Reed Smith Client Alerts

Since our previous alert on this topic in August 2020, there has been a further Court of First Instance (CFI) decision, shedding more light on the circumstances in which the court may grant or dismiss an application to allow an overseas witness to testify by way of video conferencing facilities (VCF) for reasons relating to COVID-19: Wah Lun International Development Limited v. Lau Chiu Shing [2020] HKCFI 2572. The CFI held that, aside from the starting position that proceedings should be conducted in court, being examined under the solemn atmosphere of the court was of particular importance if the main issue between the parties was a factual one and the witness’ credibility would be hotly contested. The general inconvenience due to quarantine arrangements was not sufficient to justify leave being granted. The health risks from air travel were accepted as a legitimate concern, although, in the present case, the short flight duration between Singapore and Hong Kong and appropriate precautions on-board were seen as sufficient countervailing factors.

Summary of facts

P applied on 18 September 2020 for leave to allow its witness, Mr Jia Bin (Jia), who was living in Singapore, to testify via VCF at the trial scheduled to commence on 27 October 2020, with five days reserved.

The claims and disputes arose out of a due diligence agreement in relation to the purchase by P from D of a majority shareholding in a listed company (the Due Diligence Agreement).  Pursuant to the Due Diligence Agreement, P paid D earnest money in the sum of RMB 20,000,000 (the Earnest Money). P argued that issues which came to light during the due diligence exercise had not been satisfactorily resolved and that the Earnest Money had, as a result, become refundable. D’s defence was that the parties had entered into an oral sale and purchase agreement (the Oral Agreement), and that the Earnest Money had become non-refundable and remained a forfeitable deposit under the Oral Agreement. D further claimed repudiatory breach by P for failing to complete the transaction, thereby forfeiting the Earnest Money.

The main issue to be resolved during the trial was whether the parties had entered into the Oral Agreement. According to D, the Oral Agreement was reached orally during a “personal meeting” in 2015 between Jia and D (the Personal Meeting). P accepted, therefore, that Jia’s evidence would be important in the resolution of the main issue and that his credibility would be hotly disputed.