Tyndall Funds Management Australia Limited and Anor v Mesh and 2 Ors [1999] NSWSC 69 (17 February 1999)

Last Updated: 18 February 1999

NEW SOUTH WALES SUPREME COURT

CITATION: Tyndall Funds Management Australia Limited & Anor v Mesh & 2 Ors [1999] NSWSC 69

CURRENT JURISDICTION: Common Law

FILE NUMBER(S): 20701 of 1994

HEARING DATE{S): 17/12/97: 6/02/98: 20/02/98: 2/04/98

JUDGDMENT DATE: 17/02/1999

PARTIES:

TYNDALL FUNDS MANAGEMENT AUSTRALIA LIMITED (formerly GLOBAL FUNDS MANAGEMENT AUSTRALIA LIMITED)

&

TYNDALL FUNDS MANAGEMENT (NSW) LIMITED (formerly GLOBAL FUNDS MANAGEMENT (NSW) LIMITED)

(Plaintiffs)

v

PAMELA ANN MESH

(First Defendant)

HELEN CHUPROFF

(Second Defendant)

HARI BHAGAT

(Third Defendant)

JUDGMENT OF: Levine J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

Mr A Henskens

(Plaintiffs)

Mr C Evatt

Ms J Gibson

Mr M Rollinson

(Defendants)

Mr D Casperson

(Third Cross Defendant)

SOLICITORS:

Cowley Hearne

(Plaintiffs)

CATCHWORDS:

Particulars of comment and qualified privilege

Contextual imputations

Capacity

Form

Cross-claim

Abuse of process

Defective pleading

ACTS CITED:

DECISION:

See paragraph 35

JUDGMENT:

- 13 -

DLJ : 3

THE SUPREME COURT

OF NEW SOUTH WALES

COMMON LAW DIVISION

DEFAMATION LIST

No. 20701 of 1994

JUSTICE DAVID LEVINE

WEDNESDAY 17 FEBRUARY 1999

TYNDALL FUNDS MANAGEMENT AUSTRALIA LIMITED (formerly GLOBAL FUNDS MANAGEMENT AUSTRALIA LIMITED)

&

TYNDALL FUNDS MANAGEMENT (NSW) LIMITED

(formerly GLOBAL FUNDS MANAGEMENT

(NSW) LIMITED

(Plaintiffs)

v

PAMELA ANN MESH

(First Defendant)

HELEN CHUPROFF

(Second Defendant)

HARI BHAGAT

(Third Defendant)

JUDGMENT (Particulars of comment & qualified privilege - contextual imputations - capacity & form - cross-claim - abuse of process - defective pleading)

1 This action has been the subject of judgments and rulings as follows: Dowd J 27 November 1995; Levine J 30 November 1995; Studdert J 5 June 1996; Levine J 29 August 1997.

2 By a Statement of Claim filed on 22 September 1994 the two plaintiffs sue in respect of a publication on or about 4 December 1992. The publication as I understand it is a letter from Mr Bhagat to a Ms Marie Nixon of Baker & McKenzie solicitors. The letter, it is said, was published as set out in the particulars of publication in paragraph 4.

3 The plaintiffs contend that the matter complained of conveys of each of them (that is, the two corporations) the following imputations:

"5(a) the first and second plaintiffs behaved in so suspicious a manner as to warrant the suggestion that they might have accepted a bribe;

(b) the first and second plaintiffs behaved in so suspicious a manner as to warrant careful scrutiny of proposals they put forward".

4 On 17 December 1997 the defendants filed their Defence. The defences include comment, qualified privilege, justification pursuant to s 15 and contextual justification pursuant to s 16 of the Defamation Act, 1974.

5 The contextual imputations are as follows:

"9(a) ...

(i) The first and second plaintiffs behaved in so suspicious a manner as to warrant the suggestion that they might have accepted a bribe.

(ii) The first and second plaintiffs behaved in so suspicious a manner as to warrant careful scrutiny of proposals they put forward because of the possibility that they have been bribed.

(iii) The third plaintiff has behaved in such manner as to warrant the suggestion that he dishonestly colluded with John Murphy with a view to obtaining extortionate payments for Global.

(iv) The first and second plaintiffs are dishonest.

(v) The third plaintiff is dishonest.

(vi) The third plaintiff conspired with John Murphy for Global to receive payments to which it was not entitled.

(vii) The plaintiffs so conducted themselves that they warranted the allegation that they were acting to the disadvantage of thousands of unit holders who are elderly and helpless and are unable to protect their interests.

(viii) The third plaintiff so conducted himself that he warranted the allegation that there was a possible collusion between himself and John Murphy.

(ix) The plaintiffs unjustifiably received excessive payments.

(x) The plaintiffs paid themselves excessive remuneration in the sum of $4 million a year.

(xi) The plaintiffs so conducted themselves they warranted being reported to the Australian Securities Commission.

(xii) The third plaintiff conducted himself in such manner that he warranted the allegation that a financially distressed large borrower might make him an offer which would be subject to scrutiny.

(xiii) The plaintiffs conducted themselves in such manner as to warrant the allegation that settlement proposals with large borrowers and those already approved should be scrutinised to obviate any suspicion".

6 In relation to the contextual imputations it is to be noted that several of them refer to a third plaintiff (Grant Smith); he is no longer a plaintiff however he is a third cross-defendant in the cross-claim filed on 20 November 1997 to which I will come shortly.

7 In the course of submissions it was agreed that by consent contextual imputations (i), (ii), (iii), (v), (vi) and (xii) should be struck out.

8 For clarification, it is to be noted that on 6 September 1996, by consent, I made orders the effect of which was to "deconsolidate" the proceedings constituted by Mr Grant Smith being a plaintiff. He was granted leave to commence fresh proceedings in his own name which I am informed he did on 13 December 1996 in matter number 21327 of 1996.

9 Mr Smith however is a plaintiff against Mr Bhagat and others in matter number 20929 of 1994.

10 By Notice of Motion filed on 4 December 1997 the applicant plaintiffs seek to have the Defence struck out or alternatively, further and better particulars supplied; they seek to have the cross-claim struck out in whole or in part and consequential orders.

11 The matters raised in relation to the Defence cover, in effect, the same ground as was covered in my judgment delivered today in matters 16709 of 1991 and 20930 of 1994 in relation to comment and qualified privilege in particular.

12 The same defects to which I adverted in my judgment above referred to in relation to the particulars of comment and qualified privilege are applicable here and accordingly, I propose to order the defendants to provide full and proper particulars in response to requests numbered 1, 2 and 3 in the letter dated 21 October 1997 from Messrs Cowley Hearne to Mr Bhagat.

13 I add that I am reinforced in requiring formalised particulars particularly in relation to the defence of comment in the light of the concessions made by Mr Evatt at p 14 of the transcript of the hearing before me on 17 December 1997.

14 In respect of the particulars of Mitigation of Damages I will allow (in relation to disputed matters) particulars (ii), (iii) and (iv). I will strike out (v), (vi) and (vii) for the reasons stated in my earlier judgment in matter 16709/91.

15 As to contextual imputations: contextual imputations 9(a)(i) and (ii) are, by consent, struck out.

16 I strike out contextual imputation 9(a)(iv) on the Drummoyne principle.

17 As to contextual imputation 9(a)(vii) I strike this out as not differing in substance from the plaintiffs' second pleaded imputation.

18 As to contextual imputations 9(a)(ix) and (x), bearing in mind the principles stated in Drummoyne, I am not persuaded in these instances that they are incapable of being conveyed nor are bad in form and thus they shall go to the jury.

19 As to contextual imputation 9(a)(xi), objection is taken to "so conducted themselves". I can see no difference between that phrase and the use of the word "behaved" in the plaintiffs' imputation. Contextual imputation 9(a)(xi) will go to the jury.

20 As to contextual imputation 9(a)(xiii) I have given this much consideration. It adopts the language of the second of the plaintiffs' imputations. I am persuaded however that notwithstanding that device it does not differ in substance from it. This is a case where legitimately, in my view, recourse can be had to the matter complained of itself. The thrust of the matter is the suggestion of bribery in the context of a position taken by a large borrower. The essence, in my view, of contextual imputation 9(a)(xiii) is the same as that of the plaintiffs' imputation 5(b) and, accordingly, it will be struck out.

21 I turn now to the Cross-Claim. It was filed on 20 November 1997. The three defendants are the cross-claimants. The two plaintiffs' are the first and second cross-defendants respectively and Mr Grant Smith is the third cross-defendant.

22 The first cause of action pleaded in the cross-claim is in defamation arising from the publication alleged to have taken place in June 1993 of a letter which is appended to the cross-claim. As I read the cross-claim the two causes of action in defamation (the second arising from a publication in August 1994) are brought by Mr Bhagat only.

23 Whilst it is the second component of the cross-claim, namely, the cause of action for abuse of process pleaded in paragraph 5 that attracted attention during the course of submissions, the causes of action brought by the first cross-claimant only did not receive much attention. Certainly no attention was given to the fact that in relation to the first publication the first cross-claimant pleads fourteen imputations and in relation to the second matter complained of he pleads a mere eight. It was acknowledged, however, in the course of submissions, and very much in passing, that if the cross-claim or so much of it as is constituted by the two actions in defamation remains on the record there will be the inevitable interlocutory applications in regard to the imputations.

24 Insofar as I am not predisposed to strike out so much of the cross-claim as is constituted by the causes of action in defamation (the subject matters' coincidence with the plaintiffs' action is obvious), the cross-claimant will be ordered to file an Amended Cross-Claim that has incorporated in a legible form the text of the matters complained of. The file copy of the document lodged on 20 November 1997 has no annexures. Indeed, Mr Evatt conceded that the cross-defendants are entitled to a pleading in proper form at least in that regard and as I understood it, a concession was made that the cross-defendants are entitled, a fortiori given the number of imputations, to precise particulars as to which part or parts of the matters complained of give rise to such imputations. In any amended cross-claim those particulars are to be appended as such.

25 It appears to me that the real complaint in relation to the cross-claim is the pleading in paragraph 5 of a cause of action for abuse of process. The cross-claim was filed approximately 17 months after the decision of Studdert J (5 June 1996) in which his Honour declined for the reasons he stated to stay or strike out the plaintiffs' action for abuse of process (and for want of prosecution).

26 It is contended for the plaintiffs that this cross-claim is a device to canvass or cavil with the orders his Honour made on an interlocutory basis.

27 The orders his Honour made were interlocutory (any appeal to the Court of Appeal would have to be by leave) (s 101(2)(e) Supreme Court Act, 1970). Indeed, had his Honour made the orders sought they would still be on an interlocutory basis. I am not persuaded as was argued for the plaintiffs' that his Honour's orders constitute an issue estoppel. It is also clear that the pleading of the cross-claim covers a lot of material that does not appear to have been before Studdert J. I have not been persuaded that as a matter of principle that because a stay of proceeding on the grounds of abuse of process is not granted at an interlocutory stage, it follows that a final hearing on such a cause of action cannot take place (compare Goldsmith v Sperrings Limited (1977) 1 WLR 478)).

28 It was next argued by Mr Henskens for the plaintiff and Mr Caspersonn for Mr Smith (the third cross-defendant) that the cross-claim should be struck out, as I understand it, as unarguably unsustainable. Particular reference in this regard was made to the statement in paragraph 5(n) that the cross-defendants had "conspired" with one another to make false and exaggerated claims for financial loss. This is to be compared with the statement in paragraph 5(q) to the effect that the third cross-defendant's employment was terminated because he was in dispute with members of the Global Funds (as it was then called) Board. It was argued that given such a dispute as pleaded it is highly unlikely that there would be this "conspiracy" to abuse the process of the Court. This is to isolate from a rambling, shambolic recitation of factual material in the pleading (to which I will return) and elevate to it a foundation for striking it out on the basis referred to in circumstances where by reason of the pleading itself it is impossible to come to the view that no case can be made out. Despite the quality of the pleading (or lack of it), there is, in my view, material in it that precludes such a course being taken on that basis. It has to be acknowledged however that the point raised by counsel for the relevant parties exposes a potential, to say the least, inconsistency in the stand taken by the cross-claimants.

29 The more appropriate basis for dealing with the cross-claim is under SCR Pt 15 r 26 (1)(b).

30 The cross-defendants can legitimately claim, in my view, as to that component of the cross-claim that purports to plead the cause of action in abuse of process that it is a rhetorical recitation of complaint rather a more formal pleading as is desirable: for example, the use of such expressions as "basically ..." (5(b)); "the cross-defendants regarded the first and second cross-claimants as thorns in their side" (5(d)); the use of the word "conspired" in 5(n) without particulars of the matters that constitute the agreement going to establish the conspiracy amount to legitimate bases for complaint about the document as a pleading.

31 Shortly stated therefore, the cross-claim will be struck out on the basis that the causes of action pleaded in defamation are embarrassing, the pleading contains no attachments constituted by the publications complained of nor particulars as to the relevant passages of the matters complained of that give rise to the extraordinary number of imputations; and, secondly, the pleading of the cross-claim for abuse of process can only be viewed, as I have indicated, as a hopeless, rhetorical narrative which should be formalised in a sensible and proper way.

32 At this stage I certainly do not intend to strike out the cross-claim on the basis that Mr Smith, the third cross-defendant, is not a plaintiff in the proceedings. He is a plaintiff against Mr Bhagat in other proceedings, true it is, in which there is no cross-claim.

33 It is appropriate at this stage to remark that these proceedings and the accompanying proceedings in which judgments are being delivered today are unlikely to be heard in the twentieth century. Each of the proceedings is flawed in the various ways referred to in the judgments and the situation has been reached where nothing should be done about either consolidation or deconsolidation, making orders as the actions being heard together or otherwise, and the like, until, in each case, the litigation is clearly and irrevocably in order.

34 In the current application the plaintiffs and the third cross-defendant have succeeded and the order for costs will be framed accordingly.

35 The formal orders are:

1. Contextual imputations 9(a)(i), (ii), (iii), (v), (vi) and (xii) by consent, are struck out.

2. The defendants are to supply proper further and better particulars of the defence of comment and qualified privilege, in response to the plaintiffs' solicitors' letter of 21 October 1997 within 28 days.

3. Particulars (v), (vi) and (vii) of the particulars of Mitigation of Damages are struck out.

4. The defendants are to provide proper further and better particulars of particular (viii) of Mitigation of Damages, within 28 days.

5. Contextual imputations 9(a)(iv), (vii) and (xiii) are struck out.

6. Contextual imputations 9(a)(ix), (x) and (xi) will go to the jury.

7. The defendants have leave to file an Amended Defence within 28 days.

8. The cross-claim is struck out.

9. The cross-claimants have leave to file an Amended Cross-Claim in accordance with these reasons within 28 days.

10. The defendants and cross-claimants are to pay the costs of the plaintiff and the third cross-defendant.

11. At the expiry of 28 days, liberty to restore to the Defamation List on 3 days notice.

LAST UPDATED: 17/02/1999