EIL CO LTD v. SIU CHUN WAH VINCENT AND OTHERS

DCCJ 1881/ 2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1881 OF 2005

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REASONS FOR DECISION ON
1ST AND 2ND DEFENDANTS’ APPLICATION FOR
LEAVE TO APPEAL

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Background

1. On 24 January 2006, I gave judgment against the 1^st and the 2^nd Defendants (“the Applicants”).  They now seek leave to appeal against my decision.   

The grounds of application

2. The Amended Notice of Appeal contains the following grounds:

1. The learned Deputy Judge erred in failing to:-

(i)   apply and/or give effect to the requirement of more cogent evidence commensurate with the seriousness of the misconduct alleged before coming to a finding of serious fraud (allegations amounting to outright theft in the present case) on part of the 1^st and 2^nd Defendants (Nina Kung v Wang Din Shin FACV 12/2004); and

(ii)  take into account the lack of “propensity evidence” against the 1^st and 2^nd defendans (per Lord Scott in Nina Kung, at para. 626).

It is submitted that the evidence in the present case linking the 1^st and 2^nd Defendants to the blatant fraud and/or theft of Sean Ping did not reach the level of cogency required to support a finding of serious fraud against the 1^st and 2^nd Defendants.

2. The learned Deputy Judge erred in failing to have regard to any of the circumstances as provided in s. 49 of the Evidence Ordinance (Cap. 8) in assessing the reliability or otherwise of a key piece of hearsay evidence adduced by the Plaintiff, namely, what Mr. TSUI of “Mun Chuen” had allegedly said to the Plaintiff’s representatives in relation to the change of name from Universal to Mun Chuen and the Defendants’ alleged visit to Mun Chuen’s factory [para. 25].

3. The learned Deputy Judge erred in refusing the application by counsel for the Defendants to “reopen the cross-examination” of PW1 [para. 83].  It is submitted that it was in the interest of justice to allow the application to re-call PW1 for further cross-examination. 

This Court's view

Ground 1

3. Based on Nina Kung, which adopted Re H, the Applicants’ counsel, Ms. Wong, suggests that this Court should first look for some cogent and propensity evidence to support a claim of misconduct before eventually assessing the evidence in proof of it. 

4. Mr. Dawes, counsel for the Plaintiff Respondent, refers to Phipson on Evidence, 16^th ed. 2005, para. 6-55, as follows:

Re H does not mean that in every civil case where a serious allegation is made, that allegation will necessarily require proof somewhere approaching a criminal standard.  Lord Nicholls explained that the heightened standard derives from the fact that “the more serious the allegation the less likely it is that the event occurred”.  Attention should be paid to the nature of the allegation, the alternative version of facts suggested by the defence (which may not be that the event did not occur, but rather that it occurred in a different way, or at someone else’s hand), and the inherent probabilities of such alternatives having occurred.  It may be that the version of events put forward which assert serious wrongdoing is inherently more probable than the version of events which is consistent with innocence of wrongdoing.     

5. I think that in the context of Nina Wang, the CFA was dealing with the duty of the plaintiff to negative an alternative theory put forward by the defendant.  The defendant should first offer some cogent and propensity evidence of an alternative theory.  Unless this was done, the plaintiff would not be required to negative it. 

6. We have a wholly different scenario here.  The Applicants’ case all along had been a bare denial.  They had no alternative theory to put forward.  As presented in the plaintiff’s pleadings, witness statements, oral evidence, and trial counsel’s submissions, the plaintiff had all along shouldered the legal burden to prove misconduct on the part of the Applicants.  The concern of cogent and propensity evidence did not ever arise in our present case.  The CFA never suggested any artificial mechanism to require any plaintiff such as in our scenario to first put forward some cogent and propensity evidence, and finally to prove it on the balance of probabilities.  Such mechanism would have been otiose. 

7. Hence I disagree with this submission. 

Ground 2

8. Ms. Wong refers to s. 49(1) of the Evidence Ordinance (Cap. 8) which provides as follows:

In estimating the weight, if any, to be given to hearsay evidence in civil proceedings the court shall have regard to any circumstances from which any inference can reasonably be drawn as to the reliability or otherwise of the evidence.  (emphasis added)

9. She also refers to s. 49(2) thereof for a number of factors that the court “may” have regard to for the purposes of assessing the weight that could properly be attributed to the hearsay evidence.  She accepts that a consideration of the factors under s.49(2) is not mandatory because of the word “may”.   

10. I am aware that the Applicants’ trial counsel had not attacked the admissibility of the said hearsay evidence.  He had also, in his written Closing Submissions dated 6 January 2006, expressly accepted the truth of such evidence:

IV.   Defendants’ case in general

…

Meeting with Mr. Tsui Sun Yan (徐新仁) of Universal in Shenzhen  

            …

18.   Mr. Tsui Sun Yan (徐新仁) of Shenzhen was known to [the Applicants] as a person in charge of Shenzhen associate of Universal Voyager Company Limited 字航電子有限公司 (commonly referred to as “字航” by people in the trade) – a large computer parts manufacturer in Taiwan.

19.   The Shenzhen associate of Universal was subsequently known to have re-titled as 敏泉電子(深圳)有限公司 “Min Quah” – no contract was entered into with the Plaintiff.    

11. He asked this Court to take this view of the evidence.  Actually, in the course of the trial, not a single question was put to or suggested to the plaintiff’s witnesses in challenge of the accuracy or reliability of such reported knowledge of the change of the company.  The Applicants’ camp had elected to take this view and have their case conducted along this line.  I see no basis for their complaint that they ought to have done otherwise.    

12. I had accepted the plaintiff’s evidence and rejected the defence evidence.  I was entitled to place full weight on the plaintiff’s evidence, including the said hearsay evidence.

13. Hence I disagree with this submission. 

Ground 3

14. Ms. Wong accepts that the Applicants had been advised in advance of the risk attending upon their trial counsel’s not being allowed to re-open the cross-examination of the 1^st witness.  Ms Wong also accepts that it was a matter of discretion to grant leave in such circumstances. 

15. Five hours had elapsed, whilst the Applicants’ trial counsel continued to cross-examine the plaintiff’s witness in the meantime, before he eventually sought leave to re-open the cross-examination of the 1^st witness.  He did not give any reason for the delay.  I ask Ms. Wong why leave should be granted for an application with no reason for the delay offered by him.  There were tactical advantages to adopt that course as he did.  She replies, in all fairness, that she has no idea and cannot answer for him.  She is unable to demonstrate how the discretion was exercised wrongly or improperly.   

16. Hence I disagree with this submission. 

The conclusion

17. I refuse leave to the Applicants.  There is no apparent reason why costs should not follow the event.  I make an order nisi that the plaintiff respondent shall get costs with certificate for counsel.  The cost order shall become absolute after 14 days from today.    

Dated this 6 April 2006