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Case Summary: Federal Court decision on Mkini Dotcom Sdn Bhd & Ors v Raub Australian Gold Mining Sdn Bhd [2021]

19 July 2021

Key Contacts:
 
Wong-Chee-Lin.jpg Claudia-Cheah-web.jpg Tommy-Lim-2.jpg
Wong Chee Lin1 Claudia Cheah
Pek Yee2		 Tommy Lim
Ka Hui3

Executive Summary
 
In a defamation action, the Reynolds defence of responsible journalism or qualified privilege is “a defence of publication in the public interest”4, where a publisher needs to prove that the publication concerned is a matter of public interest, and responsible and fair steps had been taken to gather, verify and publish the information. On the other hand, the defence of reportage arises “where it is not the content of a reported allegation that is of public interest, but the fact that the allegation has been made”5.

On 2 July 2021, the Federal Court delivered its decision on the defamation suit initiated by Raub Australian Gold Mining Sdn Bhd (“RAGM”) against Mkini Dotcom Sdn Bhd (“Malaysiakini”) and 3 of its employees. In a narrowly split decision of 3-2 by the five-member panel, the majority judges held inter alia, that a journalist must decide to rely on and plead either the Reynolds defence or the defence of reportage and not both. It was further held that goodwill is capable of existing in an insolvent company and both damages for loss of goodwill and vindication of reputation can be awarded to the company.
 
Material facts
 
RAGM is a company involved in operating a gold mine located in Raub, Pahang. Malaysiakini is a company that owns and operates an online news portal, familiar to the news-loving community, known as Malaysiakini.

In 2012, Malaysiakini published 3 articles and 2 videos (“impugned Articles and Videos”) which, in essence, alleged that RAGM had used cyanide in its gold mining operations, causing serious illness to the nearby residents and death of wildlife and vegetation surrounding the area as well as environmental pollution.

Upon seeing the impugned Articles and Videos / thereafter, RAGM commenced legal action against Malaysiakini, and the 3 authors of the relevant articles, for defamation and malicious falsehood.
 
The High Court Decision6
 
The High Court dismissed RAGM’s claim against all the defendants. The High Court held that:-
 
  1. RAGM succeeded in proving defamation;
  2. Malaysiakini and the 3 relevant authors succeeded in their defence of qualified privilege, that is responsible journalism and reportage – the Reynolds privilege7;
  3. Reportage is one form of the Reynolds privilege and it is considered part of the qualified privilege defence. Hence, it would be sufficient to plead qualified privilege to enable the defendants to prove reportage at trial; and
  4. On the tort of malicious falsehood, it was held that RAGM had failed to prove malice on the part of the defendants.
Dissatisfied with the decision, RAGM appealed.
 
The Court of Appeal Decision8
 
The Court of Appeal affirmed the High Court’s decision on dismissing the claim for malicious falsehood and reversed the decision on dismissing the claim for defamation. RAGM was awarded general damages, costs and granted an injunction to restrain the Malaysiakini and the 3 relevant authors from further publishing, circulating and distributing the impugned Articles and Videos.

In arriving at its decision, the Court of Appeal held the following:-
 
  1. Malaysiakini and the 3 relevant authors respondents had not acted fairly and responsibly. Hence, they could not rely on the defence of responsible journalism as they failed to meet the relevant 10-point test propounded in Reynolds;
  2. Reportage, due to it having its own distinctive features, has to be a treated as a distinct and separate defence from responsible journalism or qualified privilege.
  3. The defences of reportage and responsible journalism were in effect mutually exclusive and incompatible with each other. As such, pleading one of the defences in the alternative would not work.
  4. By failing to plead reportage expressly, Malaysiakini and the 3 relevant authors were precluded from relying on that defence.
Malaysiakini and the 3 relevant authors appealed.
 
Questions of Law
 
In the appeal to the Federal Court, nine leave questions were posed before the apex court for consideration, which were, inter alia, as follows:-
 
  1. Whether reportage is in law a separate defence from qualified privilege or the Reynolds defence of responsible journalism and whether it is to be treated as being mutually exclusive?
  2. Whether the defence of reportage needs to be pleaded separately from the plea of responsible journalism itself?
  3. Whether a defendant is obliged to plead either reportage or responsible journalism and not plead them in the alternative?
  4. Whether the proper test to determine if the defence of reportage succeeds is the test of adoption by the journalist of the publication as true and not for the journalist to establish his neutrality by independent verification?
  5. Whether it is proper to award general damages for loss of goodwill and vindication of reputation to a plaintiff company that has independently been subjected to a voluntary winding up by its creditors?
  6. Whether loss of goodwill can be recovered as a component of defamatory damages by a plaintiff company that has gone into insolvency?
Federal Court Decision
 
The Federal Court, by a majority of 3-2, upheld the Court of Appeal decision and ruled in favour of RAGM.
Abdul Rahman Sebli FCJ delivered the majority judgment of which Zaleha Yusof FCJ and Hasnah Mohammed Hashim FCJ concurred.
Harmindar Singh Dhaliwal FCJ delivered the minority judgment, which Vernon Ong Lam Kiat FCJ agreed with.
 
Majority judgment
 
In answering the leave questions, the Federal Court held that:-
 
Reportage and Reynolds defence of responsible journalism are separate and irreconcilable
 
  1. The defence of reportage is distinct and separate from the Reynolds defence of responsible journalism, hence, it must be specifically pleaded;
  2. The defence of reportage and Reynolds defence of responsible journalism are mutually exclusive and cannot be reconciled with each other ‑ it must be decided on which defence to be relied on as the Reynolds defence allows one to put forward the defamatory material as true, while the defence of reportage does not allow so;
Reportage
 
  1. The publisher who seeks to rely on the defence of reportage must make clear his neutral approach, that he does not himself believe the information to be true. If the journalist, expressly or impliedly, espouses or concurs with the defamatory statements, he loses the protection of reportage;
Reynolds defence of responsible journalism
 
  1. The second limb of the Reynolds defence of responsible journalism or qualified privilege requires a party to satisfy the court that the steps to gather, verify and publish the information were responsible and fair;
  2. The burden remains with the journalist to verify the truth and accuracy of what is published. The failure to get clarification from a representative of RAGM is not a valid excuse nor a free pass to publish the material in a way that is defamatory of RAGM;
  3. The 10 points test in Reynolds is illustrative and not exhaustive. In any case, all 10 factors listed in Reynolds must be considered, with the necessary adjustments for the ‘special nature’ of reportage;
Damages
 
  1. RAGM’s insolvency is irrelevant as damages are assessed from the date of cause of action. Hence, it is the status of RAGM at the time of filing of the writ that is material; and
  2. Goodwill is capable of existing in an insolvent company and both damages for loss of goodwill and vindication of reputation can be awarded to the company.
Minority judgment
 
In the dissenting judgment, it was held that:-
 
  1. Reportage is not a distinct and separate offence from responsible journalism or qualified privilege generally. It is part of the Reynolds family of public interest privilege or responsible journalism;
  2. A defendant publisher could attempt to plead and prove both reportage and the general Reynolds privilege;
Reynolds defence – responsible journalism
 
  1. The 10 points set out in the Reynolds case are not compulsory requirements for a plea of responsible journalism to succeed. They must be applied in a practical and flexible manner having regard to practical realities;
Reportage
 
  1. The reportage doctrine is not confined to the reporting of reciprocal allegations;
  2. In cases of reportage, there is no requirement of verifying the truth of the allegations of an ongoing dispute as long as there is no adoption and the defendant has engaged in neutral reporting. Reportage is not about the truth of the statement but only that the statement was made. Only an accurate and a balanced report of the allegations is necessary. The only qualification is that the Reynolds 10 points have to be applied with the necessary adjustments in view of the special nature of reportage;
  3. A reportage defence is not lost even if a defendant appears to sympathize with the case put forward by one party. The defence of reportage is only lost by embellishment by the journalist adding his own comments to give truth to the story. A sinister motive or malice may not be relevant in the case of the defence of reportage;
Verification
 
  1. If any verification exercise is required to establish that the publisher or journalist has acted responsibly, it should not be burdensome or time consuming such that the urgency of the story is lost.
  2. The urgency of a story is a factor to be taken into account especially in respect of an on-going story of public interest since news is a perishable commodity as recognized in Reynolds.
Commentary
 
This recent decision is interesting, especially in the face of the related case of Hue Shieh Lee9. In that case, Hue Shieh Lee, the Vice-President of the Pahang Ban Cyanide in Gold Mining Action Committee (BCAC) was sued by RAGM in respect of two statements or articles alleged to have been made by her regarding RAGM.
 
Briefly, the Federal Court, in Hue Shieh Lee, upheld the decision that, inter alia, the publication of the Malaysiakini article (which is one of the impugned article and video sued upon in the present case) was held to be not defamatory of RAGM.
 
The Hue Shieh Lee decision was noted by Harmindar Singh Dhaliwal FCJ in the minority judgment of the present case, whereas the majority judgment was silent on the same.
 
Legal impact
 
This recent decision shed light on the local jurisprudence regarding the defences of reportage and Reynolds defence of responsible journalism, namely:-
 
  1. They are separate defences that are mutually exclusive;
  2. A journalist must decide to rely on and plead either of the defences, not both; and
  3. The test for the defence of reportage to succeed is to establish the publisher’s neutral approach, that he does not himself believe the information to be true.
Aside from that, the Federal Court also held that an insolvent company is entitled to damages from defamation. In doing so, the apex court held that:-
 
  1. It is the solvency of the company at the date of the writ that is relevant; and
  2. Goodwill is capable of existing in an insolvent company and both damages for loss of goodwill and vindication of reputation can be awarded to the company.
Impact on media
 
The present Federal Court decision will likely have severe ramifications on the media and the reporting of public interest matters. The impact of this decision may pose severe problems for the media to report on public interest matters urgently, especially since the decision held that Malaysiakini was required to verify the truth and accuracy of what is published, when RAGM’s representative refused to comment on the publications on grounds of a pending judicial review application. As recognised in the dissenting judgment, the urgency of a public interest story may be lost “as news is a perishable commodity as recognised in Reynolds”.
 
Nevertheless, this ruling may cause the media to be more careful in publication of public interest matters and consequently, diminish inaccuracies in the same.


This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such.
 
1 Advocate & Solicitor, Malaysia. Partner, Messrs Skrine.
2 Advocate & Solicitor, Malaysia. Partner, Messrs Skrine.
3 Advocate & Solicitor, Malaysia. Associate, Messrs Skrine.
4 Jameel v Wall Street Journal Europe SPRL [2006] UKHL 44, [2006] 4 All ER 1279, [2007] 1 AC 359, per Baroness Hale at p.685
5 Flood v Times Newspapers Ltd [2012] 2 WLR 760, per Lord Philips at p.783
6 Raub Australian Gold Mining Sdn Bhd v Mkini Dotcom Sdn Bhd & Ors [2016] MLJU 269
7 Reynolds v Times Newspapers Ltd and others [1999] 4 All ER 609; [2001] 2 AC 127, HL (folld)
8 Mkini Dotcom Sdn Bhd & Ors v Raub Australian Gold Mining Sdn Bhd [2018] 4 MLJ 209
9 Raub Australian Gold Mining Sdn Bhd (in creditors’ voluntary liquidation) v Hue Shieh Lee [2019] 3 MLJ 720

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