BETWEEN : VINON HOLDINGS PTY LTD (ACN 090 137 849)

Defamation - Application to strike out - Issues concerning identification and the form of the pleaded imputations - Turns on own facts

Barclay v Cox [1968] VicRp 87; [1968] VR 664

Emerson v Walker & Ors [1999] WASC 265

Gardiner v Ray [1999] WASC 140

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

Lewis v Daily Telegraph Ltd [1964] AC 234

Loughans v Odhams Press Ltd [1963] 1 QB 299

Mickelberg v 6PR Southern Cross Radio Pty Ltd [2001] WASC 33

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

World Hosts Pty Ltd v Mirror Newspapers Ltd [1978] 1 NSWLR 189

1 HASLUCK J: This is an application pursuant to O 20 r 19(1)(a) of the Rules of the Supreme Court to strike out certain paragraphs of the statement of claim on the grounds that they fail to disclose a reasonable cause of action and/or will prejudice, embarrass or delay the fair trial of the action.

2 It appears from the statement of claim that the first plaintiff is a corporation which carries on business of providing security and crowd control services under the name and style of "New Age Security". The second plaintiff is and was at all material times the sole director of the first plaintiff.

3 In the edition of The West Australian of Monday, 23 April 2001 the defendants published two articles which allegedly suggested that a security company named in the article as "New Age Security" has "links" to a bikie gang known as the Coffin Cheaters.

4 The articles contained a passage to the effect that Northbridge business owners "are aware of the connection between New Age Security and the bikie underworld but feel too intimidated to speak publicly."

5 The articles said that the second plaintiff, Robert Zanon, was the managing director of New Age Security, and that he had an association with a leading figure in the Coffin Cheater bikie gang.

6 The articles also contained a passage to the effect that investigators who probed official company documents lodged with the Australian Securities & Investments Commission found no evidence of an association between the security company and the leading figure in the bikie gang.

7 The defendants raised various objections to those parts of the statement of claim concerning identification of the first plaintiff, the imputations that were said to be found within the words complained of, and matters bearing upon a claim for exemplary damages.

8 I digress briefly to note that at the hearing of the application, the plaintiffs were granted leave to make some comparatively minor textual amendments to those parts of the statement of claim concerning exemplary damages. These amendments clarified the allegation in that regard and as a consequence counsel for the defendants did not press her objection to the plea concerning exemplary damages. Accordingly, I will say no more about that aspect of the matter.

9 Before turning to the remaining objections, it will be useful to look briefly at some relevant principles of law.

10 An imputation will be defamatory if it tends to lower the plaintiff in the estimation of right-thinking members of the community. The first question to be addressed on a striking-out application will often be whether the pleaded imputations can be said to arise from the words complained of. If so, the next question will be whether the words complained of are capable of conveying a meaning defamatory of the plaintiff.

11 Imputations will be struck out at this stage of the proceedings if they are untenable or manifestly groundless: Taylor v Jecks (1993) 10 WAR 309 at 319.

12 An imputation must express the precise act or condition asserted of or attributed to the plaintiff or with which the plaintiff is charged. An imputation should represent the final distillation of the alleged defamatory meaning. Each imputation must reflect a discrete assertion with the result that it is embarrassing to plead the same meaning several times: Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663 at 775; Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1971] HCA 4; (1975) 124 CLR 1 at 15.

13 The function of the pleaded meaning is to set out the meaning which the plaintiff alleges ordinary readers would infer from the article complained of. In deciding whether or not words are capable of conveying an allegedly defamatory meaning, the Court will reject those meanings which can only emerge as the product of some strained or forced or utterly unreasonable interpretation. The Court will assume that the ordinary reader is a person of fair average intelligence who does not live in an ivory tower, who is not unusually suspicious or naive or avid for scandal and who is not inhibited by strict rules of construction: Jones v Skelton [1963] 1 WLR 1362 at 1370; Slatyer v Daily Telegraph Newspaper Co Ltd [1908] HCA 22; (1908) 6 CLR 1 at 7.

14 This brings me to the question of identification.

15 In order to succeed in a claim for damages for defamation, the plaintiff must establish that the matter complained of was published, that it related to him, and was defamatory. It is not essential that he should be specifically named, provided there is some form of description which in the circumstances is such that a person reading it would reasonably believe that it referred to the plaintiff: David Syme & Co v Canavan [1918] HCA 50; (1918) 25 CLR 234 at 238.

16 It is not necessary for everyone to know to whom the article refers; but the plaintiff must prove that ordinary readers of the document who knew him would have understood that it referred to him: Jones v E Hulton & Co [1909] 2 KB 444 at 454.

17 Gatley on Libel and Slander (9th ed) observes at par 7.1 that it is usually clear enough that the words are published of the plaintiff because he is named in the statement and the defendant intends to refer to him, but neither of these elements is necessary. The question in all cases is whether the words might be understood by reasonable people to refer to the plaintiff, subject to the qualification that where the words are published to persons who have special knowledge, the issue will be decided by reference to what reasonable persons possessing that knowledge would understand by them.

18 The learned author goes on to say at par 7.3 that in order to identify the plaintiff, the words must be capable of referring to him. The issue of identification is to be decided on principles similar to those which govern the question of whether the words are capable of a defamatory meaning. Where the plaintiff is expressly identified by name, it is not necessary to produce evidence to prove that anyone to whom the statement was published did identify the plaintiff. The question is not whether anyone did identify the plaintiff, but whether persons who were acquainted with the plaintiff could identify him from the words used.

19 The learned author says further in the same paragraph that where the plaintiff is referred to in an indirect way or by implication, it will be a question of degree how far evidence will be required to connect the libel with him. At one extreme, if there is a libel on "the prime minister" that officer does not need to produce witnesses to testify that they know who he is. At the other extreme, the plaintiff may only be identifiable by reason of extrinsic facts which are not generally known, in which case there is no actionable publication unless it is shown that the words were communicated to persons with such knowledge.

20 The learned author has this to say at par 26.25:

"It is an essential part of the plaintiff's case to show that he is the person referred to by the defamatory words. Accordingly, where it is not absolutely clear on the face of the words that they refer to the plaintiff, e.g. where he is described by his initial letters, or by a fictitious name, or by the name of somebody else, or where he is not mentioned at all, the plaintiff should make clear in his pleading the basis on which he claims to have been identified as the subject of the words complained of. He should set out the connecting facts which establish the link between himself and the words used, and he should make plain his case as to the existence of a person or persons who in fact linked him with the words by reason of their knowledge of those connecting facts. These matters are material facts which must be pleaded. If the plaintiff does not plead such facts sufficiently, his claim will be struck out."

21 In the footnotes to this passage, the learned author says further, and by way of explanation, that where the words do not appear to refer to the plaintiff explicitly, the facts and circumstances which show that the words can reasonably be construed as relating to the plaintiff must be pleaded.

22 If special knowledge is required to make the connection, then this amounts to an innuendo plea with the result that in addition to pleading the extrinsic facts required to establish the link, the plaintiff will have to plead and prove that the words were published to persons who knew the facts, although the plaintiff will not be required to plead as a material fact the precise identities of those who understood the words to refer to the plaintiff as this can be dealt with by a request for particulars.

23 In the present case, the first plaintiff, Vinon Holdings Pty Ltd, is not named explicitly in the two articles comprising the words complained of, although, as I noted earlier, the second plaintiff, Robert Zanon, is named as the managing director of the business, New Age Security.

24 It is against this background that the plaintiffs plead in par 7 of the statement of claim that the words complained referred to and were understood to refer to the plaintiff. Particulars of identification are provided in these terms:

"The first plaintiff is a corporation that carries on business as a security and crowd control business under the name and style of New Age Security."

25 The defendants seek to strike out par 7 on the grounds that it does not link the particulars of identification pleaded with those persons to whom the first plaintiff contends it has been identified.

26 Counsel for the defendants referred to the passage in Gatley (supra) at par 26.25 mentioned earlier and contended that the plaintiff was obliged to set out the connecting facts establishing the link between the first plaintiff company and the words complained of. She submitted that the first plaintiff was obliged to make plain its case as to the existence of a person or persons who in fact linked the plaintiff company with the words by reason of their knowledge of those connecting facts. Reliance was placed upon the reasoning in Interval Resort Networks (A/Asia) Pty Ltd v West Australian Newspapers Ltd [1999] WASC 2 at 28.

27 I have already noted, by reference to observations made in Gatley (supra) at par 7.3, that in cases where the plaintiff is referred to in an indirect way or by implication it will be a question of degree how far evidence and the related pleading of material facts will be required to connect the words complained of with the plaintiff.

28 In my view, the connecting facts set out in par 7 in the present case, namely, that the first plaintiff carries on business under the name and style of New Age Security, are sufficient. The question is not whether anyone did identify the first plaintiff, but whether persons who were acquainted with the first plaintiff would have understood that the words complained of referred to the plaintiff company: Consolidated Trust Co Ltd v Browne (1948) 49 SR (NSW) 86 at 92.

29 In Jones v E Hulton & Co (supra) Lord Alverstone CJ had this to say at page 454:

"Take the case of a libel which uses a name; that name may or may not be conclusive as to the person to whom the libel is intended to refer. Just in the same way, if the libel speaks of a person by description without mentioning a name, in order to establish a right of action the plaintiff must prove to the satisfaction of a jury that ordinary readers of the paper who knew him would have understood that it referred to him. There is abundant authority to show that it is not necessary for everyone to know to whom the article refers; this would in many cases be an impossibility; but if, in the opinion of a jury, a substantial number of persons who knew the plaintiff, reading the article, would believe that it refers to him, in my opinion an action, assuming the language to be defamatory, can be maintained; and it makes no difference whether the writer of the article inserted the name or description unintentionally, by accident, or believing that no person existed corresponding with the name or answering the description. If upon the evidence the jury are of opinion that ordinary sensible readers, knowing the plaintiff, would be of opinion that the article referred to him, the plaintiff's case is made out."

30 It follows from this passage and from the reasoning of the Court in Consolidated Trust Co Ltd v Browne (supra) that in the circumstances of the present case the crucial question is whether persons who were acquainted with the plaintiffs could identify the first plaintiff as the company under attack from the words used.

31 I consider that in the circumstances of the present case the first plaintiff is only obliged to plead and establish that it does carry on business as New Age Security. A plea in those terms sets out sufficiently the connecting facts on which the first plaintiff intends to rely. It will then be a question to be determined upon the evidence adduced at the trial as to whether ordinary readers who knew that the first plaintiff carried on business as New Age Security would understand that the person being referred to in the words complained of was the first plaintiff.

32 It follows that I am not prepared to strike out this paragraph of the statement of claim.

33 The plaintiffs plead in par 8.1 that the words complained of meant and were understood to mean in their ordinary and natural meaning that the first plaintiff routinely uses the services of an underworld bikie gang known as "the Coffin Cheaters" in the provision of security and crowd control services to its customers.

34 The defendants submit that an imputation in this form is not defamatory of the first plaintiff. It does not plead the final distillation of an imputation.

35 According to counsel for the defendants, the pleaded imputation cannot be said to arise from the words complained of because the word "underworld" is used on one occasion only in the words complained of and not as an adjective directly referable to the Coffin Cheaters bikie gang but as a noun used to characterise a general milieu, namely, the "bikie underworld".

36 Counsel for the defendants went on to submit that if the word "underworld", improperly used as an adjective in the pleaded imputation, is removed from consideration, one is simply left with the assertion that the first plaintiff employs or uses a bikie gang known as the Coffin Cheaters and such an assertion is not capable of conveying a meaning defamatory of the first plaintiff.

37 I am not satisfied that par 8.1 should be struck out upon the basis that it is untenable or manifestly groundless. In my view, the words complained of are open to the interpretation that the Coffin Cheaters are a bikie gang forming part of the bikie underworld and could therefore be regarded by the ordinary reader of the articles as an underworld bikie gang.

38 Such a reading would convey to the mind of the ordinary reader that the bikie gang in question was involved in some dubious and possibly criminal activities, with the result that a business that made use of them for security work might have to be regarded with suspicion. Accordingly, in my view, the imputation represents a sufficient distillation of a meaning to be found in the words complained of and the assertion is capable of conveying a meaning defamatory of the plaintiff.

39 The plaintiffs plead in par 8.2 that the words complained of mean in their ordinary and natural meaning that the first plaintiff is part-owned by an underworld bikie gang known as the Coffin Cheaters.

40 The defendants seek to strike out this paragraph on the grounds that the pleaded imputation is incapable of being conveyed by the matter complained of. Furthermore, counsel for the defendants submits, it is not defamatory of the first plaintiff.

41 Counsel for the defendants contended that the words complained of do not contain any direct assertion or suggestion that the Coffin Cheaters have a proprietary interest to any extent in the first plaintiff. Moreover, the articles contain a direct assertion to the contrary in that investigators who probed official company documents found no evidence of an association between the first plaintiff and the leading bikie figure mentioned in the article.

42 Counsel for the plaintiffs contended that the use of such words as "link" or "association" could arguably convey to the mind of the ordinary reader that the Coffin Cheaters had a part-interest in the security firm. He submitted that whether the imputation pleaded by the plaintiffs is open is a question of fact for the jury to determine.

43 The question of whether the words complained of are capable of conveying an allegedly defamatory meaning contended for by a plaintiff is a question of law.

44 I am satisfied that this imputation should be struck out. I cannot discover in the words complained of any passage which seems to suggest that the first plaintiff is part-owned by an underworld bikie gang known as the Coffin Cheaters. The tenor of the article is that there could be links or some informal association between the security firm and bikies or bikie gangs, but there is nothing to suggest that the firm is part-owned by a bikie gang as alleged. The context in which the words complained of appear arguably to suggest that bikies are employed or used by the security firm upon some contractual or gratuitous basis (as suggested by the imputation pleaded in par 8.1) but an ordinary, reasonable reader, in my view, would not understand that the security firm is accused of being part-owned by a bikie gang.

45 The plaintiffs plead in par 8.3 an imputation, as an alternative, to par 8.2, that the first plaintiff has so conducted itself as to give rise to a suspicion by the police on reasonable grounds that the first plaintiff is part-owned by an underworld bikie gang known as the Coffin Cheaters. It follows from earlier discussion that as par 8.2 is to be struck out, this paragraph must be struck out also.

46 The plaintiffs plead in par 8.4 the words complained of mean that because of the close business association between the first plaintiff and an underworld bikie gang known as the Coffin Cheaters, people and organisations should be reluctant to engage the plaintiffs' security and crowd control services.

47 The defendants seek to strike out this paragraph on the grounds that it is not a proper pleading of a defamatory imputation. Counsel for the defendants submits that the plea is simply asserting a conclusion. Counsel submits also that this paragraph is, in essence, simply a repetition of the imputation pleaded in par 8.1 of the claim.

48 I am not prepared to strike out this paragraph. In my view, the ordinary reader could be left with an impression that the purpose of the article was to warn people against using the services of New Age Security because of their association with the Coffin Cheaters. An assertion of this kind is related to, but slightly different from, the assertion the subject of the imputation pleaded in par 8.1 of the claim, and I am therefore not prepared to characterise the paragraph as repetitious.

49 The plaintiffs plead in par 9 that the words complained of mean in their ordinary and natural meaning that the second plaintiff has a close and ongoing business association with an underworld bikie gang known as the Coffin Cheaters.

50 I have already noted in earlier discussion that the second plaintiff is named as the managing director of the security firm known as New Age Security. It follows from earlier discussion that, in my view, the notion that an underworld bikie gang known as the Coffin Cheaters has a close and ongoing association with the security firm in question is capable of arising from the words complained of. It follows from earlier discussion that the plaintiffs are entitled to draw upon the word "underworld" in framing the imputation and the presence of this word means that the imputation contended for is capable of conveying a meaning defamatory of the second plaintiff. Accordingly, I am not prepared to hold that the imputation contended for by the plaintiffs should be characterised as untenable and be struck out.

51 In summary, then, pars 8.2 and 8.3 of the statement of claim will be struck out, for the reasons previously given. I will hear from the parties as to whether any further orders and directions are required.