Hong Kong Cable Television Ltd v. Television Broadcasts Ltd and Another

HCA1171/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.1171 OF 2005

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BETWEEN

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AND

HCA1256/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.1256 OF 2005

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BETWEEN

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(HEARD TOGETHER)

Before : Deputy High Court Judge Poon in Chambers

Date of Hearing : 13 February 2006

Date of Decision : 13 February 2006

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D E C I S I O N

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1.This is an application by the defendants to amend their defence.  The parts which are being objected to fall into two categories : (1) those dealing with the effect of the BA ruling; (2) those dealing with the right to bring an action under section 15(2) of the Broadcasting Ordinance.

2.It is opposed on the primary ground that my rulings in the July Decision and the December Decision constitute an issue estoppel preventing the defendants from raising them again in their defence for the purpose of the trial.  It is also opposed on the grounds that prejudice will be caused to the plaintiff which cannot be properly compensated by costs. 

3.I first look at the first set of proposed amendments.  They can be found in paragraph 6(3)(a) to (c) of the proposed amended defence in the first action, and paragraphs 6(3), 7(3) and 16(4) of the proposed amended defence in the second action.  In brief, the defendants try to raise a plea of res judicata and/or an abuse of process on the part of the plaintiff to run a case contrary to the findings made by the Broadcasting Authority in the BA ruling.

4.In the July Decision I dealt with the court’s jurisdiction to hear and determine a claim for breach of the firewall provisions under section 15 of the Broadcasting Ordinance.  It was a ruling on the court’s jurisdiction and did not touch upon the effect of a ruling by the Authority on the question of breach of those provisions.  It therefore follows that the plaintiff cannot rely on the July Decision to oppose this set of proposed amendments. 

5.In the December hearing, the defendants sought to adduce as evidence the BA ruling to prove that there was no breach of the relevant licensing condition on the part of TVB.  They argued that it constituted a material change of circumstances that would justify the discharge of the interim injunction.  And my ruling is that the BA ruling, being no more than opinion evidence, is not admissible to prove that there was no breach, but it was admissible to prove that the Authority did make such a ruling.

6.I made no ruling whatsoever whether or not the BA ruling, if admitted, would constitute any issue estoppelor res judicata for the simple reason that no argument had been advanced by the defendants to support such a proposition. 

7.Res judicata in the wider sense means that the court requires the parties to the litigation to bring forward the whole case and will not, except under special circumstances, permit the same parties to open the same subject matter of litigation in respect of matters which might have been brought forward as part of the subject in context, but which was not brought forward only because they have from negligence, inadvertence or even accident omitted as part of their case : See Ray Chen v. Anita Wan Ching Lam & Johnson, Stokes & Master, HCA4582/2001, 9 May 2002.

8.I accept the submission that the contention that BA ruling would constitute an issue estoppel or res judicata ought to have been raised in the December hearing.  Prima facie, the res judicata principle in the wider sense applies.  But that principle is always subject to special circumstances.  As I have demonstrated in the July Decision, under the Broadcasting Ordinance, there may be an overlap of the Authority exercising its statutory duties in monitoring the performance of the licence by the licensee on the one hand, and the court exercising its judicial function in hearing and determining whether or not a licensee has acted in breach of its licence on the other.

9.It is reasonably foreseeable, as in the present case, that the Authority and the court may have to deal with the same parties in connection with the same subject matter at the same time.  How a ruling by the Authority would impact the pending proceedings where the court is asked to determine the same subject matter is no doubt an important question.  It is important to the parties then appearing before the court.  I would also venture to suggest that it is important to the general public in that how the Ordinance is to operate in this particular area, where both the Authority and the court have a role to play, should be clarified.

10.My ruling in the December Decision only dealt with one aspect of the legal effect of the BA ruling in the pending court proceedings.  I ruled that it is inadmissible to prove that there was no breach but admissible only to prove that the Authority had come to that conclusion.  I did not go on to deal with the question of issue estoppel or res judicata.  For my part, I think a determination by the court on that question made after fuller submissions and mature consideration is plainly desirable.  So I will rule that there are special circumstances that would justify a departure of the strict application of the res judicata principle in the wider sense. 

11.Further, I do not think the plaintiff will suffer any prejudice as alleged.  In the absence of any ruling by me on the question that the BA ruling will constitute an estoppel or res judicata, no inconsistent ruling will arise at trial.  I will therefore allow the first set of proposed amendments.

12.I then turn to the second set of the proposed amendments.  They can be found in paragraph 13(5)(b) of the proposed amended defence in the first action, and paragraph 18(3)(b) of the proposed defence in the second action. 

13.The proposed plea is to raise an allegation that no cause of action would accrue under section 15(2) of the Broadcasting Ordinance in the absence of the determination by the Authority on section 13(1) and section 14(1).  The plea does not deal with jurisdiction of the court in hearing and determining a claim brought under section 15(2).  It deals with the question whether a cause of action is established in the absence of such a finding by the Authority.  In other words, my ruling on the court’s jurisdiction in the July Decision is not relevant.  I can see no prejudice that the plaintiff may suffer if the amendment is allowed.

14.I therefore come to the conclusion that without prejudice to the interim injunction that I have granted, both sets of the proposed amendments ought to be allowed.  Unless the parties would have anything to say on the terms of the orders to be made, I would make an order in terms of the two summonses.

(Submission on costs and terms of order)

15.Today’s hearing is necessitated by the plaintiff’s opposition of the proposed amendments.  Since the plaintiff has lost they should bear the costs in any event.  As to the general costs of the proposed amendments the normal rule would apply.  So the costs order that I propose to make is that costs of the application, including the costs of an occasion by the proposed amendment will be to the plaintiff in any event, save and except the costs of the hearing today will be to the defendants in any event.  That will apply to both summonses.  There will be an order in terms of the summonses as amended.

Mr Lewis Ho of Messrs Lovells, for the Plaintiff

Mr Kevin Yam of Messrs Herbert Smith, for the 1^st and 2^nd Defendants