RIGOS US CPA REVIEW OPERATED BY TOP EXPRESS CONSULTANTS LTD. v. TAI LO NGAN YING CONNIE

DCCJ 4065/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATION REGION

CIVIL ACTION CASE NO 4065 OF 2002

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JUDGMENT

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1. This is a suit for damages in libel. Both parties elected not to have a jury trial and asked this matter to be heard and determined in the District Court.

Background Information

2. Top Express Consultants Limited, the plaintiff, is a company run by a practicing barrister. Since December 1998 Top Express has been authorized by an American company, Rigos US CPA Review (hereinafter referred to as "Rigos" for short), as its sole agent in Hong Kong to run examination review courses to assist candidates to sit for some of the American professional examinations such as the US Certified Public Accountant examination (hereinafter called "US CPA examination" for short).

3. The candidates intending to sit for the examinations have to obtain confirmation with a separate American organization to confirm their basic academic attainments before they would be allowed to sit for the examinations. The candidates have to enrol with the American examination authority by themselves for the relevant examination. Should the candidate pass the relevant examination the candidate has to take up practical apprenticeship before he or she can practice in the relevant profession.

4. Lectures for these examination review programmes were delivered by part-time lecturers selected by Rigos. The lectures were scheduled on a tightly packed timetable. The time for the lectures was, contractually, subject to change.

The Events

5. The defendant was a graduate of the Chinese University of Hong Kong. She has obtained a Bachelor degree in Social Sciences in 1988. Since graduation she worked mainly as a credit officer of banks. Between 1995 and 1999 she read her Master degree in Business Administration with the Open University. She felt the need to advance her academic credentials in other fields and decided to take up further courses for the purpose of obtaining management and accounting qualifications.

6. In March 2001 the defendant saw an advertisement banner in the street and came to know about the plaintiff. The defendant attended the introduction seminars organized by the plaintiff in a hotel on 17 March 2001 and 17 April 2001. In the two introduction seminars the defendant was given introduction talks, introduction materials about the course and was allowed to attend the lectures delivered to the current students on the same day in the next room.

7. At the 2nd introduction seminar on 17 April 2001 the defendant registered herself as a student of the plaintiff's review course for 4 subjects with a view to sitting the US CPA examination held in November 2001 in Washington State. The 4 course subjects the defendant has chosen were business law, auditing, financial accounting and accounting & reporting. For enrolling in 4 subjects all at the same time the defendant was given a HK$2,000 discount in her course fees. As she enrolled together with 2 other students she was given a further HK$2,000 reduction. She paid a total HK$21,000 for the lectures and HK$2,400 for the study materials.

8. According to the time-table there were roughly 7 to 9 lectures for each subject, with a lecture time of 3 1/2 hours to 10 hours a day held mainly on Saturdays and Sundays, spreading over a period of roughly 2 weekends within a month for each subject, requiring a total of 4 months for the completion of the review course.

9. The defendant commenced taking her lessons for business law on 21 July 2001. After the first few lessons the defendant came to the conclusion that Mr. Peter Paget, the speaker lecturing on the subject, was not conducive to better understanding of the examination and the examination skill required. Mr. Paget simply read through the study materials without elaboration. Students were unable to obtain much assistance on their studies from him.

10. On 24 July 2001 the defendant telephoned the plaintiff to complain about the teaching of Mr. Paget. The defendant subsequently decided to abandon her last lesson of business law scheduled on 4 August 2001. On 30 July 2001 the defendant wrote to the plaintiff to formally complain about the teaching of Mr. Paget and requested for conversion to the self-study programme.

11. Some of the students were highly dissatisfied with the teaching of Mr. Paget. On 4 August 2001 they had a row with the director of the plaintiff about the lectures of Mr. Paget at the lecturing venue and mediation was required from the police.

12. As a result of the incident on 4 August 2001 the director of the plaintiff contacted the American organizer and decided to provide 2 make-up classes for business law on 6 October 2001 and 7 October 2001. The lecture time was subsequently rescheduled to 25 August 2001 and 26 August 2001. Messages of the make-up classes were circulated to the students by e-mail in the late afternoon of 4 August 2001.

13. The last date for enrollment of the November US CPA examination was 14 August 2001. On the same day the defendant wrote to the plaintiff to complain she should not be forced to absorb 6 chapters of reading material on business law within the 2 make-up lessons on 25 August and 26 August. She demanded a refund within 7 days. As the defendant got no reply from the plaintiff, she sent a reminder on 22 August 2001. Apparently the director of the plaintiff was in Canada at the time. As positive response was not forthcoming, the defendant lodged a complaint with the Consumer Council on 27 August 2001.

14. The plaintiff became aware of the Consumer Council complaints made by some students and wrote on 27August 2001 to all its business law students to warn them against making improper or misleading complaints.

15. On 7 September 2001 the defendant received written message from the director of the plaintiff to notify her that she had not put in any written request to defer her classes. On the same day the defendant wrote back to the plaintiff for permission to defer her lectures on all 4 subjects to the following year. On 12 September 2001 the plaintiff replied by e-mail that the defendant was allowed to defer her classes for 3 subjects: business law, auditing and accounting & reporting to the examination cycle in May 2002; but the defendant was not allowed to defer her financial accounting lessons as the defendant had failed to put in her written application for deferment 2 weeks before the commencement of the financial accounting class on 1 September 2001.

16. After receiving the plaintiff's reply of 12 September 2001 the defendant wrote on the same day to ask her application for postponement of her financial accounting lectures be reconsidered as she had previously spoken to the staff of the plaintiff even though her formal written request was made late in time. This request of the defendant was refused by the plaintiff.

The Present Claim

17. On 5 October 2001 the plaintiff brought the present proceeding to sue the defendant in libel about the contents of her complaint letter of 27 August 2001.

18. The portions of the letter which the plaintiff complained about were:-

" (i) Unfortunately, I faced unfair treatments from Rigos US CPA Review Course and therefore, I am now requesting your help to get a refund.

(ii) Throughout the seminar, he persuaded us to quickly register for the program.

(iii) However, once I paid the registration fee, Rigos US CPA Review Course did not provide services that meet my satisfaction.

(iv) The staff in Rigos is not trained to answer the student's queries. The objective of the school is to earn money other than helping the students.

(v) Course schedules have changed several times before and after class start.

(vi) The qualification for taking the exam in USA has changed and Rigos did not inform us in time.

(vii) The arrangement of the lecture was unacceptable. The lecturer was not trained to teach and has no experience in taking the AICPA exam.

(viii) This seems to be cheating potential customers.

(ix) This arrangement is totally unfair to us. "

19. Defamation is the publication of material with a defamatory imputation. Defamatory imputation is what tends to lower a person in the estimation of others, or cause him to be shunned or avoided; or exposes him to contempt or ridicule. Publication is simply the communication of the material to a third party.

20. It is the plaintiff's case that the natural and ordinary meaning of the words of the defendant's complaint letter suggested the plaintiff's conduct was improper and inappropriate; that the plaintiff had misled and/or deceived the defendant. By way of innuendo the words were understood to mean the courses were run and conducted in an irresponsible or unprofessional manner. In the plaintiff's contention the plaintiff has been brought into public scandal, odium and contempt or mistrust and that its reputation has suffered damage, distress and embarrassment.

21. Statements read in isolation could be out of context without going over the letter as a whole. The defendant's complaint letter of 27 August 2001 was obviously an attempt on her part to enlist the help of the Consumer Council to obtain financial refund from the plaintiff in respect of the courses which the defendant no longer wished to attend. In the letter the defendant complained of being unfairly treated by the plaintiff, that the services provided by the plaintiff were unsatisfactory to her and in her opinion the plaintiff's main objective was to earn money rather than helping the students to pass the examination.

The Defendant's grievances

22. The complaints the defendant had over the plaintiff's running of the examination review course were 5-fold:-

(a) The manner in which the course was run - she complained about the changes of the course schedules which upset her studying plan;

(b) The manner in which the lectures were delivered and the quality of the lecturer - she complained the course lecturer was not trained to teach and had no personal experience with the US CPA examination. She and her fellow students were dissatisfied with the 'teaching' provided by Mr. Paget and demanded a refund. Instead of providing a refund, the plaintiff chose to provide 2 make-up lessons running from 9 am to 10 pm over a period of 2 days. Alternatively the students were given an option to defer taking the courses to the following year. The proposed arrangement was unsatisfactory to the defendant as she found it difficult to absorb the subject of business law within 2 days. Further the postponement of her lectures to May 2002 would not have helped her as she has already enrolled herself for the US CPA examination in November 2001.

(c) The harshness of the refund policy - the defendant complained the terms for refund in the enrollment contract was stringent and harsh. Students were unable to seek any refund after attending the second class. The time frame in the schedule did not give students time to try out the quality of the teaching before opting for a refund. According to the enrollment terms, only 1/2 of the course fees would be refundable within a week of the commencement of the course. Such an arrangement is grossly unfair to the candidates.

(d) The standard of the support service provided by the plaintiff's staff in assisting the students after the student's enrollment in the examination review course - the defendant complained that after she had paid the courses fees of HK$21,000 and HK$2,400 for the reading materials, (i) the plaintiff did not provide services that met her satisfaction; (ii) the staff of the plaintiff was not trained to answer the students' questions; and (iii) the plaintiff did not inform the candidates of the change in qualification for taking the examination. Thus in her assessment she believed the plaintiff's key objective was to earn money rather than helping the students to pass their examinations.

(e) Misleading the potential students of the quality of the lecturer - the make-up classes delivered on 25 and 26 August 2001 were given by the US organizer of the programme. The teaching standard of the lecturer in the make-up classes was considered to be good by those attending the class. The plaintiff had advertised the said lectures to the potential candidates. Those potential candidates who attended the make-up classes would be under a misapprehension of the general standard of the lecturers.

Court's Findings

23. I find the following statements not defamatory, as they are statements of facts of substantial truth. The comments or opinion over the facts were fair comments of the defendant :-

(a) The statements in the 2nd paragraph at page 1 of the defendant's letter dealt with the manner of the plaintiff's recruitment exercise

The 2nd paragraph of the defendant's letter read:-

" Rigos US CPA Review Course has held an open house seminar earlier this year at the coffee shop in Marco Polo Prince Hotel, T.S.T. I attended the seminar and Mr. Stephen Yam was the speaker. He briefed the group of us attending the seminar, about the program, which involve(d) 4 courses, showed a sample of the course materials and praised about the quality of the instructors. But the briefing was short, which took about 20 minutes. Throughout the seminar, he persuaded us to quickly register for the programme because the US rules governing the AICPA are subject to change and if we do not act quickly, we will not be able to enrol under the existing rules. When we asked him questions, he would say that if we enrolled in the program, they can do everything to solve our problems and concerns."

There was no dispute that the plaintiff did tell all those attending the introduction seminars that the examination rules were subject to change and when the rules were changed those who were currently qualified to sit the examination might find themselves unqualified. This is a true statement of what had been talked about by the plaintiff in the open seminar.

The plaintiff suggested the phrase " Throughout the seminar, he persuaded us to quickly register for the program" in this paragraph carries an innuendo of fraud and deceit of pressurizing the potential candidates into a quick decision.

Reading the paragraph as a whole the plaintiff had cited the phrase out of context. The defendant had simply stated the fact that she had been told by the plaintiff that the examination rules in different States are subject to change, should students fail to act quickly they might not be able to take benefits under the current rules.

Whether "persuasion" constituted a statement of fact depends very much upon the manner in which the speech was delivered and the message conveyed across to the audience. As a statement of opinion "persuasion" is the subjective perception of the defendant. I accept the defendant's evidence that the passage constituted persuasion to her in her opinion and it is a fair comment on her part to conclude the plaintiff's speech has persuaded her into signing up for the course.

In April 2001 the defendant was reading her financial analyst programme. She was required to sit for her financial analyst examination in June 2001 and in June 2002. I accept the defendant needed persuasion and comforting encouragement to accept the challenge of taking the examination for another professional qualification in November the same year.

(b) The statements in paragraph (1) at page 2 of the defendant's letter touching upon the manner in which the course was run.

In para (1) the defendant wrote:-

" Course schedules have changed several times before and after class start. This causes a problem because when I went to the seminar, Rigos has handed out a course schedule. I have considered that it fit into my schedule before enrolling into the course. However, just a few weeks before the class start, the schedule has been changed, which does not fit into my schedule and screws up all my planning."

In this paragraph the defendant recited the fact that the course schedules have been changed a number of times. I do accept that, when she enrolled on 17 April 2001, the staff of the plaintiff had erroneously supplied her an out-dated timetable of 13 March 2001. Subsequently the schedule of the lectures was found to have been changed on 17 March 2001. Subsequent amendments were also made on 16 May 2001 and 4 August 2001. Contractually parties have agreed the schedule was changeable, as stated at the bottom endorsement of the schedule. I have reservation about the enforceability of the word "without notice" in light of the standard of reasonableness required in the Supply of Services (Implied Terms) Ordinance Cap 457. This is however beyond the scope of my consideration in the present defamatory suit, save for me to say that I do accept paragraph (1) is a true statement of fact that the timetables had been changed a number of times. It is also a true and honest statement of opinion of the defendant that her studying plans had been up-set with the change in the schedule of classes.

(c) The statements in paragraph (3) at page 2 of the defendant's letter dwelt upon the manner in which the lecture was delivered and the quality of the lecturer.

In this paragraph the defendant wrote:-

"The arrangement of the lecture was unacceptable. The lecturer was not trained to teach and has no experience in taking the AICPA exam. He has no knowledge of AICPA at all. I have complained to Rigos about my concerns but all they did was ask me to be patient and that they are doing what they can to improve. But after attending 4 weeks of classes, the situation still has not improved. In the end, a group of students got together to demand for a refund. However, Rigos would not consider this as an option. They would rather provide a 2-day make up courses from 9am to 10pm to cover the materials that were taught in the 4 weeks we spent in class. This compensation is unrealistic. They also offered the alternative asking us to defer taking the courses till next year 2002 when they hire a new instructor for the course. But the problem is that I have already submitted my application to the November 2001 exam and deferring is no use to me."

I accept it was a fact that the students were highly dissatisfied with the suitability of Mr. Paget as a lecturer in teaching the examination review course for business law. According to the information supplied, Mr. Paget is an American attorney admitted to practise as an attorney and counsel at law by the Supreme Court of Washington in the year of 1967. There was no information on his actual field of practice. From 1997 to 2000 he taught in the Universities in Beijing and Zhongshan as a foreign expert. There was no information about his expertise in the accounting field or the business law. Nor was there any information about his experience with the US CPA examination.

The students felt so aggrieved about Mr. Paget's teaching that they summoned the assistance of the police during the last lecture on 4 August 2001. Quite a few of the students had attempted to seek refund from the plaintiff. Though the plaintiff did not accept Mr. Paget to be an unsuitable candidate for the teaching job, it nevertheless accepted substitution lessons ought to be arranged and students were allowed to re-take the course on business law for the US CPA examination in May 2002.

I accept the defendant gave her honest assessment of the teaching capability of Mr. Paget in para(3) of her letter. The subsequent arrangements made by the plaintiff for substitution lessons imposed a very tight time schedule on the defendant for her to study her business law materials. The deferment of her business law lecture to the year of 2002 did not suit her purpose as the defendant had already enrolled herself with the American examination authority for the November examination and the deferment of the lectures to 2002 would not have helped her to sit the US CPA examinations in November 2001. Also she had her financial analyst examination due in June 2002.

From the sequence of events, the defendant had lodged complaints to the plaintiff about the teaching of Mr. Paget on 24 July and 30 July 2001. The plaintiff gave her no response. The plaintiff only arranged the make-up classes on 4 August 2001 after the students had summoned the assistance of the police. These make-up classes were delivered on 25 August and 26 August, five days before the commencement of the financial accounting lessons. These are all statements of facts on what had actually transpired. One could certainly understand the frustration the defendant experienced at this point of time knowing full well that she had already enrolled herself in the US CPA examination in November 2001 and she was not available for the examination in May 2002 in light of her commitment with her financial analyst examination in June 2002.

(d) The statements in paragraph (5) at page 2 of the defendant's letter dealt with the harshness of the refund terms of the plaintiff.

Para (5) at page 2 of the defendant's letter reads:-

" The refund terms are stringent. We were not able to receive refund after attending the second class. This does not give me enough time to try out whether the course is a good tool in helping me to prepare for the exam. After attending 4 weeks of classes, it's enough time to know if the course is helping me or not but too late to get a refund according to the contract we signed. I have called Stephen Yam after the first week of course commencement and asked for refund. He said that it was too late. According to the contract, only 1/2 course fee will be refunded within the 1st week of course commencement. This arrangement is totally unfair to us."

According to the contractual terms contained in the registration form the refund condition was written as follows:-

" Tuition refund in case of withdrawal is prorated based upon time. A minimum of one-sixth of total payable tuition fees plus registration fee, textbook/material fee is not refundable. After the start of class on 21 July 2001, only 50% of the total tuition will be refunded and no refund after the first week of class. Written notice of withdrawal must be delivered to the course director in our office to be effective ..... I must get the approval from Rigos in writing 2 weeks after the first class in order to change the attendance of any subject."

Two aspects were touched upon in this clause: the right to a financial refund and the right to deferment of the lessons. Parties have agreed contractually to a minimum liquidated damage sum of one-sixth of the fees when a candidate is seeking a refund. After the commencement of the class on 21 July 2001 a student would only be entitled to a 50% refund of the fees. No refund would be granted after the 1st week of class. Legally the clause is in the nature of a liquidated damage clause and an exemption clause. To be operative it has to surpass the reasonableness test within section 5 of the Supplied of Services (Implied Terms) Ordinance Cap 457 and section 5 of the Control of Exemption Clauses Ordinance Cap 71.

As a consumer the defendant formed her subjective assessment that the exemption clause limiting her ability to get a full refund to be unfair as she was not getting what she was expecting to get for the business law lectures; yet she was contractually bound to waive her right to a financial refund.

On the other hand one would have to balance the fact that the plaintiff, being an organizer for the course, had to sign for the engagement of the lecturers well before the commencement of the lectures. The plaintiff's commitment to the lecturers would have to be formalized well before the commencement of the lectures. Depending upon the dates on which the plaintiff committed itself contractually to the respective lecturers, it might not be inequitable or unfair for the plaintiff to insist on no refund but to grant a deferment of the lectures in lieu.

The defendant was given the option to enrol for one subject at a time. She elected on her own volition to enrol for all 4 subjects at the same time to take benefit of the HK$2,000 discount in her course fees.

Regarding the defendant's contractual right to defer her lessons, the plaintiff insisted all along the defendant had no right to seek deferment of her financial accounting lectures as she had not made the deferment application 2 weeks before the lectures commenced. In the defendant's e-mail message of 30 July 2001 she had evinced her intention to change to a self-study programme. In her message of 14 August 2001 she stated she no longer wished to take any further lesson and demanded a refund. Had the parties sit down to work out a resolution at the time, the plaintiff could have pointed out to the defendant her contractual right to apply for deferment, and the defendant could have made her application for deferment of her financial accounting lessons well within the 14 days period.

Without finanlising on whether it was the plaintiff's repudiation of its contractual obligations to provide lectures according to the timetable without changes unless with reasonable notice and to provide a lecturer of reasonable competence and skill or whether it was the defendant's election to forgo her rights to attend the lecture, I accept the defendant did entertain an honest belief that she has not got what she had bargained for in the business law lectures and she genuinely felt aggrieved for not having been treated fairly according to her own judgment.

Defence to Defamation

24. In a defamatory suit, the defendant would not be held liable for the imputation contained in the publication should the statements published be substantially true. Equally a defendant would be exempted of liability should her comments constitute fair comment in the context in which the comments were made.

25. As Lord Nicholls said in Cheng v Tse [2000] 3 HKLRD 418 at page 430, " The defence of fair comment envisages that everyone is at liberty to conduct social and political campaigns by expressing his own views, subject always, and I repeat the refrain, to the objective safeguards which mark the limits of the defence.....". At page 438 of the judgment he further said" a comment can lose its immunity only by proof that the defendant did not genuinely hold the view he expressed. Honesty of belief is the touchstone. Actuation by spite, animosity, intent to injure, intent to arouse controversy or other motivation, whatever it may be, even if it is the dominant or sole motive, does not of itself defeat the defence. However, proof of such motivation may be evidence, sometimes compelling evidence, from which lack of genuine belief in the view expressed may be inferred. Proof of motivation may also be relevant on other issues in the action such as damages."

26. I have no reservation to hold the proper running of a learning institute is a matter of public interests, the criticism of which if made honestly on substantially true facts ought not be deterred.

27. It was the plaintiff's contention that the defendant did not hold an honest belief of her comments since her ulterior motive was for the purpose of seeking a financial refund from the plaintiff through the Consumer Council. It was suggested that the defendant's sole purpose was to seek a financial refund because she found herself to have wrongly assessed her ability to complete her studies in light of her other commitments in her financial analyst studies. This, according to the plaintiff, was supported by the defendant's own admission in her message of 7 September 2001 in which she stated that she was unable to prepare herself for the examination on account of her time constraint. One must not lose sight of the fact that the defendant had in fact written on 30 July 2001 to complain about the poor quality of Mr. Paget's teaching and asked to convert to self-study programme. On 14 August 2001 she again wrote to voice her discontent and asked for a refund of the course fees. The lack of time was not her concern nor the subject of her discussion with the plaintiff in the months of July and August. In any event, in the words of Lord Nicholls, a defendant would not be deprived of her defence of fair comment even though her ultimate intention was to promote a different objective, i.e. to seek a refund in the present case, as long as her belief was honestly held.

28. Regarding the defendant's complaint that she had not received the service she expected of the plaintiff, she quoted a few incidents including:-

(i) the inefficiency of the Paget lectures was not remedied quickly;

(ii) The defendant's request for refund was not handled efficiently. This happened at the time when the plaintiff's director was not in Hong Kong. The plaintiff's staff was unable to handle the defendant's request either through lack of communication or through lack of proper management;

(iii) The staff of the plaintiff was not able to answer some of the questions of the students regarding the filling in of the examination enrollment form.

29. The defendant gave her own comments that she was not satisfied with the service provided to her. I accept there was no malice on her part in concluding that she was not satisfied with the service she received from the plaintiff.

Defamatory portions

30. Nevertheless there are 3 aspects of her letter which I accept to be defamatory. They were:-

(i) there was no factual basis for her statements made in para (2) at page 2 of her letter which read:- " The qualifications for taking the exam in USA has changed and Rigos did not inform us in time." The defendant's belief was apparently based on some hearsay information she got from her classmates, the source of which she was not able to produce in court.

(ii) There was no factual basis for her statement at para (4) at page 2 of the letter which reads:-

" The 2-day make up courses will take place on Aug 25 and 26 from 9am to 10pm. Considering that these are make up courses for students who were unsatisfied with the 4 weeks of classes, Rigos has sent advertisements to potential customers and ask them to attend the classes. This seems to be cheating potential customers."

Apart from making a bare assertion by way of her letter that potential customers had attended the make-up lectures the defendant was not able to provide any evidence that the plaintiff had advertised the lectures of 25 August and 26 August or that any of the potential customers had attended those 2 make-up lectures. She herself had not attended those 2 lectures.

(iii) There were insufficient objective facts for the defendant to form her opinion that the plaintiff's objective was to earn money rather than helping the students. There might have been inefficiencies in the planning, running and supervision in the running of the review course programme as well as the supply of support services. Nevertheless that does not justify one to conclude the programme did not render some help to some of the students. Generating profit is obviously one of the anticipated objectives of a trading entity. There was no evidence before this court about the fees charged and the standard of services provided by other institutes offering similar courses to enable this court to assess the magnitude of profits of the plaintiff.

31. The statements made at paragraphs (2) and (4) of the defendant's letter were made without factual basis. It would, therefore, not be open to the defendant to plead the defence of fair comment or qualified privilege in reporting mal practice of those with public responsibility.

32. In its letter of 13 September 2001 the plaintiff suggested it has no obligation to inform its students of changes of the rules made by the various State Examination Boards. An organizer of an examination review course would obviously have an obligation to inform its students of the change of the examination rules to enable the students to know if they meet the current rules of the examination boards. The attitude of the plaintiff in denying an obligation to inform the students of the current change of the examination rules suggested a disorientated goal of the plaintiff. On the other hand the plaintiff did exhibit some messages from other students thanking the plaintiff for providing the course. There were insufficient data for the defendant to conclude the plaintiff provided no help to the students. The defendant's statement of "(the) objective of the school is to earn money other than helping the students" cannot be qualified as a fair comment without stronger objective evidence to support the said contention. It also fell outside the qualified privilege scope, as the defendant's primary objective in her letter to the Consumer Council was to seek help to obtain a financial refund from the plaintiff.

Quantum of Compensation

33. Being satisfied that the two paragraphs, namely paragraphs (2) and (4) at page 2 and the phrase " The objective of the school is to earn money other than helping the students" at page 1 of the defendant's letter are defamatory, the defendant should be held liable to the plaintiff in libel in respect of the publication of the same.

34. There was no evidence to indicate the quantum for loss suffered by the plaintiff as a result of the statements made to the Consumer Council. In awarding compensation, I bear in mind the fact that:-

(i) the defendant's publication was made to the Consumer Council alone as opposed to publication to the world at large.

(ii) Enquiry by the Council to ascertain the truth is expected before further publication would be made to the public.

(iii) The plaintiff in its letter of 13 September 2001 did not refute the defendant's contention that the students were not informed of the current change of the examination qualification. Rather it was stated by the plaintiff in its letter of 13 September 2001 that, " only on a courtesy basis, we tried to inform our students about changes made by the various State Boards. We have no obligation to do that. Please identify where we have promised we have to provide information about change of rules to our students."

35. As the statements were published to the Consumer Council alone and the Council is tasked with an obligation to enquire into the complaint, there was no practical damage to the plaintiff's reputation. To discourage a disgruntled party from making statements without factual basis, I award the plaintiff a compensation in the sum of HK$3,000.

Costs Order

36. Though the defendant had published 3 statements which she could not justify, the rest of the complaints in her letters were justified for which she has succeeded in defending the plaintiff's claim against her. Neither of the parties was represented in the trial. I award the plaintiff the nominal costs of HK$1,000 for the present proceeding.

37. The order for costs is an order nisi which would become absolute should the parties make no application for variation of the said order within 14 days of the handing down of this judgment.