徐 對 鄭

FCMC 9395 / 2019

[2024] HKFC 128

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NO. 9395 OF 2019

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DECISION

(Leave to Re-file Expunged Expert Report,

Withdrawal of Concession, De Novo Trial)

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A.  Introduction

1.  This is the hearing of W’s Summons filed on 12 May 2022 (“the Summons”) for leave to re-file W’s Expert Report (“W’s Expert Report”). W’s Expert Report is part of a report prepared jointly by W’s Expert and H’s Expert on the value of 36 pieces of artwork created by H (“Artworks”) pursuant to the order dated 22 April 2021 made upon the parties’ joint application.

2.  This application arose out of a series of events triggered by the lockdown in Shanghai during the Covid-19 pandemic which prevented W’s Expert from attending the trial in Hong Kong fixed for 19 to 21 April 2022 (“Original Trial”).

3.  On the first day of the Original Trial, W applied for a remote hearing on the evidence of W’s Expert, or an adjournment of the trial part-heard to a later date when the travel restriction in Shanghai was lifted. The application for remote hearing was refused by the original trial judge (“the Judge”). W was not successful in her argument for an adjournment without the real risk of paying the costs thrown away on an indemnity basis as warned by the Judge.

4.  W then, through her counsel Ms Leung, confirmed, inter alia, that in order to avoid paying the costs thrown away, she agreed to expunge W’s Expert Report and accepted the gross value of the Artworks opined by H’s Expert (“the Concession”). However, she did not agree to H’s Expert’s opinion on the costs for sale of the Artworks.

5.  The Judge expunged W’s Expert Report and commenced the trial after argument on costs.

6.  At the end of the first day, the Judge expressed the view that the trial would unlikely be finished within the scheduled dates, 2 more days to be fixed should be reserved.

7.  On the second day, Ms Leung informed the Judge that since it would have to be part-heard in any event, W wished to re-introduce her expert’s evidence. The Judge required a formal application by Summons. W confirmed via counsel that she would take out a summons within 7 days for that purpose and she no longer accepted the valuation made by H’s Expert.

8.  It ended up with the Judge making the following orders on 21 April 2022:

8.1.  the ancillary relief trial be re-fixed and be heard de novo with 4 days reserved, the oral evidence given by H at the Original Trial be expunged (“Re-trial Order”),

8.2.  costs orders and unless order[1] against W (“Costs and Unless Orders”),

8.3.  W shall take out a summons on or before 12 May 2022 for an application to re-file the expunged W’s Expert Report.

9.  W took out the Summons accordingly[2].

10.  W appealed against the Re-trial Order, Costs and Unless Order. Her appeal was partly successful in that the Unless Order was set aside, and the amount of costs to be paid by W was reduced. The Court of Appeal ordered a de novo trial on the ancillary relief dispute to be fixed before another judge, with 4 days reserved, in consultation with counsel’s diary (“De Novo Trial”).[3]

11.  The parties resumed the hearing of the Summons after the determination of the appeal.

B.  Issues

12.  The issues in this application are:

12.1.  Should W be permitted to withdraw the Concession for the purpose of the De Novo Trial?

12.2.  In the exercise of discretion for case management of the De Novo Trial, should W’s Expert Report be admitted in evidence?

C.  The Concession

13.  A concession became the basis on which the parties conduct the case by putting an end to the argument of an issue. The concession made by a party should be treated seriously. It may create unfairness to the other party if a party is allowed to retract from the position it has conceded: Chow Siu Po v Wong Ming Fung[4] at [111].

14.  This does not mean that any withdrawal of concession is forbidden. The law does not prohibit a party from withdrawing an admission or making a fundamental change after a conscious decision was made. The court has a discretion to allow a party to withdraw his concession: Re Ng Wai Jing[5] at [30].

15.  The way in which a court should exercise its discretion when determining an application for withdrawal of concession was set out by the Court of Appeal in Re Ng Wai Jing[6] where the following extract of the decision of Sumner J in Braybrook v Basildon and Thurrock University NHS Trust was cited as “a valuable guidance”:

“(1) In exercising its discretion the Court will consider all the circumstances of the case and seek to give effect to the overriding objective.

(2) Amongst the matters to be considered will be:

(a) the reasons and justification for the application which must be made in good faith;

(b) the balance of prejudice to the parties;

(c) whether any party has been the author of any prejudice they may suffer;

(d) the prospects of success of any issue arising from the withdrawal of an admission;

(e) the public interest, in avoiding where possible satellite litigation, disproportionate use of court resources and the impact of any strategic manoeuvring.

(3) The nearer any application is to final hearing the less chance of success it will have even if the party making the application can establish clear prejudice. This may not be decisive if the application is shortly before the hearing.”

16.  The above guidance were held to apply equally to Hong Kong in view of the underlying objectives in Order 1A rule 1(a) to (d) and (f) of the Rules of High Court (“RHC”): Re Ng Wai Jing at [21].

17.  Ms Chow for H argued that it is an abuse of process for W to seek to resile from the Concession. She submitted that an unimpeached compromise represents the end of the dispute from which it arose: Schindler Lifts (Hong Kong) Ltd v Nikko Services Ltd[7] at [13], citing Foskett, The Law and Practice of Compromise 7^th edition, p. 111 at para 6-01. Where settlement is reached on a claim, there was estoppel by contract or convention: Nandrame v Ramsuran[8]. She also relied on the Berthier line of abuse: Re Minloy Ltd[9], and the Henderson v Henderson abuse (res judicata in wider sense): Ko Hon Yue v Chiu Pik Yuk[10].

18.  The above cases cited by Ms Chow are about situations where a party re-opened a claim or commenced a new action after a settlement of the parties’ substantive rights was reached or a judgment was given; or where a party relied on fact, position or assumption inconsistent with those adopted in previous proceedings. These situations are different from the issues before this court. The law does allow a party to withdraw its concession if the court is satisfied that discretion shall be so exercised after consideration of the matters set out in Re Ng Wai Jing. The court also has the power to case manage the De Novo Trial.

19.  W was represented by counsel and she had time to consult her counsel before the Concession was made. The Concession was given in court in unequivocal terms. The Court of Appeal has rejected W’s complaint that she was pressurized by the Judge with the threat of indemnity costs should she insist on her application for re-introducing the evidence of W’s Expert at the trial[11]. With hindsight, W could handle the situation in the Original Trial better. W had taken the consequences and was ordered to pay the costs thrown away in the Original Trial.

20.  It was not in dispute that the Concession was made when W’s Expert was forced to stay in Shanghai by the lockdown, and W had applied or attempted to apply unsuccessfully for a remote hearing or an adjournment of the trial part-heard without paying the costs thrown away.

21.  But for the inevitable difficulty caused by the lockdown, W had every intention to call her expert to give evidence. She seized the opportunity to seek leave to re-file her expert’s evidence on the second day when she saw the possibility of adjourning the trial part-heard. That application was not entertained by the Judge in the Original Trial. The Judge ordered W to properly file a Summons should she wish to pursue the application.

22.  Seeing that the parties are proceeding to the De Novo Trial, the travel restriction was lifted and the appeal was determined, W resumed her application for the re-filing of W’s Expert Report. I am satisfied that W’s explanation and justification for this application was made in good faith.

23.  In weighing and balancing the prejudice that may be caused to the parties, I find that:

23.1.  W’s Expert Report was included in the evidence up to the first day of the Original Trial. Both parties have prepared their case for the Original Trial on the premises that W’s Expert would give evidence. In this context, H should not be required to incur extra costs for the preparation of the De Novo Trial if W’s Expert Report is re-introduced.

23.2.  The De Novo Trial is a fresh hearing to be heard by another judge. Although H has orally opened his case in the Original Trial on the basis that the Concession was made, this should not create prejudice against him in the De Novo Trial when he will have the opportunity to open his case again.

23.3.  The admission of W’s Expert Report in evidence should not affect the estimated duration (4 days) of the De Novo Trial in a material way bearing in mind that the original estimate was 3 days. There will be appropriate case management directions to regulate the conduct of the De Novo Trial.

23.4.  H’s Expert is not a single joint expert engaged by both parties. If W is not allowed to withdraw the Concession, she cannot put forward her expert’s opinion on the valuation.

23.5.  If W’s Expert Report is not admitted in evidence, the court will not have the assistance of W’s Expert when assessing H’s Expert’s valuation.

23.6.  H suggested that there are other alternatives to deal with the issue of Artworks in the ancillary relief proceedings (e.g. order for sale of the Artworks and distribution of the sale proceeds, or order for distribution of the Artworks to the parties). These may be options to be considered by the trial judge, but it should not be pre-judged at this stage.

23.7.  Ms Leung submitted (which was not disputed by Ms Chow) that it is likely that W will be the paying party as W holds more than 50% of the disclosed matrimonial assets. H’s suggested alternatives may not resolve all the issues in the ancillary relief dispute.

23.8.  There is no issue of satellite litigation if the Concession is withdrawn.

24.  Having considered the above, I am of the view that H will not suffer any real prejudice if the Concession is withdrawn for the purpose of the De Novo Trial. On the other hand, if W is not permitted to withdraw the Concession, she will be prejudiced and the court will not have the assistance of W’s Expert on the issue.

25.  Ms Chow cited Chow Siu Po v Wong Ming Fung[12] where the court did not allow a party to retract from its concession when the court found out during deliberation after the trial that the concession made on the burden of proof is wrong at law. This case is distinguished from Chow Siu Po in that:

25.1.  In Chow Siu Po, the issue of withdrawal of concession arose after the trial was closed. Both parties in that case had conducted the trial on the basis that the concession was made. Here, the parties will start the trial afresh in the De Novo Trial.

25.2.  Counsel for the conceding party in Chow Siu Po gave an ambivalent submission and indicated that he did not seek to resile from the concession made. Here, the Summons is in effect an application to resile from the Concession. W has not shy away from the position that she is seeking to withdraw the Concession.

26.  The court has the power and duty to make case management decisions in the De Novo Trial. This is analogous to the situation of an appeal against Master’s order which is heard de novo. The judge may give weight it deserves to the master’s decision, and if the judge thinks fit, to adopt the master’s reasoning. However, in the de novo hearing, the judge is not bound by the case management decision made by the master. It was held by B. Chu J in Taiping Trustees Limited v BOSC International Company Limited[13]that:

“24. … Having considered what has been set out in 58/1/2 above, I am of the view that position remains that an appeal to a judge in chambers, the judge treat the matter as though it came before him for the first time. The appeal is a de novo hearing of the application which led to the case management decision under appeal and the judge has to exercise his discretion afresh. Having said this, it is clear that the judge may give weight it deserves to the master’s decision, and if the judge thinks fit, to adopt the master’s reasoning.”

D.  Relevance, necessity and helpfulness of W’s Expert Report

27.  The next pertinent question is whether W’s Expert Report is relevant, necessary and helpful to the just adjudication of the ancillary relief claims.

28.  The principles applicable for leave to adduce expert evidence can be summarised as follows:

28.1.  Section 58(1) of the Evidence Ordinance provides for the admission of expert evidence in evidence subject to applicable rules.

28.2.  The provisions in Order 38 of RHC or Rules of District Court in relation to expert evidence and any practice directions issued in connection therewith apply to matrimonial proceedings: Matrimonial Causes Rules Rule 3, Practice Direction 15.12 [9], [20].

28.3.  Leave of the court is required if a party intends to adduce expert evidence: Order 38 rule 36 of RHC. The giving of expert directions is an integral part of the case management process: Chok Yick Interior Design & Engineering Co Ltd v Lau Chi Lun[14] at [7].

28.4.  There shall exist a recognised expertise governed by recognised standards and rules of conduct capable of influencing the court’s decision on any of the issues which it has to decide. The expert to be called shall have a sufficient familiarity with and knowledge of the expertise in question to render his opinion potentially of value in resolving any of those issues: Barings Plc v Coopers & Lybrand (No. 2)[15], Man King Chuen v Hong Lok Yuen International School Association Ltd[16].

28.5.  The party who seeks expert directions bears the burden to satisfy the court that expert evidence is available, such expert evidence would have a bearing on the issues which the court has to decide, is helpful and appropriate: Shenzhen Futaihong Precision Industry Co v BYD Co Ltd[17] at [10], Man King Chuen v Hong Lok Yuen International School Association Ltd.

28.6.  The appropriate time and manner of an expert direction application vary depending on the circumstances of the case. In a more complex or unconventional case, it may be more helpful to have the evidential issues more clearly identified with the exchange of documents and witness statements before expert directions are sought: Shenzhen Futaihong Precision Industry Co v BYD Co Ltd at [10].

28.7.  The court will only grant leave to adduce expert evidence if it is relevant and necessary for the just resolution of the issues before the court. There must be an evidential basis upon which expert evidence is to be adduced: Shenzhen Futaihong Precision Industry Co v BYD Co Ltd; Man King Chuen v Hong Lok Yuen International School Association Ltd; YKY v The Personal Representatives of the Estate of WSM[18]. This is the first stage test.

28.8.  If the first stage test is satisfied, the court must proceed to consider the second stage test, that is to ensure that such evidence is admitted only if it is likely to be helpful to the determination of the issues. Such evidence will not be helpful where the issue to be decided is one of law or the question can be determined on factual evidence and inferences to be drawn therefrom, or is otherwise one on which the court is able to come to a fully informed decision without hearing such evidence. A complex factual issue does not mean that expert evidence is required: Barings Plc v Coopers & Lybrand (No. 2), Shenzhen Futaihong Precision Industry Co v BYD Co Ltd at [25]; Man King Chuen v Hong Lok Yuen International School Association Ltd at [17]; MG Charter Limited v Beijing Caissa International Travel Service Co Ltd[19] at [4].

28.9.  In exercising the case management power to grant leave to a party to adduce expert evidence, the court need to ensure that the giving of expert evidence meets the underlying objectives set out in Order 1A rule 1 of RHC, viz. (a) promoting costs effectiveness of the proceedings; (b) dealing with the case expeditiously; (c) reasonable proportionality having regard to the costs involved, the importance of the case, the complexity of the issues, and the financial position of each party; (d) a procedural economy in the conduct of the proceedings; and (e) achieving fairness between the parties. Proliferation of unnecessary expert evidence, or abuse shall be avoided: Shenzhen Futaihong Precision Industry Co v BYD Co Ltd; YKY v The Personal Representatives of the Estate of WSM at [13].

28.10.  If it is satisfied that expert evidence is relevant, necessary and helpful to the just resolution of the dispute, the court would then consider what directions should be given in order to further the underlying objectives in the circumstances of the case, including direction for a level playing field with fair access to proper experts for all parties: Chok Yick Interior Design & Engineering Co Ltd v Lau Chi Lun.

28.11.  The framing of expert questions should generally avoid answering the ultimate question to be determined by the Court unless it is necessary and appropriate to do so in the particular circumstances of the case. The function of an expert is to educate and not to advocate. An expert should not purport to determine the ultimate question at issue, which must be a matter for the court and the court alone: Formosa Taffeta Co Ltd v Banque Indosuez[20] at [82], MG Charter Limited v Beijing Caissa International Travel Service Co Ltd at [5].

28.12.  If the applicant fails to show that such expert evidence is relevant, necessary and helpful, the application for expert direction should be dismissed. The court will not give direction for expert evidence to be adduced simply on the basis that the court cannot rule out a possibility of such evidence being relevant, necessary and helpful: Shenzhen Futaihong Precision Industry Co v BYD Co Ltd at [12].

29.  In Chan Cheung Ming Jacky v Siu Sin Man[21], Lam VP (as Lam PJ then was) remarked on the exercise of case management power in family proceedings as follows:

“20. Under CJR, Orders 1A and 1B were added to our rules (both the Rules of High Court as well as the Rules of the District Court). Order 1A rule 2 provides that whenever the court exercises its power under the rules (and that would include the power to grant leave to issue a subpoena), it must seek to give effect to the underlying objectives set out in rule 1. Order 1A Rule 2(2) is also important:

‘In giving effect to the underlying objectives of these Rules, the Court shall always recognize that the primary aim in exercising the powers of the Court is to secure the just resolution of disputes in accordance with the substantive rights of the parties.’

…..

23. We understand that in family proceedings, including those brought under the GMO, there is as yet no formal rule providing for the holding of case management conference. There is also no rule in such proceedings for the filing of a statement of nature of evidence intended to be adduced (for a witness who is not willing to give a witness statement and may have to be subpoenaed to give evidence) as provided under Order 38 Rule 2A(5) of the Rules of High Court. But the absence of such rules does not mean that judges in the Family Court do not need to be concerned with case management. Orders 1A and 1B are equally applicable to family proceedings, see Practice Direction 15.12 para.8. Further, paragraph 16 of PD 15.12 provides: …

24. Thus, if necessary, judges in the Family Court can resort to the powers and provisions in Order 25 and PD 5.2 to fulfil their case management function prescribed by Order 1A Rule 4 as buttressed by the powers set out in Order 1B.

…..

27. … As with the exercise of other kinds of discretion, the exercise of case management power must be with reference to the facts and circumstances of the case before the court. There is no place for the application of a mechanical rule that the court will invariably refuse an application simply because a party is guilty of serious delay without good explanation. The court must conduct an overall balancing exercise.

28. Further, we need to emphasise this: case management by the court does not mean that the judge will dictate the evidence to be adduced. Even in the context of family proceedings, our system is still primarily operated on an adversarial basis. In general, subject to the question of admissibility and relevance, each party in the proceedings is at liberty to call whatever evidence he or she considers necessary provided that procedural requirements are complied with. … in respect of a late application, the court will have to examine all the relevant circumstances and the significance of the intended evidence to be adduced is one factor to be taken into account.”

30.  In this case, the parties’ matrimonial home aside, the Artworks is an asset of substantial value in the matrimonial pot. Thus, the value of the Artworks would have a material impact in the ancillary relief claims for the benefit of W and W’s children whom were treated as children of the family prior to H discovered that he is not their biological father.

31.  The parties had jointly applied for an expert direction in the Original Trial. They must have taken the view that the valuation of the Artworks is relevant. H’s Expert Report remains part of the evidence adduced by H in the De Novo Trial.

32.  Ms Chow argued that there is no need to make a finding on the Artworks’ valuation because the court can order the parties to share the sale proceeds of the Artworks, or to distribute the Artworks between them. While these may be options for the resolution of the ancillary relief dispute, they can only be options for the trial judge’s consideration or for the parties’ consideration in a settlement. It is not appropriate for this court to pre-judge the issue at this stage, or to limit the trial judge to the options now proposed by H.

33.  The role of an expert is not to determine the value of the Artworks, but to provide his expert opinion on the valuation for the court’s consideration. Although the expert evidence is a material evidence on the issue and will be given substantial weight in most of the cases, the court, who shall make the ultimate decision, is not bound by the opinion of the expert.

34.  Without going into much of the details, the materials, comments and opinion in W’s Expert Report are relevant and helpful to assist the court in determining the value of the Artworks.

35.  For completeness, the provision in the consent order dated 7 March 2022 that the evidence of an expert who has failed to attend trial for cross examination would be removed from the trial bundles and be excluded from the trial does not stand in the way since this provision is not engaged in the De Novo Trial.

36.  I repeat the balance of prejudice against the parties in paragraph 23 above. Having considered these factors, the underlying objective of ensuring fairness between the parties, and the primary aim to achieve a just resolution of the dispute between the parties, I am of the view that W’s Expert Report should be admitted in evidence of the De Novo Trial.

E.  Disposition

37.  By the reasons set out above, I grant the relief prayed in the Summons and admit W’s Expert Report in evidence of the De Novo Trial.

38.  In light of the background leading to this application, it is fair to order the costs of this application be in the cause of the ancillary relief dispute. I so order on a nisi basis to become absolute in 14 days.

39.  The parties do lodge a joint proposed case management directions for the ancillary relief claims within 35 days from the date of this decision. In the event of disagreement on any part of the proposed directions, they shall state their respective proposal for such part and the reason for the disagreement on the same document.

40.  It remains for me to thank counsel for their assistance.

Ms. Theresa Chow instructed by Tony Kan & Co. for the Petitioner.

Ms. Vivien Leung instructed by Cheng, Yeung & Co. for the Respondent.