Low Leong Meng v Koh Poh Seng

Chan Seng Onn J:

[2] The Appellant was a director and shareholder of Daifuku-Wis Technologies Pte Ltd (“DWIST”), a Singapore company. DWIST is a joint venture between the Appellant and Daifuku Mechatronics (S) Pte Ltd (“DMS”), the Singapore subsidiary of Daifuku Co Ltd (“Daifuku”), a Japanese company.

[3] The Respondent was DMS’s deputy general manager. At the time of the trial below, the Respondent had been promoted to the position of general manager.

[4] The Respondent sued the Appellant for defamation arising from an email in the Japanese language which the Appellant had sent to two members of Daifuku’s “top management” on 6 August 2007 (“the Email”). An agreed English translation of the Email reads as follows:

[5] The Respondent claimed that the following portions of the Email were defamatory (“the Words”):

[6] The Respondent pleaded in his Statement of Claim (Amendment No 1) that the natural and ordinary meaning of the Words meant or were understood to mean the following:

(a) The Respondent, together with Ms Quek Yong Yong, an employee of DMS, had abused the power of his position and office at DMS to give business to a company called IT Wireless Pte Ltd (“IT Wireless”), a competitor of DWIST, for personal gain and enrichment.

(b) Despite his purported resignation from his position in IT Wireless in 2001, the Respondent had continued to be involved in the business of IT Wireless. Arising from that relationship, the Respondent received several secret commissions from IT Wireless for giving it business.

(c) The Respondent had breached his fiduciary duties to DMS.

(d) The Respondent is guilty of dishonourable conduct against DMS.

(e) The Respondent is untrustworthy.

(f) The court had already ruled against the Respondent.

[7] The Appellant denied that the Email had any of the meanings set out in the Respondent’s Statement of Claim (Amendment No 1) (see [6] above). Instead, the Appellant claimed that the plain and ordinary or innuendo meaning of the Words (see above at [5]) was as follows:

(a) The Appellant was a past President of DWIST.

(b) He owned shares in DWIST which he wished to dispose of to DWIST at a fair and reasonable price.

(c) DMS was the other majority shareholder of DWIST.

(d) A fair and reasonable agreement could not be reached for the sale of the Appellant’s DWIST shares to DMS because the value of DWIST has been kept artificially low.

(e) One reason the value of DWIST shares was artificially low was because business which would otherwise have been booked by DWIST has been procured for IT Wireless by, inter alia, the Respondent who was and may still be a shadow director of IT Wireless. The Respondent was and still is also an employee of DMS. The Appellant then set out the definition of the term “shadow director” under s 4(1) of the Companies Act (Cap 50, 2006 Rev Ed).

(f) The Appellant averred that the directors of IT Wireless were accustomed to acting on the Respondent’s instructions after he resigned his directorship of IT Wireless on 30 June 2011.

(g) The Appellant had provided supporting evidence of the Respondent’s involvement in IT Wireless to one Shimizu, the President of DMS, in an attempt to seek his assistance in obtaining a fair and reasonable price for the Appellant’s shares in DWIST.

The Appellant then pleaded that the above understanding of the Words was true and therefore justified. He also raised the defence of qualified privilege.

[8] The District Judge dismissed the Respondent’s claim (see Koh Poh Seng v Low Leong Meng [2010] SGDC 256) (“the District Judge’s First Decision”). He held that the Email was not defamatory. In his view, the substance of the Email was this (see the District Judge’s First Decision at [21]:

The District Judge did not consider this interpretation of the Email to be defamatory. He did not think that the Email suggested that the Respondent’s influence over IT Wireless was such that he had “profited at the expense of, or in derogation of his fiduciary duties to DMS” (see the District Judge’s First Decision at [22]). He did not consider that it was defamatory to call someone a shadow director “unless the context suggested otherwise, which was not the case here” (see the District Judge’s First Decision at [23]).

[10] The Appellant applied in Originating Summons No 724 of 2010 for leave to appeal against the following aspects of the District Judge’s First Decision:

(a) The portions of the District Judge’s First Decision in which he found that the question of whether the Respondent was a shadow director was an “egregious exercise in futility” (“Head A”).

(b) The portion of the District Judge’s First Decision where he did not make a finding on whether the Respondent had succeeded in proving his defence of qualified privilege at trial (“Head B”).

(c) The portions of the District Judge’s First Decision where he did not make a finding on whether the Respondent was a shadow director of IT Wireless, whether the Respondent was paid for the IT Wireless shares that he sold and whether the Appellant had published the Words maliciously, with a deliberate intention of injuring the Respondent, knowing or not caring whether it was true or false out of spite or ill will towards the Respondent as pleaded by the Respondent in claiming aggravated damages from the Appellant (“Head C”).

(d) The portion of the District Judge’s First Decision where he recorded that the Appellant’s efforts at proving that the Respondent was a shadow director took most of the time at trial (“Head D”).

(e) The District Judge’s decision that he would not hear the parties on costs and that it was fair for each party to bear his own costs (“Head E”).

[11] I granted the Appellant leave to appeal on 5 August 2010.

[12] The appeal (District Court Appeal No 43 of 2010 (“DCA 43/2010”)) was fixed before Kan Ting Chiu J.

[18] The Appellant’s solicitors then wrote to the Supreme Court Registry (“the Registry”) on 26 April 2011 to request for DCA 43/2010 (ie. the first appeal before Kan J.) to be re-fixed for a hearing. The Registry replied on 29 April 2011 to inform the Appellant that Kan J had directed the parties to take whatever actions they considered to be appropriate on the basis of the District Judge’s Second Decision.

[20] The Appellant applied in Originating Summons No 428 of 2011 for leave to appeal against the following aspects of the District Judge’s Second Decision:

(a) The District Judge’s ruling that the Email did not contain a “defamatory sting” (“Head F”) and his ruling that the Appellant should not get costs for expending time to prove what the District Judge had ruled to be a “non-defamatory sting” (“Head G”);

(b) The District Judge’s ruling that he could not infer that the Email alleged that there was a conflict of interest on the Respondent’s part (“Head H”);

(c) The District Judge’s ruling that the Appellant’s pleaded defence failed to identify a false innuendo and failed to explain why it should be inferred from the text (“Head I”);

(d) The District Judge’s reference to a “Lucas-Box meaning” (“Head J”); and

(e) The District Judge’s ruling that the orders as to costs for the interlocutory proceedings (that costs were to be in the cause) could not be taken into consideration in the court’s exercise of discretion in respect of the costs of the trial (“Head K”).

The Appellant also applied for leave to appeal against the District Judge’s Second Decision on the ground that all the evidence adduced at trial in support of the Appellant’s defence of justification was also essential to prove his alternate defence of qualified privilege (“Head L”). The Appellant deposed in his affidavit in support of his application for leave that this argument was raised to the District Judge. The District Judge did not, however, consider this argument in his judgment.

[21] I granted the Appellant leave to appeal on 17 August 2011.

[25] The Respondent further argued that this appeal was an abuse of process because the Appellant is having another bite at the cherry based on a fresh position that the Email was defamatory. If the Appellant was dissatisfied with the District Judge’s primary finding that the Email was not defamatory, he should have appealed against that aspect of his decision in the First Appeal.

[26] The rather complicated procedural history of this matter raises interesting issues concerning the scope of the present appeal. The Appellant had five heads of appeal in DCA 43/2010 (see [10] above). As I observed earlier (see [14] above), Kan J’s remission of the matter to the District Judge seemed to only touch on one of the heads of appeal, viz, Head E. On remission, the District Judge held that he was functus officio in relation to any substantive matters but he nevertheless expressed an opinion that his primary findings were correct (see [15] above). As a result, the present appeal before me also seemed to raise substantive issues. However, in the decision presently under appeal, the District Judge was merely expressing an opinion because he had ruled (correctly, in my view) that he was functus officio as regards his primary findings. These procedural complications raised two questions in my mind. First, was it within the scope of the present appeal for me to review the District Judge’s primary findings? Second, were the remaining heads of appeal in DCA 43/2010 (ie, Heads A to D) still in issue at the appeal before me?

[30] The second principle is also found in O 59 r 3(2) of the ROC. The third and fourth principles set out above are embodied, in a slightly different way, in O 59 r 6A of the ROC:

A summary of the applicable principles may also be found in my decision in Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others (Tung Yu-Lien Margaret and others, third parties) [2011] 1 SLR 582 at [34]–[36].

[31] I find that the District Judge was manifestly wrong in the exercise of his discretion. The Appellant’s conduct of the litigation was reasonable for the following reasons.

[32] First, the District Judge’s comments during the trial suggested that he considered the issue of whether the Respondent was a shadow director of IT Wireless to be relevant. The Appellant cannot therefore be faulted for continuing to pursue the issue. As the Appellant has correctly pointed out, the following comments and indications from the District Judge would have reasonably led him to believe at that time that it was relevant to prove that the Respondent was a shadow director of IT Wireless:

(a) When the Respondent requested for the District Judge to make a preliminary ruling as to whether the words complained about were defamatory, the District Judge stated that he would have to hear the evidence. His view was that there would be “no time savings” with making such a preliminary ruling.

(b) When the Respondent was asked if he recalled signing IT Wireless’ cheques, the Respondent replied that he could not recall. The District Judge then interjected and expressed his surprise that the Respondent would forget signing his cheques. The District Judge’s interjection suggested that he felt that it was relevant for the Appellant to pursue the truth of whether the Respondent was a shadow director in IT Wireless.

(c) On the second day of the trial, the Respondent was further cross-examined on the issue of his signing IT Wireless’ cheques. When the Respondent was asked whether he was aware that he remained as an authorised signatory for IT Wireless’ cheques at the material time, the District Judge interjected again and stated that the issue was whether the Respondent signed cheques and not whether he remained as a signatory.

I should also mention that, at the hearing before me, I asked the Respondent’s counsel to bring to my attention any part of the District Judge’s notes of evidence in which he (ie, the District Judge) indicated that the issue of whether the Respondent was a shadow director was irrelevant. The Respondent was not able to refer me to any such indication.