Gould v TCN Channel 9 & Ors

THE SUPREME COURT Extempore Revised OF NEW SOUTH WALES COMMON LAW DIVISION

20372/99 - STEVEN GEORGE GOULD v TCN CHANNEL NINE & ORS

JUDGMENT 1 HIS HONOUR: On 6 August 1999 Steven George Gould commenced an action by statement of claim against three defendants. The first defendant was TCN Channel Nine Pty Limited; the second, Jessica Block, who is described as corporate counsel of Channel Nine; and the third defendant, Emma Alberici, described as a journalist and producer of "A Current Affair", being a programme screened on Channel 9. 2 The statement of claim alleged, in paragraph 1, that the plaintiff was the managing partner of Halisa-NSW Partnership, which was described as a limited partnership registered under the Partnership (Limited Partnership) Amendment Act 1991. The statement of claim also recited that Halisa was itself involved in a business venture known as OICY2K Resource Asset Management Program (OICY2KRAMP), along with five other partners. 3 The pleading alleged that the television company was preparing a program on the Y2K issue. In the course of that preparation it dealt with Mr Gould. Certain agreements were reached. It is said that the defendants failed to honour these agreements by awaiting the response of Mr Gould in respect of serious allegations which it intended to include in the proposed program. The statement of claim further recited that a duty of care was owed to Halisa-NSW Partnership, and OICY2KRAMP, for reasons which were then set out. 4 Broadly, the reasons were that if they failed to develop certain management systems, and exercise certain skills, in the case of a lawyer, and honour certain journalistic codes, in the case of the third defendant, then the publication of untruths and misrepresentations would follow, and cause damage. 5 The defendants filed a notice of motion. It sought to have the statement of claim struck out on the ground that it disclosed no reasonable cause of action, and was an abuse of process of this court. 6 The matter came before his Honour Justice Abadee on 22 November 1999. His Honour, after argument, ultimately permitted the plaintiff to replead the cause of action to cure certain defects which were readily apparent. The defects related to the manner in which the statement of claim purported to bring the action on behalf of various partnerships. 7 As a consequence an amended statement of claim was filed on 29 December 1999. The defendants responded to that document with a further notice of motion. It was filed on 17 January 2000. The notice of motion was in similar terms, I believe, to the notice of motion before Abadee J. It is this notice of motion which is before me. It again seeks to have the pleading relied upon by the plaintiff, the amended statement of claim, struck out on the basis that it discloses no reasonable cause of action, and is an abuse of the process of the court. 8 Mr Gould has appeared before me in person. The defendants are represented by Mr Sleight of counsel. On behalf of the defendants, helpful written submissions have been prepared and made available to Mr Gould. The issues raised by the defendants have been debated in court and the matters explained to Mr Gould. There can be no question that Mr Gould harbours a sense of grievance arising out of his dealings with Channel Nine, and its personnel. 9 He described in argument the background to various actions, including the present action. He asserts that by reason of certain actions on the part of employees at Channel Nine he was deceived. The deceit took place in a period between 9 December 1997 and 12 December of that year, he having been apprised of certain allegations which would be made against him by Channel Nine. 10 He sought to answer those allegations by furnishing a response. He did so, according to his submission, within the time limited by counsel for Channel Nine when it solicited that response. That notwithstanding, and notwithstanding an assurance which he says he received that the particular program would not go to air before 22 December, it went to air on Monday, 15 December 1997. As a consequence he claims to have been defamed. More than that, he claims that various partnerships with which he was associated were damaged, and suffered loss. That loss, as I understand his argument, arose through opportunities being thereafter denied him by parties who had become aware of what was being said about him. In these circumstances he has commenced three actions. The first is an action for defamation. That action is still on foot. It is under management in the Defamation List. The second was an action which he commenced by statement of claim initially against Ms Alberici and Ms Annemarie Kitchin. That action has had a chequered history. It came before Master Harrison. It was struck out as not conforming to the rules. 11 Master Harrison's judgment was confirmed on appeal. The action was then repleaded. Again it was struck out by Master Harrison. 12 On appeal, Sperling J set aside Master Harrison's order, and did so on the basis that the pleading had been dealt with by Master Harrison as though it were a claim purely on behalf of certain partnerships, namely the same partnership as involved in the action before me, Halisa-NSW Partnership, and another partnership, OIC EAIM Project Team (OIC). Sperling J determined that the statement of claim was also an action brought by Mr Gould on his own behalf. 13 His Honour, in the course of his judgment, canvassed various possible causes of action arising from the interaction between Mr Gould and personnel of Channel Nine. In doing so he said this: "The plaintiff may have a good cause of action for deceit. Notwithstanding that there have been two unsuccessful attempts to plead a cause of action satisfactorily, it seems to me that justice requires the plaintiff be given a further opportunity to do so in the circumstances of this case. Accordingly, the amended statement of claim should be struck out but leave should be given to file a further amended statement of claim limited to a cause of action for deceit." 14 I am told that in the course of argument in respect of the matter before Sperling J, amongst other things, the availability of a cause of action in negligence was canvassed. However that may be, a statement of claim alleging deceit was ultimately filed. It was transferred to the District Court. I gather that for various reasons which are now under appeal, it was struck out. It was struck out not on the merits, as I understand it, but, rather, through some failure on the part of Mr Gould's solicitor, or Mr Gould himself, to appear. That brings me to the third cause of action which is the one with which I am concerned. 15 The amended statement of claim in the third action identifies six plaintiffs. They are Steven George Gould, first plaintiff; Halisa-NSW Partnership, second plaintiff; Halisa International, third plaintiff; EAIM Project Partners, fourth plaintiff; OICY2KRAMP Project Partners, fifth plaintiff; Open Interchange Consortium, sixth plaintiff. 16 The defendants, in support of the notice of motion, identify three problems. First, there is an issue of capacity. It is said that the statement of claim is defective in the way in which it has pleaded the partnerships. Indeed, it is said that the defect is precisely the same as that identified in the notice of motion in respect of the original statement of claim, which defect Abadee J gave leave to remedy. It is said that it has not been remedied. 17 The second complaint is that the statement of claim relies upon a cause of action described as "management negligence". Mr Gould recognises that there is no such term, but insists that it is the appropriate term to describe the actions of those named as defendants. Assuming the cause of action is in negligence, the defendants assert that in the circumstances identified by Mr Gould there is no such cause of action. Consequently, even if one were minded to give leave to Mr Gould to remedy deficiencies in respect of the first matter, that is the identification of the plaintiffs, such leave would be futile since there is no cause of action. 18 The third complaint is that the statement of claim, even were a cause of action in negligence available, does not conform to the rules, in that it does not identify the material facts. It includes a deal of irrelevant material, some of it evidence, and in other respects does not meet the requirements of Pt 15 of the Rules. 19 Dealing with these various complaints, it seems to me the first assertion by the defendant in support of the notice of motion is right. Each of the paragraphs (A) to (I) purports to commence an action on behalf of the named partnership, but does not do so in conformity with Pt8 r3. That rule requires that in any proceedings where the plaintiff claims relief to which any other person is entitled jointly with him, then all persons so entitled shall be parties to the action, and any of them who do not consent to being joined as a plaintiff shall be made a defendant. The Rule is mandatory. 20 The amended statement of claim asserts that the various plaintiffs, they being partnerships, apart from Mr Gould, suffered loss as a result of negligence, which is then identified, and in some cases quantified in the particulars which accompany the statement of claim. 21 In order to conform with the rules the individual plaintiff's, who are members of that partnership, would need to be named as either plaintiffs or defendants. Under the Partnership Act 1892, s20, partnership property includes any right of action which the partnership may have. The nature of that interest is an equitable interest in the nature of a chose in action (Commissioner of Taxation v Everitt (1980) 143 CLR 440 at 446-447). Accordingly, any individual partner cannot attempt to recover partnership property from a third party in his own right. 22 Mr Gould tells me that some at least of the partnerships only involve himself and one other person. That person has indicated he is prepared to consent to the commencement of an action. The issue arises therefore in respect of at least those partnerships where Mr Gould may be in a position to proceed, whether he should be allowed further time to further amend the statement of claim to conform with Pt8 r3. That issue may be deferred for the moment because if the second complaint of the defendants is correct, namely that there is no cause of action in negligence, then to permit the plaintiff to amend would be futile. 23 Dealing therefore with the second complaint, my attention has been drawn to the decision of Sattin v Nationwide News Pty Limited (1996) 39 NSWLR 32, where Levine J considered whether an action in negligence, independently of defamation, arising through the publication of material said to be damaging, could be sustained. His Honour referred at some length to the decision in Bell-Booth Group Limited v Attorney-General (1989) 3 NZLR 148 where Cooke P said this: (at 155) "Negligence in words can certainly give rise to liability if there is a duty of care. One need only mention Hedley Byrne . Breach of confidence is actionable, subject to special defences, however the duty of confidence arises ( Attorney- General v Wellington Newspapers Limited [1988] 1 NZLR 129, 172). A contract may impose restraints on freedom of speech, subject no doubt to public policy defences. In some cases damages for breach of contract can extend to loss of publicity or positive harm to reputation: See generally McGregor on Damages (15th Ed, 1988) par 54. But cases in the foregoing categories are all readily distinguishable. As far at least as the law of torts is concerned, the common understanding is almost certainly as expressed by Hallett in Foaminol Laboratories Limited v British Artid Plastics Limited [1941] 2 All ER 393, 399: `a claim for mere loss of reputation is the proper subject of an action for defamation, and cannot ordinarily be sustained by means of any other form of action'." 24 Cooke P added the following: (at 36): "The important point for present purposes is that the law as to injury to reputation and freedom of speech is a field of its own. To impose the law of negligence upon it by accepting that there may be common law duties of care not to publish the truth would be to introduce a distorting element." 25 His judgment concluded with these words: (at 36) "The duty in defamation may be described as a duty not to defame without justification or privilege or otherwise than by way of fair comment. The duty in injurious falsehood may be defined as a duty not to disparage goods untruthfully and maliciously. In substance the appellant would add to these duties a duty in such a case as this to take care not to injure the plaintiff's reputation by true statements. All the arguments for the appellant, though put skilfully in various ways by counsel, reduce to that proposition. In our opinion, to accept it would be to introduce negligence law into a field for which it was not designed and is not appropriate." 26 Levine J adopted these remarks, adding the following comments: (at 44/45): "The falsity was damaging to the plaintiff's reputation (at least, for present purposes) and thereby gives rise to a cause of action in defamation. I have not been persuaded that the remedy the plaintiff seeks lies elsewhere. I am satisfied that as a matter of principle the proposed amendment to plead the cause of action in negligence cannot be allowed. I would add conformably with what their Honours in New Zealand's Court of Appeal and his lordship Lord Keith of Kinkel have remarked upon, that the law of negligence really has a limited role to play in the matter of communications, it fundamentally being confined to the Hedley Byrne situation ( Hedley Byrne & Co v Heller & Partners [1964] AC 465) or perhaps others in which freedom of speech is not a legitimate consideration. In media situations the lawfulness or otherwise of communication to the public depends on the operation of the laws and rules of defamation: this is not to say that a communication cannot amount to a breach of confidence for example or indeed a breach of contract but damages for publication in circumstances of the case with which I am concerned in my view have always been governed by the law of defamation which is the field in which the remedies have been sown and harvested. As Brennan J cautioned in Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 481: ' ... It is preferable, in my view, that the law should develop novel categories of negligence incrementally and by analogy with established categories, rather than by massive extension of a prima facie duty of care .... '" 27 It seems to me, therefore, that the second complaint of the defendants has substance. An amendment relying upon negligence, in circumstances where the damage is said to arise through the publication of material, would be futile. It is material which can be relied upon by Mr Gould in the action for defamation which he is pursuing. 28 Dealing finally, and perhaps unnecessarily, with the third complaint, it does appear that the amended statement of claim does not conform in a number of respects with the requirements of Pt15. However, I need not enlarge upon this aspect in view of the findings I have made on the earlier issues. 29 For all these reasons it appears to me that the amended statement of claim filed on 29 December 1999 should be struck out as disclosing no reasonable cause of action. 30 During the course of delivering this judgment Mr Gould excused himself on the basis that he needed to take medication. He has not returned, although his briefcase and papers remain in court. I will therefore not deal with the issue of costs. 31 The orders of the Court will be:

1. That the Amended Statement of Claim filed on 29 December 1999 be struck out and the action dismissed.

3. Stood over for mention on 3 August 2000 at 9.00 am. **********

Last Modified: 09/26/2000 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.