PUTRAJAYA (July 2): A company in liquidation is entitled to receive damages for defamation from a publication, the Federal Court ruled in a majority judgement today.
The apex court’s majority ruling upholds the Court of Appeal judgement made three years ago in awarding RM200,000 damages to Raub Australian Gold Mine Sdn Bhd (RAGM), which had sued news portal Mkini Dotcom Sdn Bhd, the operator of the Malaysiakini website, for defamation.
Despite the decision on awarding damages to a company that is in liquidation, central to the issue was the treatment of whether the defence of reportage should be pleaded separately with the defence of qualified privilege in the defence statement.
The majority judgement ruled in the affirmative in dismissing the appeal by Malaysiakini.
Justice Datuk Abdul Rahman Sebli wrote the majority judgement, where Justices Puan Sri Zaleha Yusoff and Datuk Seri Hasnah Mohammed Hashim were in agreement.
They were replying to two questions of law posed on whether it was proper to award general damages for loss of goodwill and vindication of reputation to the company subject to a voluntary winding up by its creditors and whether loss of goodwill can be recovered as a component defamatory damages by a company that has gone into insolvency in the affirmative.
Meanwhile, Justice Datuk Harminder Singh Dhaliwal and Justice Datuk Vernon Ong Lam Kiat — who led the bench — were in the minority. Justice Harminder wrote the minority judgement that set aside the Court of Appeal judgement.
Justice Ong said Section 77 of the Courts of Judicature Act 1964 stipulates that the majority judgement should stand.
"With this, the appeal by the appellant (Malaysiakini) is hereby dismissed," he said.
After a short adjournment, the five-member bench ordered Malaysiakini to pay costs of RM200,000.
This is besides the RM200,000 damages that the Court of Appeal had ordered the news portal to pay to RAGM and costs of RM150,000 in the appellate court.
On Dec 1, lawyers for Malaysiakini led by Datuk Dr Cyrus Das and senior counsel Tan Sri Cecil Abraham for RAGM argued over whether a company in liquidation can still receive damages for defamation.
RAGM named the portal owner, along with three journalists, as defendants in the defamation suit based on three articles and two videos on RAGM and the plight of the residents.
Seven questions of law posed on reportage and qualified privilege
While there were two questions of law posed on whether a company in liquidation is entitled to receive damages as stipulated above, seven questions of law were posed on the defence of reportage and whether it was separate from the Reynolds defence of qualified privilege.
Justice Abdul Rahman, who was part of the majority, ruled it should be pleaded separately in the defence statement.
He said that from the pleadings and the contents of the three articles and two videos, it was obvious that the news portal had subscribed to a belief in the truth and accuracy of the defamatory imputations.
“There was no averment in the statement of defence denying that they had subscribed to such belief and that they were simply reporting in a neutral fashion. A vital element of reportage is therefore missing from the pleadings to entitle the appellant (Mkini Dotcom) to rely on the defence of reportage.” he said.
“We accept the respondent’s (RAGM) contention that as a matter of doctrine, the defence of reportage cannot be reconciled as part of the Reynolds defence of responsible journalism or qualified privilege. The gulf between the two defences is too wide to be abridged as defences of the same specie,” he added.
The judge said given the material difference, reportage and the Reynolds defence of responsible journalism, the two defences must be treated as mutually exclusive.
“The Court of Appeal was therefore correct in holding that the defence of reportage must be specifically pleaded as it is distinct and separate from the Reynolds defence of responsible journalism,” the apex court judge said.
Minority judgement
Justice Harminder in his judgement said the High Court judge was right in dismissing the suit as the Federal Court earlier dismissed RAGM's suit in its suit against Hue Shih Lee, who was then the Ban Cyanide Action Committee, where one of the articles complained in Hue's case was one of the three complained in this case.
“In view of the findings of the Federal Court that the article was not defamatory of RAGM, this Court is therefore bound by the said decision since the statements made by Hue are those produced in the second article and the first video in the present appeal,” he said.
The top judge also cited the UK law that beginning Jan 1, 2014 had taken a significant swing in the Reynolds defence of responsible journalism, shifting to a concept of reasonable belief that the publication is in the public interest.
This new shift, Justice Harminder said, resulted in the country of origin to depart from following the Reynolds defence. However, as this matter was not addressed, the top judge said the court had to continuously rely on Reynolds.
With regard to this case, Justice Harminder said 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,” he noted.
In ruling that the news highlighted was off public interests, the Federal Court judge also said the news portal had sought comments from a federal minister (Datuk Seri Dr Ng Yen Yen) who was then Raub Member of Parliament, and comments from the Pahang state local government and environment chairperson, that the water was cyanide-free.
“Considered as a whole, the only fair and reasonable conclusion is that the impugned articles and videos were an accurate, balanced and neutral account of the dispute,” he said.
As news is a perishable commodity as recognised in Reynolds, the judge said the urgency of a story is a factor to be taken into account, especially in respect of an ongoing story of public interest.
“It would be unreasonable to expect a newspaper to undertake a verification exercise with independent experts or engage its own experts before publishing a developing story of daily interest.
“In the present case, the whole story about the fears arising from RAGM's gold mining activities was already in the public consciousness. The evidence disclosed that since 1996, there were at least 26 news articles from various news media which reported the use of cyanide by the plaintiff.
“So, to now impose a burden on the media to engage independent experts prior to publication would not just be an onerous undertaking, but also impractical as the function of the media is to report the news as it unfolds,” he said.
He added that the appellate court was wrong to disturb the High Court judgement and in its approach taken in setting aside the trial judge's decision.
Justice Harminder also had an advice for journalists and the media in his judgement, namely that it is beyond dispute that the press and journalists play a crucial role in reporting matters of public interest and matters of serious public concern.
“In its role as a watchdog for the people, the awareness created by such media reports will by and large lead to greater protection of society as a whole. In carrying out this duty, the press may at times get the facts wrong.
“However, in matters of public interest, so long as the press hold a reasonable belief that the publication is in the public interest or that the publication is a fair, accurate and impartial account of a dispute, the press and journalists are entitled to the protection of the law,” he said in his minority judgement.