CHANG WA SHAN v. ESTHER CHAN PUI KWAN also known as CHAN PUI CHUN

HCA 1855/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 1855 OF 2010

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D E C I S I O N

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THE APPLICATION

1. This is the defendant’s application by way of summons taken out on 20 May 2013 [1-2][1] for leave to amend her Defence as highlighted in red in the draft attached to the summons.

2. By letter dated 31 May 2013 to the court, the plaintiff’s solicitors indicated that the plaintiff would not object to the amendments to para 8A, seeking to introduce a new defence based on qualified privilege.  The corresponding amendment to para 9 in the beginning sentence referring to this new defence will thus also not be objected by the plaintiff[2].

3. Mr K Lam, counsel acts for the defendant and Mr J Chang, counsel acts for the plaintiff.

THE FACTUAL BACKGROUND

4. This action arises out of the probate trial of the estate of the late Nina Wang.  On day 9 of the trial of the Nina Wang probate action on 21 May 2009[3], Mr Ian Mill QC, leading counsel for Tony Chan Chun Chuen, produced a document to the court (“Document”), namely an investment proposal for the development of a piece of land in Tai Po into a cinerarium purchased from the Chinachem Group.  The Document was produced to attack the independence and credibility of one of the witnesses called to testify for Chinachem in the action, Mr Gilbert Leung.

5. The trial judge then asked Mr Mill QC to explain the provenance of the Document, and he replied: “The individual who provided it to us is a Mr Edmund Tsang.  He says he was given that by Mr Gilbert Leung.”

6. “Edmund Tsang” is the plaintiff’s name commonly known and referred to in the securities industry.

7. The plaintiff says that the statement by Mr Mill QC to the court is not true.  The plaintiff alleges that he did not supply the Document to Tony Chan or his lawyers or anyone. He says that he had never seen or had the Document in his possession and he had never discussed its contents with Gilbert Leung.

8. Through a Norwich Pharmacal application by the plaintiff against Tony Chan[4], the defendant was revealed as the person who gave the Document to Tony Chan’s legal team before cross-examination of Gilbert Leung and told them that the Document was from the plaintiff.

9. Hence, this action against the defendant.

10. There is no dispute that the name “Edmund Tsang” was published by the defendant in answer to a specific question asked by Mr Midgley, in his capacity as Tony Chan’s solicitor, in contemplation of queries being raised by the trial judge, Mr Justice Johnson Lam, and/or to assist the Court in testing the evidence of Gilbert Leung[5].

11. The defendant also admits that the statement made by Mr. Mill QC was not true and that the plaintiff had not supplied the Document to Tony Chan or his lawyers[6].

THE DEFENCE

12. According to Mr Chang, the defendant’s original defence is two-fold.  First, she denied having been asked by Tony Chan’s lawyer (in particular Mr Jonathan Midgley of Messrs Haldanes) where she got the Document from, and she claimed Mr Midgley only asked her to whom Gilbert Leung had submitted the investment proposal, and she gave the plaintiff’s name which was what she herself had been told (see para 9(c) of the Defence)).  Second, she relied on the defence of absolute privilege (para 11 of Defence).  The defendant now, by amendment to the Defence, proposes to add alternative defence of qualified privilege and put forth her positive case of “Lucas-Box Meaning”[7].

THE GROUNDS OF OBJECTIONS

13. The plaintiff’s objections to the defendant’s application are basically two-fold, namely, delay despite the court’s order and the proposed amendments are cosmetic and therefore irrelevant to the issues in dispute[8]. However, as it turns out in the discussion below, the argument will turn on the propriety of the pleading of Lucas-Box Meaning for the plea of justification.

THE RELEVANT PRINCIPLES

14. Mr Chang relies upon the legal principles that I had referred to in my Decision in Tsang Foo v Chu Jim Mi Jimmy, HCA 7140/1995 (unreported, 8 October 2013) at para 6, of which reference should be made to the following:

“ a. The guiding principle for an application under O.20 r.8 is that the amendments ought to be allowed 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. It can be made at any stage of the proceedings, subject to O.20 r.8(1A), which requires that the order is necessary either for disposing fairly of the cause or matter or for saving costs. See §20/8/6 of Hong Kong Civil Procedure 2013, Vol.1.

b. It has been held by the Court of Appeal in Natamon Protpakorn v Citibank NA [2009] 1 HKLRD 455, at §§45, 48, 50, that an amendment will survive objection provided it cannot be demonstrated that it is bound to fail. In effect, an opposition to the application for amendment is a mirror image of an application to strike out a pleading on the basis that it discloses no cause of action pursuant to RHC, O.18 r.19: see also Global Bridge Assets Ltd & ors v Sun Hung Kai Securities Ltd [2011] 4 HKC 9, §§37, 53, 59. Therefore, unless it is a clear case that the proposed amendments will not succeed at trial, I should give leave to the defendant to amend the Defence, leaving the issues to the trial for determination.

c. The court will look at the merit of the amendment and more importantly, whether there is any real prejudice to the other party, bearing in mind that the court is to adjudicate on the real issues and disputes between the parties, technical and procedural rules are of lesser importance. VSC Building Products Company Limited v. Kono Insurance Limited HCA947/2005, 9 September 2009, (unreported) by Mr. Justice A. Cheung (as he then was) at §§ 19 & 22;

  d.    If the proposed amendments are bound to fail, no leave should be given to the plaintiffs to amend.  In deciding the matter, the Court should take the defendant’s pleaded case at its highest.  See §3 of Bank of China (Hong Kong) Limited v Leigh Hardwick HCA1110/2006 (unrep. A. Chan J) 28 August 2013.”

15. Mr Chang also refers me to the case of Igal Dafni v CMA CGM SA [2013] 2 HKLRD 73, paras 18 to 22, per Recorder H Wong SC. I consider that this case has special feature that the application for amendment of the Amended Defence and Counterclaim and Re-Amended Rejoinder was made at trial after all factual witnesses had given evidence[9], which is absent in this case.

DISCUSSION

16. Mr Lam agrees with Mr Chang that if the amendments are for cosmetic purpose alone, which are irrelevant to the issues in dispute, the Court should not entertain the application as this will waste costs and time.  However, if the cosmetic amendments are to be considered together with other substantive amendments relevant to the issues in dispute, such cosmetic amendments will not waste costs and time because they will not cause the other side to make the corresponding amendments to the pleadings.  There is simply no reason to refuse to entertain the cosmetic amendments for the tidiness of the pleadings, an improvement to the pleadings for the trial judge.  As far as the application being late is concerned, it is apparent that the case has not been set down for trial and there is nothing to show that such default cannot be compensated by costs.  Mr Chang, in his written submissions, seems not to attach much weight to this reason.  For this factor alone, I can safely say that the Court should not refuse the application.

17. Bearing in mind those legal principles above, I shall now proceed to consider the defendant’s proposed amendments.

Paragraphs 1 & 2

18. Paragraphs 1 and 2 are cosmetic amendment.  Based upon the reasons in paragraph 16 supra, they should be allowed.

Paragraph 3

19. The plaintiff objects to the amendments to paragraph 3 of the proposed Amended Defence on the ground that they are cosmetic or irrelevant. For the reason of cosmetic amendment, they are allowed.  The objection to the amendments in paragraphs 3(eA)-(eD) of the proposed Amended Defence is that they are irrelevant as well. The defendant explains that they are to rectify the errors of the plaintiff’s Statement of Claim, which the defendant had admitted, such as the case reference of the probate action.  There are other amendments too.  I can simply classify them as irrelevant because they will not be disputed at the trial.  They only add details to the facts of the case.  They can be treated as cosmetic amendments.  For the same reasons as for cosmetic amendments, they should be allowed.

Paragraphs 4 & 5, 7 & 8

20. The plaintiff has no objection to paragraphs 4(c) and 4(d).  For the rest of the amendments to paragraphs 4, 5, 7 and 8, the ground of objection is that they are cosmetic and therefore irrelevant.  For similar reasons as stated above, amendments to paragraphs 4, 5, 7 and 8 should be allowed.

21. As mentioned in paragraph 2 above, the plaintiff has no objection to the defendant’s proposed alternative defence of qualified privilege, supra.  Paragraphs 8A and 9 are allowed by consent.

22. These paragraphs have attracted substantial arguments between Mr Lam and Mr Chang, counsel for the defendant and the plaintiff respectively.  The crux of their argument, as I understand it, is on the pleading of “the Lucas-Box Meaning” in paragraph 10A of the proposed Amended Defence.

23. Mr Chang has, in his written submissions, summarized the plaintiff’s case and the defendant’s case.  At paragraph 38(2) of his written submissions, he said:

“(2) The defendant’s case was, and still is, that what she had said to Mr Midgley was in answer to a completely different question to the one which the plaintiff said she was answering:-

(a) The plaintiff’s case is that she was asked where she got the Document from, answering “Edmund Tsang”.

(b) The defendant’s case is that she was asked whom Gilbert Leung had submitted the investment proposal to, and she said “Edmund Tsang”.”

24. The plaintiff’s case is set out in §7 of the Amended Statement of Claim and the defendant’s defence to this paragraph is found at paragraph 9(b) and (c) of the Defence.

25. Mr Chang submits that Lucas-Box meaning plea will only be permissible if the court has found for the facts as alleged by the defendant.  However, if the court finds for the defendant on the fact as alleged, the plaintiff’s case for defamation will fail in limine because the expressions will not be defamatory.  He further submits, therefore, that the defendant is not permissible to set out her own version of the words, and then plead those words are true, referring to Gatley on Libel and Slander (11th ed.) paragraph 29.6.

26. Mr Lam argues that the defendant, pleading qualified privilege, must be allowed to plead her subjective belief that the words bear the Lucas-Box Meaning, and that the meaning was true. If she did not do so, the publication would be malicious and the defence of qualified privilege would fail[10].  He further submits that for the defence of justification, the defendant must plead a positive case as to what she says is the true meaning of the words complained of, relying upon Mak Shiu Tong v Yue Kwok Ying (2004) 7 HKCFAR 228 para 21 (per Ribeiro PJ).

27. It will be helpful to set out the relevant parts of what Ribeiro PJ said in his judgment:

“ 18. A plea of justification must relate to the words which are complained of. A defendant who relies on the defence must show that the defamatory imputation conveyed by those words is true.

19. Accordingly, in advancing a plea of justification, the defendant necessarily takes a view as to the meaning of the words complained of. His case is that the words so understood are true ……

20. As noted above, the plaintiff in his statement of claim has set out the pleaded meanings said to represent the natural and ordinary meaning of the words in question. In doing so, he was following a practice which (as Ackner LJ pointed out in Lucas-Box v News Group Newspapers Ltd [1986] 1 WLR 147 at 151) has been settled since Lewis v Daily Telegraph Ltd [1964] AC 234.

21. A defendant may or may not agree with the plaintiff’s pleaded meanings. If he does not agree, and if he does not raise pleas of justification or fair comment, he may, but is not required to, plead a positive case as to what he says is the true meaning of those words : Viscount de L'Isle v Times Newspapers Ltd [1988] 1 WLR 49 at 60.

22. However, the position is different where a defendant seeks to rely on justification or fair comment. A defendant is entitled to seek to justify any reasonable meaning of the words published which a jury, properly directed, might find to be the real meaning: Prager v Times Newspapers Ltd [1988] 1 WLR 77 at 86. And, ever since the Lucas-Box decision, his pleadings must make it clear what meaning he is seeking to justify.

23. This was re-iterated by May LJ in Morrell v International Thomson Publishing Ltd [1989] 3 All ER 733 at 737-8, in the following terms:

“...... the position now is that a defendant who pleads justification must do so in such a way as quite clearly, without circumlocution or obfuscation, to inform the plaintiff and the court of precisely what meaning or meanings the defendant may seek to justify. Although this may be done in the particulars of justification, there is then a substantial risk that the precise meaning will be lost in words. I see no reason why the meaning or meanings should not be set out directly, briefly and at the start of the plea. That, in my opinion, is the result of the authorities referred to and should be the practice followed in the future.”’

28. The defendant now pleads justification and relies upon Lucas-Box Meaning.

29. According to the decision of the Court of Final Appeal, the plea of justification must relate to the words the plaintiff complained of and she must show that the defamatory imputation conveyed by those words is true.  See paragraph 18 of the judgment, supra. In my view, “the words” in paragraph 18 of the judgment of the Court of Final Appeal should mean “the meaning of the words” as the Court also referred to the defamatory imputation conveyed by those words.  The defendant is not allowed to justify the meaning of the words not complained by the plaintiff in the pleadings.  The Lucas-Box Meaning approach is that the defendant must seek to justify any reasonable meaning of the words published which a jury, properly directed, might find to be the real meaning.  The words published must necessarily refer to those words complained by the plaintiff in his pleaded case.

30. Mr Lam takes the view that “the words” refer to the name “Edmund Tsang” only.  This is why he says in his written submission “This is a rather bizarre defamation action in that the only words being complained of were “Edmond [Edmund] Tsang” (“the Words”), which is the name of the Plaintiff.”

31. However, this interpretation takes the meaning of the Words out of context of the plaintiff’s pleaded case.  The Words must be read within the context of paragraph 7 of the Amended Statement of Claim. Otherwise, the defendant should have applied to strike out the plaintiff’s case in the first place.  This is very much a matter of interpretation of the Words in the plaintiff’s Amended Statement of Claim.  As such, the rationale for the interpretation of contractual terms or the statutory provisions should equally apply to the interpretation of the pleadings as well.  In Fully Profit (Asia) Limited v The Secretary for Justice for and on behalf of the Director of Lands FACV17/2012 delivered on 13 May 2013, the CJ said at paragraph 15 of the judgment:

“15. …… The statements of principle in Investors Compensation Scheme and in Jumbo King refer time and again to the relevant background against which the relevant contract and contractual terms must be viewed. It is in my view not particularly helpful in most cases to refer to the “ordinary and natural meaning” of words because, as very often experience tells us, there can be much debate over exactly what is the ordinary or natural meaning of words. The surer guide to interpretation is context. Here, I would just add that in the area of statutory and constitutional interpretation, it is context that is key; context is the starting point (together with purpose) rather than looking at what may be the natural and ordinary meaning of words[11].”

32. Read together with paragraph 7 of the Amended Statement of Claim, the plaintiff’s complaint against the defendant is clear – the defendant allegedly passed the Document to Mr Midgley, the solicitor acting for Chan Chun Chuen and told him that the Document came from the plaintiff in reply to Mr Midgley’s question as to where she got the Document from.  The defendant is therefore not permitted to put forth her words for her plea of justification, another example to those examples illustrated in Gatley on Libel and Slander (11th ed.) paragraph 29.6.  In my view, the defendant’s proposed amendments to paragraph 10A to 10C will amount to an abuse of the process.

33. It is for the reasons above that I consider that the defendant should not be allowed to plead the Lucas-Box Meaning the way proposed in paragraphs 10A to 10C.

34. The defendant is not debarred from pleading her case of defence that her answer to Mr Midgley’s question was not the one as alleged by the plaintiff, but to the question as she has put in her Defence.  See paragraph 12 supra. But that is not the plea of justification, the treatment of which at the trial is different as Ribeiro PJ in the Mak Shui Tong’s case said at paragraph 44, “the ambit of discovery is dictated, not by the width of the words complained of, but by the particulars of justification which the defendant is able to plead: Zierenberg v Labouchère [1893] 2 QB 183; Goldschmidt v Constable [1937] 4 All ER 293; Gatley, op cit, §31.8.”

Paragraphs 11-18

35. The ground of objection is that they are cosmetic amendments. For the reasons given above, they should be allowed.

Paragraph 19

36. The plaintiff has no objection to this paragraph.  It is allowed.

Paragraph 20

37. The ground of objection is that it is cosmetic amendment.  For the reasons given, it should be allowed.

COSTS

38. As to the costs of this application, the argument between the parties is who has substantially succeeded in the application.  Mr Lam submits that in term of the number of items of proposed amendments, the defendant is the winner whereas Mr Chang submits that in terms of substance and time taken for the argument, the plaintiff is the winner.  The plaintiff has in his letter in May 2013 told the defendant that he had no objection to the defendant’s alternative plea of qualified privilege.  I consider that the decision should turn on the substance rather than on the number of items succeeded and the plaintiff is the substantive winner in this application.  However, although Mr Chang submits that the plaintiff has good reasons to oppose the defendant’s cosmetic amendments, this is not a valid reason to avoid costs if the plaintiff fails.  In Mr Chang’s written submissions, he has submitted his arguments over the cosmetic amendments too. I consider that the plaintiff should have 90% of the costs of the application, including the costs reserved and for today’s hearing (with counsel’s certificate) to be assessed summarily under Order 62 rule 9A RHC to be $54,000 to be paid by the defendant within 14 days from the date hereof.

ORDER

39. I shall make an order in terms as follows:

(a) The proposed amendments are allowed except the amendments in paragraphs 10A to 10C, which are dismissed;

(b) Leave to the plaintiff to file and serve a Reply consequential to the amendments allowed, if so advised, within 28 days from the date hereof;

(c) Costs of and occasioned by the amendments to be the plaintiff to be taxed, if not agreed;

(d) Costs of this application, together with the costs reserved and the costs of today’s hearing be to the plaintiff as per paragraph 38 supra.