Case Update

SHIPPING AND NAVIGATION

The Arktis Fighter [2001] 3 SLR 394

High Court - Admiralty in Rem No 600223 of 2001 (Summons-in-chambers No 601190 of 2001)
Choo Han Teck JC
30 May, 1, 4 June 2001

Action in rem - Arrest of vessel - Ex parte application for discovery and inspection of vessel - Setting aside or varying orders for discovery and inspection - Release of vessel against provision of letter of indemnity from P&I Club - Whether acceptable and adequate security - Determining appropriate amount of security

Belinda Ang, SC and Chan Leng Sun (Ang & Partners) for the plaintiffs.
Navinder Singh (Joseph Tan Jude Benny Anne Choo) for the defendants.

The plaintiffs sued the defendants for damage to cargo which consisted of about 1,100mts of steel plates. The vessel was arrested by the plaintiffs on 23 May 2001. On 25 May 2001, the plaintiffs obtained orders from the High Court which enabled them to inspect the vessel and gain access to various documents with liberty to make copies of them. This application was heard ex parte.

The defendants applied to set aside or, alternatively, vary the orders of court of 25 May 2001, and also for an order to release the vessel as they were not present or represented at the ex parte hearing and as the orders of 25 May 2001 ought not to have been made without notice.

The plaintiffs averred that the vessel should not be released unless the defendants provide security in the sums of US$3.8m and US$6.5m, as the potential damage to the plaintiffs was US$3.8m (being the total replacement costs of the steel plate cargo) and US$6.5m (being liquidated damages to the plaintiffs' third party contractors).

Held, varying the previous orders:
It was wrong for the application to be made on an ex parte basis and the proper course was to seek an interim injunction pending a full hearing of the application. Ex parte applications ought to be made only in cases where the rules so provide or on exceptional basis. The court saw no reason why notice of the application was not served on the defendants.

Nevertheless, given the circumstances, the plaintiffs had not acted unreasonably in acting pursuant to the orders given. Furthermore, part of the orders relating to inspection of the vessel had already been spent. The court thus varied the order of court to the extent that the defendants' solicitors were directed to preserve the documents in their possession pending discovery. The other items stated in the order of court but not in the defendants' solicitors' possession were to be preserved by the defendants themselves pending discovery.

The court felt that it was not unreasonable for the plaintiffs to ask for security of up to US$3.8m for their claim but did not feel that the security should include the liquidated damages of US$6.5m as the full circumstances of the likelihood of the plaintiffs having to pay that sum had not been adequately presented.

The plaintiffs were entitled to an undertaking that would be nearly as secure as the vessel they had arrested. The defendants' P&I Club, Skuld, had recently been given a 'BB' rating which meant that it has 'vulnerable characteristics' and 'could lead to insufficient ability to meet financial commitments'. As such the court decided that security could be provided by way of a letter of undertaking from Skuld, on the condition that the defendants substitute a local banker's guarantee for it within a month. The vessel was to be released on the defendants' provision of security in the amount of US$3.8m plus interest over three years at 8% and S$350,000 costs.

TORT

De Souza Tay & Goh (suing as a firm) v Singapore Press Holdings Ltd and another action [2001] 3 SLR 380

High Court - Suit Nos 858 and 859 of 2000 (Registrar's Appeal Nos 24 and 23 of 2001)
Lee Seiu Kin JC
23 March, 16 June 2001

Defamation - Libel - Natural and ordinary meaning - Innuendo meaning - Article published in principal local daily English newspaper - Whether words and graphic of article in their natural and ordinary meaning defamatory - Whether words and graphic of article defamatory in their innuendo meaning when read with earlier article - Whether antidote in article removed any bane carried by innuendo in earlier article

Engelin Teh, SC and Thomas Sim (Engelin Teh & Partners) for the plaintiffs.
Philip Fong and Melanie Ho (Harry Elias Partnership) for the defendants in both suits.

The plaintiffs, a law firm, claimed damages from both defendants for libel in respect of the publication of an article ('the article') which appeared in The Straits Times ('TST'). The plaintiffs asserted that the words, together with the photographs and graphical representations of the article ('the graphic') were, in their natural and ordinary meaning, defamatory of the plaintiffs and, when read in the light of an earlier article published in TST, were also defamatory of the plaintiffs in their innuendo meaning. The plaintiffs filed applications under O 14 r 12, Rules of Court for the determination of: (1) the natural and ordinary meaning; and (2) the innuendo meaning, of the words and the graphic of the article. The plaintiffs submitted that the words and the graphic, in their natural and ordinary meaning and/or in their innuendo meaning, meant that: (1) the plaintiffs were participants and/or were directly or indirectly involved in the suspected illegal and/or fraudulent activity of Lernout & Hauspie and/or its co-founders and/or its licensees ('L&H') which activity is being investigated into by the United States Securities and Exchange Commission; and (2) the plaintiffs' conduct when contacted by the defendants prior to the publication of the words and the graphic was evasive, thus lending further weight and credence to the above allegation. The senior assistant registrar who heard the applications held that the article was not defamatory of the plaintiffs and ordered that the plaintiffs' statement of claim in both actions be struck out on the ground that there was no reasonable cause of action against the defendants in both actions, and accordingly dismissed those actions. The plaintiffs appealed to a judge in chambers. The plaintiffs submitted that a reading of the article revealed that there were reasonable grounds for suspicion that L&H had used 15 Singapore companies to manipulate financial transactions to create the impression that they had achieved a high sales turnover in 1999 and were, therefore, guilty of fraudulent conduct. The plaintiffs further submitted that a link between the plaintiffs and L&H's nefarious activities had been established by the mention in the article that the 15 Singapore companies had a 'common address' in the plaintiffs' office as well as the mention that one of the plaintiffs' employees who was the secretary and director of the 15 Singapore companies, had declined to comment when contacted by TST and that attempts to reach the partners of the firm were unsuccessful, thus giving the impression that the plaintiffs were being evasive and deliberately avoided contact, thereby indicating they had something to hide.

Held, dismissing the appeals:
The article would be interpreted by the ordinary, reasonable reader to mean that L&H had used 15 Singapore companies to manipulate financial transactions to create the impression that they had achieved a high sales turnover in 1999 and were, therefore, guilty of fraudulent conduct. At the very least, the article was defamatory of L&H in that it meant that there were reasonable grounds for suspicion that they were guilty of fraud.

A reasonable reader would not think that there was anything wrong with a law firm permitting its address to be used as the registered office of a large number of companies. This was especially so in the light of the antidote provided from remarks quoted from lawyers that such a practice was legal and that it was commonly done.

The reference to the plaintiffs' employee as being the secretary and director of 15 of the companies and declining to comment when contacted by TST did not necessarily mean that she was being evasive. In the context of the article, especially the statement of another lawyer in the article that interim directors are often appointed, a reasonable person would not infer any connection between the plaintiffs' employee and the nefarious activities of those companies. The fact that TST had made unsuccessful attempts to reach the partners of the firm need not necessarily have a defamatory meaning and in the context of the article could not reasonably be construed to have such a meaning. If the partners had been reached but declined comment, that could have given a different picture, but it would not be reasonable for a reader to infer that the partners had been evasive merely because TST had not been successful in contacting them.

It was necessary to examine the article as a whole and in the context in which the words were used. If there was anything in a part of the article that was, of itself, defamatory of the plaintiffs, one must consider whether there was anything elsewhere that would put the article in such a perspective that a reasonable reader would not reach the conclusion that it is defamatory of them. In the present case, having considered the article in its entirety, together with the information available to the person who had also read the earlier article, the antidote in the article would clearly remove any bane carried by the innuendo in the earlier article.

[Editorial Note: The plaintiffs have appealed to the Court of Appeal vide CA 600082 of 2001.]