ATTORNEY GENERAL v. SOUTH CHINA MORNING POST PUBLISHERS LTD. AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

-----------------

------------------

----------------

JUDGMENT

----------------

Mayo, J.

The applicant wrote to the 1st respondent on the 7th November 1990 complaining about the contents of various articles written by them. It was alleged that they constituted contempt of court. In this letter an invitation was extended to the 1st respondent to provide an explanation and place before the applicant any mitigating circumstances within 14 days.

2. The 1st respondent responded to the invitation within the time limit prescribed. There was a meeting in the Attorney General's Chambers when Mr Rose, a partner in the solicitors representing the respondents, produced leading counsel's opinion from which it was evident that the respondents did not accept the correctness of the view taken of the articles by the applicant. Mr Rose also wrote a letter to the applicant which summarised the conclusions reached by counsel and made it abundantly clear that any contempt proceedings would be strenuously resisted.

3. Notwithstanding this, the applicant applied to Saied J. for leave to commence these proceedings and this leave was granted

4. Mr Marshall, for the applicant, informed us that the Attorney General had decided at a meeting held on the 22nd November 1991 that the interests of justice would be best served if a compromise could be agreed with the respondents. Discussions took place with representatives for the respondents and it was agreed that the applicant would not oppose the dismissal of these proceedings if the respondent agreed to a statement being read out in open court in this form: -

5. It will be noted from this statement that the issue of costs remained outstanding and submissions have been made to us by both counsel on this subject.

6. We must say immediately that the court finds itself in a slightly difficult position.

7. I say this because the consequence of the parties having reached an agreement which we were prepared in effect to sanction is that we have not had the advantage of hearing reasoned arguments in support of the positions taken by both parties.

8. Mr Lester, for the respondents, has invited us to write a reasoned judgment. Initially we were sympathetically disposed towards this idea. On reflection, we have come to the conclusion that having regard to the very important issues which have been raised, it would be wrong and precipitate for us to come to any settled conclusions without having the advantage of detailed arguments and submissions by both sides. Inevitably the submissions which were addressed to us in open court almost exclusively were advanced in support of the contentions advanced relating to costs.

9. Mr Marshall contended that each side should bear its own costs whereas Mr Lester argued that the respondents should receive their costs on an indemnity basis.

10. One of the arguments advanced by Mr Lester was that having. regard to the provisions contained in Article 16(2) & (3) and section 6 of the Bill of Rights Ordinance, the respondents should not be required to bear the costs of the difference between party and party costs and those ordered on an indemnity basis. We have considered this argument but would reject it. We see insufficient justification in the legislation for displacing the normal principles applicable to orders relating to costs. We propose adopting these principles.

11. The first question which has to be decided is whether any order for costs should be made.

12. As we have said we are in some difficulty by virtue of the fact that there has been no hearing on the merits of the case. There are, however, some circumstances which we do consider that we can take into account.

13. It is significant that since the first letter of complaint was sent in November 1990, there has not, according to Mr Marshall, been any substantial change in the situation between the parties. We do not know the reason for the change of heart by the applicant. Whatever the reason was, it does not seem to be possible that this, in any way, redounds to the discredit of the respondents. It is accordingly difficult to see why they should be visited with the consequences of having to pay all their own costs.

14. A further matter of considerable importance is that there is no admission of any sort at all contained in the statement which has been agreed to.  Indeed, reference is made to the continuation of the high degree of care which has hitherto been exercised by them in their publication. In such circumstances, it would be quite wrong to make any order for costs against them.

15. The only outstanding matter is the form of costs order which should be made in their favour. As we have said Mr Lester has submitted that the order should be for indemnity costs. We disagree. We think that the principles enunciated by Hunter, J.A. in Citibank N.A. v. Kung Kwok-wai, David (unreported), Civil Appeal 81/89 should be adopted. We see no reason to make an order against the applicant on an indemnity basis particularly as the issues in the litigation remain undetermined. This approach would also be in conformity with the approach adopted in the various cases cited to us by Mr Marshall. For the reasons given, I would order that the respondents receive their costs on a party and party basis.

Jones, J.

16. By an agreement reached at the eleventh hour between the parties we accepted, in the exercise of our discretion, a joint application to dismiss the Attorney General's motion for committal upon a statement being made on behalf of the respondents.

17. The only issue that remains for decision is the matter of costs.

18. The proceedings arise as a result of four articles published in the South China Morning Post which is published by the 1st respondent on the 18th, 21st October and the 5th November 1990. The 2nd respondent is the editor of the newspaper. The articles relate to George Tan and the Carrian Group and were published at the time of the Malaysian election that was held on the 21st October 1990. The thrust of the articles concern allegations of corruption by George Tan that are the subject matter of charges that he is facing in the High Court known as the BMFL charges, and in the District Court the WestLB Asia Limited and Barclays Asia Limited charges.

19. The Attorney General sought and obtained leave on the 29th November 1990 to institute committal proceedings in respect of the articles which, it is contended, amount to a contempt of court. It is alleged that these articles are highly prejudicial to George Tan with regard to his character and to the likely issues in the pending criminal trial and are calculated to interfere with the due and proper administration of justice.

20. The respondents have throughout denied that the articles amount to a contempt of court. Indeed, shortly after the Attorney General had written a letter on the 7th November 1990 to the respondents about the matter, informing them that he considered the articles amounted to a contempt of court, a meeting was held between the parties when the respondents' position was explained. However, the Attorney General decided to proceed with the result that after leave was obtained, the present motion was filed on the 19th December 1990.

21. After a preliminary discussion on the 18th November 1991, the Attorney General stated that if the respondents gave an undertaking that they would use their best endeavours to avoid any contempt in relation to the pending trial of George Tan and others, the motion would be withdrawn. However, the Attorney General was not prepared to agree to an order for costs.

22. After Mr Lester had read the statement on behalf of the respondents which is set out in the judgment of my brother Mayo, we considered that it was appropriate, in the exericse of our discretion as I have said, to dismiss the motion.

23. We were then addressed by counsel on the question of costs. Mr Lester submitted that it is appropriate to order costs to be paid on an indemnity basis whereas Mr Marshall, for the Attorney General, argued that there should be no order as to costs. In support of their submissions, both counsel have necessarily had to address us on various aspects that go to the merits of the case, and also upon the effect, if any, caused by the introduction of the Bill of Rights Ordinance.

24. Mr Lester contended that the launching and maintaining of the proceedings has resulted in a financial burden to the respondents in defending the proceedings that involves a breach, violation or threatened violation of Article 16(2) & (3) of the Bill of Rights Ordinance that in the circumstances justifies an order for costs on an indemnity basis. However, we do not consider that the Bill of Rights Ordinance can be interpreted in this manner so as to depart from the normal considerations that apply to an award of costs. Further, we decline to comment upon the issues of substantial risk or of serious prejudice and the defence of public interest that were raised in the submissions in the absence of full argument upon the merits. We have not received any information as to why the Attorney General changed his stance at the eleventh hour for Mr Marshall declined to enlighten us despite some prodding from the bench.

25. Mr Lester submits that by the Attorney General's change of stance, indemnity costs should be awarded as a mark of the court's disapproval to the institution of proceedings which have now been shown to be misconceived and futile with no reasonable prospect of success. On the other hand Mr Marshall has not abandoned his contention that the articles amount to a gross contempt of court, but that the steps were taken to avoid uncertainty by prolonging the present proceedings that would inevitably have led to appeals and to the fact that the respondents will derive an advantage from the motion being dismissed. Accordingly, he submits, in effect, that there was a quid pro quo by virtue of the respondents' statement that was read in court for both sides had something to gain and something to lose.

26. However, we are satisfied, by agreeing to the motion being dismissed, that the respondents are entitled to an order for costs, but we do no see any justification for` the order to be made on an indemnity basis in the absence of any evidence of malice, improper motive or any special or unusual circumstances. Accordingly, I agree that the costs of the respondents should be awarded on a party and party basis.