Syarikat Bekalan Air Selangor v Tony Pua Kiam Wee [2015] 6 MLJ 187

SYARIKAT BEKALAN AIR SELANGOR SDN BHD v TONY PUA KIAM WEE [2015] 6 MLJ 187

Federal Court (Putrajaya)

Defamation

Facts

1. The Appellant is a company incorporated to undertake the privatisation of water supply services in Selangor, Kuala Lumpur and Putrajaya (“the Concession Area”).

2.  The Respondent is a member of Democratic Action Party, holding a post as National Publicity Secrecy.  The Respondent is also a member of the Selangor State Government Water Review Panel appointed by the Selangor State Government.  He is also an active contributor to public debate on public interest issues in Malaysia, including the issue of water supply rights.

3. A legal action was commenced by the Appellant on 28 January 2011 against the Respondent for defamation in relation to words uttered by the Respondent at a forum held on 14 November 2010 (“the Impugned Words”), which were subsequently published an article in Nanyang Siang Pau, the Metro Edition on 16 November 2010.

4. The Appellant alleged that the publication of the Impugned Words had damaged its business reputation, goodwill and commercial credit.

5. The Appellant further contended that the Impugned Words in their natural and ordinary meaning and by way of innuendo since they implied that the Appellant was incapable of managing the water supply rights as the Appellant could not pay its debts or replace water pipes.

6. The Respondent did not dispute that he uttered the Impugned Words. However, the Respondent averred that the Impugned Words were not defamatory to the Appellant.

7. The Respondent raised the defence of qualified privilege, particularly Reynolds Privilege and the defence of justification.

8.  The findings of the High Court

(a) The High Court allowed the Appellant’s claim and held the Respondent liable for the sum of RM 200,00.00 as general damages, with interest and costs.

(b) The High Court held that the Appellant had successfully proven the three main elements of defamation which are-

(i)   the Impugned Words uttered by the Respondent bore defamatory imputations;

(ii)   the Impugned Words referred to the Appellant; and

(iii)  the Impugned Words were published to third parties.

9.  Findings of the Court of Appeal

(a) The Court of Appeal in allowing the Respondent’s appeal found that the Impugned Words were defamatory only to the extent of the following defamatory imputations:

(i)   The Appellant has insufficient funds to pay its debts; and

(ii)  The Appellant is incompetent in handling its business operations since it cannot pay its debts.

(b) Regarding the defence of qualified privilege, the Court of Appeal held that the Respondent was entitled to succeed as he had satisfied the duty and interest tests as propounded in Reynolds v Times Newspaper Ltd [2001] 2 AC 127

(c)  The Respondent had pleaded his own reasonable meaning of the Impugned Words and had sought to justify the meanings based on facts pleaded in his defence.  The admissions by the Appellant’s chief executive officer (PW4) during cross-examination supported to the meanings of Impugned Words ascribed by the Respondent in relation to the Appellant’s financial status.   For that reason, the Court of Appeal found that the Respondent had proven his defence of justification.

10.  The questions of law appeal to the Federal Court

(a) Whether the defence of qualified privilege as set out in the English House of Lords case of Reynolds v Times Newspaper Ltd (Reynolds Privilege) is available to an individual who is not a journalist? (“Question 1”).

(b) Whether in relying on the defence of Reynolds Privilege, the Respondent has to show that responsible and fair steps were taken to gather, verify and publish the information; or whether it is sufficient to merely have an honest belief that the statement(s) were true, even if the statement(s) were in fact untrue? (“Question 2”).

(c)  In the event that Reynolds Privilege applies, would the Appellant have to prove malice to defeat the claim of such privilege? (“Question 3”).

(d) Whether there exists a defence of justification based on reasonable grounds for suggesting as opposed to reasonable grounds for suspicion? If so, what are the elements required to establish such a defence? (“Question 4”).

(e)  Whether it is a defence for the Respondent to rely on a plea of justification of a lesser defamatory meaning in relation to the conduct or status of the Appellant, even though the status or conduct so justified was distinct from the sting of the defamatory article? (“Question 5”).

11.  Questions 1,2 and 3 deal with the defence of Reynolds Privilege while Questions 4 and 5 concerns the defence of justification.

Issue 1.     Whether the defence of qualified privilege available to individual who is not a journalist?
Ratios 1.    The Reynolds Privilege defence

(a) The Respondent in his defence contended that the Impugned Words concerned the subject matter of water rights, i.e the public interests and therefore the consumers have the rights to know.

(b) For a broad general principle, a privilege occasion is one on which the privileged person is allowed to speak something that no one else is entitled to speak on that occasion without being held liable for defamation.

(c)  The Court referred to the case of Hasnul bin Abdul Hadi v Bulat bin Mohammed & Anor where the basis of qualified privilege defence is grounded on public policy and convenience that the law will let a person make statements which are defamatory without incurring legal liability.

(d) According to the case of Reynolds v Times Newspaper [2001] 2 AC 127 (“Reynold’s Case”) there are two requirements for Reynolds Privilege which are-

(i)   the publication concerned a matter of public interests; and

(ii)  responsible and fair steps had been taken to gather, verify and publish the information.

(e)  The House of Lords in the Reynold’s Case affirmed that the traditional ambit of qualified privilege should be extended somewhat and that it was available in respect of political information.

(f)   The fact that the current defamation action is brought by the Appellant was based on an article that the Respondent did not directly write or publish.  The article contained the republication of the Impugned Words by the Respondent in front of the reporters.  Also, the fact that the Respondent was not a journalist when he uttered the Impugned Words is important to highlight.

(g) The Court opined that the public interest defence should not be equated with journalists or media outlets.  On the ground of public interest, there is a sufficient ground for it to be extended to anyone who publishes or discloses material of public interest in any medium.

(h)  Therefore, it is the duty of the Court to ensure that anyone who is granted with the privilege meets the test of responsible journalism in order to ensure that the privilege is not abused.

(i)  In this present case, in order for the Respondent to invoke the Reynolds Privilege defence, he must-

(i)   establish that the Impugned Words were uttered on a matter of public interest and the public had a corresponding interest in receiving the same; and

(ii)  the Court must consider whether the Respondent had acted reasonably in publishing the Impugned Words, i.e ‘responsible journalism’.

(j)  Lord Nicholas in the Reynold’s Case sets out a number of factors to be taken into account in determining the issue of responsible journalism which are-

(i)  the seriousness of the allegation, the more serious the charge, the more the public is misinformed and the individual harmed, if the public is misinformed and the individual harmed, if the allegation is not true;

(ii) the nature of the information, and the extent to which the subject matter is a matter of public concern;

(iii) the source of information;

(iv)  the steps taken to verify the information;

(v)    the urgency of the matter;

(vi) whether the comment was sought from the Appellant;

(vii) whether the article contained the gist of the Appellant’s side of the story;

(viii)  the tone of the article; and

(ix)   the circumstances of the publication, including the timing.

(k)  Based on this present case, the Impugned Words uttered by the Respondent was on a matter of public interest and the Impugned Words concerned the operation and management of water supply services.  Hence, the first test for the Reynolds Privilege defence has been fulfilled.

(l) For the second test, the learned counsel for the Appellant contended that even though the Court of Appeal opined that the Respondent has fulfilled the second test, the implication of the proposition made by the Court of Appeal is that, it would allow the Respondent to publish untrue defamatory statements, simply because the state of affairs had already been published before in the public domain.

(m)  The learned counsel for the Appellant in his submission further argued that there is an evidence that disclosed that the Respondent had omitted to publish information, which he was in possession of, which would have shown the Appellant’s side of the story, in that the non replacement of water pipes and mains and the cash flow constraints were not due to the Appellant’s own fault.

(n)  The Court in its judgment held that the Court of Appeal had failed to consider that the Respondent’s knowledge of the Appellant’s initial position and failure to disclose these facts would amount the Respondent’s conduct was unreasonable and would go against the concept of responsible journalism.

(o) The Court further justified that the Respondent had failed he responsible journalism test since he failed to take fair steps to gather, verify and publish the Impugned Words.  Thus, the Court of Appeal had erred in finding that the Respondent had succeeded on the Reynolds Privilege defence.

2.     The defence of justification

(a) The defence of justification is a complete defence to a defamation case and the Respondent has the burden to prove the defamatory imputations are substantially true.

(b) The Respondent had plead justification known as Lucas-Box which means that the plea of justification by proving   the Respondent’s own reasonable meaning to the Impugned Words.

(c) According to the case of Lucas-Box v Associated Newspapers Group Plc & Ors [1986] 1 All ER 177, the Lucas-Box plea justification are as follows:

(i)  If a plaintiff, in its defamation pleadings, gives a natural and ordinary meaning to the impugned words, the defendant may then rely on stating in his defence what he alleged was the natural and ordinary meaning of the words complained of; and

(ii) A defendant in defamation proceedings who wishes to rely on a plea of justification must make clear in the particulars of justification the case which he is seeking to set up and must accordingly state clearly and explicitly the meaning which he seeks to justify.

(d) Paragraph 6 and 7 of the amended defence and counterclaim of the Respondent, which read as follows:

“(6) In the alternative, the Impugned Words insofar as they bear a defamatory meaning (which is denied) meant and were understood to mean that as follows and not in the meanings pleaded in paragraphs 12(a) and/or (b) of the Claim or any other meaning:

6.1 there were and are reasonable grounds for suggesting that:

(a) Management rights of water supply should be returned to the State of Selangor Government;

(b) SYABAS refused to cooperate with the State of Selangor Government to reach an amicable solution with regards to the management rights of water supply in the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya;

(c) Syabas refused to return the water rights to the State of Selangor and/or abandoning or terminating its water supply services;

(d) SYABAS insisted on proceeding with as much as 37% tariff hike and have initiated legal proceedings against the Selangor State Government in-order to implement the tariff hike;

(e) The State of Selangor Government would be in a better position to manage the water supply in the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya, or at the very least in the State of Selangor.

(7) In the alternative, the Defendant contends that insofar as the Impugned Words bear in the meanings as set out in paragraph 6 above are true in substance and/or fact”.

(e) Based on paragraph 6 and 7 above, it indicates that the Respondent had pleaded the Lucas-Box clearly.

(f)   The Court is in the view that the Respondent had pleaded with clarity as to the meaning he uttered the Impugned Words, which differ from the meaning understood by the Appellant.

(g) According to the Court of Appeal, the Respondent’s reasonable interpretation of the Impugned Words meant that there were plausible reasons to believe that the Appellant was having financial problems and that, as a result it should give the State Government its right to manage the water resources back.

(h)  The Court agreed with the Court of Appeal’s finding that the Impugned Words were capable of bearing the reasonable meaning ascribed by the Respondent.  Therefore, the Court agreed with the judgment of the Court of Appeal that the Respondent had succeeded in the defence of justification.

Decision 1.  The answers for all the questions are as follows:

(a) Answer to Question 1: Reyolds Privilege defence is available to an individual who is not a journalist.

(b) Answer to Question 2: In the defence of Reynolds Privilege, the Respondent has to prove that the responsible and fair steps were taken to gather, verify and publish the information; and it is not sufficient to merely have an honest belief that the statement(s) were true.

(c) Answer to Question 3: Since the Reynolds Privilege defence failed in the present case, it is unnecessary to answer this question.

(d) Answer to Question 4: On the facts and circumstances of the present case the plea of reasonable grounds for suggesting does not amount to a valid plea for the defence of justification.

(e) Answer to Question 5: In the circumstances of this case, it is unnecessary to answer this question.

2.  The appeal was dismissed by the Federal Court.

Key Take Away

1.  The Reynolds Privilege defence is not exclusively applicable to the journalists only.  The application of this defence is extended to any individual who produces content on matters concerning public interests.

2. Although the Federal Constitution provides the right to freedom of speech under Article 10(1)(a), this right is not absolute since the Federal Constitution provides the Parliament with the power to enact laws to protect an individual from defamation as propounded under Article 10(2)(a) of the Federal Constitution-

“(2) Parliament may by law impose –

 (a) on the rights conferred by paragraph (a) of Clause (1), such restrictions as it deems necessary or expedient in the interest of the security of the Federation or any part thereof, friendly relations with other countries, public order or morality and restrictions designed to protect the privileges of Parliament or of any Legislative Assembly or to provide against contempt of court, defamation, or incitement to any offence;”

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