宓敬田 v. 廖耀強及另一人

HCA 1103/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1103 OF 2017

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DECISION

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Introduction

1.  This defamation action commenced by Mr Mi against Mr Liu and China Shanshui Cement Group Limited (“the Company”) concerns two public announcements separately published on two different dates in April 2017. By summons dated 11 May 2017 (“the Summons”), Mr Mi applies for an interlocutory injunction to enjoin Mr Liu and the Company from further publishing similar defamatory statements about him. The Summons is supported by a draft affirmation of Mr Mi (“the draft Affirmation”).

2.  Mr Liu and the Company managed to file three short affidavits/affirmations in opposition on the day before the return day of the Summons. At the hearing, this court gave directions for the filing of evidence for the purpose of the substantive hearing of the Summons fixed on 25 July 2017. Mr Liu and the Company have been given leave to adduce further evidence in opposition and Mr Mi has the right to reply thereto.

3.  Mr Yan SC leading Mr Ho applies for an interim injunction pending the determination of the Summons. Mr Fung SC, together with Mr Ng and Mr Tai, opposes this application.

4.  I first outline the essential background facts. The Company was incorporated in the Cayman Islands and its shares are listed on the main board of the Stock Exchange of Hong Kong Limited under the Stock Code 691.

5.  Mr Liu is a director of Ernest & Young Transactions Limited (“E & Y”). In an action commenced by its employees, the court appointed Mr Liu, David Yen and Koo Chi Sum of E & Y (collectively “the Receivers”) as receivers over the 456,325 shares of China Shanshui Investment Company Limited, one of the majority shareholders of the Company. Mr Liu became the chairman of the Board and an executive director of the Company.

6.  Shandong Shanshui Cement Group Company Limited (“Shandong Shanshui”) is a wholly-owned subsidiary of the Company and it is a mainland Chinese entity. Shandong Shanshui owns and operates various cement plants and factories in Shandong Province and Northeast China.

7.  Mr Mi has held some positions in Shandong Shanshui at the senior management level.

8.  The two announcements relate to an incident (“the Incident”) taking place at the headquarters of Shandong Shanshui at Shanshui Industrial Park, Jinan, Shandong Province, PRC (“the Premises”) on 8 April 2017.

9.  In the wake of the Incident, Mr Liu as Chairman of the Board of Directors of the Company issued the first announcement dated 10 April 2017 (“the 1^st Announcement”) and the second announcement dated 27 April 2017 (“the 2^nd Announcement”) purportedly pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance, Cap. 571 (“the Provision”).

10.  Both the 1^st and the 2^nd Announcements related to the Incident and were entitled “Update on the Actions With Regards To Mi Jingtian And His Associates”.

11.  By the 1^st Announcement, the Company informed its shareholder and the public that Mr Mi, the former deputy general manager of Shandong Shanshui, and his associates illegally occupied the Premises and on 8 April 2017, the directors of the Company took action to repossess the Premises. It was alleged that Mr Mi and his associates committed crimes during their repossession action.

12.  First, it was alleged that during the Incident, the directors (without stating their names) were held against their will in the open courtyard of the Premises by a group of people commanded and organized by Mr Mi and his associates for over two hours. They managed to leave only with the assistance of the Jinan Police. Several directors however were inflicted bodily harm by those unidentified associates commanded and manipulated by Mr Mi. They were attacked by the use of “banned/control weapons” such as pepper spray, smoke bombs and high pressured water guns by Mr Mi’s associates.

13.  As at the date of the 1^st Announcement, there were three executive directors, namely, Mr Liu with David Yen as his alternate, Mr Li Heping and Mr Godwin Hwa, one non-executive director Mr Chong and five independent non-executive directors.  

14.  By the 2^nd Announcement the Company updated the shareholders of the Company and the public on the Incident, particularly the action taken by the Jinan Police and the Jinan City government. It further made responsive statements and gave further information about the Incident in response to a news article entitled “Jinan Police dealt with the Conflict occurred at Shandong Shanshui Cement Group headquarters according to law” dated 14 April 2017 (“the Article”).  It gave more details about the Incident.

15.  Mr Mi takes grave exception to the allegations in the Announcements. He has a different story to tell about the Incident.

16.  The parties are agreeable to the general principles governing applications for interim/interlocutory injunctions in defamation cases. To ensure free speech, the test is different and the American Cynamid principles are not applicable. In defamation cases, the applicant has to show that:

(1) the statement is unarguably defamatory;

(2) there are no grounds for concluding the statement may be true;

(3) there is no other defence which might succeed; and

(4) there is evidence of an intention to repeat or publish the defamatory statement by the defendant.

(see Chan Shui Shing Andrew & Ors v Ironwing Holdings Ltd [2001] 2 HKC 376 at p.378 H-I per SHCJ Poon (as he then was)).

17.  Mr Fung accepts that the allegations in the Announcements are unarguably defamatory and indicates that Mr Liu and the Company may feel obliged to publish similar statements when the occasion arises. Hence, the focus of the debate is on the second and the third requirements.

18.  The defence thus far advanced includes justification and qualified privilege. Mr Yan submits that the allegations in the Announcements are blatantly false that there can be no defence to Mr Mi’s claim. Even if the Announcements were published on occasions of privilege, which he does not accept, Mr Liu and the Company cannot have an honest belief in the allegations by reason of their glaring falsity and hence the defence must be vitiated by malice.

19.  For the defence of justification, the following extract from Gatley on Libel and Slander (12^th ed.) at §25.6 is apposite:

“For the moment, therefore, the proposition that a claimant cannot obtain an interim injunction to restrain the publication of defamatory words in the face of a statement from the defendant, verified as true, that he can and will justify the alleged libel, can be regarded as an invariable rule, unless it is plain that the plea of justification is bound to fail.”

20.  Mr Yan accepts this threshold and manfully makes a forceful submission with reference to the video footage comprising nine MP4 video files, the Article, the Company’s announcement and the affirmation evidence of the defence.

21.  The video footage was shown in court at the hearing and both Mr Yan and Mr Fung make submission on the same. Mr Yan highlights to this court the apparent falsity in the allegations as shown in the footage. I can accept that I can form a preliminary view that what was depicted in the footage differs materially from the accounts set out in the 1^st and the 2^nd Announcements.

22.  I also find some force in his submission that the footage shows a quite different story from the accounts in their own announcement and their affirmation evidence.

23.  Next, Mr Yan turns to the Article. Again there are material differences apparently and it is remarkable that according to the Jinan Police, those being detained by the Jinan Police were actually from the defence side. 

24.  However, despite Mr Yan’s able submission, I cannot accept at this stage that the defence of justification and/or qualified privilege are bound to fail.

25.  I agree that the footage presently available to this court raises a lot of questions about the truthfulness of the Announcements. I nevertheless cannot lose sight of the fact that the defence has yet to comment on the footage in their affirmation evidence and more importantly, the footage only lasts about fifteen minutes in total. The Incident lasted for hours. The footage can hardly be said to provide a full picture of the Incident and be able to completely negate all the allegations at this stage. 

26.  Mr Yan indicates that Mr Mi would try to find the complete video-recording of the Incident and would make it available to the defence for their preparation of evidence in opposition. It seems to me that there should be a much longer version since the footage is only composed of some of the video-recordings captured by the security CCTV in the Premises. I cannot and should not make any factual conclusions based on the footage alone.

27.  Indeed, before Mr Liu and the Company have furnished all their evidence in opposition, in my view, it is inappropriate for me to render a detailed analysis of the evidence currently available and assess the strength of the plea of justification. I am unable to conclude that it is bound to fail.

28.  The same applies to the defence of qualified privilege. Even assuming that the allegations in the Announcements are false, it is at least arguable that they were published on privileged occasions to fulfill the statutory duty of the Company pursuant to the Provision.

29.  Malice should not be lightly found though I am unable to agree with Mr Fung that cross-examination is indispensable. In the present case, I certainly cannot find malice without first affording Mr Liu and the Company a chance to make full explanations particularly in light of the footage.

29.  In the premises, I cannot accede to the application of Mr Mi for an interim injunction. It is dismissed with costs to the defence with certificate for two counsel, to be taxed if not agreed. This costs order is made on a nisi basis.

30.  After the hearing, pursuant to the undertaking given through his leading counsel, Mr Mi filed a signed affirmation with minor differences from the draft Affirmation. The defence complained by way of a letter and Mr Mi came back with a long explanation contained in a reply letter. I see little substance in the complaint and I regret unnecessary costs have been incurred. Adequate professional communications between the legal representatives of the parties could have avoided misunderstandings and are conducive to effective dispute resolution.

31.  Lastly, I thank counsel on both sides for their helpful submissions.