HOI TIN TONG CO LTD v. CHOY KWOK KEUNG

HCA 1755/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1755 OF 2013

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D E C I S I O N

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THE APPLICATIONS

1.  This is D’s application by Summons filed on 29 March 2017 for:

(1)   a jury trial (the “Jury Trial Application”); or alternatively

(2)   spilt trials with the issue of liability tried by a judge with jury prior to and apart from the issue of quantum of damages (the “Spilt Trials Application”).

2.  D’s primary position is that the Jury Trial Application should be granted and it will not be necessary to consider the Split Trials Application, which is only an alternative if the Jury Trial Application fails.

3.  D relies upon section 33A of the High Court Ordinance (“the Ordinance”) and Order 33, rules 4 and 5(1) of the Rules of the High Court (“RHC”).

Section 33A of High Court Ordinance and Order 33, rule 4 of RHC

4.  Section 33A of the Ordinance, so far as relevant to the present applications, provides:

“ (1) Where, on the application of any party to an action the Court of First Instance is satisfied that there is in issue—

(a) a claim in respect of libel, slander, malicious prosecution, false imprisonment or seduction; or

(b) any question or issue of a kind prescribed for the purposes of this paragraph by rules of court,

the action shall be tried with a jury, unless the Court is of the opinion that the trial requires any prolonged examination of documents or accounts or any scientific or local investigation which cannot conveniently be made with a jury.

(2) An application under subsection (1) must be made not later than such time before the trial as may be prescribed by rules of court.

(3) An action to be tried in the Court of First Instance which does not by virtue of subsection (1) fall to be tried with a jury shall be tried without a jury unless the Court in its discretion orders it to be tried with a jury.

(4) Nothing in subsections (1) to (3) shall affect the power of the Court to order, in accordance with rules of court, that different questions of fact arising in any action be tried by different modes of trial; and where any such order is made, subsection (1) shall have effect only as respects questions relating to any such claim, question or issue as is mentioned in that subsection.”

5.  Order 33, RHC provides for the mode of the trial and the time within which the application for a jury trial must be made, that is to say, the application must be made before the place and mode of trial is fixed.  Since this issue is not in dispute, it is unnecessary to set out the details of the statutory provisions.

6.  The applications are contested.  The parties are legally represented.[1]

FACTUAL BACKGROUND

7.  The factual background is not in dispute.  I shall take it from D’s written submissions as set out below.

8.  From 1 September 2004 to 15 June 2013, Mr. Ng (i.e. a shareholder and director of P) and D were partners who jointly owned and operated the PRC Hoi Ting Tong Stores in Mainland China.[2]

9.  P alleges that on or about 12 September 2013, D conspired with a Madam Lam to stage a demonstration of cleaning and processing mouldy Turtle Jelly for the same to be recorded as a video clip.[3]  P also alleges that D published or caused to be published the video clip entitled “直擊海天堂洗膏水喉水沖霉嘴都O”, through Apple Daily Limited on the Youtube website (the “Video Clip”).[4]

10.  P further alleges that D, through the newspaper as a medium, published or caused to be published various defamatory remarks regarding P’s practice of cleaning and processing mouldy Turtle Jelly and/or the quality of its Turtle Jelly products, as contained in three newspaper articles at (i) page A2 of the 12 September 2013 issue of Apple Daily newspaper, (ii) page A2 of the 12 September 2013 issue of the Sun newspaper and (iii) page A1 of the 12 September 2013 issue of Oriental Daily newspaper (the “Newspaper Articles”).[5]

11.  It is P’s case that the practice of cleaning and processing mouldy Turtle Jelly and/or the quality of its Turtle Jelly products as described in the Newspaper Articles and the Video Clip was false and defamatory of P.  By publishing or causing the publication of the Video Clip and the defamatory remarks contained in the Newspaper Articles, P alleges that it had suffered loss of reputation and profits to be assessed, and thus: -

(1)   D had conspired with Madam Lam to injure P with the predominant purpose of causing damage to P’s business goodwill and reputation[6];

(2)   D had unlawfully interfered with the economic interest of P.[7]

THE PARTIES’ CASES

12.  P commenced the present action to claim damages and injunctive relief for:

(1)   libel;

(2)   malicious falsehood;

(3)   tort of conspiracy to injure; and/or

(4)   tort of unlawful interference with economic interest.[8]

13.  D’s case is that he did not conspire with Madam Lam to stage the demonstration of P’s practice of cleaning and processing mouldy Turtle Jelly as contained in the Video Clip.[9]  D also disputes his involvement in the publication of the Newspaper Articles.[10]

14.  If and insofar as D was said to have published any defamatory remarks or statements regarding P’s practice of cleaning and processing mouldy Turtle Jelly and/or the quality of P’s Turtle Jelly, whether as contained in the Video Clips or the Newspaper Articles, D also relies on the defence of justification and fair comment.[11]  Accordingly, D’s case is that there was no malicious falsehood on his part and he did not unlawfully interfere with P’s economic interest.[12]

15.  The main issues to be resolved at trial are:

(1)   Whether D conspired with Madam Lam to stage a demonstration of P’s practice of cleaning and processing mouldy Turtle Jelly as contained in the Video Clip and whether such conspiracy was carried out with the predominant purpose of causing damage to P;

(2)   Whether the representations or remarks or statements as contained in the Video Clip and the Newspaper Articles were published by D;

(3)   Whether the representations or remarks or statements as contained in the Video Clip and the Newspaper Articles were defamatory of P;

(4)   Whether D could rely on the defence of justification and/or fair comment;

(5)   Whether D unlawfully interfered with P’s economic interest; and

(6)   Whether P is entitled to the relief claimed including general and special damages.

THE RELEVANT LEGAL PRINCIPLES

16.  There is no dispute between the parties that whether to order a trial by jury is a judicial discretion of this Court, recognizing D’s statutory right of a jury trial under section 33A of the Ordinance and applying the proviso in the same section.

17.  I shall set out the legal principles in the exercise of judicial discretion for the applications here:

(1)   “The exercise of the court’s discretion in any given case depends on a number of factors.  Of course, the court must first identify exactly the ambit of the order sought before considering what are the relevant factors going towards the exercise of discretion.  No exhaustive list of factors can be enumerated but I would suggest the following will regularly feature: the individual prejudice to the parties in the event an order is or is not made, the stage that the action has reached when the application is made, … ….  What weight the court will give to any particular factor will depend on the precise form of the order or orders sought.

Ultimately, the discretion is exercised bearing in mind the object … …, and, as with any exercise of discretion by the court, orders should only be made where necessary, just and convenient.”

See paragraphs 15 (5) & (6) of Wing Mou Construction Co. Ltd (in liquidation) v Cosmic Insurance Corporation Ltd & Another (unreported, HCCT 40/2001 Ma J. (as he then was) 20 June 2002)

(2)   I had, in my previous Decision Lam Sai Wan v Minloy Ltd (unreported, HCA 31/2014, 18 October 2017 §11), set out the principles that I would adopt to exercise my judicial discretion:

(a)   O.1A, r.2(2): In giving effect to the underlying objectives of these rules, the Court shall always recognize that the primary aim in exercising the powers of the Court is to secure the just resolution of disputes in accordance with the substantive rights of the parties;

(b)   the Court’s duty to prevent abuse in order to secure fair administration of justice for the parties;

(c)   the Court is guided by the authorities of higher courts.

(3)   Order 1A, r. 1 of the Rules of the High Court:

The underlying objectives of these rules are:

(a)   to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court;

(b)   to ensure that a case is dealt with as expeditiously as is reasonably practicable;

(c)   to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings;

(d)   to ensure fairness between the parties;

(e)   to facilitate the settlement of disputes; and

(f)   to ensure that the resources of the Court are distributed fairly.

DISCUSSION

D’s argument

18.  D’s argument in favour of a jury trial in accordance with section 33A of the Ordinance is that once the first two criteria of libel and the application being made within time, D’s right to a jury trial is established under section 33A unless the court is of the opinion that the trial requires any prolonged examination of documents or accounts or any scientific or local investigation which cannot conveniently be made with a jury.  The existence of other claims in the same action falling outside section 33A(1)(a) or (b) of the Ordinance does not take away the right to trial by jury, relying upon Martnok Thanradee v. Commissioner of Police & Anor. (unreported, HCA 789/2011, 24 January 2014 at §§20 & 22).  D emphasizes strict compliance with the proviso of section 33A of the Ordinance.

19.  D further submits that all the other claims should be ordered to be tried by jury at the same time as Deputy Judge K. Yee had, in his decision on the third-party discovery, held that the Video Clip is the subject matter of P’s claim based on the tort of conspiracy to injure, unlawful interference with its economic interests, malicious falsehood and defamation i.e. all of the identified causes of action.  In addition to the overlap on the issue of liability in respect of the identified causes of action or claims, there is also an overlap of issues regarding the assessment of damages claimed in the Statement of Claim.[13]

20.  D summaries the reasons for all the issues to be tried by a jury as follows:

(1)   there is an automatic right to a trial by jury in respect of the libel claim;

(2)   all the claims arise from the common facts and with an overlap of issues regarding liability and assessment of damages;

(3)   it is against the interest of all parties to have the remaining claims of conspiracy to injure, malicious falsehood and unlawful interference with economic interest to be severed from the libel claim;

(4)   multiplicity of proceedings relating to the same matter should be avoided.

See: Alexander v. Halley [2006] 40 C.P.C (6th) 343.[14]

21.  D further argues that the minutes of the board meetings, the audited accounts and the sales records are not so complicated as beyond the understanding of the jurors, though they would extend the time for the hearing.  D therefore submits that the mere fact that there are some audited accounts and Sales/Expenditure Records is simply not a ground in itself to deny D's choice of a jury trial.  In particular, they do not appear to be so difficult or complex as to be beyond the ready comprehension of the jurors or would require prolonged examination of the evidence which cannot be conveniently made with a jury.  Whilst the costs and the length of trial may be increased, it is far from a case of substantial prolongation of the trial with significantly increased expenses because of the number and complexity of the documents.

22.  Pausing here, D is now proposing to have the whole case, including all the claims and the assessment of damages to be tried before a jury.  The trial judge has to direct the jury on the admissibility and evaluation of evidence in respect of all the claims and on the assessment of damages.

P’s argument

23.  P argues that the Court should not order a jury trial for this matter.

24.  The first ground in opposition is that the matter cannot be tried conveniently with a jury, relying upon the authority of Dr Esthetic Product Research & Production Centre Ltd v Next Magazine Publishing Ltd (unreported, HCA 2776/2006 (unrep., 21 August 2009 at §§14):

“The question of convenience as provided in the proviso of section 33A(1) concerns with the efficient administration of justice rather than the probable difficulty of the issues involved.  “Convenient” in this context has been said to mean without substantial difficulty in comparison with carrying out the same process with a judge alone:  Beta Construction v Channel Four [1990] 1 WLR 1042 (CA) at 1047F-H, citing Goldsmith v Pressdram Ltd (Note) {1988] 1 WLR 64, and Viscount De L’Isle v Times Newspaper Ltd [1988] 1 WLR 49.”

25.  Relying upon Stuart-Smith, LJ in Beta, P argues that convenience will be hindered by large number of documents in the jury box, trial will be longer because of the number and complexity of documents, increased costs and the risk that the jurors may not understand the accounts and commercial documents.

26.  Chung J. in International Social Service (Hong Kong Branch) v Vision First Ltd. (unreported, HCA 683/2014, 16 February 2017) said that the “modern” emphasis is against trial with juries [18(1)].  He set out the factors against jury trial in §18, which are similar to those set out above and the factors favouring jury trial, which are these:

(1)   Prominent figures in public life;

(2)   Questions of national interest;

(3)   Action involving issues of credibility and a party’s honour and integrity are under attack; and

(4)   The wish of one or more of the parties to have a trial jury.

In the UK, since the introduction of the CPR, the predisposition against jury trial has become more apparent. [19]

27.  P has pointed out the minutes of internal management documents, the audio and video clips with transcripts, the audited financial statements and the monthly sales and expenditure records, all of which may not be easy for the jurors to understand. They do not have the advantage of reading the materials before or after the hearing whereas the judge has.  They may not be able to raise questions to counsel during the trial when they have difficulty in understanding the materials whereas a judge may do so.  With all those disadvantages, they have to make a finding of the facts in their verdict, for which they are not obliged to give reasons.  This is the risk in the administration of justice.  On the other hand, a judge has to give reasons for his verdict.

28.  A jury trial forfeits the benefit of adopting all the witness statements in evidence in chief, which will certainly increase the length of the trial, adding costs to litigation.  In my view, this is applicable to all jury trials, which should not be taken as a determining factor against jury trials.  All depends on proportionality of this factor against other factors in favour of jury trials.

29.  P emphasizes on the demarcation of the role between judge and jury, which may pose difficulties where questions of mixed fact and law are involved, given the practice of civil trials of requiring a jury to return a special verdict consisting of answers to a series of questions, relying upon Martnok at §§31 and 61.  I have the same comments that I set out in §28 above to this point as all jury trials have this common feature.

30.  However, for this matter, there is a mixture of claims, i.e. libel which the law requires jury trial and other claims such as conspiracy to injure and unlawful interference with economic interest, which do not require a jury trial.  It will be difficult, or not convenient, so to speak, for the trial judge to direct the jury on the evidence on the mixed claims.  The length of trial, will no doubt be increased substantially if there is dispute as to the admissibility of the evidence during the trial.

The exercise of the discretion

31.  I shall now apply the legal principles to the arguments.

32.  I agree that section 33A of the Ordinance gives D the right to apply for a jury trial in accordance with this section and O.33, r.4 RHC.  There is no dispute that this application is made before setting down of the action.  The question for me is the provisos under section 33A of the Ordinance.  Simply put, this section provides that D has the right of making an application for a jury trial subject to the Court’s discretion with reference to whether the trial will involve prolonged examination of documents or accounts or scientific or local investigation and the examination cannot conveniently be done with a jury.

33.  I also agree that other claims in this action, per se, will not take away D’s right to apply for a jury trial under section 33A of the Ordinance.  However, this factor will certainly be taken into consideration when the court comes to consider the provisos under section 33A, in particular as respects its opinion on convenience of the trial by a jury.  The fact that a jury trial is different from a trial by a single judge as respects the way the trial is conducted by the judge giving directions to the jury on the admissibility of the evidence, which involves the law and the fact; the disadvantages of the jury not being able to ask questions during the trial and not being able to read the documents or the transcripts before or after the trial, all of which will lengthen the trial, causing extra costs and time as compared with a trial by a single judge, must be weighed in the balance against the factors in favour of a jury trial in this particular case.  This is, as what Ma J. (as he then was) in Wing Mou Construction, said: : “… …the court must first identify exactly the ambit of the order sought before considering what are the relevant factors going towards the exercise of discretion.  No exhaustive list of factors can be enumerated.” It boils down to the test of proportionality of weighing all the relevant factors.  After all, section 33A of the Ordinance remains on our statute, which must be given effect for appropriate cases.

34.  Applying the legal principles to this case, it is obvious that the balance tips against a jury trial.  I consider that P’s submissions are relevant for the consideration of this matter.  The fact that D is asking for a jury trial on a matter with mixed claims where two claims are outside the ambit of section 33A of the Ordinance is obviously inconvenient to the trial judge, who will have difficulty in treating the evidence and the law for the direction to the jury.  There are documents involving company minutes, sales records, audited financial accounts and video transcripts, all related to all the claims in this matter.  It can be anticipated that parties may have arguments on the admissibility of evidence for the mixed claims for the jurors.  It will take much time for the trial judge to make decision on identifying or even severing the facts and law in respect of those claims which are for the jury trial and those which are not.  All these will, no doubt, lengthen the trial and costing more costs.  It will also render difficulty in assessing the length of the trial, the overrunning of which will also affect the court’s diaries and other cases waiting on the list.  All of these factors are against a jury trial.

35.  On the other hand, P submits that D has not been able to say what prejudice he may suffer if the trial is conducted by a judge alone.  Although it can be argued that D is not obliged to do so under section 33A of the Ordinance, it is certainly a factor that this Court will have to take into account for the exercise of its discretion as guided by Wing Mou Construction “: the individual prejudice to the parties in the event an order is or is not made”.  See §17(1) above.

36.  This morning, I have the advantage of the assistance of counsel on the documents before me.  In Bundle 3, there are over 15 pages of accounts of P’s business with small prints.  The items, from a rough estimate, are over thousands.  I enquire from the parties if these accounts have to be referred to at the trial.  D says that they were just put in by P shortly before this application.  There is no idea whether they would be referred to at the trial. One must take the precaution that they are relevant documents, at least for the assessment of damages.  These accounts will certainly satisfy the proviso in section 33A of the Ordinance.  They are not suitable for a jury trial.

CONCLUSION

37.  For the reasons above, I decline to accede to D’s request for a jury trial for this matter for the liability.

38.  As to D’s fallback position of having a jury trial for liability and a single judge trial for the assessment of damages, since I have declined D’s request for a jury trial for the liability, the fallback position cannot sustain.  D agrees that the assessment of damages should be tried by a judge alone.

39.  D’s application for a split trial is also dismissed.

COSTS AND ORDER

40.  As to costs, D agrees that the costs should follow the event, with counsel’s certificate.  The costs are assessed under O.62, r.9A RHC at $145,000, to be paid by D to P within 14 days from the date of this Order.

41.  This Court shall now make an order in terms as follows:

(1)   D’s applications are dismissed;

(2)   Costs of this application, including the costs for the hearing today be as per paragraph 40 above.