MAK SHIU TONG v. YUE KWOK YING AND ANOTHER

CACV 199/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 199 OF 2002

(ON APPEAL FROM HIGH COURT ACTION NO. 3758 OF 1998)

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J U D G M E N T

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Hon Cheung JA (giving judgment of the court) :

The appeal

1.  This is an appeal by the 1^st defendant against the decision of Chung J who struck out his defence and gave judgment to the plaintiff on his claim.

The words

2.  The plaintiff sued the 1^st defendant for defamation in respect of the words spoken by the defendant and published in a magazine.  The published words were :

「1.       有人收咗錢就無諗過起樓，本來御花園同天星廣場應該喺九五年底前完工，但係到而家為止，仲係爛地一塊。

2.           無諗住起已經唔係好事，為咗敷衍小業主，佢委託我當法律諮詢人，向小業主解釋中國法律，麥紹棠並答允按中國法例賠償未能如期交樓的利息，更承諾九六年底可以全部完工。原來麥紹棠一路以來都採『拖字訣』，而家小業主堅持喺廣東省，深圳等地告緊佢。按中國法例，小業主一旦勝訴，麥紹棠成為法定持牌人，一定要負責，會被起訴，香港法例唔同大陸法，喺大陸出咗問題，麥紹棠要負責。

3.           太陽城爛尾樓係一個『局』，受害嘅層面好廣，而有人就一個仙都無出過，更挪用訂金作收購其他上市公司之用...」

'1.    Someone after receiving the money never thought of building houses, originally work for Regent on the Park and Star Place should be completed before the end of  ’95, but up to now, still is a piece of wasteland.

2.    Never thought of building was already not a good thing, in order to fob off the small owners, he engaged me to be legal consultant, to explain Chinese law to the small owners, Mak Shiu Tong also agreed according to Chinese law to compensate interest for late hand over of property, and also promised full completion of work by end of ’96.  In fact Mak Shiu Tong was using 'delaying tactics' all along, now the small owners insisted on suing him in Guangdong province, Shenzhen etc.  According to Chinese law, if the small owners are successful, Mak Shiu Tong being the legal representative, must bear responsibility, will be sued, Hong Kong law is different from Chinese law, if a problem arises in China, Mak Shiu Tong must bear responsibility.

3.    'Sun City' uncompleted housing was a 'scam', level of victimization is very wide, but someone did not even contribute a cent, and even took the deposit to use for acquiring other listed companies...'

The defamatory meaning

3.  The plaintiff pleaded that the words were ‘defamatory of the plaintiff in the way of his profession, trade or business’.  (Paragraph 7 of the Statement of Claim)

4.  The plaintiff claimed that the defamatory meaning of the words was

'1)    the project was a scam devised by the plaintiff;

2)     the plaintiff had swindled money from investors under the pretence but with no intention of building or developing any property; and

3)     the money that was swindled was then used by the plaintiff privately to purchase listed companies in Hong Kong.'

        (Paragraph 9 of the Statement of Claim.)

5.  Paragraph 10 of the Statement of Claim further pleaded that ‘the words complained of imputed a crime punishable by imprisonment, namely obtaining money from investors by deception and/or a fraudulent scheme and that those words were calculated to and did disparage the plaintiff in his profession, trade or business’.

6.  Paragraph 11 further pleaded that ‘the plaintiff’s personal and business reputation has been seriously damaged and he has suffered considerable distress and embarrassment’.

Defence

7.  Much has been said about the nature of the defence.  It is clear that before the judge, according to the state of his pleading, the 1^st defendant merely denied that the defamatory words were referable to the plaintiff.  His substantive defence was justification and fair comment.

8.  That the words referred to the plaintiff was clearly evidenced by the repeated reference to the plaintiff in the published article.

9.  The admission that the words contained the defamatory meaning was also supported by the way paragraph 4 of the Amended Defence was pleaded.  There was no express denial and the meaning of the defamatory words was deemed to have admitted.

10.  In respect of justification and fair comment, what the 1^st defendant sought to justify and relied on by way of fair comment was that the project was a scam and the plaintiff had no intention to build or develop any property.  It is clear that the particulars relied upon by the 1^st defendant simply do not support the plea and in fact some of the particulars contradicted the plea.  Theparticulars failed to show that the intention not to develop or build was present when the project was introduced.

Defence properly struck out

11.  In our view, based on what was pleaded in the Amended Defence, the defence and counterclaim was properly struck out.

Application to amend defence

12.  The substantive issue in this appeal is whether leave should be granted to the 1^st defendant to further amend the Amended Defence (the counterclaim was abandoned), so that the judgment that was entered against him would be set aside and he would be allowed to defend the action.

13.  In the proposed amendment the 1^st defendant maintains his defence of justification and fair comment.  The most important aspect of the amendment is at Paragraph 4 which now reads :

‘The 1^st Defendant denies paragraphs 7, 8, 9, 10 and 11 of the Claim in that the 1^st Defendant avers that Plaintiff at all material times had no intention of building or developing any property to completion as originally scheduled or at all “Someone” mentioned in the Words referred to the relevant company.  Save that the Plaintiff’s name was specifically referred to, those Words have no connection with the Plaintiff.’

Withdrawing an admission

14.  By this new amendment, the 1^st defendant did not completely deny the defamatory meaning of the words relied upon by the plaintiff in Paragraph 9 of the Statement of Claim.  If there was a complete denial of the defamatory meaning of the words,it would amount to a withdrawal of an admission which the 1^st defendant has to justify before he would be allowed to withdraw it.  But even in its current state, the new paragraph 4 is still seeking to withdraw (although not completely) an admission of the defamatory meaning as pleaded by the plaintiff.  The 1^st defendant is now, in effect, saying that the project was still a scam.  Although the plaintiff might not have such an intention when the project was introduced, he developed this intention later on.

15.  Mr. Kwong, counsel for the 1^st defendant, while relying on this meaning, at the same time submitted that the 1^st defendant is still contesting the case on the basis that the project was a scam from the beginning.  This was the stand of the 1^st defendant at the hearing before the judge.  His defence of justification and fair comment on such a basis was clearly unsustainable. 

16.  As to the defamatory meaning now relied upon by the 1^st defendant, he really has to show why he had previously made the admission and why he only seeks to make the withdrawal at such a late stage.

The explanation

17.  The only explanation that was offered is that the 1^st defendant drafted the defence personally and he had omitted to place a full stop after he denied paragraphs 7, 8, 9, 10 and 11 of the Statement of Claim.  It was explained that the intention of the 1^st defendant was to deny paragraphs 7 to 11 in respect of the defamatory meaning relied upon by the plaintiff and also a specific denial of the reference to the plaintiff.  Mr. Kwong also challenged the accuracy of English translation of the Amended Defence which included the words ‘in that’ after the denial.

18.  We are unable to accept this explanation.  Paragraph 4 of the Amended Defence and its translation are as follows :

「四、第一被告否認申索書第七、八、九、十、十一段文字祗提及之有人是指有關的公司，除了特提及原告人姓名，文字并不牽涉原告人。」

'4.        The 1^st Defendant denies paragraphs 7, 8, 9, 10 and 11 of the Claim in that the “Someone” mentioned in the Words referred to the relevant company.  Save that the Plaintiff’s name was specifically referred to, those Words have no connection with the Plaintiff.'

19.  Even without relying on the translation, it is clear from a fair reading of paragraph 4 that the denial was directed only towards the identity of the plaintiff.  This is apparent from the structure of the sentence itself.  In the absence of a satisfactory explanation, the 1^st defendant should not be allowed to withdraw from the admission at such a late stage.  

20.  The action was commenced on 11 March 1998.  The Amended Defence was filed by the 1^st defendant’s legal representatives on 27 October 1998.  On the basis of this defence, judgment was obtained on 23 March 2002 which was four years after the commencement of the action.  The application to re-amend was only made by summons dated 13 September 2004, a substantial time after the judgment had been obtained.  This being the situation, the proposed amendment must be subject to a stringent scrutiny than is the usual case of amending pleading before judgment.  After all, a judgment has indeed been obtained.                                     

21.  Furthermore, the 1^st defendant had failed to specify at this late stage as to when this intention not to complete took place.  Mr. Kwong vaguely suggested that the scam began ‘somewhere along the line’ after the project had started.  This is simply not good enough when the words imputes fraud on the part of the plaintiff.  Specific details must be provided for by the 1^st defendant, particularly at this late stage.

22.  The new particulars provided by the 1^st defendant in the proposed amendment such as ‘The plaintiff did not build the houses as scheduled’; ‘The plaintiff did not build a single house’ and ‘The plaintiff devised a complicated and false scheme to withdraw from the company concerned when he knew that he would be held responsible for his failure to build the property’ do not advance his new case any further.  Even at this stage, he still has not provided details on his allegations of ‘a false scheme to withdraw from the company’.

Amendment refused

23.  This Court had expressed certain views on the defence in the application for security for costs.  They were provisional views made in an interlocutory application.  We had expressly made clear that they were not intended to be a final opinion on the matter.

24.  In our view the 1^st defendant has not satisfied the high threshold that is demanded of him for putting forward a new case after judgment had been obtained.  We will refuse the application to amend.

Conclusion

25.  Accordingly we will dismiss the appeal with costs to the plaintiff.