SURE WOOLLEN YARNS CO LTD v. GLOBAL APPAREL GROUP LTD

DCCJ13107/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 13107 OF 2001

D E C I S I O N

1.  This is an application by the defendant for leave to appeal against the judgment handed down by me on 21 June 2005. 

2.  The test for deciding whether to grant leave to appeal is that stated by Leung JA, as he then was, in Ma Bik Yung v Ko Chuen HCMP4303 of 1999.  He stated as follows:

“What is required for the purpose of this application is for the applicant to show that he has an arguable case with reasonable chances of success on appeal.  The authority on this should be found in the case cited by Mr Wong for the applicant, the case of Smith v Cosworth Casting Processes Limited [1997] WLR 1538 in which Lord Wolff provided the following guidance:

(1)   The court will only refuse leave if satisfied that the applicant has no realistic prospect of succeeding on the appeal...”

3.  The defendant’s solicitor submitted perfected grounds of appeal.  In considering this application, I consider the perfected grounds of appeal and the submissions of the defendant’s solicitor.  I also had the benefit of the submissions of the plaintiff’s solicitor which I also consider.

4.  The first ground stated in the perfected grounds of appeal is that:

“The learned judge erred in finding the two witnesses for the plaintiff to be credible even though there are much irregularities in what these two witnesses have said, suggesting that they are not honest.” 

And it is further stated:

“The sequence of events put forward by them at the trial of the proceedings is substantially different from the sequence of events put forward by them in their earlier witness statements and in their affirmations used to support the plaintiff’s Order 14 application which was heard on 24 January 2002.”

5.  The defendant’s solicitor submitted that the evidence at the trial of the plaintiff’s witnesses, Lau Tung-fai and Lee Duncan, related to the sequence of events as regards the supply of Lab-dip samples to the defendant, in relation to the date of the purchase order is that stated by these witnesses in their supplemental witness statements on 9 September 2004.

6.  The oral evidence at trial followed the sequence of events stated in the supplemental witness statements.  In their oral evidence, it is stated that these Lab-dip samples were delivered to the defendant on 26 October 2000 after the date of the purchase order placed on the defendant on 24 October 2000.  Lab-dip records related to the Lab-dip samples and their date of delivery were for the first time disclosed when exhibited to the supplemental witness statements on 9 September 2004.  Formerly, in the affirmation in support of the Order 14 application, it was stated that the common practice was for Lab-dip samples to be delivered before the purchase order, and Lee Duncan suggested that in the present case it was also the case.

7.  On the aforesaid apparent in consistency of evidence, the defendant’s counsel argued that Lau Tung-fai and Lee Duncan could not have been credible witnesses.  In my judgment, at paragraph 11 thereof, I stated:

“In assessing credibility, I have considered the submissions of respective counsels as well as observed witnesses and considered the content of their evidence.  The plaintiff called two witnesses to give evidence.  They were Lau Tung-fai and Lee Duncan.  I found that, in the main, they were credible witnesses in relation to dealings between the parties.  There may be lapses in memory, but despite that, I believe that they sought to give truthful evidence.”

8.  At the trial the defendant’s counsel stated that evidence given in relation to the date of the delivery of Lab-dip samples by the plaintiff to the defendant was “not really in dispute.”  The defendant’s Counsel referred to the answer Lau Tung-fai gave to his counsel’s question: “When did your company provide the Lab-dip samples to the defendant company for their approval?”  Lau Tung-fai stated, “26 October.”

9.  The date of the purchase order on 24 October 2000 was not a fact in dispute.  It being the case that the defendant did not dispute the date of delivery of Lab-dip samples as at 26 October 2000, it could not be the defence case that Lau Tung-fai’s evidence at the trial as supported by Lee Duncan related to the date of delivery of Lab-dip samples is untrue.  I have found that the evidence of Lau Tung-fai and Lee Duncan at the trial was in the main credible, leaving aside lapses of memory.  In their supplemental witness statements, Lau Tung-fai and Lee Duncan both referred to mistakes in their respective earlier statements given due to lapse of time.  They stated that such mistakes in relation to minute details of dates and numbers were due to memory loss.  Their supplemental witness statements had been adduced into evidence, and this statement of theirs aforesaid is their evidence given related to mistakes in earlier statements.

10.  At the trial, Lau Tung-fai and Lee Duncan were not cross-examined on the discrepancy of their evidence related to date of delivery of Lab-dip samples as compared with their evidence in earlier witness statements and in affirmation evidence in support of the Order 14 application.  Not having been cross-examined, they were not given a chance to explain or give their reasons for the change in evidence in their later supplemental witness statements and their oral evidence at the trial from their earlier witness statements and affirmations. 

11.  There could be different reasons for discrepancies of evidence.  Without giving witnesses a chance to state the reasons for discrepancies, it is not easy to jump to the conclusion that the reason for discrepancy is due to dishonesty.  At any rate, the evidence related to date of delivery of Lab-dip samples given at the trial was not disputed, and hence, could not be alleged to be dishonest. 

12.  In his reasoning, in support of his contention in the 1st ground of appeal defence solicitor suggested that Lab-dip records at page 58 of the bundle of documents were “fake.”  This had never been brought up at the trial.  It is not open to the defence to raise a contention that had not been brought up at the trial. 

13.  Another point raised by defence solicitor in his contention that the evidence of Lee Duncan was untruthful was the failure of Lee Duncan to state specifically in his affirmation in support of the Order 14 application that the delivery of the bulk of the yarn to the defendant was not a physical delivery.  Because of that, the defence solicitor stated that I should have come to the conclusion that Lee Duncan must have been a dishonest witness. 

14.  However, it is clear that the affirmation in support of the Order 14 application of Lee Duncan exhibited the delivery orders related to the bulk of the yarn.  In the delivery orders are the words “寄存富東代寄賣”.  If there was an intention to conceal the fact that the delivery of the bulk was not a physical delivery, then these delivery orders would not have been exhibited.  I am not able to see the argument that this fact clearly is a factor which points to dishonesty of Lee Duncan or is an obvious pointer to dishonesty.

15.  Another point was Lee Duncan’s evidence related to date of unilateral and wrongful cancellation of the purchase order by the defendant.  He had in his affirmation in support of the Order 14 application stated that date to be in mid-December whereas evidence at the trial of Lau Tung-fai was that it was between 6 to 8 November 2000.  The defendant’s solicitor submitted that this inconsistency of evidence between Lee Duncan and Lau Tung-fai should have blatantly pointed to the dishonesty of their evidence.

16.  In paragraph 31 of my judgment, I have clearly referred to my consideration of this discrepancy of evidence between Lee Duncan and Lau Tung-fai.  Having considered that, I stated that I did not find that either of them were deliberately lying.

17.  In relation to the submission by the defendant’s solicitor on the first ground of appeal related to my finding of credibility of the plaintiff’s witnesses, it is stated in paragraph 59/19/3 of Hong Kong Civil Procedure that normally,

“The Court of Appeal is reluctant to interfere with findings of fact made by the trial judge, particularly where they turn on the credibility or otherwise of the witnesses.”

18.  The second ground of appeal in the perfected grounds of appeal related to a statement in paragraph 20 of the Judgment where I stated that:

“I also accept his evidence in cross-examination that from his experience, it would not affect the texture of the yarn.”

19.  That statement in the Judgment related to the evidence of Lau Tung-fai under cross-examination that the texture of the yarn would not be affected by the dyeing process.  This statement in the judgment has to be put in context.  The context is that the defendant’s counsel had asked Lau Tung-fai under cross-examination, at page 103 of the transcript of proceedings, as regards whether the quality of the yarn may change after 10 hours of process of dyeing.  Lau Tung-fai in reply stated, “It’s possible but the possibility is very low.” 

20.  Nowhere in the judgment was there any reference to Lau Tung-fai having been accepted as an expert witness.  The Defendant’s Counsel asked Lau Tung-fai to give his view in relation to whether the quality of the yarn could have been affected by the dyeing process in cross-examination.  Lau Tung-fai had not volunteered his view.  The plaintiff had never applied for Lau Tung-fai to give evidence as an expert.  The defendant had not raised an issue in the defence that through the dyeing process, the quality of the yarn could be affected.  It was clear that the defendant’s counsel wanted to obtain Lau Tung-fai’s view on this matter.  Otherwise, they would not have asked him for his views.  The defendant’s solicitor compared the treatment of this evidence of Lau Tung-fai with the defendant’s application for its witness, Chung Hau, to give evidence in relation to an issue in the trial as regards the quality of the yarn and the colour of the yarn as an expert.  The court had rejected the application for this witness to be made an expert or to give opinion evidence because he could not be an independent expert as he was a person in charge of the defendant company.

21.  The expert evidence that Chung Hau was asked to give related to an issue in the defence case.  The refusal of this part of Chung Hau’s evidence to be adduced as an expert is not comparable to the acceptance of the evidence of Lau Tung-fai.

22.  The third ground related to the fact that the plaintiff had not proved that the bulk of the yarn retained at Full Million Limited was as good as the production sample.  This had not been raised in the defence and was not an issue of the trial. 

23.  The fourth ground was that the dyeing process could affect the quality of the yarn.  This was not raised in the trial as an issue.  There was no expert evidence given of that in the trial.  In my view, the defendant’s solicitor’s submission on this point is simply not a relevant consideration for the reasons aforesaid. 

24.  Having considered all the grounds in the perfected grounds of appeal, I find that there is no basis for granting leave to appeal, having regard to the test that has been cited in the authority Ma Bik Yung.  I therefore dismiss the application.

25.  So I grant costs of the application to the plaintiff assessed on the gross sum basis at $10,000.