Home | Databases | WorldLII | Search | Feedback National Court of Papua New Guinea

Rabaul Shipping Ltd v Mudalige (No 2) [2009] PGNC 174; N3783 (23 October 2009)

N3783

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 20 OF 2005

BETWEEN

RABAUL SHIPPING LIMITED
First Plaintiff

AND

PETER ROBERT SHARP
Second Plaintiff

AND

CYRIL MUDALIGE - Acting Principal Ships Surveyor & Safety Officer
First Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant

(No 2)

Kokopo: Makail J,
2009: 20th, 21st July & 23rd October

DEFAMATION - Libel - Defence of fair comment - Defence of truth - Defence of qualified privilege - Claim of malice or lack of good faith - Onus of proof on party alleging malice or lack of good faith - Defamation Act Ch 293 - Sections 2,3,4,5,8,9,10&11.

Cases cited:

Papua New Guinea cases

Wyatt Gallagher Bassett (PNG) Limited -v- Benny Diau (2002) N2277
David Lambu -v- Paul Paken Torato (2008) SC593
PNG Aviation Services Pty Limited -v- Sir Michael Thomas Somare & Ors [1997] PNGLR 515
Arlene Pitil -v- Rutis Clytus & Island Recruitment Management Services Enterprises Limited (2003) N2422
Rabaul Shipping Limited & Peter Robert Sharp -v- Cyril Mudalige & The State (No 1): WS No 20 of 2005 (Unnumbered & Unreported Judgment of 20th July 2009)

Overseas cases cited:

Hunt -v- Star Newspaper Co [1908] 2KB 309

Text:

The Law of Defamation, The Federation Press (1st ed 1998) Michael Gillooy.
Oxford Advanced Learner’s Dictionary, Oxford University Press, (7th ed 1997)

Counsel:

Mr D Lidgett & Ms E Takoboy, for Plaintiffs
Mr K Iduhu, for First Defendant
Mr F Cherake, for Second Defendant

JUDGMENT

23rd October, 2009

1. MAKAIL J: This matter comes before the Court for trial on liability based on an action for defamation, more specifically, libel. The first plaintiff is a company duly registered under the Companies Act 1997 and carries on business in the shipping industry by operating a number of passenger vessels in Papua New Guinea. The second plaintiff is the managing director of the first plaintiff. They sue the defendant for an alleged defamatory statement made by the first defendant and published in a letter to the Ministry for Land Infrastructure and Transport in Japan. This letter is dated 26th November 2002 and is tendered into evidence by consent of the parties and marked as exhibit "P4".

Background facts

2. From the statement of agreed facts filed by the parties, the following facts are not in dispute and give the background of the dispute between the parties, which I adopt for the purposes of this trial. They are; the defendants on learning that the first plaintiff purchased a vessel named MV Morobe Queen, formerly known as Kofuju Maru 25, asked the second plaintiff to class the vessel before bringing it to Papua New Guinea. The defendants’ request was impossible to comply with because the vessel was over 30 years old and if it was not classed, it would not be able to sail out of Japan under Papua New Guinean registration.

3. On 26th November 2002, the first defendant in his capacity as acting Principal Ships Surveyor and Safety Inspector within the Department of Transport and Civil Aviation’s Maritime Division wrote the subject letter to the Japanese Ministry of Land Infrastructure and Transport’s Maritime Bureau to seek its assistance in conducting an inspection, verification and certification with regards to its sea worthiness before it departed Japan for Papua New Guinea.

4. The subject letter which I shall refer to as the "letter", from now onwards is the centre of controversy between the parties in this action and I set it out in full in order for all to appreciate its content and understand why it is the subject of controversy:

"MV MOROBE QUEEN/KOFUJU MARU 25

Above vessel is reportedly purchased by PNG ship owner and is in the process of bringing same to the country.

We had asked him to class the vessel before he brings it to this country due to:-

1. Vessel is 30 years old and going to ferry passengers amounting to 360 in PNG.

2. Owner had very bad records (sic) in maintaining vessels.

3. This Authority is short of surveyors to survey such vessels.

Owner has disagreed on our advice. It is requested to advise the Port State Control inspector in Hiroshima to check and verify the condition of the vessel before it departs Japan. Owner has not produced thickness gauging of the vessel or last dry dock report.

Expecting your fullest co-operation in this regard.

Signed

CYRIL MUDALIGE

A/Principal Ships Surveyor

& Safety Officer." (Emphasis added).

5. It is paragraph 2.2 of the letter that is the most contentious of all. This is because the statement carried the following imputations which were said to be defamatory. First, that the plaintiffs had a very bad history of operating unsafe vessels, secondly, that they had endangered lives of their employees and passengers by failing to maintain their vessels in a safe condition, thirdly, that they were reprehensible ship owners against whom the Japanese authorities should have taken action and finally, that they proposed to sail from Japan to Papua New Guinea the MV Morobe Queen, knowing it to be unsafe, thereby endangering its crew.

6. The defendants deny the plaintiffs’ claim that they have defamed the plaintiffs by publishing the statement in paragraph 2.2 of the letter. In their defence, they claim that the statement made of the plaintiffs in the letter was a fair comment, justified, truth and for public good, in that they were true and represented the character and style of business operations of the plaintiffs. They rely on sections 9, 10 and 11 of the Defamation Act Ch 293. I shall refer to these provisions later on when I consider the defence of the defendants in detail.

7. For now, the plaintiffs rely upon three affidavits of the second plaintiff which were admitted into evidence by consent and marked exhibits "P1", "P2" & "P3" of the business operations of the first plaintiff and to establish that the statement contained in the letter was false and maliciously made to injure and bring disrepute to the plaintiffs’ standing and good name within the shipping industry in this country. The second plaintiff was cross examined by the counsel for the first defendant.

8. As for the defendants, they rely upon an affidavit of the first defendant sworn on 15th May 2009 and filed on 19th May 2009 marked as exhibit "D1" in addition to his oral evidence and a document titled Asia Pacific Port States Central Manual which was tendered into evidence without objection and marked exhibits "D2".

General: Law of defamation

9. Before I discuss the evidence of the parties’ witnesses and make appropriate findings of fact in relation to the factual matters that are in dispute between the parties, it is appropriate to state in brief the law of defamation in this jurisdiction. The law of defamation in this jurisdiction more or less has been codified in the Defamation Act Ch 293. I agree with the statement made by Kandakasi J, with regards to the adoption and position of the law of defamation in Papua New Guinea in Wyatt Gallagher Bassett (PNG) Limited -v- Benny Diau (2002) N2277, where his Honour observed that:

"Defamation is tort at common law. The relevant principles governing the law on defamation were adopted into our jurisdiction by virtue of section 9 and Schedule 2.2 of the Constitution. As Justice Sheehan said in PNG Aviation Services Pty Ltd & Ors v. Michael Thomas Somare & Ors (unreported judgment delivered on 20/12/96) N1493:

"the Defamation Act (Ch 293) which consolidates the law on defamation protects the rights of individuals to their good reputation. It restates the essential common law principles in statutory form. It is the substantive law of defamation, but without provisions for such matters as procedure, damages or even the absolute protection of Parliamentarians for speeches in the House, the Act is not an exhaustive code in the way that Australian statutes on which it is modelled are said to be codes. Accordingly where the act is not specific then common law not inconsistent with the Act is relevant. English decisions pursuant to schedule 2.2 of the Second Schedule of the Constitution are therefore authoritative, while Australian decisions and those of other jurisdictions maybe persuasive."

The law on defamation and the Defamation Act prohibits a person in effect from unlawfully publishing a defamatory matter against a person. It follows therefore that a defamatory publication is unlawful unless the publication is protected, privileged or excused by law. A company, as in the PNG Aviation Services (supra) case, or an individual who is unlawfully defamed and suffers in the consequence loss and injury to his or her reputation, is entitled to damages."

Section 5 of the Defamation Act Ch 293 states that, "It is unlawful to publish defamatory matter unless the publication is protected, justified or excused by law." and section 2 of the same Act defines a defamatory matter as:

"2. Definition of defamatory matter.

(1) An imputation concerning a person, or a member of his family, whether living or dead, by which -

(a) the reputation of that person is likely to be injured; or

(b) he is likely to be injured in his profession or trade; or

(c) other persons are likely to be induced to shun, avoid, ridicule or despise him,

is a defamatory imputation.

(2) An imputation may be expressed directly or by insinuation or irony.

(3) The question, whether any matter is or is not defamatory or is or is not capable of bearing a defamatory meaning, is a question of law."

10. In David Lambu -v- Paul Paken Torato (2008) SC593, the Supreme Court, per Cannings J, set out the elements of a cause of action of defamation as follows:

"As for defamation, the elements required to sustain a cause of action are that:

- the defendant made a defamatory imputation of the plaintiff;

- the defendant published it;

- the publication was unlawful (ie it was not protected, justified or excused by law).

(See Defamation Act, Section 24; Theresa Joan Baker v Lae Printing Pty Ltd [1979] PNGLR 16.)

The first element is a question of law by virtue of Section 2(3) of the Defamation Act. Invariably, though it is not expressly stated in the Act, so is the third."

11. Returning to the evidence and having perused the various affidavits and noting that it is not disputed by the parties that the first defendant published the alleged defamatory statement, I find as a fact that the first defendant published the words, "Owner had very bad records (sic) in maintaining vessels" in the letter addressed to the Ministry of Land Infrastructure & Transport, Tokyo, Japan. That is, there was publication of the defamatory statement within the meaning of section 4(c) of the Defamation Act Ch 293 which states that, "For the purposes of this Act, publication is -

(a) ........................; and

(b) ......................; and

(c) in the case of other defamatory matter -

(i) exhibiting it in public; or

(ii) causing it to be read or seen; or

(iii) showing or delivering it; or

(iv) causing it to be shown or delivered,

with a view to its being read or seen by a person other than the person defamed."

12. I also find that the statement carried the following imputations which are defamatory of the plaintiffs. First, that the plaintiffs had a very bad history of operating unsafe vessels, secondly, that they had endangered lives of their employees and passengers by failing to maintain their vessels in a safe condition, thirdly, that they were reprehensible ship owners against whom the Japanese authorities should taken action and finally, that they proposed to sail from Japan to Papua New Guinea the MV Morobe Queen, knowing it to be unsafe, thereby endangering its crew.

13. It follows, I am satisfied that the first and second elements for the action of defamation have been made out because applying the statutory definition of defamation under section 2 of the Defamation Act Ch 293, there is no doubt in my mind that as a matter of law, the words published by the first defendant, in their natural, ordinary and unstrained meaning of common usage, were likely to injure the plaintiffs’ reputations, their standing in the profession and trade and likely to induce others to shun, avoid, riddle or despise them.

14. It is therefore, the third element, whether the publication was unlawful, which is the main issue before the Court for determination. In other words, the primary issue in this action is whether the statement contained in paragraph 2.2 of the letter written by the first defendant is either fair comment, truth and/or justified.

Defence: Fair comment

15. I deal first, with the defence of fair comment. This defence is provided under section 9 of the Defamation Act Ch 293. For our purposes, section 9(1)(a),(b)&(d)(iii),(2)&(3) is relevant and states as follows:

"9. Protection: fair comment.

(1) For the purposes of this Act, it is lawful to publish a fair comment -

(a) respecting any of the matters with respect to which the publication of a fair report in good faith for the information of the public is declared to be lawful by Section 8; or

(b) respecting -

(i) the public conduct of a person who takes part in public affairs; or

(ii) ...............; or

(c) ........... -

(i) .............; or

(ii) ............; or

(d) respecting -

(i) .............; or

(ii) .............; or

(iii) the character of any such person, so far as his character appears in that conduct; or

(e) ............-

(i) ............; or

(ii) ...........; or

(f) ..........., -

(i) .............; or

(ii) ............; or

(g) .......... -

(i) ............; or

(ii) ............; or

(h) ............

(2) Whether a comment is or is not fair within the meaning of this Act is a question of fact.

(3) If a comment is not fair, and is defamatory, the publication of it is unlawful."

16. At common law, it is a good defence to an action for defamation to prove that the matter complained of constituted fair comment on a matter of public interest. The ingredients of the defence are:

1. the matter in question must be a comment;

2. the comment must be a matter of public importance; and

3. the comment must be fair.

17. In order to qualify as a comment for the purposes of the defence, a statement of opinion must be accompanied by a statement or at least an indication of the facts upon which the opinion is based. See Hunt -v- Star Newspaper Co [1908] 2KB 309 at 319-320. Publishees of the defamatory matter are thereby enabled to judge for themselves the extent to which the publisher’s opinion is well founded. Failure to state or indicate the factual basis for the alleged comments normally leads to the conclusion that the statement of opinion actually contains a concealed assertion of fact (ie, that certain facts exist which, though unstated, provide adequate grounds for the opinion expressed). Hence, the statement is not opinion, pure and unadulterated, and so cannot be excused as "fair comment". See The Law of Defamation, The Federation Press (1st ed 1998), Michael Gillooy at pp 126-127.

18. I emphasize here that there must be "facts" upon which the defendants rely to make the statement to constitute a fair comment. In PNG Aviation Services Pty Limited -v- Sir Michael Thomas Somare & Ors [1997] PNGLR 515, Sheehan J, made several references to the necessary distinction "comment" and "fact" and the importance of the separation of the two. For a better appreciation of their distinction and to emphasize the distinction, I respectfully quote the relevant parts of the judgment below:

"It is a defence to an action of defamation to show that the words complained of constitute a fair comment on a matter of public interest. (Gatley: Libel and Slander 8th edn 69). Section 9 of the Defamation Act gives statutory effect to this defence.........

Gatley: para 692 cited by Defence Counsel sets out the basis of this defence.

"692. What must be proved. To succeed in a defence of fair comment the defendant must show that the words are comment, and not a statement of fact. He must also show that there is a basis of fact for the comment, contained or referred to in the matter complained of. Finally, he must show that the comment is on a matter of public interest, one which has expressly or implicitly put before the public for judgment or is otherwise a matter with which the public has a legitimate concern. If, however, the plaintiff can show that the comment was not made honestly or was actuated by malice, he will defeat the plea."

It must be emphasised that when pleading fair comment, a defendant is pleading a defence to comment only; a defence regarding an assertion of opinion made about particular facts. There must be a basis of true facts to support the comment. A comment shown to be fair on proven facts is protected by law, an allegation of defamatory facts is not.

"In a defence of fair comment if the facts on which comment is based are stated, they must be shown to be true. It is sufficient that comment on them be fair. But the comment cannot be fair if the facts are misstated." Gorton v ABC [1973 22 FLR 181].

In other words, if the facts on which comment is based are not true the defence fails.

The separation of fact and comment is vital. Comment must be recognisable as comment. If fact and comment are so mixed up such that the one cannot be separated from the other, the publication will stand as an assertion of fact and this not amenable to a defence of fair comment. The Privy Counsel in Davis v Shepstone [1886] UKLawRpAC 12; 1886 11 AC 187 declared:

"the distinction can not be too clearly borne in mind between comment or criticism and allegations of fact...it is one thing to comment or criticise, even with severity, the acknowledged or proved acts of public man and quite another to assert that he has been guilty of particular acts or misconduct."

The essence of the defence of fair comment then is that the words challenged must be comments not assertions of fact, and not only must the comments be comment, but fair comment on facts truly stated.

Counsel for the Defence referred to Gatley (para 696) as providing a clear summation of the meaning of fairness. It reads (in summary) as follows:

"Fair Comment.

Not all comment is protected; the comment must be fair...What is the meaning of "fairness"... First the comment must be based on facts, stated or indicated in the matter complained of. If the facts are not so stated or referred to, then a statement of opinion will be in the same position as an allegation of fact...

Secondly, the comment must be supported by the facts, or there must be a basis of fact sufficient to warrant the comment made...

Thirdly, the facts stated in the libel must be truly stated, or if some are not proved to be true then the Defendant must show that the expression of opinion is fair comment having regard to such facts...as are proved. Fourthly the comment must be ‘such as can be fair called criticism, and not be merely invective’.

Finally, the fact that the comment was made maliciously - or is not the expression of the authors real opinion will also make the comment unfair." (Emphasis added).

19. In the present case, the plaintiffs submit that the statement that, "Owner had very bad records (sic) in maintaining vessels" is not a fair comment because the statement is not based on or supported with "facts". They further submit that the evidence adduced so far by the defendants at trial did not establish "facts" upon which they (defendants) can say that the statement that "Owner had bad records (sic) in maintaining vessels" is a fair comment.

20. On the other hand, the defendants in essence submit that the publication of the statement was made in good faith for the information of the Port State Authority of Japan, namely, the Ministry of Land Infrastructure & Transport in Tokyo to ensure that the MV Morobe Queen did not take to sea without proper inspection, certifying and classing of it according to Industrial Maritime practice, noting that it was 30 years old at the time of its purchase.

21. They rely on section 8(3) of the Defamation Act Ch 293 to support their argument that they are protected from being liable for defaming the plaintiffs by the publication of the statement because it was in essence a report to the Japanese authorities of the kind of shipping operations the plaintiffs have in Papua New Guinea. Section 8(3) states:

"8. Protection: reports of matters of public interest.

(1) .................,-

(a) ...................; or

(b) ..................

(2) ..................... -

(a) ................; or

(b) .................; or

(c) .................. -

(i) ..................; or

(ii) .................; or

(d) ...................; or

(e) .................-

(i) .............; or

(ii) .............; or

(iii) .............,

(f) .................; or

(g) .................

(3) For the purposes of this Act, a publication is made in good faith for the information of the public if the person by whom it is made is not actuated in making it by ill-will to the person defamed or by any other improper motive, and if the manner of the publication is such as is ordinarily and fairly used in the publication of news.

(4) ....................."

22. They further submit that the letter was not made with ill will or improper motive but in good faith for the benefit of the public concerning the public conduct of the plaintiffs as parties who take part in public affairs within the meaning of section 9(1)(b)(i) of the Defamation Act Ch 293 and also the character of the plaintiffs, in so far as their character appears in the management and conduct of vessels in their business within the meaning of section 9(1(d)(ii) of the same Act.

23. Bearing in mind the common law position that, in order for a statement of opinion to be a comment for the purposes of the defence of fair comment, it must be accompanied by a statement or at least an indication of the "fact" upon which the opinion is based, I note from the letter that the statement, Owner had very bad records (sic) in maintaining vessels" is one of the three reasons for the first defendant to request the Ministry of Land Infrastructure & Transport to class the vessels before it is brought to Papua New Guinea.

24. Just by reading it per se, can it be concluded by readers that the opinion by the first defendant that, "Owner had very bad records (sic) in maintaining vessels" is well founded upon facts, hence a fair comment? In my respectful opinion, I am unable to conclude so. The reason is this, there are no "facts" in the letter showing that the plaintiffs have a very bad record in maintaining their vessels. In other words, how do we know from just reading the letter that the plaintiffs have had past incidents where they did not maintain their vessels?

25. Where does the first defendant say in the letter the name of the plaintiffs’ vessel or vessels that have not been properly maintained by the plaintiffs to give him the basis to say that, "Owner had very bad records (sic) in maintaining vessels?" I find there is none. This leads me to conclude that there is no factual foundation or basis for the first defendant to publish the statement that, "Owner had very bad records (sic) in maintaining vessels". It follows, based on the face value of the letter alone, I conclude that the comment is not a fair one and the defence of fair comment has not been made out by the defendants here.

26. But as noted above, the defendants have adduced evidence to establish that the statement that, "Owner had very bad records (sic) in maintaining vessels" is based on facts. Therefore, the statement is fair in the circumstances of the case. In this respect, it seems to me that, whilst the defendants have not stated the "facts" upon which the comment was made in the letter, they attempt to establish so by adducing the relevant evidence. For example, in paragraphs 8 to 24 of the first defendant’s affidavit marked as exhibit "D1" the defendants attempt to establish that five of the plaintiffs’ vessels, namely MV Kris, MV Saracen, MV Morima Trader, MV Kondor and MV Kavieng Queen have either sunk or gone missing because they had not been properly maintained.

27. I accept the plaintiffs’ submission that the defendants’ evidence does not establish any "facts" they relied upon in making the "fair comment" and "truth" in the published defamatory letter, namely the "facts" on which they relied to say that the "Owner had very bad records (sic) in maintaining vessels." Whilst I have no reason to doubt the first defendant’s evidence given his qualification which I should say, is well qualified to hold the position of Ships Surveyor and Safety Officer in this country and the vast knowledge and experience gained from working with ships around the world and this country, I must say, with respect, his evidence does not establish any "facts" on which the defendants could reasonably base their "fair comment" or "truth" on which they rely.

28. I find that there is evidence that ships with which the plaintiffs have been associated have sunk or gone missing but there is no evidence of the "facts" that such incidents happened as a result of the plaintiffs’ "bad maintenance". In this regard, I turn to the evidence of the first defendant which seeks to establish the "facts" upon which the defendants rely to say that the comment he made of the plaintiffs that "Owners had very bad records (sic) in maintaining vessels" is fair as it is based on facts.

29. MV Kris. Certainly, the Kris sank. There is a difference of opinion over the number of lives that were lost. However, with respect, no matter how carefully one reads the report annexed as annexure "B" to exhibit "D1", nowhere is there any mention that the cause of the incident was a result of a "bad maintenance". This position is confirmed by the first defendant in cross examination when asked by counsel for the plaintiffs, "Is there any direct evidence that it was very bad maintenance that caused it to sink?" The first defendant replied, "It does not state bad maintenance. How vessel sunk, only happens if poor condition of the vessel and water tight door."

30. When further suggested by counsel for the plaintiffs that according to the report prepared by Captain Wales, the vessel sunk because overloading was the probable cause, the first defendant said, "no". Whether it was the overloading or the bad maintenance of the vessel that caused it to sink is not relevant here because it is clear from the report that there is no evidence to support the defendants’ claim that the vessel sunk because of bad maintenance.

31. MV Saracen. Certainly the vessel was lost. There is no direct evidence that she sank, however, nor were there lives lost, directly as a result of a sinking. According to the second plaintiff, he believes that the vessel was seized by the BRA because it was the vessel that allowed the National Government to regain control of Bougainville following the uprising in 1988. It was used by the PNG Defence Force to land troops at Wakunai airstrip behind BRA lines and also at Arigua airport. This led to the troops securing a major part of the coastal section of the Island which resulted in the peace process to take place and eventually, normalcy to Bougainville.

32. But, according to the report prepared by Captain Wales, marked as annexure "C" to exhibit "D1", "the vessel did sent out a MAYDAY signal stating she was taking water and sinking. In the event of any inquirey (sic), I will keep the verdict open due to the following reason - that no wreckage or bodies have been carried out by the Department of Transport, MARSAR Section. " It appears therefore that, the report is inconclusive as to what had happened to the vessel on that fateful day of 23rd July 1994. That being the case, once again, I find, there is no reference anywhere in the report that the loss was a result of "bad maintenance".

33. MV Morima Trader. Certainly she sank. The defendants admit that there was "no solid evidence" as to how water ingress took place. Once again, there is no evidence showing either that the sinking was a result of or caused by "bad maintenance". I also note in cross examination by counsel for the defendants that, the second plaintiff suggested that it could have been as a result of a floating/submerged log that caused it to sink. To my mind, that suggestion is just a suggestion; a suggestion based on his experience in sailing Papua New Guinea seas over several decades.

34. Nor does that suggestion lead to the speculative conclusion that is it were a log that was instrumental in sinking the vessel than it was the bad condition of the hull, which would have allowed that conclusion to be drawn. I find no such evidence exist before the Court.

35. MV Kondor. Certainly she was docked for repairs. The repairs were not "forced upon" her. She was docked in line with a need which the second plaintiff recognized for work to be completed. I find from the evidence before me that the plaintiffs recognized that there was repair work to be done on the vessel and all orders from the defendants were complied with. There is evidence of MV Kondor in dire need of repair and maintenance as seen from the photographs marked as annexures "E1" to "E25" to exhibit "D1" showing defects ranging from corrosion of the hull and sides of the vessel to holes on the deck.

36. I accept that the dockyard at Motukea in Port Moresby is the only dockyard in Papua New Guinea where repair work required could be completed. Further, nor does the first defendant’s inspection of the vessel at Rabaul where he discovered that the secondary pipes and water vent pipes lead me to find that they had a bad record of maintaining their vessels.

37. With respect, I reject the defendants’ submission that the vessel would have returned to Rabaul without being repaired, had they not forced the repair work on her and her owners (the plaintiffs). I accept that the primary purpose for sailing to Port Moresby was to have work done at the Motukea slipway. I also note that prior to and even during the voyage from Rabaul to Motukea slipway, it did not sink because of bad maintenance. There is therefore, no evidence from the defendants to show "facts" upon which they rely to support their comment that the "Owner had a very bad records (sic) in maintaining vessels".

38. MV Kavieng. Certainly, this vessel was detained. However, I accept the second plaintiffs evidence that this was not a case where the vessel was detained for poor maintenance. Rather, I find that the vessel was on her delivery voyage. She is currently registered in Papua New Guinea and currently approved for commercial carriage of passengers by the defendants, as she has from time she was first registered in Papua New Guinea. I find that there is no evidence showing the facts relied by the defendants to support their comment of "bad records (sic) in maintaining vessels".

39. MV Morobe Queen. Based on the evidence of the second plaintiff, I find that at the time the defendants wrote the letter to the Japanese authorities, the vessel was neither on the register of ships in Japan nor Papua New Guinea. She was under the Flag of Belize. No doubt the defendants had authority to enquire into a vessel the plaintiffs had advised would be coming to Papua New Guinea. However, what I do not understand is what business do they have in writing to the Japanese authorities in the manner they did about a vessel which was no longer in the register of ships in Japan? Of course there is no evidence that the defendants wrote to the Belize authorities in a similar vein.

40. I accept that the vessel has been sailing in Japanese waters all her life, without any problems. Clearly, she was singled out purely and simply as a result of the first defendant’s letter. Neither before nor after have the plaintiffs had such an incident with the Japanese Port Authorities occurring. It was not so much the vessel but, the first defendant’s advice in the letter that "Owner had very bad records (sic) in maintaining vessels" which caused the furor. Further, I gather, it had something to do with the classing of the vessel that sparked the dispute. That is, the defendants requested the plaintiffs to class the vessel on a number of occasions prior to bringing it to Papua New Guinea but they did not for one reason or another.

41. Without first reaching an agreement, the second plaintiff left for Japan on 02nd December 2002 to bring it into the country. I believe this made matters worse for the parties given that they had an existing disagreement unresolved over the issue of class of MV Morobe Queen which ultimately landed them all in Court. Thus, whilst I accept that the publication of the statement was made in good faith for the information of the Port State Authority of Japan, namely, the Ministry of Land Infrastructure & Transport in Tokyo to ensure that the MV Morobe Queen did not take to sea without proper inspection, certifying and classing of it according to Industrial Maritime practice, noting that it was 30 years old at the time of its purchase, there is no evidence of "facts" upon which the first defendant made the comment that, "Owner had very bad records (sic) in maintaining vessels".

42. Further, whilst I accept that the letter was made for the benefit of the public concerning the public conduct of the plaintiffs as parties who take part in public affairs within the meaning of section 9(1)(b)(i) of the Defamation Act Ch 293 and also the character of the plaintiffs, in so far as their character appears in the management and conduct of vessels in their business within the meaning of section 9(1(d)(ii) of the same Act, there is no evidence of "facts" upon which the first defendant made the comment that, "Owner had very bad records (sic) in maintaining vessels".

43. In summing up the above discussions, it is clear that the so call bad maintenance of MV Kris, MV Saracen, MV Morima Trader, MV Kondor and MV Kavieng Queen is unfounded and untrue. Hence, there is no factual foundation or basis for the first defendant to put the Japanese authorities on notice that they must properly inspect the vessel before certifying it to leave Japan because of the plaintiffs’ bad maintenance record.

44. In the end, I find that the first defendant’s statement that, "Owners had very bad records (sic) in maintaining vessels" not a fair comment. It follows the defendants have not made out the defence of fair comment under section 9(1)(b)(i)&(d)(iii) of the Defamation Act Ch 293.

Defence: Truth

45. Secondly, the defendants rely on the defence of truth. At common law, it is a defence to an action for defamation for the defendant to prove that the matter published was true. In Papua New Guinea, we have incorporated this defence in the Defamation Act Ch 293, under section 10 and it states:

"10. Protection: truth.

For the purposes of this Act, it is lawful to publish defamatory matter if it is true, and if it is for the public benefit that the publication complained of should be made."

46. My reading of section 10 above means this, there are two matters that must be proven in order for the defence of truth to lie. First, a defendant must prove that the defamatory statement is true and secondly it is made for public benefit.

47. The defendants in this case submit that, the statement, "Owner had very bad records (sic) in maintaining vessels" in the letter published by the first defendant is now an established fact as unequivocally demonstrated in cross examination of the second plaintiff which reaffirms the evidence of the first defendant that the plaintiffs have not properly maintained their vessels. They refer to the various sunken and dilapidated vessels of the plaintiffs which I have already referred to above.

48. The plaintiffs maintain their stand that the statement was not based on "facts" which would make it true.

49. I have found under the defence of fair comment that the statement, "Owner had very bad records (sic) in maintaining vessels" as having no factual foundation or basis because there is no evidence establishing that the statement was based on "facts". That is, the plaintiffs did fail to properly maintain their vessels like, MV Kris, MV Sacaren, MV Morima Trader, MV Kondor and MV Kavieng Queen. The non existence of bad maintenance record of the vessels by the plaintiffs lead to only one conclusion and that is, there is no truth in the statement that, "Owner had very bad records (sic) in maintaining vessels".

50. Since the defendants must prove that the statement is true, I must find that they have failed to prove so. Therefore, I find that they have not made out their defence of truth and it must fail. It also follows that it is not necessary to determine whether or not the statement was published for public benefit because they have not proven that the statement is true.

Defence: Qualified privilege: Excuse

51. Finally, the defendants rely on section 11 of the Defamation Act Ch 293. It states:

"11. Qualified protection: excuse.

(1) For the purposes of this Act, it is a lawful excuse for the publication of defamatory matter if the publication is made in good faith -

(a) ................; or

(b) for the purpose of seeking remedy or redress for some private or public wrong or grievance from a person who has, or whom the person making the publication believes on reasonable grounds to have, authority over the person defamed with respect to the subject-matter of the wrong or grievance; or

(c) for the protection of the interests of the person making the publication or of some other person, or for the public good; or

(d) ................; or

(e) for the purpose of giving information to the person to whom it is made with respect to some subject as to which that person has, or is believed on reasonable grounds by the person making the publication to have, such an interest in knowing the truth as to make his conduct in making the publication reasonable under the circumstances; or

(f) ..............; or

(g) .............; or

(h) in the course of, or for the purposes of, the discussion of some subject of public interest, the public discussion of which is for the public benefit, and if, so far as the defamatory matter consists of comment, the comment is fair.

(2) For the purposes of this section, a publication is made in good faith if-

(a) the matter published is relevant to the matters the existence of which may excuse the publication in good faith of defamatory matter; and

(b) if the manner and extent of the publication do not exceed what is reasonably sufficient for the occasion; and

(c) if the person by whom it is made -

(i) is not actuated by ill-will to the person defamed, or by any other improper motive; and

(ii) does not believe the defamatory matter to be untrue."

52. In PNG Aviation’s case (supra), Sheehan J, gave a detailed exposition of the defence of qualified privilege which I respectfully find useful to guide me in my deliberation in this case and set out parts of the discussion below:

53. "While the law of defamation is primarily concerned with the protection of the rights of individuals to their good reputation, it also provides for occasions when the publication of defamatory and untrue statements may be excused. The law recognises that persons should be allowed to speak freely on occasions when they have a duty to do so or where it is justifiable in defence of some particular interest. But the immunity from liability on those occasions does not create opportunity for unrestricted invective or abuse. The privilege is qualified. It is wholly conditional on the use of the occasion being used properly and in good faith. Lack of honest belief or improper use of the occasion renders the publisher liable for defamatory statements.

54. In Horrocks v Lowe (1975) AC135 which is the definitive English decision on qualified privilege and which decision is also authoritative in Papua New Guinea, Diplock, LJ explains this as:

"The public interest that the law should provide an effective means whereby a man can vindicate his reputation against calumny has nevertheless to be accommodated to the competing public interest in permitting men to communicate frankly and freely with one another about matters in respect of which the law recognises that they have a duty to perform or an interest to protect in doing so. What is published in good faith on matters of these kinds is published on a privileged occasion. It is not actionable even though it be defamatory and turns out to be untrue...the privilege is not absolute but qualified. It is lost if the occasion which gives rise to it is misused. For in all cases of qualified privilege there is some special reason of public policy why the law accords immunity from suit - the existence of some public or private duty, whether legal or moral, on the part of the maker of the defamatory statement which justifies his communicating it or of some interest of his own which he is entitled to protect by doing so. If he uses the occasion for some other reason he loses the protection of the privilege."

55. So, the motive with which the defendant on a privileged occasion made a statement defamatory of the plaintiff becomes crucial. The protection might, however, be illusory if the onus lay on him to prove that he was actuated solely by a sense of the relevant duty or a desire to protect the relevant interest. So he is entitled to be protected by the privilege unless some other dominant and improper motive on his part is proved. "Express malice" is the term of art descriptive of such a motive. Broadly speaking, it means malice in the popular sense of a desire to injure the person who is defamed and this is generally the motive which the plaintiff sets out to prove. But to destroy the privilege the desire to injure must be the dominant motive for the defamatory publication; knowledge that it will have that effect is not enough if the defendant is nevertheless acting in accordance with a sense of duty or in bona fide protection of his own legitimate interests.

56. The motive with which a person published defamatory matter can only be inferred from what he did or said or knew. If it be proved that he did not believe that what he published was true this is generally conclusive evidence of express malice, for no sense of duty or desire to protect his own legitimate interests can justify a man in telling deliberate and injurious falsehoods about another, save in the exceptional case where a person may be under a duty to pass on, without endorsing, defamatory reports made by some other person.

57. Apart from those exceptional cases, what is required on the part of the defamer to entitle him to the protection of the privilege is positive belief in the truth of what he published or, as it is generally though tautologously termed, "honest belief". If he publishes untrue defamatory matter recklessly, without considering or caring whether it be true or not, he is in this, as in other branches of the law, treated as if he knew it to be false.

58. This qualified privilege under the common law is described in the Defamation Act (perhaps more appropriately) as qualified protection:

"excuse." In relying on this defence, the defendants’ argument is that, the letter was given to the Ministry of Land Infrastructure & Transport in Japan to advise them of the plaintiffs’ conduct in so far of maintaining their vessels are concern and for protection. I have no difficulty in accepting the argument that such authority, responsible for safety of ships’ operations and its passengers is entitled to receive such a complaint from the defendants in their official capacity. But the question is, does this necessarily mean that that they are or should be provided with complaints that have no factual foundation or basis? In other words, does the right in a person to complain to such an authority entitle him or her to bring false and highly defamatory publication of another person, natural or legal? If so, does it necessarily follow that people who provide such information are protected from criminal and or civil liabilities?

59. This is where the defence of section 11 cited above is relevant. I consider the discussions of Kandakasi J, in Wyatt Gallagher’s case (supra) which were adopted and followed in Arlene Pitil -v- Rutis Clytus & Island Recruitment Management Services Enterprises Limited (2003) N2422, relevant and respectfully adopt hereunder:

"In Section 11 of the Defamation Act provides the circumstances in which a person may be excused from publishing defamatory material of another. These principles, as already noted, have been extracted from a large number of cases including some of the cases the parties have referred me to, such as Pullman and Another v. Walter Hill & Co., Limited (supra), and Adam v. Ward [1916-17] ALL E.R. Rep. 159. But underlying all of these is the requirement that the publication must be made in good faith. This means acting "honestly and on reasonable grounds" believing that what is published is true and necessary for the purposes of his redress of a wrong to him or her or for the public interest or good: see Lord Atkinson at page 173 in Adam v. Ward (supra). The Supreme Court in ... [Yakham v. Merriam (No. 2) (1999) SC 617] repeated this, citing Lord Atkinson in Adam v. Ward with approval."

60. This is an important principle underpinning a claim for qualified privilege. It takes person years if not a lifetime to build up a reputation in society and or a good will for a business. But it takes only a careless stroke of a pen or a simple unguarded utterance of a word to destroy all of that in no time. Therefore, the law has developed in the way it has to protect a person’s reputation and the good will of a business so as to ensure nobody publishes anything adverse against another, unless it is true and made in good faith or is made without malice. This is why the authorities such as Penton v. Calwell [1945] HCA 51; [1945] 70 CLR 219 and in our jurisdiction PNG Aviation Services Pty Ltd & Ors v. Michael Thomas Somare & Ors (supra), make it clear that the defence of privileged protection can be lost if the defamer is actuated by malice. So the protection is there only, as long as the author of the defamatory material acts in good faith, that is to say truthfully and honestly with no intent to destroy the party being defamed, irrespective of to whom it is made. This is why even in criminal cases the law allows for damages for any false or malicious prosecution.

61. In the present case, there is no dispute that the second plaintiff is a very experienced sailor having sailed and worked in the shipping industry for over 30 years in Papua New Guinea. There is therefore no doubt in my mind that the plaintiffs have built a good reputation and name in the shipping industry of this country. As I noted above, the statement that, the "Owner had very bad records (sic) in maintaining vessels", carried the following imputations which were defamatory. First, that the plaintiffs had a very bad history of operating unsafe vessels, secondly, that they had endangered lives of their employees and passengers by failing to maintain their vessels in a safe condition, thirdly, that they were reprehensible ship owners against whom the Japanese authorities should taken action and finally, that they proposed to sail from Japan to Papua New Guinea the MV Morobe Queen, knowing it to be unsafe, thereby endangering its crew.

62. In my opinion, these are very serious and very damaging allegations. But there is not a shred of evidence as I have found above establishing these allegations. There is therefore, no factual foundation or basis for these allegations.

63. This then raises the question of why did they publish it if there was no truth in what they claimed? Could they have been actuated by malice or ill will towards the plaintiffs that they were prepared to publish such a very serious and damaging material towards the plaintiffs? The plaintiffs claim that the letter was written by the first defendant preceding and during a time when the contempt of court proceeding between the same parties in this action were pending. The contempt of court proceeding came about after the National Court on 26th July 2002, ordered by way of mandamus the defendants to survey and register one of the plaintiffs’ vessels. The contempt of court proceeding is OS No 237 of 2002 where on 06th December 2002, the National Court found the first defendant and one, Jerome Ainus guilty of contempt of court and a warrant of arrest was issued for their immediate arrest and detention. See paragraphs 4,5 & 6 of exhibit "P1" and annexures "A", "B" "C" of the exhibit "P2".

64. On the other hand, the defendants maintain their position that the letter was written in good faith for the public benefit. They were concern about the safety of the vessel MV Morobe Queen, its crew and passengers if it were allowed to sail from Japan without inspection, certifying and registering it and operate in Papua New Guinea. That is why they wrote that letter containing the defamatory statement. Therefore, they say that, they are protected from being liable for defaming the plaintiffs.

65. The plaintiffs attempt to establish that the first defendant acted with malice when he made the statement in the letter, when counsel for the plaintiffs asked the following questions to the first defendant in cross examination:

"Q: Any malice?

Ans: ............. Issue of certificate of registration is a result of slowness in Rabaul office. Jerome issued the certificate to Mr Sharp.

Q: How did you feel then?

Ans: I was not very happy."

66. Malice is defined in the Oxford Advanced Learner’s Dictionary, Oxford University Press, (7th ed 1997) at p 894 as, "feeling of hatred for somebody that causes a desire to harm them." and the legal definition of malice in the Osborn’s Concise Law Dictionary, Sweet & Maxwell, (9th ed 2001) at p 243 is, "Ill-will or evil motive. Personal spite or ill-will is sometimes called malice."

67. The Defamation Act Ch 293 does not state how malice is to be proven in a defamation action, but I consider that the opposite of malice is good faith and according to section 12 of the Act, in order to prove good faith, "Where a question arises as to whether a publication of defamatory matter was or was not made in good faith, and it appears that the publication was made in circumstances that would afford lawful excuse for the publication if it was made in good faith, the burden of proof of the absence of good faith is on the party alleging the absence."

68. Based on section 12 of the Act, I consider that the burden of proof of the absence of good faith or presence of malice is on the party alleging it like in this case, the plaintiffs. They claim that the defendants made the statement as a result of the contempt of court proceeding brought against the first defendant and Jerome Ainus by the plaintiffs. Proceeding on this premise, the question is, have the plaintiffs proven that the defendants acted without good faith or acted with malice when they published the statement that, "Owner had very bad records (sic) in maintaining vessels?"

69. In the present case, there is no dispute that the first defendant and one Jerome Ainus were charged and found guilty of contempt of court of a court order of 24th July 2002 on 06th December 2002. Between 24th July 2002 and 06th December 2002, the contempt of court proceeding in OS No 237 of 2002 was going on and it was during that period that the plaintiffs purchased MV Morobe Queen from its previous owner, one Miss Konoichi in Japan.

70. If the defendants claim that there was no malice in the statement when the first defendant sent the letter to the Ministry of Land Infrastructure & Transport in Japan, why did he include the statement that, "Owner had very bad records (sic) in maintaining vessels?" Aren’t the other two reasons he gave in the letter sufficient, they being, vessel is 30 years old and is going to ferry passengers amounting to 360 in PNG and the Authority is short of surveyors to survey the vessel?

71. Since he has given the bad maintenance record of the vessels by the plaintiffs as a reason for the request to the Japanese authorities to class the vessel, I am of the opinion that it was not necessary after all to give that as a reason for the Japanese authorities to class the vessel. I consider that the other two reasons he gave are sufficient and would have prompted the Japanese authorities to act on his request. This makes me incline to say that there was something more than just a request to the Japanese authorities to class the vessel; an ulterior motive for sending the letter to Japan with that statement.

72. And the ulterior motive is that, it would make life difficult for the plaintiffs to bring the vessel to Papua New Guinea. I make this observation because it is clear to me that the plaintiffs and the first defendant including other officers within the Maritime and Safety Division of the Department of Transport have not been in good terms or have a good working relationship for a very long time in so far as registration and operations of the plaintiffs’ vessels are concern. The second plaintiff makes it plainly clear about this in paragraph 10 of exhibit "P1" where he says, "We have faced a few instances where, due to the differences I have with various members of the Department of Transport, Maritime Division, Papua New Guinea when they have denied us provisional registration and as such we have been forced to seek registration in another country under a flag of convenience."

73. I believe the purchase of MV Morobe Queen by the plaintiffs and subsequent refusal by the defendants to inspect, certify and register it before it left Japan was the climax of the ongoing "differences" between the plaintiffs and the officers of the Maritime and Safety Division of the Department of Transport. The situation was made worse when the plaintiffs took out court proceeding against the first defendant and Jerome Ainus in OS No 237 of 2002 to compel them to register one of the plaintiffs’ vessels after they refused to do so. Even after the National Court issued the order on 24th July 2002, the first defendant and Jerome Ainus failed to do so and the plaintiffs issued contempt of court proceeding against them.

74. On 6th December 2002, the National Court found them guilty and issued a warrant of arrest for their immediate arrest and detention. In my view, this inflated the already tense situation where the first defendant and Jerome Ainus were cited for contempt of court and the ongoing "differences" between the parties. Whilst the Court’s decision in finding the two guilty of contempt of court came after the first defendant published the letter, I find that the issuance of the contempt of court proceeding and the ongoing "differences" between the parties were sufficient to cause the first defendant to make the defamatory statement in the letter so as to discredit the plaintiffs and make life difficult for them in bringing the vessel to Papua New Guinea. With respect, I reject the defendants’ counsel submission that the letter containing the defamatory statement was written independently of the contempt of court proceeding.

75. I reject this submission because when one considers the entire circumstances of the case, including the not so good relationship between the parties or the ongoing "differences", the issuance of the contempt of court proceeding, the first defendant’s expression of not being happy about the contempt of court proceeding and the disagreement over the class of MV Morobe Queen, the only reasonable inference that can be drawn here is that, the first defendant was actuated by malice when he wrote the letter to the Japanese authorities regarding the MV Morobe Queen.

76. In the circumstances, I find that the first defendant was actuated by malice when he wrote the letter to the Japanese authorities regarding the MV Morobe Queen. It follows that the defence of qualified privilege under section 11(1)(b),(c),(e)&(h)&2(a),(b)&(c) of the Defamation Act Ch 293 is not made out. I also find that they have not made out the defence under section 8(3) of the same Act which I had earlier referred to under the defence of fair comment.

77. The final matter I wish to mention before I conclude is that, I note that the plaintiffs’ counsel raised a preliminary objection in relation to the pleadings in the statement of defence of the defendants in his submissions. The objection is based in Order 8, rules 85 and 86 of the National Court Rules, in that the defendants did not specifically plead the defence of fair comment, truth and qualified privilege in their statement of defence. Their failure to specifically plead these various defences to a defamation action is in breach of the above rules and the Court should strike out the statement of defence and enter judgment on liability against them.

78. I have deliberately decided not to deal with the preliminary objection at the beginning of this judgment for two reasons. First, the preliminary objection was raised by the plaintiffs’ counsel at the commencement of trial on 20th July 2009 and I made a ruling that it is too late for the plaintiffs to raise the objection. I therefore had refused leave to the plaintiff to raise this objection. In my view, the question of leave to raise the objection has been decided and is res judicata. See my ruling in Rabaul Shipping Limited & Peter Robert Sharp -v- Cyril Mudalige & The State (No 1): WS No 20 of 2005 (Unnumbered & Unreported Judgment of 20th July 2009). For this reason, I see no basis for the plaintiffs to resurrect a matter that the Court has decided against in this action.

79. Secondly, and following on from the first reason is that, whilst I appreciate the plaintiffs’ strong contention that pleading the specific defence(s) is mandatory in defamation cases as was held by the Court in past cases like Wyatt Gallagher (supra) at p 26 where Kandakasi J, stated, "Noting the importance of the law on defamation and the rationale behind it, Order 8 Rule 85 requires a defendant in a defamation case to "specifically plead any defence of protection, justification or excuse of law." If such a defence is raised, it must be pleaded with particulars (r.86). This is a mandatory requirement that must be met. If a defendant does that, and the plaintiff says it was not published in good faith, then the next rule (r.87), requires the plaintiff to plead with particulars the absence of good faith. In my view, these rules give effect to the substantive law as discussed above." I am of the opinion that they are and have not been prejudiced by the lack of pleadings in the statement of defence of the defendants.

80. I find that they have and are fully aware and appreciative of the defence of the defendants, like the defence of fair comment, defence of truth and defence of qualified privilege. That is why they have been ably able to defend the action.

For these reasons, I consider it unnecessary and simply a waste of valuable time and resources for them to raise the objection and ask the Court to deliberate upon. It is not worth the Court’s indulgence.

Conclusion

81. In conclusion, I find the first defendant has published the letter which is defamatory of the plaintiffs and hold the second defendant liable under the principles of vicarious liability under the provisions of the Wrongs (Miscellaneous Provisions) Act Ch 291 since it is not disputed that the first defendant was acting in the course of employment when he published the letter containing the defamatory statement. I find them severally liable and enter judgment against them with damages to be assessed on a date to be fixed by the Court. The cost of the action shall be in the cause and time shall be abridged

Judgment and orders accordingly.

_________________________________________

Warner Shand Lawyers: Lawyers for the Plaintiffs
Fairfax Legal Lawyers: Lawyers for the First Defendant
Acting Solicitor-General: Lawyers for Second Defendant