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Cyclamen Ltd v Minister of Lands [2007] VUSC 51; Civil Case 119 of 2005 (22 May 2007)

IN THE SUPREME COURT
OF THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No. 119 of 2005

BETWEEN:

CYCLAMEN LIMITED
First Claimant

AND:

ANDREW JAMES HOGARTH & DEBRA ANN HOGARTH
Second Claimants

AND:

THE MINISTER OF LANDS
First Defendant

AND:

THE ATTORNEY GENERAL
Second Defendant

Coram: Justice C. N. Tuohy

Dates of Hearing: 14 May 2007
Date of Judgment: 22 May 2007

Counsel: Mr. Willie Daniel for First Claimant
Second Claimants in person
Mr. Stephens for First and Second Defendant

RESERVED JUDGMENT OF JUDGE C N TUOHY

Introduction

1. This is claim for damages for libel against Paul Telukluk (although he is identified only by office). It arises from a letter to the Editor of the Daily Post which he wrote when he was Minister of Lands.

Factual Background

2. The parts of the letter about which the Claimants complain are set out in Para 4 of the Amended Claim in the original Bislama with agreed English translation beneath:

(i) "..... Decision ia mi tekem from ikat wan investa we iholem wan residensol lis mo long kraon ia hemi bildim wan commersol/tourism bisness finis bifo hemi requestem blong modifae status blong lis blong hem...."

"...... I took this decision because there is an investor who holds a residential lease and established a commercial/tourism business on the land before he even applied to change the status of his lease........."

(ii) "Gavman imas tekem wan klia posisen mo mekem se ol investa imas respectem lo long Vanuatu. Ino gud Gavman imodifae lo blong acomodetem tingting blong wan investa."

"The Government needs to take a clear stand and ensure that all investors comply with the laws of Vanuatu. It is not good if the Government changes the laws just to accommodate the ideas of one investor."

(iii) "Long nara kaontri olsem Australia, yu no save bildim wan commersol bilding long wan residensol eria."

"In other countries such as Australia you cannot erect a Commercial building in a residential area."

It was published in the issue of 31 May 2005 under the heading "Development long 1st Lagoon".

3. The letter needs to be put in context. It was obviously prompted by a report (in English) in the Daily Post issue of 22 May 2005 under the heading "Minister bans commercial development all along the 1st Lagoon". Included in the report was the following:

"Minister Telukluk took the decision reportedly to protect Government because of an irate foreign investor who was prevented from developing the Seaside Resort as a result of complaints from residents and ended up taking the Minister for Lands and Port Vila Municipality to Court".

4. Cyclamen Ltd is the developer of the Seaside Resort. Mr. and Mrs.Hogarth are the directors and shareholders of Cyclamen Ltd.

5. The wider factual background is set out in Paragraphs 2-18 inclusive of this Court’s judgment in CC 43 of 2004, an application for judicial review brought by Cyclamen Ltd against the Minister. The parties have agreed that those facts from part of the facts in this case. The relevant parts of Paragraphs 2-18 in CC 43 of 2004 are set out below:

2. Cyclamen has at all relevant times been the owner of leasehold title 11/0B31/048 which in 2000 was a vacant piece of land situated in a residential zone at Captain Cook Avenue overlooking First Lagoon in Port Vila.

3. The lease was a residential lease originally granted by VULCAN for a term of 50 years from the Day of Independence, 30 July 1980.... When VULCAN was abolished, all land owned by it reverted to the Government: the Land Reform (Revocation) Order No. 16 of 1988.

4. The lessee covenanted in schedule 2 as follows:

To use for Designated Purpose Only

(c ) Not to permit or suffer any part of the leased land to be used for any purpose other than for ................................................

and not to use or permit the use of the leased land for any noxious noisome or offensive art trade business or occupation or calling or in any such manner as to cause annoyance nuisance or inconvenience to occupiers or owners of adjacent premises or the neighbourhood, PROVIDED that the lessee may with the written consent of the lessor first had and obtained alter the use of the demised land.

The parties seem to have been unaware of the gap in the covenant until it was pointed out at trial.

5. In 2000, Cyclamen proposed to build and operate a tourist resort on the land. To that end, it set about obtaining the necessary consents and approvals. On 31 October 2000, the Minister as lessor signed a consent to registration of the Surrender of Residential title No. 11/0N31/048 "for the purposes of creating a new Commercial/Tourism lease title". There is no evidence of any agreement as to the terms of a new commercial lease, not even its duration.

6. On 8 February 2001, Cyclamen’s application for planning permission was granted by the Council on conditions. The development was to include the reclamation of some land on the edge of the lagoon which would become part of the leasehold title. Approval for this under the Foreshore Development Act (Cap. 90) was given by the Minister of Internal Affairs on 27 February 2001.

7. In May 2001, adjoining neighbours, Mr. and Mrs. Ozols, issued proceedings seeking to prevent any commercial development of the land. At that stage building work had been started. On 21 December 2001, Coventry J issued interim injunctions restraining further development work. The Minister was restrained from issuing any negotiator’s certificate or new lease to Cyclamen.

8. On 8 March 2002, Coventry J delivered his substantive judgement. He refused to make the declarations and orders sought and discharged the interim injunctions. In the course of his judgment (at p7) he recorded the position with regard to the lease:

Consent to the surrender of the lease of this land with a view of creating a new Commercial Tourism lease title was given by the Minister on 31st October 2000.

The Minister has not issued a new lease. He is awaiting the report of the Environment Unit concerning the impact of the proposed foreshore reclamation and the outcome of these proceedings, (Affidavit of Levi Tarosa dated 27 February, paragraph 8 and 9). Mr. Patterson, on behalf of the first defendants has sought a negotiators certificate in respect of the land it is proposed to reclaim. The first defendants have yet to conclude their foreshore reclamation application.

It is a matter of the various authorities to make their decision concerning the reclamation. It is for the Minister of Lands in the light of this judgment and the reclamation decision to decide whether or not to grant a negotiators certificate and what, if any, new lease or leases.

9. In April 2002, with Council approval, construction recommenced. On 28 May 2002, the Minister issued a negotiator’s certificate to Cyclamen which specified the leasehold title 11/0B31/048 and was "for reclamation purposes".

10. Over the succeeding months of 2002, Cyclamen continued to construct the development and complete various necessary steps towards obtaining a new lease which would include the reclamation.

11. On 24 October 2002, Mr. Douglas Patterson of Cyclamen’s agent, Island Property, wrote to the Director of the Department of Lands the following letter:

"Re: Cyclamen Ltd (Preparation of New Commercial/Tourism Lease Title)

Further to our meeting on 23rd October we confirm that the lessee Cyclamen Ltd is now ready to draw up and register their new lease.

This was previously approved as well as the foreshore reclamation which is now completed.

The existing number is 11/0B31/048. The new title number is 11/0B31/076.

The new title has been revalued by the Government valuer to establish a new EMV (Estimated Market Value) of the land for the purpose of determining the annual lease rent. We would like to know if in creating this new lease any further costs are involved other than the new stamping and registration fees.

Please let us know as soon as possible or contact us if you require additional information.

No response has been received to that letter.

12. Over the following months, construction continued. In August 2003, Cyclamen obtained the relevant liquor licences and on 28 August 2003 opened a restaurant and bar at the premises.

13. On 15 September 2003, Cyclamen received a letter dated 21 August 2003 from the then Minister of Lands, Mr. Titek, which is set out in full below:

Re: Revocation of Consent to Surrender Title 11/0B31/048 dated 31 October 2000

It has come to my notice that Lease Title 11/0B31/048 now as it stands is a residential lease and not a commercial lease. I am also aware that you are currently building an avenue for commercial/tourism operation undertakings that in the current lease has default your current development lease conditions. This is a serious breach of condition in your current lease and could cause you financial loss as well as losing the property itself. While it is the Government’s priority to expand tourism facilities in Vanuatu and in particular, Port Vila, I as the Minister responsible for Lands, must ensure that typical business operations are carried out in appropriate lease classes and perhaps zonings.

In light of the above, I as Minister responsible for Lands hereby resolve as follows:-

1. Before I serve you forfeiture notice for breaching your current lease use for designated purpose only "residential", I instruct that you proceed to alter the use of the demised land from residential to commercial/tourism immediately.

2. The consent issued to you by former Minister back in the year 2000 is hereby revoked and pronounced null and void. You need to apply for a new consent through the Department of Lands outlining the development plans for your project.

3. The new commercial/tourism lease must cater for relevant and appropriate conditions, which would conform with the Land Leases Act, other applicable laws or by-laws and those that would not cause annoyance or nuisance to your neighbourhood.

4. If you failed to comply as instructed, I will have no other options but to enforce Section 45 (a) and issue you forfeiture notice. I am giving you 3 weeks period the most to do so commencing on the date of this letter.

It is my amicable wish to see that you contact your tourist business operation in a commercial lease other than a residential lease and in a manner that conform with relevant provisions of the Land Leases Act.

I look forward to your seriousness in complying with my instructions.

14. Cyclamen stopped all work and trading at the site as a result of the letter. On 24 September 2003, Island Property wrote to the Director of Lands enclosing copies of a surrender of the existing lease and a new lease both executed by Cyclamen together with the relevant signing fees for approval and signature by the Minister. Unfortunately, a copy of the proposed new lease has not been put in evidence so the Court does not know the terms included in it except insofar as they can be deduced from the subsequent correspondence.

15. On 29 September 2003, Island Property wrote to the Minister, Mr. Titek, setting out the foregoing history in detail, stating that Cyclamen had in fact obtained all necessary approvals and had been ready to sign a commercial lease for a year. The letter asked the Minister to sign the new lease.

16. On 28 October 2003, the Minister gave a notice to Cyclamen under Section 45 of the Land Leases Act ("the Act") which is set out in full below:

Notice Under Section 45 of the Land Leases Act [Cap. 163]

Title: No: 11/0B31/048

To: Cyclamen Ltd

I hereby give you notice under Section 45 of the Land Leases Act [Cap. 163] that if you do not remedy he breach of your lease as specified below within 7 days of the date of this notice, I will take action to have your lease Title No. 11/0B31/048 forfeited.

Your use of the land the subject of lease Title 11/0B31/048 for commercial/tourism purposes is in breach of your lease, as the lease only permits you to use the land for residential purposes. Therefore, you must stop using the land for any purpose other than residential land, including the construction of commercial premise, within 7 days.

Dated: October 2003

Minister of Lands.

17. Further correspondence followed which culminated in a letter of 2 February 2004 from the Attorney- General to Cyclamen’s solicitors in which it was advised that the Minister was prepared to enter into a commercial lease but only on certain terms relating to the nature and size of the development. As to duration, Cyclamen had sought a 75 year term but the Minister was not prepared to grant that unless Cyclamen agreed to forego all claims it might have against the Council or the Government arising from the approvals given. Otherwise the duration offered was the balance of the existing 50 year term.

18. The terms offered were unacceptable to Cyclamen....

6. Otherwise both sides took the risky course of presenting minimal evidence to the Court. The claimants relied upon one sworn statement of Mr. Hogarth, consisting substantially of exhibits. He was permitted to supplement that with oral evidence to establish that a written request for an apology had met with no response. The defendants presented no evidence, their counsel confirning himself to a few questions in cross-examination designed to establish that it was not until 24 September 2003 that Cyclamen’s agent forwarded to the Minister a new commercial lease for his signature.

Issues

7. In the course of the hearing, counsel (with Mr. Hogarth’s acquiescence) agreed upon the issues. They are:-

a) Would reasonable persons reasonably believe that the words complained of referred to the first and second claimants respectively having regard to the context and any proven extrinsic facts.

b) Are the words complained of in their natural and ordinary meaning defamatory.

c) Are the words set out in Paragraph 4 (i) of the Amended Claim true in substance and in fact.

d) Are the words in Para 4 (ii) and (iii) of the Amended Claim insofar as they are matters of fact, true in substance and in fact, and insofar as they are matters of opinion, fair comment on a matter of public interest.

e) In making any comment, was the Minister actuated by express malice.

Discussion

8. There is no post-Independence Vanuatu legislation relating to defamation. Therefore pursuant to Article 95 (2) of the Constitution, the British and French laws relating to defamation in force and applied in Vanuatu at Independence form part of the law of Vanuatu provided they are not incompatible with the independent status of Vanuatu and taking due account of custom.

9. The British law of defamation at 1980 was the common law modified by some legislation, most importantly the Defamation Act 1952 (UK). There is nothing in it which is incompatible with the independent status of Vanuatu. It was applied without comment by the Court of Appeal in Moli v Heston [2001] VUCA 3; CAC 11 of 2000 (27 April 2001).

10. Neither party made any reference to the French law relating to defamation. Nor was there any reference to custom (which could possibly have some application in the area of apology and reconciliation).

11. The Court will therefore adopt the legal framework within which the parties themselves have chosen to present their cases, that is, the British Law.

Issue (a)

12. The Claimants were not named in the letter. However, they submit that there are extrinsic facts which would enable reasonable persons knowing those facts to reasonably believe that the letter referred to them.

13. The facts that they rely on are:-

a) From its contents and date, it can be deduced that the letter is a response to the earlier report published on 22 May 2005.

b) The heading of the letter is "Development long 1st Lagoon" and the earlier report specifically named the development as "the Seaside Resort"

c) Cyclamen Ltd was the developer of the Seaside Resort at 1st Lagoon and Mr. and Mrs. Hogarth are the people who own and control Cyclamen.

14. In my view reasonable persons reading the letter and knowing those facts would reasonably believe that the letter referred to both Cyclamen Ltd and the Hogarths, who are their company’s alter ego. How many such persons there actually were is a different issue.

Issue (b)

15. The claimants claim that a reasonable reader would understand the letter to mean that they carry on their business without regard for the laws and authorities of Vanuatu; that they do not want to comply with the relevant laws and want the Government to agree or to change the laws to suit their interests; that they do not have the right to invest and do business in Vanuatu because they have not met the statutory requirements but are trying to force the Government to allow their development anyway; and that they have low moral standards and low standing in business and people should not do business with them. All these meanings are alleged in one place or another in their Amended Claim.

16. The defendants submit that the words are not capable of being understood in the was alleged, and that in their natural and ordinary meaning they are not defamatory.

17. The natural and ordinary meaning of words is the meaning in which the words would be reasonably understood by ordinary people using their general knowledge and common sense. This includes any inferences or implications which a reasonable reader would draw from the words: Jones v Skelton [1963] 3 ALL E.R.952,958 per Lord Morris of Borth –y- Gest. Words are defamatory if they lower a person in the estimation of right-thinking people generally: Sim v Stretch [1936] ZALL E.R. 137.

18. Applying those criteria, I consider that in their natural and ordinary meaning, the words mean:

a) That the claimants established a commercial/tourism business on the land before applying to change the status of the lease of the land from residential to commercial. This is a plain and literal meaning. (I note that the English translation of the sentence in Paragraph 4 (i) contains the word "even" which itself carries an inference. It is not in the original Bislama and I have ignored it).

b) That in doing so, the claimants have failed to comply with the laws of Vanuatu, either consciously or at least carelessly. This meaning is inferred from the totality of the statements in Paragraph 4.

c) That the claimants have conveyed to the Government a request to change the law to accommodate their particular situation.

That is a meaning which is inferred from the last sentence in Paragraph 4 (ii).

19. I reject all the other more pejorative meanings contended for by the claimants. They would not be taken by the ordinary reasonable reader. The claimants themselves may have attributed those meanings to the letter but that is not the issue in law.

20. I consider that in their natural and ordinary meaning as set out in Paragraph 18 (a) and (b) above, the words are defamatory. In the meaning set out in Paragraph 18 (c) above, I consider that they are not defamatory. While people might think the claimants hopeful, or even bold, in wanting a law change to be made for them, those are not characteristics which would cause any right thinking person to think any the less of them for it.

Issue (c)

21. The onus of proving the truth of the defamatory words in the meaning which I have found them to bear lies on the defendants. There is no dispute about the facts here. The defendants rely upon the fact that the claimants built their development and started operating it before they had actually been granted a commercial lease.

22. I find that the defendants have not proven the truth of the words in substance. On the evidence, the claimants obtained the then Minister of Land’s consent to the surrender of the existing lease for the purposes of the grant of a new commercial lease in 2000 before they ever started building. In substance that was approval in principle for the change in use. In fact, assuming schedule 2 of the lease is rectified to actually record residential as the permitted use, it arguably amounted to the written consent of the lessor to alter that use.

23. Then followed all the events set out above: the grant of planning permission by the Council, the commencement of construction; the unsuccessful attempt by the Ozols to prevent commercial development in a proceeding to which the then Minister was a party; the subsequent issue by the Minister of a negotiator’s certificate to Cyclamen; the unanswered letter from Island Property of 24 October 2002 that Cyclamen was ready to draw up the new lease (and referring to a meeting with the Director of Lands the day before); and the continuing construction throughout 2002 and 2003.

24. It is an irresistible inference from all that evidence that the Minister of Lands for the time being (not Mr. Telukluk) knew throughout what the position was with regard to the lease and the construction of the development; and further that Cyclamen and its principals believed they were acting within the law; and that the actions and inaction of the Minister for the time being were at least partially responsible for that belief.

25. A letter which conveys that the claimants established their commercial development without applying to the Minister to change the status of the lease and were thus consciously or carelessly not complying with the laws of the country is, in substance, not true.

Issue (d)

26. The defence of fair comment only applies to comments recognisable as such. Comment in order to be justifiable as fair comment must not be so mixed up with facts that the reader cannot distinguish between what is comment and what is fact: Hunt v Star Newspaper, Co Ltd [1908] 2KB 309, 319. In this case, I cannot separate anything out as recognisably a comment on facts.

27. In any event, if the sting of the libel in this case was intended to be a comment rather than a statement of fact, it is not one which could be fairly and honestly expressed with knowledge of the facts referred to above. Therefore this defence cannot succeed.

Issue (e)

28. In view of the finding on issue (d), it is not necessary to address this.

Damages

29. The claimants provided no evidence relating to damages. It does not follow that their claim fails entirely as the law presumes that the publication has caused damage to the claimants.

30. The basic rule of the common law in defamation cases as in other civil claims is that damages are awarded as compensation for injury, not as a punishment. In Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; [1961] 117 CLR 118,150, Windeyer J. said:

"Compensation by damages operates in two ways – as a vindication of the plaintiff to the public and as a consolation to him for wrong done. Compensation is here a solatium rather than a monetary recompense for harm measurable in money".

31. The figure for damages for libel cannot be arrived at by any purely objective computation. However several factors are commonly taken into account including the seriousness of the libel, the extent of publication, any injury to the claimant’s feelings and any apology.

32. The libel in this case cannot be described as a serious one. It does not ascribe any serious moral failing or particularly heinous conduct to the claimants. There is no objective evidence of any loss of reputation and no evidence of any financial loss. There is no evidence of injury to feelings although I am prepared to assume that the Hogarths suffered some.

33. There is little evidence of the extent of publication. There is no evidence about the circulation or readership of the Daily Post. The Court is prepared to take judicial notice of the fact that the paper circulates in Port Vila and Luganville but is not prepared to speculate about figures except to conclude that they must be very small when compared to metropolitan newspapers in Australia and New Zealand

34. The Court also takes judicial notice of the fact that letters to the Editor are published on the inside pages of the paper. Because the claimants were not identified by name, the only readers who would be aware that they were the subject of the letter are people who knew who the developers of the Seaside Resort were.

35. In addition, the letter was in Bislama which means that it could not be read by those Daily Post readers who do not read Bislama – probably a proportion of the expat readership who might know the Hogarths.

36. In summary, there was publication of a relatively minor libel on one occasion only on the inside pages of a small newspaper, and the subjects of it were identifiable only by that section of the readership who already knew the identity of the developers of the Seaside Resort and were able to read Bislama.

37. An appropriate apology should have been enough to resolve this matter without litigation. Unfortunately the claimants’ request for an apology apparently did not receive the courtesy of a reply.

38. The only award of damages justified is a very small one. The judgment itself acts as vindication of the claimants. Weighing all relevant factors, I award damages to Cyclamen Ltd in the sum of VT 10,000 and to Mr. and Mrs. Hogarth the sum of VT 40,000.

Miscellaneous

39. The first defendant was named by his office, the Minister of Lands, but a claim for libel is against the individual who published it, not his office. The judgment must therefore be against Paul Telukluk. Indemnity for him from the Government is an internal matter between them. There was never any basis for the Attorney-General to be named as a party to this claim and the judgment is not against him.

40. There were also claims for slander of Cyclamen’s title to the lease and for malicious falsehood. As to the first, it was completely misconceived as the letter had nothing to do with Cyclamen’s title. As to the latter, there was no proof of special damage or that the words were calculated to cause pecuniary damage which is a necessary part of the cause of action. A case is not strengthened by adding patently untenable causes of action to the real one.

41. Leave is reserved to the parties for any application in respect of costs to be made within 30 days, assuming costs cannot be agreed between then.

Dated AT PORT VILA on 22 May 2007

BY THE COURT

C.N. TUOHY
Judge