YIP WAI TAK VIVIAN v. LEE KA WO ESMOND AND ANOTHER

DCCJ 4923/2019

[2023] HKDC 551

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4923 OF 2019

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BETWEEN

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DECISION

(Paper Disposal)

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Background

1.  Judgment was handed down on 16 February 2023 (“the Judgment”). I shall adopt the same abbreviations and nomenclatures in the Judgment.

2.  This Court has, in the Judgment, dismissed P’s claims against D1 and D2, with a costs order nisi against P that P do pay costs of D1 and D2, with Certificate of Counsel, to be taxed if not agreed.

3.  On 2 March 2023, P took out summons seeking leave to appeal against the Judgment, that the Judgment be set aside and there be a retrial of all issues before a different Judge (“P’s Summons”).

4.  On the same day, written submissions were filed on behalf of D1-D2 for an application to vary the costs order nisi, to the effect that costs be on indemnity basis. Such application is consented to by P.

Leave to Appeal

5.  Under Section 63A (2) of the District Court Ordinance, Cap 336 (“DCO”), leave to appeal shall not be granted unless the court is satisfied that:

(a) The appeal has a reasonable prospect of success; or

(b) There is some other reason in the interests of justice why the appeal should be heard.

6.  Le Pichon JA in SMSE v KL [2009] 4 HKLRD 125 stated at §17 that “reasonable prospects of success involve the notion that the prospects of succeeding must be reasonable and therefore more than fanciful, without having to be probable”.

P’s Proposed Grounds of Appeal

7.  There are 8 grounds as set out in P’s Summons. Mr. Lam for P and Mr. Carolan for D1 and D2 have in their written submissions grouped the Grounds as follows:

Ground 1 & 2; Ground 3; Ground 4; Ground 5-7 and Ground 8

Grounds 1 & 2

8.  Grounds 1 & 2 concern the section of the Judgment on Defamation.

9.  Ground 1 reads:

“The Learned Judge erred in law, in her determination of meanings, by misunderstanding or misapplying the “hypothetical reader” test. She took inadmissible opinion evidence into account (§38 to §41), not realizing documents in a trial bundle can be admissible for one purpose but not another. She ignored, or failed to appreciate the full significance of, D1-D2’s own admission that the words in question did carry defamatory meanings (§76 to §78). The Learned Judge also erred in law when she failed to appreciate the Plaintiff did not have to prove all of her pleaded defamatory meanings. Putting it differently, the Learned Judge erred in law when she failed to appreciate the Plaintiff could succeed in the Action for as long as she could prove at least one of her pleaded meanings.”

10.  Ground 2 reads:

“The Learned Judge erred in law, in her ruling as to whether the words in question were defamatory, by effectively requiring the Plaintiff to adduce evidence on the actual effects of the words in question (§85 to §87), when the correct position in law was that evidence of that nature could never be given or received for that purpose. The Learned Judge erred in law when she failed to appreciate it was trite law, since at least Hung Yuen Chan Robert v Hong Kong Standard Newspapers Ltd [1996] 4 HKC 519 (at 526-G, per Le Pichon J, as she then was) that “whether the words complained of are defamatory is a question of construction and not of evidence”. In any case, the words, being a very serious accusation of sporting misconduct, were plainly defamatory, and there was no or insufficient basis for the Learned Judge to rule otherwise in the manner as she did. See also:

2.1 Chow Wing Kai v Liang Jing [2021] 2 HKLRD 1189 (§34, per HHJ Kent Yee).

2.2 Tsang Po Mann v Tsang Ka Kit [2021] 1 HKLRD 1301 (§14, per HHJ Kent Yee).

2.3 Gatley on Libel and Slander (13^th Edition, 2022, p.63, §2-034).

2.4 Clement v Chivis (1829) 9 B & C 172.”

11.  In short, P says that this Court relied on DP’s findings and wrongly took into account evidence (rather than as a matter of construction) in arriving at its conclusion that the Words are not defamatory.

12.  As detailed under §36 to 41 of the Judgment, the findings of the DP were considered in relation to the justification defence.

13.  This Court has put itself in the position of the hypothetical reader, who is taken to be the representative who would read the publication in question, in construing the meaning of the Words.

14.  As held by Lok J in Multi-Winner Investment Ltd. v Lau Ming Yee [2017] 1 HKLRD 328, the Words in the 1 February Email must be taken as a whole, and the context and circumstances of the Word must be taken into account: §32-34 Judgment.

15.  It is in this sense that evidence was considered by the Court to ascertain the context and circumstances of the Words so as to construe the meaning: §43-63, 65-78 & 81-82 Judgment. This Court did not reach its conclusion by reference to P’s failure to adduce evidence to prove the actual effect of the Words.

16.  Mr. Lam argued that Judgment could be entered against D1-D2 by what they have pleaded in their Defence, as held by Poon Hau Kei v Hsin Chong Construction Co Ltd (2004) 7 HKCFAR 148.

17.  Regarding the alleged admissions by D1-2 on the defamatory meaning of the Words, Mr. Carolan clarified that they were not admission of the meanings as pleaded by P.

18.  In any event, reading the 1 February Email as a whole, this Court found that it was not defamatory.

19.  Further, as pointed out by Mr. Carolan, there is no challenge to the Court’s findings in this respect.

20.  I do not see that P has any reasonable prospects of success for Grounds 1 & 2.

Ground 3

21.  Ground 3 deals with the section on Qualified Privilege and Malice:

“The Learned Judge erred in law, in her determination of qualified privilege and malice, by adopting Horrocks v Lowe [1975] AC 135 as the alleged “leading authority” (§93) on these issues, when the “leading authority” on these issues was in fact Jonathan Lu v Paul Chan Mo Po (2018) 21 HKCFAR 94, and/or by failing to consider what was said by Lord Reed NPJ in Jonathan Lu altogether. Most importantly, since the Learned Judge failed to appreciate the leading authority on these issues was plainly the 2018 case of Jonathan Lu instead of the 1975 case of Horrocks, the Learned Judge failed to carry out the two-step analysis repeatedly emphasized by Lord Reed NPJ in Jonathan Lu v Paul Chan Mo Po (2018) 21 HKCFAR 94 (§17 & §31).”

22.  Mr. Lam emphasized that the leading authority on Qualified Privilege was not Horrocks v Lowe [1975] AC 135 but Jonathan Lu v Paul Chan Mo Po (2018) 21 HKCFAR 94 where Lord Reed NPJ emphasized that in all cases where qualified privilege and malice are pleaded issues in dispute, a two-step analysis is “necessary”.

23.  The “two step analysis” is as follows:

“First, was the occasion privileged, and if so, for what purpose? Secondly, was that the defendant’s purpose when he published the communication in question? The first of these is a question of law for the judge. The second is a question of fact, to be determined by the jury…”

24.  Mr. Carolan pointed out that Horrocks remains the leading authority on the issue in the common law world. Lu v Chan is simply a more recent application of that authority by the CFA in Hong Kong. Horrocks was applied and followed by Lord Reed in Lu v Chan.

25.  Clearly, Lord Reed did in fact apply, and elaborate, the principles in Horrocks. There is no point in arguing which is “the leading authority” in this area of law.

26.  While the Judgment did not refer to Lu v Chan, the Court did in effect undergo the same process as the “two-step analysis”, which in essence is no different from what was laid down in Horrocks: §90-92 and §111-120 & 123.

27.  I do not see any reasonable prospects of success for this Ground.

Ground 4

28.  Ground 4 reads:

“The Learned Judge erred in law, in her determination of qualified privilege and malice, when she misread and misunderstood (§96) Qadir v Associated Newspapers Ltd [2013] EMLR 15 [2012] EWHC 2606 (QB) as establishing the legal test of malice as “sole and dominant purpose to harm”, when that judgment said no such thing. What was decided in Qadir was that malice was, quite simply, the misuse of an occasion so that just pleading a litigant “misused the occasion” was a good enough plea of malice (§191, per Tugendhat J), and that on the facts there was malice (§256, per Tugendhat J).”

29.  The section on Qualified Privilege and Malice starts from §88 to 126 of the Judgment with the relevant legal principles stated in detail. §96 should not be read in isolation.

30.  Further, it is clear that P did not plead any particulars of malice in ASOC and no positive evidence of malice on the part of D1-D2 was present: §103-4. This Court was asked to find malice by inference from D1’s evidence, and no malice was found.

31.  I do not see that P has any reasonable prospects of success for this Ground.

Grounds 5-7

32.  These Grounds concern the sections on Breach of Confidence and Misuse of Private Information.

33.  Ground 5 reads:

“The Learned Judge erred in law, in her determination vis-à-vis the Plaintiff’s “breach of confidence” claim (§143 to §147), when she failed to realize the Plaintiff did identify the information in question in her ASoC (§31 & §32), and that D1-D2 had, by their Amended Defence (§14 & §21), admitted the 1^st February 2019 Email was “implicitly confidential”. The Learned Judge then made another error of law when she failed to consider or analyse whether D1-D2’s disclosure of confidential information (namely, the fact that there was a complaint against the Plaintiff, and the details of such a complaint) to Cyril Leung and Howard Poon was “unauthorized” in the sense as contemplated by the Court of Appeal in Shenzhen Futaihong Precision Industry Co Ltd & Ors v BYD Co Ltd & Others [2019] 2 HKC 175 (§85), and mixed up the concept of “unauthorized use” for the purposes of a “breach of confidence” claim with the test of “interest in receiving the words in question” for the purposes of a “libel” claim.”

34.  Ground 6 reads:

“The Learned Judge erred in law, in her determination vis-à-vis the Plaintiff’s “reasonable expectation of privacy”, by in effect suggesting since the Game itself was public, the fact of a complaint of sporting misconduct having been made against the Plaintiff must also be public (§150), when the correct position in law was the exact opposite – see, e.g., ZXC v Bloomberg [2022] 2 WLR 424 (§114 to §116, §140 & §146).”

35.  Ground 7 reads:

“The Learned Judge erred in law, in her determination vis-à-vis the Plaintiff’s “reasonable expectation of privacy”, by in effect suggesting since what was done on 25^th April 2019 was public, what was done on 1^st February 2019 (i.e., much earlier in time) must also be public (§151 to §155), when the correct position in law was the exact opposite – see, e.g., ZXC v Bloomberg [2022] 2 WLR 424 (§146). As of 1^st February 2019, the fact that the Plaintiff was under sporting misconduct investigation was private. Upon her conviction being widely published by the 3^rd Defendant on 25^th April 2019, that information had of course ceased to be private. The fact that a piece of information ceased to be private does not mean it was never private at any earlier point in time. The Learned Judge’s reasoning went into error, and was flawed, when she failed to appreciate there was a huge difference between the situation pre-conviction, and the situation post-conviction, on this issue.”

36.  As stated under §141-142 of the Judgment, P’s case is that Cyril Leung and Howard Poon should not be sent the 1 February Email.

37.  P did not identify information having the necessary quality of confidence about it nor has she shown how it was imparted in circumstances importing an obligation of confidence: §146 Judgment. P’s pleaded case is simply that Cyril Leung and Howard Poon were not “persons strictly necessary for determining the complaint”.

38.  As for the claim for Misuse of Private Information, no material facts are relied on apart from those pleaded under ASOC: §149 Judgment.

39.  These 2 heads of claims were non-starters.

40.  There are no reasonable prospects of success for these Grounds.

Ground 8

41.  Ground 8 reads:

“The above demonstrated, individually or cumulatively, that just like the situation in Leung Chi Ching Candy v Yeung Hon Sing [2021] 5 HKLRD 684 (§73 to §79, per Kwan V-P), irrespective of whether the Learned Judge had stated some of the relevant legal principles correctly or not, it was plain the Learned Judge failed to apply the relevant legal principles correctly, and there were flaws in her reasoning. As such, this is an appropriate case for the Court of Appeal to exercise its discretion to order a re-trial.”

42.  Given my decisions above, Ground 8 has no reasonable prospect of success.

Conclusion

43.  The proposed Grounds advanced by P are based on selective reading of the Judgment. There can be no ambiguity if the Judgment is read in full.

44.  As pointed out by Mr. Carolan, no challenge to the Court’s findings in respect of the witnesses’ testimony (§43-63, 71-72 & 81-82 of the Judgment) is raised.

45.  The proposed Grounds are unmeritorious and there are no reasonable prospect of success. I also do not see any other reason in the interests of justice that appeal should be heard.

46.  P’s Summons is therefore dismissed.

47.  There is no reason for costs of this leave application not to follow the event, which Mr. Lam conceded.

48.  I am asked to summarily assess costs by reference to the Statement of Costs submitted by D1-D2 on 27 March 2023.

49.  Mr. Carolan submitted that costs should be on indemnity basis as the Grounds advanced by P are devoid of any reasonable prospect of success and are fanciful.

50.  Also, as P has consented to costs of the action to be on indemnity basis, there is no reason why it should not be the same for the leave application by P.

51.  Apart from contesting that certain items in the Statement of Costs are excessive, Mr. Lam did not make any other submissions in relation to costs.

Indemnity Costs

52.  The Court of Final Appeal in Town Planning Board v Society of Protection of the Harbour Ltd (2004) 7 HKCFAR 114 held:

“16. The courts have rejected the proposition that an award of indemnity costs will only be made where a case has been brought with an ulterior motive or for an improper purpose or where there is some deception or underhand conduct on the part of the losing party.

17. In these and other cases, courts have emphasised the undesirability of attempting to define the circumstances in which orders for indemnity costs are to be made. It has been said that:

…... the discretion is not to be fettered or circumscribed beyond the requirement that taxation on an indemnity basis must be “appropriate”.

18. Neither statements of principle nor authority provide any support for the Board's proposition that the attributes of the parties and the character of the proceedings are irrelevant to the exercise of the discretion to award indemnity costs. In relation to the award of costs generally, it has been accepted, as Chu J pointed out, that while:

…... the grounds [upon which costs are awarded] must be connected with the case. This may extend to any matter relating to the litigation and the parties’ conduct in it, and also to the circumstances leading to the litigation, but no further.

(Scherer v Counting Instruments Ltd [1986] 1 WLR 615 at p. 621F, per Buckley LJ). There is no reason why this statement does not apply with equal force to the exercise of the discretion to award indemnity costs.”

(emphasis added)

53.  The above principles are summarized and further elaborated by the Honourable Lam J (as then was) in Cheung Wei Man Vivien & Chan Kim Thiam v Centaline Property Agency Ltd and Others, HCA 286/2000:

“The applicable legal principles on award of costs on indemnity basis are not in dispute. They are encapsulated in the judgment of the Chief Justice in Town Planning Board v Society for Protection of the Harbour Ltd (No.2)

(a) The discretion to award costs on indemnity basis is unfettered and is not limited to circumstances where a case has been brought with ulterior motive or for improper purpose or where there is deception or underhand conduct on the part of the losing party;

(b) In considering whether indemnity costs is to be awarded, the court may consider any matter relating to the litigation and the parties conduct in it and also circumstances leading to the litigation.

Further, conducts leading to unreasonable escalation of costs is a relevant factor to be taken into account, particularly when such conduct leads to substantial increase in costs. In Macmillan Inc v Bishopgate Investment Trust Ltd, Millett J (as he then was) referred to costs “incurred irrationally or out of all proportion as to what is at stake” (endorsed by the Court of Appeal in Sung Foo Kee Ltd v Pak Lik Co [1996] 3 HKC 570). Counsel also brought to this court’s attention other illustrations of award of indemnity costs by reason of unreasonable escalation of costs: Tonkin v UK Insurance (No.2) [2006] EWHC 1185 (TCC); NLA Group Ltd v Bowers [1999] 1 Ll Rep 109 at p.113.

It is also useful to remind ourselves what Simon Brown LJ said in Liam v MGN Ltd (No.2) [2002] 1 WLR 2810 at Paras.11 and 12 in considering whether the conduct of a losing party is so unreasonable so as to warrant an award of indemnity costs. In particular, at Para.12, His Lordship observed, “I for my part understand the court there to have been deciding no more than that conduct, albeit falling short of misconduct deserving of moral condemnation, can be so unreasonable as to justify an order for indemnity costs. With that I respectfully agree. To my mind, however, such conduct would need to be unreasonable to a high degree; unreasonable in this context certainly does not mean merely wrong or misguided in hindsight.”…”

(emphasis added)

54.  More recently, HH Judge KW Wong has succinctly summarized the principles for indemnity costs in Leung Wing Sze Wins & other v Li Oi Lam otherwise known as Sara Li & other, DCCJ-2022/2014 :

“49. The CFA’s decision in Town Planning Board (No. 2) (supra) remains the leading authority on how justice can be attained by awarding an indemnity costs. The principles have been referred to with approval in subsequent CFA decisions, e.g. Leung Chun Kwong v Secretary for the Civil Service [2019] HKCFA 34 and Commissioner of Inland Revenue v Poon Cho-ming, John [2020] HKCFA 2.

50. In the recent decision of Poon Cho-ming (supra), Hon Bokhary NPJ has helpfully distilled a summary of the propositions derived from of Town Planning Board (No. 2) (supra) at [4]:

“4. (a) In certain circumstances, costs may be awarded on a more generous than usual basis of taxation so as to achieve a fairer result.

(b) It is for the receiving party to show that the case has some special or unusual feature.

(c) Such features are not confined to an ulterior motive, an improper purpose, deception or underhand conduct on the part of the paying party.

(d) Neither the attributes of the parties nor the character of the proceedings are irrelevant to the question of whether a more generous than usual basis of taxation should be ordered.

(e) The discretion to order a more generous than usual basis of taxation is not to be fettered or circumscribed beyond the requirement that such taxation be ordered only when it is appropriate to do so.

(f) As to that, the grounds on which a more generous than usual basis of taxation is to be ordered must be connected with the case. That extends to - but no further than to - any matter relating to the litigation and the parties’ conduct in it, and also to the circumstances leading to the litigation.”

……

56. In Sung Fook Kee Limited (supra), the CA considered indemnity costs should appropriately be granted in cases with special or unusual features, including

(i) cases where there was deception or underhand conducts;

(ii) litigation that was ill-advised or stupidly or bitterly conducted;

(iii) cases conducted in such a way where a sense of considerable injustice could be felt if costs had been whittled away down to the costs on a standard basis;

(iv) cases brought with ulterior motive or for an improper purpose;

(v) cases conducted in bad faith or as a personal vendetta;

(vi) cases conducted in an improper or oppressive manner; and

(vii) cases that have caused costs to be incurred irrationally or out of proportion as to what is at stake.”

(emphasis added)

55.  Given my observation on the proposed Grounds above, this is an appropriate case to order costs on indemnity basis.

56.  Further, as highlighted by Mr. Carolan in his written submissions for variation of costs order, P's conduct in this litigation does qualify as “unusual” or “special” which warrants a more generous than usual basis of taxation.

Summary Assessment on Costs

57.  Having considered the Statement of Costs and the objections by P, I order costs to be paid by P to D1-D2, with Certificate for Counsel, summarily assessed at HK$100,000.00.