Defamation - Application to strike out imputation - Whether capable of being conveyed - Plea of exemplary damages - Whether matters pleaded capable of giving rise to claim for exemplary damages - Turns on own facts

Second Defendant : Mr W S Martin QC & Ms A H Pearce

Cohen v Sir Moses Montefiore Jewish Home & Ors [2003] NSWSC 502

Crestland Investments Pty Ltd v Parisi Holdings Pty Ltd [2003] WASC 148

Gardiner v Ray [1999] WASC 140

Gumina v Williams (No 1) (1990) 3 WAR 342

Jones v Skelton [1963] 1 WLR 1362

Lewis v Daily Telegraph Ltd [1964] AC 234

McCann v Switzerland Insurance Australia Limited [2000] HCA 65; (2000) 203 CLR 579

Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293

Sleeman v Nationwide News Pty Ltd [2004] NSWSC 954

Smith v New South Wales Bar Association (No 2) [1992] HCA 36; (1992) 176 CLR 256

Taylor v Jecks (1993) 10 WAR 309

Taylor v Network Ten (Perth) Pty Ltd [1999] WASC 264

Todd v Swan Television and Radio Broadcasters Pty Ltd [2001] WASC 334

Australian Consolidated Press v Uren [1966] HCA 37; (1966) 117 CLR 185

Byrne v Twaddle [2001] WASC 325

Chan v Trevor [2004] WASC 53

Community Radio Federation Ltd v Goja [1999] VSCA 72

Heytesbury Holdings Pty Ltd v City of Subiaco (1998) 19 WAR 440

Maxwell v Pressdram Ltd [1987] 1 WLR 298

Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663

Uren v John Fairfax & Sons Ltd [1966] HCA 40; (1966) 117 CLR 118

1 MASTER NEWNES: The defendants have applied to strike out parts of the plaintiff's amended statement of claim in a claim for defamation. All of the defendants seek to strike out the imputation which the plaintiff pleads was conveyed by the words complained of and the second and third defendants also seek to strike out the plaintiff's claim for exemplary damages.

2 In the amended statement of claim, the plaintiff pleads that he is, and was at all material times, the sole director of Cairns Pty Ltd which carries on business as a real estate agent under the name "Realty Executives Keith Howes & Associates". The first defendant is a legal practitioner, the second defendant is the publisher of The West Australian newspaper and the third defendant is a journalist employed by the second defendant.

3 It is pleaded that, on 24 September 2004, the Federal Magistrates Court of Australia delivered a decision in proceedings between Cairns Pty Ltd and a motor vehicle dealer, Fleetman Pty Ltd ("Fleetman"). The Court held that Fleetman had engaged in misleading and deceptive conduct during the course of selling a car to Cairns Pty Ltd.

4 The plaintiff alleges that, on or about 19 October 2004, the third defendant, Mr Cowan, contacted the first defendant, Ms Quinlivan, the solicitor for Fleetman, to say that he was a journalist writing a story about the decision and asked the first defendant if she wished to say anything in relation to the matter. It is pleaded that the first defendant spoke, and thereby published to the third defendant, the following words of and concerning the plaintiff:

"Fleetman would appeal the decision on legal grounds. It would also appeal against the Magistrate's findings about the credibility of the director of Cairns. We believe that we have an extremely strong case."

5 It is alleged that, at the time, Ms Quinlivan and Mr Cowan both knew that the plaintiff was the sole director of Cairns Pty Ltd.

6 The plaintiff pleads that the words spoken by Ms Quinlivan meant, or were understood to mean, that the plaintiff had been dishonest in giving his evidence at the trial of the action between Cairns Pty Ltd and Fleetman.

7 It is then pleaded, in par 12 of the statement of claim, that on page 5 of the issue of The West Australian of 20 October 2004, the second defendant and Mr Cowan published, together with a large colour photograph of the plaintiff, the following defamatory words of and concerning the plaintiff:

"Wheels come off luxury car deal

Prestige car dealer Henley Saab has been ordered to pay almost $10,000 to a real estate agent after a magistrate found the dealership had engaged in misleading and deceptive conduct when it sold him a luxury car.

Realty Executives Perth owner Lee Robinson claimed Fleetman Pty Ltd, the company behind Henley, had sold his company, Cairns Pty Ltd, a 2000 model Saab 9-5 Griffin for almost $90,000. He had expected to get a 2001 model.

Mr Robinson told Federal Court Magistrate Murray McInnis, that he had bought the car after a discussion with Henley Saab sales manager Gareth Hughes in October 2001.

'I told Mr Hughes that I was not happy with the first vehicle because of the problems I was experiencing with it and that I would take my business elsewhere and buy a different brand of vehicle,' Mr Robinson said. 'He said to me words to the effect that he could 'put me into' a new black Saab 9-5 Griffin V6 which was a demonstration model.'

'He said to me that the owner of the dealership, Brian Gardner, had been using this vehicle since March 2001 as his personal transport.'

He said he had assumed it was a 2001 model, but a few months later a Mercedes dealer who was trying to sell Mr Robinson a car for his wife discovered it was a 2000 model.

Mr McInnis found that Mr Robinson would not have bought the car if he had been told it was a 2000 model, and the company had breached the Trades Practices Act by not informing him.

Fleetman's lawyer, Lynette Quinlivan, said her client would appeal against the decision on legal grounds. It would also appeal against the magistrate's findings about the credibility of Mr Robinson.

'We believe that we have an extremely strong case,' she said.

But Mr Robinson vowed to continue fighting, revealing he had already spent $20,000 in legal fees and was prepared to spend $200,000.

'With the sort of character I am, if I believe I have been duded I will keep going and if they win their appeal I will go to the High Court even though it's Brian Gardner,' he said.

Photo caption

Driving dispute: Lee Robinson with his 2000 model Saab 95 Griffin. He thought he had a 2001 model."

8 It is pleaded that the article meant, or was understood to mean, the plaintiff had been dishonest in giving his evidence at the trial of the action between Cairns Pty Ltd and Fleetman.

9 The plaintiff pleads that Ms Quinlivan is liable for the re-publication by the second and third defendants of the words she spoke to the third defendant. The same defamatory imputation is pleaded in respect of that re-publication.

10 The principles to be applied on an application of this sort are relatively well established. Imputations will be struck out at this stage if they are plainly incapable of being conveyed by the words complained of: Gumina v Williams (No 1) (1990) 3 WAR 342 at 346; Taylor v Jecks (1993) 10 WAR 309 at 319. In determining whether the defamatory imputations alleged are capable of being conveyed by the words complained of the usual starting-point is the well-known passage from the judgment of the Privy Council in Jones v Skelton [1963] 1 WLR 1362 (at 1370 - 1371):

"In deciding whether words are capable of conveying a defamatory meaning the court will reject those meanings which can only emerge as the product of some strained or forced or utterly unreasonable interpretation. In Capital and Counties Bank v George Henty & Sons [1882] 7 AC 741, 745 Lord Selborne LC said:

'The test, according to the authorities, is, whether under the circumstances in which the writing was published, reasonable men, to whom the publication was made, would be likely to understand it in a libellous sense.'

The ordinary and natural meaning of words may be either the literal meaning or it may be an implied or inferred or an indirect meaning: any meaning that does not require the support of extrinsic facts passing beyond general knowledge but is a meaning which is capable of being detected in the language used can be a part of the ordinary and natural meaning of words. See Lewis v Daily Telegraph Ltd [1963] 2 WLR 1063; [1963] 2 All ER 151 HL(E). The ordinary and natural meaning may therefore include any implication or inference which a reasonable reader guided not by any special but only by general knowledge and not fettered by any strict legal rules of construction would draw from the words. The test of reasonableness guides and directs the court in its function of deciding whether it is open to a jury in any particular case to hold that reasonable persons would understand the words complained of in a defamatory sense."

11 The person to whom it is alleged the words were spoken will be assumed to be a reasonable person, not unusually suspicious or unusually naive, nor avid for scandal. In Lewis v Daily Telegraph Ltd [1964] AC 234, Lord Reid said (at 258):

"There is no doubt that in actions for libel the question is what the words would convey to the ordinary man: it is not one of construction in the legal sense. The ordinary man does not live in an ivory tower and he is not inhibited by knowledge of the rules of construction. So he can and does read between the lines in the light of his general knowledge and experience of world affairs."

12 There is, however, an important distinction to be drawn between a person's understanding of a publication and judgments or conclusions which that person may arrive at as a result of his or her own beliefs and prejudices. In that respect, Mason J said in Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293 (at 301):

"It is one thing to say that a statement is capable of bearing an imputation defamatory of the plaintiff because the ordinary reasonable reader would understand it in that sense, drawing on their own knowledge and experience of human affairs in order to reach that result. It is quite another thing to say that a statement is capable of bearing such an imputation merely because it excites in some readers a belief or prejudice from which they proceed to arrive at a conclusion unfavourable to the plaintiff. The defamatory quality of the published material is to be determined by the first, not by the second, proposition."

13 In that case, it was held that a newspaper report which does no more than state that a person has been arrested and charged with a criminal offence is not capable of bearing the imputation that the person is guilty or probably guilty of that offence.

14 It was submitted on behalf of the second and third defendants that the statements that the first defendant believed Fleetman had an extremely strong case on an appeal against the Magistrate's findings as to the credibility of the plaintiff, were not capable of conveying an imputation that the plaintiff had been dishonest in giving his evidence at trial.

15 Senior Counsel for the second and third defendants referred to Cohen v Sir Moses Montefiore Jewish Home & Ors [2003] NSWSC 502 where the Court adopted the definition of "dishonest" in the Macquarie Dictionary of "not honest; disposed to lie, cheat or steal; ... proceeding from or establishing lack of honesty; fraudulent". Counsel also referred to Sleeman v Nationwide News Pty Ltd [2004] NSWSC 954 where (at [99]), Levine J said that:

" 'Dishonesty' connotes a state of mind ... involving deliberateness and intention, something far more significant than a merely objective statement that something is 'misleading and inaccurate'."

16 Reference was also made to McCann v Switzerland Insurance Australia Limited [2000] HCA 65; (2000) 203 CLR 579 where Gaudron J said (at 596):

"Dishonesty is an ordinary concept, not a term of art. It is, on that account, difficult to define in any comprehensive manner. However, dishonesty is a matter to be determined by reference to the mental state of the person whose conduct is in issue. It was pointed out in Peters v The Queen [1998] HCA 7; (1998) 192 CLR 493 at 503 that:

'In most cases where honesty is in issue, the real question is whether an act was done with knowledge or belief of some specific thing or with some specific intent.' "

17 In the same vein, after referring to several authorities, Callinan J concluded (at 637) that "dishonesty" referred to conscious and deliberate conduct.

18 In the context of this imputation, it was submitted, the word "dishonest" must mean conscious and deliberate lying in the course of giving evidence.

19 It was submitted that to say that a person's evidence was not credible is not to say that the person was dishonest. Senior Counsel for the second and third defendants referred to Smith v New South Wales Bar Association (No 2) [1992] HCA 36; (1992) 176 CLR 256, where the majority in the High Court had pointed out (at 268):

"There is a difference between the rejection of a person's evidence and a finding that he or she deliberately lied ... As a matter of logic and common sense, something more than a mere rejection of a person's evidence is necessary before there can be a positive finding that he or she deliberately lied in the giving of that evidence."

20 Senior Counsel for the second and third defendants noted that it has been clearly established that in civil cases involving issues of credibility the Court will only be concerned to reach a conclusion as to whether a witness's evidence was given dishonestly where that is truly necessary for disposing of the case and that otherwise such a finding should not ordinarily be made: Smith v New South Wales Bar Association (supra) per Deane J at 271. The rejection of a person's evidence, therefore, would not commonly be associated with a finding that the person had given evidence dishonestly.

21 It was submitted that only a reader avid for scandal would consider that the words meant the plaintiff's evidence was dishonest. The ordinary, reasonable reader would understand from the article simply that Fleetman contended the Magistrate should not have accepted the plaintiff's version of events. To say that a person's evidence should not be accepted is not, without more, to say that the witness is dishonest. There was nothing in the article to suggest that the plaintiff's evidence should have been rejected because it was dishonest.

22 Counsel for the plaintiff submitted that to suggest a person should not be believed on their oath encompassed or, alternatively, was at least capable of encompassing, the suggestion that the person had been dishonest. It is not necessary that that was the only meaning in which the words were capable of being understood by a reasonable reader; it was sufficient that it was one such meaning.

23 Counsel referred to a passage in the speech of Lord Devlin in Lewis v Daily Telegraph Ltd (supra), where his Lordship said (at 277):

" ... the layman's capacity for implication is much greater than the lawyer's. The lawyer's rule is that the implication must be necessary as well as reasonable. The layman reads in an implication much more freely; and unfortunately, as the law of defamation has to take into account, is especially prone to do so where it is derogatory"

24 Counsel also referred to the speech of Lord Reid in that case, where his Lordship said (at 259):

"Ordinary men and women have different temperaments. Some are unusually suspicious and some are unusually naïve. One must try to envisage people between these two extremes and see what is the most damaging meaning they would put on the words in question."

25 It was submitted that where, as here, the reader is left with a statement that Fleetman believed it had an extremely strong case to challenge Mr Robinson's credibility as a witness, it was arguable that a reasonable reader would understand that to mean that Mr Robinson had given dishonest evidence. It is not to the point that the article is capable of conveying less damaging meanings; the plaintiff is entitled to plead the most damaging meaning that the words are capable of conveying. To say that a person is not to be believed on their oath arguably encompasses an imputation that the person gave dishonest evidence.

26 I do not consider that the imputation pleaded is capable of being conveyed to an ordinary, reasonable reader by the words complained of. It is obvious that the evidence of a witness may not be credible for a number of reasons, quite apart from dishonesty. Findings that the evidence of a witness is not credible are commonly made by Courts without any suggestion that the witness had been dishonest in giving evidence. There is nothing in the article to point to dishonesty as being the reason the plaintiff's evidence should have been rejected in this case and there is therefore no basis upon which a reasonable reader could conclude that the article meant the plaintiff had been dishonest in giving his evidence. In my view, a reader could only conclude that the plaintiff had been dishonest because the statement excited in that reader a belief or prejudice from which they proceeded to arrive at that conclusion: see Mirror Newspapers Ltd v Harrison (supra).

27 I would therefore strike out par 13 of the statement of claim.

28 An application was also made by the first defendant to strike out pars 11 and 17 of the statement of claim on the same basis. That was opposed by the plaintiff, both on substantive grounds and because the application by the first defendant was out of time under O 20 r 19, more than 21 days having elapsed after the statement of claim was served before the application was made.

29 The time limit specified in O 20 r 19 is one to which more than lip service should be paid and any application to strike out a pleading should be filed promptly: Gardiner v Ray [1999] WASC 140 at [33]. But where, although late, the application relates to defects that are material to the future progress of the action, or may prejudice its proper outcome, then it is appropriate to extend the time within which the application is to be made: Crestland Investments Pty Ltd v Parisi Holdings Pty Ltd [2003] WASC 148 at [9].

30 In my view, this is such a case and I would therefore extend the time within which the first defendant was required to bring this application to 27 June 2005, the date on which it was filed. It follows that I would strike out pars 11 and 17 of the amended statement of claim.

31 The second and third defendants also sought to strike out the plea of exemplary damages in par 23 of the amended statement of claim. It is pleaded in par 23 that the plaintiff will rely on the facts and matters pleaded in par 22(a) to (d) in support of his claim for exemplary damages. The pleas in par 22(a) to (d) are as follows:

(a) The second and third defendants failed to make any enquires of the plaintiff as to the first matter complained of and failed to make such enquires in circumstances where:

(i) The plaintiff had at the request of the third defendant agreed to permit a photographer employed by the second defendant to take the plaintiff's photograph for the purposes of publication with a story about the decision.

(ii) At the time the plaintiff's agreement to the taking of the photograph was procured the third defendant did not raise the first matter complained of with the plaintiff

(iii) At all material times the third defendant knew how to contact the plaintiff.

(b) Had the second or third defendant at any time prior to procuring the plaintiff's agreement to the taking of the photograph told the plaintiff that they intended to republish the first matter complained of as part of the story the plaintiff would not have agreed to the taking of his photograph.

(c) Had the second or third defendant at any time prior to publication of the second matter complained of told the plaintiff that they intended to republish the first matter complained of as part of the story the plaintiff would not have agreed to the publication of his photograph.

(d) Had the second or third defendant at any time prior to publication of the second matter complained of raised the first matter complained of with the plaintiff the plaintiff would have informed them as was the fact that the notice of appeal dated 11 October 2004 that the first defendant had caused to be filed did not contain any challenge to the Court's findings about the credibility of the plaintiff."

32 It was submitted on behalf of the second and third defendants that there was nothing in those pleas which was capable of supporting a claim for exemplary damages. Exemplary damages will only be awarded in cases of conscious wrongdoing in contumelious disregard of another's rights, and can only be awarded where the defendant's conduct merits punishment as, for example, where it discloses fraud, malice, violence, cruelty, insolence or the like, or where the defendant otherwise acts in contumelious disregard of the plaintiff's rights: see Gardiner v Ray (supra) at [29]. While the defendant's state of mind need not be malicious before an award of exemplary damages will be justified, it must, at least, "amount to conscious, high handed behaviour" sufficient to fall within the formulation of "a contumelious disregard of the plaintiff's rights": Todd v Swan Television and Radio Broadcasters Pty Ltd [2001] WASC 334 at 139. Mere negligence will not suffice for an award of exemplary damages.

33 Counsel for the plaintiff submitted that, having procured the plaintiff's consent to have his photograph taken for the article and having been told that there was to be an attack on the plaintiff's credibility, the defendants' failure to make enquiries of the plaintiff concerning Ms Quinlivan's statement about the attack on his credibility amounted to a contumelious disregard of the plaintiff's rights. Counsel also submitted that it was relevant the defendants took no steps to obtain a copy of the notice of appeal to verify that the grounds of appeal included an appeal against the findings as to the plaintiff's credibility. Had they done so, they would have ascertained that it contained no such ground. The position was made much worse by the fact that they had procured the plaintiff's consent to have his photograph taken for the article and published the photograph with it. Had they told the plaintiff they intended to include the statement about the challenge to his credibility, the plaintiff would not have agreed to have his photograph taken.

34 Counsel referred to Taylor v Network Ten (Perth) Pty Ltd [1999] WASC 264 at [38] - [39] where Steytler J found that the defendant's failure to make proper inquiries prior to the publication was relevant as probative of recklessness on its part, and where that failure was unjustifiable, improper or lacking in bona fides in circumstances where the report was alleged to be of a sensational nature, it was arguably sufficient to be regarded as in contumelious disregard of the plaintiff's rights and thus sufficient for an award of exemplary damages.

35 The present case, however, is rather different to those circumstances. The second and third defendants were informed by the solicitor for Fleetman of the grounds of appeal that Fleetman would rely upon. In essence, what is put by the plaintiff is that the second and third defendants should not have accepted that, but should have verified it with the plaintiff. I do not accept that. I do not consider it can be described as reckless (or indeed, in normal circumstances even negligent) to rely on a statement by the solicitor for an appellant as to the grounds on which that party intends to appeal. Nor could it be regarded as a contumelious disregard of the plaintiff's rights not to inform the plaintiff that the article would refer to an appeal by Fleetman on the question of the plaintiff's credibility. In that respect it is significant that it is not suggested these defendants omitted to so inform the plaintiff deliberately or with any improper motive, or that they knew that if they had informed the plaintiff of it he would not have agreed to have his photograph taken and published.

36 In my view, the matters pleaded in par 22(a) to (d) are not capable of supporting a claim for exemplary damages and I would accordingly strike out par 23 of the statement of claim.

37 I would therefore strike out pars 11, 13, 17 and 23 of the statement of claim, with leave to the plaintiff to replead. I will hear the parties on costs.