WONG SHUI KEE ROGER t/a ROGER S.K. WONG & CO., SOLICITORS v. VICTOR L.L. CHU AND OTHERS

CACV 3176/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 3176 OF 2001

(ON APPEAL FROM HCA NO. 5590 OF 2000)

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REASONS FOR JUDGMENT

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Hon Le Pichon JA:

1. This is an appeal from the order of Hartmann J dated 19 September 2001 made on the hearing of a preliminary issue, dismissing the action with costs to the defendants. At the conclusion of the appeal hearing, this court dismissed the appeal, intimating that it would hand down its reasons in writing later. This we now do.

Background

2. The plaintiff and the defendants are solicitors practising in Hong Kong. In August 1994, the defendants representing a company which claimed that there had been an infringement of its copyright, instituted proceedings. The plaintiff was the solicitor for the company against whom those proceedings had been brought. On 2 November 1994, some months after the commencement of those proceedings, the defendants sent a letter ("the Letter") to the plaintiff about the litigation. The plaintiff took exception to the following paragraph of that Letter which he considered defamatory of him:

" We believe no reasonable Court will fail to see through this lame excuse you put up to excuse your tardiness in filing evidence in answer of the Summons. We regard it intellectually dishonest of you to suggest that the particulars requested of the Statement of Claim was what you had to see before your client would know what to say in answer to our client's Summons." (emphasis added)

He demanded an apology.

3. On 9 November 1994, the defendants wrote in the following terms:

"If the words chosen have offended your sensitivities, please accept our apology."

Nothing further was heard until more than five years later when, in June 2000, the present action was commenced.

4. Paragraph 5 of the amended statement of claim identified three occasions of publication of the alleged libel:

(i) a copy of the Letter was sent by the defendants to their clients;

(ii) it was opened and read by an assistant solicitor, an employee of the plaintiff, whose duties included perusing correspondence; and

(iii) copies were contained in court bundles for use at a hearing at which an interlocutory injunction was to be sought. The publication was thus to counsel representing the parties and the judge.

Deputy High Court Judge Muttrie ordered that the issue whether absolute privilege applied to all or any of those three occasions of publication be tried as a preliminary issue.

The judgment below

5. The circumstances in which the Letter came to be written were summarized by the judge as follows:

(a) The plaintiff had filed his client's defence together with a request for Further and Better Particulars of the Statement of Claim by about mid-October 1994.

(b) A week later, on 17 October 1994, the defendants had written to say that the Further and Better Particulars would be filed within 14 days i.e. by the last day of the month. The letter went on to say this:

"We trust that with this our affirmative reply, a formal application to court [for an extension of time] is not necessary."

(c) Although a defence had been filed in the main action by 29 October 1994, no affirmation or other answer had been filed and the interlocutory proceedings were due to be heard within 2 weeks thereafter. The defendants therefore wrote to the plaintiff demanding to know whether his client intended to file evidence. In pertinent part, the letter read as follows:

" In the normal course of events, our client should have a right of reply to any evidence to be lodged by your client and should further have a reasonable period of time to do so, if desired. Now that the hearing is only two weeks ahead, and when our client's evidence was filed more than two and a half months ago, our client will not permit any late filed evidence from your client to be admitted for the purpose of the hearing without a proper chance afforded to our client to reply thereto.

.... We further give you notice that should any late filing of evidence render it practicably impossible for our client to reply hereto and thereby necessitate an adjournment of the 15th November 1994 hearing, our client shall seek against your client all its costs inclusive of Counsel's brief fees so thrown away or occasioned. We reserve our client's rights to produce this letter to the Court as to the question of costs should it become necessary."

(d) The plaintiff replied on 31 October 1994:

"Although we have requested Further and Better Particulars of your Statement of Claim on 11th October 1994 and you have promised to supply the same to us on or before 31st October 1994, so far we have not received the same and therefore we are put into a difficult if not an impossible position to draft and prepare the affirmation/affidavit in opposition to your client's evidence filed into court and we reserve our right to claim against your client for costs including counsel's fee thrown away for any adjournment of the summons as a direct result of your said failure."

(e) This prompted the drafting of the Letter of 2 November 1994 to which offence has been taken. The relevant part of the Letter read:

" After the Statement of Claim was served on you on 13th September 1994, it took you almost one month to serve a Request for Particulars. We note that the alleged want of particulars in no way hampered your preparation of your client's Defence. The particulars requested were served on you in 3 weeks' time, as promised. If you had bothered to study our client's Affirmations at all, most if not all of the particulars requested were contained therein.

We believe no reasonable Court will fail to see through this lame excuse you put up to excuse your tardiness in filing evidence in answer of the Summons. We regard it intellectually dishonest of you to suggest that the particulars requested of the Statement of Claim was what you had to see before your client would know what to say in answer to our client's Summons."

6. The judge then made this finding:

"The defendants clearly were stung by the suggestion that their failure to date to file their Further and Better Particulars had put the plaintiff into a 'difficult if not impossible position' in drafting an affirmation in opposition. They saw this as an excuse - an exercise, as they put it, of 'intellectual dishonesty' on the part of the plaintiff - who, in any event, had most of the information he had requested before him in the detailed affirmations [from the defendants' clients]."

He concluded that the statement was written and published not only in the course of the judicial proceedings but for the purposes of those proceedings.

7. The classic statement of when absolute privilege is applicable in judicial proceedings is to be found in the judgment of Devlin LJ in Lincoln v Daniels [1962] 1 QB 237 at 257:

"The absolute privilege which covers proceedings in or before a court of justice can be divided into three categories. The first category covers all matters that are done coram judice. This extends to everything that is said in the course of proceedings by judges, parties, counsel and witnesses, and includes the contents of documents put in as evidence. The second covers everything that is done from the inception of the proceedings onwards and extends to all pleadings and other documents brought into existence for the purpose of the proceedings and starting with the writ or other document which institutes the proceedings. The third category is the most difficult of the three to define. It is based on the authority of Watson v. M'Ewan, in which the House of Lords held that the privilege attaching to evidence which a witness gave coram judice extended to the precognition or proof of that evidence taken by a solicitor. It is immaterial whether the proof is or is not taken in the course of proceedings."

Hartmann J proceeded to consider the three categories.

8. The Letter formed part of the court bundles delivered to the court for the hearing of the interlocutory proceedings. In fact, no hearing ever took place because the parties settled the matter. The judge rejected the plaintiff's contention that absolute privilege is only available when there is an actual hearing, that is to say, when the parties are physically coram judice or "before the court". He did not agree that the first category was irrelevant in the present case. The judge held that the reading of papers in the court bundles by counsel and the judge prior to the hearing for the purposes of that hearing were matters done coram judice. Accordingly, he ruled that the Letter, contained as it was in the court bundles, was published on an occasion of absolute privilege. That finding at paragraph 43 of the judgment is not challenged in the notice of appeal.

9. As to the second category, the issue was whether "all pleadings and other documents brought into existence for the purpose of the proceedings" extended to letters. Hartmann J held that correspondence between legal advisors was essential to the efficient, economic and timely resolution of judicial proceedings. He considered it an essential element in the professional conduct of litigation and concluded that inter partes correspondence generated in the course of judicial proceedings and for the purposes of the proceedings is within the second category. He further ruled that publication to the client also came within that category since it was their litigation that was being conducted and they are therefore entitled to know what is being done and said on their behalf.

10. Insofar as inter partes correspondence did not fall within the second category, the judge considered that they were 'practically necessary', such that they would have fallen within the third category in any event. As regards the copy sent to the client, the judge rejected the plaintiff's submission that it was not 'practically necessary' for the conduct of the legal proceedings for the Letter to have been sent to the client. In other words, the judge considered that the Letter also came within the third category. Having regard to those findings, the judge did not consider it necessary to address the broader question of privilege attaching to communications passing between solicitors and their clients. Nevertheless, insofar as those communications are generated by legal proceedings, the judge adopted the dicta of Scrutton LJ in More v Weaver [1928] 2 KB 520 at 521 to the effect that they would be protected by absolute privilege.

This appeal

11. As already noted, there is no appeal against the finding that the first category covered letters included in court bundles filed for the purposes of a hearing. However, at the hearing, the plaintiff sought to re-iterate the arguments he had made below. Whilst the court would normally afford litigants in person a degree of latitude, the plaintiff is a practising solicitor conducting his own case and different considerations therefore apply. Suffice it to say that even if it were not too late to challenge that ruling, it would not make any difference. I agree with the judge's reasoning that the publication of the Letter by its inclusion in court bundles to be read by counsel and the judge fell within the first category. Further, publication to counsel by inclusion of the Letter in court bundles would, in any event, have fallen within the second category as will become apparent below.

12. Therefore this appeal is concerned only with the scope of the second and third categories which, in turn, would determine whether the other two alleged occasions of publication (referred to in sub-paragraph (i) and (ii) of paragraph 4 above) attracted absolute privilege.

The second category

13. The plaintiff submitted that Devlin LJ's second category was limited to pleadings, affidavits and what he described as "court documents" meaning documents filed pursuant to the Rules of the High Court. In that connection, he submitted that documents filed pursuant to practice directions would not be within that category. In my view, there is nothing in the wording of the second category that requires such a restricted meaning. Rather, the determining factor is that the document in question "must have been brought into existence for the purpose of the proceedings." The reasons the judge gave for his conclusion that the Letter is such a document is to be found in paragraph 34 of his judgment:

"While I make no comment on the wisdom of the alleged defamatory words, I fail to see how it can be said that, in making them, the defendants stepped outside of the confines of the proceedings and, to use the plaintiff's words, 'made a private attack on his character'. The central matter in issue was the alleged failure of Dolly Dolls, the defendant in the interlocutory proceedings, to file its affirmation or other answer within the allowed time limits. That alleged failure had repercussions in respect of delay and costs. The defendants were attempting on behalf of their client to assume the tactical high ground so that, if an adjournment of the interlocutory hearing was necessary, their client would at least be indemnified in costs. Patently they were seeking the best advantage of their client in the litigation. Whether they were doing so in an exemplary fashion is not to the point. What is to the point is that clearly they were acting in their capacity as solicitors representing their client and equally clearly they were seeking to advance their client's interests in the litigation."

I agree with that reasoning given the circumstances in which the Letter came to be written. I therefore reject the plaintiff's submission at the second category cannot extend to inter partes correspondence.

The third category

14. In essence, the plaintiff's submissions were that there was no policy reason to grant a full indemnity in this case because, as solicitors, the defendants already have adequate protection as qualified privilege is available to them. Further, the third category is of limited application and is not triggered unless there is an immediate link between something that is undeniably privileged (which the plaintiff referred to as the 'host') and the subsequent event. The plaintiff submitted that in the present case there was no 'host' to which the Letter could attach. It is therefore necessary to look more closely at the rationale for Devlin LJ's third category.

15. As Devlin LJ explained, the third category is based on the authority of Watson v M'Ewan [1905] AC 480 in which it was held that the privilege attaching to evidence which a witness gave coram judice extended to the precognition or proof of that evidence taken by a solicitor. The underlying reasoning was explained by Lord Halsbury LC in the Watson case in these terms:

"It is very obvious that the public policy which renders the protection of witnesses necessary for the administration of justice must as a necessary consequence involve that which is a step towards and is part of the administration of justice - namely, the preliminary examination of witnesses to find out what they can prove."

Without a category of this sort, the absolute privilege granted for matters said and done coram judice might be rendered illusory. See per Devlin LJ at 260 where he remarked that he did not consider that that principle was necessarily limited to the proofs of witnesses. Devlin LJ's conclusion (at 263) as to the parameters of the Watson principle was as follows:

" It is not at all easy to determine the scope and extent of the principle in Watson v. M'Ewan. I have come to the conclusion that the privilege that covers proceedings in a court of justice ought not to be extended to matters outside those proceedings except where it is strictly necessary to do so in order to protect those who are to participate in the proceedings from a flank attack. It is true that it is not absolutely necessary for a witness to give a proof, but it is practically necessary for him to do so, as it is practically necessary for a litigant to engage a solicitor. The sense of Lord Halsbury's speech is that the extension of the privilege to proofs and precognition is practically necessary for the administration of justice; without it, in his view, no witness could be called."

16. The need to protect those who are to participate in the proceedings from a 'flank attack' came under consideration recently in the decision of the Ontario Court (General Division) in Lubarevich v Nurgitz, February 26, 1996, 1996 Ont. C.J. Lexis 1640. That case concerned a letter written to the bank by the attorney to one of the parties to a transaction. The letter contained the following statement which formed the basis of the action (i.e. 'flank attack') by the plaintiff:

"This whole transaction raises questions of a fraudulent nature. Not only are these corporate funds which appear to have been appropriated to personal use in a questionable manner, but there are questions as to the legality of the removal of the funds from the Ukraine, amongst other things."

The remarks of Lane J (at page 5) explain the 'flank attack' averted to by Devlin LJ in Lincoln v Daniels:

"In order to place her client's position before the Bank and persuade the Bank to accept the cancellation of the previous authorization, the defendant solicitor had no option but to explain the circumstances as seen by her client. If she cannot do that fully and without pulling her punches, she cannot represent the client. If she must bear the risk that the client's allegations turn out to be unfounded and she will be liable for the resulting damages, she cannot represent the client. The adoption of such a rule would make a potential defendant out of every lawyer writing on a client's behalf. In the circumstances of this case, only an absolute privilege will suffice to enable the lawyer to perform the function assigned to her under our legal system."

It is to be noted that whether Lubarevich was correctly decided in extending the privilege to pre-litigation correspondence written by a solicitor to pursue or protect his client's interests with a view to litigation, if directed to a limited and relevant audience, is not an issue that arises in the present case.

17. Both parties referred to Waple v Surrey County Council [1998] 1 All ER 624 where the Court of Appeal reversed the decision of a French J ([1997] 2 All ER 836) purely on the point that absolute privilege was not available to pre-litigation correspondence. For my part, I do not find that case to be of particular assistance since we are not here concerned with pre-litigation correspondence.

18. It will readily be appreciated that the two occasions of publications with which this appeal is concerned would thus fall within the third category if they do not also fall within the second category.

19. It was submitted that there is a further reason why the Letter copied to the client is covered by absolute privilege. In More v Weaver [1928] 2 KB 520, the English Court of Appeal had to consider whether communications from a client to a solicitor and from solicitor to client are or are not absolutely privileged. Scrutton LJ explained the rationale for the absolute privilege in these terms (at 521-522):

"... There are a few, not many, cases where untrue communications or statements which are defamatory are by the law of England treated as absolutely privileged, so that, although they are untrue, defamatory and malicious, the law does not allow any action to be brought in reference to them. The reason is that there are certain relations of life in which it is so important that persons engaged in them should be able to speak freely that the law takes the risk of their abusing the occasion and speaking maliciously as well as untruly, and in order that their duties may be carried on freely and without fear of any action being brought against them, it says: 'We will treat as absolutely privileged any statement made in the performance of those duties.'"

Having concluded that the privilege extended to judges, counsel and witnesses, Scrutton LJ went on to consider whether it extended to a client consulting his solicitor and making statements to him for the purpose of obtaining advice and for the purpose of discussing the advice given - statements which are untrue but which are made for the purpose of obtaining advice. He referred to the judgment of Lord Bowen in Browne v Dunn (1893) 6 The Reports, 67, 80 where Lord Bowen stated that he very much doubted "whether malice destroys that kind of privilege, unless it is shown that what passed was not germane to the occasion." Scrutton LJ observed that the inclination of Lord Bowen's opinion was in favour of the view that in such a case there was absolute privilege, provided the communication was relevant. Thus, unnecessary words used in the Letter would not of themselves destroy the privilege. Relevancy is the test.

20. However, it is to be noted that in the later case of Minter v Priest [1930] AC 558, Lord Atkin (at 586) expressly left open the correctness of the decision in More v Weaver. Mr Burns made the point that Minter v Priest is distinguishable on the facts because there the jury had found on admissible evidence that the words complained of were not spoken "for the purposes of giving or receiving professional advice" but were uttered for the independent purpose of securing to the solicitor an interest in a different transaction in the same property. For my part, having regard to the conclusions reached in paragraph 18 above, it is unnecessary to rule on the correctness of More v Weaver for the disposal of the present appeal and I propose to leave open the scope of absolute privilege in solicitor-client communications for determination in an appropriate case.

Hon Ma JA:

21. I have had the advantage of reading in draft the Reasons for dismissing the appeal given by Le Pichon JA. I agree with them and wish only to add briefly some further observations.

22. The preliminary issue determined by Hartmann J under RHC Order 33 rule 3 was whether the words "intellectually dishonest" contained in the Letter (those words being alleged by the plaintiff to be defamatory of him) were published on occasions of absolute privilege. There were three such occasions as Le Pichon JA has identified. Hartmann J held that all three occasions were absolutely privileged. We dismissed the appeal after hearing submissions on 29 November 2002.

23. The defence of absolute privilege is, as the name suggests, absolute in nature. It will provide a complete answer to any claim for defamation even where the relevant remarks are completely untrue or made with malice. It is precisely because of the intrusive nature of this defence into what otherwise would be a person's right to sue for defamation that the courts have traditionally been quite guarded in its application. In Royal Aquarium and Summer and Winter Garden Society Limited v Parkinson [1892] 1 QB 431, at 451, Lopes LJ remarked in relation to absolute privilege that, "It is, however, a privilege which ought not to be extended".

24. It would be wrong to say that the categories of absolute privilege are closed and one can see how absolute privilege has been made to apply to situations not envisaged at the time of the Royal Aquarium case (see for example the application of the defence to statements made prior to legal proceedings). Nevertheless, it is important to bear in mind, when considering this defence, the underlying rationale.

25. This is of course the public interest. As Devlin LJ said in Lincoln v Daniels [1962] 1 QB 237, at 255, "But absolute privilege is granted only as a matter of public policy and must therefore in principle be confined to matters in which the public is interested and where therefore it is of importance that the whole truth should be elicited even at the risk that an injury inflicted maliciously may go unredressed".

26. As to the defence of absolute privilege in judicial proceedings, which is relevant in the present case, the public interest consists of the administration of justice. As Brett LJ said in Munster v Lamb (1883) 11 QBD 588, at 604, "the rule of law is that what is said in the course of the administration of the law, is privileged".

27. Thus, in considering questions of absolute privilege in relation to judicial proceedings and the acts of those involved in it (among them judges, barristers and solicitors), it is I think important that one bears in mind at all times this aspect of the administration of justice.

28. There is a danger when having regard to the three categories of absolute privilege identified by Devlin LJ in Lincoln v Daniels at 257, to analyse them as words in a statute. Such an approach is apt to give rise to confusion and unnecessary difficulties. Esoteric and ultimately quite pointless questions arise such as whether documents brought into existence for "the purpose of the proceedings" (second category) must also be "practically necessary" (third category).

29. In my view, as long as it is borne in mind that the underlying theme is the administration of justice and that the three categories can and often do overlap, they provide in most cases a ready answer to any questions involving absolute privilege.

30. It is of course crucial to bear in mind in the application of the three categories, the question of publication. Devlin LJ's dicta in Lincoln v Daniels at 257, do not expressly mention this aspect. Publication is of course crucial in defamation actions. In the context of the three categories, one must also further ask the question: to whom was the statement, even if created or made in circumstances falling within one or more of the said three categories, published? For example, statements contained in pleadings are absolutely privileged, but if the pleadings are then sent to a newspaper and published, absolute privilege does not apply:- see Gatley on Libel and Slander (9th Edition) at para. 13.14. As Bayley J said in Flint v Pike (1825) 6 Dow & Ry K B 528 at 532, "the occasion justifies the one [speech of counsel at trial], but not the other [publication in the newspaper]".

31. In the present case, for the reasons given by Le Pichon JA, I share the view that the Letter fell within the second and third categories. In my view, solicitors' correspondence (such as the Letter) made in the course of legal proceedings which set out a party's position or stance in relation to any part of the proceedings, advance the administration of justice and are thus absolutely privileged. Such solicitors' correspondence are also "practically necessary" for the same reason. It will be recalled in the passage quoted from Devlin LJ's judgment in Lincoln v Daniels at 263, that it is "practically necessary for a litigant to engage a solicitor". Solicitors, too, have a crucial role to play in the administration of justice.

32. In addition, I am also of the view that the Letter fell clearly within the first category in that it was contained in bundles lodged with the court for the hearing of the interlocutory injunction application due to take place on 15 November 1994. Accordingly, any statements contained therein were made in the presence of the court (viz, coram judice). The submission made by the plaintiff that this category only covers the situation when parties are physically before the court is much too narrow a view. The administration of justice these days involves the court being provided with relevant material in advance of the actual hearing of any matter. Practice Directions ensure this. Thus, skeleton submissions and hearing bundles will be read by the judge or judges hearing the case and it is extremely difficult to say that when this takes place, statements contained in such submissions or bundles are not made in the presence of the court.

33. The three publications alleged by the plaintiff clearly fell within the ambit of the absolute privilege defence. There was no publication of the alleged offending words to anyone outside the relevant proceedings:- see Gatley at paragraph 13.14.

34. Finally, I would only say in relation to More v Weaver [1928] 2 KB 520 that, like Le Pichon JA, I do not find it necessary in the present case to decide the limits of the defence of absolute privilege in solicitor-client communications. Accordingly, I would not wish to adopt the principle in that case as an independent reason to dismiss the appeal. The facts of that case were quite different to those in the present, although I accept that Scrutton LJ's words were intended to be of wide application. Nevertheless, I note the reservations of the House of Lords in Minter v Priest [1930] AC 558 regarding this decision. Moreover, in Waple v Surrey County Council [1998] 1 WLR 860, at 867, Brookes LJ describes More v Weaver as a "controversial" decision. In the appeal before us, I am content to say merely that publication to one's own client of a letter written to the other side on an occasion of absolute privilege, is not only acceptable, but perhaps even obligatory.

Hon Stone J:

35. I agree with the reasons for dismissal of this appeal given in the judgments of Le Pichon and Ma JJA.

36. Whilst the points raised as to the ambit of absolute privilege are not without interest, I would observe, further, that it is surprising that this case has seen the light of day.

37. A robust (if arguably ill-chosen) phrase squirreled away in inter-solicitor correspondence written at the beginning of November 1994 - for which an apology thereafter was tendered - attracted the issue of proceedings well over five years after the letter in question, and some eight years later this court now has been required to adjudicate upon an appeal from judgment upon this preliminary issue.

38. It strikes me that a healthy dose of perspective and common sense has been sorely lacking in this litigation, which in my view represents, at the least, a remarkable waste of costs.