Ell v Milne (No 5) [2013] NSWSC 246

Supreme Court New South Wales

Medium Neutral Citation: Ell v Milne (No 5) [2013] NSWSC 246 Hearing dates: 25 March 2013 Decision date: 27 March 2013 Before: McCallum J Decision: Plaintiff's imputations (b), (c) and (f) found to be conveyed by the matter complained of; plaintiff's imputations (a), (d) and (e) found not to be conveyed by the matter complained of; defendant's contextual imputation found to be conveyed by the matter complained of. Catchwords: DEFAMATION - imputations - whether conveyed by matter complained of. Legislation Cited: Defamation Act 2005 Cases Cited: Drummoyne Municipal Council v ABC (1990) 21 NSWLR 135 Lewis v Daily Telegraph Ltd [1963], 2 All ER 151; [1964] AC 234 Category: Principal judgment Parties: William Robert Ell (plaintiff) Katie Milne (defendant) Representation: Counsel: T Tobin QC, B Kelleher (plaintiff) T Molomby SC, R Rasmussen (defendant) Solicitors: Anthony Smith Solicitor (plaintiff) NLS Law Pty Ltd (defendant) File Number(s): 2010/417226 Publication restriction: None

Judgment 1HER HONOUR: This is an action for defamation brought by a property developer, Mr William Robert Ell (known as Bob Ell), against Ms Katie Milne, who at the time of publication was a councillor on Tweed Shire Council. The action arises out of an email headed "letter to the editor" sent by Ms Milne to a number of newspapers and special interest groups. 2The trial of the action commenced before me without a jury last Monday, 25 March 2013. Although the extent of publication is in issue, Ms Milne accepts that at least some of the alleged recipients opened her email. In that circumstance, with the consent of both parties, I determined to give rulings as to whether the imputations relied upon by Mr Ell are conveyed by the matter complained of before proceeding to deal with the defences raised and any issue of damages. One of the defences raised by Ms Milne is the defence of contextual truth under s 26 of the Defamation Act 2005. The parties agreed that I should determine whether the contextual imputation is conveyed at the same time. 3The matter complained of is in the following terms: Letter to the editor From Clr Milne Re: Cobaki and Kings Forest Putting the Hard Word on the State Govt I am calling on the community to demand the State Government uphold the request for an independent expert review for Kings Forest and Cobaki Lakes, despite this amendment, passed at the February Council meeting, Being voted down at the March meeting. The State govt must look closely at the peculiar outcomes emanating from this Council. In a strange twist a similar motion subsequently proposed was also voted down but this time Clr Skinner who supported the original amendment but then rescinded it, changed sides again to support the new amendment. If Clr van Lieshout, who supported the original amendment, would have supported this second amendment, and not also changed sides, this second amendment would have gone through. The State Govt must also keeping mind that Cls Polglass and Clr Youngblutt received massive donations from this developer who donated $80,000 in the 2004 election campaign to the so called Balance Team. There are serious ethical questions about either of these Councillors voting on these developments, despite Clr Youngblutt not being elected for that Council. The entire Council was sacked largely due to the siphoning of such developer funds through this Tweed Directions campaign. It would have been a very different vote for these two mini cities if Clr Polglase and Youngblutt had removed themselves from the vote as called for by the community. Instead they relied on an extremely questionable loophole that excused them from declaring any conflict after 4 years: I ask in what other sphere are people excused from pay back obligations after 4 years for such enormous sums involved. It would also have been a very different oucome even only if Clr Holdom who ran a community campaign had voted how her have numerously lamented they expect her too. The developer Mr Bob Ell has made massive donations to both the State and Federal Labour and Liberal govts as well as the last Council. The McGurk murder also raises serious concerns. According to Sydney newspapers Mr Bob Ell supplied $100,000 bail when McGurk was accused of firebombings and assault though this was later dropped. McGurk was working for Mr Ell at the time of his murder. Even further scandal in this whole process has erupted with the unearthing by Senator Ian Cohen of advice from the Dept of Environment in 2006 that was suppressed by then Planning Minister Frank Sartor, that the entire southern and north eastern side of Kings Forest should be preserved as environmental protection zoning. Minister Sartor was later removed from his ministry but is now reinstated as Environment Minister thanks to Premier Keneally. The Tweed community has lost faith in both the local and State Government. Council is yet to be advised by the State Govt of the outcome of the January meeting where I did manage to get a motion passed to request an independent organisation undertake a full and thorough community consultation process on these developments. The only way to redeem this situation with any integrity is through a truly independent review by a reputable organisation such as the Sydney University Institute of Sustainable Futures. Please write to the Premier and Planning Minister Tony Kelly now if you want to see real consultation on these subdivisions, improved sustainability and environmental outcomes, and better social planning for our future. Regards, Clr Katie Milne Carool 4The imputations relied upon by Mr Ell (in paragraph 4 of the second further amended statement of claim) are as follows: (a) That he was implicated by his own wrongful conduct in the murder of Mr McGurk; (b) That he had a scandalous association with the murdered man Mr McGurk; (c) That he paid $100,000 bail for a person who was suspected by police of serious crimes of violence in order to advance his business interests; (d) That he paid $100,000 bail for a person who was suspected by the police of serious crimes of violence because the plaintiff approved the use of violence in his business ventures; (e) That he paid $100,000 bail for services rendered by Mr McGurk as a standover man; (f) That he conducted his business with regard to property development by employing a person with a reputation for violence. 5For the following reasons, I have concluded that imputations (b), (c) and (f) are conveyed by the matter complained of, while imputations (a), (d) and (e) are not. I have further concluded that Ms Milne's contextual imputation is conveyed by the matter complained of. 6The principal focus of the letter is the call for an independent expert review of two development proposals evidently propounded by Mr Ell. The letter opens by explaining that an "amendment" (presumably an amendment to an existing motion before the Council) calling for such an inquiry was initially passed by the Council but was subsequently rescinded. Against that background, Ms Milne openly appeals to the community to demand that the State government conduct the review. 7The call for such an inquiry is sought to be sustained by reference to a series of matters described variously as "peculiar"; "strange"; raising "serious concerns" and amounting to "scandal". All relate directly or indirectly to Mr Ell or the treatment of his development proposals 8The first matter instanced as warranting inquiry is the "peculiar outcomes" emanating from the Council. Specifically, individual councillors are identified as having "changed sides" when voting at different times on the amendment concerning the request for an independent review. Whilst there is some confusion in the letter between voting on the amendment and voting on the two development proposals, the overwhelming impression arising from that part of the letter is that some of the councillors were in a position of conflict of interest, and ought not to have voted, since they had received donations to their electoral campaigns from Mr Ell. It may be noted that Mr Ell has not sued on any defamatory imputation alleged to arise from those parts of the matter complained of. The propriety of Mr Ell's political donations is the issue picked up by Ms Milne's contextual truth defence. 9The second matter instanced as warranting inquiry is "the McGurk murder". All of the imputations relied upon by Mr Ell arise from that part of the matter complained of. The critical passage is short and, to a degree, Delphic: The McGurk murder also raises serious concerns. According to Sydney newspapers Mr Bob Ell supplied $100,000 bail when McGurk was accused of firebombings and assault though this was later dropped. McGurk was working for Mr Ell at the time of his murder. 10Whilst it is of course not relevant for present purposes, it is difficult to know what meaning Ms Milne intended by those remarks. Mr Molomby SC, who appears for Ms Milne, submitted that the import of the remarks is to question Mr Ell's judgment. Regrettably for Ms Milne, if that was the intention, it could have been more clearly expressed. 11In any event, it is trite to observe that the author's subjective intention is irrelevant in determining the meaning of the words for the purpose of an action in defamation. The test is what the words convey to an ordinary, reasonable reader. That assessment is to be undertaken in the context of the matter complained of taken as a whole. The principles are well-known and need not be repeated here: cf Lewis v Daily Telegraph Ltd [1963], 2 All ER 151; [1964] AC 234 at 258-260 per Lord Reid. 12The third matter instanced as warranting inquiry, introduced with the description of being "even further scandal", is the alleged suppression by the then Planning Minister of advice that the entire area of the proposed developments be preserved as "environmental protection zoning". 13The plaintiff's imputations must be considered in that context. I accept, as submitted by Mr Tobin QC, on behalf of the Mr Ell, that the reader would take it from that context that the "serious concerns" raised by the McGurk murder and the "even further scandal" which erupted with the unearthing of the suppressed advice to the Planning Minister relate to Mr Ell's conduct. However, I do not think that the ordinary, reasonable reader would understand the letter to mean that Mr Ell was implicated by any wrongful conduct on his own part in the murder of Mr McGurk. (imputation (a)). Although the relevant passage begins with specific reference to "the McGurk murder" as the source of serious concerns, the only conduct attributed to Mr Ell in that passage is his provision of surety for Mr McGurk's bail and the allegation that Mr McGurk was working for Mr Ell at the time of the murder. Neither is wrongful conduct in any sense. Whilst the language of the letter might have been more carefully chosen, the proposition that Mr Ell was implicated in the murder itself could in my view only be derived from a forced or strained reading of the matter complained of. 14In my view, however, the letter does convey the meaning that Mr Ell had a scandalous association with the murdered man Mr McGurk. There can be little doubt that the letter speaks of an association between the two men, evidenced by the assertions that Mr McGurk was working for Mr Ell and that Mr Ell consented to be a surety in a substantial sum for the grant of bail. The only real matter of contest in determining whether imputation (b) is conveyed is whether the letter carries the sense that the association was a scandalous one. 15I should record in that context that Ms Milne has not at any point challenged imputation (b) as being bad in form (see T18.33). Accordingly, although I was troubled at the hearing as to the meaning of the phrase "scandalous relationship", it would not be appropriate for me to rule adversely to the plaintiff on the basis of any such concern. It is appropriate to accept, as submitted by Mr Tobin QC, that any imprecision in the form of the imputations is a reflection of the imprecise language of the matter complained of, a dictate of pleading recognised in the decision of the Court of Appeal in Drummoyne Municipal Council v ABC (1990) 21 NSWLR 135. I have accordingly proceeded on the basis contended for by Mr Tobin that a scandalous association is one which causes scandal to the public, which in turn would mean an association which the public would regard as unfitting, improper or in some way reflecting poorly on the good name of the person in question. 16On that premise, in my assessment, that is the characterisation put on Mr Ell's association with Mr McGurk in the matter complained of. As already noted, the letter instances a series of matters said to warrant a community demand for an independent expert review into Mr Ell's two development proposals. The matters cited are the peculiar outcomes emanating from Tweed Shire Council as a result of the voting practices of councillors who have received massive donations from Mr Ell; the "serious concerns" raised by the McGurk murder and "even further scandal" said to have erupted with the revelation that advice in favour of protecting the entire zone was suppressed by the Planning Minister of the day. The characterisation of that matter as "even further scandal" imports the clear indication that Mr Ell's association with Mr McGurk should also be regarded as part of the scandal addressed in the letter. 17Imputations (c) and (d) focus on Mr Ell's purpose and reason (respectively) for having provided surety for Mr McGurk's bail. The imputations assert that Mr Ell "paid $100,000 bail", which would not be a lawyer's understanding of the role of a surety, but no point was taken on that basis. Allowing the ordinary reader a measure of loose thinking, I do not think anything turns on that. 18Mr Tobin frankly acknowledged that those imputations only arise by implication. The letter does not purport to identify, in terms, Mr Ell's object in facilitating the grant of bail to Mr McGurk or his reason for deciding to do so. Specifically, the letter does not assert in terms that it was in Mr Ell's business interests to have Mr McGurk granted bail. However, it does identify the fact that, at the time of his murder, Mr McGurk was working for Mr Ell. In the absence of any other purpose identified for Mr Ell's being prepared to provide surety in such a substantial sum, I think the inference would readily be drawn by the ordinary reasonable reader that his purpose was to secure Mr McGurk's liberty so as to enable him to work for Mr Ell. That is the logical and most likely suggestion to emerge from the scant detail provided. Separately, however, it will be necessary to give careful consideration to the issue whether that imputation is defamatory, as to which the plaintiff has not been heard. 19Imputation (d) is in a different position. It may be acknowledged that the letter identifies allegations of violence against Mr McGurk (in the reference to the criminal charges against him, later dropped). In my view, however, the leap from those allegations against Mr McGurk to the proposition that a man for whom he worked approved the use of violence in his own business ventures is too strained, and one which would not be made by the ordinary reasonable reader. 20Imputations (e) and (f) are pleaded as arising both in the ordinary and natural meaning of the matter complained of and, alternatively, as innuendos conveyed to any person who knew the fact that Mr McGurk had a reputation in the community as a standover man. I do not think either arises on the ordinary meaning of the publication. 21The alternative pleading of true innuendo appears in paragraph 5 of the second further amended statement of claim filed 22 February 2013, as follows: If it is held that imputations (e) or (f) do not arise in the natural and ordinary meaning of the matter complained of, each can arise as a true innuendo by reason of the following facts and matters known to the recipients of the publication of the matter complained of: (a) Mr McGurk had a reputation in the community as a standover man. 22In her defence, Ms Milne has not traversed that paragraph of the plaintiff's claim. At the outset of the hearing, Mr Molomby confirmed that the existence of the extrinsic fact is admitted by Ms Milne and, further, that she admits that the extrinsic fact was known to recipients of the publication. Separately, there is a dispute as to who were the recipients of the publication but the tenor of the admission was to the effect that, whoever they may be, the extrinsic fact was known to them. 23In his closing submissions as to whether those two imputations are conveyed as true innuendoes, however, Mr Molomby raised a discrete point of some subtlety. In order to explain the point, it is necessary to begin with well-established principle. 24A publication is defamatory in what is referred to as its "natural and ordinary meaning" if a defamatory meaning is conveyed by the words used, including any inferences and conclusions which the ordinary, reasonable reader would draw from the words used. It may in addition have a further or additional defamatory meaning not conveyed by the words alone but lent to them by the reader's knowledge of additional facts not stated in the publication itself. Such facts are often referred to as "extrinsic facts" because they are extrinsic to the publication. For example, the statement that a barrister refused to accept a brief to appear for a man because the barrister disapproved of the conduct with which the man was charged may not be regarded as defamatory by an ordinary reader. However, if that statement were made to a person who knew the extrinsic fact that to refuse a brief on that basis would be a breach of the rules of the bar, it would be understood by that reader to accuse the barrister of unprofessional conduct. 25It is well-established that an innuendo cannot be based on an erroneous belief as to the existence of a fact: Mirror Newspapers v World Hosts Pty Ltd (1979) 141 CLR 632 at 642 per Mason and Jacobs JJ; Gibbs and Stephen JJ agreeing at 635. Liability for an innuendo can only arise where the additional meaning is the product of reading the words published in conjunction with knowledge of a fact. 26Against those principles, Mr Molomby submitted that the extrinsic "fact" in the present case is not a fact capable of sustaining a true innuendo, since a reputation amounts to no more than the belief others hold as to a person, and may not in fact reflect the true character of the person. I do not accept that the existence of a reputation is incapable of being an extrinsic fact. However, a corollary of the submission was to reveal a difficulty with imputation (e). That imputation is that Mr Ell paid $100,000 bail for services rendered by Mr McGurk as a standover man. The words of the matter complained of, read in conjunction with the extrinsic fact, could rise no higher than to say that the surety was provided for services rendered by a man widely believed to be a standover man. That may arguably be a separate defamatory meaning, questioning Mr Ell's good judgment, but it is not the meaning pleaded. 27Further, in my view the imputation stretches too far for a different reason. I consider that the ordinary reasonable reader would understand bail to require only the conditional "payment" or deposit of funds, lost only in the event of the person's failing to appear in court when required. That is the sense conveyed by the words of the letter that Mr Ell was reported to have "supplied bail". The sting of imputation (e) strains those words in asserting the making of a payment for services. I do not think the ordinary reasonable reader would understand the matter complained of to say that Mr Ell had paid over $100,000 which could not be recovered by him, but that is the sense of the imputation. 28As to imputation (f), I think Mr Molomby's argument misconceives the sting of the imputation, which rests squarely on the existence of the reputation and is not undermined by the fact that it may not reflect the true character of the late Mr McGurk. The imputation is that Mr Ell conducted his business with regard to property development by employing a person with a reputation for violence. The sting of the imputation lies in the use of fear as a weapon. The existence of the reputation or, as Mr Molomby put it, the widely held belief, is the relevant extrinsic fact. To a person who knew Mr McGurk had a reputation for violence, the statement that he worked for Mr Ell conveyed the meaning that Mr Ell employed a man with a reputation for violence. The proposition that he did so as a method of conducting the business of a property developer is an inference readily drawn from the letter, having regard to its overall tenor of identifying concerns about Mr Ell's methods of secured approval for his development proposals. I am satisfied that imputation (f) is conveyed as a true innuendo. 29It remains to consider the contextual imputation, which is: that as a developer [Mr Ell] has attempted to buy the favours of state government and the local council by making large donations to political parties and election campaigns. 30Mr Tobin did not seek to be heard as to whether the letter conveys that imputation. I am satisfied that it does. Although the parts of the matter complained of which address that issue focus primarily on the conduct of the relevant councillors, I think the reader would readily infer from the tenor of the letter as a whole that the mirror criticism was being levelled at the person alleged to have made the donations in question. There is no dispute that the imputation otherwise conforms to the requirement of s 26 of the Defamation Act that it arise "in addition to" the plaintiff's imputations. Indeed, the case provides a rare illustration of the use of the defence in the circumstances intended by Parliament, that is, where the plaintiff has sued on one defamatory sting and chosen not to sue on another. 31For those reasons, I am satisfied that the plaintiff's imputations (b), (c) and (f) and the defendant's contextual imputation are conveyed by the matter complained of. I am not satisfied that imputations (a), (d) and (e) are conveyed.