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HCA 1636/2010
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO. HCA 1636 OF 2010
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BETWEEN
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WEST COAST INTERNATIONAL TRADING LIMITED TRADING AS DANDELION FINE ARTS |
Plaintiff |
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CHELSEA ART COMPANY LIMITED |
Defendant |
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| Before: Mr Registrar K.W. Lung in Chambers (Open to the public) |
| Date of Hearing: 10 January 2014 |
| Date of Decision: 10 January 2014 |
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DECISION
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THE APPLICATIONS
1. The following summonses are for determination today:
a. The defendant’s application for further and better particulars on the answers given by Mr. Kan Ho Ming Patrick of the plaintiff to the interrogatories administered by the defendant as set out in summons dated 22 July 2013, pursuant to Order 26 rule 5(3) RHC (“the summons for further and better particulars);
b. The plaintiff’s application for leave to the plaintiff and the defendant to adduce expert reports by an art valuer on quantum in relation to the issues as stated in the Schedule annexed to the summons dated 23 October 2013 (“the summons for expert evidence”). In this summons, the plaintiff also asked for leave for the parties to exchange their expert reports by an art valuer on the following issues:
i. Whether the defendant’s painting “May 1994 Water Village Painting by Chen Yifei” as stated in the supplemental list of documents of the defendant was a genuine painting; and
ii. The market value of the defendant’s said painting, which was produced by the defendant but denied by the plaintiff as the 2nd painting as referred to in the Re-Amended Statement of Claim, as at the date of the report; and
c. The defendant’s summons for amendment of the Re-Amended Defence by summons of 27 December 2013 (“the summons for amendment” belatedly brought up by its solicitors’ letter dated 31 December 2013)[1].
2. In the summons for amendment, the defendant proposed to withdraw its admission of conversion of the 2nd painting as pleaded in the Re-Amended Statement of Claim described as “an oil painting by Chen Yifei (陳逸飛) by the name of ‘Water Village’ (水鄉)”.
3. The plaintiff opposes the summons for further and better particulars.
4. The defendant opposes the plaintiff’s summons for expert evidence on the bases that it is not necessary to have expert evidence for the valuation of the 1st, 3rd and the 4th paintings as they had been returned to the plaintiff. As to the 2nd painting, it is premature to consider expert evidence as the plaintiff has not yet been able to prove the identity of the 2nd painting.[2]
5. The plaintiff at first agreed to the proposed amendment to the Re-Amended Defence, but subsequently withdrew its consent as explained below.
6. Mr. C. Wang, counsel acts for the plaintiff. Mr. J. Lam, counsel acts for the defendant.
Pro Active case-management
7. This matter is an example that requires the court’s pro active case management in order to ensure a fair trial on the real issues for the parties. Two days before the hearing, in accordance with Practice Direction 5.4, Mr. Wang lodged his written supplemental submissions in response to the defendant’s further and better particulars application and the application for leave to amend the Re-Amended Defence. In the supplemental submission, counsel says that the plaintiff has no objection to the defendant’s application for leave to amend the Re-Amended Defence.
8. This Court fully appreciates that the parties have the liberty to frame the issues of dispute for the court’s resolution at trial. This liberty is obvious when they start the pleadings and frame the issues. Once the issues have been framed, the court has the duties under Order 1B, RHC to monitor its progress under its case-management power. No doubt, it has the inherent power and the duties to prevent any parties from abusing its process. The Court has the power under Order 1B rule 1(2)(l) to take step for the purpose of managing the case and furthering the underlying objectives under Order 1A, as in this case, to ensure that it is dealt with expeditiously as is reasonably practicable and to ensure fairness between the parties.[3] It was on this basis I considered that I should take up the matter on my own initiative, informing the respective parties’ solicitors that the Court would require explanation for the plaintiff’s stance. I shall state my reasons below.
9. Although the court will usually allow a party to amend the pleadings at any stage of the proceedings, especially when the case has not been set down for trial, such as this case, it will only exercise its discretion for the purposes of putting the real issues before the court for fair trial or saving costs. The court will therefore be reluctant to allow any amendment, which, contrary to the said purposes, causes embarrassment to the proceedings. To allow a defendant to withdraw admissions pleaded in the Defence without good reasons will obviously cause embarrassment to the legal proceedings. The court will, of course, take all the circumstances into consideration when it exercises its discretion. It will allow the defendant to do so if it has good reasons such as genuine inadvertent mistakes as shown in the cases in HKCP 2014 at 20/8/17.
10. However, the defendant has not given any reasons for the withdrawal of the admission. The only reasons are those set out in the draft Re-Re-Amended Defence. They do not show any mistakes on the part of the defendant, or negligence or being misled into the admission.
11. It therefore appears to me that the defendant does not have the legal basis for their application. It was indeed beyond me why the plaintiff would agree to the proposed amendments.
12. I am fully aware that such case-management power should be exercised with prudence and restraint and that I should not intervene if those proposed amendments are just cosmetic amendments causing no practical effect to the parties’ substantive rights or adversely affect a fair trial. However, I consider that the proposed amendments will change and enlarge the scope of the disputes between the parties substantially. I can envisage that if the amendments were allowed, there would be further interlocutory applications for further particulars on the identity of the 2nd painting, causing more time and costs. Mr. Wang has already said in his written submissions that, because of the proposed amendments, the plaintiff will have further witness statements to serve. See paragraph 63 of his supplemental written submissions. Conservatively estimated, the delay will be more than a year and the length of the trial will be more than double the original pleaded case as it now stands.
13. By a letter dated 8 January 2014, the plaintiff’s solicitors informed the Court that upon reconsideration, the plaintiff had decided to withdraw its consent. It requires explanation from the defendant for its withdrawal of admission that it had purchased the 2nd painting.
14. With no objection from the defendant, I shall allow the plaintiff to withdraw its consent to the proposed amendments to the Re-Amended Defence. The defendant’s summons for amendments will be considered below.
15. I shall now deal with the applications.
16. The plaintiff’s objection to the defendant’s application for further and better particulars is that the answers given to the interrogatories are sufficient or they are not necessary for disposing fairly of the matter or for saving costs.[4]
17. The defendant’s objection to the plaintiff’s proposed expert evidence for the trial is that the scope is overly broad and it covers matters which are irrelevant as a matter of law and fact.[5] In any event, no expert evidence should be adduced at all when the plaintiff has not yet been able to prove the identity of the 2nd painting. If valuation of the 2nd painting is to be conducted, it should be done on the following basis:
a. Painted in 1994
b. By Chen Yifei
c. With the theme of “Water Village”
d. With the size of 75x110cm
e. Dates of valuation be restricted to i) date of the alleged conversion; and ii) date of the expert report.[6]
18. The applications are, in principle, for the purpose of case management. They are for the purpose of having fair disposal of the matter or for saving costs. The facts of this matter and the issues in dispute will determine the result of the applications. I will therefore set out the factual background undisputed and the issues of dispute below.
19. It is obvious that the defendant’s summons for amendment should be dealt with before the other summonses because the proposed amendments will inexorably change the factual basis of the pleaded case, which will, in turn, affect the way the parties argue their case for the other summonses.
THE PLEADED FACTS
The Re-Amended Defence
20. The relevant facts as pleaded in the Re-Amended Defence and before the defendant’s proposed Re-Re-Amended Defence, are as follows:
a. The plaintiff claims against the defendant in respect of 4 paintings, which were found to have been stolen by its former employee and through her husband sold to the defendant. Mr. Siu Fai-lung is a shareholder and director in charge of the defendant and he is an experienced paintings and artwork trader himself. The defendant admitted that Mr. Siu had been a trader of paintings and artwork for about 25 years.[7]
b. The 1st, 3rd, and 4th paintings had been traced back and returned to the plaintiff. It was not pleaded that the defendant had demanded payments from the plaintiff for their return. The only outstanding claim relating to the returned paintings is “damages for inconvenience and/or loss of enjoyment of the paintings at a value to be assessed.”[8]
c. With regard to the 2nd painting, the plaintiff claims against the defendant for return of it or alternatively for damages at a value to be assessed. However, the plaintiff pleaded in paragraph 10 of the Re-Amended Statement of Claim that the estimated value of it was $3,000,000.[9]
d. The defendant admitted that he had bought the 2nd painting from Mr. Thomas Yeung on 12 March 2007 for $530,000 and had on 26 October 2007 sold to some third party for $620,000.[10] The defendant also admitted that the 2nd painting had not been returned to the plaintiff, nor had it paid damages in lieu thereof to the plaintiff.[11]
e. The facts above are pleaded in the pleadings.
f. In Mr. Siu’s witness statement, he said that he had purchased the 2nd painting from 林勛哲先生(“Mr. Lin”) for RMB850,000, which he intended to return to the plaintiff. However, the plaintiff denied that it was the 2nd painting stolen from it. The plaintiff proposed to have inspection of the alleged 2nd painting in order to ascertain its authenticity.[12]
21. The issues of dispute between the plaintiff and the defendant relating to the 2nd painting are these:
a. Liability for the admitted conversion of the 2nd painting by the defendant as it has raised the defence of contributory negligence on the part of the plaintiff[13];
b. Whether the painting now in the defendant’s possession is the 2nd painting stolen from the plaintiff. If it is, then it should be returned to the plaintiff by the defendant; or
c. If it is not the 2nd painting stolen from the plaintiff as it is a faked one, and if the defendant is found to be liable to the plaintiff for the conversion, then the defendant has to pay damages to the plaintiff in lieu of the return of the 2nd painting. There has to be an assessment of the amount of damages.
The proposed Re-Re-Amended Defence
22. The defendant now proposes to amend the Re-Amended Defence, the main purpose of which is to withdraw its admission and put the plaintiff to strict proof of the identity of the 2nd painting as pleaded in the Re-Amended Statement of Claim. The defendant admitted in its Defence that it had purchased the 2nd painting, relying upon the finding of the District Court that the 2nd painting entitled “’Water Village’ by Chen Yifei” was stolen by the plaintiff’s ex-employee, who passed it over to her husband, Mr. Thomas Yeung. The husband sold it to the defendant.[14]
23. The reason for the defendant to change its stance now is because the defendant through Mr. Siu had re-purchased the Water Village painting, which he thought to be the 2nd painting as alleged in the plaintiff’s Re-Amended Statement of Claim, from Mr. Lin for RMB850,000 with the ostensible intention of returning it to the plaintiff. However, the plaintiff denied that that painting was the 2nd painting stolen from it.[15]
24. The defendant admits that it had purchased a painting entitled “May 1994 Water Village Painting” through Mr. Siu Fai Lung.[16] The defendant also admits that Mr. Siu had given evidence at the criminal trial that he had purchased a painting by Chen Yifei named “Water Village” from Thomas Yeung.
The relevant legal principles on amendment
25. The application is made under Order 20 rule 5:
5. Amendment of writ or pleading with leave (O. 20, r. 5)
(1) … …, the Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleadings, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct.
26. Rule 5 is subject to rule 8(1A):
8. Amendment of pleading and certain other documents (O. 20, r. 8)
(1) For the purpose of determining the real question in controversy between the parties to any proceedings, or of correcting any defect or error in any proceedings, the Court may at any stage of the proceedings and either of its own motion or on the application of any party to the proceedings order a pleading or any other document in the proceedings to be amended on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct. (L.N. 152 of 2008)
(1A) The Court shall not under paragraph (1) order a pleading to be amended unless it is of the opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs. (L.N. 152 of 2008)
27. An admission made inadvertently may be withdrawn and the pleading amended accordingly. See 20/8/17 of Hong Kong Civil Procedure 2014 Vol. 1.
28. Mr. Lam refers me to a case of Cheung Wan Hung v Fai Wong Construction (Asia) Ltd DCPI 136/2009, in which the legal principles for withdrawal of admission were discussed. The Judge had referred to the legal principles as set out in the decision by Summer J. in Braybrook v Basildon & Thurrock University NHS Trust, October 7, 2004(Lawtel). It is sufficient, for this purpose, to remind us of the factors that the Court should take into account when exercising the discretion, viz,:
a. The reasons and justification in good faith;
b. The balance of prejudice to the parties
c. The public interest, in avoiding where possible satellite litigation, disproportionate use of court resources and the impact of any strategic manoeuvring.
29. To those factors, I should also consider whether such withdrawal truly reflects the real issues between the parties.
DISCUSSION
Amendments to the Re-Amended Defence
30. The question is whether the admission in its Re-Amended Defence was inadvertent mistake. The defendant has given its reasons for its withdrawal of its admission in the proposed amendments. It is because it had bought the alleged 2nd painting from Mr. Lin, intending to return it to the plaintiff, who refused to accept it saying that it was a counterfeit. The issue in dispute relates to the authenticity of the 2nd painting, not its identity. The defendant is not permitted to rely upon the plaintiff’s dispute on its authenticity to withdraw its admission of its identity. There is no dispute as to the title of the painting. Mr. Siu admitted that he had over 25 years’ experience in the trade of paintings himself and he had identified the 2nd painting at the time he bought it from Thomas Yeung. He had given evidence on this painting in the criminal trial at the District Court. He had also identified it when he bought it back from Mr. Lin.
31. The defendant bears the burden to show to the Court that he should be given leave to withdraw its admission. It has given no evidence to the Court that Mr. Chen Yifei had more than one painting with the same title as the 2nd painting. The dispute is on its authenticity, not its identity.
32. The defendant has clearly failed to discharge the burden for leave. I also take the view that the defendant’s proposed amendments to the Re-Amended Defence will muddle the issues for the trial; and if allowed, will waste time and costs for the proceedings as I can envisage that there will be further interlocutory applications for the particulars on the identity of the 2nd painting. Its application for the proposed amendments to the Re-Amended Defence is refused and dismissed.
The further and better particulars application
33. Since the defendant’s application for leave to amend its Re-Amended Defence is refused, the discussion below should base upon the Re-Amended Defence only.
34. I shall now consider the other summonses. First is the defendant’s application for further and better particulars of the interrogatories pursuant to Order 26 rule 5(3) of RHC, the relevant parts of which are set out as follows:
1. Discovery by interrogatories (O. 26, r. 1)
(1) A party to any cause or matter may in accordance with the following provisions of this Order serve on any other party interrogatories relating to any matter in question between the applicant and that other party in the cause or matter which are necessary either-
(a) for disposing fairly of the cause or matter; or
(b) for saving costs.
5. Objections and insufficient answers (O. 26, r. 5)
(1)
(2)
(3) Where any person on whom interrogatories without order have been served answers any of them insufficiently, the party serving the interrogatories may ask for further and better particulars of the answer given and any such request shall not be treated as service of further interrogatories for the purposes of rule 3(1).
6. Failure to comply with order (O. 26, r. 6)
(1) If a party fails to answer interrogatories or to comply with an order made under rule 5(2) or a request made under rule 5(3), the Court may make such order as it thinks just including, in particular, an order that the action be dismissed or, as the case may be, an order that the defence be struck out and judgment be entered accordingly.
35. It must be noted that the further and particulars under rule 5(3) are subject to the objectives of Order 26 rule 1, namely, for fair disposal of the dispute or for saving costs.
36. The interrogatories and further and better particulars on the answers given by Mr. Kan Ho Ming, Patrick purport to resolve two issues, viz. whether the painting alleged by the defendant to be the 2nd painting stolen from the plaintiff is the genuine 2nd painting; and how the estimated market value of HK$3,000,000 is arrived at.
37. Looking at the requests generally, I do not consider that pursuing those requests for particulars will solve the issues in questions satisfactorily. Nor do I consider that this is the proper course to be taken by the defendant for saving costs. Quite the contrary. The authenticity of the 2nd painting cannot be solved by the facts as requested by the defendant. It is difficult to understand the relevance of particulars such as the circumstances in which the plaintiff obtained the 2nd painting, the purchase price of it and the time it was stolen (para. 2c); who had seen it and the circumstances under which those people had seen it and the relationship of Madam Sheng Shan Shan with the plaintiff (para. 2(d) and the name of Madam Sheng’s friend (para. 2(d) of Mr. Kan’s affirmation) to the issue of authenticity of the 2nd painting. This issue has to be solved by expert evidence.
38. The defendant admits that the 2nd painting had been sold on 26 October 2007 for $620,000. He subsequently bought it back from Mr. Lin for RMB850,000. The plaintiff now says that the one bought from Mr. Lin is not the 2nd painting stolen from it. The plaintiff has given the reason in support of its allegation. It refers to Madam Sheng Shan Shan, a famous painter, who, according to the plaintiff, had studied and received the 2nd painting from the late painter. Madam Sheng had already identified the 2nd painting and she said that the defendant’s painting “is only a poor quality counterfeit which does not even represent a genuine piece of work by Mr. Chen Yifei.” Therefore it is clear that the question boils down to whether the defendant’s painting is a counterfeit of the 2nd painting, which is an area to be determined by an expert. I do not believe that the facts as requested can possibly resolve this issue. As I have said, they will muddle the real issue for the trial and will, if not properly controlled and case-managed, deteriorate into a game of words and particulars between the parties, wasting time and costs.
39. With regard to the requests on the estimated market value of the 2nd painting, I shall pass the same comments on the defendant’s approach. This issue can be resolved by the expert evidence. The plaintiff has only pleaded in the Re-Amended Statement of Claim that $3 million was an estimated market price. See paragraph 10. It is by no means a valuation of the market value and it asks for damages to be assessed in the prayer.
40. I will therefore dismiss the defendant’s summons for further and better particulars.
Application for leave to adduce expert evidence
41. I shall now deal with the plaintiff’s summons for expert evidence.
42. After the discussion at the hearing, the plaintiff has now agreed that the expert evidence should be as follows:
a. The 1st painting and the 3rd painting:
i. The market value and rental value on the date the defendant’s purchase of them, respectively dated 16 February 2007 and 5 June 2007;
ii. The market value and rental value as at the dates of the defendant’s sale of them, respectively dated 26 February 2007 and 7 October 2007; and
iii. The market value and rental value as at the date of the return of the painting to the plaintiff respectively dated 2 November 2010 and 2 September 2010.
b. The 4th painting:
i. The market and rental value as at the date of the defendant’s purchase of it on 12 February 2007; and
ii. The market and rental value as a the date of the defendant’s sale of the painting back to Thomas Yeung on 11 July 2007.
c. The 2nd painting by Chen Yifei:
i. The market and rental value as at the date of the defendant’s purchase of it on 12 March 2007;
ii. The market and rental value as at the date of the defendant’s sale of it on 26 October 2007;
iii. The market and rental value as at the date writ (3 November 2010, amended on 14 May 2011); and
iv. The market and rental value as at the date of report.
d. The May 1994 Water Village painting the defendant obtained in June 2013 from Mr. Lin:
i. Whether this painting is a genuine painting painted by the famous Chinese contemporary oil painter Chen Yifie;
ii. The market and rental value as at the date of the defendant’s alleged sale of the painting (26 October 2007); and
iii. The market and rental value as at the date of the writ (3 November 2010, amended on 14 May 2011; and
iv. The market and rental value as at the date of report; and
e. General practice of art dealers – what is the normal practice for an art dealer in Hong Kong to conduct due diligence exercise to verify the origin of a painting.
43. The plaintiff explains that the above expert evidence is for the purpose of proving the loss of enjoyment or use of the 4 paintings, the authenticity of the painting in the defendant’s possession allegedly to be the 2nd painting, which it intends to return to the plaintiff; and if it is found to be faked, then the market value of the 2nd painting for assessment of damages of it. It also serves the purpose of proving that the defendant’s defence that Mr. Siu purchased the paintings in good faith and without knowledge of notice of thefts as pleaded in the Defence[17] is not believable.
44. The defendant argues that the plaintiff is not entitled to claim for loss of enjoyment or use of the paintings because there is no evidence to show that the plaintiff had the intention of leasing out the paintings. Therefore there is no evidence of possible loss.
45. The plaintiff, however, submits that the plaintiff is entitled to claim for loss of use of the chattel, the paintings in this case, even if it had no intention of leasing them for profit, admitting that there is no evidence that the plaintiff had ever leased out the paintings for profit. Mr. Wang refers me to Clerk & Lindsell on Torts twentieth edition at paragraphs 17-108 and 17-109 and also to Mc Gregor on Damages, eighteenth edition paragraph 33-067.
46. Mr. Lam argues that those authorities refer to the situation where the defendant had obtained benefits from conversion, which is the remedy under the equitable principle of restitution. But there is no evidence that the defendant had obtained any profit during the period of conversion in this case.
47. However, Mr. Wang draws my attention to the case of Strand Electric Co v Brisford Entertainments [1952] 2 QB 246 CA referred to in McGregor that Denning LJ had reserved his decision that the plaintiff was entitled to restitution remedy only. The question that the plaintiff should also be entitled to claim damages under torts remains a valid issue for the trial. I agree. Under the general principle, remedy under torts should put the plaintiff to the same position as if no torts had been committed. The plaintiff then would be entitled to use the paintings for commercial purposes for profit. It may not be necessary for it to prove that it had the intention of using them for specific purposes. In Wong Hoi Fung v American International Assurance Company (Bermuda) Limited & Shrila Chan [2002] 3 HKLRD 507 at 511J, the Court held where the court could not form a clear view on the relevance of the proposed expert evidence, leave should be given to the plaintiff to adduce the expert evidence at the trial. I shall follow this decision.
48. Mr. Lam agrees that expert evidence will be required for the 2nd painting. But he submits that since the plaintiff is not able to identify the 2nd painting, it is pre-mature to make directions for the expert evidence. He submits that the date for the valuation of the 2nd painting should be the date of conversion and the date of judgment only.
49. For the reasons given above, I do not agree with Mr. Lam that the 2nd painting has not been identified. The crux is whether the defendant’s painting is the genuine 2nd painting stolen from the plaintiff.
50. As to the expert evidence on the general practice of the trade, Mr. Lam argues that it should not be allowed because this is irrelevant to the issue of conversion. But I can see that since the defendant has pleaded good faith in its Defence, it will be unfair to disallow the plaintiff to adduce expert evidence to show that the paintings were purchased at a gross undervalue of the market and that the defendant should have adopted the prudence that is usually required in the trade to ascertain the original source of the paintings, given the value of those paintings.
51. For the reasons above, I give leave to the plaintiff to adduce expert evidence on those issues above.
52. The directions will be as follows:
a. Inspection of the defendant’s painting be arranged within 21 days from the date hereof;
b. The plaintiff shall, within 28 days thereafter, serve an expert report on those issues in paragraph 42 supra;
c. The defendant shall be at liberty, within 28 days from the date of receipt of the plaintiff’s expert report, serve an expert report in response thereto; and
d. The plaintiff’s expert shall be at liberty to serve an expert report in reply within 14 days thereafter;
e. The solicitors for the respective parties shall cooperate with one another for the inspection of the defendant’s painting in question;
f. Liberty to apply to court for further directions; and
g. The experts of the respective parties shall be available for cross-examination at the trial.
53. As to the costs of the summonses and the hearing today, including costs reserved, the plaintiff should have the costs of all the three summonses (with counsel’s certificate) assessed under Order 62 rule 9A RHC at $110,000 to be paid by the defendant within 14 days from the date hereof.
ORDER
54. I shall now make an order in terms as follows:
a. The defendant’s summons for further and particulars be dismissed;
b. The plaintiff’s summons for expert evidence as proposed be amended to those per paragraph 52 supra;
c. The defendant’s summons for leave to amend its Re-Amended Defence be dismissed;
d. The costs of the applications be in terms of paragraph 53 supra.
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(K.W. Lung)
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Registrar, High Court |
Mr. Clark Wang, instructed by Hau, Lau, Li & Yeung, for the plaintiff
Mr. Justin Lam, instructed by Kao, Lee & Yip, for the defendant
[1] Counsel’s written submissions had not covered this summons on date of the letter.
[2] §17 of written submissions
[3] Order 1A rule 1(b) and (d) RHC
[4] §§4.1 to 4.4 of written submissions of the plaintiff
[5] §2 of written submissions of defendant
[6] §17 ibid
[7] §10A(2) of Re-Amended Defence
[8] §3 of defendant’s written submissions
[9] Prayer (2) and §10 of Re-Amended Statement of Claim
[10] §§6 & 7 of Re-Amended Defence
[11] § 19(2) ibid
[12] §§15 & 16 of the plaintiff’s written submissions and §§ 4 of the defendant’s written submissions on F+B
[13] §§16 & 17 of the Re-Amended Defence
[14] §5 of the draft Re-Amended Defence
[15] 8A (8) (9) & (10) ibid
[16] §11 ibid
[17] Paragraph 6 of Defence
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