HER HONOUR: Dr Edmund Bateman has brought proceedings against a number of parties arising out of the publication of two articles in The Sydney Morning Herald. The fifth defendant to the action is Dr Jeremy Cumpston. Dr Bateman seeks to hold Dr Cumpston liable for the damage allegedly caused to him by the publication of the first article in print and online (the first and second matters complained of).
Causes of action were originally pleaded against Dr Cumpston in both defamation and injurious falsehood. The action in defamation was brought only at the suit of Dr Bateman. The action in injurious falsehood was brought only at the suit of the second plaintiff, Idameneo (No 123) Pty Ltd.
Dr Cumpston moved to have both actions struck out and the proceedings against him dismissed. On 26 May 2015, I struck out the defamation action: Bateman v Fairfax Media Publications Pty Ltd (No 4) [2015] NSWSC 610. I determined at that point to afford Idameneo an opportunity to be heard further as to the claim in injurious falsehood. At [41] of the judgment, I said:
The defendants noted that the claim in injurious falsehood as against the fifth defendant is liable to be struck out in its present form, since it fails to plead the element of special damage. Ms Chrysanthou said that was due to oversight and would be cured. While it is difficult to see how the claim can survive the rulings given in this judgment, I did not think it would be appropriate to make an order dismissing the proceedings (as sought by Dr Cumpston) without first affording the plaintiff an opportunity to be heard on that issue.
The matter noted at the outset of that paragraph is slightly inaccurate. The failure to plead the element of special damage was a feature of the proposed amended statement of claim, so the question was not whether an existing pleading should be struck out on that basis but whether an amendment should be allowed. The existing pleading (the originating claim filed in the Supreme Court of the ACT on 30 November 2010) does plead actual financial loss (at paragraph 19 of the pleading). However, the originating claim suffers from a different problem, which is that it seeks to hold Dr Cumpston liable for representations made by the whole of the first article, which (apart from being written by someone other than him) contains material clearly obtained from other sources.
Bateman v Fairfax Media Publications Pty Ltd [2015] NSWSC 830 | Case summary | Zoe
Following the publication of my decision in Bateman (No 4), the plaintiff propounded a further draft amended statement of claim. That draft seeks to address each of the problems just identified. It addresses the difficulty with the originating claim by seeking to hold Dr Cumpston liable only for his own words and conduct in interviews and conversations with the journalist who wrote the first article (rather than for the whole of the article). It seeks to address the problem with the first version of the draft amended statement of claim by pleading actual financial loss allegedly suffered by Idameneo. Part of the actual financial loss now pleaded substantially replicates the financial loss pleaded in the originating claim (loss allegedly suffered as a result of the publication of the first article) while part is new (the cost to Idameneo, quantified in the sum of approximately $30,000, of hiring a public relations firm to communicate with the journalist in order to protect its reputation and mitigate the damage).
In addition to the new damages claim, the proposed amended statement of claim includes new particulars of Dr Cumpston's alleged malice in publishing the representations attributed to him (referred to in the pleading as "the initial representations").
Accordingly, the determination of Dr Cumpston's application to have the proceedings as against him dismissed (partly determined in my judgment in Bateman (No 4)) turns on the determination of two remaining questions:
1. whether Idameneo should have leave to amend the claim against Dr Cumpston in the terms set out in the proposed amended statement of claim;
2. if not, whether a claim against Dr Cumpston can survive on the strength of the existing pleading (the originating claim).
[2]
Application to amend
The application for leave to file the amended statement of claim raises two issues:
1. whether the proposed amended statement of claim pleads a viable cause of action against Dr Cumpston in injurious falsehood;
2. if so, whether the amendment should be allowed at this stage of the proceedings having regard to the principles stated by the High Court in Aon Risk Services Australia Ltd v ANU [2009] HCA 27; 239 CLR 175.
A claim in injurious falsehood has four elements:
1. a false statement of or concerning the plaintiff's goods or business;
2. publication of that statement by the defendant to a third person;
3. malice on the part of the defendant; and
4. actual damage suffered as a result of the statement.
It may be accepted that a false statement can be published by a combination of words and conduct amounting to a representation as to the plaintiff's goods or business. The difficulty for Idameneo in the present case is similar to that which prompted the dismissal of Dr Bateman's defamation action against Dr Cumpston (considered at [25] to [27] of Bateman (No 4)). At this point Idameneo does not know, and so cannot plead, the precise words or conduct from which the representations relied upon are alleged to arise. The claim now sought to be pursued is founded on inference based on the content of the first article.
That may be viable course in some instances. To take an example debated during argument in the present case, if a newspaper article attributed to a particular person a direct quote, "Wilson's widgets are defective", a clear pleading could be drawn pleading an action against the author of that statement.
In the present case, however, the words and conduct of Dr Cumpston alleged to give rise to the initial representations cannot clearly be discerned from the content of the first article. The pleader was left to assert, in paragraph 15A of the proposed amended statement of claim:
On a date unknown to the plaintiffs but in or about August or September 2010, the fifth defendant published the information and words attributed to him in the first matter complained of the third defendant.
The following particulars are provided:
a. The initial matter complained of was published by the fifth defendant by speaking to the third defendant on more than one occasion in person and over the telephone.
b. The fifth defendant published the information and words set out in lines 8-45, the caption beneath the picture of the fifth defendant, lines 171, 172, 189-196, 202-215 of Schedule A.
c. Further particulars will be provided after discovery and interrogatories.
The problem is that, upon analysis, the lines of the first article identified in particular (b) do not clearly identify the information and words conveyed to the journalist by Dr Cumpston or any context in which they were conveyed. The question whether the representations pleaded in paragraph 15B of the proposed amended statement of claim are capable of being conveyed by words and conduct of Dr Cumpston simply cannot be tested. It will be impossible to test that question without a clearer specification of the conduct alleged. That could only come by a process of granting leave to Idameneo to interrogate Dr Cumpston.
Even if it were appropriate to grant leave to amend against the prospect of what might be revealed upon interrogation (which may be doubted), I do not think that would be a fair approach in the particular circumstances of the present case, for two reasons. One is the lengthy period of time that has passed since the conduct as to which Dr Cumpston would be interrogated. Contrary to the submissions put on behalf of Idameneo, that is not a difficulty that falls at the feet of Dr Cumpston due to any delay in bringing the dismissal application. As noted in Bateman (No 4) at [11] to [13], the difficulties sought to be addressed in the current proposed amendments were drawn to the plaintiffs' attention at an early point in the litigation. The lawyers then representing the plaintiffs ignored the warning conveyed by that correspondence.
The second reason it would not be fair to allow Idameneo to interrogate Dr Cumpston at this stage is the short period of time between now and the trial, which was expedited earlier this year on the application of Dr Bateman. Contrary to Ms Chrysanthou's submissions, I am satisfied that if Dr Cumpston were required to meet the amended claim at this stage, there would be a great deal for him to do in order to prepare for the hearing, including the investigation of substantial issues raised only recently.
Accordingly, I do not think it would be in accordance with the dictates of justice to grant leave to amend at this stage.
[3]
Strike-out application
When argument was heard on this issue, I had understood it to be accepted that, if the amendment were not allowed, Idameneo would not seek to pursue the case pleaded in the originating claim (see T2.27). At a later point in the argument (T30-33), Ms Chrysanthou clarified that she had no instructions to abandon the originating claim. In my view, that claim is untenable, for substantially the reasons explained in respect of the defamation action in Bateman (No 4). Although the authorities referable to the defamation action do not govern the claim in injurious falsehood, I do not see how the publication of the first article can be sensibly attributed to Dr Cumpston as conduct of his giving rise to the representations pleaded.
For those reasons, I am of the view that the proceedings against Dr Cumpston should be dismissed.
The orders are:
1. That leave to file the proposed amended statement of claim be refused;
2. That the originating claim as against Dr Cumpston be struck out;
3. That the proceedings against Dr Cumpston be dismissed with costs.
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Decision last updated: 07 July 2015