LAM YI LAI v. IP KWOK CHUNG AND ANOTHER

CACV 194/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 194 OF 2009

(ON APPEAL FROM HCA NO. 2074 OF 2007)

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J U D G M E N T

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Hon Cheung JA:

1.  I agree with the judgment of Kwan JA.

Hon Kwan JA:

2.  This is an appeal from the decision of an application to strike out the Amended Statement of Claim in a libel action. On the application of the 1^st defendant, Deputy Judge To (as he then was) made an order on 28 August 2009 that (1) the Amended Statement of Claim against the 1^st defendant be struck out; (2) the plaintiff’s claim against the 1^st defendant be dismissed; (3) the 1^st defendant’s counterclaim against the plaintiff be stayed with liberty to restore to the 1^st defendant; and (4) the plaintiff is to pay the costs of the 1^st defendant on an indemnity basis.

3.  The hearing below was conducted in Chinese at the request of the plaintiff, who was then acting in person. The appeal was heard in English at the request of counsel on both sides.

4.  I will first mention the relevant background matters.

The background

5.  The background matters are taken largely from the decision and as noted by the Judge at paragraph 3, there is no dispute on these matters.

6.  The plaintiff has been occupying a flat in Pak Cheung Building, Nos. 2 to 2A Tak Shing Street, Kowloon. The 1^st defendant has been the chairman of the incorporated owners of the building. The 2^nd defendant is the incorporated owners and has dropped out of this litigation at an early stage. The Financial Secretary Incorporated has become the registered owner of the flat occupied by the plaintiff for reasons not necessary to go into. Since May 2001 to August 2009, the plaintiff has owed management fees in the sum of $80,000 and contribution to the maintenance expenses levied in respect of 1998 in the sum of $27,400. Disputes have arisen between the plaintiff and the 1^st defendant due to the measures taken to collect the outstanding fees and expenses from her.

7.  On 30 August 2007, the 1^st defendant wrote to the Financial Secretary seeking his assistance to collect the outstanding charges in respect of the flat occupied by the plaintiff. The matter of collecting the long outstanding charges was discussed in a regular meeting of the management committee of the incorporated owners on 12 September 2007. The 1^st defendant’s report to all the owners and occupiers on the efforts made to collect outstanding charges in respect of the plaintiff’s flat was posted at the main lobby of the building the next day and a copy of the minutes of the said meeting of the management committee was likewise posted up on 19 September.

8.  In the early hours of 19 September, the plaintiff tore up the aforesaid notices in the presence of a staff of the management office. The incorporated owners issued a warning letter to her on 20 September and posted up a copy of it in the main lobby, warning her not to tear up its notices on display, otherwise a report would be made to the police. Shortly afterwards, the plaintiff tore up the warning letter which was on display. The management office made a report to the police. She wrote a letter to the 1^st defendant dated 20 September 2007 (“the plaintiff’s 1^st Letter”) and put it up in the main lobby.

9.  On 21 September 2007, a Chinese newspaper carried a report that the plaintiff was arrested by the police on suspicion of criminal damage for tearing up the notice of the incorporated owners over a dispute on the payment of management fees. On the same day, the incorporated owners put out a notice to all owners and occupiers reporting on the incident mentioned in the newspaper (“the Notice of the incorporated owners”).

10.  The plaintiff responded to the Notice of the incorporated owners with an undated notice she put up in the main lobby on 22 September 2007 (“the plaintiff’s 2^nd Letter”). It was headed “To the person(s) who nominated Ip Kwok Chung to receive a medal” (in Chinese: 《給提名葉國忠取勳章的人》).

11.  The 1^st defendant responded to the plaintiff’s 1^st and 2^nd Letters with a letter to her dated 22 September 2007 (“the 1^st defendant’s Response”), which was copied to all the owners of the building and was posted up in the main lobby.

12.  On 2 October 2007, the plaintiff issued the writ in this action against the 1^st and 2^nd defendants, endorsed with a Statement of Claim, alleging defamation in respect of the Notice of the incorporated owners and the 1^st defendant’s Response. The 1^st defendant filed a defence and counterclaim. The counterclaim alleged defamation in respect of the plaintiff’s 1^st and 2^nd Letters and a letter the plaintiff wrote to him on 5 October 2007.

13.  Both parties were unrepresented when they filed their pleadings in 2007. They did so in English. The pleadings left a lot to be desired, particularly in a libel action.

The Amended Statement of Claim

14.  The Statement of Claim was amended on 5 October 2007. The relevant parts of this document read as follows:

“About 20.9.2007, D1 and D2 caused written publications to be posted in public places, including the access entrance to A building and also outside her shop in the vicinity. These publications contain words defamatory of P by referring to her as ‘speaking numerous lies’, ‘idiots’ and ‘having been arrested for criminal damage’ and were linked to P by innuendo referring to her resident address at Flat 4B of A Building.

Particulars of Publication

1.  In a public notice dated 21.9.2007 [i.e. the Notice of the incorporated owners] the Incorporated Owners (of which purportedly D1 is chairman) referred to P as having been arrested for criminal damage in accordance with news report in a letter posted in the manner mentioned above. The Chinese wordings therein read as ‘林依麗涉刑毁被捕’.

2.  In a letter dated 22.9.2007 [i.e. the 1^st defendant’s Response] publicly posted as above-mentioned in para. 3 there, D1 described P as ‘idiot’ (白癡). In Paragraph 4 there D1 attacked P as speaking numerous lies (大話連篇).

3.  In a letter/correspondence dated 1.10.2007, D1 repeated that P was charged by the police.”

15.  A number of things are wrong about this pleading.

16.  Firstly, the date of the publication mentioned in the paragraph which preceded the Particulars of Publication (i.e. 20 September 2007) was different from the dates of all the publications mentioned in the Particulars (i.e. 21 September, 22 September and 1 October 2007).

17.  Secondly, as the words alleged to be defamatory had formed part of a document or documents, the Amended Statement of Claim should have set out verbatim the particular extracts or sentences in which the alleged defamatory words appeared.

18.  Thirdly, and even more seriously, the Amended Statement of Claim should have specified clearly all the natural and ordinary meaning or meanings of the defamatory words alleged (it is not in issue the plaintiff has not relied on any true innuendo). This requirement is elementary.

The Defence and Counterclaim

19.  The Defence and Counterclaim of the 1^st defendant is just as deficient.

20.  In paragraph (3), it is averred that the words complained of, being “speaking numerous lies”, “idiots” and “having been arrested for criminal damage” [defined as “Alleged Words” in the Defence], were not defamatory.

21.  Paragraph (4) contained 13 averments, two of them read as follows:

“(ix)  The 1^st Defendant commented that it was idiotic to accuse or suggest that one would refuse accepting payment of outstanding management fees.

(xiii)  The 1^st Defendant is prepared to produce publications of the Plaintiff and correspondence passed between the parties showing that the Alleged Words are justified and/or fair comments as and when the Court requires.”

22.  At least these things are wrong about the Defence.

23.  Firstly, if the natural and ordinary meaning or meanings of one or more of the defamatory words alleged is in issue (as would appear from the submissions made to the Judge on the strike out application), this should have been clearly indicated in the Defence.

24.  Secondly, if a defence of justification is run, particulars of all facts and matters relied on to justify the defamatory meaning of the words complained of must be set out in the Defence.

25.  Thirdly, if a defence of fair comment is raised (as so regarded by the Judge in paragraph 17 of the decision), the requirements of Order 82 rule 3(2) of the Rules of the High Court must be complied with, namely, that where the defendant alleges that in so far as the words complained of consist of statements of fact, they are true in substance and in fact, and in so far as they consist of expressions of opinion, they are fair comment on a matter of public interest, he must give particulars stating “which of the words complained of he alleges are statements of fact and of the facts and matters he relies on in support of the allegation that the words are true.”

26.  The failure on both sides to comply with elementary requirements of pleadings in a case of defamation has created difficulties for themselves.

The progress of the action and the strike out application

27.  After pleadings were closed, an order was made on the summons for directions on 9 July 2008, giving directions for the filing of lists of documents and witness statements. The parties were directed if they wished to seek counsel’s advice, this should be done within a specified period of the exchange of witness statements. A similar direction was made as to interlocutory applications any party might be advised to take out.

28.  The matter came back to the court after the filing of lists of documents and witness statements. On 26 November 2008, a Master gave leave to set down the action for trial before a bilingual judge with 6 days estimated, and ordered a pre-trial review 10 weeks before the trial. The pre-trial review was scheduled for hearing before the Judge on 14 July 2009.

29.  On 13 July 2009, the 1^st defendant issued the strike out summons under Order 18 rule 19 and the inherent jurisdiction of the court, returnable at the pre-trial review. He sought to strike out the Statement of Claim on the grounds that the same discloses no cause of action and/or is scandalous, frivolous or vexatious. No supporting affirmation was filed at the time.

30.  The Judge gave directions at the pre-trial review for the conduct of the strike out application as well as for the trial. In respect of the former, the parties were directed to file evidence in support, opposition and reply within the times stipulated. The 1^st defendant filed a substantive affirmation in support on 28 July 2009. In it, he contended that this action was commenced for an ulterior motive and “there was never any defamation as alleged”. He set out the claims of defamation against him as follows:

“(a)  On 21 September 2007, that [he] published a letter stating that [the plaintiff] ‘having been arrested for criminal damage’ (‘1^st Words’);

(b)    On 22 September 2007, that [he] published a letter referring to her as ‘an idiot’ (‘2^nd Words’); and

(c)    in the same letter, that [he] said she was ‘speaking various lies’ (‘3^rd Words’).”

31.  For ease of reference, I will adopt the same terms of the 1^st Words, 2^nd Words and 3^rd Words as referring to the three groups of words alleged to be defamatory.

32.  In his affirmation, the 1^st defendant mentioned that he was advised by his legal advisers “there is nothing untrue about the 1^st Words”. He also said he wrote the 1^st defendant’s Response, in which the 2^nd and 3^rd Words appeared, “to set the record straight” and what was stated there “is true and correct or very justified”. He did not advance any contention against the defamatory meaning of the 2^nd Words as alleged by the plaintiff. It was only in the submissions filed by his counsel Mrs. Dora Chan (who also appeared in this appeal) 3 days before the hearing that he contended for the first time the plaintiff’s claim on the 2^nd Words is bound to fail in that:

(1) the publication of the 2^nd Words does not relate to the plaintiff. Further, it is a “fair opinion” held by the 1^st defendant and all right-thinking persons;

(2) the relevant sentence in which the 2^nd Words appeared has to be taken in the proper context. The whole sentence according to counsel’s translation reads: “Do not agree to accept units owing management fees to pay the management fees, such allegation is idiotic” (in Chinese: 不同意接納欠費單位繳交管理費，這指責簡直是 <白癡>。). This sentence does not mean what the plaintiff pleaded, namely, “described P as “idiot”;

(3) the 1^st defendant denies he refused to accept payment of any management fees. He rightly considers that refusing to accept payment of debt owed to the incorporated owners or the manager is idiotic. His opinion accords with common sense and there is nothing defamatory.

33.  The plaintiff filed an affirmation in opposition on 7 August 2009 merely confirming the truth of the matters in the Amended Statement of Claim and asserting she did not engage in litigation maliciously.

The Judge’s decision and the scope of this appeal

34.  The Judge ruled in favour of the 1^st defendant on his strike out application that the plaintiff’s claim of defamation on the 1^st, 2^nd and 3^rd Words is bound to fail. His ruling may be summarised as follows:

(1) In respect of the 1^st Words, they are not defamatory of the plaintiff. Further, they are true in substance and in fact.

(2) In respect of the 2^nd Words, they are not defamatory of the plaintiff. They do not bear the meaning alleged that the plaintiff was described as an idiot. Even if they bore a defamatory meaning, the 1^st defendant could rely on the defence of fair comment.

(3) In respect of the 3^rd Words, they are true in substance and in fact. Further, the 1^st defendant could rely on the defence of qualified privilege.

35.  The plaintiff has brought this appeal only in respect of the ruling in (2). In other words, the Judge’s decision to strike out the claim in respect of the 1^st Words and the 3^rd Words is left undisturbed.

The main grounds of appeal

36.  On behalf of the plaintiff, Mr. Hylas Chung raised two broad grounds of appeal.

37.  Firstly, the Judge erred in ruling it is plain and obvious that the 2^nd Words (1) are not capable of bearing the defamatory meaning alleged, namely, that the plaintiff was described as an idiot; (2) these words could only mean that the allegation made by the plaintiff was like that of an idiot; and (3) these words with the meaning in (2) could not have the tendency of lowering the plaintiff in the estimation of others.

38.  Secondly, the Judge erred in ruling it is plain and obvious that the defence of fair comment would succeed, even if the 2^nd Words were defamatory. The Judge had failed to consider adequately the essential elements for the defence of fair comment and some or all of these elements ought to be determined in a trial. Mr. Chung referred to the five essential elements of the defence of fair comment discussed by Lord Nicholls in Cheng & Anr. v. Tse Wai Chun (2000) 3 HKCFAR 339 at 347C to 348A. 

Defamatory meaning

39.  As no English translation, whether certified or otherwise, has been provided of the relevant extract in the 1^st defendant’s Response in which the 2^nd Words appeared, I set out the extract in Chinese as follows:

“3.    指2003年提出以每月支付兩個月管理費來清繳上述欠款，唯葉國忠不同意本人之做法。

回應：本人從未拒絕及阻撓林依麗每月繳交兩個月管理費。從今年七月開始，林女士繳交了兩次兩個月管理費，隨後八月份又繳付一次兩個月管理費，在九月十二日法團會議，有業主提及，本人會後查核收費紀錄方知上述情況已執行。不同意接納欠費單位繳交管理費，這指責簡直是 <白癡>。”

40.  The Judge’s reasoning in the relevant ruling appeared in paragraph 16 of the decision. In essence, he is of the view that the characters in brackets – <白癡> - were used to describe an allegation. These characters could not be taken to mean that the plaintiff was described as an idiot, even though she had made that allegation. Further, as the 1^st defendant had put these characters in brackets, this showed he was not using these characters in the ordinary sense. He held that the characters in the relevant extract could only mean that the allegation made by the plaintiff was like that of an idiot, and this means that her allegation was unreasonable or illogical. According to the meaning he ascribed to the 2^nd Words, they would not lower her in the esteem of right-thinking people.

41.  The Judge’s reasoning may be right, but that is not the test to be applied in a strike out application. On each of the matters determined by the Judge – that the 2^nd Words are not capable of bearing the defamatory meaning alleged; that these words could only mean the allegation made by the plaintiff was like that of an idiot; and that the meaning of the 2^nd Words is not in fact defamatory – I am quite unable to say no contrary argument could possibly be entertained.

42.  The ordinary and natural meaning of the words complained of is not confined to the literal meaning of the words but covers also any reasonable implications to be derived therefrom. There is fluidity of everyday language and ordinary people often use words loosely. It cannot be ruled out that an ordinary reader of the 1^st defendant’s Response, who, on a quick reading, may indulge in a certain amount of loose thinking rather than engage in meticulous analysis, could have understood the 2^nd Words in the sense alleged by the plaintiff, namely, that she was described as an idiot.

43.  As to whether the ordinary and natural meaning of the 2^nd Words is defamatory, it was contended by Mr. Chung that apart from describing the plaintiff as an idiot, these words could also be understood to mean (1) she had low intelligence; (2) she was a mentally retarded person; and (3) she was incapable of expressing herself. None of these additional meanings that counsel contended could be ascribed to the ordinary and natural meaning of the 2^nd Words were pleaded in the Amended Statement of Claim. If that had been properly pleaded, the Judge might have been better able to rule, on the strike out application, whether it is plain and obvious that the meaning of the 2^nd Words is not in fact defamatory.

Fair comment

44.  As the 1^st defendant is not able to establish it is plain and obvious the 2^nd Words are not defamatory, he would need to show he would succeed in the defence of fair comment.

45.  The Judge dealt with this in paragraph 17 of the decision. The plaintiff had asserted that if the 1^st defendant had accepted her repayment proposal (in paying an additional month’s management fees for each month), she would have paid off all the outstanding fees. The Judge reasoned that regardless of whether this assertion is believable or not, if she had indeed paid extra fees in a month, it was impossible that the incorporated owners would have declined to accept the extra fees tendered. Likewise, there was no reason for the 1^st defendant not to agree to accept part payment of the outstanding fees each month. Hence, the allegation of the plaintiff that the 1^st defendant refused her proposal to pay 2 months’ fees each month could be regarded as illogical, incredible or absurd. For these reasons, the Judge was of the view that to describe the plaintiff’s allegation as like that of an idiot may be contemptuous but this would still be fair comment.

46.  This approach is problematic, owing to the fact that the defence of fair comment was not properly pleaded.

47.  Firstly, the 1^st defendant has not stated in the Defence which of the words in the relevant extract are statements of fact, and which comment. To rely on the defence of fair comment, the comment must be recognisable as comment, as distinct from an imputation of fact. In many situations, it may not be entirely straightforward to differentiate between the two.

48.  Secondly, the comment must be based on facts which are true or protected by privilege. The Defence did not state the facts and matters on which the comment was based, and give particulars to support the allegation that such facts and matters are true, or were published on a privileged occasion. Without proper pleadings, and clear delineation of what those facts and matters are, the parties are at cross purpose and it is impossible for the court to make a proper ruling, whether on a strike out application or at trial, if what is recognisable as comment was based on facts which are true.

49.  To give an example, counsel on both sides would appear to have different understanding as to what the plaintiff had accused the 1^st defendant of in the relevant extract, that caused the 1^st defendant to describe her as an idiot or to describe her accusation as like that of an idiot. Mrs. Chan said the plaintiff’s accusation was the refusal to accept the payment of money for outstanding management fees. Mr. Chung suggested the 1^st defendant was responding to the accusation that the plaintiff had proposed in 2003 to pay 2 months’ fees each month to clear her outstanding fees but the 1^st defendant did not agree to this proposal.

50.  Thirdly, the comment must explicitly or implicitly indicate what are the facts on which the comment is being made, so that the ordinary reader would be in a position to judge for himself how far the comment was well founded. Without proper pleading on the facts on which the comment was based, the court is hardly in a position to make a determination if the comment does fall within these limits required by law.

51.  Lastly, 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. The Judge had only considered this aspect on the basis of the meaning he ascribed to the 2^nd Words, that the allegation made by the plaintiff was like that of an idiot. He did not consider this on the basis of the defamatory meaning alleged by the plaintiff, that she was described as an idiot, assuming this was a comment not an imputation of fact. This is a matter that should be determined at trial.

52.  For the above reasons, it has not been demonstrated it is plain and obvious that the defence of fair comment would succeed.

Conclusion and orders

53.  The appeal should be allowed and the order of the Judge set aside save to the extent that the Amended Statement of Claim contains a claim for defamation in respect of the 2^nd Words. 

54.  The plaintiff is directed to issue a case management summons returnable before a Master within 28 days of the handing down of this judgment, to deal with any consequential directions that should be given for the further conduct of this action and any interlocutory applications the parties may be advised to make. The parties should consider amending their pleadings in the light of this judgment.

55.  It should be mentioned that it is highly undesirable for the language of these proceedings to be switched from one language to another, often on short notice to the court hearing the proceedings. As both parties are legally represented, and the pleadings are in English, there is no reason why these proceedings should not thereafter be conducted in English, with certified translation of essential documents in Chinese provided to the court.

56.  As for the costs in the strike out application, the 1^st defendant has succeeded in striking out the claim for defamation in respect of the 1^st and the 3^rd Words, so it seems right he should have part of the costs of that application. It would be appropriate to vary the costs order by providing that the 1^st defendant is only to have two-thirds of his costs in that application, and that costs should be taxed on a party and party basis instead of on an indemnity basis.

57.  Costs of the appeal should follow the event and would be borne by the 1^st defendant.

58.  There would be an order nisi in respect of the costs order in the court below and on this appeal.