Lee v Lee
[2018] NZHC 3136
•30 November 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2015-404-001648
[2018] NZHC 3136
BETWEEN HYUNG SOO LEE
Plaintiff
AND
YONGWOO LEE & ANOR
Defendant
Hearing: 09 July 2018 - 19 July 2019 Appearances:
T C Goatley & J Cole for Plaintiff J Strauss for Defendants
Judgment:
30 November 2018
JUDGMENT OF VAN BOHEMEN J
This judgment was delivered by me on 30 November 2018 at 4pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors:
Bell Gully, Auckland Northern Legal, Albany
Counsel:
J Strauss, Auckland
LEE v LEE & ANOR [2018] NZHC 3136 [30 November 2018]
TABLE OF CONTENTS
[Para No.]
Introduction [1]
Matters not in dispute [7]
The article [10]
The plaintiff’s contentions [15]
The defendants’ contentions [17]
Relevant factual background [19]
Formation of Foundation Committee and identification of Community Centre building 22
Efforts to cover funding shortfall 26
The 27 March 2013 agreement 30
Commitment to further fundraising efforts 31Discussions regarding Cultural Centre governance and candidates’ deposits 34
Deteriorating relationships and ensuing fallout 39Legal proceedings 48
Department of Internal Affairs warning notice 53
Was Mr Henry Lee defamed in the Seed of Dispute article? [57]
Were the admitted meanings true? [66]
Are the admitted imputations true or the logical inference to be drawn, on the balance of probabilities, from the established facts? [73]
Connotations of “yi-myin-gye-yak” 76
Were the imputations true or not materially different from the truth? 84
Mr Henry Lee and the other parties to the 27 March 2013 agreement planned to hide the agreement from the public 85
Mr Henry Lee a party to a plan to engage in deception 102
Mr Henry Lee had not acted openly, honestly or honourably 105
The existence of the 27 March 2013 agreement and by implication the behaviour of Mr Henry Lee as a party to it were “shocking” 106
In trying to “privatise the Centre”, Mr Henry Lee and Mr Hong were attempting to usurp the authority of the Korean Society and take personal control of the
Cultural Centre 107
Mr Henry Lee, together with Mr Hong, sought to control the BOD so as to avoid paying money they owed to Mr Kim 111
Mr Henry Lee got involved in a “muddy fight” over the validity of the dismissal of the BOD to try to avoid paying money he owned to Mr Kim 114
The reason why Mr Henry Lee hid the 27 March 2013 agreement was to avoid having to pay any money 118
When entering into the 27 March agreement to share the burden of the funding, Mr Henry Lee had no intention of actually paying any money 120
If Mr Henry Lee had to pay any money, then his plan to avoid paying money would have gone wrong 125
Mr Henry Lee was pursuing his own personal ambitions rather than the interests of the Korean community 128
Mr Henry Lee was portraying his actions as if they were for the benefit of the Korean community and the Cultural Centre, when in fact he was engaging in a struggle over money in order to pursue his own personal ambitions 133Mr Henry Lee is a hypocrite 135
By embellishing the true position, Mr Henry Lee was misleading the Korean community 136
Have the defendants proved that the publication taken as a whole was in substance true, or was in substance not materially different from the truth?
[138]
Honest opinion [139]
Genuine opinion of Mr Steve Lee and the Sunday Times 147
Nature of article 150
Were the imputations, in their context, expressions of genuine opinion? [152] Mr Henry Lee and the other parties to the 27 March 2013 agreement planned to hide the agreement from the public 152
Mr Henry Lee was a party to a plan to engage in deception 154
Mr Henry Lee had not acted openly, honestly or honourably 155
The existence of the 27 March 2013 agreement and by implication the behaviour of Mr Henry Lee as a party to it were “shocking” 156
Mr Henry Lee, together with Mr Hong, sought to control the BOD so as to avoid paying money they owed to Mr Kim 157
Mr Henry Lee got involved in a “muddy fight” over the validity of the dismissal of the BOD to try to avoid paying money he owed to Mr Kim 158
The reason why Mr Henry Lee hid the 27 March 2013 agreement was to avoid having to pay any money 160
When entering into the 27 March agreement to share the burden of the funding, Mr Henry Lee had no intention of actually paying any money 161If Mr Henry Lee had to pay any money, then his plan to avoid paying money would have gone wrong 162
Mr Henry Lee was pursuing his own personal ambitions rather than the interests of the Korean community 163
Mr Henry Lee was portraying his actions as if they were for the benefit of the Korean community and the Cultural Centre, when in fact he was engaging in a struggle over money in order to pursue his own personal ambitions 164Mr Henry Lee is a hypocrite 165
By embellishing the true position, Mr Henry Lee was misleading the Korean community 166
Result on defences of truth and honest opinion [167]
Public interest communication [169]
The elements of the new defence of public interest communication 175
Was the article of public interest? 180
Was publication of the article responsible? 183 Seriousness of allegations 183 Urgency of publication 184 Reliability of any source 185 Comment sought from the plaintiff 186 Tone of article 188 Inclusion of unnecessary defamatory statements 189 Other relevant considerations 190 Conclusion on whether communication was responsible 191 Finding on defamation
[198]
Damages
[199]
Claim for aggravated damages 204 Result
[207]
Costs
[208]
Appendix
Introduction
[1] The plaintiff, Hyung Soo Lee, known in New Zealand as Henry Lee, has brought a defamation proceeding against Yong Woo Lee, known in New Zealand as Steve Lee, and a weekly Korean language newspaper, the New Zealand Sunday Times Ltd (Sunday Times). The Sunday Times is owned, written and edited by Mr Steve Lee. Mr Henry Lee seeks damages for an article written by Mr Steve Lee and published by the Sunday Times on 13 March 2015.
[2] There are a number of unusual aspects about this proceeding. First, it is a case conducted in English about an article written in Korean for a Korean speaking audience. That raises a question about whether an English translation of an article in Korean can adequately capture the meaning of the original and its significance to the intended audience. Furthermore, Mr Henry Lee, who is not confident in English, gave his evidence in Korean through an interpreter, as did Mr Steve Lee and a number of other witnesses. A number of questions arose over the accuracy of the interpretation into Korean of questions put to witnesses and the interpretation of their answers back into English.
[3] However, those questions and difficulties are ameliorated to an extent by the second unusual aspect of the case, which is that is the parties have agreed not only on the appropriate English translation of the article but also on the meanings of the relevant passages in the article. That is, the defendants have admitted all of the 15 meanings pleaded by Mr Henry Lee, even though they deny the article and the admitted meanings are defamatory of Mr Henry Lee. On the other hand, despite the agreed translation, there was disagreement over the connotations of one key phrase in the headline and in the body of the article.
[4] The third unusual aspect of the case is that between the close of the hearing and the preparation of my judgment, the Court of Appeal handed down its decision in Durie v Gardiner1 in which the Court recognised the new defence of public interest communication that is not confined to parliamentary or political issues but extends to matters of significant public concern. Given the possible relevance of that decision to
1 Durie v Gardiner [2018] NZCA 278, [2018] 3 NZLR 131
the current proceeding, I offered the parties the opportunity to make submissions on the applicability of Durie v Gardiner and, if they wished, an opportunity to be heard.
[5] Both Mr Strauss for the defendants and Ms Goatley for Mr Henry Lee filed further submissions. Neither requested a further opportunity to be heard.
[6] Mr Strauss seeks leave to amend the defendants’ pleadings to align with the new defence by renaming the defendants’ third affirmative defence of qualified privilege as public interest communication. I take this to mean, as did Ms Goatley who does not object, that the defendants no longer rely on the defence of qualified privilege but instead rely on the defence of public interest communication. I grant leave accordingly. My judgment proceeds on the basis that the defendants’ affirmative defences are truth, honest opinion and public interest communication.
Matters not in dispute
[7] It is common ground that Mr Steve Lee wrote the article and that it was published by the Sunday Times. The Sunday Times is targeted at the Korean community in New Zealand. It has a print run of 3,000 copies and is also available on-line. A number of witnesses in the hearing gave evidence that they read the article shortly after it was published.
[8] It is also common ground that the article concerned Mr Henry Lee, as well as a number of others, and that Mr Steve Lee did not seek Mr Henry Lee’s comment on the subject matter of the article before the article was published.
[9]The defendants have not retracted or apologised for the article.
The article
[10] The article concerned the purchase by the Korean Society of Auckland Inc (Korean Society) of a building to be known as the Korean Cultural Community Centre (Cultural Centre) and Mr Henry Lee’s involvement in the fundraising arrangements for that purchase and in associated developments within the Korean Society.
[11] The fundraising arrangements for the purchase of the Cultural Centre were overseen by a Foundation Committee established by the Korean Society. Young Pyo Hong (Mr Hong), the then President of the Korean Society, and Mr Henry Lee were co-chairs of the Foundation Committee. The other Committee member was Sung Hyuk Kim (Mr Kim), Vice President of the Korean Society who succeeded Mr Hong as President of the Society. As the date of settlement of the purchase approached, the three committee members recognised there was a shortfall in the funding and took steps to address that situation. At the time, it was understood that the amount of the shortfall was $423,000.
[12] Subsequently, there was a serious falling out among the Foundation Committee members over the implementation of the arrangements for meeting the shortfall and on governance arrangements for the Cultural Centre. That falling out was played out publicly in statements the Committee members released to Korean language news media and in articles by the Korean media, including articles written and published by the defendants. Various legal proceedings were commenced. There was also an investigation by the Department of Internal Affairs into aspects of the Korean Society’s affairs, including the arrangements agreed by Mr Kim, Mr Hong and Mr Henry Lee to cover the funding shortfall. The Department’s report was dated 3 March 2015, 10 days before publication on 13 March 2015 of the article that is the basis of this proceeding.
[13] The article was entitled “Seed of Dispute, Behind Contract of Sung Hyuk Kim, Young Pyo Hong and Hyung Soo Lee”. The title included the Korean term “yi-myin- gye-yak” which both sets of parties agreed could be translated as “behind contract or “hidden contract”. As I discuss later, however, despite their agreement on the translation of the term, Mr Henry Lee and the defendants disagreed on the connotations that attach to the term.
[14] The full text of agreed English translation of the article is set out in the Appendix to this judgment. In summary, the article said that:2
2 In the interests of comprehension, the summary makes minor adjustments to the language of the translation.
(a)Before the due date for completing the purchase of the Cultural Centre, Mr Kong and Mr Henry Lee, the co-chairs of Foundation Committee for the Cultural Centre, announced that the purchase had been completed because Mr Kim had paid the short fall of $423,000.
(b)Six months after moving into the Cultural Centre, Mr Kim (now President of the Society) announced “the shocking fact” that there had been a “behind contract” among the Foundation Committee members. Under the contract, Mr Kim would pay $423,000 on 28 March 2013 and if that amount was not repaid within two months, Mr Hong and Mr Henry Lee would repay one third each of the shortfall to Mr Kim.
(c)If the fundraising for the Centre had been successful and the borrowed money repaid, the behind contract would never have been revealed to the public.
(d)The difference between the amount paid by Mr Kim and the amount received (from fundraising) was $330,000 so Mr Hong and Mr Henry Lee were under an obligation to repay Mr Kim $110,000.
(e)Immediately before the announcement, Mr Kim disclosed that he had been notified by the Chairperson of the Board of Directors (BOD) for the Cultural Centre, Mr Henry Lee, that the BOD would turn themselves into a superior body to the Korean Society and would control the President.
(f)Mr Kim, who thought that persons who had not paid back the money were trying to take control of the Centre, announced the dissolution of the BOD by declaring that the General Meeting of the Korean Society was null and void because of the lack of a quorum.
(g)If Mr Hong and Mr Henry Lee controlled the BOD, which had “the mighty power”, they could decide how to deal with the $150,000 granted by the Overseas Korean Foundation and whether the one-third
share of the amount owing to Mr Kim should be repaid or not. In other words, the repayment of the sum owed to Mr Kim could be delayed if the relationship between them soured, even if the Centre had sufficient funds.
(h)When Mr Kim, Mr Hong and Mr Lee got it into their heads that they could change the arrangements agreed in the behind contract according to who was in control of the organisation, they started a “muddy fight” over the legality of the dissolution of the BOD.
(i)A series of embarrassing and shameful events followed – a disturbance at the General Meeting, the involvement of the police and defamation proceedings. An audit of the Korean Society found that the Society’s rules had been violated by the borrowing of $423,000 without a resolution of the General Meeting.
(j)A paragraph in quotation marks said words to the effect that “if we hide the contract and create ‘an atmosphere’ among the Korean community, we do not need to pay the money”.
(k)The fight over the money was triggered by personal desires of fame and honour; the behind contract should not be embellished as if it were for the Korean community or for the Cultural Centre. These three people need to settle these matters without dragging the Korean community into their fight.
The plaintiff’s contentions
[15] In accordance with s 37 of the Defamation Act 1992, Mr Henry Lee pleaded that the article had 15 specific defamatory meanings, which were admitted by the defendants. These meanings are set out at [60].
[16] Ms Goatley submits that all of the admitted meanings are plainly defamatory on their face. Ms Goatley further submits that the defamation is made out and
Mr Henry Lee’s claims must succeed because the defendants cannot establish an affirmative defence to the claims.
The defendants’ contentions
[17] The defendants contend that the article was an editorial or opinion piece, that it was not defamatory and that all of the admitted meanings are either true or are honest opinion based on inferences available from the language of the article taken as a whole and drawing on facts stated in the article or generally known at the time of publication. In the alternative, the defendants submit that the article and the meanings to be taken from it are covered by the defence of public interest communication.
[18] Section 40 of the Defamation Act 1992 requires a defendant intending to rely on a defence of truth and on a defence of honest opinion to plead each of those defences separately. In a technical sense, the defendants have complied with that requirement in that they have pleaded each of the defences separately in the statement of defence. However, by effectively pleading truth and honest opinion to all of the admitted imputations and leaving it to the Court to decide whether any or all of the identified imputations were true or were honest opinion, it is doubtful that they have complied with the intent of s 40. In any event, this approach has made the Court’s task considerably more difficult and this judgment considerably longer than might otherwise have been the case.
Relevant factual background
[19] Because the defendants have pleaded truth to all the agreed imputations it is necessary to record the background to the article in some detail.
[20] Mr Henry Lee was born and grew up in the Republic of Korea. He and his family emigrated to New Zealand in 1994. He operates a health food business through a company, Evergreen Life Ltd (Evergreen), based in Albany, Auckland. Mr Henry Lee has been an active member of the Korean community in Auckland and, since 2012 at least, an active member of the Korean Society of Auckland Inc.
[21] Mr Steve Lee was also born in the Republic of Korea where he was a journalist for 10 years before emigrating to New Zealand in 2001. Upon arrival in New Zealand, Mr Steve Lee established the Sunday Times as a weekly Korean newspaper publishing material from Korea and articles on issues that affect the Korean community in the North Island but particularly in Auckland.
Formation of Foundation Committee and identification of Community Centre building
[22] In August 2012, Mr Henry Lee was appointed a member and co-chair of the Foundation Committee formed by the Korean Society to identify and purchase the Community Centre building. As already noted, the other members of the Committee were Mr Hong and Mr Kim.
[23] The announcement of the formation of the Foundation Committee showed the amounts that Committee members and others had agreed to donate to the fundraising effort which, in Mr Henry Lee’s case, was $20,000 to be given through his company, Evergreen. The announcement also said Mr Hong would contribute $20,000 and Mr Kim $10,000.
[24] In late 2012, the Society identified the building – at 5 Argus Place, Glenfield, on Auckland’s North Shore – it wanted to purchase for the Community Centre and entered into an agreement for the building’s sale and purchase. The purchase price was $1,500,000. Settlement date was 29 March 2013.
[25] The Society’s decision to purchase the building was made on the understanding that half of the purchase price or $750,000 would be met by fundraising. If the fundraising target was met, a grant of $150,000 would also be provided by the Overseas Korean Foundation, a Korean government agency.
Efforts to cover funding shortfall
[26] In March 2013, it became apparent that the fundraising target would not be met by the settlement date. At the time, it was understood that the amount of the fundraising shortfall was $423,000. There are important differences in the accounts of Mr Henry Lee and Mr Kim about what happened next.
[27] Mr Henry Lee’s account, as set out in his evidence in chief, was that Mr Kim took it upon himself to meet the shortfall, which he did in two payments made on 25 and 26 March 2013, and Mr Kim then had a discussion with Mr Henry Lee and Mr Hong on 27 March 2017 in which the three signed the document referred to in the article as the “behind contract”. According to Mr Henry Lee, the agreement made by himself, Mr Kim and Mr Hong on 27 March 2013 was that Mr Kim’s advance of
$423,000 was to be treated as a loan to the Korean Society which the Society would be required to repay. The fundraising would continue and after two months there would be an accounting to determine the remaining shortfall. At that point, he and Mr Hong would look to share the remaining shortfall equally with Mr Kim. That is how he interpreted the document of 27 March 2013 which he considered to be equivalent to a memorandum of understanding and not a legally binding document – although he accepted, albeit with some reluctance, that the High Court took a different view of the document in subsequent proceedings.3 For the purposes of this judgment, I refer to the document as the 27 March 2013 agreement.
[28] Mr Kim’s evidence was that he, Mr Henry Lee and Mr Hong discussed what to do about the shortfall before he took any steps to pay the shortfall. He says the three men agreed on 20 March 2013 that as the leaders of the Foundation Committee they were responsible for the success of the venture and should jointly assume responsibility for the shortfall. However, because Mr Henry Lee and Mr Hong did not have funds available, Mr Kim agreed to meet the shortfall from money he had invested for his and his wife’s retirement. He says he did so on the understanding that the three men would share equally in any shortfall once the fundraising effort had ended. Mr Kim says they were hopeful of raising the shortfall within two months but if it took longer than that he needed to protect his investment by ensuring he was paid interest and had security – which was why he asked Mr Hong and Mr Henry Lee to sign the 27 March 2013 agreement.
[29] Mr Kim’s account is more consistent with the content of the 27 March 2013 agreement that Mr Kim prepared and was accepted in a judgment entered by Faire J in a proceeding Mr Kim brought in 2014 for recovery of the amount then owing to
3 Kim v Lee [2015] NZHC 3237.
him by Mr Henry Lee.4 It is also consistent with the account Mr Henry Lee gave of the funding arrangements in a letter published in The Weekly Korea on 15 November 2013. However, it is also apparent from the history of events cited in Faire J’s judgment and from the Department of Internal Affairs inquiry that the Korean Society treated the advance by Mr Kim as a loan.
The 27 March 2013 agreement
[30] The key elements of the 27 March 2013 agreement were (after adjustments to an awkward English translation from the Korean original):
(a)Mr Kim had put up his money temporarily in order to cover the shortfall of $423,000;
(b)Mr Kim was to be reimbursed for this amount by continued fundraising for the Cultural Centre;
(c)No interest was to be paid on this amount for the first two months but after two months Mr Hong, Mr Lee and Mr Kim would be jointly responsible for interest;
(d)After two months, there would be a settling of accounts and Mr Hong, Mr Lee and Mr Kim would each be responsible on one-third basis for any fundraising shortfall;
(e)Mr Kim could mortgage the properties of Mr Hong and Mr Henry Lee at any time;
(f)If the purchase of the property for the Cultural Centre did not go through, Mr Kim could purchase the property at the original price;
(g)If Mr Kim purchased the property, a public meeting would be held to consider what should happen with the fundraising amount.
4 Kim v Lee [2015] NZHC 3237.
Commitment to further fundraising efforts
[31] After settlement of the purchase of the Cultural Centre on 29 March 2013, the Foundation Committee members took steps to encourage further donations from the Korean community.
[32] On 31 March 2013, the Committee published an announcement in the NZ Koreapost in which Mr Henry Lee, Mr Hong and Mr Kim said they had agreed to contribute additional funds to meet the shortfall in the fundraising effort. The announcement said that Mr Lee and Mr Hong would each contribute $20,000 and Mr Kim would contribute $30,000, and that together the three committee members had agreed to donate $120,000 to the fundraising effort. In the event, Mr Henry Lee and Mr Hong did not pay these additional contributions.
[33] On 3 April 2013, Mr Hong issued a statement purporting to be on behalf of himself and Mr Henry Lee which thanked the Korean community for their contributions to the Cultural Centre. Mr Henry Lee denies having any role in the preparation of the statement. The statement:
(a)Thanked Mr Kim for his “… advanced payment of $430,000 to make up the balance of the purchase price which was lacking to complete the purchase”;
(b)Said fundraising would end on 26 April 2013;
(c)Advised that as at 3 April 2013, the total contribution made by the Korean community was $610,089;
(d)Recalled that the contribution of the Overseas Korean Foundation was contingent on the Korean community funding half of the purchase price
– that is, $750,000 – and that this requirement had been satisfied with the help of Mr Kim’s advanced payment;
(e)Said that to reach the sum of $750,000 there still remained $148,191 to be paid by the community by 26 April 2013;
(f)Promised that if this was not achieved, the committee co-chairs and Mr Kim would pay the remaining amount;
(g)Declared to the Overseas Korean Foundation and the Korean community that the fundraising that would end on 26 April would “… share the advanced payment made by the three members of the committee in a unified effort to help the Korean community and the
$750,000 is established as the Korean Community Donation.”
Discussions regarding Cultural Centre governance and candidates’ deposits
[34] At around this time, there were also discussions going on within the Korean Society about the appropriate structure to own and manage the Cultural Centre. Mr Henry Lee’s position was that the Cultural Centre should be held in a trust under the management of a Board of Trustees (BOT). Mr Henry Lee says that an essential part of the basis on which he signed the 27 March 2013 agreement was that there should be a separation between the Korean Society and the management of the Cultural Centre. There were also discussions about the size of the deposit that should be required from candidates for election to the position of President of the Korean Society and about whether those deposits, proposed to be $60,000 per candidate, could be used to meet the funding shortfall for the purchase of the Cultural Centre. The size of that proposed deposit generated considerable controversy and was criticised in an article published in the Sunday Times on 11 April 2013.
[35] On 26 April 2013, Mr Hong put out a statement as President of the Korean Society in which he announced the background to a decision to reduce the “donation” of candidates for the Presidency to $5,000 and explained the “shortage” of the fund for the Cultural Centre and the transfer of responsibility for the shortage to the incoming 12th Committee of the Korean Society. The announcement said that because of the reduction in the “donation” to $5,000 it would be difficult to meet the “shortage amount of Korean residents” within the term of the 11th Committee (under his Presidency which was to end on 31 May 2013). The statement said that in the difficult economic situation, “it is difficult for the organising committee of 3 persons to additionally donate the shortage amount of Korean residents, which is over $110,000”
and that if the shortage amount was not “achieved” by the end of his term as President, it would become the responsibility of the incoming Committee.
[36] On 11 May 2013, Mr Kim was elected President of the Korean Society at a special general meeting, with his two-year term of office to commence from the annual general meeting held on 31 May 2013.
[37] On 31 May 2013, at its annual general meeting, the Korean Society amended its rules to provide for the establishment of a board of directors to manage the Cultural Centre. While this was not the BOT he had envisaged, Mr Henry Lee accepted appointment as chair of the BOD. Mr Kim and Mr Hong were also appointed to the BOD.
[38] On 5 September 2013, Mr Henry Lee issued a statement on behalf of the “Korean Community Centre Committee” in which he said the Korean Consulate in Auckland had notified the Committee that the Overseas Korean Foundation had approved funding of $150,000 towards the establishment of the Cultural Centre. However, the statement said that delivery of that amount was conditional on meeting the funding target of $750,000, that about $650,000 had been raised and that an extra
$100,000 was required. The statement also said the Committee planned to continue the Fundraising campaign and was waiting to receive financial statement, bank accounts and other management documents from the Korean Society.
Deteriorating relationships and ensuing fallout
[39] By this stage, relations between Mr Kim and Mr Henry Lee were deteriorating. Mr Henry Lee says that was because of Mr Kim’s refusal to provide an accounting of the funds raised for the Cultural Centre as envisaged in the document of 27 March 2013, and Mr Kim’s refusal to follow through on a commitment to put in place a BOT for the management of the Cultural Centre. Mr Kim says Mr Henry Lee had access to the Korean Society accounts which recorded the state of the fundraising but agrees there was a serious disagreement over the structure for the management of the Cultural Centre. He also says he was receiving representations from other members of the Korean Society questioning the validity of the rule changes and the appointment of
the BOD made at the annual general meeting on 31 May 2013 because the quorum requirements had not been complied with.
[40] On 5 November 2013, the police were called to the Cultural Centre when there was unruliness at a meeting of the BOD, apparently relating to the Korean Society accounts and involving the Society’s auditor, Kum Nam Cho (Mr Cho). These developments were the subject of an article in the Sunday Times on 8 November 2013.
[41] On 8 November 2013, Mr Kim issued a public notice to members of the Korean Society advising that the resolutions that had been adopted at the annual general meeting on 31 May 2013 were invalid because there had not been the requisite quorum of Society members present provided for in the Society’s rules.
[42] On 11 November 2013, Mr Henry Lee sent a letter to Mr Kim declaring the 27 March 2013 agreement invalid for breach of the condition that there should be separation between the management of the Cultural Centre and the Korean Society.
[43] On 15 November 2013, Mr Henry Lee published a letter in The Weekly Korea setting out his position on how he came to be a co-chair of the foundation committee, the background to the fundraising campaign and how the purchase of the Cultural Centre building was settled. The letter referred to agreements made by himself, Mr Hong and Mr Kim over funding and the management structure of the Cultural Centre and to the dispute over the BOD / BOT, and accused Mr Kim of amending the rules of the Korean Society to enable the establishment of the BOD and made various uncomplimentary remarks about Mr Kim.
[44] Mr Henry Lee’s letter referred to the content of the 27 March 2013 agreement but not the existence of a formal document. It stated that nearly a month before the settlement date for the Cultural Centre, when it was understood that donations had fallen “far too short to settle the purchase”, the three Foundation Committee members had met at Mr Hong’s office to discuss “plans to resolve the settlement issue”. They each agreed to make a further donation ($30,000 by Mr Kim; $20,000 each by Mr Hong and Mr Henry Lee). Mr Henry Lee agreed to this proposal on condition that a BOT be formed and managed separately from the Korean Society. “All three of us
agreed to this and should the settlement fund fall short, then the three of us would take mutual responsibility by paying the shortfall by “1/N”. (It is understood that “1/N” in this context meant “1/3” or one-third).
[45] On 18 November 2013, Mr Kim published a statement in the NZ Koreapost in which Mr Kim referred to the police call-out to the Cultural Centre on 5 November 2013 and gave his version of the background to those events. The statement referred to questions that had been raised about the validity of the establishment of the BOD in terms of the Korean Society’s rules. It also set out Mr Kim’s version of the funding arrangements for the Cultural Centre and referred specifically to the 27 March 2013 agreement signed by Mr Kim, Mr Hong and Mr Henry Lee in which they agreed to share equally in paying any shortfall. The statement referred to the payment of
$423,000 that Mr Kim had made “by proxy” and said that amount had been reduced to $333,000 following Mr Kim’s donation of $30,000 and a repayment to Mr Kim of
$60,000 by the Korean Society.
[46] On 29 November 2013, a special general meeting of the Korean Society annulled the amendments made to its rules in May 2013 and disestablished the BOD.
[47] On 16 December 2013, Mr Kim published a further statement about the funding arrangements for the Cultural Centre. The focus of the statement was on the need to meet the overall fundraising target of $750,000 in order to secure the $150,000 grant from the Overseas Korean Foundation. However, the statement also referred to the “pledge” made by Mr Kim, Mr Hong and Mr Henry Lee on 27 March 2013 to meet any shortfall and said that agreement was still valid and that Mr Kim would be collecting on the pledges made by Mr Henry Lee and Mr Hong.
Legal proceedings
[48] In December 2013, Mr Kim registered caveats against properties owned by Mr Henry Lee and Mr Hong. Mr Henry Lee and Mr Hong later issued notices seeking the removal of the caveats.
[49] In January 2014, the Department of Internal Affairs began inquiries into various matters relating to the affairs of the Korean Society, including the loan by
Mr Kim to the Korean Society for $423,000 to enable the Society to complete the purchase of the Cultural Centre.
[50] On 22 February 2014, police were called to a special general meeting of the Korean Society after Mr Cho had attempted to question Mr Kim about the Society’s accounts and Mr Kim had attempted to have Mr Cho removed from the meeting. In the ensuing ructions, Mr Hong was escorted from the premises and served with a trespass notice. (The trespass notice was later rescinded by the police).
[51] In March 2014, Mr Kim filed a proceeding against Mr Henry Lee to sustain the caveat against his property. In a judgment issued on 23 May 2014, the caveat was sustained but on condition that Mr Kim bring a proceeding to resolve his dispute with Mr Henry Lee over monies Mr Henry Lee was said to owe to Mr Kim.
[52] Various sets of proceedings were filed in 2014 on matters relating to the funding of the purchase of the Cultural Centre and associated governance issues:
(a)In April 2014, Mr Lee and Mr Cho commenced proceedings against Mr Kim and the Korean Society over the legality of the decisions made at the Special General meeting of the Korean Society in November 2013 and the expulsion of Mr Cho. These proceedings were subsequently discontinued.
(b)In June 2014, Mr Kim brought proceedings against Mr Henry Lee for the monies said to be owed under the 27 March 2013 agreement. On 15 December 2015, well after publication of the article that is the basis of the current proceeding, Faire J issued judgment in favour of Mr Kim for the sum of $41,157.00, being Mr Henry Lee’s one-third share of the amount owed to Mr Kim under the document after various adjustments had been made for sums donated by and credited to Mr Kim.5
5 Kim v Lee [2015] NZHC 3237.
(c)In September 2014, Mr Henry Lee and his company, Evergreen, commenced defamation proceedings against Mr Kim. This proceeding was subsequently discontinued.
Department of Internal Affairs warning notice
[53] On 3 March 2015, the Department of Internal Affairs wrote a letter to Mr Kim headed “Warning Notice – the Korean Society of Auckland Incorporated”. In its letter, the Department said it had completed its investigations into the Korean Society and that those investigations had revealed activities by the Korean Society and more specifically by its past and present Presidents, Mr Hong and Mr Kim, that were against the Society’s charitable purpose and in breach of the Society’s Rules. The letter said the Department had decided not to take formal action to remove the Society from the Charities Register but instead was issuing the formal warning notice under s 54 of the Charities Act 2005.
[54] The Department’s letter addressed three sets of issues: transactions regarding the promotion of the golfer, Lydia Ko; the “written agreement” Mr Kim entered into with Mr Henry Lee and Mr Hong on 27 March 2013 “… to loan the society a shortfall of $423,000 for the purchase of the Korean Community Centre”; and the various sets of proceedings noted above at [52]. Regarding the shortfall, the letter said that in making the loan Mr Kim had breached the Society’s Rules by not obtaining the approval of two-thirds of the members at a general meeting.
[55] The letter recorded that in the course of the Department’s discussions with Mr Kim, Mr Kim had offered three conflicting explanations of the loan arrangement and about how the loan was to be repaid by the Society and by Mr Henry Lee and Mr Hong and about the donation credits Mr Kim claimed. The Department’s letter recorded that under each of those explanations, Mr Kim would personally profit from the loan arrangement by amounts ranging between $52,562 to $69,934 once interest was added. The letter recorded that under all three explanations, Mr Kim was expecting to be repaid by the Korean Society as well as Mr Henry Lee and Mr Hong for what was essentially the same loan.
[56] On 13 March 2015, the Sunday Times published the “Seed of Dispute” article. In his evidence, Mr Steve Lee confirmed he received a copy of the Department’s report, which had been translated into Korean, before publishing the article. He also stated that the Korean community had been shocked and upset about the warning given by the Department and the possibility that the Korean Society could have been deregistered, and he had written the article after reflecting on what had happened to bring the community to that point.
Was Mr Henry Lee defamed in the Seed of Dispute article?
[57] The defendants have admitted the 15 meanings of the article pleaded by Mr Henry Lee but have denied that any of the statements is defamatory. The Court’s first task, therefore, is to decide whether the 15 admitted meanings are defamatory of Mr Henry Lee. In this regard, the focus of the Court’s inquiry is on the admitted meanings and not on the article itself.
[58] Ms Goatley includes in her written submissions the following summary of the law drawn from The Law of Torts in New Zealand,6 which Mr Strauss does not challenge and which I adopt:
There is no single definition of what is defamatory. Four in particular have achieved common currency:
(a)A statement which may tend to lower the plaintiff in the estimation of right-thinking members of society generally;7
(b)A false statement about a person to his or her discredit;8
(c)A publication without justification which is calculated to injure the reputation of another by exposing him or her to hatred, contempt or ridicule;9
(d)A statement about a person which tends to make others shun and avoid him or her.10
6 Stephen Todd and others, The Law of Torts in New Zealand, (7th ed, Thomson Reuters, Wellington, 2016) at [16.3.01].
7 Sim v Stretch [1936] 2 All ER 1237 (HL) at 1240 per Lord Atkin.
8 Youssoupoff v Metro-Goldwyn-Mayer Pictures Ltd (1934) 50 TLR 581 (CA) per Scrutton LJ.
9 Parmiter v Coupland (1840) 6 M & W 105, 151 All ER 340 at 109,342 per Parke B.
10 Youssoupoff v Metro-Goldwyn-Mayer Pictures Ltd (1934) 50 TLR 587 (CA) per Slesser LJ.
[59]As is said in The Law of Torts in New Zealand:11
While all these definitions have the same thrust, there are differences in emphasis between them. A reading of all four together gives a reasonable impression of the nature of the tort.
[60] As set out in the statement of claim and as slightly reformulated in Ms Goatley’s closing submissions, the admitted meanings are that:
(a)Mr Henry Lee was a party to an agreement relating to the funding of the Cultural Centre and the plaintiff and the other parties planned to hide the agreement from the public / Korean community;
(b)Mr Henry Lee was a party to a plan to deceive the public about the true nature of the fundraising arrangements for the Cultural Centre;
(c)The existence of the “behind contract”, and by implication the behaviour of Mr Henry Lee as a party to it, was “shocking”;
(d)Mr Henry Lee has not acted openly, honestly or honourably;
(e)In trying to “privatise the Centre”, Mr Henry Lee and Mr Hong were attempting to usurp the authority of the Korean Society and take personal control of the Cultural Centre;
(f)Mr Henry Lee, together with Mr Hong, sought to control the BOD so as to be able to avoid paying money they owed to Mr Kim;
(g)Mr Henry Lee got involved in a “muddy fight” over the validity of the dismissal of the BOD to try to avoid paying money he owned to Mr Kim;
11 Stephen Todd and others, The Law of Torts in New Zealand, (7th ed, Thomson Reuters, Wellington, 2016) at [16.3.01].
(h)Mr Henry Lee was a party to a plan to deceive members of the Korean community by pretending that things (i.e. fundraising) were going well and hiding the contract;
(i)The reason why Mr Henry Lee hid the contract was to avoid having to pay any money;
(j)When entering into the contract to share the burden of the funding, Mr Henry Lee had no intention of actually paying any money;
(k)If Mr Henry Lee had to pay any money, then his plan to avoid paying money would have gone wrong;
(l)Mr Henry Lee was pursuing his own personal ambitions rather than the interests of the Korean community;
(m)Mr Henry Lee was portraying his actions as if they were for the benefit of the Korean community and the Cultural Centre, when in fact he was engaging in a struggle over money in order to pursue his own personal ambitions;
(n)Mr Henry Lee is a hypocrite;
(o)By embellishing the true position, Mr Henry Lee was misleading the Korean community.
[61]Ms Goatley groups the 15 admitted meanings into five broad categories:
(a)Mr Henry Lee misled or deceived the public / Korean community (meanings (a), (b), (h), (o));
(b)Mr Henry Lee’s behaviour was not open, honest or honourable and was “shocking” (meanings (c), (d) and (e));
(c)Mr Henry Lee’s actions were intended to benefit himself and not the Korean community (meanings (c), (l) and (m));
(d)Mr Henry Lee’s intention or objective was to avoid paying money that he owed to Mr Kim (meanings (f), (g), (i), (j) and (k);
(e)Mr Henry Lee is a hypocrite (meaning (n).
[62] Mr Strauss does not challenge that grouping and I adopt it as a useful way of considering the 15 admitted meanings.
[63] Ms Goatley submits that these meanings are defamatory because they fall within the definitions cited at [58] in that:
(a)They may tend to lower Mr Henry Lee in the estimation of right- thinking members of society generally;
(b)They are false statements about Mr Henry Lee to his discredit;
(c)They are publications without justification which are calculated to injure Mr Henry Lee’s reputation by exposing him to hatred, contempt or ridicule;
(d)They will tend to make others shun and avoid Mr Henry Lee.
[64] I accept that the admitted meanings are defamatory in terms of the definitions in (a) and (d) in [58]. Whether or not the meanings are defamatory in terms of the definitions in (b) and (c) in [58] depends on whether the statements are false or made without justification. That is for consideration when assessing the pleaded affirmative defences. For the moment, however, I am satisfied that all of the admitted meanings are defamatory in the sense that statements that Mr Henry Lee sought to hide matters from the Korean community, misled or deceived the Korean community, was not honest or honourable in his conduct, was looking to benefit himself in actions taken on behalf of the Korean community, was looking to avoid paying money he owed to someone else and was a hypocrite are all statements that tend to lower Mr Henry Lee
in the estimation of the Korean community. In the context of this publication, published in Korean and aimed at the Korean community, the Korean community is the relevant society for assessing the fact and extent of the defamation.
[65] As Ms Goatley submits, there is no requirement for Mr Henry Lee to prove actual damage from the defamatory statements,12 although Mr Lee gave evidence as to the damage he says his reputation has suffered and to his loss of standing in the Korean community. While the defendants deny the article caused damage to Mr Henry Lee’s reputation and say that any such damage was caused by the conduct of Mr Henry Lee and others, I am satisfied that the admitted meanings in themselves were damaging to Mr Lee’s reputation and standing irrespective of his own actions and the actions of others.
Were the admitted meanings true?
[66]Section 8(3) of the Defamation Act provides:
(3)In proceedings for defamation, a defence of truth shall succeed if—
(a)the defendant proves that the imputations contained in the matter that is the subject of the proceedings were true, or not materially different from the truth; or
(b)where the proceedings are based on all or any of the matter contained in a publication, the defendant proves that the publication taken as a whole was in substance true, or was in substance not materially different from the truth.
[67] The Court of Appeal in Television New Zealand Ltd v Haines has determined that paragraphs (a) and (b) of s 8(3) provide alternative defences. Under paragraph (a), a defendant will avoid liability if it proves that the imputations pleaded were true or not materially different from the truth. Alternatively, under paragraph (b), a defendant will avoid liability if it proves that the publication taken as a whole was in substance true or was in substance not materially different from the truth. The Court of Appeal also held that the two different methods of proving truth must be pleaded separately.13
12 See English and Scottish Cooperative Properties Mortgage and Investment Society [1940] 1 KB 440 at 461 per Goddard LJ.
13 Television New Zealand Ltd v Haines [2006] 2 NZLR 433 (CA) at [46].
[68] The defendants’ pleadings do not accord with that direction by the Court of Appeal but, in effect, plead the two alternatives together. Paragraph 30 of the Amended Statement of Defence dated 27 February 2018 states:
The publication and the admitted imputations … are in substance true or not materially different from the truth.
[69] This rolled up approach to the defence of truth was continued in the opening and closing submissions for the defendants which assert that the article taken as a whole, including the admitted imputations, was in substance true, or was in substance not materially different from the truth. The defendants in their closing submissions also say that most of the imputations which the defendants have admitted are available inferences to be drawn from the contents of the article rather than the meaning of the words and that the defendants must prove the truth of the facts providing the basis for the inferences but do not have to prove the truth of the inferences.
[70] There are difficulties with that approach and those propositions. First, the approach does not accord with that directed in Television New Zealand Ltd v Haines. While I do not consider that fatal, to be consistent with that decision and the language of s 8(3) I must consider the pleaded defence separately against the two paragraphs in s 8(3). That is, I must first consider whether the defendants have proven that the 15 imputations pleaded by Mr Henry Lee and admitted by the defendants were true, or not materially different from the truth. I must then consider whether the defendants have proven that the article as a whole was in substance true or not materially different from the truth.
[71] Secondly, as part of this rolled up defence, Mr Strauss submits that the defence of truth can succeed if the defendants establish that the admitted imputations are available inferences to be drawn from established facts and that the defendants do not have to prove the truth of the imputations themselves. I accept that inferences are logical conclusions drawn from facts that have been reliably established. To that extent, I accept that to prove the truth of an inference it is sufficient to prove the facts from which the inference is drawn. But I do not accept that it is sufficient to establish the truth of an inference by showing that the inference is “available”.
[72] As Ms Goatley submitted, the law in New Zealand, as affirmed by the Court of Appeal in Broadcasting Corporation of New Zealand v Crush,14 and confirmed by the Court of Appeal in Television New Zealand Ltd v Haines and Simunovich Fisheries Ltd v Television New Zealand Ltd15 following the passage of the Defamation Act, is that in seeking to establish the defence of truth, a defendant cannot set up an alternative meaning from that pleaded by the plaintiff. Rather, a defendant can deny that the words used are capable of bearing the meanings alleged or it can prove that the meanings alleged are true or substantially true.16 It follows that where an imputation is an inference, to establish the truth of that imputation a defendant must satisfy the Court that the facts from which the inference is drawn are true or not materially different from the truth and that the inference as pleaded by the plaintiff is, on the balance of probabilities, the logical inference to be drawn from the established facts. That is, the defendants must satisfy the Court that the inference is more likely than any other inference to be drawn from those facts and not just that it is “available”.
Are the admitted imputations true or the logical inference to be drawn, on the balance of probabilities, from the established facts?
[73]Section 38 of the Defamation Act provides:
38 Particulars in defence of truth
In any proceedings for defamation, where the defendant alleges that, in so far as the matter that is the subject of the proceedings consists of statements of fact, it is true in substance and in fact, and, so far as it consists of an expression of opinion, it is honest opinion, the defendant shall give particulars specifying—
(a)the statements that the defendant alleges are statements of fact; and
(b)the facts and circumstances on which the defendant relies in support of the allegation that those statements are true.
[74] In paragraph 31 of their statement of defence, the defendants list, in 27 subparagraphs, the facts on which they rely to establish the trust of the admitted
14 Broadcasting Corporation of New Zealand v Crush [1988] 2 NZLR 234 (CA).
15 Television New Zealand Ltd v Haines [2006] 2 NZLR 433 (CA) at [55] – [59]; Simunovich Fisheries Ltd v Television New Zealand Ltd [2008] NZCA 350 at [51] – [52].
16 Television New Zealand Ltd v Haines [2006] 2 NZLR 433 (CA) at [54].
imputations. Those subparagraphs cover in summary form most but not all of the matters described in [22] – [52] above.
[75] In his submissions, Mr Strauss says that five of the admitted imputations are true and that the remaining 10 are either true or are honest opinion. Accordingly, for the purposes of determining the first affirmative defence of truth, the Court must assess whether, on the balance of probabilities, the defendants have established that each of the imputations is true or is the logical inference to be drawn from the established facts.
Connotations of “yi-myin-gye-yak”
[76] Before considering the individual imputations, it is useful to consider the meaning of the Korean term “yi-myin-gye-yak” used to describe the 27 March 2013 agreement in the headline to the article and in the body of the article. While it is not the function of the Court to decide the English meaning of a Korean term, I consider it necessary to establish whether the term has particular connotations because that may be relevant both to the veracity of the admitted imputations and to the issue of aggravated damages.
[77] As noted at [13], while both parties agreed the term could be translated as “behind contract or “hidden contract”, they disagreed on the connotations said to arise in the use of the term. Witnesses for Mr Henry Lee asserted that the term has very negative connotations in Korean of shamefulness and untoward secretiveness, whereas witnesses for the defendants asserted that, depending on the context, the term can simply mean undisclosed or hidden.
[78] Paul Wislang Lee (Mr Paul Lee), a professional translator called by Mr Henry Lee, said the term can have different meanings. It can be used neutrally, such as when concealing something from a third party. But he said that more often than not it is used with negative meanings including “dual contract”, behind contract”, “back-door deal”, “non-genuine agreement”, “under the table agreement”, “behind the scenes agreement” and “secret deal”.
[79] Mr Paul Lee’s views were supported by the evidence of Jung Hee Kim (Ms Kim), another professional translator called by Mr Henry Lee. She said the term “yi-myin-gye-yak” has a very negative meaning in Korean and it is a “distasteful word used to denote under-the-table agreements and other unsavoury arrangements”. Under cross examination, Ms Kim refused to accept that the term itself does not have any negative meaning and instead takes its meaning from its context.
[80] Hae-Gyeobng Shin (Ms Shin) a translator called by the defendants said it was not the function of a translator to speculate on which particular meaning of several possible meanings an author may have in mind nor to attribute a particular connotation to a word or phrase. In her view, the term “yi-myin-gye-yak” was best translated as “internal contract” because it was an agreement between three members of the same committee. She maintained this neutral and somewhat technical approach to the translation of the term under cross-examination.
[81] Unsurprisingly, Mr Henry Lee insisted that the term has very negative connotations. Mr Henry Lee said any suggestion that the 27 March 2013 agreement was a “yi-myin-gye-yak” was highly offensive and damaging to his reputation. His view was endorsed by Mr Cho.
[82] Mr Steve Lee acknowledged in cross examination that the term “yi-myin-gye- yak” can have negative connotations and can have meanings such as “back door deal” and “non-genuine agreement” but insisted that in his article there was no implication or comment that the 27 March 2013 agreement was illegal or immoral or wrong, and said the meaning of the term was a different matter from the existence of the agreement and whether or not it was disclosed.
[83] I was not persuaded by the evidence of Mr Steve Lee on this point nor by the evidence of Ms Shin. Both avoided engaging with the meaning of the term in the context in which it was used. While I do not have to decide what the term “yi-myin- gye-yak” means, I am satisfied that it has the negative connotations of shamefulness and untoward secretiveness asserted by Mr Paul Lee and Ms Kim and was intended to describe the 27 March 2013 agreement, particularly in the headline to the article, in pejorative and sensational terms.
Were the imputations true or not materially different from the truth?
[84] I consider each of the imputations in turn although, for convenience, I group some together.
Mr Henry Lee and the other parties to the 27 March 2013 agreement planned to hide the agreement from the public17
[85] This imputation arises from the headline to the article and in a paragraph in the body of the article where, as in the headline, “yi-myin-gye-yak” is used to describe the 27 March 2013 agreement.
[86] In addition to the difference in view over the interpretation of “yi-myin-gye- yak”, it became apparent at the hearing that there is also a difference of view as to the meaning of the first imputation, even though it has been admitted by the defendants. Mr Henry Lee says the imputation is that he planned to hide from the public the fact that Mr Henry Lee, Mr Hong and Mr Kim had made an agreement to cover the shortfall. The defendants say that the crux of the imputation is that the three men planned to hide the fact they had entered into a formal agreement and that it is the fact of the formal agreement that is the “shocking fact” referred to later in the article.
[87] Whether or not the fact of a formal written agreement has more far-reaching connotations in a Korean context as Mr Steve Lee asserted, based on the agreed translation of the article I do not accept that the imputation that Mr Henry Lee planned to hide the 27 March 2013 agreement means that it was the fact of a formal agreement that the three men planned to hide. I consider that the article and the admitted imputation are sufficiently broad to encompass an assertion that the three men planned to hide the fact that they had made an arrangement, whether formal or informal, to cover the shortfall. However, I do not consider that anything turns on this difference of interpretation.
[88] Mr Strauss says the documents and the viva voce evidence establish that the fact of a formal written agreement was not disclosed until 24 November 2013 when Mr Kim published his statement in the NZ Koreapost, which proves the intention to
17 Paragraphs 14(a) and 16(a) of Third Amended Statement of Claim.
hide the agreement from the public. Ms Goatley says the fact of an agreement to cover the shortfall was disclosed in Mr Hong’s statement of 3 April 2013, shortly after the 27 March 2013 agreement had been signed.
[89] Ms Goatley, in her cross examination of Mr Kim, challenged Mr Kim’s evidence in chief in which he said that the three men did not intend the agreement to become public because if the Korean public found out about the agreement to cover the shortfall the public would be less inclined to contribute themselves to meeting that shortfall. Mr Kim acknowledged that there is no explicit provision in the agreement requiring that it not be disclosed and that he had not intended to hide the agreement from the public even if he had no reason to make it public. However, this last admission was followed by a statement by Mr Kim that if the agreement had been publicised, it could have affected fundraising so the three signatories implicitly agreed it would not be disclosed to the public. That statement is consistent with Mr Kim’s evidence in chief.
[90]I also note that in Mr Kim’s evidence in chief he stated:
By concluding the agreement and using my retirement funds, we avoided the shame and humiliation if the transaction had not settled and the [Korean Society] had lost its deposit.
[91] In cross examination, Mr Steve Lee also accepted that the 27 March agreement had the effect of ensuring that the settlement was completed and the deposit was not lost. In Mr Henry Lee’s evidence in reply, he too referred to the “beneficial” nature of the 27 March 2013 agreement because it enabled the completion of the purchase of the Cultural Centre.
[92] I am satisfied that the documentary evidence establishes there was no intention to make the fact of an agreement, whether formal or informal, or its contents public at the time the 27 March 2013 agreement was signed or for some months afterwards. I do not accept Mr Henry Lee’s evidence or Ms Goatley’s submission that the fact of the agreement was disclosed in Mr Hong’s statement of 3 April 2013.
[93]Mr Hong’s statement distinguishes between Mr Kim’s “advance payment” of
$430,000 and the remaining sum of $148,191 to be paid by the Korean community in
order to meet the target of $750,000 necessary to trigger the contribution by the Overseas Koreans Foundation. The commitment stated in that announcement to “pay the remaining amount” is clearly a reference to any shortfall in the remaining sum of
$148,191 and not a reference to the much larger sum covered in the “advance payment” by Mr Kim and provided for in the 27 March 2013 agreement.
[94] Ms Goatley says the paragraph in Mr Hong’s statement – in which he declared that the fundraising that would end on 26 April would share the advanced payment made by the three members of the committee in a unified effort to help the Korean community – amounts to a disclosure of the essence of the 27 March 2013 agreement.
[95] I consider that paragraph is too unclear to bear that interpretation given the significance of the point at issue and given the difficulties of interpreting an English translation of a Korean document. On the translation before the Court, it would require a very well-informed reader to understand that this paragraph meant that, notwithstanding the preceding paragraphs in which it was said that a further payment of $148,191 had to be paid by the Korean community and that the three committee members would cover that amount if necessary, in fact the fundraising from the community would also be used to cover the advance payment made by Mr Kim, and that Mr Henry Lee and Mr Hong would share in that as well. The paragraph may be an allusion to the 27 March 2013 agreement but it falls short of a disclosure of the fact of the agreement or its contents.
[96] My conclusion that there was no disclosure of the 27 March 2013 agreement or its contents and no intention to make such disclosure before November 2013 is reinforced by the following:
(a)There was no reference to the fact or content of the 27 March 2013 agreement in Mr Hong’s statement of 26 April 2013 which linked the commitment of the three Foundation Committee members to meeting the “shortage amount of Korean residents” then stated to be “over
$110,000” and not to any wider undertaking. The figure of “over
$110,000” is consistent with the sum of $148,191 said to be outstanding in the statement of 3 April 2013.
(b)There was no reference to the fact or content of the 27 March 2013 agreement in Mr Henry Lee’s statement of 5 September 2013. Furthermore, that statement said that about $650,000 had been raised towards the fundraising target of $750,000 and that an extra $100,000 was required. The last figure is also consistent with the figures in Mr Hong’s statements of 3 and 26 April 2013.
(c)The Korean Society’s treatment of the advance payment as a loan as confirmed in the report by the Department of Internal Affairs.
(d)Mr Henry Lee’s evident reluctance at the time and subsequently, including at the hearing of this proceeding, to accept that the 27 March 2013 agreement imposed any binding obligations on him.
(e)The first direct reference to the content of the 27 March 2013 agreement was in Mr Henry Lee’s statement published in the Weekly Korean on 15 November 2013 in which he referred obliquely to the agreement the three committee members had made to meet any shortfall by one third in the context of explaining his insistence on the establishment of a BOT.
(f)The first full reference to the fact and content of the 27 March 2013 agreement was in Mr Kim’s statement of 18 November 2013.
[97] I am satisfied, therefore, that, notwithstanding the agreement’s silence on the question of disclosure, none of the three signatories intended the fact or the content of the 27 March 2013 agreement to be disclosed at the time it was made because:
(a)Disclosure might discourage further donations by the wider Korean community;
(b)The three signatories were concerned to ensure that the purchase of the Cultural Centre did not fall through and the Korean Society’s deposit
was not forfeited, as might have been the case if the full extent of the fundraising shortfall had been disclosed;
(c)All three signatories were concerned to protect their own reputations and not to reveal publicly the extent to which their fundraising efforts had fallen short;
(d)Neither Mr Hong nor Mr Henry Lee was keen to acknowledge a responsibility to meet one third of a shortfall that included most or all of the payment of $430,000 made by Mr Kim.
[98] Ms Goatley submits that there is a material difference between merely not disclosing something and deliberately “hiding” it. I accept there is a difference but it depends on the context. In this case, the phrase complained of is that Mr Henry Lee and the other signatories of the 27 March 2013 agreement had a plan to hide the agreement from the public. I am satisfied that they had at least an informal understanding not to disclose the agreement. That is clear from the distinction drawn in Mr Hong’s statement of 3 April 2013 between Mr Kim’s “advance payment” of
$430,000 and the remaining sum of $148,191. In these circumstances, and because we are working on the basis of an English translation of a Korean document, I have had considerable difficulty deciding whether saying the three signatories had a plan to hide the agreement is substantially different from saying they had a plan not to disclose the agreement, even if the former states the point more pejoratively.
[99] However, there is the further consideration of the use of the term “yi-myin- gye-yak” to describe the 27 March 2013 agreement which, as I have already found, adds a substantially greater derogatory connotation that Mr Henry Lee and the other signatories concluded an agreement that had connotations of shamefulness and untoward secretiveness. Whether that description of the agreement is appropriate requires some analysis of the circumstances that applied at the time the 27 March 2013 agreement was entered into.
[100] While it can be argued that the three Foundation Committee members should have disclosed the full extent of the fundraising shortfall at the time of settlement of
the purchase, I infer from the evidence that the Committee members were concerned that if the full extent of the shortfall had been revealed, it might have led to collapse of the purchase and the loss of the deposit already paid by the Korean Society. That would have been a significant blow for the Korean community as well as a loss of face for the three Committee members. By concluding the 27 March 2013 agreement, the Committee members ensured that the purchase could be settled – which was to the benefit of the Korean community and not at all inappropriate or shameful. In fact, there was nothing in the agreement or its contents that required that it should be disclosed. It was a private agreement between the three Committee members who were entitled to treat it as such. Putting to one side the disputes that arose subsequently, there was nothing inappropriate or shameful about the three Foundation Committee members agreeing on an arrangement to cover the fundraising shortfall to enable the settlement of the purchase of the Cultural Centre in the hope that the shortfall could be met by future donations.
[101] Accordingly, I conclude that to say that Mr Henry Lee and the other signatories had a plan “to hide” the 27 March 2013 agreement which is described by the use of the derogatory term “yi-myin-gye-yak” is substantially different from saying that they had a plan, in the sense of an informal understanding, not to disclose an agreement that they genuinely considered to be in the interests of the Korean community. Accordingly, I find that the defendants have not proven that the imputation that Mr Henry Lee and the other parties to the 27 March 2013 agreement planned to hide the agreement from the public was true or not materially different from the truth.
Mr Henry Lee a party to a plan to engage in deception18
[102] There are, in essence, two imputations going to the question of deception. These are that Mr Henry Lee was a party to plans:
(a)To deceive the Korean community about the true nature of the fundraising arrangements for the Cultural Centre;
18 Paragraphs 14(b), 16(b) and 22(a) of Third Amended Statement of Claim.
(b)To deceive the Korean community by pretending that the fundraising was going well and hiding the 27 March 2013 agreement.
[103] Mr Strauss says the first of these imputations is no different in substance from the imputation that Mr Henry Lee planned to hide the 27 March 2013 agreement from the public. Mr Strass is correct, depending on the meaning to be given to “deceive”. In some contexts, the term can mean causing or allowing someone to believe something that is false. In other contexts, it carries the added factor of trapping, depriving or overcoming someone by trickery.19 In my view, the use of the terms “deception” and “deceive” in the context of this article, combined with the description of the 27 March 2013 agreement as a “yi-myin-gye-yak”, carries some of those added connotations; that is that the three signatories to the 27 March agreement were trying to trick or fool the Korean community into thinking that the signatories were doing something honourable when in fact they were acting less than honourably.
[104] I accept that by not disclosing the true extent of the shortfall to the Korean community, Mr Henry Lee and the other Committee members allowed the community to believe the fundraising had gone reasonably well to the extent there was only a shortfall of approximately $100,000 in April 2013 when in fact the true extent of the shortfall was considerably greater. However, I do not accept that the Committee members’ lack of candour was for the purpose of trapping, depriving or overcoming the Korean community by trickery. Accordingly, I find that the defendants have not proven that the imputations of deception are true or not materially different from the truth.
Mr Henry Lee had not acted openly, honestly or honourably20
[105] Despite the defendants pleading truth to the two imputations to identical effect, in closing submissions Mr Strauss says only that these imputations amount to a value judgment which the defendants contend was an honest opinion. While I do not take that submission to mean that the defendants have abandoned their pleading of truth to these imputations, the submission is a recognition of the difficulty of proving
19 Shorter Oxford English Dictionary, (6th ed, Oxford University Press, New York, 2007).
20 Paragraphs 14(c) and 16(d) of Third Amended Statement of Claim.
propositions going to character. I consider it established, on the basis of the discussion of the preceding imputation, that Mr Henry Lee and the other signatories were less than open in their engagements with the Korean community about the fundraising. But the evidence fell well short of establishing that Mr Henry Lee was dishonest or acted dishonourably. Accordingly, I find that the defendants have not established that these imputations were true or not materially different from the truth.
The existence of the 27 March 2013 agreement and by implication the behaviour of Mr Henry Lee as a party to it were “shocking”21
[106] Mr Strauss says on his closing submissions that the description of something as “shocking” is an opinion. I agree. The question of whether or not something is shocking relates to the impact of an event on others – which is inherently a matter of opinion. The truth of that is not easily proved. In any event, as I have held, there was nothing inherently inappropriate or shameful about the 27 March 2013 agreement that makes the existence of the agreement or Mr Henry Lee being a party to it “shocking”. Accordingly, the defendants have not established that this imputation was true or not materially different from the truth.
In trying to “privatise the Centre”, Mr Henry Lee and Mr Hong were attempting to usurp the authority of the Korean Society and take personal control of the Cultural Centre22
[107] This imputation is written as if the propositions stated are the views of the writer. In fact, it is clear from the paragraph of the article from which this imputation is drawn that the paragraph deals with Mr Kim’s thoughts on the matters addressed. The paragraph begins:
The President Kim, who thought that the persons who did not pay back the money tried to privatise the Centre, announced the dissolution of BOD by ….
[108] Although the imputation was not pleaded or admitted as Mr Kim’s opinion, the imputation cannot be given a meaning in pleadings that is not faithful to the text from which it was drawn. I consider, therefore, that the imputation must be considered in the context of the article so that it means “Mr Kim thought that, in trying to privatise
21 Paragraph 16(c) of Third Amended Statement of Claim.
22 Paragraph 18(a) of Third Amended Statement of Claim.
the Centre Mr Henry Lee and Mr Hong were attempting to usurp the authority of the Korean Society and take personal control of the Cultural Centre.”
[109] The only evidence offered to establish the truth of the proposition of privatisation is the statement of claim in the proceeding Mr Henry Lee brought against Mr Kim in September 2014 but later discontinued. In that statement of claim, Mr Henry Lee alleged that Mr and Mrs Kim had stated publicly that Mr Henry Lee would like to take ownership of the Cultural Centre. That allegation was pleaded in establishing the foundation for a defamation proceeding and cannot be taken as proving as true that Mr Kim thought Mr Lee and Mr Hong were looking to own or privatise the Cultural Centre. Moreover, it is clear from Mr Kim’s evidence in chief and from the article he published in the NZ Koreapost on 18 November 2013 that Mr Kim’s concerns were focused on what he saw as Mr Henry Lee’s attempt to make the BOD a superior body to the Korean Society rather than any attempt to “privatise” the Centre.
[110] However, the privatisation point is subsidiary to the more substantive allegations in the imputation, namely that Mr Kim thought that Mr Henry Lee and Mr Hong were attempting to usurp the authority of the Korean Society and take personal control of the Cultural Centre. It is clear from the article Mr Kim published in the NZ Koreapost on 18 November 2013 and from Mr Kim’s evidence in chief that that Mr Kim did indeed believe that Mr Lee and Mr Hong were attempting to usurp the authority of the Korean Society – in the sense that he saw their efforts as designed to make the BOD superior to the Society – and that he thought Mr Lee wanted to be in control. Accordingly, I am satisfied that this imputation, when read in the context of the article from which it is drawn, is true or not materially different from the truth.
Mr Henry Lee, together with Mr Hong, sought to control the BOD so as to avoid paying money they owed to Mr Kim23
[111] In his closing submissions, Mr Strauss says this imputation is, in substance, not materially different from the truth in that the issue of control over the Cultural
23 Paragraph 20(a) of Third Amended Statement of Claim.
Centre played a major role in the dispute between the parties and Mr Henry Lee in fact delayed payment to Mr Kim until 2016.
[112] I do not accept that submission. Whatever Mr Kim may have thought, I am not satisfied the evidence establishes that Mr Henry Lee was in fact trying to control the BOD or the Cultural Centre. Mr Lee’s evidence, which was not seriously challenged by the defendants, was that he wanted an accounting of the amounts raised in the fundraising and he wanted a separation between the governance of the Korean Society and the Cultural Centre. There are sound administrative reasons for such a separation. The report of the Department of Internal Affairs, which set out the ways in which Mr Kim sought to profit personally from his position as President of the Society, confirms there was substance to Mr Henry Lee’s concerns.
[113] It follows that the defendants cannot establish that the imputation that Mr Henry Lee sought to control the BOD in order to avoid paying money was true or not materially different from the truth because it is based on a false premise.
Mr Henry Lee got involved in a “muddy fight” over the validity of the dismissal of the BOD to try to avoid paying money he owned to Mr Kim24
[114] In cross examination, Mr Steve Lee said he considered the “muddy fight” to be about all the matters that arose in relation to the funding of the Cultural Centre including the legal proceedings, the public meetings of the Korean Society, and the involvement of the police, and it was not just about the dismissal of the BOD. However, that is not what the agreed translation of the article says. Nor is it the sense of the admitted imputation or how counsel for the defendants or Mr Henry Lee addressed this imputation.
[115] As Mr Strauss submits, the fact that a serious dispute erupted is not in issue. However, the inference that Mr Henry Lee became involved in the dispute over the BOD to try to avoid paying money he owed to Mr Kim is disputed.
24 Paragraph 20(b) of Third Amended Statement of Claim.
[116] Ms Goatley says that Mr Henry Lee’s evidence was that he did not want to be involved in the fight and that he stepped down from the position of co-chair of the Foundation Committee on 15 November 2013. That was the same day Mr Henry Lee published his letter in The Weekly Korea on the issues of governance and the arrangements for meeting the fundraising shortfall and in which he made direct attacks on Mr Kim’s character. It was also only four days after Mr Henry Lee had written to Mr Kim purporting to declare the 27 March 2013 agreement invalid. There was undoubtedly a link between the BOD governance issues and the arrangements for meeting the fundraising shortfall.
[117] However, the decision to dismiss the BOD was that of Mr Kim, not Mr Henry Lee. The evidence demonstrates there was already a significant dispute between the two men over the governance and shortfall issues before Mr Kim took steps to disestablish the BOD. Given that history, it is hardly surprising that Mr Henry Lee reacted strongly to the dismissal of the BOD. But the assertion that he became involved in a fight over the dismissal in order to avoid paying the money he owed to Mr Kim is not supported by the evidence. Accordingly, the defendants have not established that this imputation was true or not materially different from the truth.
The reason why Mr Henry Lee hid the 27 March 2013 agreement was to avoid having to pay any money25
[118] I have already found that Mr Henry Lee and the other signatories to the 27 March 2013 agreement had an informal understanding not to disclose the agreement and that one of the reasons for that was a reluctance on the part of Mr Henry Lee and Mr Hong to accept that they had made a binding commitment to meet any residual shortfall. However, I do not consider that this was the driving consideration behind the informal understanding not to disclose the agreement. I consider the other considerations I have identified – namely a wish not to discourage others from contributing funds, a concern not to allow the purchase of the Cultural Centre to fall over and to forfeit the Korean Society’s deposit and a wish by all three Foundation Committee Members to protect their reputations – were more important in the non- disclosure understanding. Whether or not a reluctance to pay amounts to an intention
[181] While I agree with Ms Goatley that the 27 March 2013 agreement was envisaged at the time of signature as a private arrangement between the three signatories, it was directed to resolving an issue of concern to the wider Korean community. Indeed, that was one of its key purposes. Moreover, whatever the intentions might have been at the time of signature, by the time of the publication of the article, the agreement and the other issues addressed in the article had become matters of much wider concern and understandable public interest that bore on the functioning of the Korean Society itself.
[182] It is clear from the Court of Appeal’s judgment in Durie v Gardiner that the Court intended the new defence to apply to a very wide range of publications, including those by bloggers and users of Twitter and Facebook and other social
63 Durie v Gardiner [2018] NZCA 278, [2018] 3 NZLR 131 at [68].
media.64 It would be inconsistent with the spirit and intent of the judgment to hold in this case that an article by a professional journalist such as Mr Steve Lee about matters that have been of considerable public moment and controversy within the Korean community was not of public interest in the terms discussed by the Court of Appeal in Durie v Gardiner and by the Supreme Court of Canada in Grant v Torstar Corp. I hold, therefore, that the subject matter of the Seed of Dispute article was of public interest article.
Was publication of the article responsible?
Seriousness of allegations
[183] The article contained serious allegations going to the probity and honour of Mr Henry Lee and the members of the Foundation Committee and accused them of hiding things that should have been disclosed to the Korean community, deceiving the Korean community, acting dishonourably and dishonestly, of putting their personal interests ahead of the Korean community in carrying out their responsibilities, and of seeking to avoid obligations they had accepted under the 27 March 2013 agreement.
Urgency of publication
[184] There no urgency to the publication. It was published on 13 March 2015, some considerable time after the principal events to which it referred: almost two years after signature of the 27 March 2013 agreement; 16 months after Mr Kim’s statement to NZKoreapost on 18 November 2013 in which the details of the 27 March 2013 agreement were made public; over 15 months since the special general meeting of the Korean Society on 29 November 2013 disestablished the BOD. It was also published 10 days after the release of the Department of Internal Affairs report. Despite the release of that report providing the impetus for the article, a few days further delay to have enabled comment and correction of factual errors would not have compromised the timeliness of the article.
64 Durie v Gardiner [2018] NZCA 278, [2018] 3 NZLR 131 at [56](c).
Reliability of any source
[185] Mr Steve Lee acknowledged seeking the views of Mr Kim before he published the article. If Mr Kim was consulted as a source, which was not clear on the evidence, he was a partial, interested and compromised source, given the findings of the Department of Internal Affairs report. But whether or not Mr Kim was a source, there was no evidence to suggest this was a case where protection of a source was a relevant consideration.
Comment sought from the plaintiff
[186] Mr Steve Lee acknowledged that he did not seek any comment from Mr Henry Lee before publishing the article. In cross examination, he accepted a journalist had a responsibility to confirm “the matters you need to confirm” and a responsibility to check facts before publishing. He did not accept, however, that he always had an obligation to give people an opportunity to comment before publishing damaging allegations about them and said the obligation applied only if there was a need to check the facts.
[187] Mr Steve Lee accepted that he had reported Mr Kim’s views of the 27 March 2013 agreement and had reported that Mr Henry Lee did not agree, but Mr Steve Lee refused to accept he had any responsibility to seek Mr Henry Lee’s views on those matters or to give Mr Henry Lee an opportunity to comment. He insisted that he only reported facts and his genuine opinion.
Tone of article
[188] The tone of the article was critical of the signatories of the 27 March 2013 agreement, reflecting Mr Steve Lee’s view – which he reiterated in evidence – that the agreement and its non-disclosure were the cause of the divisions within the Korean community in Auckland. Apart from the use of the term “yi-myin-gye-yak”, however, I do not agree with Ms Goatley that the tone was “sensational” in the sense that term is normally used to describe journalism that seeks magnify issues for the purposes of gaining attention. The tone was more censorious than sensational – consistent with Mr Steve Lee’s view, which he also stated in evidence, that his role as a journalist was
to “suggest the right direction that the society and the community should go in”. But while the tone was critical, the problems with the article were much more to do with substance than with tone.
Inclusion of unnecessary defamatory statements
[189] It would have been quite possible for Mr Steve Lee to have published an article about the 27 March 2013 agreement, the fact that it was not disclosed, and to have commented on how he considered these matters had affected the Korean community without including the defamatory statements.
Other relevant considerations
[190] Ms Goatley submits that some regard should be had to the fact that article commented on the obligations of Mr Henry Lee and Mr Hong to Mr Kim under the 27 March agreement and told the three parties to settle their dispute at a time when Mr Kim’s proceeding based on the agreement was still under way. I agree that a publication that comments on matters that are sub judice may risk being found not to be responsible but I do not see the comments made in the article in these respects as being of particular moment.
Conclusion on whether communication was responsible
[191] Tone and “other relevant considerations” apart, all of the above factors weigh against finding publication of the article as responsible. The most significant factor, however, was Mr Steve Lee’s failure to provide an opportunity for Mr Henry Lee to comment on allegations that challenged his integrity and seriously damaged his reputation.
[192] While acknowledging the admonition of the Court of Appeal in Durie v Gardiner that the above factors must be applied in a practical and flexible manner with regard to the practical realities and with deference to the judgment of Mr Steve Lee as a professional journalist and publisher, I consider that Mr Steve Lee’s failure to seek Mr Henry Lee’s views but his refusal to accept he had any responsibility in that regard prevents the application of the defence of responsible communication from applying.
Despite Mr Strauss’s attempt in his supplementary closing submissions to persuade me that this is one of those occasions referred to by Lord Nicholls in Reynolds where an approach to the plaintiff was not warranted, I do not accept that submission.
[193] As noted above, the Court of Appeal in Durie v Gardiner specifically endorsed the finding of the Supreme Court of Canada in Torstar that the factor of seeking comment from a plaintiff is core because it goes to the essential sense of fairness that the defence of responsible communication is intended to promote. As Lord Phillips said in Flood v Times Newspapers Ltd in a decision of the Supreme Court of the United Kingdom, there is a distinction between cases where the public interest lies in the fact of published allegations and those where the public interest lies in the content of the allegations. In the first, relatively rare, category of cases of reportage (of which this case is not one), the obligation of the publisher is to verify the making of the allegation. In the second category (into which this case falls), the responsible journalist must be satisfied that the allegation published is true, and the belief in its truth must be the result of a reasonable investigation and must be reasonable to hold.65
[194] As Lord Phillips also said in Flood, the Reynolds factors are largely concerned with responsible journalism.66 I consider the same observation applies to the factors identified by the Court of Appeal in Durie v Gardiner. In his evidence, Mr Steve Lee demonstrated that he has little understanding of the requirements of responsible journalism. He maintained, in effect, that he had the right to decide whether to seek comment from Mr Henry Lee and that he only had a responsibility to do so if he, Mr Steve Lee, considered he might need to check his facts. Otherwise, he asserted a right to publish the facts as he saw them to be and to make such comment on those facts as he considered appropriate, as long as his opinions were genuine.
[195] Mr Steve Lee also seemed to see no incongruity in his seeking and publishing the perspectives of Mr Kim, one of the key protagonists in the “muddy fight” but in not offering a similar opportunity to Mr Henry Lee, another key protagonist. In that respect, Mr Steve Lee’s assertions in his evidence and through his counsel that he did no more than report the facts impartially lack credibility. The focus of the criticisms
65 Flood v Times Newspapers Ltd [2012] UKSC 11, [2012] 2 AC 273 at 77 – 88.
66 Flood v Times Newspapers Ltd [2012] UKSC 11, [2012] 2 AC 273 at 30.
is on Mr Henry Lee and Mr Hong. It is noteworthy that there is no mention in the article of the observations made by the Department of Internal Affairs of Mr Kim’s actions with respect to the money he advanced to cover the fundraising shortfall. Yet Mr Steve Lee said it was the publication of that report, which makes no criticisms of Mr Henry Lee, that Mr Steve Lee said in evidence prompted the article.
[196] In all of these respects, Mr Steve Lee’s approach was not consistent with responsible journalism and cannot be protected by the defence of responsible communication.
[197] My conclusion, therefore, is that the defence of responsible communication does not apply because the publication of the article was not responsible.
Finding on defamation
[198] I find that Mr Steve Lee and the Sunday Times defamed Mr Henry Lee in the Seed of Dispute article written by Mr Steve Lee and published by the Sunday Times on 13 March 2015 in respect of the following seven admitted imputations:
(a)Mr Henry Lee and the other parties to the 27 March 2013 agreement planned to hide the 27 March 2013 agreement from the public;
(b)Mr Henry Lee was a party to a plan to deceive the Korean community about the true nature of the fundraising arrangements for the Cultural Centre;
(c)Mr Henry Lee was a party to a plan to deceive the Korean community by pretending that the fundraising was going well and hiding the 27 March 2013 agreement;
(d)Mr Henry Lee, together with Mr Hong, sought to control the BOD so as to avoid paying money they owed to Mr Kim;
(e)Mr Henry Lee got involved in a “muddy fight” over the validity of the dismissal of the BOD to try to avoid paying money he owned to Mr Kim;
(f)The reason Mr Henry Lee hid the 27 March 2013 agreement was to avoid paying any money;
(g)When entering into the 27 March 2013 agreement, Mr Henry Lee had no intention of actually paying any money.
Damages
[199] Mr Henry Lee seeks compensatory damages of $250,000 against Mr Steve Lee, compensatory damages against the Sunday Times, and aggravated damages.
[200] Damages in defamation are directed towards compensation for the effects caused by the defamatory statements that are normal and to be expected when a person’s reputation is impaired. That is, they are an estimate, however rough, of the probable extent of actual loss a person has suffered and will likely suffer in the future. Since the interests served by way of protecting a good reputation are of a dignitary and peace of mind character, such damages are very difficult to measure in monetary terms.67
[201] Having regard to the evidence and decisions that bear some similarities to the present,68 I find the following considerations to be relevant in assessing the appropriate level of general damages:
(a)Mr Henry Lee is a senior member of the Korean community in Auckland who took on the responsibilities of co-chairing the Foundation Committee in the interests of the Korean community of Auckland and not for any reasons of personal reward;
67 Siemer v Staissney [2011] NZCA 106, [2011] 2 NZLR 361 at [48].
68 Kim v Cho [2016] NZHC 1771, [2016] NZAR 1134; Lee v New Korea Herald Ltd (HC Auckland CIV-2008-404-5072), 9 November 2010; Ahn v Lee [2009] DCR 298.
(b)On Mr Henry Lee’s own evidence and that of others such as Mr Cho, In Myung Kim and Kijong An, the publication of the article has caused Mr Henry Lee considerable personal distress and made him the subject of gossip and speculation within the Korean community in Auckland;
(c)The disagreements between Mr Henry Lee and Mr Kim over the 27 March 2013 agreement and the related issues over the governance of the Cultural Centre were already the subject of legal proceedings that both Mr Henry Lee and Mr Kim had commenced and of articles that Mr Henry Lee and Mr Kim had themselves put into the public domain;
(d)The Sunday Times has a limited circulation and while the article was republished on one occasion and may still be available on-line, it is unlikely that the reach of the article extends much beyond the Korean community in New Zealand;
(e)Mr Steve Lee and the Sunday Times which he owns and controls has refused to apologise for or to retract the article despite a number of approaches from Mr Henry Lee.
[202] Having regard to these considerations and the awards of damages in those other cases that bear some similarities to the present, I consider an award of compensatory damages of $150,000 to be appropriate. This sum takes into account my finding that Mr Steve Lee defamed Mr Henry Lee with respect to seven of the 15 pleaded imputations and my view that they were the more serious of the 15 pleaded imputations.
[203] Because Mr Steve Lee is the owner and operator of the Sunday Times, I do not consider it appropriate to make a separate award of compensatory damages in respect of the Sunday Times. I hold that Mr Steve Lee and the Sunday Times are jointly and severally liable for the sum of $150,000.
Claim for aggravated damages
[204] Mr Henry Lee sought aggravated damages given the importance of honour, maintaining dignity and not losing face in the Korean community. Mr Steve Lee denied there is any real difference between New Zealand and modern Korea in conceptions of honour. Mr Steve Lee himself, however, gave evidence about the importance of reputation and esteem in Korean society and, in cross examination, admitted that it was culturally important in the Korean community to maintain dignity and not lose face.
[205] I accept that concepts of honour, maintaining dignity and not losing face are of heightened importance in the Korean community. At the same time, I take into account that a number of the cases with similarities to the present case, whose awards I have taken into consideration when setting the level of compensatory damages, also involved New Zealand Korean litigants where issues of face and dignity would also have been at issue. Kim v Cho,69 dealt with issues that arose in the present case. For that reason, I do not see a case for awarding aggravated damages to take account of the heightened importance of dignity and face in the Korean community. I consider it likely that a decision in favour of Mr Henry Lee will itself be significant amelioration of those aspects of the damage to his reputation.
[206] With regard to the other matters which Ms Goatley says warrant an award of aggravated damages:
(a)I do not consider that publication of the article to a small, tight-knit community requires any uplift, bearing in mind that the other cases whose awards I have taken into account concerned the same community.
(b)I do not consider there is a case for awarding aggravated damages for the use of the term “yi-myin-gye-yak” to describe the 27 March 2013 agreement. It was the use of that term that tipped the balance for my finding that the first imputation was not true or materially different
69 Kim v Cho [2016] NZHC 1771, [2016] NZAR 1134, (2016) PRNZ 683.
from the truth. In that respect, the use of the term has already been taken into account in the award of compensatory damages.
(c)I do not accept there is a case for awarding aggravated damages because the defendants pursued a defence of truth and failed to apologise. Both were the consequence of Mr Steve Lee’s misplaced and stubborn belief that he knew what was true and had a right to state and comment on those matters regardless of the views of others. I do not consider his position was driven by ill-will or malice.
Result
[207]For the reasons given:
(a)I hold that the defendants have defamed Mr Henry Lee in the Seed of Dispute article written by Mr Steve Lee and published by the New Zealand Sunday Times on 13 March 2015;
(b)I award compensatory damages of $150,000 in favour of Mr Henry Lee jointly and severally against Mr Steve Lee and the New Zealand Sunday Times.
Costs
[208] Mr Henry Lee is entitled to costs on a 2B basis with reasonable disbursements to be fixed by the Registrar. If costs cannot be agreed, the parties are to file memoranda of no more than five pages.
G J van Bohemen J
Appendix
English Translation of the Editorial, New Zealand Sunday Times, 13 March 2015
<Sunday Editorial70, New Zealand Sunday Times, 13 March 2015>
Seed of Dispute
Behind Contract71 of Sung Hyuk KIM / Young Pyo HONG, Hyung Soo LEE
Before the due date for the payment of the balance for the Korean Community Centre (“the Centre”) in March 2013, Young Pyo HONG and Hyung Soo LEE, Co-Chairmen of the Foundation Committee “(the Committee) for the Korean Community Cultural Centre (‘the Cultural Centre”) announced72 that the purchase of the Centre had been completed as Sung Hyuk KIM, the then Vice-President of the Korean Society of Auckland Incorporated (“the KSAI”) as well as the then Co-Chairperson of the Committee, paid 73 the shortfall of $423,000.00.
70 The literal meaning of ‘non-dan’ in Korean can be translated as ‘panel discussion’ or ‘open forum’ which normally requires at least two or more debaters. However, given the actual format of the article, it is considered that ‘editorial’ or ‘column’ can be a closer translation.
71 ‘Yi-myun-gye-yak’ in Korean can be translated as ‘behind contract’, ‘unrevealed agreement’ or ‘hidden agreement’ which is normally entered into in a private, secret or not-open-to-the-public manner’ between/among interested parties. On the other hand, ‘yi-myun-gye-yak’ can also be translated as ‘under-the-table agreement’ or ‘informal agreement’ where there exists a formal/explicit agreement at the same time. Normally, for the ‘yi-myun-gye-yak’, the relevant parties agree not to disclose the existence of the agreement itself as well as its contents in the circumstances. The terms ‘contract’ and agreement’ can be used interchangeably.
72 The writer of this article used the present tense for most of the verbs in the article although it can be seen that most of the events took place in the past given the dates mentioned in the article. However, this type of writing can be often found in the other writers’ articles as well and it is considered that any reasonable and sound reader can understand those articles to that effect. Considering the dates stated in this article, past tenses are used here in translating those verbs.
73 ‘Dae-nab’ in Korean can also be translated literally as ‘to pay on behalf of someone else’. However, there is no mentioning of the article regarding for whom the payer paid.
Of course, they did not get an approval at the General Meeting of KSAI according to Section 23 of the Rules of the KSAI.
In addition to that, it was announced on 3 April (2013)74 under the names of HONG and LEE that the fund-raising would be terminated by 26 April (2013) and KIM, HONG, and LEE would share the shortfall.
On 19 November (2013) six months after moving to the Centre, Sung Hyuk KIM, the President of the KSAI, announced the shocking fact that there has been a behind contract among three persons of the Committee.
The contents of the contract were that $423,000.00 would be paid by the President KIM on 28 March (2013) and if that amount could not be repaid within two months, HONG and LEE, the Co-Chairmen, would repay one third of the shortfall each to the President KIM.
If the fund-raising for the establishment of the Centre was successful and the borrowed money was fully paid back, this behind contract would never been revealed to the public.
But the difference between the payment of the President KIM and the amount received reached $330,000.00 at that time and thus, according to the contract, each of HONG and LEE was under the necessity of repaying $110,000.00 to the President KIM.
Immediately before the announcement, the President KIM disclosed that he received the notification from the Management Committee of the Centre (BOD – the Chairperson Hyung Soo LEE) notifying that they would turn themselves into the superior organisation of the KSAI and would control the President of the KSAI.
The President KIM, who thought that the persons who did not pay back the money, tried to privatise the Centre, announced the dissolution of BOD by declaring that the General Meeting held on 31 May (2013) which approved the BOD was null and void due to lack of quorum.
74 There is no mentioning about particular ‘year’ in dates. However, it can be inferred the year as ‘2013’ in the context. Otherwise, it is considered that those can be clarified by the writer.
As HONG and LEE said they would not pay back the money agreed in the behind contract, caveats75 were put in place on their private properties.
If HONG and LEE controlled the BOD which had the mighty power, they could decide how to deal with the $150,000.00 granted from the Overseas Koreans Foundation76 and whether the share of 1/3 of the amount owed to Sung Hyuk KIM should be repaid or not, except the money to be repaid back to Sung Hyuk KIM personally. In other words, the repayment77 of the money owed to Sung Hyuk KIM can be delayed if the relationship between them becomes sour, even when the Centre has sufficient funds.
When Sung Hyuk KIM, Young Pyo HONG and Hyung Soo LEE got it into their heads that the person who can take a control on execution78 of the behind contract in which they agreed to share 1/3 of $423,000.00 each could be changed according to who would be a main body of operation of the Centre, they started a ‘muddy’79 fight on legality80 of the dissolution of the BOD.
A series of embarrassing and shameful events occurred, i.e., General Meeting – disturbance81 - involvement of the Police – defamation proceedings and so on. The audit by the Department of Internal Affairs on the KSAI was requested by the main body which violated the Rules by borrowing $423,000.00 without resolution of the General Meeting.
75 The literal translation of ‘ga-ab-ryu’ is found in some Korean-English dictionaries as ‘provisional seizure’. However, to my best knowledge as a lawyer, a closer translation of ‘ga-ab-ryu’ as a legal term in New Zealand is ‘caveat’ which is normally lodged by the party who has any interest (s) on a particular property as a stop sign on transaction of that property. Further, it is considered that there can be different requirements and procedures between ‘provisional seizure’ and caveat’.
76 This English translation is cited directly from the website of that organisation in Korea.
77 It is considered that there is a typo of the Korean word in the article.
78 It can also be translated as ‘carrying out’, ‘fulfilment’ or ‘implementation’.
79 It can also be translated as ‘dogfight in the mud’ similarly.80 It can also be translated as ‘lawfulness’ or ‘legitimacy’
81 It can also be translated as ‘disorderly and violent behaviours’.
This is the core point of disputes surrounding the BOD or the president of the KSAI.
“If (we) hide the contract in which (we) agreed to share 1/3 of $423,000.00 each and create an atmosphere among the Korean community, we do not need to pay the money.” (They) did not expect that the things of which (they) thought lightly got entangled82 like this.
The fight over the money which was triggered83 by personal desires for fame and honour and the behind contract shall not be embellished as if it was “for the Korean community” or “for the Centre”. (I) wish three persons settle the matters in anyway either through “fighting” or putting their heads together, without dragging the Korean community into the fight.
The Korean community is now sick and tired of it.
82 It can also be translated as ‘twisted’ or ‘went wrong’
83 It can also be translated as ‘commenced’ or ‘caused’
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