Tort Law

Date01 December 2011
Published date01 December 2011
AuthorKumaralingam AMIRTHALINGAM LLB (Hons), PhD (Australian National University); Professor, Faculty of Law, National University of Singapore. Gary CHAN Kok Yew LLB (Hons), MA (National University of Singapore), LLM, BA (University of London); Associate Professor, School of Law, Singapore Management University.

23.1 The Court of Appeal decision in Chan Cheng Wah v Koh Sin Chong Freddie and another appeal[2012] 1 SLR 506 (Chan Cheng Wah (CA)) concerned the nature of defamatory meaning and the defences of justification and qualified privilege. The dispute arose from two allegedly defamatory statements published in the minutes of meeting of a management committee of a club (current MC) concerning the actions of the previous management committee (previous MC). Four members of the previous MC sued the defendant, the president of the current MC, in respect of the statements.

23.2 The two statements related to the installation of a water system after it was found that the pool at the club was contaminated. This expenditure was not provided for in the club's annual budget. Nonetheless, the club's financial operating manual stipulated that a sitting management committee (MC) may approve such expenditures on an emergency basis and seek ratification of the expenditure at the next AGM. The previous MC proceeded to approve the installation of the water system and the expenditure was ratified at the subsequent AGM. Later, the club's treasurer found documents that contained information inconsistent with the representations made by the previous MC at that AGM. An audit committee (Audit Committee) that was established by the current MC to review the project submitted an audit report that the expenditure was of an emergency nature and that there was no breach of any club procedures.

23.3 The defendant suggested at a meeting of the current MC that it should correct the misrepresentation of fact made by the previous MC to influence the ratification of expenditure at the last AGM (First Statement). At a subsequent meeting, the defendant summarised the treasurer's findings and stated, inter alia, that the capital expenditure spent to install the system without budget approval was unwarranted and that it could be a case of misrepresentation of facts to the AGM to get ratification for a capital expenditure for a water system that could not be justified under the urgent/emergency reason (Second Statement).

23.4 The trial judge found the First Statement and Second Statement (Statements) to be defamatory in that they meant that the plaintiffs had intentionally misrepresented to club members that it was necessary to replace the water filtration system on the basis it was a matter of urgency and/or emergency, thus justifying the expenditure and ratification by the AGM. However, the trial judge determined that the defendant had justified the gist of the defamatory sting as the plaintiffs had made the Statements to the club members despite knowing they were untrue. The plaintiffs appealed against the judge's finding on justification and costs, whilst the defendant appealed against the judge's findings that the words complained of were defamatory.

23.5 The plaintiffs' appeal was allowed, but the defendant's appeal was dismissed. First, the Court of Appeal agreed with the trial judge on defamatory meaning. It decided that the Statements by the defendant suggested dishonesty and misconduct on the part of the plaintiffs when they sought ratification of the expenditure at the AGM. The Court of Appeal rejected the defendant's argument that the Statements only meant that the plaintiffs had made erroneous representations and not that they had deliberately made them to deceive club members.

23.6 The Court of Appeal observed that the First Statement was made at a meeting where suspicions of wrong-doing had clearly been cast on the previous MC in respect of the water system and that the defendant was obviously seeking to find fault with the previous MC. As for the Second Statement, the defendant gave his own take on the treasurer's findings by describing them as a case of misrepresenting of facts to the AGM to obtain ratification of the expenditure at the AGM. The Second Statement also indicated that the defendant suspected the previous MC of wrong-doing and was prepared to report them to the relevant authorities if evidence was found.

23.7 The Court of Appeal confirmed the trial judge's view (Chan Cheng Wah Bernard v Koh Sin Chong Freddie[2010] SGHC 324) that as the statements were contained in the minutes of the club's MC meetings and published primarily to club members, the third party here would be the ordinary reasonable and interested Club member possessing general knowledge of the affairs of the Club: Chan Cheng Wah (CA)ENR at [19] and [26]. The dispute over the expenditure of the new water system was widely-publicised and hotly-debated within the club for a period of at least half a year from the AGM to the two meetings in which the defamatory statements were made. The background facts should therefore form part of the general knowledge of the reasonably interested member.

23.8 The Court of Appeal, however, disagreed with the trial judge on the defence of justification. The defamatory sting of the Statements was that the previous MC had deliberately misrepresented the circumstances relating to the expenditure with the aim of deceiving the club members to ratify the expenditure. In this regard, the Court of Appeal found that the plaintiffs did not have an intention to misrepresent or a dishonest motive to influence the ratification of the expenditure. In fact, the defendant had admitted that he did not have any basis for saying that the plaintiffs deliberately made the misrepresentation with a view to deceiving the members at the AGM. Hence, the defamatory sting in the Statements was not justified.

23.9 The Court of Appeal stated that the Statements were made on an occasion of qualified privilege as the MC of the club had a duty to inform the club members of the misrepresentations made to them to influence their ratification of the expenditure. However, it should be highlighted that the defence of qualified privilege will not arise unless it is also found that the recipients have a corresponding interest or duty to receive the defamatory communication (Seaga v HarperELR[2009] 1 AC 1), a requirement which the Court of Appeal did not specifically apply to the facts. Nevertheless, on the facts of the present case, it should not be difficult to find an interest on the part of the club members to receive such communication.

23.10 In any event, the Court of Appeal decided that the protection of privilege was lost due to malice. Malice may be proven by (a) the defendant's knowledge of falsity, recklessness or lack of belief in the defamatory statement; and (b) where the defendant has a genuine or honest belief in the truth of the defamatory statement, but his dominant motive is to injure the plaintiff or he has some other improper motive (see Lim Eng Hock Peter v Lin Jian Wei[2010] 4 SLR 331).

23.11 There was doubt whether the defendant had a genuine or honest belief in the truth of the Statements. As the defendant acknowledged in cross-examination that, as at the time of the publication of the Statements, he had not formed an opinion as to whether or not the plaintiffs had made the misrepresentations deliberately, this implied, according to the Court of Appeal, at the minimum, a reckless disregard for the truth: Chan Cheng Wah (CA) at [91]. The Court of Appeal also noted (Chan Cheng Wah (CA) at [92][95]) the following evidence: repeated insinuations by the defendant about the plaintiffs' wrong-doing prior to the publication of the defamatory statements, the defendant's statement at the time of making the defamatory Second Statement that the irregularities in the contract award and payments ought to be reported to the relevant authorities, the defendant's actions in embarking on a witch-hunt against the plaintiffs by conducting investigations into the expenditure, and repeatedly imploring the Audit Committee to amend the audit report, despite the Audit Committee's repeated refusal to do so, and the repeated attempts by the defendant formally to censure the plaintiffs after the club members voted not to ratify the expenditure. Based on the above evidence, the Court of Appeal found that the defendant's dominant motive for publishing the Statements was to injure the plaintiffs and that the defendant was determined to soil the reputation of the plaintiffs in the eyes of the members of the club: Chan Cheng Wah (CA) at [96].

23.12 In Kesavan Engineering & Construction Pte Ltd v S P Powerassets Limited[2011] SGDC 179 (Kesavan Engineering), the central issues were whether there had been publication of the impugned material and whether the defamation action constituted an abuse of process. A dispute relating to a breach of contract arose between the plaintiff company and the defendant company. The letter addressed to the plaintiff was sent by the defendant to three employees and one director of the plaintiff company and no one else. The defendant argued that the action should be struck out on two grounds: (a) the letter was not published; and (b) abuse of process.

23.13 On the first ground, the defendant argued that the four persons who read the letter did so firstly as employees or as a director of the plaintiff company and secondly, they read the letter in the ordinary course of business as such persons of the plaintiff company. The district judge was faced with two diametrically opposite decisions on the issue of publication, namely:

(a) State Bank of New South Wales v Currabubula Holdings[2001] NSWCA 47 (Currabubula) in which the Court of Appeal of the Supreme Court of New South Wales held (Currabubula at [129]) that a communication to a company which, because the company can only act by natural persons, is received by someone on behalf of the company in the ordinary course of business, is communication only to the company and does not constitute publication. This is not confined to receipt of the communication by the company's managing director and alter ego, but includes receipt by any employee receiving the...

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