Qingdao Bohai Construction Group Co, Ltd and others v Goh Teck Beng and another [2016] SGHC 142

Introduction

This action concerns defamatory material in the print media and on the Internet. The Internet defamation in the present case involves 12 articles posted on several foreign websites (“the Online Articles”). Separately, two articles with content similar to the Online Articles were published in Taiwan on 29 November 2013 in two newspapers (“the News Articles”). Both liability and damages are in issue.

At its forefront, the Internet defamation in the present case underscores the anonymity the Internet provides to the Internet user who generates material and posts them on websites. This represents the “dark side” of Internet anonymity. As observed in Matthew Collins, The Law of Defamation and the Internet (Oxford University Press, 3rd Ed, 2010) (“Collins”) (at para 5.63):

Any legal measure taken in response to those who knowingly publish false and defamatory information on the Internet, at least for now in Singapore, is confined to the Defamation Act (Cap 75, 2014 Rev Ed) and the common law principles concerning defamation. The element of publication in the law of defamation is bilateral. Consequently, publication in the context of the Internet involves two components. The first component of Internet publication has to do with the identity of the publisher. In the present case, therefore, there must be proof of the identity of the Internet user as well as that of the uploading or posting of the Online Articles, and this has to lead to the defendants. The plaintiffs, however, do not rely on electronic evidence to trace the publication of the Online Articles to the defendants. The absence of such evidence means that the publisher of the Online Articles has not been identified and remains anonymous. Thus, an issue for determination in this judgment is whether the publication element in defamation law can be inferred from the circumstances of the case. This judgment will examine whether, in the absence of direct electronic evidence to prove Internet publication, the plaintiffs have met the requisite civil standard of proof based on predominantly circumstantial evidence. Besides the quality of the circumstantial evidence, an examination of the nature and quality of a so-called admission by the second defendant, to the effect that the defendants are responsible for posting the Online Articles on the Internet, is required.

Posting or uploading material on the Internet alone does not constitute publication for the purpose of Internet defamation. The second component of publication for the purpose of Internet defamation requires proof to the requisite civil standard that the offending material was downloaded from a web server by third party readers in Singapore. There is no presumption that material placed on a generally-accessible website has been published to a substantial number of persons (whether within the jurisdiction or elsewhere). In this case, the plaintiffs have limited their claims to publication of the Online Articles in Singapore. It is common ground that Internet defamation occurs in the jurisdiction where the impugned articles are downloaded and read by a third party. In this sense, publication and jurisdiction are linked and will be examined together.

These aspects of the present case are what set it apart from most other local cases where the identity of the Internet user who posts the offending material is not in dispute. Examples include Lee Hsien Loong v Roy Ngerng Yi Ling [2014] SGHC 230 and Attorney-General v Au Wai Pang [2015] 2 SLR 352 (and the decision on appeal in Au Wai Pang v Attorney-General [2016] 1 SLR 992), where the defendants were the owners and writers of the blogs where the offensive articles were posted and indisputably downloaded by a number of third party readers in Singapore.

In brief, the main legal issue on liability for defamation in the present case is whether the defendants are responsible for the various defamatory publications in the print media and on the Internet. The defendants deny publication of the offensive material and, in so far as the Online Articles are concerned, urge the dismissal of the action in accordance with the abuse of process principles enunciated in Jameel (Yousef) v Dow Jones & Co Inc [2005] QB 946 (“Jameel”). If the defendants’ submissions on publication are accepted, they would be dispositive of the whole case. It is only if the question of publication is answered in favour of the plaintiffs that the other elements that make up the tort of defamation – that the publication refers to the plaintiffs and conveys the pleaded defamatory meanings – need to be determined and, after liability is prima facie established, the defence of justification and the question of damages arise for consideration. This judgment will adopt the approach outlined.

The plaintiffs have filed a separate cause of action in conspiracy, but this is not strenuously pursued. This is not surprising since the outcome of their conspiracy claim is very much dependent on proof of the same facts needed to support the defamation claim.

The parties

The first plaintiff, Qingdao Bohai Construction Group Co., Ltd (“P1”), is a company incorporated in the People’s Republic of China (“PRC”) and was established in 1998 under the name Qingdao Century Decoration Co., Ltd. At all material times, P1 was and is in the business of construction and real estate development.

The second plaintiff, Qingjian Group Co., Ltd (“P2”), is a company established in 1952 in the PRC. It was formerly known as Qingdao Construction Group Corporation. At all material times, P2 was and is in the business of construction, real estate development, capital management, logistics and design consulting. P2 was previously a state-owned enterprise but has since become privatised.

The third plaintiff, Qingjian Realty (South Pacific) Group Pte. Ltd. (“P3”), is a company registered in Singapore in 2011. At all material times, P3 was and is in the business of building and construction, and has completed a number of projects in Singapore ranging from residential, civil engineering, commercial and institutional to industrial projects.

The fourth plaintiff, Du Bo (“P4”), is a Singapore Permanent Resident who was and is at all material times a director of P1, P2 and P3.

The fifth plaintiff, Yuan Hong Jun (“P5”), is a citizen of the PRC who was and is at all material times the Chairman of P1.

The first defendant, Goh Teck Beng (“D1”), is a Singapore citizen and is the cousin of the second defendant, Ng Teck Chuan (“D2”), who is also a Singapore citizen.

The plaintiffs are represented by Mr Lee Eng Beng SC (“Mr Lee”). Mr Quek Mong Hua (“Mr Quek”) represented the defendants.

The plaintiffs’ pleaded case

The plaintiffs’ pleaded case is that in or around 2002, P1 and P2 began developing various residential projects in the PRC with HuanYu (Qingdao) Development Co., Ltd (“HuanYu”). HuanYu is a joint venture company originally formed by Grandlink Group Pte Ltd (“Grandlink”) and Qingdao High-tech Industrial Park Economic Development and Investment Company. HuanYu’s first director is one Goh Chin Soon (“Goh”), a Singaporean who is the uncle of both D1 and D2. Goh holds indirect shareholding interests in HuanYu through his majority shareholding in Grandlink. Goh remains a director and general manager of HuanYu and the chairman and legal representative of a related entity, HuanYu Marina City (Qingdao) Development Co., Ltd (“HuanYu Marina”). It is further contended that D1 is also a shareholder of Grandlink and a director of HuanYu and HuanYu Marina. In or around 2007, HuanYu and P1 and/or P2 and their respective related entities became embroiled in a number of lawsuits which were commenced against HuanYu and HuanYu Marina (collectively, “the HuanYu Group”) in relation to a number of construction projects in the PRC. As of the date of the Statement of Claim (Amendment No. 2), the total debt owed by the HuanYu Group to P1 and P2 and their related and/or affiliated companies (collectively, “the Qingjian Group”) was approximately RMB 560 million. The plaintiffs plead that against the backdrop of the bitter legal disputes between the Qingjian Group and the HuanYu Group, D1 and Goh began publishing a number of defamatory articles pertaining to the plaintiffs, which have been posted on a number of websites and online forums. I pause to note at this juncture that according to the defendants’ computer forensic expert, Peter James Alfred Moore (“Moore”), the hosting location of these websites and online forums were, at the time of his report, in China, Hong Kong and the United States.

As stated, the plaintiffs’ first claim is in defamation. It is pleaded that in or around the period 21 to 22 November 2013, Xu Bin, the Chief Executive Officer of P2, had, through searches conducted on a number of search engines, discovered approximately 15,000 search results of online articles which were defamatory of the plaintiffs. Xu Bin subsequently wrote to the websites to ask that the defamatory articles to be taken down. Most of the websites responded by removing and/or deleting the defamatory articles. However, despite these measures, various online articles could still be accessed on the World Wide Web. The present suit concerns a total of 12 online articles (ie, the Online Articles) which were posted on various websites and which contain untrue, scurrilous and defamatory statements which disparage the character and/or damage the reputation of the plaintiffs. The title and the search terms used to locate the Online Articles, as well as the website links/URLs at which the Online Articles appear, are set out in the following table:

Article

Title

Search terms used

Website links/URLs

1

“Du Bo, Yuan Hong Jun used two channels and double identities to siphon off state assets”

Not pleaded

“Using Two Paths and Double Identity, Du Bo and Yuan Hongjun Embezzled State-owned Assets”

“Du Bo”

and

“Yuan Hong Jun”

Similar articles at:

tid-1695489.html>

“Shandong Largest State-owned Asset Embezzlement Case Since Founding”

“Du Bo”

and

“Yuan Hong Jun”;

“Qingdao Bohai”

and

“Du Bo”

>

“Migrating to Singapore Disclosure of the Story Behind Privatization of State-owned Enterprise and Embezzlement of Hundred Billion Assets”

“Du Bo”

and

“Yuan Hong Jun”

“Disclosure of the Story behind Privatization of State-owned Enterprise and Embezzlement of Hundred Billion Assets!”

“Du Bo”

and

“Yuan Hong Jun”

“Using Two Paths and Double Identity, Du Bo and Yuan Hongjun Embezzled State-owned Assets”

“Du Bo”

and

“Yuan Hong Jun”

“Disclosure of the Story behind Privatization of State-owned Enterprise and Embezzlement of Hundred Billion Assets”

“Du Bo”

and

“Yuan Hong Jun”

“Du Bo Is the Legal Representative of the Newly Structured Qingjian Group Co., Ltd”

“Qingdao Bohai Construction Group Co., Ltd”

and

“Du Bo”;

“Qingdao Bohai”

and

“Du Bo”

“Shandong Largest State-owned Asset Embezzlement Case since Founding of the Country”

“Qingdao Bohai Construction Group Co., Ltd”

and

“Du Bo”

Similar articles at:

.com/read.php?tid-50706.html> 4.html>

“Shandong Largest State-owned Asset Embezzlement Case since Founding of the Country”

“Qingdao Bohai Construction Group Co., Ltd”

and

“Yuan Hong Jun”

“Disclosure of the Story of Privatization of State-owned Enterprise and Embezzlement of Hundred Billion Assets”

“Qingdao Bohai”

and

“Du Bo”

“Disclosure of the Story behind Privatization of State-owned Enterprise and Embezzlement of Hundred Billion Assets!”

“Qingdao Bohai”

and

“Yuan Hong Jun”

At the time of the filing of the Statement of Claim (Amendment No. 2), Articles 2, 3, 4, 5, 7, 8, 9, 10, 11 and 12 remained accessible, while Articles 1 and 6 were no longer accessible. A number of the Online Articles (viz, Articles 1, 2, 3, 4, 7, 9, 10, 11 and 12) were published in the name of D2. I pause here to note that by the time of Moore’s report, fewer articles were accessible.

The plaintiffs plead that:

(a) various statements in Articles 1, 3, 9 and 10 are defamatory of all five plaintiffs;

(b) various statements in Article 2 are defamatory of P1, P2, P4 and P5; and

(c) various statements in Articles 4, 5, 7, 8, 11 and 12 are defamatory of all five plaintiffs.

The plaintiffs further plead that pursuant to and in furtherance of D1 and D2 acting jointly or severally, the defamatory words in the Online Articles were transmitted and/or caused to be transmitted and published by D1 and D2 and/or published by agents procured by D1 and/or D2 on the World Wide Web. Furthermore, D1 and D2 knew and intended that the Online Articles would be republished and/or that such republication was the natural and probable consequence of D1 and D2’s publication of the Online Articles on the World Wide Web.

The plaintiffs plead that by reason of the publication of the Online Articles, the plaintiffs have had their reputation lowered in the estimation of right thinking members of the public. As for the alleged defamatory meanings of the Online Articles, they are described in the pleadings and are set out in Annex B of this judgment. For a quick appreciation of the defamatory meanings, it is useful to refer to paragraph 7 of the plaintiffs’ closing submissions which reads as follows:

Separately, two newspaper articles (ie, the News Articles) with content similar to the Online Articles were published in Taiwan on 29 November 2013 in two newspapers. The News Articles were sent by courier to United Overseas Bank Limited (“UOB Bank”) on or about 23 December 2013 and to Oversea-Chinese Banking Corporation Bank (“OCBC Bank”) in or around end-December 2013. The plaintiffs plead that it is probable that the News Articles were sent to UOB Bank and OCBC Bank by D1 and/or D2 jointly or severally, or that either or both the defendants had procured a third party to do so.

In addition to their claim in defamation, the plaintiffs also bring two alternative claims in conspiracy. In their claim for conspiracy by unlawful means, the plaintiffs plead that D1 and D2 had wrongfully, dishonestly and with intent to injure all or some of the plaintiffs by unlawful means, conspired and combined together to defame the plaintiffs. In their claim for conspiracy by lawful means, the plaintiffs plead that D1 and D2 had conspired and combined together wrongfully and with the sole or predominant intention of injuring the plaintiffs and/or causing loss to the plaintiffs by damaging or destroying the reputation and business interests of the plaintiffs.

I pause at this juncture to mention that the plaintiffs’ closing submissions and evidence make reference to other online articles on 38 unique websites containing content similar to the Online Articles. Significantly, though, this is not precisely pleaded and, for this reason, I shall say no more about these 38 articles.

The defendants’ pleaded case

The defendants deny that they published the News Articles and the Online Articles. They plead that in or around October/November 2013, D1 had submitted an online report to the Central Commission for Discipline Inspection of the Communist Party of the PRC (“CCDI”) through the official website of the CCDI. The CCDI is the body within the PRC government charged with rooting out corruption and malfeasance among party cadres. D1 had, with the prior consent of D2, used D2’s name and NRIC number in the online report (“the CCDI report”). This was because D1 travelled frequently to the PRC and was concerned for his personal safety. The CCDI report concerned the conduct of P2, its group of related companies, and P4 and P5 generally, but did not contain all the details alleged in the Online Articles. D1 does not have a copy of the CCDI report as it had been submitted online directly through the CCDI website.

In addition, the defendants deny that the Online Articles had been published in Singapore. The defendants’ other denial relates to the plaintiffs’ plea that various statements in Articles 1, 3, 9 and 10 as well as Articles 4, 5, 7, 8, 11 and 12 were defamatory of, and had referred to, P3. (Article 2 is not averred to in the pleadings to be defamatory of P3, while Article 6 was no longer accessible at the time of the Statement of Claim (Amendment No. 2) (see [31] below).) Furthermore, the defendants deny that the Online Articles contained statements that meant and/or were understood to bear and/or were capable of bearing the meanings pleaded by the plaintiffs, or any defamatory meaning.

The defendants plead that if and in so far as the statements in the Online Articles meant and/or were understood to bear the meanings pleaded by the plaintiffs, they were true in substance and in fact. In this regard, relying on the defence of justification, the defendants plead that P4 and P5 had deliberately and systematically misappropriated the state-owned assets of P2 through various complicated schemes and a web of companies including: (a) P1 and P2; (b) Shandong Haiwei Real Estate Co., Ltd. (“Shandong Haiwei”) and Shanghai Heliyuan Investment Co., Ltd. (“Shanghai Heliyuan”); and (c) Guoqing Holdings Group Co., Ltd. (“Guoqing”).

As for the News Articles, the defendants deny that they had jointly or severally sent the News Articles to UOB Bank or OCBC Bank, or had procured a third party to do so. They plead that the contents of the News Articles are not similar to the Online Articles published in the name of D2.

Finally, the defendants deny that there was any conspiracy as pleaded by the plaintiffs.

The parties’ agreement

Following the close of the trial, parties reached an agreement on a number of points concerning the Online Articles and the News Articles.

With regard to the Online Articles, the plaintiffs and defendants agreed that they shall be grouped into the following three categories, and that the contents and meaning of the articles within each category shall be deemed to be the same:

Category

Articles

A

Articles 1, 3, 9 and 10

(with Article 1 being the representative article)

B

Article 2

C

Articles 4, 5, 7, 8, 11 and 12

(with Article 4 being the representative article)

So as not to unduly lengthen this judgment, I have annexed the substantive portions of the plaintiffs’ English translation of Articles 1, 2 and 4 as Annex A to this judgment. I note that Article 6 was not within the scope of the parties’ agreement, and this was probably because Article 6 was no longer accessible and its precise contents could not be retrieved. Indeed, there is no substantive content to Article 6 in the parties’ Agreed Bundle. There is only a message that states “Sorry, this topic does not exist or has been removed or is being assessed”. I also note that the plaintiffs’ claim concerning Article 6 is based on an extract of Article 6 which remains visible from a Google search and which appears to be replicated from Article 2.

As regards the News Articles, the plaintiffs and defendants agreed that they shall be deemed to bear the same meaning as the articles in Categories A and C.

In addition, the plaintiffs and defendants also agreed on the following:

(a) that the Online Articles and the News Articles shall be deemed to refer to P1 and P2; and

(b) that the Online Articles and the News Articles shall be deemed to refer to, and be defamatory of, P4 and P5.

The defendants in their closing submissions argue that the concession in (b) applies to only some but not every defamatory meaning pleaded by the plaintiffs. As I see it, this reservation does not assist the defendants.

Law of defamation: relevant principles

There are three requirements that the plaintiffs have to prove to establish the defendants’ liability for defamation: (a) the defendants must have published the material to a third party; (b) the material must refer to the plaintiffs; and (c) the material must be defamatory of the plaintiffs (Gary Chan Kok Yew, The Law of Torts in Singapore (Academy Publishing, 2nd Ed, 2016) (“Gary Chan”) at para 12.010; Gatley on Libel and Slander (Alastair Mullis & Richard Parkes eds) (Sweet & Maxwell, 12th Ed, 2013) (“Gatley”) at para 6.1). If all the three requirements are proved to the requisite standard of proof (ie, the balance of probabilities), the defendants may then raise one or more defences, including the defence of justification, to defeat the plaintiffs’ prima facie cause of action in defamation (Gary Chan at para 13.001).

The main issue with the Online Articles as well as the News Articles in the present case is the publication element in the law of defamation. Generally, in order to prove that the defendant published the offending material, the plaintiff must establish that the defendant has, by any act, conveyed or communicated the material to at least one other person who has received it. As can be seen from the legal meaning here, publication for the purposes of the law of defamation is bilateral in nature. In Golden Season Pte Ltd and others v Kairos Singapore Holdings Pte Ltd and another [2015] 2 SLR 751, the High Court cited (at [54]) Dow Jones & Company Inc v Gutnick (2002) 201 CLR 575 (“Gutnick”) (at [26]) for the proposition that publication is a bilateral act. Therefore, publication has two components: (a) an act that makes the defamatory material available to a third party in a comprehensible form (“the first component”); and (b) the receipt of the information by a third party in such a way that it is understood (“the second component”) (Wayne Crookes and West Coast Title Search Ltd. v Jon Newton [2011] 3 SCR 269 at [55]). As the plaintiffs have brought the present suit in Singapore, it is also necessary for the publication to have occurred within Singapore (Doris Chia & Rueben Mathiavaranam, Evans on Defamation in Singapore and Malaysia (LexisNexis, 3rd Ed, 2008) (“Evans”) at p 59).

To satisfy the requirements of the first component of publication in the context of Internet defamation, the plaintiff must establish, on the balance of probabilities, that the defendant as the Internet user had uploaded or posted the material on the Internet. In this sense, by uploading or posting the material on the Internet, the defendant had made the offending material available to a third party. This is the first component of publication.

However, uploading or posting the material on the Internet alone is not publication for the purpose of the law of defamation. As observed in Collins (at para 5.04):

This leads me to the second component of publication, which requires the plaintiff to establish, on the balance of probabilities, that a third party reader downloaded the material in Singapore. As noted in Collins (at para 5.05):

In Ng Koo Kay Benedict and another v Zim Integrated Shipping Services Ltd [2010] 2 SLR 860 (“Benedict Ng”), the High Court cited (at [26]) two cases – one from Australia and the other from England – on Internet publication for the purpose of defamation law. The cases are Gutnick and Godfrey v Demon Internet Ltd [2001] QB 201. As explained by Gleeson CJ, McHugh, Gummow and Hayne JJ in Gutnick (at [44]):

In Al Amoudi v Brisard and another [2007] 1 WLR 113 (cited with approval in Benedict Ng at [27] and Zhu Yong Zhen v AIA Singapore Pte Ltd and another [2013] 2 SLR 478 at [44]), the English High Court held (at [32]–[37]) that following the general rule of publication, there was no presumption of law that there had been substantial publication and the plaintiff bore the burden of proving that the material in question had been accessed and downloaded.

To summarise, publication on the Internet can be proved either directly or indirectly. There is no presumption of law that material appearing on the Internet has been published, and it is therefore insufficient for a plaintiff to simply allege that the defamatory material was posted on the Internet and was accessible in Singapore. The second component of the element of publication has to be satisfied.

The News Articles

I propose to first deal with the News Articles as this is a discrete point that can be disposed of fairly quickly. The plaintiffs’ claim as regards the News Articles does not pertain to the publication of the News Articles per se, since these were published in Taiwan. Rather, the plaintiffs’ claim appears to be that it was D1 and/or D2 who had republished the News Articles by having couriered them to UOB Bank and OCBC Bank. In their closing submissions, the plaintiffs also refer to the News Articles having been sent to the Bank of China and one Xu Zhengpeng’s evidence to this effect. But this allegation is not pleaded in the Statement of Claim (Amendment No. 2) and, for this reason alone, I do not have to consider it.

Generally, liability for defamation may arise when the defendant deliberately draws the attention of others to an existing libel (Gatley at para 6.12). Thus, to succeed in their claim, the plaintiffs have to show that the defendants are responsible for drawing the attention of UOB Bank and OCBC Bank to the News Articles. No evidence has been adduced as to how the News Articles got to OCBC Bank. There is only one courier slip before this court. The plaintiffs argue that the courier slip in question is evidence of publication to UOB Bank. They claim that: (a) the News Articles were sent to UOB Bank in Singapore on or about 23 December 2013; and (b) the courier slip was marked for the attention of one Mr Willie Cheng, a member of UOB Bank’s senior management. The plaintiffs rely on Gatley (at para 6.22) for the proposition that evidence that a libellous letter was sent through post constitutes prima facie evidence of publication to the person the letter was addressed to.

In my view, this proposition does not assist the plaintiffs on the facts of this case. The proposition being relied upon by the plaintiffs is related to the second component of publication, namely, that a third party received and understood the defamatory information. More to the point, the plaintiffs have to prove that the defendants were the ones responsible for engaging the courier to despatch the News Articles to UOB Bank and OCBC Bank. In this regard, there is little or no direct evidence to support the element of publication of the News Articles to UOB Bank and OCBC Bank, and I so find.

I now turn to what purports to be circumstantial evidence relied upon by the plaintiffs. In the plaintiffs’ Statement of Claim (Amendment No. 2), it stated that it was probable that the News Articles were sent by D1 and/or D2 jointly or severally, or that either or both the defendants had procured a third party to send the News Articles to UOB Bank and OCBC Bank, given:

(a) the fact that the content of the News Articles was similar to the Online Articles published in the name of D2;

(b) the proximity of dates between the sending of the News Articles with the issue of a court notice to the local authorities in the PRC, the publication of the Online Articles and an encounter with D2 on 17 December 2013; and

(c) the use of fictitious contact details in the courier slip in relation to the News Articles sent to UOB Bank, which shows that the sender(s) had an ulterior motive in disguising their true identity.

The matters outlined in (a) to (c) are assertions or arguments, unless there are facts in evidence upon which an inference of publication by the defendants can be drawn. In other words, it will not suffice to merely plead the matters in (a) to (c) as they would be no more than bare assertions. There must be some evidence to support the matters in (a) to (c) and from which an inference can be drawn in relation to the element of publication by the defendants. With regard to (a), it is noteworthy that the plaintiffs’ claim concerning the News Articles is not about the defendants’ involvement in the publication of the News Articles per se. Without this “link”, the association that the plaintiffs seek to derive from the alleged similarities between the News Articles and Online Articles, in order to infer that the defendants are responsible for sending the News Articles to UOB Bank and OCBC Bank, is somewhat tenuous. As regards (b), the reference to the “court notice” in the pleadings is not clear; it does not give particulars of the court notice in question. Moreover, whether the Affidavits of Evidence-in-Chief (“AEICs”) filed by P4 and Xu Bin respectively support this averment is unclear as they do not identify the particular court notice averred to in the Statement of Claim (Amendment No. 2). References in the affidavits to various court notices add to the difficulty. Equally, the encounter with D2 on 17 December 2013 (which is elaborated on below) adds nothing to the alleged “proximity” of date argument. The date of the encounter is a neutral factor; it happened to be the date chosen by the plaintiffs’ representatives to visit D2. As for (c), I have already commented on the limited evidential value of the courier slip vis-à-vis the element of publication in the law of defamation. On a separate point, I note on the courier slip the sender’s name as “Li Li”, with the telephone number “13225969406” and the address “No. 6 Mei Ling Road Qing Dao”. Fictitious or otherwise, this goes nowhere in suggesting that it was the defendants who are responsible for sending the News Articles to UOB Bank.

Online Articles

I will now deal with the claim in respect of the Online Articles. I have already covered the three legal requirements that the plaintiffs have to prove to establish liability for defamation (see [34]–[41] above). The main issue in dispute is the element of publication in the law of defamation.

Relevant principles on corporate plaintiff

Before proceeding further, however, a preliminary point should be dealt with. This concerns the fact that P1, P2 and P3 are corporations and not natural persons. In this regard, the defendants referred to Jameel (Mohammed) and another v Wall Street Journal Europe Sprl [2007] 1 AC 359 (“Wall Street Journal”) and Atlantis World Group of Companies NV and another v Gruppo Editoriale L’Espresso SPA [2008] EWHC 1323 (QB) (“Atlantis”) for the proposition that a corporation must prove that it had a reputation in the jurisdiction at the time of publication as a prerequisite for pursuing a libel claim.

The defendants accept that there is sufficient evidence that P2 and P3 had the requisite reputation in Singapore, but contend that P1 has failed to prove that it had any reputation in Singapore at the material time (which, in my view, clearly refers to the time of publication). On the other hand, the plaintiffs plead that P1 is the sole shareholder of Welltech Construction Pte Ltd (“Welltech”), a construction company in Singapore. As the holding company of a Singaporean subsidiary, P1 would admittedly have had some indirect connection to this jurisdiction. However, no authority has been cited by the plaintiffs to support the proposition that a connection to this jurisdiction via a wholly-owned Singaporean subsidiary is probative of the existence of a trading or business reputation in Singapore.

It is trite that a corporate plaintiff in defamation actions cannot be injured in its feelings, and that it can only be “injured in its pocket” (Basil Anthony Herman v Premier Security Co-operative Ltd and others [2010] 3 SLR 110 at [65]; ATU and others v ATY [2015] 4 SLR 1159 at [28], both citing Rubber Improvement Ltd. and Another v Daily Telegraph Ltd. [1964] AC 234 at 262). Unlike individuals, a corporate plaintiff is not presumed to have a reputation; it must prove that it has a reputation that is capable of being injured by the alleged libel.

Thus, when it comes to damages, there is a threshold question of whether the corporate plaintiff had a trading or business reputation within the jurisdiction, at the material time of the alleged publication, to entitle it to an award of damages for libel (Wall Street Journal at [93]–[96]; Atlantis at [42]–[50]). This threshold question is a question of fact to be established by evidence (Atlantis at [49]).

Gatley’s comments (at para 8.16) on the right of trading corporations to sue in defamation actions are instructive:

As pleaded, P1’s connection with Singapore is through its wholly-owned subsidiary, Welltech. As the parent company of a Singaporean subsidiary, would P1 have the requisite trading or business reputation in this jurisdiction to entitle it to an award of damages? From a survey of the case law on this issue, it would seem that this highly depends on the specific facts and circumstances in each case. However it seems that, prima facie, being a parent company of a subsidiary in the relevant jurisdiction would not, in itself, give rise to the requisite reputation to pass the threshold requirement.

In Atlantis, the first plaintiff was a Netherlands Antilles company which brought a libel action with reference to an article published and circulated in England and Wales which was alleged to refer to it. The first plaintiff’s claim was dismissed as it had failed to show on the evidence that it had a trading or business reputation in the country at the date of publication. Sir Charles Grey held (at [49]) that it was not fatal to the first plaintiff’s claim that it did not trade and had never traded in the jurisdiction. However, it had to be shown that the first plaintiff had a trading or business reputation in the country at the date of publication. Based on the evidence led, the connection with the jurisdiction was “non-existent or at least exceedingly tenuous”. No actual or intended clients or investors or competitors were called to give such evidence.

Similarly, a corporate plaintiff’s claim was dismissed in Multigroup Bulgaria Holding AD v Oxford Analytica Ltd [2001] EMLR 28 (“Multigroup”) on the basis that it had failed to show a pre-existing reputation within the jurisdiction. The plaintiff was a Bulgarian company which brought proceedings for libel in respect of two briefs published by the first defendant that contained various allegations of corruption on the part of the plaintiff’s subsidiaries with presence in capitals like London, Paris, New York and Zurich. The Bulgarian company was an intermediate holding company in the Multigroup conglomerate. Eady J dismissed the action on the basis that the plaintiff did not have the requisite reputation in the relevant four jurisdictions. He referred (at [28]) to Lord Keith’s holding in Derbyshire County Council v Times Newspapers Ltd. and Others [1993] AC 534 (at 547) that “a trading corporation is entitled to sue in respect of defamatory matters which can be seen as having a tendency to damage it in the way of its business” [emphasis added]. It was held in Multigroup (at [34]) that a mere holding company cannot recover in respect of allegations about how subsidiaries conduct their businesses. The highly factual nature of the inquiry was highlighted (at [37]) when it was noted that no particular evidence had been adduced to demonstrate that any one person within the four jurisdictions would have known of the plaintiff’s existence as one of the intermediate holding companies within the Multigroup conglomerate. Without further evidence of readers of the publication drawing any links between the conglomerate and the subsidiaries, any “inferential reference or damage” to the holding company because of “ostensible injury” to a subsidiary’s reputation was also rejected (at [38]). More importantly, it was noted that there was no evidence adduced to link the holding company’s activities to any of the jurisdictions in issue. Factually, the subsidiaries of the Bulgarian holding company had “distinct names and trading identities which reflect[ed] their different commercial activities” (at [40]). This was contrasted with the facts in the case of Helen Marie Steel and David Morris v McDonald’s Corporation and McDonald’s Restaurants Ltd (unreported, EWCA, Pill and May LJJ and Keene J, 31 March 1999) (“McDonald’s”).

In McDonald’s, a case referred to by the defendants, a United States (“US”) parent company was able to prove a reputation in England where business was carried out through a local subsidiary under the McDonald’s brand. Both the American ultimate holding company, McDonald’s Corporation, and the local subsidiary, McDonald’s Restaurants Ltd, had brought libel claims in respect of a six-page leaflet referring to “McDonald’s” which was circulated in England. The English Court of Appeal held that a foreign parent company and its subsidiary may each have a distinct reputation and a distinct goodwill within a jurisdiction in which the subsidiary carries on day-to-day business. As McDonald’s was generally a well-known name, the use of and reference to “McDonald’s” in the English jurisdiction was held by the court to “import to the ordinary reader both the [US] corporation and (if they are different) whatever company runs the local restaurants”. Thus, both the US parent company and the local subsidiary were held to have related but distinct reputations in the jurisdiction.

However, in the New South Wales Supreme Court case of Palace Films Pty Ltd v Fairfax Media Publications Pty Ltd [2012] NSWSC 1136 (“Palace”), a local shelf company, despite sharing the name of a business conducted by another company within the same corporate group, was held to be unable to bring a defamation suit to protect the business interest of the other company. Thus, Palace underscores the legal proposition that the reputations of different companies are distinct, even when the companies sharing the same trading names are within the same corporate group in the same jurisdiction. Thus, Gatley makes the point (at note 82 to para 8.16) that:

In a similar vein, the authors of Brian Neill et al, Duncan and Neill on Defamation (LexisNexis, 3rd Ed, 2009) express the same proposition (at para 10.02):

Clearly, the inquiry in establishing the requisite reputation in the local jurisdiction is highly factual and has to be proven with evidence by the foreign corporate plaintiff on a balance of probabilities. From the survey of the cases above, the following non-exhaustive considerations would seem to be relevant as evidence of such requisite reputation:

(a) the evidence of actual or intended clients, investors or competitors (Atlantis at [49]);

(b) knowledge of the existence of the foreign corporate plaintiff in the jurisdiction (Multigroup at [37]);

(c) presence of international brand recognition in the jurisdiction (McDonald’s);

(d) similarity of commercial activity and trading identity with related company in the jurisdiction (Multigroup at [40], cf McDonald’s and Palace at [36]–[37]); and

(e) the extent of management role by the foreign corporate plaintiff in the related company in the jurisdiction, as opposed to merely owning shares in them, for the alleged publication to be able to have damaged the plaintiff in the eyes of investors in the jurisdiction (Multigroup at [31]–[32]).

Thus, P1 has to prove in other ways that it had a pre-existing trading or business reputation in Singapore at the time of the publication. McDonald’s is distinguishable on the facts. In the present case, there is no common brand name to speak of. P1 is a construction company in Qingdao, PRC, and it has not persuaded this court that it has an international reputation. Although P1 and Welltech are in the same industry, Welltech does not use the “Qingdao Bohai” trading name and identity. P1 and Welltech, as separate legal entitles, have distinct and separate reputations. For P1 to have a reputation within the jurisdiction through Welltech, more than this tenuous connection would have to be established on a balance of probabilities. In short, P1 is unable to show that it had a trading or business reputation within the jurisdiction at the time of publication and its claim against the defendants fails on this basis.

Issue of publication: Did the defendants publish the Online Articles?

I now come to the main issue in dispute. The defendants deny publishing the Online Articles. On the other hand, the plaintiffs’ contention, as I understand it, is that the defendants published or caused to be published, on the Internet and to a substantial number of readers in this jurisdiction, the Online Articles. The reference to “substantial” is taken to mean a sufficient number to justify judgment for damages. It is understood that this formulation is adopted to counter the defendants’ argument that this is a suitable case for the claim to be classified as one of nominal publication, and which should be dismissed in accordance with the Jameel doctrine.

In the case of Internet defamation, the plaintiffs bear the burden of proving that the Online Articles were uploaded or posted by the defendants (ie, the first component of the element of publication) and that the Online Articles were accessed and downloaded by third party readers in Singapore (ie, the second component of the element of publication). It is well known that some facts are capable of direct proof, whereas others may be properly proved by inference from circumstantial evidence.

Moore’s expert report

Before proceeding further, I set out a summary of the key points in Moore’s report dated 24 July 2015. In this report, Moore provided his expert opinion on, inter alia, whether it could be established that the defendants were the authors of the Online Articles and whether it could be established that the defendants were the persons who posted the Online Articles on the Internet. I note that Moore’s definition of “Online Articles” refers to more than just Articles 1 to 12. To the extent that his definition includes Articles 1 to 12, however, this difference in definition is largely inconsequential. I also note that Moore’s report had stated that Articles 1 to 12 were made up of 24 website links or URLs, when there were only 22 of these set out in the Statement of Claim (Amendment No. 2). Once again, however, as these 24 website links or URLs included the 22 which were pleaded, this is largely of little significance.

The Online Articles were hosted on 19 domains or websites. Of these, four were blogs, 11 were forums, one was a website and three were categorised as “unknown” as they were not accessible. A user account was required to post a message on a forum or a blog. Moore had attempted to create user accounts on the forums and blogs, and had managed to do so on eight of the 11 forums and one of the four blogs.

For the forums, the mandatory fields during the user account creation process comprised a username (which did not have to be a real name), a password, an e-mail address (which generally had to be real) and a verification code. Some forums also required other additional information. As for the blog for which Moore had managed to create a user account, this required a registered account in order to comment on a post/article. A PRC mobile phone number was required to complete registration. For international users, an e-mail address was required for registration. Other blogs did not have a comment function and did not have a user registration page.

An important part of Moore’s report relates to the anonymity of the Internet user, and it reads as follows:

Moore concluded that the plaintiffs’ allegations that the defendants authored and/or posted the Online Articles on the Internet cannot be established. In particular:

(a) The forums, blogs and websites containing the Online Articles were hosted in China, Hong Kong and the United States. The creation of a user account was required to post an Online Article on each forum and blog.

(b) Potentially, any Internet user could set up a user account on each of the forums and blogs.

(c) The user account creation process did not require confirmation of a user’s identity.

(d) The user accounts identified as having published the Online Articles were created by unknown individual(s), and therefore the author(s) of the Online Articles were unknown.

(e) The sign-offs found in some of the Online Articles, which state the name, NRIC number and alleged e-mail address of D2, do not necessarily identify D2 as having authored and/or posted the said Online Articles (see [100] below).

(f) Further electronic evidence was needed to trace the source and determine the authorship of the Online Articles.

(g) To date, the plaintiffs had not provided any electronic evidence to demonstrate that the defendants were the authors or source of the Online Articles.

Aside from the above, there are also other sections in Moore’s report which are relevant to the present case. I will refer to these at the appropriate junctures in this judgment.

The first component of publication

It is not disputed that the plaintiffs have not adduced any electronic evidence to establish that the defendants were the publishers who had posted or caused to be posted on the Internet the Online Articles so as to make the Online Articles available to a third party in a comprehensible form. The cogency of electronic evidence in identifying the Internet user who posted the offending material can be gleaned from the cases dealing with the kind of evidence required to establish the responsibility of the defendant.

In Takenaka (UK) Ltd and another v Frankl (unreported, EWHC (QB), Alliott J, 11 October 2000) (“Takenaka”), the issue before the court was whether the plaintiffs had proved that the defendant was the real author and publisher of defamatory e-mails sent over the pseudonymous signature “Christina Realtor”. In finding against the defendant, Alliott J relied on the reports of an expert who had conducted a forensic examination and analysis of the laptop computer which the e-mails were traced to. This examination and analysis revealed evidence of the laptop computer’s use during the relevant period, and the expert concluded that, on the balance of probabilities, the defendant was the perpetrator. Indeed, the balance of probabilities had “been reached and exceeded by the evidence recovered from the laptop computer”.

In Vaquero Energy Ltd. v Weir [2006] 5 WWR 176 (“Vaquero”), defamatory messages were posted in a chat room, first by “napo9” and, subsequently, by “alec6”. The IP addresses for both napo9 and alec6 had undergone change, but the later IP address for alec6 was traced to the defendant’s laptop computer. The other IP addresses were traced to a router which hosted several companies, one of which was a company which the defendant shared office space with. Kent J found that all of the postings were done by the defendant: there was no doubt that most of the alec6 postings had come from the defendant’s computer and it was clear that those were of the same type and style of the napo9 postings (at [13]).

In Applause Store Productions Ltd and another v Raphael [2008] EWHC 1781 (QB) (“Applause Store”), the plaintiffs were one Mathew Firsht and his company, Applause Store Productions Ltd. On 19 June 2007, a Facebook profile was created in the name of Mathew Firsht. On the next day, a Facebook group called “Has Mathew Firsht lied to you?” was set up. The bulk of the defamatory material was contained in the group. Neither the profile nor the group was set up by Mathew Firsht. Both were set up using a computer with the defendant’s IP address. Only two computers could have used this IP address: the defendant’s desktop computer, and his girlfriend’s laptop computer, which he had often used. The issue before the court was whether the defendant was responsible for putting up the false profile and for creating the group. In finding that the defendant was responsible for the creation of the Facebook material, the court relied on, inter alia, an activity log for the defendant’s IP address, which appeared to show a sequence of activity using the Facebook user identities of the defendant, his girlfriend and “M Firsht”. The defendant’s claim that the deed was done by one or more of the strangers who were at his flat at the relevant time was rejected.

Finally, in Warman v Grosvenor (2008) 92 OR (3d) 663 (“Warman”), the plaintiff sought to stop the defendant’s two-year “campaign of terror” against him, achieved through postings on the Internet and personal e-mails. As the defendant had failed to file a Defence, he was noted in default under the relevant civil procedure rules, and this meant that he was deemed to have admitted the truth of all allegations of fact made in the Statement of Claim. Notwithstanding this, Ratushny J had some “initial concerns as to the reliability of the plaintiff’s identification of the defendant as the author of the postings and the e-mails” (at [12]). Nonetheless, he was satisfied on the evidence that the plaintiff had proved the defendant to be the author of the postings and the e-mails (at [13]), noting (at [14]) as follows:

As can be observed, in three of the above cases, the defendant’s identity was established through the use of electronic evidence: Takenaka (forensic examination and analysis); Vaquero (IP addresses); and Applause Store (activity log for defendant’s IP address). That said, this does not mean that electronic evidence is the only means by which the responsibility of a defendant for material appearing on the Internet can be established. Indeed, electronic evidence was not relied on in Warman. However, as Alliott J cautioned in Takenaka, cogent evidence is needed to meet the requisite standard of proof in order to discharge the burden of proof. Typically, the use of electronic evidence to link a defendant to any particular material appearing on the Internet would be the most obvious way to achieve this requirement of cogency, since such evidence is objective in nature. If a plaintiff chooses to rely on other evidence, then he must ensure that such evidence is similarly cogent. In this regard, I note that the evidence in Warman pointed almost inexorably to the conclusion that the defendant was the perpetrator.

In his report, Moore helpfully set out the non-exhaustive steps that might have been taken to confirm the author and first publisher of the Online Articles:

As stated, the plaintiffs did not employ any of the steps outlined above to obtain the relevant electronic records in this case. Instead, they have decided to rely on D2’s alleged admission and circumstantial evidence. The issue is whether the alleged admission and circumstantial evidence (either individually or collectively) achieve the cogency mentioned by Alliott J in Takenaka. In my view, they do not, and I so find. Putting it another way, the “balance of probabilities” test applies and the plaintiffs have not, in my judgment, satisfied the test. Let me elaborate.

(1) D2’s alleged admission

The plaintiffs argue that D2 had admitted to posting the Online Articles on the Internet, and that he had made the admission on 17 December 2013 to two of the plaintiffs’ representatives, one of whom was Xu Bin. It is not in dispute that the conversation was videoed and audio-recorded (without D2’s knowledge). The following excerpt from the plaintiffs’ English translated transcript is set out in the Statement of Claim (Amendment No. 2). I have added italics and bold to the parts of the excerpt which, at first blush, suggest D2’s admission to the posting:

The defendants’ case apropos the alleged admission to the posting is that it was at best a misunderstanding. The material posted on the Internet was never expressly nor clearly identified and the important differences among: (a) the plaintiffs’ translated transcript (above); (b) the defendants’ translated video transcript; and (c) the defendants’ audio transcript indicate that the court cannot be certain about what was being referred to. D2 had believed that he was being asked about the CCDI report, and not the Online Articles.

I make two broad points in general. First, the inquiry into what transpired begins with an appreciation of the setting in which the conversation between D2 and the plaintiffs’ representatives took place. It was an unannounced visit to the coffee shop where D2 worked as a coffee shop attendant; it was not a meeting conducted in the context of an attempt to openly discuss or resolve a defamation dispute which both sides were fully aware of. No defamation dispute had arisen or been declared prior to 17 December 2013. It was only after the encounter on 17 December 2013 that the pre-litigation demand letters and Writ of Summons were issued. All in all, the context in which the conversation was recorded and all other surrounding circumstances would have an important bearing on the reliability of what has been characterised as D2’s admission that the Online Articles were posted on the Internet by D1 and D2. One consideration here appears to be whether or not the admission was ambiguous (Jeffrey Pinsler, Evidence and the Litigation Process (LexisNexis, 5th Ed, 2015) (“Pinsler”) at para 5.097).

Second, the inquiry is whether the alleged admission is admissible in evidence under the Evidence Act (Cap 97, 1997 Rev Ed) (“EA”). Admissions are statements (oral or documentary) which suggest any inference about any fact in issue or relevant fact, and which are made by persons under certain circumstances (s 17(1) of the EA). These circumstances are mentioned in ss 18 to 20 of the EA. An admission may be proved as against the person who made them or his representative in interest (s 21 of the EA).

For convenience, I now set out the relevant portions of ss 17, 18 and 21 of the EA:

Admissions are not conclusive proof although estoppels may be raised (s 31 of EA). Pinsler (at para 5.100) notes on s 31 that:

Pinsler (at paras 5.097 and 5.098) provides a simple and helpful illustration as to how these provisions work in conjunction with one another. The passage is long, but I set it out in full as it is instructive to the case at hand:

It is clear from Pinsler’s illustration that adverse admissions are relevant facts and are hence admissible in evidence against the maker of the statements (ie, D2) and no one else (such as D1). Pursuant to s 18(1) of the EA, D2’s statements can only be used against D1 if D2 was authorised by D1 to make those statements. In this case, there was neither suggestion nor evidence of this.

I now come to the statements made by D2 that are offered as D2’s admission that D1 and D2 are responsible for posting the Online Articles. The defendants have characterised D2’s responses as a “misunderstanding” in that D2 was thinking that the plaintiffs’ representatives were asking about the CCDI report, and not the Online Articles. Irrespective of the terminology in the transcript, it is fairly clear from reading the excerpt of the transcript set out at [77] above that D2’s statements, which must be taken in their entirety, are ambiguous. This affects the reliability of the statements offered as admissions. Let me elaborate.

D2 was at work in the coffee shop when the plaintiffs’ representatives came. I gather from Mr Lee that in “large parts” of the video recording, D2 was seen walking away from the plaintiffs’ representatives to attend to “other things”, and that there was no conversation during these moments. In this context, D2’s conversation with the plaintiffs’ representatives was not a continuous dialogue as it was interrupted intermittently. For convenience, I set out in the table below the statements in italics and bold of the above excerpt and the immediate circumstances in which these statements were made:

Statement

Time in video

Immediate Circumstances

B: ... Is the article on the internet posted by you?

Ng: My cousin and I.

(“Statement 1”)

01:23

D2 had previously left to get what appears to be a name card. He returned at around 01:09. This part of the conversation therefore took place about 14 seconds after his return.

Ng: I just talked with my cousin. He said that you may email him if necessary. He did most of the things and I just have no idea what it is about.

B: But the article has been posted in your name.

Ng: I consented to that.

B: Oh, you consented. It was in your name. So we want to ask you, and we are also concerned that maybe other person used your name without your knowledge.

Ng: I consented to that.

(“Statement 2”)

06:07

D2 had previously walked off while on his handphone. He returned at around 05:42. This part of the conversation therefore took place about 25 seconds after his return.

As stated at [79], the question of whether or not the alleged admission is ambiguous is an important consideration. Admissions must be clear if they are to be used against the person making them (Sudipto Sarkar & V R Manohar, Sarkar’s Law of Evidence in India, Pakistan, Bangladesh, Burma & Ceylon (Wadhwa and Company Nagpur, 16th Ed, 2007) (“Sarkar”) at p 422). In order to constitute an admission in law, the statement should be ex facie unequivocal and categorical and not vague (Sarkar at p 425). Yet, these cannot be said of D2’s alleged admission. I now turn to examine this issue of ambiguity. In my judgment, D2’s alleged admission is ambiguous and is hence unreliable. Accordingly, no weight should be accorded to it.

First, D2’s so-called admission is not clear as to D2’s role in the posting of the “article”. In their closing submissions, the plaintiffs are quick to highlight the following part of D2’s cross-examination:

The plaintiffs’ highlighting of Statement 1 is wholly unsurprising for the simple reason that in Statement 1, D2 had openly stated that he (and D1) had posted the “article”. However, this clarification in the witness box of Statement 1 does not improve the plaintiffs’ position.

Besides Statement 1, the court has to take note of what D2 had subsequently said in Statement 2 and Statement 3. In Statement 2, D2 said that it was D1 who “did most of the things” and that he himself “[had] no idea what it is about”. He said that he had consented to the “article” being posted in his name. I note that this part of Statement 2 is somewhat ambiguous: it is not clear if D2 was saying that his consent was to the article being posted or if he was saying that his consent was to the article being posted in his name. The difference here is one of emphasis and appears fine, but it is nonetheless significant as to its meaning. The later part of Statement 2 clarifies, however, that D2 had meant the latter (ie, that he had consented to the article being posted in his name). In Statement 3, D2 then said that he had read the “article” and roughly knew its contents, but it was D1 who was “personally involved”. In Statement 2 and Statement 3, D2’s responsibility apropos the “article” is much reduced. Indeed, all he could be said to be responsible for was consenting to the “article” being posted in his name.

Simply put, D2’s so-called admission, when read as a whole, is neither clear nor categorical. It is equivocal as to what his role in the posting of the “article” was. Specifically, D2 had at one point (ie, in Statement 1) stated that he had posted the “article” (along with D1), but at other points (ie, in Statement 2 and Statement 3) stated that he had simply consented to the “article” being posted in his name and that it was D1 who presumably did everything else. From this analysis, there is merit in D2’s evidence that in his conversation with the plaintiffs’ representatives, he was thinking about the CCDI report and not the Online Articles.

This leads me to the subject-matter of D2’s so-called admission. In this regard, I agree with the defendants that the subject-matter of the alleged admission was never expressly nor clearly identified. Even by the plaintiffs’ version of the English translated transcript, which I have excerpted above at [77], the “article” is never identified. This raises several matters that do not come with answers. For instance, was the “article” defamatory to begin with? If it was defamatory, was it one of the Online Articles? If it was one of the Online Articles, which one was it? With these questions remaining unanswered, how can the requisite civil standard of proof, vis-à-vis the element of publication in the law of defamation, be satisfied?

To the defendants, the reference to the “article” in the transcripts is not even clear. The defendants have set out the differences in the three versions of the English translated transcripts in a table, and I reproduce the most significant portions below (with emphasis added):

Plaintiffs’ translated transcript

Defendants’ translated video transcript

Defendants’ translated audio transcript

Is the article on the internet posted by you?

That one…the… one sent online, did you send it?

…. some pieces posted on the internet, did you post them?

But the article has been posted in your name.

Your name was used over the internet?

Then… your name was used on the net….

Did you write that article?

Were the materials written by you?

That… was that material written by you? That material…

This comparison table shows that the subject-matter of the conversation is not free of ambiguity. Additionally, as pointed out by the defendants, the different versions of the English translated transcripts are unclear as to whether the subject-matter was in the singular or plural.

Moreover, the evidence also does not suggest that D2 was shown the Online Articles during this conversation on 17 December 2013. At trial, Xu Bin gave evidence that he had brought along an envelope containing “about two to three articles”, and that he had asked D2 why he had published “the articles”. Xu Bin’s evidence is that he showed D2 “a copy of the article”:

However, there is no mention in Xu Bin’s AEIC of an envelope containing articles that was brought to the coffee shop. Neither is an envelope or articles identifiable in the video recording. In light of all this, the subject-matter of D2’s admission is equivocal.

For these reasons, I find that there is no admission that D1 and D2 had posted the Online Articles on the Internet.

(2) Appearance of D2’s name in some of the Online Articles

The plaintiffs have made it clear in their closing submissions that they are not contending that the mere fact that some of the Online Articles cited D2 as author and set out his personal and contact details is conclusive proof that the defendants published the Online Articles. However, they are relying on this fact to trace, by inference, the Online Articles to the defendants.

Specifically, the plaintiffs rely on the fact that many of the Online Articles were attributed to D2 by way of “sign-offs” at the end of the Online Articles. By way of an example, Article 1 ended as follows:

Similar attributions are also found in Articles 2, 3, 4, 7, 9, 10, 11 and 12.

Moore’s evidence, which I accept, is that these “sign-offs” were typed in and are part of the text of the Online Articles and that, accordingly, they could have been typed in by someone else and do not establish that D2 had authored and/or posted the Online Articles. Whilst the plaintiffs acknowledge that this attribution is not conclusive proof that the defendants published the Online Articles, I do not accept that the “sign-offs” in D2’s name provide a reasonable basis to draw an inference that the defendants are responsible for posting the Online Articles (ie, the first component of the element of publication).

As explained, there is no electronic evidence to trace the posting of the Online Articles on the Internet to the defendants, and if the defendants were out to harm the plaintiffs’ reputation, it would surely be incongruous and illogical for the defendants to leave a trail by mentioning D2’s name and particulars on the Online Articles. The plaintiffs suggest that there is nothing puzzling with the “sign-off” method as it would help to lend some credibility to the Online Articles if they were not anonymous and an identified person was willing to be named as their author and publisher. This reasoning is untenable: why should credibility be a concern to the author and publisher if, as the plaintiffs say, the articles are defamatory? The first component of publication is not about who is named in the Online Articles; it has to do with finding and identifying the person who posted the Online Articles for the purpose of the law of defamation. As I see it, no proper inference can be drawn from the “sign-offs” appearing on some of the Online Articles.

(3) Motive to publish

I now come to the plaintiffs’ contention that the defendants, in particular D1, had a motive to publish the Online Articles. To support this contention, the plaintiffs highlighted a number of points which can be summarised as follows:

(a) Disputes between the Qingjian Group and the HuanYu Group: The plaintiffs submit that the HuanYu Group was embroiled in a number of legal disputes with the Qingjian Group in the PRC. The HuanYu Group had apparently owed the Qingjian Group a debt of about RMB 560 million. As a result, the Qingjian Group obtained, in 2013, a number of court orders from the PRC courts to freeze the assets of the HuanYu Group, as well as certain compensation sums payable to the HuanYu Group by the local authorities.

(b) D1’s relationship with the HuanYu Group: The plaintiffs submit that D1 had been actively involved in the business operations of the HuanYu Group in the PRC from the 1990s up to the present day. D1 was apparently a director of HuanYu from 1994 to 2004, and has been a director of HuanYu Marina from 1998. Further reliance was placed on: (i) two legal agreements which D1 had purportedly signed on behalf of HuanYu in 2004 and 2012; and (ii) D1’s purported commencement of court proceedings in 2005 to reinstate himself as chairman of HuanYu.

(c) D1’s relationship with Goh: The plaintiffs submit that Goh is the one controlling the business of the HuanYu Group. D1 and Goh “are not just related by blood as uncle and nephew, but have also had longstanding business dealings with each other from about 1994 to 2001”. Although there was some disagreement between D1 and Goh in the 2000s, the parties had since reconciled.

(d) D1’s relationship with one Cai Youcang (“Cai”): The plaintiffs submit that D1 had a long-standing relationship with Cai, a director of HuanYu.

(e) The defendants’ interests in Shin Hwa Cheong: The plaintiffs submit that both defendants have had associations with a company known as Shin Hwa Cheong, which is related to the HuanYu Group. D2 is apparently a shareholder of Shin Hwa Cheong, while D1 was apparently a director of Shin Hwa Cheong in 1995.

(f) The defendants’ admissions on motive: The plaintiffs submit that D1’s motive for wanting to inflict injury is evident from the evidence of both D1 and D2 at trial. D1 had testified that he had told D2 that P4 had “eaten money from Mr Cai’s office”. D2 had testified that D1 had told him that “[P4] and Qingjian were eating the company’s monies and he wanted to lodge a report against them”.

It is necessary to understand the plaintiffs’ contention that the circumstances bear out the defendants’ motive to publish the Online Articles. For this, I refer to the plaintiffs’ closing submissions where it is submitted that:

By the plaintiffs’ submissions, the defendants’ motive to publish the Online Articles had to do with the defendants’ revenge against the Qingjian Group. Proof of revenge is relevant when such an accusation is made. Thus, revenge has to be proved not only from the disputes in the PRC but also from evidence of other facts which make it sufficient to draw the inference of revenge.

I am not persuaded that the matters in [102(a)] to [102(f)] (whether individually or collectively) assist the plaintiffs on the question of whether the defendants had a motive to publish the Online Articles. Where the defendants are said to have revenge in mind, and this revenge is to be proved by inferences, the plaintiffs have to satisfy the civil standard of proof by showing that the inferences which appear from the circumstances outlined in [102(a)] to [102(f)] make revenge in the defendants’ minds at least more probable than not. I find that the “balance of probabilities” test is not satisfied. There is no evidence of revenge or facts in evidence to draw the inference of revenge from.

I will first deal with the matters outlined in [102(f)]. This point is a non-starter. Those so-called admissions were made in the context of the CCDI report, and it simply does not follow from there that D1 had wanted to inflict reputational harm on the plaintiffs.

As for the matters in [102(a)] to [102(e)], the defendants do not deny that D1 had a previous relationship with the HuanYu Group, but they submit that it cannot be concluded that D1 had any sufficient interest or involvement in the HuanYu Group’s litigation with the Qingjian Group. According to D1, his directorships in HuanYu and HuanYu Marina were non-executive in nature and he was not involved in the operation of the businesses in the PRC. At trial, D1 did appear to accept that he had helped out in the affairs of HuanYu for some time in 2004, and on one occasion in 2012, but this, in my view, does not detract from the need to show D1’s interest (whether pecuniary or proprietary) in the outcome of the litigation with the Qingjian Group.

Even though Goh was related to D1, and both had worked together for a long time, it is not really disputed that at the end of 2004, both men had fallen out and were on bad terms. It was only around 2011 that the estranged relationship between D1 and Goh had begun to thaw. Although Mr Quek in closing submissions described D1’s relationship with Goh now as cordial, the former seems to be on better terms with Goh’s wife. In my judgment, D1’s relationship with Goh is not evidence to support the presence of motive to publish the Online Articles.

As for D2, no real submission has been advanced vis-à-vis any motive on his part, except for his supposed interest in Shin Hwa Cheong. Indeed, D2 is a coffee shop attendant and he was unlikely to have either active involvement in the HuanYu Group or interest (whether pecuniary or proprietary) in the outcome of the dispute with the Qingjian Group.

Evidence which shows that the defendants have a revengeful propensity is relevant. However, the fact of the matter is that these disputes, relationships and interests, even if all true, are simply insufficient to reasonably infer that the defendants felt aggrieved and vengeful against the plaintiffs such that they wanted to inflict harm on them. As stated, the plaintiffs’ turn of phrase in their closing submissions is a motive to “inflict revenge against the Qingjian Group and the [plaintiffs]”. There has to be evidence that singles out D1 (or D2) as the perpetrator. Having earlier rejected the evidentiary value of D2’s so-called admission, I find that there is nothing else which can identify D1 (or D2) for this purpose. In this regard, I have already concluded that there is no imputation to be made from the mere mention of D2’s name on some of the Online Articles (see [98]–[101] above).

(4) Other grounds relied on by the plaintiffs

The plaintiffs would be aware that they have to meet the requisite civil standard of proof, and have asked the court to take into consideration other series of facts, namely, the allegedly incredible account as to how D2’s name came to be used to file the CCDI report and the defendants’ reliance on the defence of justification. These facts, so the argument develops, give rise to an inference that the defendants must be the persons responsible for the publication of the Online Articles.

The plaintiffs reject the defendants’ explanation as to how the defendants had come to lodge the CCDI report. The plaintiffs’ first point is that there is no evidence that D1 had been told of any serious or specific wrongdoing on the part of P4, and that there was no premise for his assumption that P4 had earned a modest salary. In this regard, D1’s account is that the impetus for him lodging the CCDI report was a dinner meeting with Cai, his former business associate. D1 describes what Cai had told him in his AEIC as follows:

In my view, while there is no explicit reference to any unlawful act in the above two paragraphs, it is clear that this is what is being suggested. At trial, D1 stated that he believed that these two paragraphs conveyed the meaning that there was misappropriation, and I accept his evidence in this regard. Furthermore, D1 had subsequently in his AEIC referred to the possibility that P2 and P4’s operations in Singapore were linked to “possible unlawful activities back in the PRC”, and it is clear from this that he had thought that P4 was engaged in illegal conduct. As for D1’s assumption that P4 had earned a modest salary, I do not consider this to be so implausible and unreasonable an assumption that it should be disbelieved outright.

The plaintiffs’ second point is that D1’s evidence on the contents of the CCDI report is unsatisfactory. There was no purpose in filing the CCDI report if the contents were as generalised as D1 testified to be so. Notably, however, the CCDI report was lodged close to two years ago, in late 2013, and it is not implausible that D1 is not able to now recollect the details. More importantly, the plaintiffs’ own evidence is that the CCDI had commenced investigations into the allegations made in the Online Articles. This, in my view, verifies and lends credence to the existence and submission of the CCDI report with enough information to warrant an investigation.

The plaintiffs next highlight that if, as he claims, D1 was motivated to lodge the CCDI report out of his sense of patriotism to Singapore and his concern for the protection of the construction industry and the promotion of the public interest in Singapore, he should have then filed a report with the Singapore authorities rather than the CCDI. At trial, D1 explained his decision as follows:

I agree that there is a logical basis for D1’s explanation: if the alleged misappropriation had taken place in the PRC, then the CCDI would be the proper authority that should have been alerted.

The plaintiffs then question the defendants’ reasons for using D2’s name for the CCDI report. They point out that D1 stated in his AEIC that this was because he was concerned not so much about himself but for his wife and extended family in the PRC. However, in the Defence (Amendment No. 1), it is stated that this was because D1 travelled frequently to the PRC and was concerned for his personal safety. I do not, however, consider this discrepancy to be material. The fact is that D1 was concerned over the possible ramifications of the CCDI report, to himself, his wife and her family, and he stated this in no uncertain terms at trial. The plaintiffs also make the point that D2 was also travelling to the PRC, and the implication here seems to be that he should have had the same concerns. Under cross-examination, D2 explained that this was because P4 did not know him. In my view, this is not an incredulous excuse.

Finally, the plaintiffs also raise the argument that the defendants had refused to ask Moore to retrieve a copy of the CCDI report, which is a piece of evidence which could potentially be very favourable to the defendants’ case. In a letter to the court dated 9 March 2016, which was after closing submissions were filed, the defendants’ lawyers wrote to court, highlighting that this request that Moore retrieve a copy of the CCDI report was first made by the plaintiffs’ lawyers in a letter to the defendants’ lawyers dated 26 August 2015, and that the defendants’ lawyers had replied on 2 September 2015. In their reply, the defendants’ lawyers had stated that the defendants were prepared to accede to the plaintiffs’ request on two conditions, one of which related to the payment of Moore’s charges. No reply was forthcoming from the plaintiffs until the middle of the trial on 30 September 2015, when the plaintiffs wrote back to say that they were not agreeable to the conditions. In brief, it is somewhat of a mischaracterisation to say that the defendants had “refused” to ask Moore to retrieve a copy of the CCDI report.

The final ground which the plaintiffs rely on is the defendants’ reliance on the defence of justification. The plaintiffs argue that there is no plausible reason why the defendants would incur time, effort and expense to investigate and prove the truth of defamatory statements that they did not publish. On the other hand, D1 explains the defendants’ reliance on the defence of justification in his AEIC as follows:

I make a few points. First, the plaintiffs’ argument conflates publication, which is an element of liability, with defences to libel, which arise only after a prima facie case of liability is established. Second, the defence of justification is about the truth of the libel and telling the truth has nothing to do with good motive or good faith. In any event, the defendants’ reliance on the defence of justification is a result of the suggestion of their former lawyers.

As a final point, I note that the plaintiffs also appear to suggest that the defendants’ position on the defamatory nature of the Online Articles is inconsistent with their case that they are not responsible for the publication of the Online Articles. This point, however, is not seriously pursued, and rightly so.

(5) Conclusion on the first component of publication

All things analysed and evaluated, I find that the defendants are not responsible for the first component of the element of publication. If anything, the grounds relied on by the plaintiffs, taken collectively, could raise some suspicion that the defendants could have been the ones responsible for the publication of the Online Articles. Notably, however, the civil standard of proof is not satisfied by evidence giving rise to a mere suspicion. With this conclusion, the plaintiffs’ claim in defamation against the defendants fails.

The second component of publication

Although my conclusion concerning the first component of publication is sufficient to dispose of the plaintiffs’ claim in defamation, I will nevertheless proceed to consider, for completeness, the second component of publication. As stated earlier, the plaintiffs cannot simply allege that the Online Articles were posted on the Internet and were accessible in Singapore.

First, for there to be publication in traditional defamation law, the defamatory material must be communicated to a third party reader in a manner that it is comprehensible. In other words, the third party to whom the defamatory material is communicated must be capable of understanding it. As Gatley puts it (at para 6.1):

In Gutnik, the High Court of Australia held (at [26]) that harm to reputation is done when a defamatory publication is comprehended by the reader; until then, no harm is done by it. In most cases, defamatory material is received by a third party using his eyes to read or view it. If the third party cannot understand it (for example, where the defamatory material is written in a foreign language), then that is a separate concern, one that would, on its own, bar a finding of publication.

Second, and as stated earlier, there is no presumption of law that material appearing on the Internet has been published and, as such, the plaintiffs have to prove that the material in question had been accessed and downloaded by a third party reader (see the cases referred to at [40] above).

Third, the tort of defamation is committed where publication takes place and the parties accept that material on the Internet is published at the place where it is downloaded. The parties have also proceeded on the basis that Singapore is the appropriate and convenient forum, and that the governing law of the tort is Singapore law. The location where the material was downloaded and read in this case were the same, and this is to be distinguished from a case where the material on the Internet was downloaded in one jurisdiction and then read later as a computer printout at another time and in another jurisdiction (see, generally, Dan Svantesson, “The ‘place of action’ defence – A model for cross-border Internet defamation” [2003] Australian International Law Journal 172).

Moving on, I will first deal with direct proof of the second component of publication, and then indirect proof. As stated, the standard of proof is still the balance of probabilities.

(1) Direct proof of the second component of publication

The question in the present case is whether at least one person, other than the plaintiffs, had downloaded and accessed the Online Articles in Singapore. In this regard, the plaintiffs rely on the evidence given by five of their witnesses. However, not all of the five witnesses were able to testify to downloading the Online Articles.

First, the plaintiffs rely on the evidence of one Li Guo Dong (“Li”), the Manager of the Human Resource department of P3. Li had joined P3 in February 2015. His evidence is that he was first made aware of various articles published online concerning the plaintiffs in or around November 2013 as he had heard his colleagues talking about them in the office. As a result, Li conducted a search using both of the search terms “Du Bo” and “Qingjian Group” and came across numerous articles concerning the plaintiffs. The contents of these articles were very similar to one another and to Articles 1, 2 and 4. Notably, it is precisely for this reason that I am unable to accept Li’s evidence as direct proof of publication. Li’s evidence is that he had come across articles with contents that were very similar to Articles 1, 2 and 4; it is not his evidence that he had come across Articles 1, 2 and 4, or indeed the rest of the Online Articles, themselves. Under cross-examination, Li was unable to confirm that he had actually seen Article 1 itself, and it would not be unreasonable to suppose that, had he been asked, this would have been his response vis-à-vis Articles 2 and 4 as well.

This is significant. Li’s evidence is being relied on by the plaintiffs as direct proof of publication in Singapore. On first principles, Li must be able to say that he had downloaded, in Singapore, the very articles that are being complained of (viz., the Online Articles). Yet, Li could only say that he had come across articles with contents that were very similar to Articles 1, 2 and 4. Consequently, the inexorable conclusion is that even if I were to accept Li’s evidence in its entirety, the plaintiffs have not shown, on a balance of probabilities, that Li had indeed downloaded the Online Articles (or any of them) in Singapore.

The second witness whose evidence is being relied on for direct proof of publication is one Ouyang Jing (“Ouyang”), the Head of Business Development of P3. Ouyang had joined P3 in 2011. His evidence is that he had first read the defamatory articles published online concerning the plaintiffs in or around November or December 2013. At that time, the Qingjian Group was considering a joint project with Surbana International Consultants Pte Ltd (“Surbana”), and a meeting was held in November 2013 between P4 and the Surbana management, which Ouyang attended. Ouyang had taken the initiative to conduct some due diligence on the meeting’s attendees following the meeting. To this end, he conducted searches online using the terms “Du Bo” and “Qingjian Group” and came across numerous articles concerning the plaintiffs. The articles featured very similar content. In his AEIC, Ouyang exhibited Articles 1, 2 and 4 as “[s]amples of the contents of the articles” which he recalled reading. In this regard, Ouyang’s evidence is similar to Li and, for the same reason, I am not able to accept it as direct proof of publication. To Ouyang, Articles 1, 2 and 4 were merely samples of the contents of the articles he had come across, rather than the articles themselves. In addition, I am also doubtful of the veracity of Ouyang’s account, as there was no valid reason for Ouyang to conduct “due diligence” on his own side in the Surbana negotiations.

The third witness who gave evidence for the plaintiffs on this point is one Xu Zhengpeng, the Vice President of Guotsing Holding (South Pacific) Investment Pte. Ltd.. Xu Zhengpeng’s evidence is that in or about mid-December 2013, when he was in Qingdao, he had heard his friends talking about articles on the Internet which were defamatory of the plaintiffs. One of them had asked him if he knew anything about the articles, and that prompted Xu Zhengpeng to search the Internet for articles on the plaintiffs, first in Qingdao and subsequently when he returned to Singapore. Articles 1, 2 and 4 were among the articles that Xu Zhengpeng had read. I accept this as direct proof of publication of Articles 1, 2 and 4 in Singapore.

The fourth witness being relied on by the plaintiffs in this regard is Xu Bin. Xu Bin’s evidence is that he was informed by P2’s administrative operations department of information concerning articles that were defamatory of the plaintiffs. As a result, between 21 and 22 November 2013, Xu Bin conducted searches on a number of search engines using the search terms “Qingjian”, “Du Bo”, “Bohai” and “Yuan Hongjun” in various combinations. Xu Bin’s searches turned up approximately 15,000 results. Xu Bin accessed the links to some of the search results and subsequently telephoned various website administrators to request that they take down the articles that were hosted by them. He also lodged formal complaints with the Qingdao Municipal Public Security Bureau and the Qingdao Municipal Cultural Law Enforcement Bureau and through the complaints website maintained by the relevant regulatory authorities in the PRC. Despite these measures, various defamatory articles could still be accessed on the World Wide Web in or around December 2013. At this juncture, Xu Bin’s evidence in his AEIC takes a curious turn and he states as follows:

Xu Bin’s evidence is unsatisfactory for two reasons. First, Articles 1 and 6 were already pleaded as being inaccessible in the original Statement of Claim filed on 23 January 2014. Second, it is unclear if Xu Bin himself had accessed the Online Articles, as Xu Bin only refers to the Online Articles being retrieved by the plaintiffs. Be that as it may, and in any event, I am unable to accept Xu Bin’s evidence as direct proof of publication for a more fundamental reason: there is no evidence that Xu Bin, who resides in the PRC, had accessed the Online Articles (if he did access them) in Singapore. Unlike Xu Zhengpeng, who clearly stated that he had accessed Articles 1, 2 and 4 in Singapore, Xu Bin gave no evidence to similar effect and in fact appeared evasive when asked about this during cross-examination:

In their closing submissions, the plaintiffs argue that this is an assumption which is not borne out on the evidence and not put to Xu Bin. But the fact is that the burden of proof lies squarely on the plaintiffs and, in the present instance, this burden is not discharged.

The final witness whose evidence is being relied on is one Wang Yu, the general manager of a company which had business dealings with P3. Wang Yu’s evidence is that sometime in or around early 2014, he was alerted to various articles published online concerning the plaintiffs. Wang Yu took it upon himself to investigate and monitor the allegations as he was in charge of the business relations between his company and the Qingjian Group in Singapore. Wang Yu came across many of such online articles. In his AEIC, he exhibits Articles 1, 2 and 4 as “a small sampling of which extracts of information [he] recall[s]”. The obscure meaning of this phrase was made no clearer during the trial, where Wang Yu repeatedly vacillated on his position concerning whether he had seen Articles 1, 2 and 4 themselves or merely articles with similar content. In these premises, I do not consider it more probable than not that Wang Yu had seen Articles 1, 2 and 4 themselves. In so far as he could equally have merely seen articles with similar content, his evidence is not direct proof of publication for the reasons already stated above.

To summarise, the only witness whose evidence I accept as direct proof of publication is that of Xu Zhengpeng, and this is only in relation to Articles 1, 2 and 4. This is a convenient juncture to flag out the defendants’ argument that this is a suitable case to classify the claim as one of nominal publication, and which should therefore be dismissed in accordance with the Jameel doctrine. Generally, publication to one person will suffice though the scale of the publication will affect the damages. However, Jameel has applied the abuse of process principle as a gloss on, or an exception to, this rule. I will return to the Jameel doctrine below at [144]−[149].

(2) Indirect proof of the second component of publication

The plaintiffs argue that publication of the Online Articles in Singapore can be inferred on account of: (a) their accessibility on the Internet; and (b) the results of using search terms on search engines. Again, the starting point in relation to the accessibility of the Online Articles on the Internet is that there is no presumption of law that material appearing on the Internet has been published, and it is therefore insufficient for a plaintiff to simply allege that the defamatory material was posted on the Internet and was accessible in Singapore by a substantial number of third party readers. There must be some facts in evidence to support an inference of publication in Singapore to a substantial number of third party readers.

First, there is no evidence that the Online Articles were found on websites which were frequented by Singapore-based Internet users. Xu Bin’s evidence is that in or around December 2013, Article 2 had been read by 627 viewers, Article 8 by 363 viewers, Article 9 by 894 viewers and Article 11 by 256 viewers. Moore in his report stated that including repeat readers, Article 3 was read 5121 times, while Article 7 was read 306 times. These figures, however, do not indicate the number of viewers or readers from Singapore. But what is clear, in my view, is that these figures are insignificant in the grand scheme of the things that is the Internet, which would, presumably, have millions, if not billions, of users worldwide. Flowing from this, I agree with the defendants that the low number of viewers or readers renders it unlikely that any significant number of visits were from Singapore-based Internet users. This is all the more so when one considers the fact that none of the domains hosting the Online Articles were located in Singapore, suggesting that the websites were not even intended for a Singapore-based audience. In Benedict Ng, Lai Siu Chiu J noted (at [31]) that there was no evidence as to the number of Singapore-based subscribers for one of the websites in question (which was designed for Singapore and Malaysia subscribers) and its general viewership. On that basis, Lai J did not think it would be safe to draw an inference of publication in Singapore, as it would be “tantamount to recognising a rebuttable presumption of publication”. Given that the websites where the Online Articles were found were unlikely to have been designed for Singapore-based Internet users, Lai J’s reasoning applies a fortiori in the present case.

As regards the other ground relied on by the plaintiffs, ie, the results of using search terms on search engines, two cases are relied upon by the plaintiffs. In Steinberg v Englefield and another [2005] EWCA Civ 288 (“Steinberg”), Sedley LJ, with whom Longmore and Ward LJJ agreed, found (at [21]) the inference of substantial publication of a defamatory letter to be irresistible, given that it was accessible to anyone who fed the plaintiff’s name into a standard search engine and was also readable by anyone who accessed the defendant’s own professional website. In Gregg v O’Gara [2008] EWHC 658 (QB) (“Gregg”), King J, in an application for summary judgment, considered (at [52]) that any jury would draw the irresistible inference that the two defamatory articles in question, which had been posted online, had been widely published within the jurisdiction. King J relied on the fact that the defendant’s website containing the defamatory material was immediately accessible to anyone who fed the words “Yorkshire Ripper” into a standard search engine. He also highlighted that the Yorkshire Ripper was a topic of continuing interest to members of the public and that the plaintiff himself had been contacted by various people who had become aware of the defamatory allegations.

In my view, however, these cases do not assist the plaintiffs. As pleaded by the plaintiffs, the Online Articles were all located by entering a combination of search terms into search engines. This is with the possible exception of Article 1, for which it is not clear how the plaintiffs had located it. In this regard, Li’s evidence is that he had “found no relevant information” (much less the Online Articles) when he used the search term “Du Bo” on its own. Similarly, Ouyang agreed that if he simply used the search term “Du Bo” on its own, he probably would not find anything about P4 because there are many people called “Du Bo” in China, and this was why he did not use the search term “Du Bo” on its own. The present case is therefore immediately distinguishable from Steinberg. There is no evidence that feeding any of the plaintiffs’ names, individually, into a standard search engine would reveal the Online Articles. At least in so far as P4 is concerned, the evidence is in fact to the contrary.

But what then is the rule concerning the use of a combination of search terms? In Benedict Ng, there was evidence that the defamatory material could be found on the Internet by using both the plaintiffs’ name as one search term, and that conducting a search using the search term “dafni, benedict ng, rajathurai suppiah” would reveal the defamatory material on two major search engines. Lai J thought (at [31]) that in the case before her “it would be highly unusual for any person to conduct a search by combining two or three names in the search field” [emphasis added], and accordingly did not believe that such a fact warranted the inference that substantial publication had taken place in Singapore.

In a similar fashion, Gregg is distinguishable from the present case. As was alluded to by Lai J in Benedict Ng (at [31]), that case concerned a search of the subject-matter of the defamatory material rather than the name of the plaintiff. Like in Benedict Ng, there is no evidence of such a search term having been used here.

For the reasons stated, the second component of publication is satisfied in respect of Articles 1, 2 and 4 by virtue of the evidence of Xu Zhengpeng, a third party reader in Singapore. Be that as it may, the first component of publication is not satisfied. Consequently, the plaintiffs have not proved, on the balance of probabilities, that the defendants are responsible for the publication of the Online Articles in Singapore.

My finding on a sole third party reader in Singapore leads me on to the Jameel doctrine. Before going there, however, I propose to briefly address the observation in Collins (at para 5.06) that “[w]here a claimant proves that matter appearing on the Internet has been published to one or more persons, it may be inferred that the matter was published more widely”. In my view, this observation does not assist the plaintiffs for the simple reason that the drawing of an inference in such a case must still be dependent on the existence of a substratum of fact(s) to support the drawing of such an inference. For the reasons stated at [137]–[141] above, no such inference can be drawn in the present case.

(3) Abuse of process

I now come to the Jameel doctrine. In this regard, the defendants argue that there has been no real and substantial tort in so far as the Online Articles are concerned, and that for this reason the claim should be struck out as an abuse of process under the Jameel doctrine. Given my finding above, it is perhaps apposite to consider this argument in greater detail. In this connection, the plaintiffs have failed to show any real or substantial tort committed in this jurisdiction. Accordingly, the Jameel doctrine is another basis on which the plaintiffs’ claim in defamation may be dismissed.

In the context of defamation, the abuse of process doctrine stemmed from the decision of the English Court of Appeal in Jameel. That case proceeded on the basis that there were only publications to no more than five individuals, three of whom were part of the plaintiff’s camp, within the jurisdiction. The Court of Appeal struck out the plaintiff’s claim on the basis that there was no real and substantial tort, observing as follows (at [69]–[70]):

In Singapore, Jameel was considered by the Court of Appeal, albeit in obiter, in Yan Jun v Attorney-General [2015] 1 SLR 752. The Court of Appeal cautioned (at [118]) that:

However, the Court of Appeal eventually acknowledged (at [120]) the applicability of the general principles of Jameel in Singapore, and proceeded to apply it to the facts of the case:

In Atlantis, it was held, albeit in obiter (at [56]), that although abuse of process is more commonly a ground for striking out a claim before trial, it is open to the court in a suitable case to dismiss a claim at trial on the ground that it constitutes an abuse of process. Reliance was placed on the observations of the English Court of Appeal in Lonrho PLC. and Others v Fayed and Others (No. 5) [1993] 1 WLR 1489 (at 1493D–F and 1502D–E).

Given the conclusion reached above that the first component of the element of publication is not established on the balance of probabilities, there is no liability for the tort in the present case. Be that as it may, I venture to state that the Jameel doctrine can serve as an additional reason to dismiss the action since it can be said that no real and substantial tort was committed in this jurisdiction. The only proof of the second component of publication comes from the evidence of Xu Zhengpeng (and, furthermore, only in relation to Articles 1, 2 and 4). Consequently, the publication in Singapore would have been very exceedingly limited and restricted.

Issue of reference: Do the Online Articles refer to the plaintiffs?

As stated in [34], in order to establish liability, the Online Articles would have to refer to the plaintiffs. In this connection, the parties have agreed that the Online Articles refer to P1, P2, P4 and P5. Thus, a remaining issue on liability that affects P3 is whether the Online Articles refer to P3, ie, Qingjian Realty (South Pacific) Group Pte. Ltd.. There is reference to “Qingjian Group Singapore company” in the Online Articles and the question is whether these words are reasonably capable of referring to P3. In the end, I find that the Online Articles do not refer to P3 and this finding is another reason for dismissing the action in so far as P3 is concerned. These are the reasons for my conclusion on the issue of reference.

The plaintiffs allege that the articles in Categories A and C refer to P3. In Article 1 (the representative article in Category A) and Article 4 (the representative article in Category C), the reference in question is a reference to “Qingjian Group Singapore company”. For completeness, the plaintiffs do not plead that Article 2 (the only article in Category B) is defamatory of P3, and so no question of reference arises here. Further or alternatively, the plaintiffs plead that, by way of innuendo, “Qingjian Group Singapore company” meant and/or was intended to refer to P3. In this regard, they rely on two “facts”. First, they argue that readers of the statement, particularly readers in Singapore, would know that P3 is one of the more established affiliates of P1 and/or P2 in Singapore. Second, they claim that P3 is also known by the public at large to be actively involved in building a name for itself for mass-market condominiums and executive condominiums in Singapore under the “Qingjian Realty” brand.

I agree with the defendants that the words “Qingjian Group Singapore company” are not capable of referring to P3, especially in the light of 18 other companies registered in Singapore with the name “Qingjian” at the material time. This means that P3 would have to rely on innuendo to establish the element of reference in the law of defamation. In other words, no reasonable reader without special knowledge would have understood “Qingjian Group Singapore company” to refer to P3.

I am of the view that Articles 1 and 4 would not lead a reasonable reader to the conclusion that P3 is being referred to. The key allegation in Articles 1 and 4 is that P4 had relied on “Qingjian Group Singapore company” to obtain permanent residency in Singapore. In Article 4, reference is also made to “Qingjian Group Singapore company” being a “twin brother” of P2 in Singapore established by P4 and P5. In these contexts, however, a reasonable reader would be none the wiser even if he had knowledge of the two “facts” which are being relied on by the plaintiffs. In other words, even if these two “facts” were true, I do not consider that they go any way towards establishing that “Qingjian Group Singapore company” refers to P3.

To my mind, “Qingjian Group Singapore company” was used in a descriptive sense. In other words, while the author had intended to refer to a specific company, he chose not to identify it by its actual name. Hence, “Qingjian Group Singapore company” can equally refer to any one of the 18 Singapore entities with the name “Qingjian” apart from P3.

Even if “Qingjian Group Singapore company” was intended to identify a specific company, I agree with the defendants that a reasonable reader would conclude that this referred to a company by the name of Qingjian Group Co., Ltd. Singapore Branch instead, as the name of this company was closer to “Qingjian Group Singapore company” than any of the other “Qingjian” Singapore entities, including P3. In this regard, it is telling that in the plaintiffs’ letters of demand to the defendants dated 15 January 2014, the plaintiffs’ lawyers made a demand on behalf of P1, P2, P4 and P5 and Qingjian Group Co., Ltd. Singapore Branch. Notably, no claim was advanced on behalf of P3 in these letters.

In this connection, I note that three of the plaintiffs’ witnesses have stated that they understood “Qingjian Group Singapore company” to refer to P3. Two of them – Li and Ouyang – are employees of P3, while one of them – Wang Yu – is the general manager of a company which had business dealings with P3. Quite apart from the fact that these witnesses have an ongoing relationship with P3, the fact is that their understanding is of little consequence to the issue at hand. The test for reference is ultimately an objective one. In Gatley, it is stated (at para 7.3) that:

As I have already stated, Articles 1 and 4 would not lead a reasonable reader to the conclusion that they refer to P3. In my judgment, therefore, the articles in Categories A and C do not refer to P3. Consequently, P3’s claim in defamation against the defendants fails for this additional reason.

Issue of meaning: Are the Online Articles defamatory?

As stated in [34], the plaintiffs have to establish that the Online Articles are defamatory of the plaintiffs. The legal principles on defamatory meaning are not controversial.

I begin with P3. It is not the plaintiffs’ pleaded case that Article 2 (the only article in Category B) is defamatory of P3. Given my conclusion that “Qingjian Group Singapore company” is not a reference to P3, the articles in Categories A and C cannot be defamatory of P3. However, even if I were to assume, for the sake of argument, that the words “Qingjian Group Singapore company” are a reference to P3, I find that the articles in Categories A and C are not defamatory of P3. I will elaborate on this point.

The particular paragraph in Article 1 (the representative article in Category A) being relied on as regards P3 reads:

Read in the context of the rest of Article 1, the paragraph quoted above is not defamatory of “Qingjian Group Singapore company”. P4’s “reliance” on “Qingjian Group Singapore company” is left completely unexplained and could be innocuous. Similarly, that the entire senior management of P2 are the main investors of “Qingjian Group Singapore company” says nothing about the latter.

As regards Article 4 (the representative article in Category C), references to “Qingjian Group Singapore company” appear at two points. The first is that P4 and P5 have established a twin brother of P2 in Singapore. This says nothing about P3. As for the second reference, to the effect that P4 has obtained Singapore permanent residency by relying on “Qingjian Group Singapore company”, my conclusion in the preceding paragraph applies equally here.

I now move on to the remaining plaintiffs, P1, P2, P4 and P5. It appears from the Statement of Claim (Amendment No. 2) that these plaintiffs rely only on the natural and ordinary meaning of the Online Articles in making out their case against the defendants. The substantive portions of the plaintiffs’ English translation of Articles 1, 2 and 4 are annexed to this judgment in Annex A, and the parts which are pleaded as defamatory are emphasised in italics and bold therein. In my view, the identified statements in the Online Articles are capable of conveying the defamatory meanings set out at [163]–[165] below.

Article 1

I start by looking at Article 1 (the representative article in Category A). In my view, Article 1 was capable of conveying defamatory meanings. In its natural and ordinary meaning, Article 1 alleged that P4 and P5 had, through various means, dishonestly used P1 to misappropriate the state-owned assets of P2. P2 was formerly a state-owned enterprise but, as a result of this scheme, had become a personal company owned by P4 and P5 and others. In so far as P1 and P2 were concerned, the suggestion was that they were complicit in this scheme. As a corporate plaintiff with no trading or business reputation in Singapore, P1 cannot be defamed by Article 1. However, such allegations are defamatory of P2, P4 and P5 in so far as they plainly lowered P2, P4 and P5 in the estimation of right-thinking members of society generally.

Article 2

Moving on to Article 2 (the only article in Category B), Article 2 was capable of conveying defamatory meanings. In its natural and ordinary meaning, Article 2 alleged that the privatisation of P2 was a result of a scheme by P4 and P5 to misappropriate state-owned assets and that P1 and P2 were complicit in this scheme. Moreover, P4 and P5 had absconded or were planning to abscond by migrating to Singapore. The allegations were of unlawful conduct, corruption, abuse of position and dishonesty on the part of P4 and P5, as well as mismanagement or manipulation of P1 and P2 by P4 and P5. As a corporate plaintiff with no trading or business reputation in Singapore, P1 cannot be defamed by Article 2. However, such allegations clearly lowered P2, P4 and P5 in the estimation of right-thinking members of society generally and are therefore defamatory.

Article 4

As regards Article 4 (the representative article in Category C), I am of the view that in its natural and ordinary meaning, Article 4 alleged the same thing as Article 2, ie, that the privatisation of P2 was a result of a scheme by P4 and P5 to misappropriate state-owned assets and that P1 and P2 were complicit in this scheme. Moreover, P4 and P5 had absconded or were planning to abscond by migrating to Singapore. The allegations were of unlawful conduct, corruption, abuse of position and dishonesty on the part of P4 and P5, as well as mismanagement or manipulation of P1 and P2 by P4 and P5. As a corporate plaintiff with no trading or business reputation in Singapore, P1 cannot be defamed by Article 4. Again, however, these allegations clearly lowered P2, P4 and P5 in the estimation of right-thinking members of society generally and are therefore defamatory.

Conclusion on the plaintiffs’ case with respect to the Online Articles

Based on the foregoing, the plaintiffs have failed to make out a prima facie case of defamation against the defendants in so far as the Online Articles are concerned. With respect to the issue of publication, the plaintiffs have failed to establish the first component of publication. Moreover, while the second component of publication is technically satisfied, the plaintiffs’ claim in defamation falls to be dismissed pursuant to the Jameel doctrine. In addition to these reasons, which apply vis-à-vis all the plaintiffs, P1’s claim also fails as P1 has no trading or business reputation in Singapore. At the same time, P3’s claim also fails as the Online Articles do not refer to P3. In any event, the Online Articles are not defamatory of P1 and P3.

The Justification Issue

In light of my conclusions thus far on liability, it is, strictly speaking, not necessary for me to comment on the defence of justification which arises only after a prima facie case of liability is made out. Nonetheless, I propose to comment on aspects of the defence of justification. The trial proper was dominated by this defence, and parties have also submitted at great length on it. I do not propose to comment on the issue of damages as this is generally only covered in submissions.

It is not controversial that the burden of proof in establishing the defence of justification lies squarely on the defendant (Gatley at para 11.4; Gary Chan at para 13.003; Evans at pp 85–86). To successfully establish the defence of justification, the defendant need only prove the truth of the substance or gist of the offending words (as opposed to those parts of the offending words which do not add to the sting of the alleged defamation) (Review Publishing Co Ltd and another v Lee Hsien Loong and another appeal [2010] 1 SLR 52 at [134]). Thus, some leeway is given for exaggeration and error (Chan Cheng Wah Bernard and others v Koh Sin Chong Freddie and another appeal [2012] 1 SLR 506 (“Bernard Chan”) at [44]). However, in no way does this leeway suggest that the burden is easily discharged.

The defence of justification is not established by showing tenuous circumstantial evidence and inferences (Evans at p 87). At the same time, while the standard of proof remains the balance of probabilities, the sting of the libel in this case is misappropriation of state-owned assets. Needless to say, such an accusation is a serious matter and cogent evidence is needed to establish, on the balance of probabilities, the truth of the accusation. The oft-quoted statement in the cases is that the more serious the allegation, the less likely it is that the event occurred. Consequently, the stronger the evidence must be before the event’s occurrence can be established on a balance of probabilities. Furthermore, in the context of defamation, the defence will not succeed if a materially less serious meaning is proved to be true (Bernard Chan at [43]). As explained in Gary Chan (at para 13.005):

In the course of their submissions, the defendants have referred to the evidential burden of proof shifting to the plaintiffs. As with most civil cases, the evidential burden would shift or alternate from one party to the other in the course of a trial according to the nature and strength of the evidence offered in support of or in opposition to the main fact to be established (see, for example, Ong and Co Pte Ltd v Quah Kay Tee [1996] 1 SLR(R) 782 at [19]). More importantly, however, the legal burden of the defence of justification remains squarely on the defendants. If the state of the evidence is such that at the end of the trial the court is left in an uncertain position, the court may rule that the assertions have not been made out (see, generally, Rhesa Shipping Co. S.A. v Edmunds (“The Popi M”) [1985] 1 WLR 948). It is open to the court to say that the evidence leaves the court in doubt as to whether the event occurred or not, and that the party who bears the legal burden of proving that the event occurred has failed to discharge that burden.

The sting of the Online Articles is that P4 and P5 had in fact misappropriated state-owned assets and that P1 and P2 were complicit in the misappropriation. The defendants’ central case is that the P4 and P5 had deliberately and systematically misappropriated the state-owned assets of P2 through various complicated schemes and a web of companies including: (a) P1 and P2; (b) Shandong Haiwei and Shanghai Heliyuan; and (c) Guoqing. Before this court, the parties have dealt with the alleged misappropriation in various stages, and I propose to adopt the same approach. At the outset, I note that the defendants have, in their closing submissions, abandoned a number of allegations which they had pleaded in their Defence (Amendment No. 1). That being the case, I will focus on the defendants’ case as set out in their closing submissions.

As my comments below will show, what the defendants have sought to do was to highlight a particular transaction, and then invite this court to draw an inference of illegality or impropriety by arguing that the defendants have done enough to shift the evidential burden to the plaintiffs but the plaintiffs have not adduced enough evidence to “pass back” the evidential burden to the defendants. The fallacy of this argument is dealt with in greater detail below.

One point ought to be made at this juncture and this concerns the defendants’ repeated allegation that P4 and, to some extent, P5 had not given consideration for the shares they acquired. As will be seen below, this is a key fact relied upon by the defendants at various points. What must be remembered, however, is that the legal burden of establishing the truth of the allegation (viz., the non-payment for the shares) is on the defendants (ss 103–105 of the EA; see also the Court of Appeal's decision in Cooperatieve Centrale Raiffeisen-Boerenleenbank BA (trading as Rabobank International), Singapore Branch v Motorola Electronics Pte Ltd [2011] 2 SLR 63 (at [30]–[31]) and more recently in SCT Technologies Pte Ltd v Western Copper Co Ltd [2016] 1 SLR 1471 (at [16]–[18])).

Changes in shareholders of P1

June 1998: Founding and initial capitalisation of P1

P1 was registered on 18 May 1998 and had its business license issued on 2 June 1998. Its original name was Qingdao Century Decoration Co., Ltd. This was later changed to Qingdao Zero Zero One Decoration Co., Ltd on 8 May 1999, and subsequently to Qingdao Zero Zero One Engineering Co., Ltd on 28 September 1999. P1 had an initial registered capital of RMB 5 million and its shareholders were P2 and P4, each holding 40% and 60% of the shares respectively. The defendants’ case is that P4 did not contribute anything towards his RMB 3 million share and that the funds were instead provided by P2. The plaintiffs, on the other hand, contend that the capital contribution towards the 60% shareholding in P1 was paid by a group of staff members of P1 or P2 and registered in the name of P4 as their nominee (“the informal shareholding arrangement”).

The state of the evidence on this aspect of the argument is as follows. First, D1 had, at trial, conceded that he has no documentary evidence to show that P4 did not pay for the capital contribution in his name.

Second, the evidence bears out the existence of the informal shareholding arrangement. Evidence of the informal shareholding arrangement was given by P4, P5 and one Wang Linxuan , a director of P3 who was previously in the employ of P1. All of them were part of the informal shareholding arrangement. Taken together, their evidence is that P4 was appointed to be the nominee to hold the shares of P1 on behalf of various employees of P1 or P2 and that he continued to be their representative until the Staff Shareholding Committee of P1 (“SSC”) was formally constituted. The informal shareholding arrangement was a common feature of the state-owned enterprises during the material time, and was intended to give employees a stake in the state-owned enterprises to promote contribution and productivity. The sum paid by each individual was collected and deposited in P1’s corporate banking account on 8 May 1998. P4 had himself contributed RMB 200,000 , P5 more than RMB 10,000 and Wang Linxuan about RMB 10,000 to 20,000. In this regard, I note that the defendants do not dispute the existence of the SSC that was later constituted. This goes some way in showing the existence of the informal shareholding arrangement in so far as it is likely that it was a precursor to the SSC.

Significantly, the existence of the informal shareholding arrangement is also borne out by the documentary evidence. First, in the minutes of the Board of Directors and Board of Supervisors Preparatory Meeting of P1 held on 25 June 1998, it is indicated that the total share capital of RMB 5 million included “[i]nternal employees’ shares” of RMB 3 million. The number of subscribers is stated as 49 persons, including P4, with a subscription amount of RMB 3 million. There is a handwritten document which has been put forward as minutes of what appears to be the same meeting although the venue appears to be different. The defendants’ objection that this is a “contradictory” record as it does not mention the informal shareholding arrangement is rhetorical.

Second, the minutes of the Founding cum First Shareholders’ Meeting of P1 held on 28 June 1998 show that there were 38 shareholders (who collectively held RMB 4.21 million or 84% of the total share capital of P1) in attendance. Two other shareholders were absent. This number of shareholders (total of 40) would make no sense if the informal shareholding arrangement did not exist. The defendants highlight that the original date of this document was 21 March 1999 and that this date had been struck out and replaced with 28 June 1998. The argument was that this “backdating” indicates that the informal shareholding arrangement was a later invention. In response, the plaintiffs submit that the more probable explanation is that the wrong date was typed, and the correct date was then inserted by handwriting. In my view, this is a plausible explanation. Even if the correct date was 21 March 1999, this document still indicates that there were at least 40 shareholders of P1 as of that date. The fact that there is no documentation produced now to show the existence of the informal shareholding arrangement is not, in itself, fatal. The shareholders’ arrangement was, as its name suggests, an informal one, and the defendants’ expert, Xu Ying, had agreed that there was no legal requirement for such documentation.

The defendants claim, rhetorically, that it “may not matter much” whether there was the informal shareholding arrangement, as P4, P5 and Wang Linxuan were unlikely to have access to the amounts of money which they say they invested. At trial, P4 stated categorically that before 1995, his total annual income was about RMB 15,000 from his employment with P2 and that, in any case, his wages and income would have “completely satisfied” his contribution of RMB 200,000. As for P5, his evidence is that his annual income in 1996 was around RMB 20,000. As for Wang Linxuan, his evidence is that he had used his own money, as well as money borrowed from his parents, for his contribution.

The alleged misappropriation of state-owned assets stemmed from the defendants’ contention that P4 did not pay for the shares in his name. The burden of proof concerning non-payment is on the defendants (see [173] above). Besides, even if the informal shareholding arrangement did not exist and/or P4 and P5 and Wang Linxuan did not have access to the amounts of money which they say they invested, it plainly does not follow that the funds were instead provided by P2.

The defendants point to a certificate dated 18 May 1998 that was purportedly issued by P2 and agreeing that P4 “may contribute RMB 3 million in his personal name as registered capital (60%) to apply for the registration of [P1]”. The defendants contend that as this certificate post-dates the date on which the capital payments were made, it makes no sense unless P2 was “giving its blessing for funds which it had already contributed itself to be treated as the funds of P4 (either in his own right or as nominee for a group of employees)”. In response, the plaintiffs argue that the certificate was simply P2’s acknowledgment of its approval of the informal shareholding arrangement. I agree with the plaintiffs that the certificate does not say that P2 paid for the 60% shareholding in P1. In my view, the purport of the certificate is, at best, ambiguous.

A final document that ought to be considered at this stage is a Capital Verification Report dated 15 May 1998. According to this Capital Verification Report, out of P1’s registered capital of RMB 5 million, RMB 3 million was contributed by P4. According to Xu Ying, up till 2014, the Capital Verification Report was a document required by the PRC company registration authority for the formation and registration of a company and had to be issued by a PRC-qualified accounting firm in accordance with PRC accounting principles. The accounting firm would examine the capital account of the company and the wiring proofs to verify that the capital contributions were made through the shareholders’ accounts to the company. However, the accounting firm was not required to inspect the original sources of such funds. This appears to have been accepted by the plaintiffs in their closing submissions. That being the case, the Capital Verification Report dated 15 May 1998 is of no assistance to both parties: it only confirms that the capital contributions were made through P4’s account; it does not reveal whether the source of funds in P4’s account was from P2 (per the defendants’ case) or the informal shareholding arrangement (per the plaintiffs’ case). In this regard, the parties’ extensive submissions on the reliability and evidential value of the Capital Verification Reports do not assist either party.

June 2001: P1’s first capital increase

21 June 2001 was the date of P1’s first capital increase. P1’s capital was increased from RMB 5 million to RMB 10 million. The shareholding as between P2 and P4 remained unchanged at 40:60. The defendants’ case is that P4’s contribution of RMB 3 million was funded by P1 itself, whereas the plaintiffs contend that this was paid by the group of staff shareholders pursuant to the informal shareholding arrangement.

In making their claim, the defendants rely solely on a bank-in slip dated 13 June 2001 attached to a Capital Verification Report dated 15 June 2001 showing that the RMB 3 million was paid out of P1’s account with Agricultural Bank East Branch and into P1’s account with Agricultural Bank City South Branch. The Capital Verification Report itself, however, explains as follows:

This lends credence to the plaintiffs’ case that the RMB 3 million was paid into P1’s corporate banking account, and was later transferred to P1’s capital verification account. Indeed, this explains why the bank-in slip showed the funds as originating from P1. But once again, the Capital Verification Report (this time including the attached bank-in slip) is of no assistance to both parties in so far as it leaves unanswered the real question concerning the original source(s) of the RMB 3 million. The defendants, having relied on the bank-in slip alone, have therefore failed to discharge their burden of proof. Putting it another way, the defendants have not provided countervailing evidence to challenge P4’s evidence, which is that the sum of RMB 3 million was collected from the staff shareholders and paid into P1’s corporate account. Having earlier accepted that the informal shareholding arrangement did in fact exist, this is, in all likelihood, a continuation of this arrangement. This analysis is moreover consistent with Wang Linxuan’s evidence that he had contributed an estimated sum of RMB 60,000 for this first capital increase. His inability to provide an exact figure of his contribution is understandable given the number of years that had passed since then.

March 2002: P1’s second capital increase

On 6 March 2002, P1’s capital was increased for a second time, this time by RMB 10 million, bringing its total capital to RMB 20 million. The additional funds were invested in the name of P4, resulting in his shareholding increasing to 80%. The defendants’ case is two-fold. First, they claim that the new capital attributed to P4 was in fact paid by P1. Second, they claim that the dilution in P2’s shareholding (now 20%) was brought about without the requisite State authority.

With respect to the defendants’ first claim, the defendants rely on a bank-in slip dated 5 March 2002 attached to a Capital Verification Report dated 6 March 2002. The bank-in slip shows that the RMB 10 million was paid out of P1’s account with Agricultural Bank East Branch and into P1’s account with a bank whose name was illegible on the document. The defendants argue that this is sufficient to prove the defendants’ case. But once again, however, the Capital Verification Report itself explains why this is the case:

Although worded in slightly different terms, the purport of this is clearly the same as the earlier Capital Verification Report of 15 June 2001 (see [184] above). It explains why the bank-in slip shows the funds as originating from P1: the RMB 10 million was paid into P1’s corporate banking account, and this was later transferred into P1’s capital verification account. As before, however, neither the Capital Verification Report nor the bank-in slip attached shows the original source(s) of the funds. The defendants’ case, based on the bank-in slip alone, is therefore not established.

The defendants have no other countervailing evidence to challenge P4’s evidence that this second capital increase was contributed by the staff shareholders pursuant to the informal shareholding arrangement. The monies were collected from these members and deposited into P1’s corporate account. Wang Linxuan’s evidence is similar, and at trial he stated that he had contributed around RMB 200,000 to 300,000 during this second capital increase.

As for the defendants’ second claim, reliance is placed on Xu Ying’s evidence that the dilution of P2’s shareholding in P1 from 40% to 20% was a change which had to be evaluated by a qualified valuation firm, submitted to the relevant state-owned assets administration authority for approval and registered with the relevant local governments. The likelihood, according to the defendants, is that the requisite approval was not sought or granted, and that the State authorities were “kept in the dark” about this. The quality of this evidence is not enough to shift the evidential burden to the plaintiffs, let alone discharge the defendants’ legal burden. As against the defendants’ contention, the plaintiffs’ expert, Cao Jun, testified that since the rules and regulations pertaining to the administration of state-owned assets in force at that time did not expressly require the approval of the relevant authorities in charge of the administration of state-owned assets for this type of situation, this capital increase did not violate any mandatory rules under any law or regulation, and no approval from the relevant authorities in charge of the administration of state-owned assets was required for this capital increase.

May 2003: Transfer of shares to the SSC and Qingdao Construction Group Real Estate Co., Ltd (“QCGRE”)

On 13 February 2003, P1’s name was changed to Qingdao Construction Group Zero Zero One Engineering Co., Ltd. On 26 May 2003, there was a significant change in P1’s shareholding, and this took place by way of two main transactions:

(a) First, P4 (who previously held 80% of P1’s shares) transferred 70% of P1’s shares to the newly-established SSC of P1 and 10% of the same to QCGRE.

(b) Second, P2 (which previously held 20% of P1’s shares) transferred all of its shares to QCGRE.

The result is that the SSC now held 70% of P1’s shares, while QCGRE held the remaining 30%. As of 16 January 2003, the SSC had 107 members, including P4, P5 and Wang Linxuan.

The defendants’ case involves two allegations. First, the defendants allege that through this transaction, P4 received RMB 16 million for the shares in P1 for which he had never paid. Second, they allege that P1 misrepresented its capital position to the authorities when seeking approval for this transaction.

With respect to the first allegation, the defendants rely on an Equity Transfer Agreement dated 18 May 2003 which states that P4 was the transferor of the shares worth RMB 16 million. Against this, the plaintiffs’ case is that, pursuant to the informal shareholding arrangement, the RMB 16 million received from the transfer was distributed by P1’s finance department to the individuals for whom P4 held P1’s shares or issued directly to the SSC. A somewhat similar position was maintained by P4 at trial.

The difficulty the defendants face in making out their case is the need for cogent evidence since misappropriation of state-owned assets is a serious allegation. The Equity Transfer Agreement does not assist the defendants because all it shows is that P4 was the transferor of the shares. In the informal shareholding arrangement, P4 was the appointed nominee and it is reasonable that the proceeds of the transfer were subsequently paid out to its members; indeed, it would be wholly unimaginable that the members of the informal shareholding arrangement were content to let P4 retain all the proceeds of the transfer despite their earlier contributions.

What is also being alleged by the defendants is that P1 was simply handing out shares without consideration to favoured employees. The basis for this is alleged admissions by P4 and Wang Linxuan at trial that the number of shares allotted to the members of the SSC were not reflective of the sums they had paid, but determined by factors such as length of service, seniority and performance. I note that while P4 had seemingly admitted initially that each person’s entitlement to the shareholding had nothing to do with his contribution, he subsequently clarified, in no uncertain terms, that there was a “corresponding” relationship between the contributions of the members of the SSC and their allocation of shares. As for Wang Linxuan, his evidence is simply that different people in the company were allocated different number of shares based on factors such as their period of service and position within the company. This methodology does not mean that the allocation of shares was not reflective of the amount contributed by the members of the SSC. Rather, one plausible reading of the evidence is that Wang Linxuan was instead referring to the decision-making process behind how many shares each member of the SSC could subscribe for in the first place, before they paid for these shares. In this regard, I note that the Member List of the SSC only has a column for each member’s “Funding Amount”; it does not have a column for the number of “shares” he has. To my mind, this suggests that the governing criterion amongst the members was the amount he had contributed. In any event, even if the number of shares allotted to the members of the SSC was not reflective of the sums they had paid, this is still a far cry from the defendants’ allegation that P1 was handing out shares without consideration to favoured employees.

As for the defendants’ second allegation, reliance is placed on a Reply Regarding Qingdao Zero Zero One Engineering Co., Ltd’s Transfer of State-Owned Shares sent by the Qingdao State-owned Assets Supervision and Administration Commission to P2. This document is dated 21 April 2003 and it approves the transfer of P2’s shares to QCGRE. However, it states that P1 has a registered capital of RMB 10 million, of which P2 held 40% of the shares. The defendants argue that this document indicates that P2 had misstated its capital position, and that this misrepresentation is consistent with a reluctance on the plaintiffs’ part to let the authorities know that the state-owned interest in P1 had already been significantly diluted. On the other side, the plaintiffs’ position is that no such misrepresentation had been made to the authorities.

The Reply Regarding Qingdao Zero Zero One Engineering Co., Ltd’s Transfer of State-Owned Shares does not further the defendants’ case. The point to be made is that this document was sent by the authorities and there is nothing to suggest that the mistakes as to P1’s capital position were a result of the misrepresentation of any of the plaintiffs. The mistake could equally have been a result of the authorities relying on old records. In this regard, I note that the document states P1’s name as Qingdao Zero Zero One Engineering Co., Ltd even though its name had already changed to Qingdao Construction Group Zero Zero One Engineering Co., Ltd as of 13 February 2003. Even if the mistake was a result of wrong information provided by the plaintiffs, this was probably inadvertent since, as Cao Jun pointed out, all information regarding P1’s share capital increase and shareholding interests were a matter of public record which the authorities in the PRC could easily verify.

May 2005: Transfer of QCGRE’s shares to the SSC and individual shareholders

On 8 May 2005, QCGRE transferred 26% of P1’s shares to the SSC and 4% of the same to three individuals, Liu Wei, Zhong Zhao Hai and Tao Guan Si. With this transfer, the SSC held 96% of P1’s shares, while the three individuals held the remaining 4%. According to the defendants, this transfer was significant as, since QCGRE was majority-owned by P2, the latter was thereby relinquishing its last indirect interest in P1.

The defendants’ case is that the transfer took place for no consideration. First, this assertion has not been pleaded in the Defence (Amendment No. 1). In any event, and this is the second point, the defendants’ case is clearly unsupportable as there is simply no evidence that the transfer took place for no consideration. Reliance is placed by the defendants on the Equity Transfer Agreement dated 8 May 2005, which the defendants say refers to payment but does not attach any terms of payment. But the fact is that this document plainly contemplates payment for the transfer and, in the normal course of business, payment would have followed its execution. The defendants bear the burden of proving non-payment.

June 2005: P1’s third capital increase

On 8 June 2005, P1’s capital was increased by RMB 40 million to RMB 60 million. The defendants allege that the “likelihood” is that this capital increase was “substantially funded” by P1 and/or P2. Once again, however, this assertion has not been pleaded.

Be that as it may, the defendants’ case is, in any event, not borne out by the evidence. The defendants claim that there must be “considerable doubt” as to whether the members of the SSC could have afforded such a large investment from their own means, but this is clearly a speculative assertion. This is especially so in light of P4’s evidence that as the original shareholding was already confirmed, “everyone had to pay up” during this capital increase. Likewise, Wang Linxuan’s evidence is that he had contributed to this capital increase. I should add, at this juncture, that the plaintiffs have additionally sought to rely on the Capital Verification Report for this capital increase which stated that the RMB 40 million was received from the SSC and the three individual shareholders. However, I have not given any weight to this piece of evidence. As stated earlier, the Capital Verification Reports do not reveal anything about the original source(s) of the funds.

June 2007: Transfer of shares to Qingdao Bohai Investment Co., Ltd. (“QBI”) and individual shareholders

On 29 June 2007, the SSC transferred its entire shareholding in P1 to QBI, while the three individual shareholders transferred their shares to QBI and three other individuals (viz., P5, Ren Xiao Qing and Wang Xianmao). The end result was that 98% of P1’s shares became owned by QBI, while the remaining 2% were owned by the three individuals. It appears that QBI was owned by 17 individual shareholders, including P4, P5 and Wang Linxuan, who owned, respectively, 24.81%, 9.31% and 3.9% of the shares therein.

The defendants’ case is that this transaction was ultimately not funded by QBI or its named shareholders, but by P1, since it was P1 that came up with the money to capitalise QBI during its incorporation. The defendants allege that QBI had falsely stated that the funding for its initial capitalisation had come from its 17 individual shareholders and, in this regard, refer to the Decision on Administrative Penalty issued by the Administration for Industry and Commerce on 28 July 2008. The substance of this document seems to be that QBI had wrongly stated that the cheque issuers for its registered capital of RMB 60 million were 17 individuals when the cheque issuer was actually P1. The document further states that this “constitutes an act of violation through using other deceitful means to hide important facts to obtain company registration”. QBI had thus violated the Companies Act of the PRC and was fined accordingly.

The plaintiffs, on the other hand, contend that this transfer was part of a restructuring exercise. Wang Linxuan’s evidence appears to be that the 17 individual shareholders of QBI were the nominees of the SSC, and that it was the members of the SSC who had contributed the RMB 60 million in setting up QBI. The plaintiffs claim that the Decision on Administrative Penalty was a result of an administrative error and that, in any event, it was eventually rectified. With regard to this latter point, the plaintiffs say that after the Decision on Administrative Penalty, the shareholders of QBI had paid their respective contributions directly, as evidenced by an Audit Report dated 16 August 2008. On this point, the defendants argue that this rectification was likely to have been merely cosmetic, ie, P1 simply channelled its funds through the 17 individual shareholders.

In any case, the Audit Report, like the Capital Verification Reports, does not show the original source(s) of the funds. The plaintiffs’ evidence, as set out above, is that it was the members of the SSC who had contributed the RMB 60 million in setting up QBI and that the situation which gave rise to the Decision on Administrative Penalty was an administrative error that was eventually rectified. To my mind, that the members of the SSC should be the ultimate owners of QBI is simply a continuation of the state of affairs from the SSC and the informal shareholding arrangement that preceded it, albeit in a slightly different form (in that the shares were now held by QBI and not by the SSC or in accordance with the informal shareholding arrangement).

In any event, even if I were to take the defendants’ case at its highest, there still remains an obstacle for the defendants. It follows from [196] above that, by the defendants’ own case, P1 was, by this time, a fully private company. Thus, there were simply no state-owned assets to speak about by this stage, much less any misappropriation of the same.

A so-called second string in the defendants’ bow is the allegation that the Share Transfer Agreements for this transaction make no mention of QBI or the three individuals giving any consideration for the shares they were to acquire. It is not clear how this is intended to sit with the defendants’ case that the transfer was ultimately funded by P1, since this latter case clearly contemplates consideration having been provided. In any event, apart from the fact that this has not been clearly pleaded, the evidence does not bear this out. The Share Transfer Agreements state the value of the shares being transferred and it can be inferred from this that payment was contemplated. Elsewhere, the defendants allege that QBI’s acquisition of P1 for RMB 60 million was a transaction at a “severe undervalue”. The simple answer to this is that the defendants have not adduced any satisfactory evidence to back up their claim that, as of June 2007, P1 was “worth much more”.

Changes in shareholders of P2

September 2007: Partial privatisation of P2

P2 started out as a fully state-owned entity. This changed on 27 September 2007, when P2’s shares were transferred from the State to a number of entities:

(a) 30% of P2’s shares were transferred to Shandong Haiwei. The original plan was for Shandong Haiwei to hold these shares on trust for two American companies, but this plan fell through due to the US subprime crisis. The result was that Shandong Haiwei held these shares in its own name.

(b) 55% of P2’s shares were transferred to five other companies, including QCGRE and P1, who held 35% and 6% of P2’s shares respectively.

(c) 15% of P2’s shares were transferred to the State Owned Assets Supervision and Administration Commission of the Qingdao Municipal Government (“SASAC”).

P2’s registered capital was RMB 300 million. The defendants’ case is that Shandong Haiwei had acquired its shares in P2 without paying any of the RMB 90 million it was supposed to contribute, and that P4 was able to bring this about through abusing his position. The plaintiffs’ position is that the payment of RMB 90 million was made by Shandong Haiwei. I should also note that while parties are at variance over the legality of the arrangement between Shandong Haiwei and the two American companies and have submitted on this at some length, this is largely unnecessary. The fact is that the arrangement never materialised. I will therefore focus my comments solely on the primary allegation in the defendants’ case, ie, whether, through P4’s alleged abuse of position, Shandong Haiwei had acquired its shares in P2 for no consideration. I note at the outset that this allegation has not been expressly pleaded by the defendants. The defendants have two arguments in this regard.

The defendants first submit that while the Capital Verification Reports purport to record Shandong Haiwei as having made the necessary payments in September 2007 and January 2008, they do not attach any receipts and are unreliable evidence. As I have mentioned earlier at [182], Xu Ying’s evidence is that while the accounting firm issuing the Capital Verification Reports did not have to inspect the original sources of funds, it would examine the capital account of the company and the wiring proofs to verify that the capital contributions were made through the shareholders’ accounts to the company. In other words, the Capital Verification Reports were only issued after the flow of funds had been ascertained. Thus, the Capital Verification Reports dated 27 September 2007 and 4 January 2008 show that there was a flow of RMB 90 million from Shandong Haiwei’s accounts to P2. There is no countervailing evidence from the defendants to support their claim that Shandong Haiwei’s shares in P2 was acquired for no consideration. If there is any question at all, this has to do with the original source of this consideration, but this is not the case run by the defendants.

Moreover, the decision to allow Shandong Haiwei to hold 30% of P2’s shares in its own name despite the non-materialisation of the trust arrangement was made at a shareholders’ meeting on 22 December 2008. The plaintiffs argue that it would have been “impossible” for the other shareholders to have agreed to allow Shandong Haiwei to do so if it had not made full payment of its capital contribution. While “impossible” may be putting the matter too far, there is certainly merit to this submission. I note, critically, that the SASAC appears to have been represented at this meeting.

The defendants’ second submission is that the RMB 90 million allegedly paid by Shandong Haiwei dwarfed Shandong Haiwei’s own capitalisation, which was supposedly RMB 50 million. This is nothing more than a speculative suggestion.

October 2012: Transfer of Shandong Haiwei’s shares to Shanghai Heliyuan

On 31 October 2012, Shandong Haiwei transferred its 30% share in P2 to Shanghai Heliyuan. There were some other shareholding changes as well, including an increase in P1’s shares in P2, but these are not relevant for present purposes as the defendants’ case do not rest on them. Their case is that P4 had caused Shandong Haiwei to transfer its shares for no consideration. The plaintiffs disagree.

The Notice of Approved Registration for Shanghai Heliyuan dated 22 October 2012 indicates through what appears to be an attached application form that Shanghai Heliyuan’s two shareholders were P4 (holding 99.5% of Shanghai Heliyuan’s shares) and one Cao Shujian (holding 0.5% of the same). The Share Transfer Agreement between Shandong Haiwei and Shanghai Heliyuan dated 31 October 2012 states the transfer price as RMB 111.22 million to be paid in instalments. Apart from two initial payments totalling RMB 6 million, which were to be paid within 30 days of the agreement, the remaining instalments were to be paid within a time period of approximately eight years. At trial, P4 confirmed that Shanghai Heliyuan was still paying for this transfer.

The defendants, however, have not produced any satisfactory evidence to make out their case. They allege that the price and terms of payment were exceptionally favourable to Shanghai Heliyuan. It is not clear why this is the case. Crucially, this allegation, assuming it were true, runs contrary to the defendants’ primary case that no consideration was given for the transfer. The defendants also allege that it is inconceivable that, within a month of incorporation, Shanghai Heliyuan could have built up assets sufficient to pay the initial RMB 6 million. But this is, once again, a conjecture and, even if true, does not automatically lead to the conclusion that no consideration was given for the transfer. At trial, D1 said that his basis for saying that no consideration was given was that he did not see any proof of payment. This is plainly an inapt and unacceptable attempt to shift the evidential burden to the plaintiffs.

December 2012: Transfer of shares to Guoqing

Sometime in December 2012, the shareholders of P2 incorporated Guoqing in order to hold their shares in P2. A small amount of additional capital was contributed by a company called Qingdao City Construction Design Institute Co., Ltd, with the result that Guoqing held 99.9% of the shares in P2. It is agreed that there was no material change in the ultimate shareholding of P2.

In their pleadings, the defendants had originally alleged that Guoqing was used by P4 and P5 to “systematically” effect the transfer of P2’s assets out of the PRC to abroad, in particular to establish various entities in Singapore with the name “Qingjian”. This has been abandoned by the defendants in their closing submissions and, for this reason, it is not necessary for me to say anything more about it.

P4 and P5’s move to Singapore

The defendants finally allege that P4 and P5 had made use of their positions in P2 in their respective applications for permanent residency in Singapore. I need not consider this allegation for the simple reason that, even if true, it does not go towards justifying the sting in the Online Articles. The reference to P4 and P5’s permanent residency application in Article 1 and Article 4 is in the context of their reliance on “Qingjian Group Singapore company”, and not P2. Likewise, the reference in Article 2 to the entire family of P4 having obtained permanent residency in Singapore makes no mention of P2. Moreover, this allegation plainly does not justify the imputation in Articles 2 and 4 that P4 and P5 had absconded or were planning to abscond by migrating to Singapore.

P4 and P5’s involvement

Central to the defendants’ case is the claim that throughout the aforementioned stages from state-owned enterprise to private ownership, P4 and P5 had simultaneously held a number of powerful appointments in key organisations, including P1, P2, the SSC, QCGRE, QBI, Shandong Haiwei and Shanghai Heliyuan. The suggestion is that P4 and P5’s holding of these positions had allowed the various transactions to take place. The defendants’ submission is that given P4 and P5’s “remarkable nexus of power”, the possibility of shareholders, other directors or supervisors intervening to thwart their alleged plans “must have been so remote as to be negligible”, and that it is reasonable to infer that, where necessary, P4 and P5 were able to persuade others to join them in their alleged scheme.

Plainly, the involvement of P4 and P5 in the aforementioned transactions is a critical part of the defendants’ case. These transactions alone would not justify the defamatory imputations of the Online Articles if they were carried out without the involvement of P4 and P5. However, having found above that the defendants have not even shown that these transactions were improperly carried out, it is not necessary for me to deal with P4 and P5’s involvement in the relevant organisations at the various stages. In any event, the defendants’ claims in this regard are unacceptably speculative, for there is no objective evidence showing P4 and P5 had indeed used their positions to put into effect these transactions.

Conclusion on the justification issue

In light of the assessment above, the defendants have not established the defence of justification. This view is nonetheless moot seeing that the plaintiffs have not succeeded on the issue of liability.

The claims in conspiracy

The plaintiffs’ claims in conspiracy are on the basis that both conspiracy by unlawful means and conspiracy by lawful means are made out on the evidence. What is clear is that the plaintiffs’ claims in conspiracy (both by unlawful means and by lawful means) are premised on the defendants having published the Online Articles and/or the News Articles. To succeed in these claims, the plaintiffs have to show that the defendants combined to publish and did publish the offensive material. As I have found that the defendants are not responsible for the publication of both the Online Articles and the News Articles, it follows that the claims in conspiracy must also fail.

Conclusion

Annex A

Article 1 (Category A)

Article 2 (Category B)

Article 4 (Category C)

Annex B

Articles 1, 3, 9 and 10 (Category A)

Article 2 (Category B)

Articles 4, 5, 7, 8, 11 and 12 (Category C)