Sarina v Fairfax Digital Australia and New Zealand Pty Ltd

Sarina v Fairfax Digital Australia and New Zealand Pty Ltd - [2015] NSWDC 196 - NSWDC 2015 case summary — Zoe

[7]

Challenges to the form of imputations

The correctness of Hutley JA's statement that "there are no forms of imputations" (Sergi v Australian Broadcasting Commission [1983] 2 NSWLR 669 at 671A) has been affirmed in many recent decisions, including Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135. Principles frequently referred to in imputations arguments include the following: 1. The plaintiff is obliged to identify for the defendant the act or condition which was understood by the ordinary reasonable reader as having been attributed to him or her, to assist the defendant in knowing the case to meet (Harvey v John Fairfax Publications Pty Ltd [2005] NSWCA 255 at [125]). 2. While imputations need not be more precise than the matter complained of (Drummoyne Municipal Council v Australian Broadcasting Corporation at 137A per Gleeson CJ - "X is disgusting"), they must be sufficiently clear so as to avoid the likelihood of confusion in relation to the meaning the plaintiff contends (Fairfax Media Publications Pty Ltd v Alex [2014] NSWCA 273 per McColl JA at [21]; Amalgamated Television v Marsden at 162). Confusion may arise from terms which have a dual meaning such as "breach of trust": Singleton v Ffrench (1986) 5 NSWLR 425 per McHugh JA at 433 and 435. However, the English language contains many words with more than one meaning, and the actual meaning of the word used can generally be understood without difficulty from the context in which it is used. Claims by a publisher that the words he, she or it used are ambiguous and/or devoid of meaning should be viewed with some suspicion, for the reasons explained by Hutley JA in Hepburn v TCN Channel Nine Pty Ltd at 688B. 3. The actual words of the matter complained of may be used where their meaning is clear (Mahommed v Channel Seven Sydney Pty Ltd [2006] NSWCA 213 per McColl JA at [29]; Waller v Nationwide News Pty Ltd [2011] NSWSC 611 per McCallum J at [18]). There are cases where the actual sting of the imputation will not be conveyed merely by repeating the language of the publication (Toben v Milne [2014] NSWCA 200 per Beasley P and Ward JA at [21]). However, courts should be cautious not to "straitjacket" (Greek Herald Pty Ltd v Nikolopoulos & Ors (2001) 54 NSWLR 165 at [18]) a plaintiff into Thesaurus-based alternatives by an opponent who is hopeful of putting to the jury at the trial that the imputation does not refer to the actual words of the matter complained of.

[8]

The matter complained of

The language and layout of the matter complained of do not shrink from making allegations about the plaintiff. The manner of presentation, use of repetition and trenchant language are relevant to the determination of capacity of the imputations.
The text of the matter complained of is as follows: "1 McGurk's confidants have colourful pasts 2 Vanda Carson 3 [photograph of plaintiff and Mr Reddy] 4 Michael McGurk's confidants - Clinton Sarina and Terrence Reddy 5 Michael McGurk's two closest confidants, who were last week named as part of an investigation into an alleged $150 million mortgage fraud, have colourful histories of their own. 6 Terrence Reddy and mortgage broker Clinton Sarina each have alleged connections to criminal groups police believe may be responsible for the massive bank frauds. 7 Mr Reddy is believed to be on the run because he allegedly owes $150,000 to a group of Lebanese gangsters from Bankstown, sources in the finance industry say. 8 The loan was arranged last year by Mr Sarina, his friend, and has blown out to three times its original size after high interest penalty charges have been added. 9 It is not the only money Mr Reddy is alleged to owe. 10 Mr Reddy, a renowned party-boy who has been dubbed "The Black Prince" for his lavish lifestyle, cannot return to any of Justin Hemmes's bars because he has a large outstanding bar tab, sources say. 11 He also owes money to several private Sydney lenders including Tommy Wayne Powers. 12 He also owes money that is the subject of legal proceedings. 13 Mr Reddy gave evidence to a court last month that he was afraid of a man called Alex Marcello, believed to be a member of the Hells Angels from South Australia. 14 Mr Reddy and Mr Sarina worked for Mr McGurk's company Bentley Smythe. They met him just hours before he was executed, allegedly by two hitmen, in September last year. 15 Mr Reddy recently had his dark green convertible Mercedes repossessed by car dealer Martin Cass at Alex Holland in Rushcutters Bay. 16 It was not the first time he has had a car repossessed, having lost a BMW in 2005 and several other cars since then. 17 "He's got people looking for him everywhere, he's not going home, he's not doing the usual things, he is definitely looking over his shoulder," one source said. 18 Mr Reddy told the NSW Supreme Court last month he was associated with the head of the Sydney chapter of the Hells Angels, Felix Lyle. 19 Mr Reddy has admitted he was involved in a scam to rip off $437,000 from Perpetual Trustees Victoria in 2005 after a lender's signature was forged. He blamed Mr Lyle for stealing the money. 20 He has not been charged with any offences, but admitted to the crimes during hearings. 21 Meanwhile, Mr Sarina was at one stage charged with kidnapping one of his clients, small-time criminal Tim Xenos, who failed to repay a loan of $180,000, which had come with a hefty 25 per cent interest. 22 Mr Sarina was accused of taking Mr Xenos to the ritzy Quay West apartments overlooking Circular Quay in 2002. 23 Grabbing a pair of scissors, Mr Sarina's alleged associate Richard Lawandos screamed: "I'll cut your kids' toes in front of you. I'll kill your kids, kill your mother, I dont care." 24 After allegedly threatening him with death by a drug overdose, or by pushing him over the rails of the high-rise tower unless he paid the money, Mr Sarina was then accused of handing Mr Xenos the hotel bill. The matter was eventually no-billed by the NSW Attorney-General and the charges against Mr Sarina dropped. 25 Mr Sarina continues to lend money although he is not an accredited broker with the Australian Securities and Investments Commission. 26 Both men are alleged to have boasted of connections to criminals in order to protect themselves from possible retribution over loans. 27 Several sources say they have exaggerated their connections, and on many occasions their "protection" has failed to materialise. 28 Mr Sarina did not return calls to his home and his Double Bay lawyer, Robert Shacklady. 29 Mr Reddy was unable to be contacted as his mobile phone has been seized by the NSW Supreme Court. 30 vanda.carson@smh.com.au"

[9]

The imputations

The imputations pleaded were substantially amended in correspondence. Further applications to amend were made at the hearing, which led to the proceedings being conducted with a degree of informality. The imputations pleaded at paragraph 4 of the statement of claim (namely, imputations (a) to (k)) are set out below, with appropriate notes of the changes.
Some of those changes were set out in the plaintiff's letter of 14 March 2015, in response to the defendants' objections dated 27 February 2015, where the plaintiff sought to amend imputations (b), (c), (e) and (g). In addition, the plaintiff sought to add imputations (l) to (t) at the commencement of the argument.
These imputations, and their amendments, are currently as follows: 1. The plaintiff was named as part of an investigation into an alleged $150 million mortgage fraud (paragraphs 1, 3, 4 and 5). 2. The plaintiff has alleged connections to criminal groups police believe may be responsible for massive bank frauds (paragraph 6) - In correspondence, the plaintiff amended this imputation to read "The police reasonably suspect the plaintiff of being connected with criminal groups that the police believe may be responsible for massive bank frauds." 3. The plaintiff arranged a loan for his friend Terrence Reddy which has blown out to three times its original size because of high interest penalty charges (paragraphs 7 and 8) - In correspondence, the plaintiff amended this imputation to read "Whilst the plaintiff was not an accredited broker with the Australian Securities and Investments Commission, he arranged a loan for his friend Terrence Reddy which, because of high interest penalty charges, has blown out to 3 times its original size". 4. The plaintiff was charged with kidnapping one of his clients (paragraph 21). 5. The plaintiff kidnapped Tim Xenos who failed to repay a loan of $180,000 which had come with a hefty 25% interest (paragraph 21) - In correspondence, the plaintiff amended this imputation to plead two imputations, which are pleaded in the alternative, namely: (e)(i) "The plaintiff kidnapped Tim Xenos"; and (e)(ii) "The plaintiff was reasonably suspected by police of having kidnapped Tim Xenos". 6. The plaintiff lent money at exorbitant rates of interest and exorbitant penalty charges (paragraphs 7, 8 and 21). 7. The plaintiff threatened Tim Xenos with death by drug overdose or by pushing him over the rails of a high rise tower (paragraph 24) - In correspondence, the plaintiff amended this imputation to plead two imputations: (g)(i) "The plaintiff threatened Tim Xenos with death by drug overdose"; and (g)(ii) "The plaintiff threatened Tim Xenos with death by pushing him over the rails of a high-rise tower". 8. The plaintiff boasted of connections to criminals in order to protect himself from possible retribution over loans (paragraph 26). 9. The plaintiff engages in criminal activities (whole article). 10. The plaintiff is dishonest (whole article). 11. The plaintiff is an usurer (whole article). 12. The plaintiff is a violent person (whole article). 13. The plaintiff continues to arrange loans even though he is not accredited by the Australian Securities and Investment Commission (paragraph 25). 14. The plaintiff arranged a loan for Tim Xenos which came with a hefty 25% interest rate (paragraph 21). 15. The plaintiff, in association with Richard Lawandos, threatened to chop the toes off of the children of Mr Xenos (paragraph 23). 16. The plaintiff, in association with Richard Lawandos, threatened to kill Mr Xenos's [sic] children (paragraph 23). 17. The plaintiff, in association with Richard Lawandos, threatened to kill Mr Xenos's [sic] mother (paragraph 23). 18. The plaintiff condoned the threatened violence of Richard Lawandos (paragraphs 1, 23, 24 and 26). 19. The plaintiff is a standover man (paragraphs 1, 4, 5, 6, 23, 24 and 26). 20. The plaintiff is a close criminal associate of notorious standover man, Michael McGurk (the whole article).
I shall now set out the basis for my ruling in relation to each of the imputations.

[11]

Imputation 4(b)

The defendants object to use of the words "connections to" (used without comment in Aldridge v John Fairfax & Sons Ltd (Supreme Court of New South Wales, Hunt J, 17 September 1985)) and "may be" (rejected in Christiansen v Fairfax Media Publications Pty Ltd [2012] NSWSC 1258).
The vice of the imputation is not so much the use of these actual words (both of these occurred in the matter complained of), but that the matter complained of does in fact give very clear specificity to the nature of the connection between the plaintiff and the criminal groups and, for that matter, his role in relation to the "massive bank frauds". The key to the capacity of this imputation is the repeated links between the references to the plaintiff and Mr Reddy as Mr McGurk's "confidants" in the headline, the photograph caption and paragraph 5. This leads into paragraph 6 where "the massive bank frauds" is clearly a reference to the "alleged $150 million mortgage fraud" in paragraph 5. The matter complained of goes on to identify the plaintiff not only as a person working for the late Mr McGurk but as a person who arranged the following loans: 1. the loan to his friend Mr Reddy of $150,000 (at paragraph 7); 2. the loan to Mr Xenos of $180,000 (at paragraph 21); and 3. other loans identified at paragraph 25 as being made in circumstances where he is not an accredited broker with the Australian Securities and Investment Commission.
These references make clear, principally by reference to what is stated to be "the" massive bank frauds in paragraph 6, that the "massive" bank frauds are the $150 million mortgage fraud referred to in paragraph 5.
The matter complained of does not suggest, even to a reader at the bottom of the "ordinary reasonable reader" scale of carelessness, that the plaintiff is involved in two frauds. The matter complained of identifies one very big fraud, namely the massive $150 million mortgage fraud for which "criminal groups" are believed by police to be responsible, and not two separate transactions.
Imputation 4(b), both in its original and in its redrafted form, seeks to isolate a second and separate fraud, using the language of the matter complained of to encapsulate the sting. However, I am satisfied that the clear meaning of these paragraphs identifies the plaintiff's connection with this transaction as the mortgage broker who organised the loan that is the massive fraud, namely the $150 million mortgage fraud, and not a separate transaction. This imputation is struck out, but with leave to replead in the event that it can capture the aspect of the one massive fraud that Mr Rasmussen is seeking.
A second objection made by the defendants is, however, of less merit. This is the submission that there is no reference in the matter complained of attributing the reasonable suspicion to the police as to the plaintiff's involvement. Mrs Barnett submits that the police suspicion relates to the involvement of a criminal group and the fact that a massive fraud has been perpetrated, not to the plaintiff's involvement. She submits that there is no evidence that the investigation in question is carried out by the police as opposed to some other body.
I do not accept this submission. The plaintiff is identified as the person who is named in an investigation for his role in a fraud under investigation where the police suspect criminal groups are involved. This allegation occurs as one of a series of matters involving the plaintiff and his fellow confidant in police investigations. Applying the test set out by the Court of Appeal in Corby v Allen & Unwin Pty Ltd of generosity rather than parsimony, I am satisfied that an imputation that the plaintiff is reasonably suspected by police is conveyed, and should be included in the repleaded imputation.

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Cases Cited (19)

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