LAW KIN MAN FREEMAN v. CHAN KIN HUNG

DCCJ 4563/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4563 OF 2007

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DECISION

Background

1.  Mr. Law Kin Man Freeman is the assistant manager of a branch of Hang Seng Bank at Diamond Hill, Kowloon.  He has been working with the Bank for some 27 years, and working at the Diamond Hill branch for more than 7 years.  In September 2006, he agreed to give his own account number at the Bank to a longtime friend of his, Mr. Louis Wan, for a sum to be paid into his account for Mr. Wan. As a result, a sum of HK $700,000 was paid into Mr. Law's account in September 2006 by a cheque which was issued by Mr. Chan Kin Hung.  Mr. Law claims that he immediately transferred the sum of HK $700,000 back to Mr. Wan. 

2.  In November 2006, Mr. Law received a letter from a debt collector which was inserted into the letterbox of his home.  The letter referred to the sum of HK $ 700,000 which Mr. Chan had paid into Mr. Law's account, and demanded repayment from Mr. Law. Mr. Law also received a letter from solicitors acting for Mr. Chan demanding payment of the same amount of HK$ $700,000.  On 7 December 2006, Mr. Law instructed his solicitors to reply to the letter from Mr. Chan's solicitors, pointing out that the sum of HK $700,000 had been paid into Mr. Law's account pursuant to an agreement between Mr. Chan and Mr. Wan "in repayment of a debt due to Mr. Wan ".

3.  On 12 December 2006, Mr. Chan issued DCCJ 6082 of 20006 against Mr. Law, claiming that a sum of HK $700,000 had been paid by Mr. Chan to Mr. Law under Mr. Law's "duress, oppression or extortion" in conspiracy with Mr. Wan, and alternatively, that Mr. Law had assisted Mr. Wan in exacting duress, oppression or extortion. No particulars whatsoever were furnished as to the alleged duress, oppression or extortion.  At about the same time, Mr. Chan issued DCCJ 6288 of 2006 against Mr. Wan, on essentially the same ground, and seeking repayment of HK $700,000 from Mr. Wan. 

4.  Not satisfied with instituting legal proceedings and awaiting the determination of the court, Mr. Chan (accompanied by an unidentified male) delivered a letter to Mr. Law at the Diamond Hill branch of the Bank on 20 August 2007.  In the letter, Mr. Chan again demanded payment of the HK $700,000 on or before 27 August 2007, and notified Mr. Law that in default of repayment, Mr. Chan would instruct debt collectors to seek payment.  Mr. Chan also claimed in the letter that he had reason to believe that Mr. Chan had received benefits from the unlawful deposit of funds, and that he would report the matter to the Independent Commission Against Corruption.

5.  Not long thereafter, on 12 October 2007, Mr. Chan went to the Diamond Hill branch of the Bank at about 11 a.m. with 3 men.  They requested to see Mr. Law.  Fearing a disturbance of the Bank's business, Mr. Law invited Mr. Chan to discuss the matter elsewhere.  Mr. Chan, one of the 3 men who accompanied him, and Mr. Law then went to the Food Court nearby, leaving the two other men behind at the Bank.  At the Food Court, Mr. Chan repeatedly asked Mr. Law to repay the HK $700,000 to him as soon as possible.  Mr. Law explained that the matter had nothing to do with him and that it should be resolved through legal proceedings.  No agreement having been reached at the end of the discussion, Mr. Chan handed Mr. Law 2 copies of the identity cards of Kwok Shu Sum and Kwok Shu Keung, which were also letters of authorisation from Mr. Chan to the Kwoks to collect a debt of HK $700,000 from Mr. Law.  The Kwoks were the other 2 men who had stayed behind at the Bank when Mr. Law, Mr. Chan and his other attendant went to the Food Court.  Mr. Chan informed Mr. Law that the Kwoks would be seeking payment of the debt at the Diamond Hill branch of the Bank where Mr. Law worked.  Mr. Law called the police.  Mr. Chan and the man who had accompanied him followed Mr. Law back to the Bank.  Upon Mr. Law's arrival, Mr. Chan instructed the Kwoks who had remained behind at the Bank to lift up foam boards which they had with them.  The boards measured about 3 feet and 2 ½ feet, and had the words "羅健文還債" (Law Kin Man repay debt) on them.  A photocopy of the cheque issued by Mr. Chan to Mr. Law for the sum of HK $700,000 was attached to the foam board.  Policemen arrived at the scene.  The Kwoks left the Bank but continued to hold the foam boards standing outside the entrance of the Bank, and then on the pavement nearby.  In the meantime, Mr. Chan and his other attendant remained in the Bank and refused to leave.  Finally, Mr. Law's superior, the manager, spoke to Mr. Chan and asked whether he would return to the Bank if Mr. Law stopped working there, and Mr. Chan said that of course he would not.  Before Mr. Chan finally left the Bank, he left an envelope for the management of the Bank.  Mr. Chan also gave Mr. Law copies of three letters addressed to the compliance department, the security department and the personnel department respectively of the Bank.  These were the letters in the envelope which Mr. Chan had left for the Bank management.  The letters are all dated 10 October 2007, and the contents are identical.  They are referred to hereinafter collectively as "the Letters".

6.  In the Letters to the Bank, Mr. Chan referred to the fact that he had on 11 September 2006, under threats of an unidentified person, paid a sum of HK $700,000 into Mr. Law's bank account.  He claimed in the Letters that Mr. Law had informed him that the sum was a debt collected for Mr. Wan, that Mr. Law had no documents or evidence supporting the debt, and would not explain why the sum could not be paid into Mr. Wan's own account.  Mr. Chan claimed in the Letters that Mr. Law would not explain why a substantial amount of funds from an uncertain source should be deposited into his own account, without suspicion as to its source and legality.  Mr. Chan also claimed in the Letters that Mr. Law would not explain why he would deal with the funds in the absence of evidence that the amount was a debt, without satisfactory clarification as to its source and whether it was related to a crime.  Mr. Chan claimed in the Letters that Mr. Law admitted that he did not know if the amount was a debt.  Finally, Mr. Chan claimed in the Letters that Mr. Law occupied a sensitive post, had used his own account to receive a substantial amount of unknown source, had not investigated the source and legality of the amount, had dealt with the amount, had fabricated facts in the letter from his solicitors, and had refused to repay the amount to Mr. Chan.  Mr. Chan stated that he had reason to believe that Mr. Law had received certain benefits from the matter and had participated in certain criminal conduct, and that Mr. Chan further had reason to believe that Mr. Law had for a long period of time used his own bank account to carry out money laundering activities.  Mr. Chan raised the matter as a complaint, and requested the Bank to seriously deal with Mr. Law's criminal activity, and to give Mr. Chan a reply.

7.  On 16 October 2007, Mr. Law issued these proceedings against Mr. Chan, for defamation, harassment and intimidation.  On the same day, Mr. Law issued a summons ("Summons"), returnable on 17 October 2007, to seek interlocutory injunctions against Mr. Chan, to restrain him from publishing specific words contained in the Letters, and the words "羅健文還債(Law Kin Man repay debt)" contained in the foam boards referred to in paragraph 5 above, and from harassing, annoying, or intimidating Mr. Law.

8.  The hearing of the Summons was adjourned to 12 November 2007, but an interim injunction was granted.  The interim injunction restrained   Mr. Chan from, essentially: (1) publishing the words "羅在該事件中收受某些利益及從事某些犯罪行…",  "羅長期性利用自己戶口進行清洗黑錢活動" and " 羅所犯之罪行" set out in the context of the Letters, or similar words having meaning and effect similar thereto, stating, suggesting or implying that Mr. Law had conducted himself in a deceitful, fraudulent and illegal manner; and (2) entering Mr. Law's designated home address and his work place at the Bank, and harassing, disturbing, causing a nuisance or interfering with the business of Mr. Law's work place.  Mr. Chan now seeks the continuation of the injunction until trial.  Mr. Chan, on the other hand, seeks to set aside the interim injunction granted on 17 October 2007 on the ground of material non disclosure.

9.  At the conclusion of the hearing on 12 November 2007, I dismissed the application to discharge the interim injunction on the ground of material non disclosure, and continued the second aspect of the interim injunction granted on 17 October 2007, with slight amendments.  Essentially, this aspect of the interim injunction which was continued restrained Mr. Chan from entering into Mr. Law's specified home address and his work place at the Diamond Hill branch of the Bank for the purpose of harassing and/or disturbing Mr. Chan, and/or causing a nuisance or interference with the reasonable use and occupation of Mr. Law's home premises and/or disturbing Mr. Law, interfering with the business of Mr. Law's workplace by parading, standing inside or at the entrance or on the pavement outside Mr. Law's workplace with foam boards displaying or containing the words "羅健文還債 (Law Kin Man repay debt)" and/or words of a similar effect or by any conduct that interferes with the usual business of Mr. Law's workplace. I reserved judgment on the continuation of the first aspect of the interim injunction granted on 17 October 2007 in relation to be publication of the allegedly defamatory words contained in the Letters, but granted an interim injunction to continue that aspect of the injunction made on 17 October 2007, until the handing down of my reserved judgment.

10.  These are my reasons for the decision given on 12 November 2007, and my judgment on the continuation of the interim injunction dealing with the publication of the allegedly defamatory words.

11.  The issues for my determination are :

(1)	whether there was material non disclosure at the application on 17 October 2007; and
(2)	whether the interim injunction granted on 17 October 2007 should be continued.

Whether there was material non disclosure

12.  In Mr. Chan's affirmation filed in opposition to Mr. Law's application for the interlocutory injunctions, he claimed that Mr. Law had failed to make material disclosure in his application on 17 October 2007.  He relies on various matters to support this claim of material non disclosure. 

13.  Counsel for Mr. Law emphasized that the application for interlocutory injunctions was made by an inter-partes summons, and that the application was not made ex parte.  An order was made on 17 October 2007 for the service of the Summons to be abridged in time.  As such, she does not accept that there was any duty of full disclosure on Mr. Law's part.  Counsel for Mr. Chan pointed out that the Summons was made returnable the very next day, and claimed that in the interim, Mr. Chan's solicitors had not been able to obtain instructions from Mr. Chan (who was not in Hong Kong at the material time) in relation to the matters set out in the papers filed in support of the Summons.  I do not accept that Mr. Chan's solicitors had insufficient time to obtain the very basic instructions required, bearing in mind that Mr. Chan had instructed his solicitors as early as 12 December 2006 when he commenced DCCJ 6082 of 2006 against Mr. Law for recovery of the sum of HK $700,000, which was alleged in those proceedings to have been paid to Mr. Law under duress, oppression or extortion, in conspiracy with the Mr. Wan.  They must, as responsible solicitors, have sought and obtained in December 2006 the necessary instructions to support the background of this serious claim of duress and extortion relating to the same payment of HK $700,000 to Mr. Law, which is the subject matter of dispute in these proceedings.  Nevertheless, bearing in mind the short interval between the issue of the Summons and the hearing on 17 October 2007, when counsel and solicitors appearing on behalf of Mr. Chan did not put in evidence, nor made submissions in opposition, I dealt with Mr. Chan's application on 12 November 2007 on the basis that he could, if there were grounds of material non disclosure, seek the discharge of the injunctions granted on 17 October 2007.  It must be accepted that the starting point is that applications for interlocutory injunctions should be made inter-partes, and that it is contrary to the principles of natural justice that any order adversely affecting a party's interest should be made without the party being given a reasonable opportunity of being heard.  No doubt there was urgency to justify Mr. Law's application in this case, but if a party comes to court with no adequate notice or limited prior notice of an application for an injunction, that party must accept a higher and more onerous duty of disclosure.  The reason for the duty to make full disclosure is that the applicant is himself asking the court to undertake the hazardous course of granting relief against a party either in his absence or without a full and proper opportunity of presenting his case (Gee on Commercial Injunctions, 5th edition, para 9.009).

14.  In support of his application to discharge the injunctions on ground of material non disclosure, Mr. Chan first claims that Mr. Law failed to describe the length of his friendship with Mr. Wan, and "how such friendship was based upon".  Particularly, Mr. Chan claims that Mr. Law had failed to disclose that Mr. Wan was a customer of the Bank at the Diamond Hill branch.

15.  Second, Mr. Chan claims that when Mr. Law applied for the interlocutory injunction, he had deliberately omitted the fact that the words used in the Letters complained of were : " I have reason to believe that Mr. Law had received certain benefits from the matter and had engaged in certain criminal activities" and "I also have reason to believe that Mr. Law had for a long time used his own bank account to carry out money laundering activities".  In short, Mr. Chan claims that he was only stating his belief in the Letters as to Mr. Law's criminal and money laundering activities, and his receipt of benefits in the dealings, and not the fact of his criminal activities and receipt. 

16.  Third, Mr. Chan claims that in his application for the interlocutory injunction, Mr. Law had given contradictory evidence in relation to the purpose of the payment of HK $700,000 to Mr. Wan.  Mr. Law claimed in his affirmation that the HK $700,000 was made pursuant to an oral agreement between Mr. Wan and Mr. Chan, whereby Mr. Chan agreed to pay off Mr. Wan's beneficial interest in a property known as the Metropolis.  Mr. Chan claims that in the letter dated 7 December 2006 from Mr. Law's solicitors which was exhibited to his affirmation, it was said that the payment was "in pursuance of an agreement between (Mr. Chan) and Mr. Wan in repayment of a debt due to Mr. Wan".

17.  Fourth, Mr. Chan claims that Mr. Law had failed to adduce sufficient evidence to prove Mr. Wan's interest in the Metropolis, the property in which Mr. Wan claimed he had an interest and for which Mr. Chan's payment of HK $700,000 related. In particular, it is claimed that the bank statement exhibited to Mr. Law's affirmation does not show clearly Mr. Wan's payment of the total sum of HK $700,000 from his bank account.

18.  According to Mr. Law, Mr. Chan's payment of HK $700,000 was to pay off Mr. Wan's contribution made for one Miss Siu's purchase of the Metropolis, and that the Metropolis was purchased by Miss Siu using a company by the name of Sea Merit Ltd. as the vehicle.  Mr. Chan claims that a company search against Sea Merit Ltd. showed that Miss Siu only became a shareholder after the purchase of the Metropolis.  This is the fifth ground of material non-disclosure alleged by Mr. Chan. 

19.  Finally, Mr. Chan claims that Mr. Law failed to disclose to the court that at the time when the Metropolis was purchased, it was mortgaged to the Bank and the mortgage was handled by Mr. Law who had full knowledge of the transactions concerning the Metropolis.

20.  In answer to the claim of material non disclosure, Mr. Law explained in his affirmation filed on 7 November 2007 that he had known Mr. Wan for some 40 years since they were young children.  They were next door neighbors and had grown up together.  Their family members also knew each other, and they have kept in close contact for all these years.  He claims that their relationship can be considered closer than with their respective siblings.  Mr. Law claims that Mr. Wan has been a customer of the Bank, but not of the Diamond Hill branch, and he was not the account manager designated to take care of Mr. Wan's accounts.  He reiterated that he had permitted Mr. Wan to use his bank account out of trust, and so far as is known to him, Mr. Wan carries on a proper business.  Mr. Law claims that nothing dubious was known to him.  Mr. Law confirms that the mortgage of the Metropolis was not processed at the Diamond Hill branch of the Bank and was not handled by him.

(1) Relevant legal principles

21.  In determining whether there was material non disclosure, one has to bear in mind the legal principles applicable to the court's determination at the hearing on 17 October 2007, when the interim injunctions were applied for.  In relation to the injunction to restrain acts of harassment, nuisance and interference with the business at Mr. Law's workplace, the legal principles applicable are whether there was a serious question to be tried as to harassment, nuisance and interference, and if there was, where the balance of convenience lies.  In relation to the injunction to restrain publication of the allegedly defamatory words, counsel for Mr. Law does not dispute that, due to the importance of protecting an individual's right to free speech, a plaintiff can only seek an injunction to restrain publication of allegedly defamatory materials if he can satisfy the court that the statement complained of is unarguably defamatory, that there are no grounds for concluding that the statement may be true, that there are no defences which may succeed, and that there is evidence of an intention to publish or repeat the defamatory statement (Gatley on Libel and Slander, 10^th Edition, para 25.2).  In the case of Bonnard v. Perryman [1891] 2 Ch 269 (applied in Chan Shui Shing Andrew v. Ironwing Holdings Ltd [2001] 2 HKC 376), the court emphasized that interlocutory injunctions in defamation cases should only be granted in "the clearest cases", where any jury would say that the matter complained of was libellous, and where, if the jury did not so find, the court would set aside the verdict as unreasonable.  Where a defendant seeks to rely on the defence of justification, the court will not grant an interlocutory injunction unless it is satisfied that the defence cannot succeed and the burden of proof is on the plaintiff.

22.  As can be seen from counsel's skeleton submissions used at the hearing on 17 October 2007, the basis of Mr. Law's application for the injunction restraining defamation was made on the basis of the principles set out in the preceding paragraph. 

(2) Whether material non disclosure in relation to harrassment

23.  In relation to the application for an injunction restraining the acts of harassment, nuisance and interference, it is clear from the evidence of Mr. Law filed in support of the Summons that there is a serious question to be tried as to whether the acts of Mr. Chan and his three attendants who went to the Diamond Hill branch of the Bank constituted acts of harassment (Wong Tai Wai David v. The HKSAR Government, unreported, 7 September 2004; Lok Ho Services Ltd. & Ors. v. Union Credit Management & Ors. HCA 3197/1995, 20 April 1995; Wong Wai Hing v. Hui Wei Lee [2001] 2 HKC 19).  Even if Mr. Chan had the legal right to claim against Mr. Law for a debt of HK $700,000, and even if he can prove that such a debt is payable to him, Mr. Law clearly has a cause of action against Mr. Chan in harassment or nuisance by virtue of the acts of Mr. Chan and the Kwoks on 27 August 2007 and 12 October 2007.  Whether or not Mr. Law can establish by clear evidence adduced at the hearing on 17 October 2007 that there was a debt due from Mr. Chan to Mr. Wan as a result of Mr. Chan paying off Mr. Wan's interests in the Metropolis,  whether or not Mr. Law can establish by clear documentary evidence on 17 October 2007 that Mr. Wan had contributed to the purchase of the Metropolis, and whether or not Miss Siu was the beneficial owner of Sea Merit Ltd and the Metropolis clearly did not affect the balancing exercise carried out by the court on 17 October 2007, in considering whether or not to grant the injunction sought against harassment.  Similarly, the length of Mr. Law's friendship with Mr. Wan, whether Mr. Wan was a customer of the Bank, and whether Mr. Law had handled the mortgage financing the purchase of the Metropolis had nothing to do with the issues of whether there was a serious question to be tried as to the claim of harassment and nuisance, or the balance of convenience.  The acts complained of by Mr. Law show quite clearly that there was harassment.  In any event, I do not accept that the letter of 7 December 2006 from Mr. Law's solicitors contradicts the claim made in Mr. Law's affirmation. 

(3) Whether material non disclosure in relation to defamation

24.  On the question of the grant of the interim injunction restraining the publication of the allegedly defamatory words contained in the Letters, I will first deal with the submission made by counsel for Mr. Chan that Mr. Law had deliberately omitted the fact that the words used in the Letters were "I have reason to believe", and that Mr. Chan was only stating in the Letters his belief as to Mr. Law's criminal and money laundering activities, and his receipt of benefits from the dealings in the sum of HK $700,000.  Bearing in mind that the Letters were exhibited in full to the supporting affirmation of Mr. Law when he applied for the injunctions, that the Letters were an important aspect of his complaint, and the fact that the Letters were not long, I do not accept that the learned judge could have been misled in any way on 17 October 2007 as to the actual words used in the Letters, or the meaning and effect of the words used in the Letters, or of the Letters themselves.  Even if it was true (and I do not so find) that these had not been sufficiently brought to the attention of the court on 17 October 2007, I do not accept that the addition of the words "I have reason to believe" in the context of the Letters would have made any difference in the court's determination of the application for the injunction sought, or to the grant thereof.  Although the parties had not drawn to my attention any authorities in support at the hearing on 12 November 2007, it is clear that in defamation, there is no material distinction for a defendant to say that he believed someone to have committed a crime, as opposed to saying that the same person committed a crime.  To succeed in the defence of justification, it is not enough for a defendant to prove that he believed that the defamatory imputation was true, but must justify it by proving the fact of the commission of the crime.  (Gatley on Libel and Slander, 10th edition, para 11.4, citing Kerr v. Force (1826) 3 Cranch C.C. 8 at 24.) This was clearly explained in the judgment of Chief Judge Cranch in Kerr v. Force, when he said :

"

An alteration of a note which changes its terms and conditions, must be a material alteration; and a material alteration of a note, by the holder, with intent to injure or defraud any person, is forgery.  It makes no difference that the defendant only said he believed the alteration to be such as to change the terms and conditions of the note.  If I say, of a man, that I believe he committed murder, I say it at my peril.  I cannot justify by saying, and proving, that I did believe it.  I can only justify by proving the fact of murder or by circumstances showing the total absence of malice."

25.  Further, in my judgment, Mr. Chan's statements in the Letters, when read in their context, amount to statements of fact, and cannot fairly be called comments at all.  Therefore, Mr. Chan can only succeed by establishing a plea of justification with respect to such statements.

26.   Mr. Chan has claimed in his affirmation filed on 31October 2007 after the hearing on 17 October 2007 that his beliefs regarding Mr. Law's receipt of benefits and engagement in criminal and money laundering activities are justified, and that his comments are fair.  Such claim was not before the court on 17 October 2007, but that does not alter the fact that the court had to be satisfied on 17 October 2007 that the statements made in the Letters are unarguably defamatory, that there are no grounds for concluding that the statements may be true, that there is no defence which may succeed, and that there is evidence of an intention to publish or repeat the defamatory statements in the Letters. 

27.  In his affirmation made on 15 October 2007 and filed in support of the Summons, Mr. Law had explained that he had agreed to Mr. Wan's use of his bank account because Mr. Wan was his "longtime friend" (paragraph 5 of his affirmation).  He claimed that the sum of HK $700,000 was voluntarily made by Mr. Chan to Mr. Law pursuant to Mr. Wan's instruction, under an oral agreement made between Mr. Chan and Mr. Wan for buying off Mr. Wan's share of the beneficial interest in the Metropolis.  He explained in his affirmation that the Metropolis was registered under the name of Sea Merit Ltd, a company which was controlled by Miss Siu.  Mr. Wan had an affair with Miss Siu who was then Mr. Chan's girlfriend, and it was because of their extra-marital relationship that Mr. Wan had contributed to the purchase money of the Metropolis.  Miss Siu then apparently resumed her relationship with Mr. Chan, and Mr. Wan's affair with Miss Siu ended.  Against such background, Mr. Chan agreed to buy off Mr. Wan's interests in the Metropolis at the consideration of HK $700,000.  To avoid his wife finding out about his interests in the Metropolis and hence his affair with Miss Siu, Mr. Wan directed Mr. Chan to pay the sum of HK $700,000 into his friend Mr. Law's account.  Mr. Law admitted that when he provided his account number to Mr. Wan, he had no knowledge of these background details, because he was busy and because of his "long time friendship" with and hence trust of Mr. Wan.

28.  Unless Mr. Chan can establish that  Mr. Law had engaged in money laundering activities, or otherwise engaged in criminal activities, or had obtained some unlawful benefit from the use of his account, the statements made in the Letters are, on their face, clearly defamatory.  To establish that Mr. Law had engaged in money laundering activities, Mr. Chan has to establish (within the meaning of  section 25 of the Organized and Serious Crimes Ordinance "OSCO") that Mr. Law had dealt with property which directly or indirectly represents any person's proceeds of an indictable offence, either : (1) knowing that the property in whole or in part represented any person's proceeds of an indictable offence; or (2) there were grounds that a commonsense, right-thinking member of the community would consider sufficient to lead a person to believe that the property in whole or in part represented any person's proceeds of an indictable offense, and those grounds were known to Mr. Law (Archbold Hong Kong, 2007 Edition, paragraph 41-73) .  There must be evidence that Mr. Law had grounds for believing that the property represented proceeds of an indictable offence, and that the grounds must be reasonable.

29.  Any other related offence under section 25A of OSCO (which compels disclosure of knowledge or suspicion of information) similarly requires proof of Mr. Law's knowledge or suspicion that any property either represents any person's proceeds of an indictable offence, or was used in connection with an indictable offense, or was intended to be used in connection with an indictable offense.  "Suspicion" has been defined in Queensland Bacon Pty Ltd. v. Rees (1966) 115 CLR 266 : "A suspicion that something exists is more than a mere idle wondering whether it exists or not; it is a positive feeling of actual apprehension or mistrust; amounting to "a slight opinion", but with sufficient evidence." ( See Archbold Hong Kong, 2007 Edition, para 41-78)

30.  In the consideration of whether the statements in the Letters are defamatory and whether a defence is available to Mr. Chan based on the information disclosed in Mr. Law's affirmation made on 15 October 2007 and in the Letters as stated by Mr. Chan, it seems clear to me that none of the matters relied upon by Mr. Chan as alleged material non-disclosure are relevant to the court's balancing exercise on 17 October 2007.  I have already rejected the relevance of the qualification of the statements in question by the words "I have reason to believe".  I have also rejected the argument that the letter dated 7 December 2006 from Mr. Law's solicitors contradicts the claim made by Mr. Law in his affirmation as to the purpose of the payment of the sum of HK $700,000 from Mr. Wan to Mr. Chan. 

31.  The material factor from the evidence adduced at the hearing on 17 October 2007 is that there was nothing in Mr. Law's affirmation which suggests that he knew or suspected that the sum of HK $700,000 represented proceeds of an indictable offence, and that he had permitted Mr. Wan to use his bank account because of their long term friendship, and his trust in his friend. This was his explanation as to why he had permitted Mr. Wan to use his account without suspicion or inquiry.  On the information provided by Mr. Law on 17 October 2007 as to his friendship with Mr. Wan, the court was prepared to, and did, grant the injunction restraining publication of the defamatory statements.  How Mr. Law's friendship with Mr. Wan arose would not have made the learned judge change her mind on 17 October 2007, and the fact as now disclosed that Mr. Law had known Mr. Wan for over 40 years cannot assist or improve Mr. Chan's case.

32.   I am not satisfied that the court would have considered, on 17 October 2007, that Mr. Chan has a defence to the claims of defamation by reason of either the lack of clear evidence of Mr. Wan's contribution to the purchase of the Metropolis, or the fact that Miss Siu only became registered as a shareholder in Sea Merit Ltd. after the purchase of the Metropolis. 

33.  Nor do I regard any of the facts alleged to be material non disclosure or misrepresentation as being relevant to the question of whether there was intention to repeat the defamatory statements contained in the Letters.  Mr. Chan's conduct of instructing debt collectors in 2006, and his acts on 20 August 2007 and 12 October 2007 clearly evidenced an intention to repeat the defamatory statements contained in the Letters.  The letters of authorization signed by Mr. Chan on 12 October 2007, copies of which were given to Mr. Law on the same day, confirmed that the Kwoks had been instructed to claim the debt of HK $700,000 from Mr. Law, and the manner in which the Kwoks carried out and are likely to continue to carry out their instructions is demonstrated by the events of 12 October 2007.  In my judgment, there is clear evidence of intention to publish or repeat the defamatory statements.

34.  Having considered all the evidence, I do not accept that there was any non disclosure or misrepresentation, as alleged by Mr. Chan, of any fact which is material or relevant to the weighing operation which the court had to make in deciding whether or not to grant the injunction on 17 October 2007. 

Whether the interim injunctions should be continued

(1) The injunction to restrain harassment

35.  Dealing first with the injunction to restrain harassment, it was submitted on behalf of Mr. Chan that much of what Mr. Law had deposed to as to the events of 12 October 2007 was beyond the knowledge of Mr. Law.  Leaving aside the evidence of Mr. Wan as to his own encounters with Mr. Chan, which Mr. Chan claims to be irrelevant to these proceedings, I regard the events of 12 October 2007 at the Diamond Hill branch of the Bank and its vicinity to clearly demonstrate that unless restrained, Mr. Chan will continue to use the services of the debt collectors such as the Kwoks to take similarly drastic and deplorable action to seek payment from Mr. Law of the sum of HK $700,000.  The point has repeatedly been made in the course of the hearing that even if Mr. Chan was correct in his claim that the sum of HK $700,000 paid by him into Mr. Law's bank account should be repaid by Mr. Law to him, there is no justification or basis for him to authorize or instruct debt collectors to do what they did on 12 October 2007, or to harass Mr. Law.

36.    Although Mr. Law was asked by the Bank to take leave from 12 October 2007, he has since resumed his duties and work at the Bank.  Should Mr. Chan and his debt collectors carry out further acts of harassment, irreparable damage will be caused to Mr. Law's career and reputation.  I am therefore satisfied that there is a serious question to be tried as to Mr. Law's claim of harassment against Mr. Chan, and also satisfied on the evidence that any damages awarded at the trial will not be an adequate remedy for Mr. Law.  The balance of convenience is clearly in favor of continuing the injunction, as I see no prejudice whatsoever capable of being sustained by Mr. Chan simply by reason of being restrained from carrying out unlawful acts of harassment in terms of the injunction which I granted on 12 November 2007. 

(2) The injunction to restrain defamation

37.  In relation to the continuation of the injunction restraining publication of the words contained in the Letters which are claimed by Mr. Law to be defamatory, counsel for Mr. Chan opposes the continuation essentially on the ground that the grant of an interlocutory injunction for defamatory statements is a delicate matter which would rarely be given because of the importance of the right of free speech.  He relies on the high standard of proof, as summarized in the second-half of paragraph 21 above.  Mr. Chan claims in his affirmation filed on 31 October 2007 that defamation is not sufficiently proved against him.  He claims that the statement “羅健文還債” (Law Kin Man repay debt) is justified by the fact that Mr. Law has admitted that he received the sum of HK $700,000 into his bank account, and that the said  sum was paid by Mr. Chan.  Mr. Chan repeats the claim that he had only stated in the Letters that he had reason to believe that Mr. Law had received certain benefits and had carried out certain criminal activities, and had for a long period of time used his bank account to carry out money laundering activities.  He claims that his beliefs are justified and his comments are fair.

38.  Dealing first with Mr. Chan's argument that the statement "羅健文還債" (Law Kin Man repay debt) is justified, the Order made on 17 October 2007 to restrain the publication of defamatory words does not extend to the statement "羅健文還債" (Law Kin Man repay debt).  Mr. Law only seeks continuation of the Order of 17 October 2007 on the same terms.

39.  In relation to Mr. Chan's denial of Mr. Law's personal knowledge of how the Letters were delivered to the Bank on 12 October 2007, I cannot see how that point assists him.  No matter how the Letters were delivered to the compliance, security and personnel departments of the Bank, whether Mr. Chan had handed them to the manager directly, or whether he had handed them to the security officer of the Bank at the Diamond Hill branch for submission to the security department, Mr. Chan does not dispute that the Letters were addressed and delivered to the Bank.  The question is whether the statements in the Letters, published to the Bank, are defamatory or whether some defence is available to Mr. Chan.

40.  Even on the tests and principles accepted by counsel for Mr. Chan to be applicable to the grant of an interlocutory injunction restraining the publication of defamatory statements, an injunction can be granted if the applicant can satisfy the court that the statement is unarguably defamatory, there is no ground to conclude that the statement may be true, no other defence may succeed, and there is evidence of an intention to repeat the statement complained of.  Even if a defendant claims that he will be able to prove his defence by justification or fair comment, an interlocutory injunction can still be granted if the court is not satisfied that the defendant would be able to do so, or if there are no reasonable grounds for the defendant to say so.  In this determination, the court will obviously take into consideration the evidence disclosed and made available by the parties.  If, on the evidence disclosed by an applicant, the court finds the statement complained of to be unarguably defamatory, and that the evidence fails to disclose a possible defence, I cannot accept that a defendant can later object on the basis that there may be other grounds not disclosed by the defendant which may lead the court to conclude that the statement may be true or which may afford a defence to the defendant.  Particularly in a case such as the present, where the statements complained of on their face contain such serious allegations as the commission of a crime, and are prima facie defamatory unless proven true or constituting fair comment, a defendant should not be permitted to complain of the court's grant of an interlocutory injunction restraining publication if he fails even to set out the grounds on which he says the court should conclude that the statement may be true, or his defence may succeed.

41.  As already explained in paragraph 24 above, there is no material distinction between the statement that Mr. Law carried out criminal and money laundering activities and had received unlawful benefits in his dealings, and the statement that Mr. Chan had reason to believe that Mr. Law had carried out criminal and money laundering activities and had received unlawful benefits.  If Mr. Chan relies on the defence of justification, the authorities show that Mr. Chan has to prove not that his belief was true, but must justify it by proving the fact of the commission of the criminal acts and the fact of Mr. Law's receipt of unlawful benefits from his dealings (Kerr v. Force, supra).  Even assuming that the facts to which Mr. Chan had referred in the Letters are true (namely, that Mr. Law received the sum of HK $700,000 for Mr. Wan without any documentation or evidence in support of the alleged debt, any explanation as to why the sum could not be deposited into Mr. Wan's account, and without raising suspicion as to the source and legality of the sum of HK $700,000), in the light of the evidence adduced by Mr. Law that he had agreed to this one transaction on the basis of his 40 years’ long friendship with Mr. Wan, I find that Mr. Chan's defence of justification cannot succeed. There is no evidence before me (to form the basis of an offence under section 25 of OSCO) that Mr. Law had dealt with the HK $700,000 with knowledge that the sum represented Mr. Wan's or any other person's proceeds of an indictable offence, or that there are grounds on which a commonsense, right thinking member of the community would consider sufficient to lead Mr. Law, even accepting that he is assistant branch manager of a bank, to believe that the sum of HK $700,000 represented Mr. Wan’s or any other person's proceeds of an indictable offence.  Nor is there evidence, for the purpose of section 25A of OSCO, that Mr. Law had knowledge, actual apprehension or mistrust with sufficient evidence that the sum of HK $700,000 represents Mr. Wan's or any other person's proceeds of an indictable offence, or was used or intended to be used in connection with an indictable offence.  Nor can I find any evidence to support the claim that Mr. Law had received any benefits from his dealings so as to render him guilty of any offence under the Prevention of Bribery Ordinance.

42.  Counsel for Mr. Chan further contends that the statements complained of are no more than comments, and that Mr. Chan has an arguable defence on fair comment.  I do not accept such argument.  The relevant statements are clearly not recognizable as comments.  In the case of Hunt v. Star Newspaper Company, Ltd. [1908] 2 K.B. 309, at 320, Fletcher Moulton, L.J. stated in his judgment that " any matter … which does not indicate with a reasonable clearness that it purports to be comment, and not statement of fact, cannot be protected by the plea of fair comment." 

43.  To the mind of the ordinary, reasonable, fair-minded reader, the statements made by Mr. Chan in the Letters would convey the natural and ordinary meaning that Mr. Law had actually engaged in criminal activities, received unlawful benefits and had for a long time engaged in money laundering activities.  In my judgment, the words are not only capable of the meaning imputed to them that Mr. Law had engaged in criminal activities, but will be so understood by a greater number of those who will read the Letters.  I consider that they import a charge of criminal and unlawful activities, as opposed to an opinion or belief of Mr. Chan as he so alleges which can be defended as fair comment. 

44.    Even if the plea of fair comment is available to Mr. Chan, I am satisfied that such a defence will fail. Assuming, for the purpose of the application for the interlocutory injunction, that Mr. Law's dealings in the sum of HK $700,000 in his bank account is a matter of public interest, and further assuming that Mr. Chan had not published the statements maliciously, for the defence of fair comment to succeed, Mr. Chan must prove that the statement of opinion is based on facts which are truly stated, and that the comment on such facts are within the limits which the law allows.  I am not satisfied that an honest, fair-minded man, however prejudiced he might be or however exaggerated or obstinate his views, would have honestly formed the opinion or come to the conclusion, on the facts stated in the Letters, that Mr. Law had engaged in criminal activities or received unlawful benefits, or "had for a long time used his bank account to carry out money laundering activities".

45.  Finally, counsel for Mr. Chan contends that the imputation borne by the statements in the Letters, when read in their proper context, is only that Mr. Law's conduct has aroused suspicion, and that it is justifiable as such.  Counsel referred to paragraphs 11.8 to 11.10 of Gatley on Libel and Slander,10^th edition.  I cannot see how those paragraphs or any cases cited there or in paragraph 3.26 referred to therein can support Mr. Chan's case.  To the contrary, the example given in paragraph 11.8 shows that if a defendant says that the plaintiff is a thief, the defendant cannot attempt to advance a plea of justification directed at showing that there were reasonable grounds to suspect the plaintiff of theft.  The cases cited only illustrate that where the words complained of are that the plaintiff was the subject of investigations by the police or the authorities, or that the plaintiff had been arrested for or charged with an offence, the words complained of may not in their context be capable of meaning that the plaintiff was guilty of the crime or offence for which he was being investigated or charged, and examined in its context, the statement may bear the imputation that there are reasonable grounds for the suspicion of the crime or offence in question.  Paragraph 3.26 of Gatley also states:

"	Where the defendant has made a direct charge of wrongdoing he must justify that and the court will not allow him to put forward the meaning that there are reasonable grounds for suspicion."

46.  Read in their proper context, and apart from the qualification "I have reason to believe" which I have dealt with, the statements made in the Letters are not that Mr. Law was being investigated by the authorities or anyone for criminal activities or money laundering, but that he had engaged in criminal and money laundering activities.  I do not accept that the words used in the Letters can bear the lesser imputation of suspicion only and that the statements can be justified by showing that Mr. Chan had reasonable grounds to suspect Mr. Law of criminal activities.

47.  On the evidence produced, I am satisfied that by virtue of the activities of Mr. Chan and the debt collectors he had instructed, Mr. Chan demonstrated an intention to publish or repeat the statements contained in the Letters. I only need to repeat the matters set out in paragraph 33 above.

48.  For the reasons set out in paragraphs 40 to 47 above, I am satisfied that the statements in the Letters complained of are unarguably defamatory, that there is evidence of an intention on Mr. Chan's part to publish or repeat such statements, and further, that Mr. Chan would not be able to establish any defence to the claim of defamation in the absence of any reasonable grounds being shown.

49.  I am acutely aware of the fundamental principle that the Court is always concerned that at an interlocutory stage, it might make a wrong decision and would prefer to take whichever course which appears to carry the lower risk of injustice should it turn out after trial that the Court was wrong at the interlocutory stage.  On the evidence before me, there is the danger that if an injunction is not granted, Mr. Law will suffer grave and irreparable damage to his reputation and career if the defamatory words complained of or words similar to those contained in the Letters continue to be published and distributed to the Bank or other parties by Mr. Chan for the purpose of assisting his claim for recovery of the sum which he alleges to be payable to him.  On the other hand, if an injunction is granted against Mr. Chan, it only restrains what is unlawful and Mr. Chan can still freely exercise his right of speech within the legitimate confines of the law, as well as his right to seek payment in a legitimate manner.  In these circumstances, I consider that the injunction restraining the defamatory words complained of should be granted.

Orders

50.  I am therefore prepared to continue until trial or further order the injunction restraining publication of the defamatory words, in terms of paragraph 5 of the Order of Judge Ng made on 17 October 2007.  The Defendant will be restrained whether by himself, his servants, agents, nominees or otherwise howsoever, whether directly or indirectly until trial or further order from publishing or causing to be published the words "羅在該事件中收受某些利益及從事某些犯罪行為 ", "羅長期性利用自己的戶口清洗黑錢行動" and " 羅所犯之罪行  " as set out in the context of the 3 letters dated 10 October 2007 to the Compliance Department, Security Department and Human Resources Department of Hang Seng Bank Ltd. being exhibit 10 of the Affirmation of Law Kin Man Freeman dated 15 October 2007 whether in the Chinese or English language, or any similar words having similar meaning and effect or words stating, suggesting or implying the meaning that the Plaintiff had conducted himself in a deceitful, fraudulent and illegal manner in relation to his dealings with the sum of HK $700,000 given by the Defendant to the Plaintiff on 11 September 2006 as referred to in the Statement of Claim and Defence in DCCJ 6082/2006.

51.  The Plaintiff’s undertaking to comply with any order that the court may make as to damages, should the court later find that this order has caused loss to the Defendant and decide that the Defendant should be compensated for that loss, will of course apply.

52.  The costs of the Plaintiff's ex parte application and his application by the Summons are to be the Plaintiff's costs in the cause, to be taxed if not agreed, with certificate for counsel.