GOTLAND ENTERPRISES LTD v. KWOK CHI YAU AND OTHERS

HCMP4550/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 4550 OF 2003

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R E A S O N S   F O R   D E C I S I O N

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1. This is an application for extension of time to file 3 notices of non-admission of authenticity of documents disclosed by the 1^st to 3^rd and 5^th defendants in various lists of documents (“Notices”). I dismissed this application after the hearing. I indicated at the time that reasons in writing would be given. This I now do.

2. The lists of documents in question were filed in respectively February, October and November 2004, June 2012 and January 2013.  Hence, this application is quite late, especially when the trial of this action has been set down to take place in September this year.  I should add that one of the Notices is dated June 2009 and it was served on the 1^st to 3^rd defendants at that time.  It concerns documents which were disclosed by those defendants in October 2004.

3. Very briefly, this action concerns the adverse possession claims of the defendants to land situated in Yuen Long (“Land”) which is registered in the name of the plaintiff.  Land is a scarce and highly valuable resource in Hong Kong and it is unsurprising that the action is hotly contested.  It is the defendants’ case that the Land has been occupied by them for many years and that in the past fish and poultry farming were carried out on the Land.  It is right to say that the plaintiff, hampered by its lack of knowledge, does not have much of a positive case to advance in respect of the occupation of the Land.  However, it is of course entitled to put the defendants to prove their case on possessory title. 

4. Amongst the evidence which will be adduced at the trial is the expert evidence of surveyors instructed by the parties.  It appears from the joint statement of the experts that there is evidence from the aerial photographs of the Land that there were fish and poultry farming activities carried out on the Land at various points in time. 

5. The disputed documents (subject matter of the Notices) are the business records of the farming activities (“Records”).  At the last PTR of this action, this court expressed surprise to the fact that the plaintiff sought to object to each and every document forming the Records.  The objection to some of the documents is no longer pursued.  A schedule has been filed by the plaintiff pursuant to the directions of this court setting out the reasons for contending that the disputed documents are not authentic.  The reasons advanced are as follows:

“a. Documents are neutral as to whether relating to the Land but so asserted in certain Lists of Documents; P should not be bound by an admission that they relate to the Land;

b. Documents are neutral as to an issue but it is described as favourable to the issue in certain Lists of Documents;

c. Apparently different and later handwriting or insertion and not for contemporaneous business record purposes;

d. Incomplete document;

e. Nature of documents do not match the descriptions in the respective list of documents;

f. Produced at the very late stage of proceedings; and

g. Self-Serving/Records not evidence from a true third-party;”

6. There are two problems with this late application.  Firstly, no explanation has been advanced as to why the Notices were not filed on time. CJR has been in place for over 4 years.  It is no longer acceptable to overlook non-compliance with the rules in the absence of any satisfactory explanation (see, eg, Chau Hoi Shuen v SEEC Media Group Ltd, HCA 1194/10).  The present standard is that litigation is to be conducted efficiently and expeditiously. Meeting the standard serves the interest of justice and is conducive to minimizing the costs of litigation.  Non-compliance must be properly explained.  The other reason for the requirement of proper explanation is that the court will not be in a position to exercise its discretion without the same. 

7. Mr Chan SC, who appeared for the plaintiff with Ms Yeung and Mr Liu, submitted that the reason for non-compliance is obvious.  He explained that the current team of lawyers acting for the plaintiff only took up the case in 2009.  This litigation started in 2003.  There is no suggestion that the plaintiff was at any stage without legal representation.  This court cannot accept the proposition that the reason for non-compliance is obvious.  Lack of action by previous lawyers can be explained by a number of reasons.  It is possible that a considered decision was made not to file any notice to dispute authenticity.

8. I should add that I am not convinced by the plaintiff’s submission that no extra costs will be incurred by the defendants in the event that the application is allowed.  The defendants are entitled to advance such evidence as appropriate to do justice to their case on the authenticity of the Records. I cannot agree that the application will not result in hardship or prejudice to the defendants. 

9. For these reasons alone, this application should be declined. 

10. Secondly, it appears that the plaintiff has misunderstood the effect of the deemed admission of authenticity under O27, r4.  The relevant provisions are as follows:

“(1) Subject to paragraph (2) and without prejudice to the right of a party to object to the admission in evidence of any document, a party on whom a list of documents is served in pursuance of any provision of Order 24 shall, unless the Court otherwise orders, be deemed to admit-

(a) that any document described in the list as an original document is such a document and was printed, written, signed or executed as it purports respectively to have been, and

(b) that any document described therein as a copy is a true copy.

This paragraph does not apply to a document the authenticity of which the party has denied in his pleading.

(2) If before the expiration of 21 days after inspection of the documents specified in a list of documents or after the time limited for inspection of those documents expires, whichever is the later, the party on whom the list is served serves on the party whose list it is a notice stating, in relation to any document specified therein, that he does not admit the authenticity of that document and requires it to be proved at the trial, he shall not be deemed to make any admission in relation to that document under paragraph (1);

...”

11. According to O27, r4(1), the right to object to the admissibility of any document is not affected by the deemed admission.  It makes perfect sense because a genuine document is not necessarily relevant for purpose of the trial or unobjectionable on other grounds. 

12. Further, the court retains a discretion to release the party who is deemed to have admitted the authenticity of any document from that admission.  This may be particularly relevant in cases like the present where the plaintiff is not in a position to say that the Records are not genuine.  The court would not adjudicate any action on the basis of false evidence.  If it emerged at any stage of proceedings that any document is not genuine, the court can be expected to do what is just, which includes making an appropriate order under O27, r4(1). 

13. Furthermore, the deemed admission is only an admission of genuineness – that the document in question is a genuine original or a true copy.  To illustrate the point, there is a concern by the plaintiff that some of the documents in the Records do not on their face relate to any business carried out on the Land but they have been described in the list of documents as being so related.  The deemed admission cannot go as far as admitting such assertion in the list of documents.  The reference to “printed, written, signed or executed as it purports” must be a reference to the document itself and not what has been asserted in the list.  In other words, “it” means the document.  This analysis is consistent with sound common sense.  A party cannot be in a position to enhance the probative value of a document with an assertion made in the list of documents. 

14. Finally, it should be noted that one of the purposes of O27, r4 is to encourage admissions – see Hong Kong Civil Procedure 2013, Vol 1, para 27/4/1.  The position adopted by the plaintiff – putting the defendants to prove all their documents unless there is good reason to accept their authenticity – is outdated and inconsistent with the purpose of the rule or the underlying objectives enshrined in O1A, r1. 

15. The proper approach should be one where the parties should accept that the documents disclosed by the other side are genuine unless there is sound reason to believe otherwise, in which case a notice to dispute authenticity should be filed.  Should it turn out subsequently that the faith placed upon the genuineness of any document is undeserved, it can be expected that the court will set its face against any impropriety and will not hesitate to relieve the party which has been mislead from the admission.

16. Once the relevant provisions and the effect of the deemed admission are properly understood, the grounds advanced by the plaintiff on the dispute on the authenticity of the Records fall away.   

17. For completeness, I would mention one such ground.  It has been said that some of the documents in the Records contain “different and later handwriting or insertion and not for contemporaneous business record purposes”.  It is hardly surprising that the records of some fish or poultry farming business contain such handwriting or insertion.  The plaintiff will be entitled to cross-examine on the Records to show, eg, that they relate to a different business or that no weight should be placed on them for other reason(s).  The admission cannot go beyond what appears on the face of the documents.  In other words, if a document does not suggest on its face when it was made, the admission would not inhibit any cross-examination on that point.  Indeed, Mr Shum and Mr Yan, who appeared for the 1^st to 3^rd defendants and 5^th defendant respectively, have indicated that they will not be taking any of the points which give rise to the plaintiff’s concern on the scope of the admission. 

18. Accordingly, the application was dismissed.  I have already dealt with the question of costs at the hearing, namely, that the costs of this application be to the 1^st to 3^rd and 5^th defendants.  Such costs were summarily assessed and to be paid within 14 days.