XCHRX MICHAEL EDWARD BROWN v. CHOY BING WING

1994 No. A3509

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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J U D G M E N T

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The facts

1. The Defendant is a creditor of Ng Yat Chi, a bankrupt whose estate was being administered by the Official Receiver. The Plaintiff is and was an Assistant Official Receiver. For a while, he was the officer handling Mr. Ng's bankruptcy. In 1993 and 1994, the Defendant sent letters to a number of officials, including the Governor and the Attorney-General, making serious allegations about the Plaintiff in connection with his handling of Mr. Ng's bankruptcy. The Plaintiff thereupon issued these proceedings for libel.

2. In his Defence, the Defendant relies on the defences of privilege and justification. The facts which are said to justify the allegations made about the Plaintiff were pleaded at some length. However, the witness statements served by the Defendant do not seek to establish those facts. Accordingly, the Plaintiff issued a summons, pursuant to Ord. 18 r. 19(1)(d) and the inherent jurisdiction of the court, asking that the paragraphs in the Defence in which the plea of justification, and the facts relied upon in support of that plea, were made should be struck out as being an abuse of the process of the court on the ground that the witness statements "do not evidence the matters pleaded in justification of the alleged defamatory statements". The master declined to strike the material paragraphs out. Instead, he gave the Defendant leave to file supplemental witness statements within 28 days, and he ordered the Defendant to pay to the Plaintiff the costs of the summons. The Defendant now appeals against that order. He contends that the master should have dismissed the summons.

The master's reasoning

3. The master's thinking is evident from his order for costs. He must have agreed with the Plaintiff that the witness statements did not evidence the facts pleaded to support the defence of justification. He must have thought that, unless the witness statements could be improved upon, the Plaintiff was entitled to the relief sought. However, he did not want to deprive the Defendant of the opportunity to rely on the defence of justification if the evidence to support it truly existed. Mr. David Fitzpatrick for the Plaintiff, who appeared for the Plaintiff at the hearing before the master, told me that that suggestion came from him. The Plaintiff's goal was not to have the plea of justification struck out. The Plaintiff simply wanted to know the evidence which would be called to prove the facts relied upon to establish the plea of justification.

The relevant principles

4. The law in this area was recently considered by the Court of Appeal in England in McDonalds Corp v. Steel [1995] 3 All ER 615. In his judgment, Neill L. J. noted that it was well established that where it could be demonstrated that a plea of justification had no proper factual basis, it could be struck out as an abuse of the process of the court. In the past, it had been rare for a plaintiff to be able to show that the plea of justification should be struck out as an abuse of process on the ground that it was unsupported by evidence. The reason was that in the ordinary way there was no acceptable means by which the court could test the factual validity of an apparently proper plea. The practice changed with the introduction of the rule providing for the exchange of witness statements. Once the statements had been exchanged, it would be easier to test whether the plea was supported by evidence.

5. However, Neill L. J. continued at p.622g-j as follows:

"It is to be remembered, however, that the evidence on which a defendant may be entitled to rely at trial may take a number of different forms. It may include: (a) his own evidence and the evidence of witnesses called on his behalf, (b) evidence contained in Civil Evidence Act statements, (c) evidence contained in his own documents or in documents produced by third parties on subpoena, (d) evidence elicited from the plaintiff or the plaintiff's witnesses in the course of cross-examination, (e) answers to interrogatories and (f) evidence contained in documents disclosed by the plaintiff on discovery."

Neill L. J. concluded at p.623e-f:

"... I am satisfied that the correct approach is to consider whether or not the defendants' case in relation to a particular passage is incurably bad. The power to strike out is a draconion remedy which is only to be employed in clear and obvious cases. I have already set out the wide variety of the evidence which a defendant may be able to rely upon at the trial. I anticipate therefore that it will only be in a few cases where it will be possible to say at an interlocutory stage and before full discovery that a particular allegation is incapable of being proved."

The other evidence available to the Defendant

6. In this case, the Defendant is seeking to rely on other evidence to establish the plea of justification. He wishes to rely on evidence culled from three other sources:

(a) the documents disclosed on discovery by both parties,

(b) the witness statement of the Plaintiff, and

(c) the answers he hopes to elicit from the Plaintiff in cross-examination.

The Plaintiff can only support the master's order if these other sources of evidence do not show any proper basis in fact for the plea of justification. The strength of (c) cannot, of course, be gauged at the interlocutory stage, but (a) and (b) could be. I cannot do that at present, because although I have been provided with a copy of the Plaintiff's witness statement, and with copies of the parties' lists of documents, I do not have the documents themselves.

7. However, I suspect that many of the facts relied upon to prove the plea of justification are not going to be disputed. They simply record the various steps taken in the administration of Mr. Ng's bankruptcy. Mr. Fitzpatrick conceded as much. I suspect that the real dispute is likely to be over the inferences which are to be drawn from those facts. In those circumstances, I should have thought it likely that the evidence to establish many of the facts pleaded in support of the defence of justification is contained in the documents disclosed on discovery.

8. I should add that, other than in a most exceptional case, I am sceptical about the appropriateness of the court at the interlocutory stage embarking on a detailed inspection of large numbers of documents disclosed on discovery to see whether they support a plea of justification. That, I think, would be a classic example of satellite litigation of the kind which the Court of Appeal has frequently disapproved of. I do not think that this is the sort of case on which an exercise of that kind should be undertaken, and to be fair, Mr. Fitzpatrick did not suggest otherwise.

Conclusion

9. It follows that, although the master was entirely right to conclude that the witness statements filed by the Defendant did not evidence the facts pleaded to support the plea of justification, that was not the end of the matter. For the reasons I have given, I cannot say that the plea of justification is incurably bad in view of the other sources of evidence on which the Defendant proposes to rely. This appeal must therefore be allowed, the order of the master must be set aside, and substituted for that order must be an order that the Plaintiff's summons be dismissed.

10. However, it is important that the Defendant is completely aware of the risks he is taking. If he thinks that he can at trial simply call the evidence he wants to to support the plea of justification, he must realise now that he will almost certainly not be allowed by the trial judge to do that. The time for deciding whether to call evidence on a topic is at the stage when witness statements are to be exchanged. Litigation is conducted nowadays with the cards on the table. Although I cannot tie the hands of the trial judge, the Defendant must appreciate that his decision now not to rely on his own evidence or that of any third party to establish the facts relied upon to prove the plea of justification almost certainly means that he will not be able to rely on such evidence at the trial. The same goes for documents. If the Defendant thinks that he can at trial ask for discovery of specific classes of documents, he should realise now that he will almost certainly not be allowed by the trial judge to do that. The time for him to apply for discovery of specific classes of documents is now. For the record, I spelled all that out to the Defendant in the course of the hearing of this appeal. I am satisfied that the Defendant understood what I said.