Supreme Court of WA|1999-05-04|Before: French J, Steytler J

Interval Resort Networks (Australasia) Pty Ltd & Ors v West Australian Newspapers Ltd [1999] WASC 2 (4 May 1999)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : INTERVAL RESORT NETWORKS (AUSTRALASIA) PTY LTD & ORS -v- WEST AUSTRALIAN NEWSPAPERS LTD [1999] WASC 2

BETWEEN : INTERVAL RESORT NETWORKS (AUSTRALASIA) PTY LTD (ACN 080 831 714)

Defamation - Libel - Application to strike out - Imputations arising from words complained of - Reliance upon series of publications over extended period of time - Whether necessary to plead prior publication as extrinsic facts - Particulars of identification - Whether plea of "true" innuendo

First Plaintiff (First Respondent) : Mr M J Neil QC

Second Plaintiff (Second Respondent) : Mr M J Neil QC

Third Plaintiff (Third Respondent) : Mr M J Neil QC

First Plaintiff (First Respondent) : Margaretic Morton

Second Plaintiff (Second Respondent) : Margaretic Morton

Third Plaintiff (Third Respondent) : Margaretic Morton

Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158

Bride v Stewart, unreported; Federal Court (French J); 18 January 1990

Coe v Commonwealth of Australia [1979] HCA 68; (1979) 24 ALR 118

Costello & Ors v Random House Australia Pty Limited [1999] ACTSC 13

Dalgety Australia Ltd v Rubin, unreported; SCt of WA; Library No 5485; 24 August 1984

Hospitals Contribution Fund of Australia v Hunt (1983) 76 FLR 408

Kimberley Downs Pty Ltd v Western Australia, unreported; SCt of WA; Library No 6414; 25 August 1986

Lloyd v David Syme & Co Ltd (1985) 3 NSWLR 728

Murdoch University v R J Ferguson & Associates (A Firm), unreported; SCt of WA (Acting Master Hawkins); Library No 9201184; 22 May 1992

Niven v Grant (1903) 9 ALR 122

Sea Culture International v Scoles (1991) 32 FLR 275

1**.** STEYTLER J: This is an application to strike out the statement of claim which has been filed by the plaintiffs in defamation proceedings commenced by them against the defendant.

2. The first plaintiff is a company which carries on business in the provision of holiday services and which administers a travel and vacations member club. The second and third plaintiffs are directors of the first plaintiff.

3. The defendant is the publisher of the "West Australian" Newspaper, being the newspaper which has the largest circulation in Western Australia.

4. The newspaper carries a regular column entitled "Inside Cover" which appears on the newspaper's second page.

5. On 3 December 1997 the following article appeared in the "Inside Cover" segment of the newspaper under the heading "Free Trip Sees Them Falling Over":

"How often have you been stopped in the street and asked to fill out a questionnaire about your lifestyle, political leaning, children's education or the money you donate to charity?

Plenty no doubt. While to many worthwhile organisations this is a legitimate way to gather valuable research, we must warn of a group which has recently appeared on Perth streets promising, among other things, a free trip to that great WA holiday destination, Bali.

One Scarborough man was stopped outside Perth railway station and duly filled out the form. Within days he was contacted by a mob calling themselves Lifestyles of Australasia who had the pleasure of telling him he had won a trip to the Indonesian paradise. Come and pick up your ticket, they said happily.

He wasn't alone. On the other side of town, Barbara Marinson, of Attadale, received a telephone call from someone from Lifestyle Magazine who told her she had won a week in Bali and five star accommodation for two. She too had filled out a holiday survey in Murray Street some weeks earlier.

Just like our Scarborough mate, Barbara and husband Ole went to the company's Northbridge office on the sixth floor, 102 James Street, to collect their prize. Did they get their tickets? No way. What they got was the hard sell which involved a mixture of bluster and trickery. Out of the blue, one of the hard-sellers started talking about 'joining fees'. To what? The Lifestyle Club, of course.

It turned out there was no free ticket to Bali, but, hey, if you signed on the dotted line, you could get a discount on the airfare, car hire and hotels.

Sick of the fly-by-nighters this city seems to be attracting of late, we rang the 'club' to find out what was going on. Firstly, we struck a secretary called Linley who told us winners were clearly told over the telephone that airfares were not included in the prize. She then put us on to the company director Julie Higgins who told us that we had rung Interval Resort Networks, which she claimed was a different company from the one the secretary worked for. Soon we were speaking to Manager John Ellis, who represented God knows who.

He said customers were contacted by telephone only, adding that winners were told they were eligible for a 'gift' which just may include accommodation in Bali.

We were then shunted to the company solicitor who gave us a confusing run down about separate companies, same directors and different work practices.

We understand the Ministry of Fair Trading is now investigating this mob. In short, beware."

6. In para 5.2 of the statement of claim the plaintiffs plead that that article, in its natural and ordinary meaning, conveyed the following imputations, all of which were defamatory of the plaintiffs:

"(a) the Plaintiffs conduct a business offering prizes to persons to unconscionably induce them into schemes with no benefit;

(b) the Plaintiffs conduct a business which fraudulently offers prizes including airfares to attract customers and then withholds the prizes only to subject the customer to a surreptitious and underhanded selling campaign of the First Plaintiff's product;

(d) the Plaintiffs are associated with other undesirable elements of the city;

(e) the Plaintiffs had so conducted themselves as to give rise to a suspicion on reasonable grounds that they had committed an offence or offences;

(f) the Plaintiffs make misleading statements to holiday makers intending to go to Bali offering prizes, including airfares, which are not part of the offer;

(g) the First Plaintiff previously conducted its business under the name of Lifestyles of Australasia; and

(h) the Second and Third Plaintiffs, as directors of the First Plaintiff are disreputable and fraudulent persons in that they were responsible for the activities of First Plaintiff."

7. The defendant's first complaint relates to each of these pleaded imputations.

8. So far as that pleaded in sub-para (a) is concerned, counsel for the defendant contends that this does not plead any act or condition which is disparaging of the plaintiffs and that it discloses no "final distillation" of the "sting" of the article. The rule, as it has been applied in this State, is that the plaintiff must plead the defamatory sense of the words, except where the derogatory meaning is so clear that enlargement is obviously unnecessary (see Taylor v Jecks (1993) 10 WAR 309 at 315). Put differently, the plaintiff must plead "the precise act or condition asserted of, or attributed to, him, or with which he is charged" (see Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663 at 678). Sub-paragraph (a) does, I think, lack the requisite precision. It is unclear from its terms whether the unconscionability referred to relates to the offering of prizes, and if so in what respect, or the absence of benefit or to some other aspect of the plaintiffs' business.

9. I should, perhaps, add that the defendant also complains that the imputation is not arguably capable of arising from the newspaper article. It submits that there is nothing in the article which suggests either that the "schemes" referred to have no benefit or that prizes are offered rather than awarded. I am prepared to accept that the words "with no benefit" are incapable of arising from anything said in the article which refers to discounts on airfare, car hire and hotels. Senior counsel for the defendant did not press for the retention of those words. However I do not accept that there is nothing in the article capable of supporting an imputation that prizes are offered. While the article does not use the word "offer" it seems to me to be at least arguable that the ordinary reasonable reader would draw from it that prizes are offered as a possible reward for filling out the form to which the article refers.

10. However I propose to strike out imputation (a) upon the first of the grounds to which I have referred.

11. As to sub-para (b) the defendant complains that this, too, discloses no final distillation of the sting of the article. The use of broad words such as "fraudulently", "surreptitious" and "underhanded" does introduce an element of ambiguity. If the adjective "fraudulently" does no more than categorise the conduct of offering and then withholding prizes it adds nothing to the pleaded imputation. If, on the other hand, it does something more than this then this has not been made clear. Also, the pleading does not say what it is about the selling campaign which is surreptitious and underhanded. If it is no more than the offering and withholding of prizes then this, again, adds nothing to what has already been pleaded. If it is more than this, this has not been made plain and, indeed, the plea might contain, as counsel for the defendants contended, "rolled-up" imputations.

12. I should mention that the defendant complains also that there is nothing in the newspaper article regarding the withholding of prizes or the offering of prizes which include airfares.

13. It seems to me, bearing in mind the well accepted tests for an application of this kind (as to which see General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 and Monte v Mirror Newspapers Ltd, supra, at 675), that it cannot be said that the contention that it is open to a trier of fact to find that the ordinary reasonable reader would have understood the article as suggesting that the prizes offered included airfares to Bali is so clearly untenable that it could not possibly succeed. The article refers to promises of "a free trip to ... Bali" and mentions the picking up of tickets.

14. Similarly, it seems to me that it cannot be said to be clearly untenable to contend that it is at least implicit in the article that the offered prizes are subsequently withheld. So much might arguably be conveyed by the words:

"It turned out there was no free ticket to Bali, but, hey, if you signed on the dotted line, you could get a discount on the airfare, car hire and hotels."

15. These latter discounts might, on one view at least, be thought to be different from the prizes which had been offered.

16. However I propose to strike out this paragraph upon the grounds first mentioned.

17. Counsel for the defendant also contended that imputation (c) does not plead any act or condition which is disparaging of the plaintiffs. It seems to me that it does. The act which is disparaging of the plaintiffs is that it conducts a business which sells a product through a mixture of bluster and trickery. Nothing more is required. The imputation should consequently be allowed to stand.

18. Imputation (d) is said not to arise from the words complained of. Whether an imputation will ultimately be allowed to go before a jury will, of course, depend upon the answer to the question whether the matter complained of, under the circumstances in which it was published, is capable of conveying the pleaded imputation to the ordinary reasonable reader (see Jones v Skelton [1963] 1 WLR 1362 and Smith v Littlemore (1996) 15 WAR 289). That reader is a person of fair average intelligence who does not live in an ivory tower and is not inhibited by strict rules of construction. The reader is one who is not unusually suspicious or naive or avid for scandal (see Slatyer v Daily Telegraph Newspaper Co Ltd [1908] HCA 22; (1908) 6 CLR 1 at 7 and Lewis v Daily Telegraph Ltd [1964] AC 234 at 258-259). The part of the article relied upon as giving rise to imputation (d) is that which refers to the fact that the writer is sick of "the fly-by-nighters this City seems to be attracting of late". I do not consider that that comment, even read in the context of the article as a whole, is arguably capable of giving rise to the imputation pleaded. That being so, it seems to me, imputation (d) should be struck out.

19. Imputation (e) is complained of on the grounds that it is vague and embarrassing primarily because of the absence of particularisation of what "offence or offences" are referred to. I do not consider that it is vague and embarrassing. The concluding words of the article are to the effect that the writer understands that "the Ministry of Fair Trading is now investigating this mob". It might at least arguably be inferred that the investigation is in train as a consequence of suspicion on reasonable grounds that some offence or offences of an as yet unspecified kind had been committed.

20. Imputation (f) is objected to on the ground that it does not plead any act or condition which is disparaging of the plaintiffs and that it is not capable of being defamatory. It seems to me that it is at least arguably defamatory of some-one to suggest that that person makes misleading statements to others offering prizes which are not in truth intended to be given. However, if that is what is intended to be conveyed by sub-para (f) it seems to me, with respect, that it falls short of achieving its objective. The notion of "offering prizes ... which are not part of the offer" is less than precise. There is, moreover, nothing in the article complained of to suggest that the statements there referred to were made to holiday makers "intending to go to Bali". It seems to me that I should, consequently, strike out this imputation.

21. Imputation (g) is said not to be even arguably capable, without more, of being defamatory. I accept that contention. The fact that the first plaintiff previously conducted its business under the name of Lifestyles of Australasia does not, without more, convey anything which is disparaging of the plaintiffs or any of them. That being so this imputation, too, should be struck out. Senior counsel for the plaintiffs did not press the contrary argument.

22. Imputation (h) is said to be incapable of arising from the words complained of. The second plaintiff is nowhere referred to in the article. That being so, it seems to me, the pleaded imputation could only arise, so far as he is concerned, by way of a "true" innuendo in the sense that only persons who knew him to be a director of the first plaintiff might infer that he was responsible for the activities of that company. However there is no plea to that effect either in para 5.2 or in para 5.3 (set out below) which recites the facts and circumstances which led to the plaintiffs being understood to be referred to in the article. Also, while the article does refer to "company director Julie Higgins" it would, I think, be preferable, once again, to plead a true innuendo arising in the case of persons who knew that the third plaintiff was a director of the first plaintiff and perhaps, if this be the fact, that she was known, at least on occasion, as "Julie Higgins". There is, once again, nothing to this effect pleaded in para 5.3.

23. I would consequently strike out para 5.2(h) also.

24. The plaintiffs plead, in para 5.3 of the statement of claim, that:

"The first article referred to and was understood to refer to the Plaintiffs in that:

(a) it identified the First Plaintiff's Northbridge office as 6th Floor, 102 James Street;

(d) it identified the First Plaintiff as Interval Resort Networks."

25. Counsel for the defendant contends that the particulars of identification should be separately provided in relation to each of the first, second and third plaintiffs and that they are in any event deficient in that the plaintiffs have not pleaded the relationship "between the plaintiffs and the organisation referred to as Lifestyles of Australasia", in that the second plaintiff is not named and in that the reference to "Linley" is vague and embarrassing.

26. I was referred, in this respect, to the case of CSBP & Farmers Limited v Western Broadcasting Services Pty Ltd, unreported; SCt of WA; Library No 6593; 10 February 1987. In that case Master Seaman QC referred to the following extract from the judgment of Barwick CJ (with whom McTiernan and Mason JJ agreed) in Turner v Bulletin Newspaper Co Pty Ltd [1974] HCA 25; (1973) 131 CLR 69 at 80:

"In an action for defamation the plaintiff is not required to include his particulars in and as part of his statement of his cause of action. But, where the defamatory words do not identify the plaintiff as their object, extrinsic facts may be used to make that identification. Again, where the plaintiff desires to claim a meaning for the words which of their nature they do not obviously bear, he may rely on facts extrinsic to the publication to show the meaning the words bear in the circumstances. In each instance he must particularise the extrinsic facts. It is for him to decide how he will endeavour to establish the identification and the innuendos ... ".

"Although Barwick CJ, in the passage to which I have referred, speaks separately of identification and innuendos, in Steele v Mirror Newspapers Ltd [1972] 2 NSWLR 348 at p 362 et seq, Hutley JA said that the designation of a person not explicitly named as the person defamed is the laying of an innuendo and that there is no justification in principle or history for distinguishing innuendos as to identity from other innuendos.

In Consolidated Trust Co Ltd v Browne (1948-49) SR (NSW) 86, at p 89, Sir Frederick Jordan said:

'If, however, the matter complained of is not ex facie defamatory, or does not refer by name to the person alleged to be defamed, and the defamatory character which is attributed to the matter, or the identity of the person defamed, would be apparent only to persons who had knowledge of special circumstances, it is necessary, in order to prove publication, to prove that it was published to a person or persons who had knowledge of those circumstances.'

In my opinion, the rule requires particulars of extrinsic facts as to identification, as well as to meaning, to be contained in or delivered with the statement of claim. Those are essential particulars because a cause of action upon a true or legal innuendo is a separate cause of action from that arising from the ordinary and natural meaning of the words complained of: Lewis v Daily Telegraph Ltd [1964] AC 234 at p 279, and also because they affect a range of defences which may be pleaded and the quantum of any damages.

27. Jordan CJ, in Consolidated Trust Co Ltd v Browne (1948-49) SR (NSW) 86 also said (at 91):

"This is not to say that the mere fact that the name is not mentioned makes it essential to call a witness to prove that he identified the complainant by the description. To take an example used in argument, in an action against a widely circulated newspaper for an alleged libel upon a plaintiff contained in an article which described him only as 'the Prime Minister of Australia', it would be unnecessary to call a witness to prove that he had received the issue of the newspaper and knew who the Prime Minister was. In such a case the nature of the description would be such that special knowledge would be unnecessary to identify the person indicated: Jones v E Hulton & Co [1909] 2 KB 444 at 454, 477. But the less revealing the description the greater the danger of omitting proof of identification. It is hardly necessary to add that it would be, to say the least, imprudent for a plaintiff who expected to obtain substantial damages to abstain from proving the scope of the publication and its effect, in accordance with the usual practice in actions of defamation: cf Sunkissed Bananas (Tweed) Ltd v Banana Growers' Federation Co-operative Ltd (1935) 35 SR 526 at 537-539."

28. It seems to me that the first of the factors referred to in para 5.3, that referred to in sub-para (a), does not, without more, advance the plaintiffs' case. There is no plea that any of the readers of the words complained of knew that the first plaintiff occupied the office referred to or that any of them knew that either the second or the third plaintiff worked there. So far as sub-para (b) is concerned there is no plea to the effect that any reader of the offending material would have known that "Linley" worked as a secretary for one or other of the plaintiffs.

29. While sub-para (c) does plead that the article identified the third plaintiff as a director of the first plaintiff it should, I think, more properly have been alleged that readers of the article would have identified the third plaintiff as the "Julie Higgins" referred to in the article even though her full name is Julie Haydn-Higgins, either because she is sometimes known as Julie Higgins or because that name, together with other matters referred to, would have been sufficient to identify her to those readers.

30. I should add that it seems to me that it would have been preferable to make it plain from the particulars of identification which plaintiff is said to have been identified by which particular. While this might be clear from sub-para (c), if it should be more fully pleaded, and particular (d), it is not clear from particulars (a) and (b).

31. I consequently propose to strike out each of paras 5.3(a), (b) and (c).

32. However, so far as sub-para (d) is concerned, it seems to me that this is an appropriate particular of identification if, indeed, it is necessary at all. It is difficult to imagine that a reader who knew of the company Interval Resort Networks (Australasia) Pty Ltd would not infer that the "Interval Resort Networks" referred to in the article was that company. It seems to me that it would be unnecessary to plead anything further. I am consequently not prepared to strike out this paragraph.

33. The plaintiffs go on to plead, in para 6 of the statement of claim, that on 4 December 1997 the defendant published a second article in the "Inside Cover" section of the newspaper. That article read as follows:

After yesterday's yarn on the dodgy business ethics of Lifestyles Australasia, which had a bad habit of promising Perth punters free trips to Bali but never delivering, we decided to do a bit more digging into this mysterious mob.

Heaps of readers rang yesterday with stories about the goings on at 102 James Street, Northbridge, and how they had been invited to the building to collect their prize after filling out a survey on holidays. We discovered on Tuesday that the only thing these 'winners' get is the hard sell to sign up agreements which will give them discounts on accommodation, restaurants and the like.

Also on Tuesday, we were given the runaround and told, somewhat strangely, that Interval Resort Networks, which now runs the business, had absolutely nothing to do with Lifestyles Australasia, now defunct. This is despite IRN having the same address, same phone number, taking over Lifestyles debts and the same solicitors.

But apparently, dear reader, this is just a very big coincidence.

Anyway, we spoke to Luka Margaretic, the principal of Margaretic Barristers & Solicitors. He explained that when Lifestyles went under, the State Manager approached a Singaporean company which was only too willing to become involved.

And service Lifestyles' debts? Apparently so. To cut a long story short, Mr Margaretic told us the former director of Lifestyles was now believed to be back in Britain or in Spain, 'and now undergoing medical attention.' Great. Northbridge's answer to Christopher Skase.

He was adamant that the company was not offering people over the telephone free holidays to Bali. 'That just isn't right,' he said. 'The literature spells it all out very clearly. Anyone that can't understand it must be almost illiterate.'

Wrong. Jennifer Benn, Ken Ryan, Peter Fowler, Gary Segal, John Wright, Margaret McPherson and stacks of others are anything but thick. Their occupations include a university lecturer, an accountant and a small business owner. They were all told they had won a free trip to Bali.

Getting nowhere fast, we got proactive and stomped down to Northbridge. We walked into 102 James Street and entered the lift with two men. 'Who do you want to see?' one of them asked politely. 'We're from Inside Cover. We want to see IRN manager John Ellis. Sixth floor. Make it snappy.'

Like a B-Grade horror movie, it dawned on us that, as the doors slowly closed, we were standing next to Mr Ellis, an angry ant if ever there was one. And didn't he hop into us. Trapped with nowhere to go, we copped both barrels and not even the presence of people coming in and out of the lift stopped him carrying on like a small but extremely irate Vincent Price.

He was adamant that we weren't allowed anywhere near the joint. 'I can tell you who to see. I'll send you to just the right person,' he said firmly and kicked us out at level five - the floor of Margaretic Barristers & Solicitors. Back to square one.

A few minutes later, we tried to crash level six - until another, bigger man escorted us to the lift and made sure we vacated the building. Not to worry. We've been thrown out of better places than 102 James Street."

34. In para 6.2 ten different imputations are pleaded to arise from the second article understood in its natural and ordinary meaning. These are set out in sub-paras (a) - (j) inclusive. The first three imputations pleaded are identical to those pleaded in sub-paras (a), (b) and (c) of para 5.2. The fourth and fifth imputations (pleaded in sub-paras (d) and (e)) are identical to those pleaded in paras 5.2(f) and (g). The last imputation (pleaded in sub-para (j)) is identical to that pleaded in sub-para 5.2(h). Imputations (f) to (i) inclusive are said to be the following:

(f) the only thing that potential customers receive is a deception [sic deceptive] and fictitious sales pitch;

(g) the Plaintiffs refuse to allow the newspaper to enter onto the premises and use their trading premises as a safety retreat to conduct their activities;

(h) the Plaintiffs conduct a disreputable and fraudulent business involved in criminal activities which could be compared to the business practices of Christopher Skase;

(i) the Plaintiffs will try to hide overseas under the guise of a fabricated medical condition in order to avoid any legal sanction of the Western Australian Courts; ... "

35. The defendant objects to each of the imputations pleaded in para 6.2.

36. However before considering these objections I should mention that, in para 6.3, the plaintiffs plead as follows under the heading "Particulars of Imputations Carried by Previous Article":

"The second article carried with it the imputations of the first article, particularly in circumstances where readers of the second article had read the first article, in that:

(a) the second article referred to the first article;

(b) the second article built upon the imputations of the first article and thereby had a cumulative effect being more likely to:

(i) lower the estimation of the Plaintiffs in the minds of right thinking members of the community;

(ii) bring the Plaintiffs into public scandal, odium and contempt; and

(iii) injure the Plaintiffs in respect of their character, credit and reputation."

37. Counsel for the defendant contends that it is impermissible to plead in this way. He submits that the pleading is confusing in that it is unclear what is meant by the notion that the second article "carried with it" the imputations of the first, "particularly in circumstances" in which readers of the second article had read the first. He submitted that it is unclear whether it is intended to plead the first article as an extrinsic fact which was known to readers of the second article or whether something else, and if so what, was intended by the opening words of para 6.3.

38. Counsel for the defendant also contended that sub-para (b) is likewise unclear in its meaning in that it is not apparent what is the purpose of that plea. So, for example, it might be that the plea is intended to suggest that the two articles, read together, had a more defamatory effect than merely one of them read on its own but, if so, the pleading does not explain in what respects this should be so and nor does it make it plain whether or not the first article is, for that purpose, to be read as an extrinsic fact or whether the pleader has some other intention.

39. I was referred, in this respect, to the judgment of Hunt J in Burrows v Knightley (1987) 10 NSWLR 651. That case dealt with the publication of a book entitled An Affair of State: The Profumo Case and the Framing of Stephen Ward. The book was published, inter alia, in Australia. At the same time extracts from the book were published in serial form in The Australian newspaper. There were four separate serials.

40. The plaintiff claimed to have been defamed by the book. He pleaded a number of imputations which were said to have been conveyed by the four parts of the serialisation as a whole. He relied upon the same imputations in respect of the publication of the book itself. However, in one of two actions, the plaintiff also pleaded each of the second, third and fourth parts of the serialisation in separate paragraphs, each with its own set of imputations.

41. Hunt J described the ensuing dispute in the following terms (at 653):

"The defendants seek to have all of these allegations struck out as having been pleaded contrary to principle and (in the second action) as an abuse of process. They argue that principle requires the plaintiff to plead a separate allegation of publication in relation to each of the four parts of the serialisation, together with a statement of the separate imputations which he contends to have been conveyed by that separate part, taken in isolation from the other parts of the serialisation. The jury, the defendants say, will have to be directed to consider whether those separately pleaded imputations were conveyed as the natural and ordinary meaning of the separate part to which they are related, again taken in isolation from the other parts. If the plaintiff wishes to rely upon any material published in one part of the serialisation to give to a statement published in another part a meaning which goes beyond that which it conveys when considered in such isolation, the defendants say that he must plead that extended meaning as a 'true' innuendo, based upon that material as an extrinsic fact."

"The plaintiff simply relies upon commonsense. There should be no difference, he says, between the imputations which were conveyed to the reader of the book and those conveyed to the reader of all four parts of the serialisation of the book. The fact that the serialisation was published to that reader over four days should not make any difference in principle. The reader may well have taken that number of days to read the whole of the book. If publication is the communication to the reader of the imputation which is defamatory of the plaintiff ... then the publication of the various imputations in the book would in those circumstances have taken place over the days during which it was read. Yet it has never been suggested before that the plaintiff was obliged to plead the publication of different sections of a book in different paragraphs, with true innuendos supporting those imputations which depend for their existence upon material which was read on a different day."

42. Hunt J considered that the defendants could, and indeed must, have been understood as having invited the readers of the newspaper to read all four parts of the serialisation. They should, he said, consequently be held responsible for the imputations conveyed by all four parts taken together.

"The ultimate issue to be determined in the present actions is not whether the principles upon which the defendants rely are correctly stated but rather how those principles should be applied in a case where there is apparent, on the face of the matter complained of itself, either an intention on the part of the defendant that it be read together with other material or a direct reference to such other material (to which it is related) so that the reader may reasonably be expected to read it together with the matter complained of.

What little authority there is upon the subject supports the correctness of the plaintiff's pleading in the present actions. Where the matter complained of contained in a newspaper refers to other material in the same newspaper, the plaintiff may be required to render that other material in his case: Thornton v Stephen [1837] EngR 852; (1837) 2 M & Rob 45 at 46; [1837] EngR 852; 174 ER 209 at 209; provided that such other material is capable of affecting the sense of the matter complained of: Darby v Ouseley [1856] EngR 390; (1856) 1 H & N 1 at 11-12; [1856] EngR 390; 156 ER 1093 at 1097; Hedley v Barlow (1865) 4 F & F 224 at 228; [1865] EngR 23; 176 ER 541 at 542; Bolton v O'Brien (1885) 16 LR Ir 97 at 109, 110, 119, 129 (cf 117-118, 121); and see Cooke v Hughes (1824) Ry & M 112 at 115; 171 ER 961 at 962. Where there are two separate publications by the defendant, the plaintiff is entitled to (or may be obliged to) have them considered together in order to determine the sense in which either was understood, provided that they are sufficiently connected and identified with each other: Solomon v Lawson [1846] EngR 595; (1846) 8 QB 823 at 840; [1846] EngR 595; 115 ER 1084 at 1090; Smyth v Mackinnon (1897) 34 SLR 762 at 765, 767; Dauncey v Holloway [1901] 2 KB 441 at 443 (the judgments in the Court of Appeal do not deal with this issue); see also R v Slaney [1832] EngR 452; (1832) 5 C & P 213 at 217-218; [1832] EngR 452; 172 ER 944 at 946.

In none of those cases was it suggested that the plaintiff should have pleaded true innuendoes based upon the material which was published separately. In Solomon v Lawson, the Court of Queen's Bench added the further proviso to the second proposition as I have stated it in the last paragraph, that both publications must be pleaded in the one count of the declaration. That case is directly in point here, and is by itself sufficient basis for upholding the form of the plaintiff's statements of claim.

Where a defendant wishes to have the material in a separate publication considered upon the issue of the sense conveyed by the matter which the plaintiff has pleaded, and where that other material is capable of affecting that sense, he may well be entitled to require the plaintiff to plead that other material: cf Gordon v Amalgamated Television Services Pty Ltd [1980] 2 NSWLR 410 at 414-415. I would not, however, hold that such other material could not be considered upon such an issue unless it had first been pleaded by the plaintiff. A good example of the case in which it would be difficult for the plaintiff to plead the other material which is relevant to the sense in which the matter published by the defendant should be understood was Smyth v Mackinnon, where the sense of the defendant's letter was completely altered by reference to the plaintiff's letter to which it was on its face a reply."

"In my opinion, the law may be stated in this way. Where the matter of which a plaintiff complains consists of related material published by the defendant on different occasions, and where there is apparent, on the face of the matter complained of itself, either an intention on the part of the defendant that it be read together or direct references internally one to the other so that the reader may reasonably be expected to read it together, it is acceptable practice to plead all of the material in the one paragraph of the statement of claim and to identify the imputations said to have been conveyed by the material as a whole. It is not necessary to plead each part separately and to add 'true' innuendoes where material published on one occasion is relied upon to give a statement published on another occasion a meaning beyond that which it conveys when considered in isolation."

44. It seems to me that what has occurred in this case is rather different from the serialisation which was considered in the case of Burrows. Here there was no serialisation. Rather, there were various newspaper articles which were published in the same place in different newspapers over a sustained period of time commencing with the publication of the first article on 3 December 1997 and concluding with that of the ninth and last article on 7 August 1998. It seems to me to be plain that, while there may have been some readers who read all nine articles, it is very probable that there would be many readers who read only some of them or, perhaps, even only one of them.

45. There was here no invitation to anyone to read all of the articles complained of. Indeed, when each was written there was nothing to say that any further article would be written as a follow up. Rather, the author or authors of the articles concerned merely assumed, in some cases, that the newspaper's readers, or some of them, would have read the preceding article or articles or one or more of them.

46. Circumstances of this kind are very different to those considered in Burrows.

47. Similarly, while there are in some cases references, albeit sometimes indirect, to a preceding article or articles those are not the kinds of references from which it might reasonably be assumed that the reader would read the article in question together with its predecessor or predecessors. Any reader coming to the issue for the first time might have no ready means of locating and reading the preceding articles.

48. It seems to me that in a case of this kind the pleader is obliged to undertake the task of identifying which imputations are said to arise from the particular article referred to, read on its own, and, if that be thought desirable, to plead the existence of one or more of the other articles complained of as an extrinsic fact or extrinsic facts which, taken together with the article referred to, gives or give rise to any additional imputations saying, in each case, what those additional imputations are.

49. Paragraph 6.3 does not satisfy these requirements, or at least does not satisfy them with sufficient clarity. It should consequently be struck out.

50. That brings me back to the defendant's objections to each of the imputations pleaded in para 6.2

51. It is unnecessary for me to deal with those paragraphs which merely repeat the imputations which have been pleaded in para 5.2 as I assume (and this is the way in which the matter was argued) that those imputations rely upon the "cumulative effect" of the first and second articles and, having regard for the conclusion at which I have arrived in respect of para 6.3, the pleading can no longer stand in its present form in that respect. However I should say that no argument was addressed to me on the question whether or not any of those imputations is capable of arising from the second article read on its own and I consequently express no opinion on that question.

52. The first of the "new" imputations is that pleaded in sub-para (f). The defendant objects to this plea upon the basis that it is said to be a rolled up plea, that it is vague and embarrassing and that it does not plead the precise act or condition attributed to the plaintiffs.

53. I do not accept that it is a rolled up plea. While it is true that two adjectives are used, being "deceptive" and "fictitious", that in itself does not, in my opinion, require that two separate imputations should be pleaded. Nor do I consider that there is anything sufficiently vague in the pleading to give rise to any embarrassment.

54. Finally, while there is some substance to the contention that no act or condition is attributed to the plaintiffs by this imputation that complaint seems to me to be more a matter of semantics than substance. What is, in my opinion, intended, and sufficiently conveyed, by the plea is that the plaintiffs are persons who provide to their potential customers no more than a deceptive and fictitious sales pitch.

55. I am consequently not prepared to strike out this imputation upon the grounds raised.

56. Next, the defendant complains that imputation (g) is not, on its own, defamatory. It seems to me that that complaint is well made. If there is any defamatory sting it does not sufficiently emerge from the imputation as pleaded. Consequently, sub-para (g) should be struck out.

57. The defendant complains, as regards imputation (h), that this is not arguably capable of arising from the second article. It also complains that the paragraph contains a rolled up plea.

58. It seems to me that para (h) does contain a number of different imputations which should, more appropriately, be separated into different paragraphs. Also, it does not seem to me that there is anything in the article, read on its own, to suggest that the plaintiffs are involved in criminal activities. I would, consequently, strike out this paragraph on these grounds.

59. However I should say that I do not accept the submission, advanced on behalf of the defendant, that the reference to Christopher Skase has nothing to do with any of the plaintiffs.

60. The whole tone of the article is such as to cast scorn upon the suggestion that there is no connection between Lifestyles Australasia and Interval Resort Networks. That might, in my opinion, reasonably be understood to extend to the claimed lack of connection between the "former director of Lifestyles ... now believed to be back in Britain or in Spain ... and ... undergoing medical attention". However it is unnecessary for me to comment further in that respect.

61. As to para 6.2(i) the defendant complains that the imputation is incapable of arising from the words complained of. It says that there is nothing in the newspaper article which could lead any reasonable person even arguably to conclude that the plaintiffs, or any of them, will try to hide overseas for any reason.

62. It seems to me that these submissions are well made. If an imputation of the kind pleaded arises then, in my opinion, it is arguably capable of arising in respect of a former director of Lifestyles but not in respect of any of the plaintiffs. Moreover, there is of course no basis upon which the first plaintiff, a company, could be thought to be hiding anywhere under the guise of a fabricated medical condition.

63. This imputation, too, should consequently be struck out.

64. Particulars of identification are provided by the plaintiffs in para 6.4 which reads as follows:

"The second article referred to and was understood to refer to the Plaintiffs in that:

(b) it identified the First Plaintiff as Interval Resort Networks;

(d) it identified the First Plaintiff's Northbridge Office as 6th Floor, 102 James Street."

65. The defendant complains that none of these particulars should be allowed to stand.

66. As to that in para (a), counsel for the defendant submitted that this adds nothing as regards identification of the plaintiffs. It seems to me that, insofar as the first article referred to one or more of the plaintiffs and the second referred to the first, this last reference might amount to a reference to one or more of the plaintiffs but only to people who had read the first article. Consequently, any such particular of knowledge should, if it is to stand, be pleaded in that way in the form of a true innuendo.

67. So far as para (b) is concerned the position in that respect is the same as that in para 5.3(d) and I am not, for similar reasons, prepared to strike out that paragraph.

68. So far as para (d) is concerned, this is in the same terms as para 5.3(a) and should, in my opinion, be struck out for the same reasons.

69. As to para (c) it seems to me that the identification of the first plaintiff's manager as John Ellis does nothing to identify any of the plaintiffs to the readers of the article except in the case of those who knew that Mr John Ellis was the first plaintiff's manager in which case this particular of identification might assist in the identification of the first plaintiff. Consequently this particular, too, should be pleaded in that way as a true innuendo if it is to stand. I propose consequently to strike out para (c) also.

70. In para 7 of the statement of claim the plaintiffs plead that on 6 January 1998 the defendant published a further article in the Inside Cover section of the newspaper as follows:

What are our friends at Interval Resort Networks up to now? The intriguing holiday prize consultants - they took over the business of Lifestyles Australasia who used to tell you that you had won a trip to Bali then started the hard sell when you tried to pick up the booty - have changed tack a degree or two.

Now they are offering seminars at their bunker at 102 James Street, Northbridge, for a timeshare scheme at the same tropical paradise. We have only one thing to say - beware."

71. The imputations said to arise from the third article in its natural and ordinary meaning are pleaded in para 7.2(a) - (g). Sub-paragraphs (a) - (c) thereof are identical to paras 5.2(a) - (c). Sub-paragraph (d) is identical to para 5.2(f). Sub-paragraphs (f) and (g) are identical to paras 5.2(g) and (h). Sub-paragraph (e) reads as follows:

"(e) the Plaintiffs conduct a business designed to induce persons to take up timeshare units in a scheme, and which scheme offers no real benefit to the purchasers;"

72. Paragraph 7.3 is to the effect that the third article carried with it the imputations of the previous articles and is otherwise in terms similar to para 6.3.

73. Paragraph 7.4 provides particulars of identification and is to the effect that the third article referred to and was understood to refer to the plaintiffs for the same reasons as those set out in paras 6.4(a), (b) and (d).

74. As to para 7.3, counsel for the defendant made a similar complaint to that made in respect of para 6.3 and it seems to me, for the reasons set out in respect of that paragraph, that this paragraph cannot stand in its present form.

75. It follows from this that each of the imputations pleaded in para 7.2 which rely upon earlier articles can likewise not stand.

76. That being so, the parties addressed only the "new" imputation pleaded in sub-para (e) in the course of their submissions. Counsel for the defendant submits that that imputation lacks the requisite precision and is incapable of arising. It seems to me that the imputation, as pleaded, is not arguably capable of arising from the third article. While the article clearly warns members of the public that there is a danger in becoming involved in a timeshare scheme associated with the first plaintiff there is, on my reading of that article, nothing in it which is arguably capable of giving rise to an imputation that the scheme in fact offers no real benefit to purchasers of the timeshare units. I consequently propose to strike out this paragraph also.

77. As to para 7.4 counsel for the defendant makes the same complaints as are made in respect of paras 6.4(a), (b) and (d). It seems to me that, for the reasons expressed in respect of those paragraphs, sub-paras (a) and (c) should be struck out but sub-para (b) should be allowed to stand.

78. Paragraph 8 of the statement of claim pleads a fourth article which appeared in the Inside Cover section of the newspaper on 6 February 1998. It reads as follows:

Remember our series of reports on Northbridge's Interval Resorts Network aka Lifestyles Australasia, the Singapore based company that got its kicks out of telling people they had won free trips to Bali, which, unfortunately, wasn't true?

We first knocked on their door about two months ago (we actually got trapped in a lift with IRN's managing director, but that's another story) when they were conducting bogus street surveys then calling people to tell them they had won the holiday of a lifetime, which, of course, wasn't true.

IRN assured us they were a different company to Lifestyles Australasia, which had been under investigation by the Ministry of Fair Trading.

After exposing their rather questionable business methods on behalf of at least 16 people who had rung us to complain that they had been tricked, the company assured us they had changed their tune and were now more honest when telling people of their product, which is selling travel packages and overseas accommodation deals.

But after speaking to a former staffer who was sacked by the company on Monday, we're not so sure.

Maree had been working out of the IRN's office at 102 James Street since November, which is apparently a long time for any telemarketers who work at IRN.

She gave us an insight into how 'travel specialists' go about their canvassing. Remember that before our original reports, customers were told they had won a free trip to Bali. Maree said things had changed. The new line was: 'Hello, I'm Maree from Interval Resorts Network. Your name has been selected to receive a reward to qualify for seven nights free accommodation in Bali. I just need to ask you a few questions. Are you an Australian citizen? Are you in a permanent relationship? Do you have a partner? Are you both employed?' Apparently if you answer all of these questions appropriately, you're then asked your income and your ideal holiday destination. If you earn less than $25,000.00, they're not interested, according to Maree.

Maree also told us the response the 40-odd IRN telemarketers blurted out when asked by potential customers where the company got their names and telephone numbers.

'We had to say it was from a computer database and if they asked what one, we had to say we didn't know,' she said.

'What happened was that we just came to work, ripped a page out of the phone book and started ringing.'

Rules changed constantly about what could and could not be said to the customer. Inside Cover even made the grade. 'After those articles were printed, we were told to say that was not us, that was the company that occupied the building before us,' she said.

We decided to absolve Maree of her guilt and rang IRN to see who was telling the truth. After finally conquering their rather strange telephone system which cuts you off mid-sentence, we spoke to telemarketer manager Barbara Codder. She talked to us for 10 minutes and told us nothing.

We were then handballed to Phillip Lee, who wouldn't even confirm whether he was or wasn't IRN's sales director. Did he instruct his staff to tell porkies over the phone to lure in customers? No way, he said.

He then added: 'There is only one person we have fired in the last three months for not doing their job properly. Our solicitors can make things very hard for her.' A few minutes later, we got a call from said solicitor, Rohit Malhotra, who again stressed that the company had lifted its game. He added that if we referred to IRN as a timeshare operation we'd be in big trouble.

79. The imputations said to be conveyed by that article in its natural and ordinary meaning are pleaded in paras 8.2 (a) - (l). Sub-paragraphs (a) - (c) are identical to paras 5.2 (a) - (c) and sub-paras (d), (e) and (f) are identical to paras 5.2(f), (g) and (e). Sub-paragraphs (k) and (l) are identical to para 7.2(e) and para 5.2(h) respectively. Sub-paragraphs (g) - (j) read as follows:

"(g) the Plaintiffs had made false statements to potential customers and to the newspaper concerning their activities;

(h) the Plaintiffs had been correctly accused of guilt, and upon expose [sic exposure] by the newspaper thereafter desisted in deceptive and surreptitious activities;

(i) the Plaintiffs conduct bogus street surveys and use this as a method of attracting potential clientele and engage in unconscionable conduct;

(j) the Plaintiffs direct their employees to make false statements to potential customers;"

80. Paragraph 8.3 is pleaded in terms similar to para 6.3.

81. Then, in para 8.4, which deals with particulars of identification, sub-paras (a) - (c) are similar to paras 6(a), (b) and (d). Sub-paragraph (d) thereof reads as follows:

"(d) it [the fourth article] identified Phillip Lee as a person in management and perhaps the sales director of the First Plaintiff."

82. Paragraph 8.3 should be struck out for the reasons expressed in respect of para 6.3.

83. It follows that those imputations pleaded in para 8.2 which rely upon the earlier articles cannot be allowed to stand in their present form.

84. I will consequently deal only with the "new" imputations.

85. As to sub-para (g) counsel for the defendant claims that there is nothing defamatory in the mere making of false statements. I accept the submission that the mere making of false statements, without more, is not defamatory. These can be made accidentally and without any fault on the part of those making them. If the imputation was one that the plaintiffs had knowingly made false statements that would, I think, be plainly defamatory. However that is not what has been pleaded and I do not consider that the imputation should stand in its present form.

86. Counsel for the defendant contends, as regards imputation (h), that this is not defamatory. He submitted that there is nothing which should lower the standing of the plaintiffs in the eyes of any reasonable person arising from the fact that it had desisted from its deceptive and surreptitious activities.

87. It seems to me that the pleaded imputation, so far as it is to the effect that the plaintiffs had been correctly accused of guilt in deceptive and surreptitious activities and had been exposed by the newspaper in respect of such activities, is plainly defamatory. However it seems to me that the plea that, upon exposure, it desisted in those activities adds nothing to the defamatory imputation. It consequently seems to me that this imputation will have to be reformulated.

88. Imputation (i) is said to amount to a number of different imputations rolled up into one plea. Moreover, counsel for the defendant contended, it is not defamatory to say that a person conducts bogus street surveys. The imputation is also said to be ambiguous and nonsensical.

89. It seems to me to be at least arguably defamatory of someone to say of her or him that he or she conducts bogus street surveys. Also, it does not seem to me to be ambiguous or nonsensical to suggest that these are conducted for the purposes of attracting potential clientele. While I have some reservations whether or not the plea of the purpose of the conducting of the bogus street surveys adds anything to the imputation I am prepared to accept, for present purposes, that it is permissible to say for what purpose the bogus street surveys were conducted as this gives some context to the "bogus" behaviour alleged.

90. However, the words "and engage in unconscionable conduct" seem to me to lack the requisite precision and fail to identify just what it is that is said to amount to the unconscionable conduct. It consequently seems to me that the words "and engage in unconscionable conduct" should be deleted or that imputation (i) should otherwise be reformulated.

91. Finally, as regards this paragraph, the defendant contends that imputation (j) is not defamatory. I am unable to accept that that is so. It seems to me to be at least arguably defamatory of someone to say of that person that he or she directs employees to make false statements to potential customers.

92. As to para 8.4 it seems to me that sub-paras (a) and (c) should be struck out for the reasons expressed in respect of paras 6.4(a) and 6.4(d) but that para 8.4(b) should stand for reasons previously given. It seems to me, as regards sub-para (d), that this falls within the same category as para 6.4(c) and that it should, for the reasons given in respect of that paragraph, be struck out.

93. A fifth article in the Inside Cover section of the newspaper is pleaded, in para 9, to have been published on 18 March 1998 as follows:

Sometimes, all we can do is shake out collective heads. You may remember our series of reports on Interval Resort Networks.

We first knocked on their door about three months ago when they were conducting bogus street surveys, then calling people to tell them they had won a free trip to Bali, which, of course, wasn't true.

Interval Resort Networks (Australasia) Pty Ltd & Ors v West Australian Newspapers Ltd [1999] WASC 2

At a glance

Court

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Judgment (357 paragraphs)

Interval Resort Networks (Australasia) Pty Ltd & Ors v West Australian Newspapers Ltd [1999] WASC 2 (4 May 1999)

Parties

Cases Cited (13)