CHANG WA SHAN v. ESTHER CHAN PUI KWAN also known as CHAN PUI CHUN

HCA 1855/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1855 OF 2010

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J U D G M E N T

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1. This is an appeal by way of re‑hearing against a decision made by Mr Registrar K W Lung on 26 November 2013.  The registrar has given a written reasoned judgment for his decision.

2. The application made to the registrar was to amend a defence in a defamation action by adding 20 paragraphs.  19 of the proposed amendments were allowed. Paragraph 10 was refused.

3. The background facts were helpfully set out in the registrar’s decision as follows:

“4. This action arises out of the probate trial of the estate of the late Nina Wang. On day 9 of the trial of the Nina Wang probate action on 21 May 2009, Mr Ian Mill QC, leading counsel for Tony Chan Chun Chuen, produced a document to the court (‘Document), namely an investment proposal for the development of a piece of land in Tai Po into a cinerarium purchased from the Chinachem Group. The Document was produced to attack the independence and credibility of one of the witnesses called to testify for Chinachem in the action, Mr Gilbert Leung.

5. The trial judge then asked Mr Mill QC to explain the provenance of the Document, and he replied: ‘The individual who provided it to us is a Mr Edmund Tsang. He says he was given that by Mr Gilbert Leung.’

6. ‘Edmund Tsang’ is the plaintiff’s name commonly known and referred to in the securities industry.

7. The plaintiff says that the statement by Mr Mill QC to the court is not true. The plaintiff alleges that he did not supply the Document to Tony Chan or his lawyers or anyone. He says that he had never seen or had the Document in his possession and he had never discussed its contents with Gilbert Leung.

8. Through a Norwich Pharmacal application by the plaintiff against Tony Chan, the defendant was revealed as the person who gave the Document to Tony Chan’s legal team before cross-examination of Gilbert Leung and told them that the Document was from the plaintiff.

9. Hence, this action against the defendant.

10. There is no dispute that the name ‘Edmund Tsang’ was published by the defendant in answer to a specific question asked by Mr Midgley, in his capacity as Tony Chan’s solicitor, in contemplation of queries being raised by the trial judge, Mr Justice Johnson Lam, and/or to assist the Court in testing the evidence of Gilbert Leung.

11. The defendant also admits that the statement made by Mr. Mill QC was not true and that the plaintiff had not supplied the Document to Tony Chan or his lawyers.

THE DEFENCE

12. According to Mr Chang, the defendant’s original defence is two-fold. First, she denied having been asked by Tony Chan’s lawyer (in particular Mr Jonathan Midgley of Messrs Haldanes) where she got the Document from, and she claimed Mr Midgley only asked her to whom Gilbert Leung had submitted the investment proposal, and she gave the plaintiff’s name which was what she herself had been told (see para 9(c) of the Defence)). Second, she relied on the defence of absolute privilege (para 11 of Defence). The defendant now, by amendment to the Defence, proposes to add alternative defence of qualified privilege and put forth her positive case of ‘Lucas-Box Meaning’”.

4. The amendments which were refused in the proposed paras 10A‑C were as follows:

“10A. Alternatively, by way of innuendo, the Words meant, should be and/or were understood to mean that Gilbert Leung submitted the investment proposal in the Document to the Plaintiff for the Plaintiff’s consideration (‘the Lucas‑Box Meaning’):-

Particulars of Justification

(a) Esther Chan repeats paragraphs 1 to 10B hereinabove.

(b) The Plaintiff admitted in his letter to the Law Society of Hong Kong dated 30 August 2010 (as was and still is the truth) that he had known Gilbert Leung since around 1985-1986, they ‘formed a business relationship’, and he had made investment in property development project(s) in Hong Kong through Gilbert Leung. At least two business proposals were made by Gilbert Leung to the Plaintiff: one concerned the development of a cinerarium; the other concerned purchasing a plot of land in Tai Po from the Chinachem Group at a price of about HK$1 million.

Particulars of Innuendo

Esther Chan repeats paragraphs 1 to 10, and in particular paragraph 9, hereinabove.

10B. The Lucas‑Box Meaning was not defamatory of the Plaintiff.

10C.   Alternatively, if the Lucas‑Box Meaning was defamatory of the Plaintiff, which is denied, it was true in substance and in fact.”

5. The reason for the plaintiff’s objection is the fact that the proposed amendment relates solely to the defendant’s version of the facts.  In a nutshell, the disputed facts are:

(a)  The plaintiff’s case is that she was asked where she got the Document from, answering ‘Edmund Tsang’.

(b)  The defendant’s case is that she was asked whom Gilbert Leung had submitted the investment proposal to, and she said ‘Edmund Tsang’.

6. The plaintiff submits that if the defendant’s version is preferred at trial then the plaintiff’s claim will fail.  The plaintiff accepts that there is no basis, in this case, for a claim in defamation based on the defendant’s version of the facts.  Therefore para 10 is irrelevant.

7. The registrar stated that the plea of justification must relate to the words complained of and the defendant must show that the defamatory imputation conveyed by those words is true.  He cited Mak Shiu Tong v Yue Kwok Ying (2004) 7 HKCFAR 228 in support:

“18. A plea of justification must relate to the words which are complained of. A defendant who relies on the defence must show that the defamatory imputation conveyed by those words is true.

19. Accordingly, in advancing a plea of justification, the defendant necessarily takes a view as to the meaning of the words complained of. His case is that the words so understood are true ……

20.  As noted above, the plaintiff in his statement of claim has set out the pleaded meanings said to represent the natural and ordinary meaning of the words in question.  In doing so, he was following a practice which (as Ackner LJ pointed out in Lucas-Box v News Group Newspapers Ltd [1986] 1 WLR 147 at 151) has been settled since Lewis v Daily Telegraph Ltd [1964] AC 234.”

8. Mr Kenneth Lam, counsel for the defendant both before the registrar and on appeal, submits that for two reasons the amendment should be allowed.  I summarise the two reasons as:

(a)  out of an excess of caution; and

(b)  to make sense of the pleadings.

(a)  Out of an excess of caution

9. Mr Lam submits that the “Lucas Box Meaning” in relation to the defendant’s version of the facts should be pleaded to cater for the possibility that the judge finds in favour of the defendant’s version but nonetheless also finds it to contain a defamatory innuendo.  He argues that this is a possibility even though the plaintiff’s claim is based solely on his own version of the facts and the plaintiff further accepts that if the judge did find for the defendant on the facts there could be no finding of defamation arising therefrom.  Mr Lam submits that it is open to a judge to find for a plaintiff on a factual scenario which is specifically not relied on by a plaintiff but is relied on by a defendant.

10. Mr Lam cites in support the case of Poon Hau Kei v Hsin Chong Construction Co Ltd (2004) 7 HKCFAR 148.  That case was a personal injuries case.  The judge found for the plaintiff based on the version of the accident advanced by the defendant, having rejected the plaintiff’s version.

11. In my judgment the case cited does not assist Mr Lam. It is a personal injuries case decided on its own facts which does not in my judgment establish the broad legal principle applicable to the law of defamation as contended for by Mr Lam.

12. In the present case the defendant’s version of events is a complete defence and, in effect, acknowledged as such by the plaintiff.  To reinforce this position Mr Jonathan Chang, counsel for the plaintiff, observes that since the filing of the Defence no Reply has been filed and no alternative case has been pleaded.  The plaintiff is bound by his pleadings which are clear and specific.

13. In my judgment, it is fanciful to think that a trial judge would (a) look for and (b) find any defamatory innuendo in a scenario specifically rejected by the plaintiff both as to fact and law.

14. It is of course open to the defendant to plead her factual version of the conversation, and she has done so.  But it is only necessary to plead justification in relation to the plaintiff’s claim.  It is simply stated in Gatley on Libel & Slander (12^th edn), para 27.10:

“Justifying an innuendo meaning. Where the claimant relies on a true legal innuendo, he sets out a separate cause of action. It is submitted that a defendant wishing to meet this separate cause of action with a plea of justification must confine himself to the legal innuendo meaning contended for by the claimant. The reason for this is that, in such a case, the claimant’s complaint is peculiarly tied to the extended meaning which he seeks to place on the words ‘created by a conjunction of the words with something outside them’. The claimant’s case depends on his being able to establish precisely this extended meaning and the defendant who seeks to justify some other meaning will not meet the claimant’s case.”

15. Unlike in a personal injuries claim the plaintiff nails his colours the mast and relies solely on what he alleges was said.  There is no room for confusion between the two versions.  The effect of the pleadings in this case is that the plaintiff is clearly informing the court that if his version is rejected there is no cause of action.  This is the key distinction between the present case and Poon Hau Kei.

16. In short, I agree that a pleading justifying the defendant’s version of the facts, not relied on by the plaintiff, is irrelevant and unnecessary.

(b)  To make sense of the pleadings

17. Mr Lam advances a “fall back” submission.  He rightly points out that in the amendments that were allowed by the registrar, para 8A(d) refers to “the Lucas Box meaning (as hereinafter referred to) to be true”.  However, the part which is “hereinafter referred to” is contained in paras 10A‑C, which were disallowed.  I agree that this unfortunate consequence should be cured.

18. The “fall back” position proposed by Mr Lam is as follows.  The “Lucas‑Box” reference is deleted from para 8A(d) thus:

“8A(d) Esther Chan published the Words to Mr Midgley (and/or Mr Mill) in the circumstances pleaded hereinbelow, genuinely and honestly believing the Words and the Defendant’s Meaning (as hereinafter referred to) to be true.”

and a shortened para 10A be added thus:

“10A. The Defendant’s Meaning as pleaded above is that Gilbert Leung submitted the investment proposal in the Document to the Plaintiff for the Plaintiff’s consideration (‘the Defendant’s Meaning’).”

19. Mr Chang, on the other hand, merely suggests that the words “and the Lucas Box meaning (as hereinafter referred to)” be deleted.

20. Mr Lam submits that Mr Chang’s proposal does not work because “the words” in question are merely the two words “Edmund Tsang” and thus it would still not make sense.  I do not share Mr Lam’s concern.  “The words” in this case are always going to be considered, as a matter of common sense, in context.  Taken in context Mr Chang’s proposal will make sense.

21. Mr Lam’s proposal, on the other hand, reintroduces the issue of the “meaning” of the defendant’s version of the facts which I have determined to be irrelevant.

22. In all the circumstances I dismiss this appeal.  I further direct that para 8A(d) be further amended in accordance with the plaintiff’s proposal.

23. I make a costs order nisi on the appeal in the plaintiff’s favour and further accede to the plaintiff’s application for a summary assessment which I grant in the sum of $50,000.