YIP CHING TSZ v. EAST WEEK PUBLISHING LTD AND OTHERS

HCA 2586/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2586 OF 2004

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JUDGMENT

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1.  These proceedings demonstrate the serious waste of court time and money that results when litigants or their advisers become obdurate over issues of costs and blind to the reality of facts.  It is likely that the total costs involved to date in the proceedings before me on 12 April 2005, amount to as much as $600,000 or more.  A sensible approach to the issues by all parties would have saved virtually all of that money, not to mention the court time involved in an application to the Master, and the hearing of an appeal from the Master’s decision before me.

2.  It has not been made clear to me precisely how this situation has come about.  It may be that the steps taken, which have resulted in this situation, are the result of specific instructions, given by the lay parties, following properly informed advice from solicitors and counsel.  It needs to be borne in mind that specific instructions would undoubtedly be given on the basis of advice that I would reflect the legal position and costs consequences.  But it equally may well be that the manner in which the litigation has been conducted by the solicitors, reflects steps taken by solicitors, without specific instructions from the lay client on those steps, but on an assumption that those steps are in the client’s best interests, and being technical steps, were taken on the basis of a general instruction to conduct the litigation on the client’s behalf, rather than a specific instruction on the steps.

3.  In the absence of such clarity the criticisms I direct to the way in which the litigation is being conducted are not directed specifically at either the parties or the solicitors, but generally to all those involved.

4.  The plaintiff, (Ms Yip), is apparently a celebrity engaged in the public relations business.  The first defendant, (East Week), is the publisher of a weekly magazine, with the same name, with widespread circulation throughout Hong Kong.  On 6 October 2004, East Week published an article concerning Ms Yip which she considered to be defamatory.  She instructed solicitors.  On 12 November 2004, a writ was issued, without any letter before action.  East Week is the publisher of the magazine.  The second defendant, who was not involved in the interlocutory steps with which I am concerned, is the editor of the magazine.  K2 Printing Company Limited, (K2), was sued as the printer of the magazine.  This interlocutory stage does not involve the fourth, fifth, and sixth defendants, who are sued in respect of a virtually identical publication in a separate magazine.

5.  Every local newspaper, which expression includes a weekly news or gossip magazine, in Hong Kong, is required to be registered pursuant to the provisions of the Registration of Local Newspapers Ordinance, Cap 268, (the Ordinance).  The registration process requires that the proprietor, publisher, printer, and editor of the publication be identified in a register, (the Register).  The evidence establishes that when East Week was first registered, Toppan Printing Company (HK) Limited, (Toppan), was named in the Register as the printer of the magazine.  Subsequently, in October 2003, prior to the publication in issue, K2 was named in the Register as the printer.

6.  It is necessary here to record a particular factual matter in respect of East Week magazine that is somewhat unusual.  Each week the magazine is published in two individual parts, which are sold together.  As I understand the position, the two separate parts cannot be purchased individually.  The front page of each part contains a banner logo identifying the publication by name as “East Week”.  One part is described as a “Social News Booklet”, and the other part is described as an “Entertainment Booklet”.  The alleged defamation is contained in the Entertainment Booklet.  In fact each booklet is printed by a different printer.

7.  From the initial registration of East Week in the Register, Toppan was registered as the sole printer of East Week magazine.  The Register did not demonstrate any distinction between the Social News Booklet, and the Entertainment Booklet.  In fact Toppan printed the Entertainment Booklet, and another company, Dai Nippon Printing Company (Hong Kong) Limited, (Dai Nippon), was the printer of the Social News Booklet.  In October 2003, Dai Nippon ceased to be the printer of the Social News Booklet, that task then being assigned to K2.

8.  At about that time, East Week went to the Registrar of Newspapers to notify the change of printer.  Apparently it was then the view of the Registrar of Newspapers that there could only be one printer of a magazine, and as a result K2 was recorded on the Register as the sole printer of East Week magazine, and the name of Toppan was removed from the Register, notwithstanding the fact that Toppan continued, as it always had been, to be the printer of the Entertainment Booklet.

9.  An examination of the publication demonstrates an assertion on the contents page of the Entertainment Booklet that the printer was Toppan.  Prior to the issue of the writ Ms Yip’s solicitors searched the Register, from which they ascertained that the registered printer of East Week magazine was K2.  The evidence now demonstrates, and it is accepted by all parties, that, notwithstanding the state of the Register at the time of the publication, and at the time of the issue of the writ, the printer of the publication at issue was in fact Toppan.

10.  Ms Yip’s solicitors were therefore, at the time of the writ was issued, faced with conflicting evidence as to who had printed the alleged defamation.  The Register said the printer was K2.  The booklet in which the alleged defamation was contained said the printer was Toppan.   The solicitors took the view that they could not rely upon the assertion in the document.  The solicitors apparently elected to advise Ms Yip to issue proceedings against K2.  That is understandable advice.  Any name could be placed upon the magazine as the printer.  In the circumstances it was sensible to rely upon the Register.

11.  When served with the writ, K2 wrote on, 15 November 2004, to the solicitors for Ms Yip, pointing out that they were not the printer of the Entertainment Booklet.  On 9 December 2004, solicitors for K2 wrote to Ms Yip’s solicitors and  repeated the assertion that the wrong printer had been served and advised that they had instructions to seek to strike out the claim.  They sought an extension of time to file the defence and said that they would delay filing a summons to strike out the claim in order that instructions may be taken.  That brought a response from Ms Yip’s solicitors the next day, 10 December 2004, simply asserting that according to the Register, K2 was the printer and accordingly was properly joined, unless it proved to the contrary.

12.  On 10 December 2004, K2’s solicitors wrote to Ms Yip’s solicitors.  They repeated the assertion as to the wrong printer and set out the circumstances by which the Register did not reflect the true situation.  Again an extension of time for filing the defence was sought.  Ms Yip’s solicitors replied saying that they were prepared to agree to a consent summons to extend the time for defence, but only upon payment of $800 in costs.  K2’s solicitors for their part replied immediately, asserting that it was unreasonable to seek costs and saying that if the matter could not be resolved by 1 p.m. that day the strikeout application must be filed.

13.  There being no response, in time, to that letter, K2 immediately issued a summons pursuant to Order 18 r. 19 to strike out Ms Yip’s claim against it on the grounds that the claim was frivolous or vexatious, [r 19(1(b)), or an abuse of process, [r 19(1)(c)].  A claim that the writ and statement of claim disclosed no reasonable cause of action, [r 19(1)(a)], was sensibly abandoned before the Master.  As part of the evidence in support of the summons, a letter was exhibited which purported to come from East Week, addressed to K2,  making a simple, bare assertion, in two lines, that K2 was not the printer of the 58^th issue of the Entertainment Booklet.  The letter was not on any letterhead.  It could have been written by anyone.  Ms Yip’s solicitors were entirely justified in placing no weight upon it at all.

14.  On 14 January 2005, Ms Yip’s solicitors wrote to the solicitors for East Week seeking clarification of the printing issue.  They demanded disclosure of the true name and address of the printer of the article in question.  That brought a wholly unhelpful response which, while confirming that there were two different printers, declined to disclose the identity of the printer of the Entertainment Booklet, in which the alleged defamation was contained, remarkably asserting that it was “irrelevant to the dispute in the subject action”.  It is difficult to imagine anything more relevant in a defamation action than the identity of the printer.

15.  What was clear however, when the matter came before the Master on 8 February 2005, was that there was confusion over the true name of the printer.  Extraordinarily, the advisors to neither Ms Yip, nor K2, sought to adjourn the matter in order that the confusion of fact may be resolved.  Each pressed on with the summons to strike out before the Master.  Faced with the evidence as it was it is not at all surprising that the Master ruled that the question was a factual issue for resolution at trial and dismissed the summons with costs against K2.  On 21 February 2005, K2 appealed against that order. 

16.  Ms Yip now accepts that K2 was not the printer, and that in fact the printer was Toppan.  On 10 March 2005, upon reaching that conclusion, Ms Yip filed a summons pursuant to O.15 r 6 and O.20 r 5, seeking to amend the writ and statement of claim by striking out the name of K2 and substituting the name of Toppan as the third defendant.  That summons sought an order for costs against East Week.  By a subsequent amendment costs were also sought on the summons against K2.  Neither East Week nor K2 oppose the making of the order for substitution, however both oppose any order for costs, and seek costs for themselves. 

17.  It is absolutely clear that an order ought to be made substituting Toppan for K2 as the printer.  There will be an order in terms of paragraph 1 of the summons of 10 March 2005.  I shall deal with the question of costs on that summons in due course.

18.    Consequently, the issue as to whether or not the Master was right in refusing K2’s summons to strike out the writ and statement of claim against it, with K2 no longer being a party to the action, becomes strictly academic, save perhaps as to the questions of costs.  I put this proposition to counsel who took the view that the matter was not academic and needed to be argued.  It was with considerable reluctance that I heard argument.

19.  It is clear that the Court should not entertain an appeal on an academic matter where the only issue is costs: see Gay v Yip Shut Yuen [2004] 1 HKC 615 and Kuok Hong Neng v Yuen Sik Wah & Anor [2004] 1 HKC 618.  The rationale for that rule is obvious.  It will invariably be much less expensive, particularly in terms of court time, for an unsuccessful party to simply pay costs ordered against him, rather than pursue an appeal that is entirely academic solely to reverse the costs order.  Notwithstanding the views of the counsel involved I am satisfied that the issue is purely academic save as to costs.  Accordingly, the appeal against the Master’s decision of 8 February 2005, is dismissed.  I shall deal separately with the question of costs before the Master and in due course deal with the question of costs on the appeal.

20.  Upon it becoming clear to Ms Yip’s solicitors that K2 was not the printer, they invited K2 to withdraw the appeal with a view to minimising legal costs.  That request was refused the appeal has been pressed on today.  Mr Carolan contends that as it is now not disputed that K2 was not the printer of the publication, it follows that the appeal is unanswerable, and that therefore K2 should have its costs both on the appeal, and before the Master.  The argument I heard on the matter was directed at each side attempting to justify their position below and seeking costs both below and on the appeal.

21.  The mechanism for the registration of local newspapers is provided for in the Newspapers Registration and Distribution Regulations, (Cap 268 Sub Leg B), which provides, by Reg. 4, that the particulars to be supplied in order to effect registration may be supplied and certified by any one of the proprietor, printer, publisher or editor of a local newspaper.   By Reg. 5, if there is any change, or if any inaccuracy is discovered, in any of the specified particulars, a duty is imposed on the four entities, proprietor, printer, publisher, and editor, to notify the change of, or correction of particulars, and to certify the correctness of the substituted particulars and of their own descriptions.  It appears to be therefore, that each of those four entities, if they are likely to be named in the Register, have, at least an interest, if not a duty, to ensure that the particulars for the time being are correct.

22.  A certified extract from the Register is, pursuant to s 12 of the Ordinance, evidence of the truth of the matters stated in such extract.  By s 13 of the Ordinance there is a presumption, until the contrary is proved, that the person whose name appears in any local newspaper as the printer of that local newspaper is in fact the printer.

23.  The publication of which Ms Yip complains was made on 6 October 2004.  Ms Yip's solicitors, in order to issue proceedings against K2, undoubtedly searched the Register, from which they would have learned that on 8 October 2003, the Registrar of Newspapers had been notified that the printer of East Week magazine, formerly Toppan, had been changed to K2.  Mr Chong contends before me that the terms of the Register, being evidence of the truth of the matters stated in the Register, rebutted the presumption in s 13 of the Ordinance.  As I recorded at the beginning of this judgment, the publication in question asserted that Toppan was the printer.  That however is a mere assertion, which could be made by or in any newspaper, being merely a printed statement in a document, albeit one required to be present by the terms of the Ordinance.  Any evidential value of that assertion is plainly set aside, at least on a prima facie basis, by the terms of s 12 of the Ordinance.

24.  Mr Chong contended that the assertion in the Register that K2 was the printer constituted an estoppel against K2.  Setting aside the question of the applicability of notions of estoppel in defamation proceedings, it is absolutely plain that there can be no estoppel arising from the Register.  For there to be an estoppel Ms Yip must alter her position on the faith of the representation to her detriment: see Spencer Bower, Estoppel by Representation, 4^th Ed, para. I.2.3.  Ms Yip has not altered her position to her detriment.  Her right of action against the printer of the Entertainment Booklet remains.  She merely sued the wrong party, perhaps giving rise to an issue as to who should pay the costs on that step.  The notion that a mistake in the Register would render K2 liable for damages for a publication it was simply not involved in must be wholly wrong.  To persist in that view was to be blind to the reality of the facts.

25.  There is a clear obligation on East Week and K2 to ensure that the Register is correct and up-to-date.  If K2 has been sued as a result of its own failure to ensure that the particulars in the Register are correct, then it is responsible for its own misfortune.  It now being absolutely plain that the issue is academic, the appeal should have been abandoned as suggested by Ms Yip’s solicitors.  To continue the appeal, as has been done, solely for the purpose of costs, is unnecessary time and cost wasting.  I make no order in favour of K2 for costs on the appeal.

26.  The summons to strike out was filed because Ms Yip demanded $800 in costs on a consent summons to extend the time for filing the defence. That was a matter which could have been dealt with perfectly adequately in an exchange of letters between solicitors, and did not require either a formal summons or the payment of costs.  To have agreed to an extension of time was plainly the sensible course.  In the face of the state of the evidence at the time the matter came before the Master the sensible course for Ms Yip to have taken would have been to seek to adjourn the summons to clarify the evidence.  I have no doubt that in those circumstances the Master would have adjourned the summons.  Both parties have acted in a way which has only served to aggravate the costs.  By persisting with her resistance of the summons to strike out before the Master, instead of seeking to adjourn the summons, Ms Yip has brought any costs incurred upon herself.  It is clear that K2 ought not to have been a party to the proceedings.  The matter comes before me by way of rehearing and the state of the evidence before me is different to that before the Master.  I am satisfied that, had the Master known the true state of the evidence, he would not have made an order for costs in favour of Ms Yip.  The order for costs before the Master is set aside.  Each party must bear their own costs on that hearing.

27.  Before me Mr Chong persisted with the argument that K2 was properly sued and that the assertion in the Register amounted to an estoppel against K2.  For reasons I have given that is wrong.  In these circumstances I make no order for costs in favour of Ms Yip on the appeal.

28.  I turn now to consider the issue of costs on the summons to substitute defendants.  The fact that K2 was sued as the printer of the publication is a situation that it and East Week were themselves responsible for, by failing to ensure that the Register properly reflected the true state of affairs.  In those circumstances there will be no order for costs in favour of K2 on that summons.

29.  Mr Lui for East Week argued that it should be entitled to costs of the hearing of the summons to substitute the defendant.  His submission was that the court should pay particular attention to whether or not parties or any one party have or has acted unreasonably at any stage of proceedings whereby costs are unnecessarily incurred.  With that I entirely agree.

30.  East Week are primarily, if not equally, responsible with K2, to ensure that the Register properly reflects the true state of affairs.  It is no answer to say that they were forced into a position by the attitude taken by the Registrar.  They could have registered the two booklets comprising the publication separately, thereby accurately reflecting the true position. They could have challenged the decision of the Registrar to refuse to register two printers by way of judicial review.  They accepted a situation which they knew did not reflect reality.

31.  It was submitted on behalf of East Week that they were not obliged, when asked by Ms Yip’s solicitors to disclose the true identity of the printer of the Entertainment Booklet.  That may be technically correct.  But it was a wholly unhelpful, and in the circumstances, East Week being responsible for the maintenance of the correct position on the Register, an unreasonable course of action.  It has aggravated the situation and added unnecessarily to the cost.  If a party chooses to take what it believes to be technically correct position, simply because that position is technically correct, but that position is both unhelpful and unreasonable, and results in unnecessary costs being incurred I see no reason why that party should have their own costs.  I accordingly make no order for costs in favour of East Week on the summons to substitute defendants.

32.  This whole sorry debacle could have been concluded at a very early stage when it became abundantly clear to Ms Yip’s advisors that K2 was not in fact the printer of the magazine.  To persist with the assertion that K2 was properly named in the face of that fact, and in reliance upon an estoppel, was to be blind to the obvious.  In the face of the circumstances that had arisen it was quite unnecessary for Ms Yip’s solicitors to demand costs of $800 upon the request to extend the time to file the defence.  Had that simple request been sensibly agreed to all matters would have been clarified and the necessary correction undertaken at a very modest cost.

33.  While in the circumstances, as a result of Ms Yip’s quite reasonable reliance upon the Register, it was inevitably going to be necessary, to substitute a defendant, the blind resistance of Ms Yip or her advisors to the reality of the facts disclosed prolonged the matter.  In those circumstances I order that she must bear her own costs on the summons to substitute the defendant.

34.  The effect of my judgment is that the appeal is dismissed, save that the costs order is set aside, Toppan is substituted for K2 as the 3^rd Defendant, (printer), and each party is to bear its own costs in all respects.