Kwok v Thang

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

4161/99 - KWOK FU SHING v DAVID LY TIEN (THIEN) THANG & 1 OR

1 HIS HONOUR: The plaintiff is a pop star well known in Chinese-speaking communities as Aaron Kwok. He has won many prizes and is a celebrity. He toured Australia in April 1999, staying at the Sydney Casino Hotel and subsequently, a hotel in Melbourne. 2 After a performance in Sydney he met the defendants in a lounge at his hotel. The second defendant introduced the first defendant as her 'sworn younger brother'. The evidence indicates that both defendants reside in New South Wales. 3 The plaintiff struck up an immediate friendship with the second defendant and had conversations with her including a three hour telephone call before he left for Melbourne. When he told her that he was flying to Melbourne, she suggested that she meet him there and he agreed. 4 On 5 April 1999, the day upon which he was due to return to Hong Kong, he and the second defendant were in contact and she invited him to her hotel room to 'have a chat'. His evidence is that after entering the hotel room he talked with the second defendant. He could not see anyone else in the room and noticed nothing unusual. The second defendant gave him a teddy bear as a gift. He said they then embraced, touched and kissed each other intimately, but they did not remove their clothing. He stayed in the hotel room for about 45 minutes. 5 They were interrupted by a phone call, evidently from the first defendant. After that call the second defendant told the plaintiff that the first defendant was her boyfriend. The plaintiff says he was confused and upset, and felt he had been cheated, and that he said to her 'You are completely free. You have the right to choose a boyfriend'. 6 The plaintiff left the room and encountered the first defendant outside the room. They had a conversation in which he said, 'I don't want to be a third party in a relationship'. The plaintiff says that when he went to the second defendant's hotel room he believed that the second defendant would not reveal their intimate discussions and conduct to anyone and they would be alone. 7 On 2 September 1999 a reporter from the Oriental Daily in Hong Kong called the plaintiff's manager, Leung May-May, telling her that he had been approached to purchase a videotape showing a meeting of the plaintiff and a girl in an Australian hotel room, and that the price would be AUD 20,000. The reporter went to Sydney and viewed the videotape, but did not buy it. 8 On 3 September 1999 an article appeared in the Oriental Daily. An English translation is in evidence. The headline was 'Aaron Caught with Girl in Australia Hotel Room'. The article reported in some detail on the contents of the tape. In particular, it said as follows: 'The reporter then asked to see the playback. The first tape showed Aaron's trip in Australia and was dated 9/4/99. On seeing the second tape, he confirmed that the male in the video is Aaron Kwok. With him is the long-haired girl. Aaron was sitting on the sofa with a soft toy by the side while the long-haired girl was sitting on the bed. They looked like any couple who is talking intimately. Aaron later took off his shoes and socks, both looking extremely comfortable. Ten minutes later Aaron walked toward the bed and sat side by side with the girl. He looked at her and had his hands on her shoulder while he talked. Aaron was seen as gentlemanly and there was no indecency. Aaron also touched her hair and rested his head on her stomach. Aaron was also reported as kissing the girl on the face and mouth, touching her breasts and thighs. After they started to embrace they danced. Later they left the room together.' 9 Subsequently, reporters told Ms Leung that the man who wished to sell the video was planning to sell it to Asian Television Limited or publish it on the Internet. Ms Leung told the plaintiff that this would destroy his name and reputation completely. There followed protracted negotiations between Ms Leung and the seller, eventually identified by her as 'David', and asserted by the plaintiff to be the first defendant. I regard it as likely on the balance of probabilities, on the evidence before me, that this is true. 10 David asked for a big press conference in Hong Kong in which the plaintiff would 'apologise' to him, and also asked for an escalating amount of cash, which by 27 September 1999 had become USD 1 million, for the destruction of the tape. No agreement was reached. David insisted that the police not be contacted, but in fact they were approached by Ms Leung and investigations were conducted in Hong Kong and Sydney. 11 Somewhat inconsistently with his offer to destroy the videotape for money, David said he wanted to destroy the plaintiff's name and reputation completely, and to punish him and to teach him a lesson. 12 The evidence shows that New South Wales and Victorian police conducted investigations into the matter in September 1999, liaising with the Hong Kong police. The Hong Kong police urged Ms Leung to persuade David to come to Hong Kong so they could arrest him. He agreed to meet her in Hong Kong but later he changed his plans. The defendants were interviewed by the New South Wales police in Sydney on 30 September 1999, but they asserted their right to remain silent and no charges were laid. 13 The plaintiff says that he is very distressed about David's phone calls, and that in his experience of the Chinese pop music industry a wholesome, clean public image and reputation are extremely important for success. He says that should a video recording of his meeting with the second defendant in her hotel room be made available to the public, he would suffer great damage to his reputation and career, both in Hong Kong and around the world. Ms Leung agrees. There is no other evidence on this subject. It may appear implausible to a Western mind that such damage would flow from publication of the tape, given the newspaper article published in Hong Kong on 3 September and the evidence as to what actually occurred in the hotel room. However, it is appropriate to infer from the only evidence before the Court that to a Chinese mind the matter would be viewed differently and, on that basis, I accept the plaintiff's evidence.

The Proceedings 14 The Statement of Claim filed on 30 September 1999, an amendment to which was foreshadowed at yesterday's hearing, seeks relief on five grounds. 15 First, it is alleged that the defendants committed a breach of confidence, on the basis that the second defendant's invitation to the plaintiff to visit her hotel room, to the knowledge of the first defendant, implied an occasion of confidential communication between them, and the making of the videotape and the threatened dissemination of it to the media would constitute an actionable breach of that duty. 16 Secondly, the plaintiff alleges deceit, on the basis that there was an implied representation of privacy by the second defendant when she invited the plaintiff to her hotel room, to the knowledge of the first defendant, and that the steps taken by them to arrange for the video-taping of the encounter were conscious and fraudulent steps, and that the plaintiff has suffered or will suffer damage. 17 Thirdly, the plaintiff relies on what his counsel calls 'the innominate tort of intentional and wilful action designed to make financial gain for the defendants at the expense of the plaintiff'. 18 Fourthly, the plaintiff relies on the Court's jurisdiction, limited though it may be, to grant an injunction to restrain the commission of an offence. In this case the offence is under the Listening Devices Act 1969 (Vic) which, though subsequently repealed, was in force at the relevant time. Section 4 of that Act states that a person shall not use any listening device to record any private conversation to which he is not a party, nor communicate the substance of any private conversation recorded by the use of a listening device, without the express or implied consent of the parties to the private conversation. Section 7 states that where a record of a private conversation recorded by the use of a listening device is made by a person who is not a party to the private conversation, then (relevantly) the person must forthwith destroy the record. 19 Fifthly, the plaintiff says that the threats made by the first defendant, to the knowledge of the second defendant, to release the tape if he did not make a substantial payment constituted the tort of intimidation. R P Balkin and J L R Davis Law of Torts (2nd ed, 1996) say (at 618): 'The essence of the tort of intimidation is that the defendant has, by threat to commit an unlawful act, coerced another person into acting in a way in which the latter did not wish to act, the defendants having thereby intended and caused economic damage to the plaintiff.'

The plaintiff says that the acts where unlawful because they were tortious and in breach of confidence. 20 By Notice of Motion filed on 30 September 1999 the plaintiff sought orders of three kinds, namely, an interlocutory injunction to restrain copying or dealing with the videotape; an order for delivery of all copies of the videotape in the defendants' possession; and an order for disclosure by affidavit of whether there are copies and where they are. 21 On that day I made an ex parte order granting relief of the first kind, namely, an ex parte injunction to restrain the defendants from copying and dealing with the videotape. When the matter returned to me yesterday after the defendants had appeared on the previous day and I had granted a short adjournment, the plaintiff sought continuation of the injunction and orders for disclosure of the existence and location of all copies of the videotape, subject to arrangements to permit the defendants to assert their privilege against self-incrimination. The defendants opposed the granting of further relief of either kind. These are the applications with which I must now deal.

Questions for Determination in an Interlocutory Application 22 As I shall show, this application involves some unsettled law as well as disputed facts. In such a case, McLelland J's observations in Kolback Securities v Epoch Mining NL (1987) 8 NSWLR 533, 535 are helpful. His Honour said: 'Where a plaintiff's entitlement to ultimate relief is uncertain, the Court, in deciding to grant or refuse an interlocutory injunction, must consider what course is best calculated to achieve justice between the parties in the circumstances of the particular case, pending the resolution of the uncertainty, bearing in mind the consequences to the defendant of the grant of an injunction in support of relief to which the plaintiff may ultimately be held not to be entitled, and the consequences to the plaintiff of the refusal of an injunction in support of relief to which the plaintiff may ultimately be held to be entitled... Where the uncertainty depends in whole or in part on a contested question of fact it is not appropriate for the Court to decide that question on the interlocutory application. Where the uncertainty depends in whole or in part on a contested question of law, it may or may not be appropriate for the Court to decide that question on the interlocutory application, depending on circumstances, eg, whether the question is novel or difficult, or is susceptible of resolution on the present state of the evidence, or whether the urgency of the matter renders it impracticable to give proper consideration to the question...Unless the plaintiff shows that there is at least a serious question to be tried which if resolved in its favour would entitle it to final relief, then the requirements of justice as between the parties will dictate that an interlocutory injunction should be refused.' 23 In the present case it would be unwise for me to determine unsettled questions of law given the limited time which has been available for argument and consideration of the issues. I shall assess the legal issues as part of my determination of the question whether there is a serious question to be tried. 24 As to the second matter to be considered on an interlocutory application, namely, what is sometimes called 'the balance of convenience', Sir John Donaldson MR made some pertinent observations in a case, the facts of which were not entirely dissimilar from the present case. In Francome v Mirror Group Newspapers [1984] 1 WLR 892, 898 his Lordship said: 'It is sometimes said that this involves a weighing of the balance of convenience. This is an unfortunate expression. Our business is justice, not convenience. We can and must disregard fanciful claims by either party. Subject to that, we must contemplate the possibility that either party may succeed and must do our best to ensure that nothing occurs pending the trial which will prejudice his rights. Since the parties are usually asserting wholly inconsistent claims, this is difficult, but we have to do our best. In so doing, we are seeking a balance of justice, not of convenience.' 25 In the present case I must balance the position of the defendants if they are left to rely upon the plaintiff's undertaking as to damages against the risk to the plaintiff if relief is not granted. The application of that balance must be made both to the continuation of the injunction and to the disclosure order. On both matters it is relevant that there is no suggestion that the plaintiff would be unable to make good his undertaking as to damages if it is validly called upon - indeed, the evidence indicates he will be well able to do so - and also relevant that on the only evidence before the Court, dissemination of the videotape would cause substantial damage to him.

The Defendants' Submissions 26 The defendants' first submission is that the plaintiff's essential complaint was as to invasion of privacy. They say that the claim based on breach of confidence was faulty for a number of reasons. One was that there was no significant or reliable evidence of any relationship between the plaintiff and the second defendant apart from the plaintiff's own affidavit, and that affidavit indicates that the relationship was a transitory one which had not been established in any significant way before the incident in the hotel room occurred. That incident, say the defendants, is merely a 'kiss and tell story'. They submit that the substance of the video is not revealing or damaging. 27 They say that cases on breach of confidence normally concern trade secrets or commercial information, and cases involving private relationships, to the extent that they apply the doctrine of the breach of confidence, are distinguishable from the present facts because of absence here of any longstanding relationship of the kind which would import an obligation of confidence. 28 The defendants say that the plaintiff was simply naive to believe there was any obligation of confidence on the second defendant's part. Further, the defendants say that any possible obligation of confidence was destroyed by the public dissemination of the information of the contents of the videotape in the newspaper article of 3 September 1999. 29 Remembering that my task today is simply to address whether there is a serious question to be tried and the balance of convenience, I reject the defendants' submissions as to breach of confidence. In the first place, my finding of fact as to the risk of damage to the plaintiff implies that I cannot dismiss the incident as merely a 'kiss and tell story'. Nor can I conclude that, because the substance of the video does not appear to be particularly embarrassing or revealing, the plaintiff has no legitimate complaint on the ground that its disclosure breaches a confidence. 30 I reject the submission that the law of breach of confidence requires, where the relationship is a private rather than a commercial one, that the relationship must be longstanding in order to import something of confidentiality. Naturally enough, if the relationship is longstanding and intimate the prospects of importing the requisite obligation are enhanced, but even a fresh, short-lived relationship can cause the obligation to arise. 31 In Hellewell v The Chief Constable of Derbyshire [1995] 4 All ER 473, 476 Laws J said that he entertained no doubt that disclosure of a photograph may, in some circumstances, be actionable as a breach of confidence. He said that if someone with a telephoto lens were to take from a distance and with no authority a picture of another engaged in some private act, his subsequent disclosure of the photograph would as surely amount to a breach of confidence as if he had found or stolen a letter or diary in which the act was recounted and proceeded to publish it. 32 It is not necessary for me to adjudicate on whether his Lordship's expression of legal opinion requires some qualification. It is sufficient to say that there is a plausible ground for the plaintiff's contention. 33 Finally, as to the contention that publication of an account of the contents of a videotape in a Hong Kong newspaper destroyed any obligation of confidentiality, I refer to the chapter by Ms Jennifer Stuckey-Clarke in Patrick Parkinson (ed), The Principles of Equity (1996) at 436-437 and the cases there cited. Where information has been published on a non-confidential basis generally, it cannot be treated as confidential. But a prior transitory publication of information, which may not be remembered or discovered by all of those who would be interested in it, does not necessarily defeat an obligation of confidentiality, where what is sought to be restrained is a more permanent and enduring form of disclosure. Consequently, in my view, the publication of a verbal account of the contents of the videotape in Hong Kong would not prevent the plaintiff from enjoining the defendants from making the videotape available for viewing in a public way such as by release on the Internet. 34 As to the claim based in deceit, the defendants submitted that the plaintiff became aware of the first defendant's presence immediately after the meeting in the hotel room, and probably before, as a result of the telephone conversation received by the second defendant in the room. The defendants point out the plaintiff did not seek any assurance or say that he felt compromised, but merely said that he did not want to be a third party in a relationship. 35 While that is true, it seems to me that the crucial question in the claim for deceit is whether there was an implied representation made by the second defendant with the authority of the first defendant at the time when the plaintiff was invited in to the hotel room. If there was, his conduct at a later stage cannot refute the existence of that invitation. It seems to me there was at least a serious question to be tried on the question of deceit. 36 The plaintiff does not, for the purposes of the present application, rely upon the 'innominate tort' or the Court's jurisdiction to restrain the Commission of a defence, but he does rely on the tort of intimidation. 37 The defendants say that there is no threat to commit an unlawful act, but it seems to me to follow from my conclusion that there is a serious question to be tried as to breach of confidence and deceit, that there is also a serious question to be tried on the tort of intimidation, on the ground that an act in breach of confidence or a tortious act is unlawful conduct for that purpose. 38 The defendants say that the plaintiff has not demonstrated any proprietary or equitable interest in the videotape, and the fact that he appears in the videotape does not give him any right. This may be so, but the plaintiff's case as put to me is not based upon the establishment of any proprietary right or any equitable right arising out of the mere fact that the plaintiff appeared in the videotape. The case is put on the more orthodox ground that equity should intervene in support of the plaintiff's equitable right to restrain a breach of confidence, and also in its auxiliary jurisdiction equity should grant relief to restrain the commission or repetition of torts. 39 The defendants also say that there has been substantial delay in bringing these proceedings. I disagree. The evidence before me explains that the first defendant's attempt to extract money from the plaintiff began only in September and the plaintiff appears to have been assiduous in endeavouring to deal with it in one way or another until, when other methods including criminal proceedings appeared not to be succeeding, he brought the present proceedings. 40 Finally, the defendants submit that I should draw an adverse inference from the fact that two reporters, who are specifically referred to in the evidence of Ms Leung, have not provided any evidence. It seems to me that in an interlocutory application of this kind, it would be inappropriate for any such adverse inference to be drawn. 41 My conclusion, having regard to the balance of convenience, is that it is appropriate for the injunction first ordered on 30 September 1999 to be continued until further order. Since there is some uncertainty as to the identification of the hotel where the encounter took place, I propose to amend the injunction to show names of alternate venues which have been raised at the hearing.

Disclosure of the Existence and Whereabouts of the Videotape and Any Copies 42 As I have indicated, the plaintiff seeks not only to continue the injunction, but also to obtain an order for disclosure of information about the videotapes. In draft short minutes of orders handed up by the plaintiff's counsel it is proposed that I should order that each of the defendants make, file and serve an affidavit as to whether there are any copies of the videotape in their possession and similar matters, and if either of them wishes to maintain a claim for privilege against self-incrimination then they should attend Court at a specified time so that the judge may consider the application of s 128 of the Evidence Act 1995 (NSW). 43 An order of this kind appears to have been made by Einstein J on 13 August 1999 in Menzies v Perkins (No.2965/99), but his Honour's reasons for judgment are not available to me. In Bax Global (Australia) Pty Ltd v Evans [1999] NSWSC 815 I investigated the practice of the Equity Division in circumstances where a disclosure order is sought ancillary to a Mareva order, having regard to the possibility that the person to whom the order is directed may wish to rely on the privilege against self-incrimination. I indicated in that judgment that, in my opinion, the High Court's decision in Cardile v LED Builders Pty Ltd (1999) 162 ALR 294 implies that before making any Mareva order or any disclosure order ancillary to it, the Court should consider what alternative forms of order are available. 44 In the present case the application for disclosure order is not ancillary to a Mareva order. The purpose of the present application is to identify the location of all copies of the videotape. One assumes that if the plaintiff is successful in doing to, he will then make an application for delivery up of those copies, at least where they are in the possession of the defendants. The existence and whereabouts of the videotapes are matters closely related to the subject matter of the plaintiff's claims. 45 This is not a case, as is typical with Mareva orders, where a disclosure order is sought in order to protect the Court's process from being abused by a defendant who creates an apprehension of dissipating assets or taking them out of the jurisdiction in a manner which is likely to frustrate the plaintiff's prospect of recovery of the proceeds of any judgment eventually entered in the plaintiff's favour. In the present case the disclosure order is closely related to the plaintiff's cause of action. 46 That being to, there is an alternative form of relief available, namely, the administration of interrogatories under Pt 24 of the Supreme Court Rules. That interrogatories may be appropriate in the case before me seems to me to be confirmed, broadly, in RCA Corporation v Reddington Rare Records [1974] 1 WLR 1445, where the order was for discovery. Part 24 r 5 permits the Court at any stage of the proceedings to order a party to serve on another party a statement in accordance with r 6 in answer to specified interrogatories referred to in the order, and permits the Court to require that the statement be verified by affidavit. The advantage of proceeding under Pt 24 rather than under a less settled practice of the kind which I described in the Bax Global case, is that the procedure for objecting on the ground of the privilege is specifically regulated by Pt 24 r 6(3)(d) and r 6(4). 47 It appears to me that I can, by making an order pursuant to the provisions which I have mentioned, give the plaintiff the substance of the disclosure relief which he seeks in a manner which avoids any necessity for further judicial invention. 48 If I were not to rely on Pt 24 it would be necessary for me to decide whether it is better to follow what seems to me to have emerged as the equity practice, or to take the approach which the plaintiff urged upon me. The plaintiff submitted that the equity practice would put him at a disadvantage because the Court would make the initial determination as to whether there is reasonable ground for the objection based on the privilege without the benefit of informed submissions by the plaintiff's counsel. 49 On the other hand, the procedure which the plaintiff wishes to adopt would require the defendant to make a claim involving difficult and sophisticated legal principles from the witness box. It seems to me that this is asking a great deal of a lay defendant. I therefore prefer in all the circumstances to proceed under Pt 24, since it is available in this case. 50 I propose that if the plaintiff formulates specific interrogatories designed to elicit the information referred to in paragraph 3 of the draft short minutes of order, I should make an order under Pt 24 r 5 directing the defendants to provide a verified statement in accordance with r 6 in answer to those interrogatories. 51 Although the normal timetable under r 2 requires that at least 14 days be given for an answer to interrogatories, it seems to me that this timetable assumes a different set of circumstances from the present, in which pleadings have occurred and have been closed, and the case is proceeding in the normal way to trial. Given that I expect the interrogatories in this case to be quite specific and of a kind not requiring substantial effort for answers to be prepared, I would contemplate a much shorter timetable in which the interrogatories could be answered, say, four business days after they are administered. 52 I propose to stand the matter over to next Tuesday 12 October 1999 at 9.30am to permit any further argument with respect to the form of relief by way of administration of interrogatories and, in the meantime, I direct the plaintiff to prepare draft interrogatories and draft orders with respect to paragraph 3. 53 Since these reasons for judgment have been completed after 5 o'clock today, it has been necessary for me to interrupt the delivery of my reasons in order to make an order continuing the injunction until further order, and I have done so. 54 On the question of costs it seems to me the plaintiff has been successful, and as at present advised I see no reason why the costs of the plaintiff's application should not follow the event. However, I will hear any submissions on the question of costs on 12 October. * * * * * * * * *

Last Modified: 10/19/1999 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.