HOI TIN TONG CO LTD v. CHOY KWOK KEUNG

HCA 1755/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1755 OF 2013

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DECISION

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Introduction

1.  The respondent took out three summonses on 11 November 2015 after this court handed down the decision dated 29 October 2015 (“the Decision”) whereby the appeal of the plaintiff was allowed with a costs order nisi made. The three applications are: (1) leave to appeal against the Decision, (2) stay of execution pending appeal and (3) variation of the costs order nisi. I shall deal with these applications in turn.

2.  In this decision, I shall refer to the background facts narrated in the Decision and shall make no repetition thereof. I also adopt the abbreviations used in the Decision.

Leave to appeal

3.  Briefly put, in the Decision I held that on the evidence the newspaper rule did not avail the respondent to resist the specific discovery of the original, unedited and unprocessed source video(s) used in the making of the Offensive Video (“the source video”). My main reason is that I am not satisfied on the facts that there is any unidentified source of information calling for protection by the newspaper rule. I did not say that by reason of certain special circumstances, the newspaper rule should not be applied.

4.  Mr Ho, for the respondent, confirms that the respondent agrees that the source video(s) is relevant to the plaintiff’s claim against the defendant. He however insists that the newspaper rule does entitle the respondent to refuse such discovery.

5.  In the draft Notice of Appeal, altogether 12 grounds are advanced. I do not think any of them is arguable and they can be disposed of as follows.

6.  First, it is alleged that despite the lack of special circumstances, I made a wrongful departure from the newspaper rule. My conclusion is in fact that in view of the particular circumstances of this matter, the newspaper rule cannot be invoked at all.

7.  Second, it is alleged that I erred in that I relied on the agreement between the plaintiff and the defendant that one of the informants was Madam Lam and concluded that there was no need for the respondent to conceal the identity of their informant.

8.  The agreement is only one of the reasons why I conclude that the Lady featured in the Offensive Video was Madam Lam. The Lady’s nametag bearing the Chinese name of Madam Lam (林日紅)[1] prima facie confirms the validity of the agreement. There is, however, no suggestion let alone evidence that the agreement is wrong in fact.  

9.  The third, sixth to ninth grounds relate to burden of proof. It is contended that I erred in placing a burden on the respondent to adduce evidence to deal with the contentions of the plaintiff before the respondent can invoke the newspaper rule.

10.  I am not convinced that I fell into error as alleged. In my view, a newspaper publisher cannot possibly invoke the newspaper rule as an absolute and unquestionable shield only by reason of its own status. As explained in the Decision, the newspaper rule should only be invoked when there is a genuine purpose to serve. It is to protect the unidentified source of information supplied to a newspaper.

11.  In the present case, Ms Lee of the respondent contends that the newspaper rule was necessary to avoid disclosure of the true identities of the informants. It follows that if the identities of all the informants have already been exposed, the newspaper rule is no longer required to conceal their identities.

12.  In the Offensive Video, the defendant was expressly identified to be the whistleblower (爆料人). His name and face were clearly shown. He was a former shareholder of the plaintiff. He was said to have led the reporter of the respondent to the kitchen area of the shop premises where the Lady, described to be the staff of the shop, performed the demonstration recorded in the Offensive Video. It was more likely than not that in those circumstances the defendant must know who the Lady was. Indeed he agrees that she was Madam Lam. Moreover, as mentioned, the Lady had the nametag revealing her Chinese name on her T-shirt albeit her face was not shown throughout.

13.  I would accept that a newspaper is not obliged to contradict any allegation about the true identities of its informants in usual situations. I believe that one of the reasons is that the true identities of its informants may be found out by elimination.

14.  However, this court is dealing with a special situation here. 

In light of all such unchallenged evidence, most of which emanating from the Offensive Video and hence the respondent, in the absence of contrary evidence, on the balance of probabilities, this court can only be driven to the conclusion that the Lady was indeed Madam Lam.  It is not really a matter of burden of proof. This court is of course entitled to look at the whole picture to see whether any reliance on the newspaper rule can be justified.

15.  If the respondent still wishes to rely on the newspaper rule to resist discovery, I would have thought the respondent must satisfy this court the true identity of the Lady is still not known to the public and therefore warrants protection against disclosure by the newspaper rule. At the very least, the respondent has to say that the Lady was not Madam Lam. In the absence of such an allegation, in my judgment, the newspaper rule ceases to have any application.

16.  To support his submission that there is no need for the respondent to prove anything before the newspaper rule can be invoked absent special circumstances, Mr Ho refers to the following dictum of Richardson J in Broadcasting Corporation v Alex Harvey Industries Ltd [1980] 1 NZLR 163 at p.173:

“There is no suggestion in any of the cases that an inquiry of the kind contemplated in this submission is proper. The reason is obvious enough. The newspaper rule does not rest on the favourable exercise of the Court’s discretion in particular cases. It is not a discretionary rule. It is not matter of satisfying the Court that the public interest would be advanced in the particular case. All that is assumed by the rule itself. For reasons of public policy the rule is one to be applied by the Courts as a matter of course except where special circumstances are established warranting a departure from the rule.”

17.  I indeed agree to the foregoing analysis of Richardson J. It was made in the context of the specific question posed in the preceding paragraph of the judgment (at p.172) as to whether the newspaper rule applies only in those cases where the public interest so requires, or, alternatively, where the public interest in protecting the source outweighs the party’s right to discovery and the public interest in maintaining that right.

18.  The dictum has to be understood in that light. What is assumed by the rule is that the public interest in protecting the source outweighs the party’s right to discovery and the public interest in maintaining that right. The advancement of the public interest is assumed but it is worthy of note that the public interest is in the protection of the source of information. 

19.  In the present case, I should also assume that the public interest in protecting an unknown source should prevail. I am just not satisfied on the evidence that there is an unknown source to be protected.

20.  Mr Ho further submits that the respondent should not be required to explain why the Lady wore such a nametag. He submits that there can be a possibility that the Lady was asked by the respondent to wear the nametag bearing the name of another person so as to conceal her own identity.

21.  I did not require the respondent to explain why the Lady wore the nametag. It is only logical to assume that the nametag was serving its normal function. If this is not the case, I see no reason why the respondent did not even make the slightest suggestion in the evidence.  Even if the respondent had said so, the true identity of the Lady would not have got any closer to exposure.

22.  The fourth ground is that I erred in my finding that the nametag on the T-shirt of the Lady being one of the informants was conspicuously shown in the Offensive Video and hence her true identity was exposed.  The fifth ground is that I thereby erred in concluding that the Lady was Madam Lam because of the nametag.

23.  I do not have any doubt about my observation on the nametag. In the absence of any contrary evidence, I do not think my conclusion can be faulted.

24.  Lastly, it is alleged that I placed a burden on the respondent to disclose whether their informants have provided any other information to the respondent not disclosed in the Offensive Video before the respondent can invoke the newspaper rule. I did not.

25.  It is also remarkable that the respondent opposed the application only on the basis that the identities of the Lady and the unidentified male had to be kept confidential and not that they had provided other information in the source video which was not contained in the Offensive Video. There is no such suggestion at all.

26.  In passing, I wish to point out that in this application, no complaint is made about my observations about the unidentified male in the Offensive Video. According to the voiceover in the Offensive Video, the defendant being the whistleblower led its staff to the kitchen area of the shop premises to shoot the Offensive Video. The defendant was already unequivocally identified to be the informant. Whether or not he actually made the Utterance would not further disclose his identity. If it was another person and not the defendant who made the Utterance, I fail to understand why the respondent did not say so in order to support its contention that it had to protect such an undisclosed informant. This indication can cause no prejudice to the respondent.

27.  The eleventh and twelfth grounds relate to the complaint that the discovery granted is excessive for the purpose of the plaintiff without affording any protection of the disclosure of the identities of the respondent’s informants.

28.  I heard no debate about the scope of the discovery sought by the plaintiff and I am not convinced that it is excessive. There is simply nothing in the evidence to suggest that the source video would disclose other informants not featured in the Offensive Video. Nor did Mr Ho make such submissions.

29.  Lastly, in his written submission, Mr Ho raises the interests of justice ground to the effect that the application of the newspaper rule would have a far-reaching effect on the news media in Hong Kong. I am not convinced that it is a valid ground. I did not have a different idea of the century old rule. The Decision was merely made on the basis of the specific facts of the present case. It is indeed a peculiar case in that a purported confidential informant wore a nametag showing her name and another informant expressly characterized as the whistleblower was given complete exposure in a video clip.

30.  In view of the above analysis, I am of the view that the respondent fails to meet the threshold to show that its intended appeal has a reasonable prospect of success: Wong Kar Gee Mimi v Severn Villa Ltd [2012] 1 HKLRD 887 per Kwan JA at §§29-31. I therefore refuse to grant the respondent leave to appeal.

Stay of Execution

31.  Mr Ho makes it clear that the respondent will apply to the Court of Appeal for leave to appeal if this court refuses to grant the leave. He makes a valid point, and I accept, that its appeal will be rendered nugatory if a stay of execution is not granted.

32.  I am however of the firm view that the respondent has no arguable grounds of appeal. It follows that there is no valid basis to order a stay of execution. I hence dismiss this application too.

Variation of costs order nisi

33.  In the Decision, I made an order nisi that there be no order as to costs as per the plaintiff’s application including the hearing before the master. As regards the costs of the appeal, I made an order nisi that the respondent should pay the plaintiff its costs of this appeal, to be taxed if not agreed.

34.  The respondent now wishes to vary the costs order nisi to either (a) the plaintiff bear all the costs of the application including the hearings before the master and this court or (b) there be no order as to costs in respect of the entire proceedings including the appeal hearing before me.

35.  In the Decision, I referred to Section 43(2) of the High Court Ordinance, Cap.4 (“the Section”) as my starting point of consideration. I found the unexplained non-response of the respondent to be sufficient to justify my deprivation of their entitlement to costs to be paid by the plaintiff. I further observed that the respondent’s objection was not so unreasonable that it should pay the plaintiff its costs of the application.

36.  At this hearing, I am persuaded by Mr Ho that given the stance of the respondent, its reply letter, if issued, would not have made much difference or obviated the need for the plaintiff’s application. It would be harsh for me to depart drastically from the usual costs order in this kind of discovery against non-parties applications on that basis.

37.  Nevertheless, I maintain my view that as a matter of professional courtesy, the respondent should have replied to the plaintiff. To mark my disapproval, I now order that the plaintiff do bear 90% of the costs of the application including the hearing before the master.

38.  For the costs of the appeal hearing before this court, I see no reason why costs should not follow the event. Mr Ho submits that the usual costs order in the Section should also cover the appeal hearing, which was merely a rehearing of the plaintiff’s application. I cannot agree.

39.  The fact that the respondent was successful before the master does not mean that it could not have taken a proper view of the matter when the plaintiff commenced this appeal. The respondent should be in a position to assess the merits of the application after the full debate before the master. This appeal was not unavoidable in my view. Having failed to defend the decision of the master, the respondent should be ordered to pay the costs of the appeal of the plaintiff. I see no reason to vary this part of the costs order nisi.

Conclusion and Order

40.  In the premises, I dismiss the respondent’s application for leave to appeal and a stay of execution. I make a costs order that the respondent do pay costs to the plaintiff in respect of these two applications, to be taxed if not agreed.

41.  For the application to vary the costs order nisi, the respondent has a limited success. Still the respondent had to come to this court to obtain a more favorable costs order. I make an order that the plaintiff do pay the respondent its costs of this application, to be taxed if not agreed.

[1] 1’19” to 1’22” in the Offensive Video.