YUKIO TAKAHASHI AND ANOTHER v. CHENG ZHEN SHU AND OTHERS

HCA 2115/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2115 OF 2004

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R U L I N G

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1.  The 3^rd defendant is applying to re-open its evidence after one day of closing speech by counsel.  The 3^rd defendant wishes to call the 1^st defendant who has settled with the plaintiffs and dropped out from the case. 

2.  The plaintiffs are suing the 3^rd defendant in restitution.  The plaintiffs’ case is that they paid HK$50 million to the 1^st defendant who in turn paid the 4^th defendant, and the 4^th Defendant paid the 3^rd defendant.

3.  The 3^rd defendant’s case is that it had repaid the 4^th defendant RMB￥31 million (taking into account some set-offs the validity of which is to be determined).  The payment is challenged by the plaintiffs. 

4.  The 3^rd defendant got a receipt signed by the 1^st defendant stating that the 4^th defendant had paid him RMB￥54 million.  This is also challenged by the plaintiffs, as the receipt dated 2004 only surfaced a week before trial in April 2008.

5.  Whether the 3^rd defendant had parted with the money is an essential issue in the case.  The 3^rd defendant wanted to get it from the horse’s own mouth as to whether the 1^st defendant had received the money from the 4^th defendant, which will go in some way to support the allegation of payment by the 3^rd defendant to the 4^th defendant.

6.  In Urban Transport Authority of New South Wales v Nweiser [1992] 28 NSWLR 471, Clark JA considered the following factors to be relevant in an application to re-open the evidence:

(1) The question of whether to open the case will be considered in the interest of justice;

(2) Tactical decision of not calling particular evidence is an important consideration but not decisive, and the application they more likely to be refused.

(3) If the evidence were not called due to mistake or lack of foresight, the application should normally be granted.

7.  Mr Ng, SC for the plaintiffs, opposed the application and submitted that the 1^st defendant’s evidence is of marginal relevance:

(1)  The 3^rd defendant has already put in the primary evidence of payment by itself for whatever it is worth;

(2)  The 3^rd defendant has the receipt, and if the 1^st defendant accepts that he has received the money, it is only of the same effect of the receipt;

(3)  If the 1^st defendant denies the receipt of the money and were accepted by the court, it would actually be against the 3^rd defendant’s cause;

(4)  Alternatively, if the 1^st defendant denies the receipt and were turned hostile, the evidence would be neutralized.

8.  Mr Ng also submitted that there would be prejudice in form of delay, and delay would aggravate the fact that the 1^st defendant might not be good for the settlement.

9.  Mr Mak, for the 3^rd defendant, admitted mistake on his part in not calling the 1^st defendant when he left the case, which is about a month ago, and also delay in not calling him earlier than now.  But he submitted that there is no serious prejudice to the plaintiffs by the added delay considering the high degree of relevance of the evidence.

10.  I note the irony that in the event the application were refused,  the 3^rd defendant would perhaps be making the submission of an attempt to suppress the truth on the part of the plaintiffs in addressing the court on the weight of the receipt.

11.  No doubt the 3^rd defendant has got the evidence in the record of payment to 4^th defendant, but that was not without criticism as to weight.  The 3^rd defendant also got the receipt in question, but the authenticity is challenged.  I think it is in the interest of justice to find out the truth unless there is such serious irreparable prejudice countervailing.

12.  Mr Mak is not calling the 4^th defendant who purportedly took the receipt.  The 4^th defendant is outside the jurisdiction, and in any case, it is the 1^st defendant who purportedly signed the receipt.

13.  As to whether the 3^rd defendant has been maneuvering under tactical considerations, I bear in mind that the settlement between the plaintiffs and the 1^st defendant only came about at the beginning of the trial.  Mr Mak must have been expecting to cross-examine the 1^st defendant on the receipt.  I do not consider that the failure to call the 1^st defendant earlier was of tactical move, but perhaps unfortunately a lack of foresight.

14.  Whether the 1^st defendant is good for settlement has to be seen, but that is a matter according to the schedule of payment in the settlement, and is subject to the usual vicissitudes of any promise to pay.

15.  There is bound to be further delay, but not such as to defeat any urgent exigency, nor will loom too large in the history of the prosecution of the case at the incidence of the plaintiffs.

16.  I note from the correspondence that the 1^st defendant’s solicitors are taking instructions on the point and wish to be heard on the matter.  There is always the avenue to set aside the subpoena in the event of issue, and the considerations would be relevance of the evidence and oppression.  On the former, I have ruled in favour of the 3^rd defendant.

17.  In the premises, I shall allow the application and endorse the praecipe for the subpoena on the condition of immediate payment of the costs thrown away by the 3^rd defendant.

(Discussions on costs)

18. I make the gross sum assessment of the costs thrown away on the application this morning at HK$65,000.