HOI TIN TONG CO LTD v. CHOY KWOK KEUNG AND ANOTHER

HCMP 260/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 260OF 2016

(ON AN INTENDED APPEAL FROM HCA NO. 1755 of 2013)

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REASONS FOR JUDGMENT
AND SUMMARY ASSESSMENT OF COSTS

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Hon Yuen JA:

1. This is an application for leave to appeal from a Decision of DHCJ Yee given on 29 October 2015 (“the Decision”) in which he gave an order for discovery by a non-party under Order 24 r.7A(2) of the Rules of the High Court. The learned judge refused leave to appeal for reasons given on 19 January 2016. At the conclusion of the hearing before us, the application was dismissed with costs. My reasons appear below.

Background

2. The full background facts have been set out in the Decision. 

3. Briefly, Hoi Tin Tong Co Ltd (“HTT”) is a company which manufactures turtle shell herbal jelly (“turtle jelly”) for sale to consumers. 

The video clip

4. On 12 September 2013, a video clip (“the clip”) was uploaded onto YouTube by Apple Daily Ltd.  The person responsible for the clip was Lee Nga Man, Ada, a Senior Reporter (“the Reporter”). 

5. The clip purported to show a standard practice undertaken at HTT’s premises in which mould formed on turtle jelly was rinsed and scrubbed off to make it appear fresh (“the removal process”). 

6. The clip showed the removal process being demonstrated and explained by a woman.  Although her face was not shown and her voice was digitally altered, it can be seen from the clip that she was wearing a name tag which was not pixellated or otherwise concealed.  The name on the tag was 林日紅 (Lam Yat Hung).

7. During the process, a man’s voice (digitally altered) could be heard, apparently at the scene, referring to the state of one piece of mould.  He said words to the effect that it was not as bad as others which looked like nasal discharge.  This statement has been referred to in the Decision as “the Utterance”. 

8. Later in the same clip, a man appeared on the screen.  His face was not pixellated or otherwise concealed and his voice was not digitally altered.  He was identified by name as Choy Kwok Keung.  He is said to be a former shareholder of HTT.  On the clip, he spoke about mould on turtle jelly.  

9. Importantly Mr Choy is explicitly identified in the clip as 爆料人 (whistleblower).  The same term 爆料人 (whistleblower) had been used earlier in the clip when the Reporter described how she had been taken by the whistleblower to the premises.

Proceedings

10. A few days later on 16 September 2013, HTT issued a writ against Mr Choy, who remains the only defendant. 

11. In the Statement of Claim dated 7 October 2013, HTT pleaded (among other things) that

- on an unknown date before the clip was uploaded, Mr Choy and an employee of HTT had conspired to demonstrate the removal process to the media, purporting it to represent HTT’s standard practice;

- the predominant purpose of the conspiracy was to cause damage to HTT’s business goodwill and reputation; and

- in furtherance of and pursuant to the conspiracy, the employee had on an unknown date before the clip was uploaded, “in concerted action” with Mr Choy and/or under his instructions, demonstrated the removal process to the media. 

12. In further and better particulars, HTT asserted that the employee referred to was 林日紅 (Lam Yat Hung), which was the name shown on the tag worn by the woman in the clip.

13. HTT pleaded that its system of manufacture, storage and transport was such that its turtle jelly did not regularly become mouldy, that its instructions to its staff was to discard any products on which mould was discovered, and that the removal process did not exist as a practice on its premises.

14. HTT sought damages against Mr Choy for libel, malicious falsehood, and the economic torts of conspiracy to injure and unlawful interference with economic interests.

15. In Mr Choy’s Defence, he (among other things) denied the conspiracy.  His case was that:

- he had related his concerns about the removal process to the Reporter who decided to carry out an independent investigation into the matter;

- he told HTT’s employee Lam Yat Hung that he was running a similar business and asked Madam Lam to teach his employee how to undertake the removal process;

- he sent the Reporter to HTT’s premises under the guise of being his employee so that Madam Lam could demonstrate the process to her. 

16. Importantly, Mr Choy asserted that “at the time when the Video Clip was taped, [he] was in Mainland China and was not present with [the Reporter] or Madam Lam, and had no prior or actual knowledge nor involvement in the making or processing of the same” (para. 28).  By implication, Mr Choy was denying that he had taken the Reporter to HTT’s premises on the visit when the clip was recorded and was the man present who had made the Utterance.

17. It would be noted from the pleadings that there is no dispute that Madam Lam Yat Hung was the person who demonstrated the removal process on the clip, although HTT and Mr Choy disagree as to the cause and purpose of her participation.

Application for non-party discovery

18. By a summons dated 25 February 2015 issued to Apple Daily Ltd, HTT sought discovery of the “original, unedited and unprocessed source video(s) used in the making of the clip ...”.  The application was made against Apple Daily as a non-party under O.24 r.7A(2) RHC which provides:

“An application after the commencement of proceedings for an order under s.42(1) of the [High Court] Ordinance for the disclosure of documents by a person who is not a party to the proceedings shall be made by summons, which must be served on that person personally and on every party to the proceedings other than the applicant”.

19. Section 42(1) of the Ordinance gives the court power to order a person who is not a party to proceedings to disclose documents in certain circumstances.  Detailed requirements are set out in other parts of r.7A.

20. In the affirmation supporting the summons, HTT’s representative Chiu Fung Yi explained that although Mr Choy denied any involvement or participation in the making or processing of the clip, she had reason to believe that that was untrue.  She had worked with him for over 15 years, and she believed and recognized that the voice of the man who made the Utterance to be that of Mr Choy.  However she could not be absolutely certain and therefore HTT sought from Apple Daily Ltd the source video(s) for reasons more specifically set out in paras 19-20 of her affirmation.

21. I should add that an undertaking was given by HTT before the judge that it would not commence proceedings against any persons identified in the source video(s) other than Madam Lam and Mr Choy (para. 33, Decision).

22. Apple Daily resisted the summons.  The Reporter made an affirmation on 8 April 2015.  She said:

- she had guaranteed to “the informant(s) that their identity will not be revealed, and that was the basis in which the information was imparted onto me” (para. 6);

- the voice(s) on the clip have been digitally altered and the face(s) omitted to protect the identity of the informant(s) (para. 7);

- since the discovery of the clip would “unavoidably reveal the true identity of the informant(s)”, she considered that she was entitled to rely on the newspaper rule.

23. She also made a point on lack of relevance, which is no longer pursued. 

24. Master Chow dismissed the application for non-party discovery on the basis of the newspaper rule, but on HTT’s appeal to the judge, the application was granted. 

25. It is clear from the judge’s Decision that he held that on the factual circumstances of this case, the newspaper rule simply did not apply. 

Newspaper rule

26. First, a word on the newspaper rule.  This was the subject of a thorough discussion by Nazareth JA in John Sham otherwise known as Shum Kit-fun, John v Eastweek Publisher Ltd [1994] 2 HKLR 381 which remains good law.  Suffice it to say that the court adopted the analyses of previous authorities and the reasons of the New Zealand Court of Appeal in Broadcasting Corporation of New Zealand v Alex Harvey Industries Ltd [1980] 1 NZLR 163.

27. It is clear that the rationale of the rule is to protect informants from the consequences of unnecessary disclosure of their identity, so as to allow the free dissemination of information in the public interest.  At p.172, Richardson J said:

“This public policy basis for the rule has been put in various ways. In McGuinness’s case Dixon J said:

‘The foundation of the rule is the special position of those publishing and conducting newspapers, who accept responsibility for and are liable in respect of the matter contained in their journals, and the desirability of protecting those who contribute to their columns from the consequences of unnecessary disclosure of their identity’ (63 CLR 73, 104)”. (Emphasis added).

A similar statement was made by McMullin J at p.177.

28. Consequently, where an informant’s identity has already been revealed, the newspaper rule cannot apply as a ground for resisting a discovery application. 

First proposed ground of appeal

29. In the present case, I think the judge was clearly right in finding that the newspaper rule simply did not apply in the light of the extant disclosure of identities. 

30. First, the clip itself showed the name tag of the woman who was demonstrating the removal process.  Whether that was through carelessness or some technical error on the part of Apple Daily or others is beside the point.  As shown in the statement of claim, HTT did have an employee by that name, and importantly Mr Choy has also asserted that Madam Lam was the person who he arranged the Reporter to meet.  The Reporter’s affirmation simply had not addressed any of these materials revealing the identity of the woman in the clip. 

31. As for the man making the Utterance, Miss Chiu had said in her affirmation that she recognized the voice as that of Mr Choy. If that was the only thing in the clip, the newspaper rule might well be engaged. However that was not all.  In the clip itself, Mr Choy had been identified as 爆料人 (whistleblower), and more importantly, the same term 爆料人 (whistleblower) had been used earlier in the clip when the Reporter described how she had been taken by the whistleblower to the premises where the demonstration of the removal process was recorded and the Utterance was made. Again the Reporter had not addressed these materials at all in her affirmation. 

32. In light of the above, the affirmation resisting the application was significant, not so much in what it said, but in what it did not say.  The Reporter did not say that there was another or other informant(s), other than Madam Lam and Mr Choy (whose identities were known), who had participated in the source video(s) for whose protection the newspaper rule was being asserted.  Mr Shieh SC, who appeared before us (although not before the judge) submitted that might be implied from the fact that even though Madam Lam’s name tag was shown and Mr Choy had appeared on screen as 爆料人 (whistleblower), the voices on the clip had nevertheless been digitally altered, so the voices might be those of other persons.  With respect, that is not a natural or ordinary implication.  It would have been the simplest statement for the Reporter to make, to say that there was another or other informant(s) - whose name(s) need not be identified - for whose protection the newspaper rule was being asserted.  There was no such statement.

33. In the above circumstances, the judge was clearly right when he held that the newspaper rule was simply not engaged in this case. 

Second proposed ground of appeal

34. Mr Shieh accepted that if he did not succeed on the first proposed ground of appeal, he would also not succeed on the second, which related to the scope of the order.  In any event, this point was never raised before the judge. 

Order

35. As the proposed appeal did not have a reasonable prospect of success, I dismissed the application for leave to appeal with costs.

Summary Assessment of Costs

36. Having considered the statement of costs, I would summarily assess them at $100,000.

Hon Kwan JA:

37. I agree with the reasons for judgment of Yuen JA and the summary assessment of costs as proposed.