EMPEROR INTERNATIONAL HOLDINGS LTD v. ATNEXT LTD

HCA 2227/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2227 OF 2015

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DECISION
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1.  I have before me a summons dated 24 September 2015, for the continuation of an ex parte injunction granted on 23 September 2015.

2.  The plaintiff, Emperor International Holdings Limited, is and was at all material times a company listed on the Stock Exchange of Hong Kong, and the principal company in the Emperor group of companies.

3.  The defendant, a company incorporated in the British Virgin Islands, is the domain registrant of a website with the address of NextMedia.com.  That website is essentially the online version of the newspaper Apple Daily. 

4.  On 22 September 2015, at 8:49 am, 9:09 am and 9:32 am respectively, three articles with the following titles were published at the defendant’s website:

1. 涉英皇中心產權糾紛，北京國土局前局長自首。

(Translation: Being involved in the dispute over the property right of Emperor Centre, former head of Beijing Municipal Bureau of Land and Resources surrendered himself.)

2. 英皇產權糾紛搞10年，前局長也被騙？

(Translation: In the 10-year dispute over Emperor’s property right, the former bureau head was also deceived?)

3. 產權糾紛入法律程序，英皇國際改口風？

(Translation: Upon the commencement of legal proceedings over the property right dispute, Emperor International changed its tone?)

5.  The plaintiff alleged the articles contained statements defamatory of it and applied for an interlocutory injunction to restrain the publication of the first two articles.

6.  The articles, broadly speaking, reported that one Mr An Jiasheng, a senior government official in the Mainland, had confessed to certain Party disciplinary committee in Beijing, and that a complaint against him had been made to the authorities arising from his involvement in the development of an office building in Beijing.  Mr Zhang Yufang had acquired the development and had entered into a transaction with the plaintiff’s group for the sale and purchase of certain interests in that development.  The sting of the articles, in the submission of Mr Ng, who has appeared for the plaintiff, is that there is a suggestion that the plaintiff was involved in bribery of Mr An, which he said arises in particular from the statements identified in paragraphs 11(9) and (10) of the 1st affirmation of Ms Fan Man Seung, Vanessa.

7.  In fact, a dispute has arisen between Mr Zhang and a co-owner on the one hand, and the plaintiff group on the other, and there are legal proceedings pending in the Mainland brought by Mr Zhang against the plaintiff and other group companies.

8.  An ex parte application was made to the Duty Judge late at night on 22 September 2015, and an injunction was granted at around 1:10 am on 23 September 2015. 

9.  By the summons dated 24 September 2015 that I have mentioned, the plaintiff now seeks an order continuing the injunction until trial or further order.

10.  The summons was first returnable on 2 October 2015 at which, in order to secure an early hearing date, the defendant indicated it would not file any evidence but would oppose the continuation of the injunction on the basis of points of principle. 

11.  There are three main points canvassed before me this morning.  First, whether the application should have been made ex parte; secondly, whether the plaintiff has failed sufficiently to prove that the statements in question were false; and thirdly, whether the plaintiff has shown that the defendant will indisputably be liable for libel. 

12.  Turning to the first point, so far as the procedure is concerned, it is, in my view, plainly wrong for the plaintiff to have gone ex parte without any notice to the defendant.  It is well-established, and should have been well-known to all legal practitioners, that hearing an application and making orders on an ex parte basis are exceptional courses that require to be justified.

13.  In Ho Tak Eng v Fame Brilliant Ltd [2006] 1 HKLRD 34, at paragraph 8, Rogers VP said that: 

“… the application before the Deputy District Court Judge, as well as the application in this Court, was made ex.parte without any notice to the defendant. There was no justification for the application to be made without so much as giving even the shortest notice that the plaintiff’s lawyers would be appearing in front of the judge. Ex.parte applications without notice should only be made where either the delay would cause injustice to the applicant or the defendant would take action which would nullify the effect of the injunction. Apart from anything else, such a procedure is against the principles of natural justice.”

14.  In Re First Express Ltd [1991] BCC 782 at 785, in a passage quoted by Rogers VP in the Ho Tak Eng case, Hoffmann J said this:

“It is a basic principle of justice that an order should not be made against a party without giving him an opportunity to be heard. The only exception is when two conditions are satisfied. First, that giving him such an opportunity appears likely to cause injustice to the applicant, by reason either of the delay involved or the action which it appears likely that the respondent or others would take before the order can be made. Secondly, when the court is satisfied that any damage which the respondent may suffer through having to comply with the order is compensable under the cross undertaking or if the risk of uncompensable loss is clearly outweighed by the risk of injustice to the applicant if the order is not made.

There is, I think, a tendency among applicants to think that a calculation of the balance of advantage and disadvantage in accordance with the second condition is sufficient to justify an ex.parte order.  In my view, this attitude should be discouraged.  One does not reach any balancing of advantage and disadvantage unless the first condition has been satisfied.  The principle audi alterma partem does not yield to a mere utilitarian calculation.  It can be displaced only by invoking the overriding principle of justice which enables the court to act at once when it appears likely otherwise injustice will be caused.”

15.  These principles were emphasised again by Hoffmann LJ and Bingham LJ in TRP Limited v Thorley (unrep., The Times, 13 July 1993) in passages quoted by Rogers VP in Ho Tak Eng at paragraphs 9 and 10.

16.  At paragraph 11 of Ho Tak Eng, Rogers VP stated:

“I have quoted extensively from these judgments because, although they contain what is clear and well-established law which has been reiterated in judgments in Hong Kong, it is apparent and confirmed by the submissions made by counsel that these highly important principles are being disregarded. An ex.parte application is not a convenient alternative to an inter partes application.”

17.  In Brand Farrar Buxbaum LLP v Samuel-Rozenbaum Diamond Ltd, unreported, HCA 5191/1998, 8 May 2002, at paragraph 24, Ma J, as the Chief Justice then was, stated the principle as follows, adding a reference to the additional dimension of the fundamental right of equality before the law:

“One of the facets of equality before the law (a fundamental right guaranteed under Article 25 of the Basic Law) is that no order ought to be made by a court against anyone without his first being given a reasonable opportunity of being heard.  An exception to this fundamental rule is where ex parte orders are made by the court.  At the risk of repeating the obvious, ex parte orders are only made “where the situation is of such extreme urgency that there is literally no time to warn the defendant of what is proposed, or where the purpose of the injunction will or may be frustrated if the defendant is informed of what is proposed or where the defendant simply cannot be found”: see TRP Limited v Thorley, unreported 13 July 1993, English Court of Appeal, Bingham LJ.”

18.  In this case, the plaintiff saw the articles in the morning of 22 September 2015.  It was able to instruct solicitors and counsel who had the time to produce a 10-page affirmation and a 6-page skeleton for the application.  There was plainly sufficient time to give notice to the defendant if the plaintiff had wished to do so.  Mr Ng stressed there was urgency in the matter, but there was nothing in this case to prevent notice being given to the defendant during the course of 22 September 2015, even an hour or two prior to the hearing before the judge.  The articles were already on the website – this is not a case of quia timet injunction.  There is no suggestion let alone evidence of any further act that the defendant would do to frustrate the application if it was given notice of it.  Further publication might occur by internet users viewing and downloading the articles, but this would not be caused by any further act on the part of the defendant. 

19.  Lam Kwing Wai Alvin v Yeung Kang Lam (unreported, HCA 3452/2002, 10 October 2002) relied on by the plaintiff, is, in my view, a quite different case.  It was a case where there was a threat of some wider dissemination of certain leaflets defamatory of the plaintiff.  It would be misleading to rely on it as a general authority justifying an application for interlocutory injunction to be made ex parte in defamation cases.

20.  Likewise, there are passages in two textbooks relied on by Mr Ng, Carter-Ruck on Libel and Privacy (6^th Edition) at paragraph 15.4; and Price, Duodu and Cain, Defamation Law, Procedure & Practice (4^th Edition), at paragraph 21-06, suggesting that in certain cases, an injunction may be obtained without notice to the defendant.  As a statement of the court’s jurisdiction, that proposition is not in dispute.  The question is whether the circumstances of this case justify an application being made without notice to the defendant. 

21.  The cardinal principle of justice that the court must normally hear both sides, and must not normally make an adverse order against the party who has not had a chance of being heard, takes on even greater importance when the right of free speech and freedom of the press are engaged. In the United Kingdom, Section 12(2) of the Human Rights Act (1998) expressly provides:

“If the person against whom the application for relief is made (“the respondent”) is neither present nor represented, no such relief is to be granted unless the court is satisfied –

(a) that the applicant has taken all practicable steps to notify the respondent; or

(b) that there are compelling reasons why the respondent should not be notified.” 

No such statutory provision exists in Hong Kong but the spirit of that section is entirely consistent with and supported by the general approach of the court to ex parte application that I have just referred to. 

22.  To restrain the media (whether paper or electronic) from publishing certain statements is a strong thing.  The application ought not to have been made without notice to the defendant without compelling reasons.  There is none in this case.

23.  The ex parte injunction must be discharged for this reason alone.  This is not only a point of principle.  On the facts of this case, the effect of the application having been made ex parte was that none of the points raised by the defendant, in particular, the two points that I shall presently mention, was drawn to the attention of the Duty Judge.  Whether a fresh injunction should be re-granted is a separate question that depends inter alia on these further points. 

24.  The next point is this.  The affirmation for the plaintiff was made by Ms Fan, an executive director.  She merely asserted in paragraph 13 of her 1^st affirmation that the 12 statements quoted in paragraph 11 were ‘false’, without giving any evidence of any particulars.  The question of principle that Ms Lau or the defendant has taken is that on an application for interim injunction restraining publication of articles by the media, this is not sufficient.  In Coulson (William) & Sons v James Coulson & Co (1887) 3 TLR 846, Lord Esher MR said:

“The question of libel or no libel was for the jury. It was for the jury and not for the court to construe the document, and to say whether it was a libel or not. To justify the court in granting an interim injunction it must come to a decision upon the question of libel or no libel, before the jury decided whether it was a libel or not. Therefore the jurisdiction was of a delicate nature. It ought only to be exercised in the clearest cases, where any jury would say that the matter complained of was libellous, and where if the jury did not so find the court would set aside the verdict as unreasonable. The court must also be satisfied that in all probability, the alleged libel was untrue, and if written on a privileged occasion that there was malice on the part of the defendant. It followed from those three rules that the court could only on the rarest occasions exercise their jurisdictions.”

25.  In Quartz Hill Consolidated Gold Mining v Beall (1882) 20 Ch D 501, at 508, Jessel MR stated:

“In the present case, I think that the objections to the exercise of the jurisdiction are, at least three.  In the first place, the alleged libel is not proved to be untrue.  Now, for a plaintiff to come to a Court and say, “Prevent the publication of something which I do not prove to be untrue,” is a very strong thing indeed.  No doubt it has been said in some cases that the greater the truth the greater the libel; but that does not apply to interlocutory injunctions.  As a general rule the Plaintiff who applies for an interlocutory injunction must show the statement to be untrue.  Now, in this instance, the only witness for the Plaintiff is their secretary, who says not that the circular is untrue, but that the statements in the circular are to the best of his knowledge, information, and belief utterly untrue.  He does not show that he has any knowledge at all on the subject of these statements.  He probably as secretary has some knowledge about them, but he does not show it; and where an affidavit is made upon information and belief, the rules of the court require that the deponent should state what are the grounds of his information and belief, and that he does not do, he only says that they are untrue to the best of his knowledge, information, and belief, not saying what the best of his knowledge is, and it may be nothing at all. There is, therefore, no evidence as to the untruth of the allegations in this circular.  And on the other hand, the Defendant has pledged his oath that he verily believes they are true.  In this state of the evidence I am of the opinion that no injunction ought to have been granted.”

26.  In Target Newspapers Ltd v Narain [1989] 2 HKC 16, at p 19, MacDougall JA, giving what appears to be the judgment of the court, said:

“The judge stated that he accepted that the law applicable to the granting of an interlocutory injunction in defamation cases was correctly summarised in three propositions advanced by Mr Bunting, and with which leading counsel who was then appearing for the plaintiff agreed. Mr Bunting accepts that these propositions were accurately stated by the judge as follows:

‘First, that the American Cyanamid principles do not apply in these circumstances.  Secondly, before a court can in its discretion grant an interlocutory injunction the court must be satisfied that the publication is defamatory of the plaintiff, and thirdly there must be strong prima facie evidence that the statements are untrue.’ ”

27.  In Ki Ming Po v Yeung Wai Hong [1993] 1 HKC 595, at 596C, Godfrey J also referred to the same principles, and in particular, to the statement of Jessel MR in Quartz Hill that as a general rule, a plaintiff who applies for an interlocutory injunction must show the statement to be untrue. 

28.  Mr Ng for the plaintiff referred me to the case of Chan Shui Shing Andrew v Ironwing Holdings Ltd [2001] 2 HKC 376, 378H which set out four criteria for granting an interim injunction in defamation cases, namely:

“(a) the statement is unarguably defamatory;

(b) there are no grounds for concluding the statement may be true;

(c) there is no other defence which might succeed;

(d) there is evidence of an intention to repeat or publish the defamatory statement.”

29.  Mr Ng submitted there is no suggestion there of an additional requirement as Ms Lau has suggested.  In my view, what Ms Lau has suggested based on the authorities is a reflection of the second condition which requires the court to be satisfied that there are no grounds for concluding the statement may be true. 

30.  It seems to me that Ms Fan’s affirmation consists of a bare and broad assertion.  She said the statements, of which 12 have been quoted by her in paragraph 11, were false, but she did not give any particulars.  It was further not clear what was within her personal knowledge and what was based on information and belief.  If it was based on information, the sources were not stated as required by Order 41, rule 5(2).  While that affirmation was made in some haste for an urgent application, the plaintiff has since known that objection would be taken to the sufficiency of the evidence.  It is well-established that the rule should be strictly complied with where objection is likely to be taken, especially where it is an objection of substance and not a mere technical frivolous objection: see Leung Kin Fook v Eastern Worldwide Co Ltd [1991] 1 HKC 55.  Compare Quartz Hill at p 508. 

31.  Mr Ng further submitted that the defamatory statement is as a matter of law presumed to be false.  Whatever the position may be when it comes to the trial, in my view the cases show that the onus lies on the plaintiff to show prima facie falsity, an onus that the Court of Appeal said in Target Newspaper (supra) at p 23G, to be:

“… almost invariably … greater than that which a plaintiff in a libel action must face at the trial itself.”

32.  Then Mr Ng said the requirement does not apply here because the defendant has not filed any evidence.  He sought to distinguish the above authorities as cases in which the defendant had adduced evidence supporting the truth of the statements published.  Mr Ng further relied on the decision of District Judge Mimmie Chan, as she then was, in Law Kin Man Freeman v Chan Kin Hung (unreported DCCJ 4563/2007, 3 December 2007) at paragraph 40, but that seems to me to be a very different case, as shown in paragraph 41 of that decision, where the judge concluded that the defence of justification could not succeed in the light of the evidence produced by the plaintiff.

33.  It seems to me that in the circumstances of this case, it is open to the defendant to take, as a point of principle, the objection that the evidence relied on by the plaintiff in the ex parte application and unsupplemented by any further evidence filed by the plaintiff is defective in the ways that I have already described. 

34.  The third main point canvassed this morning was the defence of reportage on which Ms Lau said on instruction that the defendant would rely.  This may be said to be a special form of responsible journalism defence, but has “distinctive features of its own”.  In the case of Jigme Tsewang Athoup, also known as Jigme Rinpoche v Brightec Ltd, (unreported, HCA 1693/2011, 13 January 2015) apparently the first case in which that defence was invoked in Hong Kong, Deputy Judge Lok, as he then was, took the view that the defence was available under Hong Kong law, and adopted the principle set out by Ward LJ in Roberts v Gable [2008] QB 502, especially at paragraph 61: see Jigme at paragraphs 62, 64 and 73. 

35.  In Roberts v Gable, in particular, it was said (at p 527):

“In a true case of reportage there is no need to take steps to ensure the accuracy of the published information.

…

To qualify as reportage the report, judging the thrust of it as a whole, must have the effect of reporting, not the truth of the statements, but the fact that they were made.

…

If upon a proper construction of the thrust of the article the defamatory material is attributed to another and is not being put forward as true, then a responsible journalist would not need to take steps to verify its accuracy.  He is absolved from that responsibility because he is simply reporting in a neutral fashion the fact that it has been said without adopting the truth.”

36.  The two statements appearing in the second article and referred to in paragraph 11(9) and (10) of Ms Fan’s 1st affirmation that are principally replied upon by the plaintiff in this case, are, in fact, expressly stated in the article to be quoted from Mr Zhang Yufang, the writer was quoting what Mr Zhang said.  In reply, Mr Ng did not, in my view, deal with the defence head on, but referred to the repetition rule in Gatley on Libel and Slander (12th Edition), at paragraph 11.18.  However, it is clear from Roberts v Gable and Jigme, that if the publication falls within the reportage defence, then the publisher may not be liable despite the repetition rule.  

37.  As Deputy Judge Lok said in Jigme at paragraph 60:

“… Ward LJ held that the repetition rule and reportage are not in conflict with each other. The former is concerned with justification, the latter with privilege. A true case of reportage may give the journalist a complete defence of qualified privilege. If the journalist cannot establish such defence, then the repetition rule applies and the journalist has to prove the defamatory words.”

And at paragraph 86:

“The report being of a fact that certain statements were made, as opposed to mere repetition of the defamatory allegations, is why the “repetition rule” is said not to apply in reportage cases.”

38.  Mr Ng also submitted that there had been no proper verification by the defendant of the statements, but this also ignores the fact that verification is not a requirement for the defence of reportage to operate: see Roberts v Gable at paragraphs 61(2) and (3), and Jigme at paragraph 77.

39.  Given the limited argument that has been advanced on this defence the plaintiff has failed to persuade me that the defendant cannot possibly succeed on this ground at trial.  On well-established principles which give great emphasis to the protection of the right of free speech, that is sufficient basis for refusing the injunction. 

40.  I might add that as far as I can see, the defence of reportage was not drawn to the attention of the Duty Judge, as opposed to the general Reynolds defence of responsible journalism.[1]

41.  I should mention that in any event, the main statement objected to by the plaintiff being in the second article, there does not seem to me to be to be any clear basis for the restraint on the publication of the first article.  For the foregoing reasons, I will dismiss the summons. 

(Submissions on costs)

42.  This seems to me to be a discrete application, and increasingly, if not invariably, after the Civil Justice Reform, the court looks at these matters discretely.  Where a party has completely failed upon an interlocutory application, as here, I see no reason why it should not be made responsible for the costs.  Taking into account the criticisms that I have levelled against the plaintiff in applying for the injunction on an ex parte without notice basis in the first place, I think this is a clear case for ordering the costs of the application against the plaintiff and in favour of the defendant.  In lieu of taxation, I will be prepared to conduct a summary assessment of the costs on paper. 

43.  For that purpose, the defendant should submit a statement of its costs within 14 days.  The plaintiff may submit a statement of its objections within 21 days and, if necessary, the defendant may respond within 14 days.