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Letter from Hong Kong: The Traditional Approach Prevails

Hong Kong courts still consider a great breadth of cases in which expert evidence is used, and in the matters covered in that evidence. The fact that several expert witnesses are well-known to the courts is valuable in reducing time and in ensuring that the experts' evidence will be acceptable to the court. So comments such as...

''There is no dispute as to the expertise of the expert witnesses. I do not find it necessary to recite their qualifications in this judgment. They are in fact quite well known to those [who dealJ with customary law in Hong Kong and have given expert evidence in a number of cases. AlA Co Ltd. v Hock Kim Thye (Machinery) Ltd. [2004] Lands Trib;"

... are common. Another frequent comment is made concerning the role of the expert witness as an aid to the court in its understanding a matter of complexity and speciality.

The following cases are a selection of recent decisions where, even though there is a long tradition of the use of experts, the boundaries of their evidence are not always fully understood by those seeking to rely on such evidence. Until the proposed reforms on civil justice are introduced, the traditional approach to expert evidence and witnesses will continue to prevail, and courts will continue to explain the role of an expert witness.

Experts and Chinese Customary Law

Chinese custom and customary law are part of the law of Hong Kong: Art 8 of the Basic Law. Consequently it is a peculiarity of our law, in comparison with the law of other common law jurisdictions, for expert evidence to be received by the court on aspects of Hong Kong law, namely of Chinese customary law or custom.

The question of concubinage has been raised in several cases over the years. Expert evidence is often called to define its meaning, and to assist the court in determining whether or not it has been present in given cases. When concubinage was applicable in Hong Kong as part of Chinese customary law it applied only to those of Chinese ethnicity. This allowed Hong Kong Chinese or Chinese who had come to live in Hong Kong, where their ante-nuptial domiciles gave them capacity to undertake concubinage, to be entitled to practice the traditional custom.

Expert evidence on whether concubinage prevailed on the mainland in 1945, a date relevant to the parties in Suen Toi Lee v Yau Hie Ping [2001] (CFA), confirmed that it had been abolished in 1931. Accordingly, there was no concubinage and the two women seeking a share of the intestate estate of the deceased 'husband' received nothing.

For Hong Kong concubinage, as defined in section 13 of the Intestates' Estates Ordinance (lEO), was abolished in 1971 so that thereafter a union entered into "by a male partner and a female partner under which the female partner has, during the lifetime of the male partner; been accepted by his wife as his concubine and recognised as such by his family generally" could no longer produce any rights for the 'concubine' nor for the children of the union

As a consequence of the ruling in Suen Toi Lee, action was later taken against one of the concubines for account for property earlier received on the basis that none of the concubines nor the children (of one) were entitled to the estate of the deceased: Chan Chiu Lam & Ors v Yau Hie Ping [2004] (CA). Due to confusion in the facts and law, it took five decisions prior to the instant case to determine that there had been no status of concubinage as alleged. This result was reached only with 'the help of expert witnesses'.

Experts and Land Law

Prior to amendment to the Landlord and Tenant (Consolidation) Ordinance in 2004, most tenants of residential premises, and to a lesser extent commercial premises, were given security of tenure and protection by control of rent. Apart from transitional protection to existing residential tenants for the near future, the amendment removed those consumer-led protections.

Under the old system, a tenant who wished to remain in the premises on the expiry of the tenancy would serve notice on the landlord, and if agreement were not reached between them, the tenant could take the matter to the Lands Tribunal for it to determine whether, and at what rent, a new tenancy should be granted. If the parties had not agreed on the new rent, the Tribunal would name a figure which the tenant could accept or reject. The amount was reached by reviewing comparable rents for similar premises in the vicinity.

The decision of American International Assurance Co Ltd v Hock Kim Thye (Machinery) Ltd [2004] (Lands Trib) raised two major problems. First, the landlord did not produce any expert evidence for the rent review. Perhaps this was because he was resisting the grant of a new tenancy. Secondly, the Tribunal was dissatisfied entirely with the manner in which the tenant's expert had valued the property. The method of valuation was said to be 'far from desirable' in that an out-of-date guide to rents, issued by the Rating and Valuation Department, was used, and the expert 'amazingly rejected' the suggestion that the case be adjourned to enable consultation of the correct schedule. Further:

It is not to the Tribunal's experience and knowledge that expert witnesses in the same profession had ever submitted valuation reports using data more than one year old whilst similar type properties in the same district, but different neighbourhood, leased out within four months or less in time, are available. The expert witness should need to study and understand the rationale behind the practice of her profession to limit the choice of comparable properties to those transacted within six months.

If this was not enough to negate the assessment, the expert had used figures for territory-wide Hong Kong rental properties and for the wrong period of time, rather than for the 'upper-end' premises relevant here and in the time of post-SARS. This meant that the approach taken had 'distorted the quantum of adjustment deserved'.

There were further defects in the valuation, including the failure to indicate whether there were insufficient comparable properties to formulate a valuation, and whether the three properties compared were 'like with like'. All in alI the expert's valuation placed the Tribunal in an impossible situation. In the absence of a valuation from the landlord, the Tribunal would have had to 'work in a vacuum' had the valuation been discarded. Accordingly, the Tribunal was forced to refer to it, but making various adjustments to it. This was a case in which the absence of expert evidence from the landlord's side meant that the defective valuation was the only evidence in front of the Tribunal.

Multi Storey Buildings and Deeds of Mutual Covenant

Most apartments in Hong Kong are in multi-storey buildings. The rights of the owner of the apartment, held under leasehold from the government, will be subject to the terms of a Deed of Mutual Covenant which covers matters such as financial contributions to the management of the building, 'easements' between co-owners, the manner in which common property is dealt with, and restrictive covenants seeking to enable coowners to live in peaceful harmony. The management can be a paid professional, or it can consist of representatives of alI owners who have incorporated themselves for that purpose by registration of a certificate under the Land Registration Ordinance. It is only in the winding up of an Owners' Incorporation that the Companies Ordinance becomes relevant.

When the management of the building, funded by contributions from alI owners, failed to observe fire regulations, the government prosecuted the management and one owner in the case of HKSAR v The Incorporated Owners of No 10 Bonham Strand & Anor [2004] [HCt]. The two defendants were convicted and then appealed. One ground for appeal was that the magistrate had been biased because of his refusal to accept expert evidence from a party representing the defendants. That party was not a lawyer, but was a building consultant who apparently had been authorised by the Board of Directors of each defendant to appear on their behalf. However, it was held on appeal that the suggestion of bias was 'devoid of merit'. The expert evidence that the representative had sought to give related to the interpretation of the Code of Practice for Fire Service InstalIations and Equipment. This was held to be a matter for the court not for an expert witness. In the event the sentences and fines were upheld. It must be added that there was no evidence that the representative had expert knowledge on the matter. He was described as being the proprietor of a building consultant firm, but no evidence was given as to his qualifications for expert designation.

Experts and Documentary Credits

The High Court in Cooperative Centrale Raiffeisen-Boerenleenbank BA v Bank of China [2004] considered the role of expert witnesses in cases involving documentary letters of credit where the matter on which the evidence was given (namely whether documents were discrepant) was unfounded and irrelevant to the decision made at trial. The instant application concerned the award of costs for the expert witness who had given evidence on banking practice in the Asia Pacific region especially in regard to the operation of the VCP 500. The defendant sought to 'fillet' the costs payable in respect of this witness because the particular point for which the expert had been called, had failed.

Stone J observed that the use of such witnesses whilst fashionable remains a 'vexed issue'. His Lordship added that if one side called an expert witness, there was an 'overwhelming temptation' for the other side to also do so, even though it was unclear what impact such evidence could have on the court especially in a banking case. Even though the plaintiff lost on the particular point for which the evidence was given, the points 'were not bad points'. Accordingly in a commercial dispute the court will probably allow these costs unless it is satisfied that 'time and effort manifestly has been wasted in the terms of any particular argument'.

The upshot was that although the argument for which the experts were called was held to be unfounded, yet arguments on that point 'paved the way for the plaintiff's success', and so it was fair that costs should be awarded for that evidence.

In any case, the plaintiff had passed the court's barrier in a summons for directions on the right to appoint the experts. The use of expert evidence is not unusual where banking practice is called into issue. However, this case had been 'comPlicated fry the curious gyrations of the ICC upon the aspect of whether the Certificate of Origin was discrepant' and it may have been this factor which influenced the court in deciding that the costs should not be disallowed, even though the party using the expert lost on these points.

The Identity of an Expert

Is there a bar against a consultant, having advised a party, later giving expert evidence for that party in a subsequent action? Is there an absolute bar to the admissibility of evidence of an expert who is an employee of a party to the action? These questions were considered in Tang Ping-Choi v The Secretary for Transport [2004] (CA) where it was said that activities of two of the experts was more like those of an inquiry agent rather than those of an expert.

The case concerned the quantum of compensation to be paid the government lessee on the resumption of the land prior to the due date for determination of the lease. One factor in the government lessee's claim for an increase in the compensation offered by the government related to the number of harvests of Barbados lilies. In seeking to establish the veracity of the lessee's claims, employees of consultants advising the government had visited the property several times in the guise of purchasers of lily bulbs. The lessee sought to have evidence of these employees excluded on the grounds that as employees of the consultants they were biased, but also, even more seriously, that they had acted in a manner beyond the scope of an expert.

The Court of Appeal considered that there was no objection to a consultant later giving expert evidence. If that evidence were to be excluded then "experts would be put in an impossible situation. They would be hampered as to what they could do in any situation where litigation might ensue". Further if the consultant is treated as an employee of the engaging party there is no barrier to the consultant giving expert evidence. The expert "is called to give evidence within his expertise either for examPle to explain technical matters or to give opinion evidence based on his experience". This evidence should not be biased. It is not unusual for the expert witness to be an employee of the party calling him, especially in relation to highly specialised matters. The Court of Appeal decided that, in this case, the evidence of these experts was not tainted; therefore it was admissible because it was up to the court to consider whether the evidence was tainted, whether the expert should be permitted to give evidence, and what weight was to be given to such evidence.

However the court did add that the type of investigations undertaken by the employees should not have been undertaken by them as experts. The primary duty of an expert is to assist the court. The expert will be unable to carry out this duty if he "allows himself to be involved in disputes of primary fact unrelated to his expertise". The result will be that the court will be wary of his evidence and this is "detrimental to the administration of justice, as the court may thereby be deprived of reliance on specialist or technical information which may be valuable to the proper determination of the issues between the parties. "

A somewhat different route was taken in relation to employee experts - although the result was the same - in Hong Kong Air Cargo Terminals Ltd. v Commissioner of Rating and Valuation [2004] (HCt). There the court held that there was no absolute bar against employees giving expert evidence for the employer. Instead it was up to the court to decide whether or not it was admissible based on its satisfaction that the employee 'fully understood the duty of an expert'.

In that case the two experts were senior employees, one of long standing and the other of long standing in an associated company prior to joining the current employer. That meant, said the court, that "the natural loyalty and bias of these witnesses towards the appellant could not be lightly discounted" even though they had been advised of the need to be independent and of their overriding duty to the court. In the circumstances they were not shown, to the satisfaction of the court, to have had the duty of an expert adequately explained to them with the consequence that they were unaware that they had to ensure that their evidence did not omit any relevant matters.

A recent Victorian decision (FGT Custodians Pty Ltd v Fagenblat [2003] VSCA 330) had treated the question of bias of an expert as being a matter of weight rather than of admissibility. Lam J observed that he had treated admissibility 'as a discrete concept from the question of weight', in line with the English decision of R (Factortame Ltd. ) v Secretary of State for Transport [2003] QB 381 which permitted a wider review of factors than is usual. He added that the question of admissibility of expert evidence is a matter of general importance and it may well be that there is a need to be 'more refined when one refers to the exclusion ofevidence'.

Working out how bias is best treated could no doubt be one of the matters to be raised when the mooted civil justice reforms proceed.

When expert evidence on foreign law is adduced by one party, but not challenged by contrary evidence by the other, what may the court do? Can the court analyse it without seeking assistance from an expert? These questions were raised in Full Wisdom' Holdings Pty Ltd. v Traffic Stream Infrastructure Co Ltd. & Anor [2004] (CA) in a hearing to see whether or not the matter could go on appeal to the Court of Final Appeal. It was said by the court that a court daily has to determine whether or not evidence can be accepted based on the 'veracity and cogency of it'. The expert evidence presented here was 'highly unsatisfactory and simply could not be accepted at face value'. But assessing its effectiveness was not an unusual task for the court, and the court did not require an expert to assist in such a task. The Court of Appeal also added that the legislation relied upon (of which expert evidence was given) far from 'proving' the point, actually 'was one, by its own terms, would appear to point to the opposite conclusion to that which the defendants were advancing'.