NG WOON KING v. CHENG KAM WAH AND ANOTHER

DCCJ 2235/2017

[2018] HKDC 491

IN THE DSTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2235 OF 2017

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DECISION

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1.  This is a defamation case and the plaintiff is applying to strike out various paragraphs of the Re-Amended Defence.

Background

2.  This case concerned two letters sent by the 1^st and 2^nd defendants to the tenant, Shun Fung Trading Co. (“Shun Fung”) of a property which is co-owned by the plaintiff, a Mr. Chan King Chun (“Mr. Chan”) and the two defendants as tenants-in-common.

3.  The 1^st and 2^nd defendants are the son and daughter of the late Cheng Man Yuk (“Mr. Cheng”). Mr. Cheng had been one of the registered owners of the property (as tenants-in-common with the 1^st and 2^nd defendants). On 26 May 2014, Mr. Cheng had transferred his interest to the plaintiff and Mr. Chan by a Deed of Gift.

4.  Despite this, Mr. Cheng appeared to have entered into a tenancy agreement with Shun Fung about 1 week later on 3 June 2014.

5.  On the tenancy agreement, three signatures (seeming to be the names of Mr. Cheng, the 1^st defendant and 2^nd defendant) appeared on the areas to be signed by the landlord. It was not in dispute that all 3 signatures were signed by Mr. Cheng himself.

6.  Mr. Cheng passed away on 4 November 2016.

7.  It was the defendants’ case that they were not aware of the tenancy agreement nor received their share of deposit or rents. They only discovered the tenancy agreement in around October 2016.

8.  On 20 March 2017, the 1^st and 2^nd defendants jointly wrote a letter in Chinese titled “租約糾紛通知函”. The main part of the notice stated “…現因我兩者在本物業租約簽訂時未有被預先咨詢本物業租約合同內容，認為現有租約存在不合法問題，將共同入稟法院向其他本物業權持有人追討觸犯或侵犯簽訂租約權問題…特此通告貴 租客…在收到本通知函應在死約期滿日後遷出本物業…”

9.  On 13 April 2017, the 1^st and 2^nd defendants jointly wrote a second letter in Chinese titled “租約糾紛通知函 (續一)”. The relevant content stated “根據貴寶 號…內涵，得知貴 寶號有意願延續現有租約，但因本物業租約合同合法性問題, 鄭錦華先生及鄭慧珍女士(簡稱”我兩者”)不認同現有租約是可以在法律上有效地延續，因此我兩者以對本物業的其他業權擁有人提出解決方案…我兩者將會在五月期間共同入稟法院向其他本物業業權持有人追討觸犯或侵犯簽訂租約權等問題及終止現有租約…”

10.   In the Amended Statement of Claim, the plaintiff specifically extracted :-

i)  From the first letter the following wordings:

“現有租約存在不合法問題，將共同入稟法院向其他本物業權持有人追討觸犯或侵犯簽訂租約權問題”; and

ii)  From the second letter the following wordings:

“但因本物業租約合同合法性問題, 鄭錦華先生及鄭慧珍女士(簡稱”我兩者”)不認同現有租約是可以在法律上有效地延續…我兩者將會在五月期間共同入稟法院向其他本物業業權持有人追討觸犯或侵犯簽訂租約權等問題及終止現有租約”

and claimed that such wordings, “in its natural and ordinary and/or inferential meanings…meant and were understood to mean that:- The plaintiff (and Chan) had acted in an illegal, unlawful and/or illegitimate manner by infringing the right of D1 and D2 to enter into the TA.”

11.  In the Re-Amended Defence, the 1^st and 2^nd Defendants, pleaded many lines of defence against defamation. The current application sought to strike out some of the pleadings which the plaintiff claimed should be struck out on the ground that (i) they disclose no reasonable defence, (ii) they are frivolous or vexatious, and / or (iii) they are otherwise an abuse of process of the Court.

Legal principle

12.  The legal principle is trite and not in dispute: “It is only in plain and obvious cases that the courts should exercise its summary powers to strike out…any pleadings under this rule…There should be no trial upon affidavit. Disputed facts were to be taken in favour of the party sought to be struck out. Nor should the Court decide difficult points of law in striking out proceedings. The claim (defence in this case) must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbably, for the claim (defence in this case) to succeed before the Court will strike it out. If the court does not think that the matter to be clear beyond doubt or if it fails to be satisfied that there is no reasonable cause of action or that the proceedings are frivolous or vexatious, then, there should be no striking out.” (Hong Kong Civil Procedure 2018 paragraph 18/19/4 p. 476)

13.  The threshold for striking out pleadings is indeed high, but this does not mean that a party can indiscriminately throw in pleadings without any forethought and judgment on whether such pleadings are, even on its own case, “obviously unsustainable”, “unarguably bad” and “impossible to succeed”.

Absolute Privilege

14.  The defendants raised the defence of “absolute privilege” in paragraphs 12 and 13, pleading on one hand that these were “pre-action letters” and, on the other, that they were “protected by absolute privilege”.

15.  The legal principle regarding absolute privilege is trite (Chang Wa Shan v Esther Chan Pui Kwan and Anor [2017] 5 HKLRD 57) and I need not repeat it here.

16.  It is established law that a letter before action is not covered by absolute legal privilege: “it is not enough that proceedings are contemplated: they must be actually on foot or the matter in issue must be an act which initiates them.” (Gatley on Libel and Slander 12th ed. P. 471) A letter before action in the context of a court proceeding is obviously not “an act which initiates” that court proceeding.

17.  Ms. Kitty Tsang, counsel for the defendants, quoted Lilley v Roney (1892) 61 LJQB 727 but that case concerns a letter of complaint against a solicitor to the Registrar of the Law Society. This was held to be essentially a step in a judicial proceeding in a tribunal action, not a court proceeding.

18.  The legal test is whether the letter sent was a “recognised step in initiating the action”. Ms. Tsang tried to argue that this was an area of evolving law. I would think that with precedents dating back to the time of Queen Victoria rather suggested that the legal principle must be well settled!

19.  As such, by pleading that these were “letters before action” and in the very same paragraphs claiming for absolute privilege for them was in total contradiction to trite legal principles and “obviously unsustainable”. Paragraphs 12 and 13 of the Re-Amended Defence should therefore be struck out.

No Publication

20.  Paragraph 17 of the Re-Amended Defence was confusing because on one hand, there was an admission that the pre-action letter was sent to the tenant but it was then pleaded that “such act could not amount to publish (publication of) any defamatory statement to the party of that affair”.

21.  Ms. Tsang clarified in court that the defendants were not disputing the “communicating” of the pre-action letter, but disputing that the pre-action letter was not defamatory.

22.  In that case, the arguments on “meanings” have already been raised in paragraphs 14, 15 and 16. Nevertheless, with Ms. Tsang’s clarification on record, this should only be considered cumbersome pleadings. It may be merely “unnecessary but otherwise harmless” so would not satisfied the high threshold of being struck out. It may, however, be a matter of argument on costs if that issue arises in the future.

23.  Paragraph 16 dealt with the interpretation of the meaning of the letters and paragraph 18 argued that the publication of the letter was to a relevant party of that affair. I do not find that the pleadings satisfied the high threshold of being struck out.

Legal professional privilege

24.  The defendants pleaded in paragraph 22 that “any legal advice given…are protected under legal professional privilege” (which is trite law), but then argued that the letters “including the advice stated in the pre-action letter are thus protected”.

25.  It is a clear misunderstanding or misapplication of the legal professional privilege: the letters were not released in the context of seeking or obtaining legal advice as the tenant was clearly not the defendants’ legal adviser. The fact that the letters contained wordings as advised by the lawyer was totally irrelevant.

26.  The pleading is in total contradiction to trite legal principle and “obviously unsustainable”. Paragraph 22 of the Re-Amended Defence should therefore be struck out.

Justification

27.  In the summons, the plaintiff only sought to strike off the wordings “the whole statements of the 1^st Message” in paragraph 23 of the Re-Amended Defence.

28.  In raising this defence, the defendants already pleaded that the content of the pre-action letter was true and the pre-action letter clearly must also contain “the whole statements of the 1^st Message” within it. Thus, the drafting could again be considered repetitive and cumbersome. Nevertheless, that alone would not satisfy the high threshold of being struck out.

29.  However, during the hearing, Mr. Lai Chun Ho, counsel for the plaintiff, sought to strike out paragraph 23 in its entirety.

30.  This was entirely inappropriate as the plaintiff was belatedly trying to extend the application.It was also unfair to the defendants as the plaintiff was advancing a rather intricate legal argument.

31.  I need not deal with this argument but I will do so for the sake of completeness.

32.  As I understand it, Mr. Lai argued that in raising the defence of justification, the defendants must plead the act which the plaintiff was said to have committed that was in “an illegal, unlawful and / or illegitimate manner by infringing the right of D1 and D2 to enter into the tenancy agreement with Shun Fung” and that this was not done.

33.  Mr. Lai relied on Hong Kong Civil Procedure 2018 paragraph 18/8/7 at page 439: “Unless the defamatory words themselves clearly shows what are the facts in issue, a plea of justification should set out the facts relied upon in support thereof, so as to comply with this rule. The defendant must always make it quite clear how much of the alleged libel he justifies; if he leaves this in doubt, it will be struck out as embarrassing…In pleading a defence of justification the acts which the claimant is said to have committed and which are relied on to justify whichever imputation they are directed to support must be identified…”

34.  I do not agree. Paragraph 7(vii) of the Re-Amended Defence has provide particulars why any imputation that plaintiff have committed an illegal act etc. was justified: it was pleaded that “the plaintiff knew or should have known” (after the Deed of Gift has conferred Mr. Cheng’s interest in the property to the plaintiff and Mr. Chan) that “Mr. Chang was not entitled to sign the tenancy agreement and / or without the authority and consent of all the other tenants-in-common.”

35.  At the very least, the defendants have identified the plaintiff’s omission (despite the knowledge or alleged knowledge of an illegitimate act) as justification of any imputation that the plaintiff has committed “an illegal, unlawful and / or illegitimate manner by infringing the right of D1 and D2 to enter into the tenancy agreement with Shun Fung”.

Statutory Provisions

36.  Paragraph 24 stated that “there are statutory provisions of rule (Order 18 rule 8 of Rules of High Court, Cap 4A) requiring D1 and D2 to provide particulars of illegality in the pleadings…”

37.  Ms. Tsang agreed that Order 18 rule 8 applies to “any pleading subsequent to a statement of claim” and that since the letters before action could not be considered such, she conceded to withdraw the reference to the order.

38.  However, Ms. Tsang was unable to tell the court what other statutory provisions are relevant. In any case, since the paragraph specifically refer to “pleadings”, any argument that the letters are pleadings is “obviously unsustainable”. Paragraph 24 should therefore be struck out.

Proprietary interest

39.  I am of the view that defence raised in paragraphs 25 may involve a legal argument and the court is not in a position to decide on the merit of the defence and at this stage, I do not think it satisfied the high threshold to be struck out.

Fair comment

40.  Ms. Tsang claimed that there was public interest involved as it involved the professional standard of the estate agent. Again, the defence may involve adducing of further evidence and legal arguments so the court will not conduct a trial by affidavit.  I will not allow paragraphs 26 to 29 to be struck out.

Observations and comments

41.  There appeared to be little, if any, disputes in facts in this case. The crux would seem to be on the interpretation of the meaning of the two letters and legal arguments regarding the claim and defence of defamation.

42.  As such, this should not be a particularly difficult case.

43.  The court would make the observation that the practice of making pleadings in the manner of “throwing mud at the wall and hoping that some will stick” (which would be no different from “fishing exercises” in the context of discovery) must be discouraged. Even in the absence of a striking out application, the court might still exercise its inherent jurisdiction to ensure efficient and cost-effective case management in the spirit of the CJR.

44.  Time and costs considerations are even more important in relatively simple cases like this.

45.  Thus, even if the plaintiff has not taken out any striking out application, the court will still exercise its inherent jurisdiction of case management powers to strike out the 4 paragraphs as mentioned above.

Order

46.  I would give the following orders:

a)  Paragraphs 12, 13, 22 and 24 of the Re-Amended Defence be struck out.

b)  Given that the plaintiff only succeeded in roughly 1/3 of his applications, I will give an order nisi for 1/3 of the costs of this application to be paid by the 1^st and 2^nd defendants to the plaintiff with certificate for counsel.

c)  The remaining costs of the application be costs in the cause with certificate for counsel.

d)  If there is no agreement to costs as stated in paragraph 46(b) above, the plaintiff shall serve and lodge a summary bill of costs within 28 days and the 1^st and 2^nd defendants shall serve and lodge a summary list of objections within 14 days thereafter. The costs will be summarily assessed on paper.