GRANDEE MODEL & CASTING CO LTD v. GREY ADVERTISING HONG KONG LTD

DCCJ 4760 of 2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL JURISDICTION

ACTION NO. 4760 OF 2011

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Decision

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INTRODUCTION

1.  There are 2 summonses before me, namely, the Plaintiff's summons dated 28^th March 2012 and the Defendant's summons dated 5^th April 2012.  Each party sought to strike out the other party’s pleadings on the ground that the form of the statement of truth used by each party was in breach of O.41A of the Rules of the District Court (RDC).  This is a battle of forms of the statement of truth.  The Parties are having different perception on the same set of rules leading to different perceived forms of statement of truth.  However, in the first hearing, I was not provided with helpful authorities and no proper research was conducted on the proper form.  Solicitors for the Defendant seemed to be unaware of the CJR Final Report which may contain a detailed analysis on the system of statement of truth.   I was only provided with peripheral research on such authorities as Interpretation of General Clauses Ordinance (Cap.1) or authorities about contempt of court.  In my view, once they realized that there is different perception on the same set of rules and when the provisions are said to be ambiguous, they should have gone to explore something like CJR Final Report or “the Hansard”.  The analysis in the CJR Final Report may be helpful to identify what should be the appropriate form of statement of truth in the case of a person of senior position giving the statement of truth for his or her corporation. 

2.  I regret to say that while the Parties exercised their right to argue on the point of law, they failed to abide by their duties to conduct appropriate research to support their legal proposition.  Further, this seems to be the first case litigants are having dispute on the form the statement of truth.  As a result, I adjourned the argument for the parties to conduct a more relevant research before I make a conclusion.  In the resumed hearing, the Defendant instructed counsel, Mr. Ng to take over the debate.  Shortly before the resumed hearing, I have the benefit of reading the submissions of both parties’ counsel and I shall come to that later.

BACKGROUND

3.  It was the Plaintiff who first took out the striking out application against the Defendant’s revised form of the statement of truth in respect of the Defence.  I noted that the statement of truth given by the staff of the Defendant now in dispute was not the original form.  The original form has been revised after the Plaintiff’s earlier complaint.  The Defendant’s original form of statement of truth is as follows:-

"I believe that the facts stated in this Defence are true."

4.  The above statement is followed by a signature under the company chop without descriptions of his full name.

5.  By way of correspondences, the Plaintiff’s solicitors pointed out to the Defendant that the original form was in breach of O.41A, r.3 and r.5 in the sense that the maker failed to state his position in the Defendant’s company in the statement of truth.  According to the Plaintiff, the maker should have provided, “I [Mr. X], the general manager of the Defendant, believe that the facts stated in this Defence are true.”  As such, the Plaintiff asked the Defendant to rectify the defects.  Consequently, the Defendant prepared another statement of truth.  For easy reading, a scanned copy the Defendant’s statement of truth is extracted hereunder with the signature obliterated (the Revised version):

6.  The Plaintiff was not satisfied with the Revised version on the ground that it failed to comply with the said rules again.  The Plaintiff suggested that the proper form under the rules should be: “I, Chan Wing Hong, the General Manager of the Defendant, believes that the facts stated in the Defence are true.”

7.  The Defendant disagreed with the Plaintiff and this caused the Plaintiff to take out the striking out summons. 

8.  However, it is unknown why the Defendant chose to challenge the Plaintiff’s statements of truth after the Plaintiff’s said striking out summons.  The Defendant said that the Plaintiff was in breach of O.41A, r.4(1)(a) and r 5(1) of the RDC.

9.  A scanned copy of the statement of truth in the statement of claim is extracted hereunder likewise with the signature obliterated:-

10.  The Plaintiff’s Reply contains a similar statement of truth.

THE LAW

11.  Under O.41A, there are different provisions and sub-paragraph of rules governing different makers of statement of truth such as those given by an individual, a legal representative, a partner and a person of senior position in a corporation.  In the present case, the ultimate question is what should be the proper form of statement of truth given by a person of senior position in a corporation.

12.  Both parties refer me to O.41A, r.3 to r.5.  I shall extract the relevant provisions in so far as they relate to a statement of truth vis-à-vis a corporation:-

Signing of statement of truth

O.41A, r.3(2):

“Subject to paragraphs (6)(7)(8) and (9), where a party is a body of persons, corporate or unincorporate, the statement of truth must be signed by a person holding a senior position in the body.”

O.41A, r.3(4):

“Each of the following persons is a person holding a senior position – (a) in respect of a corporation that is neither a public body nor a public authority, any director, manager, secretary or other similar officer of the corporation;”

O.41A, r.3(5):

“Where a statement of truth is signed by a person holding a senior position, that person shall state in the statement of truth the office or position he holds.”

Effect of statement of truth

O.41A, r.4(1):

“Subject to paragraph (2), a statement of truth is a statement that – (a) the party putting forward the document believes that the facts stated in the document are true; or”

Form of statement of truth

O.41A, r.5(1)

 

“The form of the statement of truth verifying a document other than a witness statement or expert report is as follows-

"[I believe] [the (plaintiff or as may be) believes] that the facts stated in this [name document being verified] are true.".

O.41A, r.5(3):-

“Where the statement of truth is not contained in the document that it verifies-

(a) the document containing the statement of truth must be headed with the title of the proceedings and the action number; and

(b) the document being verified must be identified in the statement of truth as follows-

(i) pleading: "the [statement of claim or as may be] served on the [name of party] on [date]";

 

Failure to verify pleading
O. 41A, r. 6:-

“(1) The Court may by order strike out a pleading that is not verified by a statement of truth.

(2) Any party may apply for an order under paragraph (1).”

DISCUSSION

13.  In the first hearing, Solicitors for the Defendant asked me not to focus on O.41A, r.3(5) but to pay more heed to O.41A, r.4(1) that provides, “a statement of truth is a statement that the party putting forward the document believes that the facts stated in the document are true.”   He said that the wordings transpire that their statement of truth starting with words “The Defendant believes …”, must be correct, instead of “I, Mr. Chan Wing Hong of the Defendant…” or “I, Mr. Chan Wing Hong on behalf of the Defendant….”.

14.  In the resumed hearing, Counsel for the Defendant prepared a comprehensive submission by referring me to the CJR Final Report and the legislative materials including “ the Hansard” leading to the enactment of O.41A.  Mr. Ng submitted that it is important to bear in mind that where pleadings are verified by a statement of truth, that amounts to a representation to the court that the party putting forward the pleading believes the facts stated in it are true.  In the present case, the party who put forward the pleading is the company.  Therefore, no criticism can be made on the Defendant’s statement of truth as per the Revised version when the Defendant strictly follows O.41A, r.5(1). 

15.  Mr. Ng also referred me to the Guide issued by the Judiciary in respect of the form of statement of truth.  I note that it is just a repetition of O.41A, r.5(1) and the Guide would not dispense any party’s compliance with the rules.   

16.  In short, the Defendant submitted that the wordings of the provisions transpire that the Revised version must be correct and the Plaintiff’s version must be wrong and the Plaintiff should be given opportunity to amend their form.

17.  With respect, I do not agree.

18.  Firstly, there is no doubt that the purpose of requiring pleadings or other specified documents be verified by a statement of truth is to provide that the consequence of making a false statement without an honest belief in its truth should be punishable as a contempt: see O.41A, r.9.  Since its operation, 2 litigants were imprisoned for this offence: Kinform Limited v Tsui Loi and Chow Wing Kun DCMP 947 of 2011 dated 19 August 2011 by Deputy District Judge Au Yeung.  However, as to the form of the statement of truth, it seems to me that both the Solicitors and Counsel for the Defendant have omitted a simple but important provision under O.41A, r.3(5).

19.  I am of the view that O.41A, r.3(5) is simple and straightforward in requiring the person holding a senior position to state in the statement of truth (not anywhere) the office or position he holds.   It reads: “a person holding a senior position, … shall state in the statement of truth the office or position he holds.”

20.  The phrase of  “shall state in the statement of truth” is plain to suggest the simplicity, that is to state the position in the statement or sentence of truth, not anywhere that may not form part of the statement or sentence of truth.   It is clear and unambiguous.  It may not be necessary to refer to the Hansard when the provisions are simple and clear.

21.  It seems to me that to prepare a statement of truth in accordance with O.41A, r.3(5) is extremely simple such as “I, Chan Wing Hong, the General Manager of the Defendant, believes that the facts stated in the Defence are true.” If the statement of truth is not contained in the pleading then it has to be prepared in a separate document and the Defendant has to comply with O.41A, r.5(3)(a)(b).

22.  Solicitors for the Defendant in the first hearing admitted that there is no difficulty in preparing the form similar to the one adopted by the Plaintiff but since the topic under dispute is of public importance, he is obliged to pursue his views.  With respect, his submission of public importance is an overstatement with an attempt to complicate a simple provision.  

23.  Even if one needs to look into the legislative materials, this would only fortify my views.  In particular, after reading the relevant part of the CJR’s Final Report, our current rules are even clearer and carefully drafted with the benefit of learning from overseas experience.  Paragraph 229 of the CJR’s Final Reports reads:

“Under the CPR(UK), guidance is given in the practice direction as follows:-

Where a document is to be verified on behalf of a company or other corporation, subject to paragraph 3.7 below, the statement of truth must be signed by a person holding a senior position in the company or corporation.  That person must state the office or positions he holds.”

24.  Compared the UK’s practice directions with our O.41A, r.3(5), it is a deliberate intention in Hong Kong to make it as a rule as opposed to a practice direction and to require that person to state in his statement of truth his position, something which is omitted in the UK’s practice directions.  Our Practice Direction 19.3 on “Statements of Truth” is not relevant to the form of statement of truth, it relates more to the language and the translation clauses in the statement of truth.

CONCLUSION AND ORDERS

25.  All in all, I come to the view that the Plaintiff’s form of statement of truth is correct and is in compliance with O.41A.  The Defendant’s Revised version of statement of truth is in breach O.41A, r.3(5).  There being no valid reason to dispense the Defendant with the verification of a pleading under O.41A, r.2(3), I make the following orders. 

(1)Leave to the Defendant to file and serve the statement of truth in the form similar to the Plaintiff’s form and O.41A, r.3(5) and r.5(3) are to be complied with.

(2)The Defendant’s summons dated 5 April 2012 be dismissed with costs .

(3)Cost of and occasioned by the Plaintiff’s summons dated 28 March 2012 and the Defendant’s said summons be to the Plaintiff.

COSTS

26.  After hearing parties’ submissions and Mr. Ng’s reasons of objections to the Plaintiff’s application for certificate for counsel, I granted certificate for counsel to the Plaintiff.    The main reason is that despite I said that this case is apparently simple but it is this simple provision being complicated unnecessarily causing the Plaintiff to instruct counsel to deal with these artificial complications.

27.  I shall continue to conduct summary assessment.  Having heard the parties’ submissions on the Plaintiff’s statement of costs, it is ordered that the Defendant do pay the Plaintiff $37,500 forthwith.