High Court · Decided 6 May 2015

Ramesh s/o Krishnan v AXA Life Insurance Singapore Pte Ltd

Feedback & support

[2015] SGHC 125Case no. Suit No 1022 of 2012

What happened, in plain English

There is no plain-English summary of this judgment yet.

Ask about this judgment

Laws this judgment relies on

Grounds of decision

Official text from eLitigation

George Wei JC:
[1] This case concerns a claim for defamation arising from several reference checks and communications made in respect of the plaintiff, a financial adviser (“the Plaintiff”). These were provided by the defendant, AXA Life Insurance Singapore Pte Ltd (“the Defendant”), to the Monetary Authority of Singapore (“MAS”) and potential employers of the Plaintiff, namely, Prudential Assurance Company Singapore Private Limited (“Prudential”) and Tokio Marine Insurance Singapore Limited (“Tokio Marine”).
[2] The Plaintiff also claims malicious falsehood and negligence on the part of the Defendant in the reference checks that were provided to these potential employers. The trial took place over a period of eight days. I reserved judgment upon the conclusion of the trial. Having considered both the evidence and the parties’ submissions, I dismiss the Plaintiff’s claims in defamation, malicious falsehood and negligence. I now set out the grounds for my decision.
The facts
[3] Prior to joining the Defendant, the Plaintiff worked as an insurance agent at other insurance companies including Phillip Securities and Manulife Financial. It is not in dispute that the Plaintiff’s services at Manulife Financial were terminated for reasons relating to persistency and compliance issues.
[4] The Plaintiff was first engaged by the Defendant as a financial adviser and financial services manager on 26 July 2005. At that time, the Defendant engaged the Plaintiff subject to a period of close supervision due to reference check reports the Defendant had received, and on which MAS had made enquiries of the Defendant. That said, it is apparent that the Plaintiff performed well enough to be promoted to the position of a financial services director in 2007, when he led a group of advisers under his own agency organisation, “Ramesh Organisation”. These advisers were formally employed by the Defendant. In 2009, the Plaintiff was promoted to a senior financial services director (“Senior FSD”). At all material times, the Plaintiff was authorised to act as an agent for the Defendant for the purposes of soliciting and advising on life insurance applications, annuities and other products offered by the Defendant. The Plaintiff was not an employee of the Defendant. It is apparent that the Plaintiff received commissions based on the insurance policies sold by Ramesh Organisation.
[5] The Plaintiff’s scope of work as a Senior FSD was to recruit, train and supervise advisers for the Defendant. In doing so, the Plaintiff would assess the sales figures and persistency ratios of the advisers directly under him.
[6] Persistency ratios are essentially a measure used to track the number of insurance policies sold by advisers that are still in force over a certain period of time. The Plaintiff gave evidence that from January 2007 to April 2011, the Defendant had always relied on a 19-month persistency ratio to assess the performance of the advisers under his supervision. The 19-month persistency ratio was a measure of how many regular and single premium policies are still in force over an 18-month period. As at April 2011, the Plaintiff had 47 advisers under him in Ramesh Organisation.
Industry reference check system
[7] The MAS prescribes fit and proper guidelines for representatives of financial institutions (“FIs”) in relation to their competency, integrity, and financial soundness (“the Guidelines on Fit and Proper Criteria”). In September 2006, the MAS introduced an industry reference check system (“the Industry Reference Check System”) to facilitate effective and efficient compliance with the Guidelines on Fit and Proper Criteria. The Industry Reference Check System was implemented on 2 October 2006. This was followed by a Representative Notification Framework (“RNF”) licensing regime introduced on 26 November 2010, which imposes a duty on an FI to respond to queries by MAS and reference check requests by other FIs in relation to its ex-financial advisers.
[8] It is not disputed that the Defendant, Prudential and Tokio Marine are FIs subject to regulation by MAS. Specifically, they are subject to the abovementioned Industry Reference Check System, the Guidelines on Fit and Proper Criteria and the RNF.
[9] Under the Industry Reference Check System, FIs are obliged to conduct reference checks on persons applying to them for jobs involving regulated activities under the Financial Advisers Act (Cap 110, 2007 Rev Ed) (“FAA”) and the Securities and Futures Act (Cap 289, 2006 Rev Ed) (“SFA”). These reference checks are obtained from the job applicant’s ex-principal(s) using a standard industry reference check form (“the Industry Reference Check Form”). The checks are conducted to ensure that the job applicant satisfies the Guidelines on Fit and Proper Criteria. The ex-principals are expected to respond in a timely and forthcoming manner to facilitate such reference check requests.
[10] The Industry Reference Check Form comprises four parts: (a) Section A (minimum compulsory information); (b) Section B (optional information); (c) Written authority to conduct the reference check; and (d) Guidelines for use of the reference check form (“the RCF Guidelines”). The Industry Reference Check Form was developed by the Life Insurance Association (“LIA”) in 2006. The RCF Guidelines stress that the prospective employer or principal is at liberty to request more information under the optional section (eg, information on persistency ratios).
[11] The Industry Reference Check Form contains a section where the applicant gives written authorisation to the prospective hiring FI to conduct the inquiry into his or her previous employment, and to release from liability all persons or entities requesting or supplying such information that pertains to the applicant’s previous employment.
[12] Under the RNF, FIs are to notify MAS whenever they intend to appoint a representative to provide financial advisory or capital markets services under the FAA or the SFA. They are to ensure that any proposed representative satisfies the Guidelines on Fit and Proper Criteria. The FIs do this by making due and diligent enquiries on the applicant’s background based on all relevant information that is available. This includes conducting the necessary reference checks with the applicant’s ex-employer or principal using the Industry Reference Check Form. The FIs must also ensure that their appointed representatives are, and continue to be, fit and proper under the Guidelines on Fit and Proper Criteria.
[13] On 26 November 2010, MAS revised the Guidelines on Fit and Proper Criteria. The revised guidelines (like its predecessor) provided that FIs must implement appropriate recruitment policies, and adequate controls and procedures to ensure that their representatives meet the fit and proper criteria. The fit and proper criteria included (but was not limited to): (i) honesty, integrity and reputation, (ii) competence and capability, and (iii) financial soundness.
[14] Reference should also be made to the MAS Circular of 7 February 2011, which states (amongst other matters) that a FI is expected to conduct probity checks on the proposed representative’s past record by confirming that he has not been dismissed or asked to resign. The FI is also to enquire whether the proposed representative has any adverse material record such as a warning, reprimand or other disciplinary action for misconduct.
[15] On 26 November 2010, the Defendant successfully applied for an RNF licence for the Plaintiff.
Plaintiff’s resignation from the Defendant
[16] An issue apparently arose between the parties in or around October 2010, when the Plaintiff realised that the advisers in Ramesh Organisation might not be receiving the Defendant’s Top Awards for 2010 due to an apparent mismatch in the parties’ expectations. At that point in time, Ramesh Organisation had focused predominantly on regular premium policies. The Plaintiff claims that Ramesh Organisation’s targeted approach of focusing on regular premium policies was highlighted to the Defendant’s then chief executive officer (“CEO”), Mr Gilbert Pak (“Mr Pak”). Through Mr Pak, the Defendant apparently assured the Plaintiff that only regular premium policies would be considered for the purpose of assessing the top awards.
[17] On or around 1 December 2010, Mr Glenn Williams (“Mr Williams”) replaced Mr Pak as the Defendant’s CEO. On 11 January 2011, Ramesh Organisation held its annual function to celebrate the organisation’s performance the year before. At this function, Mr Williams complimented the organisation’s performance. In addition, Mr Williams also communicated the Defendant’s position that it would be taking into account the persistency ratios for single premium policies in assessing the Defendant’s top performers. It thus transpired that the Defendant determined the top performers based on both single and regular premium policies. Dismayed at the Defendant’s stance, the Plaintiff notified the Defendant via an email to Mr Williams dated 14 January 2011 that Ramesh Organisation had decided to leave the Defendant.
[18] The Plaintiff claims that thereafter, a few of the Defendant’s executive officers, including Mr David Matthews (“Mr Matthews”), the Regional Chief Executive Officer of South East Asia, asked him to stay with the Defendant. According to the Plaintiff, Mr Matthews invited him to Hong Kong to meet him from 18 to 21 February 2011. The Plaintiff’s travel expenses were fully paid by the Defendant. Subsequently, in March 2011, the Defendant offered the Plaintiff a remuneration package known as the “AXA Growth Package”, which was worth $1.3 million.
[19] On 29 April 2011, the Defendant’s Mr Williams met the Plaintiff and told him that he knew of the Plaintiff’s intention to leave the Defendant. On the same day, the Defendant terminated the Plaintiff’s contract with the Defendant via a termination letter dated 29 April 2011, giving the Plaintiff 14 days’ notice in accordance with his contract. The Plaintiff requested to resign instead. Mr Williams acceded to the Plaintiff’s request, and gave the Plaintiff up until 1pm of the same day to do so. The Plaintiff tendered his written resignation by the deadline stipulated by Mr Williams.
Plaintiff’s application to Prudential
[20] On or around 20 May 2011, the Plaintiff applied to join Prudential. The next day, Prudential sent a reference check request to the Defendant pursuant to the Industry Reference Check System. This reference check was a necessary step in kicking start the process of Prudential applying for an RNF licence for the Plaintiff. Depending on the response received, this may lead to a chain of enquiry into the Plaintiff’s background. The Plaintiff’s written authorisation was enclosed in Prudential’s request to the Defendant as follows:
[21] On 7 June 2011, the Defendant provided its written response to Prudential. This response forms an important part of the basis of the Plaintiff’s claim for defamation.
[22] In the Defendant’s response under the section titled “Optional Information”, it referred Prudential to an Annex A attached therein. Annex A stated as follows:
[23] While the First Statements on Compliance stated that disciplinary actions and police referrals were made against some advisers in “Ramesh’s organization”, nothing further was mentioned about the outcome of the investigations against the Plaintiff.
[24] I highlight that the Defendant’s written response on 7 June 2011 touched on two areas in particular: (i) persistency, and (ii) compliance. As indicated above, these will be referred to as the “First Statements on Persistency” and the “First Statements on Compliance” respectively. Where reference is made to the whole of the Defendant’s written response of 7 June 2011 as extracted above, it shall, for convenience, be referred to as the “First Statements on Persistency and Compliance”.
[25] On the same day, Prudential wrote back to the Defendant seeking clarification in respect of, amongst others, the names of the advisers involved in the investigations and whether the investigations had been concluded. It is noted that the MAS Circular of 7 February 2011 requires an FI who assesses an individual as fit and proper despite uncovering adverse information in the due diligence checks to justify and document the basis for that assessment. On 9 June 2011, the Defendant replied Prudential’s email stating that the Plaintiff was investigated in August 2010 for unprofessional conduct. However, no further action was taken because the evidence substantiating the allegation was inconclusive.
[26] Thereafter, Prudential sought another round of clarification from the Defendant on 21 June 2011 in respect of, amongst others, the Defendant’s derivation of the figures in the First Statements on Persistency. The Defendant did not respond to this email. As such, on 18 July 2011, Prudential sent another email with the same questions.
[27] I note that persistency is a matter of some concern and importance to the insurance industry as a whole. Indeed, this is borne out by Prudential’s request for more information on persistency as well as the guideline by LIA, which names persistency as an example of relevant optional information.
[28] In response to Prudential’s second round of clarification, the Defendant’s Mr Williams issued a letter dated 14 October 2011 directly addressed to Prudential’s CEO, Mr Kevin Holmgren. The said letter highlighted Ramesh Organisation’s low 13-month persistency ratio of 9% and the Defendant’s belief that ex-advisers in the organisation had been involved in the twisting of clients’ policies. In brief, twisting concerns a situation where a policyholder is persuaded to allow an existing policy to lapse and to enter into a new policy on similar terms. To be clear, the Plaintiff does not plead this letter to Prudential, with its suggestion of twisting, as a defamatory statement upon which it makes a claim.
[29] On or around 12 August 2011, Prudential applied to MAS for an RNF licence for the Plaintiff. MAS was prepared to issue a conditional licence to the Plaintiff. This effectively meant that conditions would be imposed on Prudential in the event that the Plaintiff was hired as its representative. Prudential eventually decided against employing the Plaintiff and withdrew its application for an RNF licence for the Plaintiff in December 2011.
Plaintiff’s application to Tokio Marine
[30] Thereafter, in January 2012, the Plaintiff applied to Tokio Marine for the position of a financial adviser and was orally offered a sign-on fee of $20,000. Tokio Marine requested a reference check of the Plaintiff from the Defendant on 19 January 2012. The Plaintiff’s written authorisation was also enclosed in Tokio Marine’s request as follows:
[31] On 2 February 2012, Tokio Marine received a response from the Defendant broadly similar to the response that Prudential had received earlier. Specifically, the response to Tokio Marine included an Annex A containing similar statements on persistency and compliance issues. For convenience, I shall refer to the corresponding statements that were made to Tokio Marine as the “Second Statements on Persistency”, the “Second Statements on Compliance”, and collectively, the “Second Statements on Persistency and Compliance”.
[32] By way of an email dated 8 March 2012, Tokio Marine followed up on the Defendant’s response with some enquiries. It is noteworthy that Mr Williams circulated an internal email dated 9 March 2012 to the Defendant’s compliance manager, Mr Jack Ng (“Mr Ng”). It stated that the Defendant “need[ed] to be much stronger than this”, that they “need[ed] to mention [the Plaintiff’s] very poor persistency” and that “[f]or the 5 disciplinary cases if any of these are bad [they] should highlight those case[s]”. Thereafter, on 21 March 2012, Mr Ng responded to Tokio Marine by way of an email stating that:
[33] Tokio Marine subsequently informed the Plaintiff that it could not hire him due to the Defendant’s response to its reference check request.
Defendant’s communications with MAS
[34] At the time of Prudential’s application for an RNF licence for the Plaintiff, MAS contacted the Defendant. In or around October 2011, MAS queried the Defendant on its basis for terminating the Plaintiff’s employment and the reasons why he was subsequently allowed to resign instead. By way of an email to MAS dated 21 October 2011, the Defendant’s Mr Ng stated that:
[35] The Defendant also provided MAS with information on the Plaintiff’s low group persistency ratios, high lapse rates, and the conduct of several agents under Ramesh Organisation who were disciplined for improper sales practices and unprofessional conduct. In this regard, Mr Ng sent an email to MAS dated 9 November 2011 stating that:
[36] To be clear, there were a few other communications between the Defendant and MAS in 2011 which the Plaintiff referred to in his pleadings. However, it is apparent that these two emails in particular form the core of his complaint.
[37] One limitation the Plaintiff faces in its defamation claim is that whilst the aforementioned emails sent by the Defendant to MAS in 2011 (“the MAS Emails”) were referred to in the Plaintiff’s claim for defamation, the majority of its content was not specifically pleaded as part of the allegedly defamatory words. The Plaintiff pleaded as follows at para 27 of his statement of claim:
[38] It is clear that the only words pleaded as defamatory are the “words in the First and Second Statements on Persistency and Compliance Issues”. While reference is made to “the Defendant’s Correspondence With the MAS in 2011”, the only words the Plaintiff pleads as being defamatory in the said correspondence with MAS are the “words in the First and Second Statements on Persistency and Compliance Issues”.
[39] To be clear, the phrase “First and Second Statements on Persistency and Compliance Issues” refers to the reference check responses provided by the Defendant to Prudential and Tokio Marine. The reference to “Subsequent Statements to the MAS” refers to communications that took place in 2012. In that year, MAS sought the Defendant’s consent to disclose the information given by the Defendant to the Plaintiff. The Defendant consented, and MAS thereafter notified the Plaintiff by way of a letter dated 31 August 2012 that:
[40] Returning to the statement of claim, the Plaintiff then pleaded that the defamatory words caused injury to his reputation, distress, hurt feelings and financial loss. I note that there are no other paragraphs in the statement of claim that contain pleadings on statements which the Plaintiff asserts are defamatory. Looking at the statement of claim as a whole, therefore, the only words complained of in respect of the communications to MAS, and indeed any other communications made by the Defendant, are the same words set out in the “First and Second Statements on Persistency and Compliance Issues”.
[41] The references made in the MAS Emails to “gaming of compensation”, “sailed very close to the wind”, and “crossed the line” are not pleaded as defamatory statements. Indeed, at the start of the trial, the Plaintiff confirmed in cross-examination that the claim in defamation was based only on the First and Second Statements on Persistency and Compliance contained in the Defendant’s reference check responses to Prudential and Tokio Marine.
[42] That said, whilst the references in the MAS Emails to “gaming of compensation” and “crossing the line” are not part of the defamatory statements relied upon by the Plaintiff, they may still be relevant in the context of showing malice.
Present proceedings
[43] In the present action, the Plaintiff is seeking compensation for losses allegedly suffered as a result of both Prudential and Tokio Marine’s rejection of his job application. The Plaintiff claims that the said rejections were caused by the Defendant’s actions.
The parties’ arguments
[44] The Plaintiff makes three claims in respect of the First and Second Statements on Persistency and Compliance:
(a) defamation;
(b) malicious falsehood; and
(c) negligence.
[45] I shall now describe the Plaintiff’s claims and the Defendant’s responses.
Plaintiff’s arguments
[46] The Plaintiff’s case focuses primarily on the claim in defamation. In this regard, the Plaintiff is relying on the natural and ordinary meaning of the words in the First and Second Statements on Persistency and Compliance, as well as the communication of these statements in the MAS Emails.
[47] The Plaintiff asserts that the natural and ordinary meaning of the words, as understood by the ordinary reasonable person, is as follows:
(a) the Plaintiff was incompetent in his work and/or profession and/or trade and/or business and/or services provided;
(b) the Plaintiff was not a fit and proper person to be appointed as the representative of a FI to conduct regulated activities under the FAA and the SFA;
(c) the Plaintiff was not a person of credit and integrity; and
(d) the Plaintiff was an incompetent and unprofessional manager and supervisor.
[48] With reference to the First and Second Statements on Compliance, the Plaintiff argues that the Defendant had made incomplete disclosure of the investigations conducted on the 14 advisers in Ramesh Organisation. In particular, the Defendant failed to state that the advisers in question were not under the Plaintiff’s direct supervision and that the Plaintiff had not been held personally responsible for these advisers. The Plaintiff submits that this information was of especial importance given that these matters subsequently escalated into police investigations.
[49] In relation to the First and Second Statements on Persistency, the Plaintiff argues that the Defendant had, throughout his tenure, relied on the 19-month persistency ratio for the purpose of assessing his performance and calculating his bonuses. In this regard, the Plaintiff gave evidence that he had not been informed at any time during his tenure of the Defendant’s intended assessment of its financial advisers’ performance based on the 13-month persistency ratio. To this end, the Defendant’s reference to the Plaintiff’s 13-month regular premium persistency ratio in its response to the reference check requests would lead the ordinary reasonable man to think that the Plaintiff had been incompetent in his work.
[50] In addition, it is also the Plaintiff’s case that the Defendant agreed to assess Ramesh Organisation’s performance based only on regular premium policies and not single premium policies for the purpose of the Defendant’s top awards. The Plaintiff submits that this agreement was not upheld by the Defendant.
[51] In response to the Defendant’s reliance on the defence of justification, the Plaintiff contends that the Defendant’s proof of the truth in the words is insufficient to establish the defence as it does not meet the sting of the charge in the allegedly defamatory statements. Furthermore, the Defendant’s incomplete disclosure and exclusive focus on the adverse points in its responses were said to have distorted the facts such that the defence of justification must necessarily fail. In particular, the Plaintiff points to the Defendant’s failure to explain the context behind Ramesh Organisation’s low single premium persistency ratio and the investigations conducted on the 14 advisers of the organisation. The Plaintiff also asserts that the Defendant did not have any factual basis for referring to the time period of “2008 to 2011” in the First and Second Statements on Compliance as the Defendant had admitted that there were no investigations in 2011.
[52] In so far as the defence of qualified privilege is concerned, the Plaintiff simply made a bare denial of the defence. He explained that the privilege, even if established on the facts of the case, was necessarily lost because the Defendant had no honest belief in the truth of the words and had used the occasion for improper purposes. In other words, the Plaintiff claims that on the facts, the defence of qualified privilege is defeated by the Defendant’s malice.
[53] The Plaintiff contends that the Defendant had no honest belief in the truth of its words on the basis that the Defendant had chosen to be economical with the truth. The Defendant failed to provide the context of the Plaintiff’s low single premium persistency ratios and the investigations conducted into the 14 advisers in Ramesh Organisation.
[54] With regard to his second claim that the Defendant was motivated by improper purposes, the Plaintiff argues that in making the defamatory statements, the Defendant intended to prevent him from joining its competitors and ultimately drive him out of the financial advisory services industry. The Plaintiff also submits that the Defendant’s intention was to send a warning to all of the Defendant’s financial services directors to make them think twice about leaving the Defendant.
[55] The Plaintiff refers to the Defendant’s conduct to support his argument that the latter was motivated by malice. First, the Plaintiff points to the Defendant’s adoption of the 13-month persistency ratio in its response to the reference check requests. Notably, the 13-month persistency ratio was calculated based on a time period after the advisers in Ramesh Organisation, including the Plaintiff, had left the Defendant. Furthermore, in Mr Williams’ letter to Prudential’s CEO dated 14 October 2011, it was said that the former explained the 13-month persistency ratio by drawing up a table of policies issued in 2005 which were attributed to the Plaintiff.
[56] Second, the Plaintiff highlights Mr Ng’s testimony that the Defendant’s usual practice was not to reveal the details of investigations and names of advisers who were not the subject of the reference check request. On this point, the Plaintiff referred to a similar reference check provided by the Defendant for another financial adviser who had left the Defendant, Mr Philip Tan. In the reference check provided by the Defendant on Mr Philip Tan, the Defendant had only released information that solely pertained to him. The Plaintiff submits that the contrast reveals double standards and is evidence of malice.
[57] Third, the Plaintiff also refers to the usage of strong language in Mr Williams’ internal email to Mr Ng dated 9 March 2012 (see [32] above) as evidence of the Defendant’s, and specifically Mr Williams’, deliberate emphasis on the adverse aspects of the Plaintiff’s tenure with the Defendant. In this regard, the Plaintiff points out that the Defendant failed to furnish any explanation for its choice of language in that email. Indeed, the strong stance relayed by the Defendant’s Mr Williams may have been the basis upon which Mr Ng had crafted his response to MAS (see [34] and [35] above). To this end, the Plaintiff highlights that the Defendant had failed to inform MAS of the following material facts:
(a) First, most of the advisers in Ramesh Organisation had left the Defendant in April and May 2011.
(b) Second, the Defendant had not assigned any agent to attend to the clients of these ex-advisers.
According to the Plaintiff, these facts were crucial in explaining the low persistency ratio at the time when the policies under Ramesh Organisation were due for renewal.
[58] Furthermore, the Plaintiff avers that the Defendant’s inclusion of the fact that the Plaintiff owed the Defendant monies in its response to Prudential’s reference check request is evidence of the latter’s intention to create an impression that the Plaintiff was a person of poor credit and integrity.
[59] The Plaintiff further submits that the defence of consent, waiver or estoppel based on the written authorisations given by the Plaintiff has not been made out on the facts. First, he asserts that the Defendant could not obtain a benefit under the written authorisations because it was not the intended recipient. On this basis, reliance on the phrase “release all persons from liability” in the written authorisations does not absolve the Defendant from liability because the Plaintiff had not consented to the words being published. Furthermore, it is asserted that the phrase was unclear in scope. To this end, it is ambiguous whether the phrase covers liability in respect of defamation, malicious falsehood or negligence.
[60] In respect of the claim in malicious falsehood, the Plaintiff essentially relies on the same set of facts described above. In particular, the Plaintiff relies on the Defendant’s series of conduct allegedly actuated by malice (see [55] to [58] above).
[61] To support the claim in negligence, the Plaintiff relies heavily on the English decision of Spring v Guardian Assurance Plc and others [1995] 2 AC 296 (“Spring v Guardian”) to argue that the existence of causes of action in defamation and malicious falsehood does not prevent the recognition of a duty of care in negligence in respect of the making of a false statement. This is said to have been cited in the local decision of Centre for Creative Leadership (CCL) Pte Ltd v Byrne Roger Peter and others [2013] 2 SLR 193 (“CCL v Byrne”), notwithstanding the fact that the principles in Spring v Guardian were not considered as the legal issues therein were different from that in CCL v Byrne.
[62] In asserting the presence of a duty of care on the part of the Defendant, the Plaintiff reiterates the reasons set out above (see [59] above) in support of his position that the duty was not negated by the written authorisations signed by him. After his resignation, the Defendant was clearly aware that its responses to reference checks would have a critical impact on the Plaintiff’s employability or job prospects in the insurance industry. Yet, the Defendant’s responses showed a blatant failure to exercise due care as incomplete information was given in reply to various aspects of the reference checks. For instance, the Defendant’s response regarding investigations of the Plaintiff did not state that the complaint was found to be unsubstantiated and that no follow-up action was eventually taken. Furthermore, the 13-month persistency ratio was said to have been calculated for the time period after the Plaintiff had already left the Defendant.
[63] As a result of the Defendant’s actions, the Plaintiff has claimed that he was unable to be employed or engaged by either Prudential or Tokio Marine and consequently suffered, amongst others, the following damages:
(a) loss of an opportunity to earn a 24-month financial package of at least $2.2 million purportedly offered by Prudential;
(b) loss of a sign-on fee of $20,000 purportedly offered by Tokio Marine; and
(c) loss of remuneration he had earned in 2010 up till his last day with the Defendant on 12 May 2011.
In total, the Plaintiff’s claims amount to $1,702,250.87. With a view to being gainfully employed in the insurance industry again, the Plaintiff also prays that the Defendant be ordered to withdraw its statements made to MAS.
Defendant’s arguments
[64] In its pleadings, the Defendant has relied on the defences of consent, justification and qualified privilege.
[65] With regard to the defence of consent, the Defendant relies on the Plaintiff’s written authorisations enclosed in the reference check requests to support its position that the Plaintiff had consented to the Defendant’s release of information relating to his previous employment to Prudential and Tokio Marine. In the written authorisations, the express reference to the phrase “release from liability” meant that the Plaintiff had waived his right to bring a claim in defamation against the Defendant in relation to the latter’s responses to Prudential’s and Tokio Marine’s reference check requests.
[66] Notably, the Defendant admits to the publication of the First Statements on Persistency and Compliance to Prudential, and the Second Statements on Persistency and Compliance to Tokio Marine. The Defendant also admits that it passed the First Statements on Persistency and Compliance to MAS in 2011. However, the Defendant disputes the Plaintiff’s assertion that the Second Statements on Persistency were published or caused to be published by the Defendant to either Prudential or MAS. The Defendant’s position is that the Second Statements on Persistency Issues were only published to Tokio Marine.
[67] With regard to the defence of justification, the Defendant argues that the natural and ordinary meaning of the First and Second Statements on Persistency and Compliance ought to be understood to mean that the Plaintiff was not an effective leader and supervisor of his advisers in Ramesh Organisation.
[68] To this end, the Defendant submits that a distinction ought to be drawn between comments on the Plaintiff’s managerial skills as opposed to his personal conduct. A reasonable reader would not have understood the First and Second Statements on Persistency and Compliance to indicate anything adverse about the Plaintiff’s honesty, integrity, or his personal competency as a representative of a FI. Instead, it is apparent that the Defendant’s statements relate only to the Plaintiff’s managerial skills. Moreover, the Defendant’s answers indicated that no personal misconduct report of the Plaintiff had been filed by the Defendant with MAS.
[69] In support of its interpretation of the First and Second Statements on Persistency and Compliance, the Defendant contends that the natural and ordinary meaning of the statements must be determined in the light of the circumstances and manner of publication. The Defendant asserts that its multiple responses to both Prudential and Tokio Marine should be taken into account in determining the natural and ordinary meaning of the First and Second Statements on Persistency and Compliance because the subsequent responses were given in “close temporal proximity” to the said statements.
[70] In particular, the Defendant submits that the alleged defamatory statements must be interpreted in the light of the clarificatory emails the Defendant sent out shortly thereafter. In its subsequent email to Prudential on 9 June 2011, the Defendant clarified its responses to Prudential’s reference check requests by stating that:
In its email to Tokio Marine on 21 March 2012, it was clarified as follows:
[71] Taking the above interpretation of the First and Second Statements on Persistency and Compliance, the Defendant submits that its comments on the Defendant’s managerial skills are justified by the following facts which the Plaintiff admitted to during cross-examination:
(a) The organisation’s 13-month persistency ratio was low at 39.6% as at 30 April 2011 and 13 May 2011.
(b) Five out of 14 advisers in Ramesh Organisation were disciplined by the Defendant for issues such as improper sales practices and unprofessional conduct.
(c) Three of the 14 advisers were referred to the police for further investigations.
[72] Thus, it is the Defendant’s position that the First and Second Statements on Persistency and Compliance, read together with its subsequent emails, are true and not misleading. In response to the allegation that the Defendant had failed to provide the context, the Defendant explained that it was not in a position to provide details of the investigation outcomes in respect of the other advisers in Ramesh Organisation because the Plaintiff was the only subject of the reference check. Further, no written authorisation had been provided by the other advisers.
[73] With regard to the defence of qualified privilege, the Defendant argues that it sent the MAS Emails in discharge of its duty as an MAS-regulated entity and a member of the LIA. In this regard, the Defendant would be expected to participate in the Industry Reference Check System and RNF. It is emphasised that the Plaintiff accepted, upon further questioning, that the Industry Reference Check System was at least “the first step” towards the ultimate objective of enabling FIs to be satisfied that their prospective representatives satisfy the Guidelines on Fit and Proper Criteria.
[74] Further, the Defendant argues that it was obligated to furnish information to MAS upon the latter’s request pursuant to s 33 of the Insurance Act (Cap 142, 2002 Rev Ed) (“IA”). In addition, the Defendant was also bound by MAS Notice 306 (“MAS Notice 306”) on “Market Conduct Standards For Life Insurers Providing Financial Advisory Services As Defined Under the Financial Advisers Act”. A copy of the MAS Notice 306 was put before me on 7 January 2014 by counsel for the Defendant, Mr K Muralidharan Pillai. In particular, the Defendant’s duties include ensuring that its representatives comply with the FAA and the IA, and lodging information on its provision of financial advisory services annually. To this end, it was argued that the Defendant’s communications with MAS were protected by privilege in so far as it had a duty to provide MAS information about the Plaintiff for the MAS’s assessment of whether the Plaintiff met the Guidelines on Fit and Proper Criteria.
[75] With respect to the Defendant’s responses to both Tokio Marine and Prudential, it is contended that the latter two, being fellow MAS-regulated entities and members of the LIA, share with the Defendant a common or mutual interest in the subject matter of the communications. The First and Second Statements on Persistency and Compliance would therefore be covered by qualified privilege. Notably, it was pointed out that employment references are one of the most common examples of qualified privilege. In addition, the Defendant also refers to s 33(1) of the IA and MAS Notice 306 in support of the duty-interest relationship that it claims to have with Prudential and Tokio Marine in its communication of the First and Second Statements on Persistency and Compliance.
[76] Indeed, it is noted that when the Plaintiff applied for a position with the Defendant in 2005, the Defendant had also sought a reference check from the Plaintiff’s then former FI, Manulife Financial. The reference check received by the Defendant included information on persistency and compliance. Under cross-examination, the Plaintiff agreed that information on persistency had a bearing on competency, and information on compliance would include matters such as whether an adviser had been subject to internal investigation, disciplinary proceedings or was referred to the police.
[77] It is also the Defendant’s position that its actions were not actuated by malice. First, the Defendant asserts that it had, in fact, informed the Plaintiff and other advisers of its reliance on the 13-month persistency ratio at a workshop conducted on 8 March 2011. To this end, the Defendant was therefore entitled to rely on and provide both Prudential and Tokio Marine with the 13-month persistency ratios in its responses to the reference check requests.
[78] Second, the Defendant argues that its provision of additional information in relation to the investigations conducted on several advisers in Ramesh Organisation was not actuated by malice. The information is relevant to Prudential and Tokio Marine’s assessment of the Plaintiff’s competency as a Senior FSD. In this regard, the Defendant asserts that brief details of the investigations, such as whether disciplinary action was taken and whether referrals were made to the police, were sufficient to enable the requesting FI to conduct its own checks and enquiries. The Defendant justifies its omission to provide details on the outcome of the three cases referred to the police on the ground that none of the three advisers were the subject of the reference check request, and that it did not have written authorisation from the three advisers to disclose such information.
[79] In response to the Plaintiff’s assertion that the Defendant’s conduct was actuated by malice, in particular Mr Williams’ letter to Prudential dated 14 October 2011 on the high number of lapsed or surrendered policies, the Defendant asserts that it is “very standard practice” for a CEO of an insurance company to write to the CEO of another insurance company concerning an FSD to highlight issues such as “suspected twisting of policies”. In support of this, the Defendant referred to MAS Notice FAA-N16 on Notice on Recommendations on Investment Products, which indicates that a financial adviser shall not make recommendations on switching of designated investment products.
[80] As for Mr Williams’ email to the compliance manager, Mr Ng, on 9 March 2012, stating that the Defendant would need to be “stronger” in its position, the Defendant explained that its CEO was merely acting in accordance with a sense of duty or in bona fide protection of the Defendant’s own legitimate interests. Furthermore, it has been highlighted that the Plaintiff agreed that “the only party who profits in relation to premature lapsing of [regular premium] policies would be the advisers, and not either [the Defendant] or the policyholders”.
[81] Notwithstanding the defences above, the Defendant further argues that the Defendant’s publication of the First and Second Statements on Persistency and Compliance had not caused the Plaintiff to suffer the alleged losses. There was a break in the chain of causation when the insurance companies decided not to engage the Plaintiff. First, notwithstanding the Defendant’s response to Prudential’s reference check request, the latter had, in fact, submitted an RNF application to MAS on behalf of the Plaintiff. This indicates that Prudential had conducted its internal review and checks, and assessed that the Plaintiff satisfied the Guidelines on Fit and Proper Criteria before deciding to make an RNF application on his behalf. To this end, the intervening act that broke the chain of causation was Prudential’s eventual decision to withdraw the RNF application.
[82] Second, it was also the case that Tokio Marine had made its own decision not to employ the Plaintiff as its representative. In this regard, the Defendant relied on the answers given by Tokio Marine’s Ms Donna Tan, the Section Head of the Compliance Department, during cross-examination that such applications were actually decided by the head of the agency of the distribution department and that there were many factors involved apart from the reference check.
[83] In response to the Plaintiff’s claim that the Defendant’s words were responsible for him not being able to find a reasonable alternative position despite his efforts, and for his general lack of employability in the industry, the Defendant asserts that MAS’ decision whether to appoint an individual under the RNF was based on a basket of considerations, and not solely on his or her ex-employer’s reference check. As the regulator, MAS makes its own decisions and investigations in respect of the RNF.
[84] In response to the Plaintiff’s comparison between his case and that of another insurance adviser (who had left the Defendant), the Defendant pointed out that the cases were distinguishable. In the case of the other adviser, a substantial period of time had passed since the time when there were questions about his suitability as an insurance adviser. In that case, the adviser (a former adviser in Ramesh Organisation) had applied for a position at Prudential at about the same time as the Plaintiff. As MAS took a long time to process his application, the adviser withdrew his application sometime in January 2012 and left the industry. Thereafter, in May 2013, he was successful in securing a position as an adviser at another insurance company in Singapore. The Defendant submits that the other adviser was able to secure employment as a financial adviser again at least in part because a substantial period of time had passed since January 2012, when there had been questions about his suitability as a financial adviser. The Defendant also points out that under the MAS Revised Guideline FSG-G01, “[t]he significance of a relevant person failing to satisfy MAS that it or her meets a specific criteria depends on … the passage of time since the failure by the relevant person to meet the specific criteria”.
[85] In response to the Plaintiff’s claim in the tort of malicious falsehood, the Defendant argues that the First and Second Statements on Persistency and Compliance were true. In addition, the Defendant repeats its arguments on the absence of malice in its conduct. With regard to the last element of special damages, the Defendant relies on its position that the intervening acts of third parties had resulted in a break in the chain of causation. The Defendant further submits that the Plaintiff would not be able to discharge his burden of proving the existence of special damages as a direct and natural consequence of the Defendant’s publication of the First and Second Statements on Persistency and Compliance.
[86] Lastly, with respect to the Plaintiff’s claim in negligence, the Defendant quoted a number of English and local authorities in contending that the English decision of Spring v Guardian is inapplicable in Singapore. The Defendant examined the local case law on negligence and submits that the position set out in Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR(R) 100 (“Spandeck”) is the applicable law governing whether a duty of care exists. In applying Spandeck to the facts in the present case, the Defendant argues that a duty of care cannot arise in the light of the policy considerations such as the Plaintiff’s written authorisations in respect of the requests by Prudential and Tokio Marine. Furthermore, vis-à-vis MAS, the Defendant relies on the objectives of the Industry Reference Check System and the RNF in support of its position that a duty of care could not have arisen in the present case.
[87] Further, even if a duty of care were to exist, the Defendant denies that it breached its duty to the Plaintiff based on its submissions on the defences of justification and qualified privilege, and the absence of malice in its conduct.
[88] The Defendant also denies the existence of any damage or loss suffered by the Plaintiff as a result of any alleged malicious falsehood. The Defendant relies on its submissions on causation that were made in relation to the Plaintiff’s defamation claim. In particular, with respect to the Plaintiff’s claims for loss of the remuneration packages with Prudential and Tokio Marine, the Defendant pointed out that the Plaintiff had failed to discharge his burden of proof given the absence of written confirmation of the packages. The point however remains that the Plaintiff’s claim is that he has lost the opportunity to gain re-employment in the insurance industry. With regard to the Plaintiff’s claim of being unable to find reasonable alternative employment despite his efforts, the Defendant pointed to evidence that after his departure from the Defendant, the Plaintiff had been engaged in running a vegetarian restaurant known as Tulasi Vegetarian & Café Pte Ltd. In view of the above, the Defendant argued that the Plaintiff was not entitled to claim aggravated damages in respect of his alleged claims.
The decision
[89] I will now deal with each of the Plaintiff’s claims in turn below.
Defamation
[90] To succeed in an action for defamation, the Plaintiff must prove that (a) the Defendant published the words, (b) the words identify the Plaintiff as the person defamed, and (c) the words are defamatory (see Lee Hsien Loong v Review Publishing Co Ltd and another and another suit [2009] 1 SLR(R) 177 at [23] (“Review Publishing”)). In the present case, both elements (a) and (b) are not disputed. The only contention relates to the issue of whether the words complained of are defamatory of the Plaintiff. In particular, the parties disagree on the meaning that should be ascribed to the First and Second Statements on Persistency and Compliance.
[91] I shall thus first consider whether the statements are defamatory. Thereafter, I will consider the defences the Defendant raises, namely, consent, estoppel or waiver, justification and qualified privilege.
Are the statements defamatory?
[92] There is no one all-encompassing test that exhaustively sets out what is “defamatory”. Nevertheless, it is well-established that the allegedly defamatory statement should relate to the reputation of the person so defamed (see Gary Chan & Lee Pey Woan, The Law of Torts in Singapore (Academy Publishing, 2011) (“The Law of Torts in Singapore”) at para 12.011). In this regard, the commonly used test is whether the words tend to lower the Plaintiff in the estimation of right-thinking members of society generally (see Aaron Anne Joseph and others v Cheong Yip Seng and others [1996] 1 SLR(R) 258 (“Aaron”), adopting the views of Lord Atkin in Sim v Stretch (1936) 52 TLR 669; Review Publishing; Macquarie Corporate Telecommunications Pte Ltd v Phoenix Communications Pte Ltd and another [2004] 1 SLR(R) 463 at [19]).
[93] The circumstances in which a person’s reputation may be impugned in the eyes of members of the society are varied. In particular, in ABZ v Singapore Press Holdings Ltd [2009] 4 SLR(R) 648 at [31], it was held that a statement that would ordinarily lead reasonable people to the opinion that the plaintiff had conducted its business in a dishonest, improper or inefficient manner would be defamatory of the plaintiff.
[94] The test for determining if a statement is defamatory is an objective one. It is based on the view of the “ordinary reasonable person” who is not unduly suspicious or avid for scandal (see Microsoft Corp and others v SM Summit Holdings Ltd and another and other appeals [1999] 3 SLR(R) 465 at [53], applied in Oei Hong Leong v Ban Song Long David and others [2005] 3 SLR(R) 608 at [22]). This court considers the general knowledge possessed by the ordinary man, which would include facts and circumstances that are well known to ordinary members of the public and which are relevant to the publication (see Chiam See Tong v Ling How Doong and others [1996] 3 SLR(R) 942 at [47]). That said, the natural and ordinary meaning of a statement may include inferences that can reasonably be drawn from the publication (see Aaron at [41]).
[95] The meaning of the words intended by the publisher is irrelevant to the inquiry (see E Hulton & Co v Jones [1910] AC 20 at 23). As succinctly summarised in Gatley on Libel and Slander (Professor Alastair Mullis & Richard Parkes QC eds) (Sweet & Maxwell, 12th Ed, 2013) (“Gatley”) at para 3.16, the words complained of may be defamatory either in their natural and ordinary meaning or by way of an innuendo.
[96] In the latter situation (ie, innuendo), the claimant has to show that the words are defamatory by reason of some special facts outside the statement itself and known to those to whom it was published, and that evidence is admissible as to the sense in which they understood it (see Gatley at para 3.16).
[97] In this instance, the Plaintiff is relying only on the natural and ordinary meaning of the Defendant’s First and Second Statements on Persistency and Compliance.
[98] For convenience, I set out again the Plaintiff’s pleaded position on the ordinary and natural meaning of the Defendant’s words. The Plaintiff claims that the First and Second Statements on Persistency and Compliance possess the following meaning:
(a) The Plaintiff was incompetent in his work and/or profession and/or trade and/or business and/or services provided.
(b) The Plaintiff was not a fit and proper person to be appointed as the representative of a FI to conduct regulated activities under the FAA and the SFA.
(c) The Plaintiff was not a person of credit and integrity.
(d) The Plaintiff was an incompetent and unprofessional manager and supervisor.
[99] Whilst the Plaintiff’s pleadings could have been much clearer as to the precise words in which complaint is made, it appears that the ordinary and natural meaning (ie, the defamatory sting) complained of is based essentially on the Defendant’s statement in respect of his persistency ratio coupled with the statement that he had been personally investigated on compliance issues.
[100] That said, I note that in the MAS Emails, express reference was also made to the “overly sale orientated culture” of Ramesh Organisation, how it had “sailed very close to the wind” and how it had “crossed the line”. In short, the Defendant appears to have expressed the view that the Plaintiff’s problem with persistency suggests that consumers may have been misguided or ill-advised. Nevertheless, as noted above, these phrases have not been pleaded as the relevant defamatory phrases. I thus confine my subsequent analysis to whether the First and Second Statements on Persistency, as well as the First and Second Statements on Compliance, are defamatory.
Statements on Persistency
[101] From the Defendant’s statements regarding the Plaintiff’s “13mth Regular Premium” persistency ratio of 39.6% and “19thmth Single Premium” persistency ratio of 43% as at 30 April 2011, the Plaintiff submits that an “ordinary, reasonable person” would understand the Plaintiff to be “incompetent in his work”.
[102] In my view, it is unlikely that an ordinary reasonable reader would be able to make sense of the First and Second Statements on Persistency such as to infer that the Plaintiff is incompetent at his work. It is clear that the comprehension of the figures on persistency ratios will require a certain degree of special background knowledge. Without information on the calculation process and the industry norms, an ordinary reasonable man is unlikely to know what is considered a low persistency ratio. It could very well be that a 90% persistency ratio would be considered abysmal by industry standards.
[103] Much will of course depend on who is the ordinary or reasonable person to whom the statement is assumed to have been made. This in turn depends on whether the Plaintiff is relying on the ordinary and natural meaning of the words, or an innuendo meaning that requires knowledge of special facts. The Plaintiff has pleaded that the words are defamatory in their ordinary and natural meaning. This means the Plaintiff must argue, as he has, that an ordinary, reasonable person would understand the “low” persistency ratio figure as implying incompetence. No claim has been raised based on innuendo; special knowledge therefore cannot be imputed to the ordinary, reasonable person.
[104] Moreover, it is irrelevant at this stage whether the actual recipient understood the defamatory meaning. As stated in Gatley at para 3.16, “[i]f words convey a defamatory imputation to those to whom they were published, but would not have done so to the hypothetical reasonable person in that position, they are not defamatory”.
[105] A reasonable person who has knowledge of the insurance industry, and the regulatory and commercial concerns in respect of persistency and sale of policies may agree that the natural meaning of the First and Second Statements on Persistency reflect poorly on the Plaintiff’s competence. However, without special knowledge of the extrinsic facts (eg, the facts concerning the standards and practices of the insurance industry), what is the ordinary reader to make of a statement that the “single premium persistency is low” or that the “regular premium persistency ratio is 39.6%”? Indeed, I would point out that the First and Second Persistency Statements simply set out the relevant percentages without even describing these figures as being “low”.
[106] Furthermore, there is much to be said about the absence of a common industry standard on persistency ratios. First, different insurance companies employ differing methodologies in calculating persistency ratios. Second, there is no standard time period for the calculation of persistency ratios – some insurance companies rely on a 13-month period whereas others consider a longer period of 19 months. Third, the type of products relied upon in the calculation of persistency ratios may differ. Some calculations may be based solely on single or regular premium policies, while other calculations may be based on a mix of both types of policies. For example, the Defendant calculates its 19-month persistency ratios on the basis of a mix of both policies.
[107] To this end, a persistency ratio of 70% may be acceptable on one measure while a persistency ratio of 85% may be unacceptably low on another. In fact, a large part of the Plaintiff’s complaint was that the Defendant used a 13-month persistency ratio as opposed to a 19-month persistency ratio. This alone suggests that there are significant differences in the methods of calculation. An ordinary, reasonable person cannot be expected to appreciate and understand the figures.
[108] On the basis of the above discussion, I find that the First and Second Persistency Statements are not defamatory. I emphasise that the Plaintiff has not raised any claim of innuendo in respect of the words complained of. In Brian Neill et al, Duncan and Neill on Defamation (LexisNexis, 3rd Ed, 2009) (“Duncan and Neill”), the learned authors state (at para 5.21) that the natural and ordinary meaning of words complained of must be decided by reference to the ordinary reasonable reader:
[109] Therefore, while it may be argued that a person with “special knowledge possessed not by the general public but by a limited number of people” (Duncan and Neill at para 5.33) would have understood the First and Second Persistency Statements to be defamatory in meaning, I cannot find defamation on this ground because innuendo meaning was not specifically pleaded by the Plaintiff. I am limited by the pleadings to considering the perspective of the ordinary, reasonable person.
[110] In the event that I am wrong, and the Plaintiff is entitled to rely on the knowledge of a reasonable person working in the insurance industry (even without it being specifically pleaded), I would have come to the view that the words in the persistency statements are capable of bearing the defamatory sting of incompetence that has been contended for by the Plaintiff. Both parties agree that the figures reflect a rather poor performance to people familiar with the insurance industry. Even if the First and Second Statements on Persistency refer to Ramesh Organisation as opposed to the Plaintiff specifically, it is clear that the Plaintiff is responsible for the agents under Ramesh Organisation and that his ability to manage the agents is therefore called into question.
[111] Before leaving the complaint made in respect of persistency, I note that the Defendant accepts that it had provided MAS (in response to queries from MAS) with a copy of the First Statements on Persistency and Compliance. As mentioned earlier, the MAS Emails also set out statements explaining the concerns of the Defendant in response to queries from MAS.
[112] In the email sent to MAS on 21 October 2011, it was said that the reason for allowing the Plaintiff to resign was because the Defendant suspected that persistency was going to be “poor”. This was followed by another email dated 9 November 2011, when express reference was made to the overly sales orientated culture of Ramesh Organisation and the possibility of “gaming of compensation”, “sail[ing] very close to the wind”, and “cross[ing] the line”.
[113] In respect of these statements (especially those in the email dated 9 November 2011), it may be argued that an ordinary reasonable person (even one who is not acquainted with the insurance industry) would understand that the competence and integrity of the Plaintiff was being called into question. The Plaintiff has not, however, pleaded these words (and phrases) as part of the words or statements said to be defamatory.
Statements on Compliance
[114] The Plaintiff submits that the First and Second Statements on Compliance naturally and ordinarily give rise to the understanding that Plaintiff was guilty of wrongdoing during the period from 2008 to 2011. At the very least, the Plaintiff submits that the statements imply there were reasonable grounds for suspecting wrongdoing on the part of the Plaintiff.
[115] The key question that arises is whether a statement that a person is under investigation implies guilt. This is a question of fact. It depends on how the ordinary, reasonable person would understand the words in question. Specifically, the court must determine whether the ordinary person would understand the Defendant’s statements to mean that the Plaintiff is guilty of wrongdoing, or that there is some reasonable or good basis for suspecting some form of wrongdoing. Much will depend on the context in which the statement was made. As in De Souza Tay & Goh (suing as a firm) v Singapore Press Holdings Ltd and another suit [2001] 2 SLR(R) 201, the spectre of liability for defamation (defences aside) will arise if on the facts, the ordinary reader will likely take the view that there is a reasonable basis for the investigation, or even worse, that the person is guilty.
[116] In the present case, the Defendant made the following statements in the First and Second Statements on Compliance:
[117] Nothing was said about what the Plaintiff was investigated for. Indeed, little was said about the Plaintiff specifically. Looking at the statement as a whole, I am not satisfied that an ordinary reader would form the view that there were good or reasonable grounds for the investigation into the Plaintiff, or that the Plaintiff himself was actually guilty of some misconduct. I come to this conclusion even without taking into account the Defendant’s subsequent clarifications on the result of the investigation. Indeed, in my view, an ordinary, reasonable person would only understand the statements to mean that the Plaintiff was investigated for compliance issues, and hence was probably suspected of some misconduct (of an uncertain severity).
[118] However, that is not the end of the matter. Imputing guilt on the Plaintiff is not the only way that the statement could be defamatory. As the learned authors in Gatley point out (at para 2.28), the statement that someone is suspected of an offence (without necessarily implying guilt) may be defamatory in its own right. Similarly, it was observed in Alastair Mullis and Cameron Doley MA, Carter-Ruck on Libel and Privacy (LexisNexis, 6th Ed, 2010) (“Carter-Ruck”) at para 4.15 that it may even be defamatory to say that a person has been charged, suspected, or even acquitted of an offence if the imputation is that the acquittal was wrong. The type and seriousness of offence may also be relevant.
[119] In the present case, while there is no imputation of actual wrongdoing by the Plaintiff personally, the statement that 14 advisers under Ramesh Organisation were investigated (including Ramesh) for compliance issues is, in my view, defamatory. To be clear, I find that the defamatory sting of the statements lies in the very assertion that there were investigations into the Plaintiff and his team, and hence that there was some suspected misconduct. The defamatory sting does not lie in any imputation of actual wrongdoing or guilt on the Plaintiff’s part. In this regard, I agree with the Plaintiff that the First and Second Statements on Compliance suggest the following:
(a) The Plaintiff had been investigated in respect of a complaint in his work and/or profession and/or trade and/or business and/or services provided.
(b) The Plaintiff was an incompetent manager and supervisor.
[120] In response, the Defendant submits that the natural and ordinary meaning of the First and Second Statements on Compliance is that the Plaintiff is not an effective leader and supervisor of his advisers in Ramesh Organisation. These are not statements that go towards his personal conduct. It may be said that the distinction the Defendant attempts to draw is a little contrived. That said, even if the statement is properly read as solely concerning the Plaintiff’s ability as a leader and supervisor, this is still defamatory if it carries the sting that he is an incompetent or poor leader. To be clear, a bare statement that an agent or employee had been investigated for an unspecifed customer complaint on its own may not even be defamatory. But, in the present case, the compliance statements go further and suggest a degree of lack of supervision and control on the part of the Plaintiff. On the whole, I am satisfied that the statements on compliance are defamatory of the Plaintiff.
[121] At this juncture, it is pertinent to address the Defendant’s argument that in determining whether the First and Second Statements on Compliance are defamatory, the court must read the statements together with the Defendant’s subsequent emails to Prudential and Tokio Marine due to their close proximity in time. The Defendant’s case is that the subsequent responses would neutralise or take away the sting of the defamation as found in the First and Second Statements on Compliance. This is because the subsequent responses very clearly clarify that the Plaintiff was not disciplined and that the complaint against the Plaintiff was not proceeded with due to inconclusive evidence.
[122] In making this submission, the Defendant is relying on the principle that the natural and ordinary meaning of statements must generally be considered in the light of the context in which the statements were made. The question, however, is what ought to form part of the context in which a statement is made. In particular, can events that happen after the statement is made form part of the context for understanding the statement? In this regard, it is useful to refer to the decision of the learned Chan Seng Onn JC (as he then was) in Arul Chandran v Chew Chin Aik Victor JP [2000] SGHC 111 (“Arul Chandran”) at [118]–[119]:
[123] In addition, Gatley (at para 3.31) identifies various circumstances under which a publication would be taken as a whole. These include instances where publications were referred to as a series or segments (see eg, Australian Broadcasting Corp v Obeid (2006) 66 NSWLR 605 (“Obeid”), though in that case, the court found that on the facts, it would not consider the later parts of the broadcast in determining whether the earlier segment was defamatory). Temporal proximity is a relevant factor in deciding whether various publications should be interpreted in the light of each other: see Obeid and Brown v Marron & Anor [2001] WASC 100 (“Marron”).
[124] In Obeid, the defendant broadcasted allegations of corruption against the claimant at 9.05 am. Between 10.05 am and 11.50 am, the defendant then broadcasted the claimant’s denials of those allegations. The court held that the publication ought not to be taken as a whole given that the news was not “breaking news” and it was unlikely that many people would have listened to the whole programme. This can be contrasted with Marron, another Australian decision where the court held that the qualifications made by the defendant with officials of a golf club some two to four days after his letter opposing the admission of the claimant as a member was of close temporal proximity such that it would form part of the context in ascertaining whether the words complained of were defamatory.
[125] In my view, the legal principles that govern what forms the context of a publication have been succinctly laid down by the court in Marron at [56]:
[126] Based on the legal principles above, the Defendant’s subsequent responses to the queries from Prudential and Tokio Marine cannot reasonably be construed as forming part of the context against which the First and Second Statements on Compliance are to be interpreted. As the court held in Arul Chandran at [119], a subsequent publication that removes the sting of an earlier publication will not help the defendants if the earlier publication on its own is defamatory. Perhaps, there may be exceptions to the rule (as in Marron). However, in my view, such exceptions are likely to be few and far between.
[127] Moreover, in the context of employment references, prospective employers may not always ask for further clarification following on from the response of an ex-employer to a reference check request. The need to follow up on a response to a reference check request differs based on a multitude of factors, such as the potential employer’s subjective assessment of the sufficiency of the ex-employer’s reply. It is possible that a potential employer receiving the First and Second Statements on Compliance may not have followed up on the matter with more queries to the Defendant. It is therefore unlikely that a reasonable person would have regarded the subsequent responses to be “so closely connected” to the First and Second Statements on Compliance as to form part of the context.
[128] Instead, the First and Second Statements on Compliance are likely to be construed as separate, self-contained publications. To this end, a reasonable reader construing the First and Second Statements on Compliance would likely have understood the words to mean (at the very least) that the Plaintiff’s competence as a supervisor had been questioned. In addition, the statement that the Plaintiff had also been investigated for (an unspecified) compliance matter is defamatory even though there is no necessary implication of actual guilt on the part of the Plaintiff. To be clear, the Plaintiff was cleared of any wrongdoing. This was not made known, however, to a reasonable reader of the First and Second Statements on Compliance at the time of its publication.
[129] In conclusion, I find that the First and Second Statements on Persistency are not defamatory. However, I find that the First and Second Statements on Compliance are defamatory. In particular, the statements bear the following defamatory meaning:
(a) The Plaintiff had been investigated in respect of a complaint in his work and/or profession and/or trade and/or business and/or services provided.
(b) The Plaintiff was an incompetent manager and supervisor.
Consent, estoppel and waiver
[130] The Defendant pleads the defence of “consent, estoppel and waiver” to the Plaintiff’s claim for defamation. These defences are primarily based on the written authorisations signed by the Plaintiff and enclosed in the requests to the Defendant from Prudential and Tokio Marine.

The judgment continues past this page. Read the rest at eLitigation.

Ramesh s/o Krishnan v AXA Life Insurance Singapore Pte Ltd

Laws this judgment relies on

Grounds of decision

The facts

Industry reference check system

Plaintiff’s resignation from the Defendant

Plaintiff’s application to Prudential

Plaintiff’s application to Tokio Marine

Defendant’s communications with MAS

Present proceedings

The parties’ arguments

Plaintiff’s arguments

Defendant’s arguments

The decision

Defamation

Are the statements defamatory?

Statements on Persistency

Statements on Compliance

Consent, estoppel and waiver