PACIFIC BULK SUPRAMAX CO LTD v. WONG MAN KAM PATRICK AND ANOTHER

HCMP 1632/2021

[2023] HKCFI 1973

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLEANOUS PROCEEDINGS NO 1632 OF 2021

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REASONS FOR DECISION AND

SUMMARY ASSESSMENT OF COSTS

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A.  INTRODUCTION

1.  The Plaintiff (“PB”) applies to commit the Defendants (“Wong” and “Leung” respectively) for contempt of Court. The trial was set down to commence on 26 July 2023 with 6 days reserved.

2.  Wong was only advised on 14 June 2023 that the surgery would lead to his being unfit to fly for 2 months. By then his surgery had already been rescheduled to 28 June.

3.  In view of the fairly detailed medical evidence produced by Wong, the Plaintiff has fairly accepted that the medical emergency was not entirely within the Defendants’ control.

4.  The Defendants lost no time in coming to Court for this application:

(1)  For leave to Wong to give evidence at the trial by video conferencing facilities (“VCF”) due to the fact of Wong’s unfitness to travel;

(2)  As a fallback position, to have the trial proceed as scheduled but adjourned part-heard after all other witnesses have testified and for a further 3 days to be fixed for Wong to give evidence and for closing submission; or

(3)  As a last resort, for the trial to be vacated and re-fixed in consultation with counsel’s diaries with 6 days reserved.

5.  After hearing the parties, I chose the 3^rd option. I also ordered that costs arising from the adjournment be paid by the Defendants to PB. Here are my reasons.

B.  LEGAL PRINCIPLES IN RELATION TO VCF APPLICATIONS

6.  The question of whether or not to make an order permitting a party to give his evidence by VCF is a question of case management: see Daimler AG v Leiduck [2013] 2 HKLRD 822 at §11, CA.

7.  The general factors relevant to an application to give evidence by VCF have been set out in the oft-cited case Re Nobility School Ltd [2020] HKCFI 891 at §9, Anthony Chan J:

“(1) The giving of evidence by video conferencing facilities (“VCF”) is an exception;

(2) The starting point is that proceedings are conducted in court. I would add that this is more important when it comes to a trial;

(3) Sound reason is required to justify a departure from the starting point;

(4) The solemnity of court proceedings and its atmosphere is highly important in the taking of evidence;

(5) The court may be more disposed to exercise its discretion to allow evidence by VCF in respect of technical or purely factual evidence which involves no serious issue on credibility or relatively unimportant evidence;

(6) Where the credibility of the witness is seriously contested, it is important for the witness to be examined under the solemn atmosphere of the court;

(7) Costs and convenience may be important considerations which the court will have to weigh in the determination of the application;

(8) Ultimately, it is a matter of judgment of the court choosing the course best calculated to achieve a just result by taking into account all the material considerations, including whether the witness is capable of attending the proceedings, any prejudice to the other party, the Underlying Objectives, any delay to the proceedings and practical considerations like the availability of the facilities (see Practice Direction 29).”

8.  Whilst paying regard to the solemnity of court proceedings and the Court’s atmosphere in the taking of evidence, the court should, at the same time, not lose sight of the actual situation and the advancement in technologies. Since the outbreak of COVID‑19 in the beginning of 2020, courts in this jurisdiction has heard and tried cases through VCF with no compromise to the quality of justice. Seto Sha Li v Lai Jin Tong [2021] HKCFI 3561 at §4, Recorder William Wong SC.

9.  Where the party or witness gives important or crucial evidence, and refusing the VCF application would stifle the applicant’s claim/defence, this is in fact a factor in favour of granting a VCF application: see Leiduck at §23. CTRISKS Rating Ltd v Chan Pik Kwan [2021] HKCFI 2619 was a case involving serious allegations of breach of contractual and fiduciary duties. Anthony Chan J granted a VCF application made 11 days before trial, where 2 key witnesses (whose evidence was seriously contested) who went on a business trip to the UK had their plan to attend the trial undermined by heightened COVID-19 restrictions. It was said at §7 that having the trial adjourned was “highly undesirable for obvious reasons”.

10.  However, in ESports Business Development Ltd v Wong Chun Yee Christopher [2022] HKCFI 2627 at §§25-26, DHCJ H Au Yeung: highlighted the potential of creating injustice in forum of the witness who gives evidence by VCF:

“25. … the usage of VCF may be an advantage to the witness, because any problem in the internet connection (which may arise at any time and from time to time) may interrupt the transmission of the video signal. The screen may be “freezed” during the cross-examination as a result. The questions or answers asked/given may be “lost” in the process. This may deprive the Court and the examiner the chance to observe the immediate reaction of the witness when certain questions are asked. Such sudden loss of signal may also lead to suspension of the Court proceedings, and this in turn may give the witness a longer time to think about his/her answer to the question just asked by the examiner. If the witness alleges that he/she cannot hear a question clearly, it is also very difficult if not impossible to verify whether such an assertion is real, and whether he/she is just buying time to figure out what to say in response to a question.

26. Furthermore, giving evidence at any place other than the Court room would also tend to reduce the formality of the Court proceedings. This will create an injustice situation in favour of the witness who gives evidence by VCF.” (underline added)

11.  Closely related are applications to postpone a trial (a milestone date) due to the unavailability of witnesses. The factors to be considered have been set out Arko Ship Leasing Ltd v Winsmart International Shipping Ltd [2013] 2 HKLRD 121 at §14, as per G Lam J (as he then was):

“(1) What is the nature of the proceedings? What is at stake to the parties, in particular to the [parties] who seek the adjournment?

(2) Would the relevant witnesses definitely not be available to give evidence in any manner — for example, if a witness is unable to come to Hong Kong, is it possible nevertheless to receive his evidence via videolink?

(3) What is the nature of the difficulty preventing the witnesses from attending, and is the applicant responsible for creating that difficulty and if so to what extent?

(4) What is the nature of the evidence each relevant witness is intended to be called to give? Is he the only possible source of such evidence?

(5) Has the party seeking the adjournment made efforts to locate other persons who may be able to stand in to give similar evidence?

(6) Will the adjournment be likely to address the problem faced by the applicant?

(7) What is the risk of prejudice or other disadvantage to other parties if the adjournment is granted?

(8) The application must also be viewed in terms of the wider implications on the administration of justice. In particular, I have in mind the public interest in the efficient despatch of the court’s business.” (emphasis added)

12.  Where a party or a necessary and important witness is prevented by illness from attending the trial and the judge is satisfied of the fact of his illness, the materiality and importance of his evidence and that the granting of an adjournment will not cause an injustice to the other party which cannot be reduced by costs, it is the duty of the judge to grant an adjournment. It may be on terms, and failure on his part to do so constitutes a miscarriage of justice. The onus is on the applicant for an adjournment to prove the need for such an adjournment. See Lam Yin Pok Bosco v Dr Chan Yee Shing (unrep., HCMP 2256/2012, 2 November 2012) at §§9 and 11, as per Fok JA (as he then was).

13.  In Leiduck at §§19-21, one of the factors leading to the Court of Appeal granting the VCF application was that 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”.

14.  When applying these principles, the Court should be bear in mind the nature of the proceedings before it and bear in mind that any decision should aim at achieving the ends of justice.

B1.  Option 1 – Wong to give evidence by VCF

15.  The Defendants submitted that there would be little to no prejudice to PB because:

(1)  Technological advances and judicial experience have caused judges and counsel to be just as effective in cross-examining witnesses via VCF without compromise to the quality of justice;

(2)  Any concerns about the integrity of Wong’s evidence could be dealt with by having PB’s legal representatives in London present at the venue. There was no apparent risk of improper corroboration or tailoring of the evidence of the defence witnesses as the only 2 witnesses would be Wong and Leung themselves; and

(3)  PB indicated that they would unilaterally engage live transcription services so it would have access to transcripts of Wong’s oral evidence.

16.  In my view, contempt proceedings, though civil in nature, seeks to punish disobedience to the Court and not a party. There is no better example of a proceeding which calls for the physical attendance of witnesses to be examined under the solemn atmosphere of the court. It is all the more so since Wong is not just a witness but the alleged contemnor. His evidence is adopted by Leung, the other alleged contemnor. It will not be an exaggeration to say that the Court’s findings on credibility of Wong would have a direct bearing on Leung’s liability as well.

17.  In this case, PB alleges that Wong and Leung have knowingly put forth multiple false undertakings based on false premises to the Court in the prior underlying proceedings in HCMP 1190/2020. Accordingly, it would be the subjective knowledge, intention and motive of Wong that would bear heavy weight in fixing his liability. Mr Chain SC and Mr Poon, counsel for PB, indicated that the honesty and credibility of Wong would be seriously challenged by way of cross-examination at the trial, which was expected to last for no less than one full day. The words of DHCJ H Au‑Yeung in Esports Business are particularly apt in the present case.

18.  The above facts also distinguished this case from the authorities cited above, which did not involve contempt proceedings and there was no allegation of fraud or dishonesty against the applicant for a hearing with VCF.

19.  The suggested venue of International Dispute Resolution Centre in London could not replicate the solemnity of the Court environment, in the context of contempt proceedings. The other technical measures referred to in §15(2) and (3) above could not allay the concerns of the Court, as expressed in Esports Business.

20.  Accordingly, giving evidence using VCF was not appropriate for this case. Wong has to attend court at the trial.

B2.  Option 2 – adjournment of the trial part-heard

21.  The Defendants’ good intentions of not wasting the Court’s time and costs of the parties were well appreciated. However, it was most undesirable to adjourn the trial part-heard in this case for the following reasons.

22.  The trial judge was on temporary appointment and is a Senior Counsel in active practice. It may create difficulty in refixing the second part of the trial in consultation with his and the 2 trial counsel’s diaries.

23.  A part-heard trial would make it more difficult for the judge and the parties to approach the case coherently. Having live transcription records would only aid in memory of the evidence but not the impression of the performance of the witnesses in the box to enable the Court to assess their overall credibility. PB would suffer greater prejudice than Wong because PB had to prove the case beyond reasonable doubt.

24.  Wong was to be the main witness. There was no point hearing Leung before him, as Leung’s main defence was in Wong’s affirmations.

25.  Given the importance of Wong’s credibility and honesty in this case, having an adjournment after other witnesses have given evidence may enhance the risk of witness’ tailoring of evidence.

26.  For the reasons given, I did not consider it appropriate to adjourn the trial part-heard.

B3.  Option 3 – refixing trial

27.  This was by far the best option. The adjournment would not be open-ended, as had happened in other cases during the pandemic. Wong would be available to testify in 2 months’ time to give evidence physically in Hong Kong. I therefore directed that the trial be refixed to no earlier than 1 September 2023 to cater for Wong’s need for recuperation and inability to fly to Hong Kong.

C.  COSTS

28.  The general principle is for the costs thrown away to be borne by the party who brought about the adjournment of the trial: Elijah Saatori v Raffles Medical Group (Hong Kong) Ltd, HCMP 3224/2016, 13 September 2017 at §45, Chu JA (as she then was).

29.  That would be the case even though the adjournment was not due to the “fault” of the applicant. In Lam Hon Keung Keith v Lam Chi Tat Anthony [2021] HKCFI 1282, §§15-16, the adjournment arose out of the death of the plaintiff, the primary witness who filed various witness statements in support of the plaintiff’s case. Wilson Chan J nevertheless ordered costs in favour of the defendant.

30.  As the adjournment of this case arose entirely out of the needs of Wong, although it was not his “fault” as such, the Defendants should bear the costs thrown away.

31.  In respect of costs for the summons, there was no justification for 2 fee earners. Further, without disrespect, “considering issues/strategy & internal meetings” and preparation of statement of costs cannot be charged on party-and-party basis. I summarily assess costs at $50,000.

32.  In respect of costs thrown away as a result of the adjournment, post hearing, this Court was informed that the new hearing dates have been fixed to start on 6 June 2024 to cater for the diary of the Defendants’ senior counsel. Whilst more time is needed to prepare for the trial than would have been the case with a shorter adjournment, I am not minded to grant the brief fees as part of the costs thrown away. This is because openings are in written form; and authorities can be re-used at the new trial dates. I would grant costs thrown away on the basis of a day’s refresher for 2 counsel. Once again there are non-chargeable items like preparation of statement of costs. I summarily assess costs thrown away at $92,000.

33.  I thank counsel for their assistance.