LAU HEI WING v. APPLE DAILY LTD AND OTHERS

HCA 1503/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1503 OF 2012

_________________________

_________________________

_____________

D E C I S I O N

_____________

The application

1.  By summons dated 15 July 2014, the defendants apply for the following:-

(1) Time extension to take out the present applications under O.3, r.5;

(2) Specific discovery of documents contained in the Schedule annexed to the Summons under O.24, rr. 3, 7 and 10; and

(3) Leave to adduce expert evidence on PRC laws under O.38, r.36 and r.41.

2.  The above applications are opposed and the parties are legally represented.[1]

The factual background

3.  This is a defamation case based upon the publication of an article (“the Article”) in the newspaper Apple Daily entitled “紅色背景  老闆曾入獄  19億買君怡”.  Paragraph 5 of the Amended Statement of Claim sets out the substance of libel in question:

(1) “老闆曾入獄”

Translation: “the boss previously was put in jail”

(2) 興建地下飯堂的君怡老闆劉希泳，是已故華懋集團主席龔如心好友，曾是北京階下囚，本港傳媒曾報道，他在1999年因涉及中國光大集團前董事長朱小華的違規貸款案，被內地政府判監3年半，在2002年更被光大在港入稟，追討其掌控的新立基發展…”

Translation: “The boss of the Kimberley Hotel, Lau Hei Wing, who built the underground canteen, was a good friend of Nina Kung, the Chairman of the Chinachem Group who had passed away, was a prisoner of Beijing.  It was once reported in the Hong Kong media that in 1999, he was involved in the irregular loan case of the Chairman of China Everbright, Chu Siu Wah, and was sentenced to 3½ years imprisonment.  In 2002, the Company controlled by him Synergy Property Development Company Limited”

(3) “劉出獄及時回港提出反對清盤申請，重掌酒店生殺大權，令交易腰斬… ”

Translation: “After Lau was discharged from prison, he was in time to return to Hong Kong to oppose the winding up petition, resumed control over the Hotel, and caused the transaction to be aborted…”

(4) “知情人士指出，劉即使被判罪坐牢，但仍與中央高層官員關係密切… ”

Translation: “It was pointed out by the people who were aware of the facts that even when Lau was convicted and serving his sentence, he was nevertheless close to the officials of the Central Government…”

(5) “劉出獄後，不但未見有財政困難,其太太張翎飛更手持多項豪宅物業… ”

Translation: “After Lau was discharged from prison, he was not seen to be in financial difficulty, his wife was nevertheless holding many luxurious properties…”

4.  The defendants in paragraph 5 of its Amended Defence did not admit the correctness of the English translation of the Article but admitted that the alleged defamatory statement formed part of the Article published on Apple Daily on 8 July 2012 and on the websites.

5.  However, it has to be noted here that though the defendants have made no admission to the correctness of the English translation of the Article, the defendants have nevertheless not suggested any version of translation that the defendants agree to be correct.

The defence

6.  The defendants’ defences are  as follows:-

(1) First, the defendants deny that the words are defamatory in their natural and ordinary meaning: Amended Defence §6.

(2) Second, the defendants rely upon justification, alleging that the words are true: Amended Defence §7. 

(3) Third, the defendants further allege that the words are a matter of fair comment: Amended Defence §8.

(4) Finally, the defendants also rely upon the defence of Reynolds privilege: Amended Defence §9.

7.  I shall deal with the defendants’ applications in the same order as their counsel has set out in his written submissions.

8.  The defendants apply for specific discovery of (1) the detention records of the plaintiff, (2) documents referred to in §23 of the plaintiff’s witness statement, and (3) all documents and correspondence (including the indictment, records of interview, records relating to the compulsory measures implemented) relevant to the criminal investigation in question.[2]

The relevant legal principles

9.  The relevant legal principles for this application are succinctly set out by the Court of Appeal in Deak and Company (Far East) Ltd. v N.M. Rothschild and Sons Limited & Others [1981] HKC78 per Barker JA.  At page 3 of the judgment, the Court of Appeal said:

“Thus in order to obtain an order for discovery under Order 24 rule 7 the party seeking it has to make out a prima facie case:

(a) that there is in existence a specified document or class of documents;

(b) that the party against whom the order is sought has or had the document in his possession, custody or power;

(c) that the document or class of document relates to a matter in question in the action; and

(d) that discovery thereof is necessary either for disposing fairly of the cause or matter or for saving costs.”

At page 5 of the judgment, the Court of Appeal said:

‘Moreover, it has to be remembered that, even if existence, possession etc. and relevancy are established, discovery will still only be granted if it is necessary for fairly disposing of the cause or matter: of Lord Wilbeforce in Science Research Council v Nasse (3) at page 1066 where he said:

"The ultimate test in discrimination (as in other proceedings) is whether discovery is necessary for disposing fairly of the proceedings."

And in deciding that question one of the matters which a Court has to bear in mind is whether it would be oppressive to order discovery - that is oppressive on the party required to give it. What is oppressive must depend upon the particular circumstances of each case.’

10.  The above authority has not changed after the CJR.  See Tullett Prebon (Hong Kong) Ltd. v Chan Yeung Fong Nick & Others HCA2197/2009, To J. (unreported), 9 June 2011 at §§11-12.

Discussion – specific discovery

11.  The plaintiff has raised the following grounds of objection to the defendants’ application for specific discovery:-

(1) First, the defendants fail to establish even a prima facie case that it is within the plaintiff’s power to obtain the documents sought.

(2) Second, the documents sought are not relevant or necessary for saving costs.

(3) The plaintiff has already confirmed in his affirmation that the documents sought are not within his power, possession or custody.  This is conclusive of the matter.

12.  The defendants based upon the preliminary legal advice of a PRC lawyer and said that the plaintiff had the power to retrieve those documents from the relevant authorities.[3]  The plaintiff objects this approach and asks the Court not to accept the defendants’ proposition because the expert was not identified and the so-called legal advice is no more than hearsay evidence, for which no leave has been given for admission.  The defendants submit that this Court has to consider leave to adduce the expert evidence together with their application for specific discovery.  However, they have not been able to assist the Court by making bare submission of preliminary legal advice on the plaintiff’s power of obtaining the documents from the mainland authorities without supplying this Court with their expert report or preliminary report as to what documents can be obtained and from what authorities under what law or regulations, let alone whether the authorities can raise objection to supply such documents to the plaintiff.  If the defendants have not even obtained reliable preliminary expert evidence in support of their application for specific discovery, their application is not supported by evidence or legal authorities.  I agree that this Court cannot accept the defendants’ proposition that it is within the plaintiff’s power to obtain the documents as requested from the mainland authorities.

13.  The plaintiff also argues that those documents are not relevant to the issues in dispute, still less necessary for a fair trial or saving costs.  Mr. Law submits that the plaintiff’s detention is not an issue between the parties as he had already admitted in his witness statement that he was detained in 北京香山別墅 in Beijing, which is not a prison or detention centre.[4]  The plaintiff was later released from detention without any record of criminal investigation.  In other words, the plaintiff has plainly denied that he was subjected to any criminal proceedings or sentence.  The only issue between the parties, as submitted by Mr. Law, is for the defendants to demonstrate that the plaintiff was “convicted” and was “sentenced”.[5]

14.  On the matter of relevancy, Mr. Ho relies upon the Decision of Master Marlene Ng (as she then was) in Wu Ching Sau v New World First Bus Services Ltd HCPI 767/2009 (unreported, 9 September 2010) at §66 that:

“[A]lthough the pleadings and particulars will usually determine relevance to a matter in question, the obligation to provide discovery in respect of a matter in question does not necessarily mean a matter on which issue has joined in the pleadings, but the documents must be matters as to which an inference can properly be drawn that they are the subject of controversy between the parties.”

15.  I do not see how the above citation can assist Mr. Ho’s argument.  I have difficulty in understanding “the documents must be matters as to which an inference can properly be drawn that they are the subject of controversy between the parties.”.

As far as pleading is concerned, the court can draw inferences of facts, acts, knowledge or intent from the facts found by the court in accordance with the legal principles as set out by Sir Anthony Mason NPJ in Ming Shui Chung & others v Ming Shui Sum & others [2006] 9 HKCFAR 334, at §72, where the learned NPJ said that inferences of fraud or serious misconduct were “......not to be reached by conjecture nor ...... on a mere balance of probabilities.”  They are “to be plainly established as a matter of inference from proved facts”; Kwan Ping-bong & Another v The Queen [1979] HKCU 5 PC (Lord Diplock, 16 November 1978) where it was held that the court or the jury was entitled to make inference from the facts proved to establish knowledge or intent of the accused, but the facts relied upon must be proved and the inference must be the only reasonable inference to be drawn under the circumstances.

16.  The citation of Wu Ching Sau rather refers to the scope of documents for the purpose of discovery should be defined by the pleading in its general sense as distinct from its detailed exposition.  This was clearly shown in paragraph 16 of Billion Lead Investment Ltd v Union Joyce Ltd & Others (unreported, 14 December 2012, M. Chan J.):

‘16. In determining the relevance of the documents sought by Billion, I have also borne in mind the comments of Colman J in O Company v M Company [1996] 2 Lloyd’s Law Rep 347, at p 350, which were quoted with approval by Deputy High Court Judge H Wong SC in Chan Hung v Yung Kwong Chung HCA 216 & 271/2004:

“The “case” of the plaintiffs or the defendants respectively can be defined only by looking at the pleadings.  It must be defined by reference to the plaintiffs’ pleaded claim in its general sense, as distinct from its detailed exposition and by the defendants’ pleaded defence in the sense of its general refutation of the plaintiffs’ claim.  What matters for discovery purposes is the claim and defence to it in the broadest sense and not to the detailed particulars of either claim or defence.”

At paragraph 27 of the judgment of Deputy High Court Judge H Wong SC, he commented:

“With respect, I agree with Colman J. For the purpose of discovery, the relevance of a document should not be solely tested against the detailed particulars pleaded by the parties.  It is the pleaded case of the parties in the broad sense that one should be concerned with.  A document may be generally relevant to a party’s case as pleaded (many so-called “background documents” are of this nature) although its relevance cannot be specifically pinned to some pleaded particulars.  For discovery purpose, the pleadings have to be looked at broadly.”

I have little to add to what has been clearly stated by Colman J and Deputy High Court Judge H Wong SC.’

17.  The above exposition does not assist the defendants either as the focus of the issues of dispute is whether the plaintiff was at the material times subject to criminal conviction and sentence as Mr. Law submitted.  The scope is clear.  There is nothing to be inferred from the plaintiff’s pleadings.

18.  Mr. Law is also correct to say that the plaintiff had merely said in his witness statement that he did not take any paper connected to this painful episode of his life.  It will be puzzling what documents the defendants can make inspection under O.24 r.10.

19.  The plaintiff has also made an affirmation confirming that the documents sought are not within his possession, power or custody: Lau’s affirmation §6.  This is conclusive at the interlocutory stage. Re The Prudential Enterprise Ltd. (unrep. HCCW 594/1999, 10 August 2001, at §18, per Chu J (as she then was)) unless “if it can be shown by admissions in pleadings or the contents of the affidavit itself or documents referred thereto that the affidavit is insufficient: Jones v Monte Video Co. (1880) 5 QBD 556 at 558.”  See paragraph 16.  There is no such evidence adduced by the defendants here.

20.  The defendants’ application for specific discovery has to be dismissed.

Discussion – expert evidence

21.  I shall now discuss the defendants’ application for leave to adduce expert evidence and leave for making their application despite Master Ho’s order forbidding them to do so.

22.  The plaintiff has raised three grounds of objection: (1) Master Ho’s order dated 12 February 2014 forbidding expert evidence for this matter, (2) delay in making this application and (3) the expert evidence is irrelevant to the issues in dispute.

23.  In the 2^nd Case Management Conference, Master Ho had considered respective parties’ Listing Questionnaires and upon their confirmations that there would not be expert evidence for the trial, made the order that the parties were not entitled to adduce expert evidence at trial.  The reason for the defendants to take out this application is upon counsel’s advice.  The defendants submit that since this matter has not been set down for trial, the application should not cause prejudice to the plaintiff and the court should resolve their disputes on the merits of the case as provided under O.1A, r.2(2).

24.  The plaintiff does not argue that this Court has no jurisdiction to vary Master Ho’s previous order.  For an order on case management, a court of co-ordinate jurisdiction should have the jurisdiction to make the necessary variation of the previous order to suit the change of circumstances as the case progresses.  See §§31 & 33 of Asia-Pac Infrastructure Development Ltd v ING Yim Leung Alexander & Others [2011]1 HKLRD 587 per Stone J. where the learned judge held at §33

‘…not only does Practice Direction 5.2 on Case Management (at paragraph 39) reflect the power of the court to set aside or vary a prior direction, either on application or on its own initiative, where there has been a change of circumstances, but alternatively this court may choose to exercise its powers under Order 1B, rule 1(2), RHC, which provides:

“Except where these rules provide otherwise, the Court may by order –

(l) take any other step or make any other order for the purpose of managing the case and furthering the underlying objectives set out in Order 1A” .’

25.  It is trite law that where the Court is to exercise its discretion, it has to take all the circumstances into consideration, bearing in mind that the discretion must be just for the parties.  See page 10, point (6) cited by the Court of Appeal in Lessy S.A.R.L. v Pacific Star Development Ltd [1997] HKLRD 1248 from Hytec Information Systems Ltd. v Coventry City Council, reported in “The Times”, 31 December 1996: “The judge will exercise his judicial discretion whether to excuse the failure in the circumstances of each case on its own merits, at the core of which is service to justice.”

26.  I have to bear in mind that a court’s order must be given respect and its full effects unless there are exceptional circumstances not to do so.  Even if exceptional circumstances have been shown and leave should be given to vary the court order, the question of costs should then come into consideration, which will weigh heavily against the party in default of the court order.

27.  I consider Mr. Ho’s submission that the solicitor had not informed Master Ho at the 2^nd Case Management Conference that counsel’s opinion had not been obtained on the expert evidence does not assist the defendants, whose legal representatives should have taken this issue into consideration in a proper preparation for the trial even at the stage of the Case Management Summons, which normally will be at least six months before the first Case Management Conference.  This has been clearly spelt out in Chok Yick Interior Design & Engineering Co. Ltd. v Lau Chi Lun t/a Chi Hung Construction Eng. Co. (unreported, HCA1480/2008, Lam J. (as he then was), 5 May 2010.)  It is time to remind the legal representatives of the advice that the learned Judge had given more than four years ago.  Paragraphs 13 and 14 of the judgment read:

“13. Under the CJR regime, parties and their legal representatives must address the question of expert evidence after the close of pleadings when they prepare their Timetabling Questionnaire in accordance with Practice Direction 5.2. Para.8 of PD 5.2 requires the parties to consult each other and para.9 requires them to give as much information as is required in the Timetabling Questionnaire to enable the court to give case management directions. Section E of the Questionnaire deals with expert evidence. Para.20 sets out the general approach of the court regarding expert evidence.

14. If a party envisages the calling of expert evidence, he or she should obtain expert directions under the Case Management Summons. Attempts should be made to agree upon the directions sought. In cases where different experts are engaged by the parties, such directions should generally, in the light of what has been said above, include directions for expert meetings and joint expert report. Whilst there could be cases with exceptional circumstances where expert directions are sought at a later stage, it has to be borne in mind that the purpose of a Case Management Conference [“CMC”] is to review the due compliance with directions already given instead of affording a second opportunity for seeking directions which could have been sought upon the filing of Timetabling Questionnaire (see Paras.28 and 32 of PD 5.2). ...”

28.  Mr. Ho submits that the necessity of having expert evidence is upon counsel’s advice and the preliminary advice from PRC lawyer.[6]  He has not explained why such legal advice was not taken more than a year before this hearing (the Case Management Summons before Master de Souza was on 21 February 2013).

29.  Mr. Ho then further submits that this Court should accede to the defendants’ request as the matter has not been set down for trial and the primary objective is for the Court to adjudicate the parties’ disputes in accordance with their substantive rights.  O.1A, r.2(2).

30.  The defendants’ application is predicated upon the fact that they need the expert evidence so as to “construct [sic] the alleged defamatory statements”, i.e. to understand their natural and ordinary meaning: Sunny Chan’s 1st affirmation §20.  

31.  Mr. Law argues that the expert evidence as proposed by the defendants is clearly inadmissible because in the determination of the “natural and ordinary meaning” of the words, no evidence is admissible, relying upon the following passages:

(1) Gatley on Libel and Slander (12th ed, 2014), §32.26

“Natural and ordinary meaning. Where the claimant is relying on the natural and ordinary meaning of the words complained of, no evidence of their meaning is admissible or of the sense in which they were understood, or of any facts giving rise to inferences to be drawn from the words used.”

(2) Duncan and Neill on Defamation (3rd ed., 2009), §5.23

“The meaning in which the words were in fact understood is irrelevant for the purposes of deciding the natural and ordinary meaning of the words. As the law of defamation is concerned with the effect of words on ordinary people, it might have been supposed that evidence of the sense in which the words were in fact understood by the publishees would be admissible. It is clear, however, that such evidence is not admitted.”

(3)     Hough v London Express Newspapers Ltd [1940] 2 KB 507, Goddard LJ said this at 515:-

“In the case of words defamatory in their ordinary sense the plaintiff has to prove no more than that they were published: he cannot call witnesses to prove what they understood by the words; nor will it avail the defendant to call any number of witnesses to say that they did not believe the imputation. The only question is, might reasonable people understand them in a defamatory sense?”

32.  Mr. Ho has raised no objection to the above legal propositions and the court’s decision.

33.  In the circumstances, since expert evidence is not admissible in this case, there is no reason in support of the defendants’ application for expert evidence.  As to the defendants’ submissions on the requirement of expert evidence in support of the specific discovery, I have already discussed in paragraph 12, supra.

34.  I will therefore dismiss the defendants’ application for time to file the application for leave to adduce expert evidence.  Even if I were wrong in refusing to extend the time for the defendants’ application, I will still dismiss the defendants’ application for expert evidence for the reasons stated above.  In the end, the summons is dismissed.

Costs

35.  As to the costs of the summons and the hearing today, they should follow the event and Mr. Ho has no objection that counsel’s certificate should be given to the plaintiff.  The costs are assessed under O.62 r.9A at $110,000 to be paid by the defendants to the plaintiff within 14 days from the date hereof.

Order

36.  I shall now make an order in terms as follows:

(1) The defendant’s summons dated 15 July 2014 be dismissed;

(2) The costs of the summons, including all costs reserved and the hearing today be as per paragraph 35, supra.

(3) Leave to the plaintiff to set down within 42 days for a 7-day trial before a bilingual judge alone in the fixture list in consultation with counsel’s diaries.  There be a pre-trial review before the trial judge for 30 minutes on a date 12 weeks before trial.  Parties shall confirm the length of the trial by counsel in charge at the pre-trial review.  At the setting down parties shall produce a letter to the Listing Clerk confirming that there will be no outstanding interlocutory applications pending.  All interlocutory applications shall be listed to be heard by the Registrar or a Master before the pre-trial review;

(4) The 4^th Case Management Conference on 29 January 2015 under the Order dated 24 July 2014 be vacated.