LIU, PEIBAO v. TENCENT HOLDINGS LTD

[English Translation – 英譯本]

CACV 213/2024, [2025] HKCA 267

On appeal from: [2024] HKCFI 1158

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL APPEAL NO 213 OF 2024

(ON APPEAL FROM HCA NO 229 OF 2023)

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JUDGMENT

Hon Cheung JA (giving the Judgment of the Court):

I.  Appeal

1.  This is an appeal of the plaintiff against the decision made by Deputy High Court Judge Kent Yee on 17 May 2024.

II.  Background of the case

2.  On 13 February 2023, the plaintiff filed a writ of summons to make the following claims against the defendant:

“1. The defendant be injuncted from hindering or obstructing the plaintiff in exercising his right to freedom of speech through Weixin under the Constitution of the People’s Republic of China;

2. The defendant do tender an apology to the plaintiff;

3. The defendant do pay the plaintiff damages for mental distress in the sum of RMB 227.81 million;

4. The defendant do pay costs of this action.”

3.  On 14 June 2023, the defendant filed a summons praying that Hong Kong courts should not exercise any jurisdiction they might have in the present case and seeking an order of stay of the plaintiff’s action. These are the grounds advanced by the defendant:

“a. In light of the best interest of and the convenience to the parties and their witnesses, the claim should be heard by the courts of Nanshan District, Shenzhen City, Guangdong Province of the People’s Republic of China; and

b. The principle of forum non conveniens does apply because the courts of Nanshan District, Shenzhen City, Guangdong Province of the People’s Republic of China are clearly and distinctly the more appropriate forum to determine the present claim;”

4.  By its summons, the defendant also asked the plaintiff to provide security for costs.

5.  The plaintiff filed a summons on 12 October 2023, applying to the court for dismissal of the defendant’s summons dated 14 June 2023.

6.  On 15 January 2024, High Court Master S P Yip made the following orders:

1)  The court, pursuant to Order 18, rule 19 of the Rules of the High Court (“the Rules”), of its own motion, ordered that the Statement of Claims and Writ of Summons filed with the court by the plaintiff on 13 February 2023 be struck out on the ground that the said Statement of Claims is frivolous and vexatious and is an abuse of the court process;

2)  The present action brought by the plaintiff against the defendant be dismissed;

3)  No order be made on the defendant’s summons;

4)  The plaintiff’s summons dated 12 October 2023 be dismissed;

5)  The plaintiff do forthwith pay the defendant the costs (including the costs of today’s hearing) of the present action, to be summarily assessed at $147,000; and

6)  The defendant’s solicitors shall draw up this order in Chinese, and file and serve it on the plaintiff. (underline added)

7.  The plaintiff and the defendant appealed against Master Yip’s orders respectively. Their appeals were heard and dismissed by Deputy Judge Yee. The plaintiff then lodged an appeal again with this court against the order of Deputy Judge Yee. The defendant, however, did not seek to appeal against Deputy Judge Yee’s dismissal of its appeal. Upon the defendant’s application, I directed that its attendance in the present appeal hearing be excused.

8.  The plaintiff, a Mainland resident, was a user of the mobile application Weixin. The plaintiff alleged that he had been prevented or restricted by the defendant from sharing certain posts on Weixin Moments. Weixin offered various services including instant messaging and social media features. Weixin Moments was one social networking feature within the Weixin application. The plaintiff alleged that the defendant had violated the Constitution of the People’s Republic of China by preventing him from exercising his right to freedom of speech through Weixin. He also alleged that the defendant had violated the relevant provisions regarding freedom of speech under the Hong Kong Bill of Rights Ordinance (Cap 383).

9.  The defendant was a company incorporated in the Cayman Islands operating as an investment holding company. The defendant itself has never commenced any business. The operations of Weixin were conducted by Shenzhen Tencent Computer Systems Company Limited (“Tencent Computer”). Tencent Computer was a company incorporated in the Mainland and controlled by the defendant through a series of contractual arrangements. Tencent Computer carried out its business in the Mainland and not in Hong Kong. Its employees generally performed their duties in the Mainland. Its records were generally kept in the Mainland. According to the latest Agreement on Software License and Service of Tencent Weixin between Weixin users and Tencent Computer published on the website of Weixin, the terms of the agreement should be governed by the laws of the Mainland. Any dispute arisen between Weixin users (including the plaintiff) and Tencent Computer shall be submitted to the jurisdiction of the Shenzhen Nanshan Court.

10.  Deputy Judge Yee concurred with the decision of Master Yip. Deputy Judge Yee was of the view that the plaintiff had mistakenly lodged a claim against the defendant who was not the proper party to the action. All evidence supported the fact that the proper party to the action is Tencent Computer. While it was true that the defendant and Tencent Computer were in a parent-subsidiary relationship, they were separate legal entities in law. As Tencent Computer was not the agent of the defendant, the latter was not required to be liable for the wrongdoings of Tencent Computer as alleged by the plaintiff. Deputy Judge Yee pointed out that the defendant applied for a stay of the plaintiff’s action in Hong Kong by reason of forum non conveniens. However, since the plaintiff’s claim had already been struck out under the Rules, the court did not need to deal with the defendant’s application.

III.  Grounds of appeal

11.  The plaintiff, in his Supplementary Notice of Appeal, sets out a number of grounds of appeal, two of which directly concern the dismissal of his appeal by Deputy Judge Yee:

“1) The decision and order made on 17 May 2024 in the name of Deputy Judge Yee are not in conformity with the relevant rules.

2) As to whether the defendant is an eligible one to be sued, there is sufficient and overwhelming evidence ‘to prove that Weixin is operated by the defendant’, thereby meeting the standard for the plaintiff to have the judgment. In relation to confirming that Shenzhen Tencent Computer Systems Company Limited does not have legal personality, so far as the present case is concerned, the defendant only owes the duty of discovery, and the plaintiff has to establish the applicable law. There is just no question that the prospect of success is slim.”

IV.  Our views

12.  The defendant’s first ground of appeal comprises of the following seven points:

1)  Deputy Judge Yee did not hand down his decision dated 17 May 2024 in open court, and his clerk did not have the power to give decision or order on behalf of the court. The decision dated 17 May 2024 did not bear either Deputy Judge Yee’s signature or the seal of the court, and in such circumstances, the said clerk did not have the power to hand down the said decision on behalf of the court.

2)  Deputy Judge Yee did not pronounce his orders in open court and, therefore, the solicitors acting for the defendant had nothing to base on in drawing up the draft order dated 17 May 2024.

3)  The plaintiff does not believe that the decision dated 17 May 2024 expresses Deputy Judge Yee’s views. It is against the rules for an officer of the Judiciary, who was not involved in the hearing, to hand down the decision on behalf of the court.

4)  Order 18, rule 19 is merely applicable to pleadings or indorsements. It is plainly wrong to strike out a “writ” pursuant to this rule.

5)  In this action, the defendant has not filed its reply or defence. While the issues between the parties remain uncertain, the present case has yet come to the stage of adducing evidence.

6)  Under Order 18, rule 7, what is pleaded in a statement of claim must be facts but not evidence. At this stage of the proceedings, the plaintiff is under no obligation to provide evidence. However, the main reason given in the decision dated 17 May 2024 was that the plaintiff failed to adduce any evidence to prove that the defendant was an eligible subject. In fact, the evidence that the defendant is an eligible party to be sued has reached the extent for the plaintiff to have the judgment.

7)  The master struck out the plaintiff’s claim of his own motion, thereby going against the cost-effectiveness of the practice and procedure established by the Rules of the High Court, which should be followed, and thus has violated the provision under Order 1A, rule 3.

13.  We do not accept the seven points detailed in the plaintiff’s 1^st ground of appeal. First of all, it is not necessary for a judge to pronounce or hand down a judgment in open court personally, and the judge only needs to provide copies of the judgment to the parties. As a usual practice of the court, the judge’s clerk will either hand out copies of the judgment to the parties in the courtroom or send the same to them by post. Secondly, the copies of the judgment given to the parties are not required to have the judge’s signature; only the original, which is to be kept on court file, must be signed by the judge for confirmation. Both the copies given to the parties and the original are legally valid: see Order 42, rule 5B (1) to (5) of the Rules of the High Court, Cap 4A (“the Rules”). Furthermore, every order of the court must be drawn up; the party making the application is obliged to draw up the order made by the court and present it, and if that party fails to present the drawn-up order within 7 days after the order is made, the other party affected by the order will be entitled to draw it up: see Order 42, rule 4(1) and rule 5(5) to (6) of the Rules. Additionally, the court has the power to direct one of the parties to draw up the order, especially in cases where the other party is not legally represented. The plaintiff’s allegation that Deputy Judge Yee is not the author of his decision is totally speculative and unsupported by facts.

14.  Master Yip has conformed to the legal principles in striking out the plaintiff’s claim of his own motion. Under Order 1A, rule 1 and rule 2 of the Rules, the court, in exercising any of its powers, shall seek to give effect to the underlying objectives of the Rules:

“(a) to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court;

(b) to ensure that a case is dealt with as expeditiously as is reasonably practicable;

(c) to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings;

(d) to ensure fairness between the parties;

(e) to facilitate the settlement of disputes, and

(f) to ensure that the resources of the Court are distributed fairly.”

15.  It is also provided in Order 1A, rule 4 of the Rules that the court shall further the underlying objectives of these rules by actively managing cases, which includes:

“(c) deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others”

16.  It is further provided in Order 1B, rule 2 of the Rules that the court may exercise its powers on an application or of its own motion.

17.  In our view, Master Yip and Deputy Judge Yee clearly understood the legal principles regarding necessity of active case management and the court’s exercise of its power of its own motion. The evidence before this court clearly shows that the defendant and Tencent Computer are two separate legal entities. The defendant is not operating the business of Weixin and thus not a proper party to the action. The plaintiff has failed to adduce any evidence to prove the contrary in this regard. The plaintiff has improperly commenced legal proceedings against a wrong defendant. Should the case be allowed to carry on, it would not only waste court resources but also do injustice to the defendant who should not have been sued in the first place. Under such circumstances, the plaintiff’s claim has constituted “frivolous or vexatious and an abuse of the process of the court” under Order 18, rule 19 of the Rules. Therefore, the court’s decision to strike out the plaintiff’s claim of its own motion is proper. The plaintiff’s grounds of appeal and submission only repeat his points of view, which have already been raised at trial. He cannot identify any mistake in the decisions of Master Yip and Deputy Judge Yee.

18.  The plaintiff also complained that the defendant’s conduct in the proceedings was malicious. Nevertheless, the defendant’s stance throughout was that the Hong Kong courts should not exercise their jurisdiction in the present case, and it did not take any steps in the proceedings which may possibly be regarded as submitting itself to the jurisdiction of the Hong Kong courts, including taking the initiative to issue a summon for striking out the plaintiff’s claim. This is acting in a prudent and appropriate manner in litigation, and is by no means malicious as asserted by the plaintiff.

19.  For the foregoing reasons, the second ground of appeal also fails.

V.  Conclusion

20.  We dismiss the plaintiff’s appeal and make no order as to costs.

Translated by the Court Language Section of the Judiciary and vetted by Ms Jenny Chung, Solicitor.