THE LIQUIDATOR OF WING FAI CONSTRUCTION CO LTD (IN LIQUIDATION) v. YIP KWONG ROBERT AND ANOTHER

HCCW 735/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 735 OF 2002

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REASONS FOR RULING

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1.  On Day 9 of the trial, towards the close of the applicant’s case, I heard argument between the applicant and the 2^nd respondent about the admissibility of certain hearsay evidence, being essentially the statements of Ms Ip Ngai Man Julia and Mr Chim Kam Fai made to the Hong Kong Police and, additionally in the case of Mr Chim, the transcript of his interview by the staff of the liquidators of Wing Fai Construction Co Ltd. Although under s 47(2)(b) of the Evidence Ordinance (Cap 8) the decision could be made at the conclusion of the proceedings, ie at the time of judgment, I was urged by Mr Barlow SC to determine the matter then. I gave a ruling declining to exclude the evidence against the 2^nd respondent, with reasons to be given later. These are my reasons.

2.  On behalf of the 2^nd respondent, Mr Barlow SC referred to High Fashion Garments Co Ltd v Ng Siu Tong [2004] 1 HKLRD 928 and Cheung Wei Man Vivien v Centaline Property Agency Ltd (unrep, HCA 286/2000, 25 September 2003).  Both cases concerned the admission as hearsay evidence of an affirmation made in the proceedings, which as such was a document brought into existence by the relevant party solely for the purpose of the action.  The rule governing such an application is Order 38 rule 2 of the Rules of High Court (Cap 4A).  It was held that s 47 of the Evidence Ordinance was not to be used to circumvent the requirements and principles under Order 38 rule 2.

3.  The issue in the present case does not relate to any affirmation made in the proceedings.  There were indeed affirmations made by Mr Chim which were listed in the hearsay notice and a summons was belatedly issued by the applicant to adduce them as evidence under Order 38 rule 2 instead, but that application was later withdrawn (and with it, any attempt to rely on those affirmations).  We were here concerned instead only with the statements made by Mr Chim and Ms Julia Ip to the police and, in the case of Mr Chim, to the Liquidator’s staff at an interview in November 2002.

4.  By s 47 of the Evidence Ordinance the court is required, in civil proceedings, not to exclude evidence on the ground that it is hearsay unless it is objected to and “the court is satisfied, having regard to the circumstances of the case, that the exclusion of the evidence is not prejudicial to the interests of justice” (s 47(1)(b)).  The 1^st and 3^rd respondents had not objected to the admission of the evidence.

5.  Under Order 38 rule 21, where a party tenders a statement of a person as hearsay evidence without calling him, the court may allow other parties to call and cross‑examine that person.  None of the respondents had applied to call Mr Chim or Ms Julia Ip for cross‑examination under that rule.  I do not say that in every case a hearsay statement should be held admissible simply because the other side has not applied for cross‑examination of the maker of the statement, but it is part of the circumstances that I may take into account.  In fact I was told by counsel that Mr Chim could not be found by either side and so no subpoena could be served on him.  As regards Ms Julia Ip there was no direct explanation why she had not been called, though the applicant would raise no objection if she was to be called by the 2^nd respondent for cross‑examination.  Mr Barlow SC said she was in Hong Kong but Ms Chan SC was not in a position to confirm it.  Ms Chan SC submitted that the evidence of Ms Julia Ip was mainly relevant for establishing the applicant’s case as against the 1^st and 3^rd respondents, who had not made the same admissions as the 2^nd respondent. Although both Mr Chim and Ms Ip had given assistance to the liquidators, that happened in 2004.  The latest contact between the liquidators and Mr Chim that Mr Barlow SC could point to was in 2008.  The hearsay statements in dispute here had been with the 2^nd respondent for a long time, but (with the exception of the interview of Mr Chim) only came into the applicant’s possession two months before the trial, in August 2016. 

6.  I am mindful that serious allegations are being made against the respondents including allegations of fraud, and that in such cases the court will be reluctant to act on evidence untested by cross‑examination: see In re Smith and Fawcett Ltd [1942] Ch 304, 308.  But these concerns can in my view adequately be dealt with in the evaluation of the evidence, attributing such weight to the evidence in question as may be appropriate taking into account all the relevant factors including those set out in s 49 of the Evidence Ordinance.  In all the circumstances I was not satisfied that I should exercise my discretion to exclude the evidence altogether at this stage.  The question of weight of course looms large.