DUNSEC PTY LTD & ORS v NATIONWIDE NEWS PTY LTD

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40786/99

MASON P HEYDON JA

JUDGMENT 1 MASON P: Pursuant to a grant of leave this appeal was heard instanter. The Chief Justice gave a direction that it might be heard by two Judges of Appeal pursuant to s46A(2) of the Supreme Court Act 1970. 2 In November 1992 the appellants sued in the Supreme Court. They claimed damages for defamation arising out of articles published by the respondent in the Penrith Press on 7 July 1992 and the Mt Druitt-St Marys Standard on 15 July 1992. The first article was: HUGE BILL FEARED Costly dispute over security firm looms Penrith ratepayers may foot what union officials believe could be a bill of up to $500,000 because Penrith Council has employed a security firm which has allegedly failed to pay award wages for the past five years. Penrith City Night Patrol, a division of Dunsec Pty Ltd, has been sent a dispute notification to appear before the Industrial Relations Commission next Monday for allegedly failing to pay award wages, penalty rates and allowances, and refusing to surrender time and record books to the Federated Miscellaneous Workers Union of Australia. If the company is unable to pay any amount the commission may award to its employees, Penrith Council is liable to foot the bill under section 154 of the Industrial Relations and Arbitration Act. Union president Geoff Roser said on Thursday that Penrith Council would be prosecuted to pay the liability if the security firm could not meet the cost. "Council has known about the problem for a minimum of three weeks and we will be meeting with them to discuss the allocation of contracts and local government liabilities," Mr Roser said. "I can give an absolute assurance that we will go ahead and prosecute Penrith Council for the back pay if this firm can't pay. "Penrith City Night Patrol has been notified that a conciliation conference is to be held at the Industrial Relations Commission on July 13 in an effort to settle the matter." Penrith Mayor Tony Aquilina said on Thursday he has been aware of the problem only for a short time. "Whenever we became aware that this may be the case we got a statement from the company stating they were paying award wages," he said. "We are very keen to meet with the union and to make sure to uphold the integrity of council in every way." Council general manager Barry Long said on Friday that talks would be held between council and the security company. "All I can say is that we are seeking further information from the company," he said. Penrith City Night Patrol management was contacted but refused to comment.

3 The second article relevantly stated: Residents may foot wage bill PENRITH ratepayers may foot what union officials believe could be a bill of up to $500,000 because Penrith Council has employed a security firm which has allegedly failed to pay award wages for the past five years. Penrith City Night Patrol, a division of Dunsec Pty Ltd, was sent a dispute notification to appear before the Industrial Relations Commission on Monday for allegedly failing to pay award wages, penalty rates and allowances, and refusing to surrender time and record books to the Federated Miscellaneous Workers Union of Australia. If the company is unable to pay any amount the commission may award to its employees, Penrith Council is liable to foot the bill under section 154 of the Industrial Relations and Arbitration Act. Union president Geoff Roser said Penrith Council would be prosecuted to pay the liability if the security firm could not meet the cost. Penrith Mayor Tony Aquilina said he had been aware of the problem only for a short time. "We are very keen to meet with the union and to make sure to uphold the integrity of council in every way."

4 In 1992 the first appellant conducted a business called Penrith City Night Patrol which provided security services for a clientele which included the Penrith City Council. The second and third appellants were directors of the first appellant. 5 In common with most defamation cases, the pleadings underwent successive amendments. In May 1998 the proceedings were transferred to the District Court. There was a callover in March 1999 and the matter was set down for trial on 28 June 1999. At that stage the latest version of the Statement of Claim (filed 22 October 1993) pleaded seven imputations and the latest version of the Defence (filed 14 December 1993) pleaded qualified privilege and unlikelihood of harm. 6 The imputations pleaded on behalf of the first appellant included imputations that it had so conducted itself that it was reasonably suspected by union officials of failing to pay award wages; failing to pay penalty rates and allowances; and refusing to surrender the time and record books. 7 Corresponding imputations were pleaded on behalf of the second and third appellants, save that the imputations were that they had so conducted the affairs of the first appellant as to give rise to the reasonable suspicion by union officials of the same three matters. 8 On 12 May 1999 judgment was given by Judge Christie QC in relation to a number of interlocutory applications. The respondent's applications to have the proceedings struck out for want of prosecution and to requisition a jury were refused. The respondent was however granted leave to amend its Defence to include issues of substantial and contextual truth and other matters of defence. An Amended Defence was filed on 13 May 1999 and particulars of truth were provided by the respondent on 29 May 1999. So far as presently relevant, the Amended Defence pleaded: 13B In further and alternative answer to the whole of the amended statement of claim, to the extent that it is found that the matter complained of conveyed any of the plaintiffs imputations and those imputations were defamatory (which is denied) the defendant says as follows: (a) each of the plaintiffs imputations which is not found to be a matter of substantial truth was published contextually to each other of the plaintiffs imputations;

(b) the plaintiffs imputations were published contextually to the following imputations ("the defendants imputations"):

(i) that the first plaintiff sought to obstruct a trade union in its legitimate investigation of complaints that the first defendant was not paying employees their lawful entitlements;

(ii) that the first plaintiff had insufficient regard for the employment and industrial relations rights and entitlements of its employees;

(iii) that the first plaintiff had so conducted its affairs that it was reasonably suspected by union officials of acting unlawfully;

(iv) that the second and third plaintiffs were knowingly involved in obstructing a trade union in its legitimate investigation of complaints that the first defendant was not paying its employees their lawful entitlement;

(v) that the second and third plaintiffs had insufficient regard for the employment and industrial relation rights and entitlements of the employees of a company with which the second and third plaintiffs were knowingly concerned;

(vi) that the second and third plaintiffs had so conducted the affairs of the first plaintiff that it was reasonably suspected by union officials of acting unlawfully.

9 The matter was not reached on 28 June 1999. At that stage a fresh hearing date was not allocated. 10 On 15 July 1999 the appellants sought the respondent's consent to further amend the Statement of Claim. When consent was refused, the appellants filed a notice of motion which came on for hearing before Judge Christie on 7 and 16 September 1999. His Honour refused the application. Part of the application related to certain imputations said to arise out of the second of the two articles relating to the Independent Commission Against Corruption (ICAC). Another part related to a belated application to claim special damages. These applications were dismissed in circumstances that require no attention in this judgment. (The appellants' application for leave to appeal against those portions of his Honour's judgment was refused on 22 May 2000.) 11 The portion of the judgment with which this appeal is concerned relates to the refusal to permit further amendment of the Statement of Claim so as to plead a number of additional imputations. Those sought to be pleaded on behalf of the first appellant referable to the first article are: 8. The first plaintiff had failed to pay award wages to its employees;

9. The first plaintiff had failed to pay up to $500,000 in award wages to its employees; 10. The first plaintiff by failing to pay up to $500,000 in award wages to its employees over the last five years had thereby exposed Penrith Council to having to foot a huge bill of up to $500,000; 11. The first plaintiff by failing to ensure that its wage payments to its employees were in order had thereby exposed Penrith Council to having to foot a huge bill of up to $500,000; 12. The first plaintiff by not paying its employees award wages had exposed Penrith Council to a costly dispute whereby Penrith Council could have to foot a bill of up to $500,000; 13. The first plaintiff was in extreme financial difficulties in that it faced a huge bill involving up to $500,000 in unpaid wages to its employees.

Corresponding imputations are sought to be pleaded on behalf of the second and third appellants in their position as directors of the first appellant. 12 As regards the second article, imputations identical to 8-11 and 13 are sought to be alleged touching the first appellant, with corresponding allegations touching the second and third appellants. 13 Judge Christie refused leave to amend on the basis that the articles were not capable of conveying imputations that the appellants had in fact failed to pay award wages to their employees, etc. His Honour applied Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293 and distinguished Field v Amalgamated Television Services Pty Ltd Supreme Court of New South Wales, Levine J, unreported, 8 December 1995 and Rigby v John Fairfax Group Pty Ltd Court of Appeal, unreported, 1 February 1996. 14 As I read the judgment of the primary judge, it turns upon the conclusion that the articles are incapable of conveying the imputations now sought to be relied upon. Questions of prejudice were clearly relevant to the decision as it touched the ICAC imputations and the application to include a claim for special damages, but discretionary factors turning upon delay and prejudice do not appear to be the basis of the decision touching the present matter. This said, it is relevant to note that his Honour said at one stage in the judgment: So that the plaintiff now, seven and half years after the publication seeks to raise, after any limitation period has well and truly expired, imputations that raise an entirely different issue, an entirely new issue than that which was contained in the previous seven imputations upon which the plaintiff was prepared to rely in paragraph 7 and the seven imputations upon which the plaintiff was prepared to rely in paragraph 8.

15 The legal principles were not in dispute in this appeal. The Court was referred to Amalgamated Television Services Ltd v Marsden (1998) 43 NSWLR 158 at 164-5 as to the test for determining whether the matter complained of is capable of conveying a particular imputation. It was also common ground that Harrison's Case is authority only for the proposition that "a report which does no more than state that a person has been arrested and has been charged with a criminal offence is incapable of bearing the imputation that he is guilty or probably guilty of that offence" (per Mason J at 300, emphasis added). See also Ross McConnell Kitchen Co Pty Ltd v John Fairfax & Sons Ltd [1980] 2 NSWLR 845 for the application of these principles to reportage of civil proceedings. 16 If defamation proceedings are to be heard and determined by judge alone then there may be circumstances in which a particular application to amend by adding fresh imputations ought to be addressed, not on the basis that the matter complained of is capable of conveying the new imputations, but simply on the basis that it is arguably capable of conveying them. This would leave to the judge at trial the task of determining whether or not the imputations are in fact carried by the matter complained of without having to agonise over the ultimately irrelevant issue whether the matter complained of is capable of carrying those imputations. I am not of course suggesting that every application to amend ought to be approached in this manner. 17 I am however persuaded that this is a case where (to put it no higher than necessary) it is arguable that the matter complained of carries the relevant imputations and where it is appropriate that the matter should be allowed to go forward to trial on that basis. 18 In Rigby, Kirby P pointed out that: The more melodrama and sensation, or prejudicial comment, in a news report, the more ready will the Court be to permit the plaintiff an imputation of guilt. After all, this merely ensures that the tribunal of fact can then decide whether the available imputation is in fact established.

19 In the present case, the articles in their entirely are in my view capable of supporting the new imputations, at least arguably so to the degree justifying leave to amend so as to enable the tribunal of fact (in this case a judge of the District Court) to determine at trial whether the imputations are in fact conveyed. 20 The following matters in combination satisfy me that it was at least arguable that the articles conveyed the relevant imputations: • the graphic headings;

• the information suggestive that ratepayers of Penrith Council may in fact have cause to fear a liability that is contingent upon establishing the guilt in fact of the first appellant; • reference in each article to the Penrith Mayor being "aware of the problem only for a short time" . 21 Having regard to the principles stated in Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 the appellants should, in my view, have been permitted the opportunity to amend, on the usual terms, notwithstanding the prolonged delay in putting forward the alleged imputations. 22 As indicated, this part of the judgment below did not turn upon any finding as to prejudice. Indeed, it is difficult to see any real basis for relevant prejudice given that the respondent itself asserted the substantial truth of the bulk of the new imputations in its own Amended Defence filed on 13 May 1999. It is also relevant that the application to amend was made before the fixing of a fresh date for hearing and at a time when such date would have been several months away in any event. 23 I propose the following orders: 1. Appeal upheld. 2. Set aside the order made by Judge Christie QC on 17 September 1999 that dismissed in its entirety the plaintiff's application for leave to amend their Statement of Claim. 3. Grant leave to amend the Statement of Claim by adding the imputations referred to in par 7(8-13), 8(8-13), 10(8-12) and 12(8-12) of the proposed amended ordinary Statement of Claim in the form annexed to the affidavit of Stephen William Corry sworn 30 July 1999. Otherwise dismiss the application to amend. 4. Appellants to pay the costs of and occasioned by the said amendment. 5. No order as to the costs of the motion in the District Court. 6. Respondent to pay two-thirds of the appellants' costs of the appeal.

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.