XCHRX HONG KONG CHILDREN ASSOCIATION v. CHAN MEI KEE AND ANOTHER

HCA9588/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 9588 OF 2000

--------------------

-----------------

R U L I N G

-----------------

1. This is an application by the defendants by summons to strike out the plaintiff's claim under Order 18, rule 19 on the grounds that it discloses no reasonable cause of action against the defendants. The basis of this application being that the plaintiff, being an unincorporated association has no locus standi to claim against the defendants for slander.

The plaintiff's claim

2. The pleaded claim of the plaintiff is that it is an unincorporated association registered under the Societies Ordinance, Cap.151 in Hong Kong. The plaintiff conducts certain classes for children including art and dance classes. Up to May 2000, the 1st defendant was employed by the plaintiff as a dance teacher at its dance classes. At the time the 1st defendant was so employed by the plaintiff, the 2nd defendant acted as a volunteer assistant to the 1st defendant at the dance classes held by the plaintiff. Unknown to the plaintiff, even at that time, the 2nd defendant was the organizer of Hong Kong Art Troupe ("HKAT"), a competitor of the plaintiff in holding art and dance classes for children. After the 1st defendant left the employ of the plaintiff in May 2000, she has joined HKAT as a dance teacher and since that time, the 1st and the 2nd defendants have been making false and malicious statements of the plaintiff to the parents of children enrolled in the plaintiff's classes and other people. This had the effect of inducing those parents to take their children away from the plaintiff's classes to join the classes held by HKAT thus causing loss to the plaintiff.

3. The defamatory words complained of are as follows:

(i) The Hong Kong Children Association ("HKCA") had not in fact organized any public performance;

(ii) HKCA had not in fact applied for any venues for public performance;

(iii) HKCA organized public performance for the purpose of cheating money out of the parents of the student members;

(iv) HKCA is an organization that cheats the parents of student members and con money out of them;

(v) because its trickery was being pointed out, HKCA had no alternatives but to organize performance at the Northern District Town Hall on 29 July 2000;

(vi) the credibility of HKCA was questionable;

(vii) the Government says HKCA is questionable, and will not approve their future applications for venues for training. From July 2000 onwards, HKCA will not have venues at the Northern District Town Hall for the use of children dancing and for training;

(viii) HKCA operated without licence, and will be "folded" soon; and

(ix) the persons in charge of HKCA will run away soon.

4. The plaintiff therefore claims exemplary damages, damages for loss of goodwill and damages for slander as well as an injunction.

The striking out application

5. The striking out application is made on the basis that the plaintiff being an unincorporated association has no locus standi to sue for defamation. This is conceded by the plaintiff. However, the plaintiff submits that this is merely a technical defect in the Statement of Claim and it can be cured by an order made under Order 15, rule 12 to allow Ms Chung Kwai Ling, one of three persons who make up the present plaintiff, to be appointed as the representative of all three of them being the members of the plaintiff association.

6. In advancing that submission, counsel for the plaintiff relied on a number of authorities in relation to representative actions under Order 15, rule 12 but none of those authorities concerned defamation actions.

7. The law relating to representative actions in defamation cases was clearly and succinctly stated by O'Connor J in Electrical, Electronic, Telecommunication and Plumbing Union v. Times Newspapers Ltd and Others [1980] 1 All ER 1097 at 1104 :

" The third question does arise, as I have answered the first question in the negative. Let me repeat it:

'Is such a union [that is, a trade union] able to maintain an action for damages for defamation on behalf of each and every one of its individual members in the name of the union (without identifying any particular members or member) in relation to a publication which impugns their several reputations as members of the union?'

I will deal with the matter shortly. The answer is No, for the simple reason that a representative action is not available to a number of different individuals where the relief sought is damages; and that I think becomes quite obvious if one is thinking of a libel action because one would be looking at the individual reputation of all the members of the union and, no matter whether we are talking of 500, 5,000 or half a million, they would all be different and the damages would be different and for that reason alone it makes it quite unworkable and impossible to bring a representative action on behalf of all the members.

There are other reasons which also make it impossible. Something which is libellous of the union as a whole in the words complained of, for the reasons I have already given earlier in this judgment, could only be complained about by those individual members of the union who could demonstrate that the words identified them in the circumstances in which they were published; and that rules out all those who could not and so it is quite impossible to bring a representative action on behalf of all the members of the union. To my mind, that is absolutely clear and I need say no more about it."

8. Faced with this legal difficulty as to representative action in defamation cases, counsel for the plaintiff very wisely conceded the point as to representative action. Her fall back position then was that she would seek leave to amend the Writ and Statement of Claim to name in person all the three members of HKCA (being its Chairman, Vice-chairman and Secretary). This was done and proposed amendments were handed up to me after a short adjournment.

9. The proposed amendments to the Writ named Chung Kwai Ling Angel, Wong Kwok Yau and Wong Kam Hee Joe as the 1st, 2nd and 3rd plaintiffs respectively in lieu of the original plaintiff. The draft Amended Statement of Claim pleads that the three plaintiffs are the only members of HKCA which was established on 11 December 1987 and registered with the Societies Ordinance.

10. It further pleads a new paragraph 1B as follows :-

"By virtue of the facts and matters pleaded in paragraphs 1 and 1A hereof, all rights of and accrued to the Association including the Association's reputation and goodwill were and still are belonged to the plaintiffs."

11. Furthermore, it was also pleaded in paragraph 10A of the proposed Amended Statement of Claim that the words published by the 1st and 2nd defendants were defamatory of the 1st, 2nd and 3rd plaintiffs and calculated to disparage them in their offices as Chairman, Vice-chairman and Secretary of HKCA.

12. To these proposed amendments, objection has been taken by the defendants on the grounds, firstly, that there is no legal basis for what is pleaded in the new paragraph 1B and secondly, that the alleged defamatory words cannot in law refer to any one of the plaintiffs.

Decision

13. While the law is clear that an unincorporated association cannot bring an action in its own name for libel or slander, and it is also clear that representative action will not normally be ordered for such cause of action, there is no clear statement of law to the effect that an unincorporated association is not able to build up goodwill or reputation over a period of time simply because it is not considered as a legal entity on its own.

14. The defendants' application is a striking out application under Order 18, rule 19 and it is only in a clear case that the court should order a claim or any part of it to be struck out.

15. As for the second objection taken by the defendants, admittedly even as pleaded, none of the plaintiffs are referred to by name in so far as the words complained of are concerned. However, whether or not the words complained of by the proposed plaintiffs are defamatory of any of the plaintiffs or whether they can refer to any of the plaintiffs depends very much on the evidence, in particular, how those words were understood by the people to whom the words were published. As long as it is arguable that the words can reasonably refer to the plaintiffs or any one of them, then there can be no objection at this stage. In this respect, one of the complaints by the plaintiffs is that the defendants have alleged that HKCA has cheated and conned the parents of students for their fees. It is also pleaded that there are only three members of HKCA, all of whom are now named as plaintiffs. It is also pleaded that the defendants have said that those in charge of HKCA will soon run away. In my view, those words can, depending on the evidence adduced by the plaintiffs, both refer to the plaintiffs or one of them and can also be defamatory.

16. In the circumstances, and for the reasons given, I do not think that the defendants objections to the proposed amendments can be maintained.

Order

17. I shall accordingly grant leave to the plaintiff to amend the Writ and the Statement of Claim in the manner indicated. The amended Writ of Summons and the Amended Statement of Claim are to be filed and reserved upon the defendants within seven days from the date of this order.

18. The defendants do file and serve their defence 14 days after service upon them of the Amended Statement of Claim and any Reply by the plaintiff to be filed and served 14 days thereafter.

Costs

19. The defendants' original application to strike out was well-founded and although the plaintiff's claim is saved at the end of the day, that is only due to the timely amendments by the plaintiffs.

20. Accordingly, I shall make the following costs order nisi, namely,

(1) the costs of the defendants' application to strike out by their summons dated 20 November 2000 be to the defendants in any event and to be borne by the proposed 1st, 2nd and 3rd plaintiffs; and

(2) the costs of and occasioned by the plaintiff's amendment of the Writ and Statement of Claim be to the defendants in any event and to be borne by the proposed 1st, 2nd and 3rd plaintiffs.