Stemlife Bhd v Mead Johnson Nutrition (M) Sdn Bhd (form PDF

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Date and Time: Tuesday, 20 July, 2021 6:30:00 PM MYT Job Number: 148743005

Document (1) 1. Stemlife Bhd v Mead Johnson Nutrition (M) Sdn Bhd (formerly known as Bristol-Myers Squibb (M) Sdn Bhd) & Anor [2014] MLJU 1768 Client/Matter: -NoneSearch Terms: damages for defamation Search Type: Natural Language Narrowed by: Content Type MY Cases

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STEMLIFE BHD v MEAD JOHNSON NUTRITION (M) SDN BHD (FORMERLY KNOWN AS BRISTOL-MYERS SQUIBB (M) SDN BHD) & ANOR CaseAnalysis | [2014] MLJU 1768

Stemlife Bhd v Mead Johnson Nutrition (M) Sdn Bhd (formerly known as Bristol-Myers Squibb (M) Sdn Bhd) & Anor [2014] MLJU 1768 Malayan Law Journal Unreported HIGH COURT (KUALA LUMPUR) SU GEOK YIAM J CIVIL SUIT NO S6-23-95-2Q08 22 September 2014 Rishwant Singh (Farah Shuhadah with him) (Zul Rafique & Partners) for the plaintiff. Yee Mei Ken (K Kavitha with him) (Shearn Delamore & Co) for the first defendant.

Geok Yiam J: GROUNDS OF JUDGMENT (No. 2) Background [1]On 22 May 2008, the plaintiff filed this defamation action against the 1st defendant (“Mead Johnson”) and the 2nd defendant (“Arachnid”) to claim for the following reliefs as set put in paragraph 18 of its Statement of Claim (“SOC”):

(i)

An injunction to. restrain the defendants from publishing similar libels of and concerning the plaintiff whether on its Website or by way of any other publication and whether through its directors, servants, agents and/or employees;

(ii)

General damages for libel;

(iii) Aggravated damages for libel; (iv) Exemplary damages for libel; (v)

Genera] damages for loss of business and share value;

(vi) Aggravated damages for loss of business and share value; (vii) Exemplary damages for loss of business and share value; (viii) Interest at the rate of 8% per annum pursuant to section 11 of the Civil Law Act 1956 from the first date of publication until the date of judgment;. (ix) Interest at the rate of 8% per annum pursuant to Order 42 rule 12 of the Rules of the High Court 1980 from the date of judgment to he date such judgment is satisfied in full;

Page 2 of 27 Stemlife Bhd v Mead Johnson Nutrition (M) Sdn Bhd (formerly known as Bristol-Myers Squibb (M) Sdn Bhd) & Anor .... (x)

Costs; and

(xi) Such further and/or any other relief that this Honourable Court deems fit and just.

Decision on liability dated 24 July 2013 [2]On 24 July 2013, after the conclusion of the full trial, the Court allowed the plaintiff’s claim on liability against Mead Johnson with costs but dismissed the plaintiff’s claim on liability against Arachnid with costs. In the grounds of judgment the Court held, inter alia, as follows: Primary issue (1), (2) and (3): Whether the words complained of and published on the website and in the blog are defamatory of and concerning the plaintiff and refer to the plaintiff?

In my judgment, based on the undisputed and proven facts, it is beyond any dispute that the words complained of were defamatory of and concerning the plaintiff.

In my judgment, the impugned postings were defamatory of the plaintiff because it gave rise to the negative meanings as pleaded by the plaintiff in paragraph 13 of its SOC.

The paragraph states as follows: 13. In their natural and ordinary meaning and/or alternatively by way of innuendo, all the words complained of were understood to bear the following defamatory meanings:— 13.1. That the Plaintiff is:—

(i)

a company which deceives and lies to its customers and is therefore a dishonest company;

(ii)

3 greedy company which is run and managed by greedy individuals;

(iii) a company which abuses its customers’ trust to further its own selfish interest and agenda, (financial or otherwise); (iv) a company which neglects and does not protect the interest of its customers; (v)

a company which is not led by qualified professionals in their field and practices a fraud or deception on members of the unsuspecting public;

(vi) a company which accepts cord bloods that are infected with viral diseases such as Hepatitis B and intentionally stores them at the same tank with uninfected specimens and therefore occasions a risk of contaminating healthy cord blood harvested from its customers; (vii) a company which lies and makes up false and inaccurate stories about its competitors to bring down their reputations; (viii) a company which seeks to make profit at the expense of its customers;

Page 3 of 27 Stemlife Bhd v Mead Johnson Nutrition (M) Sdn Bhd (formerly known as Bristol-Myers Squibb (M) Sdn Bhd) & Anor .... (ix) a company which practices unhygienic methods and is therefore unprofessional and unfit to be in its line of business; (x)

a company which will resort to harming any person who brings to light the Plaintiff’s (alleged) deceitful practices, crimes, dishonest dealings or unprofessional practices; and

(xi) a company which is generally unethical, incompetent, dishonest, unprofessional and inefficient.

Consequently, by reason of the publication of the defamatory statements in Mead Johnson’s website, the plaintiff has been seriously injured in its general reputation, its professional, business and trading reputation, the goodwill which it has previously enjoyed amongst its existing customers and the goodwill of its potential customers, in addition, the confidence in and the respect of its employees, agents, and representatives have been seriously eroded. This has caused the good name of the plaintiff to be diminished in the eyes of the general Malaysian public as pleaded in paragraph 14 of its SOC.

As a consequence of the publication by Mead Johnson of the defamatory statements, the plaintiff has been the subject of much public scrutiny, debate and contempt and has, therefore, suffered a loss of value, custom, business and profits.

…

Additional issue (6): Whether the court ought to hold Mead Johnson liable in damages to the plaintiff?

During the trial of the action, the plaintiff has led evidence to show, inter alia, the following:

(a)

The fact that the plaintiff was subject to much public scrutiny, debate and contempt and has suffered loss of value, custom, business and profits as a result of the publication of the words complained of;

(b)

The fact that the plaintiff has suffered a dimunition in the value of its shares. For instance, the value of the plaintiff’s shares had dropped from RM 4.90 per share as at 12 July 2007 (when the words complained of were first published) to a mere RM 2.07 per share as at 29 April 2008;

(c)

The fact that the plaintiff has suffered a drop in its sales. For instance, the plaintiff managed to secure 720 sales in the month of July 2007.

(d)

However there is an obvious drop in sales for subsequent months, following the publication of the words complained of. As at February 2008, the plaintiff only managed to secure 357 sales;

(e)

The learned counsel for Mead Johnson had attempted to suggest that there was ‘no drop’ in the plaintiff’s sales but PW2 had explained during re-examination that the plaintiffs sales went on a ‘decline’ mode after the publication of the words complained of and never did regain the high amount that it used to achieve prior to the publication. His evidence is as follows:

Page 4 of 27 Stemlife Bhd v Mead Johnson Nutrition (M) Sdn Bhd (formerly known as Bristol-Myers Squibb (M) Sdn Bhd) & Anor ....

Q Mr Lim, you were referred by learned counsel for the 1st Defendant to Bundle H, at Tab 29, page 124 to 125. Specifically to 125 and the question asked was that your sales had actually increased between 2007 to 2008. Would you like, Mr Lim, to describe to the court the trend of StemLife’s sales according to this chart? A If it’s based on the chart, from the year 2006 to 2007 we have an increase of 1000 units. On a percentage wise, it’s just under 20% growth. From 2007 to 2008, it’s just a mere increase 7258 units to 7360. So one can say that it’s only a 100 units increase in our sales. So the answer yes, the increase in sales is correct But percentage is less than 1%. Q And a suggestion was made to you by learned counsel for the 1st Defendant that your saies for the years after 2008 are not included and it was left at that. Would you like to explain to the court firstly how your sales proceeded after 2008? A From 2008 onwards, on an annual basis our sales continued within a decline mode. From 7300 over in 2009, if I can recollect, if I’m not mistaken, it’s about 6500 plus units, it went down, to about 5000 over, so today we are doing about less about, close to 5000 units.

The above is evidence of the general damages suffered by the plaintiff, which the plaintiff ought to be entitled to, arising from the publication of the libels by Mead Johnson.

In this regard, the Court ought to award a sum that would be just and proportionate to compensate the plaintiff for the adverse and damaging effects of the words complained of after having made an assessment based on further evidence, if any, adduced by the plaintiff and Mead Johnson.

In my view, Mead Johnson’s reliance on Khaw Cheng Poon & Ors v Khaw Cheng Bok & Ors and another appeal [2005] 6 MLJ 540 and Bonham-Carter v Hyde Park Hotel, Limited [1948] 64 TLR 177 is misconceived as both these cases did not relate to a claim for libel.

In my judgment, the plaintiff is entitled to claim against Mead Johnson for aggravated damages based on the following reasons:

(a)

The fact that Mead Johnson allowed the words complained of to be published for approximately 2 months before they were finally removed from the forum and/or the website by Mead Johnson;

(b)

The fact that Mead Johnson has not offered to make amends or any apology to the plaintiff to date;

(c)

The fact that Mead Johnson had recklessly published the words complained of and were indifferent to its falsity or truth;

(d)

The fact that Mead Johnson made available an avenue for the users of the website to post their comments and/or views on issues which are not relevant to Mead Johnson’s business and Mead Johnson would, consequently, have no way of ascertaining the truth of such statements; and

Page 5 of 27 Stemlife Bhd v Mead Johnson Nutrition (M) Sdn Bhd (formerly known as Bristol-Myers Squibb (M) Sdn Bhd) & Anor .... (e)

The fact that Mead Johnson attempted to raise the defence of accord and satisfaction when Mead Johnson knew very well that no such agreement ever existed.

On the issue of mitigation of losses suffered by the plaintiff and raised by Mead Johnson, the court will deal with the issue after the hearing for the assessment of damages.

[3]At the outset, I wish to state that it is clear from the above extracts from the judgment of this Court dated 24 July 2013, that the Court had found Mead Johnson liable in damages to the plaintiff because of the libels committed by Mead Johnson which had caused injury to the plaintiff’s general, professional and business reputation which had in turn caused the plaintiff to suffer losses and damage ie a diminished reputation and loss of value, custom, business and profits.

[4]In delivering its decision on liability, the Court had also invited further submissions from the learned counsels for both parties on the assessment of damages.

[5]The Court then adjourned the case to another date for the assessment of the quantum of damages and costs to be awarded against Mead Johnson.

[6]At the Case Management on 22 October 2013, it was agreed between the parties that the assessment of damages will proceed based on the documents that have been filed and admitted at the trial of this action.

[7]Being dissatisfied with the decision of the Court (“the decision on liability”), Mead Johnson has filed a notice of appeal to the Court of Appeal (“COA”) against the decision on liability of the Court which held that it was liable in damages to the plaintiff for defamation. The plaintiff did not file any notice of appeal to the COA against the decision of the Court dismissing its claim on liability against Arachnid for damages for defamation. Plaintiff’s claim for damages [8]The plaintiff claims for a global sum of RM 500,000.00 for general, aggravated and exemplary damages in respect of the following:

(i)

The libelous postings and hyperlinks that appeared in Mead Johnson’s website and on Mead Johnson’s forum; and

(ii) The losses and damage including the loss of business and share value that the plaintiff has suffered by reason of the libelous postings and hyperlinks. Submissions of Mead Johnson for the assessment of damages [9]Mead Johnson referred to its earlier submissions dated 6 March 2013 and 5 April 2013 which it had put in at the conclusion of the full trial of the plaintiff’s claim and which had addressed the plaintiff’s claim for damages.

Page 6 of 27 Stemlife Bhd v Mead Johnson Nutrition (M) Sdn Bhd (formerly known as Bristol-Myers Squibb (M) Sdn Bhd) & Anor .... [10]In addition, Mead Johnson also submitted as follows in its further submissions for the assessment of damages:

[11]An award of only nominal general damages in favour of the plaintiff is fair and reasonable and should be sufficient. This is because the evidence adduced by the plaintiff showed that the plaintiff did not suffer any real loss or damage.

[12]If Mead Johnson was indeed the cause of the plaintiffs alleged losses, the plaintiff, being a public listed company, could have issued a public announcement or circular to its investors to inform them of this. The plaintiff has not adduced any such evidence and in the absence of which, it is to be presumed that no such evidence existes.

[13]The plaintiff’s own confirmation that its financial position is healthy and intact is irrefutable evidence that there has been no loss or damage to the plaintiff from the postings and hyperlinks that appeared in Mead Johnson’s forum.

[14]The plaintiff also did not take steps to mitigate its losses and damage by immediately making a report to Mead Johnson of the defamatory postings so that the same could be removed immediately by Mead Johnson. Upon receiving the plaintiff’s letter of complaint, Mead Johnson has conducted itself responsibly in immediately removing the material complained of from its forum. Mead Johnson has also taken further steps on its own to introduce new keyword alerts to monitor any further postings concerning the plaintiff.

[15]The relevant timelines and events are as follows:

Date

Event

Reference

18 September 2007

Plaintiff first complained of the postings and hyperlinks on the forum and requested for its removal

Tab 6/ Bundle C

21 September 2007

Mead Johnson acted immediately and removed not only all the postings and hyperlinks complained of, but also all other related postings thereto within 3 days

Tab 7/ Bundle C List of topics removedTab 8/ Bundle C

24 September 2007

Plaintiff’s Finance Director wrote to the Securities Commission Malaysia, assuring them that “the financial condition of the company is healthy and intact with regard to certain defamatory allegations made against us [the plaintiff] on the internet”.

Tab 19/ Bundle H [Exhibit Plaintif-20]

30 November 2007

Mead Johnson took further steps of its

Tab 17/ Bundle C

Page 7 of 27 Stemlife Bhd v Mead Johnson Nutrition (M) Sdn Bhd (formerly known as Bristol-Myers Squibb (M) Sdn Bhd) & Anor .... own to deactivate the accounts of two users identified by the plaintiff, ‘kakalily’ and ‘stemlie’ though not requested by the plaintiff 22 May 2008

Notwithstanding:

p 456 of Tab 31/ Bundle D

(i) The immediate removal of the material complained of; (ii) The plaintiff’s own confirmation that its finances are healthy and intact; (iii) The suspension of the users accounts; and (iv) Mead Johnson’s addition of new keyword alerts to monitor any future postings concerning the plaintiff, The plaintiff commenced this suit against the Mead Johnson, 8 months after the postings and hyperlinks were removed from the forum

Tab A/ Bundle A

[16]The plaintiff has also failed to prove any loss of business or share value. In which case, there shall be no special damages payable under this heading.

[17]There has been no malice on the part of the 1st defendant. The plaintiff has also not satisfied the criteria which is necessary for the Court to make an award for aggravated and/or exemplary damages. Hence, there should be no award for any aggravated or exemplary damages at all in favour of the plaintiff. Submissions of the plaintiff for the assessment of damages [18]The plaintiff submitted as follows:

[19]The Court ought to award a global sum of RM 500,000.00 as damages in respect of general damages, aggravated damages, exemplary damages in its favour because its share price has gone down and the number of clients who have signed up with the plaintiff has decreased from the time of the posting of the libels on Mead Johnson’s website and in its forum.

[20]The Court ought to disregard the issue on the failure of the plaintiff to mitigate its losses and damage because there is no duty on the plaintiffs part to mitigate its losses and damage.

[21]Apart from that Mead Johnson did not plead this issue in its Defence.

[22]It is trite law that any issue that is not specifically pleaded by the parties in their pleadings ought to be

Page 8 of 27 Stemlife Bhd v Mead Johnson Nutrition (M) Sdn Bhd (formerly known as Bristol-Myers Squibb (M) Sdn Bhd) & Anor .... disregarded by the Court.

[23]There is no requirement under the law of libel that a plaintiff would have to respond or answer to a defamatory publication. There is no legal principle that the failure of a plaintiff to do so in libel cases would mean that the plaintiff has failed to ‘mitigate’ his injury or damage and hence this failure on the plaintiff’s part must be taken into consideration in order to reduce the amount of damages to be awarded by the Court to the plaintiff.

[24]In fact, Mead Johnson has not cited a single authority (in relation to libel law) to support its proposition. It makes no logical or legal sense that in a situation where Mead Johnson has committed a tort against the plaintiff, it behoves the plaintiff to reduce its loss. This is a defence which is not available to Mead Johnson and hence, it was not pleaded by Mead Johnson and such a defence, if pleaded, is unprecedented in the law of libel. Decision of the Court [25]On 24 March 2014, after the conclusion of the hearing for the assessment of damages, the Court made the following orders on the quantum of damages to be awarded to the plaintiff in respect of the plaintiff’s claims in paragraph 18 of its SOC:

1.

In respect of paragraph 18 (ii), the Court orders that the 1st defendant pays the plaintiff a sum of RM 200,000.00 as general damages for libel;

2.

In respect of paragraph 18 (iii), the Court orders that the 1st defendant pays the plaintiff a sum of RM 50,000.00 as aggravated damages for libel;

3.

In respect of paragraph 18 (iv), the Court dismisses the plaintiffs claim for exemplary damages for libel;

4.

In respect of paragraph 18 (v), the Court dismisses the...