PHOON LEE PILING CO LTD AND ANOTHER v. THE HONG KONG HOUSING AUTHORITY

CACV 303/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 303 OF 2002

(ON APPEAL FROM HCA NO. 119 OF 2001)

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1. This was an appeal from a judgment of Deputy High Court Judge Cheung given on 11 July 2002. As part of the appeal the appellants/plaintiffs applied by notice of motion that I should be discharged. That motion was heard first. It was dismissed with reasons to be given later. The plaintiffs were then invited to address the court on their appeal. Mr Choy Bing Wing, who represented the 1st plaintiff at the hearing of this appeal, did not address the court on the appeal and the hearing of the appeal was adjourned for 10 minutes. In that period Mr Choy and the 2nd plaintiff departed from the court and could thereafter not be located in the vicinity of the court. Their appeal was therefore treated as abandoned and dismissed.

Background

2. The 1st plaintiff is a company which has specialised in piling. The 2nd plaintiff founded the 1st plaintiff and at all material times was a director and shareholder; he was the person primarily responsible for the control and management of the 1st plaintiff. Although not specially pleaded in the statement of claim, it appears that the 1st plaintiff was a piling subcontractor in respect of works which were undertaken on behalf of the defendant at Tung Chung Area 30 Phase IV Project ("the Project"). There is no dispute between the parties that by a letter dated 20 January 1999 the defendant instructed the contractor to prohibit all personnel of the 1st plaintiff from entering the site area of the Project. It is the plaintiff's case that that letter has caused the 1st plaintiff to be removed not only from the Project but also other sites and has effectively caused the 1st plaintiff to be unable to engage in any piling work.

3. On the following day, 21 January 1999, the ICAC issued a press release the substance of which has been set out in paragraph 15 of the defence in this action. The press release related to ICAC investigations into allegations of bribery relating to the piling subcontractor at the Project site although the 1st plaintiff was not named as such. On the same day the defendant also held a press conference. The substance of the press conference now forms part of the subject matter of this action. A translation of what is pleaded as being the relevant part of what was said at the press conference is provided by the defendant in Schedule 3 to its defence as follows:-

"The number of [defective] piles is now suspected to be about 10, depth is still unknown at the moment. Perhaps ... Er ... at the moment we, generally speaking, the depth of [the piles in] this site is between 20 to 30 metres, probable depths, suspected depth [of the piles] are 10 odd metres short, perhaps by 10 to 10 odd metres.

We found out that out of the total number of 663 piles, the number of piles that are problematic is about 10 or so, as to the reinforcement bars, according to tests, they have failed, [the contractor] should have removed the entire batch from site without using them, but the contractor has used them."

4. A prosecution followed of, amongst other persons, the 1st plaintiff's site agent at the Project site. Amongst other charges brought against the site agent was, apparently, a charge of conspiracy to defraud contrary to common law. The substance of that charge appears to have been that the site agent had falsely stated that two piles were 36 metres long. The site agent was acquitted by HH Judge Line on 20 September 2000. It is not clear from the reasons for verdict precisely which two piles were involved. Nevertheless, there have been exhibited in this action test reports which were said to have been provided for the purposes of the defence showing that the piles in question were CC196A and CC197A. Mr Choy was the site agent's expert witness. On the strength of his evidence HH Judge Line was satisfied that there had been no short piling in respect of the two piles in question.

5. On 9 January 2001, the plaintiffs commenced this action against the defendant. There were two main causes of action pleaded. The first was wrongful interference with contractual relations. This was based upon the defendant's letter of 20 January 1999. The second cause of action was defamation based upon the press conference. The other cause of action, which was linked with the defamation claim, was in respect of malicious falsehood. In respect of the latter causes, the plaintiff relied upon the press conference itself and, under paragraph 11, that:

"The aforesaid words defamatory of the 1st plaintiff were further published to the Hong Kong citizens:-

(i) on 21st January 1999 by Television Broadcasting Co. and Asia Television and Cable TV during their respective news broadcast; and

(ii) on 22 January 1999 by South China Morning Post, Oriental Daily, Apple Daily, Hong Kong Economic Times, Economic Journal, Sing Tao Daily, Sing Po Daily News, Tin Tin Daily, Tai Kung Pao, Wen Wui Pao, Sun Pao and Ming Po."

Further and better particulars were asked for in respect of the allegations in relation to defamation and malicious falsehood and these were provided.

6. Following that, application was made to the master to strike out the allegations in relation to defamation and malicious falsehood. The grounds upon which the application was made were that there were no material facts pleaded which identified the plaintiffs as being defamed or the subject of any malicious falsehood. Specifically, the matter referred to at the press conference, as quoted above, does not refer to the plaintiffs and the words complained of in the television broadcasts and newspaper articles referred to in paragraph 11 of the Statement of Claim were not specified. In this respect, nothing of relevance emerged from the further and better particulars.

7. The question of the adequacy of the pleadings in these respects is either clear on the face of the pleadings or it is not. Nevertheless, on 4 December 2001 an affidavit was filed of a Mr Ho Shu Kee, who was the Chief Manager/Management (Support Services) of the defendant alleging that a number of specified piles, other than CC196A and CC197A, were short. Reference has also been made to what it was said had been found by HH Judge Line. The plaintiffs considered that this evidence was incorrect. In respect of the four piles which were mentioned in Mr Ho's affidavit, it was said that it had been erroneous to rely upon documentary evidence in relation to one of those piles and in relation to the other three the defendant knew that the evidence in relation to them was unreliable. On this basis Mr Choy, representing the 1st plaintiff, asserted that no order could be made upon the defendant's application because it was made dishonestly, fraudulently and on the basis of perjured evidence. (See e.g. transcript 17 April 2002, p. 14 S-T)

8. Mr Choy had been made a director of the 1st plaintiff on 20 January 2002. Shortly thereafter, application had been made before the practice master that Mr Choy be allowed to represent the 1st plaintiff on the basis that the 1st plaintiff was impecunious. That application was granted ex parte. It is not known whether the master was aware of or took into consideration the fact that Mr Choy had filed evidence as an expert witness in the case. Nor is it known whether the master considered whether Mr Choy had had any interest in, or involvement with the affairs of, the 1st plaintiff other than having been appointed a director a few days before. The hearing of the defendant's summons came before the master on 22 February 2002 and the second day of the hearing was on 17 April 2002. The master gave her decision immediately. She ordered that the paragraphs relating to defamation and malicious falsehood should be struck out. There was no application by the plaintiffs, at that stage, for leave to amend the statement of claim although that had been presaged in the plaintiffs' skeleton argument.

9. The matter was then taken on appeal to the deputy judge below. In opening the appeal Mr Choy, on behalf of the 1st plaintiff, again sought to rely upon the proposition that the defendant's application should not have been heard because of the affidavit filed by Mr Ho. He went further, however. In opening the case he said:

"I represent Phoon Lee today. I would like to state a defraud case, a deception case. It's a collateral deception. The defendant's lawyer conspired with (the master). It's a judgment given out of deception." (Transcript 11 July 2002 p. 1 Q-S)

The deputy judge attempted to explain to Mr Choy, as had the master, that the question of the sufficiency of a pleading was a technical matter. He said it was a matter that concerned the court as much as the parties and if a pleading were defective the court could, and in appropriate circumstances would, strike out the relevant parts of the pleadings. Mr Choy, however, carried on:

"Thank you for your explanation, I fully understand. The most important thing is that now someone appears in court trying to commit collateral fraud I have a duty to assist the court to disclose it. They committed a crime. In the case of collateral fraud and fraud, the cause of action, there is no difference." (Transcript p. 3 J-K)

10. The deputy judge heard Mr Choy's submissions on the preliminary point taken that the defendant's application should not have been heard. The deputy judge gave a short ruling indicating that he would hear the whole case first. He decided to do so particularly as this was a strike out application which had been decided by the master on the basis of the pleading alone and that until he had heard the full appeal he did not consider it appropriate to make any ruling on whether the alleged fraud should automatically prevent the defendant from obtaining a strike out order. It appears that after the deputy judge made that ruling, Mr Choy and the 2nd plaintiff left the courtroom and refused to take any further part in the appeal. The judge proceeded to hear the defendant. He came to the conclusion that Mr Ho had not presented a document dated 1998 as being a document prepared in 1999. He was not satisfied that there were any grounds for alleging that the defendant had misled the court. On the substantive matter of the appeal the deputy judge agreed with the master that the pleading was defective and he was not prepared to vary her order.

11. There was then a notice of appeal dated 20 July 2002 seeking to set aside the orders of the master and the deputy judge. The grounds of appeal were as follows:

"1. The learned judge erred in law in failing in his duty to examine fraud and perjury before adjudicating the merits of the case of the defendant.

2. Before satisfying himself that the sole evidence relied on by the Defendant's Counsel was reliable and not perjured evidence, the learned Judge took into consideration such doubtful and suspicious evidence and founded his entire conclusion and decision on such fraudulent evidence.

3. On a crucial fact of whether there had been a test carried out in February 1999 and whether such a test could be reliable by reason of certain 1998 data had been attached to such a test claiming to be direct result of such a test, and on this reason the Plaintiffs had established a prime facie case of fraud and perjury before the judge, the judge accepted such a clearly perjured fact to be true.

4. Defendant's Counsel in his submission reversed the version of the sworn evidence, the judge erred in accepting such wrongful new evidence as admissible evidence to found his conclusion and decision."

12. Following an appearance before the Deputy Clerk of Court responsible for listing cases in the Court of Appeal, Mr Choy wrote to the court objecting to no less than 7 judges hearing the case on appeal. The Chief Judge of the High Court gave directions that the hearing of this appeal should be listed in the usual manner and it was listed before this court.

13. By notice of motion dated 22 April 2003 the plaintiffs sought an order that I should "be disqualified and discharged from presiding over the appeal". In support of that motion Mr Choy filed an affirmation to which were exhibited various judgments which were given in relation to a winding up petition ("the petition") which had been presented by a Mr Ng Yat Chi and Mr Choy against Max Share Limited naming China Resources (Holdings) Company Limited as the 2nd respondent.

14. The basis of Mr Choy's objection was that I had given two decisions with which he did not find favour. The first was on an application in November 1996 to strike out the petition. As already noted, there were two petitioners: Mr Choy himself and Mr Ng Yat Chi, a bankrupt. I struck out the petition in respect of both. The order which I made striking out Mr Choy as a petitioner was upheld by the Court of Appeal. The other petitioner, Mr Ng Yat Chi, was a bankrupt registered shareholder. The issue was whether such a person who had sold his shares to someone, to whom the company had refused to transfer the shares, and whose trustee in bankruptcy had disclaimed any interest in those shares, still retained a right to petition for winding up the relevant company and for relief under section 168A of the Companies Ordinance, Cap. 32. The reasons for the decision are set in my Decision of 26 November 1996. It was based on the various provisions of the Companies Ordinance. On appeal, the Court of Appeal reversed the decision in respect of Ng Yat Chi. As Keith J in the Court of Appeal pointed out in his judgment, the argument in the Court of Appeal was different from that presented at first instance. Although the Court of Appeal refused leave to appeal, the Appeal Committee of the Court of Final Appeal granted leave to appeal on the basis that there was a question of great general or public importance. The decision of the Court of Appeal was not varied, but the Court of Final Appeal's reasons, nevertheless, did not exactly coincide with those of the Court of Appeal. Mr Choy's complaint stems from the fact that no reference was made in my Decision to the decision of Pennycuick J In Re K/9 Meat Supplies (Guildford) Ltd [1966] 1 WLR 1112. However, that decision was not on point: it concerned a situation where there had been no disclaimer by the trustee in bankruptcy; neither had there been any sale of the shares. On the contrary, the proceedings in that case were taken on behalf and at the instigation of the trustee in bankruptcy. Although the decision in that case was mentioned in the judgment of Ching JA in the Court of Appeal, it did not form the basis of the judgment and the decision was not referred to in any of the judgments in the Court of Final Appeal.

15. The second decision which was the subject of the exhibits to Mr Choy's affirmation was the decision of this court given on 23 November 2000 in relation to the appeal on the winding up in the same proceedings. Mr Ng Yat Chi had succeeded before Yuen J in obtaining an order for the winding up of Max Share Limited. This court set aside that order. Although I gave the main judgment, the two remaining members of the court agreed with that judgment in its entirety and without any reservation. Application was made before this court for leave to appeal to the Court of Final Appeal but was refused. That application was renewed before the Appeal Committee. The Appeal Committee heard the matter on 17 September 2001 and in the judgment of the Appeal Committee, this court's decision to allow the appeal on one of the two main grounds of the judgment was wholly endorsed. In the absence of full argument, the Committee preferred to express no view as to the other of the two main grounds. The Appeal Committee said:

"The Court of Appeal was correcting an error of law involving misapplication of the relevant legal principles by the trial judge. It was not involved in any impermissible interference in the judicial discretion."

16. Exception was taken by Mr Choy to reference being made in the Court of Appeal judgment to the underlying asset value of the shares. The complaint turns upon the paragraph starting at p. 20Q and concluding at p. 21D. The paragraph reads:

"In reaching her conclusion that the shares would have been rendered unattractive and worthless to Mr Choy, the judge did not embark upon any analysis which said that the underlying asset value per share would have been any different after the increase in the number of shares and the consequent injection of capital than it was before. When the point was put to Mr Yip who appeared on behalf of the petitioner, he was not able to point to anything, whether it be in the accounts or anywhere else, which would have shown that the value of the shares as quantified on an asset valuation basis, or any other basis, had been affected by the increase in the share capital."

17. It was said that that conflicted with a finding of the judge in that the judge had rejected a share valuation report. The passage quoted from Yuen J's judgment at p. 20Q to 21C does not go to undermine what was said in the passage quoted above from the Court of Appeal judgment. Furthermore, what was said in the Court of Appeal was said after full argument and, specifically, after the matter had been put to Mr Yip, the petitioner's counsel. This court refused leave to appeal to the Court of Final Appeal as the proposed appeal had been devoid of merit. The Appeal Committee of the Court of Final Appeal heard argument and reached the conclusion that there was no merit in an appeal. The Appeal Committee agreed with the Court of Appeal that it lay ill in the mouth of a petitioner who had defrauded the company and his fellow investors to complain that he had not been accorded equitable treatment by those other investors, characterised as members of an alleged quasi-partnership. The Appeal Committee endorsed the Court of Appeal's decision to allow the appeal on the basis that the new issue of shares had not resulted in an unfairly prejudicial dilution of the petitioner's interest.

18. Mr Choy, in this court, took exception to the statement in paragraph 4 of the Appeal Committee ruling:

"At the end of November 1990, the petitioner entered into an agreement to sell his shares in the company to Strong Progress. This required a valuation to be conducted. The factual basis of the valuation was not called into question by the judge. It showed that the company was in a dire financial condition."

19. Before this court Mr Choy said:

"The Court of Final Appeal Committee endorsed the share valuation report which was a piece of rubbish. ...

The Appeal Committee put the words into the mouth of Yuen J in order to support your cheating."

20. The law relating to judicial bias has been considered recently in the case of Porter v Magill [2002] 2 AC 357. Lord Hope considered the various authorities in relation to judicial bias and in particular R v Gough [1993] AC 646 and what had been said in Webb v The Queen (1994) 181 CLR 41 and what had been said in the Court of Appeal in the case then under appeal. At page 494, Lord Hope summarised his conclusions. The test which emerged would be phrased along the following lines: The court must first ascertain all the circumstances which have a bearing on the suggestion that the judge was biased. It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility that the tribunal was biased.

21. In considering the circumstances of this case, I note first of all that whilst Mr Choy, in the course of argument, said that his objection was personal to him, he has brought forward no matters other than his complaints in relation to the decisions in relation to the proceedings against Max Share Limited and China Resources Limited. His reference to "cheating" in relation to the decision in 1996 amounts to an allegation that a different view of the law was taken on a matter which was considered by the Court of Final Appeal to be of great general or public importance and warranted an appeal to that court. Insofar as reference has been made to the fact there was an expression of dissatisfaction because counsel from the Official Receiver's Office requested an adjournment for half an hour in order to retrieve a copy of a decision, which he was well aware he would rely upon, which was in his office, the complaint is equally baseless. Such a request for an adjournment would have been unthinkable a few years ago. The business of the Companies Court would come to a grinding halt if such adjournments were sought and granted for such reasons. The adjournment only produced an authority which related to a case where the petition was presented in the name of a bankrupt, effectively, by the trustee in bankruptcy. The decision thus had no bearing on the situation which was then under consideration, where the trustee in bankruptcy had disclaimed any interest in the shares. Indeed, it might also be noted that the decision of Pennycuick J pointed out that the quasi-partnership had been between the bankrupt and the other members of the company and that hence the trustee in bankruptcy never had been part of that quasi-partnership. It is hardly surprising, therefore, that that decision was not mentioned by any of the judges of the Court of Final Appeal.

22. Mr Choy's allegation of cheating and fraudulent judgment in relation to the Court of Appeal judgment, again, has no other basis than that this court, of three judges, had reversed a judgment in the court below. That reversal was endorsed by the Appeal Committee of the Court of Final Appeal and likewise the allegation against that Committee that it put words into the mouth of the trial judge to support "cheating" has no basis whatever.

23. Mr Choy's remarks were no more than vulgar abuse. They were unsupported by any fact or allegation which would go to show bias, still less bias against Mr Choy personally. This conclusion follows inexorably from Mr Choy's submissions. One can only comment, however, that it is entirely regrettable that in the course of correspondence and submissions in relation to this case alone Mr Choy has attacked the integrity of at least 2 masters, the Registrar of the High Court, a deputy High Court judge, 2 High Court judges, the Chief Judge of the High Court, 4 other members of the Court of Appeal, and the 3 permanent judges of the Court of Final Appeal. In respect of each, the attack has been mere abuse, it has been baseless.

The appeal under consideration

24. After the plaintiffs' notice of motion had been dismissed with reasons to be provided, Mr Choy was invited to argue the appeal. Mr Choy declined to do so and continued to shout abuse. A short adjournment was taken in order to enable Mr Choy to recover his composure and address the court in a civilized manner. Upon the appeal being called on at the time appointed, Mr Choy and the 2nd plaintiff were no longer in the court or outside. In the circumstances the appeal was taken as abandoned and accordingly dismissed. In dismissing the plaintiffs' appeal the court considered the decisions of the master and the judge in the court below. I consider that there are no grounds for disturbing the conclusions and decisions to which the master and judge have come. I would go further however. The plaintiffs have consistently heaped abuse on the master and judge. In the notice of motion seeking to disqualify and discharge myself from hearing the appeal, reference is made to the appeal being "against the crookery acts of the judges below." There is not one iota of justification for such an attack on their integrity. They can, however, take some consolation from the fact that they are not alone in the abuse which has been heaped upon them. Similar abuse would appear to have been directed at every judge who has given a decision with which Mr Choy did not agree. Even the Chief Judge of the High Court was accused in the letter of 11 December 2002 of having failed in his duty either incompetently, recklessly or dishonestly.

25. Whilst judges are prepared to overlook outbursts from litigants in person, not least because it can be appreciated that they may well have a considerable emotional involvement in the cases, in the present case Mr Choy's conduct has gone well beyond a mere emotional outburst. Indeed, his conduct both in this court and in the court below has been directed to invective and abuse, disregarding entirely the need to address the issues involved.

26. It is appreciated that proceedings in court can be extremely stressful. That stress might build up over a period of years. As the judgment of Chief Justice Li of 18 May 1998 demonstrates, Mr Choy had been actively involved in relation to Max Share Limited since April 1992. It may well be expected that Mr Choy was disappointed by the outcome of the Companies (Winding Up) No. 321 of 1996. However, Mr Choy's conduct in this court and in the court below cannot be condoned on the basis that it is attributable to such disappointment on the part of a litigant in person.

27. It should be noted that in the court below Mr Choy and the 2nd plaintiff left the court when invited to address the court on the issues relating to the pleading of the statement of claim which had been held by the master to be defective. He did the same in this court. Mr Choy's conduct has not been directed to dealing with the issues in the case. It has already been noted that by ex parte order dated 6 February 2002 Mr Choy, who had recently been appointed a director the 1st plaintiff, was given leave to represent the 1st plaintiff in these proceedings. In view of Mr Choy's conduct it would be clearly appropriate for that decision to be reviewed.

28. This matter will be referred to the Secretary of Justice with a view to consideration of the commencement of contempt proceedings in relation to Mr Choy's conduct.

Hon Le Pichon JA:

29. I agree.