This article first appeared in The Edge Malaysia Weekly on September 13, 2021 - September 19, 2021

This monthly report is compiled and briefly summarised by a group of lawyers on a voluntary basis for the benefit of readers of The Edge.

Please consult your own lawyers if you need advice on the cases, issues and related matters highlighted here.

Federal Court (‘FC’) rules on the protective nature and ambit of the protection available to the press and journalists in a defamation case

Qualified privilege (‘QP’), which imports the concept of ‘responsible journalism’, protects the press and journalists in reporting matters of serious public concern. Persons affected by such reporting may react against the publication as being published with malicious falsehood and is defamatory. The law strikes a balance between the right of the public to know and the reputation of persons aggrieved by the publication — whether the limits of QP had been transgressed. There are two types of QP — (a) the Reynolds privilege (‘Reynolds Privilege’); and (b) the Reportage Privilege. The focus of Reportage Privilege are neutral reporting and the reporting is protected if both sides of the story is fairly reported in a disinterested manner and without the publishers adopting the report. Where the elements are satisfied, there is no need to attempt verification of the truth of either side of the story. The thrust of the Reynolds Privilege is on the truth and accuracy of the imputation that is reported and whether the publisher had taken steps to ensure what is published is accurate.

Issues

What is the extent of Reportage Privilege and Reynolds Privilege, both of which are public interest defences? Are the two public interest defences of QP mutually exclusive? Must Reportage Privilege be specifically pleaded by the press and journalists? These were the main issues that confronted the FC in Mkini Dotcom Sdn Bhd & 3 others v Raub Australia Gold Mining Sdn Bhd (Judgment dated 2.7.2021).

Case summary and decisions

Raub Australia Gold Mining Sdn Bhd (‘Raub Gold Miners’), the plaintiff, carried out gold mining activities at Bukit Koman, Raub, Pahang. The 1st defendant (‘Mkini’) owns and operates an online news portal known as Malaysiakini and the other defendants were news editors and journalists (‘Appellants’). Raub Gold Miners sued the Appellants for defamation and malicious falsehood in respect of three articles and two videos published in the news portal. In essence, the articles and videos alleged that Raub Gold Miners had used cyanide in its gold mining activities, which had caused serious illness among the villagers, death of wildlife and vegetation, and environmental pollution in Bukit Koman. The first article was titled ‘Villagers fear for their death over cyanide pollution’ (‘1st Article’); the second article was titled ‘78 pct Bukit Koman folk have cyanide related ailment’ (‘2nd Article’) with a video presentation (‘1st Video’); and the third article was titled ‘Raub folk to rally against ‘poisonous gold mine’ (‘3rd Article’) with a video presentation (‘2nd Video’). Prior to the publications, there was already extensive national coverage by other media on the issue of gold mining activities using cyanide. The Appellants and other medias had attended press conferences organised by the Bukit Koman Anti-cyanide Committee (‘BCAC’) and the publications were reproduction of two press conferences. Raub Gold Miners claimed that the articles and videos were published with malicious intent to injure its reputation, trade and business. In addition to the defence of ‘fair comment’, the Appellants relied on the Reynolds Privilege and/or in accordance with the defence of Reportage Privilege.

High Court (HC)

The High Court (‘HC’) was satisfied that publications concerning the health, well-being and safety of a community is a matter of public concern. However, the learned Judge found on the evidence that (a) ‘the various health issues suffered by most of the residents of Bukit Koman were due to traces of herbicides’; (b) the use of sodium cyanide by Raub Gold Miners for its carbon-in-leach plant ‘did not cause any pollution’; (c) Raub Gold Miners ‘had exercised stringent safety and appropriate methods in gold mining’; and (d) in the absence of malicious falsehood, the Appellants were nonetheless entitled to the protection of the law — the Reynolds Privilege in respect of the 1st Article and Reportage Privilege in respect of the 2nd and 3rd Articles linked to the 1st and 2nd Videos respectively. In particular, the learned Judge dismissed Raub Gold Miner’s arguments that the Appellants had not pleaded the defence of QP in respect of Reportage Privilege in that Reportage Privilege is a part of Reynolds Privilege and which had been pleaded. Raub Gold Miners appealed.

Court of Appeal (CA)

In a unanimous decision delivered by Suraya Othman JCA (Abang Iskandar JCA (now CJSS) and Mary Lim JCA (now FCJ) concurring, the CA upheld the decision of the HC that (a) the publications concerned matters of public concern; and (b) the absence of malice to sustain a cause of action for malicious falsehood. However, the CA allowed the appeal against the dismissal of the claim for defamation. In respect of the 1st Article, the elements of Reynolds Privilege of responsible journalism was not proved. Concerning Reportage Privilege in respect of the 2nd and 3rd Articles linked to the videos, the CA held that it was not specifically pleaded and this was fatal. Further, it was also not reported in a fair, disinterested and neutral way and without the Appellants embracing, garnishing and embellishing the allegations. The Appelants appealed to the FC on questions of law, which were concerned with the Reportage Privilege in relation to the Reynolds Privilege.

Federal Court

The FC was unanimous that the publications concerned matters of public concern and there was no malicious falsehood and the 2nd Article and the 1st Video were not actionable in view of an earlier decision of the FC that it was not defamatory. However, the FC was divided in its opinion on whether the Reportage Privilege need not be specifically pleaded and whether Reportage Privilege and the Reynolds Privilege or responsible journalism had been established on the evidence.

In the majority judgment of the FC delivered by Abdul Rahman Sebli FCJ (Zaleha Yusof and Hasnah Mohammed Hashim FCJJ concurring), the majority of the FC affirmed the decision of the CA. The majority held that although the Reynolds Privilege and Reportage Privilege are both public interest defences, the FC held that Reportage Privilege is nonetheless a special and separate kind of responsible journalism with distinctive features of its own and its essential features must be specifically pleaded. In particular, the impugned materials (a) must have been reported in a fair, disinterested and neutral way such that both sides of the story are published; and (b) without the press or journalists espousing or adopting or concurring in the charges contained in the source material of the publication. In contrast to the Reynolds Privilege, the journalist must have taken appropriate and reasonable steps to verify the truth and accuracy to justify their subjective belief in the truth of the statements. The press and the journalists must choose between the defence of Reportage Privilege or Reynolds Privilege and cannot have it both ways.

The majority of the FC held that not only did the Appellants fail to plead the essential feature of Reportage Privilege, on application of an objective test, the evidence showed that the Appellants had adopted the charges in the impugned materials.

The majority of the FC also held that the Appellants failed to establish the Reynolds Privilege as there was failure to take reasonable steps to verify the truth and accuracy of the impugned materials. The FC rejected the argument that the Appellants had tried but failed to obtain clarification from a representative of Raub Gold Miners was sufficient justification for the publication.

The minority judgment of the FC was delivered by Harmindar Singh Dhaliwal FCJ (Vernon Ong FCJ concurring), which upheld the decision of the HC. In the opinion of the minority, where the media invokes freedom of expression in advancing public interest, the important issue concerns the extent to which the media is allowed to provide such information in consonance with the imperative right of the public to know about matters that concerns the community and the public at large. The subject matter of the publication had already received widespread national publicity.

Federal Court (‘FC’) rules that rates cannot be imposed in a laissez-faire fashion and there must be full compliance with the provisions of the LGA

Local authority areas are established for local authorities to administer, whether styled as municipal or district councils. These local authorities are local governments with their attendant powers, duties and responsibilities set out in the LGA. To finance their activities in discharging their duties and responsibilities, part of the revenue is raised from rates imposed on holdings located within the area of local authority (‘Rateable Holdings’), which imposition must be on a ‘just and proper’ basis as provided for in s 129 of the LGA. The LGA also contains extensive provisions dealing with how rates are to be assessed and levied — beginning from preparation of the Valuation List (‘VL’) with the cooperation of owners of holdings for determination of the annual rates by the State Authority, notification by Gazette and advertisements that the VL has been prepared and followed by public inspection and objections by persons aggrieved. Each VL has a life span of five years and until a new VL is prepared, the existing VL remains in force until superseded by a new VL. A VL may be revised or amended on or before 31 December of the year preceding the year any VL is to come into force provided that revisions or amendments may only be made in respect of Rateable Holdings, or holdings which are already subject to the payment of rates levied under the LGA.  

Issues

What are the powers of a local authority in imposing rates on holdings within its area of local authority? How may the powers be exercised? What is the statutory lifespan of a VL and how may its statutory lifespan be extended and by whom? Is it possible to amend an existing VL to include holdings that are not previously Rateable Holdings within the VL and what processes are involved in revising the annual value of the Rateable Holdings? These were major questions that the FC had to resolve in Majlis Daerah Hulu Selangor v United Plantations Bhd (Judgment dated 14.7.2021).

Case summary and decision

United Plantations Bhd (‘UPB’) owned about 3000 hectares of holding in the District of Ulu Selangor, upon which it carries on an oil palm plantation business (‘UPB’s holding’). Prior to July 2008, UPB’s holding was not within the boundaries of the Hulu Selangor District Council, which meant that it was not rateable. In July 2008, the boundaries of the Hulu Selangor District Council were extended to include UPB’s holding. In July 2016, Majlis Daerah Hulu Selangor (‘MDHS’) issued a Notice of Extension of Valuation List prepared for the year 1996 (‘Extension of VL 1996’), stating that its expiration date of 31.12.2016 was extended to continue in force until 31.12.2019. In May 2018, MDHS issued to UPB a Notice of Amendment of VL (‘Amendment of VL 1966’) under s 144(1) of the LGA to include UPB’s holding and that with effect from July 2018, the value of UPB’s holding was RM17,351,300.00 and the annual rate payable was RM173,513.00. UPB objected and after hearing UPB’s objections, MDHS informed UPB that it was maintaining its position.

On appeal to the High Court (‘HC’), it was held that (a) the Amendment of VL 1996 was void and ultra vires the LGA; (b) the Amendment of VL 1996 to include UPB’s holding, which was not previously rated under the LGA, was illegal; and (c) non-compliance with the mandatory provisions of the LGA rendered the acts of MDHS invalid. MDHS appealed to the FC on questions of law pursuant to s 145(5) of the LGA. In a unanimous decision delivered by Mary Lim Thiam Suan FCJ (Nallini Pathmanathan and Hasnah Mohammed Hashim FCJJ concurring), MDHS’s appeal against the decisions of the Courts below were dismissed.

The FC carried out a forensic and detailed examination of the LGA and held that it was a structured and comprehensive piece of legislation. In context, MDHS had misinterpreted the provisions of the LGA and had misapplied its provisions, or had applied the provisions in a laissez faire manner —  (a) the Extension of VL 1996 contravened s 137 of the LGA in that a VL only has a statutory lifespan of five years and a new VL must be prepared once in every five years unless extended by the State Authority; (b) the VL of 1996 expired in 2001 and the State Authority did not extend it; (c) in the absence of a new VL to replace the VL 1996, the VL 1996 continued to apply; (d) the Amendment of VL 1996 to include UPB’s holdings was invalid in that UPB’s holding was a new holding as a consequence of delineation of the boundaries of the Hulu Selangor District Council; and (e) in the absence of a valuation report, the notice of Amendment of VL 1996 and MDHS’s decisions relating to UPB’s Holding were without justification or basis.

Court of Appeal (‘CA’) rules on the circumstances that disqualifies an advocate and solicitor from acting as counsel

The Legal Profession (Practice and Etiquette) Rules 1978 (‘LPR’) provides that an advocate and solicitor is not to accept a brief if embarrassed, if professional conduct is likely to be impugned, if difficult to maintain professional independence and not to abuse confidence reposed in him by client. An issue commonly faced by an advocate and solicitor in practice is that whenever he or she had acted for a client (‘A’) as counsel in a particular matter, he or she cannot act or is disqualified from acting as counsel for another client (‘B’) against A.

Issues

What are the circumstances a party may rely on to disqualify an advocate and solicitor from acting as counsel in a particular case? The CA was confronted with this subject matter in Dato’ Azizan & 2 Ors v Pinerains Sdn Bhd (Judgment dated 9.8.2021).

Case summary and decision

Pinerains Sdn Bhd (‘Respondent’), was a 4.17% shareholder of Apex Equity Holdings (‘Apex’). It applied to disqualify two lawyers (‘NN and WWW’) from acting as counsel for the Appellants, independent directors of Apex. Apex had a wholly owned subsidiary (‘JF Apex’), which had entered into a business merger agreement with Mercury Securities Sdn Bhd (‘Mercury’). A vesting order (‘VO’) was granted by the Court to give effect to the business merger. The Respondent intervened and applied to set aside the VO and also counterclaimed against Mercury, JF Apex, Alliance Invest Bank and the Appellants (‘Action 345’). The Respondent in its counterclaim also sought that the resolutions passed at the EGM of Apex (‘Resolutions’) be invalidated. In defending the counterclaim, the Appellants contended that it was procedurally improper to have joined them as defendants in Action 345. The High Court set aside the Resolutions and held that there was no procedural impropriety in naming the Appellants as defendants. An appeal was lodged against the decision and an application was made to disqualify NN and WWW from acting as counsel. The disqualification application was premised on the basis that prior to Action 345, JF Apex sued the Respondent and two former directors/shareholders of the Respondent (‘Former Directors’), alleging that they had acted in concert with others in breach of the laws relating to capital markets (‘Action 264’). An application was made to strike out Action 264 and the Former Directors were represented by NN and WWW as counsel. In the instant appeal, NN and WWW represented the Appellants. The Respondent’s case was that NN and WWW by acting as counsel for the Former Directors in OS 264 and now for the Appellants have effectively switched camps and that such conduct is subversive of the appearance that justice is being done.

In a unanimous decision delivered by See Mee Chun JCA (Lee Swee Seng and Hadhariah Syed Ismail JJCA concurring), the CA dismissed the disqualification application. The CA rejected the argument that being counsel for the Former Directors equates to being counsel for the Respondent. It was held that to disqualify an advocate and solicitor from acting as counsel, the applicant must show or prove that (a) there was a former solicitor-client or some fiduciary relationship between the parties; (b) that the persons sought to be disqualified are in possession of confidential information which is relevant to the subject matter; (c) full particulars of relevant confidential information must be placed before the court; and (d) a strong case must be made out by the applicant. On the facts, the CA also rejected the Respondent’s argument that the disqualification should be based on a conflict of interest situation. The preponderance of judicial authorities is that upon termination of the retainer between the solicitor and the client, the only surviving obligation is a duty to preserve the confidentiality of information imparted during the subsistence of that relationship. The evidence produced do not show the existence of confidential information having been acquired by NN and WWW.

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