GOLDEN FIELD GLASS WORKS CO LTD v. YEUNG CHUN KEUNG

DCCJ 1942/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1942 OF 2012

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JUDGMENT

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INTRODUCTION

1.  This is the trial of the plaintiff’s claim for defamation arising out of an e-mail dated 22 March 2010.

FACTS NOT IN DISPUTE

2.  The defendant Yeung Chun Keung (“Yeung”) was the employee of the plaintiff Golden Field Glass Works Company Limited (“GFGW”).

3.  Yeung sent an e-mail dated 22 March 2010 (“the E-mail”) to Cobow Contracting & Engineering Company Limited (“Cobow”) which contained the following message (“the Message”):-

“Feeling that Golden Field Glass Works Company lacks a scientific management and work method in Guangzhou, thereby causing a big waste in glass pieces and manpower and a rise in the costs of products.”

“According to my knowledge, Golden Field Glass Works Company remade quite a number of glass pieces which had been thrown away due to discrepancies in size in one year. There had been so much of such waste in the factory of Chi To in last year.”

“Simply in last year, it has been several times more in terms of workers engaged, salary paid and glass pieces wasted by Golden Field due to size issue.”

“有感金豐玻璃公司在廣州欠缺一個科學性的管理和工作方法，造成玻璃方面和人工方面的很大浪費，形成了產品成本上漲。

據我所知金豐玻璃公司一年中丟掉因尺寸不一而重做的玻璃數量不少。單是去年在智濤廠的也不少了

而單是去年金豐因尺寸丟棄和返工的人工數的便有幾倍這個數目了。” (Original version in Chinese)

4.  Cobow was a customer of GFGW.

THE PLAINTIFF’S CASE

5.  GFGW says that the Message contains the following meanings:-

(a) GFGW is not an effective/efficient corporation.

(b) GFGW has lost plenty of resources (glass pieces) and labour costs due to its poor management and planning etc.

(c) Because of (a) and (b), GFGW unnecessarily increased its costs and thereby passed on the wasted costs to its customers (implying Cobow as one on them).

6.  GFGW submits that the Message was false and defamatory and Yeung published it maliciously.  This has caused GFGW loss of business with Cobow and its related companies.

7.  GFGW’s Statement of Claim includes the following reliefs:-

(a) An injunction order restraining Yeung from publishing the Message or words of a similar nature.

(b) Damages for libel and/or injurious falsehood.

(c) Aggravated damages.

(d) An effective apology in written form admitting that the Message was false and an undertaking not to repeat the same.

8.  At trial, counsel for GFGW informed the court that it would abandon items (a) and (d) which are claims for an injunction and an apology respectively.

THE DEFENDANT’S CASE

9.  Yeung accepts that the E-mail was sent by him and the Message contains the meanings as stated in paragraph 5(a) and (b) hereinabove.  As to (c), while Yeung admits that the Message could mean GFGW unnecessarily increased its costs, he disputes whether it could mean the increased costs would be passed to the customers (implying Cobow as one on them).

10.  Yeung submits that the Message is true in its natural and ordinary meaning.

11.  Further, Yeung relies on the defence of qualified privilege on the basis that Yeung and Cobow have an interest in the information disclosed in the E-mail.

12.  He further challenges GFGW’s claim that the Message caused loss of business.

CORE ISSUES

13.  The core issues of this case, as I see it, are as follows:-

(a) Whether the Message carries the meaning as alleged by GFGW as per paragraph 5(a), (b) and (c) hereinabove?

(b) If the Message carries the meaning as per paragraph 5(a), (b) and (c) hereinabove, whether such meaning is defamatory?

(c) Whether the Message is true in its natural and ordinary meaning?

(d) Whether Yeung has the defence of qualified privilege?

(e) Whether the Message has caused GFGW loss of business?

THE WITNESSES

14.  At trial, GFGW called its director Leung Man Lee as the only witness and the defendant Yeung testified. 

EVIDENCE OF LEUNG MAN LEE

15.  Mr Leung Man Lee (“Leung”) testified in court.  He confirmed and adopted his witness statement dated 22 August 2013 and supplemental witness statement dated 5 December 2013.

16.  Leung is a director and shareholder of GFGW.  It is a company set up in 1988 with a business of designing, manufacturing and installing shop windows or glass pieces for decoration and display purposes.  It had undertaken works for well-known brands such as Christian Dior in respect of its retail shops.

17.  Since about 2003, GFGW had been serving Cobow as one of its main customers. 

18.  The defendant Yeung was employed by GFGW as a glass installation worker and his job was to install shop windows or glass pieces for GFGW’s customers.  He left GFGW in April 2010.

19.  On 23 March 2010 at about 8:35 am, Leung received an e-mail from Alaric Lai of Cobow which was attaching the E-mail sent by Yeung to Alaric Lai earlier on 22 March 2010 at about 9:18 pm.  From Alaric Lai’s message to Leung, Leung understood that Alaric Lai must have read Yeung’s E-mail.  On 24 March 2010, Alaric Lai called Leung and said he had read the E-mail from Yeung.  He asked Leung who Yeung was.  Leung told him that Yeung was GFGW’s employee.

20.  Since then, Leung found that the orders from Cobow had been dropping.  Previously, Cobow placed orders with GFGW almost every month. 

21.  In late May or early June 2010, Leung went to Cobow’s office to meet Alaric Lai.  He said to Leung that he did not understand why Yeung would send the E-mail to him.  Alaric Lai believed Yeung was trying to get work from Cobow.

22.  Leung said GFGW had lost Cobow as a customer due to Yeung’s E-mail.  Take the year of 2010 as an example, Cobow’s orders amounted to HK$6 million to HK$7 million and the net profit from this amounted to HK$1.5 million ie 25%

23.  Leung said the Message in Yeung’s E-mail would give the negative impression that GFGW would pass unnecessary costs to its customers and this was untrue.  When customers ordered from GFGW, the orders would include some spare glass pieces.  The reason was that glasses were fragile and could be damaged during transportation or installation.  The prices paid by the customers had already included spare glass pieces and there would not be the situation where GFGW would pass extra costs to its customers.  Even when glass pieces could not be used due to customers’ requests for changes in designs and sketches, this should not be regarded as a fault on the part of GFGW.

24.  Leung believed Yeung’s Message was defamatory and had caused harm to GFGW’s reputation. 

EVIDENCE OF THE DEFENDANT

25.  Yeung testified that he started working for GFGW in 2007.  GFGW carried on a business of designing, producing and installing shop windows and display windows in Hong Kong and China.  It had about 20 odd staff members and branch offices in Hong Kong and China.  Yeung’s position in the company was glass installation worker.  He was responsible for the installation of shop windows or display windows.

26.  The Hong Kong office would be responsible for taking orders from customers and installation.  But the parts would be assembled in Mainland China by GFGW’s related factory Guangzhou Cobow Manufacturing Limited (“廣州智濤家俱製品有限公司”) (“the Factory”).  Yeung was based in the Factory most of the time.

27.  Cobow carried on a business of renovation and decoration for shops.  Before it set up its own glasses installation department, it engaged outside contractors for this part of work and GFGW was one of them.

28.  In 2009, Cobow started to set up its own glasses installation department.  In this connection, around December 2009, Cobow hired two workers from the Factory “林志祥” and “馬藝翔”. “林志祥” was a co-worker of Yeung at the Factory.

29.  Yeung’s younger brother “楊健良” was the head of the Factory.  Cobow had invited him to join when it was setting up its own glasses installation department. But he refused. 

30.  In early 2010, “楊健良” told Yeung about Cobow’s recruitment of staff for its glasses installation department and passed him the e-mail address of Alaric Lai.  Yeung then sent the E-mail to Alaric Lai on 22 March 2010.

31.  Yeung said that he sent the E-mail to Alaric Lai with the intention of seeking employment in Cobow.  He said he was only suggesting how the efficiency of Cobow’s glasses installation department could be raised.  He said that he did not indicate in the E-mail that GFGW would pass any increased costs to its customers and an ordinary reader of the E-mail would not get such an impression. 

32.  Yeung argued that his comments in the E-mail were based on truth and amounted to fair comments. 

33.  During his 3-year employment with GFGW, Yeung was not in a management position.  But he was familiar with the operation of the company.

34.  Generally speaking, when a customer engaged the services of GFGW, GFGW would order glasses from its suppliers which would cut the glasses according to the sizes needed.  These glasses would be sent to the Factory for making the shop windows and display windows.  The finished products would be delivered to the client’s place for installation.

35.  The customers of GFGW required a high standard.  Any inaccuracy in the cutting of the glasses would affect the parallel lining of the glasses and the frame.  This did not just affect the appearance of the products.  The sharp protruding glasses would give rise to a safety concern.  This was one of the common complaints raised by customers.  They refused to accept delivery and required reworking on the products. 

36.  In the E-mail, Yeung mentioned two of GFGW’s suppliers “新李英” and “藝華”.  Yeung understands that these two suppliers allowed a 2-mm discrepancy in the cutting and angling of the glasses.  He believes that such a difference would already give rise to a defect in the finished product which required reworking.  As GFGW did not have any machine for grinding the glasses, it could only re-order from the suppliers.  The defective glasses had to be thrown away.  For 20 glasses that were used for production each day, about 4 to 5 pieces had the aforesaid defect and had to be discarded.  On a yearly basis, the quantity of thrown away glasses was quite substantial.

37.  Yeung said if GFGW had its own machines, the aforesaid problem could be solved.  This was the reason why he mentioned in the E-mail about a “45 degree Slanting Side Machine (45度角斜邊機)” and a “Glass Grinding Machine (玻璃直邊機)”.  With such machines, there would not be any need for throwing away so many glasses. The productivity and efficiency could both be raised.

38.  Yeung, therefore, believed that his comments in the E-mail were all true or could be regarded as fair comments.  When writing the E-mail to Cobow, he was just hoping to offer some suggestions on improving efficiency.  He was not intending to defame GFGW.  In any event, before the sending of the E-mail, Cobow had already stopped placing orders with GFGW.  So the E-mail would not cause GFGW any loss.

LEUNG MAN LEE’S REPLY

39.  Leung responded to Yeung’s points of defence.

40.  Leung pointed out that Yeung had made a fundamental mistake about the facts.  The Factory Guangzhou Cobow Manufacturing Limited (“廣州智濤家俱製品有限公司”) did not belong to GFGW. It belonged to Cobow.  GFGW was a contractor for Cobow.  Cobow took orders from customers such as boutiques and jewellery shops with brand names.  Cobow would manufacture the wooden frames or metal frames and GFGW would provide the glasses for fitting in.  The finished products would then become shop windows or display windows at the shops.  Cobow allowed GFGW to use the Factory for assembling different components of the products.

41.  In Leung’s views, Yeung was a glass installation worker responsible for moving and installing glasses.  He did not have any professional or in depth knowledge in the field.

42.  Leung did not agree that its suppliers “新李英” and “藝華” would allow a 2-mm discrepancy as alleged by Yeung.  Leung had visited the factories of these suppliers.  They had advanced machines for the cutting, grinding and reinforcement of glasses.  The procedures were monitored by computers.  There would not be such a discrepancy.  GFGW had been using “新李英” and “藝華” as suppliers for over 20 years.  The sizes and qualities of glasses provided by them were good.  Occasionally, there might be instances of damage during transportation and installation or some customers changed their original requirements and these led to some glasses could not be used.  But this had nothing to do with the management of GFGW.

43.  Regarding Yeung’s criticism that GFGW did not have a grinding machine so that it could not rework on the defective glasses from suppliers, Leung said Yeung just showed his ignorance when making this allegation.  The business dealings between GFGW and Cobow were mostly concerned with tempered glasses.  Cobow’s clients required these for the shop windows or display windows because they were stronger and would not break easily.  Once the tempered glasses had been processed into the required sizes, no further grinding or cutting should be done as these might make them easier to break, especially the sides or the corners.

DISCUSSIONS

Legal principles for determining natural and ordinary meaning of words

44.  In Bawang International (Group) Holding Limited & Anor v Next Magazine Publishing Limited, HCA 1109/2010, Mr Justice Lok summarised the legal principles for determining the natural and ordinary meaning of alleged defamatory words in paragraphs 26 to 34 of the judgment:-

“26. In determining the meaning, words in an article are normally construed according to their natural and ordinary meaning, and the judge or jury has to ascertain the single meaning which the publication sued upon would convey to the mind of an ordinary, reasonable, fair-minded reader.

27. The article must be read as a whole. It is well established that the context and circumstances of the publication must be taken into account. A plaintiff cannot pick and choose parts of the publication. For example, a particular sentence may be considered defamatory, but there may be other passages which neutralize or mitigate its sting. A reasonable reader is assumed to have read the whole article complained of, and a defendant is entitled to have considered as part of the plaintiff’s case the whole of the piece from which the alleged libel is extracted.

28. In reading the article in its entire context, the court will also bear in mind the general tenor of the entire article. The fact that an article gives a generally uncomplimentary rendering of the claimant will obviously affect a reasonable reader’s understanding of the specific portions or statements in the article. The court will also consider the effect of the “visual impact” of the article on the readers.

29. As regards the meaning of the alleged defamatory words, it is trite that it is a question of fact to be read “in the sense in which ordinary persons, or in which we ourselves out of court ...... would understand them” and whether the words are capable of defamatory meaning is for the judge.

30. In Jeynes v News Magazines Ltd, Sir Anthony Clarke MR summarised the nature of the exercise:-

“(1) The governing principle is reasonableness.  (2) The hypothetical reasonable reader is not naïve but he is not unduly suspicious. He can read between the lines. He can read in an implication more readily than a lawyer and may indulge in a certain amount of loose thinking but he must be treated as being a man who is not avid for scandal and someone who does not, and should not, select one bad meaning where other non-defamatory meanings are available.  (3) Over-elaborate analysis is best avoided.  (4) The intention of the publisher is irrelevant. (5) The article must be read as a whole, and any ‘bane and antidote’ taken together.  (6) The hypothetical reader is taken to be representative of those who would read the publication in question.  (7) In delimiting the range of permissible defamatory meanings, the court should rule out any meaning which, ‘can only emerge as the produce of some strained, or forced, or utterly unreasonable interpretation...’  (8) It follows that it is not enough to say that by some person or another the words might be understood in a defamatory sense.”

31. It is well established that the words are to be construed in their natural and ordinary meaning, i.e. the meaning in which reasonable people of ordinary intelligence, with the ordinary person’s general knowledge and experience of worldly affairs, would be likely to understand them.

32. The natural and ordinary meaning does not rest upon any technical process of construction or analysis.  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.

33. It has been considered that the range of legitimate meanings is a matter of impression, “provided that the impression is not of what the words mean but of what a jury could sensibly think they meant...  Such an exercise is an exercise in generosity, not in parsimony”

34. In defamation cases, the “single meaning rule” applies.  The words complained of were deemed to bear only one natural and ordinary meaning which was the meaning that the words would convey to the reasonable reader.  In Oriental Daily Publisher Ltd & Anor v Ming Po Holdings Ltd, Lord Neuberger NPJ observed that, in ascertaining a single meaning of the words, the first question to be considered must be: what did the statement mean?  His Lordship also said: “Conventionally, the question admits of only one answer, to be arrived at by reference to the words used when assessed in their context, documentary, factual and common sense. This is true even where more than one meaning is possible.”

Meaning of the Message

45.  GFGW and Yeung agree that the Message contains the following meanings:-

(a) GFGW is not an effective/efficient corporation.

(b) GFGW has lost plenty of resources (glass pieces) and labour costs due to its poor management and planning etc.

46.  They also agree that the Message could mean GFGW unnecessarily increased its costs.  What is in dispute is whether the Message also means that GFGW would pass the wasted costs to its customers (implying Cobow as one on them).

47.  After considering the relevant legal principles, the Message and the E-mail as a whole, I agree that the Message does contain all the meanings as alleged by GFGW in paragraph 5 herein.  If one accepts that GFGW is not an effective and efficient corporation and has thereby wasted a lot of resources and labour costs, an ordinary and reasonable reader would naturally think of who should bear such extra costs.  There is no mention in the E-mail that GFGW would absorb the extra costs by itself.  This ordinary and reasonable reader would naturally think that GFGW would most probably pass the extra costs to the customers.

48.  One should also bear in mind that the E-mail was addressed to Alaric Lai of Cobow which was a customer of GFGW.  When a customer reads an e-mail commenting on his supplier’s extra costs due to inefficient management, he would be most worried that such costs would be ultimately borne by him.

Is the Message defamatory? 

49.  On the determination of whether the words are defamatory, Roberts CJ had this to day in Sim Hok Gwan and Tin Tin Yat Po Limited & Anor, HCA 287/1979:-

“It is for the plaintiff to establish that the words complained of are defamatory. The classic test, as set out by Lord Atkin in Sim v Stretch is whether the words tend to lower the plaintiff in the estimation of right-thinking members of society generally.

The question of whether words are defamatory will depend to some degree on the occupation of the plaintiff.  As a matter of common-sense, it would not be defamatory of a professional footballer to say that he is not fit to fly an aeroplane, though it would be of a professional pilot.

In general, it is defamatory to impute to a professional man a lack of knowledge, skill, judgment or efficiency in the conduct of his professional activities.  (Drummond-Jackson v British Medical Association).  This may be said to apply particularly to a doctor, on whose competence the lives of others so often depend.”

50.  I have no difficulty in reaching the conclusion that the Message is defamatory.  GFGW is a business entity.  The Message is an attack on its efficiency in management and planning and is an allegation that its wasted costs would be passed onto the customers.  Such a meaning would no doubt lower GFGW in the estimation of right-thinking members of the society.

Whether the Message is true in its natural and ordinary meaning?

51.  If Yeung can prove that the Message is true in substance and in fact, he will have the defence of justification.

52.  The burden of proof is on Yeung.  This is clear from paragraph 11.4 of Gatley On Libel And Slander (12^th edition):-

“In England and Wales and most other common law jurisdictions, a defamatory imputation is presumed to be false. Therefore, the burden is on the defendant to show that the imputation is substantially true.”

53.  On the defence of justification, Yeung provided the following particulars of truth in his Amended Defence:-

(a) GFGW has 20 years’ experience in the design, production and installation of shop windows and display windows.

(b) GFGW lacks the machines for grinding the glasses provided by the suppliers and as a result has to throw away glasses whose sizes do not fit.

(c) The quantity of glasses discarded by GFGW each year is not a small quantity.

(d) If GFGW has a “45 degree Slanting Side Machine (45度角斜邊機)” and a “Glass Grinding Machine (玻璃直邊機)”, the glasses, which would have been discarded, could be reworked and improved, thereby reducing the quantity of glasses that would have been wasted.

54.  The fact that GFGW has 20 years’ experience and it does not have a “45 Degree Slanting Side Machine” and a “Glass Grinding Machine” is not in dispute.  But I find Yeung failing to prove other particulars of facts put forward by him.  Apart from Yeung’s own saying that 4 to 5 out of 20 glasses would be wasted each day, there is not any supporting evidence proving how many glasses were wasted each year.  Even assuming a certain quantity of glasses was discarded, it is entirely not clear whether this was due to faulty sizes as alleged by Yeung.  Also it is not clear whether a “45 Degree Slanting Side Machine” and a “Glass Grinding Machine” would save the glasses whose sizes did not fit.  Yeung’s so-called particulars of truth in fact are no more than pure allegations.  He is unable to provide any concrete evidence to substantiate.

55.  I find Leung’s evidence more logical and reasonable.  In this case, we are talking about tempered glasses used for shop windows or display windows.  These must be of sufficient strength so as to fit the intended purpose.  Once the tempered glasses had been processed into the required sizes by suppliers, no further grinding or cutting should be done as these might make them easier to break.  I accept that GFGW relied more on their suppliers such as “新李英” and “藝華” for provision of glasses of suitable sizes instead of GFGW itself taking the trouble of reworking on the glasses.  Yeung’s saying that these suppliers would allow 2 mm discrepancy in the glasses is a pure allegation without factual basis and does not make sense.  If the 2 mm discrepancy amounts to a defect as alleged by Yeung, one would expect GFGW to tell its suppliers to improve and replace instead of accepting the defective goods and then throwing them away.  I see no reason why GFGW would agree to re-order from the same suppliers and pay them a second time if it was the suppliers’ fault in failing to provide the correct sizes.

56.  I find Yeung unable to establish that the Message is true or his comments are fair.

57.  Counsel for Yeung criticised Leung as being inconsistent in his evidence.  I do not agree to such an observation.  Leung said under cross-examination that in GFGW’s dealings with “新李英” and “藝華” for 20 to 30 years, there had not been any disputes about discrepancies in the sizes of the glasses.  Later on, Leung admitted that there had been occasions of discrepancies in the sizes of the glasses due to mistakes made by “新李英” and “藝華”. I do not think that the two parts are inconsistent with each other.  The fact that there were discrepancies in the sizes of the glasses did not necessarily give rise to disputes between the parties.  If the parties could solve the problem amicably, there might not be any disputes.

58.  Another criticism made by counsel for Yeung is in relation to Leung’s supplemental witness statement where he said once the tempered glasses had been processed into the required sizes, no further grinding or cutting should be done as these might make them easier to break, especially the sides or the corners.  Counsel said this conflicted with paragraph 5 of the Amended Reply where it was pleaded that the tempered glass will likely crumble into small granular grit if any cutting/grinding applied to the edge of the same is more than 1 millimetre.  With respect, I do not see any conflict between the two parts.  Instead, I would say that they supplement each other.

Whether Yeung has the defence of qualified privilege?

59.  Yeung also relies on the defence of qualified privilege.  His version is that his younger brother “楊健良” had told him that Cobow was trying to set up its glasses installation department.  Therefore, he sent the E-mail to Alaric Lai with the intention of seeking employment in Cobow.  He was just suggesting how the efficiency and cost-effectiveness of Cobow’s glasses installation department could be raised.

60.  On the issue of qualified privilege, I have considered paragraph 14.7 of Gatley On Libel And Slander (12^th edition):-

“The reason for the defence.  Statements published on an occasion of qualified privilege “are protected for the common convenience and welfare of the society”.

It was in the public interest that the rules of our law relating to privileged occasions and privileged communications were introduced, because it is in the public interest that persons should be allowed to speak freely on occasions when it is their duty to speak, and to tell all they know or believe, or on occasions when it is necessary to speak in the protection of some (self or) common interest.

In such cases no matter how harsh, hasty, untrue or libellous the publication would be but for the circumstances, the law declares it privileged because the amount of public inconvenience from the restriction of freedom of speech or writing would far out-balance that arising from the infliction of a private injury.

It may be unfortunate that a person against whom a charge that is not true is made should have no redress, but it would be contrary to public policy and the general interest of business and society that persons should be hampered in the discharge of their duty or the exercise of their rights by constant fear of actions for slander.

It is better for the general good that individuals should occasionally suffer than that freedom of communication between persons in certain relations should be in any way impeded.  But the freedom of communication which it is desirous to protect is honest and kindly freedom.  It is not expedient that liberty should be made the cloak of maliciousness.

The principle on which these cases are founded is a universal one, that the public convenience is to be preferred to private interests and that communications which the interests of society require to be unfettered may freely be made by persons acting honestly without actual malice notwithstanding that they involve relevant comments condemnatory of individuals.”

61.  The key component of the defence of qualified privilege is “the duty to speak”.  The test suggested by Lindley LJ in Stuart v Bell [1891] 2 QB 341 is:-

“would the great mass of right-minded men in the position of the defendant have considered it their duty under the circumstances to make the communication?”

62.  Yeung said he was sending the E-mail to Cobow for the purpose of seeking employment.  It was an unsolicited act on the part of Yeung.  When seeking employment, I find it natural and reasonable for Yeung to describe his work experience and strengths in the E-mail so as to impress Cobow.  But it would be going too far and is an abuse of language for one to say that Yeung was under any duty, be it legal, social or moral, to comment negatively on his current employer’s lack of efficiency and cost-effectiveness, especially when there was not any factual basis for such comments.  If Yeung had refrained from making the negative comments in the E-mail about GFGW, no one could reasonably regard this omission as a breach of duty.  I do not agree there was any duty on the part of Yeung towards his potential employer Cobow which justifies the granting of qualified privilege.

63.  Besides, the defence of qualified privilege requires that there must be some interests to protect.  In Hunt v Great Northern Ry [1891] 2 QB 189, Lord Esher said:-

“A privileged occasion arises if the communication is of such a nature that it could be fairly said that those who made it had an interest in making such a communication, and those to whom it was made had a corresponding interest in having it made to them. When those two things co-exist the occasion is a privileged one.”

64.  Yeung might have an interest in obtaining an employment from Cobow but I do not accept that he had an interest in making the negative comments in the E-mail.  These are wholly unnecessary for the purpose of seeking employment.  I do not see there was any corresponding interest on the part of Cobow to read the negative comments in the E-mail either.  When deciding whether they should hire Yeung, no reasonable person would regard GFGW’s efficiency and cost-effectiveness as a relevant factor.

65.  As Lord Shaw put it in Adam v Ward [1917] AC 309 at 348:-

“If, accordingly, and in so far as the communication deals with matter not in any reasonable sense germane to the subject-matter of the occasion, the protection is gone: The occasion with its privilege does not reach a communication upon this foreign and totally unconnected matter.”

66.  I have come to the conclusion that Yeung’s seeking of employment with Cobow is not an occasion for which the defence of qualified privilege is available.  Further, the comments on GFGW’s efficiency and cost-effectiveness are not connected to Yeung’s seeking employment.

Quantum of damages

67.  Having come to the conclusion on the liability of Yeung, I now turn to the quantum of damages that should be awarded to GFGW.

68.  In Yokview Company Limited v Lo Ying Kit Henry t/a AGT & Others, DCCJ 5136/2009, the 3 defendants colluded and sent a defamatory e-mail to the plaintiff’s overseas customers.  The 2^nd defendant was an ex-employee of the plaintiff.  Deputy Judge J Wong awarded compensatory damages in the sum of HK$100,000 and aggravated/exemplary damages in the sum of HK$200,000.  These figures were not reversed when the case went to the Court of Appeal.

69.  The learned deputy judge considered a number of authorities before reaching his conclusion:-

“(a) In Hung Yeung Chan Robert v Hong Kong Standard [1996] 4 HKC 519

“ ... The objective is to ‘restore the plaintiff, as far as money can do so, to the position he would have been in if the tort had not been committed ... Where there has been no retraction or apology, an order for damages is the only solution available to the plaintiff ...

In the recent Court of Appeal decision in Cheung Ng Sheong Steven v Eastweek Publisher Ltd [1995] 3 HKC 601, it had to consider the question of damages for libel. It accepted ... the submission that:

... damages for libel must provide for several disparate elements, not only damages to esteem and reputation.  They also ‘must be sufficient to publicly and demonstratively and absolutely vindicate the plaintiff and to compensate for seriously injured feelings ...”

(b) In Downtex v. Flatley [2004] EWHC 333 QB, it was said that:

“26. Publication to a relatively small number of persons who are already in a business or professional relationship with a claimant may be serious or worse than a wider publication to persons who are not, and are unlikely to contemplate being, in such a relationship ...”

70.  Another case authority referred to by counsel for GFGW is Ming Kee Manufactory Limited v Man Shing Electrical Manufactory Limited, HCA 4583/1991, which concerned a defamatory letter published by the defendant to the mutual business associates of the parties.  Deputy Judge Jones awarded damages to the plaintiff in the sum of HK$50,000.

71.  Counsel for GFGW also referred me to other case authorities which include Wong Hoi Yue & Others v Lam Chung Shing (DCCJ 4045/2010) and Choi Yuet Wing v Tang Sai Cheong (DCCJ 567/2013) for the purpose of assessing quantum of damages.  I am of the view that the backgrounds of the defamatory statements in these two cases are quite different from the scenario in front of me.

72.  I bear in mind that every case of defamation has its own particular background and it is impossible to generalise a range of award of damages.  This has been stated in paragraphs 9.10 and 9.11 of Gatley On Libel And Slander (12^th edition):-

“Paragraph 9.10

Relevance of awards in other defamation cases.  Juries should not be told about the awards of other juries in defamation cases as a means of indicating a figure.  Past awards would be wholly unreliable because they date from the days when juries received little or no guidance on damages and the Court of Appeal applied only the lightest restraint on excessive award, and even more recent awards would give very little assistance.  Cases where awards have been made by a judge will provide some guidance to juries.  The corpus of awards is growing, particularly as few cases are now heard by juries than was previously the case but even as it develops its value will be limited ...”

Paragraph 9.11

Other guidance to jury.  Matters such as the seriousness of the libel, the range of publication and the behaviour of the parties are likely to be relevant to the assessment of damages in any case and will no doubt be brought to the attention of the jury.”

73.  I accept that the E-mail sent by Yeung to Alaric Lai would give a negative impression of GFGW and would harm its reputation. But it is difficult to conclude whether the reduction in the orders placed by Cobow was due to the contents of the E-mail or some other reasons.

74.  I bear in mind that the sending of the E-mail was a one-off incident and that it was directed to Alaric Lai only.  The seriousness of the incident lies with the fact that the recipient Alaric Lai is of Cobow which was an important and long term customer of GFGW for at least seven years.  And Yeung sent the E-mail while he was still an employee of GFGW. The mitigating factor is that Leung said Alaric Lai did not believe the contents of the E-mail.  With respect, I would regard Leung’s saying as wishful thinking on his part.  I do believe that the Message in the E-mail did have an adverse impact on the reputation of GFGW.  In the circumstances, I believe an award of damages in the sum HK$100,000 should be able to compensate the harm caused to the reputation of GFGW and reflect the seriousness of the incident.

75.  I am aware of GFGW’s request for an award of aggravated damages but I do not think it is appropriate in the present case. An award of this kind is for compensating a plaintiff’s injured feelings.  As GFGW is a corporate claimant, it should not be entitled an award of this kind. Paragraph 9.20 of Gatley On Libel And Slander (12^th edition) is relevant on this aspect:-

“Paragraph 9.20

Aggravated damages and corporate claimants. There is some uncertainty whether aggravated damages can be recovered by a corporate or other inanimate legal entity. In Collins Stewart v The Financial Times (No. 2) Gray J. concluded that such damages could not be recovered because:

“the defining characteristic of an award of aggravated damages is that its function is to provide a claimant with compensation (‘solatium’) for injury to his or her feelings caused by some conduct on the part of the defendant or for which the defendant is responsible.  The concept of injury to feelings runs through the cases, whether caused by the high-handed or insulting behaviour of the defendant either before or after publication or by repetition of the libel, or by persistence in a plea of justification or by a failure to apologise.  It seems to me that the essence of an award of aggravated damages in libel is not making good damage to the claimant’s reputation as such but rather compensating the claimant for the extra injury to his or her feelings.”

76.  The Hong Kong Court of Final Appeal adopted a similar approach in Oriental Daily Publisher Ltd v Ming Pao Holding Ltd [2012] 15 HKCFAR 299.

ORDER

77.  In light of what I have said, I allow the plaintiff’s claim and order as follows:-

(a) Judgment be entered against the defendant that the defendant do pay the plaintiff damages in the sum of HK$100,000; and

(b) There be interest on the judgment sum at judgment rate from the date of writ of summons until payment in full.

78.  Costs should follow the event.  Save and except for previous costs orders made by the court, I make a costs order nisi that the defendant is to pay the costs of this action, to be taxed if not agreed, with certificate for one counsel.  The costs order nisi shall become absolute in the absence of application to vary within 14 days.

79.  Lastly, I thank counsel for both sides for their assistance and thorough submissions.  Their points had been duly considered before I reached my conclusion.  It is unnecessary and counterproductive for me to set out each and every point taken by them.  I believe the above analysis sufficiently disposes the matter.