Our firm recently represented the appellant, a professional in a financial service industry, in a civil appeal before the Court of Appeal, which addressed the delicate boundary between formal complaints and defamation. At the High Court, our client had sued two defendants for defamation and fraud arising from several complaints made against him to his company. The High Court dismissed the claim. On appeal, the Court of Appeal allowed the appeal, set aside the decision of the High Court, and awarded the following:
1. General damages for defamation – RM200,000.00
2. Aggravated damages for the defamation – RM30,000.00
3. Costs – RM50,000.00
In its decision, the Court of Appeal found that the statements made by the defendants in their complaints fulfilled the elements of defamation and that the defences raised were not made out on the facts. This article summarises the background, the key legal issues considered by the Court, and the lessons the case offers on when a formal complaint may cross the line into defamation.
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Brief Facts
The appeal arose from a dispute between a professional in the financial services industry and two individuals who had previously dealt with the appellant. Following the breakdown of a business relationship, the individuals submitted complaints to the professional’s principal company, alleging dishonesty, forgery, and unprofessional conduct.
The company conducted an internal investigation but found no wrongdoing. Despite this, the complaints had already caused significant reputational harm to the professional. At trial, the High Court dismissed the claim, accepting that the complaints were made in “good faith.” On appeal, the Court of Appeal disagreed, finding that the elements of defamation had been satisfied and that no defence was successfully raised.
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The Law on Defamation
It is trite law that in order to prove defamation, the Claimant must prove the following elements:
1. The statement must bear defamatory imputations;
2. It must refer to or reflect upon the claimant; and
3. It must have been published to at least one third party.
If these elements are met, the burden then shifts to the defendant to prove a valid defence such as justification, fair comment, or qualified privilege.
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When a Complaint Becomes Defamatory
a. Defamatory Imputation
In this case, the complaints accused the professional of dishonesty, forgery, and fraudulent conduct, even to the extent of labelling him as a “fraudster”. These are among the most serious allegations that can be made against a person, particularly in a field where integrity and trust are core professional values. The Court of Appeal observed that such statements plainly carry a defamatory meaning. They tend to lower a person in the estimation of right-thinking members of society and can cause serious reputational harm even if made within an organisation.
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b. Reference to the Appellant
The Court noted that the complaints explicitly identified the individual concerned by name and position. There was no ambiguity about who was being accused. The second element was therefore easily satisfied.
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c. Publication
Although the complaints were addressed to the organisation’s customer service department, they were accessible to multiple employees and departments. The Court held that this constituted publication to third parties, since the statements were communicated to persons other than the plaintiff and were understood by them.
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The Limits of Privilege
The respondents relied on the defence of qualified privilege, arguing that their complaints were made in good faith through a proper reporting channel. While the law does protect good-faith communications made in the discharge of a duty or to protect a legitimate interest, the Court of Appeal noted that this protection is not automatic and must be properly pleaded and substantiated.
In particular, the Court of Appeal found that the respondents had failed to comply with Order 78 rule 3(3) of the Rules of Court 2012, which requires a defendant who relies on a defence of justification, fair comment or qualified privilege to serve particulars of the facts and matters relied upon. The respondents had not done so.
This procedural failure was significant: without proper particulars, the defence of privilege was defective in form and substance. Consequently, the Court of Appeal held that the respondents could not rely on the defence of qualified privilege. On the evidence, the Court was further satisfied that the statements complained of lacked factual foundation and had caused reputational harm to the appellant.
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Damages in Defamation
The Court also addressed the issue of damages. While reputational injury is presumed once defamation is proven, substantial compensation requires proof of actual loss or aggravating circumstances.
Where there is no quantifiable financial loss, courts may award nominal or moderate general damages to vindicate reputation. However, aggravated damages may be appropriate where the conduct of the defendant or the nature of the publication aggravates the injury.
In this case, the Court of Appeal awarded:
• RM200,000.00 as general damages, and
• RM30,000.00 as aggravated damages.
The damages awarded reflects the seriousness of the defamatory allegations and their impact on the appellant’s professional standing.
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Practical Lessons from the Decision
a. For Complainants
Lodging a complaint through a formal channel does not confer automatic immunity. Individuals must ensure that what they report is factually accurate and made in good faith. Reckless or exaggerated statements, especially those impugning honesty or integrity, may give rise to defamation liability.
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b. For Organisations
Employers and institutions should treat complaints as sensitive communications and ensure that internal handling is discreet. Circulating unverified allegations too widely may amount to publication and expose the organisation to potential claims.
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c. For Professionals
The case highlights the importance of maintaining clear records of dealings and correspondence. Such evidence can be critical in rebutting false allegations. It also reminds professionals that while damages may be limited in the absence of proven financial loss, vindication of reputation remains a valuable legal remedy.
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d. For Legal Practitioners and HR Teams
This decision illustrates that qualified privilege will not protect communications made without reasonable grounds or for ulterior purposes. Organisations should emphasise responsible reporting procedures and confidentiality when managing internal or external complaints.
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Broader Implications
The Court of Appeal’s decision reflects a balanced approach between encouraging legitimate complaints and protecting individuals from reputational harm. By reaffirming that privilege is conditional on honesty and the absence of malice, the Court preserved both the integrity of complaint mechanisms and the importance of reputation in professional life. The ruling also serves as a reminder that language matters. Allegations of “fraud,” “forgery,” or “dishonesty” should never be made lightly or without evidence. Once such accusations are circulated, even within an organisation, the harm to reputation may be irreparable.
.
Conclusion
The Court of Appeal’s decision underscores a clear principle: formal complaints are not a shield for defamation. The right to raise concerns must be exercised responsibly, fairly, and with due regard to truth.
A complaint made maliciously or without factual basis, even though an official channel, can still attract liability once it crosses the line into defamation. In an era of instant digital communication, where complaints can be made and shared in seconds, this decision offers an important reminder that professionalism, accuracy, and restraint remain the best safeguards against reputational damage for both the complainant and the person complained of.
When Formal Complaints Cross the Line: Lessons on Defamation and Privilege from the Court of Appeal
Introduction
Our firm recently represented the appellant, a professional in a financial service industry, in a civil appeal before the Court of Appeal, which addressed the delicate boundary between formal complaints and defamation. At the High Court, our client had sued two defendants for defamation and fraud arising from several complaints made against him to his company. The High Court dismissed the claim. On appeal, the Court of Appeal allowed the appeal, set aside the decision of the High Court, and awarded the following:
In its decision, the Court of Appeal found that the statements made by the defendants in their complaints fulfilled the elements of defamation and that the defences raised were not made out on the facts. This article summarises the background, the key legal issues considered by the Court, and the lessons the case offers on when a formal complaint may cross the line into defamation.
.
Brief Facts
The appeal arose from a dispute between a professional in the financial services industry and two individuals who had previously dealt with the appellant. Following the breakdown of a business relationship, the individuals submitted complaints to the professional’s principal company, alleging dishonesty, forgery, and unprofessional conduct.
The company conducted an internal investigation but found no wrongdoing. Despite this, the complaints had already caused significant reputational harm to the professional. At trial, the High Court dismissed the claim, accepting that the complaints were made in “good faith.” On appeal, the Court of Appeal disagreed, finding that the elements of defamation had been satisfied and that no defence was successfully raised.
.
The Law on Defamation
It is trite law that in order to prove defamation, the Claimant must prove the following elements:
If these elements are met, the burden then shifts to the defendant to prove a valid defence such as justification, fair comment, or qualified privilege.
.
When a Complaint Becomes Defamatory
The Limits of Privilege
The respondents relied on the defence of qualified privilege, arguing that their complaints were made in good faith through a proper reporting channel. While the law does protect good-faith communications made in the discharge of a duty or to protect a legitimate interest, the Court of Appeal noted that this protection is not automatic and must be properly pleaded and substantiated.
In particular, the Court of Appeal found that the respondents had failed to comply with Order 78 rule 3(3) of the Rules of Court 2012, which requires a defendant who relies on a defence of justification, fair comment or qualified privilege to serve particulars of the facts and matters relied upon. The respondents had not done so.
This procedural failure was significant: without proper particulars, the defence of privilege was defective in form and substance. Consequently, the Court of Appeal held that the respondents could not rely on the defence of qualified privilege. On the evidence, the Court was further satisfied that the statements complained of lacked factual foundation and had caused reputational harm to the appellant.
.
Damages in Defamation
The Court also addressed the issue of damages. While reputational injury is presumed once defamation is proven, substantial compensation requires proof of actual loss or aggravating circumstances.
Where there is no quantifiable financial loss, courts may award nominal or moderate general damages to vindicate reputation. However, aggravated damages may be appropriate where the conduct of the defendant or the nature of the publication aggravates the injury.
In this case, the Court of Appeal awarded:
The damages awarded reflects the seriousness of the defamatory allegations and their impact on the appellant’s professional standing.
.
Practical Lessons from the Decision
Broader Implications
The Court of Appeal’s decision reflects a balanced approach between encouraging legitimate complaints and protecting individuals from reputational harm. By reaffirming that privilege is conditional on honesty and the absence of malice, the Court preserved both the integrity of complaint mechanisms and the importance of reputation in professional life. The ruling also serves as a reminder that language matters. Allegations of “fraud,” “forgery,” or “dishonesty” should never be made lightly or without evidence. Once such accusations are circulated, even within an organisation, the harm to reputation may be irreparable.
.
Conclusion
The Court of Appeal’s decision underscores a clear principle: formal complaints are not a shield for defamation. The right to raise concerns must be exercised responsibly, fairly, and with due regard to truth.
A complaint made maliciously or without factual basis, even though an official channel, can still attract liability once it crosses the line into defamation. In an era of instant digital communication, where complaints can be made and shared in seconds, this decision offers an important reminder that professionalism, accuracy, and restraint remain the best safeguards against reputational damage for both the complainant and the person complained of.
About the author
Damia Amani
Associate
Dispute Resolution
Harold & Lam Partnership
[email protected]
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