YU SAU NING HOMER v. WONG WAN KEUNG AND OTHERS

DCCJ 313/2016

[2020] HKDC 40

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 313 OF 2016

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J U D G M E N T

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INTRODUCTION

1.  This is the trial of the plaintiff’s claim for libel arising from two letters.  The first letter was dated 20 November 2015, issued by the 1^st to 4^th defendants and a Cheung Chi Wan (transliteration), and addressed to the owners of Yue Cheung Centre (裕昌中心) in Fotan, New Territories (“the Building”).  It was entitled “委員剖白書”.  The second letter was dated 10 December 2015 and issued by the 2^nd defendant to the owners.  It was entitled “裕昌當委員。人身欠安全”.  I shall refer to them as “the first letter” and “the second letter” below.

2.  Yue Cheung Centre is an industrial building.  It is 18-storey high and has over 250 units and about 30 parking spaces.  There is a notice board on each floor.

3.  When the first and second letters were issued, the management committee of the incorporated owners of the Building (“the IO”) was coming to the end of its 14^th term. 

4.  The parties in this action were all members of its management committee of the 13^th and 14^th term:-

(a)  The plaintiff was the chairman.

(b)  The 1^st defendant was the vice-chairman.

(c)  The 2^nd defendant was a member.  He had been a member of the management committee for about 20 years.

(d)  The 3^rd defendant was the treasurer for the 13^th term and a member in the 14^th term.  He had been a member for about 8 years.

(e)  The 4^th defendant was a member.  He had been a member for about 8 years.

5.  The election of the management committee for the 15^th term was scheduled to take place on 25 November 2015 (“the Original Owners’ Meeting”).  The plaintiff sought re-election as chairman.  The 1^st defendant was the only other candidate running for the same position.  The election did not take place on that day and the Original Owners’ Meeting was adjourned to 15 December 2015 (“the Adjourned Owners’ Meeting”).

6.  The first letter was issued just five days before the Original Owners’ Meeting. Among other things, it highlighted a number of issues concerning the past management of the Building.  It stated that the majority of the former and existing members of the management committee did not support the plaintiff but instead supported the 1^st defendant to run for chairman.  It urged the owners to take part in the upcoming election.  The second letter was issued just five days before the Adjourned Owners’ Meeting.  The 2^nd defendant made a number of allegations concerning the Original Owners’ Meeting and referred to a warning letter issued to him by the plaintiff’s solicitors.  He urged the owners to actively participate in the Adjourned Owners’ Meeting, kick the chairman, who was not up to the job, out from the IO and elect a chairman who genuinely acted in the interest of the IO.

7.  In the end, the 1^st defendant was elected as chairman of the management committee of the 15^th term at the general election held on 26 January 2016.  The 2^nd, 3^rd and 4^th defendants were elected as members.  The plaintiff had chosen not to run.

8.  The plaintiff contends that some of the words appearing in the first and second letters amounted to libel.  The defendants deny liability.  Their primary defences are qualified privilege and fair comment.  Although pleaded, the defence of justification was abandoned in the defendants’ opening submissions. The plaintiff argues that the defences must fail.  He seeks to establish malice on the part of the defendants.

9.  The parties’ cases raise an extensive range of factual disputes which concern, first, the management of the Building while the plaintiff was the chairman in the 13^th and 14^th term of the management committee; and, second, the incidents which took place at the Original Owners’ Meeting and afterwards.  These disputes, spanning over a period from 2011 to early 2016, need to be resolved primarily for the purpose of determining the issue of malice. 

10.  In essence, it is the plaintiff’s case that the words were untrue, and the defendants did not believe in the truth of the words in the first and second letters or were reckless as to their truth.  Further, the plaintiff says that in the course of these proceedings, the defendants have been making false allegations concerning him, thereby displaying overt hostility towards him. This goes to support malice on their part.  Hence, the truth or falsity of these allegations and the defendants’ subjective belief in them will have to be adjudicated upon.

11.  This case features a number of contemporaneous documents.   They include, most notably, minutes of the meetings held by the management committee in its 13^th and 14^th term.  They concern the various projects carried out, and management issues discussed, by the IO which were referred to in the first letter.  They are therefore relevant to the factual disputes concerning the management of the Building and were extensively referred to in cross-examination.  There were about eight meetings held in the 13^th term and about nine in the 14^th term.  In this judgment, I shall refer to any such meeting by its order, the term in which it was held and its date, eg, the 4^th meeting in the 13^th term held on 16 March 2012.

12.  Apart from the parties, the evidence also features other members of the management committee and the staff of the management office.  They are:-

(a)  Ms Tsang Sau Fun (曾秀芬) – she had worked at the management office since 1995.  She resigned in January 2016.  She was the head of the management office and was one of the two staff there in late 2015.  She was subsequently employed as a clerk in a company of the plaintiff.

(b)  Ms Ting Kwai Sim (丁桂嬋) – the other staff at the management office in late 2015.  She left employment in May 2016.

(c)  Mr Ng Kai Tak (伍啟德) – he was the secretary in the 13^th term until about late 2012.

(d)  Mr Wan Kin Hung (尹堅洪) – he was an owner in late 2015.

(e)  Mr Wong Kim Ping (transliteration) (王劍平) – he was a member of the management committee in its 13^th term.

13.  At the trial, the plaintiff testified and called Tsang and Ting as his witnesses. The four defendants gave evidence.  In addition, they called Ng and Wan to testify.

14.  Just to complete the dramatis personae, the plaintiff was the majority shareholder holding 80% of the shares in a company called Season Yield Investment Ltd.  The company owned a number of units on the 13^th floor of the Building. The evidence also features another company of the plaintiff called Youthful Technology International Ltd.

15.  It would be convenient to set out at the outset the content of the first and second letters and the meanings of the allegedly defamatory words, as pleaded by the plaintiff.

THE FIRST AND SECOND LETTERS

16.  The first letter read as follows (underline added):-

“ 委 員 剖 白 書

致裕昌大廈各業主：

        裕昌立案法團，將于11月25日進行第十五屆法團主席選舉，希望各業主勇躍參加。余壽寧主席在第十三、十四屆均自動當選，可惜主席在第十四屆中期，管理上出現嚴重缺失，使大部份委員非常不滿，而產生今次的選舉競爭。

        縱容管理處主管權力獨大，對各業主訴求推三檔四、好事領功，出事就閃，使很多業主對其表現非常不滿。有業主投訴，更曾經帶客睇樓。

(一)  應收帳款不收，有些商戶欠費超過一年，累積應收帳廿萬元餘，主管嚴重失職，余主席不但沒有責成管理處未盡責追回，更稱讚其管理完善，勁加入工獎勵；

(二)   縱容委員違規泊車，管理處職員欠缺管理；

(三)  升降機，一擲伍拾多萬元更改裝備（未経業主授權，違反條例第344章）主席好大喜功，未知效益，祇求想像、花費數以拾萬元，將全幢大廈可用光管全部更换、豪裝一個管理員工專用廁所。就以上三項工程，已經花費法團近百萬元儲備。相信各業主根本無感覺效益存在。前主席黃宇生先生，當主席期間，從來沒加一分一毫管理費，扣除各項維修改善工程二佰多萬，法團盈餘積聚410萭元。而余壽寧先生在位四年，管理費已加二次，加月租車位費，車場入閘費等，法團盈餘不旦沒増加，反而下降。如此理財主席，長始下去，祇能為法團增添債務，為業主添加負擔。就以上情況缺失，大部份前屆及現任委員對余壽寧主席不于支持，故不希望其連任。現時法圑委員四分五裂，眾叛親離，大部份委員一致推舉副主席王雲强先生參選第十五屆法團主席一職。

        各位業主，這次選舉可能是歷屆選舉中最激烈、最黑暗、最卑劣的選舉，有人無所不用其極，運用權力，以偷步封殺的不法行為，指使管理處作為其個人競選總部，更未公佈參選名單前，偷步印製余壽寧先生競選授權書進行非法拉票，誤導業主，以為一人參選，對另一參選者王雲强先生極不公平。一個不懂理財的主席連任，只能為法團帶來赤字，給業主加重負擔。

        呼籲業主在11月25日前，於開會前可向管理處取回曾誤導的授權書，或當日親自參加投票，重新考慮裕昌中心的去向。

副主席: 王雲強 委員:鄭日庭 劉錦麟 張祥

前委員: 張志雲

日期: 2015年11月20日”

17.  The plaintiff says that the underlined words are highly defamatory of him (“the first words”).  He pleads that they bore the following meanings:-

(a)  The plaintiff is/was engaged in illegal conduct at the election of the chairman of the IO;

(b)  The plaintiff is/was engaged in unscrupulous and unethical conduct at the election of the chairman of the IO;

(c)  The plaintiff deliberately misled the owners of the Building into believing that there was only one candidate at the election of the chairman of the IO whereas in fact there was more than one candidate;

(d)  The plaintiff’s management of the IO was seriously deficient;

(e)  The plaintiff’s seriously deficient management of the IO caused much dissatisfaction among the members of the IO;

(f)  The plaintiff connived at the power and dominance of the management office;

(g)  The plaintiff does not care about efficiency and benefit to the owners of the Building; and

(h)  The plaintiff has poor financial management skills.

18.  The second letter read as follows (underline added):-

“ 裕昌當委員。人身欠安全

        本人鄭日庭是二樓A, J, K座業主，法團委員，受當時主席邀請，參與法團工作，一當就已廿年。因本人一不爭權位、二不貪利益，只作協調委員，協助主席行政管理，嚴格監察工程開支及管理工作，受到歷屆主席及委員高度信任、並廢除委員每月津貼。在前主席黃宇生先生及委員同心同德的管理下，使法團在長期不増加管理費而又財政穩定，更有數百萬盈餘。

        日前是主席換屆選舉，本人連同其他委員對現任主席余壽寧先生工作缺失，投不信任票。並向各業主剖白法團近兩年的行政管理及財政開支，競選過程不公。在十一月廿五日主席選舉中，得到大量業主親身參加並以大比數否定了是次不公平選舉。在民政局主任及法團律師見證下，另行擇日舉行。在是日選舉中，有人指使其員工，竟然在現場偷拍，這種行為就是對不同意見委員心理上的震懾。十一月廿七日，本人接到余壽寧主席的律師警告信，對本人形同威嚇。以一個為連任，竟然對委員作出震懾、威嚇，委員人身安全受到威脋，如果余壽寧主席連任，又有誰願意當委員。一個用不當手段以震懾丶威嚇委員的主席，對法團運作是嚴重事件，請問各委員業主，是否能接受。希望各委員業主在十二月十五日業主大會，能勇躍參加，對事件作出裁判。或在下次選舉中，用選票（授權書）將不稱職的主席踢出法團，選出一個真正為法團為業主做事的主席，謝謝！

裕昌業主立案法團委員

鄭日庭

2015年12月10日”

19.  The plaintiff says that the underlined words are highly defamatory of him (“the second words”).  He pleads that they bore the following meanings:-

(a)  The plaintiff is/was engaged in illegal conduct at the election of the chairman of the IO;

(b)  The plaintiff intimidates and frightens members of the IO and causes them to worry about their personal safety;

(c)  The plaintiff was unfit to be the chairman of the IO;

(d)  The plaintiff was deficient in his work as the chairman of the IO; and

(e)  The plaintiff wants to frighten people into keeping their mouths shut.

THE PLAINTIFF’S CASE

20.  In addition to his role as the chairman of the IO, the plaintiff has been a successful businessman and has nearly 40 years of experience in the wholesale and retail sale of cosmetics and perfumery, household products and information technology products.  He is the chief executive officer of a group of companies comprising Cheong Hing Store Ltd, Cheong Hing VinSac and Youthful Technology. He is actively involved in community services in Hong Kong and China and holds a number of titles with industry bodies, public bodies and political organisations.

21.  In June 2011, the plaintiff was elected as chairman of the 13^th term of the management committee without any opposition.  He was re-elected as the chairman of the 14^th term in August 2013, again unchallenged. 

22.  The plaintiff attended all the meetings of the management committee in the 13^th and 14^th term.  The minutes of these meetings were prepared and drafted by Tsang, reviewed by the secretary and finally signed by the plaintiff.

23.  In cross-examination, the plaintiff described his own management style as “management through others”.  He would chair the management committee meetings, follow the agenda and control the time.  He would first ascertain whether the proposed motions could be passed unanimously.  If not, he would not put up the motion for voting.  Throughout these two terms, none of the defendants or Ng had expressed any dissatisfaction or made any complaint to the plaintiff before the general election of the 15^th term.

Publication

24.  Copies of the first letter were inserted into the letterboxes of the owners of the Building except the units owned by Season Yield. 

25.  Copies of the second letter were inserted into the letterboxes of the owners of the Building, again, except the units owned by Season Yield.  Copies were also posted on all the notice boards of the Building and had remained there until one or two days after the general election held on 26 January 2016.

The first and second words

26.  The plaintiff’s case is that the first and second words were defamatory of him and were untrue and, further, that the defendants either did not honestly believe in them or were reckless as to whether they were true or false.

27.  It is necessary to look at each of the projects and incidents referred to in the first and second letters, and also the allegations made by the defendants in this action.  They fall within four broad categories:-

(a)  Management of the Building during the 13^th and 14^th term;

(b)  Events leading to the Original Owners’ Meeting, which were mainly concerned with the preparation of proxy forms by the management office;

(c)  What happened at the Original Owners’ Meeting; and

(d)  What happened subsequent to the Original Owners’ Meeting.

28.  Item (a), in turn, covers the following projects or issues:-

(a)  Lift improvement;

(b)  LED replacement;

(c)  Ground floor toilet renovation;

(d)  Floor painting;

(e)  Parking issues;

(f)  Outstanding management fees;

(g)  Adjustment of the management fees, carpark rent and staff salaries; and

(h)  Recovery of the charging system at the carpark by the plaintiff. 

29.  As regards the management of the Building, the crux of the plaintiff’s case is that the allegations made in the first letter were untrue and that is amply demonstrated by the minutes of the meetings of the management committee.  Broadly speaking, the defendants alleged that the plaintiff’s management of the Building was seriously deficient and he did not care about the efficiency and benefits of the various projects but nonetheless had caused them to be carried out.  The plaintiff says that the defendants’ allegations are contradicted by the discussions and resolutions recorded in the minutes.  The truth is that the Building is an old one and works needed to be done to improve its facilities, such as the lifts.  Resolutions were passed by the management committee approving these projects.  Each committee member had a responsibility to understand the projects and had the right to voice out different opinions.  At the time of the meetings, however, no one raised any objection to him.  These complaints were only made afterwards.

Lift improvement

30.  In the first letter, the 1^st to 4^th defendants wrote, “升降機，一擲伍拾多萬元更改裝備（未経業主授權，違反條例第344章）”.

31.  The plaintiff says that the above allegation that the plaintiff had caused the IO to incur more than $500,000 on the lift improvement project was false and the defendants either did not honestly believe in the allegation or were reckless as to its truth.  The allegation was false for a number of reasons.

32.  First, the plaintiff did not cause the IO to incur the expenditure.  The expenditure was approved by the management committee in its 13^th term.  The approval was documented in the minutes.

33.  At the 4^th meeting of the 13^th term held on 16 March 2012, the lift improvement project was discussed.  The minutes show that the plaintiff, the 1^st, 3^rd and 4^th defendants were present.  Para (二)(10) recorded that an outline was given by the lift company called “好歷香港升降機有限公司” (“Holake”) on the proposed equipment to be added to the lifts and the government’s “Energy Efficiency Projects” subsidy (“能源效益項目”) and the deliberation of the management committee.  The latter included a discussion of the estimated costs of over $500,000, the government subsidy of half of the costs and the savings that the proposed equipment could be expected to generate.  The management committee unanimously resolved to apply for the government subsidy.  I reproduce an extract of para (二)(10) below:-

“公司出席講解申請「能源效益項目」事宜

邀請「好歷香港升降機有限公司」…出席會議，詳細講解---環境及自然保育基金建築物能源效益資助計劃「能源效益項目」，申請細則及程序。指本廈升降機房掣櫃現有驅動系統已用將近30年，耗電量大，夏天容易過熱，引致壞機率增加，維修費亦增加。如在掣櫃加裝變頻器，既節省用電又減少維修，亦提高升降機的安全性及穩定性(改善升降機到達樓層時，與樓層平衡等)。

主席余先生指有關「能源效益項目」由於這項目要經三次會議討論方可入紙申請，建議先申請，待政府批准與否，才決定是否改裝節能工程。委員王劍平跟進解釋公司推介之「能源效益計劃」整項工程設備約需50餘萬，大廈本身負責一半約26萬元，政府資助一半，據公司分析本大廈每月電費開支約$35,000元，而升降機之耗電量約佔一半，約$17,500元，裝上節能裝置，使約省電費1/4，約4仟餘元，一年約省電5萬元，由此推算這裝置約需5年回本。王先生提出工程支出20多萬元，法團要考慮現金流是否可以應付是項支出。

經委員討論後，一致通過大廈向環境及自然保育基金申請建築物能源效益資助計劃「能源效益項目」。” (underline added)

34.  At the 8^th meeting of the 13^th term held on 8 January 2013, the project was brought up for discussion.  The minutes show that the plaintiff, the 2^nd, 3^rd and 4^th defendants were present.  Para (二) recorded the progress made so far, including the successful application of the government subsidy and the tendering process.  The management committee unanimously resolved that the project would be carried out by Holake who was one of the five invitees for the tender and had tendered the lowest bid of $510,000.  The management committee proposed that a briefing session be convened to inform the owners.  I reproduce an extract of para (二) below:-

“建築物能源效益資助計劃-「升降機改善工程」開標事宜

本廈已成功申請政府建築物能源效益資助劃-「升降機改善工程」撥款。法團於2012年12月1日出通告張貼大堂及發函邀請多間公司落標競投，截止2013年12月12日收到各公司回標分別是:

a) 好歷香港升降機有限公司	51萬；
b) 迅達升降機(香港)有限公司	76萬；
c) 其士(香港)有限公司	覆函不競投；
d) 富士達(香港)有限公司	覆函不競投；
e) 三菱電梯香港有限公司	取標書不競投。

經會議討論，有回標的兩間公司「好歷香港升降機有限公司」及「迅達升降機(香港)有限公司」均能夠滿足標書的服務要求，一致通過交由較低標「好歷香港升降機有限公司」承造是項工程。委員建議出通告知會業主，召開「升降機改善工程」簡介會，由秘書孔先生負責跟進。” (underline added)

35.  In light of the above, the plaintiff contends that it was the management committee who resolved to carry out the lift improvement project and that it was not him who caused the expenditure to be incurred.  At the time of the first letter, the defendants knew that to be the case since all of them had attended at least one of the above two meetings and they voted in favour of the resolutions. 

36.  Secondly, the IO did not incur the whole costs of the project in the sum of about $500,000, as the first letter would appear to suggest.  As a matter of fact, half of the costs were reimbursed by the government under the “Energy Efficiency Projects” subsidy.

37.  The government’s approval of the subsidy was documented in a letter dated 26 September 2012 sent to the IO by the Environment and Conservation fund. 

38.  Furthermore, the IO had received the subsidy in the sum of $229,500 by 31 March 2015.  This is supported by the following documentary evidence:-

(a)  The entry of “GRANT FOR BUILDING ENERGY EFFICIENCY FUNDING SCHEMES” under the year of 2015 in the Income Statements of the Building for the years ended 31 March 2010 to 31 March 2016 (this one-page document was exhibited to the 3^rd defendant’s supplemental witness statement); and

(b)  The same entry appeared in the “Income” section in the Statement of Comprehensive Income, which formed part of the auditors’ report and accounts of the Building for the year ended 31 March 2015.  (A copy of the unsigned report was exhibited to the 3^rd defendant’s supplemental witness statement).

39.  At the time of the first letter, the defendants should have been aware of the application for the subsidy.  Further, they either knew that the subsidy had indeed been received by the IO or did not care whether that was the case or not. Nonetheless, they proceeded to say in the first letter “一擲伍拾多萬元更改裝備”, without mentioning the government subsidy at all.  Under cross-examination, the defendants described their knowledge (or the lack of it) at that time about the receipt of the subsidy money as follows:-

(a)  The 1^st defendant initially admitted that he knew then that the IO had received the subsidy sum of $229,500.  Later on, he sought to withdraw the admission.  Then, in re-examination, he said he had only a very vague idea of the time when the IO received the subsidy.

(b)  The 2^nd defendant said that he did not make any enquiry at that time.

(c)  Like the 2^nd defendant, the 3^rd defendant said that he did not make any enquiry at the time.

(d)  The 4^th defendant said that he was unaware of the costs of the project and whether or not the IO had received the government subsidy.  He was only familiar with the toilet renovation project and the management fee issue.

40.  Thirdly, the project has led to significant benefits to the Building.  The benefits included reduced electricity expenses, reduced fire risk, improved stability and safety of the lifts which now balance with the floor level and reduced maintenance costs.  Yet, the defendants omitted to mention any of these in the first letter. 

41.  Fourthly, the defendants never complained about the project in any of the meetings of the management committee.  This is, the plaintiff argues, highly indicative of the fact that the defendants had never before had any problem with it.  They raised their complaint about the lift improvement project for the first time in the first letter.  This fact suggests that the defendants were making use of the project as a false pretence to harm the plaintiff and attack his integrity and sincerity.

42.  Fifthly, no owners’ resolution at a general meeting was required for the project since the value did not exceed the threshold set out in section 20A(2B) of the Building Management Ordinance, Cap 344.  In any event, in cross-examination, the plaintiff emphasised that the lift improvement project was executed and overseen by Holake, as resolved by the management committee.  And, according to Holake, it was not necessary to hold an owners’ meeting.  Instead, a briefing session was held to explain the project to the owners.

LED replacement

43.  In the first letter, the 1^st to 4^th defendants wrote, “主席好大喜功，未知效益，祇求想像、花費數以拾萬元，將全幢大廈可用光管全部更換、…”.

44.  The plaintiff says that the above allegation that the plaintiff had caused the IO to incur tens of thousands of dollars to replace all of the light tubes in the Building was false and the defendants either did not honestly believe in the allegation or were reckless as to its truth.  The allegation was false for a number of reasons.

45.  First, the plaintiff did not cause the IO to incur the expenditure.  The expenditure was approved by the management committee at the 5^th meeting of the 14^th term held on 15 September 2014.  The minutes show that the plaintiff, the 2^nd, 3^rd and 4^th defendants were present.  Para (二)(3) recorded that the LED tubes were to be provided by the IO and quotations had been obtained from four contractors for the installation.  It was unanimously resolved that a contractor called “文興水電工程” be appointed to undertake the replacement.  I reproduce an extract of para (二)(3) below:-

“安裝節能光管事宜

跟進上次會議，安裝節能光管事宜，由法團提供LED節能光管(每套約30元)，管理處聯絡有關公司報價安裝LED節能光管，分別有：

a) 通力技術服務有限公司：	安裝1至3樓每套250元，4至16樓每套150元；
b) 文興水電工程：	安裝每套80元；
c) 耀金顧問有限公司：	安裝全廈共681套光管費用105,000元(提供接線膠玉)；
d) 龍記工程公司：	安裝全廈共681套光管費用170,000元(提供接線膠玉)。

委員討論後一致通過交由較低價「文興水電工程」承造該工程。” (underline added)

46.  In light of the unanimous resolution, the plaintiff contends that it was the management committee who decided to carry out the LED replacement project and that it was not him who caused the expenditure to be incurred.  At the time of the first letter, the defendants knew that to be the case since three of them had in fact attended the meeting and voted in favour of the resolution. 

47.  Secondly, the project has led to significant benefits to the Building.  The existing light tubes in the Building were aging.  The benefits included reduced electricity bills in 2015 by a total sum of about $66,000.  This was documented in an undated notice to the owners.  Due to the durability of the new tubes, there was also a reduction in the rate of replacement of light tubes.  The temperature of the lobby was also reduced as a result of the replacement. 

48.  In light of the express approval of the project by the management committee and its substantial benefits, it was wrong for the defendants to knowingly make the allegation that the plaintiff had caused money to be lavishly spent on the LED replacement project without caring what benefits it would bring (“主席好大喜功，未知效益，祇求想像”).

49.  In respect of this project, the 2^nd defendant made further allegations in relation to the plaintiff’s purchase of the LED light tubes in his witness statement:-

“於2016年2月法團換屆後，我從相關的文件發現余先生向Youthful Technology International Ltd.位於深圳的皇后化妝品（深圳）有限公司購入600支LED 16W 102米光管，共$19,200。另外從陽光照明有限公司購入250支LED 10W 2呎光管及50支LED 18W 4呎光管，供$18,240。… 我最後點算整座裕昌中心，應該有約600餘個公眾地方光管位，而最後獲安排更換的共使用了約700餘支光管，新光管餘下存貨約200支。我認為上述光管價錢偏貴，而且購買數量多於使用數量。雖然曾秀芬女士沒有參與購買上述光管，她亦有負責匯報有關工程進度，我懷疑余先生串謀曾秀芬女士使用虛價的文件或數據去誇大所需購買的光管數量，去欺騙裕昌中心的業主立案法團，我補充我認為上述光管價錢是極不合理，並已向已廉政公署舉報，而事件仍在調查中。” (underline added)

50.  The plaintiff says that the above allegation that the plaintiff was conspiring with Tsang to use false document or data to inflate the amount of LED light tubes to defraud the IO is patently false.  That allegation is tantamount to saying that the plaintiff had committed a serious crime.

51.  In his testimony, the plaintiff explained the circumstances relating to the purchase of the LED light tubes.  Youthful Technology asked Queen’s Cosmetics Co Ltd, a company of the plaintiff’s friend, to purchase 860 light tubes for it from China at the price of $32.  Youthful Technology then re-sold 600 pieces to the IO at the same price.  Some of the unused pieces were kept in reserve for future replacement.  There was nothing improper about the purchase.  And there was no conspiracy between him and Tsang to use false document to defraud the IO. 

52.  Hence the allegation is simply false.

53.  Mr Lawrence Ng, who appeared for the plaintiff with Mr Victor Lui, pointed out that the allegation was not even put to the plaintiff in cross-examination. Furthermore, the 2^nd defendant accepted in his oral testimony that in late 2016 or early 2017, the ICAC had replied to him that the investigation concerning the plaintiff had been completed and they had concluded that the plaintiff had not engaged in any corrupt activity.  Notwithstanding this, the 2^nd defendant failed to mention the latest development in his supplemental witness statement filed in September 2017.  Thus, by his written evidence, he gave the false impression that the matter was still under investigation.

Ground floor toilet renovation

54.  In the first letter, the 1^st to 4^th defendants wrote, “主席好大喜功，未知效益，祇求想像 … 豪裝一個管理員工專用廁所”.

55.  The plaintiff says that the above allegation that the plaintiff had caused the IO to incur tens of thousands of dollars to lavishly renovate a toilet which was exclusively used by the staff was false and the defendants either did not honestly believe in the allegation or were reckless as to its truth.  The allegation was false for a number of reasons.

56.  First, the plaintiff did not cause the IO to incur the expenditure.  The expenditure was approved by the management committee in its 14^th term.  The discussion was documented in the minutes of the management committee.

57.  At the 8^th meeting of the 14^th term held on 13 July 2015, the renovation of the male and female toilets located on the ground floor was discussed.  The minutes show that the plaintiff, the 1^st and 3^rd defendants were present.  Para (二)(2) recorded that the two toilets had been in use for over 20 years and had become dilapidated.  It was suggested that they be renovated.  The suggestion was approved and the management office was tasked with compiling the tender document and seeking quotations.  A Mr Chung (宗先生), one of the committee members, was to follow up.  I reproduce below the content of para (二)(2):-

“地下男、女厠翻新工程事宜

地下男、女厠使用20多年，變得殘舊，建議翻新修葺。會議討論後通過有關建議，由管理處編制統一標書內容，聯絡有關承辦商報價，交由委員宗先生負責跟進。”

58.  At the next meeting, which is the 9^th meeting of the 14^th term held on 15 October 2015, Mr Chung made a report on the progress.  The minutes show that the plaintiff, the 1^st, 2^nd, 3^rd and 4^th defendants were all present.  Para (二)(2) recorded that quotations had been obtained from two contractors for the switching and renovating of the two toilets.  It was reported that the lower bid was accepted, the renovation had commenced and Mr Chung would be responsible for supervising the project.  I reproduce an extract of para (二)(2) below:-

“匯報地下男、女厠翻新工程事宜

委員宗先生匯報：按第八次會議討論後通地下男、女厠翻新工程，由管理處編制統一標書內容，聯絡有關承辦商落標，分別有：

公司名稱	(一)原男厠改女厠造價	(二)原女厠改男厠造價
通力技技術服務有限公司	$334,800元	$183,800元
龍升工程有限公司	$140,000元	$84,300元

由主席余先生、委員王先生、宗先生開標後，交由較低價龍升工程有限公司承造，工程現己展開，宗先生負責監督工程。”

59.  The plaintiff says that none of the defendants, who were present at the meeting, raised any objection or complaint.

60.  Secondly, the toilets on the ground floor were not exclusively used by the staff.

61.  Tsang explained that they were accessible and were used by owners, tenants and visitors of the Building.  In the female toilet, two cubicles were locked but a key was placed at the locker outside the management office.  A third cubicle was unlocked and could be used by the public.

62.  Mr Ng submitted that the defendants’ evidence under cross-examination support this:-

(a)  The 1^st defendant admitted that owners and other tenants could use the toilets.

(b)  The 3^rd defendant said that the owners on the ground floor could use the toilets.

(c)  The 4^th defendant admitted that the toilets were not exclusively used by the staff.  In fact, when asked about the phrase “豪裝一個管理員工專用廁所”, he said that it should be incorrect and he could not vouch for the words “專用”.

63.  Thirdly, the renovation of the toilets has led to significant benefits to the Building. The plaintiff said that due to the hillside location of the Building, it was humid and the concrete in the ground floor toilets was in decay and would peel off easily.  As a result, the toilets constantly required maintenance which was costly.  Separately, before the switch, the female toilet was smaller than the male one.  The cleaning lady had to store her equipment and supplies in the male toilet.  It also made sense to have a larger female toilet since there were four female staff members – two at the management office and two cleaning ladies.

64.  In summary, the plaintiff contends that it was the management committee who resolved to carry out the renovation project and it was not him who caused expenditure to be incurred just for the sake of spending money lavishly and without knowing the benefits.  It was wrong for the defendants to say that the toilet was exclusively used by the staff.  There were significant benefits brought about by the renovation.  At the time of the first letter, the defendants knew that to be the case since all of them attended either one or both meetings in which the renovation was discussed, approved and followed up on and the benefits were there for all to see.

Floor painting

65.  This project was not mentioned in the first letter.  It was an allegation made by the defendants in their pleading and witness statements.  In the amended defence, the defendants complained about the plaintiff’s misconduct in relation to this project:-

“The Plaintiff endorse in the painting of all floors in the building without proper committee resolution and cause to purchase too much paints before knowing the test trial resulting in wastage of IO’s funds”

66.  The plaintiff contends that this allegation was false and the defendants either did not honestly believe in the allegation or were reckless as to its truth.

67.  The matter was discussed at the 4^th meeting of the 13^th term held on 16 March 2012.  The minutes show that the plaintiff, the 1^st, 3^rd and 4^th defendants were present.  Para (二)(9)(a) recorded, among other things, that the plaintiff proposed that the floors of the 2^nd and 4^th floor be re-painted since they were quite dirty but the 3^rd defendant considered that all the floors should be re-painted in the interest of fairness.  Discussion on how and by whom the work should be done followed.  It was concluded that the 4^th defendant and Mr Lau Wai Shan do follow up and report.  I reproduce below an extract of para (二)(9)(a):-

“主席余先生巡視本廈二樓及四樓，發覺地面較污穢，為保持大廈整潔，建議為那些樓層地面掃上地台漆，司庫劉先生認為為公平起見，提議各樓層一律掃上地台漆。主席提議由法團買料，交自己大廈員工放假或工餘時間回來工作，讓員工賺取一些外快，法團亦可以較便宜價錢完成此工作。委員方先生不同意油漆工程由自己員工負責，認為外判較佳，擔心法團要負責起很大責任，… 司庫劉先生建議可代員工購買另外保險；委員王劍平指出，… 對此做法亦不贊同。至於工資方面，委員亦沒有統一意見，… 主席最後提議外邊有人以一工一料方式計算工資，即用了多少原料油漆計多少人工，建議大家可參考此方法，並交負責此工程委員張祥、劉偉山繼續跟進及探討可行性，再作交代。” (underline added)

68.  Furthermore, Tsang testified that it was in fact Mr Lau who asked the management office to purchase the paint.

69.  In light of the above, there was no basis for the defendants to make the allegation.

Parking issues

70.  In the first letter, the 1^st to 4^th defendants wrote, “縱容委員違規泊車，管理處職員欠缺管理”.

71.  The plaintiff says that the above allegation that the plaintiff had condoned the improper parking by committee members and that the management office staff had not been managing the issue was false.  The defendants did not honestly believe in the allegation or were reckless as to its truth. 

72.  The issue was discussed at the 5^th meeting of the 13^th term held on 14 June 2012.  The minutes show that the plaintiff and all the defendants were present.  Para (六) recorded that it was the plaintiff who brought up the issue of improper parking encroaching on public areas.  I reproduce the content of para (六) below:-

“關注車位佔用公眾地方問題

主席指出有車輛泊車於車位界外，有佔用公眾地方之嫌。委員指此違規現象存在多年，幾經爭議，且是以前遺留問題。為公平起見，希統一整頓，泊車不可越界。主席認為法團高層理應自發性做好，樹立榜樣。”

73.  The plaintiff points out that there was no further discussion of the parking issue in the subsequent meetings in the 13^th and 14^th term.

Outstanding management fees

74.  In the first letter, the 1^st to 4^th defendants wrote, “應收帳款不收，有些商戶欠費超過一年，累積應收帳廿萬元餘”.

75.  The plaintiff says that the above allegation that (a) there were outstanding management fees of over $200,000 and (b) the plaintiff had failed to collect them was false.  The defendants did not honestly believe in the allegation or were reckless as to its truth. 

76.  First, the collection of management fees was a matter for the management committee as a whole. 

77.  Secondly, the management committee had in fact taken active steps over the years to recover the outstanding management fees. 

78.  The main persistent defaulter was the owner of units 9E, 9F and 10P.  The following minutes show that the issue of outstanding management fee owed by that owner had been a topic of discussion in a number of management committee meetings in the 13^th and 14^th term, which were attended variously by the defendants, and that negotiations and progressive actions were taken:-

(a)  Para (一)(2) of the minutes of the 5^th meeting of the 13^th term held on 14 June 2012 recorded: “本廈9樓E、F及10樓P單位欠交管理費年多事宜，經主席及委員王天恩先生拜訪業主協商後，業主已交2個月管理費。”;

(b)  Para (二)(7)(a) of the minutes of the 1^st meeting of the 14^th term held on 21 October 2013 recorded: “本廈9樓E、F及10樓P單位欠交管理費兩年多。委員討論後，投票一致通過，先由管理處出信最後通知，再交法團法律顧問啓動相關程序跟進處理。”;

(c)  Para (二)(2) of the minutes of the 5^th meeting of the 14^th term held on 15 September 2014 recorded: “核數報告反映，本廈9樓E、F及10樓P單位欠交管理費合共約12萬。是次會議討論，法團應否採取措施追討管理費。有委員提議盡快入禀小額錢債審裁處；及對該等單位祗提供有限度服務，安排非繁忙時段上落貨。會議一致通過有關提議。”;

(d)  Para (二)(2) of the minutes of the 6^th meeting of the 14^th term held on 9 December 2014 recorded: “主席匯報本廈9樓E、F及10樓P單位欠交管理費合共約12萬。經委員及管理員拜訪，表達法團議決，將採取措施追討管理費，及對該等單位祗提供有限度服務，安排非繁忙時段上落貨。協商後業主已繳交42,000元，餘下欠款已簽協定於農曆年前分期攤還。”.

79.  There was therefore no basis for the defendants to knowingly make the allegation in the first letter.

Adjustment of management fees, carpark rent and staff salaries

80.  In the first letter, the 1^st to 4^th defendants wrote, “而余壽寧先生在位四年，管理費已加二次，加月租車位費，車場入閘費等，法團盈餘不旦沒増加，反而下降。”

81.  The plaintiff contends that the increase in the management fees, carpark rent and staff salaries over the years had been approved by the management committee in meetings in the 13^th and 14^th term, which were attended variously by the defendants:-

(a)  Para (二) of the minutes of the 5^th meeting of the 13^th term held on 14 June 2012 recorded: “通漲不斷上升，為鼓勵員工士氣，穩定員工流失，主席余先生提議調整員工薪酬。經會議討論，通過短期內作適當調整，並成立工作小組 (劉錦麟先生、鄭日庭先生、王天恩先生)，根據本廈收支數據，參考附近大廈員工薪酬，負責跟進商討調整幅度。”;

(b)  Para (三) of the minutes of the same meeting: “近年香港百物騰貴，法團已凍結管理費達四年，有鑑大廈日常各項收支數據，財政問題的存在，為使法團財政保持穩健，且顧及業主負擔，主席余先生提議調整管理費6%-8%。經會議討論，通過短期內作適當調整，並成立工作小組 (劉錦麟先生、鄭日庭先生、王天恩先生)，根據本廈收支數據，參考附近大廈管理費呎價，負責跟進商討調整幅度。”;

(c)  Para (二)(5) of the minutes of the 3^rd meeting of the 14^th term held on 17 March 2014 recorded: “員工薪酬作適當調整，由工作小組 (何世凡先生、孔繁盛先生、鄭日庭先生、王天恩先生) 負責跟進，根據員工平時工作表現、能力、年資等作參考，建議調整幅度7-8%。經是次會議討論，委員一致通過，由5月1日起生效。”;

(d)  Para (二)(4) of the minutes of the 4^th meeting of the 14^th term held on 10 June 2014 recorded: “近年香港百物騰貴，通漲不斷上升，大廈水電、清潔、升降機保養及各項維修，保險及員工薪酬等等費用逐年遞增，有鑑財政問題的存在，為使法團財政保持穩健，且顧及業主負擔，根據本廈收支數據，參考附近大廈管理費呎價，提議適當調整管理費約8%。經會議討論，委員一致通過調整管理費，由9月1日生效。”;

(e)  Para (二)(4)(b) of the minutes of the 6^th meeting of the 14^th term held on 9 December 2014 recorded: “有鑑停車場時租收費已凍結十多年，與同區比較收費偏低，有委員提議調整收費。經會議討論後一致通過，由管理處參考附近大廈車場收費，作適當調整，交法團執委批核，於2015年1月1日起調整車場收費。”;

(f)  Para (二)(2) of the minutes of the 7^th meeting of the 14^th term held on 16 March 2015 recorded: “本廈月租車位有7個私家車位及2個貨車位，月租車位租約將到期。由於今年度 (2015.4.1至2016.3.31) 有多個單位申請車位，經是次會議討論一致通過，重新安排月租車位，以抽籤方式決定；月租車費調整至，私家車$2,600元、貨車 (5.5噸以下) $3,000元。”; and

(g)  Para (二)(4) of the minutes of the same meeting recorded: “員工薪酬作適當調整，根據本廈收支數據，參考附近大廈員工薪酬，員工平時工作表現、能力、年資等作參考，建議調整幅度8-9%。經是次會議討論，委員一致通過，由5月1日起生效。”.

82.  Insofar as the defendants were suggesting in the first letter that the plaintiff’s management of the Building was deficient and he had poor financial management skills because of the increases in the management fees, carpark rent and staff salaries, the suggestion was plainly wrong.  The minutes clearly demonstrate that the increases on various occasions were discussed and approved in meetings.  At the time of the first letter, the defendants did not honestly believe in the allegation or were reckless as to its truth. 

Recovery of the charging system of the carpark

83.  This issue was not mentioned in the first letter. 

84.  It was however mentioned in the witness statement of the 1^st defendant.  He complained that the plaintiff demanded that the IO return the carpark charging system to him at the beginning of the 15^th term.  The 1^st defendant said:-

“新壹屆立案法團於2016年1月26日成立，隨即收到前主席余先生通知要在2月1日收回 (自稱私人物件) 早前給予車場及管理處共兩套電腦收費系統，以致新一屆立案法團不能正常運作(附件八)。”

85.  The plaintiff explained that the charging system installed at the management office and the carpark was his own personal property and was designed by him.  He denied that he had made the demand to take back the system.  He only asked the IO to arrange for the maintenance of the system.

Many members of the management committee were dissatisfied with the performance of the plaintiff

86.  In the first letter, the defendants wrote: “縱容管理處主管權力獨大，對各業主訴求推三檔四、好事領功，出事就閃，使很多業主對其表現非常不滿”.

87.  The plaintiff emphasised in his evidence that throughout the 13^th and 14^th term, the defendants and Ng had never made any complaint or expressed any dissatisfaction into him.  His evidence was supported by Tsang’s testimony.

Overall, management of the Building by the plaintiff as chairman

88.  In the first letter, the 1^st to 4^th defendants wrote:-

(a)  “主席在第十四屆中期，管理上出現嚴重缺失，使大部份委員非常不滿”;

(b)  “縱容管理處主管權力獨大，對各業主訴求推三檔四、好事領功，出事就閃，使很多業主對其表現非常不滿。”;

(c)  “主席好大喜功，未知效益，祇求想像 … 如此理財主席，長始下去，祇能為法團增添債務，為業主添加負擔。就以上情況缺失… 現時法圑委員四分五裂 …”.

89.  In this action, the defendants rely on the various projects and management issues in support of the above words.  In his witness statement, the 1^st defendant alleged that in the 13^th and 14^th term, the plaintiff was engaged in a lot of improper conduct (“有太多不當事件”).  He then referred to, among others, the floor painting project and the ground floor toilet renovation and explicitly claimed that these two matters corroborate the claim that the plaintiff spent lavishly, without paying regard to the actual benefit (“未知效益，祇求想像”).  The same two incidents were relied on by the 2^nd defendant in his witness statement to make good the same point.  Further, in their oral testimony, all the defendants repeatedly confirmed that the above words are true.

90.  The plaintiff says that what the defendants said about the various projects and management issues were untrue and they did not honestly believe in what they said or were reckless as to its truth.  It follows that at the time of the first letter, they did not honestly believe in the words quoted under this heading or were reckless as to their truth. 

Events leading to the Original Owners’ Meeting: the proxy forms pre-printed with the plaintiff’s name

91.  In the first letter, the 1^st to 4^th defendants wrote, “這次選舉可能是歷屆選舉中最激烈、最黑暗、最卑劣的選舉，有人無所不用其極，運用權力，以偷步封殺的不法行為，指使管理處作為其個人競選總部，更未公佈參選名單前，偷步印製余壽寧先生競選授權書進行非法拉票，誤導業主，以為一人參選，對另一參選者王雲强先生極不公平。”.

92.  The above words, the plaintiff says, bear the meaning that the plaintiff was engaged in illegal, unscrupulous and unethical conduct in the election of the chairman, and that he deliberately misled the owners into believing that he was the only candidate in the election when that was not the case. 

93.  More specifically, they mean that the plaintiff directed the management office to be his campaign headquarters and to prepare proxy forms pre-printed with his name so as to canvass votes illegally and mislead owners.

94.  The plaintiff contends that these allegations were patently false and that the defendants either did not honestly believe in them or were reckless as to their truth at the time of the first letter.

95.  Tsang gave a more detailed account of the events concerning the proxy forms.

(a)  The date of the general election for the 15^th term, ie 25 November 2015, was announced by a notice issued by the management committee on 20 October 2015.

(b)  The deadline for signing up to run as a candidate fell on 23 November 2015.

(c)  According to that notice, an owner, who could not attend the election in person, could appoint a proxy to vote on his behalf by filling out a proxy form.  The form could be obtained from the management office.  The deadline for submitting the proxy form fell on the same deadline of 23 November 2015.

(d)  The plaintiff signed up to run for chairman.

(e)  The management office then prepared the proxy forms pre-printed with his name. 

(f)  Tsang explained that it had been the practice of the management office since 2003 or 2004 to prepare proxy forms for general meetings.  The name of the proxy, and if necessary the date of the meeting, would be stated in the form.  The practice was for the convenience of the owners, who would have full power to decide whether to sign the form or not.   The management office had never before received any complaint about the propriety of the practice.

(g)  Tsang referred to the proxy forms prepared for the election of the management committee of the 12^th term at the general meeting on or about 22 August 2009, in which an ex-chairman, Wong Yu Sang, was named as the proxy.  Both the 1^st and 2^nd defendants had signed on those proxy forms for that election.

(h)  According to the plaintiff’s evidence, he and Tsang visited an owner by the name of Cheng Hau Yuk, at a time when he was the only candidate.  Cheng signed a proxy form with the plaintiff’s named pre-printed on it.

(i)  Tsang prepared the proxy forms pre-printed with the plaintiff’s name in accordance with the practice.  The plaintiff did not instruct her to do so at all.

(j)  Subsequent to that, the 1^st defendant signed up to run for chairman on or about 15 November 2015.

(k)  After the 1^st defendant signed up, he, the 3^rd defendant, Ng and Wong Kim Ping went to the management office and accused her of having prepared the proxy forms for the plaintiff to canvass votes for him illegally.  But at that time, they did not allege that the plaintiff had instructed the management office to prepare those pre-printed proxy forms.

(l)  Solely for the purpose of calming down the matter, Tsang instructed the management office to put away those proxy forms.

(m)  There were two sets of minutes which purport to record the events at the Adjourned Owners’ Meeting.  The first one, relied on by the plaintiff in this action, was dated 12 January 2016 and signed by him.  The other version, relied on by the defendants, was undated, entitled “修正版” and signed by, among others, all four of them.

(n)  In both versions, it was recorded that the preparation of the proxy forms by the management office was done without the authorisation of the plaintiff. 

(o)  Para (三) of the former minutes stated:

“有關管理處職員未經主席授權下，派發預設授權書給業主。此乃管理處職員參與過往多次選舉的慣常做法，倘若帶來大家不便，主席願代管理處職員道歉。” (underline added)

(p)  Para (七) of the latter minutes similarly noted:

“管理處職員未經主席授權下，私自派發預設名稱的授權書給業主。此乃管理處職員參考過往多次選舉（唯一報名者）的慣常做法，倘若帶來大家不便，主席願代管理處職員道歉。” (underline added)

96.  The plaintiff emphasises that the proxy forms were prepared after the plaintiff signed up to run but before the 1^st defendant signed up.  At that time, the management office was simply following the past practice of preparing pre-printed proxy forms.  As there was only one candidate at the time of preparation, only proxy forms with the plaintiff’s name were prepared. 

97.  There is therefore no proper basis for the defendants to say in the first letter that the plaintiff was “jumping the gun” or blocking others in the election (“偷步封殺的不法行為”) or was otherwise engaging in illegal, unscrupulous and unethical conduct in the general election. 

The Original Owners’ Meeting

98.  In the second letter, the 2^nd defendant wrote, “在十一月廿五日主席選舉中，…有人指使其員工，竟然在現場偷拍，這種行為就是對不同意見委員心理上的震懾。”.

99.  Further, in his supplemental witness statement, the 2^nd defendant stated:-

“在會議上，本人還遭遇余壽寧請來的三名大漢怒視以及偷拍。具體情況如下：—

… 當本人到會場時，已經座無虛席。有委員見本人到場，即有人讓座，給本人坐在最前排，本人想主動與原告握手打招呼，原告不但沒有回應，反而目露兇光瞪著本人。本人覺得原告有敵意，近乎有失常態。本人覺得有點可怕，便與另一位委員調位，坐在較遠的座位上。在會議期間，坐在本人斜對面有三名大漢和余壽寧的兒子，他們都目露兇光望著本人，當時本人感覺恐懼，害怕他們之後會動手打我。此時，其中一名大漢手上正好有所動作，被後排的業主喝止。原來這名大漢在偷伯本人。有委員隨即叫來管理員及管理主任核查身份，發覺並非業主或委託人。在管理員正將三人驅逐之際，主席（原告）承諾這三名大漢也是他的人。但因為三名大漢並非業主，也沒有授權書，最後他們被趕出會場。當時有業主質問原告，這究竟是開業主大會，還是在開黑社會？當時有人偷拍本人亦讓本人更加警覺，本人擔心日後的人身安全會否因此被點相而受到威脅。這些年開會，我們從未經歷過如此不正常的狀態，以及竟有三名大漢參與業主大會。我第一次在開業主大會時候感覺恐懼和害怕。＂

100.  The plaintiff says that the allegation that at the Original Owners’ Meeting, the plaintiff had instructed his staff to secretly take recordings and that such behaviour was a psychological intimidation to members of the IO who held different opinions was false.  Further, the 2^nd defendant either did not honestly believe in the allegation or was reckless as to its truth.

101.  There were three individuals taking photographs at the meeting.  They were staff of the plaintiff’s companies.  Two of them held the title of general manager and the other one marketing manager.  Each was a proxy appointed by Season Yield. The appointments were supported by proxy forms.

102.  The plaintiff’s son did not attend the meeting.

103.  The plaintiff says that the photographs were taken for record and they were not taken secretly.  There are previous examples of photographs taken at meetings, such as at the briefing session of the lift improvement project held on 31 January 2013.  A photograph taken on that occasion was disclosed in this action.

104.  Ting said in cross-examination that people spoke very loudly at the meeting, someone was asking why photographs were taken, and she did feel a little scared as that happened.

105.  In cross-examination, the 2^nd defendant gave contradictory evidence on whether he knew that that three individuals were the plaintiff’s staff when he issued the second letter.  Initially, he said he definitely did not know about it.  However, shortly afterwards, his evidence took a u-turn and he admitted that he in fact did.

106.  In the end, the general election did not take place.  The meeting was adjourned to 15 December 2015. 

After the Original Owners’ Meeting: the plaintiff’s demand letters

107.  In the second letter, the 2^nd defendant wrote, “十一月廿七日，本人接到余壽寧主席的律師警告信，對本人形同威嚇。以一個為連任，竟然對委員作出震懾、威嚇，委員人身安全受到威脋… 一個用不當手段以震懾丶威嚇委員的主席，對法團運作是嚴重事件”.

108.  The plaintiff says that the allegation that he tried to intimidate and frighten members of the management committee and causing them to fear for their personal safety was false.  Further, the 2^nd defendant either did not honestly believe in the allegation or was reckless as to its truth.

109.  The letter issued by the plaintiff to the 2^nd defendant on 27 November 2015 was a demand letter.  It set out the plaintiff’s complaints about the first letter and his demands.  It is plain from its contents that it did not amount to any intimidation or threat.

110.  In fact, in cross-examination, the 2^nd defendant’s own evidence was that the contents of the demand letter were not serious and he felt that there was no need to reply to it.  Hence he could not have believed that the plaintiff was engaging in intimidating and threatening conduct towards the members of the IO.

The Adjourned Owners’ Meeting

111.  At the Adjourned Owners’ Meeting, three matters were discussed. 

112.  In accordance with the usual practice, Tsang took notes at the meeting and later prepared the minutes.  That is the version on which the plaintiff now relies.  A copy of that was posted on the notice boards of the Building on 12 January 2016.  The plaintiff says the minutes accurately recorded the discussion which had taken place.  It covered three items:-

(a)  First, in response to the issue raised by about 5% of the owners that the management committee of the 14^th term had not convened a general meeting in accordance with the Building Management Ordinance, it was explained that in the past 20 years, save and except for the purpose of general election, no owners’ meeting was convened but that it would be held in the future in compliance with the Ordinance.

(b)  Secondly, a representative from Holake gave an account of the lift improvement project, the government subsidy and the actual works undertaken.

(c)  The third matter concerned the proxy forms prepared by the management office for the general election.

113.  In his testimony, the plaintiff emphasised that when he tendered his apology at the Adjourned Owners’ Meeting, he was only doing so in respect of the preparation of the pre-printed proxy forms by the management office but not in respect of other matters.  He was apologising on behalf of the management office, solely with a view to resolving the conflict between the office and some of the owners over this subject-matter.

114.  The plaintiff’s account of what happened at the meeting, in particular, his apology, is supported by Tsang’s testimony.  However, Tsang maintained the view that there was nothing wrong with the preparation of the pre-printed proxy forms since the management office was just following past practice.

115.  The plaintiff’s account is also supported by Ting’s evidence.

The tape recording of the Adjourned Owners’ Meeting

116.  Like all management committee meetings and owners’ meetings, the Adjourned Owners’ Meeting was recorded on a cassette tape.  The cassette tape for that meeting was kept by the management office and was never in the possession of the plaintiff.  The plaintiff had not listened to the cassette tape before the commencement of the present action.

117.  For preparing the minutes of the Adjourned Owners’ Meeting, as was her usual practice, Tsang relied on her handwritten notes and did not listen to the cassette tape.  The tape was stored inside a drawer in the management office.

118.  One or two days after copies of the minutes of that meeting were posted on the notice boards, the 1^st defendant went to the management office and demanded Tsang to hand over the cassette tape.  Tsang acceded to his request. A few days later, on about 18 January 2016, the 1^st defendant returned the cassette tape to Tsang and alleged that some of the contents were missing.  Tsang did not follow up at that time.  This is partly because she seldom listened to the cassette tapes recording the meetings anyway and therefore was not paying much attention to whether the content was complete or not.  Tsang simply put the cassette tape back to the drawer and locked it up. No one approached her for the cassette tape up until the day she left employment.

119.  After the general election for the 15^th term in January 2016, the plaintiff is no longer a member of the management committee.  The first time he listened to the content of the recording made of the Adjourned Owners’ Meeting was after the action was commenced. 

120.  The relevant chronology of events surrounding the tape recording is as follows:-

(a)  In their defence filed in April 2016, in support of their defence of justification (abandoned at the beginning of the trial), the defendants alleged:-

“The Plaintiff has been served a copy of the [first and second letters]. The Plaintiff had read and/or well aware of the contents of the [first letter] prior to 25 November, 2015. The Plaintiff had read and/or well aware of the contents of the [second letter]. The Plaintiff had admitted the contents contained in the letters during the [Adjourned Owners’ Meeting] in the presence of the Defendants and many other attendants. The Plaintiff said, “對於大家提出我嘅過錯，我向大家道歉，而有關主管嘅事我一力承擔。” The Defendants and many other attendants had heard the Plaintiff openly and verbally admitted such wrong doings as stated in the letters before the Defendants and many other attendants during the 15^th GE. Such admission was recorded in writing and once on tape recordings but was erased while the tape recordings were in the possession of the Plaintiff and [Tsang].”

(b)  By letter dated 25 April 2016, the plaintiff’s solicitors asked the defendants to disclose the tape recording.  There was no reply.  A chaser letter was sent on 4 May 2016.

(c)  By reply letter dated 11 May 2016, the defendants wrote:-

“We are instructed the original tape recording was stored at the Management Office. According to the attending caretakers, your client (ie the plaintiff) had recently without obtaining prior consent or authorization of the Incorporated Owners, gone inside the Management Office. Subsequent thereto, we received your letter of request for tape recording.

Thereafter, when our client located the said tape recording in order to accede to your request, our client found that the contents contained in tape recording were erased.  Our client is now looking for the USB storage containing the audio file of the subject tape recording, and we are instructed that the same together with the requested record will be made available by next week.”

(d)  Then, later that month, the defendants’ solicitors provided digital audio files of the tape recording.  There were blank parts in that recording.  The files did not contain any recording of the discussion of the first and third items discussed.

(e)  The defence was amended on 1 September 2017.  The plea regarding the tape recording has remained.

121.  The plaintiff denies the serious allegation made by the defendants that he had erased the recording relating to his “admission” of wrongdoings.  He emphasises that the cassette tape was never in his possession. 

Subsequent events

122.  Just to complete the chronology, I set out below others events which took place subsequently.

123.  On 21 January 2016, the plaintiff commenced the present action.

124.  On 26 January 2016, members of the management committee for the 15^th term was elected.    

125.  Tsang’s last working day was 4 February 2016.

Injury to reputation

126.  As a result of the publication of the first and second words, the plaintiff says that his reputation has been gravely injured.  He has been exposed to public hatred, contempt and/or ridicule and has suffered considerable distress and embarrassment.

127.  In addition to the demand letter sent to the 2^nd defendant as mentioned above, demand letters were also sent by the plaintiff, through his solicitors, to the other defendants in respect of the first letter and to the 2^nd defendant in respect of the second letter.  The plaintiff demanded the defendants to tender an apology, among other things.  However, the defendants failed to reply to the demand letters. 

128.  Although the first letter was co-issued by Cheung Chi Wan, the plaintiff has not brought any court suit against him.  Cheung posted a letter on the notice board of the Building on about 13 January 2016.  It was entitled “收回誹謗言論的通告”.  In essence, Cheung formally withdrew his words in the first letter.  He admitted that the libellous words were not true and were written to damage the plaintiff’s election prospect.  He made an apology and promised not to issue any such libel in the future.

129.  In contrast with Cheung’s stance, none of the defendants tendered an apology to the plaintiff.  The plaintiff therefore had no choice but to commence the present action to vindicate his reputation.

THE DEFENDANTS’ CASE

130.  I set out below the defendants’ case, broadly following the structure I have used to recount the plaintiff’s case.

Publication

131.  Copies of the first letter were inserted into the letterboxes of all the owners by the 4^th defendant and Ng.  The defendants deny that they omitted to place copies in the letterboxes owned by Season Yield. 

132.  Copies of the second letter were similarly inserted into the letterboxes of all the owners of the Building.  The 2^nd defendant does not admit that he had posted copies on all the notice boards in the Building.  He puts the plaintiff to proof.

The plaintiff’s management in general

133.  The defendants were dissatisfied with the performance of the plaintiff as chairman in the 13^th and 14^th term.  The 3^rd defendant described the management committee under the chairmanship of the plaintiff as “一言堂”, suggesting that opposing views would be ignored.  The 3^rd defendant also said in cross-examination (but not in his witness statements) that the plaintiff had said at a meeting that if people said wrong things, he would sue them. 

134.  The defendants believed that there was discontent among other members of the management committee.  Many former and existing members were not supportive of the plaintiff’s decisions. 

135.  However, the plaintiff had on his side a sufficient number of committee members who would support him and help him pass resolutions.  The rest of the voices were therefore rendered powerless.  In his supplemental witness statement, the 1^st defendant said that as they were outnumbered by those in the plaintiff’s camp, they were not able to object and could only accept the decisions reluctantly (“在一些委員會上，我們以少敵多，沒有反對的權利，無奈只好一次又一次接受這些工程”).

136.  The defendants were also dissatisfied with the performance of Tsang as the supervisor of the management office, as she was not doing her job properly.  The role of the management office was to support the work of the IO and the owners.  However, Tsang often did not deal with complaints raised by the owners.  Yet, the plaintiff did not take steps to better manage Tsang.  He in fact condoned her wrongdoing.  Tsang had made many mistakes.  But the plaintiff did not even give her any warning.

137.  In their witness statements, the defendants said that the first letter was issued because while the plaintiff was in office, there were many improper incidents. The 1^st defendant referred to them as “太多不當事件”, the 2^nd and 4^th defendants described them as “太多失職事件” whereas the 3^rd defendant referred to them as “不公的事”.

138.  Another general theme running through the defence evidence is that notwithstanding that the minutes recorded that the resolutions had been passed unanimously (“一致通過”), it was not, or could not be, the case in some instances.  Sometimes, members had raised objections at the meeting but these objections were not subsequently recorded in the minutes.  Some of the minutes therefore did not truly reflect the full discussions which had taken place at the meetings.  The 1^st, 2^nd and 3^rd defendants gave oral testimony to that effect.  Since being a member of the management committee was entirely voluntary, none of them would spend too much time on reviewing the minutes.

139.  The 1^st defendant also testified that he had in fact confronted Tsang in a meeting, demanding her to explain why she had failed to record the objecting views in the minutes.  Later on, in his oral testimony, he also expressed his intrigue about why the minutes did not record many of the things which he had said at meetings.  However, since the work of a management committee member is voluntary, he would not be over concerned about it at the time.

140.  When the first and second letters were issued, the election for the 15^th term was coming up.  The defendants considered that it was their duty and in the interest of all the owners that the wrongdoings of the plaintiff were made known to them. 

141.  In cross-examination, the defendants explained their motives behind the first letter and, in the case of the 2^nd defendant, the first and second letters.

(a)  The 1^st defendant said that as vice-chairman, he had the responsibility to tell the owners of the Building the shortcomings and wrongdoing of the plaintiff while he was chairman, so that they knew who to vote for for the new term.

(b)  The 2^nd defendant said that the plaintiff had committed wrongdoings and, as members, they had the responsibility to monitor his performance.  He criticised that from the 14^th term onwards, the plaintiff did not listen to others and would make decisions before telling other people (“自把自為”, “先斬後奏”) and treated the IO as if it were his own company.  He issued the letters so as to let other owners know what kind of person the plaintiff is.

(c)  The 3^rd defendant said that in fact he wanted to help the plaintiff.  He wanted the plaintiff to accept different opinions and to correct his errors. If the plaintiff was willing to do that, the 3^rd defendant believed that he would be a good chairman because he had good social connections.

(d)  The 4^th defendant said that if one wanted to run for chairman, others should be free to comment.

142.  The defendants rely on various incidents to demonstrate the shortcomings of the plaintiff and his mismanagement of the IO affairs.

Lift improvement

143.  The defendants hold a number of grievances over the lift improvement project.

144.  First, in the first letter, the defendants’ complaint about the lift improvement project was that it was carried out without the authorisation of the owners.

145.  It is an objective fact that no owners’ meeting was held to approve the project. It was the management committee who resolved to carry out the project.  In this action, the plaintiff relies on two resolutions passed in respect of the project – see paras 33 to 34 above.

146.  The defendants point out that there was in fact an intervening resolution which was passed at the 7^th meeting of the 13^th term held on 22 October 2012.  I shall refer to the resolutions in the order of time as the “first”, “second” and “third” resolutions in this section.

147.  In her closing submissions, Ms Candy Fong, counsel for the defendants, contended that there is a clear discrepancy between the second and third resolutions.

148.  The second resolution was passed in October 2012 and was recorded in para (三) of the minutes:-

“滙報申報環境及自然保育基金建築物能源效益資助計劃「能源效益項目」進度

主席滙報本廈成功申請環境及自然保育基金建築物能源效益資助計劃「能源效益項目」，政府撥款最高$257,500元。邀請升降機保養商「好歷香港升降機有限公司」代表前來會議，詳細講解在升降機房掣櫃現有驅動系統加裝變頻器節能工程及該「能源效益資助計劃」的程序。經委員討論後，一致通過是項節能工程。由「好歷香港升降機有限公司」擬定標書----進行招標----見標、評標及揀選----籌備業主大會及議決----中標通知、訂貨及貨到地盤----工程施工----完工後提交報告。” (underline added)

149.  As is clear from the underlined words, the resolution expressly contemplated that an owners’ resolution should be passed in respect of the project.

150.  Nevertheless, in the next (and third) resolution passed in January 2013, the owners’ resolution was omitted: “一致通過交由較低標「好歷香港升降機有限公司」承造是項工程。委員建議出通告知會業主，召開「升降機改善工程」簡介會，由秘書孔先生負責跟進”.  The owners’ resolution originally contemplated was replaced by a briefing session for the owners.

151.  The 2^nd defendant said that he doubted the authenticity of the minutes of the third meeting.  On its face, it was dated 5 February 2013, followed by a remark “Amended” (“修訂”).  In any event, Ms Fong submitted that the second and third resolutions are contradictory.  

152.  Furthermore, the defendants say that the value of the lift improvement project exceeded $500,000. As a matter of law, it therefore required an approval from the owners.

153.  All these clearly support the defendants’ honest claim expressed in the first letter about the lift improvement project, namely “未経業主授權，違反條例第344章”.

154.  Secondly, the lift improvement project was problematic for another reason.  The defendants say that only two bids had been received for the project, the three other invitees not having submitted any bid.  The process was therefore not in compliance with para 11 of the Code of Practice on Procurement of Supplies, Goods and Services.  In such a situation, it requires the committee to resolve to accept or reject the tender exercise.  The plaintiff failed to explain why there was such non-compliance.

155.  Thirdly, as regards the plaintiff’s argument that it was the responsibility of the management committee, not him alone, to carry out the project legally, the defendants contend that the plaintiff was the person who signed the minutes, contracts and cheques and Tsang was the person who prepared the relevant documentation and proceeded with the administrative matters for execution. Hence, the defendant say that their complaints and objections would be ignored if the plaintiff continued to be chairman.

156.  Fourthly, the defendants disagree with the plaintiff’s contention that at the time of the first letter, they knew or ought to have known that the government subsidy had been received by the IO. 

157.  The government subsidy was granted in stages and only upon certain energy saving requirements being met.  There was therefore no guarantee at the beginning of the project that the subsidy would be paid.  The IO had to, and did, make an upfront payment itself.  The members of the committee in fact did not know exactly when the subsidy was actually received from the government.  It was for Holake to report on the completion of the project.  The Income Statements, now relied on by the plaintiff, was not even signed.  The other document relied on, namely the auditors’ report for the year ended 31 May 2015, was only completed on 21 April 2016. 

158.  Based on the above, Ms Fong submitted in closing that at the time of the first letter, the defendants had no knowledge of the receipt of the government subsidy.  The plaintiff’s contention in this regard is an attempt to cover up or cloud the illegality of the plaintiff’s act of not seeking the owners’ approval of the project.  Hence, the allegation that “升降機，一擲伍拾多萬元更改裝備” in the first letter was true.  The defendants honestly believed in them when the letter was issued.

159.  Fifthly, as to whether the electricity expenses were saved due to the project, the defendants say that there is no direct evidence in support of this.  Even if there was any saving, it could have been caused by the arrangement approved in the 8^th meeting of the 14^th term held on 13 July 2015 that two lifts would be suspended during night time.  Para (二) (4)(a) of the minutes read:-

“會議通過，為加強大廈保安及節約能源，晚上8時至翌日早上7時暫停2部貨使用。管理處諮詢升降機保養商意見，出通告通知業戶，由2015年8月1日起實施。”

160.  Notwithstanding the above, among the benefits alleged by the plaintiff, the 4^th defendant accepted that after the improvement works, the lift floor in fact levelled with the building floor a little better than before.

LED replacement

161.  In the first letter, the defendants wrote: “主席好大喜功，未知效益，祇求想像、花費數以拾萬元，將全幢大廈可用光管全部更換”.   

162.  Their primary discontent was that the plaintiff proceeded to have the LED light tubes in the entire Building replaced in one go. 

163.  This was contrary to the earlier resolution passed in the 2^nd meeting of the 13^th term held on 22 July 2011.  Para (二)(2) of the minutes read:-

“更換節能光管事宜

為進一步節約能源，減省電費支出。主席提議更換節能光管，聯絡「陽光照明有限公司」提供T5節能光管轉換支架系列報價（每支35元），更換後可節省30%電力。委員討論後一致通過，全廈照明光管更換為T5節能光管轉換支架系列。分四階段續步更換，以便觀察節能效益。” (underline added)

164.  It had clearly been contemplated that the replacement should be carried out in stages so that the effect and quality of the new tubes could be observed and monitored.  In any event, it would accord with common sense that the tubes should be replaced in phases. 

165.  Furthermore, the wholesale replacement was contrary to the usual practice in the Building that the light tubes would be replaced one by one as and when one failed to function.  The 2^nd defendant described this in his oral testimony as “壞一枝換一枝”.

166.  The second area of discontent about the project was that the number of light tubes paid for by the IO did not match with the number actually installed.  Up till now, the defendants could not find the surplus light tubes.

167.  Thirdly, the defendants do not accept that there was any energy saving from the new light tubes.  The plaintiff has failed to produce any documentary evidence on the alleged actual savings.

168.  The defendants say that the minutes of the 5^th meeting of the 14^th term held on 15 September 2014, relied on by the plaintiff, was ambiguous and was open to different interpretations.  Although it was expressly resolved that the project be undertaken by an outside contractor, the resolution did not go on to say expressly whether the light tubes should be replaced in one go or in stages.  At that time, the defendants did not pay attention to such details.  And, in light of all the above circumstances, at the time of the first letter, they honestly believed that by replacing all the LED light tubes in the Building in one go, the plaintiff had spent too much on the LED replacement project without knowing whether the benefits, if any, would outweigh the expenses (“好大喜功，未知效益，祇求想像”).

169.  Fourthly, the defendants have strong objection to how the plaintiff had sourced the LED light tubes, ie through Youthful Technology:-

(a)  The management committee did not resolve that the plaintiff or Youthful Technology would purchase the LED light tubes.

(b)  There was no reason to source it through Youthful Technology, it being a cosmetics company.  One legitimately would ask – why didn’t the plaintiff buy directly from an LED supplier?

(c)  The plaintiff did not declare his interest in the purchase to the management committee in the process, when he ought to have done so.  He was clearly involved in a conflict of interest.

(d)  Such conduct of the plaintiff reasonably arouse suspicion and is a breach of the Code of Conduct under the Building Management Ordinance.

(e)  The 2^nd defendant went further and made the allegation of forged document against the plaintiff and Tsang – see para 49 above.

Ground floor toilet renovation

170.  The defendants contend that the plaintiff had overspent unnecessarily on the ground floor toilet which is primarily used by the staff (“豪裝一個管理員工專用廁所”) for no benefit.  They have a number of complaints about the renovation project.

171.  The background to it was that there is a male toilet on the upper floor.  It underwent refurbishment in 2012 at a cost of about $60,000.  The renovation was considered to be satisfactory – see the minutes of the 5^th meeting of the 13^th term held on 14 June 2012, para (一)(4): “效果滿意”.  There was one toilet on the ground floor, which was divided into male and female toilets.  The defendants say that the ground floor toilet is primarily used by the staff.  The owners all have toilets located within their own units.  Also, the ground floor toilet was tucked away and not used by the public or visitors to the Building.  That was why they stated in the first letter that the toilet was for staff use.

172.  Their first area of discontent is that the defendants had not been aware that there was going to be an interchange of the male and female toilets.  This was not mentioned in the first resolution.  Even in the second resolution, the defendants complain that the interchange was only mentioned in the table but not the heading.  The drafting appeared to be “ambiguous and sneaky”.  This casts doubt on the credibility of the author of the document.

173.  Secondly, the defendants complain that by the time the project was put before the management committee for approval, part payment had already been made and the project had already been in progress.

174.  There were two resolutions passed in respect of the renovation of the ground floor toilets – see paras 57 to 58 above.  I shall refer to them as the “first” and “second” resolutions in this section.

175.  According to the first resolution, Chung was tasked with following up on the project. However, before the second resolution, a cheque in the sum of $56,000 payable to the contractor had been prepared by Tsang and signed by the plaintiff on 22 September 2015.  The defendants rely on (a) an invoice dated 21 September issued by the contractor for that sum, which represented 40% of the total fee, (b) a voucher dated 22 September for that sum approved by the plaintiff, and (c) the cheque dated the same date. 

176.  Thus, payment had preceded the second resolution of the management committee.

177.  Further, according to the defendants’ oral testimony, during the second meeting, members were invited to go downstairs to inspect the toilet and they found that the works were already under way and almost completed.  In the circumstances, there was simply no room for the defendants to raise any objection at that stage.  The 1^st defendant described the plaintiff’s conduct as “先斬後奏” in his supplemental witness statement.

178.  The third area of discontent lies in the fact that the project was costly and the interchange did not bring about any real benefit.  It cost much more than the renovation of the upper floor toilet.  Further, the costs exceeded $200,000 and should require an owners’ resolution.  However, the plaintiff chose to treat the renovation of the male and female toilets as two projects, each under the limit of $200,000, thus getting round the requirement.  This casts doubt on his credibility.

179.  In respect of the project, Ms Fong submitted in writing as follows:-

“The Defendants believe if Yu [ie the plaintiff] condone Tsang’s act, much acts and information can bypass the Committee members. Tsang can do anything against the instruction of the other Committee members, shifting responsibilities, getting credits such as raise, but would hide if trouble.”

180.  For the above reasons, at the time of the first letter, the defendants honestly believed that the plaintiff had spent unnecessarily and lavishly on the ground floor toilet renovation which brought no real benefit to the owners.

Floor painting

181.  In respect of the floor painting project, the defendants’ grievances against the plaintiff concern two matters.  First, the plaintiff endorsed in the painting of all the floors without proper committee resolution.  Second, he caused to purchase too much paint before the trial result, thus causing wastage of the IO’s funds. 

182.  In his witness statement, the 1^st defendant said:-

“余先生於十三屆某一次會提出將全幢大廈走廊及電梯大堂地下油上有色漆油，改變走廊形象。本人及其他委員反對，理由是：第一此乃工業大廈，並非商貿大廈，每日生產貨品龐大，各類運輸貨物每每以噸數來回輾轉，油漆無法承受，對大廈沒有效益；第二因地面凹凸不平，有些甚至鋼筋外露，根本無法油漆。但在余先生作為主席一意孤行下，會議通過選一層作為試點，余先生竟一次過買來十六層所需漆油，後來試驗失敗；大批漆油變為法團的危險負擔，經各委員商議，以折扣賣回漆油商。” (underline added)

183.  This was supported by the 2^nd defendant’s evidence in his witness statement.

184.  The discussion referred to at the end of the above written testimony took place at the special meeting held by the management committee on 5 April 2012 in a restaurant.  Among those in attendance were the 1^st, 2^nd and 4^th defendants and Ng, the secretary.  Tsang was also present.  Before the meeting, Ng had invited the plaintiff to attend the special meeting to discuss the paint issue.  Yu did not attend as he did not have time.  The meeting was urgently convened to deal with the paint which was purchased when no consensus had yet been reached on the detailed arrangement concerning, eg, whether the staff of the Building should execute the work and the insurance issues.  Since there was no proper storage space for the inflammable materials, it was resolved that the paint be returned to the supplier at a 10% discount, plus transportation cost.

185.  The defendants rely on the minutes of the meeting dated 11 June 2012 and signed by the 1^st defendant.  They say the minutes accurately reflected the discussion which had taken place:-

“…… 由於在上次會議上對整個工程費用、工資問題、保險價格及責任賠償等事項仍未得到大家共識，而管理處已購備了部份油漆、天拿水及工具等用品，特此急需召集各委員共商處此事。

會議上，負責跟進此工程張祥先生表示，對管理處購入油漆及工具準備開工毫不知情，對此做法覺得突然，…。在以上種種問題未解決下，加上法團未有適當地方儲存此等危險品，故出席委員在表決下一致決定擱置此工程，並以九折折讓價，及補150元運費將貨品退回供應商。”

186.  Upon learning of the decision two days later, the plaintiff accepted it and did not raise any objection. 

187.  This reflects that he was not co-operating with the committee members.  He did not attend meetings which were not initiated by him.  He would not even try to re-fix a date so as to the attend the meeting.  Even in cross-examination, he insisted that it was just a tea gathering and even alleged that the minutes might be a forged document.

188.  In cross-examination, Tsang said she did not consider that the gathering at the restaurant to be a proper committee meeting as it was called by telephone without any agenda.  Ng asked her to join and she therefore joined.

Parking issues

189.  The defendants say that there had always been parking issues, including double parking.  This means that two cars were parked in one carpark space.  This caused inconvenience to others and blocked traffic.

190.  In his oral testimony, the plaintiff said that Tsang had previously allowed government car to park in the private space of Wong Kim Ping and charged parking fees for that.  The defendants say it was a trespass of an owner’s private property.  Ms Fong submitted that this shows that the plaintiff “condone or work in concert with Tsang despite knowing it is illegal to trespass”.

191.  Further, the 1^st defendant said that certain members who supported the plaintiff were given special favours.  Notwithstanding their double or improper parking, Tsang turned a blind eye to that. 

192.  For the above reasons, the defendants believed that the plaintiff had condoned Tsang’s mismanagement of the carpark.  They believed that the words “縱容委員違規泊車，管理處職員欠缺管理” were true at the time of the first letter.

Outstanding management fees

193.  After the 6^th meeting of the 14^th term held on 9 December 2014, there was no further report on the outstanding management fees owing by the defaulting owner.  The 1^st defendant said that after the payment of $42,000, that defaulting owner made no further payment.  There was no discussion about the overdue fees at all in the whole year of 2015.

194.  It can be inferred that Tsang was not performing her duties as she had failed to follow up on the long and mounting overdue management fees of that owner. Neither the plaintiff nor Tsang put up this topic for discussion in subsequent meetings.  As head of the management office, she did not take active steps to address the problem.  Therefore, the defendants had reason to believe that the plaintiff had condoned Tsang’s omission.  It also shows that Tsang would only take instructions from the plaintiff.

195.  Ms Fong submitted that the evidence before the court confirms that the total outstanding fees were about $180,000 as of September 2015 and about $200,000 as of November 2015.

Adjustment of management fees, carpark rent and staff salaries

196.  In the first letter, the defendants said that the plaintiff’s performance was to be contrasted with the former chairman, Wong Yu San.  While Wong was chairman, there was no increase in the management fees and the IO always maintained a sizable surplus funds.  While the plaintiff was chairman in the 13^th and 14 term, the management fees were increased twice, together with increase in carpark rents etc.  The IO’s fund had been decreasing.  It was their honest belief that if the plaintiff continued to be chairman, the IO’s funds would be further depleted thus increasing the financial burden of the owners.

Recovery of the charging system of the carpark

197.  The defendants’ complaint was that shortly after the general election in January 2016, the plaintiff demanded the IO to return the charging systems at the carpark and the management office.  This had made it difficult for the new management committee to function properly. 

Many members of the management committee were dissatisfied with the performance of the plaintiff

198.  In the first letter, the defendants wrote: “縱容管理處主管權力獨大，對各業主訴求推三檔四、好事領功，出事就閃，使很多業主對其表現非常不滿”.

199.  The defendants say that the various incidents and projects discussed above show that to be the case.  Tsang was the key person to prepare cheques, minutes of meetings and the management of the day-to-day activities of the Building.  She had been performing her job in many improper ways.  She had not listened to the instructions of the members of the management committee.  If the plaintiff had not condoned her act, Tsang, as an employee, would not have dared to behave in that way. 

200.  In his witness statement, the 1^st defendant said that towards the end of the 13^th term, the plaintiff had not been receptive to different opinions.  At the beginning of the 14^th term, two members, namely Wong Kim Ping and Ng resigned as a result.  Many members expressed their dissatisfaction with the plaintiff.  The 2^nd defendant said the same in his witness statement.  In his supplemental witness statement, he further elaborated that the paint incident was the trigger for Ng’s resignation.  For Wong Kim Ping, he was dissatisfied with how the plaintiff had handled the parking issue.  Wong made complaints to the plaintiff but the plaintiff ignored them.

201.  In his own supplemental statement, Ng explained that he sold his unit in the Building in 2012 but was still a tenant of another unit.     Because of that, in the 6^th meeting of the 13^th term, the plaintiff requested that he resign and deliver up the seals (used for cheques).  Ng took the view that a non-owner could take up the position of secretary according to the Building Management Ordinance and indicated that he would remain in office just for a few more months as the 13^th term was coming to an end. However, his offer was rejected.  In the end, Ng resigned as secretary.

202.  Therefore, it shows that the defendants honestly believed what they had written in the first letter concerning the management office, the plaintiff’s mismanagement and the dissatisfaction of many committee members.

Events leading to the Original Owners’ Meeting: the proxy forms pre-printed with the plaintiff’s name

203.  In the first letter, the 1^st to 4^th defendants wrote, “這次選舉可能是歷屆選舉中最激烈、最黑暗、最卑劣的選舉，有人無所不用其極，運用權力，以偷步封殺的不法行為，指使管理處作為其個人競選總部，更未公佈參選名單前，偷步印製余壽寧先生競選授權書進行非法拉票，誤導業主，以為一人參選，對另一參選者王雲强先生極不公平。”.

204.  The defendants take great issue with Tsang’s preparation of the proxy forms pre-printed with the plaintiff’s name.  They say that it was an unfair practice and created a misleading impression in the minds of the owners that there was only one candidate running for chairman.  This was an improper means to obtain votes.  One such example was the proxy form signed by Cheng Hau Yuk.  Cheng signed a letter dated 13 June 2016 stating that Tsang visited her on one occasion and asked her to sign on a proxy form pre-printed with the plaintiff’s name.  It was only later on that she found out that the 1^st defendant was also running.  She therefore felt that she had been misled by Tsang into thinking that the plaintiff was the only candidate.

205.  The practice was also improper as Tsang, as an employee, must take a neutral stance in the election.  The resources of the management office should not be used to promote any one particular candidate.

206.  The defendants submit that the comparison with the use of pre-printed proxy forms in past elections is not meaningful.  This is because there were no competing candidates in the past.  Hence the use of pre-printed proxies would not pose any problem.

207.  Hence, the plaintiff would gain an unfair advantage over other candidates by reason of the preparation of the proxy forms pre-printed with his name.  All candidates must have the same starting point and such proxy forms should only be prepared after the enrolment period for candidates was closed.

208.  According to the notice to the owners regarding the general election of the 15^th term, the deadline for both the candidates and the submission of proxy forms fell on the same date.  It therefore followed that it would not be possible for the management office to prepare proxy forms only after the enrolment period was closed.  On this point, the 2^nd defendant said that he was unaware of the overlapping deadlines and had overlooked it when the notice was posted on the notice boards.   But that was an oversight.  It does not detract from the fact that the defendants honestly believed that by those pre-printed forms, the plaintiff was allowed to “jump the queue” thus gaining an unfair advantage over the other candidate, and, further, that the management office had acted improperly in this regard.

209.  Their belief can further be supported by the fact that after learning of the unfair practice, the 4^th defendant made a report to the police about it.

The Original Owners’ Meeting

210.  In the second letter, the 2^nd defendant complained that at the Original Owners’ Meeting, strangers were taking pictures of the 2^nd defendant and other owners.  This caused alarm and intimidation upon the 2^nd defendant. 

211.  Ms Fong asked why the plaintiff’s company needed to appoint three men as proxies and why they took pictures of the owners at the meeting.  They actually left the meeting when questioned by the owners.  Why would they do so?  The 2^nd defendant genuinely felt frightened at the meeting.  It was his subjective state of mind and that was what he expressed in the second letter.

212.  The general election did not take place as scheduled at the Original Owners’ Meeting.  It was postponed.  All the proxy forms were sealed and not used. 

213.  In Tsang’s cross-examination, it was revealed that she had not prepared any minutes for the Original Owners’ Meeting.  There was no good explanation for that.  The defendants say that one may infer that the plaintiff and Tsang had something to hide.  It can also be inferred that the election was postponed due to suspected improper or illegal pre-printed proxy forms.

After the Original Owners’ Meeting: the plaintiff’s demand letters

214.  After the Original Owners’ Meeting, on 27 November 2015, the 2^nd defendant received the demand letter from the plaintiff threatening legal action against him.  The 2^nd defendant believed that the plaintiff’s motive was to intimidate him, forcing him to shut up and stop revealing his mismanagement and improper conduct. 

215.  It was against the backdrop of what happened at and immediately after the Original Owners’ Meeting that the 2^nd defendant issued the second letter.

216.  In his supplemental witness statement, the 2^nd defendant said he recalled a conversation with the plaintiff in which the plaintiff said that he knew many people, “both black and white”.  The 2^nd defendant considered that he ought to share with the owners the plaintiff’s improper conduct so that they could exercise their own judgment as to how to vote.

217.  The 2^nd defendant’s written evidence is as follows:-

“本人也記得原告向我說，他認識很多人，黑白道，要他們招付些人，除時都得，基於原告以上不恰當行為，我覺得其他業主該知道原告對我有如上行為和我本人的感受，所以我如實公報，其他業主可自行判斷怎投票。”

218.  However, in cross-examination, the 2^nd defendant changed his evidence. Instead, he said that it was in fact another owner who told him about the plaintiff knowing many people, “both black and white”. 

The Adjourned Owners’ Meeting

219.  In the amended defence, it is pleaded that the plaintiff had admitted the contents of the first and second letters in the Adjourned Owners’ Meeting and the plaintiff openly admitted his wrongdoing.  He said: “對於大家提出我嘅過錯，我向大家道歉，而有關主管嘅事我一力承擔。”

220.  In their witness statements, the defendants recounted the apology given by the plaintiff as follows.  They expressly said that the plaintiff was apologising for his wrongdoing while he was in office.  Their written evidence in this regard is identical:-

“在一輪擾攘之後余先生就他在任時所犯既錯誤，向眾業主鞠躬道歉，並公開表示他自己一力承擔。所以，由於余先生公開承認他的錯誤，還向眾業主鞠躬道歉，這足以證明委員剖白書的內容並非誹謗余先生。” (underline added)

221.  In his supplemental witness statement, the 3^rd defendant added:-

“本人明確聽到原告在會議上確有表示道歉之意，類似內容如下，就大家批評他的過失，他全部承認以及承擔過失，並且鞠躬道歉。”

The tape recording of the Adjourned Owners’ Meeting

222.  In the amended defence, it is pleaded that the plaintiff’s admission of his wrongdoing as spelt out in the first letter was “once on tape recordings but were erased while the tape recordings were in the possession of the Plaintiff and [Tsang]”.

223.  In his supplemental witness statement, the 1^st defendant said:-

“但後期我們聽回錄音，發現部分錄音沒有了。”

224.  Ms Fong submitted that despite the 1^st defendant’s complaint about the blank parts, Tsang did nothing.  She did not even check the tape to see if there were indeed any blank parts.  Her act was certainly suspicious.

225.  When the minutes of the Adjourned Owners’ Meeting was posted on the notice boards (ie the version relied on by the plaintiff), the defendants found out that there were some mistakes and requested the plaintiff to correct them.  However, he refused.  The defendants therefore came up with the amended minutes.  That would be the version which they disclosed in this action.  But the plaintiff refused to sign.  In that version, it was recorded that the plaintiff had apologised for, among other things, the carrying out of the lift improvement project without the approval of an owners’ meeting.

Summary of the defendants’ case

226.  In summary, the defendants contend that the two letters were issued to the owners of the Building only.  The communication was made for the interest of the owners of the Building for the purpose of the election of the management committee of the 15^th term.  They honestly believed the statements made in the letters were true.  They saw it as their duty to disclose to, and share with, all the owners information which were pertinent for them to decide who to vote for as the new chairman in the 15^th term.  Such pertinent information included the character of the plaintiff, how he had discharged his duty as chairman during his tenure and how he had managed the staff of the management office.  This was the dominant motive of the defendants when issuing the letters.  Hence, the plaintiff has failed to show malice on the defendants’ part.

THE EVIDENCE

227.  The plaintiff and the defendants have put forward conflicting versions of events.  The disputes span over the management style of the plaintiff in general, the various projects which had been undertaken in the Building in the 13^th and 14^th term of the management committee and, importantly, the defendants’ subjective state of mind as to the truth of the allegations made in the first and second letters at the time they were issued.  The factual disputes need to be resolved as the issue of malice would turn on the answers to them.

228.  The resolution of the factual disputes primarily turns on the credibility of the witnesses.  My task is to evaluate the competing evidence against the backdrop of undisputed and indisputable facts.  I am to weigh the inherent probabilities of the parties’ cases.  Contemporaneous documents should be given due weight in the assessment exercise.  The internal consistency (or inconsistency) of the witnesses’ evidence should be taken into account.  The court would also be guided by its overall impression of the characters and motivations of the witnesses: see, eg, Re B (Children) [2009] 1 AC 11, para 31, cited in Standard Chartered Bank v Li Wai Ping HCA 10587/2000 and 3573/2003, 17 February 2011, para 19; Big Island Construction (HK) Ltd v Wu Yi Development Co Ltd HCA 1957/2005, 28 July 2011, paras 23-25.

229.  Mr Ng highlighted two general points.  First, where there exists a wealth of contemporaneous documents, the credibility of the witnesses is to be tested by reference most particularly to them: Esquire (Electronics) Ltd v Hongkong and Shanghai Banking Corporation Ltd [2007] 3 HKLRD 439, para 158. Secondly, the court will have to be alert to the contradictions and inconsistencies between the oral testimony and the witness statement of a witness.  The internal inconsistency of a witness’ evidence is often tested by a comparison between the witness’ oral testimony and his witness statement: Hui Cheung Fai v Daiwa Development Ltd HCA 1734/2009, 8 April 2014, para 79. 

230.  On the whole, I find that the plaintiff’s evidence is more credible than the defendants’.  I consider that the following matters are material considerations in the evaluation exercise.

First, the plaintiff’s case is on the whole coherent, inherently plausible, consistent and supported by contemporaneous documents

231.  The plaintiff’s case is on the whole coherent, inherently plausible and generally consistent throughout these proceedings, with no material discrepancies in his evidence.  More notably, his case is supported by contemporaneous documents in the form of the minutes of the management committee meetings held in its 13^th and 14^th term.

232.  One of the key planks of the plaintiff’s case is that the various projects carried out at the Building and other management matters were approved by the management committee as a whole.  It was therefore wrong for the defendants to allege or suggest in the first letter that it was him who had caused these projects to be carried out.  It was wrong because the management committee had passed unanimous resolutions in respect of the projects and the defendants knew about the resolutions since they, or at least some of them, were present at the various meetings in which these resolutions were passed.

233.  It is not necessary for me to recount the incidents here.  I have set out the plaintiff’s case in detail and reproduce the relevant extracts of the minutes above.  The contemporaneous documents really speak for themselves.

234.  In addition, the key witnesses, namely the plaintiff and Tsang, testified in a calm, straightforward, and matter-of-fact manner.  Their written and oral evidence is on the whole consistent. 

235.  Within the plaintiff’s case, in respect of the lift improvement project and the ground floor toilet renovation project, the submissions made on behalf of the defendants need to be reflected on with care. 

236.  As regards the lift improvement project, there is an apparent discrepancy between the second and third resolutions.  The former resolved that an owners’ meeting be prepared and the project be put to a resolution.  The latter, however, resolved to approve to appoint Holake to carry out the project.  The owners’ resolution previously contemplated was not mentioned.  Instead, a briefing session for the owners was proposed to be held.  The obvious question which comes to mind is this – why wasn’t there an owners’ meeting for approving the project, as contemplated?  That is in fact the crux of the defendants’ complaint about this project.

237.  As regards the ground floor toilet renovation, there is also an apparent gap in the flow of events, as disclosed on the face of the first and second resolutions.  The former resolved to obtain quotations from contractors and appoint Chung to follow up.  The latter, however, revealed that the project had already commenced.  Contemporaneous documents in the form of payment voucher and cheque also show that part payment had been made before the second resolution.  The obvious question is – why wasn’t there a proper resolution to approve the project before the work commenced?

238.  Nonetheless, for the two projects in question, the objective fact remains that the minutes do show that the management committee passed the resolutions unanimously.  Furthermore, for the lift project, the plaintiff explained that Holake was in charge of the project and its advice was that an owners’ meeting was not necessary.  This explanation is on its face plausible.

239.  When the plaintiff’s case is taken as a whole, it is on its own credible.

Secondly, the defendants’ evidence is rife with inconsistencies and their case is at times incoherent

240.  By comparison, the defendants’ evidence is rife with inconsistencies and, worse still, internal contradictions.  None of them were able to put forward any good explanation to account for these inconsistencies and contradictions.  They are so prevalent and are of such a serious degree that I do not find it possible to give weight to their evidence.

241.  As is clear from the recount of the parties’ respective cases, the defendants’ case contradicts and is inconsistent with the minutes of the management committee meetings.  A general theme running through the defence is that some of these minutes are inaccurate or did not fully reflect the discussion which took place at the meetings, including, more specifically, the views expressed by members which were different or in opposition to the plaintiff’s.  In cross-examination, the defendants did make the point on a few occasions that since they participated in these management committee meetings on a wholly voluntary basis, they would not devote too much time to review or follow up on the minutes.  And that partly explains, they say, why they did not take issue with, or raise objection to, those inaccurate minutes.  (They also suggested that since the plaintiff would not listen, it would be useless to do so.)

242.  That explanation, on its own, is inherently plausible and, as a matter of analysis, should not be dismissed out of hand.  This is because it is an objective fact that members of the management committee worked in such capacity voluntarily, devoting their own time without any monetary compensation.  The fact that the defendants did not always follow up on the minutes is perhaps understandable. If that explanation is accepted, the discrepancies between the defendants’ testimony and what were recorded in the minutes can be accounted for.

243.  However, what remains inexplicable is that the inaccuracies, now so forcefully alleged by the defendants while testifying in the witness box, were not mentioned in their written witness statements.  This is so even when some of the minutes were exhibited to their own witness statements.  For example, the 2^nd defendant exhibited the minutes of the following meetings: the 4^th meeting of the 13^th term and the 5^th and 8^th meetings of the 14^th term.

244.  If the defendants truthfully believed that there were inaccuracies in the minutes, one would expect them to at least point them out when those minutes were exhibited to their written statements.  After all, the minutes are important contemporaneous documents which the court would take into account when resolving the material factual disputes between the parties.  The defendants were all silent in their written statements about the inaccuracies in the minutes.  This seriously undermines the credibility of their present allegation that the minutes were inaccurate.

245.  Furthermore, the defendants’ evidence is tainted with inconsistencies, discrepancies and at times contradictions.  I set out below some of the more notable examples in respect of each of the defendants.

246.  As regards the 1^st defendant, his testimony concerning the floor paint incident contained perhaps one of the most glaring contradictions in his evidence.  In his witness statement, he expressly said that (a) in a management committee meeting, the plaintiff proposed that the floors of the entire building be re-painted; (b) at that meeting, the 1^st defendant and some other members objected as this would not bring about any benefit; (c) nonetheless, because of the plaintiff’s insistence, it was resolved that one floor be re-painted as a test; (d) the result was not satisfactory but the plaintiff had already purchased enough paint to re-paint all 16 floors; and, (e) in the end, the paint had to be returned to the supplier at a discount.  (The original extract in Chinese appears in para 182 above.)

247.  This narrative contains a detailed account of the alleged wrongdoing of the plaintiff and why the 1^st defendant felt aggrieved by the plaintiff’s improper action.  However, this account is flatly contradicted by the minutes of the 4^th meeting of the 13^th term held on 16 March 2012.  The extract of the minutes is set out in para 67 above.  It showed that the committee discussed this topic at some length, with members sharing their different views on the matter.  Contrary to the 1^st defendant’s version, the plaintiff suggested that the second and fourth floors be tried out first and it was indeed the 3^rd defendant who counter-suggested that in fairness, the whole Building should be re-painted. 

248.  When this contradiction was put to the 1^st defendant, he then changed his answer and said that he once came across the plaintiff in the lobby or the lift of the Building and that was when the plaintiff proposed that the floors of the whole building be re-painted.  He then added that there was a subsequent meeting in which this was raised by the plaintiff.  But the subsequent minutes did not show such discussion.

249.  In any event, the resolution referred to in the 1^st defendant’s witness statement is nowhere to be found in any of the minutes disclosed in this action.  When asked about this, he simply said he did not know why. 

250.  Counsel then asked him whether his written evidence in this regard, namely that there was a resolution to try out one floor only, was untrue.  The 1^st defendant denied that to be the case.

251.  In my view, there is simply no explanation for the contradiction.  The 1^st defendant put forward a positive case in detail in his witness statement, which is irreconcilable with the detailed records made in the contemporaneous minutes.  The 1^st defendant’s evidence then shifted incoherently.  All these cast a very negative light on the reliability and credibility of his evidence.

252.  Another notable example is his evidence in his witness statement that since the end of the 13^th term, the plaintiff had not listened to different views of others and at the beginning of the 14^th term, two dissatisfied members resigned.  One of them was Wong Kim Ping.

253.  However, the background fact is that Wong Kim Ping did not even stand to run as a member for the 14^th term.  It is clear that the 1^st defendant’s witness statement contained a factual error.

254.  When the error was pointed out to him, the 1^st defendant then said that Wong Kim Ping resigned at the end of the 13^th term. 

255.  It is true that this error was not as serious as the one concerning the floor painting.  Yet, this kind of error does contribute to the overall impression that his evidence cannot stand up to scrutiny.

256.  The 2^nd defendant’s evidence is probably in the worst shape among the four of the defendants in terms of reliability and credibility.  There were more inconsistencies within his evidence than in the other defendants’. 

257.  In his witness statement, he made the same (and wrong) allegation about the resignation of Wong Kim Ping at the beginning of the 14^th term as in the 1^st defendant’s witness statement.  In cross-examination, instead of frankly accepting that he had made a factual error, the 2^nd defendant insisted that although Wong Kim Ping did not run for the 14^th term, the 2^nd defendant felt, as a matter of perception, that Wong Kim Ping did resign.  This reaction is incomprehensible and goes to cast doubt on the overall reliability of his testimony.

258.  Stranger still, the 2^nd defendant alleged in his witness statement that the 3^rd defendant resigned as the treasurer of the 14^th term.  However, it is not in dispute that the 3^rd defendant was only a member, not the treasurer, in the 14^th term.  Hence it would not be possible for him to resign as treasurer. In fact, in the 3^rd defendant’s cross-examination (which preceded the 2^nd defendant’s), the 3^rd defendant admitted as much.  When these were pointed out to the 2^nd defendant, he refused to accept all these and even claimed that the 3^rd defendant was confused on the issue and the 2^nd defendant had a better idea.  As a matter of common sense, this allegation must be rejected.  It also shows that the 2^nd defendant would insist on the truth of statements which had been clearly proved wrong.  This has made it difficult for the court to give weight to his testimony in general.

259.  In his witness statement, the 2^nd defendant also made the same allegation concerning what had been discussed and resolved with regard to floor painting at a management committee meeting.  In cross-examination, he was first shown the minutes of the 4^th meeting of the 13^th term held on 16 March 2012 which contained the relevant resolution.  The 2^nd defendant reiterated what he said in the witness statement, namely that he, together with some other members, had objected to re-painting all the floors.  It was then pointed out to him that he was absent at that meeting, as shown in the attendance list in the minutes.  He was of course then challenged on the issue of how he could possibly have objected if he was not present at the meeting.  He then claimed that there should be another meeting in which he raised the objection.  He was indeed very sure that he was present at the meeting in which the issue of floor painting was discussed.  Overall, his evidence on this point was inconsistent and incoherent.

260.  His evidence on floor painting suffered from the same inconsistency as the 1^st defendant’s evidence when it comes to the allegation that the plaintiff had proposed that all the floors be re-painted when the minutes showed that he proposed to re-paint only two floors.  The second defendant’s explanation for the inconsistency was different from the 1^st defendant’s.  He insisted that the two versions were effectively the same.  This explanation was perplexing in the extreme and must be rejected as untrue.

261.  The 2^nd defendant’s evidence in respect of the contents of the resolution regarding the LED replacement project was also self-contradictory. In his witness statement, he stated that it had been resolved that all the LED light tubes be replaced.  However, in cross-examination, he said instead that it had been resolved that the light tubes would be replaced only when broken. 

262.  Here, the evidence relates to what had been resolved at the meeting.  It is a purely factual matter.  Yet, the 2^nd defendant put forward contradicting versions in his written and oral evidence.  When the contradiction was put to him, he gave evasive and incoherent replies. 

263.  When a witness signs a witness statement, he also signs a statement declaring the truth of its content.  Oral evidence at court is given under oath.  At one point in the 2^nd defendant’s oral testimony, having gone through some apparent inconsistencies in his evidence, Mr Ng pointed out to him the statement of truth which he had signed.  The 2^nd defendant said that he considered the statement of truth to be a minor matter and that he was not good with words.

264.  Overall speaking, the 2^nd defendant gave the distinct impression to the court that the truth or accuracy of his evidence was not a prime concern for him as a witness.  As such, it is simply not possible to give much weight to his evidence.

265.  The 3^rd defendant made a number of new allegations for the first time in cross-examination.  For instance, he claimed that the plaintiff had threatened to sue the other members of the management committee at meetings if they said anything improper.  This allegation, if true, would corroborate the defendants’ stance that the plaintiff adopted a unilateral management style as chairman of the management committee.  In other words, it would be a strong piece of evidence which one would expect the 3^rd defendant to put into his witness statement.  The fact that he did not begs the question as to whether it was something that he made up in the witness box.

266.  Mr Ng submitted that the 3^rd defendant had failed to address a number of issues in his witness statements, eg, in relation to the lift improvement project and the floor painting issue, and only gave evidence on those issues for the first time when cross-examined.  When asked why he failed to address the issues in his witness statement, he alleged that he did not want to waste time in writing a long witness statement.  This explanation was puzzling as it must have been clear to the 3^rd defendant that the purpose of the witness statement was to lay out all relevant and material facts before the court.  And if it would add length to the witness statement, that would still have to be done.  His explanation was unconvincing.

267.  The 4^th defendant is in his early 80’s and is the eldest among the defendants.  When assessing his evidence, some allowance may need to be given in the sense that the inaccuracies or discrepancies in his evidence may be partly accounted for by his old age.  Nonetheless, even bearing that in mind, I consider that not much weight can safely be given to his evidence.

268.  In his witness statement, he stated that he was educated up to secondary school level and can read and write Chinese.  However, at the beginning of the cross-examination, he said that that statement was false and that he had never studied at school.  The mistake is not understandable.  One must wonder why a fundamental mistake like that could have been made and one would naturally then wonder how reliable the rest of the witness statement could be.

269.  A more substantive example which illustrates the unreliability of the 4^th defendant’s evidence is his stance on the Adjourned Owners’ Meeting.

270.  In his witness statement, he stated that he was present at that meeting, three matters were discussed and the plaintiff apologised for his wrongdoing while he was chairman.  The original extract in Chinese appears in para 220 above.

271.  This topic was explored in his cross-examination.  Contrary to his unequivocal allegation in the witness statement, he said that he could not even remember whether he in fact had attended the Adjourned Owners’ Meeting and he could not recall what had happened at that meeting.  He later added that due to the long lapse of time, he had no clear recollection but someone might have told him about the meeting. 

272.  On the whole, the defendants’ evidence is so tainted with inconsistencies, discrepancies and contradictions that its reliability and credibility is severely undermined.

Findings of facts

273.  For the above reasons, I prefer the plaintiff’s evidence to the defendants’ where they are in conflict or are inconsistent and I reject such part of the defendants’ evidence accordingly.  I accept the plaintiff’s factual case, as set out above, on the whole.

274.  More specifically, I find that the allegations made in the first letter concerning the various projects carried out in the Building and the management issues arising in the 13^th and 14^th term of the management committee were untrue.  These allegations are set out in paras 31, 44, 55, 71, 75, 82 and 88 above.  I find that the minutes of the meetings of the management committee disclosed in this action and relied on by the plaintiff are accurate records of the meetings.  As shown in these minutes, the projects and the managements issues, which the defendants complained about, were discussed at the meetings.  Resolutions were passed by the management committee as a whole, as recorded in the minutes.  I accept the plaintiff’s evidence and find that throughout the two terms and before the publication of the first letter, the defendants had never raised those complaints which they made in the first letter.   I also find that the allegations made in the first letter concerning the plaintiff’s conduct in the election were untrue.  The allegations are set out in paras 92 and 93 above.

275.  I further find that the defendants did not honestly believe in the allegations or were reckless as to their truth at the time of the first letter.  They, or at least some of them, had participated in the meetings in which the projects and the management issues were discussed and the relevant resolutions were passed.  They therefore could not have honestly believed that the allegations were true or they did not care whether they were true or not but nonetheless went ahead to make them.

276.  As regards the allegations made in the second letter, I find that the allegations concerning the events which took place at the Original Owners’ Meeting and the other allegations against the plaintiff were untrue.  I further find that the 2^nd defendant did not honestly believe in the allegations or was reckless as to their truth at the time when he issued the second letter.  I accept the plaintiff’s case set out in paras 100 1o 110 above.

277.  As regards the various allegations made against the plaintiff by the defendants in the course of these proceedings, I reject those allegations.  See, eg, the allegations set out in paras 49, 65, 84, 99, 120(a) and (c), 133, 135 and 136 above.

278.  I also hold that the dominant motive of the defendants in publishing the first and second letters was to harm the plaintiff and attack his integrity in the run-up to the general election.  This is a clear inference that can be drawn from all the surrounding circumstances.  They wrote the first and second words which contained a wide range of serious and damaging allegations. Violent and aggressive language was used when they did not honestly believe in the words or were reckless as to their truth.

DISCUSSION

279.  On the facts as found, I shall proceed to consider the following issues:-

(a)  Were the first and second words published?

(b)  Do the first and second words refer to the plaintiff?

(c)  Do the first and second words bear the meaning pleaded by the plaintiff?

(d)  Is the pleaded meaning defamatory of the plaintiff?

(e)  If so, does the defence of qualified privilege apply?

(f)  Further or alternatively, does the defence of fair comment apply?

(g)  If the defendants are liable for libel, what should be the damages?

Publication

280.  No civil action can be maintained for libel unless the words complained of have been published.  In order to constitute publication, the matter must be published by the defendant to a third party, that is to say, at least one person other than the plaintiff.  Since publication to one person will suffice, it is clearly not necessary that there should be a “publication” in the commercial sense, though the scale of the publication will of course affect the damages: Gatley on Libel and Slander, 12^th ed at para 6.1.

281.  It is not necessary in all cases to prove that the libellous matter was actually seen and read by some third party.  If it is a matter of reasonable inference that this happened, a prima facie case of publication will be established: Gatley at para 32.8.

282.  On the facts as found, the first and second letters were inserted into the letterboxes of the owners of the Building (except the units owned by Season Yield).  In addition, the second letter was posted on the notice boards in the Building.  As such, the reasonable inference to draw is that they had been seen and read by at least some of the owners.  I hold that the letters were published.

Reference to the plaintiff

283.  The plaintiff contends that the first letter refers to him since his Chinese name was expressly referred to in the first, second and third paragraphs.  He was also expressly referred to in his capacity as the chairman of the IO in those paragraphs. 

284.  Similarly, he says that the second letter also refers to him since his Chinese name was stated and he was expressly referred to in his capacity as the chairman of the IO in the second paragraph.

285.  The test is whether the words might be understood by reasonable people to refer to the plaintiff, subject to the qualification that where the words are published to persons who have special knowledge the issue will be decided by reference to what reasonable persons possessing that knowledge would understand by them: Gatley at para 7.1.

286.  Here, the plaintiff was referred to by name and by reference to his position as the chairman of the IO in both the first and second letters.  The letters were published to the owners of the Building.  It is clear that the owners would reasonably identify the plaintiff from the words used. 

287.  More specifically, in the first letter, in the sentence “有人無所不用其極，運用權力，以偷步封殺的不法行為，指使管理處作為其個人競選總部” (underline added), insofar as there is any dispute as to who the words “有人” referred to, it is reasonably clear that they referred to the plaintiff, given that later on the words “其個人” were used.  Accordingly, the two references must have been to the same person.  And since there was only one candidate apart from the 1^st defendant, “有人” must have been a reference to the plaintiff.

288.  In their amended defence, the defendants deny that the first and second words referred, or were understood to refer, to the plaintiff.  Notwithstanding the denial, Ms Fong accepted in closing submissions that the letters referred to the plaintiff.

289.  Hence I hold that the words were published of the plaintiff.

Meaning

290.  In determining the meaning, words of an article are normally construed according to their natural and ordinary meaning.  The meaning is the one which the words would convey to the mind of an ordinary, reasonable, fair-minded reader.  The article must be read as a whole.  The context and circumstances of the publication must be taken into account.  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: see, eg, BaWang International (Group) Holding Ltd v Next Magazine Publishing Ltd HCA 1190/2013, 23 May 2016, paras 26-33.

291.  In her closing submissions, Ms Fong said that she had no submission to make on the issue of meaning.

292.  The first and second words contain plain and explicit language.  They clearly convey to a reasonable reader the meanings pleaded by the plaintiff. The words really speak for themselves.  For instance:-

(a)  The first words comprise, among others, “管理上出現嚴重缺失”, “縱容管理處主管權力獨大，對各業主訴求推三檔四、好事領功，出事就閃”, “主席好大喜功，未知效益，祇求想像”.  These words relate to the plaintiff’s poor and deficient management of affairs relating to the IO and the Building.

(b)  Furthermore, the first words comprise “最激烈、最黑暗、最卑劣的選舉”, “有人無所不用其極，運用權力，以偷步封殺的不法行為” and “偷步印製…進行非法拉票，誤導業主”.  These words speak to the plaintiff’s unscrupulous, unethical and illegal conduct in his election campaign.

(c)  The second words comprise, among others, “竟然對委員作出震懾、威嚇，委員人身安全受到威脋”, “不當手段” and “不稱職的主席”.  These words speak to the illegal conduct of the plaintiff at and after the Original Owners’ Meeting.

293.  I hold that the first and second words bear the meanings pleaded by the plaintiff, as set out in paras 17 and 19 above.

Is the pleaded meaning defamatory?

294.  It is generally accepted that an imputation is defamatory if it exposes the plaintiff to contempt and ridicule by others and cause others to shun him. It is also defamatory if it lowers the plaintiff’s estimation in the eyes of right-thinking members of society and adversely affect his reputation: see, eg, BaWang at para 24; Gatley at paras 1.7, 2.1.

295.  It has also been said that an imputation is defamatory if it involves imputation of what is “illegal, or unethical or immoral, or socially harmful”. Even “imputations which are less serious than that” may be defamatory, so long as it would “deter third persons from associating or dealing with him”: Thornton v Telegraph Media Group Ltd [2011] 1 WLR 1985, para 34, per Tugendhat J.

296.  At closing, Ms Fong said that she had no submission to make on whether the pleaded meanings are defamatory.

297.  It is clear to me that the words, which bear the pleaded meanings, are highly defamatory of the plaintiff.  According to the words, the plaintiff was engaged in illegal, improper and unethical conduct in the election campaign. Furthermore, his management of the IO was said to be seriously deficient. These allegations would no doubt hurt the plaintiff’s reputation.

Qualified privilege

298.  Where a communication is made by someone with an interest in the subject-matter to someone who has a corresponding interest in receiving the communication, it is made on a privileged occasion.  Such a situation is often referred to as one in which the parties have a common interest.  A publication made on a particular occasion may even be privileged notwithstanding that the person was acting solely in pursuit of his own interests, provided that the communication is made to someone who has a legitimate interest to receive the communication: Gatley at para 14.45.

299.  In the context of communication made between owners of a building in Hong Kong, it has been recognised that there is a common interest among the owners with regard to matters relating to the affairs of the building: Multi-Winner Investment Ltd v Lau Ming Yee [2017] 1 HKLRD 328 at para 69; Yiu Shing Yin v Kwok Yik Ho DCCJ 4437/2016, 28 March 2018 at para 72.

300.  In the present case, the first and second letters were issued during the time leading up to the election of the management committee of the 15^th term.  The content of the letters was directed at the plaintiff’s management of the Building during the past two terms and his suitability as the chairman for the new term.  I hold that the first and second letters prima facie constituted communication made on an occasion of privilege.

301.  Publication must be proportionate to the necessity of the occasion.  As a general rule, a defendant should be careful to make his communication only to those persons who have a legitimate interest or duty in relation to the subject-matter: Gatley at para 14.69.

302.  However, provided that the publication does not go beyond the exigency of the occasion, the mere fact that the defamatory matter is communicated to persons who have no legitimate interest in its subject-matter will not avoid the privilege: Yiu Shing Yin at paras 80 and 82. 

303.  The plaintiff contends that as regards the second letter, copies were also posted on the notice boards on each floor of the Building.  It would be inevitable that any visitors to the Building would be able to read them.  However, the visitors clearly would not have any interest or duty to know or be made known of the matters contained in the second letter.  Such indiscriminate publication was therefore unjustifiably wide.

304.  Here, I have found that copies of the second letter were posted up on the notice boards on each floor of the Building.  It can be inferred that outsiders would be able to read it and might do so.  The notice boards are one common method by which communication to owners is made.  That was a reasonable means for the 2^nd defendant to use for communicating the second letter with the owners.  I consider that the posting up was proportionate. Notwithstanding that it has the drawback of being open for viewing by outsiders, that by itself does not take the communication outside of the privilege.

305.  Hence, prima facie, the defendants are entitled to raise the defence of qualified privilege in respect of the first and second words.  The real bone of contention turns on whether the defence would be defeated by malice, as alleged by the plaintiff.

306.  The principles governing the role of malice in the defence of qualified privilege are authoritatively set out in Jonathan Lu v Paul Chan Mo Po (2018) 21 HKCFAR 94, paras 17-24:-

(a)  In order to decide whether a communication was published maliciously, for the purpose of rebutting a defence of qualified privilege, it is necessary to decide two questions, which arise sequentially.  First, was the occasion privileged, and if so, for what purpose?  Secondly, was that the defendant’s purpose when he published the communication in question?

(b)  The critical question is whether the dominant purpose for which he made the communication was one other than the purpose for which the occasion was privileged.

(c)  The dominant purpose for which a person published defamatory matter can only be inferred from what he did or said or knew and from the circumstances surrounding the making of the relevant communication.

(d)  Where the purpose for which the privilege is accorded is consistent only with the communication of a matter which is believed to be true, the defendant’s knowledge that the matter was false at the time when he communicated it, or his recklessness as to whether it was true or false, will generally be conclusive evidence that he did not make the communication for a proper purpose: normally, that is the only inference which can reasonably be drawn.

307.  The burden rests on the plaintiff to prove malice.  He needs to demonstrate that the dominant purpose for which the defendants published the first and second words was one other than the purpose for which the communication was privileged. 

308.  The notion of “recklessness” referred to in the authorities means “without considering or caring whether it be true or not”.  Whether the defendant was reckless is a matter of inference from the circumstances, which can include not only what the defendant said or did, but also what he did not do: Lu v Chan at paras 22-23.

309.  Malice can be inferred from the defendant’s conduct at any time, whether before or after publication.  His actions during the course of litigation and his demeanour and attitude at trial may be relied upon as indicative of malice.  The pleading of the defence of justification may be evidence of malice but it is probably only applicable where the defence is put forward recklessly, or with knowledge that it is unsustainable: Lee Ching v Lau May Ming [2007] 3 HKLRD 623 at para 201.

310.  Overt hostility displayed by the defendant towards the plaintiff may also indicate malice.  Where the defendant has lied whilst giving evidence, it may support a finding of malice but caution should be exercised in this regard: Lee Ching at paras 203-204.  If a party verifies a pleading which he does not believe to be true, that will be potent evidence of malice: Gatley at para 32.45, footnote 200.

311.  In essence, the plaintiff says that the first and second words were published with malice:-

(a)  The defendants were actuated by a dominant improper motive to injure the plaintiff.

(b)  They published the words knowing the same to be false, or were reckless without caring whether the same were true or false.

(c)  The defendants put forward the defence of justification recklessly or with knowledge that it is unsustainable.

(d)  The words used were excessive, violent and over-aggressive for the occasion and the circumstances.  Eg, see “這次選舉可能是歷屆選舉中最激烈、最黑暗、最卑劣的選舉，有人無所不用其極，運用權力，以偷步封殺的不法行為 … ”, “… 對本人形同威嚇。以一個為連任，竟然對委員作出震懾、威嚇，委員人身安全受到威脋… ”.

(e)  The defendants displayed overt hostility towards the plaintiff by continuing to make various false allegations in the course of these proceedings.  See para 277 above.

(f)  They failed to apologise to the plaintiff and persisted with defending the action.

312.  I accept the plaintiff’s submissions.  In the present case, the lack of honest belief in, or recklessness as to the truth of, the first and second words on the part of the defendants is conclusive evidence that they did not make the communication for its proper purpose.  I have found that the defendants’ dominant motive was to harm and injure the plaintiff. Malice is thus established. 

313.  In the context of an incorporated owners, the defence of qualified privilege affords protection to an owner against liability for libel if he makes the communication for the genuine purpose of sharing information with his co-owners with regard to the management affairs of the building.  If an election is coming up, it is in the common interest of all the owners that they are informed of the past performance of the candidates. 

314.  A common theme running through the defendants’ testimony, though expressed in different ways, was this.  The plaintiff chose to put himself forward for the position of chairman.  All owners, themselves included, were entitled to comment on the plaintiff’s past performance and make public and criticise his wrongdoing so that the owners could make an informed choice of who (or who not) to vote as the chairman for the new term. 

315.  The defendants’ view is given recognition in the law of defamation. Such communication is regarded as given on a privileged occasion as it was made for the purpose of sharing information which the owners had a common interest to know in the run-up to the election.  However, that does not mean that the defendants could say whatever they wanted with no consequence.  The communication would only be privileged if it was made for the proper purpose.  Here, the defendants held no honest belief in what they were communicating or they did not care whether the words were true or not.  In fact, their motive was to injure the plaintiff and attack his integrity.  They are therefore not entitled to the protection which would otherwise be available to them on such an occasion.  Their defence of qualified privilege must fail. 

Fair comment

316.  In a defence of fair comment, a defendant needs to meet five elements (Cheng v Tse Wai Chun (2000) HKCFAR 339, paras 347A-348A; Gatley at para 12.2):-

(a)  The word must be on a matter of public interest.  While public interest is not to be confined within narrow limits, it must be a matter such as to affect people at large, so that they may be legitimately interested in, or concerned at, what is going on: London Artists Ltd v Littler Grade Organisation Ltd [1969] 2 QB 375, 391B.

(b)  The word must be recognisable as comment, as distinct from an imputation of fact.

(c)  The comment must also be based on facts which are true or covered by privilege.

(d)  The comment must explicitly or implicitly indicate, at least in general terms, the facts on which it is based.

(e)  The comment must be one which could have been made by an honest person, however prejudiced he might be, and however exaggerated or obstinate his views.

317.  In the context of fair comment, a defendant cannot avail himself of the defence if he did not genuinely hold the view he expressed.  Honesty of belief is the cornerstone.  The defendant might have made the comment out of some other motive, such as spite, animosity, intent to injure.  Even if it is the dominant or sole motive, that does not by itself defeat the defence: Cheng v Tse at 360I-J; Gatley at para 12.36.

318.  Malice may be evidenced in a number of ways.  For instance, a deliberate failure to mention known exculpatory facts may suggest that the defendant did not genuinely hold a stated opinion: Gatley at para 12.36.

319.  Mr Ng’s primary contention is that the defendants have failed to spell out in their amended defence, with sufficient precision, the comment which they say attract the fair comment defence.  As such, the plaintiff has no inkling as to what case he is supposed to meet: Mak Shiu Tong v Yue Kwok Ying (2004) 7 HKCFAR 228, para 24.

320.  Also, parties disagree on whether the five elements of the defence are made out.  For instance, whether communication between owners in respect of the affairs of an incorporated owners or a building falls within a matter of public interest.  Counsel have not been able to find any authorities either for or against this proposition.

321.  In any event, it is unnecessary to examine the five elements in this case.  Even assuming that the five elements are satisfied, the defence of fair comment will be defeated by malice.  I have found that the defendants, at the time of the first letter, and the 2^nd defendant, at the time of the second letter, held no honest belief in the truth of the allegations made in the respective letters or did not care whether they were true or not.  As such, they cannot now rely on the defence of fair comment.

322.  None of the defence is made out.  I hold that the 1^st to 4^th defendants are liable for libel in respect of the first words and the 2^nd defendant the second words.

Quantum

323.  As a matter of general principle, in cases of libel, a plaintiff is entitled to look to an award of damages sufficient to vindicate his reputation according to the seriousness of the defamation, the range of its publication and the extent to which the defendant has persisted with the charge: Gatley at para 9.4.

324.  The plaintiff is entitled to general damages in respect of the first and second words.  Mr Ng highlighted a number of material factors when assessing quantum.

(a)  The words were seriously defamatory of the plaintiff.  They contained grave and serious allegations casting a very bad light on both his integrity and competence.  They also suggested that he was guilty of illegal conduct at the election of the management committee.

(b)  This would be particularly harmful to the plaintiff as he is a businessman and he sits on a number of public bodies.  Any allegation touching on his personal integrity would be very damaging.

(c)  The defendants had elected to use sensational, aggressive and inciting language (“最激烈、最黑暗、最卑劣的選舉，有人無所不用其極，運用權力，以偷步封殺的不法行為 …”, “好大喜功，未知效益，祇求想像” and “對委員作出震懾、威嚇，委員人身安全受到威脋”).

(d)  The letters were published to all the owners of the Building.  There were over 250 units in the Building.

325.  The plaintiff asks for $300,000 as general damages for each of the first and second words.  Mr Ng cited a number of authorities, which facts are comparable to the present case.  They included Chan Iu Seng v Ko Choi Hin HCA 2901 and 2935/2004, 28 January 2010; Mok Kam Kwai v Lam Mo Fat HCA 1868/2010, 6 March 2014; and, Lo Sam Shing v Li Fong HCA 1803/2011, 14 March 2014.  Ms Fong said nothing on quantum in her written submissions at all. 

326.  On the whole, having considered the authorities, I accept Mr Ng’s submissions and award the full sum of $300,000, as claimed, in respect of each of the words.

327.  As regards the claim for aggravated damages in the sum of $200,000 in respect of each of the words, it should be borne in mind that such claim is part of the compensatory award and may be granted to compensate for additional injury caused to the plaintiff’s feelings by the defendant’s conduct of the action, as when he persists in an unfounded assertion that the publication was true, or refuses to apologise, or cross-examines the plaintiff in a wounding or insulting way: Oriental Daily Publisher Ltd v Ming Pao Holdings Ltd (2012) 15 HKCFAR 299 at paras 112-113; Gatley at para 9.18.

328.  Mr Ng submitted that the court should take into account the fact that the defendants persisted in contesting the claim up to the very end and maintaining the defence of justification up until the lodging of their opening submissions and that they failed to apologise to the plaintiff notwithstanding the demand letters. 

329.  I agree that the plaintiff should be entitled to aggravated damages.  I allow his claim in full in the sum of $200,000 in respect of each of the words.

CONCLUSION

330.  I order that there be judgment in favour of the plaintiff in the sum of $500,000 in respect of the first words against the 1^st to 4^th defendants and there be judgment in the sum of $500,000 in respect of the second words against the 2^nd defendant, in each case with interest at judgment rate from the date of writ to payment.

331.  I also make an order nisi that the 1^st to 4^th defendants do pay the plaintiff’s costs of the action, to be taxed if not agreed, with certificate for one counsel.