Samsun Pty Ltd & Ors v Andrew Wily & Anor [2000] NSWSC 281

New South Wales Supreme Court

CITATION : Samsun Pty Ltd & Ors v Andrew Wily & Anor [2000] NSWSC 281 revised - 26/04/2000 CURRENT JURISDICTION: Common Law Division FILE NUMBER(S) : SC 20090/98 HEARING DATE(S) : 31/03/2000 JUDGMENT DATE : 7 April 2000

Samsun Pty Limited (1 Pl) Betanza Pty Limited (2 Pl) Gil McLachlan & Mark Giffin t/as Harvey World Travel Manly (3 Pl) McCarroll's (International) Travel World Pty Limited (4 Pl) Hamerline Pty Limited (5 Pl) PARTIES : S & R Travel Pty Limited (6 Pl) Derran Pty Limited (7 Pl) Coronet Court Pty Limited (8 Pl) Harvey World Travel Franchises Pty Limited (9 Pl) Andrew Wily (1 Def) Guy McKanna (2 Def) JUDGMENT OF : Kirby J

COUNSEL : T Blackburn/R Glasson (Pls) Ms L McCallum/Ms D R Sibtain (Defs) SOLICITORS : White & Associates (Pls) Henry Davis York (Defs) CATCHWORDS : Defamation - Imputations - Capacity to convey republication LEGISLATION CITED : Defamation Act, 1974 - s7A(2) CASES CITED : Slipper v BBC (1991) 1 QB 283 Fitzsimons v Duncan [1908] 2 IR 483 at 503 (KB) DECISION : Refer paras 41 and 42

THE SUPREME COURT Revised 26/4/2000 OF NEW SOUTH WALES COMMON LAW DIVISION

KIRBY J

Friday 7 April 2000

20090/98 - SAMSUN PTY LIMITED & ORS v ANDREW WILY & ANOR

JUDGMENT

HIS HONOUR:

The Publications 1 Mr Andrew Wily (the first defendant) and Mr Guy McKanna (the second defendant) are apparently partners in the insolvency firm, Armstrong Wily & Co. On or about 26 January 1998, they issued a press release in these terms: "ASIAN CRISIS CLOSES TOP TRAVEL COMPANY The Sydney city franchise of Harvey World Travel was placed in the hands of a voluntary administrator this week. Mr Andrew Wily, partner at insolvency firm Armstrong Wily & Co, was appointed voluntary administrator of Potter World Travel Pty Ltd, which held the Sydney CBD franchise of Harvey World Travel. The travel operator was a medium-sized operation with a mixture of commercial and retail accounts. Mr Wily said today: 'The financial problems of the company have been attributed by its directors to the Asian economic crisis and the associated decline in the foreign exchange value of the Australian dollar. 'The recent decline in the purchasing power overseas of the $A has led many people to postpone their overseas travel as it is now more expensive. This has led to a sharp drop in revenue for the company. And the Asian economic crisis has meant fewer visitors to and from Asia, again(st) undermining the business. 'The travel industry operates on extremely tight margins and any fluctuations in their business dramatically effects profit margins. 'There is little doubt that the travel industry is suffering at the moment and I feel there will be further fallouts.' Ironically, the company will not have far to go to lodge its voluntary administration papers as it is located in the Australian Securities Commission building at the corner of Pitt and Market Streets, Sydney. Note : Harvey World Travel are a substantial franchise operation and the administration of this franchise has no effect on the overall operations. Further media information: Andrew Wily Guy McKanna (02) 9362-3235 (b) Capital" 2 The plaintiffs assert that, by issuing a press release, the defendants either authorised its republication, or its republication was the natural and probable consequence of the initial publication (para 14). 3 A number of newspapers used the press release as the basis for a story. Each news items has been identified in the Statement of Claim as a publication for which the defendants are responsible. 4 In the Daily Telegraph of 25 January 1998, the following appeared: " Travel agents at risk A leading insolvency expert yesterday warned that the Asian financial crisis may spark a rise in travel industry bankruptcies. Harvey World Travel's Sydney CBD franchise has been forced into voluntary administration by the crisis. Insolvency firm Armstrong Wily & Co's Andrew Wily says: 'There is little doubt that the travel industry is suffering at the moment and I feel there will be further fallouts.' Mr Wily, who has been appointed voluntary administrator, says the CBD closure will not affect the chain's overall operations." 5 This was the second matter complained of. 6 The Sydney Morning Herald published an article on 27 January 1998, which was in these terms: " Asian crisis hits travel agency franchise The Asian currency crisis has claimed another victim with the Sydney city franchise of Harvey World Travel placed in the hands of a voluntary administrator this week. A partner at insolvency firm Armstrong Wily & Co, Andrew Wily, was appointed voluntary administrator of Potter World Travel Pty Ltd, which held the Sydney CBD franchise of Harvey World Travel. Mr Wily said the directors of the company had blamed its problems on the Asian currency crisis and the fall in the exchange value of the Australian dollar. 'The recent decline in the purchasing power overseas of the Australian dollar has led many people to postpone their overseas travel as it is now more expensive' Mr Wily said. 'This has led to a sharp drop in revenue for the company, and the Asian economic crisis has meant fewer visitors to and from Asia, again undermining the business.' He said the travel industry was suffering now, and believed there would be further casualties." 7 This was the third matter complained of. 8 The Chronicle published a very similar article on 27 January 1998. It opened with these words: " Travel industry suffers SYDNEY --- The Asian currency crisis has claimed another victim with the Sydney city franchise of Harvey World Travel placed in the hands of a voluntary administrator. Partner at insolvency firm Armstrong Wily & Co, Andrew Wily, was appointed voluntary administrator of Potter World Travel Pty Ltd, which held the Sydney CBD franchise of Harvey World Travel. …" 9 This was the fourth matter complained of. 10 Finally, the Australian published an article on 27 January 1998, which opened with these words: " Crisis sending travel agents to the wall By Fiona Kennedy and Matt Robbins The Asian economic crisis was squeezing travel agents' margins to the point where some could collapse, the administrator of a prominent Sydney business said last night. Insolvency expert Andrew Wily, who last week became voluntary administrator of a Sydney CBD franchise for Harvey World Travel, predicted 'further fallouts' in an industry already constricted by tight profit margins. Mr Wily issued his warning as another travel company cautioned customers against 'mischievous' claims of surcharges linked to the plunge of the Australian dollar. Flight Centre marketing manager Keith Stanley said several other agencies were promising exclusive immunity against surcharges when, in fact, 'any person who has fully paid for future travel automatically has full protection against surcharges.' Mr Wily said the Sydney franchise, Potter World Travel, started failing about November and collapsed 'very quickly'. 'The financial problems of the company have been attributed by its directors to the Asian economic crisis and the associated decline in the foreign exchange value of the Australian dollar' he said. 'The travel industry operates on extremely tight margins and any fluctuations in their business dramatically affects profit margins. 'There is little doubt that the travel industry is suffering at the moment and I feel there will be further fallouts. 'There will probably be a few (agencies) that will find it quite difficult. Whether they can survive is a matter of how quickly they can reduce other costs.'" 11 After additional comment concerning the tourist industry, and the possibility of assistance from Government, the article concluded with these words: "Mr Wily said the medium-sized operation Potter World Travel, which employed about 10 staff and had a mixed commercial and retail clientele, was hit by falls in both in-bound Asian tourism and Australian overseas travel. A tourism analyst forecast the Asian downturn would this year cause a one-third decline in Asian in-bound tourist number(s). Gold Coast based Alan Midwood said a 33 per cent drop in visitors would translate into a total decline of about 9 per cent or 380,000 in overseas visitors, with a resultant loss in export earnings of $1.5 billion and 24,000 jobs. Declines of up to 85 per cent in numbers from the worst-hit sources of Indonesia, South Korea and Thailand could be expected, Mr Midwood said." 12 This was the fifth matter complained of.