Supreme Court New South Wales Medium Neutral Citation: Le Mottee v Dingle [2017] NSWSC 1270 Hearing dates: 16 June 2017 Decision date: 16 June 2017 Jurisdiction: Common Law Before: McCallum J Decision: Plaintiffs directed to provide verified particulars of the contention that the second plaintiff is an excluded corporation within the meaning of s 9 of the Defamation Act 2005 (NSW) Catchwords: DEFAMATION – action brought by corporation – whether corporate plaintiff adequately specified basis for contention that it has standing to sue – requirement under s 9 of the Defamation Act to establish that the corporation employs fewer than 10 persons – second plaintiff having eight full-time, one part-time and two casual employees whose average hours equal 97% of 10 full-time employees – company director (the first plaintiff) not included in that calculation – application for further particulars with verification Legislation Cited: Defamation Act 2005 (NSW), s 9 Civil Procedure Act 2005 (NSW), 56 Category: Procedural and other rulings Parties: Paul Le Mottee (first plaintiff) Le Mottee Group Pty Ltd (second plaintiff) Geoff Dingle (first defendant) Linda Bowden (second defendant) Ken Kneip (third defendant) Representation: Counsel: B Symons (plaintiffs) S Chrysanthou (first defendant) L Barnett (second and third defendants) Solicitors: Catalyst Legal (plaintiffs) Moray & Agnew (defendants) File Number(s): 2017/86754 Judgment 1. HER HONOUR: These are proceedings for defamation commenced by two plaintiffs. The first is Mr Paul Le Mottee. The second Le Mottee Group Pty Ltd, a company of which Mr Le Mottee is the director. 2. The fact that the second plaintiff is a company raises the need to consider s 9 of the Defamation Act 2005 (NSW), which restricts the right of companies to sue for defamation. The section provides: 9 Certain corporations do not have cause of action for defamation (1) A corporation has no cause of action for defamation in relation to the publication of defamatory matter about the corporation unless it was an excluded corporation at the time of the publication. (2) A corporation is an excluded corporation if: (a) the objects for which it is formed do not include obtaining financial gain for its members or corporators, or (b) it employs fewer than 10 persons and is not related to another corporation, and the corporation is not a public body. 1. The issue whether the corporate plaintiff falls within the definition of an excluded corporation was raised in correspondence with the plaintiffs on behalf of the defendants in a letter dated 26 May 2017 sent by the solicitor for the second defendant. The first defendant seeks to raise the same issue. 2. The existing pleading, an amended statement of claim filed on 19 May 2017, addresses that issue by contending that the second plaintiff was an excluded corporation because it is not related to any other corporation and had fewer than ten full-time employees as at the date of publication. Particulars of that contention assert that the company had fewer than ten full-time employees: … in that it had one director who is not an employee and nine employees who worked the following hours: 1. Eight full-time employees, on average 38 hours a week;. 2. Two casual employees working on average 30 hours per week; and 3. One part-time employee working, on average, 4.5 hours per week. 1. Section 9 has been construed, in its reference to a person the company employs, to refer to a full-time employee. Assuming that means a person who works a 38-hour week, the defendants calculated that, excluding the director Mr Le Mottee, the identified employees reached 9.72 employees, falling some 2.8% short of the excluding quota (my calculation reaches a different conclusion but the difference is insignificant). 2. In those circumstances, understandably, the defendants sought to press the plaintiffs as to the position of the director, Mr Le Mottee. The particulars sought in the letter of 26 May 2017 were: We presume that the reference to "1 Director" is a reference to the first plaintiff. Is it alleged that the first plaintiff received no wages, salary or director's fees from the second plaintiff? 1. The plaintiffs responded to that question by reiterating that the statement of claim asserts that a director is not an employee and asserting that the question was therefore irrelevant. I disagree. In my view, the defendants are entitled to the information sought. Plainly, there will be a real issue in these proceedings as to whether the second plaintiff is an excluded corporation within the meaning of s 9 of the Defamation Act. 2. Ms Chrysanthou has foreshadowed the prospect of having that issue determined as a separate question and to that end seeks an order that the plaintiffs answer the questions set out above in verified form. In my view, that is a sensible course calculated to facilitate the determination of that issue in accordance with the overriding purpose stated in s 56 of the Civil Procedure Act 2005 (NSW). 3. Separately, a question is raised on behalf of the second defendant as to the basis on which she should be held responsible for the further circulation of the defamation sought to be pleaded in par 20 of a proposed further amended pleading, which provides: The hatred and ridicule suffered by Paul Le Mottee and Le Mottee Group has extended beyond those who received the email containing the matter complained of from Linda Bowden and Ken Kniepp [sic] by reason of the email or the contents thereof being read by Wayne Wallis, the General Manager of the Port Stephens Council, who then sent a further email setting out the contents of the original email and addressing the allegations contained in the email to the persons listed below and did so because he formed the view that the email from Linda Bowden and Ken Kniepp had been read by those persons and that he ought to protect the good names of Mr Le Mottee and the Port Stephens Council by putting forward his view of the allegations made in the mail. 1. A list of the names of the alleged recipients of the email followed. 2. It will be necessary for the plaintiff to confirm whether it is contended that it was a natural and probable consequence of Linda Bowden's sending the email to the persons identified in par 8 of the proposed further amended pleading that it would be drawn to the attention of Wayne Wallis, the General Manager of the council. If that is not the basis on which par 20 is pleaded, then it should be indicated what is the basis for that contention. 3. Finally, Ms Chrysanthou, on behalf of the first defendant, seeks further particulars of the allegation in par 19 of the proposed further amended pleading which presently reads: By reason of the publication of the matter complained of the Le Mottee Group has been brought into hatred and ridicule and has been gravely injured in its character and has suffered hurt, embarrassment and pecuniary loss, and will continue to suffer the same. 1. As correctly noted by Ms Chrysanthou, the paragraph is deficient, at least in respect of the contention or assumption that a company is capable of suffering hurt and embarrassment. Ms Chrysanthou submits that the issue is more complex than that and proposes to seek further particulars or raise an objection in correspondence within the next seven days. 2. For those reasons I make the following directions: 1. Direct the first defendant to write to the plaintiffs within seven days raising any objection in respect of par 19 of the proposed further amended statement of claim; 2. Direct the plaintiffs, within a further 14 days thereafter, to provide: 1. A verified response to question 1 in the letter dated 26 May 2017; 2. Confirmation of the question raised in this judgment as to par 20 of the proposed further amended statement of claim; 3. A response to any letter sent in accordance with order (1). 1. I order that the plaintiffs pay the defendants' costs of today. 2. I stand the proceedings over to 4 August 2017. 3. I make orders 1 and 2 in the judgment handed up by the third defendant. ********** 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: 04 October 2017