98 ER 969
Boulas v Angelopoulos (1991) 5 BPR 11,477
Briginshaw v Briginshaw (1938) 60 CLR 336
[1993] HCA 31
Coles Myer Limited v Webster
Coles Myer Limited v Thompson [2009] NSWCA 299
Cosco v Hutley (No 2) [2020] NSWSC 893
Craig v Williams [2019] NZSC 38
[2005] HCA 52
Fraser v Holmes (2009) 253 ALR 538
Gayle v Fairfax Media Publications Pty Ltd (No 2) Gayle v The Age Company Pty Ltd (No 2)
Source
Original judgment source is linked above.
Catchwords
98 ER 969
Boulas v Angelopoulos (1991) 5 BPR 11,477
Briginshaw v Briginshaw (1938) 60 CLR 336[1993] HCA 31
Coles Myer Limited v WebsterColes Myer Limited v Thompson [2009] NSWCA 299
Cosco v Hutley (No 2) [2020] NSWSC 893
Craig v Williams [2019] NZSC 38[2005] HCA 52
Fraser v Holmes (2009) 253 ALR 538
Gayle v Fairfax Media Publications Pty Ltd (No 2) Gayle v The Age Company Pty Ltd (No 2)[1959] HCA 8
Kalil v Eppinga [2023] NSWDC 107
KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig v Bowden (2020) 101 NSWLR 729[2020] NSWCA 28
Lassanah v State of New South Wales (No. 3) [2010] NSWDC 241
Lesses v Maras (2017) 128 SASR 292Massoud v Fox Sports Australia Pty Ltd (2022) 109 NSWLR 468[2022] FCA 893
Pamplin v Express Newspapers [1988] 1 WLR 116
Papaconstuntinos v Holmes a Court (2012) 249 CLR 534[2002] HCA 57
Roberts-Smith v Fairfax Media Publications Pty Limited (No 41) [2023] FCA 555
Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327[2016] EMLR 12
Stocker v Stocker [2020] AC 593[2019] UKSC 17
Stoltenberg v Bolton [2020] NSWCA 45(2020) 380 ALR 145
Toben v Milne [2014] NSWCA 200
Toogood v Spyring (1834) 1 Cr M & R 181149 ER 1044
Trkulja v Google LLC (2018) 263 CLR 149
Judgment (60 paragraphs)
[1]
ralia Pty Ltd (No 2) [2018] NSWSC 1838
Gough v Squillacioti [2021] NSWDC 411
Goyan v Motyka [2008] NSWCA 28
Henderson v London Borough of Hackney [2010] EWHC 1651 (QB)
Holmes a Court v Papaconstuntinos [2011] NSWCA 59; Aust Torts Reports 82-081
Holt v TCN Channel Nine Pty Ltd (2014) 86 NSWLR 96
Horrocks v Lowe [1975] AC 135
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Kalil v Eppinga [2023] NSWDC 107
KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig v Bowden (2020) 101 NSWLR 729; [2020] NSWCA 28
Lassanah v State of New South Wales (No. 3) [2010] NSWDC 241
Lesses v Maras (2017) 128 SASR 292; [2017] SASCFC 48
Lindholdt v Hyer [2008] NSWCA 264
Lloyd-Jones v Allen [2012] NSWCA 230
Lorbek v King [2023] VSCA 111
Machado & Anor v Underwood & Anor [2016] SASCFC 65
Massoud v Nationwide News Pty Ltd; Massoud v Fox Sports Australia Pty Ltd (2022) 109 NSWLR 468; [2022] NSWCA 150
Moit v Bristow [2005] NSWCA 322
Mowlds v Fergusson (1939) 40 SR (NSW) 311
Palmer v McGowan (No 5) (2022) 404 ALR 621; [2022] FCA 893
Pamplin v Express Newspapers [1988] 1 WLR 116
Papaconstuntinos v Holmes a Court (2012) 249 CLR 534; [2012] HCA 53
Pavlovic v Karzon [2023] QCA 37
Payne v Parker [1976] 1 NSWLR 191
Prager v Times Newspapers Ltd [1988] 1 WLR 77
Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57
Roberts-Smith v Fairfax Media Publications Pty Limited (No 41) [2023] FCA 555
Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327; [2003] HCA 52
Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496
Sim v Stretch [1936] 2 All ER 1237
Singleton v John Fairfax & Sons Ltd (Supreme Court (NSW), Hunt J, 20 February 1980, unrep)
Slater v Ecosol Pty Ltd [2023] SASC 99
Sobrinho v Impresa Publishing SA [2016] EWHC 66 (QB); [2016] EMLR 12
Stocker v Stocker [2020] AC 593; [2019] UKSC 17
Stoltenberg v Bolton [2020] NSWCA 45; (2020) 380 ALR 145
Toben v Milne [2014] NSWCA 200
Toogood v Spyring (1834) 1 Cr M & R 181; 149 ER 1044
Trkulja v Google LLC (2018) 263 CLR 149; [2018] HCA 25
Trkulja v Markovic [2015] VSCA 298
Xuan v Xu [2022] FCA 508
Texts Cited: Nil
Category: Principal judgment
Parties: Marlene Read (plaintiff)
Mark Gitman (defendant)
Representation: Counsel:
Mr R Rasmussen (plaintiff)
Mr M J Lewis with Ms A Sapienza (defendant)
[2]
Solicitors:
Kalantzis Lawyers (plaintiff)
Clyde & Co (defendant; to 27 July 2023)
McCabes Lawyers (defendant; from 27 July 2023)
File Number(s): 2021/00119359
Publication restriction: Nil
[3]
The proceedings and the parties
The plaintiff brings proceedings for defamation for three emails published by the defendant, who at the time was the managing agent of Strata Plan 2533, a block of twelve units at 25 Cook St., Randwick, to Lot owners, managers and a tenant. Each of the emails was described in their headings as containing information relevant to a forthcoming Annual General Meeting of the owners corporation.
The plaintiff, who had retired in 2006 after a distinguished career as a lecturer in physics, and whose mother owned a unit in this building, had long assisted in maintenance and building issues for her mother and other residents. She was elected to the positions of Chairperson, Secretary and Treasurer of the owners corporation after an Annual General Meeting on 4 March 2019, attended by a majority of the other Lot owners. At the same meeting, she and the Lot owners present had dispensed with the previous strata manager after problems with unlicenced or inappropriately qualified tradesmen. At a meeting on 9 May 2019, the owners corporation appointed MG Strata and BMC Management Pty Ltd to carry out these duties from 7 June 2019, and the defendant was appointed strata manager. During this intervening period, on 28 May 2019, the owners of Lot 2 complained of a leak from Lot 4 and a plumber ("Purple Plumbing") attended, but otherwise all strata matters were managed by the defendant.
At first, relations between the plaintiff and the defendant were cordial. However, the defendant made a series of errors such as paying Purple Plumbing twice, having the corporation's books out of balance, entering into an insurance contract without consultation and putting monies into the wrong accounts. Then, in November 2019, the plaintiff discovered that the builder carrying out work on Lot 7 which had been approved at the 1 August 2019 meeting was in fact an unlicensed handyman who was the husband of the managing agent for Lot 7. The defendant had never checked the builder's licence and insurance position. The relationship between the plaintiff and defendant deteriorated and, prior to the Annual General Meeting on 11 May 2020, the defendant sent three emails to all those persons whose email addresses were in the file as owners or contact persons. Those three emails are the matters complained of.
The imputations pleaded may be generally described as being allegations of lying, making false accusations of criminal conduct against the defendant, and wasteful incompetence in the conduct of her obligations to the owners corporation.
[4]
The issues in the proceedings
The issues for determination are as follows:
Meaning
1. In respect of each of the three matters complained of, and giving them their natural and ordinary meaning, has the plaintiff's pleaded imputations been conveyed as a matter of fact to the ordinary reasonable reader?
2. In respect of each of the three matters complained of, and in so far as the Court finds each of the plaintiff's pleaded imputations are conveyed to the ordinary reasonable reader, has the plaintiff established that those imputations defamatory of the plaintiff?
Publication
1. In so far as the plaintiff has established the element of publication in respect for each of the three matters complained of, what is the extent of publication?
Defences
1. To the extent that the Court finds that the plaintiff's pleaded imputations are conveyed and defamatory of the plaintiff, then:
1. Has the defendant established that the publication of the defamatory matters was made on an occasion of qualified privilege at common law in respect of each of the three matters complained of?
2. Has the defendant established the substantial truth of imputation 4(d), namely: "The plaintiff wastes the resources of the Owners Corporation by engaging in unnecessary email communications with the strata manager, forcing him to expend excessive amounts of time responding to her"?
1. If the Court finds the defendant has established the defence of qualified privilege at common law, has the plaintiff established that the defence ought to be defeated because the publication of the defamatory matter was actuated by express malice?
Damages and Injunction
1. To the extent that the Court finds that the plaintiff is entitled to an award of damages, what is the appropriate quantum having regard to:
1. The "appropriate and rational relationship" required between the harm sustained by the applicant and the amount of damages awarded under s 34 of the Defamation Act 2005 (NSW); and
2. Any mitigating circumstances relied on by the defendant at [11] of the Defence and having regard to s 38 of the Defamation Act.
1. Is the plaintiff also entitled to an injunction in the terms sought at [2] in the prayer for relief in the Further Amended Statement of Claim filed 21 October 2021.
Costs and Interest
1. What is the appropriate order for costs in all the circumstances? (The parties have asked me to defer this finding, as well as the issue of interest).
[5]
The first matter complained of
On or about 29 April 2020, the defendant published of and concerning the plaintiff the words in the form of an email sent to the plaintiff and all owners and managing agents of Lots in Strata Plan 2533 with email addresses.
"Dear Marlene,
Purple Plumbing (your contractor) pocketed the building's money (2nd payment) and has not refunded it for 6 months. It took us many, many emails and phone calls to get it back from him.
I am just wondering how we made a payment in 2019 and we only received it on 04/02/2020, considering that the payment was the EFT. I am also wondering why Westpac (his bank) sent me the attached notification on 04/02/20 (banked the same day, see below form SP 2533 bank account) if the payment was made in 2019. I am also wondering why he charged so much and did not fix the problem, but my plumber Philip Kauter fixed it, all water damages repaired by DJE in all effected units and we claimed it all on insurance with all other damages.
You are right. Everything should be in writing from this point. The agenda is in the mail. I look forward to discuss these matters at the meeting with all owners. I am copying all owners via BCC.
PS Today you emailed me at least 12 times over the issue that could have been clarified in 5 minutes phone call. In fact the issue should have just been discussed at the AGM. It took me 2.5 hours to respond to your emails, search for information, create statements … I do not believe it is a productive way to spend your building resources and my time.
I strongly encourage all owners to attend the online/phone line AGM (the notice is forthcoming this afternoon)."
The imputations pleaded are as follows:
1. The plaintiff is incompetent as Chair of the Owners Corporation, in that she engaged a plumbing contractor on behalf of the Owners Corporation who overcharged the corporation, lied to the strata manager about when he had refunded money paid to him by the Owners Corporation, and failed to provide the services that he had been engaged to provide.
2. The plaintiff lied about moneys being refunded to the Owners Corporation.
3. The plaintiff carelessly and needlessly spent the Owners Corporation's money.
4. The plaintiff wastes the resources of the Owners Corporation by engaging in unnecessary email communication with the strata manager, forcing him to expend excessive amounts of time responding to her.
[6]
The second matter complained of
On or about 7 May 2020 the defendant published of and concerning the plaintiff the words in the form of an email sent to the plaintiff and all owners and managing agents of Lots in Strata Plan 2533 with email addresses.
"Dear Marlene,
In relation to item 1, the water bill was entered with the wrong date during bank reconciliation. Please accept my apologies for this error. It has now been corrected. The attached are: BS as it appeared on the AGM notice, amended BS after the adjustment and a copy of the bank statement.
The origin and nature of the missing $618.28 from the cash at the bank account balance as of about May 2019 and during the 2019 reporting year and to where this missing cash amount has now disappeared to in the Balance Sheet and Financial Statement etc. for 2019. Please explain in terms that a Public/Chartered Accountant would understand.
You comment/statement alleging our office unlawful act is false, misleading and offensive. I would anticipate receiving nothing less but an apology. Other 2 items will be discussed at the AGM as previously advised."
The following imputations are pleaded:
1. The plaintiff is a liar in that she falsely accused Mark Gitman and MG Strata Management of engaging in unlawful acts.
2. The plaintiff is a liar in that she falsely accused Mark Gitman and MG Strata Management of engaging in misleading and offensive conduct in relation to Strata Plan 2533.
3. The plaintiff is the type of person who is prepared to make false, misleading and offensive accusations against the defendant and his staff committing an unlawful act with respect to the financial accounts for the Strata Plan that he is managing.
[7]
The third matter complained of
On or about 11 May 2020 the defendant published of and concerning the plaintiff the words in the form of an email sent to the plaintiff and all owners and managing agents of Lots in Strata Plan 2533 with email addresses.
"Dear owners,
I am writing to you in advance to night's meeting. The attached are a few emails I received from Marlene over the 2 days. I would like to respond to some of the questions raised by Marlene so all of you have an UpToDate information.
1. Insurance. The insurance company has not changed. Even the policy number is the same. We engaged an alternative broker and achieved a reduction in premium cost nearly $300 (both certificates are attached) despite the fact that most of the polices were increased.
2. The refunds were treated differently due to the fact that one is from the owner of the lot and the other is from the 3rd party contractor. Both were banked as soon as the funds EFTed to your bank account. We operate the cash accounting system.
I'll be more than happy to answer all other questions during the meeting tonight. Now I would like to inform you regarding other issues.
Marlene has been basically the only person making all decisions on behalf of you [sic] building since we have taken over the management. We followed most of Marlene's instructions, but refused to follow some that we believed the other owners should be involved with. Some of them appear on tonight's agenda. Marlene has no financial interest in the building as she is not the owner and does not pay the levies. But Marlene has been deciding how to spend your money and most of the time ignored our advice. Below are some examples:
We obtained the attached quotation from DJE- $8.778. Marlene engaged BIM (invoices attached) total cost $11.000+. DJE quoted for investigation in unit 7 $330 (the same quotation), but eventually provided a free advise [sic] that no leaks are evident. Marlene engaged Phil Kauter for the cost of $638.00 (invoice attached). (very good plumber, but a bit of waste considering that the information was already available). Purple Plumbing failed to identify and repair the leak in unit 6 and that cost you another $2,300+. That was later repaired by Philip Kauter for around the same amount and claimed on insurance.
Managing you [sic] building has been an extremely challenging task. We have tried our best under the circumstances. Initially I wanted to approach all owners at the meeting and ask to join the committee so the decisions are made collectively by a number of people rather than one person. But recently Marlene alleged our company in committing an offence and holding illegally $618.28.1 have already email you the explanation for this transaction. The allegations are false and absurd. We are a reputable company that provides a good, honest and professional service.
Marlen [sic] would like to join the committee again and emailed me the nomination form. I would find it nearly impossible to continue managing your building if Marlene is on the committee and in charge of your building or/and the only person that makes the decision. Therefore I request that you attend tonight's meeting and elect the new committee."
[8]
Capacity and defamatory meaning
Mr Rasmussen refers me to the statement of principles set out by Wigney J in Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496 at [74]-[85] ("Rush"). Mr Lewis does not refer to any authority to the contrary.
The test for the ordinary reasonable reader remains that set out in Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 insofar as those principles are distilled in Rush at [75]-[77]. The formality (or lack thereof) of the publication may be a relevant factor in that the ordinary reasonable person may be influenced by the overall tenor of the publication as it is "a feature of certain forms of defamation that one can read or hear matter published concerning a person and be left with the powerful impression that the person is a scoundrel, but find it very difficult to discern exactly what it is that the person is said or suggested to have done wrong" (Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 137 per Gleeson CJ).
The ordinary reasonable reader is taken to have read the whole of the matter complained of, but with varying rates of attention, in that material that is given prominence by capital letters, underlining and/or bold text may gain more of the reader's attention (Trkulja v Google LLC (2018) 263 CLR 149; [2018] HCA 25 at [32]). Each imputation is to be considered separately in the context of the entire publication in which it is pleaded to be conveyed.
[9]
Defamatory meaning
As well as challenging capacity, Mr Lewis also challenges the defamatory meaning of all of the imputations, including imputation 4(d). His submissions raise issues which Mr Rasmussen submits misstate the law and conflate the new serious harm test in s 10A of the Defamation Act ("the Act") with defamatory meaning, which is impermissible. Mr Rasmussen took exception to the following passage from Mr Lewis's submissions:
"However, it is simply not defamatory to say that that the plaintiff has wasted the resources of the owners' corporation by engaging in unnecessary email communication with the strata manager. Neither would it be defamatory to say that the plaintiff was careless in the sense pleaded at 4 (if conveyed) for similar reasons. Such meanings are so trivial that no right minded person would think the less of the plaintiff: Gough, 19 and (xiii). For observations on such trivial meanings see: Rolph D, "Triviality, Proportionality and the Threshold of Serious Harm" (2019) 23(3) Media and Arts Law Review 280-306. Indeed, it is apposite to cite the observation made (at 398) by Pollock CB in Clay v Roberts (1863) 8LT 397:
"There is a distinction between imputing what is merely a breach of conventional etiquette, and what is illegal, mischievous, or sinful".
Similar observations were made by Lord Atkin (at 1242) in Sim v Stretch [1936] 2 All ER 1237:
"[T]he protection [of reputation by defamation law] is undermined when exhibitions of bad manners or discourtesy are placed on the same level as attacks on character; and are treated as actionable wrongs.""
(Submissions, paragraph 19)
Mr Lewis did not include the sentence appearing before his quotation of Pollock CB's remarks at page 398 of Clay v Roberts, in which Pollock CB gave examples of non-actionable publications. Mr Lewis went on to state that this particular statement of principle by Pollock CB was endorsed by Lord Atkin in Sim v Stretch [1936] 2 All ER 1237 (at 1242). However, his quotation from Lord Atkin also omits the reference to the examples given by Pollock CB.
The full text of what Lord Atkin said is as follows:
"I only cite Clay v Roberts because of its reference to social conditions 70 years ago. It was held that it could not be defamatory to say of a physician that he met homœopathists in consultation.
'Would it be libellous, asked Pollock, C.B., at p. 398, to write of a lady of fashion that she had been seen on the top of an omnibus; or of a nobleman, that he was in the habit of burning tallow-candles? There is a distinction between imputing what is merely a breach of conventional etiquette, and what is illegal, mischievous, or sinful.'"
(Emphasis added)
[10]
Whether each of the imputations in each of the matters is conveyed
Each of the publications and each of the imputations should be considered separately.
[11]
The first matter complained of
When determining whether an imputation has been conveyed, regard must be paid not only to the words used but also to the format and layout and, for the reasons outlined by Gleeson CJ in Drummoyne, the tenor and language, particularly where matters are inferred or hinted at.
The format and presentation of the matter complained of are important, as meaning does not just arise from the words. Mr Rasmussen draws my attention to two formatting aspects:
1. The use of the "blind carbon copy" ("BCC") portion of the email, which is expressed to be copied to "all owners and agents with emails". Mr Rasmussen submits that this process would give rise, in the mind of the ordinary reasonable person, to a sense of suspicion, as why would the identity of the recipients of the email otherwise speak not be disclosed?
2. The use of bold and underlining in the text to get across the principal stings, namely "your contractors" and "did not fix the problem", the inference being that these contractors are there at the insistence of the plaintiff as well as performing their work incompetently. In addition, paragraph 7, where the defendant "strongly" encourages the owners to attend the AGM to discuss these issues.
As to the "BCC", this is not merely in bold and underlined but also capitalised, so its importance would be taken to be high. What is so important about a strata agent sending an email to all owners and agents with emails? Mr Rasmussen submits that the reason is to create a sense of suspicion with a hint of subterfuge.
In reply, Mr Lewis submits that reasonable readers will be familiar with the nature of email and in particular the function of "BCC". They would have seen, from paragraph 5, that the author was copying all owners using this method and would not jump to a sense of suspicion but rather have understood it as being used when an author does not want recipients to press the "reply all" button and thereby encourage unnecessary emails in response. Alternatively, the use of the "BCC" would be because the defendant considered it appropriate to protect the recipient's privacy. Mr Lewis submits that in the context of management of the property with 12 units, such a position would be entirely understandable. Further, the ordinary reasonable reader would understand that the defendant's purpose is to encourage owners to come to the middle AGM to encourage a discussion of the issue with the buildings plumbing contractor, and not to discuss the plaintiff's blameworthy conduct.
[12]
The second matter complained of
All three imputations convey that the plaintiff is accused of being a liar; the first two are imputations of acts and the third is an imputation of "condition", which may be pleaded at the same time: Drummoyne Municipal Council v Australian Broadcasting Corporation at 137A ("act or condition"); Toben v Milne [2014] NSWCA 200, approving Singleton v John Fairfax & Sons Ltd (Supreme Court (NSW), Hunt J, 20 February 1980, unrep).
Mr Lewis submits, effectively in relation to all imputations, that, unless a reasonable reader impermissibly relied on his or her own prejudices, they would not have led to the conclusion sought by the plaintiff to the effect that she had knowingly made a false accusation. The defendant in fact apologised in part for the error drawn to his attention by the plaintiff. He submits that there is nothing in the matter complained of that would have conveyed, as a matter of fact, that the plaintiff had lied as contended for her in her imputations. I do not accept this submission. The defendant's apology does not alter the fact that he accuses the plaintiff of dishonesty in relation to her making knowingly false accusations.
I make the following findings:
1. Imputation (a): The defendant is demanding an apology for the plaintiff's false accusations, made in circumstances where it is clear, from the first two paragraphs, that there is a sensible and reasonable explanation for the discrepancy which she must have appreciated when writing what she did in the extract set out from her letter. What else would the defendant mean by using the word "false"? The ordinary reasonable reader would not assume that this was an explanation being given for the first time; the manner of presentation clearly asserts that the plaintiff falsely made these allegations when there was a reasonable and simple explanation. This imputation is conveyed and defamatory in meaning, for the reasons set out above.
2. Imputation (b): Similarly, the clear inference of the demand for an apology for making a statement that was "misleading and offensive" conveys an imputation that the plaintiff was making allegations false to her knowledge, which statements were misleading and offensive. This imputation is conveyed and clearly defamatory.
3. Imputation (c) is that the plaintiff is the kind of person who makes allegations of this type. The matter accuses the plaintiff of making false accusations - in other words, lying - in circumstances where it was inferred that she knew the truth. This imputation is conveyed and, for the reasons set out above, defamatory.
[13]
The third matter complained of
Mr Rasmussen submitted that the clear and simple language of the third matter complained of renders it a sustained attack on the plaintiff's competence and honesty, based on the sting of asserted "examples" designed to "inform" the recipients. Each of those allegations is set out in seven separate imputations.
Mr Lewis submitted that it would be clear to the ordinary reasonable reader that the defendant is answering only some of the questions raised by the plaintiff and that he would be more than happy to answer any other questions during the meeting. He submits that on no proper reading of the matter complained of do the words convey the meanings contended for by the plaintiff, namely that the defendant had finished answering the questions; the opening words of paragraph 6 would not convey to the ordinary reasonable reader that the plaintiff was responsible for what followed. Ordinary reasonable readers would understand, from those words, that the defendant is reminding them that the plaintiff had been the only person providing him with instructions. In addition, he submits that the word "refused" would not convey that the plaintiff would not want others to be involved but that the defendant wanted to obtain the input of other owners in relation to the making of decisions.
I make the following findings:
1. Imputation (a): This is an allegation of incompetence in the form of ignoring the Strata Manager's advice "most of the time", followed by "some examples" of such conduct. This imputation mirrors some of the words in the matter complained of, but in a permissible way. This imputation is conveyed and, by reason of the numerous factual "evidence" provided, defamatory.
2. Imputation (b): Paragraph 7 refers to the attached DJE quote for $8778 and the BIM Remedial Building Maintenance Tax Invoices and the "$11,000+" invoices from the builder chosen by the plaintiff, DJE, and goes on to refer to two other examples of the plaintiff needlessly running up tradesmen expenses. The allegation is plainly made that this example of the plaintiff ignoring the defendant's advice on the choice of tradesmen (paragraph 6) and preferring to use the higher-charging company is mismanagement. This imputation is conveyed and, given the factual examples set out as evidence, defamatory.
3. Imputation (c): Paragraph 7 clearly refers to the plaintiff unnecessarily obtaining a quote from BIM and unnecessarily getting a quote from Mr Kauta for $638. The defendant says that both were unnecessary, He goes on to add in Purple Plumbing fees that "cost you another $2,300+". There is a clear inference that these quotations were unnecessary as well as costing the building money. This imputation is conveyed and, for the same reasons as the previous two imputations, defamatory.
4. Imputation (d): This imputation was withdrawn during argument on 16 December 2021.
5. Imputation (e): Acting against the advice of the strata manager is referred to specifically ("most of the time ignored our advice") and followed by "some examples". An imputation of doing so recklessly is pleaded. This imputation is conveyed and, in the context of the acts referred to, defamatory.
6. Imputation (f): This is an imputation that the plaintiff is not only ignoring the managing agent's advice, but doing so incompetently, in that the defendant, by inference, knows better. This imputation is conveyed and defamatory.
7. Imputation (g): The plaintiff is accused of making a "false" accusation of committing an offence. A person who makes an allegation that he or she knows to be false is a liar. This imputation is conveyed and its defamatory nature is self-evident.
8. Imputation (h): Like imputation (c) in the second matter complained of, this is an imputation of a condition, rather than an act. The matter refers to "allegations" in the plural. Mr Lewis challenges whether such an generalised imputation can be conveyed but the plaintiff is entitled to distil an imputation as broadly as the claim put against her, for the reasons enunciated by Gleeson CJ in Drummoyne Municipal Council v Australian Broadcasting Corporation at 137. This imputation is conveyed and defamatory.
[14]
Conclusions concerning the imputations
Each of the imputations pleaded by the plaintiff for each of the three matters complained of is conveyed and defamatory.
[15]
The evidence
The plaintiff and her husband gave evidence. The defendant did not give evidence and did not call any witnesses. As a result, most of the factual issues, although convoluted, are not in dispute, and there is no need to set out the usual account of the evidence of witnesses. I have instead set out the events in narrative form, indicating areas of dispute where applicable.
Documents from the owners corporation were tendered as part of an agreed Court Book (all references contain the letters "CB" are taken from that source) and, with one exception (a transcript of a strata meeting, although the objection was later withdrawn), were admitted without objection.
Evidentiary issues are limited, but each party asked me to draw Jones v Dunkel (Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8) inferences from their opponent's asserted failure to call witnesses.
[16]
The events leading to publication of the matter complained of
The events leading to the three publications the subject of these proceedings are as follows. For some years, the plaintiff, a distinguished scientist and academic who retired in about 2006, held roles in the owners corporation for the block of strata units in which her mother lived, where she spent a lot of time visiting as it was near her own home. She was responsible for all owners corporation activities, with the assistance of a managing agent, CF Strata. Another Lot owner, Nina Cruz (also known as Nina King), assisted her from time to time but, in practical terms, management was left by the other owners to the plaintiff to carry out.
This management of the building proceeded without complaint or criticism until early 2019, when the managing agent, Mr Cagliata, sent an unlicenced plumber to carry out repairs. He had previously sent someone with the wrong qualifications for some engineering work (Tcpt, 29 March 2023, p 169). The plumbing problems were serious, and the owners agreed this was not acceptable. At the annual general meeting on 4 March 2019 (CB 195 Tab 20), motion 20 (to renew the appointment of CF Strata) was defeated unanimously, with a two-month deferral to enable time to engage a new managing agent. An engineer with the correct qualifications, Mr William Ha, had been called in, and his careful reports of the leak problems (from his visits on 1 and 7 June 2019), covering units 2, 4 and 6 and the outside walls are set out at CB 250 - 254.
The new takeover date was to be 7 June 2019 but the plumbing work was urgent and could not wait that long (CB 201 Tab 22.1). The plaintiff instructed the former managing agent, Mr Cagliata, to issue a work order for Purple Plumbing, this company being known to the plaintiff to hold a licence and to have carried out plumbing works in the past to her satisfaction. Purple Plumbing attended promptly and completed the work in relation to their quote, which consisted of checking whether there were water leaks from Lot 4 into Lot 2; on 9 June 2019 they also carried out thermal imaging on Lot 6 and found no water leaks, confirming Mr Ha's findings. On 17 June 2019 Purple Plumbing provided their invoice to the plaintiff who then sent this on to the defendant on 18 June 2019, which was 11 days after the newly-appointed defendant commenced his duties as managing agent.
[17]
The relevant legislation for strata plans and managing agents
The management of strata plans in New South Wales is regulated by the Strata Schemes Management Act 2015 (NSW) ("SSMA"). This is outlined in Mr Rasmussen's submissions at paragraphs 49-62 and summarised by Smith SC DCJ in Gough v Squillacioti [2021] NSWDC 411 at [29]-[32].
The duties of strata managing agents are set out in the Property and Stock Agents Act 2002 (NSW) ("PSAA") at ss 3B(1), 8(1), 32(1), 86(1), 103(3) and 104(1)(a). The Property Stock and Business Agents Regulation 2014 (NSW) ("Regulation") imposes further obligations on the defendant. Mr Rasmussen has set these out in his submissions at paragraphs 83-88 and 89-99 respectively.
Although the parties did not address me on the legislation requiring building work to be carried out by licensed and insured builders (Home Building Act 1989 (NSW) ss 3 ("dwelling"), 4, 10 and 92(1)(a)), the parties agreed that, for all relevant purposes, that the Lot 7 building work commenced by Mr Nesci after its approval at the 1 August 2019 strata meeting was work that was carried out by an unlicensed builder who had, it would appear, carried out work in the bathroom, such as removal of the shower head and the taps. As set out in the 23 December 2019 minutes, the plaintiff stated that the negligence of this renovation work was a contributing factor to the floor of Lot 7 requiring the substantial rectification that it did. This is the Act referred to by the plaintiff at the Annual General Meeting (CB 579) when she describes the meetings she says the Department of Fair Trading had with both Mrs Nesci and Mr Roberts, in which they were told that using an unlicensed builder would amount to a breach of this legislation.
There have been some amendments to this legislation (for example, the Regulation referred to is the historical version for the period 31 October 2018 to 22 March 2022), but these are of no consequence.
The importance of this legislation is that it underlines the seriousness of having an unlicensed builder carrying out work, particularly if damage to the building is having to be rectified, as was the case with BIM. Keeping accurate financial records is also a matter for which the strata manager, rather than the committee he advises, is responsible, as the manager is in charge of paying tradesmen and keeping the books.
[18]
How did it come about that an unlicensed builder carried out substantial renovations in the building?
As noted above, on June or July 2019, Lot 7 made applications for renovations in the Lot (Tcpt, 27 March 2023, p 34(39)-35(3)). The owner of Lot 7 had (Tcpt, 27 March 2023, p 52(32)-(34)) signed a document saying that she was using licensed tradespeople and builders for her renovation. The proposed renovations were considered by the strata committee on 1 August 2019 (CB 298 Tab 46) and approved at the strata committee meeting on 20 August 2019 (CB 303 Tab 49; Tcpt, 27 March 2023, p 35(5)-(7)).
Mr Rasmussen states, at footnote 44 to his written submissions, that the Court Book does not contain copies of these minutes of meeting. The parties have, however, located the By-Laws for the Strata, which clearly identified that where "major works" (i.e. involving plumbing, electricity and the like: clause 2.1(j)) were carried out, the owner seeking permission of the owners corporation had to "use duly licensed employees, contractor or agent [sic]" (Part 3.3(a)). Insurance was also required (clause 2.1(h)).
The plaintiff prepared minutes of the 1 August 2019 meeting and sent them to the defendant. She later realised the defendant was not sending copies of her minutes of strata committee meetings to owners (except for the last one before the AGM in May 2020), which meant that apart from the one other person who attended the meetings, the other owners did not know what was going on.
There were ongoing plumbing problems at the building and in September 2019, the owners of Lot 7 advised new problems, at a time when they were renovating the bathroom and kitchen. It was in these circumstances that the plaintiff discovered that Mr Nesci was in fact unlicensed:
"Q. Now, how did you find out that this person did not have a building licence?
A. Yeah - because beforehand, I - I don't know exactly what precipitated it, but I have a tendency, if I find out what the company name is, to check - to - and the name of a person is - to check that they have a licence.
Q. And how do you --
A. It would be nice if I'd checked the licence--
Q. How did--
A. --a lot earlier.
Q. How did you check and how did you do this checking of the licence?
A. On fair trading. You can look up the company ABN number or something or rather, and it tells you who's running the company. And then, I found out it was Mr Gillespie Nesci and then, I looked up to see if he was a licence builder under that name and he wasn't.
Q. Okay.
A. I could've checked this earlier but one assumes that and also, Candy Lui, the owner, had signed a document saying that she was using licenced tradespeople and builders for her renovation. So I'd believed that. I believed that and I was very upset and quite annoyed that I have to gone through all this, the builder and the tradespeople may not have had licences for all this work that had been done." (Tcpt, 27 March 2023, p 52 (10)-(33))
[19]
The police are called late on 27 November 2019
Later on the same day, the plaintiff's mother saw someone entering Lot 7 and informed the plaintiff that tradesmen were present at Lot 7 (Tcpt, 29 March 2023, p 226(49)-(50)). The plaintiff came to the premises to tell them to stop and the police were called. The defendant places great weight on the asserted wrongdoings of the plaintiff on this occasion in relation to both credit and damages, and full details of this incident are set out in the section of this judgment on credit.
The plaintiff gave unchallenged evidence that she reported the carrying on of unlicensed building work (which continued even after she had directed it to stop (Tcpt, 30 March 2023, p 292(27)-p 293(23)), to the Department of Fair Trading (Tcpt, 29 March 2023, p 220(20)-(23)). She told the Court that it was investigated (Tcpt, 29 March 2023, p 220(20)-(23)) and Tcpt, 29 March 2023, p 219(5)-(9), CB 660 Tab 115, lines 29 to 36).
Although her evidence on her discovery of there being no licence and complaining to the Department are unchallenged, the evidence concerning the calling of the police is not. In his submissions, Mr Lewis asks me to prefer the "evidence" of Mrs Nesci's version of events, provided in an email to the defendant a year or more later after these proceedings were commenced, (MFI 5), although this email was never tendered. Allegations that the plaintiff not only attacked the tradesman and resisted arrest but tried to hide these wrongful acts from the court are made in cross-examination and in submissions as a basis for not accepting the plaintiff as a witness of truth.
For the reasons set out in the section of this judgment on credit, I have accepted the plaintiff as a witness of truth and accepted her version of events. She robustly denied the versions of events given by Mrs Nesci and I accept her evidence.
Mr and Mrs Nesci were not called to give evidence about these (or any other) events, and neither was the unnamed tradesperson. There is no evidence of their being unavailable. No attempt was made to tender MFI 5 and it is not therefore in evidence: Boulas v Angelopoulos (1991) 5 BPR 11,477 at 11488 per Kirby P. In those circumstances, it is not strictly necessary for me to draw a Jones v Dunkel inference from the failure to call these witnesses. I am, however, prepared to draw such an inference from the failure of the defendant to call them, or to tender documents demonstrating the state of Mr Nesci's licence or the "police report" the owner of Lot 7 told the other residents at the AGM on 11 May 2020 that she had in her possession.
[20]
The events concerning Lot 7 after 27 November 2019
The plaintiff wrote to the defendant on 29 November 2019 as follows:
"Dear Mark
Please note that the Strata Committee and me are now handling all correspondence and phone calls to deal with the owner and her representatives, and "builder" and any of the "builder's" workers and also companies/workers engaged by the OC and SC at Unit 7 /25 Cook St Randwick.
The "builder", Mr Giuseppe (Joe) Nesci of "Joe's North Shore Property Maintenance", recommended by real estate agent Ms Lyndall Nesci, and his workers are not licensed to do the work that they have been assigned to do by Mr G. Nesci at Unit 7 and this is contrary to the "Special By‐Law No 1 for Works" for SP 2533/25 Cook St Randwick.
Please do not complicate matters by interacting with any of these people connected with the renovation of Unit 7/25 Cook St Randwick at this time.
Thank you
Marlene Read" (CB 376)
The plaintiff also told the defendant she would attend the proceedings in the Department of Fair Trading (CB 377).
[21]
The meeting on 23 December 2019
The Minutes of Meeting of 23 December 2019, a meeting which was only attended by the plaintiff and Ms Cruz (Unit 12), set out the difficulties the owners corporation was having with the intransigent property managers of Lot 7, including the plumbing problems resulting from these unlicensed and incompetently performed works, and advised of complaint proceedings (actually instituted by the owners and managing agents for Lot 7), resulting in a Fair Trading Mediation Session, set for 24 January 2020.
The text of these Minutes is as follows:
"Unit 7 Renovations
The Owner of Unit 7 employs Ms Lyndall Nesci (Principal) and Mr Kirk Roberts (Senior Property Manager) from "Investment Property Managers", Neutral Bay, to organize her unit renovations and lease her property for rent. These Property Managers recommended that the owner of Unit 7 engaged Mr Giuseppe (Joe) Nesci of "Joe's North Shore Property Maintenance", Dee Why, to provide a Quote and Scope of Works for the renovation that is well over the threshold of $20,000.00 that requires a licensed builder and appropriate Fair Trading-approved contract and other legally required documents.
The owner undertook that no common property would be altered or interfered with in her renovation by signing the correct "Annexure C" form for renovation works according to the "Special By-Law No 1 for Works" 2012 of Strata Plan 2533.
There have been many problems with this renovation.
On August 30 the Chairperson of the Strata Committee (SC) was notified by the above property managers that the subfloor in Unit 7 was damaged and needed replacement before they could lay new flooring and continue the renovation. This damage was due to water penetration, contra-indicated concrete-"repair" and removal of kitchen common-property-tiles by the owner.
Up until 25 September, the owner and property managers agreed with the SC Chairperson, that an Owners Corporation (OC) plumber should check all hot and cold water pipes and the shower floor for leaks, before the common property subfloor in the rest of the unit (except laundry and bathroom) was repaired and renovation started. (The hot water heater and pipes that can cause water leakage, had already been checked by an OC plumber a few months before in July.) A plumber's Report at a cost of $638.00 to the OC stated that there were no leaks at this time. This was necessary for the OC (and also beneficial to the owner) to ensure that there was no OC liability if the proposed new floor and cupboards were subsequently damaged from common property pipe/shower floor water leaks.
Unit 7's subfloor was damaged by the owner by un-authorized and extensive multiple contra-indicated "wet" concrete patching of magnesite common property subfloor that does more damage to the floor and causes concrete cancer, also un-authorized concrete patching of a large crack in the north common property north wall near kitchen sink and dishwasher that can cause water penetration. The removal of common property tiles in the kitchen common property floor was also un-authorized. There are photos of all these damages.
The property managers have also admitted that they arranged for the re-configuring of the owner's hot water heater and pipes in Unit 7 without complying with the requirements of the "Special By-Law No 1 for Works" 2012.
Following 25 September, of the quotes obtained for the OC's repair of the unit's subfloor, only one (which was also $2,000.00 cheaper) provided a Contract that was legally required for works over $5,000.00. Acquiring the contract, ("BIM Remedial Building Maintenance"), arranging progress payments, jackhammering the removal of the damaged subfloor and re-levelling (cost $6,435.00) and then finding extensive concrete cancer and repairing that (extra cost $4,950.00 or total cost $11,385.00) took 37 days or 27 working days not the 64 days that the investment property managers are stating. This common property subfloor work was finished on 2 November 2019. Twenty seven working days is not an excessive time for undertaking this type of work. If the owner needed rental loss protection for her renovation she should have taken out appropriate Owner's Insurance. All the above statements are backed up by many photographs and the dates by many, many email exchanges (that were costly to OC finances).
The Owners Corporation and its finances have suffered from the owner's unpermitted damage and alteration to common property including faulty and extensive contra-indicated wet concrete "repairs" to the magnesite subfloor, faulty and unpermitted "concrete repair" to large crack in common property north wall adjacent to kitchen sink and dishwasher, removal of common property tiles in the kitchen floor, removal of common property tiles in north kitchen wall above kitchen sink and dishwasher, large holes gouged by extreme force on cement of north wall near kitchen common property water pipes: this last action renders the recent OC plumber's Report and pressure test of water leaks in unit pipes at a cost of $638.00 now useless in protecting the liability of the OC against further costs from damage due to leaks from common property pipes. All of these above works were done without approval from the Chairperson or any Strata Committee or the OC as is required.
It has been found that Mr Giuseppe (Joe) Nesci has no Builder or Tradesperson license from Fair Trading.
An owner of a lot in a strata scheme must not carry out work on the common property unless the owner is authorized to do so-
STRATA SCHEMES MANAGEMENT ACT 2015 - SECT 111
Work by owners of lots affecting common property
111 Work by owners of lots affecting common property
An owner of a lot in a strata scheme must not carry out work on the common property unless the owner is authorised to do so -
(a) under this Part, or
(b) under a by-law made under this Part or a common property rights by-law, or
(c) by an approval of the owners corporation given by special resolution or in any other manner authorised by the bylaws.
STRATA SCHEMES MANAGEMENT ACT 2015 - SECT 132
Rectification where work done by owner
132 Rectification where work done by owner
(1) The Tribunal may, on application by an owners corporation for a strata scheme, make either of the following orders if the Tribunal is satisfied that work carried out by or for an owner or occupier on any part of the parcel of the scheme has caused damage to common property or another lot -
(a) an order that the owner or occupier performs the work or takes other steps as specified in the order to repair the damage,
(b) an order that the owner or occupier pay to the owners corporation or the owner of the lot a specified amount for the cost of repairs of the damage and any associated costs, including insurance and legal costs.
(2) An amount payable by an owner or occupier to an owners corporation under this section is payable, and may be recovered, under this Act as if it were an amount of unpaid contributions.
Note: Section 86 provides for the recovery of unpaid contributions.
The owner of unit 7 and her investment property managers, as above, were instructed on 27 November 2019 by the Chairperson of the SC to immediately arrange to stop and suspend all their renovation work and that permission to continue with it was withdrawn for a period. This was because extra repair work needed to be done by OC tradespeople with respect to a large crack in the western common property wall. This was also very necessary because of the above damage to common property and their engagement of trade work exceeding $5,000.00 and also $20,000.00 by the apparently unlicensed workers or, instead, to supply to the Chairperson the Builders/Tradespersons names and licence numbers. They did not comply with these instructions.
Written Complaints were sent last week to "NSW Fair Trading" concerning the apparent unlicensed and possibly dangerous trade work performed on Owners Corporation's common property and owner's property during this renovation in Unit 7 that is to be leased out for rent.
The owner and her employed investment property managers are concerned about the owner's loss of rental income that they did not plan for, because of the damaged common property subfloor in Unit 7. The owner apparently does not have owner's insurance to off-set her loss of rental income. They also have claimed that the OC tradespeople (BIM) have damaged the owner's property and the Chairperson of the Strata Committee charges that the owner's workers have damaged and interfered with common property without permission as well as done apparently unlicensed work in the unit.
The owner and owner's investment property managers, as above, initiated on 19 November, a free Fair Trading Mediation Session at Parramatta for the 24 January 2020, the results of which are not binding in any way, nor is it compulsory to attend. The Chairperson of the Strata Committee, Dr Marlene Read is willing to attend with all necessary documentation and at no cost to the Owners Corporation. I don't actually expect them to attend since they have supplied no evidence that their "builder" or "tradesperson" has a license as a Builder or Tradesperson and the owner and her investment property managers themselves employed Mr Joe Nesci to do the renovation and also that his workers have done damaging un-authorized work to the common property in Unit 7.
3. See details in Secretary's Report above.
MOTION 1: That the Strata Committee approve that the Chairperson, Marlene Read attend the Fair Trading Mediation Session on 24 January 2020 regarding the renovations in Unit 7 as noted above, if the Session remains scheduled, at no cost to the Owners Corporation."
[22]
What, if anything, should the defendant have done about the lack of licence?
As a managing agent, the defendant had obligations to the owners corporation to ensure that major works at the property were carried out by licensed builders under the terms of the Management Agency Agreement entered into by the agency employing the defendant and the owners corporation on 19 June 2019 (CB Tab 27, pp 244 - 245). Whether or not it was his duty to check registration and insurance before the work was approved, it was certainly his job after 27 November 2019, once he was told by the plaintiff that the "builder" was unlicenced, to ensure that unlicensed and uninsured persons did not carry out work. While the plaintiff was insisting that she should supervise this, this did not mean that he should have refused to assist her or to assist the owners corporation.
That was, however, the attitude he took. He never responded to the plaintiff's email of 27 November 2019 advising that Mr Nesci was unlicenced. If he did not know before that date that Mr Nesci was unlicenced, he certainly knew from that date onwards, yet he did nothing about it.
Also on 27 November 2019, the police came to the property after the plaintiff, alerted by her mother, discovered that despite her objections, work was continuing surreptitiously by the unlicenced builder. There was a confrontation. The defendant did nothing about this. The plaintiff also discovered, from her complaint to the Department of Fair Trading that she put in after these events, that the electrician was also unlicensed, which she considered "even worse" (Tcpt, 29 March 2023, p 222(42)). The defendant did nothing about the complaint to the Department or about the discovery that the electrician was also unlicensed.
One step I am satisfied that he did take, however, was to try to terminate the plaintiff's role in giving him instructions on the basis that she was having too many disputes with other owners for him to be able to manage the strata. On 4 March 2020, he wrote to the plaintiff as follows:
"Hi Marlene,
Please email you bank details to admin@mgstrata.com.au for bylaw registration reimbursement.
Regarding the other matters, I feel a bit uncomfortable to take the instructions at this point of time considering how many disputes you are having at the building. We have booked the AGM for 11/05. I'll add those as the agenda items and we'll take it from there.
Purple plumbing refunded the money (see attached) after about 14 phone calls and emails. I prefer not to deal with this company in the future."
[23]
What was said at the Annual General Meeting?
The defendant opened the meeting by insisting that he be the chair and saying that he had been "harassed by" the plaintiff's emails (CB 657).
Not everyone agreed with this course. In response to Nina Cruz (as Mrs King is referred to in the transcript) saying that "it doesn't feel right" for the plaintiff to be muted (CB 657) and that there should be "some resolution" of the disputes before the meeting started. The defendant opposed any such course and said "we will be resigning" if the plaintiff was elected to any position:
"NC: I think the whole idea of having someone muted. I know… you know … like it just doesn't feel right to me but I know there's a lot of stuff going on. So if you know there is needed to have mediation … or I don't know … or third parties come in just to be involved so we can actually make decisions about what is going on.
MG: Yes, OK. Nina, I have to say that I've been basically harassed by Marlene, by her emails, by a lot of statements she made. So if she is on the committee not I, we are resigning and you will be looking for new agent. So I will not be in the position to be defated [sic] and harassed like this … she made false …
I'm recording this by the way. I'm recording this meeting. So all the audio will be available for any hearing Marlene decides to go to ??? Now I'm not prepared to … to proceed any further ??? I mean ??? with Marlene but as you know ??? silent partner ??? Marlene to make all the decisions. A lot of those decisions were wrong financial ??? no one else had any opportunity to be involved. If you go through my emails ??? there's at least $8,000 to spend on your money. That's without going into the details of everything else to $8000 to overspend ??? what didn't have to be spent. And if you're prepared to let Marlene take over and run her own operation that's fine, that's your decision at the end of the day, you're the owners [unintelligible, MR protesting]." (Portions highlighted)
I have highlighted the above portions for two reasons. The first is to demonstrate that from the beginning of the meeting, the defendant gave the meeting participants an ultimatum: either the plaintiff went, or he and his company went. The second is that he told the meeting participants he was recording the meeting so that "all the audio will be available for any hearing Marlene decides to go to." The plaintiff responded to this by saying she was recording the meeting as well. No objection was taken by anyone to this course. Mr Lewis sought a ruling that the tender of the transcript of the audio was inadmissible, which he later told the Court (in response to being referred to Xuan v Xu [2022] FCA 508) he withdrew.
[24]
What was said about Lot 7and the 23 December 2019 minutes at the Annual General Meeting?
The problems with Lot 7 had been the principal issue at the meeting on 23 December 2019 but there was also a series of resolutions passed, including motions to set the date for the AGM on 11 May 2020. The defendant acted as if all those resolutions had simply ceased to exist, as the plaintiff noted in her email of 8 May 2020.
"Dear Mark
RE motions 21, 22 and 23 on AGM agenda for 11/5/2020.
These motions were not proposed by me they were proposed by you and I asked you to remove such a reference to me in a previous email.
Motions on the AGM for 11/5/2020 were passed at a properly constituted Strata Committee Meeting on 23/12/2019 and the Minutes were distributed to all owners and you (see attached).
The Strata Committee of a Strata Plan makes all decisions on behalf of an Owners Corporation between General Meetings of the Owners Corporation in order to deal with matters timely and between General Meetings. If the Owners Corporation has any concerns or wishes to revoke these decisions of the Strata Committee they may do so by calling a General Meeting or waiting until an AGM.
Despite requests from me these SC Motions were not acted upon by you at the time without any reason being given. It is necessary for the SC to deal with matters timely and not wait for a General Meeting. That is why there are Strata Committees of the Owners Corporation.
Delays obviously do not work well for a Strata Scheme and rejecting Motions passed by a SC without reasons casts the members of the SC in an unfavourable light with respect to the views of owners of the Strata Scheme when the SC members have done nothing incorrectly. Receipts for all amounts where necessary were supplied to you.
Please explain in writing why you would not act on these lawful Resolutions of the SC for SP 2533 at the time they were made and you decided to place the same Motions on the AGM ~ 5 months later thus challenging the decisions of the members of the SC."
As the transcript for this meeting shows, any attempt by the plaintiff to raise the 23 December 2019 minutes issues and/or Lot 7 resulted in the defendant muting her and telling her it was not on the agenda for discussion. One such occasion was as follows:
"MR: I haven't had the opportunity to say anything. Am I unmuted? Well, first of all, I would like to say something to Ming which I respect her and what I don't respect is her builder and/or her strata managers because they did not have a proper contract under the Building Management Act. And both the chairp … both the builder and the I've been told by the … by Fair Trading and the electrician which is even worse were unlicensed. The builder is unlicensed which is not a good thing for you and the … also the … the electrician is unlicensed. And I went to Fair Trading to explain all this. I understand that you are the innocent party. You did not get a proper contract under the Building Act and that is the fault of your … of your property managers. And I went to NCAT, not NCAT I… I went to Fair Trading and they came and visited me and they completely agreed and they have talked to both your strata managers that they did … they have acted outside their licence in not complying with the Building Act. I say that you're the innocent party in this and I have always said that. And also they have taken actions against the builder because he is not licensed and that is detrimental to you as well as the building. So that's what I did because they were not accounting for anything. They are not accounting for anything whatsoever and -
MG: Marlene [unintelligible, MR protesting] Unit 7 renovations is not part of the Agenda tonight."
(AGM transcript, CB 660)
[25]
Statement asserted to be false or misleading in the matters complained of
I have received submissions from both parties as to whether the defendant knew or ought to have known about the falsity of the statements of fact that he made, and what his purpose in so doing was. Before commencing an analysis of the facts as they were known to the defendant (knowledge of the falsity being the principal evidence of malice), I make the following general observations.
The plaintiff submits that most if not all of the defendant's statements were false or, at best, misleading and sets out a lengthy discussion of these. The defendant submits, in a more general fashion, that "taken at their highest, they go nowhere and certainly do not support a conclusive finding of malice (as the plaintiff has frankly conceded at PCS [168])" and that "in any event, the submissions do not reflect the evidence".
I do not accept these submissions. Counsel often make submissions to the effect that the plaintiff has made admissions and has no case, that she and her counsel have admitted this, and that what little they say does not reflect the evidence. Such submissions are no substitute for an analysis of the evidence. Carefully examined, the plaintiff made none of the submissions in her evidence attributed to her, although at times appearing crushed under the weight of cross-examination, Mr Rasmussen gave no points away, and did not make any of the concessions claimed.
[26]
The plaintiff's credit and demeanour
As to demeanour, I have been guided by the analysis of Besanko J in Roberts-Smith v Fairfax Media Publications Pty Limited (No 41) [2023] FCA 555 at [171]ff. I also take into account the observations made by Leeming JA in Gautam v Health Care Complaints Commission [2021] NSWCA 85 at [15].
As Besanko J notes at [172], submissions on such issues are expressed in terms such as being an "impressive" witness. Counsel often submit that a witness gave evidence in what they call a straightforward manner, without embellishment and/or by making concessions where appropriate. In the case of Mr Roberts-Smith, he remained polite and calm despite a comprehensive cross-examination, but his demeanour and courteous answers did not deter Besanko J from rejecting him as a witness of truth.
In the present case, the plaintiff was not merely polite but almost painfully honest, seeking to agree to the questions asked wherever possible, giving answers which were responsive and to the point, and making concessions where concessions should be made.
The defendant submitted (submissions, paragraphs 72, 75 and 78) that the plaintiff was not a witness of credit and that she was prepared to conceal the truth from the court. The defendant gave the following examples:
1. The plaintiff's answers at Tcpt, 28 March 2023, pp 163-164 concerning the proceedings at NCAT, where it was asserted that the plaintiff had sought to hide a complaint she made. Mr Rasmussen points out that the plaintiff did disclose to the court that she had made a complaint to NCAT about the defendant (Tcpt, 28 March 2023, p 164(28)). She volunteered this after an earlier answer to a question about whether she had made complaints prior to 11 May 2020, where she had not referred to this because it was a complaint made later. It was a feature of the plaintiff's answers that she answered in a very literal sense.
2. Similar issues arise in relation to the plaintiff's statement that she had not accused the defendant of unlawful acts. Mr Rasmussen attributes the confusion to Mr Lewis's practice of inserting the words "had" or "have" into statements that did not contain them. She was answering these in a time frame prior to 11 May 2020, when this was the case.
3. Her conduct in relation to the unlicensed builder issue and the police. I have set this out in detail below, as it is the principal challenge to the plaintiff's credit. It is also relevant to malice.
[27]
The plaintiff's credit and her behaviour on 27 November 2019
Mr Lewis submits that the absence of the defendant's evidence (or any of the evidence called on his behalf) does not mean that the plaintiff's evidence should be accepted (El-Debel v Micheletto (Trustee) [2021] FCAFC 117). He submits that I should not regard the plaintiff as a witness of credit on any issue by reason of her unsatisfactory answers and attempts to hide adverse information from the Court.
As noted above, one of the bases upon which the plaintiff's credit (and also her claim for aggravated damages) is challenged is that it is "common ground that the plaintiff was escorted from the Building by police" (submissions, paragraph 82). In footnote 79 to this paragraph, the source for this is given as "MFI 5", adding that "when pressed", the plaintiff had conceded (by inference reluctantly) that this would have "got around the building" (submissions, paragraph 82, referring to Tcpt, 29 March 2023, p 236(6)-(8)). The plaintiff, in cross-examination, was accused not only of unlawful actions while trespassing in Lot 7 but of trying to keep this information from the Court.
These are inaccurate descriptions of the evidence and of the submissions.
As to these events assertedly being "common ground", the plaintiff never admitted that she was "escorted" from the building by the police, despite attempts to get her to do so:
"HER HONOUR: Look the thing is this, Mr Lewis, you can put it to her that she didn't deny that the police were called, and whatever her answer is whatever her answer is, but obviously Mr Rasmussen will be saying, in his submissions, what chance did she have, even when she wasn't muted she was cut off.
LEWIS: Your Honour, I can deal with it differently.
HER HONOUR: In that question I'll note the question is withdrawn.
LEWIS: I withdraw the question.
Q. Dr Read, were you escorted off -
A. I was not escorted off.
Q. I haven't - Dr Read, I know you might disagree with -
HER HONOUR: Let's start earlier. Can we start with whether the police were called? Do you mind?"
Mr Lewis put it to the plaintiff that Mrs Nesci had called the police:
"LEWIS: Of course, your Honour.
Q. Were the police ever called to unit 7 on 27 November 2019?
A. Yes.
Q. They were called by Lindall Nesci?
A. No.
Q. They were called by the strata managing agents for unit 7?"
[28]
Conclusions concerning the plaintiff's credit
The plaintiff was the subject of vigorous but fair cross-examination. Her evidence was consistent throughout. The evidence asserted to be unreliable or untrue consists of at best minor inconsistencies arising from date confusions in the plaintiff's answers. I unreservedly accept the plaintiff's evidence on every issue, including her account of the events of 27 November 2019.
[29]
Jones v Dunkel issues
The parties ask me to draw Jones v Dunkel inferences, as set out below.
[30]
Failure to call the defendant
The plaintiff invites the court to draw an inference against the defendant because he did not give evidence (or call any other person to give evidence, as occurred in Kalil v Eppinga [2023] NSWDC 107).
Jones v Dunkel inferences have been the subject of judicial consideration in a number of defamation actions. Such decisions generally turn on the facts of the case as the contents of the inference to be drawn is uncontroversial. Failure to call a party to defamation proceedings is comprehensively discussed in Stoltenberg v Bolton [2020] NSWCA 45; (2020) 380 ALR 145 at [103]-[107] where the court noted that the three conditions referred to in Payne v Parker [1976] 1 NSWLR 191 at 201 - 202 were made out: he could expect to be called in his own case, his evidence would elucidate a particular matter and no explanation was offered. It is self-evident that all three apply here. In relation to the interaction between Jones v Dunkel and Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 and Blatch v Archer (1774) 1 Cowp 63 at 65; 98 ER 969, there is a helpful analysis by Besanko J on Roberts-Smith v Fairfax Media Publications Pty Limited (No 41) at [122] ff and, at [170], in relation to the role played by s 140 of the Evidence Act 1995 (NSW). I respectfully adopt his Honour's careful analysis of these issues.
Mr Lewis (paragraph 15, submissions in reply) seeks to draw a series of principles for defamation actions where a defendant publisher has not given evidence. I set these out, with my observations in response.
1. Mr Lewis submits that it is "not easy" for a plaintiff to invoke the rule against a publisher who elects not to give evidence, especially given the presumption of honest purpose that a publisher enjoys: Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57 at [96]; Barrow at [53] - [55] and Kalil at [38]. However, Roberts v Bass is not a decision referring to this principle; the passage at [96] merely states that honesty of purpose is presumed in favour of the defendant, but not that this is a presumption that is not easy to overcome. In Kalil, one of the two defendants gave evidence and her credibility was preferred to that of the plaintiff. In Barrow the matter complained of was a comment made by the defendant about the plaintiff's multiple complaints to the Press Council about him, which was a fact, and not a situation where knowledge of falsity was relevant. Each of these cases turns on their facts as opposed to representing a principle. Defendants generally do give evidence in proceedings where qualified privilege at common law is pleaded; the cases cited by Mr Lewis may be exceptions that prove the rule as to the evidence of the kind necessary to defeat malice is generally led.
2. Second, Mr Lewis submits that the rule must be "applied carefully" (Cosco v Hutley (No 2) [2020] NSWSC 893 at [19]). I agree, but this is essentially a message of caution, not a principle in itself.
3. Third, the plaintiff must identify the inference and the evidence to which it applies with precision: Cosco v Hutley (No 2) at [19]; Barrow at [55] and Trkulja v Markovic [2015] VSCA 298 at [91]-[98]. That is easily done here, as Mr Rasmussen has set that evidence out with precision.
4. Fourth, the inference is not available in the context of malice until the plaintiff has discharged the evidentiary burden on the Briginshaw standard: Barrow at [55]; Kalil at [38], [47] and [76]. That may be so but, once the burden is discharged, there does not seem to be a reason why, in an appropriate case, the inference should not be drawn.
5. Finally, even after that evidentiary burden is discharged, an inference must not be drawn that the evidence not adduced would have been adverse to that party, or to treat it as an admission or to fill gaps in the plaintiff's case or otherwise turn conjecture into inference. This is a general statement of principle. I should stress that I have not considered Jones v Dunkel until after I have made my findings of fact on the issues in question.
[31]
Failure of the plaintiff to call any of the recipients of the matter complained of
Mr Lewis asks me to draw an inference that the plaintiff's failure to call the recipients of the matter complained of is that their evidence would not have assisted the plaintiff.
It is sometimes the case that a point is made concerning failure to call a recipient of the libel: Cush v Dillon and Boland v Dillon [2009] NSWDC 21 at [41]. In general, however, courts acknowledge the difficulties of finding persons prepared to state, in the witness box, that they thought less of the plaintiff after reading or seeing the matter: Bauer Media Pty Ltd v Wilson (No 2) [2018] VSCA 154 at [515]; Eustice v Channel Seven Adelaide Pty Ltd [2020] SASC 4 at [12].
In addition, there is compelling evidence of the reason why other owners of the units did not want to be involved. Mrs Byrnes, whose husband was the owner of unit 1 (CB 757), was sufficiently concerned about the commencement of defamation proceedings that she rang the plaintiff to tell her of her husband's and son's opposition to it (her husband owed the unit and their son lived there). The reason was that this could affect the value of the units at sale if word of what had happened got out. The plaintiff told the Court (Tcpt, 28 March 2023, p 125(7)):
"Yes, I received a phone call from Susan Byrnes, who was the mother of Tom Byrnes, who was the owner of unit 1 at the strata plan where I was the office bearer. And she rang me up and said that Tom doesn't want me to make any complaints about any defamations. And she said that she thought that it would lead to a devaluation of the units when they were sold. And I said, I didn't think it really would because this matter would be over at some point.
And then she said, "Well, I'm going to take over in the future and get this strata plan back on track." And then she said, "I don't want you at my elbow." So I understood that she had certainly read everything and took it to heart and wanted to - to take over as office bearer and did not want me at her elbow and on - even on the strata committee. So she certainly had read everything and had a negative opinion of me."
Mr Byrnes, described as the owner of unit 1 (CB 757) in which their son Tom lived, was a real estate agent. It is not in dispute that his name was on the email recipient list although he did not attend the meeting and had never played any part in the management of the building. On the day of the auction he was seen by the plaintiff speaking to people attending the auction. She heard him say "She wasn't fixing them." and "There's been a lot of trouble" - "a lot of trouble in the building." (Tcpt, 28 March 2023, p 127)
[32]
Common law qualified privilege
First, the privileged occasion must be identified: KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig v Bowden (2020) 101 NSWLR 729; [2020] NSWCA 28 ("KSMC") at [39]. That was something of a difficulty on the facts of that case, as the defendants were gratuitously writing to their customers about the circumstances of departure of one of their employees. In the present case, the privileged occasion is readily identifiable as being the upcoming annual general meeting where part of the business to be conducted was the election of a committee and office bearers.
[33]
Did the defendant have the requisite social or moral duty?
Mr Rasmussen submits that the defendant did not have the requisite social or moral duty for the following reasons:
1. The defendant had entered into a contract for service and was supplying services to the owners corporation for remuneration;
2. The plaintiff was the elected representative of the owners corporation and the defendant was obliged by a statute (clause 9 of Schedule 1 of the Regulation) to act in accordance with the instructions of his client, that is the owners corporation, which was represented by the plaintiff because she was office bearer and contact person;
3. The defendant's allegations against the plaintiff were not raised first with the plaintiff;
4. The defendant's allegations against the plaintiff were not raised with the strata committee;
5. There was ample opportunity to do both of the latter two things because most of the allegations made by the defendant in the matters complained of involved events which had happened in 2019; and
6. If a social or moral duty is owed at all, it is owed to all owners, not a subset of 2/3 of them chosen by the defendant.
At paragraph 25 of the Particulars of Defence to Amended Statement of Claim the defendant identifies the privileged occasions as being "pursuant to a social or moral duty to do so and specifically, to communicate to the owners and managing agents of Strata Plan 2533, information that related to the management and administration of the Strata Plan."
An interest of the kind particularised is clearly capable of giving rise to a duty. The concept of "duty" does not have a narrow or technical meaning; all that is required is a social or moral or economic interest sufficiently tangible for the public interest to require its protection. It is used in the "broadest popular sense", as in when "a man is interested in knowing a fact" (Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366; [2004] HCA 5 at [71] (McHugh J) and [148] (Gummow J)).
As noted above, the issues of sufficient connection and apparent relevance must be addressed in relation to each of the matters complained of. One of the difficulties I had with both sets of submissions was that qualified privilege issues were, in the main, addressed to all three at once. Apart from the extra basis for relevance for the second matter complained of, the parties do not seem to have considered that qualified privilege may be made out for one or another but not all of the publications.
[34]
Publication to recipients with the necessary interest
Mr Rasmussen submitted that, while owners clearly have the necessary interest, agents/property managers and tenants do not.
First, as to managing agents who represent the owners, he argues that there is no reference in the SSMA to agencies or managing agents and they have no entitlement to attend meetings or play a part in the management or administration of the strata plan. Even if the managing agents who received the publications did have such an entitlement, there has been no evidence adduced by the defendant that these persons have authority, as opposed to being a mere "postbox" (submissions, paragraph 65). It is also possible that emails sent to "generic email addresses" (submissions, paragraph 64) may not be received or read by the person who is in fact the managing agent.
Second, as to tenants, Mr Rasmussen concedes that a tenant must be given the Agenda for a general meeting (SSMA Schedule 1, s 11) and is entitled to attend that meeting (SSMA Schedule 1, s 21) but otherwise does not have the necessary interest as he is not entitled to see the other documentation unless the owners corporation so decides (SSMA Schedule 1, s 11).
I do not accept these submissions. The concept of "interest", in terms of reciprocity, should not be restrained by "narrow limits" (Toogood v Spyring (1834) 1 Cr M & R 181 (at 193); 149 ER 1044 (at 1049-1050)). References to this statement by Parke B are described as "legion" in number by McColl JA in Holmes a Court v Papaconstuntinos [2011] NSWCA 59; Aust Torts Reports 82-081 at [79]. Holmes a Court v Papaconstuntinos is an important decision as it represented a rejection of a series of its earlier decisions where qualified privilege was interpreted in an increasingly narrow way: Moit v Bristow [2005] NSWCA 322; Goyan v Motyka [2008] NSWCA 28 at [73], [77], [86], [88]; Lindholdt v Hyer [2008] NSWCA 264 at [91] - [93] and [162]; This reached a high point in Bennette v Cohen [2009] NSWCA 60 at [21], [25], [60], [145], [151] and [211]; Fraser v Holmes (2009) 253 ALR 538 and the unfortunate case of Dillon v Cush; Dillon v Boland [2010] NSWCA 165 where the matter complained of consisted of one of two persons charged with investigating misconduct made a remark to the other. The Court had referred favourably, in these judgments, to the interpretation of the defence in the dissenting judgment of McHugh J in Bashford v Information Australia (Newsletters) Pty Ltd, where McHugh J considered that where a publication was voluntary, it would not be protected unless there was a "pressing need" for publication. In Holmes a Court v Papaconstuntinos, McColl JA explained some (but not all) of these earlier decisions at [5]-[6], [12], [15]-[18] and [140] by stating that the voluntary nature and timing of the publication were not decisive as to whether that defence was made out, but that voluntariness was nevertheless a relevant matter, and there was no occasion for overruling these previous decisions (at [110] per McColl JA). There is no occasion for the winding back of the clock to restore these earlier restrictive views of interest.
[35]
Was the occasion sufficiently connected?
Mr Rasmussen submits that each of the matters complained of was not made on a protected occasion, for a series of reasons:
1. The matters complained of were published to three classes of recipients (submissions paragraphs 46 - 48) and two of those three groups did not have the necessary interest (submissions paragraphs 63 -79).
2. The defendant did not have the requisite social or moral duty, for the reasons set out at paragraph 105 of the submissions.
3. Privilege only attaches to defamatory imputations that were relevant to the privileged occasion. Where a potentially privileged communication consisted partly of irrelevant matter, qualified privilege would attach only to that part which is relevant to the occasion (submissions paragraphs 107 - 118).
4. An additional reason for the second matter complained of not being made on a protected occasion was that the trust account was out of balance for eight months (between September 2019 and May 2020) which was a contravention of clauses 22(3), 26(6) and 29. Conformably with public policy reasons explained by the High Court in Aktas v Westpac Banking Corporation Limited (2010) 241 CLR 79; [2010] HCA 25, qualified privilege should not apply.
Some of the material in the matters complained of is clearly relevant, as it provides information about the upcoming meeting. Mr Rasmussen's submission about absence of interest appears to be directed to that portion which attacks the plaintiff as opposed to advising the time and place of the meeting and the like. Those precise portions are not delineated; each of the publications deals with issues arising for the owners, in the course of which the defendant is critical of the plaintiff, and unscrambling the omelette is difficult at times.
Mr Lewis, in reply, drew my attention to Gough v Squillacioti, which also concerned statements made in the course of an owners corporation meeting where there were complaints similar to the present, the allegations in the matters complained of were made on a protected occasion because of their link to the subject matter of the meeting. Smith SC DCJ stated:
"[40] That context shows that there was a direct and immediate connection between the email and the management of the strata scheme. The very issue dealt with was whether the scheme should be continued to be managed until the AGM (or at all) by All Strata.
[41] On 26 August 2019, Julian Saltmarsh, another member of the strata committee, emailed the defendant (copying in the other members) asking him to organise a meeting to discuss matters to be raised at the AGM. The email complained of was sent then, in anticipation of the AGM where the management of the scheme was to be decided and, in particular, the issue of who was to manage the scheme. After an introduction referring to the AGM, the email has a heading "Then why is the levy so high?" Under that heading the email effectively states that the plaintiff's actions and attitude has led to this by wasting strata money. Each of the statements made in the email relates to that assertion. Understood that way, there is a direct connection between the occasion of privilege and each of the statements made in the email now complained of.
[42] The fact that the email raised the past issues (the dog and the garage) does not sever that connection. Those, too, concerned issues of management and in those instances, went to who should be in control of it."
[36]
Conclusions: an occasion of qualified privilege established for all three publications
The defendant has established that each of the matters complained of was published on an occasion of qualified privilege at common law. (I agree with Mr Rasmussen that the defence of qualified privilege goes to the matter and not to the imputation: Murray v Raynor at [22].) The onus of proof now switches to the plaintiff who, in order to defeat the defence, must discharge the very heavy burden, on the Briginshaw standard, of establishing malice in relation to each of the matters complained of.
[37]
Malice: the relevant principles of law
Mr Lewis has provided a written summary of the relevant principles of law with which Mr Rasmussen largely agrees. Both parties provide an extensive discussion of the relevant authorities on the issue of malice generally. Although not referred to in those submissions, the correct approach, where more than one publication is relied upon, is that the court should determine malice in relation to "each of the impugned publications … made, the impugned publications themselves, and each of the other publications relied upon by the plaintiffs in support of their contention that publication of the impugned publications was actuated by malice" (Lorbek v King [2023] VSCA 111 at [87]).
The main issue between the parties is whether the defendant knew, when he set out the attacks he made on the plaintiff, that what he was saying was false. As Mr Lewis's submissions appear to play down the importance of knowledge of falsity in terms of improper motive, I have set out the relevant authorities on this point in some detail.
Mr Lewis cites two decisions (Henderson v London Borough of Hackney [2010] EWHC 1651 (QB) and Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57) as authority for asserting that findings of malice are "rare".
In Henderson v London Borough of Hackney, the plaintiff had been dismissed from a school for gross misconduct after she accessed pornographic materials at work and sent one to a colleague. After her dismissal, the plaintiff obtained a position in another school. When the Human Resources director at the first school found out, she notified the second school of the disciplinary proceedings and result. The plaintiff, who drafted her own statement of claim gave the following particulars of malice:
""Olly Cochrane and/or the Defendant did not have a shred of evidence for the very serious and grave allegation it made that the Claimant was dismissed for conduct 'involving sexual harassment through the possession and display of explicit pornographic works at school'."
Eady J considered that it was "quite unrealistic" to suggest that the facts pleaded above were more consistent with malice than with its absence. It was in the context of these facts that Eady J used the word "rare" to describe malice findings (at [35]):
"[33] It has been confirmed by the Court of Appeal in Telnikoff v Matusevitch [1991] 1 QB 102, [1990] 3 All ER 865, [1990] 3 WLR 725 and in Alexander v Arts Council of Wales [2001] EWCA Civ 514, [2001] 4 All ER 205, [2001] 1 WLR 1840 that, in order for a Claimant to succeed in proving malice, it is necessary both to plead and prove facts which are more consistent with the presence of malice than with its absence. This is one of the reasons why, in practice, findings of malice are extremely rare.
[34] It is thus reasonably clear, as a matter of pleading practice, that allegations of malice must go beyond that which is equivocal or merely neutral. There must be something from which a jury, ultimately, could rationally infer malice; in the sense that the relevant person was either dishonest in making the defamatory communication or had a dominant motive to injure the Claimant. Mere assertion will not do. A Claimant may not proceed simply in the hope that something will turn up if the Defendant chooses to go into the witness box, or that he will make an admission in cross-examination: see Duncan and Neill on Defamation at para 18.21.
[35] It is not appropriate merely to plead (say) absence of honest belief, recklessness or a dominant motive on the Defendant's part to injure the Claimant. Unsupported by relevant factual averments, those are merely formulaic assertions."
[38]
Inferences to be drawn in relation to malice
The plaintiff also asks me to draw inferences which would support the findings of fact on malice.
The first of these is the Jones v Dunkel inference in relation to each of the particulars of malice, in that the defendant, although sitting in court for the whole of the hearing, elected not to give evidence. In order to consider this issue I must first determine whether the plaintiff has discharged the onus of proof in relation to each of the particulars. I have accordingly set out my Jones v Dunkel inferences for each particular of malice separately after I have determined whether the onus has been discharged.
The second relates to inferences which can be drawn from failure to plead other defences. In Papaconstuntinos v Holmes a Court (2012) 249 CLR 534; [2012] HCA 53, Heydon J (at [57]-[58]) drew the conclusion, from the absence of a justification defence and the statutory defence of qualified privilege, that the respondent had conceded that he had published untrue material and he had conceded that his conduct in doing so could not be defended as reasonable.
This passage has not been the subject of discussion or comment in other judgments in the decade since it was handed down. I am reluctant to consider it here. The entitlement to plead only a defence of common law qualified privilege for a limited publication such as the present is self-evident, and the defendant has pleaded justification to one of the imputations, so I consider that the inferences Heydon J stated were available do not apply.
Mr Rasmussen made alternate submissions that, if the defendant was not in fact aware of the falsity, he published recklessly. I have found that the defendant did in fact know of the falsity in relation to all factual issues identified by Mr Rasmussen in his list of eight issues, so I have not considered this alternate claim.
[39]
Evidence alleged to amount to malice
What is proper evidence of malice? In Mowlds v Fergusson (1939) 40 SR (NSW) 311, Jordon CJ set out the kind of evidence that a plaintiff may lead:
"Evidence that a person was animated by express malice in making a defamatory statement upon a privileged occasion, ie that he made the statement for some other purpose than that which the occasion warranted, may be intrinsic or extrinsic. Extrinsic evidence may be supplied by evidence of facts existing before, at, or after the time when the statement was made. It may be supplied by proving that the defendant on a different occasion had some particular disposition or inclination, or desire to serve some particular purpose, if there be also evidence which enables the inference that in making the defamatory statement on the privileged occasion he was actuated by a desire to indulge that disposition or inclination or to promote that purpose, and not to use the occasion for its legitimate purpose. When it is sought to do this, there must be evidence which makes it probable that the mental attitude of the defendant proved to have existed on the other occasion existed on the privileged occasion in question also and was then operative to influence him to make the defamatory statement. When the improper purpose which is alleged to destroy the privilege is a desire on the part of the defendant to injure the plaintiff by reason of personal illwill towards him, evidence that on a later occasion the defendant manifested illwill towards the plaintiff may supply the necessary evidence unless it shows also that the illwill arose out of something occurring subsequently to the privileged occasion."
(At 327-8; see also Spautz v Williams [1983] 2 NSWLR 506 at 521 and Lorbek v King at [175] ff.)
The plaintiff particularised a series of matters where the statements made by the defendant were demonstrably known by him to be false, and were made for the dominant improper purposes of having her removed from the owners corporation committee and putting the blame on her to cover up his own mistakes:
1. The false claim that the plaintiff insisted on using BIM to repair the floor Lot 7 although their quote was higher and obtaining a second quote unnecessary (Reply to defence 2(j)(i) and (ii) and 2(l) (amended Reply)).
2. Water and pressure testing (Reply to defence 2(i)(iii) and (iv)).
3. Purple Plumbing and Philip Kauter Plumbing (Reply to defence 2(j)(v) and (vi)).
4. The balance sheets (Reply to defence 2(j)(vii)).
5. Insurance (Amended Reply to defence dated 28 March 2023, paragraph 2(k)).
6. "At least 12 emails" (Amended Reply to defence 2(m)).
7. Unfounded allegation about the defendant illegally withholding $618.28 (Amended Reply to defence 2(n)).
8. The defendant's conduct at the AGM generally (Amended Reply to defence 2(o)).
[40]
Wasting money: the two quotes for the floor of Lot 7 (Reply to defence 2(j)(i) and (ii) and 2(l)) (amended Reply).
These allegations relate to the circumstances in which the plaintiff obtained a second quote for building works (from BIM) which the defendant claimed was higher than the quote he had obtained (from DJE) as well as unnecessary, and thus financially irresponsible and incompetent. The high point of the allegations in paragraph 7 of the third matter complained of is the attack on the plaintiff's engagement of 'BIM at a cost of $11,000+' ("highlight" in all senses of the word, as these words are in fact highlighted in the original). By comparison, the defendant asserts, 'DJE not only quoted the modest sum of $330 for "the same quotation" (again, emphasised in the original) but actually even did not charge that modest sum, instead giving "a free advise [sic] that no leaks are evident" (again, emphasised in the original). In addition, BIM wanted over $3,000 more for the same work, the defendant claimed. To underline the plaintiff's irresponsible conduct, her emails authorising payment of progress claims - but not the quotes on which these were based - are annexures to the third matter complained of (CB 48, 53, 58).
As set out below, all of these statements were incorrect. Not only was BIM's quote lower, but they picked up on a serious problem which DJE had missed, which they also quoted for. It was not only proper but required, under the by-laws, for there to be a second quote for this kind of work. The high point of the defendant's response is to argue that, by attaching about 45 pages of documents (which Mr Rasmussen points out were carefully curated to support the defendant's claims of overcharging and irresponsibility), the defendant provided the recipients "all the information they required to determine the truth or falsity" and "was being transparent with the recipients and taking care not to conceal information from them (defendant's submissions, paragraphs 48 and 49).
The plaintiff's explanation of the outright untruthfulness of the defendant's claim (Tcpt, 27 March 2023, p 36(13-28; 45-47; 47-48, 49 and 118-120)) was not the subject of cross-examination. She said that on 10 October 2019 she obtained a BIM quote for the work DJE had previously quoted on for a sum of $6,435 (CB 343-351 Tab 7), which was less, not more, than the quote from DJE Services (which was for $8,778), as she pointed out in her email to the defendant of 10 October 2019 (CB 342 Tab 57, Tcpt, 27 March 2023, pp 45-46). Mr Rasmussen calculates that the DJE quote was actually 36% higher than the BIM quote for the same work.
[41]
DJE/PKP Water and Pressure testing (Reply paragraphs 2(j)(iii) and (iv))
The defendant states, in the third matter complained of (CB16 Tab1) that DJE quoted for investigation in unit 7 for $330, but eventually provided a free quote that no leaks are evident. The defendant is accused of wasting $638 by getting a quote from Mr Kauter, which was "a bit of waste considering that the information was already available" and, what is more, available for free.
The need for replacement of the magnesite flooring in Lot 7 appears have been caused by slow leakage from the bathroom shower or pipes which caused damage to the magnesite (CB 310 Tab 51.1). This work had to be done before the floor was replaced (CB 310 Tab 51.1; Tcpt, 27 March 2023, p 38(5)-(9)). Lot 7 was being renovated at the time so there was some urgency. The plaintiff knew the builders had started work on Lot 7 and asked whether the testing could still be carried out while all the shower heads and taps had been removed (CB 340 - 341).
The owners, the property managers, the plaintiff and Mr Gitman agreed (Tcpt, 27 March 2023, p 36(35)-(36)) that pressure testing of the pipes in Lot 7 should be done immediately and that they should also check for possible leaking from the floor in the shower recess (Tcpt, 27 March 2023, p 36(36)-(48)). DJE quoted $165 for the pressure testing and $165 for the dye test to the shower recess (CB Tab 51, p. 308). However, they had come to inspect without informing the plaintiff, which was contrary to the plaintiff's request, so DJE withdrew their quote fee.
After their inspection, the defendant simply informed the plaintiff, without producing any report, that there were 'no leaks found from today's inspection' (CB Tab 53, p. 314). The plaintiff was not satisfied with being told second hand that no leaks were found (Tcpt, 27 March 2023, p 44(2)-(13)), so she asked the defendant to engage Philp Kauter Plumbing (PKP) to pressure test the hot and cold water pipes in Lot 7 and dye test the shower recess (CB 339 Tab 54.1; CB 338 Tab 54). 205. The Plaintiff was present when PKP did the testing together with a person from Aquasearch (Tcpt, 27 March 2023, p 44(21)). PKP were very thorough; their investigations required two attendances separated by about two and a half hours (for the dye test), following which they provided a written report.
The plaintiff was present when the relevant work was being done. She described the tests and work accurately and is clearly familiar with building issues. I accept her evidence as to what steps were carried out, as I have in relation to all issues in these proceedings.
[42]
3(a). Purple Plumbing and Phillip Kauter Plumbing (Reply paragraphs 2(j)(v) and (vi))
I have dealt with two Purple Plumbing issues here. The first is that the defendant claimed, in paragraphs 4 and 7 of the first matter complained of, that, in addition to the problems he had with getting Purple Plumbing to refund the money, they missed the leak in Unit 6.
Mr Rasmussen submits that the defendant knew, however, that the work performed by Mr Kauter was for another leak entirely. Nor was Mr Kauter's work remedial in the sense that he was repairing work already completed by Purple Plumbing. It was not true, to the defendant's knowledge, that Mr Kauter had to carry out work costing "$2,300+" (paragraph 7 of the matter complained of) as a result of their oversight.
Purple Plumbing's first visit, in late May and early June 2019, was to investigate a leak from the overflow from the hot water into Lot 2, as their invoices for two items dated 31 May and 7 June show. While investigating a leak from Lot 11 into Lots 9 and 7, they found that it was attributable to guttering overflow (CB 273), which meant that the roof eaves needed cleaning. This was supported by thermal engineering photographs (CB 250 - 1). It was also supported by the place of water penetration, as this was coming in above the windows and near the ceiling. Purple Plumbing checked whether this was a problem for Lot 6 and found that "Lot 6 showed no water leaks with thermal camera" (CB 268). They confirmed this in a report (CB 277) and O'Dowd Roofing confirmed this as well (CB 275). It was for this reason - roof blockages causing water to leak down the walls - that O'Dowd Roofing was called in. They cleaned the gutters prior to 31 July 2019 (CB 294).
Two weeks later, on 26 July 2019, Mr Vincent in Lot 2 reported water dripping down his wall (CB 283 - 285) and Tom Byrnes, in Lot 4, made a similar complaint later that same day. The plaintiff and defendant had a phone conversation and Mr Kauter was appointed as the plumber. He found a hot water pipe in Lot 6 had burst. That hot water pipe was nowhere near the ceiling. In other words, there were multiple leaks, not just one leak.
I am satisfied that the defendant knew that there were multiple leaks in the building, and that he knew, from the detailed descriptions in the invoices, that these leaks were in different parts of the building and were occurring for different reasons. The statements in paragraphs 4 and 7 of the first matter complained of are untrue.
[43]
3(b). Purple Plumbing Invoice #786
Although a separate issue from the above, the claims about Purple Plumbing taking six months to repay the overpayment, requiring "HUGE effort [sic]" (CB 469) to recover this sum, are all false.
The defendant refers in the first matter complained of to a "2nd payment", suggestive of a second demand for the same amount. The defendant said at the AGM that Purple Plumbing had in fact issued two invoices for the sum of $2687.85, in a deliberate attempt to get two payments instead of one. This is not correct. There was only ever one bill invoice (no #773: see CB 268) sent for this sum, on 17 June 2019, and it was paid four days later on 21 June 2019. Purple Plumbing never sent another invoice for this sum of $2687.85 and the second payment on 25 July 2019 was made with reference to the 17 June 2019 invoice for the entirely different sum of $1,045.00 (CB 292).
The defendant's mistake probably arose from Purple Plumbing attending on a second occasion in July in relation to Lots 7 and 9 (their previous visit had been in late May and early June concerning other Lots) and sending a separate account no #786 for $1,045.00 (CB 273) under cover of an email from the plaintiff of 27 July 2019 (CB 280 - 282). The second payment was sent to Purple Plumbing on 25 July 2019. The defendant paid the first invoice a second time on that same date, probably in mistake. There is nothing in the Court Book indicating when the second invoice for $1,045.00 was paid, or if it was paid at all.
Although the defendant refers to his own "HUGE EFFORT" (CB 469) to recover this sum ("many, many emails": CB 469), those efforts consist of four very short emails sent by a Ms Taylor in the defendant's office between 7 November and 3 December 2019 (CB 386 - 391). It is clear from the text of the first of these emails that there is no prior correspondence concerning this request. The plaintiff's recollection is that Purple Plumbing told her that they refunded the sum at the end of 2019 (CB 469); the defendant says that it was 4 February 2020. If it was not until 4 February 2020, one wonders why Ms Taylor did not keep writing to them between 3 December 2019 and 4 February 2020 in the same diligent way.
Mr Rasmussen has provided a persuasive analysis of the bank documentation to suggest that the plaintiff was indeed correct and that the repayment was made at the end of 2019. I am persuaded, however, by the cessation of Ms Taylor's correspondence that it was received early in December 2019; this is supported by the plaintiff's later reply to the defendant (CB 469). In other words, Purple Plumbing took about a month to return the double payment.
[44]
The shortfall of $618.28 in the balance sheets (Reply paragraph 2(j)(vii))
This particular relates to paragraph 2 in the second matter complained of, which states that the reason for this shortfall (which the defendant was obliged to refer to in the Agenda for the AGM as part of item 1) was that "the water bill was entered with the wrong date during bank reconciliation" (CB 14 Tab 1). Although the defendant sought to minimise the problem as being a simple case of recent error caused a wrong date, that is not what occurred.
The books were in balance when the defendant took over the role as strata manager in June 2019; there were no outstanding or wrongly entered payments of any kind. The discrepancy in the accounts occurred in the course of entries made after the defendant took over, and remained on the books for a period covered by four quarterly reports. This was obvious from any analysis of the accounts and was found by the plaintiff, not the defendant.
Despite the books for the previous year being in balance, the defendant produced a Balance Sheet for the AGM (CB 499 Tab 94) which purported to show, for the first time, a year later, an entry for net owners' funds of $618.28 for the previous financial year. This resulted in confusing entries in that 'Net assets of -$618.28' and 'Net owners' funds of $0' are both shown (CB 405 Tab 69 and CB 411 Tab 72). However, both the Net assets and Net owners' funds are shown as -$628.28 on the Balance Sheet the defendant provided with the draft agenda (CB 422 Tab 6) and again for the final AGM Agenda (CB 400 Tab 4).
Concern over a sum of $618.28 may seem unduly suspicious, but the sudden change from being out of balance to an explanation of these funds relating to the previous year when in fact those books had balanced caused the plaintiff concern. She sent an email to the defendant asking "where this missing cash amount has now disappeared to in the balance sheet and financial statements etc for 2019." This is what caused the defendant to contact Justine Goldsborough in his office saying "I have been accused of stealing" (CB 568 Tab 98). In fact, the plaintiff had said no such thing. I draw the inference that he said this as an excuse to get help in finding out how to account for this money because he did not know how to do it. Although he claims that he found an entry error after consulting Ms Goldsborough (CB 577), he issued "an amended BS after the adjustment" (CB 14 Tab 1), in order to replace the incorrect balance sheet he had previously issued for the AGM.
[45]
Insurance (Reply paragraph 2(k))
This particular of malice relates to the third matter complained of. Mr Rasmussen submits that, as was the case with the BIM/DJE quote, the defendant made false statements which amounted to comparing apples with oranges and sought to support his allegations by leaving out documents that would show up his lies. He did not achieve a reduction in premium of nearly $300 by using a different broker; he increased the legal defence expenses contribution from 0% to 10%. He did not attach both insurance certificates; he left out the important pages from the full document which is to be found at CB 304-7, Tab 50. It is untrue that most of the policies were "increased"; comparison of the two shows that none of the policies were increased. Finally, he changed brokers and negotiated the changes to the legal defences contribution without consulting the plaintiff, although changes of insurance are matters for which he was obliged to consult the committee, providing copies of the competing quotations.
For the reasons explained by Callinan J in Rogers v Nationwide News Pty Ltd, supra, in these modern technological times, it is now more difficult to explain away failure to include specific documentation where it is stated to be attached. The defendant knew the false impression he was creating by this selective reading of the material. I draw a Jones v Dunkel inference for his failure to give evidence.
[46]
"At least 12 emails" (Amended Reply paragraph 2(m))
The relevant material is set out in the section of this judgment on justification of imputation 4(d).
Mr Rasmussen submits that the defendant could not possibly have made the mistake of saying the plaintiff had sent 12 emails when she had only sent seven. The defendant admits it did not take him 2.5 hours and I note that no actual evidence of the cost of the 1 hour and 20 minutes that the defendant agrees it took has been provided. A perusal of the 4 replies he sent does not reveal how this could have been dealt with in a 5-minute phone call and I also note that the defendant inconsistently warns her that all future communication must be in writing.
This is one of a series of inflated claims the defendant made about the number of emails the plaintiff sent. By the time of the AGM, the number of emails the plaintiff sent to him generally were described as being variously in the region of 2,000 - 2,500.
While a degree of exaggeration can be accommodated as not amounting to malice, the defendant's complaints about the plaintiff sending so many emails on one day was another part of his plan to discredit the plaintiff so as to avoid having to deal with challenges to his own incompetence in managing the owners corporation.
Having made those findings, to the necessary degree as required by Briginshaw (as is the case with the other particulars), I am satisfied that I may draw a Jones v Dunkel inference from the failure of the defendant to give evidence.
[47]
Making unfounded allegations (Reply paragraph 2(n))
The plaintiff did not make allegations of stealing. She described the sum of 618.28 as "missing" (twice) and asked where it had "disappeared to". There was a shortfall and the missing sum had to be accounted for.
I am satisfied that the defendant made this allegation in the hope that it would discredit the plaintiff after she complained that the Financial Statement provided for the AGM told a different story. The defendant knew the plaintiff was right to criticise him for his incompetent bookkeeping, and I infer that in part from the fact that he accepted that he had to apologise for it, in circumstances where he had done nothing about his errors for nearly nine months.
As with the other particulars about which evidence is led, I am satisfied that this is evidence of a malicious motive established to the Briginshaw standard and I draw an inference conformably with the principles in Jones v Dunkel concerning the defendant's failure to give evidence.
[48]
The defendant's conduct at the AGM generally (Amended Reply to defence 2(o))
The plaintiff points to the following:
1. During the AGM he muted the plaintiff 33 times, thereby preventing her from explaining to those present the allegations made against her, including those made a few hours before the meeting, which were particularly serious. This was despite his statements that he looked forward to discussions with "all" owners (CB 11) and saying that he would be more than happy to answer all other questions. In fact, he muted her in anticipation that she would respond in a way that exposed his lies.
2. Repeating the defamatory statements he had made in all three matters complained of and not permitting the plaintiff to respond. Even though the question is whether the defendant has been motivated by malice must arise from the matters complained of, repetition of the libel in other publications not sued upon may still be evidence of malice: Lorbek v King at [73] (four publications sued upon but another nine referred to).
3. Threatening to resign as strata manager if the plaintiff was to have anything further to do with the committee. This was in fact an unsuccessful threat because the plaintiff was still elected to the position of secretary, presumably because the other owners hoped she would go on doing all of the work as before.
The defendant's conduct of the meeting as preparer of the agenda, chair and minute taker at times contravened legislative requirements and good meeting practice. His refusal to permit the plaintiff to chair the meeting and an impromptu call for a vote on this was a breach of the legislation (Read v The Owners-Strata Plan No 2533 [2021] NSWCATAP 218 at [16(2)]; the appeal panel concurred (at [48])).
The plaintiff's submissions note the defendant's constant referral by him to having to keep to an agenda (submissions, paragraphs 294 and 295). As the plaintiff pointed out in her email of 8 May 2020, in crafting the agenda, the defendant took the opportunity to make the Minutes of 23 December 2019 effectively be replaced by later orders made at the 11 May 2020 meeting. This is despite those Minutes having been circulated to members for the purpose of informing them of the decisions of the owners corporation at that meeting, as the plaintiff noted in her email of 8 May 2020, when she sent him a fresh copy of them:
"Motions on the AGM for 11/5/2020 were passed at a properly constituted Strata Committee Meeting on 23/12/2019 and the Minutes were distributed to all owners and you (see attached).
…
Please explain in writing why you would not act on these lawful Resolutions of the SC for SP 2533 at the time they were made and you decided to place the same Motions on the AGM ~ 5 months later thus challenging the decisions of the members of the SC." (CB 624)
[49]
The dominant and improper motives for the publications
I have set out eight separate instances, each of which demonstrates that the defendant made statements that he knew were false. Knowledge of falsity is "almost invariably conclusive evidence of malice" (Roberts v Bass at [76]). However, it is not sufficient of itself. In Lloyd-Jones v Allen [2012] NSWCA 230 at [77], Nicholas J (with whom Beazley JA and McColl JA concurred), helpfully sets out the explanation of these principles in Roberts v Bass at [76] - [77], [96] - [97] and [103] - [104] as well as the observations of Lord Diplock in Horrocks v Lowe [1975] AC 135 at 150 - 151; Lord Diplock stressed that "the desire to injure must be the dominant motive" (at 149). In determining malice, not even personal dislike (Horrocks v Lowe at 151) bias and even ill-will (Slater v Ecosol Pty Ltd [2023] SASC 99 at [557], citing Roberts v Bass at [76]; Goyan v Motyka [2008] NSWCA 28 at [98]) are sufficient. Malice is confined to "any improper motive or purpose that induces the defendant to use the occasion of qualified privilege to defame the plaintiff" (Roberts v Bass at [75]).
The defendant made at least eight demonstrably false statements about the plaintiff, as set out above. Each of them relates to specific issues raised in each of the matters complained of (such as the Purple Plumbing double payment, occurring in the first matter complained of) but most of them are evidence of malice for all three publications (such as the claim of sending at least twelve emails). Each of them has a common factor, namely a mistake by the defendant which, in combination with the other mistakes could have cost him his position as strata manager or worse. For example, he was responsible for double-paying Purple Plumbing and the plaintiff had nothing to do with his asserted huge efforts to recover this over six months (a claim which was false in any event). He was responsible for the shortfall due to poor accounting, which he had to fix and apologise for; the plaintiff was not to blame for this and in fact she was the one who pointed it out. As for the BIM/DJE quotes, it was because the plaintiff obtained the necessary quote from a more skilled plumber that the concrete cancer problem was identified and rectified. Despite the advantages of electronic documentation now making collation of material so much easier (see the perceptive observations of Callinan J in Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327; [2003] HCA 52 at [125]) the defendant carefully withheld from the third matter complained of, the correspondence from Mr Muchmore and the BIM quote which would have shown this. This is evidence of malice amounting to an abuse of the privileged occasion (Australian Broadcasting Corporation v Comalco Ltd [1986] FCA 381; 12 FCR 510 at [114]). It was done so that he could accuse the plaintiff of insisting on accepting a more expensive quotation when this was not the case.
[50]
Conclusions concerning malice
I am satisfied that the defendant, who knew of the falsity of the allegations as set out above, sent the three matters complained of for the dominant improper purpose described above, namely to protect himself from the consequences of his actions by falsely blaming the plaintiff for wrongdoings she had not committed. This was a sustained campaign of multiple accusations in three separate publications. This motive is clear evidence of malice which defeats the defence of common law qualified privilege in relation to each of the publications.
In the event that I have erred in my finding as to what the dominant improper purpose was, I note that in Lesses v Maras at [195] and in Machado & Anor v Underwood & Anor at [141] observations were made that malice may still be found even where there is inability to identify the precise motive.
A good example of this problem occurred in Coles Myer Limited v Webster; Coles Myer Limited v Thompson [2009] NSWCA 299, where a sales assistant called the police and accused the plaintiffs (fairly obvious members of the LGBTQ+ community) of fraudulent conduct. The trial finding of malice by reason of ill-will was upheld on appeal, largely because the obvious falsity of the allegation, but it was never clear where the ill-will came from or why the shop assistant would have taken such an extraordinary step after a few minutes of conversation with the plaintiffs. In the ensuing decade, thanks to social media, the phenomenon of shop assistants calling the police because of vindictiveness or prejudice against persons of colour, the intellectually disabled and/or LGBTQ+ has become widely recognised, but only after a series of respectable members of the community found themselves the target of such conduct, not only from shop or hotel employees, but also on occasion from the police. Similarly, in Lassanah v State of New South Wales (No. 3) [2010] NSWDC 241, police stopped and searched a black social worker and his intellectually disabled patient after shop assistants called police immediately after they came into the store. The plaintiffs were awarded damages for false imprisonment but an award for defamation was set aside on appeal as there was no evidence of malice or improper motive.
Cases such as these demonstrate that defining the improper motive may in some cases be genuinely difficult. The decisions of Lesses v Maras at [195] and Machado & Anor v Underwood & Anor at [141] would still permit a finding of malice where the motive is unclear. Where the defendant does not give evidence, the court should also be entitled to take that factor into account. Accordingly, if I have erred in my determination of what the improper motive is, or there is insufficient evidence of it, malice can still be made out.
[51]
Justification
The defendant pleads the defence of justification to imputation 4(d).
In the weeks leading up to 29 April 2020, the plaintiff had sent emails to the defendant asking for an explanation of the apparent shortfall in the accounts. In his written submissions, Mr Lewis states (at paragraph 35 of his outline of submissions) that the defendant had attempted to communicate with the plaintiff "orally" but this failed and therefore he had to spend what is called "an excessive amount of time" responding to her in writing:
"Mr Gitman reasonably attempted to orally communicate with Ms Read about that matter. That attempt failed. Mr Gitman therefore had to spend an excessive amount of time responding to Ms Read's emails in writing."
When was/were these attempts, and why did they fail? Mr Lewis's reference to "that attempt" suggests that only one attempt was made. He stated at paragraph 37 of the outline:
"Mr Gitman will seek to establish at trial that the emails he received from Ms Read between 29 April and 6 May 2020 were unnecessary and caused him to spend an excessive amount of time responding to them."
The first matter complained of inconsistently demanded that "everything should be in writing from this point" while claiming that the plaintiff unnecessarily emailed the defendant "at least 12 times over the issue that could have been clarified in 5 minutes phone call [sic]".
The plaintiff's cross-examination on this issue did not deal with all the correspondence between 29 April and 6 May 2020 but focussed largely on the claim that her complaints could have been dealt with in a five-minute phone call. She was not cross-examined about the defendant having "attempted" to contact her in the manner described in the outline of submissions.
The defendant did not give evidence.
As Mr Rasmussen points out in his submissions, from April 2020 onwards, the plaintiff's concerns were many. First, the defendant had not replied to four requests during April to prepare a draft agenda. Second, he had not responded to her concerns about the shortfall in the accounts. There was undoubtedly a shortfall, and there was no explanation until the second matter complained of, dated 7 May 2020, when the defendant admitted to the bookkeeping errors that caused the shortfall and apologised to everyone.
[52]
Conclusions concerning liability
I have found that each of the matters complained of conveys each of the imputations pleaded, and that each of them is defamatory.
The matters were published on an occasion protected by the defence of qualified privilege at common law. The defence has, however, failed for each of the matters complained of by reason of the plaintiff having discharged the onus of proof to the Briginshaw standard of establishing malice in relation to each of them.
The defence of justification to imputation 4(d) has not been made out.
The plaintiff is entitled to judgment and to the determination of damages appropriate for each of the three publications.
[53]
Damages
The plaintiff claims damages, including aggravated damages. The defendant brings a plea in mitigation.
The purposes of an award of damages for defamation are "consolation for the personal distress and hurt caused to [the plaintiff] by the publication, reparation for the harm done to [the plaintiff's] personal and (if relevant) business reputation and vindication of [the plaintiff's] reputation": Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44; [1993] HCA 31 at 60 per Mason CJ, Deane J, Dawson and Gaudron JJ. The task for the Court is to identify all of the relevant factors, to assess their significance and to make an evaluative judgment as to the appropriate award conformably with the Act.
The Court is to ensure that there is an appropriate and rational relationship between the harm sustained by the Applicant and the amount of damages awarded: s 34 of the Act.
Section 35 of the Act provides for a maximum amount of damages for non-economic loss that may be awarded in defamation proceedings. The maximum amount of damages that can be awarded for non-economic loss is $459,000 from 1 July 2023 (Government Gazette No 250 of 22 May 2023, n2023-0927).
Although there are three publications, care must be taken to avoid "double dipping" and the approach to the award of damages is for this to be one sum representing all publications, conformably with s 39 of the Act, whether there are only two publications, as occurred in Pavlovic v Karzon [2023] QCA 37 or as many as 28: Gayle v Fairfax Media Publications Pty Ltd (No 2) Gayle v The Age Company Pty Ltd (No 2); Gayle v The Federal Capital Press of Australia Pty Ltd (No 2) [2018] NSWSC 1838. Where only three of publications are involved, it is not necessary to carry out the careful analysis embarked on by McCallum J (as her Honour the Chief Justice of the Supreme Court of the Australian Capital Territory then was) in this judgment.
The heads of damage claimed by the plaintiff are:
1. The plaintiff's distress and the reasons for it: Mr Rasmussen relies upon several passages between Tcpt, 27 March 2023, pp 76 and 81. This is addressed for each of the matters complained of.
2. The effect of the publications on the plaintiff's behaviour: Mr Rasmussen points to the plaintiff's description of the profound impact of the publications (Tcpt, 28 March 2023, p 163) as well as to the observations of her husband (Tcpt, 30 March 2023, pp 298-309). The very serious impact on both her emotional and physical health was also evident while she was in the witness box, as is set out in the transcript. I will not distress the plaintiff by setting this out in detail, but the impact of the publications has clearly been both severe and prolonged.
3. The effect the publication has had on others: As well as telling the plaintiff not to sue, Mrs Byrnes told her that she was going to take over in the future to get the strata back on track and did not want the plaintiff at her elbow. In addition, Mrs Byrnes was the person who, when seeing the plaintiff at the auction of her mother's unit in December 2021, said "Oh, here they come now. The troublemakers." (Tcpt, 28 March 2023, p 126). She noticed changes in the behaviour of Nina Cruz, Larry Vincent and Randall Magro, all of whom distanced themselves from her and avoided her.
4. Her worry about this litigation (Tcpt, 28 March 2023, p 165): It has been an ordeal for her to prepare documents. Her husband confirmed this (Tcpt, 30 March 2023, p 307).
5. The impact on her position and standing: The plaintiff had been acknowledged not only nationally but internationally as a physicist. She had been a member of the Australian Institute of Physics and the American Physical Society (APS Physics) as well as the author of many scientific publications during her long career as a senior lecturer at the University of New South Wales. Imputations of the kinds of misconduct she was accused of by the defendant was very damaging to her reputation generally, as being truthful as a scientist (even after retirement) is as important as honesty is for a member of the legal profession (Crampton v Nugawela (1996) 41 NSWLR 176 at 192-3).
6. The defendant's failure and refusal to apologise: The plaintiff sent two requests for an apology prior to commencing proceedings, both of which were ignored. Her husband said that what she really wanted was an apology, not a court case, so that she could show people she was not guilty of what she had been accused of: Tcpt, 30 March 2023, p 308.
[54]
The extent of publication
The defendant admits that all three publications were made to occupants as well as some strata managers of tenanted premises of a building, in the course of preparing for the AGM. A list of 18 email addresses appears at CB 821, but other persons such as Mrs Sue Byrnes clearly had read it; I could not see Mrs Nesci or Mr Knight's email addresses, and assume that their information came via Ms Lui or their companies. Mr Rasmussen points out that eight of these addresses are to companies where other persons in the office may have read the matters complained of.
The defendant claims that evidence of publication is merely "inferential" and that the cautions expressed in David v Abdishou [2012] NSWCA 109 at [286]-[287] should be applied (submissions, paragraph 5). Mr Lewis notes that in Ell v Milne (No.8) [2014] NSWSC 175, McCallum J determined that "considerably fewer" persons than the total number to whom an email was published would have read the email the subject of these proceedings.
I do not agree that the case is inferential. Each email had a dramatic headline in bold type. The defendant referred several times to his emails at the AGM ("If you go through my emails" at CB 657) and summarised their contents (CB 657); the plaintiff, in seeking to answer them during the meeting, referred them as being sent to "poison the well" (CB 706). I am satisfied, from the plaintiff's description of her conversation with Mrs Byrnes, that she and others had read and discussed them. There might be an inferential case that others would have read this correspondence such as the incoming strata manager or potential purchasers inspecting the strata records, but Mr Rasmussen did not put this, seeking only to rely on the grapevine effect.
Nevertheless, the defendant submits that the damages will be at the very low end of the scale referring to similar factual circumstances: Murray v Raynor at [96] ($25,000, as an alternative finding), Gough v Squillacioti at [71] ($25,000 excluding aggravation, as an alternative finding); Matthews v Pigram [2020] NSWDC 526 at [59] ($20,000 as an ex parte assessment); and Balzola v Passas [2020] NSWSC 896 at [253] ($10,000 for one slander).
Mr Rasmussen refers to the grapevine effect, which Campbell J noted in Balzola v Passas at [252] "can be difficult to measure", adding that this difficulty "itself requires restraint in assessment". There is no direct evidence of any ongoing reputational damage beyond statements made by Mrs Byrnes and the plaintiff's perception of the reactions of other owners, such as on the day of the auction of her mother's unit, although I accept she continues to fear repetition of the sting of the insult. Her reputation is to be vindicated but, as Campbell J went on to note, the dominant compensatory principle is established by s 34 of the Act, namely that the amount of damages is to be calculated for the purpose of ensuring an appropriate and rational relationship between the harm suffered and the damages awarded.
[55]
Aggravated damages
The plaintiff claims aggravated damages on the following bases:
1. The defendant's failure to give the plaintiff any reasonable opportunity to respond to the allegations before they were published.
2. The plaintiff's hurt to feelings was increased by the knowledge that the defendant knew that the imputations were false.
3. The defendant's failure to apologise.
It is sometimes appropriate to consider each of the publications individually, in the event that one or more of the matters may warrant aggravated damages but not another. However, the same factors apply to all three, so I will consider them in a group.
In Pavlovic v Karzon, no challenge on appeal was brought to the award of aggravated damages. A key factor was failure to apologise, in that the defendant failed to retract the defamatory imputations or apologise for them for nearly four years, whereas an apology had been accepted by the plaintiff from another publisher. While all cases must turn on their own facts, the way in which the trial judge approached the task of assessing aggravated damages (which was not disturbed on appeal) is helpful. If anything, the factors in this case are stronger, in that the defendant did not send the emails because he was angry, but because he wanted everyone to believe that the mistakes in the administration of the owners corporation were mistakes made by a person other than himself. I am also satisfied that he wanted to punish the plaintiff out of petty spite because she had picked up mistakes that he had made, including the fact that Lot 7's builder was unlicensed.
By denying the plaintiff the chance to answer the allegations, he caused the plaintiff great hurt, as she was unable to defend herself either in answering the correspondence or at the subsequent AGM. Her knowledge of the falsity of the allegations made them particularly hurtful, as her very distressed behaviour at the AGM and in her evidence shows.
The plaintiff made two requests for an apology from the defendant before commencing these proceedings. It was important for her to clear her name. I consider the failure to apologise was wrongful because the defendant knew what he had said was false, and thus is a basis for aggravated damages.
The plaintiff is entitled to an award of aggravated damages for all three publications on all three bases put forward by the plaintiff. Conformably with Bauer Media Pty Ltd v Wilson (No 2), this lifts the cap on general damages.
[56]
The impact of MFI 5 on damages
The defendant relies, in mitigation of damages, on the evidence led in support of the defences. Mr Lewis relies upon "the truth of any imputations which were found to be substantially true and also the evidence before the court directed to a plea of justification", citing Fairfax Media Publications Pty v Kermode (2011) 81 NSWLR 157 at [86]; Pamplin v Express Newspapers [1988] 1 WLR 116 at 120; Prager v Times Newspapers Ltd [1988] 1 WLR 77 at 93 (submissions, paragraph 42).
A defence of justification was pleaded only to one imputation, imputation 4(d), and that defence failed. However, Mr Lewis also submits that a defendant is also entitled to rely in mitigation on evidence that was before the Court on an unsuccessful, or partially successful, plea of justification: Holt v TCN Channel Nine Pty Ltd (2014) 86 NSWLR 96 at [26]-[32].
None of the evidence in relation to the unsuccessful plea of justification revealed any factor capable of mitigating the damages. MFI 5 is inadmissible and I prefer the answers in cross-examination given by the plaintiff to any other evidence or document asserted to undermine this.
Mr Lewis also submits that the fact that the plaintiff took the owners corporation to the Civil and Administrative Tribunal after the 11 May 2020 AGM "would have had more of deleterious [sic] effect on her reputation than the matters complained of", adding that it is "instructive to note that despite being personally acquainted by many of the owners and agents in the Building, not one gave evidence on her behalf." (submissions, paragraph 82).
The claim that the plaintiff's reputation suffered damage in the eyes of the recipients of the matter complained of by reason of this second cause is similarly without foundation. As is made clear by the minutes of meeting of the owners corporation, it was in fact Mrs Nesci and Mr Roberts who initially went to Fair Trading to complain about Mrs Nesci's husband not being permitted to carry out building work because he was unlicensed. The plaintiff agreed to attend the scheduled mediation but Mrs Nesci and Mr Roberts then cancelled the mediation. The fact that the plaintiff, later brought further proceedings so that she could clear her name is directly related to the matters complained of.
Nor do I accept that the plaintiff had a reputation as a "troublemaker" independently of the matters complained of, or the submission by Mr Lewis that this was because of the incident with the police on 27 November 2019 (submissions, paragraph 82); if there was one topic which would not have been raised at an auction where a good sale would reflect on other units, it would be the circumstances in which renovations by an unlicensed builder had been permitted by the owners corporation, an event the owners and defendants were careful to keep off the agenda and out of discussion at the 11 May 2020 meeting. Any reputation the plaintiff had as a troublemaker occurred after, and as a direct result of, the matters complained of, and the litigation that followed. I am satisfied that, prior to that, as she said in her letter of 5 March 2020 to the defendant, there were no disputes or other issues between her and the other owners, save for the Lot 7 unlicensed builder issue, and I note those items of correspondence from the other owners which are in the Court Book were, previously, uniformly polite and friendly.
[57]
Conclusions concerning damages
Comparable awards of damages are often described as being of little assistance, and should be treated with caution because each case turns on its own facts.
Applying the relevant principles for the assessment of damages, even allowing for the removal of the cap by reason of my finding on aggravated damages, the amount to be awarded should be modest, in order to take into account the factors set out above. In the circumstances the sum I propose to award, inclusive of aggravated damages, is $35,000.
[58]
Injunctive relief
Neither the plaintiff nor the defendant have any further connection with the building. The plaintiff's mother's unit was sold in December 2021. The plaintiff gave no evidence of any continuing activity on the strata committee after the 11 May 2020 AGM. The defendant ceased having any connection with the building at about the same time. There is no evidence the defendant has made any statements about the plaintiff to any third party since the AGM.
In Carolan v Fairfax Media Publications Pty Ltd (No 7) [2017] NSWSC 351, McCallum J stated (at [13] to [15]):
"So far as I am aware, the proposition that a permanent injunction should ordinarily accompany an award of damages following the unsuccessful defence of a common law claim is unknown in any other field. The court would not, without more, make an order restraining the unsuccessful defendant in a professional negligence or motor vehicle accident claim from acting negligently in the future. I accept that the analogy is imperfect but it is appropriate to test what appears to be a premise of the plaintiff's argument. I do not think it can be said, without qualification, that the restraint of speech -even indefensible speech - necessarily or ordinarily serves the public interest.
Nor can it be said, without qualification, that the public interest is "not offended" by the restraint of indefensible defamation. The public interest is offended by any court-imposed restraint that is not reasonably necessary in the circumstances. It is tempting to think that is particularly so in the case of injunctions to restrain publication, since such orders necessarily impair or take away a person's freedom of speech. Upon reflection, however, it is difficult to articulate any principled basis for placing defamation in a special category in this context; any restraint of ordinary freedom imposed by order of the court warrants the same caution.
In my view, as a matter of principle, the critical factor in determining whether to grant a final prohibitory injunction in aid of a claim for defamation should be an assessment of the existence and degree of any threat or risk of a repeat of the publication of the defamatory matter successfully sued on in the proceedings. Such an order should only be made where the court is satisfied that the order is reasonably necessary to address that threat or risk."
Although her Honour's remarks were addressed to a media publisher who had removed the matters complained of as soon as the jury findings were handed down, the same principles should apply here.
[59]
Orders:
1. Judgment for the plaintiff for the first, second and third matters complained of in the sum of $35,000.
2. Costs reserved.
3. Liberty to apply in relation to costs and interest.
4. Exhibits retained until further order.
[60]
Amendments
25 August 2023 - typographical errors in paragraphs [49] and [101]
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.
Decision last updated: 25 August 2023
Parties
Applicant/Plaintiff:
Read
Respondent/Defendant:
Gitman
Legislation Cited (8)
Property Stock and Business Agents Regulation 2014(NSW)
The plaintiff twice sought an apology from the defendant before proceedings were commenced, the first time on 8 July 2020 and the second on 25 September 2020. No response was received and proceedings were commenced by statement of claim filed on 29 April 2021.
The defendant (paragraph 10.2 of the Defence) pleads that each of the three emails complained of was published on an occasion of common law qualified privilege, to which a Reply particularising malice has been pleaded. A defence of justification to imputation 4(d) is also pleaded.
In relation to the defence of qualified privilege at common law, the defendant must establish that the publication was made on a protected occasion. Once that is established, the burden of proving an improper purpose (and thus malice) then lies on the plaintiff. In relation to the imputation to which justification is pleaded, the sole question is whether the truth of that allegation has been made out (the burden of proof being on the defendant).
The following imputations are pleaded:
1. The plaintiff is incompetent in that she cannot discharge her duties as a member of the Executive Committee of the Owners Corporation, including ignoring the Strata Manager's advice most of the time and making decisions on her own.
2. The plaintiff mismanaged the Owners Corporation funds by approving a building contractor who overcharged.
3. The plaintiff incompetently deliberately wasted Owners Corporation funds by engaging a contractor to provide services which were unnecessary.
4. The plaintiff is knowingly reckless about the expenditure of Owners Corporation funds in that she acts against the advice of the strata manager.
5. The plaintiff incompetently caused loss and damage to the strata building and the owners corporation by ignoring the advice of the strata manager.
6. The plaintiff is a liar, in that she made a false allegation that MG Strata and BMC Management Pty Ltd had committed a criminal offence.
7. The plaintiff is the type of person who is prepared to make false, misleading and offensive accusations against the defendant and his staff committing an unlawful act with respect to the financial accounts for the Strata Plan that he is managing.
It was in the context of Pollock CB's examples that Lord Atkin went on to make the observations cited by Mr Lewis. Candles have passed into history (except as a quaint analogy for proportionality), but the trifling nature of such an allegation remains obvious, as does the example of the "lady of fashion" (perhaps in today's parlance the word "celebrity" might be more apt) who is "seen on the top of an omnibus".
The imputations arising from publications of the kind referred to by Atkin J and Pollock CB are in an entirely different class to the imputations pleaded here. Imputations of wasting an organisation's money by irresponsible conduct (imputations 4(c), 4(d), 8(a), 8(b), 8(c), 8(e) and 8(f)), falsely accusing a person of a criminal act (imputations 6(a), 6(b), 6(c), 8(g) and 8(h)) and lying about such matters (imputations 4(a), 4(b), 6(a), 6(b), 6(c), 8(g) and 8(h)) are allegations of the kind which have repeatedly been held to be defamatory. It should not be necessary to list the many cases where such imputations have been held to satisfy the test of defamatory meaning, given Kirby J's warnings in Favell v Queensland Newspapers Pty Ltd (2005) 219 CLR 165; [2005] HCA 52 at [23] about the practice of lawyers pursuing "almost ludicrous elaborations" concerning defamatory meaning.
Mr Rasmussen also submits that it would be wrong to categorise neighbourhood disputes as being so unimportant as to be trifling, and to insinuate that accusations such as mismanaging of company affairs or lying, while defamatory if raised in litigation by more important persons in the community or to a group of people of a more impressive number, are therefore somehow not defamatory (cf Do v Kolsumdet Pty Ltd [2023] FCA 592 at [10]).
Lord Atkin did not endorse any such categorisation in his formulation of the test defamatory meaning in Sim v Stretch. When Lord Atkin sought to identify a "class of persons" considering a publication to be defamatory, he was not referring to persons with sufficient class for their reaction to the publication to matter, but to every right-minded person in society (resulting in the landmark test of "the estimation of right-thinking members of society generally", at 1240).
Everyone has a reputation, good or bad. In the days of jury trials, counsel opening for the plaintiff would sometimes say to the jury that reputation is democratic, in that everyone has one, no matter how unimportant the plaintiff may seem. The mere fact of publication during what Bromwich J described as a "neighbourhood dispute" does not render the damage done to that reputation to be so trifling as not to give rise to defamatory meaning at all, merely because publication is made in a neighbourhood dispute, as opposed to the celebrity examples identified by his Honour.
Lord Atkin, it should also be remembered, was a great admirer of neighbours. The "neighbour principle" (Donoghue v Stevenson [1932] AC 562) is one of the most important principles in the common law. While the "neighbour principle" is irrelevant to the issue of defamatory meaning, it should not be overlooked that the term "neighbour" was invoked because neighbours fill an important role in the social structure. Neighbourliness is a matter of moment in Australian culture, and its qualities highly prized, as the name of Australia's most famous television soap opera suggests.
Mr Rasmussen also complains that Mr Lewis makes this submission globally about all imputations. Challenges to the form, capacity and defamatory meaning should be made to each individual imputation. I do not propose, in those circumstances, to endeavour to work out what imputations Mr Lewis may have particularly objected to, for the reason of "judicial economy" as set out by Leeming JA in Massoud v Nationwide News Pty Ltd; Massoud v Fox Sports Australia Pty Ltd (2022) 109 NSWLR 468; [2022] NSWCA 150 at [37], as I am conscious of appellate concern about unduly lengthy judgments.
Finally, I note that I made rulings as to the capacity of the imputations on 16 December 2021. The only challenge as to form was in relation to imputation 8(d), which was withdrawn by reason of Mr Rasmussen accepting that it did not differ in substance from imputation 8(b), although Mr Rasmussen sought leave to change the words in some of the imputations. There was no challenge to defamatory meaning. Challenges to the form and defamatory meaning of the imputations, like challenges to capacity, are best brought in the Defamation List, and preferably at the same time as any challenge to capacity.
I do not accept either of the submissions. While Mr Rasmussen's suspicious reader is a step too far, Mr Lewis's submission overlooks the arresting bold type, underlining and capitals and the repetition, in the body of the letter, that this email is being sent BCC to everyone. The ordinary reasonable person reading such an email would understand that this must be serious, indeed vital, information. This would attract the reader to read closely and to expect to hear information of concern.
The next point is the language and style used, which Mr Rasmussen characterises, correctly in my view, as "angry" (submissions, paragraph 10). I particularly note the following features:
1. It is clear, from the language as well as the content, that the defendant is angry with the plaintiff and is responding to conduct he disapproves of by turning the plaintiff's correspondence with him on its head, such as responding "you are right. Everything should be in writing from this point". He is not agreeing with the plaintiff in a friendly way; he is being sarcastic and the inference is that it is the plaintiff who is not to be trusted, and not him.
2. This distrust of the plaintiff is emphasised by the repeated use of rhetorical questions such as "I am just wondering how he made a payment in 2019", "I am also wondering why Westpac" and "I am also wondering why he of charged so much". The clear inference is that the plaintiff's version of events is dishonest. When he says "I am wondering", he is not really wondering at all; he is being sarcastic.
3. This is further underlined by the emphasis given to words such as "your contractor" and "did not fix the problem" in terms of being not only underlined and put in a larger font and bracketed, and followed by the post script which is followed by a recitation of the plaintiff's alleged wasteful conduct.
4. The wrongdoing of the plaintiff is emphasised by the use of strong words such as "pocketed", repetition ("many, many"). "Pocketed" infers opprobriously dishonest financial misconduct. The elliptical reference to "2nd payment" creates the impression that this has happened before, not that the contractors had been asked to refund an accidental double payment of their bill for which the defendant's oversight was responsible.
It is in the context of the form and content of the matter complained of that the question of defamatory meaning must be determined.
1. Imputation 4(a): The ordinary reasonable reader would infer that the plaintiff had insisted on using the incompetent Purple Plumbing, who added insult to injury in that they dishonestly "pocketed the building's money (2nd payment)". What is more, they did not return that sum until the following year. The opaque reference to "2nd payment" would not mean anything to a reader who did not know that Purple Plumbing had accidentally been paid twice; this, and the "I wonder" references clearly suggest that the plumbers are lying. Not only did these plumbers "overcharge" but they "did not fix the problem", the third element in the imputation. This is followed, in the rest of the matter, by a recitation of other acts of incompetence by the plaintiff such as emailing the defendant 12 times when she could have made a 5-minute phone call. A vivid picture is created of incompetence as the Chair of the owners corporation. This imputation is conveyed.
2. Imputation 4(b): The imputation that the plaintiff lied about moneys being refunded comes from the sarcastic description of the difficulties the defendant had in getting back the moneys "pocketed" by the plumbers where the excuses for these dishonest contractors given by the plaintiff (to whom the defendant is replying in this email), such as that the money was repaid in 2019, are so implausible as to amount to lying. This imputation is conveyed.
3. Imputation 4(c): The imputation that the plaintiff carelessly and needlessly spent the owners corporation's money is conveyed by the claim that the defendant could not understand how Purple Plumbing "charged so much", that Purple Plumbing had "pocketed the building's money (2nd payment)", a reference to them being paid not only carelessly but needlessly and by the complaint at the end of the matter that the defendant had wasted 2.5 hours of his time (which cost the owners corporation money) answering her unnecessary 12 emails. This imputation is conveyed.
4. Imputation 4(d): The defendant concedes that this imputation is conveyed but submits that it is not defamatory.
5. For the reasons set out above, I am satisfied that each of these imputations is conveyed and is defamatory.
On 20 June 2019 there was a strata committee meeting at which the plaintiff and MG Strata signed the new Management Agency Agreement (Ms Cruz signed later on). Motion 3 of this meeting nominated Purple Plumbing as the preferred plumber in the future. At the time of the handover, the plaintiff told the defendant that "we were dissatisfied with the tradesmen work and our overseeing it, from the previous managing agency" (Tcpt, 27 March 2023, p 21(47)) and that she wanted to be present when tradesmen came. In addition, if the work was "complicated", she wanted to see the work after it was finished. In her email of 21 June 2019 to the defendant (CB 272 Tab 36), she explained the difficulties in obtaining properly qualified tradesmen in the past as being the reason for this.
On 21 June 2019, the defendant paid Purple Plumbing's invoice #773 for $2,687.85.
Plumbing problems continued and in July 2019, Purple Plumbing returned to investigate water leaks from Lot 11 to Lots 7 and 9, concluding that clogged guttering was the cause. O'Dowd Roofing was engaged to inspect the roof and gutters and they recommended extensive roof work. The defendant sent this report to the plaintiff as an attachment to a note in which he said that "this could be the key to the multiple leaks" (CB 275).
For unexplained reasons, the defendant paid Purple Plumbing's invoice of $2,687.55 a second time on 25 July 2019. Although Mr Lewis described this error as "a simple mistake" which "no one picked up for six months" (submissions, paragraph 45), it was the defendant who made the mistake and the defendant who bore the responsibility of checking the owners corporation accounts to ensure that errors like this did not occur.
Meanwhile, on 26 July 2019, the owner of Lot 4 sent the plaintiff photographs of water dripping from the common wall and the owner of Lot 2 sent the plaintiff photographs of water penetration in the garage. O'Dowd Roofing reported that the roof repairs were completed, sending photographs taken on 26 July 2019. The plaintiff emailed photographs to the defendant showing the leaks on 31 July 2019.
It is at this same time (Tcpt, 27 March 2023, pp 34 - 35) and against this background of concerns about unqualified tradesmen and poor workmanship that the owner of Lot 7, Ms Candy Lui, made application for renovations to her Lot, providing a signed document stating that she was using licensed tradespeople and builders for her renovation (Tcpt, 27 March 2023, p 52). (It is not in dispute that this is untrue and the builder was unlicensed.) Her application was approved at the 1 August 2019 meeting.
The building continued to have water problems. On 8 August 2019, the light fitting in the ceiling of Lot 4 fell out because the ceiling was waterlogged. There was a further owners corporation meeting on 20 August 2019.
DJE was called in to provide a quote for Lot 7 and to attend to the water leak problems there. As DJE attended the premises without informing the plaintiff, she told the defendant not to pay them for their visit. The defendant advised that DJE would not charge for this reason, but advised orally that they had found no leaks from their inspection. DJE provided a quote on 11 September 2019 (CB 327).
The work on Lot 7 had started, and that included bathroom work such as removing the shower head and taps (CB 340 - 341). Ms Lui complained of water leaks at about this time. The plaintiff obtained a quote from a second plumber to test for water leaks in Lot 7, instructing the defendant to issue a work order for Phillip Kauter, plumber.
There was a strata meeting on 4 October 2019. Four days later, Mr Kauter's invoice was received and it was apparent more work had to be done. On 10 October 2019, the plaintiff sent the defendant a quote from BIM, not for the same price as DJE, but 36% cheaper. In addition, unlike DJE (who had missed this), BIM pointed out that spalling work was necessary because of concrete cancer. It is not in dispute that there was concrete cancer which required treatment. BIM dealt directly with the defendant on this issue, writing to him and providing him with photographs, and they were retained to carry out the work.
On 7 November 2019, the defendant's error in paying Purple Plumbing twice came to the plaintiff's attention when he admitted this to her (the second payment was refunded on 4 February 2020 according to the defendant, but the plaintiff said Purple Plumbing told her it was refunded in December 2019).
BIM carried out the work for Lot 7 in October and on 24 October 2019 the plaintiff approved payment. Then, for no particular reason that she could recall, the plaintiff decided to check the Lot 7 builder's licence details with the Department of Fair Trading, which she did on 27 November 2019. It was a simple task which she had done before. This was how the plaintiff learned that the "builder" carrying out the work on Lot 7 was not a licensed builder at all, but the unlicensed husband of Lot 7's managing agent. She immediately told the defendant and put a stop order on the work in the form of a notice to Ms Lui and others.
Later that same day the plaintiff attended Lot 7, having been told by her mother that the work was still going on. She knocked on the door and, when admitted, told the tradesman to stop. He rang up for advice. Mrs Nesci, who had been telephoned by the tradesperson working in Lot 7, called the police. Either the plaintiff or Mrs Nesci or both of them (the Minutes of the owners corporation reflect that Mrs Nesci commenced a mediation process there) made a complaint to the Department of Fair Trading. The plaintiff said that she discovered during this process that the electrician retained for this work was also unlicenced (Tcpt, 29 March 2023, p 222(41)).
There was a strata meeting on 23 December 2019, where the plaintiff carefully set out these events and obtained permission to represent the owners corporation in the application brought by Mrs Nesci, for the purpose of allowing her unlicensed husband to continue the building work on Lot 7. Mrs Nesci abandoned this application.
The defendant wrote to the plaintiff on 4 March 2020 saying there were too many disputes in the building for him to manage and that he was reluctant to take instructions from her in those circumstances. The plaintiff replied the next day, to the effect that the only dispute was with the owners of Lot 7 and the unlicensed builder. This correspondence is important, as it was only after this that the plaintiff and defendant's relationship began to change.
There was a strata committee meeting on 3 April 2020 (CB 398) but this did not deal with strata business other than a DA proposal for an adjoining site; its main relevance was that the Minutes of 23 December 2019 (concerning the unlicensed builder) were accepted as correct. This means that not only the defendant was aware of their contents as recently as a month before publication of the matters complained of but so were the owners and their representatives.
During April, the defendant had failed to respond to three requests from the plaintiff for a draft agenda. The plaintiff then discovered that the trust account was out of balance by $618.28 and had been for nine months. The defendant made various adjustments to the accounts in an attempt to make it balance, but continued to be unable to explain how the trust account was out of balance by $618.28. This explanation was eventually provided as part of the second matter complained of, together with an apology for the errors.
On 29 April 2020, the plaintiff sent the defendant seven emails, largely concerning the owner's corporation financial matters, to which he sent four emails in reply. He sent out the AGM agenda that same day. This is also the date of the first matter complained of (this was sent by blind carbon copy to all owners and agents whose email address the defendant had). When the plaintiff continued to press him about the $618.28 shortfall, he sought advice from another office employee, Justine Goldsborough and, the following day, sent the second matter complained of by blind carbon copy. The third matter complained of was sent on 11 May 2020, in the same way.
The defendant conducted the AGM via electronic communication. Both the plaintiff and the defendant stated shortly after the meeting commenced that they were recording the meeting; there were no objections. None of the matters of concern to the plaintiff were, she complained, on the Agenda and, when the plaintiff attempted to raise these during the meeting, he muted her, for a total of 33 times.
The plaintiff was replaced as Chairman and Treasurer but not as secretary. As the secretary performed most of the work, she would have had to continue to liaise with the defendant. He would not accept this and told the persons at the AGM that he intended to resign.
Neither has any association with the building now. The plaintiff's mother sold her home in December 2021 and went to live in a nursing home (she is now deceased). The defendant ceased to hold the position of strata manager at an unrevealed time.
On any reading of the facts, the defendant made a series of unfortunate accounting errors from the time he took office, concerning which the plaintiff initially said nothing. Their relationship spilled over into animosity in the months after a particular event not referred to in the matters complained of occurred. That event was the circumstances in which the plaintiff discovered, on 27 November 2019 (Tcpt, 27 March 2023, p 52), that the Lot 7 "builder", a Mr Giuseppe Nesci, had no building licence whatsoever. Mr Nesci, who ran a business named "Joe's North Shore Property Maintenance", was the husband of Lot 7's managing agent, Ms Lyndall Nesci. As noted above, this was why, on the afternoon of 27 November 2019, there was a confrontation at Lot 7 and the police were called by the owner's agent.
The plaintiff continued to correspond with the defendant in a courteous manner and the level of invective which crept into their dealings really only became evident after their correspondence of 4 and 5 March 2020. There matters rested until the matters complained of were published and, at the Annual General Meeting on 11 May 2020, the plaintiff was re-elected only as the Secretary.
Unlike accountancy errors and double payments, engaging an unlicensed builder was a serious problem for the owners corporation, especially after it was drawn to the attention of the defendant on 27 November 2019. In addition to the risk that the work would not be up to standard (which the plaintiff claims was the explanation for substantial repairs to the Lot 7 floor, which occurred during bathroom renovation), an unlicensed builder would not have had the necessary insurance cover in the event of claims. In addition, permitting the carrying on of building work by an unlicensed builder could result in complaints and/or fines, not only for the builder in question but also for those who, after finding out, turned a blind eye to it, as the defendant (and "our office", as it is called in the matters complained of) did thereafter. The defendant knew that, only a year before, the owners corporation had sacked their previous strata managers for sending an unlicensed plumber and that the plaintiff had played a large part of that decision, and he knew that the plaintiff had immediately complained to the Department of Fair Trading about the lack of licence.
What exactly were the defendant's duties and obligations to the office-holders and Lot owners to take steps such as keeping correct accounts and checking the licences of tradesmen?
In an email on 27 November 2019 at 12:38 PM (CB374 Tab 62.4), the plaintiff instructed the property managers and owner of Lot 7 to cease all renovation work because the builder engaged by them did not have a building license. The text was as follows:
"Dear Ms Lyndal Nesci and Mr Kirk Roberts
Investment Property Managers
I have just found out that Mr Giuseppe Nesci, the individual sole Trader ABN 92 147 414 660 of "Joe's North Shore Property Maintenance" who has been engaged by Lyndal Nesci and Kirk Roberts to do renovations at Unit 7 25 Cook St Randwick, appears not to have a building licence.
All renovation work at 7/25 Cook St Randwick must stop immediately and until below details are supplied.
Please supply any licence numbers and names for all workers and tradespersons who are working on renovations at Unit 7 at this time or will work in the future asap.
Thank you
Marlene Read"
The plaintiff gave her reasons for doing this as follows:
"Q. Why did you send this?
A. Well, I was pretty annoyed at this stage after all we'd been through with unit 7. To find out that the actual builder was the husband of Lindall Nesci and that he - his company was Joe's North Shore Property Maintenance but he did not have a building licence which is absolutely essential in our by law for works. That anyone who does works in their own unit or anywhere else must have a licence. And he did not have a building licence. And I don't know if the owner actually knew that, but certainly, Lindall Nesci, it was her husband, she must've known that he didn't have a licence.
And I was quite annoyed about that which is why I said, "All renovations at unit 7 must stop immediately until the licenced names of any tradespeople subcontract, et cetera are known." Because they were doing things to the kitchen. There's plumbing, there's electrical which are very important matters. So, you know, I was extremely annoyed and asking for all information as to stop work until we found out that information.
Q. Now, how did you find out that this person did not have a building licence?
A. Yeah - because beforehand, I - I don't know exactly what precipitated it, but I have a tendency, if I find out what the company name is, to check - to - and the name of a person is - to check that they have a licence." (Tcpt, 27 March 2023, p 51(47)-p 52(12))
Mrs Nesci and Mr Roberts, despite being property managers themselves, took a combative approach to the plaintiff's discovery of the lack of licence from the start. They had already written to the defendant refusing to deal with the plaintiff. Dr Read's email of 27 November 2019 objected to this process:
"Dear Ms Lyndal Nesci and Mr Kirk Roberts, Investment Property Managers and Mark
The Owners Corporation's interests and finances, that are administered by the Strata Committee with advice from the Strata Manager, Mark Gitman, cannot financially afford to make payment to the Strata Manager for the large number of phone and email interactions that are required by him to deal with Lyndal Nesci and Kirk Roberts and others concerning matters associated with the renovation of Unit 7 at 25 Cook St Randwick.
It is not at all reasonable for the above investment property managers to state to me: "Please do not email us directly anymore, we will only look at emails that come from the strata agent" (Mon, Oct 21,2019 at 2: 27PM) and then later send an email to me requesting a reply from me by 'close of business' the same day that they send the email (Mon, Nov 18, 2019 at 10:01 AM) as well as try to cut the Strata Committee out of its duties and responses with respect to renovations.
For financial reasons as noted above and other reasons, you must now continue to only send emails or make phone calls to the Chairperson of the Strata Committee, that is me, and not to the Strata Manager at all. The strata Manager will not read any of your emails or phone calls from now on, including if you 'cc' him on emails to me.
The Strata Manager will only advise the Strata Committee (not you) when the Strata Committee asks for his advice and will not read emails or receive phone calls at all from Lyndall Nesci and Kirk Roberts or others to do with the renovations at 7/25 Cook St Randwick.
The Strata Committee at 25 Cook St Randwick is in charge of and oversees all repairs, alterations, additions and renovations at 25 Cook St Randwick and follows the " Special By‐Law for Works " 2012 of Strata Plan 2533.
Thank you.
Marlene Read"
A copy of this email and another of similar content was also sent to the owner, Candy Lui. The second email, of the same date (CB 375) referred them to the Strata Committee's role as set out in the special By-Law for Works 2012.
There is no evidence of the defendant taking any steps to comply with the resolutions passed at the 23 December 2019 meeting. As the plaintiff stated in her correspondence and at the AGM, the complaints to the Department of Fair Trading, the state of the licence and the continued renovations simply vanished into thin air at the AGM.
In fact, as the plaintiff's email to the defendant of 5 March 2020 confirms (CB 390), the mediation arranged by Mrs Nesci and Mr Roberts was cancelled by them, as the plaintiff had foreshadowed would be likely, given the lack of licence. It appears that Mr Nesci and Lot 7 attempted to blame another company, BIM, who had carried out urgent repair work, for the ongoing difficulties they were having with the Lot 7 works, a claim the plaintiff refuted. She wrote to the defendant as follows:
"The Strata Committee is handling this matter solely at this time.
The Strata Committee members act in the interests of benefit, including financial benefit, to the Owners Corporation as a whole not in the interests of the units that Strata Committee members may own themselves.
As for the NSW Fair Trading Mediation Session that was initiated last year by Lyndall Nesci and co, for 20 Jan 2020, that was cancelled by Lyndall Nesci and Kirk Roberts long before 20 Jan although I was willing to attend.
They had multiple workers in Unit 7 long after BIM left the job so they cannot blame BIM or us for any mess in the unit at that time. And they never made any attempt to prepare Unit 7 for the repairs to the Unit floor and it was left with building equipment on the floor and a mess by them. That preparation was left to be done by BIM in order to proceed at the scheduled time and avoid delay. I had no part in that."
However, the fact that Mr Nesci was unlicenced was only the beginning of the problem. For whatever reason (and his lack of qualifications was, I find, a factor in at least some of these problems arising), the owners of Lot 7 had a series of plumbing and other problems which led to them deluging the defendant and with an enormous number of emails over a long period of time about various plumbing and other problems, all of which were the result of poorly performed work on Lot 7, as well as being parties to in the complaint to Fair Trading concerning Mr Nesci's unqualified work and seeking to get around dealing with the complaint:
"Q. Dr Read, when they say, as recorded by your words in paragraph 2, "Please do not email us directly anymore," that is because, I suggest, that you were frequently emailing these owners and agents in relation to the renovations to such an extent that they're asking you to stop doing it.
A. No, I don't believe that is the case. I believe it was about some dispute which I'm trying to think what it might have been. I can't‑‑
HER HONOUR: Well, could it be the dispute on p 375? Is that the dispute? The things is, was it you who were sending all this correspondence or was it somebody else? So who were the investment property managers who said, "Please do not email us directly anymore. We will only look at emails that come from the strata agent"? Who said that, Mr Lewis?
LEWIS: Well, I think the witness's evidence was Lindall Nesci, who's the agent for Ms Candy Lui.
Q. Is that correct, Dr Read?
A. Yes." (Tcpt, 29 March 2023, p 216(22)-(35))
The plaintiff described this correspondence as follows:
"A. That's what they're saying. They must've objected to one of the emails that I sent them. I - I can't remember which one at the moment.
Q. Yes, well, it's unlikely, isn't it and I'm going to suggest to you, that they would just complain about one email?
A. They would - they could very well have complained about an email I sent. There were some arguments about the age of their hot water system. They may have objected to that. I may have said that it might be time that you replaced that, or something of that I can't remember exactly, but there were a we did have a lot of disagreements about water penetration in unit 7, so it could have been they could have been annoyed about that I that I sent that to them, and in fact, my view is that they were sending me an enormous number of emails about various things to do with their builder, to do with everything, and to do with how long things were taking, et cetera. They were sent to me and CCed to Mr Gitman, so when I replied, I felt necessary to also CC them to Mr Gitman, but perhaps I shouldn't have, because then he would be getting all - all the emails coming in, but I cannot stop I cannot stop these property managers CCing to Mr Gitman. There's no way I could stop that. So, I think this is in relationship to one particular argument we were having, only.
Q. Dr Read, it's right, isn't it, that you were actually in a heated dispute with unit 7 at this time?
HER HONOUR: She personally, or the Owners Corporation?
LEWIS Q. Personally?
A. Yes." (Tcpt, 29 March 2023, p 216(38) - p 217(16))
The main reason for the heated dispute was, the plaintiff said (at Tcpt, 27 March 2023, p 23 and Tcpt, 27 March 2023, p 51 (47) - p 52 (12), set out above) that the owner had signed documents stating that the builder doing the work in Lot 7 did have a building licence and that when problems subsequently arose, the Lot 7 representatives sought to blame others (such as BIM) or deluged the defendant with emails. In addition, it appeared to the plaintiff that the defendant had done absolutely nothing to ensure that the works for Lot 7 were being conducted by licensed persons.
Unfortunately for him, the plaintiff responded by stating that there was really only one dispute, namely the dispute with the owners of Lot 7 and their agents, but that there were otherwise no disputes. She reminded him of that ongoing dispute in her letter of 5 March 2020:
"(1) I do not know of any disputes between multiple owners or any owners at 25 Cook St Randwick.
There were disputes and concerns in the past but all of these were resolved to everyone's satisfaction many, many months ago last year. This is not uncommon since there are often one or two occupiers in a Strata Plan who are not good at limiting themselves because of rules pertaining to other people's interests. All is harmonious at 25 Cook St as far as I know. I am personally acquainted with many of the occupants.
If you know of any disputes among owners, please let me know.
There is a dispute at this time between the Strata Committee and the owner of Unit 7 and her representatives, Lyndall Nesci and co, from "Investment Property Managers, Neutral Bay"."
I am satisfied that this is a correct statement of affairs. There were no disputes between multiple owners, or indeed any owners, apart from the ongoing dispute over unlicensed tradesmen trying to carry out work surreptitiously. This cut the defendant off from the easy path to getting out of trouble following the many mistakes he had made over the last year by dismissing the plaintiff as troublesome and saying he would not take instructions from her.
The transcript does not put the defendant in a flattering light. He attacked not only the plaintiff but any potential naysayer in trenchant terms. For example, Ms Cruz was the only Lot owner who had from time to time had participated in the past in strata meetings, so she was familiar with some of the work done, and she asked what this sum of $7,000 that the plaintiff had allegedly misspent over the last year was made up of. The defendant responded by threatening to resign and then repeated the defamatory statements he had made in each of the three matters complained of:
"NC: So what was that … what was the $7000 spent on?
MG: Oh OK. Unit 7 repairs so … in this year. There were major repairs in her unit. I obtained a quotation from one tradesman which was about 8000. Then Marlene did not accept that quotation. Appointed a second tradesman. Ended up being $11,000 basically the same job. And there were other [unintelligible, MR protesting] they were testing the leakages in unit 7 bathroom, my tradesman quoted $330 then he ended up doing this for free. Marlene did not accept … accept that and appointed another plumber which cost another $416. There was a few plumbing invoices [unintelligible, MR protesting] issued the invoice twice for the same job and held the money, we kept chacing [sic] him for the money. We eventually got it back about 6 months later ??? Unfortunately Unit 6 is not here but he did the repair in Unit 6. He just did a report he didn't find the cause. He issued the invoice for $2894. My … my plumber he found the problem, fixed the burst pipe, claimed on the insurance and we got the repairs done in units 2, 4 and 6. All that was claimed under insurance and you received the money from the insurance company as a reimbursement. Marlene recently accused me of changing the insurance company. Well you ??? it's the same, exactly the same insurance company [unintelligible, MR protesting] changed the broker and that broker managed to save you $300 compared with what you paid last year for the same policy, for the same insurance company, you paid $300 less. Considering that most of the other policies went up ??? that was a very good outcome. Again I had to explain this. Marlene blamed me for changing the insurance company. [unintelligible, MR protesting] You are still insured by the same company with a different broker but … she just keeps carrying on and on and on and so I don't know where to go from here. But I'm not prepared to leave … leave Marlene in control and … and continue being the main person who makes all the decisions in your strata plan." (CB 657)
As is set out in detail in the section of this judgment on malice, the plaintiff has satisfied me that these statements of fact, as set out in the matters complained of, were false to the knowledge of the defendant. In the above extract, the defendant actually goes further than he did in the matters complained of. For example, he accuses Purple Plumbing of issuing their invoice "twice for the same job", following which they held the money and that it took six months of chasing them. In fact, they only issued one invoice and it was paid four days later. There was no six-month delay; the double payment was first raised with Purple Plumbing on 7 November and resolved shortly after 3 December 2019.
The defendant took the same tough line with Mr Vincent. Mr Vincent said that he had read the accounts and knew about the water leak issues, which were now all resolved, a result he considered "really good" (CB 658). He thought the plaintiff was "technically correct" in referring to the Strata Schemes Management Act and asked for an explanation as to why the plaintiff should not chair the meeting. The defendant responded that the plaintiff had a conflict of interest and was likely to disrupt the meeting, and quickly called on the owner of Lot 7, the owner whose unlicensed builder had resulted in the stop work notice, to support him:
"MG: Because firstly the strata manager usually does that. Secondly there's an issue with I going to get a conflict there where Marlene is not a financial owner … her no financial interests. But she's effectively adding full control [unintelligible, MR protesting] exerting her will over most of the issues [unintelligible, MR protesting]. Candy can you share your experience perhaps with the owners what the dealings were with your unit? Your very polite still but…" (CB 658)
The defendant then called on Ms Lui to describe how the police had had to be called after she went into Lot 7, by inference as a trespasser. As set out below, Ms Lui complained about the plaintiff coming into Lot 7 and trying to stop the work as something that just happened out of the blue, without referring to the notice sent by the plaintiff to Lot 7 for the work to stop because the builder was unlicensed. The defendant uses this as an example of the irrational and disruptive conduct of the plaintiff, which meant that, if she were allowed to chair the meeting, "I'm afraid she won't let us to do the meeting. She'll be disrupting. That's what I'm afraid." (CB 659).
The defendant then unmuted the plaintiff, who said the Lot 7 problem arose because Lot 7's builder was unlicensed and, what was more, the Department of Fair Trading had told her that the electrician was as well. The defendant muted her before she said anything further, saying that this issue was not on the Agenda. She had no opportunity to address the other allegations made by the defendant. Unsurprisingly, the members present voted in favour of the defendant conducting the meeting.
The remainder of the transcript is painful reading. The defendant repeatedly cuts off and mutes the plaintiff and states that he and his company are resigning if she is on the committee.
Unfortunately for the defendant, the persons present at the meeting did not act according to his wishes. Mr Vincent replaced the plaintiff as the chair and Nina King (Nina Cruz) replaced her as the treasurer, but the plaintiff was left in place as secretary, the most important role in terms of ongoing contact with the strata manager. The defendant's response was to say that he would resign immediately, as would his company.
Mr Lewis submits that the transcript of the AGM does not demonstrate "petty spite" (submissions, paragraph 82), and that the defendant genuinely believed that the plaintiff was out of order.
I do not accept this submission. The defendant took every opportunity to blame and attack the plaintiff and to threaten that he and his company would resign. There is a revealing exchange at CB 697, when the plaintiff refers to the defendant's high management fees, so much higher than the previous agent's fees:
"MG: Marlene, thanks for your concern about our management fees. You won't have to worry about it because we are resigning and you will have to get a new managing agent. And that's … and they … Could I explain to you that we've received a number of emails just between … in relation to the matter of unit 7 and the communications between you, our office and unit 7 renovations. There was about maybe 6 … 7 hours additional work. And if you believe the managing agent can work for $0.50 an hour with our skills and experience we have, well that's not gunna …And there are a number of emails where you actually emailed me saying, Mark you have to charge for it because it is additional work. So at the time, you were actually supporting ??? But if … as I just said you don't have to worry about it. I'm not going to go through a meeting like this ever again so I am not going to continue managing your building. Marlene you are on the committee. As I mention in my email I not continue. We'll just resign but we'll … we'll continue managing your building until you find another manager."
This is followed by more insults to this effect, such as his reference to "the twenty five hundred emails which you send us" (CB 697; at CB 698 this became "2,000 emails"), in all of which he blames the plaintiff's conduct as the cause of every problem in the building. This is obviously a gross exaggeration if not knowingly false. For example, the additional Lot 7 emails were largely about their unlicensed builder, which was not a problem of the plaintiff's creation. It was the defendant's carelessness in not carrying out an essential licence check of the kind that he was obliged to do under the management agreement.
In her evidence, the plaintiff acknowledged that she effectively broke down at the meeting and did not handle herself well. She was concerned that those present believed what was in the matters complained of and that any attempt by her to respond to these, or to any of the criticisms made by the defendant, he muted her and told her she was out of order, or that these matters were not on the agenda, despite the sending of the agenda being the excuse for sending each of the matters complained of. The result was that the persons at the meeting heard only the defendant's side of the story. Nevertheless, they listened carefully to what the defendant said and applied their own knowledge of events, with the result that despite the defendant's threats to resign if the plaintiff remained on the committee, they still elected her as secretary and also kept her on as one of the four members of the strata committee (CB 649).
I have not been told whether the defendant did make good his threat to resign, although Mr Lewis hints as much at paragraph 82 of his submissions. I should not, in those circumstances, assume that fact. I note, however, that if the defendant did resign for the reasons he spoke about at the meeting, it would be compelling evidence of petty spite and thus relevant to the issue of malice.
I would add two final notes to my consideration of the AGM transcript. The first is that Mr Lewis states at paragraph 82 that this transcript is "plainly not a complete record of what occurred". No transcript references are given for this assertion. A challenge to a portion of the transcript was made during the hearing, but it was withdrawn, just as the objections to the tender of this document were withdrawn after Mr Lewis read Xuan v Xu. The transcript of this meeting was prepared for the purpose of NCAT litigation, where it formed part of the evidence and, despite the missing words, still able to be read and relied on. While Mr Lewis submits that the rules of evidence do not apply in the NCAT, challenges to a document's accuracy would have been permitted. If the challenge is to authenticity, the plaintiff's transcript was discovered, and Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") Pt 17 r 17.6 provides that the authenticity of a discovered document is presumed unless it is challenged. The defendant did not discover his copy of the tape and UCPR r 31.10 would not permit its use without prior notice (Massoud v Nationwide News Pty Ltd; Massoud v Fox Sports Australia Pty Ltd at [470(j)]).
The second is that the attack on the plaintiff's conduct when the police were called requires consideration of the relevant correspondence and statements at the AGM about Lot 7 and the unlicensed builder. This topic was not raised in the matters complained of, but the knowingly false statements the defendant made about this topic have some relevance to the issue of malice in terms of motive, as the plaintiff's discovery of the builder being unlicensed could have caused trouble not only for the owner of Lot 7 but also those who permitted this to occur.
When the plaintiff tried to raise these issues, she was stopped and muted:
"And also the electrical matters we're not done by a licensed plumber… err electrician, and they will do remedial actions by sending in a licensed plumber to check that the thing is not going to blow up and hurt somebody. They told me that is the case and I presume that has happened. So Ming is a completely innocent person because she does not know that she was entitled to a proper contract under the business … err Building Act which says that any … any job over $50,000 must have a proper muted [00:44:10]
ITEM 2 (QUORUM) AND MOTION 3 - MINUTES
MG: Marlene, I'm sorry as chairperson for this meeting I have to declare you out of order. [unintelligible, MR protesting] ... not even on the agenda. Can we resolve just to proceed with the meeting ... number 2 is the quorum, it is ??? to have a quorum." (CB 681)
These were matters that could, and should, have been raised at the meeting, even if (as Ms Lui claimed) they were no longer a problem. The plaintiff was entitled to raise them.
The plaintiff denied this and said that the police came after being called by Mr Nesci's subcontractor after he spoke to Mr Nesci (not to Mrs Nesci):
"Q. Someone called the police, didn't they?
A. Yes.
Q. You didn't do it?
A. Actually I did as well, but the police came for the first person who called the police.
Q. Do you know who the first person is?
A. Yes. That was the person who was doing some work in unit 7.
Q. Was that the builder?
A. No, it wasn't the builder. It was one of his subcontractors.
Q. Do you remember why the police were called?
A. Yes.
Q. Why was that, Dr Read?
A. Because - well, I can tell you the story about how I got -
HER HONOUR Q. Don't tell a story. Answer the question.
A. The police were called because the subcontractor called the builder and said, "There's a problem here. What should I do?" and, as I understand it, he called the builder and the builder said, "Call the police."
LEWIS Q. What was the problem? Do you remember?
A. Well, the problem was that prior to this I had said to the builder, "You should stop work because you have no licence, you're not entitled to employ subcontractors, and we don't know if they've got a licence or whatever," so that's the situation."
This explanation for the subcontractor calling the police was challenged by Mr Lewis:
"Q. Dr Read, the police would not be called for that reason, would they?
A. The police were called -
Q. The police were called for a specific reason, weren't they?
RASMUSSEN: Your Honour -
HER HONOUR: Mr Lewis, she's telling you why she says the police were called. If you want to put it to her that's not the reason, fine, but don't editorialise by saying, "Nobody would call the police for that reason." Quite frankly, plenty of people would call the police is [sic] some unlicensed person was carrying out work on their building.
LEWIS: I'm getting there now, your Honour.
Q. I'm going to give you an opportunity, Dr Read, to explain why the police were called, and then I'm going to show you a document.
A. All right. Can I start from the beginning?
Q. No. I want you to answer my question.
A. All right.
Q. Please attend to it, and I would suggest you answer it carefully.
A. Right.
Q. On 27 November 2019 the police were called to unit 7 of 25 Cook Street?
A. Yes.
Q. They were called for a specific reason, weren't they?
A. Yes.
Q. Why? A. Because the subcontractor didn't know what to do when I was speaking to him and he said, "I'm going to ring the builder to find out what to do," and he rang the builder and the builder said, "Ring the police."
Q. Is that your answer?
A. Yes.
Q. You don't want to think about it twice?
A. No, I don't - no."
Mr Lewis then produced a document which was not in the Court Book, but was later marked as MFI 5:
"Q. Dr Read, I want you to turn over the page of the document I've just given you. This is an email from Lindall Nesci and it's dated Monday, 28 September 2020.
A. Right.
Q. It was sent at 9.55. It was sent to my client, Mr Gitman; do you see that?
A. Yes."
The contents of this document were then read out to her. It was a hearsay account of Mrs Nesci receiving a call from an unnamed "tradesman" who was "one of the tradesmen I had on site" on 27 November 2019, which was more than a year before this memo was written. She claimed he said he was being physically attacked so she rang the police, who came to Lot 7 but then called her because they could not get the plaintiff, who was yelling abuse and had assaulted the unnamed tradesman, to leave the premises. It goes on to assert that the plaintiff had to be "physically removed" from Lot 7 by the police.
The plaintiff said that she disagreed with this account, and said that what happened was the following:
"So what happened was, starting from the beginning, at this stage I told them to stop work. My mother called me up and said, "It looks like there's a tradesman there at unit 7." So I went around there. So I went up there and I knocked on the door. I had no key or anything like that. I knocked on the door, and somebody yelled out "yeah", and I turned the knob and it was opened and I walked in, and then I said, "You shouldn't be here. No more work should be done here until we work out who's got a licence and who hasn't got a licence," and then he said, "Well, I'm going to call my boss." So I understood that he was calling the builder, and I understood that the builder said, "Call the police." So I hung around. I thought best not to disappear, the police are coming, so I waited till the police came, and they actually said - they asked me who I was and I explained what the situation was, that they shouldn't be doing any work here, and they said, "Well, why don't you ring the builder?" and so I did. So I rang the builder up myself and I said, "You're not supposed to be doing any work here. Why have you got a tradesperson here?" and he said, "I don't have to answer to you," and hung up, and that occurred in the presence of two female policewomen. So that was that, and there was a bit more talk about it, and I said, "They shouldn't be doing work here," and she said - both policewomen said, "I think you both should leave at this stage," and we both voluntarily left - both myself and the tradesperson. There was no shouting at all. This is nonsense. This is absolute nonsense. I was not verbally and physically assaulting him. I was just telling him that he shouldn't be here because the builder does not have a licence and shouldn't be sending anyone until we get all this straightened out. So this idea about assault is completely wrong. Hitting around the head, standing on his fingers - he was huge. I wasn't doing anything like that whatsoever. No. I was not acting erratically and would not leave the property. I stayed around until the police came, that was for sure, because I thought shooting through now might look a bit funny, so when the police were going to come we just both stood there and calmly waited for the police to come."
The plaintiff repeated her earlier evidence about Mr Nesci hanging up when she rang him:
"Q. Have you finished your answer?
A. And - yes - I did ring the builder. I'm repeating myself. He wouldn't - he just hung up on me."
Mr Lewis then asked:
"Q. I assume that you are not frequently escorted out by the police from a building?
RASMUSSEN: I object.
HER HONOUR: She hasn't said she was escorted out."
Mr Lewis put to the plaintiff that "I'm going to put it to you squarely, that you didn't want her Honour to know that information, did you?" (referring to the events in Mrs Nesci's email to the defendant). The plaintiff responded that she did not seek to hide information from the Court or indeed anyone, and that the calling of the police had been referred to at the AGM by her.
The plaintiff is correct in saying this. In fact the only evidence before the court concerning the police visit is the AGM transcript tendered by the plaintiff, in which the owner of Lot 7 said:
"ML: Yes. The thing is when in my unit, when I was doing my renovations, there was a lot of problems. Marlene actually requested so that my property manager and also my renovation workers they actually got hassled by Marlene and also in one stage she actually ran into my property without my consent and I have to call police [unintelligible, MR protesting] So and she also went to NCAT [unintelligible, MR protesting] to complain about my property manager and also my renovating workers and the result coming back is NCAT actually mentioned that there's no problem and also all … all the things in compliance. So it was … it was very difficult and this is not the first renovation I do for all my ... rental property." (CB 658)
Ms Lui repeated these allegations during the meeting (CB 659), this time adding that during this visit the plaintiff had "also attacked my worker and also destroyed some of my renovations", adding that she could "submit the police report if you guys want evidence."
Ms Lui's accounts are inconsistent with Mrs Nesci. First, she does not refer to receiving, earlier that same day, the notification to cease work because her builder, Mr Nesci, was unlicensed. She does not refer to his lack of licence at all. Second, she claims that there was a long pattern of harassment by the plaintiff, when not even the defendant claims that this was the case; the incident on 27 November 2019 was the sole event. Third, she claimed that NCAT said there was "no problem" with compliance of any kind, although she carefully leaves out of her complaints that the gravamen of the plaintiff's complaint was that the builder was unlicensed. Fourth, as MFI 7 confirms, there was no police number for this visit and no police "report" has been referred to or tendered during the evidence. Fifth, not even Mrs Nesci claims that the plaintiff destroyed some of the renovations.
The account put to the plaintiff and the version of events given by Ms Lui paint a lurid picture of a slightly-built lady in her seventies not only attacking the builder (and, according to Ms Lui, vandalising the premises) but resisting arrest so successfully that the police had to call Mrs Nesci for help. (Mrs Nesci, curiously, was not at the meeting, even though Ms Lui, an investor and not an occupier, had previously left the conduct of strata affairs to her.)
I am satisfied that the situation is as set out in Mr Rasmussen's submissions at paragraphs 207 - 213. In particular, where Mr Lewis put to the plaintiff that she had tried to conceal her wrongful conduct on that day (including having to be escorted from Lot 7 by the police), I am satisfied that she was frank and open. I reject any submission that the plaintiff acted anything but properly on 27 November, or for any reason other than her concern that unlicensed building work was being carried out despite the Lot 7 owners and managing agents being told to stop.
Mr Lewis submits that the plaintiff has failed to articulate the Jones v Dunkel inference sought with precision and has merely invited the Court to make a general inference that the defendant's evidence would have been adverse to his interest or otherwise not have assisted him in demonstrating the motive or purpose for which he published each of the matters complained of. He submits that the exercise should not even be embarked upon since the plaintiff will fail to discharge the evidentiary burden on the Briginshaw standard.
This is not correct. Mr Rasmussen has identified eight specific areas in relation to malice where he asks me to make findings as to malice and improper motive and identified other factual issues relevant to qualified privilege and justification as well.
I was not told whether Mrs Byrnes did in fact make good her plan to take over the strata despite not being an owner in similar circumstances to the plaintiff (CB 757), leaving all contact with the plaintiff and strata to her son (her name does not appear once in the Court Book) and not having attended the AGM where other persons (Mr Vincent and Nina King) were elected. If she did push the plaintiff off the strata committee as a result of the matters complained of, that could be of significance in relation to damages. However, in the absence of evidence to this effect, I should not make such an assumption.
The plaintiff gave similar evidence about Ms Cruz (who is also known as Ms King) and Mr Vincent. These two persons took over the roles of Treasurer and Chair respectively. I accept the plaintiff's evidence that both of them (as well as Mrs Byrnes' son) showed a degree of coldness and withdrawal. Both of them had previously expressed reservations about what was happening at the AGM and asked for explanations from the defendant. The defendant not only repeated the libels but made them worse (for example, claiming that Purple Plumbing deliberately issued two invoices to get two payments) and this clearly had a significant impact on them.
For all of the above reasons, no Jones v Dunkel inference should be drawn against the plaintiff for failure to call these witnesses.
Looking at each of the publications individually:
1. Contrary to Mr Rasmussen's claim that most events occurred in 2019, the first matter complained of details recent events, namely the refund from Purple Plumbing paid in February 2020 and the 12 times the plaintiff had emailed the defendant "today". The meeting agenda is referred to as the subject matter and in the text and, although Purple Plumbing is not referred to in agenda items, the plaintiff's management style forms part of how the defendant ran the meeting. The content of the matter complained of clearly relates to recent events which will come up for discussion during the meeting in relation to the plaintiff's suitability to hold office.
2. This email relates to the circumstances in which the defendant acknowledged he had made an error in the Financial Statements in the AGM agenda. The Financial Statements had to be approved at the meeting and the plaintiff's correspondence was relevant to this issue.
3. The third matter complained of is headed "Additional information for AGM" and sets out what purports to be an example (namely the BIM/DJE quotes) of the plaintiff's dishonest accusations when she herself is incompetent and not acting in the interests of the owners corporation. This was directly relevant to these allegations, in that it involved activities during the twelve months since the previous AGM.
I am satisfied that the defendant had such a duty to the recipients of the matters complained of in each publication. Whether these were not published to all conceivable interested parties, or to parties who had no interest in receiving them (a submission I have rejected in any event, as is set out in the next subheading of this judgment) is irrelevant. Nor is the duty lost because the defendant did not canvass these matters with the plaintiff first.
Owners in the building provided email addresses for the strata roll: see s 178(1)(c) of the SSMA. Managing agents for Lot owners who provide their email addresses as contacts for their clients and tenants whose interest in building issues lead them to do the same are entitled to receive correspondence concerning strata activities in general and notices of meeting in particular, whether they attend those meetings or not. All that the defendant has to do is to establish that he has their email addresses, and that he has used these for those purposes. I am satisfied that the requisite interest has been made out in such circumstances.
Finally, Mr Lewis submits that, if the Court accepts that a "subset" of tenants or residents should not have received the communications, it does not defeat the privileged occasion for the remainder. I accept this contention. Accordingly, if I have erred, and some of the recipients were not entitled to receive the matter complained of because they did not have the requisite interest, that would not constitute a reason for rejecting the defence for the publications to those recipients who did.
Mr Lewis submitted that those present at the meeting who had a clear entitlement to attend the AGM should be able to hear about (and discuss at the meeting) the management of the building (Div. 3 of Pt 2 of the SSMA, ss 30(4), 33(2) of the SSMA) as well as the individual issues arising. Residents or their agents were entitled to know that the strata manager had found it difficult to manage their affairs in light of the kind of communications he had received from the plaintiff (Murray v Raynor [2019] NSWCA 274 at [23]-[24]).
There are two issues which were not addressed in these submissions. The first, and most important, is that the submissions were made globally, in terms of all three publications, as opposed to being determined for each publication. The second is that Mr Rasmussen and Mr Lewis did not consider, in relation to relevance, that none of the topics or factual material set out in the matters complained of related to issues on the Agenda.
Another problem, in relation to connection, is Mr Rasmussen's claim that most of these events had occurred in 2019. Examination of the events in question shows that, while some had occurred in 2019 and there had been committee meetings where these issues were either not mentioned at all or where the Minutes recorded information to the contrary, but the majority of the allegations related to events over a period of time up to shortly before the meeting. While most of the factual events (Purple Plumbing, BIM/DJE, the trust account discrepancy) were not on the agenda, the issue of the fitness of the plaintiff to fulfil her role as an office-bearer for the owners corporation was, for the same reasons as those set out by Smith SC DCJ in Squillacioti, a relevant and connecting factor.
The facts of this case are a good illustration of the circumstances in which a plea of malice will fail (it should be noted that they failed summarily, a procedure not available in Australia). If the plaintiff had not been dismissed from the school but in fact exonerated, the sheer falsity of what was said, whether the dominant improper motive was established or not, would be sufficient to infer malice. This is the "something" from which the tribunal of fact would determine that the author was either dishonest, or had a dominant motive to injure the plaintiff, or both.
That is very much the case here. The plaintiff's evidence was that most if not all of what the defendant accused her of - such as insisting on hiring BIM despite their giving a higher quotation, not actioning the 23 December 2019 minutes following the discovery that Lot 7's builder was unlicensed and having a shortfall in the trust account which needed to be explained - was contradicted by the documents in his management files the contents of which he could not possibly have misunderstood or forgotten about. Where particulars set out evidence of knowledge of this kind concerning falsity, malice findings are unlikely to be "rare".
The other decision Mr Lewis referred to about the "rare" circumstances where qualified privilege would be defeated occurs in Roberts v Bass (at [109]). However, what was said there was that "[c]ases where recklessness alone will defeat qualified privilege", as opposed to allegations of knowledge of falsity, a distinction Beazley JA observed in Association of Quality Child Care Centres of NSW v Manefield [2012] NSWCA 123 at [118]. I agree with Mr Lewis that malice is much harder to establish where recklessness alone is pleaded. The present case is different, because I am satisfied that a high percentage of the defendant's allegations about the plaintiff were knowingly false, in that they were contradicted by the correspondence in his file and the statements that the plaintiff, the tradesmen involved and other Lot owners had made to him over this period.
Defamation trials where a defendant tells one lie after another were comparatively rare until the past three or four decades, principally because most defamation actions prior to that time involved media defendants whose high standards and in-house lawyers prevented publications of the kind now found on social media or in limited publications in cases such as the present. In media cases, where the journalist was one step removed from the controversy and unlikely to have such motives, recklessness in publishing was more commonly found.
Knowledge of falsity is, however, not malice in itself. In Roberts v Bass, Gaudron, McHugh and Gummow JJ explained how the role of knowledge of falsity (at [77]):
"If the defendant knew the statement was untrue when he or she made it, it is almost invariably conclusive evidence of malice. That is because a defendant who knowingly publishes false and defamatory material almost certainly has some improper motive for doing so, despite the inability of the plaintiff to identify the motive [58]. In Barbaro v Amalgamated Television Services Pty Ltd [59], Hunt J said that "[i]n some of the older authorities, an absence of honest belief on the part of the defendant is treated merely as some evidence of an indirect motive which alone is said to constitute express malice, but the better view, in my opinion, is to treat the two as different kinds of malice". His Honour cited no authority for this novel proposition. Some years later, in Hanrahan v Ainsworth [60], Clarke JA said that, since Horrocks, "it has been accepted that if it is proved that a person has made a defamatory statement without an honest belief in its truth or for a dominant improper purpose ... malice will be made out"."
Their Honours went on to stress, at [78]:
"The knowledge and experience of Justice Hunt in defamation matters is well recognised. But with great respect to his Honour and Clarke JA, they erred in asserting that lack of honest belief defeated a defence of qualified privilege. There is no basis in principle or authority for treating knowledge of falsity or lack of honest belief as a separate head of, or equivalent to, malice. In the law of qualified privilege, the common law has always regarded malice as the publishing of defamatory material with an improper motive. Knowledge of falsity is "almost conclusive evidence" that the defendant had some improper motive in publishing the material and that it actuated the publication. That judges have treated knowledge of falsity as almost conclusive evidence of malice is no ground, however, for treating it as a separate head of, or equivalent to, malice. In some circumstances, lack of honest belief in what has been published may also give rise to the inference that the matter was published for a motive or purpose that is foreign to the occasion of qualified privilege. Nothing in Lord Diplock's speech in Horrocks [61] supports treating the defendant's knowledge or lack of belief as a separate head of, or equivalent to, malice. Indeed, Lord Diplock expressly said [62] that, if it is proved that the defendant did not believe that what he or she published was true, it was "generally conclusive evidence" of improper motive."
(Emphasis added)
In Palmer v McGowan (No 5) (2022) 404 ALR 621; [2022] FCA 893, Lee J explained these principles at [229]-[232]:
"[229] Relevantly, two streams of what may be termed "abuse of privilege" can be drawn from the High Court's reasoning in Roberts, and the common law more generally.
[230] The first is knowledge of falsity of the statement. As is well-established, proof of knowledge of falsity is a means by which malice may be established, usually conclusively: Roberts v Bass (at 31-32 [76]-[77] per Gaudron, McHugh and Gummow JJ). In circumstances where knowledge of falsity alone is relied on, it is generally not necessary to identify the improper motive as there can be no proper motive in those circumstances unless the defendant has a duty to publish the matter: Gross v Weston [2007] NSWCA 1; (2007) 69 NSWLR 279 (at 297 [52(6)] per Hunt AJA, with whom Handley and McColl JJA agreed at 280 [1] and 280 [2] respectively). Short of knowledge of falsity, reckless indifference may be sufficient to prove improper motive in exceptional circumstances or in combination with other factors. As Gaudron, McHugh and Gummow JJ stated in Roberts v Bass (at 34 [84]):
"In exceptional cases, the sheer recklessness of the defendant in making the defamatory statement, may justify a finding of malice. In other cases, recklessness in combination with other factors may persuade the court that the publication was actuated by malice. In the law of qualified privilege, as in other areas of the law, the defendant's recklessness may be so gross as to constitute wilful blindness, which the law will treat as equivalent to knowledge."
See also Lindholdt (at 545 [141] per McColl JA); Gross v Weston (at 295 [43] per Hunt AJA, with whom Handley and McColl JJA agreed at 280 [1] and 280 [2] respectively).
[231] The second is the connected, although perhaps broader, concept of a malicious or improper purpose. That is, even in circumstances where the defendant believed the statement to be true or was indifferent to its truth, if it is found that the dominant motive in making the defamatory statement was an improper one, the protection is forfeited: see Horrocks v Lowe [1975] AC 135 (at 149 per Lord Diplock). Alternatively stated, the applicant's task is to demonstrate that the respondent was actuated by motives of spite or ill-will independent of the occasion on which the communication was made, and that motive was a causative factor in the respondent publishing the defamation: Wright v Woodgate (1935) 2 Cr M & R 537; (1935) 150 ER 244 (at 246 per Parke B), cited in Adam v Ward [1917] AC 309 (at 349 per Lord Shaw). By way of analogy, the relevant inquiry in seeking to ascertain an improper purpose is much like that required to make out the tort of collateral abuse of process: see Martin v Norton Rose Fulbright Australia [2021] FCAFC 216; (2021) 395 ALR 413 (at 457 [202] per Jagot, Katzmann and Banks-Smith JJ).
[232] A good example of an improper motive sufficient to make out a finding of malice to defeat the defence of qualified privilege is evident in the New South Wales Court of Appeal decision in Howell v Haines (1997) Aust Torts Reports ¶81-409. There, the appellant, an aspiring politician, had written to members of his party alleging that the respondent was guilty of corruption. Although the appellant honestly believed the truth of this assertion, he had forfeited his privilege because his dominant motive for airing the allegation was to hurt an opposing wing of his party and the respondent. If the respondent, by contrast, was using the occasion for its proper purpose, but incidentally had feelings of resentment towards to applicant, he would not be deprived of the privilege. That is, the protection is not lost if the ill-will is not the primary purpose behind the respondent making the statement."
This passage ([77] - [78] and in particular the emphasised sentence at the end of [78]) from Roberts v Bass have been endorsed many times, most recently in Duma v Fairfax Media Publications Pty Limited (No 3) [2023] FCA 47 at [225], and cited as authority in other jurisdictions such as New Zealand (Craig v Williams [2019] NZSC 38; [2019] 1 NZLR 457 at [30] and [125] (Elias CJ, William Young, Glazebrook, Ellen France and Arnold JJ)). They were referred to with approval by Payne J in Bolton v Stoltenberg [2018] NSWSC 1518 at [218] and this analysis was accepted on appeal, although not specifically referred to. It has been endorsed by intermediate appellate courts; in Lesses v Maras (2017) 128 SASR 292; [2017] SASCFC 48 at [171], the Full Court stated:
"Ordinarily, conveying matters known or believed to be false will be inconsistent with using the occasion to convey information in discharge of a duty or in service of a reciprocal interest and hence will conclusively demonstrate that the publisher must be actuated by some ulterior purpose."
A practical example of such a finding, even where no precise motive may be demonstrated, is provided by the Full Court in Machado & Anor v Underwood [2016] SASCFC 65 at [141]:
"In this case, at the risk of being unduly repetitive, Mr Machado knowingly published false and defamatory material not germane to any legitimate concerns raised in the balance of the email. As such, the finding of an improper motive for doing so was open, notwithstanding any inability to identify the precise motive."
The plaintiff has set out, in the particulars in the Amended Reply, that the statements knowingly falsely made by the defendant. There does not seem to be much dispute that most, if not all, of what he said was false. The question is whether he had an improper motive for doing so and whether an improper motive can be made out. An improper motive can be something as simple as wanting to harm the plaintiff (although in Callan v Chawk [2023] FCA 898 at [175], Halley J found for the applicant despite not being satisfied that the dominant motive was to harm) or to get her sacked or removed from a position (the plaintiff's main argument) or to try to blame the plaintiff for her own wrongdoings, in the eyes of the strata members (the plaintiff's second argument) or some other third party, such as the defendant's employers.
In summary, as Tobias AJA stated in Enders v Erbas & Associates Pty Ltd [2014] NSWCA 70 at [70(iv)], although knowledge that a defamatory statement is untrue is almost invariably conclusive evidence of malice, it is still necessary for the plaintiff to establish that the defendant had an improper motive for publishing the false and defamatory material. However, if the precise motive cannot be identified, malice can still be made out: Machado & Anor v Underwood (at [141]); Lesses v Maras (at [171]).
However, there was another matter that was drawn to the defendant's attention, and this was information given by BIM itself. BIM not only provided a much cheaper quote, but picked up an additional problem that CJE had missed, namely the need for spalling to combat concrete cancer (Item 3, CB 344 Tab 57). The BIM quote was only larger in total because it included the spalling costs which DJE had missed and thus not quoted upon. There is no contest that this extra spalling work was necessary because concrete cancer was also found.
The plaintiff cannot be blamed for any misunderstandings the defendant may have had about this extra work because it was Mr Harry Muchmore of BIM, not the plaintiff, who explained to the defendant on 23 October 2019 that additional repairs would be necessary for the concrete cancer and confirmed this by email that same day, attaching photographs of the damage (CB 353 - 4 Tab 58, Tab 59; plaintiff's submissions 179 - 183). Mr Muchmore's email to the defendant was in the plainest of terms and attaching the relevant material:
"Hi Mark,
Sorry for the confusion before, this is the internal unit spalling estimate.
As discussed, we have removed the magnesite and discovered there is concrete spalling with the slab of unit 7.
At this stage we anticipate 100 litres of spalling works to be carried out.
Our spalling rate of $45.00 + GST per litre rate means this will cost an extra $4,500.00 + GST.
We will require approval to proceed with spalling works and look forward to your reply.
Kind regards,
Harry Muchmore| Construction Manager | 0405917295
6 attachments IMG_0528.JPG 95K IMG_0527.JPG 139K 354"
BIM did in fact carry out the spalling work required (see Claim #3, CB 62, 63 Tab 1, CB 360 - 1 Tab 60); it is specified as a Client Variation in Claim #3 (CB 63 Tab 1); it did not appear on Claims #1 or #2 (CB 58 and 62 Tab 1). This Variation for additional work (the reason for the greater charges) had been approved and paid by the owners corporation, another fact kept from the recipients of the defendant's diatribe against the plaintiff. DJE's quote was for a lower sum only because they missed or failed to quote for this additional work which, in the circumstances, was a serious oversight as concrete cancer can cause serious problems. By attaching only the invoices from BIM as proof that DJE's quote was for a lesser amount, the defendant was providing misleading and deceptive evidence to the recipients of the third matter complained of.
A further misstatement was the claim that obtaining this second quote was unnecessary and irresponsible. Even if the quote from DJE Services had been lower than BIM, the owners corporation would still have had to consider the DJE Services quote in the light of a second quote, because the Agency Agreement, under the heading "Repairs", required the obtaining of "at least two quotations for large works (repairs and maintenance)" (CB 246 Tab 27). There is no evidence the defendant obtained such a second quote so, by doing this in his place, the plaintiff was helping the owners corporation, not wasting its money on a more expensive and/or unnecessary second quote.
There can be no doubt that the defendant was well aware of all these matters and, as such his misrepresentation of this quote as both higher and unnecessary (and thus evidence of the plaintiff's financial irresponsibility) was deliberately and knowingly made. The fact that the BIM quote was lower than the DJE quote was self-evident from a comparison of the works quoted for and the fact of its being lower was recorded on page 2 of the Minutes of the owners corporation meeting held on 23 December 2019 (CB 382 Tab 63). As Mr Rasmussen points out at paragraph 187 of his submissions, had the defendant attached these quotations from both DJE and BIM, these errors would have become immediately apparent.
In other words, as Mr Rasmussen's submissions point out at paragraph 185, it would have been impossible for the defendant not to know the falsity of his allegations about the plaintiff obtaining an unnecessary and more expensive quotation. The defendant knew that the BIM quote was better because it was cheaper for the non-spalling work and had correctly picked up the need for spalling and quoted on it. He knew this because Mr Muchmore sent him two emails and telephoned him. What is more, he accepted the Progress Claim and invoice for $4,950; as he was responsible for paying invoices (Accounting Services, item 3, CB 246 Tab 27) it was his job to check each invoice from BIM against their quotations to see that it was justified before paying it.
The defendant presented the documentation to his readers in a misleading way. Had he attached both quotations, the falsity would have been obvious. Instead, he attached the quotation from DJE (CB 45 - 6 Tab 1) and the four claims and invoices from BIM (CB 47 - 63) to the third matter complained of. He included the minutes of the meeting only as an attachment to the plaintiff's email, and they would be read in that light, despite having been approved at the 3 April 2020 meeting. This involved a degree of planning by the defendant which is indicative of knowledge of the falsity of his claims.
The defendant was obliged to keep both quotations because these were records of the owners corporation both under the legislation and conformably with the Agency Agreement (CB Tab 27, pp 244 - 245). His purpose in supplying only one of these to the recipients (followed by 20 pages of BIM payments without disclosing that this larger sum included additional work that DJE had missed) was to support his allegations. He was not telling them that there were two different views and inviting them to consider the evidence; he deliberately did not give them the BIM quote so that the recipients would believe his all allegations about the plaintiff, including that the second quote was unnecessary as well as unreasonably high. His real purpose, in comparing "apples and oranges" (plaintiff's submissions, paragraph 187) was to assist in his campaign to get rid of the plaintiff as an office bearer and contact person for the owners corporation.
BIM, like Purple Plumbing, provided exemplary service to the owners corporation. They attended promptly, gave comprehensive reports and found problems that other tradesmen (like DJE) had overlooked. In the course of attacking the plaintiff, the defendant has responded by accusing them of pocketing money, overcharging and incompetence when none of these slurs was warranted.
Mr Lewis refers in passing to a claim that the plea of malice is "not pleaded in the way advanced" but without specifying how this is so. This kind of submission appears several times in the submissions, and not only as to the issue of malice; for example, his statement at paragraph 54 of the submissions that a submission is "plainly outside the plaintiff's pleaded case and it should be rejected", although not explaining what part of the "pleaded case" is referred to and how it falls outside it.
Mr Rasmussen asks me to draw a Jones v Dunkel inference in relation to the factual material in support of this particular of malice, and I do so.
I am satisfied to the requisite standard that the defendant knew it was misleading to claim that DJE gave "free" advice; DJE never said their advice would be free and they were not paid only because they did not inform the plaintiff prior to their visit as they were required to do. The defendant also knew it was false to say that his hearsay-style third party report of results from an inspection by DJE was equivalent to the information from Phillip Kauter found from extensive pressure and leakage tests using specialist personal and equipment from Aquasearch and two visits to the property (Tcpt, 27 March 2023, p 44(21)-(30); CB 341 Tab 56).
Mr Rasmussen asks me to draw a Jones v Dunkel inference and I do so.
This may appear to be a very minor matter, but this is another of the defendant's attempts to put the plaintiff in the wrong where she has insisted on a careful analysis of the problem (and which identified that there was indeed a problem). Although his plumbers missed the problem, he considers he is entitled to the praise, and the plaintiff to the blame, because he was able to get an advice for free, even if it was wrong.
Mr Rasmussen asks me to draw a Jones v Dunkel inference in relation to the failure of the defendant to give evidence. I do so.
If I accept the first communication about the double payment occurring in November to have happened at that time because it was only then that the defendant first realised his mistake, and Purple Plumbing paid the refunded monies in the next month, December 2020, after receiving four emails from Ms Taylor, that puts a different complexion on these matters. Even if there were some phone calls as well, given the nature of the request (which would involve Purple Plumbing checking its own records), this is hardly an unreasonable delay and involved no effort, Herculean or otherwise, from the defendant, as a staff member was doing this.
I am satisfied that the defendant knowingly made these false statements in the first matter complained of in order to cover his incompetence in paying an account twice in such circumstances, in failing to realise his error for four months and in putting the Purple Plumbing monies into the wrong account (they should have been paid into the Administrative Fund, not the Capital Works Fund). I draw a Jones v Dunkel inference from the defendant's failure to give evidence.
Neither the figure of '-618.28' (for the 2018 financial year) nor the figure of '$0' can be correct. Both the net assets and net owners funds were in balance in June 2019 (for the sum of $39,824.90).
The defendant knew that he had allowed a recurring shortfall in the balance sheet to remain there for nearly a year and did nothing to rectify the problem until shortly before the AGM, when he provided a fictional book entry for the purpose of balancing the books. The plaintiff noticed this sudden change in the Balance Sheets and queried this. Unable to fix the problem, and aware he had let this fester for eight months, the defendant took refuge behind false allegations that the plaintiff had accused him of stealing the sum, which was also his excuse for seeking advice from going to Ms Goldsborough. It was necessary for him to accuse the plaintiff of calling him a thief because he could not or would not go to her to say that he did not know how to fix this discrepancy. I am satisfied that he did not know what to do with it because he let the situation drag on for so long.
Clearly the defendant was aware that it was his shortcomings as a bookkeeper that were the problem. His ancillary dominant improper motive for his accusations against the plaintiff was to divert attention from his own wrongdoings. He turned his own errors into the unfounded accusations set out in paragraph 4 of the matter complained of. Having made these findings, I would add that I draw a Jones v Dunkel inference from the defendant's failure to give evidence.
The defendant's replacement of the decisions recorded in the minutes of the previous meeting for approval on the agenda in any one of the three meetings on 11 May 2020 (the AGM, the EGM and the Strata meeting for election of officers) was a deliberate decision by the defendant, in the face of a request from the plaintiff for their consideration and an explanation as to why these resolutions had not been acted on.
In addition, given the sarcastic and rude tone of the third matter complained of only hours earlier before the AGM, his repetition of the allegations in each of the matters complained of in similar terms was a repetition of the libel.
I am satisfied to the Briginshaw standard and draw an inference conformably with the principles in Jones v Dunkel as to the defendant's failure to give evidence
The defendant had no significant problems with the plaintiff until he wrote to her on 4 March 2020 saying that he had difficulty taking instructions from her because of the many disputes she had with the other owners in the building. When the plaintiff replied on 5 March 2020 saying (correctly) that the only dispute between the owners corporation and herself was the ongoing dispute with Lot 7 over their unlicensed builder, the defendant had to find another way to deal with the plaintiff, so he chose the path of attack.
The defendant's desire to protect himself from the consequences of his incompetence led him to accuse, falsely to his knowledge, the plaintiff of wrongdoing when he in fact was responsible for these problems. This was the dominant improper purpose of each of the three matters complained of. By sending the matters complained of blaming the plaintiff, he managed to leave consideration of these errors out of the AGM meeting agenda and every time she tried to explain things (in fact, 33 times) at the meeting, he muted her.
Mr Lewis's submissions (paragraph 35) paint a different picture. He asserts that, as at 6 May 2020, the defendant had written to the owners of Lots in the building information concerning the AGM, including the Notice of AGM, which was accompanied by financial statements for the building, the inference being that there was nothing wrong with these financial statements. The plaintiff's complaint is not described as being concern over the errors for which the defendant later apologised but as being about "the way in which Mr Gitman had recorded specific information" and that she "sought to have Mr Gitman amend them before they were sent to owners". When he did not amend the accounts, the plaintiff sent further emails which are described as being "threatening in tone", such as asking for an explanation "in terms that a Public/Chartered Accountant would understand" or "in terms that…NCAT would understand."
The 11 emails exchanged between the plaintiff and the defendant on 29 April 2020 are set out in Appendix 2 to Mr Rasmussen's submissions. I agree with his submission that they should be considered in their entirety.
First of all, the plaintiff did not send "at least 12" emails. She sent 7 emails and received 4 replies. How the material in the emails on 29 April 2020 could have been reduced to a five-minute phone call was never explained. I am satisfied it is a knowing untruth.
Nor is it the case that answering these emails was costing, or did cost, the owners corporation funds in the first place. Mr Rasmussen points out in his submissions:
"311. Under the terms of the agency agreement, the defendant was paid by the owners corporation for two types of services: (i) The Agreed Services (defined at CB 242 Tab, 27 and set out on CB 246 Tab 27), were paid as a flat fee of $3,080 per annum (CB235 Tab 27); (ii) The Additional Services,(defined at CB 242 Tab, 27 and set out on CB 247 Tab 27), were charged at an hourly rate set out in Schedule B - Fees (CB Tab 27, p. .248): $154.00 for the strata managing agent and $66.00 for administrative staff. Additional Services fees are also known as Schedule B fees.
312. If the responses of the defendant on 29 April 2020 to the plaintiff's emails fell under Agreed Services then there was no additional charge to the owners corporation for them (T213.17-33).
313. If the responses of the defendant on 29 April 2020 to the plaintiff's emails fell under Additional Services, then the charge must have been invoiced to the owners corporation by the defendant and there must be a record of the payment in the financial accounts of the owners corporation.
314. The defendant has supplied the Detailed Expenses document for the period 1 May 2019 to 31 July 2019 (CB 816-9 Tab 128). The Additional Services charged by the defendant in this period are shown on page 817 under Admin - Management Fees - Additional as a charge on 1 July 2019 for additional services June 2019 for $61.44.
315. The defendant has not supplied the Detailed Expenses document for April/May 2020 which would have shown the Additional Services charge, if any, for the 29 April 2020 email exchange."
No evidence has been provided that Additional Services Fees were charged by the defendant for the reading of the plaintiff's seven emails and his four responses to the plaintiff's emails on 29 April 2020 or, for that matter, for the emails between 29 April and 6 May 2020 (the period of time nominated in the defendant's opening submissions), or subsequently. Mr Rasmussen submits that I should draw a Jones v Dunkel inference from the failure of the defendant to supply the detailed expenses for the relevant period, which is unexplained. While I would accept that any such expenses information would be in the possession of third parties, the plaintiff's employment and association with this owners corporation having long since ceased, some form of calculation of these costs incurred by the plaintiff's conduct should have been attempted.
Nor were any of the emails "unnecessary". The plaintiff was entitled to be concerned about inconsistencies in the financial records, particularly given the circumstances that she, and not the defendant, had discovered the shortfall and where there had been earlier financial problems, such as paying Purple Plumbing twice.
Mr Lewis refers me to Stocker v Stocker [2020] AC 593; [2019] UKSC 17 (in which the Supreme Court explained that an unduly legalistic approach should not be taken to social media publication) and to the endorsement of those principles in a series of Australian decisions which go beyond the social media context. It is certainly the case that a degree of elasticity should be employed when dealing with the evidence necessary to establish justification arising from a relatively informal email.
However, in the present case, no amount of elasticity could permit a plea of justification to succeed. There is no evidence whatever to establish the truth of any of the elements of the imputation. Each of the matters raised in the plaintiff's emails was an entirely proper matter for her to have raised and, given the incompetence the defendant had shown in his management of the accounts on the earlier occasions referred to above, she was entitled to express herself in strong language in doing so.
The defence of justification to imputation 4(d) accordingly fails.
In the present case, the plaintiff told the Court that she lived quite near to her mother's unit and that she visited her regularly. She was concerned that the matters could be repeated in her neighbourhood. She ran into the other residents while she continued to visit her mother for the period up until sale in late 2021. She was also concerned that other strata managers who knew the defendant would have heard about her. She took a position on her own strata and was worried because of a professional connection between that company and the defendant.
Mr Lewis particularly relied upon the similar factual circumstances in both Murray v Raynor and Gough v Squillacioti because both cases involved disputes between neighbours, in circumstances where the extent of publication did not go beyond those neighbours. Both these judgments are of little assistance, for the following reasons.
First, the difficulty in applying the observations on damages in Murray v Raynor is that the Court's observations (which were alternative findings) on damages were bound up in its acknowledgement that the assessment of damages in other jurisdictions was being conducted on a very different (and, as was later acknowledged, correct) basis, but without indicating whether the Court accepted that view or would proceed with the different approach in jurisdictions other than New South Wales. The findings in Gough v Squillacioti were also alternative findings and were correspondingly brief.
A much better analogy than these cases, in terms of the circumstances, extent and number of publications as well as the date when these were made, may be found in Pavlovic v Karzon, where the nature and extent of publication was very similar. The Court of Appeal dismissed an appeal from an award of $70,000 damages (including aggravated damages) and an injunction for the publication of two emails to eight persons. In the course of dismissing the appeal, Bradley J stated:
"[59] In addressing this court for the applicants, Mr Gilbertson KC submitted there were two further matters that demonstrated his Honour's findings on malice were erroneous. The first was the limited circulation of the two emails, being sent only to the manager, the five committee members, the two directors of Wandulla, and its solicitor. The second was that Ms Pavlovic honestly believed Mr Karzon had been conducting an illegal brothel.
[60] Ms Pavlovic's limited publication of the emails does not indicate malice. Had she posted them on social media, malice might be inferred on that basis. However, the limited publication is not a basis for setting aside the trial judge's factual finding that Ms Pavlovic acted with the improper purpose of harming Mr Karzon's reputation."
Although these observations were addressed to malice rather than damages, they confirm the importance of not treating defamation actions generally as a "numbers game". The trial judge's assessment of damages was so correctly carried out that it was not the subject of appeal.
This brings me to the second concern in applying Murray v Raynor, namely that, in terms of the basis for assessment, Payne JA considered there was very little evidence of damage to reputation, in that only one witness had said that he had "wondered" about the damage to the plaintiff's reputation.
It is something of an oversimplification to treat any a defamatory publication to a small group of neighbours as a trivial or minor claim merely because of that fact. This includes basing the damages on the number of persons who give evidence that they thought less of the plaintiff. In reality, the difficulty in obtaining witnesses who will speak frankly about thinking less of the plaintiff, in terms of damage to reputation, is widely known (Bauer Media Pty Ltd v Wilson (No 2) at [515]). In addition, damage to reputation is not necessarily linked to extent of publication. Speaking about serious harm rather than damages, Dingemans J, in Sobrinho v Impresa Publishing SA [2016] EWHC 66 (QB); [2016] EMLR 12 at [47] noted that "[r]eported cases have shown that very serious harm to a reputation can be caused by the publication of a defamatory statement to one person".
Extent of publication is but one of many factors in damages. Implicit in submissions that local and limited publications are trivial is the inference that the "big damages" awards somehow belong only to trials involving media publications read by hundreds of thousands and usually involving a famous (or infamous) plaintiff. To my observation, most defamation actions are now brought for social media or email posts where the content, extent of publication and lack of fame of the parties closely resemble "neighbourhood dispute" defamations. However, others do not share my view. In Do v Kolsumdet Pty Ltd [2023] FCA 592 at [10], Bromwich J stated that defamation actions that were of a "neighbourhood dispute" nature (as opposed to
celebrities such as Geoffrey Rush or Ben Roberts-Smith), should be brought in the lower courts, and that he would "need some persuading that it was suitable for the Federal Court" to hear the applicants' case. However, these proceedings have been brought in this court, which is well suited to hear claims of the kind which are not suitable for the Federal Court, and the concerns expressed by Bromwich J have no application here.
It would be easy to dismiss the matters complained of as being an angry outburst from the defendant that the plaintiff should have put behind her. However, she was clearly profoundly affected by these events; the evidence her husband gave painted a graphic picture of her suffering a range of health issues where she has refused to see the doctor despite sight and hearing issues, total withdrawal, spending days in bed and other symptoms that clearly deeply worry him. This was not just one offensive email, as was the case in Murray v Raynor, but three, and the evidence of ongoing adverse response from the Lot owners was still occurring at the end of 2021, as the events at the auction show. The fact that she was re-elected as secretary suggests that some of the recipients of the publication may not have believed everything that the defendant said, but may also have been for other reasons, such as the desire to provoke the resignation of an incompetent and argumentative strata manager. The plaintiff does not appear to have anything to do with the other Lot owners after the AGM and I assume this is because despite re-electing her, they displayed the unfriendly behaviour she described in her evidence. There is also evidence of the grapevine effect, such as the conduct of other residents at the auction.
At the same time, substantial allowance must be made for the limited extent of publication, the degree of seriousness of the imputations and the circumstances of publication, namely an owners corporation email about the AGM in circumstances where conduct of this kind is more likely to be expected than not. These are powerful factors, putting the damages at the bottom of the range.
Taking all of the above into account, and having regard to submissions from counsel, there should be an award sufficient to console the plaintiff, but it should be towards the bottom end of the range of damages appropriate.
Such an award must still be made consistently with the facts of the case, and a substantial sum is not warranted for such a limited publication in terms of the number of persons who saw it and the harm done.