TIERRA TRADING LTD AND ANOTHER v. LAND BASE LTD

HCMP 3074/2014

MISCELLANEOUS PROCEEDINGS NO 3074 OF 2014

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D E C I S I O N
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1.  By a summons dated 7 October 2015, the defendant seeks directions for two further issues to be dealt with by the single joint expert that has been appointed pursuant to the decision of this court dated 21 August 2015.

2.  The two proposed issues are:

“a. whether the residual plot ratio on Subsection 15 (if any) could be considered a safety margin in the design stage of Kyoto Plaza as a matter of general practice; and [which I will refer to as “the Safety Margin Issue”]

b. whether the floor area of the Subsection 15 Staircases was (and if not, whether it should have been) included in the calculation of the Gross Floor Area in the building plan of Kyoto Plaza as part of Subsection 15, and if it had been included, whether the permissible plot ratio of the Kyoto Plaza development had been exceeded [which I will refer to as “the GFA Issue”)]; …”

3.  The parties are not in serious dispute as to how the court should approach the question of expert evidence. 

4.  The evidence must be relevant in the sense that it is helpful to the court in arriving at its decision on the issues to be resolved.  The parties refer to Wong Hoi Fung v American International Insurance Company (Bermuda) Ltd [2002] 3 HKLRD 507, paragraphs 11 and 12:

“11. …. Where the proposed expert evidence is plainly inadmissible or irrelevant, the court ought to exercise its discretion to refuse the admission of such evidence. But where the court cannot form a clear view on the relevance of the proposed expert evidence or where it considers that the proposed evidence is clearly relevant, then it should grant leave for the evidence to be adduced at the trial….

12. In deciding whether certain proposed expert evidence should be received, the relevant test has been stated to be a two-stage one. Firstly, the evidence has to be admissible as "expert evidence" for the purpose of section 58 of the Evidence Ordinance, Cap.8. Secondly, the evidence must be relevant, in the sense that it is helpful to the court in arriving at its decision on one or more of the issues to be resolved, Barings plc (in Liquidation) & Anor v. Coopers and Lybrand & Ors, Lexis Transcript, 9 February 2001, Evans-Lombe J at paras.44-45.”

5.  The court is also reminded of its case management powers set out in the judgment of Fung Chun Man v Hospital Authority, HCPI 1113/2006 (24 June 2011) at paragraphs 9‑11”

“9. The enactment of the CJR did not result in a change to O.38, r.36 of the Rules of the High Court (‘RHC’). However, after the enactment of the CJR, it is clear that the court’s discretion, whether or not to grant leave to a party to adduce expert evidence, is to be exercised within the ambit of the court’s management powers. Those powers must be exercised in the light of the underlying objectives of the CJR, including the need to ensure the cost effectiveness of the proceedings; to ensure that the case is dealt with expeditiously; to ensure reasonable proportionality having regard to the amount of money involved, the importance of the case, the complexity of the issues, and the financial position of each party; to ensure procedural economy in the conduct of the proceedings; and to ensure fairness between the parties.

10. The courts recognise that the primary aim of its case management powers is to secure the just resolution of the dispute in accordance with the substantive rights of the parties. However, the substantive rights of the parties to a personal injury action do not include a legal right to call experts of their choice.

11. The expert evidence can only be adduced with leave of the court and, in deciding whether or not to grant leave, the court must ensure that such evidence is admitted only if it is likely to be of real assistance to the determination of the issues, and that it is adduced in the most effective and economic way consistent with the objectives of the CJR.”

6.  I respectfully adopt the approach laid down in Wong Hoi Fung, bearing in mind the principles of how the court should exercise its case management powers.  I would supplement that where the court cannot form a clear view on the relevance of the expert evidence and nonetheless grant leave for such evidence to be adduced at the trial, it is open to the court to make an order that costs relating to such expert evidence be borne by the applying party irrespective of the outcome of the case if it turns out at the end of the trial that such expert evidence is irrelevant or immaterial.  It is not uncommon that the utility of the expert evidence would only be clear at the trial.  Hence, if such expert evidence turns out to be of no utility, parties seeking to adduce it should bear the costs associated with it.  In considering the matters below, I bear in mind the above principles and approach.

7.  The defendant filed its submissions on 22 October 2015, the plaintiff objected to the application and made submissions on 27 October 2015, followed by a reply submissions by the defendant on 30 October 2015. 

8.  Insofar as the Safety Margin Issue is concerned, the parties are effectively in agreement that the derivation of the residual plot ratio will be part of the analysis that will have to be conducted by the single joint expert in addressing the first expert issue that has already been directed in the court’s decision on 21 August 2015.  It is therefore, the plaintiff said, redundant. 

9.  The plaintiff argued that by the time of the defendant’s redevelopment, any remaining plot ratio would have been available to be used by the defendant.  As such, it contends that the “safety margin” represented by the unused plot ratio was irrelevant at that stage since, by that time, any “safety margin” issue would have lapsed even if it had existed at the time when the Subsection 15 was developed by the plaintiff. 

10.  It would not be right for this court to form any view on this observation or argument of the plaintiff.  However, given that there does not seem to be any dispute that in dealing with the first expert issue set out in paragraph 21(II)(7)(a) of this court’s decision dated 21 August 2015, the residual plot ratio will be calculated, there can be no real objection for the expert to identify such residual plot ratio on Subsection 15 (if any). 

11.  However, I am not content as to whether it should be described as “a safety margin” in the design stage of Kyoto Plaza.  The proposed Safety Margin Issue also includes reference to “general practice”, a matter which I find is not relevant to the issues here.  The single joint expert has been engaged to look specifically at the plot ratio referable to the area of Subsection 15 Staircases, and in so doing, it may be able to identify whether there is any residual plot ratio on Subsection 15.  It is irrelevant as to whether it was actually designed as “a safety margin” but whether in fact there was such a residual plot ratio.  In the premises, insofar as the Safety Margin Issue is concerned, this court is only prepared to grant leave to deal with the issue as framed: Whether there is any residual plot ratio on Subsection 15, and if so, what is its magnitude?

12.  As to the second issue, the GFA issue, I am not convinced that it is relevant to the issue in dispute between the parties.  The plaintiff is right in contending that the Buildings Authority has approved the building plan for Kyoto Plaza, and issued occupation permit.  The fact that it has been raised in Mr Ng’s affirmation as something that he was “given to understand” is neither here nor there.  To embark on an intention, purported to have been reflected by the submission of the building plan is, as submitted by the plaintiff, a new assertion made by evidence in reply. 

13.  It is not a matter for the single joint expert in this case to ascertain whether the developers of Kyoto Plaza had acted properly or correctly in calculating the GFA and in submitting the relevant plans showing the plot ratio referable to the development at the time.  Those plans have been approved and not in issue here. 

14.  I am also not persuaded that the GFA Issue would show the plaintiff's understanding as to whether they were in possession of the Disputed Area after Kyoto Plaza was built.  The approved building plan will show what the consultants have done and what has been approved.  Even if it were to be said to manifest the plaintiff's intention, which, I do not accept, it is the intention of the defendant claiming adverse possession that matters.

15.  For these reasons, the GFA issue is irrelevant and no leave is granted for it.

16.  Given that this application goes to the further conduct of the proceedings, and the parties each succeeded partially, I would make an order nisi that costs be in the cause.