DIX GARDNER PTY LTD & ANOR v STRATHFIELD MUNICIPAL COUNCIL & ORS

v PARTIES : STRATHFIELD MUNICIPAL COUNCIL (First defendant)

VIRGINIA JUDGE (Second defendant)

CHANNEL SEVEN PTY LTD (Third defendant) FILE NUMBER(S) : SC 20587 OF 2002 C Evatt (Plaintiffs)

COUNSEL : T Blackburn (First and second defendants)

K Smark (Third defendant) Lovegrove Solicitors (Plaintiffs)

SOLICITORS : Phillips Fox (First and second defendants)

Mallesons Stephen Jacques (Third defendant)

[2003] NSWSC 597 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST

STRATHFIELD MUNICIPAL COUNCIL (First defendant)

JUDGMENT (Defamation - imputations - capacity - form - difference in substance - identification and republication - particulars) 1 The plaintiffs have instituted proceedings against the several defendants in relation to a media release, the terms of which are appended hereto, and a segment of a "Today Tonight" program telecast on 27 August 2002. 2 As a result of the exchange of SCR Pr 67 r 12 A notices the plaintiffs have prepared a further amended statement of claim to which argument was directed. 3 In relation to the first matter complained of (the media release) the plaintiffs propose to plead the following imputations: 6(a) The first Plaintiff is a shonky building certifier (lines 2-3). (b) The first Plaintiff was so negligent in the issue of construction and occupation certificates for a building which did not meet specific conditions imposed by the first Defendant to deal with stormwater issues that legal proceedings have been initiated against it by the first Defendant (lines 5-8). (b)(i) The first Plaintiff was so negligent in the issue of construction and occupation certificates for a building which did not meet specific conditions imposed by the first Defendant to deal with stormwater issues that serious problems could be caused for residents who live around the site (lines 5-10, 19-22). (c) The first Plaintiff has caused a horrible situation where a building has gone ahead and been constructed on the basis of inappropriate certification (lines 19-22). (d) The first Plaintiff negligently made wrong decisions the consequences of which could be devastating both financially and personally for the families involved (lines 30-36). (e) The first Plaintiff acted dishonestly in and about issuing a construction certificate and an occupation certificate on 7 August 2001 and 18 March 2002 respectively (lines 2-3, 5-8, 11-22 and 30-36). (f) That by dishonestly certifying that a building met conditions imposed by the Council the first Plaintiff could cause serious problems for residents who live around the site and devastating consequences for the families involved (lines 2-3, 5-8, 11-22, 30-36). (g) The first Plaintiff acted unlawfully in and about the issuing of a construction certificate and an occupation certificate on 7 August 2001 and 18 March 2002 respectively (lines 2-3, 5-8, 11-22 and 30-36). (h) The first Plaintiff falsely represented that it is an expert building certifier (lines 2-3, 5-8, 11-22, 30-36). (i) The second Plaintiff is a shonky building certifier (lines 2-3). (j) The second Plaintiff was so negligent in the issue of construction and occupation certificates for a building which did not meet specific conditions imposed by the second Defendant to deal with stormwater issues that legal proceedings have been initiated against him by the second Defendant (lines 5-8). (j)(i) The second Plaintiff was so negligent in the issue of construction and occupation certificates for a building which did not meet specific conditions imposed by the second Defendant to deal with stormwater issues that serious problems could be caused for residents who live around the site (lines 5-10, 19-22). (k) The second Plaintiff has caused a horrible situation where a building has gone ahead and been constructed on the basis of inappropriate certification (lines 19-22). (l) The second Plaintiff negligently made wrong decisions the consequences of which could be devastating both financially and personally for the families involved (lines 30-36). (m) The second Plaintiff acted dishonestly in and about issuing a construction certificate and an occupation certificate on 7 August 2001 and 18 March 2002 respectively (lines 2-3, 5-8, 11-22 and 30-36). (n) That by dishonestly certifying that a building met conditions imposed by the Council the second Plaintiff could cause serious problems for residents who live around the site and devastating consequences for the families involved (lines 2-3, 5-8, 11-22, 30-36). (o) The second Plaintiff acted unlawfully in and about the issuing of a construction certificate and an occupation certificate on 7 August 2001 and 18 March 2002 respectively (lines 2-3, 5-8, 11-22 and 30-36). (p) The second Plaintiff falsely represented that he is an expert building certifier (lines 2-3, 5-8, 11-22, 30-36).

4 In relation to imputation 6(a) "The first Plaintiff is a shonky building certifier" it was contended that the imputation is bad in form. It is a matter of general principle, it was argued, that a slang term like "shonky" ought to be avoided. A slang term such as this has "an elastic and not well defined meaning". It was argued that "shonky" could mean "crooked" or "corrupt"; it could also mean "merely negligent" or "bad" or "poor" and the plaintiff should make clear the act or condition it contends for. In Dwyer v IPC Magazines Ltd (NSWSC, unreported, 2 November 1990) Hunt J said: "…imputations should never use expressions in their slang sense" (page 1). 5 The instant publication bears the headline "Council cracks down on shonky building certifier". The position taken by the defendants is taking questions of form to an unreasonable extreme (see Young & Ors v Munro & Anor, NSWSC, Levine J, unreported 12 May 1995 at pages 11-12); see also Bass v TCN Channel Nine Pty Ltd [2000] NSWSC 270 at para [6] per Dunford J with whose observations there I respectfully agree; see also that litigation in the Court of Appeal [2003] NSWCA 118 at para [6]. Imputation 6(a) will go to the jury. 6 As to the proposed imputations 6(b) and (b)(i), I am not persuaded that they are defective in form in leaving any notion of "negligence" without content. It clearly relates to the issue of the certificate in circumstances where the building did not comply with the Council's conditions. Each deals with negligence so identified and the consequences thereof including the stated institution of legal proceedings and the serious problems for residents. 7 However, imputation (b)(i) does not differ in substance from imputation (d). The plaintiff will have to elect between (b)(i) and (d). 8 As to imputation 6(c), upon reading the matter complained of, upon reading the imputation I have no difficulty as to capacity or form and it shall go to the jury. 9 As to imputation 6(e), I strike it out as bad in form accepting the defendant's submissions as to the want of clarity, in this imputation, as to the term "dishonestly". 10 Imputation 6(f) cures the vice in the preceding imputation 6(e) in my view and it shall go to the jury. 11 I strike out imputation 6(g) by reason of want of precision in the use of the word "unlawfully". 12 As to imputation 6(h), that is capable of being carried by the matter complained of by reference to the use of "expert". Imputation 6(h) will go to the jury. 13 Imputations 6(i) - (p) are concerned with the personal plaintiff. The first matter complained of (the media release) names only the corporate plaintiff. That of course does not preclude the second plaintiff from establishing the requisite matters in support of identification. What the second plaintiff has hitherto failed to do is identify by reference to specific details of persons falling within particular categories: Moore & Brown v Australian Broadcasting Corporation (1985) A Def R 40,061; Lazarus v Deutsche Lufthansa AG (1985) 1 NSWLR 188. 14 By reason of the authority of Baltinos v Foreign Language Publications (1986) 6 NSWLR 85 at 88G, absent proper particularisation of "aiding and abetting", the first and second defendants cannot be made liable for publication by the third defendant, nor can the second plaintiff rely upon publication by the third defendant absent appropriate particulars to establish identification in relation to the publication first sued upon. 15 The plaintiff should provide proper particulars in respect of each issue. 16 I make the same rulings and orders in relation to imputations 6(i)-(p) in relation to the second plaintiff. 17 With respect to the second publication on "Today Tonight", the text of which is appended hereto, the first objection taken by the third defendant is that on viewing the programme no reasonable viewer could understand it to be saying anything defamatory of the corporate plaintiff. This is a question of identification and ultimately will boil down to a question of fact. Whilst it is correct that Mr Dix appears throughout the segment and the remarks he makes are personal to him, there are, to my observation, at least two occasions when the name of the first plaintiff appears on a document. The issue will be for the jury. 18 The imputations pleaded in relation to the second matter complained of are: 8(a) The first Plaintiff caused a building bungle of monumental proportions (lines 1-4, 7-9, 36-41, 44-47, 58-61, 75-77). (b) The first Plaintiff's director and agent (the second Plaintiff) was so incompetent at reading plans a new multi million dollar block of flats is facing demolition (lines 1-4, 7-9, 36-41, 44-47, 58-61, 75-77). (c) The first Plaintiff disobeyed Council's policies and treated them with contempt (lines 1-4, 5-9, 44-47, 58-61, 75-77). (d) The first Plaintiff negligently issued certificates which could result in a six million dollar building being reduced to rubble because it was built illegally (lines 1-4, 7-9, 36-41, 44-47, 58-61, 75-77). (e) The first Plaintiff by negligently issuing construction and occupation certificates allowed units to be sold to unsuspecting families whose financial investment became at risk (lines 1-4, 7-9, 12-22, 36-41, 44-47, 58-61, 75-77). (f) By negligently issuing construction and occupation certificates the first Plaintiff allowed a unit to be sold to Tan Din who could lose the whole of his $370,000 investment (lines 1-4, 7-9, 12-22, 36-41, 44-47, 58-61, 75-77). (g) The first Plaintiff is being taken to Court by the first Defendant because of its negligent approval of the Elva Street site (lines 1-4, 7-9, 12-22, 36-47, 51-61, 75-77). (h) The first Plaintiff deliberately flouted the requirements of the first Defendant by unlawfully certifying the Elva Street development complied with Council codes (lines 5-6, 22-23, 26-27, 33-35, 36-41, 75-77). (i) The first Plaintiff by deliberately acting contrary to the policy of the first Defendant and requirements in certifying the Elva Street development complied with Council codes could cause great harm and loss to many people (lines 5-6, 22-23, 26-27, 33-35, 36-41, 75-77). (j) The first Plaintiff is an incredible bungler (lines 1-4, 7-9, 36-41, 44-47, 58-61, 75-77).

(k) The second Plaintiff caused a building bungle of monumental proportions (lines 1-4, 7-9, 36-41, 44-47, 58-61, 75-77). (l) The Second plaintiff was so incompetent at reading plans a new multi million dollar block of flats is facing demolition (lines 1-4, 7-9, 36-41, 44-47, 58-61, 75-77). (m) The second Plaintiff disobeyed Council's policies and treated them with contempt (lines 1-4, 5-9, 44-47, 58-61, 75-77). (n) The second Plaintiff negligently issued certificates which could result in a six million dollar building being reduced to rubble because it was built illegally (lines 1-4, 7-9, 36-41, 44-47, 58-61, 75-77). (o) The second Plaintiff by negligently issuing construction and occupation certificates allowed units to be sold to unsuspecting families whose financial investment became at risk (lines 1-4, 7-9, 12-22, 36-41, 44-47, 58-61, 75-77). (p) By negligently issuing construction and occupation certificates the second Plaintiff allowed a unit to be sold to Tan Din who could lose the whole of his $370,000 investment (lines 1-4, 7-9, 12-22, 36-41, 44-47, 58-61, 75-77). (q) The second Plaintiff is being taken to Court by the first Defendant because of its negligent approval of the Elva Street site (lines 1-4, 7-9, 12-22, 36-47, 51-61, 75-77). (r) The second Plaintiff deliberately flouted the requirements of the first Defendant by unlawfully certifying the Elva Street development complied with Council codes (lines 5-6, 22-23, 26-27, 33-35, 36-41, 75-77). (s) The second Plaintiff by deliberately acting contrary to the policy of the first Defendant and requirements in certifying the Elva Street development complied with Council codes could cause great harm and loss to many people (lines 5-6, 22-23, 26-27, 33-35, 36-41, 75-77). (t) The second Plaintiff is an incredible bungler (lines 1-4, 7-9, 36-41, 44-47, 58-61, 75-77). 19 As to imputations 8(a) and (j), they clearly do not differ in substance. The first plaintiff will have to elect between them. 20 As to imputation 8(b) of the first plaintiff, it is defective in two ways. As presently framed it is incapable of being defamatory and second, it has a formal defect in not, as was submitted by the defendants, asserting something about itself or its director as to having the required professional qualification that would make its failure (if a corporate plaintiff can fail in this regard) at reading plans meaningful. I strike out imputation 8(b). 21 As to imputation 8(c), it is contended that this imputation does not assert that there was any illegality or breach of moral standard or other moral or legal default or breach of social duty in seeking to disobey what is described as "policy". Nor is the "policy", in its own terms, given any weight of law or moral norm or other attribute which would enable disobedience to that norm to be characterised as defamatory. With respect to Mr Smark, the words encapsulated by imputation 8(c) are clearly capable of being carried by the matter complained of. On a "capacity" basis, as to whether or not that statement, that is, the imputation, viewed in the context of this programme, is capable of being defamatory, the answer must be yes. An argument along the lines advanced by counsel for the third defendant might find some attraction with a jury. 22 Imputation 8(c) will go to the jury. 23 I propose to allow each of imputations 8(d)-(g) to go to the jury. The content of the negligence in each is identified, as are separate consequences. 24 Imputation 8(h) does not differ in substance from imputation 8(c) and the first plaintiff will have to elect. 25 Imputation 8(i) I am persuaded does differ in substance from imputation 8(c) and it shall go to the jury. 26 In relation to the second plaintiff Mr Dix and imputations 8(k)-(t) I make the same rulings, except with respect to imputation 8(c). I strike it out with leave to replead with a stated professional qualification in the second plaintiff. 27 The defendants have failed to achieve their objectives of strangling at birth the plaintiffs' actions in relation to these two publications each of which in general (non-technical) terms can only be described as defamatory. There is an obligation on the plaintiffs to elect between imputations that do not differ in substance and, importantly, properly to particularise, where noted above, its or his case on republication and liability therefor and the issue of identification. 28 Complaint was made that the defendants' original 12A notices were rendered almost otiose by the plaintiffs taking the course of preparing the proposed further amended statement of claim. Whilst in some cases that unfortunate situation might warrant the making of a special order for costs, the end result of this whole application is such as to require no other order than that each party pay its own costs. 29 The orders are:

1. The plaintiffs have leave to file a further amended statement of claim in accordance with the rulings herein within 14 days.
2. Within 14 days thereafter the defendants are to file their respective defences for the purposes of the s7A trial by jury
3. Pursuant to SCR Pt 31 r 2 I order the trial by jury of the issues joined between the parties.
4. I place the matter in the list for call up for trial by jury pursuant to s7A of the Defamation Act 1974.
5. Each party is to pay his, her and its own costs.
6. Exhibit A (the videotape) is to be returned to the plaintiffs.

APPENDIX A Media Release COUNCIL CRACKS DOWN ON SHONKY CERTIFIER 21/8/02 Legal proceedings have been issued between Strathfield Council and a Private Building certifier who issues Construction and Occupation Certificates for a building which did not meet specific conditions imposed by Council to deal with stormwater issues. The subject building is located adjacent to an existing Sydney Water Stormwater Channel on a site which is prone to flooding. When Council approved the Development Application on 17 May 1999 to demolish the Existing building and construct a building containing twelve two bedroom and three one bedroom units it imposed specific conditions to deal with the stormwater issue. Three of these conditions were not met. This has the potential of causing flooding of neighbouring residences. A Construction Certificate and Occupation Certificate were issued by the private certifier, Dix Gardner Pty Ltd on the 7th August 201 and the 18th March 2002 respectively. This Enabled the units to be built contrary to Council consents. "This is a horrible situation where a building has gone ahead and been constructed on the basis of inappropriate certification. This could cause serious problems for residents who live around the site - there are increases in potential stormwater issues for adjoining properties, which alarms me." said the Mayor of Strathfield, Cr Virginia Judge. "A (Parliamentary) Joint Standing Committee has been overlooking the problems with the private certification industry and has recently handed down a report - I welcome the findings of the Joint Select Committee on the Quality of Buildings. One of the 55 recommendations was that Councils be given powers for immediate "stop work" orders. It also recommended that appropriate penalties be introduced where work fails to comply with the relevant development consent or where a relevant consent does not exist". "I support any measures which will achieve positive outcomes for residents. For the majority of people, the purchase of a house is the most significant financial decision they will undertake. When making this decision people have to rely heavily on the guidance of "experts" - when these "experts" make wrong decisions, the consequences can be devastating, both financially and personally for the families involved. I intend to ensure the people of Strathfield are protected from private certifiers who are doing the wrong thing." added the Mayor. APPENDIX B Images

Images of the second Plaintiff, Naomi Robson, the second Defendant, Nicholas Boot, Tan Din and Alan Brawn

While Naomi Robson is speaking at the beginning of the programme (lines 1-4 of the transcript) there is an image of the second Plaintiff with the words "incredible bungle".

There are also images of the second plaintiff approving the certificate which as in large type the words "Dix Gardner Pty Ltd" (the first Plaintiff) on the document. There are also images of the block of flats the subject of the programme and the certificate.

Transcript of Today Tonight programme of 27 August 2002 NAOMI ROBSON - this is a building bungle of monumental proportions. A new multi- million dollar block of flats facing demolition because someone can't read the plans. So now everyone from the local Council to anyone buying those apartments are crying foul. Nicholas Boot has the details… VIRGINIA JUDGE - Why have codes? Why have policies if people are just going to thumb their noses at what Council's policies are? NICHOLAS BOOT - This unit complex is brand spanking new but could be reduced to rubble. That's right - all $6m worth raised to the ground because it's built illegally. VIRGINIA JUDGE - Potentially, the builder may have to reconstruct the building in accordance with the Council's approval. NICHOLAS BOOT - Fifteen (15) units, five (5) sold to unsuspecting families, thankfully no-one's moved in but their massive financial investment is now completely at risk. NICHOLAS BOOT - Are you worried that you have bought into a white elephant? TAN DIN - Yes, I think so, yes umm. NICHOLAS BOOT - You have put a lot of money into it haven't you? TAN DIN - Yes, a lot of money. NICHOLAS BOOT -Tan Din paid $370,000 for his two-bedroom unit. He could lose the lot. TAN DIN - But it still happen. I don't know, we can not believe it. VIRGINIA JUDGE - They are certainly not going to get away with it now that Council is aware of what they have done. NICHOLAS BOOT - Strathfield Mayor, Virginia Judge - Her Council authorised one design but got another. Now a raft of other irregularities has been unearthed. VIRGINIA JUDGE - Yes, even this structure, this garbage facility, um, should not have been allowed. NICHOLAS BOOT - this is what the units look like - everything seems normal but according to Council this is how the development should have been built - pillars on the ground floor supporting the structure. That is because their rules say any building next to a stormwater channel shouldn't adversely affect neighbouring properties in a flood. VIRGINIA JUDGE - basically, according to the plan it should have been piered and this whole area across the front and the side of this building should have been left open. This is contrary to Council's approval. It should not have been built. NICHOLAS BOOT - Water should go through the side and that is not the case and you signed off on it! VIRGINIA JUDGE - Yes, I have signed off on it, and… NICHOLAS BOOT - Lyall Dix is the Private Certifier who approved the Elva Street site. He issued the Construction and Occupation Certificates allowing the units to be sold off to the public. LYALL DIX - The building complies, in my view, because I have inspected it and it complies as far as I can see to the Building Code. NICHOLAS BOOT - So, two different stories at odds with each other. Council insists that the building does not comply but Lyall Dix claims he has followed the law to a tee. A private Engineer certified the design, even the Department of Land and Water Conservation gave the project their approval. NICHOLAS BOOT - But how can Council say something totally different to what you're telling us, it just doesn't add up. ALLAN BRAWN - Well, Council may be wrong. NICHOLAS BOOT - Alan Brawn works for Sezone, the builder of the units. He also maintains they've followed Council's orders but now Council's taking the builders and Lyall Dix to Court. NICHOLAS BOOT - Have you tried to get around what Council, um, ordered? ALLAN BRAWN - Just before we talk about that, yes, I'll come back to that. NICHOLAS BOOT -You have tried to get around what Council ordered! ALLAN BRAWN - Yes, no, no, no, sorry, sorry, no. NICHOLAS BOOT - And here's the Engineer's report, which details the site will affect neighbouring properties after heavy rain. Even Lyall Dix, the Certifier of the development, acknowledges the building is problematic, yet he still approved the design. NICHOLAS BOOT - Is that building an obstruction where it is? LYALL DIX - Oh, it'll, it'll, um, if the stormwater goes above the ground and flows overground, yes, it will be. DAVID LAWRENCE - The regulations are not always followed and that a lot of people do their own thing. NICHOLAS BOOT - David Lawrence from the Archer Centre. He claims that up to a third of homes are built illegally and that this is a result of deregulation of the industry, the introduction of private certifiers. It is a staggering figure with dire repercussions for the building industry. DAVID LAWRENCE - Well it means that the cost of that gets passed onto, the consumer basically. NICHOLAS BOOT - So, who is going to pay in the end for all of this? LYALL DIX - The community always pays in the end. VIRGINIA JUDGE - And I want to make it quite clear that Private certifiers that do the wrong thing, who thumb their noses at Council, I am going to make your lives a misery. If you're going to build in Strathfield, you build according to the rules. NAOMI ROBSON - Nicholas Boot reporting there.

Last Modified: 07/09/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.