Price Waterhouse Intrust Ltd v Wee Choo Keong and Others

• Court: Court of Appeal (Singapore)
• Judge: Karthigesu JA
• Judgment Date: 15 July 1994
• Neutral Citation: [1994] SGCA 97
• Citation: [1994] SGCA 97
• Defendant Counsel: Timothy Ong (Timothy Ong & Associates)for the fourth and the fifth respondents,Christina Goh (Christina Goh & Co),Peter Yap (Peter Yap & Co)
• Plaintiff Counsel: Davinder Singh and Dedar Singh (Drew & Napier)for the appellants
• Published date: 19 September 2003
• Docket Number: Civil Appeal No 10 of 1994
• Date: 04 November 1994
• Subject Matter: Persons allegedly defamed not named in published letter,Identification,Untrue allegation in letter based on instructions of clients,Publication of letter alleging that sale of an asset of the company was below market value,Defamatory statements,Appellants the receivers and managers of a company in liquidation,Publication of letter alleging that sale of company's asset was below market value to Official Receiver and bank holding debenture,Appellants receivers and managers of company in liquidation,Whether sustainable if basic facts relied on turn out to be untrue,Applicable test,Publication of letter to Official Receiver and bank holding debenture,Malice,Tort,Whether solicitors and their clients with interest in the company covered by privilege,Whether letter was defamatory,Fair comment,Whether solicitor's imprudence in not verifying claims of client amounts to malice,Defamation,Qualified privilege,Publication of letter alleging that sale of company's asset was below market value and conflict of interest,Letter written by solicitors acting for persons having shares in liquidated company

Cur Adv Vult

This appeal arose from an action in libel instituted by the appellants against the respondents for damages in respect of a letter dated 29 July 1988 written by the first respondent to the Official Receiver as well as The Hongkong And Shanghai Banking Corp Ltd. The appellants` claim in the court below was dismissed by the learned trial judge.

The facts

The appellants are a trust company incorporated in Singapore and undertake in the course of their business assignments as receivers and managers of companies or firms; they also undertake assignments as trustees of estates. The first, second and third respondents are the partners of a firm of advocates and solicitors practising in Malaysia under the name and style of `Wee Choo Keong & Fazir` (the firm). The fourth to the ninth respondents were at the material time clients of the firm.

On 26 August 1987, The Hongkong And Shanghai Banking Corp Ltd (the bank) appointed the appellants as receivers and managers of a company, Quality Oil Pte Ltd (Quality Oil), pursuant to the terms of a debenture and a further debenture dated 17 March 1983 and 29 June 1985 respectively executed by that company in favour of the bank. Subsequently, the company was wound up by an order of court on 4 December 1987, with the Official Receiver being appointed liquidator. The winding up of the company did not affect the appellants` role as receivers and managers and they continued with their task of realizing the assets of the company which then consisted principally of: (i) a leasehold property, and (ii) a lube oil recycling plant, miscellaneous equipment and furniture. All these assets were sold to Pioneer Refinery Pte Ltd (Pioneer) on 25 February 1988 for the following sums: $560,000 for the leasehold property and $1.24m for the plant, miscellaneous equipment and furniture.

On 29 July 1988, the firm sent a letter to the Official Receiver with a copy to the bank and also to their clients. The letter was written by the first respondent and stated as follows:

Dear Sir

Quality Oil Pte Ltd, Singapore (In Receivership)

Lube Oil Recycling Plant on Plot A 7640

Mk 7 at No 10 Tuas Ave 13, Singapore

We act for Mr Chua Teng Chok, Mdm Lee Kheng Leong, Mr Lou Chi Tong, Mr Woo Yin Khee, Mr Vincent Khoo and Encik Abdul Wahab Abdul Aziz who are shareholders of a company called Concrete Engineering Products Sdn Bhd (CEPCO).

We are informed that CEPCO has a subsidiary company called Quality Oil (M) Sdn Bhd holding 1,739,300 shares in Quality Oil Pte Ltd, Singapore.

We have been informed by Price Waterhouse Intrust Limited that the abovecaptioned company is in liquidation and, therefore, you are taking charge of the same.

We are informed that the abovecaptioned company`s Lube Oil Recycling Plant on Plot A 7640 Mk 7 at No 10 Tuas Ave 13, Singapore, has been sold to Pioneer Refinery Pte Ltd (Pioneer) for less than $1m when the same was worth much more.

According to the registered particulars of Pioneer in the Registry of Companies and Businesses (Singapore), it transpired that out of these 700,001 paid-up share capital of $1.00 each, 699,999 shares are owned by Mdm Leong Oi Kwan, who is the wife of Mr Wong Kon Nam. For your easy reference, we enclose a photocopy of the search on the said company. You will note from your records that Mr Wong Kon Nam is the chairman of Quality Oil (M) Sdn Bhd, Malaysia, and Quality Oil Pte Ltd, Singapore, and the managing director of CEPCO.

It appears from the above that the purchase of the said plan by Pioneer was not in good faith and the personalities involved in the sale and purchase of the said property were tainted with conflict of interest, to say the least, for Pioneer appears on record to be a nominee company of Mr Wong Kon Nam.

Our clients instruct us to seek your opinion as to whether the sale and purchase of the said plant, under such circumstances, has violated the Singapore Companies Act. We are copying this letter to Hongkong and Shanghai Banking Corp, the debenture holder so as to keep them informed.

We look forward to hearing from you in due course.

Yours faithfully,

The appellants were sent copies of the letter by both the Official Receiver and the bank. Subsequently, the appellants themselves also received a letter dated 2 August 1988 from the firm. This letter was expressed to be written on behalf of a company, Jurutera Konsultants (SEA) Sdn Bhd (Jurutera), a creditor of Quality Oil, although it contained the same allegations as those set out in the letter dated 29 July 1988.

On 5 August 1988, the appellants wrote to the firm denying that there had been any bad faith or conflict of interest involved in the sale of the plant to Pioneer and demanding the publication of an apology. The firm responded by their letter dated 8 August 1988, the content of which was as follows:

We refer to your letter of 5 August 1988 and are very surprised to learn that you are offended by our letter of 29 July 1988 to the Official Receiver, which was written in good faith.

We very much regret to note that you have misconstrued the contents of our said letter to mean that you have acted in bad faith and conflict of interest. If you were to read our said letter carefully, you will, no doubt, come to one conclusion, that is, fair comments made based on the facts stated in our said letter. You will also agree with us that it will not be unreasonable for our clients to arrive at that conclusion under the circumstances.

Please be assured that our letters of 29 July and 2 August 1988 were not intended to mean the way that you have interpreted it to be. Therefore, the apology demanded by you will not be necessary as the content of our said letters were fair comment made based on the available facts before our clients and us.

Please let us know the relevant details together with the exact purchase price of all the properties of Quality Oil Pte Ltd which was purchased by Pioneer Refinery Pte Ltd so as to enable us to advise our clients accordingly.

Proceedings below

On the same day the appellants, through their solicitors, reiterated to the firm their demand for an apology. No apology being forthcoming, the appellants commenced proceedings against all the partners of the firm as well as their clients on whose behalf the letter was written. The appellants claimed damages for the libel contained in the letter dated 29 July 1988 (the letter). In their statement of claim, the appellants, having set out the entire letter, pleaded the following defamatory meaning the letter conveyed:

5 In their natural and ordinary meaning, the said words [ie words in the letter] meant and were understood to mean that in so far as the receivership of Quality Oil Pte Ltd and/or the sale of Lube Oil Recycling Plant was concerned, the plaintiffs:

(i) had acted in bad faith; and/or

(ii) were guilty of a conspiracy; and/or

(iii) were guilty of a professional and/or fiduciary conflict of interest; and/or

(iv) violated the law of Singapore; and/or

(v) were negligent; and/or

(vi) had acted in a manner which justified and called for an investigation by the Official Receiver and/or the Hongkong & Shanghai Banking Corp.

6 By reason of the publication of the said words referred to in para 4 above, the plaintiffs have been gravely injured in their reputation in their profession and/or business.

In their defence, the respondents denied that the letter was meant and was understood to refer to the conduct of the appellants. They averred that the words complained of concerned the position of one Wong Kon Nam (Wong) in Quality Oil and Pioneer, and his role in the sale and purchase of the plant and equipment of Quality Oil; that if the words were of and concerning the appellants, the words did not bear and were not understood to bear or were not capable of bearing any of the meanings alleged by the appellants; and that if the words were of and concerning the appellants, they meant and were understood to mean that the appellants might have failed to recognize that the parties to the sale and purchase were not at arm`s length and consequently failed in their duty to make such proper and necessary enquiries to ensure that the selling price was the best possible price that could have been obtained in the open market. The respondents further averred that if the words were defamatory of the appellants, they were published on an occasion of qualified privilege, and that in the further alternative, that the words contained in paras 5 and 6 of the letter were fair comment made in good faith and without malice upon a matter of public interest. In their reply, the appellants joined issue with the respondents in their defence and went on to aver that the first, second and third respondents published the words complained of with actual malice.

From these pleadings there arose the following issues for trial:

(i) whether the words complained of were published of and concerning the appellants;

(ii) whether the words were defamatory of the appellants as alleged or at all;

(iii) whether the words were published on an occasion of qualified privilege;

(iv) whether the words in paras 5 and 6 of the letter were fair comment made in good faith on a matter of public interest; and

(v) whether the first three respondents were actuated by malice in publishing the letter to the Official Receiver and the bank.

Before the action came on for trial, on 3 April 1992, the appellants made an application for an order that the defence of the respondents be struck out and interlocutory judgment be entered for the appellants, on the ground that the respondents had failed or refused to give inspection of documents on 8 September 1989 and to make proper discovery pursuant to the directions of the High Court made on 2 August 1991. The application was allowed as against the second to the ninth respondents, and interlocutory judgment was entered against...