Defamation claims require proof of malice and publication of statements harming a party's reputation; legitimate defenses include justification, qualified privilege, and fair comment.

James Foong J:

The Plaintiffs' Claim

The plaintiffs are advocates and solicitors practising under the name and style of M/s Cheah Teh & Su (CTS) in Kuala Lumpur. They claim that the defendants by two letters (the letters) written by the defendants' solicitors, M/s Wee Choo Keong & Faaiz (M/s Wee Choo Keong) dated 15 August 1995 and 18 August 1995 respectively have defamed them.

Background

Before I proceed to set out the alleged defamatory statements in the letters it is necessary to explain the background leading to the issue of the letters.

The 1st defendant is the matriach of a Chinese family of 8 children - 3 boys and 5 girls. Members of this family, through holding companies and by themselves, owned 13 pieces of land at Jalan Imbi, Kuala Lumpur. For ease of reference, I shall refer to them jointly as "the vendors". For these lands which adjoined each other I shall collectively refer to them as the "said property". Part of the said property were charged to banks, but due to differences among family members the bank loans were not repaid resulting in foreclosure actions by the banks. CTS were engaged, principally by the 1st defendant, to defend these actions and to negotiate with these bankers for a settlement of the debts with anticipated proceeds from the sale of the said property. At that material time there was a demand for the said property, probably due to its location. One such interested party was Kim Huat Engineering Sdn Bhd (Kim Huat) who agreed to buy it for RM30 million. For this deal Kim Huat paid a sum of RM300,000 in consideration for an option to purchase. In this option, there was a clause to allow both the purchaser and the vendors to opt out of this sale and purchase by a forfeiture of the consideration or a payment of a penalty of a sum equal to the consideration respectively.

Soon after the granting of this option, a more attractive offer was received. This new party was introduced by the 1st defendant's son - Tony. This new potential buyer offered to purchase the said property for RM34.8 million despite being made aware of the complications that might arise by the necessity to terminate Kim Huat's deal.

At the first meeting held with this new group of potential purchaser, the 1st defendant attended. According to her she was introduced to two persons by name of Michael Leong and Francis Lee. These two, according to her, held themselves out to be from a public listed company known as Chongai Corporation Bhd (Chongai). As the new purchase price was alluring, the vendors of the said property decided to terminate the option granted to Kim Huat and sell the said property to the new purchaser. Lawyers were called in to draft the sale & purchase agreement to the new purchaser. At the insistence of the 1st defendant, CTS were engaged by the defendants to act for them in this transaction. The 3 sons and 1 other daughter having refused to join in this appointment, retained another firm of solicitors by the name of M/s Hishamuddin & Lee (M/s Hishamuddin) to act for them. So for this sale, there were two firms of solicitors acting for the vendors. Acting for the purchaser was the legal firm of M/s Paul Ong & Co. (M/s Paul Ong). Representing the financiers who gave the loan to the purchaser to complete this purchase was another law firm called M/s Kumar Jaspal Quah & Aishah (M/s Kumar).

Due to the large number of vendors, a few sale & purchase agreements (agreements) were executed. The purchaser named in all these agreements was one Madam Yeo Meu Siang (Md. Yeo). 10% of the purchase price was paid at the time when the agreements were executed. For the amount which the defendants were entitled, it was paid to CTS. Upon receipt of this, CTS forwarded this amount to the banks which