LUAN GANG v. SIMPSON MARINE LTD

HCA 107/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 107 OF 2011

____________

AND

HCAJ 171/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 171 OF 2011

____________

____________

(Consolidated pursuant to the Order of the
Honourable Mr Justice Reyes dated 1^st June 2012)

_______________

D E C I S I O N

_______________

Introduction

1. This is an application by Luan Gang, the Plaintiff in the consolidated action, and Offtech International Limited (“Offtech”), the 2^nd Defendant by counterclaim, for an order that Mr Luan’s evidence at trial be given by video link.  Mr Luan is the sole shareholder and director of Offtech.

2. The underlying claim is in relation to the purchase of a yacht by Mr Luan from the Defendant.  Mr Luan complained of defects in the yacht and misrepresentations made by the Defendant’s employees.  He sought to rescind the purchase agreement and refund of the purchase price that he had paid.  It is common ground that Mr Luan is an important witness for the Plaintiff and his credibility will be in issue. 

3. The summons for the present application was issued only on 21 August 2013.  The trial, scheduled for 6 days, is due to commence on 3 September 2013.  There was no explanation from Mr Luan as to why the application was made at such a late stage.  In fact, there was no affidavit evidence from Mr Luan at all – the affirmation in support of the present application was made by his solicitor Mr Ho Chun Ki (“Ho Affirmation”).

4. According to the Ho Affirmation, Mr Luan is now 50 years old.  He is a PRC resident but moved from Hong Kong to the USA in November 2010.  He is now residing in Houston, Texas. He has been receiving psychiatric treatment by Dr Xiaoqing S Liu since February 2011.  

5. A total of three medical certificates by Dr Xiaoqing S Liu have been submitted to this court for consideration.  However, given the dates of the first two medical certificates ie March 2011 and January 2012, I would only treat them as showing Mr Luan’s medical history.  The latest one was dated 15 August 2013. According to this one-page certificate, Mr Luan has been diagnosed with Bipolar Disorder and Post-traumatic Stress Disorder.  He continues to have morning anxiety and panic attacks especially when he hears unpleasant news or has to deal with stressful situations.  He needs to follow up with Dr Liu on a monthly basis for medical adjustments and also visits a psychotherapist weekly.  In the opinion of Dr Liu, Mr Luan is not suitable to travel during the next 3 months.

Unexplained and inordinate delay

6. It is well-known that, post CJR, a late interlocutory application “may be dismissed on the basis of delay alone”: PD 5.2 at [34].

7. The issue of delay has been expressly addressed in two recent Hong Kong decisions.  In Li Xiao Yun v China Gas Holdings Limited unrep CACV 38/2013, 11 March 2013, the Court of Appeal dismissed an appeal against the trial judge’s refusal of a last minute pre-trial application (to add new defendants and amend the pleadings) on the ground of delay and that the trial date would very likely be derailed.  Lam JA (as he then was), giving the reasons of the Court (Lam JA, Bharwaney and McWalters JJ) stated at [18]:

“… Last minute pre-trial applications also disrupt the preparation for the trial on the part of a trial judge in terms of reading into the case. Instead of getting himself or herself familiar with the issues that have to be tackled at the trial, the judge would have to divert attention and spend time and efforts on such applications. Thus, such practice has to be discouraged and, unless there are good justifications, the unsuccessful appellant should normally be expected to face an order for indemnity costs.” (emphasis added)

8. In Waddington Limited v Chan Chun Hoo Thomas unrep HCA 3291/2003, 7 May 2013, Lok DHCJ repeated the warning that late applications can be dismissed on the basis of delay alone in accordance with paragraph 34 of PD 5.2, and concluded at [51] and [53]:

“51. … Apart from the prejudice likely to be caused to the parties by such late applications including the possible adjournment of the trial, there is serious disruption to the court diary as the court has to struggle to find some time during the limited time before the trial to hear the applications.

…

53. … Unless there are exceptional circumstances and there are good reasons for the delay, one should not expect the courts to grant any late applications taken out shortly before the PTR.” (emphasis added)

9. The sentiments expressed by Lok DHCJ are all the more compelling in the present case when the application is one which was taken out shortly before trial, rather than before a PTR.  As I said earlier, there was no explanation whatsoever as to why the application was made at such a late stage – the parties were first given notice of the trial date in January this year. 

10. In my view, the delay in the present case is both inordinate and wholly inexcusable.  Mr Luan’s approach is particularly deplorable given that there is no attempt by him to explain the delay.  The lateness of the application also means that there is no reasonable opportunity for the Defendant to examine Mr Luan by its own medical expert.  As a result, the medical evidence in this application is completely one-sided and that is a real and substantial prejudice to the Defendant.  On the ground of delay alone, I would be inclined to dismiss the application.  But there is more.

Whether the medical certificates are admissible in evidence

11. The Rules of the High Court provide that an expert report is inadmissible unless it contains: (a) a statement of truth; and (b) a declaration of duty to the Court.  In respect of statements of truth, RHC Order 38, r 37A states:

“An expert report disclosed under these rules must be verified by a statement of truth in accordance with Order 41A.”

12. RHC Order 41A, r 5(2) provides that the form of the statement of truth verifying an expert report is as follows:

“I believe that the facts stated in this [name document being verified] are true and (if applicable) the opinion expressed in it is honestly held.”

13. Lastly, RHC Order 41A, r 7 provides that the failure to verify the expert report by a statement of truth renders the report inadmissible.

14. In respect of declarations of duty to the Court, RHC Order 38, r 37C (1) states:

“(1) An expert report disclosed under these rules is not admissible in evidence unless the report contains a declaration by the expert witness that -

(a) he has read the code of conduct set out in Appendix D and agrees to be bound by it;

(b) he understands his duty to the Court; and

(c)   he has complied with and will continue to comply with that duty.” 

15. In the present case, all the three medical certificates are defective because they fail to meet the criteria for admissibility in both RHC O 38 rr 37A and 37C – none of them contain a statement of truth in the form required by RHC O 41A, r 5 (2) or a declaration of duty to the Court.  In fact, as submitted by Mr Alder, there is no evidence that Dr Liu has ever been provided with a copy of the code of conduct as required by RHC O 38 r 37B, or that Dr Liu even knew her certificate was going to be placed before a court of law and that she was under a duty to the court.

16. In these circumstances, I would hold that none of the three medical certificates are admissible for failing to comply with the criteria under both RHC O 38 rr 37A and 37C.

Principles on giving evidence by Video Conferencing Facilities (VCF)

17. I will go on to examine the legal principles governing the giving of evidence by VCF and apply them to the present case. 

18. In Re Chow Kam Fai, David [2004] 2 HKLRD 260, Rogers VP established the following propositions on the giving of evidence by VCF:

a. “…the giving of evidence by VCF was an exception rather than the rule and that it would be a matter of privilege accorded to the respondent and not a matter of right for him to be allowed to do so” (at [16]);

b. “The starting point must be that proceedings are conducted in court” (at [17]);

c. “…the atmosphere of a court is highly important as regards the taking of evidence.  The solemnity of court proceedings and its atmosphere is something which, I have no doubt, plays an important role in the way justice is administered.” (at [18]);

d. “There is no doubt that VCF is a highly useful tool.  It must be a question of judgment in each case as to whether VCF should be used for the taking of evidence.  No doubt, on those occasions when the witness is giving evidence that is technical or purely factual, without important issues as to credibility, a court may be more disposed to allow evidence to be given by the use of VCF.  Questions of cost and convenience are no doubt also important considerations that the court will have to weigh in deciding whether to allow evidence to be given using VCF.  But, first and foremost, it seems to me that the Judge was correct in his approach that a party wishing to give evidence using VCF should establish a sound reason why that privilege should be accorded.” (at [19]) (emphasis added)

19. The decision in Chow Kam Fai was applied in Raj Kumar Mahajan v HCL Technologies (Hong Kong) Ltd [2010] 5 HKLRD 119 in which the Court of Appeal upheld the decision of the trial judge (HCA1510/2004, 15 September 2010, L Chan DHCJ) who rejected an application by the defendant to give evidence by VCF on the basis of his medical condition. 

20. Dismissing the appeal, Rogers VP accepted that VCF was a useful tool in situations where the credibility of a witness was not at stake, but also stressed the importance of the solemnity of court proceedings (at [7] – [8]):

“7. As far as I am concerned the solemnity of the court is most important. In Hong Kong it is important that the members of the court, both the judges and counsel appearing, are properly attired. It is important that the court proceedings are carried on in court in the way that we do. It does give a solemnity to the occasion. One only has to observe parties and witnesses coming to court to observe their demeanour. It does have an impact. Giving evidence via a television link, in my view, dispels part of that. The place for a judge to sit, for witnesses to give evidence and for submissions to be made, is in court.

8. This so-called VCF system, which Hong Kong does have, and, indeed, the Technology Court is frequently used for it, is a very useful tool but, as I said previously, it is a tool which should be used with some care.  If a witness is not giving evidence that is likely to be attacked on the basis of credibility, it may be important.  If, for example, one has technical evidence, perhaps from a well-known and busy physician or surgeon in a foreign country, who has many other patients under his care and many other considerations and is giving highly technical evidence, it may well be important and useful to have his evidence by video link because otherwise one may not have it at all.  But these are very different circumstances.”

21. The most recent Hong Kong decision on VCF is that of the Court of Appeal in Daimler AG v Leiduck, Herbert Heinz Horst [2013] 2 HKLRD 822which illustrates the kind of circumstances in which a VCF application ought to be granted.  In that case, the defendant, who was in his 80s and lived in Germany in a home for the aged with round the clock medical care, produced evidence from two of his doctors, one of over ten years, affirming (at [7]) that the defendant suffered from:

“the following cardiac problems: severe coronary heart disease, status post anterior and posterior myocardial wall infarction, status post multiple coronary artery stent-implantations with no further options for any additional revascularisation procedure, chronic heart failure, recurrent cardiac arrhythmia, status post pacemaker implantation, chronic cardiac failure and angina pectoris.”

22. The medical evidence further showed that the defendant was virtually blind and not in a position to undertake travel to Hong Kong because “a journey to Hong Kong by air, or by other means, would be life-threatening”.

23. Barma JA (Fok JA agreeing) granted the VCF application holding that at [19] the “uncontradicted medical evidence is to the effect that it would be life-threatening for the 1^st defendant to have to travel to Hong Kong”. In allowing the application, the Court of Appeal accepted the earlier decisions outlined above but distinguished them, highlighting, at [18], that it was not impossible for the witnesses in those cases to travel to Hong Kong.

24. In the present case, even accepting Dr Liu’s opinion at its face value, Mr Luan is only said to be “not suitable to travel”. What should have been, but is not, stated in Dr Liu’s certificate is her assessment of the potential consequences to Mr Luan if he does travel to Hong Kong.  Further, if Dr Liu were of the view that Mr Luan is medically unfit to travel to Hong Kong, she should have said so in no uncertain terms and with reasons.  Instead, Dr Liu has chosen the rather vague description of “not suitable to travel” – a phrase which, for all we know, could well be merely a counsel of perfection.  In these circumstances, I am far from satisfied the medical evidence comes even close to establishing that Mr Luan is precluded from coming to Hong Kong by a medical condition: at most, as Mr Alder put it, the evidence merely showed that Mr Luan has a psychiatric condition which is being managed by medication, and which renders travelling unsuitable, not impossible.

25. At the end of the day, the question for this court is: what course is best calculated to achieve a just result for both parties: Daimler AG v Leiduck at [28].  On the facts of the present case, I do not think Mr Luan has made out a valid case that it is just for him to testify by way of video link instead of in court.

Disposition

26. For the above reasons, I would dismiss the application. 

27. I would also make an order nisi that Mr Luan and Offtech are to bear the Defendant’s costs, to be taxed if not agreed, on an indemnity basis and paid forthwith, with certificate for counsel.