Nrma v Nine Network Australia Pty Ltd [2002] ACTSC 37 (17 May 2002)

Last Updated: 11 June 2002

National Roads and Motorists Association Limited ACN 000 010 506 v Nine Network Australia Pty Limited ACN 008 685 407 [2002] ACTSC 37 (17 May 2002)

CATCHWORDS

PRACTICE AND PROCEDURE - defamation - imputations.

Supreme Court Rules (NSW), Part 67

Defamation Act 1974 (NSW)

Aboriginal Nations Pty Ltd v John Fairfax Publications Pty Ltd [1998] ACTSC 125

Amalgamated Television Services v Marsden (1998) 43 NSWLR 158

Baffsky v John Fairfax & Sons Ltd (1991) Aust Torts Reports ¶81-144

Bognor Regis Urban District Council v Campion [1972] 2 QB 169

Drummoyne Municipal Council v ABC (1990) 21 NSWLR 135

John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36

Jones v Skelton [1963] 1 WLR 1362

Morris v Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260

Rakhimov v John Fairfax Publications Pty Ltd [2001] NSWSC 11

Random House Australia Pty Ltd v Abbott and Costello [1999] FCA 1538; (1999) 94 FCR 296

No. SC 473 of 2001

Coram: Master T. Connolly

Supreme Court of the ACT

Date: 17 May 2002

IN THE SUPREME COURT OF THE )

) No. SC 473 of 2001

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: NATIONAL ROADS AND MOTORISTS ASSOCIATION LIMITED ACN 000 010 506

Plaintiff

AND: NINE NETWORK AUSTRALIA PTY LIMITED ACN 008 685 407

Defendant

ORDER

Coram: Master T. Connolly

Date: 17 May 2002

Place: Canberra

THE COURT ORDERS THAT:

1. Paragraphs 4 (a), (e) and (f) of the plaintiff's statement of claim dated 19 July 2001 be struck out with leave to replead.

1. This is an application by way of notice of motion to strike out Paragraph 4 of the plaintiff's statement of claim in defamation proceedings commenced by originating application dated 18 July 2001. The matter complained of is the entirety of a broadcast report published on the "Sunday" public affairs program on 11 March 2001 entitled "Road Rage: The Battle for the NRMA." The originating application alleges, and it is not denied, that this was broadcast on WIN Television throughout the Australian Capital Territory, and was also broadcast in the other States and Territories of Australia.

2. The matter complained of is set out, as is appropriate, as Schedule A to the originating application, and on this application the entire segment, which lasted some 40 minutes, was played to the Court, and the video tape is Exhibit A in these proceedings.

3. Paragraph 4 sets out the imputations said to arise from the matter complained of, and it should be set out in full. It states:

The matter complained of in paragraph 3 above in its natural and ordinary meaning carried the following imputations each of which were defamatory of the Plaintiff:

a) The Plaintiff is subject to corrupt control and management.

b) The Plaintiff attempted to blackmail one of its directors.

c) The Plaintiff attempted to bribe one of its directors.

d) The Plaintiff is without stable governance.

e) The Plaintiff is so lacking in stable governance and direction that investors should not risk dealing with it.

f) The Plaintiff has betrayed the public's faith in it as one of Australia's mot trusted companies.

g) The Plaintiff acted with gross negligence in failing to prevent illegal public disclosure of its commercially sensitive information.

h) The Plaintiff is directed by an untrustworthy Board.

i) The Plaintiff has become the instrument of its Chairman in that its activities are conducted in the interest of himself and his cronies to the detriment of its members.

j) The Plaintiff acted improperly in that it awarded contracts to those who served the private interests of Board members.

4. Although the notice of motion sought to strike out the whole of paragraph 4, the defendant indicated that it no longer complained of sub paragraphs (d), (h) and (i). The matter proceeded to hearing on 19 April 2002. Counsel requested leave to file additional written submissions, which were received by 9 May 2002.

5. The issue before me was whether the matter complained of was capable of conveying against the plaintiff the defamatory imputations alleged. I had before me the affidavit of Mr Svilans, solicitor for the Defendant of 18 April 2002 to which was annexed a letter from Mr Whittaker, solicitor for the Plaintiff, of 27 March 2002 which set out in some detail those parts of the matter complained of which the plaintiff says gives rise to the imputations set out in paragraph 4. It was common ground that, on a strike out application, the paragraphs in question should be struck out entirely only if it is apparent that it is not reasonably arguable that the matter complained of is defamatory of the plaintiff. The parties accepted that, if individual imputations were expressed in such a way as to go beyond that which is capable of being conveyed by the matter complained of, but where some other imputation could arguably arise, leave to re plead should be given.

6. The originating application has expressly set out in paragraph 4 a series of imputations which are said to arise from the matter complained of. In the ACT it is not, on present authority, necessary to set out imputations as such. In all parts of Australia apart from New South Wales imputations are merely particulars. The advantage of setting these out in the form of imputations was referred to by Higgins J in Baffsky v John Fairfax & Sons Ltd (1991) Aust Torts Reports ¶81-144 where His Honour said

"It is desirable that imputations alleged by a plaintiff appear in a pleading, particularly where the matter complained of is extensive. It is also reasonable to demand of such imputations a degree of precision and accuracy similar to that demanded by the Rules and practice in New South Wales."

Mr Reynolds SC made the observation that this question may need to be further examined in the light of John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36 where a plaintiff sues in this jurisdiction on the basis of material published in New South Wales, as the imputation is itself the basis of the cause of action under the substantive law of the place of the tort. It is not necessary for me to develop this proposition in this application.

7. The test to be applied in determining whether the matter complained of is capable of giving rise to the imputations pleaded is well settled. It is the natural and ordinary meaning of the words, and images, that must be considered. In Jones v Skelton [1963] 1 WLR 1362 Lord Morris said at 1371 in an oft cited passage that

"The ordinary and natural meaning may therefore include any implication or inference which a reasonable reader guided not by any special but only by general knowledge and not fettered by any strict legal rules of construction would draw from the words. The test of reasonableness guides and directs the court in its function of deciding whether it is open to a jury in any particular case to hold that reasonable persons would understand the words complained of in a defamatory sense."

8. The ordinary reasonable reader does not live in an ivory tower but can and does read between the lines in light of that persons general knowledge and experience of worldly affairs (Amalgamated Television Services v Marsden (1998) 43 NSWLR 158 at 165)

9. The attack on the imputations as pleaded goes mostly to form, but it is said that imputations (b) and (c) are bad for the reason that the allegations of blackmail and bribery, which it is conceded are made in the matter complained of, are accusations made of one identified director, and not the plaintiff company. The imputation is thus said to be bad in that the matter complained of is not capable of giving rise to the imputation. The imputations are:

(b) The Plaintiff attempted to blackmail one of its directors

(c) The Plaintiff attempted to bribe one of its directors.

It is conceded that these accusations might be actionable by the named individual, but it is said that they are not actionable by the company. It is clearly established that a company cannot maintain an action in libel for any words which reflect not upon itself but solely upon its individual officers or members (Bognor Regis Urban District Council v Campion [1972] 2 QB 169 at 175

10. The test to be applied in this context was set out by Higgins J in Aboriginal Nations Pty Ltd v John Fairfax Publications Pty Ltd [1998] ACTSC 125, where it was held that an allegation against part owners of a company was actionable by the company. The question is whether a reasonable hypothetical reader or viewer would equate the conduct and reputation of the plaintiff company with that of the named director. In my view, it would. The named director who is accused of seeking to bribe and blackmail another director is identified in the material as part of the group on the board which controls the board, and so the company. Moreover, in considering material contained in a television broadcast, it is necessary to take both the words and the images together. It has been held that where publication is in the transient form of an electronic broadcast the court will be mindful that a viewer, unlike the reader of a newspaper, cannot go back to check what has gone before, and so a

"trial judge in a transient publication case will therefore more readily leave it to the jury to decide whether an imputation affected by any of those circumstances, or any similar circumstances peculiar to such type of publication, was in fact conveyed, than he or she would in relation to a written document case (Amalgamated Television Services v Marsden (1998) 43 NSWLR 158 per Hunt CJ at CL at 166)

11. The specific allegations of both blackmail and bribery involved the one named director, but I note that, where the matter complained of at line 46 first refers to "sensational allegations of attempted bribery and blackmail" the accompanying image is of the NRMA head office in Sydney. Where later in the broadcast, at line 361 it is said "We confront a Board member with the allegation that he sought to blackmail and bribe a fellow Board member", the images broadcast are of the NRMA head office and then of the NRMA logo. It seems to me that these images are capable of conveying the imputation that the named Board member was acting on behalf of the company. Imputations (b) and (c) should not be struck out.

12. Imputation (a) is attacked as being imprecise. Imputation (a) reads as follows:

(a) The Plaintiff is subject to corrupt control and management.

This imputation is attacked as a matter of form, on the basis that the allegation of corrupt control and management is imprecise. The purpose of pleading an imputation, or of pleading particulars, is, as Beaumont J observed in Random House Australia Pty Ltd v Abbott and Costello [1999] FCA 1538; (1999) 94 FCR 296

"the need to define issues where more than one meaning may be inferred from the words." (at para 27).

This rationale for requiring a degree of precision in pleadings in this Court mirrors the underlying basis for the law as it has developed in New South Wales in relation to the form of imputations. As Hunt CJ at CL said in Amalgamated Television Services v Marsden (1998) 43 NSWLR 158 at 162,

"It is a fundamental rule that the defendant in any proceedings is entitled to know the nature of the case to which he must plead and which he will be called upon to meet at the trial."

It is from this principle, equally applicable in this Territory as in New South Wales, that Hunt CJ at CL drew the conclusion later on that page that

"an imputation must be stated with sufficient precision as to avoid the likelihood of confusion in relation to the meaning for which the plaintiff contends."

13. It seems to me that the law as it has developed in New South Wales can provide appropriate guidance in relation to the question of the degree to which the claim, whether pleaded by way of imputation or as particulars to the alleged libel, enables a defendant to understand and meet the claim. This is so even though the particular provisions of Part 67 of the New South Wales Supreme Court Rules directed to pleading of claims brought under the Defamation Act 1974 (NSW) are not applicable in this jurisdiction (subject to the caveat referred to in para 6) Counsel for the plaintiff in this matter referred me to the remarks of Gleeson CJ in Drummoyne Municipal Council v ABC (1990) 21 NSWLR 135 where His Honour said at 137 that the requirement to be precise

"raises questions of degree. Almost any attribution of an act or condition to a person is capable of both further refinement and further generalisation. In any given case a judgment needs to be made as to the degree of particularity or generality which is appropriate to the occasion, and as to what constitutes the necessary specificity. If a problem arise, the solution will usually be found in considerations of practical justice rather than philology.........The requirement upon a plaintiff cannot go beyond doing the best that can reasonably be done in the circumstances."

14. The allegation that the plaintiff is subject to "corrupt" control and management is one of uncertain import, and seems to me to carry with it all the difficulties discussed by Hunt J of the use of the term "improper" in Morris v Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260 at 272.

15. It seems to me that this imputation should be struck out, with leave to re-plead.

16. Imputation (e) is attacked as a matter of form in that it is said to be imprecise, and to involve a number of concepts rolled up in to the one imputation, so that the defendant cannot properly meet the allegation. Imputation (e) reads as follows:

(e) The plaintiff is so lacking in stable governance and direction that investors should not risk dealing with it.

17. The defendant says that this imputation alleges a lack of stable governance (which is itself separately pleaded in imputation (d), which has not been objected to), also lacks direction, which is itself an imprecise term, and is a body that investors should not risk dealing with. What form of risk is not specified. The practice of rolling up a number of separate allegations into the one imputation was criticised by Hunt J in Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663 at 677. This criticism has since been endorsed as a principle by Levine J in Rakhimov v John Fairfax Publications Pty Ltd [2001] NSWSC 11. While remaining mindful that the procedural rules relating to the pleading of imputations in New South Wales is not the law in the Australian Capital Territory, the rationale for this reasoning- the need for precision so that the defendant can understand and meet the case pleaded against it, remains valid. It seems to me that this imputation is defective in form as it rolls up a number of concepts which are both different from each other and of uncertain import. The imputation should be struck out, with leave to re-plead.

18. Imputation (f) is attacked on the basis that it is both uncertain and rolls up a number of separate concepts. Imputation (f) is as follows:

(f) The plaintiff has betrayed the public's faith in it as one of Australia's most trusted companies.

19. The defendant says that this is so uncertain as to prevent it from being able to meet the allegation. It does not set out with any specificity why or in what manner the public had faith in the company and why they do not now have faith in the company. It does not specify what or how that faith has been betrayed. It does not specify in what manner the company was, or is no longer, one of Australia's most trusted companies. For the reasons set out above, an imputation that is both imprecise, and rolls up several different concepts is bad, and should be struck out, with leave to re-plead.

20. Imputation (g) is attacked as being imprecise. It reads as follows:

(g) The Plaintiff acted with gross negligence in failing to prevent illegal public disclosure of its commercially sensitive information.

21. The letter referred to above in para 5 gives particulars of the lines in the matter complained of that support this imputation, and I am satisfied that the ordinary viewer would understand this imputation to arise from the references in the program to the allegations that there had been, contrary to law, repeated leaks of commercially sensitive information. The program was critical of the Company and its Chairman for instigating investigations of certain leaks, not relating to commercially sensitive information, but not instigating investigations into the leaking of the commercially sensitive information. There was criticism of the rhetorical flourish of the allegation of gross negligence as opposed to negligence, and while I acknowledge that rhetorical flourishes have been criticised (see per Hunt J in Morris at 272 F), it seems to me that this is not fatal. It seems to me that this is an imputation that is not so flawed that it should be struck out.

22. Imputation (j) was criticised as being imprecise. It reads as follows:

(j) The plaintiff acted improperly in that it awarded contracts to those who served the private interests of Board members.

23. The wording of this imputation as pleaded was clearly open to attack. There is no impropriety in awarding a contract to a person who also serves the private interests of a Board member. The NRMA no doubt awards a travel contract to an airline for official travel. A Board member may choose to purchase a ticket for private travel from that airline. The airline in providing the private travel would be serving the private interests of the Board member, but there would be no impropriety. Counsel for the plaintiff sought leave, which not being opposed was granted, to amend the imputation on the day of the hearing to read as follows:

(j) The Plaintiff acted improperly in that it awarded contracts to persons because they served the private interests of Board members.

In its amended form it is still subject to the criticism, based on Hunt J's comments in Morris, that an allegation of impropriety is vague, but it seems to me that the imputation, properly, does explain the basis of the impropriety, namely, that it awards contracts to persons because they served the private interests of Board members, and not, it may be inferred properly from this, on the basis of merit alone. As re-pleaded it seems to me that this is an imputation that may go to trial, and I would not strike it out.

23. Counsel for the defendant in his written submissions makes the point that certain of the passages in the matter complained of that are said to give rise to this imputation are not capable of giving rise to the imputation. While I can readily see how those passages dealing with an advertising company and a law firm give rise to the imputation, Mr Reynolds does, it seems to me, have a point in relation to those parts of the program dealing with the appointment of the barrister. The program is critical of his appointment to conduct certain investigations, but these statements, it seems to me, are not capable of giving rise to this imputation. The plaintiff may need to consider whether those passages are to be relied on in respect of this imputation.

24. The outcome is that imputations (a) (e) and (f) should be struck out, with leave to replead. I will hear the parties as to costs.

I certify that the preceding twenty four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master, Mr T Connolly

Associate:

Date: 17 May 2002

Counsel for the Plaintiff: Mr R. G. McHugh

Solicitor for the Plaintiff: Corrs Chambers Westgarth

Counsel for the Defendant: Mr G. Reynolds SC

Solicitor for the Defendant: Gilbert and Tobin by their agents: Phillips Fox

Date of hearing: 19 April 2002

Date of judgment: 17 May 2002