Lim Eng Hock Peter v Lin Jian Wei and another

• Jurisdiction: Singapore
• Judgment Date: 09 July 2008
• Date: 09 July 2008
• Docket Number: Suit No 514 of 2007 (Summons No 4849 of 2007)
• Court: High Court (Singapore)

Lim Eng Hock Peter

Plaintiff

and

Lin Jian Wei and another

Defendant

[2008] SGHC 108

Tan Lee Meng J

Suit No 514 of 2007 (Summons No 4849 of 2007)

High Court

Civil Procedure–Striking out–Determination of question of law or construction of document without trial–Claim for defamation–Statements in Explanatory Statement alleged to be defamatory in natural and ordinary meaning as well as by innuendo–Whether defamation claim should be struck out for want of reasonable cause of action, being scandalous, frivolous or vexatious or abuse of process of court–Whether natural and ordinary meaning of words alleged to be defamatory may be determined under O 14 r 12 Rules of Court (Cap 322, R 5, 2006 Rev Ed)–Order 14 r 12 and O 18 r 19 Rules of Court (Cap 322, R 5, 2006 Rev Ed)–Tort–Defamation–Statements in Explanatory Statement alleged to be defamatory in natural and ordinary meaning as well as by innuendo–Whether defamation claim should be struck out for want of reasonable cause of action, being scandalous, frivolous or vexatious or abuse of process of court–Whether natural and ordinary meaning of words alleged to be defamatory may be determined under O 14 r 12 Rules of Court (Cap 322, R 5, 2006 Rev Ed)

The plaintiff, Mr Peter Lim Eng Hock (“Mr Lim”), a businessman who was involved in the formation of the Raffles Town Club Pte Ltd (“the company”) and the setting up of the Raffles Town Club (“the club”), claimed against the defendants, the only shareholders and directors of the company, for defamation.

In November 2001, the company was sued by dissatisfied members of the club for failing to deliver to them a premier and exclusive club. In August 2003, the Court of Appeal held that there was a breach of an implied promise to deliver to the plaintiffs a premier and exclusive club, and eventually it was ordered that the company was to pay $3,000 in damages to each claimant. A sum of around $45m was required to compensate members of the club. The company claimed that it did not have sufficient funds to pay this amount and thus proposed a Scheme of Arrangement (the “Scheme”) under s 210 of the Companies Act (Cap 50, 1994 Rev Ed) (the “Act”), whereby members, as Scheme Creditors, were required to recover the $3,000 damages by way of cash instalments, vouchers for use in the club, reduction of transfer fees of membership of the club or a combination of these options. Mr Lim claimed that the defendants sought, in the Explanatory Statement that was furnished to Scheme Creditors in accordance with s 211 of the Act, to deflect the blame for the company's financial woes onto the former shareholders and former directors and that, in the process, portions of the paragraphs in the said statement were defamatory, both in their natural and ordinary meaning as well as by way of innuendo.

The defendants applied to strike out Mr Lim's action on the grounds that the words complained of did not bear any meaning defamatory of Mr Lim, that no reasonable cause of action had been disclosed and that the claim was scandalous, frivolous or vexatious or was otherwise an abuse of the process of the court. They also sought a determination under O 14 r 12 of the Rules of Court (Cap 332, R 5, 2006 Rev Ed) that the allegedly defamatory words referred to in the statement of claim did not bear any defamatory meaning because what was stated in the Explanatory Statement was true and could have no defamatory meaning.

Held, dismissing the application:

(1) As a general rule, the courts would be rather reluctant to strike out an action. The court's power to strike out an action was a draconian one and should not be exercised too readily unless the plaintiff's case was wholly devoid of merit: at [23].

(2) Mr Lim's case was that the defendants defamed him by omitting from the Explanatory Statement important and relevant information that would have changed the dismal picture painted by the defendants to the Scheme Creditors about him and the company's former shareholders. Even if statements in a report were, without more, true, there may, in appropriate circumstances, be a triable issue as to whether they were defamatory if other important relevant information that would have given a totally different picture was omitted. Mr Lim should thus be allowed to prove his allegations at a trial, and especially so since he was also alleging that he had been defamed by way of innuendo: at [26], [30] and [32].

(3) Mr Lim had pleaded the meanings of the offending passages in the Explanatory Statement which may be adopted by a reader of the said statement, inclusive of the innuendos that may arise from a reading of the same. It was not for the court to decide at this preliminary stage whether or not there was any merit in Mr Lim's assertions. What was relevant for the purpose of a striking out application was that Mr Lim's case was not so hopelessly devoid of merit that the court should exercise its draconian power to stop the claim from proceeding to trial: at [34].

(4) Given that a reasonable cause of action connoted a cause of action that had some chance of success when only the allegations in the pleading were considered, there was no basis for striking out Mr Lim's action on the ground that it disclosed no reasonable cause of action, and especially when whether or not the Explanatory Statement was solely focused on its statutory purpose was a hotly-contested issue. No strong evidence was adduced as to why the action should be regarded as scandalous, frivolous or vexatious. In addition, without strong evidence that Mr Lim was seeking something beyond the protection and vindication of his reputation, the court was in no position to conclude that the present action was an abuse of process: at [35] to [37].

(5) The trial of a preliminary issue under O 14 r 12 of the Rules of Court was intended to save time, and the natural and ordinary meaning of words that were alleged to be defamatory may be determined under O 14 r 12. However, in the present case, it was preferable that there be no preliminary ruling under O 14 r 12. The parties had already exchanged their lists of documents more than seven months ago and the trial had been fixed for the next month. At this very late stage, it would be far better to allow Mr Lim's action to proceed to trial than to have the parties bog themselves down with an appeal as to whether there should be a trial in the first place. A preliminary ruling on the natural and ordinary meaning of the allegedly defamatory words would not fully dispose of the case as Mr Lim would be entitled to prove at trial that there were facts extrinsic to the words that gave rise to defamation by way of innuendo: at [40] to [42].

Dundee Bancorp Inc v Fairvest Corp [2005] OJ No 2699 (folld)

Gabriel Peter & Partners v Wee Chong Jin [1997] 3 SLR (R) 649; [1998] 1 SLR 374 (folld)

Goldsmith v Sperrings Ltd [1977] 1 WLR 478 (folld)

John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50 (refd)

Keays v Murdoch Magazines (UK) Ltd [1991] 1 WLR 1184 (refd)

McCann v Scottish Media Newspapers Ltd [2000] SLT 256 (refd)

Microsoft Corp v SM Summit Holdings Ltd [1999] 3 SLR (R) 465; [1999] 4 SLR 529 (refd)

Murugason v The Straits Times Press (1975) Ltd [1983-1984] SLR (R) 311; [1984-1985] SLR 334 (refd)

Oei Hong Leong v Ban Song Long David [2005] 3 SLR (R) 608; [2005] 3 SLR 608 (refd)

Tilling v Whiteman [1980] AC 1 (refd)

Companies Act (Cap 50,1994Rev Ed)ss 210, 211

Rules of Court (Cap 322,R 5, 2006 Rev Ed)O 14r 12, O 18r 19 (consd)

K Shanmugan SC, Muthu Arusu s/o Murugayair and Tay Yong Seng (Allen & Gledhill LLP) for the applicants/defendants

Alvin Yeo SC, Chan Hock Keng and Koh Swee Yen (Wong Partnership LLP) for the respondent/plaintiff.

Judgment reserved.

Tan Lee Meng J

1 The plaintiff, Mr Peter Lim Eng Hock (“Mr Lim”), a businessman who was involved in the formation of the Raffles Town Club Pte Ltd (“the company”) and the setting up of the Raffles Town Club (“the club”), claims that he was defamed by the first defendant, Mr Lin Jian Wei, and the second defendant, Ms Tung Yu-Lien Margaret, who are presently the only shareholders and directors of the company.

2 The defendants applied to strike out Mr Lim's action. They also sought a determination under O 14 r 12 of the Rules of Court (Cap 332, R 5, 2006 Rev Ed) that the allegedly defamatory words referred to in the statement of claim did not bear any defamatory meaning.

Background

3 In 1996, the company was set up to own and manage a proprietary club to be constructed at the junction of Dunearn Road and Whitley Road. At that time, its shareholders and directors were Mr Lawrence Ang Yee Lim (“Mr Ang”), Mr William Tan Leong Ko (“Mr Tan”) and Mr Dennis Foo Jong Long (“Mr Foo”).

4 In November 1996, the company invited selected members of the public to join the club at a discounted price of $28,000. The invitees were informed about the club's “exclusive and limited membership”. They were also told that they were joining the most “prestigious private city club” in Singapore. The membership drive was rather successful and many “founding” members paid $28,000 each to join the club.

5 In the initial months after the club began its operations in March 2000, its members had to put up with overcrowding at the club's premises. The founding members did not realise at that time that their supposedly premier and exclusive club had more than 19,000 members.

6 In 2000, the company, its then shareholders and Mr Lim were embroiled in the following suits that created unwanted adverse publicity:

(a) In the first suit, Mr Lim sued the former shareholders of the company (Mr Ang, Mr Tan and Mr Foo) for specific performance of an...