Rural & General Insurance Broking Pty Ltd v Australian Prudential Regulation Authority [2006] ACTSC 42 (4 April 2006)

Last Updated: 22 May 2006

RURAL & GENERAL INSURANCE BROKING PTY LTD v AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY [2006]

ACTSC 42 (4 April 2006)

EX TEMPORE JUDGMENT

No SC 306 of 2004

Judge: Crispin J

Supreme Court of the ACT

Date: 4 April 2006

IN THE SUPREME COURT OF THE )

) No SC 306 of 2004

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: RURAL & GENERAL INSURANCE BROKING PTY LTD

Plaintiff

AND: AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Defendant

REASONS FOR JUDGMENT

Judge: Crispin J

Date: 4 April 2006

Place: Canberra

1. This is an application to further amend an amended statement of claim. The statement of claim in its present form alleges both defamation and injurious falsehood. The proposed amendment would firstly abandon the claim for injurious falsehood, and secondly substitute a single imputation in paragraphs 2 and 6 of the statement of claim for the four alternative imputations that presently appear in each of those paragraphs.

2. It is, I think, appropriate to mention that the matter complained of consists of a media release issued by the defendant on 15 April 2003, and subsequent republication of some of the relevant assertions in the press. For present purposes I need only refer to the media release, which is annexure A to the statement of claim. That release was in the present following terms.

Headline, "APRA issues consumer alert on unauthorised insurer".

"The Australian Prudential Regulation Authority (APRA) today issued a warning to consumers buying insurance policies with Rural and General International Insurance Ltd. Rural and General International Insurance Ltd is registered in Vanuatu as an exempt general insurer that is not authorised to offer insurance to the public in either Vanuatu or Australia under the conditions of its registration.

The regulator's warning stems from concerns that Rural and General International Insurance Ltd has been active in offering and providing insurance to Australian consumers via Rural and General Broking Pty Ltd in Australia. APRA encourages consumers to review the list of all companies authorised to conduct insurance business in Australia. The list is available on APRA's website, www.apra.gov.au. For further information please contact the APRA call centre on 1300 13 10 60.

APRA is the prudential regulator of the financial services industry, including banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. It currently regulates $1.5 trillion in assets for 20 million Australians."

3. The imputation which the plaintiff seeks to insert in lieu of those presently pleaded varies slightly from one paragraph of the amended statement of claim to another.

4. In paragraph 2 it reads:

"The plaintiff aids and abets a Vanuatu company in illegally offering and providing insurance to Australian customers."

5. In paragraph 4 it reads:

"The plaintiff aids and abets a Vanuatu company in illegally soliciting insurance business in Australia."

6. The second formulation is repeated in paragraphs 6, 8 and 8B.

7. Mr Wheelhouse SC, who appears for the defendant, has opposed the application for amendment on the ground that the imputation, in either form, is not capable of arising from the matter complained of.

8. He submits that the hypothetical reasonable reader would not draw an imputation of illegality from the matter complained of. The hypothetical reasonable reader is, of course, a person who is assumed to have no particular legal knowledge and to be neither particularly gullible nor unduly sceptical. Nor is he or she a person who is avid for scandal. Furthermore, as Mr Wheelhouse quite properly pointed out, such a person should be taken to read certain types of documents in a particular way and hence, it has been suggested, likely to read a book with more care than a newspaper see, for example, Amalgamated Television Services Pty Limited v Marsden, (1998) Vol 43, NSWLR, 158 at 165.

9. In this case Mr Wheelhouse suggests that a reader would be inclined to read this document with particular care because it is a media release by the Australian Prudential Regulation Authority. I accept that submission. It does seem to me that the hypothetical reader should be taken to read a document of this kind with care.

10. Read in that manner, Mr Wheelhouse submits, the hypothetical reasonable reader would simply see the document as conveying a warning, alerting potential customers to the fact that, whilst Rural and General International Insurance Limited is not authorised to offer insurance to the public in Vanuatu or Australia, it seems to have been active in offering and providing insurance to Australian consumers via the plaintiff. There is, in his submission, no imputation of illegality in that. He points out that an unauthorised insurer may lawfully offer insurance in Australia, though it might not be subject to the same regulatory framework and, perhaps more importantly from the point of view of a consumer, the same regulatory guarantees may not be in place.

11. Despite Mr Wheelhouse's eloquent submissions, however, it does seem to me that the imputation is capable of arising from the matter complained of. I stress that I am not concerned at the moment to determine whether such an imputation was, in fact, conveyed by the article in annexure `A' to the amended statement of claim. I am concerned only with the somewhat lower threshold test of whether the article was capable of giving rise to such an imputation.

12. It is true that test is not as low as the legal tests that apply in some other circumstances, but it is nonetheless considerably less stringent than that applicable to determining whether or not the imputation was, in fact, conveyed by the material complained of. It seems to me that a hypothetical reasonable reader could read the document as giving rise to an imputation of illegality on the right of the plaintiff. The document did, after all, purport to be an alert issued by the Australian Prudential Regulation Authority. It indicated that the Rural and General International Insurance Company Limited had not been authorised to offer insurance to the public in Vanuatu or Australia and went on to indicate that the warning stemmed from concern that it may have been doing so, notwithstanding the absence of any authorisation, "via" the plaintiff company. It seems to me that a reasonable reader could have inferred from the article that APRA, which is a well-known regulation authority, was concerned at the unauthorised conduct because the lack of authorisation rendered it unlawful and that the word "via" suggested that the unlawful conduct was being implemented on its behalf by the plaintiff. Whether or not the hypothetical reader should, in fact, be taken to have read the document in that way, is, of course, a question that will have to be addressed at the trial of the matter rather than now, but I am satisfied that it was capable of conveying an imputation, however formulated, of aiding and abetting the "Vanuatu company" in offering soliciting or providing insurance in Australia.

13. Since that was the only ground upon which the amendment was opposed, it seems to me to be appropriate to grant leave for the amendment to be made.

14. It is, of course, an inevitable consequence that the plaintiff will be obliged to pay the defendant's costs thrown away by the adjournment. There has been some debate as to the extent of those costs. It seems to me that that is an issue, which can be adequately resolved by the Registrar in due course.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Crispin.

Associate:

Date: 5 May 2006

Counsel for the plaintiff: Mr R Lucas

Solicitor for the plaintiff: Colquhoun Murphy

Counsel for the defendant: Mr J S Wheelhouse SC

Solicitor for the defendant: The Australian Government Solicitor

Date of hearing: 4 April 2006

Date of judgment: 4 April 2006