SMEC HOLDINGS LIMITED & ORS v BONIFACE

PETER BUSBRIDGE (Second plaintiff)

GEOFF PERCIVAL (Fourth plaintiff)

GLEN BONIFACE (Defendant) FILE NUMBER(S) : SC 21012 OF 2001 M Neil QC / D Caspersonn (Plaintiffs) COUNSEL : C Evatt / M Rolinson (Defendant) Baker & McKenzie (Plaintiffs) SOLICITORS : S Moran & Co (Defendant)

[2003] NSWSC 555 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST

SMEC HOLDINGS LIMITED (ABN 84 057 274 049) (First plaintiff)

JUDGMENT (Imputations - corporation - capacity - difference in substance) 1 Four plaintiffs sue the defendant in relation to nine publications. 2 The first to the eighth publications are emails. The ninth matter complained of is constituted by a letter and a memorandum. Various plaintiffs allege causes of action relevantly to each matter complained of. 3 Pursuant to SCR Pt 67 r 12A(1) the defendant gave notice of objection in effect to almost all of the total of approximately eighty-nine imputations pleaded in relation to the respective plaintiffs in relation to the respective matters complained of. The issue of law relating to capacity was to be determined by consent pursuant to SCR Pt 31 r 2. 4 The range of objections is concerned with capacity, form, similarity in substance and capacity to be defamatory. 5 The plaintiffs delivered an outline of submissions under the above rule incorporating accepted matters of general principle and joining issue with the specific objections taken by the defendant. I have had the benefit of detailed oral submissions from counsel for each side. 6 It seems to me as a matter of sheer practicality that the best course for me to adopt is for me to go through the imputations and indicate my conclusions in relation to the arguments and a brief statement of reasons. It is to be noted that the imputations with which I am dealing are those appended to the matters complained of as provided for the purposes of argument. It is further to be noted that for the purposes of the disposition of the defendant's application I have taken it that at present there is no issue as to identification.

First matter complained of 7 Imputations 2(a), (b) and (c) relate to the second plaintiff. As to (a), I am persuaded that the matter complained of is capable of carrying this meaning. It flows at least from the words "an email from Peter to Ross". As to (b), this is a "minds might differ" imputation and it shall go to the jury. I am not persuaded that the word "devious" prevents a finding, as a matter of law, that the imputation is capable of arising. As to (c), I am of the view that this clearly is capable of being carried by the matter complained of given the language used in it and in the emails. 8 Accordingly, in relation to imputations 2(a), (b) and (c) I find each to be capable of being carried by the matter complained of, each to be capable of being defamatory and as to (c) that there is no impropriety, in my view, as to form. 9 As to imputations 3(a), (b) and (c), these relate to the third plaintiff. For the reasons in relation to the second plaintiff imputations 3(a), (b) and (c) will go to the jury.

The second matter complained of 10 Imputations 5(a), (b) and (c) are of the first plaintiff, the corporation. 11 As to imputation 5(a), I hold that this is incapable of being defamatory of the plaintiff corporation. It is a bare statement of a financial position of the plaintiff which indicates nothing as to its corporate conduct of a disparaging nature. The corporate "condition", in my view so barely formulated, is not capable of defaming the company. Further, adverting to context (Greek Herald v Nikolopoulos (2002) 54 NSWLR 165), it is tolerably clear that the cash-flow crisis arises not from the conduct of the corporation, but from the conduct of others (that is, for the purposes of imputation 5(a)). Accordingly, I hold that imputation 5(a) is incapable of being defamatory of the plaintiff. 12 As to imputation 5(b), this also is incapable of being defamatory of the corporate plaintiff in its terms or by reference to the context of the email giving rise to it. It is the illegal transfer of project payments by others that have brought about the unfortunate situation in which the plaintiff corporation finds itself. There is nothing more than that and this imputation is incapable of being defamatory. 13 As to imputation 5(c), this also is flawed in attributing nothing to the plaintiff corporation in terms of its conduct in relation to the illegal transfers of money. Context, whilst a little blurred, makes it tolerably clear in my view that it is those transfers rather than the plaintiff which should be investigated by ASIC. I hold this imputation to be incapable of defaming the plaintiff. 14 As to imputation 6(a), (b), (c) and (d), these relate to the second plaintiff. The objections taken by the defendant are, with respect, untenable. Each of the imputations, in my view, is proper in form, capable of being carried and clearly, by their respective wordings, different in substance. Each of these imputations will go to the jury. 15 Imputation 7(a), (b) and (c) relate to the third plaintiff. The defendant's position in relation to these is untenable. Imputations 7(a), (b) and (c) differ in substance, are capable of being carried and capable of being defamatory and will go to the jury. 16 Imputations 8(a), (b) and (c) relate to the fourth plaintiff. The defendant's position in relation to these imputations is the same: they do differ in substance, each is capable of being carried and is capable of being defamatory and will go to the jury.

The third matter complained of 17 The objection taken to the imputations in relation to this publication is that they do not differ in substance. I find imputations 10(a), (b) and (c), which are of the second plaintiff, to differ in substance. This can be determined in each case by reference to the wording of the imputations and by further reference, if indeed necessary at all, to the matter complained of. Imputations 10 (a), (b) and (c) I find to be capable of being carried by the matter complained of, capable of being defamatory, different in substance and they will go to the jury. 18 Imputations 11(a), (b) and (c) relate to the third plaintiff. I make the same orders and for the same reasons in relation to these imputations. 19 Imputations 12(a), (b) and (c) relate to the fourth plaintiff. I make the same orders and for the same reasons in relation to these imputations.

The fourth matter complained of 20 Imputations 14 (a), (b) and (c) concern the corporation. These imputations just "scrape" home. Whilst I am of the view that they clearly differ in substance, it is sufficiently arguable for the jury to determine whether the matter complained of gives rise to them. Otherwise the defamatory nature of these meanings falls within the broad statements of principle set out in paragraph 2.21 of the 9th edition of Gatley. Accordingly, imputations 14(a), (b) and (c) will go to the jury. 21 No issue being raised in relation to the imputations pleaded in paragraph 15, imputations 15 (a) - (e) inclusive, of the second plaintiff will go to the jury.

The fifth matter complained of 22 Imputations 17(a), (b) and (c) are pleaded as being carried of the first plaintiff. 23 As in the case of the fourth matter complained of, I am persuaded that imputations 17(a), (b) and (c) should go to the jury. I am persuaded that there is a difference in substance between 17(b) and (c). 24 In relation to imputations 18(a) - (g) of the second plaintiff, I am satisfied that imputations (a) and (b) do not differ in substance when considered in the light of the matter complained of. It would be a strained and forced meaning to seek to support imputation 18(a) by reference to the last paragraph of the matter complained of. 25 The second plaintiff is to elect as to between 18(a) and (b). 26 In respect of the balance of the imputations I find each capable of being carried, capable of being defamatory, differing in substance and each will go to the jury. 27 In relation to the imputations pleaded in paragraphs 19(a) - (e), for the reasons stated above the third plaintiff is to elect between 19(a) and (b). The remaining imputations, for the reasons stated in the preceding paragraph, will go to the jury.

The sixth matter complained of 28 The sixth matter complained of is an email sent twice with presently immaterial differences in text. 29 Imputations 21(a), (b) and (c) concern the first plaintiff. I find in relation to each that an act or condition is attributed to the plaintiff company. I find in relation to 21(a) and (b) that each is capable of being held to be defamatory in accordance with general principles adverted to above. 30 As was the case in relation to the fourth matter complained of and the fifth matter complained of, I consider it appropriate that each of the imputations of the first plaintiff go to the jury. 31 In relation to the imputations pleaded of the second plaintiff in paragraph 22(a) - (g), imputations 22(b) and (c) differ in substance: the lies are about different subject matters and the sting involves both lying and the particular subject matter. 32 Insofar as it was contended that imputations 22(e) and (f) do not differ in substance, I cannot see how that proposition can be made out. The sting, of 22(f) is clearly available from the question asked in the matter complained of. 33 The other imputations not being challenged, imputations 22(a) - (g) I find to be capable of arising, capable of being defamatory, proper in form and, where appropriate, to differ in substance and each shall go to the jury. 34 No objection is taken to the imputations pleaded of the third plaintiff in paragraph 23 and accordingly imputations 23(a), (b) and (c) will go to the jury.

The seventh matter complained of 35 This publication is said to carry imputations 25(a), (b) and (c) of the second plaintiff. 36 The real issue in relation to these imputations is as to whether (a) and (b) differ in substance. In my view they do not. The second component of imputation 25(b) is really a flourish, although I note, and it has to be acknowledged, the words are in the matter complained of. Fundamentally, the disparagement of the plaintiff encapsulated in each imputation is the same. The second plaintiff is to elect between imputations (a) and (b). 37 Imputation 25(c) will go to the jury.

The eighth matter complained of 38 Imputations 27(a) - (d) are of the first plaintiff and no objection was taken to them. They shall go to the jury. 39 Imputations 28(a) - (d) are of the second plaintiff and objection is taken to (c) and (d) on the basis that each is bad in form in that each uses the word "involved" and in any event is not capable of being defamatory. The last aspect I would hold in favour of the plaintiff. Any "involvement" in bribery or in "covering up bribery" could only be, for the purposes of a capacity argument, capable of disparaging the relevant plaintiff in the relevant way. I reject the submission for the defendant that "involved" is "too vague". A firmly founded view based in common sense and reasonableness must be taken of these pleaded imputations standing by themselves and vis-à-vis the nature of the publication giving rise to them. This view is, in my respectful opinion, available in this case notwithstanding the observations of Hunt J in Armitage v Double Bay Newspapers Pty Ltd (NSWSC, unreported, 26 September 1991). 40 Imputations 28(a) - (d) will go to the jury. 41 Imputations 29(a) - (d) are of the third plaintiff. I reject the arguments in relation to use of the word "involved" as impugning the imputations as a matter of form. The submissions as to the imputations otherwise not being capable of being defamatory are in my view hardly sustainable. Imputations 29(a) - (d) will go to the jury. 42 Imputations 30(a) - (d) are of the fourth plaintiff and for the reasons I have given in relation to the third plaintiff's imputations, these imputations will go to the jury.

The ninth matter complained of 43 The ninth matter complained of appears to be a letter to which is attached a memorandum to staff and shareholders of SMEC concerning the resignation of the Chairman. 44 Arising from the two documents constituting the ninth matter complained of are imputations 32(a) - (g) of the first plaintiff, the corporation. 45 It is submitted that imputations 32(a), (b) and (c) do not differ in substance. A common component of each of those imputations is the participation of the plaintiff company in "bribing". The difference in substance (bearing in mind, for example, what the defendant may have to prove if it chooses to justify) relates to the beneficiary of the bribe and the object of the bribe. Imputation (b) refers discretely to a consequence of bribing as does (c) but in terms of a different consequence. 46 As to imputations 32(e), (f) and (g), it is contended that these are incapable of defaming the plaintiff corporation. In relation to these imputations for the reasons I have given in respect of other publications of the plaintiff corporation and by reason of the matters of general principle to which I have referred I hold the imputations capable of being defamatory. 47 All of imputations 32(a) - (g) will go to the jury. 48 The defendant has predominantly failed in this application. 49 I grant the plaintiffs leave to file an amended statement of claim only in accordance with these reasons. Otherwise, the plaintiffs have not been granted leave to plead fresh matters. 50 The defendant is to pay the plaintiff's costs. 51 The matter is placed in the Registrar's Defamation Directions List on 11 July 2003.

Last Modified: 06/26/2003 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.