HONG LOK SCHOOL LTD AND ANOTHER v. CHOW SAI YIU AND ANOTHER

HCA 17139/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 17139 OF 1999

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D E C I S I O N

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1. The trial of this action started on 30 June 2003. Due to unforeseen circumstances, it has to be adjourned part heard on 14 July 2003 with an estimate by counsel that another 10 days will be required. A number of factors caused this adjournment. The first witness called on behalf of the Plaintiffs was Madam Kwan Ko Siu Wah. She started to give evidence on 2 July 2003 and cross-examination began on 3 July. She was a lady of 78 years old and she suffered from hypertension. She had to take medication from time to time to tackle her heart problems. I of course appreciate that giving evidence, particularly being subject to cross-examination could be a stressful experience. During the course of her evidence, I have granted breaks more frequently than I usually did so that Madam Kwan would not be subject to unnecessary prolonged pressure.

2. Unfortunately, she felt unable to continue with her evidence after 4 July 2003. Her counsel Mr Thomson applied on 7 July for the case to be adjourned to 10 July on the basis that Madam Kwan was medically unfit to continue to give evidence in the meantime. The application was supported by certificates from two medical practitioners. Mr Wong, counsel for the Defendants did not oppose the application but reserved his position as to costs.

3. In the afternoon of 7 July 2003, solicitors for the Plaintiffs informed the court that the Plaintiff wished to make an application to lead some other evidence during the adjournment. Hence, counsel were back in court on 8 July 2003. It turned out that Mr Thomson wanted to renew his application for his handwriting expert's evidence to be heard. On the first day of trial, I have already indicated that because the expert evidence may depend on some factual evidence, I would follow the usual practice of hearing all the factual evidence first. Mr Thomson accepted that arrangement and told the court he would liaise with his expert accordingly. For some reasons, there seems to have been a breakdown in communication and the Plaintiff's expert came to Hong Kong on 7 July and planned to stay until 9 July 2003. Mr Thomson therefore invited the court to interpose the most crucial factual witness (a defence witness) on 8 July 2003 so that he could lead the evidence of his expert witness on 9 July 2003.

4. However, due to the adjournment on 7 July 2003, this court had already listed another matter in the afternoon of 9 July 2003. Moreover, the relevant defence witness was not in Hong Kong on 8 July 2003 and it was not possible to arrange him to be called on 9 July 2003. Mr Wong had told Mr Thomson previously that he required 2 days' notice to arrange for this witness to come to give evidence as he often stayed out of Hong Kong. Mr Wong also indicated that he would take up substantial time in the cross-examination of the Plaintiffs' expert and there was simply no realistic chance of completing her evidence by 9 July 2003.

5. In the circumstances, it is obvious to the court that apart from the undesirability of hearing evidence of the expert before the completion of the factual evidence on the facts of the present case, it was simply impossible to complete the evidence of the Plaintiffs' expert by 9 July 2003. It would be a futile exercise and waste of costs to allow the expert to be called at this stage and I refused the application. It was then agreed that the Plaintiffs would explore the taking of the evidence of their expert through video-link at the Technology Court.

6. On 10 July 2003, Mr Thomson informed the court that the Plaintiff was still unfit to attend court and asked the court to excuse her from giving further evidence. A medical report was produced to support the application. Not surprisingly, Mr Wong did not accept the conclusion set out in the report. To facilitate his clients in looking into the matter, he asked for discovery pertaining to the medical history of Madam Kwan and examination of Madam Kwan by a doctor appointed by the Defendants.

7. Directions were given for these matters and examination of Madam Kwan by the Defendants' doctor took place on 11 July 2003. The Plaintiff called the doctor attending Madam Kwan, Dr Victor Goh to give evidence on 14 July 2003. He was cross-examined by Mr Wong until about 4:00 p.m. on 14 July 2003.

8. The case was originally scheduled to run up to 14 July 2003. Due to the state of this court's diary, it was not possible to continue with the trial after that date, particularly when counsel estimated that the case required another 10 days. In any event, arrangement had to be made for the taking of video-link evidence from the Plaintiff's expert.

9. Since it is unlikely that the evidence of the Defendant's doctor could be finished within the remaining court session on 14 July 2003, this court hear submissions on applications for costs which Mr Wong indicated that he intended to make before the case is adjourned.

10. Before I turn to these applications for costs, I should mention that Mr Thomson told the court after the evidence of Dr Goh that irrespective of the court's findings on the medical evidence, Madam Kwan did not intend to come back to court to continue with her evidence. Mr Thomson also acknowledged that he knew of no procedure by which the court can make an interlocutory ruling as to the effect of Madam Kwan's testimony in view of these developments. On the other hand, Mr Wong did not ask for an order directing Madam Kwan to come back to court to give evidence. His position was that if the court were not satisfied that Madam Kwan was medically unfit to continue with her evidence, this court should disregard all her evidence in favour of the Plaintiffs whilst the Defendants could rely on her evidence in their favour.

11. In these circumstances, given that neither party has invited me to do so and counsel have not directed my attention to any authorities affirming that the court could do so, I do not think this court should make any interlocutory ruling and make any findings on the medical evidence on an interlocutory basis. I indicated that I would treat the medical evidence as evidence in the trial and I would take those into account in assessing what I should do with Madam Kwan's evidence. My determination would be given in my judgment after trial. I understand that counsel for both parties agreed to this course being adopted.

12. Mr Wong's applications for costs directed towards the costs relating to the following matters,

(a) Plaintiffs' application to admit new evidence;

(b) Plaintiff's abandonment of the allegation against Mr Chow Siu Nam;

(c) Plaintiff's application for adjournment on 7 July 2003;

(d) Plaintiff's application on 8 July 2003 referred to in Paragraphs 3 to 5 above;

(e) Plaintiff's application to excuse Madam Kwan from continuing with her evidence.

Mr Wong asked the Plaintiffs to bear the Defendants' costs of and occasioned by these applications/ matters and asked for such costs to be paid forthwith.

13. Mr Wong also asked for a direction that the company should not pay for the costs of this action on the basis that the dispute is essentially one between the shareholders. He relied on the principles set out in Re Crossmore Electrical and Civil Engineering Ltd [1989] BCLC 137, Re Milgate Development Ltd [1991] BCC 24 and Re CG & L Investment Ltd [1993] 1 HKLR 107. Mr Thomson accepted that the company should only be a nominal party to this action.

14. The main submission of Mr Thomson to the applications for costs is that the court should not deal with the question of costs at this stage. He said it was wrong in principle for the court to decide on question of costs until the court has heard all the evidence. I think it depends on the matter regarding which costs are being asked for. The point may be a valid one regarding items (e) bearing in mind that I have not heard all the evidence regarding the medical fitness of Madam Kwan and as I said, I regard such evidence as evidence of the trial. As regards (b), on the facts of the present case, I consider that it would be more appropriate to reserve my decision as to costs until the end of the trial.

15. However, I fail to see the relevance of the rest of evidence to items (a) and (d). I have set out the circumstances and the manner in which the application for admission of new evidence was made in my Reasons for Ruling on 7 July 2003. With the adjournment of the trial, I think it is appropriate to deal with such costs at this stage. Irrespective of the merits of the Plaintiffs' case in the action, I am of the view that the Plaintiffs should pay the Defendants' costs of this application. Likewise, I see no reason why costs should not follow event and why it is inappropriate to make any order for costs regarding the application on 8 July 2003. Had those advising the Plaintiffs made proper enquiries with solicitors for the Defendants before coming back to court on 8 July 2003, they would readily appreciate that it is an application doomed to fail since it was physically impossible to fit the evidence the Plaintiff's expert and the defence witness within the short time available.

16. As regards (c), one must not lose sight of the fact that even assuming Madam Kwan had valid medical reasons for seeking the adjournment on 7 July 2003, she was asking for an indulgence. I see no reasons why the Defendants should suffer financially as a result of such indulgence. In my view, they should be compensated by an order for costs in their favour.

17. However, I am not satisfied that this case warrants an order that these costs be paid forthwith. Nor do I think that they should be awarded on indemnity basis. Hence, the order I make is that Kwan Ko Siu Wah and Kwan Kay Cheong do pay the costs of Chow Sai Yiu and Chan Cheung Po in respect of the following,

(a) the costs of and occasioned by the Plaintiff's application for admission of new evidence on 30 June and 2 July 2003, and I recorded for the purpose of taxation that the time spent at the trial on this application was, according to my records, 3 hours;

(b) the costs of and occasioned by the Plaintiff's application on 8 July 2003;

(c) the costs of and occasioned by the adjournment of 7 July 2003.

These costs are payable in any event.

18. Since Mr Wong is partly successful and partly unsuccessful in his applications, I propose to take a global approach and make a costs order nisi that the applications for costs be costs in the cause.