PATRICK HUNG HING YU v. HO YIN MAN AND OTHERS

HCA 92/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 92 OF 2007

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D E C I S I O N

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THE APPLICATION

1.  This is an application taken out by the Plaintiff (“P”), an executrix of the deceased, pursuant to O.38 RHC for the affirmations in the schedule attached to the summons to be read out at trial and adduced as hearsay evidence.  This application only concerns the following defendants (“Ds”): D4 and D5 respectively.  Each of them has submitted written submissions for opposition and the parties are legally represented.[1] However, D1 is present in person today.  He has submitted no written submissions to this Court for this hearing.  He would like to set aside the default judgment against him.  Since he is unable to deal with his application, he simply remains in court to watch.

Margin notes

2.  The margin of the summons has not set out the rules under which this application is taken out.  P should have set out clearly the relevant statutory provisions under which the application is taken out at the margin of the summons, so that the application is clear for all parties concerned, including this Court.  See White Book 2017 para 32/6/7.  It is time that the legal profession should pay attention to this practice.  Failing to do so will cause confusion and argument at the hearing as will be seen below.  Costs will be considered for such deficiency.

Order 38, rule 2

3.  Obviously, this application is made under O.38, r.2, RHC:

(1)  The Court may, at or before the trial of an action begun by writ, order that the affidavit of any witness may be read at the trial if in the circumstances of the case it thinks it reasonable so to order.

(2)  An order under paragraph (1) may be made on such terms as to the filing and giving of copies of the affidavits and as to the production of the deponents for cross-examination as the Court thinks fit but, subject to any such terms and to any subsequent order of the Court, the deponents shall not be subject to cross-examination and need not attend the trial for the purpose.

(3)  ......

The schedule to the summons

4.  The affirmations that P applies for leave to read out as set out in the schedule of the summons are:

Affirmation/letter of Patrick Hung

(a)  Affirmation dated 10 January 2007;

(b)  Letter to Leung (undated and unsigned);

(c)  Letter to Cosimo Borrelli dated 19 January 2007;

(d)  Letter to Chan (undated and unsigned);

(e)  Letter to Robert Siu & Co. (undated and unsigned);

(f)  Declaration dated 15 December 2006;

(g)  Affirmation dated 25 January 2008

Affirmation of other witnesses

(h)  Affirmation of 郭繼先dated 7 November 2007;

(i)  Affirmations of 賀賢敏 dated 8 June 2007 and 28 May 2007.

For clarification of the application

5.  Before this hearing, I have instructed my clerk to enquire with P’s solicitors as to the authority for reading out the letters and the Declaration in court under O.38, r.2 RHC.

6.  P’s counsel replied admitting that O.38, r.2 does not refer to the letters and the Declaration.  However, she referred to O.38, r.21 and section 48 of the Evidence Ordinance, Cap.8, which permits the court to make directions on hearsay evidence.  I suppose she referred to section 47 of the Evidence Ordinance.  She invited this Court to deal with the letters and the Declaration in this hearing.

7.  D4’s counsel replied that he would argue that the Court has no jurisdiction to deal with the letters and the Declaration under O.38, r.2.  But he said that he understood that P was relying upon Part III of O.38, which deals with hearsay evidence.  But he wanted P to demonstrate that this will be the case in court.

8.  D5’s counsel replied that he agreed that the Declaration could be treated as an affirmation which is defined as:

“An affidavit is a written document containing material and relevant facts or statements relating to the matters in question or issue and sworn or affirmed and signed by the deponent before a person or officer duly authorized to administer any oath or affirmation or take any affidavit.” [2]

He further submits that the letter can be dealt with under section 47 of the Evidence Ordinance, Cap.8 and that P can apply for the letters to be read out in court. [3]

9.  I accept that this Court has jurisdiction to deal with the hearsay evidence despite there being no marginal note on the relevant applicable Order and Rule in the summons.  See Premier Fashion Wears Ltd v Li Hing Chung [1994]1 HKC 213.  However, to admit the hearsay evidence under O.38, r.21 is quite different from the treatment of the evidence under O.38, r.2.  This can be seen at once where under O.38, r.2(2) the witness’s affidavit having been read out in court, the witness “shall not be subject to cross-examination and need not attend the trial for the purpose.”  There is no similar provision under O.38, r.21.

10.  P applies for leave to read out the affirmations and the letters and the Declaration in court at trial.  No reading out is necessary for O.38, r.21.  It will be inappropriate for this Court to make an order in terms as suggested by P in the summons for the letters.  For this purpose, I accept that the Declaration, as its context stands, is within the definition of affirmation as admitted by D5.

11.  For the present summons, as the defendants have no objection for it to be heard and that they are not taken by surprise, I shall deal with the hearsay evidence in relation to the letters here under O.38, r.21 RHC and s.47 of the Evidence Ordinance, Cap.8.

12.  Now, one can see the confusion caused by P in the application without clear marginal notes as which statutory provisions should be invoked under O.38 RHC and/or the Evidence Ordinance, Cap.8.

THE FACTUAL BACKGROUND

13.  The brief factual background, so far as this application is concerned and distilled from the written submissions of P and other defendants, is as follows:

(a)  The main dispute is between P and D4, both claiming to be entitled to the consultancy fee for the development of 4 plots of land, on which a building was built. The consultancy fee was for getting the owners of the lots to agree to the re development and to arrange the approval of the building re development plan by the Building Authority for the construction of the building.

(b)  The consultancy fee, as it stands now, is the two units of the building, namely, unit 36A and unit 36D (“the units”) currently held by D3, the project manager of the development.

(c)  At one stage, D4 entered into an agreement with D5 for the sale of unit 36D. However, the transaction has not been put through. This property and unit 36A are the subject matters of another High Court Action initiated by D4 against D2 and D3. A Tomlin Order was made for those properties to be sold and the proceeds to be shared among the parties. This Tomlin Order has not yet been carried out.

(d)  In this action, P claims full entitlement to the units. D4 also claims full entitlement to the units as well.

(e)  It is a matter of fact to be found by the court as to who is entitled to the units after trial.

(f)  As far as the other defendants are concerned, D1, a shareholder of D2, shows no interest in the argument as he has given no written submissions and default judgment had been entered against him; D2, an agent set up to receive the consultancy fee, was struck off the Register and dissolved on 23 March 2012; D3, the project manager of the building, is holding the units; D4 claims to be entitled to the units as his consultancy fee pursuant to an agreement with D3 and D5 is the purchaser of unit 36D.

DISCUSSION

The affirmations and Declaration

14.  I shall deal with the affirmations and the Declaration first as they can be read out under O.38, r.2, RHC.  Those affirmations and the Declaration are:

(a)  Affirmation dated 10 January 2007 of Patrick Hung

(b)  Affirmation dated 25 January 2008 of Patrick Hung

(c)  Affirmation dated 7 November 2007 of 郭繼先 and

(d)  Affirmations dated 8 June 2007 and 29 May 2007 of賀賢敏

(e)  Declaration dated 15 December 2006

15.  It is obvious that Patrick Hung’s affirmations and Declaration are crucial for P’s case and the other three affirmations are also relevant to P’s case.  None of the defendants says otherwise.

16.  D4 admits that Hung Hing Yu, the original P had passed away and it is impossible to call him to be cross-examined.  D4 asks this Court “to consider the following reasons in deciding the issue of admissibility of the deceased plaintiff’s affirmations and declaration and the weight to be placed on such evidence.”

The relevant legal principles

17.  O.38, r.2 RHC.  See paragraph 3.

18.  The parties rely upon the following authorities for this application:

(a)  High Fashion Garments Co Ltd v Ng Siu Tong &Ors [2004] 1 HKLRD 928;

(b)  Cheung Wei Man Vivien &Anor. v Centaline Property Agency Ltd &Ors [2004] 1 HKC 692.

19.  In High Fashion, the court held:

(a)  Under O.38, r.2, the court, in making an order for the affirmation to be read out in court, must take into account the legitimate interest of the defendant in cross-examining the witness [931F]

(b)  Such right of cross-examination will not be by-passed by section 47 of the Evidence Ordinance as O.38, r.21(2) RHC provides power to the court to direct attendance of the witness for cross-examination [932I &933F];

(c)  Each case must depend on its own facts and circumstances. The court was not suggesting that in each case the attendance of the witness must be secured. It depends on the circumstances of the case. [933B]

20.  In Cheung Wei Man Vivien, the court held:

(a)  For an affirmation to be relied on at trial, the proper course is to take out an application under O.38, r.2 RHC for directions before the case is set down for trial [6].

(b)  It is not practicable to make such an order where the evidence will be strongly contested and its credibility depends on the court’s view of the witness.[6] However, the court did not say that it is not permissible to do so. The court will take all circumstances into consideration, in particular, s.47 of the Evidence Ordinance, Cap.8.

(c)  Under s.47(1) of the Evidence Ordinance, the court must exclude hearsay evidence if it is satisfied, having regard to the circumstances of the case, that the exclusion of the evidence is not prejudicial to the interests of justice. The factors under s.49 of the Evidence Ordinance are relevant.[12]

21.  I bear in mind that the above cases were decided by the CFI judge, supposedly the trial judge of the matters.  In High Fashion, DHCJ Lam (as he then was) stated that he was the trial judge of the matter.  See 564F.

22.  There is no dispute that it is within my discretion under O.38, r.2 and O.38, r.21 RHC to deal with this application.  Ultimately, it is the judge who tries the matter will have the final decision as to the weight to be given to the evidence even if it is admissible.  In my view, when a Master has, at the pre-trial stage, to determine whether the affirmation may be read out in court or admissible in evidence at trial, he or she will exercise the discretion in the manner analogous to expert evidence, relying upon the authority Wong Hoi Fung v American International Assurance Company (Bermuda) Limited & Shrila Chan [2002] 3 HKLRD 507 at §11:

“... ...Where the proposed expert evidence is plainly inadmissible or irrelevant, the court ought to exercise its discretion to refuse the admission of such evidence. But where the court cannot form a clear view on the relevance of the proposed expert evidence or where it considers that the proposed evidence is clearly relevant, then it should grant leave for the evidence to be adduced at the trial : Ko Chi Keung v. Lee Ping Yan Andrew (supra), at p.67 and Annabell Kin Yee Lee & Others v. Lee Wing Kim (May Lee) & Anor (supra), at p.15.”

23.  The Court will, of course, take into consideration section 47 of the Evidence Ordinance, Cap.8.

24.  Counsel for the defendants agree that the above approach should be adopted.

25.  Those reasons set out in the written submissions by D4 on the admissibility and weight of the evidence should be considered by the trial judge in the assessment of the evidence.  I shall now deal with the affirmations.

Mr. Hung’s affirmations and Declaration

26.  As to the late Mr. Hung’s affirmations, they are clearly relevant.  The defendants have raised no objection on relevancy.  In fact, D5 has no objection to these affirmations to be read out in court.  As Mr. Hung has passed away, it is simply not possible to cross-examine him on his affirmations.  To exclude his evidence is obviously in contravention with s.47 of the Evidence Ordinance, Cap. 8.  I shall give leave for his affirmations and Declaration to be read out in court at trial.

27.  D4 intends to rely on the safeguards under Section 48 of the Evidence Ordinance to call additional evidence including but not limited to the ICAC statements to test the reliability of the Plaintiff’s hearsay evidence.  I see no objection for leave to be granted to D4 as requested.  I so order.

Mr. Ho’s affirmations

28.  As to the two affirmations dated 8 June 2007 and 29 May 2007 of賀賢敏 (“Mr. Ho”), D4 strongly opposes reading out these two affirmations and declaration as they contain serious allegations against him unless the affirmant attends court for cross-examination.  He further submits that no sufficient effort has been put on locating this witness.  Today, Mr. Ho has appeared before this Court.  He told me that he was not aware of the default judgment and he would apply to set aside it.  He understands that today’s hearing will not deal with his application.  Therefore, he would only sit in court to hear the arguments between the plaintiff and the other defendants.  D5 holds similar grounds for his objection.  He says that this witness should be subject to heavy cross-examination in view of the inconsistencies in his affirmations and the statement he had given to the ICAC.

29.  Both D4 and D5 ask this Court to impose a condition that the witness should attend court for cross-examination if his affirmations are allowed to be read out in court.

30.  Having balanced the prejudice to P if this witness’s two affirmations were not allowed to be read out at trial and the prejudice that may be caused to D4 and D5 if his affirmations were read out without attending court for cross-examination, I consider that this witness’s evidence is corroborative of Patrick Hung’s evidence.  Their purpose is to strengthen P’s case.  I order that these affirmations can only be allowed to be read out upon the condition that this witness attends court for cross-examination.

Mr. Kwok’s affirmation

31.  As to the affirmation of 郭繼先dated 7 November 2007, similar grounds are levied against his affirmation to be read in court. For the same reasons as for the two affirmations of Mr. Ho, I make the same order of allowing this affirmation to be read out subject to the condition that the witness shall attend court for cross-examination.

The letters

32.  As to the letters, their admissibility is determined under s.47 of the Evidence Ordinance[4] and O.38, r.21 of RHC.

33.  O.38, r.21 of RHC provides as follows:

(1)  Where a party tenders as hearsay evidence a statement made by a person but does not propose to call the person who made the statement to give evidence, the Court may, on application-

(a)  allow another party to call and cross-examine the person who made the statement on its contents;

(b)  allow any party to call-

(i)   additional evidence to attack or support the reliability of the statement;

(ii)  additional evidence to attack or support that first-mentioned additional evidence.

(2)  Where the Court allows another party to call and cross-examine the person who made the statement, it may give such directions as it thinks fit to secure the attendance of that person and as to the procedure to be followed.

34.  The letter to Mr. Leung and the letter to Mr. Chan are undated and unsigned.  There is no evidence that these letters were prepared by the late Mr. Hung.  Nor is there any evidence to show that the letters were sent to Mr. Leung and Mr. Chan.  As such, there is no evidence to establish that these letters are hearsay evidence.  They are inadmissible as evidence.

35.  The letter to Cosimo Borrelli dated 19 January 2007 and the letter to Messrs. Robert Siu were signed by the late Mr. Hung.  In the first letter, there is a date on which the letter was faxed to the recipient.  D4 admits that the evidence would have great impact on the result of the case as he said they “contained very serious allegations against the 4^th Defendant which could have significant impact on the case...”[5]  To exclude them would obviously prejudice P’s case. Pursuant to s.47 of the Evidence Ordinance, they should be admissible, subject to the weight to be given by the trial judge.  The question as to what weight should be accorded to these letters is a matter for the trial judge.  D4 may raise those questions and inconsistencies between the letters and other evidence as set out in the written submissions before the trial judge. P, D4 and D5 are at liberty to call Mr. Cosimo Borrelli and Mr. Robert Siu or the handling solicitor of this case or either of them to give witness statement or to issue subpoenas to secure their attendance in court at trial in relation to those letters.

COSTS AND ORDER

36.  As to the costs of this application, each party asks for costs of this application, with certificate for counsel.  Under O.62, r.3 RHC, the costs should follow the event.  P has not won all the arguments for the application and the affirmations allowed are subject to condition, which P has argued against and lost.  In the circumstances, I consider that it is fair for the costs of this application (with certificate of counsel) to be in the cause, treating this as a summons for directions and so I order.

37.  I shall make an order in terms as follows:

(a)  Mr. Hung’s affirmations and Declaration be read out in court at trial subject to the right of D4 of calling additional evidence including but not limited to the above-mentioned ICAC statements to test the reliability of the P’s hearsay evidence ;

(b)  Mr. Kwok’s affirmation be read out in court at trial provided that Mr. Kwok shall attend court for cross-examination on his affirmation;

(c)  Mr. Ho’s affirmations be read out in court at trial provided that Mr. Ho shall attend court for cross-examination on his affirmations.

(d)  The letters respectively to Mr. Leung and Mr. Chan, both undated and unsigned, are not admissible;

(e)  The letters to Cosimo Borrelli dated 19 January 2007 be admissible as hearsay evidence subject to the conditions as stated in paragraph 35 above;

(f)  The letter to Messrs. Robert Siu be admissible as hearsay evidence subject to the conditions as stated in paragraph 35 above;

(g)  Costs of this application, including the costs for the hearing today be as per paragraph 36 above.

CASE MANAGEMENT

(h)  The costs of Case Management Conference today be in the cause (30 min);

(i)  The matter is adjourned to 11:30 am on 5 July 2017 for 4^th Case Management Conference

(j)  Liberty to apply.