DR CHAN HIN KEUNG HENRY v. APPLE DAILY LTD AND OTHERS

DCCJ1474/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1474 OF 2013

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DECISION

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INTRODUCTION

1. By way of two summonses taken out by the plaintiff and the 1^st to 3^rd defendants (“the defendants”), the plaintiff applies for an order to strike out part of the defendants’ witness statements; where the defendants seek leave to amend their defence.

2. It is indisputable that the evidence in the defendant’s witness statements contained evidence beyond their pleaded defence.  The defendants' application to amend the defence is to plead further and to encapsulate relevant part of defendants’ witness statements which are subject to striking out.  The defendants’ application to amend the defence is determinative because should it be allowed, the plaintiff’s application to strike out irrelevant part of the defendants’ witness statements will fail.

3. The issues are, whether the amendment is justified and if so, whether leave should be granted in this late application.

BACKGROUND

The pleadings

4. This is a defamation action.  The plaintiff is and was, amongst others, a practicing chiropractor in Hong Kong; and the President of the Hong Kong Chiropractors Association Limited.  The plaintiff claims the defendants for damages and other reliefs arising from three alleged defamatory articles and offending words published in Apple Daily and of which were uploaded on the Apple Daily Website on 26 November 2012.

5. The three articles concerned were published in page A8 of the Apple Daily.  The respective headlines of the three articles, as pleaded in the statement of claim, are:-

“(1)	CKB層壓式推銷綱上課程聲稱介紹兩人入會可賺一億美金”
	The plaintiff pleaded a true translation as “CKB168 pyramid scheme market sales of online courses Claims (if) introduce two persons into the club Can earn 100 million US Dollars”.
“(2)	脊醫學會會長任董事”
	The plaintiff pleaded a true translation as “President of the Chiropractors Association as Director.”
“(3)	騙案多加插投資元素”
	The plaintiff pleaded a true translation as “Many scams incorporate investment elements.”

6. The plaintiff highlighted relevant lines in the 2^nd article:-

“(1)	本港有多間以CKB168或嘉高賓尼名字註冊的公司，不排除銷售課程的是一間公司，街外人入股的是另一間公司。而脊醫學會會長陳顯強是其中一間公司的股東兼董事 ……”
	The plaintiff pleaded a true translation as “In Hong Kong, there are a number of companies registered in the names of CKB168 of Gah-Goh-Bun-Nei [transliteration], it is not ruled out that the one which sells courses is one company, the one with shares subscribed by street outsiders is another company. And the President of the Chiropractors Association Chan Hin Keung is a shareholder and director of one of the companies….”
“(2)	CKB168的「全球總部」在尖沙咀新東海商業中心一單位，該址最少有五間公司註冊（見表）。香港脊醫學會會長陳顯強，是其中一間「嘉高賓尼（集團）有限公司」的股東兼董事，佔股25%，陳同時是非州納米比亞註香港及澳門的名譽領事，中華人民共和國港澳特區名譽領事團團長，香港政策研究所董事會成員，以及澳洲【門】鏡湖醫院顧問醫生。”
	The plaintiff pleaded a true translation as “The ‘Global Headquarters’ of CKB168 is at a unit in Tsim Sha Tsui New East Ocean Centre, that address is registered by at least five companies [see Table].  The President of the Chiropractors Association Hong Kong Chan Hin Keung, is a shareholder and director of ‘Gah-Goh-Bun-Nei (Group) Limited’ (transliteration), holding 25% of its shares. Chan is at the same time the Honorary Consul of Republic of Namibia Africa in Hong Kong and Macau, the Chairman of the Association of Honorary Consuls in Hong Kong and Macau SAR, PRC a member of the Board of Directors of Hong Kong Policy Research Institute, and a consultant doctor at Kiang Wu Hospital Australia (sic) [Macau]”.

7. The plaintiff complained, the 3 articles were published side by side on the same page in the Apple Daily, the attention of a reader when reading the 1^st article would invariably be drawn towards the 2^nd and 3^rd articles.  In the electronic version of the 1^st article, a website contained a hyperlink to the two other articles posted/published on the website.  The plaintiff said, the 3 articles are meant to be read in conjunction with each other.

8. The plaintiff further pleaded, the natural and ordinary meaning in the 2^nd article, amongst others, that:-

(1)  The plaintiff has an interest/deal in the business participates in the activities or operations of the company mentioned in the 1^st article, which was alleged to be a scam operation involved in pyramid sales activities;

(2)  There is a nefarious connection between the plaintiff’s shareholding in CLAP Group Limited（「嘉高賓尼（集團）有限公司」）and the operations of the company mentioned in the 1^st article, which was alleged to be a scam operation involved in pyramid sales activities.

The defence

9. The defence was drafted by Ms Lau, counsel for the defendants and was filed on 25 July 2013.  The 1^st to 3^rd defendants only pleaded:-

(1)  There is a number of companies in Hong Kong with registered names containing references to CKB 168 or“嘉高賓尼”.

(2)  The plaintiff is a shareholder and director of one such company「嘉高賓尼（集團）有限公司」.

(3)  A reporter of the Apple Daily went to the plaintiff’s clinic at Units 1 & 2, 13^th Floor, Kin Tak Fung Commercial Building, 467-473 Hennessy Road, Hong Kong and in the vicinity of the clinic attempted to speak to the gentleman depicted in the photograph in the 2^nd article, who had entered and exited the clinic, and whom the reporter thought was the plaintiff.  However, the gentleman denied he was the plaintiff.

10. The defendants seek leave to plead:-

(1)  the effect of the 1^st to 3^rd articles to be read in conjunction with each other;

(2)  fair comment; and

(3)  Qualified privilege and Reynold’s privilege.

The witness statements the plaintiff applied to strike out

11. The principle governing striking out witness statements is well decided in Well Weaving Dyeing & Printing Ltd v Able Billion Textiles [2013] 2 HKLRD 479, §5, in summary, evidence that bears no relevance to the pleaded issues in dispute is scandalous and is inadmissible and liable to be struck out.

12. Ms Lau agreed, the defence did not plead facts related to the two aspects of both Ng and Tam’s witness statements. The plaintiff applies to strike out

(1)  paragraphs 39-42 of the witness statement of Ng Ngar Him（伍雅謙）, in that Ng introduced the recent development of the alleged pyramid selling scheme in the United States. He relates that with a complaint of the Securities and Exchange Commission in the United States dated 17 October 2013, almost 11 months after the publication, (“the SEC Complaint”). 

(2)  Paragraphs 47-56 of Tam Siu Han Patty’s witness statement relate to evidence of the defence of Reynold’s privilege.

ANALYSIS

The amendment

13. The application to amend is premised on Order 20 rule 5(1) of the Rules of District Court where the court may at any stage of the proceedings allow amendment.

14. Ms Lau emphasized the general principles of granting leave to amend pleadings are that, amongst others, it is necessary to enable the real questions in controversy between the parties to be decided (See: Ketteman v Hansel Properties Ltd [1987] AC 189 at §212F-H).  Leave shall be readily granted to amend before trial unless it can be demonstrated that the new claim based on the proposed amendment is bound to fail.  (See Natamon Protpakorn v Citibank NA [2009] 1 HKLRD 455 at §§25 and 45; Global Bridge Assets Ltd & ors v Sun Hung Kai Securities Ltd [2011] 4 HKC 9 §§37, 53 & 59).

15. Mr Lui, counsel for the plaintiff, opposed on the ground that the amendment is not necessary.  

16. Having considered the new limbs of defence, one could not resist they are real questions of controversy. The effect of the 1^st to 3^rd articles to be read together is naturally the plaintiff’s case. Lucas-Box defence is made to justify a lesser meaning of the 2^nd article. Fair comment being well established defence and by way of introduction of the SEC Complaint, the defence of qualified privilege and Reynold’s privilege could be substantiated.  I am satisfied the amendment contained defence which are not those bound to fail, the defendants’ amendments of the defence fall within the ambit of the general principles laid down in Katteman and Natamon Protpakorn. Solely on the application on amendment of the defence, it is justified.

Late application

17. The defendant’s application to amend the defence is taken out at a very late stage, the parties are on the verge on setting the case down for trial, although no milestone dates to be disturbed, the application was one of which ought to be discouraged in the CJR regime.

18. A couple of authorities are cited by both parties.  The lateness of application in each case varies.  Some late applications would disturb milestone dates and some would not.  The core principles of allowing late applications are no different from considering whether good reasons are given, whether this would cause prejudice to the other party, and most importantly, whether it will do justice to the parties.  (See: Raytech Industries Co Limited v Leung Wai Kit (ureported, HCA 1360/2011, 16April 2014; Zebra Industries (Orogenesis Nova) Ltd v Wah Tong Paper Products Group Ltd (unreported, HCMP 436/2013, 27 October 2014; Hesson Development Ltd v Tang Ki Fan Tso (unreported, HCA 5584/1998, 30 September 2003; Guangzhou Green-Enhan Bio Engineering Co Ltd & anor v Green Power Health Products International Co Limited & ors (unreported, HCA 465/2002, 22July 2004; and Associated Leisure Ltd v Associated Newspapers Ltd [1970] 2 QB 450).

19. Ms Lau submitted, the defendants took out the summons on 29 August 2014, in compliance of a general case management direction given by Master D Ho in a case management summons hearing on 24 June 2014, that being the last day of taking out all further interlocutory application.

20. The date of compliance is not absolute, it all depends on the nature of the application. It is understandable that the plaintiff is seeking an order to strike out part of the defendants’ witness statements when he was aware of those witness statements contained evidence beyond the defendants’ pleaded defence. Time for doing so is reasonable when both the Ng and Tam’s witness are dated 24 and 25 July 2014 respectively and the plaintiff filed his summons by 29 August 2014.

21. Nevertheless, the defendants are attempting to amend their defence at this late stage, to salvage the situation by expanding their defence considerably so as to cover the new evidence contained in both Ng and Tam’s witness statements and also to run other available defences.

22. The defence of fair comment, qualified privilege and Reynold’s privilege are no new defences in a defamation action. The defendants, as a well established publisher, and well represented by legal representatives in the outset, must be well aware of their possible defences. It must be their choice to have pleaded a relatively simple defence in July 2013.

23. Ms Lau gives no reason to explain the amendment needed to be done at this stage.  The 1^st to 3^rd articles were published on 26 November 2012, the action was commenced on 23 April 2013; the defence was filed on 25 July 2013.  Parties have completed discovery and witness statements have been exchanged.  It would be unfair for the plaintiff to go through again the pleading stage, to effect further discovery and to file his supplementary witness statements by reason of the amendments.  

24. For one point, Ms Lau, counsel (as the author of the defendants’ defence)confirmed, there was no particular reason not to have pleaded the amendments to the defence in July 2013.  Save and except the SEC Complaint, other parts of the amendments are not new to the defendants. 

25. The introduction of the SEC Complaint is not of assistance. It was issued in 9 October 2013, and was disclosed to the plaintiff in the defendants’ lists of documents filed on 21^st March 2014.  At that time, only the 1^st case management summons has been heard.  Should the SEC Complaint be relied on by the defendants in the action, the defendants could have applied for leave to amend the defence promptly.  

26. Mr Luihas rightly pointed out, thedefendants have not provided a good reason for not seeking leave to amend the defence in a timely manner.  Albeit the defendants have duly complied with the case management direction to issue the summons on 29 August 2014, they could not have explained the reason for applying to amend, or more correctly to broaden the defence in a substantive manner at this late stage. 

27. By reasons of the foregoing, leave to amend the defence is refused.

CONCLUSION

28. I give the following orders:-

(i)  Paragraphs 47-56 of Tam Sau Han Patty’s witness statement dated 29 July 2014 be struck out.

(ii)  Paragraphs 39-43 of Ng Ngar Him（伍雅謙）’s witness statement dated 24 July 2014 be struck out.

(iii)  The 1^st to 3^rd defendants’ summons filed on 29August 2014, for leave to amend their defence filed on 25 July 2014 be dismissed.

(iv)  Both the costs of the plaintiff’s summons and the 1^st to 3^rd defendants’ summons filed on 29August 2014 be payable by the 1^st to 3^rd defendants to the plaintiff, with certificate for counsel, to be taxed if not agreed.