DOUGLAS -v- McLERNON [No 3] [2016] WASC 319 (22 June 2016)

Supreme Court of WA|2016-06-22|Before: Martin J

(This judgment was delivered extemporaneously on 22 June 2016 and has been edited from the transcript.)

1 I need to rule on the no case submission that has been put by Ms Fitzgerald in CIV 2306 of 2012, having now heard her in person address over a video link and the response from the plaintiff's counsel, Mr Mukherji.

2 The law in respect of no case to answer submissions in civil trials can be found expounded in the decision of the Full Court of the Victorian Supreme Court in Protean (Holdings) Ltd v American Home Assurance Co [1985] VicRp 18;

3 The jurisprudence relating to publication of defamatory material in an internet context continues to expand. I make mention the following as of some general utility and to which I have had reference in considering the issues presenting here: Sims v Jooste [No 2] [2016] WASCA 83; Von Marburg v Aldred (No 2) [2016] VSC 36; Trkulja v Google Inc [2015] VSC 635; Von Marburg v Aldred [2015] VSC 467; Duffy v Google Inc [2015] SASC 170; Bleyer v Google Inc [2014] NSWSC 897; (2014) 88 NSWLR 670; Murray v Wishart [2014] NZCA 461; [2014] 3 NZLR 722; Tamiz v Google Inc [2013] EWCA Civ 68; [2013] 1 WLR 2151; Rana v Google Australia Pty Ltd [2013] FCA 60; Trkulja v Google Inc LLC (No 5) [2012] VSC 533; Metropolitan International Schools Ltd v Designtechnica Corp [2009] EWHC 1765 (QB); [2011] 1 WLR 1743; Bunt v Tilley [2006] EWHC 407 (QB); [2007] 1 WLR 1243; Dow Jones & Co Inc v Gutnick [2002] HCA 56; (2002) 210 CLR 575 and Godfrey v Demon Internet Ltd [2001] QB 201.

4 I note also what was said as regards publication on the internet by the New Zealand Court of Appeal in Murray v Wishart:

[W]e think it is important to focus on the particular factual situation before the Court. Our analysis of the authorities shows how sensitive the outcome can be to the particular circumstances of the publication. The fact that many of the authorities relate to publication in one form or another on the internet does not provide any form of common theme, because of the different roles taken by the alleged publisher in each case [125].

5 I note that pretrial directions were made for the filing and serving of papers for the judge by the plaintiffs. The trial bundle (TB) included documents that have been adduced as evidence in the course of the trial.

6 I refer back generally and contextually to what has been already said about Mr Douglas' case against Ms Fitzgerald and her brother Laurence Fitzgerald (the Fitzgeralds) on day 1 of the trial from ts 337 345 and then, on day two of the trial between ts 382 383. I also refer to what is found in the plaintiff's written submissions concerning the case of Mr Douglas against the Fitzgeralds. In particular, I note what those written submissions contend at par 36:

The plaintiff will seek to rely upon the following in relation to this element of its claim against Toni and Laurence Fitzgerald: (a) the identification of Redback Studios and Purpose Hosting as the web designers of the relevant websites, (b) admissions by Toni Fitzgerald that she was the CEO of Purpose Marketing, which included Purpose Hosting, and in control of the Purpose business, (c) company searches in relation to Redback Studios, (d) services provided by Redback Studios to its customers, including web design and development, (e) material found on the Redback Studios website and (f) concerns notices sent to Toni Fitzgerald, Laurence Fitzgerald, Purpose Marketing and Redback Studios identifying the matters which are the subject of these proceedings.

7 I also note Ms Fitzgerald's written document dated 20 June 2016 entitled 'Opening Statement of Toni Fitzgerald', setting out, in effect, her no case to answer submission. Ms Fitzgerald acts in person and does not have the assistance of a lawyer. A number of the factual submissions as to facts that she makes as seen in that document are not open or appropriate to accept at this time. At the moment I can and am only proceeding on assumptions of fact most favourable to Mr Douglas, as the plaintiff, since this is a no case to answer submission advanced by Ms Fitzgerald at the close of the plaintiff's case against her as a defendant at trial in this litigation (and her brother, Mr Fitzgerald).

8 If the case progresses beyond the present application against Ms Fitzgerald, I would need to resolve any clashes of factual evidence at that time. For now, I must proceed on assumptions as to the underlying facts that are most favourable to Mr Douglas as plaintiff.

The significance of a concerns notice given to Ms Fitzgerald

9 I must refer at the outset to a 'concerns notice' that was issued to Ms Fitzgerald by Mr Douglas' then lawyers and which has been identified in the trial materials. It is an attachment to the second (reply) affidavit of Oliver George Douglas, which is now exhibit 9. It is within the assembled papers for the court at TB 1008 1020. This is a communication from Get Lawyers Pty Ltd on behalf of the plaintiff to Ms Toni Fitzgerald of (number redacted) Messiter Street, Campsie, New South Wales. The communication states that '(t)his letter is a Concerns Notice for the purposes of s 14 of the Defamation Act 2005 (WA) and the corresponding legislation in each other Australian State and Territory'.

10 In dealing with the subject matter of concerns notices in defamation actions, I note that they are addressed under s 14(2) of the Defamation Act 2005 (WA), which identifies what a concerns notice must contain. The notice is to be something in writing and must inform the 'publisher' of the (alleged) defamatory imputation(s) that the 'aggrieved person' considers are, or may be, carried about the aggrieved person in the 'matter in question' and of various other matters. Section 12(1) states how those terms operate in pt 3 div 1 of the Act. Part 3 deals with the resolution of civil disputes without litigation, while div 1 deals with offers to make amends.

11 As a matter of law, a mere serving of a concerns notice under the statute without more, would not afford, or complete, a cause of action for a defamation plaintiff, as against a defendant recipient of such a notice, where there is not otherwise already in existence a complete cause of action. Such a notice given under s 14(1) effectively issues and proceeds on a basis that some complaining or aggrieved person already holds a completed cause of action in defamation against the party receiving the concerns notice.

12 The concerns notice, once issued, provides an opportunity for a putative defendant to mitigate a potential damages exposure and to respond to the cause of action that is asserted against them by making an offer of amends: Defamation Act, s 13(1). Section 14(1) provides, in effect, that a publisher may make an offer of amends (which, pursuant to s 13(4), is taken to have been made without prejudice, unless the offer provides otherwise), within 28 days from the receipt of a concerns notice, and if a defence has not been served in an action brought by the aggrieved person against the publisher in relation to the matter in question.

13 Implicit in the construction of s 14(1) is the provision of a reasonable period of time for a person in receipt of the concerns notice to respond to the content of that notice. It may be that, after expiry of a reasonable period of time for the person who receives a concerns notice to respond, that an appropriately structured concerns notice could then function, in some circumstances, as some evidence that the recipient has been aware of the existence of the alleged publications from a particular date: see Trkulja v Google (No 5) [31] and Von Marburg v Aldred (No 2) [24] [29]. However, an awareness of the alleged publication(s) would then need to be coupled with some further evidence that the person also possessed the capacity to 'stop' an ongoing publication (eg to take down material off a website) in the relevant time period, in order for it to be possible to draw any adverse inference as towards possible participation in or acquiescence in a publication by another.

14 That is the first observation I render about the legal character of a concerns notice, because here a lot is made by the plaintiff of the alleged nonresponse to concerns notices that were said to be sent to the Fitzgeralds. But such nonresponsiveness is not enough by itself to afford a cause of action in defamation if a cause of action is not already held at the time the concerns notice issues, and subject to what I have also said above about a concerns notice possibly, depending on the content of the notice and the circumstances, indicating an awareness in a recipient of the existence of a publication, after a particular date, and the conjunct question of control over publication.

15 The second observation I make is that the case against Ms Fitzgerald is built significantly, from a pleadings perspective, around a definition of the word, 'Business', seen used in the statement of claim of Mr Douglas in CIV 2306 of 2012, filed 25 November 2013. That is used in a rolledup definition found at par 2(d). Specifically, that subparagraph makes reference to the former second defendant corporation, Redback Studios (see preface to par 2), as the operator of web design and web hosting, which is said to be 'variously called Purpose, Purpose Hosting, the Purpose Group and/or Redback Studios' (together the 'Business').

16 Some allegations specifically concerning Ms Toni Fitzgerald are raised in par 3 of the statement of claim. But they are obscurely formulated by reference to this definition of a 'Business', which is a rolled-up definition. One thing is clear as regards the component of the 'Business' that is asserted by reference to a role of the corporation Redback Studios (the former second defendant company in CIV 2306 of 2012), it does not seem to be contended by Mr Douglas that Ms Fitzgerald ever had anything to do with that corporation. That is the position even on the plaintiff's best case. The alleged activities of that corporation appear to be linked exclusively to the work of her brother, Mr Laurence Fitzgerald, not of Ms Toni Fitzgerald. Mr Fitzgerald is a separately sued defendant in this litigation. I note that the plaintiff's claim against Redback Studios was dismissed on 18 September 2015, on the basis that the company had been deregistered on 14 May 2014.

17 The case put against Ms Fitzgerald is tied effectively to her association with the other named and former defendant corporation. This is the former first defendant, Purpose Marketing Group Pty Ltd. I have to say, with due respect to the pleader of this statement of claim, that the attempts to use and define here, the aggregated term 'Business', in terms of an assertion that Ms Fitzgerald was in 'control' of the operation of the as defined 'Business', is unclear and unhelpful.

18 In a previous interlocutory decision of Le Miere J in the litigation, his Honour rendered a similar observation in respect of the aggregated case pleaded against the nonMcLernon defendants, as then formulated: see Douglas v Purpose Marketing Group Pty Ltd [2013] WASC 125 [8], [10]. I can only but embrace those observations. See also at [3] as to the discontinuance of the action against Purpose Marketing Group Pty Ltd, which occurred not long after the proceedings were commenced in 2012.

19 Essentially, the plaintiff's argument is now further distilled to whether there is a pleading admission by Ms Fitzgerald, who has been a litigant in person since at least 16 May 2014, by par 3(d) of her amended defence of 16 May 2014. That paragraph was responding to the pleaded contention of Mr Douglas under par 3(d) of his statement of claim that Ms Fitzgerald at all material times was in control of the 'Business' (as defined). I set out all of par 3 of Ms Fitzgerald's defence below:

3a Accepted. At various times during the period November 2005 to on or about 1 September 2009, I referred to myself as the Founder/Marketing Manager/CBO/Marketing & New Business Development Manager of Purpose Web, and of Purpose Marketing Group.

I have never had anything to do with Redback Studios.

I have never been the sole director of Toni Fitzgerald and Associates Pty Ltd. In July 2013 I resigned as one of the directors. I have recently assigned my shareholding.

The company has always been the registered owner of the domain name www.purpose.com.au

I am personally listed as the contact name/technical contact for this domain name.

With Laurence Fitzgerald, I shared control of the operation of both Purpose Web and of Purpose Marketing group, long ago deregistered.

I have never had any knowledge, or control of the operation of Redback Studios Australia.

20 As a matter of fairness, I shall read what a self-represented person writes holistically and fairly, although Ms Fitzgerald obviously does have a good command of the English language. She has expressed in her defence document(s) quite coherently what her responsive position is by denying her liability to all of the plaintiffs (across the three matters) for any defamation responsibility for the publications attributed to Mr McLernon, who is the first defendant in CIV 1930 of 2012, CIV 2307 of 2012 and CIV 2308 of 2012.

21 To be fair to Ms Fitzgerald, what she has written in all of pars 3(a), 3(b), 3(c) and 3(d) should be taken together. When I do that, what I assess is the clear assertion as she contends by way of her par 3(a), that at various times during the period of November 2005 up to on or about only 1 September 2009, she referred to herself as the founding/marketing manager/CEO/marketing and new business development manager of Purpose Web and of Purpose Marketing Group. Then she goes on to expressly deny she has had anything to do with Redback Studios.

22 I need to incorporate that early temporal admission context of her defence pleading when I assess what is accepted by her in par 3(d), in terms of what she says as to how, with her brother, she shared control of the operation of Purpose Web and Purpose Marketing Group - now a corporation long deregistered. That, I think, puts a temporal constraint in terms of what she accepted in par 3(d) - up to 1 September 2009. But not beyond that time.

23 The publications complained about by the plaintiff against Mr McLernon all happened well after September 2009.

24 As regards alleged publication, pars 5 and 6 of Mr Douglas' statement of claim contend that:

On various dates from at least 29 September 2011 until 18 September 2012 Redback, Toni Fitzgerald and Laurence Fitzgerald assisted Terrence McLernon to design, upload, and modify the words and images on the McLernon File Website, so that the following matters of and concerning the plaintiff appeared on the McLernon File Websites [sic] in 18 September 2012.

Further or alternatively to paragraph 5 above, from 13 October 2011 until the McLernon File Website was shut down on or around 18 September 2012:

(a) each of the publications was available for viewing and downloading from servers operated or facilitated or controlled by, or accessible through, Redback Studios, Toni Fitzgerald and Laurence Fitzgerald; and/or

(b) Redback Studios, Toni Fitzgerald, Laurence Fitzgerald consented, approved or acquiesced to the publication of each of the publications.

The defendants' consent approval or acquiescence can be inferred from the matters pleaded in paragraphs 2 to 5 above and their knowledge of:

(i) the Concerns Notice dated 13 October 2011 from Stephens Lawyers to www.purposehosting.com and Purpose Hosting;

(ii) the Concerns Notices dates 13 June 2012 from Get Lawyers to each of Purpose Hosting, Laurence Fitzgerald and Toni Fitzgerald; and/or

(iii) the Writ in this matter which was filed on 7 August 2012 and served on 14 August 2012.

25 In relation to the present allegations put against Ms Fitzgerald by the pleading, I am dealing with a particular internet publication scenario involving Redback which is said at par 2(b) of the statement of claim to be the 'web host, web designer, and/or web operator' of the website entitled 'The McLernon File' and Ms Fitzgerald, who are said (along with Mr Fitzgerald) to have assisted Mr McLernon to design, upload and modify the words and images on the 'The McLernon File' website, such that the matters complained of appeared on that website.

26 In Trkulja v Google Inc LLC (No 5) [27], Beach J observed that internet publication cases are highly fact specific, in terms of allegations of associated involvement by defendants. That is clearly the case.

27 I accept for the purposes of today that I should proceed on the basis of the Webb v Bloch [1928] HCA 50; (1928) 41 CLR 331 formulation in terms of persons being made liable for their ancillary involvement in defamatory publications of others.

28 I also must refer to what was said by McColl JA in Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231 [121] (referred to in my reasons in Smith v Marshall [2014] WASC 185 [47(c)]), where her Honour observed that liability as a principal for publication of defamatory material depends upon participation, referring in turn to the text Gatley on Libel & Slander (then in the 11th edition) at [6.16]. Her Honour then observed:

All who are in any degree accessory to the publication of a libel, and by any means whatever conduce to the publication, are to be considered as principals in the act of publication: thus if one suggests illegal matter in order that another may write or print it, and that a third may publish it, all are equally amenable for the act of publication when it has been so effected Webb v Bloch [1928] HCA 50; (1928) 41 CLR 331, 364 per Isaacs J. Such persons are regarded as joint tortfeasors: Webb v Bloch (at 359) per Knox CJ.

29 I also mention Le Miere J's observations in Kenyon v Sabatino [2013] WASC 76 [19].

30 As regards publications found upon internet websites, I would also note here what was recently said by Martin CJ in Sims v Jooste [No 2] [10] [11]:

Sites accessible via the internet are of many kinds. They include sites on which all of the available information is provided by the controller of that site. For example, all the information on the website maintained by the Supreme Court of Western Australia is uploaded to that site by officers of the court. When that information is uploaded to the server, it is published, in the non-legal sense of that word. Publication in the legal sense only occurs if and when somebody uses a browser or other device to access that site and thereby sees, and comprehends, the information which has been uploaded.

...

Other types of sites on the internet include sites to which materials, such as words or pictures, can be uploaded by persons other than the controller of the site. Some of these sites are described as 'blogs' and others as 'chat' sites. As a matter of logic, those sites might operate by permitting anybody to upload any information they wish to the site without intervention by the controller of the site. Alternatively, they might operate on the basis that information or data provided by third parties is only uploaded to the site by the positive act or intervention of the controller of the site. If a site was of the latter kind, the posting of material on the site would, of itself, provide evidence of publication in the legal sense, in the form of the submission of words or data by the originator to the controller or operator of the site whose intervention is necessary for the material to be uploaded. However, if a site is of the former kind, material could be uploaded onto the server without publication in the legal sense occurring. In such a case, publication in the legal sense would only occur if and when a third party accessed the information which had been uploaded to the site. (footnotes omitted)

31 One could possibly extend the taxonomy of websites by including a category for websites that operate as a 'search engine' ie websites that generate results, in the form of links to other websites, in response to a set of search words entered (eg the Google search engine).

32 As such a taxonomy of websites might suggest, the range of services that might be provided to support websites presents as quite large hence references in this matter and in other internet publication cases to (eg) 'web design', 'web hosting', 'content platform operators', 'search engine operators', 'internet service providers', 'internet intermediaries', as well as to services relating to the sale, purchase and registration of internet 'domain names' (see, eg, Domain Names Australia Pty Ltd v .au Domain Administration Ltd [2004] FCAFC 247; (2004) 139 FCR 215).

33 Specifically put as against Ms Fitzgerald, the essence of Mr Douglas' most recently formulated claim is found set out at par 35 of his outline of written submissions, where it is alleged that the Fitzgeralds 'assisted McLernon in uploading text and images to the internet, and assisted in creating the infrastructure which allowed this material to be displayed to the public'.

34 Two points must be made here. First, nothing that has been contended as regards Ms Fitzgerald by way of evidence adduced in this trial to date has suggested to me that she has had anything at all personally to do with the materials that are complained about by Mr Douglas, in terms of what he says has been uploaded by Mr McLernon to the McLernon File website (www.mclernonfile.com), the Black Dogs Barking website (www.blackdogsbarking.com), or the Herd on the Terrace website (www.herdontheterrace.com).

35 Second, without more, the bare fact that someone purchases an internet domain name from a vendor, or pays for a web designer to create for them an internet website, does not on the face of it then make that vendor or web designer liable for the subsequent publications of defamatory material uploaded to that website (or upon websites linked to that domain name) by a purchaser. The analogy is to the seller of a motor vehicle, who could not reasonably be held liable for the driving of the vehicle's purchaser after the purchaser takes possession of the car. The driver must bear that sole responsibility.

36 This case, therefore, against Ms Fitzgerald is confined and unique. I have not been referred to any particular case authority concerning a website and an allegation that somebody who has been involved in a company as a director, in controlling a company that generally sells websites, designs websites or even maintains and services websites, is by virtue of their status as a director alone themselves to be held accountable as a publisher, liable to be sued for defamatory matter later found on the website. I remain to be persuaded of the merit of that submission.

37 In that context, I note the observations of Campbell J in Sun v Hojunara International Group (No 2) [2013] NSWSC 1050 [12] (and see also the related Sun v Hojunara International Group [2013] NSWSC 892 and Wan-Jen Sun v Hojunara International Group Pty Ltd [2013] NSWSC 2044), as to the separate or independent liability of the directors of a defendant corporation for the publication of any defamatory matter. In some contrast to the present proceedings, there had emerged in those NSW proceedings evidence (in effect, an admission), by way of a verified statement in answer to interrogatories, that two directors of the defendant corporation (which had gone into liquidation) were persons responsible for moderating forums on a website in which the alleged defamatory material was said to have been published.

38 In any event, it has become clear over the days of this trial so far, that the essence of the challenge is not so much what was uploaded to the internet by Mr McLernon (as alleged), as regards Ms Fitzgerald. The distilled case against her is essentially tied to her failure to act in the period after her alleged receipt of a concerns notice - that alleged receipt (which Ms Fitzgerald puts in issue factually, by her pleaded defence) being an event which must be accepted factually now, for the purpose of the present no case submission arguments.

39 Mr Douglas' attack upon Ms Fitzgerald is really an argument about an alleged failure by her to act subsequently to 'take down' Mr McLernon's material from these websites.

40 So, for the purpose of the present arguments, I will proceed on the basis that I accept Mr Douglas' evidence that a concerns notice of 13 June 2012, as formulated, was taken by him to the post office, put in the post, and then, that the notice did reach its addressee that is, that the concerns notice reached Ms Fitzgerald, in Campsie, New South Wales via the post.

41 Even assuming all that, however, a dispatch and receipt of a concerns notice to someone does not give, or complete for, a plaintiff a cause of action in defamation. I remain to be persuaded, on the evidence, that it is open to contend that somebody falls within the Webb v Bloch formulation of providing assistance in tort (or the encouraging, counselling or facilitating of the tort) on the basis of involvement, simply because the person does not, as it is here contended, then act to 'pull the plug' on a website, or act to terminate the capacity of someone to use an acquired website, following the receipt of a concerns notice. That is subject to what I have said about the evidentiary potential for an inference to be drawn in a wider setting, towards an ancillary party's acquiescence in a publication being drawn if a reasonable period of time elapses after the receipt of a concerns notice and a person has taken no action to stop a publication, and there is evidence that the person had power to control publication in a relevant sense.

42 But here, as against Ms Fitzgerald, there is no evidence as to her power to control the material that appeared on the McLernon File websites. Here, overall, it presents to me that there is a chronic conceptual deficiency inherent in the case that is sought to be made out against Ms Fitzgerald, in arguing that she ought to have acted in some fashion to stop all access of the internet using community to these websites and is liable because she did not, following her (as assumed) receipt of a statutory concerns notice for the purposes of s 14(2) of the Defamation Act.

43 And then, even if that hurdle could be surmounted, there is another conceptual deficiency that arises. The difficulty is that the actual websiteselling or websiteservicing entities, namely the corporations Redback Studios and Purpose Marketing Pty Ltd, are now companies that are long since deregistered. They no longer exist. Why then are their directors said to be arguably liable for the conduct or omissions of those corporations?

44 I am not persuaded that it is even arguable, here, that somebody who is herself only a corporation's director, or even an executive director or managing director, or even, for the purposes of argument, somebody who is assessed factually as being in control of the company, could incur a personal liability as a tortfeasor in defamation based upon what is alleged against conduct of the corporation itself - at least without more as to the personal involvement of the individual.

45 I would respectfully repeat here what was said by Slade LJ in C Evans & Sons Ltd v Spritebrand Ltd [1985] 1 WLR 317, 329, where his Honour noted (in a context of alleged copyright infringement by a company) that 'a director of a company is not automatically to be identified with his company for the purpose of the law of tort, however small the company may be and however powerful his control over its affairs'. Thus, even though it might be said that, as a matter of general principle, any person who knowingly participates in the communication of defamatory material, in whatever degree, may be held liable for publication, there must be something more than the mere fact that a person was a director of the defendant company.

46 In short compass then, there is here presenting a corporate veil that cannot be pierced, in terms of the attempted attribution of personal director liability which is sought to be made to Ms Fitzgerald.

47 As regards Ms Fitzgerald herself, there is one further barrier to her potential liability, in that her association with the (now deregistered) company Purpose Marketing Group Pty Ltd, former first defendant, seems to me to have been conducted at a removed distance - through another corporate entity, that is, through another corporation, Toni Fitzgerald and Associated Pty Ltd, which is referred to in par 3(b) of her defence.

48 That presents as another layer of corporate entity buffer, in terms of Ms Fitzgerald personally. Here she was one further step removed from the actual company (Purpose Hosting) against whom it is alleged there was a problem, after that corporation received a concerns notice, and then did not take any steps to close down or terminate the particular website of Mr McLernon to inhibit him from posting on that website the matters complained of.

49 For all those reasons, I am satisfied that there is no arguable case to answer here by Ms Fitzgerald and so I would dismiss immediately the action against her.

50 Technically, Ms Fitzgerald is still involved as a defendant in actions CIV 2307 of 2012 and CIV 2308 of 2012. But counsel for those plaintiffs now sensibly advises me that, given my ruling, his instructions are now that all the actions against Ms Fitzgerald will not be pressed.

51 Hence, all actions against Ms Fitzgerald will be dismissed at this point.

At a glance

Court

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Judgment (69 paragraphs)

Cases Cited (4)