Koo Ming Kwon v Next Media Limited & Ors
17 February 2009, District Court, Hong Kong
In a modern Carbolic Smoke Ball case, the 2nd Defendant Jimmy Lai Chee Ying (黎智英), a well known pro-democracy Hong Kong media tycoon (who published the popular "Apple Daily" and "Next Magazine"), made a public pledge to bear 50% of the advertisements which "arouse the democratic consciousness of Hong Kong people". The plaintiff took out advertisements in 15 newspaper at a cost of more than HK$1,100,000 (USD140,000) and demanded payment within 3 days.
The background was Hong Kong in 2005 where one of debates was whether there should be "universal suffrage" for the election of the Chief Executive and Legislative Councillors for Hong Kong and the then government published a "Constitutional Reform Package" ("CRP") which set no fixed timetable for universal suffrage. The 2nd Defendant was a supporter for universal suffrage by 2007 and 2008.
The 2nd Defendant (he did honour all other advertisements placed in response to his appeal) refused to contribute to the plaintiff's advertisement cost and the plaintiff commenced legal action. The plaintiff contended that the 2nd Defendant's public pledge was a "unilateral offer" to the members of the general public and his (the plaintiff's) action constituted an "acceptance" of that "offer". The 2nd defendant said that his offer only covered advertisements which supported the universal suffrage and that the plaintiff's advertisement was only a participation in the discussion of the CRP.
The plaintiff's claim was dismissed by the judge, Lok, J. The plaintiff's claim against the 3rd Defendant, James To Kun Sun, a long standing member of the Legislative Council (for negligent misstatement) was also dismissed.
The judge said that the terms of the 2nd defendant's offer was not sufficiently clear to constitute a legally binding offer or alternatively, the plaintiff's "acceptance" did not comply with the terms of the offer (the plaintiff's support of the CRP was the opposite of what the 2nd Defendant was appealing the general public to do!). The judge also disagreed with the plaintiff that he should benefit from the contra proferentum rule (i.e. ambiguity should be resolved against the offeror) applied in the classic case of Carlill v Carbolic Smoke Ball Co. [1893] 1 QB 256. Unless the offeree's conduct was done "with reference to" or "in reliance of" or "with intention to accept" the offer, there was no acceptance of the offer: R v Clarke (1927) 40 CLR 227.
The judge also ordered costs to be paid by the plaintiff on indemnity basis as he concluded that the plaintiff had ulterior motives in commencing the action, taking into account the aggressive way he made the demand (3 days demand with no pre-action letter) and lodging of complaint against the 3rd defendant to the Legislative Council and police.
