Oei Hong Leong v Ban Song Long David and Others

• Jurisdiction: Singapore
• Judgment Date: 19 July 2005
• Date: 19 July 2005
• Docket Number: Civil Appeal No 112 of 2004
• Court: Court of Appeal (Singapore)

Oei Hong Leong

Plaintiff

and

Ban Song Long David and others

Defendant

[2005] SGCA 35

Yong Pung How CJ

,

Chao Hick Tin JA

and

Kan Ting Chiu J

Civil Appeal No 112 of 2004

Court of Appeal

Tort–Defamation–Defamatory statements–First respondent making various remarks regarding appellant–Comments published in newspaper article–Test for determining natural and ordinary meaning of words–Whether natural and ordinary meaning of words defamatory–Tort–Defamation–Fair comment–Whether remarks constituting comments based on facts on matter of public interest–Whether fair-minded person could honestly make same remarks on facts proved–Whether comments an expression of respondents' honest opinion of appellant's conduct–Tort–Defamation–Justification–Appellant criticised as being obstructive, oppressive and irrational–Whether appellant in fact obstructive, oppressive and irrational–Tort–Defamation–Malice–Whether test for malice for fair comment different from qualified privilege–Tort–Defamation–Qualified privilege–Whether comments proportionate response to attacks–Whether first respondent having interest or duty to make such communication to public and whether public having corresponding interest to receive it

The appellant, through his company Sanion Pte Ltd (“Sanion”), had fiercely competed with another company (“98 Holdings”) for control of NatSteel Ltd (“NatSteel”). 98 Holdings ultimately succeeded in gaining control of NatSteel, but Sanion eventually became NatSteel's largest minority shareholder. David Ban was appointed to NatSteel's board of directors as 98 Holdings' nominee.

Subsequently, the NatSteel board decided to recommend a total dividend payout of $1 per NatSteel share. The NatSteel board convened an Extraordinary General Meeting (“EGM”) to consider a resolution which made part of the dividend payout contingent upon the passing of a resolution relating to amendments to NatSteel's memorandum and articles of association (“the M & A resolution”). The board also tabled a scrip dividend scheme which was made contingent upon the successful passage of the M & A resolution.

Sanion was concerned with the negative impact the resolution would have on its shareholding. Since the M & A resolution was a special resolution that needed at least 75% of the votes to pass, it was in a position to block the resolution.

In an attempt to assuage Sanion's concerns, 98 Holdings proposed a “whitewash” resolution, which was supported by the NatSteel board, on the eve of the EGM. At the EGM, Sanion's proxy complained bitterly about the whitewash proposal and indicated that Sanion had “concerns”. The EGM was eventually adjourned for one week for the matter to be considered by NatSteel, 98 Holdings and Sanion. During this period, neither the appellant nor Sanion made any attempt to clarify the proposal or to elaborate on the reasons for its opposition.

On the day of the adjourned EGM, The Business Times (“BT”) carried an article written by Catherine Ong on the events leading up to the adjourned meeting. Catherine Ong quoted the Securities Investors Association of Singapore (“SIAS”) as being “outraged” by the link between the payment of the special dividend and the passage of the M & A resolution.

The article also contained remarks from David Ban which suggested that the appellant's conduct amounted to an “obstructive action of a minority shareholder that is disadvantaging the majority”; that this was “not oppression by the majority but by the minority”; and that “If the shareholders don't get their dividends, they should be blaming him [the appellant]”. It also contained the remark that “Mr Ban said Mr Oei's opposition [to the resolutions] isn't rational”. The appellant subsequently sued the respondents alleging that the remarks were defamatory.

In the court below, the trial judge found the impugned words to be defamatory because they accused the appellant of being unreasonable and unfair in his opposition to the resolutions at the EGM and that reflected adversely on the appellant's character or reputation. However, the trial judge found in favour of the respondents on the defences of justification, qualified privilege and fair comment, and vicarious liability.

Held, dismissing the appeal:

(1) In determining whether the impugned words were defamatory in their natural and ordinary meaning, the court had to decide what meaning the words would have conveyed to an ordinary, reasonable person using his general knowledge and common sense: at [22].

(2) The impugned words did not just carry the sting that the appellant was being unreasonable and unfair in his opposition to the resolutions. They went further and labelled his opposition irrational. However, the defence of justification was made out. The appellant's conduct during the one week adjournment was obstructive, oppressive and irrational. Despite the fact that the appellant knew that he would scuttle the payment of the special dividend if he maintained his opposition to the proposals, the appellant withdrew into silence and refused to engage in any way with any of the interested parties: at [23], [29] and [30].

(3) The defence of qualified privilege accorded a right to a person whose character or conduct had been attacked, to answer such attack provided that the response was proportionate to the attack. In exceptional cases where it was necessary in the reply to bring in a third party's name in explanation, the publication would be privileged: at [31], [33] and [36].

(4) David Ban's remarks did not constitute a privileged response to SIAS's remarks as quoted in the BT article. SIAS's complaint was that NatSteel had reneged on its word to pay dividends of $1 a share and the impugned words did not have anything to do with this complaint: at [37] and [38].

(5) Although David Ban's remarks could be construed as a response to the criticisms from Sanion's proxy at the EGM, his response was not proportionate to the attack. Since the criticisms had been aired at a company EGM, the response should not have been published in BT for all its readers to see, but should have been restricted to the parties at the EGM and to other parties reasonably expected to have learnt of the attack: at [39].

(6) The defence of qualified privilege also applied to communications between parties who had a legal, social or moral duty to disclose such communications to persons who had a corresponding duty or interest to receive them. David Ban exceeded his right of reply because not all BT readers had a legitimate interest in receiving his views. It was not sufficient that the matter was one of general interest to the public: at [41] and [42].

(7) To make out the defence of fair comment, the party relying on the defence had to prove that (a) the words complained of were comments; (b) the comments were on a matter of public interest; (c) the comments were based on facts; and (d) the comments were ones which a fair-minded person could honestly make on the facts proved. The defence was not made out if the making of such comments was actuated by malice: at [43].

(8) Subject to the issue of malice, the defence of fair comment was made out. Any reasonable reader of the BT article would understand it to reflect David Ban's thoughts and reactions to the appellant's actions. The takeover of NatSteel was a matter of public interest. The comments were based on the developing controversy over the dividend payment, the linkage and whitewash proposal and the appellant's responses, and a fair-minded person could have shared Mr David Ban's exasperation with the appellant: at [46] and [47].

(9) The tests for malice in respect of qualified privilege and fair comment were not the same. A comment which fell within the objective limits of the defence of fair comment could lose its immunity only on proof that the maker of the comment did not genuinely hold the view he expressed. While there was no doubt that David Ban was ill-disposed towards the appellant, it did not follow that what he said did not reflect his honest belief, or was infected by malice. There was also no evidence that Catherine Ong wrote the BT article out of malice. She did what any journalist would have done by reporting on the positions of the principal players on the eve of the meeting: at [52], [53], [55], [56], [60] and [61].

[Observation: If the appellant had succeeded in his action against David Ban, 98 Holdings would have been vicariously liable because David Ban had spoken to Catherine Ong in his capacity as a director of both 98 Holdings and NatSteel: at [64] and [65].]

Blackshaw v Lord [1984] QB 1 (refd)

Chen Cheng v Central Christian Church [1998] 3 SLR (R) 236; [1999] 1 SLR 94 (refd)

Cheng Albert v Tse Wai Chun Paul [2000] 4 HKC 1 (folld)

Heytesbury Holdings Pty Ltd v City of Subiaco (1998) 19 WAR 440 (refd)

Jeyaretnam Joshua Benjamin v Goh Chok Tong [1983-1984] SLR (R) 745; [1984-1985] SLR 516 (refd)

Jeyasegaram David v Ban Song Long David [2005] 2 SLR (R) 712; [2005] 2 SLR 712 (refd)

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

Nirumalan K Pillay v A Balakrishnan [1997] 1 SLR (R) 953; [1997] 3 SLR 25 (refd)

Michael Khoo SC, Josephine Low and Andy Chiok (Michael Khoo & Partners) for the appellant

Davinder Singh SC, Adrian Tan and Cheryl Tan (Drew & Napier LLC) for the first and second respondents

Tan Chee Meng, Doris Chia and Chang Man Phing (Harry Elias Partnership) for the third and fourth respondents.

Kan Ting Chiu J

(delivering the judgment of the court):

1 This action which came on appeal before us arose out of statements made in the course of a corporate takeover. The struggle was for the control of NatSteel Ltd (“NatSteel”). Two companies, Sanion Pte Ltd (“Sanion”) and 98 Holdings Pte Ltd (“98 Holdings”), the second respondent, were the competing bidders.

2 Sanion was prominent businessman Mr Oei Hong Leong's vehicle for the...