A domestic inquiry is an internal proceeding held within a company to determine whether an employee has committed misconduct. Given the contentious nature of such proceedings, it is natural to assume that many allegations will be made (both against the employee and the employer) throughout the course of the domestic inquiry. The question therefore arises as to whether a party can be sued for defamation for statements made during the domestic inquiry, and whether there are any defences available.
In the recent Court of Appeal case of Khaw Eng Peng v Goh Aik Lai (Civ Appeal No.: P-02-1951-11/2014), a central question that arose for the Court to decide was whether the defence of qualified privilege is available in a domestic inquiry. The defence of qualified privilege is generally available in a defamation context when the defamatory words are published by a person who has an interest (duty, legal, social or moral) to publish them and the person receiving the defamatory words has a corresponding interest to receive them.
The Plaintiff was the Deputy Managing Director of a listed company known as Oriental Interest Berhad (“OIB”) and the Plaintiff’s father (“GCH”) was the Managing Director of OIB. Sometime in 2006, an independent inquiry into charges of misconduct was held on the Plaintiff’s sister (“GMT”) in which the Defendant was the Prosecuting Officer.
Although GMT was not found guilty of the charges, the issue of defamation arose when the Plaintiff received a copy of the notes of evidence of the independent inquiry, which included 2 of the Plaintiff’s letters, a copy of GCH’s letter and the Company’s Board’s Attendance List (“Exhibits”). The Plaintiff claimed that the Defendant as prosecuting officer had made unsubstantiated comments during the inquiry that went beyond the contents of the letters and Attendance List.
The Plaintiff claimed that those comments were directly or indirectly concerning him and had defamed him; that the said letters and Attendance List were not relevant to the charges against GMT; that the Defendant was motivated by malice in tendering the same; and that the Defendant had conspired behind the scene to prevent the Plaintiff from succeeding his father as the managing director of OIB.
Based on the Defendant’s comments, the Plaintiff’s case was that the defamatory words meant that the Plaintiff was:
- a very ambitious and ruthless person who wanted to overthrow GCH and take over as the Managing Director of the Company;
- actively conspiring with his sister and brother-in-law to topple the Managing Director;
- not a suitable person for the Managing Director post and he was not fit to succeed his father’s post of Managing Director of the Company; and
- a person of dishonourable / discreditable conduct / motive.
The Plaintiff claimed that his reputation has been seriously damaged due to the Defendant’s comments and was not appointed to the position of the Managing Director despite being recommended by the Company.
High Court’s Decision
In the High Court, the Court allowed the Plaintiff’s claim and held that the comments made were defamatory as the Plaintiff was not the one who was charged before the panel of inquiry and was not the subject matter of the inquiry.
On the topic of the defence of absolute privilege or qualified privilege or justification, the Court held that the defence of absolute privilege was not available as the Defendant was not under any legal or moral obligation to produce the letters and make those remarks.
The Court also held that the independent inquiry would not have been interested in the said letters and contents as the said letters were not relevant to the charges against GMT and the truth and veracity of the contents were also not properly verified.
Court of Appeal’s Decision
The Court of Appeal dismissed the High Court’s judgment and held that the comments were not defamatory as the words published / uttered by the Defendant must be seen in context of the inquiry held against GMT, who was charged with misconduct by bringing in family problems / disagreements into the Company’s business.
As the Prosecuting Officer, the Defendant saw it fit to tender the letters and Attendance List as proof of the charges against GMT. Since the charges against GMT was pertaining to an ongoing family feud involving GCH and their stepmother, the exhibits would have made references to the Plaintiff.
As the independent inquiry was held to determine whether or not GMT was guilty of the charges that was mainly centred on her involvement in interfering with a succession plan relating to her brother, the letters written by Plaintiff were relevant and the Defendant, as Prosecuting Officer was duty bound to tender them as the panel was duty bound to receive communication of them. As such, the Defendant’s remarks during the inquiry were protected by qualified privilege.
As such, the Court of Appeal held the defence of qualified privilege was available to the Defendant and that an independent inquiry is an occasion where qualified privilege would apply. The Court also went on to explain situations in which an occasion where qualified privilege would apply by referring to the cases of Dato Seri Anwar Ibrahim v The New Straits Times Press (M) Sdn Bhd  2 MLJ 492 and S Pakianathan v Jenni Ibrahim  2 MLJ 173.
Based on the two cases mentioned, a privileged occasion is an occasion where the person making the communication, has an interest or duty to make it to the person who has the interest or duty to receive any communication made, bona fide upon any subject matter in which the party communicating has an interest that is privileged.
However, the defence of qualified privilege can be negated when there is proof of malice. Those conducting domestic inquiries should therefore still be mindful of statements made during the proceedings to ensure that there is no allegation of malice, and that statements made therein are only those that are necessary and relevant to the proceedings.
This article was written by Donovan Cheah with assistance from Natalie Ng (pupil in chambers). Donovan has been named as a recommended lawyer for labour and employment by the Legal 500 Asia Pacific 2017, 2018 and 2019, and he has also been recognised by Chambers Asia Pacific and Asialaw Profiles for his employment law and industrial relations work.
Donovan & Ho is a law firm in Malaysia. Our practice areas include employment law, dispute resolution, tax advisory and corporate advisory. Have a question? Please contact us.