KAN SIU KEI v. YIP KA WING

DCCJ 3476/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.3476 OF 2016

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DECISION

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1.  The matter for me to decide is the appropriate costs order to make after I gave leave for plaintiff to withdraw his summons filed 15 July 2016 (“the summons”). Mr Ng, plaintiff’s solicitor, contended for costs in the cause while Mr Chow, counsel appearing for defendant, submitted that plaintiff should pay defendant’s costs on an indemnity basis.

Background

2.  On 15 July 2016, plaintiff issued writ of summons indorsed with statement of claim (“SOC”) against defendant. His claim is one of defamation against specified Chinese words, found in 4 different sets of leaflets (“the leaflets”),and reproduced verbatimin para 2 of SOC (“the defamatory words”). Among other prayers sought in SOC is injunction to restrain defendant etc from further publishing the defamatory words or similar words defamatory of plaintiff.

3.  On the same day, plaintiff took out the summons, under O.29 of the Rules of District Court, Cap.336H (“RDC”), for an injunction to restrain defendant etc from further publishing the leaflets or the defamatory words or similar words defamatory of him.

4.  On the same day, plaintiff filed his 1^st affirmation in support of the summons (“plaintiff’s 1^st affirmation”), exhibiting, inter alia, copies of the leaflets.

5.  On the return date of the summons i.e. 16 Aug 2016, plaintiff filed his 2^nd affirmation (“plaintiff’s 2^nd affirmation”), exhibiting, inter alia, defendant’s Facebook posts extracted on that day (“defendant’s FB posts”). This was served on defendant about 2 hours prior to the hearing that day at 2:30 pm before Deputy District Judge J. Chow (“the call-over hearing”).

6.  At the call-over hearing, Deputy District Judge J. Chow adjourned the summons for argument, gave leave to defendant to file affirmation in opposition within 28 days and leave to plaintiff to file affirmation in reply within 21 days thereafter. An oral application by Mr Ng for interim injunction until argument date of the summons was declined by her honour.

7.  On 2 Sept 2016, defendant filed his affirmation in opposition to the summons (“defendant’s affirmation”).

8.  On 21 Sept 2016, in letter marked without prejudice save as to costs, plaintiff’s solicitors offered to defendant’s solicitors to withdraw the summons with costs in the cause (“the offer”).

9.  On 26 Sept 2016, defendant filed his defence.

10.  On 27 Sept 2016, defendant’s solicitors wrote to plaintiff’s solicitors rejecting the offer.

11.  Further correspondences were thereafter exchanged between the parties’ solicitors with the offer repeated in open letter on 27 Sept 2016 and rejected again on 30 Sept 2016.

12.  On 20 Oct 2016, plaintiff filed his reply.

Relevant law & principles

13.  The starting point must be that costs of and incidental to the summons are at my discretion. O.62 r.3(2A), RDC, reads:

“If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any interlocutory proceedings, it may, subject to this Order, order the costs to follow the event or make such other order as it sees fit”.

14.  Both parties also referred me to Gatley, Libel and Slander (12^th ed) para 25.30 [972-3], which reads:

“Traditionally, where an interim injunction is granted to hold the ring until he substantive dispute between the parties has been adjudicated upon at the trial, the court would normally reserve the costs of the application to the trial judge, or order costs to be in the case. However, costs are entirely in the discretion of the court, and in recent times judges have shown themselves willing to apportion the costs conclusively following the grant or refusal of an interim injunction. Meanwhile, if an injunction is sought in circumstances where it clearly could not be granted (because, e.g. the defendant avers that he intends to plead and prove justification), the claimant is likely to be ordered to pay the costs of the application”.

15.  Mr Chow submitted there are principles for costs peculiarforinterlocutory injunction application in defamationcases. But,on closer look of the cases of interlocutory injunction cited in the footnotes of para 25.30 of Gatley, Libel and Slander, supra, they are, however, not defamation cases.

16.  Mr Ng submitted that the principles for costs laid down in applications for interlocutory injunction in general should apply as well to applications in defamation cases. He relied on para 27 of Rogers VP’s judgment in King Fung Vacuum Ltd v Toto Toys Ltd [2006] 2 HKLRD 785, 794:

“... The traditional order on interlocutory injunctions has been that the successful party in any application for an interlocutory injunction would have his costs in the cause. Following the American Cynamid decision, the practice has frequently been to make both parties costs, costs in the cause. There is no justification if one applies American Cynamid principles for giving the successful party his costs in any event, or worse still an immediate order as to costs, unless of course, that party has acted improperly or is in some way to be penalised. It could be, for example, that if a plaintiff seeks an interlocutory injunction and the application is totally baseless and does not even establish, for example, that there is a matter fit to be tried, that the court would then consider that such an order might be made. But those would be very special circumstances. Normally an order of either costs in the cause, or perhaps the successful party’s costs in the cause would be appropriate.”

17.  Mr Ng further submitted that, by reference to wordings of the injunction at para 10 of the judgment, King Fung Vacuum Ltd, supra, is a defamation case. But, as was pointed out by Mr Chow, looking at its first instance judgment[1], counsel for applicant below put his application on the basis of an injunction to restrain unlawful interference with trade or business and notone to restrain a libel.

18.  Mr Chow further submitted that Godfrey Lam J. had in Emperor International Holdings Ltd v Atnext Ltd [2016] 1 HKLRD 77 laid down principles for costs for interlocutory injunction in defamation cases. Having read para 42 of the judgment, I do not think his lordship had done so. In making the costs order as he did, his lordship was, I think, no more than noticing the increasing trend after Civil Justice Reform to treat, and deal with, applications discretely.

19.  But I think Mr Chow is right to emphasize, in approaching application for interlocutory injunction in defamation cases, courts do not apply American Cynamid principles referred to by Rogers VP in King Fung Vacuum Ltd, supra.

20.  Instead, the proper approach in dealing with application for interlocutory injunction in defamation cases, where freedom of speech is involved and is thus of a delicate nature which ought only to be exercised in the clearest cases, has been set out by Deputy Judge Jeremy Poon (as he then was) in Chan Shui Shing Andrew v Ironwing Holdings Ltd [2001] 2 HKC 376, 378D – 379B:

“... the court will only grant an interim injunction where (a) the statement is unarguably defamatory; (b) there are no grounds for concluding the statement may be true; (c) there is no other defence which might succeed; and (d) there is evidence of an intention to repeat or publish the defamatory statement... Where the defendant contends that the words complained of are true, and swears that he will plead and seek at trial to prove the defence of justification, the court will not grant an interlocutory injunction unless, exceptionally, the court is satisfied that such a defence is one that cannot succeed...The position is similar where the intended defence is fair comment... The burden is on the plaintiff to show that the defence of justification will not succeed...”

21.  Chan Shui Shing Andrew, supra, was cited by Mr Ng but, judging from Mr Chow’s submissions and the Court of Appeal decision in Target Newspaper Ltd v Narain [1989] 2 HKC 16, 19E-I, 23B-H, he cited, I do not think him taking issue with the above principles. His submissions on costs of the summons involve much submission on its merits, including submission that the summons failed on all 4 conditions (a) to (d) above.

22.  On top of aforesaid, there are 2 other cases which I think I need to refer to. In Picnic at Ascot v Kalus Derigs [2001] FSR 2, a case also cited by Gatley, Libel and Slander, supra, in its footnote to para 25.30, Neuberger J. (as he then was), having reviewed a number of authorities, including decision of Hoffman J. (as he then was) in Kickers Int SA v P. Kettle Agencies Ltd [1990] FSR 436, reached a number of guidance at para 6 to 16 of his judgment [11-14].

23.  Among them, I would in particular refer to two. First, where a claimant obtains an interlocutory injunction on the basis of balance of convenience, the courts normally reserve the costs because it is inconsistent with the order for there to be a successful or unsuccessful party. Balance of convenience will often be determined by reference to facts which may be contested, and the court may at trial conclude that it had been persuaded to grant the injunction on the basis of assumed facts which turn out to be inaccurate, or even in the context of a claim which should never have been brought.

24.  Secondly, it is important to bear in mind that an order for costs reserved or an order for costs in the case may not turn out to be as sensible and fair at the time it is made. Very often there is no trial. And parties should not be encouraged to go to trial for such costs orders. The court should adopt a realistic attitude where it is fair and possible to do so as to whether the case is likely to go to trial or not.

25.  Finally, in Korea Exchange Bank v SSCP Holdings (HK) Ltd & Others, unreported, HCA 146/2013, 26 Jun2013, Au-Yeung J. emphasized that it is not necessarily the case that costs of  interlocutory injunction be in the cause. The court is entitled to look at the merits of the injunction at the time of its application. The outcome of the trial may not provide hindsight as to who should have been granted relief at the interlocutory stage, when the merits were still unresolved and the court was balancing convenience.

26.  Having reminded myself that my discretion under RDC must be exercised judicially, and with the above principles as guidance, save that balance of convenience had no role to play had the summons been argued before me on its merits, in which event the focus would be on conditions (a) to (d) above, I approach the exercise of my discretion in the individual circumstances of this case in the following manner.

My discretion for this case

27.  I have fully and carefully considered all materials, submissions and authorities before me. I propose to set out below the material matters that I have taken into account in chronological order of the different stages of the summons.

28.  On the issue of summons, I agree with Mr Chow that it was wrong for plaintiff to use the wordings of a final injunction: King Fung Vacuum Ltd, supra, para. 26 at 794C. However, I accept that plaintiff intended to apply for an interlocutory injunction. Mr Ng’s skeleton for the call-over hearing dated 11 Aug 2016 made this clear using the words “interlocutory” injunction and he further cited Chan Shui Shing Andrew, supra, and its 4 conditions (a) to (d) above.

29.  Though it may cause some confusion to the defence at first, I do not think the defence team was misled up to the call-over hearing. Defendant at para 15 of his affirmation referred to plaintiff’s solicitors indicating in their letter dated 11 Aug 2016 intending to obtain an “interlocutory” injunction. And Mr Chow at his skeleton for the call-over hearing dated 15 Aug 2016 quoted practice directions for interlocutory injunctions etc complaining that Mr Ng had submitted unnecessary lengthy skeleton submissions[2].

30.  Importantly, when the summons was filed on 15 July 2016, I think there were reasonable grounds for plaintiffto obtain an interlocutory injunction. For present purpose, I will say no more than this decision requires.

31.  Bearing in mind the 4 conditions (a) to (d) above, one first notes leaflet A bears the name of defendant as convener of one Sheung Tak “色魔”concern group with newspaper clipping of plaintiff under suit for suspected indecent assault. Words inviting others to come forward to resist Sheung Tak“色魔” are found.

32.  Among others, the defamatory meaning of the defamatory words at para 5(e) & (g) of SOC is that plaintiff is a sexual offender and has committed a criminal offence. As such, one must take into consideration the repetition rule: Gatley, Libel and Slander, supra, para 11.18 [414 - 416]; Law King Man Freeman v Chan Kin Hung, unreported, DCCJ 4563/2007, 3 Dec 2007, Her Honour Judge Mimmie Chan (as she then was), para 24, 40 to 43.

33.  On 10 June 2016, plaintiff’s solicitors sent their letter before action to defendant. The letter enclosed the 4 leaflets, quoted the defamatory words verbatim with the words “色魔”under emphasis and specifically pointed out, inter alia, the aforesaid defamatory meaning at para 5(e) & (g) of SOC. Written undertaking against publishing the said allegations or similar ones was demanded from defendant.

34.  Save to deny plaintiff’s interpretation of the contents of the leaflets, defendant’s solicitors in their letters dated 17 & 27 June 2016 offered not a single word of defence like justification, fair comment, qualified privilege etc.Undertaking demanded by plaintiff’s solicitors was rejected on the 27^th on the excuse that the exact scope of “similar ones” was open to question (I say excuse for I think the words “similar ones” are clear enough).

35.  In view of para 31 to 34 above, I think there were reasonable grounds to submit that all 4 conditions (a) to (d) were satisfied to obtain an interlocutory injunction when the summons was filed on 15 July 2016. I disagree with defence submission that the summons was doomed to fail or baseless at its beginning.

36.  Moving on to plaintiff’s 2^nd affirmation filed on the day of the call-over hearing, I disagree with Mr Chow that the reference therein to defendant’s FB posts expanded the case of the plaintiff.

37.  I agree with Mr Ng that plaintiff’s case remained one of defamation complaining of the defamatory words. Defendant’s FB posts in plaintiff’s 2^nd affirmation served first to support this case by showing that the defamatory words in leaflet A were distributed to the public through Facebook. It should be noted that these posts, though uploaded on 3 & 4 June 2016, remained on this mass media until the date of plaintiff’s 2^nd affirmation i.e. 16 Aug 2016.

38.  Further, plaintiff’s 2^nd affirmation produced additional parties’ correspondences to show that defendant had failed or refused to provide undertaking as demanded by plaintiff’s solicitors, which goes to condition (d) above. Indeed, defendant’s FB posts go to prove condition (d) as well.

39.  To be clear, there was no order preventing plaintiff filing his 2^nd affirmation before the call-over hearing. Equally, defendant can file his affirmation in opposition prior to it if he sees fit (but he did not). While it was, I think, unsatisfactory for plaintiff’s 2^nd affirmation to be served as short as 2 hours before the call-over hearing if the defence team was required to respond to it at the hearing, the defence team was not so required and suffered no prejudice. As was envisaged by Mr Chow in his skeleton, directions for filing affidavit were given by the court at this 15-minute-short call-over hearing.

40.  At the call-over hearing itself,while it was also, I think, preferable for Mr Ng to give defence prior notice of his seeking interim injunction pending argument date, apparently the court had no difficulty declining it for lack of urgency for it was common ground that this matter was argued for as short as 2 minutes after directions were given for filing affidavit evidence.

41.  At the call-over hearing, the summons was opposed by defence. No undertaking was offered by defendant. Though it was said that defendant intended to file affirmation in opposition to the summons, not a single word of defence like justification, fair comment or qualified privilege etc. was disclosed in Mr Chow’s then 2-page skeleton for the call-over hearing.I therefore think it reasonable for plaintiff to maintain the summons after the call-over hearing.

42.  Though plaintiff’s solicitors could, after the call-over hearing take out another summons to amend the summons to seek an injunction in terms of “interlocutory” injunction, there was plenty of time to do so until the argument date before me. As was emphasized by Mr Ng, decision was later taken to withdraw the summons after sight of defendant’s affirmation and that made amendments no longer necessary.

43.  Decision was taken by plaintiff to make the offer, it was said, because defendant at para 25(7) of his affirmation confirmed permanent deletion of defendants’ FB posts from the archive and his having no intention to re-post any such message. It served, Mr Ng submitted, to show that defendant had no more intention to repeat or publish the defamatory words required under condition (d) above and, thus, the summons could not be maintained further.

44.  While it was to plaintiff’s benefit and gain that defendant’s FB posts containing leaflet A were permanently deleted, I do not fully subscribe to plaintiff’s view that such action showed that defendant had no more intention required under condition (d) above. To be complete, defendant said at para 25(7) of his affirmation that he made the deletion “to avoid any unnecessary arguments and without admission to any of the plaintiff’s allegations”.

45.  But, in the context of para 25(4), (5) & (6) of defendant’s affirmation where he pointed to no evidence of any intention on his part to publish or continue publication of the defamatory words, plaintiff can perhaps be forgiven to take the view he took. Defendant denied setting up the alleged concern group found in leaflet A and stressed that defendant’s FB posts were not as late as July or Aug 2016.

46.  However, of more importance I think is that defendant said at para 25(1), (2) & (3) of defendant’s affirmation that he verily believed that there are grounds for him to believe that the alleged defamatory words were true, that he intended to justify the same at trial in so far as it may be necessary and that he was advised and he verily believed he had valid defence to allegations in SOC to be filed in defence.

47.  When defence was filed 24 days after defendant’s affirmation, fair comment was raised with particulars, justification was relied upon in so far the alleged defamatory words bear the meaning the defence contended for, and qualified privilege was put forward with particulars. And malice contended for by plaintiff in SOC was denied by defendant.

48.  Be that plaintiff took heed of para 25(1), (2) & (3) at the time of defendant’s affirmation or not, I agree with Mr Chow that, on the “extremely difficult hurdle” he must clearat law[3], plaintiff would likely havedifficultysatisfying conditions (b) & (c) to obtain interlocutory injunction had the summons proceeded for argument (for avoidance of doubt, whether these defence can be established at trial or not is, I must stress, totally a different matter).

49.  Hence, overall speaking, plaintiff’s withdrawal decision in the offer it made after the filing of defendant’s affirmationwas, I think, based on consideration of lack of merits for the summons, be it on condition (d) he said, or more on conditions (b) and (c) as he should have taken heed of in my view. But it must be made clear that there was no indication of such difficulty on the merits of the summons prior to defendant’s affirmation.

50.  And plaintiff, I agree, sensibly decided to withdraw to save further resources, and time, of both parties to argue on the merits of the summons. Should he press ahead with the summons no longer having merits, he should rather be penalized in costs.

51.  In all the circumstances of this summons, I do not think there is any winner or loser for it. Or, to put it another way, one cannot now tell who the winner or loser is.

52.  Of course, Plaintiff did notobtain the interlocutory injunction it sought in the summons, let alone written undertaking he demanded in lieu. And, from defendant’s perspective, the summons was withdrawn.

53.  But plaintiff was, I think, justified in taking out the summons. Defendant admitted at para 6 of defence that he had distributed the leaflets to around 300 people who were mostly residents of Sheung Tak Estate. He had also admittedly uploaded leaflet A to defendant’s FB posts in June 2016.

54.  And plaintiff had, I think, reasonable grounds to get an interlocutory injunction from the issue of the summons up to filing of defendant’s affirmation.

55.  Such complaints of plaintiff’s conduct of the summons raised by defence, individually or cumulatively considered, I do not think there was any abuse of process as submitted.

56.  Defendant managed to have the summons withdrawn more for defence to the defamation claim, whose efficacy remains to be tested at trial after evidence is called.

57.  The summons was withdrawn, one should note, not for balance of convenience but for the merits of the defamation claim as reflected on conditions (a) to (d) above after defendant’s affirmation was reviewed.

58.  The outcome of trial involving further investigations of the merits of plaintiff’s claim of defamation and resolution of any necessary factual disputes should, I think, provide useful and reliable hindsight to the merits of the summons which could only be decided now on affidavit and not otherwise.

59.  Hence, it would in my view be fair and appropriate for the winner at the end of the trial to recover as well the costs of the summons.

60.  I do bear in mind there is a possibility that there be no trial for this action. But plaintiff’s claim stands to be provisionally struck out if he does not appear at case management conference or pre-trial review, and it will stand dismissed after expiry of 3 months thereafter with no application to restore: O.25 r.4, RDC. Even if the parties desire to settle, they would, I think,also take costs order of the summons into account in settling their settlement terms.

61.  At any rate, on the materials before me, I think trial remains a real possibility for this action.

62.  Everything considered and balancing one matter against another, I consider it most appropriate to tie the costs of the summons with the outcome of trial, as opposed to making an order of costs now in one party’s favour or otherwise.

63.  In this connection, a costs order similar to mine below was made in the defamation case of Chan Shui Shing Andrew, supra, when the application also failed because the defence of justification and fair comment not capable of being resolved on affidavit and required to be further investigated at trial: 380B-E.

Disposition

64.  Accordingly, save for costs of hearing before me, I order costs of and incidental to the summons, including costs of the call-over hearing, be costs in the cause.

65.  As plaintiff was successful on this argument of costs, I make an order nisi ordering defendant to pay plaintiff’s costs of the hearing before me, to be taxed if not agreed. If none applies by summons within 14 days hereof to vary the same, it shall become absolute.

66.  Finally, may I thank Mr Ng and Mr Chow for their valuable assistance.