CHINA INNOVATION INVESTMENT LTD AND OTHERS v. APPLE DAILY LTD AND OTHERS

HCA 2424/2019

[2026] HKCFI 4654

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2424 OF 2019

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J U D G M E N T

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Introduction

1.  This is the trial for the Plaintiffs’ action in libel and malicious falsehood against the 1^st and 2^nd Defendants. 

2.  The Plaintiffs have reached settlement with the 3^rd Defendant and do not pursue their claims against the 4^th to 7^th Defendants. 

3.  Although the 1^st and 2^nd Defendants have filed their Defence, they did not file any List of Documents or Witness Statement. 

4.  At trial, the 1^st and 2^nd Defendants were absent.  The 2^nd and 3^rd Plaintiffs gave evidence and their evidence was not challenged. 

The Plaintiffs’ claims

5.  The Plaintiffs’ case is that, in the period between 23.11.2019 and 7.12.2019, the 1^st, 2^nd and 3^rd Defendants published or caused to be published 10 articles (“Articles”) which made various defamatory allegations against the Plaintiffs. 

6.  The 1^st Plaintiff is an investment company listed on the Main Board of the Hong Kong Stock Exchange (stock code: 1217).  The 2^nd Plaintiff is the Chairman of the Board, the Chief Executive Officer, and an executive director of the 1^st Plaintiff.  The 3^rd Plaintiff is the wife of the 2^nd Plaintiff and an alternate director to the 2^nd Plaintiff in the 1^st Plaintiff. 

7.  The 1^st and 2^nd Defendants were the proprietor, printer, and publisher of Apple Daily, a daily newspaper published in printed format in Hong Kong that was also published at the website hk.appledaily.com (“Apple Daily Website”).  The 3^rd Defendant is the editor-in-chief of Apple Daily. 

8.  Out of the 10 alleged defamatory articles, 8 articles were published at the Apple Daily Website and 2 articles were published in the hard copy version of Apple Daily. 

9.  The Plaintiffs alleged that the defamatory allegations contained in the Articles were to the effect that:

(1)  The 1^st Plaintiff is an intelligence agency that was established under, and acts in accordance with, the will and instructions of the Communist Party of China (“CPC”) and/or the Chinese People’s Liberation Army (“PLA”). 

(2)  The 2^nd and 3^rd Plaintiffs are intelligence operatives or secret agents who act in accordance with the will and instructions of the CPC and PLA. 

(3)  The Plaintiffs received substantial secret funding from CPC and/or PLA every year; and secretly gathered intelligence on and infiltrated Hong Kong’s democratic, anti-communist and/or pro-independence movement. 

(4)  The Plaintiffs participated in the suspected illegal abductions, renditions and detentions of Hong Kong citizens in late 2015. 

(5)  The Plaintiffs collaborated with triad societies and secretly deployed and mobilized the media into promoting the CPC and suppressing dissents. 

10.  It is the Plaintiffs’ case that when some of the Articles were published the 2^nd and 3^rd Plaintiffs were in Taiwan.  Despite their immediate action to issue a public announcement refuting the allegations, they were prevented from leaving Taiwan to Hong Kong on 24 November 2019 as planned.  They were prevented from so doing when they received a notice from the Investigation Office of the Ministry of Justice of Taiwan to request cooperation in its investigation into the allegations made in the subject publications.  As a result, the 2^nd and 3^rd Plaintiffs were unable to effectively participate in the operations of the 1^st Plaintiff, thereby causing disruptions to the 1^st Plaintiff’s operations. 

11.  The Plaintiffs also alleged that due to the defamatory publications, the 1^st Plaintiff’s share price dropped significantly during the period between 22 November 2019 and 7 December 2019. 

12.  Besides, the 2^nd and 3^rd Plaintiffs maintained that the defamation also affected their private life in that their bank accounts had been cancelled by the banks, they were subject to investigation by the Taiwan authorities and also unable to receive medical treatments in Hong Kong. 

The Defence

13.  As summarized by Mr Thomas Wong, counsel for the Plaintiffs, the pleaded defence of the 1^st and 2^nd Defendants are basically that:

(1)  The 2^nd Defendant was merely the copyright holder of the work on the Apple Daily Website, and as such was not involved in the publication of the relevant articles. 

(2)  3 of the Articles were not published by the 1^st or 2^nd Defendants but rather by Next Magazine Taiwan at the website tw.nextmgz.com. 

(3)  The words contained in the Articles, in their natural and ordinary meaning and proper context, were not defamatory and not capable of bearing any meaning defamatory of the Plaintiffs. 

(4)  The defence of Justification is available.  The words contained in the articles were true, as they merely reported the fact that various allegations had been made in relation to the Plaintiffs.  

(5)  The defence of Qualified Privilege is available.  The articles related to undercover espionage work that allegedly took place in Hong Kong, this being a matter of public and general concern and interest.  They also made a neutral report of allegations made by others, hence fell within the ambit of reportage. 

Issues

14.  The issues for determination in this trial are thus:

(1)  Have the Plaintiffs made out prima facie claims for defamation and malicious falsehood? 

(2)  Do the 1^st and 2^nd Defendants have a defence of justification? 

(3)  Do the 1^st and 2^nd Defendants have a defence of qualified privilege? 

(4)  What is the quantum of damages? 

Evidence

15.  The 2^nd and 3^rd Plaintiffs gave evidence at trial.  They adopted their Witness Statements as their evidence-in-chief and the contents of which verified their pleaded case.  As no defendant was present, there was no challenge whatsoever to the evidence of the 2^nd and 3^rd Plaintiffs. 

16.  Although the 3^rd Defendant had filed his Witness Statement and it was ordered that the content of which be stood as his evidence-in-chief, as his case is now settled and he has not testified in the proceedings, his Witness Statement shall not be admitted as evidence. 

17.  In other words, there is no evidence in support of the Defendants’ case or contradicting the Plaintiffs’ evidence. 

Discussion

18.  As submitted by Mr Wong, to succeed in a claim for defamation, a plaintiff has to show that defamatory matters with reference to the plaintiff have been published by the defendant[1]. 

19.  As the proprietor and publisher of Apple Daily, the 1^st and 2^nd Defendants have prima facie participated in the publication of Apple Daily either in its paper format, or through the Apple Daily Website. 

20.  The 2^nd Defendant has not adduced any evidence to substantiate its plea that it was merely the copyright holder of the Apple Daily Website and that it was not involved in the publication of any of the Articles.  

21.  As submitted by Mr Wong, as the proprietor of Apple Daily and even the copyright holder of the Apple Daily Website, the 1^st and 2^nd Defendants must know who the printer was but have provided no such information to the court.  Adverse inferences could be drawn against them that they were also the printers of Apple Daily. 

22.  In the circumstances, in light of the evidence before the court, I found on balance that the 1^st and 2^nd Defendants have published, or at least participated in publishing the Articles as pleaded by the Plaintiffs in the Amended Statement of Claim.  

23.  The next question is whether the Articles contain defamatory matters with reference to the Plaintiffs. 

24.  Mr Wong has set out in some details the original scripts of the Articles with connotations, with a view to showing that there are defamatory meanings contained in them.  The defamatory meanings are the same as those referred to in paragraph 9 above. 

25.  It is not necessary to repeat here the contents of the Articles.  The wordings of the Articles are plain and unambiguous.  I have no difficulty in concluding that they are conveying the meaning as pleaded by the Plaintiffs and summarized under paragraph 9 above. 

26.  As submitted by Mr Wong, the substance of what is being said in the Articles carries one or more of the following meanings:

(a)  The 1^st to 3^rd Plaintiffs are secretly associated with the CPC and/or the PLA and have covertly undertaken work on their behalf. 

(b)  The 1^st Plaintiff is not a legitimate business but is instead engaged in various deceptive and/or illegal practices, in Hong Kong, Taiwan, and/or abroad. 

(c)  The 2^nd Plaintiff is not a legitimate businessperson but is instead engaged in various deceptive and/or illegal practices, in Hong Kong, Taiwan, and/or abroad. 

(d)  The 3^rd Plaintiff engaged in these deceptive and/or illegal practices alongside the 1^st and 2^nd Plaintiffs. 

27.  In my judgment, these meanings are defamatory against the 1^st, 2^nd and 3^rd Plaintiffs.  The matters published exposed the Plaintiffs to contempt and ridicule by others and cause others to shun them[2]. 

28.  To conclude, the Plaintiffs have made out prima facie claims for defamation against the 1^st and 2^nd Defendants.  

29.  We shall now turn to the Defendants’ pleaded defence.  Regarding the defence of Justification, the 1^st and 2^nd Defendants pleaded that the 7^th Defendant had in fact made the various allegations against the Plaintiffs contained in the Articles.  As submitted by Mr Wong, the Defendants cannot justify the libel by proving only that the allegations have been made[3].  They can only justify the libel by proving that the allegations are true and for that, the Defendants have adduced no evidence in support.  

30.  Hence, the defence of Justification must fail. 

31.  The next issue is whether the 1^st and 2^nd Defendants have a valid defence on Qualified Privilege. 

32.  Mr Wong has set out the relevant legal principles on the defence of Qualified Privilege based on Public Interest[4] and also Reportage[5]. 

33.  In the present case, there is no plea or evidence that the 1^st and 2^nd Defendants have taken any steps to verify the allegations made in the Articles or the reliability of their source of information.  Besides, in the evidence, no attempt has been made by the 1^st and 2^nd Defendants to provide the Plaintiffs with an opportunity to present their side of the story prior to publication. Furthermore, although the Board of the 1^st Plaintiff released a statement denying the allegations made by the 7^th Defendant, none of the articles recorded that the 1^st Plaintiff had denied the allegations made. 

34.  The defence of Qualified Privilege must also fail. 

35.  In the premises, the 1^st and 2^nd Defendants are liable to the Plaintiffs for their claims on libel.  As submitted by Mr Wong, there is no need for this court to deal with the action of malicious falsehood as the Plaintiffs’ claims in defamation has succeeded. 

Damages

36.  The award of general damages in libel is compensatory in nature, to compensate a plaintiff for the damage to their reputation, to vindicate their good name, and to take account of the distress, hurt, and humiliation which the defamatory publication has caused. The assessment necessarily involves a substantial degree of subjectivity.  In performing the assessment, the Court must consider all the circumstances of the case relevant to determining what would be an appropriate compensatory sum[6]. 

37.  For general damages, the Plaintiffs claim for the following amounts: 1^st Plaintiff: HK$1.2 million; 2^nd Plaintiff: HK$800,000; and 3^rd Plaintiff: HK$600,000. 

38.  The following factors should be considered in deciding the appropriate amount of damages: (a) the gravity of the libel; (b) the extent of the publication; (c) the effect on the Plaintiffs’ feelings and (d) the defendants’ conduct.  As mentioned above, a substantial degree of subjectivity is necessarily involved.

39.  In my judgment, the appropriate amount of general damages to be awarded to the 1^st, 2^nd and 3^rd Plaintiffs should be HK$600,000, HK$400,000 and HK$300,000 respectively. 

40.  Aggravated damages should also be awarded to the 2^nd and 3^rd Plaintiffs.  The appropriate amount should be HK$100,000. 

Disposition

41.  Judgment be entered against the 1^st and 2^nd Defendants in favour of the 1^st, 2^nd, and 3^rd Plaintiffs. 

42.  The 1^st and 2^nd Defendants do pay the 1^st Plaintiff the sum of HK$600,000 as general damages. 

43.  The 1^st and 2^nd Defendants do pay the 2^nd Plaintiff the sum of HK$400,000 as general damages. 

44.  The 1^st and 2^nd Defendants do pay the 3^rd Plaintiff the sum of HK$300,000 as general damages. 

45.  The 1^st and 2^nd Defendants do pay the 2^nd Plaintiff the sum of HK$100,000 as aggravated damages. 

46.  The 1^st and 2^nd Defendants do pay the 3^rd Plaintiff the sum of HK$100,000 as aggravated damages. 

47.  On a nisi basis, interest on general damages and aggravated damages be awarded from the date of Writ at prime rate until the date of this Judgment and at Judgment Rate thereafter until payment. 

48.  On a nisi basis, the costs of and incidental to this Action, insofar as between the Plaintiffs and the 1^st and 2^nd Defendants, be paid by the 1^st and 2^nd Defendants to the Plaintiffs, to be taxed if not agreed. 

49.  In the absence of any application from the parties to vary the orders nisi within 14 days from the date of this Judgment, the orders nisi will become absolute.