CHAN IU SENG v. KO CHOI HIN AND OTHERS

HCA2901 & 2935/2004

(Tried together)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2901 OF 2004

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(Tried Together pursuant to Order of Master de Souza dated 6 February 2006)

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J U D G M E N T

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1.  These libel actions are commenced by two different plaintiffs against the same defendants in respect of an undated circular letter (“the Circular”) sent or circulated to members of the Hong Kong Chung Shan Lung Chan Clan Association (香港中山隆鎮同鄉會) (“the Association”) in about November 2004.  On 6 February 2006, Master de Souza ordered the two actions to be tried together.  Due to his poor health, the trial between the plaintiffs and the 3^rd defendant was by consent adjourned sine die.  The present trial therefore only concerns the 1^st, 2^nd, 4^th to 8^th defendants.  The central issue in the trial is whether the defendants had taken part in the publication of the Circular.

The Association

2.  The Association is a company incorporated in Hong Kong in 1968 and limited by guarantee.  It was established for the objects of, inter alia, fostering the fraternity and unity of the clansman of Chung Shan (中山) who are in Hong Kong and overseas, and of engaging in charitable undertakings.  At the relevant time in November 2004, there were about 6,000 members in the Association. Its board of directors consisted of 60 directors elected by its members.

The parties

3.  The two plaintiffs and the defendants are all members of the Association. 

4.  Mr Chan Iu Sing, the plaintiff in HCA2901/2004 (“Mr Chan”), was at all material times and is still the Honorary Chairman of the Association.

5.  Between 2003 and 2004, the 23^rd Board of Directors (“23^rd Board”) was in office.  Mr Fong Yock Yee (方若愚) (“Chairman Fong”) was the chairman of the 23^rd Board.  Mr Lam Kit Sing, the plaintiff in HCA2935/2004 (“Mr Lam”), and the 6^th defendant were the vice-chairmen.  The other directors included the 2^nd to 4^th, 7^th and 8^th defendants. 

6.  By the order of Barma J made on 15 October 2004 (“Barma J’s Order”), to which I shall deal with in details below, Mr Darach E Haughey and Mr Derek K Y Lai (“the Receivers”) of Messrs Deloitte Touche Tohmatsu (“Deloitte”) were appointed interim receivers of the Association to convene an annual general meeting of the Association and to conduct the election of the 24^th Board of Directors (“24^th Board”).

7.  Both plaintiffs and all the defendants as well as Chairman Fong were nominated to be the candidates for the 24^th Board.  In the end, the two plaintiffs were elected, but not the defendants.   Mr Lam further became the chairman of the 24^th Board.

The litigations preceding Barma J’s Order

8.  Before looking at the Circular and the dispute between the parties, it is necessary to refer to a number of events and litigations involving the Association, Chairman Fong and the parties herein that took place in 2003 and 2004 and led to Barma J’s Order.  They provide the essential background to these actions and also shed light on the central issue in this trial.  For the present purpose, it is not necessary to dwell into the details of these events and litigations. A brief summary of them will suffice.

9.  In an open letter dated 14 July 2003 addressed to all members of the Association, Mr Chan made complaints against Chairman Fong in respect of the expenditure for the inauguration ceremony for the 23^rd Board and also the use of Association fund for securing directorship at the Yan Chai Hospital.

10.  As a result of Mr Chan’s open letter, an extraordinary general meeting (EGM) was held on 18 July 2003, at which resolutions were passed removing Chairman Fong as the chairman and director of the 23^rd Board and also as member of the Association.  This led to disagreements between members and directors who supported Chairman Fong on the one hand and those who supported Mr Chan and Mr Lam on the other.  The incident also sparked off a series of litigations, culminating in Barma J’s Order.

11.  The first piece of litigation was commenced by Chairman Fong against the Association on 4 August 2003 under High Court Action No.2883 of 2003 (“HCA2883/2003”).  In the action, he sought a declaration that the resolutions passed at the EGM on 18 July 2003 (including those removing him from the board and the Association) were null and void and also an injunction to restrain the Association from implementing the resolutions.  Chairman Fong applied for and was granted an interim injunction, restraining the Association from removing him from the board and the Association.  By Sakhrani J’s order dated 15 June 2004, the injunction was continued until trial or until further order with costs of the inter-partes application to be paid by the Association to Chairman Fong.  Despite an order for early trial, no further step has been taken in the action. 

12.  In the meantime on 12 February 2004, Chairman Fong, and the 6^th to 8^th defendants issued a second piece of litigation against the Association in High Court Miscellaneous Proceedings No. 429 of 2004 (“HCMP 429/2004”).  In the Originating Summons, they sought an order that the Association should convene and hold its annual general meeting for the purpose of, inter alia, electing a new board of directors (i.e. the 24^th Board).  At the first hearing on 12 March 2004, Mr Lam appeared, acting in person, on behalf of the Association.

13.  Mr Zeall Kwok Hing Shamson (蕭國興) (“Mr Zeall”), who is a solicitor, is a member of the Association and the Association’s Honorary Legal Adviser.  In HCA 2883/2003, he acted as the solicitor for the Association through his firm, Shamson Zeall & Co (“SZC”).  On 31 March 2004, SZC commenced District Court Civil Action No. 1767 of 2004 (“DCCJ1767/2004”) against the Association for unpaid costs and disbursements incurred in defending HCA2883/2003, in the sum of $619,089.

14.  Messrs P H Chin & Co (“PHCC”) was appointed as the Association’s solicitors to defend DCJ 1767/2004 by a retainer dated 6 April 2004 and signed by the 3^rd, 4^th and 6^th defendants and another director, purporting to be acting on behalf of the Association.  The attendance notes of PHCC were in evidence at the trial.  They reveal the following:

(1)   The 2^nd to 7^th defendants had taken part in giving instructions to PHCC at conference held on 9 April 2004.  The 4^th defendant was also present at three other conferences on 16 and 22 April and 17 May 2004 together with the 6^th, 2^nd and 7^th defendants respectively.  The 4^th defendant also had conference with counsel on 25 May 2004. 

(2)   The instructions given at these conferences were that Mr Zeall acted without authority of the Association, that his legal fees were excessive and he acted for his own interest and benefit. PHCC and counsel were also instructed that Mr Lam had asked Mr Tsui Kwong of the Association to take $500,000 from the Association but was refused, that Mr Chan had through Mr Lam paid $500,000 to Mr Zeall and that Mr Lam convened an EGM to pass resolution to settle the bill of $619,000.  

15.  Subsequently, PHCC applied to cease to act for the Association.  In the affirmation of Chin Pak Hing dated 14 June 2004, leading the application, the following matters were stated:

(1)   There were two rivalry factions in the board of directors of the Association.  One of them comprised Chairman Fong and nine directors of the Association, by whom PHCC was instructed.  The other rivalry faction, to which Mr Zeall belonged, was at the time in control of the board.

(2)   Chairman Fong and the nine directors gave instructions that Mr Zeall, assisted by Mr Lam and others, had already obtained from the Association’s bank account $300,000, the legality of which was seriously in question. 

(3)   Many members and directors of the Association took the view that the fraction of directors in control of the board was committing fraud on the Association by dissipating its assets.

16.  About two weeks later on 29 June 2004, Chairman Fong and the 1^st to 4^th defendants started another piece of litigation against the Association, Mr Lam and Mr Zeall in High Court Miscellaneous Proceedings No. 1642 of 2004 (“HCMP1642/2004”).  In the Originating Summons, they sought an order that the Association should convene and hold an annual general meeting for the purpose of passing resolutions to elect a new board of directors and to remove Mr Lam and Mr Zeall as directors of the Association.  Chairman Fong and the 1^st to 4^th defendants were represented by PHCC. 

17.  The 4^th defendant made two affirmations on behalf of all the plaintiffs in support of the Originating Summons on 30 June and 2 October 2004.  The first affirmation is a lengthy one running into 64 pages (excluding the exhibits) and went into considerable details of the disputes and rivalries between the parties.  Among other matters, the affirmation contained the following allegations that are relevant for the present purpose:

(1)   There were two rival factions in the 23^rd Board.  One of them was loyal to Mr Lam and Mr Zeall.  The other faction, to which the 4^th defendant and his co-plaintiffs belonged to, was loyal to Chairman Fong.  The former faction was referred to as the “Lam-Zeall Faction” whereas the latter was called “the Fong Faction”. 

(2)   The accusations that Mr Chan made against Chairman Fong in his open letter dated 14 July 2003 did not appear to be well founded in facts.  Mr Zeall on his own volition on 18 July 2003 delivered a legal advice to the Association to support the accusations against Chairman Fong.  The advice was fundamentally erroneous, but it stirred up feelings against Chairman Fong, “paving the way for the Lam-Zeall Faction plot to remove Fong’s chairmanship and expel Fong’s membership of the Association”: paragraph 50 of the affirmation. 

(3)   The resolutions passed at the EGM on 18 July 2003 removing Chairman Fong as Chairman and as member “were a successful coup d’état by the Lam-Zeall Faction against Fong.”  The Lam-Zeall Faction became in control of the 23^rd Board and acted on numerous occasions against the Association’s interest, most notably in, inter alia, “giving a carte blanche to Zeall for exorbitant legal fees purported incurred for and on behalf of the Association”: paragraph 57 of the affirmation.  

(4)   Mr Zeall’s advice given on 18 July 2003 had successfully provoked litigation between Chairman Fong and the Association, as a result of which his firm was able to make profit from the Association through acting as its solicitors in HCA2883/2003. The fear that the Lam-Zeall Faction might give Mr Zeall’s firm a carte blanche in charging legal fees for acting for the Association in litigation turned out to be well founded.

(5)   Despite the fees charged were dubious, the 23^rd Board resolved to pay SZC the bill for $619,089 in full and failed to protect the interest of the Association and “acted like a blank cheque for Zeall and his firm”. 

(6)   At a Board meeting on 31 may 2004, a long-term supporter of Chairman Fong called Siu Kam Dok collapsed and was declared dead upon arrival at the hospital.

(7)   Mr Zeall acted dishonestly in that Mr Chan and a Mr Wong Lap Man had each given him a cheque of $500,000, totalling $1,000,000, as costs on account for HCA 2883/2003.  But he made no mention of this in his claim.  Further, members of the Lam-Zeall Faction had stolen the cheque book of the Association and acted in combination to enable SZC to take $300,000 from the Association’s account.

18.  Then on 11 August 2004, the 1^st to 5^th defendants issued a petition in High Court Miscellaneous Proceedings No. 1989 of 2004 (“HCMP1989/2004”) against Mr Lam, Mr Zeall, SZC, the Association and two other parties.  By the Petition, as amended on 2 September 2004, the 1^st to 5^th defendants sought a number of reliefs, including an order regulating the conduct of the Election Committee responsible for the election of the 24^th Board.  By summons filed on 30 August 2004, the 1^st to 5^th defendants applied for the appointment of interim receivers over the assets of the Association together with injunctive relief against the respondents. 

19.  The Amended Petition again referred to the Association having two factions, the Lam-Zeall Faction and the Fong Faction.  The respondents were said to belong to the Lam-Zeall Faction.  The Amended Petition further repeated some of the matters raised in the previous litigations brought by Chairman Fong and others as follows:

(1)   The Lam-Zeall Faction had benefited themselves at the expense of the Association, including recklessly and improperly procuring the Association to become embroiled in expensive and needless litigation by the expulsion of Chairman Fong.  Further, instead of defending SZC’s unwarranted claim in DCCJ 1767/2004, they procured the Association to be unrepresented and undefended.

(2)   Mr Zeall or his firm had secretly received $400,000 (previously said to be $500,000) and $500,000 from Mr Chan and Mr Wong Lap Man respectively as legal fees for HCA2883/2003.  Mr Lam, who was instrumental to Mr Zeall receiving these payments, had kept the Association in the dark about it.

(3)   Mr Lam also assisted Mr Zeall to obtain $300,000 from the Association by means of a cashier order.  He further gave Mr Zeall $100,000 from the Association’s account to pay for the legal fees of himself and the Association in defending HCMP1642/2004, when the Association was only a nominal defendant and there was conflict of interest between him and the Association.

20.  The 4^th defendant, on behalf of the other petitioners, made the affirmation verifying the Amended Petition and in support of the application for appointment of interim receivers.  He had made further elaborations of the complaints in the Amended Petition.  He also made a second affirmation on 7 October 2004.

21.  On 15 October 2004, Barma J heard HCMP429/2004, HCMP1642/2004 and HCMP1989/2004 and made the following orders:

(1)   In HCMP429/2004, the Association was ordered to pay the plaintiffs their costs of the action.

(2)   In HCMP1989/2004, the Receivers were appointed and Mr Lam and two other respondents were ordered to pay the costs of the application in any event.

(3)   In HCMP1642/2004, the Receivers were directed to hold an annual general meeting to, inter alia, elect a new board of directors and the Association was ordered to pay the costs of the plaintiffs.

The Circular

22.  As a result of Barma J’s Order, the Receivers took over the day-to-day management of the Association and the conduct of the election of the 24^th Board.  Some time in November 2004, which was in the heat of the election, the Circular was sent or circulated to members of the Association.  The original text of the Circular and its certified English translation are set out in Annexure A and B to this Judgment. 

23.  The first paragraph of the Circular referred to a letter on pink paper from “一群正義的會董、會員” (a group of righteous directors and members of the Association).  This letter was dated 11 November 2004 and addressed to all the members of the Association.  It was printed on both sides of the paper.  A copy of the front page of the letter in reduced size was reproduced at the lower right side of the Circular.  The front page of the letter stated that a group of reputable members of the Association supported the candidates whose names appeared at the back page in the election of the 24^th Board. The present plaintiffs were among the group of reputable members and their names appeared on the front page.  At the back page of the letter was a list of 20 names and another list of 40 names of candidates.  Both the present plaintiffs were on the first list of 20 candidates.  

24.  The part of the Circular that the plaintiffs complain of is the three paragraphs under the respective headings of  “謀財害命” (Stratagem for obtaining wealth and endangering life), “敗訴填補堂費” (Defeat in lawsuits and compensation for costs of hearing) and “換湯不換藥” (Same old stuff with a different label). The plaintiffs say, and there is no doubt about it, that they were expressly referred to in these paragraphs. 

25.  It is the plaintiffs’ case that the words used in these paragraphs, in their natural and ordinary meaning, were understood to mean:

(A)    Under the paragraph “謀財害命” (Stratagem for obtaining wealth and endangering life):

(1)   Mr Chan had made a libellous statement against Chairman Fong that led to the latter’s expulsion from the Association.

(2)   Amongst other, Mr Lam dominated and controlled the 23^rd Board.  Just on the pretext of Mr Chan’s libellous statement, and without any factual of legal basis, Mr Lam, amongst others, wrongfully expelled Chairman Fong from the Association.

(3)   Mr Lam, Mr Siu, Mr Fong and some others conspired with the bankrupt solicitor Mr Zeall to claim double solicitor’s fees from the Association in respect of HCA2883/2003.

(4)   As part of the conspiracy and by collaboration between Mr Chan, Mr Lam, Mr Wong, Mr Siu, Mr Fong and some others, Mr Chan and Mr Wong advanced $900,000 to the Association to pay the solicitor’s fees of Mr Zeall. 

(5)   Mr Lam, Mr Siu, Mr Fong and some others then connived with Mr Zeall in commencing litigation against the Association to claim a huge sum of close to $3,000,000.

(6)   Siu Kam Dok (蕭金鐸 ), an elderly director of the Association, was contemptuous of what Mr Chan, Mr Lam, Mr Siu, Mr Fong, Mr Zeall, Mr Wong and some others had done.  At a board of director’s meeting, he strenuously argued for the Association and for Chairman Fong.  In the heat of the argument, he died.  His death was caused by, amongst others, Mr Chan and Mr Lam who had subject him to burring satires and freezing ironies and accused him of confounding black and white.   

(7)   Amongst others, Mr Chan and Mr Lam were evildoers in power.  They conspired with Mr Siu, Mr Fong, Mr Zeall, Mr Wong and others to rip off the Association. 

(8)   Amongst others, Mr Chan and Mr Lam caused the death of Siu Kam Dok, but remained out of law’s reach comfortably.

(B) Under the paragraph “敗訴填補堂費” (Defeat in lawsuits and compensation for costs of hearing):

(9)   Although Mr Lam remained out of law’s reach in respect of the death of Siu Kam Dok, he was so bad and was eventually punished by being defeated in HCMP429/2004 and HCMP1989/2004.  He was interested in being elected as a director of the Association and would make use of the position to serve his personal interest, to dominate and control the Association and to do whatever he wished, and to use the Association’s money to pay costs that he was liable for in HCMP429/2004 and HCMP1989/2004.

(C) Under the paragraph “換湯不換藥” (Same old stuff with a different label):

(10)  When canvassing support for the election, Mr Lam deceived the members of the Association by concealing what they had evilly done, what in fact happened and the defeat in HCMP429/2004 and HCMP1989/2004.

26.  Although the defendants denied the words were defamatory of the plaintiffs, no arguments were advanced on this at the trial.  The plaintiffs contend and I agree that the Circular is plainly defamatory.  In a nutshell, the plaintiffs were accused of: (1) removing Chairman Fong by a libellous statement, (2) conspiring with Mr Zeall to claim double and unjustified legal fees from the Association and (3) causing the death of Siu Kam Dok.  In the case of Mr Lam, the Circular further accused him of using the letter dated 11 November 2004 to deceive members and to cover up his bad deeds and the truth, so that he could take control of the Association again and embezzle funds of the Association to make up for the legal costs of the lost litigations.

27.  The defendants put the plaintiffs to strict proof that the Circular had been published.  The evidence before the Court shows clearly that the Circular had been circulated among members of the Association.  Mr Chan’s evidence is that he received a copy of it through the mail.  In the case of Mr Lam, he was given a copy of it by Chan Siu Yuen (陳少元) (“SY Chan”), who was a director of the 23^rd Board and a candidate for the 24^th Board.  Lee Dai Chung (李棣松) (“DC Lee”), another director, also received a copy through the post.  The 1^st, 2^nd, 4^th and 7^th defendants admitted that they had received copies of the Circular while the 8^th defendant said she was informed by another member that the Circular was sent to the members of the Association.

The witnesses

28.  I now turn to the core issue on the question of liability, namely, whether the defendants or any of them had taken part in the publication of the Circular.  This involves a consideration of the evidence of the plaintiffs and more importantly their witnesses, the testimony of the defendants and their witness as well as other evidence available.  I shall begin with the evidence of the parties and their witnesses.

29.  The evidence of Mr Chan does not touch on the core issue and is uncontroversial.  It is his evidence that he received a copy of the Circular through the mail and he was very unhappy with the contents of it.

30.  Similarly, Mr Lam’s evidence is not controversial.  He stated that on an occasion when he was in Lung Chiu Restaurant having a meeting with other members of the Association, SY Chan came and passed him a copy of the Circular.  It was folded up and placed inside a white envelope with no address label on it.  After reading the Circular, he was very unhappy. 

31.  SY Chan’s evidence is that one afternoon in the end of November 2004, after meeting with other members at Lung Chiu Restaurant, he went to the premises of the Association.  This he said was his routine in the several weeks leading to the election of the 24^th Board.  When he arrived at the premises of the Association, he saw 10 odd people sitting around two long tables.  They were folding copies of the Circular and putting them into envelopes.  Among these people were the 2^nd, 3^rd, 4^th, 7^th and 8^th defendants and also another member called Yeung Po Luk.  The 6^th defendant was also present on the premises and making comments or suggestions from time to time (指指點點).  SY Chan spoke to Yeung and when the latter was not noticing, he took a copy of the Circular and slipped it into his trousers pocket.  The copy he took was not in an envelope.  He immediately returned to Lung Chiu Restaurant, where he saw Mr Lam and passed the copy to him. 

32.  The last of the plaintiffs’ witness is DC Lee.  He said he was a long-time member of the Association and was well acquainted with many other members who did not belong to either of the two rivalry factions.  He mentioned there were two occasions in mid-November 2004 when the 2^nd defendant alone and jointly with the 4^th and 7^th defendants, asked him to vote for Chairman Fong and his supporters.  He also said that some time around the end of November 2004, he received from the post a copy of the Circular.  He found the contents rather alarming, so he asked the 2^nd, 4^th and 7^th defendants about it when he later saw them at the premises of the Association.  None of them denied that the Circular was issued by them.  As far as he knew, none of the defendants had told other members that the Circular was not issued by them. 

33.  All the defendants gave evidence at the trial.  Their witness statements, which were adopted as their evidence, are nearly identical.  They are elderly people with the 1^st, 2^nd and 4^th defendants in their 70s and the 6^th defendant being 80 years old.  Some of them say they do not enjoy good health and have problems with eyesight, hearing and memory.  While the 1^st, 2^nd, 4^th and 7^th defendants said they had received a copy of the Circular from the post, the 5^th, 6^th and 8^th defendants said they only came to read the Circular when they received the letter before action from the plaintiffs’ solicitors.  All the defendants accepted they did nothing about the Circular.  They did not find it necessary to deny their involvement, to clarify the position or to find out who was responsible for it because they did not issue the Circular.  It was only after receiving the letter from the plaintiffs’ solicitors that they got together and consulted lawyer, who then on their behalf wrote to the plaintiffs’ solicitors to deny any involvement in the publication of the Circular. 

34.  The 2^nd, 4^th, 7^th and 8^th defendants denied taking part in folding copies of the Circular and putting them into envelopes.  The 6^th defendant also denied being present when this was done.  In fact, all the defendants, except the 7^th defendant, said they did not go to the premises of the Association after the appointment of the Receivers.  As for the 7^th defendant, he said he only went to see Mr Tsui Kwong (also known as Tsui Pak Hin), the general executive or manager of the Association.  The 2^nd, 4^th and 7^th defendants further denied canvassing votes from DC Lee on behalf of Chairman Fong and his supporters.  They also denied the occasion in the end of November 2004 when DC Lee said he asked them about the Circular.

35.  The defence witness, Ms Fung Chi Hoi (馮志開), was an employee of the Association between 1995 and July 2005.  Her evidence is that after the appointment of the Receivers, very few members returned to the premises of the Association.  She said before the election of the 24^th Board was held, there were two occasions when a group of people came to the premises to fold documents and put them into envelopes.  These people worked for about four hours and had lunch boxes on the premises.  She did not know any of these people; they were not members of the Association and none of the defendants was among this group of people.  As instructed by Mr Tsui, she had helped to pile up the envelopes, but she did not look at the contents of the documents, which was in A4 size. 

36.  In my view, the plaintiffs, SY Chan and DC Lee are truthful witnesses and their evidence is to be preferred to that of the defendants and Ms Fung.  The defendants’ evidence is that there was no animosity between them and SY Chan and DC Lee.  For some of the defendants, it was only after the election of the 24^th Board that they did not exchange words with SY Chan and that it was after DC Lee gave his witness statement that they were unhappy about him.  There is therefore no reason why SY Chan or DC Lee would make up their evidence against the defendants.  As matter of fact, as Mr Pow SC observed, they did not bend-over-backwards to incriminate all the defendants.  On the contrary, to the extent that the defendants all said they had taken no step to clarify that they had nothing to do with the Circular, that is in line with DC Lee’s evidence that the 2^nd, 6^th and 7^th defendants did not deny involvement in the Circular or sought to clarify their position. 

37.  I accept there is a discrepancy between the evidence of Mr Lam and that of SY Chan in respect of whether the copy of the Circular that SY Chan passed to Mr Lam was contained in an envelope.  Considering that the event took place some five years ago, I agree that it is probable that either Mr Lam or SY Chan had made an honest mistake.  This is a minor aspect of the events and I am not convinced that this alone shows SY Chan or Mr Lam to be lying.  The plaintiffs and their witnesses had not been shaken under cross-examinations.

38.  In the case of Ms Fung, her evidence about the two occasions when a group of people went to the premises of the Association to fold documents and put them into envelopes does not assist the defendants on the core issue.  It is not her evidence that the documents in question were copies of the Circular.  On the contrary, it is unlikely to be the case because the documents she saw were in A4 size whereas the Circular is not in A4 size.  While the defendants have been anxious to emphasize that after the appointment of the Receivers, nobody went to the Association premises and there was no activity on the premises, Ms Fung’s evidence suggests that activity such as folding documents dissemination could have taken place and in fact did take place on the Association premises.  Indeed, Ms Fung accepted that it was possible that such activity could have taken place when she was not present on the Association premises. 

39.  More importantly, I find this aspect of Ms Fung’s evidence rather peculiar.  If, as she said, the people folding documents and putting them into envelopes were strangers and not members of the Association, it is difficult to understand why they were permitted to enter and stay on the premises of the Association.  On the other hand, Mr Tsui Kwong must know these people; otherwise he would not have told Ms Fung to help them.  It is inconceivable that Ms Fung would not find out from Mr Tsui who these people were, if not what they were doing.

40.  Another puzzling aspect of Ms Fung’s evidence is that she said she was first approached by the 3^rd defendant to be a witness for the defendants in April 2009.  By then she had left the employment of the Association for some four years during which none of the defendants had ever contacted her.  The evidence before the Court does not explain what made the 3^rd defendant think she was in a position to give relevant and useful evidence for the defendants.  Admittedly, however, Ms Fung was moved by what the 3^rd defendant told her and she is obviously sympathetic to him and the other defendants. 

41.  Although it was almost five years afterwards, Ms Fung apparently was able to recall and describe in some details the occasions when people came to the Association to fold documents and put them into envelopes.  However, she was not able to name any other member or director of the Association apart from the parties and the plaintiffs’ witnesses and Yeung Po Luk, whom SY Chan had mentioned in his witness statement.  In my view, there must be doubts whether her evidence is entirely based on her independent recollection.  I have reservations about the reliability of her evidence.

42.  As for the defendants, the evidence of the 1^st defendant is very convoluted.  He was not able to recall making any witness statement for these actions or being explained the contents of them, despite the supplemental witness statement was made less than two months ago.  He disputed he was a candidate for the 24^th Board, saying he was in bad health and that he was not qualified to do so.  This pleaded fact was however admitted in the Defence.  Although he stated in his supplemental witness statement that he received a copy of the Circular, he said in cross-examination that he was unclear whether he had ever seen a copy of the Circular.  He even went so far as saying that he could not recognize the document and did not know that his name had appeared on it.  He also denied in cross-examination that he was involved in any of the litigations involving Chairman Fong and the Association when he was indisputably a plaintiff in HCMP1642/2004 and HCMP1989/2004.  It was only in re-examination that he accepted his involvement.  To say the least, the 1^st defendant’s evidence is demonstrably unreliable. 

43.  The 2^nd defendant’s evidence is equally unreliable.  He is also one of the plaintiffs in HCMP1642/2004 and HCMP1989/2004.  However, he denied having authorized the 4^th defendant to make the affirmations on his behalf.  In the early part of his cross-examination, he claimed he did not know who took the lead in these litigations, saying also that he would join in and sign documents that were for the good of the Association.  Later on when he was confronted with the documents in the litigations, he changed to say that it was the 4^th defendant who took a leading role.  He then admitted he had been explained the 4^th defendant’s affirmations and that he agreed to them.   He further admitted having taken part in conferences to give instructions to PHCC to defend SZC’s claim for unpaid legal fees.  In contradiction to his evidence in the beginning of the cross-examination, he said he was of the view that someone had conspired with Mr Zeall to take money from the Association under the pretext of legal costs.   In fact, his answers in cross-examination show that a number of the views and accusations expressed in the Circular were shared by him.  Notably, he used the same expression as that appeared in the Circular, namely, “冷嘲熱諷、癲倒黑白”(burring satires and freezing ironies, confounding black and white), when describing how Siu Kam Dok died.  While he claimed he only agreed to part of the Circular, he was reluctant to be specific and to tell which part of it that he agreed or disagreed.  He dodged the questions by saying that this should be left to the court and lawyers.  

44.  As for the 4^th defendant, he is undoubtedly a protagonist in the so-called Fong’s Faction.  He was also admittedly a good friend of Siu Kam Dok.  There is overwhelming evidence that he took active and leading role in the several pieces of litigations leading to Barma J’s Order.  He accepted in cross-examination that the affirmations he made in the various litigations were prepared on his instructions and he had been explained the contents of them.  It is worth noting that the allegations in his affirmations bore striking resemblance to those in the Circular.  His oral testimony also confirms that he indeed holds the views expressed in the Circular.  However, his evidence is that he had not shown his affirmations to other people and he had only communicated his views to the 3^rd defendant, but not to the only defendants.  Not only this, the 4^th defendant said he was surprised to see that the Circular had set out all his views and feelings, as if the author could read his mind.  Notwithstanding all these, he only called the 3^rd defendant and did nothing else.  Despite his evidence that he believed someone was playing a trick on him and he did not want the opposing camp to think he was using dirty tricks by publishing the Circular; he made no attempt to clarify the matter or his position.  In my view, the 4^th defendant’s behaviour after receiving the Circular is most unnatural and is hardly compatible with his claim of innocence. 

45.  In the case of the 5^th defendant, because of his hearing problems, his evidence was short and Mr Pow SC fairly did not subject him to much cross-examinations.  In essence, he stated that he would listen to the 4^th defendant and followed his deeds if those were for the good of the Association.  He did not really deny when it was put to him that the Circular was published by the 4^th defendant with his authorization.

46.  As for the 6^th defendant, his evidence shows that he was very keen to distance himself from the rivalries between the two so-called factions.  He denied taking part in defending the claim by SZC for unpaid legal fees, despite he had signed the retainer letter of PHCC.  He even claimed to be ignorant of Chairman Fong’s expulsion, when he was at the material time a vice-chairman of the 23^rd Board.  He also denied being a candidate for the 24^th Board, which is contrary to the admission in the Defence.  He further said he did not in 2004 think that Mr Lam had conspired with Mr Zeall to embezzle funds of the Association.  This is in sharp contrast to the instructions PHCC received in DCCJ1767/2004.  There is no credibility in these denials and assertions, which are directly at odds with the contemporaneous documents and objective evidence before the Court.  His explanation as to why he did not try to find out more about the Circular and about how his name came to be on it, namely, he was in the habit of tearing up and discarding letters before reading them, is most extraordinary.  In my view, the evidence of the 6^th defendant is evasive and incredible.

47.  The evidence of the 7^th defendant is also surprising in a number of ways.  First, he said he could not tell which of the two opposing camps published the Circular, when it must be obvious to a reasonable reader that it would not have been published by the so-called Lam-Zeall Faction.  It is also not to be forgotten that at the material time, he had been a director for over 10 years.  It is difficult to believe that he would be as ignorant as not being able to sense and tell from which camp the Circular had come.  When he was pressed about the point, he even said there might have been a third camp, a suggestion that he later retracted.  This shows he was quite prepared to give any answer that came to his mind, irrespective of whether it was well founded.  Second, he said when he received the Circular, he simply shuffled it into the drawer because there were a lot of circulars flowing around and he decided he should quietly observe the situation.  But he agreed at the same time that the Circular contained serious allegations and his name had appeared on it.  It is also his evidence that he did not subscribe to the use of improper means to campaign for votes, and he regarded publishing document such as the Circular to be improper.  Like the other defendants, his reaction and behaviour is out of line with that of a reasonable person, if indeed he had no part to play in the publication of the Circular.  There is additionally one peculiar aspect about the 7^th defendant’s supplemental witness statement.  While he had specifically refuted the part of DC Lee’s witness statement about him, he did not dispute SY Chan’s statement that he had taken part in folding copies of the Circular and putting them into envelopes.  There is no satisfactory explanation to this omission.

48.  Coming finally to the 8^th defendant, she claimed she did not know SY Chan and she did not take part in handling copies of the Circular as related by SY Chan.  However, similar to the 7^th defendant, she was not able to explain satisfactorily why she did not specifically refute SY Chan’s statement in her supplemental witness statement.  The 8^th defendant also claimed to have no idea that she was a plaintiff in HCMP429/2004 and stated that she did not authorize the 7^th defendant or Chairman Fong to institute the proceedings against the Association.  She further said she did not know she was a candidate for the 24^th Board.  All these suggest that the 8^th defendant is consciously trying to play down her involvement in the events in 2004 and in turn the disputes between the two opposing camps.  Indeed, she was at pain to give the impression that she was entirely neutral and took both camps as her friends.  She deplored the use of the Circular to campaign for votes and she was emphatic about her name appearing on the Circular.  Surprisingly, she had taken no step to clarify the matter or her innocence after receiving the letter of demand from the plaintiffs’ solicitors, other than going with the other defendants to see the lawyer.  This reaction does not sit well with her assertion of neutrality.

Other evidence

49.  The plaintiffs also rely on other circumstantial evidence to show that the defendants were involved in the publishing of the Circular and that their denial is incredible.  The first is the striking similarities between the allegations against the plaintiffs and the so-called Lam-Zeall Faction in the affirmations and originating documents filed in the various litigations preceding Barma J’s Order and the attacks levelledagainst them in the Circular.  In this regard, it is a telling feature of the defendants who took part in the previous litigations that they tried to deny or play down their participation in the litigations.  They are no doubt aware that the similarities are too much of a coincidence. 

50.  The second is an undated circular to members bearing the heading “ 鮑晏明法宫委任臨時接管人” (Barma J appointed interim receivers), “林潔聲蕭幹林方俠雲敗訴高院” (Lam Kit Sing, Siu Kon Lam, Fong Hup Wan lost the High Court cases).  Apart from reporting Barma J’s Order, this circular also referred to the misbehaviour of the Lam-Zeall Faction, which is the same as the attacks contained in the Circular.  It concluded by urging the members to support Chairman Fong at the coming annual general meeting.  Although it was undated, it must have been issued after Barma J’s Order, which was made on 15 October 2004.  The signatures of the 1st to 6^th defendants appeared at the top of the first page of this circular.  

51.  The evidence of the 1^st defendant is that he only signed on a blank paper. This is rather improbable having regard to the position of his signature.  In direct contradiction to his evidence, the 2^nd, 4^th and 6^th defendants said they signed this circular together.  They claimed that they signed at the request and instruction of Mr Tsui and suggested that it was prepared entirely on Mr Tsui’s volition and it was all his idea.  Even the 7^th defendant, who received a copy of this circular from the post, said that this was Mr Tsui’s idea.  According to Ms Fung, Mr Tsui had died in 2007.  It would appear that the defendants are trying to shift the responsibility to Mr Tsui.  However, it is inherently improbable that an employee of the Association would on his own volition come up with such a document and was further able to direct and instruct the directors of the Association, including the 6^th defendant who was a vice-chairman of the board, to append their signatures on it.  The further suggestion by some of the defendants that they signed without knowing the contents or who was the drafter is even more implausible.

52.  In my view, the 1^st, 2^nd, 4^th and 6^th defendants’ evidence on how their signatures came to be on this circular highlights the incredibility and unreliability of their evidence.  At the same time, this circular shows that the 1^st to 6^th defendants were actively involved in canvassing support for Chairman Fong in the election of the 24^th Board.  This, together with the similarities in contents between this circular and the Circular, lends support to the plaintiffs’ case that these defendants had participated in the publication of the Circular.

53.  There is thirdly another undated circular bearing the heading “我們所認識的方若愚” (The Fong Yock Yee that we know) purported to be from the present eight defendants.  The order and arrangement in which the names of the eight defendants appeared at the end of this circular is exactly the same as that in the Circular.  This circular set out a number of good deeds of Chairman Fong and contributions he made to the native town and the Association.  It concluded by stating they supported him to serve as the chairman of the 24^th Board.  The evidence of the majority of the defendants is that they only came to be aware of this document on 29 June 2009 when they attended their solicitors’ office.  But as pointed out by Mr Pow SC, this document was disclosed by the plaintiffs at a much earlier time.  The defendants also said they did not know how their names came to be on the document.  I do not accept the defendants’ claim that they knew nothing about this circular and had not seen it before 29 June 2009.  This circular again shows that the defendants were supportive of Chairman Fong and were actively assisting him in his election campaign.  It also shows that it is more probable than not that these defendants published the Circular as part of their efforts to Chairman Fong and his camp in their election campaign.

54.  Lastly, there is a third undated circular bearing the heading “打倒林潔聲! 踢走材氏集團!” (Strike down Lam Kit Sing! Kick out the Lam’s Faction!) issued in the name of “一大群忠實的會員”  (a big group of faithful members).  It contained attacks against the plaintiffs and their supporters.  This circular shows that there was no need for other people to use the defendants’ names to issue the Circular in order to conceal their identities. 

55.  In short, having regard to the evidence, I am satisfied that the plaintiffs have established on balance of probabilities that each of the 1^st, 2^nd, 4^th to 8^th defendants had taken part in publishing the Circular. 

56.  Ms Tsui argued that the plaintiffs have failed to prove that the defendants acted in concert to write and/or publish the Circular.  The plaintiffs’ pleaded case is that the 1^st to 8^th defendants falsely and maliciously published the defamatory words in the Circular.  As a matter of general principle, all persons who participate in the publication of a libel are jointly and severally liable for the whole damage suffered by the plaintiff: Gatley on Libel and Slander (10^th edition, 2004) para.6.4.  It is not necessary for the plaintiffs to prove that the defendants were acting in concert.

Quantum

57.  The plaintiffs only claim general damages against the defendants.  In Hung Yuen Chan Robert v. Hong Kong standard Newspapers Ltd & Ors [1996] 4 HKC 519 at 533C, le Pichon J (as she then was) observed that the objective of an award of damages is to restore the plaintiff, as far as money can do so, to the position he would have been if the tort had not been committed.  

58.  Further, in Cheung Ng Sheong Steven v. Eastweek Publisher Ltd [1995] 3 HKC 601 at p.613D-F, the Court of Appeal accepted 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 NewspapersLtd HCA258/86, unreported at p.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 Ltd. (No.2) [1964] 3 All ER 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 v. Broome [1972] 1 All ER 801).”  

59.  As to the amount of damages to be awarded, le Pichon J held in Hung Yuen Chan Robert v. Hong Kong standard Newspapers Ltd & Ors at 534D-E that the relevant considerations include: the seriousness of the libel having regard to the plaintiff’s position and standing; the prominence of the article and the circumstances of its publication; conduct of the defendants including conduct subsequent to the plaintiff’s complaint; and the absence of any retraction or apology.  Ultimately, each case depends on its facts and “it is difficult to extrapolate from previous awards unless there are significant similarities”: at 536G-H.

60.  In the present case, the considerations that are relevant to assessing the award of damages include:

(1)   Both plaintiffs enjoy substantial standing and reputation both within the Association and in the community.  Although they were not liked by the members who supported Chairman Fong, the fact that they were elected to the 24^th Board is demonstrative of the support and respect they had from a majority of the members.  Further, the evidence adduced shows that at the material time, they held a number of public offices in Hong Kong and also held responsible positions in various consultative, advisory and voluntary organizations in Hong Kong and Zhongshan.  Mr Chan was also awarded the Bronze Bauhinia Star Medal in 2003.

(2)   The libel involved very unpleasant and serious attacks against the plaintiffs’ integrity, honesty and propriety in conduct, including conduct in the affairs of the Association. They were accused of dishonesty, corruption, abusing their power and position in the Association and even causing the death of a fellow director.  

(3)   The Circular was apparently sent or circulated to all members of the Association.  The Association had a membership of some 6,000 members.  This is quite a wide publication.  There will be serious adverse effect on the plaintiffs’ reputation within the Association.

(4)   The defendants had not retracted from the Circular.  There was also no offer of apology.  Their evidence also shows that they could not be bothered to do anything about the Circular. 

(5)   On the other hand, it is to be noted that the defendants have run a restrictive defence against the claims.

61.  The plaintiffs referred to and drew comparison from the award made in Lee Ching v. Lau May Ming [2007] 3 HKLRD 623.  In that case, the plaintiffs were experienced and dedicated volunteer members of a charitable organization that had a membership of about 200 members.  The defendant, who was the chairman of the board of governors, issued a letter to all members accusing the plaintiffs of failure to perform their duties as governors, spreading rumours and malicious slander and wrongful accusations against the defendant that threatened the organization’s coherence and quality of service and affected the defendant’s personal health, and also engaging in inappropriate and illegal tricks to seize power.  After a full trial that raised defences of justification and qualified privilege, Poon J awarded each of the plaintiffs $200,000 in general damages and $200,000 in aggravated damages.  The plaintiffs contend that an appropriate award to each of them should be $500,000, taking into account that they enjoyed a higher standing and social position and that the libel was more serious and published to more people.

62.  While I agree that for the reasons given by the present plaintiffs, a higher award of general damages to them is justified, I do not accept that an award of $500,000 each is called for. 

63.  On the other hand, I do not agree with the defendants’ argument that the amount of damages should be affected by the fact the plaintiffs did not appear to suffer any actual loss and that similar circulars or accusations had been made against the plaintiffs at around the same time.  They are irrelevant considerations.

64.  Having considered all the circumstances of this case, noting in particular the factors indicated above, I am of the view that an award of $300,000 for each of the plaintiff in general damages is appropriate.  And I so order. 

Conclusion

65.  For the reasons stated above, I enter judgment against the 1^st, 2^nd, 4^th to 8^th defendants jointly and severally:

(1)  For the plaintiff in HCA2901/2004 in the sum of HK$300,000 with interest at judgment rate from the date of writ to payment; and

(2)  For the plaintiff in HCA2935/2004 in the sum of HK$300,000 with interest at judgment rate from the date of writ to payment.

66.  Applying the normal rule of costs follow event, I also make an order nisi that the 1^st, 2^nd, 4^th to 8^th defendants pay the plaintiffs the costs of their respective action, including any costs reserved, to be taxed if not agreed, altogether with a certificate for two counsel.

Annexure A - The Circular

親愛的會友：

近日，得知各方好友收到一封用粉紅色信紙，自稱是『一群正義的會董、會員』所寄出的信件。請大家張開雪亮的眼睛，明辨是非，千萬不要按照他們提供的『侯選會董名單』填寫選票，否則後果嚴重。

謀財害命

林潔聲、蕭幹林、方俠雲等人，操控同鄉會會董會，憑陳耀星一紙緋謗性的言論，在毫無事實與法律根據的情況下，強行罷免年邁的方若愚會長的會藉，更和已破產的蕭國興律師同謀，向同鄉會索取雙重律師費，串通陳耀星，王立文為同鄉會塾支律師費九十萬元後，再縱容蕭國興在法院向同鄉會提起訴訟，索取律師費幾達三百萬元之多！已故老會董蕭金鐸不值此等人之所作所為，在會董會會議中為同鄉會和方會長據理力爭，遭林潔聲、方俠雲等冷嘲熱諷、癲倒黑白，竟被當場氣死！嗚呼！奸人當道，謀財害命竟瀟遙法外，天理何在？

敗訴填補堂費

天綱恢恢，疏而不漏！林潔聲、蕭幹林、方俠雲等人，終在高等法院案件HCA429/2004及HCMP1989/2004中敗訴，以致負上龐大的律師費及堂費。法院現已委任管理人，從林潔聲等人手上全面接管同鄉會。但林潔聲等人仍死心不息，意圖東山再起，以粉紅色信件來欺騙各位，蒙蔽他們的惡行和事實的真相，希望獲得更多的選票，再次霸佔我們的同鄉會，以達到他們操控本會、為所欲為的目的，及得以以同鄉會的血汗金錢去填補他們損失的巨額堂費。

換湯不換藥

在信件中，他們繼續用無恥的手法去掩飾，自吹自擂，完全沒有提及輸了官司的事實，不但厚顏無恥，而且居心叵測。

本人亦相信大家可以明辨是非，會給方若愚先生機會，再次為大家效勞，多謝！

Annexure B – Certified English translation of the Circular

Dear Member,

Recently, we learnt that friends from all quarters have received a letter printed on pink letter paper from those who declare themselves as a “group of righteous directors and members of the Association”. Please open your discerning eyes and make a clear distinction between right and wrong. Be careful not to complete your ballot in accordance with the “list of candidate directors” supplied by them, otherwise the consequences will be serious.

Stratagem for obtaining wealth and endangering life

Lam Kit Sing, Siu Kon Lam, Fong Hup Wan, etc. were in control of the Board of Directors of the Clan Association. By relying on alibellous statement written by Chan Iu Seng and under the circumstance where there was no factual and legal basis, they forcefully expelled the elderly Chairman of the Association Fong Yock Yee from being the Association’s member. In addition, they conspired with the bankrupt solicitor Zeall Kwok Hing to claim double legal fees from the Clan Association. They collaborated with Chan Iu Seng and Wong Lap Man to advance solicitor’s fees in a sum of $900,000 for the Association. They then connived Zeall Kwok Hing in commencing litigation in court against the Clan Association for claiming legal fees in a huge sum of close to $3,000,000! The late elderly director Siu Kam Dok was contemptuous of what such people had done. At a Board of Directors’ meeting, he argued strenuously upon reasons for the Clan Association and for Mr. Chairman Fong. He was subject to burring satires and freezing ironies and was accused of confounding black and white by Lam Kit Sing, Fong Hup Wan, etc. and he died as a result of these. Alas! Evildoers are in power and at large after stratagem for obtaining wealth and endangering life. Where is the divine justice?

Defeat in lawsuits and compensation for costs of hearings

The net of heaven has large meshes, but it lets nothing through! Lam Kit Sing, Siu Kon Lam, Fong Hup Wan, etc. were eventually defeated in HCA429/2004 and HCMP1989/2004. As a consequence, they are liable for a huge sum of solicitor’s fees and costs of hearings. The court has now appointed a receiver to take over the Clan Association entirely from Lam Kit Sing and others. But Lam Kit Sing and others are not reconciled to their defeat and are trying to stage a comeback by using the pink letter to cheat each of you and to cover up their evil doings, the facts and the truth with a wish to obtain more votes so as to allow them to wrest our Clan Association from us once again, to achieve their purpose of manipulating our association and doing whatever they like, and make use of the hard-earned money of the Clan Association to make up for their losses of huge costs of hearings.

Same old stuff with a different label

In the letter, they continue to use shameless way of handling to cover up, blowing their own trumpet without mentioning the fact of their defeat in the lawsuits. Not only are they shameless, but they harbour ulterior motives as well.

I trust that you can make a clear distinction between right and wrong and that you will give Mr. Fong Yock Yee an opportunity to serve you again. Thank you!