Cornish v Langenbach

LEGISLATION CITED: Defamation Act 2005 (NSW), ss 30 and 33

Ford v Nagle [2004] NSWCA 33 Gross v Weston [2007] NSWCA 1 CASES CITED: Gutnick v Dow-Jones & Co Inc [2001] VSC 305 John Pfeiffer Pty Ltd v Rogerson (2003) 203 CLR 503 Papaconstuntinos v Holmes a Court (Supreme Court of NSW, Nicholas J, 13 November 2007, unreported) Waterhouse v Mirror Newspapers Ltd (1985) 1 NSWLR 81

PARTIES: Plaintiff: Warren Leonard Cornish Defendant: Michael Helmut Langenbach

COUNSEL: Plaintiff: R Rasmussen Defendant: S Chrysanthou

SOLICITORS: Plaintiff: Maxwell & Co Defendant: Blundell Madigan Lawyers

1. This is a judgment prepared from written submissions provided by the parties, who have today advised by email that no oral submissions will be made.

2. The plaintiff seeks damages for defamation for statements alleged to have been made by the defendant in the course of a telephone conversation with a Mr Freese in Hawaii on or about 11 January 2007. The statement of claim filed by the plaintiff contains the following text as the matter complained of: "Mike is a drug user and is being manipulated through money and now drugs. Warren Cornish is a major drug dealer in this area. It's not just the soft stuff, the white stuff, if you know what I mean."
3. According to the plaintiff's written submissions, the version of the publication in the statement of claim will be expanded by service of a statement of Mr Freese which attaches a transcript of the telephone conversation including the following: "Freese: It still seems weird, why would Mike want to steal one machine? I thought you said he has a good business and owns multiple properties.

Langenbach: Yes Jimmy, but that's where the drugs come in.

Freese: The drugs? You think Mike has a drug problem?

Langenbach: As I've suspected, Mike is a spy for Cornish. Cornish is working to bring us down and so is Mike.

Freese: I still don't see the motivation for Mike to do what he's doing.

Langenbach: You never know how people act when the drugs come into play. Mike and Cornish have a connection here. Either Mike is being paid with money or with something else.

Freese: Shit. Sounds fucking shady. Cornish is involved in that shit?

Langenbach: Yes Jimmy, Warren Cornish is a major drug dealer in this area…and not just the soft stuff, the white stuff, if you know what I mean.

Langenbach: Yes, Jimmy. When the drugs come into play, you never know how someone is going to act, personality changes, the things start to make sense. Jim T, the same thing. Look Jimmy, Mike and Cornish are a team, paid by Cornish to hold us back. This is the reason for all the mess ups for the machinese that have been installed. I have to go through every part of the machine to make sure everything is correct. There are so many little things that go wrong, and it all gives me the shits. Then there is the connection between Cornish and Gordon Merchant. Gordon Merchant is the second big enemy." 4. The conversation attached to Mr Rasmussen's submissions goes on for some pages. I am setting out the part that appears to me the most relevant. However, the plaintiff must identify with precision whether the matter complained of is the extract set out in the statement of claim or, as Mr Rasmussen asserts, is the whole of the conversation. This is one of a number of matters that should be clarified before the proceedings go further.

The plaintiff pleads that the matter complained of (which is the conversation extract that is attached to the statement of claim, and does not include any other part of the above conversation) gives rise to the following imputations: (a) he is a drug dealer (b) he is a major drug dealer in this area (c) he deals in illegal drugs particularly cocaine.

The plaintiff in his statement of claim claims aggravated damages and exemplary damages. Exemplary damages are not available in Australia; I assume that they may have been claimed because publication of the matter complained of occurred in Hawaii and the law of the place of publication is the relevant law to apply: John Pfeiffer Pty Ltd v Rogerson (2003) 203 CLR 503; Gutnick v Dow-Jones & Co Inc [2001] VSC 305 at [36]. The statement of claim, however, provides no information about why exemplary damages are pleaded.

The claim for aggravated damages particularises the falsity of the imputations, the defendant's malice in publishing when he knew the material to be false and the lack of reasonable basis for making these statements. No objection has been taken to this pleading or to particulars (if any) provided.

The defences pleaded are common law qualified privilege, statutory qualified privilege (s 30) and triviality (s 33). No defences under the law of defamation applicable in Hawaii are pleaded. Counsel for the plaintiff has complained in his written submissions about the inadequacy of the particulars for the s 30 defence but there is no application before me on this issue.

The Reply in these proceedings pleads the following particulars of malice: (a) the falsity of each of the imputations conveyed by the matter complained of to the knowledge of the defendant (b) the defendant's lack of an honest belief in the truth of the imputations conveyed by the matter complained of (c) the defendant's reckless indifference to the truth or falsity of the imputations conveyed by the matter complained of (d) the defendant's lack of a reasonable basis for conveying the imputations or any other imputations to similar effect defamatory of the plaintiff, which imputations he intends to convey (e) the defendant's lack of any information associating the plaintiff with the type of criminal conduct imputed to him (f) the defendant's highhanded and insulting manner when he spoke the defamatory matter in that he used extravagant language to make serious allegations about the plaintiff that he knew to be false (g) the enmity that existed between plaintiff and defendant prior to the publication of the matter complained of (h) the defendant's desire to blame the plaintiff for problems in the relationship between the plaintiff and Mike Rickard who manufactured the surfboard shaping machines for the business conducted by the defendant and James Freese. 10. The only application that is before me today is the application the defendant brings to strike out the Reply. The parties have supplied me with copies of correspondence between solicitors and some brief submissions from Mr Rasmussen and have today by email indicated that they have waived their right to make any oral submissions.

The defendant has, under cover of a letter to the court dated 13 March 2008, supplied me with a bundle of correspondence containing answers to particulars and complaints about the adequacy of those particulars. The plaintiff has supplied written submissions in reply and the defendant's solicitor replied to these submissions on 28 April 2008.

The Reply contains eight particulars of malice, some of which, such as (g) and (h) (which relate to prior hostility and ill will) are clearly relevant to malice, and are not the subject of objection. The plaintiff in his written submissions states that the four particulars to which objection is taken are (b), (c), (d) and (e), on the basis that insufficient particularisation has been given. It is unclear to me from the very generalised complaints of the defendant's solicitors' correspondence if this is correct.

Courts will rarely strike out a pleading so long as the particulars as a whole disclose a reasonably arguable basis for them (Gross v Weston [2007] NSWCA 1 at [30]), even where the case appears to be a weak one (Ford v Nagle [2004] NSWCA 33). Whether there is objection to only four, or to all eight, of the particulars, striking out a Reply is not a step that the Court would undertake other than in an exceptional case.

The defendant has referred me to Papaconstuntinos v Holmes a Court, an unreported decision of Nicholas J of 13 November 2007. Nicholas J struck our three particulars in a Reply which contained unparticularised assertions of publishing the imputations knowing that they were false or with reckless indifference to their falsity, the unfair or extravagant manner of the publication and a desire to discredit the plaintiff personally.

In the present case, the plaintiff has supplied particulars for all of the matters pleaded in the Reply. The last two particulars, which assert prior hostility and ill will, are clearly appropriate particulars of malice. The plaintiff has provided answers to particulars, albeit in a fairly limited fashion, and where objections have been taken (eg to a request to outline the material in the defendant's possession) these objections have been made in the course of attempting to provide such information as the plaintiff has. This was not the case in Papaconstuntinos as there were no particulars at all provided, and where the particulars objected to were different to the particulars objected to here.

The decision upon which Papacontuntinos is based, namely Waterhouse v Mirror Newspapers Ltd (1985) 1 NSWLR 81, makes it clear that the defence of qualified privilege may be defeated by proof of an improper motive or by lack of honest belief (at 82G). The pleader of the Reply has identified these, and the question is one of adequacy of the particulars.

The particulars for the defendant's lack of honest belief already provided include an additional ground in that he had an ulterior motive for making these allegations, namely that he invented a conspiracy between Mike Rickards and the plaintiff to destroy the defendant's business as an excuse for delays in payment from the defendant to Freese. There were problems between the plaintiff and defendant that related to the installation and working of the machine purchased by the plaintiff (plaintiff's written submissions, paragraphs 10 and 11). The plaintiff concedes that this material is new and needs to be particularised. Although the plaintiff's written submissions do not say so, it would appear that reckless indifference and lack of reasonable basis are fallbacks to a claim of actual lack of honest belief.

The particulars provided in correspondence assert that the defendant made these statements either with no information at all (ie he made it up to have an excuse for late payment to Freese) or that his source for making this serious allegation is "public street knowledge" ie gossip or rumour. Having read the whole of the conversation in the course of which these allegations are made, I consider there is a basis for this assertion.

This is quite a complex claim for defamation. In my view, the matter complained of needs amendment to set out what parts of the telephone conversation are relied upon before the matter can be dealt with properly. The defendant can then consider his position concerning defences, and in particular as to any defences in the place of publication.

In the circumstances, I consider it best to leave the issue of the Reply until these problems have been dealt with, and that the Reply should not be struck out. I have dealt with the defendant's objections to the particularisation of the Reply in this very brief fashion, because even if I were satisfied that the particulars were inadequate, I consider it is premature to deal in detail with these issues further in circumstances where the Statement of Claim, Defence and Reply require revision before these proceedings can be made ready for hearing. I am in no way being critical of the parties' legal representatives in this regard; there are issues in these proceedings that are unusual.

I will leave it to the parties' legal representatives to see what matters can be resolved informally and whether other matters need to be listed for argument. I would suggest that this includes, on the part of the plaintiff, a clarification of the extent of the matter complained of and the basis upon which exemplary damages are sought and the addition of the new particularisation referred to in submissions into the Reply. In the case of the defendant, this involves consideration of whether the plaintiff's complaints about the appropriateness of a s 30 defence of qualified privilege is appropriate for a publication to one person and a consideration of whether the defences available in the lex loci delicti should be pleaded. I am not expressing a concluded view on any of these issues; I leave it to the very able counsel retained on both sides to determine what course is best for their clients.

I dismiss the defendant's application, but the defendant may consider bringing a fresh application after any revised pleadings from the plaintiff. I have not been provided with any submissions about costs and will reserve the question of costs. It may be appropriate to defer this until the other issues I have referred to have been considered.

I have placed this matter in the defamation list on Friday 23 May at 9:00 am. If this date is not suitable to the parties they have liberty to apply. Orders

1. Defendant's application to strike out the Plaintiff's Reply dismissed.
2. Costs reserved.
3. Matter placed in Defamation List on 23 May 2008 at 9:00 am for further directions.
4. Liberty to apply re orders 2 and 3.

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