PAUL KI PING KI AND ANOTHER v. ORIENTAL DAILY PUBLISHER LTD. AND OTHERS

CACV 201/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 201 OF 1999

(ON APPEAL FROM HCA No. 9748 of 1995)

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J U D G M E N T

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Hon Leong JA:

1. Dr Paul Ki Ping Ki commenced a libel action in his personal name as the 1st plaintiff and in his firm name Hong Kong Washington Company as the 2nd plaintiff against six defendants. The 1st defendant was the publisher, the 2nd defendant was the editor and the 3rd, 4th and 5th defendants were reporters, of the Oriental Daily News. The 6th defendant was a reporter of East Week Magazine, a subsidiary of the 1st defendant. The plaintiffs claimed that an article published on 9 September 1995 in the Oriental Daily News was defamatory of them. The writ was not served on the 5th defendant. After a trial before Deputy Judge Anthony To and a jury, the 2nd plaintiff obtained judgment against the 1st to 4th defendants. The jury awarded only nominal damages of $1 against the four defendants. No costs order was made but the Judge ordered the plaintiffs to bear the jury expenses. The jury found the 6th defendant not liable and 2nd plaintiff's claim against the 6th defendant was dismissed with costs to the 6th defendant on an indemnity basis.

2. The 1st plaintiff's claim was struck out by the Judge on the ground of duplication of proceedings and costs on an indemnity basis awarded to all the defendants against the 1st plaintiff.

3. The plaintiffs appealed.

4. The background leading to the publication of the article is this. The 2nd defendant put up an advertisement on 7 September 1995 in the Apple Daily News for sale of land in Iowa in the United States at HK$100 per lot of one square inch, stating that the land had been visited by extra-terrestrial being. Potential buyers were invited to send cheques to an address in an industrial building in Tuen Mun. Reporters of the Oriental Daily News felt suspicious about the advertisement and started an investigation. The 4th and 5th defendants visited the address and found the 2nd plaintiff did not exist and the premises had not been used for sometime. The 5th defendant took photographs of the premises. They reported the results of their investigation to the 3rd defendant. Based on the information and photographs supplied by the 4th and 5th defendants and also on research made by other members of the newspaper that there had been no report of unidentified flying objects sighted in Iowa for the last ten years, the 3rd defendant wrote an article. The article was published in the Oriental Daily News on 9 September 1995 suggesting that the 2nd plaintiff was a defunct company and the land sale scheme might be deceptive. The plaintiffs claimed that this article was defamatory.

5. On the night before the 3rd defendant's article was published, the 6th defendant had an interview with Dr Ki and obtained certain information from him. At that time, the 3rd defendant's article was already with the printing office. The plaintiffs claimed that the 3rd defendant's article also contained the information Dr Ki disclosed to the 6th defendant at the interview and therefore the 6th defendant was involved in the libel.

6. The Judge in his ruling on costs found that it was wholly unreasonable and without basis for the plaintiffs to sue the 6th defendant simply because she was employed by a subsidiary of the 1st defendant and had conducted an interview with Dr Ki. The Judge ruled that the 6th defendant was entitled to be compensated in costs on an indemnity basis.

7. The grounds of appeal in the amended notice of appeal filed by Dr Ki on 21 December 1999 are as follows:

1. The Judge was biased in his direction to the jury to award to the 2nd plaintiff only nominal damages because in an earlier case against a different magazine where the same defamatory article was published, the plaintiffs obtained judgment and were awarded $200,100 damages.

2. The 6th defendant was employed by the parent company of the 1st defendant and was the person who interviewed Dr. Ki. The 6th defendant had assisted the publication of the article in gathering information for the 1st to 4th defendants the day before the article was published. Therefore the Judge was wrong to require the plaintiffs to pay the 6th defendant's costs on an indemnity basis.

3. The 3rd defendant and the 5th defendant and their counsel had lied to the court.

8. Dr Ki who conducted this appeal in person, submitted firstly that the Judge in his direction to the jury on damages deliberately degraded his qualification, character and reputation, implying to the jury that there was little damage to his reputation that was worthy of compensation. Dr Ki also submitted that the Judge had repeated to the jury many times the evidence in the defendants' favour but did not give the evidence which was in his favour the same treatment. This had created bias in the jury's mind and made them think the lesser of him; the result was that he was only able to obtain nominal damages. He said the Judge in his direction queried the existence of Iowana University of which Dr Ki claimed he was the founder and owner and implied to the jury that he was a liar. He submitted the Judge was wrong to tell the jury to award nominal damages to him.

9. He referred us to the following parts of the Judge's summing-up which he said were indicative of the Judge's biased attitude towards him.

10. At page 342 of the transcript, the Judge said this:

"Now, on the other hand, Mr KI says he is the founder of Iowana University. It is a huge building, the size of Hong Kong Peninsular Hotel that we know of. I heard Mr KI saying half the size, but I heard the whole size. It has six storeys. It has a library, a computer room, a laboratory where he did his AIDS research. Now, what else occupied the six storey of this huge building he didn't tell us. He said he employed no staff for this storey building of the size of Peninsular Hotel. He says it was a distance learning university through the Internet system. He does not admit any student. He just lets students draw on his reservoir of knowledge through the Internet system. He was travelling at that time to and fro between Hong Kong and the USA, and while he was in Hong Kong he manages the university by means of remote operation through Internet."

11. Later at page 343 the Judge said:

"Now, secondly, his evidence is that he is Dr Paul Ki, the president of Iowana University of which he is the sole proprietor. Now, this status is important in determining the amount of damages you are going to award to him if you find his case proved. Now, what do you say about his registration of the Iowana University? You will recall his evidence. At one stage he said there was no need to register because it was an Internet university, but when cross-examined and shown his application form for registration and the replies from the Secretary of State, he said there was no need to register because his university was not physically admitting students. And then he said he made a mistake with his application.

Now, Mr Ki himself was shown this Exhibit D3, the letters from Iowa - State of Iowa, the Secretary of the State of Iowa. He does not dispute the authenticity of this document. Look at this document in your own leisure and consider this evidence. Is he telling you the truth when he says his university does not need to be registered either because it is an Internet university or because it is not physically admitting students? You have his application, you have the reply of the Secretary of the State of Iowa. In his application, in fact, he claims that this university is entitled to exemption in accordance with the law of the State of Iowa, and it says that his university offers BS degree. You can read all that in the exhibit.

And then you see the query raised by the Secretary of State, and then he wrote back, and then despite his earlier clear and unequivocal language that his university offered BS degree, then he said in his letter that the university offer English language, business courses, short-term study and learning -- no mention of degree this time. What did he say in the witness box about registration? He said no need to register because Internet university was not admitting students. Look at all this.

It is clear that from the letter of the Secretary of State, that no admission is given to this organisation. Is it not true that this university does not need to be registered? It is a matter for you, but what is the relevance of talking about all this? The relevance is this; is Mr KI telling you the truth about this university? Apart from this correspondence which Mr KI does not dispute, the defendant could not offer anything, any evidence about his six storey Peninsular Hotel sized university. Now, what can you draw, what inference can you draw from his evidence now placed before you contained in this document? Do you believe that what he says about his Iowana University is true? Do you believe that that university does not need to be registered? Do you believe what he says about this six storey building the size of Peninsula Hotel situated at 203 West Montgomery Street, Creston? Now, look at his answer in cross-examination and look at all these documents. Ask yourselves, 'Is he credible?' Again, this is a matter for you."

12. Then at page 352 the Judge referred to Dr Ki's reputation:

"Now, his application (sic) is a man's personal assets, so a convenient starting point would be after sale how can money build up his reputation? It is unfair, I mean money and reputation, but this is the nearest we can get. Now, for the plaintiff, he claims to be Dr KI and there is no evidence what kind of a doctor he is. You have a copy of his diploma in the bundle. He claims to be the founder of Iowana University. Now, I am not going to repeat about the university, you make up your mind what it is worth.

Now, he did not tell you about his studentship, of course. He talked about AIDS and his medicine. There is not much there so you may just as well ignore that, in upsetting his work, but one thing, he talked about AIDS. Presumably his training should be biochemistry, immunology, pharmacology, microbiology, genetic engineering, in that sort of area, but what does he seek to tell the Secretary of State of Iowa. He says he wants to do a BS (degree) program in business administration. Is that consistent? Does it look dubious to you? A matter for you. Now, what is he now? Right, that has to do with assessment of what sort of damages you pay him, you award to him. Now he says he is a field officer with the Agricultural and Fisheries Department. Now, that is not a professional appointment which would require a Bachelor degree."

13. This met with objection from Dr Ki who told the Judge that even a field officer required a degree.

14. The Judge then corrected himself and said:

"Okay, just for your benefit I withdraw what I say, so ignore what I say. What is he now? He is a field officer with Agricultural and Fisheries Department. Now, you also make a finding what he was in 1995. He was not a field officer in 1995. What was he doing? We really do not know. He says he was doing research, doing Iowana University, talk about this Hong Kong Washington Company. What business - we do not know, what transaction - no transaction.

So if he was the former, then you assess damage - what damage the article would have done to him? And in this respect you take into account of the readership of the newspaper. What is the readership of this Chinese newspaper in Iowa? Why do I say Iowa? Because I was talking about his status as Dr KI and founder of this Iowana University, so if any damage would be done to that reputation, it would have to be in Iowa. Nobody knows of his status in Hong Kong in that capacity. Would the defamatory article be brought to the attention of those who know him professionally? If 'yes', then what would those people think about Dr KI and the allegation of dishonesty and fraud?

On that basis, if you are satisfied that he suffered loss in reputation, then you should give him substantial damages, but if not, then such damage as you feel money would be able to build his reputation. If you regard him as just an ordinary businessman in Hong Kong, just an ordinary businessman of Hong Kong Washington Company with whatever business you assess the company to have been doing, then you assess what damage he suffer."

15. Before us, counsel for the respondents submits that the business of the plaintiffs was of a dubious nature and no transaction had been recorded even though the plaintiffs have asserted that the scheme would have brought him enormous profit. Further, there was no sufficient or credible evidence of the plaintiff's credentials as what he asserted himself to be. The direction by the Judge was correct and the award by the jury of nominal damages was reasonable in these circumstances.

16. On the question of assessment of damages in defamation case, Gatley on Libel and Slander 9th Ed. says this:

"The assessment of damages is peculiarly the province of the jury in an action for libel. Subject to guidance and directions of the judge, the jury will consider and determine all matters relating to the assessment of damages. ..." (Paragraph 34.19)

"Providing there is no ground for suspecting misconduct on the part of the jury and they have decided the issue of liability, the court will not interfere with an award simply on the ground that it is nominal in amount. There is no necessary inconsistency in a jury finding a verdict for a plaintiff for halfpenny damages, even though they find that the libel was maliciously written, for 'the jury may have thought there was some ill feeling, and yet that the plaintiff suffered no real damage'. Alternatively, the jury may have been reasonably inclined to the view that the plaintiff did not seek financial reward." (paragraph 36.28)

17. The Court of Appeal has power to order a new trial where an award of damages by a jury is set aside on appeal on the ground that it is excessive or inadequate or it may substitute its own assessment (paragraphs 36.30 & 31). In Cheung Ng-sheong Steven v Eastweek Publisher Ltd & Anor [1995] 3 HKC 601, it was held that the scope of substituting its own assessment for the jury's award was limited. Nevertheless, juries in Hong Kong could be given guidance in quantum by being informed of libel awards made by judges.

18. As may be seen from the above extracts of the Judge's summing-up, what the Judge said to the jury bordered on a submission by counsel for the defendants rather than a well balanced summing up of the evidence. That the Judge did not think highly of Dr. Ki's credibility and that there was not much in Dr Ki's reputation that could suffer a loss as a result of the publication of the article are apparent from the message the Judge had told them. The Judge could have chosen a better and more balanced approach in guiding the jury on the question of damages. Nevertheless, the Judge had not departed from principle when he told the jury to consider what damage the article would have done to Dr Ki's reputation and if they considered that he suffered loss to his reputation and his business, they should award substantial damages. If they considered he suffered no damage in reputation apart from loss of business, nominal damages should be awarded.

19. In all the circumstances this was not a case where the award made by the jury was so unreasonable or wrong in principle that this court should set it aside. The fact that the plaintiff had obtained a substantial award in another case involving a different article, is not relevant as each case must be decided on its own facts. This court has no reason to interfere with the award of the jury.

20. On the second ground, the jury found the 6th defendant not liable. The Judge considered the plaintiffs had no reason to drag the 6th defendant into litigation and she should be compensated in costs on an indemnity basis.

21. The basis for awarding indemnity costs was considered by Godfrey JA in Sung Foo Kee Ltd v Pak Lik Co. [1996] 3 HKC 570. In this case, Godfrey JA referred to the observations on this question in a number of English cases. The observations of Kerr LJ and Easthman J in Disney v Plummer (CA 16.11.1987 unreported) and that of Millett J in Macmillan Inc v Bishopgate Investment Trust Ltd (10.12.1993 unreported) are repeated here because we find these appropriate to the circumstances of the present case.

22. Kerr LJ said:

"... I wholeheartedly agree with the course which the judge took in relation to this ill-advised and, if I may say so, stupidly conducted piece of litigation. It is the sort of robust attitude which should be taken to pieces of litigation of this kind. The defendants still suffer, even when they win. But they should at any rate have been given such assistance as can be provided by the rules. I do not accept, as counsel submitted, that indemnity costs are only appropriate if there is some deception or underhand conduct on the part of the losing party, but not if the litigation is merely fought bitterly or even unreasonably. In the latter type of cases judges can still exercise their discretion under O 62 r 3(4)."

23. Eastman J said:

"The judge having listened to the various submissions which are summarised, clearly took the view that this was one of the cases which he could, and should, make a robust order so as to discourage other plaintiffs from pursuing litigation in the way in which this litigation has been pursued on behalf of this particular plaintiff. In my judgment he had ample material on which he could find that it was appropriate to order costs on the indemnity basis and indeed, after the defendants had been exposed to the very serious consequences of this bitterly conducted litigation, they would have felt a sense of considerable injustice if their costs had been whittled away down to the costs on a standard basis."

24. Millet J said:

"The power to order taxation on an indemnity basis is not confined to cases which have been brought with an ulterior motive or for an improper purpose. Litigants who conduct their cases in bad faith, or as a personal vendetta, or in an improper or oppressive manner, or who cause costs to be incurred irrationally or out of all proportion as to what is at stake, may also expect to be ordered to pay costs on an indemnity basis if they lose, and have part of their costs disallowed if they win. Nor are these necessarily the only situations where the jurisdiction may be exercised; the discretion is not to be fettered or circumscribed beyond the requirement that taxation on an indemnity basis must be 'appropriate'."

25. The 6th defendant had nothing to do with the defamatory article or any connection with the other defendants in producing or publishing this article. She was employed by a different company. Although this was one of the subsidiary companies of the 1st defendant, it was a separate company. There was absolutely no basis that the plaintiffs should have included the 6th defendant in the litigation. The 6th defendant had been unreasonably involved in costs in defending a litigation that should never have been taken out against her. The Judge had every reason to award to her costs against the plaintiffs on an indemnity basis.

26. The third ground was on a question of fact which had been decided by the jury. In any case, the 5th defendant was never served and he never participated in the trial. The third ground has no substance.

27. Dr Ki also complains about the Judge's striking out the 1st plaintiff from this action. The defamatory article was one relating to the advertised sale of minute lots of land in extra-terrestrial visited Iowa by Hong Kong Washington Company, and only a Mr Ki was mentioned in the article as the owner of the premises at which Hong Kong Washington Company was said to be located, and that the newspaper was not able to contact Mr Ki. Only Hong Kong Washington Company, being the 2nd plaintiff, was the target of the attack by the article, and not Dr Ki. There was no justifiable reason for the 1st plaintiff to be added as a party as his personal interest in the subject was fully covered by the 2nd plaintiff. I am of the view that the Judge's decision to strike out the 1st plaintiff's name from the action was appropriate in all the circumstances of this case.

28. For these reasons, I dismiss the appeal.

Hon Wong JA:

29. I agree and would also dismiss the appeal.

Hon Woo JA:

30. I agreed.

Hon Leong JA:

31. The appeal is dismissed with order nisi the costs of the appeal be to the respondents.