TAO, SOH NGUN v. HSBC INTERNATIONAL TRUSTEE LTD

HCA 3246/2016 & HCA 355/2018

[2020] HKCFI 632

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 3246 OF 2016 & 355 OF 2018

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D E C I S I O N

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A. INTRODUCTION

1.  By summonses filed on 18 June 2019 (the “Leave Summonses”), the plaintiff applies for leave to appeal against the Orders of this court made on 14 November 2018 (the “Orders”) pursuant to which the plaintiff’s application by summonses dated 18 October 2018 (the “Expert Evidence Summonses”) for leave to adduce expert evidence on the corporate finance issues as set out in Annex 1 thereto (the “Expert Issues”) were dismissed with costs.  By orders dated 30 November 2018, this court granted an extension of time until 28 days after final determination of the actions herein for the plaintiff to apply for leave to appeal against the Orders.

2.  The plaintiff’s proposed grounds of appeal against the Orders (and the Decision dated 14 November 2018 (the “Decision”)) are set out in the draft Notices of Appeal attached to the Leave Summonses.

3.  The applicable principles concerning applications for leave to appeal against interlocutory orders pursuant to section 14AA of the High Court Ordinance and Order 59, rule 2B of the Rules of the High Court are well-settled, namely, that the applicant has to show that the intended appeal has a “reasonable prospect of success” or there is “some other reason in the interests of justice” why the appeal should be heard.

4.  The Decision was an exercise of discretion as well as a case management decision.  As submitted by the defendant, a case management decision is only subject to appeal in rare circumstances and the plaintiff faces a “very high hurdle” in trying to overturn it.  The Court of Appeal will not interfere unless the judge below has “misunderstood the law or the evidence or the exercise of his discretion was plainly wrong such that it was outside the generous ambit within which a reasonable disagreement is possible”: Wong Kar Gee Mimi v Severn Villa Ltd [2012] 1 HKLRD 887 (CA), paragraph 31 (refusing leave to appeal against a decision on expert evidence).

B.  SERIOUS AND UNJUSTIFIED DELAY

5.  As held in paragraphs 8 to 15 of the Decision (and contrary to Draft Grounds of Appeal, paragraphs 1 to 5), the Expert Evidence Summonses were seriously late, which was not justified by any of the alleged reasons put forward by the plaintiff.  This delay by itself was sufficient for the Expert Evidence Summonses to be dismissed.

6.  Plainly, the plaintiff could and should have sought to adduce expert evidence on her proposed expert issues well before the trial commenced (on 29 May 2018).

7.  As explained in paragraphs 9 and 10 of the Decision, the proposed expert issues related to the plaintiff’s allegation that (i) the Trust had a “controlling shareholding” in Great Eagle, (ii) with a “premium value”, and (iii) such position and value were under threat or at risk of being reduced as a result of KS Lo’s increased shareholding and the defendant’s refusal to acquire more Great Eagle shares at the plaintiff’s request (the “Disputed Issues”).

8.  However, it had long been evident – well before the commencement of the trial – that the Disputed Issues were in dispute. Hence, the plaintiff should (if she considered that her case thereon required expert evidence) have applied for leave to adduce expert evidence much earlier, instead of mid-way through the trial.

9.  First, as held in paragraph 11(4) of the Decision, there is no doubt that since the date of the plaintiff’s formulation of her case in the Amended Statement of Claim and Reply filed in HCA 3246/2016 on 18 July 2017, the plaintiff must have known that she had raised and was obliged to prove at trial (as long as there was no admission or deemed admission thereto) her case on the Disputed Issues.

10.  Second, the plaintiff’s said allegations have never been admitted by the defendant.  In particular, insofar as the plaintiff’s said allegations had been set out in the Reply (which have now been incorporated by express references at paragraph 52(4) of the Re-Re-Amended Statement of Claim), there was at the close of pleadings an implied joinder of issue under Order 18, rule 14(2)(a) of the Rules of the High Court.

11.  Third, it is notable that even in the plaintiff’s opening submissions, the plaintiff recognised the need to prove her case on the Disputed Issues (i.e. that those matters were not admitted by the defendant).  The plaintiff expressly took the stance that she could prove her case thereon “without expert evidence” and instead based on “common sense” and “common knowledge”.

12.  The plaintiff further argues that the need to adduce expert evidence only arose as a result of the defendant’s consequential amendments made in the Re-Re-Amended Defence in HCA 3246/2016 and the Amended Defence in HCA 355/2018 (both filed on 6 June 2018).

13.  However, as submitted by the defendant, this is clearly wrong: –

(1)  As explained above, the plaintiff has at all times been obliged to prove at trial her own allegations as regard the Disputed Issues.  It was up to the plaintiff to decide what evidence she would put forward to make out her case.

(2)  Further, the consequential amendments introduced by the defendant in the Re-Re-Amended Defence and the Amended Defence (at paragraph 102(2)(d) thereof) consisted of simple denials of the Trust having a “controlling shareholding” in Great Eagle and of the alleged jeopardy to such shareholding and its value.  They did not raise any new issue beyond matters which the plaintiff was already obliged to prove for the purpose of establishing her case in the first place.

14.  The plaintiff also seeks to justify her delay with reference to the defendant’s filing of KS Lo’s Supplemental Witness Statement (on 10 October 2018 with the court’s leave).

15.  However, I agree with the defendant that this is another invalid excuse: –

(1)  The contents of KS Lo’s Supplemental Witness Statement: (i) were not new, having been foreshadowed in KS Lo’s Witness Statement; and (ii) were, in any event, factual matters which did not warrant a response in the form of expert evidence.

(2)  Indeed, in granting leave to the defendant to file KS Lo’s Supplemental Witness Statement, this court expressly ruled that the witness statement only contained factual evidence and did not pertain to any opinion or matters constituting expert evidence (see: paragraph 14(1) of the Decision).

C.  PROPOSED EXPERT ISSUES PROBLEMATIC & INVOLVING FURTHER FACTUAL ENQUIRY

16.  For the reasons set out in paragraphs 16 to 19 of the Decision, the plaintiff’s proposed expert issues: (i) were problematic in several respects; and (ii) would undoubtedly involve further factual enquiries (which would have derailed the trial).

(1)  Issue 1 involved aspects which are clearly factual in nature: see paragraph 17 of the Decision.

(2)  Issue 4 was extremely wide and open-ended, which would have required extensive investigation and analysis of an array of factual matters: see paragraph 18 of the Decision.

(3)  In any event, some of the proposed expert issues were not connected with the pleaded issues: see paragraph 19 of the Decision. In this regard, as submitted by the defendant, it is incorrect to suggest that this court failed to particularise its reasons: this court expressly referred to the defendant’s arguments as set out in “section D of the Summary of D’s Submissions in Answer” (a document handed out by the defendant’s counsel at the hearing on 14 November 2018).

D.  SERIOUS DISRUPTION TO TRIAL AND PREJUDICE

17.  In dismissing the Expert Evidence Summonses, this court has taken into account: –

(1)  The prejudice which the mere fact of the Expert Evidence Summonses caused to the defendant, in terms of distracting the defendant from the continued preparation of the trial: see paragraphs 20 to 22 of the Decision.

(2)  The fact that if the Expert Evidence Summonses were to be allowed, the ongoing trial would be heavily disrupted and considerably delayed: see paragraphs 23 and 24 of the Decision.

18.  In relation to the latter point, this court decided that if the Expert Evidence Summonses were allowed, this would have resulted in an adjournment of the trial; the defendant being given a chance to make its own investigations and file further factual evidence; the defendant being given a chance to file its own expert evidence; the experts preparing a joint statement; the potential re-calling of the plaintiff’s factual witnesses; and then finally the resumption of the trial.  As submitted by the defendant, this sequence of events was not speculative, instead, it simply required this court to apply its experience, common sense, and judgement as to what fairness required.

E.  REASONS FOR DISMISSING THE PLAINTIFF’S CLAIM AT TRIAL

19.  In paragraph 8 of the plaintiff’s Draft Grounds of Appeal, the plaintiff refers to the reasons given in this court’s Judgement dated 22 May 2019 to suggest that this court was wrong in its Decision.

20.  However, as submitted by the defendant this is an illogical argument, which puts the cart before the horse.  If this court had valid reasons to dismiss the plaintiff’s Expert Evidence Summonses on 14 November 2018, the fact that the plaintiff ultimately lost at trial (on 22 May 2019) partly due to her lack of expert evidence cannot impugn this court’s earlier decision made on the Expert Evidence Summonses in the first place.

F.  CONCLUSION

21.  For the reasons set out above, I am of the view that there is no basis to say that this court was wrong or plainly wrong in exercising its discretion to dismiss the Expert Evidence Summonses.  The intended appeal has no reasonable prospect of success.  Accordingly, the plaintiff’s Leave Summonses are dismissed.  Further, I order that the costs of the applications be paid by the plaintiff to the defendant, such costs are to be taxed if not agreed with a certificate for 2 counsel.

22.  The above order as to costs is nisi and shall become absolute in the absence of any application within 14 days to vary the same.