LOW CHUNG SONG AND OTHERS v. TARGET NEWSPAPERS LTD AND ANOTHER

Libel - further and better particulars - striking out - whether parts rolled up plea should be struck out to reduce it to simple general plea of fair comment - whether pleading of criminal intent should be struck out where criminal offence one of absolute liability - whether discovery and interrogatories should precede particulars - whether words amounted to pleading subordinate facts or evidence - whether particulars filed in time but incomplete in a minor respect should be struck out - Held: 1. While rolled up plea in libel proceedings now in general disuse it is still open to a defendant to use such a plea which need not be struck out on that ground; 2. Whether criminal offence of absolute liabillty a matter for trial judge and while not obligatory, it is not improper to plead "intent"; 3. In libel proceedings in particular, discovery and interrogatories generally should not precede particulars but no absolute rule and matter for exercise of Court's discretion on facts of each case; 4. The purported facts pleaded, sufficiently complied with the order for substantial further particulars except in relation to one request; 5. In the circumstances that failure did not warrant striking out but defendants given further 14 days to serve proper particulars.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. This is an appeal by the defendants from an order of a Master made on 26th May 1987 striking out certain portions of Paragraphs 7 and 15 of their Defence. I am informed by Counsel that the hearing before the Master proceeded on the basis of a draft unfiled Amended Defence. The hearing before me proceeded on the same basis. I record that the appeal is by way of actual rehearing. I therefore treat the appeal as though it is an application coming before me for the first time subject to the procedural difference that at the. hearing the defendants, as appellants, opened.

2. In the action the plaintiffs sue the 1st defendant as the proprietor and publisher and the 2nd Defendant as the editor, of a daily subscription newspaper called "Target Financial Service" and of a weekly subscription newspaper called "Target Intelligence Report" in damages for certain alleged libels and for a consequential injunction.

3. There were a number of relevant prior orders made by Masters. On 10th March 1987 there was an order for the defendants to serve further and better particulars in relation to the plaintiffs request dated 2nd February 1987. On 3rd April 1987 two summonses were set down. before the Master. A defendants summons applied for an extension of time of 14 days. The plaintiffs summons sought an order that unless the further and better particulars were served by 4th April 1987, the relevant parts of the Defence should be struck out. In the event, the defendants withdrew their summers for an extension of time and by consent an order was made, on the plaintiffs amended summons, requiring the further and better particulars to be served at or before 4 p.m. on 10th April 1987. In default the relevant parts of the Defence were to be struck out.

4. The defendants, within the stipulated time limit, served further and better particulars on 10th April 1987. On 30th April 1987 the plaintiffs filed the summons which led to the Master's order now subject to this appeal. The summons applied for Paragraph 5 and parts of Paragraphs 7 and 15 to be struck out. At the hearing before the Master the plaintiffs abandoned their application in relation to Paragraph 5 and one part of Paragraph 7, leaving those portions of Paragraphs 7 and 15 which remain in dispute. The plaintiffs asserted that although some further and better particulars were served they failed to comply with Order 82 Rule 3(2) R.S.C. and the Master's order of 3rd April 1987. The plaintiffs further asserted that the facts pleaded in the particulars to the relevant portions of Paragraphs 7 and 15, were not facts and did not support the allegation of truth set out in those paragraphs of the Defence.

5. Order 82 comprises special rules which apply to actions for libel or slander. Rule 3(2) provides:

"Where in an action for libel or slander the defendant alleges that, in so far as the words complained of consist of statements of fact, they are true in substance and in fact, and in so far as they consist of expressions of opinion, they are fair comment on a matter of public interest, or pleads to the like effect, he must give particulars stating which of the words complained of he alleges are statements of fact and of the facts and matters he relies on in support of the allegation that the words are true."

6. This rule was introduced to entitle a plaintiff, where a defence includes a rolled up plea, to obtain the particulars of fact provided for in the rule. Counsel for the plaintiffs pointed out that in England the rolled up plea is now not often used. I accept that the more common practice is simply to plead fair comment. I record that Gatley on Libel and Slander' (8th Edn) notes at page 471, footnote 99, that since the equivalent English rule was introduced in 1949, the rolled up plea has been in general disuse but retains a discussion of the plea for jurisdictions without an equivalent rule.

7. Hong Kong not only has an equivalent but the identical rule, yet the rolled up plea lingers on. Before the 1949 Rule change, the advantage of the rolled up plea was that, a defendant could not be compelled to give particulars of the facts on which the fair comment was based. The new Rule in effect unrolled the rolled up plea and required particulars. It is not surprising that as the same particulars can now be required under either a simple plea of fair comment or a rolled up plea, the convoluted rolled up plea, has fallen into disuse in England. It has lost its former advantages. Any contrary doubts whether there remained any difference between the alternative forms of pleading fair comment, were removed by the Court of Appeal in Cuningham-Howie v. F.W. Dimbleby & Sons Ltd. (1950) 2 All ER 882.

8. Both paragraphs 7 and 15 follow the form of the rolled up plea. However, Counsel for the plaintiffs submitted that in reality they amount to pleas of justification which would lead to very different consequences. I am satisfied that in form and substance, both paragraphs are rolled up pleas and raise a defence of fair comment and not justification. While this conclusion is adverse to the plaintiffs submission, it still leaves the defendants with a more onerous obligation as to particulars.

9. Before examining the parties submissions in more detail, I record that in considering the extent of the defendants response to the Plaintiffs request for further and better particulars, I have to take into account not only the further and better particulars filed by the defendant on 10th April 1987 but also the additional particulars contained in the draft Amended Defence. By agreement between the parties, the appeal is to be determined on that twofold basis. I will now consider paragraphs 7 and 15 in detail.

Paragraph 7:

10. The Master struck out the rolled up plea and all the particulars of paragraph 7. So far as the rolled up plea is concerned, striking out the words "... in so far as they consist of statements of facts they are true in substance and in fact and", has in reality little effect. After those words are struck out, the plea of fair comment remains. All that has happened is that the rolled up plea has been replaced by a simple general plea of the same defence. While there now seems little point in pleading the rolled up plea instead of its shorter alternative, there is no longer any advantage or disadvantage to either party, whatever alternative is pleaded. But a defendant may still employ either plea. With respect, I do not think striking out the rolled up plea achieves anything although, for the purist, it may improve the form of the pleading. But there is no need for this Court on a striking out summons, to extend its jurisdiction to that of an examiner. I uphold the appeal on this part of paragraph 15.

11. The first Request 1(1) sought particularity of the words "criminal intent on the part of some of the Executive Directors was in evidence." The effect of the Amended Defence was to reduce the alleged offence to violation of Section 23 of the Banking Ordinance, so I am no longer concerned with Section 24.

12. Counsel for the plaintiffs pointed out that the offence under Section 23 was one of absolute liability and therefore intent was, as a matter of law, irrelevant. Assuming that the offence is one of absolute liability, I reject this criticism of the particulars. An offence of absolute liability does not, of course, require proof of intent. The offence may be committed without mens rea. However, an offender who commits such an offence may still intend to commit the offence. In many cases there will be such an intention although it is not an essential ingredient of the offence. The fact that an offence is one of absolute liability does not thereby exclude the possibility that the offender intended to commit the offence. The alleged advances which are pleaded to have exceeded 25% of the paid up capital and reserves of the Ka Wah Bank were, of course, made by the Bank and not by the plaintiffs. However, it is common ground and expressly pleaded in the Amended Defence, that Section 63(3) imposes criminal liability on directors and managers.

13. In further reply to Request 1(1) the defendants name the plaintiffs as directors of the Bank. The plaintiffs went on to submit that by the relevant date they were no longer directors. It was pointed out that paragraph 1 of the Statement of Claim pleaded the prior dates on which they ceased to be directors and the Amended Defence admits the contents of that paragraph. As at the date of publication, the defendants plead that the advances were outstanding. Any criminal liability of the plaintiffs on those pleadings remains a matter of evidence at the trial. I reject the plaintiffs submission on this point.

14. The plaintiffs also requested in Request 1(2) that the defendants state the place, nature and form in which the criminal intent was in evidence. The defendants replied that the criminal intent was in evidence in the loans and facilities referred to in Particular (ii) of Paragraph 7 of the Defence. I have to consider that reply in the light of the Amended Defence in which substantial changes have been made to the identity of the alleged brrowers. In effect the reply is that loans exceeding 25% are evidence of the alleged criminality. I hold that is sufficient particulars. There was also criticism by the plaintiffs that Mr. Dato Yap had only been added to the borrowers in the Amended Defence in order to achieve the criminal excess of 25%. Again that is a matter for the trial judge when evidence is adduced.

15. The plaintiffs asked in Request 1(3) for particulars of the date when the alleged criminal intent was known to the defendants and if on or before 23rd April 1986, on what dates. The defendants replied that it was known to both defendants before 23rd April 1986. The plaintiffs complain that the latter part of their request has not been fully answered. This request has to be considered in the light of the fact that the crucial element of the request was whether the defendants had actual knowledge of the criminality before the publication of the first article on 23rd April 1986. If they did not have such knowledge by such date the defence of fair comment would not be available to them. On the other hand, if they had that knowledge prior to publication, it would not matter how much earlier they gained that knowledge. I hold that as the defendants have replied that they did have that knowledge before 23rd April 1986, they have provided such particulars on that question as could reasonably have been required.

16. Request 2(1) concerned the amount of the advances made to the borrowers named in the particulars to Paragraph 7. The Amended Defence I confirm has changed the names of some of those borrowers. I am satisfied that the particulars supplied in relation to the borrowers named in paragraphs (a) and (b) are sufficient. I would have held that the. particulars supplied in paragraph (c) were insufficient but do not now need to consider that paragraph, as it has been deleted in the Amended Defence.

17. The next request 2(2), in summary, sought greater particularity of the aggregate amount of the advances. The particulars requested included the amount advanced to each borrower, the nature of other liabilities and the dates of such advances. In some cases further particulars were to some extent given. But a reply repeated to a number of these requests, concluded with the statement that exact dates or amounts could not be given until after discovery and interrogatories. I shall consider the sufficiency of that reply before going on to consider these requests in detail.

18. Counsel for the plaintiffs took objection to all such replies on the ground that particulars must precede discovery. Comment cannot be fair, he submitted, if it were not made on facts, the particulars of which were known to the defendants at the date of comment. I was referred to the statement of principle in Gatley (supra) at paragraph 1124:

        "1124. Discovery not-to precede particulars. The defendant must plead the matters on which he relies to justify the words complained of without the assistance of discovery. The court will not allow discovery to precede particulars of justification, and it is no answer to an application for such particulars that the defendant cannot give them until after discovery of documents or interrogatories."

19. Counsel for the defendants submitted that as a statement of general principle the extract from Gatley is too sweeping and is not supported by the cases cited. There is some merit in that submission. In any event I note that all the cases cited in Gatley dealt with the defence of justification as does Gatley's statement of principle. While there are some similarities between that defence and the belief in the truth of facts, on which fair comment is based, there are also important differences. In Gourley v. Plimsoll, on which Gatley relies, Brett J. did state that interrogatories were not to be allowed for the mere purpose of enabling a part to see if he had a case but to enable him to support his case. In disallowing interrogatories, Brett J. stated that if they had been allowed they would have enabled the defendant "to look for a case, not to support his defence, or see if he has a defence which can be supported." However, the Court recognised that was a general rule subject to exceptions.

20. The stronger authority cited by Counsel for the plaintiffs also relied on by Gatley, was Zierenberg v. Labouchere (1893) 2 QB 183. The Court of Appeal held that a defendant who pleads justification must state in his particulars the facts on which he relies in support of his justification. In ordering that particulars should be given before discovery Kay L.J. declared at pages 189, 190:

"If the defendant says that he is unable to state any facts without discovery, the answer is simple and conclusive - he ought not to have published the libel, and cannot plead any justification for having done so ... to apply this practice to the case of libel would be to sanction the publication of a libel when the libeller knew no facts justifying the libellous statement, because he believed he could by the process of discovery elicit such facts."

21. Generally the Court has a discretion whether to order further and better particulars or allow interrogatories. In the absence of authority the risk that a libeller was in fact seeking discovery to ascertain whether he had a case, rather than merely seeking support for his case, would at least be a powerful factor in favour of a Court refusing to order discovery.

22. Counsel for the defendants submitted that authority does not go so far as Gatley claims. I was referred to the judgment of Chitty J. in the later case of Waynes Merthyr Co. v. D. Radford & Co. (1896) 1 Ch 29. Gatley in a footnote, somewhat enigmatically notes, that the latter case "explained" the former. I remind myself that the former judgment was by the Court of Appeal in a libel action while the latter is a High Court judgment, in an action based on fraud. The High Court held that as the defendants had the means of ascertaining from their own books, whether other frauds had been committed, they were not entitled to obtain particulars from the plaintiffs, before giving discovery. The defendants contrary argument had been founded on the proposition that, except where a fiduciary relationship exists, particulars always precede discovery citing Zierenberg v. Labouchere. Chitty J. commented on the judgment of Kay L.J. in that case, in these terms:

"The Lord Justice did not lay down any such general rule ... and in my opinion there is no such general rule. There is no hard and fast rule as to the class of cases in which particulars should precede discovery, or discovery be ordered before particulars; but the judge must exercise a reasonable discretion in every case after carefully looking at all the facts, and taking into account any special circumstances.

 

        Now on the facts alleged in the statement of claim it cannot be said that the plaintiffs are presenting a fishing case ..."

23. Gourley v. Plimsoll in effect made a similar distinction between fishing and non-fishing expeditions. I accept the analysis by Chitty J.  I recognise, however, that a Court in libel cases, must be particularly careful not to permit discovery or interrogatories before particulars, where the latter applications are in reality merely fishing expeditions.

24. In the present appeal the defendants, in some of the disputed particulars which fall into this category, have not been able to give any further particulars. The first instance where none were supplied was Request 2(2)(c). But that request is no longer relevant, as the pleading on which it arose, has been deleted in the Amended Defence. As to the remainder, they will be considered in accordance with the law as enunciated by Chitty J. My discretion in each case will be exercised on that basis.

25. The reply to Request 2(3), in view of the Amended Defence, is now sufficient. The Amended Defence also deletes the pleading on which Request 2(4) arose, so that request need no longer be considered. I am satisfied that there have been sufficient particulars given to Request 2(5) and also, on the basis of the Amended Defence, to Request 2(6).

Paragraph 15:

26. The Master ordered that three different portions of Paragraph 15 be struck out due to non-compliance with the prior order for further and better particulars. These words were those comprising" ... in so far as they consist of statements of fact they are true in substance and fact"; the particulars in Paragraph 15(1); and that portion of particulars (ii) comprising the words:

"... that such an attempt was in the circumstances an attempt on the part of the Low Family to misuse the monies obtained from such credit facilities for their own ends, that the Lows were coercing, manipulating, misleading or conspiring with the then directors of Ocean Front Private Limited, who were appointees of the Lows for the wrongful prupose of the Lows..."

27. Striking out the first part of Paragraph 15, in terms of the Master's order would, with respect, have no practical effect. As was the case with the corresponding words in Paragraph 7, it would still preserve the defence of fair comment but replace the longer rolled up plea with a shorter general plea. For the reasons already given in relation to Paragraph 7, I also uphold the appeal relating to this part of Paragraph 15.

28. Moving on to the particulars in Paragraph 15(1), the plaintiffs Request 3(1), asked the defendants to state the precise nature of the alleged financial pressure and the dates when and manner in which, such financial pressure was applied. Counsel for the plaintiffs pointed out that the particulars referred to pressure being exerted by the Bank and not by the plaintiffs and that Tong Kok Chai was indebted not to the plaintiffs but to the Bank. I accept that, if pressure was applied by the plaintiffs, it was not applied directly. But the particulars expressly refer to the fact that the alleged pressure "was continuously exercised by the plaintiffs through Ka wah ..." Tong had also guaranteed Peninsula Resources Ltd. I consider these particulars are sufficient and that the basis of the plaintiffs criticism is more relevant to evidential issues which mayarise at the trial. The final particular that the effect of the pressure on Tong would be felt by Jo, was rather more tenuous but when I review the whole of these particulars I am prepared to allow the to stand.

29. The defendants reply to Request 3(2) stated that the facts and matters of Particular (ii) supported the first statement of fact in Particular (i) and went on to clarify that Particular (ii) was not intended to support the words relating to the financial pressure on Tong and Jo.

30. Counsel for the plaintiffs took issue with this reply submitting that what might happen at the proposed Extraordinary General Meeting of Ocean Front Private Ltd. petitioned by Asean Resources, was not a statement of fact but was pure speculation. It only amounted to a belief as to the future. As such, it was submitted, it could not be fact and Could only be categorised as comment. I am not satisfied that it is entirely comment. But where in a defence, comment is pleaded as fact, the disadvantage primarily falls on the defendant, who must attempt to prove its truth. I am not prepared to strike thi particular out on the ground advanced by the plaintiffs. Request 4 relating to Paragraph 15(1)(d) is unobjectionable as a statement of fact and gives sufficient particulars.

31. The reply to Request 5(1) adequately clarifies that the defendants do not allege that the plaintiffs lent money as individuals but that the loans were made by the Bank. The plaintiffs submission that this amounts to guilt by association, is really a trial matter. The fact that Tan Koon Swan was jailed is a statement of fact which I understood was in any event undisputed. Request 5(2) is answered in two words "Not entitled." This is obviously an inadequate reply. Counsel for the defendants submitted that even if it were, it did not amount to a sufficient failure on the part of the defendants to warrant striking out. I will further consider that submission after the remaining disputed particulars are reviewed. The reply to Request 5(3) was sufficient.

32. The defendants replied to Request 6, by stating their belief as to the meaning of words attributed to Asean Resources Ltd. Counsel for the plaintiffs attacked this reply on the same basis advanced in relation to several other replies, namely that the defendants purported statement of fact, was not fact but a statement of belief. Worse it was a statement of belief in relation to a third party's mind. The relevant defendants pleading is to be found in Paragraph 15(ii) (a) (3) of the Amended Defence. This follows the pleading that Asean Resources Ltd. had obtained an injunction in the High Court of Singapore, restraining ("refraining" sic) Ocean Front Private Ltd., from, inter alia, increasing its indebtedness. The Amended Defence Paragraph 15(ii) (a) (3) goes on to include an additional pleading which refers to the belief of Asean Resources Ltd., as disclosed in an affidavit by its Chairman, filed in those proceedings.

33. I recognise that parts of that pleading go beyond a statement of material facts and include some subordinate facts and perhaps even plead evidence by which the defendants may hope to prove the material facts. Although the Court has a discretion in these matters, evidence simpliciter should normally not be pleaded. To the extent that the particulars go beyond statement of facts, I remind myself that those parts of the plaintiffs summons pursued before me, are based on the defendants original alleged failure, to supply requested further and better particulars. It is true that alternative grounds included those that the Defence was scandalous and vexatious and otherwise an abuse of the process of the Court. But those latter grounds were not pursued the plaintiffs being content to rely on the primary ground that, within the stipulated time of the Master's unless order, further and better particulars had not been supplied.

34. I hold that principal statements criticised by Counsel of the plaintiffs, were either statements of fact or particulars supplying clarification of previously pleaded facts, expressly sought by the plaintiffs. In the exercise of my discretion I decline to strike them out.

35. Request 8 refers to that portion of Paragraph 15(ii) (a) (3) of the Amended Defence which refers to "for the wrongful purpose of the lows." The plaintiffs asked what purpose it was alleged the plaintiffs had and in what respect it was wrongful. The defendants were content to reply that the wrongful purpose had already been stated with proper particularity in the penultimate sub-paragraph of Paragraph 15(ii). The plaintiffs submitted that this was a clear breach of the prior order of 3rd April 1987. However, in view of the additional particulars contained in the Amended Defence, which were not before the Master on 3rd April 1987, 1 consider that adequate particulars have now been supplied. I record that although there was also a final request for better particulars in relation to Paragraph 19 those particulars are not the subject of the summons now on appeal. Accordingly, they are not a matter for consideration in this appeal.

36. The result of these findings is that the defendants have failed to comply with the Master's order in respect of Request 5(2). The power to strike out is permissive and not mandatory. In the exercise of my discretion I am of the view that the defendants failure to comply with Request 5(2) should not result in that portion of the Amended Defence on which that Request was based being struck out at this stage. Instead, I will grant leave to the defendants to serve further and better particulars in reply to Request 5(2) within 14 days and in default that portion of the Defence shall be struck out. Finally I would record that I appreciate that the defendant had not appealed the Master's unless order of 3rd April 1987. However, I do not consider that order inhibits the Court present powers for in my view it was a time rather than a substance order. Liberty is reserved in relation to costs and any other consequential matters.