Citation : JWH GROUP PTY LTD -v- BUCKERIDGE [No 3] [2009] WASC 271

Defamation - Interlocutory appeal- Pleadings - Whether Polly Peck imputation capable of arising - Whether Polly Peck imputation lacks precision - Whether a permissible Polly Peck defence - Turns on own facts

Defamation Act 2005 (WA), s 48(1)

Leave granted and appeal allowed on grounds 1, 2 and 3

Aspro Travel Ltd v Owners Abroad Group plc [1996] 1 WLR 132

Birmingham v West Australian Newspapers Ltd [1999] WASC 19

Buckeridge v Walter [2007] WASCA 19

Chakravarti v Advertiser Newspapers Ltd [1998] HCA 37; (1998) 193 CLR 519

David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; (2000) 1 VR 667

Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135

Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 221 ALR 186

General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125

Lewis v Daily Telegraph Ltd [1964] AC 234

Moir v Flint [2001] WASC 183

Nationwide News Pty Ltd v Moodie [2003] WASCA 273; (2003) 28 WAR 314

Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1975] HCA 6; (1975) 134 CLR 1

Taylor v Jecks (1993) 10 WAR 309

Vitale v Bednall [2001] WASC 278

West Australian Newspapers v Elliott [2008] WASCA 172

Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40

Wilson v Metaxas [1989] WAR 285

1 McLURE P: The appellant (defendant) applies for leave to appeal, and if leave is granted, to appeal from orders made by Le Miere J on 17 September 2009 striking out his Polly Peck defence in a defamation action. In particular, the appellant seeks to appeal from the striking out of [4B.2], [4B.3] and [10A] of the further re-amended substituted defence dated 13 May 2009 (the defence). This was the respondent's (plaintiff) second successful application to strike out the appellant's Polly Peck defence. See Buckeridge v Walter [2007] WASCA 19.

2 The respondent (Mr Walter) pleads that he is and at all material times was the managing director of JWH Group Pty Ltd (JWH). The appellant (Mr Buckeridge) is and at all material times was a director of J-Corp Pty Ltd (J-Corp).

3 The respondent pleads that on 17 December 2003 during a telephone conversation with Mr Neale Prior, a financial journalist with The West Australian newspaper, the appellant spoke the following words to Mr Prior of and concerning the respondent:

PRIOR: What's this writ by J-Corp and Kimpura suing Walter for about $700,000 all about?

BUCKERIDGE: This claim is based on figures compiled by Price Waterhouse Coopers, which had been nominated by Walter to carry out calculations for the Deed. I think the reason that he does not want to pay is because he does not have the money to pay [3].

4 The respondent pleads that the words in their natural and ordinary meaning [4.1], and by way of (true) innuendo meaning [5.2], meant that the respondent had not paid approximately $700,000 to J-Corp and Kimpura Pty Ltd (Kimpura) which sum he was legally obliged to pay, because he did not have the money to do so.

5 The extrinsic facts relied on by the respondent to support the true innuendo are that J-Corp and Kimpura had issued a writ against Oswald Homes (1972) Pty Ltd (Oswald Homes), Rural Building Company Pty Ltd (Rural Building), WA Country Builders Pty Ltd (WA Country Builders), JWH, Julian Walter Holdings Pty Ltd (JW Holdings) and Julian Walter which claimed damages arising from the failure of Oswald Homes, Rural Building and WA Country Builders to pay to J-Corp monies totalling $698,946 owing pursuant to deeds executed on 6 June and 31 July 2003 entitled 'Deed Governing Sale' and 'Deed of Variation - Deed Governing Sale'.

6 The respondent further pleads that the sense and substance of the spoken words complained of was republished in The West Australian newspaper on 18 December 2003 in an article entitled 'Buckeridge, Walter, sling brickbats' and upon the newspaper's website (the article) and that Mr Buckeridge is liable for the publication of the article. The respondent pleads that the article, in its natural and ordinary meaning, had the same meaning as the spoken words complained of, namely that Mr Walter had not paid approximately $700,000 to J-Corp and Kimpura which sum he was legally obliged to pay, because he did not have the money to do so.

7 As the words complained of were published in December 2003, the Defamation Act 2005 (WA) does not apply (s 48(1)).

8 The appellant pleads that the spoken words complained of form part of a larger conversation which provides the context and true meaning of the words complained of. The appellant pleads that he spoke the following words:

The claim is made under a formula that was included in the Deed governing the carve up of the J-Corp assets.

The claim is based on figures compiled by Price Waterhouse Coopers, which had been nominated by Walter to carry out the calculations for the Deed.

I think he doesn't want to pay because he hasn't got the money. BGC has had difficulties getting paid by JWH for building materials supplied by BGC to JWH since the carve up of J-Corp. BGC will only supply Walter's new group on a cash-on-delivery basis from next month.

9 In [4B] the appellant pleads that if the spoken words complained of in their proper context bore any meaning defamatory of the respondent, those words by reason of the extrinsic facts bear the following meanings:

4B.2 further or alternatively, there were reasonable grounds to believe that [Mr Walter], as owner and controller of the JWH Group of Companies, had caused not to be paid a lawful debt of approximately $700,000 then due to J-Corp and Kimpura, failing to support his corporate businesses at a time when funds needed to satisfy the debt were not available to the JWH Group of Companies;

4B.3 further or alternatively, [Mr Walter], as owner and controller of the JWH Group of Companies, had caused not to be paid a lawful debt of approximately $700,000 then due to J-Corp and Kimpura, failing to support his corporate businesses at a time when funds needed to satisfy the debt were not available to the JWH Group of Companies;

10 The Polly Peck defence to the claim based on the article is in [10A], which provides:

[F]urther or alternatively, if, which is denied, the words pleaded in paragraph 9 of the statement of claim bore any meaning defamatory of [Mr Walter], those words in their natural and ordinary meaning meant or were understood to mean that:

10A.1 [Mr Walter] had consciously and without oversight not paid approximately $700,000 to J-Corp and Kimpura which sum he was legally obliged to pay;

10A.2 further or alternatively, there were reasonable grounds to believe that [Mr Walter], as owner and controller of the JWH Group of Companies, had caused not to be paid a lawful debt of approximately $700,000 then due to J-Corp and Kimpura, failing to support his corporate businesses at a time when funds needed to satisfy the debt were not available to the JWH Group of Companies;

10A.3 further or alternatively, [Mr Walter], as owner and controller of the JWH Group of Companies, had caused not to be paid a lawful debt of approximately $700,000 then due to J-Corp and Kimpura, failing to support his corporate businesses at a time when funds needed to satisfy the debt were not available to the JWH Group of Companies;

and the said words were true in substance and fact.

11 The primary judge struck out the imputation pleaded in [10A.1] (the first Polly Peck imputation) on the grounds that:

(1) it is not reasonably capable of arising from the article [32];

(2) it failed to state the precise act or condition asserted of, or attributed to, the respondent or with which he was charged [35]; and

(3) it was not a permissible Polly Peck imputation [73].

12 The imputations in [4B.2] and [10A.2] are the same (the second Polly Peck imputations) and the imputations in [4B.3] and [10A.3] are the same (the third Polly Peck imputations). The primary judge struck out the second and third Polly Peck imputations on the grounds that:

(1) they failed to state the precise act or condition asserted of, or attributed to, Mr Walter [90], [95];

(2) they are not a permissible Polly Peck imputation [93], [95].

13 The grounds of appeal (excluding particulars) are that the primary judge erred in law:

(1) in striking out [10A.1] of the defence by determining that the imputation:

(a) was not capable of arising from the words complained of (ground 1);

(b) failed to express the precise act or condition asserted of, or attributed to Mr Walter, or with which he is charged (ground 2); and

(c) was substantially different from the imputation pleaded by Mr Walter (ground 3);

(2) in striking out [4B.2], [4B.3], [10A.2] and [10A.3] of the defence by determining that the imputations:

(a) failed to express the precise act or condition asserted of, or attributed to Mr Walter (ground 4);

(b) were substantially different from the imputation pleaded by Mr Walter (ground 5).

14 In relation to grounds of appeal 1(c) and 2(b) the appellant claims that the relevant test is not whether the imputation is substantially different from the imputation pleaded by the respondent; in the alternative, the imputation is not substantially different from the imputation pleaded by the respondent, or it is at least arguable that the imputation is not substantially different.

15 As the appellant requires leave to appeal, he must demonstrate that the decision of the primary judge was wrong or attended with sufficient doubt to justify the grant of leave and that he would suffer a substantial injustice if the decision was not reversed: Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40; Wilson v Metaxas [1989] WAR 285.

Whether first Polly Peck imputation is capable of arising

16 A pleading should only be struck out if the court concludes that it is clearly untenable or manifestly groundless: Taylor v Jecks (1993) 10 WAR 309, [45]; General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, 130.

17 Whether the imputations pleaded by the appellant are capable of being conveyed by the words complained of is a question of law and is to be determined having regard to the General Steel test.

18 In deciding whether or not words are capable of conveying the alleged defamatory imputation, the court will reject those meanings which can only emerge as the product of some strained or forced or utterly unreasonable interpretation and will assume that the ordinary reader is a person of fair average intelligence who does not live in an ivory tower, who is not unusually suspicious or naive or avid for scandal and who is not inhibited by strict rules of construction: Lewis v Daily Telegraph Ltd [1964] AC 234, 285; Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 221 ALR 186, 190.

Mr Walter had consciously and without oversight not paid approximately $700,000 to J-Corp and Kimpura which sum he was legally obliged to pay.

20 An issue at the hearing of the appeal was whether the words 'consciously and without oversight' (which can be taken to mean 'knowingly') applies to both (1) not paying the money and (2) the legal liability to pay. The position of the appellant was that it applied, and was intended to apply, to both (ts 61). I will proceed on that basis. Accordingly, the substance of the imputation is that Mr Walter had knowingly not paid approximately $700,000 to J-Corp and Kimpura which sum he was (to his knowledge) legally liable to pay.

21 It was also accepted by both parties that it is reasonably arguable that it is defamatory to say that a person cannot or will not pay his debts or has delayed paying his debts: Aspro Travel Ltd v Owners Abroad Group plc [1996] 1 WLR 132, 137; Gatley on Libel and Slander (11th ed), [2.21]. Gatley explains:

No element of misconduct is required; even if delay in paying or inability to pay a debt is the result of misfortune, to impute such delay or inability to someone would tend to injure his credit in a financial sense, which the law protects as part of his reputation [2.21].

22 The appellant does not persist with his claims, struck out by the primary judge, that an imputation in the same terms as the first Polly Peck imputation arises from the spoken words complained of. He relies on the additional material contained in the article to support that imputation. It is necessary to refer to the entire article which is as follows:

BUCKERIDGE, WALTER SLING BRICKBATS

THE simmering row between construction mogul Len Buckeridge and his former business partner, Julian Walter, has erupted into tit-for-tat litigation over the carve-up of their former building joint venture J-Corp Pty Ltd.

Mr Buckeridge is pushing for a quick judgment in the WA Supreme Court after two of his private companies, including J-Corp Pty Ltd itself, sued Mr Walter for about $700,000 last month over valuations of J-Corp and its assets.

The companies are claiming to be owed the money as a deferred settlement payment over their carve-up in July of J-Corp that ended with Mr Buckeridge owning 100 per cent of J-Corp and Mr Walter owning its Oswald, Rural Building Co and WA Country Builders brands.

In other developments, Mr Buckeridge has vowed to cut off the credit provided by his building materials operations for material supplied to Mr Walter's new home building venture, JWH Group.

Mr Walter is hitting back with a defamation action in the WA Supreme Court, claiming his reputation was damaged in the in-house newsletter of the mogul's flagship BGC group.

In the newsletter, Mr Buckeridge described the buy-out of J-Corp as a very unpleasant business and gave his interpretation of what he described as an accountancy investigation.

Mr Walter said his lawyers would lodge a writ against Mr Buckeridge for defamation today unless he retracted comments in the BGC Bulletin and apologised.

Mr Buckeridge vowed to fight, saying he would use truth as a defence to a defamation action.

Industry observers had been expecting a legal war in the wake of Mr Walter and Mr Buckeridge breaking up in July after 18 years together as joint owners of J-Corp, which was WA's second biggest building group last year.

But until recent weeks, litigation was confined to JWH suing J-Corp over the former joint venture company advertising two home designs that Mr Walter claims went with him.

J-Corp and Buckeridge-controlled Kimpura Pty Ltd lodged a writ in the Supreme Court last month alleging they are owed $698,947 plus interest under a formula that was included in a deed governing the carve-up of J-Corp assets in July.

Mr Buckeridge told WestBusiness that the claim was based on figures compiled by PricewaterhouseCoopers, which had been nominated by Mr Walter to carry out calculations for the deed.

'I think he doesn't want to pay because he hasn't got the money', he said.

Mr Buckeridge said BGC had difficulty being paid by JWH for building materials supplied since the carve-up and would only supply Mr Walter's new group as cash-on-delivery basis from next month.

But Mr Walter rejected claims by Mr Buckeridge that JWH had not paid BGC for building materials, saying his group had withheld some money recently because BGC was slow in paying rebates for bulk discounts. He would no longer use BGC as a supplier if credit was cut.

Mr Walter said the Supreme Court action would be defended because the final accounts were based on valuations acceptable to BGC and involved changes to the underlying accounting policies at J-Corp.

23 There is an overlap between the first Polly Peck imputation and the only imputation pleaded by the respondent which is:

Mr Walter had not paid approximately $700,000 to J-Corp Pty Ltd and Kimpura Pty Ltd which sum he was legally obliged to pay, because he did not have the money to do so.

24 The only material difference between the appellant's imputation and the respondent's imputation is that the latter states the reason for not paying the debt. The respondent's imputation impliedly excludes other grounds for non-payment such as lack of knowledge, oversight or disputed liability.

25 The first Polly Peck imputation does not expressly identify the reason for Mr Walter not paying the money. However, applying the standard of the ordinary reasonable reader, knowledge of both non-payment of, and a legal obligation to pay, the money must impliedly exclude a bona fide disputed debt as a potential reason for not paying. The ordinary reasonable reader would infer that a legal liability to pay means the obligation would be enforced by the courts.

26 The primary judge concluded that the article could not lead a reasonable reader to infer that the respondent had not paid the sum legally due for some reason unrelated to the state of his finances (there being no contention by the appellant that the defamatory sting about the state of his finances was removed by the respondent's explanation for the failure) [30], [32]. The respondent contends that because the article descends to details of the competing reasons for the mutually acknowledged failure to pay the money when it was due under the deed, the first Polly Peck imputation is incapable of arising.

27 I am not persuaded that the first Polly Peck plea is incapable of arising from the article. It would be open to an ordinary reasonable reader to infer that there was no bona fide dispute about the legal liability to pay the money but not be prepared to infer that the non-payment was because Mr Walter did not have the money. The tenor of the article as a whole suggests that people were expecting a legal war between Mr Buckeridge and Mr Walter after the break up of their common building business which expectation had materialised in a flurry of litigation that was not primarily motivated by commercial circumstances or considerations, leaving it open to the reasonable reader to draw the inference that Mr Walter knowingly refused to pay the money owing under the deed for reasons about which they were not prepared to draw conclusions. I would uphold ground 1.

Whether first Polly Peck imputation lacks precision

28 A Polly Peck imputation must satisfy the same pleading rules that apply to a plaintiff's imputation. In particular, the imputation must express the precise act or condition asserted of or attributed to the plaintiff: Birmingham v West Australian Newspapers Ltd [1999] WASC 19 and represent the final distillation of the alleged defamatory meaning: Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1975] HCA 6; (1975) 134 CLR 1.

29 However, difficulty often arises in the application of the principles for the reasons identified by Gleeson CJ in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135, 137:

The requirement that a plaintiff must 'specify' the act or condition which

he claims was attributed to him, that is to say, the statement which he says

was made about him ... is one which, in its practical application, raises questions of degree. Almost any attribution of an act or condition to a person is capable of both further refinement and further generalisation. In any given case a judgment needs to be made as to the degree of particularity or generality which is appropriate to the occasion, and as to what constitutes the necessary specificity. If a problem arises, the solution will usually be found in considerations of practical justice rather than philology.

30 The primary judge reasoned that the defamatory sting of the allegations against the respondent lies in the reasons for, or circumstances in which, the respondent had not paid the sum he was obliged to pay. The appellant's failure to state the reasons or circumstances was, he said, likely to lead to confusion at trial and unfairness to the respondent [35].

31 The reasoning leading to my conclusion that the first Polly Peck imputation is capable of arising from the article is inconsistent with the primary judge's conclusion that the defamatory sting is necessarily (and unarguably) confined to the reasons for, or circumstances in which, the respondent had not paid the sum he was legally liable to pay. Thus the basis for the primary judge's conclusion that the first Polly Peck imputation is insufficiently precise falls away. Proceeding on the basis of the appellant's position that 'knowledge' applies to both aspects of the imputation, there is no ambiguity in the act (which encompasses an omission) or condition complained of; it is that the respondent had knowingly not paid a sum of money that he knew he was legally liable to pay. That imputation is at a higher level of generality than the respondent's imputation but that is permissible in a situation where a defamatory imputation in those terms is capable of arising. I would uphold ground 2.

Whether first Polly Peck imputation permissible

32 The primary judge found that the first Polly Peck imputation was not permissible. He said:

The [appellant's] imputation may be said to be wider or at a higher level of generality. The [appellant's] imputation includes within it the [respondent's] meaning and meanings inconsistent with the [respondent's] meaning. The [appellant's] imputation includes within it the meaning that the [respondent] had engaged in discreditable conduct by not paying so as to avoid or delay paying a debt in circumstances where he was not prevented or impeded from doing so by his financial circumstances. That is a meaning which reflects upon the [respondent's] honesty. The [respondent's] imputation reflects upon his creditworthiness but not his honesty.

The defamatory sting of the [respondent's] imputation is that he did not have the money to pay. It is that circumstance that gives meaning to the imputation that the [respondent] had not paid the sum due. The [appellant's] meaning steers clear of that aspect of the meaning pleaded by the [respondent]. It does not meet the sting of the imputation relied upon by the [respondent].

The [appellant's] imputation is created by removing or ignoring the critical aspect of the meaning alleged by the [respondent], or by raising the meaning alleged by the [respondent] to a higher level of generality so as to change the meaning to a meaning that includes meanings that are inconsistent with the [respondent's] meaning [71] - [73].

33 In deciding that the first (and the second and third) Polly Peck imputations were not permissible, the primary judge applied the test approved by this court in West Australian Newspapers v Elliott [2008] WASCA 172. The test approved in Elliott is that a defendant cannot plead and justify a meaning substantially different from, or more injurious than, the meanings alleged by the plaintiff. It derives from the judgments of Ormiston JA and Charles JA in David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; (2000) 1 VR 667 [21] - [22], [52]. As the test is expressed in negative terms, the requirements are cumulative.

34 Prior to Elliott, I raised the possibility that the Hore-Lacy test was arguably inconsistent with the majority decision in Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519: Vitale v Bednall [2001] WASC 278; Moir v Flint [2001] WASC 183; Nationwide News Pty Ltd v Moodie [2003] WASCA 273; (2003) 28 WAR 314 [88].

35 The appellant invited this court to decide that the Hore-Lacy test is wrong and to apply a test based on the observations of Gaudron and Gummow JJ in Chakravarti [60] to the effect that a plaintiff (and by extension a defendant) will ordinarily be permitted to rely on meanings which are comprehended in, or are less injurious than, the meaning pleaded in the statement of claim. Stated in this positive form, the requirements are in the alternative. The appellant also invites the court to go further and sever the link between the extent to which a plaintiff may depart from its pleaded imputations at trial and the availability of a Polly Peck defence.

36 I agreed with Steytler P in Elliott that the Hore-Lacy test should be applied, including in the determination of interlocutory applications, because his survey of decisions of intermediate appellate courts in Australia revealed general support for the Hore-Lacy test. Moreover, Elliott followed the principle, well-established in this jurisdiction and elsewhere, that the scope for pleading a Polly Peck defence is delineated by the extent to which a plaintiff can depart from his or her pleaded imputations: Elliott [20], [74]; Nationwide News Pty Ltd v Moodie [13], [59], [85]. I see no justification for departing from the law as stated in Elliott.

37 However, as noted in Elliott, the Hore-Lacy test is inconsistently applied with inconsistent outcomes. What informed my approach in Elliott to the application of the requirement that a Polly Peck plea not be 'substantially different' from the plaintiff's imputation is that a Polly Peck defence of its nature must permit a defendant to plead and justify an imputation which is sufficiently different from the plaintiff's imputations such that different evidence would be required to justify it [75] - [77]. The evidence relevant to prove the first Polly Peck imputation is also relevant to, but would fall short of, establishing the truth of the respondent's imputation. That is because the Polly Peck imputation is a subset of, and comprehended within, the respondent's imputation. In those circumstances I would not characterise the first Polly Peck imputation as substantially different from the respondent's imputation.

38 Moreover, I would not characterise the first Polly Peck imputation as more injurious than the respondent's imputation. An imputation that a person in the building trade has not paid a sum of money which he is legally obliged to pay because he did not have the money is a particularly injurious allegation with the potential for very serious consequences. The first Polly Peck imputation would only arise if the ordinary reasonable reader was not prepared to infer the reason for the respondent's conduct. That is inconsistent with the primary judge's assessment that the first Polly Peck imputation must imply that the respondent had acted dishonestly. I would uphold ground 3.

Whether second and third Polly Peck imputations lack precision

39 There is no material difference between the second and third Polly Peck imputations for the purposes of this ground.

40 The primary judge identified the heart of the allegation to be that the respondent failed to support his corporate businesses by advancing to them his personal funds or using his personal assets or credit to obtain funds for the companies by way of loan or otherwise. He continued:

However, the imputation fails to express the precise act or condition asserted of, or attributed to, [the respondent]. It is not clear whether the sting of the imputation is intended to relate to [the respondent's] personal financial position and his inability to 'support his corporate businesses' or some lack of business morality in failing to 'support his corporate businesses' when he was able to do so [91].

41 The issue is also fudged in the appellant's particulars. I agree with the primary judge that the second and third Polly Peck imputations fail to express the precise act or condition asserted of or attributed to the respondent for the reasons he gives. Moreover, unlike the respondent's imputation and the first Polly Peck imputation, these imputations do not relate to the respondent's condition, he not being the alleged debtor. I would dismiss ground 4.

Whether second and third Polly Peck imputations permissible

42 There is also no material difference between the second and third Polly Peck imputations for the purposes of this ground. The primary judge concluded that the second and third Polly Peck imputations are of a different character and substantially different from the respondent's imputation for the same reasons that led him to that conclusion in relation to the first Polly Peck imputation ([93], [95]).

43 I infer the opening remarks (which the primary judge found did not adversely reflect on the propriety of the respondent's conduct) are an attempt to bring these imputations as close as possible into line with the respondent's imputation. However, there is no obvious connection between the respondent's conduct in causing the non-payment of the debt and the allegedly defamatory act or condition (whatever that might be).

44 In my view, the substance of the second and third Polly Peck imputations is substantially different from the respondent's imputation. It is an essential component of the defence imputations that the corporate entities associated with the respondent did not have the financial capacity to pay the money then owing to J-Corp and Kimpura. Whether or not the corporate businesses had funds available to pay the debt travels well outside the respondent's imputation unless the failure is expressly connected with Mr Walter's financial incapacity. I would dismiss ground 5.

45 I have concluded that the primary judge erred in striking out the first Polly Peck imputation. Having regard to the nature of the proceedings, I am satisfied that the appellant would suffer a substantial injustice if that decision was not reversed. Accordingly, I would grant leave on, and uphold, grounds 1, 2 and 3 relating to [10A.1] of the defence. I would refuse leave to appeal on grounds 4 and 5 and hear from the parties as to the orders that should be made to give effect to these reasons.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : BUCKERIDGE -v- WALTER [2010] WASCA 134 (S)

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : JWH GROUP PTY LTD -v- BUCKERIDGE [No 3] [2009] WASC 271

Costs - Costs of appeal - Application for indemnity certificate - Turns on own facts

Rules of the Supreme Court 1971 (WA), O 66 r 1(1), O 66 r 1(3)

Suitors' Fund Act 1964 (WA), s 10(a)

Respondent to pay 75% of the appellant's cost of appeal to be taxed

Amaca Pty Ltd v Moss [2007] WASCA 162(S)

Buckeridge v Walter [2010] WASCA 134

David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; (2000) 1 VR 667

Jones v Dalcon Construction Pty Ltd [2006] WASCA 205(S)

West Australian Newspapers Ltd v Elliott [2008] WASCA 172

1 McLURE P: These reasons relate to the costs connected with this court's decision in Buckeridge v Walter [2010] WASCA 134.

2 The appellant, who was successful in the appeal, seeks orders that the respondent pay the costs of the appeal and the costs below to be taxed. The respondent opposes orders in those terms. He seeks an order that the appellant pay 90% of the respondent's costs and the respondent pay 10% of the appellant's costs of both the appeal and the proceedings below. His fall back position is that the appellant pay four-fifths of the respondent's costs and the respondent pay one-fifth of the appellant's costs of both the appeal and the decision below.

3 The appeal was from orders made by Le Miere J striking out the appellant's Polly Peck defence in a defamation action. The primary judge struck out seven imputations. The appeal was limited to five imputations being those pleaded in [10A.1], [10A.2], [10A.3], [4B.2] and [4B.3]. The imputations in [4B.2] and [10A.2] were in the same terms, as were the imputations in [4B.3] and [10A.3]. Thus, there were three Polly Peck imputations in issue in the appeal. Moreover, it was possible to deal with the challenges to the imputations in [4B.2], [4B.3], [10A.2] and [10A.3] together because they were not materially different for analytical purposes.

4 The general rule is that the successful party will recover his costs (Rules of the Supreme Court 1971 (WA), O 66 r 1(1)). However, where a party though generally successful in an action has, by the introduction of some issue or issues on which he has failed, increased the costs, the court may order such party to pay the costs of such issue or issues (O 66 r 1(3)). The exercise of the power in O 66 r 1(3) should be approached broadly, and as a matter of impression, and without an attempt at mathematical precision which is likely to prove elusory: Amaca Pty Ltd v Moss [2007] WASCA 162(S) [6].

5 The legal issues and principles relevant to the disposition of the appeal relating to all the imputations largely overlapped. Further, most attention in both the written submissions and at the hearing was directed at [10A.1] which was the subject of three of the five grounds of appeal and on which the appellant succeeded. Although the appellant challenged the correctness of David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; (2000) 1 VR 667 and West Australian Newspapers Ltd v Elliott [2008] WASCA 172, that was done to preserve his position and little time was devoted to it in submissions (or in the reasons for judgment).

6 I am satisfied that the appellant should have the costs of the appeal, reduced to 75% because of the time devoted solely to matters on which he failed.

7 I turn to the costs below. I would not interfere with the order made by the primary judge that the appellant pay the respondent's costs of and incidental to the application before him to be taxed. Six of the seven imputations struck out by the primary judge were either not challenged or unsuccessfully challenged. Following the appeal, it remained the case that the respondent was largely successful below. It is also relevant that the application which came before the primary judge was something of a moving feast, with the appellant amending his proposed defence from time to time. However, I am not persuaded that prior successful applications made by the respondent to earlier versions of a Polly Peck defence is a relevant matter. No doubt appropriate costs orders were made in relation to the prior applications, both at first instance and on appeal.

8 The respondent also seeks an indemnity certificate under s 10(a) of the Suitors' Fund Act 1964 (WA). This court has a discretion to grant an indemnity certificate where an appeal on a question of law succeeds. The discretion is to grant rather than refuse an indemnity certificate. Accordingly, the unsuccessful respondent must show some ground calling for the exercise of the discretion in his favour: Jones v Dalcon Construction Pty Ltd [2006] WASCA 205(S) [4].

9 It may be accepted that the primary judge made an error of law. The primary issues on which this court differed from the primary judge was the scope of the imputation pleaded in [10A] and whether it was capable of arising from the words complained of. Those differences had relatively straightforward consequences in relation to grounds of appeal 2 and 3. Thus this is not a case involving a doubt about the law which should be applied but rather one which involved the application of well-understood legal principles to a particular imputation. Moreover, multiple interlocutory pleading skirmishes are the unfortunate by-product of defamation proceedings because they are often perceived to be of strategic importance. In all the circumstances, I would decline to grant to the respondent an indemnity certificate.