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[2000] Part 4 Case 1 [HCM] |
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www.ipsofactoJ.com/highcourt/index.htm
[2000] Part 4 Case 1 [HCM] |
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HIGH COURT OF MALAYA |
Cheah
-
vs -
Liew
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Coram JAMES
FOONG J |
11
FEBRUARY 2000 |
Judgment
James
Foong J
THE
PLAINTIFFS' CLAIM
The
plaintiffs are advocates and solicitors practising under the name and style
of M/s Cheah Teh & Su (CTS) in Kuala Lumpur. They claim that the
defendants by two letters (the letters) written by the defendants'
solicitors, M/s Wee Choo Keong & Faaiz (M/s Wee Choo Keong) dated August
15, 1995 and August 18, 1995 respectively have defamed them.
BACKGROUND
Before I proceed to set out the alleged defamatory statements in the letters it is necessary to explain the background leading to the issue of the letters. The first defendant is the matriarch of a Chinese family of eight children - three boys and five girls. Members of this family, through holding companies and by themselves, owned 13 pieces of land at Jalan Imbi, Kuala Lumpur. For ease of reference I shall refer to them jointly as "the vendors". For these lands which adjoined each other I shall collectively refer to them as the "said property". Parts of the said property were charged to banks, but due to differences among family members the bank loans were not repaid resulting in foreclosure actions by the banks.
CTS
were engaged, principally by the first defendant, to defend these actions
and to negotiate with these bankers for a settlement of the debts with
anticipated proceeds from the sale of the said property. At that material
time there was a demand for the said property, probably due to its location.
One interested party was Kim Huat Engineering Sdn Bhd (Kim Huat) who agreed
to buy it for RM30 million. For this deal Kim Huat paid a sum of RM300,000
in consideration for an option to purchase. In this option, there was a
clause to allow both the purchaser and the vendors to opt out of this sale
and purchase by a forfeiture of the consideration or a payment of a penalty
of a sum equal to the consideration respectively.
Soon
after the granting of this option, a more attractive offer was received.
This new party was introduced by the first defendant's son - Tony. This new
potential buyer offered to purchase the said property for RM34.8 million
despite being made aware of the complications that might arise by the
necessity to terminate Kim Huat's deal.
At the first meeting held with this new group of potential purchaser, the first defendant was present. According to her she was introduced to two persons by the names of Michael Leong and Francis Lee. These two, according to her, held themselves out to be from a public listed company known as Chongai Corporation Bhd (Chongai). As the new purchase price was alluring, the vendors of the said property decided to terminate the option granted to Kim Huat and sell the said property to the new purchaser.
Lawyers
were called in to draft the sale and purchase agreement to the new
purchaser. At the insistence of the first defendant, CTS was engaged by the
defendants to act for them in this transaction. The three sons and one other
daughter having refused to join in this appointment, retained another firm
of solicitors by the name of M/s Lee Hishamuddin to act for them. So for
this sale, there were two firms of solicitors acting for the vendors. Acting
for the purchaser was the legal firm of M/s Paul Ong & Co (M/s Paul
Ong). Representing the financiers who gave the loan to the purchaser to
complete this purchase was another law firm called M/s Kumar Jaspal Quah
& Aishah (M/s Kumar).
Due
to the large number of vendors, a few sale and purchase agreements
(agreements) were executed. The purchaser named in all these agreements was
one Madam Yeo Meu Siang (Md Yeo). 10% of the purchase price was paid at the
time when the agreements were executed. For the amount which the defendants
were entitled, it was paid to CTS. Upon receipt of this, CTS forwarded this
amount to the banks which had instituted foreclosure proceedings in an
attempt to delay the forced sale of certain parts of the said property.
Almost simultaneous to the vendor's consent to sell the said property to this new group, a letter was sent to Kim Huat informing Kim Huat that the option to purchase was terminated with the vendors agreeing to pay the penalty. Kim Huat reacted by lodging a caveat on the said property. CTS were engaged on the instructions of the first defendant, to remove this encumbrance. The third plaintiff was charged to handle this matter.
An application was filed in the KL High Court to set aside this Kim Huat's caveat. After some adjournments this application was eventually heard, and on May 19, 1995 judgment was delivered. The first and second defendants were present in court on that particular day but since the matter was heard in chambers they waited outside while the third plaintiff received the decision in the Judge's chamber. The court ordered Kim Huat's caveat be removed, with damages to be assessed. But immediately after this decision was pronounced, Kim Huat's counsel applied to the same Judge for a stay of execution pending an appeal to the Court of Appeal. This was granted.
When
the third plaintiff emerged from the Judge's chambers the first and second
defendants noticed that the third plaintiff was unhappy. According to these
defendants, the third plaintiff never informed them of the successful stay
of execution application of Kim Huat; only that the defendants had won their
case and the caveat was to be removed. This of course is firmly denied by
the third plaintiff. Eventually, after some negotiations that took place
subsequently, Kim Huat withdrew the caveat voluntarily on June 19, 1995.
Under
the terms of the agreements:
the
completion of the sale and purchase was six months from the date of the
agreements provided that consent from the Foreign Investment Committee
(FIC) was obtained within this period;
it
was the responsibility of the purchaser to apply for the FIC approval
within 14 days from date of the agreements;
in
the event FIC approval was not obtained within this specified period the
agreements shall lapse;
if
however FIC was obtained within the time stipulated but there existed a
caveat on the said property which would prevent the registration of the
transfer, then an extended completion date of 12 months from date of the
agreements was allowed,
if
by this time the caveat was still not removed there would be a
"further extended period" of 24 months from date of the
agreements;
after
this, if the caveat remained, the agreements should terminate.
It
was also agreed that if the caveat was removed during the "extended
period" or the "further extended period" the purchaser should
pay the vendors the balance of the purchase price within two days and seven
days respectively from date of the removal of the caveat.
Calculating from the date of the agreements, the completion date was April 23, 1995. But by the April 8, 1995, FIC approval was still not secured. Fearing the possibility that the sale may be terminated, the purchaser called for a meeting with the vendors. It was attended by: the first defendant, accompanied by either the second or third defendant; the three sons of the first defendant, Mr. Kenny Ng and Miss Needle, solicitors from M/s Paul Ong; Michael Leong and Francis Lee; and the second plaintiff, joined later by the first plaintiff. At this meeting an agreement was reached between the parties to allow the completion date to be changed to July 23, 1995 i.e. nine months from date of agreements provided the caveat on the said property was removed.
According
to the plaintiffs, this was agreed upon in consideration of the purchaser
paying to the vendors an interest of 12% per annum (12%) on the balance of
the purchase price from date of removal of caveat to new date of completion.
This issue on the payment of interest is, however, vehemently denied by the
defendants; they claim that the question of interest was never raised at
this meeting.
After
the agreement was reached, the first and the second or third defendants left
the meeting. The lawyers remained to draft the new terms. Soon they realised
that in the event FIC approval was obtained on or near the completion date
then there would be insufficient time to draw down from their financiers to
pay the balance of the purchase price. To overcome this, the purchaser's
lawyers suggested a buffer period of one month to pay the balance of the
purchase price from the date of FIC approval or July 23, 1995, whichever
came later. Instead of getting their clients' prior approval on this new
proposal, the plaintiffs sent out a letter to M/s Paul Ong confirming
acceptance of the fresh terms, including the one month buffer period over
and above the other provisions agreed by the vendors and purchasers at the
meeting. A carbon copy of this letter was sent to the defendants. When the
first defendant came to know of this additional term, she was very upset.
She protested violently to the first plaintiff over the phone and refused to
consent to this. Because of this, another meeting was called for on April
21, 1995.
The
April 21, 1995 meeting was attended by: the first plaintiff, first and
second defendants, the first defendant's three sons and their lawyer, Kenny
Ng and Needle of M/s Paul Ong, Michael Leong and Francis Lee. On this
occasion, the negotiation was dominated by the first defendant and Michael
Leong arguing over the amount of interest and over what period it should be
paid by the purchaser for the extended period of completion of the sale. In
the end, an agreement was reached. The completion date was extended for a
period of three months to July 23, 1995, and as consideration for this, the
purchaser shall pay to the vendors interest at 8% per annum on the balance
of the purchase price for this extended period.
Sometime in April 1995 the purchaser nominated a company called Metro Jelita Sdn Bhd (Metro) to accept the transfer of the said property on the completion date. The vendors agreed to this and this was evidenced by a deed of nomination signed by all the vendors. After this was completed, in June 1995, an advertisement appeared in a national newspaper staling that Metro was offering for sale certain types of buildings to be erected on the said property. When the first defendant, who was then in London, came to know of this, she immediately telephoned the second plaintiff on June 26, 1995 to voice her displeasure and concern over this new development since the balance of the purchase price was still not fully settled by the purchaser.
Her
instruction to the second plaintiff was to issue a letter to Metro demanding
payment of 50% of the purchase price if Metro wished to continue with its
attempt to sell the proposed building to be built on the said property to
third parties. When the first defendant returned to Malaysia on June 29,
1995 she discovered that CTS had not carried out her instructions to write
the said letter of demand to Metro. In her position as a managing director
of one of the vendors she issued a letter of demand, (the contents of which
were similar to that of her instructions to the second plaintiff earlier),
to M/s Paul Ong, solicitors for the purchaser. According to the plaintiffs,
though they admitted that they received the instructions from the first
defendant to send out such a letter to the purchaser, they did not proceed
with it because they were awaiting further instructions after the draft of
such letter was forwarded to the defendants.
Unable
to accept insubordination by the plaintiffs, the defendants engaged M/s Wee
Choo Keong to act for them. The services of CTS was terminated by the
defendants and CTS was requested to forward all relevant documents
associated with the sale of the said property to the newly appointed
solicitors. At the same time M/s Wee Choo Keong also wrote to CTS with
instructions to CTS not to accept from the purchaser the balance of the
purchase price. CTS responded with a reply demanding that M/s Wee Choo Keong
must undertake to pay CTS 50% of the solicitor's scale fees for work done on
the sale of the said property. In retaliation, M/s Wee Choo Keong insisted
that CTS provided detailed accounts of all work done and the amount of fees
so charged as well as the immediate supply of all relevant documents
associated with the sale of the said property. There was urgency in the
demand of the latter for the new completion date was then drawing near.
The
first defendant then testified that on July 13, 1995 Francis Lee called at
her house "to discuss and settle the problems in the land
transaction", probably concerned over the instruction of the defendants
to CTS not to accept the balance of the purchase price. When told that he
could not be entertained because the relevant documents were still in the
hands of CTS, who refused to release them to the defendants' new solicitors,
Francis Lee informed the first defendant that he would instruct CTS to
release these papers immediately. On July 13, 1995, CTS did release the
documents to M/s Wee Choo Keong in consideration of a lien ofRM84,060.97
belonging to the defendants which was in CTS clients' account.
On
August 15, 1995 and August 18, 1995 respectively, in response to M/s Paul
Ong's letter demanding completion of the sale of the said property, M/s Wee
Choo Keong wrote the letters to M/s Paul Ong. It is in certain specified
paragraphs of these letters that the plaintiffs are alleging that
they are defamed. These are:
On
the letter of August 15, 1995:
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On
the letter of August 18, 1995:
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that the above factors add to our clients' belief of the existence of conspiracy to defraud them on this land transactions. |
The
plaintiffs claim that the words in these paragraphs mean and are understood
to mean that the plaintiffs:
are
fraudulent in their conduct;
breached
their professional duty of care to the defendants;
are
dishonest;
are
untrustworthy;
attempted
or conspired to defraud the defendants;
are
not fit to be advocates and solicitors.
And
by this, the plaintiffs insist that their reputation has been lowered in the
estimation of right thinking members of society, they have suffered injuries
to their personal credit, character and reputation as well as in their trade
and profession. It has also brought them into hatred, ridicule and contempt.
For these, they have suffered hurt, mental distress and anguish. They now
seek from this court: general and exemplary damages, as well as aggravated
damages, which they tagged it at RM5 million. Besides, there is a claim for
an injunction to restrain the defendants and or their servants from
repeating these statements.
DEFENDANTS
DEFENCES
The
defendants' defences as pleaded in their statement of defence are:
the
words in the statements do not refer to the plaintiffs or understood to
refer or are capable of referring to the plaintiffs;
the
words do not bear or are capable of bearing the meaning as imputed by
the plaintiffs;
qualified
privilege;
fair
comment which was made in good faith without malice; and
justification.
ISSUES
By
the nature of the defences raised the issues for determination are as
follows:
whether
the words stated in these alleged statements refer to the plaintiffs;
whether
the words therein bear and are capable of bearing the meaning imputed by
the plaintiffs;
and
if the first two issues are found to be in the affirmative, then whether
the defendants can succeed in
substantive defences of justification, qualified privilege and fair
comment.
In
order to evaluate these issues, it is necessary to identify each subject
matter contained in the alleged defamation. They are:-
The
plaintiffs had misrepresented to the defendants that Metro was a
subsidiary of CCB.
The
plaintiffs never revealed to the defendants that Metro had paid a sum of
RM3.48 million to CTS when the agreements were signed.
CTS
did not advise the defendants of their rights under the agreements when
the purchaser failed to apply for FIC approval within 14 days from the
date of the agreement.
CTS
never disclosed to the defendants that the purchaser had agreed to pay
12% interest before the meeting of April 21, 1995.
The
purchaser had influenced CTS to release the relevant documents.
The
third defendant did not object to Kim Huat s application for the stay of
execution when the decision for the removal of the caveat was granted.
The
plaintiffs were late in responding to the defendants' request for the
letter granted to the purchaser to extend the completion date of the
sale of the said property.
LEGAL
PROFESSIONAL PRIVILEGE
Before I set out to analyse the case, there is a preliminary issue that requires elaboration. After the plaintiffs closed their case and just before the first defendant finished her examination-in-chief, Tuan Haji Sulaiman (counsel for the defendant) raised the issue of legal professional privilege. He insisted that virtually all the evidence given and documents tendered by the plaintiffs in support of their case were inadmissible because of legal professional privilege. These related to or were connected with communication between advocate and client or legal professional advisor and client, and were therefore inadmissible under ss 126, 128 and 129 of the Evidence Act when the defendants, as clients of the plaintiffs, did not give their express consent for such disclosure. Such evidence, according to him should be expunged.
Further,
he insisted that the first defendant
should not be compelled to disclose any further confidential communication
during the continuation of the trial. He reminded this court that this
privilege was not lost even at that stage of the proceedings for a
communication once privileged "is always privileged" (per
Cockburn CJ in Bullock v Cerry & Co [1848] 3 QBD 356).
After
hearing and reading the submissions of both parties on this issue, I
dismissed the defendants' objection. I had assured both parties at the
material time that I shall incorporate in my final judgment of this case the
grounds for this rejection. It is as follows:
Section
126 of the Evidence Act reads:
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Professional
communication |
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(1) |
No
(advocate) shall at any time be permitted, unless with his client's
express consent, to disclose any communication made to him in the
course and for the purpose of his employment as such (advocate) by
or on behalf of his client, or to state the contents or condition of
any document with which he has become acquainted in the course and
for the purpose of his professional employment, or to disclose any
advice given by him to his client in the course and for the purpose
of such employment; Provided that nothing in this section shall protect from disclosure - |
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(a) |
any
such communication made in furtherance of any illegal purpose; |
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(b) |
any
fact observed by any (advocate) in the course of his employment as
such showing that any crime or fraud has been committed since the
commencement of his employment. |
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(2) |
It
is immaterial whether the attention of the (advocate) was or was not
directed to the fact by or on behalf of his client. |
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Then
s 128 of the same Act said:
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Privilege
not waived by volunteering evidence If any party to a suit gives evidence therein at his own instance or otherwise, he shall not be deemed to have consented thereby to such disclosure as is mentioned in section 126, and if any party to a suit or proceeding calls for any such (advocate) as a witness, he shall be deemed to have consented to the disclosure, only if he questions the (advocate) on matters which but for such question he would not be at liberty to disclose. |
And
s 129 of the Evidence Act lays down:
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Confidential
communications with legal advisers No one shall be compelled to disclose to the court any confidential communication which has taken place between him and his legal professional adviser unless he offers himself as a witness, in which case he may be compelled to disclose any such communications as may appear to the court necessary to be known in order to explain any evidence which he has given, but no others. |
Mr.
Chandran, counsel for the plaintiffs, arguing against the application of
these provisions in the circumstances of this case attempted to influence me
that by an Indian authority of Rev Fr Bernad Thattil v V Ramachandran
Pillai (1987) Cri LJ 739 the strict rule of "express consent"
under s 126 of the Evidence Act can be inferred from "facts and
circumstances" rather than being restricted to be only in
"writing" as decided in Au Ba Chi v Koh Keng Kheng [1989] 3 MLJ 445 @ 447. His objective was to overcome s 126 of the
Evidence Act by pointing out that the acts of the defendants in affirming an
affidavit verifying documents, the filing of a list of documents (the
contents of these documents contain the alleged privileged communications),
and the examination of the plaintiffs witness on such communication would
imply that the defendants had consented to the disclosure of such
communication by the plaintiffs.
I
disagree with this contention. The term used in s 126 of the Evidence Act is
"express consent". By this, there must be some element of clear
explicit and predetermined intention of the defendants to consent to the
plaintiffs in disclosing the privileged communication, not by any indirect
or inferred manner. The affirmation of an affidavit and the filing of
documents containing the privileged communication were mere processes
required by the rules and procedure of the courts in getting this case ready
for trial. They did not relate directly to the consent to disclose, thus
could not be considered as express consent given by the defendants. As for
the examination of the plaintiffs' witness on such matter, it was a right
granted to the defendants under the law to cross-examine any of the
plaintiffs' witnesses on matters which were relevant to the case. In the exercise of this right of cross-examination,
there was no waiver of the defendants' legal professional privilege, quite unlike the situation provided under s
128 of the Evidence Act. That is when the
defendants themselves calling these advocates as witnesses and then
questioning them on such privileged
communication. But in this case, the advocates were the plaintiffs and their
witnesses; the defendants did
not call upon them to testify. Thus the privilege is not waived.
Mr.
Chandran then argued that this legal professional privilege did not apply to
litigation between lawyer and
client since there was no disclosure of communication in a solicitor-client
relationship; the parties being
well aware of the communication themselves, much unlike a demand by a third
party for such disclosure.
I was much influenced by this proposition. Section 126 of the Evidence Act declares that no advocate shall at any time be permitted to "disclose" any privileged communication. If there was no disclosure then this provision would not apply. I was of the view that there could be no disclosure of such communication when the person seeking to prevent it from being disclosed knew of the communication and was preventing it from exposure from a person whom he shared this communication with in a solicitor-client relationship, in an action brought by such person against him where such communication was relevant to the issue. In such a situation this legal professional privilege could not apply.
Imagine
an advocate and solicitor attempting to sue his former client for his fees
for work done, and on every occasion when the lawyer attempts to introduce
evidence orally or by way of documents to support his case, the client
waives legal professional privilege. If this privilege is upheld, then no
lawyer can succeed in claiming any fees from a recalcitrant client who
refuses to pay for work done. I am of the firm opinion that in a situation
such as this, there was no disclosure of any communication between the
parties to the action to entitle the defendants to use s 126 of the Evidence
Act as a protection.
I
am not unsupported in my approach to this. In the authoritative words of
Sarkar's Law of Evidence, 15th Edn, at p 2046, the respected author has this
to say:
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It has frequently been held that the rule as to privileged circumstances of attorneys does not apply when litigation arises between attorney and client, and when their communications are relevant to the issue (Naive v Baird, 12 Ind 318); and if it is claimed that the attorney has an interest in the pending litigation, for instance that his fee is contingent on the result, he may be required to state such fact, and the communications with his client relating thereto Eastman v Kelly, 1 NYS 866). |
In
this case there was no dispute that the plaintiffs were at one time
advocates of the defendants. The communications which the defendants sought
to prevent from disclosure were those covered under the solicitor-client
relationship. The plaintiffs were suing the defendants in respect of
communications that were relevant to the issue. Under such circumstances,
the defendants were not entitled to claim legal professional privilege under
s 126 of the Evidence Act.
On
the second limb of the defendants' contention that they should not be
compelled to disclose confidential communication
under s 129 of the Evidence Act, I wish to highlight the fact that the first
defendant had, by her own
accord during her examination-in-chief, disclosed and referred to most of
the confidential communication. When
this happened her privilege to the protection from disclosure of such communication was waived under the provisions of s 129 of the
Evidence Act. She could be "compelled to disclose any such
communications as may appear to the court necessary to be known in order to
explain any evidence which he (she) has given but no others". By this,
I cannot entertain this defendants' second request.
ANALYSIS
Not
Referring To The Plaintiffs And Words Do Not Bear The Meaning Imputed
From
the contents of the Tuan Haji Sulaiman's submission, I note that there is
absolutely no reference to the contention that the words in the alleged
defamatory statements do not refer to the plaintiffs and the words therein
do not bear and / or are capable of bearing the meaning imputed by the
plaintiffs. This must be an indication that the defendants are abandoning
these defences. In any event, even if this is not the case, I find these
allegations are without merits. A mere reading of these statements itself is
sufficient to find that they refer to the plaintiffs directly and imputes
the meanings as asserted by the plaintiffs.
Fair
Comment
The
concentration of Tuan Haji Sulaiman's submission centres on the substantive
defences of justification and qualified privilege. Even fair comment is left
unattended. I presume this is adopted because of the absence of the element
of public interest required to ensure success of this defence. In my opinion
the subject matter in the defamatory statements has no public interest. It
concerns only the purchaser, its solicitors, the vendors (which includes the
defendants), their present and former solicitors and the lawyers acting for
the financial institutions which granted the loan to finance the purchase of
the said property. This is sufficient to justify the dismissal of this
defence of fair comment.
Justification
In
a plea of justification, the defendant must prove that the statement
published is substantially true. Slight inaccuracies in one or more of its
details will not prevent the defendant from succeeding in this defence. It is sufficient to prove the main charge or the sting of the main
charge or the gist of the libel is true - see
Gatley on Libel & Slander, 9th Edn @ paragraph 11.7.
Having
determined the principle to be applied, I shall now proceed to examine
separately each of the accusations raised in the said letters and then
evaluate them as a whole to decide on whether the gist of the libel is true.
Purchaser was a subsidiary of CCB
Metro was to be the nominated registered owner of the said property upon the completion of the sale. Metro was nominated by Md Yeo, as was allowed under the agreements. This nomination was even consented to by the vendors when they executed a deed of nomination for such purpose. Now the defendants accuse the plaintiffs of misrepresenting to them that Metro was a subsidiary of CCB or connected with this public listed company. But how could this be when such representations were made directly to the first defendant by Michael Leong and Francis Lee. According to the first defendant, Michael Leong and Francis Lee personally represented to her that they were from or associated with CCB at the first meeting she had with the new group of purchasers.
Neither
the plaintiffs nor any one from CTS were present when this was made. They
were not even invited to attend this meeting. The plaintiffs only came to
know of such representation from the vendors. This is revealed from the
admission of the first defendant when she said under cross-examination that
"CTS informed me that Francis and Michael were representing Chongai
Corporation Berhad through information given by my son and CTS did not tell
me this directly." Secondly, there is also evidence that it was the
first defendant who told the plaintiff of this representation rather than
the other way round. This is from the testimony of the second defendant when
she said "My mother told Cheah (first plaintiff) that Francis was from
Chongai".
Further,
I cannot see the significance of this accusation. The agreements were
already executed and 10% of the purchase price was paid. There was no
protest to Madam Yeo being the named purchaser. All that was required of the
defendants at that material time was to wait for the payment of the purchase
price. If the purchaser failed to
fulfil this obligation to pay, then the deposit would be forfeited. There
was no reason to take issue on this
representation, not when the agreements had been signed. If it was before,
then it would be a different matter.
I
do not believe that there is any truth in this accusation by the defendant.
I suspect that it was manufactured to create a ground for the defendant to
terminate the agreements with the purchaser at the
time when this accusation was levied.
Failure to disclose on the deposit paid by the purchaser
The deposit for the purchase of the said property was received by CTS before the defendants signed the agreements. The letters accused the plaintiffs of not informing the defendants when this sum was paid. According to the defendants they only came to know of this in July 1995. I find no truth in this accusation.
Firstly, the agreements itself acknowledged such payment being made upon execution of the agreements. These agreements were read over by the defendants before they executed it. So the defendants must have known that this deposit was made to CTS on execution of the agreements.
Secondly, from the evidence advanced, and by my observation of the first defendant when she testified before me, I find that the first defendant is a very careful woman who is well versed in commercial affairs. In fact as revealed by evidence, she was the main player in the entire sale transaction and matters related to it. All parties so involved seemed to abide by her wishes. She and other defendants were monitoring this sale with great concern and circumspect at all material times. The price of the said property was sky rocketing and the first defendant intended to reap maximum benefit from it. She was keeping a hawk's eye over the entire transaction.
Money
was also urgently required at that time to pay the banks to forestall any
forced sale of any of the lands forming the said property. For if any of the
lands were sold by public auction then the value of the said property would
drop substantially for it no longer formed a singular large piece. So it was
of utmost importance to the defendants that the deposit, when received, must
be immediately paid to the banks. This was duly carried out by the
plaintiffs, and the plaintiffs could only have acted in this manner with the
defendants having knowledge that the payment of the deposit was made when
the agreements were actually executed. When this was the case, then the
defendants must have known that the money was paid when they signed the
agreements, and not at any subsequent date.
Failure to advice on the late application of FIC by the purchaser
The
first plaintiff testified that he did advise the defendants of their rights
to terminate the agreement due to the
purchaser's failure to apply for FIC approval within 14 days from date of
the agreements. Added to this advice
was his view that the court may refuse to terminate this sale for reason
that this was not a fundamental
breach of the contract. This the defendants deny. They have accused the
first plaintiff of brushing them off
when they sought their advice on this matter.
I do not believe that this accusation of the defendants can be true. Judging the character of the first defendant by her actions before, during and after the said property was sold and transferred, she was not one who could be easily pushed over. She was a shrewd, demanding and aggressive woman who would never allow any pursuit others to be stalled or brushed off by any non-committal or indifferent comments, such as the one she accused the first plaintiff of. Despite her lack of command in the English language, I do not think that she would let any advantage in her favour slip by without being aware of the consequences of terminating the agreements at this stage of the sale.
Stacked
against her then were the banks with their orders for sale, the uncertainty
of succeeding in such termination as experienced by the Kim Huat deal, and
the proximity of time when the balance of the purchase price would be paid.
I believe that the defendants had abandoned an attempt to terminate the
agreements only after having considered the first plaintiffs relevant advice. When this was the case, then there must be an advice
rendered by the first plaintiff.
Failure to forward the draft supplemental agreement and the
non-disclosure of the 12% interest
The
plaintiffs admitted in evidence that they did not obtain the defendants'
approval on the term relating to the
granting of a buffer period of one month prior to their letter to M/s Paul
Ong dated April 8, 1995. But this was immediately ratified by the plaintiffs
in their subsequent letter to M/s Paul Ong dated April 13, 1995. There, they
told M/s Paul Ong to hold on to the supplemental agreements which contained
this term (as well as others which were already agreed upon) for they had
yet to obtain consent from their clients for this new additional condition.
This letter was copied to the defendants. lt was on these draft supplemental
agreements that the defendants were taking issue when they accused the
plaintiffs in the letters for not forwarding these documents to them. The
relevance? The defendants claim that if these supplemental agreements were
shown to them, they would not have agreed to a lower interest rate of 8%
p.a. to be paid by the purchaser at the meeting of April 21, 1995 since the
purchaser had already agreed to 12% interest.
I
find this accusation untrue. The defendants were already aware that the
purchaser had agreed to 12% interest by the plaintiffs' letter to M/s Paul
Ong dated April 8, 1995. This letter was copied to the defendants before the
meeting of April 21, 1995. In paragraph 1 (c)) it declares as:-
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Purchaser shall pay Vendors interest on the Balance at 12% per annum from date of removal of Caveat, to the Completion Date? |
Here
12% interest was revealed to the defendants and since the defendants have
never denied receiving this letter nor disclaimed knowledge of its contents,
they must have known of this agreed 12% interest. So for this, they cannot
claim that they were not enlightened on this agreed interest prior to the
meeting of April 21, 1995.
Further,
after careful perusal of the terms agreed upon by the parties at the meeting
on April 8, 1995 and April 21, 1995, I cannot find any justification for the
defendants to assert that they had negotiated for less interest. In fact
they had gained. Originally, under the agreements the period for completion
was six months from date of the agreements. On April 8, 1995 it was extended
to nine months from date of the agreements with 12% interest on the balance
of purchase price from date of removal of caveat to the extended completion
date. Then at the April 21, 1995 meeting it was at 8% per annum. But this
was to be paid irrespective of whether the caveat was removed or not. The
12% per annum interest, which I have found the defendants were aware of,
commenced only on the day the caveat was removed. So by this deduction the
defendants had gained more than what they had agreed earlier on April 8,
1995. This advantage must have been known to the defendants, otherwise
Michael Leong and Francis Lee would not even have negotiated with the
defendants at all at the second meeting. The purchaser stood to lose more
under this new term.
Release of documents
The
defendants had claimed in the letters that the sudden release of the
relevant documents by CTS to their new solicitors was prompted by the
instructions of Francis Lee to CTS. This, the plaintiffs have denied. The
plaintiffs explained that the release of the relevant papers was because
they discovered the defendants had sufficient money deposited in the
plaintiffs' clients' account that could act as a lien over the payment of
their fees. I believe them. The allegation of the defendants was a bare
allegation. Francis Lee was never called by the defendants to confirm that
he gave such instructions to the CTS to release the documents immediately.
Instead there is an affidavit sworn by Francis Lee which denies this
allegation of the defendants. This affidavit was in support of a suit
brought by the purchaser for specific performance against the defendants to
complete this sale when the defendants attempted to get out of it. With the
exposure of these facts, I cannot believe this accusation of the defendants
to be true.
Third plaintiff did not object to the application for a stay of execution
By
the defendants' own testimony in court, they have admitted that they were
wrong in accusing the third plaintiff for not objecting to Kim Huat's
counsel's application for stay of execution after an order for the removal
of the caveat was allowed. To reduce the effect of this admission, the
defendants feebly asserted that the third plaintiff did not oppose to Kim
Huat's application for stay "strongly". The defendants then
explained that they made this accusation in the letters based only on the
brief minutes recorded in the court file, not from the Judge's notes, which
reveals otherwise.
First of all the accusation was not that the third plaintiff had not objected "strongly". It accused the third plaintiff for not objecting at all. This of course is absolutely untrue.
Secondly,
the defendants only consulted the court file minutes when their
solicitors were aware that it was insufficient to make such a serious
allegation against an advocate and solicitor without perusing the
Judge's notes. With these revelations, I find no truth in this accusation of the defendants.
Failure to forward the letter of extension
By
July 14, 1995, CTS had forwarded two bundles of documents to M/s Wee Choo
Keong. Then on July 21,1995 M/s Wee Choo Keong requested for the letters of
extension of time granted to the purchaser by the vendors. CTS replied on
July 25, 1995 that they believe these documents were among those papers sent
to M/s Wee Choo Keong earlier. This fact, as it stood, was true, but to
consider just this together with other untrue accusations in arriving at a
conclusion that the plaintiffs had conspired with others so named is
insufficient to justify a plea of justification.
Conspiracy
The
main charge or the gist of the libel is that based on the above accusations,
the defendants concluded that the plaintiffs conspired with others so named
to defraud them in this land transaction. By my analysis above there is no
substantial truth in virtually all the accusations. With this, I find the
gist of the libel untrue, and therefore the plea of justification
unsuccessful.
Qualified
Privilege
As
for qualified privilege, the law recognises that if a person has a duty to
perform or an interest to protect he can communicate frankly and freely with the other who has a corresponding interest to receive,
and any statement made in the course of this is privilege, provided that it
was made in good faith - see
Lord Diplock in Horrock v Lowe [1979] 1 All ER 662. Thus this
privilege can only arise if there is a reciprocal or common interest between
the defendant and the person with whom he makes the communication. This
reciprocated common interest occurs "where the words complained of as
defamatory were published in pursuance of an interest or of a duty, legal,
social, or moral to publish them to the person to whom they were published
and the person whom they were published had a corresponding interest or duty
to receive them" per Hepworth J in Abdul Rahman Talib v
Seenivasagam [1965] MLJ 156.
Tuan
Haji Sulaiman in his submission attempted to impress upon me that there
existed a relationship between M/s Paul Ong and M/s Wee Choo Keong when the
said letters were written. M/s Wee Choo Keong was then acting for the
defendants, who were vendors of the said property, whilst M/s Paul Ong were for the purchaser. From this
relationship there was a common interest and any correspondence between them
should be protected by
qualified privilege.
By
the nature of the plaintiffs' submission, I do not think that they are
disputing this. What the plaintiffs are arguing is that the defendants
published the defamatory statements with malice. As stated above this
defence of qualified privilege will be lost if "the occasion which
gives rise to it is misused, i.e. in common parlance, if publication is made
"with malice" - see Maidstone Pte Ltd v Takenka Corp [1992]
SLR 772 @ 787. The burden of proving malice is on the plaintiff.
Knowledge
Of Untruth
In
his attempt to prove malice on the part of the defendants when making the
defamatory remarks, Mr. Chandran stressed the fact that the defendants did not have an honest belief in the truth of what they
wrote.
This
alone, if found to be true, is sufficient to prove malice - see paragraph
16.13 in Gatley on Libel and Slander, 9th Edn.
In
order to decide on this, I must be reminded of the test set out by Lord
Diplock in Horrock v Lowe [1975] AC 135. It is:
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What is required on the part of the defamer to entitle him to the protection of the privilege is the positive belief in the truth of what he published or, is generally though tautologously termed, 'honest belief. If he publishes untrue defamatory matter recklessly, without considering or caring whether it is true or not, he is in this, as in other branches of law, treated as if he knew it to be false. But indifference to the truth of what he publishes is not to be equated with carelessness, impulsiveness or irrationality in arriving at a positive belief that it is true. The freedom of speech protected by the law of qualified privilege may be availed of by all sorts of conditions of men. In affording to them immunity from suit if they have acted in good faith in compliance with a legal or moral duty or in protection of a legitimate interest the law must take them as it finds them. In ordinary life it is rare indeed for people to form their beliefs by a process of logical deduction from facts ascertained by a rigorous search for all available evidence and a judicious assessment of its probative value. In greater or in less degree according to their temperaments, their training, their intelligence, they are swayed by prejudice, rely on intuition instead of reasoning, leap to conclusions on inadequate evidence and failed to recognize the cogency of material which might cast doubt on the validity on the conclusions they reached. But despite the imperfections to the mental process by which the belief is arrived at may still be 'honest', that is, a positive belief that the conclusions that they have reached are true. The law demands no more. |
I accept all the shortcomings and realities of human nature as spelled out in detail by Lord Diplock above in the defendants. But in this case, the defendants when publishing these statements were without honest belief in their truth as proven from my deliberation on the defence of justification. Take the first accusation in the letters. The plaintiffs were not even invited to the first meeting with the purchaser where Michael Leong and Francis Lee were said to have introduced themselves as representing CCB. These representations by these two persons were in fact made direct to the first defendant.
The
plaintiffs did not know of this until Tony, the son and one of the vendors,
informed them of this. Yet, the defendants accused the plaintiffs of
misrepresenting them on this. On the second accusation, again, from the
facts exposed I have concluded that the defendants knew at the time when the
defamatory statements were published that the deposit was paid before the
execution of the agreements. The same finding of untruthfulness goes with
the third, fourth and sixth accusations.
There
is no necessity for me to repeat my deliberations. What is of importance is
that there were no grounds for the defendants to base their belief in the
truth of the accusations. My belief is that these accusations were created
with the objective of terminating the agreements in order to extract more
money from the purchaser. This is evidenced by the testimonies of Kenny Ng,
who met up with the defendants with the purchaser. At this meeting the first
defendant demanded more money and refused to accept anything less. Such
motive of the defendants in using these untrue accusations implies malice on
their part - see paragraph 16.4 in Gatley on Libel and Slander, 9th Edn.
Further,
soon after the defamation was published there was a demand by the plaintiffs
of the defendants for an apology after the plaintiffs had set out all the facts supporting the denial of the accusations. This was
entirely ignored by the defendants. The defendants just brushed it aside
without even attempting to answer. This act of the defendants lends added
support to the existence of malice at the time of publication of the
defamation - see CS WU v Wang Look Fung [1981] 1 MLJ 178.
By
the reasons stated above, I find the plaintiffs have proven malice and the
defendants cannot succeed in this defence of qualified privilege.
FINDING
ON LIABILITY
With
the plaintiffs proving their case and the defendants defences dismissed I
find the defendants liable to the plaintiffs for defamation.
DAMAGES
Besides
the reasons given for awarding exemplary and aggravated damages, the Court
of Appeal in MGG Pillai v Vincent Tan Chee Yioun [1995] 2 AMR 1776,
has also accepted the established principle of evaluating damages based on
the following factors:
The
position and the standing of the plaintiff.
The
extent of the publication.
The
mental distress, hurt, anxiety and mental anguish caused to the
plaintiff as a result of the libel.
The
uncertainty undergone in this litigation.
The
conduct of the defendants from the time of the libel sown to the very
moment of the verdict.
The
absence and refusal of any correction, retraction or apology.
After
taking into consideration all these, as well as those laid down for
exemplary and aggravated damages expounded in MGG Pillai, I award the
following damages:
Against
the first defendant a sum of RM500,000
Against
the second defendant a sum of RM300,000
Against
the third defendant a sum of RM50,000
Against
the fourth defendant a sum of RM150,000
The
sum awarded against the first defendant is more substantial than the other
defendants for reason that she was the fugleman in this entire episode of
defamation. The others were merely foot soldiers who followed their leader
blindly and without thinking despite the fact that they were all more
educated than the first defendant. The second defendant was more of a
lieutenant to the first defendant. She was more involved in this wrong than
the fourth defendant. As for the third defendant she was entirely out of the
country through-out. She merely lent her name. But nevertheless they are all
liable. It is only a matter of degree of their involvement which is relevant
in the assessment of damages, and it is on this that the quantum of damages
awarded against them is based.
The
defamation was made with malice and with ulterior motive to gain certain
monetary advantage i.e. to terminate the agreements in order to demand more
money from the purchaser. Such motives and actions by the defendants are
deplorable, particularly in this instance, when it consists of the
allegation of the plaintiffs in conspiring with others so named to defraud.
Such accusation is serious, for if prosecuted and found liable, the
plaintiffs may land themselves in jail. The consequence of this defamation
must have caused mental anguish and distress to the plaintiffs. The
plaintiffs were and are advocates and solicitors where reputation of honesty
and integrity is a hallmark in their profession. To attack them on this
vital element is most humiliating and damaging. Fortunately the publication
of these defamatory statements were restricted, but still, damage is done.
There
was no apology tendered despite request even after the plaintiffs explained
in detail of the error committed by the defendants in that there was no truth in each accusation.
It
is for these reasons that I have awarded the amounts stated above.
Besides
awarding cost to the plaintiffs, I shall also allow the plaintiffs' request
for an injunction to restrain the defendants, their servants and / or agents
from further publishing the defamatory statements.
Cases
Horrock v Lowe [1979] 1 All ER 662; MGG Pillai v Vincent Tan Chee Yioun [1995] 2
AMR 1776
Legislations
Evidence
Act 1950: s.126, s.128, s.129
Authors and other references
Gatley on Libel and Slander, 9th Edn
Sarkar's, Law of Evidence, 15th Edn
Representation
Navaratnam
and Chandran (Saheran, Woon & Navaratnam) for Plaintiffs
Sulaiman
Abdullah and Wee Choo Keong (Wee Choo Keong & Faaiz) for Defendants
Notes:-
[a]
Defendants appealed against the damages awarded and
the plaintiff crossed appealed. The Court of Appeal (Gopal Sri Ram, Siti Norma
Yaakob & Abdul Kadir Sulaiman JJCA) on 11/1/2001 allowed the appeal: see Liew
Yew Thiam v Cheah Cheng Hoc @ www.ipsofactoJ.com/highcourt/index.htm
[2001] Part 2 Case 4 [CA]
This decision is also reported at [2000] 2 AMR 2444
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