Charles Sin Cho Chiu v. Tin Tin Publication Development Ltd. and Another

HCA006662/1997

HCA6662/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 6662 OF 1997

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Coram: Deputy Judge LI

Date of Trial: 5 - 6 November 2001

Date of Handing Down Judgment: 3 December 2001

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Judgment

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1.The Plaintiff ("Mr. Sin") is a senior practicing solicitor. He has also been involved in the securities businesses. At one time before 1987, he was the Chairman of the United Stock Exchange of Hong Kong Limited. At the material times, he was a member of the Institute of Security Dealers Limited.

2.The 1st Defendant was, at the material times, the publisher of Tin Tin Daily News （天天日報）("Tin Tin"). It was admitted that Tin Tin had a daily circulation of 110,358 copies at the material time. The 2nd Defendant was the editor of Tin Tin at the material time. Judgment in default has been entered against the 2nd Defendant. Tin Tin has already ceased publication but the action against the 1st Defendant is contested.

3.The present action relates to an article published on the 28th October 1996 issue ("the Article") of Tin Tin. On that day, and immediately next to the Article, there was a news report ("the News Report") which, the parties agreed, should be read in conjunction with the Article. The certified translations of the Article and the News Report are not quite satisfactory. Since the parties cannot agree on which is the better version, I have taken the liberty of adopting one and making minor changes to it. The full contents of the News Report are as follows:-

"(Caption)

Elders of the Securities Sector Set out Yesterday for Beijing Will meet Zhu Rong-ji, Chien Chi-xin Ru Ping & Wang Xao-quo etc.

A delegation of elders of the securities industry including former Chairman and Vice Chairmen of the United Stock Exchange, SIN Cho Chiu, CHAM Siu Lam, and others, set out for Beijing yesterday under the name of "Hong Kong Securities Merchants Association" for a four days visit. During that period, (they) will have audience with Zhu Rong-ji, Chien Chi-xin, Lu Ping, Wang Xao-quo, Zho Dao-qing etc. who are Chinese officials in charge of economics, finance and Hong Kong affairs. This is the first time ever since the "earthquake" at the top level of the United Stock Exchange following the stock market disaster in 1987 and the incident involving the arrest and charge of the "Seven Honourable Men" that China invites Sin, Cham and others, who were previously important officials of the United Stock Exchange, to go to Beijing to reflect opinions.

According to Cheung Wah Fung, Managing Director of Hong Kong Securities Group, the head of the delegation from the Institute of Security Dealers Limited, during the period of its stay in Beijing, it is arranged that the delegation will visit Vice Premiers of the State Council Zhu Rong-ji and Chien Chi-xin, Director of Hong Kong and Macau Affairs Lu Ping, Head of the Department for Propaganda Wang Xao-quo, Deputy Head of Department Zheng Wan-tong, Chairman of the Securities Administration Committee Zho Dao-qing and others, to exchange opinions on how to stabilize the Hong Kong securities market upon change of sovereignty, and to fortify the status of Hong Kong, after the setting up of the Government of the Special Administrative Region, as an international financial centre as well as to strengthen communication and links between the securities industries of Hong Kong and the Mainland.

The said delegation goes to Beijing to pay visit for four days from yesterday (the 27th) to the 30th. It is headed by Cheung Wah Fung, the Managing Director of Hang Fung Securities Group, Lam Hon Keung and Tam Bing Fai, Legislative Councillors, as Leader and Deputy Leaders and Zhou Zhi-rong Deputy Chief of the Reconciliation Section of the Zin-hua Agency as Honorary Leader. Consultants to the delegation include Lee Tung Hoi and Tsui Chin Tong, Members of the Standing Committee of the National Political Consultative Assembly, Wong Yee Wang, Legislative Councillor, Chief Chen Hei-chiang and Deputy Chief An Qu-tao of the Economics Section of the Xin-hua News Agency, Sin Cho Chiu former Chairman of the United Stock Exchange, Cham Siu Lam, Wong Kai Ming and Yu Kam Sing, former Deputy Chairmen, Li Wo Sing and Ho Ting Sek, former Directors, etc. The twenty-odd members of the delegation are all core members of the Institute of Security Dealers Limited and renown in the securities industry.

Since after the stock market disaster in 1987, the Hong Kong Government has arrested and charged Li Fook Shiu, the former Chairman of the United Stock Exchange, as well as others, totalling 7 people, of having allegedly made use of (their) office and authority to obtain bribes, resulting in "the Case of the 7 Honourable Men". Subsequently only Li Fook Shiu pleaded guilty, Sin Cho Chiu, Cham Siu Lam and Wong Kai Ming etc. were acquitted and discharged."

The relevant parts of the Article are as follows:-

"(Caption)

Elders granted visit to Beijing Shaving Off the Eyebrows of the Securities and Futures Commission

A delegation from the Institute of Security Dealers Limited comprising about 20 people yesterday set out exuberantly for Beijing to reflect opinions to high officials in charge of economics, finance and securities on the transitional period. Unlike the Stockbrokers Association on the last occasion, those visiting Beijing this time are mainly former elders of the United Stock Exchange, among whom quite a few are well-known people who had been arrested and charged by the ICAC and acquitted, or who have been publicly censured by the Securities and Futures Commission. That the Xin-Hua News Agency of Hong Kong has taken a leading role in helping the arrangement, resulting in (it) being highly regarded and received by high officials in Beijing, marks the significance of this delegation.

To those who are not forgetful, since the stock market disaster in 1987, the authorities, with a view to forcefully rectifying the United Stock Exchange, arrested and charged 7 members of the General Committee of the United Stock Exchange, then headed by Li Fook Shiu, (who were) suspected of corruption by means of (their) position and authority. This was the case of the so-called "7 Honourable Men". Notwithstanding that this case which caused a huge stir in Hong Kong and even in international financial markets, Headmaster Li eventually concluded this court case, which had lingered on for many years due to (his) denial (of guilt), with a short term sentence of one and half years, but the remaining "6 Honourable Men" have not been sentenced to prison together because of the guilty plea on the part of Headmaster Li. On the contrary, (they) were acquitted for insufficient evidence. This time, among members of the delegation visiting Beijing, Sin Cho Chiu, Cham Siu Lam and Wong Kai Ming are three of the "7 Honourable Men" who may be regarded as re-entering the bear garden.

As for the head of the delegation Cheung Wah Fung, month(s) earlier, after year(s) of investigation by the Securities and Futures Commission, (he) was publicly censured and automatically suspended from the office of Dealing Director for half a year. One may say that in the eyes of the Securities and Futures Commission, relevant departments of the Hong Kong government, and even the United Stock Exchange presently, most of the members of the delegation from the Institute of Security Dealers Limited visiting Beijing are "tainted elements". The high regard and reception at high level in Beijing, without doubt, is a positive recognition of stock market developments (by) elders of the securities industry over the past 20 to 30 years; however to the Securities and Futures Commission, there is humiliation of having (its) eyebrows shaved off.

............"

The last two paragraphs of the Article, not reproduced here, are considered irrelevant by the parties.

4.The Amended Statement of Claim avers that words in the Article mean and were understood to mean, in their natural and ordinary meaning:

(a) that Mr. Sin was guilty of corruption while in a position of power in the United Stock Exchange and should have been convicted of the offence with which he was charged ("the corruption imputation");

(b) that Mr. Sin was regarded by those responsible for the regulation and operation of the stock market as being tainted and disreputable ("the tainted imputation"); and

(c) that Mr. Sin was unfit to act as a representative of the stock broking industry ("the unfit imputation").

5.By reason of the publication of the Article and the words contained therein, Mr. Sin claims that he has been gravely injured in his character and reputation and has been brought into public scandal, odium and contempt and has suffered damage. Moreover, damage has been aggravated by the failure of the 1st Defendant to respond to a letter from Mr. Sin's solicitors dated 20th November 1996 seeking appropriate apology by the 1st Defendant. Mr. Sin therefore prays for damages, aggravated damages and costs. Prohibitive injunction, which is in the prayer, has been abandoned because Tin Tin has ceased publication. As agreed by the parties, my responsibility at this stage is to determine liability between Mr. Sin and the 1st Defendant.

6.It is common ground that in a suit for defamation the plaintiff is required to establish on the balance of probabilities the following:-

(i) publication of statement by the defendant;

(ii) that the statement refers to the plaintiff; and

(iii) that the statement is defamatory of the plaintiff.

Specifically in this case, the 1st Defendant admits (i) publication but denies (2) reference to Mr. Sin and pleads justification and fair comment for (3) defamation. However, at the trial the 1st Defendant did not call any witness. In his final submission, Mr. Tsang for the 1st Defendant confirmed that the 1st Defendant does not, after all, rely on the pleaded defences of justification and fair comment.

Reference

7.I have no difficulty at all in finding that the Article makes direct reference to Mr. Sin as one of the "7 Honourable Men" charged and prosecuted for alleged corruption offences. In other words, there is clear reference to Mr. Sin so far as the corruption imputation is concerned. The question remains as to whether the Article refers to Mr. Sin regarding the tainted imputation and the unfit imputation.

8.It is true that the Article makes no direct reference to Mr. Sin as one of the "tainted elements" and as unfit to act as representative of the securities industry. The defence contends that the Article merely says that "most of the members of the present Delegation" had background that could be described as "tainted". Mr. Tsang, counsel for the 1st Defendant, draws my attention to the speech of Viscount Simon, L.C. in Knupffer v. London Express Newspaper Limited [1944] AC 116 at 121:-

"There are two questions involved in the attempt to identify the appellant as the person defamed. The first question is a question of law - can the article, having regard to its language, be regarded as capable of referring to the appellant? The second question is a question of fact - Does the article, in fact, lead reasonable people, who know the appellant, the conclusion that it does refer to him?"

Mr. Tsang says that Mr. Sin cannot prove reference because reasonable people would not regard the fact of prosecution and acquittal of Mr. Sin as would render him a tainted element. Mr. Tsang also cities Gatley on Libel and Slander, 9th Edition, paragraph 7.11:-

"If a statement would be capable of referring to the members of a group as individuals and it is plain that the charge is made against only one or some but not all of the group, then unless the statement refers to all of them or there is identifying evidence, it is incapable of bearing the imputation that any particular one of them was charged."

9.On the other hand, Mr. Pao, counsel for Mr. Sin, relies on the speech of Lord Atkin in Knupffer v. London Express Newspaper Limited at 121-122:-

"...... I venture to think that it is a mistake to lay down a rule as to libel on a class, and then qualify it with exceptions. The only relevant rule is that in order to be actionable the defamatory words must be understood to be published of and concerning the plaintiff. It is irrelevant that the words are published of two or more persons if they are proved to be published of him, and it is irrelevant that the two or more persons are called by some generic or class name. There can be no law that a defamatory statement made of a firm, or trustees, or the tenants of a particular building is not actionable, if the words would reasonably be understood as published of each member of the firm or each trustee or each tenant. The reason why a libel published of a large or in-determinate number of persons described by some general name generally fails to be actionable is the difficulty of establishing that the plaintiff was, in fact, included in the defamatory statement, for the habit of making unfounded generalizations is ingrained in ill-educated or vulgar minds, or the words are occasionally intended to be a facetious exaggeration. Even in such cases words may be used which enable the plaintiff to prove that the words complained of were intended to be published of each member of the group, or, at any rate, of himself ...... It will be as well for the future for lawyers to concentrate on the question whether the words were published of the plaintiff rather than on the question whether they were spoken of a class ......"

10.I accept that "class libel" is not actionable or, to use Viscount Simon's terminology, not capable in law of referring to an individual plaintiff. But it is beyond dispute that more than one individual person may be defamed by one defamatory publication. In the present case, the expression "most of the members" clearly refers to certain individual persons, not all of the members or the whole delegation as a class; whether each and every one of "most of the members" can be identified does not affect Mr. Sin's case as long as Mr. Sin is among those of "most of the members" who can be identified. So the real question is whether Mr. Sin can be identified as one of "most of the members".

11.In the third paragraph of the Article, the author names Cheung Wah Fung as one who had been publicly censured. Obviously, Cheung Wah Fung appeared to an ordinary reader as a "tainted element". But that paragraph goes on to talk about "most of the members ....... as 'tainted elements'." Naturally, an ordinary reader would look elsewhere in the Article for other persons who comprise "most of the members". One then finds in the preceding, second paragraph of the Article reference to the "7 Honourable Men" and to Mr. Sin as one of the "7 Honourable Men" and as a member of the delegation. In the circumstances, a reasonable jury or tribunal of fact should have little difficulty in coming to the conclusion that Mr. Sin is referred to in the Article as one of "most of the members" who were "tainted elements".

12.The imputation that Mr. Sin was unfit to act as a representative of the securities industry is an inference to be drawn from the alleged defamatory imputation of being a tainted element. Since the unfit imputation is derived from the tainted imputation it requires no separate proof of reference.

13.Alternatively, the imputation that Mr. Sin was unfit to act as a representative of the securities industry may be derived from the reference connected with the statement in the third paragraph of the Article that the Securities and Futures Commission etc. had their eyebrows shaved off. The reference in connection with eyebrows shaved off is to "elders" of the securities industry. One may argue that "elders" extends to Mr. Sin. During the course of the trial, Mr. Pao informed the court that Mr. Sin no longer relies on the defamatory connotation arising from "eyebrows shaved off". If I may say so, this is a sensible position to take for it removes one convoluted case of defamatory imputation without affecting the strength of Mr. Sin's claim.

Defamatory Imputation

14.Mr. Pao has very helpfully set out the relevant principles for determining whether a statement or article contains defamatory imputation. Since Mr. Tsang has no quarrel with Mr. Pao over these principles, I adopt the following in Mr. Pao's submissions as correct guiding principles:-

(i) The court has to consider the natural and ordinary meaning which the words convey to ordinary reasonable persons.

(ii) The ordinary reader would not be over-keen to look for scandal but can read between the lines and draw inferences. Ordinary men and women have different temperaments and outlooks. Some are unduly suspicious and some are unusually naive. One must try to envisage people between these 2 extremes and see what is the most damaging meaning that they would put on the words.

(iii) A defamatory imputation can be expressed in many different forms. It may be expressed in a simple statement; it can be expressed in form of a question. It can be conveyed by a solemn expression; but it can equally be conveyed by way of a joke or a sarcastic comment. In short, it is not the form of expression that is important, it is the actual message that came across which is important. Otherwise, a vicious and cunning, perhaps even literally skillful defendant can avoid liability through technicality.

(iv) The effect of publication on an ordinary reader is one of impression. Impression is not derived from carefully analyzing each and every word in the article as if we are grammar teachers or lawyers. Impression has more to do with feeling than analysing. Reading a newspaper or magazine article is obviously different from reading a professional journal. Most, if not all, ordinary readers of a newspaper or magazine would likely read an article only once or twice. The court has to consider what are the messages conveyed to ordinary readers after finishing reading the article.

(v) The intention of a defendant is irrelevant. A defendant may or may not mean to use his words to pass on a defamatory message. He may mean to pass on a particular defamatory message but instead pass on another defamatory message to the readers. What a defendant intends to convey by his article is irrelevant. The court is concerned with the objective view of how the words would be understood by ordinary members of the public.

(vi) The court has to consider the relevant parts of the publication as a whole to see if, together, the words would be understood to carry defamatory imputations. While certain words may be "key words" which, by themselves, convey defamatory messages, combination of words and statements in other parts of the article, which are by themselves quite innocuous or harmless, may together convey a defamatory message.

A statement can be harmless when read in isolation. It may however be different if it is read in the whole context of an article.

A statement can carry two alternative meanings if read in isolation. But reading it in the context of the entire article, one of the alternative meanings may stand out as the real message conveyed.

(vii) The context in which a statement should be read may extend to include materials placed side by side or proximate to the article. For instance, it is common ground that in the instant case the Article may be read in conjunction with the News Report.

15.So far as pleaded defamatory imputations are concerned, I also accept the proposition by Mr. Pao based on the judgment of Diplock LJ in Slim et al v. Daily Telegraph Ltd et al [1968] 2 Q.B. 157 at 175 that a plaintiff can rely on, at the trial, an ordinary and natural meaning which is less injurious than the one that has been specifically pleaded so long as the meaning sought to be relied on at the trial comes broadly within the meaning pleaded.

General Observations

16.On a number of matters, I ought to make specific findings.

(1) The Case of the 7 Honourable Men

17.Mr. Pao on behalf of Mr. Sin has adduced evidence as to the course of events in the case of the 7 Honourable Men. The history of that case is well reported both in the court papers and in the media. I have no doubt that Ronald Li was prosecuted for two groups of offences. For one group of (two acceptance of advantage) offences, he was charged and tried alone, convicted and sentenced to four years imprisonment. His appeal against the conviction was dismissed in April 1991.

18.In the other group of (five acceptance of advantage) offences, Ronald Li pleaded guilty to two of them on 12 July 1991 and the other three charges were left on the court's file. The other 6 Honourable Men (including Mr. Sin) were on the same occasion also prosecuted for similar offences and all of them pleaded not guilty to all charges. Trial of the 6 Honourable Men before a judge sitting with a jury began on 23 October 1991 and lasted 8 months. On 23 June 1992, the jury after 38 hours deliberation returned verdicts of not guilty including inconclusive verdict on 3 counts which were treated as not guilty verdicts. So all 6 Honourable Men were acquitted. It was at this point that Ronald Li applied for leave to reverse his two guilty pleas. The application was not opposed by the prosecution. The court allowed Ronald Li to substitute pleas of not guilty. Since the prosecution offered no evidence on the outstanding charges, the court further directed that Ronald Li be acquitted.

19.Thus the Article is grossly misleading in several respects in relation to the case of the 7 Honourable Men. First, it is misleading to say simply that Ronald Li pleaded guilty. An accurate report would be to add that Ronald Li was allowed to reverse his plea, that the prosecution offered no evidence and consequently he was acquitted without trial. Secondly, the Article gives the impression that the 6 Honourable Men (including Mr. Sin) could have been sentenced to prison together with Ronald Li. There is no way this could happen. Ronald Li was sentenced to prison one year before. Had the 6 Honourable Men been convicted and sentenced to prison in 1992, it would be on account of the second group of offences, not the same group of offences for which Ronald Li was sentenced in 1991. Thirdly, it is in any event incorrect to say that the 6 Honourable Men (including Mr. Sin) were acquitted for insufficient evidence. Mr. Pao suggests that, in the nature of things, it is not possible to determine after a jury trial the undisclosed reasons(s) for the verdict one way or the other. Mr. Tsang on the other hand says the acquittals must be due to insufficient evidence. I am inclined to agree with Mr. Pao. Even if it is possible or necessary to determine the undisclosed reason(s) for the acquittals, one only has to refer to the submissions by George Carmen Q.C. for Ronald Li when the application to reverse plea was made. Mr. Carmen pointed out that the trial judge directed the jury about the lack of connection between the advantage received and the listing of shares. Without this nexus, it was said, there was no criminal offence and so Ronald Li could not be guilty of the offences with which the 6 Honourable Men were also charged even though he had pleaded guilty. Counsel for the prosecution also accepted that the charges against Ronald Li could not be sustained in the light of the directions given by the learned judge to the jury in the trial of the 6 Honourable Men. So, it is not correct to say that the 6 Honourable Men were acquitted for insufficient evidence . They could well have been acquitted by the jury on the ground that what they did did not amount to criminal offences at all. Fourthly, there is no basis for saying that the case (of the 7 Honourable Men) lingered on for many years due to denial of guilt by Ronald Li. Ronald Li in fact pleaded guilty early on.

20.At one stage during the trial, there were arguments over the significance of the trial judge in the criminal case refusing to award costs to Mr. Sin. It may be argued that because Mr. Sin did not get an order for costs against the prosecution, the prosecution of Mr. Sin was justified or, to put it in another way, Mr. Sin brought suspicions upon himself and he cannot complain that the Article contains statements casting suspicions on him. Now, the principles for determining whether to award costs to an acquitted defendant in a criminal case are not clearly understood by even some judges and lawyers. For present purposes, it is only necessary to quote from the learned judge dealing the question of costs:-

"I found it my duty to rule against the applications [by Mr. Sin and his co-defendants] and this should not in any way be misunderstood. My rulings have no implications beyond this application for costs. Each defendant has been completely and irrevocably cleared of any criminal behaviour. Each came to court with a high reputation of integrity and public service; that reputation remains completely intact."

(2) Mr. Cham Siu Lam and Mr. Wong Kai Ming

21.Mr. Pao has also adduced evidence to show that, although Mr. Cham Siu Lam and Mr. Wong Kai Ming were reported in the News Report and the Article as members of the delegation who went to Beijing, in fact these two gentlemen did not go to Beijing. Such evidence is not contradicted nor even challenged by the 1st Defendant. I find as a fact that neither Cham Siu Lam nor Wong Kai Ming went to Beijing with the delegation as alleged in the News Report and the Article. Mr. Pao goes on to say that there being such mistakes in the News Report and the Article, in the absence of evidence or explanation from the 1st Defendant, the court is entitled to infer that the 1st Defendant recklessly failed to verify facts and could not have honestly believed that the statements of fact in the News Report and the Article were true. For whatever it is worth, I also agree with Mr. Pao.

(3) The significance of the News Report

22.The News Report, as it should be, delivers information of a very recent event. The event was that a delegation of elders from the securities industry visited for Beijing. There is nothing remarkable in the context of this case about such report. To the ordinary reader, this was news. However, the New Report included a final paragraph which says:-

"Since after the stock market disaster in 1987, the Hong Kong Government has arrested and charged Li Fook Shiu the former Chairman of the United Stock Exchange as well as others, totalling 7 people, of have allegedly made use of (their) office and authority to obtain bribes, resulting in "the Case of the 7 Honourable Men". Subsequently only Li Fook Shiu pleaded guilty, Sin Cho Chiu, Cham Siu Lam and Wong Kai Ming etc. were acquitted and discharged."

23.The arrest, prosecution and acquittal of the 3 named members (including Mr. Sin) of the delegation to Beijing occurred years before the Beijing visit. The News Report does not state when the criminal case in which the 3 named members of the delegation to Beijing were implicated was concluded but it does mention 1987. At the time of reading the Article in 1996, no ordinary reader would take Mr. Sin's involvement in the 1991-1992 criminal case as news. Clearly, dredging up this criminal case in the News Report was not news reporting but tale telling actuated by malice to add colour to, or more precisely to smear, the 3 named members (including Mr. Sin) of the delegation to Beijing. In this connection, it is useful to recall the judgment of Lord Nicholls in Cheng and another v. Tse Wai Chun [2000] 3 HKLRD 418 at 438:-

"Regarding qualified privilege, juries can be directed that the defence is defeated by proof that the defendant used the occasion for some purpose other than that for which the occasion was privileged. This direction can be elaborated in a manner appropriate to the facts and issues in the case."

24.So the message an ordinary reader gets after reading the last paragraph of the News Report is that an activity (the Beijing visit) took place very recently involving 3 named persons (including Mr. Sin) who were long time ago together with Ronald Li suspected of obtaining bribes and only Ronald Li admitted his guilt. Although the News Report closes by saying Mr. Sin and the other two named persons were acquitted, at the very least an ordinary reader obtains the impression that Mr. Sin, an elder in the securities industry, associated with a criminal who abused his office and authority in the securities industry. Considering Mr. Sin's position in the securities industry, a statement alleging his association with a person who took bribes is bound to lower Mr. Sin's esteem and to cause general readers to dispise him. In my view, had Mr. Sin pleaded defamation by the News Report, he would likely succeed because the last paragraph in the News Report is already defamatory. However, the News Report is not the subject of complaint in this case.

25.Instead, it seems to me, the 1st Defendant through its counsel Mr. Tsang suggests that the court ought to take into account the contents of the News Report in the hope that the court would find the News Report providing the factual basis for the author of the Article to "honestly" believe that his commentary on the case of the 7 Honourable Men was true. Even if the author of the Article could rightly claim that he or she had been misled by the News Report, as a matter of principle I hold that the 1st Defendant as the publisher of both the News Report and the Article cannot shelter behind its own prejudicial tale telling. As I have already pointed out, the case of the 7 Honourable Men was water long gone under the bridge. There was no reason to dredge it up. I find that the inclusion of the final paragraph in the News Report published by the 1st Defendant amounts to aggravating conduct on the part of the 1st Defendant that should be reflected in damages.

(4) The title of the Article

26.The Article itself bears the title that the Securities and Futures Commission had their eyebrows shaved off. It is clear that the Article is not held out as a news report but a commentary. The ordinary reader gets the impression that this is a commentary concerning the esteem of the Securities and Futures Commission. However, this does not prevent the ordinary reader from finding defamatory statements in the Article referring to other persons such as Mr. Sin.

(5) The professional status or business reputation of Mr. Sin

27.Mr. Sin gave evidence on his professional qualification as a solicitor and his standing in the securities industry. I should at this stage note for the record that I have no doubt as to the professional status and business reputation as stated by Mr. Sin.

(6) Evidence in mitigation

28.A without prejudice letter dated 22 July 1997 by solicitors for the 1st Defendant to solicitors for Mr. Sin was admitted at the trial as evidence. The defence avers that by failing to accept the without prejudice offer, Mr. Sin failed to mitigate his loss even if he succeeds on his cause in this action. That letter, on without prejudice basis, is couched in terms that constitute an offer that is desultory and falls short of even a perfunctory gesture. I find that that offer does not serve the 1st Defendant at all.

The Corruption Imputation

29.Mr. Pao argues that the Article, when read by reasonable readers taking an impressionistic approach who would draw inferences from the literal words, contains a statement to mean that Mr. Sin should have been convicted of corruption. The alleged defamatory statement is:-

"Notwithstanding that this case which caused a huge stir in Hong Kong and even in international financial markets, Headmaster Li eventually concluded this court case, which had lingered on for many years due to (his) denial (of guilt), with a short term sentence of one and half years, but the remaining "6 Honourable Men" have not been sentenced to prison together because of the guilty plea on the part of Headmaster Li. On the contrary, (they) were acquitted for insufficient evidence." (Emphasis added by counsel)

This has to be read in conjunction with the details given in the second paragraph of the Article. The second and third paragraphs of the Article together presented to an ordinary reader the following as facts:-

(i) Mr. Sin and Ronald Li were both on the General Committee of the United Stock Exchange;

(ii) Mr. Sin and Ronald Li were charged together for corruption by means of their position and authority;

(iii) Ronald Li pleaded guilty in the case in which Mr. Sin was indicted and Ronald Li was sentenced in that same case to prison for one and a half years; and

(iv) Mr. Sin was acquitted for insufficient evidence.

30.According to the Amended Defence, the natural and ordinary meaning of the alleged defamatory statement in the Article pleaded and admitted by the 1st Defendant is that:-

"(b) [Mr. Sin] was one amongst the "7 Honourable Men", of which Li Fook Shiu was the head, who had been arrested charged and prosecuted by the ICAC based on allegations of corruption for abuse of power in his capacity as, inter alia, a Vice-Chairman of the Stock Exchange and a member of the Listing Sub-Committee.

(c) Unlike the said Li Fook Shiu who had been convicted upon his plea of guilty, the others (including the Plaintiff) of the "7 Honourable Men" were acquitted of their charges after trial due to insufficient evidence."

Mr. Tsang for the 1st Defendant contends that "but" and "On the contrary" in the alleged defamatory statement taken at the highest connote a surprise at the state of affairs. Certainly, it does not lead to the imputation that the 6 Honourable Men should have been convicted. A surprise could not be defamatory of the Plaintiff because it is by no means unequivocal. It may be a surprise that Mr. Ronald Li would have pleaded guilty in the first place. The other 6 Honourable Men were no doubt reputable members of the society, but how can they compare to Mr. Ronald Li who was the most authoritative and prominent figure ever in the Hong Kong securities industry? Furthermore, surprise is not pleaded as an inference and the Plaintiff cannot rely on that.

31.Given such ingenious argument, the court has to ask itself what is a surprise? Plainly, it is a disturbing unexpected turn of events. The author of the Article, using the words "but" and "On the contrary", conveyed to the ordinary reader the message that the acquittal was an unexpected result. This is as good (or as bad) as saying that Mr. Sin was guilty and should have been convicted and sentenced to prison. The "but" and "On the Contrary" were placed at the beginning of sentences referring to the remaining 6 Honourable Men including Mr. Sin, not in sentences referring to Ronald Li. Mr. Tsang's contention that the Article expresses to general readers surprise that Ronald Li should have pleaded guilty in the first place does not even qualify as sophistry; it is plain unacceptable linguistic delusion. The defamatory imputation as pleaded for Mr. Sin is well engraved in the Article.

The Tainted Imputation

32.Mr. Tsang in final submission does not argue that the expression "tainted elements" is not defamatory. In any event, I have no difficulty in coming to the conclusion that naming a person as a tainted element leaves an ordinary reader an unequivocal impression that the named person has tarnished reputation.

Malice

33.Mr. Pao relies on malice to counter the defence of fair comment. Since the 1st Defendant has abandoned the defence of fair comment, malice becomes irrelevant except perhaps in relation to consideration of quantum of damages. In this respect, I suppose counsel will make further submissions at the hearing to be fixed for assessment of damages.

Verdict

34.In conclusion, I find that the 1st Defendant published defamatory statements to the effect that Mr. Sin was guilty of corruption, should have been convicted and sentenced to prison and that Mr. Sin has had his reputation tarnished in the eyes of the authorities overseeing the securities industry. For these defamatory imputations, the 1st Defendant has not established any valid defence. Accordingly, there is verdict in favour of the Plaintiff and judgment for him on liability.

35.I hereby order that hearing be fixed as soon as possible for the questions of quantum of damages and costs.

Representation:

Mr. Jason Pow instructed by Messrs. Iu, Lai & Li for the Plaintiff.

Mr. K.H. Tsang instructed by Messrs. John Ho & Tsui for the Defendant.