THE CHAMBER OF HONG KONG COMPUTER INDUSTRY COMPANY LTD v. SHEA KAI CHUEN

HCA 2102 /2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO.2102 OF 2012

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J U D G M E N T

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I. INTRODUCTION

1.  The Chamber of Hong Kong Computer Industry Company Limited (香港電腦商會有限公司), the plaintiff in this action, was established in 1998 as a company limited by guarantee.  Its primary objective was and still is to promote the interest of the computer and related industry.

2.  One of the activities organised by the plaintiff between 2002 and 2012 was the “Hong Kong Computer Festival” (香港電腦節).  I will call that event “Festival” or “Festivals”.  Up to 2010, the Festival was held roughly once a year in the Sham Shui Po district in West Kowloon.  It is the 2009 edition of the Festival (“2009 Festival”, but in fact held on 15 to 18 January 2010) with which this action is mainly concerned.

3.  Another major event which the plaintiff organised since 2004 was the “Hong Kong Computer and Communications Festival” (香港電腦通訊節) (“HKCCF”).  This event was held once a year at the Hong Kong Convention and Exhibition Centre in Wanchai.  As its name suggests, this event covered not just computer-related products but also other IT products.  It was a much larger-scaled event than the Festival.

4.  The defendant, Mr Shea Kai Chuen, is one of three Life Honourary Presidents of the Hong Kong Computer Association Limited (香港電腦業協會有限公司) (“Association”) since its incorporation in July 2009.  Prior to July 2009, Mr Shea gave advice to and assisted a number of retailors (which I will simply call “shops”) in computer malls who were dissatisfied with the frequency in which the plaintiff held the Festivals, the HKCCF and other similar events.  They called themselves 電腦業界大聯盟 (“Alliance”) which became the Association in mid- 2009.

5.  In December 2009, the Association organised its own computer festival to rival the 2009 Festival.  The Association’s festival was held from 12 January 2010, immediately before the 2009 Festival.

6.  The enmity between the two camps gave rise to this and other actions.

II. THE OFFENDING ARTICLES

7.  The plaintiff complains of two articles published in April and December 2009 in the Apple Daily and Sing Tao Daily newspapers respectively.  It is the plaintiff’s case that certain words in the two articles were defamatory of it.  The plaintiff also relied on malicious falsehood.

II.(1)  Apple Article

8.  The first article chronologically was written by Mr Shea and published in Apple Daily on 16 April 2009, with a title “瘋狂電腦節的背後”.  For ease of reference, a downloaded copy of this article (“Apple Article”) is annexed to this judgment as “Annexure A” (the downloaded copy, as opposed to the printed version, was used in the trial).  The words that the plaintiff complains of are found in the second paragraph in Annexure A:

“號稱代表業界發聲的香港電腦商會，作為電腦節的搞手，近日被業界質疑借電腦節牟利，事實上，過去的深水埗電腦節和今次的九龍灣電腦節，商會都不用付租，更有政府協助打點場外安排，但商會還是向參展商徵收與市價相約的租場費用。”

9.  The plaintiff complains that the words in the Apple Article in their natural and ordinary meaning were defamatory in imputing that:

(1) The plaintiff’s ultimate purpose of organising the Festivals was making profit.

(2) The plaintiff falsely pretended to be a non-profit making organisation.

(3) The plaintiff was dishonourable and untrustworthy.

(4) In organising the Computer Festivals, the plaintiff was in disregard of its members’ interests.

(5) In organising the Computer Festivals, the plaintiff has colluded with Government officials.

II.(2)  Sing Tao Article

10.  The other subject article was a news report about the computer festival organised by the Association.  It appeared in the 31 December 2009 edition of Sing Tao with a title “電腦節鬧雙胞 掀對撼惡鬥 四商場另闢蹊徑 抗議生意被搶”.  The article sought to explain the rivalry between the two camps and the reasons that gave rise to the Association’s formation and organising a “rival” computer festival.  A downloaded copy of this article (“Sing Tao Article” - again the downloaded copy, as opposed to the printed version, was used in the trial) is annexed to this judgment as “Annexure B”.

11.  The Sing Tao Article reported certain words that Mr Shea had said to the newspaper, found in the fifth paragraph of Annexure B: “香港電腦節最賺錢的只是主辦單位﹐百多個攤檔﹐單租金收入已數百萬﹐長沙灣場地免費﹐又有區議會贊助﹐更有警方控制人流﹐除搭建單位和請保安等要從中扣除成本外﹐其餘收入都歸商會﹐表面上它是非牟利組織﹐但他們的職員為何可一年去幾次海外旅行會議?”

12.  In respect of the words in the Sing Tao Article, the plaintiff’s case is that they bore the following natural and ordinary meanings which were defamatory of it:

(1) The plaintiff’s ultimate purpose of organising the Computer Festivals was making profit.

(2) The plaintiff falsely pretended to be a non-profit making organisation.

(3) The plaintiff was dishonourable and untrustworthy.

(4) In organising the Computer Festivals, the plaintiff has falsely and dishonestly misappropriated the income from the Computer Festival to benefit its committee members and staff.

(5) In organising the Computer Festivals, the plaintiff was in disregard of its members’ interests.

(6) The plaintiff did not manage its account in relation to the organisation of the Computer Festival properly.

(7) In organising the Computer Festivals, the plaintiff has colluded with Government officials and/or the District Council.

III. ISSUES

13.  There is no dispute that the words complained of referred to the plaintiff, and that Mr Shea was responsible for their publication.

14.  Counsel (Mr Kevin Hon who appeared on behalf of the plaintiff and Mr Johnny C.M. So who appeared on behalf of Mr Shea) agreed that, broadly stated, the issues for determination are:

(1) Whether the words are defamatory of the plaintiff;

(2) If so, whether Mr Shea can rely on the positive defence of justification and fair comment;

(3) Whether Mr Shea published the words maliciously; and

(4) Quantum of damages should liability be established.

15.  Such broad issues, however, are not particularly helpful to the court.  In a defamation case, it is important to be more focused on precisely what are the meanings contended for as well as the details of the positive defence(s).

16.  In this connection, the plaintiff’s pleaded case is relatively easy to understand.  Mr Shea’s pleaded case, however, is not so clear.  Nevertheless, Mr So in his written and oral opening submissions clarified his case as follows.

17.  In relation to both Articles, Mr Shea’s case is that they do not bear the meanings alleged by the plaintiff, and are not defamatory of the plaintiff.

18.  In relation to the Apple Article, Mr So seeks to justify the following meaning:

“The Plaintiff, being the organizer of HKCF [ie. the Festival], has been doubted by the computer industry of making profit only through computer festivals. For the HKCF and the Kowloon Bay Computer Festival (Megabox), the Plaintiff needed not to pay venue rent and was assisted by the government for arrangement outside the venue. However, the booth rent it charge to participants was at about market rate.”

19.  In respect of the Sing Tao Article, the meaning sought to be justified is that:

“CHKCI [ie. the plaintiff] is the one earning most in the HKCF. With over 100 booths, the booth rent income is several million dollars. The venue in Cheung Sha Wan is free. SSPDC has provided sponsorship. Police controls the stream of people. After deducting the costs of setting up booths, hiring security guards and etc, the rest of income will go to CHKCI. One the face CHKCI is a non-profit-seeking organization, but why could its staff go to overseas traveling conferences several times a year?”

20.  As to fair comment, Mr So clarified that he sought to defend as comment the following words:

(1) For the Apple Article:

“但商會還是向參展商徵收與市價相約的租場費用”;

(2) For the Sing Tao Article:

“香港電腦節最賺錢的只是主辦單位”.

21.  In both cases, Mr So relied on the same particulars pleaded in justification to support the fair comment defence.

22.  I note in passing that the indorsement of claim on the Writ issued on 9 November 2012 only referred to a claim for damages for libel and slander in respect of the Sing Tao Article.  However, no point has been taken that the indorsement of claim did not include any cause of action arising from the publication of the Apple Article, or malicious falsehood. Moreover, the Statement of Claim included claims for special damages, exemplary damages and injunctive relief, but these relief were not pursued at the trial.

IV. BACKGROUND

23.  It is necessary to explain in more detail the relevant background surrounding the publication of the two Articles, which are materially non-controversial.

24.  As is well known, Sham Shui Po is an area in West Kowloon with a large number of computer retailors many of whom are located in several shopping malls, commonly referred as “電腦場” or simply “腦場” (literally “computer malls”).  The most well-known of these are perhaps Golden Computer Arcade (黃金電腦廣場), Golden Computer Centre (高登電腦中心), Golden Computer Plaza (高登電腦廣場) and New Capital Computer Plaza (新高登電腦廣場).  There are, of course, other computer malls elsewhere, which are mainly located in Wanchai on Hong Kong side.

25.  Many of the shops carrying on business in the Sham Shui Po computer malls were members of the plaintiff. (The plaintiff only had corporate members, so a shop member would be the corporate entity which owned and operated the shop.  For convenience, I shall not draw any distinction between a shop and its owner/operator).

26.  In addition to shops, the plaintiff’s members included businesses in the computer-related industry such as manufacturers and software developers.  In 2009, the plaintiff had around 500-600 members, most of whom were shops.

27.  The Festival was first held in Sham Shui Po in December 2002.  It was jointly organised by the plaintiff and the Sham Shui Po District Council (which I shall simply call “District Council”) to boost the local economy.  From 2002 to 2008, the Festival took the format of booths set up along several streets in Sham Shui Po district for the public to browse and shop.  The 2009 Festival and later ones were held in the Cheung Sha Wan playground within the Sham Shui Po district.  It was not necessary to be a member of the plaintiff to hire a booth; but members enjoyed a lower rate for hiring the booths and certain priority treatment in booth allocation.

28.  The Festivals were held roughly annually until 2012.  Prior to 2009, the plaintiff and the District Council were joint organisers of the Festival – in the sense that the plaintiff was primarily responsible for all logistical arrangements in organising the event, while the District Council in addition to endorsing the event by being a joint organiser also lent its support by liaising with the concerned Government departments to ensure that the event was smoothly run.  That changed in July 2010, when the District Council decided that from then on the plaintiff would be the sole organiser of the Festival, although the District Council would continue to provide relevant assistance.

29.  Significantly for this case, although the District Council was a joint organiser of the Festival prior to 2010, the plaintiff was always solely responsible for all expenditure in organising the Festival, and received all income from it.  The plaintiff did not profess not to make a profit from the Festival, but there was an understanding with the District Council that all surpluses from the Festival would be used towards district affairs.

30.  As mentioned above, the other major event that the plaintiff organised annually since 2004 was HKCCF. According to the plaintiff’s evidence, this was the main profit-generating event of the plaintiff.  Although not limited to computer sales, in fact most of the participants in the HKCCF were computer retailors.  Although held in Wanchai, many shops from Sham Shui Po computer malls would also take part in this festival.  It is the plaintiff’s own evidence that the Festival and HKCCF were often referred to by the public and the media as “Hong Kong Computer Festival” (香港電腦節) or simply “computer festival” (電腦節) without distinction.

31.  Originally, the shops in the Sham Shui Po computer malls supported the Festival as it provided a welcome boost to their business.  However, sentiment started to change towards 2008/2009 because many of the shops felt that the plaintiff organised too many computer festivals – including both the Festival and HKCCF – and too frequently, which adversely impacted on their business during the “normal” times between festivals.

32.  For example, in 2008, the HKCCF was held in August, while the Festival was held in December of that year.  Shortly thereafter, the plaintiff planned to hold a computer festival in Megabox, a large shopping mall in East Kowloon, in April 2009.  The HKCCF would follow in around August 2009, and a computer festival similar to the Festival was then planned for Tsuen Wan in November 2009.  Thus a series of computer festivals were being organised by the plaintiff within a few months of each other.  

33.  The frequency of these events caused grievances and concerns amongst many shops operating in the computer malls in Sham Shui Po and elsewhere.  The shops complained that since the plaintiff held computer festivals once every few months, customers no longer patronised them during “normal” non-festival periods but chose to wait for bargain hunting in the computer festivals.  Many of the shops thus suffered greatly in their business.  They also complained that they were forced to take part in the computer festivals, but at the same time wholesalers could also take part and often sold the same products at cheaper than retail prices during the festivals, thereby compounding their misery.  There were other complaints, such as unfairness in allocating booths in the Festivals, which I need not go into for present purposes.

34.  These grievances led a number of shops from the computer malls to get together to reflect their concerns to the plaintiff and fight for their interests.  A meeting was arranged for 27 March 2009.  The Alliance was formed at around this time (whether it was formed shortly before the 27 March meeting, during the meeting or shortly thereafter is immaterial).

35.  On 26 March 2009, Mr Cheung Ming Chi, who ran a shop in Golden Computer Centre and was a member of the plaintiff, telephoned Mr Leung Ding Kau, the then chairman of the plaintiff, and invited Mr Leung to attend the meeting called by the shops to be held the following day.  Mr Cheung explained to Mr Leung the purpose of the meeting and the shops’ grievances and concerns.  According to Mr Cheung, who gave evidence on behalf of Mr Shea and whose evidence was unchallenged, Mr Leung told him that the plaintiff only served the interest of its members, and the members supported the plaintiff to organise these computer festivals.  Mr Leung further told Mr Cheung that he (Mr Leung) was busy the following day but would try to attend.  He did not.

36.  The meeting on 27 March 2009 was attended by many shops from the Sham Shui Po computer malls, as well as those from Wanchai computer malls.  At this meeting, many shops voiced their grievances and dissatisfaction towards the plaintiff.  A plaintiff’s staff did attend but took no active part.  Mr Leung in his evidence accepted that the staff had reported to him and the plaintiff’s directors of what had happened during the meeting.

37.  Mr Chan Sing Kwong, who gave evidence on behalf of the defendant, attended this meeting.  He was one of the organisers of the Alliance and currently the Vice President and General Secretary of the Association.  He used to own a shop in one of the computer malls in Sham Shui Po up to early 2009.  He was told of the meeting and he attended.  His evidence, unchallenged in this respect, was that since Mr Leung did not attend, those present at the meeting decided to mobilise shops from the major computer malls to gather signatures from the shops demanding the plaintiff not to organise computer festivals so frequently and asking Mr Leung to meet with them to discuss their complaints.

38.  On 30 March 2009, signatures collected from shops in the major computer malls were presented to the plaintiff’s office, with letters asking Mr Leung to meet with the shops in a restaurant in Sham Shui Po on 3 April 2009 at 3pm.

39.  On the following day, 31 March 2009, shops in Golden Computer Centre (probably other computer malls as well) received a fax from the plaintiff, addressed to its members, informing them that the plaintiff would hold a meeting at 1pm on 3 April 2009 in Megabox.  Naturally, shops in the Alliance considered this to be a “rival” meeting to the Alliance’s meeting to be held at 3pm that day in Sham Shui Po.  Mr Leung, when he gave evidence, explained that the timing was coincidental because the plaintiff’s directors and staff were busy in Megabox organising the Megabox event.  I do not find that explanation convincing, but it is unnecessary to make any findings as to why the plaintiff organised its own meeting at 1pm in Megabox.  The undisputed fact is that Mr Leung and the plaintiff’s directors did not attend the Alliance’s meeting despite having been notified of it.

40.  The 29 March meeting and the Alliance’s 3 April meeting drew media interest and were reported in the local press.

41.  The disgruntled shops which formed the Alliance were predictably aggrieved by the plaintiff’s failure to meet with them or to discuss their demands.  At the 3 April meeting, they agreed to hold a “lights out” event in the computer malls to publicise their cause.  This event also drew media attention.

42.  It was against the above background that Mr Shea authored the Apple Article, which was published on 16 April 2009.  Mr Shea became involved in the Alliance since around the time it was set up in late March 2009.  He was in the manufacturing business himself and had been working for small and medium sized enterprises (“SME”) generally for a number of years. He had never been involved in the computer industry, but many of the shops in the computer malls were SME and he knew the owners: although not a district councillor himself, he was a member of the Central/South area sub-committee of the District Council, with special interests in SME, and in that capacity he knew the shops in the computer malls.  Mr Shea in his witness statement said that he attended the 27 March 2009 meeting to offer his assistance to the shops which were unhappy with the plaintiff.

43.  Mr Shea also explained in his witness statement that he was one of those who assisted in setting up the Alliance, and offered the Alliance his general help and advice.  He authored the Apple Article in his capacity as “temporary convenor” of the Alliance (電腦業界大聯盟臨時召集人). Mr Chan’s evidence is that Mr Shea gave advice in relation to publicity, and helped in liaisons with government officials and the District Council.

44.  In around July 2009, the Association was formally incorporated, with Mr Shea as one of its Life Honourary Presidents. His evidence, which is not disputed, is that he held no executive position in and was not involved in the day-to-day operation of the Association.

45.  During 2009, the plaintiff organised two more large-scale computer festivals: the HKCCF 2009 in August, and the Tsuen Wan Computer Festival, similar in format to the Festival, in November 2009.

46.  Towards the end of 2009, the Association organised its own computer festival, called the “Sham Shui Po Computer Malls Computer Festival” (深水埗電腦場電腦節): this event was to be held in the computer malls in the area from 12 January 2010, immediately prior to the 2009 Festival, which was to be held in the Cheung Sha Wan playground, from 15 to 18 January 2010.

47.  A media function was held to publicise the Association’s computer festival.  The Sing Tao Article was a report of this event.

48.  Finally by way of background, I understand that there were other legal proceedings commenced by the plaintiff against the Association and persons connected with it.  References had been made in the course of the evidence to HCA 621 of 2010, in which the plaintiff unsuccessfully applied for an interim injunction against the Association in respect of the Association’s computer festival.  There are at least two other defamation actions commenced by the plaintiff against the Association and its Vice President respectively, one of which, HCA 2124 of 2012, recently went to trial before Recorder Ambrose Ho SC (judgment of which is pending).

V. APPLICABLE PRINCIPLES

49.  The relevant principles are not in dispute. 

50.  The plaintiff relies on the natural and ordinary meaning of the words complained of: ie. the meaning(s) which an ordinary reasonable fair minded reader would understand the words to bear from reading the article alone, without knowledge of any special facts which may suggest a different meaning: Gatley on Libel and Slander (12^th edn, 2013) paras. 3.17-3.18.  

51.  Mr Hon referred me to Jeynes v News Magazines Ltd [2008] EWCA Civ 130 at §14 per Sir Anthony Clarke MR, where His Lordship said that the ordinary reader is “not naïve but not unduly suspicious”, and can read “between the lines”; “he can read in an implication more readily than a lawyer and may indulge in a certain amount of loose thinking but he must be treated as being a man who is not avid for scandal and someone who does not, and should not, select one bad meaning where other non-defamatory meanings are available.” 

52.  Although Jeynes was concerned with the court’s approach in determining the outer boundaries of the possible range of meanings for the jury, which exercise is unnecessary in this case, I consider that the dicta cited above are helpful to my determination of the natural and ordinary meanings of the Articles.

53.  Mr So drew my attention to Wong Wai Kay v Hong Kong Economic Journal Co Ltd [2013] 3 HKLRD 27 at §9, where Chung J summarised the relevant principles as follows:

“(a) words in an article are normally construed according to their natural and ordinary meaning: Gatley on Libel and Slander (2008) 11^th Ed, para 3.16;

(b) although the same words in an article may bear different meanings to different readers (because of their temperament, knowledge and/or experience and so on), for the purpose of defamation litigation, the words have only a single meaning: Next Magazine Publishing Ltd and Others v Oriental Daily Publisher Ltd (2000) 3 HKCFAR 160,para 26; Oriental Daily Publisher Ltd and Another v Ming Pao Holdings Ltd and Another FACV 1/2012 (26 September 2012), para 48 to 50;

(c) in order to ascertain that single meaning, the court puts itself in the position of a fictitious ordinary reader: Oriental Press Group Ltd and Another v Fevaworks Solutions Ltd HCA 2140/2008 (25 February 2011), para 15;

(d) it is necessary to take into account the context of the words in an article. It follows that the context and circumstances of those words must be taken into consideration, and the article must be taken as a whole: Gatley, para 3.29 and 3.30.

(e) whether the text of an article will be sufficient to neutralize the defamatory implication of a headline is a question of fact: Gatley, para 3.29 and 3.30.”

54.  Mr Hon did not suggest that Chung J’s summary is deficient or wrong, and I propose to adopt the same approach.  I would add that the passages in Gatley cited by Chung J appear in the current edition of Gatley (12^th edn, 2013) at paras. 3.17 and 3.30-3.32.

VI.  THE APPLE ARTICLE

VI.(1) Meaning

55.  In my judgment, the words in the Apple Article when read in the context of the article as a whole do not bear the meanings relied on by the plaintiff.

56.  It is plain that the main theme of the Apple Article is that the plaintiff organised too many computer festivals and too frequently, which was harming many shops who were the plaintiff’s members and whose interest the plaintiff was supposed to promote.  The first sentence made it clear that when talking about “computer festivals”, Mr Shea referred to not only the Festival, but also HKCCF and the computer festival to be held in Megabox.  The article went on to point out many reasons why the shops in the computer malls were feeling aggrieved by the plaintiff organising too many computer festivals.  In particular, there was a strong sentiment that the computer festivals had been held too frequently, with the result that businesses of the shops in computer malls during “normal” times (this is, periods between festivals) had been seriously affected because consumers tended to wait for the large scale computer festivals rather than visiting shops between the events.  As a result, many shops found it difficult to survive.  Hence ironically, the computer festivals, which were intended to help the industry, caused more harm to the shops than help them.

57.  The second paragraph, in which the offending words were found, went on to describe the negative aspects of the computer festivals and the complaints from the shops.  It concluded by saying that it was hoped that the computer festivals which made the city “went crazy” would not in fact lead to the demise of the industry.

58.  Moreover, after referring to the industry questioning whether the plaintiff in fact made profits from organising the computer festivals, Mr Shea added that the plaintiff had openly denied that suggestion, but that the industry remained concerned because the plaintiff failed to make any clarification.

59.  In my judgment, the words when read in the context of the article as a whole did not bear the meanings contended for by the plaintiff which are strained and, with respect, far-fetched.

60.  Instead, an ordinary member of the public reading the Apple Article would understand the words in question to mean that many in the industry were questioning whether the plaintiff was making profit via organising the computer festivals.  This is reasonably clear especially when one takes into account the sentence immediately following the words complained of:

“電腦商會雖發出聲明表示絕無其事,但對大家關心的收支問題,商會還是欠缺清晰的交代”.

61.  It seems to me that to suggest that shops questioned whether the plaintiff was making profit from the computer festivals does not impute wrongdoing or lower the plaintiff’s reputation at all.  Thus read in the context of the Apple Article as a whole, the words in question are not defamatory of the plaintiff.

VI.(2) Justification

62.  Moreover, the facts stated in the offending words were substantially justified on the evidence.

63.  The plaintiff’s witnesses (including Mr Leung Ding Kau, a founding member and director of the plaintiff, its chairman from 2008 to 2011 and currently a director; and Mr Cheung Yiu Shing, also a founding member and director of the plaintiff, and a current director) accepted that prior to publication of the Apple Article, a large number of shops in the computer malls in Sham Shui Po expressed strong dissatisfaction with the plaintiff organising too many computer festivals for the reasons stated in the Apple Article. 

64.  Additionally, all the plaintiff’s witnesses accepted that:

(1) From 2002 to 2010, the Festivals did not have to pay any hire or fee for the venue: these Festivals were held in the streets in Sham Shui Po, or in the Cheung Sha Wan playground in January 2010, for which the government/ District Council did not charge any fee.

(2) Similarly, the plaintiff did not have to pay any venue hire for the Megabox event.

(3) There is no dispute that various government departments provided assistance in organising the Festivals and ensuring that the events ran smoothly, for which no fee was payable by the plaintiff.

(4) The plaintiff did charge participants for hiring the booths: evidence is given that for the 2009 Festival, the rent for a standard 3m x 3m booth was $16,800 for members of the plaintiff and $24,000 for non-members.  There is no evidence or reason to believe that these were not market rates.

(5) The income and expenditure accounts of the Festivals were not made available to the public.  In this connection, Mr Chan’s unchallenged evidence is that the Alliance did ask the plaintiff to provide the accounts but were not able to obtain them, until copies were eventually disclosed by the plaintiff in this and other High Court actions.

65.  Thus the facts stated in the offending words were substantially justified.

66.  I note that there is evidence that for the 2011 and 2012 Festivals, the District Council charged 10% of the ticket revenue; but that took place well after the publication of the two Articles and is irrelevant.

VI.(3) Fair Comment

67.  In any case, in so far as the words meant that the plaintiff was more motivated by making profit out of the computer festivals than promoting the interests of the industry, that must be a comment on a matter of public interest.

68.  In the first place, there can be little doubt that the comment was on a matter of public interest, involving the plaintiff which had several hundred members who were shops in the major computer malls in Hong Kong and in respect of large-scale computer festivals open to the public, some of which were co-organised with the District Council.

69.  In the context of fair comment on a matter of public interest, what is critical is whether the defendant honestly believe in what was published.  The presence of political motives or other personal agenda is not the same as absence of honest belief, although these could be evidence of absence of honest belief: Albert Cheng and Another v Tse Wai Chun Paul (2002) 3 HKCFAR 339.

70.  For the reasons already explained, the facts on which that comment was based were substantially proved.  I also think the comment was plainly one that a reasonable person could honestly make based on those facts.

71.  Although malice is pleaded in both the Statement of Claim and Reply, Mr Hon (who did not settle the pleadings) in his closing submissions made no attempt to advance any submission on malice other than inviting the court to make such a finding based on “the history between [the plaintiff] and [the Association] and the close association between [Mr Shea] and [the Association]”.  This submission was difficult to accept, not least because Mr Hon did not even put to Mr Shea that he did not honestly believe in the truth or accuracy of what he had written.  When queried on this aspect of his submissions, Mr Hon advisedly made no attempt to suggest that there was any evidence of malice.

72.  In the circumstances, the defence of fair comment is also made out.

VII. THE SING TAO ARTICLE

73.  I turn to the Sing Tao Article, in respect of which the plaintiff complains of no less than 7 defamatory meanings: see paragraph 12 above, which I need not repeat.  I will call them Meanings (1) to (7).

VII.(1) Meaning

74.  In my judgment, reading the words complained of in the context of the Sing Tao Article as a whole, they do not bear Meanings (1), (4), (6) and (7).

(1) I do not think Meaning (1) could be derived from the words.  Whilst one could read from the words the meaning that one of the purposes of organising the Festivals was making profit, a reasonable person would not read the words to mean that making profit was the plaintiff’s ultimate purpose.  In any case, to say that one of the plaintiff’s purposes was to make profit is in my view not defamatory, and in any case not disputed by the plaintiff.

(2) One simply cannot derive Meanings (4), (6) or (7) from the words at all.

75.  I think the words would be understood to bear Meanings (2) and (3), which have a common theme, ie. the plaintiff falselyclaimed to be a non-profit making organisation when it was not, hence it was dishonourable and untrustworthy.  I will consider these meanings together.

76.  I also think the words bear Meaning (5), ie. in organising the computer festivals, the plaintiff was in disregard of its members’ interests.

77.  In my view, these meanings are comments and prima facie defamatory of the plaintiff unless the defence of fair comment applies.

VII.(2) Meanings (2) & (3): the plaintiff falsely pretended to be a non-profit making organisation and was dishonest and untrustworthy

78.  For the reasons given in paragraph 68 above, I am of the view that comments on the affairs of the plaintiff and the computer festivals are matters of public interest.

79.  In my judgment, the comment was one which could reasonably be made based on the facts stated in the Sing Tao Article and proved by evidence.

80.  First, for the 2009 Festival (the words appeared in the paragraph concerning the 2009 Festival to be held in Cheung Sha Wan: see the second and third sentences of the paragraph) the plaintiff would receive over $2 million from renting out booths: there were 120 booths in the 2009 Festival for rent and the plaintiff charged $16,800 to $24,000 for each standard 3m x 3m booth.  So roughly speaking the plaintiff would be receiving some $2 million in income if all the booths were taken up.  

81.  Further, the income and expenditure account of the 2009 Festival revealed that the plaintiff received over $2 million.  I am conscious that these were inclusive of other sources of income such as sponsorship and advertisement, but nevertheless tend to support the suggestion that the festival would receive “millions”.

82.  Mr Hon submitted that what was said was that the plaintiff would receive “several million” (數百萬), which meant at least $3 million.  I think that reading would be too narrow.  The gist of what was said was that the plaintiff would receive a large income from charging booth rentals in terms of millions, which is substantially true.

83.  Secondly, there was support from the District Council in the form of its joint organisation of the Festivals. The plaintiff’s audited financial statements for 2002 and 2003 suggested that at least in respect of the Festivals held in those years, the plaintiff received monetary contribution from the District Council.  In this connection, Mr Hon submitted that “贊助” (sponsor) meant monetary sponsorship.  Again I think this would be a narrow and restrictive meaning, and a reasonable person would read “贊助” to mean support in general, including being a co-organiser of an event.

84.  Thirdly, it is not disputed that the plaintiff did not have to pay venue hire for the Festivals up to that time.  Nor is it disputed that the police assisted in crowd management and traffic control without charging anything.

85.  Fourthly, the plaintiff’s witnesses accepted that the plaintiff organised and paid for one or more overseas trips for its staff and directors every year, and these trips were paid for by the plaintiff’s own funds.

86.  Last but certainly not least, the plaintiff’s witnesses including Mr Leung and Mr Cheung agreed that the plaintiff did represent to the public that it was a “non-profit making organisation” although in fact, it did make profits from the events it organised.  Indeed, it is not disputed that the plaintiff made sufficient profits from these events that it was able to acquire its own premises, and in a position to pay for overseas trips for its staff and directors once or twice every year (which I understand were for pleasure but “brainstorming” sessions were programmed into the itinerary).  The audited accounts of the plaintiff for the years 2002 and 2003 also stated that the plaintiff had to pay tax for its operating surpluses.

87.  In the circumstances, it is in my view entirely open to a reasonable person to hold the view that the plaintiff was not really a “non-profit making organisation” but falsely claimed to be one.

88.  I have not overlooked the plaintiff’s witnesses all emphasising that by “non-profit making”, what was meant was that the profits derived from the computer festivals would not go to the plaintiff’s directors and members personally as in the case of a trading company, but would be applied towards the affairs of the plaintiff.  Moreover, they all testified that the plaintiff had an arrangement or understanding with the District Council in the years when the District Council was a joint organiser that all surpluses generated from the Festival would be applied for the benefit of the Sham Shui Po district.  The defendant’s witnesses did not dispute the existence of such an understanding, although their unchallenged evidence, which I accept, is that the understanding was not publicly known and was only revealed by the plaintiff after the commencement of this action.

89.  However, whether there was in fact such an agreement or understanding between the plaintiff and the District Council in respect of the use of the surplus from the Festivals is beside the point.  So is the question whether the plaintiff’s officers did or did not derive any personal benefit from acting as such.  The issue is what a reasonable member of the public would understand by “non-profit making organisation”.  In my judgment, a reasonable person would not understand “non-profit making organisation” to mean that the plaintiff would make profit from computer festivals but its directors and members would not personally derive any benefit from the profits made.  It is an unnatural meaning which is impossible to sustain.

90.  In the course of the trial, the plaintiff adduced evidence that losses of over $2,600 for the 2009 Festival and some $137,000 in 2008 had been incurred.  Mr So submitted that the income and expenditure account of these events did not reflect the true picture because the administrative and staff costs of the plaintiff over the preparatory months (typically 3-4 months immediately before the Festival) were included as items of expenditure although these were not incurred specifically for the event but for the plaintiff’s affairs generally.  It was argued that it was not the “usual way” to book these items of expenditures (whatever that means) and had these items of expenditure be excluded, the plaintiff would have made profits from these events.  Mr Hon, on the other hand, relied on the evidence of the plaintiff’s witnesses that these items of costs (or at least some of them, without specifying which part) had been apportioned and were correctly booked by qualified accountants who had prepared the accounts.

91.  In my view, this dispute is yet another red herring: whether the plaintiff’s computer festivals made a profit or incurred a loss or how any profits were to be used were neither here nor there.  What matters is that, as accepted by the plaintiff, the Festivals and HKCCF were profiting making events.  The fact that individual events turned out to incur losses does not affect the commercial nature of the events.  In the same way, even if the plaintiff chose to apply the surplus from the Festivals to Sham Shui Po district affairs or used its operating surplus for staff benefit did not make the plaintiff a “non-profit making organisation”.

92.  Accordingly, in the absence of any malice on Mr Shea’s part, these meanings were fair comment.

93.  As Mr Hon accepted in his closing submissions that there was no evidence of malice, the fair comment defence succeeds.

VII.(3) Meaning (5) - in organising the computer festivals, the plaintiff was in disregard of its members’ interest

94.  This is again a comment rather than a statement of fact.  It is a comment on a matter of public interest for the reasons explained above.

95.  I have already described the undisputed fact that many of the plaintiff’s own members were disgruntled by the frequency of the computer festivals organised by the plaintiff, so much so that the Alliance and the Association were formed with a view to protecting and promoting their interests vis-à-vis the plaintiff.

96.  Added to the facts proved as described in paragraphs 80 to 86 above, and in the absence of malice, the defence of fair comment is amply made out.

VIII. DISPOSAL

97.  For the reasons given above, the plaintiff’s claim fails and is dismissed.  I have asked counsel to address me on costs and both counsel informed me that there was no reason why costs should not follow the event.  Accordingly, the defendant shall have the costs of the action, to be taxed if not agreed on the party and party basis.

IX. POSTSCRIPT

98.  I cannot conclude without voicing my serious concern that the costs of this action would probably be wholly disproportionate to the seriousness of the case.  Even If the plaintiff’s claim succeeds, this is far from being a serious one justifying a 6-day trial in the High Court. Indeed, Mr Hon in his closing submissions realistically suggested that the appropriate range of award would be $50,000 to $150,000, but closer to the lower end.  Moreover, many issues raised in the pleading were either not pursued (such as claims for exemplary damages and injunctive relief) or had no realistic prospect of success (prime examples are malice, and special damages).  The lack of focus in preparing for the case is evident by the fact that the witness statements contain many irrelevant matters and that most of the hearing bundles were not referred to at all.

99.  In my view, this was a case which should have been brought (if at all) and disposed of in the District Court.  The amount of damages bravely sought by Mr Hon speaks volumes.  Even if it were thought (Mr Hon did not make this suggestion) that there was an advantage of bringing the case before the High Court because of the availability of jury in a defamation trial, once the case was set down before a judge alone this consideration would cease to be relevant.  The parties and their legal representatives should have taken a realistic look at the case shortly after exchange of witness statements, or at the latest when the case was set down, and take a realistic view as to whether a direction for transferring the case to the District Court should have been made.  Under O.1A r.3, the parties and their legal representatives have a duty to assist the court in achieving the underlying objectives set out in O.1A r.1.  It seems to me that in this case the parties and their legal representatives have failed to fulfil that duty.

100.  During the trial, I was minded to award costs on the District Court scale whatever might be the outcome.  I have specifically raised that question with counsel during final submissions, but both Mr Hon and Mr So were, perhaps understandably, reluctant to advance any submissions in that regard.  In the end, I have decided – albeit reluctantly – that I would not make such an order in this case, mainly because I did not feel that I have been given all relevant information on which I could properly exercise my discretion, and to require the matter to be considered more thoroughly would necessarily incur further time and costs.  However, I hope these remarks will serve as another reminder to parties and practitioners of their duty to assist the Court in proper case management, as well as a warning of potential adverse costs orders the court may make in similar circumstances.

Annexure A - Apple Article

Apple Daily | 2009-04-16

Newspaper | A20 | 論壇 | By 佘繼泉

瘋狂電腦節的背後

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佘繼泉電腦業界大聯盟臨時召集人

令全城瘋狂的深水埗電腦節，不足四個月在九龍東復活，再加上灣仔會展的電腦通訊節，一年一次的電腦節，便變為一年三次。原本，電腦節對消費者和經營者來說，皆是好事一件。消費者可以買平貨，經營者可以借機宣傳促銷，鄰近的商戶更可受惠於人流增加，大家得益。但是，將年宵變為「季宵」，將平價傾銷變為恒常，讓一年一次的節日變為日日也瘋狂，這不但違反了電腦節協助業界的原意，更嚴重威脅到業界的生存。電腦節針對本地市場，銷售對象有限，塘水滾塘魚，餅還是那個餅，客還是那班客，刺激消費的作用有限。電腦節辦得密，消費者自然會想一想，多等一兩個月才到電腦節掃貨。根據過去的經驗，行業在電腦節的前四周和後六周，要經歷寒冬期，店舖慘淡經營。電腦節由一變三，寒冬期就有半年多，生意根本難以維持，更很可能將業界的冬季，變為永遠的冰河時期。

代理直銷價明顯較廉

電腦節看似成功，但其實這個成功，是以整個電腦零售行業的健康經營為代價，有如殺雞取卵。例如，代理商會借電腦節的機會，直接把貨品在零售市場銷售，由於代理商沒有零售商燈油火蠟的支出，價格優勢明顯，一般零售商戶難以匹敵。有個顯示器的個案，店主向代理商的入貨價錢是一千六百九十元，但店主在電腦節看到代理商的直銷價，竟然是一千四百九十元！店主不但血本無歸，更無辜的，熟客還以為他牟取暴利。此外，電腦節以割價招徠，刻意營造人頭湧湧，萬人空巷的氣氛，但在極度擠逼的環境下，根本沒有任何服務可言，優質的銷售服務不知從何談起，這對業界的提升根本毫無好處，長遠來說，對消費者亦未必有利。電腦節帶來的，還有其他社會代價。政府需投入大量資源，協助人群控制。佔用公共地方，也剝削其他市民使用的權益，電腦節亦無可避免，帶來交通擠塞等問題。如果電腦節是一年一度的盛事，大家還可體諒，但若變成每季一次，就難免引人反感。號稱代表業界發聲的香港電腦商會，作為電腦節的搞手，近日被業界質疑借電腦節牟利，事實上，過去的深水埗電腦節和今次的九龍灣電腦節，商會都不用付租，更有政府協助打點場外安排，但商會還是向參展商徵收與市價相約的租場費用。電腦商會雖發出聲明表示絕無其事，但對大家關心的收支問題，商會還是欠缺清晰的交代，對電腦節為行業帶來的種種苦況，商會更是無動於衷，還是沉醉於電腦節的瘋狂當中。人氣急升的Laughing哥有句名言：「上帝要你滅亡，必先令你瘋狂。」希望令全城瘋狂的電腦節，不是帶領電腦零售行業走上滅亡之路。

Annexure B - Sing Tao Article

Sing Tao Daily | 2009-12-31

Newspaper | A16 | 每日雜誌

電腦節鬧雙胞 掀對撼惡鬥 四商場另闢蹊徑 抗議生意被搶

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由香港電腦商會主辦的「香港電腦節」將於下月十五至十八日舉行，今屆不僅首度移師長沙灣，更鬧出「雙胞」，由深水埗四個電腦商場商戶組成的「電腦業協會」，差不多同期舉行「深水埗電腦節」，更要早三日開鑼，還高舉「腦場展場價錢同步」的口號，擺明要「對着幹」，勢掀起一番業內惡鬥，卻益了消費者。電腦業協會不諱言，電腦商會一年舉辦多次電腦節搶生意，已令深水埗腦場多家老字號執笠，故今次不但要在價錢和售後服務上對撼，更要「踩場」抗議。記者方雅儀、梅思貽

去年吸引四十五萬人次入場的香港電腦節下月中開鑼，以深水埗黃金電腦中心及高登電腦廣場為首的二百多名電腦商戶，將於差不多同期舉行「深水埗電腦節」，雙方的「埋身戰」令電腦商會與電腦商場小商戶的「嫌隙」浮出水面，部分小商戶認為香港電腦節「密密搞」，蠶食了他們的生計，令他們生意難做。事實上，今年四月數個在深水埗區的電腦商場，為抗議舉辦多場大型電腦節，影響商場生意，曾集體熄燈十五分鐘，當時有逾七成商戶響應。

電腦節售特別版貨品

雖然對方來勢洶洶，但香港電腦節主辦單位香港電腦商會會長張耀成卻不慌不忙地說，「兩個電腦節同期舉行，可以發揮協同效應，更加成行成巿，是件好事。」他又指，電腦產品「劈價」在行內很常見，並非特別事。「香港電腦節辦了多年，已成為類似行花巿般的熱鬧活動，花店天天都有花賣，但是人們偏偏要去行花巿，就是因為兩者意義不同，辦電腦節，很多供應商為了宣傳，會提供一些特別版貨品，或者送大量贈品，讓巿民享受到更多優惠。今次電腦節會似一個嘉年華，有抽獎、懷舊遊戲、美食等，而且是免費入場，無論巿民購物與否，都可以當作消閒活動。」他指出，今次電腦節首度離開過往的深水埗福華街及福榮街，主要由於上屆人流太多，曾一度構成交通擠塞，故今次移師長沙灣遊樂場舉行。據知，上屆香港電腦節在四日內，生意額高達二億三千萬，今屆的陣容比上屆更鼎盛，攤位由九十個增至一百五十個，參展商也多了三四成。

有供應商被參展商走數

不過，香港電腦業協會卻坦言，兩個電腦節同期搞，其實是逼於無奈。電腦業協會永遠名譽會長佘繼泉不諱言，電腦商會自去年十二月起，一年內已舉辦了五次香港電腦節，令深水埗腦場不少經營多年的商戶，都因被搶生意，捱不住而結業，「單是十一、十二月都執了兩家開了八年的老字號，由○二年電腦節開始搞至今，已執了十幾家，因為港人買電腦的消費模式已改變了，大家等電腦節舉行時才買，但之前就會來腦場問價、諮詢哪一部好，但最終不會在腦場買。」他說，消費者忽略了電腦產品的售後服務，「據我所知，有些在香港電腦節參展商，並非做開電腦的商戶，他們只是向人買個位，趁一年幾個電腦節賺錢，這些參展商未必有售後服務，以往更試過有電腦供應商，被參展商走數，因電腦節名堂大，供應商深信人流多，把一千幾百部腦批出去，結果電腦節完後，那個參展商執笠，連貨一齊走埋佬。」

無生意被逼自己搞

他坦言，腦場商戶在逼於無奈下，亦會參加香港電腦節，「唔擺唔得，因那幾天腦場內完全無生意，被逼擺，但就要交雙倍租金，電腦節攤位要萬多元租，自己鋪又要付租金，所以今年我們決定自己都搞。」他又指，今年該會將在香港電腦節舉行期間，到長沙灣現場抗議。他說，香港電腦節最賺錢的只是主辦單位，百多個攤檔，單租金收入已數百萬元，「長沙灣場地免費，又有區議會贊助，更有警方控制人流，除搭建攤位和請保安等要從中扣除成本外，其餘收入都歸商會，表面上它是非牟利組織，但他們的職員為何可以一年去幾次海外旅行會議？」他又質疑，深水埗區議會當初贊助電腦節，原為推動該區本土經濟，但之後電腦節相繼移師其他地區舉辦，已偏離原意。

「腦場」擁售後服務優勢

香港電腦業協會副主席呂健忠表示，深水埗電腦節將於一月十二日至十八日在黃金電腦中心、高登電腦廣場、新高登電腦廣場及高登電腦中心舉行，今次提出「腦場展場價錢同步」的口號，總之電腦節賣甚麼價錢，他們也會賣甚麼價錢，在價錢同步下，腦場的最大優勢是有完善的售後服務，「我們不似花巿，擺完幾天就沒有影，我們有完善的售後服務，亦有詳細的即場講解。」他坦言，今次腦場搞的電腦節，能夠在價錢上與展場競爭，主要由於得到供應商的支持，有些產品是蝕賣，有些則是以成本價出售。對同業的指控，張耀成回應指，參展商是公開抽籤分配攤位，除會員外，亦有其他電腦零售商或供應商參展，腦場的商戶亦佔一半，但參展商有否把攤位賣給他人，主辦單位很難控制，「參展商可以跟人合作拆帳，但若非做開電腦零售的，供應商未必肯賒貨。」但他承認，過去曾發生有參展商在電腦節完結後結業，「所以我們都叫供應商評估風險，或採現金交易。」他又強調，商會不是非牟利組織，只是「唔賺錢」，香港電腦節收入，商會須自負盈虧，用以支付全職員工的薪水和日常會務開支，「我們十多名職員，每年都要二百多萬，電腦節前幾個月，都要大量OT，所以每年一兩次會安排他們出外旅行兼開會，輕鬆吓，去過海南島、日本，但我做主席就完全是義務。」