LEONORAH BOULTER v. CHRISTOPHER COMPTON STANLEY

HCA765/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 765 OF 2005

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J U D G M E N T

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Introduction

1. This is an assessment of damages in a libel suit following the entry of judgment against the defendant upon admission in his Affirmation/Defence.  The defendant chose not to appear at the assessment hearing, nor did he adduce any evidence. 

2. The circumstances attending upon the publication of the libellous statement are incontrovertible. 

The Established Facts

3. The plaintiff, Mrs Leonora Boulter (PW2), and the defendant, Christopher Compton Stanley, formerly co-directors, friends and colleagues, were at all material times and remain shareholders of a company called Evercrete International (Asia) Limited (Evercrete).  Miss Louisa Yip (PW1) joined Evercrete in August 2002 as a sales and marketing manager.  She was appointed as a director and made a shareholder in Evercrete in about May 2005.

4. The plaintiff explained that Miss Yip’s elevation within the company was necessary to regain her trust.  The defendant had apparently been warning Miss Yip on a number of occasions via text messages that she risked being laid off by the plaintiff, who was portrayed as a most unreasonable employer.  This was totally unfounded and so unsettled Miss Yip, a competent and well-regarded member of the staff, that she seriously contemplated leaving the company for employment elsewhere.

5. The plaintiff, a qualified Quantity Surveyor of some 15 years’ standing, furnished a witness statement which she adopted as her evidence-in-chief.  She also testified in elaboration of the irreparable harm that the defendant has unjustifiably inflicted on the company, on her professional reputation and on her personal life.  She said she was shunned by her piers at public functions, lost the confidence and respect of her friends and the company experienced a drastic reduction in business, so much so that additional working capital had to be sought to keep Evercrete viable.  In the process her shareholding as well as the defendant’s were inevitably diluted.  She specifically mentioned the dilution of her own shareholding in reference to the defendant’s complaint that his shareholding had been wrongfully reduced.

6. The removal of the defendant as a director was necessitated by his erratic, abusive, belligerent and thoroughly unprofessional behaviour both within and without the company.  His presence at the company’s premises had a markedly prejudicial effect upon the morale of the staff.  The plaintiff, a firm believer of feng shui, even added that contrary to the advice of the geomancer, the front door had to be kept closed to keep the defendant at bay.  The plaintiff further testified that she was so stressed and affected by the defendant’s persistent wrongful conduct that she went into labour at the office.   I have no difficulty in accepting her evidence as I did Miss Yip’s.  I find as facts all the matters that they have stated in their respective statements and evidence in court. 

7. The defendant has for reasons best known to himself harboured a notion that the plaintiff and her husband were stealing his business.  He communicated the false accusation via faxes to the general fax line at Evercrete for the general consumption of the staff and wrote in similar terms to a Mr Bill Meyers, the USA principal of a company called Creto, and to the father of the plaintiff. 

8. It was against this unhappy background that the defendant issued the offending text message to Miss Yip on 6 November 2004.  It was in these terms:

“Hi Louisa.  Whatever have I done to Leo that she is now trying to sue me?  I have not seen or spoken to her for over 18 months.  Bit unstable!  Be careful you dont get cheated like me.  Keep alert.  I was too trusting.  Never thought I would get stabbed in back.  Cant understand this latest legal nonsense.  I kept away from her & had nothing to do with her or ecrete.  What caused this stupid nonsense?  It makes me sick!  Take care! Best wishes.”

It is plain, as Miss Iu for the plaintiff submitted, that the text message was designed to give the clear impression that the plaintiff was considered to be mentally unstable, disloyal, untrustworthy and a person to be avoided at all costs.  These attributes, being wholly unjustified and untruthful, were without doubt defamatory of the plaintiff, and the plaintiff justifiably contends that her reputation, both professional and personal, has been irreparably compromised.  There was and still is no apology from the defendant for this course of conduct.

9. As between the litigants, there is in place another set of action previously instituted under HCA 1638/2004.  The plaintiff had once considered adding the current complaint to that suit, but that was vigorously resisted by the defendant, leading to the institution of a separate set of proceedings now before me for assessment of damages.  No doubt this would have increased the costs and the frustration to the plaintiff.

10. This, in my view, would be conduct to be considered when one turns to consider whether or not aggravated damages should be given and if so in what quantum.

Damages

11. The plaintiff seeks appropriate monetary compensation for injuries to her reputation and feelings.  This is clearly a recognised head of damages, see McGregor on Damages, 17th Edition, paragraphs 39-027 to 39-031.  The decision of Madam Justice Le Pichon, as she then was, in Hung Yuen Chan Robert v Hong Kong Standard Newspapers & Others [1996], 4HKC, 519 at page 533 B - G, provides a useful guidance on the basic approach to award of damages in cases of defamation.  The judge there observed:

“The objective is to ‘to restore the plaintiff as far as money can do so, to the position he would have been in if the tort had not been committed’.  See Duncan and Neill, defamation, op cit para 18.04.  Where there has been no retraction or apology, an order for damages is the only solatium available to the plaintiff. 

In a recent Court of Appeal decision in Cheung Ng Sheong Steven v East Week Publisher Limited [1995] 3HKC 601, it had to consider the question of damages for libel.  It accepted (at page 613 D - F) the submission that:

damages for libel must provide for several disparate elements, not only damage to esteem and reputation.  They also ‘must be sufficient to publicly and demonstratively and absolutely vindicate the plaintiff and to compensate for seriously injured feelings (Yu Kwong Chu v Consolidated Newspapers Limited (A258/86, unreported) at page 30’ not only caused by the original libel but all the subsequent aggravation thereof down to the verdict, which would restore the plaintiff’s ‘pride and confidence’ (McCarey v Associated Newspapers Limited (No. 2) [1964] 3ALLER 947 at 958).   They must enable the plaintiff to convince a bystander the baselessness of the charge if ‘the libel driven underground, emerges from its lurking place at some future date’ (Cassell & Company v Broome [1972] 1ALLER 801).” 

It has been noted by the learned judge that precedents as to quantum are generally of very little assistance as the type and effect of libel or defamatory statements would vary from case to case.  Additionally it has been stressed that personal injury awards have no relevance to the assessment  before the court.  In fact, it is impermissible to make any reference to injury awards.

12. The plaintiff has also claimed aggravated damages.  The order giving judgment to the plaintiff included general damages and aggravated damages, if any, to be assessed.  As to aggravated damages, Lord Esher MR in Praed v Graham [1890] 24QBD 53 CA, at 55, observed:

“The jury in assessing damages are entitled to look at the whole conduct of the defendant from the time the libel was published down to the time they gave their verdict.  They may consider what his conduct has been before action, after action and in court during the trial.”

It is therefore necessary to consider the conduct and circumstances of the parties peculiar to the circumstances of each case.

13. Reference was also made to McGreggor on Damages, paragraph 39-037.  It states as follows:

“The defendant’s conduct is relevant in this way to show whether he has acted with or without malice.  Generally, this is malice in the perpetrating of the libel, but conduct subsequent to this is relevant either as evidence of the existence or absence of malice at the time of the tort or merely as showing that the defendant has behaved well or behaved badly since the tort.  The practical effect is that the damage will fluctuate up or down with the degree of culpability of the defendant’s behaviour.”

It is plain to me on the evidence adduced, which remains wholly un-contradicted, that the defendant has behaved without justification.  He was belligerent and published a falsehood against the plaintiff, which was persisted in.  There was clearly no retraction of the libel.  There was no apology and his conduct in originally resisting this suit and then subsequently not adducing any evidence shows his lack of respect, not only towards his one time friend, co-director and colleague, but also to the court.  His attitude towards the court, of course, is immaterial when considering the impact of his injurious conduct upon the plaintiff’s reputation and feelings.

14. I find that the defendant has acted most capriciously.  The presence of an injunction in the other high court suit did not seem to have had much deterrence on him.  He remains convinced that the plaintiff had pilfered the very business that he has built up.  He clearly feels that he is a victim.  In conducting himself in the way that the plaintiff and Miss Louisa Yip has described of him, the defendant has plainly completely disregarded the impact of his behaviour towards the plaintiff and to the business of which he remains a shareholder, although his shareholding has now been reduced by force of circumstances.

Quantification

(a) Damages for Libel

15. As previously observed, no two cases are similar or identical.  The level of damages to be awarded would very much be fact sensitive.  I have highlighted the various matters which I consider to be pertinent in determining the impact of the defendant’s conduct upon the plaintiff and the business. 

16. Miss Iu made reference to the case of Yu Ming Investment Limited v Peng Ru Chuan, Richard, HCA 814 of 2004, 5 May 2005, unreported.  That was a case of a one-off derogatory remark made of the plaintiff by the defendant in the presence of the plaintiff’s client.  The claim was subsequently dismissed but the court went on to consider what damages might have been awarded had the claim been successful.  It was considered that a range of between $30,000 and $60,000 would be appropriate. 

17. Miss Iu submitted that damages for libel of about $30,000, or at least a sum at the lower end of the range suggested in that case may be appropriate.  I agree with that entirely.  For damages for libel I award the plaintiff damages in the amount of $30,000.    

18. As for aggravated damages, I believe that it would be wholly suitable in this case.  There was evidence of persistent conduct to wear down the plaintiff, as can be seen from the evidence particularly from the correspondence that has been brought to my attention during the course of the hearing last Friday.  Miss Iu read various letters to me.  They appear at bundle B, tab 9, onwards. 

19. The letter at tab 9, dated 26 June 2003 predates the sending of the offending SMS text message by the defendant to Louisa Yip.  It sets out in clear terms the tone and attitude adopted by the defendant.  This letter was addressed to Bill Meyers.  Another letter at tab 10 page 77, although undated seems to follow from the first letter I made reference to.  It was also addressed to Bill Meyers from the defendant.  There the defendant referred to himself as being stabbed in the back by the plaintiff and her new husband.  At page 78, tab 11, is a letter faxed to Louisa Yip, and that seems to be dated 16 September 2003.  The last sentence, prior to signing off, reads:

“[Louisa - don’t tell the cow this!  Hopefully she will sell some to a person who has silica fume concrete & get red face as a result.]” 

At page 79, tab 12, is a letter directly from the defendant to the plaintiff wherein he stated:

“It is a pity you have turned into such an objectionable person.  When I first started to work with you I had some admiration for you but I never expected you would turn against me the way you have.  I never did anything bad to you, in fact I taught you all you ever knew about the waterproofing business.” 

And then further down:

“Meyers told me you were trying to steal his business.  I told him you stole my business too, but I did not discuss what business you are doing because I don’t trust anybody, & I don’t want to get involved in this childish nonsense. 

I still don’t know why you are so hostile and objectionable to me.  I have never done anything bad to you.  You say I should not warn Louisa not to trust you.” 

Then at page 81, tab 13, is a letter preceding the text message complained of in this case and addressed to Dion, the plaintiff’s father.  It was in these terms:

“Welcome back to Hong Kong.  Sad not to be working with you.  I don’t know whether you heard the true story but your daughter & her husband treated me terribly.  When I returned from Europe they were sitting in the office with the police.  They told me they were getting rid of me because Cindy and Louisa were terrified of working with me & that’s why they brought the police in.” 

And then further on in the letter:

“I put a lot of personal money into the company which also still owes me hundred of thousands of dollars in unpaid expenses.” 

At tab 14 is a warning attributed to the defendant and published on the internet.  It warned that there were fraudulent companies trying to sell fake Evercrete products.  I understand that led to litigation in America and it no doubt caused further aggravation and anxiety to the plaintiff, as she said it did in her witness statement  One jumps ahead to page 126, tab 27, to a letter written by the defendant to the plaintiff before interlocutory judgment was given.  It reads:

“Dear Leonora,

Why are you being so vindictive towards me?  I have never done anything bad to you.  I just can’t understand why you are persistently attacking me.  You would not even be in this business but for my help. 

Also I have never spoken to anyone about Evercrete despite the letters you have circulated against me.  I am even hardly ever in Hong Kong these days.  After the way you & your husband treated me and removed me from the company I have lost any enthusiasm I ever had for waterproofing concrete & am involved in other aspects of construction these days. 

Please get off my back and leave me alone.  I am too old to handle all this unnecessary stress & have been in hospital twice this year suffering from heart attacks already.”

Finally, I refer to page 128, tab 28, a letter received following the entry of judgment.  The defendant wrote:

“I have absolutely no idea why your client has seen fit to persistently issue me with a series of writs.  I am mostly out of Hong Kong these days & have had nothing whatsoever to do with your client or her company.”

Four paragraphs down:

“I was both surprised and shocked that Mrs Boulter shook my hand before departing to have a holiday in America and then forced me out of the company on her return.  I wrote the whole episode off as an unfortunate lesson in business, & completely distanced myself both from the Boulters and Evercrete thereafter.”

And over the page at page 129, second paragraph from the top:

“I cannot understand any reason why your client should be persistently attacking me.  Initially I wondered whether she was perhaps suffering from the effects of post-natal depression, following the birth of her child & decided for some unknown reason to take it out on me.  In addition I considered it might have been a ploy in order to recover the shares I still hold in the company.  I held 23 % but I see the shares have been manipulated so my stockholding has been reduced to only just 4 %!”

And finally on page 130 in the same letter, the first complete paragraph at the top:

“Several of the waterproofing projects involved material supplied by your client have already failed, as your client must be well aware.  I have stepped away from any involvement in investigation work being carried out on these projects, because it could be construed that I have a conflict of interests, & also I just don’t want to be involved.”

20. In evidence the plaintiff specifically denied that the company’s products supplied in the course of business had ever failed.  It can therefore be seen that the defendant has not only not apologised for or retracted the falsehood that he has perpetrated and published against the plaintiff, but has remained unbent and determined to set out what he considered to be his case of being victimised by the plaintiff.

21. I consider that the plaintiff’s case for aggravated damages has amply been made out in the circumstances of this case.  Miss Iu submitted that an award of between $150,000 and $200,000 would be appropriate to vindicate the damage suffered by the plaintiff under this head of claim.  It is always difficult, if not impossible, to quantify damages in libel cases. 

22. I find that the plaintiff has suffered considerably as a result of the wrongful and persistent conduct of the defendant.  There has not been one iota of evidence of remorse on the part of the defendant.  In my considered view an award of $150,000 for aggravated damages would be appropriate and that is the amount that I order.

23. So total damages under both heads of claim would come to $180,000, that is $30,000 for damages for libel, and $150,000 for aggravated damages.  On this quantum will be interest at judgment rate from the date of the writ until full payment thereof.  The plaintiff shall also be entitled to the costs of the assessment against the defendant.