TANG LING CHOA TSO AND OTHERS v. 鄧盛炳 AND ANOTHER

HCA 222/2018

[2026] HKCFI 3876

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 222 OF 2018

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DECISION

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Introduction

1.  By a summons dated 4 February 2025 (“the Expert Summons”), the 1^st Defendant seeks leave to adduce the expert report of Mr Denys Lok Ping Kwan (“Mr Kwan”)  dated 28 January 2025 (“Kwan’s Report”)  as evidence in these proceedings, and an order that a joint report be prepared by Mr Keith LH Siu (the single joint expert (“SJE”)  appointed by the Court)  and Mr Kwan.

2.  On 9 April 2025, Master Dick Ho dismissed the Expert Summons.  On 22 April 2025, D1 lodged an appeal against the Master’s Order.

3.  The appeal was first heard by me on 3 September 2025.  For the reason appeared in §20 below, the appeal hearing was adjourned. This is the adjourned hearing of D1’s appeal.

4.  In accordance with the well-established principle, subject to Order 58 rule 1(5), the appeal before me is a de novo hearing, and I would deal with the Expert Summons as if the application made therein came before me for the first time[1].

5.  In the hearing on 3 September 2025, Mr Stanley CK Siu represented the Plaintiff (“P”), Mr Isaac Chan and Mr Jonathan HY Tsang represented D1.  In the adjourned hearing on 29 June 2026, Mr Anthony LK Ko represented P, Mr Chan and Mr Tsang continued to represent D1. 

Background

6.  P was and is a tso in the New Territories. At all material times, P was and is the owner of 13 pieces of land (“the Lands”)  in Yuen Long.  D1 claimed that he first came into possession of the Lands under a licence in May 2005.  The Lands were used as a car park.  D1 claimed that he continued to occupy the Lands for running car park business under three tenancy agreements with P, and the tenancy agreements were signed by one Tang Siu Wah for P.  According to D1, the three tenancy agreements are as follows:

(1)  2005 Tenancy Agreement (for a term of 3 yrs);

(2)  2008 Tenancy Agreement (for a term of 5 yrs); and

(3)  2013 Tenancy Agreement (for a term of 10 yrs).

7.  In 2018, P commenced these proceedings against D1.  P denied D1’s allegations and claimed that D1 was in unlawful occupation of the Lands at all times.

8.  D1 ceased occupying the Lands in 2023.

9.  Expert evidence is necessary for the purpose of assessing the quantum of the damages payable by D1 to P in the event that P succeeds in establishing liability in their claim against D1.

10.  On 9 November 2022, Master Kot ordered that a single joint expert be appointed to render an opinion on the following issues (“the Quantum Issues”):

(1)  the market rental value of the Lands for agricultural uses from June-2005 to the date of the report; and

(2)  the market rental value of the Lands used as a car park from June-2005 to the date of the report.

11.  On 18 October 2023, Master Matthew Leung directed the parties to report to the Court on the nomination of a single joint expert within 14 days therefrom, and in case no nomination of a single joint expert could be made, the parties shall lodge their respective nomination by 4 pm on 15 November 2023 on an unless basis.

12.  The parties could not reach an agreement on the identity of the SJE.  P put forward their nomination to the Court before the deadline imposed in the Order dated 18 October 2023, but D only put forward his nomination after the deadline.

13.  On 28 November 2023, Master Matthew Leung ordered that Mr Keith LH Siu be appointed as the SJE.

14.  On 10 September 2024, Master Dick Ho ordered that the report of the SJE be completed on or before 15 October 2024 on an unless basis, and that parties shall obtain counsel’s advice (if necessary)  and take out all further interlocutory application within 35 days from the date of filing of a single joint expert report.

15.  On 10 October 2024, the SJE filed his report on the Quantum Issues (“SJE Report”).

16.  On 15 January 2025, Master Matthew Leung granted a time extension to allow the parties to take out all further interlocutory applications by 4 February 2025.

17.  On 4 February 2025, D1 took out the Expert Summons.  According to D1, there are various fundamental problems in the SJE Report, and hence the SJE Report is unreliable and incapable of providing assistance to the Court in determining the Quantum Issues in a fair manner.  In the circumstances, there is justification in support of the Expert Summons and D1 should be allowed to file Kwan’s Report.

18.  On 6 February 2025, the Expert Summons was heard by Master A. Ho in a CMC.  No substantive decision was made on the summons in that hearing.

19.  On 9 April 2025, Master Dick Ho dismissed the Expert Summons.  By the Notice of Appeal filed on 22 April 2025, D1 lodged an appeal against the Master’s Order.

20.  On 3 September 2025, the appeal was heard by me.  In that hearing, after hearing submissions, I directed that Mr Kwan and the SJE shall hold a without prejudice meeting and to produce a joint report setting out their agreements and disagreements first, before deciding whether to allow Mr Kwan’s Report to be adduced as evidence.  That approach is in line with the procedure adopted in previous cases.[2]  The appeal hearing was adjourned to 7 January 2026.

21.  Subsequently, due to the health issues of the SJE, the Court had granted some time extensions to the parties.  The joint report stipulated in the Order dated 3 September 2025 was only filed on 25 March 2026 (“the Joint Report”).  The adjourned appeal hearing finally resumed on 29 June 2026.

The principles

22.  The appointment of a SJE, whether by agreement between the parties or imposed by the Court, does not per se bar a party from seeking leave to instruct his own expert to challenge the SJE’s evidence or aspects thereof.  Leave should and would be granted if, upon balancing all relevant considerations, it is just and accords with the underlying objectives of Civil Justice Reform as set out in Order 1A rule 1.[3] 

23.  In considering whether an application for adducing evidence from a second expert should be allowed, the following factors are relevant:[4]

(1)  the nature of the dispute;

(2)  the number of disputes on which the expert evidence is relevant;

(3)  the reason for requiring the second report;

(4)  the amount at stake or the nature of the issues at stake;

(5)  the effect of permitting a second expert report on the conduct of the trial;

(6)  the delay in making the application;

(7)  the delay that might be caused in the conduct of the proceedings;

(8)  any other special features;

(9)  the overall justice to the parties.

24.  Additional expert evidence may be permitted where the dissatisfied party’s reasons for wishing to adduce such evidence are “not fanciful”.  It should be sufficient if those reasons are not fanciful, particularly if the other considerations also point to own-party expert evidence being appropriate.[5]

25.  If a new expert is found who has a contrary view to the one expressed by the joint expert, this factor itself is not a sufficient reason in every case allowing the introduction of the evidence from the new expert.  However, if there are grounds for thinking that the joint expert may be wrong because another expert takes a different view, that is certainly a factor which is to be borne in mind.[6]

Discussion

26.  In the SJE Report, the SJE gave the following opinion:

(1)  In respect of agricultural use, after referring to 4 comparables and applying some adjustment factors, the SJE opined that the monthly rental of the Lands from 1 June 2005 to 31 May 2025 ranged from HK$36,300.17 to HK$82,339.41. This method is called the Direct Comparison Method.

(2)  In respect of car park use:

(a)  The SJE had referred to “similar open car parking spaces around the vicinity” and calculated the average monthly rental for those parking spaces in the vicinity (“Average Parking Rent”)  for years 2009, 2011, 2020 to 2025.

(b)  In respect of the other missing valuation periods for which there was no available rental information (namely 2005 to 2009, 2010 to 2011 and 2012 to 2020)  the SJE attempted to fill in these gaps by calculating the average percentage difference in monthly rental between 2011 (HK$800)  and 2020 (HK$1,700), which was 12.5% per year.  The SJE then extrapolated the Average Parking Rent for the missing valuation periods by applying the fixed percentage of 12.5%.

(c)  The SJE then compared his results with the rental indices for “private domestic”, and opined that the assessed Average Parking Rent was in line with the domestic property market in general.

(d)  The SJE suggested that the Lands could operate 350 car parking spaces, which was derived by dividing the total area of the Lands with the size of one parking space.

(e)  Finally, the SJE derived the monthly rental of the Lands for car park use from 1 June 2005 to 31 May 2025 by multiplying the Average Parking Rent by 350, resulting in figures that ranged from HK$140,000 to HK$630,000.

27.  In Kwan’s Report, Mr Kwan gave the following opinion:

(1)  In respect of agricultural use, Mr Kwan referred to 8 comparables, some of which overlap with those considered by the SJE.  After applying some valuation adjustments which are different from those applied by the SJE, Mr Kwan opined that the monthly rental from 1 June 2005 to 1 June 2023 ranged from HK$8,850 to HK$23,890.  Mr Kwan had used the rental indices for Private Flatted Factories in his adjustment.

(2)  In respect of car park use:

(a)  Given the lack of approvals for the use of the Lands as a car park and the Block Government Lease restrictions on use, it would be inappropriate to value the Lands as a fully authorized car park.

(b)  Without prejudice to the above, on the assumption that all necessary approvals from the Government had been obtained, Mr Kwan conducted a valuation by referring to 17 comparables, which were short term tenancies granted by the government or private tenancies in respect of lands that were actually used for running car parks.  After applying valuation adjustments, Mr Kwan opined that the monthly rental of the Lands for car park use from 1 June 2005 to 1 June 2023 ranged from HK$25,350 to HK$183,630.

(c)  Mr Kwan adopted the rental indices for Private Flatted Factories in his assessment, which was considered by Mr Kwan as the more appropriate set of indices for the Lands.

28.  Pursuant to the Order made by me on 3 September 2025, the SJE and Mr Kwan had a without prejudice meeting on 27 November 2025 and subsequently prepared the Joint Report.  In the Joint Report, the following are stated:

(1)  Regarding the SJE’s opinion:

(a)  The SJE agreed with Mr Kwan to assume that the Lands were rented under a typical commercial tenancy for a term of 3 years commencing from 1 June 2005, renewable every 3 years at the then market rent, for 7 rental periods.

(b)  As regards agricultural use:

(i)  The SJE continued to adopt the Direct Comparison Method for assessing the market rent for agricultural use, as he did in the SJE Report.

(ii)  While the SJE continued to adopt the adjustment factors used in the SJE Report, he also agreed to adopt Mr Kwan’s adjustment factors for vehicular access and shape of lot.

(iii)  As for the comparables, the SJE agreed to adopt two of Mr Kwan’s comparables and agreed not to adopt a comparable which was previously adopted in the SJE Report.

(iv)  At the end, he SJE opined that the monthly rentals from 1 June 2005 to 31 May 2025 ranged from HK$31,000 to HK$74,300, which were less than the figures in the SJE Report.

(c)  As regards car park use:

(i)  The SJE used an approach called the “Income Approach”, which multiplies actual monthly rental received from car park users by the estimated number of car parking spaces within the Lands.  The SJE further stated that the “highest and best use” of the Lands shall always be applied.

(ii)  For adjustments, the SJE referred to “similar open car parks around the vicinity … in different period of time”, and such “referencing open car parks” were “just immediately next to or within a 5-minute driving distance”, such that each of them was comparative to the Lands and “no adjustments required”.  No detail of the “referencing open car parks” has been provided, other than a vague location plan.

(iii)  In response to the car park comparables adopted by Mr Kwan, the SJE agreed that four of the comparables adopted by Mr Kwan were “one of the closest open car parks” to the Lands and therefore could be taken as comparables in terms of “location and nature of user except how the adjustments on unit rent is made by Mr Kwan”.

(iv)  By adopting the “Income Approach” and assuming that there could be 350 car parking spaces on the Lands, the SJE derived the monthly rental from 1 June 2005 to 31 May 2025 as ranging from HK$140,000 to HK$595,000. 

(d)  Regarding the rental indices, both experts agreed that there were no indices that could fairly reflect the changes in rental market of agricultural lots, and hence the experts agreed to adopt the average of the indices for “private domestic” and “private flatted factories”.  As for car park use, the SJE considered that there was no need to apply any rental indices given the “similar open car parking spaces” he referred to were sufficient in showing the actual market trend.

(2)  Regarding Mr Kwan’s opinion:

(a)  Mr Kwan maintained his opinion that it would be inappropriate to value the Lands as a fully authorized car park given the lack of approvals.

(b)  Insofar as the Lands were to be valued for car park use, Mr Kwan agreed to include the area reserved for “Road” as part of the rental assessment for car park use.

(c)  Mr Kwan maintained the same valuation approach for agricultural and car park use as in Kwan’s Report, being the Direct Comparison Method.  Mr Kwan considered that the SJE’s approach based on a hypothetical parking layout was not the monthly rent that the landlord would charge a tenant for a regular 3-year tenancy in the open market.

(d)  Regarding agricultural use:

(i)  Mr Kwan agreed with the SJE not to adopt one of the agricultural comparables, but continued to adopt the rest of the comparables as in Kwan’s Report (some of which were agreed to by the SJE as mentioned in the above).

(ii)  As for adjustment factors, Mr Kwan agreed with the SJE’s opinion to apply a -10% adjustment to comparables where ancillary retail activities are allowed, but otherwise continued to adopt the same adjustment factors as in Kwan’s Report (some of which were agreed to by the SJE as mentioned in the above).

(iii)  At the end, Mr Kwan opined that monthly rental from 1 June 2005 to 1 June 2023 ranged from HK$6,200 to HK$14,160, which were less than the figures in Kwan’s Report.

(e)  As regards car park use, Mr Kwan adopted the same car park comparables as in Kwan’s Report (with the addition of one comparable).  After applying adjustment factors, Mr Kwan opined that the monthly rentals from 1 June 2005 to 1 June 2023 ranged from HK$67,800 to HK$191,800, which were increased from the figures in Kwan’s Report.

(3)  For agricultural use, the total of the rental incomes estimated by the SJE is substantially more than the figure estimated by Mr Kwan.  For car park use, the situation is the same.  The differences are very substantial.

29.  In the hearing before me, after having some exchanges with the Court and after taking instructions, Mr Ko for P confirmed that P did not object to the filing of both the Joint Report and Kwan’s Report.  In my view, these concessions are rightly made.  I am of the view that D1 should be given leave to file the Joint Report and Kwan’s Report.

(1)  The expert evidence is important in the event that P succeeds in establishing liability against D1.  In that scenario, the Court would need to consider the expert evidence to assess the quantum of damages.

(2)  Since both the SJE’s evidence and Mr Kwan’s evidence would be considered by the Court at the trial, I refrain from making detailed comments on their respective opinions.  Suffice for me to say that as to the disagreements between the two experts, I am of the view that Mr Kwan has given cogent reasons in support of his own opinion, and at the end Mr Kwan’s opinion may be accepted at the trial.  Given the genuine disagreements between the two experts and there is a reasonable chance that the Court may agree with Mr Kwan at the trial, the reason for adducing both Kwan’s Report and the Joint Report (which contains the SJE’s revised opinion and Mr Kwan’s revised opinion)  as evidence in the trial is certainly not fanciful.

(3)  Having considered the procedural history in this case, I do not think that there is any delay in taking out the Expert Summons. I am also of the view that allowing the introduction of Mr Kwan’s evidence at the trial would not significantly lengthen the trial.

(4)  Given the significant and substantial differences in the estimations given by the two experts, in order to have a just and fair resolution of the parties’ dispute on the quantum of damages, the overall justice would require allowing the introduction of Mr Kwan’s evidence at the trial.

30.  Accordingly, D1’s appeal must be allowed.

31.  As to costs, Mr Chan submitted that if the appeal is allowed, costs should follow the event, and costs of the appeal and costs of the hearing below should be awarded to D1.

32.  As to costs, Mr Ko submitted that in the event that the appeal is allowed, costs before the filing of the Joint Report should be borne by D1.  This is because in the Expert Summons, D1 sought leave to adduce Kwan’s Report first before any without prejudice meeting between the SJE and Mr Kwan, and before the preparation of the Joint Report.  This is not the correct sequence and P is entitled to oppose the same.  Costs after the filing of the Joint Report should be reserved.  In the event that Mr Kwan’s evidence is rejected at the trial, costs for the preparation of Kwan’s Report should be awarded to P.

33.  For avoidance of doubt, Mr Chan has only sought the legal costs of the appeal and the legal costs of the hearing below.  As to the costs of the preparation of the Joint Report and the costs of the preparation of the Kwan’s Report, those costs would be reserved and determined by the trial judge.

34.  As to the “incorrect sequence” point taken by Mr Ko in his submissions, in view of the procedural history in these proceedings, there is no merit in this point.

(1)  It is true that the sequence suggested in the Expert Summons dated 4 February 2025 is filing Kwan’s Report first, and then having without prejudice meeting(s)  between the two experts and filing a joint report.

(2)  However, in D1’s skeleton submissions dated 5 February 2025 (ie one day after taking out the Expert Summons)  for the hearing on 6 February 2025 (“D1’s 05.02.2025 Skeleton”), D1 had already proposed that there be a without prejudice meeting between the two experts and filing a joint report first. The proposal was not accepted by P.

(3)  It is clear that if the sequence proposed in the Expert Summons is not the correct sequence, one day after taking out the summons, D1 has already proposed that the first matter would be arranging a without prejudice meeting between the two experts and filing a joint report. Mr Ko has fairly accepted that if there is any impact on costs because of the one-day time gap between the Expert Summons dated 4 February 2025 and D1’s 05.02.2025 Skeleton, the impact is certainly negligible.

(4)  In D1’s skeleton submissions dated 7 April 2025 for the hearing on 9 April 2025, D1 repeated the proposal of having a without prejudice meeting between the two experts and filing a joint report first.  The proposal was not accepted by P.

(5)  In June and July 2025, there were some email exchanges between the parties’ respective solicitors.  In these email exchanges, D1 proposed to arrange a without prejudice meeting of the two experts and let the two experts prepare a joint report.  The proposal was refused by P.

(6)  In view of all the above, there is no basis in saying that D1 should be ordered to bear any costs because D1 adopted an incorrect sequence in the Expert Summons.  It is indisputable that one day after taking out the Expert Summons, D1 already adopted the position that the first matter should be arranging a without prejudice between the two experts and the preparation of a Joint Report.  Regrettably, this proposal was repeatedly refused by P.  The situation only changed after this Court intervened and made the Order dated 3 September 2025.

Disposition

35.  I allow D1’s appeal and make the following order:

(1)  The Master Order dated 9 April 2025 be set aside.

(2)  Leave to D1 to adduce the Joint Report and Kwan’s Report as evidence on the Quantum Issues, and to file and serve the said report within 14 days.

(3)  Unless the trial judge directs otherwise, the SJE and Mr Kwan do attend the trail of this action and be cross-examined, and their respective expert reports as well as their respective opinions in the Joint Report do stand as their respective evidence in chief.

(4)  Costs of the appeal (including the costs of the hearing on 3 September 2025 and costs reserved)  and costs of the hearing below (with a certificate for counsel)  be paid by P to D1 forthwith, and those costs be summarily assessed at HK$200,000.

36.  Lastly, it remains for me to express my gratitude to all counsel for the helpful assistance provided to the Court.