the EWB Shares:

(a)  The EWB Shares were originally shares of MetroCorp Bancshares, Inc (“MetroCorp Shares”). A batch of such MetroCorp Shares were initially held by Gaumnitz Inc (“Gaumnitz”) since 1991;

(b)  Gaumnitz was ultimately held by Fentham Corporation (“Fentham”).  The defendants’ case is that Fentham was held by the Deceased and Mother on joint tenancy;

(c)  The key event occurred in 1997.  The parties agree that the MetroCorp Shares were transferred from Gaumnitz to a Leslie Looi Meng (“Leslie”).  The defendants say that the transfer was without consideration so that Leslie continued to hold the MetroCorp Shares on behalf of Gaumnitz.  Jimmy on the other hand says it was a sale of the shares to Leslie with the Deceased paying the consideration, so that the MetroCorp Shares came to be held by Leslie on behalf of the Deceased;

(d)  The MetroCorp Shares were eventually transferred to Banner for no consideration in 2013 and exchanged for the EWB Shares in 2014;

(e)  As such, the critical incident which would establish the true beneficial ownership of the EWB Shares would be the transfer of the MetroCorp Shares from Gaumnitz to Leslie in 1997.

8.  In HCA 17/2021:

(1)  Jimmy’s case is that the defendants misappropriated and/or are liable for the misappropriation of various shares, funds and loans belonging to Leebury; and

(2)  The case of Jeffrey, Eileen, and Mother is that the assets transferred away from Leebury belonged beneficially to Mother.  They also claim that Jimmy consented to or acquiesced in the transfer of the assets away from Leebury.

C.      RELEVANT LEGAL PRINCIPLES

9.  The general principles for the use of VCF are summarised by Anthony Chan J in the oft-cited case of Re Nobility School Limited [2020] HKCFI 891 at §9:

“(1) The giving of evidence by video conferencing facilities (‘VCF’) is an exception;

(2) The starting point is that proceedings are conducted in court. I would add that this is more important when it comes to a trial;

(3) Sound reason is required to justify a departure from the starting point;

(4) The solemnity of court proceedings and its atmosphere is highly important in the taking of evidence;

(5) The court may be more disposed to exercise its discretion to allow evidence by VCF in respect of technical or purely factual evidence which involves no serious issue on credibility or relatively unimportant evidence;

(6) Where the credibility of the witness is seriously contested, it is important for the witness to be examined under the solemn atmosphere of the court;

(7) Costs and convenience may be important considerations which the court will have to weigh in the determination of the application;

(8) Ultimately, it is a matter of judgment of the court choosing the course best calculated to achieve a just result by taking into account all the material considerations, including whether the witness is capable of attending the proceedings, any prejudice to the other party, the Underlying Objectives, any delay to the proceedings and practical considerations like the availability of the facilities (see Practice Direction 29).” (Emphasis added)

10.  As to the sort of medical evidence which would show that a witness is incapable of attending the proceedings thus justifying the taking of evidence via video link, reference can be made to Daimler AG v Leiduck (No 2) [2013] 2 HKLRD 822, where at §19 Barma JA said this: “Those cases are, in my view, far removed from the present case, where the uncontradicted medical evidence is to the effect that it would be life-threatening for the 1^st defendant to have to travel to Hong Kong” (Emphasis added).  At §20, Barma JA re-emphasised the opinion of the two doctors that “it would be hazardous to the 1^st defendant’s life and health to have to undertake the journey to Hong Kong”.

11.  Apart from the Re Nobility School Ltd case, the Court of Appeal has also emphasised the importance for evidence to be given in the solemnity of the court and for the applicant to justify why she should be accorded the privilege of using VCF.  In Mahajan v HCL Technologies (Hong Kong) Ltd [2010] 5 HKLRD 119, Rogers VP at §5 cited the following passages from a previous decision for convenience:

“[16] The next question addressed by the Judge was as to whether the cross-examination could be conducted whilst the respondent was in Macau using VCF. The Judge approached this question on the basis that the giving of evidence by VCF was an exception rather than the rule and that it would be a matter of privilege accorded to the respondent and not a matter of right for him to be allowed to do so.

[17] In my view the Judge was quite correct in this approach. The starting point must be that proceedings are conducted in court. Mr Kat, who appeared on behalf of the respondent, took issue with the approach of the Judge where it was said in para 28 of the judgment that ‘On the other hand, witnesses are obliged by law, the solemnity of the court atmosphere and the threat of immediate sanction to give evidence on oath or under affirmation and to tell the truth.’

[18] Whether or not the threat of immediate sanction is something that weighs heavily on witnesses is, perhaps, a matter of conjecture. Nevertheless I have no doubt that the atmosphere of a court is highly important as regards the taking of evidence. The solemnity of court proceedings and its atmosphere is something which, I have no doubt, plays an important role in the way justice is administered.

[19] There is no doubt that VCF is a highly useful tool. It must be a question of judgment in each case as to whether VCF should be used for the taking of evidence. No doubt on those occasions when the witness is giving evidence that is technical or purely factual without important issues as to credibility, a court may be more disposed to allow evidence to be given by the use of VCF. Questions of cost and convenience are, no doubt, also important considerations that the court will have to weigh in deciding whether to allow evidence to be given using a VCF. But first and foremost, it seems to me, that the Judge was correct in his approach that a party wishing to give evidence using VCF should establish a sound reason why that privilege should be accorded. The Judge concluded in para 57 of his judgment, ‘It is thus clear that giving evidence via video link is an exception rather than the rule. It is for the party wishing to use video link to justify why he should be accorded with this exceptional treatment.’” (Emphasis added)

12.  The approach in Re Nobility School Ltd and Mahajan v HCL Technologies (Hong Kong) Ltd has once again been endorsed by the Court of Appeal even during the COVID-19 pandemic: Standard Chartered Bank (Hong Kong) Limited v Nie Hai Yan Annie [2021] 2 HKLRD 425 at §18.

D.  APPLICATION FOR DEPOSITION TO BE TAKEN BY VCF

13.  The default position is for evidence to be taken in person in court, and it is for Mother to justify why she should be accorded the privilege of departing from that.

14.  While the authorities on the use of VCF concern its use during examination of witnesses at trial, there is no reason why the rationale does not apply to the examination of a witness during the taking of deposition.  Rogers VP made it abundantly clear that the court is the place for witnesses to give evidence: Mahajan v HCL Technologies (Hong Kong) Ltd, Supra,at §7.

15.  In the circumstances of the present case, the importance of Mother being cross-examined in a solemn court setting cannot be over emphasised as it is not controversial that her evidence is likely to be hotly contested.  A major issue that divides the parties is whether the MetroCorp Shares belonged to the Deceased solely or to Mother.  She is expected to be heavily cross-examined on her knowledge and understanding of the ownership of the MetroCorp Shares as well as the credibility of her explanations.  This is especially the case as Mother claims in her 2^nd Affirmations filed in these proceedings that she has personal knowledge of conversations with the Deceased that would explain the purpose of the said transfer to Leslie.  On her evidence, she is the only person apart from Leslie who has direct knowledge of the arrangement back in 1997.  She needs to be thoroughly examined on these alleged conversations.

16.  The question for determination is whether Mother has sufficient grounds so strong as to justify the exception of using VCF despite all its drawbacks.  The grounds relied on by Mother to justify the use of VCF are that:

(1)  She is likely to face greater health risks of being exposed to COVID-19 if she is required to travel overseas;

(2)  The trip to Hong Kong by flight will be physically demanding;

(3)  She is at risk for fall from her osteoporosis condition;

(4)  Dr Timothy Lee (“Dr Lee”) issued two letters on 6 December 2022 and 26 September 2023 (“First Letter” and “Second Letter” respectively, together the “Letters”) purporting to give medical analyses on Mother’s health conditions.  In the First Letter he said of Mother that “it is best to avoid travel”, which was subsequently updated in the Second Letter to “she is not fit to fly for at least the next 12 months because of pain, multiple compression fracture and fall risk” after her recent fall in August 2023.

D1.  Is Mother unable to travel to Hong Kong?

17.  As submitted by Jimmy, the evidence strongly suggests that Mother’s osteoporosis condition and mobility issues are not so severe as to interfere with her ability to travel to Hong Kong.  Before her recent fall in August 2023, on Mother’s evidence she only needed to rely on a walking stick from time to time.

18.  In §16 of her 1^st Affirmation filed in HCA 16/2021 dated 3 January 2023, Mother described her condition as follows:

“I have been resident in Singapore since 1978. Although it is possible for me to travel to Hong Kong, as an elderly in my 80s I am likely to face greater health risks of being exposed to COVID-19 should I be required to travel overseas, in particular the risk of air transmission on the flight. Such a flight and trip would also be physically demanding to me, as I have to rely on a walking stick from time to time in view of my mobility problems, which is exacerbated by my osteoporosis condition that renders me at risk for fall. …”

19.  This tallies with the opinion of Dr Lee expressed in the First Letter that Mother was “best to avoid travel”, but not impossible to do so.

20.  After her fall in August 2023, Mother’s evidence is only that she could not walk and was confined to a wheelchair for 2 to 3 weeks.  She acknowledges that the injuries suffered in the recent fall have improved gradually.  There is no suggestion at all that the recent fall has any permanent effect on Mother or that she would not be able to return to her condition prior to the fall when she made her 1^st Affirmation in January 2023.

21.  Further, even after her recent fall in August 2023, Mother was able to fly to Shanghai on 6 September 2023, just over a month after the fall, and stayed there until 17 September 2023.

22.  I note that the flight from Singapore to Shanghai takes about 5.5 hours, whereas the flight from Singapore to Hong Kong takes only about 3.5 hours, leaving aside the relative ease and convenience to enter Hong Kong through its airport.  If Mother could travel to Shanghai soon after the fall for business, there is no reason why she cannot travel to Hong Kong to give her deposition.

23.  Importantly, Dr Lee’s Letters fall far short of establishing that Mother is incapable of travelling to Hong Kong.  Certainly, there is no evidence that Mother’s travelling to Hong Kong will be “life-threatening”.

24.  Dr Lee’s First Letter of 6 December 2022 is one and a half pages in length.  It purports to make diagnoses such as “subacute fractures”, “compression factures”, “old fractures” and “instability(anterolisthesis)” without explaining how these problems affect Mother’s ability to travel.  In the last paragraph of the First Letter, Dr Lee stated that Mother was at risk for fall and further osteoporotic fractures and then merely proffers his opinion that “it is best to avoid travel” without stating that it is impossible to do so.

25.  Dr Lee’s Second Letter of 26 September 2023 is even shorter and consists of only three paragraphs.  He confirmed that Mother was able to walk when he reviewed her on 18 September 2023.  He claimed that her health condition deteriorated since returning to Singapore from Shanghai, but he gave no explanation on what he meant by “deteriorated”.  In the last paragraph, Dr Lee advised that Mother was “not fit to fly for at least the next 12 months because of pain, multiple compression fracture and fall risk”, but there was no assessment of the potential consequences of Mother flying.  In particular, I note that in relation to “pain”, at the second paragraph of the Second Letter, Dr Lee only referred to pain “when she walks five minutes …”.  In the circumstances, there is no reason why Mother cannot come to Hong Kong with the assistance of a wheelchair, which will of course also reduce any “fall risk”.

26.  In short, the objective evidence falls way short of establishing that Mother is incapable of travelling to Hong Kong when the time comes for her deposition to be taken.

27.  Jimmy has already agreed for Mother’s evidence to be taken by deposition, I agree it would only be fair for the taking of her evidence to be conducted in person in the court in Hong Kong.

28.  In further support of §3 of the Deposition Summonses, Mother submits generally that the following measures can be ordered by the court to ensure fairness of the procedure:

(1)  Jimmy’s legal team can send representatives to attend the Singapore Residence or the neutral venue to observe the entire process of the deposition;

(2)  The VCF arrangements must meet the technical requirements of the court;

(3)  Video recording of the deposition can be taken so that Mother’s demeanour during the deposition can be recorded real time.

29.  However, as submitted by Jimmy, if a witness is able to travel to Hong Kong, there is really no reason to consider other lesser means of taking the deposition at all, as the starting point is that the proceedings should be conducted in court.

E.  CONCLUSION

30.  For the reasons set out above, I would make an order in terms of paragraphs 1 and 2 of the Deposition Summonses.

31.  However, I would refuse Mother’s application for the direction that the deposition be taken through VCF.  Accordingly, paragraph 3 of the Deposition Summonses are dismissed.

32.  As to costs, I order that the costs of and occasioned by paragraphs 1 and 2 of the Deposition Summonses be costs in the cause.  I further order that the costs of and occasioned by paragraph 3 of the Deposition Summonses be paid by the 1^st, 2^nd and 4^th defendants to the plaintiff, such costs are to be taxed if not agreed.

33.  The above order as to costs is nisi and shall become absolute in the absence of any application within 14 days to vary the same.

34.  Lastly, I express my gratitude to counsel for their helpful assistance in this matter.