23 December, 2012

 

Legal News & Analysis – Asia Pacific – Hong Kong – Dispute Resolution

 

This Court of Final Appeal decision of Campbell Richard Blakeney-Williams & Ors v Cathay Pacific Airways Ltd & Ors, FACV 13/2011, 26 September 2012, involved the dismissal from employment of a number of airline pilots and their claims against Cathay Pacific for damages for breach of contract and fiduciary duty and defamation. This article examines the latter claim.

 

The dispute concerned Cathay’s approach to pilots’ rostering practices and contract entitlement, which in the view of the Hong Kong Aircrew Officers Association (“the Union“) imposed unreasonably long flying hours on and granted unreasonably short breaks to pilots. The dispute escalated and Union members adopted a “contract compliance” regime, involving rigid adherence to the pilots’ employment contracts, which seriously disrupted Cathay’s business. The Union also threatened industrial action, which led to Cathay setting up an internal review team to identify pilots who had “an attendance problem”, “had a warning letter on file in connection with a disciplinary matter” or were considered “unhelpful and uncooperative”. 49 pilots (“the 49ers”) were selected for dismissal. Following their dismissal, public statements were issued by Cathay, including a press statement, which referred to the dismissals and described the pilots as employees“who we feel cannot be relied upon to act in the best interests of the company in future” and in whom “we have lost confidence” and that “Hong Kong was tired of being “held to ransom”. Cathay also publically stated that it would not allow the 49ers to disrupt the airline, its employees and customers or reputation of Hong Kong and could not allow them to let much larger numbers of flight crews, who were showing the total professionalism Cathay required, to suffer.

 

In 2006, the majority of the 49ers commenced legal proceedings against Cathay. The Court of First Instance held that Cathay had defamed each Plaintiff by the statements (referred to above) and awarded each of them general damages of HK$3million plus aggravated damages of HK$300,000.

Cathay appealed to the Court of Appeal who upheld the Court of First Instance’s finding on liability, but reduced general damages to HK$700,000 for each Plaintiff and overturned the awards for aggravated damages.

The Plaintiffs appealed to the Court of Final Appeal in respect of general damages and for reinstatement of the award of aggravated damages. The Court of Final Appeal dismissed the Plaintiffs’ appeals, holding as follows:

 

  1. Only if the appellate court decides that the trial judge adopted a wrong reason which vitiates his award, or that he went outside the permissible range of general damages will it go on to consider for itself what damages to award. This issue was also fully considered in the Oriental Daily Publisher case above.
  2. The Court of Appeal was right to conclude that the award of HK$3 million to each Plaintiff could not stand. The Court of First Instance had wrongly compared the damage caused to each Plaintiff to the damage suffered by the Plaintiff in another case, involving a solicitor awarded HK$3 million for wholly inaccurate reports that she had absconded with clients’ funds. The Court of Appeal had been correct in finding that the libel in that case was inherently far more serious than the libel in this case. By contrast, the statements in this case did not question the Plaintiffs’ character or their competence as pilots: they amounted, as the Court of Appeal said, to implied allegations of disloyalty, disruptiveness and being poor employees. Further, the great majority of readers of the statements would have appreciated that they had been made by an employer in the context of a long-running and bitter dispute.
  3. Although an appellate court should be slow to interfere with a trial judge’s award of general damages for defamation, given that the damages awarded in this case were arrived at on a wrong basis, and were anyway plainly too high, the Court of Appeal was justified in stepping in and assessing damages themselves and the HK$700,000 awarded by the Court of Appeal was plainly within permissible bounds. Although understandable that some of the Plaintiffs may have felt that this was on the low side, it was not a figure with which an appellate court should interfere.
  4. Having rejected the award of HK$3 million and before deciding on the figure of HK$700,000, the Court of Appeal had made reference to the level of general damages in personal injury cases and said that having regard to such, the award of HK$3 million in this case was manifestly excessive. There was nothing wrong with the court referring to the level of personal injury damages, at least as a sort of cross-check, as it was offensive to public opinion that a defamation plaintiff should recover damages for injury to reputation greater, perhaps by a significant factor, than if that same plaintiff had been rendered a helpless cripple.
  5. The Court of Appeal was right in finding the Court of First Instance wrong in awarding aggravated damages. As the Court of Appeal had said, although a plea of justification was advanced, it was advanced in respect of a meaning other than the one for which the court ultimately held Cathay liable. At no stage was there an attempt to justify the wider meaning for which Cathay was held liable. The defence failed because the Judge rejected the Defendants’ case on interpretation. However, that case, although rejected by the Court of First Instance and Court of Appeal, was not cynical or hopeless, even if some may regard it as weak. It was wrong in principle to award aggravated damages to a plaintiff in a defamation case, solely because the defendant had decided in good faith to raise a defence of justification, which was then run in a reasonable way. The fact that the defence fails, is not enough, on its own, to bring aggravated damages into play. An unsuccessful plea of justification is per se evidence of malice and a ground for increasing damages, but only if the plea was completely unsupportable in the circumstances.
  6. So far as the absence of an apology was concerned, it could not take matters any further in a case such as this, where the Defendant had decided in good faith to raise a defence of justification, which was then run in a reasonable way. After all, it was scarcely consistent for a defendant to apologise if he was running a defence of justification: it would positively undermine the defence.
  7. Although, the statements had remained on Cathay’s website for eight years, (i) they were not easily accessible in relation to any particular Plaintiff; (ii) there was no suggestion that the statements were deliberately left on the website; (iii) as soon as the Plaintiffs asked for the statements to be removed, they were; (iv) it was not put to the Defendants’ witnesses that there was any malice in the maintenance of the statements on the website; (v) there was no evidence that damage of any nature, over and above that for which general damages were sought, had been caused to the Plaintiffs by the retention of the statements on the website. Accordingly, the award for aggravated damages would not be reinstated.

 

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