Continental Steel Pte Ltd v Nippon Steel & Sumitomo Metal Southeast Asia Pte Ltd

JurisdictionSingapore
JudgeDedar Singh Gill J
Judgment Date23 November 2022
Docket NumberSuit No 647 of 2018
CourtHigh Court (Singapore)
Continental Steel Pte Ltd
and
Nippon Steel & Sumitomo Metal Southeast Asia Pte Ltd and another

[2022] SGHC 292

Dedar Singh Gill J

Suit No 647 of 2018

General Division of the High Court

Tort — Defamation — Damages — General damages for corporate claimant — Special damages and causation — Plaintiff unable to prove specific pecuniary loss caused by loss of repute — Appropriate quantum of general and special damages

Tort — Defamation — Damages — Publication — Grapevine effect — Plaintiff unable to prove extent to which defamatory statement percolated within relevant class of addressees — Whether grapevine effect could be recognised in assessment of damages

Tort — Defamation — Defamatory statements — Innuendo — Company making statements about product sold by competitor — Whether statements were defamatory by innuendo

Tort — Defamation — Justification — Unpleaded — Defendant failing to plead adequate particulars concerning facts going toward justification — Whether justification could affect quantification of damages

Held, allowing the claim against the first defendant, dismissing the claim against the second defendant and awarding the plaintiff $25,000 in general damages and $50,000 in special damages:

[Editorial note: The paragraphs enclosed within parentheses in the holdings below are not reported; they can be found in the unreported version of the judgment ([2022] SGHC 292) on LawNet. The “Case(s) referred to” and “Legislation referred to” below list the cases and legislation referred to in the headnote and/or the paragraphs reported below.]

Liability

(1) CS was a corporate entity. In order for a statement to be defamatory of CS's trade and/or business, it had to be shown that the statement would ordinarily lead reasonable people to the opinion that it conducted its business in a dishonest, improper or inefficient manner: at [78].

(2) The natural and ordinary meaning of a word was that which was conveyed to an ordinary reasonable person. The class of reader was relevant in determining the scope of possible meanings the publication might bear. In contrast, an innuendo meaning was one that was apparent only to those readers possessed of special knowledge of extrinsic facts unknown to the ordinary person: at [81] to [83].

(3) The natural and ordinary meaning of the Defamatory Material was that CS was selling the Product for use in accordance with its Catalogue Design Strength in contravention of the relevant standards in Singapore: at [69(b)] and [86].

(4) The natural and ordinary meaning of the Defamatory Material reflected adversely on the Product and not on the propriety of CS's business. What gave rise to a defamatory sting was knowledge of the fact that CS had been selling and marketing the Product under its Catalogue Design Strength. Being confronted with the Defamatory Material, the reasonable person in the construction industry with knowledge of this fact would likely infer that CS was conducting its business in a dishonest or improper manner: at [91] and [92].

(5) In a defamation action, the plaintiff had to show that a third party would reasonably understand the defamatory words to refer to the plaintiff. A person who was aware of the fact that CS was selling and marketing the Product under its Catalogue Design Strength would reasonably come to the conclusion that the Defamatory Material referred to CS: at [113].

(6) There was insufficient evidence to prove that the defendants communicated the Defamatory Material to third parties in Singapore other than three “direct publishees”. Because the direct publishees knew that CS marketed the Product under its Catalogue Design Strength, they appreciated the innuendo in the Defamatory Material: at [130], [131] and [135].

(7) As the Publication was a form of libel, it was trite that damage was presumed. There was no need for the plaintiff to prove special damage to establish the tort of libel even though the plaintiff was a corporate body and not an individual. The Words, however, were a form of slander which required proof of special damage to be actionable unless specific common law and/or statutory exceptions applied. Because the Words were likely to disparage CS's trade or business by innuendo, s 5 of the Defamation Act (Cap 75, 2014 Rev Ed) (the “Defamation Act”) rendered it unnecessary to prove special damage: at [143] to [146].

(8) Where two or more people by their tortious acts caused damaged to a plaintiff, they might be liable as: (a) joint tortfeasors; (b) several tortfeasors causing the same damage; or (c) several tortfeasors causing distinct damage. Nippon Steel Japan was not a distinct tortfeasor because it did not publish the Defamatory Material. CS did not plead any grounds to establish joint tortfeasorship. Therefore, only Nippon Steel Singapore was liable for defamation: at [150] to [154].

Damages

(9) The admissibility of evidence on a publication's directly relevant background context was subject to the relevant particulars being pleaded. Nippon Steel Singapore had failed to furnish adequate particulars concerning facts going toward justification in its defence. Therefore, even if there was merit to Nippon Steel Singapore's submission that the BC1:2012 did apply to the Product, this did not affect the quantification of damages for defamation: at [157] to [161].

(10) Liability attached to re-publications if they were intended by the defendant or were a foreseeable consequence of the defendant's actions. Having regard to the circumstances of this case, the known re-publications of the Publication were a foreseeable consequence of Mr Murahashi's publication of the Defamatory Material: at [165] to [174].

(11) A defamatory statement might be repeated to persons other than those to whom the defendant communicated the defamatory words. The difficulty in proving the extent to which a defamatory statement had percolated in the relevant class of addressees (the “grapevine effect”) should not automatically lead to refusal to award compensation. This would ignore damage to the plaintiff's reputation caused by re-publication of the initial communication, where such re-publication was intended or foreseeable by the defendant. However, this grapevine effect should not be presumed in all cases. A recognition of the grapevine effect was an inference of fact that ultimately had to have an evidential basis. In this regard, relevant but non-exhaustive factors which assisted in determining if the grapevine effect should apply were: (a) the gravity of the imputation; (b) the ease of repetition; and (c) the nature, size and character of the audience to whom it was published. In the present case, the grapevine effect operated but only to a limited degree: at [175] to [186].

(12) A final question on the issue of re-publication was whether re-publishees who received the Defamatory Material by virtue of the grapevine effect would have appreciated the defamatory innuendo. In this case, it was moderately known within the construction industry that CS was marketing the Product under its Catalogue Design Strength. On the balance of probabilities, some members of the construction industry knew that CS marketed the Product in accordance with its Catalogue Design Strength. This meant that a proportion of re-publishees who received the Defamatory Material via the grapevine effect would have appreciated the defamatory innuendo: at [187] to [199].

(13) Malice was proven when the defendant acted with knowledge that the statement was untrue or knowing indifference as to whether it was true or false. In the present case, Nippon Steel Singapore was indifferent to the truth of the Defamatory Material. It deliberately stopped short of making inquiries directly with the BCA so as to ascertain whether BC1:2012 applied to the Product when it was used as the Superior grade of steel. Nippon Steel Singapore was reckless with the truth and published the Defamatory Material with malice: at [207] to [217].

(14) An apology achieved a dual purpose. It soothed the injured feelings of the person defamed and undid harm to his reputation in consequence of the publication. Since companies had no feelings, Nippon Steel Singapore's failure to console CS did not aggravate the damages due. The vindicatory effect of an apology was achieved, at least in part, by Nippon Steel Singapore's retraction of the defamatory imputation by letter: at [223] and [224].

(15) An apology or a retraction of the defamatory statement might be extended for commercial considerations or expediency. Nippon Steel Singapore should not be penalised for running the case that it did in adversarial litigation. The fact that it resiled from its letter of retraction was a neutral factor in the assessment of damages: at [228] and [229].

(16) An award of $25,000 as general damages was appropriate bearing in mind the moderate gravity of the defamatory imputation and the different aggravating and mitigating factors in the case. Twenty-five thousand dollars in general damages represented a fair and reasonable sum commensurate with the damage CS suffered to its reputation and that sufficiently vindicated it: at [230] to [232].

(17) To recover special damages, it had to be shown that the loss of repute caused the alleged pecuniary loss. Causation had to be proven even in respect of slander which was actionable per se by virtue of s 5 of the Defamation Act: at [237] and [238].

(18) Where it was clear that some substantial loss had been incurred, the fact that an assessment was difficult because of the nature of damage was no reason for awarding no damages or merely nominal damages. Having regard to the loss period of eight months and the moderate gravity of the defamatory sting, CS was awarded $50,000 on account of its probable pecuniary loss: at [262] and [263].

Case(s) referred to

Aaron Anne Joseph v Cheong Yip Seng [1996] 1 SLR(R) 258; [1996] 1 SLR 623 (folld)

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