Wan Hamzah SCJ:

The respondent sued the appellant in the High Court for damages for libel. Ajaib Singh J gave judgment for the respondent and awarded damages in the sum of RM30,000. The appellant now appeals to the Supreme Court against that judgment and award. The respondent alleged that the appellant had falsely written and published defamatory words of her and of her in the way of her occupation as a director of the Pusat Pertolongan Berhad (the Pusat) and in relation to her conduct therein, to certain persons in three letters dated 7 September 1981, 1 October 1981, and 2 October 1981 respectively, and in another letter dated 13 October 1981 with a list of proposed resolutions attached to it. She averred that in their natural and ordinary meaning those words meant and were understood to mean that during her term of office with the Pusat she had committed breach of trust and converted to her own use monies belonging to the Pusat and had committed a criminal offence, and in consequence she has seriously been injured in her character, credit and reputation and has been brought into public scandal, odium and contempt. We shall deal with the letters separately one by one and set out a copy of each of the letters fully and underline the words which the respondent alleged were defamatory. First we shall state the facts of the case.

The Pusat was a company limited by guarantee, incorporated in 1978 under the Companies Act. It was established for the main object of supporting an organisation for the treatment and rehabilitation of drug dependents. It obtained approval of the Minister of Welfare Services under the Dangerous Drugs Act to establish two private rehabilitation centres for the treatment and rehabilitation of drug dependants, one at Batu Gajah and the other at Kampong Bercham, Ipoh. The Private Rehabilitation Centre Rules 1981 made under the Act applied to the Pusat and its rehabilitation centres. The Rules required that proper accounts and records should be kept of all income and expenditure in respect of the operation of all funds at the disposal of the management committee of a rehabilitation centre. Among the first directors of the Pusat were Encik Yakob Abdul Rahman Scholar and Encik Azman bin Abdul Aziz. Subsequently the appellant, the respondent and Encik Chew Peng Loon also became directors. At the first meeting of the Board of Directors on 4 September 1980 Encik Yakob was confirmed as the executive managing director and Encik Azman as the secretary of the Pusat. It was resolved at that meeting that the account of the Pusat at the bank be operated by Encik Yakob with either one of the two directors namely the respondent and Encik Chew Peng Loon. On 29 June 1981 the second annual general meeting of the Pusat was held. The meeting was informed that Encik Yakob was then in West Germany on two years leave of absence from his appointment as the executive managing director. At that meeting the appellant was elected as the chairman of the board of directors and also as the executive managing director, and the respondent was re-elected as a director. In the minutes of that annual general meeting it was recorded inter alia as follows:

The chairman noted that as the Statement of Accounts and Reports for the years 1979 and 1980 are incorrect, he has directed the staff to check the book, receipts, vouchers etc. of the Foundation for this period. He expected the checking exercise to be completed within two months. The Chairman also pointed out that the Auditors Report as required under the Companies Act 1965 was not attached to the Financial Statements being currently reviewed.

The meeting decided that the Statements of Accounts for the period 1 January 1979 to 31 December 1980 be re-audited and submitted for consideration at an extra-ordinary general meeting to be held within two months.

On 26 August 1981 an emergency meeting of the board of directors was held to consider a petition sent by the staff of the Pusat to t