LAM CHUEN LUNG v. LAM SING YIN

HCA 139/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 139 OF 2012

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JUDGMENT

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1.  This is a bitter defamation action between a father and a son.

BACKGROUND

2.  The plaintiff has been a medical practitioner for more than 20 years.  He is now practising in his own clinic at Shop 3, Sceneway Exhibition Centre, Level 3, Sceneway Garden Plaza, Lam Tin, Kowloon (“the Clinic”).

3.  The defendant is the natural father of the plaintiff.

4.  Madam Tse Hau Woon (“Madam Tse”), the plaintiff’s natural mother, purchased 3 shops (“the 3 Shops”), Shops 43, 44 and 45 in Sceneway Garden Plaza (“the Plaza”), in July and August 2004.  The plaintiff claims that Madam Tse was purchasing the 3 Shops on his behalf.  The plaintiff paid part of the purchase price and the related expenses for the purchase himself. He also borrowed money from the defendant and obtained a mortgage bank loan to finance the purchase.

5.  On the other hand, the defendant claims that, although the 3 Shops were acquired in the name of his wife, he and his wife were the real purchasers of the 3 Shops.  He also financed the purchase by paying a sum of over $1,000,000.  In July 2004, the plaintiff indicated to him that he wanted to own most of the shops at level 3 of the Plaza, and the plaintiff requested the defendant to transfer the 3 Shops to him after the completion of the sale and purchase transactions.  The defendant agreed.  On 16 July 2004, the plaintiff and the defendant made an agreement whereby the defendant allowed the plaintiff to acquire the 3 Shops from Madam Tse at a later date on the condition that the plaintiff would pay him the increase in the market values of the 3 Shops (“the Alleged Agreement”).

6.  It is common ground that Madam Tse, on 15 July 2006, assigned her interests in Shops 44 and 45 to Standard Glory Investment Ltd (“Standard Glory”) and Smart Business Investment Ltd (“Smart Business”) respectively, both of which were companies owned and controlled by the plaintiff.  On 4 May 2007, Madam Tse also assigned her interests in Shop 43 to Standard Glory.  These transfers were conducted by way of ordinary sale and purchase transactions with Madam Tse as the vendor and Standard Glory or Smart Business as the purchaser.  The defendant claims that he was not aware of such transfers until a much later date.

7.  The relationship between the parties turned sour in late 2007, and there is a dispute between the parties as to the exact cause for the deterioration of the relationship.  The defendant then demanded the plaintiff to pay him, inter alia, the increase in the market values of the 3 Shops.  However, the plaintiff disputed the existence of the Alleged Agreement and claimed that he had repaid all the loan advanced by the defendant for the purchase of the 3 Shops.

8.  There were then frequent confrontations between the plaintiff and the defendant in the Clinic.  Heated arguments were exchanged on these occasions and reports were sometimes made to the police.

9.  On one of such occasions, the plaintiff alleged that the defendant had blackmailed him.  Report was made to the police, and consequentially the defendant was prosecuted for the offence of criminal intimidation.  He was convicted after trial in the Kwun Tong Magistracy on 25 June 2010.  The defendant appealed successfully, and his conviction was quashed by DHCJ Toh, as she then was, on 15 February 2011.

10.  In the period from March to June 2011, the defendant posted up and distributed a notice about the plaintiff (“the Notice”) in various busy locations in the vicinity of the Clinic, including: (i) the places near Lam Tin MTR Station Exits A and D1 (which are about 2 minutes’ walking distance from the Clinic); (ii) the places near Sing Yin Secondary School where the plaintiff was educated in the past; (iii) the places near Kai Tin Shopping Mall; and (iv) the places near Lam Tin Polyclinic where some of the plaintiff’s patients visited regularly.  Further, the defendant posted up the Notice in Kowloon Tong near Diocesan Preparatory School where the plaintiff’s daughter studied and Diocesan Boys’ School where the plaintiff’s son studied. The plaintiff’s son and daughter were then aged 13 and 10.

11.  The Notice was in Chinese and the contents read as follows:

“藍田林傳龍屈老豆
[號外] 坐監失敗!
父上訴得直!
呃錢呃鋪不認親
屈父屈到上法庭
讀書讀到廿八歲
留班三年冇人知
仔打老父駡乞兒
大話連篇送入冊
如此心腸怎行醫？

12.  The contents of the Notice can be translated as follows:

“Lam Tin’s Lam Chuen Lung frames his own father
[Breaking News ] Tried in vain to send dad to jail!
Dad succeeded on appeal!
Cheated the money and the shop premises, such a denial of kinship
Framed his own dad and took him to court
Failed to complete education until age 28
Being a repeater for 3 years went unknown
Son hit dad and called him a beggar
Series of lies sending one to prison

How can someone with such a cruel heart be a physician?”

13.  The Notice was posted up and distributed together with a newspaper report about the successful appeal of the defendant in the said criminal proceedings (“the Criminal Proceedings”).

14.  It is the plaintiff’s case that the following words in the Notice were defamatory of the plaintiff: “林傳龍… … 呃錢呃鋪” (Lam Chuen Lung … … cheated the money and the shop premises)(“the Words”).

15.  According to the plaintiff, the defendant also went to the Clinic frequently, harassing him and causing a lot of nuisance in the Clinic.  On 10 October 2011, the plaintiff commenced HCA No 1707 of 2011 (“the Related Action”) against the defendant to claim for, inter alia, injunctive relief and damages for the alleged trespasses and nuisance caused by the defendant in the Clinic.

16.  On 27 January 2012, the plaintiff commenced the present action against the defendant to claim for, inter alia, damages for defamation caused by the publication of the Notice by the defendant.  In this action, the defendant also lodged a counterclaim against the plaintiff claiming for the payment of the increase in the market values of the 3 Shops pursuant to the terms of the Alleged Agreement.

17.  Apart from these 2 actions, there is another pending litigation between the plaintiff and his parents about the ownership of a residential flat in Sceneway Garden, in which the plaintiff’s parents are now residing.

18.  Both the Related Action and the present action have been ordered to be tried at the same time.  However, the Related Action was settled shortly before the trial.  Under the settlement agreement, the defendant agreed to give various undertakings and to pay damages and costs to the plaintiff for the alleged trespasses and nuisance caused to the plaintiff. In such circumstances, I only have to deal with the defamation claim and the defendant’s counterclaim in this action.

19.  The trial itself was an emotional one.  Tears were flowing in the court, and I could feel a deep sense of bitterness between the parties after what had happened in the recent years, in particular the agony that the parties had to suffer in undergoing the Criminal Proceedings.  As the present claim is a very much a family dispute and the litigation is continuing to hurt the relationships within the family, I had made several attempts to see whether the parties were able to resolve their differences without the intervention of the court.  With much regret, I still have to write the judgment for this case.

20.  On the 4^th day of the trial, when the defendant was asked as to whether he had thought about the effect of his conduct on his grandchildren, the defendant appeared emotional.  The defendant indicated to the court that he wanted the case to be concluded as soon as possible, and he just wished to see his grandchildren again.  The trial was again adjourned for a short while to see whether that the case could be resolved by other means.  After the resumption of the trial, Mr Earnest Cheung, counsel for the defendant, made an open statement in the court that the defendant was willing to offer an apology to the plaintiff, though Mr Cheung had not informed the court about the exact terms of such apology.  The defendant was also willing to pay compensation and legal costs to the plaintiff in the respective sums of $88,000 and $100,000.   Further, the defendant agreed to withdraw the counterclaim in any event.  Regrettably, the case still had to continue.  Leave was then granted for the withdrawal of the counterclaim, and so I only have to deal with the plaintiff’s defamation claim in this action.

PUBLICATION OF THE DEFAMATORY WORDS REFERRING TO THE PLAINTIFF  

21.  There is no serious dispute that the defendant posted up and distributed the Notice in the period from March to June 2011 in the manner as alleged by the plaintiff.  Although the defendant claims that he had asked someone in a library to write the Notice for him, he accepts that he was author of the contents in the Notice.  Hence, there is no question about the publication of the Words by the defendant.

22.  The Words referred to the plaintiff whose name appeared in the beginning of the Notice.  Further, the Notice was posted up and distributed by the defendant together with a newspaper report naming the plaintiff and the defendant as the plaintiff’s father.  Hence, it was clear that the Words referred to the plaintiff.

23.  The defendant disputes that the Words complained of were defamatory.  But in my judgment, it is beyond argument that the Words, in their ordinary and natural meaning, meant and were understood to mean that the plaintiff was dishonest, and he cheated money and shop premises out of people.  The Words exposed the plaintiff to contempt and ridicule by others and caused others to shun him.  The Words also lowered the plaintiff’s estimation in the eyes of right-thinking members of society and adversely affected his professional practice as a doctor in a private housing estate.  This was particularly so when the Words imputed “dishonesty” on the part of the plaintiff. Hence, I find that the Words were defamatory of the plaintiff.

THE DEFENCE OF JUSTIFICATION

24.  As I see it, the only serious issue on liability relates to the defence of justification pleaded by the defendant.  In determining whether the Words complained of were true in substance and in effect, I have to make a factual finding as what was the arrangement between the plaintiff and his parents relating to the purchase of the 3 Shops.

25.  Mr C Y Li, SC, counsel for the plaintiff, submits that even if the defendant can prove the existence of the Alleged Agreement, it is no more than a monetary dispute between the parties.  That is far from saying that the plaintiff was dishonest and had cheated the Shops out of his parents.

26.  I certainly have some reservation with such argument.  If the defendant can indeed prove the existence of the Alleged Agreement, it is certainly open to the court to infer that the plaintiff had had no intention to pay the defendant the increase in the market values of the 3 Shops, whether at the time of the making of the Alleged Agreement or at the time of the transfers of the 3 Shops to the plaintiff’s companies.  If the court were to make such inference, it is open to the defendant to argue that the Words were true in substance and in effect.  Hence in my judgment, the real issues about the defence of justification are: (i) who was the real purchaser of the 3 Shops; and (ii) whether the plaintiff and the defendant had made the Alleged Agreement as claimed by the defendant.

(i) Evidence adduced by the parties at the trial

27.  At the trial, the plaintiff and his bodyguard, Mr Lam Kwok Wai (“Mr Lam”), testified on behalf of the plaintiff’s case, whilst the defendant and Madam Tse testified on behalf of the defence case.

(a)   Evidence in support of the plaintiff’s case

28.  According to the plaintiff, the property market was not performing well in 2004.  On or about 16 June 2004, the plaintiff learnt from one Mr Chan Chi Kwong (“Mr Chan”), the owner of Forden Investment Ltd (“Forden”), that Forden was in default of the repayment of the mortgage loan in respect of the 3 Shops, and the mortgagee bank, Chiyu Banking Corporation Ltd (“Chiyu Bank”), had agreed to sell, by way of provisional sale and purchase agreement, the 3 Shops to a medical practitioner known as Dr Chan Kwok Yeung (“Dr Chan”) at a price of $1,350,000 for each Shop.

29.  The plaintiff was afraid that Dr Chan, by purchasing the 3 Shops, might move his clinic to the 3 Shops or any of them. In order to avoid such potential business threat, the plaintiff considered to buy the 3 Shops himself.

30.  As the plaintiff did not have sufficient fund to finance the purchase, the plaintiff approached Madam Tse for assistance.  After consulting the defendant, Madam Tse agreed to lend the money to the plaintiff for the purchase of the 3 Shops.  There is no serious dispute that the money was actually provided by the defendant himself.  According to the evidence of both parties, such kind of borrowing had taken place before.

31.  After some negotiation, Chiyu Bank agreed to sell the 3 Shops to the plaintiff at a price of $1,450,000 for each Shop.  In order not to let Dr Chan to know about his involvement in the sale, the plaintiff had arranged Madam Tse to purchase the 3 Shops on his behalf.  On 25 June 2004, 2 provisional sale and purchase agreements, with one for Shop 43 and the other one for Shops 44 and 45, were made between Chiyu Bank as the vendor and Madam Tse as the purchaser, and Madam Tse paid a total sum of $435,000 as the deposit for the purchase of the 3 Shops.

32.  The plaintiff gave an account of how he came to handle the transactions for the acquisition of the 3 Shops, including applying for the mortgage facility from Wing Lung Bank, attending the solicitors’ firm, Edmund W H Chow & Co (“EC”), on 9 July 2004 with Madam Tse to execute the documents for the completion of the sale of Shops 44 and 45, arranging the payment by Madam Tse for the balance of the purchase price and expenses in the sum of $631,000 (consisting of $580,000 being the balance of the purchase price for Shops 44 and 45 and $51,000 for stamp duty and other expenses).  The sale of Shops 44 and 45 was completed on 16 July 2004.

33.  The sale of Shop 43 was completed later on 4 August 2004.  Prior to that, the plaintiff paid a sum of $320,824.50 as the balance of the purchase price for Shop 43.  Further, the plaintiff made the following payments for the purchase of the 3 Shops: (i) the sum of $45,000 as compensation for the commission of Dr Chan’s estate agent; (ii) the sum of $28,043.57 as requested by EC on 15 July 2004 as the payment under the apportionment account; and (iii) the sum of $650 as the premium for the fire insurance.

34.  The plaintiff was the guarantor of the mortgage loan advanced by Wing Lung Bank for the purchase of the 3 Shops.

35.  The plaintiff denied that he had ever made the Alleged Agreement with the defendant.  He also denied that he had ever attended the office of EC on 16 July 2004.

36.  After the completion of the purchase of the 3 Shops, the plaintiff made all the mortgage instalment repayments.  He also kept the bank passport of the account for the mortgage repayments.  The plaintiff was also responsible for all matters relating to the leasing of the 3 Shops, though the defendant sometimes assisted him in the collection of rent.

37.  According to the plaintiff, since the 3 Shops were purchased by Madam Tse on his behalf, Madam Tse eventually assigned the 3 Shops, by way of sale and purchase transactions, to the plaintiff’s companies in 2006 and 2007.  The plaintiff also gave an explanation as to why he did not come to secure the transfers of all the 3 Shops at the same time.

38.  The plaintiff provided the court with the details of the transfers of the 3 Shops back to the plaintiff’s companies, including the handling of the transfers with separate legal representation for the vendor and the purchaser and the execution of some of the legal documents by the defendant as a director of Standard Glory.

39.  The defendant had advanced a total sum of $1,066,000 ($435,000 + $631,000) to the plaintiff for the purchase of the 3 Shops.  The plaintiff told the court how he had repaid all the loan advanced by the defendant, including the payments by 2 cheques in the amounts of $390,532 and $250,792.90 issued by the solicitors’ firm acting for Madam Tse in July 2006 and May 2007 respectively, and the cheque dated 15 April 2007 issued by Standard Glory in the sum of $305,000.  He also produced a handwritten note prepared by him recording down in some details the various payments made by him for the repayment of the defendant’s loan (exhibit P-1).

40.  According to the plaintiff, his relationship with the defendant turned sour in late 2007 because of a family incident involving one of the plaintiff’s brothers, Mr Lam Chuen Kwan (“the plaintiff’s Brother”).  By that time, the plaintiff’s Brother intended to run a business in one of the shops in the Plaza owned by the plaintiff.  However, Madam Tse later told the plaintiff that the plaintiff’s Brother was not interested in running the business anymore and so the plaintiff re-leased the shop to another tenant.  As the defendant had purchased a lot of trading tools for the intended business of the plaintiff’s Brother, he was not happy about the re-leasing of the shop.  The defendant also complained about the missing of the cash of $40,000 allegedly placed by him in the shop before the re-leasing.

41.  After such family dispute, the defendant had kept on harassing the plaintiff by, inter alia, calling to the Clinic on many occasions, using mucilage to seal the lock of the Clinic, wrongfully entered the Clinic, shouting loudly and causing disturbances both inside and outside the Clinic.

42.  According to the plaintiff, it was only in December 2009 that the defendant first made a demand to him to pay for the increase in the market values of the 3 Shops.  The confrontation between the plaintiff and the defendant on 29 December 2009 eventually led to the Criminal Proceedings in which the defendant was charged with the offence of criminal intimidation.

43.  The plaintiff also told the court about the payment of a sum of $1,500,000 to the defendant on 1 October 2008.  The plaintiff claimed that such payment consisted of the repayment of an alleged loan in the sum of $700,000 advanced by the defendant to him back in 1999 and interest for such loan in the sum of $800,000.

44.  After the harassment by the defendant, the plaintiff had concern over his own personal safety and so he had engaged Mr Lam to be his bodyguard since January 2010.

45.  The plaintiff also gave an account about the posting up and the distribution of the Notices by the defendant from March to June 2011.  He told the court the pain and the embarrassment that he had to suffer during that time.  In particular, his son had been teased by his schoolmates and had broken down in tears on a number of occasions, and the plaintiff and his wife had to wake up early in the morning to remove the Notices before taking their son to school.  According to the plaintiff, it was a difficult decision for him to sue his father in court, but he was forced to do so by the defendant.

46.  The evidence of Mr Lam, the plaintiff’s body guard, basically related to the posting up and the distribution of the Notices by the defendant.   He also told the court about the defendant’s trespasses and nuisance caused by him both inside and around the Clinic.

(b)   Evidence in support of the defendant’s case

47.  On the other hand, the defendant testified that the 3 Shops were actually purchased by him.  Some time in 2004, the plaintiff told him that the 3 Shops were offered for sale by Chiyu Bank.  The plaintiff told him that it was a good investment to buy the 3 Shops but the plaintiff did not have the money to finance the purchase.  The defendant therefore decided to purchase the 3 Shops himself.

48.  By that time, the defendant was told that there was another purchaser who had paid the deposit for the purchase of the 3 Shops.  The defendant had been a long-term customer of Chiyu Bank and he therefore approached one Ms Chung of the Kwun Tong branch of Chiyu Bank, who told him to contact the manager of the headquarters for the purchase of the 3 Shops.  After knowing the purchase price agreed to be paid by the other purchaser, the defendant offered a sum of $1,400,000 each to purchase the 3 Shops.  The plaintiff told him that Chiyu Bank counter-offered a price of $1,450,000 for each Shop.  The defendant agreed.

49.  The plaintiff told him that he needed to pay “tea-money” of $50,000 to compensate for the commission of the estate agent of the original purchaser.  The defendant paid such sum in cash to his wife who passed it to the plaintiff.

50.  On 19 June 2004, the defendant paid two respective sums of $145,000 and $290,000 as the deposit for the purchase of the 3 Shops.

51.  Although the 3 Shops were acquired by the defendant for the benefit of Madam Tse and himself, the defendant decided that the 3 Shops would be purchased in the name of Madam Tse.

52.  On or about 9 July 2004, the defendant issued a cheque in the sum of $631,000 for the completion of the purchase of Shops 44 and 45.

53.  On or about 16 July 2004, the plaintiff, the defendant and Madam Tse went to the office of EC to sign some documents for the purchase of the 3 Shops.  In the office of EC, the plaintiff told him that he wanted to be the person owning most of the shops on the 3^rd floor of the Plaza, and the plaintiff offered to pay a sum of $51,000 as the deposit for the acquisition of the 3 Shops from the defendant.  By that time, the defendant did not provide an answer to such request and he did not accept the sum of $51,000.

54.  In the evening on the same day, the plaintiff asked Madam Tse to go to the Clinic.  When she arrived, the plaintiff asked her to accept the sum of $51,000.  Madam Tse initially refused.  The plaintiff then went into a fury, and Madam Tse eventually agreed to accept the payment.  After being informed about such incident, the defendant went to the Clinic in the same evening.  As they were all members of the same family, the defendant finally agreed to transfer the 3 Shops to the plaintiff provided that the plaintiff agreed to pay any increase in the market values of the 3 Shops to him.  The plaintiff agreed and the defendant therefore kept the sum of $51,000 under the Alleged Agreement.

55.  Upon the making of the Alleged Agreement, the plaintiff and the defendant regarded the former as the real owner of the 3 Shops.  According to the defendant, that was the reason why the plaintiff agreed to pay the balance of the purchase price of Shop 43 himself.

56.  The purchase of the 3 Shops was financed by a mortgage loan offered by Wing Lung Bank.  The defendant had paid a total sum of $1,066,000 for the purchase of the 3 Shops ($290,000 + $155,000 + $631,000).

57.  In July 2006, the plaintiff asked Madam Tse to go to the Clinic to sign some legal documents, and he also handed her a cheque in the sum of $390,532.  The defendant went to the Clinic on the following day.  The plaintiff told him that, after the transfer of the 3 Shops to the plaintiff, he would pay the defendant the increase in the market values of the 3 Shops.

58.  In May 2007, the plaintiff again asked Madam Tse to go to the Clinic to sign some legal documents, and 2 cheques in the sums of $305,000 and $250,792 were handed to Madam Tse.  The defendant again went to the Clinic on the following day.  The plaintiff told him that as he did not have sufficient money at that time, he would pay the defendant the increase in the market values of the 3 Shops at some future date.  However despite repeated demands made by the defendant, the plaintiff refused to make such payment to him.

59.  There is some confusion in the defendant’s evidence as to when he first knew about the transfers of the 3 Shops from Madam Tse to Standard Glory and Smart Business.  In his witness statement, he said that he was not aware of the transfers (at least for Shop 43) until 2010[1].  However, he admitted at the trial that he signed some of the transfer documents as a director of Standard Glory in 2006 and 2007, though he only did so upon the instruction of the plaintiff without understanding the contents of the documents.

60.  Because the plaintiff had refused to pay him the increase in the market values of the 3 Shops, the defendant claimed that he was justified in publishing the Words about the plaintiff as contained in the Notice.

61.  The defendant had also emphasised many times about the pain and agony that he had to experience as a defendant in the Criminal Proceedings.  In particular, it was his own son who had made the complaint against him.  After his successful appeal, he wanted the whole world to know about the matter.  He admitted that he was impulsive, but he only wished to air his grievances.  He did not mean to hurt anyone in particular his grandchildren.  By posting up and distributing the Notices, he denied that he was seeking to take revenge on the plaintiff.

62.  Upon cross-examination, the defendant admitted that he and his wife do own about 5 properties, though some of them are industrial units and former public housing units.

63.  Though there was some inconsistency, the evidence of Madam Tse was more or less the same as that of the defendant.

(ii) Assessment of the evidence

64.  Having carefully considered all the evidence in this case, I find the plaintiff to be an honest and reliable witness.  After observing him in the witness box, one may perhaps describe him to be a mean and a meticulous person, especially when it comes to money matters.  He also appears to me to be a stubborn and an inflexible person.  But because of such character, I accept his evidence that he would repay every cent he borrows from others and he would not take advantage of others in money matters.  Further, the plaintiff always gave the evidence in a clear and straightforward manner, and he had not tried to evade any questions put to him by the defence counsel.  His account of the events has all along been consistent and logical, and I accept his evidence as the truth.

65.  On the other hand, I have to find, with much regret, that the evidence of the defendant and Madam Tse is not reliable.  My reasons are as follows.

66.  Firstly, the defendant could not provide a satisfactory explanation as to why he used the name of his wife to purchase the 3 Shops.  The defendant had a history of buying properties for investment in the past.  These properties were purchased in the joint-name of his wife and himself.  Same as the arrangements for the previous properties, the 3 Shops were meant to be the joint properties of the defendant and Madam Tse.  When he was asked as to the reason why the 3 Shops were acquired in the name of Madam Tse alone this time, the defendant just simply replied that it made no difference whether the 3 Shops were purchased in Madam Tse’s name or their joint-name.  When he was pressed for the real reason, the defendant changed his story by alleging that it would be more convenient to deal with the 3 Shops if they were purchased in Madam Tse’s sole name.  However, he could not explain why and how it would be more convenient to have them purchased in the sole name of Madam Tse.  After all, Madam Tse is just a housewife and allegedly illiterate.

67.  Later in his testimony, the defendant provided another explanation by saying that the plaintiff did not want Dr Chan to know about the identity of the real purchaser.  However, if the 3 Shops were acquired by the defendant and his wife without the involvement of the plaintiff, why would the plaintiff, the defendant or indeed anyone else be concerned if the 3 Shops were purchased in the joint-name of the defendant and Madam Tse?  In my judgment, this answer of the defendant is actually consistent with the plaintiff’s version that the plaintiff, being the real purchaser, did not want Dr Chan to know that his competitor was buying the 3 Shops, and so he asked Madam Tse to purchase the 3 Shops on his behalf.

68.  Secondly, there is some confusion in the defendant’s account as to how he came to know about the offer for the sale of the 3 Shops.  At one time, he said that he had talked to one Ms Chung of the Kwun Tong branch of Chiyu Bank who directed him to talk to the manager of the headquarters about the purchase.  Then he abruptly changed his evidence and said that the plaintiff came to tell him about the intended sale of the 3 Shops by Chiyu Bank and the price offered by the other purchaser, and it was the plaintiff who conducted the negotiation for the purchase of the 3 Shops.  I agree with Mr Li that the defendant’s account was simply unclear, truncated and incomplete.

69.  Thirdly, if the defendant was the real purchaser of the 3 Shops, I cannot quite understand why the plaintiff got himself so involved in the transactions, including agreeing to be a guarantor for the mortgage loan and paying some of the expenses and disbursements for the purchase of the 3 Shops.  This was not a case where a filially devoted son was offering financial assistance to his own parents to purchase a residential flat for their own living.  According to the plaintiff, if the 3 Shops were acquired by his parents for allegedly investment purpose, he would not have agreed to act as a guarantor for the mortgage loan as there was no reason for his parents to acquire properties for investment when they did not have the means to pay the mortgage loan and for him to take up the risk and liability.  This was in fact consistent with the character of the plaintiff.

70.  One should also note that the plaintiff applied for the mortgage loan as early as 5 July 2004, well before the date of the Alleged Agreement on 16 July 2004.   By that time, there was simply no reason for the plaintiff to have agreed to be a guarantor for the mortgage loan, unless he was the ultimate purchaser of the 3 Shops.

71.  On the other hand, no explanation had been given by the defendant or Madam Tse as to why the plaintiff had arranged for the mortgage loan or had agreed to act as the guarantor.  Indeed, the defendant asserted that he had the money to finance the purchase and he could obtain a 50% mortgage loan from Chiyu Bank with which he had a good relationship.  If that was the case, I wonder why the plaintiff had to arrange for a 70% mortgage loan and agreed to take up the liability as a guarantor.  It simply does not make sense.

72.  Apart from agreeing to be the guarantor, the plaintiff also paid some of the fees and expenses for the purchase of Shops 44 and 45 as well as the balance of the purchase price of Shop 43.  As confirmed by the bank transfer slips, the plaintiff paid a sum of $28,043.57 to EC on 16 July 2004 as the sum due under the apportionment account and a sum of $650 to EC on 19 July 2004 as fire insurance premium.  Further, as confirmed by a cheque issued by the plaintiff, he paid a sum of $320,824.50 on 3 August 2004 to EC for the completion of the purchase of Shop 43.  If the plaintiff was not the ultimate purchaser of the 3 Shops, I do not believe that he would have been so generous in making these substantial payments just for the purpose of helping the defendant to buy some properties for investment purpose.

73.  There is also a side issue about these payments made by the plaintiff.  Although the defendant claimed that he had paid the “tea money” of $50,000, I accept the evidence of the plaintiff that he was the one who paid the sum of $45,000 to compensate for the commission of Dr Chan’s estate agent.  After all, the plaintiff could produce the receipt for the payment, and the figure of $45,000 (rather than the sum of $50,000 alleged by the defendant) also tallied with the amount stated in the receipt.

74.  Fourthly, the defendant had been giving different versions about the terms of the Alleged Agreement.  On the defendant’s pleaded case and his witness statement of which he confirmed in the witness-box, the understanding and agreement between the plaintiff and the defendant was that once the Alleged Agreement was made on 16 July 2004, the 3 Shops belonged to the plaintiff and the plaintiff’s only obligation was to pay him the future increase in the market values of the 3 Shops.  There was no other term according to the defendant.

75.  This was quite different from the defendant’s testimony in the trial of the Criminal Proceedings (“the Criminal Trial”).  In the Criminal Trial, the version advanced was that an option had been given to the plaintiff to acquire the 3 Shops at market value[2].  Which version was then the truth?  Further if the plaintiff was only given an option to purchase the 3 Shops at a later date, why would the plaintiff have agreed to pay for the balance of the purchase price for Shop 43?

76.  The terms of the Alleged Agreement were also extremely vague.  What was the point in time for the calculation of the increase in the market values?  What happened when the market fell?  In fact, the defendant had, in his pleadings, put up different versions about the exact time as to when the increase in the market values was to be assessed.  The first version was the time when the defendant made the demand.  The second version was mid-2007.  The last version was the dates of the transfers of Shops 44 and 45 to Standard Glory and Smart Business on 15 July 2006 and the transfer of Shop 43 to Standard Glory on 4 May 2007.  When being asked in cross-examination as to why there were different versions, the defendant failed to provide a satisfactory answer.

77.  The uncertainty of the defendant’s case can further be shown in a statement said to have been prepared by the defendant in 2011 entitled “林傳龍和父親的部分欠款記錄” adduced as evidence in the Related Action (“the defendant’s Loan Record”).  According to such document, the amount of the increase in market values payable to him for the 3 Shops was $6,000,000.  On being asked as to how he came up with such figure, he replied that he came up with it by looking at the prices of the shops in Sceneway Garden in 2010.  The plaintiff had never explained why the amount of the increase in the market values was $6,000,000, but it was clear that he took the view that the amount of the increase could be determined with reference to the market prices at any point in time.  If that was the case, the Alleged Agreement was simply irrational and defied common sense.

78.  One should also note that the evidence given by the defendant in the Criminal Trial[3], and indeed during cross-examination at the trial, relating to the increase of the market values was quite different.  On these occasions, the defendant said that the payment of the increase in market values was something to be talked between the parties, which indicates that, even according to the defendant’s own case, there has yet been a binding agreement made between the parties.

79.  Apart from the vagueness of the terms of the Alleged Agreement, the agreement itself also did not make much sense.  If the defendant alleges that the amount of the increase was to be paid when the plaintiff formally caused the transfer of the 3 Shops back to him, why should the plaintiff choose to do so only when the market price rose?  Why the plaintiff did not just arrange for the transfer of the 3 Shops back to him soon after the completion and instead to wait for 2 or 3 more years?  Furthermore, if the parties had made the Alleged Agreement on 16 July 2004 as alleged by the defendant, the plaintiff would have to pay the amount of the increase in the market values to the defendant in any event, why would the plaintiff have agreed, under such circumstances, to pay a substantial amount of $320,824.50 for the completion of the purchase of Shop 43?  In my judgment, the absence of satisfactory answers to these questions undermines the credibility of the defence case about the existence of the Alleged Agreement.

80.  Further, the defendant claimed that the plaintiff gave him a sum of $51,000 as the deposit under the Alleged Agreement.  However, no satisfactory explanation had been given as to why the plaintiff or the parties had agreed to such particular odd figure?  Hence, I prefer to accept the evidence of the plaintiff that such payment was in fact a part repayment of the loan advanced by the defendant to the plaintiff.

81.  Fifthly, there is considerable confusion in the evidence of the defendant and Madam Tse about their execution of the documents relating to the transfers of the 3 Shops to the plaintiff’s companies in 2006 and 2007.  According to the defendant’s evidence in his witness statement, Madam Tse did tell him that she had, upon the instruction of the plaintiff, signed some transfer documents about the Shops in 2006 and 2007[4].  On each of such occasions, the defendant went to the Clinic the following day to find out more about the matter.  However, this was quite different from the evidence of Madam Tse given in the Criminal Trial[5] and during cross-examination in this trial.  According to Madam Tse, she did not know the nature of the documents she was asked to sign or the purpose of receiving the cheques.

82.  In any event, this was not the complete picture.  It is clear that the defendant was and still is a nominal shareholder and director of Standard Glory, and so he had to execute certain documents as a director of the company for the transfers of Shops 43 and 44 to Standard Glory, including sale and purchase agreements, assignments, board resolutions of Standard Glory relating to the transfers, facilities letters and mortgage documents.  It was only when he was asked about these documents during cross-examination that he first admitted signing these documents.  In my judgment, such lack of frankness certainly indicated an attempt by the defendant to give an illusion to the court that he and Madam Tse were only aware of the details of the transfers at a much later date.

83.  According to the defendant and indeed Madam Tse, they simply signed the transfer documents as instructed without understanding the contents.  However, the transfers had been effected as ordinary conveyancing transactions with the solicitors’ firm of Pang Wan & Cho representing Madam Tse as the vendor and Yung, Yu & Yuen representing the purchasers, i.e. Standard Glory and Smart Business.  It is very difficult for me to imagine that these solicitors would have ignored their professional duties in not explaining the contents of the documents to the defendant and Madam Tse just for the purpose of helping the plaintiff to effect the transfers.

84.  When Madam Tse was pressed about this matter in her cross-examination, she finally admitted that some ladies did explain to her about the contents of the documents.  Obviously, the defendant and Madam Tse sought to depict a picture that they knew nothing about the transfers until a much later date (though there was confusion about the exact date when they first knew about the transfers), but this was simply not true.  Furthermore, Madam Tse had received cheques of substantial amounts from the plaintiff after each transfer, and it simply defies common sense that the defendant and Madam Tse did not make an attempt to find out the reasons for signing the documents. Hence, I reject their evidence that they knew nothing about the transfers when they executed the legal documents in 2006 and 2007.

85.  Sixthly, I have serious doubt about the evidence of the defendant relating to a sum of $700,000 advanced by him to the plaintiff back in 1999.  According to the plaintiff, Madam Tse told him by that time that such sum of money was a gift to him for paying the decoration expenses of the plaintiff’s house in Sai Kung.  When the defendant later asked him for the repayment, the plaintiff paid the defendant a sum of $1,500,000 on 1 October 2008 which comprised the repayment of the sum of $700,000 and interest of $800,000.

86.  The defendant admitted receiving the sum of $1,500,000 but denied charging interest for the “loan”.  However, the defendant’s Loan Record showed that such interest was being charged.  In fact, there was a record of the principal loan of $700,000 and interest of $800,000 in the document.  The defendant sought to explain this by saying that the record only showed the amount of interest if it was indeed payable as said by the plaintiff. However, this explanation is totally contradicted by the contents in the defendant’s Loan Record.  To me, the title of the document is clear, and the defendant had indeed confirmed in such document that the sum of $8,000,000 odd as shown there was meant to be the sum that the plaintiff was still liable to pay him.  The respective sums of $700,000 as principal loan and $800,000 as interest were recorded down as “repayment by the plaintiff”.  If the defendant did not mean to charge the plaintiff interest for the alleged loan, I wonder why the defendant had made such record in the document.  In my judgment, there was no mistake that the defendant did charge substantial interest for the “loan” advanced by him to the plaintiff back in 1999.  This incident also shows that demands for payment could have been made by the defendant arbitrarily, and the defendant expected the plaintiff to be submissive to him in money matters.

87.  Seventhly, the defendant was evasive as to the real reason for the breaking down of the relationship between the plaintiff and himself.  The plaintiff’s account, which relates to a dispute arising from the leasing of Shop 38 to the plaintiff’s Brother, is a logical explanation for the deterioration of the relationship.  On the other hand, the defendant and Madam Tse failed to give any explanation about such matter in their witness statements.  On being cross-examined, the defendant explained that the relationship became bad as a result of the plaintiff asking him to do some removal works in relation to some other shop.  Quite surprisingly, the defendant tried to distant himself from the dispute relating to Shop 38 by saying that he had nothing to do with this shop except paying the rent to assist the plaintiff’s Brother in the running of the business.

88.  The defendant had provided very little details about the dispute relating to the other shop, and I have great reservation as to how this apparent trivial incident had led to a complete breaking down of the relationship between the parties.  Further, the explanation given by the defendant and Madam Tse was inconsistent with their evidence given in the Criminal Trial.  Both of them admitted in the Criminal Trial that the cause of the deterioration of the relationship related to the leasing of Shop 38[6], and Madam Tse also gave an account about the involvement of the defendant in the operation of the business planned to be carried on at such shop[7]. Obviously, the real cause of the deterioration of the relationship is one of the crucial issues in this case.  The serious inconsistency of the evidence relating to such issue and the reluctance of the defendant to address the real cause of the deterioration of the relationship, in my judgment, cast serious doubt on the credibility of the evidence of the defendant and Madam Tse.

89.  In considering the evidence of the defendant and Madam Tse, I have already taken into account their age and the stress that they had to experience whilst giving evidence in the court-room.  However, despite their age, both the defendant and Madam Tse appeared to me to be alerted persons and they had no difficulty in understanding the questions put to them.  In assessing the credibility of their evidence, I have already discarded some inconsistencies which are immaterial to the case, for example the defendant could not quite tell the court the exact year in which he was born.  Nevertheless, I cannot quite understand why there are so many inconsistencies in their evidence about the crucial issues of the case.

90.  According to my observation of the defendant in the witness-box, he is very proud of his son being a doctor.  On the other hand, he is a traditional Chinese man who expects his son to be submissive to him.  He also has high expectations of the plaintiff, for example he expected the plaintiff to help his brother in starting his business.  Further, as he had provided assistance to the plaintiff in purchasing the 3 Shops, he expected his son to share the profit with him.  If the plaintiff failed to meet these expectations, he would be deeply frustrated and behaved in a quite irrational manner.  He is also an impulsive person, without giving much thought to the consequences of his conduct.  He also takes a firm view that the plaintiff, being his own son, should not have brought him to court, and so the plaintiff should be the one responsible for the hostility within the family.  His perception of the truth is, in my judgment, distorted by his own personal belief as to what he thought had happened, and that is why some of his evidence does not make much sense at all.  In such circumstances, it is very dangerous for the court to rely on his testimony and so I have no option but to reject his evidence.

91.  On the other hand, I find Madam Tse to be a dependent housewife who is obedient to the defendant.  She also has a deep sense of bitterness towards the plaintiff.  She regards him not to be a filially devoted son, in particular the plaintiff had brought her husband and indeed herself to courts on a number of occasions.  There is also a real risk that her evidence has been influenced by the defendant.  Based on these observations and the various factors mentioned above undermining the credibility of her evidence, I reject the evidence of Madam Tse as well.

92.  In his submission, Mr Cheung relies on some of the movements of funds in the defendant’s bank account with a view to support the credibility of the defence case.  However, since the witnesses had not been asked about such matter at the trial, any explanation about these movements of funds is only speculation on the part of Mr Cheung.  I therefore reject such submission.

93.  For the above reasons, I do not accept that the parties had made the Alleged Agreement.  I also find that the plaintiff had only borrowed money from the defendant to finance the purchase of the 3 Shops and the plaintiff had repaid all the loan advanced by the defendant for such purpose.  In such circumstances, the Words were not true in substance or in effect and the defence of justification must fail.  The defendant is therefore liable to pay damages to the plaintiff for publishing the defamatory Words about the plaintiff.

QUANTUM

94.  The plaintiff claims for general damages and aggravated damages.

95.  General damages are the compensation for the injury caused to the plaintiff’s reputation and the mental pain and suffering caused by the publication of the defamatory material.  The range of the publication and the extent that the defendant had persisted with the charge are all relevant in deciding the level of general damages[8].

96.  In support of the claim for general damages, the plaintiff relies on the following matters:

(i) the accusation of dishonesty on the part of the plaintiff as alleged in the Words;

(ii) the slander about the plaintiff relating to his study or learning ability, his alleged ill treatment of his father, his alleged lies and unsuitability to practice medicine;

(iii) the long duration of the posting up and the distribution of the Notices, i.e. from March to June 2011;

(iv) the geographical locations where the Notices were posted up and distributed, being close to the Clinic, the plaintiff’s secondary school and the schools of the plaintiff’s children;

(v) the fact that the Notices were distributed to all and sundry by the defendant;

(vi) the vast quantity of the Notices being posted up and the frequency that they were posted up; and

(vii) the injury suffered by the plaintiff bearing in mind that he has been practising as a housing estate family doctor at the Clinic since 1995 and the trauma suffered by the plaintiff’s children.

97.  A plaintiff can also ask the court to award aggravated damages in addition to general damages based on the conduct and the state of mind of the defendant.  Some of the relevant principles relating to the award of aggravated damages can be listed out as follows:

(i) aggravated damages are compensatory in nature[9];

(ii) the court may award aggravated damages if the defendant published the defamatory material with a malice[10];

(iii) it is necessary to consider the conduct and circumstances of the defendant from the time when the defamatory material was published down to the time when the verdict was given[11];

(iv) the failure of the defendant to apologise or his persistence with a plea of justification may aggravate the damages[12]; and

(v) a plea of justification which is not made good at the trial may form the basis of an award of aggravated damages[13].

98.  The plaintiff relies on, inter alia, the following matters to justify the award of aggravated damages:

(i) the defendant published the Notice maliciously with a view to damage the reputation of the plaintiff and to cause maximum embarrassment to the plaintiff and his children;

(ii) the publication of the Notice was part of the actions of the defendant to take revenge against the plaintiff arising out of the Criminal Proceedings and to pressurize the plaintiff to meet him so as to extract money from the plaintiff allegedly owed by the plaintiff to him;

(iii) the defendant has failed to offer an apology for his tortious act (though the defendant offered an apology on the 4^th day of the trial, the terms of the apology are unknown); and

(iv) the defendant has persisted with the plea of justification but fails to make good such defence at the trial (if that is the decision of the court).

99.  Mr Li has referred me to the following cases for the assessment of the plaintiff’s damages.

100.  In Hung Yuen Chan Robert v HongKong Standard Newspapers Ltd & Ors[14], the plaintiff was a practising solicitor and Honorary Vice-Consul for the Republic of Paraguay in Hong Kong.  He was awarded general damages of $700,000 for a defamatory article in a newspaper for his involvement in a passport scandal and his dismissal as Vice-Consul.  The defendant’s plea of justification was rejected by the court, and it was also a case that the defendant had refused to retract the article or to offer an apology to the plaintiff.

101.  In Boulter v Stanley[15], the plaintiff and the defendant, formerly co-directors and friends, were shareholders of a company.  The defendant made untrue accusations that the plaintiff and her husband were stealing his business.  The defamatory accusations were published to the company, the US principal and the plaintiff’s father.  The plaintiff was awarded $30,000 as damages for libel and $150,000 as aggravated damages.

102.  In Lee Ching v Lau May Ming[16], the plaintiffs were experienced and dedicated volunteer members of a charitable organisation.  The defendant was the chairperson of the board of the organisation.  The defendant issued a letter to all the members of the organisation explaining why the plaintiffs’ membership was terminated, claiming that the plaintiffs’ conduct was either irresponsible or dishonourable and characterising the plaintiffs as libellers, slanders and scandalmongers.  The plaintiffs were each awarded $200,000 as general damages and $200,000 as aggravated damages.

103.  In Blakeney-Williams v Cathay Pacific Airways Ltd[17], the plaintiffs were the pilots of the defendant airline.  The subject matter concerned some public statements issued by the defendant.  The Court of Final Appeal affirmed the general damages of $700,000 to each of the plaintiffs but rejected the plaintiffs’ claim for aggravated damages.

104.  In Chau Hoi Shuen, Solina Holly v SEEC Media Group Ltd[18], the plaintiff was a prominent businesswoman and a well-known philanthropist, and the defendant was a listed company providing advertising agency services and distribution of periodical magazine.  The defamatory article was contained in periodical magazine distributed by the defendant.  The court rejected the defence of innocent dissemination as a distributor put forward by the defendant, and awarded general damages in the sum of $650,000 to the plaintiff.  The claim for aggravated damages was rejected on the ground that such remedy should be reserved for more serious cases.

105.  So far as the remedy of general damages is concerned, I have taken into account all the factors advanced by Mr Li in support of such claim, in particular the long duration of the distribution and the posting up of the Notice, the effect of the publication on a professional man like the plaintiff and the injury on the plaintiff caused by the embarrassment. I have also borne in mind that the readers of the Notice might be persons related to the plaintiff, for example his patients, his schoolmates and the schoolmates of his children.

106.  However, the present case is different from other cases where the defamatory words were contained in, say, a newspaper article.  In the case of the latter, the readers may expect that the relevant reporter would have conducted an objective investigation before publishing the report, and the apparent objectivity of a newspaper report may have a serious impact on the person being defamed, in particular where honesty is crucial to the profession of the plaintiff, for example a solicitor in the case of Hung Yuen Chan Robert v HongKong Standard Newspaper Ltd & Ors[19].  Further, as compared with the posting up and the distribution of the Notice, a newspaper or a magazine may also have a very high circulation in the public.

107.  On the other hand, the circumstances under which the defendant published the defamatory Words, including the frequency and the duration of the posting up and the distribution of the Notice, suggest that the defendant had been acting in a quite impulsive and irrational manner towards the plaintiff.   Persons reading the Notice under such circumstances would certainly have sensed that the defendant was airing his grievances against the plaintiff, and to a certain extent, such lack of objectively might lessen the impact of the Words on the plaintiff himself.

108.  In assessing the general damages, I have ignored the words in the Notice which are not the subject matter of the complaint, for example, the allegation about the learning ability of the plaintiff.  I have also ignored the embarrassment caused to the plaintiff by the other conduct of the defendant not related to the publication of the Notice, for example, the other nuisance caused by the defendant both inside and near the Clinic.  Having considered all the circumstances of the case, I award $300,000 as general damages.

109.  I also accept that the plaintiff is entitled to claim for aggravated damages against the defendant.  Although the defendant’s lack of objectively and stubbornness might affect his perception of the truth, one cannot deny that that the posting up and the distribution of the Notice was part of the defendant’s campaign to air his grievances against the plaintiff. It is also beyond argument that the defendant’s publication of the Words was intended by him to cause maximum embarrassment to the plaintiff and his children.  Further, by refusing to offer any apology before the trial, it is clear to me that the defendant has continued to use the trial as an opportunity to air his grievances against the plaintiff, and he wants the public to know that his son has mistreated him by suing him in the court.  In my judgment, all these factors justify an award of aggravated damages.  Having considered all the facts of the present case, I award $200,000 as aggravated damages.

CONCLUSION

110.  I therefore grant judgment in favour of the plaintiff in the sum of $500,000.   I also make an order nisi in the following terms:

(i) there be interest on the said judgment sum at the judgment rate from the date of the writ until payment; and

(ii) the costs of the action including the counterclaim be paid by the defendant with certificate for 1 counsel.

111.  The order nisi shall be made absolute 14 days after the date of the handing down of this Judgment.

112.  This is the endnote of this bitter litigation. Unfortunately, the stubbornness and inflexibility of both the plaintiff and the defendant have fuelled the ongoing litigation between them, which is continuing to hurt the relationships within the family.  At this stage, I can only wish that the parties would have the wisdom of realising that the continuing hostility is a very bad message for the younger generation in the family, and it is now the time for them to forget the past and to explore whether there is any other way of resolving their differences without going to the courts again.