NGAN CHIU YUNG v. JEAN FRÉDÉRIC BRION AND ANOTHER

HCA79/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 79 OF 2002

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J U D G M E N T

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Judgment HCA 79 of 2002

1. The 1st defendant applies under the inherent jurisdiction of the court for an order that the Action and all subsequent proceedings be stayed on the ground that Hong Kong is not the appropriate forum to hear the dispute between the parties. The 1st defendant originally applied for a declaration that the Court has no jurisdiction and in the alternative for a stay of proceedings. The former application is not proceeded with.

Background

2. This is an action by the plaintiff against the defendants for defamation. The Writ and Statement of Claim were issued on 8 January 2002.

3. The plaintiff is and was at all material times an employee of GMT Shipping (HK) Ltd ("GMT"), a company of which his father, Mr Bosco Ngan Man Sham ("Mr Bosco Ngan") is the managing director. The 2nd defendant is a Belgian company and the 1st defendant is a shareholder and its managing director.

4. GMT entered into a co-operative agreement dated 15 March 2001 with the 2nd defendant to provide shipping services. The plaintiff was seconded to the 2nd defendant, and was employed by the 2nd defendant at its offices in Antwerp pursuant to an employment contract dated 10 October 2000. On about 6 December 2001 Mr Bosco Ngan advised the 1st defendant that GMT intended to terminate its agreement with the 2nd defendant on three months' written notice.

5. The plaintiff avers that on learning of this, the 1st defendant told Mr Bosco Ngan that all GMT's employees seconded to the 2nd defendant would be expelled from the latter's offices, and in subsequent conversation defamed the plaintiff by saying "All Chinese are spies. All Chinese are thieves." The plaintiff avers that these words meant and were understood to mean that the plaintiff had been improperly gathering information about the defendants and had been dishonest and had stolen property from them.

6. The plaintiff further avers that on 10 December 2000 he received a letter of dismissal from the 2nd defendant's Director of Personnel which further defamed him by alleging that he had tried to take company confidential and commercial information on 6 December 2000. Then on 11 December 2000 he received a further letter from the 2nd defendant's legal counsel on the instructions of the 1st defendant which further defamed him by making the same allegation and alleging that he was initiating competitive activities and abusively using information acquired while working with the 2nd defendant. The letters were written in the Dutch language.

7. There is no averment in the Statement of Claim of publication of either of these letters to any person other than the plaintiff although it is pleaded that the first letter was delivered by a "gerechtsdeurwaarder" or bailiff. Whether that amounts to publication to the bailiff is not specified. However the plaintiff alleges that by reason of the defamatory statements his reputation has been injured and he will experience substantial difficulties in obtaining gainful employment in the shipping industry or elsewhere in the future.

8. It is to be noted that the Writ and Statement of Claim were served on the 1st defendant, a Belgian resident, on 9 January 2002 while he was in Hong Kong on a business trip. I understand that there is an application pending to serve a Writ out of the jurisdiction on the 2nd defendant. The plaintiff and another seconded employee of GMT have instituted proceedings in the Third Chamber of the Labour Court of Antwerp against the 2nd defendant alleging unlawful dismissal.

9. From the 1st defendant's affirmation it appears that the defendants are claiming that the plaintiff was part of a conspiracy by Mr Bosco Ngan, GMT and its employees to obtain confidential information from the 2nd defendant, to be used in another joint venture set up between GMT and a German shipping company. When Mr Bosco Ngan told the 1st defendant of his intention to terminate the joint venture agreement, the 1st defendant confronted him with these allegations of conspiracy and it was then agreed that the seconded employees of GMT including the plaintiff would leave the offices of the 2nd defendant the same day. It was after this that the plaintiff was found attempting to remove confidential files from the office. The plaintiff denies any such action, and he and his father deny the allegations of conspiracy. The 1st defendant denies having spoken the defamatory words ascribed to him. It appears that if this action goes forward the defendants will raise the defence of justification.

10. I would say at the outset that the plaintiff appears to face some difficulties in that he will have to show that any words spoken which were defamatory of "all Chinese" were specifically intended to refer to himself. He will also have to show that the letters were published to a third party or parties. What is however clear, and there is no dispute about it, is that if there was defamation, it took place entirely in Belgium. If the words were spoken they were spoken in Belgium, and if the letters were published they were published in Belgium.

Forum non Conveniens

"The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case my be tried more suitably for the interest of all the parties and the ends of justice."

Per Lord Goff of Chieveley in Spiliada Maritime Corporation v. Cansulex Ltd [1987] AC 460 at 476.

11. Commenting on that dictum, Hunter JA in Adhiguna Meranti (Cargo Owners) v. Adhiguna Harapan (Owners) [1987] HKLR 904 at 907-908, said as follows:

" Since Power, J. gave his decision, these principles had been re-stated by the House of Lords in Spiliada Maritime Corpn. v. Cansulex Ltd. [1986] 3 WLR 972 in the speech of Lord Goff. The court has now to answer a single question namely: 'Is there some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice' (p. 985G). Although this may no longer be necessary, per Slade, L.J. in Charm Maritime Inc. v. Kyriakou English Court of Appeal No. 659 of 1986, we still think it convenient for the purposes of analysis to view the problem at three separate stages namely:

(I) Is it shown that Hong Kong is not only not the natural or appropriate forum for the trial, but that there is another available forum which is clearly or distinctly more appropriate than Hong Kong (p. 986H). The evidential burden is here upon the applicant. The emphasis is upon 'appropriate' rather than 'convenient' because this is not simply a matter of practical convenience. The purpose is to identify the forum 'with which the action has the most real and substantial connection' per Lord Keith in the Abidin Daver [1984] AC 398. The principal factors are enumerated at p. 987D. Failure by the applicant at this stage is normally fatal.

(II) If the answer to (I) is yes, will a trial at this other forum deprive the plaintiff of any 'legitimate personal or juridical advantages'? (pp. 987F, 991-3). The evidential burden here lies upon the plaintiff (pp. 986A and 987G).

(III) If the answer to (II) is yes, a court has to balance the advantages of (I) against the disadvantages of (II), Abidin Daver per Lord Brandon at p. 419. Deprivation of one or more personal or juridical advantages will not necessarily be fatal to the applicant provided that the court is satisfied that notwithstanding such loss 'substantial justice will be done in the available appropriate forum' (p. 991H). The court must try to be objective (p. 991F). Proof of this, which can fairly be called the ultimate burden of persuasion, rests upon the applicant for the stay. By these means he establishes that on balance the other forum is more suitable 'for the interests of all the parties and the ends of justice'. This may be another way of saying that the plaintiffs' choice of forum has been shown to be so inappropriate as to deserve the pejorative description of 'forum-shopping' and to be restrained accordingly, cp. Lord Reid in The Atlantic Star [1974] AC 436."

Stage I

12. For the purposes of Stage I the 1st defendant must show that:

(a) Hong Kong is not the natural or appropriate forum for the trial, and

(b) there is another available forum (Belgium) which is clearly or distinctly more appropriate than Hong Kong.

13. As I have indicated, if the offending words were spoken they were spoken in Belgium and if the letters were published they were published there. Publication only occurs where and when the words are read or heard by the third party; Bata v. Bata [1948] WN 366 CA. If the tort was committed it was not committed in Hong Kong; therefore Hong Kong is not the natural or appropriate forum for the trial.

14. The plaintiff says that any loss to his reputation is or will be suffered in Hong Kong, because this is where, as a result of the defamation, he will be at a disadvantage in finding appropriate work. He relies in particular on Investasia Ltd v. Kodansha Co. Ltd [1999] 3 HKC 515, in which Findlay J held that if a plaintiff has a reputation in Hong Kong it is not right to tell him to go elsewhere to vindicate that reputation. No doubt this is so, but in that case there was publication both on the Internet and in magazines circulating in Hong Kong. It was in the light of those facts that His Lordship held at page 520H-I:

"The plaintiffs do not, by their statement of claim, expressly confine their action to the torts committed, and the damage sustained, in Hong Kong. But damage in Hong Kong in a libel case can flow only from a publication in Hong Kong. So, whether they say so or not, the plaintiffs are confined in their action to a tort committed in Hong Kong causing damage in Hong Kong."

15. The plaintiff argues that he will suffer loss in Hong Kong, because he is a Hong Kong resident and intends to carry on developing his career here. Though there is no specific evidence that he now resides in Hong Kong, he certainly has a Hong Kong Identity card and could no doubt seek work here if he wishes. But there is still no publication here. It is argued that there will inevitably be publication in Hong Kong because the plaintiff will have to explain to any prospective employer here why it was that the 2nd defendant dismissed him. In other words he will have to publish the defamation himself. In effect the argument is that there is a potential tort, which only the plaintiff can make actual, and his action in so doing will make the tort complete and actionable. This seems bizarre to me. The plaintiff's remedy must surely be the one he is taking for unlawful dismissal. If he wins his case he will be vindicated and can tell any potential employer so. If he loses, he will have to live with the Belgian court's decision and explain it as best he can. In the meantime there is nothing to force him to produce the letters to any potential employer. He can simply say that he was dismissed unlawfully and that the case is pending.

16. The next question is whether Belgium is clearly or distinctly a more appropriate forum than Hong Kong or in other words whether the action has the most real and substantial connection with that jurisdiction. That is where the defamation if any was committed. Per Ackner LJ in The Albaforth [1984] 2 Lloyd's Rep. 91 CA at 94:

".....the jurisdiction in which a tort has been committed is prima facie the natural forum for the determination of the dispute."

See also Goff LJ, ibid. at 96:

"If the substance of an alleged tort is committed within a certain jurisdiction it is not easy to imagine what other facts could displace the conclusion that the courts of that jurisdiction are the natural forum."

17. The plaintiff argues that both Bata and The Albaforth do not assist the 1st defendant because they were based on applications for service out of the jurisdiction. So was the Investasia case on which the plaintiff seeks to rely. I do not see what difference this makes. The principle is the same.

18. There are of course various other factors which indicate that Belgium is the natural forum. The torts if any were committed there; the lex loci delicti will apply. Witnesses and documents, particularly those on which the defendants will rely in their defence of justification are in Belgium. A trial in Hong Kong is likely to cost more than one in Belgium, because of the need to bring witnesses here, including experts on Belgian law. If the plaintiff obtains judgment it will have to be enforced in Belgium and this will necessarily involve further proceedings before the Belgian courts. Lastly, there are already proceedings before the Belgian Labour Court. Presumably in those proceedings the 2nd defendant will seek to justify the dismissal by bringing the same evidence which it and the 1st defendant would bring in support of the defence of justification. It is true that the plaintiff has produced an affidavit from a Belgian lawyer, Mr Vervaeke, who says that a claim for defamation does not need to be brought at the same time or in the same proceedings as a claim for wrongful dismissal. No doubt this is so, but in this sort of situation any sensible court in any sensible jurisdiction will no doubt order that the proceedings be joined or heard together, so as to avoid duplication of issues and the waste of time and costs.

19. Overall I cannot see that this case is any different from, let us say, a personal injury claim arising out of an accident in Belgium. If the 1st defendant had run the plaintiff down on an Belgian road, I do not think there is any question that the case would have to be brought in Belgium.

20. I am satisfied Hong Kong is not the natural or appropriate forum for the trial, and that Belgium which is clearly or distinctly the more appropriate forum.

Stage II

21. The next question is whether a trial in Belgium will deprive the plaintiff of any "legitimate personal or juridical advantages"? The evidential burden here lies upon the plaintiff. Now there is no particular evidence as to what personal or juridical advantages the plaintiff has, or will lose if the matter is tried in Belgium. It is argued that we do not know the costs implications, or whether a successful litigant can get his costs back in Belgium; but this is a matter on which the plaintiff himself should have brought evidence.

22. I think it must be accepted that the Hong Kong is the plaintiff's "home turf", and also that of his father who is his main witness. They have Hong Kong Identity Cards and while they may well have business interests which take them overseas, this is no doubt their home. The plaintiff can no doubt more easily conduct litigation here than overseas. It does not necessarily go further than that; litigation is no use unless it results in a judgment and a judgment is no use unless it can be enforced. At the same time of course the plaintiff and in particular his father obviously have a close connection with Belgium. The father, himself or through GMT, has been doing business there for some time and maintains an apartment there.

23. I am not sure that the advantage which the plaintiff has managed to gain by serving the Writ on 1st defendant as he passed through Hong Kong is entirely a legitimate advantage. As Lord Goff put it in Connelly v. R.T.Z. Corpn Plc. [1998] AC 854 at 873,

"In a case where the plaintiff has [founded jurisdiction on what may be described as an extravagant basis] for example by serving proceedings on an individual defendant while on a brief visit to this country, the court may not be prepared to assist him by refusing a stay to enable him to keep the benefit of an advantage available to him in this country."

Again I make the comparison with proceedings for personal injury. If a Hong Kong plaintiff, injured in Belgium, had only managed to serve proceedings on the Belgian defendant because of the latter's fortuitous visit to Hong Kong, I cannot see the court agreeing to let him keep the advantage thereby gained.

Stage III

24. I have to balance the advantages of Stage I against the disadvantages of Stage II. The question is whether substantial justice will be done in the available appropriate forum despite any loss of advantage to the plaintiff. Given my findings, particularly as to the lack of any connection between this matter and Hong Kong, I am satisfied that it will be and that on balance the Belgian forum is more suitable for the interests of all the parties and the ends of justice.

25. There will accordingly be an order in terms of the second paragraph of the 1st defendant's summons, with costs (nisi) to the 1st defendant to be taxed if not agreed.