Timber Resource Management Ltd v Minister for Information [2001] FJHC 219; HBC212.2000 (25 July 2001)

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THE MINISTER FOR INFORMATION
THE MINISTER FOR AGRICULTURE, FISHERIES
& FORESTS
THE ATTORNEY-GENERAL OF FIJI
STAN RITOVA
TONY SINGH AND SANDEEP PATEL T/A
“THE FIJI SUN”
Defendants

On the 1st of May 2000 the Plaintiff issued a Writ claiming damages for defamation against the Defendants. To date no defences have been delivered but on the 26th of May 2000 the 1st, 2nd and 3rd Defendants issued a Summons for an order that the Statement of Claim be struck out on the grounds that it discloses no reasonable cause of action. That Summons is now before me.

The Statement of Claim alleges that the Plaintiff is a limited liability company incorporated in Fiji which conducts business in Fiji and internationally with international partners.

On or about the 1st of February 1999 at the invitation of the Government of Fiji the Plaintiff (hereinafter “TRM”) together with its international associates submitted to the Government a proposal for the funding and development of the Fiji Hardwood Corporation Limited (“FHCL”). The Statement of Claim alleges that the 1st Defendant is a Politician and a Minister in the Government of Fiji who has the ultimate responsibility for the Ministry of Information which is responsible for the dissemination of all statements issued by the Government of Fiji and all official news outlets for the Government of Fiji including the official web-site of the Government of Fiji on the internet.

It next alleges that the 2nd Defendant is a Minister in the Government of Fiji charged with the responsibility of administering Forestry resources in Fiji including the company’s large and valuable Mahogany Forests.

The 3rd Defendant is the Principal Legal Officer for the Government of Fiji and by virtue of Section 12 of the State Proceedings Act Cap 24 is a Defendant in all proceedings
against the Government of Fiji.

The 4th Defendant is the editor of the newspaper “The Fiji Sun” which is printed daily and is alleged to have a wide circulation throughout the Fiji Islands.

The 4th, 5th and 6th Defendants are being sued as representative, publishers and proprietors respectively of “The Fiji Sun” newspaper which it is alleged published defamatory statements made by the Government of Fiji against the Plaintiff.

It is alleged that on page 32 of “The Fiji Sun” newspaper of the 4th of April 2000 the Government of Fiji issued a statement under the heading “The Real Facts About The Mahogany Deal” published in “The Fiji Sun” newspaper which contained allegations which were false and malicious concerning the Plaintiff and its proposals to the Government of Fiji for the rights to acquire and harvest the Mahogany plantations in Fiji. The Plaintiff alleges these allegations were defamatory of it.

Paragraph 11 of the Statement of Claim then sets out the words from the statement by the 1st and 2nd Defendants and published in “The Fiji Sun” newspaper which are said to be defamatory:

1	Paragraph 3...	there are fundamental shortcomings in the TRM proposal that make it totally unacceptable to any right thinking Government
2	Paragraph 4...	TRM was putting no money (equity), not a cent into the project
3	Paragraph 4...	the whole venture was to be funded through the raising of bonds that Fiji would have to pay back
4	Paragraph 5...	(TRM would)...raise US$110 million through the United States bond market and lend it to the Fiji Hardwood Corporation Limited (FHCL)
5	Paragraph 6...	the deal with FHCL was to be done through the registering of a special purpose vehicle, a company that would be registered in the Cayman Islands and owned by American bondholders
6	Paragraph 7...	Fiji’s Mahogany forest was to be secured to this company so that in the event of default in repayment of the bonds they takeover the forest and do what they want with it without the Fiji Government or Landowners having any say at all.
7	Paragraph 8...	the loan to FHCL was to be repaid over a 10-year period...
8	Paragraph 8...	in other words, under this deal FHCL would have to generate FI$41 million a year just to repay the bonds let alone meeting other costs.
9	Paragraph 9...	out of the US$110 million to be raised, TRM was to deduct US$11.5 million up-front as the cost of raising the bonds as investment bank fees.
10	Paragraph 13...	TRM was to operate under 3 (three) separate entities: one would raise the loan and then disappear; another would take over management of the FHCL and the third set up the milling operations
11	Paragraph 14...	“There was no way the People’s Coalition Government could be fooled into accepting such a proposal.”
12	Paragraph 15...	TRM has no track record anywhere.
13	Paragraph 15...	it (TRM) wants Fiji to buy the cutting rights to its own forest resources, which is ridiculous.
14	Paragraph 15...	we would be securing our forests to a company registered in the Cayman Islands. Why do critics not talk about the Cayman Islands connection?
15	Paragraph 15...	TRM’s proposals carried very high risks for Fiji and posed the real danger of our losing ownership of our Mahogany forests...
16	Paragraph 17...	Fiji has already had several recent bad experiences with privatisation deals not properly thought out and scrutinised.... This Government does not want a repetition of such disasters.
17	Paragraph 18...	the repayment of the loan at 10% interest rate was structured in such a way that FHCL would not have been able to generate enough resources to pay the bonds...
18	Paragraph 18...	under the TRM deal, the danger of alienating our valuable Mahogany forests completely to foreigners is very real.
19	Paragraph 19...	with the CDC proposal, only the cutting rights to the Mahogany are sold. The forests are not alienated to anyone.
20	Paragraph 20...	Government gave TRM considerable opportunities to provide a bid which was commercially viable and which would not place the Mahogany resources of Fiji at risk.
21	Paragraph 20...	financial information provided by TRM indicated the high likelihood that the bond issue would not be paid even on the third year after issue.
22	Paragraph 20...	it was never made clear whether the original proposed bond issue was for $120 million or US$110 million. One would expect a bid from an internationally reputable organisation to at least define the amount intended to be raised.
23	Paragraph 20...	this figure has since dropped to US$90 million in the Daily Post article. Is Government to assume that if the process continued, the TRM bond figure will continue to reduce? No financially competent organisation can continue to change figures as TRM is doing.
24	Paragraph 21...	Government has maintained throughout that the rights, needs and co-operation of the Landowners should be an integral part of any proposal to maximize the value of the Mahogany resources, and this consideration has been a critical factor in Government’s negotiations with both CDC and TRM. CDC appreciated this concern.
25	Paragraph 22...	unlike CDC’s unwavering commitment to Landowners interests, TRM at negotiating meetings made no suggestions that Landowners should be involved in negotiations prior to final agreements being confirmed.
26	Paragraph 24	the truth is that, going by TRM financial projections there is a real possibility that the principal and interest on the bond issue might not be met at all.
27	Paragraph 28	this is laughable. The Cabinet sub-committee was fully briefed before it held negotiations with TRM which included Fahnestock. Individual members have also visited the U.S. to obtain first hand information on the proposed bond issue. To suggest that there is lack of knowledge of bond issue finance is ridiculous.
28	Paragraph 38	no equity values or percentage has yet been agreed to between Government and CDC. However, CDC equity injection will be significantly higher than TRM intended to do.
29	Paragraph 39...	TRM in their bid would have controlled FHCL and managed it for 10 years through their Board representation, if this is not an outright gift from FHCL to an American company, we are not sure what it is!
30	Paragraph 40...	The TRM valuation on the other hand is a figure determined by a shareholder of the bidding company and has never been validated.

The Plaintiff alleges that these words referred to and were understood to refer to the Plaintiff.

“That at no time prior to the publication of the said words did the Government of Fiji or any of its representatives or “The Fiji Sun” newspaper or any of its representatives inquire with the Plaintiff or any of its servants or agents to determine the truthfulness and accuracy of the said defamatory words and allegations that they published concerning the Plaintiff.”

Paragraph 14 states that by these words in their natural and ordinary meanings the Defendants meant and were understood to mean:

(i) that the Plaintiff’s proposal to the government for the acquisition of the funding and development of FHCL was a sham.

(ii) that the Plaintiff’s proposal to the government for the funding and development of FHCL contained matters that were untrue and false and were aimed and designed to mislead the government.

(iv) that the Plaintiff had prepared an elaborate plan of deceit to defraud the government and people of Fiji of their resource namely the Mahogany plantations.

(vi) that the Plaintiff’s proposals were prepared with lack of skill and due care and attention and as such were devoid and deficient in all material respects.

(vii) that the Plaintiff lacked the material expertise and experience to be involved in the harvesting of Fiji’s Timber Mahogany resources.

Paragraph 15 states that the Plaintiff has requested the Government of Fiji to withdraw or retract the defamatory allegations against the Plaintiff but it has refused to do so.

Paragraph 16 says that by the publication of the said words the Plaintiff has been greatly injured in its credit and reputation and has been brought into public scandal, odium and contempt.

Paragraph 17 alleges that the 1st and 2nd Defendants have refused to make a sufficient apology to the Plaintiff for the defamatory statements made against it and that the 1st and 2nd Defendants (by which I am sure is meant the 5th and 6th Defendants) repeated the libel on the following dates:

The Statement of Claim continues that the statements in the newspaper were published in a sensational manner and were published by the 1st and 2nd Defendants in the knowledge that they were libellous or with reckless disregard as to whether or not they were libellous; and knowingly published the statements for the purpose of material advantage.

It is then alleged that the statements were published for the purpose of material advantage knowing that the advantage from the publication outweighed the prospect of material loss.

In the submissions I have received it is common ground that the first question to be decided is whether or not the causes of action pleaded in the Statement of Claim have some chance of success. This also involves the question whether the pleadings disclose any reasonable cause of action. In Drummond-Jackson v. British Medical Association, (1970) 1 ALL E.R. 1094 it was held that a reasonable cause of action means a cause of action with some chance of success when only the allegations in the pleadings are considered.

The Defendants submit that the Statement of Claim has failed to show that the words complained of referred to the Plaintiff. I am referred to Gatley on Libel and Slander, 9th Edition para 26.25 on page 664 where it is stated:

“It is an essential part of the Plaintiff’s case to show that he is the person referred to by the defamatory words. Accordingly, where it is not absolutely clear on the face of the words that they refer to the Plaintiff e.g. where he is described by his initial letters, or by a fictitious name, or by the name of somebody else, or where he is not mentioned at all, the Plaintiff should make clear in his pleading the basis on which he claims to have been identified as the subject of the words complained of. He should set out the connecting facts which establish the link between himself and the words used, and he should make plain his case as to the existence of a person or persons who in fact linked him with the words by reason of their knowledge of those connecting facts. These matters are material facts which must be pleaded. If the Plaintiff does not plead such facts sufficiently, his claim will be struck out.”

It is then submitted that there is no reference in any of the extracts given by the Plaintiff nor any where in the entire article to the Plaintiff.

I find this a strange submission. There are express references to the Plaintiff in paragraphs 3, 4, and 5 and there are further references to the Plaintiff in paragraphs of the article numbered 9, 13, (implied 14) 15, 17, 18, 20, 21, 22, 24, 28, 38, 39 and 40.

Then it is submitted that there is no indication in the Statement of Claim as to the nature of the Plaintiff’s business nor are any facts pleaded to indicate that the Plaintiff’s company has a trading reputation or the manner in which it conducts business.

It is then submitted that the Plaintiff is not described as carrying on any particular type of business nor are any facts pleaded to indicate that the Plaintiff has a trading reputation or the manner in which it conducts business.

Again I find this submission strange. In my view paragraph 3 of the Statement of Claim indicates that the Plaintiff is a company interested in funding and developing the Fiji Hardwood Corporation Limited, I therefore reject this submission.

In D, & L, Caterers, Limited, And Jackson v. D’Ajou (1945) 1 KB 364 it was held by the Court of Appeal that a limited liability company as well as an individual can maintain an action for slander without proof of special damage, where the words are calculated to injure its reputation in relation to its trade or business.

In my view the very title of the Plaintiff indicates the type of business it is carrying on namely Timber Resource Management.

It is then submitted that the statements in their usual and ordinary meaning are not defamatory of the Plaintiff; that whilst the statements indicate that the submissions presented by TRM may have lacked certain desirable qualities or included undesirable qualities they do not impute some deficiency in the way the Plaintiff conducts or carries on its business. It is claimed that the statements complained of are not more than a critical examination of a proposal and as such are fair comment on a matter of public importance.

It is also alleged that although the Plaintiff claims the statement was published maliciously there is no material in the Statement of Claim to support an allegation that the Defendants did not really entertain the opinions expressed in the comments or knew that they were unjust so as to amount malice.

As to this submission it must be observed that the application is made under Order 18 Rule 18 (1) (a) and that under Rule 2 no evidence shall be admissible on an application which alleges a Statement of Claim discloses no reasonable cause of action. In my judgment the Defendants’ submission goes perilously close to infringing Order 18. The question whether or not the words constitute fair comment cannot be decided at this preliminary stage but only after the Court has heard all the evidence. Thus in Control Risks Limited v. New English Library Limited (1989) 3 ALL E.R. 577 Lord Justice Nicholls stated:

“Whether the words complained of in the present case include a fair comment, recognizable as such on a matter of public interest is a question to be decided by the jury at trial.” (Emphasis added)

Time and again the Courts have stated that the jurisdiction to strike out proceedings under Order 18 rule 18 should be very sparingly exercised and only in exceptional cases where legal questions of importance and difficulty are raised - per Marsack J.A. in Attorney-General v. Shiu Prasad Halka [1972] 18 FLR 210 at page 215.

“The ... procedure is only appropriate to cases which are plain and obvious, so that any master or judge can say at once that the statement of claim as it stands is insufficient even if proved, to entitle the plaintiff to what he asks. The use of the expression “reasonable cause of action” shows the summary procedure ... is only intended to be had recourse to in plain and obvious cases.” (Emphasis added)

In Ratu Mosese Varasekete Tuisawau v. Fiji Times & Herald Ltd. & Others [1975] 21 FLR 149 at p.151, Marsack J.A. quoted Gatley on Libel and Slander, Sixth Edition, page 89, para 88, where the learned authors said:

“88. Objective test. What imputation is conveyed by any particular words is to be determined on an objective test, that is, by the meaning in which the ordinary reasonable man would understand them. “This test according to authorities is whether, under the circumstances in which the writing was published, reasonable men to whom the publication was made would be likely to understand it in a libellous sense” per Lord Selbourne L.C. in Capital & Counties Bank v. Henty (1882) 7 APP. Cas at p.745. The imputation conveyed is not to be determined by the meaning which those to whom the words were published in fact attached to them.”

To summarise, I am of the opinion that the words complained of disclose a prima facie case for the Plaintiff and there is no justification for striking out the Statement of Claim at this stage. The application is therefore dismissed, pleadings are to take their normal course, and costs will be in the cause.

High Court of Fiji

Timber Resource Management Ltd v Minister for Information [2001] FJHC 219; HBC212.2000 (25 July 2001)