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Oriental Press Group Ltd v. Fevaworks Solutions Ltd

Closed Expands Expression

Key Details

  • Mode of Expression
    Electronic / Internet-based Communication
  • Date of Decision
    July 4, 2013
  • Outcome
    Judgment in Favor of Defendant
  • Case Number
    FINAL APPEAL NO. 15 OF 2012 (CIVIL)
  • Region & Country
    Hong Kong, Asia and Asia Pacific
  • Judicial Body
    Appellate Court
  • Type of Law
    Civil Law
  • Themes
    Defamation / Reputation
  • Tags
    Intermediaries Liability, Internet Service Providers, Civil Defamation

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Case Analysis

Case Summary and Outcome

The Hong Kong Court of Final Appeal held that an internet service provider is entitled to rely on the defence of innocent dissemination when faced with a defamation claim relating to statements posted on a discussion forum. Two newspapers had sued the host of a popular Hong Kong discussion forum after a series of defamatory posts were made on the forum. The Court held that the defence of innocent dissemination was available to the service provider because it was not the first or main publisher of the defamatory statements. The Court noted that the service provider had had no knowledge of the content of the posts until it was alerted to them and that, given the high number of posts on the forum, it could not realistically have been expected to have monitored and controlled all posts. As the service provider had removed the posts soon after it became aware of them the Court held that the service provider had acted with reasonable care and that it was therefore absolved of liability under the defence of innocent dissemination.


Facts

On March 27 and 28, 2007 a series of defamatory statements (“the 2007 statements”) were posted on the Hong Kong Golden Forum, an internet discussion board in Hong Kong (“the Forum”). The Forum was hosted by Fevaworks Solutions Limited (trading as Alive! Media and Communications). These posts related to a 1999 murder of a newspaper vender and implied that Oriental Press Group Limited and Oriental Daily Publisher Limited – the owners, publishers and printers of the Chinese daily newspaper “Oriental Daily News” – had deliberately avoided reporting about the trial and so were connected to the murder in some way.

Similar statements were posted on October 24, 2008 (“the 2008 statements”). These statements implied that Oriental Press was involved in “drug trafficking and money laundering [and] that they were involved in illegal and immoral activities and were corrupt, illegal, immoral and unethical” [para. 6]. Oriental Press became aware of the 2008 statements on October 27 2008 and wrote to Fevaworks and Fevaworks removed the 2008 posts “three and a half hours after” being informed of the nature of the posts [para. 6]. It was only on November 14, 2008 that Oriental Press became aware of the 2007 statements, and it alerted Fevaworks to the statements on December 10, 2008. However, the 2007 posts were only removed from the website in August 2009 – more than eight months after Fevaworks became aware of them.

On January 21, 2009, another set of statements were posted on the Forum (“the 2009 statements”). These statements again referred to Oriental Press but also included the Sun News Publisher Limited – the proprietor, publisher and printer of “The Sun”, another popular Chinese daily newspaper within the Oriental Press Group. The statements alleged that Oriental Press and The Sun were “founded on drug money, were involved in drug trafficking, money laundering and immoral activities and were corrupt, illegal, immoral and unethical” [para. 8]. They also alleged that Mr Ma Ching Kwan – the honorary chairman of Oriental Press – “was a member of a family involved in drug trafficking” and either a member of or associated with the 14K triad society – an organized crime syndicate in Hong Kong [para. 8]. Fevaworks discovered the posts through their own monitoring system on January 22, 2009 – only about twelve hours after they had been posted – and removed the posts immediately.

The Forum was free and anyone could browse the website but only registered persons were able to post messages. In order to register, members had to provide various details, including their names and a traceable e-mail address. The rules of membership included a prohibition on posting objectionable content like defamation, pornography, harassment and intellectual property rights infringement, and violation of these rules could lead to suspension of membership. The Forum had considerable traffic of 30,000 users at any given time on the website, and 5,000 posts could be made each hour. There was no editing or filtering of the posts by Fevaworks before they appeared on the forum, but two administrators were employed to monitor and filter the forum discussions, field complaints and suspend or terminate the user’s account in case of frequent violation of rules. The Forum’s posts could not be downloaded by any user and once a post had been deleted it was no longer accessible by anyone.

As a result of the three groups of statements, the newspapers brought two separate actions for defamation: the first concerned the 2007 and 2008 statements and was brought solely by Oriental Press; the second concerned the 2009 statements and was brought by Oriental Press and The Sun. The two actions were tried together, and the Court of First Instance dismissed all claims in respect of the 2008 and 2009 statements. However, because of the delay in taking down the 2007 statements, the Court had found that there was no defence to their publication, and awarded Oriental Press HK$100,000.00 in damages.

The newspapers then appealed to the Court of Appeal which upheld the Court of First Instance’s findings in respect of the 2008 and 2009 statements. The Court of Appeal did grant the newspapers leave to appeal to the Court of Final Appeal on the grounds that there was a “question of great general or public importance” which was whether the defence of innocent dissemination (or any other defence) is available to defendants when defamatory statements are posted on a commercial website by a third party.

The question in respect of the 2008 and 2009 statements therefore came before the Court of Final Appeal.


Decision Overview

Justice Ribeiro PJ delivered the judgment of the Court of Final Appeal. Justice Litton NPJ delivered a separate concurring judgment. The central issue before the Court was whether the defence of innocent dissemination was available to Fevaworks as the host of an internet discussion forum. As this defence is only available to subordinate publishers, the Court was also required to determine whether Fevaworks was a publisher of the defamatory posting and then whether it was the first or main publisher or a subordinate publisher.

In setting out the nature of the tort of libel, the Court stated that the purpose of the tort is “the protection of a person’s reputation” and noted that a reputation is damaged when an individual “publishes or communicates to a third person a defamatory statement” (defined by the Court as “a statement tending to lower someone in the estimation of right-thinking members of society generally”) [para. 16]. This definition highlights that “the act of publication is a fundamental constituent of the tort” [para. 16]. The Court referred to the Australian cases of Webb v. Bloch (1928) 41 CLR 331 and Dow Jones & Co Inc v. Gutnick (2002) 210 CLR 575 in identifying that publication is a bilateral act because it involves a publisher making the statement available for a third party’s comprehension. With reference to the Canadian case of Crookes v. Newton [2011] 3 SCR 269, the Court noted that before the development of the common law defence of innocent dissemination, a person would be held liable for publishing libel if “by an act of any description, he could be said to have intentionally assisted in the process of conveying the words bearing the defamatory meaning to third party, regardless of whether he knew that the article in question contained those words” [para. 19]. The Court noted that the traditional rule excluded from the understanding of “intentional” publication any publication made to a third party accidentally but with no negligence. The traditional rule also allowed for vicarious liability and so individuals were vicariously liable for “servants’ acts of publication or for acts of publication which he has authorised” [para. 22].

The Court discussed the way in which the strictness of the traditional publication rule was relaxed through the introduction of the common law defence of innocent dissemination which became established through the U.K. case of Emmens v. Pottle (1886) 16 QBD 354 and the Canadian case of Vizetelly v. Mudie’s Select Library Limited [1900] 2 QB 170. This defence, as set out in the Vizetelly case, has three requirements: that a defendant must have had no knowledge of the libel contained in the work disseminated by him; that there was nothing in the circumstances that ought to have led the defendant to suspect there was libel; and there was no negligence in not knowing that there was libel in the work disseminated by the defendant. The Court explained that the defence is only available to subordinate – and not first or main – publishers, and is not available if the subordinate publisher “knew or ought by the exercise of reasonable care, in the circumstances in which the work came to him or was disseminated, to have known that the article disseminated contained defamatory material” [para. 29]. The onus is on the subordinate publisher to demonstrate that they had no knowledge of the defamatory material in the published work and that this lack of knowledge was “not due to their own lack of care” [para. 29]. The Court stressed that even though there is no legislation making the defence of innocent dissemination a statutory defence in Hong Kong, it remains a defence under common law.

Fevaworks had relied on a series of cases – Byrne v. Deane [1937] 1 KB 818 from the U.K, Hellar v. Joe Bianco (1952) 244 P 2d 757 from the U.S. and Urbanchich v. Drummoyne Municipal Council (1991) Aust Torts Reports 1-127 from Australia – in their argument that they should not be liable for the publication of the defamatory cases. The Court analysed these cases and identified that they had established that an owner is not liable for defamatory statements affixed to their property until the owner is made aware of the statement. Once the owner is aware of the statement and does not remove it (if that is within his power and is not overly difficult or expensive to remove) then the inference is that the owner has consented to the statement’s publication. However, the Court distinguished these cases – collectively referred to as the “notice board cases” – from those involving the defence of innocent dissemination, and so found they were not applicable to the present case. In notice board and graffiti cases the owners of the property had not participated in any way in the publication of the libel and could only be considered to be publishers once they had been made aware of the defamatory statements and had not taken any action to remove them. Conversely, in innocent dissemination cases, as only publishers (albeit subordinate publishers) are able to use the innocent dissemination defence, it is accepted that the defendant is a publisher even before there is knowledge of the statement. This has an impact on the onus: in the notice board and graffiti cases the onus is on the plaintiff to prove that the defendant was a publisher; in innocent dissemination cases the onus is on the defendant to prove that the publication was innocent dissemination. In addition, while most of the notice board and graffiti cases involved trespassers, internet platform providers actively encourage and facilitate users’ posts on their forums.

Accordingly, the Court held that Fevaworks were “plainly participants in the publication of posting by the forum’s users and in that sense they were publishers from the outset” [para. 52]. Therefore, the only matter to be determined was whether Fevaworks was a first or main or subordinate publisher and, so, whether the innocent dissemination defence was available to it.

The Court remarked that in answering the question of whether Fevaworks was a primary or subordinate publisher “it is necessary to consider the nature of publication on the internet” [para. 55]. The Court highlighted that the defence of innocent dissemination “was developed in the era of mass communications in the print medium” with persons such as booksellers, librarians and newsagents being relieved of liability for the dissemination of libel of which they could not have been expected to know [para. 56]. With print media, the first or main publishers “have or can readily acquire full knowledge of the publication’s content before its release”, and so are denied the use of the defence [para. 56]. The model of print communications was described by the Court as the “one-to-many” model where one entity has control over the publication to many people. Modern internet-based communications, on the other hand, are part of the “many-to-many” model of publication as it involves communications made by many people to many other people using internet intermediaries. The Court referred to a paper by Professor Jack M. Balkin, at Yale Law School, that said that “intermediaries are conduits for other people’s speech and a key element of their business model is widespread, democratised, access to media because the business model depends on user-generated content.” [para. 59]. The Court classified Fevaworks as part of the “class of the ‘new intermediaries’” [para. 60].

In identifying the nature of a first or main publisher, the Court referred to the U.K. Bunt v. Tilley [2007] 1 WLR 1243 case, and stated that “if a defendant knew the content of a defamatory article and authorized or participated in its publication, that defendant would be liable as a main publisher” [para. 63]. This meant that the Court had to decide whether Fevaworks had authorised the publication of all the statements at issue in the present case. The Court distinguished this case from the facts in the Australian case of Thompson v. Australian Capital TV Ltd (1996) 186 CLR 574: unlike the Thompson case where a television channel explicitly pre-authorized the re-broadcast of multiple programmes from another channel, it was “inherently improbable that the provider of an internet platform facilitating many-to-many exchanges among users who may post as many as 5,000 messages per hour should intend to confer a sweeping, undifferentiated authorization on each of them to post whatever unlawful and objectionable postings they may choose to post” [para. 66]. The Court commented that the existence of forum rules and the roles of the administrators demonstrated that “the platform providers were not authorizing the publication of whatever forum users might choose to post” [para. 67]. In addition, the Court rejected the newspapers’ argument that encouraging high traffic to a forum amounted to prior authorization of any defamatory posts.

The newspapers had also argued that Fevaworks was not entitled to rely on the innocent dissemination defence because, “by a process of elimination, [Fevaworks] must have acted as the first or main publishers of the offending statements since no other possible candidates exist” [para. 67]. The newspapers submitted that the authors of the posts should not be considered publishers because if the Forum crashed between the writer posting the statements and anyone reading them then there would have been no publication and therefore no libel. If the authors were not relevant to the question of publication in this case then, the newspapers argued, Fevaworks had to have been the first or main publisher. However, the Court reiterated that “[i]t is clear law that internet material is published when and where it is accessed or downloaded in comprehensible form” [para. 68]. With reference to the Emmens case the Court stressed that the law of libel requires that the writers of the statement are regarded as the first publishers, and that entities which only disseminate libel must be regarded as subordinate publishers. Accordingly, the Court rejected the newspapers’ arguments, and so rejected the argument that Fevaworks had to be the primary publisher because there were no other alternatives.

The Court stated that there were two criteria in determining whether a defendant is a first or main publisher or merely a subordinate publisher: the “knowledge criterion” of whether a publisher has knowledge or can easily acquire knowledge of the content of the publication; and the “control criterion” of whether it “has a realistic ability to control publication of such content” [para. 76].

The Court referred to the Bunt, Vizetelly and Thompson cases and characterized the central question in determining the knowledge criterion as “whether the publisher knew or can properly be expected to have known the content of the article being published” [para. 84]. This need not be knowledge of every word, but the publisher needs to have known or reasonably been expected to have known the “gist or substantive content” of the article [para. 84].

The Court explained that the control criteria “reflects the law’s policy of mitigating the strict publication rule in relation to a person who plays a less important role in the publication process” [para. 85], and referred to the Crookes case which had held that creating a hyperlink did not amount to publication as “the author who created the hyperlink did not control the secondary article’s content or publication” [para. 88]. The Court identified the links between the requirement of knowledge in the test to determine whether a publisher is a first or main or subordinate publisher and the requirement of an absence of knowledge in the the innocent dissemination defence, and highlighted that the defence is only available to subordinate publishers

The Court held that an internet discussion forum provider should not be treated as having knowledge of the substantive content of every post made on the forum, and so Fevaworks would not meet the knowledge criterion to be regarded as a first or main publisher. In addition, it found that, given the nature of the Forum as a “many-to-many” model, Fevaworks could not realistically prevent the posts’ dissemination. Accordingly, the Court held that Fevaworks had to be regarded as subordinate publishers. The defence of innocent dissemination was therefore available to Fevaworks, and the Court was required to determine whether Fevaworks had met the standards as required by the defence.

In order to succeed with the defence of innocent dissemination, Fevaworks had to demonstrate that it had not known – and could not reasonably have been expected to know – that the posts on their Forum contained defamatory content.

The defence turns on the “reasonableness” of the defendant’s conduct, and the Court rejected the formulation in the Vizetelly case that a defendant loses the defence of innocent dissemination from the moment he first learns of the defamatory content, characterizing it as “[running] against the grain of the common law defence” [para. 95]. It added, by referring to a comment in Metropolitan International Schools Ltd v. Designtechnica Corpn [2011] 1 WLR 1743, that it would not make sense for a subordinate publisher to be liable for the period between when it was notified about the defamatory content and when the content was removed. As the defence itself is premised on the concept of “reasonableness”, the Court held that “the same standard of reasonableness should be applied in a situation of acquired knowledge” and so the defence is available to a defendant who, after learning of defamatory content, took reasonable measures to remove that content [para. 97]. The Court noted that the standard of reasonableness is context-dependent but recognized that reasonable care may require additional monitoring of an internet forum if “previous experience indicates a propensity or special risk of defamatory postings” [para. 91].

In applying the principles of the defence to the present case, the Court distinguished between the publication of the statements before Fevaworks became aware of their content and their publication once Fevaworks had acquired that knowledge.

In respect of the period before Fevaworks became aware of the statements, the Court referred to the high volume of traffic on the Forum and noted that the lower courts had recognised the “impracticability of automated or manual screening of postings before they appeared on the forum” [para. 101]. It agreed with the lower court that Fevaworks “had no realistic means of acquiring such knowledge or of exercising editorial control over the content before it was posted” [para. 102]. The Court also noted that the fact that Fevaworks had discovered the 2009 statements on their own demonstrated that once they had been alerted to the fact that there was a likelihood of potentially defamatory statements related to the newspapers they were more proactive in monitoring the Forum. Accordingly, the Court held that Fevaworks “had made good the defence in respect of the period before the offending material came to their notice” [para. 102].

The Court also agreed with the lower courts that Fevaworks’s actions after they were alerted to the defamatory posts were reasonable, and held that the “promptness with which the respondents took down the offending postings justifies the finding that they acted properly in accordance with [the reasonableness] standard” [para. 103]. Accordingly, the Court also found that the defence was applicable to Fevaworks’s conduct after they acquired knowledge of the statements.

The Court concluded with an assessment of the arguments made at the hearing on the right to freedom of expression. It recognized the need to balance the rights to freedom of expression and to have one’s reputation protected against defamation, and accepted the newspapers’ characterization that the authors of the posts did not have their right to freedom of expression infringed because the right does not extend to the expression of libelous statements. However, with reference to the Dow Jones case, the Court stressed that there was still a need to balance the two rights in the present case because the freedom of expression interest was not merely the authors, but extended to society’s interest in freedom of expression as well. The Court also acknowledged that “defamation circulated on the internet may do enormous damage to a person’s reputation” [para. 108] while also recognizing the quote from Dow Jones that the internet “is a medium that overwhelmingly benefits humanity, advancing as it does the human right of access to information and to free expression” [para. 110]. The Court stressed the importance of acknowledging both these “competing social interests” [para. 111]. The Court highlighted the value of communications on discussion forums, and stated that internet forum providers should not be hindered “by the imposition of unrealistic or overly strict standards which would make commercial operation impossible or introduce a chilling effect discouraging free and open exchanges” [para. 111]. While acknowledging that the content of many of the Forum’s posts was of limited social value, the Court noted that freedom of expression must not be devalued because it permits such low grade exchanges” and that Forums such as Fevaworks’s have an “undeniable value to society in the political, scientific, social, cultural and other spheres” [para. 112].

In conclusion, the Court dismissed the newspapers’ appeals. It held that Fevaworks had not authorized the publication of the statements and had not known the content of the statements and “did not realistically have the ability or opportunity to prevent their publication” and so were not the first or main publishers. The Court held that, as subordinate publishers, Fevaworks had satisfied the requirements of the innocent dissemination defence before and after they became aware of the content of the posts [para. 113].

 


Decision Direction

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Decision Direction indicates whether the decision expands or contracts expression based on an analysis of the case.

Expands Expression

In finding that an internet service provider which took reasonable action after being alerted to defamatory posts on its discussion forum was not liable for defamation, the Hong Kong Court of Final Appeal limited the liability of internet intermediaries. The Court affirmed that the right to freedom of expression is a right that belongs to society as a whole rather than just the author of an expression and cautioned against imposing strict standards on internet forum providers which would discourage free exchanges on the forums.

Global Perspective

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Global Perspective demonstrates how the court’s decision was influenced by standards from one or many regions.

Table of Authorities

Other national standards, law or jurisprudence

  • Austl., Webb v. Bloch (1928), 41 CLR 331.
  • Austl., Dow Jones & Co. Inc. v. Gutnick, [2002] HCA 56
  • Can., Crookes v. Newton, [2011] S.C.R. 269
  • U.K., Emmens v Pottle (1885) 16 QBD 354
  • Can., Vizetelly v. Mudie’s Select Library, Ltd., [1900] 2 Q.B. 170
  • U.K., Bryne v. Deane [1937] 1 KB 818.
  • U.S., Hellar v. Bianco, 111 Cal.App.2d 424 (1952) 244 P.2d 757.
  • Austl., Urbanchich v. Drummoyne Municipal Council (1991) Aust Torts Reports 81-127.
  • U.K., Bunt v. Tilley, [2006] EWHC (QB) 407
  • Austl., Thompson v. Australian Capital Television Pty ltd, [1996] HCA 38
  • U.K., Metropolitan International Schools Ltd v. Designtechnica Corpn [2011] 1 WLR 1743
  • U.K., Godfrey v. Dermon Internet Ltd., [2001] Q.B. 201
  • S. Afr., Tsichlas v. Touchline Media Pty Ltd 2004 (2) SA 112
  • U.K. Tamiz v. Google Inc., [2013] EWCA 68
  • N.Z., Wishart v. Murray, 2013 NZHC 540
  • Austl., Kaplan v. Go Daddy Group, [2005] NSWSC 636.

Case Significance

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The decision establishes a binding or persuasive precedent within its jurisdiction.

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