EX-SABAH YB WINS CASE AGAINST FIS

KOTA KINABALU: The Federal Court in a landmark decision dismissed with costs the appeal by Financial Information Services Sdn Bhd (FIS) and upheld the Court of Appeal's decision that the company had published defamatory information about a former Sabah Assemblyman's bankruptcy status.

FIS, is a private limited company incorporated with its principal activity described as "mainly for the purpose of collecting and circulating to the association members any commercial, financial and other relevant information pertaining to the business carried on by them."

FIS, as the appellant, was incorporated by the Association of Finance Companies of Malaysia and the Association of Hire-Purchase Companies of Malaysia.

The respondent, former Usno Sekong Assemblyman Salleh Janan had earlier succeeded in his appeal against a High Court decision to dismiss his defamation suit against FIS over the publication of his bankruptcies.

The respondent had unsuccessfully applied for a loan from two financial institutions, namely Affin-ACF Finance Bhd and Arab-Malaysian Finance Bhd, and had suspected it was because of the false information published by FIS.

On March 13, 2000, pursuant to an inquiry by Affin-ACF Finance Bhd, FIS issued an enquiry details on the respondent, which is basically the respondent's financial standing.

FIS informed Affin-ACF that the respondent was made a bankrupt twice, in 1981 and 1991, but did not disclose that the two adjudication orders on the respondent had been annulled and rescinded in September, 1995 and October, 1997, respectively.

The High Court had earlier found that defamation had been established but nonetheless dismissed the respondent's claim opining that the FIS is "not liable to the plaintiff (Salleh) for defamation because what the defendant (FIS) did was merely to re-state in the Enquiry Details Court Orders which had been published in the Daily Express newspaper and the Gazette."

Salleh then referred to the Court of Appeal, which then rejected the contention that the publication was justified since the respondent at the date of the publication of the enquiry details was no longer a bankrupt; and that FIS had been guilty of not reporting on the annulments of the bankruptcies in the column entitled "Discharge", which was a material omission.

In short, it was held on appeal that what FIS published was false.

FIS then filed an appeal against the Court of Appeal's decision to the Federal Court that heard the case on Nov 24, 2011 before making the judgement on June 25, 2012.

The matter was heard before a Federal Court panel of Tan Sri Arifin Zakaria, Tan Sri Richard Malanjum and Tan Sri Abdull Hamid Embong.

In their 27-page judgement, Abdull Hamid said the sole issue brought before them was whether the defence of qualified privilege could be considered for FIS in this case.

"We took time to consider this question of law now posed to us.

The question reads - "Whether the decision in Macintosh v Dun (1908) A.C. 390 defeats the defence of qualified privilege where information is solely supplied by a corporate defendant formed solely or substantially for the purpose of disseminating commercial and financial information of a third party to its members on payment of fees?"

The thrust of the appellant's appeal was that the publication it made was protected by qualified privilege since it was made in pursuant to a request for information by a subscribing member of FIS, and if thus made bona fide, it is protected.

"We say that this proposition made by the counsel is too broad and does not state the true position of the law on this matter," said Abdull Hamid.

The Federal Court also disagreed that the FIS was not a profit making enterprise when its counsel contended that since the profits were participated in only by the two shareholders and not the public, it meant that FIS was not set up as such.

Despite the contention of the counsel for FIS that the company was formed for the common good or benefit of its members, the defamatory publication which is now the subject of matter of this suit, would not have fit into the category of being one that is protected because it was not fairly warranted by any reasonable occasion of exigency made for the common convenience and welfare of society (Too good test), he said.

"The submission by learned counsel for FIS that its publication is protected by privilege is clearly premised on a wrong assumption namely since it had incorporated itself into a company where it is under a duty to provide information to its members it must necessarily be protected by privilege because it has an obligation under their agreement to provide such information for the protection of their mutual trading interest.

"Shortly put, it has not passed the duty/interest test in Too good," he said.

The conditions for qualified privilege to arise as a defence was laid out by Baron Parke in Toogood v Spyring (1834) 1 CM & R 181.

"We thus, conclude that based on the facts of this case, FIS is nothing more than a credit agency trading for profit. As such it cannot be accorded the immunity of qualified privilege in publishing the defamatory information on the respondent," said Abdull Hamid.

"There is thus a need for us to clarify the principles governing credit agencies or incorporated bodies trading for profit and the inapplicability of the defence of the common law qualified privilege to them," he said.