YU MING INVESTMENT LTD v. PENG RU CHUAN, RICHARD

HCA 814/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 814 OF 2002

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J U D G M E N T

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I.  Introduction

1.  The plaintiff commenced this action on 28 February 2002 alleging the defendant has defamed it on 19 February 2002 by way of slander.  The defendant denies the allegation.

II.  Background Facts

2.  The background facts are largely undisputed.

3.  The plaintiff is and was an investment adviser and dealer registered under the Securities Ordinance (Cap. 333).  It is also a recognised sponsor for the Main Board of the Stock Exchange of Hong Kong Limited (“Stock Exchange”).  The defendant is and was an employee of the Hong Kong Exchanges and Clearing Limited (“HKEx”) and was at the relevant time its Senior Vice President in the China Development & Listing Promotion, Exchange Business Unit (“the China unit”).

4.  In about May 2001, in relation to the possible listing of a mainland state-owned infrastructure enterprise, the Guangzhou Metro Corporation (“GMC”), both staff of the plaintiff and that of the Stock Exchange attended a meeting with representatives of GMC.  The exact role of the plaintiff at that meeting is one of the disputed matters in this action.

5.  Further, on 19 February 2002, a meeting was held at the office of the Stock Exchange (“the Feb 2002 meeting”).  Among other people, a Mr. Alex Leung of the plaintiff (“A Leung”) and the defendant were present at the Feb 2002 meeting.

III.  The Alleged Slander

6.  The statement of claim alleges that the defendant uttered the following words at the Feb 2002 meeting.  Shortly after the meeting started, the defendant requested confirmation of the plaintiff’s role in the listing project.  He then said to A Leung:

“這個項目我看有兩個複雜的問題，第一個是這個項目的保薦人，你不是這個項目的保薦人吧?”

A Leung responded by stating to the effect the plaintiff certainly wanted a role in the listing project.  The defendant then said to A Leung:-

“不行”.

For convenience, this part of the conversation will be referred to as “the said words” below.

7.  The plaintiff’s case is that the said words were defamatory of the plaintiff.  The statement of claim pleads that their natural and ordinary meaning was:

(a) the plaintiff was wholly unsuitable to be involved as a sponsor in the listing project;

(b) the plaintiff is not competent or sufficiently competent to be involved as a sponsor in the listing project;

(c) the plaintiff is not sufficiently reputable or does not have the required ability or capacity to be a sponsor in the listing project; and

(d) the plaintiff’s credibility and standing was such that it would not be appropriate for the plaintiff to act as sponsor in the listing project.

This plea is denied by the defence.

IV.  Issues in this Action

8.  The following issues were raised by the pleadings:

(1) whether the defendant has uttered the said words;

(2) if so, whether those words were defamatory of the plaintiff.

V.  Witnesses

9.  The issue set out in sub-para. (1) above is a factual issue and turns almost entirely on the credibility of the witnesses called by both sides.

10.  The following witnesses testified for the plaintiff:

(a)	A Leung, a corporate finance executive of the plaintiff who joined the plaintiff since July 2000;
(b)	Ms. Cheung Bo Chun, Janet (“J Cheung”), a partner of Messrs. Richards Butler specialising in mergers and acquisitions, takeovers, private company investments and initial public offering for Hong Kong listing;
(c)	Lee Wa Lun, Warren (“W Lee”), a director of the plaintiff since April 1997.

11.   The following witnesses testified for the defence:

(a) the defendant;

(b) Ms. Lie Hay Tai, Christine (“Lie”), a vice president in the China unit;

(c) Ms. Sumy Hsu (“Hsu”), a senior manager in the China unit;

(d) Ms. Cheung Pui Yi, Connie (“C Cheung”), a manager in the China unit.

12.  Apart from the above witnesses, a Mr. Simon Shum (“Shum”) has been referred to from time to time at trial.  Shum has not been called to testify.  He was employed by a Zhongjing International Investment Consultant Co. Ltd.  (“Zhongjing”).  In May 2001, Zhongjing introduced the plaintiff to the GMC listing proposal.

VI.  Credibility of Witnesses

13.  There are two objective tests for assessing a witness’s credibility regarding a matter to which he has testified:

(a)	whether that part of his testimony is inherently plausible or implausible;
(b)	whether that part of his testimony is, in a material way, contradicted by other evidence which is undisputed or indisputable (an example often given of such evidence is contemporaneous documents).

Further, where it is shown that a witness has been discredited over one or more matters to which he has testified (using the above tests), this fact is relevant to the assessment of his overall credibility.  Likewise, regard may be had to a witness’s motive for deliberately not giving truthful testimony.  For example, telling the truth may prejudice his interest, or a just determination of the litigation may affect his interest.

14.  The principal witness for the plaintiff is A Leung for the obvious reason that he was the only plaintiff witness who was present at the Feb 2002 meeting.  On the other hand, all 4 defence witnesses were present at that time.  A Leung testified that the said words were uttered by the defendant.  (Subject to the plaintiff’s argument set out in para. 58 to 59 below) all defence witness testified otherwise.  Hence, it is the words of one witness against four (or two against four if Shum’s out-of-court statements are also accepted: see under “(b) J Cheung” below).  Mere superiority in the number of witnesses does not mean the defence case is stronger: quantity is, of course, not to be equated with quality.

15.   The different versions of fact testified to by the witnesses cannot be the result of genuine mistake on their part, and must be resolved by an assessment of their credibility.  The credibility of J Cheung is not challenged by defence counsel (her testimony will be dealt with below).

16.   Although the credibility of each witness is discussed under separate sub-headings below, for the avoidance of doubt, I have assessed their credibility bearing in mind the totality of the evidence adduced at trial.

(a)  A Leung

17.  A Leung’s testimony is severely attacked by the defence.  He was cross-examined for a sustained period of time.  Out of the 41-page written closing submissions, some 22 pages are devoted to why he should be disbelieved.  In addition, the defence alleges that there was bad faith on the plaintiff’s part: see pp. 25-29, defence closing submissions.  The implication is that A Leung is trying to help the plaintiff (his employer) to put forth an unmeritorious legal action.

18.  In assessing A Leung’s credibility, the opportunity for which he (and the plaintiff) may have to concoct a story about the said words should be taken into account.  The Feb 2002 meeting was held at HKEx located at International Finance Centre, Harbour View Street, Central whereas the plaintiff was located at Ice House Street, Central.  It finished at about 5:30 pm on 19 February: para. 33, A Leung’s witness statement.  So, by the time A Leung arrived at the plaintiff’s office, it would have been around 5:45 pm.

19.  If J Cheung’s testimony is to be believed (which, as set out below, I find it should be), the meeting on that day between her on the one part and W Lee, A Leung and Shum on the other part was arranged over the telephone between 5 pm and 6 pm (quite probably after 5:45 pm).  It was at that meeting J Cheung was told that the defendant uttered the said words.

20.  Hence, if the plaintiff had in fact concocted the story regarding the said words (and unless the story was concocted before 19 February 2002), most probably the concoction must have been carried out before the telephone call to J Cheung; that is, between about 5:45 pm and sometime before 6 pm.  Further, according to J Cheung, the meeting took place after 6 pm and before 7:15 pm (and lasted for about 30 minutes).  If the story was concocted after said telephone call, it would have been concocted between 5:45 pm and sometime before the meeting with J Cheung.  The last-mentioned period would at most be about one hour (from about 5:45 to 6:45 pm).

21.  The defence has put forth numerous reasons in support of its argument that A Leung was untruthful.  These reasons are dealt with below.

22.  First, the defence says the plaintiff’s case is inherently implausible.  The defendant asks the court to note the following undisputed facts:

(1)	at the Feb 2002 meeting, the defendant knew the plaintiff was on the approved list of Growth Enterprise Market (GEM) sponsors.  As such, there would be no doubt the plaintiff would have been qualified to act as a Main Board sponsor;
(2)	there is no evidence to challenge the defendant’s testimony that he did not doubt the plaintiff’s ability to act as a Main Board sponsor;
(3)	before the Feb 2002 meeting, the defendant has never met A Leung or the plaintiff;
(4)	as head of the China unit, it was part of the defendant’s job to market the Stock Exchange and attract mainland companies to list in Hong Kong, whether on the Main Board or GEM.  His duties did not include the approval of sponsors for listing or indeed of listing matters or the administration of these matters;
(5)	the Feb 2002 meeting was some kind of introductory meeting (or, at least, one of many upcoming meetings) in relation to the listing project.

23.   It is contended by the defendant, in the light of the above facts, he could not have any motive to utter the said words:

(a)	there was no need for him to question the plaintiff’s role in the listing project.  In fact, from the viewpoint that it was part of his job to promote listing in Hong Kong, it would be counter-productive to do so;
(b)	he should have no grudge against the plaintiff;
(c)	since the plaintiff was fully qualified to be a sponsor in the listing project, it would be futile for him to challenge the plaintiff regarding this;
(d)	in view that the listing project was still at a preliminary stage, it would be premature to ask for the plaintiff’s role in it.

24.  Further, the statement of claim pleads that the defendant had confirmed with A Leung the plaintiff’s role in the listing project before he uttered the said words.  This sequence of event is improbable.  There would be no reason for the defendant to ask A Leung if the plaintiff wanted to be a sponsor if the plaintiff’s role had already been ascertained.

25.   According to A Leung, when the defendant was told the plaintiff could be a co-sponsor, the defendant nodded.  The defence submits if the defendant had agreed the plaintiff could be a co-sponsor, there would be no reason for him to disapprove the plaintiff to be a sponsor.

26.  Secondly, the defence submits that the plaintiff has put forth at least 3 different versions as to how the said words were allegedly uttered by the defendant:

(a)	in the statement of claim;
(b)	in the plaintiff’s letter dated 15 March 2002 to GMC;
(c)	in A Leung’s witness statement.

The defence argues that there are inconsistencies in these versions.  The pleading alleges the defendant asked for confirmation of the plaintiff’s role in the listing project; this was not mentioned in the plaintiff’s letter or the witness statement.  The witness statement alleges the defendant mentioned the second complication relating to the listing project was the Shanghai Stock Exchange; however, this was not mentioned in the pleading or the plaintiff’s letter.  Finally, the plaintiff’s letter and witness statement allege A Leung told the defendant the plaintiff might be involved as a co-sponsor; this was not mentioned in the pleading.

27.  The defence also asks me to note J Cheung’s account is different from A Leung’s in that, according to her, at the Feb 2002 meeting, the proposed sponsorship by the plaintiff was said to be one of the two complications and Shum said an additional investment bank would be appointed if necessary (and the plaintiff could be a co-sponsor).

28.  The defendant contends A Leung’s testimony is incredible because the plaintiff’s case differ as to whether the said words were uttered shortly after the commencement, or in the middle, of the Feb 2002 meeting.

29.  I agree with the plaintiff that the above differences are minor and insignificant.  They are caused not by lack of credibility but by:

(6) differences in perception of what are matters worth mentioning by different people at different times; and/or

(7) semantics differences.

30.  Thirdly, the defence argues that one of A Leung’s answers given in cross-examination shows that his account of the Feb 2002 meeting is inaccurate in relation to the following matter.  When he was cross-examined, A Leung maintained the defendant said one of the two complications in the listing project was the Shanghai Stock Exchange.  While this is consistent with the plaintiff’s pleading, A Leung contradicted the plaintiff’s pleaded case as regards what was the other complication.  The defence contends A Leung testified that the other complication concerned the need for approval by various mainland authorities; the pleaded case is the other complication concerned the plaintiff’s participation as a sponsor.  The relevant part of his testimony is as follows:-

“	Q.	… Well, you certainly recall [the defendant] telling you that it required the approval of the State Economic and Trade Commission, Mobtec, Guangzhou Government … ?
	Yes, yes, correct.
	…
	Q.	And that was one of the complications he was referring to at the meeting?
	A.	Correct.
	... ” (transcript for 15 October 2003, p. 73J-M).

Later on, A Leung was asked and testified:

“	Q.	… [The defendant] did raise two complications at the meeting, one being state approval … the second being the Shanghai Stock Exchange?
	To put it in context, he raised the complication of sponsorship and Shanghai Stock Exchange in one go and then after finishing expressing … he further went on to raise complication or hurdle in relation to regulatory approval.
	… ” (transcript for 15 October 2003, p. 86M-Q).

I disagree with the defence.  A Leung has not testified that the defendant mentioned only two complications throughout the Feb 2002 meeting.  I find that A Leung was truthful when he put the defendant’s statement in context.  There is accordingly no contradiction in A Leung’s own testimony.  In fact, some of the defence witnesses (and indeed the defendant) also agreed that the question of sponsorship was raised during the Feb 2002 meeting.

31.  The defence also criticises A Leung’s testimony relying on his conduct during and after the Feb 2002 meeting.  Although A Leung claims he felt questioned by the said words, he never asked the defendant to clarify what the said words meant, or to protest against them.  Instead he carried on with the discussion.  I accept the plaintiff’s reply that A Leung was trying to keep the atmosphere of the Feb 2002 meeting amicable.  In view that the plaintiff’s client was present and because of A Leung’s position in the plaintiff’s hierarchy, it is understandable why he would want to do so.  He probably also felt he would need to seek instruction regarding the matter first.

32.  Fourthly, the defence says that A Leung’s testimony is contradicted by the contemporaneous documents.  I understand the defence to be referring to e-mails and other documents passing between Shum and the defence witnesses from 19 February 2002 to 22 February 2002 in which, not only was there no mention of the said words, Shum thanked HKEx for the support and cooperation by their visit to GMC and Shum mentioned other matters relating to the listing project.

33.  I do not find the criticisms to be well-founded.  First, since the meeting with J Cheung, the plaintiff has already put forth its complaint regarding the said words.  Shum has supported the plaintiff regarding that matter (see under the sub-heading “(b) J Cheung” below).  Whether the complaint has been repeated by the plaintiff (or Shum) from 19 February to 22 February 2002 should have little importance.  Secondly, these e-mails and documents were intended for the purpose of the listing project.  It is understandable why their authors did not mention the incident relevant to this action.

34.  Moreover, the defendant’s argument that there was a lack of pre-action complaint against the defendant has to be balanced against the early meeting with J Cheung and the issue of the writ herein a few days after the Feb 2002 meeting.

35.  There are other criticisms levied against A Leung’s credibility in the closing submissions of the defence.  I do not propose to set them out suffice it to say they have been taken into account.

36.  On the other hand, the plaintiff asks me to find A Leung is truthful.  First, he holds no grudge against the defendant and is only an employee of the plaintiff.  Moreover, his account about the said words has generally been supported by Shum on 19 February 2002 (see the testimony of J Cheung regarding what Shum during the meeting with her on 19 February 2002: “(b) J Cheung” below).

37.  Having considered all of the above, as well as A Leung’s demeanour when he testified, I conclude that he is a truthful and reliable witness.

(b)  J Cheung

38.  J Cheung adopted her witness statement as part of her testimony.  Her testimony is in brief as follows.

39.  She received a telephone call from W Lee between 5 pm and 6 pm on 19 February 2002.  She has known him for about 7 years.  W Lee told her that when his colleague A Leung met representatives of the Stock Exchange earlier that afternoon, the defendant uttered words which were defamatory of the plaintiff.  He sought legal advice from her.  J Cheung informed him the partners of her firm’s litigation department might be able to help.  W Lee asked for a short meeting with her first.

40.  Between about 6 pm and 7:15 pm on that day, J Cheung attended the meeting at Starbucks Café where also present were W Lee, A Leung and Shum.  A Leung told her the defendant said the defendant had seen two complications with the listing exercise of the mainland enterprise, one of them being the proposed sponsorship by the plaintiff.  J Cheung’s witness statement then states:

“[The defendant] … asked [A Leung], ‘you are not going to be sponsor, are you?’.  When [A Leung] replied that they [the plaintiff] certainly desired a role in the listing project, [the defendant] interrupted him and said, ‘No way’.

As I was told … the relevant conversation was conducted in Mandarin, I asked [A Leung] to repeat the exact words used by [the defendant] in Mandarin.  [Shum] volunteered to narrate the conversation between [A Leung] and [the defendant] in Mandarin … as referred to … above.  [Shum] mentioned that when [the defendant] interrupted [A Leung], [the defendant] uttered ‘不行’.  [A Leung] confirmed this to be the case.  I then reconfirmed the words ‘不行’ had been uttered by [the defendant] with both [Shum] and [A Leung].

[Shum] also said at the meeting that following [the defendant’s] utterance of ‘不行’ [Shum] immediately told [the defendant] that if required, an additional investment bank would be appointed and [the plaintiff] could take up a role as a co-sponsor …

The meeting lasted about 30 minutes” (para. 4 to 6 and 8 thereof).

41.  J Cheung was cross-examined only briefly and it was not suggested that her testimony was either untruthful or unreliable.  When the defendant testified, however, he suggested that J Cheung’s relationship with the plaintiff, W Lee and/or A Leung was unknown.  I understand him to be implying that J Cheung might have a motive to be untruthful and her testimony should be considered with that in mind.  The defendant’s said suggestion was, however, not put forth in the defendant’s written closing submissions (save perhaps a slight hint at para. 37 thereof).

42.  I have no doubt that J Cheung is a truthful and reliable witness.  I also place great weight on her testimony.

43.  The defendant asks me to attach little weight to J Cheung’s testimony.  In relation to this, I understand the defence to be referring to the part of J Cheung’s testimony where she related what was said during the meeting.  Reliance is placed on s. 49, Evidence Ordinance (Cap. 8) which provides:

“	(1)	In estimating the weight, if any, to be given to hearsay evidence in civil proceedings the court shall have regard to any circumstances from which any inference can reasonably be drawn as to the reliability or otherwise of the evidence.
	(2)	For the purposes of subsection (1), regard may be had, in particular, to the following-
		(a)	whether it would have been reasonable and practicable for the party by whom the evidence was adduced to have produced the maker of the original statement as a witness;
		(b)	whether the original statement was made contemporaneously with the occurrence or existence of the matters stated;
		(c)	whether the evidence involves multiple hearsay;
		(d)	whether any person involved had any motive to conceal or misrepresent matters;
		(e)	whether the original statement was an edited account, or was made in collaboration with another or for a particular purpose;
		(f)	whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight;
		(g)	whether or not the evidence adduced by the party is consistent with any evidence previously adduced by the party.”

I have borne in mind those provisions in assessing the testimony of J Cheung.

44.  As regards the narration given by Shum during the meeting, I bear in mind Shum has not been called to testify and hence the defendant was unable to cross-examine him.  On the other hand, it has not been suggested (and there is no basis for finding) Shum has any motive to be untruthful.  There is no evidence Shum (or Zhongjing) will stand to gain or lose.  Shum gave the narration very shortly after the Feb 2002 meeting.  It is generally consistent with the plaintiff’s case.  In these circumstances, I find Shum’s narration truthful and it is appropriate to also place weight on it.

(c)  W Lee

45.   W Lee was not present at the Feb 2002 meeting.  He was, however, present at the meeting with J Cheung on 19 February 2002.  His account of that meeting generally supports that given by J Cheung.

46.  I find him to be an impressive witness.  His answers in cross-examination were spontaneous, candid and to the point.  However, because he was not present at the Feb 2002 meeting, he cannot provide much assistance to the determination of this action.

47.  W Lee testified that A Leung also told him of another incident showing the defendant’s arrogance towards A Leung and/or Shum.  Since I already found that A Leung is a truthful and reliable witness, it is unnecessary to make any finding regarding this matter.  If it were necessary to do so, I would agree with the defence that it is strange nothing about this has been stated in any of the plaintiff’s witness statements nor was it mentioned by A Leung at any stage.

(d)  The Defendant

48.   On the other hand, I find the defendant to be a less than impressive witness.

49.  In the course of cross-examination, defence counsel, by reference to various documents including newspaper articles, advanced the point that the plaintiff was well-known as a “bad boy” in the Hong Kong stock market.  I do not understand this to mean that the plaintiff has acted unlawfully but merely that it has acted aggressively and sometimes in an unorthodox manner in some of the stock and share dealings.

50.  When the defendant testified, he denied having any prior knowledge as to the plaintiff’s general reputation, contending in essence that because his main duties were to market the Stock Exchange in the mainland, he has had practically no knowledge of the local situation.  I find there is an air of artificiality about this part of his testimony for the reasons set out in the next paragraph.

51.  I can only infer that the said materials used in cross-examination were provided to the defendant’s legal advisers by lay client.  Further, although the defendant’s post required him to market the Stock Exchange in the mainland, it is hard to believe that, being someone employed by the HKEx, the defendant has had absolutely no knowledge of the plaintiff.  In this connection, I assume that defence counsel’s point that the plaintiff is a well-known “bad boy” in the Hong Kong market is a valid one.  Office gossips apart, it is conceivable that exchanges regarding the Hong Kong market situation would often come up during contacts with mainland personnel whose companies were interested in coming to Hong Kong to be listed here.

52.  The defendant also asserted in testimony that as a matter of usage in Putonghua, the words “不行” would not be uttered in the manner described in A Leung’s testimony.  The defendant has not been put forward as a linguistics expert; he is only a factual witness.  In any event, I do not accept this assertion.  While not an expert in spoken Putonghua, I have been living in Hong Kong, an essentially Chinese-speaking community, for many years.  Chinese is my native language.  I have the chance of reading many writing works by authors who should be Putonghua speakers, and watching Putonghua television series and movies and so on.  I have seen those words being used in similar manner in daily spoken language on many occasions.

53.  In view of the above, it is strange why the defendant should put forth such an assertion.  I infer that he made up this assertion intending to create an inherent implausibility in A Leung’s testimony.

54.  Having so concluded, I note that people may make things up even when they are honest in relation to matters of real importance of the litigation at hand.

55.  In relation to the said words, which is the crucial dispute in this action, I need only to say that the points set out under the sub-heading “(a) A Leung” have again been considered for the purpose of this sub-heading.  In addition, the defendant is generally supported by the other defence witness regarding this (see more detailed discussion under the heading “(e) Defence Witnesses” below).

56.  Having borne all the above matters in mind, and with some reluctance, I find the defendant to be truthful.

(e)  Defence Witnesses

57.   Witnesses falling within this sub-heading are Lie, Hsu and C Cheung.  As will be set out in more detail below, each of them has adopted their witness statements as part of their testimony.

58.  The plaintiff has not suggested (whether during cross-examination or final submissions) that any of them has been untruthful or unreliable.  It is the plaintiff’s case that none of these witnesses can assist the defendant because (so the plaintiff contends) in their testimony, they merely said they could not remember if the defendant had uttered the said words.

59.  I disagree with the plaintiff’s contention.  It is true these witnesses sometimes said they could not recall some of the matters.  But these remarks have to be understood in context.

60.  Lie said the following in her witness statement (and therefore her testimony):

“… I understand … [the plaintiff] has alleged in its Statement of Claim (as supplemented by its Further and Better Particulars dated 23 April 2002) that the following conversation took place during the meeting … [the alleged conversation (including the said words) was then set out].

I recall that [the defendant] mentioned at the [Feb 2002 meeting] that there were ‘two complicated issues’ that needed to be addressed …

… I have no recollection of [the defendant] saying ‘no way’ or the Chinese words ‘不行’.  [The defendant] definitely did not say any words to the effect that [the plaintiff] could not be a sponsor” (emphasis supplied) (para. 12 to 14 thereof).

61.  Hsu said in her witness statement (and hence her testimony):

“I understand … [the plaintiff] has alleged in its Statement of Claim (as supplemented by its Further and Better Particulars dated 23 April 2002) that the following conversation took place during the meeting … [the alleged conversation (including the said words) was then set out].

I recall that during the [Feb 2002 meeting], [the defendant] mentioned that the listing exercise involved ‘certain complex issue(s)’ …

I also recall that there were some discussions relating to the sponsorship of the listing exercise but I do not recall the exchange between [the defendant] and [A Leung] … set out in paragraph 10 above.  I do not recall [the defendant] saying the words ‘no way’ or the Chinese words ‘不行’ …” (emphasis supplied) (para. 10 to 12 thereof).

62.  C Cheung said in her witness statement (and hence her testimony):

“I understand … [the plaintiff] has alleged in its Statement of Claim (as supplemented by its Further and Better Particulars dated 23 April 2002) that the following conversation took place during the meeting … [the alleged conversation (including the said words) was then set out].

… I have no recollection of any discussion such as that described … above.

I do recall, however, that [A Leung] said that [the plaintiff] had not yet been appointed as the sponsor … [A Leung] also said that the appointment of sponsors … would be put out to tender when the decision to list was confirmed.  [A Leung] mentioned that [the plaintiff] would like to be a co-sponsor …

I cannot now recall what [the defendant] said in relation to the topic of sponsorship.  However, I have no recollection of [the defendant] saying ‘no way’ or the Chinese words ‘不行”, or any words to the effect that [the plaintiff] could not be a sponsor …” (emphasis supplied) (para. 12 to 15 thereof).

63.  As a matter of daily language, when a person says that he cannot recall something, that statement usually has either of the following two meanings:

(a) he cannot remember whether that matter has happened or not;

(b) because that matter has never happened, it is impossible for him to have any recollection about it.

64.  The tenure of the testimony of the above 3 defence witnesses, when understood in proper context (that is, taking into account the passages quoted above), is that, when they testified they could not recall the defendant had uttered the said words, they were in effect saying the defendant has never done so (otherwise they would have recalled it).

65.  Accordingly, I find that these witnesses support the defendant’s case that the defendant has never uttered the said words.

66.  I also find them to be truthful and reliable.

VII.  Were the Words Uttered?

67.   Insofar as is possible, a civil court should avoid accepting the testimony of all witnesses when the factual accounts in their testimony differ and contradict each other.  Unfortunately, I find this to be a case where there is no valid reason to prefer the testimony of witnesses for the plaintiff to those for the defence regarding this issue.

68.  It is also not a case where any satisfactory conclusion can be reached regarding the witnesses’ credibility or reliability by an observation of their demeanour when they testified.

69.  Apart from the witnesses’ testimony, none of the documentary evidence is sufficient to establish that the said words have in fact been uttered by the defendant.

70.  The burden to prove that the said words have been uttered by the defendant falls on the plaintiff.  By reason of the above matters, the plaintiff has failed to satisfy me this has in fact occurred.

VIII.  Were the Words Defamatory?

71.   The defence contends that the said words were not defamatory.  By reason of the conclusion reached in relation to whether the said words were uttered by the defendant, it is strictly unnecessary to make any finding relating to this issue.  I shall do so for completeness.

72.  The process to determine whether words are defamatory is well known: there are two stages, first to decide what they mean, and then to decide whether that meaning is defamatory: Gatley on Libel and Slander (2004) 10^th Ed., para. 2.1.  Although it is recognised that there may be difficulty in producing a comprehensive definition of the meaning of “defamatory”, the following has been offered as (at least) a working definition of its meaning: a defamatory imputation is one to the claimant’s discredit, or which tends to lower him in the estimation of others or causes him to be shunned or avoided; or exposes him to hatred or ridicule: Gatley, para. 2.1, text to nn. 4 to 7.

73.  The interpretation of allegedly defamatory words is to be determined by the reasonable understanding of those words by an “ordinary reader”, or (as in this case) an “ordinary listener”: see Gatley, para. 3.14 and 3.24.  The words have to be understood in context and taken as a whole: Gatley, para. 3.28, 3.29 and 3.32.

74.  The defence contends that the said words, especially the Chinese words “不行”, bear various meanings and are not necessarily defamatory.  It is submitted that, in the context in which they were uttered, they could mean:

(a) “no way” (as the plaintiff contends);

(b) not practical or feasible;

(c) not realistic;

(d) not permitted or allowed;

(e) not acceptable or appropriate;

(f) not advisable.

75.  The context in which the said words were uttered was:

(1)	the said words must be related to the plaintiff’s role as a sponsor of the listing project by reason that it was uttered immediately after A Leung’s confirmation that the plaintiff would so act;
(2)	the defendant nodded when A Leung informed him the plaintiff could act as a co-sponsor in the listing project;
(3)	as admitted by the defence witnesses (including the defendant) a co-sponsor occupies an inferior position than a sponsor in a listing exercise.

This indicates the defendant agreed the plaintiff could have a lesser role in the listing project but he disagreed the plaintiff could take up the role of a sponsor.

76.  In these circumstances, I am satisfied that the “sting” of the meaning of the said words is:

(a)	the defendant, for his own reason, did not permit the plaintiff to be a sponsor in the listing project; or
(b)	the defendant, for his own reason, did not consider the plaintiff to be suitable to act as a sponsor in the listing project.

I also note that the said words were blunt and uttered impolitely.  However, because the exchange between A Leung and the defendant was very brief, I agree with the defence it is unknown if the said words were related to the plaintiff’s competence (or ability), reputation (or standing) or credibility.

77.  Accordingly, I agree with the defence that the said words do not bear any defamatory meaning.

IX.  Conclusion on Liability

78.  The plaintiff has failed to establish the defendant should be held liable.

X.  Quantum of Loss

79.  By reason of my earlier conclusion that the plaintiff has failed to establish the defendant’s liability, it is unnecessary to consider this aspect.  I shall do so for completeness.

80.  The defence argues that the slander is not actionable per se and the plaintiff has failed to prove it suffered any loss or damage as a result.  On the other hand, the plaintiff submits that the slander is actionable per se, being words calculated to disparage the plaintiff in its trade or business: Gatley, para. 4.2, sub-para. (3).  In view of the finding under the heading “Were the Words Defamatory?”, I am not satisfied that the said words are actionable per se.

81.  The plaintiff has helpfully clarified that it only seeks general damages (and not special damages) in this action.

82.  The underlying principle for awarding damages in defamation was set out in Hung Yuen Chan Robert v. Hong Kong Standard [1996] 4 HKC 519:

“	Damages
	(a)	General principles
		The objective is 'to restore the plaintiff, as far as money can do so, to the position he would have been in if the tort had not been committed'. See Duncan and Neill, Defamation, op cit para 18.04. Where there has been no retraction or apology, an order for damages is the only solatium available to the plaintiff.
		In the recent Court of Appeal decision in Cheung Ng Sheong Steven v Eastweek Publisher Ltd [1995] 3 HKC 601, it had to consider the question of damages for libel. It accepted (at p 613D-F) the submission that:
		... damages for libel must provide for several disparate elements, not only damage to esteem and reputation. They also 'must be sufficient to publicly and demonstratively and absolutely vindicate the plaintiff and to compensate for seriously injured feelings (Yu Kwong Chu v Consolidated Newspapers Ltd (A258/86, unreported) at p 30 not only caused by the original libel but all the subsequent aggravation thereof down to the verdict, which would restore the plaintiff's 'pride and confidence' (McCarey v Associated Newspapers Ltd (No 2) [1964] 3 All ER 947 at 958). They must enable the plaintiff to convince a bystander the baselessness of the charge if 'the libel driven underground, emerges from its lurking place at some future date' (Cassell & Co v Broome [1972] 1 All ER 801). … ” ( at p. 533, per Le Pichon, J.) (underline supplied).

83.  The plaintiff asks me to bear in mind the following features in this action:

(1)	the plaintiff has been a reputable and established player in the Hong Kong market;
(2)	the defendant is a senior staff of HKEx;
(3)	the said words were uttered in front of a representative of Zhongjing, one of the plaintiff’s clients.  Their effect would go beyond the GMC listing project;
(4)	professional reputation is difficult to build, but easily destroyed: Floydd v. Cheney [1970] 1 Ch. 602, 610;
(5)	the defendant refused to apologise and chose to defend this action.

84.  The defence disagrees with that approach and invites me to award only nominal damages.  The grounds put forth in support are:

(a) the plaintiff’s general reputation is bad;

(b) no commercial loss has resulted.

85.  I consider the ground put forth at sub-para. (b) above to be irrelevant to an award of general damages.  However, insofar as it may be suggested by the plaintiff that its general goodwill has suffered (see para. 83(3) above), I find that it is unlikely that a professional client such as Zhongjing (through Shum) would be so unsophisticated as to be affected by the verbal outburst of one individual in its assessment of the plaintiff’s competence, reputation and/or credibility.  Insofar as it may be argued by the plaintiff that the said words may make Zhongjing think that the plaintiff did not enjoy a good relationship with the Stock Exchange, that is not something related to the defamation.

86.   The said words (if defamatory) amount to a slander uttered in front of a relatively limited number of people.  They were only uttered briefly and not repeated.  In the circumstances of this action, its effect on the plaintiff is likely to be minimal.  None of the 8 previous awards in other litigations (referred to in the Annexure the plaintiff kindly provides) involve facts which are similar to this action.  Those awards range from $3 million (in 2001) to $65,000 (in 1987).  They were all libel cases and 6 of the awards concerned articles published in newspapers (and one magazine).

87.  Taking everything into account, if in fact an award has to be made, a sum between $30,000 to 60,000 would be appropriate.  Because I already concluded that the said words do not bear a defamatory imputation, it is impossible for a precise award to be made.

XI.  Costs Order Nisi

88.  There is no apparent reason to depart from the usual rule that costs should follow the event.  There will accordingly be a costs order nisi pursuant to Ord 42 r 5B(6) that the costs of this action be paid by the plaintiff to the defendant to be taxed if not agreed.