Hong Kong’s law of defamation generally follows the English law of defamation, although there are some important differences.
One thing that Hong Kong still shares with England, post handover, is a rampant (Chinese language) tabloid press. In Hong Kong, there is a greater volume of case law on defamation than on any other tort.
We now turn to consider the hypothetical situation where Company A has posted an article on its website stating that Company B has been defrauding customers.
On the assumption that the article was made without any proper basis and was, in fact, defamatory, we consider:
a. what remedies (if any) Company B would have against Company A in Hong Kong; and
b. whether the position would be any different in this jurisdiction if (i) one of Company A's directors (Mr A) had also defamed Company B; or (ii) the article posted by Company A also defamed a director of Company B (Mr B).
Elements of defamation
There are three essential elements to the tort of defamation:
# there must be a defamatory statement;
# which refers to the claimant; and
# which is published.
On the facts provided in the hypothetical case study, all three basic elements are satisfied and there are no substantive defences.
Posting a message on a website is a publication for these purposes. Technically, Company B’s action lies in libel, since the publication on a website is considered to be a ‘permanent’ form of communication. This is in contrast with slander, which occurs where publication is made in a transient form.
Corporations can sue for defamation
In Hong Kong, a company can sue for defamation, provided that, as in this case, the defamatory message in question affects the company’s trading or business reputation.
A cause of action in Hong Kong will lie if the defamatory statement is downloaded in Hong Kong and the claimant company can show that it has a reputation in Hong Kong which was damaged. Neither the claimant company nor the respondent necessarily needs to be resident in Hong Kong for the claim to succeed.
If Mr A, a director of Company A, participates in or authorises the publication of the defamatory message on Company A’s website, he will be liable as joint tortfeasor.
If the message in question published by Company A was also defamatory of Mr B, a director of Company B (which would be the case if, for example, the message was to the effect that Mr B was behind Company B’s allegedly fraudulent scheme), then Mr B will also have a separate cause of action against Company A and/or Mr A in libel.
There are two principal remedies available to Company B: damages and an injunction. Damages is the primary remedy. An action for libel (unlike slander) does not require proof of damage, though the amount of damages awarded will depend on the circumstances.
There are various heads of damage which may be available. We will focus on the most common in defamation cases: general compensatory, aggravated and exemplary damages.
General compensatory damages compensate the claimant for distress/hurt, and repair and vindicate the claimant’s reputation. Aggravated damages are also compensatory, but may be available if the respondent’s conduct has compounded the injury to the claimant’s feelings. Exemplary damages are not compensatory; they are available in limited circumstances to punish/make an example of the respondent and to deter others from doing the same.
Company B cannot sue for injured feelings, since it is inanimate; but Mr B may. Company B will need to provide evidence of harm to its reputation in order to recover more than nominal general compensatory/aggravated damages. The factors that the court will take into account are essentially the same as under English law.
On the facts, an award of exemplary damages would only be considered by the court where Company A’s conduct was calculated to make profit. An award of exemplary damages in this type of case could exceed the compensation otherwise payable to Company B by way of compensatory damages.
In Hong Kong, jury trial in defamation cases is rare (unlike in England). However, where juries have awarded damages, the sums awarded tend to be large. Hong Kong appellate courts have no power (unlike English courts) to substitute their own award of damages for that of the jury and, in the case of excessive damages being awarded, the appellate court can only set aside the award and order a new trial on damages.
The court will award an interim injunction (pending trial) in only the clearest of cases. A claimant may seek a permanent injunction (as opposed to damages) if it does not want damages, if the respondent cannot pay damages or if damages would not adequately compensate the claimant.
To mitigate damages, Company A/Mr A should consider posting an apology on Company A’s website. Section 25 of the Defamation Ordinance provides that where defamation is unintentional and an apology is accepted by the claimant, no further proceedings for libel may be maintained. If the apology is not accepted, then the fact that it was offered may be used as a defence.