Markham v Fairfax Media Publications Pty Ltd [2013] NSWSC 1839

Supreme Court New South Wales

Medium Neutral Citation: Markham v Fairfax Media Publications Pty Ltd [2013] NSWSC 1839 Hearing dates: 16 October 2013 Decision date: 16 October 2013 Before: McCallum J Decision: That imputations (a) and (g) be struck out with leave to replead in accordance with these reasons Catchwords: DEFAMATION - objections to imputations - imputations struck out in current form with leave to replead Category: Interlocutory applications Parties: James Neville Andrew Markham (plaintiff) Fairfax Media Publications Pty Ltd (first defendant) Linton Besser (third defendant) Representation: Counsel: M Richardson (plaintiff) ATS Dawson (defendants) Solicitors: Kennedys (plaintiff) Banki Haddock Fiora (defendants) File Number(s): 2013/43959 Publication restriction: None

Judgment - ex tempore 1HER HONOUR: These are proceedings for defamation brought by Mr James Markham against Fairfax Media Publications Proprietary Limited and others arising out of the publication of a series of articles in the Sun Herald in its printed and online version. This judgment determines the defendants' objections to the imputations relied upon by the plaintiff. 2Broadly speaking, the article was concerned with the fortunes of the McDonald College, a performing arts school founded by the Markham family. The article focused on a number of aspects of recent events at the school, including a proposed sale and development of part of the property held on trust for the school. 3The first imputation relied upon by the plaintiff is that he knowingly took unfair advantage of the not for profit McDonald College by causing Markham Corporation to enter into an agreement for the acquisition and development of land under which Markham Corporation would make a substantial profit to which the college was entitled. As in the case of each imputation relied upon by the plaintiff, the defendants' objection to that imputation is that it is not reasonably capable of being conveyed by the matter complained of. 4I should note in that context that there are in fact three matters complained of which are in identical terms save for different headlines. There was no suggestion in argument that the separate articles raised separate arguments as to capacity, except for the fact that the headline of the third matter complained of is arguably more derogatory than the headline for the first two, arguably lending more derogatory meaning to the article. 5The defendants' principle objection to imputation (a) was that the article focuses on different members of the Markham family at different times, and that there is nothing in the matter complained of to link the plaintiff, Mr James Markham, with the conduct of those members of the Markham family evidently involved in the governance of the school. 6The matter complained of refers to Mr James Markham at three separate points. First at line 66, where it is stated that he brought a proposal to the school to develop a corner of the college through his property development firm Markham Corporation Proprietary Limited and would fund the venture by pooling the money of investors, targeting a return of 20 to 30 per cent per year for investors. 7Secondly, at line 73 of the matter complained of, it is stated that the plaintiff's mother Margaret Markham "declared a conflict of interest when James presented a formal proposal" to the board. 8And finally, at line 173, the article reports that later in January, the chairman of the board wrote to the plaintiff seeking revisions to the agreement. Otherwise, the defendants submitted that the article makes it plain that the question of acceptance of the development proposal put to the board by the plaintiff was dealt with by other members of the Markham family in their various capacities in the governance of the school. 9Mr Dawson, who appears for the defendants, submitted that there is nothing in the matter complained of to suggest any communication between the plaintiff and the other members of the family amounting to a form of collusion between him and them. He submitted that the key difficulty with imputation (a), and indeed the other imputations which raise the concept of acting in concert or in collusion, being imputations (b), (c) and (g), was that the notion of defamatory sting conveyed by those imputations would depend upon not only the existence of discussions between members of the family, as to which there is no reference in the article, but such discussions working to influence other members of the board. 10In my view, the article is plainly capable of conveying the suggestion that the Markham family worked together or in collusion or concert on this issue. As noted by Mr Richardson who appears for the plaintiff, there are several references to the Markham family as a whole. The submission made by Mr Dawson could only found a ruling that the collusion imputations will not go to the jury if the article could only reasonably be read in those several references to the Markham family as excluding James Markham. 11In my view, this is plainly an issue which should be left to the tribunal of fact. Separately, the defendants objected to imputation (a) on the basis of the last words of the imputation which equate the profit the Markham Corporation may make with a profit "to which the college was entitled". 12Mr Richardson acknowledged in argument that there may be some possibility of improving upon the notion conveyed by those words, accepting that the two profits referred to would not be identical. He suggested that the imputation may be amenable to amendment by replacement of those words with words along the lines "to the financial detriment of the college" or words to that effect. 13For that limited reason, I would be inclined to strike out the imputation in its current form as being incapable of arising because I do not think the article suggests any entitlement on the part of the college to the profits the Markham Corporation would make from the property development referred to, but I would grant leave to replead along the lines foreshadowed by Mr Richardson. 14It is convenient to deal with imputations (b) and (c) together. They are that the plaintiff colluded with other members of the Markham family to use their collective influence and to exert pressure on the McDonald College to sell land to Markham Corporation at an under value and in order to benefit his company Markham Corporation. Imputation (c) is in identical terms, except that the words at the conclusion of the imputation are a reference to the Markham family and a Markham family company in place of the reference to the plaintiff's company. 15The first objection to those imputations related to the notion of collusion with which I have already dealt. Separately, Mr Dawson submitted that there is nothing in the matter complained of to suggest that the Markham family colluded to exert pressure on the college. 16Mr Richardson identified three parts of the matter complained of which he submitted are capable of conveying the notion of pressure exerted on the board by the Markham family. 17First at lines 115 to 119, the article refers to Mrs Markham specifically instructing the school principal not to seek alternative expressions of interest. That is plainly a reference to expressions of interest alternative to that put before the board by the plaintiff. 18The reference to that conversation comes in the context of a suggestion that Mrs Markham may subsequently have denied making any such remark, lending colour to the reading of that event as an incident of Mrs Markham placing pressure on others in respect of the board's consideration of the proposal. 19Secondly, the article refers to at line 128 to some members of the board or some directors actively supporting the plaintiff's development proposal, whilst other "appear to have become so accustomed to the Markhams' influence at the school that this simply became the latest episode in a long running family drama." Mr Richardson submitted that the notion of the Markham family having a long running influence on the board added to the flavour of pressure being brought to bear by the family. 20Thirdly, Mr Richardson noted that the article in two places conveys the notion that, when met with resistance, the family crushes it. That comes from references to the fact that Mr Watkins, who evidently spoke out against the plaintiff's development proposal, was subsequently removed. As noted by Mr Richardson, the language in which that incident is described is quite strong, describing Mr Watkins as being "ousted as chairman" and later stating at line 176 that he was "deposed in a push that horrified the school principal". 21I am satisfied that on a capacity basis and having regard to the principles stated in the decision of the High Court in Clavell as to the test to be applied at this stage of argument, there is enough in the matter complained of to convey the notion of the Markham family exerting pressure on the college. 22Imputation (e) is that the plaintiff greedily sought to profit off the proposed development of land owned by a not for profit college that had been founded and nurtured by his own family. The principal objection to that imputation was that it does not differ in substance from imputation (a). 23Whilst the final resolution of that contention will have to abide the reformulation of imputation (a), I would indicate that I can see a difference between the notion of the greedy pursuit of profit and knowingly taking unfair advantage. However, as I have indicated, that issue should probably abide the reformulation of imputation (a). 24Imputation (f) is that the plaintiff knowingly employed a misleading valuation to make the proposal of his company to develop land owned by the not for profit McDonald College appear fairer and more attractive than it actually was. 25Mr Dawson's focus in respect of that submission was upon the phrase "a misleading valuation". He accepted that the matter complained of characterised the valuation relied upon or reportedly relied upon by the plaintiff as being flawed in its methodology, but submitted that there is nothing in the matter complained of to suggest any intention on the part of the plaintiff to mislead by relying upon such a valuation. 26Mr Richardson noted six aspects of the valuation attributed to it in the article. The article characterises the valuation as being based on an irregular calculation, flawed, substantially lower than one submitted in an unsolicited bid by Colliers, and lower than one obtained by an expert canvassed by the Sun Herald. 27He further noted that whilst the article adverts to the possibility that the school could receive a greater portion of the profit through the Markham proposal than the values proposed by Colliers, that concession is immediately under cut in the article by the following sentence: "But the question remains could a competitive tender have extracted a better offer?" 28And sixthly, Mr Richardson noted the reported view of the chairman Mr Watkins that: "There is significant interest in the property indicating a substantial value over and above the proposal currently before the council." 29Whilst there is nothing in terms in the article suggesting any intention on the part of the plaintiff to mislead with the valuation put forward by him, the overall tenor of the article, in my view, is capable of conveying the meaning to the ordinary reasonable reader that the valuation relied upon by the plaintiff would have misled the board as to the true value of the asset under consideration. That in my view is quintessentially a question for the tribunal of fact and does not fall into the narrow category of imputations which a judge can properly withdraw from the jury on the basis that it is not reasonably capable of being conveyed. 30The last imputation is imputation (g), that the plaintiff colluded with other members of the Markham family to remove Mr Rick Watkins from the board of McDonald College as retribution for his opposition to the plaintiff's company development proposal for McDonald College. 31There is an important distinction between this allegation of collusion between the plaintiff and other members of his family, and those contained in imputations (a), (b), and (c). Imputations (a), (b), and (c) deal with the proposal brought forward to the board which is expressly described in the article as having been brought to the board by the plaintiff and then considered by the board which included other members of his family. 32The events reported as to the removal of Mr Watkins, insofar as I can see from the article pertain entirely to matters which occurred within the boardroom. There is no suggestion of any involvement or input by the plaintiff at that point of the transaction which comes much later than the matters attributed to the plaintiff. 33In my view, it would be a meaning that could only be gleaned from the matter complained of by a strained reading of the article, and I would accept as submitted by Mr Dawson that imputation (g) is not reasonably capable of being conveyed. 34The orders accordingly are that imputations (a) and (g) be struck out with leave to replead in accordance with these reasons.