SUN CHEONG CONSTRUCTION CO LTD v. THE INCORPORATED OWNERS OF KING FU, HO FU, KI FU & KA FU BUILDINGS

CAMP 22/2019 AND CACV 67/2019

[2019] HKCA 167

CAMP 22/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 22 OF 2019

(ON AN INTENDED APPEAL FROM HCCT NO 27 OF 2010)

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AND

CACV 67/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 67 OF 2019

(ON APPEAL FROM HCCT NO 27 OF 2010)

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(Heard together)

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REASONS FOR JUDGMENT
AND DECISION ON COSTS

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Hon Kwan JA (giving the reasons for judgment and decision on costs of the Court):

1.  This is the rolled-up hearing of an application for leave to appeal, and, if leave be granted, the hearing of the appeal proper. This course is taken as the trial of the action in the Construction List is to take place on 13 February 2019. The question we are concerned with relates to whether nine reports prepared by Wong & Cheng Consulting Engineers Limited between August 2009 and October 2013 (“the 9 Reports”) should be excluded as inadmissible evidence.

2.  In this court, Mr Gary Lam for the defendant incorporated owners (“the IOs”) abandoned his stance below and conceded that the 9 Reports contained expert evidence.  The only question is whether leave to adduce the 9 Reports has been granted under the order made on 26 November 2015 by Mimmie Chan J (“the 2015 Order”), or whether separate leave is required before the defendant’s expert witness Dr Sammy Yin Nin Chan is permitted to refer to and rely on the 9 Reports in the expert report he prepared in February 2017 pursuant to the 2015 Order.

3.  By the 2015 Order, leave was granted for each party to adduce expert evidence on defects, being one expert in structural engineering and one expert in infrared thermography.  The experts in each subject were to answer the following specific questions on defects:

“(i) Has the Plaintiff [the Contractor] performed the work set out in items 1 and 2 of Appendix B to the Amended Defence and Counterclaim (“DCC”)? If so, what are the extents of outstanding works (if any)?

(ii) For each of the items of work referred to in items 3 - 7 of Appendix B to DCC, is the work defective? If so, what is the extent of the defective work?

(iii) If the work referred to in (ii) above is defective, what is the appropriate and reasonable method of rectification and the extent of such rectification?”

4.  Dr Chan is the managing director of Wong & Cheng.  In his February 2017 report, he answered the specific questions on defects by reference to and on the basis of the 9 Reports.  In his witness statement dated 22 February 2016, he mentioned that between June 2009 and October 2013, Wong & Cheng was engaged by the IOs to carry out various inspections of the Buildings and he had “prepared and signed a total of 10 reports”, which he listed out and the 9 Reports were among them.  The 9 Reports were disclosed to the plaintiff through the witness statement of Chang Zhong Kai Kenneth dated 26 February 2016 filed on behalf of the IOs.  As it transpired, of the 9 Reports, only four of them bore the signature of Dr Chan.

5.  The judge was not made aware of the existence of the 9 Reports at the time the parties sought directions for expert evidence in November 2015.  The plaintiff was provided with a copy of the first of the 9 reports (dated August 2009) but not the others until they were disclosed in February 2016.  Understandably, the judge was “surprised and somewhat dismayed” by the fact that the IOs and their legal advisers had chosen to withhold from the court and the plaintiff at the time the 2015 Order was made that the 9 Reports had been compiled and intended to be used by the IOs as expert evidence at the trial.

6.  The plaintiff issued a summons belatedly on 24 December 2018 seeking to have the 9 Reports excluded as inadmissible evidence, on the basis that no leave to adduce the expert evidence contained therein has been obtained.

7.  By her decision on 28 January 2019, the judge granted this application and ordered the IOs to pay the plaintiff’s costs of the summons.  The IOs sought leave to appeal from the Court of Appeal directly as there is insufficient time to seek leave to appeal before the judge owing to the imminent trial.

8.  The judge noted that under the 2015 Order, leave was granted for Dr Chan to be appointed as the IOs’ expert on structural engineering.  There has never been any leave granted to the IOs to adduce any other expert evidence of Wong & Cheng, or any other engineer of Wong & Cheng, on structural engineering or on infrared thermography, and Wong & Cheng as a limited company cannot have any expertise or specialist knowledge to proffer as expert evidence.

9.  The judge went through the 9 reports and observed that they stated that Wong & Cheng was engaged by the IOs to submit an assessment report on the buildings; that unnamed engineers of Wong & Cheng carried out hammer tapping tests and results of the tests were set out; that Dr Chan did not specify the relevant experience of the personnel who carried out the tests, the detailed methodology employed, or the manner of analysis of the test results; and that Dr Chan in the February 2017 report made a “complete acceptance of and reliance on the findings and conclusions made in the earlier report” without stating how the data of the hammer tapping tests results were analysed.  Hence, the judge was critical of Dr Chan’s conclusions in the February 2017 report.

10.  It seems to us that the judge might well have been distracted by the IOs’ contention that the 9 Reports did not contain expert evidence.  It is no longer disputed that where an expert is drawing an inference from facts, on the basis of his expertise, specialist knowledge and experience, that is part of his expert evidence and leave to adduce such evidence is required.  The hammer tapping tests carried out by the workers of Wong & Cheng required specialist skills and knowledge, and evidence relating to the test results is clearly expert evidence.  Given the nature and extent of the work involved, we think it would suffice in respect of each of the tests carried out that there is evidence from a witness who had personal involvement in the process and could speak to the methodology deployed and the collation of the results.

11.  The judge’s criticism about Dr Chan’s expert conclusion in the February 2017 report goes to the quality and weight of his evidence.  We are here concerned with admissibility.  It is apparent from the February 2017 report that he had some involvement in the tests carried out and the preparation of the 9 Reports.  We do not accept the submission made on behalf of the plaintiff that his involvement was only from late 2015 or early 2016 when he was commissioned by the solicitors for the IOs to be a structural engineering expert witness to answer the specific questions under the 2015 Order.

12.  The relevant references in February 2017 report showing Dr Chan’s earlier involvement in relation to the earlier tests are as follows:

(1) August 2009 report

“According to the result of the hammer tapping test carried out under my supervision between 3 and 14 July 2009 … as recorded in my assessment report issued in August 2009 …” (§6.3.1)

(2) December 2009 report

“According to the Assessment Report … issued by Wong & Cheng in December 2009 … of which the inspection and reporting were carried out under my supervision …” (§4.1.3)

“According to the findings of the in-situ examination recorded in the Assessment Report … issued by Wong & Cheng in December 2009 …, defective concrete was identified in 145 locations … by hammer tapping survey within the random selected elevation … during the survey carried out between October and November 2009 under my supervision.” (§5.1.7)

(3) March 2010 report

“According to my on-site investigation as recorded in the Assessment Report … issued by Wong & Cheng in March 2010 … hollow ceramic tiles were identified by hammer tapping test …” (§5.2.2)

(4) May 2010 report

“According to the findings of my on-site examination (by both visual inspection and water test) as recorded in the Assessment Report … issued by Wong & Cheng in May 2010 …” (§5.3.3)

(5) July 2010 report

“According to the result of my on-site examination as recorded in the Assessment Report … issued by Wong & Cheng in July 2010 … hollow concrete rendering/finishing were identified by hammer tapping test …” (§5.2.3)

(6) June 2012 report

“According to the result of the condition survey as recorded in the Condition Survey Report … prepared and issued by Wong & Cheng in June 2012 … under my supervision …” (§5.3.4)

(7) July 2012 report

“According to the Condition Survey Report … issued by Wong & Cheng in July 2012 … which was prepared under my supervision …” (§4.2.4)

“According to the in-situ survey recorded in the Condition Survey Report … issued by Wong & Cheng in July 2012 … which was prepared under my supervision …” (§5.1.6)

“According to my assessment report issued in July 2012, severe defects such as crack, concrete spalling/spalling with exposed reinforcing bars were observed … during my inspection.” (§6.2.2)

“I noticed that no repair work appeared to have been carried out … during my inspection.” (§6.2.2)

13.  In light of Dr Chan’s personal involvement in the previous investigations and inspections and the preparation of the 9 Reports, we are of the view that his expert evidence concerning the previous inspections and hammer tapping tests contained in the 9 Reports is admissible under the 2015 Order and no separate leave is required.  The judge has erred in law in holding otherwise.

14.  In the August 2009 report, reference was made to the infrared testing carried out by a third party Forwin.  Infrared thermography is not within Dr Chan’s expertise.  Mr Lam accepted that leave should be sought to adduce such evidence and he will not seek to rely on those parts of the August 2009 report relating to the infrared testing carried out by Forwin.

15.  We indicated to Mr Lam at the outset we do not think his other ground of appeal (on the premise that separate leave is required to adduce the 9 Reports, under the limb of “where all parties agree” in Order 38 rule 36(1)) reasonably arguable and declined to grant leave to appeal for this ground.

16.  For the above reasons, we gave leave to appeal in respect of the first ground of appeal and, treating the hearing as the appeal proper, allowed the appeal of the IOs.  We set aside the judge’s order and replace it with an order that the 9 Reports are admissible as expert evidence under the 2015 Order save and except for the following parts in the August 2009 report: page 2, last 2 paragraphs; paragraphs 2.1.2, 2.2.2, 2.3.2 and 2.4.2; page 3, first paragraph; and Annex III.

17.  We have heard arguments on costs.  We do not propose to disturb the judge’s order awarding costs of the application to the plaintiff, because, as we have mentioned, the judge would appear to have been side‑tracked by a bad point taken up by the IOs and we are given to understand that that took up much time in the hearing below.  For the costs of the leave application and the appeal, we see no reason to depart from the usual rule that costs should follow the event.  We order the plaintiff to pay the IOs the costs of the leave application and appeal.