Chau Hoi Shuen, Solina Holly v. Seec Media Group Ltd

HCA 1194/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1194 OF 2010

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Before: Deputy High Court Judge Lok in Chambers

Date of Hearing: 30 July 2012

Date of Decision: 6 August 2012

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DECISION

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1.This is an application by the defendant for leave to adduce the witness statement of one Mr Wang Boming (“Mr Wang”).

BACKGROUND

2.The present action involves a claim for defamation which has been fixed for trial on 10 September 2012 with 4 days reserved.  The defendant only took out the summons for leave to adduce the said witness statement on 26 July 2012.

3.The alleged defamatory article (“the Article”) was published in a Mainland magazine known as “Caijing” (“the Magazine”).  The defendant’s case is that its involvement in the distribution of the Magazine was merely to prepare address labels and envelopes for Hong Kong and overseas subscribers, and that the defendant did not know that the relevant issue of the Magazine contained the words complained of, and did not know that that issue contained any libel, or was of a character likely to contain any libel, and such lack of knowledge was not due to any negligence on the part of the defendant.

4.The plaintiff does not accept this.  In the Reply, the plaintiff avers, inter alia, that:

(i)  the defendant was named as the “Hong Kong Distributor” of the Magazine;

(ii)  Mr Wang, who occupied a number of important positions both in the defendant and in the Magazine, knew or ought to have known that the relevant issue contained a libel, or was of a character likely to contain a libel.

5.On 18 February 2011, Mr Registrar Lung ordered the parties to exchange witness statements within 42 days after the inspection of documents.  On 24 August 2011, the defendant filed 2 witness statements including one made by Mr Li Shijie (“Mr Li”) who is the executive director of the defendant.

6.In Mr Li’s statement:

(i)  he gives an account about the corporate structure of the defendant;

(ii)  he gives information as to the background and profile of Mr Wang;

(iii)  he explains the operations of the Magazine, in particular the distinction between editors with editorial responsibilities, and honorary appointment of Mr Wang as the editor-in-chief;

(iv)  he explains that Mr Wang had never engaged in the daily management and operation of the Magazine; and

(v)  he testifies that the board of the defendant, including Mr Wang, did not have knowledge of the contents of the relevant issue of the Magazine at the material time.

7.On 15 September 2011, the defendant confirmed in its listing questionnaire that it had served all its witness statements and did not intend to take out any other interlocutory applications.  On 20 September 2011, the defendant’s solicitors wrote to the plaintiff’s solicitors seeking the plaintiff’s consent for the defendant to file additional evidence.  The reason given was that the defendant was advised by counsel that such additional evidence was required.  The defendant raised such issue again in the CMC on 21 September 2011, but it was not dealt with as the defendant had not provided any draft statement.

8.On 13 October 2011, the plaintiff’s solicitors wrote to the defendant’s solicitors to put on record that they had not heard further in respect of the defendant’s intended application to adduce additional evidence, and as such the plaintiff would proceed to set down the case for trial in accordance with the order of Mr Registrar Lung dated 21 September 2011. On 14 October 2011, the defendant’s solicitors replied, stating that the defendant would adduce additional witness statement and was preparing for the same.  The plaintiff’s solicitors replied on 20 October 2011, reminding the defendant that it had not yet obtained leave to adduce additional evidence.

9.The defendant then warehoused the issue until the same was revived at the PTR on 24 May 2012.  The main issue in that first PTR was whether the court should allow the defendant’s application to vary the mode of trial by having a trial with a jury, which I refused.  In that hearing, counsel for the defendant indicated that Mr Wang was prepared to make a witness statement and such statement would be ready in 28 days.  However, Mr Wang’s statement was only served on the plaintiff’s solicitors on 26 July 2012 which was shortly before the second PTR on 30 July 2012.

MERITS OF THE APPLICATION

10.Having considered all the circumstances of the case, I exercise the discretion against the defendant and refuse its application to adduce the witness statement of Mr Wang.  The reasons are two-fold:

(i)  there was substantial delay in the making of the application and no explanation has been given by the defendant as to why it could only obtain the witness statement of Mr Wang at such a late stage; and

(ii)  the trial date may be jeopardised as the plaintiff is entitled to carry out further investigation and to request the defendant for further discovery in respect of the new issues and matters raised in the witness statement of Mr Wang.

(i)  Serious and unexplained delay

11.It is clear from the background mentioned above that the defendant was aware of the need to adduce additional evidence since September 2011, and yet no explanation has been given as to why Mr Wang’s statement has not been produced until now, which is 10 months later and only 6 weeks before the commencement of the trial.

12.In the past, the courts have repeatedly emphasised that failure to file a witness statement within the prescribed timetable may lead to the exclusion of the evidence of that witness at the trial.  Although the court has a discretion to extend the time for the filing of additional witness statements, such discretion should be exercised sparingly and only upon good cause being shown.

13.The importance of a satisfactory explanation being provided by the party applying for an extension of time to file additional evidence was emphasised even before the CJR in Chan Wing Cheung, Allan v Ho Shu Yee Susana, unreported, CACV 393/2004 (decision on 10 January 2005), where Ma CJHC (as he then was) said at §9:

“(1) While it can be accepted that the Defendant will inevitably be prejudiced by not having witness statements admitted into evidence, the Judge had to balance this prejudice against the prejudice caused to the Plaintiff in allowing them in at this very late stage. The Plaintiff would be prejudiced by having to face an inevitable adjournment of a trial that had been fixed for hearing a very long time ago. This was recognised by the Judge, rightly in my view, as being sufficient to constitute serious prejudice.

(2) The predicament that the Defendant finds herself in is entirely of her own making. As I have already remarked, the question of the loans allegedly made to the Plaintiff (the main issue in this action) was one that must have been obvious to the Defendant since at least the pleadings stage. Despite having said (in the 4^th Checklist) that proofs were taken and that effectively she was ready for trial, the Defendant has waited until almost the last possible moment to introduce witness statements that contains substantial matters.

(3) It is a theme running through Mr Lam’s submissions that the only real prejudice suffered by the Plaintiff was one that could be compensated for in costs. I have real doubts about this submission. Quite apart from the fact that the Defendant is legally aided (so that the benefit of any costs order may be limited), the Defendant suffers the prejudice of not having the trial take place at the scheduled time. This is often overlooked when matters are adjourned.

(4)  In any event, where an indulgence is sought from the Court, it would be a rare case indeed that this would be given, even on terms as to costs, without a satisfactory explanation being given to justify the grant of the indulgence.  The fact that this represents in the present case the first time that an indulgence had been sought by the Defendant is neither here nor there.”

14.Although this case was decided before the CJR, many of the observations made by Ma CJHC are equally applicable in the present case, in particular: (i) the predicament that the defendant finds itself in is entirely of its own making; (ii) the importance of Mr Wang as a witness must have been obvious to the defendant since at least the pleadings stage and the defendant has waited until the last possible moment to introduce witness statement that contains substantial matters; and (iii) indulgence sought from the court should rarely be given unless there is a satisfactory explanation to justify the grant of the indulgence.

15.Mr Man, counsel for the defendant, submits that the case of Chan Wing Cheung, Allan can be distinguished because, unlike the facts in that particular case, there may not be an adjournment of the trial here.  However, if one reads §9(4) of the judgment of Ma CJHC, indulgence sought from the court should rarely be given for late application unless there is a satisfactory explanation, which should be the case irrespective of whether there is an adjournment of the trial.   It is common ground that the defendant has provided no such explanation in the present case.

16.In the post-CJR era, there is obviously a heightened concern to guard against late applications.  In Ip Sau Lin v Hospital Authority, unreported, DCEC 584/2007 (decision on 9 April 2009), the applicant filed his witness statement almost a year after the initial deadline without providing any satisfactory reason for the delay.  HH Judge M Ng warned that “disobeying court-imposed case management directions and timetable without good reason is not only breach of court order, which of itself is no light matter, but is also a serious subversion of the entire case management system envisaged by the CJR” (at §2).  It was also said that in cases of “serious delay without sound reason”, the court is likely to refuse an application for extension of time (at §12).

17.The defendant here did raise its intention to file additional evidence out of time in September 2011, and yet it sat on the matters for 10 months without pursuing it.  No reason has been given to justify the delay.  Whilst the importance of Mr Wang’s evidence must have been obvious to the defendant at a much earlier time, the defendant has waited until the last possible moment to introduce the witness statement of Mr Wang, and as a result the plaintiff would be put in a difficult position of hoping to keep the present trial date in September.  In my judgment, irrespective of whether the trial date would be jeopardised, the court should not grant indulgence to the defendant under such circumstances.

(ii)     Prejudice to the plaintiff and the possible adjournment of the trial

18.Furthermore, as there is now an additional witness in support of the defendant’s case and such witness has raised new issues and matters in his witness statement, the plaintiff is entitled to carry out further investigation and to request the defendant for discovery relating to such new matters.  This may jeopardise the trial date which is a milestone date, and an adjournment of the trial is a serious prejudice to the plaintiff (see: §9(3) of the judgment of Ma CJHC in Chan Wing Cheung, Allan v Ho Shu Yee Susana, supra).

19.Mr Man submits that the issues raised in Mr Wang’s witness statement, including the corporate structure of the defendant and the fact that Mr Wang himself had no knowledge of the contents of the Article, have already been mentioned in the earlier witness statement of Mr Li, and yet the plaintiff has not applied for further discovery in respect of these matters.  Hence, Mr Man says that the plaintiff has exaggerated the problem.

20.I disagree.  Despite that some of the issues in Mr Wang’s witness statement may have been referred to in the earlier statement of Mr Li, Mr Wang raises the following matters for the first time in his witness statement:

(i)  the history of the setting up of the Magazine, including the establishment of the Stock Exchange Executive Council (“the Executive Council”);

(ii)  Mr Wang is the president of the Executive Council;

(iii)  the role of the Executive Council in respect of the operation of the Magazine;

(iv)  the existence of the “Supervising Tier” to supervise the publication of the Magazine including the members of such tier, and the non-involvement of the “Supervising Tier” in the daily management of the Magazine;

(v)  details of the personnel responsible for the daily management of the Magazine;

(vi)  the detailed process in which each issue of the Magazine is written, edited and produced;

(vii)  the  various commitments of Mr Wang making it impossible for him to vet every article published in the Magazine; and

(viii)  his personal denial of the knowledge of the contents of the Article, including the fact that he was not in Beijing at the material time.

21.According to Mr Mok SC, counsel for the plaintiff, the plaintiff would require the following discovery from the defendant in order to deal with the new issues properly:

(i)  all internal documents and external publications regarding: (a) the setting up of the Executive Council and its rules and regulations; (b) the setting up and the functions and the operation of the editorial board; and (c) the duties and responsibilities of the editor-in-chief, vice-editors-in-chief and the editorial board;

(ii)  all agreements and other contractual documents entered into between the Executive Council on the one hand and each of the members of the “Supervising Tier” on the other;

(iii)  all internal documents and external publications concerning the duties and responsibilities of the “Supervising Tier”, the “editorial department”, the associate editors, news editors, managing editors and other editors;

(iv)  email exchanges and correspondence between Mr Wang and the other relevant personnel during 2010;

(v)  all agreement and other contractual documents entered into by Mr Wang regarding his roles as chairman and executive director of the defendant, the legal representative and editor-in-chief of the Magazine, the president of the Executive Council and director of one Shanghai SEEC Investment Development Co Ltd;

(vi)  all editorials and other articles written by or in the name of Mr Wang for the Magazine;

(vii)  personal diary of Mr Wang at the material time; and

(viii)  the travelling record of Mr Wang at the material time.

22.Further, the plaintiff would require some time after the inspection of the discovered documents to investigate the relevant facts and decide whether it is necessary for her to file further witness statements.  This would necessarily jeopardise the trial date which would now be less than 6 weeks away.

23.In my judgment, the plaintiff has not exaggerated the difficulty facing her in dealing with the new issues and matters raised in Mr Wang’s statement.  It is beyond doubt that Mr Wang is a more important witness, as he was the editor-in-chief of the Magazine at the material time and all the allegations of the knowledge of the contents of the Article are directed against him.  Whether he would be a witness for the defendant’s case would certainly have an impact as to how the plaintiff would prepare the case for trial.

24.The importance of Mr Wang’s evidence was obvious at the pleadings stage, and yet no action has been taken to adduce the evidence of Mr Wang until now.  Given the fact that the delay in adducing such witness statement is due to the fault of the defendant, the plaintiff should be given adequate and sufficient time to reconsider the conduct of the plaintiff’s case and the preparation of the trial.  The court should not disturb such right lightly as it is the defendant who has put her in such difficult position.

25.I agree that discovery of some of the documents such as the travelling record of Mr Wang would be quite straight forward, but the discovery of some other documents may take a great deal of time.  Coupled with the fact that time would be needed for the plaintiff to carry out consequential investigation, there is a real risk that the trial may have to be adjourned if the court were to grant the late application.

26.The defendant will inevitably be prejudiced by not having the witness statement of Mr Wang admitted as evidence.  However, taking into account the lack of explanation for the delay, the possible prejudice caused to defendant by not having adequate time to deal with the new evidence or the adjournment of the trial and the court’s duty to apply the underlying objectives laid down in O 1A of the RHC, the court should refuse the defendant’s late application for leave to adduce the witness statement of Mr Wang and I therefore so order.

27.I also make an order nisi that the costs of the application be to the plaintiff which shall be made absolute 14 days after the date of the handing down of this Decision.

Mr Johnny Mok SC & Ms Janet Ho, instructed by Vivien Chan & Co, for the plaintiff

Mr Bernard Man, instructed by Stevenson Wong & Co, for the defendant