PARTY FOR THE CIVIL RIGHTS AND LIVELIHOOD OF THE PEOPLE OF HONG KONG LTD v. CABLE NEWS INTERNATIONAL, INC. AND ANOTHER

DCCJ1551/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1551 OF 2008

D E C I S I O N

1.  This is the 1st Defendant’s application to strike out the Amended Writ and Statement of Claim and to dismiss the action on the ground that the pleading discloses no reasonable cause of action or is scandalous, frivolous or vexatious or is otherwise an abuse of the process of the court.  Faced with a striking-out application, the Plaintiff now seeks to discontinue the claim against both Defendants and the only remaining issue is therefore one of costs.

Background of the case

2.  On or about 9 April 2008, Mr Jack Cafferty, the 2nd Defendant in this action and a commentator on news and current affairs analysis programme, “The Situation Room”, airing on the CNN and CNN International Television Programming Services, made the following comments during an exchange with the host, Mr Wolf Blitzer, in the course of a comparison between today’s China to that of a few decades ago:-

“Well, I don’t know if China is any different, but our relationship with China is certainly different.  We are in hock to the Chinese up to our eyeballs because of the war in Iraq, for one thing.  They’re holding hundreds of billions of dollars worth of our paper.  We are also running hundreds of billions of dollars’ worth of trade deficits with them, as we continue to import their junk with the lead paint on them and the poisoned pet food and export, you know, jobs to places where you can pay workers a dollar a month to turn out the stuff that we’re buying from Wal-Mart.  So I think our relationship with China has certainly changed.  I think they are basically the same bunch of goons and thugs that they’ve been for the last 50 years” (“the Comments”).

3.  On or about 16 April 2008, CNN issued the following statement: “It was not Mr Cafferty’s nor CNN’s intent to cause offence to the Chinese people, and [CNN] would apologise to anyone who has interpreted the comments in this way” (“the CNN Statement”).  In the statement, CNN also said that “Mr Cafferty was offering his ‘strong held’ opinion of the Chinese Government, not China’s people”.

4.  On 29 April 2008, the 2nd Defendant received a letter from the Plaintiff referring to the CNN Statement and purporting to accept CNN’s so-called “offer to apologise” and demanding that an apology be made to the Chinese people.

5.  The original Writ and Statement of Claim was issued by the Plaintiff on 16 April 2008.  In this pleading, the Plaintiff alleged that the Defendants had committed the tort of defamation by publishing the Comments, and it claimed against the Defendants for various relief including the publication of an apology, an injunction to restrain the publication of further defamatory statements and damages.  The Writ and the Statement of Claim was subsequently amended and re-filed with the court on 2 May 2008.  In the amended pleading, the Plaintiff introduced the so-called “contractual claim” and limited the relief claimed to one of publication of an apology.

6.  On 15 May 2008, a letter was sent from Mr Jim Walton, President of the CNN Worldwide, to China’s Ambassador to the United States, officially apologising to the Chinese people, saying that CNN had the highest respect for Chinese people around the world and the organisation had no doubt that Chinese people were offended by Mr Cafferty’s remarks made on 9 April 2008.

7.  The 1st Defendant acknowledged the proceedings on 19 May 2008.

8.  The 1st Defendant’s solicitors, Messrs Clifford Chance, sent a letter to the Plaintiff dated 22 May 2008 setting out the various fundamental flaws with the claim.  In short: (a) as a matter of law, defamation proceedings cannot be brought by an individual purporting to represent a race or large group of individuals said to be defamed; and (b) the Plaintiff, as a corporate plaintiff, plainly had no standing to represent the Chinese people in any event.  The Plaintiff was informed of the basis upon which the 1st Defendant would rely upon to apply to strike out its claim and was invited to agree to withdraw the action before further costs were incurred.

9.  Pausing here, I must say that the 1st Defendant’s argument is sound.  The Plaintiff asserts that the Comments amount to libel against the Plaintiff amongst all “Chinese on earth”, as the Comments injured the reputation of all Chinese and tend to lower all Chinese in the estimate of right-thinking members of the world.  However, the Plaintiff, being a limited company, can only maintain an action of libel or slander for any words which are calculated to injure its trading reputation or its business (see: Gatley on Libel and Slander, 10th ed., para. 8.16).  The Comments certainly did not refer to the Plaintiff in any way.  Even if the claim was brought by a Chinese, the claim would still be flawed as the law of defamation does not allow an individual to sue in respect of the words directed at a group (see: Gatley on Libel and Slander, 10th Ed., para. 7.9).  The Comments clearly referred to, as the Plaintiff pleads, “all Chinese on earth” and not to the Plaintiff as an individual.

10.  The Plaintiff replied on the same day.  It abandoned the defamation claim and asserted a claim based on a contract to apologise.

11.  Messrs Clifford Chance replied on 23 May 2008, stating that the claim based upon breach of contract “was equally, if not more deficient as a matter of law”.  The Plaintiff was again informed of the 1st Defendant’s intention to strike out any part of the Amended Writ and Statement of Claim that was not withdrawn.

12.  Again pausing here, I must say that I have great difficulty in understanding the basis of the so-called Plaintiff’s “contractual claim”.  The claim is made on the basis that CNN made an offer to apologise in the CNN Statement published on 16 April 2008.  By accepting such offer, there was a valid contract between the Plaintiff and the 1st Defendant and the 1st Defendant should therefore proceed to publish an apology pursuant to such agreement.  However, the CNN Statement, when properly construed, was an “apology” and not an “offer to apologise”, and clearly, it was not made with any intention of creating legal relationship.  Further, the CNN Statement was not addressed to nor did it in any way concern the Plaintiff, and there was also no consideration to support the alleged contract.  If the Plaintiff’s argument is correct, anyone who heard about the CNN Statement would have the standing to sue CNN for breach of contract.  This simply cannot be right.

13.  The Plaintiff replied on the same day, proposing a joint application to the court to make a ruling as to whether there existed a valid binding contract to apologise between the Plaintiff and the 1st Defendant.  That letter also stated that: “It serve[s] no purpose to further ask for any apology since your client has apologised.” 

14.  Messrs Clifford Chance wrote back on 28 May 2008, repeating that the Plaintiff’s claims were legally flawed and that the 1st Defendant would proceed with a striking-out application unless the Plaintiff agreed to withdraw the action.  On 29 May 2008, the Plaintiff confirmed that it would abandon the claim for defamation but it would proceed with the claim for breach of contract.

15.  The 1st Defendant’s summons for the striking-out application and the supporting affirmation were filed and served on 11 June 2008.  The affirmation set out the various reasons why the claim was flawed.  That included the 1st Defendant’s case that the Plaintiff had sued the wrong CNN entity.  According to the 1st Defendant, the 1st Defendant is not the CNN entity responsible for publishing the Comments.  Another CNN entity, Cable News Network, Inc., is the producer of the CNN and CNN International (CNNI) television programming services on which the Comments were made.  Cable News Network, Inc. is a Delaware (USA) corporation, and it has no presence in Hong Kong.  It is also the 1st Defendant’s argument that the Plaintiff sued the 1st Defendant simply to avoid the requirement of application for leave to serve the writ of summons out of jurisdiction.

16.  By a letter dated 16 June 2008, the Plaintiff acknowledged that: “we now realise that we have sued the wrong entity.  On this alone, the case should not be proceeded with any further.”  The letter also acknowledged that the Defendants “had duly apologised and this Action will end one way or the other way soon”. 

17.  Pursuant to the directions given by Master R Lai dated 16 June 2008, the Plaintiff filed the Affirmation of Siu See Kong on 24 June 2008.  The 1st Defendant’s affirmation in reply was filed and served on 8 July 2008.

18.  The Plaintiff has not made any application to join the correct CNN entity.

Considerations for the costs of the action

19.  It is not appropriate for me to say here whether it was right for Mr Cafferty to express the Comments about the Chinese people.  To me, this is very much a political and diplomatic matter.  Further, taking into account the aforesaid legal principles stated in Gatley on Libel and Slander, there is simply no legal basis for the Plaintiff to succeed in an action for defamation against the Defendants or the US company responsible for the production of the relevant programme, and so the court is not the proper forum for the directors of the Plaintiff to air whatever grievances they might have about the incident.  Hence, costs should follow the event and the Plaintiff should pay for the costs of the action.

20.  In withdrawing the action, the Plaintiff is actually asking the 1st Defendant to pay for its costs.  According to Mr Sui, counsel for the Plaintiff, the claim was withdrawn because the 1st Defendant was not the correct entity to be sued.  After the 1st Defendant had disclosed the fact that the 1st Defendant was not responsible for the production of the relevant programme, the Plaintiff immediately discontinued the action.  The Plaintiff had therefore acted reasonably and the 1st Defendant should therefore pay for its costs.  With the greatest respect, this argument is wholly misconceived.  Firstly, the Plaintiff has not dealt with the merits of the claim.  As I have mentioned above, the Plaintiff does not have a meritorious claim against the Defendants or the US company responsible for the production of the programme, and so misjoinder is a non-issue.  If the Plaintiff thinks that it has a valid claim against the US company responsible for the production of the programme, it can simply apply to join that company as a party in the proceedings, and yet the Plaintiff has not done so in the present case.  Secondly, it is the duty on the part of the Plaintiff to sue the correct defendant, and any costs wasted by the misjoinder of party should be borne by the Plaintiff.  Hence, I wholly reject Mr Sui’s argument.

21.  Further, I order the costs to be taxed on indemnity basis based on the following 4 reasons.

22.  Firstly, the Comments were clearly directed against the Chinese people, and I therefore cannot understand how the Plaintiff, being a limited company, has the locus to sue in the present action.  The Plaintiff is a limited company with issued share capital of only $10,000, and so I have every reason to believe that the present proceedings have been deliberately brought through a limited company to protect the underlying individuals from personal liability arising from any adverse costs order which may be made as a result of the bringing of such unmeritorious claim.  This is clearly an abuse of the process of the court.

23.  Secondly, according to the Amended Statement of Claim, the only relief sought is an apology.  However, CNN had somewhat made an apology in the CNN Statement published on 16 April 2008, and I cannot understand why the Plaintiff still had to commence the present action.

24.  Thirdly, the Plaintiff’s claim is bound to fail.  Apparently, the only purpose for which these proceedings have been brought is to generate publicity for the Plaintiff and its shareholders and to embarrass CNN.  The Plaintiff invited a newspapers reporter to accompany its representative when serving the writ, and the court therefore has reason to believe that the court process has been used for improper collateral purpose, which again is an abuse of process.

25.  Fourthly, as shown by the history of this case, the Plaintiff was given repeated advance warnings that a striking-out application would be brought and was invited to discontinue its claim, but the Plaintiff nevertheless chose not to do so.  In my judgment, the conduct of the case on the part of the Plaintiff was very unreasonable, and I therefore order that the costs are to be paid on an indemnity basis.