徐偉業 v. 東廬大樓業主立案法團

DCCJ3333/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3333 OF 2011

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DECISION

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Introduction

1.  After the trial of this action, I found that 4 letters published by the defendant were defamatory of the plaintiff.  I gave judgment in favour of the plaintiff and awarded damages in the sum of $400,000. 

2.  In respect of the counterclaim of the defendant, out of the 9 letters, 1 banner and 1 notice which the defendant alleged to be defamatory, I found 5 of them were proved.  Accordingly, I gave part judgment in favour of the defendant on his counterclaim and awarded damages in the sum of $450,000.

3.  By a summons dated 18 August 2014, the defendant applied for leave to appeal.

Legal principle

4.  Section 63A(2) of the District Court Ordinance provides:-

“(2) Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that…

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

5.  The test of whether an appeal has a reasonable prospect of success under the new statutory provision is the same test as applied before the amendment to Cap 336, ie whether the applicant for leave can show that he has an arguable case with reasonable chances of success on appeal as is laid down in Ma Bik Yung v Ko Chuen [2009] 3 HKC 359.  A reasonable prospect of success means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable”: see Wing Tat Haberdashery Co Ltd v Elegance Development & Industrial Co Ltd, HCMP357/2011, 8/7/2011, unreported.

The intended grounds of appeal

6.  The defendant raised 23 grounds of appeal which can be more conveniently divided into 9 categories:-

(1) Locus of the plaintiff (grounds 1 to 6);

(2) Lucas-Box meaning (grounds 7 to 10);

(3) Meaning and finding of malice (grounds 11 to 15);

(4) Plaintiff’s plea of qualified privilege (grounds 16 to 17);

(5) Malice of the plaintiff (grounds 18 to 19);

(6) General damage (ground 20);

(7) Aggravated damage (ground 21);

(8) Exemplary damage (ground 22); and

(9) Costs (ground 23).

Locus of the plaintiff

7.  These grounds were premised on the basis that the defamatory statements were made against one or some of the members of the Management Committee as opposed to against the Incorporated Owners.  Miss Shum, who appears for the defendant (but not at the trial), further submitted that the Management Committee and the Incorporated Owners are 2 separate entities.  No authority, however, was cited in support of this proposition.  Therefore, she submitted, that the plaintiff has no locus to sue the defendant.

8.  A cursory look at documents D1 to D4 will readily show that (and I so found) documents 1 and 2 were directed at the Management Committee (not individual member or members) whereas documents 3 and 4 were directed at the plaintiff.

9.  Section 29 of the Building Management Ordinance empowers the Management Committee to exercise and perform the powers and duties conferred upon the Incorporated Owners.  The Management Committee is not a separate and distinct body.  There is no separation of identity between the Management Committee and the Incorporated Owners.

10.  For these reasons, the intended grounds of appeal simply cannot get off the ground.

Lucas-Box meaning

11.  The principle laid down by the English Court of Appeal in Lucas-Box v News Group Newspapers Ltd [1986] 1 WLR 147 is clear : “a defendant who is relying upon a plea of justification must make it clear to the plaintiff what is the case which he is seeking to set up.  The particulars themselves may make this quite clear, but if they are ambiguous then the situation must be made unequivocal.”  It is therefore the duty of the defendant to plead with sufficient clarity the meaning of the words he is prepared to justify.

12.  With respect, the Amended Defence of the defendant is nowhere near the required clarity.  No Lucas-Box meaning was pleaded.

13.  In order to do justice to the defendant and to err on the side of excess, I proceeded to consider the meanings that could be extracted from paragraphs 21(iv) and 26(iv) of Amended Defence and examined whether or not a plea of justification was established in relation to documents D1 and D3.  The defendant did not rely on the defence of justification in relation to document D4. 

14.  Following the decision in Lucas-Box, the English Court of Appeal in Control Risks Ltd v New English Library Ltd [1990] 1 WLR 183 applied the same principle to the defence of fair comment. The defendant must spell out with sufficient precision what is the comment which he is seeking to say attracts the defence. 

15.  The defendant did not invoke the defence of fair comment in relation to documents D1 (accusation 1), D2, D3 and D4.

16.  Although in paragraph 14(iii) of the Amended Defence, the defendant pleaded the defence of fair comment in relation to accusation 2 in document D1, he did not spell out the comment he was seeking to justify. 

17.  At paragraph 26(iv) of the Amended Defence, the defendant put forward an explanation for making the last statement in accusation 4 short of spelling out the comment he was seeking to justify. 

18.  To my mind, the complaints of the defendant are unjustified and I see no reasonable prospect of success on these grounds.

Meaning and finding of malice

19.  In Horrocks v Lowe [1975] AC 135, Lord Diplock at 149 pointed out that the motive with which the defendant on a privileged occasion made a statement defamatory of the plaintiff is crucial.  Where the defendant made the statement with some other dominant and improper motive, he lost the protection of the privilege.  Express malice is evidence of such motive.  Therefore, upon the finding of malice on the part of the defendant, an inference can be drawn that he acted from an improper motive. That is the classical view of malice: see Gatley on Libel and Slander, 12^th Ed. at 17.4.  However, the finding of malice is not the only means to determine whether or not the defendant would have lost the protection by reason of improper motive.

20.  In the Amended Reply, the plaintiff pleaded that the defendant was not entitled to the protection of qualified privilege but short of providing the particulars of malice.  In such situation, the plaintiff did not embark on the course of proving malice on the part of the defendant.  Nevertheless, whether or not the defendant was protected by the privilege remained a live issue.

21.  From the documents before the Court, the letters published by the defendant were in response to letters published either in the name of “Righteous owners of Tung Lo Court” (東廬大樓正義業主), the management committee or the plaintiff.  The court was still required to consider whether the response of the defendant took his case outside the privileged occasion whereby the defendant would lose the protection: see Gatley (supra) at 14.51.

22.  For this reason, I do not see any reasonable prospect of success on these grounds.

Plaintiff’s plea of qualified privilege

23.  Reciprocity of duty and interest is an essential element in establishing a privileged occasion: see Blakeney-Williams v Cathy Pacific Airways Ltd [2011] 1 HKLRD 901 at para 127. 

24.  The English word “interest” has a very wide meaning.  The Shorter Oxford English Dictionary, 6^th Ed., has provided the word with 11 different meanings.  Among others, it may mean “a state of feeling in which one wishes to pay particular attention to a thing or person; (a feeling of) curiosity or concern”.  To say that interest could only mean benefit (利益) but nothing else is restricting the meaning of the word unnecessarily if not wrongly.  The restrictive interpretation propounded by the defendant is in fact against the established principles.  Any forms of legitimate common interest are protected.  Such interest does not need to be financial in nature: see Gatley (supra) at 14.48.

25.  In the present case, the contents of documents P1 to P11 were related to the management of the building.  The owners and occupants of the building must have a corresponding interest in receiving such information.  The interest arose out of the fact that such information was a matter of their concern and might affect their financial obligation as an owner. 

26.  For this reason, I do not see reasonable prospect of success on these grounds.

Malice of the plaintiff

27.  The defendant complains that the court had failed to consider the falsity of the statements in documents P1, P3, P4, P5 and P8.  Of the 5 documents complained of, P1 and P8 were found not protected by qualified privilege.  The plaintiff did not plead the defence of qualified privilege in relation to documents 3 and 4.  That being the case, the complaints in relation to those 4 documents are uncalled for.

28.  Regarding the complaints in respect of documents P5 and P6, due consideration were given to the evidence before the court and a finding of fact was made according to the evidence.  There is no substance in those complaints.

29.  The findings in relation to documents P9 and P11 were on a different basis. 

30.  For the above reasons, I do not see reasonable prospect of success on these grounds.

General damage

31.  It is trite that general damage is not hinged on actual loss suffered by the plaintiff.  The sum awarded by way of general damage is to compensate the plaintiff for the damage to his reputation; vindicate his good name; and taking into account of the distress, hurt and humiliation which the defamatory publication has caused: see Oriental Daily Publisher Ltd & Anor v Ming Pao Holdings Ltd & Ors (No 2) [2013] 3 HKC 457 at para 35.

32.  I do not see any substance in this ground.

Aggravated damages

33.  Due consideration was given to the circumstances of this case in accordance with the guiding principle in Oriental Daily Publisher (supra). 

34.  I do not see reasonable prospect of success on this ground.

Exemplary damages

35.  The defendant formulated this ground of appeal on the premise that it was an error in law to follow the principle on exemplary damages as applied by To J in Lo Sam Shing v Li Fong, HCA1803/2011, 14.3.2014, unreported.

36.  It was submitted that the learned judge was wrong to apply the outrageous conduct test in Kuddus v Chief Constable of Leicestershire [2002] 2 AC 122 and maintained that the profit motivated conduct test in Rookes v Barnard  [1964] AC 1129 should be the correct approach.

37.  In Lo Sam Shing, the learned judge considered all the relevant authorities for the past 40 years since Rookes and came to the conclusion that the law in this area has moved forward. That there are wrongful and conscious conducts which give no financial benefit to the wrongdoer but which are no less appalling than profit motivated conducts.  There is no reason why such conducts should not be punished. Accordingly, the learned judge concluded that the scope to which exemplary damages are available have thus expanded from punishing profit motivated conduct to outrageous conduct: see para 161. 

38.  There is no basis to say that the learned judge was in an error of law to apply the modern approach as laid down in Kuddus.

39.  The defendant in Lo Sam Shing recently appealed to the Court of Appeal.  In considering the plaintiff’s application for security for costs, Madam Justice Yuen, JA in her Decision delivered on 4 September 2014, expressed her preliminary view that the prospect of success of the defendant was not high: see 盧三勝訴李煌, CACV 71/2014, 4.9.2014 at para 16.  In arguing that Lo Sam Shing was wrongly decided, the defendant is obviously fighting an uphill battle.

40.  In the circumstances, I do not see reasonable prospect of success on this ground.

Costs

41.  The award of costs is essentially a matter of discretion of the court. 

42.  In the present case, out of the 11 documents complained of by the defendant, 6 of them were defended by the plaintiff successfully.  On the other hand, all 4 documents complained of by the plaintiff were found to be defamatory. 

43.  The plaintiff has been completely successful in its claim whereas the defendant only succeeded in his counterclaim partially. 

44.  In order to do justice to the parties in terms of costs, an Order that the defendant should bear 55% of the costs of the plaintiff was therefore made.

45.  I do not see reasonable prospect of success on this ground.

Conclusion and order

46.  For the above reasons, the defendant’s application must be dismissed and I so order.

Costs

47.  Costs should follow the event.  I order that the defendant shall pay the plaintiff costs of this application.

48.  By summary assessment, I order that the defendant do pay the plaintiff costs of this application in the sum of $60,000.