Lucas v John Fairfax Publications Pty Limited [2000] NSWSC 950 | Case summary

1 The first matter complained of in respect of which the plaintiff sues is an article which appeared on page 4 of The Sydney Morning Herald on Saturday 11 March 2000 bearing the headline "Jail just a sentence in the book of life" by Joseph Kerr. Reliance is also placed upon the photograph of Alan Bond leaving Karnet Prison Farm and the caption. 2 The second matter complained of upon which the plaintiff sues is made up of two articles published in the same edition of the newspaper. The first article which appears on page 1 and 4 bears the headline, "He's back, flash as a rat with a gold tooth"; the second article is "Jail just a sentence in the book of life" which, separately, constitutes the first matter complained of. 3 As I understand, it the basis upon which the plaintiff sues in respect of the first matter complained of is that it is defamatory of him. 4 The basis upon which the plaintiff sues in respect of the second matter complained of is the juxtaposition of the first article together with the second article on page 4 amounts to a single "matter complained of" intended by the publisher to be read together by readers of its newspaper. 5 The first part of the second matter complained of, namely, the first article ("… flash as a rat…") is conceded by the plaintiff, by itself to be incapable of defaming him. 6 Confusion arises in the present Statement of Claim by reference to the "flash as a rat" article as the second matter complained of. The second matter complained of is a composite of both articles, the first matter complained of is the "Jail just a sentence in the book of life" article. 7 It is contended by the defendant, the "terminology" in the pleading having been clarified, that this is an improper attempt by the plaintiff and, indeed, an illegitimate attempt amounting to an abuse of process, as I understand it, to multiply the imputations to increase the award of damages and thus, the whole pleading should be struck out. 8 It is argued on behalf of the plaintiff (subject to clarification of the terminology), that it is perfectly proper for the plaintiff to sue on one article by itself defamatory of him and plead imputations arising therefrom as the first matter complained of and that that article, together with another article, is a single publication constituting a second matter complained of giving rise to imputations defamatory of him even if one of the two articles constituting the composite is by itself incapable of defaming him. 9 It is to be understood that the plaintiff's case is that readers may read the defamatory publication, being the first matter complained of ("Jail just a sentence in the book of life") or readers may read both articles which constitute the second matter complained of. The more so in relation to the second matter complained of by reason of the juxtaposition to which I have referred. 10 Nothing in the decision of Hunt J in Burrows v Knightley (1987) 10 NSWLR 651 precludes this mode of pleading. 11 Burrows v Knightley was concerned with two proceedings brought by the plaintiff against two separate defendants. In the first proceedings, in the one paragraph the plaintiff pleaded four serialised extracts from a book published on different days. One set of imputations was pleaded as arising from these four separate extracts. This was held to be proper. Against the other publisher the plaintiff pleaded the four separate extracts with one set of imputations but pleaded separately the second, third and fourth serialised portions of the book with separate sets of imputations. This was on the basis that readers could be taken to have read one or more of the serialised extracts. This was held neither to be improper nor abuse of process. His Honour doubted the wisdom of it however (658B). 12 What is the difference between the present situation and that which applied in Burrows v Knightley? In Burrows v Knightley the Court was concerned with serialised publications each of which was defamatory, each having been published on separate days. In the present case the Court is concerned with two articles one of which is conceded not to be defamatory. It is concerned with two publications one made up of one article said to be defamatory and one made up of the two articles together. The foundation in principle in Burrows v Knightley was that there was apparent on the face of the "matter complained of" itself either an intention on the part of defendant that the series be read together or direct references internally one to the other so that the reader may reasonably be expected to read them together. 13 In the course of submissions in the present case it was conceded that objectively it could be taken that the reader would understand the defendant to have expected the readers to read both articles together one of which by itself was not defamatory of the plaintiff, the other of which was defamatory of the plaintiff. 14 As I have said the plaintiff concedes that no defamatory imputations are carried by the first article ("flash as a rat") but that its juxtaposition gives rise to additional imputations. 15 On this analysis the first matter complained of ("just a sentence in the book of life") is said to give rise to the following imputations in its natural and ordinary meaning: "6. (a) the plaintiff was a convicted criminal, in that he was found guilty by the West Australian Supreme Court of conspiracy to defraud; (b) the plaintiff was a convicted criminal in that he knowingly allowed the publication of false annual reports of Rothwells Bank for the years 1985, 1986, 1987 and 1988; (c) the plaintiff's criminal convictions were sufficiently serious as to warrant a sentence of four years in prison; (d) the plaintiff was a fraudulent businessman; (e) the plaintiff had behaved disgracefully as the director of a major Australian corporation, Rothwells Bank, by concealing the fact that prior to its collapse in 1988, it was in a precarious financial position; (f) the plaintiff was a man without shame in that, although he was sentenced to a substantial prison term for offences involving serious corporate fraud, he had accepted a position as chairman of a public company, Cabonne Limited which had offered shares to the public". 16 It is further alleged that the following imputations arise by way of true innuendo: "7.1 The plaintiff had failed disgracefully to meet his legal obligations as an officer of Rothwells Bank in that he conspired to defraud that company and knowingly allowed the publication of false annual reports. Particulars of Extrinsic Facts (i) Section 232 of the Corporations Law obliges an officer of a corporation at all times to act honestly in the exercise of his or her powers and the discharge of the duties of his or her office; (ii) an officer of a company has a fiduciary duty to act honestly in the discharge of his or her duties of office. 7.2 That the plaintiff had knowingly concealed his conviction on indictable offences from the officers, directors, members and/or shareholders of various corporations. 7.3 That the plaintiff had knowingly breached the Corporations Law by accepting positions of management of corporations within 5 years of being release from prison; … Particulars of Extrinsic Facts (i) By s 206B(1) of the Corporations Law, a person becomes disqualified from managing corporations if that person is convicted of an indictable offence that: (a) concerns the making, or participating in making, of decisions that affect the whole or substantial part of the business of a corporation; (b) concerns an act that has the capacity to affect significantly the corporations financial standing; or Is convicted of an offence that: (a) is a contravention of the Corporations Law and is punishable by imprisonment for a period greater than 12 months; or (b) involves dishonesty and is punishable by imprisonment for at least 3 months; (ii) Pursuant to s 206B(2) of the Corporations Law, the convicted person is disqualified from managing corporations for a period of 5 years from the day on which the person is released from prison. (iii) The plaintiff is the Executive Chairman of Cabonne Limited, a corporation for the purpose of the Corporations Law and the Cabonne Limited Group of Companies, and was elected to such position on the 15th day of March 1996. Cabonne Limited was listed on the Australian Stock Exchange on the 31st day of May 1999. (iv) The plaintiff is the non-Executive Chairman of St. Malo Australia limited, a corporation for the purposes of the Corporations Law, and was elected to such position on the 7th day of December 1993. (v) The plaintiff is the non-Executive Chairman of Australian Innovation Ltd, a company listed on the Australian Stock Exchange, having been appointed to such position on the 4th day of July 1997. (vi) The plaintiff was appointed a Director of First Pacific Davies (Australia) Pty Limited on the 17th day of February 1993. First Pacific Davies (Australia) Pty Limited is a company providing integrated property services". 17 What is now identified as the second matter complained of (the composite of the two articles) is said in its natural and ordinary meaning to convey the following imputations: "8. (a) the plaintiff was a convicted criminal, in that he was found guilty by the West Australian Supreme Court of conspiracy to defraud; (b) the plaintiff was a convicted criminal in that he knowingly allowed the publication of false annual reports of the Rothwells Bank for the years 1985, 1986, 1987 and 1988; (c) the plaintiff's criminal convictions were sufficiently serious as to warrant a sentence of four years in prison; (d) the plaintiff was a fraudulent businessman; (e) the plaintiff had behaved disgracefully as the director of a major Australian corporation, Rothwells Bank, by concealing the fact that prior to its collapse in 1988, it was in a precarious financial position; (f) the plaintiff was a man without shame in that, although he was sentenced to a substantial prison term for offences involving serious corporate fraud, he had accepted a position as chairman of a public company, Cabonne Limited which had offered shares to the public; (g) the plaintiff was like the notorious corporate criminal Alan Bond in that both he and Bond had, without shame or contrition over their past criminality, sought to re-establish themselves in positions of trust in the business world; (h) the plaintiff was like the notorious corporate criminal, Alan Bond, in that neither could be trusted in positions of responsibility in publicly listed companies and in business generally; (i) the plaintiff is likely to continue to commit and be convicted of further serious criminal offences involving corporate fraud". 18 The second matter complained of is to said to convey the following imputations by way of true innuendos: "9.1 The plaintiff had failed disgracefully to meet his legal obligations as an officer of Rothwells Bank in that he conspired to defraud that company and knowingly allowed the publication of false annual reports. Particulars of Extrinsic Facts (i) Section 232 of the Corporations Law obliges an officer of a corporation at all times to act honestly in the exercise of his or her powers and the discharge of the duties of his or her office; (ii) An officer of a company has a fiduciary duty to act honestly in the discharge of his or her duties of office. 9.2 That the plaintiff had knowingly breached the Corporations Law by accepting positions of management of corporations within 5 years of being released from prison; … Particulars of Extrinsic Facts (i) By s 206B(1) of the Corporations Law, a person becomes disqualified from managing corporations if that person is convicted of an indictable offence that: (a) concerns the making, or participating in making, of decisions that affect the whole or substantial part of the business of a corporation; (b) concerns an act that has the capacity to affect significantly the corporations financial standing; or Is convicted of an offence that: (c) is a contravention of the Corporations Law and is punishable by imprisonment for a period greater than 12 months; or (d) involves dishonesty and is punishable by imprisonment for at least 3 months; (ii) Pursuant to s 206B(2) of the Corporations Law, the convicted person is disqualified from managing corporations for a period of 5 years from the day on which the person is released from prison. (iii) The plaintiff is the Executive Chairman of Cabonne Limited, a corporation for the purpose of the Corporations Law and the Cabonne Limited Group of Companies, and was elected to such position on the 15th day of March 1996. Cabonne Limited was listed on the Australian Stock Exchange on the 31st day of May 1999. (iv) The plaintiff is the non-Executive Chairman of St. Malo Australia limited, a corporation for the purposes of the Corporations Law, and was elected to such position on the 7th day of December 1993. (v) The plaintiff is the non-Executive Chairman of Australian Innovation Ltd, a company listed on the Australian Stock Exchange, having been appointed to such position on the 4th day of July 1997. (vi) The plaintiff was appointed a Director of First Pacific Davies (Australia) Pty Limited on the 17th day of February 1993. First Pacific Davies (Australia) Pty Limited is a company providing integrated property services". 19 To revert to the structure of the pleading problem. In my view, there is no problem. Once the matter of terminology is clarified and the more usual form of pleading adopted (that is, by omitting the subsidiary part of paragraph 5, for example), the pleading will conform with practice and principle as elucidated in Burrows v Knightley. There will be no undue difficulty for the jury in determining the issues of fact to be left to it in relation to pleaded imputations found to be capable of being carried by each matter complained of. Nor, in my view, will there be any difficulty for the trial judge in the assessment of damages if that point is reached; the risk of "doubling up" clearly can be obviated by the application of general principle in terms of awarding a sum that properly reflects an amount that fairly compensates by way of damages the plaintiff for the injury done to him. 20 The defendant has acknowledged the objective intention component in relation to the juxtaposition of the two articles that constitute the second matter complained of. It is to be borne in mind that the "flash as a rat" article which commences on page 1 and concludes on page 4, at that latter page, contains a reference to Mr Peter Lucas and, furthermore, a reference that, in effect, reiterates the substance of remarks attributed to him and reported in the first matter complained of. 21 Thus, the defendant's first prong of attack fails. 22 I turn therefor to the imputations pleaded in respect of what is now to be understood as the two matters complained of to deal with issues of law raised by consent pursuant to SCR Pt 31 r 2 and other matters. 23 As to the first matter complained of: no complaint is made in respect of imputations 6(a) and (b) by themselves. They shall go to the jury on the basis that they are capable of arising and capable of being defamatory. 24 As to imputation 6(c), in my respectful view the objection of the defendant is spurious insofar as it suggested that this imputation is bad in form as attributing no act or condition to the plaintiff. It clearly does and equally clearly it probably could be reworded to the effect "that the plaintiff's criminal conduct was sufficiently serious to warrant a sentence of four years in prison". 25 As to imputation 6(d) it is contended that this does not differ in substance from imputation (a). I agree. The extent of fraudulent conduct of the plaintiff is set out in relation to the particular matters of which he was convicted and this is clear from the matter complained of. The defendant, applying that test stated by Hunt J in Singleton v John Fairfax & Sons Pty Limited (unreported, 20 February 1980) (see also Jackson v John Fairfax & Sons Pty Limited (1981) 1 NSWLR 36 at 40-41) would be required to prove no more than the truth of imputations (a) and (b). The conduct making the plaintiff a fraudulent businessman is the conduct that lead to his convictions. 26 As to imputation 6(e); it is submitted that this does not differ in substance from imputation (b). I agree. Imputation (e) is really a rhetorical flourish and, in my view, it adds nothing to the substance of the first three imputations which, without questioning their meaning in any sense, contain all the elements of "disgrace" and ignominy attendant on being convicted of such offences. Imputations (d) and (e) will be struck out. 27 As to imputation 6(f): I am of the view that this imputation is capable, just capable, of arising from the matter complained of taking into account the headline and the two paragraphs in the second column, the first commencing "now released…" the second commencing "Mr Lucas is now …". I have no difficulty in understanding what is meant by "without shame". I do not perceive any basis for the defendant's difficulty in that regard. 28 The imputations pleaded in paragraph 7 are pleaded as true innuendos. 29 In respect of imputation 7.1; I find that the matter complained of is incapable, taking into account the particulars subscribed, of giving rise to it. The article is silent as to the objective of the conspiracy, that is, whether it is to defraud the company shareholders, creditors or what. Imputation 7.1 will not go to the jury. The plaintiff will have leave to amend. 30 As to imputation 7.2 and 7.3 I am not persuaded by the submissions for the defendant that these are incapable of arising taking into account the extrinsic facts particularised (assuming that those facts properly cite the relevant legal provisions). Imputation 7.2 is taken to have excluded the final three words in the pleading. 31 Imputation 7.4 has been abandoned. 32 As to the second matter complained of, for the reasons expressed in relation to the first matter complained of, imputations 8(d) and (e) will be struck out; 8(a), (b), (c) and (f) are found to be capable of arising, capable of being defamatory and will go to the jury. 33 It is imputations 8(g), (h) and (i) that warrant attention insofar as it can be understood that it is these three imputations that are said to arise from the composite matter complained of made up of both the articles. It is contended by the defendant that these imputations manifestly are incapable of arising. I simply disagree with the proposition. The whole tenor of the matter complained of made up of those articles is capable, on a reasonable basis, of inducing in the mind of the ordinary reasonable reader meanings to the effect of imputations 8(g), (h) and (i). It is to be noted that in respect of (g) and (h) the plaintiff has chosen to assert that "like … Alan Bond" "… both he and Bond," or words to that effect. Whether, pursuant to the leave to amend the plaintiff wishes to consider recasting the imputations to make them an imputation of the plaintiff as opposed to an imputation capable of being understood as an imputation of the plaintiff and Bond, will be a matter for him. 34 Imputations 8(g), (h) and (i) I find to be capable of being carried by the second matter complained of and capable of being defamatory and will go to the jury. 35 The reason stated in respect of the first matter complained of by way of true innuendo 9.1 is capable of arising. 36 Imputation 9.2 will go to the jury. Imputation 9.3 has been abandoned and it is to be noted that what is described as 9.4 is not an imputation at all. Neither should appear in the amended pleading. 37 The final area of complaint on the part of the defendant relates to the five particulars of aggravated damages appended to the Statement of Claim. 38 Whilst it is not necessary that these be finalised at this stage, the objection taken to (a) is really a spurious one. It is to be understood that it is the plaintiff's knowledge of the falsity of the imputations (notwithstanding the omission of some words) that is relied upon. 39 Particulars (b), (c), (d) and (e) will no doubt receive further consideration in terms of particularisation of facts and matters relied upon by the plaintiff pointing to the conduct by the defendant in terms of its servants and agents and the requisite quality of that conduct as entitling him to an award of aggravated damages. I propose to make no order with regard to these particulars as I am confident that either upon the filing an Amended Statement of Claim such particulars will be re-cast or that in due course proper particulars will be provided. The plaintiff can be taken to be on notice as to the grounds of the defendant's present complaint. 40 In Burrows v Knightley at 654.B Hunt J took the opportunity to remark as follows: "In Polly Peck (Holdings) Plc v Trelford [1986] QB 1000 at 1020, O'Connor LJ somewhat despairingly described pleadings in libel actions as having become as artificial as a minuet. If the point taken by the defendants in the present matters is correct, such pleadings have also become as complicated as a quadrille. I am reminded somewhat of Charles Dickens' description of lawyers as "tripping one another upon precedents, groping knee-deep in technicalities [and making] mountains of costly nonsense": Bleak House (Ch 1)". 41 I respectfully adopt his Honour's observations in relation to this matter. 42 It was made clear during the course of submissions that the nub of the plaintiff's complaint is that he is not the Peter Lucas referred to in the articles. In the course of argument that which brought about this situation was described (T10.30) by Mr McClintock S.C. as "conspiracy or stuff-up". Further in the course of argument when the question, as-it-were, of this matter proceeding to a full trial was raised, it was remarked by counsel for the defendant that "very often when looked at from the outside litigation appears like a duck. It is calmly sitting on the surface or moving on the surface and all activities are happening unseen (that is, the duck's webbed foot are moving frantically)". 43 If that be the case, here "the beneath the surface footwork" should have all the finesse, skill and dedication of Riverdance or TapDogs to ensure that the situation does not arise whereby a complete lack of reason and common sense on both sides brings it about that a trial in fact will have to take place. 44 The formal orders are:

Lucas v John Fairfax Publications Pty Limited

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Judgment (12 paragraphs)

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