Licence to Defame – The Sequel?

Oommen Koshy and Kwan Will Sen discuss a sequel of sorts to Lee Yoke Yam v Chin Keat Seng.

From 28 November 2012 onwards, by virtue of the landmark Federal Court case of Lee Yoke Yam v Chin Keat Seng [2013] 1 MLJ 145 (“Lee Yoke Yam”), statements made in a police report (known as the first information report) pursuant to Section 107 of the Criminal Procedure Code is accorded absolute privilege against defamation claims. This means that a defamation claim cannot lie against the maker of the said statements (regardless of what those statements are).
The recent Federal Court case of Dato’ Dr. Low Bin Tick v Datuk Chong Tho Chin in Civil Appeal No. 02-73-10/2015(W), which was heard together with three other related appeals with the same parties (i.e. Civil Appeals No. 02-73-10/2015(W), 02-75-10/2015(W) and 02-76-10/2015(W)) (collectively, the “Low Bin Tick Case”), concerned amongst others, a revisiting of the legal principles laid down in Lee Yoke Yam, as well as issues relating to qualified privilege.
This article will first set out the factual background relevant to the Federal Court’s decision. It will then explain the Federal Court’s rationale in answering the questions of law, and more importantly, the impact of the decision on statements made in letters of complaint to the Registrar of Societies (“ROS”), the Anti-Corruption Agency (“ACA”) (now the Malaysian Anti-Corruption Commission), the Commercial Crime Division (“CCD”) and Bar Council Malaysia (“BC”) with regard to defamation claims.
The Facts
The alleged defamer, Dato’ Dr. Low Bin Tick (“Appellant”), was at the material time, the President of Chinwoo Athletic Association Selangor and Kuala Lumpur (“Chinwoo”). He had succeeded the individual who was allegedly defamed by him, Datuk Chong Tho Chin (“Respondent”), who was the immediate past President of Chinwoo. The Respondent is also an advocate and solicitor in a legal firm in West Malaysia.
Chinwoo was the registered owner of a parcel of land in Kuala Lumpur (“the Land”). In the 1980s, Chinwoo entered into a joint venture with a company known as Jiwa Realty Sdn Bhd (“Developer”) to develop the Land (“Project”). For this purpose, the parties entered into various sale and purchase agreements (“SPAs”), whereby Chinwoo would sell the Land to the Developer, and in return, the Developer agreed to sell 23% of the units developed to Chinwoo. At the material time, it was agreed that the Developer would develop a total of 669 units of property. This would then entitle Chinwoo to 154 units (which represent the said 23%). The Project never took off and the said SPAs were revoked.  
In 1991, new SPAs were entered into for the same Project, with Chinwoo’s entitlement of 154 units of property remaining intact. Chinwoo and the Developer also entered into an additional agreement (“Additional Agreement”) which contained a clause that allowed the Developer to develop the Land “in any manner it may deem fit” (“Free Hand Clause”). The Additional Agreement was agreed to by the Trustees of Chinwoo. At the material time, the Respondent was a trustee of Chinwoo, the President of Chinwoo and a member of the Chinwoo Property Committee. Further, the new SPAs and the Additional Agreement were drawn up by the Respondent’s law firm.
The Project was completed in 1998. Chinwoo’s 154 units were delivered to Chinwoo pursuant to the SPAs. During this time, some of the members of Chinwoo realised that the 154 units were less than the 23% sharing ratio initially agreed to in the earlier SPAs. By virtue of the Free Hand Clause, the Developer had obtained an approval from the authorities to build an additional 201 units (thus totalling 870 units). Going by the 23% ratio, this would have meant that Chinwoo ought to have been entitled to 200 units, i.e. 46 more than the 154 units it received.
Given the circumstances, it was resolved at an annual general meeting of Chinwoo on 29 June 2003 that an investigation be carried out to determine whether there were any irregularities in relation to the Project. An investigation committee was formed for this purpose. This eventually led to amongst others, a finding that the Respondent was in breach of his duty to Chinwoo and was negligent in failing to protect Chinwoo’s entitlement to 23% of the constructed units in respect of the Project.
The Appellant thereafter issued letters of complaint to the ROS, ACA, CCD and BC on this issue. These letters contained, amongst others, allegations of fraud, misuse of power and breach of trust against the Respondent. This then led to the Respondent’s defamation suits against the Appellant. In his defence against the defamation suits, the Appellant raised the defences of absolute privilege and/or qualified privilege.
Findings of the High Court and the Court of Appeal
The trial judge found that the Appellant had defamed the Respondent. The High Court held that the Appellant could not avail himself to the defences of absolute privilege and/or qualified privilege as he did not have the mandate of Chinwoo to issue the letters of complaint against the Respondent. The lack of mandate was said to have shown that the Appellant had acted mala fide in writing the impugned letters of complaint. The Court of Appeal upheld the High Court’s findings.
The Federal Court held that the lodging of reports or writing letters of complaint to the ROS, ACA and CCD are occasions of absolute privilege. These three bodies share a common feature in that they are empowered by statute to investigate and take appropriate action against those who have breached the respective legislation under their purview.
The Court held that the ratio in Lee Yoke Yam ought to similarly apply to complaints made to the ROS, ACA and CCD, in that public policy considerations ought to prevail – if defamation actions can be brought against such complainants, it may discourage individuals (out of fear of risk of slander) from making the relevant reports or complaints, thus placing the investigation, detection and punishment of crimes at serious risk. These public policy issues were considered in the Court of Appeal case of Abdul Manaf v Mohd Kamil Datuk Hj Mohd Kassim [2011] 4 MLJ 346, the English House of Lords case of Taylor and Another v Director of the Serious Fraud Office and Others [1999] 2 AC 177 and the English case of Dunnet v Nelson [1926] S.C. 769.
The Federal Court considered the Singapore Court of Appeal case of Goh Lay Khim and Others v Isabel Redrup Agency Pte Ltd and another appeal [2017] SGCA 11 (“Goh Lay Khim”). In Goh Lay Khim, the Court held that gratuitous complaints to authorities should be protected by qualified privilege only, taking into account the local political and social conditions of Singapore. Notwithstanding Goh Lay Khim, the Federal Court reiterated its stance in Lee Yoke Yam, in that police reports are protected by absolute privilege, and extended this privilege to reports or complaints made to ROS, ACA and CCD (the last of which is essentially part of the police). 
The issue as to whether malicious intent may possibly disentitle one from relying on the defence of absolute privilege was also raised. The Federal Court adopted Lincoln v Daniels [1962] 1 QB 237, which gives higher credence to “truth [being elicited] even at the risk than an injury inflicted maliciously may go unredressed”.   
The apex court further held that for absolute privilege to apply, authority or mandate to make the relevant statements are not necessary considerations. Thus, the Appellant could avail himself to the defence of absolute privilege, even if he did not have the mandate to lodge the relevant complaints to the ROS, ACA and CCD.
Having decided that the complaints to the ROS, ACA and CCD are occasioned by absolute privilege, the Federal Court took the view that complaints made to the BC are prima facie occasioned by qualified privilege.
The Federal Court held that “[i]f the communication were made in pursuance to a duty or on a matter which there was a common interest in the party making and the party receiving it, the occasion is said to be one of qualified privilege” and “[w]hether an occasion is a privileged occasion depends on the circumstances of each case, the nature of the information and the relation of the speaker and recipient”. In short, there is no hard and fast rule with regard to qualified privilege, and it is for the judge to determine as a matter of law whether the occasion is privileged.
In the present case, the Appellant was the President of Chinwoo when the complaints were made to the BC. He was responsible for the proper conduct and management of the affairs of Chinwoo. On the other hand, the recipient, i.e. BC, is tasked with the responsibility to manage the affairs and professional conduct of members of the Malaysian Bar (of which the Respondent is a member). The Federal Court adopted the English cases of Lincoln v Daniels [1962] 1 QB 237 and Beech and another v Freeson [1971] 2 All ER 854.
On the question of malice, the Federal Court held that the law prevents the inference of malice in the publication of statements which are false in fact and injurious to the character of another if such statements are fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs.
In the High Court and Court of Appeal, the Courts found that the absence of mandate to lodge the relevant complaints per se was sufficient to prove malice. The Federal Court disagreed, and held that the mere act of filing the complaints is insufficient to prove malice.
The Federal Court’s decision, in particular on absolute privilege, is illuminating. One of the reasons for the Federal Court to accord absolute privilege to police reports is the fact that there are provisions under both the Penal Code and Criminal Procedure Code which penalise false first information reports being made. However, similar provisions are not found in the Societies Act 1966 and the Malaysian Anti-Corruption Commission Act 2009. Yet, the Federal Court saw it fit to accord absolute privilege to complaints made to the ROS, ACA and CCD on the strength of public policy considerations.
Further, it remains to be seen whether absolute privilege will be extended to the lodgement of complaints to other regulatory authorities, such as the Securities Commission Malaysia, Companies Commission of Malaysia, Insolvency Department, Inland Revenue Board, Customs and Excise Department and Malaysian Competition Commission, all of which are tasked under specific laws to carry out investigations to determine whether the laws within their purview are breached. Going by the decisions in Lee Yoke Yam and now the Low Bin Tick Case, it would perhaps not be far-fetched to assume that where appropriate, the Malaysian Courts may extend absolute privilege to complaints made to other regulatory authorities.

A commentary on the Federal Court’s decision in Lee Yoke Yam v Chin Keat Seng was published in Legal Insights 1/2013 under the title “Licence to Defame?