Low Tuck Kwong v Sukamto Sia

• Judgment Date: 08 November 2013
• Date: 08 November 2013
• Docket Number: Civil Appeal No 173 of 2012
• Court: Court of Appeal (Singapore)

Low Tuck Kwong

Plaintiff

and

Sukamto Sia

Defendant

[2013] SGCA 61

Sundaresh Menon CJ

,

Chao Hick Tin JA

and

V K Rajah JA

Civil Appeal No 173 of 2012

Court of Appeal

Tort—Defamation—Damages—Whether general damages claimable—Whether aggravated damages claimable—Whether special damage included all consequential pecuniary loss—Whether loss not referable to damage to reputation claimable as special damage—Whether mere fact of publication with malice amounting to grounds for injunction

Tort—Defamation—Defamatory statements—Natural and ordinary meaning of words—Respondent sending letter demanding 50% of shares in company pursuant to alleged understanding between appellant (controlling shareholder) and respondent—Publication in context of initial public offering—Threshold for appellate intervention—Test for determining natural and ordinary meaning derived by way of inference—Whether meaning intended by publisher relevant—Whether denials accompanying republications effective in removing some defamatory sting

Tort—Defamation—Publication—Republication—E-mail sent from one office of global entity to another—Whether internal communication within global entity amounting to republication

Tort—Defamation—Qualified privilege—Whether countervailing duty not to publish under capital markets law prevented reliance on defence of qualified privilege—Whether duty or interest in receiving existed when party receiving had no regulatory power which might be invoked—Whether inclusion of irrelevant or unnecessary material took publication out of scope of qualified privilege—Whether express malice proven to defeat defence of qualified privilege

Tort—Malicious falsehood—Falsity—Proof of falsity—Whether possible for truth of matter for purposes of justification defence in defamation and falsehood for purposes of malicious falsehood claim to be both not proved—Whether appellant proved falsity of words complained of

Tort—Malicious falsehood—Malice—Inference of malice—Events relating to words complained of leaving no possibility of faulty but honest recollection—Whether proof of falsity led to inference of publication with express malice

Tort—Malicious falsehood—Reliefs—Declaratory relief—Appellant seeking declaration that words complained of false—Whether declaratory relief available in claim for malicious falsehood generally

Tort—Malicious falsehood—Special damage—Test of causation of special damage—Whether causation of special damage proven—Whether words ‘calculated to cause pecuniary damage’—Effect of s 6 (1) (a) Defamation Act (Cap 75, 1985 Rev Ed) —What damages recoverable—Section 6 (1) (a) Defamation Act (Cap 75, 1985 Rev Ed)

In 2007, PT Bayan Resources Tbk (‘PT Bayan’), a coal mining company, commenced preparations for its initial public offering (‘IPO’) on the Indonesian Stock Exchange (‘IDX’). PTTrimegah Securities Indonesia Tbk (‘PTTrimegah’) was the domestic lead managing underwriter, Merrill Lynch (Singapore) Pte Ltd (‘Merrill Lynch Singapore’) (which was assisted by PTMerrill Lynch Indonesia (‘Merrill Lynch Indonesia’)) was the sole book runner and lead international selling agent, and Macquarie Capital (Singapore) Pte Ltd was the co-lead manager and the international selling agent (collectively, ‘the IPO advisors’).

On 10 July 2008, the respondent's Indonesian lawyers notified the appellant, the president commissioner and controlling shareholder of PT Bayan, and PT Bayan (‘the First Letter’), that he had ‘invest [ed] and facilitate [d] ’ the appellant's establishment of a coal mining business in Indonesia in return for 50% of the shares in the resulting coal mining company. He asserted his right to 50% of the shares in PT Bayan and threatened civil and criminal suit against the appellant and PT Bayan if his demand was not acceded to. On 15 July 2008, the respondent's Indonesia lawyers sent a second letter to the appellant, PT Bayan, and PT Bayan's lawyers (‘the Second Letter’), which was identical to the First Letter. On 21 July 2008, the respondent's Indonesian lawyers sent a third letter to (a) the Chief of the Indonesian Capital Market and Financial Institutions Supervisory Agency (‘BAPEPAM’), the Indonesian capital market regulator; (b) the Director in Chief of the IDX; (c) PTTrimegah; (d) Merrill Lynch Indonesia at a Jakarta address; and (e) PTMacquarie Securities Indonesia and PTMacquarie Konultan at a Jarkarta address identical to that of Merrill Lynch Indonesia (‘the Third Letter’). The Third Letter demanded that the IPO be suspended because of the dispute between the appellant and the respondent. Republications of the letters were made in Indonesia and in Singapore when they were disclosed to the various parties and professionals in the IPO process. The letters or their summarised contents were also republished in, inter alia, two Indonesian newspapers, PT Bayan's ‘Pricing Supplement to the Preliminary Offering Memorandum’, and PT Bayan's ‘International Final Offering Memorandum’.

BAPEPAM informed PT Bayan's IPO advisors that they ‘would have to clear any disputes on the shares before the IPO could proceed’. On 24 July 2008, PT Bayan informed BAPEPAM and IDX that the appellant would withdraw his shares from the IPO vendor shares sale. On 4 August 2008, BAPEPAM issued an ‘Effective Statement’ which allowed the IPO to proceed. The IPO was launched on 12 August 2008, four days later than originally planned, and without the appellant's vendor shares.

The appellant commenced action against the respondent, claiming that the letters and the republications of them were defamatory of him and that they were malicious falsehoods. The respondent resisted the claims, claiming instead that he had, in 1995, a common understanding with the appellant, to whom he had given S$3 m to ‘invest and facilitate’ his establishment of an Indonesian coal mining business on the basis that if it was established, he would be entitled to a 50% share and if it was not, the appellant would return him the money (‘the Common Understanding’). On this basis, the respondent cross-claimed in breach of contract, proprietary estoppel, constructive trust, breach of fiduciary duty, and money had and received.

The trial judge who tried the issue of liability (with damages ordered to be assessed separately) dismissed the claims and cross-claims. The appellant appealed against the trial judge's findings as to the natural and ordinary meaning of the words complained of, the dismissal of his claim in defamation, and the dismissal of his claim in malicious falsehood. No cross-appeal was brought by the respondent against the trial judge's dismissal of his cross-claims.

Held, allowing the appeal in part:

(1) It was not sufficient for an appellant merely to show that one meaning of the words complained of was preferable to another; an appellate court would not intervene and disturb a trial judge's finding of the natural and ordinary meaning of the words complained of unless it was satisfied that the he was wrong: at [27] .

(2) In determining the natural and ordinary meaning of the words complained of on the basis of an inference, the test was what the ordinary reasonable person would infer in the given context: at [29] .

(3) What could be relied on in determining the natural and ordinary meaning of the words complained of was that which could fairly be treated as part of the ordinary reasonable person's ‘general knowledge’. The extended meaning which the appellant sought to attribute to the letters, viz,that he was seeking to mislead the public, required knowledge of extrinsic facts which might include the legal and regulatory context of an IPO, the documents already published, and the specialist knowledge of IPO professionals. The appellant, however, did not plead an innuendo. These were not within the ‘general knowledge’ of the ordinary reasonable person even in the IPO context. The appellant's arguments for the words bearing the meaning that the appellant was seeking to mislead the public was therefore rejected: at [31] and [32] .

(4) For the same reasons, the argument that they held the meaning that the appellant had committed a crime was also rejected. Further, the mere statement that criminal suit would be brought against the appellant did not mean that a crime had been committed: at [34] .

(5) The meaning intended by the publisher was irrelevant for the purposes of determining what meaning the words complained of bore; the test was an objective one: at [36] .

(6) There was a republication of the Third Letter to Merrill Lynch Singapore in Singapore in the form of an e-mail sent from Merrill Lynch Indonesia to Merrill Lynch Singapore. In the law of defamation, each communication of a defamatory matter to a publishee was a separate publication, such that if a letter was read by a series of persons, in truth, a series of publications had taken place. The respondent's argument that internal communication within a global entity could not be considered a republication was inconsistent with this analysis and thus rejected: at [40] .

(7) Merely pointing out that the denials accompanying the republications in question were made by PT Bayan and the appellant was not sufficient to lead to the conclusion that these denials, as ‘antidotes’, were completely ineffective and ameliorating the defamatory sting of a statement. In the final analysis, it was an evaluation of the actual words of the ‘antidote’ which was of primary importance. The denials accompanying the republications were more than mere denials in that they all purported to provide at least some factual basis or reason for denying the allegations. They were therefore not completely ineffective in removing some of the defamatory sting of the statements. The trial judge was therefore not wrong in holding that the republications held a lower defamatory meaning: at [45] , [49] and [50] .

(8) The ordinary framework of analysis in relation to the defence...