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[2025] NSWSC 168
Supreme Court of NSW
2025-03-11
Rothman J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Li v Liao [2025] NSWSC 168
Hearing dates: 31 May 2024
Date of orders: 11 March 2025
Decision date: 11 March 2025
Jurisdiction: Common Law
Before: Rothman J
Decision: (1) The Court strikes out the Statement of Claim.
(2) The Court grants leave to the plaintiffs to file an amended Statement of Claim within 21 days of the date of this judgment to overcome the objections upheld or to accommodate the comments in these reasons for judgment.
(3) Costs are reserved.
Catchwords: DEFAMATION — defamatory matter — capacity to convey pleaded imputations — Motion to strike out parts of Statement of Claim — Defamation Act 2005 (NSW) — admissibility of recorded conversation under Surveillance Devices Act 2007 (NSW) and Evidence Act 2005 (NSW) — whether imputations in the Concerns Notice and the Statement of Claim are substantially similar — whether imputations must be pleaded rather than particularised — whether imputations are capable of arising — whether imputations are capable of being defamatory — whether serious harm was pleaded and particularised
TORTS — economic torts — Injurious falsehood — whether false statement pleaded — whether false statements are about the plaintiffs’ goods, services or business — whether Statement of Claim fails to give the particulars of the falsity of each statement
Legislation Cited: Civil Procedure Act 2005 (NSW), s 56
Defamation Act 1958 (NSW), ss 5, 6, 9, 10
Defamation Act 1974 (NSW), s 9
Defamation Act 2005 (NSW), ss 7, 8, 12A, 12B, 12C
Evidence Act 1995 (NSW), s 138
Surveillance Devices Act 2007 (NSW), s 7
Uniform Civil Procedure Rules 2005 rr 14.30, 15.1, 15.19
Cases Cited: Gayed v Virgin Mary & St Markorious Coptic Orthodox Church [2024] NSWSC 1232
Goldsbrough v John Fairfax and Sons Limited (1934) 34 SR (NSW) 524
Hall-Gibbs Mercantile Agency Ltd v Dun (1910) 12 CLR 84
Jay v Petrikas [2023] NSWCA 297
Newman v Whittington [2022] NSWSC 1725
Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69
Petritsis v Helenic Herald (1978) 2 NSWLR 174
Project Blue Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
Sullivan v Department of Transport (1978) 20 ALR 323
SZTAL v Minister for Immigration and Border Projection (2017) 262 CLR 362; [2017] HCA 34
Whelan v John Fairfax & Sons (1988) 12 NSWLR 148
Category: Procedural rulings
Parties: Xiaolu Li (First Plaintiff)
Forte Sydney Construction Pty Ltd (Second Plaintiff)
Forte Burwood Development Pty Ltd (Third Plaintiff)
Forte Burwood Pty Ltd as trustee for the Forte Burwood Unit Trust (Fourth Plaintiff)
Yinan Liao (Defendant)
Representation: Counsel:
G Campbell (First to Fourth Plaintiff)
C Parkin (Defendant)
Solicitors:
Rosemont Partners (First to Fourth Plaintiff)
Goodwin & Co Lawyers (Defendant)
File Number(s): 2024/62563
Publication restriction: N/A
HIS HONOUR: The defendant moves on notice to strike out certain paragraphs and certain parts of some paragraphs of the Statement of Claim on the basis that they are incapable of being defamatory of the first plaintiff. Specifically, the motion seeks to strike out certain alleged imputations as not arising from the publications in question and incapable of conveying meanings that have been particularised in relation to some or all of them.
As some or all of the paragraphs are the subject of earlier prayers for relief, the latter paragraphs must be understood as either a repeat of those earlier prayers or an issue dealing with identification of the first plaintiff.
The substantive proceedings rely upon a cause of action in defamation. It is alleged that the defendant defamed the plaintiffs. The following facts are taken from the Statement of Claim.
The first plaintiff, Belinda Li, was, at the time of the alleged defamatory publication, a licensed builder in New South Wales. The second, third and fourth plaintiffs are companies incorporated in New South Wales and a licensed builder, carrying on the business of construction and development project management, and a residential property development owner, respectively.
The first plaintiff and the defendant were partners in a joint venture residential development of land situated at 8-10 Shirley Street, Carlingford, New South Wales. From about mid-2021, the first plaintiff, the second plaintiff (hereinafter “Forte Construction”) and the defendant were, with others, involved in proceedings relating to a development at Carlingford (hereinafter “the Carlingford Development”). Those proceedings are in the Federal Court of Australia and commenced in late 2021 (hereinafter “the Carlingford Proceedings).
In or around May 2022, Mr Chen, on behalf of HK Chen as trustee of the HK Chen Family Trust, entered into a contract with Forte High Growth Property Fund Pty Ltd as trustee for the Forte High Growth Property Fund Unit Trust (“FHGP Fund”) which provided for HK Chen, as trustee for the HK Chen Family Trust, to invest $1 million in a development project (hereinafter the “Burwood Project”). The investment was to be by way of transfer of the $1 million to the FHGP Fund by March 2023, which money was then to be transferred to the Forte Burwood Unit Trust, of which Forte Burwood, the fourth plaintiff, is the trustee, for the purposes of the Burwood Project. The foregoing is hereinafter referred to as the “Li Investment Contract”.
On or around 10 September 2023, East Land Pty Ltd (hereinafter “Eastland”) entered into a contract with Forte Burwood to pay it $32 million as an investment in the Burwood Project, being the property development of land situated in Belmore Street, Burwood.
The first matter complained of was an alleged slander, an oral publication concerning the plaintiffs, in which statements were made to the effect that Forte Construction and Forte Burwood were respectively builders and developers of the projects supervised by the first plaintiff. The conversation is alleged to have contained the following imputations:
| No. | Meaning / Imputation | | 13.1 | The first plaintiff cheated the iProsperity Group of Companies out of money that the Group had invested in the property development. | | 13.2 | The first plaintiff is corrupt. | | 13.3 | The first plaintiff embezzled two to three million dollars from the Carlingford Development. | | 13.4 | The first plaintiff embezzles money from property development projects in which she is involved. | | 13.5 | The first plaintiff creates and issues invoices for work that has not been performed. | | 13.6 | There is not a single developer who has worked with the first plaintiff that is not suing her in Court. | | 13.7 | The first plaintiff lies to investors to get them to invest money in property development projects in which she is involved. | | 13.8 | The development projects that the first plaintiff constructs all have massive issues and you cannot buy them. | | 13.9 | The first plaintiff falsifies financial records to conceal her embezzlement of funds on property development projects in which she is involved. | | 13.10 | The first plaintiff illegally operates trust accounts. | | 13.11 | Every project that the first plaintiff has been involved with ends up in court. | | 13.12 | The first plaintiff takes money from her development projects to fund the costs of her lawsuits in other projects. | | 13.13 | The first plaintiff was involved in bribery and corruption with the Mayor of the City of Ryde Council. | | 13.14 | The first plaintiff took money that the defendant had invested in the Carlingford Project and used it to buy a house in the Blue Mountains and other properties for herself. | | 13.15 | The first plaintiff has had sex with different men with the purpose of taking their money and property. | | 13.16 | The first plaintiff has no morals. |
The second matter of which the plaintiff complains is the publication of a letter sent to Mr Wang, a director of Eastland and a Chinese National residing in the People’s Republic of China, in early 2023. On receipt of the letter, it is alleged Mr Wang forwarded the letter to Mr Hua, another director of Eastland, residing in Australia.
It is alleged that the letter imputes:
| No. | Meaning/Imputation | | 17.1 | That Forte Construction constructed the Epping Project with sub-par quality plumbing. | | 17.2 | The first plaintiff falsified an invoice for $300,000 to $400,000 and added it to the Epping Project for her profit and the profit of a fire safety company that she worked with. | | 17.3 | It is likely that the fire safety that has or will be constructed on the Burwood Project by the first plaintiff is questionable. | | 17.4 | The first plaintiff builds sub-par quality projects. | | 17.5 | The majority of properties constructed by the first plaintiff end up in lawsuits. | | 17.6 | The first plaintiff embezzles money from the construction projects that she is involved in. | | 17.7 | Eastland will lose its money on the Burwood Project. | | 17.8 | The first plaintiff makes fools of those who invest in her projects. |
The objections to the paragraphs of the Statement of Claim depend in part upon the construction and operation of the provisions of the Defamation Act 2005 (NSW). Before dealing with the details of the provisions upon which the defendant relies, it is appropriate to note that the distinction, previously significant, between slander and libel was abolished and has been insignificant or meaningless for decades. [1]
At least some of the objections depend upon amendments to the Defamation Act in 2020 dealing with the requirement for Concerns Notices and ancillary provisions. Essentially, the defendant submits that the Statement of Claim, in so far as it alleges imputations arising from the two publications, is in substantially different terms to the imputations raised in the Concerns Notice. It is appropriate to set out the relevant provisions and they are in the following terms:
12A Concerns notices
(1) For the purpose of this Act, a notice is a concerns notice if—
(a) the notice—
(i) is in writing, and
(ii) specifies the location where the matter in question can be accessed (for example, a webpage address), and
(iii) informs the publisher of the defamatory imputations that the aggrieved person considers are or may be carried about the aggrieved person by the matter in question (the imputations of concern), and
(iv) informs the publisher of the harm that the person considers to be serious harm to the person’s reputation caused, or likely to be caused, by the publication of the matter in question, and
(v) for an aggrieved person that is an excluded corporation—also informs the publisher of the financial loss that the corporation considers to be serious financial loss caused, or likely to be caused, by the publication of the matter in question, and
(b) a copy of the matter in question is, if practicable, provided to the publisher together with the notice.
Note—
Section 12B requires a concerns notice to be given before proceedings for defamation can be commenced.
(2) For the avoidance of doubt, a document that is required to be filed or lodged to commence defamation proceedings cannot be used as a concerns notice.
(3) If a concerns notice fails to particularise adequately any of the information required by subsection (1)(a)(ii), (iii), (iv) or (v), the publisher may give the aggrieved person a written notice (a further particulars notice) requesting that the aggrieved person provide reasonable further particulars as specified in the further particulars notice about the information concerned.
(4) An aggrieved person to whom a further particulars notice is given must provide the reasonable further particulars specified in the notice within 14 days (or any further period agreed by the publisher and aggrieved person) after being given the notice.
(5) An aggrieved person who fails to provide the reasonable further particulars specified in a further particulars notice within the applicable period is taken not to have given the publisher a concerns notice for the purposes of this section.
12B Defamation proceedings cannot be commenced without concerns notice
(1) An aggrieved person cannot commence defamation proceedings unless—
(a) the person has given the proposed defendant a concerns notice in respect of the matter concerned, and
(b) the imputations to be relied on by the person in the proposed proceedings were particularised in the concerns notice, and
(c) the applicable period for an offer to make amends has elapsed.
(2) Subsection (1)(b) does not prevent reliance on—
(a) some, but not all, of the imputations particularised in a concerns notice, or
(b) imputations that are substantially the same as those particularised in a concerns notice.
(3) The court may grant leave for proceedings to be commenced despite non-compliance with subsection (1)(c), but only if the proposed plaintiff satisfies the court—
(a) the commencement of proceedings after the end of the applicable period for an offer to make amends contravenes the limitation law, or
(b) it is just and reasonable to grant leave.
(4) The commencement of proceedings contravenes the limitation law for the purposes of subsection (3)(a) if the proceedings could not be commenced after the end of the applicable period for an offer to make amends because the court will have ceased to have power to extend the limitation period.
(5) In this section—
limitation law means the Limitation Act 1969.
The foregoing statutory provisions, like all statutory provisions, must be read and construed in the context of the statute as a whole. The Court’s primary objective in statutory construction is to give effect to the legislative purpose in enacting the provisions. The statute must be construed in a manner that gives rise to harmonious goals and, to the extent possible, achieves the purposes established by the legislation. [2]
In SZTAL v Minister for Immigration, supra, the High Court referred to the principles in the following passage:
“14 The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.” [Footnotes omitted.]
The proceedings were commenced by a Statement of Claim filed 18 February 2024. On 24 December 2023, a letter on the letterhead of Rosemont Partners, solicitors, was sent to the defendant purporting to be a Concerns Notice. The Concerns Notice refers to two defamatory publications being the oral statements made on 5 January 2023, and the letter to Mr Wang sent in early 2023.
Assuming for present purposes, and there is no submission to the contrary, that the letter of 24 December 2023 was a Concerns Notice, it predates the commencement of proceedings and, at least to that extent, the provisions of s 12B of the Defamation Act have been satisfied. In other words, prior to the commencement of proceedings, a Concerns Notice was served on the defendant. [3]
As is clear from the terms of s 12B(1)(b) of the Defamation Act, defamation proceedings may not be commenced unless the imputations relied upon in the proceedings were particularised in the Concerns Notice. It is that particular aspect of s 12B on which the defendant relies for some of the objections to the particular paragraphs.
First, the defendant objects to the admissibility of the first matter complained of on the basis that it was recorded in contravention of s 7 of the Surveillance Devices Act 2007 (NSW). The circumstance that, if it be the case, the recording of the conversation was unlawful pursuant to the provisions of the Surveillance Devices Act does not render inadmissible the first matter complained of. It would render unlawful the recording of the conversation.
The first matter complained of is a conversation that, at least on the basis of the pleadings so far, is not denied and which, for the purposes of this application, the Court must assume occurred. Even if, ultimately, the first matter complained of is a conversation that the defendant denies occurred, then the Court would need to determine whether the conversation occurred and the terms of the conversation.
Assuming for present purposes, without accepting and without deciding, that the recording of the conversation was unlawful and occurred in contravention of s 7 of the Surveillance Devices Act, the recording would not, on that basis alone, be “inadmissible”. The determination of the admissibility of the recording would need to be dealt with by the trial judge in accordance with s 138 of the Evidence Act 1995 (NSW).
Pursuant to the provisions of s 138 of the Evidence Act, the prima facie position is that evidence obtained unlawfully, being in contravention of an Australian law, is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting it given the manner in which the evidence was obtained. The determination of that issue depends upon the context of the trial itself, the significance and probative value of the evidence, whether the conversation and/or its contents are denied, and the other evidence that is available in relation to the conversation.
Further, whether s 7 of the Surveillance Devices Act renders it an offence to have recorded the conversation would depend upon whether the conversation was private and whether the person who recorded the conversation was a principal in the conversation and the recording of the conversation was reasonably necessary for the protection of the lawful interests of the person who recorded it, or was recorded not for the purpose of communicating or publishing it to a person who was not a party to the conversation that occurred.
In other words, for the purposes of a preliminary objection, it cannot be determined by the Court whether the recording has been made illegally or unlawfully. And if it were recorded unlawfully or illegally, it cannot, at this stage, be determined whether the recording of the conversation would be inadmissible, bearing in mind the discretion and/or evaluation that is required by the terms of s 138 of the .
The issue before the Court, described as Objection 1 in the defendant’s submissions, is whether, pursuant to the terms of s 12B(2)(1)(b), the imputations upon which the plaintiff relies are “substantially the same” as those particularised in the Concerns Notice. The Court notes that the terms of s 12B(2)(a) reinforce the prohibition on reliance upon imputations that have not been particularised in the Concerns Notice.
The defendant submits that the imputations pleaded in pars 13 and 17 of the Statement of Claim and, in particular, imputations 13.3, 13.5, 13.8, 13.9, 13.11, 13.12, 13.16, 17.3, 17.4, 17.5, 17.6, 17.7 and 17.8 are imputations that were not the subject of particulars in the Concerns Notice and cannot be pleaded as part of proceedings commenced, pursuant to the prohibition in s 12B of the Defamation Act.
The Court has already referred to the provisions of s 12B and its effect. It is necessary to deal in detail with each of the imputations.
As earlier summarised, the Statement of Claim alleges that the first matter complained of was a conversation between the defendant, Mr Chen, and Mr Ngu, referred to as “Nelson”, who is not described as a participant in either the Carlingford Development or the Burwood Development. Mr Chen, either himself or through a trust and/or company, is an investor in the Burwood Project.
The issue turns not only on the proper construction of the particular in the Concerns Notice and the imputation in the Statement of Claim, but also on the fundamental nature of an imputation. In recent times and since the abolition of the rule that a defamatory imputation could not be pleaded in the terms of the statement itself, there has been a growing if not universal practice to plead each imputation in the precise words of the statement published (whether orally or in writing). Yet the defamatory statement may not itself be an imputation.
The imputation may and usually does arise by inference, either a false innuendo or true innuendo, from the statement. The difficulty with the practice, which I do not here criticise, and which is permissible, is that it elides the “matter” and the “imputation”.
As described in the Uniform Civil Procedure Rules (hereinafter “UCPR”) r 14.30, the Statement of Claim seeks relief for the publication of “defamatory matter”. The defamatory matter gives rise to imputations. [4]
The distinction is clearly explained by Samuels JA in Petritsis v Hellenic Herald. [5] The issue in Petri**tsis dealt with by the Court of Appeal related to the distinction between comment and fact and whether the defence of comment was available. Comment, as is well known, must be an expression of opinion on identified facts. [6]
“Section 9(1) distinguishes between a defamatory imputation and the matter by means of the publication of which the defamatory imputation is conveyed. There is no reason to suppose that the word ‘imputation’ is used in any sense different from its ordinary meaning. Hence it means ‘the action of imputing or charging; the fact of being charged with a crime, fault, etc.’; in short, an accusation or charge. A charge or accusation may be conveyed in a statement of fact, or in a statement of opinion, that is, the statement of a comment upon facts. ‘A is a thief’, baldly asserted, is a statement of fact. ‘A has done X and is therefore a thief’ is a comment, or a statement upon fact or facts. Each such statement is defamatory; and since each makes an accusation or charge it is an imputation. By the terms of s 9(1) the ‘matter’ is the material which conveys the imputation, or within which the imputation is embedded, or from which the imputation may be inferred. The matter may be so clearly expressed that its meaning needs no gloss. But its meaning may be equivocal; and, in that case, the plaintiff must assign the imputation or meaning which, he asserts, the matter conveys. Hence, although the imputation arises from the natural and ordinary meaning of the matter, it may be expressed in terms which are not to be found in the language of the matter itself.” [8]
Samuels JA went on to make clear that imputations, in the sense of false innuendos, are the defamatory meaning which the publication or matter is said to convey. Those imputations “will invariably be a distillation rather than a restatement”. Any defence is raised in relation to the imputation, not the “matter”, and it is therefore important to understand the difference between an imputation and the matter that conveys it.
An imputation must ascribe or attribute to the plaintiff that which would, either from the words themselves (a false innuendo) or from the words together with extrinsic facts of the relevant kind (a true innuendo), that which is damaging to the plaintiff’s character or reputation or would cause the plaintiff to be shunned by right-thinking members of society.
It is fundamental to the rules that govern pleadings that they are designed to ensure that the defendant is entitled to know the nature of the case pleaded against it, and the nature of the case that the defendant must plead. In Whelan v John Fairfax & Sons [9] Hunt J said:
“It has always been made quite clear that the plaintiff’s pleaded imputation must identify the meaning for which he contends rather than merely the words by which that meaning is said to have been conveyed. Words are but instruments which are used to express or convey their author’s meaning. Outside of legal documents, however, words are often imprecise instruments for that purpose. A defamatory imputation is very rarely stated expressly; rather, it is more usually implied or to be inferred. The charge against the plaintiff is often to be read only between the lines …” [10]
His Honour continued and clarified that the issue to be decided in a particular case is whether there is likely to be confusion either at the pleading stage or at the trial in relation to the meaning for which the plaintiff contends. [11]
The fundamental position that a defendant is entitled to know the nature of the case to which it must plead is based upon natural justice or procedural fairness. Every party is entitled to know the case it must meet and to have a reasonable opportunity to prepare and to present its case. [12]
Having stated those principles, it is necessary to understand that a defamatory imputation must, when pleaded, express that which arises and is damaging to the reputation of the plaintiff or would result in the plaintiff being shunned. It is then necessary to deal with the objections that have been made to the Statement of Claim on that basis and to apply the foregoing principles.
Imputation 13.3 in the Statement of Claim is that the first plaintiff embezzled two to three million dollars from the Carlingford Development project. The Concerns Notice, being Annexure C to the Statement of Claim and the letter dated 24 December 2023, relevantly asserts the publication of an imputation that the first plaintiff “misappropriated two or three million dollars from a construction project you were an investor in”.
The objection to 13.3 is based upon the provisions of the Defamation Act and the proposition that it does not accord precisely or substantially with that which was particularised in the Concerns Notice. This is a defamation that arises from the conversation between three persons being the defendant, Mr Chen and Mr Ngu. The conversation is repeated or extracted, as may be required, in Annexure A to the Statement of Claim.
The Concerns Notice identifies this imputation as, “that [the first plaintiff] misappropriated two to three million dollars from a construction project you were an investor in (Other Project)”. The Statement of Claim particularises the imputation as, “[the first plaintiff] embezzled two to three million dollars from the Carlingford Development project”. Are these substantially the same?
Ordinarily to embezzle money involves fraud, whereas misappropriation is the utilisation, or transfer, of money for, or to, a person for or to whom it was not intended. Ordinarily if one were to misappropriate monies, it would involve fraud, but I leave open the possibility in an extreme situation that misappropriation may not be done for a dishonest purpose. For example, if a charity were provided money for the purpose of one project and utilised the money for a different charitable project in breach of the rules of the donor, it may be a misappropriation without dishonest intent.
The foregoing raises different issues. If that circumstance is a possibility, albeit rare, is the imputation defamatory? The answer is not determined by the existence of a rare possibility that does not involve dishonesty.
“The development properties that [the plaintiff] constructs all have massive issues and you can’t buy them.”
“That there is not a single developer who has worked with [the plaintiff] that is not suing her in Court. That subcontractors on every project that [the plaintiff] has been involved with are suing her in Court.”
Plainly, there are a number of reasons why a developer might sue the plaintiff other than the circumstance that the properties developed have “massive issues” or “can’t be bought”. For example, it may simply be that the plaintiff has not paid monies that were owing or were in dispute. There may be issues as to what is or is not defective work carried out by subcontractors and/or available on rise and fall (if there are still contracts with rise and fall clauses).
Even though the imputation that all development projects have “massive issues” or “can’t be bought” is a more detailed and particularised imputation than that found in the Concerns Notice, on its face, it is a substantially different imputation and is, for that reason, struck out.
Imputation 13.9 in the Statement of Claim alleges that the plaintiff “falsifies financial records to conceal her embezzlement of funds on property development projects in which she is involved”. The imputation particularised in the Concerns Notice is that the plaintiff “falsifies financial records to conceal her misappropriation of funds from property development projects in which she is involved”. At the hearing, the defendant maintained that the objection would not be pressed.
Imputation 13.11 in the Statement of Claim is in the following terms:
“Every project that [the plaintiff] has been involved with ends up in Court.”
“That there is not a single developer who has worked with [the plaintiff] that is not suing her in Court.
…
That subcontractors on every project that [the plaintiff] has been involved with are suing her in Court.”
While this is the same Concerns Notice imputation relied upon to support the Statement of Claim as was relied upon for Imputation 13.8, the imputation in the Statement of Claim is quite different. However, for the reasons provided by the Court in dealing with Imputation 13.8, there is some real doubt as to whether the pleaded imputation is defamatory. It is possible that it would be held to be, but I have serious doubts as to whether any such finding would be reasonable. I would strike out the imputation in its current form, but, noting that the Statement of Claim requires re-pleading anyway, I do not preclude the plaintiffs from seeking to render this in a form that would reasonably be defamatory.
The defendant objects to imputation 13.12 in the Statement of Claim which imputes that [the first plaintiff] “takes money from her development projects to fund the costs of her lawsuits in other projects”. The relevant imputation in the Concerns Notice that is said to give rise to this imputation in the Statement of Claim imputes that [the first plaintiff] “takes money from investors in property developments for use in funding her costs of litigation in relation to other projects”.
To the extent that it is alleged that the Statement of Claim, in this imputation, is outside the terms of the imputations in the Concerns Notice, the submission is rejected. In my view, the imputations are substantially the same.
The same finding is made in relation to the objection by the defendant to imputation 13.16 in the Statement of Claim. The Concerns Notice (imputation 6.2) alleges that [the first plaintiff] “does not have good morals”, while the Statement of Claim alleges that the first plaintiff “has no morals”. While as a matter of precision the imputations are different, the Court takes the view that the imputation is the same or substantially to the same effect.
The objection made to imputation 17.3 in the Statement of Claim needs greater explanation. The Statement of Claim imputes that, “it is likely that the fire safety that has or will be constructed on the Burwood Project by [the first plaintiff] is questionable”, while the Concerns Notice imputes “that the fire safety that was constructed by [the first plaintiff] on the Epping Project was questionable”.
These are different imputations, if they be imputations at all. One relates to the Burwood Project and the other to the Epping Project. More fundamentally, it is not clear what allegation is made against the plaintiff that would damage her reputation or have the effect of the plaintiff being shunned by right-thinking people. In any event, the imputation in the Statement of Claim is a different imputation from that in the Concerns Notice and is struck out.
The imputation in 17.4 is that the first plaintiff “builds sub-par quality projects” which is said to be based upon two imputations in the Concerns Notice, namely, that the plaintiff “is not a good builder” and “that the Epping Project had been constructed by the Builder with sub-par plumbing”.
The defendant objects to the structure of the Statement of Claim because the imputations contained therein are included as particulars and not as pleaded paragraphs. The defendant draws in aid UCPR r 14.30(2) in support of his position. There is a need to deal briefly with some history of the legislation covering defamation.
Under s 5 of the Defamation Act 1958 (NSW) (hereinafter “the 1958 Act”), every imputation was defined as “defamatory matter”. Whether or not a matter was defamatory was a question of fact. [13] The provisions of ss 9 and 10 of the 1958 Act rendered the publication of defamatory matter (i.e. each imputation) unlawful and each imputation was an actionable wrong. Prior to the 1958 Act, the imputation arising from an impugned publication was a particular of the material fact.
Section 9 of the Defamation Act 1974 (hereinafter “the 1974 Act”) rendered even more express that which, in my view, occurred with the promulgation of the 1958 Act. It rendered the publication of any document or the making of any utterance containing an imputation that is defamatory, whether by innuendo or otherwise, a matter, and the imputation is made by means of the publication of that matter. [14]
The distinction made in the 1974 Act between the publication, which became the matter, and the defamatory imputation was an alteration to that which operated under the 1958 Act. Nevertheless, by s 9(2) of the 1974 Act, the legislature, even more expressly or directly than was done under the 1958 Act, made the defamatory imputation, as distinct from the matter in which it was contained, actionable and created a cause of action from that imputation. In other words, each defamatory imputation was a cause of action.
As a consequence, at least while the 1974 Act governed proceedings in defamation, each imputation was a cause of action and, of necessity, was required to be pleaded as opposed to a mere particular. It was the cause of action or the basis for the cause of action commenced.
The Defamation Act 2005 (hereinafter also referred to as “the 2005 Act”) altered that approach. Section 8 provides that a single cause of action arises from the publication of defamatory matter. Defamatory matter is the publication of material from which the imputation arises, either expressly or by inference. It matters not how many defamatory imputations arise from one publication, as each publication is but one cause of action in defamation.
The foregoing is the context in which one must deal with the claim that each imputation needs to be pleaded and needs to be more than a particular.
To determine the objection, the starting point is the general rules relating to pleadings. By UCPR r 14.6, the Statement of Claim, when dealing with more than one publication or when dealing with more than one “matter”, must be divided into paragraphs and each matter must be put in a separate paragraph. The term “matter” in this context does not refer to the defamatory publication. By UCPR r 14.7, the pleading is to contain facts, not evidence, and must allege each material fact.
In Objections 3 and 4, the defendants submit that imputations said to arise are incapable of arising, (Objection 3) or are incapable of being defamatory (Objection 4). The imputations that are said to be incapable of arising are imputations 13.1, 13.2, 13.3, 13.7, 13.9, 13.10, 13.13 and 13.15.
The test for striking out a Statement of Claim and an imputation arising from published material is a strict one. Imputations are not struck out simply because a judge takes the view that she or he would not read such an imputation into the material.
Whether or not an imputation arises is a finding of fact, which appropriately forms part of the trial process. The striking out of an imputation therefore falls to be decided on the basis of the striking out of any pleading.
Whether a defamation pleading of an imputation should be struck out is determined on the basis of whether the imputation is available from the published material and whether it would be open to a jury to determine that the imputation arises.
Thus, a judicial officer’s preference or conclusion is not determinative, unless the judicial officer takes the view that, acting reasonably, no factfinder could conclude that a pleaded imputation arises from the material published. Similarly, whether an imputation is defamatory of the plaintiff is not determined on a preliminary basis by the judicial officer managing the proceedings, provided that an imputation defamatory of the plaintiff is available to a reasonable factfinder. As the High Court has made clear in Favell v Queensland Newspapers Pty Ltd: [15]
“Whether or not [the pleading] ought to and will be struck out [as disclosing no cause of action] is ultimately a matter for the discretion of the judge who hears the application. Such a step is not to be undertaken lightly but only, it has been said, with great caution. In the end, however, it depends on the degree of assurance with which the requisite conclusion is or can be arrived at. The fact that reasonable minds may possibly differ about whether or not the material is capable of a defamatory meaning is a strong, perhaps an insuperable, reason for not exercising the discretion to strike out. But once the conclusion is firmly reached, there is no justification for delaying or avoiding that step whatever stage it falls to be taken.”
The question must always be whether the material published was capable of giving rise to the defamatory imputation that is alleged. [16] The objection taken under this rubric to some of the imputations that have been alleged in the Statement of Claim have been the subject of comment in relation to earlier objections. It is unnecessary to repeat the imputations in so far as they have been extracted or summarised earlier in these reasons.
Objection is taken under Objection 3 to imputation 13.1, which alleges that the first plaintiff cheated iProsperity Group out of money that the Group had invested in a property development. At page 2 of Annexure A (as translated), the defendant is quoted as having said that the first plaintiff “was working with IPG. So back then, [the first plaintiff] cheated IPG, the owner of IPG even ended up on the news”.
The plaintiff also relies upon a passage in Annexure A on numbered page 39 from line 9 to 31. Fundamentally, that passage alleges that the plaintiff bought out debt; did not provide capital; and, disposed of funds in circumstances where there was no right to dispose of funds. The plaintiff also relies upon a passage at numbered page 46 of Annexure A in which the defendant allegedly said, “why IPG went broke likely had to do with [inaudible]. She did a lot through that Rhodes project”. The reference to “she” is likely to be a reference to the first plaintiff.
In my view, the factfinder at trial is capable of finding carried the imputation specified in 13.1.
Imputation 13.2 is that the first plaintiff “is corrupt”. Comments have been made in an earlier judgment of the Court on the range of meanings that can be attributed to the word “corrupt”. [17] Much depends upon context.
The plaintiff, in defending the proposition that the imputation arises, relies upon Annexure A at numbered page 24, line 7 to 18, in which the defendant describes the IPG project as an apartment project in which it is alleged that, in the context of the building industry in which there is “a lot of room for corruption”, she was involved in “job related misappropriation”, although “not misappropriating exactly” but “what she can do is create invoices create variations”. The plaintiff relies upon other passages to which it is unnecessary to refer. The passages already summarised are sufficient, in the context of the conversation, to be capable of giving rise to the imputation that the plaintiff is “corrupt”.
The next imputation to which objection is taken under this category is Imputation 13.3, to which earlier reference has been made. The plaintiff relies upon four passages in Annexure A, the first of which commences at numbered page 25, line 17.
During the course of the conversation, it is alleged that the defendant said that she (a reference to the first plaintiff) had “already taken 2, 3 million dollars, it was already short by 2, 3 million dollars”. At line 19 of page 26, the defendant, referring to the first plaintiff said, “[i]f she’s really embezzled this money, if we really can’t get it back, if it’s gone into her family trust. If they are not suspected of a crime, it’s hard to trace it. We want to sue her for committing a crime, but this takes time”. At page 35, line 31 the defendant says of the first plaintiff:
“So with situations like this, either she ends up in jail (sic), or you really get to her, more than her 2 million, and catch her frauds. If the fraud activity stands, I have to get her to show her family trust. Like her properties in her family trust, including her house in the Blue Mountains, her house in Kiama. Personally I would say that she bought these around April or May 2021, and would’ve settled two, three months later, in July or August. That’s around the time when we lost our money.”
“That’s what she does, she opens funds everywhere. She’s got a fund in the Blue Mountains as well as Kiama, and Burwood. Every project has a fund. And she does this through marketing, through WeChat through Little Red Book. If you’re interested, you give her your money. It’s not like she’s going to do it immediately. She definitely won’t be paying you interest every half a year or every year. She’s going to wait till it’s built. She’s got no pressure at all, zero financial pressure”.
“This person is so slippery, but it won’t disappear, neither can us (sic). … We want to land her in jail (sic), and she would need to sacrifice all that money she’s hiding, she’s going to need to cough it up and pay us.”
The passages identified by the plaintiff are capable of giving rise to an imputation that the plaintiff embezzled two to three million dollars, although it is not clear from the passages already cited whether that was from the Carlingford Development Project.
Objection is taken next to imputation 13.7, which is to the effect that the plaintiff lies to investors to induce them to invest money in property development projects in which she is involved. The plaintiff relies upon the passage commencing at Annexure A, numbered page 35, line 24 through to line 11 at page 36.
The passage is alleged to have been said by the defendant and is or purports to be an answer to a question as to whether the defendant had tried to mediate with the plaintiff. The only reference to lying or telling untruths is the allegation that, regardless of how many times one would speak to the plaintiff, she will say “black is white” and will not budge.
It does not seem to me that this imputation arises on the passage which the plaintiff relies upon to justify it and cannot. Other imputations may arise from it but the imputation as framed is not capable of arising from the passage upon which the plaintiff relies and imputation 13.7 is struck out.
The next objection in this class is to imputation 13.9 in the Statement of Claim which alleges that the first plaintiff “falsifies financial records to conceal her embezzlement of funds on property development projects”. The plaintiff relies for this imputation on two passages, the first of which is a statement that the defendant is confined to being a shareholder and the need to get to her books, which is “not that simple” (Annexure A, numbered page 26, line 29 to 31) and the second of which is a reference to the necessity to “bring [the first plaintiff] down” in order to “open up her books” (Annexure A, page 46). There is also a reference to the question as to where all her money has gone and wanting to find out “where it’s hidden”.
The passages upon which the plaintiff relies are not capable of establishing an imputation that the first plaintiff “falsifies financial records to conceal her embezzlement”. Imputation 13.9 is struck out.
The passages upon which the plaintiff relies to support the imputation particularised at Statement of Claim 13.10, namely, that the plaintiff “illegally operates trust accounts”, plainly allege that the plaintiff operates trust accounts in a manner that does not comply with the regulations. While there is a reference to the fraud of $2 million, to which earlier reference has been made in these reasons, the two issues are not, in the passages upon which the plaintiff relies, connected. However, an imputation arises that the plaintiff utilises the trust accounts to receive money that she has embezzled. There is then a reference to the need to bring down the plaintiff “a peg” and have her convicted by finding irregularity in the trust deed or in the operation of the trust.
The objections made by the defendants under the rubric of Objections 5 and 6 relate to the issue of serious harm. The defendant submits that there has been a failure to plead serious harm and, if it be wrong on that allegation, a failure to give required particulars of serious harm.
The amendments enacted by the legislature to the Defamation Act 2005 in 2020, inserted into the Act s 10A which deals with serious harm. By that insertion, the legislature made express that an element of the cause of action for defamation is that serious harm has been occasioned to the reputation of the person alleged to be defamed. There are special measures in relation to corporations, even those which are not otherwise excluded from a suit in defamation.
Further, it is the judicial officer dealing with the defamation proceedings that determines whether there is or has been established serious harm. As a consequence of the insertion of s 10A, it is necessary for a plaintiff to plead serious harm, namely, that the publication of the defamatory matter has caused or is likely to cause serious harm to the plaintiff.
Paragraph 13 of the Statement of Claim alleges that the conversation, being the first matter complained of, was defamatory.
Paragraph 17 alleges that the letter of early 2023 (Annexure B1, translated as Annexure B2) is defamatory of the plaintiff.
Paragraph 18 refers to the circumstance that a Concerns Notice had been sent.
At paragraph 19, there is an allegation that the plaintiff “has been brought into hatred, ridicule and contempt and has been ‘gravely injured’ in her reputation”.
At paragraph 20, there is a reference to the plaintiff having suffered “significant damage” in the “Chinese building community” and the “Chinese property development community”, each of which is said to be small. At paragraph 21, the plaintiff relies upon the grapevine effect. Paragraph 23 refers to malice as a consequence of which aggravated damages has been claimed.
On its face, while there is a passing reference to “significant damage” and “grave injury”, at the very least any serious damage has not been pleaded. Further, the nature of the serious damage has not been pleaded nor has the plaintiff given any particulars of serious harm.
The provisions of s 10A of the Defamation Act, as earlier stated, have been inserted by the legislature. As earlier judgments have made clear, [19] the purpose of enacting s 10A was to avoid litigation on minor disputes which do not cause serious harm.
The incidence of disputes arising as a consequence of social media and the distribution of emails has notoriously led to “backyard disputes”, which impermissibly utilise the resources of the Courts in dealing with matters that ought never be the subject of litigation. There is, in the overriding purpose of s 56 of the (NSW) and the ancillary provisions thereto, a focus on a cost-benefit analysis in terms of litigation. Litigation on minor matters is not worth the costs involved and the resources attributed to it.
This objection relates to paragraph 23 of the Statement of Claim in relation to the second plaintiff. The plaintiffs do not press any claim for aggravated damages in relation to the second plaintiff.
Accordingly, the Court strikes out paragraph 23 in its current form and grants to the plaintiff, as with other matters struck out, leave to replead omitting reference to corporate plaintiffs.
The objection to which Objection 8 refers is an objection to a vague pleading in that paragraph 14 of the Statement of Claim refers to “some of” the defamatory material being published in Annexure B1.
The plaintiff did not press the words “some of” and the Court strikes them out.
There are three types of objections to the claim for injurious falsehood. Objection 9 relates to an alleged failure to plead the false statement upon which the plaintiff relies. Objection 10 alleges that the statements alleged to be false are not about the second, third or fourth plaintiff’s goods, services or business, with the exception of imputation 17.1. Objection 11 is that the Statement of Claim fails to give particulars of the falsity of each of the statements.
These three objections to the claim for injurious falsehood can be dealt with together.
There are four elements to injurious falsehood: a false statement of or concerning the plaintiff’s goods or business; publication of that statement by the defendant to a third person; malice on the part of the defendant; and proof by the plaintiff of actual damage (which may include a general loss of business) suffered as a result of the statement. [20]
The pleadings, in so far as they deal with the claim for injurious falsehood, claim that the statements made were false. However, the pleadings do not specify the actual statements that are false. Nor do they specify the particulars in which such statements are false.
As is clear from the summary of the basic elements to the tort, referred to above, like all torts, damage is central to it. In the case of injurious falsehood, it is necessary to specify the damage that has been caused, which may include a general loss of business. The plaintiffs do not attempt to plead the statements that are false, the manner in which the statements are false or to specify the actual damage suffered as a result.
As earlier explained by the Court, in dealing with the difference between imputations and defamatory matter, there is a significant, if not essential, distinction between that which is published and the imputations that arise from the publication. The distinction, in defamation claims, at least in recent times, has been honoured more in the breach than in the observance.
Nevertheless, when it comes to the tort of injurious falsehood, it is insufficient to plead imputations and to plead the falsity of imputations. It is necessary to plead that which has been said and the specifics of the falsity of such statements. It is also necessary to plead actual damage arising from the publication that is said to be false and has injured the plaintiff. None of that has been done adequately or at all by the plaintiffs.
The defendant seeks to strike out the claim, because, it is said, these objections are fatal. I do not agree.
The plaintiffs plead that the statements are false; the plaintiffs plead that the statements are those contained in paragraphs 13 and 17 (which, by definition, are alleged to be imputations); they do not plead with specificity the false aspects of the statements that have been made; nor, lastly, do they specify the actual damage caused by the statements. Nevertheless, there is an allegation of damage; there is an allegation of false statements; and there is an allegation of malice.
I have concluded that there are claimed to be imputations which are not imputations. I have also concluded that to the extent that statements have been pleaded which give rise to defamatory imputations, some of those imputations have not been pleaded or pleaded appropriately. I have further concluded that the imputations need to be pleaded rather than particularised, even though they form “particulars” of the Concerns Notice. I have also determined that there are some imputations which are not substantially the same as the imputations to which the Concerns Notice refers and cannot as a consequence be pleaded.
Lastly, I have determined that, for the reasons above, the pleading of injurious falsehood is defective. These are pleading defects. Subject to compliance with the limitations and/or prohibitions in the Defamation Act, to which the Court has referred at length, the plaintiffs should have the capacity to seek to re-plead their claim.
For the foregoing reasons, the Court makes the following orders:
The Court strikes out the Statement of Claim;
The Court grants leave to the plaintiffs to file an amended Statement of Claim within 21 days of the date of this judgment to overcome the objections upheld or to accommodate the comments in these reasons for judgment;
Costs are reserved.
**********
Defamation Act 2005 (NSW), s 7.
Project Blue Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [70]; [1998] HCA 28; SZTAL v Minister for Immigration and Border Projection (2017) 262 CLR 362; [2017] HCA 34.
Gayed v Virgin Mary & St Markorious Coptic Orthodox Church [2024] NSWSC 1232 at [39]-[48], [54].
See also UCPR r 15.19.
(1978) 2 NSWLR 174.
Goldsbrough v John Fairfax and Sons Limited (1934) 34 SR (NSW) 524 at 531 (Jordan CJ).
Hall-Gibbs Mercantile Agency Ltd v Dun (1910) 12 CLR 84 at 91 (Griffith CJ), cited by Reynolds JA in Petritsis, supra at 183.G.
Petritsis v Hellenic Herald, supra, at 189 (Samuels JA).
(1988) 12 NSWLR 148.
Whelan v John Fairfax & Sons Ltd, ibid at 154.
Ibid at 155.
Sullivan v Department of Transport (1978) 20 ALR 323 at 343.
Defamation Act 1958 (NSW), s 6.
Defamation Act 1974 (NSW), s 9(1).
(2005) 79 ALJR 1716; [2005] HCA 52 at [6], citing with approval the comments of McPherson JA.
Ibid.
See for example, Drummoyne Municipal Council v ABC (1990) 21 NSWLR 135 at 138.
Whelan v John Fairfax & Sons, supra, at 160.B-E.
Newman v Whittington [2022] NSWSC 1725 at [27] and the judgment cited therein.
Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69 at [52]; Jay v Petrikas [2023] NSWCA 297 at [45].
Change to wording of orders on cover page.
Para 1 - 1st line - removed "a" before "notice" Para 3 - 1st line - changed "course" to "cause" Para 25 - "are" after the word "translations" changed to "is" Para 48 - 2nd sentence - "a circumstance" deleted
Li
Liao [2025] NSWSC 168
(1910) 12 CLR 84
(2001) 208 CLR 388
(1978) 2 NSWLR 174
(1998) 194 CLR 355
(1978) 20 ALR 323
(2017) 262 CLR 362
(1988) 12 NSWLR 148
(2005) 79 ALJR 1716
(1990) 21 NSWLR 135
The defendant also raises the accuracy of the translation of the first and second matters complained of. However, whether or not each of the translations is disputed is irrelevant for present purposes.
The Court will determine the accuracy of the translation on the basis of the evidence before it. It is not optimal for a translation to be disputed, but if it were disputed, the correctness or accuracy of the translation would depend upon expert evidence and the determination of the matter in these proceedings would not be the first time such an issue has arisen in the course of proceedings.
In the course of one of the majority judgments, Reynolds JA referred to the meaning of imputation and cited comments from the High Court that to impute “is an ordinary English word, and … is properly used with reference to any act or condition asserted of or attributed to a person”. [7]
The foregoing definition seems to derive from the dictionary. Nevertheless, it is one that has received acceptance by the courts.
As is clear from the terms of s 8 of the Defamation Act (s 9 in the 1974 Act), the cause of action for defamation relates to “the publication of defamatory matter about the person” even in circumstances where “more than one defamatory imputation” arises from the defamatory matter. The legislature, and the general law before it, differentiated between defamatory matter and the imputations arising from the matter.
In Petritsis, supra, Samuels JA referred to s 9 of the 1974 Act and said:
Whether the imputation is defamatory is determined by the manner in which it would be perceived by the ordinary reasonable reader. It is for the factfinder to determine whether the imputation is defamatory, but it is certainly reasonably possible that a reader would take the view that to impute someone has misappropriated funds is to impute dishonesty and fraudulent conduct.
The other issue is the specification of the Carlingford Development. Would it be a sufficient answer to this imputation if the defendant proved that the misappropriation and/or embezzlement occurred on a project other than the Carlingford Development? If, in the course of proceedings, it became clear that the imputation did not relate to the Carlingford Development or that there was no embezzlement or misappropriation relating to the Carlingford Development by the first plaintiff, would the defence of truth be established in the latter case and, in the former case, the imputation not arise from the publication?
Because the ordinary reasonable reader may reasonably infer that an allegation of misappropriation includes fraud, an allegation that a person has misappropriated funds for their own benefit is not substantially different from an allegation that a person embezzled funds. No substantial difference arises as a result of that aspect of the imputation.
There is a substantial difference between an allegation of misappropriation and/or embezzlement generally, and misappropriation and/or embezzlement in relation to a particular project, in this case, the Carlingford Development. The difference, however, is one in which the imputation is a more particularised version of the imputation in the Concerns Notice.
It seems that a greater degree of detail in the imputation, in this case by the identification of the project in which it was said the misappropriation and/or embezzlement occurred, does not render the imputation different from, or otherwise not substantially the same as, those particularised in the Concerns Notice.
However, I make it clear that, it would seem to me that the defendant would be entitled to defend the imputation on the basis that the material does not give rise to an imputation of “embezzlement” (as distinct from misappropriation) or that any imputation of embezzlement was not at the Carlingford Development Project.
The next objection is to imputation 13.5, which it is unnecessary for the Court to deal with because the plaintiff has indicated that the Statement of Claim will be amended in this respect. The distinction between the Statement of Claim and the Concerns Notice is that the Concerns Notice alleged that invoices were “fraudulently issued”, whereas the Statement of Claim imputes that the defendant “creates and issues invoices”. In other words, in the Statement of Claim there is no allegation that the invoices were issued “fraudulently”.
In imputation 13.8, objection is taken to the imputation in the Statement of Claim because it is substantially different or not substantially the same as that to which the Concerns Notice refers. The imputation in the Statement of Claim is to the following effect:
First, there is no allegation or assertion that the plaintiff engaged in “plumbing”. Secondly, it is not clear what imputation is made by the allegation that the plaintiff is “not a good builder”.
The allegation would certainly impact the reputation of the first plaintiff or more accurately the companies of which she is principal, but it is not clear from the imputation either in the Concerns Notice or in the Statement of Claim that the sub-par quality of the projects is as a result of any failure on the part of the first plaintiff or the companies. Nevertheless, the Statement of Claim at imputations 17.4 gives rise to a defamatory imputation as does the Concerns Notice at imputation 8.6.
The imputation in the Statement of Claim is more obviously defamatory and/or damaging to the reputation of the plaintiff, but the building of “sub-par quality projects” is an imputation which is substantially the same as “not [being] a good builder”. I do not strike out the imputation at 17.4 of the Statement of Claim.
The imputation in the Statement of Claim at 17.5 is substantially the same as the imputation at 8.9 of the Concerns Notice and is not struck out or disallowed.
The imputation contained in the Statement of Claim 17.6 is that the first plaintiff “embezzles money from the construction projects that she is involved in”, which is said to rely upon imputations 8.2 and 8.3 in the Concerns Notice. Those imputations are that the first plaintiff falsified invoices for herself and a fire safety company with which she worked.
Whether the alleged imputations in the Concerns Notice at 8.2 and 8.3 are indeed imputations, in the strict sense, is an interesting question. They certainly extract the matter published in the letter. However, as earlier explained, an imputation usually arises by inference, either a true innuendo or a false innuendo, from the statements made.
The imputation that is reasonably open to a factfinder in relation to that material is at least that the plaintiff “embezzles money from the construction projects”, in the sense of “embezzle” as defined earlier, and is dishonest.
While I do not need to rule on whether the imputations at 8.2 and 8.3 of the Concerns Notice are in truth imputations, the imputation at 17.6 of the Statement of Claim is in substantially the same terms as the imputation that arises from the Statement of Facts at 8.2 and 8.3 of the Concerns Notice.
Objection was taken to imputation 17.7 in the Statement of Claim, but at the hearing the plaintiff indicated that imputation 17.7 in the Statement of Claim will not be pressed.
Lastly, I deal with the imputation at 17.8 of the Statement of Claim which, it is said, is based upon the imputation at 8.10 of the Concerns Notice. The former is to the effect that the plaintiff “makes fools of those who invest in her projects”, while the Concerns Notice is to the effect that the “Burwood Developer cannot be trusted with investors’ money”.
Leaving aside the issue of identity and accepting, at least for present purposes, that the reference to the Burwood Developer might and would be taken by at least one reader as a reference to the plaintiff, there is a significant difference between the concept of making a fool of someone and not being trusted with money of investors. It seems to me that the imputation is not in substantially the same terms and goes beyond that which has been particularised in the Concerns Notice.
The terms of UCPR r 14.30 commence the rules in so far as they deal with pleadings relating particularly to defamation claims. Leaving aside prohibitions, UCPR r 14.30(2) requires that each Statement of Claim “specify” each imputation on which the plaintiff relies; allege that the imputation was defamatory; and allege that the publication has caused, or is likely to cause, serious harm to the reputation of the plaintiff.
When dealing with Particulars, UCPR r 15.1 requires that a pleading give such particulars of any claim that is pleaded as are necessary to enable the defendants to identify the case that the defendant is required to meet. UCPR r 15.19 prescribes the particulars required by r 15.1 in relation to a Statement of Claim seeking relief for the publication of defamatory matter.
Those particulars include: the publication on which the plaintiff relies to establish the cause of action in sufficient detail to enable the publication to be identified; particulars of circulation or distribution; particulars of facts and matters on which the plaintiff relies to establish that there is a defamatory meaning other than the ordinary meaning of the words used or actions taken; particulars of identification of the plaintiff if not otherwise named in the publication; particulars of the part or parts of the matter (a reference to the defamatory matter, meaning the publication) complained of “in support of each pleaded imputation”; and particulars of the serious harm.
The prescribed particulars in UCPR r 15.19 assume that the imputations have otherwise been pleaded. The particulars that are required are further and better particulars relating to each imputation and, in relation to UCRP r 15.19(1)(e) expressly refers to “each pleaded imputation”.
In the context of the operation of the Defamation Act 2005, particularly since the inclusions of ss 12A and 12B, and the restrictions on that which may be pleaded as an imputation to that which has been the subject of particulars in the Concerns Notice, it would seem that a harmonious reading of the provisions, bearing in mind the need to facilitate a just, quick and cheap resolution of the real issues between the parties, is that each imputation needs to be the subject of a pleading and not merely a particular.
Each imputation is a “material fact” giving rise to liability. It is a well-rehearsed and long-standing requirement that pleadings must contain each “material fact”. While material facts may depend upon the nature of the proceedings that are before the Court, in defamation proceedings the existence of an imputation that is defamatory must be material, and specificity of that imputation is required in a manner that cannot be altered without leave or argument.
Thus, the existence of a particular defamatory imputation is essential to the cause of action that arises from the publication which has been impugned. In those circumstances, the Court considers that each imputation should be the subject of a pleading and should not be provided merely by way of a particular, even though, in the Concerns Notice the imputations are particulars of the Concerns Notice.
Objection 2 is upheld.
It is necessary to ensure that the Court does not treat the words as one would a statute, and that the Court bears in mind that it is the ordinary, informed and reasonable reader of ordinary intelligence, experience and education whose understanding of the passage determines whether it is defamatory. I have little doubt that the passages upon which the plaintiff relies contain defamatory imputations. However, I do not consider that the passages impute that the plaintiff “illegally operates trust accounts”.
Further, and possibly more importantly from the perspective of pleadings, it is unclear how a defendant would deal with such an imputation. Is it suggested that the trust accounts are operated in a manner which is irregular? If that be the thrust of the imputation, then the irregularity is not clarified and would be impossible to answer. On the other hand, is it suggested that the trust accounts are operated in a manner which is an offence under the law, and, if so, what offence and in what manner? It seems, from the passages upon which the plaintiff relies, that the imputation is that the plaintiff is dishonest and utilises the trust accounts as the means by which the plaintiff conceals her dishonesty. Such is not the imputation sought to be pleaded. Imputation 13.10 is also struck out.
The next imputation to which objection is taken is imputation 13.13 in the Statement of Claim. It involves an allegation that the plaintiff was involved in bribery and corruption with the Mayor of Ryde.
The passage upon which the plaintiff relies to give rise to this imputation is found at page 32, line 31 of Annexure A in which the defendant alleges that the Mayor of Ryde was allegedly involved with IPG, was rumoured to be corrupt and taking bribes, and this was related to the plaintiff. The imputation is capable of arising from the words used.
The next objection is to Statement of Claim imputation 13.15 relating to the plaintiff having sex with different men for the purpose of taking their money and property. The first passage on which the plaintiff relies deals with a complicated relationship with a particular person whom the plaintiff believes she controls and who has given a connection to the Commonwealth Bank.
The second passage relates to a man from Shanghai, in which the defendant alleges that the plaintiff broke up his family resulting in the man’s wife divorcing him. During the course of that conversation the defendant alleged that the plaintiff and the man from Shanghai were in a relationship; that the plaintiff will do anything to achieve her goals; that she would sleep with different men to get what she wants; and that she slept with the man from Shanghai.
The third passage upon which the plaintiff relies is on the next page (Annexure A, page 26, commencing line 17) which does not seem to pertain to the imputation. Nevertheless, it seems that the imputation is capable of being available to the factfinder and the objection is dismissed.
In dealing with whether certain imputations are not capable of being defamatory of the plaintiff (Objection 4), the defendant relies upon trite or well-rehearsed meanings of the term defamatory. It is not the intention of the Court to rehearse those issues.
There can be little doubt that for an imputation to be defamatory it must harm the plaintiff’s reputation; lead to ridicule or contempt; lower the plaintiff in the estimate of right-thinking people; expose the plaintiff to ridicule; or lead to the plaintiff being shunned. The defendant objects to imputations 13.6, 13.11, 17.1, 17.5 and 17.7 as being incapable of being defamatory of the plaintiff.
In relation to imputations 13.6 and 13.11 in the Statement of Claim, while I accept that the circumstance that the plaintiff is being sued by every developer with whom she has worked or that every project involving the plaintiff has ended up in Court may have a non-defamatory explanation, the imputation harkens back to aspects of the manner in which imputations were dealt with previously by the courts. An imputation that a person has been charged with an offence is not, strictly, an imputation that the person has committed the offence, it is an imputation that the person has behaved in a manner that has caused the person to be charged and/or caused the person to be suspected of the offence. [18]
Nevertheless, that which must be pleaded is the imputation, and not the material from which the imputation arises. The same analysis, which permits the material in imputation in 13.6 and 13.11 to be defamatory, involves the proposition that it is the material and not the imputation that has been pleaded. Neither 13.6 nor 13.11 is, in that sense, a pleading of the imputation; it is a pleading of the material from which the imputation is derived. On the basis of Objection 4, as explained in the foregoing, imputations 13.6 and 13.11 are struck out.
The other matters raised under the rubric of Objection 4 are those contained in 17.1, 17.5 and 17.7. Imputation 17.1 is that Forte Construction constructed the Epping Project with sub-par quality plumbing. Imputation 17.5 alleges that the majority of properties constructed by the plaintiff end up in lawsuits. The defendant submits that this imputation is also unclear. Imputation 17.7 is an imputation that Eastland will lose money on the Burwood Project.
I assume for present purposes that the reference to the second plaintiff, Forte Construction, is a reference to the company which is an alter ego of the first plaintiff and therefore, subject to the nature of the imputation, could be defamatory of the first plaintiff. However, none of the three paragraphs are imputations that are capable of being available as defamatory imputations against the plaintiff.
Imputation 17.1 in the Statement of Claim is a reference to the fact that there was sub-par quality plumbing in a particular project. There is no allegation that the plumbing was performed by Forte Constructions, or the first plaintiff, or that the lack of quality in the plumbing was as a consequence of any conduct of either plaintiff.
The allegation in 17.5 suffers the same difficulties to which the Court referred in dealing with imputations 13.6 and 13.11. It is material from which there may be a defamatory imputation that arises, but is not, of itself, a defamatory imputation.
The imputation in 17.7 is a statement that an investor will lose money. In and of itself, it cannot give rise to an imputation or allegation that damages the reputation of the plaintiff nor to any other specie of damage that would render it defamatory.
Again, the Court does not say that a defamatory imputation may not arise as a consequence of that which is contained in imputation 17.7, given its context, but that which is specified in Statement of Claim 17.7 is not an imputation that is defamatory of the plaintiff.
Of course, some defamatory material speaks for itself in terms of the serious harm inflicted. An allegation that a person is a murderer or a fraudster (which comes close to that which is the subject of these proceedings), when published at large or in a mass distribution, or amongst a significant number of people with whom the plaintiff or putative plaintiff is dealing and/or mixing, may necessarily give rise to the inference of serious harm. In this case, where a conversation involved three people and a letter was directed to one person and republished to another, there is no necessary inference that serious harm has been caused. It is necessary for the plaintiff to plead serious harm and the nature of it. Particulars are required.
There has been no pleading of serious harm in an appropriate manner and no pleading of the particulars that would relate thereto.
The plaintiffs have pleaded each of the elements of the cause of action but have not done so properly. In those circumstances, the irregularity in the pleading of the injurious falsehood can be overcome by a re-pleading of the cause of action, bearing in mind the four basic elements that are required to be pleaded and the material facts that establish them.
In those circumstances, and particularly for the reasons associated with the reasons given in relation to objections to the defamation proceedings, I am otherwise minded to order that the plaintiffs re-plead. The proper remedy for the defects in the Statement of Claim relating to the injurious falsehood (and the defamation) is to allow the cause of action to be repleaded.