Supreme Court New South Wales Medium Neutral Citation: Sharp v Harbour Radio Pty Limited [2015] NSWSC 1536 Hearing dates: 2 October 2015 Date of orders: 02 October 2015 Decision date: 02 October 2015 Jurisdiction: Common Law Before: McCallum J Decision: Imputations 10.1, 10.3 and 10.4 will not go to the tribunal of fact. Plaintiffs have leave to re-plead those imputations and to file an amended statement of claim in accordance with the matters the subject of argument this morning. I order the plaintiffs to pay the defendants' costs of the listing on 18 September 2015 and of today. Catchwords: DEFAMATION – pleadings – imputations – capacity Legislation Cited: Civil Procedure Act 2005 (NSW) Category: Procedural and other rulings Parties: Steven Sharp (first plaintiff) Tom Issa (second plaintiff) Harbour Radio Pty Limited (first defendant) Ray Hadley (second defendant) Representation: Counsel: I Pike SC with M J Lewis (plaintiffs) M Richardson (defendants) Solicitors: John De Mestre & Co (plaintiffs) Banki Haddock Fiora (defendants) File Number(s): 2015/227320 Publication restriction: None Judgment – Ex Tempore 1. HER HONOUR: This is an action for defamation commenced by two members of the board of Parramatta Rugby League Club against Harbour Radio Pty Limited and Mr Ray Hadley, a presenter on one of the radio programmes broadcast by that company. The proceedings are before the Court today for the first listing in accordance with practice note SC CL 4. 2. The parties had a large number of disagreements as to the form of the imputations pleaded by the plaintiffs and, in some instances, the capacity of the matters complained of to convey those imputations. During the course of argument this morning, both counsel have engaged in what I would gratefully acknowledge to be a constructive exchange about those objections which has, in almost all instances, resulted in either agreement or an indication on behalf of the plaintiffs that particular imputations would be repleaded in accordance with the discussion. The parties are to be commended for taking that approach which, in a real sense, furthers the overriding purpose of the Civil Procedure Act 2005 (NSW) stated in s 56 of the Act. 3. The only remaining objections which require a ruling are two objections in relation to imputations pleaded to arise in respect of the third matter complained of. The first is a capacity objection. It is agreed that the Court should determine that as a separate question in the proceedings. Each plaintiff pleads an imputation in the following terms: "That he, as chairman/director of Parramatta Rugby Leagues Club is reasonably suspected of misappropriating money belonging to the Club." 1. That imputation is alleged to arise primarily from the following words spoken by the presenter: "But it should be of grave concern to everyone that, you know, the club stumbled from one board to another to another, and it appears it is being run like a little fiefdom at the moment. They're over the salary cap, they face the possibility of losing four competition points in the 2016, and I think the NRL should send in forensic accountants. I think they should send in. It's a very important club in the general scheme of things, Parramatta, based in western Sydney as it is, and I don't think it should be the particular plaything of a board of people who appear to be just a little out of their depth." 1. The plaintiffs also specify some further material in the matter complained of as giving rise to the imputation. In those parts of the matter complained of, the presenter indicates his encouragement to the NRL to take a role in hiring the next CEO to Parramatta and makes reference to the appointment by one of the plaintiffs of an interim CEO, John Boulous. 2. The principles for determining whether defamatory matter is reasonably capable of conveying an imputation specified by the plaintiffs are well known and need not be rehearsed in this judgment. Some of the relevant authorities are listed in para 10 of the plaintiffs' written submissions. They are all authorities that are familiar to me. Ultimately, the test is one of reasonableness; the question is whether the words are reasonably capable of bearing the specified meaning. 3. Mr Pike of Senior Counsel, who appears with Mr Lewis for the plaintiffs, submitted that the imputation of suspicion of misappropriation derives primarily from the exhortation by the presenter for the NRL to send in forensic accountants. He submitted that the ordinary reasonable listener would understand that the role of forensic accountants is to go in to investigate the financial affairs of an entity broadly. The words of the matter complained of refer specifically to the breach of the salary cap but Mr Pike submitted that, by the reference to forensic accountants, the ordinary reasonable listener would understand that a broader investigation was proposed, going beyond that issue. He submitted that the whole flavour of the article is the need for investigation of the financial affairs of the company. So much may be accepted. 4. In my view, acknowledging the great care with which the Court should approach an application to have an imputation ruled incapable of arising from the matter complained of, I do not think the suggestion of misappropriation on the part of the plaintiffs could be derived by the ordinary reasonable listener except on a most strained hearing of the matter complained of. 5. As submitted by Mr Richardson on behalf of the defendants, in the language of the earlier jurisprudence in this field of "inference upon inference", one would have first to think that there had been some misappropriation (as to which there is no suggestion at all in the matter complained of); secondly, to think that that was the reason the forensic accountants were being sent in rather than other matters expressly pointed to in the matter complained of; and thirdly, to think that the plaintiffs were the people (or among the people) responsible for any such misappropriation. In my view, each of those steps stretches the meaning of the matter complained of too far from what the words reasonably bear. My ruling is that imputations 10.1 and 10.3 are incapable of arising. 6. The only other objection requiring a ruling is an objection to imputation 10.4, which is that: The second plaintiff, Mr Issa, as director of the Parramatta Rugby Leagues Club acted dishonestly in that he was instrumentally responsible for appointing his very close friend, John Boulous, as interim CEO in preference to more deserving and better qualified candidates. 1. After hearing argument in respect of that imputation, I have two concerns as to its content. First, whilst it may readily be accepted that the matter complained of conveys or attributes to Mr Issa a form of nepotism in his engagement of Mr Boulous as interim CEO, I do not think the notion of nepotism is an attribution of dishonesty. It certainly is an attribution of some form of conduct which would be likely to lower the reputation of a person in the estimation of ordinary decent members of society but I do not think dishonesty hits the mark. 2. Separately, as submitted by Mr Richardson, the matter complained of does not suggest and, in my view, is not capable of suggesting that at any point Mr Issa made a positive election as between Mr Boulous and some other existing more deserving and better qualified candidate who had presented himself or herself for selection. Rather, it is a bare allegation of nepotism; that is, of appointing Mr Boulous without regard to whether a more deserving and better qualified candidate might have been identified. 3. For those reasons, I would rule imputation 10.4 also to be incapable of arising. The remaining issues raised and agreed during argument must necessarily be the subject of an amendment to the statement of claim. It may be that the plaintiffs will wish to re-plead an imputation of incompetence or some like attribution in lieu of imputations 10.1 and 10.3 and accordingly I would be inclined to grant leave to re-plead those imputations. Equally imputation 10.4, as indicated, is, in my view, amenable to reformulation to capture the sting of what is attributed to Mr Issa in respect of the appointment of the interim CEO. I would accordingly grant leave also to re-plead that imputation. 4. The orders are that imputations 10.1, 10.3 and 10.4 will not go to the tribunal of fact and that the plaintiff has leave to re-plead those imputations and to file an amended statement of claim in accordance with the matters the subject of argument this morning. 5. I order the plaintiffs to pay the defendant's costs of the listing on 18 September 2015 and of today. ********** 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. Decision last updated: 16 October 2015