INDEPENDENT COMMENTATORS ASSOCIATION LTD v. JOINT PUBLISHING (HK) CO LTD AND ANOTHER

HCA 1438/2015

[2021] HKCFI 743

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1438 OF 2015

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J U D G M E N T

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I.  THE DISPUTE

1.  In February 2015, a book entitled《「佔中」透視》 (translated as “‘Occupy Central’ – A Perspective”) (“the Book”) which was written by the 2^nd Defendant, was published by the 1^st Defendant.  The Book consists of the author’s narrative of some factual background relating to the “Occupy Central” movement (“the Movement”) which took place in Hong Kong from September to December 2014 and also her views on, amongst others, the role of the press and the involvement of foreign organisations in the Movement.

2.  The Plaintiff claims that certain words contained in the Book (which are set out in §7 below) are defamatory of it.  In essence, those words constitute statements which, according to the Plaintiff’s case, contained allegations that the Plaintiff received funding from an organisation in the United States and also that the Plaintiff presented biased and selective reports of facts and comments favouring the protestors of the Movement.

3.  The Defendants’ case is that the Words are not defamatory of the Plaintiff.  Further, the Defendants rely on qualified privilege and public interest privilege (also known as the Reynolds privilege) for the purpose of defending this action.

II.  BACKGROUND

Parties

4.  On 17 January 2014, the Plaintiff (the Independent Commentators Association Limited) was incorporated under the then Companies Ordinance, Cap 32.  The Plaintiff was formed by and consists of members who are local current affairs commentators.

5.  The Plaintiff’s Memorandum of Association provides that one of its main objects is to “promote the development and well-being of current affairs commentators in Hong Kong, and to provide mutual support by forming an independent, non-politically affiliated, non-profit-making body of current affairs commentators as a platform for ideas exchange and to safeguard its cause”.  Such a stated object is not challenged by the Defendants.

6.  Lui Ping Kuen Bruce (“Lui”) is one of the Plaintiff’s founding members.  The other founding members are:-

(1)  CHING Cheong (程翔)

(2)  Joseph, WONG Wing-ping (王永平)

(3)  Allen, LEE Peng-fei (李鵬飛)

(4)  LEE Yee (李怡)

(5)  Johnny, LAU Yui-siu (劉銳紹)

(6)  SHUM Yee-lan (岑倚蘭)

(7)  POON Siu-to (潘小濤)

(8)  LI Wei-ling (李慧玲)

(9)  Allan, AU Ka-lun (區家麟)

(10)  Max, WONG Wai-lun (王慧麟)

(11)  LAM Man-chung (林文宗)

(12)  FONG Tak-ho (方德豪) and

(13)  CHOI Chi-yuk (蔡志郁)

The Book

7.  The Book’s first edition was published and printed in Hong Kong in February 2015.  The 1^st Defendant is the printer and publisher of the Book whereas the Book’s author is the 2^nd Defendant.  The Words giving rise to these proceedings can be found on pp 57, 111, and 112.  They provide the following:-

On p 57, which is in Chapter 1 (ie 第一章：傳媒，有無秉持公正、中立？) of Part 2 (ie 第二部分：「佔中」重災區(上) ) of the Book:

“4. 立場鮮明的記者都去了哪裡？

…

立場鮮明的記者不少都去了教書[1]

呂秉權是其中一個例子。

呂秉權…另一身份是由美國NED資助的獨立評論人協會的成員。獨立評論人協會跟另一組織『人權監察』近似，親泛民立場鮮明，『佔中』期間選擇性地報導事實，評論觀點偏幫『佔中』示威者。

… ”

The English translation of the above is as follows:-

“A number of reporters of clear-cut stance become teachers

Lui Ping Kuen is one among them.

Lui Ping Kuen’s another identity is the member of the Independent Commentators Association who received funding from NED of the United States of America. The Independent Commentators Association is like another association, the Human Rights Monitor in that they have a clear-cut stance of pro-pan-democrats and that during the Occupy Central Movement, they selectively reported the facts whilst their comments and viewpoints were partial towards the demonstrators in the Occupy Central Movement.

…”

On pp 111 and 112 which are in Chapter 1 (ie 第一章：定性外國策劃的「顏色革命」) of Part 4 (ie 第四部分：後「佔中」的重建):

“2. 人力、物力及金援的來源：CIA、NED與NDI

…

…中情局有『分店』，NED是其中之一。『以往中情局礙於政府機關的身份而要秘密進行的勾當，現在NED可明刀明槍地去做了』。NED，全名National Endowment for Democracy (國家民主基金會)，表面上是非牟利機構，由美國國會撥款資助…

而暗裏操作的金援另有渠道…由可資查找的資料顯示，受美國政府資助的『國家民主基金會』(NED) 自1995年起開始資助本港的反對派組織…”

The English translation of the above is as follows:-

“… the Central Intelligence Agency (CIA) has its ‘branches’ and NED is one among them. ‘In the past, the CIA carried out its shady business secretly because of its being a governmental institution, Now, such business can be publicly carried out by the NED. NED, the short form of the National Endowment for Democracy, is, on the face of it, a non-profit making organization, but in fact is funded by the Congress of the United States of America…

And there is another channel for the secret funding operation… From the searchable information, the USA government funded National Endowment for Democracy (NED) had since 1995 started to fund local opposition organizations …”

8.  For easy reference, the Words are reproduced in the Schedule attached to this Judgment.   

Aftermath of publication

9.  On 5 March 2015, the Plaintiff’s solicitors wrote a letter to the Defendants alleging that certain words which appeared on pp 57 and 111 of the Book were defamatory of the Plaintiff and asking that they apologise and also cease further publication of the relevant words.

10.  On 11 March 2015, the 1^st Defendant’s solicitors replied to the Plaintiff’s solicitors stating that the 1^st Defendant was looking into the matter and requesting that the Plaintiff withhold any further action.

11.  On or about 19 March 2015, the Plaintiff’s solicitors wrote to the 1^st Defendant’s solicitors stating that if no substantive and constructive reply was received on or before 26 March 2015, the Plaintiff would have no alternative but to take further actions against the Defendants without further notice.

12.  By a letter dated 26 March 2015 to the Plaintiff’s solicitors, the Defendants’ solicitors denied all of the allegations set out in the Plaintiff’s letter dated 5 March 2015.

III.  ISSUES

13.  In this action, the Plaintiff seeks, amongst others, damages (general, exemplary, and/or aggravated) for libel in the sum of HK$1 million and also an injunction restraining the Defendants from further publishing or causing to be published the Words or any words similar thereto.

14.  There is no dispute that the Words refer to the Plaintiff, and are statements of fact.  It is also not disputed that the Words were written by the 2^nd Defendant, and published by the 1^st Defendant.  The Defendants do not rely on the defence of justification.

15.  Accordingly, the issues for me to decide are:-

(1)  what is the ordinary and natural meaning of the Words, and whether they are defamatory to the Plaintiff;

(2)  whether the defence of traditional qualified privilege is available to the Defendants;

(3)  whether the Defendants can make out the Reynolds defence; and

(4)  if liability for defamation is established, what relief should be granted.

IV.  THE WORDS’ MEANING AND WHETHER THEY ARE DEFAMATORY

Positions of the parties

16.  According to the Plaintiff’s case, the Words’ natural and ordinary meaning is that:-

(1)  the Plaintiff has received funding from NED of the US, which is (a) a “branch” organisation of the CIA; and (b) funded by the US Congress; and

(2)  the Plaintiff has presented biased and selective reports of facts and comments favouring the Movement’s protestors.

17.  The Plaintiff has adduced evidence that it was set up to be an association of current affairs commentators who are independent, non-politically affiliated, and non-profit-making, such that a platform of collective force could be established to safeguard freedom of expression, allow ideas to be exchanged freely, and provide mutual support among like-minded commentators in Hong Kong.  One of the Plaintiff’s main objects stipulated in its Memorandum of Association has already been referred to above.

18.  The Plaintiff also complains that, by way of innuendo, the Words “would be understood by reasonable readers to mean that the Plaintiff is not truly independent but was operating and conducting its business and making reports and comments under the influence and/or control of ‘foreign forces’ (外部勢力) outside of Hong Kong.”

19.  On the Defendants’ case, the Words do not suggest that the Plaintiff has received NED’s funding, and in any event do not suggest that the Plaintiff is not politically independent as a result of receiving NED’s funding.  In short, the Defendants contend that no reasonable reader would connect the relevant passages on pages 57 and 111-112 of the Book or would understand the Words to have the meaning as alleged by the Plaintiff.  It is important to note, however, that the Defendants do not have any alternative argument to the effect that the Words are not defamatory of the Plaintiff even if they carry the meaning as alleged by the Plaintiff.  In other words, the Defendants appear to accept that if it is found that the Words may be understood by a reasonable reader to mean that the Plaintiff is not politically independent as a result of receiving NED’s funding, defamation will be established, subject to traditional qualified privilege and also the Reynolds defence.

General legal principles

20.  The principles for determining the meaning of allegedly defamatory words are summarised in Bawang International (Group) Holding Ltd and Another v Next Magazine Publishing Ltd (unrep, HCA 1109/2010, 23 May 2016) per Lok J at §§26-34.

21.  Regarding the nature of the inquiry:-

(1)  The single meaning rule applies.  This means the words complained of are deemed to bear only one natural and ordinary meaning, which is the meaning that the words would convey to the reasonable reader;

(2)  In determining meaning, words in a publication are normally construed according to their natural and ordinary meaning. This does not involve a technical process of construction or analysis.  The relevant inquiry is what meaning the words would convey to the mind of an ordinary, reasonable, fair-minded reader;

(3)  Regarding the question of how the meaning conveyed by the words to the mind of an ordinary, reasonable, fair-minded reader is determined, Jeynes v News Magazines Ltd [2008] EWCA Civ 130 provides the following guidance at §14:-

(a)  The governing principle is reasonableness.

(b)  The hypothetical reasonable reader is not naïve, but he is not unduly suspicious.  He 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 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.

(c)  Over-elaborate analysis is best avoided.

(d)  The intention of the publisher is irrelevant.

(4)  Further, in some circumstances, the defamation does not lie in the actual words used, but in an inferential or implied meaning that the words are capable of bearing without the need to have recourse to extrinsic facts.

22.  Regarding the scope of the relevant inquiry:-

(1)  The article must be read as a whole. A reasonable reader is assumed to have read the whole article complained of.

(2)  The context and circumstances of the publication must be taken into account.

(3)  In reading a publication in its entire context, the court will also bear in mind the general tenor of the entire publication.  The fact that the publication gives a generally uncomplimentary rendering of the plaintiff will obviously affect a reasonable reader’s understanding of the specific portions or statements in the publication.

Analysis

23.  The Plaintiff argues that, when the Words are read in light of the Book’s overarching purpose to purportedly “reveal” the Movement as a colour revolution orchestrated by the US Government, they must mean that the Plaintiff and its members had received funding from NED.  As a result, they were doing the foreign forces’ (such as NED) bidding rather than commenting on the Movement in an impartial and independent way.

24.  In response, the Defendants contend that the Words do not suggest that NED has funded the Plaintiff, nor do they suggest that the Plaintiff and its members are not independent as a result of receiving funding from NED.  However, the Defendants have not pleaded any contrary or alternative meaning of the Words.

25.  The Defendants contend that the Book does not provide any evidence suggesting that the Plaintiff had received funding from NED.  In relation to the Plaintiff’s allegation that its independence has been compromised as a result of it receiving funding from NED, the Defendants argue that:-

(1)  p 57 makes no reference to pp 111-112, where it is stated that NED funds local opposition organisations;

(2)  in the Book, the sentence stating that the Plaintiff is biased and selective in its reporting is separate from the one stating that the Plaintiff received NED funding;

(3)  people who are aware of the Plaintiff’s objective would take the view that the Plaintiff received the funds without being influenced by the source’s political agenda;

(4)  although the Book states on pp 111-112 that NED has an ulterior political agenda in funding certain organisations, it does not specifically refer to the Plaintiff as one of those organisations.

Would a hypothetical reasonable person read the Words on p 57 in conjunction with those on pp 111-112?

26.  In my judgment, the hypothetical reader would have read the Words on p 57 in conjunction with those on pp 111-112 for the following reasons.

27.  The Book (excluding its cover and index) has 5 parts and consists of only 169 pages in total.  As mentioned above, p 57 are in Part 2 whereas pp 111-112 are in Part 4.

28.  I accept the Plaintiff’s submission that the Words on pp 111 and 112 provide the necessary context to, and also correlate, with the Words on p 57 in the sense that p 57 refers to NED’s funding of the Plaintiff, and pp 111-112 discuss the reasons behind NED’s funding generally.  Although the Book does not address what NED is at or immediately after the shaded box on p 57, the next reference to NED in the Book (after p 57) appears on p 111. 

29.  The Defendants argue that the Words on p 57 do not make express reference to those on pp 111-112.  However, a reasonable reader is assumed to have read the whole book, particularly given that the Book in the present case is, by no means, voluminous.  Having read p 57 about the statement that the Plaintiff has been subsidised by NED, a reasonable reader would naturally be interested in finding out what NED is, which is then explained on pp 111-112.  Hence, there is a nexus between the relevant words on p 57 and those on pp 111-112.

What is the Meaning of the Words on p 57 and pp 111-112?

30.  As explained above, in determining the natural and ordinary meaning of defamatory words, the relevant publication must be read as a whole, and the general tenor of the publication must be taken into account: see §22 above.

31.  One of the topics canvassed in the Book is the 2^nd Defendant’s view that the Movement is a colour revolution orchestrated by the US Government: see pp 11-17, pp 110-123.  Such a tenor of the publication should be taken into account in considering how a reasonable reader would understand the meaning of the Words on p 57 and pp 111-112.

32.  It is plain from the words on p 57 that:-

(1)  the Plaintiff has received funding from NED of the US[2]; and

(2)  during the Movement, the Plaintiff selectively reported facts, and the Plaintiff’s reporting perspective is biased in favour of the Movement’s protestors.[3]

33.  Further, according to pp 111-112 of the Book:-

(1)  NED is one of the CIA’s “branches”.  It is prima facie a non-profit organisation funded by the US Government[4];

(2)  it is discernible from searchable information that the US Government funded NED had since 1995 started to fund local opposition organisations[5].

34.  As mentioned above, the Defendants have not suggested any alternative meaning of the Words.  The Defendants’ defence in this regard is simply that the Words (1) do not mean NED has funded the Plaintiff; and (2) do not mean the Plaintiff and its members are not independent as a result of receiving funding from NED.

35.  It is, however, quite clear to me that the Words mean that NED (which is purportedly funded by the US Government) started funding local opposition organisations in 1995 (pp 111-112), and has funded the Plaintiff (p 57). Additionally, it is also clear from the Words that during the Movement, the Plaintiff selectively reported facts and had a reporting perspective that is biased in favour of the Movement’s protestors (p 57).

36.  While the Book does not expressly allege that there is a causal link between the Plaintiff being funded by NED and the Plaintiff’s manner of reporting on the Movement, a reasonable reader would be able to draw the necessary inference from the Words and also the pervasive theme of the Book that the Movement is a colour revolution orchestrated by the US Government: see §31 above.

37.  The Defendants also refer to the following passages in the Book which are said to have neutralised the meaning of the Words. 

(1)  there are passages on p 110 stating that it is usually difficult to investigate which countries are intervening in local politics[6]; and

(2)  there is exhibited on p 113 a table from a local newspaper showing organisations that received funds from NED’s agent National Democratic Institute for International Affairs (“NDI”), and p 115 provides specific examples of local organisations in charge of executing the colour revolution on the US Government’s behalf (“Affiliated Organisations”). Neither passage refers to the Plaintiff.

38.  While the meaning of words can in principle be neutralised by words found elsewhere in the same publication: see Chalmers v Payne (1835) 150 ER 67 and Charleston v News Group Newspaper Ltd [1995] 2 AC 65, I do not think that the passages referred to by the Defendants have such an effect.

39.  First, the Words on p 57 state that the Plaintiff has received funding from NED in rather unequivocal terms. It would take at least an equally definitive disavowal of those words to negate the stated meaning.  However, the passages that the Defendants rely upon do not seem to have such an effect.

40.  Secondly, the passages on p 110 regarding the difficulty in investigating which countries are intervening in local politics should be read in context.  In fact, the sentences that immediately follow therefrom state that even though it is usually difficult to carry out such investigations, circumstances changed after 2013, when the Movement was bubbling beneath the surface.  Those sentences also state that many previously hidden “puppet masters” came to the fore, making it much easier to find out which countries are intervening in local politics[7].  Hence, those sentences cannot help neutralise the meaning of the Words.

41.  Thirdly, neither the passage on p 113 nor the one on p 115 purports to exhaustively list all Hong Kong organisations receiving funding from NED.  As such, the Plaintiff’s absence in those passages does not neutralise the Words’ meaning on p 57 that the Plaintiff was funded by NED.

42.  On the meaning of the Words that the Plaintiff and its members are not independent as a result of receiving funding from NED, the Defendants offer two arguments.   First, an organisation like the Plaintiff could on the one hand receive funding from the US Government but it could, on the other hand, still maintain its independence.  A reasonable reader would appreciate as much, given the Plaintiff’s expressly proclaimed political independence.   Secondly, the Book does not mention the Plaintiff when discussing the US’ Government’s “grand scheme” to intervene in local politics by supporting the Movement.

43.  For reasons I have already set out in §§30-41 above, I reject both arguments of the Defendants.

Are the Words defamatory?

44.  A defamatory importation is one to the plaintiff’s discredit, or which tends to lower him in the estimation of others, or causes him to be shunned or avoided, or exposes him to hatred or ridicule: Gatley on Libel and Slander, 12^th Ed, at §2.1.

45.  As stated above, the Defendants’ argument on the meaning of the Words is simply that the Words do not suggest that NED has funded the Plaintiff, nor do they suggest that the Plaintiff and its members are not independent as a result of receiving funding from NED.  However, such arguments have already been rejected in view of the discussion above.  The Defendants have not pleaded any contrary or alternative meaning of the Words.  Neither have they contended that the Words are not defamatory of the Plaintiff even if they carry the meaning alleged by the Plaintiff.

46.  In view of my ruling on the meaning of the Words, I find that the Words are defamatory because they tend to lower the Plaintiff in the sense that the readers of the Book would have the perception, as a result of the publication of the Words, that the Plaintiff’s independence has been compromised by its receipt of the funding from NED.  There would therefore be doubts as to whether the Plaintiff’s core value could be upheld. In the present case, as mentioned above, it is unnecessary for me to examine and rule on whether the Plaintiff is truly as independent as it claims to be because this issue is not challenged by the Defendants who do not rely on any plea of justification.

V.    DEFENCES

47.  The Defendants have pleaded two defences: traditional qualified privilege and the Reynolds defence of public interest. I will address them in turn.

Qualified Privilege

48.  The availability of the qualified privilege defence depends on whether there exists reciprocity of duty and interest, ie, whether the person making the communication has an interest or a duty, legal, social, or moral, to make it to the person to whom it is made, and the person to whom it is made has a corresponding interest or duty to receive it: see Yaqoob v Asia Times Online Ltd [2008] 4 HKLRD 911 per Reyes J at §23.

49.  Given this requirement of reciprocity, this defence typically covers publications made “to one person only or to a limited group of people”: see Reynolds v Times Newspapers Ltd [2001] 2 AC 127 on p 195E, and private communications “commonly arising out of the necessities of some existing relationship between the maker of the statement and the recipient”: see Gatley at §14.1.

50.  In this regard, the Defendants plead that they had an interest in advancing sociological and/or political study of the movement, and the target readership had a corresponding interest in advancing sociological and/or political study of the Movement.

51.  In the decision of the House of Lords in Horrocks v Lowe [1975] AC 135, Lord Diplock explained the reciprocity requirement as follows:-

“The public interest that the law should provide an effective means whereby a man can vindicate his reputation against calumny has nevertheless to be accommodated to the competing public interest in permitting men to communicate frankly and freely with one another about matters in respect of which the law recognises that they have a duty to perform or an interest to protect in doing so.

… in all cases of qualified privilege there is some special reason of public policy why the law accords immunity from suit—the existence of some public or private duty, whether legal or moral, on the part of the maker of the defamatory statement which justifies his communicating it or of some interest of his own which he is entitled to protect by doing so.”

52.  Having an interest in making and receiving communication does not mean being curious or having enthusiasm about the subject matter of that communication. Rather, it means having a personal stake that one can protect in making and receiving that communication.

53.  This position is supported by another House of Lords’ decision the Defendants brought to my attention, namely, London Association for Protection of Trade v Greenlands Limited [1916] 2 AC 15 – where Lord Atkinson distinguished interest in the sense described above from mere curiosity:-

“It was decided as long ago… that if one person makes an inquiry of another touching the position or character of a third, and the person inquired of makes a reply which he bona fide believes to be true, and also bona fide believes that the inquirer desires the information, not merely to gratify idle curiosity, but for some purpose in which he, the inquirer, has a legitimate interest of his own, the occasion upon which the answer is communicated to him is a privileged occasion.” (emphasis added)

54.  In view of the above, I cannot accept that the Defendants’ pleaded interests are sufficient for attracting qualified privilege.  They do not disclose any personal stake that the Defendants have in making the communication, or that their readership has in receiving the communication.  The element of reciprocity is not satisfied in the present case.

55.  The Defendants have referred me to Webb v times Publishing Co Ltd [1960] 2 QB 535 and Vassiliev v Frank Cass & Co [2003] EMLR 33.  However, in Webb, an English newspaper published a report of a trial of a British subject in a Swiss court in relation to serious criminal offences charged against him in Switzerland.  The House of Lords held that the subject-matter of the publication was closely connected with the administration of justice in England, which justified the interest that the defendant had in publishing the report.  Vassiliev concerned a specialist journal on historical and contemporary intelligence issues, with only about 146 subscribers in the UK and the journal could not be purchased through retail outlets.  It was held that since it was a specialist publication with a specialist readership and the article in question was likely in practice to have been read only by those with a particular interest in the subject matter, the publication was protected by common interest privilege.  These two cases are clearly distinguishable from the present situation.

56.  I take the view that the defence of qualified privilege is not available to the Defendants.  In the circumstances, it is unnecessary for me to consider the issue of malice.

Reynolds

57.  To rely on the Reynolds defence, the Defendants must establish all of the following:-

(1)  the general subject matter of the publication is of general interest;

(2)  the inclusion of the defamatory statement is justifiable; and

(3)  the steps taken to gather and publish the information must have been responsible and fair (“the Responsible Journalism Requirement”).

See Jameel (Mohammed) v Wall Street Journal Europe SPRL [2007] 1 AC 359 per Lord Hoffmann at §§48-58.[8]

58.  The parties’ disagreement focuses on the Responsible Journalism Requirement which turns on whether the Defendants have taken reasonable steps to verify the relevant material, the reliability of their source of information and also whether the Defendants provided the Plaintiff with an opportunity to present its side of the story: see Gatley at §§15.11, 15.12.

59.  In my judgment, the Defendants have not satisfied the Responsible Journalism Requirement for the following reasons.

60.  The Defendants’ case is that they relied on four sources of information and that they are reliable.

61.  First, the Defendants rely on the fact that in or around early November 2014, a photograph of Lui was circulated widely on the internet. The photograph bears a caption stating that he is a member of the Plaintiff, and has received funding from NED of the United States.

62.  However, during cross-examination, the 2^nd Defendant admitted that she did not know who wrote the caption, who attached the caption to the photo, who uploaded the photo and/or the caption, or even when the photo and caption were first uploaded.  All the 2^nd Defendant was able to say was that the photo was widely circulated during the Movement, and she suspected that she downloaded the photo from the online news outlet 港人港地.  Given the 2^nd Defendant’s limited knowledge about the photo and the caption, such a source of information can hardly be said to be reliable.

63.  Another source of information that the Defendants seek to rely on is an article entitled “美國佬亡我之心不死，又如何？” published by Allan Au Ka-lun[9] (“Au”) on or about 22 October 2014.  The article sought to question, in a sarcastic manner, the then sentiment that the Movement was funded by foreign powers and also expressed the author’s view that local political instability was caused by internal issues, as opposed to foreign influence.

64.  Au’s evidence is that he, at the time of the publication of his article, had not heard of any allegation regarding the alleged connections between the Plaintiff and NED.  Neither had he ever seen the photo and the caption as referred to in §61 above.  In the circumstances, Au’s article can in no way be regarded as any reliable source of information in support of the Words.

65.  The third “source” is that one of the Plaintiff’s founding members, Mr Willy Lam (“Lam”), is a senior fellow of the Jamestown Foundation, and that the Jamestown Foundation was previously funded by NED.  The evidence shows that Lam is not a member of Jamestown Foundation and his role is merely honorary. 

66.  In any event, I cannot see how Lam’s role in this regard could have formed any basis upon which the Words may be published.  It is difficult to see how the fact that the Jamestown Foundation had previously received funding from NED suggests that the Plaintiff currently receives funding from NED.  I cannot see how Lam’s participation in both organisations affects this.

67.  The fourth “source” is that there are common members between the Plaintiff and the Hong Kong Journalists Association (“HKJA”), which was an affiliated member of the International Federation of Journalists, which was allegedly funded by NED.  As explained by Yeung Kin Hing Chris, the Chairperson of HKJA’s Executive Committee of 2017-2018, HKJA and the Plaintiff are two separate and distinct organisations.  In the circumstances, I cannot see how any funding received by HKJA could help justify the statement that the Plaintiff has received funding from NED.

68.  In addition, it is clear from the evidence adduced by both Defendants that they have failed to take any reasonable steps to verify the Words.  The oral testimony of Mr Lee Ka Kui Elvin, the 1^st Defendant’s witness, does not assist the Defendants’ case given the following answers he gave under cross-examination on this issue, which seem self-contradictory:-

(1)  there was no need to verify the Words’ truthfulness because the Words were not considered defamatory of the Plaintiff;

(2)  the 1^st Defendant trusted the 2^nd Defendant, and so the 1^st Defendant did not take its own steps to verify the Words’ truthfulness;

(3)  the 1^st Defendant did not take steps to verify the Words’ truthfulness due to budgetary constraints, resource limitations, and other reasons; and

(4)  the 1^st Defendant did verify the sources; however, he could not identify which staff of the 1^st Defendant had conducted the verification, and what had actually been done.

69.  The 2^nd Defendant also provided conflicting answers on the issue.  On the one hand, she stated during cross-examination that she lacked resources and time to carry out verification. On the other, she stated that she did not need to verify the Words because she did not consider them defamatory to the Plaintiff.

70.  Additionally, the 2^nd Defendant also admitted in cross-examination that no attempt was made to contact the Plaintiff on the issue of funding.  The Defendants argue that it is not common practice in the book publishing industry to reach out to subjects for comment, but this is neither here nor there.  The fact remains that the 2^nd Defendant (and the 1^st Defendant, for that matter) could have easily reached out to the Plaintiff to verify the Words, but have failed to do so.

71.  By reason of the above analysis, I conclude that the Reynolds defence cannot be established.

VI.  QUANTUM

72.  The Plaintiff seeks general, exemplary, and aggravated damages from the Defendants.

Aggravated damages

73.  The Plaintiff, as a corporate entity, is not entitled to aggravated damages. Aggravated damages are granted to compensate additional injury caused to a plaintiff’s feelings by the defendant’s conduct of the action. Since a company is incapable of feeling injured, it is not entitled to aggravated damages: see Oriental Daily Publisher Ltd v Ming Pao Holdings Ltd (2012) 15 HKCFAR 299 per Ribeiro PJ at §§112-125.

Exemplary damages

74.  The court should only grant exemplary damages if it is satisfied that the defendant has been oppressive or has deliberately committed (or was reckless as to whether he was committing) a tort with the intention of gaining material advantages from the publication which would outweigh the prospects of material loss that he might have to pay by way of compensation: see Bawang per Lok J at §724.

75.  Moreover, the fact that a defendant is engaged in a potentially profit-making activity, such as publishing a book, does not per se justify an award of exemplary damages. Something more specific is required.

76.  In my judgment, the Plaintiff has failed to satisfy the requirement referred to in §74 hereinabove.  In particular, the Plaintiff has neither pleaded nor argued the existence of any material advantage sought to be gained by the Defendants through defaming the Plaintiff.  Further, whilst I take the view that the Defendants have failed to take reasonable steps to verify the Words, the materials placed before me are not sufficient for the purpose of showing that the Defendants’ act was either deliberate or reckless.

General damages

77.  General damages are often said to be “at large” in the sense that their assessment cannot be done by reference to any mechanical, arithmetical or objective formula[10], and is to some extent an impressionistic exercise.  General damages, the purpose of which is to compensate the plaintiff for the effects of the defamatory statement, normally serve three functions:-

(1)  to console the plaintiff for hurt and distress suffered;

(2)  to repair the harm that has been done to the plaintiff’s reputation; and

(3)  to vindicate the plaintiff’s reputation.

See Bawang at §703.

78.  Obviously, the assessment of general damages turns on the individual circumstances of each case.  However, the relevant factors which should be considered include the conduct of the claimant, his credibility, his position and standing, and the subjective impact that the libel has had on him, the nature of the libel, its gravity and the mode and extent of its publication, the absence or refusal of any retraction or apology, and the conduct of the defendant from the time when the libel was published down to the verdict: see Bawang at §708, citing Gatley at §9.5 and John v MGN Ltd [1997] QB 586 at 607.  It should be pointed out that in the present case, up till 24 November 2017, about 1,080 copies of the Book were sold whereas about 3,000 copies had been published.  

79.  If the defamatory statements have caused injury to the goodwill and reputation of a trading company with an active business, the court is entitled to take into account the company’s scale of business in assessing general damages: see Bawang §720.

80.  Counsel for the Plaintiff has suggested that having regard to all the circumstances of the case the appropriate award of general damages is HK$1 million, relying on, amongst other authorities, Bawang, where HK$2 million and HK$1 million were awarded as general damages to the 1^st and 2^nd claimants respectively.  However, the nature of the defamation, the level of dissemination of the information, the plaintiffs’ businesses and their scale are all very different from those in the present case. 

81.  Hence, the awards of general damages granted in Bawang cannot assist the Plaintiff’s case on how general damages should be assessed here. 

82.  A corporate plaintiff is not compensated for hurt feelings because it cannot be “injured in its feelings”, only “in its pocket”.  Such injury “in its pocket” can ordinarily include both the loss of income and any injury to the goodwill of a company. However, in the case of a non-trading organisation or company with no active business, there is unlikely to be any compensation for the loss of income or business. In these circumstances, the compensation will be based on injury to its goodwill, even though the loss of reputation or goodwill to a non-trading organisation or company can be a rather abstract concept and the sum awarded may therefore be somewhat arbitrary.

83.  In a defamation claim by a corporate plaintiff, in the absence of proof of actual special damages, the award of general damages recoverable normally would not be substantial (see Yaqoob v Asia Times Online Ltd [2008] 4 HKLRD 911 at §§159-160).  In fact, in Yaqoob where the defamatory statements contained serious allegations that the plaintiffs were money laundering, terrorist financing and drug trafficking, the court awarded a sum of HK$1 million to the individual plaintiff but only a sum of HK$150,000 to the corporate plaintiff as general damages.  I also take note of the fact that in Yaqoob, the defamatory statements published were subsequently removed.

84.  In The Incorporated Owners of Tung Lo Court v Tsui Wai Yip, CACV 27/2015, 3 August 2015, the Court of Appeal allowed the appeal of the defendant and reduced the general damages awarded from HK$400,000 to HK$200,000 In that case, the defendant had accused the claimant (the Incorporated Owners of a building) of, inter alia, behaving like a triad society.  The Court of Appeal found (at §61 of the judgment) the defendant’s allegation to be serious and also “a wholly inexcusable attempt to undermine the plaintiff’s integrity”.  In such circumstances, the Court of Appeal took the view that an award of general damages in the sum of HK$200,000 was appropriate.  It is worth noting that, in Tsui’s case, the defamatory statements were published amongst the owners of the building but not beyond.

85.  In this day and age, some professional bodies and other institutions (particularly those which have the practice of expressing their views in public) are eager to claim or declare that they are independent, free from any political affiliation or attachment.  One can hardly find any parameters to properly assess such purported “political independence”.   Whether one considers a statement or report well-balanced or impartial always boils down to a matter of perception which inevitably involves subjective feeling and value judgment.  Different people may have their own perceptions and ethos on the meaning of “political independence”, given the differences in their background, culture, education, social values and attitudes.  Realistically, the question of whether a professional body is politically independent depends more what it actually says and does (rather than claims unilaterally made by that body or other people).  The same considerations should apply to the Plaintiff in the present case. 

86.  Upon considering all the relevant factors as mentioned above, I am of the view that a sum of HK$250,000 is an appropriate sum to be paid by the Defendants to the Plaintiff as general damages for the publication of the Words which have been found to be defamatory.

VII.  INJUNCTIVE RELIEF

87.  In addition to damages, the Plaintiff also applies for an injunction restraining the Defendants from, whether by themselves or otherwise, further publishing or causing to be published the Words or any words similar to the Words.   In view of the above ruling on the meaning of the Words, I see no reason why an injunction should not be granted to prevent further publication of the Words.  However, in order to ensure that the terms of the order for this injunctive relief are clear and its scope certain, and to avoid unnecessary argument or confusion, the phrase “similar to the Words” (as suggested by the Plaintiff) should be removed.  In any event, it is not appropriate for the Court to grant a blanket injunction without knowing the actual words published or to be published.

VIII.  COSTS

88.  In view of the above rulings, there is no reason why costs should not follow the event.  However, as the Plaintiff has only succeeded in obtaining damages of HK$250,000, I have to consider what the appropriate scale for taxation of costs should be.

89.  When a claim falls within the District Court’s jurisdiction, a plaintiff should provide good reasons that explain why it has chosen to pursue the more costly avenue of commencing an action in the Court of First Instance.  If no such good reasons are provided, the plaintiff’s costs may well be taxed on the District Court scale.

90.  The Plaintiff’s claim for general damages is for HK$1 million only.  Although this action had commenced before the District Court’s jurisdiction was increased from HK$1 million to HK$3 million, the Plaintiff’s claim was still within the then District Court’s jurisdiction.  As discussed above, the Plaintiff is not entitled to aggravated damages.  Further, the Plaintiff has failed to plead any matters in support of its claim for exemplary damages.  Hence, there are reasons to believe that the Plaintiff, at the time when this action was commenced, should have reasonably contemplated that it would very likely end up having an award of damages less than HK$1 million.

91.  Further, the fact that the Plaintiff has a right to apply for a jury trial in the Court of First Instance is irrelevant in this case. This is because the Plaintiff has never applied for a jury trial, but instead sought a trial by a bilingual judge.

92.  As such, I cannot see any good reason why this case could not have been properly litigated in the District Court.  Accordingly, I rule that the Plaintiff should only be entitled to costs on the District Court scale.  Further, without any disrespect whatsoever to counsel, I find that a certificate for one counsel is appropriate in the present case, in view of the issues involved and also the amount of damages that the Plaintiff is finally entitled to obtain.

IX.  ORDER

93.  Based on the matters aforesaid, I make an order that (1) the Defendants shall pay the Plaintiff a sum of HK$250,000 as general damages; and that (2) the 1^st and 2^nd Defendants shall be restrained from, whether by themselves or otherwise, further publishing or causing to be published the Words set out in the Schedule to this Judgment.  Furthermore, I make an order nisi that the Defendants shall pay costs of this action, with certificate for one counsel, to be taxed on the District Court scale, if not agreed.  The order nisi shall become absolute unless an application is made to vary the same within 14 days from the date of this Judgment.

94.  Finally, in view of Law Chi Ching v Apple Daily Limited & Ors, [2015] 5 HKLRD 448, §13, I tend to think that no pre-judgment interest on general damages shall be awarded.  However, given the fact that I have not heard submissions on interest, if there is any application in this regard, it shall also be made within 14 days from the date of this Judgment.

SCHEDULE

“立場鮮明的記者不少都去了教書

呂秉權是其中一個例子。

呂秉權……另一身份是由美國NED資助的獨立評論人協會的成員。獨立評論人協會跟另一組織『人權監察』近似，親泛民立場鮮明，『佔中』期間選擇性地報導事實，評論觀點偏幫『佔中』示威者。” (page 57)

“……中情局有『分店』，NED是其中之一。『以往中情局礙於政府機關的身份而要秘密進行的勾當，現在NED可明刀明槍地去做了』。NED，全名National Endowment for Democracy (國家民主基金會)，表面上是非牟利機構，由美國國會撥款資助……

而暗裏操作的金援另有渠道……由可資查找的資料顯示，受美國政府資助的『國家民主基金會』(NED) 自1995年起開始資助本港的反對派組織…… ” (pages 111-112)