In Hong Kong litigation, witness testimony (including the parties’ own tesimony) is very crucial evidence, and one of the important questions to decide whether to adopt the witness evidence or not is the credibility of the witness. This passage talks about the credibility issue of the witness in Hong Kong litigation, and its difference from the witness system in Mainland China.
Case Law: Shareholders’ disputes
Today, we focus on a company dispute case in High Court of Hong Kong. The brief fact is that two persons incorporated a holding company to conduct business in Mainland China. One of the 2 shareholders (“SH A”) was a managing partner of a well-known law firm in Mainland China, and another (“SH B”) was a foreign national, each person had 50% shares of the company. The company grew fast, but the 2 shareholders argued over the management of the company, and eventually led to litigation. Both SH A and SH B petitioned to the High Court in Hong Kong for an order to transfer the other side’s shares to themselves with the price assessed by the Court, the ground was that the other shareholder’s conduct amounted to unfair prejudice and it was impossible to continue running the company with the other side being the shareholder.
Both sides submitted particulars of unfair prejudice conducts of the other side to the Court, and each testified to the Court in person to give evidence. The result was the Judge ruled that SH A’s evidence given in the Court was not credible at all, and SH B’s evidence was credible. As such, the Court adopted the facts stated by the SH B and ruled that SH A did have unfair prejudice conducts against SH B. This case has been litigated several times, including appeal and related proceedings. The right to rule on evidence issue (including the credibility of the witness and adoption of witness evidence) belongs to the right of lower Court (Court of First Instance in this case) but not the appeal judge, therefore the ruling on the witness evidence’s credibility has never been overruled, and this became the basis for unfair prejudice in this case.
Let’s see how the Judge viewed the credibility of the witness. The Judge believed :-
- According to the facts of the case, when 2 shareholders argued, SH A coerced the other side to comply with his requests by repeatedly using improper methods but not resolving it by legal means, this is a remarkable behaviour to a lawyer, the Judge ruled SH A was not a reliable witness based on that; and
- The testimony given by SH A in Court was basically in favour of his own case and denied everything that is against his case unless it was proven by documentary evidence. The Judge held that SH A was not a honest witness and SH B’s testimony was relatively objectively and adopted his version.
Comparison: Witness testimony in Mainland China’s litigation system
This reminds me of my observation when I was a litigation lawyer in Mainland China: a Chinese lawyer (or a party under lawyer’s guidance) basically only gives statements that are beneficial to his own case unless it is hardly deniable by documentary evidence. Even though it is later cross-examined by the Judge or other side’s lawyer and resulting in contradictions, excuses like “not sure”, “got it wrong”, “I am a lawyer, not sure about the facts” are used often and lawyer’s professional conduct and credibility of the witness are rarely the concerns.
Judges in Mainland China usually do not consider the witness’ (including the litigating party) personality (credibility) issue, the norm is that the credibility of the witness does not affect whether the Judge adopts the facts stated by a party. The reason behind is that the evidence law system in Mainland China lacks the concept of witness credibility and the assessment standard. Because of that, SH A in the abovementioned case (a partner of a law firm in Mainland China) adopted his commonly used Chinese lawyer’s mindset to handle the case but did not notice the characteristics of the Hong Kong’s witness evidence system, especially its difference from the Mainland China’s evidence system, this led to an unfavoured ruling against him.
Conclusion
In the litigation system, the method to rule on facts in the common law system, especially the witness evidence system, is hugely different form the Mainland China. If lawyers from Mainland China still use their own legal mindset to deal with litigation matters in Hong Kong without realizing the difference between them, they are bound to fail.