THE INCORPORATED OWNERS OF SHATIN NEW TOWN AND OTHERS v. CHEUNG KWOK KEUNG AND OTHERS

DCCJ 2684/2019

[2020] HKDC 1182

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2684 OF 2019

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

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

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

DECISION

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

INTRODUCTION

1.  This is the hearing of a summons taken out by the 1^st Plaintiff (“P1”) and the 2^nd plaintiff (“P2”) on 27 November 2020 (“the Leave Summons”) for leave to file P2’s 3^rd affirmation (“P2’s 3^rd Aff”), P3’s 2^nd affirmation (“P3’s 2^nd Aff”) and P4’s 2^nd affidavit (P4’s 2^nd Aff”) as annexed to the Leave Summons (“the Supp Affs”). 

2.  The Supp Affs are sought to be filed in opposition to the 2^nd defendant’s (“D2’s”) summons dated 5 August 2020 for an interlocutory injunction restraining P1 and P2 from publishing allegedly defamatory statements allegation that he is inter alia still under criminal investigations (“the Injunction Summons”) and in reply to the 3^rd affirmation filed by D2 on 6 November 2020 (“D2’s 3^rd Aff”).

3.  P1 and P2 submit that the Court should grant leave to them to adduce the Supp Affs while D2 submits that such leave either should be refused or should be granted to P1 & P2 to a limited extent only.  

BACKGROUND

4.  In order to place the Leave Summons in its proper context, one has to understand what the main action is about.  This is a case brought by the the Incorporated Owners of Sha Tin New Town (“P1 or IO”) and existing members of the management committee (“P2, P3 & P4” and collectively with P1 as “Ps”), against former members of the IO management committee (“D1, D2, D3 & D4” and collectively as “Ds”) for defamation.

5.  In the midst of this bitter dispute between the parties where a lot of accusations have been made against each other, D2 took out the Injunction Summons seeking for interlocutory injunctive reliefs.  As a “satellite litigation”, it seems to have taken on a life of its own.

6.  Upon the Ds’ application before His Honour Judge Harold Leong on 14 August 2020 and after hearing counsel on both sides, the learned judge gave directions for the parties to file evidence for the Injunction Summons.  He ordered, inter alia, Ps to file and serve their supplemental affirmations in opposition on or before 11 September 2020; Ds to file and serve their affirmations in reply on or before 9 October 2020; the parties to lodge agreed hearing bundle on or before 30 November 2020; and the parties to file and serve their skeleton submissions respectively on or before 7 & 11 December 2020.  The substantive hearing for the Injunction Summons was originally fixed to be heard before me on 17 December 2020, with one day reserved. 

7.  However, Ds failed to file and serve their affirmation in reply within the time specified, leading to an “unless order” made by Judge Harold Leong on 16 October 2020 compelling them to file and serve their supplemental affirmations in reply by 4:00 pm on 6 November 2020, otherwise they will be debarred from doing so.

8.  As a result, D2 filed his 3^rd affirmation (“D2’s 3^rd Aff”) and D4’s 1^st affirmation (“D4’s 1^st Aff”) on the very last day allowed under the Order, ie on 6 November 2020.    

9.  Upon the application by Ps by letter, I ordered the hearing of the Leave Summons originally fixed to be heard before me on 10 December 2020 to be moved forward to 4 December 2020 in order to give the parties more time to file further evidence should I allow Ps’ Leave Summons application.

Background to the Leave Summons application

10.  On the same day of filing the Leave Summons on 27 November 2020, Ps also served the draft supplemental affirmations to D2 for his consideration.  Amongst all the draft supplemental affirmations, the only affirmation which made substantial response to D2’s 3^rd Aff and D4’s 1^st Aff is P2’s 3^rd Aff.  This is a 33-page long document consisted of 42 paragraphs, some with up to 7-8 sub-paragraphs. Ds did not take issue with the contents of the other affirmations.  

11.  In their letter to Court dated 30 November 2020 at §3(4), Ps alleged that D2 and D4 “introduced many new documents and allegations in their new affirmations”, which prompted Ps to apply for leave to adduce further evidence in response to them.

12.  In D2’s letter to Ps dated 2 December 2020 (which is copied to the Court), D2 informed Ps that their sudden application for leave to file further evidence without any notice has seriously prejudiced the D2’s preparation for filing of skeleton submissions which was originally due on 7 December 2020.

13.  However, for the purpose of saving costs and to give Ps a fair opportunity to respond to D2’s 3^rd Aff and D4’s 1^st Aff, D2 stated at §4 of the same letter that he is agreeable to allow §§32-35 and 38-42 of P2’s draft affirmation to be adduced, which D2 accepted are matters in reply to subjects raised in D2’s 3^rd Aff and D4’s 1^st Aff.

14.  D2 at §4 of that letter also drafted necessary consequential directions on inter alia extension of time to file skeleton submissions, Ds’ right of reply and costs, for Ps’ consideration.

15.  Having received no reply from Ps, D2 sent another letter dated 3 December 2020 to repeat the concerns and proposal of D2. Instead of sending a direct response to D2, Ps filed their skeleton submissions on 3 December 2020. Ds treated that as Ps’ response to D2’s offer.

General principles involved in case management directions

16.  As Mr Earl Deng for D2 has rightly pointed out in his submissions, the primary aim in the exercise of the court’s case management discretions is to secure the just resolution of disputes in accordance with the substantive rights of all parties concerned: see O 1A, r 2 of the Rules of the District Court, Cap 336H (“RDC”).

17.  In particular, the Court shall bear in mind that the underlying objectives of these rules introduced under the Civil Justice Reform (“CJR”) are to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court, to ensure that a case is dealt with as expeditiously as is reasonably practicable, and to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings: see O 1A, r 1 of the RDC.

18.  I shall bear the above principles in mind when deciding whether to grant leave to Ps to file further supplemental affirmations, or should only grant limited leave to Ps to file evidence in response to new matters arising out of D2’s 3^rd Aff and D4’s 1^st Aff.

19.  I accept the submission of Mr Deng that the scope of the injunction sought by D2 is very narrow in the grand picture of the main action, namely, a restraint against further publication of statements that D2 is still under criminal investigation after 19 September 2019, that is the time when the Defence and Counterclaim was filed and Ps were put on express notice that police investigation against D2 was closed.

20.  Thus, seen in such light, the issue in dispute is a very narrow one, namely, whether Ps’ statements in the December 2019 and July 2020 notices are unarguably defamatory and whether Ps have any defence at all (“the Issue”).

21.  It follows that any other matters that are relevant to the main action but not the injunction application could not assist the Court in deciding whether to grant the injunctive relief D2 is now seeking.

Ps’ submissions

22.  Mr Lawrence Ng, who appears with Mr Howard Wong, for P1 and P2, submits that D2 and D4 have made many new allegations and new documents in D2’s 3^rd Aff and D4’s 1^st Aff.  He listed out almost 2 pages of “new matters” which he had identified in D2’s 3^rd Aff.  He concludes that, given the whole host of new documents and allegations contained in D2’s 3^rd Aff, “one cannot help but infer that D2 is ambushing P1and P2 in this applcaiton.”

23.  In my judgment, while P1 and P2 are certainly entitled to respond to some of those “new matters”, it is the scope and extent of how much they are entitled to reply to them is the real question I have to decide on the Leave Summons.  At the end of the day, in my judgment, it boils down to a question of proportionality, necessity and relevancy.    

24.  However, I have no hesitation to reject Ps’ bold submission that the new documents and allegations contained in D2’s 3^rd Aff and D4’s 1^st Aff are there to “ambush” P1 and P2.  Having read those affirmations, I do not find that is the case at all.   

The Court’s findings

25.  First, with respect to Mr Ng, I find a lot of the contents in P2’s 3^rd Aff are either irrelevant or unnecessary.  In my view, they have gone way beyond the scope of the Injunction Summons application brought by D2 and is disproportionate to what is intended to be a very narrow application to prohibit the publication of a very specific statement or statements made by Ps which D2 alleges are defamatory. In my judgment, a lot of those matters raised in P2’s 3^rd Aff certainly are not necessary in order to deal with the Issue in dispute.  Such a long affirmation in my view is unnecessary and totally out of proportion for a simple interlocutory application. After all, we are not dealing with issues in the main action here.

26.  I find the following matters highlighted by Mr Deng in his submissions in relation to P2’s 3^rd Aff particularly helpful:

(1)  Part B.1 is titled as “the collective decision-making processes of the MC and the IO are procedurally fair and proper” and is 7 pages long.  I agree with Mr Deng that the Court should not be required to study the structure and the operation of the IO in such details in deciding the Issue since they are totally irrelevant.  D2’s point in his and D4’s 1^st Aff is that P2, together with P3 and P4, have effective control over the actual and practical day to day machinery of the operation of the IO by highlighting objective examples and setting out evidence of such.  In my view, it is not necessary for P2 to embark on a whole “new journey” of explaining the whole decision processes of the MC and IO to the Court in order for the Court to decide the Issue.

(2)  §26.9 mentions the alleged insomnia suffered by P2, which could hardly be said as relevant to the Issue at all.

(3)  Part C addresses Ds’ reply to D4’s 1^st Aff on the meeting on 3 April 2018, in which D4 replied §96 of P2’s 2^nd affirmation dated 11 September 2019 and produce the audio recording and transcripts of the meeting to clarify the picture. I share the view of Mr Deng that the contemporaneous record and audio recording are sufficient if not conclusive to explain what had happened at the meeting.  I also note the fact that notwithstanding P2 asserting that the recording is not complete, there is no indication from him when the 3^rd April 2018 notice was placed before members and discussed or that the recording missed out that part of the discussion.

27.  I further accept D2’s submission that if the Court allows Ps to adduce such late evidence at this stage on the nominally relevant matter, it is inevitable that Ds would also require a fair opportunity to respond to those matters, which would incur extra costs disproportionately.  As set out under the heading of “General principles involved in case management directions” above, one must always keep in sight the underlying objectives of the CJR and the cost effectiveness of each case when considering whether to allow further evidence to be filed in an interlocutory application.  Just because some matters are marginally relevant to the Issue does not mean that they should be allowed.  Otherwise, we will soon find ourselves back to the bad old days in the pre-CJR era where “satellite litigations” are allowed to be mushroomed and hundred pages of irrelevant or marginally relevant evidence are allowed to be filed in simple interlocutory applications. I certainly do not think this is the trend the Courts have allowed parties to conduct litigation since the implementation of the CJR.  I certainly would not allow this to happen in cases where I am responsible for case management.  I do not see why this case should be treated differently.     

28.  Second, I accept D2’s submission that a major part of the P2’s 3^rd Aff (viz. §§7-25, 26.1-26.8, 27-31 and 36-37) are matters which either repeat paragraphs already existing in previous affirmations, or are essentially analysis of pleadings and evidence and/or legal submissions and is therefore improper in an affirmation.

29.  In particular, I find the following regarding P2’s 3^rd Aff:

(1)  §§7-12 repeat contents in previous affirmations;

(2)  §§14-25 are analysis of evidence and legal submissions; and

(3)  Part B.2 (the whole §26 other than §26.9) “(F)undamental deficiencies in D2’s application” and Part B.3 “(M)alice is fact sensitive which the Court could not decide on affidavit evidence in an interlocutory application” (§§48-81) are clearly legal submissions.

30.  Ps in the skeleton submissions at §14 argues that “the other paragraphs are also replies to the corresponding paragraphs in D2’s 3^rd Affirmation”, however, I agree with Mr Deng that the Court is not concerned with technicalities.  Being a “reply” to D2 and D4’s affirmation is neither here nor there.  Whether it is a proper reply is tested by seeing if the reply is contrasting factual evidence or clarifying documentary evidence that is within the knowledge of the deponent. 

31.  Looking at the substance of Ps’ “reply”, I am of the view that they are clearly not factual evidence but submissions and analysis which should be left to counsel to be made at the substantive hearing.

32.  In my judgment, to allow Ps to adduce legal submissions in P2’s 3^rd Aff is unnecessary, and again would incur costs disproportionately especially at this late stage. 

33.  Third, Ps in their skeleton submissions at §11 claim that they “will suffer serious prejudice if they are not given a proper opportunity to file affirmations in reply to D2’s new allegation of malice”.

34.  D2 referred the Court to §40 of D2’s 3^rd Aff, in which D2 explained that “the entire 1^st Affirmation of WKW was dedicated to showing the Court that P2 had initiated a false prosecution against me, had accused me of theft and retention of P1’s property, which led to questioning under caution by the police, a search warrant being executed on my home in front of my children, and then the police investigation was concluded with no further action against me, and then P2 continues to publish statements to the Estate thereafter that I am still under criminal investigation”.

35.  I agree with Mr Deng that should Ps feel that they have already adequately addressed the matters D2 raised in D2’s 1^st Aff, that would be sufficient to support the defence of malice.  There is simply no need for P2 in his affirmation to raise legal arguments and analysis for the purpose of responding to allegation of malice.

36.  Finally, I consider that some of the specific matters raised by P2 in his 3^rd Aff as identified by D2 in their letter to Ps dated 2 December 2020 could only “nominally be described as matters in reply to subjects raised in the (D2’s 3^rd Aff) and (D4’s 1^st Aff)”.  I am therefore minded to allow Ps to adduce further evidence to this limited extent, ie to grant leave to Ps to adduce §§32-35 and 38-42 in P2’s 3^rd Aff.

37.  That will however necessitate a further round of replies from D2 and D4 to deal with the above paragraphs in P2’s 3^rd Aff.

38.  Mr Deng and his solicitors have very helpfully prepared the consequential affirmations D2 intends to file in draft form in the event that partial leave is granted, and have attached the unsworn draft 4^th affirmation of D2 and draft 2^nd affirmation of D4 to his skeleton submission in order to give the Court a gist of what they look like.  A quick glance of those drafts confirmed that they are only confined to those narrow issues raised in the above identified paragraphs in P2’s 3^rd Aff.  I would allow D2 and D4 to file and serve those affirmations as long as they are not going to materially depart from the contents of the drafts. 

39.  Given the fact that D2’s solicitors had given the above “option” to Ps’ solicitors in their letters dated 2 & 3 December 2020 (which is exactly the conclusion I have reached in this application) but Ps did not take that up, I am of the view that this whole argument before was unnecessary and could have been avoided had Ps agreed to them.  Thus, I consider that the real winner of the Leave Summons is D2 eventhough I have allowed certain portions of P2’s 3^rd Aff to be admitted as evidence in reply.  Hence, I rule that Ps should be responsible for paying the costs of this application with certificate for counsel. 

40.  At the hearing on 4 December 2020, I had directed that the substantive hearing of D2’s Injunction Summons be adjourned to 30 December 2020 with a revised estimate of 2 days (with 31 December 2020 reserved) to be heard before me and the original hearing date fixed on 17 December 2020 be vacated so as to allow the parties to have more time to prepare their written submissions.  I also considered that one day may not be sufficient for the purpose of hearing full arguments on the Injunction Summons given the new matters raised by both sides and the restricted sitting hours to the pandemic.

CONCLUSION

41.  In conclusion, I would allow Ps to adduce §§32-35 and 38-42 in P2’s 3^rd Aff and 2 other uncontroversial affirmations/affidavits and would make the following orders:

(1)  The Plaintiffs do have leave to adduce as evidence under paragraphs 32 - 35 and 38 - 42 of the 3^rd Affirmation of Lee Shui Chong only (“the Allowed Paragraphs”) and the entire contents of the 2^nd Affirmation of Mak Lam Wing Goethe and 2^nd Affidavit of Tam Mei Chu filed on 27 November 2020;

(2)  Save and except as provided for, all other paragraphs under the 3^rd Affirmation of Lee Shui Chong are to be redacted and be expunged from the Court file;

(3)  The 2^nd Defendant do have leave to file on or before 4:00 pm on 15 December 2020, affirmations in reply but limited to matters consequential to the Allowed Paragraphs and in line with the contents of the draft affirmations of the 2^nd Defendant and the 4^th Defendant which were attached to his counsel’s submissions dated 3 December 2020;

(4)  No further affidavit or affirmation to be filed by the parties without leave of the Court;

(5)  The 2 Defendant do lodge with the Clerk of the Court and serve his written submissions on or before 4:00 pm on 18 December 2020;

(6)  The Plaintiffs do lodge with the Clerk of this Court and serve their written submissions on or before 4:00pm on 24 December 2020;

(7)  No further written submissions or list of authorities to be lodged, filed or served without leave of the Court;

(8)  The adjourned hearing of the 2^nd Defendant’s summons dated 5 August 2020 under O 29, r 1 of the RDC fixed on 17 December 2020 be vacated and the same will be further adjourned to 30 December 2020 at 2:00 pm in Court no.8 with a revised estimate of 2 days (with 31 December 2020 reserved);     

(9)  Costs of the Plaintiffs’ application to adduce further evidence under the summons dated 27 November 2020 be to the 2^nd Defendant in any event, with certificate for counsel.