GREAT EAST ASIA SURVEYORS AND CONSULTANTS CO LTD v. CHAN KAM WAI FREDERICK

DCCJ1732/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1732 OF 2003

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R U L I N G

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1. There is before me a summons taken out by the plaintiffs which is in three parts. It relates to the defendant's defence and to his counterclaim. Before I go to its various parts, it is helpful to observe that this is a libel action, a rare proceeding in this court, brought by the plaintiffs against the defendant.

2. The 1st plaintiff describes itself as a surveying and consulting company that provides such services to the construction and marine industry, and amongst other things, it gives valuations in respect of property, industrial equipment and plant and machinery. The 2nd plaintiff, Miss Annie Li, is a director and the majority and controlling shareholder of the 1st defendant. The defendant, Mr Frederick Chan, is a highly qualified engineer holding a Master of Science degree as well as an MBA, who had previously been employed by the 1st defendant until his resignation on 23 December 2002.

3. The parting of the ways had not been an amicable one. Following his resignation, the defendant wrote a letter dated 17 February 2003 to the solicitors for the 1st plaintiff, Messrs King & Company and to the 1st plaintiff, and he sent a copy of it to Mr K H Lam, a senior labour inspector of the Labour Department. The plaintiffs complain that the letter is defamatory of them. The material parts of the letter have been set out in paragraph 5 of the statement of claim which I will need to repeat here.

"I accuse Great East Asia (GEA) and King & Company. I am writing to accuse the acts of forgery, betrayal, framing-up and persecution exerted on me by Great East Asia (GEA) and King & Company, and to demand proper apology, correction and remedy. Summarising the victimisation on me, my first accusation is based on my 24 January 2003 letter. As I received no written dispute within specified timeframe, I take your inaction as agreement to the letter. I hereby summarise the agreed facts as follows.

Trick for signing
About two weeks from commencement of work, August 2001, Miss Annie Lai of GEA requested me to sign two copies of contract with unfulfilled promises of staff copy and a three-month probation review of terms.

Forgery of signed contract
After the signing, GEA edited into the contract with adverse terms, including the claim of one-year work restriction in "clause 7." GEA withheld the staff copy and skipped the probation review to keep me from realising the forgery.

Spread false information
Immediately upon my resignation (24 December 2002), GEA issued standard faxes to numerous clients, made false claim of one-year work restriction on me so as to cause permanent and far-reaching damage behind my back.

Threat of legal action
King & Company issued legal letter (20 January 2003) and threatened legal action against my employer and me and demanded my immediate resignation.

Further victimisation on GEA staff
It comes to my knowledge that GEA and King & Company is repeating these dirty acts against current GEA staff. In the meeting held on 23 January 2003, I accused GEA and King & Company of, one, pressurising and threatening staff to sign contracts of 6-7 pages' content within a few minutes and tender undue influence, admitting that signed contracts would be edited afterwards (note: critical contents such as name and ID number are "deliberately" mistyped and misspelt to "legitimise their acts of forgery"), withholding signed copy of contract for subsequent forgery to serve any selfish and evil deeds, changing contract conditions in a legal manner and adding many terms in violation of the Employment Ordinance.

I've made formal report of these tricks and violations of the Employment Ordinance to the Labour Department in the letter dated 7 February 2003. Copying this letter is intended to assist their investigation.

Shedding the hideous cover
So far, attacks came behind me and under the cover of "legal persons," GEA and King & Company. Extracts shown on the right is the undersigning section of GEA's standard fax to clients (24 December 2002) and King & Company's legal letter to me (20 January 2003). Both reveal deliberate omission of names or company authorisation. The consistency and the unfolding of the events is not merely unprofessional, careless act. Hideous manner further confirmed concerted and intentional acts of fraudulence and corruption."

4. Paragraph 6 of the statement of claim sets out the ways in which the letter is said to be defamatory:

"(a) that the 1st plaintiff had committed acts of forgeries;

(b) that the 1st plaintiff framed up and persecuted the defendant;

(c) that the 1st and 2nd plaintiffs tricked and/or misled the defendant into signing an employment contract;

(d) that after the defendant signed the employment contract, the 1st plaintiff edited the employment contract signed by the defendant by adding terms adverse to the defendant, thereby forging the employment contract;

(e) that the 1st plaintiff deliberately withheld the employment contract from the defendant in order to avoid the defendant's discovery of the alleged forgery;

(f) that the 1st plaintiff spread false information about the defendant by falsely claiming that the defendant's employment contract contained a one-year work restriction;

(g) that the 1st plaintiff put undue pressure on its employees and forced them to enter into employment contracts by threats;

(h) that the 1st plaintiff edited the employment contracts after they were signed by its employees by changing their terms, many of which were illegal and/or in contravention of the Employment Ordinance;

(i) that the 1st plaintiff deliberately withheld such employment contracts from its employees in order to cover up the alleged forgeries;

(j) that the 1st plaintiff have committed unspecified "concerted and intentional acts of fraudulence and corruption."

5. Then on 18 March 2003, the defendant sent a statement, this time in Chinese to a number of the plaintiffs' customers and business associates. This is reproduced in paragraph 7 of the statement of claim:

"Declaration regarding Great East Asia Surveyors and Consultants Limited

Great East Asia Surveyors and Consultants Company Limited sent facsimile notice to the industry on 24 December 2002 to prohibit me from working in surveyors company within one year. I, Chan Kam-wai, Frederick, (works as a registered professional engineer in Great East Asia Surveyors and Consultants Company Limited during the period between August 2001 and December 2002) thereby make the serious declaration that the contract term mentioned in the above notice was in fact maliciously falsified by the person in charge of their company, Miss Li Pik-fong, who did the crime to return evil for good on people.

Great East Asia Surveyors and Consultants Company Limited has wrongfully detained the employment contracts of me and other employees, violating the Hong Kong employment law. (Great East Asia Surveyors and Consultants Company Limited) not only ignored the rights of the employees but also amended the terms of contracts unilaterally (and) harmed those people who were not obedient.

The relevant crime (of Great East Asia Surveyors and Consultants Company Limited) has been investigated and confirmed by Labour Department who has reproved and warned (Great East Asia Surveyors and Consultants Company Limited) for details. Please enquire from Miss Lee Pui-fun of labour inspection division (telephone number: 28152200; reference number: LID/COM29/2003).

Apart from sending of facsimile notices, Miss Li Pik-fong also forced me to discontinue working for my existing employer and threatened me with legal proceedings. The vexation and harm borne by me during this period is difficult to describe. I've made several written complaints to pursue the matter and demand for a meeting to reconcile. Unfortunately, Miss Li is very stunned and her action further intensified. Her subordinate, Mr Yeung Yu-ming, began to disturb and threaten my customers.

Due to the seriousness of such actions, I have to make this declaration to ensure a correct understanding of the facts. One clear example of Miss Li Pik-fong's foolish and hideous act can be easily seen from every document of the said company. The letterheads and envelopes are conspicuously marked with a title in brackets capitals "BSI and then member."

When confirmation was sought with the Hong Kong office of BSI, it was found that such accredited identity is completely false and fabricated. What is more raging is that over a 100 British standards kept and used by the said company are all infringing copies. Nothing is worse than the immodesty and shamelessness of hers..."

GREAT EAST ASIA SURVEYORS AND CONSULTANTS COMPANY LIMITED

BSI Member.

"It can be seen from this trifle that honest men in the industry will inevitably be misled and fooled by the wicked and tricky men to entrusting one person to be expelled, let alone the professional standard of a surveyor and consultant. Her integrity is not even comparable with the basic honesty of people of the lower classes. Morality is not upheld. Law is not enforced.

I hereby bravely come out and prove her hideous acts. Let's hope that leaders of the industry will be cautious to keep away from her. Anyone who cares, who would like to make enquiries, please contact me at any time (telephone number: 97312710). I hereby express my gratitude. Chan Kam-wai, Frederick. 27 March 2003."

6. Its defamatory nature is set out in paragraph 8:

"(a) the 1st and 2nd plaintiffs falsified the defendant's employment contract and committed a crime in doing so;

(b) the 1st plaintiff falsified employment contracts of its employees by unilaterally amending the terms thereof after they were signed by the employees;

(c) that the 1st and 2nd plaintiffs falsely claimed that the 1st plaintiff was a member of BSI, British Standards Institution. The 1st plaintiff was not a member;

(d) that the 1st plaintiff infringed the copyright of the British Standards Institution;

(e) that the 2nd plaintiff is a woman of no or low integrity, shameless and has acted dishonestly."

7. In reply, the defendant has put in a "homemade" defence and counterclaim. This fact of itself has caused much of the difficulty in this matter. The specialist libel bar, of which there is none in a relatively compact jurisdiction such as ours, prides itself in the economy and quality of its pleadings. The defendant's pleadings are all over the place with much evidence pleaded and fairly obvious potential defences of non-actionable publication and/or qualified privilege in respect of the first letter, making no appearance in the defence.

8. To make matters worse, the defendant has indicated that the counterclaim is there "as a matter of record" and that he does not wish to pursue it at trial. Given the opportunity to withdraw it now so as to minimise his exposure to costs, the defendant has declined to do so when given an indication of the plaintiffs' present costs in defending the counterclaim. It must follow that should he continue to maintain his counterclaim as a formality, his potential cost liability can only worsen.

9. As to the defence, its terms are there to be read. Without, I hope, doing the pleading an injustice, it really amounts to a denial that the words complained of are capable of being defamatory, and if they are, that they are true - it raises the defence of justification which he bears the burden of proving. Finally, the pleading taken in combination seeks to explain the nature of these two letters as an attempt to settle the dispute and obtain an explanation from the plaintiffs for what they are said to have done in their employment practices and to the defendant in particular.

10. From this, I turn to the summons. Mr Chain, who appears for the plaintiffs, rightly submits that just because the defendant is in person, as are his pleadings, the plaintiffs should not find themselves at a disadvantage, notwithstanding any sympathy that the court would have for the unrepresented litigant, particularly in a technical area such as this.

11. Now, following Mr Chain's written submissions, I take the request for further and better particulars first which appears in paragraph 3 of the summons. It seems to me that every one of the four requests is a proper one and should be responded to by the defendant. I shall direct that he does so within 28 days from today. In every request, (a) to (d) inclusive, the plaintiff is entitled to know with more precision than is presently pleaded the nature of the defendant's case. As to (d) which refers to the counterclaim, the plaintiffs must know what is the damage allegedly suffered by the defendant and how it is quantified or whether the said damages are at large to be assessed by the court. If that is so, then how this damage is said to arise must be made clear.

12. In respect of the counterclaim, now that I have ordered these particulars, this is a further opportunity for the defendant to make his position clear as to whether he wishes to actually proceed with it, or whether it is there really as window dressing. Again, I remind him of the mounting consequences as to costs the longer the counterclaim remains extant.

13. Since the matter was argued before me, the defendant has provided the court with further written submissions and documents. I trust that these have also been served on the plaintiffs. In any event, he would wish to put them in as discovery, and some of the information in those documents also provide a basis for him in supplying the further and better particulars that I have ordered.

14. From this, I turn to the first two limbs of the summons which really do serve to highlight the difficulties that a non-expert pleader in a libel action is bound to face. The first paragraph seeks orders to strike out considerable tracts of the defence on the basis that these passages disclose no defence and/or are scandalous, frivolous, vexatious and so forth. Had I considered that the plaintiffs would be at a forensic disadvantage had I not made the order asked for, I would have acceded to Mr Chain's submission. There is no doubt that this pleading could have been prepared infinitely better.

15. I am satisfied that the court and the plaintiffs' counsel will be able to sift through and passed the irrelevant and only concentrate on what matters. To strike out these passages on technical grounds of the highest order will only serve to make the pleading even less compelling in terms of clarity. Whilst technically Mr Chain may be on strong ground, I do have a discretion in such matters, and I do not consider that striking out these passages would serve any useful purpose where I am satisfied that the plaintiff is not forensically prejudiced with them in.

16. The same applies to the second limb which seeks an unless order - requiring the defendant to amend his pleadings. In any event, much of the subject matter of the complaint on this is cured by the provision of the further and better particulars which I have ordered. I therefore refuse to order under paragraph 2 of the summons.

17. I will now hear the argument on costs and give such further directions as I can to progress the matter to trial or even, more felicitously, to settlement where the libel alleged is hardly the gravest and where the plaintiffs' complaints, I suspect, have been long forgotten. A trial would only serve to revive their publicity which, even if shown to be untrue, would probably provide very little comfort to the plaintiffs against the defendant who I suspect may be of limited means.

(Court discussion re costs)

18. The court: "I know I have got to be fair to both of you. I appreciate that. Yes, all right. Thank you. But I think, I am sorry, there is no avoiding this for you. You will have to pay a third of their costs, one-third, and the rest of the costs will be costs in the cause. So those will be dealt with at the end of the action and with certificate for counsel. I think the matter was of sufficient difficulty and technicality to warrant the instruction of counsel in this court.

(Further court discussion re costs)

19. They have succeeded to this limited extent, and I have had to reflect it, doing my best, in terms of costs and in terms of proportions. I do not pretend that I have got it right with a mathematical precision but it is a question of doing broad justice to yourself and to them.

20. Now, look, Mr Chan, I mean you ought to try and come to some sort of solution to this. I mean I do not want you to be exposing yourself to costs. I do not know whether these plaintiffs are very rich themselves but these things cost money, and a libel action is expensive. They have instructed a senior junior at the Bar who clearly knows what he is up to, and you are having to deal with that sort of team. So you ought to try and approach them and see what can be done.

21. That is all I can say. You have my sympathy, and I do not for one moment expect that you thought it would come to this when you wrote those letters. I appreciate that you wrote those letters in a way that perhaps you felt might have resolved all of this dispute but it has come to this. They have now sued you.

(Further court discussion re costs)

22. They will be taxed if it is not agreed. Of course."