Lee v The New Korea Herald Ltd and Ors
| Jurisdiction | New Zealand |
| Judge | HEATH J |
| Judgment Date | 09 November 2011 |
| Neutral Citation | [2011] NZHC 1491 |
| Date | 09 November 2010 |
| Court | High Court |
| Docket Number | CIV 2008-404-5072 |
and
and
[2011] NZHC 1491
Heath J
CIV 2008-404-5072
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
Application by third defendant for a rehearing of a non involvement defence — defamation proceedings where damages were awarded to the plaintiff — third defendant was a director of the defendant company who delegated authority in relation to his defence to the second defendant — solicitors were given leave to withdraw with no notice provided to third defendant — whether a rehearing should be granted under Court's inherent jurisdiction — effect of the revocation of r494 (power to order a new trial) and r495 High Court Rules (application for new trial).
M Ryan and S J Corlett for Third Defendant
G J Kohler for Plaintiff, PO Box 4338, Auckland
No appearance by, or on behalf of other Defendants
This judgment was delivered by me on 9 November 2011 at 4.00pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
Mr Kim applies for a “rehearing of non involvement defence”, arising out of a defamation proceeding on which I gave judgment for the plaintiff, Mr Lee. 1 The application is opposed by Mr Lee, on both jurisdictional and substantive grounds.
Between 7 March 2008 and 2 May 2008, a number of articles appeared in The New Korea Herald. They suggested that Mr Lee, a prominent businessman within the Korean community, had engaged in corrupt, dishonest and immoral practices. The newspaper is published by The New Korea Herald Ltd and is freely available to members of the Korean community within New Zealand. Printed in the Korean language, it has a circulation of about 3,000 people. The directors of the company were, at material times, Mr Yoo and Mr Kim. Mr Yoo had editorial responsibility for the relevant articles.
Mr Lee sued The New Korea Herald Ltd, Mr Yoo and Mr Kim for defamation. The proceeding was heard on 29 and 30 June 2010. I gave leave for Mr Kim's solicitors to withdraw. Mr Yoo represented himself. No appearance was entered for the company.
In a judgment given on 9 November 2010, I found in favour of Mr Lee and awarded damages of $250,000 against all three defendants, on a joint and several basis. I also issued an interim injunction requiring the articles to be removed from the newspaper's website, to prevent further publication of the defamatory material. 2
Mr Kim's explanation for not having participated is recorded in a document that he provided to his solicitors. Following service of the Statement of Claim on Mr Kim, on 11 August 2008, 3 Mr Yoo arranged for a firm of solicitors, Kenton
(a) I am not personally involved in the operation of The New Korea Herald Limited and the publication of the New Korea Herald (“The Korea Herald”);
(b) I am not personally involved in the preparation of articles, publication or distribution of the Korea Herald;
…
(g) I hereby delegate my full authority in relation to the defending of the Case for myself as the Third Defendant and for The New Korea Herald Limited as the first defendant to [Mr Yoo], co-director of The New Korea Herald Limited;
(h) I understand that [Mr Yoo] on behalf of himself and The New Korea Herald Limited have decided to use Kenton Chambers Lawyers as the counsel in defending the case for the three defendants;
While not relevant to the present application, I observe that the acknowledgements contained in Mr Kim's document of 29 September 2008 are expressed in the present tense. In relation to the first two points, it is unclear whether Mr Kim was acknowledging that, at the time the document was signed, he was no longer personally involved with the newspaper, or whether he intended to convey that he had never had such an involvement.
Although Mr Kim did not participate in the hearing in this Court, his rights of appeal remained. Mr Kim did not file an appeal within the requisite time. He says that he did not become aware of the judgment until about 23 December 2010 when an associate from the Korean community in Christchurch drew it to his attention. Mr Kim states that he was “shocked” to receive that information (which came from a pamphlet that had been distributed to members of the Korean community in Auckland), as he had never been told of the date of a trial or the fact that judgment had been given.
In an affidavit in support of his application for rehearing, Mr Kim deposed that he first learnt of the articles in issue after being made aware of my judgment, around Christmas 2010. As copies of the seven articles (in both the Korean and English languages) were attached to the Statement of Claim served on Mr Kim, 4 I must infer from that evidence that when Mr Kim was served, he chose not to read the documents fully.
In mid January 2011, Mr Kim contacted Mr Yoo. Mr Yoo told him that he was taking steps to appeal the judgment, through new lawyers. After Mr Kim received a letter of demand from the solicitors for Mr Lee, dated 25 January 2011, he contacted Mr Yoo again. Mr Yoo advised that he had instructed another firm to pursue his appeal.
Mr Lee agreed to Mr Yoo filing an appeal out of time. However, I have been told that Mr Yoo's appeal is now deemed to be abandoned for failure to pay security for costs in time.
Mr Kim instructed the same firm of solicitors. An application to extend the time to appeal was made. Following a hearing, the Court of Appeal gave judgment on Mr Kim's application, on 3 June 2011. 5 An extension of time to appeal was granted. The Court was influenced by a point that had emerged during argument, to the effect that withdrawal of the solicitors for Mr Kim had not been effected in accordance with r 5.41 of the High Court Rules. That meant that Mr Kim personally had not been given notice of the intended withdrawal. 6
The Court of Appeal considered it was “strongly arguable that Mr Kim [had] suffered a serious injustice”. 7 Arnold J, for the Court, continued:
[22] … [Mr Kim] understood that he was being represented in the proceedings by Kenton Chambers Lawyers, who took instructions from Mr Yoo. He also understood that he would be kept informed of developments with the litigation, as is confirmed by the lawyer's contemporaneous file note. Mr Kim was neither kept informed, nor was he represented at trial. Although the question of his involvement in the company and its operations had been put in issue prior to trial, he had no opportunity at trial to address matters relevant to potential defences based on his non-involvement. As it turned out this was critical, given the basis of the Judge's findings against him.
[23] When Mr Kim found out what had occurred, he acted reasonably promptly to retain legal advisers and to institute steps to appeal. In these circumstances, we consider that he must be granted an extension of time to appeal. We do not accept Mr Kohler's submission that the proper course is that we decline Mr Kim's application and leave him to whatever remedies he may have against Kenton Chambers Lawyers or Mr Yoo. The provisions of the [High Court] Rules were not complied with in an important respect and Mr Kim has suffered a material disadvantage as a consequence. The Judge proceeded on the basis that Mr Kim had made a deliberate decision not to attend or participate in the hearing, either in person or through counsel. Mr Kim has now deposed that that was not the position.
[24] We wish to emphasise that we intend no criticism of Heath J in anything we have said. He was faced on the morning of trial with a most unsatisfactory situation, namely, the withdrawal of counsel. He did not receive the assistance from counsel that he was entitled to expect in terms of the application of the Rules. That said, we acknowledge that Mr Park did remain in court to assist Mr Yoo. (footnotes omitted)
In the “unusual circumstances” of the case the Court of Appeal made “a suggestion as to the way forward”. 8 It emphasised that it was “no more than a suggestion” and was not binding on the parties. The Court said:
[27] We consider that Mr Kim has a strong argument that the hearing before Heath J miscarried as far as he was concerned. This is for the reasons already given, which meant that Mr Kim did not have an opportunity to address his particular position by leading further evidence to support Mr Yoo's evidence that he was not involved in the operations of the newspaper or the publication of the defamatory material. We think he should be given that opportunity.
[28] That could be achieved if the matter were referred back to the High Court for determination of Mr Kim's non-involvement defence (as a separate question) in light of whatever further evidence he might advance. Depending on the outcome of that hearing, Mr Kim or Mr Lee may wish to appeal. Any such appeal could be dealt with in conjunction with Mr Yoo's appeal, which would mean that all matters could be addressed together. Before the matter could be referred back to the High Court, however, both parties would have to agree that that course was appropriate. In effect, the appeal would have to be allowed, and relief granted, by consent.
[29] We reiterate that this is simply a suggestion. The parties are free to accept, modify or reject it. If the appeal in respect of which we have granted an extension of time does proceed to a hearing, none of the present coram will sit on it. (footnote omitted; my emphasis)
The Court added that it “would face real difficulties in dealing with [the appeal] without prior determination of the High Court”. 9
Once the Court of Appeal gave an...
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