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Charles C. Spackman And Another v Sang Cheol Woo

Judgment Cited authorities 10 Cited in Precedent Map Related
Vincent
Judgment Date30 October 2020
Neutral Citation[2020] HKCFI 2748
Year2020
Judgement NumberHCA571/2019
Subject MatterCivil Action
CourtCourt of First Instance (Hong Kong)
HCA571/2019 CHARLES C. SPACKMAN AND ANOTHER v. SANG CHEOL WOO

HCA 571/2019

[2020] HKCFI 2748

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 571 OF 2019

____________

BETWEEN
CHARLES C. SPACKMAN 1st Plaintiff
SPACKMAN MEDIA GROUP LIMITED 2nd Plaintiff

and
SANG CHEOL WOO Defendant

____________

Before: Hon G Lam J in Chambers
Date of Hearing: 23 September 2020
Dates of Supplementary Written Submissions: 21 & 22 October 2020
Date of Decision: 30 October 2020

_________________

D E C I S I O N

_________________

A. Introduction

1. This is an application by the defendant (“Mr Woo”) to set aside orders for the issue and service of the writ out of jurisdiction and for its substituted service and to set aside a default interlocutory judgment based on those orders.

2. The 1st plaintiff (“Mr Spackman”) is a Korean American businessman. He is a US national and has also since March 2009 been a permanent resident of Hong Kong. The 2nd plaintiff (“SMG”) is a company founded by Mr Spackman and incorporated in Hong Kong and operates entertainment talent agencies in the Republic of Korea (“Korea”). Mr Woo is a businessman resident in Korea.

3. The plaintiffs instituted the action herein by Writ of Summons issued on 2 April and amended on 10 April 2019 against Mr Woo for damages for defamation, malicious falsehood and unlawful interference with business and economic interests. A statement of claim was also filed on 10 April.

4. On 24 April 2019, Master S P Yip granted the plaintiffs leave to issue a concurrent amended writ and to serve it on Mr Woo out of the jurisdiction at an address in Korea. On 27 September 2019, Master Hui made an order for substituted service of the amended writ. On 3 October 2019, pursuant to that order, the plaintiffs served the amended writ on Mr Woo by delivering it to Kobre & Kim, a firm of solicitors in Hong Kong.

5. On 13 November 2019, in the absence of any Notice of Intention to Defend given by Mr Woo, interlocutory judgment for damages to be assessed was entered for the plaintiffs (“Interlocutory Judgment”), the plaintiffs having abandoned their claim for injunction.

6. On 6 December 2019, Mr Woo issued a summons for an order that the above two orders made by the Masters be discharged and that service of the amended writ on him be set aside and, alternatively, the Interlocutory Judgment be set aside.

7. On 13 December 2019, the plaintiffs issued a summons seeking an order that in the event the court set aside the Interlocutory Judgment, Mr Woo do forthwith pay to the plaintiffs the costs incurred in the action up to 6 December 2019, alternatively the costs incurred in applying for the Interlocutory Judgment.

B. Background

Korean proceedings

8. The parties have a long history of litigation between them, stemming from events that occurred 20 years ago. In brief, in 2000, Mr Spackman was a director of Littauer Technologies Co Ltd (“Littauer”), a company then listed on KOSDAQ, and Mr Woo was a major shareholder of Linux International Co Ltd (“Linux”). In around April 2000, Mr Woo transferred his shares in Linux to Littauer in exchange for shares in Littauer. In July 2000, Littauer acquired a company called AsiaNet Corp Ltd (“AsiaNet”) by another exchange of shares. There were wild fluctuations in the share price of Littauer in 2000 and beyond. The price of Littauer shares suffered a very substantial drop after Mr Woo’s acquisition and he virtually lost all his investment. In contrast, Mr Woo says, Mr Spackman realised his shares in August 2000 at a huge profit. Littauer was delisted in 2003.

9. In July 2003, Mr Woo started proceedings in the Seoul Central District Court against 11 defendants including Littauer, another company called KTIC, and Mr Spackman, alleging, inter alia, that they had conspired to acquire (through Littauer) AsiaNet, which was worthless, at an inflated price, and spread false information to push up the share price of AsiaNet and Littauer. Mr Woo claimed compensation representing the difference between the purchase price of the Littauer shares and the much lower price when he sold them.

10. Mr Woo failed at first instance but succeeded on appeal to the Seoul High Court against 5 of the defendants in September 2011. In respect of Mr Spackman, who failed to take part in the appeal, the Seoul High Court held that, under Article 150(3) of the (Korean) Civil Procedure Act, he “shall be deemed to have made admissions” to the claims against him. The Seoul High Court ordered Littauer, Mr Spackman, KTIC and two other defendants to pay Mr Woo a sum of KRW5,207,884,800 plus interest (at a rate of 5% p.a. from 5 June 2011 to 29 September 2011 and at 20% p.a. thereafter), equivalent to over HK$100 million.

11. Littauer, Mr Spackman and KTIC appealed to the Supreme Court of Korea. In October 2013, the Supreme Court allowed the appeal of Littauer and KTIC and remitted their case to the Seoul High Court, but dismissed Mr Spackman’s appeal. Mr Woo subsequently failed in the High Court on the remitted case as against Littauer and KTIC.

12. In 2017 Mr Spackman filed an application in the Seoul High Court to set aside that court’s judgment against himself and for a retrial, but it was dismissed. His appeal to the Supreme Court was also dismissed in May 2018.

US and other proceedings

13. For the purpose of enforcing the Seoul High Court’s judgment against Mr Spackman, Mr Woo has been taking various steps in several jurisdictions including the United States (Massachusetts and New York).

14. Thus in February 2017, Mr Woo made an application for discovery against Mr Spackman’s daughter, and Harvard University, which the Massachusetts court granted, resulting in the daughter being subpoenaed, inter alia, to give a deposition. On 21 February 2017, Kobre & Kim LLP, which acted for Mr Woo in the United States, issued a press release regarding the outcome via the website www.prnewswire.com (“KK Press Release”).

15. In May 2017, Mr Woo filed a motion for summary judgment in lieu of complaint in the Supreme Court of the State of New York to enforce the Seoul High Court’s judgment (“NY Proceedings”). In support of the motion, Mr Woo filed the following documents:

(1) a memorandum of law in support of the NY Proceedings (“NY Memorandum”);

(2) a declaration by Mr John Han, one of Mr Woo’s lawyers at Kobre & Kim LLP (“Han Declaration”), which exhibited, inter alia, the following 3 documents.

(3) a Preparatory Pleading, ie a ground of appeal (“GOA”), filed by Mr Woo in his appeal in the Seoul High Court;

(4) an article with the title “[Littauer Technologies Siphons Off $19.6 Billion] Punishment to Begin for Alleged ‘Crimes’ from Loophole in System”, published in the SE Daily on 25 March 2001 (“SE Daily Article”); and

(5) an article with the title “Harvard Ordered to Reveal Financial Records of Influential Donor”, published in the New York Times on 2 March 2017 (“NY Times Article”).

These 5 documents will be referred to below collectively as the “NY Proceedings Documents”.

16. In September 2018 the New York court granted summary judgment against Mr Spackman for over US$13.8 million, recognising the Seoul High Court’s judgment against him. In July 2020, the New York court found that Mr Spackman had failed to provide post‑judgment discovery as ordered and held him to be in contempt of court. Mr Spackman has filed an appeal against the contempt order.

17. In June 2020 the BVI Commercial Court gave judgment recognising the Seoul High Court’s judgment against Mr Spackman. There are also ongoing proceedings in Hong Kong (HCA 1586/2016) and in Singapore for recognition and enforcement of the Seoul High Court’s judgment. Mr Spackman’s application to plead the Interlocutory Judgment herein as a counterclaim against Mr Woo in HCA 1586/2016 has failed. That action is now fixed for trial in September 2021.

C. The plaintiffs’ claims

The Writ

18. By their Writ of Summons against Mr Woo:[1]

(1) Mr Spackman claims damages for:

(a) the publication in 2017 and 2018 of 6 documents (namely, the KK Press Release and the NY Proceedings Documents) to various individuals and entities in, inter alia, Hong Kong, Singapore, Mainland China and Korea, which contained statements defamatory of him; and

(b) malicious falsehood arising from the same publication.

(2) SMG claims damages for:

(a) the publication in 2017 and 2018 of the same documents to the same recipients, which contained statements defamatory of it;

(b) malicious falsehood arising from the same publication; and

(c) wrongful interference with its business and economic interests by such unlawful means.

(3) The plaintiffs also claim an injunction to restrain Mr Woo from further publishing the same or similar defamatory words.

19. These causes of action are more fully pleaded in the Statement of Claim. For the purpose of discussion, I shall focus below on the claims in libel, as the other causes of action do not raise any materially different points.

The Statement of Claim

20. In their Statement of Claim, the plaintiffs contend that the KK Press Release and the NY Proceedings Documents contained statements defamatory of Mr Spackman (“Spackman Defamatory Statements”) and that the NY Proceedings Documents contained statements defamatory of SMG (“SMG Defamatory Statements”) (collectively, the “Defamatory Statements”).

21. Mr Spackman complains that the Spackman Defamatory Statements bear the meaning, inter alia, that he dishonestly, and in conspiracy with his associates, caused Littauer to enter into a US$1.3 billion self‑dealing merger in 2000 so as to defraud Littauer’s other shareholders including Mr Woo.

22. SMG complains that the SMG Defamatory Statements bear the meaning, inter...

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