Ultrasonic Slimming Pty Ltd v Fairfax Media Publications Pty Ltd

Supreme Court of NSW|2013-07-01|Before: Rothman J

Judgment 1The Court has been asked to publish reasons summarising the reasons given, during the hearing, for ex tempore orders that were issued on 1 July 2013. The substantive proceedings relate to an allegation of defamation arising from two related articles published by the defendant, Fairfax Media Publications Pty Limited, in the Sydney Morning Herald on Wednesday 6 March 2013. The orders issued by the Court on 1 July 2013 dealt with a skirmish between the parties relating to the terms of the imputations pleaded. 2The parties are to be congratulated in that many of the initial issues between them were resolved before the hearing and many others were resolved during the hearing, sometimes after discussions with the Court.

Remaining issues 3The issues concerned the imputations pleaded in the Amended Statement of Claim, filed 23 April 2013. The parties agreed, after some correspondence, on some further alterations and the Plaintiffs' suggested alterations were then the subject of a more confined (or different) set of objections. 4It is necessary to understand that the First Plaintiff operates a slimming clinic, one of the major aspects of which is Botox treatment. The Second Plaintiff is said to be "the owner, director and controller" of the first Plaintiff and/or its slimming clinics. The Third Plaintiff is a clinician in the aforesaid clinics, 5The allegations still in issue, following the correspondence and further iterations, are in the following terms: (b) The First Plaintiff engaged in practices dangerous to their clients. (c) (i) The First Plaintiff provides substandard treatment to clients thereby endangering their health. (c) (ii) The First Plaintiff provides inferior substances to clients thereby endangering their health. (f) (i) The First Plaintiff (by its employees, servants and agents) carried out dangerous cosmetic treatments in risky environments. (f) (ii) The Cosmetic Surgery provided to patients by the First Plaintiff was extremely dangerous and exposed those patients to the risk of death. (h) (i)The First Plaintiff (by its employees, servants and agents) provides incompetent cosmetic surgery. (i) (i)The Second Plaintiff wrongly permitted clients, at her Ultrasonic clinics, to be injected with imported cheap and unapproved versions of the anti-wrinkle drug Botox causing them to suffer harm. (j) (i) The Second Plaintiff wrongly permitted her Ultrasonic clinics to engage in dangerous practices. (k) (i) The Second Plaintiff wrongly permits her Ultrasonic clinics to provide substandard treatment to clients thereby endangering their health. (k) (ii) The Second Plaintiff wrongly permitted her Ultrasonic clinics to provide inferior substances to clients thereby endangering their health. (l) (i)The Second Plaintiff wrongly permitted staff at her Ultrasonic clinics to deceive Ms Driver into believing she was being injected with Botox for her wrinkles when she was actually being injected with a cheap unapproved substance thereby exposing her to serious harm. (l)(ii) The Second Plaintiff permitted clients at her Ultrasonic clinics to be injected with a cheap unapproved substance which had the potential to expose thousands of Australians to serious harm. (m) (i) The Second Plaintiff wrongly permitted clients at her Ultrasonic clinics to be injected with cheap unapproved versions of the anti-wrinkle drug Botox causing a complaint to be made by the Australasian College of Cosmetic Surgery and an investigation by Australia's Drug Regulator into her clinic. (n) (i) The Second Plaintiff wrongly permitted her Ultrasonic clinics to carry out dangerous cosmetic treatments in risky environments. (n) (ii) The Cosmetic Surgery provided to patients by the Second Plaintiff's Ultrasonic clinics was extremely dangerous and exposed those patients to the risk of death. (p) (i) The Second Plaintiffs management of her Ultrasonic Clinics is incompetent. (q) The Third Plaintiff is incompetent. 6Essentially, the objections fall into different general categories, some of which may apply to more than one impugned paragraph/imputation. The categories may be summarised in the following way: repetitious imputations not substantively different to others; the use of the term "wrongly"; imputations that do not arise; the role of the Second Plaintiff and whether imputations arise as a consequence; and whether certain imputations arise in relation to the Third Plaintiff.

Imputations in relation to the Third Plaintiff 7The only remaining disputed imputation in relation to the Third Plaintiff is paragraph (q), recited above, which alleges the articles impute that the Third Plaintiff is incompetent. The Defendant submits that the articles do not give rise to the imputation. 8The Court is not required to determine finally whether the imputation arises: only whether it arguably arises. The Third Plaintiff raised paragraphs 1, 3, 6-10, 12, 14-17, 19, 22, 24- 26, 28, and 29-35 of the articles to support the imputation. 9In essence, the Third Plaintiff is named in the article and a photograph of him forms part of the publication. One of the articles is headed "Investigation of Cheap Botox 'sausage factory' ". It, at least arguably, alleges that the official drug regulator is investigating the importation and use of "cheap, unapproved versions of ... Botox" by the Third Plaintiff. 10Unremarkably, the issue turns on whether a doctor who is knowingly or unknowingly injecting sub-standard material into patients is incompetent. The Defendant submits that "incompetent" suggests a lack of ability, rather than wrongfulness. It is at least arguable that the term "incompetence" refers primarily to a lack of ability and the article does not impute to the Third Plaintiff any such "inability". 11If the Botox were in fact substandard and if the Third Plaintiff were unaware of its substandard quality (and should have been aware), then the imputation arguably suggests incompetence. That is, the publication is suggesting, arguably, that the Third Plaintiff ought to know, but does (or did) not know that he was injecting substandard material. 12On the other hand, if the Third Plaintiff were to have known that the Botox was substandard, he would have, at least arguably from the gist of the articles, knowingly injected substandard material. 13In my view, while the latter circumstance may not as comfortably sit within the definitions of "incompetent", it arguably does fit that description. Such conduct would, on the allegations made, amount to negligence by the doctor, i.e. a breach of the duty of care causing damage, and may amount to an allegation that the doctor acted inappropriately or with insufficient care. The Oxford Dictionary defines "incompetent" to include "insufficient; inadequate" or "of inadequate ability or fitness" amongst other meanings. 14I have some doubt whether the articles impute "incompetence" or that the Third Plaintiff is "incompetent", but I accept that it may be arguable and I am not prepared to strike out the imputation at this interlocutory stage. It is for that reason that I refused to strike out imputation (q).

The role of the Second Plaintiff 15A significant aspect of the objections taken to the pleaded imputations is the manner in which the Second Plaintiff says imputations arise against her from the impugned articles. 16The Second Plaintiff, unlike the Third Plaintiff , is not named in the articles. As earlier stated she is described in the Amended Statement of Claim, as "the owner, director and controller" of the First Plaintiff. 17 The terms of the pleading, at least implicitly, assert that there is no other person who owns, directs (or is a director of) or controls the First Plaintiff. The pleading also asserts that the article was read by four persons who identified the Second Plaintiff from the article as the person who is the owner, director and controller of the First Plaintiff. 18The test, where a publication does not expressly name a plaintiff, is whether persons acquainted with the plaintiff would be reasonably led to believe that it was the plaintiff to whom reference was being made: David Syme v Canavan [1918] HCA 50; (1918) 25 CLR 234. It does not seem that the Defendants take issue with the identification per se. 19However, the Defendants submit that nothing in the article suggests that the Second Plaintiff did anything (or did not do anything). A corporation has "neither a soul to be dammed nor a body to be kicked", to paraphrase Edward Thurlow (1st Baron Thurlow), Lord Chancellor 1778 to 1783. As a matter of law, a corporation must act through its servants or agents and is controlled and supervised by its directors. If, as is asserted, the Second Plaintiff were the sole director, and if she were reasonably identified as such by persons acquainted with her who read the articles, then it is arguable that in permitting (or not adequately preventing) the First Plaintiff conducting itself in the manner that the articles suggest, the articles are impugning or damaging her character and reputation. None of the forgoing should be taken as an indication that, if the issue were to be determined finally by me, the articles are defamatory of the Second Plaintiff; only that it is sufficiently arguable that the imputations should not, on that basis alone, be struck out. 20The Defendants raise two other issues in relation to the imputations alleged to arise against the Second Plaintiff: first, the use of the word "wrongly" to describe the allegations; second, the use of the word "incompetent". I will deal with the "wrongly" issue later in these reasons. 21The use of the word "incompetent" as an allegation is challenged by the Defendant. It is used in imputation (p)(i): see above. It relates to the management of the Clinics. It is unclear from the pleadings what is said to be incompetent. The Amended Statement of Claim alleges the imputation, but does not particularise the alleged incompetence that the Second Plaintiff says is imputed by the article. 22The context of this imputation discloses that it is pleaded, in some respects, as an alternative to the other imputations. Either, it is said, the Second Plaintiff's management of the First Plaintiff exposed persons to unacceptable risks by permitting the conduct alleged, or, as is pleaded in imputation (p)(i), the Second Plaintiff did not know what was happening and her management of the Clinics was incompetent. 23I take the view that the imputation, in that context, arguably arises, but the Plaintiffs need to particularise the incompetence they say (or the Second Plaintiff says) arises. I so ordered.

The use of the word "wrongly" 24Leaving aside for present purposes whether the term intended to be used was "wrongly" or "wrongfully", the term is or should be generally impermissible. Either it adds nothing to the imputation or it insufficiently specifies the complaint. 25In Ma Ching Kwan v John Fairfax Publications Pty Ltd [1998] NSWSC 321, the Court (Handley JA, with whom Mason P and Meagher JA agreed) said: The term "wrongful" is inherently ambiguous. The imputation does not indicate why the purpose referred to was wrongful and the possibilities range from breach of the law, criminal or civil, to breach of some moral or ethical standard. 26The Court of Appeal, in the foregoing passage, referred to Amalgamated Television Services v Marsden [1998] NSWSC 4; (1998) 43 NSWLR 158 at 161-3; Drummoyne MC v ABC (1990) 21 NSWLR 135; and Morris v Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260 at 271. In those judgments, similar comments were made about the use of the words "corrupt" and "improper". 27Even where the imputations utilise the word "wrongly" or "wrongfully" and particularise the nature of the "wrongfulness", then the term "wrongly" or "wrongfully" will not add anything to the pleaded imputations. It is unnecessary for me to state any general rule. There may be circumstances, which do not currently come to mind, where the word is neither ambiguous nor superfluous. It is sufficient, for present purposes, to determine that in each imputation pleaded that utilises the word "wrongly", the imputation is thereby ambiguous or insufficiently particularised either because it does not define sufficiently the alleged wrongfulness or adds a layer of ambiguity to an otherwise sufficiently pleaded imputation.

Repetitious imputations 28Penultimately, I take the view that imputations (b) and (j)(i) do not raise imputations substantially dissimilar from imputations otherwise pleaded. This proposition was conceded by the Plaintiffs. I disallow those paragraphs accordingly.

Imputations as to "surgery" 29Lastly, I deal with those imputations that refer to the character of the Plaintiffs insofar as each would be involved in certain "surgery". This relates particularly to imputations (f)(ii) and (h)(i), recited above. 30The context for these imputations is, among other factors, the combination of an investigation or complaint by a body associated with the regulation of cosmetic surgery, the Clinics' treatment with Botox injections and the use of the investigation of the First Plaintiff, its alleged use of substandard material and more general comments concerning incompetent or deliberately substandard surgery. 31The Defendants submit that Botox treatment is effected by injection and is not "surgery". Therefore, imputations (f)(ii) and (h)(i) cannot arise. On 1 July 2013, I disallowed imputation (h)(i) on this basis, but allowed imputation (f)(ii) and invited the Plaintiffs (particularly the First Plaintiff) to reconsider the wording of this imputation. 32The rationale for differentiating the two imputations depends on the different context for each imputation. I should note that there is no evidence that Botox treatment is not surgery, but, for the purpose of this interlocutory proceeding, I have assumed it is not. 33Nowhere in the article does it state (expressly or otherwise) that the First Plaintiff does not engage in other cosmetic surgery. And the article uses the alleged conduct of the First Plaintiff to justify comment on substandard surgical procedure and the need for investigation and elimination of such. 34At least implicitly, arising from the name of the complainant body (Australian College of Cosmetic Surgery) and the other matters to which I have referred, it is arguable that any cosmetic surgery performed by the First Plaintiff would be performed in circumstances that were extremely dangerous and exposed patients to the risk of death. As a consequence, I have not struck out imputation (f)(ii). Yet, its arguability is weak given that there is no mention, otherwise in the publication, of any procedure other than Botox injections. It is for that latter reason that I invited the Plaintiff, when settling its proposed Further Amended Statement of Claim to consider the use of the term "Cosmetic Surgery" in imputation (f)(ii). 35Nevertheless, imputation (h)(i) uses "cosmetic surgery" in a slightly different context. No part of the publication imputes that the First Plaintiff provides "cosmetic surgery" (unless Botox injections are contained within that term: see [32] above). Therefore, imputation (h)(i) either does not arise or does not raise any imputation materially different from the other detailed imputations.

Conclusion 36For the foregoing reasons each of which was announced or discussed at the time, orders as to the imputations issued on 1 July 2013 in the following terms: (a)Imputations (b), (h)(i) [on the basis of the use of the word "surgery" only], (j)(i) and (n)(ii) contained in paragraph 6 of the Amended Statement of Claim (as amended in correspondence and discussion between the parties) be struck out; (b)Imputations (c)(i), (c)(ii), (f)(i), (i)(i), (m), (n)(i), (n)(ii) be allowed; (c)The Plaintiffs shall particularise the alleged "incompetence" said to arise and pleaded in imputation (q); (d)The word "wrongly" where used in the imputations is struck out.

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: 08 January 2014

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