JIGME TSEWANG ATHOUP ALSO KNOWN AS JIGME RINPOCHE v. BRIGHTEC LTD AND OTHERS

HCA 1693/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1693 OF 2011

_____________

__________________________

REASONS FOR DECISION

__________________________

1.  This is an application by the 1^st and 2^nd defendants for security for costs. In the hearing on 20 August 2014, I refused the application and I now give my reasons.

Background

2.  This is a defamation action relating to an article (“the Article”) published in the June 2011 issue of “The Front-Line Magazine (前哨雜誌)” (“the Magazine”).

3.  It is the plaintiff’s case that he is a well-known leading practitioner of the Karma Kagyu lineage of Tibetan Buddhism.  Karma Kagyu is a major school of Tibetan Buddhism, and the plaintiff claims that he is a highly respected master, teacher and author of Karma Kagyu and he has many followers both in Hong Kong and around the world.

4.  The 1^st defendant is the proprietor, publisher and printer of the Magazine.

5.  The 2^nd defendant is and was at all material times the editor-in-chief of the Magazine.

6.  Default judgment was entered against the 3^rd defendant on 18 November 2011.  The present application only concerns the plaintiff and the 1^st and 2^nd defendants.

7.  The plaintiff claims that the Article contained words which were defamatory of the plaintiff.  To oppose the plaintiff’s claim, the 1^st and 2^nd defendants deny that the words were defamatory. They also rely on the defence of qualified privilege, Reynolds privilege or public interest defence and/or defence of reportage.

8.  This action was commenced by the plaintiff on 7 October 2011.  On 13 November 2013, Mr Registrar Lung granted leave for this action to be set down for trial.  On 16 December 2013, the plaintiff applied for the case to be set down.  On 4 February 2014, the court fixed the PTR date on 20 August 2014 and the trial date on 25 November 2014 with 4 days reserved. The 1^st and 2^nd defendants took out the present summons for security for costs on 20 May 2014.  They ask for security in the amount of $1,452,800.

Merits of the security for costs application

9.  I refuse the application on the ground of delay alone.

10.  Before the application for leave to set down for trial, the solicitors for the 1^st and 2^nd defendants filed the 2^nd listing questionnaire dated 4 November 2013, confirming that there was no outstanding interlocutory application and they did not intend to take out any other interlocutory applications.  It was upon such confirmation that Mr Registrar Lung granted leave for this action to be set down for trial on 13 November 2013.

11.  After the implementation of the CJR, the courts have repeatedly emphasised that late applications should be avoided, and the court expects the case to be ready when the case is set down for trial.

12.  Delay is always a ground for refusing an application for security for costs.  In Anbest Electronic Ltd v CGU International Insurance plc (formerly General Accident Insurance Asia Ltd), unreported, HCCL 82/2000 (judgment of Stone J on 22 December 2006), the court noted that it was only when the plaintiff wished to set down the case for trial that the defendant applied for security for costs, and that the matters prayed in aid by the defendant in support of its application were not new revelations but were likely to have been known for a considerable period if not from the outset.  Stone J stated that in light of those matters, even if the defendant had succeeded in discharging its burden in obtaining security for costs (which it had not), the court would still deny the application on the ground of delay alone.

13.  I myself also refused a security for costs application on the ground of delay alone in Waddington Ltd v Chan Chun Hoo Thomas & Ors, unreported, HCA 3291/2003, reasons for decisions of Lok DHCJ handed down on 7 may 2013).  The application was taken out 5 days before the PTR.  In dismissing the application, I said the following:

“33. After the implementation of the civil justice reform, the courts have repeatedly emphasised that late applications should be discouraged as such kind of applications can easily disrupt the trial dates which are milestone dates. Further, Practice Direction 5.2 (at §34) has expressly provided that the PTR is not an extension of the CMC. The court expects a case to be ready for trial at the PTR and late interlocutory applications may be dismissed on the basis of delay alone. This would have been sufficient for me to dismiss the Security for Costs Summons.

34. Further, late application for security for costs, in particular when the trial is imminent, per se constitutes very real prejudice to a plaintiff, since the plaintiff is being put in a position of having little or no choice but to put up the security in order not to abandon and waste all the work done and costs incurred in preparing for trial. In these circumstances, the application should be refused (see: BBMB Finance (Hong Kong) Ltd v China Underwriters Life and General Insurance Co Ltd [1991] 1 HKLR 617, 626-628 (per Fuad VP); Tsang Yee Mui v Personal Representatives of Mak Chik Wing, deceased, unreported, HCA 2606/2006 (decision on 21 July 2008 at §§34-38 (per Chu J, as she then was)).

35. … … … Instead, the 1^st defendant confirmed, in his 2^nd Listing Questionnaire, that he agreed not to take out any further interlocutory applications save for those which ought to be made to the listing judge or master.

36. It was only shortly before the PTR that the 1^st defendant issued the Security for Costs Summons. The explanation purportedly given for the delay was that the 1^st defendant was apparently uncertain as to whether the plaintiff would proceed to trial. This is neither a credible nor sufficient explanation for the very substantial delay. Further, substantial costs had already been incurred by the parties in the conduct of this action. If the 1^st defendant is genuinely seeking to ask the plaintiff to provide security to cover his costs, one would expect the 1^st defendant to have made such application at a much earlier time. By reason of the substantial delay, I have reason to believe that the application is only a tactical move by the 1^st defendant to put undue pressure on the plaintiff to raise substantial fund in the limited time before the trial.

37. Based on these strong reasons, I dismissed the Security for Costs Summons with costs.”

14.  These dicta are also applicable here. Although the security for costs application was taken out 3 months before the PTR date as opposed to 5 days in Waddington Ltd, the 1^st and 2^nd defendants, through their solicitors, had confirmed in the listing questionnaire dated 4 November 2013 that they did not intend to take out any further interlocutory applications.  Further, the trial will, as from the date of the hearing, commence in about 3 months’ time.  The delay in the making of such application will constitute a very real prejudice to the plaintiff as he has to raise substantial fund in the limited time before the trial.

15.  With a view to justify the delay, the 1^st and 2^nd defendants claim that they had been misled by the Hong Kong address stated by the plaintiff in his witness statement dated 5 December 2012, which they later found out to be the address of a Buddhist centre that the plaintiff by that time attached to.  According to them, such address had misled them to believe that it was the plaintiff’s place of residence in Hong Kong.

16.  Such explanation simply defies common sense. Judging from the background of the present case, the background of the plaintiff and his name, it should have been clear from the outset that the plaintiff is not a local resident and that he would not have substantial assets in Hong Kong.  At least, the above factors should have led the 1^st and 2^nd defendants to start the chain of inquires much earlier in order to ascertain whether the plaintiff is or was a local resident.  In particular, the 1^st and 2^nd defendants are in the publication business.  I do not believe that they would have been so naïve in taking the Hong Kong address of the plaintiff on face value as his place of residence.

17.  For the above reasons, I do not accept that the 1^st and 2^nd defendants have provided the court with a credible explanation to justify the delay in making the security for costs application, and delay alone is already a sufficient reason for the court to exercise the discretion in denying such application.

18.  There is also another reason as to why the court should focus on the ground of delay alone.  It is trite law that, in deciding whether to order security for costs against a plaintiff, one of the major considerations is the likelihood of the plaintiff succeeding.  In exercising its discretion, the court may therefore take into account the merits of the plaintiff’s claim.

19.  The problem here is that I am the trial judge assigned to hear this case.  Obviously, it is highly undesirable for me as the trial judge to assess the merits of the plaintiff’s claim shortly before the commencement of the trial.  As the parties have filed all the evidence in support of their respective cases, I may be accused of pre-judging the case if I were to express any view on the merits of the claim at such a late stage of the proceedings.  Hence, I refuse to consider the merits of the plaintiff’s claim and I simply dismiss the application on the ground of delay alone.

20.  Based on the above reasons, I refuse the application for security for costs.