An appeal of a defamation suit between National Feedlot Corp Sdn Bhd and its chairperson Dato’ Sri Dr Mohamed Salleh Ismail (“appellants”) against Rafizi Ramli (“respondent”) was quashed by the Federal Court, ending a nine yearlong battle.

The appeal was dismissed by a bench of three members of the apex-court led by the Chief Judge of Malaya (“CJ”), Tan Sri Azahar Mohamed, on the basis that the respondent had successfully established that the statement he made was a fair comment. As a result, the respondent could not be liable for damages for defamation.

Brief background facts
The respondent, in 2012, at a press conference made a statement alleging the appellants had used RM250 million of government loan as security to purchase eight units of commercial offices in KL Eco City.

Decision of the High Court
The High Court had ruled in favour of the appellant where Azizul Azmi Adnan JC (as he then was) opined that the statements made by the respondent were defamatory in nature as it had the effect of lowering the estimation of the appellants in the eyes of the public (“impugned statement”). As the test for the law of defamation is whether a reasonable reader by reading the impugned statement would reach a conclusion that the public funds had been dishonestly misappropriated by the appellants and that these funds were put at risk by appellants’ conduct, and if yes, then it is indeed defamatory.

After establishing the impugned statement was defamatory, the following question is whether the respondent could rely on the defence of fair comment.

The High Court held that the statement made by the respondent were statement of facts and therefore did not amount to a comment and hence, the defence of fair comment raised was not available. The documents that the respondent referred to in making the slander did not suggest any usage of the government loan as security. The basic facts hence could not stand as it did not support the inference that he had obtained it from the facts.

Decision of the Court of Appeal
The Court of Appeal then reversed the High Court’s decision. However, in reversing the said decision, the Court of Appeal relied on an issue which was never raised at the High Court by either party, namely that the letter of demand issued did not mention the fact that the loan had been withdrawn.

Decision of the Federal Court
The apex court is clear that the main contention in this appeal is whether the respondent was able to raise the defence that the statement made was a fair comment. The Federal Court held that the High Court erred in holding that the defence of fair comment was not available to the respondent.

The CJ in his grounds held that the respondent is entitled to express on a matter of public interest freely. Further, the honest opinion made by the respondent was based on certain undisputed documents. It can be said that there was no element of malice on the part of respondent, and he could not be liable for damages for defamation by making a fair comment.

Fair comment test
The Federal Court referred to the Privy Council case of Joshua Benjamin Jeyaretnam v. Goh Chok Tong [1989] 1 LNS 34; [1989] 3 MLJ 1; PC and held that the respondent had successfully established that the statement he made was a fair comment.

The CJ addressed four elements in order to establish defence of fair comment, namely:

Words must be in the form of comment/inferences
Based on the way the respondent’s statement was expressed, the CJ viewed that “the context it was set out, and the contents of the entire statement would regard them as the respondent’s comments and inferences made from the facts” – from the undisputed documents.

Comment is on a matter of public interest
The impugned statement did indeed concern matters of public interest and it had been addressed in the High Court.

Opinion/inferences must be based on true substratum of facts
The CJ opined that “a key point to note is that the impugned statement did not single out an action nor… particular conduct of the appellants per se“. Certain facts in the statement as to the ‘fixed deposits and bank loans’ were not disputed. The non-disputed facts then constituted a “sufficient substratum of facts” which the respondent referred to in reaching the conclusion made in his statement.

Whilst the High Court referred to the withdrawal of the loan, the CJ on the other hand opined that “the withdrawal of the loan confirmed that such a loan had been granted despite the lack of solid savings in the bank”.

His Lordship also emphasised that financial standing would be an important factor for any customer to seek a loan from a bank. “Therefore, a reader will draw the inference that the RM71.3 million deposit plays a part in the bank’s initial loan to purchase eight units of property,” his Lordship held.

Comment/inferences must be fair
The conclusion reached by the respondent that public funds had been misused as leverage for the Public Bank Loan based on the sufficient substratum of facts was an opinion and inference that a reasonable person would have also made.

The CJ said that in his Lordship’s view, based on the “basic facts”, the respondent’s statements were indeed opinions and inferences. The NFC project was raised in the Auditor-General’s Report in 2011 where its failures and weaknesses were highlighted as public funds were involved. Such unearthed matter attracted public attention on grounds of accountability, transparency and good governance of all those involved in managing public funds.

His Lordship also said that such matters received wide media coverage and was debated in Parliament. The CJ viewed that the respondent’s allegation that public funds were abused as leverage for getting the loan would also be an honest opinion and inference a fair-minded person would have come to in the present circumstances. “The respondent was not motivated by malice to make the impugned statement as he believed the allegations were true and made in the performance of his public duty,” his Lordship said.

In short, the CJ concluded that the respondent who had successfully established all four requisite elements for fair comment could not be liable for damages for defamation.

Short commentary
This was a good decision demonstrating the successful use of fair comment as a defence. However, it must be noted that malice would defeat the defence of fair comment, although the Federal Court did not find any element of malice on the part of the respondent in this case.

This article was written by Joseph Yuo ([email protected]) under the supervision of Chan Kheng Hoe ([email protected]).

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