THE LAW REFORM COMMISSION

OF HONG KONG





REPORT ON

HEARSAY RULE

IN CIVIL PROCEEDINGS


(TOPIC 3)











JULY 1996


THE LAW REFORM COMMISSION OF HONG KONG


REPORT ON

HEARSAY RULE

IN CIVIL PROCEEDINGS



CONTENTS


Chapter Page


Introduction


Terms of reference

Hearsay: a definition and a brief historical overview

The English Law Commission’s Consultation Paper

The Hong Kong Consultation Paper

The English Law Commission’s Report

Our Approach to the Subject under Study



1. The Current Law in Hong Kong


A definition of hearsay evidence

Hearsay: the rationale for the rule of exclusion

Exceptions to the rule

Part IV of the Evidence Ordinance (Cap 8)

The common law superseded

The exclusionary rule relaxed

The conduct of examination at trial

Documentary records other than records produced by computer

Statements produced by computers

Rules of the Supreme Court

The hearsay notice

The counter-notice

Residual discretion to admit hearsay

Impeaching credibility

Weight of evidence

The costs factor

Common law exceptions preserved

Proceedings to which Part IV applies

Part V of the Evidence Ordinance: evidence of opinion and expert evidence

Related rules of practice and procedure






2. Practice


The litigation process

The English experience

Hong Kong’s experience with Parts IV and V of the Evidence Ordinance



3. The Strengths and Weaknesses of the Current Law


The strengths of the current law: Parts IV and V of the Evidence Ordinance

The weaknesses of the current law

The case for reform



4. Options for Reform


Major options for reform

The first option: abolition of hearsay rule subject to safeguards

The second option: retaining the hearsay rule but refining existing legislation

The third option: wide judicial discretion to admit

Views on consultation

Our view



5. Recommendations for Reform


General admissibility of hearsay evidence in civil proceedings

Hearsay evidence admissible under legislation other than the Evidence

Ordinance

Safeguards against abuse

Notice of intention to adduce hearsay

Power to call and to cross-examine additional witnesses

Statutory guidelines on weight of hearsay evidence

Competence of statement maker

Credibility of witness not called

Previous consistent or inconsistent statements of witness

Hearsay evidence formerly admissible at common law

Proof of documents and copies of documents

Business, computerised and other records

The meaning of “civil proceedings”

Rule-making powers

Savings

The meaning of “statement”

Power to exclude repetitious and superfluous evidence



6. Summary of Recommendations

Appendix


I - Sections 18 to 21 of the Evidence Ordinance, Cap 8


I I - Parts IV and V (sections 46 to 60) of the Evidence Ordinance, Cap 8


III - Order 38 of the Rules of the Supreme Court of Hong Kong


IV - Hearsay in other common law jurisdictions

Scotland

England and Wales

Northern Ireland

Ireland

New Zealand

United States of America

Canada

Australia


Introduction



Terms of reference


1. A reference was made to the Law Reform Commission in July 1980 that required it to consider the law and practice relating to evidence in civil proceedings. An interim study suggested that the terms of the original reference were too wide and that the subject should be divided into a number of topic areas, including hearsay. After considering the findings of the interim study, the Commission reframed the reference in August 1982, to limit the study to an examination of the law and practice in relation to the hearsay rule in civil proceedings.



Hearsay: a definition and a brief historical overview


2. Evidence is described as being hearsay where a witness proposes to testify to a particular fact on the basis of what he has been told by another, whether that communication was made to him directly or indirectly (for example, by way of information in a document)1. In practice such evidence is treated with caution; before reliance is placed upon it, the law normally requires certain safeguards be established.


3 In the criminal trial, hearsay evidence may be received in certain circumstances, but the emphasis in that process is on evidence of what a witness has actually perceived2. In contrast, hearsay evidence in civil proceedings, particularly evidence in documentary form, plays a much more important part and its use is commonplace.


4. Historically, the common law treated hearsay evidence with suspicion, developing a rule by which it was excluded subject to a number of exceptions. These exceptions were developed by judges to cover circumstances where long experience suggested that there was good reason to rely upon such evidence. Some statutory exceptions were also created. It eventually became clear, however, that the scope for refinement and revision of the law by the judiciary was severely limited. Consequently the common law and its exceptions were replaced in England and Wales by a comprehensive statutory system, the Civil Evidence Act 1968, which considerably relaxed the strict rule of exclusion. This Act was adopted in Hong Kong in 1969 as Part IV of the Evidence Ordinance (Cap 8).


5. Following these developments, the area regulated by the 1968 Act was expanded in England and Wales in the Civil Evidence Act 1972 to cover statements of opinion as well as statements of fact. This Act was adopted in Hong Kong in 1973 as Part V of the Evidence Ordinance.



The English Law Commission's Consultation Paper


6. In November 1990 the English Law Commission completed a study of the operation of the rule against hearsay in civl proceedings as modified by the Civil Evidence Acts 1968 and 1972 and published their findings shortly thereafter in Consultation Paper No 117, entitled The Hearsay Rule in Civil Proceedings ("the English Consultation Paper"). The paper reviewed the law and practice in England and Wales. It also provisionally recommended that the rule excluding hearsay evidence should be abolished, subject to safeguards against any abuses of the power to adduce hearsay. A number of safeguards were discussed and comment was invited on this basic proposal.


7. Those who responded to the English Consultation Paper generally supported the Commission’s provisional conclusions. The general view was that the current statutory regime was unwieldy, and that the relevant law was unnecessarily difficult to understand and in some cases outdated.



The Hong Kong Consultation Paper


8. In August 1992, the Hong Kong Law Reform Commission published a Consultation Paper ("our Consultation Paper"). The paper, which was circulated to interested parties for comments, examined the current law in Hong Kong on hearsay evidence in civil proceedings. It also described the English experience in the practical application of the Civil Evidence Acts 1968 and 1972, which are the English equivalents of Parts IV and V of the Evidence Ordinance (Cap. 8). Hong Kong's experience with the application of Parts IV and V of the Evidence Ordinance and the strengths and weaknesses of the current law were also discussed.


9. Our Consultation Paper put forward two options for reform, following those in the English Consultation Paper. The first option was to refine the existing legislation. The second option was to do away with the hearsay rule in civil proceedings altogether.



The English Law Commission’s Report


10. In September 1993, the English Law Commission published their final report on the subject, The Hearsay Rule in Civil Proceedings, (Law Commission No. 216) ("the English Report"). In the report, the English Law Commission recommended the abolition of the exclusionary rule, subject to certain procedural safeguards3, such as a duty to give notice of hearsay evidence where reasonable and practicable to do so, and a power given to a party to call a witness for cross-examination on his hearsay statement. Unlike the existing rule, the English Law Commission recommended that failure to give notice or adequate notice should not affect the admissibility of the hearsay statement but would go to the weight to be attached to it or lead to costs sanctions being imposed. The Civil Evidence Act 1995 was enacted in November 1995 to implement the recommendations of the Law Commission. Its provisions follow closely those contained in the draft Bill appended to the English Report.



Our approach to the subject under study


11. We have approached the subject by considering the recommendations contained in the English Report in the light of the public comments on our Consultation Paper. We have considered whether the English Law Commission's recommendations (and the Act which flowed from it) are applicable in the Hong Kong context.


12. We have also looked at the approach adopted in Scotland under the Civil Evidence (Scotland) Act 1988. That Act abolished the hearsay rule in civil proceedings in Scotland and removed any requirement for prior notification of hearsay evidence.


13. In making our recommendations, we have also considered the observations and recommendations made by the law reform bodies in Northern Ireland, Ireland, New Zealand, Australia, Canada and the United States of America on the law of hearsay.

CHAPTER 1


The Current Law in Hong Kong



A definition of hearsay evidence


1.1 The rule against hearsay at common law has been variously defined. The English Report adopted Cross's formulation:


"an assertion other than one made by a person while giving oral evidence in the proceedings is inadmissible as evidence of any fact asserted"4.


It should be noted that this formulation excludes not only assertions by persons who do not give evidence, but also previous statements by persons who give evidence at trial. Any assertion, whether made orally, in writing, or by conduct5, if made for the purpose of proving a fact, was inadmissible at common law unless it fell inside one of a number of recognised exceptions.



Hearsay: the rationale for the rule of exclusion


1.2 The rule against hearsay appears to have emerged at the beginning of the seventeenth century, at around the same time as the foundations of the adversarial process of trial were put in place6. The rationale for the rule was that a court would not receive and a jury should not consider evidence from a person who had not been tested by cross-examination. The maker of such a hearsay assertion would not have been bound by a solemn oath to tell the truth, and the jury had not had the benefit of seeing the witness and observing his or her demeanour. Thus, the jury would be incapable of weighing the evidence in the same fashion as for a witness who had appeared before them.


1.3 The rule against hearsay also coincided with another fundamental rule: that the court would insist on the best evidence being adduced of any fact alleged (the "best evidence" rule). This rule against weaker forms of proof would exclude attempts to adduce an assertion of a fact other than by calling the maker of that assertion.


1.4 The rule against hearsay incidentally gave the benefit of shortening the hearing: without such a rule, additional sources of evidence might have led to much lengthier trials.



Exceptions to the rule


1.5 Exceptions to the rule of exclusion evolved from cases where judicial experience demonstrated that evidence was sound, despite the taint of hearsay, and where circumstances necessitated reliance on a source that might otherwise be excluded7. These common law exceptions are still relevant today8. The English Consultation Paper neatly summarised the exceptions:


"In broad terms, the exceptions cover certain statements of deceased persons, namely declarations against interest, declarations in the course of duty, declarations as to public or general rights, pedigree declarations, dying declarations and statements by testators concerning the contents of their wills. Statements in public documents are generally admissible evidence of the truth of their contents. ... [Wilton and Co v Philips (1903) 19 TLR 390]. ... Admissions and voluntary confessions adverse to the maker's case are received as proof of the truth of their contents. ... [McKewen v Cotching (1857) 27 LJ Ex 41, 6 WR 16]. ... Testimony on former occasions, previous statements of witnesses, evidence through interpreters, evidence of age, ancient documents and reputation have all, in some circumstances, been recognised as justifying common law exceptions to the hearsay rule."9



Part IV of the Evidence Ordinance (Cap 8)


1.6 Until 1969 the hearsay rule in civil proceedings in Hong Kong was governed by the common law, with the addition of several statutory exceptions based upon English legislation10. The Evidence (Amendment) Ordinance (Ord 25 of 1969) added Part IV to the main Ordinance, thereby replacing the common law rule by statutory rules. The amending Ordinance followed the wording of the English Civil Evidence Act 1968. It came into operation in Hong Kong on 1 December 1970 for the purposes of civil proceedings in the Supreme Court and District Court and other civil proceedings to which the strict rules of evidence apply11. (Part IV of the Evidence Ordinance and Part V to which it is related are reproduced in the Appendix.)



The common law superseded


1.7 Section 46 of the Evidence Ordinance states:


"In any civil proceedings a statement other than one made by a person while giving oral evidence in those proceedings shall be admissible as evidence of any fact stated therein to the extent that it is so admissible by virtue of any provision of this or any other Ordinance or by agreement of the parties, but not otherwise."


The words "but not otherwise" emphasise that Part IV has superseded the common law rule and the common law exceptions to it12. It is also important to note that hearsay evidence may be adduced where the parties agree. Consequently, where there is consent (either express, or implied by the lack of any objection), there is no need to comply with the notification procedures discussed below.



The exclusionary rule relaxed


1.8 Section 47 is the heart of Part IV:


"(1) In any civil proceedings a statement made, whether orally or in a document or otherwise, by any person, whether called as a witness in those proceedings or not, shall, subject to this section and to rules, be admissible as evidence of any fact stated therein of which direct oral evidence by him would be admissible.


(2) Where in any civil proceedings a party desiring to give a statement in evidence by virtue of this section has called or intends to call as a witness in the proceedings the person by whom the statement was made, the statement-


(a) shall not be given in evidence by virtue of this section on behalf of that party without the leave of the court; and


(b) without prejudice to paragraph (a), shall not be given in evidence by virtue of this section on behalf of that party before the conclusion of the examination-in-chief of the person by whom it was made, except-


(i) where before that person is called the court allows evidence of the making of the statement to be given on behalf of that party by some other person; or


(ii) in so far as the court allows the person by whom the statement was made to narrate it in the course of his examination-in-chief on the ground that to prevent him from doing so would adversely affect the intelligibility of his evidence.


(3) Where in any civil proceedings a statement which was made otherwise than in a document is admissible by virtue of this section, no evidence other than direct oral evidence by the person who made the statement or any person who heard or otherwise perceived it being made shall be admissible for the purpose of proving it:


Provided that if the statement in question was made by a person while giving oral evidence in some other legal proceedings (whether civil or criminal), it may be proved in any manner authorized by the court."


1.9 Section 47(1) appears to be very wide, but it must be read with section 47(3): where the statement is oral or in some non-documentary form, subsection (1) is restricted to "first-hand hearsay"13. By implication, "second-hand hearsay" and "multiple hearsay" is admissible if adduced in a documentary form, or in a form that otherwise complies with the terms of Part IV14. It should also be noted that the admission of these out-of-court statements is also subject to "rules", the Rules of the Supreme Court ("RSC"), which are described in detail below15.


1.10 Section 47(2) permits a witness who is giving evidence in any civil proceedings to repeat a previous statement made by him, but only when the court gives leave, and only after examination in chief has concluded. This is meant to discourage the use of superfluous evidence by needless repetition. The two additional minor exceptions permit flexibility allowing evidence to be given in a natural fashion if the circumstances of the case so require.



The conduct of examination at trial


1.11 Section 48 states:


"(1) Where in any civil proceedings-


(a) a previous inconsistent or contradictory statement made by a person called as a witness in those proceedings is proved by virtue of section 12, 13 or 14; or


(b) a previous statement made by a person called as aforesaid is proved for the purpose of rebutting a suggestion that his evidence has been fabricated,


that statement shall by virtue of this subsection be admissible as evidence of any fact stated therein of which direct oral evidence by him would be admissible.


(2) Nothing in this Part or Part VI shall affect any of the rules of law relating to the circumstances in which, where a person called as a witness in any civil proceedings is cross-examined on a document used by him to refresh his memory, that document may be made evidence in those proceedings; and where a document or any part of a document is received in evidence in any such proceedings by virtue of any such rule of law, any statement made in that document or part by the person using the document to refresh his memory shall by virtue of this subsection be admissible as evidence of any fact stated therein of which direct oral evidence by him would be admissible."


1.12 This section provides fundamental rules on the conduct of examination and cross-examination of witnesses at trial as to:


Documentary records other than records produced by computer


1.13 Section 49 deals with the admissibility of certain documentary records as evidence of the facts stated in those records. (In contrast, section 50 deals with statements produced by computers and treats them in a different fashion.) Section 49 states:


"(1) Without prejudice to section 50, in any civil proceedings a statement contained in a document shall, subject to this section and to rules, be admissible as evidence of any fact stated therein of which direct oral evidence would be admissible, if the document is, or forms part of, a record compiled by a person acting under a duty from information which-


(a) was supplied by a person (whether acting under a duty or not) who had, or may reasonably be supposed to have had, personal knowledge of the matters dealt with in that information; and


(b) if not supplied by that person to the compiler of the record directly, was supplied by him to the compiler of the record indirectly through one or more intermediaries each acting under a duty.


(2) Where in any civil proceedings a party desiring to give a statement in evidence by virtue of this section has called or intends to call as a witness in the proceedings the person who originally supplied the information from which the record containing the statement was compiled, the statement-


(a) shall not be given in evidence by virtue of this section on behalf of that party without the leave of the court; and


(b) without prejudice to paragraph (a), shall not without the leave of the court be given in evidence by virtue of this section on behalf of that party before the conclusion of the examination-in-chief of the person who originally supplied the said information.


(3) Any reference in this section to a person acting under a duty includes a reference to a person acting in the course of any trade, business, profession or other occupation in which he is engaged or employed or for the purposes of any paid or unpaid office held by him."


1.14 Section 49 overlaps with section 47 and is also subject to the rules described below16. "Document" is very widely defined (in section 55 of the Ordinance) and can include photographs and sound and video recordings. Section 49(2) corresponds to the treatment of a previous consistent statement admitted under section 47. While this section is available to admit a wide variety of business and other records, including those from government offices, it is not available to deal with such records stored exclusively on a computer with no corresponding manual record. (Nor does section 49 permit proof of the non-occurrence of an event which should have been recorded if it had occurred.)



Statements produced by computers


1.15 Section 50 provides for the admission of a document produced by a computer. Section 50(1) states:


"(1) In any civil proceedings a statement contained in a document produced by a computer shall, subject to rules, be admissible as evidence of any fact stated therein of which direct oral evidence would be admissible, if it is shown that the conditions mentioned in subsection

(2) are satisfied in relation to the statement and computer in question."


Unfortunately, the conditions in section 50(2) are quite elaborate, requiring regular use of the computer over the period in question, regular supply of information to the computer, proof that the computer was operating properly and that the information supplied to the computer was derived from information provided in the ordinary course of any activities regularly carried on over the relevant period17. Notwithstanding these safeguards, section 50(2) does not refer to possible errors in the collection of or input of information to the computer, nor does it take account of possible errors in the computer's software.



Rules of the Supreme Court


1.16 The categories of hearsay statement described in sections 47, 49 and 50 are not made unconditionally admissible: the sections require compliance with the rules, specifically the Rules of the Supreme Court ("RSC") made under section 54 of the Supreme Court Ordinance (Cap 4)18. The rules governing the admission of hearsay statements in civil proceedings are found in Order 38 rules 20 to 3419. Subject to the District Court Civil Procedure (General) Rules, the RSC also apply to proceedings in the District Court20.



The hearsay notice


1.17 The broad thrust of these procedural requirements is as follows: any party wishing to adduce a hearsay statement which is admissible in evidence by virtue of sections 47, 49 or 50 of the Evidence Ordinance must serve a notice on all other parties of his intention to do so21. This notice must be served not later than 21 days before application is made to set down for trial. A copy of any documentary hearsay statement is required to be served with the notice. If the statement is non-documentary hearsay, admissble under section 47 of the Evidence Ordinance, the party who proposes to adduce it must give particulars of the maker and the substance of the statement. Reasons must be stated where the adducer of hearsay cannot call the maker of the statement, or where the adducer for some other reason proposes not to call him22.


1.18 There are additional procedural requirements for adducing hearsay statements contained in records not produced by a computer, which require the notice to specify the circumstances under which the record was compiled in terms of the requirements of section 4923. As for hearsay statements contained in computer records, particulars relating to the circumstances in which computer records are produced must be specified in the notice24.



The counter-notice


1.19 Should the opposing party require the maker of the hearsay statement to attend court, the opposing party must serve a counter-notice within 21 days after service of the hearsay notice described above25. If the party seeking to adduce the statement will not be calling the maker of the statement for one of the reasons specified in Order 38 rule 25, the other side must challenge that reason if he wishes to serve a counter-notice. If such a counter-notice has been served, the party proposing to adduce the hearsay statement has no right to use it in evidence unless the adducer satisfies the court that the maker cannot or should not be called as a witness. The matter may be resolved in a pre-trial hearing before a Master. Otherwise, the adducing party must rely on the court's residual discretion to admit evidence in Order 38 rule 29.



Residual discretion to admit hearsay


1.20 The operation of these detailed rules is subject to a residual discretion in the court to allow a hearsay statement which is admissible under section 47(1), 49(1) or 50(1) of the Ordinance to be given in evidence despite the fact that the rules have not been complied with26. This discretion is exercisable when the court considers it just to do so27. Additionally, the discretion may be exercised in favour of admission despite non-compliance where refusal to admit the evidence might otherwise compel one side to call the opposing party or his servant or agent28.



Impeaching credibility


1.21 It is important to note that if the maker of a statement is not called by a party, his credibility may still be impeached by the other party in a similar manner as if he had given evidence. Section 52 of the Evidence Ordinance permits any evidence otherwise admissible to destroy or support the credibility of a maker as a witness if he had been so called29. Evidence of inconsistent statements may also be called in the same manner as if the maker had been called30, even if such statements are themselves hearsay31.



Weight of evidence


1.22 Section 51 of the Ordinance provides guidance as to the weight to be accorded to hearsay evidence. The court is required to have regard to all the circumstances from which an inference can reasonably be drawn, and, in particular, whether or not the statement was made contemporaneously with the occurrence or existence of the facts stated, and whether or not the maker (or, for records, the first supplier of the information or other person concerned with compiling and keeping the records) had an incentive to conceal or misrepresent the facts32.



The costs factor


1.23 A needless challenge to the adducing of hearsay evidence may be penalised in costs. The court has a discretion to disallow or award costs against a party who unreasonably insists by way of a counter-notice on the attendance of a witness who is the maker of a statement that is admissible as a hearsay statement33.


Common law exceptions preserved


1.24 The reforms introduced by the 1968 Act removed the need for many of the old common law exceptions. Nonetheless, section 54 of the Evidence Ordinance retains certain long established rules governing admissibility of hearsay evidence formerly admissible at common law, in a fashion that preserves the existing case law and allows it to develop34. The retained exceptions fall into two categories: those where none of the provisions of the Ordinance regarding notice, etc, apply35 and a second category of exceptions which are regulated by the procedural safeguards mentioned above as far as possible36. The first category is much more significant and consists of




Proceedings to which Part IV applies


1.25 Section 68(1) of the Evidence Ordinance defines “civil proceedings” in Part IV as including, "in addition to civil proceedings in any court -


(a) civil proceedings before any other tribunal, being proceedings in relation to which the strict rules of evidence apply; and


(b) an arbitration or reference, whether under an enactment or not,


but does not include civil proceedings in relation to which the strict rules of evidence do not apply."


1.26 However, by the Evidence (Amendment) Ordinance (Commencement) Notice 1970, Part IV is applied only to the following civil proceedings37-


"(a) proceedings (other than proceedings in bankruptcy) in the Supreme Court and the District Court;


(b) proceedings before any tribunal, other than a court, to which the strict rules of evidence apply;


(c) arbitrations and references to which the strict rules of evidence apply;


(d) applications and appeals arising out of the proceedings mentioned in sub-paragraphs (a) to (c)."


1.27 Part IV is excluded from proceedings "to which the strict rules of evidence do not apply". In such proceedings a more relaxed, less formalistic view of the hearsay rule may be taken, recognising the informal nature of specialist jurisdictions38. Accordingly, a tribunal may accord a higher priority to helping to discover the truth rather than acting as a passive umpire, as is required in adversarial litigation in the High Court39.


1.28 The English equivalent of the proviso to section 68(1) of the Evidence Ordinance40 relaxes the rule for certain proceedings before the High Court and County Court. This is of considerable significance in wardship proceedings where the court takes a paternal role and the paramount consideration is the welfare of the child concerned. The court may therefore order that any appropriate enquiry be made into matters relevant to the child's welfare41.


1.29 It would appear that wardship proceedings in Hong Kong are subject to the strict rules of evidence. In England the law has been further relaxed in relation to other proceedings relating to the upbringing, maintenance and welfare of children42. The position in Hong Kong, however, is not clear43.




Part V of the Evidence Ordinance : evidence of opinion and expert evidence


1.30 At common law, consistent with the rule against hearsay, witnesses were limited to giving evidence about facts within their knowledge. Generally speaking, witnesses other than expert witnesses, were not permitted to give evidence of opinion in their testimony. Even in the case of expert witnesses the opinion of the expert would necessarily incorporate elements of hearsay as his opinion would draw on many sources of information, some identifiable and some not. Part V of the Evidence Ordinance, modelled on the English Civil Evidence Act 1972, extends Part IV beyond statements of fact to cover also statements of opinion and expert evidence44.


1.31 Sections 56 and 59(2) to (5), modelled on the 1972 Act, came into operation in Hong Kong on 1 July 1979 for the purpose of any civil proceedings (other than proceedings in bankruptcy)45. "Civil proceedings" is broadly defined as including "in addition to civil proceedings in any court-


(a) civil proceedings before any tribunal, being proceedings in relation to which the strict rules of evidence apply; and


(b) an arbitration or reference, whether under an enactment or not,


but does not include civil proceedings in relation to which the strict rules of evidence do not apply"46.


1.32 The admission of expert evidence is also subject to the Rules of the Supreme Court, but a different procedure is adopted to that applicable to statements of fact. The court is given extensive powers to determine whether to receive and to control the circumstances in which expert opinion is received in evidence, including steps in the pre-trial process47. Disclosure of experts' reports is encouraged and there is provision for meetings between experts on a "without prejudice" basis. In the usual case no expert evidence is adduced unless it has been disclosed in a manner ordered by the court. If both parties employ an expert, disclosure is normally ordered on a mutual basis. The aim of these rules is to avoid surprise and to narrow areas of dispute before expert witnesses are called at trial.



Related rules of practice and procedure


1.33 Affidavit evidence. The Rules of the Supreme Court anticipate the resolution of civil disputes at trial, and give detailed guidance for the preparation and conduct of the trial. The general rule is that witnesses at trial are to be examined orally in open court48. Nonetheless, there is provision for evidence to be received at trial by affidavit if the court thinks it reasonable to so allow49. Such proof by affidavit is not common in civil proceedings begun by writ, but is common in civil proceedings begun by originating summons and in judicial review applications. It is also usual to use affidavit evidence in the pre-trial process, for example, in support of interlocutory applications.


1.34 Similar rules of evidence apply to affidavit evidence as to evidence given on oath at trial in court: an affidavit may contain only such facts as its maker is able of his own knowledge to prove50. There are, however, important exceptions to this rule, the most important in practice being that affidavits used in interlocutory proceedings may contain statements of information or belief if the sources and grounds are stated51.


1.35 Concern has been expressed as to whether the provisions dealing with affidavits are consistent with the policy underlying Part IV of the Evidence Ordinance52. For example, if one party proposes to use an affidavit at trial, filing the affidavit presumably removes the need to comply with the notice requirements that would otherwise apply to the evidence of the witness53. The affidavit is supposed to be taken as notice. The same rule also requires compliance with another rule, which impliedly excludes any hearsay content from the affidavit54. This requirement stands in the way of the employment at trials of affidavit evidence55 which contain hearsay.


1.36 Exchange of witness statements. Recent amendments to the Rules of the Supreme Court, following the English example, promise to alter radically litigation practice. The court's powers to order exchange of all experts' evidence prior to trial56 and to order the prior exchange of witness statements have been strengthened57. The change is designed to promote greater openness in pre-trial procedure58, as the exchange of such statements is now mandatory59. The service of a witness statement under the new rule is treated as a notice under the Evidence Ordinance if it is expressly so stated by the serving party. It is at least arguable that, where statements of witnesses and experts have been so exchanged, hearsay notices should be modified or even dispensed with as the dangers of surprise have been to some extent avoided.


1.37 This change in procedure appears to have met a mixed reception in England and Wales. Mr Justice Millet, a visiting English Chancery judge, expressed the view that a witness statement could not be a substitute for oral evidence-in-chief60. A witness statement could not be regarded as "pre-packaged testimony": it was more the product of the lawyer who prepared it than the witness who signed it. The learned judge acknowledged that cross-examination was the essential safeguard, but this was not by itself a complete substitute for testimony-in-chief. It was not yet apparent that this change had promoted settlements, the strongest argument in favour of the reform. In his view, the new procedure, on the other hand, certainly added to the costs of proceedings.61


1.38 Evidence by video link or video recording. There has long been provision for the examination of witnesses abroad by means of a letter of request62. The process is well established, but rather long-winded and expensive. There is recent English authority that suggests a quick and convenient means of obtaining evidence for trial by using section 2 of the 1968 Act (section 47 of the Evidence Ordinance). In Garcin v Amerindo Investment Advisors Ltd, Morritt J granted the plaintiff's application for evidence to be given by video conference link. He made his order under Order 38, rule 3. His reasoning is worth recording 63:


"the first point to consider is whether evidence given by a witness abroad by means of a television linkage is admissible at all. Such evidence would be given by a witness in a place where he made his oral statement, namely, the United States. As such it would be admissible under section 2 of the Civil Evidence Act 1968 if proved by one who heard it. Moreover, any video tape of the examination and cross-examination of a witness overseas would be similarly admissible as a document in which the statement was made: see section 10. Thus, if both parties and the witness cooperate, a video tape of the examination and cross-examination of a witness overseas would be admissible in evidence in proceedings in England. Moreover, in such a case, the evidence so obtained would be of greater weight than the ordinary Civil Evidence Act statement, because the witness would have been cross-examined and the judge would have had some opportunity to observe the demeanour of the witness."


CHAPTER 2


Practice



The litigation process


2.1 Civil litigation in the adversarial system involves a number of distinct phases.



2.2 In practice, very few civil actions proceed to trial64. The vast majority of claims settle or conclude in consent judgments, without resort to trial. Litigation is an uncertain business and the more advanced the process, the more expensive it becomes. Parties are ever mindful of compromise. The consideration of the evidence and determining the part that hearsay evidence might play in the litigant's case should take place at about the time of the summons for directions stage, the final interlocutory stage after which the matter can be set down for trial.


2.3 The summons for directions. In the typical High Court action in Hong Kong a hearing takes place following the issue of a summons for directions. There is a standard form of summons which lists a number of matters which may require a ruling by the court. The hearing is intended to provide "a thorough stocktaking relating to the issues in an action"65, to review preparations to date and to provide directions for any further preparation necessary for trial.


2.4 The standard form contains a direction that the case be set down for trial within a certain period of time and provides for an estimate of the length of the trial66. On the hearing of the summons for directions, it is usually the case that the paragraph to set the matter down for trial is completed as "adjourned to a date to be fixed". Subsequently, once a party is in a position to set the case down for trial, the legal representative for that party (usually the plaintiff) will arrange to restore this paragraph of the summons for directions.


2.5 A hearing is then held before the Listing Judge. Except where the parties are unrepresented, appearances before the Listing Judge should be by barristers or by the solicitor who handles the case or who is familiar with the case. The Listing Judge will require the barrister or solicitor to confirm that he can comply with the “checklist” of steps to be taken prior to the granting of leave for the case to be set down for trial. The current checklist employed in the courts includes a question: “Have all hearsay notices or counter-notices been served? If not, when will they be served?” Save in exceptional circumstances, the Listing Judge will not grant leave to set the case down for trial unless the case is in every respect ready. Hence, the Listing Judge may sometimes refuse to set the case down for trial even if both parties indicate that they will serve any requisite notices, in particular if the case is to be fixed in the Running List.


2.6 Hearsay notices: theory and practice. If the parties' cases have been meticulously prepared and the respective counsel have advised on evidence, then notice could be served before application is made to set down for trial, in the manner specified and within the time frame required by the Rules of the Supreme Court. Experience in England suggests that parties are rarely able to fully comply with the rules; a similar situation was revealed in our initial consultation in Hong Kong67.


2.7 Moreover, several responses to our Consultation Paper indicated that the notice procedures are often not observed in Hong Kong, partly due to their complexity and inconvenience. The Bar, for example, commented that deficient hearsay notices, which are no more than repetition of the documents enumerated in the list of documents, are sometimes served. There are also cases, said the Bar, in which the necessary hearsay notices are not served and the opening day of the trial is taken up by the defaulting party applying for the court's discretion to admit the hearsay evidence.



The English experience


2.8 The complexity of the 1968 Act and the rules. In England and Wales the "single loudest complaint against the 1968 Act is that the notice provisions which it contains and the rules of court made under those rules are so complex that practitioners have avoided using them"68.


2.9 Criticism was not so much directed at the need for notification, but at the inconvenience and difficulty of correctly categorising in advance evidence of a hearsay nature69. There was a particular problem with foreseeing oral hearsay in sufficient time to give the required notice. The effort of identification and classification of hearsay was costly in legal time. This was the case even where much of the hearsay evidence, in particular business records, was unlikely to be controversial70.


2.10 The response on consultation had led the English Law Commission to the conclusion that there was widespread dissatisfaction with the complexity of the rules and compliance with them "may have become the exception rather than the rule, with the parties relying on the discretion of the court to admit the hearsay evidence".71


2.11 Gaps in the law. A significant gap in the treatment of records by the 1968 Act is the way in which it deals with computer records. Documents and other evidence stored on or generated by computer play an increasingly significant part in litigation, as many businesses place their records directly onto a computer or retain hard copies of records only for a brief period. It is possible that section 5 of the 1968 Act72 fails to deal with such records because section 5 "does not build in the element required of other categories of permitted, reliable, second-hand hearsay, namely personal knowledge of the information put in, which is the area most easily recognised as the source of inaccuracy of computer-held information"73.


2.12 The English Consultation Paper also recorded other concerns which had been expressed regarding the treatment of computer records:-



2.13 Records too widely defined. Three further failings in the treatment of records were identified by practitioners and commentators:



2.14 Consultees in England took the view that the rules relating to records were based on an old fashioned view of business methods and office procedure, where records were kept manually and where overall responsiblity could be attributed to individual record keepers.84 Nowadays, as record keeping has been taken over by technology, the requirement to identify a person with a duty to compile the information is often unrealistic.


2.15 Inappropriateness of strict rules in some cases. The English Consultation Paper made the case for excluding the strict rules of evidence from any court proceedings involving issues concerned with the welfare of children85. There was also a case for relaxing the strict rule in all matrimonial proceedings86.


2.16 H v H and K v K. Reform had been prompted in England and Wales by the decision in H v H and K v K (Minors)87. These were appeals from judgments at first instance where the court had partly relied on findings of fact that sexual abuse had occurred on the basis of statements made by young children to social workers, who were not at the time court welfare officers appointed to prepare court reports88. The English Court of Appeal held that matrimonial proceedings under the Matrimonial Causes Act 1973 were subject to the 1968 Act.


2.17 The Court of Appeal found that, unlike in the wardship jurisdiction, matrimonial proceedings were adversarial and the rule against hearsay evidence had to be observed unless waived by the consent of the other party. Furthermore, in civil proceedings the unsworn evidence of a young child was inadmissible and therefore statements made by the child could not be admitted under section 2(1) of the 1968 Act.


2.18 The decision caused great concern: if welfare reports were unavailable the court might not be able to act. Even if such reports were available, the evidence of another person who received a statement had to be conveyed indirectly through a welfare officer's report89. The situation was corrected when the Lord Chancellor made orders under section 96(3) of the Children Act 1989 disapplying the hearsay rule in the High Court and a county court in civil proceedings concerning the upbringing, maintenance or welfare of a child90.


2.19 The English Consultation Paper advanced the view that a strict application of the hearsay rule is probably incompatible with the court's functions when dealing with the welfare of children91. These functions are exercised in wardship proceedings, proceedings under the matrimonial causes legislation, or care proceedings in the juvenile courts. Rules of evidence and court practice should, if possible, be uniform when dealing with similar subject matter. To a large extent this uniformity was achieved in England and Wales with the full implementation of the Children Act 1989, which allows transfer of children's proceedings between different levels of courts according to the complexity of the proceedings92. With strict rules disapplied, the evidence of a child recorded on video could itself be admitted into evidence93.


2.20 The English Consultation Paper suggested that it was artificial in some family proceedings to distinguish a child's welfare from that of his family94. It might be impractical and difficult to separate child welfare from other issues to which the 1968 Act might apply. Child welfare shared a characteristic with other issues encountered in family proceedings: the need for the court to look to the future. For this role to be adequately fulfilled the court required flexibility. Thus, it might be preferable if the hearsay rule were abrogated in all family proceedings95. The authors of the English Consultation paper commented:


"Justiciable issues may often take second place to the role of the court in exercising discretion in the granting of relief, based on an assessment of the likely future developments and of best interests. The character and personalities of the people concerned are often relevant to the exercise of this discretion in a way which is seldom if ever encountered in other types of litigation"96.


2.21 Magistrates' courts. The provisions of the Civil Evidence Act 1968 do not apply to magistrates’ courts. The Law Reform Committee, whose recommendations lead to the 1968 Act, have stated:


"For lay magistrates to have to apply different rules of evidence according to the kind of case which they were trying would, we think, be confusing for them and might give rise to difficulties and errors in both criminal and civil cases"97.


The Committee also considered that the procedural safeguards and the element of judicial discretion could not readily be adjusted to fit into the scheme of summary proceedings. There was a need to avoid complex rules where parties were often unrepresented. Notwithstanding the Committee's observations, there is power to extend the 1968 Act to magistrates' courts in section 20(4) of that Act, but it has yet to be employed.


2.22 In England and Wales magistrates have an extensive civil jurisdiction. It includes the collection of local taxes, licensing and a matrimonial jurisdiction. The system works, but its shortcomings are apparent:-





2.23 An appraisal of the 1968 Act. The English Consultation Paper made the following appraisal of the overall performance of the 1968 Act:


"Despite the criticism of the notice procedures, the 1968 Act with its procedural safeguards and judicial discretion has in practice regulated the admissibility of hearsay evidence in a way which has not provoked complaints of injustice ... the 1968 Act was successful in simplifying to a considerable degree the confusion of the common law rule. It remedied most of the practical problems that had been experienced under the common law rule and rendered irrelevant arguments as to whether evidence was admissible under other rules of evidence, for example as res gestae or as a self-serving statement. It provides clarity by its express provision describing the evidence of a hearsay nature which needs to be regulated."103


2.24 The criticism of the notice procedures was directed at their complexity and the cost of strict compliance, and not at the need for prior notice which was seen as giving benefits to both parties to the dispute.104


2.25 Little or no critical comment appears to have been directed at the 1968 Act's safeguards whereby evidence may be introduced to challenge the credibility of the maker of a hearsay statement. The existing provision of cost penalties and the residual discretion to admit evidence also appear to be well accepted by practitioners105.


2.26 Two factors appear to play a role in permitting the 1968 Act to operate without giving rise to complaints of injustice:-