The Chamber of Hong Kong Computer Industry Co Ltd v. Hong Kong Computer Association Ltd
Read the full judgment text of HCA 2124/2012 on BabelCite. This High Court CFI judgment was delivered on 9 November 2015.
1. This is an Action for libel.
Cited by 2 cases · Cites 4 cases
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HCA 2124/2012 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 2124 OF 2012 __________________
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________________ JUDGMENT ________________ 1.This is an Action for libel. I. INTRODUCTION AND PARTIES 2.The plaintiff (香港電腦商會有限公司) is a company limited by guarantee. It was founded by 10 operators in the computer and information technology industry. It functions as an association for the industry and its membership has grown to include manufacturers, wholesalers, retailers, ranging from global leaders in the field to small start‑up companies. At its peak, the plaintiff has about 500 members. 3.The objects in the plaintiff’s constitution include:
4.The plaintiff holds itself out as a “non‑profit‑making organization” for the industry. No profits are distributable to the members. 5.In 2002, the plaintiff and the Shamshuipo District Council (“SSP‑DC”) jointly organised an event called the Hong Kong Computer Festival. The idea was conceived as a response to the appeal by the Financial Secretary to promote and boost local economic activity. 6.The Computer Festival was held at a cordoned‑off street area in the Shamshuipo district where a variety of computer and digital products were displayed and sold at the stalls of the participating operators. There were also other activities for children in the form of a carnival at the event. Over the years, the Computer Festivals at Shamshuipo have been very well‑received by the public as well as visitors to Hong Kong and have quickly gained popularity. It has since been organized as an annual event in the district. 7.The plaintiff received funding from the SSP‑DC for some component parts of the Computer Festivals (for example, the “carnival”) and other specific projects (for example, the “Computer Building Parade” (千人砌機大匯演) in 2003). Accounts had to be submitted to the SSP‑DC. According to Mr Cheung Yiu Shing, the founding president of the plaintiff, any surplus from these events would be deployed to fund community work in the Shamshuipo district and the plaintiff would not itself derive any financial benefit from them. On the contrary, if the events were to result in a loss, the plaintiff’s directors would contribute to make up the deficit. 8.In July 2010, the SSP‑DC announced its decision no longer to be a co‑organiser of the Computer Festivals. The reason given was that the plaintiff has been very experienced in organising the event and should be able directly to apply to the Leisure and Cultural Services Department (“LCSD”) for venue to host the event. It will be seen, however, that the nature of the event and its actual operation was already mired in controversy. 9.With the withdrawal of the SSP‑DC, the plaintiff became the sole organiser for the Computer Festivals for 2011[1] and for 2012. They were held at the Cheung Sha Wan Playground. The plaintiff had to pay hire charges to the Government for the venue, which was to be calculated as a percentage of the receipts from sales of admission tickets for the event. There was also a limit to the number of complementary tickets distributable by the plaintiff. As will be seen in the later part of this Judgment, queries were raised as to whether the plaintiff has accurately accounted for the number of entrants. A complaint was made by the defendant to the Ombudsman against the LCSD about the latter’s handling of the event. 10.Apart from organizing the Computer Festivals in Shamshuipo, since 2004 the plaintiff has also organised a trade fair called the Hong Kong Computer and Communications Festival at the Hong Kong Convention and Exhibition Centre. The Communications Festivals are large‑scale sales events and have attracted the participation of many industry operators and visitors. They are very successful over the years and are still being held annually. 11.Mr Cheung has stressed the distinction between the nature of the Computer Festivals held in Shamshuipo and the Communications Festivals at the HK Convention and Exhibition Centre. According to him, the former was a non‑profit-making event, whereas the latter was the major source of revenue for the plaintiff. I will refer to the two events as “the Computer Festival”(電腦節) and “the Communications Festival” (通訊節) respectively. 12.Prompted by the success of these events, the plaintiff organised a similar event at the Megabox in Kowloon Bay in April 2009, and another one at Tsuen Wan Plaza in November the same year. These latter events were organised with commercial sponsorship including property developers which provided the venue. Apparently, these events were also very successful. Mr Cheung admitted telling reporters that the plaintiff was planning to hold five or six similar events every year. 13.It is, on the other hand, a well‑known fact that in the shopping malls in Shamshuipo there are many small‑ or medium‑sized retailers of computer and digital products. These shop proprietors had initially shown support for the Computer Festivals being held at their district. But over the years, they became increasingly concerned about the adverse impact that these Computer and Communications Festivals had brought on their own businesses. They viewed these events as mere sales events in disguise. 14.Over the years, as the Computer Festivals became popular, there was increasing demand for the booths. The computer‑mall traders also wanted allocation of the booths at the event. Some of them were dissatisfied with the method of allocation of the booths. 15.In about March 2009, a group of the operators from four computer malls in Shamshuipo and some others in Wanchai formed themselves into the Alliance of Computer Industry (電腦業界大聯盟) (“the Alliance”). Meetings were organised to lobby the plaintiff not to hold that many festivals and to reflect the views of the computer-mall traders. 16.Feeling that their views were being ignored by the plaintiff, they formed the defendant (香港電腦業協會有限公司) in 2009. The defendant has a membership of about 200 to 300 of the small‑ or medium‑sized traders. It aims to assist these operators in their struggle to promote or safeguard their interest. 17.With the support of the operators from the four computer malls in Shamshuipo, the defendant successfully organised its own computer fair in January 2010 called the Shamshuipo Computer Malls Computer Festival (深水埗腦場電腦節) (“the Computer‑Malls Festival”) to rival the plaintiff’s events. II. THE IMPUGNED LETTERS 18.This Action concerns the following three letters sent by the defendant to the Director of the LCSD :
19.The several Letters were copied to the Chief Executive of the HKSAR; a number of other government officials; the Director of Audit; Legislative Council members; Chairman of the Community Investment and Inclusion Fund; the Shamshuipo District Officer; SSP‑DC members and the media. 20.The plaintiff claims that a number of passages in the Letters were defamatory of it. The plaintiff also relies on malicious falsehood. For the purpose of this Judgment, I will consider the Chinese text of the impugned passages as that was the language in which the Letters and the magazine article were written. The English translation below, extracted from the pleadings, is added for reference only. For ease of reference, I will number the relevant passages and refer to them as Statement (1), Statement (2), and so on.
21.It should be noted that apart from the passages quoted above (which were relied upon by the plaintiff in its Closing Submissions[2]), originally two other statements in the 3rd paragraph and one in the 4th paragraph at page 1 of the 1st Letter were also pleaded in the Statement of Claim as carrying defamatory imputation. However, since no reference were made to them by the plaintiff in the Closing Submissions, I do not propose to deal with them specifically save to the extent that they form part of the context in which the meaning of the impugned passages in the Letters and the article may have to be considered. 22.There is no dispute that the defendant was the sender of the 3 Letters. 23.I will deal with the issues arising in relation to each of the Letters separately. III. THE 1ST LETTER 24.Regarding the 1st Letter and the Eastweek article, Mr Hon (counsel for the plaintiff) contends that the impugned passages carry the following defamatory imputations[3]:
III(A) Preliminary point — the Eastweek article 25.As a preliminary point, Mr Johnny So (counsel for the defendant) submits that even though the Eastweek article mentions “3招掠水” (or translated as “3 Tactics to Rip‑off”), in the context of the 1st Letter the only relevant “tactic” or incident is the complaint that the plaintiff had benefited from the Computer Festivals by receiving commission from subletting the booths. The other two “tactics” or incidents — namely, the alleged overseas trips of the plaintiff’s directors at public expense, and the contracting‑out of courses to one of the directors’ related company — do not in fact relate to the Computer Festivals. (For convenience, I will refer to them as “the Incidents” or “the three Incidents” as appropriate.) Mr So submits that the Court should not have regard to the other two Incidents. I propose to deal with this argument first. 26.The Eastweek article was referred to in Statement (2). In the context of Statement (2), it is correct to say that the article was used merely as a source of information to support a specific point made by the defendant, namely, that the plaintiff was the major beneficiary in organising the Computer Festivals. Statement (2) itself makes no allegation concerning improper contracting-out of the courses or the overseas trips of the directors. 27.The gist of the defendant’s complaint in Statement (2) is that, first, the plaintiff by organising the Computer Festivals derived the most benefit because on the one hand it had the use of Government venue for free, while on the other hand it had also received income from letting out the booths. Secondly, the Computer Festivals, while disguised as exhibitions, in fact operated as another large-scale computer mall. I think it is right to say that the complaint in Statement (2) focuses essentially on the Computer Festivals and it calls into question the Festivals’ true nature as well as the benefit that the plaintiff derives from being the organiser. To that extent, I think Mr So is right that Statement (2) in the 1st Letter does not make reference to the article beyond the Computer Festivals or the plaintiff as the Festivals’ organiser. 28.However, it does not follow that the court should therefore disregard the other parts of the Eastweek article. The entire article was enclosed with the 1st Letter. There was no redaction of any parts and in the circumstances, irrespective of whether such other parts of the article should be treated as have been incorporated in the 1st Letter, the defendant must be regarded as having published its entire content to the recipients. 29.Accordingly, Statements (6) and (7) concerning the two other Incidents will fall to be considered in the later part of this Judgment. III(B) The Defence 30.In the Defence, the defendant admits that the Eastweek article (but not the 1st Letter) bears the meanings set out in (a) to (e) above (see §24). As to the meaning in (f), the defendant disputes that either the 1st Letter or the Eastweek article has remarked that the plaintiff did not keep and/or manage its account properly. The defendant denies the meaning in (g)[4]. 31.The defendant further relies on the defences of justification, fair comment, and qualified privilege. 32.As will be discussed presently, I have considerable difficulty with the way the issues are formulated and defended with regard to the meanings to be derived from the impugned passages. Take as example the alleged meanings in (a) and (b). The difficulty arises because the impugned statements (i.e. Statements (1) to (7)) cover a number of incidents and factual situations. However, it has not been explained which aspect(s) of those passages is/are said to give rise to the objectionable imputation in (a) and (b) that the plaintiff was dishonest, deceiving the government and/or was dishonourable. That also makes the determination of the defences difficult, and it is not helped by the fact that some alleged imputations have been reformulated in the plaintiff’s Closing Submissions. In any event, a broad and all‑encompassing plea[5] that all the impugned statements together carry the alleged defamatory imputations is clearly unsatisfactory. 33.Subject to this preliminary observation, I will discuss the issues in turn, first dealing with imputations, together with the defences of justification and/or fair comment (as the case may be). Qualified privilege will be discussed in a separate section. III(C) The alleged imputations 34.In approaching the question on the meaning of the passages, I bear in mind the principles set out by the editors in Gatley on Libel and Slander, 12th edition, §§3.17‑3.18 and 3.30‑3.32. 35.In the following sections, I will first deal with the meanings in (g) and (f) as they are disputed by the defendant. I will then deal with (c) and (d) as I have doubts whether the concessions are rightly made. I will lastly deal with the reformulated imputation in (e), and then with (a) and (b). III(C)(1): (i) Meaning in (g) — Falsely pretending to be “non‑profit‑making organization”? 36.I will first deal with the disputed meaning in (g), that is, whether the impugned Statements and passages convey the meaning that the plaintiff has falsely pretended to be a non‑profit‑making organization. I note, first, that the meaning in (g) is no longer pursued as a separate defamatory imputation[6]. In any event, for the following reasons, I do not think the meaning in (g) is borne out by the relevant impugned statements. 37.The reference to “non‑profit‑making organization” appears in Statement (1). However, Statement (1) “由民政局至康文署等各政府部門，往往被那些所謂「非牟利組織」所誤導”, does not itself concern the plaintiff. In fact, Statements (1) and (2) together appear in the following passage in the 1st Letter, which merits quoting in full:
38.In my view, the term “非牟利組織” (translated as “non‑profit‑making organisation”) is itself confusing. It conveys the impression that the organisation should not be engaged in activities primarily aimed at profit‑making. But even on the plaintiff’s own evidence, at least some of the events organised by the plaintiff are indeed profit‑making, and in fact intended to be so. 39.But in any event, I think the essence of the passage is not about whether the plaintiff is or is not a “non‑profit‑making organization”. Rather, it focuses on the following matters: — first, that the Computer Festivals are income-producing events as evidenced by the plaintiff’s budget for Computer Festival 2009 showing an estimated income of close to $3 million (attachment 1); secondly, the plaintiff as organizer derives the most benefit, because on the one hand it receives rental from letting out the booths but on the other hand has had the use of government venue for free; thirdly, that in examining the plaintiff’s application to organize the coming Computer Festival 2010, the Director should be vigilant because the Computer Festivals are in substance mere sales venue just like another large computer‑mall. The Director was reminded not take such description as “非牟利組織” — “non‑profit‑making organisations” — at face value. Taken together, I do not consider the passage to be imputing that the plaintiff was putting up a pretence, or falsely pretending, that it was a “non‑profit‑making organisation”. I think Mr Hon is right in not pursuing this meaning as a separate defamatory imputation. 40.Be that as it may, I will consider in more detail the impugned Statements (1), (2) and (5) (which are most relevant to this meaning) in case I am wrong. 41.The passage in which Statements (1) and (2) appear (see §§37 and 39 above) contains both assertions of fact and matters of comment. It contains the following factual assertions, namely: — first, that the Computer Festivals were in substance large‑scale sales and retailing events; secondly, that the plaintiff would be able to derive an income of nearly $3 million from renting out the booths; thirdly, the plaintiff has had the free use of public venue for the event. On the other hand, it contains the following comments, namely: first, the Computer Festivals are disguised as exhibitions when in truth they are mere large-scale sales events. The use of the words “偽包裝” — “disguise” — turns the statement into a comment. Secondly, that the plaintiff benefits the most from being the organiser of the event, which is also a comment. 42.I think the sting in Statements (1) and (2) lie in the comments rather than the factual assertions. I am prepared to proceed on the basis that the comments are prima facie defamatory of the plaintiff. 43.As for Statement (5), it contains a factual assertion that the plaintiff had a surplus in its account for more than $10 million. It also repeats the assertion that the plaintiff has had the use of a public venue for free. Statement (5) is merely an assertion of fact but not a comment. I am unable to see how Statement (5) can be said to be defamatory of the plaintiff. 44.I will proceed nevertheless to examine the truth or otherwise of these factual assertions, and the defence of fair comment below. (ii) Factual background — Large‑scale sales event; income of $3 million; free use of public venue 45.The following are my findings of the relevant background pertaining to Statements (2) and (5). 46.In the initial years of the Computer Festivals in 2002 and 2003, there were more than 100 participating booths at the event. Over 90 of them were traders of various digital and computer products, with about 10‑odd booths occupied by non‑government organisations. According to Mr Cheung, since 2004 most if not all had become trading booths. 47.The participants at the Computer Festivals did not just display their products at the booths, the products were actually sold to visitors who are simply members of the public (although they would have to buy admission tickets to gain entry to the event). At the Computer Festivals, there were products being sold at discounts and other promotional gimmicks such as goods offered at $1. As the number of visitors grew over the years, the sales revenue generated from the event also rose from about $150 million in 2003 to about $245 million in 2009. These figures are quoted in the 1st Letter, and Mr Cheung accepted that the quoted figures are more or less correct. 48.As a matter of fact, the plaintiff was rather proud of the turnover figures. When the plaintiff became aware in 2010 that SSP‑DC would cease to co‑host the event, it issued a notice in the press expressing regret for the SSP‑DC’s decision. In the notice, the plaintiff stated:
49.There is little doubt that the plaintiff was much impressed by the success of the Computer Festivals in terms of its ability to bring in business for the participants. At the same time, the event was clearly well received by the participants as was evidenced by the rising number of booths at the venue. Indeed, Mr Leung Ding Kau, a former chairman and current director of the plaintiff, did not dissent in cross‑examination from the suggestion that for some of the participants, the volume of business transacted at the Computer Festivals could be as much as two to three months’ worth of their usual sales. 50.Even though there were other attractions at the Computer Festival, such as lucky draws and appearance of celebrities, the promotion and selling of products to visitors on the spot was clearly an essential feature and attraction of the event. I have little doubt that whatever was the original idea of the Computer Festivals, over the years and certainly by 2009 and 2010, the Festival has clearly assumed the nature and characteristics of a sales and retailing event for computer and digital products. 51.Secondly, there is no dispute that the participating traders had to pay hiring charges to the plaintiff for the booths. The income from the hiring charges in fact made up an appreciable proportion of the plaintiff’s income from the Computer Festivals (see for example, the accounts for the Computer Festivals 2008 and 2009)[7]. There is also no dispute that the budget of the Computer Festival 2009 attached to the 1st Letter shows an estimated income of $2.78 million, which might broadly be said to be close to $3 million. 52.Thirdly, since 2004 the plaintiff has been hosting the Communications Festivals. There is no dispute that this event is run with a view to making profits and is actually the main source of revenue for the plaintiff. Events at the Megabox and Tsuen Wan were also organised on similar basis. According to the plaintiff’s audited accounts, it has accumulated cash and cash equivalents of nearly $11.5 million as of June 2008 and $15.5 million as of June 2009, which is by no means an insubstantial amount. Mr Leung accepts that such sums were mainly profits from the Communications Festivals. There can therefore be no question but that the plaintiff did engage, and still does, in activities which are aimed at, and did, bring in appreciable profits. Indeed, as it is stated in the plaintiff’s press statement[8], organisations like itself would have to undertake normal commercial activities to finance wages for their staff, rental for the office, and so on. 53.Fourthly, before the Computer Festivals 2011 and 2012, there is no suggestion that the plaintiff has to pay anything to the government for the venue of hosting the Computer Festivals. 54.On these factual findings, I am satisfied that the factual matters stated in the passage in which Statements (1) and (2) appear (see §§37 and 39 above), as well as those stated in Statement (5) are substantially true. (iii) Fair comment — Nature of event under disguise; plaintiff benefits the most as organiser 55.The legal principles on fair comment, as authoritatively laid down in Cheng and Another v Tse Wai Chun (2000) 3 HKCFAR 339, are not in dispute. It is accepted by the defendant that (1) the comment must be on a matter of public interest; (2) that the comment must be recognizable as comment as distinct from an imputation of fact; (3) that it must be based on facts which are true or protected by privilege; and (4) that the comment must be one which could have been made by an honest person, however prejudiced he might be and however exaggerated or obstinate his views. The defence of fair comment may be defeated if the plaintiff is able to prove that the defendant’s views are actuated by malice. Actuation of spite, animosity, intent to injure, intent to arouse controversy or other motivation, whatever it may be, even if it is the dominant or sole motive, does not of itself defeat the defence. However, proof of such motivation might be evidence, sometimes, compelling evidence, from which lack of genuine belief in the view expressed might be inferred. Whether the views expressed are genuinely held by the defendant requires a consideration of his subjective state of mind. 56.In Cheng v Tse (supra) the Chief Justice emphasised at p 345 (with whom all other judges agreed) that:
57.With these principles in mind, I will consider the defence of fair comment. 58.As already discussed, I regard Statement (2) as containing two comments, namely: first, the Computer Festivals are disguised as exhibitions when in truth they are mere large-scale sales events, secondly, that the plaintiff benefits the most from being the organiser of the event (see §41 above). Insofar as these comments are premised on factual matters, I have already expressed my view that the factual bases are substantially true. 59.I have little doubt that the two comments are made on matters of public interest. As the title of the 1st Letter suggests, it is a letter to oppose the plaintiff’s application to organise the Computer Festival 2010. Until 2010, the Computer Festivals were jointly organised with the SSP‑DC (and also with the co-ordination of other government departments). The plaintiff is an association representing the computer and information technology industry and has a substantial membership in the hundreds. The event, involving the deployment of public resources, has grown to be a very popular public event. In these circumstances, questions concerning the true nature of the event, and whether the plaintiff as organiser turns out to be the major beneficiary from the event must be proper matters of public interest. Indeed, with an appreciable income from the Computer Festivals, it would not be unreasonable for the defendant to call on the government to exercise caution in examining the plaintiff’s application. 60.On the facts that I have found, including the facts more conveniently to be discussed in relation to the three Incidents below, I have little doubt that the comments are ones that could have been made by an honest observer. 61.Although the plaintiff has pleaded malice in its Reply[9], such allegation completely lacks specificity. It is worth bearing in mind the following comment in Gatley (ibid), at §28.6, that
In the footnote to the above passage, the editors also referred to the case Loveless v Earl [1999] EMLR 530 at 538 that “malice is a subjective test, entirely dependent on the defendant’s state of mind.” 62.It suffices to say that quite apart from the deficiency in the pleading, the plaintiff’s case on malice was not improved upon whether in evidence or in Mr Hon’s final submissions[10]. Mr Hon accepts that the burden of proving malice rests on the plaintiff. Yet, apart from inviting the Court to find that the defendant did not honestly believe in the truth of the defamatory imputations (which are unspecified), the plaintiff does not in fact identify how the evidence supports such allegation. The plea of malice is ill‑formulated and has not been clearly proved. This will suffice for the plea to be rejected, which I do. But in any event, for the reasons which I will explain in relation to the defence of qualified privilege, it is my view that the evidence falls short of establishing malice. 63.In respect of Statement (2), I am satisfied that the defence of fair comment is made out. Hence, even if I am wrong as a matter of interpretation to have rejected the meaning in (g) concerning the plaintiff having “falsely pretended to be a “non-profit-making organization”, yet on the basis of my finding that the underlying Statement (2) is a fair comment based on facts which are substantially true and that Statement (5) is also factually justified, the alleged imputation in (g) must still be rejected because its foundation has completely fallen away. III(C)(2): Meaning in (f) — Plaintiff’s accounts messy / confusing? 64.Turning then to the disputed meaning in (f). Insofar as it is alleged that the impugned Statements carry the imputation that the plaintiff’s accounts were “messy” or “confusing”, the most relevant seems to be Statement (3). 65.While it is true that the title of the Eastweek article literally reads “胡塗帳” — “confusing account”, I do not think the meaning conveyed by that expression should be considered in isolation from the rest of the title and also the content of the article: see Gatley (ibid), §3.31. The full title reads “電腦商會3招掠水 — 胡塗帳大公開”. The essence is on the alleged “3 Tactics to Rip‑off”. The content of the article is clearly about the “3 tactics” rather than how the accounts were kept. 66.In any event, the title conveys not the meaning that the account was “messy” or “confusing” in the sense of poor bookkeeping. I think the title in Statement (3) refers to the “three Incidents” mentioned in the article (which I will deal with later). The plaintiff’s formulation of the meaning in (f) is far too literal a reading of the title and has in fact missed the essence of the article. It should therefore be rejected. III(C)(3): Meaning in (c) – Plaintiff in disregard of its members’ interest etc. 67.I wish to consider the alleged meaning in (c) even though the defendant has apparently accepted that this meaning is borne out by the Eastweek article. The alleged meaning consists of two parts: “the plaintiff was in disregard of its members’ interest”, and “the plaintiff organised the Computer Festival to benefit its committee members”. 68.As to the first part, I have difficulty seeing the basis for alleging that any of the Statements (1) to (7) carries the imputation that the plaintiff “was in disregard of its members’ interests”. I do not understand the three Incidents mentioned in the Eastweek article or the 1st Letter as suggesting anything close to that imputation, and none has been identified in submissions[11]. 69.As to the second part of the meaning in (c), while I think it is possible to read the Eastweek article as suggesting that the committee members of the plaintiff have benefited from the three Incidents, I do not see anything in Statements (1) to (7) as supporting the meaning that “the plaintiff has organised the Computer Festival to benefit its committee members” — in other words, an imputation regarding the purpose of the plaintiff organising the event. In the circumstances, while I will deal with the three Incidents in the article later, in my view the alleged meaning in (c) should be rejected. III(C)(4): Meaning in (d) — Plaintiff exercised favouritism 70.As far as the meaning in (d) is concerned, it has not been identified which aspect of the Incidents supports the alleged imputation that “the plaintiff has exercised favouritism”. However it is noted in the plaintiff’s Closing Submissions that the imputation of “exercising favouritism” is rolled up with the meanings in (c) and (e) and has elided into a single heading that “plaintiff exercised favouritism to benefit its committee members in disregard of the members’ benefits”. Reference was made to the three Incidents as instances of favouritism benefitting the plaintiff’s own committee members[12]. 71.Statements (4), (6) and (7) relating to the three Incidents are, therefore, relevant for considering if they support the imputation that the plaintiff “exercised favouritism …. etc”. 72.Statement (4) concerns the allocation of the booths at the Computer Festivals and the alleged renting out of the booths by the directors in return for commission. Statement (6) concerns the overseas trips taken by the directors, and the allegation that they were disguised as business trips when in truth they were merely for fun and enjoyment. Statement (7) concerns the plaintiff’s project “The ‘In’ generation — special IT community employment project” (電腦潮代專才社區就業計劃) (“the Project”), and the allegation that public funds had been channeled to a director’s private company through the provision of training courses. 73.While it appears that the common theme running through Statements (4), (6) and (7) is that the plaintiff has enabled some directors and/or committee members to derive benefits through the various Incidents, it is difficult to see the basis for ascribing to them the meaning that “the plaintiff has exercised favouritism”. 74.To begin with, “exercising favouritism” is not the same as someone being treated more favourably than others. Therefore, even Statement (4) and the method of allocating the booths might suggest that some directors or committee members would receive extra points and hence more easily able to secure a booth, that does not mean that the plaintiff has “exercised favouritism”. 75.Statements (6) and (7) do not even begin to support the alleged meaning of “exercising favouritism” at all. 76.The common theme of these statements, as I mentioned earlier, is that the plaintiff has enabled some directors and/or committee members to derive benefits through the Incidents. The essence is on the connectionbetween the three Incidents and the benefit that the directors or committee members were able to derive. The reference to the overseas trips in Statement (6) further carries with it an additional imputation regarding the true nature of the trips — that is, that the trips were disguised as business meetings when in truth they were merely for fun and enjoyment. In short, I think the alleged imputation that the plaintiff has “exercised favouritism” is misplaced, whether as in the original meaning in (d) or as part of the reformulated rolled-up meaning (see §70 above). III(C)(5): (i) Meaning in (e) becomes the reformulated meaning — Benefitting directors / committee members through three Incidents 77.First, it is noted that part of the original meaning in (e) about “the plaintiff improperly applied for and utilized public funds” (see §24 above) is no longer maintained[13]. 78.As discussed earlier, leaving aside “exercising favouritism”, the alleged meaning as reformulated is that the plaintiff, through the various Incidents, has enabled some directors and/or committee members to derive benefits. In addition, in relation to the overseas trips, there is an imputation concerning the true nature of the trips. I will proceed on the basis that such imputations are prima facie defamatory of the plaintiff and I will turn to consider the background facts pertaining to each of the Incidents separately. Incident (I) — Allocation of booths, directors receiving commission for renting out booths 79.I will first deal with Statement (4) concerning the allocation of the booths at the Computer Festivals and the alleged renting out of the booths by the directors in return for commission. 80.As already noted, as the Computer Festivals became increasingly popular over the years, demand for the booths at the Computer Festivals greatly exceeded the available supply. The plaintiff adopted a points system for allocation. Points would be awarded to participants of previous years, members of the plaintiff as well as those who had been in the preparatory committee of the event. Those qualifying for extra points would be more likely to secure a booth. 81.Participating traders had to pay hiring charges for the booths at the event. The hiring fees payable by the plaintiff’s members were lower than by non‑members. 82.It is accepted by the plaintiff that the participating traders were not necessarily manufacturers of the products sold at their booths. Consignment arrangement was not uncommon. In the case of Mr Cheung, his company, Gennett International Limited (通絡國際有限公司) had successfully applied for a booth in the Computer Festival 2009 (the subject of the Eastweek article). Mr Cheung accepted that the consignors who placed products for sale at Gennett’s booth did pay Gennett a fee. Those at the booth were selling products under the name of “ASK” and “Kare‑Inno”. The name “ASK” was prominently displayed at the booth, as is evident from the photograph in the Eastweek article. 83.On the other hand, in the case of Mr Leung, there is no dispute that his company, Able Computer Ltd, also successfully applied for a booth. Mr Leung accepted that Able had an arrangement with Videocom Technology Ltd to sell Videocom’s products (brand name 腦博仕) at Able’s booth. Mr Leung said, however, that he could not recall whether Able had received “commission” from Videocom because such matter was handled by his staff. Yet, he accepted in cross‑examination that he was aware of the allegation in the Eastweek article about him receiving commission in return for “lending his booth” to Videocom. I consider it implausible that he would not have taken steps to enquire into such personal attacks on him. His claim of lack of knowledge about the commission seems to me only an attempt to avoid giving a truthful answer. On balance, I find it more probable that the arrangement between Able and Videocom did involve a reward for the use of Able’s booth. 84.It is not important whether technically the arrangement between Mr Cheung’s Gennett or Mr Leung’s Able vis‑à‑vis the others constitutes “renting out or subletting”, or whether the reward received by Gennett or Able is strictly a “commission”. What is important is the fact, and I so find, that they did allow others to have the use of their booths for reward. 85.In this connection, I have not overlooked the assurance given in 2008 by the then vice-chairman of the plaintiff, Mr Chan Wai Hong (“Mr Chan WH”[14]) to the SSP‑DC that measures would be put in place to ensure that the booths were not transferrable[15]. Despite the assurance there is no evidence that the suggested measures were effectively enforced. To the contrary, I accept the evidence of the defence witness, Mr Chan Sing Kwong, that what actually happened on the ground was in fact quite different from the assurance about tackling the problem of transferring the use of the booths. 86.In light of my findings above I consider the factual basis of the assertions — that the allocation of the booths favoured the directors and that the directors had rented out the booths to others in return for commission — has been substantially proved. The assertions are substantially true and justified. 87.Statement (4) further contains the phrase that “電腦節攤位涉嫌明益自己友”. Literally, this statement is ambiguous because it is difficult to understand how the booths themselves could favour the plaintiff’s buddies. But insofar as it purports to convey the meaning that the method of allocating the booths favoured the plaintiff’s directors or the preparatory committee, then there is really no dispute that on account of the extra points awarded to them, the directors and committee members were more likely to secure allocation of a booth and hence they were favoured because of the method of allocation. In that sense, I am satisfied that the factual basis in that statement is substantially true and justified. Incident (II) — Overseas trips 88.Turning to Statement (6) “會董每年又豪花五十多萬到日本等地旅遊，名義上是考察開會，卻懷疑只是吃喝玩樂”, which is taken from the headline of the Eastweek article. As a matter of approach, it is pertinent to be reminded of the statement in Gatley (ibid), at §§3.31‑3.32, that the article should be taken as a whole and the headline must be considered in context, and that it will be necessary to consider whether any defamatory words in the headline may be neutralised by the text. 89.The content in the article provides the fuller context for Statement (6):
90.Considering Statement (6) together with the quoted passage, it becomes clear that the statement is in substance a comment concerning the nature of the trips — that the purpose of the “brain‑storming” trips to Taiwan and Japan were disguised as meetings, they were in truth merely for fun and enjoyment. 91.As to the background, according to Mr Cheung, since about 2005 or 2006 the plaintiff has been organising these trips annually and sometimes more than once a year. They include trips to Japan, Thailand, Hainan Island, and Taiwan. Each of them was about 4 to 5 days during which there would be meetings after dinner on 2 to 3 nights, totalling about 10 hours during a trip. The rest of the time would be for leisure and pleasure. It is noteworthy that Mr Cheung described these trips as “incentive trips” for the plaintiff’s directors (and for the staff) because, according to him, all directors serve the plaintiff on voluntary basis. 92.According to the other witness, Mr Leung, there were no minutes or record of the discussions or any decision made at “the meetings”. 93.On the evidence, I find it more probable than not that the meetings were not the main purpose for these trips. If the meetings were the primary purpose, it would be surprising that no minutes were kept of the matters discussed or of any decisions made. The absence of record suggests that the meetings were likely to be rather informal. Moreover, even on Mr Cheung’s evidence, such meetings were held after dinner. By implication, the day time would be mainly for leisure and pleasure. I find it likely, in the circumstances, that the dominant purpose of the overseas trips were indeed for fun and enjoyment. While it is commendable that the directors have served the plaintiff on voluntary basis, yet in my view these trips were effectively an indirect form of showing appreciation or rewarding the directors for their effort. 94.The plaintiff’s account for 2009 shows that the plaintiff had incurred expenses for “entertainment” in the sum of $439,351 and “overseas travelling” of $170,941. Although the evidence does not connect the entertainment expenses with overseas travelling, the statement in the quoted passage (in §89 above) that the total of the two items amounted to over $550,000 in 2009 is factually correct. 95.On the facts that I have found, I am satisfied that the factual basis of the comment in Statement (6) (see §90 above) has been substantially proved. I am also satisfied that the view that the overseas trips were merely for fun and enjoyment but disguised as business trips is one that a reasonable person can honestly hold[16]. I have already rejected the plaintiff’s plea of malice (see my comments in §§61 and 62 above). The fair comment defence is made out in connection with Statement (6). Incident (III) — The “In” generation project 96.Statement (7) concerns the Project. The first part of the Statement “有會董更得到商會默許，自設私人公司承辦公帑資助的培訓課程” contains the following assertions of fact: — namely, first, board member(s) had set up private company to organize the training courses with the implicit permission of the plaintiff; secondly, that the courses involved funding from public resources. The second part of the Statement referring to “私相授受及利益輸送之嫌” is a matter of comment following from the relevant factual assertions of the first part. 97.Turning first to the factual background of the Project. The aim of the Project was to provide vocational training of computer skills to young people to enhance their employment prospect in the IT industry, and also to provide guidance through a mentorship programme to the long-term unemployed. The Project received financial support from the Community Investment and Inclusion Fund (“the CIIF”) (社區投資共享基金). 98.It would be noted that the CIIF was set up by the Government to provide funding support for community‑initiated projects. The CIIF’s own funding comes from public revenue. 99.It transpires that at an early stage when the Project was conceived in 2008, it was already intended to be a joint‑project involving the Hong Kong Federation of Trade Unions (工聯會) (“FTU”), the Members Institute (商會會員培訓中心) and the plaintiff itself[17]. However, when the plaintiff submitted the project‑proposal to the CIIF for funding, only FTU and the plaintiff were identified as co‑organisers and there was no mention of the involvement of the Members Institute. 100.Eventually, the CIIF approved a grant of $500,000 for the Project. An additional $500,000 was obtained from the Labour and Welfare Bureau (“LWB”) for the proposed training courses for two years. 101.The exact identity of the Members Institute (商會會員培訓中心) is obscure. The search record shows that the “Members Institute (商會會員培訓中心)” had already ceased business in 2004. However, one other “Members Institute” with the Chinese name “香港電腦商會商會會員培訓中心” was in existence. Mr Chan WH (the plaintiff’s vice‑chairman) is identified as owner of both businesses. On the other hand, Mr Chan WH is also the majority shareholder of the company with the name “Members Institute Limited”, which shares the same business address as the “Members Institute (香港電腦商會商會會員培訓中心)”. The obscurity is perhaps not of great moment for the present purpose. It suffices to note that the owner behind the several names is Chan WH, the person who chaired the committee in the plaintiff charged with steering and implementation of the Project. 102.In cross-examination Mr Cheung accepted that after the LWB had agreed to provide funding, the provision of training courses was contracted out to FTU and Mr Chan WH’s Members Institute. LWB’s funding was in the form of reimbursement. It appears clear on Mr Cheung’s evidence that the CIIF and LWB’s funding had indeed been deployed for the purpose of at least some if not all of the courses provided by the Members Institute (and FTU). 103.Mr Leung (the plaintiff’s chairman at the time), on the other hand, said that the plaintiff did not make any enquiry about Mr Chan WH’s arrangement in the provision of the training courses, and was not sure whether the courses were paid for. When asked why the Members Institute was omitted from the project application, Mr Leung simply said that it was unnecessary to disclose the involvement of a private company of a member. I find Mr Leung’s answers unsatisfactory. I think the truth of the matter is that the plaintiff did know and had intended for the courses to be contracted out to Mr Chan WH’s company. The plaintiff was aware that the funding from CIIF and LWB would at least partly be deployed to defray the expenses payable to Mr Chan WH’s company for the provision of the courses. 104.On the evidence, I am satisfied that the factual assertions in Statement (7) “有會董更得到商會默許，自設私人公司承辦公帑資助的培訓課程” are substantially true and justified. 105.Turning to the comment in the sentence “私相授受及利益輸送之嫌”. This comment follows from the assertions that board member(s) have set up private company to provide the training courses which involved use of public funds. The content of the article on the subject gives further elaboration:
106.In light of my discussion of the factual background above, there is in my view sufficient factual basis to support the comment “私相授受及利益輸送之嫌”. Views expressed on channeling public resources to a private company of a director is clearly a comment on a matter of public interest. I am also satisfied that the view so expressed is one that could genuinely be held by an honest person. I have rejected the plaintiff’s plea of malice earlier (see §§61 and 62 above). The fair comment defence is made out. (ii) Summary on the reformulated imputation — Benefitting directors / committee members through three Incidents 107.Having considered in some detail the three Incidents and the relevant Statements pertaining to them, I am satisfied that the more general imputation as reformulated — namely, that the plaintiff has enabled some directors and/or committee members to derive benefits through the Incidents — is substantially justified factually. Further, insofar as this reformulated imputation may be considered as a comment, I am also satisfied that the requirement of fair comment is met. III(C)(6): Meanings in (a) and (b) — Plaintiff was dishonest and/or deceiving towards the Government 108.In the Closing Submissions, it appears that the alleged imputation in (b) is not pursued independently from (a)[18]. I have already made a preliminary remark that the plaintiff has not identified which of the Statement(s) (1) to (7) has/have allegedly given rise to the meaning in (a) that the plaintiff was dishonest or deceiving towards the government. But even if it is contended that the meaning arises inferentially from these seven Statements, it is still necessary for the plaintiff to explain which aspect(s) of the Statements are being relied upon to support the inference contended for. 109.It is apparent that only Statements (2) and (5) contain reference to any dealings involving the government and the plaintiff. 110.On the basis of my earlier discussion relating to Statements (2) and (5), even if one accepts that the comments — about the plaintiff benefiting the most as organiser of the Computer Festivals; or about the Computer Festivals being some large‑scale sales events in disguise; or the query about the plaintiff’s large surplus but was granted the free use of government venue — do raise questions about the plaintiff’s credibility in general, I am still unable to agree that such comments give rise inferentially to the more serious imputation that “the plaintiff was dishonest or deceiving towards the Government”. My primary view is that the defamatory imputation alleged in (a) is not made out. 111.The defendant, however, does not take issue with the meaning. Instead, it seeks to make good the comment by questioning the propriety of the plaintiff’s accounts in relation to the Computer Festivals 2008 and 2009. The 2008 account shows a deficit of $137,237.11 and the 2009 account a deficit of $2,617.82. These accounts were submitted to the SSP‑DC as part of the plaintiff’s duty as a co-organiser of the event. It is the defendant’s case that the plaintiff has overstated the expenses in order to avoid having to deploy the surplus for community works. This, according to the defendant, amounts to “dishonest tactics” by the plaintiff in its dealings with the SSP‑DC[19]. 112.There is no dispute that when the plaintiff made up the accounts, it has included the expenses representing the plaintiff’s office rental for four months; plus approximately half of the salaries of the plaintiff’s full‑time staff for four months (entered as “大會活動統籌人力資源費用” in the accounts); plus also the plaintiff’s other administrative expenses for similar period. These few items alone totalled nearly $500,000 for 2008, and over $600,000 for 2009. Furthermore, on top of the salaries for full‑time staff, the plaintiff has already included a separate entry relating to expenses for temporary staff. 113.Apart from the above items, the defendant also challenges other items of expenses during cross-examination of the plaintiff’s witnesses. I accept that those are not insubstantial expenses and there is scope for argument whether it is proper for the plaintiff simply to inject four months’ of its own expenses (in the case of full‑time staff, half of four months’ salaries) as expenditure for the Computer Festivals. I also accept that a reasonable person may genuinely question the treatment of the expenditure in the accounts. Yet, I think the query relating to the accounts here is entirely misplaced. Although a copy of the plaintiff’s draft budget for the 2009 event was attached to the 1st Letter, in fact neither the 1st Letter nor the Eastweek article was about the overstating of expenses at all. To the contrary, the complaint in the 1st Letter was that the defendant did not have access to the accounts of the Computer Festivals as its request for inspection was not entertained. Bearing in mind the observation of Yuen J (as she then was) in Oriental Daily Publisher Ltd v Ming Pao Holdings Ltd [1999] 4HKC 354 at 370B, that “the defence of fair comment [requires] the writer to lay out a sufficient substratum of true fact within the four corners of the article”, I am of the view that the question raised with the accounts would not have afforded the defendant a fair comment defence if I were to hold that the meaning in (a) had been open to the plaintiff (which I do not). 114.That brings me back to the question of the alleged defamatory imputation in (a). The alleged imputation must be based on the impugned Statements in the 1st Letter and the Eastweek article. I have already considered each of the Statements and the defence of justification and fair comment at length, I do not believe this rather more general meaning in (a) — which is not tied to any particular Statement(s) — adds anything to the plaintiff’s case. III(D) Summary relating to the 1st Letter and Eastweek article 115.In light of my views above, the plaintiff’s claim in relation to the 1st Letter and the Eastweek article fails. IV. THE 2nd LETTER 116.In respect of the 2nd Letter, the impugned Statements are Statements (8), (9) and (10) (see §20 above). 117.The plaintiff contends that these impugned Statements carry the following defamatory imputations[20]:
IV(A) The Defence 118.In the Defence[21] the defendant admits that the impugned Statements bear the meanings alleged in (a) to (e), but denies the meanings in (g) and (h). At the hearing, the defendant also takes issue with the alleged meaning in (f). 119.The defendant further relies on the defences of justification, fair comment, and qualified privilege. IV(B) The alleged imputations 120.In the plaintiff’s Closing Submissions, some of the alleged imputations have merged and were reformulated. 121.As in the case of the 1st Letter, the meaning in (b) is no longer pursued as an independent imputation arising from the impugned Statements[22]. 122.Meanings in (c) and (d) have been reformulated to become “the setting up of CESCL was for improper purposes, such as to hide the profits”. This reformulated meaning has become the focus of the alleged defamatory imputation arising from the 2nd Letter. The meaning in (e) is no longer pursued as an independent head and is probably subsumed under the reformulated meanings in (c) and (d). 123.The meanings in (f) and (g) are disputed and will be dealt with later. 124.I am baffled by the alleged meaning in (h). Even though the paragraph in which Statement (10) appears makes reference to the Computer Festivals, the essence of that paragraph, as Statement (10) itself suggests, is that a “non‑profit‑making organization” would use a private company as a vehicle to avoid being accused of reaping huge profits from events such as the Computer Festivals. That, in my view, is very different from the alleged meaning that “the plaintiff had organized the Computer Festival to benefit and/or profit its committee members”. I would reject the meaning in (h). IV(C)(1): Reformulated meaning in (c) and (d) — Setting up of CESCL was for improper purposes, such as to hide the profits 125.It is readily apparent that Statements (8), (9) and (10) all concern the formation and operation of CESCL. In my view, the reformulated meaning — namely, that the setting up of CESCL was for improper purposes, such as to hide the profits — is a comment. 126.CESCL was established on 11 January 2010. Its sole shareholder was the plaintiff and has the same directors as the plaintiff. 127.According to Mr Cheung, the idea of setting up CESCL was modelled on other chambers of commerce in forming their “service companies”. Part of the purpose was also to insulate the Plaintiff from potential liability that might arise from organising exhibitions. He said the intention was to use CESCL for exhibitions including the Computer Festivals and that its account would be kept separate from the plaintiff’s. He denied that the purpose was to conceal the accounts from the District Council. Rather, it was a risk management measure and for convenience of organizing exhibitions. 128.CESCL was established almost the same time as the publication of the Eastweek article. There is a passing comment in the article about the huge surplus of the plaintiff. I accept that at the time there was concern about the true nature of the Computer Festivals and the plaintiff’s treatment of its financial accounts. 129.After SSP‑DC decided to cease to be a co‑organiser of the Computer Festivals in July 2010, it was no longer necessary for the accounts of CESCL or indeed accounts for Computer Festivals 2011 and 2012 to be produced to the District Council. There is also no dispute that the accounts of CESCL, being a private company, are not generally open to public scrutiny. 130.CESCL took over from the plaintiff as the organiser of the Computer Festivals 2011 and 2012. 131.Mr Yu Wah Keung, the chairman of the plaintiff in 2012, accepted that there were queries about the plaintiff’s accounts for the Computer Festival 2009 (certified in September 2010) and there were challenges about the expenditure (although Mr Yu said there was no basis for some of the alleged impropriety). As of the time of the 2nd Letter, the propriety of the plaintiff’s account was clearly called into question. And in light of the fact that the plaintiff’s own account shows that as at 30 June 2009 it has accumulated cash or cash equivalent of over $15.5 million, in my view the concern as had been expressed about the propriety of the formation of CESCL was not groundless. 132.Mr Hon argues that the establishment of CESCL could not possibly have achieved the purpose of concealing details of the accounts for the Computer Festivals because it would be inconceivable that if SSP‑DC had remained a co‑organiser it would have allowed the plaintiff to delegate and effectively subcontract all its duties to CESCL for a lump sum payment without requiring a detailed breakdown of the expenses. That may or may not be so. But the question for determination is not whether the plaintiff could have achieved the improper purpose as alleged. What I need to consider is whether evidentially there was a genuine concern about the purpose of the establishment of CESCL, and if so, whether in the circumstances pertaining to the 2nd Letter, the comment is one that a reasonable person could have honestly made. 133.From the discussion above, I find that the factual basis of that comment is substantially made out. I am satisfied that the circumstances prevailing at about the time of the 2nd Letter were such that a reasonable person could have genuinely held the view that CESCL was set up for the improper purpose of hiding or shielding its profits from scrutiny. 134.Although the plaintiff also pleads malice in relation to the 2nd Letter[23], for the same reasons set out in §§61 and 62 above, I would reject the plea of malice. I am satisfied that the defence of fair comment is made out. IV(C)(2): Meaning in (f) — Plaintiff colluded with government officials 135.This meaning is derived from the term “官商勾結”. The term is now very widely used and has become one of common parlance. Although it still has a negative connotation, I think it is fair to say that it has lost some of its sinister insinuation of corruption. When used as a composite expression “官商勾結、利益輸送” (as in the present case) I think it suggests improper passing of favours or benefits from the government. 136.It is important to note that the 2nd Letter was addressed to the Director of the LCSD and its title is “強烈譴責康樂文化事務署明目張膽製造官商勾結鬧劇”. Essentially, the criticism of any impropriety of “官商勾結” or passing of favours or benefits is directed against the government and the officials. This is again borne out by the last sentence of Statement (8). The subject of the accusation is obviously the government. 137.Further, the passage in which Statement (9) appears also merits quoting:
138.From the above passage, it is again clear that the accusation of passing favours or benefits is directed at the government and / or her officials. Reading Statements (8) and (9) in context, I do not consider the meaning in (f) is borne out. 139.In any event, even if one were to accept that the passage carries the imputation of collusion, I do not think that the suggested collusion with the government and /or government officials is defamatory of the plaintiff. Again, on a fair reading of the passage, if there were an imputation of wrongdoing against the plaintiff, it is its attempt to hide its profits. But that is quite different from an imputation of wrongdoing regarding collusion, which must be a criticism directed against the government rather than the plaintiff. 140.I would reject the meaning in (f). IV(C)(3): Meaning in (g) — Plaintiff falsely pretended to be a non‑profit making organization 141.Although I have rejected this meaning in the context of the 1st Letter, in the context of the 2nd Letter I am prepared to accept that Statements (8) and (10) would give rise to such a meaning as alleged in (g). 142.The statement that the plaintiff has falsely pretended to be such a “non‑profit‑making organization” is clearly a comment. I have already expressed the view that the term “非牟利組織” — “non‑profit‑making organisation” — is confusing. But in any case, I think a reasonable member of the public would not expect the activities of such an organisation to be directed primarily towards profit‑making, and certainly not towards benefiting its own members. Reading Statements (8) and (10) as a whole, the essence of those statements lies mainly in the improper purpose of the establishment of CESCL, and because of the close affiliation between the plaintiff and CESCL it was questioned whether the plaintiff was truly a “non-profit-making organization”. 143.To further put the comment in context, it should be noted that at the beginning of the 2nd Letter reference was made to two other letters to the Director, including the 1st Letter itself. Therefore, the 1st Letter is relevant context in which the comment in question should be considered. 144.I would not repeat my discussion concerning the 1st Letter and the background of the Computer Festivals. Suffice it to say that in light of the disguised nature of the Computer Festivals; the benefits enjoyed by some directors and/or committee members through the Incidents; the substantial accumulated cash surplus in the plaintiff’s account and the questionable purpose of setting up CESCL; the close affiliation between CESCL and the plaintiff — I am satisfied that a reasonable person could have genuinely held the view and expressed the comment that the plaintiff was not truly a “non‑profit‑making organization” but had falsely disguised as such. 145.The plaintiff’s plea of malice is rejected for the reasons set out earlier and will not be repeated. I am satisfied that the defence of fair comment is made out. IV(C)(4): Meaning in (a) — Plaintiff was dishonest and/or deceiving towards the Government 146.My earlier remark that it is difficult to understand how this general imputation could be inferred applies also in relation to the impugned Statements (8) to (10). No elaboration on this imputation was made in the plaintiff’s Closing Submissions. 147.It appears that the parties are content to treat this imputation as largely overlapping with the other imputations discussed above rather than as a separate head, that being the case and for the reasons I have already discussed the allegations pertaining to this head of imputation fail. IV(D) Summary relating to the 2nd Letter 148.In light of my views above, the plaintiff’s claim in relation to the 2nd Letter fails. V. THE 3rd LETTER 149.In respect of the 3rd Letter, the impugned Statements are Statements (11), (12) and (13) (see §20 above). 150.The plaintiff contends that these impugned Statements carry the following defamatory imputations[24]:
V(A) The Defence 151.In the Defence[25], the defendant admits that the impugned Statements bear the meanings alleged in (a) to (e), but denies the meanings in (f) and (g). 152.The defendant further relies on the defences of justification, fair comment, and qualified privilege. V(B) The alleged imputations 153.In the plaintiff’s Closing Submissions, some of the alleged imputations have merged and were reformulated. 154.As in the case of the 1st and 2nd Letters, the meaning in (b) is no longer pursued as an independent imputation arising from the impugned Statements[26]. It appears also that meanings in (c) and (d) are not pursued independently either[27]. 155.The meaning in (e) has become the focus of the alleged defamatory imputation arising from the 3rd Letter. 156.The meanings in (f) and (g) are disputed and they are now reformulated as an imputation that “the plaintiff colluded with government and/or government officials”[28]. In any event, I do not see how it can be said that the meaning in (f) arises from the impugned Statements (11), (12) or (13). Insofar as Statement (11) refers to any impropriety leading to the plaintiff having the free use of public venue(s), such impropriety is essentially directed against the LCSD and not the plaintiff. I do not consider Statement (11) to be defamatory of the plaintiff. As far as Statements (12) and (13) are concerned, they simply do not carry the meaning in (f) at all. I will deal with the reformulated meaning later. V(C)(1): Meaning in (e) — Plaintiff overstated the attendance to the Computer Festival 157.It would be remembered that the SSP‑DC has ceased to co‑organise the Computer Festivals with the plaintiff since July 2010. For the Computer Festival 2011 (held in February 2011), the plaintiff has secured the venue of the Cheung Sha Wan Playground. According to the Terms and Conditions for Hire, hiring charges were payable on 10% of the gross receipts from the sales of admissions tickets. There was also a cap on the number of complimentary tickets. 158.For the Computer Festival 2011, the plaintiff announced that there were around 530,000 people attending the event. However, in the report submitted to LCSD in May 2011, the plaintiff stated that there were 59,664 paying visitors and hence the rental payable was $29,832 (on the basis that each ticket was $5)[29]. The discrepancy between the announced and reported figures could not simply be attributed to the complimentary tickets because of the cap. 159.There is obviously a significant disparity in these figures and neither Mr Cheung nor Mr Leung was able to give a satisfactory explanation for it. In cross‑examination, Mr Cheung admitted that the announced figure relating to the visitors was mere marketing strategy and there was no particular basis to support such a figure. 160.In the circumstances, it is clear that that the statement regarding the plaintiff having overstated the attendance at the Computer Festival is substantially true and justified. V(C)(2): Meaning in (a) — Plaintiff was dishonest and /or deceiving towards the government 161.Based on the findings in §§157 and 158 above, I am satisfied that it is well open to a reasonable person genuinely to hold the view that the plaintiff was dishonest in trying to reduce the rental payable to the government by suppressing the number of paying visitors. The question of malice is not raised specifically in relation to the 3rd Letter. 162.I am satisfied that the defence of fair comment is made out. V(C)(3): Reformulated meaning in (g) — Plaintiff colluded with government and /or government officials 163.Insofar as this meaning of collusion with the government and/or government officials is said to arise from Statements (11) and (13), it is clear that the subject of the accusation of collusion was the government, rather than the plaintiff. I will also repeat that even if the meaning of collusion is borne out, I do not think that the suggested collusion with the government and /or government officials is defamatory of the plaintiff. In Statements (11) and (13), the imputation of wrongdoing regarding collusion is directed against the government and not the plaintiff. 164.I would reject the reformulated meaning in (g). V(D) Summary in relation to the 3rd Letter 165.In light of my views above, the plaintiff’s claim in relation to the 3rd Letter fails. VI. QUALIFIED PRIVILEGE 166.In light of my views that the plaintiff’s claim has failed in relation to all 3 Letters, it is strictly unnecessary to consider further the defence of qualified privilege. I will only deal with it briefly. 167.The essence of this defence is to protect the freedom of communication where the communications are made in the interest of society or for protection of some common interest: see Gatley (ibid), §14.7. In Huntley v Ward (1859) 6 CB (NS) 514, Willes J said at p 517:
168.In a much quoted passage in Adam v Ward [1917] AC 309, Lord Atkinson explained at p 334:
169.The privilege is lost if the maker of the statement uses the occasion for some purpose other than that for which the law gives protection: Horrocks v Lowe [1975] AC 135; also Gatley (ibid), §§17.3‑17.4. 170.In Blakeney‑Williams v Cathay Pacific Airways Ltd [2011] 1 HKLRD 901, at §§125‑143, the Court of Appeal explained that the traditional concept based on a duty and interest analysis has been extended to cover responsible journalism in respect of publication by the mass media, which is commonly referred to as the Reynolds defence. It was pointed out by the Court of Appeal (at §139) that the Reynolds defence was available not only to the press and broadcasting media but also to anyone who published through the mass media, citing the decision of the Privy Council in Seaga v Harper [2009] 1 AC 1. The Court remarked that in the latter case, it might be more appropriate to refer to the defence as one of responsible public dissemination of information rather than that of responsible journalism. 171.In our present case, although the 3 Letters were copied to the press, there is no evidence that any of the letters were actually published in the mass media. Hence, neither the principles of responsible journalism nor responsible public dissemination are directly engaged in the present case. 172.Mr Hon argues that the defendant fails to show that each of the recipients has a corresponding interest to receive the Letters. In this connection, the explanation given by DHCJ Poon (as he then was) in Lo Ki Chung v Hong Kong Nam Hoi (Sha Tau District) Association Ltd (HCA 39/2003, dated 22 July 2004) is pertinent:
173.In the present case, the Computer Festivals clearly involved the use of public resources. For many years since its inception, the Computer Festivals had been held on the streets in Shamshuipo with the co-ordination by SSP‑DC and other government departments. The Computer Festival 2009 (held in January 2010) was moved to the Cheung Sha Wan Playground. Evidence also shows that the Computer Festivals involved public funding. In my view, with respect the many concerns about the Computer Festivals — the query over the true nature of the event; the query that the plaintiff has enabled some directors and/or committee members to derive benefits through the Incidents; the query regarding the establishment of CESCL in light of the substantial accumulated cash surplus in the plaintiff’s account; the fact that the plaintiff holds itself out as an association representing the computer and information technology industry and a “non‑profit‑making organization” (in the sense discussed in §142 above) — it cannot be gainsaid that the defendant would, and does, have a social and moral duty to bring the matter to the attention of the Director of LCSD. 174.Insofar as it is contended by the plaintiff that the list of recipients is too extensive, I disagree. While the government officials named on the list may not all be directly involved in the organisation of the Computer Festivals or the running of the event, a reasonable person would recognise that those officials would have a duty to be concerned about the matters raised in the Letters. I think the legislative councillors also fall within the same category. The chairman of the CIIF clearly has a direct interest in the matter. As for those involved in the Shamshuipo district affairs, while it may be said that their connection with the event would have ceased, but given their direct involvement in the past (to which the Incidents directly relate) I am satisfied that a reasonable person would have regarded them as having a social or moral duty to be concerned, and hence proper recipients of the communications. I am also satisfied that the Letters concern a matter of sufficient public interest that it was proper for the press to be copied the communications. 175.The plaintiff also argues that the privilege is lost because of malice. Mr Hon accepts that it is for the plaintiff to prove malice. Malice, in this connection, primarily relates to improper motive; and knowledge of falsity or recklessness as to the truth should best be regarded as evidence pointing to improper motive rather than a separate head of malice: see Gatley (ibid), §17.4. 176.It is necessary to consider the circumstances surrounding the issuance of the Letters. In the introductory part of this Judgment, I have already summarized the background leading to the setting up of the Alliance in 2009, and later the defendant. Members of the Alliance and the defendant were clearly aggrieved that the plaintiff paid no heed to the fact that the events organised by the plaintiff were adversely affecting their businesses. The lull in business could be most felt by those operating at the computer malls for several weeks before and after the Computer Festivals and Communications Festivals. Members of the Alliance strongly resented the fact that Mr Leung Ding Kau had refused their invitation to attend their meeting at the end of March 2009, but sent only a representative of the plaintiff who did not engage himself in any of the discussion at the meeting. 177.The plaintiff went ahead with their events in April at the Megabox, followed by the Communications Festival in August and the Tsuen Wan Computer Festival in November 2009. These further aggravated what was already a tense and deteriorating relationship. 178.I accept Mr Chan Sing Kwong’s evidence that the defendant was set up to fend for themselves. The Computer‑Malls Festival was the defendant’s own attempt to try to boost the business of the traders at the computer malls in Shamshuipo. I also accept that the 1st Letter was written to the Director of LCSD because they (members of the defendant) were aware that the plaintiff was determined to continue the Computer Festivals even after the SSP‑DC had announced its decision to cease to be the co‑organiser. The purpose of the Letter was to warn the Director against allowing public amenities and resources to be employed for what effectively was a commercial sales event in disguise. It was copied to the Chief Executive, various government officials and legislative councillors because it was their business to be made aware of the situation. It was also copied to the press as the subject concerned a matter of public interest. The defendant received no response from the Director to the 1st Letter. The 2nd Letter was issued again to the Directors 5 months later, and followed by the 3rd Letter 11 months afterwards. 179.Mr Chan said that in the long run the defendant would wish to see that neither the plaintiff nor the defendant would organise any more computer festivals so that the shops would no longer be forced to engage in “cut‑throat” sales strategies. He admitted that this was the ultimate goal of the defendant (as was so described in its press release in August 2012[30]). He said, and I accept, that because the plaintiff no longer held any Computer Festivals in 2013 and 2014, the defendant also stopped organising its own Computer‑Malls Festivals. In my view, enmity between the plaintiff and the defendant was obvious but enmity is not to be equated with malice. 180.Having considered the evidence, I am not satisfied that the plaintiff has made out its case that the sending of the 3 Letters (or any of them) was actuated by improper motive on the part of the defendant. The evidence elicited in the defence witnesses’ cross‑examination is far from clear to support a finding that the dominant purpose of issuing the 3 Letters was to harm the plaintiff. On the contrary, I accept Mr Chan’s evidence that he did not consider the statements in the 3 Letters or the Eastweek article to be untrue. I accept also his evidence that if the Computer Festivals did not involve public resources or amenities — in other words if the event had been a purely private undertaking — the defendant would have no cause of making complaints to the authority. I accept the genuineness of such evidence (and I should add, Mr Chan’s evidence generally) which, to me, points rather against an ill motive in the issuing of the 3 Letters. 181.I have not overlooked the Notice published by the plaintiff in the 19 May 2010 issue of the Eastweek magazine. The Notice was the plaintiff’s response to the impugned article. It was not an acknowledgment by Eastweek that their article was false in any material respect. In fact, as it now appears, the statement in the Notice (at point 2) that the Computer Festivals involved no public funding is incorrect. Mr Chan pointed out, and I accept, that the defendant at the time had requested but failed to obtain the audited accounts of the Computer Festivals. As now produced in litigation, the plaintiff’s accounts (as of June 2004) actually show that the plaintiff had received “government grant for IT Exhibitions”. Although Mr Chan has been cross‑examined about various aspects of the Notice, it has not been pointed out how it is said that he or the defendant had deliberately or recklessly ignored falsity of any particular aspect of the article. 182.The overall evidence does not convince me that the sending of the 3 Letters (or any of them) was actuated by improper motive on the part of the defendant. I am not satisfied that malice or improper motive is proved. VII. MALICIOUS FALSEHOOD 183.The plaintiff relies on malicious falsehood[31] as a separate cause of action. To succeed in this claim, the plaintiff has to prove, first, that the 3 Letters contain statements which are false; secondly, that those false statements refer to the plaintiff; thirdly, that they were published maliciously; and fourthly, that special damage has followed as a direct and natural result of their publication. The principle is encapsulated in what Bowen LJ said in Ratcliffe v Evans [1892] 2 QB 524, at 527‑528:
184.Malice, in this context, is explained in Gatley (ibid), at §21.8:
185.The plaintiff’s case on malicious falsehood is fraught with difficulties. This aspect of the case has not been developed in Mr Hon’s Closing Submissions beyond the adoption of the submissions on “malice”[32] (which I have already rejected in the context of fair comment and qualified privilege). The plaintiff’s case on malicious falsehood suffers the same deficiency of lacking in specifics and is doomed to fail. 186.Essential to the cause of action is a malicious intent or motive in the publication of falsities. I need only to repeat my rejection of the allegation of malice and improper motive in the earlier parts of this Judgment. The plaintiff’s case on malicious falsehood also fails. VIII. CONCLUSION 187.For the foregoing reasons, the plaintiff’s Action is dismissed. 188.I make an order nisi that the plaintiff should pay the defendant’s costs of this Action to be taxed, if not agreed.
Mr Kelvin Hon, instructed by King & Wood Mallesons, for the plaintiff Mr Johnny C M So, instructed by Henry Chiu & Partners, for the defendant [1] It should be noted that the “Computer Festival 2009” was held in Jan 2010, and “Computer Festival 2011” was held in Feb 2011. References in documents and correspondence to “Computer Festival 2010” should be understood to refer to the event held in Feb 2011. [2] §§4 & 5, plaintiff’s Closing Submissions [3] §§6 & 7, plaintiff’s Closing Submissions [4] §15, Defence [5] See e.g. §5, Statement of Claim [6] The plaintiff does not seem to press the meaning in (g). The meaning set out in §7 of the Closing Submissions is not repeated in the summary in §§14 and 15. [7] According to the accounts of the Computer Festival 2008, out of the total income of $1.97 million, $1.29 million was from the hiring charges; and according to the accounts of the Computer Festival 2009, out of the total income of $3.2 million, $2.18 million was from the hiring charges. [8] Press statement dated 27 January 2010, as a response to the Eastweek article [9] See §14, Reply, which in turn refers to matters pleaded in §15 of the Statement of Claim [10] §§87 to 89, plaintiff’s Closing Submissions [11] C.f. §§28 to 40, plaintiff’s Closing Submissions [12] §§15, 28 to 40, plaintiff’s Closing Submissions [13] Meaning in (e) is not maintained as a separate head, see §15, plaintiff’s Closing Submissions [14] To distinguish him from Mr Chan Sing Kwong, one of the defence witnesses [15] Draft minutes of the SSP‑DC’s meeting held on 19 Sept 2008, §43 [16] I would also mention my view that the expression “只是” in Statement (6) should be read as “merely” rather than “solely”. The two sentences “名義上 …, 卻…只是 ….”, when read as a couplet, clearly shows that the expression “只是” is there to highlight the contrast with the reputed nature of the trips. Hence, in considering the factual basis of the comment, what is in issue is whether fun and enjoyment forms the predominant purpose of the trips, rather than the sole purpose of them. [17] See plaintiff’s statement to the general editor of the Eastweek magazine dated 19 May 2010 [18] See §§17 to 27, plaintiff’s Closing Submissions [19] See §§34‑35, defendant’s Closing Submissions [20] §§9 & 10, plaintiff’s Closing Submissions [21] §23, Defence [22] See §§17 to 27, plaintiff’s Closing Submissions [23] §19, Reply, referring to matters pleaded in §15 of the Statement of Claim [24] §§12 & 13, plaintiff’s Closing Submissions [25] §29, Defence [26] See §§17 to 27, plaintiff’s Closing Submissions [27] See §§15, plaintiff’s Closing Submissions [28] See §§15, plaintiff’s Closing Submissions [29] See the Ombudsman’s letter dated 11 May 2012 [30] It is noted that this press release was not contemporaneous with but after the issuing of the 3 Letters [31] §§17 to 20, Statement of Claim [32] §93, plaintiff’s Closing Submissions |
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