Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and Others

• Judge: Karthigesu JA
• Judgment Date: 12 November 1997
• Neutral Citation: [1997] SGCA 53
• Citation: [1997] SGCA 53
• Defendant Counsel: Harry Elias SC and Lawrence Quahe (Harry Elias & Partners),Michael Hwang SC and Chan Hian Young (Allen & Gledhill) (on watching brief)
• Published date: 19 September 2003
• Plaintiff Counsel: Suresh Damodara and Dixon Ng (Gabriel Peter & Partners)
• Date: 12 November 1997
• Docket Number: Civil Appeal No 70 of 1997
• Court: Court of Appeal (Singapore)
• Subject Matter: Civil Procedure,O 18 r 19(1)(a) Rules of Court 1996,O 18 r 19(1)(d) Rules of Court 1996,Tort,Process of court to be used bona fide and properly,Abuse of process,Whether company liable in tort for all wrongful acts and omissions of persons controlling management of its business,Defamation,Whether appellants able to raise this point before appellate court,What constituted abuse,Whether reasonable cause of action disclosed in statement of claim,Whether proof of tort by a company automatically proved managing directors guilty of tort as well -Circumstances where director may be liable for tort committed by his company,Whether there was abuse of process of court,Companies,Whether case devoid of merit,Directors,Tortious liability,Capacity,Principles applicable,Whether "act" of board in a form of a resolution an "act" of company,Whether relevant facts fully pleaded,Pleadings,Whether company directors personally liable for alleged libel in board resolution if allegations were made out at full trial,Libel,Striking out,O 18 r 19 Rules of Court 1996,Reasonable cause of action,Whether weakness of case and likelihood of failure at trial grounds for striking out action,Appellants' failure to raise respondents' reliance on grounds beyond O 18 r 19(1)(a) in support to their striking out application,Resolution passed by board of company,Whether such resolution was company's decision,Liabilities,Whether triable issues involved,Resolutions,Factors to consider in determining liability

Judgment:

YONG PUNG HOW CJ

(delivering the grounds of judgment of the court): This appeal arises out of the decision of Lai Siu Chiu J on 2 April 1997 to strike out the appellants` claim for libel pursuant to O 18 r 19 Rules of Court 1996 against the first, fourth and fifth respondents.

2.The appellants are advocates and solicitors practising as a firm. They were initially appointed by Promenade Properties Pte Ltd (the company) to represent the company in the sale and purchase transaction of a building owned by the company (the Promenade). The respondents were the directors of the company during the relevant period. The action for defamation initiated by the appellants centred around a board resolution passed by the respondents on 10 January 1997 to dismiss the appellants as solicitors in the transaction. The appellants alleged that the resolution contained defamatory remarks against them.

3.The appellants, being dissatisfied with Lai Siu Chiu J`s decision, petitioned to this court to reverse the learned judge`s finding and to restore the order made by the assistant registrar below to dismiss the first, fourth and fifth respondents` application to strike out the action.

4.The appeal came up for hearing before us on 20 October 1997. After hearing lengthy arguments by counsel on both sides, we allowed the appeal and dismissed the respondents` application to strike out the writ of summons and statement of claim. We will now set out the grounds of our decision.

5. The facts

On 20 February 1997, the appellants brought an action against the first to fifth respondents, directors of the company, by way of a writ of summons, alleging that the respondents had falsely and maliciously, jointly and/or severally, published and/or caused to be published, defamatory words which concerned the way the appellants conducted their affairs in their office and profession. The basis upon which the appellants founded their claim was a board resolution dated 10 January 1997.

6.Before going into the alleged defamatory words in question, some mention of the background to the passing of the resolution was required as it provided a clearer picture of the context in which the resolution was made. The first to fifth respondents, together with three others, (who were not parties to the action), were directors of the company. On 25 September 1996, the Promenade, a piece of property owned by the company, was sold for $270,865,000. By a shareholders` resolution dated 25 September 1996, the appellants, together with another firm, Wee Ramayah & Partners, were appointed to jointly and severally act and represent the company in the sale. The deposit, which amounted to 10% of the purchase price, was held by the appellants in a fixed deposit account, with two lawyers (one from the appellants and one from Lee & Lee, the purchaser`s solicitors) as joint signatories to the moneys held under stakeholdership. The company wanted the appellants to confirm that the interest on the stakeholders` deposit would be paid to the company. The alleged defamatory statements were made in relation to the dismissal of the appellants as the company`s solicitors in the transaction after unsatisfactory replies by the appellants as to the entitlement of the interest accrued from the 10% deposit.

7.The contents of the directors` resolution were as follows:

Directors` Resolution in Writing

Whereas the directors of the company were presented with the final form of sale and purchase agreement by Probo Pacific Ltd and required to sign the same on the basis that it had been negotiated and agreed with the purchaser.

Whereas at the advice of Messrs Wee Ramayah, the company (or its authorised persons) wrote to Messrs Gabriel Peters as soon as practicable after the execution of the asale and purchase agreement with the purchaser, to require them to confirm that the interest on the stakeholders` deposit would be paid to the company.

Whereas Messrs Gabriel Peters has persistently refused to reply to the same.

Whereas Messrs Gabriel Peters failed to inform or advise the company with respect to the issue of stakeholders` interest.

Whereas Messrs Gabriel Peters are claiming a right to stakeholders` interest without prior agreement despite the company`s clear position that it has never authorised Messrs Gabriel Peters to retain such interest for their own account.

It is hereby resolved as follows:

1 The company do and hereby dismiss Messrs Gabriel Peters and terminate their appointment as joint and several solicitors for the sale of the company`s property known as `The Promenade`, 300 Orchard Road..

2 The majority directors be and are hereby authorised to take the necessary to (i) to transfer the joint stakeholder from Messrs Gabriel Peters to Messrs Wee Ramayah. and (ii) seek to recover all stakeholders` interest from Messrs Gabriel Peters.

3 In connection but without limitation thereto, the majority directors be and are hereby authorised to:

i lodge a complaint in the name of the company against Messrs Gabriel Peters with the Law Society of Singapore; and

ii commence civil action in the name of the company against Messrs Gabriel Peters.

4 The majority directors be and are hereby authorised to take all necessary action in relation to the same.

5 That the majority directors be and are hereby authorised to (i) appoint such firm of lawyers to act for the company in respect of the aforedescribed actions as they shall deem fit and (ii) determine and agree their fees with them.

Dated 10 January 1997

8.In their statement of claim, the appellants contended that the above defamatory remarks were published and re-published to a list of third parties, including the following: (i). the person to whom it was dictated and/or was instructed to so dictate

(ii). the person who transcribed it onto the computer

(iii). the person or persons who filed or otherwise dealt with the said publication or copy thereof after it was signed by the respondents

(iv). Wee Ramayah & Partners

(v). Lee & Lee

(vi). Drew & Napier

(vii). Thomas Enslow

(viii). Michael Chye

(ix). Gosta Pjorkenstam.

The appellants said that the words, in the context in which the were published, in their natural and ordinary meaning and/or by way of innuendo, meant and were understood to mean, that: (i). the appellants were not diligent in the handling of legal matters of their clients in that the appellants had failed to advise the company on the issue of interest on stakeholders` moneys

(ii). the appellants did not pay proper attention to their clients` interests in that the appellants had failed or had neglected to bring to the company`s attention the issue of the interest on the stakeholders` moneys

(iii). the appellants` behaviour was unbefitting of that of advocates and solicitors

(iv). the appellants were unprofessional in the conduct and handling of their clients` matters

(v). the appellants did not take proper care of their clients` interests

(vi). the appellants` conduct was improper, unethical and unbecoming in their practice as advocates and solicitors

(vii). the appellants` conduct was improper in that they refused to respond to the clients` correspondence

(viii). the appellants` conduct was motivated by self-interest, to the prejudice and detriment of their clients

(ix). the appellants had acted dishonestly and/or unlawfully in retaining the interest on stakeholders` moneys

(x). the appellants were dishonest, lacking in integrity and not of good character.

9.On 3 March 1997, the first, fourth and fifth respondents filed a summons-in-chambers to strike out the appellants` claim under O 18 r 19(1)(a) Rules of Court 1996. The second and third respondents were not parties to the application. The hearing came before the assistant registrar on 7 March 1997, who dismissed the application. The respondents relied broadly on three arguments. The first was that the respondents, being directors of the company, made the directors` resolution in the course of their duties as company directors and in the best interests of the company. Thus, they could not be sued personally for any alleged libel contained in the resolution. The second argument was that the appellants had brought this action for an unfair collateral purpose, namely, to apply pressure on the respondents to refrain from taking any action against the appellants as authorised by the resolution. The respondents` counsel, in support of this argument, pointed to several factors: the company had not been named in the action; the order in which the respondents had been named in the writ; the specific reference to the first respondent, the former Chief Justice, in the paragraphs in the statement of claim dealing with aggravated damages. Thirdly, there was no cause of action against the first respondent as there was no allegation that he committed the act of publication. With regard to the first argument, the assistant registrar felt that, if it was the respondents` case that they acted in the best interests of the company and in their capacity as directors of the company, then all this meant was that they might be able to raise the defence of qualified privilege. It did not mean that the respondents had no reasonable cause of action against them. As for the second argument, the assistant registrar was of the view that the factors were insufficient grounds on which to conclude that the respondents were proceeding against the appellants for unfair collateral purposes. The last argument was also rejected as para 2 of the statement of claim set out the allegation that all the respondents jointly and/or severally published the allegedly libelous resolution. The complaint put forward by the respondents was really that there were no particulars as to how the first respondent participated in the act of publication. This, the assistant registrar felt, could be made the subject of an application for further and better particulars.

10.The first, fourth and fifth respondents...