HONG KONG KAM LAN KOON LTD v. REALRAY INVESTMENTS LTD

HCA 15824/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 15824 OF 1999

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REASONS  FOR  RULINGS

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1.  On 9 April 2003, the Defendant in this action took out a summons under Order 39 Rule 1 seeking an order that a witness Mr Cheung Kung Wing be examined viva voce before a judge, the Registrar or an examiner.  The application was heard by Chu J and an order in the following terms was made on 17 April 2003,

“1. Cheung Kung Wing, a witness on behalf of the Defendant be forthwith examined viva voce on oath or affirmation before a Master on an early date to be fixed in consultation with Counsel’s diary but not earlier than 26 May 2003 with 5 days reserved;

2. …

3. Depositions taken at the examination be filed in the Registry of the High Court, and that office copies thereof may be read and given in evidence on the trial of this cause, saving all just exceptions, without any further proof of the absence of the said witness than the affidavit of the solicitor of the party using the same, as to his belief …”

2.  That order was in the same form as form No. 32 in Appendix A to the Rules of the High Court.  Order 1 Rule 9 provides that the forms in the Appendices shall be used where applicable with such variations as the circumstances of the particular case require.

3.  Pursuant to that order, Cheung Kung Wing was examined before the Registrar.  It was a lengthy process.  Altogether it took 12 days (although on some occasions, either no evidence was taken or proceedings were adjourned early due to health condition of Mr Cheung), starting on 26 May 2003 and ending on 15 December 2003.

4.  At the time when the order of Chu J was made, the 2^nd Defendant by Counterclaim had not yet been joined as a party to this action.  The summons for amendment of the Defence and Counterclaim joining the 2^nd Defendant was taken out on 9 May 2003 and leave for amendment was granted on 19 June 2003.  The matter is further complicated by the fact that the 2^nd Defendant is named in a representative capacity and the representation order was not made until 21 October 2003.  Mr Kwan appealed against that order.  The appeal was dismissed by Deputy Judge Saunders on 23 March 2004.  It is not very clear on the face of the pleadings as to what is the appropriate point in time to determine whether a person comes within the description “member of Kam Lan Koon, an unincorporated association”.  As canvassed during the course of arguments, there could be a number of possibilities,

(a)     the date when the alleged causes of action accrued : in this respect, there could be different dates for different causes of action;

(b)    the date when the 2^nd Defendant was joined as a party to the action;

(c)     the date when judgment is pronounced by the court.

Membership of Kam Lan Koon, assuming it still exists as an unincorporated association, may very well be different on these three dates.  The defence available to members at different point in time to the Counterclaim may also be different (see Roche v Sherrington [1982] 1 WLR 599).

5.  Notice to act was filed by Messrs Christine Koo & Ip on behalf of Mr Kwan on 3 July 2003.  Mr Kwan had already been involved in the depositions taking before the joinder as a representative of the Plaintiff.  Messrs Christine Koo & Ip were also acting on behalf of the Plaintiff.  However, it seems that no notice of the joinder has been given to any other members of the alleged unincorporated Kam Lan Koon.  No notice was given to them in respect of the application for representation order.  They were not even served with the amended Counterclaim.

6.  It can be noted that the taking of deposition straddled a long period and the joinder and representation order took place some time in between.

7.  At the trial of the action, Mr C H Chan intimated to the court that the Defendant intends to adduce the deposition as evidence.  Mr Chong indicated that the Plaintiff would not consent and the court had to be satisfied that the witness is unfit to attend trial.  Mr F Chan submitted that the 2^nd Defendant by Counterclaim was not a party to the deposition and the requirements under Order 38 Rule 9 were not satisfied.  In any event, he submitted that it would be unfair to admit the deposition as evidence against the 2^nd Defendant because the 2^nd Defendant had not had any opportunity to cross-examine Mr Cheung.  He also contended that the deposition could not be admitted as hearsay evidence against the 2^nd Defendant because the definition of hearsay evidence under Section 46 of the Evidence Ordinance excludes such evidence.

8.  The Defendant issued a summons on 4 October 2004 seeking to have the deposition admitted as evidence pursuant to Order 38 Rule 9 or alternatively as hearsay evidence.  Mr C H Chan indicated that the summons was taken out ex abundante cautela.  His primary contention was that the deposition had already been admitted as evidence by reason of the order of Chu J and there was no need on the part of the Defendant to seek another order under Order 38 Rule 9.

9.  After hearing very wide ranging submissions from the parties, I ruled on 14 October 2004 that the deposition shall be admitted as evidence against the Plaintiff pursuant to Order 38 Rule 9.  I also ruled that the deposition cannot be admitted under that rule against the 2^nd Defendant.  However, the same could be admitted as hearsay evidence against the 2^nd Defendant.  Upon further submissions, I also granted leave to the 2^nd Defendant to call Mr Cheung for cross-examination in certain limited areas through video-link facilities.  I now give reasons for these rulings.

10.  I shall first deal with Mr C H Chan’s primary contention, viz. whether the deposition has already been admitted as evidence at this trial by reason of the order of Chu J and the filing of the Affirmation of To Ka Man Karen, solicitor acting for the Defendant, on 20 July 2004.  He relied specifically on the last part of Paragraph 3 of that order, viz. “without any further proof of the absence of the said witness than the affidavit of the solicitor of the party using the same, as to his belief”.  It was submitted that the effect of this part of the order was that the court had directed that once such an affidavit was filed, the deposition would be admitted as evidence without any further order.

11.  The difficulty with that contention is that if one examines Order 39 Rule 1 and Order 38 Rule 9, a two-stage process is envisaged.  First, the party wishing to have a deposition should get an order for deposition to be taken.  If the court considers it appropriate, such an order would be made under Order 39 Rule 1.  Then deposition could be taken.  That is stage one.  Second, when the case comes on for trial, if a party so wishes, he could ask for the deposition to be admitted as evidence by reference to Order 38 Rule 9.  If there is disagreement between the parties, the court will have to apply the criteria set out in Rule 9 by reference to the material before it at the time of trial to decide on the admissibility of deposition.  That is stage two.

12.  It should be noted that a party who applied for deposition to be taken is not bound to put the deposition in as evidence at the trial.  It is up to him.  However, if he does not put it in, the other parties might apply to have the deposition put in as evidence.  But irrespective of the identity of the party making the application, the criteria in Order 38 Rule 9 must be satisfied before the deposition can be admitted as evidence.  Further, as mentioned, the court has to be satisfied by reference to the material currently before it in determining an application under Order 38 Rule 9.  A person who was unfit due to sickness at the time of an application under Order 39 Rule 1 may not be unfit by the time of a later application under Order 38 Rule 9.

13.  Mr C H Chan did not quarrel with this analysis.  However, he submitted that the court could make an order directing in advance that upon a solicitor filing an affidavit, the court will deem that the requirement under Order 38 Rule 9 satisfied and thus the deposition will then be admitted as evidence at the trial.  He further submitted that this is the effect of the last part of Paragraph 3 of the order of Chu J.

14.  Conceptually, if Mr C H Chan were correct in his contention, it means that the court had decided in advance that the requirement of Order 38 Rule 9 would be satisfied without even knowing whether a party and which party would seek to admit the deposition as evidence at the trial, what would be set out in the solicitor’s affirmation and most importantly what the opposite party would say about that application.  That seems to me to be contrary to one of the fundamental precepts in our legal system: the court should not decide a matter without first offering parties affected a fair opportunity to be heard.

15.  I am not suggesting that the court can never give directions as to the pre-conditions for the admission of a certain piece of evidence in advance of the evidence being tendered.  In fact, directions of such nature are generally given in requiring witness statements to be filed, reports of expert witness to be exchanged, documents to be disclosed.  I also imposed condition for admission of hearsay evidence well in advance of such hearsay evidence being actually tendered in High Fashion Garments v Ng Siu Tong [2003] 2 HKC 562.  But there is a difference between imposing pre-conditions for admission and the actual decision to admit the evidence.  In all those situations, the fulfillment of the conditions would not bar the opposite party from raising objection to the admissibility on other grounds which they have no prior chance to canvass.

16.  If one refers back to Paragraph 3 of the order of Chu J, it does not purport to rule that the requirement of Order 38 Rule 9 were satisfied once an affidavit from the solicitor is filed.  It only said that office copy of the deposition “may be read and given in evidence” “saving all just exceptions”.

17.  My view is supported by Fisher v CHT Ltd [1965] 1 WLR 1093.  Edmund Davies J held in that case that the reference to the reading of an office copy of the deposition at the trial in an order for examination is a wholly permissive provision and does no more than providing that office copy may be read.  In other words, it dispensed with the need of proving what had happened during the deposition by having evidence from the examiner.  But Mr C H Chan distinguished that case on the basis that the order for deposition in that case apparently did not contain wordings similar to the last part of paragraph 3 in Chu J’s order and nothing was done subsequent to the deposition by way of affidavit from a solicitor.  In the course of his submissions, Mr C H Chan asked rhetorically if that part of paragraph 3 was not intended to cater for proof of matters under Order 38 Rule 9 what purpose could it serve.

18.  Despite the diligence of counsel, they could not trace the origin of Form 32.  It was similar to Form 35 which was already there in Annual Practice 1932, that being the earliest edition of the White Book that counsel had access to.  Mr F Chan however referred this court to Seton, Forms of judgments and orders 7^th Edn (1912) at p. 112 which said,

“It is not proper to insert in the order for examination any words giving leave to give the depositions in evidence at the trial.”

Barton v North Staffordshire Railway (1887) 35 WR 536 was cited as authority for this proposition.  In that case Kay J gave a ruling to that effect.  His Lordship said before leave is given to use the evidence at the trial, it would be necessary to show that the witness was not capable of being examined.

19.  There is in fact some support for Mr C H Chan’s contention that the last part of Paragraph 3 is intended to deal with proof under Order 38 Rule 9.  Atkin’s Court Forms, Vol. 18 (1992 Issue) p. 466 n. 8 commented on this part of the standard form order.  It said “proof” in the form means “proof that the witness is dead, beyond the seas or unable from sickness or other infirmity to attend the trial”.  It further explained,

“The order may occasionally be made on other conditions as to the proof of the absence of the witness.  Thus, if there is a dispute as to that witness’s ability to attend, the court may make the order de bene esse (i.e. reserving this question for future consideration) and require the matter to be investigated thoroughly either at the trial or at some other stage.”

The footnote then set out an alternative form of order that can be used to achieve that.  Mr C H Chan therefore suggested that if the court used the standard form instead of the de bene esse form, the court chose to dispose of the issues under Order 38 Rule 9 instead of reserving the same.  I do not think it necessarily follows.  I note that the commentary at p. 385-6 of Atkin (in particular, footnote 15) suggested that this part of the prescribed form only “makes such an affidavit admissible to prove the condition precedent” under Order 38 Rule 9.  I think Barton v North Staffordshire Railway (1887) 35 WR 536 is still good law notwithstanding the wordings in Form 32.

20.  To address the concern outlined in Paragraph 14 above, Mr C H Chan submitted that the order being an interlocutory one, the court could still review the matter if there has been material change of circumstances in the meantime.  But he said the initiative lies with the party against whom the deposition is admitted to apply to court to set aside the order already made.  In the present circumstances, he informed this court that given that the issue had been raised, the Defendant would not take issue as to the absence of summons to set aside the last part of the order of Chu J and could deal with the merits of the matter under Order 38 Rule 9.

21.  Since I have heard full arguments on the point and it is a point of general application, I shall deal with it instead of leaving it to be resolved in the future.  As a matter of principle as well as authorities, I am of the view that the court could not prejudge whether an affidavit by a solicitor could satisfy the requirement under Order 38 Rule 9.  Much depends on the stance taken by the parties and the material circumstances disclosed by the evidence before the court when the issue has to be resolved, viz. at the time of trial.  At the most, at the time of making the order for examination, the court can say an affidavit of solicitor would be accepted as sufficient prima facie evidence if there is no evidence to the contrary.  Further, even if the opposing party does not file evidence, the court does not have the power to prevent him from making submissions if he wishes to contest the matter.  Hence, the order for examination cannot pre-empt the Order 38 Rule 9 issues and the parties against whom the deposition is admitted could challenge the same notwithstanding an order containing the last part of Paragraph 3 in Chu J’s order.

22.  I do not think it is correct to regard Chu J’s order as an advanced ruling on the Order 38 Rule 9 issues.  Having regard to the wordings of Paragraph 3 as a whole, it is only a permissive provision allowing an affidavit to be filed by a solicitor to be the prima facie evidence when the matter is not contentious.  I agree with Mr F Chan that the last part of Paragraph 3 probably derived from the decision of Beaufort v Crawshay (1866) LR 1 CP 699.  As such, it only dealt with the admissibility of a solicitor’s affidavit as proof.  If there is any dispute, the order could not be taken as having ruled on the same since Chu J could not tell whether there would be any dispute under Order 38 Rule 9 when the order was made.

23.  Once it is appreciated that the order of Chu J did not rule on any of the Order 38 Rule 9 issues, it follows that the burden is on the party who seeks to have the deposition admitted as evidence at the trial to show to this court that it is admissible under that rule.  The Defendant could satisfy that requirement by showing that the other parties consent.  Of course, in deciding whether to consent, the other parties should take into account the contents of the affidavit of the solicitor.  But if such consent is not forthcoming, the Defendant should seek a ruling from the trial judge.

24.  Although Mr C H Chan had mentioned about using the deposition during one of the pre-trial reviews, I do not recall the other parties having indicated categorically that they would consent.  Counsel have checked the official digital recordings as to what transpired at the pre-trial reviews and I was not referred to any clear intimation of consent by counsel for the other parties.

25.  Hence, I rule against Mr C H Chan on his primary contention.  The summons of 4 October 2004 is not otiose and in fact it is necessary.

26.  As regards the 2^nd Defendant by Counterclaim, there is an additional reason why Mr C H Chan’s primary stance is erroneous.  It is clear from the history of the case that the 2^nd Defendant by Counterclaim had not been a party to the summons of 9 April 2003 and he had not been heard before Chu J made the order of 17 April 2003.  After the 2^nd Defendant had been joined as a party to the action, the Defendant should have taken out a similar application against the 2^nd Defendant by Counterclaim.  But the Defendant did not do so.

27.  I do not accept Mr C H Chan’s submission that the order of Chu J automatically binds the 2^nd Defendant by Counterclaim after he was joined as a party.  He cited no authority for this proposition.  Taking evidence by deposition is an exception to the general rule under Order 38 Rule 1.  I see no reason why the 2^nd Defendant by Counterclaim should be deprived of any opportunity to be heard as to whether evidence should be taken by deposition and the manner in which the deposition is to be taken.  It is to be noted that in the present case, the deposition was taken before the Registrar instead of the trial judge.  That would certainly have a bearing on the trial judge’s assessment of the weight that could be placed on such deposition evidence.  The 2^nd Defendant by Counterclaim should have the opportunity to address the court as to the appropriateness of such a course if deposition were to be taken.  Hence, it is imperative that a summons under Order 39 Rule 1 should be taken out against the 2^nd Defendant if there is a possibility that deposition was to be used against him as deposition.

28.  I therefore conclude that the order of Chu J does not bind the 2^nd Defendant by Counterclaim.  It follows that Mr C H Chan’s primary stance cannot be sustained in any event as far as the 2^nd Defendant by Counterclaim is concerned.

29.  Mr C H Chan argued that because the 2^nd Defendant by Counterclaim was represented by the same firm of solicitors as the Plaintiff, notice given to that solicitor about the deposition should also constitute notice given to the 2^nd Defendant by Counterclaim, at least as regards notices after the joinder.  He referred this court to the 2^nd Affirmation of To Ka Man Karen to support this contention.  He submitted that the 2^nd Defendant by Counterclaim therefore had the opportunity to take part in the deposition and he did not do so at his own choice.  He also highlighted that counsel for the Plaintiff, Mr Chong, also acted for the 2^nd Defendant by Counterclaim in settling the Defence to Counterclaim on his behalf.  In such circumstances, he invited the court to exercise its discretion by reference to Order 2 Rule 1 to treat the failure to issue a summons under Order 39 Rule 1 against the 2^nd Defendant by Counterclaim as a mere irregularity.

30.  In an affirmation dated 5 October 2004, the solicitor acted for the Plaintiff and 2^nd Defendant by Counterclaim in 2003 explained that after the joinder, due to absence of invitation by the Defendant to the 2^nd Defendant by Counterclaim to take part in the deposition, he did not think the 2^nd Defendant by Counterclaim should be involved in the deposition and Mr Chong was not instructed to attend the deposition on behalf of the 2^nd Defendant by Counterclaim.

31.  Although it might be more helpful if the solicitor had been more vigilant and proactive in sorting out the position of the 2^nd Defendant by Counterclaim with the solicitor for the Defendant, I do not think it is fair to suggest that he was at fault in not bringing up the matter.  After all, the Defendant had the carriage of the deposition proceedings and it should bear the responsibility in ensuring all necessary procedural steps had been complied with.  It was the Defendant who chose to join the 2^nd Defendant by Counterclaim after the deposition had started and it should therefore bear the prime responsibility in taking up the matter with the 2^nd Defendant by Counterclaim and the court.  The correspondence between the parties does not show that the solicitor for the 2^nd Defendant by Counterclaim had ever misrepresented to the Defendant’s solicitor that Mr Chong also acted for the 2^nd Defendant by Counterclaim in the deposition or that the 2^nd Defendant by Counterclaim waived the need to have an order under Order 39 Rule 1 against him.  In the correspondence, the solicitor for the Defendant did not specifically referred to the position of the 2^nd Defendant by Counterclaim.  In the absence of any binding order under Order 39 Rule 1 against the 2^nd Defendant by Counterclaim, I do not think one can regard those notices given to the solicitor for the Plaintiff regarding the resumption of the deposition and the supply of transcripts as notices of the same effect to the 2^nd Defendant by Counterclaim.

32.  It seems more likely that those involved in the deposition did not address their minds to the position of the 2^nd Defendant by Counterclaim.  The Registrar did not appear to regard the 2^nd Defendant by Counterclaim as party to the deposition.  This is reflected by the fact that after cross-examination of the witness by Mr Chong (who on record only appeared for the Plaintiff in the deposition), the Registrar did not invite any person to cross-examine the witness on behalf of the 2^nd Defendant by Counterclaim.  This is quite understandable in view of the fact that the order of Chu J was only an order between the Plaintiff and the Defendant.   

33.  In her second affidavit, Ms To placed emphasis on the fact that the 2^nd Defendant by Counterclaim was aware of the deposition and he was present at part of the deposition.  But the same cannot be said with regard to the other members of Kam Lan Koon.  Although Mr Kwan was named as their representative, Mr Kwan was contesting the propriety of such representative capacity at the time of the deposition.  Those other members are potentially affected by reason of Order 15 Rule 12(3) and they stands in a rather different position in this aspect of the case.  At one stage, I was minded to invite such members to nominate another representative to address this court on the admissibility of the deposition since their position is potentially different from that of Mr Kwan.  However, I did not take such a course because I concluded that even in the case of Mr Kwan, without an order under Order 39 Rule 1 that is binding on him, he was quite entitled to assume that the Defendant chose not to involve him in the deposition.

34.  This is not a case where the positions of the Plaintiff and the 2^nd Defendant by Counterclaim are entirely the same in resisting the Counterclaim.  As demonstrated by Mr F Chan, there are questions relevant to the specific defence raised by the 2^nd Defendant by Counterclaim (but not relevant to the defence of the Plaintiff) that could be put to Mr Cheung.  Those questions have not been raised in the deposition due to the absence of the 2^nd Defendant by Counterclaim.

35.  I therefore reject Mr C H Chan’s submissions.  I find that given the lack of an order under Order 39 Rule 1 against him, the 2^nd Defendant by Counterclaim was not a party to the deposition and hence he had no opportunity to cross-examine the witness even though he personally was aware of the deposition both before and after the joinder.  I do not think the Defendant can pray in aid of Order 1 Rule 2 to seek to have the deposition admitted as deposition against the 2^nd Defendant by Counterclaim.  As far as the 2^nd Defendant by Counterclaim is concerned, the deposition was taken without his participation.  The essential characteristics of a deposition were that all parties involved must have a fair opportunity to argue whether it is appropriate to take evidence by deposition and if deposition were to be taken, they have a fair opportunity to cross-examine the witness.  Vis-à-vis the 2^nd Defendant by Counterclaim, these characteristics are absent.  At the most, the transcript of the deposition can only be regarded as hearsay statements regarding the 2^nd Defendant by Counterclaim.

36.  Coming back to the position of the Plaintiff.  Apart from the affidavits of Ms To, the Defendant called Dr Gary Chu to establish a case of Cheung being unfit to attend trial.  The doctor gave evidence on 11 October 2004 and he was cross-examined by Mr F Chan.  Mr Chong did not cross-examine the doctor.

37.  The doctor testified that the conditions of Mr Cheung are worse than that in 2003 when the deposition was taken.  Dr Chu has known Mr Cheung for a long time and he was a friend of Mr Cheung’s son since primary school.  He has been attending to Mr Cheung’s medical conditions since 1997.  He specializes in emergency medicine.  He gained fellowship in the Hong Kong Academy of Medicine in 2002.  During the past year, he saw Mr Cheung about two times per month and the last time he saw Mr Cheung before he gave evidence was 3 October 2004.  He made a medical report dated 9 October 2004 concerning Mr Cheung.  In his oral testimony, Dr Chu identified three main areas of concern regarding the health of Mr Cheung,

(a)     cancer of the prostate with multiple skeletal secondaries that caused Mr Cheung to suffer from severe headache and back pain and analgesic and morphine that would make Mr Cheung drowsy.  He said the prescribed dosage is about four times per day, and it is expected this might increase in the future;

(b)    the heart condition was said to be within type 3 of the New York classification.  Dr Chu explained that it means Mr Cheung could encounter difficulty in breathing even when he engaged in ordinary daily activities of simple exertion like brushing his teeth;

(c)     mentally speaking, Mr Cheung has symptoms of depression with insomnia and anxiety experienced.

Dr Chu was particularly concerned about the effect of the stress occasioned by giving evidence on the heart of Mr Cheung.  He worried that such stress might precipitate a heart attack.  He testified that that was what happened on 30 May 2003 when the deposition taking was interrupted.  

38.  Although Dr Chu is not the cardiologist treating Mr Cheung (he is treated by Dr Teresa Wong and another doctor at Graham Hospital in that respect), I am satisfied on the evidence before me that Mr Cheung would be unfit to attend the trial for the purpose of Order 38 Rule 9(1).  I therefore held that the deposition is admissible against the Plaintiff.

39.  As regards the position of the 2^nd Defendant by Counterclaim, for reasons already given, it could not be regarded as deposition.  Can it be admitted as hearsay evidence? Mr F Chan contended that it cannot for two reasons,

(a)     the definition of “hearsay” under the new Section 46 of the Evidence Ordinance excludes oral evidence given in the course of proceedings and the deposition falls within the exception;

(b)    the proper channel of getting the deposition admissible is to follow the regime under Order 39 Rule 1 and Order 38 Rule 9.  Short of that, the evidence is inadmissible.  He cited my decision in High Fashion Garments v Ng Siu Tong [2003] 2 HKC 562 to support this contention.   

40.  One has to read the new definition of “hearsay” carefully.  It said “hearsay” means a statement made otherwise than by a person while giving oral evidence in the proceedings which is tendered as evidence of the matters stated.  Hence, it is tested by reference to the particular proceedings at which the statement is tendered.  In the present context, the relevant proceedings is the trial.  The deposition is not oral evidence given at the trial.  Fisher v CHT Ltd [1965] 1 WLR 1093 is authority for the proposition that deposition taking is not part of the trial.  Therefore, Mr F Chan’s contention based on Section 46 must be rejected. 

41.  As regards the second point, I said the following in Paragraph 15 in High Fashion Garments v Ng Siu Tong [2003] 2 HKC 562,

“Section 47(1) only removes one obstacle as to admission of evidence, viz. exclusion of evidence on the ground of hearsay.  It does not deal with other restrictions, including procedural restrictions laid down by other rules embodied in the Rules of the High Court and directions given by court for conduct of the case.  Section 55B(1) of the Evidence Ordinance reinforces this conclusion.”

42.  I stand by what I said.  However, I am of the view that in the present circumstances, such principle could not be relied upon to exclude the admission of the deposition as hearsay statement against the 2^nd Defendant by Counterclaim.  For reasons already canvassed, the deposition has never been a deposition as far as the 2^nd Defendant by Counterclaim is concerned.  It is more akin to evidence taken in another proceedings in which the 2^nd Defendant by Counterclaim is not a party.  There is no doubt that such evidence could be admissible as hearsay statement.

43.  That being so, the question of admissibility vis-à-vis the 2^nd Defendant by Counterclaim should properly be governed by the hearsay regime.

44.  Having made my rulings accordingly on 14 October 2004, Mr F Chan applied for leave to call Mr Cheung for cross-examination pursuant to Order 38 Rule 21.  Mr F Chan indicated that the area of cross-examination would be limited to those spelt out in paragraph 18 of his skeleton submissions.

45.  Although I ruled that Mr Cheung is unfit to attend trial to give evidence on a full scale, there is an obvious difference if he were only required for cross-examination within that limited scope.  Mr F Chan told me that his cross-examination would not take more than half an hour and he was happy with cross-examination through video-link with Mr Cheung remaining at his residence throughout the process and the doctor could be present there.  With these precautions, bearing in mind the circumstances of this case and the materiality of the evidence of Mr Cheung, I am of the view that on balance the application should be granted.  Of course, Mr Cheung could apply to set aside the subpoena if he deems necessary and I will hear submissions on his behalf in that event.