HCA 1826/2011
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
HIGH COURT ACTION NO 1826 OF 2011
_________________________
BETWEEN
NG YUK PUI KELLY Plaintiff
and
DUNG WAI MAN 1st Defendant
THE ESTATE OF NG BING KUEN, DECEASED (REPRESENTED BY NG KWOK WAH VINCENT) 2nd Defendant
SINO LEADING LIMITED 3rd Defendant
_________________________
Before: Mr Registrar K.W. Lung in Chambers (Open to the public)
Date of Hearing: 28 November 2014
Date of Decision: 28 November 2014
_____________
D E C I S I O N
_____________
THE APPLICATION
1. The 1st and 2nd Defendants (“the defendants”) by summons filed on 24 October 2014 apply to strike out, delete or expunge:
(a) §§19-23, 54(4) of the plaintiff’s witness statement filed on 18 June 2014; and
(b) item nos. 62, 79, 82 and 83 of the plaintiff’s Supplemental List of Documents filed also on 18 June 2014.
2. The ground of the application is essentially that the said evidence is irrelevant and inadmissible, scandalous and tending to prejudice the fair trial of the action.[1]
3. The plaintiff opposes this application on the grounds that the evidence is relevant to the substantial disputes as pleaded in the pleadings and it will not be prudent to strike them out at this stage; but rather they should be left to the trial judge to make decision as to whether any of the evidence should be excluded or ignored.[2]
4. The parties are represented by senior counsel and counsel.[3]
THE FACTUAL BACKGROUND
5. The dispute in this Action is over the beneficial interest in the properties known as Flats B & C on 1/F and Flat Roof of a building in D’Aguilar Street, Central, Hong Kong (“the Properties”). The 1st defendant is the registered owner of the Properties. The plaintiff claims that the 1st defendant is holding the Properties as a trustee/nominee for her late husband, the plaintiff’s brother. The plaintiff claims that due to financial difficulty back in 1985, his late brother orally agreed to sell the Properties to him for the sum of HK$1 million (“the 1985 Agreement”). He had paid the money for the Properties. However, he did not require his late brother to transfer the Properties in his name in order not to affect his late brother’s position with the bank. Since then, he has been living on the Properties without paying rents or licence fees. In 1991, he allowed his late brother’s eldest son, Vincent Ng, to live on flat B free of charge. In 1997/1998, the second son of his late brother, James Ng, with his consent, also moved into flat B.
THE PLAINTIFF’S CASE
6. At trial, the plaintiff will primarily rely on, inter alia, the following causes of action to claim ownership over the Properties:-
(1) common intention constructive trust;
(2) proprietary estoppel and/or estoppel by standing by; and
(3) part performance.[4]
THE DEFENDANTS’ CASE
7. The defendants dispute the plaintiff’s claims. They do not agree that there was a 1985 Agreement. They admit that the plaintiff paid HK$1 million to the deceased, but the money was not paid for the purchase of the Properties, but for some other purposes. They do not agree that the deceased was, at the material times, in financial difficulties. The 1st defendant was, as according to the Defence, a person of substantial means. See 1st defendant’s Defence §15 and 2nd defendant’s Defence §11.
8. Therefore, the financial positions of the deceased and of the 1st defendant would be in issue at the trial.
THE IMPUGNED DOCUMENTS
9. The impugned documents are[5] :
ItemNo. Date Description Reference
10. As to various companies mentioned in the Documents:
(a) Pearldek was a company owned and controlled by D2.
(b) Pearldek held 50% of Niceson Investment Ltd., which was engaged in the trading of securities and foreign exchanges.
(c) James Ng, the Deceased’s younger son, held 50% of Niceson Management Ltd.
11. Below is a summary of the contents of the above documents:
st Document
nd Document
rd Document
th Document
12. The defendants submit that the above Documents are closely associated with §§19-23, 54(4) of the plaintiff’s witness statement:
(a) In §19 [108], in particular the last two sentences, the plaintiff refers to the Decision.
(b) In §21 [109], he refers to the two litigation search results.
(c) In §§22-23 [109], he refers to the Judgment.
(d) In §54(4) [120], he refers again to the Judgment.[6]
13. All those impugned parts of the witness statement concern Vincent Ng, the representative of the 2nd defendant, the estate of Ng Bing Kuen, deceased, i.e. the late father of Vincent Ng. They will be discussed in light of the relevant legal principles set out below.
THE RELEVANT LEGAL PRINCIPLES
14. The parties have no dispute over the relevant legal principles as set out in my previous Decision in Talent Weaving Dyeing & Printing Ltd v Able Billion Textiles Ltd [2013] 2 HKLRD 479 §5. Insofar as this discussion is concerned, it is not disputed that the court has the jurisdiction to expunge any scandalous parts of the witness statement and any facts not relevant to the pleaded case are scandalous. Those authorities cover the broad and general legal principles of striking out part or parts of a witness statement.
DISCUSSION
The legal principles in Sun Legend Investments Ltd v Ho Yuk Wah
15. The discussion in this application will take the analysis of under what circumstances the court should exercise its discretion to strike out the impugned part or parts of a witness statement, in particular, where the witness statement contains evidence for the purpose of attacking a witness’s general character and credibility, which according to Mr. Lam, SC for the defendants, is not permissible and should be struck out. He relies upon the judgment of the Court of Final Appeal in Sun Legend Investments Ltd v Ho Yuk Wah (2011) 14 HKCFAR 541.[7] In particular, he relies upon paragraph 57 of the Judgment where Litton NPJ said: “…A civil case is a trial of the issues as put before the court. It is not a trial of the character of the parties. This is a matter beyond the scope of analysis in a court of law.” Also in paragraph 58, he said: ‘… Generally speaking evidence of facts and circumstances to show the disposition of a party is inadmissible: see Sankey LJ in Hobbs v CT Tinling Co Ltd [1929] 2 KB1 at 50. Far less is it permissible to have the labels “devious character” “coward” etc. created in unrelated proceedings attached to the parties before the court.’
The legal principles in Mohammad Amjad v John M Pickavant & Co
16. Mr. Lam, SC is, of course, aware that whether the impugned parts of the witness statement must be struck out at the interlocutory stage is not yet certain as in paragraph 59 of the Court of Final Appeal judgment, the learned NPJ said: “Whether the trial judge was right or wrong to have allowed evidence bearing upon the three matters referred to in Rogers VP’s judgment (para. 56 above) to be put before him is beside the point. Having entertained such evidence, the judge was perfectly entitled to reject them as of no relevance. He could not be faulted in that regard.” This is obvious as the NPJ said at paragraph 60, “But nothing turns on this at the end of the day.” This seems not to be consistent with the view of the learned Master M. Ng (as she then was) in Mohammad Amjad v John M Pickavant & Co , HCPI 100/2009 (7 May 2012), where she held that “…the defendant was taking the proactive step of adducing witness and documentary evidence on matters of credit in support of their own case (rather than adducing rebuttal evidence in response to any witness’s denial on matters as to credit). This was impermissible. (§182, pp 78-79)”[8] Mr. Lam SC also relies upon this Decision.
The legal principles in Re Linea Trading Co Ltd
17. It is clear that the court has the discretion to strike out the impugned parts of the witness statement. But the court has to be prudent in the exercise of its discretion because the impugned parts of the witness statement may be a mixture of admissible factual evidence and inadmissible opinion of another unrelated proceeding. To take a broad brush approach to strike the witness statement or the impugned parts as a whole may be unfair to the other party because the court should allow admissible factual evidence of a party to prove or advance his case in the trial. This can find support from the decision in Re Linea Trading Co Ltd (unrep., HCCW 350/004 [2005] HKEC 1225). In §4(1), Barma J (as he then was) pointed out that “degrading, indecent and offensive charges”… will only be “regarded as scandalous if they are irrelevant or inadmissible in evidence to prove any material allegation in the petition”. In §4(5) of the said decision, it was further pointed out:
“The court may take one of three approaches to an affidavit in which there is scandalous, irrelevant or oppressive matter:-
(a) It may decline to strike the matter out, on the basis that it is capable of excluding such material from its mind when deciding the issues which arise for decision; or
(b) It may think it appropriate to strike out some or all of the material complained of; or
(c) It may, in an extreme case, order the entire affidavit to be taken off the court file.
Which of these courses is adopted will depend on the circumstances of the case, regard being had to the nature and extent of the objectionable material.”
The legal principles in Wong Hoi Fung v American International Assurance Company (Bermuda) Limited & Another
18. Since the trial judge has the option to retain the impugned evidence, at the interlocutory stage, the court will only strike out the parts which are clearly objectionable. In case of doubt, the court should not strike it out and should leave it to the trial judge. This approach is analogous to the approach in the admissibility of expert evidence in Wong Hoi Fung v American International Assurance Company (Bermuda) Limited & Another [2002] 3 HKLRD 507 at §11 “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.”
19. With the above analysis of the legal principles, I shall now resolve the disputes between the parties in the present application in the same order and nomenclature in Mr. Lam SC’s written submissions.[9]
20. As a preamble, Mr. Lam, SC submits that with the causes of action as set out in Mr. Wong, SC’s written submissions, the issue of the financial troubles of the Deceased and Vincent Ng are irrelevant. As such, the parts of the witness statements and the documents under the application will not be relevant. Mr. Wong SC is quick to point out that this issue has been clearly pleaded in the pleadings. It refers to the factual background leading to the 1985 Agreement and the subsequent events following it. The defendants have also pleaded their cases in their Defences and also in their witness statements. It will be unfair not to allow the plaintiff to adduce evidence to prove his case and to countervail the defence evidence.
The 3rd, 4th Documents and §21 of P’s statement
21. In §21 [109], the plaintiff referred to the two litigation search results. Mr. Lam, SC submits that the litigation searches are plainly irrelevant and inadmissible because, the records only show the mere fact that Vincent Ng was involved in those litigations. The plaintiff argues that as the defendants had pleaded their case that they were in substantial means at all times and they had never faced any financial trouble at all, why should the plaintiff be disallowed to adduce evidence to rebut the defendants’ pleaded case? I agree. I can see no reason to say that the contents of paragraph 21 of the plaintiff’s witness statement, which alleged that “Vincent Ng often needed to borrow money from friends in order to survive the financial troubles. However, he was unable to repay some of the indebtedness….” is irrelevant to the issues in dispute.
22. As to the documents, Mr. Lam, SC complains that they are irrelevant and may be abused by the plaintiff to seek discovery of documents for those legal proceedings. The question is whether this Court should strike them out at this interlocutory stage. They may be used by the plaintiff to cross-examine Vincent Ng as to his financial positions in light of all the legal proceedings involving his companies and himself. Mr. Wong, SC has said that he would use them for that purpose. Whether or not the plaintiff would abuse the proceedings by way of discovery is not known to me. If the plaintiff sees fit to do so without fearing that the application may be viewed by the court as fishing exercise, the plaintiff may do so and the court will deal with it accordingly. At this stage, I decline to strike out this paragraph and the 3rd and 4th documents.
The 1st Document and §19 of P’s statement
23. The defendants argue that the Decision against Niceson Investment Ltd is irrelevant as the 2nd defendant was not a party to the Action. The Decision only means that Niceson Investment Ltd failed to show any triable issue and was liable to pay the judgment sum. Such liability was not the 2nd defendant’s personal liability in any event.
24. The plaintiff submits that the summary judgment is a relevant fact to show “a number of creditors actually commenced legal proceedings against (a) members of the Defendants’ family (particularly Vincent Ng); and (b) the companies owned by and/or associated with the Defendants’ family, including Niceson Investment Ltd and Pearldek Ltd.”[10]
25. This paragraph is a factual statement. It has nothing to do with Vincent Ng’s character. At trial, Vincent Ng may be asked why he had allowed his company to incur the debt if he was not in any financial trouble, which, according to the defendants’ counsel, he is quite entitled to ask at trial. As such I decline to accede to the defendants’ request to strike out paragraph 19 of the plaintiff’s witness statement.
26. As to the 1st document, which is a Decision of the court, the plaintiff relies upon this Decision to prove the financial positions of Vincent Ng at the material times. He does not rely upon the opinion of the Judge on the character of Vincent Ng, which has been ruled as inadmissible in Sun Legend . There is no reason to strike out the Decision from the list of documents.
The 2nd Document and §§22-23, 54(4) of P’s statement
27. The defendants submit that although the 2nd defendant was the defendant in DCCJ 6262/2006, that action was again wholly unrelated to the present case. The Judgment merely shows that the 2nd defendant was held liable to repay a loan to the plaintiff in that case. The evidence may prove the financial positions of the 2nd defendant. On the same analysis above, I do not consider this is irrelevant to the issues in dispute. But this is not the end of the matter.
28. In paragraph 23 of the plaintiff’s witness statement, the plaintiff has referred to the opinion of the Judge describing Vincent Ng as “disgraceful, calculated and scheming…”, which is similar to the comments in the Court of Final Appeal in Sun Legend Investment Ltd case where the Court held not permissible to have ‘the labels “devious character” “coward” etc. created in unrelated proceedings attached to the parties before the court.’ The judge’s opinions of Vincent Ng are clearly inadmissible and therefore should be struck out. I so order. The part in paragraph 23 of the plaintiff’s witness statement from “Disgracefully …(see §39)” be struck out. Also, the words “no hesitation” in line 3 of that paragraph should also be struck out as this is the plaintiff’s opinion, not the fact of the matter. He is not allowed to express his opinion in his own witness statement.
29. As to paragraph 54(4) of the plaintiff’s witness statement, it contains two parts, viz. that in the plaintiff’s view, Vincent Ng is now seeking to play the same trick on corporate personality as he did in DCCJ 6362/2006; and the second part the reason in support of his first part by reference to the court’s opinion in paragraph 23, which I decide to strike out.
30. I consider that the second part of this paragraph must be struck out as I have already struck out paragraph 23 of his witness statement. Without the second part, the first part is simply unfounded. As such, it should be struck out as well. This sub-paragraph is therefore struck out as a whole.
31. As to the 2nd document, on the same analysis as for the 1st document, a Decision of the court, I decline to strike it out from the list of documents. The trial judge should be able to exercise his discretion as to which part of the Decision should be taken into consideration and which part not to be considered, following the approach as decided by Barma J. (as he then was) in Re Linea Trading, supra .
CONCLUSION
32. As a conclusion, I allow the defendants’ application only in relation to the parts of paragraph 23 and paragraph 54(4), the rest of the summons are dismissed.
COSTS
33. I shall now hear the parties on the costs of the application and the hearing today. Having considered the submissions from Senior Counsel, it is right to say that substantial parts of the defendants’ application are dismissed and the costs should follow the event. The costs will be assessed summarily under O.62, r.9A RHC, with certificate for two counsel. Since the plaintiff has not argued substantially on those parts allowed, the plaintiff should be awarded 85% of the costs. With the schedule of costs, I now summarily assess the costs of the plaintiff at $126,795 to be paid by the defendants within 14 days from the date hereof.
ORDER
34. I shall now make an order in terms as follows:
a. The defendants’ summons be allowed as per paragraph 32, supra;
b. The costs of this application as per paragraph 33.
(K.W. Lung)
Registrar, High Court
Mr. William Wong SC and Mr. Alan Kwong, instructed by D.S. Cheung & Co., for the plaintiff
Mr. Paul Lam SC and Mr. Chase Pun, instructed by Li & Partners, for the 1st and 2nd defendants
[1] §1.2 of written submissions
[2] §§45-47 of written submissions
[3] See the end of this Decision
[4] §§15-21 of the written submissions
[5] §3 of written submissions
[6] 3.4 of written submissions
[7] §4 of written submissions
[8] §4.2( c) of written submissions
[9] §5 of written submissions
[10] §36(2) of written submissions