New South Wales Supreme Court CITATION : Harvey v John Fairfax Publications Pty Ltd [2000] NSWSC 337 CURRENT JURISDICTION: Civil FILE NUMBER(S) : SC 20002/98 HEARING DATE(S) : 14 April 2000 JUDGMENT DATE : 20 April 2000 PARTIES : John Harvey v John Fairfax Publications Pty Ltd JUDGMENT OF : Bell J COUNSEL : Mr McClintock SC (Plaintiff) Mr Blackburn (Defendant) SOLICITORS : Michell Sillar Australian & International Attorneys (Plaintiff) Freehill Hollingdale & Page (Defendant) CATCHWORDS : Defamation - Capacity of the matter complained of to carry imputations pleaded LEGISLATION CITED : Defamation Act 1974 (NSW) Singleton v Ffrench (1986) 5 NSWLR 425 Farquhar v Bottom [1980] 2 NSWLR 380 Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 CASES CITED : Lewis v Daily Telegraph Ltd [1964] AC 234 Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293 Singleton v John Fairfax and Sons Ltd (Unreported, NSWSC, Hunt J, 20 February 1980) Bishop v Latimer (1861) 4 L. T. (N. S.) 775 Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663 DECISION : (i) Imputations 3(b), 3(c) & 3(d) will go to the jury; (ii) Imputations 3(a) & 3(e) are struck out; (iii) The plaintiff is granted leave to replead imputations 3(a) & 3(e); (iv) Each party to pay his/its own costs. IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST Thursday 20th April 2000 BELL J JOHN HARVEY v JOHN FAIRFAX PUBLICATIONS PTY LTD ACN OO3 357 720 JUDGMENT (Imputations Statement of Claim 2 January 1998) 1 The plaintiff, Mr John Harvey, brings proceedings in defamation against the defendant, John Fairfax Publications Pty Ltd, arising out of the publication of an article in the Sydney Morning Herald on 20 September 1997. A transcription of the article is Schedule A to the Statement of Claim. The matter complained of is said to convey five imputations defamatory of the plaintiff. They are set out in paragraph 3, subparagraphs (a) - (e), of the Statement of Claim. 2 The defendant objects to each of the imputations. In each instance it submits that the matter complained of is not reasonably capable of carrying the imputation pleaded. Additionally, as to imputations (a), (c) and (e), objection is taken as to form. 3 Imputation 3(a) is pleaded in these terms: "The plaintiff, in his operation of a farm, placed public health at risk in so serious a manner as to warrant being sued by the local council" Commencing at line 50 of Schedule A the following appears: "Ian Lumsden, general manager of the local Yass Shire Council says that Harvey was running about 1000 turkeys in a paddock adjacent to the hotel and 'it became a health issue because the residents got upset about the feathers blowing everywhere and turkey s… getting into the creek'. The council took him to court and 'we must have won because the turkeys disappeared'". 4 Mr Blackburn, who appeared on behalf of the defendant, objected both as to the form of the imputation and as to the capacity of the article to convey it. It is convenient to deal firstly with the objection as to form. Mr Blackburn submitted that the words in paragraph 3(a) "as to warrant him being sued by the local council" do not convey the seriousness of the threat to public health and serve merely to obfuscate. The imputation as framed pleads the creation of a risk to public health in a manner described as serious. The only measure of the gravity of that risk is the assertion that it warranted the plaintiff being sued by the local council. Mr Blackburn noted that councils may take proceedings with respect to relatively trivial matters. 5 If the terms of an imputation are ambiguous such as to admit of confusion as to its meaning at trial it should be struck out on the ground that it is embarrassing; Singleton v Ffrench (1986) 5 NSWLR 425. I do not see that the assertion that the local council commenced unidentified proceedings against the plaintiff in connection with his use of a farm to run turkeys bears on the question of the seriousness or otherwise of any risk to public health thereby created by him. I accept the force of Mr Blackburn's submission that, as framed, imputation 3 (a) is uncertain of meaning. Accordingly, I propose to strike it out. 6 Mr Blackburn also objected to imputation 3(a) upon the basis that the article was not reasonably capable of conveying an imputation that the plaintiff seriously put public health at risk. The high point (in terms of any suggestion of a risk to public health) was the assertion that there were turkey feathers blowing about and turkey droppings making their way into the creek. 7 I am concerned with whether the matter complained of is capable of conveying to the ordinary reasonable reader the imputation pleaded (or one not different in substance from it); Farquhar v Bottom [1980] 2 NSWLR 380 at 385; Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 at 164. The test is one of reasonableness. I note the ordinary reasonable reader is a person of fair average intelligence who is not perverse, morbid or looking for scandal. Equally he or she is a person whose capacity for implication is greater than that of the lawyer; Lewis v Daily Telegraph Ltd [1964] AC 234. 8 It seems to me that the material appearing at lines 50 - 55 of Schedule A is reasonably capable of conveying that the plaintiff by his operation of a farm (on which 1,000 turkeys were run) placed public health at risk and that the local council in consequence of that risk commenced proceedings in court against the plaintiff. 9 As I have noted I propose to strike out this imputation but I will give leave to the plaintiff to replead it. 10 Imputation 3(b) is pleaded in these terms: "That the plaintiff had so seriously mismanaged two companies of which he was a director as to make them insolvent". 11 At line 21 of Schedule A the following passage appears: "John Thomas Harvey… must be wondering whether there is a curse attached to the Anitra-May after two of the companies of which he was a director went into liquidation and the third became embroiled in an ugly legal dispute." The balance of the article gives some detail concerning a company, International Sports Services Pty Ltd ("ISS") which is said to be owned by the plaintiff and two of his friends. ISS is described as being in liquidation with debts of more than $250,000 and no realisable assets that the liquidator "has yet been able to find". There is also reference to a company called Elle Racing Pty Ltd of which the plaintiff was a director. A project associated with that company is described in the article as having fallen in a heap. It is not clear whether Elle Racing Pty Ltd is in liquidation. 12 Mr Blackburn submitted that the mere statement that two companies of which the plaintiff was a director had gone into liquidation is not reasonably capable of carrying the imputation that the plaintiff had so seriously mismanaged each as to cause it to become insolvent. He noted that there may be reasons unconnected with mismanagement by directors which lead to companies being placed in liquidation. 13 In some cases the mere assertion that an individual has been a director of two companies which have been placed in liquidation may not be capable of conveying any imputation as to mismanagement. However, the statement at line 21 is to be read in the context of the article as a whole. The article includes (i) the statement that the plaintiff had wheedled more than $2 million of taxpayers moneys from the WA Government in connection with a sports promotion that ultimately flopped, (ii) the plaintiff was the man entitled to take the credit for the Eastern Creek raceway fiasco which devoured $90 million and damaged the Premier's reputation for good management (iii) the plaintiff's involvement with ISS and (iv) the plaintiff's involvement with Elle Racing Pty Ltd. I consider that matter complained of is reasonably capable of carrying the imputation pleaded in paragraph 3(b). 14 Imputation 3(c) is pleaded in these terms: "That the plaintiff had behaved in so bad a manner as an employee of the NSW Premier Nick Greiner, as to warrant his peremptory dismissal by Mr Greiner . 15 The article stated that in 1987 the plaintiff was seconded to the staff of the NSW leader, Nick Greiner, to work on "statex", a dress rehearsal for the following year's state election. It went on to quote Ken Hooper, Mr Greiner's press secretary, describing the plaintiff as person who performed well as "an advance man" bringing the campaign into the electronic age by the use of mobile phones, faxes and other gadgetry. Following the election the plaintiff was appointed as Mr Griener's principal private secretary. The article continued: "Hooper and others on Greiner's staff say it was 'the worst decision we ever made'". After describing the plaintiff's role in the Eastern Creek Raceway project, the following appeared: "Eventually, things came to a climax. Hooper was sitting in Greiner's office one day when Harvey burst in and told his boss: 'He's got to go, Nick. Either he [pointing at Hooper] goes or I do'. Greiner, who had been writing at his desk, looked up and said: 'John, would you collect your things on the way out and leave the car keys on the desk.' Harvey turned white, spun on his heal, and walked out." 16 Mr Blackburn submitted that only a person avid for scandal would draw the imputation pleaded in paragraph 3(c). The article does not suggest that the plaintiff engaged in any reprehensible behaviour such as to cause him to be peremptorily dismissed. The account given in the article is that the plaintiff gave an ultimatum to the Premier. Taken at its highest, so Mr Blackburn submitted, the reasonable reader would infer that, when confronted by the choice, the Premier selected to retain Mr Hooper. I should note that Mr Blackburn did not concede that the material complained of was reasonably capable of conveying that the plaintiff had been dismissed from his employment. I do not accept this submission. The words attributed to the Premier at lines 93-94 are in my view capable of conveying that the plaintiff's employment had been terminated in a summary way. 17 Mr McClintock submitted that the account set out in the article (of the plaintiff giving a form of ultimatum to the Premier) describes the very sort of insubordinate, or bad, behaviour taken up by the terms of the imputation. 18 I consider that article is reasonably capable of carrying the imputation pleaded. 19 Mr Blackburn also objected to the form of this imputation. He submitted that the use of the words "peremptory dismissal" (which he characterised as a quasi-legal expression) were confusing. Some jurors may have knowledge of the sort of serious misconduct which might in law justify peremptory dismissal without notice. I do not see the use of the words "peremptory dismissal" as an invitation to the jury to import such knowledge as they may have of employment law. The same objection might be taken had the pleader used the words "summary dismissal" or "dismissed without notice". 20 Paragraph 3(d) pleads an imputation in these terms: "That the plaintiff had defrauded a company of which he was a director of $170,000" The material said to give rise to this imputation commences around line 138 and continues to line 163 of Schedule A. This is that portion of the article concerning the company ISS. It is said that at one stage ISS had close to $1 million in the bank. A few months later ISS is described as having hit a cash crisis. At the date of publication ISS was said to be in liquidation with debts in excess of $250,000 and no realisable assets. The article continued: "Harvey's examination, instigated by the liquidator, attempted to get to the bottom of one key dispute in the fall of ISS - Harvey's withdrawal from the company, in June 1995, of two cheques totalling $170,000. Those cheques were paid to Ken Jarrett and a company controlled by Michael Sissian and were the price Harvey paid for his one third share in the Anitra-May. Harvey told the court that this was either money the company owed him, or an advance - and that his two co-directors were well aware of what he intended to do with it. This, Michael at least denies; he told the liquidator that he signed a blank cheque (ISS cheques require two directors' signatures) and had no idea the money was to be spent on a yacht. The liquidator is still trying to decide what, if anything, should be done." 21 Mr Blackburn submits that the article is reasonably capable of conveying no more than suspicion that the plaintiff had defrauded ISS. In this respect he referred me to Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293 at 301. In that case the Court was dealing with the inferences which an ordinary reasonable reader might draw from a statement in a newspaper report that a person has been charged with a criminal offence. Such a statement is not capable of supporting an inference of guilt. 22 The terms of the matter complained of in the present case are in my view capable of carrying an imputation that the plaintiff was guilty of defrauding ISS. There is a statement that the plaintiff withdrew two cheques from ISS totalling $170,000 and that this sum was applied by him to the purchase of the yacht, the Anitra-May. This is allied to a statement attributed to a fellow director of ISS to the effect that he had signed a blank cheque not knowing that company funds were to be applied to the benefit of the plaintiff in the way in which they were. In this respect I consider the present case to be factually very different to that with which the Court was concerned in Mirror Newspapers v Harrison. 23 There was no complaint as to the form of paragraph 3(d). This imputation should go to the jury. 24 Paragraph 3(e) pleads an imputation in these terms: "That the plaintiff was a dishonest businessman who refused to pay his just debts". The material relied on in support of this imputation is to be found at lines 85 - 90 of Schedule A: "The turkeys, too, returned to rear their ugly heads. Hooper says that Harvey was in continual dispute with local tradespeople in the Yass area, and on one occasion a supplier obtained a garnish on his wages over some unpaid-for turkey feed. He had all sorts of excuses - the feed was not delivered; it was wet; it was full of weevils; he wasn't going to pay - but at the end of the day we convinced him it wouldn't look too good if it got into the media, and it was quietly settled." 25 In addition to the material quoted above Mr McClintock referred me to the material contained in Schedule A at lines 199 and following as supporting the imputation pleaded in paragraph 3(e). 26 The first complaint made by Mr Blackburn concerning imputation 3(e) is that a general imputation was being "squeezed out of a specific incident". The general imputation that in his conduct as a businessman the plaintiff dishonestly refused to pay his just debts could not be carried by proof that on one occasion he had failed to do so. Mr Blackburn referred me to the decision of Hunt J (as he then was) in Singleton v John Fairfax and Sons Ltd (Unreported NSWSC, 20 February 1980) at p.6 citing Bishop v Latimer (1861) 4 L.T. (N.S.) 775. 27 The portion of Singleton to which my attention was directed was concerned with whether an imputation pleaded in specific terms, being an instance of a general allegation separately pleaded, offends the requirements of Part 67 Rule 11(3) of the Supreme Court Rules. In the circumstances of that case His Honour declined to strike out the general imputation pleaded upon material which contained an allegation concerning a single instance of the subject conduct. I note that his Honour did observe (at p. 7): "In many cases, the allegation in the matter complained of that the plaintiff was guilty of misconduct on a particular occasion will not support an imputation alleged in general terms". 28 The account of the incident involving the non-payment of the purchase price of the turkey feed contained at lines 85 - 90 needs to be read in the context of the article as a whole. When viewed in this way I consider that it is capable of conveying to the ordinary reasonable reader the imputation that the plaintiff was a person who in his business dealings dishonestly refused to pay his just debts. 29 Mr Blackburn also objected to imputation 3(e) as being bad in form. He submitted that it contained two imputations rolled up in to one; (i) that the plaintiff is a dishonest businessman & (ii) the plaintiff refused to pay his just debts. He referred me to the observations of Hunt J in Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663 at 677 in this regard. 30 I see the force to this objection to imputation 3(e). In the way the imputation is framed it goes beyond an assertion that the plaintiff, in his conduct as a businessman, dishonestly refused to pay his just debts. The charge that he is a dishonest businessman is unqualified. For this reason I propose to strike out imputation 3(e) and give the plaintiff leave to replead it. ORDERS: (i) Imputation 3(b), 3(c), & 3(d) will go to the jury. (ii) Imputations 3(a) & 3(e) are struck out. (iii) The plaintiff is granted leave to replead imputations 3(a) & 3(e). (iv) Each party to pay his/its own costs. ********** Last Modified: 05/07/2001 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.