HER HONOUR: These are proceedings for defamation commenced by Mr Peter Hall arising out of an article published by Fairfax Media. This judgment determines objections to the pleadings raised by the defendants at the first listing of the proceedings.
The article was published both in print and on line. The two versions are identical apart from a difference in the headlines, which may have some significance. The printed article was published under the anodyne headline, "Chanticleer: Hunter Hall saga ends", whereas, the Internet article, also published in the Chanticleer column, was headed, "Hunter Hall fight shows how not to run an LIC".
The plaintiff is described in the article as the funder of Hunter Hall Funds Management Group. The article reports upon events that followed his "impetuous" decision to divest himself of a substantial shareholding, so it was reported, almost a quarter of a century after he founded the group.
The plaintiff has pleaded five imputations allegedly arising from the matter complained of. The defendants object to all of the imputations either on the grounds of capacity or form. In accordance with the usual procedure in this list, I have proceeded on the assumption that the capacity objection was brought forward for determination as a separate question in the proceedings.
The first imputation is, "Despite his reputation as an excellent fund manager, the plaintiff conducted the business of Hunter Hall International incompetently". The defendant submits the imputation is incapable of arising from the matter complained of and further objects that the imputation is bad in form in that the word "incompetently" is insufficiently precise. It is appropriate always to determine an objection as to form on the grounds of imprecision before determining an objection on the grounds of capacity.
Ms Amato, who appears for the defendant, submitted the word "incompetently" is simply insufficiently precise to identify the act or condition allegedly attributed to the plaintiff by the article. Mr Polden, who appears for the plaintiff, reminded me of the well-known passage from the judgment of Gleeson CJ in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 137 of the judgment:
If a defendant has posted in a public area a sign that simply says "X is disgusting", the degree of specificity with which it is appropriate to require X to formulate the defamatory imputation will need to be related to the nature and content of the defamatory matter.
As those remarks reveal, the adequacy of the precision of the term "competently" must be determined having regard to the context of the article. It is concerned with the proper management or the fortunes of a listed investment company. In my view, although the word will call for an evaluative judgment on the part of the tribunal that determines any defences which raise the meaning of the term, it is sufficiently precise in the present context. It is in my view not a word which carries the difficulties of the words "corrupt" or "corruptly" considered in Drummoyne. There is enough in the context of the article to lend adequate meaning to it.
As to the objection on the grounds of capacity, Mr Polden reminded me of the recent decision of the Court of Appeal in Corby v Allen & Unwin Pty Ltd [2014] NSWCA 227. The Court of Appeal in that decision reminded judges at first instance that it is appropriate to take a cautious approach. The question of whether an article conveys an imputation is ordinarily a question for a jury and should not be withdrawn from that tribunal of fact unless the imputation is plainly incapable of arising.
The present article raises difficult questions of meaning. The Australian Financial Review targets an audience with specialised knowledge, but the test for the jury will be whether the meaning was conveyed to the ordinary reasonable reader.
Ms Amato identified two difficulties with the imputation for the purpose of the capacity argument. First, the imputation includes the attribution that the plaintiff "Conducted the business of Hunter Hall International". The article refers to the Hunter Hall Group, to Hunter Hall International and to Hunter Hall Global Value. There is some force in Ms Amato's submission to the extent that the article identifies conduct which might be understood to mean that those charged with the governance of one or other entity in the group conducted its business incompetently. The article focusses on Hunter Hall Global Value whereas the imputation focusses on the plaintiff's conduct of the business of Hunter Hall International. Those are distinctions which the ordinary reasonable reader might readily make. Conversely they may be distinctions which the ordinary reasonable reader would overlook. Mr Polden submitted that to the extent that the article focusses on allegedly incompetent conduct, it attributes the difficulties with the business in a vague way that might be understood to infect the group as a whole.
Separately, Ms Amato submitted that the imputation is incapable of suggesting the plaintiff himself did anything in respect of the conduct of the business "incompetently".
Mr Polden identified two parts of the article in particular that point to incompetence. The first is the suggestion at lines 12 to 15 that after the plaintiff divested himself of his shareholding, the fortunes of the company HHI, a reference to Hunter Hall International, improved. Secondly, towards the end of the article the journalist explains a strategy proposed by the incoming majority shareholder for improving likely interest in investment by "boosting the dividend to a level that offers investors an attractive yield". The article concludes with the statement, "For some reason the directors of Hunter Hall Global Value never worked out the importance of having a predictable dividend payout ratio".
Ms Amato submitted the first point, that is the reference to the fortunes of the company improving following Mr Hall's departure, does not come anywhere near conveying incompetence. The second is attributed to "the directors of Hunter Hall Global Value", whereas the ordinary, reasonable reader would have no reason to think that included Mr Hall.
During argument, it was indicated the pleading may be amended in any event to plead that imputation as a true innuendo, since there were lengthy periods of time during which Mr Hall was in fact a director of Hunter Hall Global Value. I think it was suggested he was the chief funds officer of that entity for a period. However, it is necessary to determine the application as brought forward.
Ms Amato noted there is a measure of tension between, on the one hand the suggestion Mr Hall is attributed with having conducted the business of the company or the group incompetently and, on the other, the suggestion that in deciding to divest himself of his shares he had "a brain snap". She submitted with some force that if the decision to dump the shares was being characterised as one which ought not to have been made then the suggestion that the business was being conducted incompetently simply cannot arise.
I accept that there is a measure of tension between those two propositions, but in my view it is a matter for the jury whether the article is saying one or the other or perhaps even both. The matters raised by Ms Amato reveal that the case might be one in which strong arguments can be put to the jury as to defamatory meaning but I do not think the case is one in which I can take the step of taking that meaning from the jury.
The remaining imputations (b) to (e) in various forms attribute the plaintiff with impetuousness or irrationality in his decision to divest himself of his shares in the group. Ms Amato submitted that imputations (b), (c) and (d) do not differ in substance and that imputation (e) has a difficulty in form which, if resolved in the defendant's favour, also has the result that that imputation does not differ in substance from the other three.
Those imputations are in the following form:
1. The plaintiff's decision to sell his very large stake in Hunter Hall International for one dollar per share was irrational.
2. The plaintiff's decision to sell his very large stake in Hunter Hall International for one dollar per share was so impetuous as to demonstrate a total failure to give the matter due consideration.
3. The plaintiff's decision to sell his very large stake in Hunter Hall International for one dollar per share was so impetuous that it cost him a fortune.
4. The plaintiff's decision to sell his very large stake in Hunter Hall International for one dollar per share was so impetuous and irrational as to destroy his reputation as an excellent funds manager.
It is convenient to begin by determining the objection as to imputation (e). Ms Amato submitted that the phrase "as to destroy his reputation as an excellent funds manager" should be struck out as being mere rhetorical flourish. She submitted that there is nothing in the article itself which suggests that as a result of the allegedly impetuous or irrational decision Mr Hall's reputation was destroyed; rather, that conclusion could only be one formed in the mind of the reader, not as part of the meaning of the matter complained of but as his or her response to the attribution complained of.
A similar difficulty was considered in my judgments in Hanson-Young v Bauer Media Limited [2013] NSWSC 1306 and Toben v Mathieson [2013] NSWSC 1530, relied upon by Ms Amato. Neither of those judgments considered quite the issue raised in the present case.
The difficulty of an imputation in the form that the plaintiff was so [adjective] as to have a particular result, or had so conducted himself as to have a particular result, arises if the result identified in the imputation describes the manner in which the audience should respond to the act or condition attributed to the plaintiff.
The difficulty, in my view, is that an imputation in that form becomes self‑referential. It confuses the meaning of the words with their likely or possible impact on the reader. It is akin to pleading an imputation in the form that the plaintiff was so, for example impetuous, that the ordinary reasonable reader should think the less of him. In other words, it identifies the essence of the cause of action of defamation but not the act or condition allegedly attributed to the plaintiff by the matter complained of so as to give rise to that cause of action.
In my view, imputation (e) pleaded by the plaintiff is embarrassing for that reason. The phrase "as to destroy his reputation as an excellent funds manager", should be struck from the imputation. In the result it will be necessary for the plaintiff to have leave to re-plead imputations (b) to (e).
It was further objected that imputations (b), (c) and (d) do not differ in substance. The premise of that submission was that there is no difference in substance between the attribution of being irrational and the attribution of being impetuous. I do not accept that submission. However, during the course of argument, I identified two difficulties I see with the form of the imputations.
There is no difficulty with imputation (b). However, imputation (c) is to my mind illogical in that the phrase "so impetuous as to demonstrate a total failure to give the matter due consideration" really amounts to no more than saying the plaintiff was so impetuous as to be impetuous. Demonstrating a total failure to give a matter due consideration is in my view the meaning of the word impetuous. In my view, the plaintiff should reformulate that imputation.
As to imputation (d), there is a different kind of logical difficulty in my respectful opinion. The imputation attributes the plaintiff's decision with being so impetuous that it cost him a fortune. However, an impetuous decision may not necessarily have an adverse result. A person could survive an impetuous decision with no adverse result and conversely a well-considered decision could cost a person a fortune.
For those reasons it is my conclusion that imputation (b) is sound and may stand; imputations (c) and (d) entail a measure of illogicality and should be reformulated and imputation (e) should be reformulated for the reason I have indicated.
In reformulating the imputations, however, as already indicated, I would hold that an imputation which attributes the plaintiff with being irrational does differ in substance from one which attributes him with having made a decision that was impetuous.
The rulings on that basis are that imputation (a) will go to the jury. Imputations (c), (d) and (e) are struck out with leave to replead.
I make no order as to costs.
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Decision last updated: 04 October 2017