Warren & Anor v Tweed Shire Council & Anor

Warren & Anor v Tweed Shire Council & Anor - [2002] NSWSC 1105 - NSWSC 2002 case summary — Zoe

[7]

The second plaintiff pleaded a parallel imputation. Included in the statement of claim was paragraph 5 which was pleaded in the following terms: "Alternatively, the Second Defendant published the matter complained of on or about March 2001 in circumstances in which it intended the said matter complained of to be (sic) republished or republication was the natural and probable consequence of the first publication by the Second Defendant and the said matter was republished on or about 4 April 2001, and the Plaintiffs say that the Second Defendant is liable for such republication." 4 Certain complaints having been made of that pleading, a separate trial of the issues then raised took place before Levine J on 18 March 2002. On 22 March 2002 his Honour made rulings on the matters then raised: Warren & Anor v Tweed Shire Council & Anor [2002] NSWSC 211, unreported. Inter alia, his Honour struck out paragraph 5. He struck out the first and third imputations pleaded on behalf of each plaintiff (holding that they were deficient in form) and held that the second imputation pleaded in respect of each plaintiff was, as a matter of law, incapable of being conveyed by the matter complained of. He struck out certain imputations of aggravated damage. The deficiency he identified in the first of each set of imputations was a failure to specify the nature of the incompetence said to have been imputed to the plaintiffs. An imputation of negligence did not suffer the same defect, the basis of the imputation being specified. As a consequence of his rulings his Honour granted the plaintiffs leave to file an amended statement of claim within fourteen days of the day of judgment. 5 On 23 April 2002, pursuant to that leave, the plaintiffs filed an amended statement of claim. The first plaintiff pleaded that three imputations defamatory of him were conveyed; the second plaintiff pleaded two defamatory imputations. They significantly amended the form in which the imputations were framed. In place of the plea that the matter complained of conveyed the imputations in its natural and ordinary meaning, they substituted a plea that the matter complained "in its natural and ordinary meaning, together with certain extrinsic facts" conveyed the imputations. They subscribed particulars which they identified as "particulars of extrinsic facts and identification", and they further particularised the alleged "publication and republication" that had been pleaded in paragraph 5. 6 The following day, 24 April 2002, the plaintiffs filed a document entitled "Further Amended Statement of Claim". In each of these documents paragraph 5 remained in the same terms in which it had appeared in the original statement of claim. 7 In the further amended statement of claim the plaintiffs purported to add new causes of action. These appeared in paragraphs numbered as below and were framed as follows: "8. Further and in the alternative, the Defendants, by the conduct of their servants and/or agents, misrepresented to the public that the draft Species Impact Statement referred to above was a final document intended by the Plaintiffs to be used in the preparation of a final LES, and the Plaintiffs suffered damage as a consequence.

[9]

Further, the Plaintiffs say that the conduct of the First Defendant particularised above amounted to aiding and abetting the Second Defendant in a breach of s52 of the Trade Practices Act within the meaning of s75B of the said Act." 8 Finally, in this document, the plaintiffs made a claim for exemplary damages. They particularised this claim in the following way: "The Plaintiffs say that the conduct of the Defendants particularised above [in the particulars of the claim for aggravated damages] was in contumelious disregard of the rights of the Plaintiffs." 9 The filing of the further amended statement of claim provoked a fresh application on behalf of the second defendant for a separate trial of issues arising out of the proceedings. They provided an outline of their objections and the bases therefor. Before that application could be heard, and presumably in response to the outline of objections, the plaintiffs filed yet a further document which they entitled "Second Further Amended Statement of Claim". It is this document upon which they seek to proceed. I will refer to it as the proposed second further amended statement of claim. The second defendant maintains its objections to the proposed pleading in a number of respects. It opposes the grant of leave necessary for the plaintiff to rely upon the proposed second further amended statement of claim on the basis that its objections are such that to grant leave would be futile as, upon filing, its objections would result in significant portions of the document being struck out. It is therefore necessary to refer in some detail to the manner in which the plaintiffs now seek to plead their cases. 10 The first plaintiff now seeks to plead that the matter complained of conveyed the following imputations which defamed him: "Of the First Plaintiff (a) That the First Plaintiff was incompetent as an environmental consultant in that he prepared a draft Species Impact Statement for the use of Tweed Shire Council which failed to identify and consider a significant koala population, failed to give adequate consideration to the requirements of the Environmental Protection and Biodiversity Conservation Act 1999, and contained an inadequate fauna habitat analysis for a number of species including the Wallum froglet and Wallum tree frog. (b) That the First Plaintiff negligently prepared a draft Species Impact Statement for the use of Tweed Shire Council which failed to identify and consider a significant koala population, failed to give adequate consideration to the requirements of the Environmental Protection and Biodiversity Conservation Act 1999, and contained an inadequate fauna habitat analysis for a number of species including the Wallum froglet and Wallum tree frog. (c) That the First Plaintiff, as a professional environmental consultant, was guilty of unprofessional conduct in that he prepared a draft Species Impact Statement for the use of Tweed Shire Council which was so seriously deficient that it warranted criticism." 11 The second plaintiff pleads that two imputations (now numbered (d) and (e)), in substance identical to the imputations (a) and (b) pleaded on behalf of the first plaintiff, were conveyed of it. 12 Both plaintiffs maintained the allegation that the matter complained of "in its natural and ordinary meaning, together with certain extrinsic facts" conveyed the imputations pleaded. Accordingly, particulars were subscribed. These appear under the heading "Particulars of Extrinsic Facts and Identification". 13 Paragraph 5 was retained in its original form and particulars of "publication and republication" were subscribed to that paragraph. One of these particulars is in the following terms: "The Plaintiffs also rely on the 'grapevine' effect." 14 Paragraph 8 was redrafted to read: "Further and in the alternative, the Defendants, by the conduct of their servants and/or agents, fraudulently misrepresented to members of the public to whom the matter complained of was published, that the draft Species Impact Statement referred to above was a final document intended by the Plaintiffs to be used in the preparation of a final LES, and the Plaintiffs suffered actual damage as a consequence."

[11]

imputations (a) and (b) 17 The first complaint made on behalf of the second defendant is that the imputations numbered (a) and (b), and the corresponding imputations pleaded on behalf of the second plaintiff ((d) and (e)) do not differ in substance, as required by SCR Part 67 Rule 11. It will be seen that the two imputations are identical except for the opening words in that it is asserted that in preparing the draft SIS the first plaintiff failed to identify and consider a significant koala population, failed to give adequate consideration to the requirements of the Environmental Protection and Biodiversity Conservation Act 1999, and that the draft SIS contained an inadequate fauna habitat analysis for a number of species. However, the imputations are framed in such a way as to plead that the assertion of these deficiencies conveyed two separate and distinct defamatory meanings, firstly that the first plaintiff was incompetent as an environmental consultant, and secondly that he negligently prepared the draft SIS. The imputations were redrafted in this way in order to overcome the deficiency identified by Levine J in relation to the imputations of incompetence. 18 In my opinion incompetence and negligence are quite different failings. It is true that the same deficiencies may give rise to a conclusion of incompetence or of negligence, or of both, but this does not mean that the two accusations are identical. A jury may well conclude that the assertion that the first plaintiff failed in the respects identified in the imputation conveyed an imputation that he was incompetent and may additionally, or alternatively, convey the imputation that he was negligent. I am satisfied that the imputations do differ in substance. The same result follows in relation to the parallel imputations (numbered (d) and (e)) pleaded in relation to the second plaintiff. 19 A second argument raised in relation to imputations (a) and (d) is that they are incapable of being conveyed by the matter complained of because that matter refers only to one specific piece of work. This was the view taken by Levine J in his judgment. His Honour wrote (in relation to the imputations as then pleaded, but having equal application to the imputations as presently pleaded): "The generality of such an imputation is incapable of being carried further in circumstances where the matter complained of refers only to one specific item of work." 20 That having been the view expressed by his Honour, I do not think it appropriate to express a different view. The redrafting of the imputation does not affect his Honour's conclusions. The imputations as drafted originally were of simple incompetence. It is true that, as redrafted, the imputations identify three respects in which it is said that the second defendant asserted deficiencies in the plaintiffs' draft SIS, but the reference is still only to one specific item of work. Accordingly, having regard to the ruling of Levine J, leave to file the proposed second further amended statement of claim incorporating imputations pleaded in the form of imputations (a) and (d) will be refused.

[16]

publication and republication 26 I have already referred to the judgment of Levine J in which his Honour struck out paragraph 5 of the original statement of claim. Notwithstanding that, the paragraph has been replicated in each successive version of the pleading. As I understand his Honour's judgment, the principal reason for his decision was that none of the material in the statement of claim nor the particulars then appended could support the allegation that the second defendant was responsible for republication by the first defendant. Indeed, his Honour observed, the matter complained of itself gave every indication to the contrary. He also expressed himself satisfied that it was far from the natural and probable consequence of publication by the second defendant to the first defendant that the first defendant would publish the matter complained of. In the statement of claim only one particular of substance of "publication and republication" was provided. In the proposed second further amended statement of claim additional particulars are provided. These particulars include reference to statutory provisions requiring documents such as an LES (as was the matter complained of) to be put on public exhibition, and a letter from an employee of the first defendant to the second defendant referring to the proposed exhibition of the document. The second defendant has submitted that the additional particulars do not remedy the defect identified by Levine J. Counsel argued that the particulars ought to distinguish those relied on in support of publication and those relied on in support of the allegation of republication. Further, he argued that the particulars failed to support the allegation contained in paragraph 5 that the second defendant intended the matter complained of to be republished. I reject these arguments. The allegation of publication is contained in paragraph 3 of the pleading (although this is a global assertion that "the defendants" published the matter complained of). In his judgment Levine J dealt with this by noting that that paragraph should be understood as pleading no more than that the second defendant published the matter complained of to the first defendant. 27 That being the case, it seems to me that paragraph 5 should be treated as, and, indeed, is, an allegation of republication by the first defendant for which the second defendant is liable. The additional particulars are sufficient to support an allegation that the second defendant knew of the likelihood of republication, and therefore could be seen to have intended republication. 28 The final particular again invokes "the grapevine effect" which is otherwise un-particularised. It will be necessary for the plaintiffs properly to particularise that allegation.

[17]

the claim in deceit 29 I have set out above that paragraph of the proposed second further amended statement of claim in which the plaintiffs purport to plead a cause of action in deceit. The fraudulent misrepresentation alleged against both defendants is identified as: "that the draft Species Impact Statement referred to above was a final document intended by the Plaintiffs to be used in the preparation of a final LES …" 30 The first point made on behalf of the second defendant is that the representation so alleged is "completely inconsistent" with the content of the matter complained of in which reference is made throughout to a "draft SIS". This, it seems to me, is a factual matter which does not affect the propriety of the pleading, although it may make proof of the allegation contained in the pleading extremely difficult. In oral submissions counsel for the second defendant argued that the allegation departed from the usual allegation of deceit in that it alleges fraudulent misrepresentation to members of the public to whom the matter complained of was published and as a consequence caused the plaintiffs damage. It seems to me unlikely that the cause of action in deceit was intended to operate in this way, but it is unnecessary to determine that matter because I am of the view that the other complaints made on behalf of the second defendant are well made. In order to demonstrate this it is necessary to refer to the particulars subscribed to paragraph 8. These include that an employee of the first defendant instructed and/or requested the second defendant to alter a draft LES by the inclusion of material damaging to the plaintiffs; that the second defendant, while purporting to be an independent consultant, incorporated into its final LES such changes; that the instructions and/or requests were made when the first defendant had already received from the plaintiffs a final version of their SIS; and that the second defendant failed to request the first defendant to provide it with the final SIS: "in circumstances when it knew or ought to have known that the plaintiffs had prepared, or were preparing a final SIS." 31 These particulars are wholly inadequate to support a claim of fraudulent misrepresentation. They may, in some respects, be relevant to the question of the state of mind of the defendants and in particular to their fraudulent intent but they go no further. There is no particularision of the manner or the terms in which it is alleged that either defendant made the asserted misrepresentation. 32 There were other, more fundamental, criticisms directed to paragraph 8. Given that the inadequacy of particularisation may be the subject of remediation, it is necessary to consider the alternative bases on which the second defendant seeks to resist the filing of the pleading in this form. 33 Central to the second defendant's proposition in this respect was the assertion that, at its heart, the pleading, properly analysed, seeks redress for damage to the reputations of the plaintiffs and that, in effect, it is a claim for damage to reputation (i.e. in defamation) dressed up as something else. That being so, reliance was placed upon the decision of Levine J in Sattin v Nationwide News Pty Ltd (1996) 39 NSWLR 32. There a plaintiff had commenced proceedings in defamation as a result of a publication which was plainly, and was accepted to be, quite untrue. Following a challenge by the defendant, the plaintiff sought leave to amend by adding an additional or alternative claim in negligence arising out of the very same circumstances. Levine J refused leave to file the proposed amended statement of claim. His Honour declined to follow the decision of the House of Lords in Spring v Guardian Assurance PLC [1994] 3 WLR 354 which had held, as I understand it, that, in appropriate circumstances, concurrent actions in defamation and negligence might lie in respect of the publication of injurious material and that this remained the position even where the defendant was in a position to defend the action in defamation of the basis of qualified privilege. In other words, a defence of qualified privilege to a defamation action was not a bar to an action in negligence based on the same publication. Levine J, in reaching his decision in Sattin, was influenced by the unique nature of an action for defamation, and by policy considerations balancing freedom of speech against reputation protection: see for example, p. 43 E - G. However, it also appears to have been material to his decision that the publication, in that case, was undoubtedly untrue and that there was no prospect of a successful defence of privilege, comment or justification. 34 One difficulty I have with relying on the decision in Sattin is that the pleading in paragraph 8 in this case does not explicitly state that the damage claimed is reputational damage. Indeed, the "actual damage" alleged is unparticularised, notwithstanding a subsequent claim of "damages for actual loss being loss of business". Unlike Levine J, in this case it is not possible to conclude that the defendants do not have available to them any defences of qualified privilege, comment or justification. Indeed, to the extent that it may be predicted at this early stage, a defence of qualified privilege would not be without prospects of success. 35 In written submissions subsequently filed on behalf of the plaintiffs it was suggested that I should conclude that Sattin was wrongly decided. This I am not prepared to do, but I am prepared to read it as limited to the particular circumstances that there existed, and these included the absence of any prospect of any of the defences mentioned in respect of the defamation claim. In that respect the present case is clearly distinguishable. I will not refuse leave to file the proposed second further amended statement of claim, incorporating paragraph 8, by reason of the decision in Sattin. 36 I will, however, refuse such leave unless and until the pleading is properly particularised.

[20]

"Corporation", for the purposes of the TPA, is defined in s4. Given the constitutional limitations on the application of the TPA to only those corporations over whom the Commonwealth has jurisdiction, the definition is important. It is important that a plaintiff pleading a cause of action under the TPA identifies with specificity the basis upon which he/she/it claims that the TPA applies. This includes the assertion of the nature of the corporation which is alleged in order to render the TPA applicable. 39 The second defendant has raised a number of objections to the proposed pleading. 40 The reference to "the conduct of the Second Defendant particularised above …" appears to incorporate the particulars of misrepresentation subscribed to the allegation of deceit. I have already observed that these are less than informative in support of that allegation. They are no more helpful in elucidating the claim under s52 of the TPA. 41 The second defendant has also taken issue, in a more fundamental way, with the pleading, although it may be said, it has done so somewhat cryptically. For example, it was argued that: "There is no averment in the usual terms of s4 of the TPA and s51(xx) of the Constitution." 42 I take this to mean that the pleading does not allege that the second defendant was a corporation of a kind as defined in s4 of the TPA such as to bring it within the TPA, a necessary constitutional prerequisite for the application of the TPA. If this is what was intended, the objection must be upheld. It is, in my opinion, fundamental to pleading a claim under the TPA to state with clarity the basis upon which it is said that the TPA applies. 43 A further complaint is that there is no averment that the specific conduct alleged against the second defendant was conduct in trade or commerce. This, too, must be upheld. The pleading alleges only that the second defendant "was a corporation engaged in trade or commerce …". S52 of the TPA prohibits a corporation: "in trade or commerce, engage[ing] in conduct that is misleading or deceptive or is likely to mislead or deceive". 44 As I read the section, it clearly prohibits misleading or deceptive conduct in trade or commerce, but this is not what the plaintiffs have alleged against the second defendant. What they have alleged is that the second defendant was a corporation engaged in trade or commerce, but not that the conduct upon which they rely was undertaken in trade or commerce. 45 I am satisfied that, for these two reasons, the proposed pleading is defective and that, accordingly, leave should not be granted to file a document which, inevitably, would be struck out, at least in part. 46 Counsel for the second defendant relied, in relation to paragraph 9, also on the asserted defects to which he had already pointed in the pleading of the deceit claim, these being identified as: "the class of persons misled, inducement, reliance, causation and damage". 47 This, again, is somewhat cryptic, and I do not find it altogether persuasive. The terms of s52(1) appear to me to be very broad and I am not persuaded that they should be interpreted as requiring that the person suffering the alleged damage be the person to whom the misleading or deceptive conduct (or the misrepresentation that constitutes misleading or deceptive conduct) is directed. No authority to that effect was cited. However, for the reasons I have given, I will not allow a document containing a pleading in the terms of the current paragraph 9 to be filed. 48 Paragraph 10 is framed in the following terms: "Further, the Plaintiffs say that the conduct of the First Defendant particularised above amounted to aiding and abetting the Second Defendant in a breach of s52 of the Trade Practices Act within the meaning of s75B of the said Act." 49 By s82 of the TPA, a person "involved in [a] contravention" of s52 may be liable in damages in respect of the contravention. S75B of the TPA relevantly provides that a reference in Part VI of the TPA to a person involved in a contravention of a provision of, inter alia, Part V (into which Part s52 falls), shall be read as a reference, inter alia, to a person who has aided, abetted, counselled or procured the contravention. As I understand the plaintiffs' intention, it is to assert that:

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