Purcell & Anor v Cruising Yacht Club of Australia Pty Ltd & Ors

Supreme Court of NSW|2002-06-11|Before: Levine J

CITATION : Purcell & Anor v Cruising Yacht Club of Australia Pty Ltd & Ors [2002] NSWSC 557 CURRENT JURISDICTION: Common Law FILE NUMBER(S) : SC 20473 of 2000 HEARING DATE(S) : 11 June 2002 JUDGMENT DATE : 25 June 2002

RICHARD GORDON PURCELL (First Plaintiff)

ALLURE MARKETING PTY LTD (Second Plaintiff )

JOHANNE CHRISTIAN HUGO VAN KRETSCHMAR (Second Defendant)

PETER ALLAM BUSH (Third Defendant) JUDGMENT OF : Levine J

T Tobin QC P Gray COUNSEL : (First and Second Plaintiffs)

T Blackburn (First, Second and Third Defendants) Berne, Murray & Tout (First and Second Plaintiffs) SOLICITORS : Corrs Chambers Westgarth (First, Second and Third Defendants) CATCHWORDS : Defamation - contextual truth - defendant's imputations bad in form - incapable of being carried LEGISLATION CITED : Defamation Act 1974 Allen v John Fairfax and Sons Pty Ltd (NSWSC, unreported, 2 December 1988) Hepburn v TCN Channel Nine (1984) 1 NSWLR 386 CASES CITED : Jackson v John Fairfax and Sons Pty Ltd (1981) 1 NSWLR 36 John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434 McBride v Australian Broadcasting Corporation [2000] NSWSC 747 Waterhouse & Anor v Hickie (1995) Aust Torts Rep 81-347 DECISION : See paragraph 16

6 - djl:1 [2002] NSWSC 557 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION list

20473 OF 2000 RICHARD GORDON PURCELL (First Plaintiff)

ALLURE MARKETING PTY LTD (Second Plaintiff )

cruising yacht club of Australia pty ltd (First Defendant)

JOHANNE CHRISTIAN HUGO VAN KRETSCHMAR (Second Defendant)

JUDGMENT (Defamation - contextual truth - defendant's imputations bad in form - incapable of being carried) 1 At the conclusion of the s7A jury trial on 17October 2001, the jury found that the relevant publication carried the following defamatory imputation: "Having interviewed the first plaintiff about his failure to stop when the crew of a disabled yacht let off flares to attract his attention, the committee investigating the 1998 Sydney to Hobart Yacht Race suspected on reasonable grounds that the first plaintiff was guilty of gross misconduct in that he failed to stop and render assistance to the crew of that yacht." 2 By paragraph 11 of the Amended Defence filed on 14 March 2002 the defendant pursuant to s 16 of the Defamation Act 1974 pleads the defence of contextual truth specifying two contextual imputations; "(a) there were reasonable grounds to suspect that the First Plaintiff was guilty of gross misconduct in that he failed to stop and render assistance to the crew of a disabled yacht in the course of the 1998 Sydney to Hobart Yacht Race; (b) in the light of an interview with the First Plaintiff and other relevant matters, there were reasonable grounds for suspecting that the First Plaintiff was guilty of gross misconduct in that he failed to stop and render assistance to the crew of a disabled yacht in the course of the 1998 Sydney to Hobart Yacht Race". 3 Paragraphs 12 to 16 of the Amended Defence plead interstate defences. 4 By Notice of Motion filed on 10 May of this year the plaintiffs move to have the defence of contextual truth (paragraph 11) and the interstate defences (paragraphs 12-16) struck out. 5 The second order sought can easily be dealt with. It is the expressly stated position of the plaintiffs that there is no interstate component in their case. There is no reliance upon interstate publication or republication on the question of liability and, as was expressly stated during the course of submissions, no reliance is placed in relation to damages on any publication or republication outside of New South Wales. In these circumstances paragraphs 12 to 16 of the defence are otiose and will be struck out. 6 The publication upon which the plaintiffs sued was an oral publication. The evidence of that publication during the 7A jury trial (over which I presided) was a videotape of the relevant press conference of which a transcript was produced. That transcript is appended to these reasons. 7 The plaintiffs seek to have struck out the defence of contextual truth. The defendant is not justifying the imputation found by the jury. 8 The plaintiffs attack the defence on about every basis in the steps involved in the formulation of a contextual truth defence. In McBride v Australian Broadcasting Corporation [2000] NSWSC 747 (4 August 2000) I reviewed the authorities in relation to those "steps". I do not propose to repeat what I there said. The most significant development in the law in relation to s16 is the decision of the Court of Appeal in John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434 especially in relation to s16 (2)(c) and the part particulars of truth play in the determination of whether the s16 (2)(c) "effect" reasonably can be found (see Spigelman CJ paragraphs [4], [5] and [6]). 9 In the instant case the plaintiffs must succeed on at least two of the threshold considerations. The first is the form of the contextual imputations each of which in my view lacks the requisite precision. The imputation (cause of action) to which the purported plea under s 16 has been raised as a defence is that found by the jury which is clear in its terms. The jury found that the matter complained of meant that the plaintiff actually was suspected by a named body of being guilty of gross misconduct. The two contextual imputations advanced by the defendants, as counsel for the plaintiffs submitted, "backtrack" from the actual meaning and do so by attributing to the matter complained of meanings more abstract and more vague and lesser in their import. The defect in form arises in relation to (a) and (b) by the failure to identify who or what it was that had the reasonable grounds or what is said to provide the basis of suspicion. The use of such expressions as "in the light of" and especially "other relevant matters" in my view is the impermissible employment of what are described as "weasel" words. They are so vague as to be embarrassing and add nothing to what are in effect meanings "watered down" from that found to have been carried and have no substance independent of that captured by the plaintiff's imputations. 10 I am not persuaded that either of these two meanings is good in form. Nor am I persuaded that either or both is or are reasonably capable of being carried by the matter complained of at the same time and in addition to the found imputation. If they are capable of being carried at all they are so carried in subtraction from the imputation pleaded by the plaintiff and found by the jury. 11 The "steps" to which I have referred to above are well known and are set out in Jackson v John Fairfax and Sons Pty Ltd (1981) 1 NSWLR 36 at 39G-40, Hepburn v TCN Channel Nine (1984) 1 NSWLR 386 at 400; Allen v John Fairfax and Sons Pty Ltd (NSWSC, unreported, 2 December 1988 pp8-9); Waterhouse & Anor v Hickie (1995) Aust Torts Rep 81-347 at 62,488. 12 Those steps there referred to in each case commence with propositions about the defendant's contextual imputation vis-à-vis the plaintiff's imputation. One of the antecedent "steps" is the determination of whether the publication on which the plaintiff has sued is reasonably capable of carrying the imputation upon which the defendant relies. Another antecedent "step" is the question of the form of that imputation. (There is of course an additional antecedent "step" which does not relate to the defendant's contextual imputation but rather to the plaintiff's imputation. That is the step provided for in s 16(2)(a) - the plaintiffs imputation must relate to a matter of public interest or be published under qualified privilege). 13 I have found each imputation to be bad in form and to make it quite clear I find as a matter of law that the matter complained of is incapable of carrying meanings to the purport of the proposed contextual imputations, on a reasonable basis, in addition to the meaning found by the jury which candidly must be characterised as capturing the essential sting of the publication. Further of course when one considers the essence of each of the contextual imputations sought to be relied upon by the defendant it has to be observed that each has within it the essence of the plaintiff's imputation that on reasonable grounds the plaintiff was suspected of being guilty of gross misconduct. 14 There is no need for me to consider the observations of the Chief Justice in Blake referred to above. That point namely the s16 (2)(c) "effect", is simply not here reached. What the Court of Appeal said in Blake is of course binding on me. I will merely observe that it is my respectful view that to determine whether the contextual imputation (carried and proper in form) has the effect as provided for by s16 (2)(c), one does no more than "assume" that that contextual imputation or, if more than one, those contextual imputations are "substantially true". This is a question of law to be determined on that assumption. In my view it is inappropriate to determine that question by reference to what in reality could be the shifting sands of particulars of a case to be proved (which may or may not make good that assumption). In this respect I prefer the views of Hodgson JA at paragraph [61]: that is, when one considers the true nature of the defence of contextual truth it ends up being a matter of weighing imputation against imputation. 15 Accordingly I strike out paragraph 11 of the Amended Defence. 16 The formal orders are:

Paragraph 11 of the Amended Defence is struck out.
Paragraphs 12 to 16 of the Amended Defence are struck out.
The defendants are to pay the plaintiff's costs.
The matter is stood over to the Registrar's Defamation Directions List on 12 July 2002.

Transcript of Videotape of press conference at CYCA on 1 June 1999 - handing down the Report of the 1998 Sydney Hobart Race Review Committee May 1999

Peter Bush: The Committee investigated a report from the Sword of Orion that a yacht
failed to respond to distress signals. The Committee has passed full details of this incident on to
the New South Wales Coroner and the Commodore of the Cruising Yacht Club for further
investigation. One yacht, Business Post Naiad, did not meet eligibility requirements. The CYCA
has referred this matter to the New South Wales State Coroner. And finally, the manner of death
of the six sailors that lost their lives will be determined by the New South Wales State Coroner in
a Coronial inquest on a date to be announced. I'd now like to move ah, to talk about the
recommendations. The recommendations were developed by the Committee um in two sections.
The first section deals with actions that can be taken to have yachts appraised of conditions and
their ability to meet them and the second details that actions that can better prepare yachts and
crews to deal with extreme conditions. The recommendations have been drafted by the
Committee as on the basis of the evidence presented and were classified as compulsory or
recommended. It is my intention now to take you through the summary of the compulsory recommendations only at this stage.
First of all in the first section dealing with weather the CYCA needs to develop a weather strategy which includes it working with its nominated
forecaster to do a number of things. To generate close to real-time forecasting to educate yachtsmen on
forecasting and interpretation to provide easily understood or layman forecasts and to ah to look
at developing assets in the Eastern Bass Strait including attempting to access weather
information of the Bass Strait oil rigs. The CYCA must provide yachts with a practical
interpretation of the weather forecast, and this should include um a provision for a member of its
chosen forecaster to be an on-going member of the race management team. In winds of 40 knots
true or more yachts will be required to report wind strengths and directions and wave heights at
the radio skeds if asked to do so by the radio relay vessel. The second major recommendation in um
Section A is that skippers must be encouraged to um to consider their particular circumstances
and whether their yacht, their equipment and their crew are in satisfactory condition to enter and
cross Bass Strait and complete the race to Hobart. To achieve this the Sailing Instructions should
prescribe a line of latitude at 37.15 degrees south which is Green Cape just a little bit south of Eden.
Ah as yachts cross this line, it will be compulsory for skippers to make a declaration to the Race
Committee confirming that their HF radio is in working order, that their life rafts are on board,
that their yacht and crew are in a satisfactory condition to continue and that their engine and
batteries are fully operational. Failure to report or to meet any one of these stipulated
requirements should result in the yacht's disqualification. On Section B on eligibility the first
issue is stability. All yachts should conform with IMS stability recommendations for
category one of a 115 degrees for all classes be it IMS, CHS or PHS, with no further
grandfathering of boats ah, that were previously excepted. On crew experience, the number
of experienced crew should be increased to 50% of the total crew as per the Racing Rules of
Sailing. It's currently required by ah the Club that only three members of a crew ah have the high
level of experience. Um each application for entry must be reviewed by a subcommittee of the
Cruising Yacht Club um and be approved. An age limit of 18 years should be set and no crew
under that age be eligible for the Sydney Hobart Yacht Race. Crew experience, education and
training. The CYCA should conduct training seminars prior to the Sydney Hobart Yacht Race on
weather forecasting interpretation, life raft deployment and survival techniques, search and
rescue techniques including flight patterns, communications and rescue techniques, man
overboard strategies, heavy weather sailing techniques and strategies. At least 30% of their crew
have attended these to meet eligibility requirements. In addition, the CYCA should provide as
appendix to the Sailing Instructions terms of the yacht's safety equipment safety harnesses um
(inaudible) of seven years from date of manufacture and each yacht should be required (inaudible) the AYF
should be requested to review the requirements of stowage of life rafts, and a review should
be (inaudible) developed for on-deck stowage. The AYF should also be requested to review the (inaudible) above should
be of a highly visible nature on all parts where it will assist detection. The diameter of drogues
employed in lifeboats secured more effectively. On other safety equipment um open devices or
life jackets should not be accepted in future Sydney Hobarts. The yachts primary EPIRB that's an
emergency position (inaudible) identifies the yacht by name in addition one EPIRB ah is to be
carried per life raft on board which may be packed on the life raft or carried on the boat and a
protocol for the use of EPIRBs needs to be developed in conjunction with AMSA. In terms of
personal safe (inaudible) the Cruising Yacht Club should brief the manufacturers of PFDs um in an
effort to develop an Australian Standard PFD1 that enables the crew to move (inaudible) need to wear safety
harnesses. On yacht's safety inspections yachts will be required or should be required to deploy
their storm jib and tri-sail for recognition and (inaudible). On yacht construction the detail ah sorry
the design (inaudible) should be referred to the international technical committee of the ORC for review.
Communications. The Committee has recommended a number of changes to race
communications including 24 hours listening watch on VHF and all yachts will be required to
include a waterproof hand-held VHF as part of their yacht's safety equipment. Communications
procedures. The CYCA and the Royal Yacht Club of Tasmania must develop a robust system for
responding to enquiries from relatives and friends of crews and other interested parties, ah with
up-to-date information on the position of yachts and crews. I'd now like to ah hand back to ah the
Commodore.

Commodore: Thanks Peter. The CYC stands behind this report as a frank and honest
objective practical analysis of those areas where problems occurred and what can be
sensibly done to minimise the risk of reoccurrence. We have openly, professionally and
diligently identified every aspect of the race where there is opportunity to do to do better and
identified practical changes to improve safety. The CYC is committed to ensuring that all
the recommendations made by the Review Committee and detailed in their report are
considered fully that they are referred to third parties and authorities where appropriate.
That they are implemented to the extent that we are able to do so and that they are
administered rigorously. There are two issues that remain open-ended at this stage.
They are the Business Post Naiad's stability non-compliance issue and the Sword of
Orion/Margaret Rintoul issue. Both matters, as Peter has mentioned, have been brought to the
attention of the Coroner. In the case of the Business Post Naiad there is nothing more that the
Club can do at this stage other than what has been incorporated by way of changes to the
administration of the event to ensure that all boats meet the stated eligibility requirements in
future. We anticipate that the Coroner will determine whether there is a case to answer by any
party with respect to this matter. The Sword of Orion/Margaret Rintoul incident has been
referred to the Sydney to Hobart Yacht Race Protest Committee for investigation under Rule 69
of the Racing Rules of Sailing. We believe this to be the most responsible course of action
available to the CYC. Whilst it would be unreasonable to expect that the changes recommended
in our report, or anything else for that matter, could ensure the ultimate safety of every
participant in future Sydney Hobart races, there is no doubt that the safety of all competitors will
be improved as a result. Boat owners, skippers, crews and the CYCA as race organiser will all
need to embrace the changes that have been recommended. Many changes will be made
mandatory by the CYCA and prescribed as such in a Notice of Race and Sailing Instructions.
Other changes will be introduced as recommendations to be adopted by boat owners and crews.
In fact most of the changes have already been implemented and in some cases standards set by
The Review Committee have been exceeded. At this time the Notice of Race and Sailing
Instructions for this year's event are already in final draft form, and all of the new requirements
that skippers and crews must comply with are included. Development of training seminar
curriculums is well advanced with the first of these to be held prior to our Sydney
Gold Coast race in August. The Australian Navy, the Bureau of Meteorology, and the Australian
Maritime Safety Authority are providing invaluable assistance in this regard. The CYCA's race
management manual and crisis management plan is in early draft form and will be completed by
September, and a detailed action plan with timelines and individual responsibilities identified
has been prepared to manage the implementation of remaining items which require more
detailed analysis or input by third parties. Overall I think the Hobart Report finds that the
race organisation, safety requirements, eligibility requirements and the attitudes of skippers
and crews is not fundamentally flawed in any area. Our report deliberately does not seek to
attribute blame to any party. The CYCA does not believe that it is a that is its role to attribute blame
nor that it is productive to do so. The CYCA has conducted this event for 53 years prior to
1998 without a serious incident of the scale experienced last year. The standards under
which the Race is run have developed enormously over the years that it has been run by the
CYCA. Communications, safety equipment, and weather information are all indisputably
higher and more sophisticated than in earlier years. The report clearly indicates that the form
or construction of modern yachts is at least the equal of boats of earlier years; in many
aspects they are superior. Crew experience is also identified as being of an exceptionally
high standard, with more than 60% of all crews having competed in more than two Hobart
races and having more than six years open racing experience. In fact, more than 20 percent of
crews have competed in more than ten Hobart races with offshore sailing experience of more
than 15 years. What then went wrong? Quite simply in my view part of the fleet sailed into
unexpectedly extreme conditions. The most extreme conditions were very localised. Some
yachts encountered those conditions while still heading to Hobart; others encountered them
after having turned back. Many yachts encountered significantly less extreme conditions
than others, and either completed or retired from the race without incident. Some sailed
through the most extreme conditions, had fate on their side, and completed or retired from the
race without incident. Others were not so fortunate. The Bureau of Meteorology by their
own assessment did a reasonable job and have demonstrated that the conditions encountered
fell within a statistical range of conditions forecast. Clearly also, however, the Bureau's
forecasts were misleading or misinterpreted by competitors and organisers because they failed
to give a clear impression of the extreme conditions to be excepted expected. This has partly to do
with the meteorological language of the Bureau, and partly to do with the sailors' lack of
understanding of that meteorological language. Also, as Peter has mentioned, the Bureau and
the CYCA is constrained by the lack of meteorological assets in the race area. Clearly there
is room for improvement by all parties in this regard. And all of these areas are addressed in
the report recommendations. There is no simple answer to preventing this from ever
happening again. I believe, however, that the experiences of 1998 will be recalled forever by
all future competitors as a stark reminder of the unpredictable and awesome force of the sea.
It will lead to greater caution and discretion being exercised by all those involved in the
event. The changes recommended in our report are all about ensuring that greater caution is
exercised. Personally I think the report is harsher on the CYCA than any other stake-holder
in the event, notwithstanding that it is our own report. I have no argument with this because
it was dealt with in a constructive manner. The report does not identify the Club as having
been lacking in any significant areas, but does identify many areas where with the benefit of
hindsight and the experiences of 1998, significant improvements can be made. The board of
the CYC is fully committed to implementing these identified areas of improvement and
aspires to taking the standards of our racing organisation to the next possible highest level.
Thank you.

Question: Can we talk through the process of the stability test and how, where, you
Detected that, er, that was open to (inaudible) race (inaudible).

Peter Bush: We've determined that we won't discuss the Business Post Naiad issue with
you any further, um, it is a matter that has been referred to the Coroner and that is really
actually all that we are prepared to say about Business Post.

Question: Just another matter that has been referred to the Coroner. You speak about
Rule 69 and the Rules of Racing and the Sword of Orion. Can you just outline what that Rule
is that may have possibly been breached.

Peter Bush: I might refer that to the Coron.. Commodore, if I may?
Commodore: Rule 69 of the Racing Rules deals with an area called Gross Misconduct
under the Racing Rules. It is historically the rule that has been used in the administration of
our sport for resolving, among other things, allegations of not rendering assistance to yachts
that are in distress.

Question: Can you put that in a context of the culture of yacht racing? What is it within
that, the obligation to render assistance?

Commodore: The rules of yacht racing and maritime law are quite specific in terms of
the obligations to render whatever assistance they can safely provide to a yacht that is in
distress. Not dissimilar at all to not stopping after a car accident.

Question: So essentially we are talking about an allegation of ignoring a Mayday call.

Commodore: Um, no, I don't' think that's actually correct.

Question: Can you tell us what the allegation is.

Commodore: Um not even sure whether it's an allegation as such. There is a report or there are
reports that have been received through interviews with um both Sword of Orion and Margaret Rintoul,
that indicate that at some stage Sword of Orion sighted a yacht that passed fairly close by.
That they let off various signalling flares to try and attract their attention. Our understanding is
that at that stage they were not in radio communication. They were not sure whether the other
boat had actually seen their flares or not. Conditions were atrocious. Visibility was very
poor and the Margaret Rintoul did not stop or acknowledge that those signals had been seen.

Question: So for this matter to have gone this far, you must have quite substantial
evidence that may perhaps a wrongdoing has happened.

Commodore: There is sufficient evidence there for us to refer it to the Protest Committee to
consider under that rule and determine more fully whether there is in fact a basis to the
evidence or not.

Question: Hugo if the owner of Margaret Rintoul II is found guilty of gross misconduct, what
might be the consequences?

Commodore: Again I believe that is up to the under the rules of racing, it is up to the Protest Committee
to assign a penalty with respect to that. Historically, where similar situations have been found
by Protest Committees, it has led to a ban from competing in yachting events for a period of
time.

Question: Could it potentially be that in light of the Coroner's Inquiry?

Commodore: Don't know the answer to that. [numerous inaudible voices]
Question: The Protest Committee which will hear this protest - when is it going to
happen?

Commodore: The Protest Committee, it was initially referred to the Protest Committee that
was in place for the Sydney-Hobart race, part of that Protest Committee comprised internationally
accredited jurors from overseas who have indicated that they were unavailable to attend, so a
the Protest Committee now comprises some of the original members of the Protest Committee and others, but all the members of the
Protest Committee presently are international jurors (accredited) by the AYF.

Question: Can you put it in the context of the conditions that the two boats were in at the
time? One was, I understand that one was coming back and the other was still going forward.
But the weather conditions as well.

Commodore: Sword of Orion at the time had lost its mast and sometime earlier, a
crew member over the side and was essentially disabled. The other yacht was still sailing and
headed in the direction of Hobart.

Question: And the weather conditions at that particular time?

Commodore: At the peak of the storm. Atrocious.

Question: So would it have been safe and would it have been advisable to go round at a
time like that to try and get close to a boat that was in distress?

Commodore: I would be speculating in terms of what the conditions where on Margaret
Rintoul or the other boat as to whether that was an option that was available or in fact a safe or
prudent option that was available to them.

[Numerous inaudible voices. There was a subsequent question from Bob Ross on when the protest be heard then?]

Commodore: I believe the protest has been set down for Wednesday 8 June. Next
Wednesday.

Question: Has Margaret Rintoul been given an opportunity of putting a defence?

Commodore: That is the purpose of the Protest Committee, to give both parties the
opportunity to present evidence formally before the Protest Committee.

Question: Has Margaret Rintoul made a statement so far? (inaudible)

Commodore: They were involved in an interview with members of the Race Committee.
Yes.

Question: And what have they said about their actions on the day?

Commodore: I don't believe it's appropriate for me to comment on that, in an offhand
manner, without seeing the actual documentation as to what
was said.

Question: The owner of Margaret Rintoul II has admitted that he did speak at length with
officials after the event when he got to Hobart. Did he speak to you? And did he
confirm to anyone that he did see the yacht, and did he explain why he may not have turned
back?

Commodore: Yes to some of the questions, no to others. Yes, he did speak to me briefly at
one stage in Hobart. He had mentioned that there was some agitation with respect to the issue
and had asked me to endeavour to mediate with respect to it. Which I did, and I put the two parties
in contact with each other, and I believe that at that stage they resolved to let the matter
take their proper course.

Question: Did he admit to you that he did see the yacht, and did he explain to you why
they didn't turn back?

Commodore: No, I didn't have the discussion with him at that time.

Question: If there is a ban, is that only in Australian waters, or also in international
waters?

Commodore: I believe that the International Sailing Federation has the power to make that
an internationally imposed ban.

Question: Has that been the case historically?

Last Modified: 06/25/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

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