XU YING v. XU WEIHONG

CAMP 216/2020

[2021] HKCA 1416

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 216 OF 2020

(ON AN INTENDED APPEAL FROM HCA NO. 2650 OF 2017)

CACV 421/2021

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 421 OF 2021

(ON APPEAL FROM HCA NO. 2650 OF 2017)

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J U D G M E N T

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Hon Cheung JA (giving the Judgment of the Court) :

I. The appeal

1.  This appeal is concerned in the main with the service out of jurisdiction provision of Order 11, rule 1(1)(f) of the Rules of the High Court (‘RHC’) which provides that :

‘ (f) the claim is founded on a tort and the damage was sustained, or resulted from an act committed, within the jurisdiction;’

The gateway of this rule is the commission of a tort (‘Gateway F’).  The tort may be committed outside or within Hong Kong.  Where the tort was committed outside Hong Kong, the necessary requirement is that the damage was sustained in Hong Kong.  This has been interpreted as meaning that significant damage was sustained in Hong Kong : Fong Chak Kwan v Ascentic Limited and othersCACV 358/2020, [2021] HKCA 1138 following Dynasty Line Ltd v Sukamto Sia [2009] 4 HKLRD 454.  The other situation is where the tort was committed in Hong Kong and the damage has resulted from such an act.

2.  In this case, the plaintiff relied on two types of tort being committed by the defendant in Hong Kong, namely, defamation and malicious falsehood.  The plaintiff claimed that the defendant who is a resident in the Mainland had published defamatory words against him in Hong Kong and also committed the tort of malicious falsehood.  The plaintiff also sought an injunctive relief under Order 11, rule 1(1)(b) (‘Gateway B’).  He obtained an order from the Master for the concurrent writ to be served on the defendant outside the jurisdiction. The service out order was, on the application of the defendant, set aside by Deputy High Court Judge M K Liu.  The Judge refused to grant leave to appeal.  In CAMP 216/2020, the plaintiff renewed the application for leave to appeal before us.  The Court directed a rolled up hearing in that if the Court was to grant leave, it would proceed immediately to hear the appeal. Upon hearing the parties, the Court granted leave.  The plaintiff had according to our direction filed and served the notice of appeal in CACV 421/2021. 

II.     Background

3.  The Judge summarised the case as follows :

‘ Background

5.     At the material times,

(1)    P [i.e. the plaintiff] was the chairman, shareholder and director of China Review News Agency Limited (中國評論通訊社有限公司, “CRNA”), a company incorporated in Hong Kong on 1 February 2005. According to P, CRNA is a digital network news agency in the Greater China Region.

(2)    P was also a non-executive director and vice chairman of eBiz.com Limited. The name of the company was changed to China Gas Holdings Limited (中國燃氣控股有限公司, “China Gas”) in August 2001. On 2 June 2003, P was the executive director and vice chairman of China Gas. P was removed from the board of China Gas by a resolution passed during an EGM on 26 April 2011.

(3)    According to P, he had “close connections” with the Liaison Office of the Central People’s Government in the HKSAR (中央人民政府駐香港特別行政區聯絡辦公室, “LOCPG”) and Taiwan Affairs Office of the State Council (國務院台灣事務辦公室, “TAO”). P also claimed that he was an official of the TAO.

6.     D is ordinarily resident in Cangzhou City, Hebei Province in Mainland China. D’s case is that at the material times, she held various management positions with different subsidiaries of China Gas, and positions with various government departments in Cangzhou City.

7.     On 16 November 2011, a group who claimed to be minority shareholders of China Gas published a statement in “Sharp Daily”, a newspaper in Hong Kong (“the Sharp Daily Article”), demanding China Gas to explain, inter alia, whether a company called 重慶市川東燃氣工程建設有限公司(“Chongqing Chuandong”) is a corporation owned by connected persons and senior management of China Gas. According to the Sharp Daily Article:

(1)    武漢中燃實業有限公司(“Wuhan China Gas”) and 深圳中油嘉禾貿易發展有限公司 (“Golden Harvest”) held 51% and 39% respectively in Chongqing Chuandong as of 31 May 2006. It is alleged that Wuhan China Gas then transferred 7% of its shareholding to Golden Harvest on 17 August 2006, resulting in Golden Harvest holding 46% in Chongqing Chuandong.

(2)    D became the legal representative and sole shareholder of Golden Harvest since December 2007.

(3)    The alleged minority shareholders questioned why Wuhan China Gas transferred its shareholding to Golden Harvest.

8.     On or about 20 November 2011, D signed the Declaration, in which she provided a response to the allegations in the Sharp Daily Article. The gist of the response is as follows:

(1)    Towards the end of 2007, P (who purportedly represented the TAO) contacted D and signed a trust agreement with D for D to hold shares in Golden Harvest on behalf of CRNA (ie the Trust Agreement).

(2)    D [i.e. the defendant] was told by P that the CRNA was a fully funded organization by the TAO in Hong Kong, and Golden Harvest was the working platform for CRNA in Shenzhen. For confidentiality reasons, CRNA did not want to hold shares in Golden Harvest directly.

(3)    Because D worked for the government, TAO gave the approval for D to hold the relevant shares.

(4)    As such, D was only a nominee shareholder of Golden Harvest, and did not concern herself with the operation of the company.

(5)    D learned that P had disclosed the above to newspapers in Hong Kong and put the blame on D. As a result, D wished to disclose the Trust Agreement with the Declaration and specifically asked that the relevant senior departments of the TAO to clear D’s name on this matter (請國台辦上級相關部門還本人 一個清白).

9.   The Trust Agreement specifies that, inter alia, D would hold the 100% shares in Golden Harvest as nominee only and CRNA would have all beneficial interest in the shares.

10.   P’s case is that the Trust Agreement is forged and the content of the Declaration is false. P says that by publishing the same in Hong Kong, D has committed libel and malicious falsehood.

11.   The details of the alleged publication of the Declaration and the Trust Agreement in Hong Kong are as follows:

(1)    P claims that the Declaration and Trust Agreement had been published, either by D or through Mr Feng Zhuozhi (“Feng”), a former non-executive director of China Gas, to other third parties in Hong Kong. This is denied by D.

(2)    According to P, he first discovered the existence of the Declaration and Trust Agreement in late December 2011 when he was informed the same from officials of the TAO and the LOCPG:

(a)    Mr Li Xiaoyun (“Li”) (allegedly a director of Centre of Strait Economy & Science‑Tech Cooperation (海峽經濟科技合作中心, “CSESC”, an institution under the TAO) and the TAO, informed P that someone (which P claims to be Feng) had provided the Declaration and the Trust Agreement to the LOCPG.

(b)    According to media reports, Li was also one of the “parties” (當事人) to the relevant events concerning the Declaration and the Trust Agreement, and a former director of China Gas who was removed in the same EGM on 26 April 2011 along with P.

(c)    P claims that he attended the office of LOCPG in Hong Kong on 27 December 2011 and met with a Mr Tang Yiyuan (“Tang”), allegedly the director of the Taiwan Affairs Department of the LOCPG. It is said that P was shown the Declaration and the Trust Agreement during this meeting, and the documents were annexed to a “Report Letter” allegedly from Feng. The “Report Letter”, however, has not been produced by P in these proceedings.

12.   P has produced the following media reports in the Mainland concerning the Declaration and/or the Trust Agreement:

(1)    an article in Beijing Times (京華時報) dated 24 March 2012; and

(2)    an article in China Business Journal (中國經營報) dated 20 August 2012 (“China Business Journal Article”).’

III.     The Judge’s decision

4.  The Judge applied the test adopted by this Court in Oriental Group Ltd v Google LLC [2018] 1 HKLRD 1042 for service out under Gateway F, namely, whether a real and substantial tort has been committed in Hong Kong.  He accepted the defendant’s submission that there is no convincing evidence showing a good arguable case that a real and substantial tort has been committed by the defendant in Hong Kong.  He held :

‘ 18. There is no convincing evidence showing substantial publication of the Declaration and/or the Trust Agreement in Hong Kong.

(1)    It is not P’s case that D has circulated the Declaration and/or the Trust Agreement to Feng or any other third parties in Hong Kong.

(2)    There is no apparent reason why D would have intended for the LOCPG in Hong Kong to receive (whether through Feng or otherwise) the Declaration and the Trust Agreement. The Declaration made no reference to the LOCPG or any entity in Hong Kong. Instead, D specifically requested in the Declaration that the relevant senior departments of the TAO to clear her name (請國台辦上級相關部門還本人一個清白).  It is common ground that the TAO is an office of the State Council in the Mainland.

(3)    According to P, the Declaration and the Trust Agreement have been seen by the individuals specifically named by P, namely Li and Tang.  Even if this is true, this cannot amount to substantial publication, let alone substantial publication in Hong Kong.

(4)    Based upon the evidence adduced by P, I am not convinced that P has shown a good arguable case on substantial publication of the Declaration and the Trust Agreement within LOCPG.  As to the alleged “Report Letter” from Feng to LOCPG, no copy of the “Report Letter” has been produced by P.  According to what has been said by P, apart from the meeting on 27 December 2011, there has not been any action taken by the LOCPG regarding the Declaration and the Trust Agreement.  Based upon the bare assertions made by P, I am of the view that there is no sufficient evidence showing a good arguable case that there has substantial publication of the Declaration and the Trust Agreement within the LOCPG.

(5)    P alleges that the Declaration and the Trust Agreement have been published in Hong Kong by Ms Guo Juan (“Guo”), Vice President of China Gas.  The only basis of this allegation is the China Business Journal Article.  In my view, the reliability of the report in the China Business Journal Article is in doubt.  If what has been said in the China Business Journal Article (ie Guo has published the Declaration and the Trust Agreement in Hong Kong) were correct, it is most unlikely that there would be no media report in Hong Kong, or any indication by the regulatory authorities in Hong Kong of any investigation or inquiries in relation to the Declaration and the Trust Agreement.  In any event, even if the report in the China Business Journal Article is correct, that would only be publication of the Declaration and the Trust Agreement in Hong Kong by Guo, and not publication of the documents in Hong Kong by D.

(6)    The only media reports adduced by P in relation to the Declaration and the Trust Agreement are published by media in the Mainland.  That would not be evidence showing any publication of the Declaration and the Trust Agreement in Hong Kong, let alone substantial publication.

19.   Further, based upon the evidence before the court, even if P succeeds on liability in this case, the alleged damage suffered by P would be minimal.

(1)     P has adduced no evidence to show his alleged reputation in Hong Kong.

(2)    Despite the alleged publication of the Declaration and the Trust Agreement in Hong Kong, P has remained the Chairman, director and shareholder of CRNA at all material times.  P has not claimed that his “close connections” with the LOCPG and TAO had been affected in any way.

(3)    P placed emphasis on his role with the CRNA.  However, CRNA’s alleged focus is on cross‑strait affairs between the Mainland and Taiwan, and P has not explained why his reputation in Hong Kong would be critical to his role in the CRNA.

(4)    If P indeed had a significant reputation in Hong Kong, and there was substantial publication of the Declaration and the Trust Agreement, it is inherently unlikely that there would be no evidence of any media report of the matter in Hong Kong.

(5)    P took no step to protect his reputation until commencing these proceedings in November 2017, despite his claim that he already knew of the existence of the Declaration and Trust Agreement in December 2011.  This is inexplicable if he has any genuine concern to protect his reputation in Hong Kong.

20.   In my judgment, P has failed to show a good arguable case that D may have committed a real and substantial tort in Hong Kong.  No leave to serve the proceedings out of Hong Kong should be granted to P under Order 11 rule 1(1)(f).

21.   Further, since I have decided that P has not shown a good arguable case that D may have committed a real and substantial tort in Hong Kong, I am of the view that the court’s discretion should be exercised against granting leave to serve the proceedings out of Hong Kong under Order 11 rule 1(1)(b).’

5.  He further held in respect of the injunctive relief under Gateway B ：

‘ 22. P submits that he is claiming for a declaration that the Trust Agreement was forged and had no real effect and this claim should fall within Order 11 rule 1(1)(b). With respect, I do not agree. Order 11 rule 1(1)(b) is only concerned with injunctive relief. In any event, for the reason set out in the above, no leave to serve the proceedings out of jurisdiction should be given concerning the entire claim of P.’

6.  The Judge held that there is no serious issue to be tried on the malicious falsehood claim as the plaintiff had not pleaded pecuniary loss and could not rely on section 24 of the Defamation Ordinance (Cap 21) ‘DO’.

7.  The Judge held that Hong Kong is not the forum conveniens in that ‘there is no evidence showing there has been substantial publication of the Declaration and the Trust Agreement in the Hong Kong.’  The appropriate forum should be in the Mainland by reason of the publication of the material there.

8.  The Judge held that there was material non‑disclosure by the plaintiff in respect of the affirmation of his solicitor, Mr. Tang Shu Pui, Simon, filed in support of the ex parte application for leave to serve out in respect of two matters :

‘ (1) In Simon 1^st [7] and [9], it was alleged that D [i.e. the defendant] had “directly” published the Declaration in Hong Kong and “indirectly” provided the same to the LOCPG in Hong Kong. This is misleading and is clearly inconsistent with P’s [the plaintiff’s] present pleaded case. In the Amended Statement of Claim [18], the reference to publication in Hong Kong by D to Feng has been deleted.

(2)     In Simon 1^st, no factor which may undermine the jurisdiction of the Hong Kong court, or point to the Mainland as the appropriate forum instead, has been mentioned.’

9.  The Judge refused to re‑grant the leave.

IV.     Grounds of appeal

10.  Mr. Chang SC (together with Ms Wu and Ms Hung) for the plaintiff advanced the following grounds of appeal as summarised in the plaintiff’s statement for leave to appeal :

1)     Gateway F is satisfied

(1)     The Judge applied the wrong testfor service out by postulating a general test of a real and substantial tort committed in Hong Kong.  He further compounded the error by equating it with ‘substantial publication’, overlooking that a single publication can be sufficient for a claim in defamation or malicious falsehood.

(2)     The Judge has ignored the plaintiff’s pleaded case when he held that ‘[i]t is not [the plaintiff’s] case that [the defendant] had circulated the Declaration and/or the Trust Agreement to … any other third parties in Hong Kong’.

(3)     The Judge erred in finding that there was no clear evidence to show the defendant’s commission of a real and substantial tort in Hong Kong when :

i)     The defendant admitted signing the Declaration and the Trust Agreement (and continues affirming their existence and contents).

ii)     The defendant had manufactured the malicious falsehoods for transmission to third parties in Hong Kong, expressing ‘particular concern’ about China Gas’ Minority Shareholders’ Statements in Hong Kong Sharp Daily (「爽 報」) on 16 November 2011.  The defendant also explained that she had taken step to clarify by making the Declaration (dated 20 November 2011), in which the defendant affirmed and exhibited the Trust Agreement as a true document.

iii)     The plaintiff himself saw copies of these documents (attached to Feng’s Report Letter) in the office of LOCPG in Hong Kong on 27 December 2011.  Defamation is published and the damage occurs where the publication is comprehended by the reader and it ordinarily occurs where the material is made available (see Berezovsky and Another v Michaels and Another [2000] 1 WLR 1004 at 1012D‑E and Oriental Press Group Ltd v Fevaworks Solutions Ltd(2013) 16 HKCFAR 366 at [18]‑[19]).

(4)     The Judge’s conclusion of ‘minimal’ damage suffered by the plaintiff is unfounded in view of :

i)     The plaintiff’s clear evidence of his reputation in Hong Kong; and

ii)     Thelaw presuming damageto arise from the publication in libel.  Libel is actionable per se.

2)     Misconstruction and misapplication of section 24 ofDefamation Ordinance (‘DO’)

(5)     The Judge misconstrued section 24 of DO.  He failed to consider the amended statement of claim properly and reached the wrong conclusion that there was no serious issue to be tried.Such conclusion would defeat section 24 of the DO of its intended purpose by in effect requiring the plaintiff to prove actual pecuniary damage – especially absurdhere where the defendant has made the most serious allegations against the plaintiff calculated to causepecuniary damage.

3)     Gateway B

(6)     In relation to Gateway B, the Judge erred in thinking that the plaintiff was only claiming a declaration but not an injunctive relief.  In finding that there was no evidence to show the defendant’s desire to make continuous use of the Declaration and the Trust Agreement, the Judge has ignored the defendant’s evidence of her continuing insistence that the Declaration and the Trust Agreement were true.

4)     Hong Kong is clearly and distinctly the appropriate forum     

(7)     The Judge erred in ruling that Hong Kong was not the appropriate forum.  He ignored the core fact that the defendant has published the Declaration and the Trust Agreement in Hong Kong, including to LOCPG in Hong Kong.  The plaintiff should be entitledto vindicate his reputation in the jurisdiction.

5)     No deliberate material non-disclosure

(8)     The Judge erred in finding that there was deliberate material non-disclosure on the part of the plaintiff and refused to re‑grant leave.  Regardless of whether there was publication to anybody else in Hong Kong, there was direct evidence of publication to this most important organ of state power in Hong Kong namely the LOCPG.  Even assuming the evidence fell short of proving that Mr. Feng himself, notwithstanding his connections with China Gas in Hong Kong, was physically present in Hong Kong, that is a matter that pales in materiality and significance given the other facts and evidence.  The Judge’s errors, particularly with regard to his conflation of real and substantial tort in Hong Kong with his mistaken requirement of substantial publication, his overlooking the other causes of action and relief claimed, etc. must have affected his perception of materiality in the exercise of discretion, leading him to make this draconian and disproportionate order of setting aside entirely the leave and refusing a re-grant of any part thereof.

V.     Our view

1)     Gateway F

11.  In Oriental Press Group Ltd v. Google LLC, defamatory words were published in the internet against three local plaintiffs.  This Court followed the approach in Jameel v Dow Jones & Co Inc [2005] QB 946 and held :

‘It is common ground between the parties that in respect of publication on the internet, the test for the application of this rule depends on whether a real and substantial tort has been committed in Hong Kong.’

12.  In Oriental Press Group Ltd v. Google LLC, the defendant was an internet search and advertising technologies corporation headquartered in the USA.  It was the provider, administrator, manager and operator of the website ‘www.google.com.hk’ (the website).  The plaintiffs commenced these three actions against the defendant for defamation, claiming that the results of a search carried out by the plaintiffs’ solicitors on the website and various articles posted on a blog and Internet discussion forum operated by the defendant were defamatory of the plaintiffs.

13.  Although Item 1 of the first ground of appeal stated that the Judge had adopted the wrong test, it is clear from Mr. Chang’s oral submission that he is not suggesting that a different test should be adopted.  Rather, his submission is that the term ‘real and substantial tort’ should be properly understood.  All that it means is that the tort has in substance occurred in Hong Kong and one must not confuse substantial tort with the extent of its publication. 

14.  In our view, to begin with, it is important to bear in mind that leave to serve out is an exercise of discretion by the Court.  The Order 11, rule 1 provision is specifically subjected to the Spiliada requirement that Hong Kong is the appropriate forum to try the case.  Hence, in the context of applying for leave to serve out or setting aside the order granting leave, it is not merely sufficient to show that the tort of defamation has been committed here and the damage has occurred here, it is also necessary to show that the tort committed here is a real and substantial one.  What Lord Steyn held in Berezovsky and Another v. Michaels and Another at page 1012 D is instructive :

‘ The English law of libel has three distinctive features, viz. (1) that each communication is a separate libel: Duke of Brunswick v Harmer (1849) 14 Q.B. 185 and McLean v. David Syme & Co. Ltd (1970) 92 W.N. (N.S.W.) 611; (2) that publication takes place where the words are heard or read: Bata v Bata [1948] W.N. 366; Lee v. Wilson and Mackinnon (1934) 51 C.L.R. 276; and (3) that it is not necessary for the plaintiff to prove that publication of defamatory words caused him damage because damage is presumed: Ratcliffe v Evans [1892] 2 Q.B. 524, 529, per Bowen L.J. The rigour of the application of these rules is mitigated by the requirement that in order to establish jurisdiction a tort committed in the jurisdiction must be a real and substantial one: Kroch v Rossell et Compagnie Société des personnes à Responsibilité Limitée [1937] 1 All E.R. 725.’ (emphasis added)

15.  In that case, according to the headnote, the plaintiff, an American business magazine published an article alleging that the plaintiff, B., a prominent Russian businessman who also held a senior post in the Russian government, was, in fact a leader of organised crime and corruption in that country.  The article further alleged that the plaintiff, G., another Russian businessman, was one of B.’s criminal associates.  Sales of that issue of the magazine amounted to approximately 785,000 in the United States and Canada, 1,900 in England and Wales and 13 in Russia.  Each plaintiff, who was a frequent visitor to England for the purposes of business and, additionally in the case of B., to visit members of his family resident in England, sought to issue defamation proceedings in the High Court against the defendants, the editor and publishers of the magazine, claiming damages restricted to the injury to their reputations in England.  The master gave both plaintiffs leave to serve writs out of the jurisdiction pursuant to R.S.C., Ord. 11, rr. 1(1)(f), 4(2).  The House of Lords upheld the Court of Appeal’s holding that on the facts of the case, England was the appropriate forum. 

16.  Lord Steyn referred to Kroch which applied the principle first stated in Johnson v Taylor Brothers & Co Ltd [1920] AC 144.  Slesser LJ in Kroch held at page 728 :

‘ Now, in this particular case, it does appear prima facie that this is not a question of substance in this country. As was pointed out in Johnson v. Taylor Brothers & Co., Ltd. (2), at p. 153, by Viscount Haldane, the court may :

“refuse to give such leave in an instance in which the proceeding, though for a breach within the jurisdiction and in the letter within the terms of the rule, is in substance not so.”

In my view, this case, rightly considered, falls within that observation.  It is a case where I assume in favour of Mr. Slade that, technically, there is a breach within the jurisdiction and in the letter within the terms of R.S.C., Ord. 11 (r. 1) (ee), but in substance it is not so.’

17.  Scott LJ in Kroch held at page 731 :

‘ That principle was endorsed in the House of Lords in Johnson v. Taylor Brothers & Co. Ltd. (2), and particularly in the judgment of Lord Buckmaster, at [160], [161] :

“It must, however, be remembered that the issue of the writ, even in a case within the words of the rule, can only be made by leave of the court, and in granting such leave, regard ought to be had to the real breach in respect of which the action is brought, and not merely to a breach on which it is necessary to rely, not to obtain relief, but only to found jurisdiction under the rule. …… but the point of the observation is that the reality of the question ought to be looked at, and, if the reality of the cause of action is one which belongs to a foreign country, and not to this country, and, above all, where it is a question which probably would be better tried, for any particular reason which appears in the circumstances of the case, in the foreign country, leave ought not to be granted.” ’

18.  Hirst LJ in the Court of Appeal decision of Berezovsky [1998] I.L.Pr. 358 explained :

‘ [81] Consequently I come back to Mr Price’s central argument based on the English authorities. It goes without saying that where, as in a case like Kroch v. Rossell, there is no complaint of substance as regards an English tort at all, either because there is only an insignificant English circulation, or because the plaintiff has no connection with or reputation to protect in this country, or perhaps on both counts, he will inevitably fail the Spiliada test.

[82] What we have to consider is the case where there is a substantial complaint as regards an English tort, having regard to the scale of the publication and the extent to which the plaintiff has connections with and a reputation to protect in this country.’

19.  Lord Phillips of Worth Matravers MR restated the real and substantial tort test in Jameel. Having first held at [24] that Duke of Brunswick stood as authority that ‘each separate publication gives rise to a separate cause of action’ he went on to hold :

‘ 50. It is in the context of an application to set aside service outside the jurisdiction on such grounds that the question of whether “a real and substantial tort has been committed within the jurisdiction” has been relevant. In Kroch v Rossell et Cie Société des Personnes à Responsibilité Ltd [1937] 1 All ER 725 the plaintiff brought libel proceedings against the publishers of a French newspaper and a Belgian newspaper. He obtained permission to serve each defendant out of the jurisdiction on the ground that a small number of copies of each newspaper had been published in England. The vast bulk of the publications had been in France and Germany. The defendants applied successfully to have the order giving permission to serve out set aside. Slesser LJ remarked, at p 729:

“in no sense can it be said that there is any substantial importation of these papers in England, or that the libel which is said to affect the plaintiff in England is anything but a very minor incident of the substantial publication in France.”

Scott LJ added, at p 732:

“I think it would be ridiculous and fundamentally wrong to have these two cases tried in this country, on a very small and technical publication, when the real grievance of the plaintiff is a grievance against the widespread publication of the two papers in the respective countries where they are published.”

51.    More recently, in Chadha v Dow Jones & Co Inc [1999] EMLR 724, 732 Roch LJ stated:

“In my judgment once it is established that there has been an ‘English tort’ that is to say that there has been a significant publication of prima facie defamatory matter concerning the plaintiff within the jurisdiction, the English courts have jurisdiction with regard to that English tort. Where the perpetrator of the tort is not within the jurisdiction but is abroad, then leave to serve process abroad under Order 11 is required and the fundamental principle identified by the House of Lords in Spiliada Maritime Corp v Cansulex Ltd [I987] AC 460 applies. If there is a substantial complaint with respect to the English tort, having regard to the scale of the publication within the jurisdiction and the extent to which the plaintiff has connections with and a reputation to protect in this country as against the inconvenience to the defendant in being brought here to answer for his alleged wrongdoing then service of the writ abroad is to be ordered.” ’

20.  In Jameel, the foreign claimant issued defamation proceedings in England against the publisher of a US newspaper in respect of an article posted on an internet website in the USA, which was available to subscribers in England.  The claimant alleged that the article, together with a list of names in an internet hyperlink referred to in the article, implied that he had been or was suspected of having been involved in funding a well‑known terrorist organisation.  The publisher averred that only five subscribers within the jurisdiction had accessed the internet article, that the claimant had, in fact, suffered no or minimal damage to his reputation.

21.  In Chadha, the respondents had published an article about the plaintiffs in which allegations were made that were seriously defamatory unless they could be justified.  The main place of publication was the United States, which was also the place where both plaintiffs and defendants were domiciled and resident.  There was a small circulation in the United Kingdom.  The second plaintiff had recently acquired a subsidiary in England.  The Court of Appeal upheld the first instance decision to set aside the service out order on the ground of forum conveniens.

22.  In our view, Mr. Chang is correct in his submission that the term ‘real and substantial tort’ should be properly understood.  Kroch which applied Johnson is concerned with whether there is a breach in substance within the jurisdiction.  Slesser LJ in Kroch at page 729 held :

‘ I quite agree with Mr. Slade that, if there were evidence in a particular case that a person had a reputation in this country to be defamed, or was known here, or traded here, or had professional or social connections, it might be that the circulation of a very few copies might do him very serious or irreparable harm. It is certainly an element to be taken into consideration. The mere fact by itself of a very small circulation, even in a foreign tongue, would not necessarily preclude him from saying that among the people of that nation who read that paper in this country, he would suffer grievously in reputation; ...’ (emphasis added)

23.  In Berezovsky, Lord Steyn at 1013 held :

‘ The present case is a relatively simple one. It is not a multi‑party case: it is, however, a multi‑jurisdictional case. It is also a case in which all the constituent elements of the torts occurred in England. The distribution in England of the defamatory material was significant. And the plaintiffs have reputations in England to protect. In such cases it is not unfair that the foreign publisher should be sued here.’ (emphasis added)

24.  As to the extent of the publication, this Court in Oriental Press Ltd v. Google LLC held that it is fact ‑ sensitive and not a number crunching exercise.

‘ 3.35 In my view, it is important to bear in mind the principles rather than to look for the specific results in these cases by reference to the evidence on the extent of publication. The extent of publication in each case is fact ‑ sensitive. The Court is not concerned with a number crunching exercise. As Eady J observed in Tamiz (at [15]) this cannot depend upon a numbers game, with the court fixing an arbitrary minimum according to the facts of the case. What matters is whether there has been a real and substantial tort within the jurisdiction (or, at this stage, arguably so).’ (emphasis added)

25.  In the amended statement of claim, the plaintiff relied on publication of the defamatory material to the following persons :

1)     Mr. Feng;

2)     Mr. Li Xiaoyun, the director of CSESC and Mr. Tang Yiyuan of the Taiwan Affairs Department of the LOCPG; and

3)     Ms Guo Juan who had indicated to reporters that she had circulated the documents to regulatory authorities in Hong Kong, Mainland Government departments and other independent third party organizations.  The plaintiff stated that articles on the Declaration and Trust Agreement were published by the China Business Journal and the Beijing Times in the Mainland.

26.  The real issue in this case is whether the plaintiff has shown a good arguable case that a real and substantial tort had been committed in Hong Kong.  We are of the view that the plaintiff has succeeded on this issue.  First, the plaintiff has a professional and business reputation in Hong Kong.  According to the plaintiff, he is a permanent resident of Hong Kong.  He is the chairman, director and shareholder of China Review News Agency Limited (中國評論通訊社有限公司) which was incorporated in Hong Kong on 1 February 2005, and has carried on businesses under the name of ‘China Review News Agency (中國評論通訊社)’ (‘CRNA’).  CRNA is the first digital network news agency in the Greater China Region with its registered office in Hong Kong and provides readers with in‑depth and analytical news and commentary.  In particular, CRNA is known for being the most authoritative news agency, which is as influential as the official Xinhua News Agency (新華通訊社) and the Central News Agency (中央通訊社) in respect of Cross‑Strait related affairs.

27.  The plaintiff explained that as the Chairman of CRNA, he often receives, liaises and exchanges views in relation to Cross‑Strait matters from and with, inter alia, influential politicians, officers and Government officials from the Mainland and Taiwan, in Hong Kong, with the purposes of fostering and promoting co‑operation amongst them, and which matters would also be reported in the news from time to time.  He maintains a close relationship with, inter alia, the Liaison Office of the Central People’s Government in the Hong Kong Special Administrative Region (中央人民政府駐香港特別行政區聯絡辦公室) (‘LOCPG’), as well as the Taiwan Affairs Office of the State Council (國務院台灣事務辦公室) (‘TAO’) of the People’s Republic of China (the ‘PRC’), an administrative agency under the State Council of the PRC.

28.  The plaintiff said that CRNA is the only news agency that has maintained good relationship with, and been able to gain the trust and confidence of, the official institutions in both the Mainland and Taiwan.  CRNA’s associated magazine can be published and sold in both the Mainland and Taiwan.  CRNA has also maintained good relationship with, and been able to gain trust and confidence of, the main political parties in Taiwan (including the present and the former ruling parties).  CRNA’s reporters and journalists can take part in the official and formal activities organised by the authorities in both the Mainland and Taiwan, and are allowed to board the planes with the government leaders of Taiwan making foreign visits.  Hong Kong serves a critical role in the Cross‑Strait relations.

29.  The plaintiff stated in his affirmation that :

‘ It is absolutely essential for me to maintain an untarnished reputation in Hong Kong, whether for the sake of CRNA or to properly discharge my official duties as described above.

My credibility and reputation in Hong Kong are pivotal not only to my position as the Chairman of CRNA in conducting reporting and commercial activities, but also in promoting the Cross‑Strait relations and co-operation.’

30.  The role of LOCPG was stated in the Amended Statement of Claim as follows :

‘ The HK Liaison Office is an organ of the State Council of the Central People Government（中央人民政府國務院）, performing functions including (i) to associate and assist the relevant departments in the Mainland in their management of the Chinese funded organisations in Hong Kong; (ii) to promote the economic, educational, science and technology, cultural, and athletic exchanges and cooperation between Hong Kong and the Mainland; (iii) to reflect the views of Hong Kong residents to the Mainland and to integrate and advance exchanges between them and the Mainland. In particular, the Department of Taiwan Affairs of the HK Liaison Office handles Taiwan‑related issues, and accepts the business leadership of the TAO.’

31.  The plaintiff further elaborated in his first affirmation the role of LOCPG :

‘ LOCPG is an organ of the Central People’s Government of the PRC in Hong Kong. Its main functions include liaising with the Office of the Commissioner of the Ministry of Foreign Affairs of the PRC and the Garrison; liaising with and assisting relevant Mainland departments to manage Chinese organisations in Hong Kong; promoting economic, educational, scientific and technological, cultural and athletic exchanges and co‑operation between Hong Kong and the Mainland; liaising with various sectors of the community of Hong Kong to enhance exchanges between the Mainland and Hong Kong; and reflecting the views of Hong Kong residents on the Mainland; handling Taiwan related affairs and undertaking other matters assigned by the Central People’s Government. There are 23 internal organisations within the LOCPG, and a publication to the LOCPG alone is substantial publication. It is incorrect for the Defendant to claim that the LOCPG is in PRC when it is in fact located in the Western District of Hong Kong.’

32.  The defendant published the Declaration and the Trust Agreement in response to the article reported in the local ‘Sharp Daily’.  In the Declaration, she referred to the meeting with the plaintiff at the end of 2007.  She described the plaintiff as ‘Comrade Xu Ying of TAO’.  She said she was told by the plaintiff that CRNA is a wholly owned unit of TAO in Hong Kong.  It is to provide information to the Chinese Communist Party and Central Government.  It is an important platform for work concerning Taiwan.  She knew Li Xiaoyuan and the plaintiff were leaders of TAO.  She agreed to the plaintiff’s proposal to hold the Golden Harvest Shares.  She claimed that the plaintiff now tried to lay the blame on her.  She concluded by saying that she wanted to state clearly the situation and asked ‘the relevant authorities above the TAO to clear my name or else I would have to resort to legal weapons to defend my right’.  By this, the defendant must have intended that these authorities should read what she had written about the plaintiff.  She must have intended to publish these documents to be read by the relevant authorities which came to know of them despite her denial that she had published them to Mr. Feng, the Hong Kong office of the LOCPG or Ms Guo Juan.

33.  The plaintiff stated that Mr. Li Xiaoyuan, the Director of the Centre of Strait Economy & Science‑Tech Corporation (‘CSESC’) which is one of TAO’s seven institutions, had telephoned him that someone had provided certain documents concerning him and CRNA in regard to the Golden Harvest Shares to LOCPG.  The plaintiff was told to attend LOCPG to clarify the matter directly with LOCPG.  Following that conversation, he met Mr. Tang Yiyuan, the Director of the Taiwan Affairs Department of the LOCPG.  He was shown the relevant documents which were annexed to a Report Letter from Mr. Feng, addressing to the Economic Affairs Department of LOCPG.

34.  It is in such a context that the plaintiff said the tort had in substance been committed in Hong Kong by the publication of the defamatory material to LOCPG. Publication of a libel happens when it is read by the reader of the article: Berezosky at 1012 D per Lord Steyn and Ribeiro PJ in Oriental Press Group Ltd v Fevaworks Solutions (2013) 16 HKCFAR 377 at [17] and [18].

35.  Mr. Chang further referred to Gatley on Libel and Slander 12^th Ed that, in the context of malicious falsehood :

‘ 21.6 …but where the defendant has made an initial, deliberate publication he should be liable for further publications which are the natural and probable consequence of that.’

36.  Mr. Dawes SC (together with Mr. Dong) for the defendant has not argued that this does not apply to the publication of a libel.

37.  The Declaration was written by the defendant with the intention that the authorities above TAO should step in and clear her name.  Bearing in mind the leadership of the plaintiff in CRNA, the roles played by CRNA, TAO and LOCPG in Taiwan affairs and the nature of LOCPG’s presence in Hong Kong, it is probable that the defamatory materials which the defendant published would eventually come to be read by officers of the LOCPG in charge of Taiwan affairs particularly when it was the intention of the defendant that the authorities above TAO should read what she had written about the plaintiff who is involved with matters concerning Taiwan.  The plaintiff was asked to explain to LOCPG not simply because he happened to be here in Hong Kong by chance, he was here because of his involvement with CRNA and TAO.  Based on what the plaintiff said, he has a substantial reputation in Hong Kong and the publication affects his reputation.  Damage is presumed by the publication : Berezovsky per Lord Steyn at 1012 D.  By all accounts, the publication of the defamatory material in Hong Kong is a real and substantial tort within the meaning of the test.  In our view, the Judge erred in [18] of his judgment when he held that there is no convincing evidence showing substantial publication of the defamatory material in Hong Kong.  He was side tracked by the argument that there was no publication in the Hong Kong media of the defamatory material and also by the argument that the publication took place outside Hong Kong in the Mainland by two Mainland newspapers.

38.  The Judge was plainly wrong in the exercise of his discretion.  This entitles us to exercise the discretion afresh.  Our discussion above clearly shows that there is a good arguable case that Gateway F is satisfied subject to the remaining issues of forum conveniens and non‑disclosure.

2)     Forum conveniens

39.  In our view, Hong Kong is clearly the appropriate forum.  The tort was committed in Hong Kong where the plaintiff carries on his business and activities.  He is entitled to have his reputation being vindicated in Hong Kong.  Gatley at [24.28]summarized the position as follows :

‘ The starting-point for ascertainment of the appropriate forum is to identify the place where the libel has been committed, which by definition will be England in a case where permission to serve out has been given on the basis of publication here. Although the burden is on the claimant (in seeking permission to serve out) to show that England is clearly the appropriate forum in which the case should be tried in the interests of the parties and the ends of justice, regard must be had to the principle that the jurisdiction in which the tort was committed is prima facie the natural forum for the dispute.’ (emphasis added)

Hence Peter Gibson LJ held in Schapira v Ahronson & Ors [1999] EMLR 735 at 749 :

‘ On the contrary, like the judge, I am of the view that England, where the plaintiff lives and carries on business and where he wishes his reputation to be vindicated, is the appropriate forum for the actions.’

3)     Non-disclosure

40.  In our view, the Judge was wrong on the issue of material non-disclosure due to his misunderstanding of the plaintiff’s case.

4)     Gateway B

41.  Mr. Dawes accepted that the Gateway B injunctive relief stands or falls with the plaintiff’s claim for libel.

5)     Malicious falsehood

42.  The issue here is on section 24 of the DO which provides that :

‘ (1) In an action for …… malicious falsehood, it shall not be necessary to allege or prove special damage—

(a)     if the words upon which the action is founded are calculated to cause pecuniary damage to the plaintiff and are published in writing or other permanent form; or

(b)     if the said words are calculated to cause pecuniary damage to the plaintiff in respect of any office, profession, calling, trade or business held or carried on by him at the time of the publication.’

43.  Gatley at 21.14 summarised the applicable principle as follows :

‘ “Calculated to” in this context has been accepted as meaning “more likely than not”. The claimant must plead and prove with sufficient particularity that it was more likely than not that the damage referred to in s.3 was caused by “the words upon which the action is founded”. This requires him to give particulars of the nature of the allegedly probable damage and the grounds relied on for saying that it is more likely than not. However, since the claim is one for general damages it is unnecessary for the claimant to identify the amount of pecuniary loss that it is said the falsehoods were calculated to cause. All that is required in order to make the nature of the case clear is identification of the nature of the loss and the mechanism by which it is likely to be sustained.’ (emphasis added)

44.  In Tesla Motors Ltd & Anor v British Broadcasting Corporation [2011] EWHC 2760 (QB), Tesla, the electric car manufacturer, brought a claim against BBC for malicious falsehood in respect of a broadcast of the television programme (‘Top Gear’).  The plea of damage consisted of the following :

‘ 9. Each of the broadcasts was and is calculated to cause pecuniary damage to each of the claimants in respect of its business.’

45.  Tugendhat J struck out the claim.  He held :

‘ 66. In my judgment if a trader, such as each of the Claimants in this case, makes a claim for malicious falsehood and, as he is entitled to do, he relies not on any actual damage, but on probable damage such as is referred to in the 1952 Act section 3, the Claimant must nevertheless give particulars of the nature of the allegedly probable damage and the grounds relied on for saying that it is more likely than not. For example, if what is relied on is the probability of such a trader having to incur expenses in advertising and other forms of publicity in order to counter the effects of the alleged falsehoods, then the Particulars of Claim should identify that probable damage. On the other hand, the damage which, it is said, is more likely than not to be a consequence of the alleged falsehood, may be delay in sales of a given number of vehicles, or loss of sales of a given number of vehicles, or the difference between the price at which vehicles will be saleable following publication of the falsehood complained of and the higher price at which it is said they would probably have been saleable but for the publication of the falsehood complained of. In such cases, then the Particulars of Claim should likewise identify that probable damage.

…

74.     In my judgment the claim under section 3 of the 1952 Act is so lacking in particularity that it cannot be allowed to proceed.  Unless it is capable of remedy, the claim must be struck out.’

46.  The decision was affirmed by the Court of Appeal [2013] EWCA Civ 152.

47.  In Hong Kong Wing On Travel Service Ltd v Hong Thai Citizens Travel Services Ltd [2001] 2 HKLRD 481,  Chu J (as she then was) held at page 499 that :

‘ It is also common ground between Counsel that having pitched its case on s.24, the plaintiff cannot adduce evidence of actual loss. However, that does not necessarily mean that the plaintiff can only be awarded nominal damages: Joyce v Sengupta [1993] 1 WLR 337 at pp.346H‑347C. Counsel are also in agreement that damages for malicious falsehood does not cover damage to reputation: Joyce v Sengupta [1993] 1 WLR 337 at p.348F‑G, and that under s.24 of the Defamation Ordinance, the plaintiff can only recover damages for its probable monetary loss, and not for injured feelings: Fielding v Variety lnc [1967] 2 QB 841 at p.850. It will appear that in determining damages, the court should see whether any monetary loss can be inferred from the evidence. If so, it would make an award for general damages. Otherwise the plaintiff could only recover nominal damages.’

48.  Chu J held that on the facts of the case that pecuniary loss can be inferred from the evidence :

‘ In the present case, some pecuniary or monetary loss can be inferred from the evidence. Firstly, there is evidence that the plaintiff had to change the contents of its advertisements to counteract the Announcement and to put up the counter advertisement for about a week. Secondly, refunds were given to five participants who decided to withdraw from the tours. Thirdly, the plaintiff had to deploy resources to explain the situation to its business associates and also participants of the tours for the Concerts. It is therefore an appropriate case for awarding general damages.’

See also Tinkler v Ferguson [2020] 4 WLR 89 and Tremendous Success Holdings & Anor v Sinosoft Technology Group Ltd & Ors (unrep., HCA 2345, 1613 & 2423/2013, 11 July 2016).

49.  In this case, the Amended Statement of Claim (English translation supplied by the plaintiff) pleaded that :

‘ 22. The false contents of the Purported Explanation as pleaded in the respective paragraphs above were calculated to cause pecuniary damage to the Plaintiff in respect of his office, profession, calling, trade and/or business carried on by him as director and/or Chairman of China Review at the time of the publication of the said contents. At the trial, the Plaintiff shall rely upon section 24 of the Defamation Ordinance (Cap.21) insofar as may be necessary.

Particulars

22.1.  China Review is the first digital network news agency in Greater China Region, currently with a relatively complete news information collecting networks established in Taipei, New Taipei City, Taoyuan County, Taichung City, Tainan City, Kaohsiung City, Hong Kong, Beijing, Guangzhou, Washington DC, and Los Angeles.  China Review was and is at all material times a think tank media, and the most authoritative source of news and public opinion on matters concerning cross‑strait relations.  China Review has always worked closely with public authorities including but not limited to the HK Liaison Office and TAO to obtain news information, and it is crucial for the purpose its operations that it is trusted by such public authorities.

22.2   The Plaintiff repeats paragraph 14 hereinabove.  During the meeting with the Department of Taiwan Affairs of the HK Liaison Office on 27^th December 2011, the Plaintiff must make clarification, clarify and explain that the Alleged Shareholding Agreement was a false document, and the contents of the Purported Explanation were untrue, because it was crucial in order to defend the business and reputation of both China Review and himself as its Chairman, director and shareholder.’

50.  It is clear from this plea that the plaintiff is focusing on the loss of his reputation.  The plea is focused on the loss of trust, integrity and reputation of the plaintiff and CRNA.  Apart from that he has not identified the nature of his pecuniary loss and the mechanism by which it is likely to be sustained.  In other words, he has not shown what is his probable pecuniary loss.  In our view, the plaintiff has not shown a good arguable case based on his malicious falsehood claim.  In the circumstances, leave to serve out should only be granted on the Gateway F tort founded by defamation and the Gateway B injunctive relief.

VI.     Conclusion

51.  The appeal is allowed as indicated.

VII.   Costs

52.  There will be an order nisi that the plaintiff is to have the costs of the appeal and below to be taxed if not agreed with certificate for two counsel.