High Fashion Garments Co Ltd v Ng Siu Tong And Others

HCA 12093/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 12093 OF 1999

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R U L I N G

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1. This is an application for the admission at the trial of this action of the evidence of Lam Pik Yue ["Lam"] by way of affirmation. In the summons of 29 April 2003, the application was made under Order 38 Rule 2. In the course of argument, Mr Yu (counsel for the Plaintiff) advanced an alternative argument that apart from Order 38 Rule 2, the affirmation should be admitted as evidence by virtue of Section 47 of the Evidence Ordinance. A hearsay notice dated 16 April 2003 has been served in respect of that affirmation.

2. The witness was a former director of the Plaintiff and had been the superior of Mr Lau Kam Wing ["Lau"]. Lau was the wholesale manager of the Plaintiff and his duties included the sale of stocks in the warehouse of the Plaintiff. It is the Plaintiff's case that Lau had misappropriated stocks of the Plaintiff and sold the same to, inter alias, the Defendants. The Defendants operated a business of local sale of stock garments. The Plaintiff alleged that the Defendants were dishonest and were aware of or should be aware of the stolen nature of those goods. The Plaintiff claimed compensation from the Defendants under the equitable principles of "knowing receipt" and "knowing assistance". On the other hand, the defence case is that those transactions were ordinary sale of stocks and they at all material time dealt with Lau in good faith.

3. The Defendants intend to call Lau as a defence witness. According to the witness statement of Lau, Lau would testify that he was assigned by Lam to sell the stocks of the Plaintiff and there was an occasion when Lam sold the same at very low prices to dispose of stock garments of poor quality. Lau therefore did accordingly. Also when the stock accumulated to a large quantity, Lam would urge Lau to dispose of the stock locally and Lau would sell the same at lower prices. Initially, Lau needed to obtain Lam's approval as to the selling prices for stock. Later on, Lam was too busy to be involved and the matter was left in Lau's hands. If Lau's evidence were accepted as truthful, that would assist the Defendants in showing their bona fide because the Plaintiff is relying on the low levels of prices of goods sold to the Defendants and the absence of approval of the selling prices by Lau's superior as evidence of irregularities.

4. The Plaintiff therefore prepared evidence from Lam to refute the evidence of Lau. However, Lam resigned from the Plaintiff in 1996 and emigrated to Singapore. She is now living with her family in Singapore. Due to the current crisis involving SARS in Hong Kong and Singapore, she is unwilling to travel to Hong Kong to testify. Hence, the Plaintiff applied for her evidence to be admitted by way of Affirmation.

5. Lam's evidence is, in my judgment, quite important. Amongst the other witnesses called by the Plaintiff, two joined the Plaintiff in 1997. The material transactions took place between 1995 and 1998. Hence, in many respects, these two witnesses could only give evidence based on documents and for some reasons the trial bundles do not include a complete set of all relevant documents relating to the sale and delivery of stock garments. Although the third witness has been employed by the Plaintiff since September 1994, she was in another department. According to her evidence, she learnt from Lam about the proper procedures concerning the sale of stock though she had no personal involvement until 2001. Lam appeared to be the only witness of the Plaintiff who had direct and personal involvement in the matter up to her resignation in 1996.

6. I have invited the parties to consider the taking of the evidence of Lam through video-link. If such a course were adopted, Lam would not be required to travel to Hong Kong and the Defendants would still be able to cross-examine her. The Defendants were agreeable to such a course but the Plaintiff rejected the suggestion due to possible delay of the trial.

7. The Defendants are faced with very serious allegations. As mentioned, the evidence of Lam could have significant impact on the case. In the exercise of my discretion under Order 38 Rule 2, I must take into account of the legitimate interest of the Defendants in cross-examining crucial witnesses. In my judgment, on balance, the Defendants in the present case should not be deprived of such an opportunity when cross-examination could be achieved through video-link although this might result in some delay of the trial. It seems to me that in any event, the trial could not be completed within the 6 days allocated to the case. I am of the view that the potential prejudice to the Defendants caused by the lack of opportunity to cross-examine Lam must outweigh the prejudice to the Plaintiff caused by delay stemmed solely from making necessary arrangement for cross-examination of Lam.

8. Subject to the point relating to Section 47 of the Evidence Ordinance, I am minded to allow the Plaintiff to read the affirmation of Lam as evidence at the trial on condition that the Plaintiff...