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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT SUVA
Action No. 338 of 2003
Between:
Trade Air Engineering (West) Limited
1st Plaintiff
Nitendra Singh of Nadi, Company Director
2nd Plaintiff
Peni Lesuma of Nadi, Company Director
3rd Plaintiff
Jagdishwar Singh of Suva Company Director
4th Plaintiff
And:
Mechanical Services Limited
1st Defendant
Khushal Sattyam,General Manager
2nd Defendant
Appearances: Mr C.B.Young for the plaintiffs
Ms S Devan for the defendants
Dates of hearing : 25th July, 2011, 21st and 22nd February, 2012
JUDGMENT
The first part of the article complained of titled "Nadi Airport's new- look terminal's 'not so cool' job". Why its million dollar cooling system's failing", was in the following words:
" Air-conditioning technicians know what VRV stands for. It's the abbreviation for Variable Refrigeration Volume. In lay person's terms, it means your air-conditioning unit has the ability to vary the volume of refrigerant, or cool air, it offers. Once cool air is flowing into the room, the unit automatically goes into reduced power to provide a comfortable level of coolness. A bit stiff to install, but it saves a lot of power in the long run.
Now, the new-look terminal at Nadi International Airport, according to tender documents, would have VRV. It's the in-thing, of course, and all major airports around the globe are cooled by the VRV system. Not only does it fulfil the job well, it provides affordable power bills to owners too.
Many of the visitors who toured the just renovated complex with President Ratu Josefa Iloilo minutes after he opened it late last month would not have known about VRV and all that.
But they would have felt the humidity when they walked out of the immigration check-in counters and down to the baggage claim area. The air-conditioning unit was obviously not working as well as the newly-installed escalator that links the immigration counter on the first floor to the baggage area on the lower level. Aides had to help the President down the stairs as a result.
Enquiries by Fiji Business revealed that the air-conditioning unit had been switched off for some days before the commissioning.
The problem is associated with the installation of a system other than VRV as specified in the tender documents. Because this standard ducted air-conditioning system chews a lot of power, it blew up the terminal's transformer when in full operation.
Airport workers say a new and more powerful transformer had to be brought before air conditioning at the baggage claim area goes on full steam again.
The words ascribed to the 2nd defendant, were contained in the second half of the article and read as follows:
Kushal Sattyam, general manager of Mechanical Services Limited, official supplies of Daikin VRV air-conditioning system in Fiji, believes the costly debacle would have been avoided had the contractor stuck to the specifications of the tender.
"That's the problem when you bypass the specifications," Sattyam told Fiji Business.
"The power requirements of VRV are on part with the power capacity at the airport.
"There wouldn't be any problem had they installed VRV and it would save AFL a lot more money too."
VRV, according to Sattyam is best suited for tropical countries like Fiji as it is the most efficient and most economical to run. Its advantage lies in the fact that it uses only one main condensing unit connected to many blower units. The unit will only kick into action on demand, Sattyam said.
"The air-conditioning system now installed at the terminal is the standard ducted system which operates at a very, very high cost".
He said the air-con contractor Trade Air, although not a Daikin VRV agent, could have still installed a VRV system that belongs either to Sanyo or Mitsubishi.
Trade Air's general manager Peni Lesuma was not keen to talk about his $3.5 million contract at the airport. He said there was no truth in the claims that the system had installed was causing problems. The contract has been "completed" as far as he was concerned.
.....
Sattyam confirmed his company Mechanical Engineering had also put in a tender for air conditioning contract at Nadi. His tender was $1 million less than Trade Air's, but Trade Air was the choice of the main contractor ISF-Neocorp, a joint venture between Singapore's Neocorp and Tappoo Group's International Shop Fittings". (emphasis added)
The plaintiffs state the said words, in their natural and ordinary meaning, were understood to mean:
(i) The plaintiffs are incompetent and unreliable.
(ii) The plaintiffs cannot be trusted to complete a contract satisfactorily or properly.
(iii) The plaintiffs have cheated the airport authority by installing an inferior system to that required by the specification to tender.
(iv) The plaintiffs have installed an inferior system to make an exorbitant profit.
(v) The plaintiffs secured the contract for a very high price by bribery or other devious means.
The statement of claim alleges said words referred and were understood to refer to each of the plaintiffs and that the words published were false. The causes of action are twofold. The first is defamation and the second is malicious falsehood.
The particulars of falsity are as follows:
(i) the terminal's transformer did not blow up.
(ii) if the transformer did blow up it was not caused by the installed air conditioning unit.
(iii) the power blackout at the official opening was not caused by the installed air conditioning unit.
(iv) the installed air conditioning unit is a VRV equivalent, namely Mitsubishi VRF.
(v) the installed VRF system does not draw any extra power than VRV system.
(vi) the installed air conditioning unit is in accordance with, and fully complies with, the specification to tender.
(vii) specification to tender was not bypassed.
(viii) the air-conditioning unit now installed is not a standard ducted system.
(ix) the air conditioning contract was not for $3.5 milion.
(x) Mechanical Services tender was not $1milion lower than the 1st plaintiff's tender.
(xi) The air conditioning tender was not decided solely by the main contractor, Neo-ISF joint venture.
There follows a plea of malice, the particulars of which are, as follows:
(i) The 1st defendant is a trade rival of the 1st plaintiff.
(ii) The 1st defendant was the unsuccessful tenderer for the airport contract.
(iii) The 1st and/or 2nd defendant caused to be published the words complained of knowing them to be false or recklessly not caring whether they are true or false and/or with no honest belief that they were true. In doing so the 1st and/or 2nd defendant was actuated by the dominant motive of damaging the 1st plaintiff and its said business.
The statement of claim proceeds to state that the 1st plaintiff has been seriously injured in its business reputation, goodwill and also suffered a general loss of business. The 2nd, 3rd and 4th plaintiffs claim that they have been gravely injured in their personal reputation and business reputation and have suffered considerable distress and embarrassment. The plaintiffs claim against the defendant's jointly and severally $300,000.00 as damages, including exemplary and special damages. Special damages has been pleaded. The first plaintiff claims $200,000.00 as damages, including general and special damages.
is that:
(i) The 2nd defendant, if he made comments, did not do so as employee of the 1st defendant.
(ii) The 2nd defendant was not asked, if he could be cited as a source .The telephone conversation the 2nd defendant had with the reporter from the Fiji Islands Business, was a private one and not intended to be published to any third parties.
(iii) The representative of the Fiji Business magazine did not verify with the defendants if they could be named in the article.
(iv) The defendants had no responsibility and had nothing to do with the publication or distribution of the words mentioned.
(v) There is no mention in the article, of the 1st plaintiff, in its full title and no mention of the 2nd or 4th plaintiffs at all.
It is also stated that the words in their natural and ordinary meaning, were incapable of attracting the meaning attributed to them and the 2nd defendant was if at all, expressing an opinion honestly and there was no malice in what was said .
Finally, there are set out the following pleas: that the words were fair comment based on matters of interest to the construction and related industries and no malice was intended; that the words were justified and can be fully substantiated.
The writ was filed on 14th August, 2003. After an interval of almost 8 years, in May, 2011, Islands Business International Ltd had published an apology to the 1st plaintiff, as follows:
"To: Trade Air Engineering (West) Limited
The July 2003 issue of this magazine reported on the air conditioning upgrade at Nadi Airport.
The report was titled "Nadi Airport's new-look terminal's not so cool" job. Why its million dollar cooling system failing.
We reported Trade Air Limited's tender, accepted by the Nadi Airport Authority was $1 million more than the tender of Mechanical Services Limited. We accept the way the article was worded could have been construed by readers that the contract was secured by bribery or other devious means.
We also reported Trade Air Limited had not installed the air conditioning system at Nadi Airport in accordance with the tender specification and had instead installed an inferior system.
The implication could be reached by readers of this article that Trade Air Limited was an incompetent and unreliable company and had cheated the Airport Authority by installing inferior air conditioning which resulted in a system that would not meet the requirements of the Airport Authority.
Fiji Islands Business is now satisfied and accepts the implications of the contents of the article in the July 2003 issue cannot be substantiated and wishes to express its sincere regret to Trade Air Engineering (West) Limited and to its directors for any embarrassment and inconvenience which may have been caused to them...
At the hearing, two building services engineers, the journalist who wrote the article and the 2nd plaintiff testified for the plaintiffs. The 2nd defendant gave evidence for the defence.
4.1 Philip Temo, a building services engineer said that the article had been brought to his attention in late July,2003, by the management of Matapo Ltd, the developers of the Momi Bay development. He had been involved in a number of projects in Fiji, including Sheraton Resorts, Fijian Resort and the Momi Bay development.
He was a Consultant for the Momi Bay development and was in overall charge of the tenders for the air-conditioning works. He testified that Trade Air was not invited to tender for the air-conditioning works due to the article, which was "widely discussed". The 1st defendant and Kooline were instead, approached. The 1st defendant was the successful party and the contract price was $ 6 to 6.5 million. He said that contractors have a general mark up profit which ranged from 10% to 25 %, with an average of 15 %. The mark up for material was 10 to 15 % and the labour mark up was 15% to 25 %.
It transpired in cross-examination that this witness had completed several projects with the 1dt defendant and not many with the first plaintiff. He could not recall any other major project that the 1st plaintiff was engaged in, other than the Nadi airport. The witness did not have copies of the tender specifications nor the contract signed for the Momi Bay project and said he spoke from memory, as to the contract price.
4.2 The author of the article, Samisoni Pareti, a Journalist working for the Fiji Islands Business magazine, testified to the background to the article, as follows. In June, 2003, he had attended the commissioning of the new run-away at the Nadi airport terminal. Upon seeing His Excellency, the late President Ratu Iloilo being carried down the escalator, he had made inquiries and was informed by employees of the airport, that there was a problem with the power at the airport. The escalator could not be switched on, as the transformer would blow. When Samisoni Pereti had returned to Suva, he was told by his Editor to speak to one of the directors of the 1st defendant. Having found the 2nd defendant's contact information, he had phoned him, introduced himself and said he was interviewing him for the magazine. A conversation ensued, during which the 2nd defendant then, made the statements attributed to him in the article .
Samisoni Pereti stated that the 2nd defendant made no reservations about publishing the statements made by him, when he had told him that he would quote him in an article to be published in his magazine. Samisoni Pereti had called the 2nd defendant, after the writ in this case was filed too. The 2nd defendant, had then, said he stands by what he said .
In cross-examination, Samisoni Pereti denied that he had not advised the 2nd defendant that he was going to be quoted. He said a draft, is sent only if requested. There was no request by the 2nd defendant. It transpired in cross-examination, that airport employees had informed him that Variable Refrigeration Volume (VRV) was not installed in the airport and that the "standard ducted (air conditioning) system" installed "operates at a very, very high cost"; this, the witness said, was confirmed by the 2nd defendant.
He confirmed that he agreed with the contents of the apology made by the Managing Director of his magazine, as he had subsequently learnt that the technical information given by the 2nd defendant, that VRV and VRF are not the same thing, was incorrect: they were basically the same. The plaintiffs had withdrawn the action filed against Islands Business International Ltd .
He said about 10,000 copies of the magazine were printed, in 2003. The range of circulation targeted the private sector in Fiji, Australia and New Zealand; governmental and non-governmental organisations in Fiji and the Pacific.
4.3 The next witness called by Mr Young, counsel for the plaintiffs was Maurice Ruggerio. His speciality was in building services, including air-conditioning services. He said that he was familiar with the services provided by the 1st plaintiff and the 1st defendant . He had been the service engineer for the Suva City Council Civic House with the 1st defendant, when VRV was installed for the first time in Fiji. The matter of the transformer explosion, as stated in the article was raised at a meeting of the Council of the Fiji Institution of Engineers, of which he was a member. The witness had explained to them that the particular blow up had nothing to do with the technology used for the air-conditioning. He said that the article was spoken about for 6 months, in his circle of consultants and contractor builders, since the situation at the Nadi airport was still precarious .
He had designed the same VRV/VRF air-conditioning system for Jacks of Fiji. Jacks of Fiji had expressed their concerns with the contents of the article to him, since the 1st plaintiff had approached Jacks of Fiji, to provide this installation. He said Trade Air had not carried out any work for them hitherto. The 1st defendant was their contractor. He had convinced Jacks of Fiji of the inaccuracies contained in the article, as they were adamant that Trade Air were incapable of carrying out the project. He admitted however, that the article had not stopped Jacks from engaging the 1st plaintiff.
There was no difference between VRV and VRF, it was the same technology. VRV, he said was a Daikin trademark. VRF, was the term used by other manufacturers, including Toshiba and Mitsubishi. The witness refuted that tender specifications were bypassed, as provided in the article, since a Mitsubishi VRV/VRF was installed.
As regards the calculation of profit, 15 to 20%, he said, was reasonable for projects over a million dollars and 20% for below a million dollars. In 2003-2004, there were two large projects in Fiji: Momi Development, Natadola and Westin Hotel in Denaruau, which were well above $ 50m.
In cross-examination, it was put to the witness that in terms of Article 1.1 of the tender specifications provided that the " Projects shall be provided with Variable Refrigerant Volume (VRV) systems" (emphasis added) to be installed; and this meant a VRV Daikin (the 1st defendant's product), not a VRF Mitsubishi installation. Maurice Ruggerio answered saying, if that was the stipulation, the document was "highly, highly unethical and unlawful under the system" for the reason that Daikin and in particular, the 1st defendant has a monopoly on the VRV brand. The tender document, he said would be a farce, a travesty and a crime. There would be no point in tendering, if only one company could provide VRV.
Maurice Ruggerio denied that the problems in the Nadi airport was due to the installation of the air-conditioning system, carried out by the 1st plaintiff. It was not cooling sufficiently, as the system was not maintained. It was suggested in cross-examination, that electrical stand fans were used in the airport, to replace the non-performance of the air-conditioning system. The witness said this, was due to the construction of the building without access panels, resulting in their being no access to certain areas.
The witness was also referred to an article in the Fiji Times, said to be concerning the ongoing problems in the air-conditioning system, in the airport. Maurice Ruggerio said, the article does not refer to the installation of the air-conditioning system, but was concerned with the maintenance of this system. This had arisen in the last few months in 2010, six or seven years after the installation.
In re-examination, the witness was referred to statements made by the 2nd defendant that Trade Air could have installed a VRV system belonging to Sanyo or Mitsubishi,that specifications were bypassed and that Airports Fiji Ltd would have saved a lot of money if VRV was installed. These statements, he said, were false, as a Mitsubishi VRF was installed.
4.4 In his evidence, Nitendra Singh, the 2nd plaintiff testified that the statements made by the 2nd defendant, as published in the article, were untrue. He denied that the transformer in the terminal blew up, due it being over-loaded, as a result of to the air-conditioning system and that the specifications of the tender were bypassed.
The 2nd plaintiff said, the article was first shown to him by his staff .He had received several calls from his clients with regard to the article, namely Mr Khatri from Jacks Handicraft, Mr V. Benny from Hilton Resort and the Chief Engineer, Mr Carl Gibling of Fijian Resort. From 2004, the article was a big hindrance to their marketing and progress. They had found it difficult to convince their clients that they could handle large projects. The article had created a negative impact in some clients and as a result the 1st plaintiff was not considered to tender for the air-conditioning projects of the Momi Resort, which he said was $ 5m and the Fijian Shangri La hotel, which was 300 to 400, 000 dollars. For the Sofitel project, they were competitive with price,but were not considered. They were told that their reputation was not "intact" to do a project of that size. His company for the same reason had also not tendered for the Natadola Intercontinental project, since the same consortium were involved.
The 2nd plaintiff said that ordinarily, for a project like the Jacks of Fiji, the profit margin would be 20-25% mark up, but the 1st plaintiff had to do it at a low margin of 5 % due to the adverse publicity arising from the article. Since Jacks was not convinced they could do the project, the 1st plaintiff had to revise their price. The tender value for that project was $ 850,000. The 1st plaintiff was not invited to tender for the Fijian Shangri La hotel, Momi Bay development and the Sofitel hotel. He said the Bay development, Natadola and Sofitel were awarded to the 1st defendant.
He explained that the same technology was present in VRV and VRF (Variable Refrigerant Flow). VRV was patented by Daikin. Other companies developed a similar technology which was called VRF. In cross-examination, he maintained that the technology was the same with slight variance. The installation was very similar, though the products differed and a different method of piping internally was done. He said the 1st plaintiff had tendered in respect of a Mitsubishi VRV product, which provided the features called for in the tender.
He was also cross-examined at length, with respect to the requirement in clauses 5.5 and 5.6 of the tender specifications for the air-conditioning services, which provided for a central control system. The witness disputed the suggestion that this was best achieved by installing a building management system.
It was also suggested in this regard, that clause 22 (D) of the " TENDER DOCUMENTS FOR COMPREHENSIVE MAINTENANCE FOR MECHANICAL AIR CONDITIONING AND VENTILATION AT NADI AIRPORT AUGUST 2004", called for the "..install(ation) of a compatible Building Management System (BMS) to provide central control, energy management, supervision/ monitoring and logging of installed plat systems". The witness's explanation was that this tender was in respect of the maintenance of the system, and called for in 2004, one year after the installation by the 1st plaintiff.
The 2nd plaintiff denied that the air-conditioning system had failed to perform, since its commissioning. He said the 1st plaintiff company had tendered and installed a Mitsubishi VRF system providing the features called for, in the tender documents. After the 12 month warranty period provided by Trade Air, the airport had been maintained by Airports Fiji Ltd, who he said, were not qualified to maintain VRV systems. As such Trade Air was re-engaged in 2007, to maintain the system.
He said no apology was offered by the defendants to the plaintiffs. He had occasion to meet the 2nd defendant in Auckland, in 2008, and he had not denied the statements.
It was suggested in cross-examination, that the tender for the Momi Bay development specifically called for VRV Daikin air-conditioning
installation. This was denied by this witness. As regards Fijian Shangri-La, he said that the Chief Engineer had specifically told
him that 1st plaintiff was not invited, because of the bad reputation arising from the article. The witness agreed that the Sofitel
project was not a tender by invite and stated further that the 1st plaintiff was not considered, despite their substantially low
tender price.
Several documents downloaded from the 1st plaintiff's website, were produced by counsel for the defendants, Ms Devan. The first of
these provided that the 1st plaintiff had been providing air conditioning services, since 2003, to Jacks of Fiji for the value of
$ 2.47 million, in respect of seven installation sites, including the Nadi Town Shopping mall for the value of $ 1.1 million. This
was not disputed by the 2nd plaintiff. Ms Devan suggested that the witness's evidence that the 1st plaintiff carried out work for
Jacks for only $ 800,000, was incorrect. The 2nd plaintiff's explanation was that the project was for the Nadi Town Shopping mall,
the original contract of which was $ 850,000; thereafter, further works were done, as the mall was expanded.
Several other testimonials where the 1st plaintiff had undertaken air-conditioning projects for the following companies were also produced, including, FIJI GAS dated 26th November, 2009, TELECOM FIJI LTD dated 16th October, 2008, Fiji Beach Resort and Spa dated 26 November, 2009, Colonial dated 7th July, 2009, TRITECH dated 26th November, 2009,NEO(FIJI)LTD dated 26th November, 2006 and DENARU dated 8th July, 2009 . Ms Devan stated that in the light of these testimonials, the 1st plaintiff was not affected as a result of the negatives implications from the article. The witness's reply was that while the project profiles on the website demonstrated that the company had a high level of service to very prominent clients throughout the pacific, the documents do not depict the company's profit for the first 3 years period after 2003, where his company had great difficulty in obtaining or securing projects at a reasonable contractor's mark-up price. Their mark-ups were greatly affected and some of the projects were done at cost in order to prove themselves in the market and to gain the market share.
The 2nd plaintiff said the 1st plaintiff had bid for US $ 1m (equivalent to $ 1.7million) for the air-conditioning contract at Nadi airport.
In re-examination, he stated that Airports Fiji Ltd had not claimed damages for failing to comply with the tender.
4.5 Khushal Sattyam, the 2nd defendant elected to give evidence . He was general manager of the 1st defendant from 1998 to 2003. He said he received a call from Samisoni Pareti from the Island Business magazine, ten years ago. He did not recall whether Samisoni Pereti had informed him that his statements would be published.
He had prepared the tender as regards the Nadi airport air-conditioning project for the 1st defendant. His evidence was that that the tender specifications called for VRV, but did not say Daikin VRV, nor the "equal alternative". He explained that VRV and VRF fall under the same category, but could not be compared as apple for apple since the plants were different with different internal piping..
He explained his statement reproduced in the article that the "costly debacle would have been avoided had the contractor stuck to the specifications of the tender". The tender for the airport was a design intent. VRV was an intentional design. It required a total system not just VRV Daikin, but other pieces of equipment and a control system that completed a VRV system.
As regards his statement that "There wouldn't be any problem had they installed VRV and it would save AFL a lot more money to", he acknowledged that he said, if his tender was used, the problem would be solved .
He also explained further his statement that "VRV, .. is best suited for tropical countries like Fiji as it is the most efficient and most economical to run. Its advantage lies in the fact that it uses only one main condensing unit connected to many blower units. The unit will only kick into action on demand."
As regards the statement that "The air-conditioning system now installed at the terminal is the standard ducted system which operates at a very, very high cost", he said that he did not know that the air-conditioning system now installed is the standard ducted system. Samisoni Pareti had told him that a split ducted system was installed in the airport, which means one outdoor and the other indoors. He said that if his tender was used, he would have made provision for certain areas, which required more detail and made the system functional with the building management system.
With respect to the final statement, he stated that he did not know the tender figure given by Trade Air nor that his tender was $ 1million less, but he agreed that he informed Samisoni Pereti of his tender figure as 4.5 million.
He said he gave his opinion on the tender. He did not consider the 1st plaintiff to be a competitor of the 1st defendant. He said that most of the projects the 1st plaintiff had done were after 2003 .
He said the condition in the airport was pathetic, shameful and disgraceful with cooler fans and the walls water logged. He could not explain what was wrong with the system as he said he was not an expert.
5.1 I will first deal with the ancillary matters contended in the statement of defence.
5.1.1 The first question which I shall consider is whether there is mention of the 1st plaintiff, in the
article, in its full title. It is contended by the defendants, in their closing submissions, that it is uncertain whether the article refers to the 1st plaintiff or the other company of the plaintiffs: Trade Air Engineering Limited, which transpired in the evidence led on behalf of the plaintiffs.
The very first statement ascribed to the 2nd defendant by Samisoni Pereti was that the "costly debacle would have been avoided had the contractor stuck to the specifications of the tender". The name "Trade Air" then, appears in conjunction with the word contractor, in the statement that "although not a Daikin VRV agent, could have still installed a VRV system that belongs either to Sanyo or Mitsubishi". The 2nd defendant is finally quoted as having said that his company's tender was "$1 million less than Trade Air's, but Trade Air was the choice of the main contractor ISF-Neocorp".
Maurice Ruggerio testified that he had worked with "Trade Air" in 2000, in respect of the projects for the Prouds shop in Nadi and the Motibhai building in Nadi . The 2nd plaintiff stated that a company by the name of Trade Air Engineering Limited, was incorporated in 1997. Since they had a number of projects in the Western division, the directors had, in 2002, decided to register another company namely, Trade Air Engineering (West) Limited, to look after those projects. This was not disputed by the defence.
As Lord Denning MR stated in DHN v Borough of Tower Hamlets, (1976) 3 All ER 462 at page 467:
"We all know that in many respects a group of companies are treated together for the purpose of general accounts, balance sheet and profit and loss account. They are treated as one concern..
They should not be treated separately, so as to be defeated on a technical point. They should not be deprived of the compensation which should justly be payable for disturbance".
Ms Devan produced several documents from the 1st plaintiff's website, which depicted that the 1st plaintiff's logo was tradeair.
I am satisfied on the evidence that the 1st plaintiff and/or Trade Air Engineering Limited would be sufficiently identified by readers by its abbreviated name "Trade Air", as set out in the article .
5.1.2 The second question is whether the 2nd to 4th plaintiffs can sue in respect of words, which are prima facie defamatory of the 1st plaintiff. The question is: were these individuals pointed to by the words complained of? The article makes no reference to them, as stated in the statement of defence; it confines itself to allegations about the 1st plaintiff.
Duncan and Neill on Defamation,(3rd Edition, 2009 ) provides at paragraph 8.04:
"Moreover, it is always to be remembered that it is for the claimant to establish that the words complained of were defamatory of him; accordingly if he is not mentioned by name or if the words are in cipher or otherwise not ex facie defamatory the claimant will have to plead and prove sufficient facts to establish that the words would have been understood as defamatory of him". (emphasis added)
Maurice Ruggerio said it was common knowledge that the 2nd,3rd and 4th plaintiffs were directors of the 1st plaintiff. Most clients, he said, seek to build up a relationship with contractors, and in the case of the 1st plaintiff,it was a "individual personal thing" and without the 2nd,3rd and 4th plaintiffs, there was no company.
This assertion does not, in my view, constitute sufficient evidence to establish that the 2nd,3rd and 4th plaintiffs are the alter
ego of the 1st plaintiff. Philip Temo's answer to a leading question asked in evidence in chief, as to whether these plaintiffs are
"faces of the (1st plaintiff) company", answer was " Yes, my understanding is they were Directors of the company".
I am not satisfied that the imputation concerning the 1st plaintiff reflects upon the 2nd,3rd and 4th plaintiffs. In my judgment,
as the evidence stands, neither the words nor the words combined with the surrounding circumstances point to them, in contradistinction
to the 1st plaintiff.
The reasoning in Aspro Travel v Owners Abroad Group, [1995] 4 All ER 728 as referred to, in Gatley on Libel and Slander, (10th Edition,2003, at page 195, footnote 99) appeals to me. In that case, it was alleged that the statements made by the defendants that the 1st plaintiff, Aspro Travel Ltd( a company owned by the "Asprou" family and took its name from the family) was "going bust" or "would be bankrupt in a few days" meant that the 1st plaintiff were insolvent and that they directors were reasonably suspected of causing or permitting the companies to trade, whilst insolvent or at least in serious financial difficulty.
Stuart-Smith LJ stated:
"..it may be clear from the context or form of the words that the cause of insolvency is misconduct or mismanagement of the company's affairs; if, as is accepted here, the statement can be understood to refer to the directors, that would be defamatory. On the other hand, if the context or other parts of the statement made it clear that the insolvency was due to misfortune, market forces or the acts of third parties for which the directors were not responsible, the words would not be capable of being defamatory.
In Hunt Australia Pty Ltd v Davidson's Arnhemland Safaris, [2000] FCA 169 the defamatory letter had expressly referred to "Mr Bob Penfold of Hunt Australia". Spender, Drummond and Kiefel JJ of the Federal Court of Australia upheld the finding by the primary judge that the statement that Mr Bob Penfold was a liar reflected upon the company "Hunt Australia" itself, and that it was controlled and operated by a liar.
In Rabuka v Fiji Daily Post Company Ltd, (2005) FJHC 174 the words found to be defamatory in the article titled "Ex-diplomat's wife found in home raid" were " the wife and two sons of a former Fiji diplomat were caught in a raid..for a migration racket" and " The Fijian woman, Mrs.. is the wife of the former deputy head of the Fiji Mission in New York...Mr Rabuka is now acting Permanent Secretary of Justice in Suva". The husband and wife were both awarded damages, which was upheld in appeal.
5.1.3 Samisoni Pareti, denied the contention that he did not inform the 2nd defendant that he would quote him in the magazine .He said that there was no request for a draft by the 2nd defendant, who felt comfortable talking to him. As Mr Young has rightly pointed out in his closing submissions, the 2nd defendant did not state in his evidence, that he requested to see a draft of the article.
The 2nd defendant, in his evidence in chief, stated that he received a call " which I knew was from Samisoni Pareti from the Island Business". This introduction was adequate in my view, to put the 2nd defendant, on notice. Samisoni Pareti also testified that when he called the 2nd defendant, after the writ in this case was filed, he said he stood by what he had said. I accept the evidence of Samisoni Pareti. who I found to be a truthful witness. I cannot reconcile with reason the contention that the telephone conversation was intended to be a private or as suggested in the cross-examination of Samisoni Pareti, a casual one.
5.1.4 The statement of defence also provides that the defendants had no responsibility and had nothing to do with the publication of the words mentioned. It suffices to quote Bingham LJ in Slipper v BBC, [1991] 1 All ER 165 at page 179 that " the law would part company with the realities of life if it be held that the damage caused by publication of a libel began and ended with publication to the original publishee".
5.1.5 I will finally deal with the contention that the 2nd defendant did not make the statements as an employee of the 1st defendant. Firstly, no such reservation was made by the 2nd defendant, in his evidence, nor was a representative of the 1st defendant called to testify that the 2nd defendant had no authority to give an interview. Secondly, the 2nd defendant commenced his evidence in chief, stating that he was the general manager of the 1st defendant and he prepared the tender on behalf of the 1st defendant for the Nadi airport project.
5.2 The article
The Court of Appeal in Fiji Daily Post Co Ltd v Rabuka, [2006] FJCA 47 at paragraph 15 of the judgment, as referred to in the closing submissions of the plaintiffs, stated:
"The two questions which the Judge appreciated that he had to ask himself were first, whether the words complained of were capable of conveying defamatory meaning and secondly whether they in fact conveyed such a meaning (Jones v Skelton (1963) 1 WLR 1362, (1963) 1 A11 ER 952)."
Jones v Skelton is also referred to in the closing submissions of the defendants.
The 2nd defendant admitted all but one statement attributed to have been made by him, in the article He denied the that he informed
Samisoni Pereti, the tender price quoted by the 1st plaintiff and that it was $ 1 million less than the 1st plaintiff.
The following passage from the judgment of Lord Fisher MR in South Helton Coal v N-E News Association[1893] UKLawRpKQB 194; , [1894] 1 QB 133 as reproduced in the closing submissions of the defendants, provides an illuminating example:
"Suppose the plaintiff was a merchant who dealt in wine, and it was stated that wine which he had for sale of a particular vintage was not good wine; that might be so stated as only to import that the wine of the particular year was not good in whosesoever hands it was, but not to imply any reflection on his conduct of his business. In that case the statement would be with regard to his goods only and there would be no libel, although such a statement, if it were false and were made maliciously with intention to injure him, .might be made the subject of an action on the case. On the other hand, if the statement were to be made as so to import that his judgment in the selection of wine was bad, it might import a reflection on his conduct in his business and show that he was an inefficient man of business. If so, it would be a libel". (emphasis added)
In the present case, the 2nd defendant has stated that the costly debacle arising from the blow up of the terminal transformer would have been avoided and Airport Fiji Ltd would have saved a lot more money, had the 1st plaintiff adhered to the tender and not bypassed its specifications.
I am satisfied on the evidence before me, that the statements made by the 2nd defendant, as published in the article, in their ordinary
and natural are defamatory of the 1st plaintiff and
convey an imputation that the 1st plaintiff was "incompetent and unreliable", cannot be trusted to complete a contract satisfactorily or properly" and "has installed an inferior system
to that required by the specification to tender" as stated in the statement of claim.
5.3 Defences
The defences to the claim included fair comment and justification. The statement of defence provides that the words complained of were matters of interest to the construction and related industries and no malice was intended.
Fair comment
In Hunt v Star Newspapers Co Ltd, [1908] UKLawRpKQB 51; 1908 2 KB 309 at 319 to 320 Fletcher Moulton LJ as quoted by Duncan and Neill on Defamation (op.cit at paragraph 13.19) said:
"..comment in order to be justifiable as fair comment must appear as comment and must not be mixed up with facts that the reader cannot distinguish between what is report and what is comment.. Any matter, therefore, which does not indicate with reasonable clearness that it purports to be comment, and not statement of facts, cannot be protected by the plea of fair comment".
In Abbas Ali v Thompson,(Civil Appeal no.ABU 0029 of 2010), Chitrasiri JA set out the five requisites required for establishing the defence of fair comment in page 5, as laid down in Albert Cheng v Tsey Wai Chun Paul, (2000) HKCFA 35 as follows:
"The comment must be a matter of public interest.
The comment must be recognizable as comment as distinct from an imputation of fact.
The comments must be based on facts which are true or protected by privilege.
The comment must be explicitly indicated at least in general terms, what the facts of which the comments are being made.
The comments must be one which could have been made by an honest person, however prejudiced he might be, and however exaggerated or obstinate his view. It must be germane to the subject matter criticised."
(emphasis added)
The closing submissions of the defendants rely on the case of Branson v Bower, [2001] EWHC 460; [2002] QB 737 as authority for the proposition that the claimant has to show that the defendant did not honestly hold the views expressed. In that case, Eady J stated:
"I have therefore come to the conclusion .. that the only two requirements in this context are (1) that a defendant should have expressed the opinions honestly and (2) that he should have done so upon facts accurately stated " . (emphasis added)
I do not accept the 2nd defendant's assertion that the statements he made to the journalist constitute his opinion on his tender. In my judgment, the statements constitute facts inaccurately stated, as I have found in the succeeding part of this judgment.
In my judgment, the 2nd defendant has failed to prove the truth of the facts in his statements. I do not find that the defence of fair comment had been made out.
Justification
Duncan and Neill on Defamation,(op cit ) provides as follows at paragraphs 12.05:
"The law presumes that defamatory words are false. In consequence, the claimant need do no more than prove that defamatory words have been published of him by the defendant. It is then for the defendant to prove, if he can, that the words are true. This rule is of long standing" .(emphasis added)
At paragraph 12.07:
".The basic rule is that in order to establish a successful defence of justification the defendant must prove that the words complained of were, on the balance of probabilities, substantially true".(footnotes omitted)
The defence strove to establish that the air-conditioning system failed to perform due to non-compliance with the tender specifications, as stated by the 2nd defendant in the article. There were two principal witnesses called by the plaintiffs to disprove this argument. The first was Maurice Ruggerio. The second was the 2nd plaintiff.
Both witnesses testified that VRV and VRF have the same technology. Maurice Ruggerio said it would be meaningless and there would be a travesty, if the tender specifications, which stipulated a VRV meant a VRV Daikin,. It would mean that no other company other than the 1st defendant could tender, as they had a monopoly of that the product . I agree with this basic reasoning . The 2nd defendant also testified that VRV and VRF fall under the same category, though no apple for apple.
Maurice Ruggerio testified that the transformer explosion in the airport was not related to the air-conditioning system.
It was also contented by the defence with great force that a building management system was not installed, as stipulated in the tender specifications. The 2nd plaintiff stated that the tender specifications do not call for a building management system. This was confirmed by the 2nd defendant, who stated that he went "higher with the hierarchy" and included the building management system in his tender. I have perused the tender specifications and find that it does not stipulate such a system to be installed. The 2nd plaintiff, also pointed out in cross-examination, that the tender documents shown to him, that called for such a system were in respect of the maintenance of the air conditioning system at Nadi airport of August 2004. This was also confirmed by the 2nd defendant. I have perused the relevant tender specifications and find they do not stipulate that a building management system be installed.
In my judgment, the defence of justification fails.
5.4 Malicious falsehood
The 1st plaintiff's second cause of action is malicious falsehood. The particulars of falsity are set out in the statement of claim, which I have reproduced above. I have found that the statements made by the 2nd defendant are false. The next question is whether the 2nd defendant was actuated by malice, in making the statements.
Gatley on Libel and Slander, ( op cit, page 585) states as follows:
"..the defendant will be guilty of malice if he is actuated by some improper motive, and knowledge or recklessness as to the falsity of the statement will be virtually conclusive as to malice." (footnotes omitted)
The evidence establishes that the 1st defendant is a trade rival of the 1st plaintiff. The 2nd defendant, in his evidence stated that he did not consider the 1st plaintiff to be a competitor. However, the 1st defendant was admittedly the unsuccessful party in respect of the tender for the airport project. Philip Temo also testified that the three main contractors for air-conditioning works were the 1st plaintiff, 1st defendant and Kooline. In my judgment, the 2nd defendant made the statements knowing them to be false and was actuated with the motive of damaging the 1st plaintiff and its said business. It is pertinent in this regard, that the defendants made no apology or remorse to the 1st plaintiff.
With regard to the claim for damages on this ground, the authorities provide that pecuniary damage must be established.
Duncan and Neill on Defamation,(op cit, at paragraph 26.08) states:
"In an action for libel, it is not necessary for the claimant to prove that he has suffered damage as damage is presumed: in an action for malicious falsehood the claimant has to plead and prove as part of the cause of action that the publication has caused him pecuniary damage or that he is exempted from doing so by the provisions of s 3 of the Defamation Act 1952 (equivalent of section 10 of the Defamation Act (cap 34) in Fiji, which provides that special damage need not be proved in the case of slander)". (emphasis added, footnotes omitted)
Stuart-Smith L.J, Khodaparast v. Shad (C.A) [2000] 1 WLR 618 at pages 630 to 631:
"Malicious falsehood is a species of defamation. It is well established that aggravated damages can be awarded for defamation of character for the additional injury to feelings caused by the defendant's conduct both before and after the issue of proceedings. In my judgment, once the plaintiff is entitled to sue for malicious falsehood, whether on proof of special damage by reason of section 3 of the Act of 1952, I can see no reason why, in an appropriate case, he or she should not recover aggravated damages for injury to feelings. As Sir Donald Nicholls V. C. Pointed out in Joyce v. Sengupta [1992] EWCA Civ 9; [1993] 1 W.L.R. 337, justice requires that it should be so".
5.5 Damages
I have found the article to be defamatory of the 1st plaintiff. The 1st plaintiff is accordingly, entitled to an award of damages.
Ms Devan, in her closing submissions, quite correctly submits that the "extent of publication is very relevant to damages: John v MGN Ltd, [1997] QB 586". I am satisfied on the evidence of Philip Temo, Samisoni Pareti and Maurice Ruggerio, a member of the Council of the Fiji Institution of Engineers, as to the extent of publication of the Island Business magazine.
The closing submissions of the plaintiffs refer to two cases: Ratcliffe v Evans, [1892] UKLawRpKQB 131; [1892] 2 Q.B. 524 and English & Scottish Co-operative v Odhams Press Ltd [1940] 1 KB 440 for the proposition of law that damages are presumed in the case of libel and slander. In the first case, Bowen LJ at page 528 stated:
"The law presumes that some damages will flow in the ordinary course of things from the mere invasion of his absolute right to reputation."
In the second case, Lord Goddard LJ at page 461 was quoted as follows:
"There is no obligation on the plaintiffs to show that they have suffered actual damage..... In every case (a plaintiff) is entitled to say that there has been a serious libel upon him, that the law assumes he must have suffered damage, and that he is entitled to substantial damage."
More recently, Lord Bingham of Cornhill in Jameel(Mohammed) v Wall Street Journal Europe Sprl, [2006] UKHL 44; [2007] 1 AC 359 at page 372 stated:
" The tort of libel has long been recognised as actionable per se. Thus where a personal plaintiff proves publication of a false statement damaging to his reputation without lawful justification, he need not plead or prove special damage in order to succeed. Proof of injury to his reputation is enough....
....... in South Hetton Coal Co Ltd v North-Eastern News Association Ltd [1893] UKLawRpKQB 194; [1894] 1 QB 133,......................Lord Esher MR held,
"Then if the case be one of libel – whether on a person, a firm, or a company – the law is that damages are at large."" (emphasis added)
5.5.1 Compensatory damages
Duncan and Neill on Defamation (op. cit) at paragraph 23.04) provides the "basic rule of common law is that in civil action damages are awarded as compensation for injury, not as punishment for wrongdoing". The authors go on to state:
"The purpose of an award of compensatory damages is to restore the plaintiff, as far as money can do so, to the position he would have been in if the tort had not been committed".
In Broome v Cassell & Co. Ltd, [1972] UKHL 3; [1972] 2 W.L.R. 645 at page 669,Lord Hailsham of St Marylebone LC said of the subjective element in the assessment of damages for defamation:
"In actions of defamation and in any other actions where damages for loss of reputation are involved, the principle of restitution in integrum has necessarily an even more highly subjective element. Such actions involve a money award which may put the plaintiff in a purely financial sense in a much stronger position than he was before the wrong. Not merely can he recover the estimated sum of his past and future losses, but in case the libel, driven underground, emerges from its lurking place at some future date, he must be able to point to a sum awarded by a jury sufficient to convince a bystander of the baselessness of the charge."
The Court of Appeal in John v MGN Ltd,(op. cit at 607) set out the three essential elements of general compensatory damages in a defamation case as follows:-
"The successful plaintiff in a defamation action is entitled to recover, as general compensatory damages, such sum as will compensate him for the wrong he has suffered. That sum must compensate him for the damage to his reputation; vindicate his good name: and take account of the distress, hurt and humiliation which the defamatory publication has caused. In assessing the appropriate damages for injury to reputation the most important factor is the gravity of the libel: 'the more closely it touches the plaintiff's personal integrity, professional reputation, honour, courage, loyalty and the core attributes of his personality, the more serious it is likely to be." (emphasis added)
Duncan and Neill on Defamation,(op cit, at paragraph 23.07) citing this passage concludes as follows:
" While the significant subjective element in an award of damages in a defamation action makes it impossible to put forward objective standards by which to gauge the right figure in any particular case, it is, nevertheless, possible to identify the factors which can properly be taken into account in assessing damages. may relate to more than one of them".
Maurice Ruggerio testified that the article reverberated at meetings of the Fiji Institute of Engineers and the circle of building developers, hardware companies business people and lawyers who attended professional development seminars for about six months. The 2nd plaintiff's testified that the 1st plaintiff was not invited to tender for several projects, because of the article. His testimony with regard to the Momi Bay development was substantiated by Philip Temo and in respect of the other projects, he stated that the persons who were in charge of those tenders were no longer in the country.
I am satisfied that there was damage to the reputation of the plaintiff.
In Air Fiji Ltd v Shandil (HBC No 380 of 1999S), the Court, in a judgment delivered in 2005, awarded general damages of $ 80,000 and $ 120,000 as special damages with respect to a media broadcast after a fatal crash.
I assess the damages to the reputation of the 1st plaintiff as $ 100,000.The principle of vicarious liability is applicable to defamation and hence the 1st and 2nd defendants are both liable .
5.5.2 Exemplary damages
The 1st plaintiff has claimed exemplary damages. Lord Devlin in Rookes v Barnard[1964] UKHL 1; , (1964) AC 1129 at page 1221, stated:
"Exemplary damages are essentially different from ordinary damages. The object of damages in the usual sense of the term is to compensate. The object of exemplary damages is to punish and deter....." (emphasis added)
His Lordship in his speech set out the three considerations that should be borne in mind, when awards of exemplary damages are made, at page 1226 to 1227 as follows:
" The first category is oppressive, arbitrary or unconstitutional action by servants of the government... the second category are those in which the defendant's conduct had been calculated by him to make a profit for himself which might well exceed the compensation payable to the plaintiff.........To these two categories which are established as part of the common law there must of course be added any category in which exemplary damages are expressly authorised by statute ".
Sir Thomas Bingham M R in John v MGN Ltd (op cit at page 619) stated:
"The authorities gave judges no help in directing juries on the quantum of exemplary damages. Since however,such damages, were analogous to a criminal penalty, and although paid to the plaintiff play no part in compensating him, principle requires that an award of exemplary damages should never exceed the minimum sum necessary to meet the public purpose underlying such damages: that of punishing the defendant, showing that tort did not pay and deterring others." (emphasis added)
I turn to the speech of Lord Reid in Broome v Cassell & Co.,(op cit, pages 685 to 686)
"The only practical way to proceed is first to look at the case from the point of view of compensating the plaintiff. He must not only be compensated for proved actual loss but also for any injury to his feelings and for having had to suffer insults, indignities and the like. And where the defendant has behaved outrageously very full compensation may be proper for that. ... Then if it has been determined that the case is a proper one for punitive damages the tribunal must turn its attention to the defendant and ask itself whether the sum which it has already fixed as compensatory damages is or is not, adequate to serve the second purpose of punishment or deterrence. If they think that sum is adequate for the second purpose as well as for the first they must not add anything to it. It is sufficient both as compensatory and as punitive damages. But if they think that sum is insufficient as a punishment then they must add to it enough to bring it up to a sum sufficient as punishment. The one thing which they must not do is to fix sums as compensatory and as punitive damages and add them together. They must realise that the compensatory damages are always part of the total punishment." (emphasis added)
In Gray v Motor Accident Commission, 158 ALR 485 at page 488 as referred to in the closing submissions of the plaintiffs, the High Court of Australia stated that "exemplary damages are awarded rarely".
The Fiji Court of Appeal in Borron v Fiji Broadcasting Commission & Newspapers of Fiji Limited, (Civ. Appeal No. 40/81 FCA at page 5):
"Exemplary damages are damages which are awarded to punish a defendant and vindicate the strength of the law. In considering whether exemplary damages should be awarded the Court should ask itself whether the sum it proposes to award as compensatory damages, which may include an element of aggravated damages is adequate in all the circumstances for compensating a plaintiff and also for punishing or deterring a defendant. Only if it is inadequate for the latter purpose should the Court consider awarding exemplary damages." (emphasis added)
The Court of Appeal stated further that "exemplary damages or punitive damages are exceptional and only in rare cases are they awarded".
The above quoted dicta were cited and applied by Pathik J in Rabuka v Fiji Daily Post Company Ltd, (supra).
Counsel for the plaintiffs, Mr Young has cited Uren v John Fairfax & Sons Ltd, [1966] HCA 40; (1996) 117 CLR 118, and a mass of authorities from Australian courts which followed that case. The High Court of Australia in Uren v John Fairfax & Sons Ltd, held the limitations expressed in Rookes v Barnard,(supra) of the categories in which exemplary damages for defamation may be awarded, should not be followed in Australia. Lord Denning MR in Fielding v Variety Incorporated, (1967) 2 QB 841 at page 851 having refered to Uren v John Fairfax & Sons Ltd, stated exemplary or punitive damages could not be awarded following the House of Lords decision in Rookes v Barnard (supra).
I am not inclined to follow the reasoning adopted by High Court of Australia. On a consideration of the principles applicable to 'exemplary damages' and the facts and circumstances of this case, I do not consider this to be a case for the award of exemplary damages. In my judgment, the sum I have awarded to the 1st plaintiff adequately compensates the 1st plaintiff.
5.6 Special Damages
The 1st plaintiff is claiming special damages. The particulars of special damage provide that a potential customer broke off negotiations with the 1st plaintiff, in respect of a substantial contract and the 1st plaintiff has in consequence, lost the profit which they would have made upon that contract. It is also provided that the 1st plaintiff has suffered a general loss of business.
The law as to a claim for special damages has been stated as follows by Duncan and Neill on Defamation (op cit at 18.10 ):
"Special damage for the purpose of the law of defamation may be defined as any material or temporal loss which is either a pecuniary loss or is capable of being estimated in money. .. special damage can include the loss not only of a specific contract or of any specific customers but also a general loss of business. (emphasis added)
Mr Young has however postulated his claim on the following two grounds.
5.6.1 The first is that the 1st plaintiff was either not invited to tender or not awarded a tender in several instances, after the article was published. I have already referred to the evidence led in this regard.
It is axiomatic that the award of a tender is founded based on several factors . Mr Young has thus quite rightly conceded in his closing submissions, the 1st plaintiff may not have been awarded all the contracts it tendered for. Accordingly, I reject the claim for special damages in this regard.
5.6.2 Mr Young also postulated that the 1st plaintiff suffered a loss of profit margin in respect of several projects. He called the Accountant the 1st plaintiff to testify on this aspect. Ms Devan objected to this witness giving evidence on the ground that she was not given notice that a technical witness was being called, nor was there any discovery of documents in this regard. Mr Young confirmed that no books of account were being produced. I upheld the objection of Ms Devan.
The 2nd plaintiff testified that the 1st plaintiff had to lower its profit margin to 5 % with respect to a particular project for Jacks of Fiji, due to the article. In cross-examination, this project was identified as the Nadi shopping mall, upon Ms Devan producing a document from the 1st plaintiff's website setting out seven projects, in which Jacks of Fiji had engaged the 1st plaintiff, since 2003. Mr Young relying on that document, has presented in his closing submissions, a table setting out the loss of profit margin the 1st plaintiff suffered on these seven projects, as well as projects with other entities. The basis of calculation of loss of profit is a general profit margin of 15 to 20% as against 5 %, as testified by the 2nd plaintiff in respect of the singular project for Jacks. The 2nd plaintiff stated in cross-examination, that he did not have the tender documents submitted to Jacks to establish that the 1st plaintiff's profit margin was revised.
I am not inclined to accept oral evidence to establish loss of profit margins, in the absence of supporting financial statements. Moreso when conflicting evidence was given by the plaintiff's witnesses and the 2nd defendant with respect to the percentages of general profit margins obtained on projects. In this context, Ms Devan has concluded in her closing submissions, that it is " evident from (the 2nd plaintiff's) own evidence, that his lowering of profit rates/margins could be more of a market competition driven decision than...the article". The 2nd plaintiff's responses to Ms Devan's questions that the 1st plaintiff has continued to do business, irrespective of the article, as follows:.
MR SINGH: No it is not correct. The articles and the resumes and project profiles prove on our website is that as a company we have been proving extremely high level of service to very prominent clients – we have been working throughout the pacific. What it does not say is exactly how much profit we have been making especially for first 3 years period after 2003.
MR SINGH: That is correct but we could have done a lot more.
MR SINGH: Some projects yes we have made losses others we have gained but what I am specifically trying to say is that from period 2003 – 2005 we had great difficulty in obtaining or securing projects at a reasonable contractor's mark-up. Our mark-ups were greatly affected. Some of the projects we did were basically at cost to prove ourselves in the market and to gain the market share". (emphasis added)
It is axiomatic that a loss of profit could be established by a comparison of the financial statements for the years immediately preceding the alleged commencement of loss with those of the succeeding years. In cross-examination,it transpired that the 2nd plaintiff had the financial statements of 2003 and 2004, but these were not disclosed to his counsel. In my judgment, the non-production of these statements is a strong indicative that the alleged loss cannot be established.
In Lewis v Daily Telegraph Ltd, (1963) 1 QB 340 at 376 where the claimant company and its chairman and managing director brought an action for libel in respect of an article which stated the Fraud Squad were inquiring into the affairs of the company, Holroyd Pearce LJ said:
"If a person libelled has suffered specific damage he can plead it as special damage and recover it. That claim will then have the advantage (or disadvantage) or a careful scrutiny, supported by documents and oral evidence from which a court can decide whether in truth a decline of business resulted from the libel. The plaintiffs would then have to give particulars and facts and figures to support it. The plaintiffs or their accountants could produce figures of turnover and graphs showing any sudden downward tendency, such as, for instance, that in the week after the libel orders noticeably declined and so forth. Managers, salesmen and others could give supporting evidence. .. And the defendants would have an opportunity of calling evidence to counter the plaintiff's claim for special damage". (emphasis added)
The claim for special damages is declined.
16th November, 2012
A.L.B. Brito - Mutunayagam
Judge
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