Ezion Holdings Ltd v Credit Suisse AG

• Jurisdiction: Singapore
• Judge: Hoo Sheau Peng JC
• Judgment Date: 02 June 2017
• Neutral Citation: [2017] SGHC 137
• Plaintiff Counsel: Kenneth Tan SC (instructed counsel) (Kenneth Tan Partnership), Ramachandran Doraisamy Raghunath, Lee Weiming Andrew, Joan Xue and Roshan Singh (Peter Doraisamy LLC)
• Date: 02 June 2017
• Docket Number: Suit No 1033 of 2015 (Registrar’s Appeal No 212 of 2016)
• Hearing Date: 10 October 2016,15 February 2017,14 November 2016
• Subject Matter: Defamation,Tort,Malice,Civil Procedure,Striking Out
• Published date: 31 January 2018
• Defendant Counsel: Harpreet Singh Nehal SC, Foo Chuan Min Jerald and Goh Rui Xian Elsa (Cavenagh Law LLP)
• Court: High Court (Singapore)
• Citation: [2017] SGHC 137
• Year: 2017

Hoo Sheau Peng JC: Introduction

This is a defamation action brought by the plaintiff, Ezion Holdings Ltd (“Ezion”), against the defendant, Credit Suisse AG (“Credit Suisse”), in respect of an analyst report published by the Defendant on 19 May 2015 (“the Report”) and an e-mail sent by Credit Suisse on 20 May 2015 referring to the Report (“the E-mail”). I shall refer to the Report and the Email collectively as “the Publications”.

In Registrar’s Appeal No 212 of 2016 (“RA 212/2016”), Ezion appealed against the decision of the learned Assistant Registrar Wong Baochen (“the AR”) to strike out a plea of malice contained in para 11 of Ezion’s amended reply under O 18 r 19 of the Rules of Court (Cap 322, R5, 2014 Rev Ed) (“ROC”). I upheld the AR’s decision, and Ezion has appealed against my decision. I now set out my reasons.

Background facts The parties

Ezion is a company incorporated in Singapore and listed on the Singapore Exchange (“SGX”). It is in the business of owning oil rigs and vessels, and providing ship management services. Credit Suisse is a bank incorporated in Switzerland with a branch in Singapore.

The AMS suit

On 24 April 2015, Atlantic Marine Services BV (“AMS”) commenced High Court Suit No 401 of 2015 against Ezion (“the AMS suit”), alleging, inter alia, that Ezion was involved in a conspiracy to induce a third party company, Maersk Olie og Gas A/S (“Maersk”), to breach its charter contracts with AMS (“the conspiracy”).

On 18 May 2015, the AMS suit was reported by Bloomberg, the Straits Times and the Business Times. On the same day, Ezion issued a press statement through SGX stating, inter alia, its “strong opinion that the claims by AMS as reported by Bloomberg and The Straits Times are frivolous and without merit” (“the SGX statement”).

The Publications

On 19 May 2015, Credit Suisse published the Report, which was titled “Ezion Holdings Ltd – Examining the details of a lawsuit by AMS”. As its title suggests, the Report set out the details of the claims made by AMS against Ezion in the AMS suit. It also set out Ezion’s belief that the claims were “frivolous and without merit”. In its conclusion, the Report further stated that in light of the AMS suit, Credit Suisse viewed Ezion’s shares as being “expected to underperform”. I shall consider the contents of the Report more closely at [34].

The Report was authored by the Director of Credit Suisse’s Equity Research division, Mr Gerald Wong (“Mr Wong”), with the assistance of a research associate, Mr Shih Haur Hwang (“Mr Hwang”).

The Report was published on a part of Credit Suisse’s website that was accessible to Credit Suisse’s market professional and institutional investor clients upon entry of user identifications and passwords. As an analyst report, the Report was also published on a website controlled by Bloomberg, which was accessible to Bloomberg’s customers upon the entry of user identifications and passwords.

On 20 May 2015, Credit Suisse sent the E-mail to its market professional and institutional investor clients. The E-mail contained a bullet-point summary of the Report, a hyperlink to the full electronic copy of the Report on Credit Suisse’s website, and hyperlinks to eight other recent analyst reports on Ezion which were also published on Credit Suisse’s website.

On 17 June 2015, AMS discontinued the AMS suit against Ezion. The next day, Ezion’s solicitors wrote a letter informing Credit Suisse that Ezion considered the Report defamatory. They demanded that Credit Suisse, inter alia, remove the Report from publication and circulation, provide a written apology, and compensate Ezion by way of damages. On 25 June 2015, Credit Suisse’s solicitors replied by letter denying that the Report was defamatory in any way, and invited Ezion to provide more information about the AMS suit for a subsequent analyst report. The parties’ solicitors continued to exchange written correspondence in which both sides maintained their respective positions as to whether the Report was defamatory of Ezion.

Procedural history The pleadings

On 9 October 2015, Ezion commenced the present action against Credit Suisse, claiming in its statement of claim (“the Statement of Claim”) that the Publications were defamatory of Ezion. Ezion sought damages, an injunction to restrain Credit Suisse from further publication and costs.

The defence filed by Credit Suisse on 3 November 2015 (“the Defence”) stated that the natural and ordinary meaning of the words complained of in the Publications was not defamatory. Even if the words complained of in the Publications were found to be defamatory, it was pleaded in the Defence that: the contents of the Publications were “true in substance and fact” (“the plea of justification”); and the Publications were made “on an occasion of qualified privilege under common law” and/or “on an occasion of qualified privilege pursuant to s 12 of the Defamation Act (Cap 75, 2014 Rev Ed) [(‘Defamation Act’)], read with Part 1 to the Schedule therein” (collectively to be referred to as “the defence of qualified privilege”).

Ezion filed its reply on 24 November 2015, which was amended and filed again on 27 November 2015 (“the Reply”). To defeat the defence of qualified privilege, it was pleaded at para 11 of the Reply that the Publications “were published with actual malice as [Credit Suisse]… did not have an honest belief in the allegations complained of and/or published the allegations with a dominant improper motive”.

The striking out applications

On 5 January 2016, both parties filed striking out applications under O 18 r 19 of the ROC. Credit Suisse sought to strike out Ezion’s claim in its entirety on the ground that the words complained of in the Publications were not defamatory of Ezion. In the alternative, Credit Suisse sought to strike out the plea of malice set out in para 11 of the Reply. As for Ezion, it sought to strike out the plea of justification set out in paras 9, 10, 17 and 18 of the Defence.

The AR heard the parties’ striking out applications together. With regard to Credit Suisse’s application to strike out Ezion’s claim in its entirety, the AR relied on the principle in Chase v News Group Newspapers [2003] EMLR 218 (“Chase”) that there are three “levels” of meaning when considering whether the words complained of are defamatory by their natural and ordinary meaning. Chase has been applied by the Singapore courts (see Ng Koo Kay Benedict and another v Zim Integrated Shipping Services Ltd [2010] 2 SLR 860 at [16]–[17]), and the parties did not dispute the legal principle. The AR found that the words in the Publications could not have meant that Ezion was indeed guilty of the conspiracy and the other allegations levelled against it in the AMS suit (the “Chase Level One meaning”). However, the AR disagreed with Credit Suisse’s submissions that the Publications plainly did not give rise to reasonable grounds to suspect Ezion to be guilty of what was alleged in the AMS suit (the “Chase Level Two meaning”) or grounds to investigate Ezion’s guilt (the “Chase Level Three meaning”). The claim was hence not liable to be struck out with respect to the Chase Levels Two and Three meanings. The AR thus ordered Ezion to amend the Statement of Claim to plead only the Chase Levels Two and Three meanings, and not the Chase Level One meaning.

Next, the AR found that paras 9, 10, 17 and 18 of the Defence disclosed a reasonable defence of justification, and noted that the legal position on this issue was not entirely settled. The AR dismissed Ezion’s application to strike out the plea of justification.

Finally, the AR granted Credit Suisse’s application to strike out Ezion’s plea of malice, on the grounds that it was factually unsustainable and therefore “frivolous and vexatious” under O 18 r 19(1)(b) of the ROC, and that it may “embarrass or delay the fair trial of the action” under O 18 r 19(1)(c). On the issue of whether Credit Suisse had an “honest belief” in the truth of the allegations, the AR did not find any evidence at all giving rise to an inference that Credit Suisse was reckless as to the truth or falsity of the allegations made in the Publications. As for Credit Suisse’s alleged “dominant improper motive”, the AR found Ezion’s evidence on this issue to be circumstantial and impermissibly speculative. Accordingly, the AR struck out the plea of malice.

The Registrar’s Appeals

Subsequently, the parties appealed against the AR’s decisions. I heard the three appeals together.

In RA 214/2016, Credit Suisse appealed against the AR’s decision not to strike out Ezion’s claim in its entirety. In this regard, Credit Suisse argued that the “antidote” – of Credit Suisse reporting Ezion’s denial of the claims in the AMS suit – was sufficient to cure the “bane” (if any) of the defamatory sting in the offending words in the Publications: see Chan Cheng Wah Bernard and others v Koh Sin Chong Freddie and another appeal [2012] 1 SLR 506 at [18(e)]. In my view, it was not plain and obvious that the words in the Publications, read in context and in entirety, were incapable of conveying either of the defamatory meanings under Chase Levels Two or Three to an ordinary reasonable person. Accordingly, I dismissed the appeal.

RA 213/2016 concerned Ezion’s appeal against the AR’s decision not to strike out Credit Suisse’s plea of justification. I agreed with the AR that there was no reason to strike out the plea of justification, and affirmed the decision.

As for RA 212/2016, it involved Ezion’s appeal against the AR’s decision to strike out the plea of malice. Specifically, Ezion contested the striking out of the plea of malice on the basis that Credit Suisse did not have an honest belief in the truth of the Publications, as particularised in paras 11.1 to 11.6 of the Reply. Originally, in paras 11.7 to 11.15 of the Reply, Ezion also alleged that Credit Suisse had...